Reed’s Inc. Announces Proposed Public Offering of Common Stock

Rhea-AI Summary

Reed’s Inc. (NASDAQ: REED) announced an underwritten public offering of common stock, with a 45-day option for underwriters to purchase additional shares. The offering's completion and terms are uncertain. Proceeds will be used to repay approximately $4.6 million under its senior credit facility and $4.0 million under the Subordinated, Convertible, Non-Redeemable Secured Note, with remaining funds allocated for working capital. Roth Capital Partners acts as the sole book-running manager. A shelf registration statement for the shares has been filed with the SEC.

Positive

• Intended use of proceeds includes repaying approximately $8.6 million in debt, improving financial stability.
• Remaining proceeds to fund working capital and general corporate purposes, potentially supporting growth.

Negative

• Dilution risk associated with the issuance of common stock to satisfy part of the Raptor Note.

NORWALK, Conn., Nov. 19, 2020 (GLOBE NEWSWIRE) -- Reed’s Inc. (NASDAQ: REED), owner of the nation’s leading portfolio of handcrafted, all-natural beverages, today announced that it intends to offer shares of its common stock in an underwritten public offering. Reed’s also expects to grant to the underwriters of the offering a 45-day option to purchase additional shares of common stock offered in the underwritten public offering on the same terms and conditions. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.

Roth Capital Partners is acting as sole book-running manager for the offering. National Securities Corporation, a wholly owned subsidiary of National Holdings, Inc. (NASDAQ:NHLD) is acting as co-manager.

Reed’s intends to use the net proceeds of the offering for the repayment of approximately $4.6 million under its senior credit facility and approximately $4.0 million for the repayment of its Subordinated, Convertible, Non-Redeemable Secured Note (the "Raptor Note") in favor of Raptor/ Harbor Reeds SPV, LLC originally issued April 21, 2017. Reed’s intends to use the remaining proceeds to fund working capital and for general corporate purposes. In addition Raptor/ Harbour Reeds SPV, LLC has agreed that the remaining approximately $1.0 million outstanding under the Raptor Note will be satisfied by issuance of approximately $1.0 million in shares of Reed’s common stock  in a private placement transaction at the public offering price.

A shelf registration statement relating to the shares of common stock to be issued in the proposed offering was filed with the Securities and Exchange Commission (the "SEC") and is effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Copies of the preliminary prospectus supplement and accompanying prospectus will be filed with the Securities and Exchange Commission and, when available, may be obtained from Roth Capital Partners, LLC, 888 San Clemente, Newport Beach, CA 92660, Attention: Prospectus Department, by telephone at (800) 678-9147 or by accessing the SEC's website, www.sec.gov.

Safe Harbor / Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the proposed public offering and the intended use of proceeds from the offering. The offering is subject to market and other conditions and there can be no assurance as to whether or when the offering may be completed or as to the actual size or terms of the offering. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including market conditions, risks associated with the cash requirements of our business and other risks detailed from time to time in our filings with the Securities and Exchange Commission, and represent our views only as of the date they are made and should not be relied upon as representing our views as of any subsequent date. We do not assume any obligation to update any forward-looking statements.

CONTACT:

Investor Relations
Scott Van Winkle, ICR
(617) 956-6736
Email: ir@reedsinc.com
www.reedsinc.com

FAQ

What is the purpose of Reed's Inc.'s public offering on November 19, 2020?

Reed's Inc. intends to use the proceeds from the public offering primarily to repay approximately $8.6 million in debt and fund working capital.

Who is managing the public offering for Reed's Inc.?

Roth Capital Partners is acting as the sole book-running manager for the offering.

What risks are associated with the public offering by Reed's Inc.?

The offering is subject to market conditions and carries risks of dilution for current shareholders.

How much debt will Reed's Inc. repay with the offering proceeds?

Reed's Inc. plans to repay approximately $4.6 million under its senior credit facility and approximately $4.0 million for the Raptor Note.

Is there an option for underwriters in the Reed's Inc. offering?

Yes, underwriters have a 45-day option to purchase additional shares of common stock.