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September 16, 2024

Norwalk-based ginger beverage maker Reed’s closes $6M in financing

Contributed Reed's Inc. produces Reed's, Virgil's and Flying Cauldron beverages.
By David Krechevsky

Norwalk-based Reed’s Inc., owner of a portfolio of handcrafted, natural ginger beverages, announced Monday it has closed a $6 million private investment in public equity (PIPE).

Approximately $4.1 million of previously funded Simple Investments in Future Equity (SAFEs) automatically converted into the PIPE, the company said. In addition, $1.9 million of cash proceeds was funded by the lead investor and the company’s largest stockholder, D&D Source of Life Holding LTD.

The purchase price per share was $1.50, a 21% premium to the closing stock price of $1.24 on Sept. 13.

Reed’s CEO Norman E. Snyder Jr. said proceeds from the funding round will “improve our working capital to drive growth as we further build our inventory levels, increase promotional activity and expand product authorizations.”

He added that Reed’s also plans to collaborate with D&D Source of Life Holding to “leverage their market presence overseas to expand our product distribution internationally.”

The closing of the financing round follows the company’s second quarter earnings report released Aug. 13 in which it posted a $700,000, or 16-cent-per-share, operating loss, an improvement over a $1.7 million, or 55-cent-per-share, loss a year earlier.

Reed’s also noted that net sales in the second quarter increased 19% to $11.9 million compared to $10 million a year earlier. It attributed the increase in part to strong demand for its products and increased promotional activity.

Established in 1989, Reed's Inc. craft beverages are sold under the Reed’s, Virgil’s and Flying Cauldron brand names. Its products — including ginger-based beverages, craft sodas, and non-alcoholic butterscotch beer — are sold in over 45,000 stores nationwide.
 

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