Halitron ($HAON) – A “mini-Berkshire Hathaway
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There are many different corporate strategies out there that have been shown great success. One such strategy is referred to as the roll-up equity holding method. The roll-up method is a business practice that occurs when a company acquires multiple smaller companies within the same or similar industry. By combining smaller companies, the acquisition company is able to develop a larger enterprise that can thrive on economies of scale.
In addition, the roll-up method is seen as a conservative strategy because it involved diversification across an industry and the economies of scale help cut costs. By focusing on a “lean” business structure, the acquisition company is able to cut costs and use existing structure efficiently to drive growth.
One such company that utilizes the roll-up equity holding business model is Halitron, Inc. (OTC Pink: HAON).
Overview: Halitron, Inc. (OTC Pink: HAON)
Halitron, Inc. (OTC Pink: HAON) is engaged as a roll-up, equity holding company. The company operates numerous different businesses, across several different industries and focuses. The company is based out of Newtown, Connecticut and is specifically interested in acquiring businesses that are engaged in sales, marketing and manufacturing. As Halitron, Inc. (OTC Pink: HAON) acquires more businesses; management is able to integrate the acquired business into its existing holdings. This helps to keep costs low and helps foster growth at a quicker pace. Overall, Halitron, Inc. (OTC Pink: HAON) looks to have a business that largely resembles a “mini-Berkshire Hathaway,” which has a very diverse set of subsidiary holdings.
Here is a look at Halitron, Inc. (OTC Pink: HAON)’s current subsidiary holdings:
Teknik Digital Arts: Video game trademark and license business; founded in January 2003
NDG Holdings, Inc.: Digital marketing services, acquired in January 2015
Pieces In Places: Archival grade document enclosures, photo pages, and albums; acquired in February 2016
Archival Museum Supplies: E-commerce business that supplies archival museum supplies; acquired in March 2016
CinchSigns: Direct marketing business, printed point of purchase supplies. Company was acquired from Plastic Retail Displays, LLC in June 2016
Archival Albums & Photo Pages: E-commerce business that supplies archival scrapbooking supplies
PRD Holdings, Inc.: Mexico-based manufacturing operations
HAON: Plans to Disrupt Scrapbooking Industry
While Halitron, Inc. (OTC Pink: HAON) maintains a diverse group of businesses, management has greater plans to make a splash in the scrapbooking market. The company is planning to disrupt the market by bringing scrapbooking into the 21st century. Management plans to offer a service that will bridge the gap between aging the aging baby-boomer population and digital technology. Now that almost everything in our lives is digitalized, why wouldn’t scrapbooking follow suit?
According to reports from management, Halitron, Inc. (OTC Pink: HAON) is currently looking for strategic partners to help build and design the digital scrapbooking platform.
The Facebook-meets-Ancestry.com style platform could be a major homerun for the partnership, as some see the digital scrapbook business potentially competing in the multi-billion market capitalization social media and secure digital storage industries.
Early Plans For The Digital Scrapbook Platform
While there are no official plans yet, management is planning on using Halitron, Inc. (OTC Pink: HAON)’s 148,000 customer list and targeting the 50-to-80 year old demographic. The strategic partnership will be able to launch a digital platform that assists elderly people that do not have the know-how nor the equipment to digitalize their life memories.
With the goal of assisting the elderly with the frustrating process of the fast-paced technology world, Halitron, Inc. (OTC Pink: HAON) is focusing on a key niche that is only expanding. Whether you have a loved one with limited skillsets, or simply want a digital platform to house all of your treasured family memories, the new scrapbook service will certainly be a game changer.
HAON: Financial and Industry Analysis
Turning to Halitron, Inc. (OTC Pink: HAON)’s financial standing, the equity holding company maintains a market value of $472,113, as of February 2017. Furthermore, the company has a share structure consisting of 650 million authorized shares, 393.43 million shares outstanding, and a float consisting of 183.4 million shares, as of December 2016. During full year 2016, Halitron, Inc. (OTC Pink: HAON) reported total revenue of $132,910 and a net loss of $986,594. During the fourth quarter 2016, the company reported total assets of $1.51 million, and total liabilities of $1.51 million.
Management’s initiative to bring scrapbooking into the 21st century will take some time to develop, but it could prove be a major disruptor to the industry. However, while Halitron, Inc. (OTC Pink: HAON) is working with strategic partners to develop the digital scrapbooking platform, the company’s other businesses could pick up some of the slack. The Facebook, Inc. (NASDAQ: FB)-meets-Ancestry.com platform has some potential partners thinking it could be competitive in the multi-billion-dollar social media and secure digital storage markets. Overall, the company continues to focus on its equity holding business model and strives to become the next “mini-Berkshire Hathaway.”
Here are five other companies that operate as an equity holding company or conglomerate, which are worth taking a look at with regards to how Halitron, Inc. (OTC Pink: HAON) could be valued:
Turner Venture Group, Inc. (OTC Pink: TVOG), formerly known as Turner Valley Oil & Gas, Inc., operates as a holding company with particular focus on the energy industry. However, the company notes that it is always on the look for merger and acquisition opportunities within the real estate, construction, technology, environment, and other industries. As of February 2017, the holding company maintains a market cap value of $1.21 million. Furthermore, Turner Venture Group, Inc. has a share structure consisting of 500 million authorized shares, 86.1 million shares outstanding, and a float consisting of 69.3 million shares, as of December 2016. During the third quarter 2016, the company reported no revenue and a net loss of $4,347.
Chineseinvestors.com, Inc. (OTCQB: CIIX) operates a diverse group of businesses. The company started out as a web service that serves as a financial resource for Chinese-speaking people. Recently, the company announced that it has partnered with Medicine Man, in which the partnership will develop licensing and consulting services for the cannabis industry within the U.S. and Canada. The company has a market cap value consisting of $11.88 million, as of February 2017. Furthermore, Chineseinvestors,com, Inc. has a share structure of 80 million authorized shares, 7.66 million shares outstanding, and a float consisting of 6.6 million shares, as of September 2016. During the company’s quarter ending November 30, 2016, Chineseinvestors.com, Inc. reported total revenue of $510,000 and a net loss of $270,000.
LVMH-Moet Hennessy Louis Vuitton (OTC Pink: LVMUY) operates as a luxury goods conglomerate, which offers perfumes, cosmetics, watches, jewelry, luggage, alcohol, and more. The company owns and operates brands, such as Louis Vuitton, Christian Dior, Loewe, Hennessy, Moet & Chandon, Ponsardin, and more. The luxury conglomerate has a market cap of $100.91 billion and outstanding share count of 502.03 million, as of February 2017. During the fourth quarter, LVMH-Moet Hennessy Louis Vuitton reported total revenue of nearly $10.21 million and net
3M Company (NYSE: MMM) is a massive conglomerate that operates across many sectors, which includes: “automotive, electronics and energy, appliance, paper and printing, packaging, food and beverage, construction, medical clinics and hospitals, pharmaceuticals, dental and orthodontic practitioners, health information systems, food manufacturing and testing, consumer and office retail, office business to business, home improvement, drug and pharmacy retail.” The 3M Company has a market cap consisting of $109.07 billion, as of February 2017. Overall, the conglomerate has a share structure consisting of 596.2 million shares outstanding and a float consisting of 595.65 million shares. During the fourth quarter 2016, 3M Company reported total revenue of $7.33 million and net income of $1.16 million.
Berkshire Hathaway, Inc. (NYSE: BRK.A) (NYSE: BRK. is the massive conglomerate that is led by Chairman and CEO Warren Buffett. The massive conglomerate owns well-known assets, including: Dairy Queen, GEICO, Duracell, Kraft Heinz Co. (NASDAQ: KHC), and more. Berkshire’s holdings are so vast that the conglomerate has a stake in almost anything you can think of, ranging from boxed chocolates, furniture, roofing, newspapers and batteries to energy storage, piping, electronic components, and much more. The massive conglomerate has a market cap value of $414.5 billion, as of February 2017. Berkshire Hathaway, Inc.’s B-class shares have outstanding shares of 1.29 billion and float consisting of 1.29 billion shares. During the company’s last reported quarter (September 30, 2016), it reported total revenue of $59.1 billion and net income of $7.2 billion.
Overall, Halitron, Inc. (OTC Pink: HAON) is well positioned to capitalize on its disruptive digital scrapbooking platform that is currently in the works. The hobby and stationery’s strong 11% CAGR will create the perfect environment for success for Halitron, Inc. (OTC Pink: HAON)’s initiatives. Furthermore, Haliton, Inc. (OTC Pink: HAON) is considerably undervalued when comparing to some other comparable industry competitors; especially compared to Turner Venture Group, Inc. Turner Venture Group, Inc. has a market cap of $1.21 million, yet has never generated a single dollar in revenue in recent times. Halitron, Inc. (OTC Pink: HAON), on the other hand, reported total 2016 revenues of nearly $133,000 and has a miniscule market cap of only $472,113. Overall, Halitron, Inc. (OTC Pink: HAON) is well positioned to continue capitalizing on its equity holding business model and potentially disrupt a strong-growth industry.
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