Business Context and Reporting Period
Company: REED's, INC.
Filing Type: Form 8-K (Current Report)
Date of Report: February 18, 2010
Event: Entry into a Material Definitive Agreement regarding a proposed securities offering.
Key Financial Metrics and Transaction Details
This filing details a capital raise rather than operational financial results. Key transaction metrics include:
- Securities Sold: 277,359 Units.
- Price per Unit: $1.70.
- Unit Composition: One share of Common Stock and one Warrant to purchase approximately 0.3 shares of Common Stock.
- Warrant Terms: Exercise price of $2.10 per share; exercisable for five years commencing six months post-closing; 83,208 shares issuable upon full exercise.
- Expected Net Proceeds: Approximately $433,789 (after fees and expenses, excluding warrant exercise proceeds).
- Use of Proceeds: General corporate purposes.
- Expected Closing Date: On or about February 22, 2010.
Material Changes Versus Prior Period
The filing does not provide comparative financial data (revenue, profit, or cash flow) against prior periods. The material change reported is the execution of a Securities Purchase Agreement with certain investors and an amended engagement letter with Source Capital Group, Inc. as the exclusive placement agent.
Guidance, Outlook, and Risks
Management Commentary: The Company intends to use net proceeds for general corporate purposes. Investors with subscription amounts of at least $125,000 may have rights to participate in subsequent financings subject to limitations.
Risks and Contingencies:
- The closing is subject to the satisfaction of customary closing conditions.
- Warrant exercise prices and share counts are subject to adjustment for stock splits, dividends, or recapitalization.
- Warrants may be exercised on a cashless basis if no effective registration statement exists at the time of exercise.
Important Facts for Investor Verification
- Verify the actual closing date and confirmation of fund receipt, as the filing states the closing is "expected" on or about February 22, 2010.
- Review the full text of the Securities Purchase Agreement (Exhibit 4.1) and Warrant (Exhibit 4.2) for specific ownership limitations and anti-dilution provisions.
- Confirm the final net proceeds after deducting the Placement Agent's fees and actual offering expenses.
- Check subsequent filings for the effective status of the registration statements (Nos. 333-159298 and 333-164965) referenced for the offering.