Alkame Holdings, Inc. (OTC Pink: ALKM) stock jumped 6% intraday after announcing a $1 million PPE deal with Aladyn Protection Systems, LLC. Alkame said that Aladyn will soon be receiving its first shipment of Personal Protection Equipment (PPE) as part of a recently closed $1 million long-term purchase agreement. Expectations are for ALKM to ramp PPE sales during the remainder of 2021 as they continue to earn additional permits.
The deal can be a PPE game changer for ALKM. With a logistics hub in Miami, Florida, Aladyn is a global wholesale supplier of personal protective equipment (PPE) that focuses on providing large-scale solutions to the travel and hospitality industries. The PPE sales contract will expedite Aladyn's purchases of PPE inventory from Alkame by doubling the designated order size every ten weeks, with a cumulative purchasing target of $1 million in sales from Alkame in the first year. It can get bigger from there. And with PPE likely to never go away, it can be a massive long term deal.
Alkame began producing premium personal protective equipment (PPE) such as hand sanitizer for first responders and the medical industry in 2020, following the massive demand for these essential products created by the COVID-19 pandemic. Licensing, administrative approvals, safety inspections, certifications, and product formulas were all meticulously planned by the company, and the resulting high-quality materials have helped ALKM to secure deals in numerous healthcare sectors. ALKM was promptly rewarded by its recent change in manufacturing focus through sales to the State of Oregon, and having already obtained documentation for export permissions, was able to negotiate a deal to distribute its PPE in Canada as well. These deals are channeled through West Coast Co-Packers, a wholly-owned subsidiary of Alkame.
The company’s shift into the PPE sector is expected to translate into a long-term opportunity for the company as it complements its regular co-packing services. That co-packing business, in and of itself, is expected to rise in valuation following the eventual easing of pandemic-related headwinds.
Alkame Holdings is Powered Up
Indeed, Alkame Holdings has taken significant steps toward diversifying its portfolio by introducing a new product to its flagship EverX line. ALKM recently made headlines with the announcement of its new Sugar-Free EVERx CBD Sports Water, a product that extends the CBD-based product to a wider consumer base. The sugar-free specialty water will be sold along with its original EVERx CBD Sports Water, which made about $2 million in sales in 2020. Now armed with a sugar-free variety, the combined sales between the two drinks could greatly significantly outperform 2020 sales.
The proof is in the markets. Sugar-free alternatives to brands like Monster Beverage (NYSE: KO) are starting to win a sizable portion of store shelves as many consumers have become more conscious of carbs, with other energy drink offerings such as Bang marketing to the physically active and health-conscious consumer. EVERx Sugar-Free CBD Sports Water is a perfect example of how to capitalize upon this trend, since it preserves many of the benefits of its original formulation while lowering calories and removing excessive carbs. With these updates to the original recipe, it's anticipated that the demand for EVERx CBD Sports Water will grow even further to include the carb-conscious, those keeping track of their daily calories, and even those who must monitor their sugar consumption due to medical reasons.
Puration, Inc. (OTC PINK: PURA), a long-time associate who was instrumental in supporting the development and commercialization of the original EVERx CBD Sports Water, will remain partnered with ALKM for the new offering as well. Furthermore, outside of EVERx, the team is also working on new CBD-infused treatments expected to be unveiled to the public soon. Stock valuations are expected to rise following this announcement, showing promise thanks to the company's extension of its collaborations with its proven distributing and marketing partners.
The Benefits of an Additional Facility
ALKM is also actively collaborating with another company who can provide a new angle of logistical and business experience to the company. This company is North American Cannabis Holdings, Inc. (USOTC: USMJ) who will be working with another company, Puration, Inc to assist Alkame with the commercial launch for Sugar-Free EVERx CBD Sports Water. USMJ has extensive expertise in the CBD industry and can assist ALKM in optimizing the product launch due to its knowledge of the industry’s unique distribution networks.
Keep in mind, ALKM already has an established distribution network, and this new product and partnership could help expand their product range and customer base. Despite the fact that the stock is trading at sub-penny levels, the company firm has been working tirelessly behind the scenes to finish the building of a new West Coast Co-Packer plant. The new plant would almost double manufacturing capabilities thanks to its higher-speed machines, and this increase in production volumes alone could result in a significant increase to sales as early as this year. Therefore, the current prices appea rto substantially undervalue its assets.
Apart from the extra space and capacity, the new production location will allow ALKM to boost its industry status through securing new and important regulatory certifications. Specifically, the Gervais facility will allow ALKM to seek one of the most important and highest-rated compliance certifications available, which would create new options for businesses looking for a distribution and sales channel partner.
ALKM has already laid out a multi-channel marketing strategy that includes a direct-to-consumer business model, which will be launched in 2021. Based on the company's previous acquisition of DistributorCorp, this model would facilitate the online purchasing and subsequent distribution of sanitizer and similar PPE products to clients across the nation. PPE materials are included in the company's non-hemp-related product division, which also contains the Alkame brand of premium oxygenated alkaline filtered water. ALKM is actively pursuing export licenses for a number of its best-selling brands and products.
ALKM is Strong in 2021 Thanks to a Smart 2020
This year has put Alkame Holdings in one of its greatest positions ever to seize upon its long-term targeted opportunities. ALKM's most recent investor update detailed how its CEO prepared the firm to survive the economic crisis that plagued industries worldwide throughout 2020. One of the most significant takeaways from the update is that the company's supply and logistics networks remained operational amid the extreme economic disruptions, and that the slowly improving economic conditions are gradually bringing some relief to retail locations nationwide. It's also benefiting ALKM.
In fact, Alkame Holdings has done a fantastic job of expanding its potentially-achievable opportunities throughout the first half of 2021, putting the firm in a great position for accelerated growth thanks to newly revamped facilities, creative products, and accretive partnerships.
Armed With New Capabilities, ALKM Bringing its All for 2021
Without a doubt, companies faced an unparalleled challenge in working around the pandemic's economic volatility. Although some companies failed to keep up, some used the downtime to formulate new plans to deal with a shifting retail climate – the latter being greatly exemplified by Alkame.
Not only did the company smartly maneuver through the pandemic, but its manufacturing division also assisted with the distribution of sanitizer and personal protective equipment (PPE) to help deter the outbreak of COVID-19. With all of this in mind, ALKM is not only a survivor, but they have demonstrated their ability to think on their feet and make the most of any opportunity they are presented with.
The good news is that as COVID-related constraints are being loosened across the world, ALKM stock could rise in tandem as its products and services re-enter normalized consumer networks. Analysts believe that pent-up demand for consumer goods could lead to one of the most spectacular economical snap-back rallies in history, with higher consumer spending expected to provide more than just relief in industries worldwide.
With new products in development and its additional facilities nearing completion, Alkame Holdings' decision to build up rather than break down this year could pay off handsomely, and its expected record production could soon bring record gains along with it.
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