REED

REED's, INC. Form 8-K Summary

Business Context and Reporting Period

REED's, INC. filed this Current Report on Form 8-K on March 28, 2022, to disclose the entry into a material definitive agreement. The company is incorporated in Delaware and operates from Norwalk, Connecticut.

Key Financial Metrics and Debt Structure

The filing details a new financing agreement with Alterna Capital Solutions, LLC ("ACS") replacing the prior facility with Rosenthal & Rosenthal, Inc. Key terms include:

• Total Credit Limit: Up to $13,000 (in thousands).
• Term: 3 years.
• Collateral: Eligible accounts receivable and inventory (inventory capped at 100% of eligible receivables).
• Over Advance Rider: Up to $400 (in thousands) of additional borrowing.
• Interest Rates:
  • Receivables: Prime + 4.75% (minimum 8.0%).
  • Inventory: Prime + 5.25% (minimum 8.5%).
  • Over Advance: Prime + 12.75% (minimum 16.00%).
• Fees: Monthly monitoring fee of $1 (in thousands) with a minimum usage requirement.
• Transaction Costs: $503 (in thousands) incurred, capitalized, and amortized over 3 years.

The filing does not provide current revenue, profit, cash flow, or liquidity metrics beyond the credit facility terms.

Material Changes

The primary material change is the replacement of the existing credit facility with Rosenthal & Rosenthal, Inc. by the new ACS agreement. The transaction closed on March 31, 2022, upon the full payoff of the previous facility.

Outlook, Risks, and Contingencies

The company noted that the description of the credit line is qualified by reference to the full agreement, which will be filed as an exhibit to the Annual Report on Form 10-K for the fiscal period ending December 31, 2021, expected on or about April 14, 2022. The filing does not contain specific forward-looking guidance, risk factors, or unusual items beyond the terms of the new debt instrument.

Investor Verification Checklist

• Verify the full text of the ACS financing agreement in the upcoming Form 10-K filing.
• Confirm the actual utilization of the $13,000 credit line and the $400 over advance rider.
• Review the amortization schedule for the $503 transaction costs in future financial statements.
• Monitor compliance with the minimum usage requirement and monthly monitoring fees.