Eastside Distilling Inc

DEF 14A 1 formdef14a.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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Filed by a party other than the Registrant ☐

Check the appropriate box:

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YOUR VOTE IS VERY IMPORTANT

Dear Eastside Shareholder:

You are invited to attend a special meeting (the “Special Meeting”) of shareholders of Eastside Distilling, Inc., a Nevada corporation (“Eastside,” the “Company,” “we,” “us,” or “our”) to be held on March 3, 2025 at 2:00 pm Eastern time. There will be no in person meeting; instead we will hold a virtual meeting via the listen-only conference call by calling 877-407-3088 (Toll Free). If you encounter any technical difficulties with the virtual meeting platform on the meeting day, please call 877-804-2062 (toll free) or email proxy@equitystock.com. For details see the Notice of Meeting which follows.

The board of directors of Eastside (the “Board”) has approved, and on October 7, 2024 Eastside completed, transactions pursuant to an Agreement and Plan of Merger and Reorganization, as amended (the “Merger Agreement”) by and among the Eastside, East Acquisition Sub, Inc., a wholly-owned subsidiary of Eastside (“Merger Sub”) and Beeline Financial Holdings, Inc., a Delaware corporation (“Beeline”). The Merger Agreement, as amended, is attached as Annex A to the accompanying Proxy Statement. Under the terms of the Merger Agreement, Beeline merged with and into Merger Sub and became a wholly-owned subsidiary of the Company (the “Merger”). In the Merger, Eastside issued to the former shareholders of Beeline a total of 517,775 shares of a newly designated Series F-1 Convertible Preferred Stock (the “Series F”) and a total of 69,482,229 shares of a newly designated Series F Convertible Preferred Stock (the “Series F,” and together with the Series F-1, the “Merger Shares”). Subject to certain limitations, including approval of Eastside’s shareholders of the Merger and transactions related thereto including full conversion of the Merger Shares, the Merger Shares are convertible into a total of 69,603,337 shares of Eastside common stock, representing approximately 82.5% of the Company’s common stock after giving effect to the full conversion thereof and certain other issuances, subject to certain adjustments. Beeline is a fintech mortgage lender and title provider. In connection with the Merger, Eastside also agreed to issue stock options and warrants to former holders of Beeline stock options and warrants (the “Derivatives”).

Following the closing of the Merger, the Company has raised capital through the issuance of stock and derivative securities convertible or exercisable into common stock (the “Subsequent Securities,” and together with the Merger Shares and the Derivatives, the “Securities”) for purposes of raising the necessary capital to fund the Company’s ongoing operations, among other uses, including based on the capital needs of Beeline following the Merger in subsequent transactions. In order to ensure compliance with the rules of The Nasdaq Stock Market, LLC (“Nasdaq”), the Subsequent Securities issued in the subsequent transactions including issuance of the Derivatives are also subject to shareholder approval as outlined in detail in the accompanying Proxy Statement.

The Company has also entered into agreements contemplating an equity line of credit transaction with an institutional investor (the “Purchaser”) pursuant to which the Company agreed to issue and sell, and the Purchase agreed to purchase, up to $20 million of the Company’s common stock, subject to Nasdaq rules (such transaction, the “Equity Line of Credit” or the “ELOC”). The issuances of shares of common stock and related rights and terms under the Merger Share Issuance Proposal are referred to as the “Merger Share Issuance,” the issuances of shares of common stock and related rights and terms under the Equity Line of Credit Proposal are referred to as the “ELOC Share Issuance,” and the Merger Share Issuance and the ELOC Share Issuance are together collectively referred to as the “Share Issuances.”

In connection with the Merger, the Company is also seeking to change its name to “Beeline Holdings, Inc.” to reflect a shift in and align our focus to the Beeline business following the Merger (the “Name Change”).

Eastside’s common stock is listed on The Nasdaq Capital Market (“Nasdaq”). Because the former Beeline shareholders will, if the Merger Share Issuance Proposal is approved, own upon conversion approximately 82.5% of the number of shares of a sum consisting of (i) common stock outstanding on October 7, 2024 or 3,730,625 shares, plus (ii) shares issuable upon conversion of the Series B Convertible Preferred Stock (the “Series B”) or 40,323 shares, shares issuable upon conversion of the Series D Convertible Preferred Stock (the “Series D”) or 1,419,300 shares, and shares issuable upon conversion of the Series E Convertible Preferred Stock (the “Series E”) or 1,000,000 shares, (iii) shares issuable on conversion of securities issued in the initial financing of the post-Merger company of at least $1.5 million and less than $3.25 million and (iv) shares issued to settle pre-existing liabilities, which other shares can add up to 14,848,485 shares without resulting in an increase in shares underling the Series F and F-1. This 82.5% is equal to approximately 70,000,000 shares of common stock.

Following approval of the Merger Share Issuances, we expect that Nicholas Liuzza, the Chief Executive Officer of Beeline, will be appointed as Chief Executive Officer of Eastside and Geoffrey Gwin, our current Chief Executive Officer, will be appointed as Executive Vice President or some other senior officer position and remain as Chairman of the Board.

The matters being brought before the shareholders, and certain other material information relating thereto, are described in the enclosed Proxy Statement being mailed to Eastside’s shareholders of record in connection with the Special Meeting.

As required by the Nasdaq rules, the Merger and the Merger Share Issuances involve a change of control which means under Nasdaq rules, a new listing application must be submitted to Nasdaq even though our common stock is currently listed on Nasdaq. Accordingly, we are submitting a new listing application to Nasdaq to reflect the new status of the combined company for Nasdaq purposes resulting therefrom. If that application is approved and the Merger Share Issuance Proposal is approved, Eastside common stock will continue to trade on Nasdaq under the symbol “BLNE.” On January 28, 2025, the closing price per share of Eastside common stock as reported by Nasdaq was $0.83. We urge you to obtain current market information for Eastside common stock. Based upon the shares of our common stock outstanding on October 7, 2024 when the Merger closed, we were limited by Nasdaq rules to only issuing 745,752 shares which represented 19.99% of the Company’s common stock as of that date without getting shareholder approval. Proposal 1 not only seeks approval of the shares of common stock underlying the Merger Shares and the Derivatives pursuant to the Merger; in addition, we are seeking approval of our shareholders to also approve the shares of common stock issuable upon conversion of preferred stock and exercise of warrants we issued subsequent after October 7 th. This is covered under Proposal 1.

Proposal 2 relates to the ELOC Share issuance. While it is difficult to predict the total number of shares of common stock we may issue under the ELOC, using the hypothetical purchase price of $0.51 as the lowest price at which we will issue shares of common stock to the Purchaser, we estimate that we may issue as many as 39,215,686 shares. We use the $0.51 price since any issuances below that price will permit holders of our Series G Convertible Preferred Stock (the “Series G”) to get more shares under anti-dilution protections.

We will hold the Special Meeting of our shareholders to vote on these matters. The Board also asks that you vote to change our corporate name to Beeline Holdings, Inc., ratify the appointment of Salberg & Company, P.A., the Company’s independent registered public accounting firm, and approve a proposal to approve an adjournment of the Special Meeting, if necessary, to solicit additional proxies in favor of the foregoing proposals.

Whether or not you plan to attend the Special Meeting, please take the time to cause your shares to be voted by completing and mailing the enclosed proxy card or submitting your proxy through the Internet, by email or fax using the procedures in the proxy voting instructions included with your proxy card. Even if you return the proxy, you may attend the Special Meeting and vote your shares online at the meeting.

YOUR VOTE IS IMPORTANT.

The Proxy Statement describes the Merger Agreement, the Merger Shares, the Subsequent Securities and Merger Share Issuance, the ELOC and ELOC Share Issuance, and other matters to be considered at the Special Meeting in more detail. You should read this entire document carefully, including the Merger Agreement and other documents related to the Securities which are included as annexes to this Proxy Statement.

We look forward to seeing you at the Special Meeting and to the successful completion of the matters to be addressed therein.

/s/ Geoffrey Gwin

Geoffrey Gwin

Chief Executive Officer and Chairman of the Board

Eastside Distilling, Inc.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the matters described in this Proxy Statement or determined if this Proxy Statement is accurate or adequate. Any representation to the contrary is a criminal offense.

The Proxy Statement is dated February 5, 2025, and, together with the accompanying proxy card, is first being mailed or otherwise delivered on or about February 5, 2025 to Eastside shareholders of record as of January 23, 2025 which is the Record Date for the Special Meeting.

SUBMITTING A PROXY ELECTRONICALLY, BY INTERNET, OR BY MAIL

Eastside shareholders of record on January 23, 2025 may submit their proxies as follows:

If you are a beneficial owner, please refer to your proxy card or the information forwarded by your bank, broker or other holder of record to see which options are available to you.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To Be Held On March 3, 2025

Dear Eastside Shareholder:

Eastside Distilling, Inc. (“Eastside,” the “Company,” “we,” “us,” or “our”) is pleased to invite you to attend a special meeting (the “Special Meeting”) of the shareholders of Eastside which will be held on March 3, 2025 at 2:00 pm Eastern time. There will be no in person meeting. Instead the Special Meeting will be virtual and conducted as a listen-only conference call by calling 877-407-3088 (Toll Free). There will not be a physical meeting location. If you encounter any technical difficulties with the virtual meeting platform on the meeting day, please call 877-804-2062 (toll free) or email proxy@equitystock.com.

The purpose of the Special Meeting is to consider and to vote upon the following proposals:

The Eastside Board of Directors (the “Board”) approved the Agreement and Plan of Merger and Reorganization dated September 4, 2024, as amended on October 7, 2024, by and among Eastside, East Acquisition Sub, Inc., a wholly-owned subsidiary of Eastside (“Merger Sub”) and Beeline Financial Holdings, Inc. (“Beeline), as amended (the “Merger Agreement”) and the other agreements and transactions contemplated by the Merger Agreement pursuant to which, among other things, Beeline merged with and into Merger Sub and became a wholly-owned subsidiary of the Company in exchange for the issuance of convertible preferred stock to former Beeline shareholders (the “Merger”), as well as subsequent transactions pursuant to which the Company has issued or agreed to issue, subject to Nasdaq rules, stock and derivative securities which as and when convertible or exercisable, together with the shares of Series F and F-1 issued to former Beeline shareholders in the Merger (the “Merger Shares”), will result in the issuance of shares of the Company’s common stock and voting rights in excess of 19.99% of the Company’s common stock outstanding as of the closing of the Merger.

The Board has also approved, and the Company has entered into agreements contemplating an equity line of credit transaction with an accredited investor (the “Purchaser”) pursuant to which the Company agreed to issue and sell, and the Purchaser agreed to purchase, up to $20 million of the Company’s common stock, subject to Nasdaq rules (such transaction, the “Equity Line of Credit” or the “ELOC”). The ELOC proposal is Proposal 2 and seeks shareholder approval for the issuance up to 39,215,686 shares of common stock as described in more detail in the Proxy Statement.

In connection with the Merger, the Company is also seeking to change its name to “Beeline Holdings, Inc.” to reflect a shift in and align our focus to the Beeline business following the Merger (the “Name Change”). The remaining proposals are asking our shareholders to ratify the appointment of our auditors and adjourn the meeting if necessary to permit us to seek additional votes.

The Board determined that each of the foregoing proposals are advisable and in the best interests of Eastside and its shareholders and unanimously recommends that Eastside shareholders vote “FOR” each such proposal.

**Your vote is very important.**Eastside shareholders must approve the Proposals in order for the Company to complete certain transactions following the Merger, including capital raising transactions and other matters which are critical to the Company’s ongoing operations, business plan and future success.

THE BOARD UNANIMOUSLY RECOMMENDS THAT EASTSIDE SHAREHOLDERS APPROVE EACH OF THE PROPOSALS LISTED ABOVE.

The close of business on January 23, 2025 has been fixed as the record date for the Special Meeting (the “Record Date”). Only holders of record of Eastside shareholders on the Record Date are entitled to notice of, and to vote at, the Special Meeting or any adjournments or postponements of the Special Meeting.

The Proxy Statement accompanying this notice provides for more detailed information regarding the matters to be acted upon at the Special Meeting. You are encouraged to read the entire Proxy Statement carefully, including the Merger Agreement, which is included as Annex A to the Proxy Statement.

SO THAT YOUR SHARES WILL BE REPRESENTED WHETHER OR NOT YOU ATTEND THE SPECIAL MEETING, PLEASE SUBMIT A PROXY AS SOON AS POSSIBLE BY MAIL, FAX, E-MAIL OR THROUGH THE INTERNET. INSTRUCTIONS ON THESE DIFFERENT WAYS TO SUBMIT YOUR PROXY ARE FOUND ON THE ENCLOSED PROXY CARD. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED AT THE SPECIAL MEETING. REMEMBER, YOUR VOTE IS IMPORTANT, SO PLEASE ACT TODAY!

By Order of the Board of Directors,

Geoffrey Gwin

Chief Executive Officer and Chairman of the Board

February 5, 2025