View Corporate Presentation

March 2016
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Alkaline88 is a publicly traded company. The information contained in this presentation is confidential and
is not intended to be used to trade in our securities. We appreciate your support and if you have any
questions regarding our company and its operations, please refer to the SEC website, www.sec.gov.
Notice Regarding Forward-Looking Statements and Health Claims
This presentation contains "forward-looking statements." Statements in this presentation that are not purely historical are forward-looking statements and include any
statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, The Alkaline Water Company
Inc.’s (the “Company”) statements regarding the Company’s intention to provide the highest quality alkaline drinking water to the largest consumer audience possible; the
Company’s estimated sales revenue of $7 million for fiscal year 2016, experiencing 89% year over year growth; the Company’s estimated sales revenue of $18 million for the
fiscal 2017; the Company’s estimated total revenue of $2 million for Q4 of fiscal 2015; the Company’s estimation that it will be cash flow neutral by fiscal Q1 ending June 30,
2016; the Company’s expectation to be in over 30,000 stores by the end of this fiscal year; the Company’s intention to continue with its nationwide public relations and
advertising programs featuring Brande Roderick; the Company’s estimates for the income statement for the twelve months ended December 31, 2015; the Company’s estimates
for the balance sheet as of December 31, 2015; the Company’s commitment to become the #1 best selling Alkaline water across the country by the end of 2016; the Company’s
statement regarding the capacity to produce enough water to support up to $4 million a month in sales revenue; and the Company’s projection of over 100% year over year sales
increase.
The material assumptions supporting these forward-looking statements include, among others, that the demand for the Company's products will continue to significantly grow;
that there will be continued expansion of direct store distributor sales; that there will be increased production capacity through implementation of new technology; that there
will be an increase in number of products available for sale to retailers and consumers; that there will be an expansion in geographical areas by national retailers carrying the
Company’s products; that there will be an expansion into new national and regional grocery retailers; and that the Company will be able to obtain additional capital to meet the
Company's growing demand and satisfy the capital expenditure requirements needed to increase production and support sales activity. Actual results could differ from those
projected in any forward-looking statements due to numerous factors. Such factors include, among others, governmental regulations being implemented regarding the
production and sale of alkaline water; additional competitors selling alkaline water bulk containers reducing the Company’s sales; the fact that the Company does not own or
operate any of its production facilities and that co-packers may not renew current agreements and/or not satisfy increased production quotas; that fact that the Company has a
limited number of suppliers of its unique bulk bottles; the potential for supply chain interruption due to factors beyond the Company’s control; the fact that there may be a recall
of products due to unintended contamination; the inherent uncertainties associated with operating as an early stage company; changes in customer demand; the extent to which
the Company is successful in gaining new long-term relationships with new retailers and retaining existing relationships with retailers; the Company’s ability to raise the
additional funding that it will need to continue to pursue its business, planned capital expansion and sales activity; competition in the industry in which the Company operates
and market conditions. These forward-looking statements are made as of the date of this presentation, and the Company assumes no obligation to update the forward-looking
statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by applicable law, including the
securities laws of the United States. Although the Company believes that any beliefs, plans, expectations and intentions contained in this presentation are reasonable, there can
be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also
refer to the risk factors disclosure outlined in the reports and other documents we file with the SEC, available at www.sec.gov. The Company has not conducted any clinical
studies regarding the health benefits of alkaline water and accordingly make no claims as to the benefits of alkaline water.
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KEY STATISTICS
MARKET STATISTICS
Share Price (as of 3/17/16)
$1.29
52 Week High
$9.00
52 Week Low
$0.40
Average Daily Volume (3M)
23,013
Market Capitalization
7.43 MM
Shares Outstanding
14.7 MM
EPS (TTM)
($1.93)
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KEY STATISTICS
STOCK CHART
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MANAGEMENT
The Alkaline88 management team is lead by:
Steven Nickolas, President & CEO, has over 37 years of
international and domestic management experience in the beverage and food
science industries. He started his career with Anheuser Busch in Southern
California in 1973, later opening the first bottled water company in the state of
Hawaii in 1980.
Between 1981 and 1990, he developed bottled water companies globally
including Hawaii, Micronesia, Indonesia, Philippines, Israel, Egypt and Germany
as well as several companies in North America. He founded Apani Bottled
Water in Phoenix, Arizona in 1990, becoming the first bottled water company
licensed by the NFL, NBA, NHL and MLB. In 1998, he founded Bottled Water
Images, Inc., becoming the first bottled water company licensed by all major
Hollywood studios, including Sony, Universal, Disney, DreamWorks, Warner
Brothers and Marvel Comics.
Mr. Nickolas has provided consulting services and has served in a variety of
management positions for a number of major beverage companies including
Nestle, Whitlock Packaging, P&G and Suntory.
Mr. Nickolas has degrees in Economics and Government from The Claremont
Colleges and postgraduate studies at Cal-Poly Pomona.
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MANAGEMENT
Ricky Wright, Vice President & CFO, is a former regional director of tax and
financial planning with one of the big 4 financial accounting firms. He brings over 37
years of experience as a CFO, CPA , senior executive and entrepreneur.
Mr. Wright has extensive working knowledge of most areas of finance, with a strong
emphasis on closely held companies, mergers and acquisitions, transaction planning and
international operations.
Throughout his career, Mr. Wright has consulted on or taken part in over 100 mergers or
acquisitions and has consulted with over 500 companies on sophisticated tax and
financial planning matters.
Frank Chessman, National Sales Manager, is a graduate of the University of
Southern California’s Marshall School of Business, and spent 25 years with Ralph’s
Grocery, Kroger’s largest division. At Ralph’s, Frank was Vice President of Advertising &
Marketing and went on to spend 14 years at Simon Marketing as Executive Vice
President. He has over 10 years of beverage manufacturing experience.
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MANAGEMENT
At the end of 2015, Alkaline88 welcomed Nick
Gagliardi Jr. to the management team as the
company’s National Director of DSD.
Throughout his career, Mr. Gagliardi has gained
extensive experience in the beverage industry
with companies such as: Great Artisan
Beverage, LLC, Monster Energy, Liquid
Investments and Mesa Distributing.
Mr. Gagliardi earned his Bachelor of Arts
degree in Hotel and Restaurant Administration
from Washington State University. He also
completed the Food Industry Management
Program at the University of Southern
California in Los Angeles, CA.
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MISSION STATEMENT
“Alkaline88 intends to provide the highest quality
alkaline drinking water to the largest consumer
audience possible.”*
*See Disclaimer on page 2.
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ENHANCED ALKALINE WATER BENEFITS
Dr. Jamie Koufman, internationally renowned expert on reflux, and researcher Dr. Nikki Johnston studied
how alkaline water destroyed pepsin, a stomach enzyme that when activated by acid causes painful reflux
symptoms that can lead to cancer. According to the findings, natural artesian alkaline water instantaneously
inactivated human pepsin in laboratory studies. Ordinary tap and bottled waters had no such effect.
(Annals of Otology, Rhinology & Laryngology, July, 2012)
*See Disclaimer on page 2.
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STRONG REVENUE GROWTH WITH
LIMITED MARKETING
Sales revenue on pace to hit $7 million for fiscal year 2016. From
2015 to 2016, experiencing 89% year over year growth.
Revenue
$18.0
($ in millions)
Fiscal Year Ending March 31
$7.0
$3.7
$0.6
FYE 2014
FYE 2015
FYE 2016
Estimate*
FYE 2017
Estimate*
*See Disclaimer on page 2.
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EXCEPTIONAL YEAR OVER YEAR REVENUE GROWTH
$2,500,000
Estimated*
TOTAL REVENUE
$2,000,000
$1,500,000
2013
2014
2015
$1,000,000
$500,000
$0
Q1
Q2
Q3
Q4
*See Disclaimer on page 2.
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BOTTLED WATER SALES PROJECTED TO
OVERTAKE SODA
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INVESTMENT ACTIVITY IN CATEGORY
Mark Wahlberg
Sean Combs
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COMPLETE PRODUCT LINE
500 mL
700 mL
1000 mL
3 Liter
1 Gallon
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BLUE CHIP CUSTOMER BASE
Alkaline88 IS IN 35 OF THE TOP 75 GROCERY RETAILERS AND IS CARRIED IN OVER 17,000 STORES
IN ALL 50 STATES. WE EXPECT TO BE IN OVER 30,000 STORES BY THE END OF THIS FISCAL YEAR.*
*See Disclaimer on page 2.
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ESTABLISHED BROKER NETWORK
Washington
Vermont
Montana
North Dakota
Maine
Minnesota
Oregon
Idaho
New Hampshire
Wisconsin
South Dakota
New York
Wyoming
Michigan
Iowa
Nevada
Pennsylvania
Nebraska
Utah
Illinois
Indiana
Ohio
Kansas
Virginia
Missouri
Connecticut
New Jersey
Delaware
Colorado
California
Massachusetts
Rhode Island
Maryland
Kentucky
North Carolina
Hawaii
Arizona
New
Mexico
Tennessee
Oklahoma
Arkansas
South
Carolina
Alabama
Georgia
Texas
Louisiana
Florida
CO-SALES
BLACKFORD FOOD BROKERAGE
ARCHPOINT SALES
CARLIN GROUP
CA FORTUNE (UNFI, KEHE,
NATURE’S BEST)
BRENNAN MARKETING & SALES
ESM FEROLIE
RITEWAY SALES
ESM INTEGRITY
BEACON UNITED (KROGER)
CALIBER SALES & MARKETING (COSTCO)
M3 (MILITARY)
MARATHON GLOBAL (WALMART)
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CASE STUDY – SOUTHERN CALIFORNIA
Crushing the Competition in Southern California
#1 ALKALINE WATER IN SOCAL
*Source from Nielsen report
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NATIONWIDE CO-PACKERS
Washington
Vermont
Montana
North Dakota
Creekside Springs
Minnesota
Salineville, OH
Oregon
Idaho
South Dakota
New York
CA Bottling
Sacramento, CA California
Michigan
Pennsylvania
Nebraska
Utah
Illinois
Indiana
Missouri
Connecticut
New Jersey
Ohio
Delaware
Colorado
Kansas
Massachusetts
Rhode Island
Iowa
Nevada
New Hampshire
Wisconsin
Wyoming
Maine
Virginia
Maryland
Kentucky
North Carolina
Arizona
New
Mexico
Tennessee
Oklahoma
Arkansas
South
Carolina
Georgia
Alabama
UNIX
Texas
Los Angeles, CA
Hawaii
Louisiana
White Water
Florida
Phoenix, AZ
Nantze Springs
C-Force
Arlington, GA
Navasota, TX
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PROPRIETARY TECHNOLOGY
Alkaline88 employs a state-of-the-art Electrochemically Activated Water (ECA) system to
create 8.8 pH drinking water without the use of any chemicals. New enhancement to the
technologies have doubled prior capacity. Alkaline88 can now produce enough water to
support up to $4 million a month in sales revenue.
The ECA process uses specialized electronic cells coated with a variety of rare earth
minerals to produce scientifically engineered water.
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BRAND MESSAGE
IT’S ALL IN THE NAME…
ALKALINE88 HAS THE BENEFIT OF
CLEARLY IDENTIFYING ITS
PRODUCT AS ALKALINE WATER.
ALKALINE88 HAS A SIMPLE
MESSAGE, EASILY UNDERSTOOD
BY CONSUMERS.
ALKALINE88 PACKAGING SETS
ITSELF APART FROM ALL
COMPETITORS.
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BRAND AMBASSADOR
Alkaline88 will continue with its nationwide public
relations and advertising programs featuring our
Brand Ambassador: Brande Roderick- mother,
actress, and author
Social media programs specific to driving business
using Facebook, Twitter and Instagram
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RETAIL DISPLAYS
.
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COMPANY GUIDANCE
• $7 million revenue for fiscal year ending March 31, 2016*
• Cash Flow neutral by fiscal Q1 ending June 30, 2016*
• New enhancement to the technologies have doubled prior capacity.
Alkaline88 can now produce enough water to support up to $4 million
a month in sales revenue.
• $18 million projected revenue fiscal year ending March 31, 2017.
• Projected over 100% year over year sales increase.
• Expect to be in over 30,000 stores nationwide by fiscal year ending
March 31, 2017.
*See Disclaimer on page 2.
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INCOME STATEMENT
Fiscal Year Ended March 30
2014
2015
Revenues
Nine Months Ended Dec 31
2014
2015*
Twelve Months Ended Dec 31
2015*
$552,699
$3,700,476
569.5%
$2,452,707
$5,010,547
164.6%
$6,258,316
$411,851
$140,848
25.5%
$2,532,436
$1,168,040
31.6%
$1,643,511
$809,196
29.0%
$3,234,840
$1,775,707
35.5%
$4,123,765
$2,134,551
33.2%
$464,081
$3,852,773
$62,092
$42,407
$4,421,353
$1,386,671
$6,520,451
$0
$175,036
$8,082,158
$1,063,749
$4,984,996
$0
$107,801
$6,156,546
$2,098,678
$2,628,152
$0
$214,333
$4,941,163
$2,421,600
$4,163,607
$0
$308,568
$6,893,775
Operating income
($4,280,505)
($6,914,118)
($5,347,350)
$3,165,456
($4,759,224)
Other income (expense)
Net loss
$50,992
($4,229,513)
($225,331)
($7,139,449)
($133,229)
($5,480,579)
($478,572)
$3,644,028
($570,674)
($5,329,898)
($2.50)
($3.00)
($2.56)
($1.29)
$1,604,414
$2,234,096
$2,140,899
$2,831,761
% growth
Cost of goods sold
Gross profit
% margin
Operating expenses:
Sales and marketing expenses
General and administrative
General and administrative - related party
Depreciation expense
Total operating expenses
Net (loss) income per share:
Basic
Weighted average shares outstanding:
Basic
Source: Company filings
*Estimated to December 31,2015. See Disclaimer on page 2.
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BALANCE SHEET
Fiscal Year Ended March 30
2014
2015
As of
12/31/2015*
Assets
Current assets
Cash
Accounts receivable, net
Inventory
Prepaid expenses and other current assets
Deferred financing cost
Total current assets
$2,665
$166,404
$7,965
$0
$54,288
$281,322
$90,113
$416,373
$193,355
$17,500
$0
$717,341
$109,781
$699,208
$201,319
$2,500
$0
$1,012,808
Fixed assets, net
Equipment deposits - related party
$286,986
$0
$1,199,900
$0
$1,005,028
$194,997
Total assets
$568,308
$1,917,241
$2,212,833
$320,154
$18,403
$56,601
$19,829
$83,348
$0
$0
$0
$337,988
$836,323
$562,499
$43,036
$160,437
$0
$242,875
$209,544
$0
$194,940
$1,413,331
$678,917
$0
$211,069
$0
$383,936
$234,224
$1,100,607
$146,250
$7,747
$2,762,750
$0
$0
$233,770
$233,770
$133,997
$133,997
$836,323
$1,647,101
$2,896,747
$83,820
$0
$20,000
$81,602
$4,059,464
($4,512,901)
($351,835)
$20,000
$124,496
$11,777,994
($11,652,350)
$270,140
$20,000
$3,292
$14,589,172
($15,296,378)
($683,914)
$568,308
$1,917,241
$2,212,833
Liabilities & Stockholders' Equity
Current liabilities
Accounts payable
Accounts payable - related party
Accrued expenses
Accrued interest
Revolving financing
Current portion of capital leases
Note payable, net of debt discount
Convertible notes payable, net of debt discount
Derivative liability
Total current liabilities
Long-term liabilities
Capitalize leases
Total long-term liabilities
Total liabilities
Redeemable convertible preferred stock
Stockholders' equity (deficit):
Preferred stock
Common stock
Additional paid in capital
Deficit accumulated
Total stockholders' equity (deficit)
Total liabilities and stockholders' equity (deficit)
Source: Company filings
*Estimated to December 31,2015. See Disclaimer on page 2.
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SUMMARY
 Seasoned management team with industry expertise
 Blue chip customer base of top-tier grocery retailers
 Strong revenue growth with limited marketing spend
 Favorable industry dynamics
 Nationwide co-packing facilities
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Contact:
Steven P. Nickolas
Alkaline88
President & CEO
Cell: 602-549-2278
E-Mail: [email protected]
Alkaline88 Headquarters:
7730 E. Greenway Rd. Ste #203
Scottsdale, AZ 85260
(480) 656-2423
E-Mail: [email protected]
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Appendix
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A NEW PRODUCT CATEGORY.
A NEW PROFIT CENTER.
“Alkaline88 is committed to becoming the #1 best selling Alkaline water
across the country by the end of 2016.” - Steven P. Nickolas, CEO
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RETAIL DISPLAYS
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RETAIL DISPLAYS
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IN THE NEWS
In The
News
“
“The Alkaline Water Co Announces Brande Roderick to Join Advisory Board & Spearhead Public Relations Efforts”
“Alkaline Water co. and Roundy’s Supermarkets Continue Alkaline88 Midwestern Market Penetration”
“Alkaline Water Co. Grows With Winn-Dixie and BI-LO Grocery Stores as Momentum Builds Across Southeastern USA”
“Alkaline Water Co. Increases National Distribution Footprint Through KeHE Distributors”
“The Alkaline Water Co. and Jewel-Osco Stores Deliver Alkaline88 to Thirsty Chicagoland”
“Alkaline Water Co. Crosses the Border to Test Retail Sales at 7-Eleven Mexico”
“Alkaline Water Co. Joins with Hy-Vee Stores to Increase Midwestern Product Placement”
“Alkaline Water Co. Now Available at Ingles Markets as Southeastern US Market Penetration
Meets National Expansion Goals”
“Alkaline Water Co. Introduces Alkaline84 at Three Top Southern California Retail Chains”
“Alkaline Water Co. Enjoys Valued Participation at National Retail Marketing Trade Show”
“Alkaline Water Co. Ships to Schnucks Markets as Part of Midwest Expansion.”
“Alkaline Water Co. Announces Debut of Alkaline88 at Albertsons Supermarkets”
“Alkaline Water Co. Achieves National Distribution Availability With UNFI Network”
“Alkaline Water Co. & Hangar 24 Craft Distribution LLC, Ramp Up Single Serve Product
Placement in Southern California”
“Alkaline Water Co. & Marsh Supermarkets Books Alkaline88 Through Key Midwest Markets”
“Alkaline Water Co. Meets Growing Demand by Adding Co-packer UNIX in Southern California”
“Alkaline Water Co. Available Now at H-E-B, Latest Store Launch in San Antonio, TX”
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