Reed’s, Inc. Announces 2010 Year-End Results

Delivers Record Revenues on 34% Sales Rise With Solid Base for Continued Growth

Los Angeles, California, March 22, 2011 — Reed’s, Inc. (NASDAQ:REED – News) (OTC.BB:REEDP – News), maker of the top-selling sodas in natural food stores nationwide, today announced its financial results for 2010.

Financial Highlights:

* Sales increased 34% to $20.4 million.
* Gross profit was 21% of sales during 2010, as compared to 24% in 2009, reflecting start up costs incurred during the period.
* Operating expenses were about the same in 2010, compared to 2009.
* Modified EBITDA was $456,000 in 2010, as compared to a modified EBITDA loss of $306,000 in 2009.
* Net loss for 2010 narrowed to $1,310,000, or $0.14 per share, from $2,559,000 in 2009.
* Working capital at December 31, 2010 was $1.8 million, as compared to $2.0 million at December 31, 2009.
* Cash availability was $1.1 million at December 31, 2010, as compared to $1.3 million at December 31, 2009.

“We are cautiously exuberant with our results for the year,” stated Chris Reed, Founder, Chairman and CEO of Reed’s, Inc. “Our growth has been the result of a lot of hard work developing the channels for our excellent brands.” Mr. Reed added, “Our strategy of diversifying with private label production is serving to fill production capacity as well as advance our branded business. We have increased our capabilities, since we are constantly developing formulas, brands and packaging. As a result, we have some new branded products in the pipeline for 2011 that are exciting and unique.”

James Linesch, Reed’s Chief Financial Officer, said, “Our 34% sales growth was driven by an over 17% increase in our branded business. Margins for our branded business held constant overall in 2010, as compared to 2009, despite certain raw materials cost increases. Our second half 2010 margins were negatively impacted by start-up costs on our private-label business and, to a lesser extent; on product rollout costs on our new ZERO line. ” Mr. Linesch added, “During 2010, our cash flow loss from operations was about $130,000. We also used $696,000 to build up inventory and increase accounts receivable, with our expanded base of business. We invested $383,000 in our plant. To fund our expansion, we sold $555,000 of stock and increased our borrowings by $417,000. We are currently well capitalized to execute our 2011 plans, as we look forward to another year of rapid growth.”

Conference Call

The Company will conduct a conference call at 4:15 p.m. Eastern Standard Time (EST) on Tuesday, March 22, 2011 to discuss its 2010 financial results and outlook for 2011. To participate in the call, please dial the following number five to ten minutes prior to the scheduled call time: 888-240-4700. International callers should dial 512-225-9559. The conference ID for this call is 936603#.

See the entire press release including the financial statements and EBITDA schedule on our website: