Reed’s, Inc. Enters into Financing Agreement with Alterna Capital Solutions, LLC

On March 28, 2022, Reed’s, Inc. (the Company) entered into a financing agreement with Alterna Capital Solutions, LLC (“ACS”), for a line of credit to replace its existing credit facility with Rosenthal & Rosenthal, Inc. The ACS Line of Credit is for 3 years and can borrow up to $13,000. Borrowings are based on accounts receivable and eligible inventory. The inventory guarantee is set at a maximum of 100% of eligible customer accounts. An overdraft covenant is in place that provides up to $400 of additional borrowing beyond these amounts. Borrowings under the ACS financing agreement bear interest at prime plus 4.75% but not less than 8.0% on the receivables. Inventory-based borrowings bear interest at prime plus 5.25% but not less than 8.5%. The additional endorsement on the advance has a prime rate plus 12.75%, but not less than 16.00%. In addition, the line of credit is subject to a $1 monthly monitoring fee with a minimum line of credit usage requirement. A loan balance of less than $1,500 will bear interest at a rate consistent with accounts receivable advances plus a monthly follow-up fee of $1. The Company incurred $503 of direct transaction costs, consisting primarily of brokerage, banking and legal fees. These costs have been capitalized and are being amortized over the 3 year life of the ACS agreement. The line of credit is secured by eligible accounts received and the Company’s inventory. The transaction closed on March 31, 2022, following ACS’s full repayment of the credit facility with Rosenthal & Rosenthal, Inc.

Michael J. Birnbaum