SECURED CREDIT FACILITIES

12 Months Ended

Dec. 31, 2025

Secured Credit Facilities

SECURED CREDIT FACILITIES

16. SECURED CREDIT FACILITIES

Secured credit facilities consisted of the following as of December 31:

(Dollars in thousands)	2025		2024
Purchase agreement	$	-	$	1,938
Side letter		-		448
Senior secured debentures		-		3,600
Total		-		5,986
Accrued interest		-		199
Debt issuance costs		-		(1,719	)
Total secured credit facilities, net	$	-	$	4,466

Purchase Agreement

On November 14, 2024, the Company sold $1.9 million in aggregate principal amount of Senior Secured Notes (the “Notes”) and Pre-Funded Warrants to purchase a total of 36,360 shares of common stock for total net proceeds of $1.6 million in a private placement offering. As of December 31, 2024, unamortized debt issuance costs were $0.7 million. As of December 31, 2025, they were fully amortized.

The Notes had a maturity date of 120 days from issuance, were issued with a 20% original issue discount and did not bear interest unless and until one or more of the customary events of default set forth therein occurred, whereupon each Note would bear interest at a rate of 18% per annum. If the Note remained outstanding as of May 14, 2025, the Note also required a special one-time interest payment of 30% which would increase the principal of each Note accordingly. Upon the occurrence of an event of default, each Investor also had the right to require the Company to pay all or any portion of the Note at a 25% premium. Further, the Company was required to prepay the Notes in connection with certain sales of securities or assets at each Investor’s election in an amount equal to 35% of the gross proceeds from such sales. The Company also had the right to prepay all, but not less than all, of the outstanding amounts under the Notes, at its election. The Notes contained certain restrictive covenants, including covenants precluding the Company and its subsidiaries from incurring indebtedness, transferring assets, changing the nature of its business, and engaging in certain other actions, subject to certain exceptions.

In March 2025, the Company and certain of the holders agreed to an extension of the maturity date to April 14, 2025 in exchange for an increase to the principal of the notes by 10%, and two lenders were each paid their principal balance plus 2.5% interest of $0.3 million. On April 14, 2025, the Company and the remaining Note holders entered into an agreement for a second extension to May 14, 2025 for an additional payment in an amount equal to 5% of the outstanding principal of the applicable Notes.

On May 12, 2025, the Company entered into an agreement with two Note holders to extend the maturity date to August 14, 2025. On June 26, 2025, the Company amended $0.5 million of the Notes by making them convertible into shares of the Company’s common stock at a conversion price of $1.32 per share. These Notes were subsequently converted to common stock at the fair of common stock and therefore no gain or loss on the conversion, see Note 18 – Stockholders’ Equity. Additionally, these same lenders extinguished an extension fee of $0.1 million.

On May 14, 2025, the Company entered into an agreement with the two other Note holders to extend the maturity date of each Note to May 26, 2025 after the Company paid 50% of the outstanding principal balance of $0.5 million. In June 2025, the Company repaid the remaining the balance of $0.5 million.

The Company also entered in three forms of side letters in 2024 with the investors which (i) permitted one investor which along with an affiliate invested $0.4 million to exchange that amount of stated value of shares of Series F Preferred Stock (the “Series F”) for a $0.4 million 120-day promissory note to another affiliate, which note was issued immediately prior to the closing of the applicable offering and has substantially identical terms to the Notes issued therein, except it is subordinated with respect to its security interest, (ii) permitted two investors to convert Series D Preferred Stock beginning on April 7, 2025, see Note 18 – Stockholders’ Equity, and (iii) permitted two investors to receive a number of shares of Series F equal to 50% of their investment amount, or $0.1 million each, using the stated value of the Series F, which is $0.50 per share, to determine the number of shares of Series F. As of December 31, 2024, unamortized debt issuance costs related to the side letters were $0.4 million. As of December 31, 2025, debt issuance costs related to the side letters were fully amortized.

On June 26, 2025, the Company amended the 120-day promissory note of $0.4 million by making it convertible into shares of the Company’s common stock at a conversion price of $1.32 per share. This note was subsequently converted to common stock, see Note 18 - Stockholders’ Equity.

Senior secured debentures

During 2024, Beeline Financial issued senior secured debentures of $3.6 million maturing September 5, 2025 with payments made in nine equal monthly installments of $0.4 million beginning January 2025. During September 2025, the principal balance and accrued interest was fully repaid. As of December 31, 2024, the principal balance was $3.6 million, unamortized debt discount costs were $0.6 million, and accrued interest was $0.2 million. As of December 31, 2025, the debt discount was fully amortized.

2024 Secured Notes

On May 15, 2024, Eastside entered into a Loan Agreement with the SPV, Aegis, Bigger, District 2, and LDI and purchased from the Company promissory notes in the aggregate principal amount of $1.1 million. Subsequently in 2024, these notes were exchanged as part of the Debt Exchange Agreement, further described above in Note 5 - Debt Exchange Agreement.

With each 2024 Secured Note, Eastside issued Warrants to purchase a share of Eastside’s common stock for $50.00 exercisable for five years after December 2, 2024 if on November 29, 2024 the 2024 Secured Note issued to the Warrant-holder remained unsatisfied. LDI received a Warrant to purchase 59,802 shares and each of Bigger and District 2 received a Warrant to purchase 29,901 shares resulting in a debt discount of $0.3 million, which were subsequently forgiven as part of the Debt Exchange Agreement and recorded to troubled debt restructuring in the consolidated statements of operations.

The Loan Agreement provided that if the 2024 Secured Notes had not been satisfied by November 29, 2024, then until March 31, 2025 each of the Subscribers would have the right to purchase a “Kicker Note” in the amount of $0.5 million for LDI or $0.3 million for each of Bigger and District 2 by surrendering debt or equity instruments specified in the Loan Agreement. The Kicker Notes did not bear interest, and could be satisfied by payment of their principal amounts on or before March 31, 2026.

Eastside’s obligations under the 2024 Secured Notes and the Kicker Notes (collectively, the “2024 Notes”) were secured by Eastside’s pledge of its assets, subject to certain specified exceptions. In connection with the Loan Agreement, Eastside, Aegis, Bigger and District 2 amended and restated the Intercreditor Agreement they had executed on September 29, 2023. In the Amended and Restated Intercreditor Agreement, Aegis, Bigger and District 2 subordinate their liens on any barrels of spirits owned by Eastside, and the parties agree that the net proceeds of any sale of barrels will be paid to the Subscribers in satisfaction of the 2024 Notes. Commencing when all barrels have been sold, the lien of the Subscribers under the 2024 Notes would become pari passu with the senior lien on the remaining collateral.

Subsequently in 2024, these notes were exchanged as part of the Debt Exchange Agreement, further described above in Note 5 - Debt Exchange Agreement.

6% Secured Convertible Promissory Notes

On April 19, 2021, Eastside entered into a securities purchase agreement (“Purchase Agreement”) with accredited investors (“Subscribers”) for their purchase of up to $3.3 million of principal amount of 6% secured convertible promissory notes (“Note” or “Notes”). On September 29, 2023, Eastside entered into a debt satisfaction agreement with the Subscribers and other creditors, pursuant to which principal and interest on the Notes of $3.3 million was exchanged for equity issued to the SPV, in which the Subscribers held a 50% ownership interest, and the Notes were then amended and restated. Subsequently in 2024, these notes were further converted or exchanged as part of the Debt Exchange Agreement, further described above in Note 5 - Debt Exchange Agreement.

Secured Credit Facilities – Related Party

On October 7, 2022, Eastside entered into a Note Purchase Agreement dated as of October 6, 2022 with Aegis. Pursuant to the Note Purchase Agreement, Aegis purchased from Eastside a secured promissory note in the principal amount of $4.5 million (the “Aegis Note”). Aegis paid for the Aegis Note by paying $3.3 million to TQLA LLC to fully satisfy a secured line of credit promissory note that Eastside issued to TQLA on March 21, 2022; and the remaining $1.2 million was paid in cash to Eastside. The Aegis Note bore interest at 9.25% per annum, payable every three months. The principal amount of the Aegis Note was payable on March 31, 2025. Eastside pledged substantially all of its assets to secure its obligations to Aegis under the Aegis Note.

On September 29, 2023, Eastside entered into a Debt Satisfaction Agreement with Aegis and other creditors, pursuant to which the Aegis Note was amended and restated. Principal and interest of $1.9 million were exchanged for equity issued to the SPV, in which Aegis held a 29% interest. Subsequently in 2024, these notes were further converted or exchanged as part of the Debt Exchange Agreement, further described above in Note 5 - Debt Exchange Agreement.