SeeThruEquity Issues Update on PotNetwork Holding, Inc. (OTC: POTN)
Date: November 30, 2017
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.
