Business Context and Reporting Period
This Form 8-K was filed by REED's, INC. on August 16, 2021. The report addresses a regulatory notification received from the Nasdaq Listing Qualifications Department regarding the company's compliance with continued listing standards.
Key Financial Metrics
The filing does not provide specific financial data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on the status of the company's common stock bid price.
Material Changes
The primary material event reported is the failure of the company's common stock to maintain a minimum bid price of $1.00 per share. Specifically, the stock closed below $1.00 for 30 consecutive business days between July 2, 2021, and August 13, 2021, resulting in non-compliance with Nasdaq Listing Rule 5550(a)(2).
Outlook, Risks, and Contingencies
- Compliance Period: The company has been granted 180 calendar days, until February 14, 2022, to regain compliance with the Bid Price Rule.
- Compliance Criteria: To regain compliance, the bid price must close at $1.00 or more for a minimum of 10 consecutive business days on or before the deadline.
- Contingency Plan: If the company fails to regain compliance by the deadline but meets other initial listing standards (excluding bid price), it may be eligible for an additional compliance period. This would likely require effecting a reverse stock split.
- Risk of Delisting: Failure to meet the bid price requirement or other listing standards could result in the delisting of the company's common stock from the Nasdaq Capital Market.
Investor Verification Checklist
- Verify the current trading price of REED's common stock to assess progress toward the $1.00 threshold.
- Monitor the company's announcements regarding any potential reverse stock split to cure the deficiency.
- Review subsequent filings to confirm if the company has received written notification of compliance from Nasdaq staff.
- Check for any updates on the company's market value of publicly held shares, as this is a requirement for the alternative compliance path.