Good day. Welcome to Eastside Distilling Fourth Quarter and Year-end 2021 Financial Results Conference Call. All participants will be on listen-only. If you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to hand the conference over to Amy Brassard, Eastside's Corporate Affairs Director and Corporate Secretary. Please go ahead. Thank you for joining us today to discuss Eastside Distilling's financial results for the fourth quarter and year-end 2021. I'm Amy Brassard, Eastside's Corporate Affairs Director and Corporate Secretary, and I'll be your moderator for today's call. Joining us on today's call to discuss these results are Mr. Geoffrey Gwin, the company's Interim Chief Executive Officer; Ms. Tiffany Milton, the company's Controller; and Ms. Amy Lancer, the company's Chief Commercial Officer. Following their remarks, we will open the call to your questions. I also wanted all shareholders to be on the lookout for announcements regarding our 10-K release in May, our 2022 annual meeting date. We are also planning to host Investor Day in Portland sometime mid to late summer. More details to come. Again, with prepared remarks, we submit for the record the following statement. Certain matters discussed on this conference call by the management of Eastside Distilling could be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, Section 20 of the Securities Exchange Act of 1934 as amended, and such forward-looking statements are made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. The forward-looking statements describe future expectations, plans, and hopes or strategies and are generally preceded by the words such as may, future, plan or plans, will or should, expected, anticipate, draft, eventually, or projected. Listeners are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events or results to differ materially from those projected in the forward-looking statements. Such matters involve risks and uncertainties that may cause actual results to differ, and are not limited to the company's assessments and the company's products in the market, success in obtaining new customers, success in product development, ability to execute the business model and strategic plans, success in integrating acquired entities and assets, ability to obtain capital, ability to continue as going concern, and all the risks and related information described from time to time in the company's filings with the Securities and Exchange Commission, including the table of related information pertaining to the company's annual report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission. Now with that said, I'd like to turn the call over to Geoffrey Gwin. Geoffrey, please proceed. Thank you, Amy. As Amy said, I'm Geoffrey Gwin, the Interim Chief Executive Officer and Chief Financial Officer, and I would like to add my welcome to our fourth quarter and fiscal year 2021 conference call. I will begin my remarks with some major accomplishments of the year and talk about our performance in the fourth quarter, areas we are excited to improve upon, and finally, what you can expect from us in 2022. As Amy noted, we'll take you through the quarter, the year, and of course, we will answer your questions. I've asked the commercial officer to join us on the call, and she can add her perspective about the quarter in the question and answer section of our call today. 2021 was an important year for Eastside Distilling as we successfully navigated a dynamic environment and delivered on some key objectives such as margin improvement in spirits, we restructured the balance sheet, and we began our investment program outlined in our two-year strategic plan. However, we were disappointed in our other performance metrics to grow volume in spirits, and we struggled through the year with a challenging environment for craft. However, I do believe we are still on track to deliver our long-term financial growth goals, and I'm confident you'll see progress there this year. We entered 2022 with a completely revamped craft business strategically focused on the significant opportunity to leverage AVAR digital can printing technology to bring new products and services to our network and to category at large. Now, this went from an idea on paper to having built out a digital printing facility, one of a kind in Portland in just a handful of months. Now, this is a testament to the vision, the dedication, and the resilience of the entire craft team, and I celebrate them. In spirits, we are executing performance improvement plans that will drive sustainable growth. This is on near-term improvements, specifically in our business in Oregon, and the plan for investment and execution. We have proven that we can do these things. We invested in key partnerships such as the Portland Trail Blazers and the Moda Center to bring our award-winning spirits to thousands and thousands of new customers. Last year, we partnered with Blaze to install that product cooler in a few hours. I think this is a great example of the innovation and capability of delivery. We have also increased our commitment to our community by working with organizations such as American Forests to plant trees here in the Bay, to the coast, and recently developed a campaign to donate proceeds from Portland Craft Box in Oregon to Ukrainian refugees through the IRC. These partnerships are important for a number of reasons, and they play a key role in our plans to expand in our home market. I've seen movement in a portion of our spirits category that is going to drive growth in key markets, including California, Arizona and Texas. Last year, we have struggled in this effort. We met with some distributor resistance to support and adopt our brands above competing brands. This was the Eastside legacy brand launch that we talked about last year. We've redoubled our efforts. We believe we are on the path to improving our engagement from key distributor partners in 2023. There's a lot of work to be done there. As craft spirits recovers, both on- and off-premise to pre-pandemic demand levels, we believe we will be positioned to capture growth across our portfolio. Throughout the year, we have invested time and effort in improving our supply chain and our ability to manage our gross margins. This has required SKU rationalization, price increases, which in some cases meant lost margins, and it's also required investment in supply chain initiatives. All these things take time. Although these initiatives had a negative impact on sales volume, and we saw that again in the fourth quarter, they are critical for the long-term profitable growth of the company. We have more work to do in our spirits business, and I believe you should expect to see progress this year. We are starting with outstanding products in a compelling market category. The pace of improvement there will pick up as we execute on our go-to-market strategy and build awareness in our key markets. Craft faces a transformative year ahead. Now, we've been talking about this business on calls, and I'm excited to say that we are getting close to taking a key next step in our growth plans at Craft. In the first quarter of 2022, we have moved out of our old facility and into the newly built 60,000 sq ft digital can printing facility. This facility is the first of its kind in the Pacific Northwest, and it will serve our vast craft beverage customer base. Craft's expanded assortment and services will make us unique in our market, truly offering a one-stop shop for all needs of the growing craft beverage customer. We still have incremental investments to make to finalize our initial year plan. However, the first step was securing the Hendrix Craft partnership. Since then, we've made other sequential steps, including financing, can supply, facility build out, and installation to get us to this point. It's critical we execute well from here in order to deliver upon our strategic plan. Can printing will also improve our existing Craft business, which we didn't have last year. I believe this new technology in digital can printing will highlight the power of hyper-local marketing, specifically in craft beverage. Not well understood when it comes to consumer products, specifically in craft beverage. In truth, we are still dreaming of what is possible. This technology is expanding what is possible and allowing us to merchandise craft beverage as it's never been done before. I would argue we are in a key craft market business space for brands, and we are delivering our customers tools they never had before. On Sunday, I'm excited about some of the opportunities we have before us. I'm also excited that we plan to deliver improvements that are measurable in both businesses this year. A near-term goal is to drive growth to a point where we no longer need external capital to sustain the business. I believe we can accomplish that this year. It doesn't mean we may not seek the ability to grow faster with incremental capital. However, we will continue to be measured and disciplined with capital allocation. You should expect us to be vocal about our progress in the year, and we will work to engage as many external stakeholders as possible to highlight our strategy and the progress we are making. Now, I would like to turn it over to Tiffany Milton, our Controller, who can take you through the financial performance of the company. Thank you all for joining our call today. I'm Tiffany Milton, Controller for Eastside. I've been with the company since January 2020. As I was preparing the year-end audit of our financial statements ahead of this call, I started reflecting on where we started to go. When I joined, we were finalizing the sale of Redneck Riviera. It seems like since that time, things haven't slowed down. We have made great progress, taken a clean sheet approach to rebuilding many of the company's processes, developed internal reporting, which is key to decision making, and we continually add great people to the company. I've had the pleasure of getting to know and working with a great team for both Spirits and Craft, and let me tell you, we're all committed to success, all using our unique talents and skill sets to make that happen. While we've had a lot of internal successes, those haven't necessarily translated to the bottom line yet, and I do emphasize yet. I truly feel that in 2022 we will finally drive our internal successes to the bottom line. One of our significant accomplishments will be to point, hey, it's finally reporting segments. We feel that it's important for our investors and financial statement users to be able to see and understand what is driving our consolidated results by segment. Now, let's review our 2021 results. Overall, we raised almost $12 million during the year, including by reducing our overall debt by almost $13 million from $13 million at year-end 2020 to less than $15 million at year-end 2021. Our working capital increased by a whopping $22 million, primarily reflective of the reduction of our current debt of $15 million. To become current on our payables, we reduced them over $1 million in 2021 and continue to work with vendors over the terms. Our prepaid at year-end 2021 reflects payments for our printer that we since received and is in the process of being installed. Turning to the statements of operations. On a consolidated basis, our gross sales were almost $13 million for 2021 compared to $15 million for 2020. Spirit sales were flat at about $6 million for both years, and Craft sales were $7 million for 2021 and almost $9 million for 2020. The consolidated decrease of $2 million was primarily driven by Craft as a result of the pandemic in 2020 and increased competition in 2021. Our consolidated gross profit was $3 million for 2021 compared to $3.6 million [for] 2020 and driven by Craft and partially offset by Spirit with a significant reduction in COGS and customer programs. For the year ended 2021, we reclassified certain expenses from SG&A to COGS reflected in 2020 for comparability. Our consolidated gross margins were 24% for 2021 and 26% for 2020. Spirit's margins were 28% for 2021 and 18% for 2020, and Craft had margins of 20% for 2021 and 31%. We significantly reduced our almost $3 million both sales and marketing and SG&A. We reduced Spirit in our key states. We're thoughtful and conscientious as to where we spend our marketing dollars in order to make them count. We've also decreased our overall compensation by reducing headcount, slightly improved the depreciation related to leasehold improvements at our Spirit production warehouse. Both of these have translated to our adjusted EBITDA of negative $4 million for 2021 and negative $5 million for 2020. We still have a lot of room for improvement. We have been very actively working on our balance sheet, which has resulted in higher professional fees, and we expect those to be lower in 2022. Our net loss decreased to $2 million for 2021 from an outstanding $10 million in 2020. It is an $8 million decrease, again reflecting our internal successes to the bottom line. I would like to wrap up the financial results with this reflection. In Geoff's commentary for 2/4/2020, he mentioned transforming the company internally by building a professional platform, integrating systems and processes of the company. I strongly feel that we have achieved this goal. Honestly, it has taken us a little longer to achieve than we initially thought. As we started down this path, we realized it was a little rockier than we anticipated. I'm proud this year that we prevailed. We have a tremendous team in place with relevant related industry professional experience that will drive results in 2022. A team that is continuously focused on the bottom line for the total company. We will now open for questions. Operator? We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, be sure to pick up your handset before pressing any keys. When your question has been addressed, even if you withdraw your question, please press star then two. At this time, we will pause briefly to assemble our roster. Our first question will come from the line of 10X Capital. Please go ahead. Hey, Geoffrey. First off, I want to commend you and your team. Previously you said that the printer was going to be operational end of March and you guys kept to the schedule despite the supply chain issues facing. My first question is regarding the credit facility provided by Pat Kilpatrick. I mean, it's a disappointment because it carries such a high interest rate and it's attached with a warrant issuing shares to him at [inaudible]. It almost feels like you are giving him a piece of the company on a silver platter. Knowing you, I'm sure there are some strategic reasons behind this credit facility. Can you just walk us through your thought process, kind of story? Well, I appreciate the question. You know, I actually look at that cost of capital and although it appears high to you, it appears high to me, higher than what we paid in the past. You know, looking at what this thing is financing, John, it is gonna be a good deal for everybody, including shareholders. I can base that on the fact that of your first comment, which is the digital printing business is ready to go. We're gonna start next week. The take-up by our customer base is pretty phenomenal from what I've seen so far. When we finished the year, we talked on the last conference call, the third quarter conference call, we were really close to getting an ABL facility in place. That was critical. I mean, this ABL facility is critical for us to the volume of cans that we're gonna need to buy. I mean, I think you can help the people on the call understand that, you know, last year one of the things we struggled with is, you know, we weren't able to sell disposables, the cans. You know, in terms of sourcing and selling them and making a decent margin on them, and that was a problem. You can't go into can printing and not have cans. The volume that this thing's gonna get out on the other end is, you know, in the tens of millions. I mean, that's a huge number. We had to line up cans. We had to make sure that we had a strong partner. We probably wanna make sure that we had the ability to meet the working capital needs of the company. As we went into the third quarter, we had a deal lined up. We thought it was gonna be a good deal. As we got deeper into the quarter, it turned out that there wasn't as good of a deal as we thought it was gonna be. There was some sliding there on what our expectations were. We ended up not getting the deal done in December and looked at a couple other opportunities. This felt like it was the best deal. This deal has no covenants in it. It's got no dilution provisions in it. On the face of it's what it is. Other deals where you have covenants, you can lose access to capital and have issues. This is a deal that's been built for a venture business opportunity. That's what we're facing with can printing. It's a venture. You know, it's a high return, big growth opportunity. As good as we are, as good as Tiffany is, the forecast team is we need some flexibility to make sure that we hit the ball out of the park. I want one pitch. I want many pitches, right? This is the structure that we needed to make sure that we got that done. But I think even down the road, we're all gonna be pleased with this. Looking back on this financially, I'm hopeful that we'll be, you know, happy with the choices that we made. Got you. Just to expand on that a little bit, could you share with us why there is a need for these warrants? Because, I mean, the interest rate is already high. I mean, if we just do a calculation like from a shareholder's point of view, if these warrants get exercised at [inaudible], there is potentially 10% dilution. I mean, is there any dilution at all if it gets exercised? I just want to understand that warrant and if it's together with this loan. Yeah. I mean, the thing that you have to think about when we went through the banking process here is that, as you know, every time you take a term or an item off the plate, you know, you change the cost of capital and the impact. In our case, you know, we have a handful of things. We have rate, interest rates, optionality, right? We have the warrant value that we can put in the package. We have other things that we could put in, like I said, the certain covenants. We could put in, you know, certain kinds of, you know, payment plans and terms and things like that. Then the last thing is that we still have a first lien facility with Live Oak. We have, you know, Bigger Capital in District 2, which has the second lien. We had to fit something in that meets all these other creditor requirements, right? The formula that works. What you'll see here is Pat Kilpatrick, you know, is really excited about the opportunity. He didn't want, you know, covenants. He wanted, you know, upside. He sees a huge opportunity with the product. I think I agree with him. This is the, you know, having to work with. I think we did a pretty good job pushing back in some areas. You know, as you know. This was not the best quarter for a small cap stock that are looking for capital, right? This is a quarter where we saw multiples come down everywhere. It's a pretty volatile, difficult time. So I think, you know, this was a better deal than we could have gotten if we would've, you know, gone out to a wider group. As you said before, Bjorn, I think that this is critical and the returns that we're gonna get specifically from these investments are gonna be unusually large. That's why I'm, you know, comfortable with the decision we made and we support making. Got you. I just got one last question before I jump into the queue. I think one thing I'd like to comment is right now we are clearly showing the financials of Craft and Spirit separately. As Craft, it's surprising to see the gross margins drop down to 10% from our three-year history, which is, you know, 20% EBITDA margin. Could you break down in detail like how this new digital printing can actually help to bridge this gap? Sure. You know, the thing that it's hard for people to see here, and I've said this on the last number of conference calls, is digital printing does not, you know, immediately hit people with what the opportunity is. I've tried anecdotally to share here. I think I might have mentioned this before, and I apologize if some people have heard this before. You know, if you go all the way back, you know, 10 years, actually more than that. About 10 years ago. It was 2011. You know, Coke attempted to go with a quasi-hyperlocal marketing strategy. You know, sales at Coke were down. Volume, they were facing some real challenges in their network worldwide, and they dreamed up the idea to come up with 250 names, individuals' names, and they started a campaign called Share a Coke. They picked the 250 most common names. You know, and why'd they pick 250? Because the way that they printed their cans, there's no way they could do more than that, right? There's no way they can get more variation than that. It's super expensive. The end result was Coke has turned around this volume. It's hugely successful. What they did compared to what we're about to unleash on Portland. Digital printing is the biggest transformation opportunities for small craft beverage guys. I mean, if you wanna ask for my opinion, my opinion on this is my personal goal is to get rid of and destroy crappy beer. We're gonna bring one of the best tools that's ever been invented to make small brewers bring their product and make the customer aware of what they can do. Again, this is gonna, you know, more directly answer your question. This past weekend, I bought a 6-pack, I'm sorry, a 4-pack, 4 beers for them in my local grocery store. When I walked in and I was looking at the price points, I was shocked. How in the world can these guys get away with $24. It was almost $24. You know, that's like $6 a beer at a grocery store. It's a craft. You probably never heard of it before. It's called Foreland. The label on this beer is a sticker that runs halfway around the can, and it's got at least, you know, a million colors on this label. It's an incredible work of art. The beer is just as good as the label is. The point of this is how that label stands out, that brand is elevated, and it's a very not well-known, you know, craft manufacturer in the area, yet they're able to win at retail and command a premium price point. It's nothing for a $6 product. It's nothing. You know, this tool is gonna transform beer. It's gonna transform cider, and it's gonna do it in one of the hottest, most creative markets in the United States, in Portland. That's why we kicked off. You know, that's why we'll work with a lot of other people to get involved with. It takes guts because Portland is full of super creative, outstanding manufacturers of all kinds of beverages, not just beer. I'm gonna bring a tool to these customers that's gonna destroy the competition. You know, by the time we're done, I'm going to bring the tool so that they can basically take Keystone's products that Anheuser-Busch makes out of the grocery store. I really believe strongly that this tool is gonna be transformational for our customer base. When they see it, and they see it working, and they get more creative with it's gonna be even more premium for it. We know it's happening because of the customer base that we have now. The customers that we used to have that have outgrown us have all come back and said they wanna work with us, right? We saw the same thing on can supply to get people to pick up the phone. You know, now we have a major can deal at incredible rates, right? We can go after businesses we weren't able to go after before. Bjorn, I really believe craft can is gonna be the point of the spear that's gonna reinvigorate this company, and it's gonna enhance and reward investors that believe in it. If we can execute this well, really, really big growth opportunity for the company. All right. Thanks, Geoffrey. I can see your confidence right here. You know, we've been following the company closely over the past year, and we went through the ups and downs together. I believe that right now we are on the cusp of really seeing this turn around. I just want to say that we appreciate the hard work from you and your team, and we will continue to support you in this journey ahead. Thanks, Geoffrey. Okay. Thanks, Bjorn. Our next question will come from Calvin Fuster with Tiger Global. Please go ahead. Hey, Geoffrey. I recognize you are doing so much within a short period of time, and I think all the shareholders can see that very clearly. You know, today, I think what's concerning in my mind is that we are going through a tightening monetary policy. We are battling persistent inflation. I did my math. It seems like we are still losing money, and the gap is quite wide for us to be self-funded, right? Especially breakeven. The balance sheet is already quite stretched right now. It was not too long ago. It was on 17th February 2022. You know, do you see any silver lining that suggests that this gap could be closed earlier since the previous call? Yes, I do. I mean, we can have some other members of the team, you know, share on this. You know, maybe Adrian or Andrew can talk a little bit about the outlook on spirits. Keep in mind, the fourth quarter is a seasonally weak quarter for us in both categories. I mean, spirits does have a bump in you know, as we get into November. Typically it's a lagging quarter and for that matter, as we start the year, it's a lagging quarter. The point that I made before, Joan, and I'll let you get there is when you go back and the comparison between what Craft and for that matter, Eastside income statements gonna look like this year versus last year. By the time we get to the end of the year, it won't even look the same. The margins won't look the same, the revenue growth won't look the same. You know, the success won't be the same. You know, we're really talking about a completely different business on for half of our business. Spirits, on the other hand, you know, as we said in the call, is a real, you know, work in progress. I mean, I think the biggest disappointment for me last year was we had outstanding products. I mean, our core Burnside products are phenomenal, bourbons. I mean, they're just really extraordinary. When you compare them to a Templeton, a crappy Canadian blended whiskey, right? That has no connection to Portland, and it does 20 x our volume, it's ridiculous, right? The challenge has been we've invested so much in chasing money-losing opportunities like Redneck Riviera, you know, trying to fix a so-so brand. It takes a while to get that organized. In struggling with that, you know, then we really lost the focus that we needed to basically go to market and make things work. The most critical part of that mistake was losing the focus of the distributor. You don't get that back, you know, from November to December, right? You just don't, you know, pick up the phone and say, "Hey, start selling my stuff again." You know, it takes time for you to engage them, make them aware, push, show them that you're investing. We just lost a lot of money investing in the Moda Center. We've launched a Burnside bar there, you know, at the Portland Trailblazers game last week. We opened it up and tasting and we're doing more of that. We're doing more engagement. You know, we've probably done more for local market funding and, you know, attacking the market we've had last year. Amy can probably jump in. Mm-hmm. Sure. Here in a second and share more about that. Just to finish on the gap, I believe you're already beginning to see some of the changes that we're exploring. We'll see the upcoming gap start to close. The big part, Craft starts really kicking in with this transformation plan is really beginning to take effect. Amy, you wanna share some thoughts on the outlook for 2022 on spirits? Sure. I mean, to Geoff's point, we have so much room to grow on distribution. You know, we have decent distribution on Portland Potato Vodka here in Oregon and, you know, retail, very, very low in the on-premise. Burnside, we have very low distribution even at retail, so that's a high priority for us. For Azuñia distribution in the core five states as well. As we, you know, engage the distributors and close those distribution gaps, you'll definitely see performance improving. Also, Geoff mentioned the great work that Jen is doing on the brand building activity. You know, we're very focused on our place of mass. You know, Moda Center and Trail Blazers for Burnside, Hood To Coast for PPG. That should make a really big difference. We also have, you know, a couple of new sales people, one in Oregon in the on-premise, and then one in Northern California, a few focused on Azuñia. Another, you know, exciting development for us in terms of our focus on gross margin management and some work. Joe Ibrahim in operations has done a lot of work working with us, Alvaro, to get the cost of the Azuñia liquid down and is now working on optimizing, you know, whiskey for Burnside. You'll definitely see an improvement in those as well. All right. Yeah. All right. I do have a second question. Yeah, I think we saw that the company has strengthened with some good hires recently, and I think the most important of it is the arrival of the first digital printer. Plus the second printer, how much does this change our business in terms of revenue and profitability? You know, one of the things that I'm thinking about is, can we apply the same pricing to even bigger customers as well? Because, you know, we don't really wanna sacrifice this deal, right? Right. Well, I don't have anything to say yet about the second printer, but if we did have a second printer, we would really be in a position to control the digital inkjet. As I said, I think on the last call, we know who the big movers are in this space. You know, there's a great startup company down in Austin, Texas, that we have a lot of respect for. They're amazing. You can see them on Instagram. It's fun to watch them build, you know, and power their customers build a digital thing. You know, there's other, two other printers that are in that space. Our goal is to absolutely control the digital inkjet like this. We're gonna do not just digital printing, but, you know, also move into other opportunities that to serve, you know, craft beverage. One of the things that we're doing is right now this is gonna largely serve our customer base and customers that we've touched before. You know, adding capability, adding capacity to do more just means we're gonna be able to reach out and get more and more customers. To your point, I would mention that we are the people that are decorating their cans have the feature to decorate their cans with a label like I talked about for the small, you know, brewery that, you know, goes with a super high-end label. They can decorate their cans with a shrink sleeve. If you do a shrink sleeve, you have to put the shrink sleeve on the can before they put the beer in it, usually because they heat up the shrink sleeve, and it messes up the beer. If it's a mess, you know, beer product and they have a shrink sleeve first and they put it through the can process, it has to be heated up to pasteurize. It can mess with the label. So there's a lot of logistical challenges, which means these cans, you ship them all over, you know, regionally and all over the United States. The last choice is to go to the major can producers like, you know, large Crown and some of the, you know, the others that we all know about. They print, and they can actually do printing the old-fashioned way with screen printing. What we've heard and what we've seen specifically with Ball is that they're kicking customers out who don't do 1 million cans plus SKU a year in volume. That basically means there's customers who are gonna have to figure out how to decorate their cans because they're not gonna be made anymore as decorated cans. That means they're not only losing the cans, they're probably losing. What we saw initially was we're gonna contact all the customers that can serve the customers in our market. Now it's realizing there are a lot bigger customers who we never really touched that have fallen down into our market because they have no other choices. If you're in that environment, you have the capability to command the margin that you need to get the returns you need. That's our, that's our you know plan. As I said before, and I would, you know, I'd like to say this to the wider group, is the bigger plan is to catch more volume and be more important to the customer, to give them more tools to win, to deliver a better product, something that improves their ability and working capital, to manage their own working capital at a lower pro-priced product because of the working capital savings. We think we can bring all those pieces together and sell the whole bag of tricks as opposed to just one. Craft Canning has been a one-trick pony, and then the pandemic pulled out a second trick, and it worked, and then it came back to what we saw before. This new company is completely different from what it's been in the past. You know? I do believe we're gonna be able to capture the margins. I do believe we're gonna be able to grow more than one, you know, business line SKU. I do believe that customer types, it's not gonna just be craft beer and brewers anymore. They're gonna be growing and growing categories. I think, you know, with success, you're gonna see more investment, more opportunity, more capacity and a bit of a different mix of the Midwest. All right. Great, great details. I'll just end with a simple remark. Back in 2019, Eastside Distilling acquired Azuñia for $15 million and Craft Canning for $5 million, right? That's about $20 million. Today, we have a market cap of $15 million plus our equity in Manatee and today's business. This is after we have performed rounds of capital raising. It's either the market cap or we are not getting something right. I hope it's the first case. Like you, I really want to believe that Eastside Distilling is finally making a strong comeback. You know, best of luck and we'll catch up soon. I'll step back to the call. Great. Thanks, Calvin. I think you know it's correct. I mean, it's time for the market to see results. We're gonna go. You're gonna see a different Eastside. My hope is that it comes you know out you know clear, and you can see the results you know quickly. We're gonna be only able to accelerate from there. Let's see how it goes. All right. Our next question will come from Harold Weber with Aegis Capital. Please go ahead. Hello. Hey, guys. Hi. How you doing? Good. I would like to get a little more color with the printer story. When is this gonna be producing at what you'd consider to be the regular run rate? Right. The printer is a whole system. Right. And, uh- When is this system gonna be up and running on it, not just on a pilot run, but being able to produce consistently quantities that were supposed to be, based on an 8,000 production basis? Next week. Okay. Next week. Based on the official rate, 25 million capacity a year, right? Well- $2 million a month. We don't go to $25 million in, you know, 1 week. Okay. That involves, you know, multiple shifts and the machine running pretty much, you know, three- Right. We've already scheduled our first customers. We have a number of schedules. I'd say, to me, a third of our customer base is already signed up to begin. We're scheduling them out. We have the Germans in our new facility, and they're finalizing the installation of the cans. It's the last step. I believe the alignment of the ink. You just take it to your own printer. You know, that's one of the old things you have to do before you're off and running and printing. Once that last step is gone and done, we're gonna queue the facility up with a ton of cans, and then we bought a bunch of cans. That ends up being a good deal because as the aluminum prices go up, we've already got, you know, cans ready to go. That's one variable that's out of the picture that we don't have to worry about. We're prepped and ready to go. You know, I think we'll start. We do know that this is a pretty complicated machine. We have a machine different from the machines that we deliver to North America, to other customers. We know that our machine has capabilities that other customers don't have. We were one of the few people we understand that spent a lot of time in Germany testing teams on our machine. We've done everything we possibly can do to prep this thing for a launch, you know, a few more points. I'm confident, you know, the team's confident. I think we have top gaming people in the game here, and I think we're gonna do a great job this quarter. How do we go from three initial customers that take all of training time initially to complete fullness, filling the schedule and moving to at least shift plan much earlier than we planned? I don't know. I mean, we will have to see how we go. The most important thing is what I said earlier. This is a tool that we're giving our customers a market advantage, and we want to make them successful. If we can make our customers who take this on successful immediately in many different ways, more than just printing incredible designs and having people get excited about it, working capital advantages. You know, tons of marks, shorter runs on their production. If we can make them successful in multiple ways, we're gonna be successful down the road. As much as everybody wants to hit the ground running and be printing out dollars left and right, the most critical piece to a lot of people winning on this, so. I understand. That's why I'm trying to get an idea of when you feel it's going to be up and running consistently. Absolutely. Okay. When do you think it's gonna be producing a commercial product? I understand the schedule of your shift is not. Mm-hmm. Is it gonna be running a full shift in the next four weeks? Sure. Okay. We're gonna be up and running. Yeah. Okay. According to that means based on your previous numbers, let's say use the $25 million number. That would be based on running three shifts, right? Yes. It has a percentage, you know, efficiency associated with it. I don't want to go into any more, a lot more detail of that, but we're basically, you know, running the machine to get to $25 million. There's capacities of more of how many onboard customers we wanna bring on, how many, you know, pilot cans we wanna do for them so they can see what it looks like, what the graphics are, how fast we do transitions between 16 ounces and 12 ounces. There's a lot of pieces to this that are more complicated to figure out how the actual number of cans are. I will tell you this. As I said in my script, I'm gonna keep you, Harold, very well updated, and everybody on the progress we're making inter-quarter on getting this piece up and going. There's two critical press releases to watch and report every quarter on this. We will update the market on the success we're having or lack of success we're having in getting this to go scale. You know, I expect it to be. Okay. Well, I'm pleased to hear that because, yes, waiting three months to get an update on this is really not satisfactory based on what we've been through. The question is, we talked about expanding distribution on the spirit side to the East Coast, and I wonder if you made any progress on that yet. Yes. We have talks with distribution on the East Coast. I think we may have. We've talked about this before. I'm looking back a number of years. One of the things that the people have to understand about the three-tier distribution system is the control the distribution has in spirits is pretty profound. If we learned anything on the Eastside, have an outstanding marketing team that have a great product in it. I mean, a product that really is unique and very hard to compete with. That's not enough to be successful in spirits. Believe it or not, that is not enough. We have to bring in and sell a sales partner in the form of a distributor. You can go with a small guy, and you can sell in a few places. You can try to go over the top and go with an online, you know, e-retailer, and you can have very limited spotty distribution and pay a ton of money in shipping. You can engage distributors to the local market and make that work. Now, the problem with that, and I'm getting to your answer. Mm-hmm. When you go into a liquor store, a craft store, I mean, particularly a liquor store, hundreds of brands. When you bring a brand to a market, typically what you're doing is you're bringing your brand in and you're taking a brand out. For example, in Oregon, we're gonna sell Pendleton. That's our goal. We're going to take them off the shelf. We're gonna take off Montelobos. We're gonna take that crappy vodka brand off the shelf. If I'm gonna go into the market on the East Coast, I gotta be ready to go to battle and take somebody out. I'm gonna tell you this, my best place to beat the shit out of these people, Harold, is in Portland. That's where we're gonna start. That's why I keep saying we're gonna. We didn't do that last year, right? We tried to do it more broadly. We tried to bring too much to market, and it was a weak effort. It was a really weak effort, and we got our butt kicked. In RDC, I was told, "Hey, you got your butt kicked." We're back, and we're gonna play this time like you've never seen inside paint. We're gonna do it in our home market. We're gonna kick the competition's butt, and we're gonna take them off the shelf. We're gonna do it with Moda. We're gonna do it with Trail Blazers. We're gonna do it with our 20 sales opportunities. If we can't get it done, we're gonna suck at it till we win in Portland. When we win in Portland, the people believe that we can fight and win, then we're gonna go to other markets, and we're gonna kick butt in other markets. We're gonna do it with great products, and we're gonna do it with very wise spending. That's the game plan now. I could try and spend a ton of money, Harold, now, and bring Burnside to market, and people would love it. The return on that investment could take too long to do what needs to be done for this company. I'm going to put that money into Craft, which I think meshes with the new strategy. The team believes this. The board believes it. It's time for the market to believe it. The way that you're gonna believe it is when you see our second quarter numbers, right? When you come to visit, which we're gonna do an investor day in Portland, and we're not gonna just focus on craft. You're gonna see the you know, Willy Wonka's chocolate factory and the big machine. We're gonna take you and show you where we're kicking people's butt in spirits. The team knows it. They've been put on notice. We're gonna show the success this summer, and I think our team's ready to prove on both sides of the ledger that we're done, you know, losing. We're gonna win, and we're gonna win this year. All of that sounds very fine, truly, but I still maintain that, I mean, you guys, you did a whole bunch of stuff months ago with so many other products on social media and generated a whole lot of buzz without anything. It cost you next to nothing. Those products sold out in 4 hours or 3 hours on the podcast. Okay. I maintain that you can do other social media stuff without spending a zillion dollars and getting some additional coverage. Coverage here. Okay. There's 40 million people over here. You got 2 million people over there. I tell you that there is a monstrous market for the distilled spirits over here. I believe that you guys I agree. are putting some effort into that and not banking on only kicking somebody else's butt at home. Okay? That doesn't mean you're successful, even if you do that. The key to success is to show you can do it elsewhere. Big deal if you're beating up a guy at home. That's some. You take that, oh, you're doing a great job. That just means you're doing okay. I think you need to be doing some of that over here. This is the number one market in America. Yes. Yep. Continuing to get to do hundreds of thousands of cases, we have to do that. That's correct. Hundreds of thousands of cases? We're doing 37- Let's see you. I mean, come on. I'm still waiting for that. I'm loving that. I'm sitting there waiting for years. Yeah. Forget about 100,000, hundreds of thousands of cases. Here- You didn't even sell 10,000. Yeah. Yeah, Harold, the reality is exactly that. You know, we're talking about 3,700 cases, right? And $26,500 in Oregon. All the booze is sitting there in Oregon. We ship it all the way to Connecticut. We're fighting with Proximo and Diageo, and they are huge companies. This is the whole problem with Redneck Riviera. That's why we got destroyed with Redneck Riviera. Okay. We're competing. That's not a premium product. We're out of that. How do we generate enthusiasm for our premium products? Yeah. I'm gonna go back to the playbook that made Pendleton successful and the one that made Tito's successful. They started in a home market and dominated it. People became passionate about it, and then they were introduced and asked to join a national stage, and they moved and took, you know, stole the table. The point, you can't go fight markets, only capitalize and believe that you're gonna win in spirits. Unless you got Kylie Jenner or someone. Right? We don't have that. We don't have that, you know, big push behind us. But I think we want that because it's huge, right? It's not authentic. Burnside is an authentic, Portland-based brand. It's outstanding. I think once you make this transition and have it working and controlling, we're gonna have an opportunity to come and do all of the marketing things going. I hope sooner rather than later, but let's see. Our next from Ross Taylor with ARS Investment Partners. Please go ahead. Thank you. Well, it's clear, Geoff, that your investors are hungry for traction in this process. I don't wanna draw it out a lot more here. I just kinda wanna get an understanding and a feeling. When you mentioned earlier in your prepared remarks that you were making progress, how close is that progress gonna happen at year-end to basically becoming a self-sustaining organization? If we execute on the plan that we have on the table here, we will be self-funded to the extent huge, very big investments in, you know, in our business, because I'm not saying we wouldn't do it. I'm gonna tell the, you know. I mean, I'm gonna basically tell you that if we execute the plan that's on the table today, right, we will be in the position that we've been talking about for two years this year, right? Which is generating enough cash to meet our own needs, right? That doesn't mean there's any cash, we're gonna do a lot of growth from here. I'm gonna tell you, once I can shorten that gap and get us to that point, then I would expect the market's gonna give me credit for it, give the company credit for it, and we're gonna be off to the capability to raise capital if we need to make ourselves grow much, much faster than even the growth you would see this year. You know, that's what I would say on that. Okay. I would say that I think that this company's always had really big vision, and it's never lived up to its vision. Before you start thinking about summiting K2, I would think about getting to the top of Mount Hood. I agree. Yes, I agree. Although Mount Hood's a pretty mean mountain. I'd go back to and use another anecdote, and I've probably used this before. Sergio Marchionne was sitting there, and I'm not in any way for Sergio Marchionne, but he was sitting there on a failed business before with Fiat and Chrysler. He laid out in front of of the investing community, "We're gonna take all the Jeep, all the crappy cars, the Chrysler cars that we produce, and we're gonna stop making them. We're gonna build Jeeps, and we're gonna export them to Europe, and we're gonna make a ton of money." Right? "We're gonna have this huge, you know, free cash flow capability." Analyst scoffed at him. I remember so simply he said, "The plan is on the paper. It's there. We have it. Execute the plan. All we have to do is execute the plan." I remember, you know, there was skepticism everywhere. On a very small scale, we're in the same boat. We have everything we need to execute a plan that's gonna surprise the market down the road. This little company in the couldn'ts could. It's up to the management team, the team on call, the ones that are not on the call, to execute the plan that's on the paper. When they do that, we're gonna have a great result. I agree, I think it's important to remember that, and you can hear it in the tone of this call. This call is a very different tone than any call I've sat on since I've been here for a long time. I think that's because people really want to see some traction. I mean, your passion is clear. You can listen to it, you can hear it. It's not hard to know that you really can see that you're gonna be successful in this. I'm just, you and I've had this conversation, I think successfully. We need to see this as a viable going entity. I live in Connecticut. I don't need to move back here just yet. I can find ways to be able to mail it to me. What I do need, and I think all of us on this call, is for it to start working. We need to get away from this fear that you're gonna wake up one day and there's gonna be an asterisk next to the name that says, A, there's another equity financing, or B, you've rolled over the top. I think that that's kinda where you're at. I think you've got a vision. Execute it, but execute it with velocity. I appreciate it, Ross. Yeah. Thanks. Our next question will come from Matt Campbell with Morgan Stanley. Please go ahead. Hey, Geoff. Yeah, hi. Thanks for taking the call. Can you hear me? Okay, cool. I'll make this brief. Just to summarize, you guys have been doing a lot of work underneath the water. It feels like a little duck that's paddling real hard, but we can't see the results yet. You know, the printer is now there. That's gonna give you guys some gasoline to move across the lake, sounds like. The spirits business margin now, because you've got a lot of those cost issues you've worked on. So whether it's a slower road or not, you're gonna have a better business outlook because the printing business looks like you have a lot of customers that are demanding it. They need it, and you're there for them. That's exciting. Like Ross said, you know, it's about, you know, it's about showing the opportunity. I love hearing that we're gonna see that, you know, come Q2 and you're gonna have an analyst day. I really applaud the fact that you guys what has been a long turnaround, but it feels like we're on good footing. Looking forward to the progress. Thank you for all you're doing. Well, that being said, I'm really hopeful that we are gonna be able to get a number of you guys out to Portland early summer. We can walk you through both businesses and you can see for yourself where we are and judge more for where we are versus where you expect us to be. I think we'll- This concludes our question and answer session. I'd like to turn the conference back over to Geoffrey Gwin for any closing remarks. Again, I wanna thank everybody for joining us for the call. You know, I will tell you, I am passionate about Eastside and passionate about the spirits that we have to sell, how we're gonna go to market and win, and I'm passionate about the transformation ahead. You know, it's hard to be in a stock that's struggled through so many difficulties like this company has. In fact, it's, I think there are times when I take a phone call from an investor and we talk about the company and the ultimate is kind of running joke of how many mistakes have been made along the way with this company. I think what I wanna say is if you think about this company and the challenge that we've had, you can start where it ends, which is where Tangle, you know, Network is. This company has a huge hole at the bottom of the balance sheet, and it looks like something that was LBO'd back in the 1990s. That to me is the most disappointing and motivating thing that's sitting there for me. This company deserves better and this leadership needs to take this company to a place where, you know, investors have over, you take risks with us and you get rewarded. We've laid out for you a plan to get us to a point where you're gonna be rewarded on both sides of our business. What I would encourage you to do is look at the balance sheet and then go back and re-note this. We are gonna break out the performance of the businesses. You're gonna watch them develop. There's gonna be no, you know, there's gonna be complete transparency about how it develops over the year. If you're successfully Craft that up to you. If spirits are outstanding and Craft is great, you will see. We'll be there and be held accountable from this point going forward on what happens at the bottom of the balance sheet, right? My goal is to fill in that hole, and I think I can do it with the team that we have and the opportunity that we have. This company has been invested with a lot of capital. Some of the investors on this call today, last year, net... More money and enhance the returns of the company. You know, I encourage you to stay engaged. You know, reach out. In May. We don't have a lot of time between now and the first quarter call, but we'll have more on Sam's Fund in April. Early May, we'll be able to put results. With that, I wanna thank you again for taking the time to talk this tonight, and I'll talk soon. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.