REED's, INC. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed on October 23, 2009, by REED's, INC., a Delaware corporation. The report discloses the entry into a material definitive agreement dated October 19, 2009, regarding the acquisition of specific brand assets.
Key Financial Metrics and Transaction Details
The filing details an Asset Purchase Agreement with Sonoma Cider Mill, Inc. to acquire the Sonoma Sparkler brand assets. The filing does not provide general revenue, profit, cash flow, or margin data for the reporting period.
- Total Purchase Price: $252,000
- Initial Payment: $54,000 (Completed)
- Remaining Balance: $198,000
- Payment Terms: 22 monthly installments of $9,000, commencing November 1, 2009.
- Assets Acquired: Intellectual property (labels and formulas for six flavors), customer lists, vendor contacts, assignable licenses/permits, and existing inventory.
Material Changes and Operational Context
Reed's has been packing and selling the six Sonoma Sparkler products since June 1, 2009, based on a non-binding letter of intent, in anticipation of this formal acquisition. There are no material relationships between the parties other than this transaction.
Outlook, Risks, and Contingencies
The agreement includes a default provision: if Reed's fails to make an installment payment, Sonoma must provide written notice. If Reed's does not cure the default within 30 days, Sonoma has the right to immediately accelerate the entire unpaid balance.
Key Facts for Investor Verification
- Verify the integration status of the Sonoma Sparkler brand into Reed's existing product lines.
- Confirm the impact of the $9,000 monthly cash outflow on the company's liquidity position.
- Assess the revenue contribution of the six acquired flavors since the June 1, 2009 start date.
- Review the terms of the assignable licenses and permits to ensure no regulatory hurdles exist.