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Reed's (REED) Risk Analysis
Risk Overview Q2, 2026
Source: the company's latest filing for the period ended Jun 30, 2026, filed Aug 12, 2026
Risk Change Over Time
- Share Price & Shareholder Rights - Risk 1We have failed, and may in the future fail, to meet the continued listing requirements of NYSE American, which could result in a de-listing of our common stock.
We may fail to satisfy the continued listing requirements of NYSE American LLC ("NYSE American"), such as the corporate governance requirements or the minimum stock price and stockholders' equity requirements, and NYSE American may take steps to de-list our common stock. For example, numerous factors, such as negative financial or operational results, could adversely affect the market price of our common stock and our stockholders' equity, and jeopardize our ability to meet or maintain NYSE American's continued listing requirements, resulting in de-listing. On May 29, 2026, we received a notice (the "Notice") from NYSE American stating that we are not in compliance with the continued listing standards set forth in Section 1003(a)(ii) of the NYSE American Company Guide (the "Company Guide"), which requires a company to have stockholders' equity of at least $4.0 million if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years, and Section 1003(a)(iii) of the Company Guide, which requires a company to have stockholders' equity of at least $6.0 million if it has reported losses from continuing operations and/or net losses in its five most recent fiscal years. The Notice also indicated that we are not currently eligible for any exemption under Section 1003(a) of the Company Guide, including the exemption available to companies with a total market capitalization exceeding $50 million, among other requirements. A de-listing or the announcement of a potential de-listing will have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In connection with this non-compliance, we submitted a plan (the "Plan") to NYSE American on June 26, 2026 describing the actions we have taken or will take to regain compliance with the continued listing standards by November 29, 2027. If NYSE American accepts the Plan, we will be subject to periodic reviews, including quarterly monitoring, to assess our compliance with it. If NYSE American does not accept it, if we fail to regain compliance with the continued listing standards by November 29, 2027, or if we fail to make progress consistent with the Plan, NYSE American will initiate delisting proceedings as appropriate, subject to our right to appeal any staff delisting determination in accordance with Section 1010 and Part 12 of the Company Guide. The Notice has no immediate effect on the listing of our common stock, which continues to be listed and traded on NYSE American under the symbol "REED," subject to our compliance with NYSE American's other continued listing requirements, although our common stock now carries an added designation of ".BC" to indicate that its status is "below compliance." We are committed to regaining compliance with NYSE American's continued listing standards. However, there can be no assurance that NYSE American will accept the Plan or that we will regain or maintain compliance with NYSE American's continued listing requirements within the required timeframe or at all. In the event of a de-listing, we may attempt to take actions to restore our compliance with the NYSE American listing requirements, but we can provide no assurance that any such action would allow our common stock to become re-listed, stabilize the market price or improve the liquidity of our common stock, or prevent future non-compliance with the NYSE American listing requirements. If our common stock is delisted from NYSE American, we and our stockholders could face significant material adverse consequences, including limited availability of market quotations for our common stock, reduced liquidity, a determination that our common stock is a "penny stock" subject to additional regulatory burdens, limited news and analyst coverage, and a decreased ability to issue additional securities or obtain additional financing in the future.
- Debt & Financing - Risk 2Our current indebtedness contains, and any future indebtedness may contain, restrictions on our business. We have historically had negative cash flow from operating activities, and continued losses could have a material negative effect on our business and prospects and impact our ability to continue as a going concern. If we are unable to secure additional financing on favorable terms, or at all, when we require it, our ability to continue to grow our business or react to market conditions could be impaired and in turn adversely affect our financial position and results of operations.
As of June 30, 2026, we had an accumulated deficit of $178.5 million and a cash balance of $2.4 million. For the six months ended June 30, 2026, we recorded a net loss of $10.7 million, used cash in operations of $8.0 million, and as of June 30, 2026, had a stockholders' deficiency of $1.5 million. In addition, as of June 30, 2026, the principal amount outstanding on our Senior Secured Loan with the Lenders, as defined and described below, was approximately $9.3 million, with no remaining availability under such Senior Secured Loan, and a maturity date on the Senior Secured Loan of September 30, 2026. Our cash flow and net losses for the six months ended June 30, 2026 are indicators that raise substantial doubt about our ability to continue as a going concern for at least one year from the date of this Quarterly Report. If we become unable to continue as a going concern, we may have to curtail or suspend our operations and/or dispose of assets and might realize significantly less than the values at which they are carried on its consolidated financial statements. These actions may cause our stockholders to lose all or part of their investment in the Company's common stock. We intend to continue to expand, grow and develop our business, which may require additional capital to develop new products, enhance our platform, expand distribution, improve our operating infrastructure, react to market conditions and finance working capital requirements. Accordingly, we may need to engage in additional equity or debt financings to secure additional capital. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. On September 26, 2025, we entered into the first amendment (the "Amendment") to our Senior Secured Loan and Security Agreement (as amended, the "Loan Agreement") with certain funds affiliated with Whitebox Advisors, LLC (the "Lenders") and Cantor Fitzgerald Securities, as administrative agent and collateral agent, with respect to our revolving credit facility (the "Senior Secured Facility"). The Amendment provides a revolving credit commitment in an aggregate amount of $9.25 million and, as of December 31, 2025, the principal amount outstanding was $9.25 million. The Senior Secured Facility is secured by substantially all of our assets, including all intellectual property. Our current and future indebtedness, including the revolving credit commitment under the Senior Secured Facility, may have significant negative effects on our operations, including: - impairing our ability to obtain additional financing in the future (or to obtain such financing on acceptable terms) for working capital, capital expenditures, acquisitions or other important needs, and subjecting us to other restrictive covenants that may reduce our ability to take certain corporate actions;- requiring us to dedicate a portion of our cash resources to the payment of interest and principal, reducing money available to fund working capital, capital expenditures, potential acquisitions, international expansion, new product development, new enterprise relationships and other general corporate purposes; - requiring us to repay the principal and accrued interest on the revolving credit commitment under the Senior Secured Facility in an event of default under the covenants thereof, which could impair our liquidity and reduce the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other important needs; - limiting our ability to adjust to rapidly changing conditions in the industry, reducing our ability to withstand competitive pressures and making us more vulnerable to a downturn in general economic conditions or business than our competitors with relatively lower levels of debt; and - requiring us, in certain circumstances, to obtain approval from Whitebox Advisors, LLC and/or the lenders party to the Senior Secured Facility before embarking on certain mergers, acquisitions, capital expenditures, or other operational actions. We intend to satisfy our current and future debt service obligations with our then existing cash and cash equivalents. However, we may not have sufficient funds, and may be unable to arrange for additional financing, to pay the amounts due under the Senior Secured Facility or any other debt instruments. In addition, the Senior Secured Facility contains, and the agreements governing our future indebtedness may contain, restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interest. These restrictive covenants include, among others, limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, investments (including acquisitions), dividends and other restricted payments and transactions with affiliates. Our failure to make payments under or comply with other covenants contained in the documents governing our indebtedness could result in an event of default which, if not cured or waived, could result in the acceleration of substantially all of our debt and potentially the foreclosure on our assets in the event we are unable to repay all amounts owed. If we are unable to secure additional funding on favorable terms, or at all, when we require it, our ability to continue to grow our business to react to market conditions could be impaired, which would adversely affect our financial position and results of operations.
Risk Highlights Q2, 2026
Risk Word Cloud
Risk Factors Full Breakdown - Total Risks 44
- Share Price & Shareholder Rights - Risk 1ChangedWe have failed, and may in the future fail, to meet the continued listing requirements of NYSE American, which could result in a de-listing of our common stock.
We may fail to satisfy the continued listing requirements of NYSE American LLC ("NYSE American"), such as the corporate governance requirements or the minimum stock price and stockholders' equity requirements, and NYSE American may take steps to de-list our common stock. For example, numerous factors, such as negative financial or operational results, could adversely affect the market price of our common stock and our stockholders' equity, and jeopardize our ability to meet or maintain NYSE American's continued listing requirements, resulting in de-listing. On May 29, 2026, we received a notice (the "Notice") from NYSE American stating that we are not in compliance with the continued listing standards set forth in Section 1003(a)(ii) of the NYSE American Company Guide (the "Company Guide"), which requires a company to have stockholders' equity of at least $4.0 million if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years, and Section 1003(a)(iii) of the Company Guide, which requires a company to have stockholders' equity of at least $6.0 million if it has reported losses from continuing operations and/or net losses in its five most recent fiscal years. The Notice also indicated that we are not currently eligible for any exemption under Section 1003(a) of the Company Guide, including the exemption available to companies with a total market capitalization exceeding $50 million, among other requirements. A de-listing or the announcement of a potential de-listing will have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In connection with this non-compliance, we submitted a plan (the "Plan") to NYSE American on June 26, 2026 describing the actions we have taken or will take to regain compliance with the continued listing standards by November 29, 2027. If NYSE American accepts the Plan, we will be subject to periodic reviews, including quarterly monitoring, to assess our compliance with it. If NYSE American does not accept it, if we fail to regain compliance with the continued listing standards by November 29, 2027, or if we fail to make progress consistent with the Plan, NYSE American will initiate delisting proceedings as appropriate, subject to our right to appeal any staff delisting determination in accordance with Section 1010 and Part 12 of the Company Guide. The Notice has no immediate effect on the listing of our common stock, which continues to be listed and traded on NYSE American under the symbol "REED," subject to our compliance with NYSE American's other continued listing requirements, although our common stock now carries an added designation of ".BC" to indicate that its status is "below compliance." We are committed to regaining compliance with NYSE American's continued listing standards. However, there can be no assurance that NYSE American will accept the Plan or that we will regain or maintain compliance with NYSE American's continued listing requirements within the required timeframe or at all. In the event of a de-listing, we may attempt to take actions to restore our compliance with the NYSE American listing requirements, but we can provide no assurance that any such action would allow our common stock to become re-listed, stabilize the market price or improve the liquidity of our common stock, or prevent future non-compliance with the NYSE American listing requirements. If our common stock is delisted from NYSE American, we and our stockholders could face significant material adverse consequences, including limited availability of market quotations for our common stock, reduced liquidity, a determination that our common stock is a "penny stock" subject to additional regulatory burdens, limited news and analyst coverage, and a decreased ability to issue additional securities or obtain additional financing in the future.
- Share Price & Shareholder Rights - Risk 2The market price of our common stock has been and may continue to be volatile or may decline regardless of our operating performance.
The market price of our common stock is likely to be volatile and could fluctuate widely in response to many factors, including but not limited to: - volatility and instability in the financial and capital markets;- adverse macroeconomic conditions or geopolitical events, including international trade relations and tariffs, high levels of inflation, heightened interest rates, and geopolitical tensions such as the conflicts between Ukraine and Russia and in the Middle East;- announcements relating to our existing and new products;- announcements by competitors that impact our competitive outlook;- developments with respect to intellectual property rights;- announcements relating to strategic transactions, including acquisitions, collaborations, or similar arrangements;- actual or anticipated variations in our operating results due to the level of development expenses and other factors;- changes in financial estimates by equities research analysts and whether our earnings (or losses) meet or exceed such estimates;- announcement or expectation of additional financing efforts and receipt, or lack of receipt, of funding in support of conducting our business;- sales of our common stock by us, our insiders, or other stockholders, or issuances by us of shares of our common stock in connection with strategic transactions;- conditions and trends in our industry;- recruitment and departures of key personnel;- litigation or arbitration;- general economic, political, and market conditions and other factors; and - the occurrence of any of the risks described in this section titled "Risk Factors." In addition, if the stock market for beverage companies, or the stock market generally, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, operating results or financial condition. Stock prices of many beverage companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. As a result of these and other factors, you may be unable to sell your shares of our common stock at or above the price you paid. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.
- Share Price & Shareholder Rights - Risk 3Our principal stockholders own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
Our holders of 5% or more of our capital stock and their respective affiliates beneficially hold a significant percentage of our outstanding common stock, including D&D, our controlling stockholder. As of the date of this Annual Report on Form 10-K, D&D and its affiliates beneficially own approximately 57% of our common stock. These stockholders, acting together, would be able to control the outcome of all matters requiring stockholder approval. For example, these stockholders would be able to control the outcome of elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This level of control may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders. The significant concentration of stock ownership may adversely affect the trading price of our common stock due to investors' perception that conflicts of interest may exist or arise. In addition, if these principal stockholders sell a substantial number of shares of our common stock in the public market, the market price of our common stock could be adversely impacted. The perception among the public that these sales will occur could also contribute to a decline in the market price of our common stock.
- Share Price & Shareholder Rights - Risk 4Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall.
Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. Pursuant to certain registration rights agreements, we have registered shares of our common stock sold in private transactions for resale, including shares of common stock held by D&D, our controlling stockholder. In addition, we have filed, and may file in the future, registration statements on Form S-8 under the Securities Act of 1933, as amended (the "Securities Act"), registering the issuance of shares of common stock subject to options or other equity awards issued or reserved for future issuance under our equity plans. Shares registered under the registration statement on Form S-8 will be available for sale in the public market subject to vesting arrangements and exercise of options, and the restrictions of Rule 144 in the case of our affiliates. If these additional shares of common stock are sold, or if it is perceived that they will be sold, in the public market, the trading price of our common stock could decline. We cannot predict what effect, if any, sales of our shares in the public market or the availability of shares for sale will have on the market price of our common stock. However, future sales of substantial amounts of our common stock in the public market, including shares issued upon exercise of outstanding options or warrants, or the perception that such sales may occur, could adversely affect the market price of our common stock.
- Share Price & Shareholder Rights - Risk 5Our largest stockholder's preemptive right could dissuade a strategic investor from making an investment in the Company.
Our largest stockholder, D&D, holds a preemptive right to purchase its pro-rata share, based on the ratio of shares of our common stock it owns to all the outstanding shares of our common stock, of any investment in our equity securities or equity-linked securities. As such, D&D's exercise of its preemptive right could serve to dissuade a new strategic investor from proposing an investment in us or significantly decrease the size of a new investor's investment.
- Share Price & Shareholder Rights - Risk 6Our second amended and restated bylaws (the "Bylaws") designate the Delaware Court of Chancery or Delaware state or United States federal district courts as the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit such stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, other employees or other stockholders.
Our Bylaws provide that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of claims or causes of action under Delaware statutory or common law: any derivative claims or causes of action brought on our behalf; any claims or causes of action asserting a breach of a fiduciary duty; any action asserting a claim against us arising pursuant to the Delaware General Corporation Law (the "DGCL"), our certificate of incorporation, or our Bylaws; or any action asserting a claim against us that is governed by the internal affairs doctrine. In addition, our Bylaws provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. These choice of forum provisions will not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Such provisions are intended to benefit and may be enforced by us and our officers and directors, employees and agents. These provisions may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation. These choice of forum provisions may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits with respect to such claims or make such lawsuits more costly for stockholders, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. While the Delaware courts have determined that such choice of forum provisions are facially valid, a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions, and there can be no assurance that such provisions will be enforced by a court in those other jurisdictions. If a court were to find either choice of forum provisions contained in our Bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.
- Share Price & Shareholder Rights - Risk 7There is currently a limited public market for our common stock, a trading market for our common stock may never develop, and our common stock prices may be volatile and could decline substantially.
Although our common stock was listed on the NYSE American for trading beginning on December 5, 2025, an active trading market for our common stock may not be sustained in the future. As a result of these and other factors, investors may be unable to resell shares of our common stock at or above the price for which they purchased them, at or near quoted bid prices, or at all. Further, an inactive market may also impair our ability to raise capital by selling additional equity in the future, and may impair our ability to enter into strategic partnerships or acquire companies or products by using shares of our common stock as consideration.
- Share Price & Shareholder Rights - Risk 8We are a "controlled company" within the meaning of the NYSE American rules and, as a result, qualify for, and may rely on, exemptions and relief from certain corporate governance requirements. If we rely on these exemptions, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.
We are a "controlled company" within the meaning of the NYSE American corporate governance standards. Under these corporate governance standards, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements. For example, controlled companies are not required to have: - a board that is composed of a majority of "independent directors," as defined under the NYSE American rules;- a compensation committee that is composed entirely of independent directors; and - director nominations be made, or recommended to the full board of directors, by its independent directors, or by a nominations/governance committee that is composed entirely of independent directors. As a "controlled company" within the meaning of the NYSE American rules, we are permitted to rely on, and may elect to utilize, one or more of the exemptions from certain corporate governance standards of the NYSE American for as long as we continue to qualify as a "controlled company." If we do rely on such exemptions in the future, our stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE American. Investors may find our common stock less attractive as a result of our reliance on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
- Share Price & Shareholder Rights - Risk 9We are a "smaller reporting company" and we cannot be certain if the reduced reporting requirements applicable to "smaller reporting companies" will make our common stock less attractive to investors.
We are a "smaller reporting company," meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a "smaller reporting company" until (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million as of the prior June 30. Our designation as a "smaller reporting company," allows us to take advantage of many of the same exemptions from disclosure requirements, including presenting only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K not being required to comply with the independent auditor attestation requirements of Section 404 and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile. The preceding risks, some of which have occurred and any of which may occur in the future, can have a material adverse effect on our business or financial performance, which in turn can affect the price of our publicly traded securities. These are not the only risks we face. There may be other risks we are not currently aware of or that we currently deem not to be material but that may become material in the future.
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