What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-03-26 compared with 2023-03-28 · 138 added, 141 removed, 169 unchanged (62% of the section changed)

2 unchanged sentences

These disclosures are intended to discuss certain material risks of the Companys

business as they appear to Management at this time.

However, this list is not exhaustive.

business as they appear to management at this time, however, this list is not exhaustive.

Other risks may, and likely will, arise from

3 unchanged sentences

Various diseases, pests, fungi, viruses, including Grapevine Red Blotch

Disease (GRBV), drought, frost and certain other weather conditions can affect the quantity of grapes available to the Company, decreasing

the supply of the Companys products and negatively impacting profitability.

In particular, certain of the Companys vines

are not resistant to phylloxera;

accordingly, those vines are particularly at risk to the effects from an infestation of phylloxera.

Disease (GRBV), drought, frost and certain other weather conditions can affect the quantity of grapes available to the

Company, decreasing the supply of the Companys products and negatively impacting profitability.

In particular, certain of the

Companys vines are not resistant to phylloxera;

accordingly, those vines are particularly at risk to the effects from an infestation

of phylloxera.

Phylloxera is a pest that attacks the rootstocks of wine grape plants.

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

owned by us, have been infested with phylloxera.

Vineyards in the United States, including some

in Oregon and some owned by us, have been infested with phylloxera.

In particular, Tualatin Estate Vineyards have phylloxera.

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.

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.

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.

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.

operations are susceptible to changing weather patterns and other environmental factors

the past several years, changing weather patterns and climatic conditions have added to the unpredictability and frequency of natural

disasters, such as hail storms, wildfires and wind, snow and ice storms.

disasters, such as hailstorms, wildfires and wind, snow and ice storms.

Any such extreme weather condition could negatively impact the

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.

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,

6 unchanged sentences

In extreme events, smoke can produce effects on grapes that make them unusable in the production

The Company cannot predict smoke events, or their potential impact were they to occur.

The Company cannot predict smoke events, or the potential impact if such events were to occur.

may not be able to economically insure certain risks

8 unchanged sentences

or more of these key employees, including James W.

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

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.

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

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 operations.

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.

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.

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 stockholder value.

of December 31, 2023, the Companys outstanding long-term debt was approximately $7.6 million, with $2.7 million drawn under its

short-term line of credit.

Additionally, the Company had notes payable to private parties of approximately $1.1 million as of December

9 unchanged sentences

as Italy, Chile, Argentina, South Africa, New Zealand and Australia.

The Companys wines also compete with popular priced generic

wines and with other alcoholic and, to a lesser degree, non-alcoholic beverages, for shelf space in retail stores and for marketing focus

by the Companys independent distributors, many of which carry extensive brand portfolios.

A result of this intense competition

has been and may continue to be upward pressure on the Companys selling and promotional expenses.

In addition, the wine industry

has experienced significant consolidation.

Many of the Companys competitors have greater financial, technical, marketing, and public

relations resources than the Company does.

In particular, wine production in the United States is dominated by large California wineries

that have significantly greater resources than the Company.

Additionally, greater worldwide label recognition and larger production levels

give many of the Companys competitors certain unit cost advantages.

Company sales may be harmed to the extent it is not able to

compete successfully against such wine or alternative beverage producers costs.

There can be no assurance that in the future the

Company will be able to successfully compete with its current competitors or that it will not face greater competition from other wineries

and beverage manufacturers.

Willamette Valley American Viticultural Area (AVA) value may be eroded by out of state competition who use it inappropriately

or as fanciful marketing

grape growing regions in the United States are divided into American Viticultural Areas (AVAs) by the Alcohol and Tobacco Tax and Trade

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

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.

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

be charged for wines from Oregon AVAs as a result of reduced competitor quality and/or pricing.

The Companys wines also compete with popular generic wines

and with other alcoholic and, to a lesser degree, non-alcoholic beverages, for shelf space in retail stores and for marketing focus by

the Companys independent distributors, many of which carry extensive brand portfolios.

One result of this intense competition

has been upward pressure on the Companys selling and promotional expenses.

In addition, the wine industry has experienced significant

consolidation.

Many of the Companys competitors have greater financial, technical, marketing, and public relations resources than

the Company does.

In particular, wine production in the United States is dominated by large California wineries that have significantly

greater resources than the Company.

Additionally, greater worldwide label recognition and larger production levels give many of the Companys

competitors certain unit cost advantages.

Company sales may be harmed to the extent it is not able to compete successfully against such

wine or alternative beverage producers costs.

There can be no assurance that in the future the Company will be able to successfully

compete with its current competitors or that it will not face greater competition from other wineries and beverage manufacturers.

Willamette Valley AVA value may be eroded by out of state competition who use it inappropriately or as fanciful marketing

grape growing regions in the United States are divided into AVA) by the United States Department of the Treasurys TTB, based on

distinguishable geographic features.

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 when compared against other wines in their class.

As a result, these Oregon wines are

often sold at a higher price point than wines not produced in Oregon.

Because of this recognition, out of state competitors have inappropriately

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 be charged for wines from Oregon AVAs as a result of

reduced competitor quality and/or pricing.

Company competes for shelf space in retail stores and for marketing focus by its independent distributors, most of whom carry extensive

4 unchanged sentences

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

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

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.

of the Willamette Valley Vineyards or 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 brands.

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

Valley source of their wine grapes and wine on their labels, packaging and advertising materials, the Company has enforced its

trademarks on any unauthorized use as a wine brand.

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

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

AVA source of their wine grapes and wine on their labels, packaging and advertising materials, the Company has enforced its trademarks

on any unauthorized use as a wine brand.

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

2 unchanged sentences

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

36 unchanged sentences

regulation and/or taxation could adversely affect the Company

wine industry is subject to extensive regulation by the Federal Alcohol and Tobacco Tax and Trade Bureau (TTB) and various

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

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.

wine industry is subject to extensive regulation by the TTB and various foreign agencies, state liquor authorities (such as the 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

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

3 unchanged sentences

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.

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

August 2015, the Company commenced a public offering of our Series A Redeemable Preferred Stock pursuant to a registration statement

filed with the SEC.

The Company registered this transaction with the securities authorities of the States of Oregon and Washington and,

in November 2015, achieved listing status on NASDAQ under the trading symbol WVVIP.

The terms of our Series A Redeemable Preferred Stock

are unusual for a company of our size, and we believe the structure of these securities and of the offering are not commonplace among

issuers of any type.

Federal and state securities laws impose significant liabilities on issuers of securities if the related offering

documents contain material misstatements of fact, or if the documents omit to state facts necessary, in light of the circumstances as

a whole, to prevent the documents from being misleading.

trading volume of the Companys common stock (the Common Stock) on the NASDAQ Capital Market (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 its Preferred Stock.

August 2015, the Company commenced a public offering of our Series A Redeemable Preferred Stock (the Preferred Stock) pursuant

to a registration statement filed with the SEC.

The Company registered this transaction with the securities authorities of the States

of Oregon and Washington and, in November 2015, achieved listing status for the Preferred Stock on NASDAQ under the trading symbol WVVIP.

The terms of our Preferred Stock are unusual for a company of our size, and we believe the structure of these securities and of the offering

is not commonplace among issuers.

Federal and state securities laws impose significant liabilities on issuers of securities if the related

offering documents contain material misstatements of fact, or if the documents omit to state facts necessary, in light of the circumstances

as a whole, to prevent the documents from being misleading.

These liabilities can include rescission liability to the purchasers of the

9 unchanged sentences

efforts in the future.

Company may be unable to pay accumulated dividends on its Series A Redeemable Preferred Stock.

Companys Series A Redeemable Preferred Stock bears a cumulative 5.3% dividend based upon the original issue price, or $0.22 per

share per annum.

However, prior to the declaration and payment of dividends our board of directors must determine, among other things,

that funds are available out of the surplus of the Company and that the payment would not render us insolvent or compromise our ability

to pay our obligations as they come due in the ordinary course of business.

Additionally, our existing credit facility limits, and future

debt obligations in the future may limit, both our legal and our practical ability to declare and pay dividends.

As a result, although

the Series A Redeemable Preferred Stock will continue to earn a right to receive dividends, the Companys ability to pay dividends

will depend, among other things, upon our ability to generate excess cash.

However, although shares of our Series A Redeemable Preferred

Stock will earn cumulative dividends, unpaid dividends will not, themselves, accumulate (as might compounding interest on a debt security,

for example).

Company may be unable to pay accumulated dividends on its Preferred Stock.

Companys Preferred Stock bears a cumulative 5.3% dividend based upon the original issue price, or $0.22 per share per annum.

prior to the declaration and payment of dividends our board of directors must determine, among other things, that funds are available

out of the surplus of the Company and that the payment would not render us insolvent or compromise our ability to pay our obligations

as they come due in the ordinary course of business.

Additionally, our existing credit facility limits, and future debt obligations in

the future may limit, both our legal and our practical ability to declare and pay dividends.

As a result, although the Preferred Stock

will continue to earn a right to receive dividends, the Companys ability to pay dividends will depend, among other things, upon

our ability to generate excess cash.

However, although shares of our Preferred Stock will earn cumulative dividends, unpaid dividends

will not, themselves, accumulate (as might compounding interest on a debt security, for example).

the Companys sales revenues are dependent in part upon the purchases made by and continued goodwill with its holders of Preferred

1 unchanged sentence

Additionally, as the Company focuses its

issuance of Preferred Stock to wine enthusiasts likely to purchase the Companys wines, any failure by the Management to successfully

issuance of Preferred Stock to wine enthusiasts likely to purchase the Companys wines, any failure by management to successfully

target its stock sales could diminish the opportunity to maximize earnings and offset the administrative, regulatory, and legal costs

15 unchanged sentences

and report on our business and to communicate electronically between our facilities, personnel, customers, and suppliers as well as for

administrative functions and many of such technology systems are independent on one another for their functionality.

administrative functions and many of such technology systems are independent of one another for their functionality.

We also use information

33 unchanged sentences

to quickly replace Board members;

the ability of our Board, subject to certain limitations under the rules of the NASDAQ Stock Market,

to issue shares of preferred stock with rights as it deems appropriate without stockholder approval;

a provision that special meetings

of our Board may be called only by our chief executive officer or at the request of holders of not less than half of all outstanding

shares of our common stock;

the ability of our Board, subject to certain limitations under the NASDAQ rules, to issue shares of

Preferred Stock with rights as it deems appropriate without stockholder approval;

a provision that special meetings of our Board may

be called only by our chief executive officer or at the request of holders of not less than half of all outstanding shares of our common

a provision that any member of the Board, or the entire Board, may be removed from office only for cause;

and a provision that our stockholders comply with advance-notice provisions to bring director nominations or other matters before meetings

of our stockholders.

and a provision that

our stockholders comply with advance-notice provisions to bring director nominations or other matters before meetings of our stockholders.

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

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