SOURCE: True Drinks Holdings, Inc.

True Drinks Holdings, Inc.

August 14, 2013 16:05 ET

True Drinks Reports Second Quarter and Six Month Financial Results for the Period Ended June 30, 2013

IRVINE, CA--(Marketwired - August 14, 2013) - True Drinks, Inc. (OTCQB: TRUU), a healthy beverage provider with major entertainment and media company licensing agreements for use of their characters on its proprietary, patented bottles, today announced its financial results for the second quarter and six month periods ended June 30, 2013.

Lance Leonard, Chief Executive Officer of True Drinks, commented, "I am extremely pleased with the revenue and distribution growth we have achieved in a short amount of time. At the end of the 2013 first quarter, we were in just over 6,800 outlets and today stand at 22,600. We are on pace to achieve our goal of 38,000 outlets by the end of the year and expect revenue to trend in that direction accordingly. Two major reasons are driving factors for this trend. First, I believe we are the healthiest beverage alternative on the market today for kids, and kids love the taste while mothers love the healthy benefits. Second, the characters on our bottles bring credibility to our brand and greatly enhance the marketability of AquaBall™ Naturally Flavored Water. Our team is focused on executing, and we are confident that we will continue our rapid expansion as our sales ramped over ten-fold from a year ago to over $1.3 million in the second quarter."

Operational and Financial Highlights:

  • Revenue for the first six months of 2013 totaled $1.7 million as compared to $122,000 for the same period in 2012. Revenue for the 2013 second quarter totaled $1.3 million as compared to $122,000.
  • Revenue increased during both periods primarily due to an increase in the distribution of AquaBall™ Naturally Flavored Water.
  • AquaBall™ is available in 47 states and in over 22,000 outlets.
  • On pace to achieve targeted 38,000 outlets by the end of 2013.
  • Secured distribution in Walgreens, the nation's largest drugstore chain and into their over 7,000 outlets.
  • AquaBall™ is now available in over 100 Albertson locations in New Mexico, Arizona and Colorado.
  • Reached an agreement with Ingles Markets Inc. to carry AquaBall™ in 203 supermarkets throughout 6 Southeastern states.
  • Signed license agreement with Disney Consumer Products Latin America covering Central America, the Caribbean and Columbia through March 31, 2015.
  • Expanded production capacity with the signing of a co-packer bottling agreement with Adirondack Beverages increasing total production capacity including its California and Texas locations to 4 million cases annually.
  • Unveiled new Berry and seasonal Strawberry-Lemonade flavors adding to the existing flavors of Fruit Punch, Orange and Grape.
  • AquaBall™ won the Gold Medal in Beverage World Magazine's annual event in the growing and competitive Water/Enhanced Water field being cited by the judges as having "dynamic appearance", "healthy ingredients" and "collectability."
  • Appointed Kevin Sherman as Chief Marketing Officer.

2013 Second Quarter Financial Results Conference Call Details:
Date: Monday, August 19, 2013
Time: 4:15 p.m. Eastern
Participant Dial-In: (480) 629-9664
Live Webcast: http://truedrinks.com/investor-relations/ or http://public.viavid.com/index.php?id=105747

It is recommended that participants dial in approximately 10 minutes prior to the start of the 4:15 p.m. Eastern call. There will also be a simultaneous live webcast of the conference call which can be accessed through the following audio feed link and archived recording of the conference call available under the Investor Relations section of the company website at http://truedrinks.com/investor-relations/ or by clicking on the following link, http://public.viavid.com/index.php?id=105747.

About True Drinks, Inc.
True Drinks, Inc. is a beverage company with licensing agreements with major entertainment and media companies for use of their characters on its proprietary, patented bottles. AquaBall™ Naturally Flavored Water, the Company's vitamin-enhanced water that was created as a 0 calorie, sugar-free alternative to juice and soda for kids, is currently being sold into mass-market retailers throughout the United States. For more information, please visit www.theaquaball.com and www.truedrinks.com.

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  
   June 30,
2013
   December 31,
2012
 
   (Unaudited)       
ASSETS            
Current Assets:            
Cash  $257,524    $4,449  
Accounts receivable, net   728,512     130,909  
Inventory   585,011     832,874  
Deferred financing costs   487,519     -  
Prepaid expenses and other current assets   536,618     268,716  
Total Current Assets   2,595,184     1,236,948  
             
Restricted Cash   81,028     81,270  
Property and Equipment, net   15,209     25,399  
Patents, net   1,423,529     1,494,118  
Trademarks, net   73,516     98,516  
Goodwill   3,474,502     3,474,502  
Other Assets   -     3,948  
Total Assets  $7,662,968    $6,414,701  
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
             
Liabilities:            
Accounts payable and accrued expenses  $1,500,736    $1,292,147  
Convertible notes payable, net   2,023,351     772,000  
Derivative liabilities   924,822     -  
Other current liabilities   167,715     -  
Total Liabilities   4,616,624     2,064,147  
             
Commitments and Contingencies (Note 5)            
             
Stockholders' Equity:            
Common Stock, $0.001 par value, 40,000,000 shares authorized, 27,809,223 and 1,337,335 shares outstanding at June 30, 2013 and December 31, 2012, respectively   27,809     1,337  
Preferred Stock (liquidation preference of $10 per share), $0.001 par value, 5,000,000 shares authorized, 0 and 1,544,565 shares outstanding at June 30, 2013 and December 31, 2012, respectively   -     1,545  
Additional paid in capital   9,145,148     7,467,015  
Accumulated deficit   (6,126,613 )   (3,119,343 )
             
Total Stockholders' Equity   3,046,344     4,350,554  
             
Total Liabilities and Stockholders' Equity  $7,662,968    $6,414,701  
         
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
June 30,
  Six Months Ended
June 30,
 
    2013     2012    2013    2012  
Net Sales  $1,303,371    $122,226    $1,714,172    $122,226  
                         
Cost of Sales   1,200,936     106,427     1,464,886     106,427  
                         
Gross Profit   102,435     15,799     249,286     15,799  
                         
Operating Expenses:                        
Selling and marketing   654,412     137,276     1,084,898     181,172  
General and administrative   851,582     775,197     1,896,646     1,123,155  
Total operating expenses   1,505,994     912,473     2,981,544     1,304,327  
                         
Operating Loss   1,403,559     896,674     2,732,258     1,288,528  
                         
Other Expense                        
Change in fair value of derivative liability   (105,605 )   -     (105,605 )   -  
Interest expense   152,418     414     380,617     414  
Other expense   -     22,900     -     23,475  
                         
Net Loss  $(1,450,372 )  $(919,988 )  $(3,007,270 )  $(1,312,417 )
                         
Basic and diluted net loss per share  $(0.05 )  $(0.04 )  $(0.11 )  $(0.07 )
                         
Weighted average shares of Common Stock outstanding, basic and diluted (1)   27,400,619     22,912,694     27,105,681     19,468,827  
                 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
(1)  The weighted average shares of Common Stock outstanding was calculated based on as-converted to Common Stock figures for the preferred stock that was granted to shareholders of True Drinks, Inc. upon the merger with Bazi International on October 15, 2012. The 100-for-1 reverse stock split executed on January 18, 2013 was retrospectively reflected in weighted average number of shares of Common Stock outstanding.
    
 
 TRUE DRINKS HOLDINGS, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Unaudited)
    
   Six Months Ended
June 30,
 
   2013   2012  
CASH FLOWS FROM OPERATING ACTIVITIES           
Net loss  $(3,007,270 ) $(1,312,417 )
Adjustments to reconcile net loss to net cash used in operating activities           
Depreciation   10,190    3,392  
Amortization   95,589    35,294  
Accretion of deferred financing costs   32,074    -  
Change in estimated fair value of derivative   (105,605 )  -  
Amortization of debt discount   45,109    -  
Stock issued to founders   -    855  
Fair value of stock issued for services   247,340    -  
Stock based compensation   594,902    13,125  
Change in operating assets and liabilities:           
  Accounts receivable   (597,603 )  (26,076 )
  Inventory   247,863    (504,686 )
         -  
  Prepaid expenses and other current assets   (267,902 )  (216,452 )
  Other assets   3,948    (823,884 )
  Accounts payable and accrued expenses   309,407    361,966  
  Other current liabilities   167,715    -  
Net cash used in operating activities   (2,224,243 )  (2,468,883 )
            
CASH FLOWS FROM INVESTING ACTIVITIES           
  Change in restricted cash   242    (81,000 )
Net cash used in investing activities   242    (81,000 )
            
CASH FLOWS FROM FINANCING ACTIVITIES           
  Proceeds from issuance of Common Stock   -    3,350,081  
  Proceeds from notes payable   2,869,000    -  
  Deferred financing costs paid   (219,924 )  -  
  Repayments on notes payable   (172,000 )  -  
Net cash provided by financing activities   2,477,076    3,350,081  
            
NET INCREASE IN CASH   253,075    800,198  
            
CASH - beginning of period   4,449    -  
            
CASH - end of period  $257,524   $800,198  
            
SUPPLEMENTAL DISCLOSURES           
  Interest paid in cash  $17,330   $-  
Non-cash financing and investing activities:           
  Conversion of preferred stock to common stock  $25,304   $-  
  Conversion of notes payable and accrued interest to common stock  $860,818   $-  
  Warrants issued as deferred financing costs  $299,699   $-  
  Warrants issued as debt discount  $730,758   $-  
          
The accompanying notes are an integral part of these condensed consolidated financial statements.

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