Carson, California-based Solis Tek Inc. (SLTK) delivered third-quarter 2017 revenues of $1.9 million an increase of 6% over $1.8 million for the same period in 2016. Gross profits rose 5% to $671,000 versus last year’s $640,000.
“We’ve significantly expanded our product portfolio in the third quarter and the increased demand for our products has continued,” commented Dennis G. Forchic, Chief Executive Officer of Solis Tek. “We are particularly excited about the response to our new Digital Lighting Controller. This device complements our existing upgraded product line and enables cultivators to schedule and monitor their grow rooms, thus increasing the grower’s yield and ROI. Initial demand for the Controller exceeded expectations. With the recent funding round now complete we are excited to be able to increase inventory levels across the board to meet projected demands.”
The increases in revenues were driven by increased market penetration among hydroponic customers and commercial facilities. The company’s cost of revenues rose 7% versus last year and resulting in modestly lowering gross margin to 33.7% from last year’s 34.1%. Selling, general, and administrative expenses were $2.05 million in the third quarter of 2017, up 167% over the same period in 2016. The higher expenses were attributed to “cash and stock-based compensation expenses to support a broad campaign to increase Solis Tek’s industry and investment community visibility and, to a lesser extent, increased marketing and payroll related expenses.”
Solis Tek also announced on Monday that it has closed on a recent round of financing by securing $2.5 million of which $1.75 million came through a secured convertible debenture with a single institutional investor. “The proceeds will enable the Company to assure our supply chain execution and maintain inventory levels that can meet customer demand for our industry-leading lighting products,” said Forchic. “In particular, we are excited to ramp commercial activities, fulfill initial orders, and build inventory for our recently-launched Controller, which enables growers to customize their growing experience by mimicking the conditions of natural sunlight, and to automate production for our Nutrient Line, from which we soon plan to launch our second commercial product.”
The stock was lately trading at $1.38 down sharply from its 52-week high of $3.44.