PORTLAND, Ore. – Eastside Distilling, Inc. (NASDAQ:EAST), a craft beverage company, has announced a registered direct offering to a single institutional investor, pricing 442,042 shares of common stock, or equivalent pre-funded warrants, at $1.00 each. The transaction is expected to close on September 6, 2024, contingent on customary closing conditions.
Joseph Gunnar & Co., LLC is serving as the sole placement agent for the offering. The shares and warrants are being offered under a shelf registration statement on Form S-3, filed with the Securities and Exchange Commission (SEC) on September 3, 2021, and declared effective on September 14, 2021. Details of the offering will be available in a final prospectus supplement and accompanying prospectus filed with the SEC.
This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities. The sale of these securities has not been legalized in any jurisdiction where such an offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of any such state or jurisdiction.
Based in Portland, Oregon, Eastside Distilling is known for its award-winning craft spirits, including whiskey, vodka, and rum. The company emphasizes quality, innovation, and sustainability, aiming to deliver products that embody the spirit of the Pacific Northwest.
The information regarding the offering is based on a press release statement.
In other recent news, Eastside Distilling has reported mixed financial results for the second quarter of 2024. The company saw an 11% increase in consolidated sales, significant improvement in gross margin, and a record number of cans sold through its Craft division. However, a decrease in spirit sales and a net loss of $1.5 million were also noted. Eastside Distilling’s Craft division experienced a nearly 50% increase in digital printing revenue, while spirit sales suffered due to a reset of the tequila go-to-market strategy. Despite the challenges, the company’s consolidated gross profit improved significantly, from $26,000 in Q2 2023 to $200,000 in Q2 2024. The company also successfully reduced operating expenses. Looking ahead, Eastside Distilling plans to increase digital can printing capacity and expects improvements in gross margins and operating cash flow in the second half of the year. However, investors should note that case sales for spirits were down 12%, and the net loss for Q2 2024 was $1.5 million.
InvestingPro Insights
As Eastside Distilling, Inc. (NASDAQ:EAST) makes its move to increase capital through a registered direct offering, a closer look at the company’s financial health and stock performance is crucial for investors. According to recent data from InvestingPro, Eastside Distilling operates with a significant debt burden and may have trouble making interest payments on its debt, which is a critical factor for potential investors to consider given the company’s current fundraising efforts. Additionally, the company’s stock price has been highly volatile, with a price that has fallen significantly over the last year.
InvestingPro Data highlights several key metrics that investors should take into account:
- The company’s market capitalization stands at a modest $2.43 million USD, reflecting its size in the craft beverage industry.
- Revenue for the last twelve months as of Q2 2024 was reported at $10.35 million USD, with a gross profit margin of 7.08%, indicating challenges in maintaining profitability.
- Price performance has been concerning, with a year-to-date total return of -41.08%, underscoring the stock’s volatility and the potential risks for investors.
For those considering an investment in Eastside Distilling, it’s worth noting that the company has been quickly burning through cash and does not pay a dividend to shareholders. This information, coupled with the company’s recent performance, suggests a cautious approach. For a more comprehensive analysis, there are an additional 15 InvestingPro Tips available on the InvestingPro platform, which can provide deeper insights into the company’s financials and stock behavior. Visit InvestingPro for EAST for further details and to access these valuable tips.
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