Product Portfolio and Market Trends - Reed's has a portfolio of 50 products sold in over 32,000 outlets across the US and internationally, including Canada, the UK, and the EU[11][13]. - The retail carbonated soft drink (CSD) market grew by 6% in 2024, with the ginger ale segment growing by 9%, now valued at $2.1 billion[21]. - The premium beverage market is projected to grow at an annual rate of 6% from 2024 to 2031, with the premium cocktail mixer market expected to grow at 8% from 2024 to 2033[27]. - The global ginger market is expected to grow at an annual rate of 9% from 2024 to 2032, driven by increased consumer awareness of ginger's health benefits[27]. - 72% of U.S. consumers are looking to limit or avoid sugar, and the global reduced-sugar food and beverage market is expected to grow at an annual rate of 9% through 2028[27]. - Reed's products are free of GMOs and artificial preservatives, aligning with the growing consumer trend towards natural products, which saw a 6% sales increase in 2024[27]. New Product Launches - Reed's is set to launch a new multi-functional soda line in April 2025, featuring organic ginger and adaptogen extracts, with 8,000 points of distribution secured[24]. - A new line of multi-functional beverages is set to launch in Q1 2025, featuring organic ginger and adaptogen mushroom extracts, with each serving containing only 5 grams of sugar and 30 to 45 calories[63]. Financial Performance - For the year ended December 31, 2024, gross billing decreased by 13% to $44,316,000 from $50,689,000 in 2023[169]. - Net sales fell by 15% to $37,954,000 compared to $44,711,000 in the previous year[169]. - Gross profit increased by 17% to $11,376,000, with a gross profit margin of 30% of net sales, up from 22%[169]. - The net loss for the year was $13,152,000, a 15% improvement from the previous year's loss of $15,523,000[169]. - Loss per share improved by 63% to $(1.64) from $(4.39) in 2023[169]. - The company recorded a net loss of $13.2 million and used cash in operations of $6.1 million during the year ended December 31, 2024[209]. Operational Challenges - Supply chain challenges have negatively impacted the company's ability to meet strong demand, with average shipping costs decreasing from $3.07 per case in 2023 to $2.75 per case in 2024[113]. - The company continues to face supply chain challenges, including increased lead times and inflation of raw materials, logistics, and labor costs[166]. - The company is actively seeking additional co-packing facilities to minimize transportation costs and mitigate production disruptions[59]. - The company has entered into a co-packing agreement with DrinkPak in Southern California to enhance production capacity for cans, aiming to better serve Southwest and club customers[56]. Strategic Partnerships and Agreements - D&D Source of Life Holding Ltd. became the majority stockholder of Reed's following a change of control in 2024[15]. - A strategic partnership with FitzMark was established to manage freight movement, enhancing efficiency in logistics and inventory management[60]. - The company has licensed its candy business to Rootstock Trading, with royalty fees structured at 0% for 2023, 2% for 2024, 4% for 2025, and 5% thereafter[70]. Regulatory and Compliance Issues - The company is subject to various federal, state, and local environmental laws and regulations, which could increase costs due to compliance mandates[92]. - The company anticipates additional legal requirements related to recycling and waste reduction may be proposed or enacted in the future[88]. - The company is monitoring pending and proposed legislation related to data privacy and protection, including the California Consumer Privacy Act[93]. - Certain jurisdictions are considering imposing new or increased taxes on the manufacture, distribution, or sale of the company's products[89]. Workforce and Employee Relations - As of December 31, 2024, the company had 24 full-time equivalent employees on its corporate staff[96]. - The company has never participated in a collective bargaining agreement and believes relations with employees are good[96]. - The company faces challenges in attracting and retaining a skilled workforce, which is critical for maintaining competitive advantage[120]. Market Competition and Consumer Trends - The non-alcoholic beverage segment is highly competitive, with the company competing on brand recognition, quality, and innovation against established brands[67]. - Changes in consumer preferences and public perception regarding health and nutrition could adversely affect demand for the company's products[125]. - Future demand for products is influenced by consumer trends, with potential reductions due to health concerns and legislative initiatives against sweetened beverages[126]. - The beverage industry is highly competitive, with significant pressure from larger companies and private label brands affecting market share and pricing strategies[122]. Financial Management and Future Outlook - Management believes that the Company's ongoing business, existing cash, and credit facilities are sufficient to fund operations for twelve months from the date of issuance of the financial statements[209]. - The company took significant steps to convert high-interest debt to equity and raise additional equity during 2024[192]. - Management's estimates of future product demand may be inaccurate, impacting inventory provisions, with cumulative write-downs for inventory at $277 for 2024[108]. - The company is classified as a smaller reporting company and is not required to provide certain disclosures about market risk[199].

Financial Performance - Q4 2024 net sales were $9.7 million, down 17% from $11.7 million in Q4 2023, primarily due to short order shipments from prior inventory constraints[4] - Q4 2024 gross profit increased to $2.9 million, up more than 5x from $0.5 million in Q4 2023, with a gross margin of 30.0% compared to 4.0%[4] - FY 2024 net sales totaled $38.0 million, a decrease of 15% from $44.7 million in FY 2023, while gross profit rose 18% to $11.4 million with a gross margin of 30.0%[4] - Operating loss improved to $3.7 million in Q4 2024 from $4.9 million in Q4 2023, with modified EBITDA at $(0.7) million compared to $43,000 in the prior year[11] - Net loss for the year ended December 31, 2024, was $13,152 million, an improvement from a net loss of $15,523 million in 2023, reflecting a reduction of 15.3%[28] - Modified EBITDA for the year ended December 31, 2024, was $(4,070) million, compared to $(3,668) million in 2023, indicating a decline in core operating performance[31] Cost Management - Delivery and handling costs per case decreased by 10% to $3.00 in Q4 2024, down from $2.82 in Q4 2023[10] - Total liabilities decreased to $18,492 million in 2024 from $38,064 million in 2023, a reduction of 51.5%[26] - Accounts payable decreased to $6,956 million from $9,133 million, a decline of 23.9%[26] - Inventory write-downs were recorded at $277 million in 2024, compared to $955 million in 2023, showing a decrease of 70.9%[28] Capital and Financing - The company closed a $10 million private placement in Q4 2024, enhancing its capital for inventory, personnel, and marketing[5] - Cash at the end of the period increased significantly to $10,391 million from $603 million, a rise of 1,623.9%[28] - Proceeds from the line of credit amounted to $29,195 million in 2024, down from $43,836 million in 2023, a decrease of 33.6%[28] Leadership and Strategy - The company appointed Douglas W. McCurdy as CFO and Salvatore Vassallo as Vice President of Operations to enhance leadership in finance and operations[6] - The company aims for accelerated growth and profitability in 2025, supported by a de-leveraged balance sheet and improved financial flexibility[7] Asset Management - Total assets increased to $25,140 million as of December 31, 2024, up from $18,883 million in 2023, representing a growth of 33.5%[26] - Current assets rose to $23,311 million, compared to $17,761 million in the previous year, marking a 31.2% increase[26] Product Development - A new multi-functional beverage line is set to launch in April 2025, with over 8,000 points of distribution secured across key retailers[7] Shareholder Activity - The company issued 22,478 million common shares upon conversion of convertible notes payable in 2024, compared to no such issuance in 2023[28]

Financial Performance - For the three months ended September 30, 2024, gross billing decreased by 33% to $8,901,000 compared to $13,219,000 in the same period of 2023[99]. - Net sales for the same period fell by 43% to $6,752,000 from $11,856,000 year-over-year[99]. - Gross profit dropped by 70% to $1,215,000, representing 18% of net sales, down from 34% in the prior year[99]. - The net loss for the three months ended September 30, 2024, was $4,150,000, a 189% increase from the loss of $1,436,000 in the same period of 2023[99]. - Core brand gross billing decreased by 33% to $8,901 compared to $13,197 during the same period last year, driven by a Reed's volume decrease of 37% and Virgil's volume decrease of 26%[106]. - Net sales revenue decreased 43% in the three months ended September 30, 2024, to $6,752, compared to $11,856 in the same period last year[107]. - The loss from operations was $3,138 for the three months ended September 30, 2024, compared to a loss of $143 in the same period last year[115]. - Modified EBITDA for the three months ended September 30, 2024, was $(2,998), compared to $161 in the same period last year[119]. - The net loss for the nine months ended September 30, 2024, was $9,035 million, compared to $8,927 million in the same period last year[141]. Cost and Expenses - Total operating expenses increased by 4% to $4,353,000, with general and administrative expenses rising by 27% to $1,791,000[99]. - Cost of goods sold for the three months ended September 30, 2024, was 82% of net sales, compared to 66% for the same period last year[108]. - Total selling and marketing expenses increased by $422 to $1,283 during the three months ended September 30, 2024, as a percentage of net sales, rising to 19% from 7% in the same period last year[112]. - General and administrative expenses increased to $1,791 from $1,407, representing 27% of net sales compared to 12% in the same period last year[113]. - Cost of goods sold decreased by $4,016 million, representing 70% of net sales for the nine months ended September 30, 2024, compared to 72% in the same period last year[129]. - Delivery and handling expenses decreased by $1,510 million to $4,204 million, representing 15% of net sales[132]. - General and administrative expenses increased by $812 million to $5,239 million, driven by higher employee-related costs and legal settlements[134]. Operational Challenges - Supply chain challenges, including increased lead times and inflation of raw materials, have negatively impacted the company's operations[96]. - The company anticipates continued moderation in inflation throughout 2024, despite ongoing supply chain constraints[97]. Financial Position and Funding - As of September 30, 2024, the company had a working capital deficiency of $22,923 million and a stockholders' deficit of $21,953 million[141]. - The company is exploring various funding alternatives to address its financial challenges, including potential equity issuance and debt restructuring[143]. Accounting and Estimates - Management's estimates for financial statements are based on historical experience and reasonable assumptions, which may differ from actual results[146]. - Significant estimates include reserves for uncollectible accounts, inventory obsolescence, and impairments of long-term assets[146]. - Modified EBITDA does not account for future interest expenses or cash requirements for asset replacements[147]. - There were no changes to critical accounting policies that impacted the condensed financial statements in the 2023 10-K[146]. - Recent accounting pronouncements are discussed in Note 2 of the Notes to Condensed Financial Statements[148]. - A smaller reporting company is not required to provide quantitative and qualitative disclosures about market risk[149].

Financial Performance - Net sales for Q3 2024 were $6.8 million, down 42% from $11.9 million in Q3 2023, primarily due to production limitations and short shipments impacting sales by over $4 million[3][6] - Gross profit decreased to $1.2 million with a gross margin of 18.0%, compared to $4.0 million and 34.0% in the same quarter last year[3][7] - Selling, general and administrative expenses rose to $3.1 million, representing 46% of net sales, compared to $2.3 million or 19% in Q3 2023[3][9] - The company reported an operating loss of $3.1 million, compared to a loss of $0.1 million in the prior year[3][9] - Modified EBITDA was $(3.0) million in Q3 2024, down from $0.2 million in Q3 2023[3][10] - Net loss for the nine months ended September 30, 2024, was $9,035 million, compared to a net loss of $8,927 million for the same period in 2023, indicating a slight increase in losses[29] - Modified EBITDA for the nine months ended September 30, 2024, was $(3,323) million, compared to $(3,711) million for the same period in 2023, showing an improvement in core operating performance[32] Cash Flow and Liquidity - The company generated approximately $1.1 million in cash from operating activities, a significant improvement from cash used of $1.8 million in Q3 2023[11] - Cash at the end of the period decreased from $1,004 million to $306 million, reflecting a net decrease of $698 million[29] - Proceeds from the line of credit amounted to $24,878 million, while payments on the line of credit were $29,367 million, resulting in a net cash outflow from financing activities[29] - The company has secured a new $10 million revolving credit facility with an interest rate of 8% to improve liquidity and inventory levels[2][4] - The majority stockholder, D&D, has acquired all outstanding secured notes, enhancing the company's liquidity position[2][4] Debt and Liabilities - As of September 30, 2024, total debt was approximately $27.1 million, including $21.8 million from a convertible note and $5.4 million from a revolving line of credit[12] - Current liabilities increased significantly from $27,190 million to $36,986 million, marking an increase of about 36%[27] - The company reported a significant increase in the current portion of convertible notes payable, rising from $6,737 million to $21,751 million, reflecting a change in debt structure[27] - Total stockholders' deficit increased from $(19,181) million to $(21,953) million, indicating a deterioration in the company's equity position[27] - Interest expense for the nine months ended September 30, 2024, was $4,578 million, slightly higher than $4,459 million for the same period in 2023, reflecting ongoing financing costs[32] Inventory Management - Due to ongoing inventory challenges, the company has withdrawn its previously issued FY 2024 financial outlook[13] - Inventory write-downs for the nine months ended September 30, 2024, totaled $825 million, compared to $205 million in the same period of 2023, indicating increased challenges in inventory management[29] Asset Management - Total assets decreased from $18,883 million on December 31, 2023, to $15,033 million on September 30, 2024, representing a decline of approximately 20%[27]

Financial Performance - For the three months ended June 30, 2024, gross billing increased by 22% to $13,584,000 compared to $11,164,000 in the same period of 2023[93]. - Net sales for the same period rose by 19% to $11,874,000 from $10,005,000 year-over-year[93]. - Gross profit for the three months ended June 30, 2024, was $3,831,000, representing a 53% increase compared to $2,509,000 in the prior year[93]. - Core brand gross billing increased by 22% to $13,584 compared to $11,095 during the same period last year, driven by a 16% increase in Reed's volume and a 21% increase in Virgil's volume[99]. - Net sales revenue increased 19% in the three months ended June 30, 2024, to $11,874, compared to $10,005 in the same period last year[100]. - Cost of goods sold as a percentage of net sales decreased to 68% for the three months ended June 30, 2024, compared to 75% for the same period last year[101]. - Gross margin improved to 32% for the three months ended June 30, 2024, compared to 25% for the same period last year[102]. - Modified EBITDA for the three months ended June 30, 2024, was $45, compared to a loss of $1,606 in the same period last year[110]. - Net loss for the six months ended June 30, 2024, was $4,885, a 35% improvement compared to a net loss of $7,491 in the same period last year[112]. - Modified EBITDA for the six months ended June 30, 2024, was $(325) million, an improvement from $(3,871) million in the same period last year, with total EBITDA adjustments amounting to $4,560 million[130]. Operating Expenses - Total operating expenses for the three months ended June 30, 2024, were $4,500,000, a 6% increase from $4,256,000 in the same period of 2023[93]. - Delivery and handling expenses decreased by $263 to $1,423, representing 12% of net sales in the three months ended June 30, 2024, down from 17% in the same period last year[103]. - Selling and marketing expenses decreased to $1,097 during the three months ended June 30, 2024, compared to $1,259 during the same period last year, representing 9% of net sales[104]. - General and administrative expenses increased to $1,980 from $1,311, representing 17% of net sales in the three months ended June 30, 2024[105]. - Total selling and marketing expenses decreased to $2,190 million for the six months ended June 30, 2024, from $2,706 million in the same period last year, representing 10% of net sales compared to 13% previously[124]. - General and administrative expenses increased to $3,448 million for the six months ended June 30, 2024, up from $3,020 million, driven by higher legal settlements and professional fees[125]. Loss and Improvement - The company reported a loss from operations of $669,000 for Q2 2024, a 62% improvement compared to a loss of $1,747,000 in Q2 2023[93]. - Loss from operations improved to $669 for the three months ended June 30, 2024, compared to a loss of $1,747 in the same period last year[106]. - Loss from operations improved to $1,319 million for the six months ended June 30, 2024, compared to a loss of $4,325 million in the same period last year, due to increased gross profit and decreased operating expenses[126]. Cash Flow and Funding - The company recorded a net loss of $4,885 million and utilized $3,307 million of cash in operations for the six months ended June 30, 2024, with a working capital deficiency of $19,378 million[131]. - As of June 30, 2024, the company had a cash balance of $326 million and no availability under its line of credit[132]. - The company is exploring various funding alternatives, including raising additional funds through equity issuance and restructuring debt with existing lenders[133]. Strategic Focus and Challenges - The company continues to focus on channel expansion, new product introductions, and improved sales execution to drive sales growth[88]. - Supply chain challenges, including increased lead times and inflation of raw materials, continue to pose risks to the company's operations[89]. - The company anticipates continued moderation in inflation throughout 2024, which may positively impact margins[90]. - The company has taken actions to improve margins by outsourcing manufacturing, streamlining the product portfolio, and negotiating better vendor contracts[134]. - The financial statements raise substantial doubt about the company's ability to continue as a going concern within one year due to significant losses and working capital deficiencies[131].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 001-32501 REED'S, INC. (Exact name of registrant as specified in its charter) (State of incorporation) Delaware 35-2177773 (I.R.S. Employer Identificati ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission File Number: 001-32501 REED'S, INC. (Exact name of registrant as specified in its charter) 201 Merritt 7, Norwalk, CT 06851 (Address of principal e ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q REED'S, INC. (Exact name of registrant as specified in its charter) incorporation) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (I.R.S. Employer Identification No.) For the quarterly period ended September 30, 2023 201 Merritt 7, Norwalk, CT. 06851 (Address of principal executive offices) (Zip Code) ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 For the transiti ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 001-32501 REED'S, INC. (Exact name of registrant as specified in its charter) (State of incorporation) Delaware 35-2177773 (I.R.S. Employer Identificatio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 001-32501 REED'S, INC. (Exact name of registrant as specified in its charter) (State of incorporation) Delaware 35-2177773 201 Merritt 7, Norwalk, CT. 0 ...