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

Item 1.01 Entry into a Material Definitive Agreement

On December 30, 2016, Eastside Distilling, Inc. (the
Company),closed a private placement in which it issued an
aggregate of 800,000 units (the Units) at a per unit price of
$1.30, each Unit consisting of one share of the Companys common
stock, par value $0.0001 (the Common Stock) and a three-year
warrant to acquire one share of the Companys Common Stock at an
exercise price of $2.50 per share. The Units were sold to 30
accredited investors for aggregate gross cash proceeds of
$1,040,000 to separate Subscription Agreements entered into with
each investor (the Subscription Agreements).The Company intends
to use the net proceeds of the financing for inventory purchases
and for working capital and general corporate purposes. The
Company conducted the best efforts financing without the
assistance of any underwriter, placement agent or selling agent.

Each investor also entered into a Registration Rights Agreement
with the Company under which the Company is obligated to file a
registration statement with the Securities and Exchange
Commission registering the Common Stock and shares of Common
Stock underlying the Warrants as soon as reasonably practicable
following the closing of the financing.

The foregoing descriptions of the Warrants, the Subscription
Agreement and the Registration Rights Agreement are qualified in
their entirety by reference to the full text of the forms of
Warrant, Subscription Agreement and Registration Rights Agreement
filed herewith as Items 4.1, 10.1 and 10.2, respectively.

Item 3.02 Unregistered Sales of Equity
Securities.

The shares of Common Stock and Warrants sold in the Units
Offering described in Item 1.01 above were not registered under
the Securities Act of 1933, as amended (the Securities Act), or
the securities laws of any state, and were offered and sold in
reliance on the exemption from registration afforded by Section
4(a)(2) and Rule 506(b) of Regulation D promulgated under the
Securities Act, which exempt transactions by an issuer not
involving any public offering. The investors are accredited
investors as such term is defined in Regulation D.The securities
are non-transferable in the absence of an effective registration
statement under the Act or an available exemption therefrom, and
all certificates are imprinted with a restrictive legend to that
effect.

Effective December 30, 2016, the Company issued 428,846 shares of
its Common Stock to five accredited investors upon exercise of
outstanding warrants, raising $557,499.70 in cash proceeds. The
warrants original exercise price of $2.00 per share had been
temporarily reduced to $1.30 per share through December 31, 2016
to induce holders to exercise their outstanding warrants. The
issuance was exempt to Section 4(a)(2) of the Securities Act. The
securities are non-transferable in the absence of an effective
registration statement under the Securities Act or an available
exemption therefrom, and all certificates are imprinted with a
restrictive legend to that effect.

Effective December 30, 2016, the Company issued 886,538 shares of
its Common Stock to 10 accredited investors upon exercise of
outstanding warrants in exchange for principal reduction in the
Companys outstanding promissory notes issued to investors between
June 2016 and October 2016. The warrant exercise resulted in a
reduction in the principal amount of promissory notes of
$1,152,498.90. The warrants original exercise price of $2.00 per
share had been temporarily reduced to $1.30 per share through
December 31, 2016 to induce holders to exercise their outstanding
warrants. The securities are non-transferable in the absence of
an effective registration statement under the Act or an available
exemption therefrom, and all certificates are imprinted with a
restrictive legend to that effect.

Item 9.01 Financial Statements and Exhibits

(d)Exhibits

4.01Form of Warrant

10.1Form of Subscription Agreement

10.2Form of Registration Rights Agreement

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 1.80 with 850 shares trading hands.