reeds_8k-062209.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
June 22,
2009
Date of
Report (Date of earliest event reported)
Reed’s,
Inc.
(Exact
name of Registrant as specified in its charter)
Delaware
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001-32501
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35-2177773
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(I.R.S.Employer
Identification No.)
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13000 South Spring Street,
Los Angeles, California 90061
(Address
of principal executive offices)
(Zip
Code)
(310)
217-9400
Registrant's
telephone number, including area code
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (SEE General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Reed’s,
Inc.
Item
1.01 Entry into Material Definitive Agreement
The
disclosures in response to Items 2.01 and 2.03 of this Current Report on Form 8K
are incorporated herein by this reference.
Item
2.01 Completion of Acquisition or Disposition of Assets
On June
16, 2009, Reed’s, Inc., a Delaware corporation (“Reed’s” or “the Company”)
closed on a sale and lease back transaction (“Sale and Lease Back
Transaction”). The transaction involved the sale and lease back of
the Company’s real property and certain equipment located at 12930 South Spring
Street and 13000 South Spring Street, Los Angeles, California 90061. The
equipment sold in the transaction includes primarily the Company’s brewery
equipment. The aggregate sales price was $3,250,000 in cash.
No
material relationship, other than in respect of the Sale and Lease Back
Transaction, exists between Reed’s, any of its affiliates, any director or
officer of Reed’s or any associate of any such director or officer and the
Buyer.
In
connection with the Sale and Lease Back Transaction, the Company paid off
the first trust deed secured by the property in the amount of
$1,756,000. Additionally, the Company amended its Credit and Security
Agreement covering its revolving credit facility. The credit facility
was reduced to $2 million and reserves against available collateral were
increased by $350,000. Proceeds from the sale were applied to reduce the
outstanding loan under the credit facility by $1,264,000.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant
In
conjunction with the Sale and Lease Back Transaction, Reed’s entered into a
Standard Commercial/Industrial Lease Agreement with the Buyer (“Lease”) leasing
back real property, plant and equipment located at 12930 South Spring Street and
13000 South Spring Street, Los Angeles, California 90061,on May 7,
2009. The commencement date of the Lease was June 16, 2009, the date
of the closing of the Sale and Lease Back Transaction (“Commencement
Date”). The term of this Lease is 15 years. The monthly rent payment
for the first year of the Lease is $27,708.33. The rent increases
annually at a customary annual rate of approximately 3%.
The
agreement provides an option to purchase the real property, plant and equipment
covered by the Lease. As primary consideration for the option, Reed’s
issued to the Buyer 5-year warrants to purchase up to 400,000 shares of common
stock of the Company at an exercise price of $1.20 per share. Reed’s
has an option to purchase the real property, plant and equipment for 14 years,
commencing after one year. Reed’s also has a right of first refusal with regards
to purchase of said property.
Christopher
J. Reed, the Company’s President, Chief Executive Officer and Chairman,
personally guaranteed the Lease obligations in the event of breach or default by
the Company, in an amount not to exceed $150,000.
Item
3.02 Unregistered Sales of Equity Securities
In
conjunction with the Lease, Reed’s issued to the Lessor 5-year warrants to
purchase up to 400,000 shares of common stock of the Company at an exercise
price of $1.20 per share. The warrants were issued pursuant to exemption from
registration under Section 4(2) of the Securities Act of 1933, as amended, on
the basis of Buyer’s pre-existing relationship with the Company, Buyer’s
representations that Buyer is a sophisticated investor, Buyer’s ability to bear
the investment's economic risk and Buyer’s intent not to resell or distribute
the securities. Further, Buyer had access to the type of information normally
provided in a prospectus. In addition, Reed’s did not use any form of public
solicitation or general advertising in connection with the offering of the
warrants.
On June
16, 2009, Reed’s sold 50,000 shares of its common stock to a private investor,
for an aggregate purchase price of $150,000. The shares were issued
pursuant to exemption from registration under Section 4(2) of the Securities Act
of 1933, as amended, on the basis of investor’s pre-existing relationship with
the Company, his representations that he is an accredited investor, he is able
to bear the investment's economic risk and his intent not to resell or
distribute the securities. Further, investor had access to the type of
information normally provided in a prospectus. In addition, Reed’s did not use
any form of public solicitation or general advertising in connection with the
offering of these shares of common stock.
Item 8.01 Other
Events
On June
22, 2009, the Company issued a press release announcing the Sale and Lease
Back Transaction. A copy of the press release is attached hereto as Exhibit 99.1
and is incorporated by reference herein.
Item 9.01 Financial
Statements and Exhibits
Exhibit
No.
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Document
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99.1
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Press
Release dated June 22, 2009
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
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REED’S,
INC.
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Dated:
June 22, 2009
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By:
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/s/ Christopher
J. Reed
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Christopher
J. Reed
President
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