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Thank you and agreed. I think VATE's CEO is careful and calculated. He's executing his vision, but being a small company with few employees, the time to market on some of their key initiatives takes longer than most would like. Patience is key here.
Well if you have read that PR, you can see how that 430% number is misleading, don't you think?
The story of top line growth here is nice, it's just based on previous PRs, I was expecting more. That being said, while we are seeing great top line growth, we can also see that their net loss gap is narrowing as they've completely surpassed 2018 Revenue, however the loss gap has narrowed significantly by $117K~
2017 - Total Revenue $144,748 // Net Loss ($125,461)
2018 - Total Revenue $372,304.84 // Net Loss ($299,760.05)
2019 Mid Point - Total Revenue $374,982.82 // Net Loss ($182,881.74)
But, you can't only pay attention to the revenue numbers - there are more factors to consider. Some points I think are key indicators:
- No debt of any kind in 2019, long term, convertible, or otherwise.
- No cash flows from financing activities (ie the sale of securities to raise cash / read: dilution)
- CBD RTD products really only launched in mid-May and early June, nearing the end of Q2.
- Exponential growth in terms of number of distributors VATE has partnered with since the start of the year, which means more products in the market and increased brand awareness.
I think overall, VATE is still on a path towards profitability, it's just not happening as quick as most of us would like to see. They are executing their business plan, it's just taking time.
Fins out. Based on PRs (as per my previous posts today) the top line revenue number is WAY under my expectation. It’s about a 20% growth over Q1 2018. That said, the loss gap narrowed significantly and I think that’s a telling story. Additionally, they’ve about just about matched the entire top line from 2018. Lastly, the gross margins are still great at just under 70%.
Really not sure what to think here. I’ve been holding for over a year and really thought I’d see more out of this Q2 in terms of growth. I expected to be at the 460-500K mark at the half year point with small net profit.
True - but then I'd be scared about KGKG actually leveraging the crazy amount of shares they own of VATE for funding as well. These two CEOs are buddies, so I could hardly seem them redeeming each other's shares.
KGKG owns 2,746,723 Preferred D shares of VATE, which convert to common stock at 60:1. So you're looking at a potential dilution of 164,803,380 if they were to be redeemed at once or even over the longer term.
Agreed. I mean if you look at the history here, this had been going back to 2014/15 and only 5/4 years later did they actually get the guy.
I'm curious as to what tipped off the FBI / SEC and other organizations into their activity. Not sure we'll ever find out, but it's interesting stuff.
My other two cents is that this gets tied up in the courts for at least a year, probably more. Each of the three individuals that were arrested posted $1M bails. My guess is their legal representation will get continuances, extensions, etc.
Sure - in the end, they may get huge fines, may get their shares forfeited, and will likely get barred from any additional securities trading - though I don't think they'll do any time, even in a "white collar" jail.
In the end it just shows you that more often than not, the common investor gets screwed, especially on the OTC.
VATE does not own those 20M shares, but Ryan Medico personally does (VATE's CEO).
The reason stated was per an employment agreement. Don't have many details beyond that, I didn't do a deep dive into KGKG's quarterly.
Boy this post aged well. Glad to see Vaccaro and company finally getting arrested by the FBI and being brought to justice for this SHAM.
Ah, my mistake forgot the 31st in July - yes you are correct.
Then if not filed, we should see an extension to Monday the 19th.
As with most, if not all, of the OTC companies - they have 45 days from quarter end to post their results. If not filed in the 45 days, they may file for an extension of up to 5 calendar days, to post the quarterly.
If this were an annual statement and not quarterly, they could be granted an additional 15 calendar days.
By that logic, and since there were 31 days in July, I would expect POTN's financials to be posted by EOD today 8/14 or no later than 8/19.
I baked in a 10% MoM top line growth, but you are correct. If VATE continues to add distributors (both announced and unannounced) than we could see even greater MoM revenue growth. Additionally, if the products continue to sell well - that could mean additional re-orders in even larger quantities.
I think my estimation is conservative to say the least, but I would still be pleased with the results.
To be clear, their Form 10 was filed on July 5th with the SEC. The Form 10 is what legitimizes POTN as a SEC reporting company. To be very clear, that form does not become active until 60 days after filing. A quick google search would confirm this for you.
Thereby, by September 5th 2019, POTN would be an SEC reporting company and must abide by the standards as such.
VATE's financials should be posted by the end of the week if an extension isn't filed. Here are my thoughts:
We heard in a PR from June 24th that May 2019 represented a 430% increase over May 2018. Looking at the Q2 2018 (April / May / June) total revenue was $82,905.42.
If we smooth that out over 3 months - May 2018 was roughly $27,63514
Now flash forward: May 2019 is a 430% increase = $118,831.10
In that same PR, we were told that June 2019 is on track to surpass May 2019. With that in mind, here is what I am expecting for VATE revenues in Q2.
April 2019: $61,500~ (based on Q1 monthly averages + 10%)
May 2019: $118,831.10~
June 2019: $130,714.21~ (10% over May expectation)
Q2 Total Rev: $311,045.31
This would put VATE on track to completely blow away their entire 2018 top line figures. Additionally, using a 10% monthly growth rate from here on out, that puts VATE on track for 2019 Annual Revenue of $1,587,035.98
Additionally, given that VATE was operating at about a 76% gross margin, that could mean gross profit is just over $1.2M. If expenses can be kept in check and improved over Q1, VATE is on track for a very profitable year.
Why would you expect there to be volume? When the Caveat Emptor goes up, most brokerage houses will not let clients trade the security. Thereby, volume automatically dries up.
I'm still optimistic about VATE's longer term prospects. Maybe I could highlight a handful of things that I see as positive indicators throughout the first half of this year:
- The new RTD products have launched, which I think by and large can be seen as successful new products in the market.
- Based on Q1 VATE is operating at 76% gross margins, as compared to 69.2% during Q1 2018.
- By my count, via official PRs, they have announced 8 additional distributors .. following through on their commitment from 5/16/19.
- Announced a 430% increase YoY from May 2018 to 2019. May 2018 was roughly $27,635.14 a 430% increase would be a singular month of May 2019 --> $118,831.10.
- The $118,831.10~ estimated May 2019 Revenue, would equal 71% of Q1 2019's entire quarterly revenue.
Yes - I can understand the frustration that the price has remained stagnant and I can also understand the frustration of additional shares hitting. That said, the last time VATE was around this share structure size they retired over 200K shares. Given their sales trajectory, zero debt (including no convertible debt), perhaps we will see them retire more shares.
I'm still long and like where this is headed.
If you honestly think there's not much left, you haven't been paying attention in the last 6-8 months.
My one year holding mark is at the end of July .. honestly can't wait to reap the benefits of long term capital gains!
Wrong.
No worries!! Misinformation can unfortunately spread like wildfire (seems it gets passed around much more than accurate data).
Wrong on weak sales. April was still a launching month for the new products. May was when it was a full go and pallets were regularly going on - that's why May matters and that's why April will likely be in the $50-70K range.
Since the products fully launched, sales have been excellent. It doesn't take much to go look at past financials and understand that the company is clearly exhibiting a growth period.
Yep - I think probably looking at a floor of $300K for Q2.
Q1 was $166,308 - smoothed out over 3 months / avg of $55,436
If May comes in at $118,800~ and June is higher -- let's assume June is as $130K~ (and it could be even better)
$55,436 + $118,800 + $130,000 = $304,236 total revenue Q2
Puts VATE at the half year mark for $470,544~ which would be excellent.
You nailed it, that's the truth. Since the Q1 2019 and the Annual 2018 numbers posted in mid May this year -- VATE has added 5 new distributors.
Let's think about that - 5 distributors added since May 16th this year, that is just about 1 per week!
VATE is at the point where more and more of their product is getting across the nation and the promotion/awareness of CBD continues to get traction day over day.
Exciting times.
Agreed. Time to sit back and enjoy a nice VATE CBD Iced Tea while this all comes together.
I've said time and time again, 2019 is the inflection year for VATE. So far the first half of the year has not disappointed.
We're now at the exponential growth that you want to see for a brand and a company. Now that the existing products are selling well, maybe we'll start to see new flavor variations -- adding to an already good lineup.
What? You are incorrect.
Q1 Revenue (3 month period) came in at $166,308.82
We've just been told that MAY ONLY is likely somewhere around $118K~. In one month they did about 71% of an entire quarter and you think that's bad news?
Q2 will likely come in somewhere between $300-$350K~. VATE only did $372K in ANNUAL REVENUE in 2018.
By the midyear mark, VATE will be right around $500K, about 134% MORE than all of 2018.
Given current month over month growth this year, there's no reason to think VATE couldn't very well hit the $1.2M - $1.5M annual revenue mark by the end of this year.
Again, how is any of this bad news? It's excellent and right on track.
What this new PR means!
Taken from the announcement "tremendous 430% growth from May 2018 to May 2019"
Q2 revenues in 2018, was $82,905.42 -- if we divide that by 3 to get the average monthly sales -- May would have come in at $27,635.14
$27,635.14 * 430% = May 2019 sales of $118,831.10!!!
THAT GETS VATE TO AN ANNUAL RUN RATE OF $1.42M!
It's great news. It showcases that they are following through on their previous PRs, adding distributors and pushing more product.
Incredibly excited to see Q2 results.
It was an initial run of 30K units, per beverage line (tea and coffee) - so, it's really an initial run of 60K units.
I can then only imagine that they have already started canning additional product, given the distributor announcements and areas they have started to get in to.
It will be very exciting to see the growth in Q2 and from there we will be able to more accurately interpret what Q3 and Q4 will look like. I for one am looking at $350K~ revenue for Q2 as well as seeing VATE be cash flow positive. That would represent almost their entire 2018 rev in a single quarter.
From there you'd be looking at over $500K in sales and positive cash flow by the half year mark. Assuming additional distribution announcement, I'd assume modest exponential growth in Q3 and Q4. VATE could very well be looking at Sleek's $1.5M - $2M revenue projections for 2019.
Unlikely. VATE, as all OTC listed companies, will have 45 days from the quarter end (June 30th) to post their results. On the 45th day, they may request an extension, granting an additional 5 calendar days to have the results posted.
Typically from what I've seen in the past, most companies use their full 45 day period and more often than not, leverage the extension.
NP, same here. I'm in the same camp as you that the initial shares added likely went to finance certain asks related to the newest product ramp up and eventual launch. There also could have been some shares involved to the divestiture of the previous businesses (02 Breathe and One Utopia).
That said, since the product has launched and those businesses have spun off, what we've seen is a level and unmoved share structure which I think is indicative of VATE's performance. There isn't a need to finance activities via dilution since their products are now out there and selling like hot cakes.
The Q2 report is going to be VATE's time to shine.
12/31/18 - Outstanding Shares 445.5M
3/31/19 - Outstanding Shares 493.8M
6/7/19 - Outstanding Shares 499.8M
We were discussing month over month, not EOY 2018 to the present.
Yes, between EOY 18 and Q1 2019, about 10%. From Q1 2019 to present, it's minuscule.
Couldn't agree more. To be frank, I'm happy with the steady churn that we've had for the last 1.5~ weeks. Reality is, VATE has all the positives going for it and it's just a matter of time until the rest of the Hemp/CBD/Beverage investing community pays attention.
VATE has no convertible debt, no long term debt. Is regularly adding distributors (2 officially announced and what we assume is another 3 on the way) and share structure has remained flat month over month.
Add on top that VATE is already listed on the QB and are working on getting their S-1 registration filed.
What we're seeing here is a young company doing all the right things in terms of governance, reporting, and financial transparency combined with increasing product offerings, distribution, and sales.
My expectations have been and will continue to be looking out for a blowout 2nd Quarter and that's when this thing really starts to take off.
Rather certain? Except they didn't. VATE is still at 499M~ shares.
Tuesday Newsday
It's complete conjecture at this point, but I share the same sentiment as you. Illiad Research obviously had to see something behind the curtain with POTN's management committee that would have made logical sense for them to provide $2.6M in financing for a covertible price of .45
A company like Illiad would only make the investment if they had reason to believe that they could return alpha on their investment right?
Who knows if it was that they were nearing a deal with CVS/Walgreens or another national pharmacy chain. Who knows if it was their path to Nasdaq listing. We won't know what it looks like until we continue to see quarterly statements and progress made.
Personally I think the conversion price is a tell-tale sign of where they think this price will be - however, we should also pay attention to the maturity and conversion date of these notes. October 2020 and August 2021. A tremendous amount of growth can happen between now and then and if Illiad expects to be in the green by then, then hell, I'll stick around for the ride and reap long term gains.
Form 10 was filed on 5/9/19 ... quick google search shows it takes 60 days to become effective unless withdrawn or rejected by the SEC.
https://www.investopedia.com/terms/s/sec-form-10.asp
Assuming POTN's Form 10 is accepted, it still takes 60 days on average to get accepted to the OTCQB once the application is submitted.
Optimistically, the Form 10 will be accepted in early July (around the 9th or 10th) .. From there, assuming it takes POTN a while to get their act together and actually apply for OTCQB status say by August 1st -- you might see their OTCQB status attained by October of this year.
+1 .... a "Mom and Pop" shop is indeed a reference to a family owned business.
In fact, depending on what we're purchasing, my wife and I usually try to purchase from "mom and pop" retailers because we prefer to support local businesses where we can.
I think many people across the country prefer to do the same.
Another day almost in the books and another day that VATE has added to their distributor list. By my count they are now up to 5 distributors all scattered around the US.
Of the 11 potential distributors we were made aware of on 5/16/19, we've seen 2 become partners in the last week. That leaves another 9 out there plus any other potential leads that may have come VATE's way.
I cannot wait to see these Q2 numbers. VATE will undoubtedly be in the 7 figure revenue mark by year end 2019 and likely be cash flow positive by end of Q2.
Exciting times around here watching this company round into form.
In it's most basic form, the 2018 Farm Bill legalized the growing of industrial hemp. Which then opens the flood gates for farmers to start producing the crop in droves - and then for it to be used in a whole host of different manufactured products.
Of course one of those products is CBD. Now that said, the Farm Bill did not legalize or ratify the use of CBD and rather the Feds left it up to the FDA to make the determination.
This is where it becomes a grey area. The FDA prohibits the use of companies using CBD as an additive into any edible or marketing it as a wellness product. However, they did sometime last year approve GW Pharma's CBD-based drug for epilepsy.
To be honest, I'm really not quite sure how or why CBD based products fall into a separate or different category of supplement than those products you see in the wellness aisles of your local CVS/Walgreens/GNC that specifically say on their labels something to the affect of "This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease."
The FDA is a notoriously slow to act organization and if I were a betting man, my assumption is that they'll eventually give the full green light for CBD to be in edible products - albeit after strict guidelines in terms of quality control and testing.
https://www.otcmarkets.com/stock/POTN/news/PotNetwork-Holdings-CEO-Kevin-Hagen-Provides-Letter-to-Shareholders-Announcing-Form-10-Filing?id=229799