Publicly Traded Ancillary Cannabis Company Warns About Its Ability to Survive as Both Independent Directors Quietly Resign

Surna (OTC: SRNA), a provider of HVAC equipment to the cannabis industry that generated revenue of $15.2 million in 2019, appears to be facing dire circumstances. On March 24th, it released financials for Q4 as well as a press release that indicated the company was cancelling its previously scheduled call for March 26th. The company also pointed to a downsizing of its business, warning that if the efforts didn’t meet expectations or if additional capital isn’t available, it may not be able to continue operations.

After the close on March 26th, two of the three directors quietly resigned as communicated exclusively via Form 4 filings, with Chairman Tim Keating and Director Taylor Simonton departing. Only CEO Tony McDonald remains on the Board of Directors.

Surna saw revenue dip from a record level in Q3, falling 33% from $5.5 million to $3.7 million. reporting a loss in Q4 as well. It ended 2019 with cash of $922K and was able to generate $672K operating cash flow during the year. Its Q4 balance sheet indicated $4 million in near-term liabilities but only $2.6 million in current assets, suggesting limited liquidity at year-end.

Breaking News by Alan Brochstein, CFA
Alan Brochstein, CFA
Based in Houston, Alan leverages his experience as founder of online community 420 Investor, the first and still largest due diligence platform focused on the publicly-traded stocks in the cannabis industry. With his extensive network in the cannabis community, Alan continues to find new ways to connect the industry and facilitate its sustainable growth. At New Cannabis Ventures, he is responsible for content development and strategic alliances. Before shifting his focus to the cannabis industry in early 2013, Alan, who began his career on Wall Street in 1986, worked as an independent research analyst following over two decades in research and portfolio management. A prolific writer, with over 650 articles published since 2007 at Seeking Alpha, where he has 70,000 followers, Alan is a frequent speaker at industry conferences and a frequent source to the media, including the NY Times, the Wall Street Journal, Fox Business, and Bloomberg TV. Contact Alan: Twitter | Facebook | LinkedIn | Email

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