UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Securities Exchange Act of 1934
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Item 1.01 Entry Into a Material Definitive Agreement.
On August 1, 2024 (“Original Issue Date”), Reed’s, Inc., a Delaware corporation (“Reed’s” or the “company”) entered into an Option Exercise and Sixth Amendment (“Exercise and Amendment Agreement”) to 10% Secured Convertible Notes with Wilmington Savings Fund Society, FSB, as holder representative and collateral agent (“Agent”).
Pursuant to the Exercise and Amendment Agreement, holders (“Holders”) of the company’s 10% Secured Convertible Notes, as amended (the “Original Notes”), exercised an option to purchase an aggregate of approximately $6,504,730 notes (the “Fourth Option Notes,” collectively with the Original Notes, the “Notes”). The Option Notes are part of the same series as the Original Notes although they are not identical. The purchase price of the Fourth Option Notes was equal to 100% of the principal amount of notes purchased, paid in a combination of cash together with the exchange of all principal, interest, fees and other amounts owning with respect to the outstanding Purchased Third Option Notes. The Fourth Option Notes mature on the earlier of December 15, 2024 and ninety one days before the schedule maturity of any unsecured indebtedness incurred by Reed’s that is junior in right of payment to its Note obligations (the “Maturity Date”). The Fourth Option Notes bear interest in arrears on the outstanding principal amount at a rate of 11.13% per annum, payable in cash. The Fourth Option Notes may be prepaid without premium or penalty. Unless $1,400,000 of the principal amount is prepaid, payment of any Fourth Option Note on the Maturity Date (or due to an acceleration (whether declared or automatic)) shall be accompanied by an additional amount (such amount, the “MOIC Deficiency Amount”), if any, sufficient to achieve a 1.13:1.00 multiple of invested capital since the Original Issue Date (the “MOIC”) on the aggregate Principal Amount of the Fourth Option Notes being paid. The MOIC Deficiency Amount in connection with any payment of Fourth Option Notes shall be calculated based on (i) the sum of all fees, original issue discount, interest, premiums, principal and other payments received in cash by the applicable Holders in respect of the Fourth Option Notes since the Original Issue Date (excluding any reimbursement of out-of-pocket costs or expenses reimbursed and any indemnification payments made to the applicable Holders in respect of the Fourth Option Notes), as the numerator, and (ii) the aggregate Principal Amount of the Fourth Option Notes on the Original Issue Date, as the denominator.
Pursuant to the Exercise and Amendment Agreement, Agent and the Holders party temporarily waived the specified events of default under the Notes and temporarily waived any requirement that the Company conduct a repurchase of Notes in the event of a Make-Whole Fundamental Change (as defined in the Notes), subject to the terms and conditions therein.
The foregoing descriptions of the Exercise and Amendment Agreement and the Fourth Option Notes are qualified by reference to the full text of such agreements, which will be attached to the company’s Quarterly Report on Form 10-Q for the period ended September 30, 2024.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) Jerry Lewin resigned from his position as a member of the board of directors of the company on August 2, 2024, effective immediately.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| REEDS, INC., | ||
| a Delaware corporation | ||
| Dated: August 6, 2024 | By: | /s/ Norman E. Snyder, Jr. |
| Norman E. Snyder, Jr., | ||
| Chief Executive Officer | ||
Cover |
Aug. 01, 2024 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Aug. 01, 2024 |
| Entity File Number | 001-32501 |
| Entity Registrant Name | REED’S, INC. |
| Entity Central Index Key | 0001140215 |
| Entity Tax Identification Number | 35-2177773 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 201 Merritt 7 Corporate Park |
| Entity Address, City or Town | Norwalk |
| Entity Address, State or Province | CT |
| Entity Address, Postal Zip Code | 06851 |
| City Area Code | (800) |
| Local Phone Number | 997-3337 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Entity Emerging Growth Company | false |