NEW YORK, NY / ACCESSWIRE / July 2, 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 July Update Note.
PotNetwork Holdings, Inc. (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 provide a legal alternative to marijuana based CBD (which is banned at federal level) and allows the consumer to enjoy CBD without the risk of 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 subsegment within the multi-billion-dollar legal cannabis and hemp market. Diamond CBD continues to report robust top line growth, as indicated by recent 1Q18 results and continued sales momentum through May. 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).
Highlights from the update note:
We are impressed by recent performance at POTN following a continuation of strong monthly sales data and positive 1Q18 results. Additionally, filings indicate that POTN continues to maintain profitability as the company invests in growth. POTN results have included robust top line growth, with revenue already tracking above our initial estimates for $22.8mn in revenues for 2018E. In our view POTN is a pure growth story which looks ready to meet or exceed our estimates again in 2018E, as the company benefits sales momentum in a structural growth market.
Highlights of recent developments at POTN include:
- On June 27, 2018 the Company announced that it is in the process of filing an amendment to its articles of incorporation with the state of Colorado for a name change from PotNetwork Holdings, Inc. to "BioTech Hemp, Inc.". This name change reflects the Company's focus on Diamond CBD's sales momentum and expanding product lines, which better reflects its current and future business strategy and industry scope.
- On June 21, 2018, POTN announced that its subsidiary Diamond CBD surpassed $2.0mn in May, which was nearly double comparable May 2017 figures. The company noted more than half a million dollars of this revenue was generated exclusively online. The announcement follows strong sales results in April 2018, which also exceeded $2mn and were up 98% YoY from April 2017. Combined, the announcements suggest POTN is on pace to grow nicely in 2Q18.
- POTN reported strong 1Q18 results on May 1, 2018, with top line growth of over 280% during the quarter. 1Q18 revenues came in at $6.3mn, versus $1.9mn in revenues in 1Q17. POTN had gross margins of 40% in 1Q18 and reported net profit of $0.2mn, or $0.00 per share. Average shares outstanding increased to 595.9mn, but we believe the share count as of 6/26/2018 is 448mn as the company began to follow through on its commitment to cancel sharers.
- POTN now appears to be operating at an annualized revenue run rate of approximately $25mn, positioning POTN well when compared to our initial 2018E revenue estimate of $22.8mn. Considering this sales progress, we are increasing our 2018E top line estimate to $25.5mn in 2018E.
Increasing estimates, target moves to $1.30
We are increasing our top line estimates following continues sales momentum in May and strong 1Q18 results which tracked ahead of our thinking. The price target increases to $1.30. We see several catalysts ahead as the company looks to list shares on the OTCQB, with a long term goal of listing on a national exchange, such as the Nasdaq.
Please review important disclosures in the report and on our website at www.seethruequity.com.
About Diamond CBD, Inc.
Diamond CBD, Inc., focuses on the research, development, and multi-national marketing of premium hemp extracts that contain a broad range of cannabinoids and natural hemp derivatives. Diamond CBD's team consists of hemp industry pioneers and natural product experts, chemists, doctors and scientists, dedicated to producing the finest and purest cannabidiol (CBD) oils. The result is a robust selection considered among the most powerful natural CBD oils, tinctures, edibles, and vape liquids found anywhere. www.DiamondCBD.com.
About PotNetwork Holdings, Inc.
PotNetwork Holding, Inc. (OTC PINK: POTN) is a publicly traded company that acts as a holding company for its subsidiaries, First Capital Venture Co., the owner of Diamond CBD, Inc., the maker of Diamond CBD oils.
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