CORRECTING and REPLACING: Reed’s Reports Fourth Quarter and Full Year 2024 Results

About this update from Reed's, Inc.

NORWALK, Conn., March 27, 2025 (GLOBE NEWSWIRE) -- The Company is issuing a corrected version of its fourth quarter and full year 2024 earnings press release to account for a $750,000 provision related to contract proceedings with a vendor, which impacted the previously reported selling, general and administrative expenses and operating loss. The corrected press release follows: Reed’s, Inc. (OTCQX: REED) (“Reed’s” or the “Company”), owner of the nation’s leading portfolio of handcrafted, natural ginger beverages, is reporting financial results for the three months and twelve months ended December 31, 2024. Q4 2024 Financial Highlights (vs. Q4 2023): FY 2024 Financial Highlights (vs. FY 2023): Management Commentary “We are encouraged by the meaningful progress we made in 2024 as we implemented significant steps to strengthen our balance sheet, streamline operations, and drive efficiencies,” said Norman E. Snyder, Jr., CEO of Reed’s. “During the fourth quarter, we closed a $10 million private placement, in addition to the incremental capital, we sourced a new demand note, and completed the convertible debt restructuring during the third quarter, providing the necessary capital to invest in inventory, personnel, marketing, strategic partnerships, and international expansion — all of which we believe will position Reed’s for accelerated growth and profitability. We also increased retail penetration during the quarter, securing notable distribution gains across Kroger, Albertsons/Safeway, Harris Teeter, Stop and Shop, Giant Eagle, and Costco for multiple products, including Reed’s Ginger Ale, Virgil’s Root Beer and Vanilla Cream Cans. “Subsequent to year-end, we welcomed Douglas W. McCurdy as our new CFO. Doug brings extensive finance, operational and leadership experience to our team. We also appointed Salvatore Vassallo, a seasoned consumer packaged goods and supply chain executive, as our new Vice President of Operations. We believe their combined leadership in finance, supply chain and operations will help drive both efficiency and scalability at Reed’s. “Looking ahead, we remain focused on executing our growth strategy with a solid foundation and strengthened balance sheet. This year we are expanding our product portfolio with the launch of our new multi-functional beverage line, expected to hit shelves in April. We have already secured over 8,000 points of distribution across key retailers nationwide. With a de-leveraged balance sheet, improved financial flexibility, and growing retail momentum, we believe we are well positioned to deliver meaningful growth and profitability in 2025.” Fourth Quarter 2024 Financial Results During the fourth quarter of 2024, net sales were $9.7 million compared to $11.7 million in the year-ago period. This decrease was primarily driven by short order shipments due to prior inventory constraints. Gross profit for the fourth quarter of 2024 increased to $2.9 million compared to $0.5 million for the same period in 2023. Gross margin was 30.0% compared to 4.0% in the year-ago quarter. The increase was driven by one-time charges in the prior-year period, including a $1.8 million non-cash packaging inventory valuation adjustment and a $1.3 million provision for product holds related to the Company’s swing-lid program. Delivery and handling costs were reduced by 10% to $1.7 million during the fourth quarter of 2024 compared to $1.8 million in the fourth quarter of 2023. Delivery and handling costs were 17% of net sales or $3.00 per case, compared to 16% of net sales or $2.82 per case during the same period last year. Selling, general and administrative costs were $4.8 million during the fourth quarter of 2024 compared to $3.0 million in the year-ago quarter. Operating loss during the fourth quarter of 2024 improved to $3.7 million or $(0.25) per share, compared to $5.0 million or $(1.55) per share in the fourth quarter of 2023. Modified EBITDA was $(0.7) million in the fourth quarter of 2024 compared to $43,000 in the fourth quarter of 2023. Liquidity and Cash Flow For the fourth quarter of 2024, the Company used approximately $3.9 million of cash from operating activities compared to cash used of $0.2 million for the same period in 2023. As of December 31, 2024, the Company had approximately $10.4 million of cash and $9.6 million of total debt net of capitalized financing fees. This compares to $0.6 million of cash and $27.4 million of total debt net of capitalized financing fees at December 31, 2023. About Reed's, Inc. Reed’s is an innovative company and category leader that provides the world with high quality, premium and naturally bold™ better-for-you beverages. Established in 1989, Reed's is a leader in craft beverages under the Reed’s®, Virgil’s® and Flying Cauldron® brand names. The Company’s beverages are now sold in over 45,000 stores nationwide. Reed’s is known as America's #1 name in natural, ginger-based beverages. Crafted using real ginger and premium ingredients, Reed’s portfolio includes ginger beers, ginger ales, ready-to- drink ginger mules and hard ginger ales. The brand has recently successfully expanded into the zero-sugar segment with its proprietary, natural sweetener system. Virgil's® is an award-winning line of craft sodas, made with the finest natural ingredients and without GMOs or artificial preservatives. The brand offers an array of great tasting, bold flavored sodas including Root Beer, Vanilla Cream, Black Cherry, Orange Cream, and Cola. These flavors are also available in five zero sugar varieties which are naturally sweetened and certified ketogenic. 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. For more information, visit  drinkreeds.com ,  virgils.com  and  flyingcauldron.com . To receive exclusive perks for Reed’s investors, please visit the Company’s page on the Stockperks app here . Forward-Looking Statements Statements in this release that are not historical are forward-looking statements. These forward- looking statements are typically identified by terms such as "believe," "expected,” "looking ahead," “remain focused,” “growing retail momentum,” “will position,” “expanding,” “well-positioned” and similar expressions. These forward-looking statements are based on current expectations. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties, and assumptions, many of which involve factors or circumstances that are beyond our control. These risks could materially impact our ability to access raw materials, production, transportation and/or other logistics needs. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, Reed’s actual results could differ materially from the results expressed or implied by the forward-looking statements we make. The risks and uncertainties referred to above include, but are not limited to: inventory shortages; risks associated with new product releases; the impacts of further inflation; risks that customer demand may fluctuate or decrease; risks that we are unable to collect unbilled contractual commitments, particularly in the current economic environment; our ability to compete successfully and manage growth; our ability to attract and retain qualified management and personnel; our ability to develop and expand strategic and third party distribution channels; our dependence on third party suppliers, brewers and distributors; third party co-packers meeting contractual commitments; risks related to our business expansion and international operations; our ability to continue to innovate; our strategy of making investments in sales to drive growth; increasing costs of fuel and freight, protection of intellectual property; competition; general political or destabilizing events, including the wars in Ukraine and Israel, conflict or acts of terrorism; financial markets, commodity and currency impacts of the wars; the effect of evolving domestic and foreign government regulations, including those addressing data privacy and cross-border data transfers; and other risks detailed from time to time in Reed’s public filings, including Reed’s annual report on Form 10-K expected to be filed on or before April 1, 2025, which will be available on the Securities and Exchange Commission’s web site at www.sec.gov . These forward-looking statements are based on current expectations and speak only as of the date hereof. Reed’s assumes no obligation and does not intend to update these forward-looking statements, except as required by law. Investor Relations Contact Sean Mansouri, CFA or Aaron D’Souza Elevate IR [email protected] (720) 330-2829 Modified EBITDA In addition to our GAAP results, we present Modified EBITDA as a supplemental measure of our performance. However, Modified EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income, income from operations or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of liquidity. We define Modified EBITDA as net income (loss), plus interest expense, tax expense, depreciation and amortization, stock-based compensation, changes in fair value of warrant expense, change in fair value of SAFE agreements, contract proceedings and insurance settlements, non-recurring professional fees, inventory write-offs associated with exited categories and major packaging and formula changes, one-time changes in policy, impact of changes to accounting methodology and one-time restructuring-related costs including employee severance and asset impairment. Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations during that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Modified EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Modified EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Set forth below is a reconciliation of net loss to Modified EBITDA for the three and twelve months ended December 31, 2024, and 2023 (unaudited; in thousands): We present Modified EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Modified EBITDA in developing our internal budgets, forecasts, and strategic plan; in analyzing the effectiveness of our business strategies in evaluating potential acquisitions; making compensation decisions; and in communications with our board of directors concerning our financial performance. Modified EBITDA has limitations as an analytical tool, which includes, among others, the following:

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