Business Context and Reporting Period
Company: REED's, INC.
Filing Type: Form 8-K (Current Report)
Date of Report: January 28, 2011
Event: Entry into a Material Definitive Agreement (Securities Purchase Agreement) for the sale of common stock and warrants to three institutional investors.
Key Financial Metrics and Transaction Details
| Metric | Value |
|---|---|
| Total Offering Amount | $750,000.00 |
| Common Stock Sold | 304,880 shares |
| Price Per Share (Stock) | $2.46 |
| Warrants Issued | Exercisable for 121,952 shares |
| Warrant Exercise Price | $2.77 per share |
| Warrant Term | 5 years |
| Use of Proceeds | Working capital only |
Restrictions on Proceeds: The Company agreed not to use proceeds to satisfy debt, redeem outstanding securities, or fund litigation.
Material Changes and Transaction Terms
- Closing Date: Expected on or before February 7, 2011, subject to customary closing conditions.
- Registration Rights: The Company must file a registration statement with the SEC within 30 days of closing and use best efforts to have it declared effective within 90 days (or 120 days if under review).
- Penalties: The Company is obligated to pay negotiated cash payments to investors if the registration statement is not filed within 30 days or declared effective within the specified timeframe.
- Expenses: The Company bears all expenses related to the filing of the Registration Statement.
Guidance, Outlook, and Risks
Management Commentary: The transaction is intended to provide working capital. The filing incorporates a press release issued on January 28, 2011.
Risks and Contingencies:
- The offering is unregistered under the Securities Act of 1933 and relies on an applicable exemption.
- Completion is contingent upon the satisfaction of closing conditions.
- Financial penalties may be incurred if SEC registration timelines are not met.
Financial Performance: This filing does not provide revenue, profit, cash flow, margin, or debt metrics for the reporting period.
Investor Verification Checklist
- Verify the actual closing date of the transaction (expected by February 7, 2011).
- Confirm the filing and effectiveness status of the Registration Statement for the resale of shares.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) and Warrant form (Exhibit 10.2) for additional covenants.
- Monitor for any cash penalty payments to investors if registration deadlines are missed.