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Positive Cash Flow Extractor Manufacturer Turns its Mind to Psychedelics

Dave Jackson Dave Jackson, Stockhouse
2 Comments| January 19, 2021

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“It’s all about visibility.” That’s how Calgary, AB-based MedXtractor Corp. (MXT) (CSE.MXT, Forum) is changing both the future of cannabis extraction and the burgeoning mental health science of psychedelics.

Focused on the identification, development and commercialization of technical solutions and relying on positive cash flows from its patented CO2-base extractors, MXT has recently launched SHAMAN – an artificial intelligence-assisted data engine project designed to predict probabilities of a variety of afflictions and the potential of psychedelics as treatment.

And the man at the helm of the Company is President, Founder and Director, James Durward, Mr. Durward provides decades of experience covering multiple startups, public companies, technical design, financing – both public and private – and M&A. He is also a patented inventor with over ten years experience in metadata specification, image analysis and pattern recognition.

Stockhouse Editorial caught up with James to talk about the latest company happenings and all things MedXtractor.

SH: So, James, what exactly does MedXtractor do?

JD: We conceptualize, develop and commercialize highly-targeted technical solutions. When considering entry into a market our first step is to perform a "deep dive" to identify core issues; then to determine which core issue we want to address. Then we define a solution "specification" to address the selected issue thereafter proceeding to develop and commercialize the solution. We are very specific in our approach: identify, specify, develop, commercialize in the shortest time frame possible. We don't do long term, cash-draining research projects.

SH: Can you give us an example?

Yes. Take the cannabis space. A few years ago we determined that extracts were the future. Carbon Dioxide ("CO2")-based extractors were new to the cannabis industry and produced the cleanest extracts - something that everyone wanted and the first choice for the rapidly-expanding vape pen market. The problem was the price of the CO2 extractors, often more than $100,000, precluded craft growers. As numerous CO2 extractor manufacturers emerged that targeted a small number of well-financed large-scale growers, our research showed that the cannabis industry contained a far larger number of craft growers so we set out to specify, develop and commercialize a CO2-based extractor that craft growers could afford. This required a very clear understanding of the thermodynamic issues associated with CO2-based extraction, an understanding that is reflected in our US and Canadian patents. The end result was a series of affordable, patented CO2-based extractors that we now sell to craft growers worldwide. While large CO2 extractor manufacturers struggle with declining sales and squeezed margins, our CO2 extractor operations are cash flow positive and growing. Some of the CO2 cash flow was used to specify, develop and commercialize an alcohol-based extractor that targeted the craft edibles market. That extractor is now also a cash flow contributor. We have recently announced our SHAMAN project and it will be developed using the same philosophy.

SH: Other companies spend millions on product development. How do you do it so inexpensively?

In short, we specify before we build while many companies start building before they specify. Specification involves not only the solution, but also the target issue. Using a real estate analogy, think of the solution as the "house" and the target issue as the "location". Building without specification is akin to trying to build a house without blueprints, in a bad location. We also use a tiger team approach - a small team of specialists executing the specification rather than a large number of people tasked with building without specification. This allows for tight cash management. After two years of following this philosophy we have most of the previously raised capital still in the bank, in cash. In short, we are efficient operators with a proven ability to maximize return on investment.

SH: Switching gears, can you tell us about SHAMAN? Sounds fascinating!

JD: At its core, SHAMAN is an artificial intelligence-based system designed to predict probabilities based primarily on unbiased, unemotional factual data. While the core processes can be applied to many fields, SHAMAN's initial focus is on the potential probability of psychedelics being replacements for psychotropic drugs in the treatment of certain mental afflictions. Psychotropics are defined as "any drug capable of affecting the mind, emotions and behaviour" whereas Psychedelics are "a hallucinogenic class whose primary effect is to trigger non-ordinary states of consciousness". Psychotropics are typically man-made and often have long lists of potentially negative side effects. Psychedelics are often nature-based with anecdotal evidence supporting little or no negative side effects. SHAMAN's goal is to first predict a person's probability of developing an affliction, and to then predict whether Psychedelics may be used instead of Psychotropics in treatment thereof. This is a complex issue where detailed specification is extremely important for cost control.

SH: How much will SHAMAN cost and how long will it take to develop?

JD: The specification in ongoing and expected to be complete by March 2021. We expect a running model by May 2021. This initial phase will be internally-funded from existing cash. The next phase involves the build-up to critical mass of the proprietary validated database. This is expected to take until later 2021 whereafter the commercialization phase can begin. Validated database build-out and commercialization will probably require additional financing but is not expected to require more than $1,000,000.

SH: How does SHAMAN really work?

JD: Very simplistically, let's say you experience severe chest pain and you think it may be a heart attack so you go to your Doctor. Now let's say your Doctor has been practicing for two years, has seen 200 patients in total and is not a specialist. You tell him you think you may have had a heart attack. He asks you a short series of questions and asks you to describe the symptoms. After a short consideration he diagnoses a panic attack and prescribes the psychotropic drug XANAX. XANAX side effects include insomnia, memory problems and loss of interest in sex.

Now let's say you want a second opinion so you see another Doctor, also not a specialist, but with 20 years of experience and having seen over 2000 patients. The Doctor asks you many more questions including a more detailed description of the symptoms. The Doctor diagnoses angina and prescribes Propranolol, a different drug with the side effects of hair loss and diarrhea.

Now let’s say you ask a Doctor with 500 years of experience who has seen over a million patients and has multiple specialties. The Doctor asks a LOT of questions and immediately correlates all answers with all previous experience. The Doctor suggests heart disease and recommends you see a heart specialist. This is the promise of SHAMAN. SHAMAN is not a diagnostic tool, makes no medical claims and is not to be considered a medical device. It is a data analysis tool designed to provide AI-assisted opinions only.

SH: Why is your market capitalization so low?

JD: We have focused on business development and positive cash flow, not on stock market visibility - something we are now starting to pay attention to.

SH: And finally, James, despite your low market cap it would be remiss of me not to mention your stock has had a very sharp incline…quadrupling over the last month. What can you tell our investor audience regarding the current valuation of your stock and why you think it’s still a good buy right now?

JD: Yes, we've seen quite a jump. But you have to remember that before the jump our market cap was only around $1.3 million and that was with positive cash flow and almost $600,000 in cash and no debt. Even now our market cap is only around $4.6 million, far lower than other cannabis or psychedelic companies - despite the fact that those other companies are not even cash flow positive. I think it's a good buy because we have a proven ability to identify profitable applications and to turn those applications into positive cash flow in a relatively short period of time.

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FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.

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