The demand for technology, equipment, supplies, and other products needed to cultivate cannabis is growing proportionately to the demand for cannabis itself. As the cannabis revolution spreads and more states legalize its use, future growers will seek out the most effective way of cultivating it. These are all potential customers for Surna Inc (OTCMKTS:SRNA).Surna Inc is based in Boulder, Colorado and develops innovative technologies and products that monitor, control and/or address the energy and resource intensive nature of indoor cannabis cultivation enabling companies to both improve product quality and yield while significantly reducing energy and other resource consumption. The company’s principal revenue stream is based on its main product offerings – supplying industrial technology and products to commercial indoor cannabis grow facilities.On March 8, 2017, Surna Inc. announced the completion of a $2,225,000 private placement of 13,906,250 equity units at a price of $0.16 per unit. Each unit consisted of one share of common stock and a three-year warrant exercisable at $0.26 per share. No placement agent was used in the offering.
"We believe the ability of the company to rapidly complete a private placement at a modest discount to the current market price demonstrates the confidence of our shareholders and the investment community in our organization and our business plan," said Surna CEO Trent Doucet. "Coupled with the recent elimination of 95% of our long-term debt, this financing further strengthens our balance sheet. We are now financially positioned to aggressively pursue our vision for growth and to meet the rapidly increasing market opportunities we are seeing in both the U.S. and international markets."
On February 28, 2017, Surna Inc. signed a contract with Vancouver's Sante Veritas Therapeutic to design and provide equipment for the environmental control system in its first commercial cultivation facility. Surna expects to ship and recognize revenue of $835,000 in the third quarter of 2017.
"Cannabis for medical use is legal throughout all of Canada, making the market an outstanding opportunity for continued growth," said Surna CEO Trent Doucet. "We now have five clients in Canada, and our sales team continues to see significant activity from both new market entrants as well as existing clients planning expansion."
On February 21, Surna Inc. converted $2.76 million of its 10% convertible promissory notes, consisting of approximately $2.28 million in principal and $480,000 of accrued interest, into approximately 18 million shares of newly issued common stock and cash payments of less than $200,000. As a result, since September 30, 2016, Surna has decreased its liabilities by approximately $2.22 million after obtaining a short-term loan of approximately $500,000 for working capital.
Surna’s stock price started 2017 at $.22 in the midst of a run up that started on November 23, 2016 from a low of $.11, and reached a high of $.24 on January 11, 2017. It has steadily retraced back to as low as $.135, and is currently trading at $.177. Fourth quarter financials for 2016 are yet to be reported. The Private Placement and restructuring of convertible debt will help shore up the financials. Prior to that, the company does show steady revenues, however, net profits have yet to be realized. The announced Sante Veritas contract should help change that. Current market capitalization stands at $25.92 million, on 146.2 million shares outstanding as of March 12, 2017.Surna Inc. is well positioned to serve current and future cannabis growers. The key to Surna’s success will be its innovative technology that specializes in cannabis cultivation, its excellent customer support, and its aggressive sales force to capture the business of new cannabis growers as they come online. Once it establishes itself as the “standard” in the cannabis industry, the company’s growth will inevitably follow.We will be updating our subscribers as soon as we know more. For the latest updates on SRNA, sign up below!Disclosure: We have no position in SRNA and have not been compensated for this article.
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