Surna’s Growing Backlog Is A Sign Of A Serious Uptick In Its Core Business

Earlier last week, Surna Inc. (OTCQB: SRNA) released first quarter financial and operating results that showed strong growth and we are favorable on the number of high-profile projects that are backlogged by the firm.

This marks the first quarter the company is operating as Surna Cultivation Technologies and we believe the business is off to a hot start. At current levels, the company is trading at a significant discount to other ancillary companies that are focused on the controlled environment agriculture (CEA) technology vertical.

Reports Second Largest Backlog in Company History

During the quarter, the company reported to have generated $2.4 million of revenue which represents a 31% increase when compared to the same period last year. From a balance sheet standpoint, Surna’s cash position has improved from March 31, 2020, and we find this to be worth noting.

During the first quarter, Surna reported to have entered into approx. $5.5 million of new sales contracts and its backlog grew to $11.6 million, the second highest in its history. The company was negatively impacted by production and shipping delays from certain suppliers, and we expect its revenue numbers to improve in future quarters. We consider the risks that are associated with production and shipping delays are transitory and do not expect this trend to impact the business over the long-term.

One of the most important aspects of the earnings report is related to Surna’s revised organic growth strategy. Going forward, the company plans to focus on entering new markets, adding new products and services, and adopting a new trade name, Surna Cultivation Technologies. We believe the new name is better aligned with the verticals the business is focused on and will monitor how Surna is able to capitalize on new verticals.

Surna’s project backlog is 37% higher than where the company finished 2020 and its cash position is nearly $1 million higher than where it ended 2020. We expect the company’s sales momentum to be positively impacted by its new organic growth strategy as well as its partnership with RSX Enterprises.

Led by a Team that is Focused on Execution and Profitability

Another important aspect of Surna’s financial report is related to how the management team responded to the COVID pandemic. The leadership executed on a cost cutting strategy that included downsizing its workforce, compensation reductions, and reduced hours worked. As the market landscape improved and as new contracts and bank funding became available, the management team turned the growth spigot back on and this is a trend to be aware of.

We believe Surna is led by a management team that is focused on creating value for shareholders. The way the company responded to the COVID pandemic was impressive and we are bullish on how the business has recovered. With the current backlog at more than $11 million, we believe that Surna has a bright future and is an opportunity to be following.

We believe Surna is well positioned to continue to deliver strong growth, sign contracts with additional clients, and expand the product offering. If you are interested in learning more about Surna, please send an email to support@technical420.com with the subject “Surna” to be added to our distribution list.

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Pursuant to an agreement between StoneBridge Partners LLC and Surna Inc. (SRNA) we have been hired for a period of 180 days beginning April 12, 2021 and ending October 12, 2021 to publicly disseminate information about (SRNA) including on the Website and other media including Facebook and Twitter. We are being paid $7,000 per month (SRNA) for or were paid “0” shares of restricted common shares. We own zero shares of (SRNA), which we purchased in the open market. We plan to sell the “ZERO” shares of (SRNA) that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of (SRNA) in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

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Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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