Business Context and Reporting Period
Company: REED's, INC.
Filing Type: Form 8-K (Current Report)
Date of Report: June 28, 2016 (Earliest event reported: June 22, 2016)
Context: The company reported receiving notice from NYSE MKT, LLC regarding its failure to meet continued listing standards due to a decline in market capitalization.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The document focuses on listing compliance rather than detailed financial performance data.
Material Changes
- Listing Status: The company failed to meet NYSE MKT listing standards under Sections 1003(a)(i), 1003(a)(ii), and 1003(a)(iii).
- Market Capitalization: The company no longer meets the $50,000,000 market capitalization exception required for listing, a change attributed to a decrease in the trading price of common stock.
- Operational Impact: Management attributes the stock price decline and negative financial performance to supply disruptions experienced in the prior year.
Outlook, Risks, and Management Commentary
- Compliance Plan: The company has 18 months to regain compliance. A plan outlining efforts to correct supply chain issues and improve financial performance is due to the NYSE compliance department by July 22, 2016.
- Management Expectation: Management anticipates that improved financial performance will result in a recovery of the stock price and market capitalization.
- Contingencies: If the plan is accepted but compliance is not achieved by December 22, 2017, or if progress is insufficient, the Exchange staff will initiate delisting proceedings. The company may appeal such a determination.
- Backup Strategy: The company will consider alternative methods to meet listing requirements if the primary plan is insufficient.
Investor Verification Checklist
- Verify the specific details of the compliance plan submitted to the NYSE by July 22, 2016.
- Monitor the company's stock price and market capitalization to assess progress toward the $50,000,000 threshold.
- Review upcoming financial reports for evidence of resolved supply chain issues and improved financial performance.
- Watch for any announcements regarding delisting proceedings or appeals if the 18-month compliance period is not met.