Company: BLNE
Filing Date: 2025-02-05
Form Type: DEF 14A
Source: 0001493152-25-005006
Chunk: 36

Company: Beeline Holdings, Inc.
Filing Date: 2025-02-05
Form: DEF 14A
Chunk 36
---
 years, distributors have merged, creating large national
operations that control access to retailers and new markets. The Company’s pursuit of a large national footprint was hindered by these
challenges.

| 32 |

In January 2019, Eastside acquired Craft but struggled to integrate the business. The COVID-19 pandemic further impacted both businesses, slowing the Company’s ability to restructure and transition into a profitable regional spirits manufacturer. Craft shifted its focus from canning ready-to-drink products to digital printing, but development delays in this segment further strained resources and limited growth. Leadership challenges and difficulties in accessing capital markets also hindered the Company’s efforts to complete its repositioning.

In February 2022, a then director and member of the Eastside Governance Committee, led a leadership transition that elevated Geoffrey Gwin, the Chief Financial Officer, to the role of interim Chief Executive Officer. Subsequent to his appointment, Mr. Gwin discussed with members of the Board the importance of maximizing the value of the Company’s assets for shareholders. While Mr. Gwin succeeded in refinancing much of the Company’s existing debt, achieving a profitable business strategy remained challenging under prior leadership.

Eastside began exploring potential transactions to unlock shareholder value, initiating informal discussions with investment bankers and executives of related companies in the consumer beverage spirits and co-packing segments. However, nothing materialized from these discussions.

During the spring and summer of 2022, Mr. Gwin led the senior leadership team, with Board support, in developing a strategic plan for both the consumer spirits business and the beverage co-packing and digital printing business. The plan focused on reallocating resources away from the regional tequila business and investing in stabilizing core brands in the Oregon market. The leadership team believed that the Oregon brands—Portland Potato Vodka and Burnside Whiskey—had the greatest brand equity.

Additionally, the strategy involved outsourcing production, distribution, and sales activities. At Craft, the focus shifted to introducing digital can printing to its mobile canning customer base and expanding capacity at the new digital can printing facility. However, accessing the required capital to execute this plan proved challenging. Senior leadership maximized the value of a large inventory of bourbon, selling barrels of aged whiskey in the wholesale market. This strategy proved timely, and record whiskey sales funded operational restructuring.

Despite these efforts, attempts to secure equipment financing for Craft faltered during the challenging period of late 2022, marked by underperformance in equity markets and small-cap companies. By the fall, the Board began discussing the