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Reed's, Inc. (NASDAQ:REED) ("Reed's" or the "Company"), owner of the nation's leading portfolio of handcrafted, natural ginger beverages, announced today its intention to transition from the Nasdaq Capital Market to the OTCQX US Market, operated by OTC Markets, Inc. ("OTCQX").
Reed's was given until February 13, 2023 to regain compliance with Nasdaq's bid price rule and the minimum stockholders' equity rule for continued listing on the Nasdaq Capital Market. After evaluating options to achieve compliance with the minimum stockholders' equity rule, Reed's board of directors determined that moving to the OTCQX was in the best interests of Reed's and its stockholders, in lieu of launching a dilutive capital raise.
Reed's received notice from The Nasdaq Stock Market LLC ("Nasdaq") on February 14, 2023, that the staff of Nasdaq's Listing Qualifications department (the "Staff") has determined that the Company's securities will be delisted from Nasdaq. Trading in the Company's securities will be suspended from the Nasdaq Capital Market at the opening of business on February 16, 2023.
Reed's will continue to be a reporting company under the Securities Exchange Act of 1943, as amended. Reed's has taken the steps necessary so that its common stock may be quoted for trading on the OTCQX, under its current trading symbol "REED" following the withdrawal from trading on the Nasdaq Capital Market. The Company anticipates trading to begin on the OTCQX on Thursday, February 16, 2023.
In addition to its transition to the OTCQX, Reed's is announcing the close of a bridge financing with Whitebox Advisors, LLC for net proceeds of approximately $2.5 million. The loan carries a 10% coupon and matures on June 30, 2023, with no prepayment penalties or amortization. More information can be found in the Company's 8-k filed today with the Securities and Exchange Commission.
"We have decided not to take steps to satisfy the minimum shareholders' equity requirement to maintain our listing on Nasdaq," said Norman E. Snyder, CEO of Reed's. "We have explored all the options available to us and believe the decision to leave the exchange is in the best interest of the Company and its stockholders. Meeting the minimum shareholders' equity requirement would have required a significantly dilutive capital raise. We are grateful for our time with Nasdaq; however, we believe parting ways is the most sensible decision for our business. Between our continued double-digit revenue growth, cost-saving initiatives and recent bridge financing, we are well-positioned to improve profitability and turn cash flow positive later this year."
Posted In: REED
