REED'S, INC. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures (as defined in Rules 13a-15€ and 15d-15€ under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2023 to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Our management, with the participation of our Chief Executive Officer and Chief Financial Officer and the oversight of our audit committee, has evaluated the effectiveness of our internal control over financial reporting as of December 31, 2023. In assessing the effectiveness of our internal control over financial reporting, our management used the framework established in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2023. This Annual Report does not contain an attestation report of our independent registered public accounting firm related to internal control over financial reporting because the rules for smaller reporting companies provide an exemption from the attestation requirement. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting during the year ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Amendment to Limited Waiver, Deferral, and Amendment and Restatement Agreement dated February 12, 2024 On February 12, 2024, Reed’s entered into a Limited Waiver, Deferral, and Amendment and Restatement Agreement (the “Waiver and Amendment”) with each holder of the Notes payable to Whitebox (see Note 7). Subject to the Waiver and Amendment, the holders agreed to temporarily waive certain events of default under the Notes, including the failure to pay Excess ABL Amounts and the failure to pay amortization payments due December 1, 2023 to April 30, 2024, and to waive the maturity date of the Option Notes originally due through November 28, 2023, to April 30, 2024. In addition, as of the date of these financial statements, the Company and Whitebox have tentatively agreed to amend and restate the Notes in full to provide, among other things, the following: Original Notes ● The conversion price of the Original Notes will be amended to be between 125% and 145% of the effective price of the company’s subsequent equity offering, with the premium set based on the aggregate gross proceeds realized by the company in the offering and the conversion price subject to a cap of $7.50 per share. ● A portion of the outstanding ABL accrued fees will be satisfied through payment of $132 in cash and the issuance of shares of the company’s common stock (up to the beneficial ownership limitation applicable to each holder) at a value per share equal to the lesser of $1.50 or the per share price of securities issued in the company’s subsequent equity offering. The remaining balance of any outstanding accrued ABL fees will be added to the principal amount of the Notes. The $132 has not been paid nor any shares issued as of the date of these financial statements Option Notes ● The maturity date of the Option Notes will be amended to March 31, 2025. ● The conversion price of the Option Notes will be amended to 120% of the arithmetic average of the Daily VWAP for the five (5) VWAP Trading Days beginning on, and including, the VWAP Trading Day immediately following the consummation of an equity offering undertaken for purposes of satisfying the terms and conditions of the Waiver and Amendment. ● The Option Notes shall bear interest at a rate of 10% per annum, with 5% per annum payable in cash and 5% per annum payable “in kind” by adding such PIK interest to the unpaid principal amount. ● The company shall have the right at any time prior to the date that is the 180 th day from the effective date to prepay the amended and restated Option Notes, in whole or in part, at a price equal to 102% of the principal amount plus all accrued and unpaid interest thereon to the date of prepayment. SAFE Investment On March 7, 2023, John J. Bello funded $300,000 to Reed’s through a Simple Agreements for Future Equity (“SAFE”) investment. The SAFE investment convert into the next equity financing of Reed’s on the same terms and conditions as investors in Reed’s next equity financing, subject to certain limitations and conditions. The SAFE has not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and instead was offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act on the basis that there was no public offering. 10b5-1 Trading Arrangements During the 16 weeks ended December 30, 2023, none of our directors or executive officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 26 PART III Item 10. Directors, Executive Officers , and Corporate Governance. General Reed’s current directors have terms which will end at the next annual meeting of the stockholders and until each of their successors is elected 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: Name Position Age Norman E. Snyder, Jr. Chief Executive Officer, Director 62 Joann Tinnelly Chief Financial Officer, Secretary 55 Christopher Burleson Chief Commercial Officer 42 John J. Bello Chairman of the Board 78 Lewis Jaffe Director, Chairman of Governance Committee, Member of Audit and Compensation Committee 67 Thomas W. Kosler Director, Chairman of the Audit Committee 69 Louis Imbrogno, Jr. Director, Chairman of Compensation Committee and member of Audit Committee and Governance Committee 79 Shufeng Deng Vice Chairman of Board and Chairman of Asian Operations 59 Randle Lee Edwards Director 58 Business Experience of Directors and Executive Officers Norman E. Snyder, Jr. was appointed as Chief Executive Officer and director of Reed’s effective March 1, 2020. Prior to his promotion, Mr. Snyder served as Chief Operating Officer of Reed’s from September 2019 through February 29, 2020. Prior to joining Reed’s, Mr. Snyder served as President and Chief Executive Office for Avitae USA, LLC, an emerging premium new age beverage company that markets and sells a line of ready-to-drink caffeinated waters. Prior to Avitae, he served as the President and Chief Operating Officer for Adina For Life, Inc., President and Chief Executive Officer of High Falls Brewing Company, and Chief Financial Officer, and later Chief Operating Officer of South Beach Beverage Company, known as SoBe. In prior experience, Mr. Snyder served as Controller for National Football League Properties, Inc., and in various roles at PriceWaterhouseCoopers during an eight-year tenure. Mr. Snyder earned a B.S. in Accounting from the State University of New York at Albany. Joann Tinnelly was appointed Chief Financial Officer effective October 19, 2023. She previously served as Interim Chief Financial Officer of Reed’s, from March 31, 2023 through October 18, 2023 and from November 22, 2019, through December 1, 2019. She has 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. 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 company. 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. Ms. Tinnelly holds a Master of Business Administration in Finance and a Bachelor of Business Administration in Public Accounting both from Pace University. Christopher 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. Mr. Burleson also served as a director of Fever Tree USA. 27 John J. Bello is Reed’s Chairman and sales and marketing expert. Since 2001, Mr. Bello has been the Managing Director of JoNa Ventures, a family venture fund. From 2004 to 2012 Mr. Bello also served as Principal and General Partner at Sherbrooke Capital, a venture capital group dedicated to investing in leading, early-stage health and wellness companies. Mr. Bello is the founder and former CEO of South Beach Beverage Company, the maker of nutritionally enhanced teas and juices marketed under the brand name SoBe. The company was sold to PepsiCo in 2001 for $370 million and in the same year Ernst and Young named Mr. Bello National Entrepreneur of the Year in the consumer products category for his work with SoBe. Before founding SoBe, Mr. Bello spent fourteen years at National Football League Properties, the marketing arm of the NFL and served as its President from 1986 to 1993. As the President, Mr. Bello has been credited for building NFL Properties into a sports marketing leader and creating the model by which every major sports league now operates. Prior to working for the NFL, Mr. Bello served in marketing and strategic planning capacities at the Pepsi Cola Division of PepsiCo Inc. and in product management roles for General Foods Corporation on the Sanka and Maxwell House brands. As a board chair, Mr. Bello has also worked with IZZE in brand building, marketing and strategic planning capacities. That brand was also sold to PepsiCo. Mr. Bello earned his BA from Tufts University, cum laude, and received his MBA from the Tuck School of business at Dartmouth College as an Edward Tuck Scholar. Mr. Bello is extensively involved in non-profit work and currently serves as a Tufts University Trustee and advisory board member (athletics) and the Veteran Heritage Project in Scottsdale, Arizona. Mr. Bello also serves on the board of Rockford Fosgate, a seller of OEM audio equipment, and is executive director of Eye Therapies which has licensed its technology to Bausch and Lomb, who markets a redness reduction eye drop under the Lumify brand name. Lewis Jaffe has served as a director since October 19, 2016, is Chairman of the Governance Committee and a member of the Audit and Compensation Committees. Since August 2014, Mr. Jaffe is an Executive-in-Residence and Clinical Faculty at the Fred Kiesner Center for Entrepreneurship, Loyola Marymount University. He is also a technology futurist, Executive Coach and Public Speaker. Since January 2010, Mr. Jaffe has served on the board of FitLife Brands Inc. (FTLF:OTCBB) and serves on its audit, compensation and governance committees. Since 2006 he has served on the board of directors of York Telecom, a private company, and serves on its compensation and governance committees. From 2006 to 2008 Mr. Jaffe was Interim Chief Executive Officer and President of Oxford Media, Inc. Mr. Jaffe has also served in executive management positions with Verso Technologies, Inc., Wireone Technologies, Inc., Picturetel Corporation, and he was also previously a Managing Director of Arthur Andersen. Mr. Jaffe was the co-founder of MovieMe Network. Mr. Jaffe also served on the board of directors of Benihana, Inc. as its lead independent director from 2004 to 2012. Mr. Jaffe is a graduate of the Stanford Business School Executive Program, holds a Bachelor of Science from LaSalle University and holds a Master’s Professional Director Certification from the American College of Corporate Directors, a public company director education and credentialing program. Mr. Jaffe is a graduate of the Stanford Business School Executive Program, holds a Bachelor of Science from LaSalle University and holds a Master’s Professional Director Certification from the American College of Corporate Directors, a public company director education and credentialing program. Louis 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. Since Mr. Imbrogno’s retirement from PepsiCo, he has consulted for multiple companies including PepsiCo. Thomas W. 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. Mr. Kosler earned a B.B.A. with a major in Accounting from the University of Wisconsin - Milwaukee in 1976. Mr. Kosler 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. 28 Shufen Deng was appointed Vice Chairman of the Board and Chairman of Asian Operations on February 8, 2024. Prior, she had served as director since July 7, 2023. Mrs. Deng has been the sole shareholder and sole director of D&D Source of Life Holding Ltd. (“D&D”), the Company’s largest shareholder, since February 2023, D&D was the lead investor in Reed’s PIPE transaction which closed on March 25, 2023. As part of the PIPE transaction, the parties entered into a shareholders agreement dated May 25, 2023, pursuant to which Reed’s agreed to support D&D’s nomination of up to two board designees, one of which shall be an independent director. Shufen Deng is D&D’s non-independent designee. From April 2017 through March 2021, she served as Chairman and General Manager of Baolingbao Biology Co., Ltd. (China), and she continues to serve as a member of its board of directors and its compensation committee member. Prior, she served for seven years as a judge in China. Randle Lee Edwards was appointed to the board on December 12, 2023. He is a corporate attorney with over 25 years of experience practicing in New York and China. He has advised Chinese, U.S., and European companies on a broad range of public and private M&A transactions, including public mergers, stock and asset acquisitions and dispositions, venture capital and private equity deals, as well as the establishment or dissolution of joint ventures. He has served as a member of the supervisory board of Whirlpool (China) Co. Ltd. (Shanghai, China) since March 2023. Previously, he served as Of Counsel to Sherman & Sterling LLP (Beijing, China), from January 2020 to March 2021. Mr. Edwards was a partner at Sherman & Sterling, LLP from January 2001 to December 2019. Mr. Edwards is proficient in Mandarin and is a member of the State Bar of New York. Mr. Edwards holds a J.D. from Columbia University School of Law and a B.A from Columbia College. Mr. Edwards is D&D’s independent designee. Legal Proceedings In 2014, Louis Imbrogno Jr. served as Chief Executive Officer of Constar International, Inc. for a six-month period during a bankruptcy proceeding and subsequent sale in a court administered public auction. He was not an executive officer of the Company prior to the initiation of the bankruptcy proceedings. Except as described above, to the best of our knowledge, none of our executive officers or directors are parties to any material proceedings adverse to Reed’s, have any material interest adverse to Reed’s or have, during the past ten years been subject to legal or regulatory proceedings required to be disclosed hereunder. Family Relationships There are no family relationships between any of our executive officers and directors. Corporate Governance Audit Committee of the Board The Audit Committee was formed in January 2007. The board has determined that each member of our Audit Committee is an “independent director” as defined by Rule 5605(a)(2) of The NASDAQ Stock Market Rules and that members of the Audit Committee are independent under the additional requirements of Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 (the “Exchange Act”). The 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. 29 Code of Ethics Our 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 www.drinkreeds.com at http://investor.reedsinc.com . We will satisfy the disclosure requirement of Item 5.05 of Form 8-K (which requires disclosure on Form 8-K or the Company website of certain waivers or amendments of the Company’s code of ethics) by posting information at this location on the Company website. We undertake to provide a copy of our Code of Ethics to anyone without charge. To request a copy, please contact our investor relations via telephone, email or mail, as follows: Investor Relations at Reed’s Inc. 201 Merritt 7 Corporate Park Norwalk, Connecticut 06851 ir@reedsinc.com (800) 997-3337 Ext. 2 or (617) 956-6736 Compliance with Section 16(a) of the Exchange Act Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our directors and executive officers and beneficial holders of more than 10% of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of our equity securities. To 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, 2023, the following individuals each filed one late Form 4 representing one transaction (unless otherwise noted): John J. Bello, Joann Tinnelly, Christopher Burleson and Randle Lee Edwards each filed one late Form 3. None of our officers or directors filed Form 5. Stockholder Director Nomination Procedures There have not been any material changes to the procedures by which stockholders may recommend nominees to our board of directors. Item 11. Executive Compensation The following table summarizes all compensation for fiscal years 2023 and 2022 earned by our “Named Executive Officers” during the reported periods: Name and Principal Position Year Salary Bonus Stock Awards (1) All Other Compensation (2) Total Norman E. Snyder, Jr. 2023 $ 310,083 $ - $ - $ 14,172 $ 324,255 Chief Executive Officer 2022 $ 360,500 $ - $ - $ 15,721 $ 376,221 Thomas J. Spisak(3) 2023 $ 60,396 $ - 2,633 $ 10,637 $ 73,666 Former Chief Financial Officer 2022 $ 250,075 $ - - $ 10,422 $ 260,497 Neal Cohane(4) 2023 $ - $ 158,422 $ 158,422 Former Chief Sales Officer 2022 $ 250,000 $ - $ 17,339 $ 267,339 Joann Tinnelly(5) 2023 $ 179,375 $ - $ 6,765 $ 186,140 Chief Financial Officer 2022 $ 200,875 $ - $ 8,247 $ 209,122 Christopher Burleson 2023 $ 275,000 $ - 36,864 $ 11,711 $ 323,575 Chief Commercial Officer 2022 $ $ $ $ (1) The amounts represent the fair value for share-based payment awards issued during the year. The award is calculated on the date of grant in accordance with Financial Accounting Standards. (2) Other compensation includes both cash payments and the estimated value of the use of Company assets. (3) Thomas J. Spisak resigned effective March 30, 2023. (4) Neal Cohane resigned effective July 1, 2023. (5) Joann Tinnelly was appointed Interim Chief Financial Officer on March 31, 2023 and subsequently appointed permanent Chief Financial Officer on October 19, 2023. 30 Employment Arrangements Mr. Snyder’s employment agreement expired on March 1, 2024. Under the agreement, Mr. Snyder was eligible to receive a performance-based cash bonus at a target amount of 50% of his base salary in effect. He was also eligible to participate in Reed’s other benefit plans available to its executive officers. The agreement provided for acceleration of equity grants triggered by a “change of control”, as defined in the agreement, and contained customary, non-competition, confidentiality, invention assignment and non-solicitation covenants. Mr. Snyder was also entitled to six months’ severance benefits in the event of termination without cause by Reed’s or for good reason by Mr. Snyder, subject to execution of a release. The Company and Mr. Snyder are in the process of reinstating his employment agreement. Mr. Spisak’s at will employment agreement provided for a performance-based cash bonus at a target amount of 30% of his base salary. Mr. 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. Thomas J. Spisak resigned from his position as Chief Financial Officer effective March 30, 2023. Joann Tinnelly receives a salary of $305,000 and is eligible for an annual performance bonus based on a target of 35% of her annual salary (to be determined by the Company in its sole discretion). Christopher Burleson receives a salary of $315,000 and is eligible for an annual performance bonus based on a target of 35% of his annual salary (to be determined by the Company in its sole discretion). Termination of Employment/Retirement None of our Named Executive Officers have any arrangement that provides for retirement benefits, or benefits that will be paid primarily following retirement. None of our Named Executive Officers has a contract, agreement, plan or arrangement that is currently in effect, whether written or unwritten, that provides for payment to him or her following, or in connection with resignation, retirement or other termination, or a change in control of the Company or a change in the Named Executive Officer’s responsibilities following a change in control. The Compensation Committee of the board retains discretion to determine the treatment of outstanding stock option awards in connection with a change in control of the Company, subject to the terms of contractual agreements. Recovery of Erroneously Awarded Compensation Not applicable. Outstanding Equity Awards at Year-End The following table sets forth information regarding unexercised options and equity incentive plan awards for each Named Executive Officer outstanding as of December 31, 2023: Name and Position Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options Option Exercise Price Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) Norman E. Snyder, Jr. (Chief Executive Officer) 7,685 - 2,230 $ 44.00 2/25/2030 500 - - $ 25.00 3/25/2030 4,322 - 625 $ 35.00 5/20/2030 11,890 2,216 2,015 $ 47.50 9/16/2030 Joann Tinnelly (Chief Financial Officer) 2500 1,501 - $ 124.50 2/4/2029 - - 960 $ 25.00 3/25/2030 5328 992 903 $ 47.50 9/16/2030 Christopher J. Burleson (Chief Commercial Officer) 0 0 0 $ 0 31 Director Compensation The following table summarizes the compensation paid to our non-employee directors for the year ended December 31, 2023: Name Fees Earned or Paid in Cash Stock Awards (1) Option Awards Non-Equity Incentive Plan Compensation All Other Compensation Total John J. Bello $ 50,000 - - - $ 50,000 Lewis Jaffe $ 50,000 - - - $ 50,000 James C. Bass(1) $ 50,000 - - - $ 50,000 Louis Imbrogno, Jr. $ 50,000 - - - $ 50,000 Thomas W. Kosler $ 50,000 - - - $ 50,000 Shufeng Deng (2) $ - $ - - - - $ - Randle Lee Edwards (3) $ - $ - - - - $ - Leon M. Zaltzman (4) $ - $ - - - - $ - (1) James C. Bass served as a director until the Annual Stockholders’ Meeting on December 12, 2023, at which he did not stand for re-election. (2) Shufeng Deng was appointed to the board effective July 7, 2023. On February 8, 2024, she was appointed as Vice Chairman of the Board and Chairman of Asian Operations. She elected to waive non-employee director compensation due to her position as the principal and director designee of D&D Source of Life Holding, LTD. (3) Randle Lee Edwards was appointed to the board effective December 12, 2023. (4) Leon M. Zaltzman was appointed to the board effective March 22, 2022. Mr. Zaltzman elected to waive non-employee director compensation due to his position with the Union Square Entities. He resigned his position on July 7, 2023 but continues as a board observer Item 12. Security Ownership of Certain Beneficial Owners, Management and Related Stockholder Matters The following table sets forth certain information regarding our shares of common stock beneficially owned as of March 19, 2024 for (i) each Named Executive Officer and director, and (ii) all Named Executive officers and directors as a group (iii) each stockholder known to be the beneficial owner of 5% or more of our outstanding shares of common stock n . A person is considered to beneficially own any shares (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants or otherwise. Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children. 32 For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right to acquire within 60 days of March 19, 2024. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of March 19, 2024 is deemed to be outstanding but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership. Except as otherwise indicated below, the persons named in the table have sole voting and investment power with respect to all shares of common stock held by them. Unless otherwise indicated, the principal address of each listed executive officer and director is 201 Merritt 7 Corporate Park, Norwalk, Connecticut 06851. Named Beneficial Owner Directors and Named Executive Officers Number of Shares Beneficially Owned Percentage of Shares Beneficially Owned Prior to Conversion of SAFEs(1) Percentage of Shares Beneficially Owned After Conversion of SAFEs (2) John J. Bello (3) 681,275 15.2 % 9.7 % Norman E. Snyder, Jr. (4) 59,624 1.4 % 0.9 % Joann Tinnelly (5) 18,230 0.4 % 0.3 % Chris Burleson 24,160 0.6 % 0.3 % Shufeng Deng (9) 3,160,452 49.2 % 44.2 % Thomas W Kosler (6) 13,918 0.3 % 0.2 % Louis Imbrogno (7) 9,617 0.2 % 0.1 % Lewis Jaffe (8) 7,395 0.2 % 0.1 % Directors and Named Executive Officers as a group (8 persons) 3,974,671 58.6 % 54.4 % 5% or greater stockholders D&D Source of Life Holding LTD (9) 3,160,452 49.2 % 44.2 % Union Square Entities (10) 1,230,699 25.3 % 17.4 % Whitebox Entities (11) 429,775 9.9 % 9.9 % * Less than 1% (1) Beneficial ownership is calculated pursuant to Section 13d-3 of the Securities Exchange Act of 1934, as amended, and includes shares underlying derivative securities that are currently exercisable or convertible or may be exercised or converted within 60 days. 4,187,291 shares were outstanding as of March 19, 2024. In accordance with Section 13d-3, the shares underlying derivative securities are added to the denominator only for the holder of the derivative securities. (2) SAFE investments convert at lesser of price of next equity financing of $1.50. Aggregate SAFE investments to date will convert into approximately 2,731,206 shares calculated based on $1.50 per share conversion price on closing of next equity financing, expected within 60 days. In this column, the aggregate amount of shares underlying all outstanding SAFEs has been added to the number of shares outstanding to illustrate beneficial ownership post-conversion of the SAFE. (3) Includes shares underlying 97,240 warrants, 20 shares underlying stock options, and 200,000 shares underlying a SAFE. (4) Includes 37,605 shares underlying options and 2,856 shares underlying warrants. (5) Includes 14,863 shares underlying options. (6) Includes 3,572 shares underlying warrants. (7) Includes 1,600 shares underlying options and 2,671 shares underlying warrants. (8) Includes 1,000 shares underlying options. (9) Mrs. Deng has voting and dispositive control over shares held by D&D Source of Life Holdings. Ltd. Includes 145,828 underlying warrants and 2,000,000 shares underlying SAFE. Principal address is 26 Harbour Road, Wanchai, Rooms 3006-07, China Resources Building. (10) Includes 145,828 Shares issuable upon exercise of warrants and estimated 531,205 underlying SAFE investment. “Union Square Entities” are Union Square Park Partners, LP (the “ USPP Fund ”), Union Square Park Capital Management, LLC (“ USPCM ”), Union Square Park GP, LLC (“ USPGP ”) and Leon M. Zaltzman, an individual. USPCM serves as the investment manager to the USPP Fund and as such may be deemed to have voting and investment power over the securities held by the USPP Fund. USPGP serves as the general partner of the USPP Fund and as such may be deemed to have voting and investment power over the securities held by the USPP Fund. Mr. Zaltzman is the managing member of each of USPCM and USPGP and has voting and dispositive control over shares held by the Union Square Entities. (11) Includes approximately 172,032 shares of common stock that WA and WGP have the right to acquire upon conversion of Notes, subject to the Blocker (defined below), which amount has been added to the shares of common stock outstanding in accordance with Rule 13d-3(d)(1)(i) under the Act for calculation of percentage. Whitebox Entities are: 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”). Each of WA and WGP is deemed to be the beneficial owner of approximately 429,775 shares of Common Stock, as a result of WA’s clients’ ownership of (i) 257,743 shares of Common Stock and (ii) $15,098,532.77 of the Issuer’s Secured Convertible Promissory Notes (“Notes”), which are convertible into shares of Common Stock based on the initial conversion rate of approximately 0.08306 shares of Common Stock per one dollar ($1) principal amount of Notes, but subject to the Blocker (as defined herein). The Notes are subject to a blocker which prevents the holder from converting the Notes to the extent that, upon such conversion, the holder would beneficially own in excess of 9.9% of the shares of Common Stock outstanding as a result of the conversion (the “Blocker”). WMP may be deemed to be the beneficial owner of approximately 248,312 shares of Common Stock, as a result of its ownership of 148,916 shares of Common Stock and $8,723,597.02 of the Notes and subject to the Blocker 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. 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 Islands. 33 Securities Authorized for Issuance under Equity Compensation Plans As of December 31, 2023, our Amended and Restated 2020 Plan was in effect. Our Second Amended and Restated 2017 Incentive Compensation Plan was discontinued, although outstanding awards granted per its terms remain in effect. The following table provides information, as of December 31, 2023, with respect to equity securities authorized for issuance under our equity compensation plans: Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in Plan Category (a) (b) Column (a) Equity compensation plans approved by security holders 145,012 $ 45.09 189,213 Equity compensation plans not approved by security holders 0 $ - 0 TOTAL 145,012 $ 45.09 189,213 Item 13. Certain Relationships and Related Transactions, and Director Independence Certain Relationships and Related Transactions Our board of directors has adopted written policies and procedures for the review of any transaction, arrangement or relationship between Reed’s and one of our executive officers, directors, director nominees or 5% or greater stockholders (or their immediate family members), each of whom we refer to as a “related person,” in which such related person has a direct or indirect material interest. 34 If a related person proposes to enter into such a transaction, arrangement or relationship, defined as a “related party transaction,” the related party must report the proposed related party transaction to our Chief Financial Officer. The policy calls for the proposed related party transaction to be reviewed and, if deemed appropriate, approved by the Governance Committee. Our Governance Committee is comprised of Lewis Jaffe and Louis Imbrogno, Jr. Mr. 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 following includes a summary of transactions since the beginning of fiscal 2023 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 that we paid or received, as applicable, in connection with the transactions described below were comparable to or better than terms available or the amounts that would be paid or received, as applicable, in arm’s-length transactions. John J. Bello John J. Bello is the Chairman of the board of directors and significant stockholder of Reed’s, beneficially owning approximately 13% of Reed’s outstanding common stock .In March 2023 he funded $300,000 to Reed’s through a Simple Agreements for Future Equity (“SAFE”) investment. The SAFE investment convert into the next equity financing of Reed’s on the same terms and conditions as investors in Reed’s next equity financing, subject to certain limitations and conditions. Leon M. Zaltzman and the Union Square Entities Leon M. Zaltzman served as a director on Reed’s board of directors from March 21, 2022 through July 7, 2023. Since his resignation, he is a board observer as a representative of 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 Entities”. The Union Square Entities are a significant stockholder of Reed’s and beneficially own approximately 18% of Reed’s issued and outstanding common stock. On February 8, 2024, Union Square Park Partners LP funded $798,808 to Reed’s through the SAFE investment. D&D Source of Life Holding LTD D&D Source of Life Holding LTD (“D&D”) is a significant stockholder of Reed’s and beneficially owns approximately 47% of Reed’s outstanding common stock. As part of D&D ‘s initial investment in Reed’s, D&D was given a preemptive right to purchase its pro-rata share, based on the ratio of its ownership of shares of common stock in the Company to all of the outstanding shares of common stock in the Company, of any investment in the equity securities or equity-linked securities of the Company. Further, the board of directors agreed to support D&D’s nomination of two board designees, one of which must be independent director. Shufen Deng, the sole owner of D&D, is D&D’s director designee and Randle Lee Edwards is D&D’s independent designee. On February 8, 2024, D&D funded $3,000,000 in the SAFE investment. As part of its SAFE investment, D&D was given the right to designate a second independent director nominee to the board of directors of Reed’s, and Reed’s agreed to limit the size of its board of directors to a maximum of nine (9) for so long as D&D owns 25% or more of the equity securities of Reed’s. Further, the parties agreed that Mrs. Deng would be appointed Vice Chairman of the Board and Chairman of Asian Operations. He appointment was effective February 8, 2024. 35 Director Independence As of the date of this Annual Report, our board has seven directors and the following three standing committees: an Audit Committee, a Compensation Committee and a Governance Committee. The board, upon recommendation from the Compensation Committee, determined each of Lewis Jaffe, Thomas W. Kosler, Louis Imbrogno, Jr. and Randle Lee Edwards 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. Item 14. Principal Accounting Fees and Services Weinberg & Company, P.A. (“Weinberg”) was our independent registered public accounting firm for the years ended December 31, 2023, and 2022. The following table shows the fees paid or accrued by us for the audit and other services provided by Weinberg for the years ended December 31, 2023, and 2022: 2023 2022 Audit Fees $ 215,314 $ 205,304 Audit-Related Fees - Tax Fees 47,841 38,674 All Other Fees 8,645 8,820 Total $ 271,800 $ 252,798 As defined by the SEC, (i) “audit fees” are fees for professional services rendered by our principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-K, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years; (ii) “audit-related fees” are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “audit fees;” (iii) “tax fees” are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) “all other fees” are fees for products and services provided by our principal accountant, other than the services reported under “audit fees,” “audit-related fees,” and “tax fees.” 36 Audit Fees Weinberg provided services for the audits of our financial statements included in Annual Reports on Form 10-K and limited reviews of the financial statements included in Quarterly Reports on Form 10-Q. Audit Related Fees Weinberg did not provide any professional services which would be considered “audit related fees.” Tax Fees Weinberg prepared our 2023 and 2022 Federal and state income tax returns. All Other Fees Services provided by Weinberg with respect to the filing of various registration statements made throughout the year are considered “all other fees.” Audit Committee Pre-Approval Policies and Procedures Under the SEC’s rules, the Audit Committee is required to pre-approve the audit and non-audit services performed by the independent registered public accounting firm in order to ensure that they do not impair the auditors’ independence. The SEC’s rules specify the types of non-audit services that an independent auditor may not provide to its audit client and establish the Audit Committee’s responsibility for administration of the engagement of the independent registered public accounting firm. Consistent with the SEC’s rules, the Audit Committee Charter requires that the Audit Committee review and pre-approve all audit services and permitted non-audit services provided by the independent registered public accounting firm to us or any of our subsidiaries. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee and if it does, the decisions of that member must be presented to the full Audit Committee at its next scheduled meeting. Accordingly, 100% of audit services and non-audit services described in this Item 14 were pre-approved by the Audit Committee. There were no hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees. PART IV Item 15. Exhibits and Financial Statements (a) 1. Financial Statements See Index to Financial Statements in Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference. 2. Financial Statement Schedules All other financial statement schedules have been omitted because they are either not applicable or the required information is shown in the financial statements or notes thereto. 3. Exhibits See the Exhibit Index, which follows the signature page of this Annual Report on Form 10-K, which is incorporated herein by reference. (b) Exhibits See Item 15(a) (3) above. (c) Financial Statement Schedules See Item 15(a) (2) above. Item 16. Form 10K Summary Not applicable. 37 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: April 1, 2024 REED’S, INC. a Delaware corporation By: /s/ Norman E. Snyder, Jr. Norman E. Snyder, Jr. Chief Executive Officer In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.(new board members to de added) Signature Title Date /s/ Norman E. Snyder, Jr. Chief Executive Officer, April 1, 2024 Norman E. Snyder, Jr. (Principal Executive Officer), Director /s/ Joann Tinnelly Chief Financial Officer April 1, 2024 Joann Tinnelly (Principal Financial Officer) /s/ John J. Bello Chairman of the Board April 1, 2024 John J. Bello /s/ Lewis Jaffe Director April 1, 2024 Lewis Jaffe /s/ Thomas W. Kosler Director April 1, 2024 Thomas W. Kosler /s/ Louis Imbrogno, Jr. Director April 1, 2024 Louis Imbrogno, Jr. /s/ Shufen Deng. Vice Chairman of the Board and Chairman of Asian Operations April 1, 2024 Shufen Deng. /s/ Randle Lee Edwards Director April 1, 2024 Randle Lee Edwards 38 INDEX TO EXHIBITS ITEM 15(a)(3) The following is a list of the exhibits filed as part of this Form 10-K. The documents incorporated by reference can be viewed on the SEC’s website at http://www.sec.gov. Exhibit 3(i) Certificate of Incorporation of Reeds, Inc. which is incorporated herein by reference to exhibit 3(iv) to Form 10-K filed with SEC on May 15, 2023. 3(ii) Amended and Restated Bylaws of Reed’s, Inc. which is incorporated by reference to Exhibit 3.8 to Form 10-K/A filed with the SEC on April 8, 2020. 3(vi) Description of Securities. 4.1 Form of Warrant issued to Raptor/ Harbor Reed’s SPV LLC on December 11, 2020 which is incorporated by reference to Exhibit 4.1 to Form 10-K filed with the SEC on March 30, 2021. 4.2 Form of Warrant issued to Union Square Park Partners, LP which is incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on March 21, 2022. 4.3 Form of Warrant 2022 PIPE which is incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on March 14, 2022. 4.4 Form of Secured Convertible Promissory Note issued May 9, 2022 which is incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on May 10, 2022. 4.5 Form of Warrant issued May 25, 2023 which is incorporated by reference to Exhibit 4.1 to Form 8-K filed with the SEC on May 31, 2023. 4.6 Form of Option Note in favor of Wilmington Savings Fund Society, FSB which is incorporated by reference to Exhibit 4.2 to Form 8-K filed with the SEC on May 31, 2023. 4.7 Simple Agreement for Future Equity by and between Reed’s, Inc. and D&D Source of Life Holding Ltd. dated February 8, 2024. 4.8 Simple Agreement for Future Equity by and between Reed’s, Inc. and John J. Bello dated March 7, 2024. 4.9 Simple Agreement for Future Equity by and between Reed’s, Inc. and Union Square Park Partners LP dated February 8, 2024. 10.1* Form of Reed’s, Inc. Indemnification Agreement. 10.2* Reeds, Inc. 2020 Equity Incentive Plan, as amended December 30, 2021. 10.3* Reed’s Inc. 2024 Inducement Plan. 10.4 Registration Rights Agreement by and between Reed’s, Inc. and Raptor/ Harbor Reeds SPV LLC, dated December 11, 2020 which is incorporated by reference to Exhibit 10.2 to Form 10-K filed with the SEC on March 30, 2021. 10.5 Sublease Agreement by and between Reed’s, Inc., Merritt 7 Venture L.L.C., and GE Capital US Holdings, Inc., dated September 1, 2018 which is incorporated by reference to Exhibit 10.7 to Form 10-Q filed with the SEC on November 14, 2018. 10.6 Form of Securities Purchase Agreement by and among Reed’s, Inc, and certain investors dated March 10, 2022 which is incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on March 14, 2022. 10.7 Form of Registration Rights Agreement by and among Reed’s, Inc, and certain investors dated March 10, 2022 which is incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on March 14, 2022. 10.8 Ledgered ABL Agreement by and between Reed’s, Inc. and Alterna Capital Solutions, LLC dated March 28, 2022 which is incorporated by reference to Exhibit 10.31 to Form 10-K filed with the SEC on March 15, 2022. 10.9 Note Purchase Agreement by and between Reed’s, Inc., Wilmington Savings Fund Society, FSB and purchasers dated May 9, 2022 which is incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on May 10, 2022. 10.10 Registration Rights Agreement by and between Reed’s, Inc. and purchasers dated May 9, 2022 which is incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on May 10, 2022. 10.11 Collateral Sharing Agreement by and among Alterna Capital Solutions LLC, Reed’s, Inc. and Wilmington Savings Fund Society, FSB dated May 9,2022 which is incorporated by reference to Exhibit 10.3 to Form 8-K filed with the SEC on May 10, 2022. 10.12 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 which is incorporated by reference to Exhibit 10.3 to Form 10-Q filed with the SEC on November 14, 2022. 39 10.13 Partial Option Exercise and Second Amendment to 10% Convertible Notes with Wilmington Savings Fund Society, FSB dated February 10, 2023 which is incorporated by reference to Exhibit 10.19 to Form 10-K filed with the SEC on May 15, 2023. 10.14 Limited Waiver and Deferral Agreement with Wilmington Savings Fund Society, FSB dated February 12, 2023 which is incorporated by reference to Exhibit 10.20 to Form 10-K filed with the SEC on May 15, 2023. 10.15+ Partial Option Exercise and Third Amendment Agreement to 10% Secured Convertible Notes by and between Reed’s, Inc. and Wilmington Savings Fund Society, FSB dated May 30, 2023 which is incorporated by reference to Exhibit 10.19 to Form 10-K filed with the SEC on May 15, 2023. 10.16 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 which is incorporated by reference to Exhibit 10.22 to Form 10-K filed with the SEC on May 15, 2023. 10.17 Securities Purchase Agreement dated May 25, 2023 by and between Reed’s, Inc. and D&D Source of Life Holding Ltd. and certain other investors which is incorporated by reference to Exhibit 10.1.to Form 8-K filed with the SEC on May 31 2023. 10.18 Shareholders Agreement dated May 25, 2023 by and between Reed’s, Inc. and D&D Source of Life Holding Ltd which is incorporated by reference to Exhibit 10.2 to Form 8-K filed with the SEC on May 31, 2023. 10.19 Registration Rights Agreement dated May 25, 2023 by and between Reed’s, Inc., and D&D Source of Life Holdings Ltd and certain other investors which is incorporated by reference to Exhibit 10.3 to Form 8-K filed with the SEC on May 31, 2023. 10.20 Amended Registration Rights Agreement by Reed’s, Inc. and the holders of 10% secured convertible notes dated May 30, 2023 which is incorporated by reference to Exhibit 10.4 to Form 8-K filed with the SEC on May 31, 2023. 10.21+ Partial Option Exercise and Third Amendment Agreement to 10% Secured Convertible Notes by and between Reed’s, Inc. and Wilmington Savings Fund Society, FSB dated May 30, 2023 which is incorporated by reference to Exhibit 10.5 to Form 8-K filed with the SEC on May 31, 2023. 10.22 Limited Waiver and Deferral Agreement by and between Reed’s, Inc. and Wilmington Savings Fund Society, FSB dated May 30, 2023 which is incorporated by reference to Exhibit 10.6 to Form 8-K filed with the SEC on May 31, 2023. 10.23+ Fifth Amendment to the 10% Secured Convertible Notes by and between Reed’s, Inc. and Wilmington Savings Fund Society, FSB dated May 30, 2023 dated October 5, 2023. 10.24 Limited Waiver, Deferral, and Amendment and Restatement Agreement by and between Reed’s, Inc. and each holder and Wilmington Savings Fund Society, FSB, holder representative and collateral agent dated February 12, 2024 which is incorporated by reference to Exhibit 10.3 to Form 8-K filed with the SEC February 13, 2024. 14 Code of Ethics 21 Subsidiaries of Reed’s, Inc. (none) 23 Consent of Weinberg & Co., PA. 24 Power of Attorney. (included on signature page) 31 Certification of our Chief Executive Officer and our Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification of our Chief Executive Officer and our Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97 Reed’s, Inc. Clawback Policy for Covered Executives. 101 The following materials from Reed’s, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Changes in Stockholders Equity, (iv) the Statements of Cash Flows, and (v) Notes to Financial Statements. 104 The cover page from the Reed’s, Inc. Annual Report on Form 10-K for the fiscal year ended December 31, 2023, formatted in Inline XBRL and contained in Exhibit 101. +Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulations S-K. The Company will furnish supplementally an unredacted copy of such exhibit to the Securities and Exchange Commission or its staff upon request. * Management contracts and compensatory plans or arrangements required to be filed as exhibits pursuant to Item 15(a)(3) of this report. 40