Blum Holdings Inc (BLMH)

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MAJOR CONCERNS IN $TRTC FANTASY LAND...

On March 29, 2011, Dhar Mann and WeGrow Garden Supply LLC filed an Individual and Corporate Complaint in the Superior Court of the State of California, Alameda County, File No. RG11568327 (the “Dhar Mann Complaint”), against GrowOp Technology alleging, among other things, that Mr. Mann is a 37.5% owner of GrowOp Technology and claiming damages of approximately $2,200,000 in connection with a purported agreement to sell Mr. Mann shares of common stock of GrowOp Technology equal to 37.5% ownership in GrowOp Technology. The Dhar Mann Complaint is also seeking an order from the court prohibiting GrowOp Technology from selling any additional securities or becoming a public company. GrowOp Technology denies, among other things in the Dhar Mann Complaint, the existence of a purported agreement to sell Mr. Mann shares of common stock of GrowOp Technology amounting to 37.5% ownership in GrowOp Technology or the damages owed. The trial has been set for December 2014. To date, the parties have not exchanged discovery.


The Company had a loss on issuance of derivative in the amount of $1,346,000, an increase of $703,000 versus $643,000 in the prior year due to more convertible notes issued in 2014. This resulted from the conversion of notes following a promotion run ending in the month of March, 2014. This


TRTC issues a lot of convertibles and promissory notes in order to finance operations. Although a lot of these deals have matured, it is a practice to be cautious of in the future as the company looks to turn cash positive. The Company’s future success is dependent upon its ability to achieve profitable operations and generate cash from operating activities.


Warrants outstanding as of June 30, 2014 have an outstanding balance in the amount of 15,885,284. These warrants are reserved for financing future operations.


Terra Tech Corp has incurred net losses and has accumulated a deficit of approximately $24.3 million as of June 30, 2014. The Company has not been able to generate sufficient cash from operating activities to fund its ongoing operations. There is no guarantee that the Company will be able to generate enough revenue and/or raise capital to support its operations. These factors raise substantial doubt about the ability to continue operations without issuing new shares. At this stage in the Company’s development, revenues are not yet sufficient to cover ongoing operating expenses.