PORTLAND, Ore., Oct. 2, 2023
/PRNewswire/ -- Eastside Distilling, Inc. (NASDAQ: EAST)
("Eastside" or the "Company"), a
consumer-focused beverage company that builds craft inspired
experiential brands and high-quality artisan products around
premium spirits, digital can printing, co-packing and mobile
filling, recently announced the successful completion of a
debt-for-equity exchange with key first and second lien debt
holders. This financial transaction is significant for the Company
as it has resulted in several favorable outcomes:
- Debt Reduction: The debt-for-equity exchange has
substantially reduced Eastside Distilling's outstanding debt, which
will have a positive impact on the Company's financial health.
- Improved Cash Flow: The exchange will improve the
Company's near-term cash flow, providing more financial
flexibility, albeit at the cost of substantial increases in
back-end interest rates.
- Debt Maturity Extension: The transaction has extended
the maturities of a significant portion of the remaining debt to
March 2025.
- Nasdaq Compliance: The transaction will enable Eastside
Distilling to regain compliance with the Shareholders Equity
requirement for continued listing on NASDAQ.
The specific details of the transaction, including the exchange
rate and the issuance of new equity, can be found in the Form 8-K
filed by the Company on September 29.
In summary, the exchange involved converting outstanding debt
with principal creditors totaling $6.51
million into equity at an exchange rate of $3.05 per common share equivalent. The new equity
consists of common stock equivalent to 19% of the outstanding
voting stock, with the balance consisting of non-voting convertible
preferred stock.
Eastside Distilling's CEO, Geoffrey
Gwin, commented: "I am quite happy with this transaction. It
salvages our NASDAQ listing, while stabilizing our cash flow in a
way that will enable us to take full advantage of the progress
we've made in gaining market share in the digital printing segment
within the craft beverage industry."
Investors can expect a more detailed update on these
developments when Eastside Distilling reports its third-quarter
results in November. This will provide an opportunity to review the
Company's progress and its financial performance in greater
detail.
About Eastside Distilling
Eastside Distilling, Inc.
(NASDAQ: EAST) has been producing high-quality, award-winning craft
spirits in Portland, Oregon, since
2008. The Company is distinguished by its highly decorated product
lineup that includes Azuñia Tequilas®, Burnside Whiskeys®, Hue-Hue
Coffee Rum®, and Portland Potato Vodkas®. All Eastside spirits are crafted from natural
ingredients for quality and taste. Eastside's Craft Canning + Printing subsidiary
is one of the Northwest's leading independent mobile canning,
co-packing and digital can printing businesses.
Important Cautions Regarding Forward-Looking
Statements
Certain matters discussed in this press release
may be forward-looking statements that reflect our expectations or
anticipations rather than historical fact. Such matters involve
risks and uncertainties that may cause actual results to differ
materially, including the following: changes in economic
conditions, general competitive factors, the Company's ongoing
financing requirements and ability to achieve financing, acceptance
of the Company's products in the market, the Company's success in
obtaining new customers, the Company's ability to execute its
business model and strategic plans, and other risks. A detailed
discussion of the most significant risks and related information
can be found in the "Risk Factors" section of the Company's Annual
Report on Form 10-K filed with the Securities and Exchange
Commission. The Company assumes no obligation to update the
cautionary information in this press release.
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SOURCE Eastside Distilling, Inc.