[X]
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2013
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or
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[ ]
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Nevada
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84-1575085
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(State of incorporation)
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(I.R.S. Employer Identification Number)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock ($0.001 par value)
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Over the Counter
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Large accelerated filer [ ]
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Accelerated filer [ ]
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Non-accelerated filer [ ]
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Smaller reporting company [X]
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Page
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36 | ||
36 | ||
37 |
●
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the formulation, manufacturing, packaging, labeling, holding, storage, distribution, advertising and sale of our products; and
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●
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product claims and advertising, including direct claims and advertising by us, as well as claims and advertising by independent distributors, for which we may be held responsible.
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●
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proper new product selection;
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●
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successful sales and marketing efforts;
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●
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timely delivery of new products;
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●
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availability of raw materials;
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●
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pricing of raw materials;
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●
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regulatory allowance of the products; and
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●
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customer acceptance of new products.
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High
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Low
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|||||||
2013
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||||||||
First Quarter
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$
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3.50
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*
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$
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0.02
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|||
Second Quarter
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$
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2.25
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*
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$
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0.85
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*
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||
Third Quarter
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$
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1.04
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*
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$
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0.55
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*
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||
Fourth Quarter
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$
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0.64
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*
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$
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0.20
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*
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||
2012
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||||||||
First Quarter
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$
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0.06
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$
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0.01
|
||||
Second Quarter
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$
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0.09
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$
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0.03
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||||
Third Quarter
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$
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0.09
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$
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0.05
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||||
Fourth Quarter
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$
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0.07
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$
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0.02
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*
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Bid price reflects the 1-for-100 reverse split of our Common Stock, which reverse split took effect on January 22, 2013.
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Product Category
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Year Ended
December 31,
2013
% of Sales
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|||
AquaBall™
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90 | % | ||
Bazi®
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10 | % |
(a)
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Evaluation of disclosure controls and procedures.
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(b)
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Management's Annual Report on Internal Control over Financial Reporting.
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(c)
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Changes in internal controls over financial reporting.
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Name
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Age
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Position
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|||
Timothy Lane
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65 |
Chairman
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|||
Louis Imbrogno
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68 |
Director
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|||
Carl Wistreich
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47 |
Director
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|||
Scot Cohen | 44 | Director | |||
Lance Leonard
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48 |
President, Chief Executive Officer and Director
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|||
Daniel Kerker
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41 |
Chief Financial Officer, Treasurer and Secretary
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|||
Kevin Sherman
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43 |
Chief Marketing Officer
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Name and
Principal
Position
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Year
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Salary ($)
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Bonus ($)
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Stock Awards ($)
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Option Awards
($)
(1)
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Non-Equity Incentive Plan Compensation ($)
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All Other Compensation ($)
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Total ($)
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||||||||||||||||||||||
Lance Leonard,
Chief Executive Officer, Director
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2013
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$
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250,000
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$
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75,000
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$
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-
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$
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112,250
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$
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-
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$
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-
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$
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437,250
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|||||||||||||||
2012
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$
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114,583
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$
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-
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$
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-
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$
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51,448
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$
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-
|
$
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-
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$
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166,031
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||||||||||||||||
Daniel Kerker,
Chief Financial Officer
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2013
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$
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180,000
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$
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88,750
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$
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-
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$
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39,375
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$
|
-
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$
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-
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$
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308,125
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|||||||||||||||
2012
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$
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135,010
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$
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-
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$
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-
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$
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32,813
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$
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-
|
$
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-
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$
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167,823
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||||||||||||||||
Kevin Sherman,
Chief Marketing Officer
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2013
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$
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132,500
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$
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37,500
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$
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-
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$
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42,385
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$
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-
|
$
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-
|
$
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212,385
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|||||||||||||||
2012
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$
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31,500
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$
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-
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$
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-
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$
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9,350
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$
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-
|
$
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-
|
|
$
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40,850
|
(1)
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The Company uses a Black-Scholes option-pricing model (the “
Black-Scholes Model
”) to estimate the fair value of the stock option grant. The use of a valuation model requires the company to make certain assumptions with respect to selected model inputs. Expected volatility was calculated based on the historical volatility of the company’s stock price. In the future the average expected life will be based on the contractual term of the option and expected employee exercise and post-vesting employment termination behavior. Currently it is based on the simplified approach provided by SAB 107. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term equal to the expected life assumed at the date of the grant. The following were the factors used in the Black Sholes Model to calculate the compensation expense:
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For the year ended
December 31, 2013
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||||
Stock price volatility
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75
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%
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||
Risk-free rate of return
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0.65
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%
|
||
Annual dividend yield
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-
|
|||
Expected life
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2.5 Years
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Name
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Grant
Date
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All Other
Option Awards:
Number of Securities
Underlying Options
(#)
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Exercise or
Base Price
of Option
Awards
($/ Sh)
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||||||
Lance Leonard
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N/A
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N/A
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N/A
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||||||
Daniel Kerker
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N/A
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N/A
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N/A
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||||||
Kevin Sherman
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July 1, 2013
|
245,739
|
$
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1.10
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Name
|
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Fees earned or Paid in Cash
($)
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Option
Awards
($)
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Stock
Awards
($)
|
|
Total
($)
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||||||||
Timothy Lane
|
|
$
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50,000
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(1)
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$
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-
|
|
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$
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-
|
|
|
$
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50,000
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|
Carl Wistreich
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$
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30,000
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(2)
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$
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-
|
|
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$
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-
|
|
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$
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30,000
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|
Lou Imbrogno
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$
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30,000
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(3)
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$
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-
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$
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-
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$
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30,000
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(1)
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Mr. Lane received cash totaling $12,500 in 2013. Additionally, Mr. Lane elected to receive shares of Series B Preferred and Warrants on terms substantially similar to the Series B Offering in lieu of $25,000 of earned fees. The remaining amount was unpaid as of December 31, 2013.
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(2)
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Mr. Wistreich received cash totaling $7,500 in 2013. Additionally, Mr. Wistreich elected to convert $15,000 worth of accrued fees into common shares at a price of $1.10 per share in July 2013. Additionally, Mr. Wistreich elected to receive shares of Series B Preferred and Warrants on terms substantially similar to the Series B Offering in lieu of $20,000 of earned fees. The remaining amount was unpaid as of December 31, 2013.
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(3)
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Mr. Imbrogno received cash totaling $7,500 in 2013. Additionally, Mr. Imbrogno elected to receive shares of Series B Preferred and Warrants on terms substantially similar to the Series B Offering in lieu of $25,000 of earned fees. The remaining amount was unpaid as of December 31, 2013.
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Option Awards
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||||||||
Name
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Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(1)
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Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
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Equity Incentive
Plan Awards:
Number of Securities
Underlying
Unexercised
Unearned Options (#)
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Option
Exercise
Price
($)
|
Option
Expiration
Date
|
|||
Lance Leonard
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-
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307,174
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921,522
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$
|
0.6104
|
7/14/2015
|
||
Daniel Kerker
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-
|
184,305
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245,740
|
$
|
0.6104
|
2/28/2015
|
||
Kevin Sherman
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-
|
61,435
|
368,609
|
$
|
1.0169
|
8/31/2015
|
||
Tim Lane
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-
|
409,565
|
327,217
|
$
|
0.6104
|
8/28/2015
|
||
Louis Imbrogno
|
-
|
204,783
|
163,826
|
$
|
0.6104
|
8/28/2015
|
||
Carl Wistreich
|
-
|
204,783
|
163,826
|
$
|
0.6104
|
8/28/2015
|
(i)
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Each of our officers and directors;
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(ii)
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All officer and directors as a group; and
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(iii)
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Each person known by us to beneficially own five percent or more of the outstanding shares of our Series B Preferred and Common Stock. Percent ownership is calculated based on 2,082,870 shares of Series B Preferred and 34,451,822 shares Common Stock outstanding at March 28, 2014.
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Name and Address
(1)
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Series B Convertible Preferred Stock
(2)(3)
|
% Ownership
of Class
(4)
|
||||||
Timothy Lane
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6,250 | * | ||||||
Carl Wistreich
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21,004 | 1.0 | % | |||||
Lou Imbrogno
|
7,500 | * | ||||||
Scot Cohen
(5)
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166,250 | 8.0 | % | |||||
Total Officers and Directors
(1)
|
201,004 | 9.7 | % | |||||
Wolverine Flagship Fund Trading Limited
|
200,000 | 9.6 | % | |||||
Falcon Fund, Ltd.
|
125,000 | 6.0 | % | |||||
First Bank & Trust as custodian of Ronald L. Chez IRA
|
425,000 | 20.4 | % | |||||
V3 Capital Partners LLC
|
153,750 | 7.4 | % | |||||
Iroquois Master Fund Ltd.
|
125,000 | 6.0 | % | |||||
Diker Micro Cap LP Fund
|
125,000 | 6.0 | % | |||||
Wolfson Equities LLC
|
187,500 | 9.0 | % |
*
|
Less than 1%.
|
(1)
|
Each of the Company’s officers was excluded from this table, as none of our officers hold shares of Series B Preferred. Unless otherwise indicated, the address for each stockholder is 18552 MacArthur Blvd., Suite 325, Irvine, CA 92612.
|
(2)
|
Subject to the limitations in the Certificate of Designation, each share of Series B Preferred is convertible into that number of shares of Common Stock equal to the Stated Value, divided by the Conversion Price, as defined in the Certificate of Designation. As of March 28, 2014, the Conversion Price was $0.25.
|
(3)
|
Pursuant to the Certificate of Designation, shares of
Series B Preferred may not be converted or exercised, as applicable, to the extent that the holder and its affiliates would own more than 9.99% of the Company’s outstanding Common Stock after such conversion. The Certificate of Designation also
entitles each share of Series B Preferred to vote, on an as converted basis, along with the Common Stock;
provided, however,
that the Series B Preferred may not be voted to the extent that the holder and its affiliates would control more than 9.99% of the Company’s voting power.
|
(4)
|
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.
|
(5)
|
Includes 153,750 shares of Series B Preferred directly held by V3 Capital Partners and 12,500 shares directly held by the Scot Jason Cohen Foundation. Mr. Cohen is the Managing Partner of V3 Capital Partners and is an officer of the Scot Jason Cohen Foundation.
|
Name, Address and Title (if applicable)
(1)
|
Number of Shares
(1)
|
% Ownership
of Class
(2)
|
||||||
Lance Leonard
(3)
President, Chief Executive Officer and Director
|
504,185 | 1.4 | % | |||||
Daniel Kerker
(4)
Chief Financial Officer, Treasurer and Secretary
|
359,829 | 1.0 | % | |||||
Kevin Sherman
(5)
Chief Marketing Officer
|
251,002 | * | ||||||
Timothy Lane
(6)
Chairman
|
707,558 | 2.0 | % | |||||
Carl Wistreich
(7)
Director
|
475,457 | 1.4 | % | |||||
Lou Imbrogno
(8)
Director
|
516,639 | 1.5 | % | |||||
Scot Cohen
(9)
Director
|
3,435,835 | 9.1 | % | |||||
Total officers and directors
(10)
|
6,544,539 | 16.2 | % | |||||
MKM Opportunity Master Fund, Ltd
28 West 44th Street, 16th Floor
New York, NY 10036
|
3,673,799 | 10.7 | % | |||||
Red Square Fund One SPC
c/o NWT Fund Adminstrators Limited
Rue de la Pelisserie 16,
PO Box 3501
1211 Geneva 3, Switzerland
|
2,251,616 | 6.5 | % | |||||
Joseph D. Kowal
4282 Skylark St.
Irvine, CA 92604
|
2,529,998 | 7.3 | % | |||||
Wolverine Flagship Fund Trading Limited
(11)(12)
175 W. Jackson Blvd., Suite 200
Chicago, Illinois 60604
|
6,210,555 | 9.9 | % | |||||
Falcon Fund, Ltd.
(13)
5956 Sherry Lane, Suite 1810
Dallas, Texas 75225
|
2,583,334 | 7.0 | % | |||||
First Bank & Trust as custodian of Ronald L. Chez IRA
(12)(14)
820 Church Street
Evanston Illinois, 60201
|
7,750,001 | 9.9 | % | |||||
V3 Capital Partners LLC
(15)
20 East 20th Street, Apt. 6
New York, NY 10003
|
3,177,501 | 8.4 | % | |||||
Iroquois Master Fund Ltd.
(16)
c/o Iroquois Capital Management LLC
641 Lexington Ave., 26th Floor
New York, NY 10022
|
2,583,333 | 7.0 | % | |||||
Diker Micro Cap LP Fund
(17)
730 5th Ave 15th Floor
New York, NY 10009
|
2,583,333 | 7.0 | % | |||||
Wolfson Equities, LLC
(12)(18)
1 State Street Plaza, 29th Floor
New York, NY 10004
|
3,875,000 | 9.9 | % |
*
|
Less than 1%
|
(1)
|
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. All entries exclude beneficial ownership of shares issuable pursuant to options that have not vested or that are not otherwise exercisable as of the date hereof or which will not become vested or exercisable within 60 days of March 28, 2014.
|
(2)
|
Percentages are rounded to nearest one-tenth of one percent. Percentages are based on 34,451,822 shares of Common Stock outstanding. Options that are presently exercisable or exercisable within 60 days are deemed to be beneficially owned by the person holding the options for the purpose of computing the percentage ownership of that person, but are not treated as outstanding for the purpose of computing the percentage of any other person.
|
(3)
|
Comprised of 33,185 shares held of record and 471,000 shares issuable pursuant to options which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(4)
|
Comprised of 359,829 shares issuable pursuant to options which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(5)
|
Comprised of 55,000 shares held of record and 196,002 shares issuable pursuant to options which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(6)
|
Comprised of 5,000 shares held of record, and 573,391 shares issuable pursuant to options, 100,000 shares issuable upon conversion of 6,250 shares of Series B Preferred and 29,167 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(7)
|
Comprised of 18,637 shares held of record, and 327,653 shares issuable pursuant to options, 336,064 shares issuable upon conversion of 21,004 shares of Series B Preferred and 87,137 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(8)
|
Comprised of 33,986 shares held of record, and 327,652 shares issuable pursuant to options, 120,000 shares issuable upon conversion of 7,500 shares of Series B Preferred and 35,000 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(9)
|
Comprised of 2,460,000 shares issuable upon conversion of 153,750 shares of Series B Preferred directly held by V3 Capital Partners, 717,501 shares issuable pursuant to warrants directly held by V3 Capital Partners, 200,000 shares issuable upon conversion of 12,500 shares of Series B Preferred directly held by the Scot Jason Cohen Foundation and 58,334 shares issuable pursuant to warrants directly held by the Scot Jason Cohen Foundation each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
Mr. Cohen is the Managing Partner of V3 Capital Partners and an officer of the Scot Jason Cohen Foundation.
|
(10)
|
Comprised of 145,808 shares held of record, and 2,255,526 shares issuable pursuant to options, 3,216,064 shares issuable upon conversion of 201,004 shares of Series B Preferred and 927,139 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(11)
|
Comprised of 1,610,555 shares held of record, 3,200,000 shares issuable upon conversion of 200,000 shares of Series B Preferred and 1,400,000 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(12)
|
Pursuant to the Certificate of Designation, shares
Series B Preferred may not be converted or exercised, as applicable, to the extent that the holder and its affiliates would own more than 9.99% of the Company’s outstanding Common Stock after such conversion. The Certificate of Designation also
entitles each share of Series B Preferred to vote, on an as converted basis, along with the Common Stock;
provided, however,
that the Series B Preferred may not be voted to the extent that the holder and its affiliates would control more than 9.99% of the Company’s voting power.
Although the percentage ownership for each stockholder reflects the limitations in the Certificate of Designation, the securities reported in this table show the number of shares of Common Stock that would be issuable upon full conversion of the Series B Preferred and full exercise of warrants held by each stockholder. Therefore, the actual number of shares of Common Stock beneficially owned by each stockholder, after giving effect to the limitations in the Certificate of Designation, is less than the number of securities reported herein.
|
(13)
|
Comprised of 2,000,000 shares issuable upon conversion of 125,000 shares of Series B Preferred and 583,334 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(14)
|
Comprised of 6,800,000 shares issuable upon conversion of 425,000 shares of Series B Preferred and 1,983,335 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(15)
|
Comprised of 2,460,000 shares issuable upon conversion of 153,750 shares of Series B Preferred and 717,501 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(16)
|
Comprised of 2,000,000 shares issuable upon conversion of 125,000 shares of Series B Preferred and 583,334 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(17)
|
Comprised of 2,000,000 shares issuable upon conversion of 125,000 shares of Series B Preferred and 583,334 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
(18)
|
Comprised of 3,000,000 shares issuable upon conversion of 187,500 shares of Series B Preferred and 875,000 shares issuable pursuant to warrants, each of which are presently exercisable or which become exercisable within 60 days of March 28, 2014.
|
For the years ended
December 31,
|
||||||||
2012 |
2013
|
|||||||
Audit fees
|
$ | 56,000 | $ | 56,000 | ||||
Audit-related fees
|
- | - | ||||||
Tax fees
|
- | - | ||||||
All other fees
|
- | - | ||||||
Total
|
$ | 56,000 | $ | 56,000 |
|
(a) Exhibits
|
Exhibit No
|
Description
|
|
2.1
|
Agreement and Plan of Merger among Bazi International, Inc., Bazi Acquisition Sub, Inc., GT Beverage Company, Inc. and MKM Capital Advisors, LLC dated as of June 7, 2012, incorporated by reference from Exhibit 2.1 to the Current Report on Form 8-K filed on June 21, 2012.
|
|
3.1
|
Articles of Incorporation, incorporated by reference from Exhibit 3.01 to Form SB-2 filed on February 27, 2001.
|
|
3.1.1
|
Certification of Amendment to the Articles of Incorporation incorporated by reference to Exhibit 3.1.1 filed with Form 10-QSB filed November 14, 2003.
|
|
3.2
|
Amended and Restated By-laws filed with Form 10-KSB on March 3, 2005, as Exhibit 3.2, and incorporated herein by reference.
|
|
3.3
|
Amendment to the Amended and Restated Bylaws of Bazi International, Inc., incorporated by reference from Exhibit 3.1 to the Current Report on Form 8-K filed on October 17, 2012.
|
|
3.3
|
Amended and Restated Articles of Incorporation filed with Form 8-K on August 2, 2010 as Exhibit 3.1, and incorporated herein by reference.
|
|
3.4
|
Certification of Amendment to the Article of Incorporation with Form 8-K on May 20, 2011 as Exhibit 3.1, and incorporated herein by reference.
|
|
3.5
|
Certificate of Amendment to the Articles of Incorporation, incorporated herein by reference from Exhibit 3.1 to the Current Report on Form 8-K filed January 22, 2013.
|
|
4.1
|
Certificate of Designation, Preferences, Rights and Limitations of Series A Convertible Preferred Stock of Bazi International, Inc., incorporated by reference from Exhibit 4.2 to the Current Report on Form 8-K filed on October 17, 2012.
|
|
4.2 |
Certificate of Designation, Preferences, Rights, and Limitations of Series B Convertible Preferred Stock of True Drinks Holdings, Inc., incorporated by reference from Exhibit 3.1 to the Current Report on Form 8-K, filed November 26, 2013.
|
|
4.3 | Form of Warrant, incorporated by reference from Exhibit 10.3 to the Current Report on Form 8-K, filed July 3, 2013. | |
4.4 |
Form of Warrant, incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K, filed November 26, 2013.
|
|
4.5 | Warrant, issued by the Company to Avidbank on November 29, 2013, incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K, filed December 5, 2013. | |
10.1
|
VitaCube Systems Holdings, Inc. 2003 Stock Incentive Plan incorporated by reference to Exhibit 10.1 filed with Form 10-QSB filed November 14, 2003.
|
|
10.1.1
|
Form of Incentive Stock Option Agreement under the 2003 Stock Incentive Plan filed with Form 10-KSB on March 3, 2005, as Exhibit 10.1.1, and incorporated herein by reference.
|
|
10.1.2
|
Form of Nonqualified Stock Option Agreement under the 2003 Stock Incentive Plan filed with Form 10-KSB on March 3, 2005, as Exhibit 10.1.2, and incorporated herein by reference.
|
|
10.2
|
Agreement Concerning the Exchange of Securities by and between the Company and VitaCube Systems, Inc. and the Security Holders of VitaCube Systems, Inc. incorporated by reference to Exhibit 2 filed with Form 8-K filed July 1, 2003.
|
|
10.3
|
Employment
agreement with Lance Leonard, incorporated by reference to Exhibit 10.3 filed with the Annual Report on Form 10-K, filed April 5, 2013.
|
|
10.4
|
Employment a
greement with Dan Kerker, incorporated by reference to Exhibit 10.4 filed with the Annual Report on Form 10-K, filed April 5, 2013.
|
|
10.5
|
Financial statements of GT Beverage Company, LLC for the years ended December 31, 2011 and 2010, incorporated by reference to Exhibit 10.6 filed with the Annual Report on Form 10-K, filed April 5, 2013.
|
|
10.6
|
Placement Agent Agreement, by and between the Company and Axiom Capital Management, Inc., dated May 24, 2013, incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K, filed July 3, 2013.
|
|
10.7 | Form of Secured Convertible Promissory Note, incorporated by reference from Exhibit 10.2 to the Current Report on Form 8-K, filed July 3, 2013. | |
10.8 | Form of Subscription Agreement, incorporated by reference from Exhibit 10.4 to the Current Report on Form 8-K, filed July 3, 2013. | |
10.9 | Form of Amendment to Subscription Agreement, incorporated by reference from Exhibit 10.8 to the Current Report on Form 8-K, filed July 3, 2013. | |
10.10 | Security Agreement, by and between the Company and investors in the Note Offering, dated June 20, 2013, incorporated by reference from Exhibit 10.5 to the Current Report on Form 8-K, filed July 3, 2013. | |
10.11 | Collateral Agent Agreement, by and between the Company and Union Bank, N.A., dated June 20, 2013, incorporated by reference from Exhibit 10.6 to the Current Report on Form 8-K, filed July 3, 2013. | |
10.12 | Escrow Agreement, by and between the Company, Axiom Capital Management, Inc. and Union Bank, N.A., dated June 20, 2013, incorporated by reference from Exhibit 10.7 to the Current Report on Form 8-K, filed July 3, 2013. | |
10.13 | Amendment to Escrow Agreement by and between the Company, Axiom Capital Management, Inc. and Union Bank, N.A., dated June 20, 2013, incorporated by reference from Exhibit 10.9 to the Current Report on Form 8-K, filed July 3, 2013. | |
10.14 | Form of Securities Purchase Agreement, incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K, filed November 26, 2013. | |
10.15 | Form of Registration Rights Agreement, incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K, filed November 26, 2013. | |
10.16 | Loan and Security Agreement, by and between the Company and Avidbank, dated November 29, 2013, incorporated by reference from Exhibit 10.1 to the Current Report on Form 8-K, filed December 5, 2013. | |
10.17 | 2013 Stock Incentive Plan, filed herewith. | |
14.1
|
Code of Ethics filed with Form 10-K on March 31, 2011 and incorporated herein by reference.
|
|
14.2
|
Board Charter filed with Form 10-K on March 31, 2011 and incorporated herein by reference.
|
|
21.1
|
Subsidiaries of True Drinks Holdings,
Inc., incorporated by reference from Exhibit 21.1 filed with the Annual Report on Form 10-K, filed April 5, 2013
|
|
31.1
|
Certification of CEO as Required by Rule 13a-14(a)/15d-14 filed herewith.
|
|
31.2
|
Certification of CFO as Required by Rule 13a-14(a)/15d-14 filed herewith.
|
|
32.1
|
Certification of CEO as Required by Rule 13a-14(a) and Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code filed herewith.
|
|
32.2
|
Certification of CFO as Required by Rule 13a-14(a) and Rule 15d-14(b) (17 CFR 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code filed herewith.
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase
|
Registrant
Date: March 31, 2014
|
True Drinks Holdings, Inc.
/s/ Lance Leonard
|
|
Lance Leonard
|
||
Chief Executive Officer (Principal Executive Officer), Director
|
Date: March 31, 2014
|
/s/ Daniel Kerker
|
|
Daniel Kerker
|
||
Chief Financial Officer (Principal Financial Officer)
|
Date: March 31, 2014
|
/s/ Lance Leonard
|
|
Lance Leonard
|
||
Chief Executive Officer, Director
|
Date: March 31, 2014
|
/s/ Timothy Lane
|
|
Timothy Lane
|
||
Chairman
|
Date: March 31, 2014
|
/s/ Louis Imbrogno
|
|
Louis Imbrogno
|
||
Director
|
Date: March 31, 2014
|
/s/ Carl Wistreich
|
|
Carl Wistreich
|
||
Director
|
||
Date: March 31, 2014 | /s/ Scot Cohen | |
Scot Cohen | ||
Director |
2013
|
2012
|
|||||||
ASSETS
|
||||||||
Current Assets
:
|
||||||||
Cash
|
$
|
3,136,766
|
$
|
4,449
|
||||
Accounts receivable, net
|
175,068
|
130,909
|
||||||
Inventory
|
1,056,756
|
832,874
|
||||||
Prepaid expenses and other current assets
|
591,434
|
268,716
|
||||||
Total Current Assets
|
4,960,024
|
1,236,948
|
||||||
Restricted Cash
|
133,065
|
81,270
|
||||||
Property and Equipment, net
|
8,399
|
25,399
|
||||||
Patents, net
|
1,352,941
|
1,494,118
|
||||||
Trademarks, net
|
48,516
|
98,516
|
||||||
Goodwill
|
3,474,502
|
3,474,502
|
||||||
Other Assets
|
-
|
3,948
|
||||||
Total Assets
|
$
|
9,977,447
|
$
|
6,414,701
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current Liabilities
:
|
||||||||
Accounts payable and accrued expenses
|
$
|
1,222,404
|
$
|
1,292,147
|
||||
Convertible notes payable, net
|
680,000
|
772,000
|
||||||
Term loan
|
1,916,667
|
-
|
||||||
Derivative liabilities
|
1,619,021
|
-
|
||||||
Total Current Liabilities
|
5,438,092
|
2,064,147
|
||||||
Commitments and Contingencies
(Note 8)
|
||||||||
Stockholders’ Equity
:
|
||||||||
Common Stock, $0.001 par value, 40,000,000 shares authorized, 27,885,587 and 1,337,335 shares outstanding at December 31, 2013 and December 31, 2012, respectively
|
27,886
|
1,337
|
||||||
Preferred Stock – Series A (liquidation preference of $10 per share), $0.001 par value, 2,250,000 and 5,000,000 shares authorized, 0 and 1,544,565 shares outstanding at December 31, 2013 and December 31, 2012, respectively
|
-
|
1,545
|
||||||
Preferred Stock – Series B (liquidation preference of $4 per share), $0.001 par value, 2,750,000 and 0 shares authorized, 1,776,923 and 0 shares outstanding at December 31, 2013 and December 31, 2012, respectively
|
1,777
|
-
|
||||||
Additional paid in capital
|
14,751,170
|
7,467,015
|
||||||
Accumulated deficit
|
(10,241,478
|
)
|
(3,119,343
|
)
|
||||
Total Stockholders’ Equity
|
4,539,355
|
4,350,554
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
9,977,447
|
$
|
6,414,701
|
2013
|
2012
|
|||||||
Net Sales
|
$
|
2,649,473
|
$
|
1,021,908
|
||||
Cost of Sales
|
2,127,711
|
749,529
|
||||||
Gross Profit
|
521,762
|
272,379
|
||||||
Operating Expenses
|
||||||||
Selling and marketing
|
2,224,801
|
692,242
|
||||||
General and administrative
|
3,701,094
|
2,580,985
|
||||||
Total operating expenses
|
5,925,895
|
3,273,227
|
||||||
Operating Loss
|
(5,404,133
|
)
|
(3,000,848
|
)
|
||||
Other Expense
|
||||||||
Change in fair value of derivative liabilities
|
1,361,597
|
-
|
||||||
Interest expense- accretion of debt discount
|
(864,921
|
) |
-
|
|||||
Interest expense
|
(1,824,074
|
)
|
(119,942
|
)
|
||||
Other (expense) income
|
(390,604
|
)
|
1,447
|
|||||
(1,718,002
|
)
|
(118,495
|
)
|
|||||
Net Loss
|
$
|
(7,122,135
|
)
|
$
|
(3,119,343
|
)
|
||
Net loss per common share
|
||||||||
Basic and diluted net loss per share
|
$
|
(0.26
|
)
|
$
|
(0.14
|
)
|
||
Weighted average common shares
|
||||||||
outstanding, basic and diluted
(1)
|
27,489,422
|
22,757,712
|
Common Stock
|
Preferred Stock
|
Additional
Paid-In
Capital
|
Retained
Earnings
(Accumulated Deficit)
|
Total
Stockholders'
Equity
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Balance at inception -
January 19, 2012
|
-
|
$
|
-
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||||
Issuance of Common Stock to founders
|
854,500
|
855
|
-
|
-
|
-
|
-
|
855
|
|||||||||||||||||||||
Issuance of Common Stock for services
|
30,000
|
30
|
-
|
-
|
167,520
|
-
|
167,550
|
|||||||||||||||||||||
Issuance of Common Stock for cash
|
367,375
|
367
|
-
|
-
|
3,374,615
|
-
|
3,374,982
|
|||||||||||||||||||||
Issuance of Common Stock for GT Beverage Company, LLC
|
292,690
|
293
|
-
|
-
|
2,926,607
|
-
|
2,926,900
|
|||||||||||||||||||||
Balance at October 15, 2012
|
1,544,565
|
1,545
|
-
|
-
|
6,468,742
|
-
|
6,470,287
|
|||||||||||||||||||||
Effect of Reverse Merger and reverse stock split
|
1,192,335
|
1,192
|
-
|
-
|
726,613
|
-
|
727,805
|
|||||||||||||||||||||
Conversion of Common Stock to preferred stock related to reverse merger
|
(1,544,565
|
)
|
(1,545
|
)
|
1,544,565
|
1,545
|
-
|
-
|
-
|
|||||||||||||||||||
Issuance of Common Stock related to debt financing
|
145,000
|
145
|
-
|
-
|
108,605
|
-
|
108,750
|
|||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
163,055
|
-
|
163,055
|
|||||||||||||||||||||
Net Loss
|
-
|
-
|
-
|
-
|
-
|
(3,119,343
|
)
|
(3,119,343
|
)
|
|||||||||||||||||||
Balance –
December 31, 2012
|
1,337,335
|
$
|
1,337
|
1,544,565
|
$
|
1,545
|
$
|
7,467,015
|
$
|
(3,119,343
|
)
|
$
|
4,350,554
|
|||||||||||||||
Conversion of Preferred Stock to Common Stock
|
25,304,017
|
25,304
|
(1,544,565
|
)
|
(1,545
|
)
|
(23,759
|
)
|
-
|
-
|
||||||||||||||||||
Issuance of Common Stock related to debt financing
|
268,800
|
269
|
-
|
-
|
208,821
|
-
|
209,090
|
|
||||||||||||||||||||
Issuance of Common Stock for debt conversions
|
860,821
|
861
|
-
|
-
|
859,957
|
-
|
860,818
|
|||||||||||||||||||||
Issuance of Preferred Stock for debt conversions, net of warrants issued
|
-
|
-
|
264,423
|
264
|
823,396
|
-
|
823,660
|
|||||||||||||||||||||
Elimination of derivative liability from conversion of debt to preferred stock | - | - | - | - | 64,970 | - | 64,970 | |||||||||||||||||||||
Issuance of Common Stock for services
|
114,614
|
115
|
-
|
-
|
122,135
|
-
|
122,250
|
|||||||||||||||||||||
Issuance of Preferred Stock for services
|
-
|
-
|
17,500
|
18
|
69,982
|
-
|
70,000
|
|||||||||||||||||||||
Issuance of Preferred Stock for cash, net of warrants issued
|
-
|
-
|
1,495,000
|
1,495
|
4,364,488
|
-
|
4,365,983
|
|||||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
794,165
|
-
|
794,165
|
|||||||||||||||||||||
Net Loss
|
-
|
-
|
-
|
-
|
-
|
(7,122,135
|
)
|
(7,122,135
|
)
|
|||||||||||||||||||
Balance
–
December 31, 2013
|
27,885,587
|
$
|
27,886
|
1,776,923
|
$
|
1,777
|
$
|
14,751,170
|
$
|
(10,241,478
|
)
|
$
|
4,539,355
|
2013
|
2012
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$
|
(7,122,135
|
)
|
$
|
(3,119,343
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities
|
||||||||
Depreciation
|
18,298
|
8,668
|
||||||
Amortization
|
191,177
|
114,215
|
||||||
Accretion of deferred financing costs
|
864,921
|
-
|
||||||
Provision for bad debt expense
|
150,000
|
54,396
|
||||||
Change in estimated fair value of derivative
|
(1,361,597
|
)
|
-
|
|||||
Amortization of debt discount
|
1,332,543
|
-
|
||||||
Stock issued to founders
|
-
|
855
|
||||||
Fair value of stock issued for services
|
401,341
|
276,300
|
||||||
Stock based compensation
|
794,165
|
163,055
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(194,159
|
)
|
(185,305
|
)
|
||||
Inventory
|
(223,882
|
)
|
(785,874
|
)
|
||||
Prepaid expenses and other current assets
|
(322,718
|
)
|
(268,716
|
)
|
||||
Other assets
|
3,948
|
(3,948
|
)
|
|||||
Accounts payable and accrued expenses
|
76,210
|
(306,692
|
)
|
|||||
Net cash used in operating activities
|
(5,391,888
|
)
|
(4,052,389
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Change in restricted cash
|
(51,795
|
)
|
(81,270
|
)
|
||||
Purchase of property and equipment
|
(1,298
|
)
|
(7,671
|
)
|
||||
Purchase of trademarks
|
-
|
(6,849
|
)
|
|||||
Net cash used in investing activities
|
(53,093
|
)
|
(95,790
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds from issuance of Common Stock
|
-
|
3,374,982
|
||||||
Proceeds from issuance of Series B Preferred Stock, net
|
5,483,144
|
-
|
||||||
Proceeds from convertible notes payable
|
4,549,000
|
772,000
|
||||||
Proceeds from term loan
|
2,000,000
|
-
|
||||||
Deferred financing costs paid
|
(420,813
|
)
|
-
|
|||||
Repayments on convertible notes payable
|
(2,950,700
|
)
|
-
|
|||||
Repayments on term loan
|
(83,333
|
)
|
-
|
|||||
Net cash provided by financing activities
|
8,577,298
|
4,146,982
|
||||||
CASH OF ACQUIRED COMPANY
|
-
|
5,646
|
||||||
NET INCREASE IN CASH
|
3,132,317
|
4,449
|
||||||
CASH
– beginning of year
|
4,449
|
-
|
||||||
CASH
– end of year
|
$
|
3,136,766
|
$
|
4,449
|
SUPPLEMENTAL DISCLOSURES
|
||||||||
Interest paid in cash
|
$
|
211,247
|
$
|
-
|
||||
Non-cash financing and investing activities:
|
||||||||
Conversion of preferred stock to common stock
|
$
|
25,304
|
$
|
-
|
||||
Conversion of notes payable and accrued interest to common stock
|
$
|
1,836,253
|
$
|
-
|
||||
Warrants issued as deferred financing costs
|
$
|
444,108
|
$
|
-
|
||||
Warrants issued as debt discount
|
$
|
1,332,543
|
$
|
-
|
||||
Elimination of derivative liability from conversion of debt to preferred stock
|
$
|
64,970
|
$
|
-
|
||||
Warrants issued in connection with Series B Offering
|
$
|
1,268,937
|
$
|
-
|
December 31,
2013
|
December 31,
2012
|
|||||
Purchased materials
|
$
|
659,835
|
$
|
473,383
|
||
Finished goods
|
396,921
|
359,491
|
||||
$
|
1,056,756
|
$
|
832,874
|
Amount
|
||||
Property and equipment
|
$
|
26,396
|
||
Patent for spherical bottle (useful life of 11.3 years)
|
1,600,000
|
|||
Goodwill
|
2,414,642
|
|||
Total assets acquired
|
4,041,038
|
|||
Accounts payable, accrued expenses and other current liabilities
|
(1,114,138
|
)
|
||
Total liabilities assumed
|
(1,114,138
|
)
|
||
Total allocation of purchase price consideration
|
$
|
2,926,900
|
Amount
|
||||
Cash
|
$
|
5,646
|
||
Inventory
|
47,000
|
|||
Customer List (useful life of 2 years)
|
100,000
|
|||
Goodwill
|
1,059,860
|
|||
Total assets acquired
|
1,212,506
|
|||
Accounts payable, accrued expenses and other current liabilities
|
(484,701
|
)
|
||
Total liabilities assumed
|
(484,701
|
)
|
||
Total allocation of purchase price consideration
|
$
|
727,805
|
Pro Forma (Unaudited)
|
||||
Year Ended December 31, 2012
|
||||
Revenues
|
$
|
1,488,515
|
||
Net loss
|
$
|
(5,001,653
|
)
|
|
Basic net loss per share
|
$
|
(0.22
|
)
|
Warrants
Outstanding
|
Weighted
Average
Exercise Price
|
|||||||
Outstanding, January 19, 2012
|
- | $ | - | |||||
Outstanding Warrants Assumed with Merger on October 15, 2012
|
145,185 | 52.00 | ||||||
Exercised
|
- | - | ||||||
Expired
|
(12,845 | ) | 154.00 | |||||
Outstanding, December 31, 2012
|
132,340 | $ | 43.00 |
Granted
|
12,470,514
|
0.30
|
||||||
Exercised
|
-
|
-
|
||||||
Expired
|
(12,387
|
)
|
3.20
|
|||||
Outstanding, December 31, 2013
|
12,590,467
|
$
|
0.55
|
Warrants Outstanding
|
Weighted Average
Exercise Price Per Share
|
Weighted Average
Remaining Life (Yrs)
|
||||||||
62,453
|
$
|
30.00
|
2.06
|
|||||||
57,500
|
$
|
25.00
|
0.50
|
|||||||
3,038,243
|
$
|
0.25
|
4.56
|
|||||||
9,432,271
|
$
|
0.30
|
4.90
|
|||||||
12,590,467
|
$
|
0.55
|
4.79
|
2013
|
||||
Expected life
|
2.5 years
|
|||
Estimated volatility
|
75.0 | % | ||
Risk-free interest rate
|
0.65 | % | ||
Dividends
|
- |
Number of
Shares
|
Weighted-Average
Exercise Price
|
|||||||
Options outstanding at January 19, 2012
|
-
|
$
|
-
|
|||||
Exercised
|
-
|
-
|
||||||
Granted
|
3,870,387
|
0.69
|
||||||
Forfeited
|
-
|
-
|
||||||
Expired
|
-
|
-
|
||||||
Options outstanding at December 31, 2012
|
3,870,387
|
$
|
0.69
|
Exercised
|
-
|
-
|
||||||
Granted
|
245,739
|
1.10
|
||||||
Forfeited
|
(122,868
|
)
|
1.02
|
|||||
Expired
|
-
|
-
|
||||||
Options outstanding at December 31, 2013
|
3,993,258
|
$
|
0.70
|
Outstanding Options
|
||||||||||||||||||||||
Weighted Average
|
Exercisable Options
|
|||||||||||||||||||||
Remaining
|
Aggregate
|
Aggregate
|
||||||||||||||||||||
Range of
|
Contractual Life
|
Intrinsic
|
Intrinsic
|
|||||||||||||||||||
Exercise Prices
|
Number
|
(Years)
|
Value
|
Number
|
Value
|
|||||||||||||||||
$
|
0.61
|
3,133,172
|
3.17
|
$
|
-
|
1,310,610
|
$
|
-
|
||||||||||||||
$
|
1.10
|
245,739
|
4.50
|
-
|
-
|
-
|
||||||||||||||||
$
|
1.017
|
614,347
|
3.60
|
-
|
245,740
|
$
|
-
|
|||||||||||||||
Totals
|
3,993,258
|
3.32
|
$
|
-
|
1,556,350
|
$
|
-
|
December 31,
2013
|
December 31,
2012
|
||||||
Patents and trademarks
|
$
|
1,706,849
|
$
|
1,706,849
|
|||
Accumulated amortization
|
(305,392
|
)
|
(114,215
|
)
|
|||
$
|
1,401,457
|
$
|
1,592,634
|
Patent and trademark amortization
|
||||
2014
|
$
|
168,042
|
||
2015
|
145,172
|
|||
2016
|
141,177
|
|||
2017
|
141,177
|
|||
2018
|
141,177
|
|||
2019 and therafter
|
664,712
|
|||
$
|
1,401,457
|
2013
|
2012
|
||||||
Deferred tax asset –NOL’s
|
$
|
3,800,000
|
$
|
1,160,000
|
|||
Less valuation allowance
|
(3,800,000
|
)
|
(1,160,000
|
)
|
|||
Net deferred tax asset
|
$
|
-
|
$
|
-
|
Expected life
|
5 years
|
||
Estimated volatility
|
75.0% | ||
Risk-free interest rate
|
0.07% - 0.10% | ||
Expected dividends
|
None
|
Amount
|
||||
Outstanding, December 31, 2012
|
$
|
772,000
|
||
Notes issued
|
4,549,000
|
|||
Notes repaid
|
(2,950,700
|
)
|
||
Notes converted to Common Stock
|
(1,690,300
|
)
|
||
Debt discount recorded
|
(1,332,543
|
)
|
||
Debt discount amortized
|
1,332,543
|
|||
Outstanding December 31, 2013
|
$
|
680,000
|
- |
Level 1
: Observable inputs such as quoted prices in active markets;
|
- |
Level 2
: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
- |
Level 3
: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||
Total carrying value
|
Quoted market prices in active markets
|
Internal Models with significant observable market parameters
|
Internal models with significant unobservable market parameters
|
|||||||||||||
Derivative liabilities
|
$ | 1,619,021 | $ | – | $ | – | $ | 1,619,021 |
Recurring Fair Value Measurements
|
||||||||||||
Changes in Fair Value Included in Net Loss
For the Year Ended December 31, 2013
|
||||||||||||
Revenues
|
Expenses
|
Total
|
||||||||||
Derivative liabilities
|
$ | 1,361,597 | $ | – | $ | 1,361,597 |
December 31, 2012
|
Recorded new Derivative Liabilities
|
Write off of Derivative Liabilities
|
Change in Estimated Fair Value Recognized in Results of Operations
|
December 31, 2013
|
||||||||||||||||
Derivative liabilities
|
$ | – | $ | 3,218,417 | $ | (237,799 | ) | $ | (1,361,597 | ) | $ | 1,619,021 |
1. I have reviewed this annual report on Form 10-K of True Drinks Holdings, Inc.;
|
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles
|
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 31, 2014 |
/s/ Lance Leonard
|
Lance Leonard
|
|
Chief Executive Officer
|
1. I have reviewed this annual report on Form 10-K of True Drinks Holdings, Inc.;
|
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles
|
c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 31, 2014 |
/s/ Dan Kerker
|
Dan Kerker
|
|
Chief Financial Officer and Principal Accounting Officer
|
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 31, 2014 |
/s/
Lance Leonard
|
Lance Leonard
|
|
Chief Executive Officer
|
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
March 31, 2014 |
/s/
Dan Kerker
|
Dan Kerker
|
|
Chief Financial Officer and Principal Accounting Officer
|