True Drinks Holdings, Inc. (OTCMKTS:TRUU) Plunges For The Bottom After Filing Quarterly Report
On Friday the stock of True Drinks Holdings, Inc. (OTCMKTS:TRUU) crashed hard and wiped 20% of its value. It opened at $0.37 but almost immediately began sliding downwards and continued to so for the rest of the session. At the time of the closing bell the stock had already dropped to $0.295, just a cent above the intraday low of $0.285. The crash took place on a selling volume of more than 1 million shares. The company has seen such traded volumes on only a couple of occasions since the start of 2014.
The depressing chart performance came just a day after TRUU filed its quarterly report for the period ending September 30. Although the report showed a 105% increase in year-over-year revenues for the quarter the rest of the company’s financial results weren’t nearly as encouraging:
• $58 thousand cash
• $2.8 million total current assets
• $7 million total current liabilities
• $1 million net sales
• $1.6 million net loss
At the end of 2013 TRUU had more than $3.1 million in cash but in just 9 months they managed to burn through almost all of them. The amount of accounts receivable also doubled compared to the start of the year. The working capital deficit has surpassed $4 million. Even though net sales indeed showed a significant increase compared the same quarter last year gross profit actually fell down – 86.7 thousand for Q3, 2014 compared to 111 thousand for Q3, 2013. Currently TRUU‘s accumulated deficit stands at $17 million.
The number of outstanding shares has also been steadily growing. On November 14, 2013 there were 27 million outstanding shares while as of November 13, this year, there were 42.6 million outstanding shares.
The company has been able to issue a couple of secured promissory notes totaling $1.3 million and this new financial injection should be enough to sustain their operations for a while. TRUU is planning to issue additional notes during the 4th quarter of the year. This month they also received a $1.4 million order to 612 Sam’s Clubs.
The quarterly results and Friday’s massive crash mean that TRUU should be approached only after doing extensive research. Be sure to weigh all the risks around the company before you put any amount of money on the line.
