REED's, INC. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by REED's, INC. on November 13, 2019. The filing primarily announces the Company's third-quarter 2019 results of operations and financial condition, the full details of which are contained in a press release furnished as Exhibit 99.1. The Company also announced a conference call to discuss these results.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. It references a reconciliation of net income to Modified EBITDA for the nine months ended September 30, 2019, and 2018, but the actual figures are located in the accompanying financial schedules of the press release (Exhibit 99.1) and the upcoming Form 10-Q.
Material Changes and Listing Status
A critical material event reported is the Company's failure to meet Nasdaq continued listing standards. On November 12, 2019, the Nasdaq Listing Qualifications Department notified the Company that its common stock bid price closed below $1.00 per share for 30 consecutive business days, violating Listing Rule 5550(a)(2).
- Compliance Period: The Company has been granted 180 calendar days, until May 11, 2020, to regain compliance.
- Compliance Requirement: The stock must close at $1.00 or more for a minimum of 10 consecutive business days.
- Alternative Path: If the bid price requirement is not met by the deadline, the Company may qualify for an additional compliance period if it meets other initial listing standards, potentially requiring a reverse stock split.
Guidance, Risks, and Non-GAAP Measures
The filing includes standard forward-looking statements regarding goals and strategies, noting that actual results may differ due to risks such as marketing difficulties, brand recognition, capital needs, dependence on third-party distributors and brewers, fuel costs, and competition.
The Company utilizes Modified EBITDA as a supplemental non-GAAP measure. This metric adjusts net income for interest expense, depreciation and amortization, stock-based compensation, changes in fair value of warrant expense, and one-time restructuring-related costs (including severance and asset impairment). Management states this measure reflects core operating performance but is not a substitute for GAAP measures.
Investor Verification Checklist
- Verify the specific Q3 2019 revenue, net income, and Modified EBITDA figures in the press release (Exhibit 99.1) and the subsequent Form 10-Q.
- Monitor the daily closing bid price of REED stock to track progress toward the $1.00 threshold required to avoid delisting.
- Review the upcoming Form 10-Q for detailed cash flow, debt levels, and liquidity positions not disclosed in this 8-K.
- Assess the Company's plan to regain Nasdaq compliance, including the potential for a reverse stock split if the bid price does not recover naturally.