April 24, 2014 08:00 ET

Surna Issues Special Letter to Shareholders

BOULDER, CO--(Marketwired - Apr 24, 2014) - Surna Inc. (OTCQB: SRNA), today issued the following Special Letter to Shareholders from its Chairman and Chief Executive Officer Tom Bollich.

Dear Shareholder:

Surna's recent transition to an active, publicly traded company in the heart of the cannabis industry was a major milestone for our company. I would like to welcome all of our new shareholders, and take this opportunity to discuss our position, strategy and goals for the next twelve months.

Surna's mission is to develop, produce and sell equipment for the nascent, $2.3 billion legal marijuana industry with a focus on disruptive technology, equipment and related support services.

Our Company represents a pure play on the cannabis industry, while we are agnostic as to the proliferation of regulated, commodity cannabis growers & sellers, winners or losers; Surna's business model excludes the production or sale of marijuana. Yet all of these growers must purchase lights, climate and dehumidification systems, nutrients, and much more to participate and compete.

Fueled by powerful trends of increasing states' legislation favoring regulated medical and recreational marijuana markets, industry analysts project the highly fragmented $2.3 billion US legal cannabis industry will increase over four-fold to $10.2 billion by 2018. I believe those analysts' forecasts are quite conservative.

Surna is acquisitive, and our long term goal is to anchor this company by dominating the infrastructure, growing and support side of the global cannabis industry. By aggregating advanced technologies, IP and scalable operating companies to bring new technology to the cannabis marketplace while contributing to its dramatic growth, we advance our potential to enter other highly profitable sectors with a core base in a growth industry.

Surna and Hydro: The Genesis
As your newly appointed Chairman & CEO, I'd like to introduce myself briefly and explain how I see technology and the cannabis industry intersecting. My background is technology including expertise in robotics and artificial intelligence. Early in my career I helped co-found Zynga, a leading digital gaming company. While the game designs and programming were next generation, it was the company's vision of the future of gaming that enabled it to anticipate and capitalize on the explosive demand of a new mobile sector being built around smart phones and tablets.

Similarly, I believe we are in the early days of the legal cannabis industry both in the US and globally. Cannabis is a commodity, and what will distinguish its producers and sellers are its quality, a lower cost of production and the ability to grow hybrid varieties with specific health enhancing benefits -- all of which require new, scientifically conceived technology. Further, I expect the cannabis industry will expand to spin off advanced, new sectors such as food products, nutraceuticals, pharmaceuticals, bio tech, remote agricultural monitoring technologies and much more to drive industry growth.

Surna seeks to acquire and develop disruptive technologies that cater to the legal cannabis industry. Our pending acquisition of Boulder, Colorado-based Hydro puts us at the forefront of the industry. It is a leading designer, manufacturer and distributor of proprietary, state-of-the-art indoor climate control systems such as chillers, lights, reflectors and irrigation systems for cannabis and other indoor agriculture markets.

Following six years of R&D, Hydro deploys advanced proprietary technologies into its growing line of products. Hydro's climate control "Bank Chillers" are priced at 20 to 40 percent less than the competition (primarily conventional HVAC) with energy efficiency reducing consumption by about 30%. That is disruptive technology, and Hydro's rapidly growing revenue proves the market is hungry for innovation.

Exponentially Growing Cannabis Industry
We have one of the most powerful industry tailwinds ever seen. ArcView Market Research (AMR) assesses the 2013 US national legal marijuana market at $1.43 billion, projected to rise to $2.38 billion in 2014, an annual increase of 64% representing the fastest growth rate of any U.S. industry it could find. AMR sees the national annual market value at $10.2 billion by 2018.

"Silicon Valley for Weed"
In Colorado, we enjoy being at the epicenter of the legal marijuana industry. Surna is not affected by any marijuana related regulations in Colorado or elsewhere. Colorado is informally known as the "Silicon Valley for Weed" for attracting the most qualified experts, management, and capital.
Ours was the first state to permit medical marijuana and the first to legalize substantial cannabis plant cultivation and recreational use. The "Colorado Model" is routinely studied by states, federal regulators and international observers. As a true industry pioneer, we gain invaluable experience with which to assist our customer base and inform our acquisitions.

Veteran Management Team
I am pleased to note our Company has installed what I believe to be the best senior management team in the business. Tae Darnell is a Director and VP - General Counsel. He is one of Colorado's first full time Cannabis Lawyers. His firm has represented over 500 dispensaries, cultivation premises and infused product companies. Tae played a pivotal role in Colorado's rise to regulated legalization.

Douglas McKinnon is a Director, EVP and Chief Financial Officer, whose 30 years' experience includes C-level positions in both private and public sectors, including Chairman and CEO of an American Stock Exchange traded company, VP of a $12 billion market cap NASDAQ-traded company and CFO of several publicly held US, Canadian and Australian companies.

12-Month Goals: Scalable Growth Strategy
Surna's business plan envisions an ambitious agenda for the next twelve months. Our goals include:

Penetrate Ancillary & Adjacent Markets. Enter these markets with disruptively lower-cost and more energy-efficient climate control equipment, including:

  • Indoor and greenhouse agriculture (organic and/or hydroponic fruits and vegetables).
  • Cloud: Server farms and data centers are experiencing explosive growth worldwide as software and storage migrates to the Cloud.

Build Intellectual Property Portfolio. Surna is implementing a comprehensive IP strategy that includes acquiring and developing portfolios of patent assets around core commercial opportunities. Hydro currently has one patent application pending with near term plans to file many additional patent applications.

Leverage Surna's Advanced Technology Platform. Surna is a technology company. Hydro is actively developing, and plans to commercialize, new breakthrough climate control and other indoor grow equipment in the next 12 months.

Reinforce Management Team. We have a strong team with Tae and Doug recently joining our Board. We plan to add veteran industry executives to management and the Board.

Raise growth capital. As a public company, we have a lower cost of capital. When the time is right, we will raise capital to fund growth.

Aggressive Marketing Strategy. Our marketing plan includes social media, broadcast, print and web-based PR, advertising and cooperative marketing.

Communicate Proactively. We are implementing programs to keep our shareholders informed, and to communicate proactively with Wall Street and the media.

Increase Capacity. To meet demand, we plan to double the size of our Boulder facility in Q2-14.

M&A. We anticipate being quite acquisitive. With valuable market currency, we have identified logical cannabis industry candidates for JVs and acquisitions for vertical integration or penetrating our current or related markets. 

As a reinvigorated public company in the cannabis industry, we have raised our visibility and increased our opportunities for growth. It is a privilege to lead your company into what I strongly believe to be an exciting and rewarding future.

Sincerely yours,

Tom Bollich
Chairman and Chief Executive Officer

Safe Harbor Statement
This Letter/news release contains statements that involve expectations, plans or intentions (such as those relating to future business or financial results, new features or services, or management strategies) and other factors discussed from time to time in the Company's Securities and Exchange Commission filings. These statements are forward-looking and are subject to risks and uncertainties, so actual results may vary materially. You can identify these forward-looking statements by words such as "may," "should," "expect," "anticipate," "believe," "estimate," "intend," "plan" and other similar expressions. Our actual results, such as the Company's ability to complete, consolidate and commercialize its acquisition of IP, assets and operating companies, could differ materially from those anticipated in these forward-looking statements as a result of certain factors not within the control of the company such as a result of various factors, including future economic, competitive, regulatory, and market conditions. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Contact Information

  • Investor Relations
    Gabe Rodriguez
    Email Contact

    At the Company
    Tae Darnell
    Director and General Counsel
    (303) 993-5271
    Email Contact