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Eastside Distilling (ESDI): Year end equity placement reduces debt and raises cash.

01/10/2017
By Ian Gilson, PhD, CFA

OTC:ESDI

Eastside Distilling announced on Jan. 09, 2017 that it had completed three transactions on Dec. 30, 2016 that resulted in an increase in net working capital of close to $2.75 million.

The company closed a private placement of $1.04 million gross that consisted of 800,000 shares of stock at $1.30 plus, for each share, a three year warrant to purchase stock at $2.50 a share. This transaction generated $1.04 million gross and there were no underwriters, placement agent or selling agents. This stock will be registered asap.

Five accredited investors converted outstanding warrants for 428,846 shares of stock at a price of $1.30, reduced from a strike price of $2.00 a share. This generated $0.557 million in cash. The reduction in price was an inducement by the company and was available for short period of time.

Likewise, ten accredited investor received 886,538 shares of stock in exchange for $1.152 million of promissory notes issued in 2016. This transaction was also at $1.30 a share.

The net impact of the three transactions was an increase in cash of $1.597 and a reduction of $1.152 million in notes payable. We have adjusted our future earnings estimates to reflect the new shares which, under current accounting rules, will result in a decline in net loss per share in 2017.

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