Reed's Announces New Credit Facility With Significantly Lower Interest Rates and an Additional 750k Term Loan
09 Novembro 2011 - 3:56PM
Marketwired
Reed's, Inc. (NASDAQ: REED), maker of the top-selling sodas in
natural food stores nationwide, today announced the closing of a
new credit agreement.
The Loan and Security Agreement replaces the Company's current
revolving line of credit (RLOC) and adds a new $750,000 term loan
to the overall package. The RLOC portion of the credit agreement
remains at $3 million and includes an improved collateral coverage
percentage on the accounts receivable available for borrowing. The
interest rate on the revolving line of credit is at Prime plus
3.75% (currently 7%), a decrease from 18% in the previous
agreement. The $750,000 term loan bears interest at the prime rate
plus 11.6%, which shall not be below 14.85%, payable in 48 equal
monthly installments, unless repaid earlier. The term loan is a
component of the overall Loan Agreement.
The three-year Agreement is secured by all of the unencumbered
assets of the Corporation, consistent with the prior credit
agreement. The new credit adds an early termination fee provision
consistent with industry standards, for both the RLOC and the term
loan. The new credit also adds a debt service coverage ratio
financial covenant that is effective if the credit availability
under the RLOC falls below $100,000. Other terms and conditions of
the agreement are generally consistent with the Company's prior
line of credit agreement.
James Linesch, Reed's Chief Financial Officer, stated, "We were
pleased to have received four solid proposals to replace our
existing credit with more favorable terms. Our type of business is
considered attractive due to our consistent top-line organic growth
over the past year and a half and the quality of our customer base.
We are very pleased with this new relationship as they seem to
really understand our business."
Chris Reed, Founder, Chairman and CEO of Reed's, Inc., stated,
"The terms that we gained in this Agreement, as well as the other
proposals, are an indication that Reed's is now a stronger company
with a lower credit risk. Our cost of capital has decreased and we
now have the working capital necessary to continue our growth
throughout 2012."
About Reed's, Inc. Reed's, Inc. makes the
top selling natural sodas in the natural foods industry sold in
over 10,500 natural food markets and supermarkets nationwide. Its
six award-winning non-alcoholic Ginger Brews are unique in the
beverage industry, being brewed, not manufactured and using fresh
ginger, spices and fruits in a brewing process that predates
commercial soft drinks. The Company owns the top selling root beer
line in natural foods, the Virgil's Root Beer product line, and the
top selling cola line in natural foods, the China Cola product
line. Other product lines include: Reed's Ginger Candies and Reed's
Ginger Ice Creams. In 2009, Reed's started producing private label
natural beverages for select national chains.
Reed's products are sold through specialty gourmet and natural
food stores, mainstream supermarket chains, retail stores and
restaurants nationwide, and in Canada, as well as through private
label relationships with major supermarket chains. For more
information about Reed's, please visit the company's website at:
http://www.reedsinc.com or call 800-99-REEDS.
Follow Reed's on Twitter at http://twitter.com/reedsgingerbrew
Reed's Facebook Fan Page at
https://www.facebook.com/ReedsGingerBrew
SAFE HARBOR STATEMENT Some portions of this press release,
particularly those describing Reed's goals and strategies, contain
"forward-looking statements." These forward-looking statements can
generally be identified as such because the context of the
statement will include words, such as "expects," "should,"
"believes," "anticipates" or words of similar import. Similarly,
statements that describe future plans, objectives or goals are also
forward-looking statements. While Reed's is working to achieve
those goals and strategies, actual results could differ materially
from those projected in the forward-looking statements as a result
of a number of risks and uncertainties. These risks and
uncertainties include difficulty in marketing its products and
services, maintaining and protecting brand recognition, the need
for significant capital, dependence on third party distributors,
dependence on third party brewers, increasing costs of fuel and
freight, protection of intellectual property, competition and other
factors, any of which could have an adverse effect on the business
plans of Reed's, its reputation in the industry or its expected
financial return from operations and results of operations. In
light of significant risks and uncertainties inherent in
forward-looking statements included herein, the inclusion of such
statements should not be regarded as a representation by Reed's
that they will achieve such forward-looking statements.
For further details and a discussion of these and other risks
and uncertainties, please see our most recent reports on Form
10-KSB and Form 10-Q, as filed with the Securities and Exchange
Commission, as they may be amended from time to time. Reed's
undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
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Investor Relations Contact: Reed's Inc. (310)217-9400 Email:
Email Contact www.reedsinc.com
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