What changed in this filing

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Item 1A. Risk Factors

2023-03-28 compared with 2022-03-29 · 66 added, 96 removed, 244 unchanged (40% of the section changed)

16 unchanged sentences

Vineyards in the United States, including some in Oregon and some

owned by us, have been infested in recent years with phylloxera.

owned by us, have been infested with phylloxera.

In particular, Tualatin Estate Vineyards have phylloxera.

be no assurance that the Companys existing vineyards, or the rootstocks the Company is now using in its planting programs, will

not become susceptible to current or new strains of phylloxera or that the phylloxera present at the Tualatin Vineyards will not spread

to our other vineyards.

There can be no assurance

that the Companys existing vineyards, or the rootstocks the Company is now using in its planting programs, will not become susceptible

to current or new strains of phylloxera or that the phylloxera present at the Tualatin Vineyards will not spread to our other vineyards.

Pierces Disease is a vine bacterial disease.

It kills grapevines and there is no known cure.

Small insects

called Sharpshooters spread this disease.

A new strain of the Sharpshooter was discovered in Southern California and is believed to be

migrating north.

The Company is actively supporting the efforts of the agricultural industry to control this pest and is making every

reasonable effort to prevent an infestation in its own vineyards.

The Company cannot, however, guarantee that it will succeed in preventing

contamination in its vineyards.

Additionally, any future government restrictions created in connection with government attempts to combat

phylloxera, GRBV or other pests or viruses may increase vineyard costs and/or reduce production.

Small insects called Sharpshooters

spread this disease.

A new strain of the Sharpshooter was discovered in Southern California and is believed to be migrating north.

Company is actively supporting the efforts of the agricultural industry to control this pest and is making every reasonable effort to

prevent an infestation in its own vineyards.

The Company cannot, however, guarantee that it will succeed in preventing contamination

in its vineyards.

Additionally, any future government restrictions created in connection with government attempts to combat phylloxera,

GRBV or other pests or viruses may increase vineyard costs and/or reduce production.

operations are susceptible to changing weather patterns and other environmental factors

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harvest of grapes at our vineyards and/or the other vineyards that supply us with grapes for our wine.

In particular, Oregons

Willamette Valley has an unpredictable rainfall pattern particularly in early autumn.

If significantly above-average rains occur just

prior to the autumn grape harvest, the quality of harvested grapes is often materially diminished, thereby affecting that years

wine quality.

In particular, Oregons Willamette

Valley has an unpredictable rainfall pattern particularly in early autumn.

If significantly above-average rains occur just prior to the

autumn grape harvest, the quality of harvested grapes is often materially diminished, thereby affecting that years wine quality.

Additionally,

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Bernau, our President and Chief Executive Officer, John Ferry, our Chief Financial

Officer and Christine Clair, our Winery Director could harm the Company and its reputation and negatively impact its profitability, particularly

if one or more of the Companys key employees resigns to join a competitor or to form a competing company.

Officer and Joe Padilla, our Chief Operating Officer could harm the Company and its reputation and negatively impact its profitability,

particularly if one or more of the Companys key employees resigns to join a competitor or to form a competing company.

Companys ability to operate requires adequate funding

Companys cash flow from operations historically has not been sufficient to provide all funds necessary for the Companys

The Company has entered into a line of credit agreement to provide such funds and entered into term loan arrangements, the

proceeds of which were used to acquire the Tualatin Winery and the Tualatin Vineyards, construct and remodel the Hospitality Center and

pay down the Companys revolving line of credit.

There is no assurance that the Company will be able to comply with all conditions

under its credit facilities in the future or that the amount available under its line of credit facility or capital raises will be adequate

for the Companys future needs.

Failure to comply with all conditions of the credit facilities, or to have sufficient funds for

operations could adversely affect the Companys results of operations and shareholder value.

of December 31, 2021, the Companys outstanding long-term debt was approximately $5.5 million but it did not have any outstanding

borrowings under its lines of credit.

Additionally, the Company had notes payable to private parties of approximately $1.3 million as

of December 31, 2021.

Companys cash flow from operations historically has not been sufficient to provide all funds necessary for the Companys operations.

The Company has entered into a line of credit agreement to provide such funds and entered into term loan arrangements.

There is no assurance

that the Company will be able to comply with all conditions under its credit facilities in the future or that the amount available under

its line of credit facility or capital raises will be adequate for the Companys future needs.

Failure to comply with all conditions

of the credit facilities, or to have sufficient funds for operations could adversely affect the Companys results of operations

and shareholder value.

of December 31, 2022, the Companys outstanding long-term debt was approximately $7.1 million and $0.2 million under its short term

line of credit.

Additionally, the Company had notes payable to private parties of approximately $1.2 million as of December 31, 2022.

of being a publicly-held company may put the Company at a competitive disadvantage

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Bureau (TTB), of the United States Department of the Treasury, based on distinguishable geographic features.

wine industry has historically embraced higher standards for wine production than those established by the federal government and other

As a result, wines from Oregon AVAs, and specifically the Willamette Valley AVA, have achieved recognition for their quality

against other wines in their class.

The Oregon wine

industry has historically embraced higher standards for wine production than those established by the federal government and other states.

As a result, wines from Oregon AVAs, and specifically the Willamette Valley AVA, have achieved recognition for their quality against

other wines in their class.

As a result, these wines are often sold at a higher price point than wines not produced in Oregon.

Because of this recognition, out of state competitors have used Oregon AVAs on bottles and packaging claiming its use as fanciful marketing.

of this recognition, out of state competitors have used Oregon AVAs on bottles and packaging claiming its use as fanciful marketing.

Such use, inappropriate or otherwise, could have a dilutive effect on the prestige of Oregon AVAs and ultimately the prices that can

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a substantial portion of the Companys net revenue in the future.

A change in the relationship with any of the Companys

significant distributors could harm the Companys business and reduce Company sales.

The laws and regulations of several states

prohibit changes of distributors, except under certain limited circumstances, making it difficult to terminate a distributor for poor

performance without reasonable cause, as defined by applicable statutes.

Any difficulty or inability to replace distributors, poor performance

of the Companys major distributors or the Companys inability to collect accounts receivable from its major distributors

could harm the Companys business.

There can be no assurance that the distributors and retailers the Company uses will continue

to purchase the Companys products or provide Company products with adequate levels of promotional support.

Consolidation at the

retail tier, among club and chain grocery stores in particular, can be expected to heighten competitive pressure to increase marketing

and sales spending or constrain or reduce prices.

A change in the relationship with any of the Companys significant

distributors could harm the Companys business and reduce Company sales.

The laws and regulations of several states prohibit changes

of distributors, except under certain limited circumstances, making it difficult to terminate a distributor for poor performance without

reasonable cause, as defined by applicable statutes.

Any difficulty or inability to replace distributors, poor performance of the Companys

major distributors or the Companys inability to collect accounts receivable from its major distributors could harm the Companys

There can be no assurance that the distributors and retailers the Company uses will continue to purchase the Companys

products or provide Company products with adequate levels of promotional support.

Consolidation at the retail tier, among club and chain

grocery stores in particular, can be expected to heighten competitive pressure to increase marketing and sales spending or constrain

or reduce prices.

of the Willamette Valley Vineyards and Willamette trademarks could adversely affect the Companys distinction

within the AVA

Company has long held the federal trademarks Willamette Valley Vineyards and Willamette as used in its wine

Company has long held the federal trademarks Willamette Valley Vineyards and Willamette as used in its wine brands.

While it is lawful for wine producers meeting the federal and state requirements to list the American Viticultural Area Willamette

1 unchanged sentence

trademarks on any unauthorized use as a wine brand.

These trademarks have been challenged and, should the Company lose this challenge

or future challenges, the Company could lose a competitive advantage.

in quantity and quality of grape supply could adversely affect the Company

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and the number of vines producing grapes.

Any shortage in the Companys grape production could cause a reduction in the amount

of wine the Company is able to produce, which could reduce sales and adversely impact the Companys results from operations.

Any shortage in the Companys grape production could cause a reduction in the amount of

wine the Company is able to produce, which could reduce sales and adversely impact the Companys results from operations.

that reduce the quantity of the Companys grapes may also reduce their quality, which in turn could reduce the quality or amount

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foreign agencies, state liquor authorities, such as the Oregon Liquor Control Commission (OLCC), and local authorities.

These regulations and laws dictate such matters as licensing requirements, trade and pricing practices, permitted distribution channels,

permitted and required labeling, and advertising and relations with wholesalers and retailers.

Any expansion of the Companys existing

facilities or development of new vineyards or wineries may be limited by present and future zoning ordinances, environmental restrictions

and other legal requirements.

In addition, new regulations or requirements or increases in excise taxes, income taxes, property and sales

taxes or international tariffs, could negatively affect the Companys financial condition or results of operations.

Recently, many

states have considered proposals to increase, and some of these states have increased, state alcohol excise taxes.

Additionally, many

states have revised, or are revising, statutes that broaden the definition of nexus to increase tax revenue from out of state businesses.

regulations and laws dictate such matters as licensing requirements, trade, and pricing practices, permitted distribution channels, permitted

and required labeling, and advertising and relations with wholesalers and retailers.

Any expansion of the Companys existing facilities

or development of new vineyards or wineries may be limited by present and future zoning ordinances, environmental restrictions, and other

legal requirements.

In addition, new regulations or requirements or increases in excise taxes, income taxes, property and sales taxes

or international tariffs, could negatively affect the Companys financial condition or results of operations.

Recently, many states

have considered proposals to increase, and some of these states have increased, state alcohol excise taxes.

Additionally, many states

have revised, or are revising, statutes that broaden the definition of nexus to increase tax revenue from out of state businesses.

or revised regulations, or increased licensing fees, requirements or taxes could have a material adverse effect on the Companys

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Companys common stock is thinly traded, and therefore not as liquid as other investments.

trading volume of the Companys common stock on NASDAQ is consistently thin, in that there is not a great deal of

trading activity on a daily basis.

Because the average active trading volume is thin, there is less opportunity for shareholders to sell

their shares of the Companys common stock on the open market, resulting in the common stock being less liquid than common stock

in other publicly traded companies.

trading volume of the Companys common stock on NASDAQ is consistently thin, in that there is not a great deal of trading

activity on a daily basis.

Because the average active trading volume is thin, there is less opportunity for shareholders to sell their

shares of the Companys common stock on the open market, resulting in the common stock being less liquid than common stock in other

publicly traded companies.

Company may face liabilities associated with the offer and sale of our preferred stock.

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The Board may implement other changes that further limit the potential for tender offers or takeover attempts.

COVID-19 pandemic could adversely affect our financial results, operations and outlook for an extended period of time.

COVID-19 pandemic has been declared a National Public Health Emergency in the United States, and on March 8, 2020, Oregon Governor Kate

Brown declared a state of emergency to address the spread of COVID-19 in Oregon.

The outbreak in Oregon and other parts of the United

States, as well as the response to COVID-19 by federal, state and local governments could have a continued material adverse impact on

economic and market conditions in the United States, which may negatively affect our business and operations.

Although the administration

of vaccines in Oregon and throughout the United States contributed to the lifting of most restrictive measures, there remains ongoing

uncertainty about the impact of COVID-19 variations on infection levels.

The re-emergence of significant increases in infection rates

could result in governments re-imposing restrictive measures that could reduce or impair economic activity.

Consequently, the COVID-19

pandemic and the government responses to the outbreak presents continued uncertainty and risk with respect to the Company and its performance

and financial results.

have not yet experienced significant disruptions to our supply chain network;

however, any future restrictions imposed by our local or

state governments may have a negative impact on our future direct to consumer sales.

In response to the previous closure of, and capacity

restrictions in, our tasting rooms, the Company launched curbside pick-ups, and complimentary shipping specials with minimum purchase,

which were able to more than offset the expected declines in direct to consumer sales.

Additionally,

the demand for the Companys wine sold directly or through distributors to restaurants, bars, and other hospitality locations could

be reduced in the near-term due to the re-imposition of orders from state and local governments restricting consumers from visiting,

as well as in some cases the temporary closure of such establishments.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors