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You would think diluting 1 billion shares strategically and bringing 60 million in revenue....easy estimate would be $260 million dollars.....lets not forget the shady expenses and rent that filter back to the insiders.lol
You figured that would be enough to pay for the tiny footprint TRTC has in NV and CA?
Derek Peterson is POS IMHO
The IVXX brand is no brand...its joke. for years they tried to give it away to dispensaries hoping for traction and return customers.
It has gotten no branding outside TRTC's dispensaries .....SO no big company will ever ever over pay for a failing pos brand, when they can create something better themselves and market it much much better to a much wider audience.
TRTC has nothing...and i mean nothing any company wants lol Its a tiny under performing ....company that invested into dispensaries....which is not the future... as you can see year to year sales in nevada have been weak so far. They are not retaining customers
The future is growing and supplying on a huge scale...like Canopy growth...and have a global relationships, and hemp relationships, and pharm relationships....and online retail sales
Stop..lol Your as worse as Mags..... Have you seen the current PPS of $1.87 and the pathetic 2018 1st quarter numbers of 8.5 in rev and 10 million in expenses ? have you read about the NJ lawsuit?
Things are not going so well my friend
Magnum will you stop lol Yea like they are going to do another reverse split in 60 days lol
Can you try and be alittle non transparent of your position lol
That is one of your worst posts ever lol imho
Magnum working extra hard today ...even pulling up the old dilution clipping lol
Good for you mags....work it lol
Thats too funny...i used to be foolish and think oh great time to buy cheaper shares ...years ago.
Now 3 years later TRTC is still tanking and diluting and the Price per share is down almost 60% from the reverse split value of >$5 and i lost shares to the 15 to 1 reverse split.
Talk about share holders getting screwed, while Derek Peterson buys a $3.5 beach house in California.
And i thought after the reverse split this company was going to fly straight lol im a fool..
Look at all the criminals he has working for him...lol
This is clearly dilution all over agian....this guy does not let up
$40 million does not come free.....
THIS IS WHY YOU SHOULD MAYBE WAIT, UNTIL THERE IS SOME STABILITY
TRTC Historical Summary
- It has been uncovered lawsuits against TRTC from alleged unpaid suppliers.
- Toxic Convertible Debt provides significant potential for shareholder dilution.
- The company paid $51.5m for a dispensary in a related-party transaction; first dispensary license was
received via bribery.
- It is of opinion on the financial controls, and financials show a declining business that burns cash.
- All of the management team has past personal bankruptcies or a shareholder wipeout. CEO and
Treasurer filed personal bankruptcy. CEO was allegedly involved in Mazzuto Scam and paid a
settlement.
The legalization of Marijuana not only provides a huge opportunity for real entrepreneurs but it also provides one for people with a history of penny stock promotion and bankruptcies. Terra Tech (OTCQX:TRTC) (OTCQX:TRTCD) IMHO TRTC is the latter.
The last two businesses that Terra Tech's CEO, Derek Peterson, has been involved in resulted in people being convicted for crimes. One was convicted for embezzlement and in the other a union official was convicted for taking bribes from his co-founder.
It is equally concerning -> the abuses of governance and self-enrichment at TRTC. Self-enrichment starts with TRTC's foundational $51.5 million related-party purchase of one single dispensary, Black Oak, from its CEO (Source - pg 25/42 -10-K). Issues in the management suite don't stop at the CEO.
The CFO appears to be a crash test pilot for driving micro cap stocks to zero, having been involved in at least three total shareholder wipeouts, the last time holding the title of CFO & CEO. The current COO (and former Treasurer of TRTC) filed for personal bankruptcy due to unpaid gambling debts and allegedly lied to casinos to obtain credit, which makes him an unusual choice for COO (Central District of CA-Case No. 8:09-bk 14465-TA).
The fact that TRTC is a paid stock promotion (search "compensation"), a reverse merger (10-K pg 4), and that management team has been selling lots of stock is just the tip of the iceberg.
TRTC's financials show a company bleeding cash. It will be presented that recently filed lawsuits that TRTC's businesses allegedly are unable to pay suppliers on time. It is believed these lawsuits may trigger a default on TRTC's recently issued toxic convertible bonds.
Even if TRTC succeed in dismissing these suits, It is believed the end may still be near. TRTC's three core businesses are all showing signs of declining QoQ.
Provided is a detailed explanation of: Dispensary & Cultivation business (impressively it even loses lots of money selling marijuana when the industry is booming); Edible Garden (sounds marijuana related, but it really sells fresh basil and lettuce at a net loss); and IVXX (the company's self-created marijuana brand that went from 200 distribution points in 2015 to 6 today).
Caution to investors that the financial picture could be worse than the numbers that have been analyzed in the company's public filings. TRTC's auditor, Macias Gini & O'Connell LLP (whose only other public company clients have a combined market cap of <$3m), has rendered an adverse opinion on the company's financial controls (see auditor section below).
Before I discuss executives selling shares at an alarming rate and a long history of past financial misdeeds by management, including the alleged diversion of deals away from the public company and to its private investment vehicles, we will focus on TRTC's immediate liquidity concerns.
TRTC finds itself in a weak financial position (with only $4.5m of cash on hand (pg 3 10-Q) at the end of Q1 and a burn rate of $6.7m during Q1 (pg 4). In early 2018, TRTC issued Convertible Debt twice; the terms of the convertibles were highly punitive for equity holders. They allow the holders to short stock in advance and convert into equity at a 22% to 24% discount to the lowest two-day VWAPs in the prior 13 days (source).
In default, the discount would increase to 41%. At the current price in a no-default scenario, shareholders can expect dilution of ~36%. Dilution increases as the share price drops. These types of debt instruments are often referred to as "death spiral" and make convertible holders somewhat indifferent to a falling stock price.
These structures not only serve to flag the company's desperate capital position (having only a little over two months of cash in the bank at present burn rate) but also increase the level of probability that the equity ultimately plummets towards zero while the convertible holders profit.
Further lawsuits have been uncovered that allege internal fraud and preferential dealing have occurred at Terra Tech. The suits allege members of management conspired to direct deals to themselves as opposed to the public company and that Terra Tech employees were complicit.
If equity holders are clinging to the hope that the management team might be able to turn things around, we would suggest they pay attention to the recent executive departure. On April 20th, 2018, Ken VandeVrede, the Chief Agricultural Officer, resigned. He was the only member of the management team and board that we have not found to have been declared bankrupt or previously involved in stock promotion. Unlike most directors that bow out quietly, he resigned due to disputes with the company, and now Terra Tech is accusing him of committing fraud.
Related Party Dealings & Bribery
If you had $51.5 million and wanted to invest in Oakland in 2016, you could do two very different investments. You could either pay the combined annual salary of Steph Curry, Klay Thompson, and Draymond Green for a season (and still have $7.4 million left over) or you buy a single marijuana dispensary 100 meters from a homeless encampment that was 12% owned by TRTC's CEO. TRTC chose the latter.
In 2016, TRTC purchased a single marijuana dispensary from Black Oak, an entity 12% owned by its CEO. (Source - pg 42/25 -10-K). Our investigators visited this dispensary. Inside it is no better or worse than any other dispensary in the Bay Area, however, it is located in a bad neighborhood in Oakland.
Another twist in this story is that Derek Peterson's former business partner & co-founder of Black Oak, Martin Kaufman, got the Black Oak license (now Blum) via paying bribes to cannabis union leader Dan Rush. (Summary story here; Dan Rush criminal complaint here). According to the complaint (which Derek was also named in, Paragraph 17), Kaufman avoided prosecution by agreeing to cooperate with the US Attorney Office in Dan Rush's case regarding the bribery. Dan Rush was convicted of receiving bribes from Kaufman and sentenced to 3 years in prison (Note - Kaufman and Peterson were never charged with a crime in this case). Paying bribes to union officials to get dispensary licenses is definitely not a sustainable competitive advantage.
Investigators drove buy and visited the Blum Oak dispensary to see what TRTC received for stock valued at $51.5m. What they found was a dispensary that is located within 3 blocks of two homeless encampments in Oakland, CA, a city that currently ranked the third most dangerous city America by Forbes.
This "high" price paid to a related party ($51.5 million) also appears more egregious when compared to TRTC's only other dispensary purchase. A $7 million deal that TRTC paid for its Santa Ana location in September 2017.
New Lawsuits - Terra Tech Potentially in Default on Convertible Debt
It has been discovered two recent lawsuits which allege TRTC has failed to pay its vendors in a timely manner which if true is a sign of significant financial distress.
It seems TRTC's CEO also has a history of not paying debts.
-Another of his previous businesses, WeGrow Oakland, was also sued for not paying its bills. WeGrow went bankrupt and another of Derek's recent partner's, Dhar Mann, was charged with 13 felony charges for stealing Oakland city funds. He was convicted and sentenced to 5 years probation. WeGrow's problems seemed to have started simply as an inability to pay employees and suppliers. There are multiple reports of cashers at the dispensary not being paid on time (when paid at all) and other suppliers that were not paid in full - article.
Schawk Inc. v. Terra Tech Case
Schawk USA Inc. is suing Terra Tech (CA Case 2:18-cv-02571-FMO-AGR) for $179,005 + monthly interest and late fees. Terra Tech has been accused of failing to pay Schawk for advertising and point of sale marketing services that it has provided. This case was filed on March 29, 2018. TRTC filled a response on June 1, 2018, denying these claims and still refusing payment to Schawk Inc.
Schawk Inc.'s lawsuit also states it has all the agreements in writing as well as the invoices that were accepted by Terra Tech.
Whitetown Realty v. Edible Garden
Whitetown Realty is also suing Edible Garden (a Terra Tech entity) for not paying rent on time and has declared it in default of its lease. (NJ Case: MRS L 000796-18 - pg 45). It is suing Terra Tech for $2,247,082.98, and this lawsuit and breach of the lease agreement was filed on April 10, 2018.
Terra Tech's response to the lawsuit filed April 11, 2018, claims it is current on its rent and cannot legally be evicted. TRTC claims that the payments might have been late but are not its fault since the responsibility for paying belonged to Steve VandeVrede, a Terra Tech employee and member of the Vande Vrede family who TRTC bought Edible Garden from. Terra Tech is currently accusing Steve, Ken, and the rest of the Vande Vrede family of fraud (CA Central District - Case 8:18-cv-00602-JVS-JDE)
Should either of these cases go against TRTC, it may accelerate the share price decline. Any court judgment >$50,000 against TRTC triggers a default on TRTC's outstanding convertible notes which can then be converted into stock at a 41% discount and sold immediately (Pg S-32 & Note 4).
The Management Team: A History of Bankruptcies & Shareholder Wipeouts:
Below is a full list of the management team and board of directors of Terra Tech and select highlights from their previous involvements in public companies and personal financial histories.
Terra Tech's CEO is Derek Peterson. However, he didn't always go by that name.
-He used to be known as Derek Oppedisano. We have asked the company multiple times but have yet to receive a response about why he changed his name. Fortunately, when you google "Derek Peterson" you find a lot not to like for a company CEO. Derek Peterson was fired by Morgan Stanley for failing to disclose to his employer that he was engaging in an outside business. (see Finra Track Record)
Derek Peterson and his wife, Amy Almsteier (a former TRTC board member and major shareholder), were accused of accepting illegally issued shares of IEAM in a pump and dump stock promotion known as the Mazzuto Scheme (more on that in Appendix A). In the settlement they agreed to pay a financial settlement of an undisclosed amount to IEAM shareholders, after its stock went to $0.00.
(Source - Pg 15 - NJ Case No. 09-11475 BLS)
It seems Derek's financial history is checkered. He filed for personal bankruptcy in March of 2012 (CA case 8:12-bk-13957-ES). The filings suggest a lack of financial prudence. With his house as his only asset (secured by an unpaid Chase mortgage for $800,000) Derek managed to rack up over $50,000 of credit card debt and $1.75 million of debts to Morgan Stanley (pg 13-14 of bankruptcy filings).
It seems Michael James, who is currently the CFO of Terra Tech, has, to put it kindly, had a pretty poor track record of involvement with public companies. He was involved in three previous companies that were listed and all three resulted in total shareholder wipeouts. Most recently he was both the CFO (started July 2010) and CEO (June 2012) of Inergetics, Inc. (OTC:NRTI) (source - NRTI 10-k pg 22). NRTI was a previous nutrition related penny stock wipeout. Investors should be concerned that NRTI (like TRTC) issued "death spiral" convertible debt (see article on MJ stocks to avoid). The stock went from a peak of $2.10 during his tenure to trading for $0.02 (-99%) when he moved over to become full-time CFO of Terra Tech. Michael James was also Chairman of Guided Therapeutics (OTCQB:GTHP), another 99.9% penny stock wipeout trading <$0.01 (chart). He was also on the board of Nestor, Inc. from 2006 and CEO from Jan 2009. It was a 100% wipeout going to $0.00 and even went so far as having the SEC revoke its registration as a listed company in 2014 (SEC Statement).
The COO, Michael Nahass, filed for his own personal bankruptcy in 2009 listing 0 assets and 1 to 10 million of debts primarily to casinos for unpaid gambling debts (Central District of California, Case No. 8:09-bk 14465-TA) (pg 45 of 10-k). His debts include owing the Bellagio ($457,500 - Doc 24), Mandalay Bay ($347,500 - Doc 24), Caesar's ($705,000 - Doc 19), Discover Financial ($12,375 - Doc 20), and Chase Bank ($60,651 - Doc 21). The Bellagio alleges Michael Nahass was able to run up these large gambling debts by deceiving the casino and showing it that he had sufficient assets to cover the credit it extended to him (Source - Paragraph 7 Case 8:09-ap-01606-TA). From January 2012 to July 2015, Mr. Nahass served as Terra Tech's Treasurer, a very interesting position considering his gambling habit and history of accusations of deceiving casinos with false accounts.
Newest Board Member Alan Gladstone is also not a stranger to bankruptcy court. He was the former CEO of Anna's Linens and managed to take that company into ch. 11 bankruptcy not once but twice (link, bankruptcy 2015, Wikipedia).
Steven J. Ross - Adds to the list of TRTC directors who has had a front row seat to a corporate bankruptcy. Mr. Ross is an Ex VP at Longhai Steel (LHAI), he joined the company in 2012. Three years before the company had its reverse merger IPO (pg 2 of S-1) by Ladenburg in the peak of the China Hustle era. Steven Ross joined in 2012 (10-K pg 32), and the company had its registration revoked by the SEC in 2015. Shareholders lost 100% of their investment. (link to SEC revoking registration).
Canary in the coalmine - Chief Agriculture Officer & Major Shareholder Resigns
Only one current TRTC board member or executive hasn't been linked to previous bankruptcies or shareholder wipeouts that we could find, and that was Ken VandeVrede. Unfortunately for investors in TRTC, he no longer appears to be guarding the hen house. He resigned from the Board of Directors on April 20, 2018, "because of a disagreement relating to the operations, policies, and practices of the company."
Lack of Cash
TRTC's financial health is in a critical state. Terra Tech's recent 10-Q shows it having $4.5 million of cash on hand (pg 3 10-Q) but loss from operations is currently running $6.7m a quarter (pg 4). TRTC was forced to issue $10 million of toxic convertible debt in Q1 in order to pay its bills and issued an additional $5 million on June 12th (debt filing)
TRTC's "Death Spiral" Converts
Likely due to its desperate financial position and lack of alternative financing, Terra Tech has issued convertible debt. This type of toxic convertible debt is sometimes referred to as "Death Spiral" financing. Investors sometimes refer to these as "Death Spiral" converts because the deals are structured such that the debt holder is always able to convert and sell at a discount to the current trading price. This ensures ongoing pressure and further dilution on the stock as it trades lower. In the case of TRTC, the debt holders are able to convert at a 24% & 22% discount when factoring in their interest rate. TRTC has issued two of these highly dilutive debt deals already in Q1-2018 and already issued more in Q2.
TRTC shareholders will face assuming the holders of the existing $45m of converts exercise. At today's price, investors will likely be diluted by 36% to 47% when the convertible holders exercise. This doesn't require shareholder approval. Debt holders immediately have the right to convert to common and sell. If TRTC is deemed to have defaulted, then the conversion discount increases to 41% which is a looming possibility should it lose one of the two lawsuits filed by the vendors that are suing it. The dilution becomes significantly more punitive as the share price decreases.
A 2015 Bloomberg article describes the shady death spiral convert business. As the article mentions, the only real risk to the convertible financier is if they are not able to convert shares to common before the company goes bankrupt. Fortunately for Terra Tech financiers their convertible deal contains provisions that allow them to short the TRTC stock before converting, as long as they aren't Net Short. The deals also contain provisions that allow convertible owners to convert to common shares at a discount immediately after providing financing to the company.
Key Terms of Terra Tech's Two Recent Death Spiral Convertible Debt Deals:
Deal 1: $5 million of Convertible Debt that is convertible for 85% of the lowest daily VWAP in the 15 prior days and a 12% interest rate.
Deal 2: $40 million of Convertible Debt done in $5 million tranches that is always convertible for 87% of the average of the 2 lowest VWAPs in the 13 days prior to conversion and includes a 7.5% interest rate. The first $5 million was sold March 12, 2018, and an additional $5 million was sold on June 12, 2018.
Debt Immediately Convertible at a discount - The debt is immediately convertible to common stock at their discounted rate. (Note 4)
Default - It gets worse! If Terra Tech is ever in default, the interest rate in both Deal 1 & Deal 2 increases to 18% per year and the discount rate increases to 30% below avg of 3 lowest VWAPs in the last 20 trading days (link - page S-32). Thus, $1 million of convertible debt would convert to a guaranteed $1.68 million of dilution for common stock holders if it's held for 1 year.
Default can occur for many reasons including:
Any court judgment against the company >$50,000. TRTC currently has two court cases pending that would send it into default.
Another cause for default is if TRTC delays in issuing shares to its convert holders. "In default if they don't deliver shares to the convert holder promptly (prior to the 3rd trading day after conversion day)." So basically it would go into default if it tries to stop the death spiral.
Constant Selling Pressure - In Deal 2 Terra Tech secured $40 million worth of interest but the lender is going to participate in $5 million increments. This will likely result in constant selling pressure on TRTC stock as it continuously converts and sells its stock from the new deal.
How similar toxic debt spirals played out
Terra Tech's CFO, Michael James, issued toxic convertible debt at his last company, Inergetics Inc. in August of 2014. (source - NRTI S-1 pg 10). Less than 1 year later Inergetics stock had declined by over 99% and was trading for <$0.01
Auditor Issues - Adverse Opinion on Financial Controls
The company's main auditor since 2016, Macias Gini & O'Connell LLP, wrote that it has an ADVERSE OPINION (see below documents) for Terra Tech's internal financial controls. Receiving an adverse opinion is almost unheard of! There are 4 types of auditor opinion, an adverse opinion is the worst.
"An Adverse Opinion is a professional opinion made by an auditor indicating that a company's financial statements are misrepresented, misstated and do not accurately reflect its financial performance and health."
This pours cold water on the bull case that there is an imminent uplisting to the NASDAQ. Nasdaq does not accept companies with adverse auditor opinions, non-independent board of directors, and poor accounting controls.
This lack of accounting controls could be partially explained by TRTC's Director of Corporate Operations having previously been a bartender for the 3 years prior. Alternatively it might be because the CFO doesn't have much support from TRTC's Staff Accountant who was a Barista at Starbucks up until the time they joined TRTC.
The auditor identified flaws:
Risk Assessment
Insufficient personnel to adequately exercise accounting judgment
Lack of majority of independent board members
Lack of controls to identify sources of material misstatements or potential accounting errors
Ineffective IT controls for financial spreadsheets
Strangely, TRTC also hired a second auditor on March 16, 2018, Benjamin & Young, but only had it audit the year ended 2015. We have contacted TRTC management with an extensive list of questions including why it has hired a second auditor but it has not yet replied.
Lawsuits against TRTC employees:
Another recent lawsuit supports our opinion that Terra Tech is mismanaged and poorly run.
Terra Tech v. Vande Vrede family (which includes TRTC employees & board members) has multiple accusations of fraud against its own employees and major shareholders. (Case 8:18-cv-00602-JVS-JDE - US District Court - Central District CA)
Accusations include:
Diverting multiple marijuana opportunities away from Terra Tech and to its own Vande Vrede investments. Some that Terra Tech was negotiating and others that Terra Tech never saw. This shows the complete incompetence of TRTC management as it lost at least 7 opportunities to its own employees.
Having Terra Tech employees produce PowerPoint presentations for the Vande Vrede family personal investment deals.
Not working hard (accused of working less than 30 hours a week).
On the recent conference call, TRTC management mentioned it wasn't that focused on M&A opportunities. However, from the lawsuit it becomes very clear that it has been interested in M&A opportunities, just not ones that benefit the public company.
Opportunities have been diverted away from TRTC Shareholders
The lawsuit mentions 5 different opportunities that Terra Tech employees diverted to their own family office rather than the company: Cultivar, Chill Waze, Summed Growers, CBD Water, and Great Meadows.
Management should have been aware of this since Terra Tech was in active negotiations with one of the diverted opportunities and the Vande Vredes are being accused of even using TRTC employees to produce PowerPoints for their pitches to divert opportunities.
Stock Promotion
Terra Tech has actively engaged in paid stock promotion throughout the company's history. Its current claim to fame is being the largest client by market cap of "Small Cap Voice" - see the disclaimer regarding the paid stock promotion. Other past paid stock promotions by Terra Tech can be seen at hotstocked.com
Factors like the Toxic Debt financing and Paid Stock Promotions are important for marijuana investors to use in determining which companies are more likely to have real promise versus which ones are likely using the Marijuana legalization hype to misappropriate shareholders' money.
Industry sources like "New Cannabis Ventures" run by Alan Brochstein warn their own readers to watch out for companies that have these two telltale signs of a bad investment. Alan has recently recommended buying TRTC so we assume that he is unaware of both the recent toxic debt issues and the long history of paying stock promoters.
Valuation of Business Lines
Even though TRTC's financial controls are deemed unreliable by its own auditor, we analyze each of TRTC's business lines, all of which have been unable to generate profits. TRTC has accumulated a shareholder deficit of $115m (pg 3 of 10-Q). The cash burn has continued and in 2017 alone TRTC's operating activities burnt through $15.9 million. (pg 32).
Blum - Dispensary & GrowOps
Terra Tech currently owns & operates 6 dispensaries (2 in California and 4 in Nevada) with plans to open 1 more. Cumulatively this business line has burned through $13.1m of cash in the last two years. QoQ Growth for the business has gone NEGATIVE too, declining 22% in the last quarter.
Investors should be concerned that this division of the business was unable to make money during a period that it operated with little legal competition as recreational legalization has proven to be a disaster for existing players in markets such as Washington. Black Oak also only received one of the initial medical marijuana licenses in Oakland via paying bribes and has had difficulty securing additional recreational licenses.
With marijuana now recreationally legal, the consumer experience has become increasingly important. This is likely bad news for Blum. TRTC's pricing for product doesn't compare favorably with the competition. The Santa Ana Blum location charges $70 for 1/8 of top shelf LA Kush. This compares to $55 at Med Men whose Santa Ana location is both more convenient to the highway and is less than 1 mile away from Blum. Our own researcher paid $80 (with tax) for 1/8 from the Blum Oak location. This compares too much lower costs on Eaze.com which currently range from $39 to $49 for a premium 1/8 and it is significantly more convenient as they do home delivery. A more complete section on customer reviews of locations is in Appendix B, but those reviews consistently call out complaints of Blum being "Overpriced as Hell" & customers that "Feel Ripped off."
All of the above factors are already starting to impact TRTC's financials. Legalization in California occurred at the beginning of 2018. Since then, TRTC's revenue has declined on a quarter over quarter (QoQ) basis (-22% in Q1-2018). Management highlights YoY growth on its call, but that neglects the major fact that it purchased Blum-Santa Ana in Sept. 2017. Unfortunately, SG&A is increasing as the stubbornly high cost basis has continued to balloon so operating losses have increased 34% QoQ.
Seemingly unsatisfied with a sub-scale dispensary business, TRTC has made the decision move into growing. We believe this is ill-timed. Prices for flower have continued to crater. According to CannabisBenchmarks.com, prices that growers are receiving on the open market sunk to historic lows in June 2018. That is after prices had already declined by ~30% over the previous 24 months
Edible Garden Business - Not Marijuana related - TRTC sells basil, butterhead lettuce and other local produce.
There seems to be trouble trying to ascribe any value on the Edible Garden business. Edible Garden has consistently lost money and currently is embroiled in a lawsuit for violating its lease terms that would result in it being evicted from its facility. The core business is distribution of vegetables to New Jersey grocery stores. Revenues had a massive 52% YoY decline from 2016 to 2017 from $12m to $5.7m and losses have almost doubled. The Edible Garden Division is currently being sued by its landlord, Whitetown Realty, which has alleged it hasn't been paying its rent on time, a claim that has not been disputed by TRTC.
Even before Edible Garden ran into trouble with its landlord, its financials were in deep trouble. It sells low-margin vegetables to New Jersey retailers at a significant net loss
Source (2017 10-K pg F-48, 49 & 2015 10-K pg F-24, 25)
IVXX Business Line - IVXX is Terra Tech's self-developed line of cannabis waxes, shatters, oil, and vape pens. In 2015, Terra Tech claims that it was for sale in over 200 stores/dispensaries (2015 10-K pg 5). We have found 0 dispensaries that currently sell IVXX products outside of Terra Tech's self-owned Blum Dispensaries. In fact, IVXX's own store locator doesn't work. The only 6 listed dispensaries on its website DO NOT SELL IVXX product and 4 of them are actually closed.
Thus, we can only determine that IVXX has been a complete failure of a business line and the brand is currently worth $0.00 as it is not distributed to any other retailers. We find it impossible to believe that consumers would choose to buy IVXX branded product like a vape pen over a Pax one or its pre-rolled over established brands like Island.
Branded Marijuana has become a very competitive business and it is clear by the complete lack of distribution that Terra Tech's IVXX brand is worthless.
Insider Sales
Insider sales at a company are a great indicator that a company is overvalued. Terra Tech's management team has consistently been selling shares selling a total of 21,982,726 million shares back into the market on 83 occasions in just the last 3 years while making 0 open market purchases at the time this was written. It was even willing to sell at prices as low as $0.13 (reverse split adjusted that is $1.91). Furthermore, all those shares sold were either awarded for free via generous stock grants (like the new board member who received a 1m share grant) or via M&A transactions like the related party purchase of Black Oak.
Conclusion
We recommend that investors follow the lead from the Terra Tech Insiders and they sell stock in TRTC. The only risk to the upside we see is euphoria around marijuana stocks, but we believe this business is fundamentally set to burn cash and dilute shareholders until it goes to $0.00. If you are long other marijuana stocks, this provides a great hedge as there is 1.7 million shares of borrow as of 6-28 at the relatively low borrow rate of -11%.
In conclusion and or summary:
-Suppliers and landlords are suing the company for not paying its debts.
-Toxic convertible debt that will cause a Death Spiral for the Common Stock.
-Management team involvement in both past pump and dumps and received its first dispensary license via bribery.
-Management team has a history of bankruptcies (both personal and with companies they have run).
-Resignation of the only board member and management team member not connected to past bankruptcies or stock promotions.
-Fundamentally disadvantaged dispensary business (worse pricing, locations, and customer reviews) in an increasingly competitive market.
-Auditors gave the financial controls an adverse ruling.
-No chance of a near-term Nasdaq uplisting.
-Insider selling.
-Reverse merger that is also a paid stock promotion.
TRTC seems to be in a very unique and dire position due to the fact that it has recently issued Toxic Convertible Debt and also has been not paying its suppliers. Beyond all the bribery, penny stock wipeouts, and bankruptcies both of these things mean that the company could be in an extreme state of distress. The convertible debt will continue to be a negative catalyst since there is a motivated seller of the stock all the way to $0.01. In fact, the lower the stock price goes, the more shares will be issued to the convert holders and the larger dilution will be.
Invest at your own risk!
WHY IS THE CEO HIDING HIS HEAD IN THE SAND LIKE A COWARD? ADDRESS THIS HUGE LOSS POST REVERSE SPLIT. ITS JULY 2018 NOW
AC JUST ADMIT THIS COMPANY IS TANKING HARD POST REVERSE SPLIT. DID YOU EVER THINK THE PPS WOULD DROP TO THE $1 RANGE AFTER CLEANING UP THE NUMBERS AND CA AND NV HAVE GONE RECREATIONAL?
THIS CEO SELLS 1 BILLION SHARES COLLECTS 60 MILLION IN REVENUE AND THEN DOES A REVERSE SPLIT FOR NO OTHER REASON THAN TO CONTINUE TO DILUTE SHAREHOLDER VALUE.
SO THERE WAS NO MERGER OR UP LIST......
SO BACK TO THE POINT...HE DOES THE REVERSE SPLIT AND IMMEDIATELY TAKES ON $40 MILLION IN TOXIC FINS.....THAT PUT US IN THIS SITUATION OF THE PPS TANKING INTO PRE REVERSE SPLIT VALUE OF .13 CENTS
ADMIT THIS IS SPIRALING DOWN HILL
WHAT HAPPENS WHEN THIS POS DEREK PETERSON DOES HIS SECOND ROUND OF $40 MILLION IN TOXIC FINS COME JANUARY
Wow the PPS is now in $1 dollar range. Dilution dilution all over again..as if selling 1 billion share wasnt enough for this tiny company.
Everyone yelled and cried there would be no reverse split ever...then they cried you do not lose money with a reverse split...your at even value
Well TRTC did a 15 to 1 reverse split that stole our shares, and the price per share the day of the reverse split was >$5 ---> so now we had share stolen and our value has dropped almost 60%
THINK ABOUT THAT FOR A SECOND ...OUR SHAREHOLDER VALUE DROPPED ALMOST 60%
YOU WONDER WHY PEOPLE ARE ANGRY.....
DEREK PETERSON YOU SHOULD BE IN JAIL...
I agree this is good news, sooooo why is the PPPS tanking? Hmmmm dilution dilution dilution
This will never rise like you expect until the ceo is done spending your money and reverse splits to consolidate the numbers.
You can grow i million kg of MJ, but selling it is whole another beast...and with the competition in Canada its going to cause a price war
But would the pps pop? IDK anymore...there have been alot big news coming out and TRTC just laid eggs.
Stuff like new dispensary, CA and NV going recreational, Trump supporting states rights, Hemp bill passed, NJ about to go rec live ect ect.
TRTC stock just kept dropping....and dropping
SO what makes you so confident any of those things are going to take the pps at least even to the day of the reverse split or as your crew says "to the moon"
I just do not know anymore .....
Maybe trying to get on the Canadian exchange lol Hell they will give TRTC a billion dollar market cap lol
joking
This POS company and greedy criminal of a ceo is cashing in $40 million dollars
the current pps is .13 pre reverse split value....... july 2018 and pps is .13 pre reverse split value
What a successful company....best MJ in the US my arse
OMG its a bait and switch....wow he bought 10,000 shares lol Thats nothing lol
Its one of his tricks to keep suckers believing that he is in it just like you ...and he can make that point for only a few thousand dollars, meanwhile he is in the process of cashing in $40 million buck ...lol
Hence the current dilution lol and pps heading into $1 range
Man oh man lol
Who cares lol do you see the PPS moving up from the news? No!
Because these dispensaries are a bust. They are not generating enough revenue for this company to grow, and no one outside of this company wants to order IVXX lol
Thank god he didn't pay $51 million dollars for this one and not own the land or building lol
With All the dispensaries currently open, IVXX branding, and Edible Gardens.....
All while California and Nevada are recreational legal..--->.during the Euphoric honeymoon phase of MJ
This POS company only PRODUCED A LOUSY $8.5 MILLION IN REVENUE AND $10 MILLION IN EXPENSES!!!!!! I IN THE 1ST QUARTER OF 2018 !!!!
Figures Derek Peterson hides and puts his head in sand after the bait and switch of one of his guys buying shares to give a impression "we are all in like you" and then diluting the hell out of the stock.
Can you guys believe The CEO of TRTC is such a coward....
Just think how may people had their money stolen in the last week by Derek Peterson.
They figured hey ill buy some shares post the 15 to 1 reverse split price of >$5
They prob bought at like $2.8 and felt really good about it..... until Derek Peterson ramped up the insider enrichment scheme all over again.
He could not let the shareholders gain anything before he takes his lions share.
He had to take $40 million dollars in toxic financing after the split, as if the 1 billion shares he sold prior to the split was not enough.
That POS is probably reading these posts laughing all the way to the bank, or his 3.5 million beach house, or a private jet.
Can't waitt o hear the BS excuses on the next conference call..lol
IMHO this is why i think TRTC is criminal
TRTC Historical Summary
- It has been uncovered lawsuits against TRTC from alleged unpaid suppliers.
- Toxic Convertible Debt provides significant potential for shareholder dilution.
- The company paid $51.5m for a dispensary in a related-party transaction; first dispensary license was
received via bribery.
- It is of opinion on the financial controls, and financials show a declining business that burns cash.
- All of the management team has past personal bankruptcies or a shareholder wipeout. CEO and
Treasurer filed personal bankruptcy. CEO was allegedly involved in Mazzuto Scam and paid a
settlement.
The legalization of Marijuana not only provides a huge opportunity for real entrepreneurs but it also provides one for people with a history of penny stock promotion and bankruptcies. Terra Tech (OTCQX:TRTC) (OTCQX:TRTCD) IMHO TRTC is the latter.
The last two businesses that Terra Tech's CEO, Derek Peterson, has been involved in resulted in people being convicted for crimes. One was convicted for embezzlement and in the other a union official was convicted for taking bribes from his co-founder.
It is equally concerning -> the abuses of governance and self-enrichment at TRTC. Self-enrichment starts with TRTC's foundational $51.5 million related-party purchase of one single dispensary, Black Oak, from its CEO (Source - pg 25/42 -10-K). Issues in the management suite don't stop at the CEO.
The CFO appears to be a crash test pilot for driving micro cap stocks to zero, having been involved in at least three total shareholder wipeouts, the last time holding the title of CFO & CEO. The current COO (and former Treasurer of TRTC) filed for personal bankruptcy due to unpaid gambling debts and allegedly lied to casinos to obtain credit, which makes him an unusual choice for COO (Central District of CA-Case No. 8:09-bk 14465-TA).
The fact that TRTC is a paid stock promotion (search "compensation"), a reverse merger (10-K pg 4), and that management team has been selling lots of stock is just the tip of the iceberg.
TRTC's financials show a company bleeding cash. It will be presented that recently filed lawsuits that TRTC's businesses allegedly are unable to pay suppliers on time. It is believed these lawsuits may trigger a default on TRTC's recently issued toxic convertible bonds.
Even if TRTC succeed in dismissing these suits, It is believed the end may still be near. TRTC's three core businesses are all showing signs of declining QoQ.
Provided is a detailed explanation of: Dispensary & Cultivation business (impressively it even loses lots of money selling marijuana when the industry is booming); Edible Garden (sounds marijuana related, but it really sells fresh basil and lettuce at a net loss); and IVXX (the company's self-created marijuana brand that went from 200 distribution points in 2015 to 6 today).
Caution to investors that the financial picture could be worse than the numbers that have been analyzed in the company's public filings. TRTC's auditor, Macias Gini & O'Connell LLP (whose only other public company clients have a combined market cap of <$3m), has rendered an adverse opinion on the company's financial controls (see auditor section below).
Before I discuss executives selling shares at an alarming rate and a long history of past financial misdeeds by management, including the alleged diversion of deals away from the public company and to its private investment vehicles, we will focus on TRTC's immediate liquidity concerns.
TRTC finds itself in a weak financial position (with only $4.5m of cash on hand (pg 3 10-Q) at the end of Q1 and a burn rate of $6.7m during Q1 (pg 4). In early 2018, TRTC issued Convertible Debt twice; the terms of the convertibles were highly punitive for equity holders. They allow the holders to short stock in advance and convert into equity at a 22% to 24% discount to the lowest two-day VWAPs in the prior 13 days (source).
In default, the discount would increase to 41%. At the current price in a no-default scenario, shareholders can expect dilution of ~36%. Dilution increases as the share price drops. These types of debt instruments are often referred to as "death spiral" and make convertible holders somewhat indifferent to a falling stock price.
These structures not only serve to flag the company's desperate capital position (having only a little over two months of cash in the bank at present burn rate) but also increase the level of probability that the equity ultimately plummets towards zero while the convertible holders profit.
Further lawsuits have been uncovered that allege internal fraud and preferential dealing have occurred at Terra Tech. The suits allege members of management conspired to direct deals to themselves as opposed to the public company and that Terra Tech employees were complicit.
If equity holders are clinging to the hope that the management team might be able to turn things around, we would suggest they pay attention to the recent executive departure. On April 20th, 2018, Ken VandeVrede, the Chief Agricultural Officer, resigned. He was the only member of the management team and board that we have not found to have been declared bankrupt or previously involved in stock promotion. Unlike most directors that bow out quietly, he resigned due to disputes with the company, and now Terra Tech is accusing him of committing fraud.
Related Party Dealings & Bribery
If you had $51.5 million and wanted to invest in Oakland in 2016, you could do two very different investments. You could either pay the combined annual salary of Steph Curry, Klay Thompson, and Draymond Green for a season (and still have $7.4 million left over) or you buy a single marijuana dispensary 100 meters from a homeless encampment that was 12% owned by TRTC's CEO. TRTC chose the latter.
In 2016, TRTC purchased a single marijuana dispensary from Black Oak, an entity 12% owned by its CEO. (Source - pg 42/25 -10-K). Our investigators visited this dispensary. Inside it is no better or worse than any other dispensary in the Bay Area, however, it is located in a bad neighborhood in Oakland.
Another twist in this story is that Derek Peterson's former business partner & co-founder of Black Oak, Martin Kaufman, got the Black Oak license (now Blum) via paying bribes to cannabis union leader Dan Rush. (Summary story here; Dan Rush criminal complaint here). According to the complaint (which Derek was also named in, Paragraph 17), Kaufman avoided prosecution by agreeing to cooperate with the US Attorney Office in Dan Rush's case regarding the bribery. Dan Rush was convicted of receiving bribes from Kaufman and sentenced to 3 years in prison (Note - Kaufman and Peterson were never charged with a crime in this case). Paying bribes to union officials to get dispensary licenses is definitely not a sustainable competitive advantage.
Investigators drove buy and visited the Blum Oak dispensary to see what TRTC received for stock valued at $51.5m. What they found was a dispensary that is located within 3 blocks of two homeless encampments in Oakland, CA, a city that currently ranked the third most dangerous city America by Forbes.
This "high" price paid to a related party ($51.5 million) also appears more egregious when compared to TRTC's only other dispensary purchase. A $7 million deal that TRTC paid for its Santa Ana location in September 2017.
New Lawsuits - Terra Tech Potentially in Default on Convertible Debt
It has been discovered two recent lawsuits which allege TRTC has failed to pay its vendors in a timely manner which if true is a sign of significant financial distress.
It seems TRTC's CEO also has a history of not paying debts.
-Another of his previous businesses, WeGrow Oakland, was also sued for not paying its bills. WeGrow went bankrupt and another of Derek's recent partner's, Dhar Mann, was charged with 13 felony charges for stealing Oakland city funds. He was convicted and sentenced to 5 years probation. WeGrow's problems seemed to have started simply as an inability to pay employees and suppliers. There are multiple reports of cashers at the dispensary not being paid on time (when paid at all) and other suppliers that were not paid in full - article.
Schawk Inc. v. Terra Tech Case
Schawk USA Inc. is suing Terra Tech (CA Case 2:18-cv-02571-FMO-AGR) for $179,005 + monthly interest and late fees. Terra Tech has been accused of failing to pay Schawk for advertising and point of sale marketing services that it has provided. This case was filed on March 29, 2018. TRTC filled a response on June 1, 2018, denying these claims and still refusing payment to Schawk Inc.
Schawk Inc.'s lawsuit also states it has all the agreements in writing as well as the invoices that were accepted by Terra Tech.
Whitetown Realty v. Edible Garden
Whitetown Realty is also suing Edible Garden (a Terra Tech entity) for not paying rent on time and has declared it in default of its lease. (NJ Case: MRS L 000796-18 - pg 45). It is suing Terra Tech for $2,247,082.98, and this lawsuit and breach of the lease agreement was filed on April 10, 2018.
Terra Tech's response to the lawsuit filed April 11, 2018, claims it is current on its rent and cannot legally be evicted. TRTC claims that the payments might have been late but are not its fault since the responsibility for paying belonged to Steve VandeVrede, a Terra Tech employee and member of the Vande Vrede family who TRTC bought Edible Garden from. Terra Tech is currently accusing Steve, Ken, and the rest of the Vande Vrede family of fraud (CA Central District - Case 8:18-cv-00602-JVS-JDE)
Should either of these cases go against TRTC, it may accelerate the share price decline. Any court judgment >$50,000 against TRTC triggers a default on TRTC's outstanding convertible notes which can then be converted into stock at a 41% discount and sold immediately (Pg S-32 & Note 4).
The Management Team: A History of Bankruptcies & Shareholder Wipeouts:
Below is a full list of the management team and board of directors of Terra Tech and select highlights from their previous involvements in public companies and personal financial histories.
Terra Tech's CEO is Derek Peterson. However, he didn't always go by that name.
-He used to be known as Derek Oppedisano. We have asked the company multiple times but have yet to receive a response about why he changed his name. Fortunately, when you google "Derek Peterson" you find a lot not to like for a company CEO. Derek Peterson was fired by Morgan Stanley for failing to disclose to his employer that he was engaging in an outside business. (see Finra Track Record)
Derek Peterson and his wife, Amy Almsteier (a former TRTC board member and major shareholder), were accused of accepting illegally issued shares of IEAM in a pump and dump stock promotion known as the Mazzuto Scheme (more on that in Appendix A). In the settlement they agreed to pay a financial settlement of an undisclosed amount to IEAM shareholders, after its stock went to $0.00.
(Source - Pg 15 - NJ Case No. 09-11475 BLS)
It seems Derek's financial history is checkered. He filed for personal bankruptcy in March of 2012 (CA case 8:12-bk-13957-ES). The filings suggest a lack of financial prudence. With his house as his only asset (secured by an unpaid Chase mortgage for $800,000) Derek managed to rack up over $50,000 of credit card debt and $1.75 million of debts to Morgan Stanley (pg 13-14 of bankruptcy filings).
It seems Michael James, who is currently the CFO of Terra Tech, has, to put it kindly, had a pretty poor track record of involvement with public companies. He was involved in three previous companies that were listed and all three resulted in total shareholder wipeouts. Most recently he was both the CFO (started July 2010) and CEO (June 2012) of Inergetics, Inc. (OTC:NRTI) (source - NRTI 10-k pg 22). NRTI was a previous nutrition related penny stock wipeout. Investors should be concerned that NRTI (like TRTC) issued "death spiral" convertible debt (see article on MJ stocks to avoid). The stock went from a peak of $2.10 during his tenure to trading for $0.02 (-99%) when he moved over to become full-time CFO of Terra Tech. Michael James was also Chairman of Guided Therapeutics (OTCQB:GTHP), another 99.9% penny stock wipeout trading <$0.01 (chart). He was also on the board of Nestor, Inc. from 2006 and CEO from Jan 2009. It was a 100% wipeout going to $0.00 and even went so far as having the SEC revoke its registration as a listed company in 2014 (SEC Statement).
The COO, Michael Nahass, filed for his own personal bankruptcy in 2009 listing 0 assets and 1 to 10 million of debts primarily to casinos for unpaid gambling debts (Central District of California, Case No. 8:09-bk 14465-TA) (pg 45 of 10-k). His debts include owing the Bellagio ($457,500 - Doc 24), Mandalay Bay ($347,500 - Doc 24), Caesar's ($705,000 - Doc 19), Discover Financial ($12,375 - Doc 20), and Chase Bank ($60,651 - Doc 21). The Bellagio alleges Michael Nahass was able to run up these large gambling debts by deceiving the casino and showing it that he had sufficient assets to cover the credit it extended to him (Source - Paragraph 7 Case 8:09-ap-01606-TA). From January 2012 to July 2015, Mr. Nahass served as Terra Tech's Treasurer, a very interesting position considering his gambling habit and history of accusations of deceiving casinos with false accounts.
Newest Board Member Alan Gladstone is also not a stranger to bankruptcy court. He was the former CEO of Anna's Linens and managed to take that company into ch. 11 bankruptcy not once but twice (link, bankruptcy 2015, Wikipedia).
Steven J. Ross - Adds to the list of TRTC directors who has had a front row seat to a corporate bankruptcy. Mr. Ross is an Ex VP at Longhai Steel (LHAI), he joined the company in 2012. Three years before the company had its reverse merger IPO (pg 2 of S-1) by Ladenburg in the peak of the China Hustle era. Steven Ross joined in 2012 (10-K pg 32), and the company had its registration revoked by the SEC in 2015. Shareholders lost 100% of their investment. (link to SEC revoking registration).
Canary in the coalmine - Chief Agriculture Officer & Major Shareholder Resigns
Only one current TRTC board member or executive hasn't been linked to previous bankruptcies or shareholder wipeouts that we could find, and that was Ken VandeVrede. Unfortunately for investors in TRTC, he no longer appears to be guarding the hen house. He resigned from the Board of Directors on April 20, 2018, "because of a disagreement relating to the operations, policies, and practices of the company."
Lack of Cash
TRTC's financial health is in a critical state. Terra Tech's recent 10-Q shows it having $4.5 million of cash on hand (pg 3 10-Q) but loss from operations is currently running $6.7m a quarter (pg 4). TRTC was forced to issue $10 million of toxic convertible debt in Q1 in order to pay its bills and issued an additional $5 million on June 12th (debt filing)
TRTC's "Death Spiral" Converts
Likely due to its desperate financial position and lack of alternative financing, Terra Tech has issued convertible debt. This type of toxic convertible debt is sometimes referred to as "Death Spiral" financing. Investors sometimes refer to these as "Death Spiral" converts because the deals are structured such that the debt holder is always able to convert and sell at a discount to the current trading price. This ensures ongoing pressure and further dilution on the stock as it trades lower. In the case of TRTC, the debt holders are able to convert at a 24% & 22% discount when factoring in their interest rate. TRTC has issued two of these highly dilutive debt deals already in Q1-2018 and already issued more in Q2.
TRTC shareholders will face assuming the holders of the existing $45m of converts exercise. At today's price, investors will likely be diluted by 36% to 47% when the convertible holders exercise. This doesn't require shareholder approval. Debt holders immediately have the right to convert to common and sell. If TRTC is deemed to have defaulted, then the conversion discount increases to 41% which is a looming possibility should it lose one of the two lawsuits filed by the vendors that are suing it. The dilution becomes significantly more punitive as the share price decreases.
A 2015 Bloomberg article describes the shady death spiral convert business. As the article mentions, the only real risk to the convertible financier is if they are not able to convert shares to common before the company goes bankrupt. Fortunately for Terra Tech financiers their convertible deal contains provisions that allow them to short the TRTC stock before converting, as long as they aren't Net Short. The deals also contain provisions that allow convertible owners to convert to common shares at a discount immediately after providing financing to the company.
Key Terms of Terra Tech's Two Recent Death Spiral Convertible Debt Deals:
Deal 1: $5 million of Convertible Debt that is convertible for 85% of the lowest daily VWAP in the 15 prior days and a 12% interest rate.
Deal 2: $40 million of Convertible Debt done in $5 million tranches that is always convertible for 87% of the average of the 2 lowest VWAPs in the 13 days prior to conversion and includes a 7.5% interest rate. The first $5 million was sold March 12, 2018, and an additional $5 million was sold on June 12, 2018.
Debt Immediately Convertible at a discount - The debt is immediately convertible to common stock at their discounted rate. (Note 4)
Default - It gets worse! If Terra Tech is ever in default, the interest rate in both Deal 1 & Deal 2 increases to 18% per year and the discount rate increases to 30% below avg of 3 lowest VWAPs in the last 20 trading days (link - page S-32). Thus, $1 million of convertible debt would convert to a guaranteed $1.68 million of dilution for common stock holders if it's held for 1 year.
Default can occur for many reasons including:
Any court judgment against the company >$50,000. TRTC currently has two court cases pending that would send it into default.
Another cause for default is if TRTC delays in issuing shares to its convert holders. "In default if they don't deliver shares to the convert holder promptly (prior to the 3rd trading day after conversion day)." So basically it would go into default if it tries to stop the death spiral.
Constant Selling Pressure - In Deal 2 Terra Tech secured $40 million worth of interest but the lender is going to participate in $5 million increments. This will likely result in constant selling pressure on TRTC stock as it continuously converts and sells its stock from the new deal.
How similar toxic debt spirals played out
Terra Tech's CFO, Michael James, issued toxic convertible debt at his last company, Inergetics Inc. in August of 2014. (source - NRTI S-1 pg 10). Less than 1 year later Inergetics stock had declined by over 99% and was trading for <$0.01
Auditor Issues - Adverse Opinion on Financial Controls
The company's main auditor since 2016, Macias Gini & O'Connell LLP, wrote that it has an ADVERSE OPINION (see below documents) for Terra Tech's internal financial controls. Receiving an adverse opinion is almost unheard of! There are 4 types of auditor opinion, an adverse opinion is the worst.
"An Adverse Opinion is a professional opinion made by an auditor indicating that a company's financial statements are misrepresented, misstated and do not accurately reflect its financial performance and health."
This pours cold water on the bull case that there is an imminent uplisting to the NASDAQ. Nasdaq does not accept companies with adverse auditor opinions, non-independent board of directors, and poor accounting controls.
This lack of accounting controls could be partially explained by TRTC's Director of Corporate Operations having previously been a bartender for the 3 years prior. Alternatively it might be because the CFO doesn't have much support from TRTC's Staff Accountant who was a Barista at Starbucks up until the time they joined TRTC.
The auditor identified flaws:
Risk Assessment
Insufficient personnel to adequately exercise accounting judgment
Lack of majority of independent board members
Lack of controls to identify sources of material misstatements or potential accounting errors
Ineffective IT controls for financial spreadsheets
Strangely, TRTC also hired a second auditor on March 16, 2018, Benjamin & Young, but only had it audit the year ended 2015. We have contacted TRTC management with an extensive list of questions including why it has hired a second auditor but it has not yet replied.
Lawsuits against TRTC employees:
Another recent lawsuit supports our opinion that Terra Tech is mismanaged and poorly run.
Terra Tech v. Vande Vrede family (which includes TRTC employees & board members) has multiple accusations of fraud against its own employees and major shareholders. (Case 8:18-cv-00602-JVS-JDE - US District Court - Central District CA)
Accusations include:
Diverting multiple marijuana opportunities away from Terra Tech and to its own Vande Vrede investments. Some that Terra Tech was negotiating and others that Terra Tech never saw. This shows the complete incompetence of TRTC management as it lost at least 7 opportunities to its own employees.
Having Terra Tech employees produce PowerPoint presentations for the Vande Vrede family personal investment deals.
Not working hard (accused of working less than 30 hours a week).
On the recent conference call, TRTC management mentioned it wasn't that focused on M&A opportunities. However, from the lawsuit it becomes very clear that it has been interested in M&A opportunities, just not ones that benefit the public company.
Opportunities have been diverted away from TRTC Shareholders
The lawsuit mentions 5 different opportunities that Terra Tech employees diverted to their own family office rather than the company: Cultivar, Chill Waze, Summed Growers, CBD Water, and Great Meadows.
Management should have been aware of this since Terra Tech was in active negotiations with one of the diverted opportunities and the Vande Vredes are being accused of even using TRTC employees to produce PowerPoints for their pitches to divert opportunities.
Stock Promotion
Terra Tech has actively engaged in paid stock promotion throughout the company's history. Its current claim to fame is being the largest client by market cap of "Small Cap Voice" - see the disclaimer regarding the paid stock promotion. Other past paid stock promotions by Terra Tech can be seen at hotstocked.com
Factors like the Toxic Debt financing and Paid Stock Promotions are important for marijuana investors to use in determining which companies are more likely to have real promise versus which ones are likely using the Marijuana legalization hype to misappropriate shareholders' money.
Industry sources like "New Cannabis Ventures" run by Alan Brochstein warn their own readers to watch out for companies that have these two telltale signs of a bad investment. Alan has recently recommended buying TRTC so we assume that he is unaware of both the recent toxic debt issues and the long history of paying stock promoters.
Valuation of Business Lines
Even though TRTC's financial controls are deemed unreliable by its own auditor, we analyze each of TRTC's business lines, all of which have been unable to generate profits. TRTC has accumulated a shareholder deficit of $115m (pg 3 of 10-Q). The cash burn has continued and in 2017 alone TRTC's operating activities burnt through $15.9 million. (pg 32).
Blum - Dispensary & GrowOps
Terra Tech currently owns & operates 6 dispensaries (2 in California and 4 in Nevada) with plans to open 1 more. Cumulatively this business line has burned through $13.1m of cash in the last two years. QoQ Growth for the business has gone NEGATIVE too, declining 22% in the last quarter.
Investors should be concerned that this division of the business was unable to make money during a period that it operated with little legal competition as recreational legalization has proven to be a disaster for existing players in markets such as Washington. Black Oak also only received one of the initial medical marijuana licenses in Oakland via paying bribes and has had difficulty securing additional recreational licenses.
With marijuana now recreationally legal, the consumer experience has become increasingly important. This is likely bad news for Blum. TRTC's pricing for product doesn't compare favorably with the competition. The Santa Ana Blum location charges $70 for 1/8 of top shelf LA Kush. This compares to $55 at Med Men whose Santa Ana location is both more convenient to the highway and is less than 1 mile away from Blum. Our own researcher paid $80 (with tax) for 1/8 from the Blum Oak location. This compares too much lower costs on Eaze.com which currently range from $39 to $49 for a premium 1/8 and it is significantly more convenient as they do home delivery. A more complete section on customer reviews of locations is in Appendix B, but those reviews consistently call out complaints of Blum being "Overpriced as Hell" & customers that "Feel Ripped off."
All of the above factors are already starting to impact TRTC's financials. Legalization in California occurred at the beginning of 2018. Since then, TRTC's revenue has declined on a quarter over quarter (QoQ) basis (-22% in Q1-2018). Management highlights YoY growth on its call, but that neglects the major fact that it purchased Blum-Santa Ana in Sept. 2017. Unfortunately, SG&A is increasing as the stubbornly high cost basis has continued to balloon so operating losses have increased 34% QoQ.
Seemingly unsatisfied with a sub-scale dispensary business, TRTC has made the decision move into growing. We believe this is ill-timed. Prices for flower have continued to crater. According to CannabisBenchmarks.com, prices that growers are receiving on the open market sunk to historic lows in June 2018. That is after prices had already declined by ~30% over the previous 24 months
Edible Garden Business - Not Marijuana related - TRTC sells basil, butterhead lettuce and other local produce.
There seems to be trouble trying to ascribe any value on the Edible Garden business. Edible Garden has consistently lost money and currently is embroiled in a lawsuit for violating its lease terms that would result in it being evicted from its facility. The core business is distribution of vegetables to New Jersey grocery stores. Revenues had a massive 52% YoY decline from 2016 to 2017 from $12m to $5.7m and losses have almost doubled. The Edible Garden Division is currently being sued by its landlord, Whitetown Realty, which has alleged it hasn't been paying its rent on time, a claim that has not been disputed by TRTC.
Even before Edible Garden ran into trouble with its landlord, its financials were in deep trouble. It sells low-margin vegetables to New Jersey retailers at a significant net loss
Source (2017 10-K pg F-48, 49 & 2015 10-K pg F-24, 25)
IVXX Business Line - IVXX is Terra Tech's self-developed line of cannabis waxes, shatters, oil, and vape pens. In 2015, Terra Tech claims that it was for sale in over 200 stores/dispensaries (2015 10-K pg 5). We have found 0 dispensaries that currently sell IVXX products outside of Terra Tech's self-owned Blum Dispensaries. In fact, IVXX's own store locator doesn't work. The only 6 listed dispensaries on its website DO NOT SELL IVXX product and 4 of them are actually closed.
Thus, we can only determine that IVXX has been a complete failure of a business line and the brand is currently worth $0.00 as it is not distributed to any other retailers. We find it impossible to believe that consumers would choose to buy IVXX branded product like a vape pen over a Pax one or its pre-rolled over established brands like Island.
Branded Marijuana has become a very competitive business and it is clear by the complete lack of distribution that Terra Tech's IVXX brand is worthless.
Insider Sales
Insider sales at a company are a great indicator that a company is overvalued. Terra Tech's management team has consistently been selling shares selling a total of 21,982,726 million shares back into the market on 83 occasions in just the last 3 years while making 0 open market purchases at the time this was written. It was even willing to sell at prices as low as $0.13 (reverse split adjusted that is $1.91). Furthermore, all those shares sold were either awarded for free via generous stock grants (like the new board member who received a 1m share grant) or via M&A transactions like the related party purchase of Black Oak.
Conclusion
We recommend that investors follow the lead from the Terra Tech Insiders and they sell stock in TRTC. The only risk to the upside we see is euphoria around marijuana stocks, but we believe this business is fundamentally set to burn cash and dilute shareholders until it goes to $0.00. If you are long other marijuana stocks, this provides a great hedge as there is 1.7 million shares of borrow as of 6-28 at the relatively low borrow rate of -11%.
In conclusion and or summary:
-Suppliers and landlords are suing the company for not paying its debts.
-Toxic convertible debt that will cause a Death Spiral for the Common Stock.
-Management team involvement in both past pump and dumps and received its first dispensary license via bribery.
-Management team has a history of bankruptcies (both personal and with companies they have run).
-Resignation of the only board member and management team member not connected to past bankruptcies or stock promotions.
-Fundamentally disadvantaged dispensary business (worse pricing, locations, and customer reviews) in an increasingly competitive market.
-Auditors gave the financial controls an adverse ruling.
-No chance of a near-term Nasdaq uplisting.
-Insider selling.
-Reverse merger that is also a paid stock promotion.
TRTC seems to be in a very unique and dire position due to the fact that it has recently issued Toxic Convertible Debt and also has been not paying its suppliers. Beyond all the bribery, penny stock wipeouts, and bankruptcies both of these things mean that the company could be in an extreme state of distress. The convertible debt will continue to be a negative catalyst since there is a motivated seller of the stock all the way to $0.01. In fact, the lower the stock price goes, the more shares will be issued to the convert holders and the larger dilution will be.
Invest at your own risk!
Come on man....it is WITH OUT A DOUBT DILUTION LOL WE ALL KNOW THIS.....
$40 MILLION DOLLARS COMES AT A PRICE.... AND WE HAVE TO PAY THE TOLL
THATS WHY DEREK PETERSON IS A CRIMINAL IMHO
HE IS STARTING THE INSIDER ENRICHMENT PLAN ALL OVER AGAIN...
Its the only smart way to make money off otc stocks like this....so i would not laugh to hard..while he collects a lot of money.
After all its investing to make money, not investing to lose your money or have your money held ransom for 3 years and then say ...well maybe in 2019 things will get even to the 15 to 1 reverse split day price per share lol
Come on AC your better than this
How is TRTC's Market cap so f.*cking low ? Kush bottles has a higher market cap? Who evaluates these numbers lol
Yes some of these companies have a better outlook globally and on their home front, but their numbers are 10 to 20 multiples better than trtc?
This company is cursed...i swear....some all knowing entity hates this company
https://www.investopedia.com/investing/top-marijuana-stocks/?partner=YahooSA&yptr=yahoo
BTW thankfully the pps has not hit $1 today
Briar they can have 1 million store fronts.....it does not matter. They are not performing well.
Derek is panicking lol
2018 1st quarter---> $8.5 in revenue and $10 million in expenses. This is after NV has been rec legal for a year and CA has been legal for a quarter????
This should be the grand honeymoon phase and sales should be jumping thru the roof..lol and add on top of that -> they get an advantage ( some no competition clause) in Nevada for i think 18 months.lol
This pos can barely beat last years numbers?? after adding dispensary and CA and NV being recreational
The future is not owning a dispensary Briar...thats a suckers bet. The future is supplying dispensaries and online services. You have to build a well respected name and brand, which TRTC is not!!!!!!!!
The future is owning Huge state of the art grow facilities NOT SHARING A FACILITIY WITH NULEAF OR BUILDING OUT A SMALL ONE.
THE FUTURE IS HAVING GLOBAL RELATIONSHIPS, TO SUPPORT ONLINE CUSTOMERS, RESEARCH FACILITIES, HEMP COMPANIES, AND EVEN PHAM AND BEER.
THEY HAVE NOTHING!!!!! LOL
These dispensaries are not providing any year to year growth to talk about. That is why Derek will not give a 2018 revenue guidance. He knows its going to get worse and he needs to grow his own supply to make any real year to year money.
This company is in trouble...Its built to fail and its leaders are a joke.
READ AND RESEARCH - ITS NOT ALL SPECULATION MY FRIEND
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
Yea AC i hear ya, but its always 1 excuse after another for 3 years man....if it was one or to issues...i can say hey its a new frontier or hey it was a young and dumb move.
But the list is dirty and long. It seems like they are hiring criminals that all have the insider enrichment scheme routine down to a science, and they are hiring people who all have bankrupts's and some with SEC violations.
I mean would let your daughter marry a guy like this? Would you go into to business with a man like this?
Would you hire the people he hired to your board of directors?
I know dam well when your off the clock ..you would say hell no i would not.
I mean read some of this stuff..forget about the short propaganda ...there is plenty of pro propaganda in other posts as well. Yet look where we are as a company.
Read without blinders.
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
He better buy up the PPS tomorrow
I hope Derek has someone put money into this stock tomorrow to combat any red day sell off.
Thats one trick of the trade to try and show everything is ok....but at $2.15 does it even matter anymore?
Its close to rock bottom....
This company sucks
Again ill answer..... I was not aware of few things till now and TRTC is filthy to the core. I would not invest 1 cent in this company now . Its failing badly and bleeding money like i never knew till now.
I also do not like all the dirty tricks of the trade they use... Like Mass dilution, cause they can, and toxic financing to anyone willing to barter for our shares, and how they all have bankruptcy's.
It goes on and on...
And we sit here like suckers making excuses for 3 years for this criminal empire, while they get rich?
I am now scared i am going to lose all my money!!!!!!!!!!!
Newbies read, and do your own research
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
TRTC Historical Summary
- It has been uncovered lawsuits against TRTC from alleged unpaid suppliers.
- Toxic Convertible Debt provides significant potential for shareholder dilution.
- The company paid $51.5m for a dispensary in a related-party transaction; first dispensary license was
received via bribery.
- It is of opinion on the financial controls, and financials show a declining business that burns cash.
- All of the management team has past personal bankruptcies or a shareholder wipeout. CEO and
Treasurer filed personal bankruptcy. CEO was allegedly involved in Mazzuto Scam and paid a
settlement.
The legalization of Marijuana not only provides a huge opportunity for real entrepreneurs but it also provides one for people with a history of penny stock promotion and bankruptcies. Terra Tech (OTCQX:TRTC) (OTCQX:TRTCD) IMHO TRTC is the latter.
The last two businesses that Terra Tech's CEO, Derek Peterson, has been involved in resulted in people being convicted for crimes. One was convicted for embezzlement and in the other a union official was convicted for taking bribes from his co-founder.
It is equally concerning -> the abuses of governance and self-enrichment at TRTC. Self-enrichment starts with TRTC's foundational $51.5 million related-party purchase of one single dispensary, Black Oak, from its CEO (Source - pg 25/42 -10-K). Issues in the management suite don't stop at the CEO.
The CFO appears to be a crash test pilot for driving micro cap stocks to zero, having been involved in at least three total shareholder wipeouts, the last time holding the title of CFO & CEO. The current COO (and former Treasurer of TRTC) filed for personal bankruptcy due to unpaid gambling debts and allegedly lied to casinos to obtain credit, which makes him an unusual choice for COO (Central District of CA-Case No. 8:09-bk 14465-TA).
The fact that TRTC is a paid stock promotion (search "compensation"), a reverse merger (10-K pg 4), and that management team has been selling lots of stock is just the tip of the iceberg.
TRTC's financials show a company bleeding cash. It will be presented that recently filed lawsuits that TRTC's businesses allegedly are unable to pay suppliers on time. It is believed these lawsuits may trigger a default on TRTC's recently issued toxic convertible bonds.
Even if TRTC succeed in dismissing these suits, It is believed the end may still be near. TRTC's three core businesses are all showing signs of declining QoQ.
Provided is a detailed explanation of: Dispensary & Cultivation business (impressively it even loses lots of money selling marijuana when the industry is booming); Edible Garden (sounds marijuana related, but it really sells fresh basil and lettuce at a net loss); and IVXX (the company's self-created marijuana brand that went from 200 distribution points in 2015 to 6 today).
Caution to investors that the financial picture could be worse than the numbers that have been analyzed in the company's public filings. TRTC's auditor, Macias Gini & O'Connell LLP (whose only other public company clients have a combined market cap of <$3m), has rendered an adverse opinion on the company's financial controls (see auditor section below).
Before I discuss executives selling shares at an alarming rate and a long history of past financial misdeeds by management, including the alleged diversion of deals away from the public company and to its private investment vehicles, we will focus on TRTC's immediate liquidity concerns.
TRTC finds itself in a weak financial position (with only $4.5m of cash on hand (pg 3 10-Q) at the end of Q1 and a burn rate of $6.7m during Q1 (pg 4). In early 2018, TRTC issued Convertible Debt twice; the terms of the convertibles were highly punitive for equity holders. They allow the holders to short stock in advance and convert into equity at a 22% to 24% discount to the lowest two-day VWAPs in the prior 13 days (source).
In default, the discount would increase to 41%. At the current price in a no-default scenario, shareholders can expect dilution of ~36%. Dilution increases as the share price drops. These types of debt instruments are often referred to as "death spiral" and make convertible holders somewhat indifferent to a falling stock price.
These structures not only serve to flag the company's desperate capital position (having only a little over two months of cash in the bank at present burn rate) but also increase the level of probability that the equity ultimately plummets towards zero while the convertible holders profit.
Further lawsuits have been uncovered that allege internal fraud and preferential dealing have occurred at Terra Tech. The suits allege members of management conspired to direct deals to themselves as opposed to the public company and that Terra Tech employees were complicit.
If equity holders are clinging to the hope that the management team might be able to turn things around, we would suggest they pay attention to the recent executive departure. On April 20th, 2018, Ken VandeVrede, the Chief Agricultural Officer, resigned. He was the only member of the management team and board that we have not found to have been declared bankrupt or previously involved in stock promotion. Unlike most directors that bow out quietly, he resigned due to disputes with the company, and now Terra Tech is accusing him of committing fraud.
Related Party Dealings & Bribery
If you had $51.5 million and wanted to invest in Oakland in 2016, you could do two very different investments. You could either pay the combined annual salary of Steph Curry, Klay Thompson, and Draymond Green for a season (and still have $7.4 million left over) or you buy a single marijuana dispensary 100 meters from a homeless encampment that was 12% owned by TRTC's CEO. TRTC chose the latter.
In 2016, TRTC purchased a single marijuana dispensary from Black Oak, an entity 12% owned by its CEO. (Source - pg 42/25 -10-K). Our investigators visited this dispensary. Inside it is no better or worse than any other dispensary in the Bay Area, however, it is located in a bad neighborhood in Oakland.
Another twist in this story is that Derek Peterson's former business partner & co-founder of Black Oak, Martin Kaufman, got the Black Oak license (now Blum) via paying bribes to cannabis union leader Dan Rush. (Summary story here; Dan Rush criminal complaint here). According to the complaint (which Derek was also named in, Paragraph 17), Kaufman avoided prosecution by agreeing to cooperate with the US Attorney Office in Dan Rush's case regarding the bribery. Dan Rush was convicted of receiving bribes from Kaufman and sentenced to 3 years in prison (Note - Kaufman and Peterson were never charged with a crime in this case). Paying bribes to union officials to get dispensary licenses is definitely not a sustainable competitive advantage.
Investigators drove buy and visited the Blum Oak dispensary to see what TRTC received for stock valued at $51.5m. What they found was a dispensary that is located within 3 blocks of two homeless encampments in Oakland, CA, a city that currently ranked the third most dangerous city America by Forbes.
This "high" price paid to a related party ($51.5 million) also appears more egregious when compared to TRTC's only other dispensary purchase. A $7 million deal that TRTC paid for its Santa Ana location in September 2017.
New Lawsuits - Terra Tech Potentially in Default on Convertible Debt
It has been discovered two recent lawsuits which allege TRTC has failed to pay its vendors in a timely manner which if true is a sign of significant financial distress.
It seems TRTC's CEO also has a history of not paying debts.
-Another of his previous businesses, WeGrow Oakland, was also sued for not paying its bills. WeGrow went bankrupt and another of Derek's recent partner's, Dhar Mann, was charged with 13 felony charges for stealing Oakland city funds. He was convicted and sentenced to 5 years probation. WeGrow's problems seemed to have started simply as an inability to pay employees and suppliers. There are multiple reports of cashers at the dispensary not being paid on time (when paid at all) and other suppliers that were not paid in full - article.
Schawk Inc. v. Terra Tech Case
Schawk USA Inc. is suing Terra Tech (CA Case 2:18-cv-02571-FMO-AGR) for $179,005 + monthly interest and late fees. Terra Tech has been accused of failing to pay Schawk for advertising and point of sale marketing services that it has provided. This case was filed on March 29, 2018. TRTC filled a response on June 1, 2018, denying these claims and still refusing payment to Schawk Inc.
Schawk Inc.'s lawsuit also states it has all the agreements in writing as well as the invoices that were accepted by Terra Tech.
Whitetown Realty v. Edible Garden
Whitetown Realty is also suing Edible Garden (a Terra Tech entity) for not paying rent on time and has declared it in default of its lease. (NJ Case: MRS L 000796-18 - pg 45). It is suing Terra Tech for $2,247,082.98, and this lawsuit and breach of the lease agreement was filed on April 10, 2018.
Terra Tech's response to the lawsuit filed April 11, 2018, claims it is current on its rent and cannot legally be evicted. TRTC claims that the payments might have been late but are not its fault since the responsibility for paying belonged to Steve VandeVrede, a Terra Tech employee and member of the Vande Vrede family who TRTC bought Edible Garden from. Terra Tech is currently accusing Steve, Ken, and the rest of the Vande Vrede family of fraud (CA Central District - Case 8:18-cv-00602-JVS-JDE)
Should either of these cases go against TRTC, it may accelerate the share price decline. Any court judgment >$50,000 against TRTC triggers a default on TRTC's outstanding convertible notes which can then be converted into stock at a 41% discount and sold immediately (Pg S-32 & Note 4).
The Management Team: A History of Bankruptcies & Shareholder Wipeouts:
Below is a full list of the management team and board of directors of Terra Tech and select highlights from their previous involvements in public companies and personal financial histories.
Terra Tech's CEO is Derek Peterson. However, he didn't always go by that name.
-He used to be known as Derek Oppedisano. We have asked the company multiple times but have yet to receive a response about why he changed his name. Fortunately, when you google "Derek Peterson" you find a lot not to like for a company CEO. Derek Peterson was fired by Morgan Stanley for failing to disclose to his employer that he was engaging in an outside business. (see Finra Track Record)
Derek Peterson and his wife, Amy Almsteier (a former TRTC board member and major shareholder), were accused of accepting illegally issued shares of IEAM in a pump and dump stock promotion known as the Mazzuto Scheme (more on that in Appendix A). In the settlement they agreed to pay a financial settlement of an undisclosed amount to IEAM shareholders, after its stock went to $0.00.
(Source - Pg 15 - NJ Case No. 09-11475 BLS)
It seems Derek's financial history is checkered. He filed for personal bankruptcy in March of 2012 (CA case 8:12-bk-13957-ES). The filings suggest a lack of financial prudence. With his house as his only asset (secured by an unpaid Chase mortgage for $800,000) Derek managed to rack up over $50,000 of credit card debt and $1.75 million of debts to Morgan Stanley (pg 13-14 of bankruptcy filings).
It seems Michael James, who is currently the CFO of Terra Tech, has, to put it kindly, had a pretty poor track record of involvement with public companies. He was involved in three previous companies that were listed and all three resulted in total shareholder wipeouts. Most recently he was both the CFO (started July 2010) and CEO (June 2012) of Inergetics, Inc. (OTC:NRTI) (source - NRTI 10-k pg 22). NRTI was a previous nutrition related penny stock wipeout. Investors should be concerned that NRTI (like TRTC) issued "death spiral" convertible debt (see article on MJ stocks to avoid). The stock went from a peak of $2.10 during his tenure to trading for $0.02 (-99%) when he moved over to become full-time CFO of Terra Tech. Michael James was also Chairman of Guided Therapeutics (OTCQB:GTHP), another 99.9% penny stock wipeout trading <$0.01 (chart). He was also on the board of Nestor, Inc. from 2006 and CEO from Jan 2009. It was a 100% wipeout going to $0.00 and even went so far as having the SEC revoke its registration as a listed company in 2014 (SEC Statement).
The COO, Michael Nahass, filed for his own personal bankruptcy in 2009 listing 0 assets and 1 to 10 million of debts primarily to casinos for unpaid gambling debts (Central District of California, Case No. 8:09-bk 14465-TA) (pg 45 of 10-k). His debts include owing the Bellagio ($457,500 - Doc 24), Mandalay Bay ($347,500 - Doc 24), Caesar's ($705,000 - Doc 19), Discover Financial ($12,375 - Doc 20), and Chase Bank ($60,651 - Doc 21). The Bellagio alleges Michael Nahass was able to run up these large gambling debts by deceiving the casino and showing it that he had sufficient assets to cover the credit it extended to him (Source - Paragraph 7 Case 8:09-ap-01606-TA). From January 2012 to July 2015, Mr. Nahass served as Terra Tech's Treasurer, a very interesting position considering his gambling habit and history of accusations of deceiving casinos with false accounts.
Newest Board Member Alan Gladstone is also not a stranger to bankruptcy court. He was the former CEO of Anna's Linens and managed to take that company into ch. 11 bankruptcy not once but twice (link, bankruptcy 2015, Wikipedia).
Steven J. Ross - Adds to the list of TRTC directors who has had a front row seat to a corporate bankruptcy. Mr. Ross is an Ex VP at Longhai Steel (LHAI), he joined the company in 2012. Three years before the company had its reverse merger IPO (pg 2 of S-1) by Ladenburg in the peak of the China Hustle era. Steven Ross joined in 2012 (10-K pg 32), and the company had its registration revoked by the SEC in 2015. Shareholders lost 100% of their investment. (link to SEC revoking registration).
Canary in the coalmine - Chief Agriculture Officer & Major Shareholder Resigns
Only one current TRTC board member or executive hasn't been linked to previous bankruptcies or shareholder wipeouts that we could find, and that was Ken VandeVrede. Unfortunately for investors in TRTC, he no longer appears to be guarding the hen house. He resigned from the Board of Directors on April 20, 2018, "because of a disagreement relating to the operations, policies, and practices of the company."
Lack of Cash
TRTC's financial health is in a critical state. Terra Tech's recent 10-Q shows it having $4.5 million of cash on hand (pg 3 10-Q) but loss from operations is currently running $6.7m a quarter (pg 4). TRTC was forced to issue $10 million of toxic convertible debt in Q1 in order to pay its bills and issued an additional $5 million on June 12th (debt filing)
TRTC's "Death Spiral" Converts
Likely due to its desperate financial position and lack of alternative financing, Terra Tech has issued convertible debt. This type of toxic convertible debt is sometimes referred to as "Death Spiral" financing. Investors sometimes refer to these as "Death Spiral" converts because the deals are structured such that the debt holder is always able to convert and sell at a discount to the current trading price. This ensures ongoing pressure and further dilution on the stock as it trades lower. In the case of TRTC, the debt holders are able to convert at a 24% & 22% discount when factoring in their interest rate. TRTC has issued two of these highly dilutive debt deals already in Q1-2018 and already issued more in Q2.
TRTC shareholders will face assuming the holders of the existing $45m of converts exercise. At today's price, investors will likely be diluted by 36% to 47% when the convertible holders exercise. This doesn't require shareholder approval. Debt holders immediately have the right to convert to common and sell. If TRTC is deemed to have defaulted, then the conversion discount increases to 41% which is a looming possibility should it lose one of the two lawsuits filed by the vendors that are suing it. The dilution becomes significantly more punitive as the share price decreases.
A 2015 Bloomberg article describes the shady death spiral convert business. As the article mentions, the only real risk to the convertible financier is if they are not able to convert shares to common before the company goes bankrupt. Fortunately for Terra Tech financiers their convertible deal contains provisions that allow them to short the TRTC stock before converting, as long as they aren't Net Short. The deals also contain provisions that allow convertible owners to convert to common shares at a discount immediately after providing financing to the company.
Key Terms of Terra Tech's Two Recent Death Spiral Convertible Debt Deals:
Deal 1: $5 million of Convertible Debt that is convertible for 85% of the lowest daily VWAP in the 15 prior days and a 12% interest rate.
Deal 2: $40 million of Convertible Debt done in $5 million tranches that is always convertible for 87% of the average of the 2 lowest VWAPs in the 13 days prior to conversion and includes a 7.5% interest rate. The first $5 million was sold March 12, 2018, and an additional $5 million was sold on June 12, 2018.
Debt Immediately Convertible at a discount - The debt is immediately convertible to common stock at their discounted rate. (Note 4)
Default - It gets worse! If Terra Tech is ever in default, the interest rate in both Deal 1 & Deal 2 increases to 18% per year and the discount rate increases to 30% below avg of 3 lowest VWAPs in the last 20 trading days (link - page S-32). Thus, $1 million of convertible debt would convert to a guaranteed $1.68 million of dilution for common stock holders if it's held for 1 year.
Default can occur for many reasons including:
Any court judgment against the company >$50,000. TRTC currently has two court cases pending that would send it into default.
Another cause for default is if TRTC delays in issuing shares to its convert holders. "In default if they don't deliver shares to the convert holder promptly (prior to the 3rd trading day after conversion day)." So basically it would go into default if it tries to stop the death spiral.
Constant Selling Pressure - In Deal 2 Terra Tech secured $40 million worth of interest but the lender is going to participate in $5 million increments. This will likely result in constant selling pressure on TRTC stock as it continuously converts and sells its stock from the new deal.
How similar toxic debt spirals played out
Terra Tech's CFO, Michael James, issued toxic convertible debt at his last company, Inergetics Inc. in August of 2014. (source - NRTI S-1 pg 10). Less than 1 year later Inergetics stock had declined by over 99% and was trading for <$0.01
Auditor Issues - Adverse Opinion on Financial Controls
The company's main auditor since 2016, Macias Gini & O'Connell LLP, wrote that it has an ADVERSE OPINION (see below documents) for Terra Tech's internal financial controls. Receiving an adverse opinion is almost unheard of! There are 4 types of auditor opinion, an adverse opinion is the worst.
"An Adverse Opinion is a professional opinion made by an auditor indicating that a company's financial statements are misrepresented, misstated and do not accurately reflect its financial performance and health."
This pours cold water on the bull case that there is an imminent uplisting to the NASDAQ. Nasdaq does not accept companies with adverse auditor opinions, non-independent board of directors, and poor accounting controls.
This lack of accounting controls could be partially explained by TRTC's Director of Corporate Operations having previously been a bartender for the 3 years prior. Alternatively it might be because the CFO doesn't have much support from TRTC's Staff Accountant who was a Barista at Starbucks up until the time they joined TRTC.
The auditor identified flaws:
Risk Assessment
Insufficient personnel to adequately exercise accounting judgment
Lack of majority of independent board members
Lack of controls to identify sources of material misstatements or potential accounting errors
Ineffective IT controls for financial spreadsheets
Strangely, TRTC also hired a second auditor on March 16, 2018, Benjamin & Young, but only had it audit the year ended 2015. We have contacted TRTC management with an extensive list of questions including why it has hired a second auditor but it has not yet replied.
Lawsuits against TRTC employees:
Another recent lawsuit supports our opinion that Terra Tech is mismanaged and poorly run.
Terra Tech v. Vande Vrede family (which includes TRTC employees & board members) has multiple accusations of fraud against its own employees and major shareholders. (Case 8:18-cv-00602-JVS-JDE - US District Court - Central District CA)
Accusations include:
Diverting multiple marijuana opportunities away from Terra Tech and to its own Vande Vrede investments. Some that Terra Tech was negotiating and others that Terra Tech never saw. This shows the complete incompetence of TRTC management as it lost at least 7 opportunities to its own employees.
Having Terra Tech employees produce PowerPoint presentations for the Vande Vrede family personal investment deals.
Not working hard (accused of working less than 30 hours a week).
On the recent conference call, TRTC management mentioned it wasn't that focused on M&A opportunities. However, from the lawsuit it becomes very clear that it has been interested in M&A opportunities, just not ones that benefit the public company.
Opportunities have been diverted away from TRTC Shareholders
The lawsuit mentions 5 different opportunities that Terra Tech employees diverted to their own family office rather than the company: Cultivar, Chill Waze, Summed Growers, CBD Water, and Great Meadows.
Management should have been aware of this since Terra Tech was in active negotiations with one of the diverted opportunities and the Vande Vredes are being accused of even using TRTC employees to produce PowerPoints for their pitches to divert opportunities.
Stock Promotion
Terra Tech has actively engaged in paid stock promotion throughout the company's history. Its current claim to fame is being the largest client by market cap of "Small Cap Voice" - see the disclaimer regarding the paid stock promotion. Other past paid stock promotions by Terra Tech can be seen at hotstocked.com
Factors like the Toxic Debt financing and Paid Stock Promotions are important for marijuana investors to use in determining which companies are more likely to have real promise versus which ones are likely using the Marijuana legalization hype to misappropriate shareholders' money.
Industry sources like "New Cannabis Ventures" run by Alan Brochstein warn their own readers to watch out for companies that have these two telltale signs of a bad investment. Alan has recently recommended buying TRTC so we assume that he is unaware of both the recent toxic debt issues and the long history of paying stock promoters.
Valuation of Business Lines
Even though TRTC's financial controls are deemed unreliable by its own auditor, we analyze each of TRTC's business lines, all of which have been unable to generate profits. TRTC has accumulated a shareholder deficit of $115m (pg 3 of 10-Q). The cash burn has continued and in 2017 alone TRTC's operating activities burnt through $15.9 million. (pg 32).
Blum - Dispensary & GrowOps
Terra Tech currently owns & operates 6 dispensaries (2 in California and 4 in Nevada) with plans to open 1 more. Cumulatively this business line has burned through $13.1m of cash in the last two years. QoQ Growth for the business has gone NEGATIVE too, declining 22% in the last quarter.
Investors should be concerned that this division of the business was unable to make money during a period that it operated with little legal competition as recreational legalization has proven to be a disaster for existing players in markets such as Washington. Black Oak also only received one of the initial medical marijuana licenses in Oakland via paying bribes and has had difficulty securing additional recreational licenses.
With marijuana now recreationally legal, the consumer experience has become increasingly important. This is likely bad news for Blum. TRTC's pricing for product doesn't compare favorably with the competition. The Santa Ana Blum location charges $70 for 1/8 of top shelf LA Kush. This compares to $55 at Med Men whose Santa Ana location is both more convenient to the highway and is less than 1 mile away from Blum. Our own researcher paid $80 (with tax) for 1/8 from the Blum Oak location. This compares too much lower costs on Eaze.com which currently range from $39 to $49 for a premium 1/8 and it is significantly more convenient as they do home delivery. A more complete section on customer reviews of locations is in Appendix B, but those reviews consistently call out complaints of Blum being "Overpriced as Hell" & customers that "Feel Ripped off."
All of the above factors are already starting to impact TRTC's financials. Legalization in California occurred at the beginning of 2018. Since then, TRTC's revenue has declined on a quarter over quarter (QoQ) basis (-22% in Q1-2018). Management highlights YoY growth on its call, but that neglects the major fact that it purchased Blum-Santa Ana in Sept. 2017. Unfortunately, SG&A is increasing as the stubbornly high cost basis has continued to balloon so operating losses have increased 34% QoQ.
Seemingly unsatisfied with a sub-scale dispensary business, TRTC has made the decision move into growing. We believe this is ill-timed. Prices for flower have continued to crater. According to CannabisBenchmarks.com, prices that growers are receiving on the open market sunk to historic lows in June 2018. That is after prices had already declined by ~30% over the previous 24 months
Edible Garden Business - Not Marijuana related - TRTC sells basil, butterhead lettuce and other local produce.
There seems to be trouble trying to ascribe any value on the Edible Garden business. Edible Garden has consistently lost money and currently is embroiled in a lawsuit for violating its lease terms that would result in it being evicted from its facility. The core business is distribution of vegetables to New Jersey grocery stores. Revenues had a massive 52% YoY decline from 2016 to 2017 from $12m to $5.7m and losses have almost doubled. The Edible Garden Division is currently being sued by its landlord, Whitetown Realty, which has alleged it hasn't been paying its rent on time, a claim that has not been disputed by TRTC.
Even before Edible Garden ran into trouble with its landlord, its financials were in deep trouble. It sells low-margin vegetables to New Jersey retailers at a significant net loss
Source (2017 10-K pg F-48, 49 & 2015 10-K pg F-24, 25)
IVXX Business Line - IVXX is Terra Tech's self-developed line of cannabis waxes, shatters, oil, and vape pens. In 2015, Terra Tech claims that it was for sale in over 200 stores/dispensaries (2015 10-K pg 5). We have found 0 dispensaries that currently sell IVXX products outside of Terra Tech's self-owned Blum Dispensaries. In fact, IVXX's own store locator doesn't work. The only 6 listed dispensaries on its website DO NOT SELL IVXX product and 4 of them are actually closed.
Thus, we can only determine that IVXX has been a complete failure of a business line and the brand is currently worth $0.00 as it is not distributed to any other retailers. We find it impossible to believe that consumers would choose to buy IVXX branded product like a vape pen over a Pax one or its pre-rolled over established brands like Island.
Branded Marijuana has become a very competitive business and it is clear by the complete lack of distribution that Terra Tech's IVXX brand is worthless.
Insider Sales
Insider sales at a company are a great indicator that a company is overvalued. Terra Tech's management team has consistently been selling shares selling a total of 21,982,726 million shares back into the market on 83 occasions in just the last 3 years while making 0 open market purchases at the time this was written. It was even willing to sell at prices as low as $0.13 (reverse split adjusted that is $1.91). Furthermore, all those shares sold were either awarded for free via generous stock grants (like the new board member who received a 1m share grant) or via M&A transactions like the related party purchase of Black Oak.
Conclusion
We recommend that investors follow the lead from the Terra Tech Insiders and they sell stock in TRTC. The only risk to the upside we see is euphoria around marijuana stocks, but we believe this business is fundamentally set to burn cash and dilute shareholders until it goes to $0.00. If you are long other marijuana stocks, this provides a great hedge as there is 1.7 million shares of borrow as of 6-28 at the relatively low borrow rate of -11%.
In conclusion and or summary:
-Suppliers and landlords are suing the company for not paying its debts.
-Toxic convertible debt that will cause a Death Spiral for the Common Stock.
-Management team involvement in both past pump and dumps and received its first dispensary license via bribery.
-Management team has a history of bankruptcies (both personal and with companies they have run).
-Resignation of the only board member and management team member not connected to past bankruptcies or stock promotions.
-Fundamentally disadvantaged dispensary business (worse pricing, locations, and customer reviews) in an increasingly competitive market.
-Auditors gave the financial controls an adverse ruling.
-No chance of a near-term Nasdaq uplisting.
-Insider selling.
-Reverse merger that is also a paid stock promotion.
TRTC seems to be in a very unique and dire position due to the fact that it has recently issued Toxic Convertible Debt and also has been not paying its suppliers. Beyond all the bribery, penny stock wipeouts, and bankruptcies both of these things mean that the company could be in an extreme state of distress. The convertible debt will continue to be a negative catalyst since there is a motivated seller of the stock all the way to $0.01. In fact, the lower the stock price goes, the more shares will be issued to the convert holders and the larger dilution will be.
Invest at your own risk!
New Investors if you want to read about trtc and how it has run its insider enrichment scheme to perfection, Read below ...it s all true
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
New Investors read below..how TRTC diluted 500 million shares in 1 year and how they scammed us all for 1 billion shares...leading up to a 15 to 1 reverse split out of no where! Which decreased our shares and dropped the pps from $5.50 (high) down to a steady low range of $2.15 - $2.95 HOPEFULLY IT BREAKS EVEN AND HOLDS AT $4 LEVEL
Then Derek quickly gifted himself $40 million in toxic finance!!!
Wheres the Merger?
Wheres the up listing?
I know "wait for this day" lol its been 4 years ........
New investors should also take into consideration the current financials and past history of this company and its insiders.
Have you guys noticed the only reply to posts pointing out financial facts, shady business deals, and professional moral issues we bring up about TRTC. Is that there is some kind of a alien conspiracy lol
No one cares enough outside this forum or even knows this company lol I just want to share knowledge so new investors do not get their money held ransom for 2 years or possibly taken right out from under them.
THE NUMBERS DO NOT LIE, NOR DOES THE PAST HISTORY OF THIS COMPANY. IT IS ALL PUBLIC KNOWLEDGE.
NEWBIES PLEASE READ...DO NOT INVEST IN THIS COMPANY UNTIL ITS CONSOLIDATES AND CLEANS UP ITS ACT....HERES WHY....
It is true they diluted 500 million shares in the last year
They had close to 1 billion shares outstanding? and only 88 million left before they consolidated and reset the whole insider enrichment scheme that they all created when working together at the brokerage company?
Look at the financials and it all points to enrich insiders only the pps tells no lies
This why the pps has been in the dumps for almost 4 years - These are signs of management not giving a rats behind about shareholders...hence the pre reverse split of 1 billion OS count maxed out
To get an inside look at TRTC’s reckless dalliance with convertible notes, go no further than its quarterly reports. Its 10-Q for the quarter ended June 30, 2017, notes that “during the six months ended June 30, 2017, senior secured convertible promissory notes and accrued interest in the amount of $8,839,084 were converted into 50,710,473 shares of common stock.”
How bad is the impact of TRTC’s convertible note addiction on common shareholders? The table below, which illustrates the rate at which outstanding shares have increased over the past five years, answers this question.
Year TRTC shares outstanding
2012 76.89 million
2013 99.04 million
2014 174.3 million
2015 240.19 million
2016 389.36 million
As of December 11th 2017 903.17 million
Shares outstanding nearing authorized shares of 990 million
In five years, TRTC’s shares outstanding have increased more than tenfold and are now inching dangerously close to its authorized shares of 990 million. This means that going forward there is very limited room for TRTC’s debt holders to convert their debt into new shares. This heightens the prospect that TRTC may default on its debt. In case this happens, shareholders will be first to lose as debt owners will foreclose on the assets. This is the benefit of being a debt holder as opposed to being a shareholder. Debt holders usually have the first claim on a company’s assets in the event of foreclosure.
SO basically making > $250,000 a day and diluting 1 billion shares along with continued toxic financing to anyone willing to give them money for our worthless shares for pennies on the dollar.
THIS IS TH biggest insider enrichment scheme around.
People on this forum keep turning a blind eye to everything
Derek Peterson, Amy Almsteier ,Michael Nahass, and Salwa Ibrahim are laughing all the way to the bank.
Thats great for Derek Peterson....DOes not matter to the shareholders one bit. $2.15 July 2018
Wonder why? read
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
You know what makes people believe in your company and not the nay sayers?
Not diluting 1 billion shares and once you ran out of free money...---> doing a 15 to 1 reverse split for no reason,, no merger, no up list--> just because ..well thats how insider enrichment schemes work.
Also maybe having the insiders not sell most of their shares and take on toxic financing before the reverse split AND THEN AFTER THE 15 TO 1 REVERS SPLIT TAKING ON $40 MILLION IN TOXIC FINANCING LOL HMMMM
WHERE IS ALL THIS MONEY GOING DEREK PETERSON? OR DEREK OPPEDISANO ?
I MEAN SELLING OFF 1 BILLION SHARE STRATEGICALLY AND DOING ABOUT $60 MILLION IN REVENUE
THATS AT LEAST $275 MILLON DOLLARS AND THAT VERY CONSERVATIVE...
YOU GOT MOST OF THE DISPENSARIES WITH PERMITS RIGHT? A COUPLE OF LAWYER BILLS, BASIC BUILD OUTS...ECT
I WILL NET EVEN TRY TO EXPLAIN $50 MILLION DOLLARS FOR BLUM OAK, WHICH WAS IN A EXTREMELY LOW INCOME AREA OF TOWN, AND YET TRTC DOES NOT OWN THE BUILDING? AND PAYS RENT EVERY MONTHE? LOL
This explains alot
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
Man that Norman Gates situation in LV was as dirty as it gets. I agree man. There was a lot of people in on that scam, imho --> even a few board members.
People just do not like Derek Peterson...i never met the man so i can't really say why, but look at his shady and criminal past. People in certain parts of the county do like a slick talking pitch man type of guy. They like straight up men, and Most states in that area can't stand California people coming to their state trying to make it liberal and driving up housing costs ect..
I have people in Oregon and Washington and they can't stand California people moving to their cities.
Anyway ......It was a good thing Derek Peterson was in co-hoots with the Nevada 'Senators son, or he would have never gotten a second chance at those Nevada permits.
You know if the Price per share was equal or doing better than the day of the 15 to 1 reverse split...i would be less critical i suppose .... But just about everything in that article is true...stuff we have been complaining about for years...
Its just things should be doing much better then they are... The revenue sucks, the expenses are way too high...New Jersey is a mess and now its time to pay off thet $40 million dollar loan.....
Derek Peterson is criminal IMHO....Everything he did beforre and during TRTC time has been greedy and sneaky...I do not know how this man is walking upright after stealing so much money from hard working people people, and Michael James as well. He stole every last penny from hard working people who believed his lies with NRTI--> So Derek Peterson hires this guy as his Financial CFO? Really
I mean these are dishonest people... I can see why Salwa and her husband jumped ship now.
I mean if it was 1 thing maybe 2 things ok...people make mistakes, but there are too many dirty deeds going on in TRTC.
Newbies read this article and investigate all claims and you decide.
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
HEY TERRY BOOTH- WHY DO YOU NEED TO KEEP ON DILUTING SHARES AND USING OUR MONEY AS A FREE ATM MACHINE? CAUSE YOU CAN RIGHT? POS CRIMINAL IMHO
YOU JUST GOT DONE DILUTING CLOSE TO 600,000,000 SHARES AND ARE PAYING DOUBLE FOR EVERYTHING YOU BUY...CAUSE ITS NOT YOUR MONEY.
NOW YOU WANT TO INCREASE THE SHARE COUNT , SO YOU CAN DILUTE MORE?
LET ME GUESS THEN DO A REVERSE SPLIT AND CLEAN IT ALL UP AND LEAVE LONG TIME INVESTORS DEAD IN THE WATER..... TYPICAL ..JUST CRIMINAL
I ASSUME THAT THE $200,000,000 YOU JUST GOT FROM THE BANK AT FAVORABLE TERMS IS GOING RIGHT INTO YOUR POCKET TERRY BOOTH, AND THAT YOU ARE GOING TO KEEP DILUTING THE SHARES TO PAY OFF THE BANK NOTE
THIS COMPANY DID 13 MILLION IN REVENUE LAST QUARTE LOL LOL
AND THIS FOOL IS RUNNING AROUND SPENDING, DILUTING, PAYING DOUBLE FOR ASSETS, AND PROBABLY POCKETING MILLIONS OF OUR DOLLARS.
share holders always loose
I am glad a security guard who knows nothing about the companys financials and criminal past makes you happy as an investor lol OMG
Read this my friend
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
Tell me how happy you are as an investor.
$2.15 current Price Per SHare
AC That is a big chance you took today, granted whats $1,000, but im sure you had to work hard for it.
Derek Peterson has made millions of dollars off hard working self believing people.
IT MUST BE HARD TRYING TO BE PUBLIC RELATIONS FOR THIS FILTHY COMPANY..LOL
I FEEL FOR YOU....TURNING A BLIND EYE TO ALL THE LIES AND DECEIT! FOR WHAT?
YOU SEEM LIKE A SMART GUY....YOU CAN DO BETTER.
BUT BACK TO THE GAME YOU WANNA PLAY..LOL AS I WAS SAYING
I would refrain from buying any stock until the dust clears. THE PPS WILL STILL BE IN THE 2 TO 3 DOLLAR RANGE ANYWAY. PROTECT YOURSELF PEOPLE. THIS IS NOT A "BUY CHEAP SHARES MOMENT"
Just like you fought tooth and nail on how there will never be a reverse split and then for some reason changed like a few weeks before it happened. LIKE YOU WERE GIVEN A GREEN LIGHT TO SOFTEN THE BLOW LOL
Then fought with the whole forum how reverse splits are suddenly ok and shareholders end up with the same value.
WELL SHAREHOLDER LOST A TON OF SHARES AND THE PPS HAS COME NO WHERE NEAR THE >$5 A SHARE ON THE DAY OF THE 15 TO 1 REVERSE SPLIT. It is now July 2018
Dilution has started right back up after selling/maxing out 1 billion shares a few months ago.
YOUR REALLY SHOWING YOUR HAND TODAY..LOL WITH THIS DESPERATE ATTEMPT TO PROTECT THESE SHADY CRIMINALS IMHO
EVEN THE MOST STARCH SUPPORTER WOULD HAVE HAD ENOUGH BY NOW... AND AT LEAST VENTED ONCE ?
TELL DEREK PETERSON KARMA WILL GET TO HIM SOME HOW.
YOU CAN'T STEAL HONEST HARD WORKING PEOPLES MONEY AND WALK AWAY SMILING....
90 % of everything he said was public record with links and screen shots, and it was stuff we have complained about for years ?
Its the truth man...This has always been a insider enrichment company run reckless
Now the con is up they ran through 1 billion of our shares with little in return from the under performing dispensaries. So thats why Salwa and her husband really left the company...they know whats going on
You cant run a insider enrichment scam , and rob honest people for years...and then try and go legit and legal
THE PAST FOLLOWS YOU..... DEREK EVEN TRIED TO CHANGE HIS NAME FOR THESE VERY SAME REASONS.....DON'T BELIEVE OTHERWISE LOL
Derek Oppedisano / Derek Peterson your a fraud IMHO
There is no way your hiding from this report........The seeds were already planted.
This guy just stole all of your money people......no recovery from this detailed report
Read this newbies
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
You can't sue for telling the people what is public record lol
The Financial history tells no lies lol
Dam this is a detailed report-->They included screen shots and links
Man i always had an opinion of Derek Peterson ( real name Derek Oppedisano) being dirty con man..but never knew the full extent of what public records prove..... dam.....this criminal is going to steal all of our money....
Just read the link below newbies
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?page=20
WOW! They documented everything my friend lol Even with links sometimes...
This is what we have been telling you about for years!!!!!!!!!
"If you had $51.5 million and wanted to invest in Oakland in 2016, you could do two very different investments. You could either pay the combined annual salary of Steph Curry, Klay Thompson, and Draymond Green for a season (and still have $7.4 million left over) or you buy a single marijuana dispensary 100 meters from a homeless encampment that was 12% owned by TRTC's CEO. TRTC chose the latter."
Guess thats were DP got his new 3.5 million dollar Beach house
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?dr=1
We just lost all of our money ......Derek Peterson is going to walk away with everyones retirement fund and savings....... someone has to do something about this....wheres the justice? in this? Do we call the SEC? or the FBI?
Wow...holy smokes it looks like i am going to all my money from this pos Derek Peterson. IMHO
This article is crazy....This CEO needs to address the shareholders and stop being a coward.
https://seekingalpha.com/article/4184736-terra-tech-complete-smokeshow-questionable-management-poorly-run-business-dilution-risk?dr=1
Exactly...nothing makes them special or stand out....that a big company with deep pockets couldn't complete and do better in 1 year lol
Derek Peterson is failing miserably.....hence why Salwa and her husband left the company and NJ boys are suing Derek, because they got screwed over..read the reports people.
I mean Derek flat out lied to share holders and once this criminal ran out of diluting 1 billion shares ! Our Money! he did a reverse split lol without any merger or up list lol
Then immediately afterward...like a slap in the face approved a $40 million dollar toxic finance deal lol
For what 8.5 million in revenue and 10 million in expenses? really? where did the all the money go?lol
HMMM
Yes Sleeper...every move being made is a strategic play. Just look at the history of this company.
Please do not make me write it all out lol i'm tired man lol
Just admit for once how disappointed you are in this company...look at the financials, the share price, the dilution, and toxic fins..... The lies about Merger or up listing concerning the Reverse split.
The hidden information about IVXX batches being tainted, while they sold millions of shares before the quarterly release. That alone is criminal lol
If the PPS was $10 post reverse split....and the 1st quarter numbers showed promise...
I would be honest and say...hey things are going good.....everything excuted for a good reason
BUT JUST FOR ONCE STOP AND ADMIT THINGS ARE TERRIBLE WITH THIS COMPANY NOW
$2.1 PRICE PER SHARE? THATS .14 CENTS PRE REVERSE SPLIT?
USE YOUR OWN LOGIC...WOULDA COULDA SHOULDA
LOOK AT THE SHAREHOLDERS WORTH CRUMBLING