Terra Tech Corp (OTCMKTS:TRTCD) Is In Expansion Mode

Terra Tech Corp (OTCMKTS:TRTCD) has had a long-term strategy to become a leading player in any market it operates in. Recently, it released some of its business updates which revealed that it has gone some way in accomplishing those objectives.Take a look at its performance in the last year: TRTCD Daily ChartCompany OverviewTerra Tech Corp was established in July 2008 and its head office is located in Irvine California. The firm specializes in cultivating as well as the provision of medical cannabis and agricultural products. The firm carries out its operations through the floral products, produce and herbs as well as the Cannabis Cultivation, Dispensary, and Production units. The different units include the herbs and leafy greens which are grown through the use of Dutch hydroponic framing methods.For more information on the company, visit our previous post here.Recent DevelopmentsVery recently, the firm provided a public business update on for the year 2018. This update was scheduled to be released on the 15^th of March 2016 the details of which were made available to the public.Some of the issues to be addressed included the firm’s securing of a $40 million investment which is scheduled to be made in eight equal tranches of for a period of two years.The firm’s intention to direct its capital expenditure towards the building of its extraction, cultivation and retail infrastructure located in Nevada, New Jersey California. The fresh capital has put the firm in a position to take advantage of merger and acquisition opportunities and greatly enhance its sales and marketing techniques. Besides this, a 1 for 15 reverse share split was set up as far back as March 13, 2018, to position the firm for a possible uplisting.Terra Tech CEO, Derek Peterson, explained that the management has continuously made progress in fulfilling its long-term objective to ensure that Terra Tech emerges as a leading player in the very lucrative and highly capitalized legal cannabis space.Already, the firm’s wholesale high grade 'IVXX™' oils and flowers and its Blüm retail dispensaries and have come out market leaders in Nevada and California, solidifying its standing as a superior brand while boosting revenue generated in the last few quarters. Success in the capital raise will enable Terra Tech effectively scale through the coming phases of its development roadmap as management scales the business to continue to deliver to its already huge and continuously expanding the customer base. The proceeds are to be utilized in the development of the firm’s retail infrastructure and cannabis cultivation in California and Nevada, as well as to finish the construction of a large new pack house to be located in New Jersey which will operate as the company’s Edible Garden subsidiary and put Terratech in a position to enter into the cannabis space in New Jersey.This is to be done in anticipation of the legalization of Cannabis in New Jersey within the year. It will also put the Company to take advantage of M&A opportunities as they arise. The expansion plan set up by management is designed to create shareholder value by further elevating Terra Tech within the cannabis space and ensuring its position as national leaders in both the wholesale and retail markets. Along with this, the firm plans to carry out a reverse split in line with the capital raise which was planned in order to increase the share price of its stock in order to meet the minimum bid price condition for being listed on a major stock exchange.Financial PerformanceIn 2016, the firm recorded revenues of $25.32 million, a whopping increase of 153% from the revenues of the last year. Remarkably, this is the highest revenue increase in a period which has seen a continued trend of increasing revenues for the last few years. With the fresh capital injection, it is anticipated that in years to come, the firm will continue to increase and generate revenues from the sale of its products.However, the firm recorded a 154% increase in its cost of sales, a far larger increase than previous years and slightly above its revenue increase. A pointer that the firm may not have introduced adequate efficiency to its sales operations given that the massive scale-up occurred within a year.In line with the above line items, operating expenses jumped by 110%, With no major additional income while there were increases in sales and administrative costs and other costs, operating loss for the year was recorded at $18.1 million, more than double of the previous year’s $8.8 million. Net loss for the year was $26.9million, the only additional expense being interest costs.The statement of financial position reveals that the firm is not too highly geared. On its books, its total debt is worth an estimated $23.5 million, leading to debt to equity ratio of 0.44. It also has a liquidity ratio of 0.57, which may be considered acceptable for its industry.ConclusionTRTCD is aggressively pursuing its expansion plan and has met a lot of success already. It is very likely that the firm will keep increasing in size and value for a while yet.Disclosure: We have no position in TRTCD and have not been compensated for this article.