BuyPennyStocks and Terra Tech Corp (OTC:TRTC) Want to Get High

Marijuana has been extremely hot in Pennyland recently, and companies of all shapes and sizes, are battling it out to get some public exposure. The question is: Do they need the publicity so that they can develop their business, or do they have some different ideas in mind? We dug into the history of Terra Tech Corp (OTC:TRTC) to find out.

Some new laws allowing the use of marijuana for medical reasons were passed a couple of months ago, and since then, the small cap companies have been going crazy. The promoters’ emails never fail to mention President Obama’s positive attitude towards medical weed and they are only too happy to use it as an excuse to say that a company like TRTC is truly a solid investment alternative. They even say that it could bring you some genuinely long-term profits. We have researched some of these companies and we did find out that more often than not, this is not the case. Can we, please, see anything different from TRTC?

Things don’t look too encouraging when you open the financial statement. Until about a year ago, TRTC was in the business of developing a VoIP software, and then, out of the blue, the management decided that it’s time for a change and they acquired a company called GrowOp which specializes in the designing and production of devices that will help you grow marijuana and other agricultural products inside your own home. On paper, it all seems very good, since the people that entered the company management when the acquisition took place had some experience in the field and their motivation was further boosted with a huge number of preferred TRTC shares (convertible into an even bigger number of common stock). Unfortunately now, a year later, however, we have yet to see the fruits of their labor, as the financials below will show you:

• cash: $60 thousand
• current assets: $449 thousand
• current liabilities: $691 thousand
• revenue (Q3 of 2012): $124 thousand
• net loss (Q3 of 2012): $260 thousand

In their email, BuyPennyStocks tell us that TRTC‘s contraptions, whatever they do, cost around $42,000 a piece. A simple calculation shows that between June and September they have sold less than 3 units. That’s not very much especially considering the fact that the accumulated deficit so far is $4.3 million.

Remember when we mentioned that the TRTC‘s current CEO, Derek Peterson has some experience working in the marijuana industry? Before GrowOp was formed he was co-owner of a company called weGrow, who were a retail store chain that specialized in the distribution of marijuana-growing paraphernalia. Apparently, Mr. Peterson and his partner at weGrow, Dhar Mann, didn’t exactly get along. So much so, that according to the July quarterly report of TRTC, a lawsuit was in action against Mr. Peterson and the losses that Mr. Mann claims in court are $2.2 million. We couldn’t find any information on the outcome of the case (if any) but you should keep in mind that if Mann manages to win the lawsuit, the consequences for TRTC will be huge.

BuyPennyStocks are probably unaware of this but, then again, if they had included this information in their email, it wouldn’t have sounded as exciting as it does now. Their emails for Thwapr Inc (PINK:THWI) also sounded exciting back in July 2012, but that didn’t stop THWI form spiraling out of control. When the pump took place, THWI were traded at $0.30 while now they are in the sub-penny field.