Terra Tech Corp. Reports Financial Results for Third Quarter 2020

| Press Release

IRVINE, CA / ACCESSWIRE / November 6, 2020 / Terra Tech Corp. (OTCQX:TRTC) (“Terra Tech” or the “Company”) today announced its financial results for the quarter ended September 30, 2020.

Mike Nahass, Chief Executive Officer of Terra Tech, commented, “Our third quarter results were impacted by the closure of our San Leandro dispensary, which was shut for the first half of July and the Oakland dispensary which was shut for the entire third quarter, following damage due to civil unrest that began in late May. Our cultivation facilities continued to sell wholesale cannabis products throughout the quarter, however the shift in revenue mix toward wholesale products continues to reduce our operating margin. Closing out this year and leading into 2021, our business will continue to focus on building out the key elements of our THC business in the California market. Terra Tech is maximizing near-term revenue streams and prioritizing the construction of our Hegenberger cultivation facility which is expected to reach completion at the end of 2020. We are working to further strengthen our balance sheet, through asset sales across the business, specifically in Nevada, in order to strengthen the Company’s cash position and streamline our resources toward our most lucrative THC projects. We’re working our way through the upheaval of recent months and have a strong vision for the future, which we are excited to pursue. With our Oakland and San Leandro dispensaries both up and running, we expect to see near-term revenue growth, followed by a ramp in 2021 as our Hegenberger cultivation and Dyer Rd retail assets contribute to sales and drive us toward profitability.”

Financial Update

  • For the quarter ended September 30, 2020, the Company generated revenues from continuing operations of approximately $3.05 million, compared to approximately $5.48 million for the quarter ended September 30, 2019, a decrease of approximately $2.42 million. The decrease was due to the combined impact of COVID-19 and civil unrest. COVID-19 has reduced customer traffic and sales volume, while the civil unrest has resulted in damage and closure of one of our dispensaries for half of the month of July and the other for the entire quarter.
  • Terra Tech’s gross profit from continuing operations for the quarter ended September 30, 2020 was approximately $1.44 million, compared to a gross profit of approximately $3.18 million for the quarter ended September 30, 2019, a decrease of approximately $1.74 million. Gross margin for the quarter ended September 30, 2020 was approximately 47.1%, compared to approximately 58.1% for the quarter ended September 30, 2019. The decrease in gross margin was mainly due to our revenue decrease, but was also impacted by higher cost of sales. The cost of sales were negatively impacted by lower customer traffic which led to suboptimal purchasing volume which in turn pushed up unit cost.
  • Selling, general and administrative expenses for the three months ended September 30, 2020 were approximately $5.59 million, compared to approximately $9.32 million for the three months ended September 30, 2019, a decrease of $3.73 million.
  • The net loss attributable to Terra Tech for the three months ending September 30, 2020 was $18.16 million, or $0.09 per basic and diluted share, compared to $8.78 million, or $0.08 per basic and diluted share, for the three months ending September 30, 2019.
  • The Company had $2.34 million in cash as of September 30, 2020, compared with $1.23 million as of December 31, 2019.
  • Stockholders’ equity for the period ending September 30, 2020 amounted to approximately $35.16 million compared to approximately $75.33 million as of December 31, 2019.

Conference Call

The Company will host a conference call on Friday, November 6, 2020 at 4:30pm ET to discuss the financial and operational results.

Dial-In Number: 1-857-232-0157
Access Code: 422095

Mike Nahass, CEO of Terra Tech Corp., will be answering shareholder questions at the end of the call. Should you have questions during or prior to the conference call please send an email to [email protected] with TRTC Question in the subject line. Mr. Nahass will answer as many questions as time will allow.

For those unable to participate in the live conference call, a replay will be available at https://www.smallcapvoice.com/trtc/. An archived version of the webcast will also be available on the investor relations section of the company’s website.

To be added to the Terra Tech email distribution list, please email [email protected] with TRTC in the subject line.

About Terra Tech

Terra Tech is a holding company with a portfolio of investments focused on cannabis agricultural assets in the THC market and the research, development and commercialization of cannabinoid-based products. Backed by innovative science and best-in-class manufacturing, the company’s mission is to deliver top-tier cannabis and cannabinoid-based products with a focus on its core cannabis business.

Cautionary Language Concerning Forward-Looking Statements

Certain statements contained in this communication regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, known as the PSLRA. These include statements regarding management’s intentions, plans, beliefs, expectations or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. Terra Tech undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise, except to the extent required by law. We use words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions of the PSLRA. Such forward-looking statements are based on our expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors.

New factors emerge from time to time and it is not possible for us to predict all such factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. These risks, as well as other risks associated with the combination, will be more fully discussed in our reports with the SEC. Additional risks and uncertainties are identified and discussed in the “Risk Factors” section of Terra Tech’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other documents filed from time to time with the SEC. Forward-looking statements included in this release are based on information available to Terra Tech as of the date of this release. Terra Tech undertakes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this release.

Contact:

Philip Carlson
KCSA Strategic Communications
[email protected]
212-896-1238

TERRA TECH CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except for shares and per-share information)

Three Months Ended Nine Months Ended
September 30, September 30,
2020 2019 2020 2019

Total revenues

$ 3,053 $ 5,477 $ 9,806 $ 12,000

Cost of goods sold

1,615 2,295 4,796 4,917

Gross profit

1,438 3,182 5,010 7,083

Selling, general and administrative expenses

5,588 9,318 20,409 26,521

Impairment of assets

9,792 171 19,909 681

(Gain) / Loss on sale of assets

(893 ) (35 ) (893 )

Loss on interest in joint venture

1,067

Loss from operations

(13,943 ) (5,414 ) (35,273 ) (20,294 )

Other income (expense):

Interest expense, net

(529 ) (1,714 ) (1,885 ) (8,262 )

Other income/loss

372 (984 ) 349 13

Total other income (expense)

(157 ) (2,698 ) (1,536 ) (8,249 )

Income (Loss) from continuing operations

(14,100 ) (8,112 ) (36,809 ) (28,543 )

Income (Loss) from discontinued operations, net of tax

(4,199 ) (811 ) (17,342 ) (2,135 )

NET INCOME (LOSS)

(18,299 ) (8,923 ) (54,151 ) (30,678 )

Less: Income (Loss) attributable to non-controlling interest from continuing operations

(138 ) (143 ) (479 ) (57 )

NET LOSS ATTRIBUTABLE TO TERRA TECH CORP.

$ (18,161 ) $ (8,780 ) $ (53,672 ) $ (30,621 )

Income / ( Loss) from continuing operations per common share attributable to Terra Tech Corp. common stockholders – basic and diluted

$ (0.07 ) $ (0.07 ) $ (0.20 ) $ (0.28 )

Net Loss per common share attributable to Terra Tech Corp. common stockholders – basic and diluted

$ (0.09 ) $ (0.08 ) $ (0.29 ) $ (0.30 )

Weighted-average number of common shares outstanding – basic and diluted

206,828,614 110,797,214 186,295,127 102,907,538

TERRA TECH CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except Shares)

September 30, December 31,
2020 2019
(Unaudited)
ASSETS

Current Assets:

Cash

$ 2,338 $ 1,226

Accounts receivable, net

351 693

Inventory

4,851 4,334

Prepaid expenses and other assets

457 675

Current assets of discontinued operations

183 2,440

Total current assets

8,180 9,368

Property, equipment and leasehold improvements, net

33,345 35,469

Intangible assets, net

8,028 14,871

Goodwill

6,171 21,471

Other assets

13,327 10,272

Investments

5,330 5,000

Assets of discontinued operations

2,981 22,799

TOTAL ASSETS

$ 77,362 $ 119,250
LIABILITIES AND STOCKHOLDERS’ EQUITY

LIABILITIES:

Current liabilities:

Accounts payable and accrued expenses

$ 10,752 $ 9,525

Short-term debt

12,855 11,021

Current liabilities of discontinued operations

8,219 7,035

Total current liabilities

31,826 27,581

Long-term liabilities:

Long-term debt, net of discounts

1,877 6,570

Long-term lease liabilities

8,448 8,902

Long-term liabilities of discontinued operations

55 869

Total long-term liabilities

10,380 16,341

Total liabilities

42,206 43,923

STOCKHOLDERS’ EQUITY:

Preferred stock, convertible series A, par value 0.001:

100 shares authorized as of September 30, 2020 and December 31, 2019; 12 shares issued and 8 shares outstanding as of September 30, 2020 and December 31, 2019

Preferred stock, convertible series B, par value 0.001:

41,000,000 Shares Authorized as of September 30, 2020 and December 31, 2019; 0 Shares Issued and Outstanding as of September 30, 2020 and December 31, 2019

Common stock, par value 0.001:

214 120

990,000,000 Shares authorized as of September 30, 2020 and December 31, 2019; 211,571,970 issued and 209,263,562 outstanding as of September 30, 2020 and 120,313,386 shares issued and 118,004,978 shares outstanding as of December 31, 2019

Additional paid-in capital

274,370 260,516

Treasury Stock (2,308,408 shares of common stock, 4 shares of Preferred Stock Convertible Series A)

(808 ) (808 )

Accumulated deficit

(243,358 ) (189,685 )

Total Terra Tech Corp. stockholders’ equity

30,418 70,143

Non-controlling interest

4,738 5,184

Total stockholders’ equity

35,156 75,327

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 77,362 $ 119,250

SOURCE: Terra Tech Corp.

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