Charlies Chalk Dust recapitalises, merges with True Drinks

True Drinks acquired all outstanding interests in Charlie’s in exchange for the issuance by True Drinks of units consisting of shares, preferred stock and warrants. Following the Exchange, the former members of Charlie’s and participants in the Share Exchange own approximately 87.55% of the shares of True Drinks.

The Exchange was based on a combined value of Charlie’s and True Drinks of approximately $105 million. Charlie’s net revenues were $20.8 million in 2018 and $12.2 million in 2017, representing 70.4% year-over-year growth in revenue. Charlie’s anticipates continued strong growth in 2019 with projected net revenues for the quarter ending March 31, 2019 of approximately $6.8 million.

In connection with the Exchange, Charlie’s closed a private placement transaction with investors, led by Vinny Smith, the former owner and chairman of Quest Software and founder of Toba Capital and Gron Ventures. The Private Placement resulted in gross proceeds of approximately $27.5 million, and after the payment to Charlie’s founders and other costs and expenses incurred in connection with the Exchange, approximately $5.6 million in net cash proceeds that will be added to True Drink’s balance sheet. Katalyst Securities, LLC acted as the lead placement agent for the Private Placement. Stifel acted as financial advisor to Charlie’s in connection with the Exchange.

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Cahn McKenzie