What changed in this filing

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Item 9A. Controls and Procedures

2023-05-15 compared with 2022-04-15 · 254 added, 306 removed, 435 unchanged (56% of the section changed)

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in Internal Control over Financial Reporting

were no changes in our internal control over financial reporting during the three-month period ended December 31, 2021, that have

materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

were no changes in our internal control over financial reporting during the three-month period ended December 31, 2022, that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls

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Other Information

On March 28, 2022, the

Company entered into a financing agreement with Alterna Capital Solutions (“ACS”), for a line of credit to replace its existing

credit facility with Rosenthal & Rosenthal, Inc.

The ACS line of credit is for a term of 3 years and provides for borrowings of up

Borrowings are based upon eligible accounts receivable and inventory.

The line of credit is secured by eligible accounts receivable and inventory

of the Company.

Inventory collateral is set to a maximum of 100% of

eligible accounts receivable.

An overadvance rider is in place which provides for up to $400 of additional borrowing beyond those amounts

(the “Over Advance”).

Borrowings under the ACS

financing agreement bear interest of prime plus 4.75% but not less than 8.0% on receivables.

Borrowings based on inventory bear an interest

of prime plus 5.25% but not less than 8.5%.

The additional overadvance rider bears a rate of prime plus 12.75%, but not less than 16.00%.

Additionally, the line of credit is subject to monthly monitoring fee of $1 with a minimum usage requirement on the credit facility.

A loan balance of less than $1,500 will bear interest at a rate in line with account receivables advances plus the monthly monitoring

The Company incurred $503

of direct costs of the transaction, consisting primarily of broker, bank and legal fees.

These costs have been capitalized and are being

amortized over the 3-year life of the ACS agreement.

On March 30, 2022, the Company paid in full its outstanding

balance on its credit facility with Rosenthal & Rosenthal, Inc.

Disclosure Regarding Foreign Jurisdictions

that Prevent Inspections

Not applicable,

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers , and Corporate Governance.

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and qualified.

The following table sets forth certain information with respect to our current directors and executive officers as

of date of this Annual Report:

The following table sets forth certain information with respect to our current directors and executive officers as of

date of this Annual Report:

Executive Officer, Director

Financial Officer

Chief Financial Officer

Commercial Officer

Sales Officer

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Chairman of the Audit Committee and Member of Compensation Committee

member of the Compensation and Governance Committees

Chairman of the Audit Committee

Imbrogno, Jr.

member of the Audit Committee

Member of the Audit Committee and Member of Compensation Committee

Experience of Directors and Executive Officers

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from the State University of New York at Albany.

Spisak has served as Chief Financial Officer of Reed’s since December 2019.

Prior to joining Reed’s, Mr.

provided financial leadership, including extensive expertise over a broad range of finance functions during his 26 year tenure in the

North America region of Diageo, a multinational alcoholic beverage company with net sales over UK £12.9 billion (U.S.

$16 billion).

Spisak held numerous positions in multiple divisions of Diageo, most recently serving as Vice President of Finance and Controller

of North America.

Previously, he held positions of Vice President of Commercial Finance, Director of Business Performance and Senior

Finance Director of Marketing and Innovation Decision Support, as well as other roles in finance.

Prior to Diageo, Mr.

Spisak served

at International Masters Publishers, Inc., a private company with publishing activities in 35 countries.

Spisak holds an MBA in International

Business from Fairfield University and a Bachelor of Science in Finance from the University of Rhode Island.

Tinnelly was appointed Interim Chief Financial Officer effective March 31, 2023.

over 30 years of finance and accounting experience in global public and private equity company environments.

She is a Certified Public

Accountant and has served as Vice President and Corporate Controller of Reed’s since July 2018.

She previously served as Interim

Chief Financial Officer of Reed’s, from November 22, 2019, through December 1, 2019.

Prior to joining Reed’s, from May 2014

to May 2017, she served as Assistant Controller of Steel Excel, Inc., a subsidiary of Steel Partners Holdings, a global diversified holding

Prior to 2014, Ms.

Tinnelly served as Vice President Financial Planning & Analysis and as Assistant Corporate Controller

at USI Insurance Services, Assistant Vice President of Royal Bank of Scotland (RBS) Group, multiple financial roles at Momentive Performance

Materials and General Electric and financial auditing at PriceWaterhouseCoopers.

Tinnelly holds a Master of Business Administration

in Finance and a Bachelor of Business Administration in Public Accounting both from Pace University.

Burleson was appointed Chief Commercial Officer effective February 1, 2023.

In this role, Mr.

Burleson leads the sales organization

as well as partners with the operations department to streamline supply chain and cost reduction initiatives.

He also focuses on strategic

partnerships and growth opportunities.

From April 25, 2022, to January 31, 2023, Mr.

Burleson served as Chief Commercial Officer of Kin

Social Tonics.

From March 19, 2018, through April 22, 2022, Mr.

Burleson was a Vice President and General Manager of Fever Tree, USA.

Burleson also served as a director of Fever Tree USA.

Cohane has served as Reed’s Chief Sales Officer since March of 2008 and previously as Vice President of Sales since August

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Jaffe is a graduate of the Stanford Business School Executive Program, holds a Bachelor of Science from LaSalle University and holds

a Masters Professional Director Certification from the American College of Corporate Directors, a public company director education and

credentialing program.

a Master’s Professional Director Certification from the American College of Corporate Directors, a public company director education

and credentialing program.

Imbrogno, Jr.

has served as a director since August 7, 2019.

He served a 40-year tenure at PepsiCo, bringing extensive

expertise in beverage supply chain and management.

At PepsiCo he served in a variety of field operating assignments and staff positions

including the role of Senior Vice President of Worldwide Technical Operations.

In this role he was responsible for Pepsi-Cola’s

worldwide beverage quality, concentrate operations, research & development and contract manufacturing, reporting directly to the

heads of Pepsi-Cola North America and PepsiCo Beverages International.

Imbrogno’s retirement from PepsiCo, he

has consulted for multiple companies including PepsiCo.

Kallman has served as a director since December 30, 2021.

Kallman is the founder of Boston Harbor Distillery, LLC,

makers of craft whiskey, gin, rum, liqueurs, and other inventive spirits, and has served as its Chief Executive Officer since 2012.

1984 she co-founded The Boston Beer Company (NYSE:

SAM) and served as EVP, overseeing sales & marketing as well as the company’s

human capital.

Kallman was instrumental in paving the way for craft beer acceptance by making it available throughout the US while educating

consumers on American craft beer superiority.

In addition, as the pioneering woman in the beer industry, she was able to lead the way

for other women to earn the respect and credibility they deserve.

He served a 40-year tenure at PepsiCo, bringing extensive expertise

in beverage supply chain and management.

At PepsiCo he served in a variety of field operating assignments and staff positions including

the role of Senior Vice President of Worldwide Technical Operations.

In this role he was responsible for Pepsi-Cola’s worldwide

beverage quality, concentrate operations, research & development and contract manufacturing, reporting directly to the heads of Pepsi-Cola

North America and PepsiCo Beverages International.

Imbrogno’s retirement from PepsiCo, he has consulted for multiple

companies including PepsiCo.

Kosler was appointed as director effective July 1, 2022.

He has served as a mentor and strategic consultant through

his sole proprietorship, Kosler & Company since 2018.

Prior to his retirement, from 1982 through 2018, he was the founder and owner

of Kosler & Company, S.C., a boutique CPA and consulting firm.

From 2001 to 2018, he was also the founder and Managing Partner of

Brookhill Financial, LLC, an investment management firm focused on the retirement and investment accounts of clients of Kosler &

Company, S.C.

Kosler earned a B.B.A.

with a major in Accounting from the University of Wisconsin - Milwaukee in 1976.

was a licensed Certified Public Accountant for over 31 years, a Certified Valuation Analyst for over 16 years, a Registered Investment

Advisor Representative for over 21 years and accredited in business valuations by the AICPA for over 8 years.

Zaltzman has served as a director since March 21, 2022.

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under the additional requirements of Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 (the “Exchange Act”).

board has determined James C.

Bass meets SEC requirements of an “audit committee financial expert” within the meaning of

the Sarbanes Oxley Act of 2002, Section 407(b).

In addition, the board determined that (i) none of the Audit Committee members have participated

in the preparation of the financial statements of the company at any time during the past three years and (2) Audit Committee members

are able to read and understand fundamental financial statements.

Additionally, we intend to continue to have at least one member of

the Audit Committee whose experience or background results in the individual’s financial sophistication.

The Audit Committee charter

is posted on our website at www.reedsinc.com.

Chief Executive Officer and all senior financial officers, including the Chief Financial Officer, are bound by a Code of Ethics that

complies with Item 406 of Regulation S-B of the Exchange Act.

Our Code of Ethics is posted on our website at http://investor.reedsinc.com .

board has determined Thomas W.

Kosler meets SEC requirements of an “audit committee financial expert” within the meaning

of the Sarbanes Oxley Act of 2002, Section 407(b).

In addition, the board determined that (i) none of the Audit Committee members have

participated in the preparation of the financial statements of the company at any time during the past three years and (2) Audit Committee

members are able to read and understand fundamental financial statements.

Additionally, we intend to continue to have at least one member

of the Audit Committee whose experience or background results in the individual’s financial sophistication.

The Audit Committee

charter is posted on our website at www.reedsinc.com.

Chief Executive Officer and all senior financial officers, including the Chief Financial Officer and Interim Chief Financial Officer,

are bound by a Code of Ethics that complies with Item 406 of Regulation S-B of the Exchange Act.

Our Code of Ethics is posted on our

website at http://investor.reedsinc.com .

with Section 16(a) of the Exchange Act

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in ownership of our equity securities.

our knowledge, based solely upon a review of Forms 3 and 4 and amendments thereto furnished to Reed’s under 17 CFR 240.16a-3(e)

during our fiscal year ended December 31, 2021 the following individuals each filed one late Form 4 representing one transaction (unless

otherwise noted):

John Bello(2).

our knowledge, based solely upon a review of Forms 3 and 4 and amendments thereto furnished to Reed’s under 17 CFR

240.16a-3(e) during our fiscal year ended December 31, 2021, the following individuals each filed one late Form 4 representing one

transaction (unless otherwise noted):

Snyder, Jr, Lewis Jaffe, Thomas W.

Kosler, Rhonda Kallman (former director), Louis

Imbrogno, Jr.

(2 transactions), James C.

Bass, Rhonda Kallman (former director) and Leon M.

Zaltzman each filed one late Form 3.

None of our officers or directors filed Form 5.

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Executive Compensation

following table summarizes all compensation for fiscal years 2021 and 2020 earned by our “Named Executive Officers”

during the reported periods:

following table summarizes all compensation for fiscal years 2022 and 2021 earned by our “Named Executive Officers” during

the reported periods:

Name and Principal Position

Chief Executive Officer (Former Chief Operating Officer)

Chief Executive Officer

Chief Financial Officer

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December 2, 2019.

The agreement may be terminated by the Company or Mr.

Spisak, with or without notice and with or without cause, pursuant

to the terms of the agreement.

Spisak’s base annual base salary was increased to $257,500 from $250,000 effective March 1, 2020.

Spisak is also eligible to receive performance-based cash bonus at a target amount of 30% of his base salary.

Pursuant to his

employment agreement, Mr.

Spisak received an initial equity award of 150,000 incentive stock options and 150,000 restricted stock awards

on March 3, 2020, one-half of the award (75,000 options and 75,000 restricted stock awards) vesting in equal increments on an annual

basis for four years and the remainder (75,000 options and 75,000 restricted stock awards) vesting based on performance criteria to be

determined by the board of directors or compensation committee.

Spisak is also eligible to participate in Reed’s other benefit

plans available to its executive officers.

The agreement contains customary confidentiality, non-competition and invention assignment

was also eligible to receive performance-based cash bonus at a target amount of 30% of his base salary.

Pursuant to his employment agreement,

Spisak received an initial equity award of 150,000 incentive stock options and 150,000 restricted stock awards on March 3, 2020,

one-half of the award (75,000 options and 75,000 restricted stock awards) vesting in equal increments on an annual basis for four years

and the remainder (75,000 options and 75,000 restricted stock awards) vesting based on performance criteria to be determined by the board

of directors or compensation committee.

Spisak was also eligible to participate in Reed’s other benefit plans available to

its executive officers.

The agreement contained customary confidentiality, non-competition and invention assignment covenants.

Spisak resigned from his position as Chief Financial Officer effective March 30, 2023.

Salary Arrangements of Other Named Executive Officers

Burleson receives a salary of $300,000 and is eligible for an annual performance bonus based on a target of 35% of his annual salary

(to be determined by the company in its sole discretion).

As an inducement to accept the position, Mr.

Burleson receive a vested RSA

grant of approximately 18,160 shares of common stock of Reed’s valued at $75,000 pursuant to the Reed’s, Inc.

Incentive Compensation Plan, as amended December 30, 2021.

Cohane receives an annual salary which increased from $210,000 to $250,000 on March 1, 2021, with a 30% bonus target, and he is eligible

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Change-in-Control

General Policy

is our general policy that awards that vest over a term greater one-year include provisions for acceleration upon a change-in-control.

Equity Compensation Plans

is our general policy that awards that vest over a term greater than one-year include provisions for acceleration upon a change-in-control.

Compensation Plans

2017 Plan provides the consequences of a change-in-control provisions may be set forth in individual award agreements.

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common stock, (b) the acquisition within a twelve-month period of 30% or more of the company’s common stock, (c) the replacement

of a majority of the board of directors, within a twelve-month period, by directors whose election was not endorsed by the incumbent board

of directors, or (d) the acquisition of all or substantially all of the company’s assets.

of a majority of the board of directors, within a twelve-month period, by directors whose election was not endorsed by the incumbent

board of directors, or (d) the acquisition of all or substantially all of the company’s assets.

The full definition of “change

in control” is set out in the 2020 Plan.

General provisions of the 2017 Plan and 2020 Plan are subject to contractual

modifications that may be set forth in executive employment agreements and award agreements.

provisions of the 2017 Plan and 2020 Plan are subject to contractual modifications that may be set forth in executive employment agreements

and award agreements.

Equity Awards at Year-End

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outstanding as of December 31, 2022:

Options (#) Exercisable

Incentive Plan Awards:

Name and Position

Options (#) Unexercisable

Equity Incentive Plan Awards:

Number of Securities

of Shares or Units of Stock That Have Not Vested (#)

Value of Shares or Units of Stock That Have Not Vested ($)

Incentive Plan Awards:

Number of Shares or Units of Stock That Have Not Vested (#)

Market Value of Shares or Units of Stock That Have Not Vested ($)

Equity Incentive Plan Awards:

Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Incentive Plan Awards:

Equity Incentive Plan Awards:

Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)

Executive Officer, Former Chief Operating Officer)

(Chief Executive Officer)

Financial Officer) (1)

(Chief Sales Officer)

Spisak resigned effective March 30, 2023.

following table summarizes the compensation paid to our non-employee directors for the year ended December 31, 2022:

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in accordance with Financial Accounting Standards, excluding any impact of assumed forfeiture rates.

Grossman resigned from his position as director

effective December 30, 2021.

Rhonda Kallman was elected to the board on December

30, 2021 at the Reed’s, Inc.

Kosler was appointed to the board effective July 1, 2022.

Kallman was elected to the board on December 30, 2021, at the Reed’s, Inc.

2021 Annual Stockholders Meeting.

She resigned from

her position as director effective June 30, 2022.

Zaltzman was appointed to the board effective March 22, 2022.

Zaltzman has elected to waive non-employee director compensation

due to his position with the Union Square Entities.

Security Ownership of Certain Beneficial Owners, Management and Related Stockholder Matters

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is 201 Merritt 7 Corporate Park, Norwalk, Connecticut 06851.

Named Beneficial Owner

Directors and Named Executive Officers

Named Beneficial Owner Directors and Named Executive Officers

Number of Shares

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Neal Cohane (4)

Louis Imbrogno (7)

Joann Tinnelly (6)

Louis Imbrogno, Jr.

Lewis Jaffe (8)

Rhonda Kallman (10)

Christopher Burleson

Directors and Named Executive Officers as a group (10 persons)

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Union Square Entities (11)

Whitebox Entities (12)

(1) Based on 2,603,661 shares outstanding as of March 10, 2022.

Includes 50,000 shares issuable upon exercise of currently-exercisable options, 80,344 RSAs from 2022 Board Compensation, and

warrants of 1,500,000.

Includes 1,000 shares issuable upon exercise of currently exercisable options, 1,607 RSAs from 2022 Board Compensation and warrants of

Includes 13,129 shares issuable upon exercise of currently exercisable options.

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Includes 1,600 shares issuable upon exercise of currently exercisable options and 1,607 RSAs from 2022 Board Compensation.

On March 21, 2022, the Board of Directors of the Company, upon recommendation from its governance committee, expanded the board from

six to seven members and appointed Leon M.

Zaltzman to serve as director.

Zaltzman is voting and dispositive control over shares

held by the Union Square Entities.

Zaltzman is voting and dispositive control over shares held by the Union Square Entities.

Includes 1,607 RSAs from 2022 Board Compensation

Principal address is 1120 Avenue of the Americas, Suite 1512, New York, NY 10036.

Zaltzman is the founder and managing member

of Union Square Park Capital Management, LLC (“USPCM”), an SEC Registered Investment Adviser firm and is also the managing

member of Union Square Park GP (“USPGP”).

USPCM and USPGP serve as the investment manager and general partner to Union Square

Park Partners, LP (“USPP Fund”), respectively.

Foregoing entities hereinafter collectively referred to as the “Union

Square Entities Mr.

Zaltzman is the founder and managing member of

Union Square Park Capital Management, LLC (“USPCM”), an SEC Registered Investment Adviser firm and is also the managing member

of Union Square Park GP (“USPGP”).

USPCM and USPGP serve as the investment manager and general partner to Union Square Park

Partners, LP (“USPP Fund”), respectively.

Foregoing entities hereinafter collectively referred to as the “Union Square

Zaltzman has voting and dispositive control over shares held by the Union Square Entities.

Does not include 5,357,143

shares of common stock issuable upon exercise of certain warrants, which may not be exercised until September 27, 2022 and are subject

to a 19.99% beneficial ownership blocker.

Includes Whitebox Advisors LLC, a Delaware limited liability company (“WA”), Whitebox General Partner LLC, a Delaware limited

liability company (“WGP”) and Whitebox Multi-Strategy Partners, a Cayman Islands exempted limited partnership (“WMP”).

The address of the business office of WA and WGP is:

3033 Excelsior Boulevard, Suite 500, Minneapolis, MN 55416.

The address of the business

office of WMP is Mourant Governance Services (Cayman) Limited, 94 Solaris Avenue, Camana Bay, PO Box 1348, Grand Cayman, KY1-1108, Cayman

Each of WA and WGP is deemed to be the beneficial owner of 257,718 shares (includes shares underlying $10,711,250 principal

amount and accrued interest of secured convertible promissory notes subject to 9.9% blocker).

WMP may be deemed to be the beneficial

owner of 148,904 shares (includes shares underlying $10,711,250 principal amount and accrued interest of secured convertible promissory

notes subject to 9.9% blocker r as applied to the aggregate number of Notes held by WA’s clients and then applied pro rata to the

Notes held directly by WMP).

Each of WA and WGP is deemed to beneficially own 9.9% of the common stock.

WMP may be deemed to beneficially

own 5.7% of the common stock.

Authorized for Issuance under Equity Compensation Plans

September 29, 2017, the 2017 Incentive Compensation Plan for 60,000 shares was approved by our shareholders.

On December 13, 2018

the Amended and Restated 2017 Incentive Compensation Plan was approved by our shareholders increasing the number of shares issuable by

3,500,000 to 6,500,000.

On December 16, 2019, the Second Amended and Restated 2017 Incentive Compensation Plan (“2017 Plan”)

was approved by our shareholders, increasing the number of shares issuable by 1,000,000 to 7,500,000.

On December 13, 2018, the

Amended and Restated 2017 Incentive Compensation Plan was approved by our shareholders increasing the number of shares issuable by 70,000

On December 16, 2019, the Second Amended and Restated 2017 Incentive Compensation Plan (“2017 Plan”) was approved

by our shareholders, increasing the number of shares issuable by 20,000 to 150,000.

December 21, 2020, the 2020 Equity Incentive Plan (“2020 Plan”) for 300,000 shares was approved by our shareholders.

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Restated 2020 Plan was adopted by our shareholders, increasing the 2020 Plan to 300,000 shares.

We have discontinued the 2017 Plan and all plans that preceded the 2017 Plan

and will not issue any new awards under these prior plans, although awards granted under these plans will remain in effect.

have discontinued the 2017 Plan and all plans that preceded the 2017 Plan and will not issue any new awards under these prior plans,

although awards granted under these plans will remain in effect.

following table provides information, as of December 31, 2022, with respect to equity securities authorized for issuance under compensation

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Our Governance Committee is

comprised of Lewis Jaffe and Rhonda Kallman.

comprised of Lewis Jaffe and Louis Imbrogno, Jr.

Jaffe serves as Chairman.

The board of directors has determined both of

the members of the Governance Committee are independent under the rules of the Nasdaq Stock Market, LLC.

If practicable, the reporting,

review and approval will occur prior to entry into the transaction.

If advance review and approval is not practicable, the Governance

Committee will review, and, in its discretion, may ratify the related party transaction.

Any related party transactions that are ongoing

in nature will be reviewed annually at a minimum.

The board of directors has determined both of the members

of the Governance Committee are independent under the rules of the Nasdaq Stock Market, LLC.

If practicable, the reporting, review and

approval will occur prior to entry into the transaction.

If advance review and approval is not practicable, the Governance Committee

will review, and, in its discretion, may ratify the related party transaction.

Any related party transactions that are ongoing in nature

will be reviewed annually at a minimum.

The related party transactions listed below were reviewed by the full board of directors.

Prior to August 2005, we did not have independent directors on our board to review and approve related party transactions.

The Governance

Committee shall review future related party transactions.

following includes a summary of transactions since the beginning of fiscal 2021 or any currently proposed transaction, in which

we were or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of

our total assets at year-end for the last two completed fiscal years and in which any related person had or will have a direct or indirect

material interest (other than compensation described under “Executive Compensation”).

to August 2005, we did not have independent directors on our board to review and approve related party transactions.

The Governance Committee

shall review future related party transactions.

following includes a summary of transactions since the beginning of fiscal 2022 or any currently proposed transaction, in which we were

or are to be a participant and the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total

assets at year-end for the last two completed fiscal years and in which any related person had or will have a direct or indirect material

interest (other than compensation described under “Executive Compensation”).

We believe the terms obtained or consideration

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available or the amounts that would be paid or received, as applicable, in arm’s-length transactions.

with California Custom Beverage, LLC (“CCB”)

part of the sale of our beverage manufacturing equipment and private label business to California Custom Beverage, LLC (“CCB”),

and entity owned by Christopher J.

Reed, our founder and former Chairman, director and most recently, Chief Innovation Officer, CCB assumed

the monthly payments on our lease obligation for the Los Angeles manufacturing plant.

Our release from the obligation by the lessor,

however, was dependent upon CCB’s deposit of $1.2 million of security with the lessor.

The deposit is secured by Mr.

pledge of common stock to the lessor and guaranteed personally by Mr.

Reed and his wife.

As of December 31, 2021, $800 has been deposited

with the lessor and Mr.

Reed has placed approximately 363,000 pledged shares valued at $131 that remain pledged in in escrow in favor

addition, we also entered into a 3-year co-packing contract for the production of Reed’s beverages in glass bottles at prevailing

West Coast market rates.

We are in the process of extending this agreement through the end of the year.

for a period of three years terminating December 31, 2021, we received a 5% royalty on CCB’s private label sales to

existing customers and a 5% referral fee on CCB’s private label sales to referred customers.

During the year ended December 31,

2021 and 2020, the Company recorded royalty revenue from CCB of $72 and $98, respectively.

December 31, 2020, the Company had an aggregate receivable balance from CCB of $682.

During the year ended December 31, 2021, the Company

recorded royalty revenue receivable of $72, and advanced expenses of $179, leaving an aggregate receivable balance of $933 at December

December 31, 2021, and December 31, 2020, the Company had accounts payable due to CCB of $614 and $856, respectively.

Support Received from John J.

March 11, 2021, we entered into an amendment to that certain Financing Agreement dated October 4, 2018, as amended or supplemented with

our senior secured lender, Rosenthal & Rosenthal, Inc.

(“Rosenthal”) releasing and replacing that irrevocable

standby letter of credit by Daniel J.

(“Rosenthal”) releasing and replacing that irrevocable standby

letter of credit by Daniel J.

Doherty, III and Daniel J.

Doherty, III 2002 Family Trust in the amount of $1.5 million, which

served as financial collateral for certain obligations of Reed’s under the Rosenthal credit facility, with a two million dollar

Doherty, III 2002 Family Trust in the amount of $1.5 million, which served as

financial collateral for certain obligations of Reed’s under the Rosenthal credit facility, with a two million dollar ($2,000,000)

pledge of securities to Rosenthal by John J.

Bello and Nancy E.

Bello, as Co-Trustees of THE JOHN AND NANCY BELLO REVOCABLE

LIVING TRUST, under trust agreement dated December 3, 2012 (the “Bello Trust”), evidenced by that certain Pledge Agreement

to Rosenthal, and as to which Rosenthal has a first and only perfected security interest by the Securities Account Control Agreement

held by securities broker).

November 24, 2021, the Bello trust provided additional collateral support securing a $2,500,000 over-advance under the Financing

Agreement, and John J.

Bello, as Co-Trustees of THE JOHN AND NANCY BELLO REVOCABLE LIVING TRUST,

under trust agreement dated December 3, 2012 (the “Bello Trust”), evidenced by that certain Pledge Agreement to Rosenthal,

and as to which Rosenthal has a first and only perfected security interest by the Securities Account Control Agreement held by securities

November 24, 2021, the Bello trust provided additional collateral support securing a $2,500,000 over-advance under the Financing Agreement,

Bello also provided a personal guarantee.

The additional collateral was released on March

17, 2022 along with the personal guarantee.

The additional collateral was released on March 17, 2022, along with the personal

The initial pledged collateral was released March 30, 2022, with the pay-off of the Rosenthal facility.

Bello is the current

Chairman, significant stockholder and former Interim Chief Executive Officer of Reed’s.

As consideration for the collateral support,

Bello received 400,000 shares of Reed’s restricted stock and a warrant to purchase up to 1,500,000 shares of common stock at

an exercise price of $0.46 per share.

Bello is the current Chairman, significant stockholder and former Interim Chief Executive Officer of Reed’s.

As consideration

for the collateral support, Mr.

Bello received 8,000 shares of Reed’s restricted stock and a warrant to purchase up to 30,000 shares

of common stock at an exercise price of $10.58 per share.

Martin, daughter of John Bello, director of the Company, was employed as Vice President of Marketing during the fiscal year ended December

Martin was paid approximately $185 for her services during the fiscal year ended December 31, 2022.

Zaltzman and Union Square Entities

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serve as director.

Zaltzman is the founder and managing member of Union Square Park Capital Management, LLC (“USPCM”), an SEC Registered

Investment Adviser firm and is also the managing member of Union Square Park GP (“USPGP”).

USPCM and USPGP serve as the investment

manager and general partner to Union Square Park Partners, LP (“USPP Fund”), respectively.

Foregoing entities hereinafter

collectively referred to as the “Union Square Entities”.

Fund participated in Reed’s recent private placement (the “private placement”) of common stock, $0.0001 par value

(“common stock”), and warrants, which closed on March 11, 2022, in the aggregate principal amount of $3,000,000.

10,714,286 shares of common stock and warrants to purchase 5,357,143 shares of common stock in the private placement.

Prior to the private

placement, Mr.

Zaltzman is the founder and managing member of Union Square Park Capital Management, LLC (“USPCM”), an SEC Registered Investment

Adviser firm and is also the managing member of Union Square Park GP (“USPGP”).

USPCM and USPGP serve as the investment manager

and general partner to Union Square Park Partners, LP (“USPP Fund”), respectively.

Foregoing entities hereinafter collectively

referred to as the “Union Square Entities”.

Fund participated in Reed’s recent private placement (the “private placement”) of common stock, $0.0001 par value (“common

stock”), and warrants, which closed on March 11, 2022, in the aggregate principal amount of $3,000,000.

It acquired 214,286 shares

of common stock and warrants to purchase 107,143 shares of common stock in the private placement.

Prior to the private placement, Mr.

Zaltzman and the Union Square Entities beneficially owned approximately 7.79% of Reed’s common stock.

private placement, Mr.

After the private placement,

Zaltzman and the Union Square Entities beneficially owned approximately 17.2% of Reed’s common stock.

common stock and shares of common stock underlying the warrants have the same registration rights granted to all investors in the private

The common stock and

shares of common stock underlying the warrants have the same registration rights granted to all investors in the private placement.

issued to USPP Fund are not exercisable until September 27, 2022, and carry a 19.99% beneficial ownership blocker.

In conjunction

with the private placement and USPP Fund’s role as lead investor, Reed’s and USPCM had an oral understanding pursuant to

which Reed’s agreed to support the nomination of USPCM’s nominee, Leon M.

Zaltzman, to the Reed’s board, upon

qualification and recommendation from Reed’s governance committee.

Except as set forth above, USPP Fund invested in the

private placement pursuant to the same terms and conditions of the other purchasers in the private placement.

Martin, daughter of a director of the Company, was employed as Vice President of Marketing during the years ended December 31, 2021 and

Martin was paid approximately $233 and $215, respectively, for her services during the years ended December 31, 2021 and 2020,

respectively.

In conjunction with

the private placement and USPP Fund’s role as lead investor, Reed’s and USPCM had an oral understanding pursuant to which

Reed’s agreed to support the nomination of USPCM’s nominee, Leon M.

Zaltzman, to the Reed’s board, upon qualification

and recommendation from Reed’s governance committee.

Except as set forth above, USPP Fund invested in the private placement pursuant

to the same terms and conditions of the other purchasers in the private placement.

of the date of this Annual Report, our board has seven directors and the following four standing committees:

an Audit Committee, a

Compensation Committee, a Governance Committee and an Operations Committee.

The board, upon recommendation from the Compensation

Committee, determined each of Lewis Jaffe, James C.

Bass, Rhonda Kallman and Louis Imbrogno is an “independent

director” as defined by Rule 5605(a)(2) of The NASDAQ Stock Market Rules (the “NASDAQ Rules”).

Independence of

board members is re-evaluated by the board annually.

We intend to maintain at least a majority of independent directors on our board

in the future.

an Audit Committee, a Compensation

Committee, a Governance Committee and an Operations Committee.

The board, upon recommendation from the Compensation Committee, determined

each of Lewis Jaffe, James C.

Bass, Thomas W.

Kosler and Louis Imbrogno, Jr.

is an “independent director” as defined by Rule

5605(a)(2) of The NASDAQ Stock Market Rules (the “NASDAQ Rules”).

Independence of board members is re-evaluated by the board

We intend to maintain at least a majority of independent directors on our board in the future.

Principal Accounting Fees and Services

47 unchanged sentences

thereunto duly authorized.

April 15, 2022

Delaware corporation

4 unchanged sentences

Executive Officer), Director

Financial Officer

Joann Tinnelly

Chief Financial Officer

Financial Officer)

1 unchanged sentence

Michael Zaltzman

Rhonda Kallman

Thomas Kosler

Louis Imbrogno, Jr.

Imbrogno, Jr.

of Incorporation of Reed’s, Inc., as amended

and Restated Bylaws of Reed’s, Inc.

of common stock certificate

of series A preferred stock certificate

of common stock purchase warrant issued to investors on June 2, 2016

of common stock purchase warrant issued to Maxim Group LLC on June 2, 2016

of common stock purchase warrant issued to PMC Financial Services Group, LLC on November 9, 2015

of 2017-1 common stock purchase warrant

of 2017-2 common stock purchase warrant

of 2017-3 common stock purchase warrant

of 2017-4 common stock purchase warrant

Form of common stock purchase Warrant issued to Raptor/ Harbor Reed’s SPV on December 11, 2020

Certificate of Incorporation of Reed’s, Inc., as amended

Amended and Restated Bylaws of Reed’s, Inc.

Form of common stock certificate

Form of series A preferred stock certificate

of Warrant issued to Raptor/ Harbor Reed’s SPV LLC on December 11, 2020

Form of Warrant (Union Square Park Partners, LP)

Form of Warrant 2022 PIPE

of registrant’s common stock

Satisfaction Settlement and Release Agreement by and between Reed’s, Inc.

and Raptor/ Harbor Reeds SPV, dated December 11, 2020

Registration Rights Agreement by and between Reed’s, Inc.

and Raptor/ Harbor Reeds SPV, dated December 11, 2020

Amendment dated March 11, 2021 to Financing Agreement dated October 4, 2018 by and between Reed’s, Inc, and Rosenthal & Rosenthal, Inc.

Rights Agreement by and between Reed’s, Inc., and purchasers signatory thereto dated May 26, 2016

of Registration Rights Agreement by and between Reed’s, Inc.

and Raptor/Harbor Reeds SPV LLC dated April 21, 2017

Form of Secured Convertible Promissory Note issued May 9, 2022

Description of registrant’s common stock

Rights Agreement by and between Reed’s, Inc.

and Raptor/ Harbor Reeds SPV LLC, dated December 11, 2020

Registration Rights Agreement by and between Reed’s, Inc., and purchasers signatory thereto dated May 26, 2016

2017 Incentive Compensation Plan

2020 Equity Incentive Plan

Amendment dated December 23, 2020 to Financing Agreement dated October 4, 2018 between Reed’s, Inc.

and Rosenthal & Rosenthal, Inc .

Security Agreement by and between Reed’s, Inc.

and Rosenthal & Rosenthal Inc.

dated October 4, 2018

Property Security Agreement by and between Reed’s, Inc.

and Rosenthal & Rosenthal Inc.

dated October 4, 2018

Interest (short form) by Reed’s, Inc.

in favor of Rosenthal & Rosenthal Inc.

dated October 4, 2018

Agreement by and between Rosenthal & Rosenthal Inc.

and Raptor/Harbor Reeds SPV LLC dated October 4, 2018

Agreement by and between Reed’s, Inc., Merritt 7 Venture L.L.C., and GE Capital US Holdings, Inc., dated September 1, 2018

Purchase Agreement by and between Reed’s, Inc.

Sublease Agreement by and between Reed’s, Inc., Merritt 7 Venture L.L.C., and GE Capital US Holdings, Inc., dated September 1, 2018

Asset Purchase Agreement by and between Reed’s, Inc.

and California Custom Beverage LLC dated December 31, 2018

and Assumption of Lease and Consent of Lessor by and between Reed’s, Inc.

Assignment and Assumption of Lease and Consent of Lessor by and between Reed’s, Inc.

and California Custom Beverage LLC dated December 31, 2018

of Indemnification Agreement by and between Reed’s, Inc.

Form of Indemnification Agreement by and between Reed’s, Inc.

and officers and directors

Employment Agreement by and between Reed’s, Inc.

Executive Employment Agreement by and between Reed’s, Inc.

and Thomas J.

Spisak dated December 2, 2019

of Non-Employee Director Nonstatutory Stock Option Agreement

of Executive Incentive Stock Option Agreement

and Restated Employment Agreement by and between Reed’s, Inc.

Form of Non-Employee Director Nonstatutory Stock Option Agreement

Form of Executive Incentive Stock Option Agreement

Amended and Restated Employment Agreement by and between Reed’s, Inc.

and Norman E.

dated June 24, 2020

of Reed’s, Inc.

Promissory Note, in the principal amount of $769,816 in favor of City National Bank, dated April 20, 2020.

Manufacturing

and Distribution Agreement by and between Reed’s, Inc.

and B C Marketing Concepts Inc., dba Full Sail Brewing Company dated

October 11, 2019

Development Agreement Reed’s, Inc.

and B C Marketing Concepts Inc., dba Full Sail Brewing Company dated October 11, 2019

Agreement by and between Reed’s, Inc.

and Rosenthal & Rosenthal Inc.

dated October 4, 2018

Form of Securities Purchase Agreement by and among Reed’s, Inc, and certain investors dated March 10, 2022

Form of Registration Rights Agreement by and among Reed’s, Inc, and certain investors dated March 10, 2022

Amendment dated December 23, 2020 to Financing Agreement dated October 4,

2018 between Reed’s, Inc.

and Rosenthal & Rosenthal, Inc.

Rosenthal & Rosenthal, Inc.

Partial Release of Pledge Agreement dated

March 17, 2022

Ledgered ABL Agreement by and between Reed’s, Inc.

and Alterna Capital

Solutions, LLC dated March 28, 2022

of Reed’s, Inc.

Affiliate Guarantor

and Alterna Capital Solutions, LLC dated March 28, 2022

Note Purchase Agreement by and between Reed’s, Inc., Wilmington Savings Fund Society, FSB and purchasers dated May 9, 2022

Registration Rights Agreement by and between Reed’s, Inc.

and purchasers dated May 9, 2022

Collateral Sharing Agreement by and among Alterna Capital Solutions LLC, Reed’s, Inc.

and Wilmington Savings Fund Society, FSB dated May 9,2022

Partial Option Exercise and Second Amendment to 10% Convertible Notes with Wilmington Savings Fund Society, FSB dated February 10, 2023

Limited Waiver and Deferral Agreement with Wilmington Savings Fund Society, FSB dated February 10, 2023

Limited Waiver and Amendment to 10% Secured Convertible Notes by and between Reed’s, Inc., Wilmington Savings Fund Society, FSB, and holders effective August 11, 2022

Limited Waiver and Amendment to 10% Secured Convertible Notes by and between Reed’s, Inc., Wilmington Savings Fund Society, FSB, and holders dated April 11, 2023

Code of Ethics

Subsidiaries of Reed’s, Inc.

Consent of Weinberg & Co., PA

11 unchanged sentences

XBRL Taxonomy Extension Label Linkbase Document

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Page Interactive Data File (embedded within the Inline XBRL document)

Indicates a management contract or compensatory plan or arrangement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures