Reed's Inc. Reports $13.2 Million Net Loss, Implements Debt Restructuring and Product Innovation

Reed's Inc. reported a net loss of $13.2 million for the fiscal year ending December 31, 2024, a 15% improvement from the previous year's loss of $15.5 million. The company's net sales decreased by 15% to $37.95 million, down from $44.71 million in 2023. This decline was attributed to a 13% drop in gross billing, which fell to $44.32 million from $50.69 million, primarily due to reduced sales volumes and increased promotional allowances. Despite the decrease in sales, gross profit increased by 17% to $11.38 million, resulting in a gross margin of 30%, up from 22% in the prior year.

In 2024, Reed's made significant operational changes, including a debt restructuring that involved converting high-interest debt into equity. The company entered into a new secured loan agreement with Whitebox, amounting to $10 million, and successfully converted $22.48 million of convertible notes into common stock. This restructuring was part of a broader strategy to enhance liquidity and reduce financial burdens. The company also reported a decrease in delivery and handling expenses by 22%, reflecting efforts to mitigate inflationary pressures.

Reed's continued to focus on product innovation, with plans to launch a new line of multi-functional sodas in April 2025, which will feature organic ginger and adaptogen extracts. The company has secured approximately 8,000 points of distribution for this new product line, which aims to cater to the growing demand for health-conscious beverages. Additionally, Reed's has expanded its geographic reach, forming a new subsidiary, Reed's Asia, to facilitate entry into the Asia Pacific market, including a recent acquisition of a Japanese beverage company.

The company reported a total employee headcount of 24 full-time equivalent employees as of December 31, 2024, with no participation in collective bargaining agreements. Reed's has also streamlined its product offerings, focusing on core brands such as Reed's Craft Ginger Beer and Virgil's Handcrafted Sodas, while exiting less profitable categories. The company anticipates that these strategic decisions, along with ongoing market trends favoring natural and healthier beverage options, will support future growth and profitability.

Looking ahead, Reed's management expressed cautious optimism, noting that while the economic environment remains uncertain due to inflation and geopolitical factors, they expect to maintain sufficient liquidity to fund operations for at least the next twelve months. The company plans to continue monitoring market conditions and adjusting its strategies accordingly to capitalize on emerging consumer trends in the beverage industry.