Item
8.01 Other Events.
Nasdaq
Compliance Transactions or Events
On
August 20, 2020, Nasdaq notified Eastside Distilling, Inc. (“Eastside” or the “Company”) that it no longer
complied with Nasdaq Listing Rule 5550(b)(1) because its reported stockholder’s equity of $2,444,048 as of June 30, 2020
was below the minimum stockholder’s equity of $2,500,000 set forth in the Nasdaq Listing Rule by $55,952.
As
previously reported on the Company’s Current Report on Form 8-K filed on February 9, 2021, on February 2, 2021, Redneck
Riviera Whiskey Co., LLC (“RRWC”), a wholly-owned subsidiary of Eastside Distilling, Inc. (“Eastside”
or the “registrant”) entered into that certain Termination and Inventory Purchase Agreement (the “Termination
Agreement”) dated as of February 2, 2021 with Redneck Spirits Group LLC (“RSG”), pursuant to which, on February
5, 2021, RRWC sold all of its inventory of Redneck Riviera, Granny Rich, and Howdy Dew distilled spirits products, including finished
goods, raw materials, and barrel inventory, as well as all assignable certificates of label approval/exemption, branding, permits,
and registrations relating thereto, for Four Million Seven Hundred Twenty Thousand Six Hundred Sixty One dollars ($4,720,661),
subject to adjustment as set forth in the Termination Agreement. In addition, Eastside terminated that certain Amended and Restated
License Agreement (the “License Agreement”) dated May 31, 2018 by and among Eastside, RRWC, Rich Marks, LLC, and John
D. Rich TISA Trust U/A/D March 27, 2018, Dwight P. Miles, Trustee in exchange for Three Million dollars ($3,000,000). In connection
with the Termination Agreement, we entered into that certain Supplier Agreement (the “Supplier Agreement”) dated as
of February 2, 2021 with RSG, pursuant to which we agreed to produce certain products, or “skus”, and perform specified
services for RSG for a six (6) month period on the terms and conditions set forth in the Supplier Agreement.
On
January 29, 2021, the Small Business Administration (“SBA”) notified the Company that it approved the Company’s
request for full forgiveness of that certain Payroll Protection Program (“PPP”) loan in the principal amount of $1,044,500.
As a result of the SBA’s decision to approve the Company’s request for forgiveness, the SBA paid the entire outstanding
balance of the PPP loan, which is now considered paid in full.
On
February 10, 2021, the Company issued 1,200,000 shares of its common stock (the “Shares”) to certain affiliates of
Intersect Beverage, LLC, a California limited liability company (“Intersect”) pursuant to that certain Asset Purchase
Agreement dated September 12, 2019 by and between the Company and Intersect. The Shares constitute the “Fixed Shares”
due to Intersect pursuant to the Asset Purchase Agreement. By mutual agreement of the parties, the Company issued the Shares approximately
45 days before the Shares were due to be issued pursuant to the Asset Purchase Agreement. The Company offered and sold the Shares
pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of
1933, as amended. The Company will file a prospectus supplement to its effective shelf registration statement on Form S-3, which
was initially filed with the Securities and Exchange Commission (the “SEC”) on August 17, 2018 and declared effective
by the SEC on August 29, 2018 (File No. 333-226912) or other registration statement on Form S-3, in connection with the
sale of the Shares.
As
of the date of this the report, the Company believes it has regained compliance with Nasdaq’s stockholders’ equity
requirement based upon the specific transactions and events referenced above. Nasdaq will continue to monitor the Company’s
ongoing compliance with the stockholders’ equity requirement and, if at the time of its next periodic report the Company
does not evidence compliance, the Company may be subject to delisting.
Live
Oak Maturity Date Extension
On
January 10, 2021, Eastside Distilling, Inc. (“Eastside” or the “Company”) entered into an amendment to
that certain loan agreement (the “Loan Agreement”) between Eastside and its wholly-owned subsidiaries MotherLode LLC,
an Oregon limited liability company, Big Bottom Distilling, LLC, an Oregon limited liability company, Craft Canning + Bottling,
LLC, an Oregon limited liability company, Redneck Riviera Whiskey Co., LLC, a Tennessee limited liability company, and Outlandish
Beverages LLC, an Oregon limited liability company (collectively, the “Borrowers” and each a “Borrower”)
and Live Oak Banking Company, a North Carolina banking corporation (“Lender”) to extend the maturity date to April
13, 2021. All other material terms of the Loan Agreement remain unchanged.