What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2023-03-28 compared with 2022-03-29 · 158 added, 189 removed, 233 unchanged (60% of the section changed)

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Companys common stock is traded on the NASDAQ Capital Market under the symbol WVVI.

of December 31, 2021, the Company had approximately 2,146 common stock shareholders of record.

As some of our shares of common stock

are held in street name by brokers on behalf of shareholders, we are unable to estimate the total number of beneficial

holders of our common stock represented by these record holders.

of March 28, 2023, the Company had approximately 2,115 common stock shareholders of record.

As some of our shares of common stock are

held in street name by brokers on behalf of shareholders, we are unable to estimate the total number of beneficial holders

of our common stock represented by these record holders.

Company has paid dividends on the Preferred Stock.

The Company has not paid any dividends on its Common Stock, and the Company does not

anticipate paying any dividends in the foreseeable future.

The Company intends to use its earnings to expand its vineyards, winemaking

and customer service facilities.

anticipate paying any dividends on Common Stock in the foreseeable future.

The Company intends to use its earnings to expand its vineyards,

winemaking, and customer service facilities.

Compensation Plans

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statements contained in this report, see Item 1 of Part I, Business – Forward-Looking Statements.

our significant accounting policies are described in more detail in Note 1 to our audited financial statements, we believe the following

accounting policies are those most critical to the judgements and estimates used in the preparation of our financial statements.

our significant accounting policies are described in more detail in Note 1 to our financial statements, we believe the following accounting

policies are those most critical to the judgements and estimates used in the preparation of our financial statements.

Accounting Policies and Estimates

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provide primarily 30-day terms and, to a limited extent, 45-day, 60-day, or longer terms for some international wholesalers.

from items sold through the Companys retail locations are recognized at the time of sale.

through the Companys tasting rooms are recognized at the point of sales.

Sales through the internet and wine club sales are recognized

when the product has shipped to the customer.

Company pays depletion allowances to the Companys distributors based on their sales to their customers.

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A significant decrease in demand could result in an increase in the amount of excess inventory quantities on hand.

In the future, if the Companys inventory cost is determined to be greater than the net realizable value of the inventory upon

sale, the Company would be required to recognize such excess costs in its cost of goods sold at the time of such determination.

In the future, if the Companys inventory cost is determined to be greater than the net realizable value of the inventory upon sale,

the Company would be required to recognize such excess costs in its cost of goods sold at the time of such determination.

although the Company makes every effort to ensure the accuracy of its forecasts of future product demand, any significant unanticipated

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Taxes – The Company accounts for income taxes using the asset and liability approach.

This requires

the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the

financial statement and the tax basis of assets and liabilities at the applicable tax rates.

The Company evaluates deferred tax assets,

and records a valuation allowance against those assets, if available evidence suggests that some of those assets will not be realized.

This requires the recognition of deferred

tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and the

tax basis of assets and liabilities at the applicable tax rates.

The Company evaluates deferred tax assets, and records a valuation allowance

against those assets, if available evidence suggests that some of those assets will not be realized.

effect of uncertain tax positions would be recorded in the financial statements only after determining a more likely than not probability

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Company sold approximately 187,371 and 203,817 cases of produced wine during the years ended December 31, 2022 and 2021, respectively,

an increase of 22,967 cases, or 12.7% in the current year over the prior year.

The increase in case sales was primarily the result

of increased shipments to distributors and higher direct sales in 2021 when compared to 2020.

a decrease of 16,447 cases, or 8.1% in the current year over the prior year.

The decrease in case sales was primarily the result of reduced

shipments to distributors in 2022 when compared to 2021.

of Sales includes grape costs, whether purchased or grown at Company vineyards, crush costs, winemaking and processing costs, bottling,

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costs include farming expenditures and amortization of vineyard development costs.

December 31, 2021, wine inventory included approximately 101,627 cases of bottled wine and 502,755 gallons of bulk wine in various stages

of the aging process.

Case wine is expected to be sold over the next 12 to 24 months and generally before the release date of the next

The Winery bottled approximately 206,954 cases during the year ended December 31, 2021.

of COVID-19 on Operations

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.

extent of the impact of the COVID-19 pandemic on the Companys business is highly uncertain and difficult to predict, as the response

to the pandemic, and in particular the response to the COVID-19 variants that have emerged, is continuing to evolve.

The severity of

the impact of the COVID-19 pandemic on the Companys business will depend on a number of factors, including, but not limited to,

the duration and severity of the pandemic and the extent and severity of the impact on the Companys customers, all of which are

uncertain and cannot be predicted.

December 31, 2022, wine inventory included 92,779 cases of bottled wine and 688,154 gallons of bulk wine in various stages of the aging

Case wine is expected to be sold over the next 12 to 24 months and generally before the release date of the next vintage.

Winery bottled 186,792 cases during the year ended December 31, 2022.

of Operations

compared to 2021

income was $2,445,463 and $3,394,996, for the years ended December 31, 2021 and 2020, respectively, a decrease of $949,533, or 28.0%,

for the year ended December 31, 2021 over the prior year period.

The primary reason for this decrease was higher operating expenses for

the year ended December 31, 2021, compared to the previous year.

income applicable to common shareholders was $1,001,180 and $2,278,618, for the years ended December 31, 2021 and 2020, respectively,

a decrease of $1,277,438, or 56.1%, for the year ended December 31, 2021 over the prior year period.

This decrease was primarily driven

by lower net income and higher preferred stock dividends.

income (loss) was $(646,492) and $2,445,463, for the years ended December 31, 2022 and 2021, respectively, a decrease of $3,091,955,

or 126.4%, for the year ended December 31, 2022 over the prior year period.

The primary reason for this decrease was higher net

sales revenues being more than offset by higher cost of sales and operating expenses for the year ended December 31, 2022, compared to

the previous year.

income (loss) applicable to common shareholders was $(2,512,943) and $1,001,180, for the years ended December 31, 2022 and 2021,

respectively, a decrease of $3,514,123, or 351.0%, for the year ended December 31, 2022 over the prior year period.

decrease was primarily driven by lower net income and higher preferred stock dividends.

Company had net sales revenues of $33,934,081 and $31,786,864 for the years December 31, 2022 and 2021, respectively, an increase of

$2,147,217, or 6.8%, for the year ended December 31, 2022 over the prior year period primarily as a result of an increase in revenue

from direct sales of $2,739,589 or 26.0% in 2021 compared to 2020, combined with an increase in revenue from sales to distributors of

$1,732,423 or 10.3% in 2021 compared to 2020.

from direct sales of $2,459,483, or 18.5% in 2022 compared to 2021, which more than offset a decrease in revenue from sales to distributors

of $312,266 or 1.7% in 2022 compared to 2021.

Company has three primary sales channels:

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distributors.

During 2021, revenues from retail sales increased 26.0%, revenues from in-state sales decreased 12.7%, and revenues from

out-of-state sales increased 25.0%, compared to 2020.

During 2022, revenues from retail sales increased 18.6%, revenues from in-state sales increased 2.8%, and revenues from

out-of-state sales decreased 4.3%, compared to 2021.

sales included $97,652 and $103,471 of bulk wine and grape sales in the years ended December 31, 2022 and 2021, respectively, and represented

approximately 41.7% and 38.6% of the Companys total net revenue for 2021 and 2020, respectively, while the Companys remaining

approximately 46.4% and 41.8% of the Companys total revenue for 2022 and 2021, respectively, while the Companys remaining

revenues came from sales through distributors.

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for the twelve months ended December 31, 2022 and 2021:

Twelve months ended

In-state sales

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The increase in retail sales revenues in 2022 compared to

2020 was mostly a result of increased revenues from our brand ambassador program and increased wine club sales and sales made over the

internet as well as higher tasting room sales.

2021 was mostly a result of increased revenues from the opening of four new retail locations during 2022.

Wine/miscellaneous sales revenues for the years ended December 31, 2022 and 2021 were $97,652 and $103,471, respectively, a decrease

of $5,819, or 5.6%, for the year ended December 31, 2022, over the prior year period.

sales revenues for the years ended December 31, 2021 and 2020 were $5,824,130 and $6,671,743, respectively, a decrease of $847,163, or

12.7%, for the year ended December 31, 2021 over the prior year period.

Management believes this decrease is primarily due to less product

being available to sell at the end of 2021.

sales revenues for the years ended December 31, 2022 and 2021 were $5,987,410 and $5,824,130, respectively, an increase of $163,280,

Management believes this increase is related to increased sales and promotion efforts in 2021.

or 2.8%, for the year ended December 31, 2022 over the prior year period.

sales revenues for the years ended December 31, 2022 and 2021 were $12,374,881 and $12,937,605, respectively, a decrease of $562,724,

Management believes this decrease is related to reduced availability of product at the beginning of 2022.

Company pays alcohol excise taxes to both the OLCC and to the TTB.

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grape harvest on a per ton basis to the OLCC for the Oregon Wine Board.

The Companys excise related taxes for the years ended

December 31, 2021 and 2020 were $384,498 and $372,470, an increase of $12,028, for the year ended December 31, 2021 over the prior year

This increase was due primarily to increased wine sales revenues in 2021 and the timing of removals.

The Companys excise related taxes for the years ended December

31, 2022 and 2021 were $312,103 and $384,498, a decrease of $72,395, for the year ended December 31, 2022 over the prior year period.

This decrease was due primarily to the timing of removals in 2022.

of Sales was $15,119,985 and $13,121,191 for the years ended December 31, 2022 and 2021, respectively, an increase of $1,998,794, or

15.2%, for the year ended December 31, 2022, over the prior year period.

This change was primarily the result of an increase in sales

This change was primarily the result of an increase in fruit

and packaging costs in 2022 and the mix of vintages sold between the two periods.

profit was $18,814,096 and $18,665,673 for the years ended December 31, 2022 and 2021, respectively, an increase of $148,423, or 0.8%,

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This decrease in the gross profit percentage was primarily the

result of an overall decrease in per case margins mostly due to the release of wines in 2021 from vintages produced from higher product

costs such as the 2020 vintage.

general and administrative expenses were $14,975,654 and $11,728,003 for the years ended December 31, 2021 and 2020, respectively, an

increase of $3,247,651, or 27.7%, for the year ended December 31, 2021 over the prior year period.

This increase was mainly the result

of increased selling expenses with tasting rooms being open for more days in 2021 and shipping, packaging and administrative cost increases

associated with efforts to increase sales and accommodate and develop retail growth and new operations.

from operations was $3,690,019 and $5,001,773 for the years ended December 31, 2021 and 2020, respectively, a decrease of $1,311,754,

or 26.2%, for the year ended December 31, 2021 compared to the prior year period.

The primary reason for this increase was higher cost

of sales and higher selling and administrative expenses as a percentage of sales.

result of an overall decrease in per case margins mostly due to the release of wines in 2022 from vintages produced with higher product

costs for item such as packaging and vineyard labor.

general and administrative expenses were $19,360,514 and $14,975,654 for the years ended December 31, 2022 and 2021, respectively,

an increase of $4,384,860, or 29.3%, for the year ended December 31, 2022 over the prior year period.

This increase was

primarily as a result of more sales coming from tasting rooms which have higher selling costs and from costs related to the opening and

development of four new tasting room and restaurant locations.

(loss) from operations was $(546,418) and $3,690,019 for the years ended December 31, 2022 and 2021, respectively, a decrease

of $4,236,437, or 114.8%, for the year ended December 31, 2022 compared to the prior year period.

The decrease was primary

the result of the $1,821,106 contribution loss related to the opening of four new locations and the higher cost of sales in 2022.

income was $5,496 and $12,412 for the years ended December 31, 2022 and 2021, respectively, a decrease of $6,916.

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December 31, 2022 over the prior year period.

The decrease in interest expense was mainly due to the decrease in loan balances in 2021

compared to the previous year.

The decrease in interest expense was mainly due to the decrease in average loan balances

in 2022 compared to the previous year.

income, net, was $142,529 and $155,183 for the years ended December 31, 2022 and 2021, respectively, a decrease of $12,654, or 8.2%,

for the year ended December 31, 2022 over the prior year period.

for income taxes was $1,020,879 and $1,379,654 for the years ended December 31, 2021 and 2020, respectively, a decrease of $358,775,

or 26.0%, for the year ended December 31, 2021 over the prior year period.

This decrease in income taxes in 2021 compared to 2020 was

primarily the result of lower income from operations in 2021.

per common share after preferred dividends was $0.20 and $0.46 for the years ended December 31, 2021 and 2020, respectively, a decrease

of $0.26, or 56.6%, for the year ended December 31, 2021 over the prior year period.

The primary reason for this decrease is a decrease

in net income in 2021 compared to 2020.

for income tax expense (benefit) was $(119,646) and $1,020,879 for the years ended December 31, 2022 and 2021, respectively, a

decrease of $1,140,525, or 111.7%, for the year ended December 31, 2022 over the prior year period.

This decrease in income

tax expense in 2022 compared to 2021 was primarily the result of lower income from operations in 2022, and higher tax depreciation deductions

related to the higher capital spend.

(loss) per common share after preferred dividends was $(0.51) and $0.20 for the years ended December 31, 2022 and 2021, respectively,

a decrease of $0.71, or 351.0%, for the year ended December 31, 2022 over the prior year period.

The primary reason for

this decrease was a decrease in net income in 2022 compared to 2021.

Company had cash balances of $338,676 at December 31, 2022, and $13,747,285 at December 31, 2021.

The Company had no outstanding line

of credit balances at December 31, 2021 or 2020.

2021, the Companys earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 16.9% to $5,797,295

from $6,980,083 in 2020, primarily as a result of a decrease in net income.

does not reflect the impact of a number of items that affect our net income, including financing costs.

EBITDA is not a measure of financial

performance under the accounting principles generally accepted in the United States of America, referred to as GAAP, and

should not be considered as an alternative to net income or income from operations as a measure of performance, nor as an alternative

to net cash from operating activities as a measure of liquidity.

We use EBITDA as a benchmark measurement of our own operating results

and as a benchmark relative to our competitors.

We consider it to be a meaningful supplement to operating income as a performance measure

primarily because depreciation and amortization expense are not actual cash costs, and depreciation expense varies widely from company

to company in a manner that we consider largely independent of the underlying cost efficiency of our operating facilities.

The Company had an outstanding line

of credit balance of $166,617 at December 31, 2022, and zero outstanding balance at December 31, 2021.

2022, the Companys earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 67.0%

to $1,912,012 from $5,797,295 in 2021, primarily as a result of a decrease in net income.

does not reflect the impact of a number of items that affect our net income (loss), including financing costs.

EBITDA is not a measure

of financial performance under the accounting principles generally accepted in the United States of America, referred to as GAAP,

and should not be considered as an alternative to net income (loss) or income (loss) from operations as a measure of performance, nor

as an alternative to net cash from operating activities as a measure of liquidity.

We use EBITDA as a benchmark measurement of our own

operating results and as a benchmark relative to our competitors.

We consider it to be a meaningful supplement to operating income (loss)

as a performance measure primarily because depreciation and amortization expense are not actual cash costs, and depreciation expense

varies widely from company to company in a manner that we consider largely independent of the underlying cost efficiency of our operating

has significant limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our

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See the Statement of Cash

Flows set out in our consolidated financial statements included herein.

following table provides a reconciliation of net income (the most comparable GAAP measure) to EBITDA for the periods indicated:

Flows set out in our financial statements included herein.

following table provides a reconciliation of net income (loss) (the most comparable GAAP measure) to EBITDA for the periods indicated:

Year Ended December 31,

Net Income (loss)

Depreciation and amortization expense

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Interest income

Income tax expense

Income tax expense (benefit)

case sales for the years ended December 31, 2022 and 2021 and ending inventory amounts for the year ended December 31, 2022, are shown

on the following table:

in the following table:

Cases On-Hand

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56% of the Companys case sales during 2022 were of the Companys flagship varietal, Pinot Noir.

Case sales of Pinot Gris

and Riesling follow with approximately 16% and 11% of case sales each, respectively.

The Company sold approximately 203,817 and 180,850

cases of Company-produced wine during the years ended December 31, 2021 and 2020, respectively.

This represents an increase of approximately

Case sales of Pinot Gris and

Riesling follow with approximately 18% and 10% of case sales each, respectively.

The Company sold approximately 187,371 and 203,817 cases

of Company-produced wine during the years ended December 31, 2022 and 2021, respectively.

This represents a decrease of approximately

16,447 cases, or 8.1% in 2022 compared to 2021.

This increase in case sales in 2021 compared to 2020 was primarily the result of increased

shipments through the wine club, internet and telephone sales as well as distributors.

The decrease in case sales in 2022 compared to 2021 was primarily the result of a decrease

in shipments through distributors, partially offset by an increase in direct to consumer cases.

Company has three primary sales channels:

direct-to-consumer sales, in-state sales to distributors, and out-of-state sales to distributors.

These three sales channels represent 41.7%, 18.1% and 40.2%, of net sales for the year ended December 31, 2021, respectively.

This compares

to 38.6%, 24.0% and 37.4% of net sales for the year ended December 31, 2020, respectively.

Miscellaneous and grape sales are included

in direct-to-consumer sales.

direct-to-consumer sales, in-state sales to distributors, and out-of-state sales to

distributors.

These three sales channels represent 46.4%, 17.5% and 36.1%, of total revenue for the year ended December 31, 2022,

respectively.

This compares to 41.7%, 18.1% and 40.2% of total revenue for the year ended December 31, 2021, respectively.

Miscellaneous and grape sales are included in direct-to-consumer sales.

Companys direct-to-consumer sales and national sales to distributors offer comparable products to customers and utilize similar

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than national sales to distributors due to differentiated pricing between these segments.

Company had approximately 101,627 cases of bottled wine on-hand at the end of 2021.

Management believes sufficient bulk wine inventory

is on-hand to bottle approximately 211,419 cases of wine in 2022 and that sufficient stock is on hand to meet current demand levels until

the 2021 vintage becomes available.

Company had 92,779 cases of bottled wine on-hand at the end of 2022.

Management believes sufficient bulk wine inventory is on-hand to

bottle 289,438 cases of wine in 2022 and that sufficient stock is on hand to meet current demand levels until the 2022 vintage becomes

production volumes are within the current production capacity constraints of the Winery when including storage capacity at the Tualatin

Winery and utilization of temporary storage when appropriate.

In 2021, approximately 206,954 cases were produced.

The Winery has capacity

to store and process about 258,620 cases of wine per year at the Estate Winery but can expand that capacity by utilizing storage at the

Tualatin Winery as well as temporary storage.

Management continues to invest in new production technologies intended to increase the

efficiency and quality of wine production.

During 2021, the Company did not choose to utilize the wine production facilities at the Tualatin

Winery but did utilize it for wine storage.

In 2022, 186,792 cases were produced.

We have the capacity to store and

process about 275,000 cases of wine per year at the Estate Winery but can expand that capacity by utilizing storage at the Tualatin Winery,

as well as temporary storage.

Management continues to invest in new production technologies intended to increase the efficiency and quality

of wine production.

During 2022, the Company did not choose to utilize the wine production facilities at the Tualatin Winery but did

utilize it for wine storage.

The Tualatin Winery has capacity to produce approximately 28,000 cases of wine.

is maintained in good condition.

Management intends to fully utilize the production capacity at the Estate Winery before expanding into

the Tualatin Winery.

Management intends to fully

utilize the production capacity at the Estate Winery before expanding into the Tualatin Winery.

the 2022 and 2021 vintages, the Company grew approximately 66% and 50% of all grapes harvested, respectively.

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and 19% of grapes harvested were purchased under long-term contracts, respectively.

The Company considers short-term contracts to be for

single vintage years and long-term contracts to cover multiple vintage years.

The Company considers short-term contracts to be

for single vintage years and long-term contracts to cover multiple vintage years.

are typically harvested and received in September and October of the vintage year.

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for future vineyard development.

Management currently has plans to plant approximately 42 acres in 2022, which we anticipate will begin

producing grapes in 2026.

Additionally, the Company intends to seek out opportunities to acquire land for future grape plantings in order

to continue to increase available quantities, maintain control over farming practices, more effectively manage grape costs and mitigate

The Company intends to seek out opportunities to acquire land for future grape plantings in order to

continue to increase available quantities, maintain control over farming practices, more effectively manage grape costs and mitigate

uncertainty associated with long-term contracts.

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throughout 2022 including the accolades below.

Wine Enthusiast awarded the Companys 2020 Whole Cluster Pinot Noir with 91 points and Editors Choice, 2020

Whole Cluster Rosé of Pinot Noir with 90 points, 2019 Founders Reserve Pinot Noir with 90 points, 2020 Riesling with 90

points and Best Buy, 2018 Pambrun Merlot with 91 points and Cellar Selection, 2018 Pambrun Cabernet Sauvignon with 90 points,

2018 Pambrun Chrysologue with 90 points, 2018 Metis with 91 points and Editors Choice, 2019 Maison Bleue Voyageur Syrah with 91

points, 2018 Maison Bleue Frontiere Syrah with 91 points and 2018 Maison Bleue Graviere Syrah with 90 points.

& Spirits awarded the Companys 2019 Estate Chardonnay with 90 points, 2018 Dijon Clone Chardonnay with 90 points

and 2017 Bernau Estate Brut with 92 points and Years Best for the United States Sparkling category.

Suckling awarded the Companys 2018 Elton Pinot Noir with 93 points, 2018 Fuller Pinot Noir with 93 points, 2018 Estate

Pinot Noir with 91 points, 2018 Tualatin Estate Pinot Noir with 91 points, 2018 OBrien Pinot Noir with 91 points and 2018 Bernau

Block Pinot Noir with 90 points.

International Wine Report awarded the Companys 2018 Bernau Block Pinot Noir with 90 points, 2019 Estate Pinot Noir with 90

points, 2019 Estate Chardonnay with 91 points and Estate Rose of Pinot Noir with 91 points.

Wine Panel awarded the Companys 2019 Estate Pinot Noir with 91 points, 2020 Pinot Gris with 93 points, 2019 White Pinot Noir

with 90 points and 2019 Dijon Clone Pinot Noir with 90 points.

The Companys 2018 Estate Pinot Noir and 2020 Pinot Gris were both awarded gold medals and 91 points from the 2021 Sunset International

Wine Competition.

Companys Estate Pinot Noir, Whole Cluster Pinot Noir, Whole Cluster Rosé of Pinot Noir, Pinot Gris and Méthode Champenoise

Brut were featured in various episodes of Season 18 of Bravos Top Chef , and the season finale was hosted at the Companys

Estate in the Salem Hills.

Enthusiast rated the Companys 2019 Tualatin Estate Chardonnay with 91 points, 2019 Tualatin Estate Pinot Noir with 90 points,

2017 Bernau Estate Brut with 92 points & Editors Choice and 2017 Bernau Estate Blanc de Blancs with 91 points.

rated the Companys 2019 Estate Pinot Noir with 90 points, 2019 Tualatin Estate Pinot Noir with 90 points, 2018 Elton Pinot

Noir with 91 points, 2018 Bernau Block Pinot Noir with 93 points, 2018 Tualatin Estate Pinot Noir with 92 points and 2018 Hannah Pinot

Noir with 92 points.

Vinous also reviewed the Companys Pambrun wines and scored the 2018 Pambrun Cabernet Sauvignon with

92 points, 2018 Pambrun Merlot with 92 points and 2018 Pambrun Chrysologue with 92 points.

The Companys Maison Bleue wines received

scores of 92 points for the 2019 Voyageur Syrah, 92 points from the 2019 Graveiere Syrah and 92 points for the 2019 Frontiere Syrah.

Suckling rated the Companys 2019 Vintage 46 Chardonnay with 94 points, 2019 Vintage 46 Pinot Noir with 93 points and the 2019

Tualatin Estate Chardonnay with 91 points.

The 2019 Bernau Block Pinot Noir received 90 points and the 2019 Elton Pinot Noir received

The inaugural vintage of the 2017 Bernau Estate Méthode Traditionnelle Brut received 91 points and the 2017 Bernau

Estate Blanc de Blancs received 90 points.

Enthusiast Magazine rated the 2019 Founders Reserve Pinot Noir with 90 points.

Sunset International Wine Competition rated our 2021 Whole Cluster Rosé of Pinot Noir with 91 points & Gold and our 2021 Pinot

Gris with 90 points and Gold.

Sommeliers Choice Awards rated our 2021 Whole Cluster Rosé of Pinot Noir with Gold and 91 points and our 2021 Pinot Gris with

90 points and Gold.

Enthusiast rated the Companys 2020 Riesling with 90 points & Best Buy, and in the Top 100 Best Buy Wines for 2022.

Fine Wine Challenge 2022 rated the companys 2018 Domaine Willamette Méthode Traditionnelle Brut 96 points & Double Gold

Company has historically experienced and expects to continue to experience seasonal fluctuations in its revenue and net income.

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of $338,676, at December 31, 2022.

cash provided from operating activities for the year ended December 31, 2021 was $2,572,708, which resulted primarily from cash provided

by net income combined with increased non-cash operating expenses, such as depreciation and unearned revenue, being partially offset

by cash used in connection with increased inventory and accounts receivable.

cash used in operating activities for the year ended December 31, 2022 was $2,666,228, which resulted primarily from a net loss in 2022

as well as increased inventory, income tax receivable and accounts receivable, being partially offset by increased depreciation and non-cash

lease expense.

cash used in investing activities for the year ended December 31, 2022 was $15,479,674, which primarily consisted of cash used on construction

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cash provided from financing activities for the year ended December 31, 2022 was $4,737,293, which primarily consisted of proceeds from

investor deposits related to the Preferred Stock offering as well as the issuance of Preferred Stock, being partially offset by the repayment

of debt and payment of a preferred stock dividend.

2019, the Companys Board of Directors approved the construction of a new tasting room at the Bernau Estate Vineyard, expected

to be completed during the 2022 fiscal year.

The total construction costs for the Bernau Estate Tasting Room is expected to be approximately

$15.6 million, which will be funded through a combination of cash on hand as well as equity financing through Preferred Stock offerings.

Construction began in July 2019 and was paused in March 2020 as a result of the uncertainty surrounding the COVID-19 pandemic and has

now been restarted.

As of December 31, 2021, we had incurred approximately $9.5 million in costs related to the project.

the issuance of Preferred Stock and an increase in long term debt with Farm Credit Services, being partially offset by the payment of

a preferred stock dividend.

December of 2005, the Company entered into a revolving line of credit agreement with Umpqua Bank that allows borrowing up to $2,000,000

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In July 2021, the Company renewed the credit agreement until July

At December 31, 2021 and December 31, 2020, there was no outstanding balance on this revolving line of credit and the Company

was in compliance with the line of credits financial covenants.

In November 2022, the Company increased the borrowing line up to $5,000,000.

The Company had an outstanding line of credit

balance of $166,617 at December 31, 2022, at an interest rate of 6.5%, and zero outstanding balance at December 31, 2021.

of December 31, 2022, the Company was out of compliance with a debt covenant.

The Company has received a waiver from Umqua Bank waiving

this violation until the next measurement date of December 31, 2023.

of December 31, 2022, the Company had a total long-term debt balance of $7,062,654, including the portion due in the next year, owed

2 unchanged sentences

balance of $5,535,096, exclusive of debt issuance costs of $132,483.

The debt with NW Farm Credit Services was used to finance the Hospitality

Center and subsequent remodels, invest in winery equipment to increase the Companys winemaking capacity, complete the storage

facility, and acquire new vineyard land for future development.

The debt with Farm Credit Services was used to finance the Hospitality

Center and subsequent remodels, invest in winery equipment to increase the Companys winemaking capacity, complete the storage facility,

acquire new vineyard land for future development and provide operating capital.

The debt in 2022 with Farm Credit Services was used to

finance completion of new restaurant and tasting room locations and provide operating capital.

of December 31, 2022, the Company had an installment note payable of $1,201,038, due in quarterly payments of $42,534 through February

7 unchanged sentences

Notes payable

Line of credit

Grape payables

1 unchanged sentence

Total contractual obligations

Companys management does not believe inflation has had a material impact on the Companys revenues or income during 2021

Companys management does not believe inflation has had a material impact on the Companys revenues or income (loss) during

2022 or 2021.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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 5. Market for Registrant’s Common Equity