Terra Tech Corp. (OTCMKTS:TRTC) Returns to Prices Above $0.50
At the start of the month the stock of Terra Tech Corp. (OTCMKTS:TRTC) was once again reaching record heights when it closed at $0.60 on February 6. On the very same day though TRTC announced a new financing deal that left investors rather unhappy. As a result the next three sessions saw their stock correct back down to $0.43 per share.
The securities purchase agreement that caused the sudden change in sentiment will make available to the company the sum of $6.8 million over the next 12 months. At the same time Dominion Capital LLC who will be providing the funds will have the option to convert their promissory notes at just $0.307 per share, nearly 50% lower than the market price at the day of the announcement. They will also receive warrants to purchase up to 50% the amount of shares of the note at the same price.
The dilution will undoubtedly influence the stock performance of the company but TRTC might be able to keep most of the hype-induced gains it has made during the past months. The company, through its Edible Gardens subsidiary is generating respectable revenues and at the end of September 30, 2013 reported the following results:
- $40 thousand cash
- $837 thousand total current assets
- $3.7 million total current liabilities
- $773 thousand revenues
- $15 thousand net loss
The opportunity to fall back to a reliable and stable business, if their medical cannabis ventures don’t turn out to be as promising, certainly puts TRTC at an advantage when the hype around the marijuana industry starts to subside.
For now though the widespread optimism is holding strong. It received a further boost on Friday when the Treasury Department and the Justice Department both released guidelines that largely told banks it is ok to deal with legitimate marijuana businesses. This means that banks offering services to state-regulated marijuana companies will not be prosecuted under federal money-laundering laws.
Such major news influenced the market of marijuana pennystocks almost immediately reinvigorating the enthusiasm among traders. TRTC surged upwards and closed 16% up at $0.54 while both Growlife, inc. (OTCBB:PHOT) and Medical Marijuana, Inc. (OTCMKTS:MJNA) were spared a day of losses. PHOT rose by 8.5% to $0.38 per share followed closely by MJNA who ended the week at $0.31.
