Business Context and Reporting Period
This Form 8-K was filed by REED's, INC. on March 5, 2021. The report addresses a triggering event related to the company's senior secured credit facility with Rosenthal & Rosenthal, Inc.
Key Financial Metrics
The filing does not provide comprehensive financial statements, revenue, profit, or cash flow data. The only specific financial metric disclosed is a $1.5 million irrevocable standby letter of credit (LC) serving as collateral for the credit facility.
Material Changes
On March 5, 2021, Rosenthal & Rosenthal, Inc. modified a previously granted waiver of performance. The modification requires that the $1.5 million standby letter of credit, currently issued by Daniel J. Doherty, III and the Daniel J. Doherty, III 2002 Family Trust, must be replaced or renewed by March 16, 2021. The existing letter of credit is set to expire on March 30, 2021.
Guidance, Outlook, and Risks
The filing highlights a liquidity and covenant compliance risk. The company faces a strict deadline to renew or replace the collateral letter of credit to maintain the terms of its credit facility. Failure to meet the March 16, 2021 deadline could result in a default or acceleration of obligations under the facility.
Investor Verification Checklist
- Confirm whether the $1.5 million letter of credit was successfully renewed or replaced by the March 16, 2021 deadline.
- Verify the current status of the credit facility with Rosenthal & Rosenthal, Inc. to ensure no default has occurred.
- Review subsequent filings for any updates on the company's liquidity position or additional covenant waivers.