Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2022 | |
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 | 2321 NE Argyle Street | |
Entity Address, Address Line Two | Unit D | |
Entity Address, City or Town | Portland | |
Entity Address, State or Province | OR | |
Entity Address, Postal Zip Code | 97211 | |
City Area Code | (971) | |
Local Phone Number | 888-4264 | |
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | EAST | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 15,739,179 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 432 | $ 3,276 |
Trade receivables, net | 913 | 1,446 |
Inventories | 4,975 | 6,510 |
Prepaid expenses and current assets | 725 | 2,873 |
Total current assets | 7,045 | 14,105 |
Property and equipment, net | 6,168 | 2,163 |
Right-of-use assets | 3,016 | 3,211 |
Intangible assets, net | 13,314 | 13,624 |
Other assets, net | 383 | 457 |
Total Assets | 29,926 | 33,560 |
Current liabilities: | ||
Accounts payable | 2,144 | 1,265 |
Accrued liabilities | 1,732 | 833 |
Deferred revenue | 62 | |
Current portion of secured credit facilities, net of debt issuance costs | 3,316 | 5,725 |
Note payable, related party, net of debt issuance costs | 2,455 | |
Current portion of notes payable | 217 | 894 |
Current portion of lease liabilities | 1,023 | 781 |
Total current liabilities | 10,949 | 9,498 |
Lease liabilities, net of current portion | 2,181 | 2,498 |
Note payable, related party | 92 | 92 |
Notes payable, net of current portion | 7,749 | 8,073 |
Total liabilities | 20,971 | 20,161 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity: | ||
Common stock, $0.0001 par value; 35,000,000 shares authorized; 15,446,694 and 14,791,449 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 2 | 1 |
Preferred stock, $0.0001 par value; 100,000,000 shares authorized; 2,500,000 issued and outstanding as of both September 30, 2022 and December 31, 2021 | ||
Additional paid-in capital | 74,228 | 72,003 |
Accumulated deficit | (65,275) | (58,605) |
Total stockholders’ equity | 8,955 | 13,399 |
Total Liabilities and Stockholders’ Equity | $ 29,926 | $ 33,560 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 35,000,000 | 35,000,000 |
Common stock, shares issued | 15,446,694 | 14,791,449 |
Common stock, shares outstanding | 15,446,694 | 14,791,449 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 2,500,000 | 2,500,000 |
Preferred stock, shares outstanding | 2,500,000 | 2,500,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Sales | $ 3,064 | $ 3,277 | $ 11,967 | $ 10,138 |
Less customer programs and excise taxes | 87 | 70 | 393 | 338 |
Net sales | 2,977 | 3,207 | 11,574 | 9,800 |
Cost of sales | 2,787 | 2,347 | 8,985 | 7,488 |
Gross profit | 190 | 860 | 2,589 | 2,312 |
Operating expenses: | ||||
Sales and marketing expenses | 702 | 533 | 2,078 | 2,087 |
General and administrative expenses | 1,438 | 1,471 | 5,116 | 5,000 |
Loss on disposal of property and equipment | 360 | 101 | 421 | |
Total operating expenses | 2,140 | 2,364 | 7,295 | 7,508 |
Loss from operations | (1,950) | (1,504) | (4,706) | (5,196) |
Other income (expense), net | ||||
Interest expense | (808) | (414) | (1,976) | (885) |
Other income | 25 | 25 | 125 | 2,242 |
Total other income (expense), net | (783) | (389) | (1,851) | 1,357 |
Loss before income taxes | (2,733) | (1,893) | (6,557) | (3,839) |
Provision for income taxes | ||||
Net loss from continuing operations | (2,733) | (1,893) | (6,557) | (3,839) |
Net income (loss) from discontinued operations | (17) | 3,869 | ||
Net income (loss) | (2,733) | (1,910) | (6,557) | 30 |
Preferred stock dividends | (38) | (113) | ||
Deemed dividend-warrant price protection-revaluation adjustment | (2,288) | (2,288) | ||
Net loss attributable to common shareholders | $ (2,771) | $ (4,198) | $ (6,670) | $ (2,258) |
Basic net loss per common share | $ (0.18) | $ (0.32) | $ (0.44) | $ (0.19) |
Diluted net loss per common share | $ (0.18) | $ (0.32) | $ (0.44) | $ (0.19) |
Basic weighted average common shares outstanding | 15,447 | 13,055 | 15,210 | 12,145 |
Diluted weighted average common shares outstanding | 15,447 | 13,055 | 15,210 | 12,145 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ (6,557) | $ 30 |
Net income from discontinued operations | (3,869) | |
Depreciation and amortization | 1,104 | 903 |
Bad debt expense | 126 | 1 |
Forgiveness of debt - Paycheck Protection Program | (1,448) | |
Loss on disposal of assets | 101 | 421 |
Inventory reserve | (32) | |
Remeasurement of deferred consideration | (750) | |
Stock dividend payable | (113) | |
Amortization of debt issuance costs | 1,225 | 222 |
Interest accrued to secured credit facilities | 119 | 91 |
Issuance of common stock in exchange for services for related parties | 206 | 131 |
Issuance of common stock in exchange for services for third parties | 230 | 263 |
Stock-based compensation | 3 | 25 |
Changes in operating assets and liabilities: | ||
Trade receivables, net | 408 | (644) |
Inventories | 1,567 | 669 |
Prepaid expenses and other assets | (197) | (1,565) |
Right-of-use assets | 721 | 362 |
Accounts payable | 881 | (467) |
Accrued liabilities | 899 | (531) |
Other liabilities, related party | (700) | |
Deferred revenue | 62 | (23) |
Net lease liabilities | (602) | (390) |
Net cash provided by (used in) operating activities | 151 | (7,269) |
Net cash provided by operating activities of discontinued operations | 4,617 | |
Net cash provided by (used in) operating activities | 151 | (2,652) |
Cash Flows From Investing Activities: | ||
Proceeds from sale of fixed assets | 12 | 110 |
Purchases of property and equipment | (2,495) | (189) |
Net cash used in investing activities of continuing operations | (2,483) | (79) |
Net cash provided by investing activities of discontinued operations | 3,362 | |
Net cash (used in) provided by investing activities | (2,483) | 3,283 |
Cash Flows From Financing Activities: | ||
Issuance of common stock from warrant exercise for cash, net of expenses | 2,375 | |
Proceeds from issuance of stock | 197 | 2,009 |
Proceeds from secured credit facilities | 3,300 | |
Proceeds from note payable, related party | 3,500 | |
Payments of principal on notes payable, related party | (275) | |
Payments of principal on secured credit facilities | (2,933) | (3,601) |
Payments of principal on notes payable | (1,001) | (2,780) |
Net cash (used in) provided by financing activities | (512) | 1,303 |
Net (decrease) increase in cash | (2,844) | 1,934 |
Cash at the beginning of the period | 3,276 | 836 |
Cash at the end of the period | 432 | 2,770 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid during the period for interest | 772 | 654 |
Cash paid for amounts included in measurement of lease liabilities | 705 | 540 |
Supplemental Disclosure of Non-Cash Financing Activity | ||
Issuance of detachable warrants on notes payable | 1,590 | |
Right-of-use assets obtained in exchange for lease obligations | 527 | |
Warrants issued in relation to secured credit facilities | 717 | |
Issuance of common stock pursuant to Azuñia earn-out | 6,860 | |
Issuance of notes payable pursuant to Azuñia final earn-out | 7,842 | |
Deemed dividend-warrant price protection-revaluation adjustment | $ 2,288 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
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, markets and sells a wide variety of alcoholic beverages under recognized brands. The Company currently employs 75 people in the United States. The Company’s spirits’ brands span several alcoholic beverage categories, including whiskey, vodka, rum, and tequila. The Company sells products on a wholesale basis to distributors in open states and through brokers in control states. The Company operates a mobile craft canning business that primarily services the craft beer and craft cider industries. During 2022, the Company made substantial investments to expand its product offerings to include digital can printing activities in the Pacific Northwest (together Craft Canning + Printing, “Craft C+P”). Craft C+P operates 14 mobile filling lines in Seattle, Washington; Spokane, Washington; Portland, Oregon; and Denver, Colorado. The Company now offers co-packing services in Portland, Oregon through its recent asset acquisition, allowing it to offer end-to-end production capabilities. |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2022 | |
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 loans 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. The Company had an accumulated deficit of $ 65.3 6.6 4.3 8.5 During the nine months ended September 30, 2022, the Company raised $ 3.7 Although the Company’s audited financial statements for the year ended December 31, 2021 were prepared under the assumption that it would continue operations as a going concern, the report of its independent registered public accounting firm that accompanied the financial statements for the year ended December 31, 2021 contained a going concern explanatory paragraph in which such firm expressed substantial doubt about the Company’s ability to continue as a going concern, based on the financial statements at that time. If the Company cannot continue as a going concern, its stockholders would likely lose most or all of their investment in it. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022, its operating results for the three and nine months ended September 30, 2022 and 2021 and its cash flows for the nine months ended September 30, 2022 and 2021. 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, 2021. 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 (a discontinued operation), Craft Canning + Bottling, LLC (doing business as Craft Canning + Printing) and its wholly-owned subsidiary Galactic Unicorn Packaging LLC (the Company’s newly acquired fixed co-packing assets) and the Azuñia tequila assets. All intercompany balances and transactions have been eliminated on consolidation. 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. Customer Programs Customer programs, which include customer promotional discount programs, are a common practice in the alcoholic beverage industry. The Company reimburses wholesalers for an agreed amount to promote sales of products and to maintain competitive pricing. Amounts paid in connection with customer programs are recorded as reductions to net sales in accordance with ASC 606 - Revenue from Contracts with Customers 0.2 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 $ 0.2 0.1 Cost of Sales Cost of sales consists of all direct costs related to both spirits and canning for service, labor, overhead, packaging, and in-bound freight charges. Ingredients account for the largest portion of the cost of sales, followed by packaging and production costs. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) Sales and Marketing Expenses Sales and marketing expenses consist of sponsorships, agency fees, digital media, salary and benefit expenses, travel and entertainment expenses. Sales and marketing costs are expensed as incurred. Advertising and marketing expenses totaled $ 0.6 General and Administrative Expenses General and administrative expenses consist of 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. Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade receivables. As of September 30, 2022, two distributors represented 37 42 43 24 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, 2022 and December 31, 2021, 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, 2022 (Unaudited) None of the Company’s assets or liabilities were measured at fair value as of September 30, 2022 or December 31, 2021. 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, 2022 and December 31, 2021, the principal amounts of 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 due to having indefinite lives. The Company, on an annual basis, tests 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. Inventories Inventories primarily consist of bulk and bottled liquor and raw materials 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, 2022 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, 2022 and determined that they were not impaired. Comprehensive Income The Company did no Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) Accounts Receivable Factoring Program The Company has 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 85 0.5 1 Transfers and Servicing 0.3 3,150 0.1 Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue Recognition In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses (Topic 326) |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 4. 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 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) 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 For the nine months ended September 30, 2021, the revenue, expenses and cash flows from retail operations and the RRWC business have been classified as discontinued operations separately from continuing operations. As of December 31, 2021, there were no assets and liabilities related to discontinued retail operations and the Redneck Riviera Spirits business. Income and expense related to discontinued retail operations and the Redneck Riviera Spirits business were as follows for the nine months ended September 30, 2022 and 2021: Schedule of Discontinued Retail Operations (Dollars in thousands) 2022 2021 (Unaudited) (Unaudited) Sales $ - $ 283 Less customer programs and excise taxes - 31 Net sales - 252 Cost of sales - 168 Gross profit - 84 Operating expenses: Sales and marketing expenses - 22 General and administrative expenses - 32 Total operating expenses - 54 Income from operations - 30 Other income, net Other income - 989 Gain on termination of license agreement - 2,850 Total other expense, net - 3,839 Net income $ - $ 3,869 |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Business Segment Information | 5. Business Segment Information The Company’s internal management financial reporting consists of Eastside spirits and Craft C+P. The spirits brands span several alcoholic beverage categories, including whiskey, vodka, rum, and tequila and are sold on a wholesale basis to distributors in open states, and brokers in control states. The Company’s principal area of operation is in the U.S. and has two spirits customers that represents 42 Craft C+P offers digital can printing and co-packing services in Portland, Oregon allowing it to offer end-to-end production capabilities. Craft C+P operates 14 mobile lines in Washington, Oregon and Colorado. The measure of profitability reviewed is condensed statements of operations, and gross margin. These business segments reflect how operations are managed, operating performance is evaluated and the structure of internal financial reporting. Total asset information by segment is not provided to, or reviewed by, the chief operating decision maker (“CODM”) as it is not used to make strategic decisions, allocate resources or assess performance. The accounting policies of the segments are the same as those described for the Company in the Summary of Significant Accounting Policies in Note 3. Spirits allocates 50% of certain general and administrative expenses to Craft C+P, which is included in the segments’ financial data below. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) Segment information was as follows for the nine months ended September 30, 2022 and 2021: Schedule of Segment Information (Dollars in thousands) 2022 2021 Spirits Sales $ 7,586 $ 4,304 Net sales 7,293 3,966 Cost of sales 4,176 2,989 Gross profit 3,117 977 Total operating expenses 3,595 4,358 Net income (loss) (2,397 ) 1,484 Gross margin 43 % 25 % Interest expense $ 1,944 $ 846 Depreciation and amortization 122 229 Significant noncash items: (Gain) loss on disposal of property and equipment (12 ) 298 Forgiveness of debt - PPP - (1,052 ) Remeasurement of deferred consideration - (750 ) Gain on disposal of offsite inventory - (1,047 ) One-time professional fees - 403 Stock compensation 458 287 Craft C+P Sales $ 4,381 $ 5,834 Net sales 4,281 5,834 Cost of sales 4,809 4,499 Gross profit (528 ) 1,335 Total operating expenses 3,700 3,150 Net loss (4,160 ) (1,454 ) Gross margin -12 % 23 % Interest expense $ 32 $ 39 Depreciation and amortization 982 674 Significant noncash items: Loss on disposal of property and equipment 113 123 Forgiveness of debt - PPP - (396 ) Stock compensation 365 290 Craft C+P’s gross margin decreased primarily due to lower sales of services, a change in product and service mix, and higher raw material costs. In addition, Craft C+P’s digital printer commenced operations in April, 2022 and Craft C+P now bears the operating costs. Although printing revenues significantly increased through the quarter, the printer is not yet operating at full capacity. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. Inventories Inventories consisted of the following: Schedule of Inventories (Dollars in thousands) September 30, 2022 December 31, 2021 Raw materials $ 3,194 $ 4,768 Finished goods 1,781 1,742 Total inventories $ 4,975 $ 6,510 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) |
Prepaid Expenses and Current As
Prepaid Expenses and Current Assets | 9 Months Ended |
Sep. 30, 2022 | |
Prepaid Expenses And Current Assets | |
Prepaid Expenses and Current Assets | 7. 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, 2022 December 31, 2021 Prepayment of fixed assets $ 346 $ 2,715 Prepayment of inventory 158 59 Other 221 99 Total prepaid expenses and current assets $ 725 $ 2,873 During the nine months ended September 30, 2022, the Company began operations of its new digital can printer. This resulted in a decrease in prepayment of fixed assets, as the printer was reclassified to property and equipment. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 8. Property and Equipment Property and equipment consisted of the following: Schedule of Property and Equipment (Dollars in thousands) September 30, 2022 December 31, 2021 Furniture and fixtures $ 4,276 $ 3,779 Digital can printer 4,216 - Leasehold improvements 1,529 1,386 Vehicles 222 814 Total cost 10,243 5,979 Less accumulated depreciation (4,075 ) (3,816 ) Total property and equipment, net $ 6,168 $ 2,163 Purchases of property and equipment totaled $ 2.5 0.2 0.8 0.6 During the nine months ended September 30, 2022, the Company disposed of fixed assets with a net book value of $ 0.1 0.1 0.5 0.4 0.1 During the nine months ended September 30, 2022, the Company entered into a master equity lease agreement with Enterprise FM Trust (“Enterprise”). Per the agreement, the Company delivered to Enterprise the titles to certain vehicles, which resulted in a loss on disposal of $ 0.1 During the nine months ended September 30, 2022, the Company acquired the assets of a production facility for a cash payment of $ 0.2 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 9. Intangible Assets Intangible assets consisted of the following: Schedule of Intangible Assets (Dollars in thousands) September 30, 2022 December 31, 2021 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 (1,551 ) (1,241 ) Intangible assets, net $ 13,314 $ 13,624 The customer list is being amortized over a seven-year life. Amortization expense totaled $ 0.3 The permits and licenses, and Azuñia brand have all been determined to have an indefinite life and will not be amortized. The Company, on an annual basis, tests 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, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | 10. Other Assets Other assets consisted of the following: Schedule of Other Assets (Dollars in thousands) September 30, 2022 December 31, 2021 Product branding $ 400 $ 400 Deposits 255 286 Total other assets 655 686 Less accumulated amortization (272 ) (229 ) Other assets, net $ 383 $ 457 As of September 30, 2022, the Company had $ 0.4 Amortization expense totaled $ 42,857 The deposits represent office lease deposits. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | 11. Leases The Company has various lease agreements in place for facilities, equipment and vehicles. 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 2027 3.0 3.2 0.9 0.2 0.7 Maturities of lease liabilities as of September 30, 2022 were as follows: Schedule of Maturities of Operating Lease Liabilities (Dollars in thousands) Operating Leases Weighted- Average Remaining Term in Years 2022 $ 309 2023 1,105 2024 744 2025 739 2026 607 Thereafter 141 Total lease payments 3,645 Less imputed interest (based on 6.7 (441 ) Present value of lease liability $ 3,204 3.60 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Notes Payable | 12. Notes Payable Notes payable consisted of the following: Schedule of Notes Payable (Dollars in thousands) September 30, 2022 December 31, 2021 Notes payable bearing interest at 5.00%. Principal and accrued interest was payable in six equal installments on each six-month anniversary of the issuance date of January 11, 2019. The notes were secured by the security interests and subordinated to the Company’s senior indebtedness. $ - $ 124 Notes payable bearing interest at 5.00 $ - $ 124 Promissory note payable bearing interest of 5.2 The note had a maturity of May 2023 27 79 Promissory note payable bearing interest of 4.45 The note matured in May 2022 - 56 Promissory note payable under a revolving line of credit bearing variable interest starting at 3.25 The note had a 15-month term with principal and accrued interest due in lump sum in January 2022 0.5 The note was secured by the assets of Craft C+P and included certain affirmative and financial covenants - 500 Promissory note payable bearing interest of 4.14 The note had a maturity of July 2024 44 108 Promissory note payable bearing interest of 3.91 The note had a maturity of August 2024 69 167 Promissory note payable bearing interest of 3.96 The note had a maturity of November 2024 75 182 Promissory notes payable bearing interest of 6.0 The notes have a 36-month term with maturity in April 2024 7,751 7,751 Total notes payable 7,966 8,967 Less current portion (217 ) (894 ) Long-term portion of notes payable $ 7,749 $ 8,073 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) The Company paid $ 0.4 0.5 Maturities on notes payable as of September 30, 2022 were as follows: Schedule of Maturities on Notes Payable (Dollars in thousands) 2022 $ 217 2023 - 2024 7,749 2025 - 2026 - Thereafter - Total $ 7,966 |
Secured Credit Facilities
Secured Credit Facilities | 9 Months Ended |
Sep. 30, 2022 | |
Secured Credit Facilities | |
Secured Credit Facilities | 13. 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 0.2 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 were initially convertible into the Company’s common stock at an initial fixed conversion price of $ 2.20 6 1.30 3.5 1.20 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. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) 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. During the year ended December 31, 2021, the Company received gross proceeds of $ 2.4 2.3 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 Company and to provide funding for general working capital purposes. Under the Loan Agreement, the Lender committed to make up to two loan advances to the Company in an aggregate principal amount not to exceed the lesser of (i) $ 8.0 The Loan bore interest at a rate equal to the prime rate plus a spread of 2.49 0.1 0.9 1.9 The Loan Agreement contained affirmative and negative covenants that include covenants restricting the 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 were secured by substantially all of its spirits respective assets, except for accounts receivable and certain other specified excluded property. The Loan Agreement included customary events of default that included 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 would have applied 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, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. 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, 2022 (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, 2022 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) per Common Share | 15. 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. Potentially dilutive securities consist of the incremental common stock issuable upon exercise of stock options, convertible notes and warrants. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. There were no 2,711,364 |
Stockholders_ Equity
Stockholders’ Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | 16. Stockholders’ Equity Schedule of Stockholders’ Equity Series B Preferred Stock Common Stock Paid-in Accumulated Total Stockholders’ (Shares and dollars in thousands) Shares Amount Shares Amount Capital Deficit Equity Balance, December 31, 2021 2,500 $ - 14,791 $ 1 $ 72,003 $ (58,605 ) $ 13,399 Beginning balance 2,500 $ - 14,791 $ 1 $ 72,003 $ (58,605 ) $ 13,399 Stock-based compensation - - - - 3 - 3 Issuance of common stock for services by third parties - - 286 - 230 - 230 Issuance of common stock for services by employees - - 170 - 206 - 206 Issuance of detachable warrants on notes payable - - - - 1,590 - 1,590 Shares issued for cash - - 200 1 196 - 197 Preferred stock dividends - - - - - (113 ) (113 ) Net loss - - - - - (6,557 ) (6,557 ) Balance, September 30, 2022 2,500 $ - 15,447 $ 2 $ 74,228 $ (65,275 ) $ 8,955 Ending balance 2,500 $ - 15,447 $ 2 $ 74,228 $ (65,275 ) $ 8,955 Issuance of Common Stock During the nine months ended September 30, 2022, the Company issued 455,245 0.4 0.69 1.21 170,000 On April 5, 2022, the Company sold 200,000 0.2 During 2021, the Company issued 313,442 0.6 1.28 2.98 5,000 1.23 On February 10, 2021 and April 19, 2021, the Company issued 1.2 682,669 4.67 1.82 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 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) During 2021, the Company sold 1,297,653 shares of common stock for net proceeds of $ 3.6 million in at-the-market public placements. Issuance of Series B Preferred Stock On October 19, 2021, Company entered into a securities purchase agreement (“Purchase Agreement”) with an accredited investor (“Subscriber”) for its purchase of 2.5 1.00 3.10 850,000 The Series B Preferred Stock accrues dividends at a rate of 6 0.5 10,670 2.57 0.1 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, 2022 the number of shares available for grant under the 2016 Plan reset to 5,225,141 8 56,752 1,607,291 3 The Company also issues, from time to time, options that are not registered under a formal option plan. As of September 30, 2022, 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, 2022 is presented below: Summary of Stock Option Activity # of Options Weighted- Outstanding as of December 31, 2021 57,586 $ 3.29 Options canceled (5,834 ) 4.43 Outstanding as of September 30, 2022 51,752 $ 3.16 Exercisable as of September 30, 2022 51,585 $ 3.16 On December 7, 2021, the Company issued 5,000 1.23 6,150 The aggregate intrinsic value of options outstanding as of September 30, 2022 was $ 0 As of September 30, 2022, there were 167 66.70 0 3,417 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) 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. 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 Company did not issue any additional options during the nine months ended September 30, 2022. For the nine months ended September 30, 2022 and 2021, net compensation expense related to stock options was $ 2,926 0.1 0.1 0.3 Warrants On March 21, 2022, the Company entered into a promissory note with TQLA to accept a one year loan of $ 2.0 1.0 500 3.5 9.25 2.5 1.20 3.5 2.9 1.6 0.8 The estimated fair value of the new warrants issued 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 assumptions below: Schedule of Weighted-average Assumptions for New Warrant Volatility 75 % Risk-free interest rate 2.6 % Expected term (in years) 5.0 Expected dividend yield - Fair value of common stock $ 0.71 From April 19, 2021 through May 12, 2021, the Company issued in a private placement Existing Warrants to purchase up to 900,000 2.60 0.7 0.4 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) 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 900,000 900,000 3.00 2.4 2.3 A summary of all warrant activity as of and for the nine months ended September 30, 2022 is presented below: Summary of Warrant Activity Warrants Weighted- Weighted- Aggregate Outstanding as of December 31, 2021 1,256,944 4.0 $ 3.42 $ - Granted 2,916,667 4.3 1.20 - Outstanding as of September 30, 2022 4,173,611 4.0 $ 1.79 $ - |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 17. Related Party Transactions The following is a description of transactions since January 1, 2021 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, Patrick Kilkenny, owns and controls TQLA, the majority owner of Intersect. Effective June 15, 2020, the Company’s Board appointed Robert Grammen to the Board to fill an existing vacancy, Mr. Grammen is also a member of Intersect . In connection with the acquisition of Azuñia Tequila from Intersect, TQLA was 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 On April 19, 2021, the Company issued $ 7.8 April 1, 2024 6.0 598,223 6.9 22,027 0.1 36 6.9 On February 5, 2021, the Company paid other liabilities of $ 0.7 Secured Line of Credit Promissory Note On March 21, 2022, the Company entered into a Secured Line of Credit Promissory Note payable to TQLA to accept a one year loan of $ 2.0 1.0 1.0 3.5 9.25 2.5 1.20 3.5 2.9 0.1 Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events Debt On October 7, 2022, the Company entered into a Note Purchase Agreement dated as of October 6, 2022 with Aegis Security Insurance Company (“Aegis”). The principal owner of Aegis is Patrick Kilkenny, whose spouse is a member of the Company’s Board of Directors. Pursuant to the Note Purchase Agreement, Aegis purchased from the Company a secured promissory note in the principal amount of $ 4.5 3.3 1.2 The Aegis Note bears interest at 9.25 45,000 The aforesaid payment by Aegis to TQLA fully satisfied the Secured Line of Credit Promissory Note that the Company issued to TQLA on March 21, 2022 and subsequently amended. On October 13, 2022, the Company entered into an Amendment Agreement with the holders of the 6% Secured Convertible Promissory Notes 96,153 Common Stock Issuance On October 6, 2022, the Company issued 100,179 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022, its operating results for the three and nine months ended September 30, 2022 and 2021 and its cash flows for the nine months ended September 30, 2022 and 2021. 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, 2021. 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 (a discontinued operation), Craft Canning + Bottling, LLC (doing business as Craft Canning + Printing) and its wholly-owned subsidiary Galactic Unicorn Packaging LLC (the Company’s newly acquired fixed co-packing assets) and the Azuñia tequila assets. All intercompany balances and transactions have been eliminated on consolidation. |
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. |
Customer Programs | Customer Programs Customer programs, which include customer promotional discount programs, are a common practice in the alcoholic beverage industry. The Company reimburses wholesalers for an agreed amount to promote sales of products and to maintain competitive pricing. Amounts paid in connection with customer programs are recorded as reductions to net sales in accordance with ASC 606 - Revenue from Contracts with Customers 0.2 |
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 $ 0.2 0.1 |
Cost of Sales | Cost of Sales Cost of sales consists of all direct costs related to both spirits and canning for service, labor, overhead, packaging, and in-bound freight charges. Ingredients account for the largest portion of the cost of sales, followed by packaging and production costs. Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) |
Sales and Marketing Expenses | Sales and Marketing Expenses Sales and marketing expenses consist of sponsorships, agency fees, digital media, salary and benefit expenses, travel and entertainment expenses. Sales and marketing costs are expensed as incurred. Advertising and marketing expenses totaled $ 0.6 |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses consist of 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. |
Concentrations | Concentrations Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade receivables. As of September 30, 2022, two distributors represented 37 42 43 24 |
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, 2022 and December 31, 2021, 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, 2022 (Unaudited) None of the Company’s assets or liabilities were measured at fair value as of September 30, 2022 or December 31, 2021. 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, 2022 and December 31, 2021, the principal amounts of 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 due to having indefinite lives. The Company, on an annual basis, tests 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. |
Inventories | Inventories Inventories primarily consist of bulk and bottled liquor and raw materials 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, 2022 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, 2022 and determined that they were not impaired. |
Comprehensive Income | Comprehensive Income The Company did no Eastside Distilling, Inc. and Subsidiaries Notes to Consolidated Financial Statements September 30, 2022 (Unaudited) |
Accounts Receivable Factoring Program | Accounts Receivable Factoring Program The Company has 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 85 0.5 1 Transfers and Servicing 0.3 3,150 0.1 |
Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers Revenue Recognition In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments—Credit Losses (Topic 326) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 and 2021: Schedule of Discontinued Retail Operations (Dollars in thousands) 2022 2021 (Unaudited) (Unaudited) Sales $ - $ 283 Less customer programs and excise taxes - 31 Net sales - 252 Cost of sales - 168 Gross profit - 84 Operating expenses: Sales and marketing expenses - 22 General and administrative expenses - 32 Total operating expenses - 54 Income from operations - 30 Other income, net Other income - 989 Gain on termination of license agreement - 2,850 Total other expense, net - 3,839 Net income $ - $ 3,869 |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Segment information was as follows for the nine months ended September 30, 2022 and 2021: Schedule of Segment Information (Dollars in thousands) 2022 2021 Spirits Sales $ 7,586 $ 4,304 Net sales 7,293 3,966 Cost of sales 4,176 2,989 Gross profit 3,117 977 Total operating expenses 3,595 4,358 Net income (loss) (2,397 ) 1,484 Gross margin 43 % 25 % Interest expense $ 1,944 $ 846 Depreciation and amortization 122 229 Significant noncash items: (Gain) loss on disposal of property and equipment (12 ) 298 Forgiveness of debt - PPP - (1,052 ) Remeasurement of deferred consideration - (750 ) Gain on disposal of offsite inventory - (1,047 ) One-time professional fees - 403 Stock compensation 458 287 Craft C+P Sales $ 4,381 $ 5,834 Net sales 4,281 5,834 Cost of sales 4,809 4,499 Gross profit (528 ) 1,335 Total operating expenses 3,700 3,150 Net loss (4,160 ) (1,454 ) Gross margin -12 % 23 % Interest expense $ 32 $ 39 Depreciation and amortization 982 674 Significant noncash items: Loss on disposal of property and equipment 113 123 Forgiveness of debt - PPP - (396 ) Stock compensation 365 290 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following: Schedule of Inventories (Dollars in thousands) September 30, 2022 December 31, 2021 Raw materials $ 3,194 $ 4,768 Finished goods 1,781 1,742 Total inventories $ 4,975 $ 6,510 |
Prepaid Expenses and Current _2
Prepaid Expenses and Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Prepayment of fixed assets $ 346 $ 2,715 Prepayment of inventory 158 59 Other 221 99 Total prepaid expenses and current assets $ 725 $ 2,873 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Furniture and fixtures $ 4,276 $ 3,779 Digital can printer 4,216 - Leasehold improvements 1,529 1,386 Vehicles 222 814 Total cost 10,243 5,979 Less accumulated depreciation (4,075 ) (3,816 ) Total property and equipment, net $ 6,168 $ 2,163 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 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 (1,551 ) (1,241 ) Intangible assets, net $ 13,314 $ 13,624 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Product branding $ 400 $ 400 Deposits 255 286 Total other assets 655 686 Less accumulated amortization (272 ) (229 ) Other assets, net $ 383 $ 457 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Schedule of Maturities of Operating Lease Liabilities | Maturities of lease liabilities as of September 30, 2022 were as follows: Schedule of Maturities of Operating Lease Liabilities (Dollars in thousands) Operating Leases Weighted- Average Remaining Term in Years 2022 $ 309 2023 1,105 2024 744 2025 739 2026 607 Thereafter 141 Total lease payments 3,645 Less imputed interest (based on 6.7 (441 ) Present value of lease liability $ 3,204 3.60 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consisted of the following: Schedule of Notes Payable (Dollars in thousands) September 30, 2022 December 31, 2021 Notes payable bearing interest at 5.00%. Principal and accrued interest was payable in six equal installments on each six-month anniversary of the issuance date of January 11, 2019. The notes were secured by the security interests and subordinated to the Company’s senior indebtedness. $ - $ 124 Notes payable bearing interest at 5.00 $ - $ 124 Promissory note payable bearing interest of 5.2 The note had a maturity of May 2023 27 79 Promissory note payable bearing interest of 4.45 The note matured in May 2022 - 56 Promissory note payable under a revolving line of credit bearing variable interest starting at 3.25 The note had a 15-month term with principal and accrued interest due in lump sum in January 2022 0.5 The note was secured by the assets of Craft C+P and included certain affirmative and financial covenants - 500 Promissory note payable bearing interest of 4.14 The note had a maturity of July 2024 44 108 Promissory note payable bearing interest of 3.91 The note had a maturity of August 2024 69 167 Promissory note payable bearing interest of 3.96 The note had a maturity of November 2024 75 182 Promissory notes payable bearing interest of 6.0 The notes have a 36-month term with maturity in April 2024 7,751 7,751 Total notes payable 7,966 8,967 Less current portion (217 ) (894 ) Long-term portion of notes payable $ 7,749 $ 8,073 |
Schedule of Maturities on Notes Payable | Maturities on notes payable as of September 30, 2022 were as follows: Schedule of Maturities on Notes Payable (Dollars in thousands) 2022 $ 217 2023 - 2024 7,749 2025 - 2026 - Thereafter - Total $ 7,966 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Stockholders’ Equity | Schedule of Stockholders’ Equity Series B Preferred Stock Common Stock Paid-in Accumulated Total Stockholders’ (Shares and dollars in thousands) Shares Amount Shares Amount Capital Deficit Equity Balance, December 31, 2021 2,500 $ - 14,791 $ 1 $ 72,003 $ (58,605 ) $ 13,399 Beginning balance 2,500 $ - 14,791 $ 1 $ 72,003 $ (58,605 ) $ 13,399 Stock-based compensation - - - - 3 - 3 Issuance of common stock for services by third parties - - 286 - 230 - 230 Issuance of common stock for services by employees - - 170 - 206 - 206 Issuance of detachable warrants on notes payable - - - - 1,590 - 1,590 Shares issued for cash - - 200 1 196 - 197 Preferred stock dividends - - - - - (113 ) (113 ) Net loss - - - - - (6,557 ) (6,557 ) Balance, September 30, 2022 2,500 $ - 15,447 $ 2 $ 74,228 $ (65,275 ) $ 8,955 Ending balance 2,500 $ - 15,447 $ 2 $ 74,228 $ (65,275 ) $ 8,955 |
Summary of Stock Option Activity | A summary of all stock option activity as of and for the nine months ended September 30, 2022 is presented below: Summary of Stock Option Activity # of Options Weighted- Outstanding as of December 31, 2021 57,586 $ 3.29 Options canceled (5,834 ) 4.43 Outstanding as of September 30, 2022 51,752 $ 3.16 Exercisable as of September 30, 2022 51,585 $ 3.16 |
Schedule of Weighted-average Assumptions for New Warrant | The estimated fair value of the new warrants issued 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 assumptions below: Schedule of Weighted-average Assumptions for New Warrant Volatility 75 % Risk-free interest rate 2.6 % Expected term (in years) 5.0 Expected dividend yield - Fair value of common stock $ 0.71 |
Summary of Warrant Activity | A summary of all warrant activity as of and for the nine months ended September 30, 2022 is presented below: Summary of Warrant Activity Warrants Weighted- Weighted- Aggregate Outstanding as of December 31, 2021 1,256,944 4.0 $ 3.42 $ - Granted 2,916,667 4.3 1.20 - Outstanding as of September 30, 2022 4,173,611 4.0 $ 1.79 $ - |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Liquidity | |||||
Accumulated deficit | $ 65,275 | $ 65,275 | $ 58,605 | ||
Net Income (Loss) Attributable to Parent | 2,733 | $ 1,910 | 6,557 | $ (30) | |
Prepayment of current assets to equipment | 4,300 | ||||
Working capital | $ 8,500 | 8,500 | |||
Proceeds from issuance of debt | $ 3,700 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Product Information [Line Items] | |||
Customer programs and incentives paid | $ 200,000 | $ 200,000 | |
Excise taxes | 200,000 | 100,000 | |
Marketing and advertising expense | 600,000 | 600,000 | |
Comprehensive income | 0 | $ 0 | |
Interest charged on advance payment amount | $ 500,000 | ||
Interest charged on advance payment, rate | 1% | ||
Spirtits Program and Co Packing Program [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage description | Under the programs, the Company has the option to sell certain customer account receivables in advance of payment for 75% (spirits program) or 85% (co-packing program) of the amount due. When the customer remits payment, the Company receives the remaining balance. For the spirits program, interest is charged on the advanced 75% payment at a rate of 2.4% for the first 30 days plus 1.44% for each additional ten-day period | ||
Spirits Program [Member] | |||
Product Information [Line Items] | |||
Payment of account receivables in advance percentage | 75% | ||
Copacking Program [Member] | |||
Product Information [Line Items] | |||
Payment of account receivables in advance percentage | 85% | ||
Factored invoices | $ 300,000 | ||
Fees | 3,150 | ||
Factored co-packing invoices balance outstanding | $ 100,000 | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Distributors [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 37% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Four Wholesale Customers [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 42% | ||
Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | One Distributor and One Wholesale Customer [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 43% | ||
Revenue Benchmark [Member] | Supplier Concentration Risk [Member] | Two Wholesale Customers [Member] | |||
Product Information [Line Items] | |||
Concentration risk percentage | 24% |
Schedule of Discontinued Retail
Schedule of Discontinued Retail Operations (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Sales | $ 283 | |
Less customer programs and excise taxes | 31 | |
Net sales | 252 | |
Cost of sales | 168 | |
Gross profit | 84 | |
Sales and marketing expenses | 22 | |
General and administrative expenses | 32 | |
Total operating expenses | 54 | |
Income from operations | 30 | |
Other income | 989 | |
Gain on termination of license agreement | 2,850 | |
Total other expense, net | 3,839 | |
Net income | $ 3,869 |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) $ in Millions | 9 Months Ended | |
Feb. 02, 2021 | Sep. 30, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Sale of asset | $ 0.1 | |
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 | |
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 | $ 4.7 |
Schedule of Segment Information
Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Sales | $ 2,977 | $ 3,207 | $ 11,574 | $ 9,800 |
Cost of sales | 2,787 | 2,347 | 8,985 | 7,488 |
Gross profit | 190 | 860 | 2,589 | 2,312 |
Total operating expenses | 2,140 | 2,364 | 7,295 | 7,508 |
Net loss | (2,733) | (1,910) | (6,557) | 30 |
Interest expense | 808 | 414 | 1,976 | 885 |
Depreciation and amortization | 1,104 | 903 | ||
Loss on disposal of property and equipment | $ (360) | (101) | (421) | |
Forgiveness of debt - PPP | 1,448 | |||
Remeasurement of deferred consideration | (750) | |||
Stock compensation | 3 | 25 | ||
Spirits [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 7,586 | 4,304 | ||
Net sales | 7,293 | 3,966 | ||
Cost of sales | 4,176 | 2,989 | ||
Gross profit | 3,117 | 977 | ||
Total operating expenses | 3,595 | 4,358 | ||
Net loss | $ (2,397) | $ 1,484 | ||
Gross margin | 43% | 25% | ||
Interest expense | $ 1,944 | $ 846 | ||
Depreciation and amortization | 122 | 229 | ||
Loss on disposal of property and equipment | (12) | 298 | ||
Forgiveness of debt - PPP | (1,052) | |||
Remeasurement of deferred consideration | (750) | |||
Gain on disposal of offsite inventory | (1,047) | |||
One-time professional fees | 403 | |||
Stock compensation | 458 | 287 | ||
Craft C+P [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Sales | 4,381 | 5,834 | ||
Net sales | 4,281 | 5,834 | ||
Cost of sales | 4,809 | 4,499 | ||
Gross profit | (528) | 1,335 | ||
Total operating expenses | 3,700 | 3,150 | ||
Net loss | $ (4,160) | $ (1,454) | ||
Gross margin | (12.00%) | 23% | ||
Interest expense | $ 32 | $ 39 | ||
Depreciation and amortization | 982 | 674 | ||
Loss on disposal of property and equipment | 113 | 123 | ||
Forgiveness of debt - PPP | (396) | |||
Stock compensation | $ 365 | $ 290 |
Business Segment Information (D
Business Segment Information (Details Narrative) | 9 Months Ended |
Sep. 30, 2022 | |
Two Spirits Customer [Member] | Revenue Benchmark [Member] | Customer Concentration Risk [Member] | |
Revenue, Major Customer [Line Items] | |
Concentration risk, percentage | 42% |
Schedule of Inventories (Detail
Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 3,194 | $ 4,768 |
Finished goods | 1,781 | 1,742 |
Total inventories | $ 4,975 | $ 6,510 |
Schedule of Prepaid Expenses an
Schedule of Prepaid Expenses and Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Prepaid Expenses And Current Assets | ||
Prepayment of fixed assets | $ 346 | $ 2,715 |
Prepayment of inventory | 158 | 59 |
Other | 221 | 99 |
Total prepaid expenses and current assets | $ 725 | $ 2,873 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 10,243 | $ 5,979 |
Less accumulated depreciation | (4,075) | (3,816) |
Total property and equipment, net | 6,168 | 2,163 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 4,276 | 3,779 |
Digital Can Printer [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 4,216 | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | 1,529 | 1,386 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total cost | $ 222 | $ 814 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Purchases of property and equipment | $ 2,495 | $ 189 |
Depreciation expense | 800 | 600 |
Net book value of fixed assets | 100 | 500 |
Gain (loss) on disposal of fixed asset | 100 | 400 |
Proceeds from sale of fixed assets | $ 100 | |
Production facility [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Purchases of property and equipment | 200 | |
Master Equity Lease Agreement [Member] | Enterprises FM Trust [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Gain (loss) on disposal of fixed asset | $ 100 |
Schedule of Intangible Assets (
Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 14,865 | $ 14,865 |
Less accumulated amortization | (1,551) | (1,241) |
Intangible assets, net | 13,314 | 13,624 |
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, 2022 | Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 0.3 | $ 0.3 |
Schedule of Other Assets (Detai
Schedule of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Total other assets | $ 655 | $ 686 |
Less accumulated amortization | (272) | (229) |
Other assets, net | 383 | 457 |
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 | $ 255 | $ 286 |
Other Assets (Details Narrative
Other Assets (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Net value of service write down | $ 400,000 | |
Adjustment for amortization | 300,000 | $ 300,000 |
Other Assets [Member] | ||
Adjustment for amortization | $ 42,857 | $ 42,857 |
Schedule of Maturities of Opera
Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Leases | |
2022 | $ 309 |
2023 | 1,105 |
2024 | 744 |
2025 | 739 |
2026 | 607 |
Thereafter | 141 |
Total lease payments | 3,645 |
Less imputed interest (based on 6.7% weighted-average discount rate) | (441) |
Present value of lease liability | $ 3,204 |
Operating lease weighted average remaining lease term | 3 years 7 months 6 days |
Schedule of Maturities of Ope_2
Schedule of Maturities of Operating Lease Liabilities (Details) (Parenthetical) | Sep. 30, 2022 |
Leases | |
Operating lease weighted average discount rate | 6.70% |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Leases | ||
Lease obligations expire description | These lease obligations expire at various dates through 2027 | |
Operating lease right of use asset | $ 3,016 | $ 3,211 |
Operating lease liabilities | 3,204 | |
Lease cost | 900 | |
Operating lease cost | 200 | |
Short term lease cost | $ 700 |
Schedule of Notes Payable (Deta
Schedule of Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Short-Term Debt [Line Items] | ||
Total notes payable | $ 7,966 | $ 8,967 |
Total notes payable | (217) | (894) |
Total notes payable | 7,749 | 8,073 |
Note Payable One [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 124 | |
Note Payable Two [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 27 | 79 |
Note Payable Three [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 56 | |
Note Payable Four [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 500 | |
Note Payable Five [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 44 | 108 |
Note Payable Six [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 69 | 167 |
Note Payable Seven [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | 75 | 182 |
Note Payable Eight [Member] | ||
Short-Term Debt [Line Items] | ||
Total notes payable | $ 7,751 | $ 7,751 |
Schedule of Notes Payable (De_2
Schedule of Notes Payable (Details) (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Note Payable One [Member] | ||
Short-Term Debt [Line Items] | ||
Debt instrument interest rate | 5% | 5% |
Note Payable Two [Member] | ||
Short-Term Debt [Line Items] | ||
Debt instrument interest rate | 5.20% | 5.20% |
Debt instrument maturity date description | The note had a maturity of May 2023 | The note had a maturity of May 2023 |
Note Payable Three [Member] | ||
Short-Term Debt [Line Items] | ||
Debt instrument interest rate | 4.45% | 4.45% |
Debt instrument maturity date description | The note matured in May 2022 | The note matured in May 2022 |
Note Payable Four [Member] | ||
Short-Term Debt [Line Items] | ||
Debt instrument interest rate | 3.25% | 3.25% |
Debt instrument maturity date description | The note had a 15-month term with principal and accrued interest due in lump sum in January 2022 | The note had a 15-month term with principal and accrued interest due in lump sum in January 2022 |
Line of credit facility maximum borrowing capacity | $ 0.5 | $ 0.5 |
Debt instrument restrictive covenants | The note was secured by the assets of Craft C+P and included certain affirmative and financial covenants | The note was secured by the assets of Craft C+P and included certain affirmative and financial covenants |
Note Payable Five [Member] | ||
Short-Term Debt [Line Items] | ||
Debt instrument interest rate | 4.14% | 4.14% |
Debt instrument maturity date description | The note had a maturity of July 2024 | The note had a maturity of July 2024 |
Note Payable Six [Member] | ||
Short-Term Debt [Line Items] | ||
Debt instrument interest rate | 3.91% | 3.91% |
Debt instrument maturity date description | The note had a maturity of August 2024 | The note had a maturity of August 2024 |
Note Payable Seven [Member] | ||
Short-Term Debt [Line Items] | ||
Debt instrument interest rate | 3.96% | 3.96% |
Debt instrument maturity date description | The note had a maturity of November 2024 | The note had a maturity of November 2024 |
Note Payable Eight [Member] | ||
Short-Term Debt [Line Items] | ||
Debt instrument interest rate | 6% | 6% |
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 |
Schedule of Maturities on Notes
Schedule of Maturities on Notes Payable (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 217 |
2023 | |
2024 | 7,749 |
2025 | |
2026 | |
Thereafter | |
Total | $ 7,966 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Notes Payable [Member] | ||
Short-Term Debt [Line Items] | ||
Interest on notes | $ 0.4 | $ 0.5 |
Secured Credit Facilities (Deta
Secured Credit Facilities (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||||
Apr. 02, 2022 | Jul. 30, 2021 | Apr. 19, 2021 | Jan. 15, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Mar. 21, 2022 | Feb. 28, 2022 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||
Interest paid | $ 772 | $ 654 | ||||||||||
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. | |||||||||||
Debt prepayment cost | 100% | |||||||||||
Proceeds from warrant exercises | $ 2,400 | |||||||||||
Deemed dividend | 2,300 | $ 2,288 | $ 2,288 | |||||||||
Debt instrument interest rate stated percentage | 9.25% | |||||||||||
Warrants to purchase common stock | 2,900,000 | 2,900,000 | ||||||||||
Warrant [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Proceeds from warrant exercises | $ 2,400 | |||||||||||
Warrants to purchase common stock | 900,000 | |||||||||||
Secured Convertible Promissory Notes [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Debt instrument interest rate during period | 6% | 6% | ||||||||||
Debt instrument, conversion price | $ 2.20 | $ 2.20 | ||||||||||
Debt instrument maturity date | Oct. 18, 2022 | |||||||||||
Interest paid | $ 200 | |||||||||||
Share price | $ 1.30 | |||||||||||
Debt instrument face amount | $ 3,500 | |||||||||||
Secured Convertible Promissory Notes [Member] | Common Stock [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Share price | $ 1.20 | |||||||||||
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% | 5% | ||||||||||
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% | |||||||||||
Common stock, par value | $ 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% | |||||||||||
Loan Agreement [Member] | ||||||||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||||||||
Warrant exercise price | $ 3.94 | |||||||||||
Debt instrument face amount | $ 1,900 | |||||||||||
Borrowing base percentage description | Under the Loan Agreement, the Lender committed to make up to two loan advances to the Company 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 Company’s eligible inventory of whisky in barrels or totes less an amount equal to all service fees or rental payments owed by the Company 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 interest rate stated percentage | 2.49% | |||||||||||
Debt instrument periodic payment interest | $ 100 | |||||||||||
Annual principal payment | $ 900 | |||||||||||
Increase in interest rate | 2% | |||||||||||
Warrants to purchase common stock | 100,000 | |||||||||||
Warrant expiration | Jan. 15, 2025 |
Net Income (Loss) per Common _2
Net Income (Loss) per Common Share (Details Narrative) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Earnings Per Share [Abstract] | ||
Antidilutive common shares | 0 | 2,711,364 |
Schedule of Stockholders_ Equit
Schedule of Stockholders’ Equity (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ 13,399 | |||
Stock-based compensation | 3 | |||
Issuance of common stock for services by third parties | 230 | |||
Issuance of common stock for services by employees | 206 | |||
Issuance of detachable warrants on notes payable | 1,590 | |||
Shares issued for cash | 197 | |||
Preferred stock dividends | $ (38) | (113) | ||
Net loss | (2,733) | $ (1,910) | (6,557) | $ 30 |
Ending balance | 8,955 | 8,955 | ||
Preferred Stock [Member] | Preferred Class B [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | ||||
Beginning balance, shares | 2,500 | |||
Stock-based compensation | ||||
Issuance of common stock for services by third parties | ||||
Issuance of common stock for services by employees | ||||
Issuance of detachable warrants on notes payable | ||||
Shares issued for cash | ||||
Preferred stock dividends | ||||
Net loss | ||||
Ending balance | ||||
Ending balance, shares | 2,500 | 2,500 | ||
Common Stock [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ 1 | |||
Beginning balance, shares | 14,791 | |||
Stock-based compensation | ||||
Issuance of common stock for services by third parties | ||||
Issuance of common stock for services by third parties, shares | 286 | |||
Issuance of common stock for services by employees | ||||
Issuance of common stock for services by employees, shares | 170 | |||
Issuance of detachable warrants on notes payable | ||||
Shares issued for cash | $ 1 | |||
Shares issued for cash, shares | 200 | |||
Preferred stock dividends | ||||
Net loss | ||||
Ending balance | $ 2 | $ 2 | ||
Ending balance, shares | 15,447 | 15,447 | ||
Additional Paid-in Capital [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ 72,003 | |||
Stock-based compensation | 3 | |||
Issuance of common stock for services by third parties | 230 | |||
Issuance of common stock for services by employees | 206 | |||
Issuance of detachable warrants on notes payable | 1,590 | |||
Shares issued for cash | 196 | |||
Preferred stock dividends | ||||
Net loss | ||||
Ending balance | $ 74,228 | 74,228 | ||
Retained Earnings [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (58,605) | |||
Stock-based compensation | ||||
Issuance of common stock for services by third parties | ||||
Issuance of common stock for services by employees | ||||
Issuance of detachable warrants on notes payable | ||||
Shares issued for cash | ||||
Preferred stock dividends | (113) | |||
Net loss | (6,557) | |||
Ending balance | $ (65,275) | $ (65,275) |
Summary of Stock Option Activit
Summary of Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Equity [Abstract] | |
Number of options outstanding, beginning balance | shares | 57,586 |
Weighted- average exercise price options outstanding, beginning balance | $ / shares | $ 3.29 |
Number of options, cancelled | shares | (5,834) |
Weighted- average exercise price options cancelled | $ / shares | $ 4.43 |
Number of options outstanding, ending balance | shares | 51,752 |
Weighted- average exercise price options outstanding, ending balance | $ / shares | $ 3.16 |
Number of options exercisable, ending balance | shares | 51,585 |
Weighted- average exercise price options exercisable, ending balance | $ / shares | $ 3.16 |
Schedule of Weighted-average As
Schedule of Weighted-average Assumptions for New Warrant (Details) | Sep. 30, 2022 $ / shares |
Warrants [Member] | Measurement Input, Option Volatility [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Warrants measurement input | 75 |
Warrants [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Warrants measurement input | 2.6 |
Warrants [Member] | Measurement Input, Expected Term [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Warrants and rights outstanding, term | 5 years |
New Warrants [Member] | Measurement Input, Expected Dividend Rate [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Warrants measurement input | |
New Warrants [Member] | Measurement Input, Exercise Price [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Fair value of common stock | $ 0.71 |
Summary of Warrant Activity (De
Summary of Warrant Activity (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Equity [Abstract] | |
Warrants outstanding, beginning balance | shares | 1,256,944 |
Warrants outstanding weighted average remaining life, beginning balance | 4 years |
Warrants outstanding weighted average exercise price, beginning balance | $ / shares | $ 3.42 |
Warrants outstanding aggregate intrinsic value, beginning balance | $ | |
Warrants, Granted | shares | 2,916,667 |
Warrants outstanding weighted average remaining life, granted | 4 years 3 months 18 days |
Warrants outstanding weighted average exercise price, granted | $ / shares | $ 1.20 |
Warrants outstanding aggregate intrinsic value, granted | $ | |
Warrants outstanding, ending balance | shares | 4,173,611 |
Warrants outstanding weighted average remaining life, ending balance | 4 years |
Warrants outstanding weighted average exercise price, ending balance | $ / shares | $ 1.79 |
Warrants outstanding aggregate intrinsic value, ending balance | $ |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Apr. 05, 2022 | Mar. 21, 2022 | Dec. 07, 2021 | Oct. 19, 2021 | Jul. 30, 2021 | Apr. 19, 2021 | Feb. 10, 2021 | Sep. 08, 2016 | May 12, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Aug. 04, 2022 | |
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Issuance of common stock for services | $ 3,000 | $ 25,000 | |||||||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||||||||
Proceeds sale of stock | $ 197,000 | 2,009,000 | |||||||||||||
Issuance of common stock for services | $ 230,000 | ||||||||||||||
Number of shares, stock exercised | 5,000 | ||||||||||||||
common stock value per share | $ 1.20 | $ 1.23 | |||||||||||||
Class of warrants | 2,900,000 | 2,900,000 | |||||||||||||
Proceeds from warrant exercises | $ 2,400,000 | ||||||||||||||
Net income | $ (2,733,000) | $ (1,910,000) | $ (6,557,000) | 30,000 | |||||||||||
Accrued preferred dividends | 38,000 | 113,000 | |||||||||||||
Proceeds from stock options exercised | $ 6,150 | ||||||||||||||
Aggregate intrinsic value of options outstanding | $ 0 | $ 0 | |||||||||||||
unvested options | 167 | 167 | |||||||||||||
Aggregate grant date fair value | $ 66.70 | $ 66.70 | |||||||||||||
Aggregate intrinsic value | $ 0 | $ 0 | |||||||||||||
Options vested | 3,417 | 3,417 | |||||||||||||
Allocated share based compensation expenses | $ 2,926 | 100,000 | |||||||||||||
Stock option cost not yet recognized, amount | $ 100,000 | $ 100,000 | |||||||||||||
Period of compensation cost related to stock options not yet recognized | 3 months 18 days | ||||||||||||||
Loan | $ 2,000,000 | ||||||||||||||
Additional loan | $ 1,000,000 | ||||||||||||||
Loan bears interest | 9.25% | ||||||||||||||
Commitment fee | 2.50% | ||||||||||||||
Note payable | 3,500,000 | $ 3,500,000 | |||||||||||||
Fair value adjustment of warrants | 1,600,000 | ||||||||||||||
Interest expense | 800,000 | ||||||||||||||
Deemed dividend warrant price protection revaluation adjustment | $ 2,300,000 | $ 2,288,000 | $ 2,288,000 | ||||||||||||
New Warrants [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Class of warrants | 900,000 | 900,000 | |||||||||||||
Proceeds from warrant exercises | $ 2,400,000 | ||||||||||||||
Fair value adjustment of warrants | $ 700,000 | ||||||||||||||
Exercise price | $ 3 | $ 2.60 | |||||||||||||
Line of credit | $ 400,000 | $ 400,000 | |||||||||||||
Deemed dividend warrant price protection revaluation adjustment | $ 2,300,000 | ||||||||||||||
New Warrant Shares [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Class of warrants | 900,000 | ||||||||||||||
SeriesB Convertible Preferred Stock [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Dividend rate percentage per annum | 6% | ||||||||||||||
Net income | $ 500,000 | ||||||||||||||
Warrant [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Class of warrants | 900,000 | ||||||||||||||
Proceeds from warrant exercises | $ 2,400,000 | ||||||||||||||
2016 Equity Incentive Plan [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Number of shares available for grant | 5,225,141 | ||||||||||||||
Outstanding capital stock shares percentage | 8% | ||||||||||||||
Options outstanding | 56,752 | ||||||||||||||
Number of RSU's issued | 1,607,291 | ||||||||||||||
Vesting period of option | 3 years | ||||||||||||||
Asset Purchase Agreement [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
common stock value per share | $ 1.82 | $ 4.67 | |||||||||||||
Number of shares of common stock | 682,669 | 1,200,000 | |||||||||||||
Securities Purchase Agreement [Member] | SeriesB Convertible Preferred Stock [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
common stock value per share | $ 1 | ||||||||||||||
Number of shares of common stock | 2,500,000 | ||||||||||||||
Common stock dividend issued, per share | $ 3.10 | $ 2.57 | |||||||||||||
Common stock dividend issued, shares | 850,000 | 10,670 | |||||||||||||
Accrued preferred dividends | $ 100,000 | ||||||||||||||
Public Placements [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Sale of stock shares | 1,297,653 | ||||||||||||||
Number of shares, stock exercised | 5,000 | ||||||||||||||
common stock value per share | $ 1.23 | ||||||||||||||
Sale of Stock, Consideration Received on Transaction | $ 3,600,000 | ||||||||||||||
Minimum [Member] | Line of Credit [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Loan | $ 500,000 | ||||||||||||||
Maximum [Member] | Line of Credit [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Loan | $ 3,500,000 | ||||||||||||||
Directors And Employees [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Issuance of common stock for services, shares | 455,245 | 313,442 | |||||||||||||
Issuance of common stock for services | $ 400,000 | ||||||||||||||
Issuance of common stock for services | $ 600,000 | ||||||||||||||
Directors And Employees [Member] | Minimum [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Common stock, par value | $ 0.69 | $ 0.69 | $ 1.28 | ||||||||||||
Directors And Employees [Member] | Maximum [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Common stock, par value | $ 1.21 | $ 1.21 | $ 2.98 | ||||||||||||
Chief Executive Officer [Member] | |||||||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||||||
Issuance of common stock for services, shares | 170,000 | ||||||||||||||
Sale of stock shares | 200,000 | ||||||||||||||
Proceeds sale of stock | $ 200,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | ||||||||||
Apr. 19, 2022 | Mar. 21, 2022 | Apr. 19, 2021 | Feb. 10, 2021 | Feb. 05, 2021 | Jan. 02, 2021 | Sep. 30, 2022 | Aug. 04, 2022 | Dec. 31, 2021 | Dec. 07, 2021 | Oct. 31, 2021 | |
Assets requirement from related party transaction | $ 100 | ||||||||||
Percentage of average of assets net | 1% | ||||||||||
Due to related party | $ 300 | ||||||||||
Related party transaction description | In connection with the acquisition of Azuñia Tequila from Intersect, TQLA was entitled to receive up to 93.88% of the aggregate consideration payable under the Asset Purchase Agreement | ||||||||||
Shares issued, price per share | $ 1.20 | $ 1.23 | |||||||||
Repayment of other liabilities | $ 700 | ||||||||||
Loan | $ 2,000 | ||||||||||
Debt instrument interest rate stated percentage | 9.25% | ||||||||||
Notes payable | $ 7,966 | $ 8,967 | |||||||||
Common Stock [Member] | |||||||||||
Stock issued during period, shares | 200,000 | ||||||||||
Shares issued, price per share | $ 1.20 | ||||||||||
Line of Credit [Member] | Maximum [Member] | |||||||||||
Loan | $ 3,500 | ||||||||||
Promissory Note [Member] | |||||||||||
Debt instrument, face amount | $ 7,800 | $ 6,900 | |||||||||
Debt instrument maturity date | Apr. 01, 2024 | ||||||||||
Debt instrument interest rate | 6% | ||||||||||
Promissory Note [Member] | Robert Grammen [Member] | |||||||||||
Conversion price per share | 22,027 | ||||||||||
Promissory note principal amount | $ 100 | ||||||||||
Debt instrument term | 36 years | ||||||||||
Promissory Note [Member] | TQLA, LLC [Member] | |||||||||||
Conversion price per share | 598,223 | ||||||||||
Promissory note principal amount | $ 6,900 | ||||||||||
Notes Payable [Member] | |||||||||||
Proceeds from loans | $ 1,000 | $ 2,000 | |||||||||
Line of credit maximum borrowing capacity | $ 1,000 | ||||||||||
Debt instrument interest rate stated percentage | 9.25% | ||||||||||
Commitment fee percentage | 2.50% | ||||||||||
Notes payable | $ 3,500 | ||||||||||
Warrants outstanding | 2,900,000 | ||||||||||
Interest expense | $ 100 | ||||||||||
Purchase Agreement [Member] | |||||||||||
Stock issued during period, shares | 682,669 | 1,200,000 | |||||||||
Shares issued, price per share | $ 1.82 | $ 4.67 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 9 Months Ended | |||||
Oct. 13, 2022 | Oct. 07, 2022 | Oct. 06, 2022 | Sep. 30, 2022 | Oct. 06, 2023 | Mar. 21, 2022 | |
Subsequent Event [Line Items] | ||||||
Payments in cash | $ 3,700,000 | |||||
Bears interest rate percentage | 9.25% | |||||
Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued for cash, shares | 200,000 | |||||
Subsequent Event [Member] | Common Stock [Member] | Director [Member] | 2016 Plan [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued for cash, shares | 100,179 | |||||
Note Purchase Agreement [Member] | Forecast [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Commitment fee, amount | $ 45,000 | |||||
Note Purchase Agreement [Member] | Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Principal amount | $ 4,500,000 | |||||
Payments in cash | $ 1,200,000 | |||||
Bears interest rate percentage | 9.25% | |||||
Note Purchase Agreement [Member] | Subsequent Event [Member] | Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued for cash, shares | 96,153 | |||||
Note Purchase Agreement [Member] | Subsequent Event [Member] | TQLA, LLC [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Repayment of debt | $ 3,300,000 |