CARLSBAD, Calif., May 19, 2008 (PRIME NEWSWIRE) -- Who's Your Daddy, Inc. (OTCBB:WYDI) today announced that on Friday, May 16, 2008, the Company filed its Report on Form 10-Q for the three months ended March 31, 2008 and 2007 (restated), along with Form 12b-25 Extension of Time to File, which means that the Company filed its quarterly report on time. The results for the three months ended March 31, 2007 have been restated to reflect corrections in accounting for the convertible debt, and related variable conversion features at fair value, issued by the Company in April 2005 and fully repaid in May 2007. The accounting for these derivative instruments has caused significant fluctuations in the Company's reported results.
Revenues for the three months ended March 31, 2008 were $102,823, compared with $133,814 for the three months ended March 31, 2007. The Company reported a net loss of $335,417 in the first quarter of 2008, or $0.04 per share, compared with net income of $1,817,231 in the first quarter of 2007, or $0.51 per share on a basic basis and $0.43 per share on a fully-diluted basis.
The operating loss was $544,473 for the three months ended March 31, 2008, compared with an operating loss of $957,820 for the same period a year earlier. However, a gain on change in fair value of derivative liabilities of $2,946,261 in the three months ended March 31, 2007 was the primary driver behind the Company posting net income of $1,817,231 for that period.
Due to liquidity constraints, cash used by operations was $44,761 for the three months ended March 31, 2008, compared with $341,113 for the same period a year earlier, and operating expenses declined to $573,009 for the three months ended March 31, 2007 from $1,001,133 a year earlier.
Edon Moyal, CEO of Who's Your Daddy, stated "We fully caught up with our SEC reporting requirements with the filing of our restated report for 2006, along with our reports for 2007 and the first quarter of 2008. Despite limited capital in the first quarter of this year and the need to tightly control expenses, we were able to establish a distributor in the Northeastern United States, start shipments to distributors outside the U.S. and make significant progress in setting up potential shipments to the U.S. military. We believe that when we are able to obtain adequate capital to execute our business plan, we can resume the revenue growth that has been crimped by capital constraints in the past eight months."
About Who's Your Daddy, Inc.
Who's Your Daddy, Inc. is a brand management company focused on the marketing, production and distribution of the "Who's Your Daddy(r)" "King of Energy(tm)" line of beverages for the rapidly growing $4.9 billion U.S. energy drink market. Both our unique cranberry-pineapple and green tea flavors are available in regular and diet versions. We currently hold trademarks for a variety of products worldwide. Who's Your Daddy, Inc. stock is traded publicly under the "WYDI" ticker symbol. For more information, go to (www.whosyourdaddyinc.com; www.kingofenergy.com). The Company's blog site is at www.kingofbloggers.com
Condensed income statements (please refer to the related Report on Form 10-QSB for full statements and footnotes):
Three Months Ended
March 31,
------------------------
2008 2007
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Sales $ 102,823 $ 133,814
Gross Margin - $ 28,536 43,313
Gross Margin - % 27.8% 32.4%
Operating Expenses 573,009 1,001,133
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Operating Loss (544,473) (957,820)
Other Income/(Expense):
Interest expense and other, net (79,161) (171,210)
Gain on change in derivative
liabilities -- 2,946,261
Gain on extinguishment of debt
and accrued liabilities 288,217 --
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Net Loss $ (335,417) $1,817,231
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Basic net income/(loss) per share $ (0.04) $ 0.51
Fully-diluted net income/(loss)
per share $ (0.04) $ 0.43
Weighted common shares - basic 8,929,093 3,543,519
Weighted common shares - fully diluted 8,929,093 4,384,057
This document contains "forward-looking statements" related to future events. Forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are uncertain. Particular uncertainties which could adversely or positively affect our future results include: consumer tastes, availability of production, liquidity, general economic conditions, and the activities of competitors. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.