Business Context and Reporting Period
This Form 8-K filing by REED's, INC. (REED) was submitted on December 2, 2020, regarding a notice received from the Nasdaq Listing Qualifications Department. The company is a Delaware corporation with its principal executive offices in Norwalk, CT.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The only financial metric disclosed is the trading price of the company's common stock, which closed at less than $1.00 per share for 30 consecutive business days prior to the report date.
Material Changes
The material change reported is the failure to comply with Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule") due to the sustained low stock price. This deficiency triggers a potential delisting process if not corrected.
Outlook, Risks, and Contingencies
- Compliance Period: Nasdaq has granted the company 180 calendar days, until May 31, 2021, to regain compliance.
- Compliance Criteria: To cure the deficiency, the bid price must close at $1.00 per share or more for a minimum of 10 consecutive business days on or before May 31, 2021.
- 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: 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 stock to assess the likelihood of meeting the $1.00 threshold within the 180-day window.
- Monitor future filings for announcements regarding a potential reverse stock split.
- Review the company's broader financial health in recent 10-K or 10-Q filings to understand the underlying causes of the low stock price.
- Check for any subsequent correspondence from Nasdaq regarding the status of the compliance period.