Diamond Wellness (POTN) 10-Q/A 17 Oct 19 2019 Q2 Quarterly report (amended) Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Sep. 30, 2019
Document And Entity Information
Entity Registrant Name	PotNetwork Holdings, Inc.
Entity Central Index Key	0001746563
Document Type	10-Q/A
Amendment Flag	true
Amendment Description	We have amended our 10Q for the period ended June 30, 2019, to include a statement under Item 4 regarding management's conclusion as to the effectiveness of disclosure controls and procedures for the period, and expanding commentary on Notes 1, 2 and 10 to the financial statements.
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2019
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Entity Ex Transition Period	true
Entity Common Stock Shares Outstanding		700,836,384

BALANCE SHEET

BALANCE SHEET - USD ($)	Jun. 30, 2019	Dec. 31, 2018
Current Assets
Cash/Bank Balances	$ 104,372	$ 584,426
Accounts Receivable
From Customers	107,261	119,274
From related parties
From others	1,125,000
Total Accounts Receivable	1,232,261	119,274
Advances - Drop Shipper	4,876,880	4,289,928
Prepaid Expenses	271,405	220,902
Total Current assets	6,484,918	5,214,530
TOTAL ASSETS	6,484,918	5,214,530
Current Liabilities
Payables	161,048	469,821
Current portion of Notes Payable, convertible	184,188	306,150
Total Current Liabilities	345,236	775,971
Long-term Liabilities
Loan from 3rd Party with interest	39,680	38,400
Notes Payable	4,460,574	3,267,824
Total long-term liabilities	4,500,254	3,306,224
Total Liabilities	4,845,490	4,082,195
Stockholders' Equity
Common: Authorized 1,000,000,000 shares, $ .00001 par value; and 700,706,621 Issued and outstanding as of June 30, 2019 and 569,364,762 shares issued and outstannding as of December 31, 2018.	3,555,190	3,169,040
Preferred Stock Class A Authorized - 50,000 shares, $ .00001 Par value; and 34,289 Issued and outstanding, as of June 30, 2019 and 39,839 issued and outstanding as of December 31, 2018.	400	400
Retained Earnings	(1,916,162)	(2,037,105)
Total Stockholders' Equity	1,639,428	1,132,335
Total Liabilities & Equity	$ 6,484,918	$ 5,214,530

BALANCE SHEET (Parenthetical)

BALANCE SHEET (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Stockholders' Equity
Common stock, shares par value	$ .00001	$ .00001
Common stock, shares outstanding	700,706,621	569,364,762
Common stock, shares issued	700,706,621	569,364,762
Preferred stock, shares outstanding	34,289	39,839
Preferred stock, shares issued	34,289	39,839
Common stock, shares authorized	1,000,000,000	1,000,000,000
Preferred stock, shares authorized	50,000	50,000
Preferred stock, shares par value	$ .00001	$ .00001

INCOME STATEMENT (Unaudited)

INCOME STATEMENT (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenue
Sales	$ 4,345,411	$ 5,759,910	$ 10,528,121	$ 12,044,028
Cost of goods sold	2,791,217	3,530,498	6,375,884	7,302,854
Gross profit	1,554,194	2,229,412	4,152,237	4,741,174
Operating expenses
Research and development
Sales & Marketing	1,238,514	1,919,271	3,412,781	4,063,263
General & Administrative Expenses	167,767	182,742	455,295	353,355
Total operating expenses	1,406,281	2,102,013	3,868,076	4,416,618
Financing expenses
Interest Exp	78,434	4,220	163,218	7,913
Total financing expenses	78,434	4,220	163,218	7,913
Total Expenses	1,484,715	2,106,233	4,031,294	4,424,531
Profit (Loss) before Income Tax	69,479	123,179	120,943	316,643
Provision for Income Tax
Net Profit (Loss)	$ 69,479	$ 123,179	$ 120,943	$ 316,643
Earnings per share
Basic and diluted	$ 0.000099	$ 0.000274	$ 0.000173	$ 0.000705
Basic and diluted weighted average common shares outstanding	700,706,621	448,921,254	700,706,621	448,921,254

CASH FLOWS STATEMENT

CASH FLOWS STATEMENT - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Operations
Net Income (Loss)	$ 69,479	$ 123,179	$ 120,943	$ 316,643
Adjustments to reconcile net income (loss)
Advances & Accounts Receivable	(834,093)	(531,154)	(625,442)	(1,139,068)
Other Assets		635,966	(1,125,000)	713,837
Payable	29,776	250,820	(308,773)	210,446
Total Adjustments to reconcile net income (loss)	(804,317)	355,632	(2,059,215)	(214,785)
Net cash from the current year operations	(734,838)	478,811	(1,938,272)	101,858
Investing
Common Stock	386,150	(348,753)	386,150	(273,753)
Preferred A Stock		0		0
Net cash provided by investing activities	386,150	(348,753)	386,150	(273,753)
Financing
Third Party Loan	640	36,620	1,280	40,840
Notes Payable	(132,006)	(72,733)	1,070,788	225,000
Net cash provided by financing activities	(131,366)	(36,113)	1,072,068	265,840
Net change in cash and cash equivalents	(480,054)	93,945	(480,054)	93,945
Cash and cash equivalents, beginning of period	584,426	240,501	584,426	240,501
Cash and cash equivalents, beginning of period	$ 104,372	$ 334,446	$ 104,372	$ 334,446

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY - USD ($)	Total	Preference Shares	Surplus Deficit	Common Stock [Member]
Beginning Balance, shares at Dec. 31, 2016		0		297,389,288
Beginning Balance, amount at Dec. 31, 2016			$ (53,935)	$ 88,573
Triangular Merger, shares		39,839
Triangular Merger, amount			$ 53,935
Shares Issued - Restricted, shares				309,322,614
Shares Issued - Restricted, amount
Shares Issued - Free, shares				121,000,000
Shares Issued - Free, amount				$ 363,000
Shares Issued - Reserve, shares				(157,791,417)
Shares Issued - Reserve, amount
Net Profit (Loss)			301,603
Beginning Balance, shares at Dec. 31, 2017		39,839		569,920,485
Beginning Balance, amount at Dec. 31, 2017		$ 400	(2,279,739)	$ 450,573
Shares Issued, shares				215,444,227
Shares Issued, amount				$ 2,718,467
Shares Cancelled, shares				(216,000,000)
Net Profit (Loss)			242,634
Shares Cancelled, amount
Beginning Balance, shares at Dec. 31, 2018		39,839		569,364,712
Beginning Balance, amount at Dec. 31, 2018	1,132,335	$ 400	(2,037,105)	$ 3,169,040
Shares Issued, shares				131,341,909
Shares Issued, amount				$ 386,150
Net Profit (Loss)			120,943
Beginning Balance, shares at Jun. 30, 2019		34,289		700,706,621
Beginning Balance, amount at Jun. 30, 2019	$ 1,639,428	$ 400	$ (1,916,162)	$ 3,555,190

ORGANIZATION AND DESCRIPTION OF

ORGANIZATION AND DESCRIPTION OF BUSINESS	6 Months Ended
	Jun. 30, 2019
ORGANIZATION AND DESCRIPTION OF BUSINESS
Note 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS	PotNetwork Holdings, Inc. is a publicly traded holding company trading under the symbol “POTN”. The Company website is www.potnetworkholding.com. This Company was previously known as: · SND Auto Group, Inc. until 3-2017 · PotNetwork Holdings, Inc. until 5-2016 · United Treatment Centers, Inc. until 7-2015 · Element Trading Holdings, Inc. until 3-2014 · United Treatment Centers, Inc. until 10-2013 · MyMedicalCD, Ltd. until 6-2008 · Interactive Solutions Corp. until 11-2004 o State of incorporation changed from Nevada to Wyoming in 11-2004 · Araldica Wineries Ltd. until 2-2000 · H P Capital Corp. until 9-1996 The Company has six (6) wholly-owned subsidiaries: · First Capital Venture Co., a Florida corporation which has as its wholly-owned subsidiary, Diamond CBD, Inc., a Delaware corporation. First Capital Venture Co. was acquired by the Company on January 31, 2017. · Blockchain Crypto Technology, Corp., an inactive Colorado corporation. · Grinder Distribution, Inc., an inactive Florida corporation · PNH Holdings, Inc., an inactive Colorado corporation · SND Auto Group, Inc., an inactive Colorado corporation Since the acquisition of First Capital Venture Co., the focus of the Company has been the development of the business of Diamond CBD, Inc. PotNetwork Media Group, Inc. is an early stage company. All other subsidiaries are dormant having ceased operations. Hence, the financial statements reflect principally the business results of Diamond CBD business. Diamond CBD, Inc. focuses on the research, development, and multinational marketing of premium hemp extracts that contain a broad range of cannabinoids and natural hemp derivatives. Diamond CBD’s catalog can be found in http://catalog.diamondcbd.com Since the acquisition of First Capital Venture and Diamond CBD on January 31, 2017, Diamond CBD’s business has become the primary business of this Company. Diamond CBD is treated as a wholly owned subsidiary of the Company and the accounts of the subsidiary are presented in the Company’s consolidated statements eliminating inter-company transactions. In accordance with ASC 805-40-45 the consolidated financial statements represent the continuation of the financial statements of the wholly owned subsidiary except for its capital structure. The Company, being the legal acquiror, but the accounting acquiror, did not have significant assets or revenues prior to the consolidation. Investment in the wholly owned subsidiary is accounted for in accordance with ASC 810. In February 2018, the Company reversed ab initio the March 17, 2017 holding company reorganization. As a result, the Company re-assumed its prior name, PotNetwork Holdings, Inc. (with an “s” on Holding), while remaining a Colorado corporation. None of the acquisitions or the share capital structure was affected. In February 2018, the shares issued pursuant to the reorganization were cancelled, no other adjustments had been made.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	➢ BASIS OF PRESENTATIONS: ➢ USE OF ESTIMATES: ➢ REVENUE RECOGNITION – DIAMOND CBD BUSINESS: The Company applies the five-step model of revenue recognition under ASC 606 to the sales orders in the e-commerce platform. The following describes the Company’s process per each step (1-5) of ASC606: Step 1: “Identify the contract with a customer”. A. The company’s ecommerce website is making the offer to the customer. B. The customer chooses the product(s) and quantities of each. C. The customer enters its credit card information. D. The contract between the company and the customer is concluded when the authorization is taken vis-a-vis the merchant account which processes the credit card payment. Step 2: “Identify the performance obligations in the contract”. The company ships the merchandise and subsequently records the customer payment Step 3: “Determine the transaction price”. The website states each product’s regular price, and applicable sale price which is the amount that the customer pays the company. Step 4: “Allocate the transaction price to the performance obligations in the contract”. The company’s e-commerce platform applies any quantity discount or other discount offered by the Company, automatically. Step 5: “Recognize revenue when the entity satisfies a performance obligation”. The Company records the sale upon the order’s shipping, identified by a tracking number. ⮚ CASH AND CASH EQUIVALENTS: ➢ ACCOUNTS RECEIVABLE: ➢ ASSESSMENT OF COLLECTABILITY: o Receivables supervisor is authorized to collect delinquent accounts o The Treasurer has the authority to assign accounts to a third party for collection o Recording of Accounts Receivable: All amounts due on physical delivery of the merchandise from the drop-shipper, must be promptly recorded as an accounts receivable. Each account receivable must be recorded and maintained until payment is received or the recorded amount is written off or extinguished. o An adequate provision for doubtful accounts must be established. When all reasonable efforts fail to collect an account receivable and it has been approved for write off, the related provision for doubtful accounts should be reduced. o Control and Subsidiary Accounts: The accounting system incorporates control accounts, where applicable, to ensure the completeness and accuracy of individual accounts. The Receivables supervisor must maintain subsidiary accounts for individual debtors in a manner that discloses, at a given point in time, the aggregate amount owed by each debtor as well as individual amounts making up the aggregate amount. Monthly, the subsidiary accounts for each accounts receivable must be reconciled with the control account. o Checks that are returned from the bank as non-negotiable are assessed a returned cheque charge. If there are 2 cheques returned from the same customer within a month, no further cheques will be accepted from the customer unless the cheques are certified, until there is an acceptable payment history for a further one-year period. o Statements to Debtors: Statements must be issued to debtors, on a monthly basis, providing meaningful and concise information on the status of their debts. o Accounts receivable are considered overdue when a debtor does not pay or resolve the debt within 30 days from the invoice date or a written request for payment to the debtor. o All actions taken to collect overdue accounts must be documented. o If there is no response after the initial contact at the 30-day point (within a 30-day period – 60 days from date of invoice), accounts will be forwarded to Treasury Staff to take prompt and vigorous action to collect overdue accounts receivable. o Accounts receivable, in most cases, should be at least 30 days overdue (i.e., 60 days after invoice notification), before staff advises debtors that their accounts are overdue and that the accounts may be: · turned over to a private collection agency; · subject to legal action · credit privileges will be revoked; and/or account may be suspended. ➢ PREPAID EXPENSES: ➢ PROPERTY AND EQUIPMENT: ➢ PROPERTY AND EQUIPMENT: ➢ INTANGIBLE ASSETS o Initial Measurement: o Subsequent Measurement: · ASC 350 requires capitalizing any money spent on product development and product improvement. During the current year, money spent on product development is very little and is not significant. ➢ FINANCIAL INSTRUMENTS: Level 1: Valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority; Level 2: Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability; Level 3: Valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and less observable and thus have the lowest priority. ➢ Investments in subsidiaries: ➢ Redemption Right:

GOING CONCERN

GOING CONCERN	6 Months Ended
	Jun. 30, 2019
GOING CONCERN
NOTE 3 - GOING CONCERN	The financial statements are prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business. Since PotNetwork Holdings, Inc. has no uncertainties as on the balance sheet date, the financial statements need no adjustments. Since Diamond CBDs business originated in 2015, it is considered as a business with limited operating history. Hence, this business is subject to all risks inherent in a developing business enterprise. Continued success depends on the problems, difficulties, complications, and delays frequently encountered in the competitive and regulatory environment in which it operates. Since the CBD business is a burgeoning industry, there are no established entities whose business model Diamond CBD can follow or build upon. Regulatory risk Although Diamond CBD does not sell any marijuana-based CBD products, its products could be treated as being illegal by federal/state authorities and by consumers. The Company is involved in a highly competitive industry where it may compete with numerous other companies who offer alternative methods or approaches, who may have far greater resources, more experience, and personnel perhaps more qualified than the Company does. Such resources, experience and personnel may provide a substantial competitive advantage to the competition.

Deferred Tax Computation

Deferred Tax Computation	6 Months Ended
	Jun. 30, 2019
Deferred Tax Computation
NOTE 4 - Deferred Tax Computation	The Company uses the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, Income Taxes. Under this method, income tax expense is recognized for: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entitys financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all the deferred tax assets will not be realized. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. There was no income tax expense during this quarter. However, the availability of a net operating loss carryforward and the associated deduction, is subject to complex and restrictive federal income tax provisions as codified by Internal Revenue Code section 172 and related Treasury Regulations, all of which are subject to change and the availability of which can never be free from doubt. The components of the deferred tax assets and liabilities are as follows: 30 th 2019 31 st 2018 Deferred tax assets: Net operating loss carryovers $ 1,916,162 $ 2,037,105 Stock-based compensation - - Other temporary differences - - Total deferred tax assets 1,916,162 2,037,105 Valuation allowance (1,916,162 ) (2,037,105 ) Net deferred tax asset $ - $ -

INVENTORY - DIAMOND CBD

INVENTORY - DIAMOND CBD	6 Months Ended
	Jun. 30, 2019
INVENTORY - DIAMOND CBD
NOTE 5 - INVENTORY - DIAMOND CBD	This Company has arranged to buy the exact quantity from the suppliers, based on the customer orders and thereby has eliminated the need for holding inventory on hand at any point of time. Otherwise, this Company values the inventory at the lower of cost or market.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2019
COMMITMENTS AND CONTINGENCIES
NOTE 6 - COMMITMENTS AND CONTINGENCIES	There are no commitments and contingencies that exist at present, other than the legal disputes mentioned supra.

BUDGET INTERNAL CONTROL PROCEDU

BUDGET INTERNAL CONTROL PROCEDURES	6 Months Ended
	Jun. 30, 2019
BUDGET INTERNAL CONTROL PROCEDURES
NOTE 7 - BUDGET & INTERNAL CONTROL PROCEDURES	· Internal control procedures for inventory and cash control are being developed and implemented on an ongoing basis to ensure higher levels of performances. · Annual financial budget is reviewed by the Board of Directors. · Quarterly variance reports are reviewed by the Board of Directors.

CAPITAL STOCK

CAPITAL STOCK	6 Months Ended
	Jun. 30, 2019
CAPITAL STOCK
NOTE 8 - CAPITAL STOCK	· Common Stock · Class A preferred stock

Loan from Third Parties

Loan from Third Parties	6 Months Ended
	Jun. 30, 2019
Loan from Third Parties
NOTE 9 - Loan from Third Parties	8 % 8 % 8 % Loan Interest Interest Interest 2018 2019 Q-1 2019 Q-2 A 7/1/2016 $ 25,000 $ 28,000 $ 2,000 $ 30,000 $ 500 $ 30,500 $ 500 $ 31,000 B 7/1/2016 $ 7,000 $ 7,840 $ 560 $ 8,400 $ 140 $ 8,540 $ 140 $ 8,680 $ 35,840 $ 2,560 $ 38,400 $ 640 $ 39,040 $ 640 $ 39,680

Notes Payable

Notes Payable	6 Months Ended
	Jun. 30, 2019
Notes Payable [Abstract]
NOTE 10 - Notes Payable	Payee: Sign N Drive Principal Value: $1,850,000 Issue date: June 2, 2014, amended March 10, 2017 Terms: Interest Free, Fixed Conversion Rate at $.003 per share Embedded Conversion Option: Given the fixed rate conversion price, no derivative liability calculation for the conversion option was deemed required. There is no maturity date for this note. The following table shows the amount of interest waived on annual basis through June 30, 2019: Year Interest Waived 2017 $ 7,318 2018 4,351 2019 (through 6/30) 4,770 The following table sets forth the number of shares of common stock issued pursuant to each conversion under the Note: Quantity of Shares Conversion Price Amount Converted August 13, 2014 161,127,812 0.00032 $ 51,561 April 4, 2016 2,750,000 0.004 11,000 August 2, 2016 4,500,000 0.0012 5,400 November 8, 2016 2,500,000 0.00152 3,800 December 22, 2016 10,000,000 0.00088 8,800 July 5, 2017 42,000,000 0.003 126,000 September 27, 2017 40,000,000 0.003 120,000 February 2, 2018 25,000,000 0.003 75,000 May 29, 2018 25,000,000 0.003 75,000 June 5, 2018 25,000,000 0.003 75,000 December 4, 2018 1,550,000 0.003 4,650 December 14, 2018 6,000,000 0.003 18,000 December 20, 2018 12,333,334 0.003 37,000 April 17, 2019 46,050,000 0.003 138,150 June 26, 2019 26,000,000 0.003 78,000 Per the above table: $246,000 was converted into common stock in 2017; and $284,650 was converted into common stock in 2018. Payee: Iliad Research & Trading LP On October 25, 2018, the Company issued a Note in the face amount of $5,525,000 which accrues interest at the rate of 10% per annum. The note has an Original Issue Discount (OID) of $500,000. The Note and any interest thereon is convertible at a fixed rate of $0.45 per share of common stock or after 12 months, at a variable conversion rate, the “redemption conversion price” at the lower of the fixed rate of $.45 per share, or a discount to the market price as defined in the Note. The Note is comprised of five (5) tranches (each, a “Tranche”), consisting of (i) an Initial Tranche in an amount equal to $1,400,000.00 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents (as defined in the Purchase Agreement) (the ‘‘Initial Tranche”), and (ii) four (4) additional Tranches, one (l) in the amount of $1,375,000.00, one (l) in the amount of $550,000.00, and two (2) in the amount of $1,100,000.00, plus any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents. · $1,400,000 was received on 10/31/2018 · $825,000 was received on 12/18/2018 · $18,410 is the accrued interest for 2018 On February 8, 2019, the Company issued a Note in the face amount of $3,325,000 which accrues interest at the rate of 10% per annum. The note has an Original Issue Discount (OID) of $300,000. The Note and any interest thereon is convertible at a fixed rate of $0.45 per share of common stock or after 12 months, at a variable conversion rate, the “redemption conversion price” at the lower of the fixed rate of $.45 per share, or a discount to the market price as defined in the Note. The Note is comprised of three (3) tranches (each, a “Tranche”), consisting of (i) an Initial Tranche in an amount equal to $1,125,000.00 and any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents (as defined in the Purchase Agreement) (the ‘‘Initial Tranche”), and (ii) two (2) additional Tranches, one (l) in the amount of $500,000.00, and one (l) in the amount of $1,650,000.00, plus any interest, costs, fees or charges accrued thereon or added thereto under the terms of this Note and the other Transaction Documents. · $1,125,000 was received on 2/17/2019 · $77,794 is the accrued interest through 3/31/19 · $84,144 is the accrued interest from 4/1/2019 to June 30, 2019

MANAGEMENT ASSERTIONS ON THE 2

MANAGEMENT ASSERTIONS ON THE 2 COURT CASES REGARDING CONVERTIBLE PROMISSORY NOTES OF PREDECESSOR	6 Months Ended
	Jun. 30, 2019
MANAGEMENT ASSERTIONS ON THE 2 COURT CASES REGARDING CONVERTIBLE PROMISSORY NOTES OF PREDECESSOR
NOTE 11 - Management Assertions on the 2 court cases regarding Convertible Promissory Notes of Predecessor	· Mammoth West Corporation [case# 17 CH 778, 19 th · In each instance, the Note was issued not by the Company, but by the Companys predecessor issuer, SND Auto Company Inc. (which predecessor issuer had changed its name before changing it back to SND Auto Group, Inc.). The Note was issued by SND Auto Company Inc., on June 13, 2016 and on July 18, 2016, respectively, for money paid to SND Auto Company Inc., at a time in which SND Auto Company Inc. was the public Company, operating in the automobile industry. However, on March 14, 2017, SND Auto Company Inc. formed the Company and engaged in a holding Company reorganization whereby the Company became the public entity while SND Auto Company Inc., became its subsidiary. The holding Company reorganization was an express condition of First Capital Venture Holdings Co., which is the parent Company to Diamond CBD, Inc. being acquired by the Company and thereby entering the CBD oil business. The acquisition would not have occurred without the holding Company reorganization. Following this acquisition and the holding Company reorganization, and following the Company becoming the public entity, the stock price increased significantly. In other words, the CBD oil company stock price (the Company, i.e., PotNetwork Holdings, Inc.) was much greater than the stock price of the automobile Company (SND Auto Company Inc.). · The plaintiff invested in an automobile Company, not in the CBD oil business. Yet, plaintiff wants to convert its Note issued by the automobile company into shares of the CBD oil Company, which was not the maker of the Note. · As of December 31, 2017, SND Auto Company Inc., not the Company, owed Mammoth West Corporation $7,280 and Southridge Partners II Limited Partnership $26,000, on the Notes, which obligations were never disputed by SND Auto Company Inc. (which SND Auto Group, Inc. agreed to pay each, in full). · The Company has maintained that these were not debts of the Company, and the holding Company reorganization was engaged in to assure as much, not to avoid payment, but instead, to isolate this debt from the new CBD oil business, SND Auto Company Inc. being a separate and distinct legal entity with its own assets and debts. · However, on February 7, 2018, the Company and its predecessor issuer, SND Auto Company Inc., unwound the March 14, 2017 holding Company reorganization. · Because of that unwinding, Companys counsel agrees that the Company, the public entity, became liable for this SND Auto Group, Inc. Notes, but only as of the February 7, 2018 rewinding, not prior thereto. · So, at this point, the dispute between the parties surrounds the conversion price. · In each case, the terms of the Note entitle the plaintiff, as holder, to convert into shares of the makers common stock. · On March 28, 2017 and on April 24, 2017, the conversion notice in each case was issued, not to SND Auto Group, Inc., the maker, but to the Company, for shares of the Companys common stock. · The terms of the Note entitle the plaintiff to payment in cash or in shares of the maker (SND Auto Group, Inc.), at a discount of 65% of the lowest trading price of the preceding 30 trading days. · Instead, however, the plaintiff has throughout, sought to convert into shares of the Company, at a fraction of a penny per share, or approximately 2,700,000 shares in each instance (as opposed to approximately 56,000 shares in each instance), of the Company SND Auto Group, Inc. · It is the Companys position that the Company only became obligated for the Note (which is the obligation of the maker, SND Auto Group, Inc.), upon the unwinding of the reorganization, or as of February 7, 2018, when the Companys stock price was considerably higher (and therefore obligated to issue far fewer shares in satisfaction of the conversion notice) than it was prior to the holding Company reorganization and the acquisition of First Capital Venture Holdings Co. · The Company intends to vigorously defend against this claim. The Company is confident in its position.

SUBSEQUENT EVENTS AFTER 30th JU

SUBSEQUENT EVENTS AFTER 30th JUNE, 2019	6 Months Ended
	Jun. 30, 2019
SUBSEQUENT EVENTS AFTER 30th JUNE, 2019
NOTE 12 - SUBSEQUENT EVENTS AFTER 30th JUNE, 2019	NONE.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2019
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
BASIS OF PRESENTATIONS	The statements were prepared following generally accepted accounting principles of the United States of America which were consistently applied.
USE OF ESTIMATES	Management uses estimates and assumptions in preparing these financial statements in accordance with U.S. generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.
REVENUE RECOGNITION DIAMOND CBD BUSINESS	Revenue from the sale of goods is measured at fair value of the consideration received or receivable and is recognized in the statement of comprehensive income of the Company when significant risks and rewards of the ownership of the goods have been transferred to the buyers. The Company applies the five-step model of revenue recognition under ASC 606 to the sales orders in the e-commerce platform. The following describes the Company’s process per each step (1-5) of ASC606: Step 1: “Identify the contract with a customer”. A. The company’s ecommerce website is making the offer to the customer. B. The customer chooses the product(s) and quantities of each. C. The customer enters its credit card information. D. The contract between the company and the customer is concluded when the authorization is taken vis-a-vis the merchant account which processes the credit card payment. Step 2: “Identify the performance obligations in the contract”. The company ships the merchandise and subsequently records the customer payment Step 3: “Determine the transaction price”. The website states each product’s regular price, and applicable sale price which is the amount that the customer pays the company. Step 4: “Allocate the transaction price to the performance obligations in the contract”. The company’s e-commerce platform applies any quantity discount or other discount offered by the Company, automatically. Step 5: “Recognize revenue when the entity satisfies a performance obligation”. The Company records the sale upon the order’s shipping, identified by a tracking number.
CASH AND CASH EQUIVALENTS	Cash equivalents include short-term, highly liquid investments with maturities of three months or less at the time of acquisition and the balance cash in hand and the balance in bank accounts.
ACCOUNTS RECEIVABLE	Accounts Receivable (AR) is the payment which the Company will receive from its customers who have purchased its goods & services in the last month of the year and on credit terms. Usually the credit period is short, approximately a few days.
ASSESSMENT OF COLLECTABILITY	m Receivables supervisor is authorized to collect delinquent accounts m The Treasurer has the authority to assign accounts to a third party for collection m Recording of Accounts Receivable: All amounts due on physical delivery of the merchandise from the drop-shipper, must be promptly recorded as an accounts receivable. Each account receivable must be recorded and maintained until payment is received or the recorded amount is written off or extinguished. m An adequate provision for doubtful accounts must be established. When all reasonable efforts fail to collect an account receivable and it has been approved for write off, the related provision for doubtful accounts should be reduced. m Control and Subsidiary Accounts: The accounting system incorporates control accounts, where applicable, to ensure the completeness and accuracy of individual accounts. The Receivables supervisor must maintain subsidiary accounts for individual debtors in a manner that discloses, at a given point in time, the aggregate amount owed by each debtor as well as individual amounts making up the aggregate amount. Monthly, the subsidiary accounts for each accounts receivable must be reconciled with the control account. m Checks that are returned from the bank as non-negotiable are assessed a returned cheque charge. If there are 2 cheques returned from the same customer within a month, no further cheques will be accepted from the customer unless the cheques are certified, until there is an acceptable payment history for a further one-year period. m Statements to Debtors: Statements must be issued to debtors, on a monthly basis, providing meaningful and concise information on the status of their debts. m Accounts receivable are considered overdue when a debtor does not pay or resolve the debt within 30 days from the invoice date or a written request for payment to the debtor. m All actions taken to collect overdue accounts must be documented. m If there is no response after the initial contact at the 30-day point (within a 30-day period 60 days from date of invoice), accounts will be forwarded to Treasury Staff to take prompt and vigorous action to collect overdue accounts receivable. m Accounts receivable, in most cases, should be at least 30 days overdue (i.e., 60 days after invoice notification), before staff advises debtors that their accounts are overdue and that the accounts may be: · turned over to a private collection agency; · subject to legal action · credit privileges will be revoked; and/or account may be suspended.
PREPAID EXPENSES	Prepaid expenses are future expenses that have been paid in advance. In other words, prepaid expenses are costs that have been paid but are not yet used up or have not yet expired. The companys prepaid expenses is mostly advance payment to the drop shipper
PROPERTY AND EQUIPMENT	As on the date of the financial statements, the Company does not hold any assets. As on the date of the financial statements, the Company does not hold any assets
INTANGIBLE ASSETS	m Initial Measurement: m Subsequent Measurement: · ASC 350 requires capitalizing any money spent on product development and product improvement. During the current year, money spend on product development is very little and is not significant.
FINANCIAL INSTRUMENTS	· For certain of the Companys financial instruments, including cash, accrued expenses and short-term debt, the carrying amounts approximate their fair values due to their short maturities. We adopted ASC Topic 820, Fair Value Measurements and Disclosures, which requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, Financial Instruments, defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the balance sheets for current liabilities qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of valuation hierarchy are defined as follows: Level 1: Valuations consist of unadjusted quoted prices in active markets for identical assets and liabilities and has the highest priority; Level 2: Valuations rely on quoted prices in markets that are not active or observable inputs over the full term of the asset or liability; Level 3: Valuations are based on prices or third party or internal valuation models that require inputs that are significant to the fair value measurement and are less observable and thus have the lowest priority. · Investments in subsidiaries: · Redemption Right:

Deferred Tax Computation (Table

Deferred Tax Computation (Tables)	6 Months Ended
	Jun. 30, 2019
Deferred Tax Computation
Schedule Of Deferred Tax Asset And Liabilities	30 th 2019 31 st 2018 Deferred tax assets: Net operating loss carryovers $ 1,916,162 $ 2,037,105 Stock-based compensation - - Other temporary differences - - Total deferred tax assets 1,916,162 2,037,105 Valuation allowance (1,916,162 ) (2,037,105 ) Net deferred tax asset $ - $ -

Loan from Third Parties (Tables

Loan from Third Parties (Tables)	6 Months Ended
	Jun. 30, 2019
Loan from Third Parties (Tables)
Schedule of Loan	8 % 8 % 8 % Loan Interest Interest Interest 2018 2019 Q-1 2019 Q-2 A 7/1/2016 $ 25,000 $ 28,000 $ 2,000 $ 30,000 $ 500 $ 30,500 $ 500 $ 31,000 B 7/1/2016 $ 7,000 $ 7,840 $ 560 $ 8,400 $ 140 $ 8,540 $ 140 $ 8,680 $ 35,840 $ 2,560 $ 38,400 $ 640 $ 39,040 $ 640 $ 39,680

Notes Payable (Tables)

Notes Payable (Tables)	6 Months Ended
	Jun. 30, 2019
Notes Payable (Tables)
Schedule of interest waived	Year Interest Waived 2017 $ 7,318 2018 4,351 2019 (through 6/30) 4,770
Converted into common stock	Quantity of Shares Conversion Price Amount Converted August 13, 2014 161,127,812 0.00032 $ 51,561 April 4, 2016 2,750,000 0.004 11,000 August 2, 2016 4,500,000 0.0012 5,400 November 8, 2016 2,500,000 0.00152 3,800 December 22, 2016 10,000,000 0.00088 8,800 July 5, 2017 42,000,000 0.003 126,000 September 27, 2017 40,000,000 0.003 120,000 February 2, 2018 25,000,000 0.003 75,000 May 29, 2018 25,000,000 0.003 75,000 June 5, 2018 25,000,000 0.003 75,000 December 4, 2018 1,550,000 0.003 4,650 December 14, 2018 6,000,000 0.003 18,000 December 20, 2018 12,333,334 0.003 37,000 April 17, 2019 46,050,000 0.003 138,150 June 26, 2019 26,000,000 0.003 78,000

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	6 Months Ended
	Jun. 30, 2019USD ($)
Redemption Right [Member]
Convertible promissory notes	$ 1,200,000
Property and Equipment [Member]
Computers and office equipment	5 years
Office furniture and fixtures	7 years

DEFERRED TAX COMPUTATION (Detai

DEFERRED TAX COMPUTATION (Details) - USD ($)	Jun. 30, 2019	Dec. 31, 2018
DEFERRED TAX COMPUTATION (Details)
Valuation allowance	$ (1,916,162)	$ (2,037,105)
Deferred tax assets:
Net operating loss carryovers	1,916,162	2,037,105
Other temporary differences
Stock-based compensation
Total deferred tax assets	1,916,162	2,037,105
Net deferred tax asset

CAPITAL STOCK (Details Narrativ

CAPITAL STOCK (Details Narrative) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
CAPITAL STOCK (Details Narrative)
Common stock shares, authorized	1,000,000,000	1,000,000,000
Common stock shares, par value	$ .00001	$ .00001
Common stock shares, issued	700,706,621	569,364,762
Common stock shares, outstanding	700,706,621	569,364,762
Preferred stock shares, authorized	50,000	50,000
Preferred stock shares, par value	$ .00001	$ .00001
Preferred stock shares, issued	34,289	39,839
Preferred stock shares, outstanding	34,289	39,839

LOAN FROM THIRD PARTIES (Detail

LOAN FROM THIRD PARTIES (Details) - USD ($)	3 Months Ended		12 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018
A [Member] | 7/1/2016 [Member]
8% Interest amount	$ 31,000	$ 30,500	$ 30,000
Loan amount	28,000
Loan	25,000
8% Interest	500	500	2,000
B [Member] | 7/1/2016 [Member]
8% Interest amount	8,680	8,540	8,400
Loan amount	7,840
Loan	7,000
8% Interest	140	140	560
Total[Member]
8% Interest amount	39,680	39,040	38,400
Loan amount	35,840
8% Interest	$ 640	$ 640	$ 2,560

Notes Payable (Details)

Notes Payable (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017
Notes Payable (Details)
Interest Waived	$ 4,770	$ 4,351	$ 7,318

Notes Payable (Details 1)

Notes Payable (Details 1)	6 Months Ended
	Jun. 30, 2019USD ($)$ / sharesshares
August 2, 2016 [Member]
Conversion Price | $ / shares	$ 0.0012
Quantity of Shares | shares	4,500,000
Amount Converted | $	$ 5,400
April 4, 2016 [Member]
Conversion Price | $ / shares	$ 0.004
Quantity of Shares | shares	2,750,000
Amount Converted | $	$ 11,000
June 26, 2019 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	26,000,000
Amount Converted | $	$ 78,000
April 17, 2019 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	46,050,000
Amount Converted | $	$ 138,150
December 20, 2018 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	12,333,334
Amount Converted | $	$ 37,000
December 14, 2018 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	6,000,000
Amount Converted | $	$ 18,000
December 4, 2018 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	1,550,000
Amount Converted | $	$ 4,650
June 5, 2018 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	25,000,000
Amount Converted | $	$ 75,000
May 29, 2018 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	25,000,000
Amount Converted | $	$ 75,000
February 2, 2018 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	25,000,000
Amount Converted | $	$ 75,000
September 27, 2017 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	40,000,000
Amount Converted | $	$ 120,000
July 5, 2017 [Member]
Conversion Price | $ / shares	$ 0.003
Quantity of Shares | shares	42,000,000
Amount Converted | $	$ 126,000
November 8, 2016 [Member]
Conversion Price | $ / shares	$ 0.00152
Quantity of Shares | shares	2,500,000
Amount Converted | $	$ 3,800
December 22, 2016 [Member]
Conversion Price | $ / shares	$ 0.00088
Quantity of Shares | shares	10,000,000
Amount Converted | $	$ 8,800
August 13, 2014 [Member]
Conversion Price | $ / shares	$ 0.00032
Quantity of Shares | shares	161,127,812
Amount Converted | $	$ 51,561

Notes Payable (Details Narrativ

Notes Payable (Details Narrative) - USD ($)	Feb. 08, 2019	Feb. 17, 2019	Dec. 18, 2018	Oct. 31, 2018	Oct. 25, 2018	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2018
Converted into common stock							$ 284,650	$ 246,000
Tranche One [Member]
Accrued interest charges fees and costs	$ 1,125,000				$ 1,400,000
Tranche Two [Member]
Accrued interest charges fees and costs	500,000				1,375,000
Tranche Three [Member]
Accrued interest charges fees and costs	1,650,000				550,000
Tranche Four [Member]
Accrued interest charges fees and costs					1,100,000
Sign N Drive Auto Mall, Inc. [Member]
Principal value						$ 1,850,000
Fixed conversion rate						$ .003
Converted into common stock in 2017						$ 438,000
Converted into common stock in 2018						172,650
Converted into common stock in 2019						216,150
Illiad Research & Trading LP [Member]
Fixed conversion rate	$ 0.45				$ 0.45
Face amount	$ 3,325,000				$ 5,525,000
Accrues interest	10.00%				10.00%
Original issue discount	$ 300,000				$ 500,000
Accrued interest						$ 163,218			$ 18,410
Amount received		$ 1,125,000	$ 825,000	$ 1,400,000

Management Assertions on the _2

Management Assertions on the 2 court cases regarding Convertible Promissory Notes of Predecessor (Detail Narrative)	6 Months Ended
	Jun. 30, 2019USD ($)shares
Converted shares | shares	56,000
SND Auto Group Inc [Member]
Converted shares | shares	2,700,000
Trading price description	The terms of the Note entitle the plaintiff to payment in cash or in shares of the maker (SND Auto Group, Inc.), at a discount of 65% of the lowest trading price of the preceding 30 trading days.
SND Auto Group Inc [Member] | Mammoth West Corporation [Member]
Owed amount | $	$ 7,280
SND Auto Group, Inc [Member ] | Southridge Partners II Limited [Member ]
Owed amount | $	$ 26,000