CARLSBAD, Calif., May 16, 2008 (PRIME NEWSWIRE) -- Who's Your Daddy, Inc. (OTCBB:WYDI) today announced that on Monday, May 12, 2008 the Company filed its Report on Form 10-KSB for the years ended December 31, 2007 and 2006, which has resulted in the removal of the "E" from the Company's stock trading symbol. The results for 2006 and 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 Company also restated its financial statements to reflect corrections in accounting warrants and options issued in 2005 and 2006 at fair value. The accounting for these derivative instruments has caused significant fluctuations in the Company's reported results.
Revenues for the year ended December 31, 2007 of $981,919, compared with $1,189,057 for the year ended December 31, 2006. The Company reported a net loss of $1,934,547 in 2007, or $0.39 per share, compared with a net loss of $10,579,629 in 2006, or $3.87 per share. During the year ended December 31, 2007, the Company used cash in its operations of $3,339,916 compared to $1,530,208 in 2006, despite reflecting a $6,994,118 operating loss in 2007 and $7,863,590 in 2006.
Differences in reported cash used from operations and operating losses in 2007 and 2006 are largely due to stock-based compensation issued to employees and consultants totaling $2,313,465 and $3,739,522, respectively, and included in operating expenses. In 2006, the Company also reported a charge to operations for an arbitration award totaling $1,790,000, which is under appeal.
Edon Moyal, CEO of Who's Your Daddy, stated "With the resolution of these accounting issues and filing of our annual report with the SEC, we believe that we are in position to move forward with our financing plans and deliver on the branding, positioning and marketing efforts put in place over the past year."
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-KSB for full statements and notes):
Year Ended December 31, Variance
------------------------- Increase
2007 2006 (Decrease)
----------- ------------ -----------
Sales $ 981,919 $ 1,189,057 $ (207,138)
Gross Margin - $ 356,886 503,141 (146,255)
Gross Margin - % 36.3% 42.3%
Operating Expenses 7,351,004 8,366,731 1,015,727
----------- ----------- -----------
Operating Loss (6,994,118) (7,863,590) 869,472
Other Income (Expense):
Interest expense and other,
net (593,769) (1,358,584) 764,815
Change in derivative
liabilities 2,563,074 (1,356,655) 3,919,729
Gain on extinguishment of debt
and accounts payable 3,092,266 -- 3,092,266
Provision for taxes (2,400) (800) (1,600)
----------- ----------- -----------
Net Loss $(1,934,947) $(10,579,629) $ 8,644,682
=========== ============ ===========
Net loss per share (0.39) (3.87)
Weighted average common shares 4,907,589 2,733,165
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.