0001493152-23-040116 | 10-Q | XBRL Viewer

Transactions with California Custom Beverage, LLC, former related party (Tables)

9 Months Ended

Sep. 30, 2023

At September 30, 2023 and December 31, 2022, accounts receivable due from and accounts payable due to CCB were as follows:

Schedule of Related Parties

	September 30, 2023			December 31, 2022
Accounts receivable, net of provision of $538 and $538 at September 30, 2023 and December 31, 2022, respectively		777			777
Accounts payable		(452	)		(2,025	)
Net (payable) receivable		325			(1,248	)

Line of Credit

9 Months Ended

Sep. 30, 2023

Line Of Credit

Line of Credit

5. Line of Credit

Amounts outstanding under the Company’s credit facilities are as follows (in thousands):

	September 30, 2023			December 31, 2022
Line of credit – Alterna Capital Solutions	$	9,939		$	11,337
Capitalized financing costs		(242	)		(363	)
Total	$	9,697		$	10,974

In March, 2022, the Company entered into a financing agreement with Alterna Capital Solutions (“ACS”), for a line of credit to replace its former credit facility. The ACS line of credit is for a term of 3 years, provides for borrowings of up to $13,000, and is secured by eligible accounts receivable and inventory. An over advance rider provides for up to $400 of additional borrowing above the collateralized base (the “Over Advance”) up to a total borrowing of $13,000. At September 30, 2023, $14 of current availability and $3,062 of borrowing capacity was available under the financing agreement.

Borrowings based on receivables bears an interest of prime plus 4.75% but not less than 8.0% (13.25% at September 30, 2023 and 12.25% at December 31, 2022). Borrowings based on inventory bears an interest of prime plus 5.25% but not less than 8.5% (13.90 % at September 30, 2023 and 12.90% at December 31, 2022). The additional over advance rider bears a rate of prime plus 12.75%, but not less than 16.00% (18.00% at September 30, 2023 and 18.00% at December 31, 2022). Additionally, the line of credit is subject to monthly monitoring fee of $1 with a minimum usage requirement on the credit facility. A loan balance of less than $1,500 will bear interest at a rate in line with account receivables advances plus the monthly monitoring fee of $1.

The company incurred $483 of direct costs of the transaction, consisting primarily of broker, bank and legal fees. These costs have been capitalized and are being amortized over the 3-year life of the ACS agreement. The unamortized debt discount balance was $363 at December 31, 2022. For the nine months ended September 30, 2023, amortization of debt discount was $121, and as of September 30, 2023, the remaining unamortized debt discount balance is $242.

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Oct. 31, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-32501
Entity Registrant Name	REED’S, INC.
Entity Central Index Key	0001140215
Entity Tax Identification Number	35-2177773
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	201 Merritt 7
Entity Address, City or Town	Norwalk
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06851
City Area Code	(800)
Local Phone Number	997-3337
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,169,131

Summary of Non-vested Restricted Stock Activity (Details) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unvested Shares, Vested	(5,016)
Fair Value at Date of Issuance, Vested \| $	$ 32
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Unvested Shares, beginning balance	1,500
Issuable Shares, beginning balance
Fair Value at Date of Issuance, beginning balance \| $	$ 26
Weighted Average Grant Date Fair Value, Unvested, beginning balance \| $ / shares	$ 44.75
Unvested Shares, Granted
Issuable Shares, Granted
Fair Value at Date of Issuance, Granted \| $
Unvested Shares, Vested	(750)
Issuable Shares, Vested	750
Fair Value at Date of Issuance, Vested \| $
Unvested Shares, Forfeited	(750)
Issuable Shares, Forfeited
Fair Value at Date of Issuance, Forfeited \| $
Unvested Shares, Issued
Issuable Shares, Issued	(750)
Fair Value at Date of Issuance, Issued \| $	$ (3)
Unvested Shares, ending balance
Issuable Shares, ending balance
Fair Value at Date of Issuance, ending balance \| $
Weighted Average Grant Date Fair Value, Unvested, ending balance \| $ / shares

Stockholder’s Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
	May 25, 2023	Sep. 30, 2023	Sep. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Share price		$ 4.50
Stock repurchased, value		$ 1	$ 2
Officer [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Stock repurchased, shares		274
Stock repurchased, value		$ 1
Securities Purchase Agreement [Member] \| DD Source of Life Holding Ltd [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Common shares issued for cash	1,566,732
Warrants to purchase stock	313,346
Share price	$ 2.585
Proceeds from issuance of private placement	$ 4,016
Exercise price of warrants	$ 2.50

Leases Liabilities

9 Months Ended

Sep. 30, 2023

Leases Liabilities

Leases Liabilities

7. Leases Liabilities

During the nine months ended September 30, 2023 and 2022, lease costs totaled $67 and $56, respectively.

As of December 31, 2022, the operating lease liability totaled $394. During the nine months ended September 30, 2023, the Company made payments of $138 towards its operating lease liability. As of September 30, 2023, the operating lease liability totaled $256.

As of September 30, 2023, the weighted average remaining lease terms for an operating lease are 1.25 years. As of September 30, 2023, the weighted average discount rate on the operating lease is 12.60%.

Stock Warrants

9 Months Ended

Sep. 30, 2023

Stock Warrants

Stock Warrants

10. Stock Warrants

The Company’s warrant activity during the nine months ended September 30, 2023 is as follows:

Schedule of Warrant Activity

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value

Outstanding at December 31, 2022		235,946	$	16.99		4.20	$	-
Granted		313,346		2.59		2.64		-
Exercised		-		-		-
Forfeited		-		-		-
Outstanding at September 30, 2023		549,292	$	8.77		3.09	$	238
Exercisable at September 30, 2023		549,292	$	8.77		3.09	$	238

As of September 30, 2023, the outstanding and exercisable warrants have an aggregate intrinsic value of $238. The aggregate intrinsic value was calculated as the difference between the closing market price as of September 30, 2023, which was $3.26, and the exercise price of the Company’s warrants to purchase common stock.

On May 25, 2023, the Company entered into a Securities Purchase Agreement with D&D Source of Life Holding Ltd., as the lead investor, and certain of Reed’s affiliates pursuant to which the investors agreed to purchase an aggregate of 1,566,732 shares of Reed’s common stock and warrants to purchase 313,346 shares of Common Stock. The purchase price per share of Common Stock and associated warrant was $2.585. The warrants are exercisable for a term of three years at a per share exercise price of $2.50.

Intangible Assets

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

4. Intangible Assets

Intangible assets consist of the following (in thousands):

Summary of Intangible Assets

	September 30, 2023		December 31, 2022
Brand names	$	576	$	576
Trademarks		51		50
Total	$	627	$	626

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

Intangible assets consist of the following (in thousands):

Summary of Intangible Assets

	September 30, 2023		December 31, 2022
Brand names	$	576	$	576
Trademarks		51		50
Total	$	627	$	626

Secured Convertible Notes Payable (Details Narrative) - USD ($) $ in Thousands	1 Months Ended		9 Months Ended		12 Months Ended
	Aug. 31, 2022	May 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	May 31, 2023	Feb. 28, 2023
Short-Term Debt [Line Items]
Principal amount			$ 2,152		$ 648
Convertible notes			17,101		10,526
Convertiable notes payable			7,380		2,434
Accrued interest			3,267		1,052
Amortization of debt discount			$ 958	$ 307
Convertible Notes Payable [Member] \| Whitebox Advisors LLC [Member]
Short-Term Debt [Line Items]
Principal amount		$ 11,250			$ 10,450
Debt instrument rate terms	May 9, 2025	The notes bear interest at a rate of 10% per annum (with 5% per annum payable in cash and 5% per annum payable in kind (“PIK”) by adding such PIK interest to the principal amount of the notes)	November 28, 2023		November 28, 2023
Debt interest rate		10.00%
Debt instrument maturity date		May 09, 2025
Convertible notes	$ 7,900			$ 2,500
Monthly payment	$ 200
Weighted average interest	90.00%
2023	$ 400
2024	2,400
2025	$ 1,000
Loans Payable			$ 8,000
Debt fees			$ 2,152
Repurchase price percentage			110.00%
Convertiable notes payable		$ 4,050	$ 14,500			$ 4,050	$ 4,050
Accrued interest			3,267		$ 1,052
Interest expenses			2,483
Interest on convertible notes			979
Excess of asset base loan fees			1,504
Accrued interest paid			268
Unamortized debt discount			666		$ 976
Direct costs of issuing loans			$ 253
Common shares issued for financing costs, shares			82,438
Common shares issued for financing costs			$ 273
Amortization of debt discount			$ 820
Debt instrument conversion, description			The convertible notes are convertible at an initial conversion rate of 0.08306 shares of the Company’s common stock per one dollar of principal converted, or approximately $12.04 per share, subject to customary anti-dilution adjustments. In addition, if certain corporate events occur that constitute a make-whole fundamental change as defined, then the note holders are, under certain circumstances, are entitled to an increase in the conversion rate, limited to 0.12155 shares of Common Stock per one dollar of principal, or approximately $8.23 per share.
Debt conversion into shares			1,475,725

Condensed Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Preferred Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2021		$ 94	$ 107,246	$ (103,137)	$ 4,203
Balance, shares at Dec. 31, 2021	1,874,679	9,411
Fair value of vested options			448		448
Net loss				(13,288)	(13,288)
Fair value of vested restricted shares granted to officers			137		137
Fair value of vested restricted shares granted to officers, shares	6,748
Repurchase of common stock			(2)		(2)
Repurchase of common stock, shares	(265)
Common shares issued for financing costs			37		37
Common shares issued for financing costs, shares	2,000
Issuance of shares for dividends on Series A Convertible Preferred Stock				(5)	(5)
Issuance of shares for dividends on Series A Convertible Preferred Stock, shares
Common shares issued for cash, net of offering costs			5,034		5,034
Common shares issued for cash, net of offering costs, shares	371,893
Balance at Sep. 30, 2022		$ 94	112,900	(116,430)	(3,436)
Balance, shares at Sep. 30, 2022	2,255,055	9,411
Balance at Jun. 30, 2022		$ 94	112,686	(113,199)	(419)
Balance, shares at Jun. 30, 2022	2,253,047	9,411
Fair value of vested options			185		185
Net loss				(3,231)	(3,231)
Fair value of vested restricted shares granted to officers			29		29
Fair value of vested restricted shares granted to officers, shares	2,010
Issuance of shares for dividends on Series A Convertible Preferred Stock
Issuance of shares for dividends on Series A Convertible Preferred Stock, shares
Common shares issued for cash, net of offering costs
Common shares issued for cash, net of offering costs, shares	(2)
Balance at Sep. 30, 2022		$ 94	112,900	(116,430)	(3,436)
Balance, shares at Sep. 30, 2022	2,255,055	9,411
Balance at Dec. 31, 2022		$ 94	114,635	(123,199)	(8,470)
Balance, shares at Dec. 31, 2022	2,519,485	9,411
Fair value of vested options			351		351
Net loss				(8,927)	(8,927)
Fair value of vested restricted shares granted to officers			3		3
Fair value of vested restricted shares granted to officers, shares	750
Repurchase of common stock			(1)		(1)
Repurchase of common stock, shares	(274)
Common shares issued for financing costs			273		273
Common shares issued for financing costs, shares	82,438
Issuance of shares for dividends on Series A Convertible Preferred Stock				(5)	(5)
Issuance of shares for dividends on Series A Convertible Preferred Stock, shares
Common shares issued for cash, net of offering costs			4,016		4,016
Common shares issued for cash, net of offering costs, shares	1,566,732
Balance at Sep. 30, 2023		$ 94	119,277	(132,131)	(12,760)
Balance, shares at Sep. 30, 2023	4,169,131	9,411
Balance at Jun. 30, 2023		$ 94	119,138	(130,695)	(11,463)
Balance, shares at Jun. 30, 2023	4,169,131	9,411
Fair value of vested options			139		139
Net loss				(1,436)	(1,436)
Balance at Sep. 30, 2023		$ 94	$ 119,277	$ (132,131)	$ (12,760)
Balance, shares at Sep. 30, 2023	4,169,131	9,411

Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total cost	$ 1,560	$ 1,553
Accumulated depreciation and amortization	(1,001)	(787)
Net book value	559	766
Right-of-use Assets Under Operating Leases [Member]
Property, Plant and Equipment [Line Items]
Total cost	724	724
Computer Hardware and Software [Member]
Property, Plant and Equipment [Line Items]
Total cost	400	400
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Total cost	414	429
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 22

Leases Liabilities (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Leases Liabilities
Lease cost	$ 67	$ 56
Operating leases liability	256		$ 394
Payments of operating lease liability	$ 138
Weighted average remaining lease term for operating lease	1 year 3 months
Weighted average discount rate for operating lease	12.60%

Schedule of Related Parties (Details) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Related Party Transactions [Abstract]
Net of provision	$ 538	$ 538

Inventory

9 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

Inventory

2. Inventory

Inventory is valued at the lower of cost (first-in, first-out) or net realizable value, net of write downs, and is comprised of the following (in thousands):

Schedule of Inventory

	September 30, 2023		December 31, 2022
Raw materials and packaging	$	8,732	$	8,526
Finished products		7,232		7,649
Total	$	15,964	$	16,175

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

12. Commitments and Contingencies

In 2018, CCB assumed the monthly payments on our lease obligation for a Los Angeles manufacturing plant, and our release from the obligation by the lessor, however, is dependent upon CCB’s deposit of $1,200 of security with the lessor. As of September 30, 2023, $800 has been deposited with the lessor and Chris J. Reed has placed approximately 7,260 shares of the Company’s common stock valued at $24 that remain in escrow with the lessor.

From time to time, we are a party to claims and legal proceedings arising in the ordinary course of business. Our management evaluates our exposure to these claims and proceedings individually and in the aggregate and provides for potential losses on such litigation if the amount of the loss is estimable and the loss is probable.

We believe that there are no material litigation matters at the current time. Although the results of such litigation matters and claims cannot be predicted with certainty, we believe that the final outcome of such claims and proceedings will not have a material adverse impact on our financial position, liquidity, or results of operations.

Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net Sales	$ 11,856	$ 12,094	$ 33,018	$ 38,001
Cost of goods sold	7,823	9,659	23,778	29,335
Gross profit	4,033	2,435	9,240	8,666
Operating expenses:
Delivery and handling expense	1,908	2,249	5,714	8,893
Selling and marketing expense	861	1,220	3,567	5,623
General and administrative expense	1,407	1,420	4,427	5,319
Total operating expenses	4,176	4,889	13,708	19,835
Loss from operations	(143)	(2,454)	(4,468)	(11,169)
Interest expense	(1,293)	(777)	(4,459)	(2,119)
Net loss	(1,436)	(3,231)	(8,927)	(13,288)
Dividends on Series A Convertible Preferred Stock			(5)	(5)
Net Loss Attributable to Common Stockholders	$ (1,436)	$ (3,231)	$ (8,932)	$ (13,293)
Loss per share - basic	$ (0.34)	$ (1.43)	$ (2.69)	$ (6.54)
Loss per share - diluted	$ (0.34)	$ (1.43)	$ (2.69)	$ (6.54)
Weighted average number of shares outstanding - basic	4,169,131	2,254,356	3,322,959	2,030,503
Weighted average number of shares outstanding - diluted	4,169,131	2,254,356	3,322,959	2,030,503

Schedule of Amount Outstanding Under Credit Facilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Total	$ 9,697	$ 10,974
Capitalized financing costs	(242)	(363)
Alterna Capital Solutions [Member]
Line of Credit Facility [Line Items]
Total	$ 9,939	$ 11,337

Stockholder’s Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Stockholder’s Equity

8. Stockholder’s Equity

Common stock issuances

On May 25, 2023, the Company entered into a Securities Purchase Agreement with D&D Source of Life Holding Ltd., as the lead investor, and certain of Reed’s affiliates pursuant to which the investors agreed to purchase an aggregate of 1,566,732 shares of Reed’s common stock and warrants to purchase 313,346 shares of Common Stock. The purchase price was $2.585 per share of Common Stock with the associated warrant. The net proceeds to the Company, after deducting offering expenses, was $4,016. The warrants are exercisable for a term of three years at an exercise price of $2.50 per share.

On May 25, 2023, in order to induce the lead investor to subscribe, the Company granted the lead investor certain preemptive rights and agreed to support the lead investor’s nomination of two board designees, one of which shall be an independent director.

Common stock repurchases

During the nine months ended September 30, 2023, the Company repurchased 274 shares of common stock from an officer for $1 based on the market value of share on the date repurchased. The Company retired the shares.

- Definition

The entire disclosure for equity.

+ References

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+ Details

Transactions with California Custom Beverage, LLC, former related party

9 Months Ended

Sep. 30, 2023

Transactions with California Custom Beverage, LLC, former related party

11. Transactions with California Custom Beverage, LLC, former related party

In December 2018, the Company signed a co-packing agreement with California Custom Beverage, LLC’s (“CCB”), an entity owned by Christopher J. Reed, a former related party, pursuant to which CCB agreed to produce certain products for the Company for agreed fees. The co-packing agreement, as amended, includes certain provisions for product inputs, shrinkage, and quality assurance. Also beginning in 2019, CCB agreed to pay the Company a 5% royalty through 2021 on certain private label sales made by CCB.

During the nine months ended September 30, 2023 and 2022, the Company incurred co-packing fees due to CCB of $1,127 and $2,611, respectively. As of September 30, 2023 and 2022, the aggregate of co-packing fees payable to CCB were $452 and $2,025, respectively. At September 30, 2023 and December 31, 2022, the Company had also recorded receivables from CCB of $1,315 and $1,315, respectively, including royalty receivable of $297 and $297, and charge backs of certain costs management determined were permittable under the co-packing agreement of $1,018 and $1,018, respectively.

At September 30, 2023 and December 31, 2022, accounts receivable due from and accounts payable due to CCB were as follows:

Schedule of Related Parties

	September 30, 2023			December 31, 2022
Accounts receivable, net of provision of $538 and $538 at September 30, 2023 and December 31, 2022, respectively		777			777
Accounts payable		(452	)		(2,025	)
Net (payable) receivable		325			(1,248	)

At December 31, 2022, CCB disputes that it owes $1,043 of the $1,315 recorded as receivable by the Company. The Company believes that it will prevail in this dispute, however, as of September 30, 2023 and December 31, 2022, due to the uncertainty about the ultimate amount that will be settled, the Company has provided a reserve for $538 based on management’s estimate. In addition, on April 19, 2023, the Company received a letter from CCB demanding payment of various amounts, including the $452 and $2,025 outstanding at September 30, 2023 and December 31, 2022, respectively. The Company has determined that the probability of realizing any loss on the demand from CCB is remote and therefore has not recorded any additional accruals related to the demand.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Summary of Significant Accounting Policies (Details Narrative) $ / shares in Units, $ in Thousands			3 Months Ended		9 Months Ended		12 Months Ended
	Jan. 24, 2024	Jan. 25, 2023 $ / shares	Sep. 30, 2023 USD ($) $ / shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) $ / shares	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) $ / shares	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Product Information [Line Items]
Net loss			$ 1,436	$ 3,231	$ 8,927	$ 13,288
Stockholders' deficit			12,760	$ 3,436	12,760	$ 3,436	$ 8,470	$ 11,463	$ 419	$ (4,203)
Cash			1,004		1,004		$ 533
Line of credit facility, borrowing capacity			14		14
Line of credit facility, additional borrowing capacity			$ 3,062		$ 3,062
Shipping and handling costs			2.98	3.38	3.17	4.13
Reverse stock split	1-for-6 and not more than 1-for-50	1-for-50 reverse stock split
Common stock par value \| $ / shares		$ 0.0001	$ 0.0001		$ 0.0001		$ 0.0001
Advertising costs			$ 22	$ 116	$ 82	$ 539
Customer One [Member] \| Revenue Benchmark [Member] \| Product Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage			22.00%	16.00%	19.00%	19.00%
Customer One [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage					16.00%		19.00%
Customer Two [Member] \| Revenue Benchmark [Member] \| Product Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage			14.00%	11.00%	13.00%	11.00%
Customer Two [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage					14.00%		11.00%
Customer Three [Member] \| Revenue Benchmark [Member] \| Product Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage			12.00%	10.00%		10.00%
Customer Three [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage					13.00%
Customer Four [Member] \| Accounts Receivable [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage					10.00%
Vendor One [Member] \| Revenue Benchmark [Member] \| Product Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage				18.00%		15.00%
Vendor One [Member] \| Accounts Payable [Member] \| Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk, percentage					10.00%

Secured Convertible Notes Payable (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Debt

Amounts outstanding under secured convertible notes payable are as follows (in thousands):

Schedule of Debt

	September 30, 2023			December 31, 2022
Secured Convertible Note Payable	$	14,500		$	10,450
Accrued interest (includes excess ABL fees of $2,152 and $648)		3,267			1,052
Capitalized financing costs		(666	)		(976	)
Total	$	17,101		$	10,526
Current portion		(7,380	)		(2,434	)
Long term portion	$	9,721		$	8,092

Schedule of Stock Option Activity (Details) - Equity Option [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Offsetting Assets [Line Items]
Shares Outstanding, Beginning balance	164,423
Weighted-Average Exercise Price, Outstanding, Beginning	$ 48.90
Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending	7 years	7 years 6 months 29 days
Aggregate Intrinsic Value, Shares Outstanding, Beginning
Shares, Granted	10,037
Weighted-Average Exercise Price, Granted	$ 4.50
Shares, Exercised
Weighted-Average Exercise Price, Exercised
Shares, Unvested forfeited	(10,497)
Weighted-Average Exercise Price, Unvested forfeited	$ 48.74
Shares, Vested forfeited	(18,951)
Weighted-Average Exercise Price, Vested forfeited	$ 54.59
Shares Outstanding, Ending Balance	145,012	164,423
Weighted-Average Exercise Price, Outstanding, Ending	$ 45.09	$ 48.90
Aggregate Intrinsic Value, Shares Outstanding, Ending
Shares, Exercisable	92,711
Weighted-Average Exercise Price, Exercisable Ending Balance	$ 52.71
Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance	6 years 4 months 24 days
Aggregate Intrinsic Value, Ending balance

Schedule of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Secured Convertible Note Payable	$ 14,500	$ 10,450
Accrued interest (includes excess ABL fees of $2,152 and $648)	3,267	1,052
Capitalized financing costs	(666)	(976)
Total	17,101	10,526
Current portion	(7,380)	(2,434)
Long term portion	$ 9,721	$ 8,092

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Non-vested Restricted Stock Activity

The following table summarizes restricted stock activity during the nine months ended September 30, 2023:

	Unvested Shares			Issuable Shares			Fair Value at Date of Issuance			Weighted Average Grant Date Fair Value
Balance, December 31, 2022		1,500			-		$	26.00			44.75
Granted		-			-			-			-
Vested		(750	)		750			-			-
Forfeited		(750	)		-			-			-
Issued		-			(750	)		(3.00	)		-
Balance, September 30, 2023		-			-		$	-		$	-

Schedule of Stock Option Activity

The following table summarizes stock option activity during the nine months ended September 30, 2023:

Schedule of Stock Option Activity

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		164,423		$	48.90		7.58	$	-
Granted		10,037			4.50
Exercised		-			-
Unvested forfeited		(10,497	)		48.74
Vested forfeited		(18,951	)		54.59
Outstanding at September 30, 2023		145,012		$	45.09		7.00	$	-
Exercisable at September 30, 2023		92,711		$	52.71		6.40	$	-

Transactions with California Custom Beverage, LLC, former related party (Details Narrative) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2018
Related Party Transaction [Line Items]
Provision for disputed receivable with former related party	$ 538	$ 538
California Custom Beverage, LLC [Member]
Related Party Transaction [Line Items]
Receivables		1,315
Related Party [Member]
Related Party Transaction [Line Items]
Accounts payable	452	2,025
Related Party [Member] \| California Custom Beverage, LLC [Member]
Related Party Transaction [Line Items]
Net receivable		1,043
Christopher J. Reed [Member] \| California Custom Beverage, LLC [Member]
Related Party Transaction [Line Items]
Royalty percentage				5.00%
Notes payable	452		$ 2,025
Receivables	1,315	1,315
Royalty receivable	297	297
Copacking fees	1,018	$ 1,018
Christopher J. Reed [Member] \| California Custom Beverage, LLC [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Copacking fees	$ 1,127		$ 2,611

Schedule of Potentially Dilutive Securities (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities	2,170,782	881,100
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities	549,292	250,946
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities	145,012	176,737
Convertible Notes Payable [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities	1,475,725	449,156
Unvested Restricted Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities		3,509
Common Stock Equivalent of Series A Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities	753	753

Property and Equipment (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 112	$ 79
Amortization of right-of-use assets	$ 102	$ 86

Stock Warrants (Tables)

9 Months Ended

Sep. 30, 2023

Stock Warrants

Schedule of Warrant Activity

The Company’s warrant activity during the nine months ended September 30, 2023 is as follows:

Schedule of Warrant Activity

	Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value

Outstanding at December 31, 2022		235,946	$	16.99		4.20	$	-
Granted		313,346		2.59		2.64		-
Exercised		-		-		-
Forfeited		-		-		-
Outstanding at September 30, 2023		549,292	$	8.77		3.09	$	238
Exercisable at September 30, 2023		549,292	$	8.77		3.09	$	238

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment is comprised of the following (in thousands):

Schedule of Property and Equipment

	September 30, 2023			December 31, 2022
Right-of-use assets under operating leases	$	724		$	724
Computer hardware and software		400			400
Machinery and equipment		414			429
Construction in progress		22			-
Total cost		1,560			1,553
Accumulated depreciation and amortization		(1,001	)		(787	)
Net book value	$	559		$	766

Line of Credit (Tables)

9 Months Ended

Sep. 30, 2023

Line Of Credit

Schedule of Amount Outstanding Under Credit Facilities

Amounts outstanding under the Company’s credit facilities are as follows (in thousands):

	September 30, 2023			December 31, 2022
Line of credit – Alterna Capital Solutions	$	9,939		$	11,337
Capitalized financing costs		(242	)		(363	)
Total	$	9,697		$	10,974

Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Cash flows from operating activities:
Net loss	$ (1,436)	$ (3,231)	$ (8,927)	$ (13,288)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			112	79
Loss on disposal of property and equipment			9
Amortization of debt discount			958	307
Amortization of prepaid financing costs				431
Fair value of vested options			351	448
Fair value of vested restricted shares granted to officers			3	137
Fair value of common shares issued as financing costs				37
Change in allowance for doubtful accounts			262	(152)
Inventory write-downs			(205)	35
Accrued interest			2,483	386
Changes in operating assets and liabilities:
Accounts receivable			142	(673)
Inventory			417	(2,901)
Prepaid expenses and other assets			450	(399)
Decrease in right of use assets			102	86
Accounts payable			(738)	(860)
Accrued expenses			639	(62)
Accrued dividend			(5)
Lease liabilities			(137)	(118)
Net cash used in operating activities			(4,084)	(16,507)
Cash flows from investing activities:
Trademark costs			(1)	(2)
Purchase of property and equipment			(84)
Proceeds from sale of property and equipment			68
Net cash used in investing activities			(17)	(2)
Cash flows from financing activities:
Proceeds from line of credit			32,686	40,576
Payments on line of credit			(34,085)	(41,299)
Payments of debt issuance costs				(483)
Proceeds from sale of common stock			4,016	5,034
Proceeds from convertible note payable, net of expenses			3,797	12,430
Payment of convertible note payable			(268)	(400)
Repurchase of common stock			(1)	(2)
Amounts from former related party, net			(1,573)	629
Net cash provided by financing activities			4,572	16,485
Net increase (decrease) in cash			471	(24)
Cash at beginning of period			533	49	$ 49
Cash at end of period	$ 1,004	$ 25	1,004	25	$ 533
Supplemental disclosures of cash flow information:
Cash paid for interest			548	1,051
Non -cash investing and financing activities
Dividends on Series A Convertible Preferred Stock			$ 5	$ 5

Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Accounts receivable, net of allowance	$ 514	$ 252
Property and equipment, accumulated depreciation	1,001	787
Capitalized financing costs	242	363
Debt discount current	0	414
Debt discount, noncurrent	$ 252	$ 562
Series A convertible preferred stock, par value	$ 10	$ 10
Series A convertible preferred stock, shares authorized	500,000	500,000
Series A convertible preferred stock, shares issued	9,411	9,411
Series A convertible preferred stock, shares issued	9,411	9,411
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	180,000,000	180,000,000
Common stock, shares issued	4,169,131	2,519,485
Common stock, shares outstanding	4,169,131	2,519,485

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed financial statements of Reed’s, Inc. (the “Company”, “we”, “us”, or “our”), have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. We believe that the disclosures contained in these condensed financial statements are adequate to make the information presented herein not misleading. These condensed financial statements should be read in conjunction with the financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on May 15, 2023. The accompanying condensed financial statements are unaudited, but in the opinion of management contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company’s financial position as of September 30, 2023, and the results of its operations and its cash flows for the nine months ended September 30, 2023 and 2022. The balance sheet as of December 31, 2022 is derived from the Company’s audited financial statements.

The results of operations for the nine months ended September 30, 2023 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2023.

Going Concern

Going Concern

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, for the nine months ended September 30, 2023, the Company recorded a net loss of $8,927, and at September 30, 2023, had a stockholders’ deficit of $12,760. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2022, financial statements, raised substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

As of September 30, 2023, we had a cash balance of $1,004, with $14 of current availability on the line of credit, and $3,062 of additional borrowing capacity from the credit facility.

Historically, we have financed our operations through public and private sales of common stock, issuance of preferred and common stock, convertible debt instruments, term loans and credit lines from financial institutions, and cash generated from operations. To alleviate these conditions, management is currently evaluating various funding alternatives and may seek to raise additional funds through the issuance of equity, mezzanine or debt securities, through arrangements with strategic partners or through obtaining credit from financial institutions. As we seek additional sources of financing, there can be no assurance that such financing would be available to us on favorable terms or at all. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry.

We have also taken decisive action to improve our margins, including fully outsourcing our manufacturing process, streamlining our product portfolio, negotiating improved vendor contracts and restructuring our selling prices.

Recent Trends - Market Conditions

Recent Trends - Market Conditions

Although the U.S. economy continued to grow during the third quarter of 2023, the higher inflation, the actions by the Federal Reserve to address inflation, and rising energy prices create uncertainty about the future economic environment which will continue to evolve and may impact our business in future periods. We have experienced supply chain challenges, including increased lead times, as well as inflation of raw materials, logistics and labor costs due to availability constraints and high demand. Although we regularly monitor companies in our supply chain, and use alternative suppliers when necessary and available, supply chain constraints could cause a disruption in our ability to obtain raw materials required to manufacture our products and adversely affect our operations. We expect the inflationary trends and supply chain pressures to continue throughout 2023.

During the three and nine period ended September 30, 2023, the Company experienced moderation from the elevated freight costs experienced in 2022. The average cost of shipping and handling for the three month period ended September 30, 2023, was $2.98 per case, as compared to $3.38 per case for the three month period ended September 30, 2022. The average cost of shipping and handling for the nine month period ended September 30, 2023, was $3.17 per case, as compared to $4.13 per case for the nine month period ended September 30, 2022. Although the Company has experienced decreases in freight costs over the last three quarters, in the Company’s opinion there remains a volatile environment and the Company will continue to monitor pricing and availability in transportation. Mitigation plans have been implemented to manage this risk. The Company has been negatively impacted by supply chain challenges impacting our ability to benefit from strong demand for, and increased sales of our product. The disruption caused by labor shortages, significant raw material cost inflation, logistics issues and increased freight costs, and ongoing port congestion, resulted in suppressed margins. The Company has experienced moderation in inflation and anticipates this to continue throughout 2023.

Reverse Stock Split

Reverse Stock Split

At a special meeting of shareholders held on January 24, 2023, the Company’s shareholders granted the Company’s board of directors the discretion to effect a reverse stock split of the common stock through an amendment to the Company’s Certificate of Incorporation, as amended, at a ratio of any ratio not less than 1-for-6 and not more than 1-for-50, at any time on or prior to January 24, 2024, with the exact ratio to be set at a whole number within this range by the board of directors in its sole discretion. On January 25, 2023, the Company announced that its board of directors approved a 1-for-50 reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.0001 per share.

The authorized number of shares of common stock were not affected by the reverse stock split. No fractional shares were issued in connection with the reverse stock split, as all fractional shares were rounded up to the next whole share. Accordingly, all share and per share amounts presented herein with respect to common stock have been retroactively adjusted to reflect the above-described reverse stock split for all periods presented.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Those estimates and assumptions include estimates for credit loss reserves for accounts receivable, assumptions used in valuing inventories at net realizable value, impairment testing of recorded long-term tangible and intangible assets, the valuation allowance for deferred tax assets, accruals for potential liabilities, assumptions made in valuing stock instruments issued for services, and assumptions used in valuing warrant liabilities, and assumptions used in the determination of the Company’s liquidity.

Revenue Recognition

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers (“ASC 606”). Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs upon shipment from our facilities. The Company’s performance obligations are satisfied at that time. The Company does not have any significant contracts with customers requiring performance beyond delivery, and contracts with customers contain no incentives or discounts that could cause revenue to be allocated or adjusted over time. Shipping and handling activities are performed before the customer obtains control of the goods and therefore represent a fulfilment activity rather than a promised service to the customer. All of the Company’s products are offered for sale as finished goods only, and there are no performance obligations required post-shipment for customers to derive the expected value from them.

The Company does not allow for returns, except for damaged products when the damage occurred pre-fulfilment. Damaged product returns have historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance for obligations. We assess our contracts and the reasonableness of our conclusions on a quarterly basis.

Loss per Common Share

Loss per Common Share

Basic earnings (loss) per share is computed by dividing the net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding during the year, excluding shares of unvested restricted common stock. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted earnings (loss) per share is computed by dividing the net income applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued, using the treasury stock method. Shares of restricted stock are included in the diluted weighted average number of common shares outstanding from the date they are granted. Potential common shares are excluded from the computation when their effect is antidilutive.

For the periods ended September 30, 2023 and 2022, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have had an anti-dilutive effect. The potentially dilutive securities consisted of the following:

	September 30, 2023		September 30, 2022
Warrants		549,292		250,946
Options		145,012		176,737
Convertible note payable		1,475,725		449,156
Unvested restricted common stock		-		3,509
Common stock equivalent of Series A Convertible Preferred stock		753		753
Total		2,170,782		881,100
Antidilutive Securities		2,170,782		881,100

Stock Compensation Expense

Stock Compensation Expense

The Company periodically issues stock options and restricted stock awards to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718, Compensation-Stock Compensation whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the vesting period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered.

The fair value of the Company’s stock options is estimated using the Black-Scholes-Merton Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or restricted stock, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes-Merton Option Pricing model and based on actual experience. The assumptions used in the Black-Scholes-Merton Option Pricing model could materially affect compensation expense recorded in future periods.

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred and are included in selling and marketing expense. Advertising costs for the three months ended September 30, 2023 and 2022, aggregated $22 and $116, respectively. Advertising costs for the nine months ended September 30, 2023 and 2022, aggregated $82 and $539, respectively.

Concentrations

Concentrations

Net sales. During the three months ended September 30, 2023, three customers accounted for 22%, 14%, and 12% of gross billing, respectively, and during the nine months ended September 30, 2023, two customers accounted for 19% and 13% of gross billing, respectively. During the three months ended September 30, 2022, three customers accounted for 16%, 11%, and 10% of sales, respectively, and during the nine months ended September 30, 2022, three customers accounted for 19%, 11%, and 10% of sales, respectively. No other customers exceeded 10% of sales in either period.

Accounts receivable. As of September 30, 2023, the Company had accounts receivable from four customers which comprised 16%, 14%, 13%, and 10% of its gross accounts receivable. As of December 31, 2022, the Company had accounts receivable from two customers which comprised 19% and 11% of its gross accounts receivable, respectively. No other customers exceeded 10% of gross accounts receivable in either period.

The Company utilizes co-packers to produce 100% of its products. During the nine months ended September 30, 2023 and the year ended December 31, 2022, the Company utilized six separate co-packers for most its production and bottling of beverage products in the United States. The Company has long-standing relationships with two different co-packers, and a third co-packing agreement with California Custom Beverage LLC (“CCB”), a former related party (see Note 11). Although there are other packers, a change in co-packers may cause a delay in the production process, which could ultimately affect operating results.

Purchases from vendors. During the three and nine months ended September 30, 2023 and 2022, no vendor accounted for more than 10% of all purchases. During the three months ended September 30, 2022, one vendor accounted for 18% of purchases. During the nine months ended September 30, 2022, one vendor accounted for 15% of purchases. No other vendors exceeded 10% of all purchases in either period.

Accounts payable. As of September 30, 2023, the Company’s had one vendor which comprised 10% of total accounts payable. As of December 31, 2022, no vendor accounted for more than 10% of the total accounts payable. No other vendors exceeded 10% of gross accounts payable in either period.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company uses various inputs in determining the fair value of its financial assets and liabilities and measures these assets on a recurring basis. Financial assets recorded at fair value are categorized by the level of subjectivity associated with the inputs used to measure their fair value. ASC 820 defines the following levels of subjectivity associated with the inputs:

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s assumptions.

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, short-term bank loans, accounts payable, notes payable and other payables, approximate their fair values because of the short maturity of these instruments. The carrying values of capital lease obligations and long-term financing obligations approximate their fair values because interest rates on these obligations are based on prevailing market interest rates.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2021, the FASB issued ASU 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company adopted ASU 2021-04 effective January 1, 2022. The adoption of ASU 2021-04 did not have any impact on the Company’s financial statement presentation or disclosures.

In September 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company adopted this standard effective January 1, 2023 and there was no material impact of adopting this standard on the Company’s financial statements and related disclosures.

Other recent accounting pronouncements and guidance issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

9. Stock-Based Compensation

Restricted common stock

The following table summarizes restricted stock activity during the nine months ended September 30, 2023:

	Unvested Shares			Issuable Shares			Fair Value at Date of Issuance			Weighted Average Grant Date Fair Value
Balance, December 31, 2022		1,500			-		$	26.00			44.75
Granted		-			-			-			-
Vested		(750	)		750			-			-
Forfeited		(750	)		-			-			-
Issued		-			(750	)		(3.00	)		-
Balance, September 30, 2023		-			-		$	-		$	-

The total fair value of restricted common stock vesting during the nine months ended September 30, 2023 and 2022, was $3 and $137, respectively, and is included in general and administrative expenses in the accompanying statements of operations. As of September 30, 2023, the amount of unvested compensation related to issuances of restricted common stock was $0. When calculating basic loss per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net income per share, these shares are included in weighted average common shares outstanding as of their grant date.

Stock options

The following table summarizes stock option activity during the nine months ended September 30, 2023:

Schedule of Stock Option Activity

	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Terms (Years)		Aggregate Intrinsic Value
Outstanding at December 31, 2022		164,423		$	48.90		7.58	$	-
Granted		10,037			4.50
Exercised		-			-
Unvested forfeited		(10,497	)		48.74
Vested forfeited		(18,951	)		54.59
Outstanding at September 30, 2023		145,012		$	45.09		7.00	$	-
Exercisable at September 30, 2023		92,711		$	52.71		6.40	$	-

During the nine months ended September 30, 2023, the Company approved options exercisable into 10,037 shares to be issued pursuant to Reed’s 2020 Equity Incentive Plan. 10,037 options were issued to employees, 5,016 options vesting annually over a four-year vesting period, and 5,021 options vesting based on performance criteria to be established by the board of directors.

The stock options are exercisable at a price of $4.50 per share and expire in ten years. The total fair value of these options at grant date was approximately $32, which was determined using a Black-Scholes-Merton option pricing model with the following average assumption: stock price of $4.50 share, expected term of six years, volatility of 82%, dividend rate of 0%, and weighted average risk-free interest rate of 3.59%. The expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award.

During the nine months ended September 30, 2023 and 2022, the Company recognized $351 and $448 of compensation expense relating to vested stock options. As of September 30, 2023, the aggregate amount of unvested compensation related to stock options was approximately $582 which will be recognized as an expense as the options vest in future periods through March 28, 2027.

As of September 30, 2023, the outstanding and exercisable options have no intrinsic value. The aggregate intrinsic value was calculated as the difference between the closing market price as of September 30, 2023, which was $3.26, and the exercise price of the outstanding stock options.

Condensed Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash	$ 1,004	$ 533
Accounts receivable, net of allowance of $514 and $252, respectively	5,267	5,671
Inventory, net	15,964	16,175
Prepaid expenses and other current assets	489	939
Total current assets	23,501	24,095
Property and equipment, net of accumulated depreciation of $1,001 and $787, respectively	559	766
Intangible assets	627	626
Total assets	24,687	25,487
Current liabilities:
Accounts payable	9,067	9,805
Accrued expenses	873	233
Revolving line of credit, net of capitalized financing costs of $242 and $363, respectively	9,697	10,974
Convertible notes payable, current portion, net of debt discount of $0 and $414, respectively	7,380	2,434
Current portion of lease liabilities	209	187
Total current liabilities	27,678	25,658
Convertible note payable, net of debt discount of $252 and $562, respectively, less current portion	9,721	8,092
Lease liabilities, less current portion	48	207
Total liabilities	37,447	33,957
Stockholders’ deficit:
Series A Convertible Preferred stock, $10 par value, 500,000 shares authorized, 9,411 shares issued and outstanding	94	94
Common stock, $.0001 par value, 180,000,000 shares authorized; 4,169,131 and 2,519,485 shares issued and outstanding, respectively
Additional paid in capital	119,277	114,635
Accumulated deficit	(132,131)	(123,199)
Total stockholders’ deficit	(12,760)	(8,470)
Total liabilities and stockholders’ deficit	24,687	25,487
Related Party [Member]
Current assets:
Receivable from former related party	777	777
Current liabilities:
Payable to former related party	$ 452	$ 2,025

Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2018
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Value of stock placed	$ 4,016	$ 5,034
Chris Reed [Member] \| California Custom Beverage, LLC [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Deposit of security with lessor	$ 800		$ 1,200
Number of common stock value placed	7,260
Value of stock placed	$ 24

- Definition

Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering.

+ References + Details

Stock Warrants (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	May 25, 2023	Sep. 30, 2023
Share price		$ 4.50
Securities Purchase Agreement [Member] \| DD Source of Life Holding Ltd [Member]
Share price	$ 2.585
Common shares issued for cash	1,566,732
Warrants to purchase stock	313,346
Exercise price of warrants	$ 2.50
Stock Warrants [Member]
Share price		$ 3.26
Warrant [Member]
Aggregate intrinsic value, exercisable		$ 238

Secured Convertible Notes Payable

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Secured Convertible Notes Payable

6. Secured Convertible Notes Payable

Amounts outstanding under secured convertible notes payable are as follows (in thousands):

Schedule of Debt

	September 30, 2023			December 31, 2022
Secured Convertible Note Payable	$	14,500		$	10,450
Accrued interest (includes excess ABL fees of $2,152 and $648)		3,267			1,052
Capitalized financing costs		(666	)		(976	)
Total	$	17,101		$	10,526
Current portion		(7,380	)		(2,434	)
Long term portion	$	9,721		$	8,092

Secured Convertible Note Payable

In May 2022, the Company issued $11,250 of convertible notes payable to entities affiliated with Whitebox Advisors, LLC (collectively, “Whitebox”). The notes bear interest at a rate of 10% per annum (with 5% per annum payable in cash and 5% per annum payable in kind (“PIK”) by adding such PIK interest to the principal amount of the notes), are secured by substantially all of the Company’s assets (including all of its intellectual property) and are subject to a collateral sharing agreement with ACS, the Company’s existing secured lender (see Note 5). The notes mature on May 9, 2025. In September 2022, the Company issued an additional $2,500 of convertible notes payable to Whitebox, which were repaid in full in November 2022.

Beginning in August 2022, the convertible notes payable have an amortization feature which requires the Company to make monthly payments of principal of $200 plus accrued interest, payable in cash or in shares of the Company’s common stock at the option of the Company, based on 90% of the average prices of the Company’s common stock, as defined. In February 2023, May 2023, and again in September 2023, Whitebox waived the requirement for the December 2022 to October 2023 monthly amortization payments, and they are to resume November 1, 2023. Remaining amortization payments of principal are scheduled to total approximately $400 in 2023, $2,400 in 2024, and $1,000 in 2025, leaving a principal balance of the convertible notes of approximately $7.9 million due at maturity on May 9, 2025.

The convertible notes permit indebtedness to ASC (see Note 5) as an asset based loan (“ABL”) up to $8,000. In February 2023, May 2023 and again in September 2023, Whitebox waived the Company’s covenant violation of excess ABL amounts and deferred payment of such ABL fees. At September 30, 2023, the excess ABL fees totaled $2,152 and are due November 28, 2023.

If the Company experiences a fundamental change as defined in the convertible notes, the holders of the notes have the right to require the Company to repurchase the notes for cash at a repurchase price equal to 110% (amended from 100%) of the principal amount, plus accrued interest, and among other amendments.

At December 31, 2022, the principal balance of the Notes was $10,450. In February 2023 and May 2023, the Company issued an aggregate of $4,050 of additional convertible notes to Whitebox that substantially have the same terms as the notes issued in May 2022, except the $4,050 convertible notes do not require any amortization payments, and are due November 28, 2023. At September 30, 2023, the balance of all convertible notes payable to Whitebox was $14,500.

At December 31, 2022, the balance of accrued interest was $1,052. During the nine months ended September 30, 2023, the Company recorded interest of $2,483, made up of $979 of interest on the convertible notes, and $1,504 related to the excess ABL fees. In addition, accrued interest of $268 was paid. At September 30, 2023, the balance of accrued interest was $3,267.

At December 31, 2022, the unamortized debt discount was $976. During the nine months ended September 30, 2023, the Company incurred $253 of direct costs of issuing loans and issued 82,438 shares of the Company’s common stock valued at $273 as inducement for the aforementioned waivers. These costs have been capitalized and are being amortized over the term of the convertible notes or waiver period. For the nine months ended September 30, 2023, amortization of debt discount was $820, and as of September 30, 2023, the remaining unamortized debt discount balance is $666.

The convertible notes are convertible at an initial conversion rate of 0.08306 shares of the Company’s common stock per one dollar of principal converted, or approximately $12.04 per share, subject to customary anti-dilution adjustments. In addition, if certain corporate events occur that constitute a make-whole fundamental change as defined, then the note holders are, under certain circumstances, are entitled to an increase in the conversion rate, limited to 0.12155 shares of Common Stock per one dollar of principal, or approximately $8.23 per share.

Upon conversion, holders of the convertible notes are entitled to receive an interest make-whole payment, as defined. The make-whole amount is equal to the sum of the remaining scheduled payments of interest on the convertible notes to be converted that would be due at maturity, payable, at the Company’s option in cash or in shares of common stock. The Company’s ability to settle conversions and make amortization payments and interest make-whole payments using shares of the Company’s common stock is subject to certain limitations set forth in the convertible notes.

At September 30, 2023, the Notes, including accrued interest, are convertible into 1,475,725 shares of the Company’s common stock.

For clarity, under the terms of the Notes, a holder may not convert or be issued shares of common stock to the extent such conversion or issuance would cause such holder, together with its affiliates and attribution parties and any group of which it is a member, to beneficially own a number of shares of common stock which would exceed 9.9% of our then outstanding common stock following such conversion or issuance.

The Company is subject to a registration rights agreement with Whitebox dated May 9, 2023 pursuant to which the Company registered for resale by holders all shares potentially issuable upon conversion of, or in satisfaction of amortization or interest make-whole payments with respect to the Notes.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

Property and Equipment

9 Months Ended

Sep. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment

3. Property and Equipment

Property and equipment is comprised of the following (in thousands):

Schedule of Property and Equipment

	September 30, 2023			December 31, 2022
Right-of-use assets under operating leases	$	724		$	724
Computer hardware and software		400			400
Machinery and equipment		414			429
Construction in progress		22			-
Total cost		1,560			1,553
Accumulated depreciation and amortization		(1,001	)		(787	)
Net book value	$	559		$	766

Depreciation expense for the nine months ended September 30, 2023 and 2022 was $112 and $79, respectively, and amortization of right-of-use assets for the nine months ended September 30, 2023 and 2022 was $102 and $86, respectively.

Inventory (Tables)

9 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory is valued at the lower of cost (first-in, first-out) or net realizable value, net of write downs, and is comprised of the following (in thousands):

Schedule of Inventory

	September 30, 2023		December 31, 2022
Raw materials and packaging	$	8,732	$	8,526
Finished products		7,232		7,649
Total	$	15,964	$	16,175

Stock-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of stock option shares vested	5,016
Stock options exercisable price	$ 4.50
Expiration years	10 years
Options grant date	$ 32
Stock price	$ 4.50
Expected term	6 years
Volatility	82.00%
Dividend rate	0.00%
Weighted average risk-free interest rate	3.59%
Board of Directors [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of stock option shares vested	5,021
2020 Equity Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock issued during period shares employee benefit plan	10,037
2020 Equity Incentive Plan [Member] \| Employees [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock issued during period shares employee benefit plan	10,037
Vesting period	4 years
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of restricted shares, value	$ 3	$ 137
Aggregate value of unvested compensation	$ 0
Number of stock option shares vested	750
Options grant date
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Aggregate value of unvested compensation	$ 582
Stock price	$ 3.26
Fair value of vested stock option	$ 351	$ 448

Schedule of Related Parties (Details) - Related Party [Member] - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Related Party Transaction [Line Items]
Accounts receivable, net of provision of $538 and $538 at September 30, 2023 and December 31, 2022, respectively	$ 777	$ 777
Accounts payable	(452)	(2,025)
Net (payable) receivable	$ 325	$ (1,248)

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Basis of Presentation

The results of operations for the nine months ended September 30, 2023 are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31, 2023.

Going Concern

As of September 30, 2023, we had a cash balance of $1,004, with $14 of current availability on the line of credit, and $3,062 of additional borrowing capacity from the credit facility.

Recent Trends - Market Conditions

Reverse Stock Split

Use of Estimates

Revenue Recognition

Loss per Common Share

	September 30, 2023		September 30, 2022
Warrants		549,292		250,946
Options		145,012		176,737
Convertible note payable		1,475,725		449,156
Unvested restricted common stock		-		3,509
Common stock equivalent of Series A Convertible Preferred stock		753		753
Total		2,170,782		881,100
Antidilutive Securities		2,170,782		881,100

Stock Compensation Expense

Advertising Costs

Concentrations

Fair Value of Financial Instruments

Level 1—Quoted prices in active markets for identical assets or liabilities.

Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company’s assumptions.

Recent Accounting Pronouncements

Schedule of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials and packaging	$ 8,732	$ 8,526
Finished products	7,232	7,649
Total	$ 15,964	$ 16,175

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Potentially Dilutive Securities

	September 30, 2023		September 30, 2022
Warrants		549,292		250,946
Options		145,012		176,737
Convertible note payable		1,475,725		449,156
Unvested restricted common stock		-		3,509
Common stock equivalent of Series A Convertible Preferred stock		753		753
Total		2,170,782		881,100
Antidilutive Securities		2,170,782		881,100

Schedule of Debt (Details) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
ABL fees	$ 2,152	$ 648

Line of Credit (Details Narrative) - USD ($)	1 Months Ended	9 Months Ended		12 Months Ended
Line of Credit (Details Narrative) - USD ($)	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Mar. 31, 2023
Line of Credit Facility [Line Items]
Line of credit maximum borrowing capacity		$ 3,062,000
Line of credit facility current borrowing capacity		14,000
Amortization of debt discount		958,000	$ 307,000
Alterna Capital Solutions [Member]
Line of Credit Facility [Line Items]
Debt instrument term	3 years
Line of credit maximum borrowing capacity	$ 13,000,000	3,062,000
Line of credit maximum borrowing amount outstanding	$ 400,000
Line of credit facility current borrowing capacity		14,000
Line of credit facility, interest rate description	Borrowings based on receivables bears an interest of prime plus 4.75% but not less than 8.0% (13.25% at September 30, 2023 and 12.25% at December 31, 2022). Borrowings based on inventory bears an interest of prime plus 5.25% but not less than 8.5% (13.90 % at September 30, 2023 and 12.90% at December 31, 2022). The additional over advance rider bears a rate of prime plus 12.75%, but not less than 16.00% (18.00% at September 30, 2023 and 18.00% at December 31, 2022). Additionally, the line of credit is subject to monthly monitoring fee of $1 with a minimum usage requirement on the credit facility
Line of credit					$ 1,500
Line of credit monitoring fee	$ 1,000
Direct operating costs	$ 483,000
Amortization of line of credit period	3 years
Amortization of debt discount		121,000		$ 363,000
Remaining unamortized debt discount amount		$ 242,000

Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Brand names	$ 576	$ 576
Trademarks	51	50
Total	$ 627	$ 626

Schedule of Warrant Activity (Details) - Warrant [Member] $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2023 USD ($) $ / shares shares
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares Outstanding, Beginning Balance \| shares	235,946
Weighted-Average Exercise Price, Outstanding Beginning Balance \| $ / shares	$ 16.99
Weighted-Average Remaining Contractual Terms (Years), Outstanding Beginning Balance	4 years 2 months 12 days
Aggregate Intrinsic Value, Outstanding Beginning \| $
Shares, Granted \| shares	313,346
Weighted-Average Exercise Price, Granted \| $ / shares	$ 2.59
Weighted-Average Remaining Contractual Terms (Years), Outstanding Granted	2 years 7 months 20 days
Shares, Exercised \| shares
Weighted-Average Exercise Price, Exercised \| $ / shares
Shares, Forfeited \| shares
Weighted-Average Exercise Price, Forfeited \| $ / shares
Shares Outstanding, Ending Balance \| shares	549,292
Weighted-Average Exercise Price, Outstanding Ending Balance \| $ / shares	$ 8.77
Weighted-Average Remaining Contractual Terms (Years), Outstanding Ending Balance	3 years 1 month 2 days
Aggregate Intrinsic Value, Outstanding Ending \| $	$ 238
Shares Exercisable, Ending Balance \| shares	549,292
Weighted-Average Exercise Price, Exercisable Ending Balance \| $ / shares	$ 8.77
Weighted-Average Remaining Contractual Terms (Years), Exercisable Ending Balance	3 years 1 month 2 days
Aggregate Intrinsic Value, Exercisable \| $	$ 238