Eastside Distilling Announces $0.4 Million Registered Direct Offering, Priced at a Premium to Market Under Nasdaq Rules

Rhea-AI Summary

Eastside Distilling (Nasdaq: EAST) has announced a $0.4 million registered direct offering of 442,042 shares of common stock (or pre-funded warrants) to a single institutional investor at $1.00 per unit. The offering, priced at a premium to market under Nasdaq rules, is expected to close around September 6, 2024. Joseph Gunnar & Co., is acting as the exclusive placement agent. The offering is made pursuant to a shelf registration statement filed with the SEC. Eastside Distilling, based in Portland, Oregon, is a producer of craft spirits including whiskey, vodka, and rum, focusing on quality, innovation, and sustainability.

Positive

• Offering priced at a premium to market under Nasdaq rules
• Single institutional investor participating, potentially indicating confidence in the company
• Registered direct offering, which can be a more efficient method of raising capital

Negative

• Small offering size of $0.4 million may not significantly impact the company's financial position
• Potential dilution for existing shareholders
• Reliance on external funding may indicate cash flow challenges

Financial Analyst

Eastside Distilling's $0.4 million registered direct offering, priced at a premium, sends mixed signals. While the premium pricing suggests investor confidence, the small offering size raises questions about the company's capital needs and growth strategy. The single institutional investor participation could indicate market interest or a strategic partnership.

The use of pre-funded warrants alongside common stock adds complexity to the deal structure. This approach may provide flexibility for the investor but could potentially dilute existing shareholders. The company's focus on craft spirits and digital can printing presents a unique market position, but investors should closely monitor how this capital will be deployed to drive growth in these competitive sectors.

Market Research Analyst

The premium pricing of Eastside Distilling's offering suggests a positive market perception, possibly driven by the company's diverse portfolio in craft spirits and innovative digital can printing. However, the modest $0.4 million raise indicates near-term expansion plans. This could be a strategic move to minimize dilution while addressing specific operational needs.

The craft spirits market continues to grow, but faces intense competition. Eastside's success will depend on effectively leveraging this capital to enhance brand recognition and distribution. The company's venture into digital can printing and co-packing services could provide a competitive edge, potentially opening new revenue streams in the beverage industry beyond their own product lines.

PORTLAND, Ore., Sept. 5, 2024 /PRNewswire/ -- Eastside Distilling, Inc. (Nasdaq: EAST) ("Eastside"), 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, announced today the pricing of a registered direct offering for the sale and issuance of 442,042 shares of the Company's common stock (or pre-funded warrants in lieu thereof) to a single institutional investor at a unit purchase price of $1.00.

The transactions are expected to close on or about September 6, 2024, subject to the satisfaction of customary closing conditions.

Joseph Gunnar & Co., LLC is acting as the exclusive placement agent for the offering.

The shares of common stock and pre-funded warrants in the registered direct offering were offered pursuant to a "shelf" registration statement on Form S-3 (File No. 333-259295) initially filed with the Securities and Exchange Commission (the "SEC") on September 3, 2021, and declared effective by the SEC on September 14, 2021. The offering of the common stock and pre-funded warrants and shares of common stock underlying the pre-funded warrants in the registered direct offering was made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC's website located at http://www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Joseph Gunnar & Co., LLC Attention: Syndicate Department at 40 Wall Street, 30th Floor, New York, NY 10005, Attn: Syndicate Department, by phone (212) 440-9600.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

Eastside Distilling, Inc.

Eastside Distilling, Inc. is a producer of award-winning craft spirits, including whiskey, vodka, and rum. Founded in Portland, Oregon, Eastside is committed to quality, innovation, and sustainability, delivering exceptional products that reflect the spirit of the Pacific Northwest.

For investor information, visit https://www.eastsidedistilling.com/investors

Please follow social media channels for additional updates:

LinkedIn Company Page: https://www.linkedin.com/company/eastside-distillery/ 

Facebook Company Page: https://www.facebook.com/EastsideDistilling?fref=ts 

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.

FAQ

What is the size and price of Eastside Distilling's (EAST) registered direct offering announced on September 5, 2024?

Eastside Distilling (EAST) announced a $0.4 million registered direct offering of 442,042 shares (or pre-funded warrants) priced at $1.00 per unit.

When is the expected closing date for Eastside Distilling's (EAST) registered direct offering?

The registered direct offering is expected to close on or about September 6, 2024, subject to customary closing conditions.

Who is the placement agent for Eastside Distilling's (EAST) registered direct offering?

Joseph Gunnar & Co., is acting as the exclusive placement agent for Eastside Distilling's (EAST) registered direct offering.

What products does Eastside Distilling (EAST) produce?

Eastside Distilling (EAST) produces award-winning craft spirits, including whiskey, vodka, and rum.