After a few shaky days at the beginning of December, Terra Tech Corp (OTCBB:TRTC
, TRTC message board
) is now making yet another run up the charts. Four consecutive green sessions brought the ticker back to the list of the most heavily traded companies on the OTC Markets and after another 14% added yesterday, TRTC managed to climb above the $0.10 per share mark for the first time since September. More than 11 million shares changed hands during Tuesday's session which means that a lot of people are now watching the ticker and are waiting for some sort of continuous rally which has so far been somewhat chimerical.
If you take a quick look at the company's filings and press releases, you'll see that there's no shortage of catalysts for a prolonged run.
The announcements have certainly been quite optimistic. As we mentioned in our previous article, TRTC recently signed a contract with Heartland Growers according to which, they will use Heartland's greenhouses which will help reduce the expenses. They have also put their products on the shelves of several major retail chains and back in October, the management team advised us that we should expect around $3 million in annual revenues for 2013 (the sales for 2012 hovered just above $500 thousand).
The figures found in the more recent 10-Q's certainly suggest that these projections might not be far-fetched. The third quarter, for example ended with the following strengths and weaknesses:
- cash: $40 thousand
- current assets: $837 thousand
- current liabilities: $3.8 million
- quarterly revenue: $773 thousand
- quarterly net loss: $15 thousand
There are some things to keep in mind like, for example, the fact that they have burned through quite a lot of cash over the third quarter and the significant working capital deficit, but there's also been an increase in revenues both year-over-year and quarter-over-quarter.
Unfortunately, the same thing can't be said about the gross margins. According to the latest 10-Q, a decrease in the selling prices of certain products means that despite the significant revenues, the gross profit amounts to a little over $3,500. The management team will certainly need to address this problem if they want to turn a profit and they will also need to think about several other issues.
The company has been in a difficult financial position for quite some time now which means that they had to fund their operations through equity financing. The number of shares issued between June 30 and October 28 amount to around 37 million. 21 million of them were issued in October at $0.06 per share which, as you can see, presents quite a discount at the current levels.
With that in mind, the recent alerts from the paid pumpers don't seem all that surprising. On Time Picks and OTC Magic collectively received at least $18 thousand and have been sending some emails over the last couple of days. As you probably know, this isn't the first time TRTC is getting the promotional treatment and if you take a look at some of our previous articles, you'll see that TRTC doesn't perform all that well under the pressure.
That's why, although the company seems to be making good progress at the moment, the stock remains risky. Considering all the dangers and doing a lot of due diligence is absolutely crucial before putting any money on the line.