Eastside Distilling Closes Equity Raise
PORTLAND, Ore., Jan. 9, 2017 /PRNewswire/ -- Eastside Distilling, Inc. (OTCQB: ESDI) ("Eastside" or the "Company") today announced the closing of two private financings, both a private placement of Units and the exercise of outstanding warrants for cash and debt. In these two financings, the Company received $1.6 million in cash, reduced the outstanding principal amount of 8% promissory notes by $1.15 million, and cancelled warrants to purchase 1,315, 384 shares of Common Stock. The Company intends to use the net proceeds of the financings for working capital and general corporate purposes.
On December 30, 2016, Eastside Distilling, Inc. (the "Company"), closed a private placement in which it issued an aggregate of 800,000 units (the "Units") at a per unit price of $1.30, each Unit consisting of one share of the Company's common stock, par value $0.0001 (the "Common Stock") and a three-year warrant to acquire one share of the Company's Common Stock at an exercise price of $2.50 per share. The Units were sold to accredited investors for aggregate gross cash proceeds of $1,040,000 pursuant to separate Subscription Agreements entered into with each investor. The Company intends to use the net proceeds of the financing for working capital and general corporate purposes. The Company conducted the "best efforts" financing without the assistance of any underwriter, placement agent or selling agent.
Each investor also entered into a Registration Rights Agreement with the Company under which the Company is obligated to file a registration statement with the Securities and Exchange Commission registering the Common Stock and shares of Common Stock underlying the Warrants as soon as reasonably practicable following the closing of the financing.
Exercise of Outstanding Warrants
Effective December 30, 2016, the Company issued 1,315,384 shares of its Common Stock to accredited investors upon exercise of outstanding warrants, raising $1,709,998.60 in proceeds. The warrants' original exercise price of $2.00 per share had been temporarily reduced to $1.30 per share through December 31, 2016 to induce holders to exercise their outstanding warrants. The issuance was exempt pursuant to Section 4(a)(2) of the Securities Act. The securities are non-transferable in the absence of an effective registration statement under the Act or an available exemption therefrom, and all certificates are imprinted with a restrictive legend to that effect. A portion of the warrants exercised was in exchange for principal reduction in the Company's outstanding promissory notes issued to investors between June 2016 and October 2016.
Steve Shum, CFO of Eastside Distilling, commented, "We are pleased that these financings have strengthened our balance sheet by adding to working capital, reducing debt and decreasing the 'overhang' of warrants as a percentage of total shares outstanding."
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities described herein, 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 registration or qualification under the securities laws of any such state or other jurisdiction.
Additional details regarding this transaction can be found in a Form 8-K/A filed with the Securities and Exchange Commission ("SEC") dated January 6, 2017, available at www.sec.gov.
About Eastside Distilling
Eastside Distilling, Inc. (OTCQB: ESDI) is located in Southeast Portland's Distillery Row, and has been producing high-quality, master crafted spirits since 2008. Makers of award winning spirits, the company is unique in the marketplace and distinguished by its highly decorated product lineup that includes Barrel Hitch American Whiskies, Burnside Bourbon, Below Deck Rums, Portland Potato Vodka, and a distinctive line of infused whiskeys. All Eastside spirits are master crafted from natural ingredients for unparalleled quality and taste. The company is publicly traded under the symbol OTCQB: ESDI. For more information visit: www.eastsidedistilling.com or follow the company on Twitter and Facebook.
Important Cautions Regarding Forward-Looking Statements
Certain matters discussed in this press release may be forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; general competitive factors; acceptance of the Company's products in the market; the Company's success in obtaining new customers; the Company's success in product development; the Company's ability to execute its business model and strategic plans; the Company's success in integrating acquired entities and assets, and all the risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the Company's Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. Examples of forward-looking statements in this release may include statements related to our strategic focus, product verticals, anticipated revenue, and profitability. The Company assumes no obligation to update the cautionary information in this release.
Robert Blum, Joe Diaz or Joe Dorame
Lytham Partners, LLC
Chief Financial Officer
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