REED'S, INC. Leases Disclosure
7. Lease Liabilities
The Company determines whether a contract is, or contains, a lease at inception. Right-of-use assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at lease commencement based upon the estimated present value of unpaid lease payments over the lease term. The Company leases its headquarters office, and certain office equipment and automobiles. Leases with an initial term of 12 months or less are not included on the balance sheets.
In May 2024, the Company entered into a long-term non-cancellable lease agreement for its new office facility that requires aggregate average monthly payments of $9 beginning December 2024. The lease terminates in November 2035. The Company classified the lease as an operating lease and determined that the value of the right of use asset and lease liability at the adoption date was $835, using a discount rate of 8.00%.
During the year ended December 31, 2024, the Company made aggregate payments of $205 towards its operating lease liability. As of December 31, 2024, operating lease liabilities totaled $837. During the year ended December 31, 2025, the Company made payments of $60 towards its operating lease liability. As of December 31, 2025, operating lease liabilities totaled $843, of which $40 was current. The Company’s right of use assets are presented as part of property and equipment (see Note 3).
During the years ended December 31, 2025, and 2024, lease costs totaled $46 and $134, respectively.
Future minimum lease payments under the leases are as follows (in thousands):
| Years Ending December 31, | Amounts | |||
| 2026 | $ | 98 | ||
| 2027 | 93 | |||
| 2028 | 96 | |||
| 2029 | 109 | |||
| Thereafter | 781 | |||
| Total payments | 1,177 | |||
| Less: Amount representing interest | (334 | ) | ||
| Present value of net minimum lease payments | 843 | |||
| Less: Current portion | 40 | |||
| Non-current portion | $ | 803 | ||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 25, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
| 2023 | Apr 1, 2024 | |
| 2022 | May 15, 2023 | |
| 2021 | Apr 15, 2022 | |
| 2020 | Mar 30, 2021 | |
| 2019 | Mar 18, 2020 | |
| 2018 | Apr 1, 2019 | |
| 2017 | Apr 2, 2018 | |
| 2016 | Apr 24, 2017 | |
| 2015 | Mar 23, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.