Alkame Holdings, Inc. (OTCPINK: ALKM) shares completed March by consolidating at the $0.0026 level. The great news is that with the stock still up roughly 116% since the start of February, investors appeared only willing to give back a tiny part of its YTD run. That could be good news heading into April, and with ALKM positioned to benefit from several potentially lucrative agreements, the stock could move higher on several updates.
Investors are already focused on how recent deals made through its wholly-owned subsidiary West Coast Co-Packer, Inc., can impact ALKM's growth. Several deals were announced since 2021. The most recent has West Coast Co-Packer, Inc. entering a development and production agreement with Shmellins Market, LLC. to develop and beta test consumer products. Shmellins is an emerging consumer products company that could provide substantial business to West Coast. The initial agreement leverages West Coast's logistics expertise to extend Shmellin's product reach. The deal is a win-win.
Notably, that deal is one of three made by West Coast Co-Packer this year.
Handout Protection Sanitizer
A potentially significant and long-term deal was announced in February when ALKM said West Coast Co-Packer received an initial purchase order for Handout Protection hand sanitizer and wash combo single-use packets. The agreement was made through their Canadian Personal Protection Equipment (PPE) distributor, TheraProducts Canada, Inc., and could become a long-term value driver for ALKM by capitalizing on that product's potential best-in-class COVID-19 bacteria-killing ability.
Moreover, the recent decline in COVID-19 cases has little bearing on the potential of the product. In fact, Handout Protection could become a staple item for consumers by showing effectiveness in killing known COVID-19 strains and the new coronavirus variants known to spread 50% quicker than COVID-19. It's also important to note that it's also one of the few portable hand wash and sanitizer packets that allow people to wash and sanitize their entire hand.
Better still, it meets the needs of medical professionals by enabling users to clean their palms and the tops and sides of the hands, including the fingers, under the nails, and up to the wrist to fight and kill bacteria and germs. And, even as the pandemic gets put under control, it's unlikely that demand for effective sanitizing and germ-killing products will decline. That's excellent news for ALKM...and could be a massive driver in 2021.
Other deals are in place. And those agreements could add to the 333% YTD gains in the stock price.
Co-Packing Agreements Drive Expected Revenue Growth
In March, it was announced that ALKM will be the co-packer for Pao Group, Inc's (OTC Pink: PAOG) CBD RELAX-RX nutraceutical product. News of that deal sent shares soaring, with investors evaluating the impact that drug could have on generating revenues for ALKM. It will be, after all, targeting the massive anxiety and depression market.
It's also CBD-related, and despite a rotation out of the sector by institutional money in Q1, it appears that money is flowing back toward these stocks as the new quarter begins. For PAOG and ALKM, the rewards can be substantial. And even earning a piece could create exponential gains for each stock. As noted, CBD RELAX-RX targets an anxiety and depression treatment market, which is expected to become a more than $18 billion market opportunity by 2025. At current market levels, the market is still enormous, estimated to be a roughly $10 billion segment where demand for better and safer standards of care is high.
Notably, CBD-based therapeutics is proving that it can offer similar or better relief than current pharmaceuticals that often have severe side effects. The excellent news is that the two are making progress in getting treatment to market.
Alkame is also a part of PAOG's other promising CBD-based therapeutic, RexpRx. Targeting another massive market opportunity, CBD-based RespRx targets treating issues associated with Chronic Obstructive Pulmonary Disorder (COPD). The commercialization of that product, which PAOG expects can happen this year, puts a catalyst in play that could drive ALKM valuations substantially higher.
Other programs are advancing as well. The company's progress in its proprietary functional water technology is also adding value. There, ALKM announced it has streamlined and improved its water manufacturing processes, resulting in fluoride-free, alkaline water with a lower oxidation-reduction potential (ORP) and its highest-ever oxygen content. The result is a "good-for-you" water that has been shown to aid in lactate clearance after exercise, toxin removal, and decreased recovery times. That program could offer new revenue streams through licensing, partnership, and joint venture strategies.
Best of all, each program can be quickly accretive to revenues. And with a strong consolidation at current prices, the stock could be set technically to break higher on company news. Still, investors should focus on ALKM's co-packing relationship with Puration, Inc. (OTC Pink: PURA), the marketer of EVERx CBD-based water.
That deal could be the most near-term value-driver. And a quarterly update from PURA could raise expectations for ALKM's benefit in 2021.
Partnerships Bringing Value
The co-packing deal with PURA can be significant. ALKM, again through its wholly-owned subsidiary, West Coast Co-Packer, Inc., has announced an expansion of current agreements with Puration, Inc. to enhance its services as the bottler of EVERx CBD-infused Sports Water. That product, by the way, is already earning market share, with PURA announcing that sales of EVERx CBD-infused sports water should surpass $2 million in 2020. Additional growth in 2021 is also expected. Growth for PURA inherently translates to growth for ALKM. Thus, investors should pay attention to that company's imminent financial update.
Better still, beyond bottling EVERx, ALKM is enhancing the PURA partnership and 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 products in the development stages include CBD-infused consumer products and hemp-derived beverages and edibles. Any, or even all, of these products, could be met with substantial consumer demand. Undoubtedly, CBD-based products are flying off the shelves as the compound continues to show extraordinary benefit to patients suffering from a number of conditions.
Best of all, with ALKM having the logistical support in place for PURA to expedite the market launch of new products, additional revenues could support the expected rise in sales of EVERx. For ALKM, a product win for PURA is a product win for them. Thus, with multiple shots on product goal, 2021 sets itself to be a potentially transformative year. That means that buying at these levels could translate into exponentially higher prices if new products earn traction. Even passing milestones in testing could add near-term value to each.
And while the focus is on ALKM's partnerships, investors should take time to evaluate the intrinsic value offered through ALKM's more than ten subsidiaries. Those assets strengthen the investment proposition by showing ALKM is vested in multiple programs through a diversified products portfolio. For investors, those subsidiaries not only mitigate risk but also create additional opportunities.
And with the pandemic seemingly under control with CBD becoming more popular by the day, ALKM may be in its best position ever to maximize its opportunities. Thus, at current prices that barely factor in its value as the EVERx bottler, a massive opportunity may be exposed that can exchange near-term ALKM milestones into long-term financial gains.
And in any investor's playbook, that is usually an ideal scenario to seize.
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