REED's, INC. - Form 8-K Summary
Business Context and Reporting Period
This Form 8-K was filed on October 7, 2009, by REED's, INC. (Delaware). The report details a material definitive agreement entered into on October 7, 2009, regarding a registered direct public offering. The offering closed on October 8, 2009.
Key Financial Metrics and Transaction Details
- Units Sold: 364,189 Units
- Price per Unit: $1.80
- Gross Proceeds: Approximately $655,540 (364,189 units x $1.80)
- Net Proceeds: Approximately $563,098 after deducting placement agent fees and estimated offering expenses.
- Placement Agent Fee: 8% paid to Source Capital Group, Inc.
- Securities Issued:
- 364,189 shares of common stock
- 145,676 Series A Warrants (40% of shares, $2.25 exercise price, 5-year term, exercisable after 183 days)
- 69,445 Series B Warrants (50% of shares, $1.80 exercise price, 60-day term, exercisable immediately)
- 27,778 Series C Warrants (20% of shares, $2.25 exercise price, 5-year term, exercisable after 183 days)
Note: Series B and Series C Warrants were issued only to purchasers with an aggregate purchase price of at least $125,000.
Material Changes
The filing reports a significant capital raise event. The company increased its share count by issuing 364,189 new shares of common stock and a substantial number of warrants, which may result in future dilution upon exercise. The filing does not provide comparative financial data (revenue, profit, cash flow) for the period as this is a current report on a specific transaction rather than a periodic financial statement.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future operations, or specific risk factors beyond the standard legal disclosures regarding the securities issuance. The transaction was conducted pursuant to a prospectus supplement filed on October 6, 2009, under a shelf registration statement (File No. 333-159298) effective August 24, 2009.
Key Facts for Investor Verification
- Verify the exact number of shares outstanding post-issuance to assess immediate dilution.
- Confirm the total potential dilution if all Series A, B, and C warrants are exercised.
- Review the use of the $563,098 in net proceeds as disclosed in the accompanying press release (Exhibit 99.1).
- Check the terms of the Placement Agent Agreement (Exhibit 10.2) for any additional fees or obligations.
- Monitor the exercise dates for the Series B warrants (immediate 60-day window) versus Series A and C (183-day deferral).