SOURCE: True Drinks Holdings, Inc.

True Drinks Holdings, Inc.

November 15, 2016 08:00 ET

True Drinks Announces Q3'2016 Financial Results

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.

Contact Information

  • Contact:
    Investor Relations
    True Drinks, Inc.
    18662 MacArthur Blvd., Ste. 110
    Irvine, CA 92612
    ir@truedrinks.com
    949-203-3500