Eastside Distilling Completes Private Placement Offering

On November 14, 2024, Eastside Distilling, Inc. (NASDAQ: EAST) finalized a private placement offering, according to an 8-K filing with the Securities and Exchange Commission. Investors purchased $1,938,000 in Senior Secured Notes and Pre-Funded Warrants, generating total gross proceeds of $1,615,000 for the company. The offering, which included the sale of 363,602 shares of Common Stock, was conducted through a Securities Purchase Agreement with accredited investors.

The net proceeds from the offering are earmarked for various purposes, including working capital and general corporate expenses. The Senior Secured Notes have a maturity date of 120 days from issuance and were issued at an original issue discount of 20%. These notes do not accrue interest unless triggered by specific events of default, at which point they would bear interest at a rate of 18% per annum. In the case of default, an additional one-time interest payment of 30% may be required.

Furthermore, the Warrants issued as part of the offering have a term of five years and are exercisable at $0.50 per share. These Warrants will become exercisable upon shareholder approval of the corresponding Common Stock issuance and an increase in the company’s authorized Common Stock.

Eastside Distilling is obligated to hold a shareholder meeting within 150 days of the Offering’s closing to seek approval for the issuance of Common Stock tied to the Warrants. Additionally, the company entered into various agreements to secure its obligations under the Offering, including a Shareholder Pledge Agreement and a Security and Pledge Agreement.

Joseph Gunnar & Co., LLC served as the placement agent for the transaction, receiving a commission of $115,908 and reimbursement of $50,000 in legal fees. Various forms of side letters were also disclosed, outlining arrangements allowing conversion of preferred stocks and issuance of additional equity in the company.

In a separate disclosure on November 15, 2024, Eastside Distilling issued a press release announcing the completion of the offering. The company reiterated its commitment to delivering quality craft spirits and highlighted its recent merger with Beeline Financial Holdings, Inc., a technology-driven mortgage lender.

For detailed information on the terms of the securities offered and the transactions involved, interested parties are directed to the full text of the filed documents. The Company’s utilization of the net proceeds is planned to encompass working capital and general corporate expenses, along with other corporate needs.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Eastside Distilling’s 8K filing here.

About Eastside Distilling

Eastside Distilling, Inc manufactures, acquires, blends, bottles, imports, exports, markets, and sells various alcoholic beverages. It operates through two segments, Spirits and Craft Canning + Printing. The company provides whiskey under the Burnside Whiskey brand; vodka under the Portland Potato Vodka brand; rum under the Hue-Hue Coffee Rum brand; and tequila under the Azuñia Tequila brand.