SeeThruEquity Issues Update on PotNetwork Holding, Inc. (OTC: POTN)

Date : 11/30/2017 @ 8:44AM
Source :InvestorsHub NewsWire
Stock : Potnetwork Holdings, Inc. (PL) (POTN)
Quote : 0.0579  -0.0015 (-2.53%) @ 4:00PM

SeeThruEquity Issues Update on PotNetwork Holding, Inc. (OTC: POTN)

New York, NY -- November 30, 2017 -- InvestorsHub NewsWire -- SeeThruEquity, a leading independent equity research and corporate access firm focused on small-cap and micro-cap public companies, today announced it has issued an update on PotNetwork Holding, Inc.
 
The report is available here: POTN November Update Note
 
PotNetwork Holding (OTC: POTN), through its subsidiary Diamond CBD Inc., focuses on research, development, and sale of premium hemp extracts that contain a broad range of cannabinoids and natural hemp derivatives. CBD is one of the more than 85 cannabinoids identified in marijuana and hemp plants and is non-psychoactive with wide array of therapeutic benefits. Hemp derived CBDs provides a legal alternative to marijuana based CBD (which is banned at federal level) and allows the consumer to enjoy CBD without the risk of getting high and breaking any federal laws. Hemp derived CBD market is projected to grow at a CAGR of ~53% till 2020, positioning it as the fastest growing sub segment within the multi-billion-dollar legal cannabis and hemp market. Diamond CBD continues to report robust top line growth, as indicated by recent 3Q17 sales and continued momentum in October.  We see POTN as a speculative growth company focused on the burgeoning legal cannabis and hemp market targeting the fastest growing sub segment (hemp derived CBD).  Upcoming catalysts new product launches, aggressive marketing initiatives and entry into new markets (specifically China).
 
Highlights from the update include:
 
We are increasing our price target for POTN following encouraging results since our initiation of coverage.  POTN results have included robust top line growth, as well as a reduction in shares outstanding.  The company now appears to be tracking ahead of our initial results, with significant sales momentum in a structural growth market.
 
Highlights of recent developments at POTN include:
 

  • On November 2, 2017, POTN pre-announced positive 3Q17 sales results with revenue of approximately $4.4mn, up 29% sequentially from $3.2mn in 2Q17.  
  • Momentum appears to have continued for the company as management announced October sales came in at $1.7mn, up 40%+ from September.   
  • On November 27, 2017, POTN retired 300mn common shares held by principal shareholders, reducing common shares outstanding; the shares will be exchanged for non-trading preferred shares.
  • The company appointed a new PCAOB accounting firm registered in South Florida, East West Accounting Services, LLC, to deliver a detailed review and audit of recent revenues results. 
  • In October, POTN appointed Dr. Richard Goulding, MD, as its new CEO.  According to the announcement, Dr. Goulding will bring the company key insights on the medical benefits of cannabidiol (CBD) from a physician’s standpoint, including insights on research for CBD as a treatment for pain management and other medical applications as the company expands its presence in the market.  Former CEO Gary Blum will remain with POTN as Chairman of the Board of Directors.

 
Increasing price target to $0.40
We are increasing our target to $0.40 following recent results and apparent sales momentum at the company as it expands its product offerings and distribution. The $0.40 target suggests a valuation of 4.7x 2018E revenues of 22.8mn and 40x estimated 2018E EPS of $0.01.
 
Please review important disclosures on our website at www.seethruequity.com
 
About PotNetwork Holding, Inc.
PotNetwork Holding Inc. is a publicly traded company that acts as a holding company for its subsidiary, First Capital Venture Co., the owner of Diamond CBD, Inc.  Diamond CBD focuses on the research, development, and multi-national marketing of premium hemp extracts that contain a broad range of cannabinoids and natural hemp derivatives. For more information, visit www.diamondcbd.com.
 
About SeeThruEquity
Since its founding in 2011, SeeThruEquity has been committed to its core mission:  providing impactful, high quality research on underfollowed smallcap and microcap equities.  SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased.  SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.
 
SeeThruEquity is approved to contribute its research reports and estimates to Thomson One Analytics (First Call), the leading estimates platform on Wall Street, as well as Capital IQ and FactSet.  SeeThruEquity maintains one of the industry’s most extensive databases of opt-in institutional and high net worth investors.  The firm is headquartered in Midtown Manhattan in New York City.
For more information visit www.seethruequity.com.
 
For more information visit www.seethruequity.com.
 
Contact:
 
Ajay Tandon
SeeThruEquity
info@seethruequity.com

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