Attached files
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| 8-K - FORM 8K - Charlie's Holdings, Inc. | truu8k_aug92017.htm |
Exhibit
99.1
True Drinks Announces Record First Half Results
IRVINE,
CA – (Marketwire – August 9, 2017) – True Drinks
Holdings, Inc. (OTC PINK: TRUU), makers of AquaBall(R) Naturally
Flavored Water, the healthiest children’s beverage on the
market with no sugar, preservatives, calories, or artificial
flavors, today announced its financial results for the second
quarter of 2017.
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(R)
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(R). AquaBall(R) is a naturally
flavored, vitamin-enhanced, zero-calorie, preservative-free,
dye-free, sugar-free alternative to juice and soda. AquaBall(R) 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.
Contact:
Investor Relations
True
Drinks, Inc.
18662
MacArthur Blvd., Ste. 110
Irvine,
CA 92612
ir@truedrinks.com
949-203-3500
TRUE DRINKS HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
June
30,
2017
|
December
31,
2016
|
|
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.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
Three
Months Ended
June
30,
|
Six
Months Ended
June
30,
|
||
|
|
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,
|
|
|
|
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.