Surna Inc. (OTCMKTS:SRNA) Spikes Before Filing 10-Q
Surna Inc. (OTCMKTS:SRNA) managed another spectacular 25.34% jump on Friday, as investors bubbled with anticipation to receive the quarterly report of one of the few marijuana related companies that still appears to show any promise.
The marijuana rush of 2014 ended up leaving many investors low, but evidently there are still enthusiasts that wish to invest in pot stocks, as well as opportunists that wish to ride the hype surrounding marijuana companies to the top of the charts. A couple of days ago, SRNA presented an excellent opportunity for both groups, after announcing the retirement of 21 million shares of its common stock previously held by Tom Bollich, SRNA‘s ex-CEO.
As the charts indicate, this turn of events was universally taken as an very good sign and hopes ran high that the upcoming 10-Q will not disappoint either.
Well, as for that, the report did come out after Friday’s trading session, and it didn’t look pretty:
- Cash – $145 thousand
- Total Current Assets – $2 million
- Total Current Liabilities – $3.3 million
- Revenue – $1.7 million
- Net Loss – $977 thousand
In most respects, the numbers in this filing are superior to the ones in all previous SRNA reports – the company shows actual growth in both assets and revenues quarter over quarter, which is good news indeed. However, at this point, investors should probably focus on the fact that the company reported a measly $145 thousand under cash on hand, as well as the fact that it is still failing to make ends meet – and not by a small margin.
True enough, $584 thousand of SRNA‘s almost $1 million worth of net loss was attributable to amortization of debt – however, the fact remains that SRNA is struggling on both the stock market and commercially.
Another red flag that investors should definitely take notice of is the fact that the company still has $1.6 million in convertible promissory notes – some of which convert at serious discounts. Their issuance has led to a serious dilution of SRNA‘s common stock outstanding and has had an impact on investor value.
In conclusion – both opportunistic traders and long term investors would do well to be extra careful and diligent when dealing with this stock, because in light of the company’s newly announced poor performance, SRNA‘s stock prices might be in for quite a plummet.
