PORTLAND, Ore., June 13,
2023 /PRNewswire/ -- Eastside Distilling, Inc.
(NASDAQ: EAST) ("Eastside" or the
"Company"), a consumer-focused beverage company that builds and
supplies craft-inspired experiential brands and high-quality
artisan products announces it has signed a non-binding term sheet
with key first and second lien debt holders that, if completed,
will convert a substantial portion of outstanding debt to equity.
This would significantly reduce interest expense going
forward and help the Company to regain compliance with the
Shareholders Equity Rule for continued Nasdaq listing. In the
proposed transaction, principal creditors would exchange
$6.2 million of debt for equity at an
exchange rate of no less than $4.00
per common share equivalent and no more than $4.80 per common share equivalent. New
equity would be limited to less than 20% of total voting stock with
the balance in new non-voting convertible preferred stock. In
addition, interest payments on the remaining debt would be
restructured and certain debt maturities would be extended.
These changes would have a materially positive impact on cash flow
and support the Company's growth initiatives, especially in digital
can printing.
After submitting the proposed deleveraging plan to Nasdaq, the
Company received notification on June 8,
2023 that Nasdaq has extended the deadline for the Company
to achieve compliance with its Shareholders Equity Rule to
September 30, 2023. The Company
received notice on May 30 that it had
regained compliance with the minimum price requirement for
continued listing.
The Company is also pleased to reconfirm its second quarter
guidance of positive EBITDA for its Craft division with a
substantial reduction in the net operating loss for the
division. Craft's operating performance continues to improve,
with May posting the highest monthly segment sales ever.
The Company has digitally printed more than 15 million
cans since its new Portland,
Oregon location was opened last year. The Company is also
updating second quarter guidance to state that its Spirits division
is performing better than internal profit plans.
Geoffrey Gwin, Eastside's CEO, stated, "I am very pleased
with the Company's improvements in the quarter and also that our
key strategic partners are acknowledging these improvements with
their willingness to consider this debt for equity
transaction."
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 largest digital can printing operation in the
Pacific Northwest.
Important Cautions Regarding Forward-Looking
Statements
Certain matters discussed in this press release may be
forward-looking statements that reflect our expectations or
anticipations rather than historical fact. Such matters involve
risks and uncertainties that may cause actual results to differ
materially, including the following: changes in economic
conditions, general competitive factors, the Company's ongoing
financing requirements and ability to achieve financing, acceptance
of the Company's products in the market, the Company's success in
obtaining new customers, the Company's ability to execute its
business model and strategic plans, and other risks and related
information described from time to time in the Company's filings
with the Securities and Exchange Commission ("SEC"). A detailed
discussion of the most significant risks can be found in the "Risk
Factors" section of the Company's Annual Report on Form 10-K. The
Company assumes no obligation to update the cautionary information
in this press release.
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SOURCE Eastside Distilling, Inc.