What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-13 compared with 2024-05-13 · 229 added, 175 removed, 442 unchanged (48% of the section changed)

31 unchanged sentences

SHAREHOLDERS EQUITY

Redeemable preferred stock, no par value, 100,000,000 shares authorized, 10,239,573 shares issued and outstanding, liquidation preference $ 43,057,405 , at March 31, 2024 and 10,046,833 shares issued and outstanding, liquidation preference $ 41,694,357 , at December 31, 2023.

Common stock, no par value, 10,000,000 shares authorized, 4,964,529 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively.

Redeemable preferred stock, no par value, 100,000,000 shares authorized, 10,239,573 shares issued and outstanding, liquidation preference $ 43,620,654 , at June 30, 2024 and 10,046,833 shares issued and outstanding, liquidation preference $ 41,694,357 , at December 31, 2023.

Common stock, no par value, 10,000,000 shares authorized, 4,964,529 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.

Retained earnings

3 unchanged sentences

$ 105,708,149

The accompanying notes are an integral part of this condensed financial statement

accompanying notes are an integral part of this condensed financial statement

VALLEY VINEYARDS, INC.

1 unchanged sentence

Three months ended

Six months ended

COST OF SALES

3 unchanged sentences

Total operating expenses

LOSS FROM OPERATIONS

INCOME (LOSS) FROM OPERATIONS

OTHER INCOME (EXPENSE)

Interest expense

Interest expense, net

Other income, net

LOSS BEFORE INCOME TAXES

( 1,025,786 )

INCOME TAX BENEFIT

INCOME (LOSS) BEFORE INCOME TAXES

INCOME TAX (EXPENSE) BENEFIT

NET INCOME (LOSS)

Accrued preferred stock dividends

( 1,126,426 )

( 1,023,439 )

LOSS APPLICABLE TO COMMON SHAREHOLDERS

1 unchanged sentence

$ ( 403,267 )

$ ( 1,452,253 )

$ ( 1,659,809 )

Loss per common share after preferred dividends, basic and diluted

Weighted-average number of common shares outstanding, basic and diluted

The accompanying notes are an integral part of this condensed financial statement

accompanying notes are an integral part of this condensed financial statement

VALLEY VINEYARDS, INC.

STATEMENTS OF SHAREHOLDERS EQUITY

Three-Month Period Ended March 31, 2024

Six-Month Period Ended June 30, 2024

Preferred Stock

3 unchanged sentences

Balance at March 31, 2024

Three-Month Period Ended March 31, 2023

Preferred stock dividends accrued

Balance at June 30, 2024

Six-Month Period Ended June 30, 2023

Preferred Stock

3 unchanged sentences

Balance at March 31, 2023

The accompanying notes are an integral part of this condensed financial statement

Preferred stock dividends accrued

Balance at June 30, 2023

accompanying notes are an integral part of this condensed financial statement

VALLEY VINEYARDS, INC.

STATEMENTS OF CASH FLOWS

Three months ended March 31,

OF CASH FLOWS

Six months ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

7 unchanged sentences

Accounts receivable

( 1,177,789 )

Prepaid expenses and other current assets

Income tax receivable

Income taxes receivable

Unearned revenue

7 unchanged sentences

( 2,212,072 )

( 1,279,932 )

CASH FLOWS FROM INVESTING ACTIVITIES

2 unchanged sentences

( 1,061,541 )

( 1,905,988 )

Net cash from investing activities

( 1,188,276 )

( 2,109,897 )

CASH FLOWS FROM FINANCING ACTIVITIES

2 unchanged sentences

Proceeds from line of credit

Payment on long-term debt

Payments on long-term debt

Proceeds from long-term debt

9 unchanged sentences

Right of use assets obtained in exchange for operating lease liabilities

The accompanying notes are an integral part of this condensed financial statement

accompanying notes are an integral part of this condensed financial statement

TO UNAUDITED INTERIM FINANCIAL STATEMENTS

BASIS OF PRESENTATION

accompanying unaudited interim condensed financial statements as of March 31, 2024 and for the three months ended March 31, 2024 and

accompanying unaudited interim financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023

have been prepared in conformity with accounting principles generally accepted in the United States (U.S.

interim financial statements.

The financial information as of December 31, 2023 is derived from the audited financial statements presented

in the Willamette Valley Vineyards, Inc.

GAAP) for interim

financial statements.

The financial information as of December 31, 2023 is derived from the audited financial statements presented in

the Willamette Valley Vineyards, Inc.

(the Company) Annual Report on Form 10-K for the year ended December 31, 2023.

(the 2023 Report).

Certain information or footnote disclosures normally included in financial statements prepared in accordance

GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission.

opinion of management, the accompanying financial statements include all adjustments necessary (which are of a normal recurring nature)

for the fair statement of the results of the interim periods presented.

The accompanying unaudited interim condensed financial statements

should be read in conjunction with the Companys audited financial statements for the year ended December 31, 2023, as presented

in the Companys Annual Report on Form 10-K.

results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the entire year

ending December 31, 2024, or any portion thereof.

information or footnote disclosures normally included in financial statements prepared in accordance with U.S.

GAAP have been condensed

or omitted pursuant to the rules and regulations of the Securities and Exchange Commission.

In the opinion of management, the accompanying

financial statements include all adjustments necessary (which are of a normal recurring nature) for the fair statement of the results

of the interim periods presented.

The accompanying financial statements should be read in conjunction with the Companys audited

financial statements for the year ended December 31, 2023, as presented in the Companys Annual Report on Form 10-K.

results for the three and six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the entire

year ending December 31, 2024, or any portion thereof.

Companys revenues include direct to consumer sales and national sales to distributors.

4 unchanged sentences

Schedule of Earnings Per Share

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Net income (loss)

$ ( 325,827 )

1 unchanged sentence

Accrued preferred stock dividends

Net loss applicable to common shareholders

( 1,126,426 )

( 1,023,439 )

Net loss applicable to common shares

$ ( 367,271 )

$ ( 403,267 )

$ ( 1,452,253 )

$ ( 1,659,809 )

Weighted-average number of common shares outstanding basic and diluted

4 unchanged sentences

of Inventories

March 31, 2024

June 30, 2024

December 31, 2023

6 unchanged sentences

Schedule of Property and Equipment, Net

March 31, 2024

June 30, 2024

December 31, 2023

1 unchanged sentence

Land, improvements, and other buildings

Winery buildings and tasting rooms

Winery, tasting room buildings, and hospitality center

Property and equipment, gross

3 unchanged sentences

Property and equipment, net

expense for the three months ended March 31, 2024 and 2023 was $ 791,986 and $ 726,564 , respectively.

expense for the three months ended June 30, 2024 and 2023 was $ 790,970 and $ 744,048 , respectively.

Depreciation expense for the six

months ended June 30, 2024 and 2023 was $ 1,582,956 and $ 1,459,612 , respectively.

of Credit Facility – In December of 2005, the Company entered into a revolving line of credit agreement with Umpqua Bank (the

7 unchanged sentences

The Company had an outstanding line of

credit balance of $ 3,320,928 at March 31, 2024, at an interest rate of 8.0%, and an outstanding line of credit balance of $ 2,684,982

at December 31, 2023, at an interest rate of 8.0%.

credit balance of $ 2,334,415 at June 30, 2024, at an interest rate of 8.0%, and an outstanding line of credit balance of $ 2,684,982 at

December 31, 2023, at an interest rate of 8.0%.

line of credit agreement includes various covenants, which among other things, requires the Company to maintain minimum amounts of tangible

6 unchanged sentences

The note may be called by the owner, up to the outstanding balance, with 180 days written notice.

As of March 31, 2024, the Company

As of June 30, 2024, the Company

had a balance of $1,049,587 due on this note.

1 unchanged sentence

Debt – The Company has three long term debt agreements with AgWest with an aggregate outstanding balance of $ 10,832,629 and

$ 7,590,659 as of March 31, 2024 and December 31, 2023, respectively.

$ 7,590,659 as of June 30, 2024 and December 31, 2023, respectively.

The first two outstanding loans require monthly principal and interest

2 unchanged sentences

The general purposes of these loans were to make capital improvements to the winery and vineyard facilities.

third loan bears interest at Northwest Variable base, which was 7.80% at March 31, 2024, and December 31, 2023, respectively, with interest

third loan bears interest at Northwest Variable base, which was 7.80% at June 30, 2024, and December 31, 2023, respectively, with interest

due annually and principal at maturity on November 1, 2025.

minimum principal payments of long-term debt are as follows for the years ending December 31:

of June 30, 2024, future minimum principal payments of long-term debt are as follows for the years ending December 31:

of Future Minimum Principal Payment for Long-Term Debt Maturities

of March 31, 2024, the Company had unamortized debt issuance costs of $ 102,677 .

As of December 31, 2023, the Company had unamortized

debt issuance costs of $ 105,989 .

of June 30, 2024, the Company had unamortized debt issuance costs of $ 99,365 .

As of December 31, 2023, the Company had unamortized debt

issuance costs of $ 105,989 .

INTEREST AND TAXES PAID

taxes – The Company paid zero in income taxes for the three months ended March 31, 2024, and received $ 19,456 in income tax

refunds for the three months ended March 31, 2023.

– The Company paid $ 134,979 and $ 93,805 for the three months ended March 31, 2024 and 2023, respectively, in interest on long-term

debt, line of credit and the bank overdraft.

taxes – The Company paid zero in income taxes for the three months ended June 30, 2024 and 2023, respectively.

paid zero in income taxes for the six months ended June 30, 2024 and received $ 19,456 in income tax refunds for the six months ended

June 30, 2023.

– The Company paid $ 129,539 and $ 92,379 for the three months ended June 30, 2024 and 2023, respectively, in interest on short

and long-term debt.

The Company paid $ 264,518 and $ 186,184 for the six months ended June 30, 2024 and 2023, respectively, in interest

on short and long-term debt.

SEGMENT REPORTING

14 unchanged sentences

associated with selling, is not available and that information continues to be aggregated.

following table outlines the sales, cost of sales, gross margin, directly attributable selling expenses, and contribution margin of the

segments for the three months ended March 31, 2024 and 2023.

following table outlines the sales, cost of sales, gross profit, directly attributable selling expenses, and contribution margin of the

segments for the three and six month periods ended June 30, 2024 and 2023.

Sales figures are net of related excise taxes.

Schedule of Segment reporting

Months Ended March 31,

and Marketing Expenses

$ ( 272,370 )

$ ( 432,785 )

and Administration Expenses

from Operations

$ ( 602,577 )

Three Months Ended June 30,

Distributor Sales

Cost of sales

Selling expenses

Contribution margin

Percent of total sales

General and administration expenses

Income from operations

Six Months Ended June 30,

Distributor Sales

Cost of sales

Selling expenses

Contribution margin (deficit)

Percent of total sales

General and administration expenses

Loss from operations

$ ( 666,111 )

sales include zero bulk wine sales in the three months ended March 31, 2024 compared to $ 10,000 bulk wine sales in the three months ended

March 31, 2023.

were no bulk wine sales for the three months ended June 30, 2024 and June 30, 2023.

There were no bulk wine sales for the six months

ended June 30, 2024 and $ 10,000 of bulk wine sales included in direct sales for the six months ended June 30, 2023.

SALE OF PREFERRED STOCK

June 11, 2021, the Company filed with the SEC an additional Prospectus Supplement to the 2020 Form S-3, pursuant to which the Company

sold an aggregate of 1,918,939 shares of its Series A Redeemable Preferred Stock for aggregate proceeds of $9,008,334 net of acquisition

July 1, 2022, the Company filed a new shelf Registration Statement on Form S-3 (the July 2022 Form S-3) with the SEC pertaining

to the potential future issuance of one or more classes or series of debt, equity, or derivative securities.

The maximum aggregate offering

amount of securities sold pursuant to the June 2022 Form S-3 is not to exceed $20,000,000.

On August 1, 2022 and September 1 2022, the

Company filed with the SEC Prospectus Supplements to the July 2022 Form S-3, pursuant to which the Company proposed to offer and sell,

on a delayed or continuous basis, up to 213,158 shares of Series A Redeemable Preferred Stock having proceeds not to exceed $1,097,765

and up to 284,995 shares of Series A Redeemable Preferred Stock having proceeds not to exceed $1,467,729, respectively.

Each of these

Prospectus Supplements established that our shares of preferred stock were to be sold in three offering periods with three separate offering

prices beginning with an offering price of $5.15 per share and concluding with an offering of $5.35 per share.

On October 3, 2022, the

Company filed with the SEC a Prospectus Supplement to the July 2022 Form S-3, pursuant to which the Company proposed to offer and sell,

on a delayed or continuous basis, up to 233,564 shares of Series A Redeemable Preferred Stock having proceeds not to exceed $1,226,211.

This Prospectus Supplement established that our shares of preferred stock were to be sold in two offering periods with two separate offering

prices beginning with an offering price of $5.25 per share and concluding with an offering of $5.35 per share.

On November 1, 2022, the

Company filed with the SEC a Prospectus Supplement to the July 2022 Form S-3, pursuant to which the Company proposed to offer and sell,

on a delayed or continuous basis, up to 344,861 shares of Series A Redeemable Preferred Stock having proceeds not to exceed $1,845,009.

This Prospectus Supplement established that our shares of preferred stock were to be sold in one offering period with an offering price

of $5.35 per share.

Net proceeds of $3,558,807 have been received under these offerings as of March 31, 2024 for the issuance of Preferred

July 1, 2022, the Company filed a shelf Registration Statement on Form S-3 (the July 2022 Form S-3) with the United States

Securities and Exchange Commission (the SEC) pertaining to the potential future issuance of one or more classes or series

of debt, equity, or derivative securities.

The maximum aggregate offering amount of securities sold pursuant to the June 2022 Form S-3

is not to exceed $20,000,000.

From August 1, 2022 to November 1, 2022 the Company filed with the SEC four Prospectus Supplements to the

July 2022 Form S-3, pursuant to which the Company proposed to offer and sell, on a delayed or continuous basis, up to an aggregate of

1,076,578 shares of Series A Redeemable Preferred Stock having proceeds not to exceed and aggregate of $5,636,714.

Each of these Prospectus

Supplements established that our shares of preferred stock were to be sold in one to three offering periods offering prices including

$5.15 per share, $5.25 per share and $5.35 per share.

Net proceeds of $3,558,807 have been received under these offerings as of June

30, 2024 for the issuance of Preferred Stock.

June 30, 2023, the Company filed with the SEC a Prospectus Supplement to the July 2022 Form S-3, pursuant to which the Company proposed

8 unchanged sentences

with an offering price of $4.85 per share.

Net proceeds of $3,938,066 have been received under these offering as of March 31, 2024 for

Net proceeds of $3,938,066 have been received under these offering as of June 30, 2024 for

the issuance of Preferred Stock.

1 unchanged sentence

The amount of unused dividend gift cards

at March 31, 2024 and December 31, 2023 was $ 1,099,872 and $ 1,480,138 , respectively, and is recorded as unearned revenue on the balance

at June 30, 2024 and December 31, 2023 was $ 953,072 and $ 1,480,138 , respectively, and is recorded as unearned revenue on the balance

Revenue from gift cards is recognized when the gift card is redeemed by a customer.

41 unchanged sentences

Vineyard and includes approximately 49 acres of producing vineyards.

February 2007 , the Company entered into a lease agreement for 59 acres of vineyard land at Elton Vineyard.

2007 , the Company entered into a lease agreement for 59 acres of vineyard land at Elton Vineyard.

In June 2021 the company

entered into a new 11 year lease for this property.

entered into a new 11

year lease for this property.

The lease contains an escalation provision tied to the CPI not to exceed 2% per annum.

17 unchanged sentences

year renewal option and defined payments over the term of the lease.

For right of use asset and liability calculations the Company has not included the renewal option.

2018 , the Company assumed a lease, through December 2022, for its Maison Bleue tasting room in Walla Walla, Washington.

26 unchanged sentences

For right of use asset and liability calculations the Company has

assumed it will operate in this location for 10 years.

not included the renewal option.

following tables provide lease cost and other lease information:

of Lease Cost and Information

Three Months Ended

March 31, 2024

March 31, 2023

Six Months Ended

June 30, 2024

June 30, 2023

Operating lease cost - Vineyards

8 unchanged sentences

Weighted-average discount rate - Operating leases

assets obtained in exchange for new operating lease obligations were zero and $ 695,565 for the three months ended March 31, 2024 and

assets obtained in exchange for new operating lease obligations were zero and $ 1,090,735 for the six months ended June 30, 2024 and 2023,

respectively.

of March 31, 2024, maturities of lease liabilities were as follows:

of June 30, 2024, maturities of lease liabilities were as follows:

of Maturities of Lease Liabilities

62 unchanged sentences

Such policies

were unchanged during the three months ended March 31, 2024.

were unchanged during the three months ended June 30, 2024.

Company, one of the largest wine producers in Oregon by volume, believes its success is dependent upon its ability to:

33 unchanged sentences

this is not a significant part of the Companys activities.

Company sold 43,208 and 42,387 cases of produced wine during the three months ended March 31, 2024 and 2023, respectively, an increase

of 821 cases, or 2.0% in the current year period over the prior year period.

The increase in wine case sales was primarily the

result of having more locations and more availability of some vintages in the quarter when compared to the prior year period.

Company sold 91,102 and 96,269 cases of produced wine during the six months ended June 30, 2024 and 2023, respectively, a decrease of

5,167 cases, or 5.4% in the current year period over the prior year period.

The decrease in wine case sales was primarily the result

of decreased case sales through distributors.

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

2 unchanged sentences

of vineyard development costs.

March 31, 2024, wine inventory included 147,351 cases of bottled wine and 658,454 gallons of bulk wine in various stages of the aging

June 30, 2024, wine inventory included 183,974 cases of bottled wine and 456,315 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 57,908 cases during the three months ended March 31, 2024.

Winery bottled 138,253 cases during the six months ended June 30, 2024.

Valley Vineyards continues to receive positive recognition through national magazines, regional publications, local newspapers and online

bloggers including the accolades below.

Suckling rated the Companys 2021 Elton Pinot Noir 92 points and the 2021 Signature Cuvée Pinot Noir 91 points.

rated the Companys 2021

Estate Pinot Noir 91 points, Dijon Clone Chardonnay 91 points and the 2022 Pinot Gris 90 points.

Bargreen rated the Companys 2020 Domaine Willamette Méthode Traditionnelle Brut Rosé, 2022 Tualatin Estate Chardonnay,

2021 Mètis Red Blend and 2022 Dry Riesling all 92 points.

Bargreen also scored the 2022 Dry Gewürztraminer at 91 points.

in the Salem Hills clinched the award for the Best Wine Tasting Room in the country

in USA Todays 10 Best Readers Choice Awards.

The company also received the award for #2

Best Wine Club in the nation.

Enthusiast Magazine awarded the Companys Willamette Valley Vineyards 2021 Bernau Block Pinot Noir 93 points and the 2022 Dijon

Clone Chardonnay was also awarded 91 points.

Sunset International Wine Competition awarded Gold and 93 points to 2022 Estate

Chardonnay, 2022 White Pinot Noir was also awarded Gold/Best of Class and 90 points.

Suckling rated the 2021 Elton Chardonnay 91 points.

OF OPERATIONS

revenue for the three months ended March 31, 2024 and 2023 was $8,803,080 and $8,308,940, respectively, an increase of $494,140, or 5.9%,

revenue for the three months ended June 30, 2024 and 2023 were $10,332,358 and $10,726,243, respectively, a decrease of $393,885, or 3.7%,

in the current year period over the prior year period.

This increase was caused by an increase in revenues from direct sales of

$214,507 and an increase in revenues from shipments to distributors of $279,633 in the current years three-month period over the

same period in the prior year.

The increase in

direct sales to consumers was primarily the result of higher wine club revenues and having an additional tasting room open in 2024 when

compared to 2023.

The increase in revenue from the distributors was primarily attributed to higher

prices in the current year three-month period over the same period in the prior year.

of sales for the three months ended March 31, 2024 and 2023 was $3,530,358 and $3,830,477, respectively, a decrease of $300,119, or 7.8%,

This decrease was caused by a decrease in

sales through distributors of $597,059 partly offset by an increase in direct sales of $203,174 in the current year three-month period

over the prior year period.

The decrease in revenue from sales through distributors was primarily related to lower case sales

in this market.

The increase in direct sales to consumers was primarily the result of opening a new tasting room in late 2023.

revenue for the six months ended June 30, 2024 and 2023 were $19,135,438 and $19,035,183, respectively, an increase of $100,255, or 0.5%,

in the current year period over the prior year period.

This increase was caused by an increase

in revenues from direct sales of $417,682 partly offset by a decrease in revenues from sales through distributors of $317,427 in the

current year period over the prior year period.

The increase in revenues from direct sales to consumers was primarily the result

of an extra tasting room in the current year.

The decrease in sales through distributors was primarily the result of a decrease in off-premise

of Sales for the three months ended June 30, 2024 and 2023 were $3,860,668 and $4,475,665, respectively, a decrease of $614,997, or 13.7%,

in the current period over the prior year period.

This change was primarily the result of the change in the mix of products sold in the

first quarter of 2024 when compared to the same quarter in 2023.

profit for the three months ended March 31, 2024 and 2023 was $5,272,722 and $4,478,463, respectively, an increase of $794,259, or 17.7%,

in the first quarter of 2024 over the same quarter in the prior year.

This increase was primarily the result of a combination of an increase

in direct sales combined with higher margins from our sales through distributors in the first three months of the current year compared

to the same period in 2023.

profit as a percentage of net sales for the three months ended March 31, 2024 and 2023 was 59.9% and 53.9%, respectively, an increase

of 6.0 percentage points in the current quarter over the same quarter in the prior year.

The increase was primarily the result of the

higher prices charged for our products sold through distributors in the current quarter.

This change was primarily the result of fewer products sold in the current quarter

compared to the same quarter last year.

Cost of Sales for the six months ended June 30, 2024 and 2023 were $7,391,026 and $8,306,142,

respectively, a decrease of $915,116 or 11.0%, in the current period over the prior year period.

This change was primarily the result

of a reduction in product sales in the first six months of 2024 when compared to the same period in 2023.

profit as a percentage of net sales for the three months ended June 30, 2024 and 2023 was 62.6% and 58.3%, respectively, an increase

of 4.3 percentage points in the current year period over the prior year period, mostly as a result of higher prices charged for products

compared to the same quarter of 2023.

Gross profit as a percentage of net sales for the six months ended June 30, 2024 and 2023 was 61.4%

and 56.4%, respectively, an increase of 5.0 percentage points in the current year period over the prior year period.

The increase was

primarily the result of higher prices being charged for products and a higher percentage of sales coming from direct sales in the first

six months of 2024 compared to the same period in the prior year.

General and Administrative Expenses

general and administrative expenses for the three months ended March 31, 2024 and 2023 was $5,875,299 and $5,453,413, respectively, an

increase of $421,886, or 7.7%, in the current quarter over the same quarter in the prior year.

This increase was primarily the result

of an increase in selling expenses of $44,202, or 1.1% and an increase in general and administrative expenses of $377,684, or 25.7% in

the current quarter compared to the same quarter last year.

Selling expenses increased in 2024 compared to 2023 primarily as a result

of having an additional tasting room location in 2024.

General and administrative expenses increased in the first quarter of 2024 compared

to the same quarter of 2023 primarily as a result of higher legal costs.

expense for the three months ended March 31, 2024 and 2023 was $229,687 and $124,422, respectively, an increase of $105,265 or 84.6%,

in the first quarter of 2024 over the same quarter in the prior year.

The increase in interest expense for the first quarter was primarily

the result of higher debt and higher interest rates compared to the first quarter of 2023.

income tax benefit for the three months ended March 31, 2024 and 2023 was $212,407 and $280,963, respectively, a decrease of $68,556

or 24.4%, in the first quarter of 2024 over the same quarter in the prior year, primarily as a result of a lower pre-tax loss in the

first quarter of 2024, compared to the same quarter in 2023.

The Companys estimated federal and state combined income tax rate

for the three months ended March 31, 2024 and 2023 was 28.9% and 27.4% respectively.

loss for the three months ended March 31, 2024 and 2023 was $521,805 and $744,823, respectively, a decrease of $223,018, or 29.9%, in

the first quarter of 2024 over the same quarter in the prior year.

The decrease in net loss for the first quarter of 2024, compared to

the comparable period in 2023, was primarily the result of higher prices of products sold in 2024.

general and administrative expenses for the three months ended June 30, 2024 and 2023 was $5,934,784 and $5,941,739 respectively, a decrease

of $6,955, or 0.1%, in the current quarter over the same quarter in the prior year.

This decrease was primarily the result of a decrease

in selling and marketing expenses of $11,872, or 0.3% being partially offset by an increase in general and administrative expenses of

$4,917, or 0.3% in the current quarter compared to the same quarter last year.

Selling, general and administrative expense for the six

months ended June 30, 2024 and 2023 was $11,810,083 and $11,395,152, respectively, an increase of $414,931, or 3.6%, in the current year

period over the prior year period.

This increase was primarily the result of an increase in selling and marketing expenses of $32,330,

or 0.4% combined with an increase in general and administrative expenses of $382,601, or 12.5% in the current year period compared to

the same period in 2023.

General and administrative expenses increased in the first six months of 2024 compared to the same period in

the prior year primarily as a result of higher legal costs.

expense for the three months ended June 30, 2024 and 2023 was $263,694 and $164,610, respectively, an increase of $99,084 or 60.2%, in

the second quarter of 2024 over the same quarter in the prior year.

Interest expense for the six months ended June 30, 2024 and 2023

was $493,381 and $289,032, respectively, an increase of $204,349 or 70.7%, in the current year period over the prior year period.

increase in interest expense for the second quarter and first six months of 2024 was primarily the result of increased debt compared

to the second quarter and first six months of 2023.

income tax expense for the three months ended June 30, 2024 and 2023 was $79,775 and $40,911, respectively, an increase of $38,864 or

95.0%, in the second quarter of 2024 over the same quarter in the prior year mostly as a result of the higher pre-tax income in the second

quarter of 2024, compared to the same quarter in 2023.

The Companys estimated federal and state combined income tax rate was 28.9%

and 27.4% for the three months ended June 30, 2024 and 2023, respectively.

The income tax benefit for the six months ended June 30, 2024

and 2023 was $132,632 and $240,052, respectively, a decrease of $107,420 or 44.7% in the current year period over the prior year period,

mostly a result of lower pre-tax loss in the first six months of 2024, compared to the same period in 2023.

The Companys estimated

federal and state combined income tax rate was 28.9% and 27.4% for the six months ended June 30, 2024 and 2023, respectively.

Income (Loss)

income for the three months ended June 30, 2024 and 2023 was $195,978 and $108,453, respectively, an increase of $87,525, or 80.7%, in

the second quarter of 2024 over the same quarter in the prior year.

Net loss for the six months ended June 30, 2024 and 2023 was $325,827

and $636,370, respectively, a decrease of $310,543, or 48.8%, in the current year period over the prior year period.

The increase in

net income for the second quarter and decrease in net loss for the first half of 2024, compared to the comparable periods in 2023, was

primarily the result of higher prices for products sold in 2024.

Loss Applicable to Common Shareholders

loss applicable to common shareholders for the three months ended March 31, 2024 and 2023 was $1,084,982 and $1,256,542, respectively,

a decrease of $171,560, or 13.7%, in the first quarter of 2024 over the same quarter in the prior year.

The decrease in loss applicable

to common shareholders in the first quarter of 2024, compared to the same period of 2023, was the result of a lower net loss being partially

offset by a higher accrued preferred stock dividend in the current period.

loss applicable to common shareholders for the three months ended June 30, 2024 and 2023 was $367,271 and $403,267, respectively, a decrease

of $35,996, or 8.9%, in the second quarter of 2024 over the same quarter in the prior year.

Net loss applicable to common shareholders

for the six months ended June 30, 2024 and 2023 was $1,452,253 and $1,659,809, respectively, a decrease of $207,556, or 12.5%, in the

current year period over the prior year period.

The decrease in loss applicable to common shareholders in the second quarter and the

first six months of 2024, compared to the same period of 2023, was the result of a lower net loss being partially offset by a higher

accrued preferred stock dividend in the current period.

and Capital Resources

March 31, 2024, the Company had a working capital balance of $21.6 million and a current working capital ratio of 2.87:1.

March 31, 2024, the Company had a cash balance of $256,472.

June 30, 2024, the Company had a working capital balance of $22.8 million and a current working capital ratio of 3.08:1.

June 30, 2024, the Company had a cash balance of $279,807.

At December 31, 2023, the Company had a cash balance of $238,482.

cash used for operating activities in the three months ended March 31, 2024 was $3,012,769.

Cash used in operating activities for the

three months ended March 31, 2024 was primarily associated with reduced grapes payable and increased inventories, being partially offset

by depreciation and amortization.

cash used in investing activities in the three months ended March 31, 2024 was $330,298.

Cash used in investing activities for the three

months ended March 31, 2024 consisted of cash used on property and equipment and vineyard development costs.

cash generated from financing activities in the three months ended March 31, 2024 was $3,361,057.

cash used for operating activities in the six months ended June 30, 2024 was $2,212,072.

Cash used in operating activities for the six

months ended June 30, 2024 was primarily associated with reduced grapes payable and increased inventories, being partially offset by

depreciation and amortization.

cash used in investing activities in the three months ended June 30, 2024 was $1,188,276.

Cash used in investing activities for the six

months ended June 30, 2024 consisted of cash used on property and equipment and vineyard development costs.

cash generated from financing activities in the six months ended June 30, 2024 was $3,441,673.

Cash generated from financing activities

for the three months ended March 31, 2024 primarily consisted of proceeds from the issuance of Preferred Stock and proceeds from the

line of credit and long-term debt, being partially offset by the repayment of long-term debt.

for the six months ended June 30, 2024 primarily consisted of proceeds from the issuance of Preferred Stock and proceeds from long-term

debt, being partially offset by the repayment of long-term debt.

December of 2005, the Company entered into a revolving line of credit agreement with Umpqua Bank (the Credit Agreement)

7 unchanged sentences

The Company had an outstanding line of credit balance of $2,334,415

at March 31, 2024, at an interest rate of 8.0%, and an outstanding line of credit balance of $2,684,982 at December 31, 2023, at an interest

at June 30, 2024, at an interest rate of 8.0%, and an outstanding line of credit balance of $2,684,982 at December 31, 2023, at an interest

rate of 8.0%.

4 unchanged sentences

this violation until the next measurement date of December 31, 2024.

of March 31, 2024, the Company had a 15-year installment note payable of $1,074,712, due in quarterly payments of $42,534, associated

of June 30, 2024, the Company had a 15-year installment note payable of $1,049,587, due in quarterly payments of $42,534, associated

with the purchase of property in the Dundee Hills AVA.

of March 31, 2024, the Company had a total long-term debt balance of $9,962,186, including the portion due in the next year, owed to

AgWest, exclusive of debt issuance costs of $102,677.

As of December 31, 2023, the Company had a total long-term debt balance of $7,590,659,

of June, 2024, the Company had a total long-term debt balance of $10,832,629, including the portion due in the next year, owed to AgWest,

exclusive of debt issuance costs of $99,365.

As of December 31, 2023, the Company had a total long-term debt balance of $7,590,659, exclusive

of debt issuance costs of $105,989.

Company believes that cash flow from operations and funds available under the Companys existing credit facilities will be sufficient

3 unchanged sentences

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-Q

Item 1. Financial Statements