True Drinks Holdings, Inc. (OTCMKTS:TRUU) Continues Crashing On Record Volume

On November 13 True Drinks Holdings, Inc. (OTCMKTS:TRUU) filed their financial report for the third quarter of 2014 and since then their stock has been hurtling towards the bottom of the chart. Yesterday the company suffered another severe correction and lost 14% closing at $0.238. The last time the stock traded at such levels was at the very start of the year. During yesterday’s session the record number of 2.7 million shares got traded. As a whole in just three sessions TRUU have lost close to 40% of their share price.

So, let’s see what the company had to report as financial results for the quarter ending September 30:

• $58 thousand cash
• $2.8 million total current assets
• $7 million total current liabilities
• $1 million net sales
• $1.6 million net loss

If those numbers represented some other pennystock company the balance sheet could be potentially viewed as not that bad. For TRUU though the report showed a significant step backwards. In just nine months they have burned through $3.1 million in cash. The working capital deficit increased to $4 million while the accumulated deficit has reached $17 million. It is true that net sales doubled the amount from the same period last year but same cannot be said for the gross profit – $86 thousand for Q3, 2014 against $111 thousand for Q3, 2013.

On the day the financial report was filed TRUU also held a conference call but it failed to prevent the horrible price drop. Still, according to the management team the company’s future is bright indeed. They were able to receive an order from Sam’s Club totaling $1.4 million for November while through the issuance of promissory notes the cash reserves received a $2 million boost. TRUU expects that next year in addition to their existing partners like Walmart and Sam’s Club they will also add Target. A new line of products is also scheduled to launch in April, 2015. TRUU certainly has a lot of plans but they will have to show improved bottom line in order to lure investors back.

Until then the company should be approached with caution. Having depreciated so fast the stock could at some point bounce but if it will turn into a more prolonged recovery remains to be seen.