Potnetwork Holding, Inc. (OTC Pink: POTN) is a publicly traded company that has two wholly owned subsidiaries, First Capital Venture Co., the makers of Diamond CBD, and Sunrise Auto Mall Inc. Diamond CBD is focused on the advanced research and development of hemp extracts and distributing its ever growing and popular line of products in the global marketplace. POTN, acting as the holding company for the present subsidiaries is planning to continue to expand from within as well as through future acquisitions.
The company recently announced to move its domiciled state of Wyoming to Colorado; the filing was approved and is effective immediately. The announcement came just after POTN’s acquisition of Diamond CBD. Management believes that Colorado provides them with a relatively conducive environment including beneficial landscape, for conducting its business, in a cost-effective manner.
Earlier, during August 2016, POTN had announced that upon FINRA approval, the Company would officially change its name to SND AUTO GROUP INC. However, it now confirmed that it intends to keep its current name and ticker symbol.
POTN continues to be in the process of making material changes in its corporate direction and business strategy. It also announced that it would no longer go for the proposed $2 million line of credit facility. The management outlined that potential risks of incremental debt, outweigh the benefits. Gary Blum, CEO of POTN, expressed his pleasure at having the choice to forego the credit facility option and confirmed that they can now focus on making the business lucrative and more profitable.
Most recently, the company announced that Diamond CBD, is exhibiting at the popular Market Week Event in Las Vegas, NV., a notable event well-known to showcase a comprehensive collection of the world’s widest variety of popular retail merchandise in one resourceful shopping experience.
The management is bullish about this event, as it would bolster its market position while enhancing brand value and business relationships. The company is likely to gain valuable publicity for its exclusive line of CBD oils, extracts, and supplements.
POTN’s business is expected to derive significant strength from these strategic initiatives, including its recent acquisition of Diamond CBD, an industry leader and revenue generating entity, move to the CBD hub of Colorado and its presence in major industry conferences.
POTN operates in an industry that has rapidly & recently turned into a multi-billion dollar massive growth market across US and Canada with many new states legalizing it. According to a recent estimates, cannabis market crossed $6.7 billion from the U.S. alone in 2016, and that sale of cannabis are set to rise to $22.8 billion in the U.S. by 2020. For businesses like POTN, specializing in premium hemp extracts, this trend of acceptance of cannabis by American society is creating an excellent opportunity in an industry that is already on a rapid growth path.
The company’s stock has unsurprisingly found strength in the recent past. POTN reported increase in the stock price backed by these announcements laying foundation for revenue visibility and business growth.
Description & about the Company:
PotNetwork Holding, Inc. (OTC Pink: POTN) is a publicly traded company with two wholly owned subsidiaries, Sunrise Auto Mall Inc. and First Capital Venture Co. and its wholly owned subsidiary Diamond CBD. First Capital Venture Co. through its wholly owned subsidiary, Diamond CBD.
Diamond CBD, is a progressive organization focused on the advanced research and development of the industry’s finest premium hemp extracts and making them available to the global marketplace. The Company’s management includes hemp industry pioneers and natural product experts, chemists, and scientists. Diamond CBD is dedicated to producing the finest and purest Cannabidiol (CBD) oil.
Unique differentiating factors for Diamond CBD:
- Diamond CBD’s products are USA-made and produced with Cannabidiol (CBD) derived from the industrial hemp plant. According to the National Institute of Drug Abuse (NIDA),CBD oil may be effective in controlling epileptic seizures, reducing pain and inflammation, and may also be an effective treatment for mental health disorders, such as addiction and various forms of psychosis.
- The Company formulates top quality hemp extracts that contain a broad profile of cannabinoids and other natural hemp derived molecules, resulting in a robust selection of Industrial Hemp Derived Diamond CBD oils considered among the most powerful natural CBD E-Liquids on the market.
Sunrise Auto Mall, Inc., launched in June of 2014, as an operation geared toward enabling credit challenged individuals with poor or no credit in securing quality transportation while simultaneously rebuilding the client’s credit worthiness. The company has developed a highly profitable business model around the continually rising subprime automobile lending industry.
Recent announcements:
- POTN recently announced about moving company’s domiciled state to Colorado, from Wyoming. The filing has been approved and went into effect immediately. The announcement came shortly after POTN acquired Diamond CBD and made some significant changes to its corporate strategies. The management believes that the state of Colorado provides them with a relatively better business environment.
- Post acquisition of Diamond CBD, it also announced that it would no longer obtain a proposed $2 million line of credit facility. The management further stated that the potential risks of the credit facility, by far, outweigh the benefits. In fact, acquisition of Diamond CBD and its exponential growth have significantly changed the dynamics of POTN.
- Given the fact, that POTN is now representing a strong subsidiary in the cannabis market, it wants to maintain its original corresponding designation. It confirmed that the company now intends to keep its current name and ticker symbol, which effectively corresponds to their business direction. Previously, the company had plans to change it. Prior rebranding initiative was based on POTN’s plan to focus on the subprime lending industry, whereas the Company’s singular subsidiary was in that market.
- Diamond CBD, is exhibiting at the popularMarket Week Event in Las Vegas, NV., a notable event well-known to showcase a comprehensive collection of the world’s widest variety of popular retail merchandise in one resourceful shopping experience.
Outlook over the near to medium term:
As per management, Diamond CBD’s acquisition empowers POTN to continue building a growing presence in the marketplace with its entry into CBD essential oil manufacturing sector. The CBD sector is already on a rapid growth path & this opportunity has proven to have the best upside potential for Management and shareholders of the company.
Diamond CBD recently received over $250K in purchase orders at the 36th Las Vegas CHAMPS Event. That said the company has a robust product line, and there could be increasing demand for its products.
Key Stock Influences:
Some key influences that might govern future stock price performance include:
(1) POTN is still at an early stage and has not yet generated sizeable revenue and will likely operate at a muted profits as it grows its market position and seeks ways to monetize it. Therefore, any time or cost overrun in its ongoing marketing activities and its impact on business & financial profile will remain a key business sensitivity factor.
(2) POTN is having a constrained financial position. Therefore, its ability to maintain liquidity and financial flexibility to fund its incremental capital requirements will remain an extremely critical challenge for the company.
(3) POTN’s ability to revamp its sales strategy and to align with mainstream markets would hold the key over the near to medium term.
Earnings Review:
The company does not report detailed financials. For three months ended September 2016 sales were $448,150 compared to $1,297,514 for December 31, 2015.
Profitability:
The Company’s net profit for the three months ended September 2016 was $98,853 compared to net income of $447,182 for the three months ended September 2015.
Cash Flow & Balance Sheet:
The company had negligible cash as on September 30th 2016. Therefore, success of POTN’s business plans during the next 12 months and beyond (including its ability to remain a going concern) will be contingent upon generating sufficient revenue to cover costs of operations and/or upon obtaining additional financing.
Stock Performance
On Friday, March 17th, 2017, POTN shares surged by 28.95% to $0.0494 on an average volume of 2.97M million shares exchanging hands. Market capitalization is $2.68 million. The current RSI is 79.49.
In the past 52 weeks, shares of POTN have traded as low as $0.00 and as high as $0.25.
At $0.0490, shares of POTN are trading near their 50-day moving average (MA) at $0.05 and 200-day MA at $0.04.
The present support and resistance levels for the stock are at $0.0397 & $0.0567 respectively.
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