IRVINE, CA–(Marketwired – November 15, 2016) – True Drinks, Inc. (OTC PINK: TRUU), makers of AquaBall™ Naturally Flavored Water, the healthiest children's beverage on the market with no sugar, preservatives, calories, or artificial flavors, today announces its financial results for the third quarter of 2016.
Kevin Sherman, Chief Executive Officer of True Drinks, commented, "I've always believed that we are in the business of making a difference in the lives of children. We are seeing more and more news hitting the mainstream media regarding the passing of measures to tax soda and sugary beverages in various cities across the United States. AquaBall is sitting on the precipice of a perfect storm as the only zero sugar beverage on the market for children. With the growing epidemic of childhood obesity and diabetes, we are uniquely positioned to dominate the children's beverage category. The category is essentially rudderless with its offering of sugary beverages. Since the launch of our preservative-free formula under our Niagara Bottling manufacturing partnership in mid-June, we have seen great acceptance with both retailers and consumers looking for healthier options. The success of our business is twofold: providing shareholder value and building a business that makes a difference in this world. We firmly believe that we will accomplish both in the near term."
Dan Kerker, Chief Financial Officer of True Drinks, commented, "Our third quarter results start to show the improvements we have made as a company, specifically as it relates to our relationship with Niagara Bottling. In the third quarter, we are pleased to report gross margin of 35%, our best quarter to date. We continue to work to deliver the full benefits of our relationship with Niagara as it relates to other operational costs, such as freight and warehousing expenses. On the revenue side, our sales team has seen tremendous early results selling in our new preservative-free AquaBall in its new, slimmer bottle, specifically in the main-stream grocery and convenience store markets. They have also expanded our DSD network considerably to provide coverage for oncoming retailers. We anticipate strong revenue growth moving forward resulting from distribution gains and our in-store velocity."
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 | ||||
| September 30, 2016 | December 31,2015 | |||
| ASSETS | (Unaudited) | |||
| Current Assets: | ||||
| Cash and cash equivalents | $ | 1,407,000 | $ | 376,840 |
| Accounts receivable, net | 444,272 | 1,843,415 | ||
| Inventory, net | 741,355 | 1,558,719 | ||
| Prepaid expenses and other current assets | 236,446 | 75,923 | ||
| Total Current Assets | 2,829,073 | 3,854,897 | ||
| Restricted Cash | 209,518 | 209,360 | ||
| Property and Equipment, net | 12,748 | 4,530 | ||
| Patents, net | 964,706 | 1,070,588 | ||
| Goodwill | 3,474,502 | 3,474,502 | ||
| Total Assets | $ | 7,490,547 | $ | 8,613,877 |
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||
| Current Liabilities: | ||||
| Accounts payable and accrued expenses | $ | 1,000,403 | $ | 1,623,046 |
| Debt | 228,039 | 1,336,819 | ||
| Derivative liabilities | 6,332,309 | 6,199,021 | ||
| Total Current Liabilities | 7,560,751 | 9,158,886 | ||
| Commitments and Contingencies (Note 5) | ||||
| Stockholders' Deficit: | ||||
| Common Stock, $0.001 par value, 300,000,000 shares authorized, 117,412,273 and 111,434,284 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 117,412 | 111,434 | ||
| Preferred Stock — Series B (liquidation preference of $4 per share), $0.001 par value, 2,500,000 shares authorized, 1,292,870 and 1,317,870 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 1,293 | 1,318 | ||
| Preferred Stock — Series C (liquidation preference $100 per share), $0.001 par value, 200,000 and 150,000 shares authorized, 111,617 and 48,853 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 112 | 49 | ||
| Additional paid in capital | 33,317,475 | 29,690,834 | ||
| Accumulated deficit | (33,506,496 | ) | (30,348,644 | ) |
| Total Stockholders' Deficit | (70,204 | ) | (545,009 | ) |
| Total Liabilities and Stockholders' Deficit | $ | 7,490,547 | $ | 8,613,877 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
| TRUE DRINKS HOLDINGS, INC. | |||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||
| (Unaudited) | |||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||
| Net Sales | $ | 961,949 | $ | 1,323,730 | $ | 2,028,216 | $ | 4,172,626 | |||
| Cost of Sales | 628,195 | 1,188,222 | 1,884,309 | 3,950,961 | |||||||
| Gross Profit | 333,754 | 135,508 | 143,907 | 221,665 | |||||||
| Operating Expenses | |||||||||||
| Selling and marketing | 558,899 | 2,325,567 | 2,696,295 | 4,269,670 | |||||||
| General and administrative | 956,614 | 1,006,486 | 3,573,520 | 3,302,782 | |||||||
| Total operating expenses | 1,515,513 | 3,332,053 | 6,269,815 | 7,572,452 | |||||||
| Operating Loss | (1,181,759 | ) | (3,196,545 | ) | (6,125,908 | ) | (7,350,787 | ) | |||
| Other Income (Expense) | |||||||||||
| Change in fair value of derivative liabilities | 3,051,973 | 1,079,335 | 3,026,433 | 749,943 | |||||||
| Interest expense | (10,428 | ) | (15,456 | ) | (39,632 | ) | (223,160 | ) | |||
| Other expense | 178 | (18,745 | ) | ||||||||
| 3,041,723 | 1,063,879 | 2,968,056 | 526,783 | ||||||||
| NET INCOME (LOSS) | $ | 1,859,964 | $ | (2,132,666 | ) | $ | (3,157,852 | ) | $ | (6,824,004 | ) |
| Declared dividends on Preferred Stock | $ | 66,080 | $ | 68,636 | $ | 198,929 | $ | 203,397 | |||
| Net income (loss) attributable to common stockholders | $ | 1,793,884 | $ | (2,201,302 | ) | $ | (3,356,781 | ) | $ | (7,027,401 | ) |
| Net income (loss) per common share | |||||||||||
| Basic: | $ | 0.01 | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.11 | ) |
| Diluted: | $ | 0.01 | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.11 | ) |
| Weighted average common shares outstanding | |||||||||||
| Basic: | 121,989,573 | 88,086,922 | 118,978,522 | 64,289,691 | |||||||
| Diluted: | 210,146,167 | 88,086,922 | 118,978,522 | 64,289,691 | |||||||
The accompanying notes are an integral part of these financial statements.
| TRUE DRINKS HOLDINGS, INC. | ||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
| (Unaudited) | ||||||
| Nine Months Ended September 30, | ||||||
| 2016 | 2015 | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
| Net loss | $ | (3,157,852 | ) | $ | (6,824,004 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||
| Depreciation | 3,557 | 2,469 | ||||
| Amortization | 105,882 | 112,732 | ||||
| Provision for bad debt expense | 140,152 | (51,769) | ||||
| Provision for inventory losses | 110,000 | – | ||||
| Change in estimated fair value of derivative | (3,026,433 | ) | (749,943 | ) | ||
| Fair value of common stock issued for services | 18,000 | 470,062 | ||||
| Stock based compensation | 229,858 | 453,491 | ||||
| Change in operating assets and liabilities: | ||||||
| Accounts receivable | 1,258,991 | (104,970 | ) | |||
| Inventory | 707,364 | (903,897 | ) | |||
| Prepaid expenses and other current assets | (160,523 | ) | 386,768 | |||
| Accounts payable and accrued expenses | (623,123 | ) | (142,177 | ) | ||
| Net cash used in operating activities | (4,394,127 | ) | (7,427,348 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||
| Restricted cash | (158 | ) | – | |||
| Purchase of property and equipment | (11,775 | ) | – | |||
| Net cash used in investing activities | (11,933 | ) | – | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||
| Proceeds from warrants exercised for cash | 45,000 | – | ||||
| Proceeds from issuance of Series C Preferred Stock | 6,000,000 | 9,000,048 | ||||
| Borrowings on debt | 94,998 | ) | 1,035,792 | |||
| Repayments on debt | (703,778 | ) | (3,184,786 | ) | ||
| Net cash provided by financing activities | 5,436,220 | 6,851,054 | ||||
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,030,160 | (576,294 | ) | |||
| CASH AND CASH EQUIVALENTS– beginning of period | 376,840 | 668,326 | ||||
| CASH AND CASH EQUIVALENTS– end of period | $ | 1,407,000 | $ | 92,032 | ||
| SUPPLEMENTAL DISCLOSURES | ||||||
| Interest paid in cash | $ | 41,758 | $ | 137,556 | ||
| Non-cash financing and investing activities: | ||||||
| Conversion of preferred stock to common stock | $ | 1,473 | $ | 54,034 | ||
| Dividends paid in common stock | $ | 198,449 | $ | 203,397 | ||
| Dividends declared but unpaid | $ | 198,929 | $ | 68,636 | ||
| Conversion of debt and accrued interest to Series C Preferred Stock | $ | 500,000 | $ | 1,214,206 | ||
| Warrants issued in connection with Series C Preferred Offering | $ | 3,159,721 | $ | 2,858,742 | ||
| Issuance of restricted stock | $ | 2,620 | $ | – | ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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