In a recent transaction filed with the SEC, Reed’s Inc. (NYSE: OTC: ) Chief Compliance Officer (CCO) Christopher Scott Burleson purchased approximately $28,400 worth of stock options under the company’s 2024 Incentive Plan right. The conversion or exercise price for non-qualifying stock options is $1.30 per share.
The transaction took place on April 29, 2024 and involved 21,818 non-qualified stock options. The options can be exercised on different dates and are subject to meeting performance-based criteria, according to the filing. The earliest tranche of options will be exercised immediately, with subsequent tranches of options exercisable annually between 2025 and 2027.
In addition to the options, the filing includes the acquisition of 5,209 shares of common stock that are part of the underlying securities granting the options. Following the completion of these transactions, Burleson’s direct ownership of the company has increased to 29,369 shares of common stock.
Reed’s Inc., known for its carbonated soft drinks, is headquartered in Norwalk, Connecticut and operates in the beverage industry. The company’s shares are listed on the New York Stock Exchange under the symbol REED.
The reported transactions provide information about the executive’s increased stake in the company, which could indicate confidence in Reed’s company’s future performance.
In other recent news, Reed’s Inc. is off to a promising start in 2024, despite facing challenges as a lack of orders impacts shipments. The beverage company reported net sales of $9.6 million in the first quarter of 2024, gross profit increased 26% to $3.4 million, and gross profit margin increased to 35.6%. The company also managed to reduce operating expenses by 23% year-on-year. However, Reed’s still reported a revised EBITDA loss of $0.4 million and an operating loss of $2.6 million.
The company has taken steps to optimize its cost structure and expand distribution, partnering with Battle Co-Packing and renegotiating freight contracts to save production and costs. Reed’s is committed to maintaining gross profit margins above 30% and achieving growth and profitability through inventory optimization and e-commerce expansion. The company reiterated its financial outlook for 2024, projecting net sales growth, gross margin expansion and positive operating cash flow.
Reed plans to increase inventory to manage out-of-stocks and support expected sales growth, and is working to expand its presence at retailers such as Whole Foods, Sprouts and Trader Joe’s. Despite the challenges, Reed’s is confident of achieving its 2024 goals and will provide an update on its next earnings call.
Investment Professional Insights
In light of Reed’s Inc.’s recent insider transactions, a closer look at the company’s financial health and market position using InvestingPro data reveals some key indicators. Reed’s has an adjusted market capitalization of $6.05 million, reflecting the company’s size in the beverage industry. Despite challenging conditions, with revenue down 17.05% in the trailing 12 months to Q1 2024, the company managed to maintain a gross margin of 33.14% during the same period.
Interestingly, the company’s fair value has been subject to varying viewpoints. While analysts target fair value at $3, InvestingPro’s own fair value estimate is slightly lower at $1.64. This difference may provide investors with an opportunity to delve deeper into the company’s valuation and growth prospects.
InvestingPro Tips suggests that a single-month total price return of 34.45% could indicate a positive market reaction to recent company developments or broader industry moves. With its next earnings report date scheduled for August 9, 2024, investors should mark their calendars to assess developments in the company’s financial position. For those looking to expand their investment analysis toolkit, InvestingPro offers additional insights and tips by using coupon codes PRONEWS24, investors who subscribe to Pro and Pro+ annually or every two years can receive an additional 10% discount. Currently, Reed’s Inc. offers 15 additional InvestingPro Tips to further inform investment decisions.
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