PORTLAND, Ore., April 16, 2020 /PRNewswire/ -- Eastside Distilling, Inc. (NASDAQ: EAST) ("Eastside") and Craft Canning + Bottling, LLC, a subsidiary of Eastside ("Craft Canning," and together with Eastside, the "Company"), today announced that they have entered into loan agreements with Live Oak Banking Company ("Live Oak Bank") under the Paycheck Protection Program ("PPP") of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") totaling approximately $1.4 million in aggregate.
Working with its partners at Live Oak Bank, Eastside Distilling and Craft Canning applied for, received approval for, and entered into loans under the Keeping American Workers Paid and Employed Act, which was included in the $2.2 trillion CARES Act signed into law on March 27, 2020. The funding will provide additional balance sheet strength during this unprecedented time of global economic challenge related to the COVID-19 pandemic.
This funding will accrue interest at a rate of 1% per annum and, based on the Company's current operating plan, the Company believes that the majority of the principal amount of the loans may be forgiven, provided that it uses the funding proceeds for eligible payroll costs, eligible utility expenses, eligible rent payments and interest on pre-existing mortgage debt, in each case during the eight-week period after entering into each loan. For the loan to be forgivable, at least 75% of the proceeds must be used for eligible payroll costs, and the forgiveness is reduced proportionately to the extent that the Company were to reduce payroll during that eight-week period below full-time equivalent employment levels as compared to prior historical levels. If any portion of this funding were not to be applied to eligible expenses during that eight-week period, the Company would be required to repay the excess amount without any prepayment penalty.
"We are pleased to have a partner in Live Oak Bank who drove such a fast and efficient process to get our final loan documents processed and quickly funded for the PPP loan helping to cover payroll and other applicable costs at Eastside," said Lawrence Firestone, CEO of Eastside Distilling. "Access to this form of funding will allow us to continue to execute our plans while we ride through this crisis."
The final loan agreements will be included in a Form 8-K filed with the Securities and Exchange Commission.
About Eastside Distilling
Eastside Distilling, Inc. (NASDAQ: EAST) has been producing high-quality, award-winning craft spirits in Portland, Oregon, since 2008. The Company is distinguished by its highly decorated product lineup that includes Redneck Riviera and companion brand Granny Rich Whiskey, newly acquired Azuñia Tequilas, Burnside Bourbons and Rye, Hue-Hue Coffee Rum, and Portland Potato Vodkas. All Eastside spirits are crafted from natural ingredients for quality and taste. Eastside's Craft Bottling + Canning subsidiary is one of the Northwest's leading independent spirit bottlers and ready-to-drink canners. For more information visit: www.eastsidedistilling.com or follow the Company on Twitter and Facebook.
Important Cautions Regarding Forward-Looking Statements
Certain matters discussed in this press release may be forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ materially, including the following: changes in economic conditions; changes to our operating plans and our strategies; general competitive factors; the impact of COVID-19 (including its duration and severity) and related business disruption and economic impact; the success of Eastside Distilling's business and operations; and all the risks and related information described from time to time in the Company's filings with the Securities and Exchange Commission ("SEC"), including the financial statements and related information contained in the Company's Annual Report on Form 10-K and interim Quarterly Reports on Form 10-Q. Examples of forward-looking statements in this release may include statements related to the completion of the funding of the PPP loan, including timing of funding, the terms of the PPP loan, including any anticipated extensions and loan forgiveness, the Company's anticipated use of the PPP loan funds, the Company's plans regarding payroll and employment levels, the Company's ability to repay any loan amounts that are not otherwise forgiven, the Company's ability to capitalize on future opportunities following the current crisis, and any additional further PPP loans that the Company may obtain in the future. Except as required by law, the Company assumes no obligation to update the cautionary information in this release.
SOURCE Eastside Distilling, Inc.