What changed in this filing

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Item 1. Business

2025-03-28 compared with 2024-04-01 · 257 added, 212 removed, 319 unchanged (60% of the section changed)

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this report) owns a leading portfolio of handcrafted, natural beverages that is sold in over 32,000 outlets nationwide.

These outlets

include the natural and specialty food channel, grocery stores, mass merchants, drug stores, convenience stores, club stores, liquor

stores, and on-premises locations including bars and restaurants.

Reed’s two core brands are Reed’s, which includes Reed’s

Craft Ginger Beer, Reed’s Real Ginger Ale, Reed’s Classic Mules, and Reed’s Hard Ginger Ale, and Virgil’s Handcrafted

Reed’s Craft Ginger Beers are unique due to the proprietary process of using fresh ginger root combined with a Jamaican

inspired recipe of natural spices, honey and fruit juices.

Reed’s uses this same handcrafted approach in its Reed’s Real

Ginger Ale and Virgil’s line of great tasting, bold flavored craft sodas, including its award-winning Virgil’s Root Beer.

These outlets include the natural and specialty food

channel, grocery stores, mass merchants, drug stores, convenience stores, club stores, liquor stores, and on-premises locations including

bars and restaurants.

Reed’s two core brands are Reed’s, which includes Reed’s Craft Ginger Beer, Reed’s Real

Ginger Ale, Reed’s Classic Mules, and Reed’s Hard Ginger Ale, and Virgil’s Handcrafted sodas.

Reed’s Craft Ginger

Beers are unique due to the proprietary process of using fresh ginger root combined with a Jamaican inspired recipe of natural spices,

honey and pineapple flavors, and fruit juices.

Reed’s uses this same handcrafted approach in its Reed’s Real Ginger Ale and

Virgil’s line of great tasting, bold flavored craft sodas, including its award-winning Virgil’s Root Beer.

is the first ginger beer in the US;

Virgil’s is an independent natural full line craft soda and is a leader in the craft soda category.

Original Ginger Brew, created in 1987, was introduced to the market in Southern California stores in 1989.

By 1990, we began marketing

our products through United Natural Foods Inc.

(“UNFI”) and other natural food distributors and moved our production to a

larger facility in Boulder, Colorado.

1991, we incorporated our business operations in the state of Florida under the name of Original Beverage Corporation and moved all production

to a co-pack facility in Pennsylvania.

Throughout the 1990’s, we continued to develop and launch new Ginger Brew varieties.

Ginger Brews reached broad placement in natural and gourmet foods stores nationwide through UNFI and other major specialty, natural/gourmet

and mainstream food and beverage distributors.

1997, we began licensing the products of China Cola and eventually acquired the rights to that product in 2000.

In 1999, we purchased

the Virgil’s Root Beer brand from the Crowley Beverage Company.

In 2000, we moved into an 18,000-square foot warehouse property,

the Brewery, in Los Angeles, California, as our headquarters.

In 2001, pursuant to a reincorporation merger, we changed our state of

incorporation to Delaware and also changed our name to “Reed’s, Inc.”

September 2018, we completed the relocation of its headquarters to Norwalk, Connecticut.

In December 2018, after a lengthy marketing

and bidding process, we sold the Brewery to a company owned by Christopher J.

Reed, our founder.

The sale of the Brewery marked a fundamental

shift in the nature of our operations and effectively eliminated our costs associated with excess manufacturing capacity.

Reed’s has 45 products that are sold throughout the United States, Canada, the United Kingdom, South Africa and the European Union.

has 50 products that are sold throughout the United States, Canada, the United Kingdom, South Africa the Caribbean and the European Union.

It produces its products through a network of nine independent manufacturers and distribution through five independent distribution centers.

Our Move to the OTCQX “Best Market”

Our stock traded on the Nasdaq Capital Market from 2007 to 2013 and again

form May 2019 through February 16, 2023.

We voluntarily transferred to and from the NYSE American between 2013 and May 2019.

On August 16, 2021, we received a written notice from The Nasdaq Stock Market LLC (“Nasdaq”) that we

were no longer in compliance with the bid price rule.

On January 25, 2023, we effectuated a 1-for-50 reverse stock split of our

issued and outstanding shares of common stock.

On January 27, 2023, we achieved compliance with the bid price rule.

However, we fell out

of compliance with Nasdaq’s minimum stockholders’ equity rule, and, after evaluating options to achieve compliance, our board

of directors determined not to proceed with a dilutive capital raise.

On February 14, 2023, we were delisted from the Nasdaq Capital Market.

On February 16, 2023, our common stock began quotation on the OTCQX “Best Market”.

We are a reporting company currently registered

under section 12(g) of the Securities Exchange Act of 1934, as amended.

common stock has been quoted on the OTCQX “Best Market” since February 16, 2023.

We are a “smaller reporting company”,

meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0

million during the most recently completed fiscal year.

Our common stock is currently registered under section 12(g) of the Securities

Exchange Act of 1934, as amended.

Restructuring and Change of Control

2024, the Company experienced a change of control resulting from a series of investments by D&D Source of Life Holding Ltd., a Cayman

Islands entity (“D&D”).

D&D is currently the majority stockholder of Reed’s.

D&D is currently 100% owned

and controlled by Era Regenerative Medicine Ltd., a BVI company.

October 10, 2024, D&D purchased eight secured promissory notes of the company from funds affiliated with Whitebox Advisors, LLC (referred

to herein as “Whitebox”) for a total purchase price of $17,878,248.

November 14, 2024, the Company entered into a new secured one-year term loan with a principal amount of $10 million with Whitebox.

The term loan is secured by substantially all of the Company’s assets, including all intellectual property.

The Company used part

of the proceeds to pay off and close its then existing ABL revolving line of credit.

November 19, 2024, the Company and D&D entered into an exchange agreement, whereby D&D equitized the Notes, in full, for an aggregate

of 22,478,074 shares of common stock of the Company.

offers its portfolio of natural hand-crafted beverages in the craft specialty foods industry as natural alternatives to the $45 billion

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Soft Drink Industry Overview

retail CSD category grew 9% during 2023 and the ginger ale segment grew 7% and is now a $1.9 billion-dollar market.

Ginger ale growth,

we believe, is driven primarily by a consumer perception of ginger ale as a healthier alternative to other sodas.

Our new line of ginger

ales made with real ginger deliver on this perception and are poised to breakout in the segment.

a result of the COVID-19 pandemic, consumers are shifting consumption to better-for-you products.

We believe there is significant growth

potential from consumers switching away from mainstream beverages that contain artificial ingredients and preservatives towards great-tasting,

natural alternatives.

The retail CSD category grew 6% during 2024 and the

ginger ale segment grew 9% and is now a $2.1 billion-dollar market.

Ginger ale growth, we believe, is driven primarily by a consumer perception

of ginger ale as a healthier alternative to other sodas.

Our new line of ginger ales made with real ginger deliver on this perception

and, as a result, we believe there is substantial growth in this segment.

Consumers are shifting consumption to better-for-you

We believe there is significant growth potential from consumers switching away from mainstream beverages that contain artificial

ingredients and preservatives towards great-tasting, natural alternatives.

The CSD market has been impacted by the emergence

of functional or “modern soda” beverages that are formulated with functional ingredients to enhance hydration and provide

additional benefits such as gut health, cognitive enhancement, immune support, and energy.

Brands that have emerged and driving category

growth are Olipop, Poppi, Celsius, Alani Nu, and Culture Pop.

These beverages are low in sugar and calories and contain minerals, vitamins,

dietary fibers or adaptogens with an assortment of flavors.

The primary consumers are Gen Z and Millennials seeking healthier alternatives

to traditional soda.

Reed’s is set to launch a new

multi-functional soda line.

This innovative lineup is formulated with organic ginger, complex adaptogen mushroom extracts, and

prebiotic fiber.

Each serving contains only 5 grams of sugar, approximately 30 to 45 calories, 500 mg of adaptogens, and 2,000 to

5,000 mg of organic ginger.

The flavor profile includes Berry Bubbly, Strawberry Vanilla, Lemongrass Ginger, and Root Beer.

beverages cater to the rising demand for health-conscious, functional refreshment options and position us at the forefront of the

evolving beverage market.

The debut of this line is set for April 2025 and continuing for the balance of the year.

Presently the

Company has secured approximately 8,000 points of distribution.

Trends Driving Growth for Our Products

The following is a list of consumer trends that are accelerating and support

Interest in natural products has gone mainstream with annual growth expected to be 11.4% from 2022 through 2030.

31% of all food and beverage launches between 2022 and 2030 contained clean labels.

Most consumers – 72% are looking to limit or avoid sugar.

following is a list of consumer trends that are accelerating and supporting our brands.

Interest in natural products is growing and approximately 59% of shoppers think it’s important for their products to be

Sales of natural products increased 6% in 2024 and are expected to continue in the 4-6% range for the next few

The demand for clean label products has been steadily growing in recent years.

This trend is driven by factors such as increased consumer

awareness of food ingredients, rising health concerns, and a growing preference for natural and organic products.

consumers are looking to limit or avoid sugar.

The global reduced-sugar food and beverage market is expected

to grow at an annual rate of 9% from 2022 to 2030.

consumers are consuming plant-based foods and beverages.

Appeal continues to grow of higher-quality, independent, and more authentic brands across many beverage categories.

to grow at an annual rate of 9% through 2028.

consumers have made dietary changes to include more plant-based foods and beverages.

Ginger Based :

Consumer demand for ginger-based

products is growing due to increased awareness of ginger’s health benefits.

The global ginger market is expected to grow at an annual

rate of 9% from 2024 to 2032.

Premiumization:

A trend towards embracing quality has accelerated during the pandemic with consumers splurging on premium beverages at retail,

including premium mixers.

54% of 18 to 34 year olds are likely to choose a premium drink.

Better-for-you

More consumers are seeking non-alcoholic alternatives with bold and unique flavors.

Annual growth is expected to be

3% from 2024 to 2028.

A trend towards embracing quality has accelerated with consumers splurging on premium beverages at retail, including premium

The premium beverage market is expected to grow at an annual rate of 6% from 2024 to 2031.

The premium cocktail mixer

market is expected to grow at an annual rate of 8% from 2024 to 2033.

Nonalcoholic Beverages :

More consumers are seeking

nonalcoholic alternatives with bold and unique flavors.

Nonalcoholic drink consumption is expected to increase by a third by

strategies will remain responsive to these macro consumer trends as we concentrate our efforts on developing the Company’s sales

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Craft Ginger Beer

Craft Ginger Beer is set apart from other ginger beers by its proprietary process of pressing fresh ginger root, its exclusive use of

natural ingredients, and its authentic Jamaican-inspired recipe.

We do not use artificial preservatives, artificial flavors, or colors,

and Reed’s Ginger Beer is certified kosher.

We offer different levels of fresh ginger content, ranging from our lightest-spiced

Original, to our medium-spiced Extra, and finally to our spiciest Strongest.

Reed’s Craft Ginger Beer is set apart from other ginger beers by

its proprietary process of pressing fresh ginger root, its exclusive use of natural ingredients, and its authentic Jamaican-inspired recipe.

We do not use artificial preservatives, artificial flavors, or colors, and Reed’s Ginger Beer is certified kosher.

We offer different

levels of fresh ginger content, ranging from our lightest-spiced Original, to our medium-spiced Extra, and finally to our spiciest Strongest.

We also offer three sweetener options:

one with cane sugar,

honey and fruit juices;

one with cane sugar, and fruit juices;

one with honey and pineapple juice;

and another without sugar (Zero Sugar) made from an innovative blend of natural

In 2021, we expanded our Extra Ginger Beer portfolio into cans offerings.

and another without

sugar (Zero Sugar) made from an innovative blend of natural sweeteners.

In 2021, we expanded our Extra Ginger Beer portfolio into cans

of the end of 2024, the Reed’s Craft Ginger Beer line included five major varieties with a mix of bottles and cans:

Original Ginger Beer – Our first to market product uses a Jamaican-inspired recipe that calls for fresh ginger root, lemon,

lime, pineapple juice, honey, raw cane sugar, herbs and spices.

Original Ginger Beer – O ur first to market product uses a Jamaican-inspired recipe that calls for fresh ginger root,

lemon,and lime, juice, honey and pineapple flavors, raw cane sugar, herbs and spices.

Premium Ginger Beer – Our Original Ginger Beer sweetened with honey and pineapple juice.

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to match the great taste of the cane sugar version in a zero-calorie drink.

Real Cranberry Ginger Ale – Seasonal product, launch in the fall of 2021 is our Real Ginger Ale with cranberry added.

a consumer favorite during the holiday season and is available October through December.

Real Cranberry Ginger Ale – This seasonal product launched in the fall of 2021 and is a delicious holiday

offering available September through December.

Harvest Spiced Apple Cider – This seasonal product launched in the fall of 2022 and is a delicious holiday offering available

September through December.

Reed’s Real Blackberry Ginger Ale -

This seasonal product launched in the fall of 2024 and is a delicious holiday offering available September through December

Ready to Drink

Zero Sugar Classic Mule – Launched in 2020 and now sold in 23 states, Reed’s first-ever alcoholic offering is packed

Zero Sugar Classic Mule – Launched in 2020 and currently sold in 14 states, Reed’s first-ever alcoholic offering is packed

with REAL, fresh ginger root and made through a unique handcrafted brewing and fermentation process.

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Virgil’s first Handcrafted soda was launched in 1994.

It began as one man’s passion to create the finest root beer

ever produced and has since won numerous awards.

Virgil’s difference is using natural ingredients to craft bold, classic soda flavors.

Virgil’s Handcrafted line includes Root Beer, Vanilla Cream, Black Cherry, and Orange Cream.

Beginning in 2023 Virgil’s Handcrafted

soda will be offered in both glass and can formats.

Virgil’s launched a new line of Zero Sugar, Zero Calorie craft sodas in 2019.

It began as one man’s passion to create the finest root

beer ever produced and has since won numerous awards.

Virgil’s difference is using natural ingredients to craft bold, classic

soda flavors.

Virgil’s Handcrafted line includes Root Beer, Cola, Vanilla Cream, Black Cherry, and Orange Cream.

2023 Virgil’s Handcrafted soda will be offered in both glass and can formats.

V irgil’s launched a new line of Zero Sugar, Zero Calorie craft sodas in 2019.

Each Zero Sugar soda is sweetened

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This natural line of Zero Sugar flavors includes

Root Beer, Cola, Black Cherry, Vanilla Cream, Orange Cream, and Dr.

Root Beer, Cola, Vanilla Cream, Black Cherry, and Orange Cream.

Flying Cauldron Soda

Flying Cauldron is a non-alcoholic

butterscotch beer prized for its creamy vanilla and butterscotch flavors.

Sought after by beverage aficionados, Flying Cauldron is made

with natural ingredients and no artificial flavors, sweeteners, preservatives, gluten, caffeine, or GMOs.

Flying Cauldron is available

in 4-packs, single 12 oz bottles, and 16 oz swing-lid bottles.

Primary Markets

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to promote our products in specific channels and key targeted accounts.

We sell to well-known popular natural food and gourmet

retailers, large grocery store chains, mass merchants, club stores, convenience and drug stores, liquor stores, industrial cafeterias

(corporate feeders), and to on-premises bars and restaurants nationwide and in some international markets.

We also sell our products and

promotional merchandise directly to consumers via the Internet through our Amazon storefront which can be accessed through our company

web site www.drinkreeds.com .

In November 2023 we relaunched this ecommerce platform, which includes a reoccurring subscription

Changes to the retail landscape, including increased consolidation of

retail ownership, the continued growth of sales through e-commerce websites and mobile commerce applications, including through subscription

services and other direct-to-consumer businesses, the integration of physical and digital operations among retailers and the current

economic environment continue to increase the importance of major customers.

sell to well-known popular natural food and gourmet retailers, large grocery store chains, mass merchants, club stores, convenience and

drug stores, liquor stores, industrial cafeterias (corporate feeders), and to on-premises bars and restaurants nationwide and in some

international markets.

We also sell our products and promotional merchandise directly to consumers via the Internet through our Amazon

storefront, which can be accessed through our company web site www.drinkreeds.com .

In November 2023 we relaunched this ecommerce

platform, which includes a reoccurring subscription model.

to the retail landscape, including increased consolidation of retail ownership, the continued growth of sales through e-commerce websites

and mobile commerce applications, including through subscription services and other direct-to-consumer businesses, the integration of

physical and digital operations among retailers and the current economic environment continue to increase the importance of major customers.

of our representative key customers include:

Whole Foods Market, Sprouts, Natural Grocers by Vitamin Cottage, Fresh Thyme, NDG, INFRA, Earthfare.

Whole Foods Market, Sprouts, Natural Grocers by Vitamin Cottage, Fresh Thyme, NCG, and INFRA.

& specialty stores :

Trader Joe’s, Erewhon, Gelson’s, Harmon’s, Bristol Farms, The Fresh Market, Woodman’s,

Cost Plus World Market, Cracker Barrel.

Cost Plus World Market, and Cracker Barrel.

and mass chains :

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Walmart, Raley’s, Savemart, Ingles, Harris Teeter, Hannaford, SEG/Winn Dixie, Giant, Spartan Nash, Food Land, Lowes, Smart

and Final, Winco, Bashes, Haggen, AFS, Market Basket, Meijer, Cub HvVee.

BevMo!, Total Wine & More.

and Final, Winco, Bashes, Haggen, AFS, Market Basket, Meijer, Cub, and HvVee.

BevMo!, ABC, and Total Wine and More.

& drug stores :

Rite Aid, All Town Fresh Markets.

Distribution Network

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presently export Reed’s and Virgil’s brands throughout international markets via US based exporters.

International markets

where our brands are present are France, UK, South Africa, portions of the Caribbean, Canada, Spain, Philippines, Mexico, Vietnam, and

International

sales to some areas of the world are cost prohibitive, except for some specialty sales, since our premium sodas were historically packed

in glass, which drives substantial freight costs when shipping overseas.

Despite these cost challenges, we believe there are good opportunities

to expand internationally, and we are increasing our marketing focus on these areas by adding freight friendly packages such as aluminum

cans and have secured manufacturing partnerships in local markets whereby we ship concentrate rather than finished goods.

have production facilities in the U.K.

markets where our brands are present are Germany, France, UK, South Africa, Canada, Spain, Philippines,

Mexico, Vietnam, Australia, and portions of the Caribbean and Central America,

International

sales to some areas of the world are cost prohibitive, except for some specialty sales, since our premium sodas were historically

packed in glass, which drives substantial freight costs when shipping overseas.

Despite these cost challenges, we believe there are

good opportunities to expand internationally, and we are increasing our marketing focus on these areas by adding freight friendly

packages such as aluminium cans and have secured manufacturing partnerships in local markets whereby we ship concentrate rather than

finished goods.

We currently have production facilities in the U.K.

and will be expanding into the European Union during 2025.

We are open to exporting and co-packing

internationally and expanding our brands into foreign markets and believe that our new partnership with D and D Holdings will advance

our ability to successfully penetrate the continent of Asia.

We believe this area is a natural fit for Reed’s ginger products because

of the popularity and importance of ginger in international markets, where ginger is a significant part of the local diet and nutrition.

are open to exporting and co-packing internationally and expanding our brands into foreign markets and believe that our new

partnership with D&D Holdings Ltd (“D&D”) will advance our ability to successfully penetrate the continent of

We believe this area is a natural fit for Reed’s ginger products because of the popularity and importance of ginger in

international markets, where ginger is a significant part of the local diet and nutrition.

believe the strength of our brands, innovation, and marketing, coupled with the quality of our products and flexibility of our distribution

network, allows us to compete effectively.

Our agreements with some of our distributors commit us to “termination fees” if we terminate our agreements

early or without cause.

These agreements provide for our distributor partners to have the right to distribute our products to a defined

type of retailer within a defined geographic region.

As is customary in the beverage industry, if we should terminate the agreement or

not automatically renew the agreement, we would be obligated to make certain payments to our distributor partners.

agreements with some of our distributors commit us to “termination fees” if we terminate our agreements early or without

These agreements provide for our distributor partners to have the right to distribute our products to a defined type of retailer

within a defined geographic region.

As is customary in the beverage industry, if we should terminate the agreement or not automatically

renew the agreement, we would be obligated to make certain payments to our distributor partners.

of our outside distributors are not bound by written agreements with us and may discontinue their relationship with us on short notice.

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In addition, our products are sometimes a small part of our distributors’

We continually monitor our distribution agreements with our partners across North America to ensure that they are optimal.

continually monitor our distribution agreements with our partners across North America to ensure that they are optimal.

Manufacturing

of Reed’s products are produced by our co-pack partners.

They brew, blend, bottle, and package our products and charge us a fee,

generally by the case, for the products produced.

We have a long-standing relationship with two co-packers in Pennsylvania and one in

California, one in Washington state and one in New York state.

We are actively expanding co-packing capacity and building finished goods

During 2023, we entered into co-packing agreements with a new facility in the Southeast United States and a co-packer in North

Carolina, Battle Co-Packaging.

Our agreement with Battle Co-Packaging serves to expand our production for both bottles and cans and will

allows us to better serve our Southeast and south-central customers and grow our sales in the region.

We are also in discussions and

negotiations with additional co-packers to secure added capability for future production needs.

All of Reed’s products are produced by our co-pack

They brew, blend, bottle, and package our products and charge us a fee, generally by the case, for the products produced.

have relationships with two co-packers in Pennsylvania and three in California, one in Washington state, one in Oregon,

one in New York state, and one in North Carolina.

We are actively expanding co-packing capacity and building finished goods inventory.

During 2024, we entered into co-packing agreements with a new facility in Southern California, DrinkPak.

Our agreement with DrinkPak serves

to expand our production for cans and will allows us to better serve our Southwest and club customers and grow our sales in the region.

We are also in discussions and negotiations with additional co-packers to secure added capability for future production needs.

some instances, subject to agreement, certain equipment may be purchased exclusively by us and/or jointly with our co-packers and installed

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a pre-determined number of cases that are produced at the facilities concerned.

most of our products there are limited co-packing facilities in our markets with adequate capacity and/or suitable equipment to

package our products.

Further, our ability to estimate demand for our products is imprecise,

particularly with new products, and may be less precise during periods of rapid growth, including in new markets.

If we materially

underestimate demand for our products, and/or are unable to secure sufficient ingredients or raw materials, and/or procure adequate

packing arrangements and/or obtain adequate or timely shipment of our products, we are not be able to satisfy demand on a short-term

We have experienced disruptions and delays in production that have impacted our operations and revenues and there can

be no assurances that we will not encounter such disruptions in the future.

most of our products there are limited co-packing facilities in our markets with adequate capacity and/or suitable equipment to package

our products.

Further, our ability to estimate demand for our products is imprecise, particularly

with new products, and may be less precise during periods of rapid growth, including in new markets.

If we materially underestimate demand

for our products, and/or are unable to secure sufficient ingredients or raw materials, and/or procure adequate packing arrangements and/or

obtain adequate or timely shipment of our products, we may not be able to satisfy demand on a short-term basis.

We have experienced

disruptions and delays in production that have impacted our operations and revenues and there can be no assurances that we will not encounter

such disruptions in the future.

continue to actively seek alternative and/or additional co-packing facilities with adequate capacity and capability for the production

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In order to drive efficiency and reduce costs, on February

1, 2019, we entered into a strategic partnership with FitzMark to manage all freight movement for the Company.

1, 2019, we entered into a strategic partnership with Fitz Mark to manage all freight movement for the Company.

FitzMark is one of the

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raw materials and finished goods.

This partnership supports planning and execution of all inventory movement, assessment of storage needs

This partnership supports planning and execution of all inventory movements, assessment of storage needs

and cost management.

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the growth of the Reed’s and Virgil’s core product offerings, we believe significant opportunity remains in the natural beverage

Healthier alternatives will be the future for carbonated soft drinks.

We are in the process of formulating new products that leverage

fresh organic ginger to create a portfolio of beverages targeting the “better-for-you” lifestyle category.

We look forward

to unveiling these products in the back half of the year with a soft launch during Q4.

We will continue to drive product development

in the natural, no and low sugar offerings in the “better for you” beverage categories.

In addition, we believe there are

powerful consumer trends that will help propel the growth of our brand portfolio including the increased consumption of ginger as a recognized

superfood, the growing use of ginger beer in today’s popular cocktail drinks, and consumers’ increased demand for higher

quality, natural handcrafted beverages.

Healthier alternatives will be the future for carbonated

We are in the process of formulating new products that leverage fresh organic ginger to create a portfolio of beverages targeting

the “better-for-you” lifestyle category.

We look forward to the release of our new line of multi-functional beverages during

2025 with a launch during Q1.

This product is formulated with organic ginger, complex adaptogen mushroom extracts, and prebiotic fibre.

Each serving contains only 5 grams of sugar, approximately 30 to 45 calories, 500 mg of adaptogens, and 2,000 to 5,000 mg of organic ginger.

The flavor profile includes Berry Bubbly, Strawberry Vanilla, Lemongrass Ginger, and Root Beer.

will continue to drive product development in the natural, no and low sugar offerings in the “better for you” beverage categories.

In addition, we believe there are powerful consumer trends that will help propel the growth of our brand portfolio including the increased

consumption of ginger as a recognized superfood, the growing use of ginger beer in today’s popular cocktail drinks, and consumers’

increased demand for higher quality, natural handcrafted beverages.

include our compelling line of full flavor, natural, zero sugar, zero calorie sodas.

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believe our new business model enhances our ability to be nimble and innovative, producing category leading new products in a short period

Non-alcoholic

in this competitive environment is dependent on effective promotion of existing products, effective introduction of new products and

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innovation and marketing, coupled with the quality of our products and flexibility of our distribution network, allows us to compete

nonalcoholic beverage segment of the commercial beverage industry is highly competitive, consisting of numerous companies ranging from

non-alcoholic beverage segment of the commercial beverage industry is highly competitive, consisting of numerous companies ranging from

small or emerging to very large and well established.

Our nonalcoholic products compete on the basis of brand recognition and loyalty,

Our non-alcoholic products compete on the basis of brand recognition and loyalty,

taste, price, value, quality, innovation, distribution, shelf space, advertising, marketing and promotional activity (including digital),

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of these brands have enjoyed broad, well-established national recognition for years, through well-funded advertising and other branding

Competitors in the ginger beer category include Goslings, Barrett’s, Fever Tree, Bundaberg, Cock ‘n Bull and Q;

Competitors in the ginger beer category include Goslings, Barritt’s, Fever Tree, Bundaberg, Cock ‘n Bull and Q;

in the craft soda category we compete with brands such as Stewart’s, IBC, Zevia, Henry Weinhard’s, Boylan, Sprechers, and

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The royalty fees are 0% for 2023, 2% for 2024, 4% for 2025, and 5% thereafter.

RTD category refers to canned cocktails that offer convenience and quality for cocktail drinkers.

start of Covid-19, when restaurants and bars closed in March 2020, helped propel the category with consumers bringing the on-premises

cocktail occasion to their homes.

RTD (Ready to Drink) category refers to canned cocktails that offer convenience and quality for cocktail drinkers.

start of Covid-19, when restaurants and bars closed in March 2020, helped propel the category with consumers bringing the

on-premises cocktail occasion to their homes.

This was a major boost for canned, single-serve RTDs.

Without the recent quality improvements of RTD

cocktails, however, it’s unlikely that the category would have taken off.

Today’s RTD cocktails bring much higher quality

versus earlier wine coolers and malt-based hard lemonades.

Premiumization has resulted in a new wave of products that boast less sugar

and more transparency.

Variety has also been a key driver, allowing consumers ways to experiment without buying costly ingredients or

Reed’s is poised to leverage these trends by bringing high-quality, crafted Mules made with real fresh ginger to the market.

Without the recent quality

improvements of RTD cocktails, however, it’s unlikely that the category would have taken off.

Today’s RTD cocktails

bring much higher quality versus earlier wine coolers and malt-based hard lemonades.

Premiumization has resulted in a new wave of

products that boast less sugar and more transparency.

Variety has also been a key driver, allowing consumers ways to experiment

without buying costly ingredients or spirits.

Reed’s is poised to leverage these trends by bringing high-quality, crafted

Mules and Hard Ginger Ale made with real fresh ginger to the market.

selling brands in the category are High Noon, Cutwater Spirits, On The Rocks, Jose Cuervo, 1800 Tequila, Buzzballz, Bacardi, The Long

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are common ingredients and supply is easily accessible, we have few long-term contracts in place with our suppliers.

outside factors such as industry wide shortages, crop yield, weather, agricultural legislation, and the geopolitical climate impact supply and price;

however, we do source certain ingredients from different regions and suppliers to mitigate some of this

Bottles and Aluminum Cans

significant component of our product cost is the purchase of glass bottles and aluminum cans.

We are generally responsible for

arranging for the purchase and delivery to our third-party co-packers of the containers in which our beverage products are packaged.

We source glass bottles directly from manufacturers or indirectly through brokers or co-packers, based on their cost and

availability regionally.

During 2022 we entered into a three year agreement with a packaging broker to supply us with sleek and

standard 12-ounce cans though the year 2025.

These suppliers provide expertise in emerging package and material innovation that

can be leveraged to further expand marketing and package offerings.

outside factors such as industry wide shortages, crop yield, weather, agricultural legislation, and the geopolitical climate impact supply

however, we do source certain ingredients from different regions and suppliers to mitigate some of this risk.

Bottles and Aluminium Cans

significant component of our product cost is the purchase of glass bottles and aluminium cans.

We are generally responsible for arranging

for the purchase and delivery to our third-party co-packers of the containers in which our beverage products are packaged.

glass bottles directly from manufacturers or indirectly through brokers or co-packers, based on their cost and availability regionally.

During 2022 we entered into a three-year agreement with a packaging broker to supply us with sleek and standard 12-ounce cans though

the year 2025.

These suppliers provide expertise in emerging package and material innovation that can be leveraged to further expand

marketing and package offerings.

Capital Practices

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ownership enables us to recognize gross revenue as opposed to a royalty fee going forward.

of our nonalcoholic beverages are somewhat seasonal with higher-than-average volume in the warmer months.

The volume of sales in the beverage business is affected by weather conditions from time to time.

of our non-alcoholic beverages are somewhat seasonal with higher-than-average volume in the warmer months.

The volume of sales in the

beverage business is affected by weather conditions from time to time.

Additionally, a portion of our products are only available at certain times of the year.

own copyrights, trademarks and trade secrets relating to our products and the processes for their production;

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co-packers to use applicable Reed’s trademarks in connection with their manufacture, sale and distribution of our products.

registered and intend to obtain additional trademarks in international markets as may become necessary.

have registered and intend to obtain additional trademarks in international markets as may become necessary.

use confidentiality and non-disclosure agreements with employees, manufacturers and distributors to protect our proprietary rights.

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laws and regulations that apply to our business and the production, distribution and sale of our products include, but are not limited

the Federal Food, Drug and Cosmetic Act and various state laws governing food safety and food labeling;

the Federal Food, Drug and Cosmetic Act and various state laws governing food safety and food labelling;

the Food Safety Modernization

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is possible that similar or more restrictive requirements may be proposed or enacted in the future.

jurisdictions have either imposed, or are considering imposing, new or increased taxes on the manufacture, distribution or sale of our

products, ingredients or substances contained in, or attributes of, our products or commodities used in the production of our products.

jurisdictions have either imposed, or are considering imposing, new or increased taxes on the manufacture, distribution or sale of

our products, ingredients or substances contained in, or attributes of, our products or commodities used in the production of our

These taxes vary in scope and form:

some apply to all beverages, , while others apply only to beverages with a caloric sweetener (e.g.,

Similarly, some measures apply a single tax rate per ounce/liter on beverages containing over a certain level of added sugar

(or other sweetener) while others apply a graduated tax rate depending upon the amount of added sugar (or other sweetener) in the beverage

and some apply a flat tax rate on beverages containing a particular substance or ingredient, regardless of the level of such substance

or ingredient.

some apply to all beverages while others apply only to beverages with a caloric

sweetener (e.g., sugar).

Similarly, some measures apply a single tax rate per ounce/liter on beverages containing over a certain

level of added sugar (or other sweetener) while others apply a graduated tax rate depending upon the amount of added sugar (or other

sweetener) in the beverage and some apply a flat tax rate on beverages containing a particular substance or ingredient, regardless

of the level of such substance or ingredient.

of our beverage products presently offer and use non-refillable, recyclable containers in the United States.

Some of these co-packers also

offer and use refillable containers, which are also recyclable.

Legal requirements apply in various jurisdictions in the United States

and overseas requiring deposits or certain taxes or fees be charged for the sale, marketing and use of certain non-refillable beverage

Some of these co-packers

also offer and use refillable containers, which are also recyclable.

Legal requirements apply in various jurisdictions in the United

States and overseas requiring deposits or certain taxes or fees be charged for the sale, marketing and use of certain non-refillable

beverage containers.

The precise requirements imposed by these measures vary.

Other types of beverage container-related deposit, recycling, tax

and/or product stewardship statutes and regulations also apply in various jurisdictions in the United States and overseas.

Other types of beverage container-related deposit, recycling,

tax and/or product stewardship statutes and regulations also apply in various jurisdictions in the United States and overseas.

We anticipate

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California Consumer Privacy Act of 2018 (“CCPA”), which became effective on January 1, 2020, and its extension, the California

Privacy Rights Act (“CPRA”), which will take effect on January 1, 2023.

Privacy Rights Act (“CPRA”), which took effect on January 1, 2023.

The interpretation and application of data privacy,

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Risk Factors.”

Human Capital

Attracting, developing and retaining talent with

the right skills to drive our business is central to our growth strategy.

The strength of our workforce is one of the significant contributors

to our success.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and

integrating our existing and new employees, advisors and consultants.

The principal purposes of our 2024 Inducement Plan was to retain

and reward personnel through the granting of stock-options, in order to increase shareholder value and the success of our Company by

motivating such individuals to perform to the best of their abilities and achieve our objectives.

of December 31, 2024, we had 24 full-time equivalent employees on our corporate staff.

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We believe relations with our employees are good.

Company maintains a website at the following address:

Company maintains websites at the following addresses:

www.drinkreeds.com

The information on the Company’s website is not incorporated

by reference in this report.

www.vigils.com

www.flyingcauldron.com

Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits, proxy and information statements

and amendments to those reports filed or furnished pursuant to Sections 13(a), 14, and 15(d) of the Exchange Act are available through

the “Investors” portion of our website www.drinkreeds.com free of charge as soon as reasonably practicable after we electronically

file such material with, or furnish it to, the Securities and Exchange Commission, or SEC.

Information on our websites is not part of

this Annual Report or any of our other securities filings unless specifically incorporated herein by reference.

We have included our

website addresses in this Annual Report solely as inactive textual references.

Our filings with the SEC may be accessed through the SEC’s

website at www.sec.gov.

All statements made in any of our securities filings, including all forward-looking statements or information,

are made as of the date of the document in which the statement is included, and we do not assume or undertake any obligation to update

any of those statements or documents unless we are required to do so by law.

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 1. Business