What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-03-25 compared with 2024-03-26 · 90 added, 91 removed, 286 unchanged (39% of the section changed)

44 unchanged sentences

Sales through the internet and wine club sales are recognized

when the product has shipped to the customer.

when the product has shipped to the customer or is ready for the scheduled pickup.

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

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no longer suitable for use or marketable, the cost of that inventory is recognized in cost of sales at the time of such determination.

Accounting Policies and Estimates

Development – The Company capitalizes internal vineyard development costs prior to the vineyard land becoming fully productive.

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The Company had 11,183 wine club memberships for the year ended December

31, 2023, a net increase of 1,540 when compared to 2022.

31, 2024, a net decrease of 358 when compared to 2023.

Additionally, the Companys Preferred Stock sales since August 2015 have

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Company sold approximately 186,419 and 191,619 cases of produced wine during the years ended December 31, 2024 and 2023, respectively,

an increase of 4,248 cases, or 2.3% in the current year over the prior year.

The increase in case sales was the result of more direct

to consumer sales in 2023 when compared to 2022.

a decrease of 5,200 cases, or 2.7% in the current year over the prior year.

The decrease in case sales was the result of lower sales

to wholesalers in 2024 when compared to 2023.

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

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compared to 2023

Net loss was $1,198,593 and $646,492, for the years

ended December 31, 2023 and 2022, respectively, an increase of $552,101, or 85.4%, for the year ended December 31, 2023 over the prior

The primary reason for this increase was a higher gross profit from additional sales revenue, being more than offset by higher

operating expenses.

This was primarily related to higher tasting room expenses as a result of some locations being open for longer for

the year ended December 31, 2023, compared to the previous year.

Net loss applicable to common shareholders was $3,245,690

and $2,512,943, for the years ended December 31, 2023 and 2022, respectively, an increase of $732,747, or 29.2%, for the year ended December

31, 2023 over the prior year period.

This increase was primarily driven by a higher net loss and higher preferred stock dividends.

loss was $117,894 and $1,198,593, for the years ended December 31, 2024 and 2023, respectively, a decrease of $1,080,699, or 90.2%, for

the year ended December 31, 2024 over the prior year period.

The primary reason for this decrease was a higher gross profit from additional

sales revenue at higher margins in the current year being partially offset by higher interest expense in 2024 compared to the previous

loss applicable to common shareholders was $2,370,835 and $3,245,690, for the years ended December 31, 2024 and 2023, respectively, a

decrease of $874,855, or 27.0%, for the year ended December 31, 2024 over the prior year period.

This decrease was primarily driven by

a lower net loss, being partially offset by higher preferred stock dividends.

Company had net sales revenues of $39,782,442 and $39,136,114 for the years December 31, 2024 and 2023, respectively, an increase of

$5,202,033, or 15.3%, for the year ended December 31, 2023 over the prior year period primarily as a result of an increase in revenue

from direct sales of $4,786,730, or 30.4% in 2023 compared to 2022, and an increase in revenue from sales to distributors of $415,303

or 2.3% in 2023 compared to 2022.

$646,328, or 1.7%, for the year ended December 31, 2024 over the prior year period primarily as a result of an increase in revenue from

direct sales, net of excise taxes, of $736,057, or 3.6% in 2024 compared to 2023, being partially offset by a decrease in revenue from sales to distributors

of $89,729 or 0.5% in 2024 compared to 2023.

Company has three primary sales channels:

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distributors.

During 2023, revenues from retail sales increased 31.0%, revenues from in-state sales decreased 5.0%, and revenues from

out-of-state sales increased 6.1%, compared to 2022.

During 2024, revenues from retail sales increased 3.8%, revenues from in-state sales increased 13.8%, and revenues from

out-of-state sales decreased 6.7%, compared to 2023.

sales included $0 and $69,924 of bulk wine and grape sales in the years ended December 31, 2024 and 2023, respectively, and represented

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The increase in retail sales revenues in 2024 compared to 2023

2022 was mostly a result of increased revenues from new retail locations being open for longer during 2023.

Wine/miscellaneous sales revenues for the years ended December 31, 2023 and 2022 were $69,924 and $97,652, respectively, a decrease of

$27,728, or 28.4%, for the year ended December 31, 2023, over the prior year period.

sales revenues for the years ended December 31, 2023 and 2022 were $5,686,517 and $5,987,410, respectively, a decrease of $300,893, or

5.0%, for the year ended December 31, 2023 over the prior year period.

was mostly a result of increased revenues from a new retail location being open for longer during 2024.

sales revenues for the years ended December 31, 2024 and 2023 were $6,470,363 and $5,686,517, respectively, an increase of $783,846,

or 13.8%, for the year ended December 31, 2024 over the prior year period.

sales revenues for the years ended December 31, 2024 and 2023 were $12,251,996 and $13,131,363, respectively, a decrease of $879,367,

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

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for the taxes upon the removal of product from the Companys warehouse on a per gallon basis.

The Company also pays taxes on the

The Company also pays taxes on its

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, 2023 and 2022 were $431,714 and $312,103, respectively, an increase of $119,611, for the year ended December 31, 2023 over

December 31, 2024 and 2023 were $405,392 and $431,714, respectively, a decrease of $26,322, for the year ended December 31, 2024 over

the prior year period.

This increase was due primarily to a larger crop processed and the timing of removals in 2023.

of Sales was $16,578,986 and $15,119,985 for the years ended December 31, 2023 and 2022, respectively, an increase of $1,459,001, or

This decrease was due primarily to the timing of removals in 2024.

of Sales was $15,586,986 and $16,578,986 for the years ended December 31, 2024 and 2023, respectively, a decrease of $992,000, or 6.0%,

for the year ended December 31, 2024, over the prior year period.

This change was primarily the result of increased sales and the

mix of sales between direct and distributors between the two periods.

This change was primarily the result of a reduction in the volume of

product sold and lower unit costs when compared to the prior year.

profit was $24,195,456 and $22,557,128 for the years ended December 31, 2024 and 2023, respectively, an increase of $1,638,328 or 7.3%,

for the year ended December 31, 2024 over the prior year period.

This increase was generally driven by an increase in sales revenues

This increase was primarily the result of higher prices being charged

for products and a higher percentage of total sales coming from direct sales in 2024 compared to the prior year.

gross margin percentage was 60.8% and 57.6% for the years ended December 31, 2024 and 2023, respectively, an increase of 3.2 percentage

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result of higher direct sales prices and more sales coming from direct to consumer sales in 2024.

Selling, general and administrative expenses were

$23,764,330 and $19,360,514 for the years ended December 31, 2023 and 2022, respectively, an increase of $4,403,816, or 22.7%, for the

year ended December 31, 2023 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 newer locations being open for longer in 2023.

Loss from operations was $1,207,202 and $546,418 for

the years ended December 31, 2023 and 2022, respectively, an increase of $660,784, or 120.9%, for the year ended December 31, 2023 compared

to the prior year period.

This increase included higher depreciation costs of

$1,232,459 in 2023 mostly relating to the investment in new locations.

income was $27 and $5,496 for the years ended December 31, 2023 and 2022, respectively, a decrease of $5,469 for the year ended December

31, 2023 over the prior year.

Interest expense was $594,106 and $367,745 for the years ended December 31, 2023 and 2022, respectively,

an increase of $226,361, or 61.6%, for the year ended December 31, 2023 over the prior year period.

The increase in interest expense

was mainly due to the increase in average loan balances in 2023 compared to the previous year.

general and administrative expenses were $23,623,598 and $23,764,330 for the years ended December 31, 2024 and 2023, respectively, a

decrease of $140,732, or 0.6%, for the year ended December 31, 2024 over the prior year period.

This decrease was primarily as a result

of lower labor selling costs in 2024.

from operations was $571,858 and $(1,207,202) for the years ended December 31, 2024 and 2023, respectively, an increase of $1,779,060,

or 147.4%, for the year ended December 31, 2024 compared to the prior year period.

This increase was primarily the result of a higher

gross profit and lower labor operating expenses in 2024.

expense, net was $1,016,180 and $594,079 for the years ended December 31, 2024 and 2023, respectively, an increase of $422,101, or 71.1%,

for the year ended December 31, 2024 over the prior year period.

The increase in interest expense was mainly due to the increase in average

loan balances in 2024 compared to the previous year.

income, net, was $99,629 and $114,827 for the years ended December 31, 2024 and 2023, respectively, a decrease of $15,198, or 13.2%,

for the year ended December 31, 2024 over the prior year period.

Provision for income tax benefit was $487,861 and

$119,646 for the years ended December 31, 2023 and 2022, respectively, an increase of $368,215, for the year ended December 31, 2023 over

the prior year period.

This increase in income tax benefit in 2023 compared to 2022 was primarily the result of a higher loss from operations

in 2023 and an increase in the effective tax rate in 2023.

Loss per common share after preferred dividends was

$0.65 and $0.51 for the years ended December 31, 2023 and 2022, respectively, an increase of $0.14, or 29.2%, for the year ended December

31, 2023 over the prior year period.

The primary reason for this increase was an increase in net loss and higher preferred stock dividends

in 2023 compared to 2022.

for income tax benefit was $226,799 and $487,861 for the years ended December 31, 2024 and 2023, respectively, a decrease of $261,062,

or 53.5%, for the year ended December 31, 2024 over the prior year period.

This decrease in income tax benefit in 2024 compared to 2023

was primarily the result of a higher income from operations in 2024 compared to 2023 along with the impact of a change in the tax rate

related to amended returns to claim the credit for employer social security and medicare taxes paid on certain employee tips.

per common share after preferred dividends was $0.48 and $0.65 for the years ended December 31, 2024 and 2023, respectively, a decrease

of $0.17, or 26.0%, for the year ended December 31, 2024 over the prior year period.

The primary reason for this decrease was a lower

net loss partially offset by higher preferred stock dividends in 2024 compared to 2023.

Company had cash balances of $320,883 at December 31, 2024, and $238,482 at December 31, 2023.

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credit balance of $2,405,815 at December 31, 2024, and $2,684,982 at December 31, 2023.

The Company had a bank overdraft of $393,416 at

December 31, 2023, and no overdraft at December 31, 2022.

The Company had a bank overdraft of $473,016

at December 31, 2024, and $393,416 at December 31, 2023.

2024, the Companys earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 71.1% to $3,995,135

from $1,912,012 in 2022, primarily as a result of increased depreciation costs in 2023.

from $2,334,629 in 2023, primarily as a result of a lower net loss in 2024.

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

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Interest expense

Interest income

Income tax benefit

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of Company-produced wine during the years ended December 31, 2024 and 2023, respectively.

This represents an increase of approximately

This represents a decrease of approximately

5,200 cases, or 2.7%, 2024 compared to 2023.

The increase in case sales in 2023 compared to 2022 was the result of an increase in direct-to-consumer

The decrease in case sales in 2024 compared to 2023 was the result of a decrease in sales

to distributors.

Company has three primary sales channels:

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of wine production.

During 2023, the Company did not 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.

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throughout 2024 including the accolades below.

Suckling rated the Companys 2021 Estate Pinot Noir 91 points, Dijon Clone Chardonnay 91 points and the 2022 Pinot Gris 90 points.

Enthusiast Magazine rated the Companys 2021 Estate Pinot Noir 91 points, 2021 Dijon Clone Pinot Noir 90 points and 2021 Founders

Reserve Pinot Noir 90 points.

The Companys 2022 Whole Cluster Pinot Noir 90 points, 2022 White Pinot Noir 91 points, 2022 Maison

Bleue Voltigeur Viognier 90 points, 2020 Métis Red Blend 92 points and Cellar Selection.

International Wine Competition awarded the Companys 2022 Whole Cluster Rosé of Pinot Noir 94 points with a Gold Medal.

Magazines Best of the Northwest rated the Companys 2022 Pinot Blanc a Double Gold.

Fine Wine Challenge awarded the Companys 2019 Griffin Creek Cabernet Franc and 2019 Domaine Willamette Brut both Gold.

tasting room at the Companys Estate Winery in the Salem Hills, Oregon was awarded the Best Wine Tasting Room in

the country by USA Today in their 10 Best Readers Choice Awards.

The Company was also awarded the #2 Best Wine

Club in the nation by USA Today.

Companys Willamette Valley Vineyards 2021 Elton Pinot Noir received a 93 score, the 2022 Reisling scored 92 points, 2022 Estate

Pinot Noir scored 91 points, 2022 Dijon Clone Chardonnay scored 90 points, 2022 Riesling scored 92 points and the 2022 Whole Cluster

Pinot Noir scored 90 points from the International Wine Report.

International Wine Report also scored the 2019 Pambrun Chrysologue at 93 points, 2021 Domaine Willamette Brut scored 92 points, 2022

Maison Bleue Voltigeur Viognier 92 points and 2021 Maison Bleue Frontière Syrah 91 points.

Companys 2021 Bernau Block Pinot Noir received a score of 95 from Beverage Dynamics.

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.

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 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, 2021

Elton 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 and

the 2023 Pinot Blanc and 2022 Tualatin Estate White

Pinot Noir 92 points.

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

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cash used in operating activities for the year ended December 31, 2024 was $3,237,743, which resulted primarily from a net loss in 2024

as well as increased inventory and lease liabilities.

This was partially offset by increased depreciation, a reduction in accounts receivable

and an increase in grapes payable.

cash used in investing activities for the year ended December 31, 2023 was $4,726,970, which primarily consisted of cash used on construction

activity and vineyard development costs.

as well as increased inventory and lower grapes payable.

This was partially offset by depreciation, and an increase in accrued expenses.

cash used in investing activities for the year ended December 31, 2024 was $2,089,705, which primarily consisted of cash used on land

purchase, property development and vineyard development costs.

cash provided from financing activities for the year ended December 31, 2024 was $5,409,849, which primarily consisted of proceeds from

the issuance of Preferred Stock and an increase in the line of credit and long term debt, being partially offset by the payment of a

preferred stock dividend.

long term debt, being partially offset by the payment of a preferred stock dividend and payments on long term debt.

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

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2023 the line of credit was renewed for an additional two years.

The Company had an outstanding line of credit balance

of $2,684,982 at December 31, 2023, at an interest rate of 8.0%, and an outstanding line of credit balance of $166,617 at December 31,

2022, at an interest rate of 6.5%.

As of December 31, 2023, the Company was out of compliance with

a debt covenant contained in the Credit Agreement.

The Company has received a waiver from Umqua Bank waiving this violation until the

next measurement date of December 31, 2024.

of December 31, 2023, the Company had a total long-term debt balance of $7,590,659 owed to AgWest, including the portion due in the next

year, exclusive of debt issuance costs of $105,989.

The Company had an outstanding line of credit balance of $2,405,815

at December 31, 2024, at an interest rate of 7.0%, and an outstanding line of credit balance of $2,684,982 at December 31, 2023, at an

interest rate of 8.0%.

of December 31, 2024, the Company had a total long-term debt balance of $14,042,910 owed to AgWest, including the portion due in the

next year, exclusive of debt issuance costs of $178,908.

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

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invest in winery equipment to increase the Companys winemaking capacity, acquire new vineyard land for future development and

provide operating capital.

finance new tasting room locations.

of December 31, 2024, the Company had an installment note payable of $995,968, due in quarterly payments of $42,534 through February

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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