Eastside Distilling, Inc. (NASDAQ:EAST), a manufacturer of craft beverages, has made a significant change to its financial oversight by appointing a new independent registered public accounting firm, Salberg & Company, P.A., as disclosed in a recent SEC filing. This change comes after the company dismissed its previous auditor, M&K CPAS, PLLC, on Monday.
The decision, sanctioned by Eastside Distilling's Board of Directors and its Audit Committee, follows the previous auditor's reports for fiscal years 2023 and 2022, which included an uncertainty about the company's ability to continue as a going concern. M&K CPAS, PLLC also identified a material weakness in Eastside Distilling's internal controls related to impairment testing policies.
Throughout the past two fiscal years and up to the date of the accounting switch, no disagreements were reported between Eastside Distilling and M&K CPAS, PLLC on accounting principles, practices, or auditing scope that would have warranted a mention in the auditor's report. Moreover, there were no consultations between Eastside Distilling and Salberg & Company, P.A. regarding accounting or auditing issues prior to their appointment.
In other recent news, Eastside Distilling has been active in its financial operations. The beverage company announced a registered direct offering aiming to raise $350,000 in gross proceeds. This followed a sale of equity securities to two accredited investors, as detailed in an 8-K filing with the U.S. Securities and Exchange Commission. The company also amended its articles of incorporation, designating 6,000,000 shares of Series G Preferred Stock.
In conjunction with these developments, Eastside Distilling reported a gross profit increase in its spirits division for the third quarter of 2024, with sales totaling $783,000. The company's vodka sales were strong, while the tequila brand Azuñia faced distribution-related challenges.
Additionally, Eastside Distilling announced the acquisition of Beeline Financial Holdings, a digital mortgage technology firm. The company anticipates that this strategic move will benefit from favorable market conditions and align with its public company objectives.
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