Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 15, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-38182 | |
Entity Registrant Name | EASTSIDE DISTILLING, INC. | |
Entity Central Index Key | 0001534708 | |
Entity Tax Identification Number | 20-3937596 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 8911 NE Marx Dr | |
Entity Address, Address Line Two | Suite A2 | |
Entity Address, City or Town | Portland | |
Entity Address, State or Province | OR | |
Entity Address, Postal Zip Code | 97220 | |
City Area Code | (971) | |
Local Phone Number | 888-4264 | |
Trading Symbol | EAST | |
Security Exchange Name | NASDAQ | |
Title of 12(g) Security | Common Stock, $0.0001 par value | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,525,811 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 2,770 | $ 836 |
Trade receivables, net | 1,338 | 694 |
Inventories | 6,058 | 6,728 |
Prepaid expenses and current assets | 1,897 | 750 |
Current assets held for sale | 3,833 | |
Total current assets | 12,063 | 12,841 |
Property and equipment, net | 2,455 | 3,109 |
Right-of-use assets | 881 | 1,270 |
Intangible assets, net | 13,728 | 14,038 |
Other assets, net | 239 | 285 |
Non-current assets held for sale | 74 | 189 |
Total Assets | 29,440 | 31,732 |
Current liabilities: | ||
Accounts payable | 1,399 | 1,864 |
Accrued liabilities | 922 | 1,452 |
Deferred revenue | 23 | |
Current portion of secured credit facilities, net of debt issuance costs | 2,977 | 6,405 |
Deferred consideration for Azuñia acquisition | 15,452 | |
Other current liabilities, related party | 700 | |
Current portion of notes payable | 918 | 3,830 |
Current portion of lease liabilities | 332 | 515 |
Current liabilities held for sale | 20 | 18 |
Total current liabilities | 6,568 | 30,259 |
Lease liabilities, net of current portion | 583 | 817 |
Secured credit facilities, net of debt issuance costs | 2,722 | |
Notes payable, related parties | 6,963 | |
Notes payable, net of current portion | 1,256 | 1,693 |
Non-current liabilities held for sale | 46 | 71 |
Total liabilities | 18,138 | 32,840 |
Commitments and contingencies (Note 13) | ||
Stockholders’ equity (deficit): | ||
Common stock, $0.0001 par value; 35,000,000 and 15,000,000 shares authorized; 14,087,028 and 10,382,015 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 1 | 1 |
Additional paid-in capital | 67,653 | 52,985 |
Accumulated deficit | (56,352) | (54,094) |
Total Stockholders’ Equity (Deficit) | 11,302 | (1,108) |
Total Liabilities and Stockholders’ Equity (Deficit) | $ 29,440 | $ 31,732 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 35,000,000 | 15,000,000 |
Common stock, shares issued | 14,087,028 | 10,382,015 |
Common stock, shares outstanding | 14,087,028 | 10,382,015 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Sales | $ 3,277 | $ 4,275 | $ 10,138 | $ 11,242 |
Less customer programs and excise taxes | 114 | 257 | 525 | 673 |
Net sales | 3,163 | 4,018 | 9,613 | 10,569 |
Cost of sales | 2,017 | 2,614 | 6,575 | 7,019 |
Gross profit | 1,146 | 1,404 | 3,038 | 3,550 |
Operating expenses: | ||||
Sales and marketing expenses | 489 | 806 | 1,900 | 3,289 |
General and administrative expenses | 1,801 | 2,346 | 5,913 | 6,789 |
(Gain) loss on disposal of property and equipment | 360 | (112) | 421 | (131) |
Total operating expenses | 2,650 | 3,040 | 8,234 | 9,947 |
Loss from operations | (1,504) | (1,636) | (5,196) | (6,397) |
Other income (expense), net | ||||
Interest expense | (414) | (252) | (885) | (875) |
Other income | 25 | 37 | 2,242 | 37 |
Total other income (expense), net | (389) | (215) | 1,357 | (838) |
Loss before income taxes | (1,893) | (1,851) | (3,839) | (7,235) |
Provision for income taxes | ||||
Net loss from continuing operations | (1,893) | (1,851) | (3,839) | (7,235) |
Net income (loss) from discontinued operations | (17) | 84 | 3,869 | (227) |
Net income (loss) | (1,910) | (1,767) | 30 | (7,462) |
Deemed dividend-warrant price protection-revaluation adjustment | (2,288) | (2,288) | ||
Net loss attributable to common shareholders | $ (4,198) | $ (1,767) | $ (2,258) | $ (7,462) |
Basic net loss per common share | $ (0.32) | $ (0.17) | $ (0.19) | $ (0.75) |
Basic weighted average common shares outstanding | 13,055 | 10,104 | 12,145 | 9,947 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ 30 | $ (7,462) |
Net (income) loss from discontinued operations | (3,869) | 227 |
Adjustments to reconcile net income (loss) to net cash used in operating activities | ||
Depreciation and amortization | 903 | 1,858 |
Bad debt expense | 1 | 69 |
Forgiveness of debt - Paycheck Protection Program | (1,448) | |
(Gain) loss on disposal of assets | 421 | (131) |
Inventory allowance | 250 | |
Remeasurement of deferred consideration | (750) | |
Amortization of debt issuance costs | 222 | 226 |
Interest accrued to secured credit facilities | 91 | |
Issuance of common stock in exchange for services for related parties | 131 | 468 |
Issuance of common stock in exchange for services for third parties | 263 | 234 |
Stock-based compensation | 25 | 243 |
Changes in operating assets and liabilities: | ||
Trade receivables, net | (644) | (57) |
Inventories | 669 | 1,756 |
Prepaid expenses and other assets | (1,565) | 88 |
Right-of-use assets | 362 | 370 |
Accounts payable | (467) | (1,376) |
Accrued liabilities | (531) | 835 |
Other liabilities, related party | (700) | 250 |
Deferred revenue | (23) | 316 |
Net lease liabilities | (390) | (427) |
Net cash used in operating activities | (7,269) | (2,263) |
Net cash provided by (used in) operating activities of discontinued operations | 4,617 | (592) |
Net cash used in operating activities | (2,652) | (2,855) |
Cash Flows From Investing Activities: | ||
Proceeds from sale of fixed assets | 110 | 621 |
Purchases of property and equipment | (189) | (414) |
Net cash provided by (used in) investing activities of continuing operations | (79) | 207 |
Net cash provided by investing activities of discontinued operations | 3,362 | 28 |
Net cash provided by investing activities | 3,283 | 235 |
Cash Flows From Financing Activities: | ||
Issuance of common stock from warrant exercise for cash, net of expenses | 2,375 | |
Proceeds from issuance of common stock | 2,009 | |
Proceeds from secured credit facilities | 3,300 | 6,337 |
Proceeds from notes payable | 1,538 | |
Payments of principal on secured credit facilities | (3,601) | |
Payments of principal on notes payable | (2,780) | (4,639) |
Net cash provided by financing activities of continuing operations | 1,303 | 3,236 |
Net cash provided by financing activities | 1,303 | 3,236 |
Net increase in cash | 1,934 | 616 |
Cash at the beginning of the period | 836 | 343 |
Cash at the end of the period | 2,770 | 959 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid during the period for interest | 654 | 636 |
Cash paid for amounts included in measurement of lease liabilities | 540 | 519 |
Supplemental Disclosure of Non-Cash Financing Activity | ||
Issuance of common stock pursuant to Azuñia earn-out | 6,860 | |
Issuance of notes payable pursuant to Azuñia final earn-out | 7,842 | |
Warrants issued in relation to secured credit facilities | 717 | 98 |
Deemed dividend - warrant price protection-revaluation adjustment | 2,288 | |
Right-of-use assets obtained in exchange for lease obligations | $ 1,153 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business Eastside Distilling (the “Company” or “Eastside Distilling”) was incorporated under the laws of Nevada in 2004 under the name of Eurocan Holdings, Ltd. In December 2014, the Company changed its corporate name to Eastside Distilling, Inc. to reflect the acquisition of Eastside Distilling, LLC. The Company manufactures, acquires, blends, bottles, imports, exports, markets and sells a wide variety of alcoholic beverages under recognized brands. The Company currently employs 70 people in the United States. The Company’s brands span several alcoholic beverage categories, including whiskey, vodka, gin, rum, tequila and Ready-to-Drink (“RTD”). The Company sells products on a wholesale basis to distributors in open states, and brokers in control states, and until March 2020, operated four retail tasting rooms in Portland, Oregon to market our brands directly to consumers. The Company operates a mobile craft canning and bottling business (“Craft Canning”) that primarily services the craft beer and craft cider industries. Craft Canning operates 14 mobile lines in Seattle, Portland and Denver. |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2021 | |
Liquidity | |
Liquidity | 2. Liquidity The Company’s primary capital requirements are for cash used in operating activities and the repayment of debt. Funds for the Company’s cash and liquidity needs have historically not been generated from operations but rather from short-term credit in the form of extended payment terms from suppliers as well as from convertible debt and equity financings. The Company has been dependent on raising capital from debt and equity financings to meet the Company’s operating needs. As of September 30, 2021, the Company had $ 2.8 5.5 22.9 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation and Consolidation The accompanying unaudited consolidated financial statements for Eastside Distilling, Inc. and subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements in accordance with GAAP have been condensed or eliminated as permitted under the SEC’s rules and regulations. In management’s opinion, the unaudited consolidated financial statements include all material adjustments, all of which are of a normal and recurring nature, necessary to present fairly the Company’s financial position as of September 30, 2021, its operating results for the three and nine months ended September 30, 2021 and 2020 and its cash flows for the nine months ended September 30, 2021 and 2020. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Interim results are not necessarily indicative of the results that may be expected for an entire fiscal year). The consolidated financial statements include the accounts of Eastside Distilling, Inc.’s wholly-owned subsidiaries, including, MotherLode LLC, Redneck Riviera Whiskey Co., LLC, and Craft Canning + Bottling, LLC and the Azuñia tequila assets. All intercompany balances and transactions have been eliminated on consolidation. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue Recognition Net sales include product sales, less excise taxes and customer programs and incentives. The Company recognizes revenue by applying the following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers The Company recognizes sales when merchandise is shipped from a warehouse directly to wholesale customers (except in the case of a consignment sale). For consignment sales, which include sales to the Oregon Liquor Control Commission, the Company recognizes sales upon the consignee’s shipment to the customer. Postage and handling charges billed to customers are also recognized as sales upon shipment of the related merchandise. Shipping terms are generally FOB shipping point, and title passes to the customer at the time and place of shipment or purchase by customers at a retail location. For consignment sales, title passes to the consignee concurrent with the consignee’s shipment to the customer. The customer has no cancellation privileges after shipment or upon purchase at retail locations, other than customary rights of return. The Company excludes sales tax collected and remitted to various states from sales and cost of sales. Customer Programs Customer programs, which include customer promotional discount programs, customer incentives, and broker commissions, are a common practice in the alcoholic beverage industry. The Company makes these payments to customers and incurs these costs to promote sales of products and to maintain competitive pricing. Amounts paid in connection with customer programs and incentives are recorded as reductions to net sales or as sales and marketing expenses in accordance with ASC 606 - Revenue from Contracts with Customers, 0.4 0.5 Excise Taxes The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) regulations, which includes making timely and accurate excise tax payments. The Company is subject to periodic compliance audits by the TTB. Individual states also impose excise taxes on alcoholic beverages in varying amounts. The Company calculates its excise tax expense based upon units produced and on its understanding of the applicable excise tax laws. Excise taxes totaled $ 0.1 0.2 Cost of Sales Cost of sales consists of the costs of ingredients utilized in the production of spirits, manufacturing labor and overhead, warehousing rent, packaging, and in-bound freight charges. Ingredients account for the largest portion of the cost of sales, followed by packaging and production costs. Sales and Marketing Expenses The following expenses are included in sales and marketing expenses in the accompanying consolidated statements of operations: media advertising costs, promotional costs of value-added packaging, salary and benefit expenses, travel and entertainment expenses for the sales, brand and sales support workforce and promotional activity expenses. Sales and marketing costs are expensed as incurred. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) General and Administrative Expenses The following expenses are included in general and administrative expenses in the accompanying consolidated statements of operations: salary and benefit expenses, travel and entertainment expenses for executive and administrative staff, rent and utilities, professional fees, insurance, and amortization and depreciation expense. General and administrative costs are expensed as incurred. Stock-Based Compensation The Company recognizes as compensation expense all stock-based awards issued to employees. The compensation cost is measured based on the grant-date fair value of the related stock-based awards and is recognized over the service period of stock-based awards, which is generally the same as the vesting period. The fair value of stock options is determined using the Black-Scholes valuation model, which estimates the fair value of each award on the date of grant based on a variety of assumptions including expected stock price volatility, expected terms of the awards, risk-free interest rate, and dividend rates, if applicable. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and are subject to periodic market adjustments at the end of each reporting period and as the underlying stock-based awards vest. Stock-based compensation was $ 0 0.9 Cash and Cash Equivalents Cash equivalents are considered to be highly liquid investments with maturities of three months or less at the time of the purchase. The Company had no Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade receivables. As of September 30, 2021, two wholesale customers represented 27 14 24 18 Fair Value Measurements GAAP defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements. GAAP permits an entity to choose to measure many financial instruments and certain other items at fair value and contains financial statement presentation and disclosure requirements for assets and liabilities for which the fair value option is elected. As of September 30, 2021 and December 31, 2020, management has not elected to report any of the Company’s assets or liabilities at fair value under the “fair value option” provided by GAAP. The hierarchy of fair value valuation techniques under GAAP provides for three levels: Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing assets and liabilities under GAAP’s fair value measurement requirements are as follows: Level 1: Fair value of the asset or liability is determined using cash or unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Fair value of the asset or liability is determined using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Fair value of the asset or liability is determined using unobservable inputs that are significant to the fair value measurement and reflect management’s own assumptions regarding the applicable asset or liability. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) None of the Company’s assets or liabilities were measured at fair value as of September 30, 2021 or December 31, 2020. However, GAAP requires the disclosure of fair value information about financial instruments that are not measured at fair value. Financial instruments consist principally of trade receivables, accounts payable, accrued liabilities, notes payable, and the secured credit facilities. The estimated fair value of trade receivables, accounts payable, and accrued liabilities approximate their carrying value due to the short period of time to their maturities. As of September 30, 2021 and December 31, 2020, the Company’s notes approximate fair value. Items Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities acquired in a business acquisition are valued at fair value at the date of acquisition. Inventories Inventories primarily consist of bulk and bottled liquor and merchandise and are stated at the lower of cost or market. Cost is determined using an average costing methodology, which approximates cost under the first-in, first-out (FIFO) method. A portion of the Company’s finished goods inventory is held by certain independent distributors on consignment until it is sold to a third party. The Company regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand and production requirements. Such write-downs establish a new cost basis of accounting for the related inventory. Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years. Amortization of leasehold improvements is computed using the straight-line method over the life of the lease or the useful lives of the assets, whichever is shorter. The cost and related accumulated depreciation and amortization of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is reported as current period income or expense. The costs of repairs and maintenance are expensed as incurred. Intangible Assets / Goodwill The Company accounts for certain intangible assets at cost. Management reviews these intangible assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount, an impairment loss would be recognized to write down the asset to its estimated fair value. The Company performed a qualitative assessment of certain of its intangible assets as of September 30, 2021 and determined that they were not impaired. Long-lived Assets The Company accounts for long-lived assets, including certain intangible assets, at amortized cost. Management reviews long-lived assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount of the asset, an impairment loss would be recognized to write down the asset to its estimated fair value. The Company performed a qualitative assessment of certain of its long-lived assets as of September 30, 2021 and determined that they were not impaired. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) Income Taxes The provision for income taxes is based on income and expenses as reported for financial statement purposes using the “asset and liability method” for accounting for deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. As of September 30, 2021 and December 31, 2020, the Company established valuation allowances against its net deferred tax assets. Income tax positions that meet the “more-likely-than-not” recognition threshold are measured at the largest amount of income tax benefit that is more than 50% no The Company files federal income tax returns in the United States. and various state income tax returns. The Company is no longer subject to examinations by the related tax authorities for the Company’s U.S. federal and state income tax returns for years prior to 2014. Comprehensive Income The Company did no Accounts Receivable Factoring Program The Company has entered into two accounts receivable factoring programs. One for its spirits customers (the “spirits program”) and another for its co-packing customers (the “co-packing program”). Under the programs, the Company has the option to sell certain customer account receivables in advance of payment for 75 0.5 5 Transfers and Servicing 1.7 0 0.1 Recently Adopted Accounting Pronouncements In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 4. Discontinued Operations Discontinued Operations The Company reports discontinued operations by applying the following criteria in accordance with ASC Topic 205-20 – Presentation of Financial Statements – Discontinued Operations On December 31, 2019, management made a strategic shift to focus the Company’s sales and marketing efforts on the nationally branded product platform, resulting in the decision to close all four of its retail stores in the Portland, Oregon area. The retail stores were closed or abandoned by March 31, 2020. On February 2, 2021, Redneck Riviera Whiskey Co, LLC (“RRWC”) entered into a Termination and Inventory Purchase Agreement (the “Termination Agreement”) with Rich Marks, LLC, John D. Rich Tisa Trust and Redneck Spirits Group, LLC (collectively the buyers referred to as “RSG”), pursuant to which, on February 5, 2021, RRWC sold all of its inventory of Redneck Riviera, Granny Rich, and Howdy Dew distilled spirits products, including finished goods, raw materials, and barrel inventory, as well as all assignable certificates of label approval/exemption, branding, permits, and registrations relating thereto, for $ 4.7 3.0 As of and for the nine months ended September 30, 2021, the assets, liabilities, revenue, expenses and cash flows from retail operations and the RRWC business have been classified as discontinued operations separately from continuing operations. For comparative purposes, prior period amounts have been reclassified to conform to current period presentation. Income and expense related to discontinued retail operations and the Redneck Riviera Spirits business were as follows for the nine months ended September 30, 2021 and 2020: Schedule of Discontinued Retail Operations (Dollars in thousands) 2021 2020 Sales $ 283 $ 1,768 Less customer programs and excise taxes 31 340 Net sales 252 1,428 Cost of sales 168 901 Gross profit 84 527 Operating expenses: Sales and marketing expenses 22 447 General and administrative expenses 32 231 Loss on disposal of property and equipment - 76 Total operating expenses 54 754 Income (loss) from operations 30 (227 ) Other income, net Other income 989 - Gain on termination of license agreement 2,850 - Total other expense, net 3,839 - Net income (loss) $ 3,869 $ (227 ) Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) Assets and liabilities related to discontinued retail operations and the Redneck Riviera Spirits business were as follows: (Dollars in thousands) September 30, 2021 December 31, 2020 Assets Current assets: Inventories $ - $ 3,833 Total current assets - 3,833 Right-of-use assets 74 96 Other assets - 93 Total Assets $ 74 $ 4,022 Liabilities Current liabilities: Accounts payable $ (13 ) $ (13 ) Current portion of lease liability 33 31 Total current liabilities 20 18 Lease liability - less current portion 46 71 Total Liabilities $ 66 $ 89 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventories consisted of the following: Schedule of Inventories (Dollars in thousands) September 30, 2021 December 31, 2020 Raw materials $ 5,022 $ 5,455 Finished goods 1,036 1,273 Total inventories $ 6,058 $ 6,728 |
Prepaid Expenses and Current As
Prepaid Expenses and Current Assets | 9 Months Ended |
Sep. 30, 2021 | |
Prepaid Expenses And Current Assets | |
Prepaid Expenses and Current Assets | 6. Prepaid Expenses and Current Assets Prepaid expenses and current assets consisted of the following: Schedule of Prepaid expenses and current assets (Dollars in thousands) September 30, 2021 December 31, 2020 Prepayment of fixed assets $ 1,294 $ 295 Prepayment of inventory 415 73 Other 188 382 Total prepaid expenses and current assets $ 1,897 $ 750 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 7. Property and Equipment Property and equipment consisted of the following: Schedule of Property and Equipment (Dollars in thousands) September 30, 2021 December 31, 2020 Furniture and fixtures $ 3,909 $ 4,363 Leasehold improvements 1,637 1,637 Vehicles 824 824 Total cost 6,370 6,824 Less accumulated depreciation (3,915 ) (3,715 ) Total property and equipment, net $ 2,455 $ 3,109 Purchases of property and equipment totaled $ 0.2 0.4 0.6 1.4 During the nine months ended September 30, 2021, the Company disposed of fixed assets with a net book value of $ 0.5 0.4 0.1 0.1 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 8. Intangible Assets Intangible assets consisted of the following: Schedule of Intangible Assets (Dollars in thousands) September 30, 2021 December 31, 2020 Permits and licenses $ 25 $ 25 Azuñia brand 11,945 11,945 Customer lists 2,895 2,895 Total intangible assets 14,865 14,865 Less accumulated amortization (1,137 ) (827 ) Intangible assets, net $ 13,728 $ 14,038 The customer list is being amortized over a seven-year life. Amortization expense totaled $ 0.3 0.4 The permits and licenses, and Azuñia brand have all been determined to have an indefinite life and will not be amortized. We do, however, on an annual basis, test the indefinite life assets for impairment. If an indefinite life asset is found to be impaired, then the Company will estimate its useful life and amortize the asset over the remainder of its useful life. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | 9. Other Assets Other assets consisted of the following: Schedule of Other Assets (Dollars in thousands) September 30, 2021 December 31, 2020 Product branding $ 400 $ 400 Deposits 54 57 Total other assets 454 457 Less accumulated amortization (215 ) (172 ) Other assets, net $ 239 $ 285 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) As of September 30, 2021, the Company had $ 0.4 Amortization expense totaled $ 0 0.1 The deposits represent office lease deposits. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Leases | 10. Leases The Company has various lease agreements in place for facilities and equipment. Terms of these leases include, in some instances, scheduled rent increases, renewals, purchase options and maintenance costs, and vary by lease. These lease obligations expire at various dates through 2025 0.9 0.6 0.4 0.2 Maturities of lease liabilities as of September 30, 2021 were as follows: Schedule of Maturities of Operating Lease Liabilities (Dollars in thousands) Operating Leases Weighted-Average Remaining Term in Years 2021 $ 112 2022 362 2023 274 2024 144 2025 124 Thereafter - Total lease payments 1,016 Less imputed interest (based on 6.7 (101 ) Present value of lease liability $ 915 3.0 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | 11. Notes Payable Notes payable consisted of the following: Schedule of Notes Payable (Dollars in thousands) September 30, 2021 December 31, 2020 Total notes payable 2,174 5,523 Notes payable bearing interest at 5.00 due May 1, 2021 $ - $ 2,300 Note payable bearing interest at 1.00 - 1,052 Note payable bearing interest at 1.00 due May 1, 2022 - 396 Notes payable bearing interest at 5.00 123 370 Promissory note payable bearing interest of 5.2 The note has a 46 92 129 Promissory note payable bearing interest of 4.45 The note has a 34 The note is secured by the assets of Craft Canning and includes debt covenants requiring a Current Ratio of 1.75 to 1.00 and a Debt Service Coverage Ratio of 1.25 to 1.00 83 163 Promissory note payable under a revolving line of credit bearing variable interest starting at 3.25 The note has a 15 0.5 500 500 Promissory note payable bearing interest of 4.14 The note has a 60 118 146 Promissory note payable bearing interest of 3.91 The note has a 60 182 226 Promissory note payable bearing interest of 3.96 The note has a 60 197 241 Promissory notes payable bearing interest of 6.0 The notes have a 36 879 - Total notes payable 2,174 5,523 Less current portion (918 ) (3,830 ) Long-term portion of notes payable $ 1,256 $ 1,693 The Company paid $ 0.5 0.2 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) Maturities on notes payable as of September 30, 2021 were as follows: Schedule of Maturities on Notes Payable (Dollars in thousands) 2021 $ 79 2022 893 2023 1,073 2024 129 2025 - Thereafter - Total $ 2,174 |
Secured Credit Facilities
Secured Credit Facilities | 9 Months Ended |
Sep. 30, 2021 | |
Secured Credit Facilities | |
Secured Credit Facilities | 12. Secured Credit Facilities 6% Secured Convertible Promissory Notes On April 19, 2021, the Company entered into a securities purchase agreement (“Purchase Agreement”) with accredited investors (“Subscribers”) for their purchase of up to $ 3.3 6 0.0001 2.20 60 2.60 3.3 Roth Capital, LLC acted as placement agent in the private offering, and the Company paid the Placement Agent a cash fee of five percent ( 5 3.1 Interest on the Notes accrues at a rate of 6 October 18, 2022 0 All amounts due under the Notes are convertible at any time after the issuance date, in whole or in part (subject to rounding for fractional shares), at the option of the holders into the Company’s common stock at a fixed conversion price, which is subject to adjustment as summarized below. The Notes are initially convertible into the Company’s common stock at an initial fixed conversion price of $ 2.20 The Company may prepay the Notes at any time in whole or in part by paying a sum of money equal to 100 The Notes contain customary triggering events including but not limited to: (i) failure to make payments when due under the Notes; and (ii) bankruptcy or insolvency of the Company. If a triggering event occurs, each holder may require the Company to redeem all or any portion of the Notes (including all accrued and unpaid interest thereon), in cash. The Notes are secured by a subordinated security interest in the Company’s assets pursuant to the terms of a Security Agreement entered into between the Company and the Subscribers. On July 30, 2021, the Company entered into warrant exercise inducement offer letters (“Inducement Letters”) with the holders of the Existing Warrants to exercise for cash their Existing Warrants. The Company received gross proceeds of $ 2.4 2.3 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) Live Oak Loan Agreement On January 15, 2020, the Company and its subsidiaries entered into a loan agreement (the “Loan Agreement”) between the Company and Live Oak Banking Company (“Live Oak”), a North Carolina banking corporation (the “Lender”) to refinance existing debt of the Borrowers and to provide funding for general working capital purposes. Under the Loan Agreement, the Lender has committed to make up to two loan advances to the Borrowers in an aggregate principal amount not to exceed the lesser of (i) $ 8.0 The Loan matured on January 14, 2021 and all amounts outstanding under the Loan became due and payable. On January 8, 2021, the Company entered into an amendment to the Loan Agreement with Live Oak to extend the maturity date to April 13, 2021. On April 13, 2021, the maturity date was amended to further extend it to May 13, 2021. On May 11, 2021, the maturity date was further extended to August 11, 2021. On August 11, 2021, the maturity date was further extended to October 11, 2021. On October 11, 2021, the maturity date was further extended to November 11, 2021 The Loan bears interest at a rate equal to the prime rate plus a spread of 2.49 0.1 3.4 3.0 The Loan Agreement contains affirmative and negative covenants that include covenants restricting each Company’s ability to, among other things, incur indebtedness, grant liens, dispose of assets, merge or consolidate, make investments, or enter into restrictive agreements, subject to certain exceptions. The obligations of the Company under the Loan Agreement are secured by substantially all of its spirits respective assets, except for accounts receivable and certain other specified excluded property. The Loan Agreement includes customary events of default that include among other things, non-payment defaults, covenant defaults, inaccuracy of representations and warranties, cross default to material indebtedness, bankruptcy and insolvency defaults and change in control defaults. Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default under the Loan Agreement at a per annum rate equal to 2.00 In connection with the Loan Agreement, the Company issued to the Lender a warrant to purchase up to 100,000 3.94 January 15, 2025 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Legal Matters On December 15, 2020, Grover Wickersham filed a complaint in the United States District Court for the District Court of Oregon against the Company. Mr. Wickersham, the former CEO and Chairman of the Board of the Company, has asserted causes of action for fraud in the inducement, breach of contract, breach of the implied covenant of good faith and fair dealing, defamation, interference with economic advantage, elder financial abuse, and dissemination of false and misleading proxy materials. The Company disputes the allegations and intends to defend the case vigorously. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) The Company is not currently subject to any other material legal proceedings; however, it could be subject to legal proceedings and claims from time to time in the ordinary course of its business, or legal proceedings it considered immaterial may in the future become material. Regardless of the outcome, litigation can, among other things, be time consuming and expensive to resolve, and can divert management resources. |
Net Income (Loss) per Common Sh
Net Income (Loss) per Common Share | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Common Share | 14. Net Income (Loss) per Common Share Basic income (loss) per common share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period, without considering any dilutive items. Diluted net income per common share is computed by dividing net income by the sum of the weighted average number of common shares outstanding and the potential number of any dilutive common shares outstanding during the period. Potentially dilutive securities consist of the incremental common stock issuable upon exercise of stock options and convertible notes. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As of September 30, 2021, the Company had 2,711,364 no |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | 15. Stockholders’ Equity Schedule of Stockholders’ Equity Shares Amount Capital Deficit (Deficit) Common Stock Paid-in Accumulated Total Stockholders’ Shares Amount Capital Deficit (Deficit) Balance, December 31, 2020 10,382 $ 1 $ 52,985 $ (54,094 ) $ (1,108 ) Stock-based compensation - - 25 - 25 Issuance of common stock from warrant exercise for cash, net of expenses 900 - 2,375 - 2,375 Issuance of warrants for secured credit facility - - 717 - 717 Issuance of common stock for Azuñia initial earn-out 1,883 - 6,860 - 6,860 Issuance of common stock for services by third parties 141 - 263 - 263 Issuance of common stock for services by employees 63 - 131 - 131 Issuance of common stock, sold for cash, net 718 - 2,009 - 2,009 Deemed dividend-warrant price protection-revaluation adjustment - - 2,288 (2,288 ) - Net income - - - 30 30 Balance, September 30, 2021 14,087 $ 1 $ 67,653 $ (56,352 ) $ 11,302 Issuance of Common Stock During 2021, the Company issued 204,088 0.4 1.28 2.98 On February 10, 2021 and April 19, 2021, the Company issued 1.2 682,669 4.67 1.82 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) On July 30, 2021, the Company entered into Inducement Letters with the holders of the Existing Warrants to exercise their Existing Warrants and purchased 900,000 2.4 In September 2021, the Company sold 718,255 2.0 During 2020, the Company issued 706,987 1.0 1.08 3.20 Stock-Based Compensation On September 8, 2016, the Company adopted the 2016 Equity Incentive Plan (the “2016 Plan”). Pursuant to the terms of the plan, on January 1, 2021, the number of shares available for grant under the 2016 Plan reset to 3,747,583 8% 71,086 1,253,522 3 The Company also issues, from time to time, options that are not registered under a formal option plan. As of September 30, 2021, there were no options outstanding that were not issued under the Plans. A summary of all stock option activity as of and for the nine months ended September 30, 2021 is presented below: Summary of Stock Option Activity # of Options Weighted-Average Exercise Price Outstanding as of December 31, 2020 134,931 $ 4.71 Options granted 5,000 0.53 Options canceled (68,845 ) 5.31 Outstanding as of September 30, 2021 71,086 $ 3.34 Exercisable as of September 30, 2021 65,503 $ 3.21 The aggregate intrinsic value of options outstanding as of September 30, 2021 was $ 0 As of September 30, 2021, there were 5,583 0 0 13,667 The Company uses the Black-Scholes valuation model to measure the grant-date fair value of stock options. The grant-date fair value of stock options issued to employees is recognized on a straight-line basis over the requisite service period. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and are subject to periodic market adjustments as the underlying stock-based awards vest. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) To determine the fair value of stock options using the Black-Scholes valuation model, the calculation takes into consideration the effect of the following: ● Exercise price of the option ● Fair value of the Company’s common stock on the date of grant ● Expected term of the option ● Expected volatility over the expected term of the option ● Risk-free interest rate for the expected term of the option The calculation includes several assumptions that require management’s judgment. The expected term of the options is calculated using the simplified method described in GAAP. The simplified method defines the expected term as the average of the contractual term and the vesting period. Estimated volatility is derived from volatility calculated using historical closing prices of common shares of similar entities whose share prices are publicly available for the expected term of the options. The risk-free interest rate is based on the U.S. Treasury constant maturities in effect at the time of grant for the expected term of the options. The following weighted-average assumptions were used in the Black-Scholes valuation model for options granted during the nine months ended September 30, 2021: Schedule of Weighted-average Assumptions Used in Black-scholes Valuation Method Risk-free interest rate 1.69 % Expected term (in years) 5 Dividend yield - Expected volatility 75 % The weighted-average grant-date fair value per share of stock options granted during the year ended September 30, 2021 was $ 1.17 5,000 0 For the nine months ended September 30, 2021 and 2020, net compensation expense related to stock options was $ 0 0.2 0.1 0.8 On August 11, 2021, the Company’s annual compensation program for its board of directors was approved. Effective October 1, 2021, it now includes 1) annual board member fees of $ 0.05 0.02 0.01 0.02 Warrants From April 19, 2021 through May 12, 2021, Company issued in a private placement, Existing Warrants to purchase up to 900,000 shares of common stock at an exercise price of $ 2.60 per Warrant Share. The estimated fair value of the warrants of $ 0.7 0.2 On July 30, 2021, the Company entered into Inducement Letters with the holders of the Existing Warrants whereby such holders agreed to exercise for cash their Existing Warrants to purchase the 900,000 Warrant Shares in exchange for the Company’s agreement to issue new warrants (the “New Warrants”) to purchase up to 900,000 shares of common stock (the “New Warrant Shares”). The New Warrants have substantially the same terms as the Existing Warrants, except that the New Warrants have an exercise price of $ 3.00 per share, are exercisable until August 19, 2026. The Company received gross proceeds of $ 2.4 million on the exercise of the outstanding warrants, and recognized a deemed dividend of $ 2.3 million based on the Black Scholes valuation as a result of the higher strike price on the July 2021 issued warrants, which is included in the consolidated statements of operations as a deemed dividend - warrant price protection-revaluation adjustment and in additional paid-in capital in the consolidated balance sheets. During the year ended December 31, 2020, the Company issued a warrant to purchase an aggregate of 100,000 3.94 The estimated fair value of the Company’s outstanding warrants was based on a combination of closing market trading price on the date of issuance for the public offering warrants, and the Black-Scholes option-pricing model, using the weighted-average assumptions below: Schedule of Share Based Payment Award Assumptions Used in Black-scholes Valuation Method Volatility 75 % Risk-free interest rate 0.69 % Expected term (in years) 5 .0 Expected dividend yield - Fair value of common stock 3.88 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) A summary of activity in warrants was as follows: Summary of Warrant Activity Warrants Weighted-Average Remaining Life (Years) Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding as of December 31, 2020 240,278 3.2 $ 4.85 $ - Granted 1,800,000 4.8 2.29 - Exercised (900,000 ) - 2.60 - Outstanding as of September 30, 2021 1,140,278 4.2 $ 3.39 $ - |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 16. Related Party Transactions The following is a description of transactions since January 1, 2020 as to which the amount involved exceeds the lesser of $ 0.1 1% 0.3 On October 24, 2019, the Company’s Board appointed Stephanie Kilkenny to the Board to fill an existing vacancy on the Board effective immediately. Stephanie Kilkenny was the former managing director of Azuñia Tequila, and together with her spouse, owns and controls TQLA, LLC (“TQLA”), the majority owner of Intersect. In connection with the acquisition of Azuñia Tequila from Intersect, TQLA is entitled to receive up to 93.88% of the aggregate consideration payable under the Asset Purchase Agreement. 1.2 682,669 4.67 1.82 In addition, on September 16, 2019, the Company entered into a Subscription Agreement with Stephanie Kilkenny’s spouse, Patrick J. Kilkenny as Trustee For Patrick J. Kilkenny Revocable Trust (the “Kilkenny Trust”), in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder, pursuant to which the Company agreed to issue and sell to the Kilkenny Trust an aggregate of 55,555 4.50 0.5 5.50 On April 19, 2021, the Company issued $ 7.8 million in principal amount of promissory notes as the Earnout Consideration. The loans mature in full on April 1, 2024 and accrue interest at a rate of 6.0% annually. TQLA received a total of 598,223 shares of common stock and a promissory note in the principal amount of $ 6.9 million. Robert Grammen, a member of the Company’s Board and a member of Intersect, received a total of 22,027 shares of the Company’s common stock and a promissory note in the principal amount of $ 0.1 million. The notes have a 36 -month term with maturity in April 2024 . On February 5, 2021, the Company repaid other liabilities due to Intersect and TQLA in an amount of $ 0.7 The Company believes that the foregoing transactions were in its best interests. Consistent with Section 78.140 of the Nevada Revised Statutes, it is the Company’s current policy that all transactions between it and its officers, directors and their affiliates will be entered into only if such transactions are approved by a majority of the disinterested directors, are approved by vote of the stockholders, or are fair to the Company as a corporation as of the time it is authorized, approved or ratified by the Board. The Company will continue to conduct an appropriate review of all related party transactions and potential conflicts of interest on an ongoing basis. The Company’s audit committee has the authority and responsibility to review, approve and oversee any transaction between the Company and any related person and any other potential conflict of interest situation on an ongoing basis, in accordance with Company policies and procedures in effect from time to time. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events Debt extension The Company is finalizing an amendment to further extend the maturity date of its Loan Agreement with Live Oak. All other material terms of the Loan Agreement remain unchanged. Securities Purchase Agreement for Private Placement On October 19, 2021, Company entered into a securities purchase agreement (“Purchase Agreement”) with an accredited investor (“Subscriber”) for its purchase of 2.5 million shares (“Preferred Shares”) of Series B Convertible Preferred Stock (“Series B Preferred Stock”) at a purchase price of $ 1.00 per Preferred Share, which Preferred Shares are convertible into shares of the Company’s common stock pursuant to the terms and conditions set forth in a Certificate of Designation Establishing Series B Preferred Stock of the Company with an initial conversion price of $ 3.10 per share and 850,000 116,666 shares of common stock at an exercise price equal to $ 3.75 per share. The Company received $ 2.5 The Series B Preferred Stock accrues dividends at a rate of 6% 0.5 At-the-Market Public Placements During the period from September 20, 2021 to November 8, 2021, the Company sold 579,398 shares of common stock for net proceeds of $ 1.5 million in at-the-market public placements. Other On October 1, 2021, the Company issued 9,385 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying unaudited consolidated financial statements for Eastside Distilling, Inc. and subsidiaries were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements in accordance with GAAP have been condensed or eliminated as permitted under the SEC’s rules and regulations. In management’s opinion, the unaudited consolidated financial statements include all material adjustments, all of which are of a normal and recurring nature, necessary to present fairly the Company’s financial position as of September 30, 2021, its operating results for the three and nine months ended September 30, 2021 and 2020 and its cash flows for the nine months ended September 30, 2021 and 2020. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Interim results are not necessarily indicative of the results that may be expected for an entire fiscal year). The consolidated financial statements include the accounts of Eastside Distilling, Inc.’s wholly-owned subsidiaries, including, MotherLode LLC, Redneck Riviera Whiskey Co., LLC, and Craft Canning + Bottling, LLC and the Azuñia tequila assets. All intercompany balances and transactions have been eliminated on consolidation. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Revenue Recognition | Revenue Recognition Net sales include product sales, less excise taxes and customer programs and incentives. The Company recognizes revenue by applying the following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 – Revenue from Contracts with Customers The Company recognizes sales when merchandise is shipped from a warehouse directly to wholesale customers (except in the case of a consignment sale). For consignment sales, which include sales to the Oregon Liquor Control Commission, the Company recognizes sales upon the consignee’s shipment to the customer. Postage and handling charges billed to customers are also recognized as sales upon shipment of the related merchandise. Shipping terms are generally FOB shipping point, and title passes to the customer at the time and place of shipment or purchase by customers at a retail location. For consignment sales, title passes to the consignee concurrent with the consignee’s shipment to the customer. The customer has no cancellation privileges after shipment or upon purchase at retail locations, other than customary rights of return. The Company excludes sales tax collected and remitted to various states from sales and cost of sales. |
Customer Programs | Customer Programs Customer programs, which include customer promotional discount programs, customer incentives, and broker commissions, are a common practice in the alcoholic beverage industry. The Company makes these payments to customers and incurs these costs to promote sales of products and to maintain competitive pricing. Amounts paid in connection with customer programs and incentives are recorded as reductions to net sales or as sales and marketing expenses in accordance with ASC 606 - Revenue from Contracts with Customers, 0.4 0.5 |
Excise Taxes | Excise Taxes The Company is responsible for compliance with the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) regulations, which includes making timely and accurate excise tax payments. The Company is subject to periodic compliance audits by the TTB. Individual states also impose excise taxes on alcoholic beverages in varying amounts. The Company calculates its excise tax expense based upon units produced and on its understanding of the applicable excise tax laws. Excise taxes totaled $ 0.1 0.2 |
Cost of Sales | Cost of Sales Cost of sales consists of the costs of ingredients utilized in the production of spirits, manufacturing labor and overhead, warehousing rent, packaging, and in-bound freight charges. Ingredients account for the largest portion of the cost of sales, followed by packaging and production costs. |
Sales and Marketing Expenses | Sales and Marketing Expenses The following expenses are included in sales and marketing expenses in the accompanying consolidated statements of operations: media advertising costs, promotional costs of value-added packaging, salary and benefit expenses, travel and entertainment expenses for the sales, brand and sales support workforce and promotional activity expenses. Sales and marketing costs are expensed as incurred. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) |
General and Administrative Expenses | General and Administrative Expenses The following expenses are included in general and administrative expenses in the accompanying consolidated statements of operations: salary and benefit expenses, travel and entertainment expenses for executive and administrative staff, rent and utilities, professional fees, insurance, and amortization and depreciation expense. General and administrative costs are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes as compensation expense all stock-based awards issued to employees. The compensation cost is measured based on the grant-date fair value of the related stock-based awards and is recognized over the service period of stock-based awards, which is generally the same as the vesting period. The fair value of stock options is determined using the Black-Scholes valuation model, which estimates the fair value of each award on the date of grant based on a variety of assumptions including expected stock price volatility, expected terms of the awards, risk-free interest rate, and dividend rates, if applicable. Stock-based awards issued to nonemployees are recorded at fair value on the measurement date and are subject to periodic market adjustments at the end of each reporting period and as the underlying stock-based awards vest. Stock-based compensation was $ 0 0.9 |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents are considered to be highly liquid investments with maturities of three months or less at the time of the purchase. The Company had no |
Concentrations | Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade receivables. As of September 30, 2021, two wholesale customers represented 27 14 24 18 |
Fair Value Measurements | Fair Value Measurements GAAP defines fair value, establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements. GAAP permits an entity to choose to measure many financial instruments and certain other items at fair value and contains financial statement presentation and disclosure requirements for assets and liabilities for which the fair value option is elected. As of September 30, 2021 and December 31, 2020, management has not elected to report any of the Company’s assets or liabilities at fair value under the “fair value option” provided by GAAP. The hierarchy of fair value valuation techniques under GAAP provides for three levels: Level 1 provides the most reliable measure of fair value, whereas Level 3, if applicable, generally would require significant management judgment. The three levels for categorizing assets and liabilities under GAAP’s fair value measurement requirements are as follows: Level 1: Fair value of the asset or liability is determined using cash or unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Fair value of the asset or liability is determined using inputs other than quoted prices that are observable for the applicable asset or liability, either directly or indirectly, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Fair value of the asset or liability is determined using unobservable inputs that are significant to the fair value measurement and reflect management’s own assumptions regarding the applicable asset or liability. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) None of the Company’s assets or liabilities were measured at fair value as of September 30, 2021 or December 31, 2020. However, GAAP requires the disclosure of fair value information about financial instruments that are not measured at fair value. Financial instruments consist principally of trade receivables, accounts payable, accrued liabilities, notes payable, and the secured credit facilities. The estimated fair value of trade receivables, accounts payable, and accrued liabilities approximate their carrying value due to the short period of time to their maturities. As of September 30, 2021 and December 31, 2020, the Company’s notes approximate fair value. Items Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities acquired in a business acquisition are valued at fair value at the date of acquisition. |
Inventories | Inventories Inventories primarily consist of bulk and bottled liquor and merchandise and are stated at the lower of cost or market. Cost is determined using an average costing methodology, which approximates cost under the first-in, first-out (FIFO) method. A portion of the Company’s finished goods inventory is held by certain independent distributors on consignment until it is sold to a third party. The Company regularly monitors inventory quantities on hand and records write-downs for excess and obsolete inventories based primarily on the Company’s estimated forecast of product demand and production requirements. Such write-downs establish a new cost basis of accounting for the related inventory. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, ranging from three to seven years. Amortization of leasehold improvements is computed using the straight-line method over the life of the lease or the useful lives of the assets, whichever is shorter. The cost and related accumulated depreciation and amortization of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is reported as current period income or expense. The costs of repairs and maintenance are expensed as incurred. |
Intangible Assets / Goodwill | Intangible Assets / Goodwill The Company accounts for certain intangible assets at cost. Management reviews these intangible assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount, an impairment loss would be recognized to write down the asset to its estimated fair value. The Company performed a qualitative assessment of certain of its intangible assets as of September 30, 2021 and determined that they were not impaired. |
Long-lived Assets | Long-lived Assets The Company accounts for long-lived assets, including certain intangible assets, at amortized cost. Management reviews long-lived assets for probable impairment whenever events or circumstances indicate that the carrying amount of such assets may not be recoverable. If there is an indication of impairment, management would prepare an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these estimated cash flows were less than the carrying amount of the asset, an impairment loss would be recognized to write down the asset to its estimated fair value. The Company performed a qualitative assessment of certain of its long-lived assets as of September 30, 2021 and determined that they were not impaired. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2021 (Unaudited) |
Income Taxes | Income Taxes The provision for income taxes is based on income and expenses as reported for financial statement purposes using the “asset and liability method” for accounting for deferred taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are reflected at currently enacted income tax rates applicable to the period in which the deferred tax assets or liabilities are expected to be realized or settled. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. As of September 30, 2021 and December 31, 2020, the Company established valuation allowances against its net deferred tax assets. Income tax positions that meet the “more-likely-than-not” recognition threshold are measured at the largest amount of income tax benefit that is more than 50% no The Company files federal income tax returns in the United States. and various state income tax returns. The Company is no longer subject to examinations by the related tax authorities for the Company’s U.S. federal and state income tax returns for years prior to 2014. |
Comprehensive Income | Comprehensive Income The Company did no |
Accounts Receivable Factoring Program | Accounts Receivable Factoring Program The Company has entered into two accounts receivable factoring programs. One for its spirits customers (the “spirits program”) and another for its co-packing customers (the “co-packing program”). Under the programs, the Company has the option to sell certain customer account receivables in advance of payment for 75 0.5 5 Transfers and Servicing 1.7 0 0.1 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Retail Operations | Income and expense related to discontinued retail operations and the Redneck Riviera Spirits business were as follows for the nine months ended September 30, 2021 and 2020: Schedule of Discontinued Retail Operations (Dollars in thousands) 2021 2020 Sales $ 283 $ 1,768 Less customer programs and excise taxes 31 340 Net sales 252 1,428 Cost of sales 168 901 Gross profit 84 527 Operating expenses: Sales and marketing expenses 22 447 General and administrative expenses 32 231 Loss on disposal of property and equipment - 76 Total operating expenses 54 754 Income (loss) from operations 30 (227 ) Other income, net Other income 989 - Gain on termination of license agreement 2,850 - Total other expense, net 3,839 - Net income (loss) $ 3,869 $ (227 ) (Dollars in thousands) September 30, 2021 December 31, 2020 Assets Current assets: Inventories $ - $ 3,833 Total current assets - 3,833 Right-of-use assets 74 96 Other assets - 93 Total Assets $ 74 $ 4,022 Liabilities Current liabilities: Accounts payable $ (13 ) $ (13 ) Current portion of lease liability 33 31 Total current liabilities 20 18 Lease liability - less current portion 46 71 Total Liabilities $ 66 $ 89 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: Schedule of Inventories (Dollars in thousands) September 30, 2021 December 31, 2020 Raw materials $ 5,022 $ 5,455 Finished goods 1,036 1,273 Total inventories $ 6,058 $ 6,728 |
Prepaid Expenses and Current _2
Prepaid Expenses and Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Prepaid Expenses And Current Assets | |
Schedule of Prepaid expenses and current assets | Prepaid expenses and current assets consisted of the following: Schedule of Prepaid expenses and current assets (Dollars in thousands) September 30, 2021 December 31, 2020 Prepayment of fixed assets $ 1,294 $ 295 Prepayment of inventory 415 73 Other 188 382 Total prepaid expenses and current assets $ 1,897 $ 750 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Schedule of Property and Equipment (Dollars in thousands) September 30, 2021 December 31, 2020 Furniture and fixtures $ 3,909 $ 4,363 Leasehold improvements 1,637 1,637 Vehicles 824 824 Total cost 6,370 6,824 Less accumulated depreciation (3,915 ) (3,715 ) Total property and equipment, net $ 2,455 $ 3,109 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following: Schedule of Intangible Assets (Dollars in thousands) September 30, 2021 December 31, 2020 Permits and licenses $ 25 $ 25 Azuñia brand 11,945 11,945 Customer lists 2,895 2,895 Total intangible assets 14,865 14,865 Less accumulated amortization (1,137 ) (827 ) Intangible assets, net $ 13,728 $ 14,038 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | Other assets consisted of the following: Schedule of Other Assets (Dollars in thousands) September 30, 2021 December 31, 2020 Product branding $ 400 $ 400 Deposits 54 57 Total other assets 454 457 Less accumulated amortization (215 ) (172 ) Other assets, net $ 239 $ 285 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases | |
Schedule of Maturities of Operating Lease Liabilities | Maturities of lease liabilities as of September 30, 2021 were as follows: Schedule of Maturities of Operating Lease Liabilities (Dollars in thousands) Operating Leases Weighted-Average Remaining Term in Years 2021 $ 112 2022 362 2023 274 2024 144 2025 124 Thereafter - Total lease payments 1,016 Less imputed interest (based on 6.7 (101 ) Present value of lease liability $ 915 3.0 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consisted of the following: Schedule of Notes Payable (Dollars in thousands) September 30, 2021 December 31, 2020 Total notes payable 2,174 5,523 Notes payable bearing interest at 5.00 due May 1, 2021 $ - $ 2,300 Note payable bearing interest at 1.00 - 1,052 Note payable bearing interest at 1.00 due May 1, 2022 - 396 Notes payable bearing interest at 5.00 123 370 Promissory note payable bearing interest of 5.2 The note has a 46 92 129 Promissory note payable bearing interest of 4.45 The note has a 34 The note is secured by the assets of Craft Canning and includes debt covenants requiring a Current Ratio of 1.75 to 1.00 and a Debt Service Coverage Ratio of 1.25 to 1.00 83 163 Promissory note payable under a revolving line of credit bearing variable interest starting at 3.25 The note has a 15 0.5 500 500 Promissory note payable bearing interest of 4.14 The note has a 60 118 146 Promissory note payable bearing interest of 3.91 The note has a 60 182 226 Promissory note payable bearing interest of 3.96 The note has a 60 197 241 Promissory notes payable bearing interest of 6.0 The notes have a 36 879 - Total notes payable 2,174 5,523 Less current portion (918 ) (3,830 ) Long-term portion of notes payable $ 1,256 $ 1,693 |
Schedule of Maturities on Notes Payable | Maturities on notes payable as of September 30, 2021 were as follows: Schedule of Maturities on Notes Payable (Dollars in thousands) 2021 $ 79 2022 893 2023 1,073 2024 129 2025 - Thereafter - Total $ 2,174 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Schedule of Stockholders’ Equity | Schedule of Stockholders’ Equity Shares Amount Capital Deficit (Deficit) Common Stock Paid-in Accumulated Total Stockholders’ Shares Amount Capital Deficit (Deficit) Balance, December 31, 2020 10,382 $ 1 $ 52,985 $ (54,094 ) $ (1,108 ) Stock-based compensation - - 25 - 25 Issuance of common stock from warrant exercise for cash, net of expenses 900 - 2,375 - 2,375 Issuance of warrants for secured credit facility - - 717 - 717 Issuance of common stock for Azuñia initial earn-out 1,883 - 6,860 - 6,860 Issuance of common stock for services by third parties 141 - 263 - 263 Issuance of common stock for services by employees 63 - 131 - 131 Issuance of common stock, sold for cash, net 718 - 2,009 - 2,009 Deemed dividend-warrant price protection-revaluation adjustment - - 2,288 (2,288 ) - Net income - - - 30 30 Balance, September 30, 2021 14,087 $ 1 $ 67,653 $ (56,352 ) $ 11,302 |
Summary of Stock Option Activity | A summary of all stock option activity as of and for the nine months ended September 30, 2021 is presented below: Summary of Stock Option Activity # of Options Weighted-Average Exercise Price Outstanding as of December 31, 2020 134,931 $ 4.71 Options granted 5,000 0.53 Options canceled (68,845 ) 5.31 Outstanding as of September 30, 2021 71,086 $ 3.34 Exercisable as of September 30, 2021 65,503 $ 3.21 |
Schedule of Weighted-average Assumptions Used in Black-scholes Valuation Method | The following weighted-average assumptions were used in the Black-Scholes valuation model for options granted during the nine months ended September 30, 2021: Schedule of Weighted-average Assumptions Used in Black-scholes Valuation Method Risk-free interest rate 1.69 % Expected term (in years) 5 Dividend yield - Expected volatility 75 % |
Schedule of Share Based Payment Award Assumptions Used in Black-scholes Valuation Method | The estimated fair value of the Company’s outstanding warrants was based on a combination of closing market trading price on the date of issuance for the public offering warrants, and the Black-Scholes option-pricing model, using the weighted-average assumptions below: Schedule of Share Based Payment Award Assumptions Used in Black-scholes Valuation Method Volatility 75 % Risk-free interest rate 0.69 % Expected term (in years) 5 .0 Expected dividend yield - Fair value of common stock 3.88 |
Summary of Warrant Activity | A summary of activity in warrants was as follows: Summary of Warrant Activity Warrants Weighted-Average Remaining Life (Years) Weighted-Average Exercise Price Aggregate Intrinsic Value Outstanding as of December 31, 2020 240,278 3.2 $ 4.85 $ - Granted 1,800,000 4.8 2.29 - Exercised (900,000 ) - 2.60 - Outstanding as of September 30, 2021 1,140,278 4.2 $ 3.39 $ - |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Liquidity | ||
Cash and Cash Equivalents, at Carrying Value | $ 2,770 | $ 836 |
Working capital | 5,500 | |
Increase in working capital | $ 22,900 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Product Information [Line Items] | ||||||
Customer programs and incentives paid | $ 400,000 | $ 500,000 | ||||
Excise taxes | 100,000 | 200,000 | ||||
Stock-based compensation | 0 | 900,000 | ||||
Cash equivalents | $ 0 | $ 0 | $ 0 | $ 0 | ||
Income tax likelihood, description | more than 50% | |||||
Unrecognized income tax benefit, interest and penalties | 0 | 0 | $ 0 | $ 0 | 0 | |
Comprehensive income | 0 | $ 0 | $ 0 | $ 0 | ||
Payment of account receivables in advance percentage | 75.00% | |||||
Interest charged on advance payment amount | $ 500,000 | |||||
Interest charged on advance payment, rate | 5.00% | |||||
Factored invoices | $ 1,700,000 | |||||
Debt Instrument, Fee Amount | 0 | $ 0 | $ 0 | |||
Factored invoices outstanding | $ 100,000 | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Wholesale Customers [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration Risk, Percentage | 27.00% | |||||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Wholesale Customers [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration Risk, Percentage | 14.00% | |||||
Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | Two Wholesale Customers [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration Risk, Percentage | 24.00% | |||||
Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | One Wholesale Customers [Member] | ||||||
Product Information [Line Items] | ||||||
Concentration Risk, Percentage | 18.00% |
Schedule of Discontinued Retail
Schedule of Discontinued Retail Operations (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Sales | $ 283 | $ 1,768 | |
Less customer programs and excise taxes | 31 | 340 | |
Net sales | 252 | 1,428 | |
Cost of sales | 168 | 901 | |
Gross profit | 84 | 527 | |
Sales and marketing expenses | 22 | 447 | |
General and administrative expenses | 32 | 231 | |
Loss on disposal of property and equipment | 76 | ||
Total operating expenses | 54 | 754 | |
Income (loss) from operations | 30 | (227) | |
Other income | 989 | ||
Gain on termination of license agreement | 2,850 | ||
Total other expense, net | 3,839 | ||
Net income (loss) | 3,869 | $ (227) | |
Inventories | $ 3,833 | ||
Total current assets | 3,833 | ||
Right-of-use assets | 74 | 96 | |
Other assets | 93 | ||
Total Assets | 74 | 4,022 | |
Accounts payable | (13) | (13) | |
Current portion of lease liability | 33 | 31 | |
Total current liabilities | 20 | 18 | |
Lease liability - less current portion | 46 | 71 | |
Total Liabilities | $ 66 | $ 89 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) $ in Thousands | Feb. 02, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Sale of asset | $ 110 | $ 621 | |
Amended and Restated License Agreement [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
License term fee paid | $ 3,000 | ||
Discontinued Operations, Disposed of by Sale [Member] | Redneck Riviera Whiskey Co., LLC [Member] | Termination and Inventory Purchase Agreement [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Sale of asset | $ 4,700 |
Schedule of Inventories (Detail
Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 5,022 | $ 5,455 |
Finished goods | 1,036 | 1,273 |
Total inventories | $ 6,058 | $ 6,728 |
Schedule of Prepaid expenses an
Schedule of Prepaid expenses and current assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Prepaid Expenses And Current Assets | ||
Prepayment of fixed assets | $ 1,294 | $ 295 |
Prepayment of inventory | 415 | 73 |
Other | 188 | 382 |
Total prepaid expenses and current assets | $ 1,897 | $ 750 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 6,370 | $ 6,824 |
Total cost | (3,915) | (3,715) |
Total cost | 2,455 | 3,109 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 3,909 | 4,363 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 1,637 | 1,637 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 824 | $ 824 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Payments to Acquire Property, Plant, and Equipment | $ 189 | $ 414 |
Depreciation | 600 | 1,400 |
Net book value of fixed assets | 500 | |
Gain (loss) on disposal of fixed asset | 400 | 100 |
Proceeds from sale of fixed assets | $ 110 | $ 621 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 14,865 | $ 14,865 |
Total intangible assets | (1,137) | (827) |
Total intangible assets | 13,728 | 14,038 |
Permits and Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 25 | 25 |
Azunia Brand [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 11,945 | 11,945 |
Customer Lists [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 2,895 | $ 2,895 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization | $ 0.3 | $ 0.4 |
Schedule of Other Assets (Detai
Schedule of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||
Total other assets | $ 454 | $ 457 |
Less accumulated amortization | (215) | (172) |
Total other assets | 239 | 285 |
Product Branding [Member] | ||
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||
Total other assets | 400 | 400 |
Deposits [Member] | ||
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Line Items] | ||
Total other assets | $ 54 | $ 57 |
Other Assets (Details Narrative
Other Assets (Details Narrative) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Net value of service write down | $ 0.4 | |
Amortization expense | 0.3 | $ 0.4 |
Other Assets [Member] | ||
Amortization expense | $ 0 | $ 0.1 |
Schedule of Maturities of Opera
Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Leases | |
2021 | $ 112 |
2022 | 362 |
2023 | 274 |
2024 | 144 |
2025 | 124 |
Thereafter | |
Total lease payments | 1,016 |
Less imputed interest (based on 6.7% weighted-average discount rate) | (101) |
Present value of lease liability | $ 915 |
Operating lease weighted average remaining lease term | 3 years |
Schedule of Maturities of Ope_2
Schedule of Maturities of Operating Lease Liabilities (Details) (Parenthetical) | Sep. 30, 2021 |
Leases | |
Operating lease weighted average discount rate | 6.70% |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Leases | ||
Lease obligations expire, description | These lease obligations expire at various dates through 2025 | |
Operating lease, right-of-use asset | $ 881 | $ 1,270 |
Operating lease, liability | 915 | |
Lease, cost | 600 | |
Operating lease, cost | 400 | |
Short-term lease, cost | $ 200 |
Schedule of Notes Payable (Deta
Schedule of Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Short-term Debt [Line Items] | ||
Total notes payable | $ 2,174 | $ 5,523 |
Total notes payable | (918) | (3,830) |
Total notes payable | 1,256 | 1,693 |
Note Payable One [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 2,300 | |
Note Payable Two [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 1,052 | |
Note Payable Three [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 396 | |
Note Payable Four [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 123 | 370 |
Note Payable Five [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 92 | 129 |
Note Payable Six [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 83 | 163 |
Note Payable Seven [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 500 | 500 |
Note Payable Eight [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 118 | 146 |
Note Payable Nine [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 182 | 226 |
Note Payable Ten [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | 197 | 241 |
Note Payable Eleven [Member] | ||
Short-term Debt [Line Items] | ||
Total notes payable | $ 879 |
Schedule of Notes Payable (De_2
Schedule of Notes Payable (Details) (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Note Payable One [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 5.00% | 5.00% |
Debt instrument maturity date description | due May 1, 2021 | due May 1, 2021 |
Note Payable Two [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 1.00% | 1.00% |
Note Payable Three [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 1.00% | 1.00% |
Debt instrument maturity date description | due May 1, 2022 | due May 1, 2022 |
Note Payable Four [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 5.00% | 5.00% |
Note Payable Five [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 5.20% | 5.20% |
Debt instrument maturity date description | The note has a 46-month term with maturity in May 2023 | The note has a 46-month term with maturity in May 2023 |
Debt maturity term | 46 months | 46 months |
Note Payable Six [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 4.45% | 4.45% |
Debt instrument maturity date description | The note has a 34-month term with maturity in May 2022 | The note has a 34-month term with maturity in May 2022 |
Debt maturity term | 34 months | 34 months |
Debt instrument, covenants | The note is secured by the assets of Craft Canning and includes debt covenants requiring a Current Ratio of 1.75 to 1.00 and a Debt Service Coverage Ratio of 1.25 to 1.00 | The note is secured by the assets of Craft Canning and includes debt covenants requiring a Current Ratio of 1.75 to 1.00 and a Debt Service Coverage Ratio of 1.25 to 1.00 |
Debt service coverage | Debt Service Coverage Ratio of 1.25 to 1.00 | Debt Service Coverage Ratio of 1.25 to 1.00 |
Note Payable Seven [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 3.25% | 3.25% |
Debt instrument maturity date description | The note has a 15-month term with principal and accrued interest due in lump sum in January 2022 | The note has a 15-month term with principal and accrued interest due in lump sum in January 2022 |
Debt maturity term | 15 months | 15 months |
Revolving line of credit borrowing limit | $ 0.5 | $ 0.5 |
Note Payable Eight [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 4.14% | 4.14% |
Debt instrument maturity date description | The note has a 60-month term with maturity in July 2024 | The note has a 60-month term with maturity in July 2024 |
Debt maturity term | 60 months | 60 months |
Note Payable Nine [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 3.91% | 3.91% |
Debt instrument maturity date description | The note has a 60-month term with maturity in August 2024 | The note has a 60-month term with maturity in August 2024 |
Debt maturity term | 60 months | 60 months |
Note Payable Ten [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 3.96% | 3.96% |
Debt instrument maturity date description | The note has a 60-month term with maturity in November 2024 | The note has a 60-month term with maturity in November 2024 |
Debt maturity term | 60 months | 60 months |
Note Payable Eleven [Member] | ||
Short-term Debt [Line Items] | ||
Debt instrument interest rate | 6.00% | 6.00% |
Debt instrument maturity date description | The notes have a 36-month term with maturity in April 2024 | The notes have a 36-month term with maturity in April 2024 |
Debt maturity term | 36 months | 36 months |
Schedule of Maturities on Notes
Schedule of Maturities on Notes Payable (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 79 |
2022 | 893 |
2023 | 1,073 |
2024 | 129 |
2025 | |
Thereafter | |
Total | $ 2,174 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Debt Disclosure [Abstract] | ||
Interest on notes | $ 0.5 | $ 0.2 |
Secured Credit Facilities (Deta
Secured Credit Facilities (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jul. 30, 2021 | Jul. 30, 2021 | Apr. 19, 2021 | Jan. 15, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Feb. 05, 2021 | Dec. 31, 2020 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Common stock, par or stated value per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Interest paid | $ 500 | $ 200 | ||||||||
Debt instrument, description | The Company may prepay the Notes at any time in whole or in part by paying a sum of money equal to 100% of the principal amount to be redeemed, together with accrued and unpaid interest, plus a prepayment fee equal to five percent (5%) of the principal amount to be repaid. | |||||||||
Prepaid fees, percentage | 100.00% | |||||||||
Proceeds from warrants exercise | $ 2,400 | |||||||||
Dividend deemed | $ 2,300 | $ 2,288 | $ 2,288 | |||||||
Warrant [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Proceeds from warrants exercise | $ 2,400 | |||||||||
Warrants to purchase common stock | 900,000 | 900,000 | ||||||||
Common Stock [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Dividend deemed | ||||||||||
Secured Convertible Promissory Notes [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Debt instrument, interest rate during period | 6.00% | |||||||||
Debt instrument, conversion price | $ 2.20 | $ 2.20 | ||||||||
Debt instrument maturity date | Oct. 18, 2022 | |||||||||
Interest paid | $ 0 | |||||||||
Roth Capital, LLC [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Proceeds from issuance initial public offering | $ 3,100 | |||||||||
Stock issuance cost percentage | 5.00% | 5.00% | ||||||||
Purchase Agreement [Member] | Common Stock [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Warrant exercise price | $ 3.94 | |||||||||
Warrants to purchase common stock | 100,000 | |||||||||
Purchase Agreement [Member] | Accredited Investors [Member] | Secured Convertible Promissory Notes [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Proceeds from loans | $ 3,300 | |||||||||
Debt instrument, interest rate during period | 6.00% | |||||||||
Common stock, par or stated value per share | $ 0.0001 | |||||||||
Purchase Agreement [Member] | Accredited Investors [Member] | Secured Convertible Promissory Notes [Member] | IPO [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Proceeds from issuance initial public offering | $ 3,300 | |||||||||
Purchase Agreement [Member] | Accredited Investors [Member] | Secured Convertible Promissory Notes [Member] | Warrant [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Warrant exercise price | $ 2.60 | |||||||||
Purchase Agreement [Member] | Accredited Investors [Member] | Secured Convertible Promissory Notes [Member] | Common Stock [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Debt instrument, conversion price | $ 2.20 | |||||||||
Outstanding notes payable percentage | 60.00% | |||||||||
Loan Agreement [Member] | ||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||
Warrant exercise price | $ 3.94 | |||||||||
Debt instrument maturity date | Jan. 14, 2021 | |||||||||
Interest paid | $ 100 | |||||||||
Borrowing base percentage, description | Under the Loan Agreement, the Lender has committed to make up to two loan advances to the Borrowers in an aggregate principal amount not to exceed the lesser of (i) $8.0 million and (ii) a borrowing base equal to 85% of the appraised value of the Borrowers’ eligible inventory of whisky in barrels or totes less an amount equal to all service fees or rental payments owed by the Borrowers during the 90 day period immediately succeeding the date of determination to any warehouses or bailees holding eligible inventory (the “Loan”). | |||||||||
Notes payable related parties | $ 8,000 | |||||||||
Debt Instrument, Maturity Date, Description | On January 8, 2021, the Company entered into an amendment to the Loan Agreement with Live Oak to extend the maturity date to April 13, 2021. On April 13, 2021, the maturity date was amended to further extend it to May 13, 2021. On May 11, 2021, the maturity date was further extended to August 11, 2021. On August 11, 2021, the maturity date was further extended to October 11, 2021. On October 11, 2021, the maturity date was further extended to November 11, 2021 | |||||||||
Interest rate | 2.49% | |||||||||
Loan repayment | $ 3,400 | |||||||||
Loan amount | $ 3,000 | $ 3,000 | ||||||||
Increase in interest rate | 2.00% | |||||||||
Warrants to purchase common stock | 100,000 | |||||||||
Warrant expiration, description | Jan. 15, 2025 |
Net Income (Loss) per Common _2
Net Income (Loss) per Common Share (Details Narrative) - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||
Number diluted shares outstanding | 2,711,364 | 0 |
Schedule of Stockholders_ Equit
Schedule of Stockholders’ Equity (Details) - USD ($) shares in Thousands, $ in Thousands | Jul. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance, December 31, 2020 | $ (1,108) | ||||
Stock-based compensation | 25 | $ 243 | |||
Issuance of common stock from warrant exercise for cash, net of expenses | 2,375 | ||||
Deemed dividend-warrant price protection-revaluation adjustment | $ 2,300 | $ 2,288 | 2,288 | ||
Net income | (1,910) | $ (1,767) | 30 | $ (7,462) | |
Balance, September 30, 2021 | 11,302 | 11,302 | |||
Common Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance, December 31, 2020 | $ 1 | ||||
Balance, shares | 10,382 | ||||
Stock-based compensation | |||||
Issuance of common stock from warrant exercise for cash, net of expenses | |||||
Issuance of common stock from warrant exercise for cash, net of expenses, shares | 900 | ||||
Issuance of warrants for secured credit facility | |||||
Issuance of common stock for Azuñia initial earn-out | |||||
Issuance of common stock for Azunia initial earn-out, shares | 1,883 | ||||
Issuance of common stock for services by third parties | |||||
Issuance of common stock for services by third parties, shares | 141 | ||||
Issuance of common stock for services by employees | |||||
Issuance of common stock for services by employees, shares | 63 | ||||
Issuance of common stock, sold for cash, net | |||||
Issuance of common stock, sold for cash, net, shares | 718 | ||||
Deemed dividend-warrant price protection-revaluation adjustment | |||||
Net income | |||||
Balance, September 30, 2021 | $ 1 | $ 1 | |||
Balance, shares | 14,087 | 14,087 | |||
Additional Paid-in Capital [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance, December 31, 2020 | $ 52,985 | ||||
Stock-based compensation | 25 | ||||
Issuance of common stock from warrant exercise for cash, net of expenses | 2,375 | ||||
Issuance of warrants for secured credit facility | 717 | ||||
Issuance of common stock for Azuñia initial earn-out | 6,860 | ||||
Issuance of common stock for services by third parties | 263 | ||||
Issuance of common stock for services by employees | 131 | ||||
Issuance of common stock, sold for cash, net | 2,009 | ||||
Deemed dividend-warrant price protection-revaluation adjustment | 2,288 | ||||
Net income | |||||
Balance, September 30, 2021 | $ 67,653 | 67,653 | |||
Retained Earnings [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance, December 31, 2020 | (54,094) | ||||
Stock-based compensation | |||||
Issuance of common stock from warrant exercise for cash, net of expenses | |||||
Issuance of warrants for secured credit facility | |||||
Issuance of common stock for Azuñia initial earn-out | |||||
Issuance of common stock for services by third parties | |||||
Issuance of common stock for services by employees | |||||
Issuance of common stock, sold for cash, net | |||||
Deemed dividend-warrant price protection-revaluation adjustment | (2,288) | ||||
Net income | 30 | ||||
Balance, September 30, 2021 | (56,352) | (56,352) | |||
Total Stockholders' Equity [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Balance, December 31, 2020 | (1,108) | ||||
Stock-based compensation | 25 | ||||
Issuance of common stock from warrant exercise for cash, net of expenses | 2,375 | ||||
Issuance of warrants for secured credit facility | 717 | ||||
Issuance of common stock for Azuñia initial earn-out | 6,860 | ||||
Issuance of common stock for services by third parties | 263 | ||||
Issuance of common stock for services by employees | 131 | ||||
Issuance of common stock, sold for cash, net | 2,009 | ||||
Deemed dividend-warrant price protection-revaluation adjustment | |||||
Net income | 30 | ||||
Balance, September 30, 2021 | $ 11,302 | $ 11,302 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2021$ / sharesshares | |
Equity [Abstract] | |
Number of Options Outstanding, Beginning Balance | shares | 134,931 |
Weighted- Average Exercise Price Options Outstanding, Beginning Balance | $ / shares | $ 4.71 |
Number of Options Outstanding, granted | shares | 5,000 |
Weighted- Average Exercise Price Options Outstanding, granted | $ / shares | $ 0.53 |
Number of Options Outstanding, canceled | shares | (68,845) |
Weighted- Average Exercise Price Options Outstanding, canceled | $ / shares | $ 5.31 |
Number of Options Outstanding, Ending Balance | shares | 71,086 |
Weighted- Average Exercise Price Options Outstanding, Ending Balance | $ / shares | $ 3.34 |
Number of Options Exercisable, Ending Balance | shares | 65,503 |
Weighted- Average Exercise Price Options Exercisable, Ending Balance | $ / shares | $ 3.21 |
Schedule of Weighted-average As
Schedule of Weighted-average Assumptions Used in Black-scholes Valuation Method (Details) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Risk-free interest rate | 169.00% |
Expected term (in years) | 5 years |
Dividend yield | |
Expected volatility | 75.00% |
Schedule of Share Based Payment
Schedule of Share Based Payment Award Assumptions Used in Black-scholes Valuation Method (Details) | 9 Months Ended |
Sep. 30, 2021$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility | 75.00% |
Risk-free interest rate | 169.00% |
Expected term (in years) | 5 years |
Expected dividend yield | |
Warrant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility | 75.00% |
Risk-free interest rate | 0.69% |
Expected term (in years) | 5 years |
Expected dividend yield | |
Fair value of common stock | $ 3.88 |
Summary of Warrant Activity (De
Summary of Warrant Activity (Details) | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Equity [Abstract] | |
Warrants Outstanding, Beginning Balance | shares | 240,278 |
Warrants Outstanding Weighted Average Remaining Life, Beginning Balance | 3 years 2 months 12 days |
Warrants Outstanding Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 4.85 |
Warrants Outstanding Aggregate Intrinsic Value, Beginning Balance | $ | |
Warrants, Granted | shares | 1,800,000 |
Warrants Outstanding Weighted Average Remaining Life, Granted | 4 years 9 months 18 days |
Warrants Outstanding Weighted Average Exercise Price, Granted | $ / shares | $ 2.29 |
Warrants Outstanding Aggregate Intrinsic Value, Granted | $ | |
Warrants, Exercised | shares | (900,000) |
Warrants Outstanding Weighted Average Exercise Price, Exercised | $ / shares | $ 2.60 |
Warrants Outstanding Aggregate Intrinsic Value, Exercised | $ | |
Warrants Outstanding, Ending Balance | shares | 1,140,278 |
Warrants Outstanding Weighted Average Remaining Life, Ending Balance | 4 years 2 months 12 days |
Warrants Outstanding Weighted Average Exercise Price, Ending Balance | $ / shares | $ 3.39 |
Warrants Outstanding Aggregate Intrinsic Value, Ending Balance | $ |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | Aug. 11, 2021 | Jul. 30, 2021 | Jul. 30, 2021 | May 12, 2021 | Apr. 19, 2021 | Feb. 10, 2021 | Sep. 08, 2016 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Sep. 12, 2019 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Common stock, par or stated value per share | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||
Proceeds from warrant exercises | $ 2,400,000 | |||||||||||||
Number of shares sold | 718,255 | |||||||||||||
Proceeds from sale of stock | $ 2,000,000 | |||||||||||||
Option granted | 5,000 | |||||||||||||
Aggregate intrinsic value of options outstanding | $ 0 | $ 0 | $ 0 | |||||||||||
Unvested options shares | 5,583 | 5,583 | 5,583 | |||||||||||
Unvested options, intrinsic value | $ 0 | $ 0 | $ 0 | |||||||||||
Stock option vested | 13,667 | 13,667 | 13,667 | |||||||||||
Weighted average exercise price, options | $ 0.53 | |||||||||||||
Stock compensation expenses | $ 0 | $ 200,000 | ||||||||||||
Stock options not yet recognized | $ 100,000 | $ 100,000 | $ 100,000 | |||||||||||
Stock options not yet recognized, term | 9 months 18 days | |||||||||||||
Deemed dividend | $ 2,300,000 | 2,288,000 | $ 2,288,000 | |||||||||||
New Warrants [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Warrant purchase of common stock | 900,000 | 900,000 | 900,000 | |||||||||||
Proceeds from warrant exercises | $ 2,400,000 | |||||||||||||
Warrant exercise price per share | $ 3 | $ 3 | $ 2.60 | |||||||||||
Fair value of warrants | $ 700,000 | |||||||||||||
Secured credit facilities | $ 200,000 | $ 200,000 | $ 200,000 | |||||||||||
Deemed dividend | $ 2,300,000 | |||||||||||||
New Warrant Shares [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Warrant purchase of common stock | 900,000 | 900,000 | ||||||||||||
Common Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Issuance of common stock for services, shares | 141,000 | |||||||||||||
Issuance of common stock for services | ||||||||||||||
Issuance of common stock, shares | 1,883,000 | |||||||||||||
Issuance of common stock | ||||||||||||||
Deemed dividend | ||||||||||||||
Board Member Fees [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Annual board member fees | $ 50,000 | |||||||||||||
Board Chair Premium [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Annual board member fees | 20,000 | |||||||||||||
Committee Chair Premium [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Annual board member fees | 10,000 | |||||||||||||
Committee Member Fees [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Annual board member fees | $ 20,000 | |||||||||||||
Warrant [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Warrant purchase of common stock | 900,000 | 900,000 | ||||||||||||
Proceeds from warrant exercises | $ 2,400,000 | |||||||||||||
2016 Equity Incentive Plan [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Number of shares available for grant | 3,747,583 | |||||||||||||
Outstanding capital stock shares percentage | 8.00% | |||||||||||||
Option granted | 71,086 | |||||||||||||
Number of RSU's issued | 1,253,522 | |||||||||||||
Vesting period of option | 3 years | |||||||||||||
Equity Option [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Option granted | 5,000 | |||||||||||||
Stock options vested, fair value | $ 0 | |||||||||||||
Weighted average exercise price, options | $ 1.17 | |||||||||||||
Asset Purchase Agreement [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Issuance of common stock, shares | 682,669 | 1,200,000 | ||||||||||||
Share price per share | $ 1.82 | $ 4.67 | ||||||||||||
Purchase Agreement [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Share price per share | $ 1.82 | |||||||||||||
Purchase Agreement [Member] | Common Stock [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Warrant purchase of common stock | 100,000 | |||||||||||||
Warrant exercise price per share | $ 3.94 | |||||||||||||
Directors and Employees [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Issuance of common stock for services, shares | 204,088 | |||||||||||||
Issuance of common stock for services | $ 400,000 | |||||||||||||
Directors and Employees [Member] | Minimum [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Common stock, par or stated value per share | $ 1.28 | $ 1.28 | $ 1.28 | |||||||||||
Directors and Employees [Member] | Maximum [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Common stock, par or stated value per share | $ 2.98 | $ 2.98 | $ 2.98 | |||||||||||
Directors, Employees and Consultants [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Issuance of common stock, shares | 706,987 | |||||||||||||
Issuance of common stock | $ 1,000,000 | |||||||||||||
Directors, Employees and Consultants [Member] | Minimum [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Share price per share | $ 1.08 | |||||||||||||
Directors, Employees and Consultants [Member] | Maximum [Member] | ||||||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||
Share price per share | $ 3.20 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | Apr. 19, 2021 | Feb. 10, 2021 | Feb. 05, 2021 | Jan. 02, 2020 | Oct. 24, 2019 | Sep. 16, 2019 | Sep. 30, 2021 | Sep. 12, 2019 |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Assets from related party transaction | $ 0.1 | |||||||
Percentage of average of assets net | 1.00% | |||||||
Due to related party | $ 0.3 | |||||||
Related party transaction, description | On October 24, 2019, the Company’s Board appointed Stephanie Kilkenny to the Board to fill an existing vacancy on the Board effective immediately. Stephanie Kilkenny was the former managing director of Azuñia Tequila, and together with her spouse, owns and controls TQLA, LLC (“TQLA”), the majority owner of Intersect. In connection with the acquisition of Azuñia Tequila from Intersect, TQLA is entitled to receive up to 93.88% of the aggregate consideration payable under the Asset Purchase Agreement. | |||||||
Weighted average, exercise price | $ 3.21 | |||||||
Promissory Note [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Debt instrument face amount | $ 7.8 | |||||||
Debt instrument maturity date | Apr. 1, 2024 | |||||||
Debt instrument interest rate | 6.00% | |||||||
Promissory Note [Member] | TQLA, LLC [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Conversion price per share | 598,223 | |||||||
Promissory note in principal amount | $ 6.9 | |||||||
Purchase Agreement [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Weighted average, exercise price | $ 4.67 | |||||||
Shares issued price, per share | $ 1.82 | |||||||
Stephanie Kilkenny [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Shares issued to related party | 682,669 | 1,200,000 | ||||||
Stephanie Kilkenny's Spouse [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Shares issued to related party | 55,555 | |||||||
Shares issued price, per share | $ 4.50 | |||||||
Number of warrants exercised | 0.5 | |||||||
Warrant exercise price | $ 5.50 | |||||||
Robert Grammen [Member] | Promissory Note [Member] | ||||||||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||||||||
Conversion price per share | 22,027 | |||||||
Promissory note in principal amount | $ 0.1 | |||||||
Debt instrument term | 36 months | |||||||
Debt maturity date describtion | April 2024 | |||||||
Repayment of other liabilities | $ 0.7 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Oct. 19, 2021 | Oct. 01, 2021 | Nov. 08, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | ||||||||
Net income loss | $ (1,910) | $ (1,767) | $ 30 | $ (7,462) | ||||
Sale of stock of common stock shares | 718,255 | |||||||
Sale of stock | $ 2,000 | |||||||
Directors [Member] | 2016 Plan [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of common stock for services | 9,385 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Sale of stock of common stock shares | 579,398 | |||||||
Sale of stock | $ 1,500 | |||||||
Subsequent Event [Member] | Series B Convertible Preferred Stock [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Preferred stock dividend rate | 6.00% | |||||||
Net income loss | $ 500 | |||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Subscriber [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrants to purchase a common stock | 116,666 | |||||||
Exercise price of warrants | $ 3.75 | |||||||
Proceeds from warrants | $ 2,500 | |||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Series B Convertible Preferred Stock [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares issuance | 2,500,000 | |||||||
Shares issued price per share | $ 1 | |||||||
Conversion price per share | $ 3.10 | |||||||
Number of common shares reserved for future issuance | 850,000 |