True Drinks Holdings Inc. (OTC PINK: TRUU), a company dedicated to all-natural, vitamin-enhanced drinks and whose flagship product, AquaBall™ Naturally Flavored Water, has been a success, reported their Q2 earnings after the closing bell on Thursday. Shares of TRUU stock have been declining this month after spiking to 0.40 at the end of July, a 52 Wk High, without any rhyme or reason for the upward move. Having signed some significant distribution deals over the past few weeks for their top product, the gain in sales could mean gains for TRUU stock once the numbers are properly imbibed.
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Lance Leonard, CEO of True Drinks, has done what any investor would expect from a development stage company’s management. Q2 highlights showed:
- Revenues for Second Quarter up 79% over year ago period to $2.1 million;
- Agreed to extension of Disney Licensing Agreement which was signed in August;
- New Distribution agreements with Jetro Cash & Carry, RBI Distributing, and Central Beverages;
- Same store sales grew from $19.43 per store per week to $46.66 per week versus same period last year, the highest in the category.
Those numbers and achievements become more significant when considering that revenues for the six months ended June 30, 2015 were $2,848,896 compared to $1,811,674 for the six months ended June 30, 2014 – more than $1,000,000 increase. In recent weeks, True Drinks has announced deals with Capitol Beverage Sales, a family-run Anheuser-Busch Distributor, for the distribution of AquaBall in the Minneapolis – St. Paul area and, just yesterday, a distribution deal with RBI Beverages for the Tulsa, Oklahoma area.
With increased revenues comes increased selling and marketing expenses and True Drinks has seen those grow from $1,575,874 during the six months ended June 30, 2014 to $1,971,103 for the recent six months ended, an increase of around $400,000. What’s on their side though is how they are able to reach their target consumers (kids, young adults, and their guardians) through their licensing agreements with Disney and Marvel for use of their characters: a ploy which not only attracts consumers in their target market to the product, but brings them back for more.
What is unique is how True Drinks is financing themselves via accredited investors through the sales of Preferred Stock, convertible at $0.15 per share. As of August 14, 2015, the Company had received notices for the conversion of 74,546 shares of Series C Preferred into 49,697,335 shares of TRUU stock.
TRUU shares are currently right at their 50Day and just 0.01 above their 200Day which shows support is prevalent for entries at this level. With the conversion rate so close to the current PPS and relatively bullish revenue growth numbers to help support the PPS at this level, a slow, but steady accumulation period could be in the future for the ticker in anticipation of a Q3 results release and/or a connection with the upcoming Star Wars film due to be released.
Find out more about TRUU shares here: $TRUU
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