Reed's, Inc. Announces Increase in the Conversion Ratio of Transferable Rights Offering
04 Dicembre 2009 - 12:31AM
Marketwired
Reed's, Inc. (NASDAQ: REED) (NASDAQ: REEDR), announced today that
the Company has increased the conversion rate of its Series B
Convertible Preferred Stock ("Series B Preferred") to seven (7)
shares of common stock per share of Series B Preferred. The
conversion price is now $1.43 per share. Investors may purchase
Series B Preferred shares for $10.00 per share by exercising four
(4) transferable rights (NASDAQ: REEDR).
Each share of Series B Preferred carries a five percent (5%)
annual dividend for a term of three (3) years. The dividends are
currently worth about $0.14 per common share, as valued by using
the net present value formula using the Company's cost of equity as
the discount rate.
There are two reasons why the convertible preferred is worth
more than the underlying shares into which they can be converted.
First, preferred shares pay dividends while common stock usually
doesn't. As a result, the preferred investor receives all the
upside potential of the common stock and more cash while he or she
waits. Second, if something goes wrong, the preferred shares are
more protected. Since the preferred shares are senior to common,
the preferred shareholders receive all their investment back before
the common shareholders are paid anything.
Important Dates:
Subscription Period From November 16, 2009 to
December 21, 2009(2)
Last Day Rights May Be Traded December 16, 2009(2)
Expiration Date December 21, 2009(2)
(1) Assumes three day settlement.
(2) Unless the offering is extended.
The Company has distributed to each such holder one transferable
right for every share of common stock owned on the record date of
November 13, 2009. During the subscription period, the transferable
rights are being traded on the NASDAQ Exchange (NASDAQ: REEDR).
Each four (4) rights will entitle the holder to purchase one share
of Series B Preferred at the subscription price of $10.00 per
share. Each share of Series B Preferred carries a five percent (5%)
annual dividend for a term of three (3) years, will have an initial
stated value of $10.00 per share, and may be convertible into
shares of common stock at a conversion ratio of seven (7) shares of
common stock for each share of Series B Preferred held at the time
of conversion, representing an initial conversion price of $1.43
per share, which is subject to adjustment. Rights holders who fully
exercise their rights will be entitled to subscribe, subject to
certain limitations and subject to allotment, for additional shares
that remain unsubscribed as a result of any unexercised rights in
an amount equal to up to 400% of the shares of Series B Preferred
for which such subscriber was otherwise entitled to subscribe.
Shares of Series B Preferred that remain unsubscribed at the
expiration of the rights offering will be reoffered to the public
at $10.00 per share. Consummation of the rights offering is subject
to customary closing conditions.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy these securities, nor shall there
be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state. The
securities may only be offered by means of a prospectus, additional
copies of which may be obtained, when available, by contacting the
information agent, MacKenzie Partners, Inc., at 105 Madison Avenue,
New York, NY 10016, toll-free: (800) 322-2885, collect: (212)
929-5500 or via email at reedrights@mackenziepartners.com.
Reed's, Inc.
Reed's, Inc. makes the top selling sodas in natural food markets
nationwide and is currently selling in 10,500 supermarkets in
natural foods and mainstream. Its six award-winning non-alcoholic
Ginger Brews are unique in the beverage industry, being brewed, not
manufactured and using fresh ginger, spices and fruits in a brewing
process that predates commercial soft drinks. In addition, the
Company owns the top selling root beer line in natural foods, the
Virgil's Root Beer product line, and the top selling cola line in
natural foods, the China Cola product line. Other product lines
include: Reed's Ginger Candies and Reed's Ginger Ice Creams. Reed's
products are sold through specialty gourmet and natural food
stores, mainstream supermarket chains, retail stores and
restaurants nationwide, and in Canada. For more information about
Reed's, please visit the company's website
at:http://www.reedsgingerbrew.com or call 800-99-REEDS.
SAFE HARBOR STATEMENT
Some portions of this press release, particularly those
describing Reed's goals and strategies, contain "forward-looking
statements." These forward-looking statements can generally be
identified as such because the context of the statement will
include words, such as "expects," "should," "believes,"
"anticipates" or words of similar import. Similarly, statements
that describe future plans, objectives or goals are also
forward-looking statements. While Reed's is working to achieve
those goals and strategies, actual results could differ materially
from those projected in the forward-looking statements as a result
of a number of risks and uncertainties. These risks and
uncertainties include difficulty in marketing its products and
services, maintaining and protecting brand recognition, the need
for significant capital, dependence on third party distributors,
dependence on third party brewers, increasing costs of fuel and
freight, protection of intellectual property, competition and other
factors, any of which could have an adverse effect on the business
plans of Reed's, its reputation in the industry or its expected
financial return from operations and results of operations. In
light of significant risks and uncertainties inherent in
forward-looking statements included herein, the inclusion of such
statements should not be regarded as a representation by Reed's
that they will achieve such forward-looking statements. For further
details and a discussion of these and other risks and
uncertainties, please see our most recent reports on Form 10-K and
Form 10-Q, as filed with the Securities and Exchange Commission, as
they may be amended from time to time. Reed's undertakes no
obligation to publicly update any forward-looking statement,
whether as a result of new information, future events, or
otherwise.
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Andrew Haag Managing Partner IRTH Communications, LLC
1-866-976-IRTH (4784) MacKenzie Partners, Inc. 105 Madison Avenue
New York, NY 10016 toll-free: (800) 322-2885 collect: (212)
929-5500 email: Email Contact
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