EASTSIDE DISTILLING, INC. (OTCMKTS:ESDI) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01

Acquisition Agreement

On March 8, 2017, Eastside Distilling, Inc., a Nevada corporation
(the Company) entered into that certain Purchase and Assignment
of Membership Interests, Assumption of Obligations, Agreement to
be Bound by Limited Liability Company Agreement and Admission of
Substituted Member (the Acquisition Agreement),
with Allen Barteld (Mr. Barteld), the sole member and the manager
of Motherlode, LLC, an Oregon limited liability company
(Motherlode) and Motherlode. Under the terms of the Acquisition
Agreement, the Company agreed to acquire from Mr. Barteld all of
the membership interests in Motherlode in exchange for 260,000
shares of the Companys common stock (the Acquisition). The
Acquisition Agreement does not provide for any post-closing
adjustments of the consideration paid.

Motherlode owns and operates a distillery bottling business in
the greater Portland, Oregon area.

The Acquisition Agreement contains customary representations and
warranties as to, among other things: the organization, good
standing, and qualifications to conduct the business of the
Company, Mr. Bartelds power and authority to transfer the
membership interests; the valid and marketable title of the
membership interests free and clear of all liens; the Companys
authorization to issue the common stock; and compliance with
applicable laws, as well as cross-indemnification provisions for
losses (as defined in the Acquisition Agreement) arising out of,
resulting from, or in connection with any breach of any
representation, warranty, covenant or obligation made by the
party in the Acquisition Agreement or other documents entered
into or delivered in connection with the transactions
contemplated by the Acquisition Agreement. Neither the Company
nor Mr. Barteld may unilaterally terminate the Acquisition
Agreement other than in the event the other party is in material
breach of the representations, warranties, covenants or
obligations set forth in the Acquisition Agreement, subject to a
20-day cure period. The Acquisition Agreement may be terminated
by mutual consent of the parties.

The Acquisition was closed concurrently with the execution of the
Acquisition Agreement on March 8, 2017.

A copy of the Acquisition Agreement is incorporated herein by
reference and is filed as an exhibit to this Form 8-K. The
description of the transactions contemplated by the Acquisition
Agreement set forth herein does not purport to be complete and is
qualified in its entirety by reference to the full text of the
exhibit filed herewith and incorporated by this reference.

Employment Agreement

In connection with the Acquisition, on March 8, 2017, the Company
entered into a three-year employment agreement with Mr. Barteld.
Under the terms of the employment agreement, Mr. Barteld will be
employed as the President and Chief Executive Officer of
Motherlode, and will continue to serve as its manager. Mr.
Barteld will initially be paid an annual base salary of $85,000,
subject to review from time to time by the Companys Compensation
Committee. Upon the earlier of December 31, 2017 or the closing
of a registered public offering of the Companys common stock that
results in net proceeds to the Company of at least $3,000,000,
Mr. Bartelds base salary will be increased to $120,000 per year,
subject to review from time to time by the Compensation
Committee. The employment agreement further provides that Mr.
Barteld is eligible to participate in the Companys annual bonus
plan, the actual payment of which will be determined based upon a
combination of Company results and individual performance against
applicable performance goals fixed by the Compensation Committee.

In addition to salary and bonuses as summarized above, the
employment agreement provides that Mr. Barteld is eligible to
participate in employee benefits plans as the Company may
institute from time to time at the discretion of the Companys
Compensation Committee. Initially, at the next meeting of the
Compensation Committee, upon recommendation of management, he
will be granted 250,000 options under the Companys 2016 Equity
Incentive Plan, which options will vest quarterly over a
five-year period, at an exercise price equal to the closing price
of the Companys common stock on the date of grant.

In the event Mr. Bartelds employment is terminated without cause
(as defined in the employment agreement) or if he resigns for
good reason (as defined in the employment agreement, then he will
receive, in addition to any compensation otherwise due to him,
payment of his then base salary and continuation of his benefits
for six months following the termination. Mr. Barteld may not
resign for good reason without first providing the Company with
written notice of the acts or omissions constituting the grounds
for good reason within 90 days of the initial existence of such
grounds, and a reasonable cure period of at least 30 days. If his
employment is terminated voluntarily, due to death or disability
or is terminated for cause (as defined in the employment
agreement), all vesting of equity grants and awards will
immediately cease and only routine compensation provided in the
employment agreement will be due.

Any amounts payable under the employment agreement are subject to
any policy (whether currently in existence or later adopted)
established by the Company providing for clawback or recovery of
amounts that were paid to Mr. Barteld. The Company will make any
determination for such clawback or recovery in its sole
discretion and in accordance with any applicable law or
regulation.

Finally, Mr. Barteld is subject to confidentiality, non-compete
and non-solicitation restrictions.

A copy of the Employment Agreement is incorporated herein by
reference and is filed as an exhibit to this Form 8-K. The
description of the transactions contemplated by the Employment
Agreement set forth herein does not purport to be complete and is
qualified in its entirety by reference to the full text of the
exhibit filed herewith and incorporated by this reference.

On March 14, 2017, the Company issued a press release announcing
the Acquisition. A copy of the press release is furnished as
Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished to this Item 7.01, including Exhibit
99.1 hereto, shall not be deemed filed for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section. The
information in Item 7.01 of this Current Report on Form 8-K shall
not be incorporated by reference into any registration statement
or other document to the Section Act, except as expressly stated
in such filing.

About EASTSIDE DISTILLING, INC. (OTCMKTS:ESDI)

Eastside Distilling, Inc. (Eastside) is a manufacturer, developer, producer and marketer of master-crafted spirits. The Company’s beverage alcohol categories include bourbon, whiskey, rum and vodka. The Company operates through the marketing and distributing of hand-crafted spirits segment. Its brands include Burnside Bourbon, Burnside Oregon Oaked Bourbon, Barrel Hitch American Whiskey, Barrel Hitch Oregon Oak American Whiskey, Below Deck Silver Rum, Below Deck Ginger Rum, Below Deck Coffee Rum, Below Deck Spiced Rum, Portland Potato Vodka, Marionberry Whiskey and Cherry Bomb Whiskey. Eastside creates seasonal and limited edition handmade products, such as Advocaat (eggnog) Liqueur, Peppermint Bark Liqueur, Bier Schnapps and Holiday Spiced Liqueur. Eastside distributes its products in approximately 15 states, including Oregon, Washington, Nevada, Texas, Virginia, Indiana, Illinois, New York, New Jersey, Massachusetts, Connecticut, Minnesota, Georgia, Pennsylvania and Maryland.

EASTSIDE DISTILLING, INC. (OTCMKTS:ESDI) Recent Trading Information

EASTSIDE DISTILLING, INC. (OTCMKTS:ESDI) closed its last trading session 00.00 at 1.50 with 660 shares trading hands.