Eastside Distilling Reports Mixed Q3 Results, Net Loss Reduction, and Strategic Developments

Eastside Distilling, Inc. reported its financial results for the nine months ending September 30, 2024, highlighting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.

For the third quarter of 2024, total sales reached $783,000, a decrease from $849,000 in Q3 2023. Net sales also fell to $760,000 from $806,000 year-over-year. However, gross profit improved to $200,000, up from $168,000 in the same quarter last year, resulting in a gross margin increase to 26% from 21%. Despite this, the company reported a loss from operations of $(452,000), worsening from $(307,000) in Q3 2023. The net loss for Q3 2024 was $(1,359,000), a reduction from $(2,156,000) in Q3 2023, indicating improved performance in terms of loss reduction.

For the nine months ended September 30, 2024, total sales were $2.1 million, down from $3.1 million in the same period of 2023. Net sales decreased to $1.977 million from $2.939 million, with gross profit declining to $501,000 from $999,000. The net loss for the nine months was $(4.14 million), an improvement from $(5.397 million) in 2023, reflecting a decrease in losses attributable to common shareholders from $(5.51 million) to $(4.253 million).

The company’s total current assets increased to $5.024 million as of September 30, 2024, from $4.537 million at the end of 2023. However, total assets decreased to $16.224 million from $17.480 million, while total current liabilities surged to $17.628 million from $4.205 million, leading to a total liabilities increase to $18.684 million from $16.627 million. This resulted in a total stockholders’ equity deficit of $(2.46 million) compared to a positive equity of $853,000 at the end of 2023.

Strategically, Eastside Distilling entered into a merger agreement with Beeline Financial Holdings, Inc. on September 4, 2024, which closed on October 7, 2024. This merger is expected to enhance the company’s operational capabilities. Additionally, a Debt Exchange Agreement was executed, resulting in the assignment of 720 barrels of spirits to Craft Canning + Printing, with assets classified as held for sale as of September 30, 2024.

The company continues to face challenges, including a substantial accumulated deficit of $87 million and reliance on debt and equity financing for ongoing operations. The independent auditor expressed substantial doubt about the company’s ability to continue as a going concern based on its financial statements for the year ended December 31, 2023.