Eastside Distilling, Inc. (EAST), a Portland-based beverage company with a market capitalization of $4.33 million and trailing twelve-month revenue of $9.54 million, has entered into agreements resulting in the sale of securities that brought in $110,000 in gross proceeds.
According to InvestingPro analysis, the company currently shows weak financial health with a concerning cash burn rate. The transactions, which occurred between Monday and Tuesday last week, involved the issuance of Series G Convertible Preferred Stock and accompanying warrants to two accredited investors.
The company, listed on The Nasdaq Stock Market under the ticker EAST, sold a total of 215,686 shares of the newly designated Series G stock along with warrants to purchase an additional 107,843 shares of common stock. The sales are part of a larger ongoing offering aiming to raise up to $3,037,800 through the sale of nearly 6 million shares of Series G and warrants for about 3 million common shares. Since the offering began on November 26, 2024, Eastside has raised $705,000 by selling 1,382,353 shares of Series G and warrants for 691,176 common shares.
The proceeds from the offering are earmarked for working capital and general corporate purposes, after deducting offering expenses and related costs. This funding comes at a critical time, as InvestingPro data reveals the company's current ratio stands at 0.29, with total debt of $12.83 million weighing on its balance sheet. In conjunction with the sales, Eastside Distilling also entered into registration rights agreements with the investors, obligating the company to register the shares for resale under certain conditions.
This financial move comes as part of Eastside Distilling's broader strategy to bolster its balance sheet and support its growth initiatives. For a comprehensive analysis of EAST's financial position and growth prospects, including 16 additional key ProTips, investors can access the detailed Pro Research Report available on InvestingPro, which provides expert insights on over 1,400 US stocks.
The company announced a gross profit increase in its spirits division for Q3 2024, with sales reaching $783,000, driven by robust vodka sales. However, the tequila brand Azuñia faced distribution-related challenges. Eastside Distilling also secured $440,000 through a direct equity placement.
In a strategic move, the company has acquired Beeline Financial Holdings, a digital mortgage technology firm, anticipating benefits from favorable market conditions. Eastside Distilling also reported a registered direct offering, aiming to raise $350,000 in gross proceeds.
In a significant change to its financial oversight, Eastside Distilling appointed a new independent registered public accounting firm, Salberg & Company, P.A., following the dismissal of its previous auditor, M&K CPAS, PLLC. This decision was made following the previous auditor's reports for fiscal years 2023 and 2022, which identified a material weakness in Eastside Distilling's internal controls related to impairment testing policies.
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