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): August 14, 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 August 14, 2024, Eastside Distilling, Inc. (the “Company”) issued a press release announcing financial results for the second quarter ended June 30, 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 August 14, 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: August 14, 2024

 

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

 

 

Exhibit 99.1

 

Eastside Distilling Reports Second Quarter 2024 Financial Results

 

Company to Host Conference Call at 5:00 pm ET Wednesday August 14, 2024

 

PORTLAND, Oregon, August 14, 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 second quarter financial results for the period ended June 30, 2024.

 

Second Quarter 2024 Highlights:

 

	●	Craft digitally printed a quarter-record 6.0 million cans representing a +43% increase over the prior year, increasing sales +22% for the quarter.
	●	Spirits gross profit improved +84% compared to the prior year quarter with substantial improvement in margins expected through the balance of the year.
	●	The Company’s overall operating loss decreased $0.2 million in the quarter over the prior year.

 

Financial Results

 

Gross sales for the three months ending June 30, 2024 increased to $3.1 million from $2.8 million for the three months ending June 30, 2023. Higher digital printing sales were offset by lower mobile canning and spirits sales. Spirits sales fell primarily due to lower volumes of tequila driven by a realignment of the brand with new distribution partners.

 

Gross profit for the three months ending June 30, 2024 increased to $0.2 million from $26,000 for the three months ending June 30, 2023. Consolidated gross margin was 5% and 1% for the three months ending June 30, 2024 and 2023, respectively. Craft C+P gross margin increased due to higher printed can volumes. Spirits gross margin increased due to Azuñia tequila and other cost savings on raw materials in 2024.

 

Operating costs for the three months ending June 30, 2024 decreased to $1.3 million from $1.4 million for the three months ending June 30, 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 June 30, 2024 decreased to $1.5 million from $1.6 million for the three months ending June 30, 2023.

 

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.

 

 

Second Quarter 2024 Conference Call Details

 

Date and Time: Wednesday, August 14, 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 #7830926. 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

June 30, 2024 and December 31, 2023

Dollars in thousands, except share and per share

 

		June 30, 2024				December 31, 2023
		(unaudited)
Assets
Current assets:
Cash		$	420			$	403
Trade receivables, net			1,017				559
Inventories			3,043				3,212
Prepaid expenses and other current assets			467				363
Total current assets			4,947				4,537
Property and equipment, net			4,282				4,768
Right-of-use assets			2,140				2,602
Intangible assets, net			4,798				5,005
Other assets, net			422				568
Total Assets		$	16,589			$	17,480
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		$	2,916			$	2,076
Accrued liabilities			742				575
Deferred revenue			51				88
Current portion of secured credit facilities, related party			3,323				-
Current portion of secured credit facilities, net of debt issuance costs			935				-
Current portion of notes payable			8,117				486
Current portion of notes payable, related party			92				92
Current portion of lease liabilities			909				888
Other current liability, related party			83				-
Total current liabilities			17,168				4,205
Lease liabilities, net of current portion			1,355				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			18,523				16,627
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 6,000,000 shares authorized as of June 30, 2024 and December 31, 2023; and 1,763,489 shares and 1,705,987 shares issued and outstanding as of June 30, 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 June 30, 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 June 30, 2024 and December 31, 2023			-				-
Additional paid-in capital			83,628				83,559
Accumulated deficit			(85,562	)			(82,706	)
Total stockholders’ equity (deficit)			(1,934	)			853
Total Liabilities and Stockholders’ Equity (Deficit)		$	16,589			$	17,480

 

 

Eastside Distilling, Inc. and Subsidiaries

For the Three and Six Months Ended June 30, 2024 and 2023

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

(Unaudited)

 

Consolidated Statements of Operations:

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Sales		$	3,061			$	2,757			$	5,548			$	5,636
Less customer programs and excise taxes			109				96				185				122
Net sales			2,952				2,661				5,363				5,514
Cost of sales			2,799				2,635				5,024				4,847
Gross profit			153				26				339				667
Operating expenses:
Sales and marketing expenses			262				369				513				880
General and administrative expenses			1,152				1,194				2,257				2,557
Gain on disposal of property and equipment			(79	)			(135	)			(199	)			(129	)
Total operating expenses			1,335				1,428				2,571				3,309
Loss from operations			(1,182	)			(1,402	)			(2,232	)			(2,642	)
Other income (expense), net
Interest expense			(308	)			(326	)			(556	)			(655	)
Other income			2				85				7				56
Total other income (expense), net			(306	)			(241	)			(549	)			(599	)
Loss before income taxes			(1,488	)			(1,643	)			(2,781	)			(3,241	)
Provision for income taxes			-				-				-				-
Net loss			(1,488	)			(1,643	)			(2,781	)			(3,241	)
Preferred stock dividends			(37	)			(37	)			(75	)			(75	)
Net loss attributable to common shareholders		$	(1,525	)		$	(1,680	)		$	(2,856	)		$	(3,316	)
Basic net loss per common share		$	(0.87	)		$	(1.96	)		$	(1.65	)		$	(3.94	)
Basic weighted average common shares outstanding			1,745				856				1,726				841

 

 

Eastside Distilling, Inc. and Subsidiaries

For the Three and Six Months Ended June 30, 2024 and 2023

(Dollars in thousands)

(Unaudited)

 

Segments:

 

		Three Months Ended June 30,								Six Months Ended June 30,
(Dollars in thousands)		2024				2023				2024				2023
Craft C+P
Sales		$	2,376			$	1,949			$	4,225			$	3,405
Net sales			2,332				1,904				4,146				3,381
Cost of sales			2,342				1,967				4,108				3,545
Gross profit			(10	)			(63	)			38				(164	)
Total operating expenses			738				565				1,376				1,314
Net loss		$	(745	)		$	(578	)		$	(1,335	)		$	(1,462	)
Gross margin			0	%			-3	%			1	%			-5	%
Spirits
Sales		$	685			$	808			$	1,323			$	2,231
Net sales			620				757				1,217				2,133
Cost of sales			457				668				916				1,302
Gross profit			163				89				301				831
Total operating expenses			247				358				481				880
Net loss		$	(85	)		$	(238	)		$	(176	)		$	(17	)
Gross margin			26	%			12	%			25	%			39	%
Corporate
Total operating expenses		$	350			$	505			$	714			$	1,115
Net loss		$	(658	)		$	(827	)		$	(1,270	)		$	(1,762	)

 

Adjusted EBITDA Reconciliation:

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net loss		$	(1,488	)		$	(1,643	)		$	(2,781	)		$	(3,241	)
Add:
Interest expense			308				326				556				655
Depreciation and amortization			322				410				628				817
EBITDA			(858	)			(907	)			(1,597	)			(1,769	)
Gain on disposal of property and equipment			(79	)			(135	)			(199	)			(129	)
Stock compensation			9				55				76				166
Adjusted EBITDA		$	(928	)		$	(987	)		$	(1,720	)		$	(1,732	)

 

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

 

v3.24.2.u1

Cover	Aug. 14, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 14, 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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