SeeThruEquity Issues Update on PotNetwork Holding, Inc.

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NEW YORK, NY / ACCESSWIRE / January 30, 2018 / 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. (OTC PINK: POTN).

The report is available here: POTN January Update Note.

PotNetwork Holding (OTC PINK: 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 results and continued momentum through November. 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), and efforts to uplist shares to a national market.

We are increasing our price target for POTN following strong monthly sales data and 3Q17 filings that indicate continued profitability as the company invests in growth. POTN results have included robust top line growth, with revenue already tracking above our initial estimates and company guidance. The company announced preliminary 2017E sales estimates of $14.5mn, which were in line with our recently raised estimates for 2017E, and appears well-positioned to meet or exceed our 2018E estimate, assuming continued significant sales momentum in a structural growth market.

Highlights of recent developments at POTN include:

  • On January 24, 2018, POTN preannounced positive full year 2017 sales results of $14.5mn, which implies sequential growth in December following sales data of "at least" $1.6mn in November.

  • With preliminary 2017 sales of approximately $14.5mn, POTN management appears to be executing its plan in line with our recently raised estimates, and approximately 70% higher than the initial guidance issued by the company at the beginning of the year for sales of $8.3mn.

  • The company now appears to be operating at an annualized revenue run rate of approximately $20mn, assuming December sales were just under $1.7mn, positioning POTN well versus our estimates of $14.5mn in 2017E and $22.8mn in 2018E.

  • POTN CEO Dr. Richard Goulding recently reiterated the company's plans to uplist shares to the OTCQX, with an ultimate goal of listing on a national exchange, such as the Nasdaq CM. A national listing would likely increase liquidity and visibility for POTN. The company is preparing a Reg A filing to enable the uplisting to OTCQX.

Increasing price target to $1.25

We are increasing the target to $1.25 following recent results and share appreciation, as the company's execution and profitability should warrant a multiple more in line with peers in the fast-growing legal cannabis market. The $1.25 target suggests a valuation of 14.7x 2018E revenues of $22.8mn and 8.2x 2019E revenues of $41.1mn.

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.

Contact:

Ajay Tandon
SeeThruEquity
info@seethruequity.com

SOURCE: SeeThruEquity

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