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Is it too Late for Attitude Drinks Inc. (OTCBB: ATTD) to Find Success with Pure Milk Recovery Drink?

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Just a few hours into Wednesday’s trading session and Attitude Drinks Inc. (OTCBB: ATTD) has already trading volume top the 705 million mark while their share price has pushed to a one-month high of 0.0400 following their announcement that they had reached an agreement “with one of the largest supply chain service leaders in the USA.”

According to today’s press release the relationship with the supply chain service provider is effective immediately and will enable ATTD to begin supplying their Phase III Recovery drink to their largest customer throughout Florida, a move that, in the words of company CEO Roy Warren, “significantly expands our ever growing multi-faceted distribution strategy.”

ATTD is putting a lot of stock in this new relationship as Warren stated “We fully expect this option to open doors for Phase III throughout the east coast and even nationally.” Phase III Recovery is ATTD’s pure milk recovery drink “that exploits recent scientific evidence confirming the benefits of milk and protein as an exercise recovery aid.”

Of course just because ATTD has an agreement with a supply chain service leader that has “40 modern distribution centers and one of the nation’s largest private fleets” doesn’t necessarily equate to increased sales of Phase III Recovery, obviously there has to be a demand for the product and thus far that demand has been relatively low.

While ATTD has identified a number of target outlets for their recovery aid, pointing to regional and national markets, including colleges, universities, convenience stores, fitness centers and gyms, they have yet to establish any business operations on a scale large enough to produce any meaningful revenue.

Concerning to investors is the fact that ATTD has been selling their product since February 2010, nearly three years and they are still struggling to make money.

With no real sales ATTD has acknowledged that their future operations are “totally dependent upon obtaining additional funding.” That’s not a good thing when you take into account ATTD’s recognition that “Past fundings have been subject to defaults by the company’s inability to meet due dates for certain notes payable, thereby triggering anti-dilution rights which created the need to issue additional shares of common stock and/or additional warrants to purchase additional shares of common stock in order to extend the applicable due dates for certain notes payable.”

It goes without saying the beverage industry, and in particular the sports beverage market, is incredibly competitive and for ATTD to have not made a mark in the three years they have been selling their Phase III Recovery drink is disconcerting to say the least. If ATTD hasn’t found even the most remote level of success thus far the chances of them attaining it now are very slim.

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