Company: BLNE
Filing Date: 2025-02-05
Form Type: DEF 14A
Source: 0001493152-25-005006
Chunk: 38

Company: Beeline Holdings, Inc.
Filing Date: 2025-02-05
Form: DEF 14A
Chunk 38
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 debt for equity. The plan was accepted by Nasdaq on June 3, 2024, granting the Company time to complete its plan to regain compliance with required equity levels. Ultimately, the debt exchange closed on October 7, 2024, permitting Eastside to regain compliance with Nasdaq’s shareholders’ equity rule.

By April 2024, the Company had signed a non-disclosure agreement with Beeline but was pursuing other potential transactions.

On April 10, 2024, a third party expressed interest in submitting an informal bid for Eastside spirits. When the bid was formally submitted to the Company, it became clear the proposed bid fell substantially short of what the Board required. The unsatisfactory offer included, among other things, the purchase of only one brand, leaving all the other brands with Eastside. This structure would reduce revenue and create greater operating losses, likely forcing the Company to shut down and receive no value for the remaining brands. Additionally, this offer would not allow the Company to retain its Nasdaq listing. Lastly, the proposed purchaser was unwilling to provide material cash, instead requiring the Company to finance the sale and assume payment risk. The offer was reviewed by the Audit Committee and rejected. On May 14, 2024, our Chief Executive Officer terminated these discussions.

Preliminary discussions continued with Beeline and other potential parties, including a consumer products company. Our Chief Executive Officer reviewed Beeline’s business model and believed that selling Craft and reallocating that capital to a rapidly growing business like Beeline could drive strong growth and profitability for shareholders, even though Beeline was operating at a loss. During April 2024, Mr. Gwin held numerous calls with Board members, stakeholders, and advisors to discuss alternatives, including a potential Beeline transaction.

By May 1, 2024, Eastside’s counsel began outlining a possible Merger with Beeline. The possibility was reviewed by management, the Board, and key creditors. Separately, our Chief Executive Officer explored alternative transaction structures, including selling Craft or pursuing a debt exchange structure that would spin Craft out into a separate privately owned company, eliminating debt. On May 1, 2024, our Chief Executive Officer emailed a representative of the creditor group involved in the 2023 debt-for-equity exchange to discuss reducing debt and raising additional capital in exchange for selling Craft. These discussions were based on information obtained from third-party advisors’ efforts to sell Company assets, including the spirits business. One component of the transaction was the sale of a