Investors in Alkame Holdings, Inc. (OTCPINK: ALKM) were met with a more than 40% increase last week. The jump comes as investors evaluate several deals that could create a revenue-generating surge later this year. Since April 5th, shares have seen steady accumulation, closing the week near a level not seen in almost two months. In fact, last Friday's closing price of $0.0035 is targeting highs for the year set back in February and adds to the already staggering 483% year-to-date increase.
The run appears to have started ahead of a planned April update from PAO Group, Inc. (OTC Pink: PAOG) about its CBD-based nutraceuticals program that includes ALKM as its packing and logistics partner. Investors look particularly interested in how PAOG's plan to accelerate its launch date for two nutraceutical assets can impact ALKM's 2021 revenues. Obviously, the calculation, based on the 40% share price increase, is bullish and has put ALKM stock in play. Better still, if PAO Group hits its targets, Alkame shares could be in store for an exponential run higher.
Here's why:
Value Through West Coast Co-Packer. Inc. Subsidiary
Alkame Holdings owns a value driver that is inking deals. In fact, several potentially lucrative deals made through its wholly-owned subsidiary West Coast Co-Packer, Inc. could generate multiple near-term revenue streams. And those deals extend beyond those made with PAO Group.
Thus far, in 2021, West Coast Co-Packer, Inc. signed a development and production agreement with Shmellins Market, LLC., is enhancing its relationship with Puration, Inc. (OTC Pink; PURA) and is capitalizing on a potentially enormous opportunity by distributing a potential best-in-class hand sanitizer, Handout Protection, to meet substantial demand created by the ongoing COVID-19 pandemic.
The deal to distribute Handout Protection clearly attracted investor's attention. That announcement sent shares soaring by more than 315% in February after West Coast Co-Packer received an initial purchase order for Handout Protection hand sanitizer and wash combo single-use packets. That agreement came through its Canadian Personal Protection Equipment (PPE) distributor, TheraProducts Canada, Inc. Investors expect substantial returns from the deal, especially with the product's potential best-in-class COVID-19 bacteria-killing ability.
The better news is that the product could turn into a long-term revenue driver for the company, with PPE products expected to remain in high demand for public and private sector use. The niche for Handout Protection is that, unlike some competing products, it shows effectiveness in killing known COVID-19 strains and the new coronavirus variants known to spread 50% quicker than COVID-19. Perhaps more importantly, it's also one of the few portable hand wash and sanitizer packets that allow people to wash and sanitize their entire hand.
That could help make the product a favorite choice among medical professionals. Why? Because a single package allows users to clean their palms, the tops and sides of the hands, fingers, under the nails, and up to the wrist to fight and kill bacteria and germs. It's the only known single-use sanitizer that offers such a comprehensive cleaning.
Better still, despite the encouraging signs that the pandemic's grip on the nation is loosening, it's unlikely that demand for effective single-use sanitizing and germ-killing products will decline. In that respect, it's excellent news for ALKM. And meeting substantial long-term demand from thousands of potential clients could translate into significant revenues for the remainder of the year.
While that deal could fuel ALKM's growth in the immediate term, other agreements could help push the already impressive 483% YTD gains higher throughout the remainder of this year.
Generating value Through Logistical Expertise
Investors responded well to ALKM announcing its role as the co-packer and logistics partner for PAO Group, Inc's CBD RELAX-RX nutraceutical product. That deal is accretive to one already in place to co-pack and distribute PAO Group's, RespRx, a potentially game-changing CBD-based nutraceutical targeting the treatment of Chronic Obstructive Pulmonary Disorder (COPD).
In fact, news of that partnership sent shares soaring as far back as February, with investors evaluating the impact RespRx could have on revenues. Now, with CBD RELAX-RX added to the mix, expectations are even higher for revenues to spike later this year. Importantly, not only is the product targeting a massive depression and anxiety market, but PAO also expects to have the product ready for launch as early as the third quarter of this year. Better still, with PAO Group working with a contract research organization (CRO), Veristat, both RespRx and RELAX-RX could accelerate through the development, approval, and marketing process.
The excellent news is that the two products could come to the market at a time when investors are again paying attention to the massive and still emerging CBD-based treatment sector. And positioning ahead of the planned release could help ALKM shares to surge. Notably, for ALKM, the rewards can be substantial.
In fact, if PAO Group earns even a small piece of a combined $20 billion market opportunity from its products, ALKM could experience massive growth from being its logistics partner. And not only are both treatment markets expected to nearly double by 2025, which also enhances Alkame's potential earnings, but ALKM can also benefit as the logistics partner from other CBD-based therapeutics in mid to late-stage development with partner companies.
Its co-packing deal with Puration, Inc. could be the most near-term catalyst.
A Better CBD-Infused Water, EVERx
Again, through its wholly-owned subsidiary, West Coast Co-Packer, Inc., ALKM announced an expansion of its partnership with Puration, Inc. as the bottler of EVERx CBD-infused Sports Water. That product generated sales of roughly $2 million in 2019. In Q4, Puration guided that revenues in 2020 will likely surpass $2 million, with sales momentum expected to increase in 2021. Those results are expected this month. The takeaway is simple- growth for EVERx translates to increased revenues for ALKM. Thus, the expected sales update from Puration could have a positive impact on ALKM's valuation.
Better still, the two are capitalizing on additional market opportunities. Last month, ALKM said it is collaborating to bring to market multiple new CBD-infused consumer products, including a CBD-infused liquid sugar and a CBD pet food supplement. Other development-stage products include CBD-infused consumer products and hemp-derived beverages and edibles.
Notably, these products target a substantial rise in consumer demand, evidenced by CBD-based products flying off the shelves as millions of users support the compound's effectiveness in treating a variety of conditions.
The sum of the parts of ALKM could lead to a breakout year.
Multiple Shots On Revenue-Generating Goal
The best-case scenario for ALKM in 2021 is that they succeed in helping to facilitate the launch of multiple products to market in billion-dollar categories. However, their current deals should not be underappreciated by investors, either. In fact, combining the impact from sales of EVERx and Handout Protection on their own could provide fuel for ALKM to deliver record-breaking performance.
Also, keep in mind that ALKM could drive its value higher through ownership of more than ten subsidiaries, strengthening the investment proposition through exposure to multiple market sectors. Those subsidiaries not only spread risk but also create additional opportunities.
Therefore, don't consider ALKM an exclusive play on future opportunities in the CBD market. Instead, focus on the programs that could generate massive value this year. Updates from at least two are expected soon, and both could influence meaningful gains in the stock price. Better still, with the back half of 2021 setting up for ALKM to benefit from multiple shots on goal through its existing partnerships, the best could be yet to come.
Thus, at these levels, the stock price could be exposing a massive investment opportunity.
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