Reed’s (NYSE:REED) Enters Into Secured Loan Agreement With Whitebox Advisors

On November 14, 2024, Reed’s, Inc., a Delaware corporation, announced that it has entered into a Senior Secured Loan and Security Agreement (the “Loan Agreement”) with certain funds affiliated with Whitebox Advisors, LLC and Cantor Fitzgerald Securities. This agreement provides Reed’s with a $10 million revolving credit facility (the “Senior Secured Facility”) at an 8% interest rate, payable quarterly.

Under the terms of the Loan Agreement, Reed’s can borrow up to two revolving loans per month, with each loan in a minimum amount of $1 million. The company can repay and reborrow the revolving loans before the maturity date, subject to the agreement’s terms. If accelerated, Reed’s must immediately pay the outstanding principal, interest, default interest, and fees.

Cash proceeds over $300,000 from employee retention tax credits must be used to prepay outstanding loan amounts, with the remainder allocated for employee retention. The agreement also includes customary covenants and events of default. Reed’s utilized $7.9 million to clear obligations under its revolving credit with Alterna Capital Solutions, LLC.

As part of this transaction, Reed’s also amended the terms of its Secured Convertible and Promissory Notes with D&D Source of Life Holding, Ltd., its majority stockholder, extending the maturity dates to 181 days after the credit facility’s maturity. D&D agreed to subordinate its notes to the lenders of the Senior Secured Facility.

The Transaction, including the exchange of Notes for common stock shares, was finalized on November 15, 2024. Notably, D&D exchanged the Notes for 22,478,074 shares of Reed’s common stock, leading to D&D’s beneficial ownership in Reed’s increasing to 87.8%.

This summary of the transaction is contingent on the transaction documents filed as Exhibits 10.1-10.8, which are available with the filing.

Additionally, on November 20, 2024, Reed’s issued 22,478,074 shares of common stock to D&D in exchange for the Notes, with this issuance exempt from registration under applicable Securities Act provisions.

This report of Reed’s recent financial activities is based on an 8-K SEC filing submitted on November 14, 2024. The document provides insight into Reed’s strategic financing moves and partnerships in the market.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Reed’s’s 8K filing here.

About Reed’s

Reed's, Inc engages in the manufacture and distribution of natural beverages in the United States. The company offers Reed's craft ginger beer; Reed's real ginger ales; Reed's Classic Mules; Reed's Hard Ginger Ale; Reed's ready to drink products; and Virgil's handcrafted sodas.