Eastside Distilling(US:EAST)2025-04-15 20:11Financial Performance - For the year ended December 31, 2024, total revenue was $3.8 million, consistent with the prior year's revenue of $3.8 million [334]. - The net loss for 2024 was $13.1 million, compared to a net loss of $7.5 million in 2023, reflecting an increase in net loss from continuing operations to $6.2 million from $4.8 million [334][339]. - Beeline's revenue contribution from October 8, 2024, to December 31, 2024, was $1.2 million, while Bridgetown Spirits generated $2.6 million in revenue, down from $3.8 million in 2023 [338]. - Total revenues for 2024 were $3.772 million, a decrease from $3.787 million in 2023 [352]. - Bridgetown Spirits reported net sales of $2.577 million for 2024, down from $3.787 million in 2023, reflecting an 11% decline in case sales [362][363]. - Gross profit for Bridgetown Spirits was $0.496 million in 2024, with a gross margin of 19%, down from 31% in 2023 [365]. - The net loss for 2024 was $13,076 million, compared to a net loss of $7,535 million in 2023, indicating a worsening financial position [445]. - Comprehensive loss attributable to common stockholders was $11,367 million in 2024, compared to $7,535 million in 2023, highlighting increased financial strain [445]. Expenses and Losses - Interest expense for 2024 was $2.2 million, up from $1.1 million in 2023, primarily due to debt and warrant-related expenses [340]. - Total operating expenses for Bridgetown Spirits increased to $6.417 million in 2024 from $4.449 million in 2023, primarily due to an impairment loss of $3.356 million [362][368]. - Operating expenses increased significantly to $12,802 million in 2024, up from $6,211 million in 2023, primarily due to a rise in salaries and benefits [445]. - The company experienced a significant impairment loss of $3,356 million in 2024, compared to $364 million in 2023, indicating potential asset devaluation [445]. - Loss from operations for 2024 was $9,030 million, compared to a loss of $2,424 million in 2023, reflecting increased operational challenges [445]. Assets and Liabilities - The Company reported total assets of $66,515,000 as of December 31, 2024, compared to $17,480,000 as of December 31, 2023, indicating significant growth [440]. - Current assets increased to $10,040,000 in 2024 from $4,537,000 in 2023, primarily driven by cash and cash equivalents rising to $391,000 from $306,000 [441]. - Total liabilities amounted to $17,547,000 in 2024, up from $16,627,000 in 2023, reflecting an increase in current liabilities [441]. - The Company’s accumulated deficit increased to $94,189,000 in 2024 from $82,706,000 in 2023, indicating ongoing financial challenges [441]. - The company has a working capital deficit as of December 31, 2024, raising concerns about its ability to continue as a going concern [458]. Capital and Equity - The Company’s total stockholders' equity rose to $48,968,000 in 2024 from $853,000 in 2023, reflecting improved financial positioning [441]. - The Company’s additional paid-in capital increased significantly to $141,877,000 in 2024 from $83,559,000 in 2023, indicating successful capital raising efforts [441]. - The company issued 34,350 shares of common stock for cash, contributing to the overall capital increase [448]. - The company plans to issue additional shares related to debt conversion, with a total of 255,474 shares expected to be issued [448]. - The company issued 47,963 shares for the merger, which is expected to strengthen its equity position [454]. Mergers and Acquisitions - The merger with Beeline Financial was completed on October 7, 2024, and is expected to impact future financial results significantly [310][335]. - The merger with Bridgetown Spirits Corp. and Beeline Financial closed on October 7, 2024, which is expected to enhance market presence and operational capabilities [453]. - The Company completed a business acquisition in October 2024, which involved significant management judgment in determining fair values for assets and liabilities [424]. Cash Flow and Liquidity - Net cash used in operating activities for 2024 was $3.2 million, compared to $1.5 million in 2023, largely due to Beeline's net loss [379]. - As of March 31, 2025, the company had $1.4 million in cash and indicated insufficient resources to meet working capital needs for the next 12 months [372][376]. - The company has recognized a restricted cash balance of $0.791 million as of December 31, 2024, indicating liquidity constraints [469]. - Cash used in operating activities of continuing operations was $3.229 million in 2024, up from $1.528 million in 2023, reflecting worsening cash flow issues [450]. Revenue Recognition and Accounting Policies - The Company recognizes gains on the sale of mortgage loans based on the difference between sales proceeds and carrying value, with unrealized gains and losses included in net gains on sale of loans [383]. - Revenue from loan origination fees is recognized at the time mortgage loans are funded, with costs charged to operations as incurred [389]. - Interest income on mortgage loans is recognized until loans become 90 days delinquent, at which point they are put on nonaccrual status [390]. - Bridgetown Spirits recognizes net sales by applying ASC 606, with revenue recognized upon shipment to wholesale customers, except for consignment sales [394][395]. - The Company accounts for business combinations under ASC 805, allocating purchase price to identifiable assets and liabilities at fair value, with excess recorded as goodwill [402]. Impairment and Reserves - The Azuñia brand's intangible asset impairment assessment was identified as a critical audit matter, with management performing a quantitative impairment test [428]. - Goodwill is tested for impairment annually, with potential impairment recognized if carrying value exceeds estimated fair value [404]. - The Company establishes reserves for potential losses related to mortgage loans that may require repurchase due to borrower defaults or underwriting issues, evaluating adequacy based on historical loss experience and economic trends [385].