Business Context and Reporting Period
This Form 8-K is a current report filed by REED's, INC. on December 20, 2018. The filing discloses a material event under Item 7.01 (Regulation FD Disclosure) regarding a potential asset sale involving the company's founder and significant shareholder.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, margins, debt, or liquidity for the reporting period. The only financial figures disclosed relate to a specific transaction:
- Proposed Purchase Price: $1,250,000 for the manufacturing and bottling plant business.
- Good Faith Deposit: $200,000 remitted by the buyer.
- Remaining Balance: $1,050,000 to be paid via third-party financing or the sale of the buyer's existing stock holdings.
Material Changes
The primary material change is the execution of a non-binding letter of intent dated November 20, 2018, between REED's, INC. and Christopher J. Reed (founder, CIO, and director). The agreement outlines the sale of the company's manufacturing and bottling plant business. The transaction includes the assignment of the commercial lease for the premises to Mr. Reed, subject to landlord approval. The equipment is being sold on an "as-is, where-is" basis.
Outlook, Risks, and Contingencies
Transaction Status: The deal is contingent upon the execution of definitive agreements. Closing is expected on or before December 31, 2018.
Risks and Contingencies:
- The transaction is currently non-binding.
- Closing is subject to landlord approval for the lease assignment.
- The buyer's ability to fund the remainder of the purchase price depends on securing third-party financing or successfully selling a block of his own shares in a private transaction.
- The securities referenced are unregistered and cannot be sold in the U.S. absent registration or an exemption.
Management Commentary: The filing explicitly states that this disclosure is not an offering or solicitation of securities. Any future offer would be made only to qualified investors via a confidential private placement memorandum.
Investor Verification Checklist
- Verify whether definitive agreements were executed to finalize the sale by the December 31, 2018 deadline.
- Confirm if the landlord approved the assignment of the commercial lease.
- Monitor whether Christopher J. Reed secured the necessary financing or sold his shares to fund the remaining $1,050,000 purchase price.
- Assess the operational impact of selling the manufacturing and bottling plant on the company's future production capabilities.