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EAST: RRW continues to gain traction with product available in 29 states with Walmart adding the whiskey to its stores in Indiana. The warrants have now been exercised, generating over $10.5 million in gross proceeds.

10/01/2018
By Ian Gilson, PhD, CFA

NASDAQ:EAST

READ THE FULL EAST RESEARCH REPORT

The common stock warrants have now expired. Counting those that had been exercised prior to the call 98.2% of the warrants sold in public offerings of common stock in August 2017 plus warrants included in note sales in the period of March and June 2018 have been redeemed. Gross proceeds of close to $10.6 million have been received.

Eastside Distilling's (NASDAQ:EAST) underwriter for the August 2017 stock offering, Roth Capital Partners, elected to buy 60,000 of their underwriter units and exercise the attached warrants.

After all the transactions are included, 7,199,905 total shares are issued and outstanding. We have adjusted our estimates to include all of the new shares.

The Craft Spirits Industry in the U.S. continues to grow, with a CAGR of 30% in retail sales (to $3.7 billion) from 2012 to 2017. Volume grew at a 24% CAGR over the same period (to 7.2 million cases), suggesting that the craft spirits market is a premium product market.

Redneck Riviera Whiskey continues increase its footprint in the U.S. Indiana is now included (state number 29) and Walmart has authorized its sale in its Indiana stores. The distributor RNDC and Big Red Liquors are adding RRW to store shelves as quickly as possible.

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