IRVINE, CA–(Marketwired – May 16, 2016) – True Drinks, Inc. (OTC PINK: TRUU), makers of the zero-sugar, vitamin-enhanced AquaBall™ Naturally Flavored Water, today announces its financial results for the first quarter of 2016.
Kevin Sherman, Chief Executive Officer of True Drinks, commented, "As I shared with you in my letter to shareholders a month ago, the first part of 2016 has been about refocusing our business as a truly entrepreneurial venture. We have secured an agreement for $5.0 million in financing, of which $2.5 million has been received, to support our marketing efforts and our expansion into new channels. We have also restructured our sales organization and fine-tuned our operations. Our first run of our new preservative-free formula of AquaBall with our new co-packer Niagara Bottling, LLC has begun, and we are eager to capitalize on the opportunities that our new product and our new relationship with Niagara provide."
Dan Kerker, Chief Financial Officer of True Drinks, commented, "We are pleased to begin production of our new preservative-free product with Niagara Bottling this month. This new relationship will provide consistency in our cost of goods sold and great improvement in our gross margins. The first five months of 2016 have been a period of transition for True Drinks. With this transition, our first quarter numbers show negative margins, a figure exacerbated by the creation of an inventory reserve against the value of the remaining inventory of our current product. Both our revenue and gross margin figures will show improvement with our new preservative-free AquaBall."
About True Drinks, Inc.
True Drinks is a healthy beverage provider with licensing agreements with Disney and Marvel for use of their characters on its proprietary, patented bottles. AquaBall™ is a naturally flavored, vitamin-enhanced, zero-calorie, dye-free, sugar-free alternative to juice and soda. AquaBall™ is currently available in four flavors: orange, grape, fruit punch and berry. Their target consumers: kids, young adults, and their guardians, are attracted to the product by the entertainment and media characters on the bottle and continue to consume the beverage because of its healthy benefits and great taste. For more information, please visit www.aquaballdrink.com and www.truedrinks.com. Investor information can be found at www.truedrinks.com/investor-relations/. Proudly made in the USA.
FORWARD-LOOKING STATEMENTS
Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "if," "should" and "will" and similar expressions as they relate to True Drinks, Inc. are intended to identify such forward-looking statements. True Drinks, Inc. may from time to time update these publicly announced projections, but it is not obligated to do so. Any projections of future results of operations or the anticipated benefits of the merger and other aspects of the proposed merger should not be construed in any manner as a guarantee that such results or other events will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see "Risk Factors" in True Drink's report on Form 10-K filed with the Securities and Exchange Commission and its other filings under the Securities Exchange Act of 1934, as amended. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.
| TRUE DRINKS HOLDINGS, INC. | ||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| March 31, 2016 | December 31, 2015 | |||
| ASSETS | (Unaudited) | |||
| Current Assets: | ||||
| Cash | $ | 126,978 | $ | 376,840 |
| Accounts receivable, net | 232,269 | 1,843,415 | ||
| Inventory, net | 1,500,333 | 1,558,719 | ||
| Prepaid expenses and other current assets | 276,986 | 75,923 | ||
| Total Current Assets | 2,136,566 | 3,854,897 | ||
| Restricted Cash | 209,413 | 209,360 | ||
| Property and Equipment, net | 3,873 | 4,530 | ||
| Patents, net | 1,035,294 | 1,070,588 | ||
| Goodwill | 3,474,502 | 3,474,502 | ||
| Total Assets | $ | 6,859,648 | $ | 8,613,877 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||
| Current Liabilities: | ||||
| Accounts payable and accrued expenses | $ | 1,479,738 | $ | 1,623,046 |
| Debt | 433,041 | 1,336,819 | ||
| Derivative liabilities | 5,362,699 | 6,199,021 | ||
| Total Current Liabilities | 7,275,478 | 9,158,886 | ||
| Commitments and Contingencies (Note 7) | ||||
| Stockholders' Deficit: | ||||
| Common Stock, $0.001 par value, 300,000,000 shares authorized, 112,948,441 and 111,434,284 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 112,949 | 111,434 | ||
| Preferred Stock – Series B (liquidation preference of $4 per share), $0.001 par value, 2,500,000 shares authorized, 1,317,870 shares issued and outstanding at March 31, 2016 and December 31, 2015 | 1,318 | 1,318 | ||
| Preferred Stock – Series C (liquidation preference $100 per share), $0.001 par value, 150,000 shares authorized, 62,217 and 48,853 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 62 | 49 | ||
| Additional paid in capital | 30,997,633 | 29,690,834 | ||
| Accumulated deficit | (31,527,792 | ) | (30,348,644 | ) |
| Total Stockholders' Deficit | (415,830 | ) | (545,009 | ) |
| Total Liabilities and Stockholders' Deficit | $ | 6,859,648 | $ | 8,613,877 |
| The accompanying notes are an integral part of these financial statements. |
| TRUE DRINKS HOLDINGS, INC. | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||
| (Unaudited) | ||||||
| Three Months Ended March 31, |
||||||
| 2016 | 2015 | |||||
| Net Sales | $ | 583,298 | $ | 764,975 | ||
| Cost of Sales | 733,411 | 620,728 | ||||
| Gross (Loss) Profit | (150,113 | ) | 144,247 | |||
| Operating Expenses | ||||||
| Selling and marketing | 1,068,913 | 650,365 | ||||
| General and administrative | 1,068,350 | 1,421,268 | ||||
| Total operating expenses | 2,137,263 | 2,071,633 | ||||
| Operating Loss | (2,287,376 | ) | (1,927,386 | ) | ||
| Other Income (Expense) | ||||||
| Change in fair value of derivative liabilities | 1,139,365 | (142,922 | ) | |||
| Interest expense | (12,214 | ) | (207,737 | ) | ||
| Other expense | (18,923 | ) | – | |||
| 1,108,228 | (350,659 | ) | ||||
| NET LOSS | $ | (1,179,148 | ) | $ | (2,278,045 | ) |
| Declared dividends on Preferred Stock | 66,626 | 66,872 | ||||
| Net loss attributable to common stockholders | $ | (1,245,774 | ) | $ | (2,344,917 | ) |
| Loss per common share, basic and diluted | $ | (0.01 | ) | $ | (0.05 | ) |
| Weighted average common shares outstanding, basic and diluted | 112,219,264 | 50,548,805 | ||||
| The accompanying notes are an integral part of these financial statements. |
| TRUE DRINKS HOLDINGS, INC. | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (Unaudited) | ||||||
| Three Months Ended March 31, |
||||||
| 2016 | 2015 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| Net loss | $ | (1,179,148 | ) | $ | (2,278,045 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||
| Depreciation | 657 | 876 | ||||
| Amortization | 35,294 | 42,144 | ||||
| Provision for bad debt expense | 140,152 | (6,847 | ) | |||
| Provision for inventory losses | 110,000 | – | ||||
| Change in estimated fair value of derivative | (1,139,365 | ) | 142,922 | |||
| Fair value of stock issued for services | 18,000 | 453,062 | ||||
| Stock based compensation | 61,555 | 129,098 | ||||
| Change in operating assets and liabilities: | ||||||
| Accounts receivable | 1,470,994 | (194,805 | ) | |||
| Inventory | (51,614 | ) | (65,643 | ) | ||
| Prepaid expenses and other current assets | (201,063 | ) | (85,180 | ) | ||
| Accounts payable and accrued expenses | (141,493 | ) | (270,954 | ) | ||
| Net cash used in operating activities | (876,031 | ) | (2,133,372 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
| Restricted cash | (53 | ) | (33 | ) | ||
| Net cash used in investing activities | (53 | ) | (33 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
| Proceeds from warrants exercised for cash | 30,000 | – | ||||
| Proceeds from issuance of Series C Preferred Stock | 1,000,000 | 4,500,000 | ||||
| Repayments on debt | (403,778 | ) | (2,986,118 | ) | ||
| Net cash provided by financing activities | 626,222 | 1,513,882 | ||||
| NET DECREASE IN CASH | (249,862 | ) | (619,523 | ) | ||
| CASH– beginning of period | 376,840 | 668,326 | ||||
| CASH– end of period | $ | 126,978 | $ | 48,803 | ||
| SUPPLEMENTAL DISCLOSURES | ||||||
| Interest paid in cash | $ | 13,119 | $ | 122,556 | ||
| Non-cash financing and investing activities: | ||||||
| Conversion of preferred stock to common stock | $ | 698 | $ | 2,222 | ||
| Conversion of notes payable and accrued interest to Series C preferred stock | $ | 500,000 | $ | 1,214,206 | ||
| Dividend paid in common stock | $ | 68,441 | $ | 85,573 | ||
| Dividends declared but unpaid | $ | 66,626 | $ | 66,872 | ||
| Warrants issued in connection with Series C Preferred Offering | $ | 303,043 | $ | – | ||
| The accompanying notes are an integral part of these condensed consolidated financial statements. |
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