EAST: Redneck Riviera Whiskey continues to increase distribution. Fox News highlights John Rich and RRW in Nashville. The warrant call could add over $8 million to the balance sheet.
By Ian Gilson, PhD, CFA
NASDAQ:EAST | NASDAQ:EASTW
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Eastside Distilling (EAST) (EASTW) has called the common stock warrants. Holders will have until Sept. 10, 2018 to convert the warrants into common stock, after which they will expire worthless. The conversion price is $5.40 and, as of midday August 31, 2018 the warrants were selling for $1.99. With the spread between the stock and the conversion price being about $2.55 it is likely that all the warrants will be converted.
There are 1,509,162 warrants outstanding and, if all are exercised, the company will receive close to $7.99 million net of the 2% commission. The share count will increase by 1.51 million shares (these were not used to calculate EPS since the company is operating at a net loss). We have now included these shares in our estimates.
John Rich was recently featured in a 5 minute video by Fox News. This episode was about John and the band Big & Rich and their accomplishments. The RRW was highlighted and prominently displayed during the video.
Winn-Dixie, one of the largest grocery chains in Florida and well known as "The Place for Beef" has added RRW in all of its 136 stores throughout Florida. RRW is now distributed in 28 states.
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