As filed with the Securities and Exchange Commission on July 23, 2018November 24, 2021

Registration No.Number 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.WASHINGTON, DC 20549

FORM S-3

REGISTRATION STATEMENT UNDER

Under

The Securities Act ofTHE SECURITIES ACT OF 1933

EASTSIDE DISTILLING, INC.

(Exact name of registrant as specified in its charter)

1001 SE Water Avenue, Suite 390

Portland, OR 97114

(971) 888-4264

(Address, including zip code, and telephone number, including area code,PAUL BLOCK, CHIEF EXECUTIVE OFFICER

of registrant’s principal executive offices)

Grover T. Wickersham

Chief Executive Officer

Eastside Distilling, Inc.

1001 SE Water Avenue,8911 NE Marx Drive, Suite 3902A

Portland, OR 97214Oregon 97220

(971) 888-4264

(Name, including zip code,Address and telephone number including area code,of Registrant’s principal executive offices

and name of agent for service)service of process.)

Copy to:to

ROBERT BRANTL, ESQ.

Approximate Datedate of Commencementcommencement of the Proposed Saleproposed sale to the Public:public: From time to time after the effective date of this Registration Statement.registration statement.

If the only securities being registered on this Formform are being offered pursuant to dividend or interest reinvestment plans, please check the following box: [  ]box. ☐

If any of the securities being registered on this Formform are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: [X]box. ☒

If this Formform is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]☐

If this Formform is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]☐

If this Formform is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. [  ]☐

If this Formform is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D., filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. [  ]☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company,” “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 7(a)(2)(B) of the Securities Act. [  ]

CALCULATION OF REGISTRATION FEE

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Exchange Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. These securitiesWe may not be soldsell these securities until the Registration Statementregistration statement filed with the Securities and Exchange Commission of which this prospectus is a part, is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, Dated July 23, 2018completion, dated November 24, 2021

PROSPECTUS

Eastside Distilling, Inc.

500,000 Warrants 

and

681,6571,119,624 Shares of Common Stock

This prospectus relates tocovers the offer and resale from time to time by certain selling security holdersthe Selling Shareholder named inon page 7 of this prospectus of up to 500,000 common stock purchase warrants (the “warrants”) and 681,657 shares of our common stock (the “shares” and collectively with the warrants, sometimes referred to as the “securities”), of which 500,000to:

The Selling Shareholder will sell its shares of common stock are issuable upon exerciseat prevailing market prices, at privately negotiated prices, or in any other manner allowed by law. The Selling Shareholder may be deemed an underwriter of the warrants and 181,657 shares were issued upon conversion of convertible promissory notes (the “notes”). The warrants were issued to the selling security holders in a private placement of straight notes and warrants that was conducted between March and June 2018, and the converted notes were issued in an April 2017 private placement.

The selling security holders may sell the warrants and/or the shares of common stock described in this prospectus in a number of different ways and at varying prices. We provide more information about how the selling security holders may sell their securities in the section entitled “Plan of Distribution” on page 31. The selling security holders will bear all commissions and discounts, if any, attributable to the sale or disposition of the warrants and shares, or interests therein. We will bear all costs, expenses and fees in connection with the registration of the securities. We will not be paying any underwriting discounts or commissions in thiswhich it is offering.

We are not selling any securities underIf the Selling Shareholder exercises its warrant in full for cash, we will receive $437,497. However, the Selling Shareholder will receive all proceeds from the sale of stock held by it in this prospectus andoffering. We will not receive any proceeds from the sale of the warrants or shares by the selling security holders. However, we will receiveSelling Shareholder. We have agreed to pay the exercise price ofexpenses related to the warrants priorregistration related to issuance of the underlying shares, and the proceeds from such exercise will be used for working capital and general corporate purposes.this offering.

Our common stock is listedcurrently traded on the NASDAQ Capital Market under the trading symbol “EAST.” On July 19, 2018,December __, 2021 the reported closing sale pricesprice for our common stock was $____.

Purchase of our common stock and warrantsinvolves substantial risk. Prior to making a decision about investing in our securities, please review the section entitled “Risk Factors,” which appears on the NASDAQ Capital Market were $8.35 per share and $2.33 per warrant, respectively.

A prospectus supplement may add, update, or change information contained in this prospectus. You should carefully read this prospectus, any applicable prospectus supplement, and the information incorporated by reference inpage 7 of this prospectus, and any applicable prospectus supplement before you make your investment decision.

INVESTING IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY READ AND CONSIDER THE SECTION ENTITLED “RISK FACTORS” ON PAGE 9 AND THE RISK FACTORS INCLUDED IN OUR PERIODIC REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IN ANY APPLICABLE PROSPECTUS SUPPLEMENT AND IN ANY OTHER DOCUMENTS WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSION.the section entitled “Risk Factors,” which begins on page 14 of our Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on March 31, 2021.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is December             , 2018.2021

You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus.

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf registration process, from time to time, the Selling Shareholder may sell up to 1,119,624 shares of common stock. We urgemay also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to read carefullythat offering. We may also use a prospectus supplement and any related free writing prospectus to add, update, or change any of the information contained in this prospectus or in documents we have incorporated by reference. This prospectus, together with any applicable prospectus supplements, any related free writing prospectuses and the informationdocuments incorporated herein by reference asinto this prospectus, includes all material information relating to this offering. To the extent that any statement that we make in a prospectus supplement is inconsistent with statements made in this prospectus, the statements made in this prospectus will be deemed modified or superseded by those made in a prospectus supplement. Please carefully read both this prospectus and any prospectus supplement together with the additional information described below under the heading“Information Incorporated by Reference” and “Where You Can Find More Information,”Information” before buying any of the securities being offered.

Neither we,We have not authorized any dealer, salesman or other person to give any information or to make any representations other than those contained or incorporated by reference in this prospectus and in any accompanying prospectus supplement. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus or any accompanying prospectus supplement. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which it relates, nor does this prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any selling stockholder, has authorized anyonejurisdiction to provide you with different information, and if anyone provides,any person to whom it is unlawful to make such offer or has provided you, with inconsistent information, yousolicitation in such jurisdiction. You should not rely on it. The selling security holders are offering to sell, and seeking offers to buy, warrants and/or shares of our common stock, only in jurisdictions where offers and sales are permitted. Theassume that the information contained in this prospectus as well asand any accompanying prospectus supplement is accurate on any date subsequent to the date set forth on the front cover of this document or that any information filed previously with the Securities and Exchange Commission (the “Commission”), andwe have incorporated herein by reference is accurate only as ofcorrect on any date subsequent to the date of the document containing the information, regardless of the time of delivery of this prospectus or any applicable prospectus supplement or any sale of our common stock.

A prospectus supplement may add to, update or change the information contained in this prospectus. You should read bothincorporated by reference, even though this prospectus and any applicableaccompanying prospectus supplement together with additional information described below under the heading “Where You Can Find More Information.” Unless the context otherwise requires, all referencesis delivered or securities sold on a later date.

We have proprietary rights to trademarks, trade names and service marks appearing in this prospectus that are important to “Eastside,” “Eastside Distilling,”our business. Solely for convenience, the “Company,” “we,” “us”trademarks, trade names and “our” referservice marks may appear in this prospectus without the ® and TM symbols, but any such references are not intended to Eastside Distilling, Inc.indicate, in any way, that we forgo or will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, trade names and service marks. All trademarks, trade names and service marks appearing in this prospectus are the property of their respective owners. We do not intend our consolidated subsidiaries, MotherLode Craft Distillery (wholly-owned)use or display of other parties’ trademarks, trade names or service marks to imply, and Big Bottom Distillery (majority-owned).such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

RISK FACTORSAvailable Information

Our executive offices are located at 8911 NE Marx Drive, Suite A2, Portland, Oregon 97220. Our telephone number is (971) 888-4264 and our internet address is www.eastsidedistilling.com. The information contained on our website is not incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our securities. Our common stock is listed on the Nasdaq Capital Market under the symbol “EAST”.

RISK FACTORS

Investment in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks. Before you make a decision to investinvesting in any of our securities, you should carefully consider carefully the risks, uncertainties and assumptions discussed under the section captionedItem 1A, “Risk Factors” containedFactors,” in our annual reportAnnual Report on Form 10-K for the fiscal year ended December 31, 20172020, which is incorporated herein by reference. You should also carefully consider the risk factors and other information contained in the applicable prospectus supplement and any applicable free writing prospectus before acquiring any of such securities. The realization of any of these risks might cause you to lose all or part of your investment in the offered securities.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the shares of our subsequent quarterly reportscommon stock by the Selling Shareholder. All proceeds from the sale of such shares will be for the account of the Selling Shareholder. We will pay for expenses of this offering, except that the Selling Shareholder will pay any broker discounts or commissions or equivalent expenses applicable to the sale of its shares. However, we will receive the sale price of any common stock we sell to the Selling Shareholder upon exercise of the Warrant. We expect to use the proceeds received from the exercise of the Warrant, if any, for general working capital purposes.

SELLING SHAREHOLDER

This prospectus relates to the offer and sale of up to 1,119,624 shares of our common stock by the Selling Shareholder identified below.

The table below sets forth the names of the Selling Shareholder, the number of shares of common stock owned beneficially by the Selling Shareholder as of December __, 2021, the number of shares which may be offered pursuant to this prospectus, and the number of shares and percentage of class to be owned by the Selling Shareholder after this offering. The Selling Shareholder may sell all, some, or none of its shares in this offering. See “Plan of Distribution.” We will not receive any proceeds from the sale of the common stock by the Selling Shareholder. The Selling Shareholder has not held any position or office or has had any other material relationship with us or any of our affiliates within the past three years other than as a result of its ownership of shares of equity securities. This information is based upon information provided by the Selling Shareholder. Since the Selling Shareholder may offer all, some, or none of its common stock in this offering, no definitive estimate as to the number of shares that will be held by the Selling Shareholder after this offering can be provided.

The information set forth in the table assumes (i) conversion of all 2,500,000 shares of Series B Preferred Stock held by the Selling Shareholder with a conversion price of $3.10 per share; (ii) that for the next three years the Company issues common stock to satisfy its obligation to pay a 6% dividend on Form 10-Q,the Series B Preferred Stock by issuing common stock or paying cash; and (iii) full exercise of the Warrant.

The actual number of shares of common stock issuable upon conversion of the Series B Preferred Stock, payment of the 6% dividend, and exercise of the Warrant is indeterminate, is subject to adjustment, and could be materially less or more than such estimated number depending on factors which cannot be predicted by us at this time, including, among other factors, the future market price of the common stock.

Pursuant to their terms, the Series B Preferred Shares and the Warrant are convertible or exercisable by the Selling Shareholder only to the extent that the number of shares of common stock thereby issuable, together with the number of shares of common stock owned by the Selling Shareholder and its affiliates (but not including shares of common stock underlying unconverted Series B Preferred Stock or unexercised options, warrants or convertible securities) would not exceed 9.99% of the then outstanding common stock as updated by our subsequent filings underdetermined in accordance with Section 13(d) of the Securities Exchange Act of 1934,1934. Accordingly, the number of shares of common stock set forth in the table as amended (the “Exchange Act”), eachbeneficially owned by the Selling Shareholder before the offering may exceed the number of shares of common stock that it could own beneficially at any given time as a result of its ownership of the Series B Preferred Stock and the Warrant.

Except as set forth in the footnotes to the table, the person named in the table has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by it, subject to community property laws where applicable. A person is considered the beneficial owner of securities that can be acquired within 60 days from the date of this prospectus through the exercise of any option, warrant or right. Shares of common stock subject to options, warrants or rights which are currently exercisable or exercisable within 60 days are considered outstanding for computing the ownership percentage of the person holding such options, warrants or rights, but are not considered outstanding for computing the ownership percentage of any other person.

The “Beneficial Ownership after Offering” column assumes the sale of all shares offered. The “Percent” columns are based on 15,525,811 shares of common stock outstanding as of November 15, 2021.

Holders of our common stock are entitled to receive dividends declared by our board of directors out of funds legally available for the payment of dividends, subject to the rights, if any, of preferred stockholders. In the event of our liquidation, dissolution or winding up, holders of common stock are entitled to share ratably in all of our assets remaining after we pay our liabilities and warrantsdistribute the liquidation preference of any then outstanding preferred stock. The rights, preferences and privileges of holders of common stock are subject to, decline and you may lose allbe adversely affected by, the rights of holders of any series of preferred stock that we may designate and issue in the future. Holders of common stock have no preemptive or part of your investment.other subscription or conversion rights. There are no redemption or sinking fund provisions applicable to the common stock.

The transfer agent and registrar for our common stock is Transfer Online, Inc. 512 SE Salmon Street, Portland, Oregon 97214 (Telephone: (503) 227-2950).

Risks Related to Our BusinessSeries B Preferred Stock

If our brands do not achieveThe Company’s Articles of Incorporation, as amended, authorize the Company to issue 100,000,000 shares of preferred stock, $0.0001 par value per share, issuable from time to time in or more widespread consumer acceptance, our growth may be limited.series (“Preferred Stock”). On October 20, 2021, the Company designated 2,500,000 shares of Series B Preferred Stock pursuant to a Certificate of Amendment to Designation.

Although our brands have achieved acceptanceThe Series B Preferred Stock accrues dividends at a rate of 6% per annum, payable annually on the last day of December of each year. Dividends shall accrue from day to day, whether or not declared, and shall be cumulative. Dividends are payable at the Company’s option either in cash or “in kind” in shares of Common stock; provided, however that dividends may only be paid in cash following the Pacific Northwest, mostfiscal year in which the Company has net income (as shown in its audited financial statements contained in its Annual Report on Form 10-K for such year) of our brands are relatively new and have not achieved extensive national brand recognition. Also, brands we may develop and/or acquire inat least $500,000, to the future may not establish widespread brand recognition. Accordingly, if consumers do not accept our brands, weextent permitted under applicable law out of funds legally available therefor. For “in-kind” dividends, holders will not be ablereceive that number of shares of Common stock equal to penetrate our markets and our growth may be limited.

We have incurred significant operating losses every quarter since our inception and anticipate that we will continue to incur significant operating losses in(i) the future.

We believe that we will continue to incur net lossesamount of the dividend payment due such stockholder divided by (ii) the volume weighted average price of the Common stock for the foreseeable future as we expect to make continued significant investment in product development and sales and marketing and to incur significant administrative expenses as we seek to grow our brands. We also anticipate that our cash needs will exceed our income from sales for the foreseeable future. Some of our products may never achieve widespread market acceptance and may not generate sales and profits to justify our investment in them. Also, we may find that our expansion plans are more costly than we anticipate and that they do not ultimately result in commensurate increases in our sales, which would further increase our losses. We expect we will continue to experience losses and negative cash flow, some of which could be significant. Results of operations will depend upon numerous factors, some of which are beyond our control, including market acceptance of our products, new product introductions and competition. We also incur substantial operating expenses at the corporate level, including costs directly related to beingninety (90) trading days immediately preceding a reporting company with the U.S. Securities and Exchange Commission (the “SEC”). We reported net losses of approximately $5.3 million and approximately $1.3 million for the year ended December 31, 2017 and the three months ended March 31, 2018, respectively. As of March 31, 2018, we had an accumulated deficit since inception of approximately $19.4 million.

We depend on a limited number of suppliers. Failure to obtain satisfactory performance from our suppliers or loss of our existing suppliers could cause us to lose sales, incur additional costs and lose credibility in the marketplace.

We depend on a limited number of third-party suppliers for the sourcing of the raw materials for all of our products, including our distillate products and other ingredients. These suppliers consist of third-party producers in the U.S. We do not have long-term, written agreements with any of our suppliers. The termination of our relationships or an adverse change in the terms of these arrangements could have a negative impact on our business. If our suppliers increase their prices, we may not be able to secure alternative suppliers, and may not be able to raise the prices of our products to cover all or even a portion of the increased costs. Also, our suppliers’ failure to perform satisfactorily or handle increased orders, delays in shipments of products from suppliers or the loss of our existing suppliers, especially our key suppliers, could cause us to fail to meet orders for our products, lose sales, incur additional costs and/or expose us to product quality issues. In turn, this could cause us to lose credibility in the marketplace and damage our relationships with distributors, ultimately leading to a decline in our business and results of operations. If we are not able to renegotiate these contracts on acceptable terms or find suitable alternatives, our business could be negatively impacted.

We depend on our independent wholesale distributors to distribute our products. The failure or inability of even a few of our distributors to distribute our products adequately within their territories could harm our sales and result in a decline in our results of operations.

We are required by law to use state-licensed distributors or, in 18 states known as “control states,” state-owned agencies performing this function, to sell our products to retail outlets, including liquor stores, bars, restaurants and national chains in the U.S. We have established relationships for our brands with a limited number of wholesale distributors; however, failure to maintain those relationships could significantly and adversely affect our business, sales and growth. We currently distribute our products in 36 states – Alabama, Alaska, California, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, Wisconsin, West Virginia and Wyoming (as well as in Ontario, Canada).

Over the past decade there has been increasing consolidation, both intrastate and interstate, among distributors. As a result, many states now have only two or three significant distributors. Also, there are several distributors that now control distribution for several states. If we fail to maintain good relations with a distributor, our products could in some instances be frozen out of one or more markets entirely. The ultimate success of our products also depends in large part on our distributors’ ability and desire to distribute our products to our desired U.S. target markets, as we rely significantly on them for product placement and retail store penetration. In addition, all of our distributors also distribute competitive brands and product lines. We cannot assure you that our U.S. alcohol distributors will continue to purchase our products, commit sufficient time and resources to promote and market our brands and product lines or that they can or will sell them to our desired or targeted markets. If they do not, our sales will be harmed, resulting in a decline in our results of operations.

We rely on a few key distributors, and the loss of any one key distributor would substantially reduce our revenues.

We currently derive a significant amount of our revenues from a few major distributors. A significant decrease in business from or loss of any of our major distributors could harm our financial condition by causing a significant decline in revenues attributable to such distributors. Sales to one distributor, the Oregon Liquor Control Commission, accounted for approximately 32% of our consolidated sales for each of the years 2017 and 2016. While we believe our relationships with our major distributors are good, we do not have long-term contracts with any of them and purchases generally occur on an order-by-order basis. If we experience a significant decrease in sales to any of our major distributors and are unable to replace such sales volume with orders from other customers, our sales may decrease which would have a material adverse financial effect on our results of operations and financial condition.

The sales of our products could decrease significantly if we cannot secure and maintain listings in the control states.dividend date.

In the control states,event of any voluntary or involuntary liquidation, dissolution or winding up, merger or consolidation in which the state liquor commissions act in placeCompany is a party, or a sale of distributorssubstantially all of the assets of the Company, each holder of Series B Preferred Stock shall be entitled, to receive an amount per share equal to $1.00 plus any accrued but unpaid dividends, which payments shall be made prior to any distribution to the holders of common stock.

For all matters submitted to a vote of the Company’s stockholders, each holder of Series B Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common stock into which the shares of Series B Preferred Stock held by such holder are convertible as of the record date. In addition, the holders of Series B Preferred Stock shall vote separately as a class to adversely alter any of the rights, preferences and decide which products areprivileges of the Series B Preferred Stock, to be purchased and offeredcreate any equity security having rights, preferences, or privileges to or on parity with the Series B Preferred Stock, or to purchase, redeem, or make any distribution with respect to any stock prior to the Series B Preferred Stock (subject to exceptions).

Each share of Series B Preferred Stock is convertible into shares of Common stock at a fixed conversion price equal to $3.10 per share, subject to adjustment for sale in their respective states. Products selected for listing in control states must generally reach certain volumes and/stock splits, combinations, or profit levels to maintain their listings. Products in control states are selected for purchase and sale through listing procedures which are generally made available to new products only at periodically scheduled listing interviews. Products not selected for listings can only be purchased by consumerssimilar events, among other adjustments, as provided in the applicable control state through special orders,Certificate of Designation. If, after September 24, 2022, the last sale price of Common stock is more than $5.00 per share (subject to appropriate adjustment) for thirty (30) consecutive trading days, then the Series B Preferred Stock will automatically convert into Common stock at the conversion price then in effect.

No Series B Preferred Stock may be converted and shares of Common stock may not be issued if, at all. If,after giving effect to the conversion or issuance, the holder, together with its affiliates, would beneficially own in excess of 9.99% of the future, we are unable to maintain our current listings in the control states, or secure and maintain listings in those states for any additional products we may develop or acquire, sales of our products could decrease significantly which would have a material adverse financial effect on our results of operations and financial condition.Company’s outstanding Common stock.

We must maintain a relatively large inventory of our products to support customer delivery requirements, and if this inventory is lost due to theft, fire or other damage or becomes obsolete, our results of operations would be negatively impacted.Undesignated Preferred Stock

We must maintain relatively large inventoriesThe board of our productsdirectors has the authority, without stockholder approval, subject to meet customer delivery requirements. We are always at risk of loss of that inventory duelimitations prescribed by law, to theft, fire or other damage, and any such loss, whether insured against or not, could cause us to fail to meet our orders and harm our sales and operating results. Also, our inventory may become obsolete as we introduce new products, cease to produce old products or modifyprovide for the design of our products’ packaging, which would increase our operating losses and negatively impact our results of operations.

If we are unable to identify and successfully acquire additional brands that are complementary to our existing portfolio, our growth will be limited, and, even if additional brands are acquired, we may not realize anticipated benefits, due to integration difficulties or other operating issues.

A component of our growth strategy may be the acquisition of additional brands that are complementary to our existing portfolio through acquisitions of such brands or their corporate owners, directly or through mergers, joint ventures, long-term exclusive distribution arrangements and/or other strategic relationships. For example, in May 2017, we acquired 90%issuance of the ownershipshares of BBD for its award-winning rangepreferred stock in one or more series, and by filing a certificate pursuant to the applicable law of super-premium ginsthe State of Nevada, to establish from time to time the number of shares to be included in each such series, and whiskeys,to fix the designation, powers, preferences and we acquired MotherLode in March 2017, which provides contract bottlingrights of the shares of each series and packaging services for existing and emerging spirits producers, some of whom contract with us to blendthe qualifications, limitations or distill spirits. If we are unable to identify suitable brand candidates and successfully execute our acquisition strategy, our growth will be limited.

Also, even if we are successful in acquiring additional brands, we may not be able to achieve or maintain profitability levels that justify our investment in, or realize operating and economic efficiencies or other planned benefits with respect to, those additional brands. The addition of new products or businesses entails numerous risks with respect to integration and other operating issues, any of which could have a detrimental effect on our results of operations and/or the value of our equity. These risks include,restrictions, including, but are not limited to:to, the following:

Our ability to grow through the acquisition of additional brands will also be dependent upon the availability of capital to complete the necessary acquisition arrangements. We intend to finance our brand acquisitions through a combination of our available cash resources, third-party financing and, in appropriate circumstances, the further issuance of equity and/or debt securities. Acquiring additional brands could have a significant effect on our financial position, and could cause substantial fluctuations in our quarterly and yearly operating results. Also, acquisitions could result in the recording of significant goodwill and intangible assets on our financial statements, the amortization or impairment of which would reduce reported earnings in subsequent years.

CERTAIN PROVISIONS OF NEVADA LAW,

Our failure to protect our trademarks and trade secrets could compromise our competitive position and decrease the value of our brand portfolio.THE COMPANY’S ARTICLES
OF INCORPORATION AND BYLAWS

Anti-takeover Effects of Our businessArticles of Incorporation and prospects depend in part on our ability to develop favorable consumer recognition of our brands and trademarks. Although we apply for registration of our brands and trademarks, they could be imitated in ways that we cannot prevent. Also, we rely on trade secrets and proprietary know-how, concepts and formulas. Our methods of protecting this information may not be adequate. Moreover, we may face claims of misappropriation or infringement of third parties’ rights that could interfere with our use of this information. Defending these claims may be costly and, if unsuccessful, may prevent us from continuing to use this proprietary information in the future and result in a judgment or monetary damages being levied against us. We do not maintain non-competition agreements with all of our key personnel or with some of our key suppliers. If competitors independently develop or otherwise obtain access to our trade secrets, proprietary know-how or recipes, the appeal, and thus the value, of our brand portfolio could be reduced, negatively impacting our sales and growth potential.

A failure of one or more of our key information technology systems, networks, processes, associated sites or service providers could have a material adverse impact on our business.

We rely on information technology (IT) systems, networks, and services, including internet sites, data hosting and processing facilities and tools, hardware (including laptops and mobile devices), software and technical applications and platforms, some of which are managed, hosted, provided and/or used by third-parties or their vendors, to assist us in the management of our business. The various uses of these IT systems, networks and services include, but are not limited to: hosting our internal network and communication systems; ordering and managing materials from suppliers; supply/demand planning; production; shipping products to customers; hosting our branded websites and marketing products to consumers; collecting and storing customer, consumer, employee, investor, and other data; processing transactions; summarizing and reporting results of operations; hosting, processing, and sharing confidential and proprietary research, business plans, and financial information; complying with regulatory, legal or tax requirements; providing data security; and handling other processes necessary to manage our business.

Increased IT security threats and more sophisticated cyber-crime pose a potential risk to the security of our IT systems, networks, and services, as well as the confidentiality, availability, and integrity of our data. If the IT systems, networks, or service providers we rely upon fail to function properly, or if we suffer a loss or disclosure of business or other sensitive information, due to any number of causes, ranging from catastrophic events to power outages to security breaches, and our business continuity plans do not effectively address these failures on a timely basis, we may suffer interruptions in our ability to manage operations and reputational, competitive and/or business harm, which may adversely affect our business operations and/or financial condition. In addition, such events could result in unauthorized disclosure of material confidential information, and we may suffer financial and reputational damage because of lost or misappropriated confidential information belonging to us or to our partners, our employees, customers, suppliers or consumers. In any of these events, we could also be required to spend significant financial and other resources to remedy the damage caused by a security breach or to repair or replace networks and IT systems.

Our failure to attract or retain key executive or employee talent could adversely affect our business.

Our success depends upon the efforts and abilities of our senior management team, other key employees, and a high-quality employee base, as well as our ability to attract, motivate, reward, and retain them. If one of our executive officers or significant employees terminates her or his employment, we may not be able to replace their expertise, fully integrate new personnel or replicate the prior working relationships, and the loss of their services might significantly delay or prevent the achievement of our business objectives. Qualified individuals with the breadth of skills and experience in our industry that we require are in high demand, and we may incur significant costs to attract them. We do not maintain and do not intend to obtain key man insurance on the life of any executive or employee. Difficulties in hiring or retaining key executive or employee talent, or the unexpected loss of experienced employees could have an adverse impact our business performance. In addition, we could experience business disruption and/or increased costs related to organizational changes, reductions in workforce, or other cost-cutting measures.

If we fail to manage growth effectively or prepare for product scalability, it could have an adverse effect on our employee efficiency, product quality, working capital levels and results of operations.

Any significant growth in the market for our products or our entry into new markets may require an expansion of our employee base for managerial, operational, financial, and other purposes. During any period of growth, we may face problems related to our operational and financial systems and controls, including quality control and delivery and service capacities. We would also need to continue to expand, train and manage our employee base. Continued future growth will impose significant added responsibilities upon the members of management to identify, recruit, maintain, integrate, and motivate new employees. Aside from increased difficulties in the management of human resources, we may also encounter working capital issues, as we will need increased liquidity to finance the marketing of the products we sell, and the hiring of additional employees. For effective growth management, we will be required to continue improving our operations, management, and financial systems and controls. Our failure to manage growth effectively may lead to operational and financial inefficiencies that will have a negative effect on our profitability. We cannot assure investors that we will be able to timely and effectively meet that demand and maintain the quality standards required by our existing and potential customers.

Risks Related to Our Industry

Demand for our products may be adversely affected by many factors, including changes in consumer preferences and trends.

Consumer preferences may shift due to a variety of factors, including changes in demographic and social trends, public health initiatives, product innovations, changes in vacation or leisure, dining and beverage consumption patterns and a downturn in economic conditions, which may reduce consumers’ willingness to purchase distilled spirits or cause a shift in consumer preferences toward beer, wine or non-alcoholic beverages. Our success depends in part on fulfilling available opportunities to meet consumer needs and anticipating changes in consumer preferences with successful new products and product innovations.

A limited or general decline in consumption in one or more of our product categories could occur in the future due to a variety of factors, including:

In addition, our continued success depends, in part, on our ability to develop new products to meet consumer needs and anticipate changes in consumer preferences. The launch and ongoing success of new products are inherently uncertain especially with regard to their appeal to consumers. The launch of a new product can give rise to a variety of costs and an unsuccessful launch, among other things, can affect consumer perception of existing brands and our reputation. Unsuccessful implementation or short-lived popularity of our product innovations may result in inventory write-offs and other costs.

We face substantial competition in our industry, and many factors may prevent us from competing successfully.

We compete on the basis of product taste and quality, brand image, price, service and ability to innovate in response to consumer preferences. The global spirits industry is highly competitive and is dominated by several large, well-funded international companies. Many of our current and potential competitors have longer operating histories and have substantially greater financial, sales, marketing and other resources than we do, as well as larger installed customer bases, greater name recognition and broader product offerings. Some of these competitors can devote greater resources to the development, promotion, sale and support of their products. As a result, it is possible that our competitors may either respond to industry conditions or consumer trends more rapidly or effectively or resort to price competition to sustain market share, which could adversely affect our sales and profitability.

In addition, the legalization of marijuana in any of the jurisdictions in which we sell our products may result in a reduction in sales. Studies have shown that sales of alcohol may decrease in jurisdictions where marijuana has been legalized (e.g. California, Colorado, Washington and Oregon). As a result, marijuana sales may adversely affect our sales and profitability.

Class actions or other litigation relating to alcohol abuse or the misuse of alcohol could adversely affect our business.

Our industry faces the possibility of class action or similar litigation alleging that the continued excessive use or abuse of beverage alcohol has caused death or serious health problems, or related to the labelling of our products. It is also possible that governments could assert that the use of alcohol has significantly increased government funded health care costs. Litigation or assertions of this type have adversely affected companies in the tobacco industry, and it is possible that we, as well as our suppliers, could be named in litigation of this type.

Also, lawsuits have been brought in a number of states alleging that beverage alcohol manufacturers and marketers have improperly targeted underage consumers in their advertising. Plaintiffs in these cases allege that the defendants’ advertisements, marketing and promotions violate the consumer protection or deceptive trade practices statutes in each of these states and seek repayment of the family funds expended by the underage consumers. While we have not been named in these lawsuits, we could be named in similar lawsuits in the future. Any class action or other litigation asserted against us could be expensive and time-consuming to defend against, depleting our cash and diverting our personnel resources and, if the plaintiffs in such actions were to prevail, our business could be harmed significantly.

Regulatory decisions and legal, regulatory and tax changes could limit our business activities, increase our operating costs and reduce our margins.

Our business is subject to extensive government regulation. This may include regulations regarding production, distribution, marketing, advertising and labeling of beverage alcohol products. We are required to comply with these regulations and to maintain various permits and licenses. We are also required to conduct business only with holders of licenses to import, warehouse, transport, distribute and sell beverage alcohol products. We cannot assure you that these and other governmental regulations applicable to our industry will not change or become more stringent. Moreover, because these laws and regulations are subject to interpretation, we may not be able to predict when and to what extent liability may arise. Additionally, due to increasing public concern over alcohol-related societal problems, including driving while intoxicated, underage drinking, alcoholism and health consequences from the abuse of alcohol, various levels of government may seek to impose additional restrictions or limits on advertising or other marketing activities promoting beverage alcohol products. Failure to comply with any of the current or future regulations and requirements relating to our industry and products could result in monetary penalties, suspension or even revocation of our licenses and permits. Costs of compliance with changes in regulations could be significant and could harm our business, as we could find it necessary to raise our prices in order to maintain profit margins, which could lower the demand for our products and reduce our sales and profit potential.

Also, the distribution of beverage alcohol products is subject to extensive taxation (at both the federal and state government levels), and beverage alcohol products themselves are the subject of national import and excise duties in most countries around the world. An increase in taxation or in import or excise duties could also significantly harm our sales revenue and margins, both through the reduction of overall consumption and by encouraging consumers to switch to lower-taxed categories of beverage alcohol. Although we expect a significantly positive impact on our operating results from the enactment of the Craft Modernization and Tax Reform Act of 2017, which was part of the 2017 federal tax legislation that went into effect on January 1, 2018, resulting from the lowering of the federal excise tax on spirits for the first 100,000 proof gallons per year from $13.50 to $2.70 per gallon, there can be no assurance this revised tax rate will remain in effect after the initial two-year period.

We could face product liability or other related liabilities that increase our costs of operations and harm our reputation.

Although we maintain liability insurance and will attempt to limit contractually our liability for damages arising from our products, these measures may not be sufficient for us to successfully avoid or limit liability. Our product liability insurance coverage is limited to $1 million per occurrence and $4 million in the aggregate and our general liability umbrella policy is capped at $2 million. Further, any contractual indemnification and insurance coverage we have from parties supplying our products is limited, as a practical matter, to the creditworthiness of the indemnifying party and the insured limits of any insurance provided by these suppliers. In any event, extensive product liability claims could be costly to defend and/or costly to resolve and could harm our reputation.

Contamination of our products and/or counterfeit or confusingly similar products could harm the image and integrity of, or decrease customer support for, our brands and decrease our sales.Bylaws

The success of our brands depends upon the positive image that consumers have of them. Contamination, whether arising accidentally or through deliberate third-party action, or other events that harm the integrity or consumer support for our brands, could affect the demand for our products. Contaminants in raw materials purchased from third parties and used in the production of our products or defects in the distillation and fermentation processes could lead to low beverage quality as well as illness among, or injury to, consumers of our products and could result in reduced sales of the affected brand or all of our brands. Also, to the extent that third parties sell products that are either counterfeit versions of our brands or brands that look like our brands, consumers of our brands could confuse our products with products that they consider inferior. This could cause them to refrain from purchasing our brands in the future and in turn could impair our brand equity and adversely affect our sales and operations.

Adverse public opinion about alcohol could reduce demand for our products.

Anti-alcohol groups have, in the past, advocated successfully for more stringent labeling requirements, higher taxes and other regulations designed to discourage alcohol consumption. In addition, recent developments in the industry may compel us to identify the source and location of our distillate products, and notify the consumer of whether the product was distilled by us. More restrictive regulations, negative publicity regarding alcohol consumption and/or changes in consumer perceptions of the relative healthfulness or safety of beverage alcohol could decrease sales and consumption of alcohol and thus the demand for our products. This could, in turn, significantly decrease both our revenues and our revenue growth, causing a decline in our results of operations.

Risks Related to this Offering and Our Securities

Our common stock is thinly traded, and investors may be unable to sell some or all of their shares at the price they would like, or at all, and sales of large blocks of shares may depress the price of our common stock.

Our common stock has historically been sporadically or “thinly-traded,” meaning that the number of persons interested in purchasing shares of our common stock at prevailing prices at any given time may be relatively small or nonexistent. As a consequence, there may be periods of several days or more when trading activity in shares of our common stock is minimal or non-existent, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. This could lead to wide fluctuations in our share price. Investors may be unable to sell their common stock at or above their purchase price, which may result in substantial losses. Also, as a consequence of this lack of liquidity, the trading of relatively small quantities of sharesauthority granted by our stockholders may disproportionately influence the price of shares of our common stock in either direction. The price of shares of our common stock could, for example, decline precipitously in the event a large number of shares of our common shares are sold on the market without commensurate demand, as comparedcharter to a seasoned issuer that could better absorb those sales without adverse impact on its share price.

Our failure to meet the continued listing requirements of the NASDAQ Capital Market could result in a delisting of our common stock.

In August 2017, our shares of common stock began trading on the NASDAQ Capital Market. If we fail to satisfy the continued listing requirements of the NASDAQ Capital Market, such as the corporate governance requirements or the minimum closing bid price requirement, NASDAQ may take steps to delist our common stock. Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we would take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the NASDAQ minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.

While our warrants are outstanding, it may be more difficult to raise additional equity capital.

We currently have outstanding publicly-traded warrants to purchase 1,099,972 shares of common stock (the “Public Warrants”) that were issued in our August 2017 public offering. As of June 30, 2018, we also have an aggregate of 1,698,375 non-trading, privately-issued common stock purchase warrants, including the 500,000 warrants being registered for resale under the registration statement of which this prospectus is a part (the “Private Warrants”) and 120,000 underwriter’s warrants to purchase units of common stock and warrants. During the term that these warrants are outstanding, the holders of such warrants will be given the opportunity to profit from a rise in the market price of our common stock. We may find it more difficult to raise additional equity capital while the Public Warrants and/or Private Warrants are outstanding.

If we do not maintain an effective registration statement or comply with applicable state securities laws, warrant holders may not be able to exercise the Public Warrants.

For holders of our redeemable Public Warrants to be able to exercise those securities, the exercise must be covered by an effective and current registration statement and qualify or be exempt under the securities laws of the state or other jurisdiction in which the warrant holders live. Although we will endeavor to have a current registration statement available at all times when the Public Warrants are in-the-money, warrant holders may encounter circumstances in which they will be unable to exercise them. We can give no assurance that we will be able to continue to maintain a current registration statement relating to the shares of our common stock underlying the Public Warrants or that an exemption from registration or qualification will be available throughout their term. This may have an adverse effect on demand for the Public Warrants and the prices that can be obtained from reselling them.

The redemption of the Public Warrants may require warrant holders to sell or exercise Public Warrants at a time that may be disadvantageous for them.

The closing price of our common stock exceeded $7.65 between June 20 and June 26, 2018, which satisfies the price condition that must be met before we are eligible to redeem the Public Warrants. We have not yet determined when we will redeem the Public Warrants. The terms of our Public Warrants prohibit us from redeeming them unless we have a current and effective registration statement available covering the exercise of the Public Warrants. In the event we exercise our right to redeem the Public Warrants, those warrants will be exercisable until the close of business on the date fixed for redemption in such notice. If any Public Warrant called for redemption is not exercised by such time, it will cease to be exercisable, and the holder thereof will only be entitled to the redemption price of $0.15 per Public Warrant. Notice of redemption of the Public Warrants could force holders to exercise the Public Warrants and pay the exercise price therefor at a time when it may be disadvantageous or impossible for them to do so or to sell the Public Warrants at the current market price when they might otherwise wish to hold the Public Warrants or accept the redemption price, which is likely to be substantially less than the market value of the Public Warrants at the time of redemption.

A decline in the price of our common stock could affect our ability to raise working capital and adversely impact our ability to continue operations.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. A decline in the price of our common stock could be especially detrimental to our liquidity and our operations. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect on our business plans and operations, including our ability to develop new services and continue our current operations. If our common stock price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have the resources to continue our normal operations.

We do not expect to pay dividends for the foreseeable future.

For the foreseeable future, it is anticipated that earnings, if any, that may be generated from our operations will be used to finance our operations and that cash dividends will not be paid to holders of common stock.

Our Chairman and Chief Executive Officer owns a significant number of shares of our outstanding common stock, and as long as he does, he may be able to control the outcome of stockholder voting.

Grover T. Wickersham, our Chairman and Chief Executive Officer, is deemed to be the beneficial owner of approximately 8.1% of the outstanding shares of our common stock as of June 30, 2018, including shares he owns as the indirect beneficial owner (but for which he disclaims beneficial ownership), and excluding shares he (or the entities for which he is deemed to be the beneficial owner) has the right to acquire upon exercise of warrants and options that may be exercised in the future. His actual direct ownership as of June 30, 2018 is approximately 2.2%. As a result of his direct and indirect beneficial ownership, he may be able to exercise substantial control and directly influence our affairs and business, including any determination with respect to a change in control, future issuances of common stock or other securities, declaration of dividends on the common stock and the election of directors. Were all of the options and warrants exercised for which Mr. Wickersham is deemed to own, whether directly and indirectly, his influence over matters that are subject to a stockholder vote would significantly increase.

We have the ability to issue additional shares of our common stock and shares of preferred stock without asking for stockholder approval, which could cause your investment to be diluted.

Our Articles of Incorporation authorizes the Board of Directors to issue upauthorize classes of Preferred Stock with either specified voting rights or rights providing the holders with voting control over the approval of certain extraordinary corporate action could be used to 15,000,000 sharescreate voting impediments or to frustrate persons seeking to effect a merger or to otherwise gain control of commonthe Company, either by diluting their stock and up to 100,000,000ownership or by vesting voting control over the acquisition in other persons. Our board of directors could authorize the issuance of shares of preferred stock. The power of the Board of Directors to issue shares of common stock preferred stock or warrants or options to purchase shares of common stock or preferred stock is generally not subject to stockholder approval. Accordingly, any additional issuance of our common stock, or preferred stockwith terms and conditions that may be convertible into common stock, maycould have the effect of diluting your investment, and the new securities may have rights, preferences and privileges senior to those of our common stock.

By issuing preferred stock, we may be able to delay, defer,discouraging a takeover or prevent a change of control.

Our Articles of Incorporation permits us to issue, without approval from our stockholders, a total of 100,000,000 shares of preferred stock. Our Board of Directors may determine the rights, preferences, privileges and restrictions granted to, or imposed upon, the shares of preferred stock and to fix the number of shares constituting any series and the designation of such series. It is possibleother transaction that our Board of Directors, in determining the rights, preferences and privileges to be granted when the preferred stock is issued, may include provisions that have the effect of delaying, deferring or preventing a change in control, discouraging bids for our common stock atmight involve a premium over the market price or that adversely affect the market price of and the voting and other rights of thefor holders of our common stock.

We face risks related to compliance with corporate governance laws and financial reporting standard.

The Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), as well as related rules and regulations implemented by the SEC and the Public Company Accounting Oversight Board, require compliance with certain corporate governance practices and financial reporting standards for public companies. These laws, rules and regulations, including compliance with Section 404 of the Sarbanes-Oxley Act of 2002 relating to internal control over financial reporting (“SOX 404”), has materially increased our legal and financial compliance costs and made some activities more time-consuming, burdensome and expensive. Although we currently believe our internal control over financial reporting is effective, the effectiveness of our internal controls in future periods is subject to the risk that our controls may become inadequate or may not operate effectively. Any failure to comply with the requirements of SOX 404, our ability to remediate any material weaknesses that we may identify during our compliance program, or difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. Any such failure could also adversely affect the results of the periodic management evaluations of our internal controls and, in the case of a failure to remediate any material weaknesses that we may identify, would adversely affect the annual auditor attestation reports regarding the effectiveness of our internal control over financial reporting that are required under SOX 404. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock and we could be subject to regulatory sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

Substantial sales of our stock may impact the market price of our common stock.

Future sales of substantial amounts of our common stock, including shares that we may issue upon exercise of options and warrants, could adversely affect the market price of our common stock. Further, if we raise additional funds through the issuance of common stock or securities convertible into or exercisable for common stock, the percentage ownership of our stockholders will be reduced and the price of our common stock may fall.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. The forward-looking statements are contained principally in the sections entitled “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential,” or the negative of those terms, and similar expressions and comparable terminology intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward- looking statements. These forward-looking statements represent our estimates and assumptions only as of the date of this prospectus and, except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this prospectus. You should read this prospectus, the documents incorporated by reference in this prospectus, the documents referenced in this prospectus and the documents filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. We discuss many of these risks in this prospectus in greater detail under the heading “Risk Factors” and elsewhere in this prospectus. You should not rely upon forward-looking statements as predictions of future events. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risks and uncertainties.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, after the date of this prospectus, we are under no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise.

We obtained the industry, market and competitive position data in this prospectus from our own internal estimates and research as well as from industry and general publications and research surveys and studies conducted by third parties. While we believe that each of these studies and publications is reliable, we have not independently verified market and industry data from third-party sources. While we believe our internal company research is reliable and the market definitions we use are appropriate, neither such research nor these definitions have been verified by any independent source.

USE OF PROCEEDS

The proceeds from the sale of warrants and shares of common stock offered pursuant to this prospectus are solely for the account of the selling security holders. We will not receive any proceeds from the sale of these securities by the selling security holders.

In the event a selling stockholder exercises warrants in lieu of reselling them, we will receive $5.40 per warrant exercised (subject to adjustment for stock splits, reverse splits and other similar recapitalization events). Such proceeds, if any, will be used for working capital and general corporate purposes.

SELLING SECURITY HOLDERS

This prospectus relates to the possible resale, from time to time, by the selling security holders identified in this prospectus of up to an aggregate of 500,000 common stock purchase warrants and 500,000 shares issuable upon exercise of those warrants. The warrants were issued in a private placement as a component of a promissory note financing in which we issued 10,000 warrants for every $100,000 in principal amount of indebtedness. The private placement was conducted between March and June 2018, and we raised capital from a total of 15 accredited investors, all of whom are listed below as selling security holders. In addition, a total of 181,657 shares of common stock that were issued upon conversion of promissory notes made in June 2017 and held by three accredited investors are available to be resold by those investors who are also included in the table below as selling security holders.

The table below presents information regarding the selling security holders and the common stock and warrants that they may sell or otherwise dispose of from time to time under this prospectus. The table is based on information supplied to us by the selling security holders and reflects holdings as of June 30, 2018. Percentages of beneficial ownership are based upon 5,225,775 shares of common stock outstanding as of June 30, 2018. Beneficial ownership is determined under Section 13(d) of the Exchange Act and generally includes voting or investment power with respect to securities and includes any securities that grant the selling security holders the right to acquire common stock within 60 days of June 30, 2018 (August 29, 2018). Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to the common stock, subject to community property laws where applicable.

The selling security holders or their successors, donees, pledgees, assignees and permitted transferees that receive the warrants or common stock, as applicable, may sell up to all of the common stock and warrants shown in the table below under the heading “Total Shares Offered” and “Total Warrants Offered” pursuant to this prospectus in one or more transactions from time to time as described below under “Plan of Distribution.”

We do not know when or in what amounts, if any, the selling security holders may sell or otherwise dispose of the securities covered hereby. We currently have no agreements, arrangements or understandings with the selling security holders regarding the sale of any of the common stock or warrants by them. The selling security holders might not sell any or all of the common stock or warrants covered by this prospectus or may sell or dispose of some or all of these securities other than pursuant to this prospectus. Because the selling security holders may sell or otherwise dispose of some or all of the securities covered by this prospectus and because there are currently no agreements, arrangements or understandings with respect to the sale or other disposition of any of the securities, we cannot estimate the number of the common stock or warrants that will be held by the selling security holders after completion of the offering.

Each selling security holder has indicated to us that neither it, nor any of its affiliates, has held any position or office or had any other material relationship with us in the past three years except as described in the footnotes to the table.

The common stock and warrants being offered under this prospectus may be offered for sale from time to time during the period the registration statement of which this prospectus is a part remains effective, by or for the accounts of the selling security holders named below.

Information about the selling security holders may change from time to time. Any changed information with respect to which we are given notice will be included in prospectus supplement.