Last Friday, the share price of Terra Tech Corp (OTCMKTS:TRTC) surged more than 17% to close the day at $0.247 per share. It was the second consecutive day of gains for the TRTC stock. However, the things changed for worse after the company filed its annual report for FY2014 after the close of market.
As per the latest annual financial report, Terra Tech recorded cash of $846,000. It reported current liabilities of $6.4 million while the annual revenue came at $7million. The company posted annual net loss came of $22 million. The financial figures are dismal and clearly not what investors were projecting. The higher expectations didn’t have any strong base as there were never any indications that financials numbers will beat the expectations.
Terra Tech Corp (OTCMKTS:TRTC) reported cash balance of $3.47 million in September 2014. However, it was nowhere visible in December 2014. A major part of the cash balance was wiped out due to the heavy expenses related with the development activities. Also, the company incurred additional expenses due to the launch of its IVXX brand. The other costs were associated with the ongoing initiatives to establish numerous dispensaries and increasing growing and cultivation facilities in Nevada.
The cash position
As per the report, Terra Tech has dismal cash position. There is a dire need for funds to carry out its operations in the future. The company went for two cash injections in this year itself. It made an equity line deal with Magna Equities in last week of December. However, it disclosed agreement details in January. Then in February, It issued a series of ‘Note’ amounting to $3 million. The convertibles issued included heavy discount provisions posing a great dilution risk. The conversion was decided at a 25% discount from TRTC’s lowest VWAP measured twenty days before conversion.