Terra Tech Corp. (OTCMKTS:TRTC) Struggles to Break Fall

The company is currently sitting 28% below its price level prior to filing its 10-Q last Thursday. The filing was backed up by an upbeat press release, informing of a 700% increase of revenues on a year-over-year basis. As we previously examined, this is actually true but this increase also constituted a shrink on a quarter-over-quarter basis. Here is the brief rundown of the figures reported for the quarter ended March 31:

• $2.9 million in cash
• $6 million in current liabilities
• $560 thousand in quarterly revenues
• $4.9 million in quarterly net loss

The $560 thousand, while indeed more than 700% up from Q1 of 2013, are the lowest quarterly revenue figure reported since the acquisition of Edible Garden – TRTC‘s main revenue machine. While there are likely seasonal fluctuations in the prices of the lettuce and potherbs Edible Garden produces and the last three months may be justifiably less successful, the company still chose to announce spectacular YoY growth in its PR. At the same time, the $560 thousand are the lowest quarterly revenue logged since TRTC started selling Edible Garden produce. With the April announcement of expansion into 75 new stores, hopefully the next report will contain better figures.

TRTC‘s quarterly net loss is also intimidating. Sliced to a gross margin of 0.3%, the company recorded close to $5 million in net loss over just three months, compared to $6 million over all of 2013. On the upside, TRTC now has close to $3 million in cash and this was not accumulated through terribly toxic financing. The increase in cash came largely from the issuing of 6.6 million shares at $0.60 per share.

All things considered, TRTC is simply not a marijuana stock yet and many are approaching it as though it has been one since early 2014. When news comes out this summer about the company’s various applications for dispensary and grow op facilities, investors will have more solid grounds to make an informed decision. Until then, the best that could happen with TRTC is for Edible Garden to start logging more reasonable gross margins that could rein in net loss.

With the recent suspension of multiple pot sector OTC Market companies and a new SEC investor alert out, traders are understandably a bit on edge and the general excitement has subsided. TRTC is a hefty 75% down from its March spike that took place after media exposure and talk of potential pot sector success.

Tranzbyte Corp. (OTCMKTS:ERBB), another contender in the MJ race, was more fortunate yesterday and managed a 23% bounce, propelled by the optimistic tone of a new press release. ERBB bounced from a point 80% below its own March hype-driven highs, despite filing a report drearier that TRTC‘s, so traders will probably be keeping an eye out for any and all news from Terra Tech.