Alkame Holdings, Inc. (OTCPINK: ALKM) continues to make deals. On Monday, it announced that its wholly-owned subsidiary West Coast Co-Packer, Inc., signed a development and production agreement with Shmellins Market, LLC. Shmellins is an emerging California-based healthy lifestyle food company emphasizing fun and delicious organic and vegan products. In what can be the first of several additional projects, Alkame, with Shmellins, said beta testing has begun to evaluate a salted caramel sauce that provides endless options when pairing it with various foods and drinks.
The deal could ignite a more substantial product development agreement as Shmellins prepares to expand its product line. The partnership is another win for West Coast Co-Packer, Alkame’s wholly-owned subsidiary that provides logistical and development support for various companies.
The deal with Shmellins follows a potentially huge deal made with PAO Group (OTC Pink: PAOG), where West Coast Co-Packer is positioned to be the co-packer for CBD-based therapeutic RELAX-RX.
Alkame Continues To Make Deals
Alkame Holdings, Inc. has been on a deal-making roll. Last week its shares soared after news broke that the company is the likely co-packer for PAO Group, Inc.’s CBD RELAX-RX nutraceutical product. The nutraceutical is targeting a massive anxiety and depression market. The two are also expected to include North American Cannabis Holdings, Inc. (OTC Pink: USMJ) in a bid to leverage their expertise to help market the product.
Investors may have been right to send shares higher. CBD RELAX-RX targets the anxiety and depression treatment market, which is expected to become a more than $18 billion market opportunity by 2025. Today, that market is a roughly $10 billion segment where demand for better and safer standards of care is high.
The deal with PAOG isn’t the company’s first. The company is already planning to extend its relationship with PAO Group to help develop and produce a variety of CBD nutraceuticals to treat multiple patient indications. ALKM is embedded in PAOG immediate initiative to create a CBD-based therapeutic for those experiencing issues associated with Chronic Obstructive Pulmonary Disorder (COPD). In that venture, Alkame is the planned co-packer and, with its logistics expertise, can lead products to commercialization.
The surge in price yesterday follows impressive gains made after ALKM announced advances to its proprietary water treatment technology.
A Strong March 2021
The gains in 2021 are impressive. To date, shares of ALKM are higher by roughly 450%, which got a kickstart after announcing the expansion of its proprietary water treatment technology. The company said it completed research and development stages for the enhanced technology and has filed for patent protection with the United States Patent office. An awarded patent could bring value through a number of strategic options.
In fact, several potentially lucrative long-term deals are already in place. Not only are the agreements with PAOG a possible revenue-generating game-changer for ALKM on the co-packing side, but its advances in its proprietary functional water technology also add to the value proposition. In that effort, ALKM said it has streamlined and improved its water manufacturing processes, resulting in a 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 can provide long-term rewards.
Its co-packing business is also growing. Those deals are channeled through ALKM’s wholly-owned subsidiary West Coast Co-Packer, Inc., which has also been busy. At the end of February, ALKM announced an initial purchase order for Handout Protection hand sanitizer and wash combo single-use packets. That agreement was made with their Canadian Personal Protection Equipment (PPE) distributor, TheraProducts Canada, Inc. Expectations are that product sales will continue to grow.
In fact, Handout Protection is being referred to by some as a potential best-in-class product after demonstrating effectiveness in killing known COVID-19 strains and the new coronavirus variants known to spread 50% quicker than COVID-19. 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, unlike traditional wipes, Handout Protection enables users to clean not only their palms but also 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 is unlikely that demand for effective sanitizing and germ-killing products will decline. That’s excellent news for ALKM.
Setting Up For A run In 2021
Although the new year is less than three months old, ALKM has positioned itself for a breakout. Already, ALKM expects to generate shareholder value through its exposure to health and wellness products, its aquaculture water treatment division, an interest in CBD co-packing services, and its plans to enter the billion-dollar pet health and wellness sector. Another deal, which could be substantial, positions ALKM to exploit the massive opportunities emerging in the industrial-use hemp markets. ALKM has announced its intention to work with other publicly traded companies in that venture.
Other projects and agreements can accelerate growth in the near term. Its contract with PAO Group, Inc., for instance, positions ALKM to capitalize as the co-development and distribution partner for PAOG’s emerging nutraceutical product line. Another deal brings the company together with North American Cannabis Holdings, Inc. (OTC Pink: USMJ) to revitalize its interests and investments in the cannabis and CBD space. ALKM is expected to benefit from several recently announced USMJ initiatives that target broad opportunities in the cannabis sector. Details on that partnership are expected soon.
Then, there is value through ALKM owned West Coast Co-Packer, Inc. There, the company said it is expanding its agreements with Puration, Inc. (OTC Pink: PURA) to enhance its services as the bottler of EVERx CBD-infused Sports Water. ALKM is taking steps to strengthen the partnership and collaborate to market multiple new CBD-infused consumer products, including a CBD-infused liquid sugar and a CBD pet food supplement. Additional products in the early development stages include CBD-infused consumer products and hemp-derived beverages and edibles. Notably, PURA announced that sales of EVERx CBD-infused sports water should surpass $2 million in 2020. That report is imminent, and growth at EVERx will surely benefit West Coast Co-Packer.
The great news from an investment perspective is that ALKM is already positioned to deliver value on a near and long-term scale. That means that investors have the opportunity to get paid for waiting, especially if sales of PURA’s EVERx and PAOG’s nutraceutical and CBD-based initiatives continue to take advantage of emerging market opportunities. Moreover, ALKMs patent-pending technologies can also bring long-term appreciation through various strategic options.
Clearly, after analyzing the parts that make the whole, there appears to be a substantial amount of untapped inherent value from its more than ten subsidiaries. And with ALKM actively seeking ways to capitalize on its subsidiary ownership, those values can increase. Therefore, despite the 400% YTD run higher, there may be exponentially more room to run if ALKM can reach its set milestones. After all, with multiple shots on goal in billion-dollar markets, even nano-cap companies can do big things. ALKM may be one of the few.
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