Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the quarterly period ended September 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from ______________ to _________________

Commission File No.: 001-38182

EASTSIDE DISTILLING, INC.

(Exact name of registrant as specified in its charter)

Nevada

20-3937596

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

755 Main Street, Building 4, Suite 3

Monroe, CT 06468

(Address of principal executive offices)

Registrant’s telephone number: (484) 800-9154

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)

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 day. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 if the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☐	Smaller reporting company ☒
Emerging growth company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes ☐ No ☒

As of November 15, 2024, 4,991,065 shares of our common stock were outstanding.

Documents Incorporated by Reference: None.

EASTSIDE DISTILLING, INC.

FORM 10-Q

September 30, 2024

TABLE OF CONTENTS

		Page
PART I— FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	3
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	4
	Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2024 and 2023	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	6
	Notes to the Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4	Controls and Procedures	32

PART II— OTHER INFORMATION		32

Item 1	Legal Proceedings	32
Item 1A	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	33

SIGNATURES		34

PART I: FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

Eastside Distilling, Inc. and Subsidiaries

Consolidated Balance Sheets

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

	September 30, 2024			December 31, 2023
	(unaudited)
Assets
Current assets:
Cash	$	310		$	306
Trade receivables, net		105			163
Inventories		1,793			2,686
Prepaid expenses and other current assets		176			113
Current assets held for sale		2,640			1,269
Total current assets		5,024			4,537
Property and equipment, net		112			169
Right-of-use assets		430			680
Intangible assets, net		4,178			4,178
Other assets, net		182			247
Non-current assets held for sale		6,298			7,669
Total Assets	$	16,224		$	17,480

Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	1,388		$	1,062
Accrued liabilities		418			465
Current portion of secured credit facilities, related party		3,447			-
Current portion of secured credit facilities, net of debt issuance costs		728			-
Current portion of notes payable		8,155			486
Current portion of notes payable, related party		92			92
Current portion of lease liabilities		191			223
Other current liability, related party		85			-
Current liabilities held for sale		3,124			1,877
Total current liabilities		17,628			4,205
Lease liabilities, net of current portion		213			458
Secured credit facilities, related party		-			2,700
Secured credit facilities, net of debt issuance costs		-			342
Notes payable, net of current portion		-			7,556
Non-current liabilities held for sale		843			1,366
Total liabilities		18,684			16,627

Commitments and contingencies (Note 14)		-			-

Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 6,000,000 shares authorized as of September 30, 2024 and December 31, 2023; and 3,140,625 shares and 1,705,987 shares issued and outstanding as of September 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 September 30, 2024 and December 31, 2023		-			-
Preferred stock, $0.0001 par value; 240,000 shares authorized; 117,586 Series C shares and 200,000 Series C shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		-			-
Preferred stock, value		-			-

Additional paid-in capital		84,499			83,559
Accumulated deficit		(86,959	)		(82,706	)
Total stockholders’ equity (deficit)		(2,460	)		853
Total Liabilities and Stockholders’ Equity (Deficit)	$	16,224		$	17,480

The accompanying notes are an integral part of these consolidated financial statements.

Eastside Distilling, Inc. and Subsidiaries

Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2024 and 2023

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

(Unaudited)

	2024			2023			2024			2023
	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023

Sales	$	783		$	849		$	2,106		$	3,080
Less customer programs and excise taxes		23			43			129			141
Net sales		760			806			1,977			2,939
Cost of sales		560			638			1,476			1,940
Gross profit		200			168			501			999
Operating expenses:
Sales and marketing expenses		218			303			699			1,180
General and administrative expenses		435			172			1,149			1,287
(Gain) loss on disposal of property and equipment		(1	)		-			(1	)		3
Total operating expenses		652			475			1,847			2,470
Loss from operations		(452	)		(307	)		(1,346	)		(1,471	)
Other income (expense), net
Interest expense		(409	)		(203	)		(965	)		(850	)
Loss on debt to equity conversion		-			(1,321	)		-			(1,321	)
Other income		33			25			37			57
Total other income (expense), net		(376	)		(1,499	)		(928	)		(2,114	)
Loss before income taxes		(828	)		(1,806	)		(2,274	)		(3,585	)
Provision for income taxes		-			-			-			-
Net loss from continuing operations		(828	)		(1,806	)		(2,274	)		(3,585	)
Net loss from discontinued operations		(531	)		(350	)		(1,866	)		(1,812	)
Net loss		(1,359	)		(2,156	)		(4,140	)		(5,397	)
Preferred stock dividends		(38	)		(38	)		(113	)		(113	)
Net loss attributable to common shareholders	$	(1,397	)	$	(2,194	)	$	(4,253	)	$	(5,510	)

Basic net loss per common share	$	(0.66	)	$	(2.00	)	$	(2.28	)	$	(5.93	)
Basic weighted average common shares outstanding		2,116			1,097			1,862			929

The accompanying notes are an integral part of these consolidated financial statements.

Eastside Distilling, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity (Deficit)

For the Three and Nine months ended September 30, 2024 and 2023

(Dollars and shares in thousands)

(Unaudited)

	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			(Deficit)
	Series B Preferred Stock				Series C Preferred Stock				Common Stock				Paid-in		Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			(Deficit)
Balance, December 31, 2022		2,500	$	-		-	$	-		810	$	-	$	73,505	$	(75,021	)	$	(1,516	)
Issuance of common stock for services by third parties		-		-		-		-		11		-		83		-			83
Issuance of common stock for services by employees		-		-		-		-		12		-		60		-			60
Preferred stock dividends		-		-		-		-		-		-		-		(38	)		(38	)
Net loss		-		-		-		-		-		-		-		(1,598	)		(1,598	)
Balance, March 31, 2023		2,500	$	-		-	$	-		833	$	-	$	73,648	$	(76,657	)	$	(3,009	)
Shares issued for cash		-		-		-		-		135		-		651		-			651
Preferred stock dividends		-		-		-		-		-		-		-		(37	)		(37	)
Net loss		-		-		-		-		-		-		-		(1,643	)		(1,643	)
Balance, June 30, 2023		2,500	$	-		-	$	-		968	$	-	$	74,299	$	(78,337	)	$	(4,038	)
Issuance of common stock for services by third parties		-		-		-		-		121		-		373		-			373
Issuance of common stock for services by employees		-		-		-		-		11		-		33		-			33
Shares issued for cash		-		-		-		-		141		-		649		-			649
Debt to equity conversion		-		-		200		-		297		-		7,831		-			7,831
Preferred stock dividends		-		-		-		-		-		-		-		(38	)		(38	)
Net loss		-		-		-		-		-		-		-		(2,156	)		(2,156	)
Balance, September 30, 2023		2,500	$	-		200	$	-		1,538	$	-	$	83,185	$	(80,531	)	$	2,654

	Series B Preferred Stock				Series C Preferred Stock					Common Stock				Paid-in		Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares			Amount		Shares		Amount		Capital		Deficit			(Deficit)
Balance, December 31, 2023		2,500	$	-		200		$	-		1,706	$	-	$	83,559	$	(82,706	)	$	853
Issuance of common stock for services by third parties		-		-		-			-		2		-		2		-			2
Preferred stock dividends		-		-		-			-		-		-		-		(38	)		(38	)
Net loss		-		-		-			-		-		-		-		(1,293	)		(1,293	)
Balance, March 31, 2024		2,500	$	-		200		$	-		1,708	$	-	$	83,561	$	(84,037	)	$	(476	)
Issuance of common stock for services by third parties		-		-		-			-		-		-		-		-			-
Issuance of common stock for services by employees		-		-		-			-		55		-		67		-			67
Preferred stock dividends		-		-		-			-		-		-		-		(37	)		(37	)
Net loss		-		-		-			-		-		-		-		(1,488	)		(1,488	)
Balance, June 30, 2024		2,500	$	-		200		$	-		1,763	$	-	$	83,628	$	(85,562	)	$	(1,934	)
Balance		2,500	$	-		200		$	-		1,763	$	-	$	83,628	$	(85,562	)	$	(1,934	)
Shares issued for cash, net of issuance costs		-		-		-			-		442		-		392		-			392
Common stock issued for conversion of Series C Preferred shares		-		-		(82	)		-		757		-		-		-			-
Warrants issued in relation to debt issuance		-		-		-			-		-		-		329		-			329
Preferred stock dividends		-		-		-			-		178		-		150		(38	)		112
Net loss attributable to common shareholders		-		-		-			-		-		-		-		(1,359	)		(1,359	)
Net loss		-		-		-			-		-		-		-		(1,359	)		(1,359	)
Balance, September 30, 2024		2,500	$	-		118		$	-		3,140	$	-	$	84,499	$	(86,959	)	$	(2,460	)
Balance		2,500	$	-		118		$	-		3,140	$	-	$	84,499	$	(86,959	)	$	(2,460	)

The accompanying notes are an integral part of these consolidated financial statements.

Eastside Distilling, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30, 2024 and 2023

(Dollars in thousands)

(Unaudited)

	2024			2023
Cash Flows From Operating Activities:
Net loss	$	(4,140	)	$	(5,397	)
Net loss from discontinued operations		1,866			1,812
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		99			114
Bad debt expense		-			19
Impairment loss		-			(25	)
(Gain) loss on disposal of assets		(1	)		3
Inventory reserve		(2	)		(8	)
Loss on debt to equity conversion		-			1,321
Stock dividend payable		-			(113	)
Amortization of debt issuance costs		236			-
Interest accrued to secured credit facilities		27			71
Interest accrued to notes payable		481			-
Payment of accrued interest on secured credit facilities		-			(142	)
Interest accrued to secured credit facilities, related party		183			-
Payment of accrued interest on secured credit facilities, related party		(81	)		-
Interest accrued for amounts due to related parties		-			348
Payment of accrued interest on amounts due to related parties		-			(348	)
Issuance of common stock for services by third parties		2			94
Issuance of common stock for services by employees		67			456
Changes in operating assets and liabilities:
Trade receivables, net		59			54
Inventories		259			597
Prepaid expenses and other assets		(1	)		(48	)
Right-of-use assets		250			233
Accounts payable		(39	)		93
Accrued liabilities		(47	)		(632	)
Other liabilities, related party		81			556
Net lease liabilities		(276	)		(236	)
Net cash used in operating activities of continuing operations		(977	)		(1,178	)
Net cash used in operating activities of discontinued operations		(626	)		(541	)
Net cash used in operating activities		(1,603	)		(1,719	)
Cash Flows From Investing Activities:
Proceeds from sale of fixed assets		-			51
Purchases of property and equipment		-			(60	)
Net cash used in investing activities of continuing operations		-			(9	)
Net cash provided by (used in) investing activities of discontinued operations		114			(111	)
Net cash provided by (used in) investing activities		114			(120	)
Cash Flows From Financing Activities:
Proceeds from issuance of stock		393			1,300
Proceeds from secured credit facilities		1,100			56
Net cash provided by financing activities		1,493			1,356
Net increase (decrease) in cash		4			(483	)
Cash at the beginning of the period		306			612
Cash at the end of the period	$	310		$	129

Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest	$	12		$	1,056
Cash paid for amounts included in measurement of lease liabilities	$	234		$	254

Supplemental Disclosure of Non-Cash Financing Activity
Dividends issued	$	150		$	-
Warrants issued in relation to debt issuance	$	329		$	-
Debt exchanged for equity	$	-		$	6,510
Accrued interest rolled into notes payable	$	-		$	241

The accompanying notes are an integral part of these consolidated financial statements.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

1. Description of Business

Eastside Distilling (the “Company” or “Eastside Distilling”) was incorporated under the laws of Nevada in 2004 under the name of Eurocan Holdings, Ltd. In December 2014, the Company changed its corporate name to Eastside Distilling, Inc. to reflect the acquisition of Eastside Distilling, LLC. On September 4, 2024, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with East Acquisition Sub Inc. (“Merger Sub”) and Beeline Financial Holdings, Inc. (“Beeline”). The Merger closed on October 7, 2024. Beeline is a mortgage technology company that operates an end-to-end, all-digital, AI-enhanced platform for homeowners and property investors. The Company currently employs 88 people in the United States, including Beeline’s employees and excluding Craft Canning + Printing (“Craft C+P”) employees.

On September 4, 2024, the Company and its subsidiary, Craft C+P, entered into a Debt Exchange Agreement (the “Debt Agreement”), which closed on October 7, 2024, resulting in the assignment by the Company of 720 barrels of spirits to Craft C+P, followed by the merger of Craft C+P into a limited liability company owned by certain creditors of the Company. Given that the effect of the Debt Agreement meets all the initial criteria of ASC Topic 205-20, Presentation of Financial Statements – Discontinued Operations for the classification of held for sale, the assets, liabilities, and operating results of Craft C+P have been classified as held for sale as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023. The consolidated financial statements for the prior periods have been adjusted to reflect comparable information.

Subsequent to the execution of the Debt Agreement, the Company organized a subsidiary named “Bridgetown Spirits Corp.” (“Bridgetown”), which was incorporated on October 3, 2024, and assigned to Bridgetown the Company’s business of manufacturing and marketing spirits. Bridgetown manufactures, acquires, blends, bottles, imports, markets and sells a wide variety of alcoholic beverages under recognized brands. Bridgetown’s brands span several alcoholic beverage categories, including whiskey, vodka, rum, and tequila. Bridgetown sells products on a wholesale basis to distributors in open states and through brokers in control states.

2. Liquidity

Through September 30, 2024, the Company’s primary capital requirements have been for cash used in operating activities and for the repayment of debt. Funds for the Company’s cash and liquidity needs have historically not been generated from operations but rather from loans as well as from convertible debt and equity financing. The Company has been dependent on raising capital from debt and equity financing to meet the Company’s operating needs.

The Company had an accumulated deficit of $87.0 million as of September 30, 2024, having incurred a net loss of $4.1 million during the nine months ended September 30, 2024.

On October 7, 2024, the Company satisfied all of its secured debt and $2.5 million of unsecured debt by assigning ownership of its subsidiary, Craft C+P, to the creditors of that debt, who additionally surrendered to the Company 44,279 shares of Series C Preferred Stock. The transaction substantially reduced the Company’s debt obligations. On the same day, Beeline merged into a wholly-owned subsidiary of the Company. Beeline used $8.6 million in operating activities during 2023 and $10.1 million in operating activities during the first six months of 2024, funds that it obtained from a variety of debt and equity financing transactions.

The Company’s ability, therefore, to meet its ongoing operating cash needs over the next 12 months will depend in part on generating positive operating cash flow through increased sales. However, the Company will continue to depend, for the foreseeable future, on debt and/or equity financing. If the Company is unable to obtain additional financing, or additional financing is not available on acceptable terms, the Company may seek to sell assets, reduce operating expenses, reduce or eliminate marketing initiatives, and take other measures that could impair its ability to be successful.

Although the Company’s audited financial statements for the year ended December 31, 2023 were prepared under the assumption that it would continue operations as a going concern, the report of its independent registered public accounting firm that accompanied the financial statements for the year ended December 31, 2023 contained a going concern explanatory paragraph in which such firm expressed substantial doubt about the Company’s ability to continue as a going concern, based on the financial statements at that time. If the Company cannot continue as a going concern, its stockholders would likely lose most or all of their investment in it.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

3. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited consolidated financial statements for Eastside Distilling, Inc. and subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements in accordance with GAAP have been condensed or eliminated as permitted under the SEC’s rules and regulations. In management’s opinion, the unaudited consolidated financial statements include all material adjustments, all of which are of a normal and recurring nature, necessary to present fairly the Company’s financial position as of September 30, 2024, its operating results for the three and nine months ended September 30, 2024 and 2023 and its cash flows for the nine months ended September 30, 2024 and 2023. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Interim results are not necessarily indicative of the results that may be expected for an entire fiscal year. The consolidated financial statements include the accounts of Eastside Distilling, Inc. and its wholly-owned subsidiary Bridgetown. The consolidated financial statements also include the accounts of two other wholly-owned subsidiaries, Craft Canning + Bottling, LLC (doing business as Craft Canning + Printing) and Galactic Unicorn Packaging, LLC, presented as assets and liabilities held for sale. All intercompany balances and transactions have been eliminated on consolidation.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Net sales include product sales, less excise taxes and customer programs and incentives. The Company recognizes revenue by applying the following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied.

The Company recognizes spirits sales when merchandise is shipped from a warehouse directly to wholesale customers (except in the case of a consignment sale). For consignment sales, which include sales to the Oregon Liquor Control Commission, the Company recognizes sales upon the consignee’s shipment to the customer. Postage and handling charges billed to customers are also recognized as sales upon shipment of the related merchandise. Shipping terms are generally FOB shipping point, and title passes to the customer at the time and place of shipment or purchase by customers at a retail location. For consignment sales, title passes to the consignee concurrent with the consignee’s shipment to the customer. The customer has no cancellation privileges after shipment or upon purchase at retail locations, other than customary rights of return.

In the Craft C+P segment, sales are recognized when printed cans are delivered or when mobile filling services are performed.

Customer Programs

Customer programs, which include customer promotional discount programs, are a common practice in the alcoholic beverage industry. The Company reimburses wholesalers for an agreed amount to promote sales of products and to maintain competitive pricing. Amounts paid in connection with customer programs are recorded as reductions to net sales in accordance with ASC 606 - Revenue from Contracts with Customers. Amounts recorded in customer programs totaled $40,302 and $43,551 for the nine months ended September 30, 2024 and 2023, respectively.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Excise Taxes

The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) regulations, which includes making timely and accurate excise tax payments. The Company is subject to periodic compliance audits by the TTB. Individual states also impose excise taxes on alcoholic beverages in varying amounts. The Company calculates its excise tax expense based upon units produced and on its understanding of the applicable excise tax laws. Excise taxes totaled $0.1 million and $0.2 million for the nine months ended September 30, 2024 and 2023, respectively.

Cost of Sales

Cost of sales consists of all direct costs related to both spirits and canning for service, labor, overhead, packaging, and in-bound freight charges. Raw materials account for the largest portion of the cost of sales, followed by packaging and production costs.

Sales and Marketing Expenses

Sales and marketing expenses consist of sponsorships, agency fees, digital media, salary and benefit expenses, travel and entertainment expenses. Sales and marketing costs are expensed as incurred. Advertising expenses totaled $44,480 and $0.1 million for the nine months ended September 30, 2024 and 2023, respectively.

General and Administrative Expenses

General and administrative expenses consist of salary and benefit expenses, travel and entertainment expenses for executive and administrative staff, rent and utilities, professional fees, insurance, and amortization and depreciation expense. General and administrative costs are expensed as incurred.

Stock-Based Compensation

The Company recognizes as compensation expense all stock-based awards issued to employees. The compensation cost is measured based on the grant-date fair value of the related stock-based awards and is recognized over the service period of stock-based awards, which is generally the same as the vesting period. The fair value of stock options is determined using the Black-Scholes valuation model, which estimates the fair value of each award on the date of grant based on a variety of assumptions including expected stock price volatility, expected terms of the awards, risk-free interest rate, and dividend rates, if applicable. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and are subject to periodic market adjustments at the end of each reporting period and as the underlying stock-based awards vest.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of the trade receivables of Bridgetown. As of September 30, 2024, two distributors represented 75% of Bridgetown trade receivables. As of December 31, 2023, three distributors represented 84% of Bridgetown trade receivables. Sales to one distributor accounted for 67% of consolidated sales by Bridgetown for the nine months ended September 30, 2024. Sales to one distributor and one wholesale customer accounted for 69% of consolidated sales of Bridgetown for the nine months ended September 30, 2023.

Fair Value Measurements

GAAP defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements. GAAP permits an entity to choose to measure many financial instruments and certain other items at fair value and contains financial statement presentation and disclosure requirements for assets and liabilities for which the fair value option is elected. As of September 30, 2024 and December 31, 2023, management has not elected to report any of the Company’s assets or liabilities at fair value under the “fair value option” provided by GAAP.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

The hierarchy of fair value valuation techniques under GAAP provides for three levels: Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing assets and liabilities under GAAP’s fair value measurement requirements are as follows:

	Level 1:	Fair value of the asset or liability is determined using cash or unadjusted quoted prices in active markets for identical assets or liabilities.

	Level 2:	Fair value of the asset or liability is determined using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

	Level 3:	Fair value of the asset or liability is determined using unobservable inputs that are significant to the fair value measurement and reflect management’s own assumptions regarding the applicable asset or liability.

None of the Company’s assets or liabilities were measured at fair value as of September 30, 2024 or December 31, 2023. However, GAAP requires the disclosure of fair value information about financial instruments that are not measured at fair value. Financial instruments consist principally of trade receivables, accounts payable, accrued liabilities, notes payable, and the secured credit facilities. The estimated fair value of trade receivables, accounts payable, and accrued liabilities approximate their carrying value due to the short period of time to their maturities. As of September 30, 2024 and December 31, 2023, the principal amounts of the Company’s notes approximated fair value.

Items Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities acquired in a business acquisition are valued at fair value at the date of acquisition due to having indefinite lives. The Company, on an annual basis, tests the indefinite life assets for impairment. If an indefinite life asset is found to be impaired, then the Company will estimate its useful life and amortize the asset over the remainder of its useful life.

Inventories

Inventories primarily consist of bulk and bottled liquor and raw materials and are stated at the lower of cost or market. Cost is determined using an average costing methodology, which approximates cost under the first-in, first-out (“FIFO”) method. A portion of the Company’s finished goods inventory is held by certain independent distributors on consignment until it is sold to a third party. The Company regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand and production requirements. Such write-downs establish a new cost basis of accounting for the related inventory.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years. Amortization of leasehold improvements is computed using the straight-line method over the life of the lease or the useful lives of the assets, whichever is shorter. The cost and related accumulated depreciation and amortization of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is reported as current period income or expense. The costs of repairs and maintenance are expensed as incurred.

Intangible Assets / Goodwill

The Company accounts for certain intangible assets at cost. Management reviews these intangible assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount, an impairment loss would be recognized to write down the asset to its estimated fair value.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Long-lived Assets

The Company accounts for long-lived assets, including certain intangible assets, at amortized cost. Management reviews long-lived assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount of the asset, an impairment loss would be recognized to write down the asset to its estimated fair value.

Comprehensive Income

The Company did not have any other comprehensive income items in either of the nine month periods ended September 30, 2024 or 2023.

Accounts Receivable Factoring Program

The Company had two accounts receivable factoring programs: one for its spirits customers (the “spirits program”) that had a zero balance as of September 30, 2024 and another for its co-packing customers (the “co-packing program”) that terminated in August 2023. Under the programs, the Company had the option to sell certain customer account receivables in advance of payment for 75% (spirits program) or 85% (co-packing program) of the amount due. When the customer remits payment, the Company receives the remaining balance. For the spirits program, interest is charged on the advanced 75% payment at a rate of 2.4% for the first 30 days plus 1.44% for each additional ten-day period. For the co-packing program, interest was charged against the greater of $0.5 million or the total funds advanced at a rate of 1% plus the prime rate published in the Wall Street Journal. Under the terms of both agreements, the factoring provider had full recourse against the Company should the customer fail to pay the invoice. In accordance with ASC Topic 860 – Transfers and Servicing, the Company has concluded that these agreements have met all three conditions identified in ASC Topic 860-10-40-5 (a) – (c) and have accounted for this activity as a sale. Given the quality of the factored accounts, the Company had not recognized a recourse obligation. In certain limited instances, the Company may provide collection services on the factored accounts but did not receive any fees for acting as the collection agent, and as such, the Company had not recognized a service obligation asset or liability. The Company factored $0.7 million of invoices and incurred $20,821 in fees associated with the factoring programs during the nine months ended September 30, 2023.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 seeks to improve information about cost of sales and selling, general, and administrative expenses to assist investors in better understanding an entity’s cost structure and forecasting future cash flows. The updated guidance is effective for the Company for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company does not expect the adoption of this ASU to have a material impact on its financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 seeks to improve transparency in income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disclosures. The updated guidance is effective for the Company on January 1, 2025. The Company does not expect the adoption of ASU 2023-09 to have a material impact on its financial statements and disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 seeks to improve disclosures about a public entity’s reportable segments and add disclosures around a reportable segment’s expenses. The updated guidance is effective for the Company for annual periods beginning January 1, 2024, and interim periods within fiscal years beginning January 1, 2025. The Company does not expect the adoption of this ASU to have a material impact on its financial statements and disclosures.

4. Discontinued Operations

Discontinued Operations

The Company reports discontinued operations by applying the following criteria in accordance with ASC Topic 205-20, Presentation of Financial Statements – Discontinued Operations: (1) Component of an entity; (2) Held for sale criteria; and (3) Strategic shift.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

On September 4, 2024, the Company and its subsidiary, Craft C+P, entered into the Debt Agreement with The B.A.D. Company, LLC (the “SPV”), Aegis Security Insurance Company (“Aegis”), Bigger Capital Fund, LP (“Bigger”), District 2 Capital Fund, LP (“District 2”), LDI Investments, LLC (“LDI”), William Esping (“Esping”), WPE Kids Partners (“WPE”) and Robert Grammen (“Grammen”), collectively, the “Investors”. The SPV is a special purpose vehicle whose equity is shared 50% by Bigger and District 2 and 50% by Aegis and LDI.

On October 7, 2024, a closing will be held pursuant to the terms of the Debt Agreement. Aegis, Bigger, District 2 and LDI will transfer to the Company 31,234 shares of Series C Preferred Stock and 119,873 shares of the Company’s common stock. The Investors will also release the Company from liability for $4.1 million of senior secured debt and $2.5 million of unsecured debt. In consideration of their surrender of stock and release of debt, the Company will cause Craft C+P to be merged into a limited liability company owned by the Investors. Given that the effect of the Debt Agreement meets all the initial criteria for classification of held for sale, the assets, liabilities, and operating results of Craft C+P have been classified as held for sale during the nine month periods ended September 30, 2024 and 2023, and as of September 30, 2024 and December 31, 2023. The consolidated financial statements for the prior periods have been adjusted to reflect comparable information.

Assets and liabilities related to Craft C+P were as follows:

(Dollars in thousands)	September 30, 2024		December 31, 2023
Assets
Current assets:
Cash	$	135	$	96
Trade receivables, net		756		396
Inventories		1,071		526
Prepaid expenses and other current assets		678		250
Total current assets		2,640		1,268
Property and equipment, net		4,156		4,598
Right-of-use assets		1,415		1,923
Intangible assets, net		517		827
Other assets, net		210		321
Total Assets	$	8,938	$	8,937

Liabilities
Current liabilities:
Accounts payable	$	2,130	$	1,014
Accrued liabilities		266		110
Deferred revenue		42		88
Current portion of lease liabilities		686		665
Total current liabilities		3,124		1,877
Lease liabilities, net of current portion		843		1,366
Total liabilities	$	3,967	$	3,243

Income and expense related to Craft C+P were as follows for the nine months ended September 30, 2024 and 2023:

(Dollars in thousands)	2024			2023
Sales	$	6,775		$	5,637
Less customer programs and excise taxes		117			79
Net sales		6,658			5,558
Cost of sales		6,322			5,378
Gross profit		336			180
Operating expenses:
Sales and marketing expenses		45			81
General and administrative expenses		2,355			2,103
Gain on disposal of property and equipment		(195	)		(171	)
Total operating expenses		2,205			2,013
Loss from operations		(1,869	)		(1,833	)
Other income (expense), net
Interest expense		-			(12	)
Other income		3			33
Total other income, net		3			21
Loss before income taxes		(1,866	)		(1,812	)
Provision for income taxes		-			-
Net loss	$	(1,866	)	$	(1,812	)

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

5. Business Segment Information

As of September 30, 2024, the Company’s internal management financial reporting consisted of Bridgetown and corporate. The Bridgetown brands span several alcoholic beverage categories, including whiskey, vodka, rum, and tequila and are sold on a wholesale basis to distributors in open states, and to brokers in control states. The Company’s principal area of operation is in the U.S. It has one Bridgetown customer that represents 67% of its revenue. Corporate consists of key executive and accounting personnel and corporate expenses such as public company and board costs, as well as interest on debt.

The measure of profitability reviewed are condensed statements of operations and gross margins. These business segments reflect how operations are managed, operating performance is evaluated and the structure of internal financial reporting. Total asset information by segment is not provided to, or reviewed by, the chief operating decision maker (“CODM”) as it is not used to make strategic decisions, allocate resources or assess performance. The accounting policies of the segments are the same as those described for the Company in the Summary of Significant Accounting Policies in Note 3.

Segment information was as follows for the nine months ended September 30:

Schedule of Segment Information

(Dollars in thousands)	2024			2023
Bridgetown
Sales	$	2,106		$	3,080
Net sales		1,977			2,939
Cost of sales		1,476			1,940
Gross profit		501			999
Total operating expenses		698			1,183
Net loss		(162	)		(130	)
Gross margin		25	%		34	%

Depreciation and amortization		99			114

Corporate
Total operating expenses	$	1,149		$	1,287
Net loss		(2,112	)		(3,455	)

Interest expense		965			850
Significant noncash items:
Stock compensation		-			98

6. Inventories

Inventories consisted of the following:

Schedule of Inventories

(Dollars in thousands)	September 30, 2024		December 31, 2023
Raw materials	$	770	$	1,740
Finished goods		1,023		946
Total inventories	$	1,793	$	2,686

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

7. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

(Dollars in thousands)	September 30, 2024		December 31, 2023
Prepayment of inventory	$	69	$	52
Other		107		61
Total prepaid expenses and other current assets	$	176	$	113

8. Property and Equipment

Property and equipment consisted of the following:

Schedule of Property and Equipment

(Dollars in thousands)	September 30, 2024			December 31, 2023			Useful Life (in years)
Furniture and fixtures	$	625		$	625			3.0 - 7.0
Leasehold improvements		1,386			1,386			3.5 - 5.0
Vehicle		27			27			7.0
Total cost		2,038			2,038
Less accumulated depreciation		(1,926	)		(1,869	)
Total property and equipment, net	$	112		$	169

Purchases of property and equipment for the nine months ended September 30, 2024 and 2023 were nil and $0.1 million, respectively. Depreciation expense totalled $0.1 million for both the nine months ended September 30, 2024 and 2023.

During the nine months ended September 30, 2024, the Company did not dispose of any fixed assets. During the nine months ended September 30, 2023, the Company disposed of fixed assets for proceeds of $0.1 million with a net book value of $0.1 million resulting in a loss of $2,962.

9. Intangible Assets

Intangible assets consisted of the following:

Schedule of Intangible Assets

(Dollars in thousands)	September 30, 2024		December 31, 2023
Permits and licenses	$	25	$	25
Azuñia brand		4,153		4,153
Intangible assets	$	4,178	$	4,178

The Company’s intangible assets were determined to have an indefinite life and are not amortized. The Company, on an annual basis, tests the indefinite life assets for impairment. If the carrying value of an indefinite life asset is found to be impaired, then the Company will record an impairment loss and reduce the carrying value of the asset. As of December 31, 2023, the Company determined that the Azuñia assets were impaired and recorded an impairment cost of $0.4 million. No further impairment charge was recorded during the nine months ended September 30, 2024.

10. Other Assets

Other assets consisted of the following:

Schedule of Other Assets

(Dollars in thousands)	September 30, 2024			December 31, 2023
Product branding	$	396		$	396
Deposits		171			172
Other		-			23
Total other assets		567			591
Less accumulated amortization		(385	)		(344	)
Other assets, net	$	182		$	247

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

As of September 30, 2024, the Company had $0.4 million of capitalized costs related to services provided for the rebranding of its existing product line. This amount is being amortized over a seven-year life.

Amortization expense totalled $41,250 and $42,857 for the nine months ended September 30, 2024 and 2023, respectively.

The deposits represent the office lease deposits and cash collateral for the Company’s credit cards.

11. Leases

The Company has various lease agreements in place for its warehouse and copier. Terms of these leases include, in some instances, scheduled rent increases, renewals, purchase options and maintenance costs, and vary by lease. These lease obligations expire at various dates through 2026. The Company determines if an arrangement is a lease at inception. As the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate based on information available at commencement to determine the present value of the lease payments. Right-of-use assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less (“short-term leases”) are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term. As of September 30, 2024, the amount of right-of-use assets and lease liabilities were each $0.4 million. Aggregate lease expense for the nine months ended September 30, 2024 was $0.2 million, consisting of $0.1 million in operating lease expense for lease liabilities and $0.1 million in short-term lease cost.

Maturities of lease liabilities as of September 30, 2024 were as follows:

(Dollars in thousands)	Operating Leases			Weighted- Average Remaining Term in Years
2024	$	58
2025		210
2026		164
2027		-
2028		-
Thereafter		-
Total lease payments		432
Less imputed interest (based on 6.1% weighted-average discount rate)		(28	)
Present value of lease liability	$	404			2.06

12. Notes Payable

Notes payable consisted of the following:

Schedule of Notes Payable

(Dollars in thousands)	September 30, 2024			December 31, 2023

Promissory notes payable bearing interest of 6.0%. The notes have a 36-month term with maturity in April 2024. Accrued interest is paid in accordance with a monthly amortization schedule.	$	486		$	486
Amended and restated promissory notes payable bearing interest of 8.0%. The notes mature in March 2025. Accrued interest is paid in accordance with an amortization schedule.		7,669			7,556
Total notes payable		8,155			8,042
Less current portion		(8,155	)		(486	)
Long-term portion of notes payable	$	-		$	7,556

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

The Company paid $11,588 and $1.1 million in interest on notes for the nine months ended September 30, 2024 and 2023, respectively.

Maturities on notes payable as of September 30, 2024 were as follows:

Schedule of Maturities on Notes payable

(Dollars in thousands)
2024		486
2025		7,669
2026		-
2027		-
2028		-
Thereafter		-
Total	$	8,155

13. Secured Credit Facilities

Note Purchase Agreement

On October 7, 2022, the Company entered into a Note Purchase Agreement dated as of October 6, 2022 with Aegis. Pursuant to the Note Purchase Agreement, Aegis purchased from the Company a secured promissory note in the principal amount of $4.5 million (the “Aegis Note”). Aegis paid for the Aegis Note by paying $3.3 million to TQLA to fully satisfy a secured line of credit promissory note that the Company issued to TQLA on March 21, 2022; and the remaining $1.2 million was paid in cash to the Company. The Aegis Note bears interest at 9.25% per annum, payable every three months. The principal amount of the Aegis Note will be payable on March 31, 2025. The Company pledged substantially all of its assets to secure its obligations to Aegis under the Aegis Note.

On September 29, 2023, the Company entered into a Debt Satisfaction Agreement with Aegis and other creditors, pursuant to which the Aegis Note was amended and restated. See: Note 16, Stockholders Equity – Debt Satisfaction Agreement. Principal and interest of $1.9 million were exchanged for equity issued to a special purpose vehicle, The B.A.D. Company, LLC (the “SPV”), in which Aegis holds a 29% interest. As of September 30, 2024, the principal balance of the Aegis Note was $2.6 million and interest expense accrued was $0.1 million.

6% Secured Convertible Promissory Notes

On April 19, 2021, the Company entered into a securities purchase agreement (“Purchase Agreement”) with accredited investors (“Subscribers”) for their purchase of up to $3.3 million of principal amount of 6% secured convertible promissory notes of the Company (“Note” or “Notes”), which notes are convertible into shares (“Conversion Shares”) of the Company’s common stock, par value $0.0001 per share pursuant to the terms and conditions set forth in the Notes with an initial conversion price of $44.00. In connection with the purchase of such Notes, each Subscriber received a warrant (“Existing Warrant”), to purchase a number of shares of common stock (“Warrant Shares”) equal to 60% of the principal amount of any Note issued to such Subscriber divided by the conversion price of the Note issued to such Subscriber, at an exercise price equal to $52.00. In connection with the Purchase Agreement, the Company entered into a Security Agreement under which it granted the Subscribers a security interest in certain assets of the Company (the “Security Agreement”) and a Registration Rights Agreement under which the Company agreed to register for resale the Conversion Shares and the Warrant Shares. Concurrently therewith, the Company and the investors closed $3.3 million of the private offering.

Roth Capital, LLC acted as placement agent in the private offering, and the Company paid the Placement Agent a cash fee of five percent (5%) of the gross proceeds therefrom. The Company received $3.1 million in net proceeds from the closing, after deducting the fee payable to the Placement Agent and the legal fees of the Subscribers in connection with the transaction. The Company used the proceeds to repay prior outstanding notes payable and for working capital and general corporate purposes.

Interest on the Notes accrued at a rate of 6% per annum and was payable either in cash or in shares of the Company’s common stock at the conversion price in the Note on each of the six and twelve month anniversaries of the issuance date and on the maturity date of October 18, 2022.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

All amounts due under the Notes are convertible at any time after the issuance date, in whole or in part (subject to rounding for fractional shares), at the option of the holders into the Company’s common stock at a fixed conversion price, which is subject to adjustment as summarized below. The Notes were initially convertible into the Company’s common stock at an initial fixed conversion price of $44.00 per share. This conversion price is subject to adjustment for stock splits, combinations, or similar events, among other adjustments. On April 1, 2022, the Company and the holders agreed to a reduction of the conversion price of the 6% secured convertible promissory notes to $26.00 per share in connection with the Company’s issuance of a common stock purchase warrant to TQLA covering its loan amount of $3.5 million with a common stock value of $24.00 per share.

The Notes contain customary triggering events including but not limited to: (i) failure to make payments when due under the Notes; and (ii) bankruptcy or insolvency of the Company. If a triggering event occurs, each holder may require the Company to redeem all or any portion of the Notes (including all accrued and unpaid interest thereon), in cash.

The Notes are secured by a subordinated security interest in the Company’s assets pursuant to the terms of a Security Agreement entered into between the Company and the Subscribers.

On October 13, 2022, the Company entered into an Amendment Agreement with the holders of the 6% Secured Convertible Promissory Notes. The Amendment Agreement changed the Maturity Date of the Notes from October 18, 2022 to November 18, 2022. In consideration of the extension, the Company issued 4,808 shares of its common stock to each of the Subscribers.

On September 29, 2023, the Company entered into a Debt Satisfaction Agreement with the Subscribers and other creditors, pursuant to which the Maturity Date of the Notes was extended from November 18, 2022 to March 31, 2025 and interest accrues at 9% per annum. See: Note 16, Stockholders Equity – Debt Satisfaction Agreement. Principal and interest on the Notes of $3.3 million was exchanged for equity issued to the SPV, in which the Subscribers held a 50% ownership interest, and the Notes were then amended and restated. As of September 30, 2024, the principal balance was $0.4 million and interest expense accrued was $27,451.

2024 Secured Notes

On May 15, 2024, the Company entered into a Loan Agreement with the SPV, Aegis, Bigger, District 2, and LDI.

Pursuant to the Loan Agreement, Bigger, District 2 and LDI purchased from the Company for $1.1 million cash promissory notes in the aggregate principal amount of $1.1 million (the “2024 Secured Notes”). The 2024 Secured Notes may be satisfied by payment of 110% of principal on or before November 29, 2024, by payment of 130% of principal on or before March 30, 2025 or by payment of 140% of principal on March 31, 2025.

With each 2024 Secured Note, the Company issued Warrants to purchase a share of the Company’s common stock for $5.00 exercisable for five years after December 2, 2024 if on November 29, 2024 the 2024 Secured Note issued to the Warrant-holder remains unsatisfied. LDI received a Warrant to purchase 598,021 shares and each of Bigger and District 2 received a Warrant to purchase 299,011 shares.

The Loan Agreement provides that if the 2024 Secured Notes have not been satisfied by November 29, 2024, then until March 31, 2025 each of the Subscribers will have the right to purchase a “Kicker Note” in the amount of $0.5 million for LDI or $0.3 million for each of Bigger and District 2 by surrendering debt or equity instruments specified in the Loan Agreement. The Kicker Notes will not bear interest, and may be satisfied by payment of their principal amounts on or before March 31, 2026.

The Company’s obligations under the 2024 Secured Notes and the Kicker Notes (collectively, the “2024 Notes”) are secured by the Company’s pledge of its assets, subject to certain specified exceptions. In connection with the Loan Agreement, the Company, Aegis, Bigger and District 2 amended and restated the Intercreditor Agreement they had executed on September 29, 2023. In the Amended and Restated Intercreditor Agreement, Aegis, Bigger and District 2 subordinate their liens on any barrels of spirits owned by the Company, and the parties agree that the net proceeds of any sale of barrels will be paid to the Subscribers in satisfaction of the 2024 Notes. Commencing when all barrels have been sold, the lien of the Subscribers under the 2024 Notes will become pari passu with the senior lien on the remaining collateral.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

14. Commitments and Contingencies

Legal Matters

On March 1, 2023, Sandstrom Partners, Inc. filed a complaint in the Circuit Court of the State of Oregon for the County of Multnomah alleging the Company failed to pay for its services pursuant to an agreement entered into on October 16, 2019. The complaint sought damages of $245,000, plus a judicial declaration, due to the Company’s failure to pay for the services. The Company believes that it paid for services rendered. On October 28, 2024, the Company signed a term sheet to settle the case.

On December 15, 2020, Grover Wickersham filed a complaint in the United States District Court for the District of Oregon against the Company. Mr. Wickersham, the former CEO and Chairman of the Board of the Company, has asserted causes of action for fraud in the inducement, breach of contract, breach of the implied covenant of good faith and fair dealing, defamation, interference with economic advantage, elder financial abuse, and dissemination of false and misleading proxy materials. During June 2024, this case was settled.

The Company is not currently subject to any other material legal proceedings; however, it could be subject to legal proceedings and claims from time to time in the ordinary course of its business, or legal proceedings it considered immaterial may in the future become material. Regardless of the outcome, litigation can, among other things, be time consuming and expensive to resolve, and can divert management resources.

15. Net Income (Loss) per Common Share

Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, without considering any dilutive items. Potentially dilutive securities consist of the incremental common stock issuable upon exercise of stock options, convertible notes and warrants. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. There were no anti-dilutive common shares included in the calculation of income (loss) per common share as of September 30, 2024 and 2023.

16. Stockholders’ Equity

Debt Satisfaction Agreement

On September 29, 2023, the Company entered into a Debt Satisfaction Agreement (the “DSA”) with the SPV, Aegis, Bigger, District 2, LDI and TQLA, LLC. The SPV is a special purpose vehicle whose equity is shared 50% by Bigger and District 2 and 50% by Aegis and LDI.

Pursuant to the DSA, on September 29, 2023, the Company issued to the SPV 296,722 shares of the Company’s common stock and 200,000 shares of its Series C Preferred Stock, and executed a Registration Rights Agreement providing that the Company will register for public resale that common stock and the common stock issuable upon conversion of the Series C Preferred Stock. In exchange for that equity, the Company’s debts to the members of the SPV were reduced by a total of $6.5 million and the Company recognized a loss on the conversion of $1.3 million for the year ended December 31, 2023. Specifically, the debt was reduced as follows:

	●	the principal balance of the Secured Promissory Note issued by the Company to Aegis on October 6, 2022 was reduced by $1.9 million;

	●	the Company’s debt to LDI of $1.4 million arising from advances made by LDI to the Company during the past 10 months was eliminated;

	●	the aggregate principal balance of the Secured Convertible Promissory Notes issued by the Company to Bigger in April and May of 2021 was reduced by $1.6 million; and

	●	the aggregate principal balance of the Secured Convertible Promissory Notes issued by the Company to District 2 in April and May of 2021 was reduced by $1.6 million.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Further pursuant to the DSA:

	●	the maturity date of the secured debt listed above as well as unsecured notes issued by the Company and held by Bigger and District 2 in the aggregate amount of $7.4 million was deferred to March 31, 2025 and the interest rate on all such debt was increased to 8% per annum;

	●	the Company, Aegis, Bigger and District 2 entered into an Intercreditor Agreement, pursuant to which the remaining secured debt obligations of the Company to Aegis, Bigger and District 2 were made pari passu;

	●	the Common Stock Purchase Warrant issued by the Company to TQLA LLC on March 21, 2022, which permits TQLA LLC to purchase up to 145,834 shares of the Company’s common stock, was amended to prevent any exercise of the Warrant that would result in the portion of the cumulative voting power in the Company that the holder and its affiliates may own after the conversion to 9.99%. The Beneficial Ownership Limitation may be increased to 19.99% by the holder upon 61 days advance notice to the Company.

	●	Upon the liquidation, dissolution and winding up of the Company, or upon the effective date of a consolidation, merger or statutory share exchange in which the Company is not the surviving entity, the holder of each share of the Series C Preferred Stock shall be entitled to a distribution prior to and in preference of the holders of the common stock.

	●	In the event the Company declares a dividend payable in cash or stock to holders of any class of stock, the holder of each share of Series C Preferred Stock shall be entitled to receive a dividend equal in amount and kind to that payable to the holder of the number of shares of the Company’s common stock into which that holder’s Series C Preferred Stock could be converted on the record date for the distribution common stock. The dividends issued on the Company s outstanding Series B Preferred Stock are excluded from this provision.

	●	The holders of Series C Preferred Stock shall have no voting rights; except that nothing will limit a holder’s voting rights with respect to shares of any other class of the Company’s common stock held from time to time.

Issuance of Common Stock

During the nine months ended September 30, 2024, the Company issued 1,764 shares of common stock to a director for stock-based compensation of $2,046. The shares were valued for accounting purposes using the closing share price of the Company’s common stock on the date of grant of $1.16 per share and issued at $3.05 per share. During the nine months ended September 30, 2024, the Company issued 55,738 shares of common stock to employees and a consultant for stock-based compensation of $0.1 million at $1.21 per share.

On September 5, 2024, the Company entered into a Securities Purchase Agreement with a single institutional investor for the sale of 92,815 shares of common stock for $1.00 per share, and the sale of pre-funded warrants for $0.9999 per warrant. The warrants permitted the purchase of 349,227 shares of common stock for $0.0001 per share. The warrants were exercised on September 6, 2024. The Company used the net proceeds for working capital and general corporate purposes.

On September 29, 2023, pursuant to the DSA (see discussion above), the Company issued to the SPV 296,722 shares of common stock and 200,000 shares of its Series C Preferred Stock. In exchange for that equity, the Company’s debts to the members of the SPV were reduced by a total of $6.5 million.

During the year ended December 31, 2023, the Company issued 162,849 shares of common stock to directors and employees for stock-based compensation of $0.7 million. The shares were valued for accounting purposes using the closing share price of the Company’s common stock on the date of grant, within the range of $1.29 to $7.40 per share and issued within the range of $3.05 to $7.40 per share

During the year ended December 31, 2023, the Company sold 343,495 shares of common stock for net proceeds of $1.4 million in at-the-market public placements.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Issuance of Series B Preferred Stock

On October 19, 2021, Company entered into a securities purchase agreement (“Purchase Agreement”) with an accredited investor (“Subscriber”) for its purchase of 2.5 million shares (“Preferred Shares”) of Series B Convertible Preferred Stock (“Series B Preferred Stock”) at a purchase price of $1.00 per Preferred Share, which Preferred Shares are convertible into shares of the Company’s common stock pursuant to the terms and conditions set forth in a Certificate of Designation Establishing Series B Preferred Stock of the Company with an initial conversion price of $62.00 per share. 42,500 shares of common stock were reserved for issuance in the event of conversion of the Preferred Shares.

The Series B Preferred Stock accrues dividends at a rate of 6% per annum, payable annually on the last day of December of each year. Dividends shall accrue from day to day, whether or not declared, and shall be cumulative. Dividends are payable at the Company’s option either in cash or “in kind” in shares of common stock; provided, however that dividends may only be paid in cash following the fiscal year in which the Company has net income (as shown in its audited financial statements contained in its Annual Report on Form 10-K for such year) of at least $0.5 million. For “in-kind” dividends, holders will receive that number of shares of common stock equal to (i) the amount of the dividend payment due such stockholder divided by (ii) the volume weighted average price of the common stock for the 90 trading days immediately preceding a dividend date (“VWAP”). For the year ended December 31, 2024, the Company issued dividends of 177,725 shares of common stock at $0.84 per share to its Series B Preferred stockholders. For the year ended December 31, 2023, the Company issued dividends of 92,957 shares of common stock at a VWAP of $1.61 per share to its Series B Preferred stockholders. For both the nine months ended September 30, 2024 and 2023, the Company accrued $0.1 million of preferred dividends.

Issuance of Series C Preferred Stock

On September 29, 2023, the Company entered into the DSA, pursuant to which the Company issued to the SPV 200,000 shares of its Series C Preferred Stock. Each share of Series C Preferred Stock has a stated value of $28.025 and is convertible into shares of the Company’s common stock pursuant to the terms and conditions set forth in a Certificate of Designation Establishing Series C Preferred Stock with an initial conversion price of $3.05 per share.

On September 6, 2024, the SPV converted 82,415 shares of its Series C Preferred Stock into 757,395 shares of common stock.

Bridgetown Spirits Corp.

Subsequent to execution of the Debt Agreement, Bridgetown issued 1.0 million shares of common stock to the Company, representing all of the issued and outstanding capital stock of Bridgetown.

Stock-Based Compensation

On September 8, 2016, the Company adopted the 2016 Equity Incentive Plan (the “2016 Plan”). Pursuant to the terms of the plan, on January 1, 2023 the number of shares available for grant under the 2016 Plan reset to 437,993 shares, equal to 8% of the number of outstanding shares of the Company’s capital stock, calculated on an as-converted basis, on March 31 of the preceding calendar year, and then added to the prior year plan amount. As of September 30, 2024, there were 2,120 options and 196,619 restricted stock units (“RSUs”) outstanding under the 2016 Plan, with vesting schedules varying between immediate or three (3) years from the grant date.

A summary of all stock option activity as of and for the nine months ended September 30, 2024 is presented below:

Summary of Stock Options Activity

	# of Options		Weighted- Average Exercise Price
Outstanding as of December 31, 2023		2,120	$	57.95

Outstanding and Exercisable as of September 30, 2024		2,120	$	57.95

The aggregate intrinsic value of options outstanding as of September 30, 2024 was $0. As of September 30, 2024, all options had vested.

The Company uses the Black-Scholes valuation model to measure the grant-date fair value of stock options. The grant-date fair value of stock options issued to employees is recognized on a straight-line basis over the requisite service period. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and are subject to periodic market adjustments as the underlying stock-based awards vest.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

To determine the fair value of stock options using the Black-Scholes valuation model, the calculation takes into consideration the effect of the following:

	●	Exercise price of the option
	●	Fair value of the Company’s common stock on the date of grant
	●	Expected term of the option
	●	Expected volatility over the expected term of the option
	●	Risk-free interest rate for the expected term of the option

The calculation includes several assumptions that require management’s judgment. The expected term of the options is calculated using the simplified method described in GAAP. The simplified method defines the expected term as the average of the contractual term and the vesting period. Estimated volatility is derived from volatility calculated using historical closing prices of common shares of similar entities whose share prices are publicly available for the expected term of the options. The risk-free interest rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the options.

The Company did not issue any additional options during the three and nine months ended September 30, 2024.

Warrants

On May 16, 2024, the Company entered into a Loan Agreement with the SPV, Aegis, Bigger, District 2, and LDI. With each 2024 Secured Note, the Company issued a Warrant to purchase a share of the Company’s common stock for $5.00 exercisable for five years after December 2, 2024 if on November 29, 2024 the 2024 Secured Note issued to the Warrant-holder remains unsatisfied. LDI received a Warrant to purchase 598,021 shares and each of Bigger and District 2 received a Warrant to purchase 299,011 shares. The Company recorded debt issuance costs of $0.3 million as of September 30, 2024.

The estimated fair value of the new warrants issued was based on a combination of closing market trading price on the date of issuance for the public offering warrants, and the Black-Scholes option-pricing model, using the assumptions below:

Schedule of Fair Value of Warrants

Volatility		100	%
Risk-free interest rate		4.4	%
Expected term (in years)		5.0
Expected dividend yield		-
Fair value of common stock	$	0.55

On March 21, 2022, the Company entered into a promissory note with TQLA LLC to accept a one year loan of $3.5 million. In addition, the Company issued a common stock purchase warrant to TQLA covering the loan amount with an exercise price of $24.00 per share. The note payable was fully repaid in October 2022. The common stock purchase warrant expires in March 2027. The warrants were amended pursuant to the Debt Satisfaction Agreement (See discussion above) to prevent any exercise that would result in the warrant-holder and affiliates acquiring cumulative voting power in excess of 9.99%. This Beneficial Ownership Limitation may be increased to 19.99% upon 61 days advance notice to the Company.

From April 19, 2021 through May 12, 2021, the Company issued in a private placement Existing Warrants to purchase up to 45,000 shares of common stock at an exercise price of $52.00 per Warrant Share. On July 30, 2021, the Company entered into Inducement Letters with the holders of the Existing Warrants whereby such holders agreed to exercise for cash their Existing Warrants to purchase the 45,000 Warrant Shares in exchange for the Company’s agreement to issue new warrants (the “New Warrants”) to purchase up to 45,000 shares of common stock (the “New Warrant Shares”). The New Warrants have substantially the same terms as the Existing Warrants, except that the New Warrants have an exercise price of $60.00 per share and are exercisable until August 19, 2026. On September 29, 2023, pursuant to the Debt Satisfaction Agreement (see above), the exercise price of the Existing Warrants was reduced to $33.08 per share and the term during which the Existing Warrants may be exercised was extended to June 23, 2028.

On January 15, 2020, the Company and its subsidiaries entered into a loan agreement (the “Loan Agreement”) between the Company and Live Oak Banking Company (“Live Oak”), a North Carolina banking corporation (the “Lender”) to refinance existing debt of the Company and to provide funding for general working capital purposes In connection with the Loan Agreement, the Company issued to the Lender a warrant to purchase up to 5,000 shares of the Company’s common stock at an exercise price of $78.80 per share (the “Warrant”). The Warrant expires on January 15, 2025. In connection with the issuance of the Warrant, the Company granted the Lender piggy-back registration rights with respect to the shares of common stock issuable upon exercise of the Warrant, subject to certain exceptions.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

A summary of all warrant activity as of and for the nine months ended September 30, 2024 is presented below:

Summary of Warrant Activity

	Warrants		Weighted- Average Remaining Life (Years)		Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding as of December 31, 2023		201,667		3.8	$	34.87	$	-

Granted		1,196,043		5.0		5.00		-
Outstanding as of September 30, 2024		1,397,710		4.8	$	9.31	$	-

17. Related Party Transactions

The following is a description of transactions since January 1, 2023 as to which the amount involved exceeds the lesser of $0.1 million or one percent (1%) of the average of total assets at year-end for the last two completed fiscal years, which was $0.2 million, and in which any related person has or will have a direct or indirect material interest, other than equity, compensation, termination and other arrangements.

Aegis Security Insurance Company

On October 7, 2022, the Company entered into a Note Purchase Agreement with Aegis. Pursuant to the Note Purchase Agreement, Aegis purchased from the Company a secured promissory note in the principal amount of $4.5 million (the “Aegis Note”). $3.3 million of the purchase price was paid to TQLA, LLC to satisfy a Note purchased from TQLA earlier in 2022. See discussion of the Aegis transaction in Note 12. Patrick Kilkenny is the principal owner of Aegis. TQLA LLC is owned by Stephanie Kilkenny, a member of the Company’s Board of Directors, and her husband, Patrick Kilkenny.

LD Investments LLC and Aegis Security Insurance Company

On September 29, 2023, the Company entered into a Secured Promissory Note with LDI in the principal amount of $1.4 million, representing advances made by LDI to the Company between December 2022 and August 2023. Patrick Kilkenny is the principal owner of LDI. Patrick Kilkenny is the spouse of Stephanie Kilkenny, a member of the Company’s Board of Directors.

On September 29, 2023, the Company entered into the DSA with LDI, Aegis Security Insurance Company (of which Patrick Kilkenny is the principal owned) and other creditors. See: Note 16, Stockholders Equity – Debt Satisfaction Agreement. The entire principal and interest on the LDI Note were exchanged for equity issued to the SPV, in which LDI holds a 21% interest.

2024 Secured Notes

During February 2024, LDI advanced the Company $0.6 million. On May 16, 2024, the Company entered into a Loan Agreement with LDI, see: Note 13, Secured Credit Facilities - 2024 Secured Notes.

18. Subsequent Events

Merger Agreement

On September 4, 2024, the Company entered into the Merger Agreement with the Merger Sub and Beeline Financial Holdings, Inc. (“Beeline”). Beeline is a mortgage technology company that operates an end-to-end, all-digital, AI-enhanced platform for homeowners and property investors. On October 7, 2024, the parties executed Amendment No. 1 to the Merger Agreement.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

On October 7, 2024, immediately after the closing under the Debt Agreement, a closing was held pursuant to the Merger Agreement (the “Merger Closing”). Beeline merged into Merger Sub and became a wholly-owned subsidiary of the Company, with the name of the surviving subsidiary being changed to Beeline Financial Holdings, Inc. In the Merger, the shareholders of Beeline gained the right to receive a total of 69,482,229 shares of Series F Preferred Stock and a total of 517,771 shares of Series F-1 Preferred Stock. In addition, each option to purchase shares of Beeline common stock outstanding at the time of the Merger was converted into an option to purchase shares of the Company’s common stock measured by the same ratio.

The sale of the Company’s common stock and Series F Preferred Stock to the shareholders of Beeline was carried out in a transaction exempt from registration pursuant to SEC Regulation 506(b).

Debt Agreement

On October 7, 2024, a closing was held pursuant to the terms of the Debt Agreement. At that closing, the following transactions were completed:

	●	Aegis, Bigger, District 2 and LDI transferred to the Company a total of 31,234 shares of the Company’s Series C Preferred Stock and 119,873 shares of the Company’s common stock. The Investors also released the Company from liability for $4.1 million of senior secured debt and $2.5 million of unsecured debt. In consideration of their surrender of stock and release of debt, the Company caused Craft C+P to be merged into a limited liability company owned by the Investors.

	●	The Company issued a total of 255,474 shares of Series D Preferred Stock to Bigger and District 2, and Bigger and District 2 released the Company from liability for $2.6 million of unsecured debt.

	●	The Company issued a total of 200,000 shares of Series E Preferred Stock to Bigger and District 2, and Bigger and District 2 released the Company from liability for $2.0 million of unsecured debt.

	●	The Company transferred a total of 108,899 shares of Bridgetown Spirits Corp. to Bigger, District 2, Esping, WPE and Grammen, and those Investors released the Company from unsecured debt in the aggregate amount of $0.9 million.

	●	The Company issued a total of 190,000 shares of common stock to Esping, WPE and Grammen, and those Investors released the Company from liability for $0.2 million of unsecured debt.

Preferred Stock

On October 7, 2024 the Company filed with the Nevada Secretary of State a Certificate of Designation of 255,474 shares of Series D Preferred Stock and a Certificate of Designation of 200,000 shares of Series E Preferred Stock and a Certificate of Designation of 70.0 million shares of Series F Preferred Stock and a Certificate of Designation of 1.0 million shares of Series F-1 Preferred Stock. The material terms of each class of Preferred Stock are:

Series D Preferred Stock. Each share of Series D Preferred Stock has a stated value of $10.00. The holder of Series D Preferred Stock has no voting rights by reason of those shares, except that the approval by holders of more than 50% of the outstanding Series D Preferred Stock will be required for any corporate action that would adversely affect the preferences, privileges or rights of the Series D Preferred Stock. In the event that the Company declares a dividend payable in cash or stock to holders of any class of the Company’s stock, the holder of a share of Series D Preferred Stock will be entitled to receive an equivalent dividend on an as-converted basis. In the event of a liquidation of the Company, the holders of Series D Preferred Stock will share in the distribution of the Company’s net assets on an as-converted basis, subordinate only to the senior position of the Series B Preferred Stock. Each share of Series D Preferred Stock will be convertible into common stock by a conversion ratio equal to the stated value of the Series D share divided by the Series D Conversion Price. The initial Series D Conversion Price is $1.80 per common share, which is subject to equitable adjustment. The number of shares of common stock into which a holder may convert Series D Preferred Stock is limited by a Beneficial Ownership Limitation, which restricts the portion of the cumulative voting power in the Company that the holder and its affiliates may own after the conversion to 9.99%.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Series E Preferred Stock. Each share of Series E Preferred Stock has a stated value of $10.00. The holder of Series E Preferred Stock has no voting rights by reason of those shares, except that the approval by holders of more than 50% of the outstanding Series E Preferred Stock will be required for any corporate action that would adversely affect the preferences, privileges or rights of the Series E Preferred Stock. In the event that the Company declares a dividend payable in cash or stock to holders of any class of the Company’s stock, the holder of a share of Series E Preferred Stock will be entitled to receive an equivalent dividend on an as-converted basis. In the event of a liquidation of the Company, the holders of Series E Preferred Stock will share in the distribution of the Company’s net assets on an as-converted basis, subordinate only to the senior position of the Series B Preferred Stock. Commencing 390 days after the closing under the Debt Agreement (the “Measurement Date”), each share of Series E Preferred Stock will be convertible into common stock by a conversion ratio equal to the stated value of the Series E share divided by the Series E Conversion Price. The Series E Conversion Price on and after the Measurement Date will equal the average of the VWAPs for the five trading days immediately preceding the Measurement Date, subject to a “Floor Price” of $0.25 per share. The Series E Conversion Price and the Floor Price will be subject to equitable adjustment in the event of stock splits and the like. The number of shares of common stock into which a holder may convert Series E Preferred Stock is limited by a Beneficial Ownership Limitation, which restricts the portion of the cumulative voting power in the Company that the holder and its affiliates may own after the conversion to 9.99%.

Series F Preferred Stock. Each share of Series F Preferred Stock has a stated value of $0.50. The holder of Series F Preferred Stock has no voting rights by reason of those shares, except that the approval by holders of more than 50% of the outstanding Series F Preferred Stock will be required for any corporate action that would adversely affect the preferences, privileges or rights of the Series F Preferred Stock. In the event that the Company declares a dividend payable in cash or stock to holders of any class of the Company’s stock, the holder of a share of Series F Preferred Stock will be entitled to receive an equivalent dividend on an as-converted basis. In the event of a liquidation of the Company, the holders of Series F Preferred Stock will share in the distribution of the Company’s net assets on an as-converted basis, subordinate only to the senior position of the Series B Preferred Stock.

Series F-1 Preferred Stock. The material terms of the Series F-1 Preferred Stock are identical to the material terms of the Series F Preferred Stock, except that holders of Series F-1 Preferred Stock are entitled to case one vote per share at any meeting of the Company’s shareholders.

Shareholder Approval. If the shareholders of the Company approve the conversion of the Series F and the Series F-1 Preferred Stock at a meeting to be called for that purpose, each such share will be convertible into common stock by a conversion ratio equal to the stated value of the Series F or F-1 share divided by the Series F Conversion Price. The initial Series F Conversion Price is $0.50 per common share, which is subject to a “Floor Price” equal to 20% of the “Minimum Price” as defined in the Nasdaq Rules. The Series F Conversion Price and the Floor Price are subject to equitable adjustment. In addition, if during the next two years the sum of the common shares outstanding on October 7, 2024 plus shares issuable on conversion of Preferred Stock plus shares issuable on conversion of securities issued in the initial financing of the post-merger company plus shares issued to settle pre-existing liabilities (collectively, the “Measuring Shares”) exceeds 14,848,485, then the Series F Conversion Price will be adjusted to retain the ratio of common share issuable on conversion to the Measuring Shares. Likewise, if the number of Measuring Shares on October 7, 2025 is less than 14,848,485, then the Series F Conversion Price will be adjusted to retain the ration of the Measuring Shares to the number of shares issuable on conversion. The number of shares of common stock into which a holder (other than a holder otherwise subject to Section 16(a) of the Exchange Act) may convert Series F or Series F-1 Preferred Stock will be limited by a Beneficial Ownership Limitation, which restricts the portion of the cumulative voting power in the Company that the holder and its affiliates may own after the conversion to 4.99%.

Series C Preferred Stock

On October 25, 2024, the SPV transferred its remaining Series C Preferred Stock, 117,586 shares, to members in proportion to the membership interest of each. These shares were then converted to 1.1 million shares of the Company’s common stock.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Senior Secured Notes

Purchase Agreement

On November 14, 2024, the Company sold $1.9 million in aggregate principal amount of Senior Secured Notes (the “Notes”) and Pre-Funded Warrants to purchase a total of 363,602 shares of common stock (the “Warrants”) for total gross proceeds of $1.6 million in a private placement offering (the “Offering”).The Notes and Warrants were sold pursuant to a Securities Purchase Agreement (the “Purchase Agreement”) with accredited investors (each, an “Investor” and together the “Investors”).

The Notes have a maturity date of 120 days from issuance, were issued with a 20% original issue discount and do not bear interest unless and until one or more of the customary events of default set forth therein occurs, whereupon each Note will bear interest at a rate of 18% per annum. If the Note remains outstanding for 180 days, the Note also requires a special one-time interest payment of 30% which will increase the principal of each Note accordingly. Upon the occurrence of an event of default, each Investor also has the right to require the Company to pay all or any portion of the Note at a 25% premium. Further, the Company is required to prepay the Notes in connection with certain sales of securities or assets at each Investor’s election in an amount equal to 35% of the gross proceeds from such sales. The Company also has the right to prepay all, but not less than all, of the outstanding amounts under the Notes, at its election. The Notes contain certain restrictive covenants, including covenants precluding the Company and its subsidiaries from incurring indebtedness, transferring assets, changing the nature of its business, and engaging in certain other actions, subject to certain exceptions.

The Warrants have a term of five years from issuance and are exercisable at an exercise price of $0.50 per share (of which $0.499 per share was pre-funded by each Investor). The Warrants will be exercisable beginning upon shareholder approval of the issuance of the Common Stock issuable upon exercise of such Warrants in accordance with the rules of The Nasdaq Capital Market and an increase in the authorized Common Stock of the Company. If at any time after exercising the Warrants, there is no effective registration statement registering, or the prospectus contained therein is not available for use, then the Warrants may also be exercised, in whole or in part, by means of a “cashless exercise.”

The Company also entered in three forms of side letters with the Investors which (i) permitted one Investor which with an affiliate invested $0.4 million to exchange that amount of stated value of shares of Series F Preferred Stock for a $0.4 million 120-day promissory note to another affiliate, which note was issued immediately prior to the closing of the Offering and has substantially identical terms to the Notes issued therein, except it is subordinated with respect to its security interest, (ii) permit two Investors to convert Series D Preferred Stock beginning on April 7, 2025, and (iii) permit two Investors to receive a number of shares of Series F equal to 50% of their investment amount, or $0.1 million each, using the stated value of the Series F Preferred Stock, which is $0.50 per share, to determine the number of shares of Series F Preferred Stock.

Promissory Note

On October 30, 2024, the Company entered into a Promissory Note with LDI for $0.3 million. A balloon payment of the entire outstanding principal balance of the indebtedness together with all accrued interest shall be due and payable in full on November 24, 2024, totaling $0.4 million.

Employment Agreement: Chief Executive Officer

The Merger Agreement provided that, as a condition to closing of the Merger, The Employment Agreement between the Company and Geoffrey Gwin, the Company’s Chief Executive Officer, would be amended in a manner satisfactory to the Company, Beeline and Mr. Gwin. Accordingly, at the time of the Merger, the Company’s Employment Agreement with Geoffrey Gwin was amended as follows:

	●	The performance bonuses in the Employment Agreement were replaced by a bonus of $90,000. On October 15, 2024, the Company issued 180,000 shares of common stock to Mr. Gwin at $0.50 per share in satisfaction of the Company’s bonus obligation.
	●	The Company issued 400,000 shares of common stock to Mr. Gwin, which will vest on the earlier of March 31, 2025 or the date on which Mr. Gwin’s employment is terminated without cause.
	●	The Company covenanted that, in the event that the conversion price of the Series F Preferred Stock is reduced, the Company will issue to Mr. Gwin a number of common shares equal to one percent of the additional shares issued as a result of the adjustment.
	●	The Company agreed to issue 100,000 shares of common stock to Mr. Gwin if he is terminated by the Company without cause.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This section of the Quarterly Report includes “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events about the company or our outlook and involve uncertainties that could significantly impact results. You can identify forward-looking statements by the fact they do not relate to historical or current facts and by the use of words indicating anticipation or speculation such as “believe,” “expect,” “estimate,” “anticipate,” “will be,” “should,” “plan,” “project,” “intend,” “could” and similar words or expressions.

You should not place undue certainty on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. Factors that could cause our expectations to be unfulfilled include those discussed in Item 1A of Part I of our annual report on Form 10-K for the year ended December 31, 2023 entitled “Risk Factors” as well as factors we have not yet anticipated.

Overview

Eastside Distilling, Inc. (the “Company,” “Eastside Distilling,” “we,” “us,” or “our,” below) was incorporated under the laws of Nevada in 2004 under the name of Eurocan Holdings, Ltd. In December 2014, we changed our corporate name to Eastside Distilling, Inc. to reflect our acquisition of Eastside Distilling, LLC. On September 4, 2024, we entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with East Acquisition Sub Inc. (“Merger Sub”) and Beeline Financial Holdings, Inc. (“Beeline”). The Merger closed on October 7, 2024, at which time Beeline became a wholly-owned subsidiary of the Company. Beeline is a mortgage technology company that operates an end-to-end, all-digital, AI-enhanced platform for homeowners and property investors.

On September 4, 2024, we and our subsidiary, Craft Canning + Printing (“Craft C+P”), entered into a Debt Exchange Agreement (the “Debt Agreement”), which closed on October 7, 2024, resulting in 720 barrels of spirits being assigned by the Company to Craft C+P, and Craft C+P being merged into a limited liability company owned by certain creditors of the Company. Given that the effect of the Debt Agreement meets all the initial criteria of ASC Topic 205-20, Presentation of Financial Statements – Discontinued Operations for the classification of held for sale, the assets, liabilities, and operating results of Craft C+P have been classified as held for sale as of September 30, 2024 and December 31, 2023 and for the three and nine month periods ended September 30, 2024 and 2023. The consolidated financial statements for the prior periods have been adjusted to reflect comparable information.

Subsequent to the execution of the Debt Agreement, we organized a subsidiary named “Bridgetown Spirits Corp.” (“Bridgetown”), which was incorporated on October 3, 2024, and assigned to Bridgetown the Company’s business of manufacturing and marketing spirits. Bridgetown manufactures, acquires, blends, bottles, imports, markets and sells a wide variety of alcoholic beverages under recognized brands. Bridgetown’s brands span several alcoholic beverage categories, including whiskey, vodka, rum, and tequila. Bridgetown sells products on a wholesale basis to distributors in open states and through brokers in control states.

Mission and Strategy

Our mission is to offer great products and services in the craft beverage space. Our spirits brands span several alcoholic beverage categories, including whiskey, vodka, rum and tequila. We sell our products on a wholesale basis to distributors through open states, and brokers in control states.

Our strategy is to expand Bridgetown in our regional market where our brand equity and concentration of investment will have the greatest return. Our spirits portfolio is to be positioned as a leading regional craft spirits provider that develops brands, expands geographic presence growing revenue and cash flow.

Segments

As of September 30, 2024, our internal management financial reporting consisted of Bridgetown and corporate. The Bridgetown brands span several alcoholic beverage categories, including whiskey, vodka, rum, and tequila and are sold on a wholesale basis to distributors in open states, and to brokers in control states. Our principal area of operation is in the U.S. Pacific Northwest. Corporate consists of key executive and accounting personnel and corporate expenses such as public company and board costs, as well as interest on debt.

Bridgetown Spirits Corp.

Since 2014, we have developed or acquired award-winning spirits while evolving to meet the growing demand for quality products and services associated within the burgeoning craft and premium beverage trade. Our portfolio includes originals like the Quercus garryana barrel-finished Burnside Whiskey family, Portland Potato Vodka, Hue-Hue Coffee Rum, and Azuñia Tequilas.

	●	Burnside Whiskey Family – Our Burnside Whiskey Family celebrates the unique attributes of the native Oregon Oak tree (Quercus garryana). The unique complexity of each distinct whiskey comes from blending Oregon Oak barrels of differing sizes, char levels, and ages.

	●	Portland Potato Vodka – Our award-winning premium craft vodka is distilled four times to ensure a smooth finish. While most vodka is made from grain, we source award winning premium potato ethanol and blend it with pristine water sourced from Oregon.

	●	Hue-Hue (pronounced “way-way”) Coffee Rum – Premium silver rum is blended with concentrated cold-brewed coffee and a small amount of Demerara sugar. We source fair-trade, single-origin Arabica coffee beans from the Finca El Paternal Estate in Huehuetenango, Guatemala that are lightly roasted for us by Portland Coffee Roasters.

	●	Azuñia Tequilas – Smooth, clean, additive-free tequilas crafted by Rancho Miravalle, a second generation, family-owned-and-operated estate, bursting with authentic flavor from the local terroir of Tequila Valley, Mexico. 100% pure Weber Blue Agave is harvested by hand, roasted in traditional clay hornos, and finished with a natural, open-air fermentation process. It is bottled on-site in small batches using a consistent process to deliver consistent field-to-bottle quality and exclusively exported by Agaveros Unidos de Amatitán.

	●	Eastside Brands – Craft inspired high-quality limited-edition products, which focus on innovation, craftsmanship and curiosity, and creativity.

Recent Developments

Bridgetown reduced its sale of bulk barrels in the third quarter of 2024 and saw total volume decline by 12% in the quarter. The majority of the decline was driven by the reduction in distribution of Azuñia tequila as we realigned the brand with new distribution partners. Spirits case shipments in the quarter were down 12% with Portland Potato Vodka down 6% and Burnside down 17%.

Results of Operations

Overview

Three and Nine Months ended September 30, 2024 Compared to the Three and Nine Months ended September 30, 2023

	Three Months Ended September 30,									Nine Months Ended September 30,
(Dollars in thousands)	2024			2023			Variance			2024			2023			Variance
Sales	$	783		$	849		$	(66	)	$	2,106		$	3,080		$	(974	)
Less customer programs and excise taxes		23			43			(20	)		129			141			(12	)
Net sales		760			806			(46	)		1,977			2,939			(962	)
Cost of sales		560			638			(78	)		1,476			1,940			(464	)
Gross profit		200			168			32			501			999			(498	)
Sales and marketing expenses		218			303			(85	)		699			1,180			(481	)
General and administrative expenses		435			172			263			1,149			1,287			(138	)
(Gain) loss on disposal of property and equipment		(1	)		-			(1	)		(1	)		3			(4	)
Total operating expenses		652			475			177			1,847			2,470			(623	)
Loss from operations		(452	)		(307	)		(145	)		(1,346	)		(1,471	)		125
Interest expense		(409	)		(203	)		(206	)		(965	)		(850	)		(115	)
Other income		33			25			8			37			57			(20	)
Net loss from continuing operations		(828	)		(1,806	)		978			(2,274	)		(3,585	)		1,311
Net loss from discontinued operations		(531	)		(350	)		(181	)		(1,866	)		(1,812	)		(54	)
Net loss		(1,359	)		(2,156	)		797			(4,140	)		(5,397	)		1,257
Preferred stock dividends		(38	)		(38	)		-			(113	)		(113	)		-
Net loss attributable to common shareholders	$	(1,397	)	$	(2,194	)	$	797		$	(4,253	)	$	(5,510	)	$	1,257
Gross margin		26	%		21	%		5	%		25	%		34	%		-9	%

Segment information was as follows for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,									Nine Months Ended September 30,
(Dollars in thousands)	2024			2023			Variance			2024			2023			Variance
Bridgetown
Sales	$	783		$	849		$	(66	)	$	2,106		$	3,080		$	(974	)
Net sales		760			806			(46	)		1,977			2,939			(962	)
Cost of sales		560			638			(78	)		1,476			1,940			(464	)
Gross profit		200			168			32			501			999			(498	)
Total operating expenses		217			303			(86	)		698			1,183			(485	)
Net income (loss)	$	18		$	(110	)	$	128		$	(162	)	$	(130	)	$	(32	)
Gross margin		26	%		21	%		5	%		25	%		34	%		-9	%

Corporate
Total operating expenses	$	435		$	172		$	263		$	1,149		$	1,287		$	(138	)
Net loss	$	(846	)	$	(1,696	)	$	850		$	(2,112	)	$	(3,455	)	$	1,343

Corporate consists of key executive and accounting personnel and corporate expenses such as public company and board costs, as well as interest on debt.

Sales

Sales were $2.1 million and $3.1 million for the nine months ended September 30, 2024 and 2023, respectively, and $0.8 million for both the three months ended September 30, 2024 and 2023.

During the nine months ended September 30, 2024 and 2023, we sold 65 and 250 barrels, respectively, for gross proceeds of $0.1 million and $0.6 million, respectively. Spirits sales decreased for the nine months ended September 30, 2024 due to lower sales of tequila and bourbon. For the nine months ended September 30, 2024, spirits sold 17,431 cases compared to 19,485 cases in the prior year.

During the three months ended September 30, 2024, we sold 5,868 cases compared to 6,849 cases in the prior year and 65 barrels for gross proceeds of $0.1 million. We rationalize our barrel inventory by repositioning our bulk spirits portfolio for anticipated future products and forecasted demand.

Customer programs and excise taxes

Customer programs and excise taxes were $0.1 million for both the nine months ended September 30, 2024 and 2023, and minimal for both the three months ended September 30, 2024 and 2023.

Cost of Sales

Cost of sales consists of all direct costs for raw materials, labor, overhead, packaging, and in-bound freight charges. Cost of sales were $1.5 million and $1.9 million for the nine months ended September 30, 2024 and 2023, respectively, and $0.6 million for both the three months ended September 30, 2024 and 2023. Cost of sales decreased for the nine months ended September 30, 2024 due to lower bulk spirits and distributor sales, in addition to lower tequila pricing and raw material savings.

Gross Profit

Gross profit is calculated by subtracting the cost of products sold and services rendered from net sales. Gross profit was $0.5 million and $1.0 million for the nine months ended September 30, 2024 and 2023, respectively, and $0.2 million for both the three months ended September 30, 2024 and 2023.

Gross margin is gross profit stated as a percentage of net sales. Our gross margin was 25% and 34% for the nine months ended September 30, 2024 and 2023, respectively, 26% and 21% for the three months ended September 30, 2024 and 2023, respectively.

Gross profit and gross margin decreased for the nine months ended September 30, 2024 primarily due to bulk spirit sales during the nine months ended September 30, 2023. Gross margin increased for the three months ended September 30, 2024 due to bulk spirits sales and continued cost savings initiatives that began in 2023 and continued into 2024.

Sales and Marketing Expenses

Sales and marketing expenses were $0.7 million and $1.2 million for the nine months ended September 30, 2024 and 2023, respectively, and $0.2 million and $0.3 million for the three months ended September 30, 2024 and 2023, respectively, due to reduced headcount as part of sprits restructuring.

General and Administrative Expenses

General and administrative expenses were $1.1 million and $1.3 million for the nine months ended September 30, 2024 and 2023, respectively, and $0.4 million and $0.2 million for the three months ended September 30, 2024, respectively, due to a reversal of $0.1 million related to compensation expense in the third quarter of 2023.

Interest Expense

Interest expense was $1.0 million and $0.9 million for the nine months ended September 30, 2024 and 2023, respectively, and $0.4 million and $0.2 million for the three months ended September 30, 2024 and 2023, respectively, due to the Debt Satisfaction Agreement on September 29, 2023.

Loss on Debt to Equity Conversion

On September 29, 2023, we issued to the SPV 296,722 shares of common stock and 200,000 shares of its Series C Preferred Stock. In exchange for that equity, our debts to the members of the SPV were reduced by a total of $6.5 million and we recognized a loss on the debt to equity conversion was $1.3 million for both the nine and three months ended September 30, 2023.

Net Income (Loss)

Net loss was $2.3 million and $3.6 million for the nine months ended September 30, 2024 and 2023, respectively, and $0.8 million and $1.8 million for the three months ended September 30, 2024 and 2023, respectively, primarily due to the Debt Satisfaction Agreement.

Preferred Stock Dividends

Preferred stock dividends were $0.1 million and $37,500 and for the nine and three months ended September 30, 2024 and 2023, respectively, representing the Series B preferred stock dividend of 6% per annum.

Liquidity and Capital Resources

Through September 30, 2024, our primary capital requirements have been for cash used in operating activities and for the repayment of debt. Funds for our cash and liquidity needs have historically not been generated from operations but rather from short-term credit in the form of extended payment terms from suppliers as well as proceeds from loans and the sale of convertible debt and equity. We have been dependent on raising capital from debt and equity financing to meet our operating needs.

As a result of these historical practices, we had an accumulated deficit of $87.0 million as of September 30, 2024, having incurred a net loss of $4.1 million during the nine months ended September 30, 2024. As of September 30, 2024, we had $0.3 million of cash on hand with negative working capital of $12.6 million.

On October 7, 2024 we satisfied all secured debt and $2.5 million of unsecured debt by assigning ownership of Craft C+P to the creditors of that debt, who additionally surrendered to us 44,279 shares of Series C Preferred Stock. The transaction substantially reduced our debt obligations. On the same day, however, Beeline merged into our wholly-owned subsidiary. Beeline used $8.6 million of cash in operating activities during 2023 and $10.1 million of cash in operating activities during the first six months of 2024, funds that it obtained from a variety of debt and equity financing transactions.

Our ability, therefore, to meet our ongoing operating cash needs over the next 12 months will depend, in part, on the success of Beeline in expanding sales and achieving cash-positive operations. In larger part, however, our ability to meet near-term operating cash needs will depend on our success in securing debt and/or equity financing as needed. On November 14, 2024, we closed on a sale of $1.9 million in secured debt, from which we gained $1.6 million in net cash before payment of the transaction costs. These funds should be adequate to fund our cash flow requirement into early 2025. The availability of additional financing will be largely dependent on the operating success of Beeline, including improved gross margins as well as operational improvements, which will be necessary to attract investors.

Our cash flow results for the nine months ended September 30, 2024 and 2023 (which do not include any cash flows attributable to Beeline) were as follows:

(Dollars in thousands)	2024			2023
Net cash flows provided by (used in):
Operating activities	$	(1.6	)	$	(1.7	)
Investing activities	$	0.1		$	(0.1	)
Financing activities	$	1.5		$	1.4

Operating Activities

Total cash used in operating activities was $1.6 million during the nine months ended September 30, 2024 compared to $1.7 million used during the nine months ended September 30, 2023. The use of cash was similar, even as we lost $1.3 million more during the 2023 period, primarily because the 2023 loss included a $1.3 million loss on the debt to equity conversion that occurred during the nine months ended September 30, 2023

Investing Activities

Total cash provided by investing activities was $0.1 million during the nine months ended September 30, 2024, representing net proceeds from the sale by Craft C+P of fixed assets. During the nine months ended September 30, 2023, cash used in investing activities was $0.1 million representing net purchases of fixed assets.

Financing Activities

Total cash provided by financing activities was $1.5 million during the nine months ended September 30, 2024, consisting of $1.1 million from the sale of secured notes in May 2024 and $0.4 million from an at-the-market sale of common stock in September 2024. Total cash provided by financing activities was $1.4 million during the nine months ended September 30, 2023 primarily consisted of proceeds from the issuance of stock.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. These items are monitored and analyzed by management for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if past experience or other assumptions do not turn out to be substantially accurate.

In connection with the preparation of our financial statements for the nine months ended September 30, 2024, there was one accounting estimate we made that was subject to a high degree of uncertainty and was critical to our results, as follows:

Intangible Assets

On September 12, 2019, we purchased the Azuñia brand, the direct sales team, existing product inventory, supply chain relationships and contractual agreements from Intersect Beverage, LLC, an importer and distributor of tequila and related products. The Azuñia brand has been determined to have an indefinite life and will not be amortized. We do, however, on an annual basis, test the indefinite life assets for impairment. If the carrying value of the indefinite life assets are found to be impaired, then we will record an impairment loss and reduce the carrying value of the asset’s estimate the useful life of the brand and amortize the asset over the remainder of its useful life.

We estimate the brand’s fair value using market information to estimate future cash flows and will impair it when its carrying amount exceeds its estimated fair value, in which case we will write it down to its estimated fair value. We consider market values for similar assets when available. Considerable management judgment is necessary to estimate fair value, including making assumptions about future cash flows, net sales and discount rates.

We have the option, before quantifying the fair value, to evaluate qualitative factors to assess whether it is more likely than not that our brand is impaired. If we determine that is not the case, then we are not required to quantify the fair value. That assessment also takes considerable management judgment.

As of December 31, 2023, as a result of the review described above, we found the Azuñia brand to be impaired and reduced its carrying cost by $0.4 million.

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

ITEM 4 – CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”) that are designed to provide reasonable assurances that the information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

We conducted an evaluation (pursuant to Rule 13a-15(b) of the Exchange Act)), under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e)) as of the end of the period covered by this report. Based on the evaluation, the Chief Executive Officer and Chief Financial Officer has concluded that these disclosure controls and procedures were effective as of September 30, 2024.

There were no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended September 30, 2024, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

ITEM 1 – LEGAL PROCEEDINGS

On December 15, 2020, Grover Wickersham filed a complaint in the United States District Court for the District Court of Oregon against the Company. Mr. Wickersham, the former CEO and Chairman of the Board of the Company, has asserted causes of action for fraud in the inducement, breach of contract, breach of the implied covenant of good faith and fair dealing, defamation, interference with economic advantage, elder financial abuse, and dissemination of false and misleading proxy materials. During June 2024, this case was settled for an immaterial amount.

We are not currently subject to any other material legal proceedings; however, we could be subject to legal proceedings and claims from time to time in the ordinary course of our business, or legal proceedings we considered immaterial may in the future become material. Regardless of the outcome, litigation can, among other things, be time consuming and expensive to resolve, and divert management resources.

ITEM 1A – RISK FACTORS

There have been no material changes in our risk factors from those previously disclosed in our annual report on Form 10-K for the year ended December 31, 2023, except for the following additions:

If the Company is unable to remedy its shareholder equity deficiency, its common stock may be removed from Nasdaq.

On April 8, 2024, the Staff of the Listing Qualifications Department of the Nasdaq Stock Market notified the Company that it had fallen out of compliance with the requirements for continued listing of the Company’s common stock on Nasdaq. Specifically, Nasdaq Listing Rule 5550(b)(1) requires that the stockholders’ equity of a listed company must exceed $2.5 million. On June 3, 2024 the Staff extended to October 7, 2024 the date by which the Company could regain compliance with the Equity Rule. Based upon the closing of Merger and the Debt Agreement on October 7, 2024, the Company has regained compliance with the Equity Rule. Nasdaq has advised the Company, however, that it will continue to monitor the Company’s ongoing compliance with the Equity Rule and, if at the time when the Company files its next periodic report with the SEC – i.e. its Annual Report on Form 10-K for the year ending December 31, 2024 - the Company does not evidence compliance with the Equity Rule, the Company’s common stock may be subject to delisting from Nasdaq.

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no unregistered sales of equity securities during the third quarter of 2024 that have not been previously reported.

The Company did not repurchase any of its equity securities that were registered under Section 12 of the Securities Exchange Act during the third quarter of fiscal year 2024.

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 – MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 – OTHER INFORMATION

During the quarter ended September 30, 2024, no director or officer adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement, as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6 – EXHIBITS

Exhibit No.		Description

3.1		Amended and Restated Articles of Incorporation of the Company, as presently in effect, filed as Exhibit 3.1 to the Registration Statement on Form S-1 filed on November 14, 2011 (File No. 333-177918) and incorporated by reference herein.
3.2		Articles of Merger, filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated November 19, 2014 and filed on November 25, 2019 and incorporated by reference herein.
3.3		Certificate of Change, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated October 6, 2016 and filed on October 11, 2016 and incorporated by reference herein.
3.4		Certificate of Change, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K dated June 14, 2017 and filed on June 15, 2017 and incorporated by reference herein.
3.5		Certificate of Amendment of Articles of Incorporation, filed as an Exhibit to the Company’s Current Report on Form 8-K dated August 13, 2021 and filed on August 31, 2021 and incorporated by reference herein.
3.6		Certificate of Amendment to Designation of Series B Preferred Stock, filed as an Exhibit to the Company’s Current Report on Form 8-K filed on October 25, 2021 and incorporated herein by reference.
3.7		Certificate of Change Pursuant to NRS 78.209 – filed May 3, 2023, filed as an Exhibit to the Company’s Current Report on Form 8-K filed on May 9, 2023 and incorporated herein by reference.
3.8		Certificate of Designation of Series C Preferred Stock filed on September 28, 2023 - filed as an Exhibit to the Company’s Current Report on Form 8-K filed on September 29, 2023 and incorporated herein by reference
3.9		Certificate of Amendment of Articles of Incorporation - filed on January 2, 2024, filed as an Exhibit to the Company’s Current Report on Form 8-K filed on January 4, 2024 and incorporated herein by reference.
3.10		Certificate of Designation of Series D Preferred Stock, filed as Exhibit 3-a to the Current Report on Form 8-K filed on October 7, 2024 and incorporated herein by reference
3.11		Certificate of Designation of Series E Preferred Stock, filed as Exhibit 3-b to the Current Report on Form 8-K filed on October 7, 2024 and incorporated herein by reference
3.12		Certificate of Designation of Series F Preferred Stock, filed as Exhibit 3-c to the Current Report on Form 8-K filed on October 7, 2024 and incorporated herein by reference
3.13		Certificate of Designation of Series F-1 Preferred Stock, filed as Exhibit 3-d to the Current Report on Form 8-K filed on October 7, 2024 and incorporated herein by reference
3.10		Second Amended and Restated Bylaws of the Registrant, filed as Exhibit 10-a to the Registrant’s Current Report on Form 8-K dated August 14, 2024 and filed on August 16, 2024 and incorporated by reference herein.
10.1		Eastside Distilling, Inc. 2016 Equity Incentive Plan, filed as Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 filed on February 28, 2019 and incorporated by reference herein.
10.2		Agreement and Plan of Merger and Reorganization by and among Eastside Distilling, Inc., East Acquisition Sub, Inc. and Beeline Financial Holdings, Inc. dated September 4, 2024, filed as Exhibit 10-a to the Current Report on Form 8-K filed on September 5, 2024, and incorporated herein by reference.
10.3		First Amendment to Agreement and Plan of Merger and Reorganization by and among Eastside Distilling, Inc., East Acquisition Sub, Inc. and Beeline Financial Holdings, Inc. dated October 7, 2024, filed as Exhibit 10-b to the Current Report on Form 8-K filed on October 7, 2024, and incorporated herein by reference.
10.4		Executive Employment Agreement dated July 3, 2024 between Eastside Distilling, Inc. and Geoffrey Gwin, filed as Exhibit 10-a to the Company’s Current Report on Form 8-K filed on July 10, 2024 and incorporated herein by reference.
10.5		Amendment No. 1 dated October 7, 2024 to Executive Employment Agreement dated July 3, 2024 between Eastside Distilling, Inc. and Geoffrey Gwin, filed as Exhibit 10-d to the Company’s Current Report on Form 8-K filed on October 7, 2024 and incorporated herein by reference.
10.6		Form of Securities Purchase Agreement dated November 13, 2024 – filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 15, 2024 and incorporated herein by reference.
10.7		Form of Senior Secured Note dated November 14, 2024 – filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 15, 2024 and incorporated herein by reference.
10.8		Form of Shareholder Pledge Agreement dated November 14, 2024 – filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on November 15, 2024 and incorporated herein by reference.
10.9		Form of Security and Pledge Agreement dated November 14, 2024 – filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on November 15, 2024 and incorporated herein by reference.
31.1 *		Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
31.2 *		Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
32.1 *		Certification of Chief Executive Office pursuant to 18 U.S.C. Section 1350.
32.2 *		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Schema Linkbase Document
101.CAL		Inline XBRL Taxonomy Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Labels Linkbase Document
101.PRE		Inline XBRL Taxonomy Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith.

SIGNATURES

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 thereunto duly authorized.

	EASTSIDE DISTILLING, INC.

Date: November 15, 2024	By:	/s/ Geoffrey Gwin
		Geoffrey Gwin
		Chief Executive Officer

Date: November 15, 2024	By:	/s/ Christopher R. Moe
		Christopher R. Moe
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Geoffrey Gwin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Eastside Distilling, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 15, 2024

/s/ Geoffrey Gwin
Geoffrey Gwin
Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Christopher R. Moe, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Eastside Distilling, Inc.;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 15, 2024

/s/ Christopher R. Moe
Christopher R. Moe
Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

I, Geoffrey Gwin, Chief Executive Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Eastside Distilling, Inc. on Form 10-Q for the period ended September 30, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Eastside Distilling, Inc.

Date: November 15, 2024

	By:	/s/ Geoffrey Gwin
	Name:	Geoffrey Gwin
	Title:	Chief Executive Officer

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

I, Christopher R. Moe, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report of Eastside Distilling, Inc. on Form 10-Q for the period ended September 30, 2024 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in such Quarterly Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Eastside Distilling, Inc.

Date: November 15, 2024

	By:	/s/ Christopher R. Moe
	Name:	Christopher R. Moe
	Title:	Chief Financial Officer

Cover - $ / shares	9 Months Ended
Cover - $ / shares	Sep. 30, 2024	Nov. 15, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
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	755 Main Street
Entity Address, Address Line Two	Building 4
Entity Address, Address Line Three	Suite 3
Entity Address, City or Town	Monroe
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06468
City Area Code	(484)
Local Phone Number	800-9154
Title of 12(b) Security	Common Stock, $0.0001 par value
Trading Symbol	EAST
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		4,991,065
Entity Listing, Par Value Per Share	$ 0.0001

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash	$ 310	$ 306
Trade receivables, net	105	163
Inventories	1,793	2,686
Prepaid expenses and other current assets	176	113
Current assets held for sale	2,640	1,269
Total current assets	5,024	4,537
Property and equipment, net	112	169
Right-of-use assets	430	680
Intangible assets, net	4,178	4,178
Other assets, net	182	247
Non-current assets held for sale	6,298	7,669
Total Assets	16,224	17,480
Current liabilities:
Accounts payable	1,388	1,062
Accrued liabilities	418	465
Current portion of secured credit facilities, related party	3,447
Current portion of secured credit facilities, net of debt issuance costs	728
Current portion of notes payable	8,155	486
Current portion of notes payable, related party	92	92
Current portion of lease liabilities	191	223
Other current liability, related party	85
Current liabilities held for sale	3,124	1,877
Total current liabilities	17,628	4,205
Lease liabilities, net of current portion	213	458
Secured credit facilities, related party		2,700
Secured credit facilities, net of debt issuance costs		342
Notes payable, net of current portion		7,556
Non-current liabilities held for sale	843	1,366
Total liabilities	18,684	16,627
Commitments and contingencies (Note 14)
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 6,000,000 shares authorized as of September 30, 2024 and December 31, 2023; and 3,140,625 shares and 1,705,987 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
Additional paid-in capital	84,499	83,559
Accumulated deficit	(86,959)	(82,706)
Total stockholders’ equity (deficit)	(2,460)	853
Total Liabilities and Stockholders’ Equity (Deficit)	16,224	17,480
Series B Preferred Stock [Member]
Stockholders’ equity (deficit):
Preferred stock, value
Series C Preferred Stock [Member]
Stockholders’ equity (deficit):
Preferred stock, value

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	6,000,000	6,000,000
Common stock, shares issued	3,140,625	1,705,987
Common stock, shares outstanding	3,140,625	1,705,987
Series B Preferred Stock [Member]
Preferred Stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	2,500,000	2,500,000
Preferred stock, shares outstanding	2,500,000	2,500,000
Series C Preferred Stock [Member]
Preferred Stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	240,000	240,000
Preferred stock, shares issued	117,586	200,000
Preferred stock, shares outstanding	117,586	200,000

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Sales	$ 783	$ 849	$ 2,106	$ 3,080
Less customer programs and excise taxes	23	43	129	141
Net sales	760	806	1,977	2,939
Cost of sales	560	638	1,476	1,940
Gross profit	200	168	501	999
Operating expenses:
Sales and marketing expenses	218	303	699	1,180
General and administrative expenses	435	172	1,149	1,287
(Gain) loss on disposal of property and equipment	(1)		(1)	3
Total operating expenses	652	475	1,847	2,470
Loss from operations	(452)	(307)	(1,346)	(1,471)
Other income (expense), net
Interest expense	(409)	(203)	(965)	(850)
Loss on debt to equity conversion		(1,321)		(1,321)
Other income	33	25	37	57
Total other income (expense), net	(376)	(1,499)	(928)	(2,114)
Loss before income taxes	(828)	(1,806)	(2,274)	(3,585)
Provision for income taxes
Net loss from continuing operations	(828)	(1,806)	(2,274)	(3,585)
Net loss from discontinued operations	(531)	(350)	(1,866)	(1,812)
Net loss	(1,359)	(2,156)	(4,140)	(5,397)
Preferred stock dividends	(38)	(38)	(113)	(113)
Net loss attributable to common shareholders	$ (1,397)	$ (2,194)	$ (4,253)	$ (5,510)
Basic net loss per common share	$ (0.66)	$ (2.00)	$ (2.28)	$ (5.93)
Basic weighted average common shares outstanding	2,116	1,097	1,862	929

Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) - USD ($)	Preferred Stock [Member] Series B Preferred Stock [Member]	Preferred Stock [Member] Series C Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022				$ 73,505,000	$ (75,021,000)	$ (1,516,000)
Balance, shares at Dec. 31, 2022	2,500		810
Issuance of common stock for services by third parties				83,000		83,000
Issuance of common stock for services by third parties, shares			11
Issuance of common stock for services by employees				60,000		60,000
Issuance of common stock for services by employees, shares			12
Preferred stock dividends					(38,000)	(38,000)
Preferred stock dividends, shares
Net loss					(1,598,000)	(1,598,000)
Balance at Mar. 31, 2023				73,648,000	(76,657,000)	(3,009,000)
Balance, shares at Mar. 31, 2023	2,500		833
Balance at Dec. 31, 2022				73,505,000	(75,021,000)	(1,516,000)
Balance, shares at Dec. 31, 2022	2,500		810
Net loss						(5,397,000)
Balance at Sep. 30, 2023				83,185,000	(80,531,000)	2,654,000
Balance, shares at Sep. 30, 2023	2,500	200	1,538
Balance at Mar. 31, 2023				73,648,000	(76,657,000)	(3,009,000)
Balance, shares at Mar. 31, 2023	2,500		833
Preferred stock dividends					(37,000)	(37,000)
Net loss					(1,643,000)	(1,643,000)
Shares issued for cash, net of issuance costs				651,000		651,000
Shares issued for cash, net of issuance costs, shares			135
Balance at Jun. 30, 2023				74,299,000	(78,337,000)	(4,038,000)
Balance, shares at Jun. 30, 2023	2,500		968
Issuance of common stock for services by third parties				373,000		373,000
Issuance of common stock for services by third parties, shares			121
Issuance of common stock for services by employees				33,000		33,000
Issuance of common stock for services by employees, shares			11
Preferred stock dividends					(38,000)	(38,000)
Net loss					(2,156,000)	(2,156,000)
Shares issued for cash, net of issuance costs				649,000		649,000
Shares issued for cash, net of issuance costs, shares			141
Debt to equity conversion				7,831,000		7,831,000
Debt to equity conversion, shares		200	297
Balance at Sep. 30, 2023				83,185,000	(80,531,000)	2,654,000
Balance, shares at Sep. 30, 2023	2,500	200	1,538
Balance at Dec. 31, 2023				83,559,000	(82,706,000)	853,000
Balance, shares at Dec. 31, 2023	2,500	200	1,706
Issuance of common stock for services by third parties				2,000		2,000
Issuance of common stock for services by third parties, shares			2
Preferred stock dividends					(38,000)	(38,000)
Net loss					(1,293,000)	(1,293,000)
Balance at Mar. 31, 2024				83,561,000	(84,037,000)	(476,000)
Balance, shares at Mar. 31, 2024	2,500	200	1,708
Balance at Dec. 31, 2023				83,559,000	(82,706,000)	853,000
Balance, shares at Dec. 31, 2023	2,500	200	1,706
Net loss						(4,140,000)
Balance at Sep. 30, 2024				84,499,000	(86,959,000)	(2,460,000)
Balance, shares at Sep. 30, 2024	2,500	118	3,140
Balance at Mar. 31, 2024				83,561,000	(84,037,000)	(476,000)
Balance, shares at Mar. 31, 2024	2,500	200	1,708
Issuance of common stock for services by third parties
Issuance of common stock for services by third parties, shares
Issuance of common stock for services by employees				67,000		67,000
Issuance of common stock for services by employees, shares			55
Preferred stock dividends					(37,000)	(37,000)
Net loss					(1,488,000)	(1,488,000)
Balance at Jun. 30, 2024				83,628,000	(85,562,000)	(1,934,000)
Balance, shares at Jun. 30, 2024	2,500	200	1,763
Preferred stock dividends				150,000	(38,000)	112,000
Preferred stock dividends, shares			178
Net loss					(1,359,000)	(1,359,000)
Shares issued for cash, net of issuance costs				392,000		392,000
Shares issued for cash, net of issuance costs, shares			442
Common stock issued for conversion of Series C Preferred shares
Common stock issued for conversion of Series C Preferred shares, shares		(82)	757
Warrants issued in relation to debt issuance				329,000		329,000
Balance at Sep. 30, 2024				$ 84,499,000	$ (86,959,000)	$ (2,460,000)
Balance, shares at Sep. 30, 2024	2,500	118	3,140

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended		12 Months Ended
	Sep. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Cash Flows From Operating Activities:
Net loss	$ (1,359)	$ (1,293)	$ (2,156)	$ (1,598)	$ (4,140)	$ (5,397)
Net loss from discontinued operations					1,866	1,812
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization					99	114
Bad debt expense						19
Impairment loss						(25)
(Gain) loss on disposal of assets	(1)				(1)	3
Inventory reserve					(2)	(8)
Loss on debt to equity conversion			1,321			1,321
Stock dividend payable						(113)
Amortization of debt issuance costs					236
Interest accrued to secured credit facilities					27	71
Interest accrued to notes payable					481
Payment of accrued interest on secured credit facilities						(142)
Interest accrued to secured credit facilities, related party					183
Payment of accrued interest on secured credit facilities, related party					(81)
Interest accrued for amounts due to related parties						348
Payment of accrued interest on amounts due to related parties						(348)
Issuance of common stock for services by third parties					2	94
Issuance of common stock for services by employees					67	456
Changes in operating assets and liabilities:
Trade receivables, net					59	54
Inventories					259	597
Prepaid expenses and other assets					(1)	(48)
Right-of-use assets					250	233
Accounts payable					(39)	93
Accrued liabilities					(47)	(632)
Other liabilities, related party					81	556
Net lease liabilities					(276)	(236)
Net cash used in operating activities of continuing operations					(977)	(1,178)
Net cash used in operating activities of discontinued operations					(626)	(541)
Net cash used in operating activities					(1,603)	(1,719)
Cash Flows From Investing Activities:
Proceeds from sale of fixed assets						51
Purchases of property and equipment						(60)
Net cash used in investing activities of continuing operations						(9)
Net cash provided by (used in) investing activities of discontinued operations					114	(111)
Net cash provided by (used in) investing activities					114	(120)
Cash Flows From Financing Activities:
Proceeds from issuance of stock					393	1,300
Proceeds from secured credit facilities					1,100	56
Net cash provided by financing activities					1,493	1,356
Net increase (decrease) in cash					4	(483)
Cash at the beginning of the period		$ 306		$ 612	306	612	$ 612
Cash at the end of the period	$ 310		$ 129		310	129	$ 306
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest					12	1,056
Cash paid for amounts included in measurement of lease liabilities					234	254
Supplemental Disclosure of Non-Cash Financing Activity
Dividends issued					150
Warrants issued in relation to debt issuance					329
Debt exchanged for equity						6,510
Accrued interest rolled into notes payable						$ 241

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (1,359)	$ (1,488)	$ (1,293)	$ (2,156)	$ (1,643)	$ (1,598)	$ (4,140)	$ (5,397)

Description of Business

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

1. Description of Business

Liquidity

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Liquidity

2. Liquidity

The Company had an accumulated deficit of $87.0 million as of September 30, 2024, having incurred a net loss of $4.1 million during the nine months ended September 30, 2024.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

3. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

Use of Estimates

Revenue Recognition

In the Craft C+P segment, sales are recognized when printed cans are delivered or when mobile filling services are performed.

Customer Programs

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Excise Taxes

Cost of Sales

Sales and Marketing Expenses

General and Administrative Expenses

Stock-Based Compensation

Concentrations

Fair Value Measurements

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

	Level 1:	Fair value of the asset or liability is determined using cash or unadjusted quoted prices in active markets for identical assets or liabilities.

	Level 2:	Fair value of the asset or liability is determined using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

	Level 3:	Fair value of the asset or liability is determined using unobservable inputs that are significant to the fair value measurement and reflect management’s own assumptions regarding the applicable asset or liability.

Items Measured at Fair Value on a Nonrecurring Basis

Inventories

Property and Equipment

Intangible Assets / Goodwill

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Long-lived Assets

Comprehensive Income

The Company did not have any other comprehensive income items in either of the nine month periods ended September 30, 2024 or 2023.

Accounts Receivable Factoring Program

Recently Issued Accounting Pronouncements

Discontinued Operations

9 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

4. Discontinued Operations

Discontinued Operations

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Assets and liabilities related to Craft C+P were as follows:

(Dollars in thousands)	September 30, 2024		December 31, 2023
Assets
Current assets:
Cash	$	135	$	96
Trade receivables, net		756		396
Inventories		1,071		526
Prepaid expenses and other current assets		678		250
Total current assets		2,640		1,268
Property and equipment, net		4,156		4,598
Right-of-use assets		1,415		1,923
Intangible assets, net		517		827
Other assets, net		210		321
Total Assets	$	8,938	$	8,937

Liabilities
Current liabilities:
Accounts payable	$	2,130	$	1,014
Accrued liabilities		266		110
Deferred revenue		42		88
Current portion of lease liabilities		686		665
Total current liabilities		3,124		1,877
Lease liabilities, net of current portion		843		1,366
Total liabilities	$	3,967	$	3,243

Income and expense related to Craft C+P were as follows for the nine months ended September 30, 2024 and 2023:

(Dollars in thousands)	2024			2023
Sales	$	6,775		$	5,637
Less customer programs and excise taxes		117			79
Net sales		6,658			5,558
Cost of sales		6,322			5,378
Gross profit		336			180
Operating expenses:
Sales and marketing expenses		45			81
General and administrative expenses		2,355			2,103
Gain on disposal of property and equipment		(195	)		(171	)
Total operating expenses		2,205			2,013
Loss from operations		(1,869	)		(1,833	)
Other income (expense), net
Interest expense		-			(12	)
Other income		3			33
Total other income, net		3			21
Loss before income taxes		(1,866	)		(1,812	)
Provision for income taxes		-			-
Net loss	$	(1,866	)	$	(1,812	)

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Business Segment Information

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Business Segment Information

5. Business Segment Information

Segment information was as follows for the nine months ended September 30:

Schedule of Segment Information

(Dollars in thousands)	2024			2023
Bridgetown
Sales	$	2,106		$	3,080
Net sales		1,977			2,939
Cost of sales		1,476			1,940
Gross profit		501			999
Total operating expenses		698			1,183
Net loss		(162	)		(130	)
Gross margin		25	%		34	%

Depreciation and amortization		99			114

Corporate
Total operating expenses	$	1,149		$	1,287
Net loss		(2,112	)		(3,455	)

Interest expense		965			850
Significant noncash items:
Stock compensation		-			98

Inventories

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Inventories

6. Inventories

Inventories consisted of the following:

Schedule of Inventories

(Dollars in thousands)	September 30, 2024		December 31, 2023
Raw materials	$	770	$	1,740
Finished goods		1,023		946
Total inventories	$	1,793	$	2,686

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Prepaid Expenses and Other Current Assets

9 Months Ended

Sep. 30, 2024

Prepaid Expenses And Other Current Assets

Prepaid Expenses and Other Current Assets

7. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

(Dollars in thousands)	September 30, 2024		December 31, 2023
Prepayment of inventory	$	69	$	52
Other		107		61
Total prepaid expenses and other current assets	$	176	$	113

Property and Equipment

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Property and Equipment

8. Property and Equipment

Property and equipment consisted of the following:

Schedule of Property and Equipment

(Dollars in thousands)	September 30, 2024			December 31, 2023			Useful Life (in years)
Furniture and fixtures	$	625		$	625			3.0 - 7.0
Leasehold improvements		1,386			1,386			3.5 - 5.0
Vehicle		27			27			7.0
Total cost		2,038			2,038
Less accumulated depreciation		(1,926	)		(1,869	)
Total property and equipment, net	$	112		$	169

Intangible Assets

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

9. Intangible Assets

Intangible assets consisted of the following:

Schedule of Intangible Assets

(Dollars in thousands)	September 30, 2024		December 31, 2023
Permits and licenses	$	25	$	25
Azuñia brand		4,153		4,153
Intangible assets	$	4,178	$	4,178

Other Assets

9 Months Ended

Sep. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Other Assets

10. Other Assets

Other assets consisted of the following:

Schedule of Other Assets

(Dollars in thousands)	September 30, 2024			December 31, 2023
Product branding	$	396		$	396
Deposits		171			172
Other		-			23
Total other assets		567			591
Less accumulated amortization		(385	)		(344	)
Other assets, net	$	182		$	247

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Amortization expense totalled $41,250 and $42,857 for the nine months ended September 30, 2024 and 2023, respectively.

The deposits represent the office lease deposits and cash collateral for the Company’s credit cards.

Leases

9 Months Ended

Sep. 30, 2024

Leases

Leases

11. Leases

Maturities of lease liabilities as of September 30, 2024 were as follows:

(Dollars in thousands)	Operating Leases			Weighted- Average Remaining Term in Years
2024	$	58
2025		210
2026		164
2027		-
2028		-
Thereafter		-
Total lease payments		432
Less imputed interest (based on 6.1% weighted-average discount rate)		(28	)
Present value of lease liability	$	404			2.06

Notes Payable

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Notes Payable

12. Notes Payable

Notes payable consisted of the following:

Schedule of Notes Payable

(Dollars in thousands)	September 30, 2024			December 31, 2023

Promissory notes payable bearing interest of 6.0%. The notes have a 36-month term with maturity in April 2024. Accrued interest is paid in accordance with a monthly amortization schedule.	$	486		$	486
Amended and restated promissory notes payable bearing interest of 8.0%. The notes mature in March 2025. Accrued interest is paid in accordance with an amortization schedule.		7,669			7,556
Total notes payable		8,155			8,042
Less current portion		(8,155	)		(486	)
Long-term portion of notes payable	$	-		$	7,556

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

The Company paid $11,588 and $1.1 million in interest on notes for the nine months ended September 30, 2024 and 2023, respectively.

Maturities on notes payable as of September 30, 2024 were as follows:

Schedule of Maturities on Notes payable

(Dollars in thousands)
2024		486
2025		7,669
2026		-
2027		-
2028		-
Thereafter		-
Total	$	8,155

Secured Credit Facilities

9 Months Ended

Sep. 30, 2024

Secured Credit Facilities

Secured Credit Facilities

13. Secured Credit Facilities

Note Purchase Agreement

6% Secured Convertible Promissory Notes

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

The Notes are secured by a subordinated security interest in the Company’s assets pursuant to the terms of a Security Agreement entered into between the Company and the Subscribers.

2024 Secured Notes

On May 15, 2024, the Company entered into a Loan Agreement with the SPV, Aegis, Bigger, District 2, and LDI.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

14. Commitments and Contingencies

Legal Matters

Net Income (Loss) per Common Share

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Net Income (Loss) per Common Share

15. Net Income (Loss) per Common Share

Stockholders’ Equity

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Stockholders’ Equity

16. Stockholders’ Equity

Debt Satisfaction Agreement

	●	the principal balance of the Secured Promissory Note issued by the Company to Aegis on October 6, 2022 was reduced by $1.9 million;

	●	the Company’s debt to LDI of $1.4 million arising from advances made by LDI to the Company during the past 10 months was eliminated;

	●	the aggregate principal balance of the Secured Convertible Promissory Notes issued by the Company to Bigger in April and May of 2021 was reduced by $1.6 million; and

	●	the aggregate principal balance of the Secured Convertible Promissory Notes issued by the Company to District 2 in April and May of 2021 was reduced by $1.6 million.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Further pursuant to the DSA:

	●	the maturity date of the secured debt listed above as well as unsecured notes issued by the Company and held by Bigger and District 2 in the aggregate amount of $7.4 million was deferred to March 31, 2025 and the interest rate on all such debt was increased to 8% per annum;

	●	the Company, Aegis, Bigger and District 2 entered into an Intercreditor Agreement, pursuant to which the remaining secured debt obligations of the Company to Aegis, Bigger and District 2 were made pari passu;

	●	the Common Stock Purchase Warrant issued by the Company to TQLA LLC on March 21, 2022, which permits TQLA LLC to purchase up to 145,834 shares of the Company’s common stock, was amended to prevent any exercise of the Warrant that would result in the portion of the cumulative voting power in the Company that the holder and its affiliates may own after the conversion to 9.99%. The Beneficial Ownership Limitation may be increased to 19.99% by the holder upon 61 days advance notice to the Company.

	●	Upon the liquidation, dissolution and winding up of the Company, or upon the effective date of a consolidation, merger or statutory share exchange in which the Company is not the surviving entity, the holder of each share of the Series C Preferred Stock shall be entitled to a distribution prior to and in preference of the holders of the common stock.

	●	In the event the Company declares a dividend payable in cash or stock to holders of any class of stock, the holder of each share of Series C Preferred Stock shall be entitled to receive a dividend equal in amount and kind to that payable to the holder of the number of shares of the Company’s common stock into which that holder’s Series C Preferred Stock could be converted on the record date for the distribution common stock. The dividends issued on the Company s outstanding Series B Preferred Stock are excluded from this provision.

	●	The holders of Series C Preferred Stock shall have no voting rights; except that nothing will limit a holder’s voting rights with respect to shares of any other class of the Company’s common stock held from time to time.

Issuance of Common Stock

During the year ended December 31, 2023, the Company sold 343,495 shares of common stock for net proceeds of $1.4 million in at-the-market public placements.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Issuance of Series B Preferred Stock

Issuance of Series C Preferred Stock

On September 6, 2024, the SPV converted 82,415 shares of its Series C Preferred Stock into 757,395 shares of common stock.

Bridgetown Spirits Corp.

Subsequent to execution of the Debt Agreement, Bridgetown issued 1.0 million shares of common stock to the Company, representing all of the issued and outstanding capital stock of Bridgetown.

Stock-Based Compensation

A summary of all stock option activity as of and for the nine months ended September 30, 2024 is presented below:

Summary of Stock Options Activity

	# of Options		Weighted- Average Exercise Price
Outstanding as of December 31, 2023		2,120	$	57.95

Outstanding and Exercisable as of September 30, 2024		2,120	$	57.95

The aggregate intrinsic value of options outstanding as of September 30, 2024 was $0. As of September 30, 2024, all options had vested.

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

To determine the fair value of stock options using the Black-Scholes valuation model, the calculation takes into consideration the effect of the following:

	●	Exercise price of the option
	●	Fair value of the Company’s common stock on the date of grant
	●	Expected term of the option
	●	Expected volatility over the expected term of the option
	●	Risk-free interest rate for the expected term of the option

The Company did not issue any additional options during the three and nine months ended September 30, 2024.

Warrants

Schedule of Fair Value of Warrants

Volatility		100	%
Risk-free interest rate		4.4	%
Expected term (in years)		5.0
Expected dividend yield		-
Fair value of common stock	$	0.55

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

A summary of all warrant activity as of and for the nine months ended September 30, 2024 is presented below:

Summary of Warrant Activity

	Warrants		Weighted- Average Remaining Life (Years)		Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding as of December 31, 2023		201,667		3.8	$	34.87	$	-

Granted		1,196,043		5.0		5.00		-
Outstanding as of September 30, 2024		1,397,710		4.8	$	9.31	$	-

Related Party Transactions

9 Months Ended

Sep. 30, 2024

Related Party Transactions

17. Related Party Transactions

Aegis Security Insurance Company

LD Investments LLC and Aegis Security Insurance Company

2024 Secured Notes

During February 2024, LDI advanced the Company $0.6 million. On May 16, 2024, the Company entered into a Loan Agreement with LDI, see: Note 13, Secured Credit Facilities - 2024 Secured Notes.

Subsequent Events

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

18. Subsequent Events

Merger Agreement

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

The sale of the Company’s common stock and Series F Preferred Stock to the shareholders of Beeline was carried out in a transaction exempt from registration pursuant to SEC Regulation 506(b).

Debt Agreement

On October 7, 2024, a closing was held pursuant to the terms of the Debt Agreement. At that closing, the following transactions were completed:

	●	Aegis, Bigger, District 2 and LDI transferred to the Company a total of 31,234 shares of the Company’s Series C Preferred Stock and 119,873 shares of the Company’s common stock. The Investors also released the Company from liability for $4.1 million of senior secured debt and $2.5 million of unsecured debt. In consideration of their surrender of stock and release of debt, the Company caused Craft C+P to be merged into a limited liability company owned by the Investors.

	●	The Company issued a total of 255,474 shares of Series D Preferred Stock to Bigger and District 2, and Bigger and District 2 released the Company from liability for $2.6 million of unsecured debt.

	●	The Company issued a total of 200,000 shares of Series E Preferred Stock to Bigger and District 2, and Bigger and District 2 released the Company from liability for $2.0 million of unsecured debt.

	●	The Company transferred a total of 108,899 shares of Bridgetown Spirits Corp. to Bigger, District 2, Esping, WPE and Grammen, and those Investors released the Company from unsecured debt in the aggregate amount of $0.9 million.

	●	The Company issued a total of 190,000 shares of common stock to Esping, WPE and Grammen, and those Investors released the Company from liability for $0.2 million of unsecured debt.

Preferred Stock

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Series C Preferred Stock

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Senior Secured Notes

Purchase Agreement

Promissory Note

Employment Agreement: Chief Executive Officer

	●	The performance bonuses in the Employment Agreement were replaced by a bonus of $90,000. On October 15, 2024, the Company issued 180,000 shares of common stock to Mr. Gwin at $0.50 per share in satisfaction of the Company’s bonus obligation.
	●	The Company issued 400,000 shares of common stock to Mr. Gwin, which will vest on the earlier of March 31, 2025 or the date on which Mr. Gwin’s employment is terminated without cause.
	●	The Company covenanted that, in the event that the conversion price of the Series F Preferred Stock is reduced, the Company will issue to Mr. Gwin a number of common shares equal to one percent of the additional shares issued as a result of the adjustment.
	●	The Company agreed to issue 100,000 shares of common stock to Mr. Gwin if he is terminated by the Company without cause.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

Use of Estimates

Use of Estimates

Revenue Recognition

Revenue Recognition

In the Craft C+P segment, sales are recognized when printed cans are delivered or when mobile filling services are performed.

Customer Programs

Customer Programs

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Excise Taxes

Excise Taxes

Cost of Sales

Cost of Sales

Sales and Marketing Expenses

Sales and Marketing Expenses

General and Administrative Expenses

General and Administrative Expenses

Stock-Based Compensation

Stock-Based Compensation

Concentrations

Concentrations

Fair Value Measurements

Fair Value Measurements

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

	Level 1:	Fair value of the asset or liability is determined using cash or unadjusted quoted prices in active markets for identical assets or liabilities.

	Level 2:	Fair value of the asset or liability is determined using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

	Level 3:	Fair value of the asset or liability is determined using unobservable inputs that are significant to the fair value measurement and reflect management’s own assumptions regarding the applicable asset or liability.

Items Measured at Fair Value on a Nonrecurring Basis

Inventories

Inventories

Property and Equipment

Property and Equipment

Intangible Assets / Goodwill

Intangible Assets / Goodwill

Eastside Distilling, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

September 30, 2024

(Unaudited)

Long-lived Assets

Long-lived Assets

Comprehensive Income

Comprehensive Income

The Company did not have any other comprehensive income items in either of the nine month periods ended September 30, 2024 or 2023.

Accounts Receivable Factoring Program

Accounts Receivable Factoring Program

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations

Assets and liabilities related to Craft C+P were as follows:

(Dollars in thousands)	September 30, 2024		December 31, 2023
Assets
Current assets:
Cash	$	135	$	96
Trade receivables, net		756		396
Inventories		1,071		526
Prepaid expenses and other current assets		678		250
Total current assets		2,640		1,268
Property and equipment, net		4,156		4,598
Right-of-use assets		1,415		1,923
Intangible assets, net		517		827
Other assets, net		210		321
Total Assets	$	8,938	$	8,937

Liabilities
Current liabilities:
Accounts payable	$	2,130	$	1,014
Accrued liabilities		266		110
Deferred revenue		42		88
Current portion of lease liabilities		686		665
Total current liabilities		3,124		1,877
Lease liabilities, net of current portion		843		1,366
Total liabilities	$	3,967	$	3,243

Income and expense related to Craft C+P were as follows for the nine months ended September 30, 2024 and 2023:

(Dollars in thousands)	2024			2023
Sales	$	6,775		$	5,637
Less customer programs and excise taxes		117			79
Net sales		6,658			5,558
Cost of sales		6,322			5,378
Gross profit		336			180
Operating expenses:
Sales and marketing expenses		45			81
General and administrative expenses		2,355			2,103
Gain on disposal of property and equipment		(195	)		(171	)
Total operating expenses		2,205			2,013
Loss from operations		(1,869	)		(1,833	)
Other income (expense), net
Interest expense		-			(12	)
Other income		3			33
Total other income, net		3			21
Loss before income taxes		(1,866	)		(1,812	)
Provision for income taxes		-			-
Net loss	$	(1,866	)	$	(1,812	)

Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Schedule of Segment Information

Segment information was as follows for the nine months ended September 30:

Schedule of Segment Information

(Dollars in thousands)	2024			2023
Bridgetown
Sales	$	2,106		$	3,080
Net sales		1,977			2,939
Cost of sales		1,476			1,940
Gross profit		501			999
Total operating expenses		698			1,183
Net loss		(162	)		(130	)
Gross margin		25	%		34	%

Depreciation and amortization		99			114

Corporate
Total operating expenses	$	1,149		$	1,287
Net loss		(2,112	)		(3,455	)

Interest expense		965			850
Significant noncash items:
Stock compensation		-			98

Inventories (Tables)

9 Months Ended

Sep. 30, 2024

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following:

Schedule of Inventories

(Dollars in thousands)	September 30, 2024		December 31, 2023
Raw materials	$	770	$	1,740
Finished goods		1,023		946
Total inventories	$	1,793	$	2,686

Prepaid Expenses and Other Current Assets (Tables)

9 Months Ended

Sep. 30, 2024

Prepaid Expenses And Other Current Assets

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

(Dollars in thousands)	September 30, 2024		December 31, 2023
Prepayment of inventory	$	69	$	52
Other		107		61
Total prepaid expenses and other current assets	$	176	$	113

Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2024

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:

Schedule of Property and Equipment

(Dollars in thousands)	September 30, 2024			December 31, 2023			Useful Life (in years)
Furniture and fixtures	$	625		$	625			3.0 - 7.0
Leasehold improvements		1,386			1,386			3.5 - 5.0
Vehicle		27			27			7.0
Total cost		2,038			2,038
Less accumulated depreciation		(1,926	)		(1,869	)
Total property and equipment, net	$	112		$	169

Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets consisted of the following:

Schedule of Intangible Assets

(Dollars in thousands)	September 30, 2024		December 31, 2023
Permits and licenses	$	25	$	25
Azuñia brand		4,153		4,153
Intangible assets	$	4,178	$	4,178

Other Assets (Tables)

9 Months Ended

Sep. 30, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Other Assets

Other assets consisted of the following:

Schedule of Other Assets

(Dollars in thousands)	September 30, 2024			December 31, 2023
Product branding	$	396		$	396
Deposits		171			172
Other		-			23
Total other assets		567			591
Less accumulated amortization		(385	)		(344	)
Other assets, net	$	182		$	247

Leases (Tables)

9 Months Ended

Sep. 30, 2024

Leases

Schedule of Maturities of Operating Lease Liabilities

Maturities of lease liabilities as of September 30, 2024 were as follows:

(Dollars in thousands)	Operating Leases			Weighted- Average Remaining Term in Years
2024	$	58
2025		210
2026		164
2027		-
2028		-
Thereafter		-
Total lease payments		432
Less imputed interest (based on 6.1% weighted-average discount rate)		(28	)
Present value of lease liability	$	404			2.06

Notes Payable (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Notes Payable

Notes payable consisted of the following:

Schedule of Notes Payable

(Dollars in thousands)	September 30, 2024			December 31, 2023

Promissory notes payable bearing interest of 6.0%. The notes have a 36-month term with maturity in April 2024. Accrued interest is paid in accordance with a monthly amortization schedule.	$	486		$	486
Amended and restated promissory notes payable bearing interest of 8.0%. The notes mature in March 2025. Accrued interest is paid in accordance with an amortization schedule.		7,669			7,556
Total notes payable		8,155			8,042
Less current portion		(8,155	)		(486	)
Long-term portion of notes payable	$	-		$	7,556

Schedule of Maturities on Notes payable

Maturities on notes payable as of September 30, 2024 were as follows:

Schedule of Maturities on Notes payable

(Dollars in thousands)
2024		486
2025		7,669
2026		-
2027		-
2028		-
Thereafter		-
Total	$	8,155

Stockholders’ Equity (Tables)

9 Months Ended

Sep. 30, 2024

Class of Stock [Line Items]

Summary of Stock Options Activity

A summary of all stock option activity as of and for the nine months ended September 30, 2024 is presented below:

Summary of Stock Options Activity

	# of Options		Weighted- Average Exercise Price
Outstanding as of December 31, 2023		2,120	$	57.95

Outstanding and Exercisable as of September 30, 2024		2,120	$	57.95

Summary of Warrant Activity

A summary of all warrant activity as of and for the nine months ended September 30, 2024 is presented below:

Summary of Warrant Activity

	Warrants		Weighted- Average Remaining Life (Years)		Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding as of December 31, 2023		201,667		3.8	$	34.87	$	-

Granted		1,196,043		5.0		5.00		-
Outstanding as of September 30, 2024		1,397,710		4.8	$	9.31	$	-

Warrant [Member]

Class of Stock [Line Items]

Schedule of Fair Value of Warrants

Volatility		100	%
Risk-free interest rate		4.4	%
Expected term (in years)		5.0
Expected dividend yield		-
Fair value of common stock	$	0.55

Liquidity (Details Narrative) - USD ($) $ in Thousands	3 Months Ended						6 Months Ended	9 Months Ended		12 Months Ended
Liquidity (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Oct. 07, 2024
Subsequent Event [Line Items]
Accumulated deficit	$ 86,959							$ 86,959		$ 82,706
Net loss	$ 1,359	$ 1,488	$ 1,293	$ 2,156	$ 1,643	$ 1,598		$ 4,140	$ 5,397
Operating activities							$ 10,100			$ 8,600
Subsequent Event [Member]
Subsequent Event [Line Items]
Unsecured debt											$ 2,500
Subsequent Event [Member] \| Series C Preferred Stock [Member]
Subsequent Event [Line Items]
Number of shares surrendered											44,279

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Product Information [Line Items]
Customer programs and incentives paid	$ 40,302	$ 43,551
Excise taxes	100,000	200,000
Advertising and marketing expenses	44,480	100,000
Advance payment amount	$ 500,000
Interest charged on advance payment, rate	1.00%
Minimum [Member]
Product Information [Line Items]
Property and equipment useful life	3 years
Maximum [Member]
Product Information [Line Items]
Property and equipment useful life	7 years
Spirtits Program and Co Packing Program [Member]
Product Information [Line Items]
Concentration risk percentage description	Under the programs, the Company had the option to sell certain customer account receivables in advance of payment for 75% (spirits program) or 85% (co-packing program) of the amount due. When the customer remits payment, the Company receives the remaining balance. For the spirits program, interest is charged on the advanced 75% payment at a rate of 2.4% for the first 30 days plus 1.44% for each additional ten-day period.
Spirits Program [Member]
Product Information [Line Items]
Payment of account receivables in advance percentage	75.00%
Copacking Program [Member]
Product Information [Line Items]
Payment of account receivables in advance percentage	85.00%
Factored invoices		700,000
Fees		$ 20,821
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Two Distributor [Member]
Product Information [Line Items]
Trade receivable percentage	75.00%
Accounts Receivable [Member] \| Customer Concentration Risk [Member] \| Three Distributor [Member]
Product Information [Line Items]
Trade receivable percentage			84.00%
Revenue Benchmark [Member] \| Supplier Concentration Risk [Member] \| One Distributor [Member]
Product Information [Line Items]
Trade receivable percentage	67.00%	69.00%

Schedule of Disposal Groups, Including Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Current assets:
Total current assets	$ 2,640		$ 2,640		$ 1,269
Current liabilities:
Total current liabilities	3,124		3,124		1,877
Other income (expense), net
Loss before income taxes	(531)	$ (350)	(1,866)	$ (1,812)
Craft C+P [Member]
Current assets:
Cash	135		135		96
Trade receivables, net	756		756		396
Inventories	1,071		1,071		526
Prepaid expenses and other current assets	678		678		250
Total current assets	2,640		2,640		1,268
Property and equipment, net	4,156		4,156		4,598
Right-of-use assets	1,415		1,415		1,923
Intangible assets, net	517		517		827
Other assets, net	210		210		321
Total Assets	8,938		8,938		8,937
Current liabilities:
Accounts payable	2,130		2,130		1,014
Accrued liabilities	266		266		110
Deferred revenue	42		42		88
Current portion of lease liabilities	686		686		665
Total current liabilities	3,124		3,124		1,877
Lease liabilities, net of current portion	843		843		1,366
Total liabilities	$ 3,967		3,967		$ 3,243
Sales			6,775	5,637
Less customer programs and excise taxes			117	79
Net sales			6,658	5,558
Cost of sales			6,322	5,378
Gross profit			336	180
Operating expenses:
Sales and marketing expenses			45	81
General and administrative expenses			2,355	2,103
Gain on disposal of property and equipment			(195)	(171)
Total operating expenses			2,205	2,013
Loss from operations			(1,869)	(1,833)
Other income (expense), net
Interest expense				(12)
Other income			3	33
Total other income, net			3	21
Loss before income taxes			(1,866)	(1,812)
Provision for income taxes
Net loss			$ (1,866)	$ (1,812)

Discontinued Operations (Details Narrative) - USD ($) $ in Millions		3 Months Ended
	Oct. 07, 2024	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2023	Sep. 04, 2024
Common Stock [Member]
Shares transfer		442	141	135
Subsequent Event [Member]
Senior unsecured debt	$ 2.5
Debt Agreement [Member] \| Subsequent Event [Member] \| Investor [Member]
Senior secured debt	4.1
Senior unsecured debt	$ 2.5
Debt Agreement [Member] \| Subsequent Event [Member] \| Aegis, Bigger, District 2 and LDI [Member] \| Common Stock [Member]
Shares transfer	119,873
Debt Agreement [Member] \| Subsequent Event [Member] \| Aegis, Bigger, District 2 and LDI [Member] \| Series C Preferred Stock [Member]
Shares transfer	31,234
Debt Agreement [Member] \| Bigger and District 2 [Member]
Equity ownership percentage					50.00%
Debt Agreement [Member] \| Aegis and LDI [Member]
Equity ownership percentage					50.00%

Schedule of Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Segment Reporting Information [Line Items]
Sales	$ 783			$ 849			$ 2,106	$ 3,080
Net sales	760			806			1,977	2,939
Cost of sales	560			638			1,476	1,940
Gross profit	200			168			501	999
Total operating expenses	652			475			1,847	2,470
Net loss	$ (1,359)	$ (1,488)	$ (1,293)	$ (2,156)	$ (1,643)	$ (1,598)	(4,140)	(5,397)
Depreciation and amortization							99	114
Bridgetown Spirits Corp [Member]
Segment Reporting Information [Line Items]
Sales							2,106	3,080
Net sales							1,977	2,939
Cost of sales							1,476	1,940
Gross profit							501	999
Total operating expenses							698	1,183
Net loss							$ (162)	$ (130)
Gross margin							25.00%	34.00%
Depreciation and amortization							$ 99	$ 114
Corporate Segment [Member]
Segment Reporting Information [Line Items]
Total operating expenses							1,149	1,287
Net loss							(2,112)	(3,455)
Interest expense							965	850
Stock compensation								$ 98

Business Segment Information (Details Narrative)	9 Months Ended
Business Segment Information (Details Narrative)	Sep. 30, 2024	Sep. 30, 2023
Revenue Benchmark [Member] \| Supplier Concentration Risk [Member] \| One Distributor [Member]
Revenue, Major Customer [Line Items]
Concentration risk, percentage	67.00%	69.00%

Schedule of Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Inventory Disclosure [Abstract]
Raw materials	$ 770	$ 1,740
Finished goods	1,023	946
Total inventories	$ 1,793	$ 2,686

Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Prepaid Expenses And Other Current Assets
Prepayment of inventory	$ 69	$ 52
Other	107	61
Total prepaid expenses and other current assets	$ 176	$ 113

Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total cost	$ 2,038	$ 2,038
Less accumulated depreciation	(1,926)	(1,869)
Total property and equipment, net	$ 112	169
Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life (in years)	3 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life (in years)	7 years
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 625	625
Furniture and Fixtures [Member] \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life (in years)	3 years
Furniture and Fixtures [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life (in years)	7 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 1,386	1,386
Leasehold Improvements [Member] \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Useful life (in years)	3 years 6 months
Leasehold Improvements [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Useful life (in years)	5 years
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Total cost	$ 27	$ 27
Useful life (in years)	7 years

Property and Equipment (Details Narrative) - USD ($)	9 Months Ended
Property and Equipment (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Purchases of property and equipment		$ 60,000
Depreciation expense	$ 100,000	100,000
Proceeds from disposal of fixed assets		100,000
Net book value of fixed assets		100,000
Gain (loss) on disposal of fixed assets		$ 2,962

Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Indefinite-Lived Intangible Assets [Line Items]
Intangible assets	$ 4,178	$ 4,178
Permits and Licenses [Member]
Indefinite-Lived Intangible Assets [Line Items]
Intangible assets	25	25
Azunia Brand [Member]
Indefinite-Lived Intangible Assets [Line Items]
Intangible assets	$ 4,153	$ 4,153

Intangible Assets (Details Narrative) - USD ($)	9 Months Ended	12 Months Ended
Intangible Assets (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment loss	$ 0	$ 400,000

Schedule of Other Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Total other assets	$ 567	$ 591
Less accumulated amortization	(385)	(344)
Other assets, net	182	247
Product Branding [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Total other assets	396	396
Deposits [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Total other assets	171	172
Other [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Total other assets		$ 23

Other Assets (Details Narrative) - USD ($)	9 Months Ended
Other Assets (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Capitalized costs related to services	$ 400,000
Other assets useful life	7 years
Adjustment for amortization	$ 41,250	$ 42,857

Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Leases
2024	$ 58
2025	210
2026	164
2027
2028
Thereafter
Total lease payments	432
Less imputed interest (based on 6.1% weighted-average discount rate)	(28)
Present value of lease liability	$ 404
Operating lease weighted average remaining lease term	2 years 21 days

Schedule of Maturities of Operating Lease Liabilities (Details) (Parenthetical)	Sep. 30, 2024
Leases
Operating lease weighted average discount rate	6.10%

Leases (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
Leases (Details Narrative) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Leases
Operating lease right of use asset	$ 430	$ 680
Operating lease liabilities	404
Lease cost	200
Operating lease cost	100
Short term lease cost	$ 100

Schedule of Notes Payable (Details) (Parenthetical)	9 Months Ended
Schedule of Notes Payable (Details) (Parenthetical)	Sep. 30, 2024
Note Payable One [Member]
Short-Term Debt [Line Items]
Interest rate	6.00%
Debt term	36 months
Debt maturity period	April 2024
Note Payable Two [Member]
Short-Term Debt [Line Items]
Interest rate	8.00%
Debt maturity period	March 2025

Schedule of Notes Payable (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Short-Term Debt [Line Items]
Total notes payable	$ 8,155	$ 8,042
Less current portion	(8,155)	(486)
Long-term portion of notes payable		7,556
Note Payable One [Member]
Short-Term Debt [Line Items]
Total notes payable	486	486
Note Payable Two [Member]
Short-Term Debt [Line Items]
Total notes payable	$ 7,669	$ 7,556

Schedule of Maturities on Notes payable (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Debt Disclosure [Abstract]
2024	$ 486
2025	7,669
2026
2027
2028
Thereafter
Total	$ 8,155

Notes Payable (Details Narrative) - USD ($)	9 Months Ended
Notes Payable (Details Narrative) - USD ($)	Sep. 30, 2024	Sep. 30, 2023
Notes Payable [Member]
Short-Term Debt [Line Items]
Debt instrument. periodic interest	$ 11,588	$ 1,100,000

Secured Credit Facilities (Details Narrative) - USD ($)							3 Months Ended			9 Months Ended
Secured Credit Facilities (Details Narrative) - USD ($)	May 15, 2024	Sep. 29, 2023	Oct. 13, 2022	Oct. 07, 2022	Apr. 01, 2022	Apr. 19, 2021	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	May 16, 2024	Dec. 31, 2023
Common stock, par value							$ 0.0001			$ 0.0001			$ 0.0001
Stock issuance cost percentage							5.00%			5.00%
Loon amount paid by share issuance											$ 6,510,000
Common Stock [Member]
Number of shares issued							442	141	135
Secured Convertible Promissory Notes [Member]
Secured debt percentage					6.00%		6.00%			6.00%
Debt instrument, conversion price					$ 26.00		$ 44.00			$ 44.00
Maturity date										Oct. 18, 2022
Loon amount paid by share issuance					$ 3,500,000
Secured Convertible Promissory Notes [Member] \| Common Stock [Member]
Debt instrument, conversion price					$ 24.00
2024 Secured Notes [Member] \| Bigger, District 2 and LDI [Member]
Description of debt instrument payment	The 2024 Secured Notes may be satisfied by payment of 110% of principal on or before November 29, 2024, by payment of 130% of principal on or before March 30, 2025 or by payment of 140% of principal on March 31, 2025.
Roth Capital, LLC [Member]
Proceeds from private offering										$ 3,100,000
Note Purchase Agreement [Member]
Aggregate principal amount				$ 4,500,000
Payments in cash				$ 1,200,000
Secured debt percentage				9.25%
Note Purchase Agreement [Member] \| Subscribers [Member]
Secured debt percentage			6.00%
Note Purchase Agreement [Member] \| Each of the Subscribers [Member]
Number of shares issued			4,808
Note Purchase Agreement [Member] \| TQLA, LLC [Member]
Repayment of debt				$ 3,300,000
Debt Satisfaction Agreement [Member] \| Subscribers and Other Creditors [Member]
Aggregate principal amount							$ 400,000			400,000
Secured debt percentage		9.00%
Principal and interest		$ 3,300,000
Interest expense accrued							27,451			27,451
Debt Satisfaction Agreement [Member] \| Subscribers [Member]
Ownership interest		50.00%
Debt Satisfaction Agreement [Member] \| Aegis and Other Creditors [Member]
Aggregate principal amount							2,600,000			2,600,000
Principal and interest		$ 1,900,000
Interest expense accrued							$ 100,000			$ 100,000
Debt Satisfaction Agreement [Member] \| Aegis and Other Creditors [Member] \| SPV [Member]
Ownership interest		29.00%
Purchase Agreement [Member] \| Accredited Investors [Member] \| Secured Convertible Promissory Notes [Member]
Aggregate principal amount						$ 3,300,000
Secured debt percentage						6.00%
Common stock, par value						$ 0.0001
Purchase Agreement [Member] \| Accredited Investors [Member] \| Secured Convertible Promissory Notes [Member] \| IPO [Member]
Private offering closing price						$ 3,300,000
Purchase Agreement [Member] \| Accredited Investors [Member] \| Secured Convertible Promissory Notes [Member] \| Warrant [Member]
Warrant exercisable price per share						$ 52.00
Purchase Agreement [Member] \| Accredited Investors [Member] \| Secured Convertible Promissory Notes [Member] \| Common Stock [Member]
Debt instrument, conversion price						$ 44.00
Outstanding notes payable percentage						60.00%
Loan Agreement [Member] \| 2024 Secured Notes [Member] \| Bigger, District 2 and LDI [Member]
Aggregate principal amount	$ 1,100,000
Warrant exercisable price per share	$ 5.00											$ 5.00
Proceeds from debt	$ 1,100,000
Warrant exercisable period	5 years											5 years
Loan Agreement [Member] \| 2024 Secured Notes [Member] \| LD Investments LLC [Member]
Warrant to purchase of shares	598,021											598,021
Purchase amount of secured notes	$ 500,000
Loan Agreement [Member] \| 2024 Secured Notes [Member] \| District 2 [Member]
Warrant to purchase of shares	299,011											299,011
Purchase amount of secured notes	$ 300,000
Loan Agreement [Member] \| 2024 Secured Notes [Member] \| Bigger Capital Fund LP [Member]
Warrant to purchase of shares	299,011
Purchase amount of secured notes	$ 300,000

Commitments and Contingencies (Details Narrative)	Mar. 01, 2023 USD ($)
Sandstrom Partners Inc [Member]
Loss contingency damages seek value	$ 245,000

Net Income (Loss) per Common Share (Details Narrative) - shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share [Abstract]
Antidilutive common shares	0	0

Summary of Stock Options Activity (Details)	Sep. 30, 2024 $ / shares shares
Equity [Abstract]
Number of Options, Outstanding, Beginning balance \| shares	2,120
Weighted- Average Exercise Price, Outstanding, Beginning balance \| $ / shares	$ 57.95
Number of Options, Outstanding and Exercisable, Ending balance \| shares	2,120
Weighted- Average Exercise Price, Outstanding and Exercisable, Ending balance \| $ / shares	$ 57.95

Schedule of Fair Value of Warrants (Details) - Warrant [Member]	Sep. 30, 2024
Measurement Input, Price Volatility [Member]
Class of Stock [Line Items]
Warrant, measurement input	100
Measurement Input, Risk Free Interest Rate [Member]
Class of Stock [Line Items]
Warrant, measurement input	4.4
Measurement Input, Expected Term [Member]
Class of Stock [Line Items]
Warrant, measurement input	5.0
Measurement Input, Share Price [Member]
Class of Stock [Line Items]
Warrant, measurement input	0.55

Summary of Warrant Activity (Details) - USD ($)	9 Months Ended	12 Months Ended
Summary of Warrant Activity (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Equity [Abstract]
Warrants, Outstanding, Beginning balance	201,667
Weighted-Average Remaining Life (Years), Outstanding	4 years 9 months 18 days	3 years 9 months 18 days
Weighted-Average Exercise Price, Outstanding, Beginning balance	$ 34.87
Aggregate Intrinsic Value, Outstanding, Beginning balance
Granted	1,196,043
Weighted-Average Remaining Life (Years), Granted	5 years
Weighted-Average Exercise Price, Granted	$ 5.00
Aggregate Intrinsic Value, Granted
Warrants, Outstanding, Ending balance	1,397,710	201,667
Weighted-Average Exercise Price, Outstanding, Ending balance	$ 9.31	$ 34.87
Aggregate Intrinsic Value, Outstanding, Ending balance

Stockholders’ Equity (Details Narrative) - USD ($)							3 Months Ended						9 Months Ended		12 Months Ended
Stockholders’ Equity (Details Narrative) - USD ($)	Oct. 07, 2024	Sep. 06, 2024	Sep. 05, 2024	Sep. 29, 2023	Oct. 19, 2021	Sep. 08, 2016	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2024	Dec. 31, 2023	May 16, 2024	May 15, 2024	Mar. 21, 2022	Jul. 30, 2021	May 12, 2021	Jan. 15, 2020
Accumulated Other Comprehensive Income (Loss) [Line Items]
Description debt satisfaction agreement				On September 29, 2023, the Company entered into a Debt Satisfaction Agreement (the “DSA”) with the SPV, Aegis, Bigger, District 2, LDI and TQLA, LLC. The SPV is a special purpose vehicle whose equity is shared 50% by Bigger and District 2 and 50% by Aegis and LDI.
Gain loss extinguishment of debt																$ 1,300,000
Common stock, par value							$ 0.0001						$ 0.0001			$ 0.0001
Proceeds from sale of common stock													$ 393,000	$ 1,300,000
Net income							$ (1,359,000)	$ (1,488,000)	$ (1,293,000)	$ (2,156,000)	$ (1,643,000)	$ (1,598,000)	(4,140,000)	(5,397,000)
Accrued preferred dividends							$ 38,000			$ 38,000			$ 113,000	113,000
Options outstanding							2,120						2,120			2,120
Aggregate intrinsic value of options outstanding							$ 0						$ 0
Debt issuance cost													$ 300,000
2016 Equity Incentive Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares available for grant						437,993
Outstanding capital stock shares percentage						8.00%
Options outstanding							2,120						2,120
Number of RSU's outstanding							196,619						196,619
Vesting schedule													vesting schedules varying between immediate or three (3) years from the grant date.
Subsequent Event [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Voting power percentage	4.99%
Subsequent Event [Member] \| Bridgetown Spirits Corp [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares issued	1,000,000.0
At The Market Public Placements [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Sale of common stock, shares																343,495
Proceeds from sale of common stock																$ 1,400,000
Director [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Issuance of stock for stock-based compensation, shares													1,764
Issuance of common stock for stock-based compensation													$ 2,046
Common stock, par value							$ 1.16						$ 1.16
Director [Member] \| Minimum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Per share							3.05						$ 3.05
Employees and Consultant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Issuance of stock for stock-based compensation, shares													55,738
Issuance of common stock for stock-based compensation													$ 100,000
Per share							1.21						$ 1.21
Directors and Employees [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Issuance of stock for stock-based compensation, shares																162,849
Issuance of common stock for stock-based compensation																$ 700,000
Directors and Employees [Member] \| Minimum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock, par value																$ 1.29
Per share																3.05
Directors and Employees [Member] \| Maximum [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock, par value																7.40
Per share																7.40
Series C Preferred Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Preferred stock dividend payment terms													the Company declares a dividend payable in cash or stock to holders of any class of stock, the holder of each share of Series C Preferred Stock shall be entitled to receive a dividend equal in amount and kind to that payable to the holder of the number of shares of the Company’s common stock into which that holder’s Series C Preferred Stock could be converted on the record date for the distribution common stock. The dividends issued on the Company s outstanding Series B Preferred Stock are excluded from this provision.
Preferred stock voting rights													holders of Series C Preferred Stock shall have no voting rights; except that nothing will limit a holder’s voting rights with respect to shares of any other class of the Company’s common stock held from time to time.
Preferred stock, stated value							0.0001						$ 0.0001			0.0001
Series B Preferred Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Preferred stock, stated value							$ 0.0001						$ 0.0001			$ 0.0001
Dividend rate percentage per annum					6.00%
Net income					$ 500,000
Shares issued for dividends																92,957
Common stock dividend issued, per share																$ 1.61
Accrued preferred dividends													$ 100,000	$ 100,000
Series B Preferred Stock [Member] \| Forecast [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued for dividends															177,725
Common stock dividend issued, per share															$ 0.84
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares issued							442			141	135
Net income
Stock issued during period shares conversion of convertible securities										297
Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrants																				45,000	45,000
Exercise price																					$ 52.00
Warrant [Member] \| TQLA, LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Exercise price																			$ 24.00
Loan amount																			$ 3,500,000
New Warrant Shares [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrants																				45,000
Exercise price				$ 33.08																$ 60.00
Maturity date																				Aug. 19, 2026
Debt Satisfaction Agreement [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Value reduced by exchange of equity				$ 6,500,000
Debt Satisfaction Agreement [Member] \| TQLA, LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrants																			145,834
Voting power percentage																			9.99%
Beneficial ownership limitation percentage increase																			19.99%
Debt Satisfaction Agreement [Member] \| Aegis [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Value reduced by exchange of equity				1,900,000
Debt Satisfaction Agreement [Member] \| LDI Investments LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Debt payment				1,400,000
Debt Satisfaction Agreement [Member] \| Bigger Capital Fund LP [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Value reduced by exchange of equity				1,600,000
Debt Satisfaction Agreement [Member] \| District 2 Capital Fund LP [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Value reduced by exchange of equity				1,600,000
Debt Satisfaction Agreement [Member] \| Bigger and District 2 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Aggregate amount of unsecured notes				$ 7,400,000
Maturity date				Mar. 31, 2025
Interest rate increased				8.00%
Debt Satisfaction Agreement [Member] \| Series C Preferred Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued for debt satisfaction				200,000
Debt Satisfaction Agreement [Member] \| Series C Preferred Stock [Member] \| SVP [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued for debt satisfaction				200,000
Preferred stock, stated value				$ 28.025
Conversion price				$ 3.05
Conversion of stock, converted		82,415
Stock issued during period shares conversion of convertible securities		757,395
Debt Satisfaction Agreement [Member] \| Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued for debt satisfaction				296,722
Securities Purchase Agreement [Member] \| Series B Preferred Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Number of shares issued					2,500,000
Preferred stock, stated value					$ 1.00
Conversion price per share					$ 62.00
Common stock were reserved for issuance					42,500
Securities Purchase Agreement [Member] \| Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Sale of common stock, shares			92,815
Price per share			$ 1.00
Securities Purchase Agreement [Member] \| Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrants			349,227
Price per share			$ 0.9999
Exercise price			$ 0.0001
Loan Agreement [Member] \| 2024 Secured Notes [Member] \| Bigger, District 2 and LDI [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Exercise price																	$ 5.00	$ 5.00
Warrants exercisable term																	5 years	5 years
Loan Agreement [Member] \| 2024 Secured Notes [Member] \| LD Investments LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrants																	598,021	598,021
Loan Agreement [Member] \| 2024 Secured Notes [Member] \| District 2 [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrants																	299,011	299,011
Loan Agreement [Member] \| Warrant [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrants																						5,000
Exercise price																						$ 78.80
Maturity date																						Jan. 15, 2025

Related Party Transactions (Details Narrative) - USD ($) $ in Millions			1 Months Ended
	Jan. 01, 2023	Oct. 07, 2022	Feb. 29, 2024	Sep. 29, 2023
Related Party Transaction [Line Items]
Assets requirement from related party transaction	$ 0.1
Percentage of average of assets net	1.00%
Other assets	$ 0.2
LDI Investments LLC [Member]
Related Party Transaction [Line Items]
Principal amount				$ 1.4
Note Purchase Agreement [Member]
Related Party Transaction [Line Items]
Principal amount		$ 4.5
Note Purchase Agreement [Member] \| TQLA, LLC [Member]
Related Party Transaction [Line Items]
Repayment of debt		3.3
Note Purchase Agreement [Member] \| Aegis [Member]
Related Party Transaction [Line Items]
Principal amount		$ 4.5
Debt Satisfaction Agreement [Member] \| LDI Investments LLC [Member] \| SPV [Member]
Related Party Transaction [Line Items]
Equity interest ownership percentage				21.00%
Loan Agreement [Member]
Related Party Transaction [Line Items]
Proceeds from short-term advance			$ 0.6

Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands					3 Months Ended						9 Months Ended
	Nov. 14, 2024	Oct. 25, 2024	Oct. 07, 2024	Sep. 04, 2024	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Nov. 24, 2024	Oct. 30, 2024	Dec. 31, 2023
Common Stock [Member]
Subsequent Event [Line Items]
Number of shares issued					442			141	135
Stock issued during period shares issued for services							2	121		11
Employment Agreement [Member] \| Chief Executive Officer [Member]
Subsequent Event [Line Items]
Number of shares issued				400,000
Bonus				$ 90,000
Stock issued during period shares issued for services				180,000
Shares issued price per share				$ 0.50
Number of shares agreed to issue				100,000
Series C Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock, shares authorized					240,000						240,000			240,000
Preferred stock voting rights											holders of Series C Preferred Stock shall have no voting rights; except that nothing will limit a holder’s voting rights with respect to shares of any other class of the Company’s common stock held from time to time.
Stock value
Stock value					$ 0.0001						$ 0.0001			$ 0.0001
Subsequent Event [Member]
Subsequent Event [Line Items]
Senior unsecured debt			$ 2,500
Voting power percentage			4.99%
Stock conversion, description			If the shareholders of the Company approve the conversion of the Series F and the Series F-1 Preferred Stock at a meeting to be called for that purpose, each such share will be convertible into common stock by a conversion ratio equal to the stated value of the Series F or F-1 share divided by the Series F Conversion Price. The initial Series F Conversion Price is $0.50 per common share, which is subject to a “Floor Price” equal to 20% of the “Minimum Price” as defined in the Nasdaq Rules. The Series F Conversion Price and the Floor Price are subject to equitable adjustment. In addition, if during the next two years the sum of the common shares outstanding on October 7, 2024 plus shares issuable on conversion of Preferred Stock plus shares issuable on conversion of securities issued in the initial financing of the post-merger company plus shares issued to settle pre-existing liabilities (collectively, the “Measuring Shares”) exceeds 14,848,485, then the Series F Conversion Price will be adjusted to retain the ratio of common share issuable on conversion to the Measuring Shares. Likewise, if the number of Measuring Shares on October 7, 2025 is less than 14,848,485, then the Series F Conversion Price will be adjusted to retain the ration of the Measuring Shares to the number of shares issuable on conversion.
Subsequent Event [Member] \| Senior Secured Notes [Member]
Subsequent Event [Line Items]
Aggregate principal amount	$ 1,900
Proceeds from private offering	$ 1,600
Issuance interest terms	20% original issue discount and do not bear interest unless and until one or more of the customary events of default set forth therein occurs, whereupon each Note will bear interest at a rate of 18% per annum. If the Note remains outstanding for 180 days, the Note also requires a special one-time interest payment of 30% which will increase the principal of each Note accordingly. Upon the occurrence of an event of default, each Investor also has the right to require the Company to pay all or any portion of the Note at a 25% premium. Further, the Company is required to prepay the Notes in connection with certain sales of securities or assets at each Investor’s election in an amount equal to 35% of the gross proceeds from such sales. The Company also has the right to prepay all, but not less than all, of the outstanding amounts under the Notes, at its election.
Subsequent Event [Member] \| Senior Secured Notes [Member] \| Pre Funded Warrants [Member]
Subsequent Event [Line Items]
Shares of common stock	363,602
Subsequent Event [Member] \| Debt Agreement [Member] \| Investor [Member]
Subsequent Event [Line Items]
Senior secured debt			$ 4,100
Senior unsecured debt			$ 2,500
Subsequent Event [Member] \| Purchase Agreement [Member]
Subsequent Event [Line Items]
Exercise price	$ 0.50
Affiliate invested	$ 400
Subsequent Event [Member] \| Purchase Agreement [Member] \| Pre Funded Warrants [Member]
Subsequent Event [Line Items]
Exercise price	$ 0.499
Subsequent Event [Member] \| Series F Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock, shares authorized			70,000,000.0
Preferred stock voting rights			Each share of Series F Preferred Stock has a stated value of $0.50. The holder of Series F Preferred Stock has no voting rights by reason of those shares, except that the approval by holders of more than 50% of the outstanding Series F Preferred Stock will be required for any corporate action that would adversely affect the preferences, privileges or rights of the Series F Preferred Stock.
Subsequent Event [Member] \| Series F Preferred Stock [Member] \| Purchase Agreement [Member]
Subsequent Event [Line Items]
Stock value	$ 400
Investment amount percentage	50.00%
Subsequent Event [Member] \| Series F Preferred Stock [Member] \| Purchase Agreement [Member] \| Two Investors [Member]
Subsequent Event [Line Items]
Stock value	$ 100
Stock value	$ 0.50
Subsequent Event [Member] \| Series F Preferred Stock One [Member]
Subsequent Event [Line Items]
Preferred stock, shares authorized			1,000,000.0
Subsequent Event [Member] \| Series C Preferred Stock [Member]
Subsequent Event [Line Items]
Shares transferred		117,586
Number of shares converted		1,100,000
Subsequent Event [Member] \| Series D Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock, shares authorized			255,474
Preferred stock voting rights			Each share of Series D Preferred Stock has a stated value of $10.00. The holder of Series D Preferred Stock has no voting rights by reason of those shares, except that the approval by holders of more than 50% of the outstanding Series D Preferred Stock will be required for any corporate action that would adversely affect the preferences, privileges or rights of the Series D Preferred Stock.
Conversion price			$ 1.80
Voting power percentage			9.99%
Subsequent Event [Member] \| Series E Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock, shares authorized			200,000
Preferred stock voting rights			Each share of Series E Preferred Stock has a stated value of $10.00. The holder of Series E Preferred Stock has no voting rights by reason of those shares, except that the approval by holders of more than 50% of the outstanding Series E Preferred Stock will be required for any corporate action that would adversely affect the preferences, privileges or rights of the Series E Preferred Stock.
Conversion price			$ 0.25
Voting power percentage			9.99%
Subsequent Event [Member] \| Series F-1 Preferred Stock [Member]
Subsequent Event [Line Items]
Preferred stock voting rights			The material terms of the Series F-1 Preferred Stock are identical to the material terms of the Series F Preferred Stock, except that holders of Series F-1 Preferred Stock are entitled to case one vote per share at any meeting of the Company’s shareholders.
Subsequent Event [Member] \| Beeline Financial Holdings Inc [Member] \| Series F Preferred Stock [Member]
Subsequent Event [Line Items]
Stock issued during period shares acquisitions			69,482,229
Subsequent Event [Member] \| Beeline Financial Holdings Inc [Member] \| Series F Preferred Stock One [Member]
Subsequent Event [Line Items]
Stock issued during period shares acquisitions			517,771
Subsequent Event [Member] \| Aegis, Bigger, District 2 and LDI [Member] \| Debt Agreement [Member] \| Common Stock [Member]
Subsequent Event [Line Items]
Number of shares issued			119,873
Subsequent Event [Member] \| Aegis, Bigger, District 2 and LDI [Member] \| Series C Preferred Stock [Member] \| Debt Agreement [Member]
Subsequent Event [Line Items]
Number of shares issued			31,234
Subsequent Event [Member] \| Bigger and District 2 [Member] \| Series D Preferred Stock [Member] \| Debt Agreement [Member]
Subsequent Event [Line Items]
Number of shares issued			255,474
Senior unsecured debt			$ 2,600
Subsequent Event [Member] \| Bigger and District 2 [Member] \| Series E Preferred Stock [Member] \| Debt Agreement [Member]
Subsequent Event [Line Items]
Number of shares issued			200,000
Senior unsecured debt			$ 2,000
Subsequent Event [Member] \| Bigger, District 2, Esping, WPE and Grammen [Member] \| Debt Agreement [Member]
Subsequent Event [Line Items]
Number of shares issued			108,899
Senior unsecured debt			$ 900
Subsequent Event [Member] \| Esping, WPE and Grammen [Member] \| Debt Agreement [Member]
Subsequent Event [Line Items]
Number of shares issued			190,000
Senior unsecured debt			$ 200
Subsequent Event [Member] \| LDI Investments LLC [Member]
Subsequent Event [Line Items]
Aggregate principal amount												$ 400	$ 300

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