Business Context and Reporting Period
Company: REED's, INC.
Filing Type: Form 8-K (Current Report)
Date of Report: June 15, 2007 (Event date range: May 25, 2007 through June 15, 2007)
Event: Completion of a private placement of unregistered equity securities.
Key Financial Metrics
This filing reports on a capital raise event rather than operational financial performance. Key metrics related to the transaction include:
- Total Gross Proceeds: $9,000,000
- Common Stock Sold: 1,500,000 shares
- Price Per Share: $6.00
- Warrants Issued to Investors: Warrants to purchase up to 745,995 shares
- Warrant Terms: Five-year term; $7.50 exercise price
- Placement Agent Compensation: 10% cash commission on gross proceeds plus warrants to purchase 10% of shares sold (150,000 shares) plus an additional 15,000 warrants.
Material Changes
The filing details the completion of a private placement initiated on May 25, 2007. The transaction was executed in two tranches:
- Tranche 1 (May 25 - June 1, 2007): Approximately $4,671,000 in gross proceeds.
- Tranche 2 (June 15, 2007): Approximately $4,329,000 in gross proceeds.
The filing does not provide comparative operational data (revenue, profit, or cash flow) against prior periods.
Guidance, Outlook, and Risks
Management Commentary: The Company intends to file a registration statement to cover the shares issued and those issuable upon exercise of the warrants. The securities were issued in reliance on exemptions from registration pursuant to Section 4(2) or Regulation D under the Securities Act.
Risks and Contingencies: The filing notes the issuance of unregistered securities to accredited investors only. No specific operational risks or forward-looking guidance regarding future earnings were included in this specific report.
Investor Verification Checklist
- Verify the final closing of the $9,000,000 private placement and the receipt of funds.
- Confirm the filing of the registration statement for the 1,500,000 shares and 745,995 warrant shares.
- Review the impact of the 10% cash commission and warrant issuance on the Company's net proceeds and potential future dilution.
- Check the attached press release (Exhibit 99) for additional details on the use of proceeds.