LOS ANGELES, Nov. 22, 2017 (GLOBE NEWSWIRE) -- Reed’s Inc. (NYSE American:REED) (“Reed’s” or the “Company”), owner
of one of the nation’s leading portfolios of handcrafted, all-natural beverages, today announced the appointment of Maxim Group LLC
as dealer-manager along with the details of the Company’s planned rights offering.
“Maxim Group has a solid understanding of the industry, the Company and the progress of our turnaround
efforts. In addition, they have recently led successful rights offerings for companies of similar size and funding needs. We
are in the process of simplifying the business model and directing our focus on becoming a sales and marketing driven organization
with the primary objective of accelerating growth of the Reed’s and Virgil’s core product offerings. We look forward to using
the rights offering proceeds to strengthen our balance sheet, aid in our business transformation efforts and provide the Reed’s and
Virgil’s brands the needed capital to grow,” commented Val Stalowir, Chief Executive Officer of Reed’s, Inc.
The Company today announced the record date for the rights offering of December 1, 2017. To be a shareholder of record on
December 1, 2017, investors will need to complete their open market common stock purchases by November 29, 2017 to take into
account T+2 settlement timing. The Company intends to raise between $10.5 million and $14.0 million through the rights
offering and backstop commitment combined.
Raptor/Harbor Reeds SPV, LLC will backstop the rights offering for a minimum of $6.0 million upon the same terms
and conditions as rights holder in exchange for a 5-year warrant to purchase a minimum of 750,000 shares of common stock at an
exercise price equal to closing price of our common stock prior to execution of a definitive agreement and subject to other
customary terms and conditions. The backstop commitment will be reduced to the extent aggregate gross proceeds to Company from the
exercise of rights by rights holders exceed $8 million and also to the extent of Raptor’s participation in the rights offering as a
rights holder. These warrants issued to the backstop provider will not be exercisable for 180 days.
Additional Details Regarding The Rights Offering:
The Company today filed an amendment to a registration statement on Form S-1/A filed with the Securities and Exchange Commission
(the “SEC”) for a proposed rights offering to its existing stockholders.
Under the proposed rights offering, Reed’s will distribute one (1) non-transferable subscription right to each
share of common stock held on the record date. The Company today announced a record date for the rights offering of December
1, 2017. Each right entitles the holder to purchase one unit at a subscription price per unit equal to the lesser of (a)
$1.75 and (b) 85% of the average of the volume weighted average price of our common stock for the five trading day period preceding
and including the expiration date of the rights offering; provided however, such subscription price will not exceed a 25% discount
to the closing price of our common stock on the expiration date. Each unit will consist of one share of common stock and 0.25
of a warrant, with each whole warrant exercisable to purchase one share of common stock at an exercise price of 135% of the
subscription price per unit for 3 years from the date of issuance.
The subscription rights are non-transferrable and may only be exercised during the anticipated subscription
period commencing December 4, 2017 through 5:00 PM ET on December 15, 2017, unless extended.
The expected calendar for the rights offering is as follows:
- December 1, 2017: Record Date
- December 4, 2017: Distribution Date; Subscription Period Begins
- December 15, 2017: Subscription Period Ends at 5:00 PM ET, unless extended
Holders who exercise their subscription rights in full will be entitled, if available, to subscribe for
additional units that are not purchased by other shareholders.
Reed’s has engaged Maxim Group LLC as a dealer-manager in the offering. Questions about the rights offering or requests
for copies of the prospectus, when available, may be directed to Maxim Group LLC at 405 Lexington Avenue, New York, NY 10174,
Attention Syndicate Department, or via email at syndicate@maximgrp.com or telephone at (212) 895-3745. For questions that are
transaction specific please contact Okapi Partners, LLC at (212) 297-0720 or (888) 785-6617 (TOLL FREE) or
at info@okapipartners.com.
A registration statement on Form S-1 relating to these securities has been filed by the Company with the SEC but
has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. The rights offering, which is expected to commence following the effectiveness of the registration
statement, will only be made by means of a prospectus. A preliminary prospectus relating to and describing the proposed terms of
the rights offering has been filed with the SEC as a part of the registration statement and is available on the SEC’s web site
at:
https://www.sec.gov/Archives/edgar/data/1140215/000149315217013694/0001493152-17-013694-index.htm
This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor will there
be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such state or jurisdiction.
About Reed’s, Inc.
Established in 1989, Reed’s has sold over 500 million bottles of its category leading all-natural, handcrafted beverages. Reed’s is
America’s #1 selling Ginger Beer brand and has been the leader and innovator in the ginger beer category for decades. Virgil’s is
America’s #1 selling independent, all-natural craft soda brand. The Reed’s Inc. portfolio is sold in over 20,000 retail doors
across the natural, specialty, grocery, drug, club and mass channels nationwide. Reed’s Ginger Beers are unique to the
category because of the proprietary process of hand brewing its award-winning products using fresh organic ginger combined with
natural spices and fruit juices. Reed’s Ginger Beers come in three levels of increasing ginger intensity that deliver a delicious
and powerful ginger bite and burn that can only come from fresh ginger root. The Company uses this same handcrafted approach and
dedication to the highest quality ingredients in its award-winning Virgil’s line of great tasting, bold flavored craft sodas.
For more information about Reed’s, please visit the Company’s website at: http://www.reedsinc.com or call 800-99-REEDS.
Follow Reed’s on Twitter at http://twitter.com/reedsgingerbrew
Reed’s Facebook Fan Page at https://www.facebook.com/reedsgingerbrew
SAFE HARBOR STATEMENT
Some portions of this press release, particularly those describing Reed’s goals and strategies, contain “forward-looking
statements.” These forward-looking statements can generally be identified as such because the context of the statement will include
words, such as “expects,” “should,” “believes,” “anticipates” or words of similar import. Similarly, statements that describe
future plans, objectives or goals are also forward-looking statements. While Reed’s is working to achieve those goals and
strategies, actual results could differ materially from those projected in the forward-looking statements as a result of a number
of risks and uncertainties. These risks and uncertainties include difficulty in marketing its products and services, maintaining
and protecting brand recognition, the need for significant capital, dependence on third party distributors, dependence on third
party brewers, increasing costs of fuel and freight, protection of intellectual property, competition and other factors, any of
which could have an adverse effect on the business plans of Reed’s, its reputation in the industry or its expected financial return
from operations and results of operations. In light of significant risks and uncertainties inherent in forward-looking statements
included herein, the inclusion of such statements should not be regarded as a representation by Reed’s that they will achieve such
forward-looking statements. For further details and a discussion of these and other risks and uncertainties, please see our most
recent reports on Form 10-K, Form 10-Q and Form S-1, as filed with the Securities and Exchange Commission, as they may be amended
from time to time. Reed’s undertakes no obligation to publicly update any forward-looking statement, whether as a result of new
information, future events, or otherwise.
CONTACT:
Reed's, Inc.
Investor Relations
(310) 217-9400 Ext 6
Email: ir@reedsinc.com
www.reedsinc.com
