Reed’s, Inc. Announces First Quarter 2010 Financial Results

Company Delivers Record Revenues, Increases in Profit Margin and Positive EBITDA

Los Angeles, California, May 11, 2010 — 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 the first quarter ended March 31, 2010.

First Quarter 2010 Highlights:

– First quarter sales increased 17% to a record $4.0 million.
– Gross profit in the first quarter increased 26% to $1.1 million.
– Gross margin in the first quarter increased by 200 basis points to 27%.
– Operating expenses in the first quarter decreased by $86,000, or 7% to $1.2 million.
– EBITDA for the first quarter was $172,000, as compared to an EBITDA loss of $159,000 in the first quarter of 2010(See EBITDA table at end of this release for further non-GAAP information).

– Cash plus revolving LOC availability was $1.3 million at March 31, 2010, as compared to $1.5 million at December 31, 2009.
– Working capital increased by approximately $500,000 during the quarter, to $2.5 million
– Ramped up private label business with the addition of third private label customer.
– Began production/shipment of new ‘Reed’s Rx’ Remedy for Nausea and Motion Sickness.
– Reed’s Rx’ Natural Ginger Nausea Relief gained placements in over 7,000 CVS/Pharmacy locations nationwide.

– Expanded relationship with Kroger’s and Woodman’s Food Market; and established new relationship with Associated Wholesale Grocers (AWG).

“The first quarter is usually the weakest, but the fact that the Company was EBITDA positive makes it clear to us that we have moved into profitability,” said Chris Reed, Founder and CEO of Reed’s, Inc. “Our strategic plans are unfolding and are boosted by the improving economy. In the first quarter, revenues from our existing brands provided a solid base while our new branded products and private label sales took us to a 17% sales increase over last year, with higher margins. As we go into the second quarter, sales of all of our brands continue to outpace last year, and we anticipate substantial increases in private-label product sales throughout 2010. Gross profits from private-label sales will fuel our promotions of branded products. We project 20%-plus overall revenue increases for 2010.”

Reed’s Chief Financial Officer, Jim Linesch, commented, “We currently have $1.3 million cash available and we are cash flow positive. Our ability to run lean has helped us weather the economic downturn in 2009 and to reach profitability faster in 2010. Reed’s is nimble and quick, enabling us to seize opportunities that others cannot.”

Conference Call

Jim Linesch and Chris Reed will review the Company’s first quarter financial report in a conference call following the close of the market today. Time and dial-in information for the Company’s conference call will be available later in the day.