Beeline Holdings, Inc 8-K, filed Jun 13, 2023
Beeline Holdings, Inc. (BLNE)
About this 8-K
Beeline Holdings, Inc filed this 8-K on June 13, 2023, reporting on events of June 8, 2023.
Items reported
- Item 3.01: Delisting notice or listing transfer
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Securities registered pursuant to Section 12(b) of the Act:
| Common Stock, $0.0001 par value | EAST | The Nasdaq Stock Market LLC | ||
| (Title of Each Class) | (Trading Symbol) | (Name of Each Exchange on Which Registered) |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard.
Nasdaq Minimum Bid Price Requirement
On June 3, 2022 Eastside Distilling received written notice from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market, LLC (“Nasdaq”) that, for the preceding 30 consecutive business days, the closing bid price for Eastside Distilling’s Common Stock had been below $1.00 per share and, as a result, Eastside Distilling was not in compliance with the $1.00 minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). In accordance with Nasdaq rules, Eastside Distilling was provided a period of 180 calendar days, or until November 30, 2022, to regain compliance with the Bid Price Requirement. On December 1, 2002, the Staff extended the period within which Eastside Distilling could regain compliance with the Bid Price Requirement to May 30, 2023.
On May 30, 2023, the Staff informed Eastside Distilling that its common stock had regained compliance with the Bid Price Requirement.
Nasdaq Stockholders” Equity Requirement
On April 5, 2023, Eastside Distilling, Inc. received a deficiency letter from the Nasdaq Staff notifying Eastside Distilling that its stockholders’ equity as reported in its Annual Report on Form 10-K for the period ending December 31, 2022, did not satisfy the continued listing requirement under Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”) for the Nasdaq Capital Market, which requires that a listed company’s stockholders’ equity be at least $2.5 million. As reported on its Form 10-K, the Company’s stockholders’ equity as of December 31, 2022 was a deficit of approximately $(1.5) million.
The notification provided Eastside Distilling a period of 45 calendar days, or until May 22, 2023, to submit a plan to regain compliance with the Equity Rule Requirement. Eastside Distilling submitted its plan on May 22, 2023. On June 8, 2023 the Staff extended to September 30, 2023 the date by which Eastside Distilling may regain compliance with the Equity Rule.
The plan for returning to compliance with the Equity Rule submitted by Eastside Distilling relies primarily on our achievement of three improvements to equity:
| ● | Entry into a binding agreement with our principal creditors incorporating terms now set forth in a non-binding Term Sheet, which contemplates exchange of $6.2 million of debt for equity at an exchange rate of no less than $4.00 per common share equivalent and no more than $4.80 per common share equivalent. | |
| ● | Consummating an at-the-market offering of common stock for proceeds of not less than $1.3 million. | |
| ● | Achieving a steady month-to-month increase in sales, particularly through increased utilization of our new Hinterkopf can printer. |
In the event that Eastside Distilling is unable to demonstrate compliance with the Equity Rule as of September 30, 2023, its common stock will be subject to delisting from Nasdaq.
Item 7.01 Regulation FD Disclosure.
On June 14, 2023, Eastside issued a press release, the text of which is furnished as Exhibit 99.1 to this current report. The press release contained information relating to the events described under Item 3.01 above.
The information in this Item 7.01 and Exhibit 99.1 hereto shall not be deemed “filed” for the purposes of or otherwise subject to the liabilities under Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Unless expressly incorporated into a filing of Eastside under the Securities Act of 1933, as amended, or the Exchange Act, the information contained in this Item 7.01 and Exhibit 99.1 hereto shall not be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits
Exhibits
| 99.1 | Press release dated June 13, 2023 |
| 104 | Cover page interactive data file (embedded within the iXBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: June 13, 2023
| EASTSIDE DISTILLING, INC. | ||
| By: | /s/ Geoffrey Gwin | |
| Geoffrey Gwin | ||
| Chief Executive Officer | ||
Exhibit 99.1
Eastside Distilling, Inc. Announces Positive Business and Financial Updates
PORTLAND, Oregon, June 13, 2023 /PRNewswire/ — Eastside Distilling, Inc. (NASDAQ: EAST) (“Eastside” or the “Company”), a consumer-focused beverage company that builds and supplies craft-inspired experiential brands and high-quality artisan products announces it has signed a non-binding term sheet with key first and second lien debt holders that, if completed, will convert a substantial portion of outstanding debt to equity. This would significantly reduce interest expense going forward and help the Company to regain compliance with the Shareholders Equity Rule for continued Nasdaq listing. In the proposed transaction, principal creditors would exchange $6.2 million of debt for equity at an exchange rate of no less than $4.00 per common share equivalent and no more than $4.80 per common share equivalent. New equity would be limited to less than 20% of total voting stock with the balance in new non-voting convertible preferred stock. In addition, interest payments on the remaining debt would be restructured and certain debt maturities would be extended. These changes would have a materially positive impact on cash flow and support the Company’s growth initiatives, especially in digital can printing.
After submitting the proposed deleveraging plan to Nasdaq, the Company received notification on June 8, 2023 that Nasdaq has extended the deadline for the Company to achieve compliance with its Shareholders Equity Rule to September 30, 2023. The Company received notice on May 30 that it had regained compliance with the minimum price requirement for continued listing.
The Company is also pleased to reconfirm its second quarter guidance of positive EBITDA for its Craft division with a substantial reduction in the net operating loss for the division. Craft’s operating performance continues to improve, with May posting the highest monthly segment sales ever. The Company has digitally printed more than 15 million cans since its new Portland, Oregon location was opened last year. The Company is also updating second quarter guidance to state that its Spirits division is performing better than internal profit plans.
Geoffrey Gwin, Eastside’s CEO, stated, “I am very pleased with the Company’s improvements in the quarter and also that our key strategic partners are acknowledging these improvements with their willingness to consider this debt for equity transaction.”
About Eastside Distilling
Eastside Distilling, Inc. (NASDAQ: EAST) has been producing high-quality, award-winning craft spirits in Portland, Oregon, since 2008. The Company is distinguished by its highly decorated product lineup that includes Azuñia Tequilas®, Burnside Whiskeys®, Hue-Hue Coffee Rum®, and Portland Potato Vodkas®. All Eastside spirits are crafted from natural ingredients for quality and taste. Eastside’s Craft Canning + Printing subsidiary is one of the Northwest’s leading independent mobile canning, co-packing and largest digital can printing operation in the Pacific Northwest.
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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