Summarizes Key Terms of Offering Including Pricing and Key Dates
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 email@example.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 firstname.lastname@example.org.
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:
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.
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.