FORM
OF NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE


 


	RIGHTS
    CERTIFICATE # [______] 	 	NUMBER
    OF RIGHTS: [______] 


 


THE
TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE COMPANY’S PROSPECTUS DATED [______], 2017 (THE “PROSPECTUS”)
AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM OKAPI PARTNERS, LLC, THE INFORMATION
AGENT, (212) 297-0720 OR (888) 785-6617 (TOLL FREE) OR INFO@OKAPIPARTNERS.COM.


 


REED’S,
INC.


(Incorporated
under the laws of the State of Delaware)


 


SUBSCRIPTION
RIGHTS CERTIFICATE


 


Evidencing
non-transferable Subscription Rights, each to purchase Units of REED’S, Inc.,





each Unit consisting of one share of Common
Stock and Warrant to purchase 1⁄4 share of Common Stock


Subscription
Price: $1.75 per Unit


 


THE
SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M., EASTERN TIME, ON DECEMBER 15, 2017, SUBJECT TO
EXTENSION OR EARLIER TERMINATION.


 


THIS CERTIFIES THAT the registered owner whose
name is inscribed hereon and is the owner of the number of subscription rights set forth above. Each subscription right entitles
the holder thereof to subscribe for and purchase one unit of Reed’s, Inc., a Delaware corporation, pursuant to the basic
subscription right, on the terms and subject to the conditions set forth in the Prospectus and the “Instructions as to Use
of Reed’s, Inc. Subscription Rights Certificate” accompanying this Rights Certificate. Each unit consists of one share
of common stock, par value of $0.0001, and one warrant representing the right to purchase 1⁄2 share of common stock. Holders
who fully exercise their basic subscription rights are entitled to subscribe for additional units that remain unsubscribed, subject
to proration and stock ownership limitations, as described in the Prospectus pursuant to the over-subscription privilege. The subscription
rights may be exercised by duly completing Section 1 on the reverse side hereof and by returning the full payment of the subscription
price. THE RIGHTS EVIDENCED BY NON-TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE MAY NOT BE EXERCISED UNLESS THE REVERSE SIDE HEREOF
IS PROPERLY COMPLETED AND DULY SIGNED, WITH A SIGNATURE MEDALLION GUARANTEE, IF APPLICABLE.




 


This
Rights Certificate is not valid unless countersigned by Continental Stock Transfer & Trust Company, the Subscription Agent.


 


WITNESS
the seal of Reed’s, Inc. and the signatures of its duly authorized officers.


 


Dated:
[______], 2017


 


Valentin
Stalowir, Chief Executive Officer


 


COUNTERSIGNED
AND REGISTERED:


 


By:


Continental
Stock Transfer & Trust Company


 




    	 



    	 



    

 





SECTION
1. EXERCISE OF RIGHTS TO PURCHASE


 


PLEASE
PRINT ALL INFORMATION CLEARLY AND LEGIBLY.


 


The
undersigned hereby represents, in connection with this election, that the undersigned has not since the record date entered into
any short sale or similar transaction with respect to the common stock of Reed’s, Inc. You are required initially to pay
for both the units subscribed for pursuant to the basic subscription right and the over-subscription privilege. To subscribe for
units pursuant to your basic subscription right, please complete lines (a) and (c) below. To subscribe for additional units pursuant
to your over-subscription privilege, please also complete line (b).


 


	(a)	EXERCISE
    OF BASIC SUBSCRIPTION RIGHT:


 


	Basic
    Subscription Right:	 	X	$1.75	=	$
	Number
    of Units	 	Subscription
    Price	 	Payment
    Enclosed


 


	(b)	EXERCISE
    OF OVER-SUBSCRIPTION PRIVILEGE: If you have exercised your basic subscription right in full, you may subscribe for additional
    units pursuant to your over-subscription privilege


 


	Over
    Subscription Privilege:	 	X	$1.75	=	$
	Number
    of Units	 	Subscription
    Price	 	Payment
    Enclosed


 


	(c)	TOTAL
    AMOUNT OF PAYMENT ENCLOSED $ _______________


 


	METHOD OF PAYMENT (CHECK
    ONE):	[  ]	Cashier’s
check, drawn on a U.S. Bank payable to “Continental Stock Transfer & Trust Company, as subscription agent for Reed’s
Inc.”; or
	 	 	 
	 	[  ]	Wire transfer of immediately available funds
    directly to JP Morgan Chase, 4 Metrotech Center, Brooklyn NY 11245, SWIFT CHASUS333, ABA# 021000021, Credit:
    Continental Stock Transfer & Trust Company as Subscription Agent for Reed’s Inc. Rights
    Offer, Account # 475-471873, for further credit to Reed’s Inc., and name of the registered holder.




 




    	 



    	 



    

 


SECTION
2. SIGNATURE(S)


 


IMPORTANT:
THE SIGNATURE(S) MUST CORRESPOND IN EVERY PARTICULAR, WITHOUT ALTERATION, WITH THE NAME(S) AS PRINTED ON THE FRONT OF THIS NON-TRANSFERABLE
SUBSCRIPTION RIGHTS CERTIFICATE. IF YOU ARE SIGNING ON BEHALF OF A REGISTERED STOCKHOLDER OR ENTITY YOU MUST SIGN IN YOUR LEGAL
CAPACITY WITH YOUR SIGNATURE MEDALLION GUARANTEED. YOUR GUARANTOR (BANK/BROKER) WILL REQUIRE PROOF OF YOUR AUTHORITY TO ACT. CONSULT
YOUR GUARANTOR FOR THEIR SPECIFIC REQUIREMENTS. YOU OR YOUR GUARANTOR MAY ACCESS THE SECURITIES TRANSFER ASSOCIATION (STA) RECOMMENDED
REQUIREMENTS ON-LINE AT www.stai.org.


 


	 	 	APPLY
    MEDALLION GUARANTEE STAMP HERE
	 	 	 
	Signature(s)
    of Subscriber(s)	 	 
	 	 	 
	Names(s):	 	 	 
	 	 	 
	Capacity

        (Full
        Title):
	 	 	 
	 	 	 	 	 


OVERNIGHT
DELIVERY TO THE STREET ADDRESS BELOW BEST ENSURES RECEIPT BY THE EXPIRATION DATE.


 


Return
this statement to:


 


Continental
Stock Transfer & Trust Company


1
State Street- 30th Floor


New
York, NY 10004