SOURCE: True Drinks Holdings, Inc.

True Drinks Holdings, Inc.

November 14, 2013 16:05 ET

True Drinks Reports Third Quarter and Nine Month Financial Results for the Period Ended September 30, 2013

IRVINE, CA--(Marketwired - November 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 their financial results for the third quarter and nine month periods ended September 30, 2013.

Lance Leonard, Chief Executive Officer of True Drinks, commented, "We achieved a few key strategic objectives in the third quarter. The Company began production and shipping from its two new production facilities in Dallas and Scotia, New York. These facilities greatly enhance our ability to support growth as we now have the available capacity to produce 4,000,000 cases of AquaBall annually. These additional facilities also provide the Company with significant savings on freight costs for shipping products to our customers. In the third quarter, the Company also extended one of its key licensing agreements to include prominent and well known characters on our AquaBall bottles through the end of 2015. Lastly, AquaBall increased its number of authorized outlets by 15,200 over the last six months from 6,800 outlets at the end of the first quarter to 22,000 outlets as at the end of the third quarter. These successes are a testament to the acceptance of our products by consumers and the faith in our business model by our strategic partners, distributors and retailers. While implementing our strategic plan, revenues were dampened recently as our focus remained on implementing our business plan and enhancing our balance sheet so that we may properly manage our growth. Management now believes it has the proper foundation in place to aggressively grow revenues in 2014. These plans include a comprehensive marketing strategy, the introduction of multi-packs, and expansion into the mass and club channels. Today, we are as optimistic as ever about the future of AquaBall Naturally Flavored Water."

Operational and Financial Highlights:

  • Revenue for the first nine months of 2013 totaled $2.2 million as compared to $846,000 for the same period in 2012. Revenue for the 2013 third quarter totaled $518,000 as compared to $724,000.
  • True Drinks extended a key licensing agreement to display characters on the AquaBall™ through the end of 2015.
  • AquaBall™ is available in 48 states and is authorized in 22,000 outlets.
  • True Drinks announced a distribution partnership with one of the world's largest grocery retailers, and the largest grocery chain in the United States, The Kroger Company, spanning 31 states, more than 2,400 grocery stores and almost 800 convenience stores.
  • AquaBall™ expanded its international presence by partnering with an international membership style club channel retailer and largest operator of membership warehouse clubs in Central America, PriceSmart Inc.
  • Other distribution agreements have been reached with Valu Merchandisers, Polar Beverages, Harris Teeter Supermarkets, and Midwest Beverage and Brokerage.

2013 Shareholder Update Conference Call:
Management will announce the details for a shareholder update conference call in the weeks ahead.

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
 
    September 30,
2013
    December 31,
2012
 
    (Unaudited)        
ASSETS            
Current Assets:            
Cash   $ 26,622     $ 4,449  
Accounts receivable, net     273,974       130,909  
Inventory     872,555       832,874  
Deferred financing costs     321,940        -  
Prepaid expenses and other current assets     605,213       268,716  
Total Current Assets     2,100,304       1,236,948  
                 
Restricted Cash     133,031       81,270  
Property and Equipment, net     19,255       25,399  
Patents, net     1,388,235       1,494,118  
Trademarks, net     61,016       98,516  
Goodwill     3,474,502       3,474,502  
Other Assets      -       3,948  
Total Assets   $ 7,176,343     $ 6,414,701  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
Liabilities:                
Accounts payable and accrued expenses   $ 1,774,275     $ 1,292,147  
Convertible notes payable, net     3,343,067       772,000  
Derivative liabilities     986,252       -  
Total Liabilities     6,103,594       2,064,147  
                 
Commitments and Contingencies (Note 5)                
                 
Stockholders' Equity:                
Common Stock, $0.001 par value, 40,000,000 shares authorized, 27,885,587 and 1,337,335 shares outstanding at September 30, 2013 and December 31, 2012, respectively     27,886       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 September 30, 2013 and December 31, 2012, respectively             1,545  
Additional paid in capital     9,328,703       7,467,015  
Accumulated deficit     (8,283,840 )     (3,119,343 )
                 
Total Stockholders' Equity     1,072,749       4,350,554  
                 
Total Liabilities and Stockholders' Equity   $ 7,176,343     $ 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
 September 30,
    Nine Months Ended
September 30,
 
    2013       2012      2013      2012  
                               
Net Sales $ 517,689     $ 724,054     $ 2,231,861     $ 846,280  
                               
Cost of Sales   406,757       407,045       1,871,643       563,472  
                               
Gross Profit   110,932       317,009       360,218       282,808  
                               
Operating Expenses:                              
Selling and marketing   752,151       303,147       1,837,049       434,319  
General and administrative   1,321,227       592,706       3,217,873       1,715,864  
Total operating expenses   2,073,378       895,853       5,054,922       2,150,183  
                               
Operating Loss   (1,962,446 )     (578,844 )     (4,694,704 )     (1,867,375 )
                               
Other Expense                              
Change in fair value of derivative liability   (489,425)               (595,030)        -  
Interest expense   684,206       1,381       1,064,823       1,794  
Other expense                           23,475  
                               
Net Loss $ (2,157,227 )   $ (580,225 )   $ (5,164,497 )   $ (1,892,644 )
                               
Basic and diluted net loss per share $ (0.08 )   $ (0.02 )   $ (0.19 )   $ (0.09 )
                               
Weighted average shares of Common Stock outstanding, basic and diluted (1)   27,844,438       25,031,160       27,355,426       21,453,816  
                               

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, Inc. 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)
    Nine Months Ended
September 30,
 
    2013     2012  
CASH FLOWS FROM OPERATING ACTIVITIES            
Net loss   $ (5,164,497 )   $ (1,892,644 )
Adjustments to reconcile net loss to net cash used in operating activities                
Depreciation     7,443       7,013  
Amortization     143,383       70,588  
Accretion of deferred financing costs     450,806        -  
Provision for bad debt expense     150,000        -  
Change in estimated fair value of derivative     (595,030 )      -  
Amortization of debt discount     657,307        -  
Stock issued to founders      -       855  
Fair value of stock issued for services     331,341       150,010  
Stock based compensation     694,533       64,592  
Change in operating assets and liabilities:                
Accounts receivable     (293,065 )     (369,301 )
Inventory     (39,681 )     (634,704 )
Prepaid expenses and other current assets     (336,497 )     (73,644 )
Other assets     3,948       (957,283 )
Accounts payable and accrued expenses     582,946       496,295  
Other current liabilities      -       241  
Net cash used in operating activities     (3,407,063 )     (3,137,982 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Change in restricted cash     (51,761 )     (81,000 )
Purchase of property and equipment     (1,299 )     (6,050 )
Net cash used in investing activities     (53,060 )     (87,050 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Proceeds from issuance of Common Stock      -       3,375,032  
Proceeds from notes payable     4,009,000        -  
Deferred financing costs paid     (354,704 )      -  
Repayments on notes payable     (172,000 )      -  
Net cash provided by financing activities     3,482,296       3,375,032  
                 
NET INCREASE (DECREASE) IN CASH     22,173        -  
                 
CASH- beginning of period     4,449        -  
                 
CASH- end of period   $ 26,622     $  -  
                 
SUPPLEMENTAL DISCLOSURES                
  Interest paid in cash   $ 58,758     $    
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   $ 418,042     $  -  
  Warrants issued as debt discount   $ 1,163,240     $  -  
                   

The accompanying notes are an integral part of these condensed consolidated financial statements.

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