EAST Eastside Distilling Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): May 13, 2024

 

EASTSIDE DISTILLING, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		001-38182		20-3937596
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

2321 NE Argyle Street, Unit D

Portland, Oregon 97211

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (971) 888-4264

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Common Stock, $0.0001 par value		EAST		The Nasdaq Stock Market LLC
(Title of Each Class)		(Trading Symbol)		(Name of Each Exchange on Which Registered)

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (CFR §240.12b-2 of this chapter). Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On May 13, 2024, Eastside Distilling, Inc. (the “Company”) issued a press release announcing financial results for the first quarter ended March 31, 2024. The text of the press release is furnished as Exhibit 99.1 to this current report.

 

The information in this Item 2.02 and Exhibit 99.1 hereto shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, the information contained in this Item 2.02 and Exhibit 99.1 hereto shall not be incorporated by reference into any Company filing, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

 

Exhibit		Description
99.1		Press Release dated May 13, 2024
104		Cover page interactive data file (embedded within the iXBRL document)

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 13, 2024

 

	EASTSIDE DISTILLING, INC.
	By:	/s/ Geoffrey Gwin
		Geoffrey Gwin
		Chief Executive Officer and Chief Financial Officer

 

 

Exhibit 99.1

 

Eastside Distilling Reports First Quarter 2024 Financial Results

 

Company to Host Conference Call at 5:00 pm ET Monday May 13, 2024

 

PORTLAND, Oregon, May 13, 2024 /PRNewswire/ — Eastside Distilling, Inc. (NASDAQ: EAST) (“Eastside” or the “Company”), a consumer-focused beverage company that builds craft inspired experiential brands and high-quality artisanal products around premium spirits, digital can printing, co-packing and mobile filling, reported first quarter financial results for the period ended March 31, 2024.

 

First Quarter 2024 Highlights:

 

	●	Craft digitally printed a quarter-record 4.8 million cans representing a +320% increase over the prior year
	●	Both operating segments made improvements in the quarter over the prior year excluding barrel sales at Spirits
	●	Company decreased operating costs over $0.6 million

 

Financial Results

 

Gross sales for the three months ending March 31, 2024 decreased to $2.5 million from $2.9 million for the three months ending March 31, 2023. Higher digital printing sales were offset by lower mobile canning and spirits sales. Spirits sales fell due primarily to the Company’s bulk sale of 250 barrels for gross proceeds of $0.6 million during the three months ended March 31, 2023.

 

Gross profit for the three months ending March 31, 2024 decreased to $0.2 million from $0.6 million for the three months ending March 31, 2023. Consolidated gross margin was 8% and 22% for the three months ending March 31, 2024 and 2023, respectively. Craft C+P gross margin increased due to higher printed can volumes. Spirits gross margin decreased due to gross profit of $0.5 million from bulk sales of barrels during the three months ended March 31, 2023.

 

Operating costs for the three months ending March 31, 2024 decreased to $0.2 million from $0.6 million for the three months ending March 31, 2023 primarily due to decreased headcount and lower professional fees and sponsorship costs. The Company continues its broad restructuring in spirits as it realigns investment focusing on the most profitable spirits brands and regions.

 

Net loss for the three months ending March 31, 2024 decreased to $1.3 million from $1.6 million for the three months ending March 31, 2023. The Company reported improved EBITDA of $(0.7) million and $(0.9) million for the three months ending March 31, 2024 and 2023, respectively. Craft’s EBITDA loss improved to $(0.3) million. Spirits reported EBITDA of $(0.1) million in the quarter. (See description of EBITDA in “Use of Non-GAAP Measures” below.)

 

The Company will give further updates on its earnings conference call.

 

Use of Non-GAAP Measures

 

Eastside Distilling’s management evaluates and makes operating decisions using various financial metrics. In addition to the Company’s GAAP results, management also considers the non-GAAP measure of adjusted EBITDA as a supplement to GAAP results. Management believes this non-GAAP measure provides useful information about the Company’s operating results and assists investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding items that it does not believe are indicative of its core operating performance.

 

The Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation, and other one-time items. The final table below provides a reconciliation of this non-GAAP financial measure with the most directly comparable GAAP financial measure.

 

 

First Quarter 2024 Conference Call Details

 

Date and Time: Monday, May 13, 2024 at 5:00 pm ET

 

Call-in Information: Interested parties can access the conference call by dialing (844) 889-4332 or (412) 717-9595.

 

Live Webcast Information: Interested parties can access the conference call via a live Internet webcast, which is available in the Conference Calls section of the Company’s website at https://www.eastsidedistilling.com/conference-calls.

 

Replay: A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, replay access code #10189029. A webcast replay will be available in the Conference Calls section of the Company’s website at https://www.eastsidedistilling.com/conference-calls for 90 days.

 

About Eastside Distilling

 

Eastside Distilling, Inc. (NASDAQ: EAST) has been producing high-quality, award-winning craft spirits in Portland, Oregon since 2008. The Company is distinguished by its highly decorated product lineup that includes Azuñia Tequilas®, Burnside Whiskeys®, Hue-Hue Coffee Rum®, and Portland Potato Vodkas®. All Eastside spirits are crafted from natural ingredients for highest quality and taste. Eastside’s Craft Canning + Printing subsidiary is one of the Northwest’s leading independent mobile canning, co-packing and digital can printing businesses.

 

Important Cautions Regarding Forward-Looking Statements

 

Certain matters discussed in this press release may be forward-looking statements that reflect our expectations or anticipations rather than historical fact. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions, general competitive factors, the Company’s ongoing financing requirements and ability to achieve financing, acceptance of the Company’s products in the market, the Company’s success in obtaining new customers, the Company’s ability to execute its business model and strategic plans, and other risks and related information described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). A detailed discussion of the most significant risks can be found in the “Risk Factors” section of the Company’s Annual Report on Form 10-K. The Company assumes no obligation to update the cautionary information in this press release.

 

Financial Summary Tables

 

The following financial information should be read in conjunction with the audited financial statements and accompanying notes filed by the Company with the Securities and Exchange Commission on Form 10-K for the period ended December 31, 2023, which can be viewed at www.sec.gov and in the investor relations section of the Company’s website at www.eastsidedistilling.com/investors.

 

 

Eastside Distilling, Inc. and Subsidiaries

Consolidated Balance Sheets

March 31, 2024 and December 31, 2023

Dollars in thousands, except share and per share

 

		March 31, 2024				December 31, 2023
		(unaudited)
Assets
Current assets:
Cash		$	336			$	403
Trade receivables, net			673				559
Inventories			3,189				3,212
Prepaid expenses and other current assets			498				363
Total current assets			4,696				4,537
Property and equipment, net			4,571				4,768
Right-of-use assets			2,388				2,602
Intangible assets, net			4,902				5,005
Other assets, net			465				568
Total Assets		$	17,022			$	17,480
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		$	2,392			$	2,076
Accrued liabilities			739				575
Deferred revenue			66				88
Current portion of secured credit facilities, related party			2,680				-
Current portion of secured credit facilities, net of debt issuance costs			364				-
Current portion of notes payable			8,079				486
Current portion of notes payable, related party			92				92
Current portion of lease liabilities			903				888
Other current liability, related party			587				-
Total current liabilities			15,902				4,205
Lease liabilities, net of current portion			1,596				1,824
Secured credit facilities, related party			-				2,700
Secured credit facilities, net of debt issuance costs			-				342
Notes payable, net of current portion			-				7,556
Total liabilities			17,498				16,627
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 6,000,000 shares authorized as of March 31, 2024 and December 31, 2023; and 1,707,751 shares and 1,705,987 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively			-				-
Preferred stock, $0.0001 par value; 100,000,000 shares authorized; 2,500,000 Series B shares issued and outstanding as of both March 31, 2024 and December 31, 2023			-				-
Preferred stock, $0.0001 par value; 240,000 shares authorized; 200,000 Series C shares issued and outstanding as of both March 31, 2024 and December 31, 2023			-				-
Additional paid-in capital			83,561				83,559
Accumulated deficit			(84,037	)			(82,706	)
Total stockholders’ equity (deficit)			(476	)			853
Total Liabilities and Stockholders’ Equity (Deficit)		$	17,022			$	17,480

 

 

Eastside Distilling, Inc. and Subsidiaries

For the Three Months Ended March 31, 2024 and 2023

(Dollars and shares in thousands, except per share amounts)

(Unaudited)

 

Consolidated Statements of Operations:

 

		2024				2023
Sales		$	2,487			$	2,879
Less customer programs and excise taxes			76				26
Net sales			2,411				2,853
Cost of sales			2,225				2,212
Gross profit			186				641
Operating expenses:
Sales and marketing expenses			251				511
General and administrative expenses			1,105				1,364
(Gain) loss on disposal of property and equipment			(120	)			6
Total operating expenses			1,236				1,881
Loss from operations			(1,050	)			(1,240	)
Other income (expense), net
Interest expense			(248	)			(329	)
Other income (expense)			5				(29	)
Total other expense, net			(243	)			(358	)
Loss before income taxes			(1,293	)			(1,598	)
Provision for income taxes			-				-
Net loss			(1,293	)			(1,598	)
Preferred stock dividends			(38	)			(38	)
Net loss attributable to common shareholders		$	(1,331	)		$	(1,636	)
Basic and diluted net loss per common share		$	(0.78	)		$	(2.00	)
Basic and diluted weighted average common shares outstanding			1,706				824

 

 

Eastside Distilling, Inc. and Subsidiaries

For the Three Months Ended March 31, 2024 and 2023

(Dollars in thousands)

(Unaudited)

 

Segments:

 

(Dollars in thousands)		2024				2023
Craft C+P
Sales		$	1,849			$	1,456
Net sales			1,814				1,477
Cost of sales			1,765				1,578
Gross profit			49				(101	)
Total operating expenses			638				749
Net loss			(590	)			(884	)
Gross margin			3	%			-7	%
Interest expense		$	-			$	4
Depreciation and amortization			270				368
Significant noncash items:
(Gain) loss on disposal of property and equipment			(120	)			6
Spirits
Sales		$	638			$	1,423
Net sales			597				1,376
Cost of sales			460				634
Gross profit			137				742
Total operating expenses			234				522
Net income (loss)			(92	)			221
Gross margin			23	%			54	%
Depreciation and amortization		$	36			$	39
Corporate
Total operating expenses		$	364			$	610
Net loss			(611	)			(935	)
Interest expense		$	248			$	325
Significant noncash items:
Stock compensation			67				111

 

Adjusted EBITDA Reconciliation:

 

		Three Months Ended March 31,
		2024				2023
Net loss		$	(1,293	)		$	(1,598	)
Add:
Interest expense			248				329
Depreciation and amortization			306				407
EBITDA			(739	)			(862	)
(Gain) loss on disposal of property and equipment			(120	)			6
Stock compensation			67				111
Adjusted EBITDA		$	(792	)		$	(745	)

 

INVESTOR RELATIONS CONTACT: ir@eastsidedistilling.com

This information is being distributed to you by: Eastside Distilling, Inc.

2321 NE Argyle Street, Unit D, Portland, Oregon 97211

 

v3.24.1.1.u2

Cover	May 13, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 13, 2024
Entity File Number	001-38182
Entity Registrant Name	EASTSIDE DISTILLING, INC.
Entity Central Index Key	0001534708
Entity Tax Identification Number	20-3937596
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	2321 NE Argyle Street
Entity Address, Address Line Two	Unit D
Entity Address, City or Town	Portland
Entity Address, State or Province	OR
Entity Address, Postal Zip Code	97211
City Area Code	(971)
Local Phone Number	888-4264
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Trading Symbol	EAST
Security Exchange Name	NASDAQ
Title of 12(g) Security	Common Stock, $0.0001 par value
Entity Emerging Growth Company	false

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