NEW YORK, NY / ACCESSWIRE / October 30, 2018 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has initiated coverage on Koios Beverage Corp. (CNSX: KBEV, OTC PINK: KBEVF) with a price target of $1.15.
The report is available here: KBEV Initiation Report.
We initiate coverage of Koios Beverage Corp. (CNSX: KBEV.CN, OTC PINK: KBEVF, "Koios") with a price target of $1.15 / CAD $1.49 Based in Vancouver, Canada, Koios is an emerging functional beverage company with an established distribution network of more than 2,000 retail locations across the United States, online distribution, and strategic wholesale distribution relationships in place to cover more than 80,000 brick and mortar locations. Functional beverages are drinks augmented with nutrients and/or supplements in order to convey a health benefit to the consumer. The category has gained traction in recent years due to a shift in consumer behavior away from sugary sodas toward healthy alternatives. Koios is positioned to benefit from this trend as the company's product line targets two differentiated segments of the functional beverage market with significant growth potential: 1) nootropics, which contain supplements to boost cognitive function, and 2) CBD and cannabis-infused beverages, which are CBD and cannabis-enhanced versions of the company's beverages.
Highlights from the note include:
Koios enters CBD-infused beverage market with launch of Cannavated
In our view the largest near-term opportunity for Koios is the upcoming launch of the company's CBD-infused nootropic beverage line through subsidiary Cannavated. Koios has developed what is expected to be the first CBD and cannabis-infused nootropic beverages, and is expected to begin commercial activities by the end of 2018. Initial distribution of the first line of Cannavated products will begin in Colorado through a partnership with Keefe Beverages, with national expansion in legal cannabis states to follow in 2019. Cannavated sits at the intersection of two trends with massive growth potential– functional beverages and cannabis-infused beverages – and the company should be differentiated in its approach with the first cannabis-infused nootropic. The potential for cannabis beverages has begun to attract the investment interest of large beverage corporations including Coca-Cola (NYSE:KO) and Constellation Brands (NYSE: STZ), making Cannavated's year-end launch an ideal time to enter the market.
Nootropic beverage launch underway with impressive distribution
On the non-cannabis side of the business, Koios launched a new line of nootropic beverages in August, and has already established an impressive distribution network in North America, with partners including Europa Sports, Muscle Foods USA, Western Functional Beverages, KeHE and Wishing-U-Well. The company's distributors represent over 80,000 physical locations across, which include Whole Foods, Sunflower Markets, 7-11, Conoco, Gold's Gyms, Woodman's Markets, and Alfalfa's, among others, in addition to the company's online presence and placement on Amazon. The company plans to expand its non-cannabis functional beverage portfolio with the launch of Fit Soda in 1Q19, which should benefit from this distribution.
Initiate coverage with a price target of $1.15 / CAD $1.49
We initiate coverage of Koios with a price target of $1.15 / CAD $1.49. We see Koios as an intriguing speculative growth company targeting the large and rapidly emerging markets for functional and cannabis-infused beverages. If achieved, the target suggests an enterprise value of $75.6mn, or 9.6x FY2020E revenues of $7.9mn, which represents an appropriate discount to the peer group valuation given that Koios is currently in the midst of product launches.
Please review important disclosures in the report and on our website at www.seethruequity.com.
About Koios Beverage, Inc.
The Company, through its wholly-owned subsidiary Koios, Inc., is an emerging functional beverage company which has an available distribution network of more than 2,000 retail locations across the United States in which to sell its products. Koios has relationships with some of the largest and most reputable distributors in the United States, including Europa Sports, Muscle Foods USA, KeHE, and Wishing-U-Well. Koios is also the sole owner of Cannavated Beverage Co., a subsidiary that develops beverage products and formulas for the growing cannabis market. Through its agreement with Keef Brands, the largest producer of cannabis beverages in North America, Cannavated enjoys distribution throughout the State of Colorado and is preparing for distribution in additional US states where cannabis use is legal.
Koios uses a proprietary blend of nootropics and natural organic compounds to enhance human productivity without using harmful chemicals or stimulants. Koios products can enhance focus, concentration, mental capacity, memory retention, cognitive function, alertness, brain capacity and create all day mental clarity. Its ingredients are specifically designed to target brain function by increasing blood flow, oxygen levels and neural connections in the brain. Koios is one of the only drinks in the world to infuse its products with MCT oil. MCT oil is derived from coconuts and has been shown to help the body burn fat more effectively, create lasting energy from a natural food source, produce ketones in the brain, allowing for greater brain function and clarity, support healthy hormone production and improve immunity. For more information, visit: https://www.mentaltitan.com/
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 approach to deliver equity research of microcap and smallcap companies. SeeThruEquity has also been the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion since 2012.
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For more information visit www.seethruequity.com.
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