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PAO Holdings, Inc. Is Coming Out Swinging In 2021; Acquisitions And A 600% Increase In Share Price Attract Interest

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PAO Holdings, Inc. Is Coming Out Swinging In 2021; Acquisitions And A 600% Increase In Share Price Attract Interest

February 17
07:28 2021

If you are just now getting introduced to PAO Group, Inc. (OTC Pink: PAOG), you missed a more than 600% move higher since the start of the year. However, the good news is that the company is positioned to add considerably more value in the near term. 

Trading at roughly a penny a share, PAOG is putting together a business plan that rivals many of its small and mid-cap competitors. In fact, if the share price was to be hidden while an investor evaluated the companies business portfolio, he would likely believe the stock was valued at a much higher level. That’s because, unlike most penny stocks, PAOG has products already targeting massive treatment opportunities in the booming CBD nutraceutical market. It’s current focus is to expand its ongoing development-stage programs that target treatment in the anxiety and depression markets, which by 2025 will become an $18 billion market opportunity. 

Its February update confirms what PAOG said just a few days earlier: they are accelerating its initiatives to develop CBD alternatives to treat patients with symptoms associated with Chronic Obstructive Pulmonary Disorder (COPD). So far, investors are responding well to the news. Since the start of February, the shares are higher by 91% despite a Friday pullback that priced the shares at $0.011. 

The great news is that the decline was likely due to profit-takers, clearing the path higher as PAOG continues to execute on its growth initiatives.

Multimedia Presentation Shows nutraceutical Strategy

A presentation published on Tuesday, in fact, shows how PAOG plans to accelerate market growth and expand its nutraceutical product reach. The details of how they plan to execute are persuasive and show that PAOG is advancing a nutraceutical product line that could rival more established research programs. Well-timed acquisitions helped propel the program. 

A deal made last year can be incredibly lucrative in the near and long term. It involved PAOG acquiring RespRx from Kali-Extracts, Inc.. RespRx made PAOG an immediate contender in the medical-grade cannabis treatment sector by giving itself the ability to leverage a patented cannabis extraction method to treat COPD. It also added fire-power to its growing arsenal of pipeline products. That asset, which is in focus, deserves the attention it’s getting and could be at least one of the reasons why PAOG stock has been bid higher. But it’s likely not the only reason. 

In addition to PAOG’s development-stage program that could help bring a pharmaceutical-grade nutraceutical COPD treatment to market, the company also announced engaging with the Puerto Rico Consortium for Clinical Investigation (PRCCI) to assist with developing its proprietary Cannabidiol (CBD) extract into a nutraceutical product. That collaborative effort is designed to bring effective treatment to those experiencing issues associated with COPD’s debilitating effects. 

The plan there is to accelerate development and provide channels for expedited marketing approvals. Moreover, because PAOG’s CBD-profiled treatment is working to replace currently prescribed drugs with a history of severe side effects, its hoped-for approval may earn support from regulatory willingness to allow CBD and cannabinoid compounds to be used for compassionate-use case studies that can justify marketing approvals.

And while PAOG is advancing its development stage pipeline, investors should not ignore the elephant in the room- REVENUES. 

Revenue-Generating Business With Partnerships

Investors like development stage companies to get in on ground floor opportunities. But, they particularly like revenue-generating companies because it adjusts risk significantly. PAOG is the latter. 

Last week, PAOG announced that it expects to generate its first set of meaningful revenues in Q4 2020. Of course, investors are waiting on those results. However, the better news is that PAOG expects that revenue to continue through 2021 by leveraging its nutraceutical-focused initiatives. They also point to its confirmed sales order agreement of $300,000 entered through the company’s cannabis cultivation subsidiary that it acquired from Puration, Inc. (OTC Pink: PURA) in 2020. 

Also, PAOG anticipates receiving approximately $50,000 in revenue per quarter for six quarters, starting with an estimated $50,000 in revenue expected to be reported for Q4 2020. An update of that could be imminent. But, there’s more.

Additional revenues are expected to be generated by capitalizing on a deal made with Alkame Holdings, Inc. (OTC Pink: ALKM) to develop and distribute its CBD nutraceuticals. That deal actually brings in another emerging company, North American Cannabis Holdings, Inc. (OTC Pink: USMJ), which will take on the distributor’s role. Thus, playing the group as a trifecta for value may not be a bad strategy, noting that each plays a significant role in contributing to PAOG’s success. A win for one can be a win for all.

Despite the personal investment strategies, the recent surge in PAOG’s share price is justified. And with recurring revenues that are likely to increase with additional deals and partnerships, investors should evaluate that growth as a larger part of the value equation. Some already have.

How PAO Group Will Target 2021

The known variable in finding attractive stocks is not to praise what they did but rather invest in where they are going. Thus, the “sell the news” mentality usually leaves the institutional investors fat and happy and the retail investors holding the bag. Put simply, good news becomes history. The better way to invest is to focus on what the company is doing to grow its brand.

Following that strategy, PAOG is checking all of the right boxes. They have multiple ongoing development-stage programs. They have made accretive deals and partnerships with industry players and are targeting two significant markets that need better standards of care. In a best case scenario, PAOG treatments will replace “Big Pharma” drugs that often have side effects worse than the illness they are prescribed to treat. 

Further, PAO Group, Inc. has taken enormous steps to revitalize its mission to advance medical cannabis technologies by completing two complementary acquisitions that diversify its pipeline risk. The plan is to maximize each of its assets’ potential to treat various illnesses, diseases, and chronic pain. 

Yes, at a penny a share, investors have overlooked this emerging CBD market participant. But, knowing that the stock has been white-hot during the past two months shows that some investors have caught the story.

One thing may be clear- current prices may not fairly represent what PAOG is actually doing as a company. Its assets alone merit more value, and its ambition to develop and bring to market meaningful treatments to patients that need better care deserves attention as well. 

Share price does not always tell the truth. But, prices do search for accuracy and eventually catch up with fundamentals. With that said, PAOG has earned a tremendous run, but to many, it stopped a few pennies short of its intrinsic value. And if it did, it could translate to several hundred percent potential gains to the upside.

 

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