Unrivaled Brands, Inc.

Stuart Smith - Investor Relations Derek Peterson - Chairman of the Board, President and Chief Executive Officer Michael James - Chief Financial Officer

All right. This is Stuart Smith with SmallCapVoice.com, and I'd like to welcome everybody to the second quarter 2015 earnings release conference call and Q&A session with Terra Tech Corp.

We're going to be joined by the Chairman of the Board and the Chief Executive Officer of the company, Derek Peterson; as well as the Chief Financial Officer of the company, Mike James. Now, within this statements and in the Q&A section there may be statements that are deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Words such as anticipate, believe, estimate, expect, intend and similar expressions as they relate to the company or its management, identify forward-looking statements. For a full definition of what are forward-looking statements, you can read any of the press releases and find that at the bottom of them.

So let me first introduce, Chairman of the Board and Chief Executive Officer, Mr. Derek Peterson.

Derek, welcome. Derek you may need to unmute your phone.

Mike do we have you there.

I am here.

Okay. Let's go back down to Derek.

Let me look at the queue here. I do not have him unmated.

That is my fault Derek. Sorry.

You are unmuted now. How you're doing Derek?

I'm good Stuart. Can you hear me okay.

I can hear you loud and clear. I may even ask you to turn your phone down just a touch.

Impossible, but I'll try.

All right, very well. Well, anyways, Derek, sorry about muting you there.

Let's go ahead and open it up to you first with your statements. Go ahead.

Thanks, Stuart. Thanks everybody, welcome to our second quarter 2015 earnings call.

A couple of housekeeping issues. First, let me pre-apologize, I'm losing my voice.

I'm going to struggle through this a little bit. So sorry for the extra noise on my end.

Secondarily, we're going to start doing these conference calls on a quarterly basis, and that's part of our commitment to the shareholders to start becoming more transparent and start becoming more available, as time goes on. So we've made a commitment and very least to start doing these on a quarterly basis.

And we're also going to be announcing some shareholder meetings, hopefully at our new facility in Las Vegas towards the latter part of the year, and then another one back at our farm, early spring next year as well. With that being said, why don't we jump in.

I thought I would just run through each business segment just briefly. And then I'll turn the call over to Mike James to talk about our operating results for the second quarter 2015.

So let's start with Edible Garden. During the quarter -- and I'm going to talk a little about what happened in the quarter.

I'm also going to discuss a little bit about some of the things that are going on right now as well as through the remainder of the year. Edible Garden in the second quarter, we were fortunate enough to have some Walmart expansion, which was really helpful to us.

They expanded us to five distribution centers. We launched a couple of new products into our existing supply chain.

That was one of the things that was the easiest path of least resistance for us, was not only of getting into new retailers, but taking the existing retailers and adding different product lines that we can sell into that same infrastructure. So not only basil, tarragon are regulated into the normal herbs, as well as the lettuce, we're now experimenting with things like a one single potted plant that has multiple types of lettuce.

So it's living salad mix. So we've been getting good feedback from the stores of those.

As the acceptance comes in, we'll end up broadening the product line up before us as well. We've also started doing things like testing our products for nutrient densities.

We're trying to find ways to differentiate ourselves and segregate ourselves from the other products that are on the shelves. We had spoken a long time ago about the egg wins best model, which is something that we've looked too for Edible Garden.

It was a brilliant idea to take a commodity item like an egg and turn into a specialty item by making some adjustments to how the chickens are treated and what they're fed, and ultimately putting out a good product into the supermarkets and charging a premium for it. We want to be able to segregate ourselves on the Edible Garden line, using some of those differentiating factors as well.

We've expanded our Kroger footprint in the mid-West to 85 stores, which is a win for us, and we're going to continue to expand the brand through the remainder of the year. I don't think there is a quarter that's gone by that we haven't seen sequential growth in that area, as well as sequential store count growth.

So that's something that's very pleasing to us. And we also announced to jump over into cannabis side that we've retained a firm in New Jersey.

We'll give some further updates about this going forward. But we're going to be putting our put hat into the ring to try to get a medical cannabis cultivation permit in New Jersey, as well as a dispensary permit in New Jersey, using the existing infrastructure we have at Edible Garden.

That was always one of our synergistic aspects of making that capital investment back in New Jersey, was the ability to use that for multipurpose. It was not only the production of Edible Garden, but potentially the production down the line for cannabis.

And we'll keep shareholder apprised of the developments as time goes on. IVXX and the lab, so how we speak about those two things collectively, because they're essentially one arm in and of themselves.

Over the second quarter, we've developed a pretty extensive marketing team. We have developed some new products, so we're not just doing waxes and shatters, and oils, we're doing things like, some of the names are silly and some new people may find them funny, but things like cake batters and those types of things.

The market is changing, the consumer sentiment is changing. They're experimenting at a lot of different products out there and we're trying to bring some new and exciting things to the table to make sure we're differentiating ourselves from everybody else is producing concentrates in the California market, but as we've done so with the packaging, and again we want to do so with the product itself.

We're also focusing on the California marketplace, which has some legislation coming up in the 2016 timeframe that may change the not-so profit status to for-profits. So we're also working with legislative bodies, we're trying to put our efforts behind making sure that California lands for for-profit status, which is a pretty big paradigm shift for our ability to operate there.

And Q3 run rate, which is we see a lot of, as Stuart has mentioned, that we've announced over the last couple of few weeks into Q3, we are actually seeing the run rate close to 300% of what we've seen the run rate or the produce rate in Q2 2015 as well. So we're seeing nice growth quarter-over-quarter there as well, so we're excited about that.

Again, I'm going to run really quick through what's going on Nevada, and bring some people up-to-date there, but I am committed to putting out a broader, more detailed overview of what's going on with each one of our permit applications, permit processes in the Nevada marketplace, so I'll be pretty broad here, and I will, like I said, commit to getting something out, there's a lot more detail in a not too distant future. Las Vegas dispensary, we've completed design, we've completed the demo and the abatement there and we're currently working with the architectural companies and the general contractor to finalize our construction documents to put out to the city to get approval to start the actual fabrication inside, but it's blank shell right now, which we're excited about.

On the construction part, we should be able to brief through pretty quickly. I'm not going to adjust any of the timelines there, because we seem to be on target.

We expect to began operation there again in Q4, pending final approval from the state and their final audits and those types of things. Our County dispensaries, there's an interesting change happening there.

MediFarm has resubmitted their land use and business applications for both the proposed additional locations. We're awaiting the September 2, Clarke County Commissioners meeting for final approval, so we've got a second shot, which again we've been working pretty diligently on.

Wish to get a second shot in opening up those other two dispensaries, where we were approved by the state, but not by the local County division. So we've got a second shot at that and we'll keep investors and shareholders apprised of that, as that comes to fruition as well.

Our Reno Dispensary, we've submitted our business license application to City of Reno. We're currently finalizing everything through our architectural company and general contractors doing the final designs and layouts and submitting those.

We expect again to begin construction there in Q4 2015. We expect to begin operations probably in Q1 2016, pending again the final approval from the state and local jurisdictions as well.

Our Clark County cultivation and production, we're currently working again with the architectures and the contractors there to finalize our designs. One thing that we've been doing, I think hinted too on a prior call, was we've been testing some different technologies out.

And we just finished our second test there in terms of utilizing some LED technologies. And we ended up with better yields and better THC and other cannabinoid concentrates out of the product, which actually surprised all of us.

That being said, there's a huge economic savings for us, both from a industrial investment standpoint and non-growing investment standpoint. In terms of paying for the energy costs, LED has significantly reduced the cost of energy in these types of facilities.

In a perfect world, we would love to go there. We're always concerned about how it would affect the quality of the medicine.

And what we found so far is we've actually appending up with a better product working with this company, which we hope to be able to announce something in a not too distant future. So that being said, that's the only thing that's holding up the finalization of the construction there, because if this does work like we think it's going to work, instead of having a broad flat layout in this facility, we can actually go vertical, we can stack the trays very close to one another.

We can use every cubic foot rather than just the square foot in the facility. And the production levels and the productivity levels we'll get out of that square footage, will be far exceeded, while we were modeling out when we entered the process in the first place.

So I'm going to tail into that and we should have that finalized shortly. The Washoe County cultivation and production, we submitted our business license application there.

And again, we're currently analyzing what the market dynamic is going to be for size and scope. So we'll keep you full apprised of our development up there as well.

And again, the technology developments that we're investigating for the Clark County cultivation facility, if we decide to go this route, it will be the same things we implement up in the north area, when we decide to start construction there. Some other key developments in the quarter, again, we talked about having some new dispensaries in California.

During the second quarter, we added 60 retail dispensaries. We applied for a $300,000 clean energy grant, and we put out a press release regarding that.

We were subsequently awarded that in Q3 2015, and we have other portions of those payments that will be coming in over the remainder of the year, which we're pretty excited about. We expanded our line of living herbs to five Walmart distribution centers, again broadened out our product line up there.

And then we also began construction on our Western Ave dispensary location. So like I said, pretty broad overview.

I wanted to really take this call and cover the quarter as it is and give you a little bit of idea of where we are at in terms of developing some of the other business segments. But I will, again, be committed to putting out a more detailed overview of some of these over the next couple of weeks or so.

With that being said, let me turn the call over right now to Mike James, our CFO, to discuss the financial results for Q2 2015.

Thank you, Derek. For the six months ended June 30, 2015, total revenue was $5,788,000; Edible Gardens generated $5,235,000; Equipment sales were $120,000.

The cannabis division generated $432,000 of revenue for the first six months. Revenue for the same period in 2014 is comprised of sales of $4,272,000; Edible Garden generated $4,153,000; and equipment sales were $119,000.

The cannabis division did not generate any revenue in 2014. Year-over-year total revenue increased $1,516,000 or 35%.

Gross margin for the six months ended June 30, 2015, was $491,000 or 8.5% versus the prior six months ended June 30, 2014, a negative $98,000 or negative 2.3%. Management continues to focus on the gross margin expansion.

Selling, general and administrative expenses for the six months ended June 30, 2015, were $5,693,000 compared to $6,096,000 for the six months ended June 30, 2014, a decrease of $423,000. The decrease was primarily due to a $117,000 increase in depreciation for additional farm equipment used by Edible Garden; a $216,000 increase in advertising for the promotion of the IVXX brand; a $111,000 increase in the allowance for doubtful accounts; a $34,000 expense for directors and officers liability insurance.

A $1,074,000 increase in compensation, due to an increase in the number of employees; a $174,000 increase in consulting fees related to the cannabis business; a $47,000 increase in filing fees related to the proposed construction of MediFarm facilities; a $145,000 increase in rent for the additional properties leased in connection with MediFarm's proposed cannabis business in Nevada. These increases were offset by $260,000 decrease in directors' fees.

A $54,000 decrease in travels cost, mostly due to the Nevada permit in the prior year. Additionally, there was a $201,000 decrease in legal and accounting expenses, primarily related to the preparation and filing of the registration statements and reviewing of the contracts performed in the prior year.

Warrant expense decreased over the prior year by $1,832,000, primarily due to less warrants issued in the current period. The net loss attributable to stockholders for the six months ended June 30, 2015, was $4.8 million or $0.02 per share compared to a loss of $9.5 million or $0.06 per share for 2014.

Cash on hand at June 30, 2015, was $2,130,000 compared to $847,000 at the end of December 31, 2014. At June 30, 2015, net accounts receivable totaled $501,000 that compare to $417,000 at the end of the fiscal year ended December 31, 2014.

The company had $556,000 of net inventory on hand at June 30, 2015. The inventory was broken down between raw materials of $346,000 and $210,000 work in progress.

Our negative working capital was $2 million as of June 30, 2015, an improvement of $2.4 million over December 31, 2014, which had negative working capital of $4.4 million. At June 30, 2015, the company had outstanding warrants, exercisable for about 30.1 million shares of common stock with an exercise price ranging from $0.06 to $0.85 per share with an average of $0.19.

If exercised, these warrants would bring in about $6.2 million in cash over the next four years, assuming full exercise. At the end of the six months ended June 30, 2015, the company had 233 million common shares outstanding.

During the third quarter of 2015, debt and accrued interest in the amount of $648,000 was converted into 8.6 million shares of our common stock. During the third quarter of 2015, we issued 9.5 million shares of our common stock with a value of $805,000 to certain directors, officers, consultants and council for services rendered.

We had accrued $590,000 for the first six months of 2015, with a balance of $215,000 being recorded in the third quarter of 2015. During the third quarter of 2015, we also issued 800,000 shares of our Series B preferred stock with a value of $366,000 through an officer services rendered.

We had accrued $291,000 for the first six month of 2015, with the balance of $75,000 being recorded in the third quarter of 2015. In this third quarter of 2015 pursuant through an effective registration statement, S1, the company sold 1.5 million common shares for a net amount of $220,000.

During the third quarter of 2015, the company acquired two acres of land in Spanish Springs, Nevada, for total consideration of $344,000. The company intends to build the cannabis growing facility on the land that will support a future laboratory and dispensary.

Additional details can be seen in our Form 10-K as well as other subsequent filings files with the Securities and Exchange Commission. I will now turn over the call back to Derek.

Thanks, Mike. I appreciate the update.

One of the things I said, we committed during these conference calls on a go-forward basis, and every conference call we're going to allow an opportunity for questions and answers. So I'd like to wrap up this portion of the call, and begin the Q&A section, because I always feel like that's the best way to kind of hear what's going from the shareholders and investors, and be able to address those questions directly.

So on behalf of the management, on behalf of the Board of Directors and all of the employees here at Terra Tech, thank you for every caller that dialed in and took the time to listen to us today. And with that, I'll turn it back over to Stuart.

Thank you, so much.

Thank you, Derek. I do have the questions that we've compiled and I do wanted to say, again, thank you to everybody that took the time to write them, especially some of the shareholders who went ahead and gathered questions on behalf of other shareholders as well.

So I did get as many of those in as I could. So that way we don't have any redundant questions.

Let's get right into it.

What are we doing to get funding, so that we can become profitable? Current laws and hurdles are in the way, true, at New Jersey, Florida and New York, but there must be something more we can do?

I think Mike, you can comment if I leave anything out. And I feel pretty comfortable where we sit today in terms of funding.

We never took the additional convertible notes from Dominion, because we were able to get effective on our equity line. Again, for those who haven't heard my discussion about the equity enhancement program we did with Magna, the one reason I like that kind of equity facility is it's on our control.

We can raise money and sell those securities when we want to, when we feel the price is fair and adequate, when we feel the liquidity is there, we can determine how many shares that we want to sell at any given time. So that's completely under our control, which is one of the reasons, we went through that process of filing an S1 to get that approved.

So we've got our 57 million shares effective right now. So at $0.10 or $0.15 a share, depending on where we are, any given day that's $6 million to $9 million of financing plus, plus, plus.

In addition to that, and if you refer back to one of our prior filings, we raised a little over $2 million in straight equity with a bit of a warrant coverage associated with it. Mike, I think it was 13.75% or something right around there.

Yes.

So that was a great piece for us, and that was one of the reasons we were able to defer taking additional convertible notes. So the remainder of the convertible notes that are on the books that are being converted out at a pace where the market seems to be able to absorb, Dominion has always been a good seller.

They've been a good financing partner with us, which is why we are stuck with them since day one. So again, I feel pretty comfortable where we're sitting from a financing standpoint right now.

And I think we're going to be able to reduce a lot of expected cost associated with Nevada when we start to dip in some of these other technologies. And we're able to schedule and space-out the cost of development of the second cultivation facility up in Washoe a little bit, because if we get the level of productivity out of the first cultivation facility, we don't need the other one online at the same time.

So the beauty of that is we might be able to build the remainder of them out with some of our cash flow that we're generating from the other facilities. So all those things combined, I feel pretty comfortable where we sit from a financing standpoint at this point in the game.

I mean we would all love the same financing that's available for NYSE company or a NASDAQ company, the reality is we don't live in that world. But I feel like as in the world that we do live in and over-the-counter world, the micro cap world, I feel like we're getting the best of refinancing at this point that's available to us.

Let's jump into another one about that part of the country. I see that moves are being made on TRTC's part, New Jersey media campaign for a license.

But how are we dampening down on expenses or getting funding to keep us a float that won't drown us again like Magna? So kind of flipping the script on that last question may not see it that way.

And I know you touched on a lot of that right there about Magna. But let's talk a little bit about the dampening down on expenses part.

We don't have any convertible notes with Magna. Magna is the equity enhancement, again, which is in our -- the puts on that are in our control.

So again, dampening down on expenses, I think as Mike stated, that's one that our largest focus is. But one of the difficult size of operating on the cannabis division is, in a normal world if we made widgets, we would look around the country and say, okay, this is where we want our factory.

We're going to build our factory out. What are the tax incentives, what's the hiring pool look like, what's the cost of living look like.

And then we would distribute those widgets across state lines, all area of the country, and try to get as many retailers as possible. In the cannabis world, we don't have that luxury.

And we don't have that luxury, because every state's laws are different. We still have legality.

And then actually within the states themselves a lot of county jurisdictions have different rules and regulations. And California is a great example of that.

What that means to us from an expense standpoint is when we hire things like lobbyists or consultants or attorneys or CPAs or whatever it happens to be, the specialized in this industry to help navigate us through permitting process or operational concerns and those types of things. In appropriate world we would hire a team of people that would represent us from a national standpoint, but even within California we may have to hire somebody that focuses on Oakland.

We may have to hire somebody that focuses on Los Angeles. We may have to hire somebody that focuses on Clark County and Washoe County.

And those types of activities layer on expenses more so than traditional businesses have to deal with. The headwinds that we deal with in this industry far exceeds any other headwinds I have ever experienced in any other industry.

We have all the same headwinds and risks like every other operator has. We've got economic risk, financing risk, execution risk, employee risk, those types of things.

To layer on that, we've got political risks and all of the other things that I talked about as well. And those are the things that become, I don't want to say prohibitively expensive, but significantly expensive.

So while we have an eye on expenses and while you've seen in our financial results, as we're making significant attempts to reduce those on a quarter-by-quarter basis, we also have an eye towards growth. And growth means we have to hire lobbyists and attorneys, et cetera and so forth.

I mean we could stop the growth of the company at this point. We could streamline everything.

We could cut all the extra curricular expenses and focus on profitability, but then we'd be a company that's doing x amount of million dollars per year, maybe get the thing profitable, but we would sacrifice growth. So there is always that delicate balance and delicate dance of moving upstream, and that's where we're at right now, we're not happy.

We're certainly thrilled with the progress of the quarter, but we are no where satisfied with where we're at right now, and there is a lot of expansion opportunities. We're going to have to spend money to do that.

But we've got a lot smarter about it, and we've got lot more frugal about it. And we've been harder negotiators about it, because the business, the industry quotes this progression point or this maturation process.

There's more potential CPAs out there, there's more potential consultants out there, there's more potential attorneys out there. So it's not just one guy that we have to negotiate with.

So now we have the negotiating power to get lesser fees and those types of things, as we enter into these different marketplaces. And New Jersey, we know it's probably a relatively low cost of capital for us, because we've got a pretty significant footprint.

We've got good political connections there. We've contributed back to the community significantly, and those types of things.

And the infrastructure is relatively already built, minus some changes we would have to make to go into business. So New Jersey is low-hanging fruit for us, and we want to make sure we get exposure there as soon as possible.

And we're going to put the money forth to be able to do so. Sorry for the long-waited answer, but I just wanted to kind of give a broader thought process and understanding to shareholders of what the landscape looks like when you're operating in the cannabis community.

Understandable. And that will help with some of the upcoming questions.

What is the current status of the investigation and/or litigation of Anson Funds and Norman Gates for alleged manipulation in the Clark County voting process and share price? Go ahead Derek.

Thanks, Stuart. One, we're rolling out is the lawsuit is completely ready and drafted.

We've finalized jurisdiction being New Jersey, and we're narrowing down two corporate council there. Again, going back to the last question of negotiating fees and those types of things, we've narrowed it down to two different law firms to step up and carry the case for us in New Jersey.

And we should have resolution there, I would imagine in the next three or four weeks or so.

Are there any upcoming acquisitions shareholders should expect to see?

I can't comment on that. But as I can say, we're always looking for accretive transactions.

And I think I've said before, we're always trying to balance our short game with our long game. And our short game is investing in things like Nevada and building the brand.

And a lot of those things come with significant upfront expenses we're paying out down the line, and we're trying to balance that by finding short-term accretive activities and short-term accretive investments and acquisitions that can provide immediate cash flow, immediate revenue and immediate profitability. And then again, the nice thing about the industry going to this maturation process is, back up two or three years ago, there just wasn't a lot of potential businesses to acquire and now there were all pre-revenue, they were startups.

They were hindered with their own expenses and overhang and those types of things. So where we're at today, there is actually companies out there that are revenue producing.

There is some that have great cash flow associated with, specifically those that touch the planning, we've made that decision as everybody knows across the green line, which really opened up the potential M&A market for us. So it's something that we're -- we're in discussions as we always are with companies that exist out there.

But we can't talk about that and it ain't going to anything, until we've actually decided and signed off on something material. But shareholders will know through a filing and we will make sure to communicate that out.

But we are very focused on the short game and that short game is finding accretive acquisitions and mergers.

How did the shareholders benefit from IVXX? And how will the brand be able to cross state lines in the future to become more profitable?

I'll take the second part of the question first. The brand can always cross state lines, the product can't cross state lines.

So while we put up our production facilities and we're producing extracts and Nevada will be doing so under the IVXX brand as well. So again, we can't ship product as sales.

The current law allows for right now, but we maybe in a position in the future to be able to do that and that would be great. But as it sits right now, the brand can certainly cross state lines and we'll build the brand out in all the markets, and we're fortunate enough to win permits at.

And I talked a little about the not-for-profit versus the for-profit legislation that's in place right now. So everybody understands, California is not a non-profit state, it's a not-for-profit.

So you don't have to operate as a 501(c)3 or anything like that under those same parameters or rigid over site. What it essentially means in the spirit, otherwise you can't operate in that industry for the pure motive of making a profit.

What you can do is build the business out, distribute the product out to patients. The cash flow that comes in you can certainly use that cash flow to continue to build the brand out.

And it's a new brand. So we had no expectations of significant profitability out of that brand in the short run in anyways, because we're continuing to reinvest in the brand through expansion throughout California, which is a gigantic market.

It's the largest medical cannabis market and largest cannabis market in the country. So even if we were able to operate for-profit, we would continue to be pushing money into this particular brand for expansion in the California marketplace regardless.

So while we're doing that, while we're expanding our brand footprint, our retail footprint, we're also working from a legislative standpoint and to do our best to make certain that the state ends up to be a for-profit state, because it's just makes more sense. And it's a better economic piece of legislation, and free markets are what this country are built on.

And I don't think we're getting much push back from those in California that are the stakeholders and watching this legislative fees go through. I think that's probably a likely scenario that we end up with here in California.

So as we operate right now, the cash flow that we generate, we can all reinvest back into the company. We can use it to build out other facilities.

We can use it for brand expansion. We can use it for marketing and those types of things.

And all that means at the end of the day is less capital that we have to raise. We don't have to sell securities to raise capital due to those activities.

We can take the cash flow from those activities and reinvest them to do more of those activities. And that's what our focus is on right now for next 24 months is to build and expand that brand in as many markets as we can throughout California, through both the grassroots efforts, social media, we're looking at television commercials and things like that.

We're really in product placement. We're really looking at things that segregate us from every other player out in the marketplace right now.

Again, we've done that with our packaging and I think the quality of our product, but we want to do so more with other activities in the California marketplace. And then, obviously, in the Nevada marketplace, when we come live there as well.

What's the latest update and timeline on dispensaries, growing facilities and production facilities for operations in Nevada? I know you covered this fairly extensively early on, but anything else you want to touch on there?

Nothing has changed at this point from the public filings that we've put out and the statements we've made publicly prior. The only thing that we don't have control over is, after that we're done, is coordinating the audits and the final permitting from the localities as well as the states.

So that's the only variance we have no control over once we're done in terms of getting from point A to point B. Other than that, like I said, I've made a commitment over the next couple of few weeks to get out a more detailed report of what's going on at each location in Nevada, and I'll make sure that I do that, so that investors can have a good understanding of what's going on where and some of the timelines and those types of things.

So I'll get that out and shareholders can have a better or more broader understanding of what's taking place there.

You had CO2 extractors then sourced for Southern California and Nevada operations in production of IVXX cannabis extract?

Again, the short answer is, yes, for Nevada. The technology in this industry changes all the time.

So while we source these types of things, until we actually need them to build out this facility, we're certainly not putting deposits down, because we may wake up one morning, and there maybe a new machine that's half the cost with twice the output. So while we constantly look at some of the technological advances that take place, like the lighting and the cultivation facilities, until we have to spend the dollar, we're not spending the dollar; until we have to put the deposit, we're not putting the deposit down.

So we certainly sourced the equipment and we're testing a lot of different stuff. We work with different providers to test before we actually implement and we're fortunate enough to have existing operations, where we can do that rather than just rely on what we're being told from vendors.

So yes, we certainly sourced, but again, we could wake up one morning and have a different level of technology and a different level of pricing that exist. So we don't want to walk ourselves into that, until we're at a point, where we actually need the product to produce.

When will the updated terratechcorp.com website be launched?

Yes, I think I get more emails on that than any other thing in the company. So with all transparency, we actually had a firm develop a new website for us.

We weren't happy with the finished product and we decided not to launch, because we just -- that's how we do things. We don't do things partially, we do things to a level that we're comfortable with before we put them out.

So we're engaging a new firm to take what was done and take it to the next level. We wanted it to be an interactive and informative experience when people log on to our website.

So our hope is to have something over the next 60 days. I'll have a better idea of that when we get the final schedule back from the new web designers, but again we haven't made [indiscernible] get that out, we've worked done it.

We weren't happy with the finished product and we didn't want to put it out there.

Now, what is the average quarterly revenue from one dispensary, so we can engage future growth?

That's such a hard question to answer, and it varies. In the California market, you may have a dispensary that's doing $20 million or $25 million and 5 miles down the road you may have a dispensary that's doing $1.5 million.

A lot of it just comes down to the types of products that are available, the service, and those types of things. So it's just, that's a very, very difficult question to answer, just because there are so many variables and brand recognition and patient loyalty and those types of things.

For Nevada, to me, it's going to be even more challenging the kind to forecast, because we don't know what that marketplace is going to look like, we don't know whether the prices for the products are going to settle from a retail or wholesale standpoint, so a lot of that's going to be, some things we have to wait and see what it looks like. And again, that's one of the other things that we're working on from a transparency standpoint is putting out some forecast to take into consideration what we think Nevada is going to look like.

And also remember too, Nevada has recreational, that looks like it's going to make it on to the ballot and that changes the dynamic pretty significantly, being the tourist destination that it is. And that's one of the reasons we're pretty excited about having all the locations around the strip that we have.

If that takes place, we're in pretty good position to be able to, especially with additional locations to monetize that.

Now, what type of ongoing financing is currently in place and when will the PIPE financiers be out of the picture?

I could never tell you the answer of that. We haven't done any convertibles, since the early part of the year.

We're going to be relying on the equity enhancement program and any other private capital that we can bring in straight equity that we can bring in. We're fortunate enough to get a few hundred thousand dollars from the grant.

We've got another payment coming in on that, I think in the next 30, 45 days or so. So again, we've been pretty fortunate with financing and quality financing over the last couple of quarters with the world that we live in.

So I don't see any changes to that going forward. And again, as time goes on our financing gets healthier.

And we negotiate harder, as we perform on our side we negotiate harder with those finance us, so those transactions become less dilutive.

That might need a crystal ball to answer, but its back to the for-profit section as well. When will Terra Tech sell its first for-profit cannabis?

Nevada will be the first for-profit cannabis and we should have that dispensary opened well into Q4. We've been -- even our own conservation facility won't be set up and our own production facility won't be setup.

We have met with and we are working with several other facilities that are going to be open ahead of us, and our intent is to shown our stock and Nevada will be our first for-profit and then ultimately in California, if the legislation lands where we hope and think it's going to land, will be in a great situation here with broad product expansion, broad brand recognition and a for-profit environment.

Derek, when can we expect to see an independent Board of Directors, specifically overseeing the yearly bonus?

One of the commitments I made to shareholders for this year was to change lot of these things and to kind of position the company for future uplifting and make sure that we have the internal dynamics that we need to get from A to B. Those are things like adopting a Code of Ethics, those are things like putting the other Compensation Committee and an Audit Committee, and Compensation Committee would tie into that, not so much an independent Board of Directors, and much of it would be the Compensation Committee that goes over that.

So we will make the commitment to have those three things, the Code of Ethics, the Audit Committee and the Compensation Committee done prior to yearend. And as far as a completely independent Board, that's something that we're working towards and we've got a shortlist of people.

And we're trying to add more potential suitors to that and that's something that we can't talk about on a go forward basis, until it comes to actually to fruition we file. But we are certainly always talking to potential directors that that can actually bring something to the table from a synergistic standpoint as well, not just bringing independence, but bringing some sort of operational synergy or functionality synergy to the company as well.

So it's something we're focused on, but we are getting those other three things done between now and the end of the year. End of Q&A

That concludes our Q&A portion. Don't know where we're getting that, I'm getting a hello coming in.

But any ways, regardless of that, Derek, any closing thoughts or comments for the listeners right now and your shareholders and investors?

Well, I just want to give a lot of the thank to everybody for their time to listen in and we are committed to doing this on a go forward basis. I will put together some shareholder meetings in both Las Vegas, as well as back at our farm in New Jersey.

We've had a lot of technological advances over there over the last year. And I think for those that have been there before, it will be an entirely different view of what we have done there from a functionality standpoint now, so we want to make sure we do one of those come next spring and give people a chance to come out and talk to management, meet us, see the facilities in both the cannabis as well as the produce side.

Other than that, again, I just want to thank everybody on behalf of the Board of Directors, on behalf of the executive team, as well as all of our employees for the coming shareholder, but taking the time to listen today. So thank you very much.

All right, everyone that concludes our call for today. I do want to thank everybody for calling in.

We had over a 150 phone callers in here today. We also received quite a few questions, and I think we've got a very good cross-section of those questions in here today.

I want to thank Derek Peterson, once again, Chairman of the Board and Chief Executive Officer, as well as Mike James, the Chief Financial Officer. Again, this is Stewart Smith of SmallCapVoice.com.

Thank you so much for listening.

Thanks everybody.