True Drinks Announces Q3'2016 Financial Results

By November 15, 2016Latest News

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.