[FORM
OF NOTICE TO STOCKHOLDERS WHO ARE RECORD HOLDERS]

     

    REED’S,
INC.

     

    NOTICE
TO STOCKHOLDERS WHO ARE RECORD HOLDERS

    


    Up to
[           ] Shares of
Common Stock a Issuable Upon Exercise of Rights to Subscribe for

    Such
Shares at $[      ] per Share

     

    Enclosed for your consideration is a
prospectus, dated
[                ],
2009 (the “Prospectus”),
relating to the offering by Reed’s, Inc., a Delaware corporation (the “Company”) of subscription
rights (the “Rights
Offering”) to purchase shares of the Company’s common stock, par value
$0.001 per share (“Common
Stock”) by stockholders of record (“Record Date Stockholders”) as
of 5:00 p.m., New York City time, on
[              ],
2009 (the “Record
Date”).

     

    Pursuant to the offering, the Company
is issuing Rights to subscribe for up to
[            ]
shares of the Company’s Common Stock, on the terms and subject to the conditions
described in the Prospectus. The Rights may be exercised at any time during the
subscription period, which commences on
[                        ],
2009 and ends at 5:00 p.m., New York City time, on
[             ],
2009, unless extended by the Company in its sole discretion (as it may be
extended, the “Expiration
Date”). The Common Stock is presently traded on the NASDAQ Capital Market
under the symbol “REED”. The Rights are transferable and will be listed for
trading under the symbol “REEDR” during the course of this
offering.

     

    As described in the Prospectus,
Record Date Stockholders will receive one (1) Right for each share of Common
Stock owned on the Record Date.

     

    Each Right entitles the holder (the
“Rights Holders”) to
purchase one share of Common Stock at the subscription price of
$[    ] per share (the “Basic Subscription
Right”).

    


    Rights Holders who fully exercise
their Basic Subscription Right will be entitled to subscribe for additional
shares that remain unsubscribed as a result of any unexercised Basic
Subscription Right (the “Over-Subscription Right” and
together with the Basic Subscription Right, the “Rights”). Each
Over-Subscription Right entitles the holder to subscribe for an additional
amount equal to up to 400% of the shares of Common Stock for which such holder
was otherwise entitled to subscribe (calculated prior to the exercise of any
rights). If sufficient remaining shares of Common Stock are available, all
over-subscription requests will be honored in full. If requests for shares of
Common Stock pursuant to the Over-Subscription Right exceed the remaining shares
of Common Stock available, the remaining shares of Common Stock will be
allocated pro-rata among Rights Holders who over-subscribe based on the number
of Rights then held. Rights may only be exercised for whole numbers of shares;
no fractional shares of Common Stock will be issued in the Rights
Offering.

     

    The rights will be evidenced by
subscription rights certificates (the “Subscription
Certificates”).

     

    Enclosed are copies of the following
documents:

    


    
      	 
      	
              1.

            	
              Prospectus,
      dated
      [                  ],
      2009;

            


    

    


    
      	 
      	
              2.

            	
              Subscription
      Certificate; and

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 
      	
              3.

            	
              A
      return envelope, addressed to
      [                                ]
      (the “Subscription
      Agent”).

            


    

     

    Your prompt attention is requested.
To exercise your Rights, you should properly complete and sign the Subscription
Certificate and forward it, with payment of the subscription price in full for
each share of Common Stock subscribed for pursuant to the Basic Subscription
Right and the Over-Subscription Right to the Subscription Agent, as indicated on
the Subscription Certificate. The Subscription Agent must receive the properly
completed and duly executed Subscription Certificate and full payment at or
prior to 5:00 p.m., New York City time, on the Expiration Date.

     

    You will have no right to rescind
your subscription after receipt of your payment of the subscription price,
except as described in the Prospectus. Rights not exercised at or prior to 5:00
p.m., New York City time, on the Expiration Date will expire.

     

    ANY QUESTIONS OR REQUESTS FOR
ASSISTANCE CONCERNING THE RIGHTS OFFERING SHOULD BE DIRECTED TO MACKENZIE
PARTNERS, INC., THE INFORMATION AGENT, TOLL-FREE AT THE FOLLOWING TELEPHONE
NUMBER: (800) 322-2885.