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SOURCE: True Drinks Holdings, Inc.
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SOURCE: True Drinks Holdings, Inc.
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August 09, 2017 08:30 ET
IRVINE, CA--(Marketwired - August 09, 2017) - True Drinks Holdings, Inc. (
Revenue for the second quarter totaled approximately $1.95 million, representing a 27% increase compared to the Company's first-quarter sales. The Company had record first-half revenues for the six months ended June 30, 2017 of nearly $3.5 million, an increase of 225% over the six months ended June 30, 2016. Gross profit for the quarter and first half ended June 30, 2017 was $709,700 and $1,265,840, respectively, compared to a gross loss of $39,734 and $189,847, respectively for the quarter and first half ended June 30, 2016.
Dan Kerker, Chief Financial Officer of True Drinks, commented, "The strong growth in the second quarter of 2017 was primarily the result of continued gains by AquaBall in the children's beverage category, driven by enhanced brand awareness among consumers looking to purchase a healthy alternative to sugary beverages. We look for this to continue in the second half of the year. We are pleased that we have maintained gross margins in the high thirties over the first two quarters. As previously announced, we introduced the lower cost six-pack last month and are working on further packaging improvements. We will soon begin testing a multi-channel marketing campaign promoting AquaBall in one of our key markets."
James Greco, Chief Executive Officer of True Drinks added, "The second quarter adds to the solid start we saw last quarter which has resulted in record first half revenue and greatly improved operating margins. As of the end of June, AquaBall was available in over 15,000 stores around the country. Velocity, as reported by Nielsen, continues to grow by double digits with the latest four-week period up nearly 23% over the previous four weeks. The growing distribution coupled with increased velocity means our sales volume continues to grow by double-digit percentages far outstripping that of other children's beverages." Greco continued, "AquaBall continues to benefit from the trend towards health and wellness. As awareness of the issues caused by excess sugar consumption in children grows, so do our sales. Our goal is to be a solution to the epidemics of childhood obesity and juvenile diabetes."
About True Drinks Holdings, Inc.
True Drinks Holdings, Inc., the holding company for True Drinks, Inc., is a healthy beverage provider which produces AquaBall® Naturally Flavored Water. AquaBall is a healthy alternative to the other products in the children's beverage market. True Drinks has licensing agreements with Disney and Marvel for use of their characters on bottles of AquaBall®. AquaBall® is a naturally flavored, vitamin-enhanced, zero-calorie, preservative-free, dye-free, sugar-free alternative to juice and soda. AquaBall® is currently available in four flavors: fruit punch, grape, strawberry lemonade 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 | ||||||||
| June 30, 2017 |
December 31, 2016 |
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| ASSETS | (Unaudited) | |||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 22,813 | $ | 15,306 | ||||
| Accounts receivable, net | 1,638,927 | 536,817 | ||||||
| Inventory, net | 361,630 | 318,912 | ||||||
| Prepaid expenses and other current assets | 283,954 | 127,258 | ||||||
| Total Current Assets | 2,307,324 | 998,293 | ||||||
| Restricted Cash | 209,674 | 209,570 | ||||||
| Property and Equipment, net | 8,397 | 11,064 | ||||||
| Patents, net | 190,000 | 250,000 | ||||||
| Goodwill | 3,474,502 | 3,474,502 | ||||||
| Total Assets | $ | 6,189,897 | $ | 4,943,429 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 1,823,362 | $ | 1,258,252 | ||||
| Debt, short-term | 649,725 | 109,682 | ||||||
| Derivative liabilities | 100,875 | 5,792,572 | ||||||
| Total Current Liabilities | 2,573,962 | 7,160,506 | ||||||
| Debt, long-term | 519,882 | - | ||||||
| Total Liabilities | 3,093,844 | 7,160,506 | ||||||
| Commitments and Contingencies (Note 7) | ||||||||
| Stockholders' Equity (Deficit): | ||||||||
| Common Stock, $0.001 par value, 300,000,000 shares authorized, 204,294,292 and 119,402,009 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 204,294 | 119,402 | ||||||
| Preferred Stock - Series B (liquidation preference of $4 per share), $0.001 par value, 2,500,000 shares authorized, 1,292,870 shares issued and outstanding at June 30, 2017 and December 31, 2016 | 1,293 | 1,293 | ||||||
| Preferred Stock - Series C (liquidation preference $100 per share), $0.001 par value, 200,000 and 150,000 shares authorized, 106,704 and 109,352 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 107 | 109 | ||||||
| Preferred Stock - Series D (liquidation preference $100 per share), $0.001 par value, 50,000 and 0 shares authorized, 37,250 and 0 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 37 | - | ||||||
| Additional paid in capital | 41,368,698 | 33,456,325 | ||||||
| Accumulated deficit | (38,478,376 | ) | (35,794,206 | ) | ||||
| Total Stockholders' Equity (Deficit) | 3,096,053 | (2,217,077 | ) | |||||
| Total Liabilities and Stockholders' Equity (Deficit) | $ | 6,189,897 | $ | 4,943,429 | ||||
| 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, |
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| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Net Sales | $ | 1,934,953 | $ | 482,969 | $ | 3,464,705 | $ | 1,066,267 | ||||||||
| Cost of Sales | 1,225,253 | 522,703 | 2,198,865 | 1,256,114 | ||||||||||||
| Gross Profit (Loss) | 709,700 | (39,734 | ) | 1,265,840 | (189,847 | ) | ||||||||||
| Operating Expenses | ||||||||||||||||
| Selling and marketing | 1,477,154 | 1,068,483 | 3,060,685 | 2,137,396 | ||||||||||||
| General and administrative | 1,617,842 | 1,548,556 | 3,035,750 | 2,616,906 | ||||||||||||
| Total operating expenses | 3,094,996 | 2,617,039 | 6,096,435 | 4,754,302 | ||||||||||||
| Operating Loss | (2,385,296 | ) | (2,656,773 | ) | (4,830,595 | ) | (4,944,149 | ) | ||||||||
| Other (Expense) Income | ||||||||||||||||
| Change in fair value of derivative liabilities | (4,168 | ) | (1,164,905 | ) | 2,239,350 | (25,540 | ) | |||||||||
| Interest (expense) income | (24,432 | ) | (16,990 | ) | (44,917 | ) | (29,204 | ) | ||||||||
| Other (expense) income | - | - | (48,008 | ) | (18,923 | ) | ||||||||||
| (28,600 | ) | (1,181,895 | ) | 2,146,425 | (73,667 | ) | ||||||||||
| NET LOSS | (2,413,896 | ) | (3,838,668 | ) | (2,684,170 | ) | (5,017,816 | ) | ||||||||
| Declared dividends on Preferred Stock | 65,362 | 66,223 | 130,006 | 131,428 | ||||||||||||
| Net loss attributable to common stockholders | $ | (2,479,258 | ) | $ | (3,904,891 | ) | $ | (2,814,176 | ) | $ | (5,149,244 | ) | ||||
| Loss per common share, basic and diluted | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.05 | ) | ||||
| Weighted average common shares outstanding, basic and diluted | 202,261,571 | 112,948,441 | 165,639,474 | 112,585,867 | ||||||||||||
| The accompanying notes are an integral part of these condensed consolidated financial statements. |
| TRUE DRINKS HOLDINGS, INC. | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (Unaudited) | |||||||||
| Six Months Ended June 30, |
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| 2017 | 2016 | ||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
| Net loss | $ | (2,684,170 | ) | $ | (5,017,816 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities | |||||||||
| Depreciation | 2,667 | 2,223 | |||||||
| Amortization | 60,000 | 70,588 | |||||||
| Provision for bad debt expense | (18,204 | ) | 140,152 | ||||||
| Provision for inventory losses | (110,000 | ) | 110,000 | ||||||
| Change in estimated fair value of derivative liabilities | (2,239,350 | ) | 25,540 | ||||||
| Fair value of common stock issued for services | 360,500 | 18,000 | |||||||
| Stock based compensation | 163,736 | 123,108 | |||||||
| Change in operating assets and liabilities: | |||||||||
| Accounts receivable | (1,083,906 | ) | 1,497,958 | ||||||
| Inventory | 67,282 | 812,327 | |||||||
| Prepaid expenses and other current assets | (156,696 | ) | (150,641 | ) | |||||
| Accounts payable and accrued expenses | 1,615,391 | (462,510 | ) | ||||||
| Net cash used in operating activities | (4,022,750 | ) | (2,831,071 | ) | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
| Restricted cash | (104 | ) | (104 | ) | |||||
| Purchase of property and equipment | - | (8,992 | ) | ||||||
| Net cash used in investing activities | (104 | ) | (9,096 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
| Dividends paid | - | (1,421 | ) | ||||||
| Proceeds from warrants exercised for cash | - | 45,000 | |||||||
| Proceeds from issuance of Series C Preferred Stock | - | 3,500,000 | |||||||
| Proceeds from issuance of Series D Preferred Stock | 4,020,000 | - | |||||||
| Borrowings on debt | - | 36,075 | |||||||
| Principal repayments on debt | (151,188 | ) | - | ||||||
| Net borrowings on line-of-credit facility | 161,549 | (403,778 | ) | ||||||
| Net cash provided by financing activities | 4,030,361 | 3,175,876 | |||||||
| NET INCREASE IN CASH | 7,507 | 335,709 | |||||||
| CASH AND CASH EQUIVALENTS - beginning of period | $ | 15,306 | $ | 376,840 | |||||
| CASH AND CASH EQUIVALENTS - end of period | $ | 22,813 | $ | 712,549 | |||||
| SUPPLEMENTAL DISCLOSURES | |||||||||
| Interest paid in cash | $ | 45,022 | $ | 23,740 | |||||
| Non-cash financing and investing activities: | |||||||||
| Conversion of preferred stock to common stock | $ | 3,732 | $ | 699 | |||||
| Dividends paid in common stock | $ | 130,723 | $ | 68,441 | |||||
| Dividends declared but unpaid | $ | 130,006 | $ | 131,428 | |||||
| Conversion of notes payable and accrued interest to Series C preferred stock | $ | - | $ | 500,000 | |||||
| Warrants exchanged for common stock | $ | 5,863,278 | $ | - | |||||
| Notes payable issued in exchange for accounts payable | $ | 1,049,564 | $ | - | |||||
| Warrants issued for services | $ | 29,000 | $ | - | |||||
| Warrants issued in connection with Preferred Offering | $ | 2,381,931 | $ | 1,778,110 | |||||
| The accompanying notes are an integral part of these condensed consolidated financial statements. |
