What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-25 compared with 2024-03-26 · 231 added, 232 removed, 597 unchanged (44% of the section changed)

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Notes to Financial Statements

Report of Independent Registered Public

Accounting Firm

of Independent Registered Public Accounting Firm

the Shareholders and the Board of Directors of

Willamette Valley Vineyards, Inc.

Opinion on the Financial Statements

on the Financial Statements

We have audited the accompanying balance sheets of Willamette Valley

Vineyards, Inc.

(the “Company”) as of December 31, 2023 and 2022, the related statements of operations,

shareholders’ equity, and cash flows for the years then ended and the related notes (collectively referred to as the

“financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for

the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public

accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to

be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations

of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit

of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control

over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control

over financial reporting.

Vineyards, Inc (the Company) as of December 31, 2024, and 2023, the related statements of operations, shareholders

equity and cash flows for the years then ended, and the related notes (collectively referred to as the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31,

2024, and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles

generally accepted in the United States of America.

financial statements are the responsibility of the Companys management.

Our responsibility is to express an opinion on the Companys

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Companys internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material

misstatement of the financial statements, whether due to error or fraud, and performing procedures to respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included

evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation

of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters

arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee

and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,

subjective, or complex judgments.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures to respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be

communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Moss Adams LLP

Portland, Oregon

Moss Adams LLP

March 25, 2025

We have served as the Company’s auditor since 2004.

have served as the Companys auditor since 2004.

WILLAMETTE VALLEY VINEYARDS, INC.

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$ 109,017,140

$ 105,708,149

LIABILITIES AND SHAREHOLDERS EQUITY

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Total shareholders equity

LIABILITIES AND SHAREHOLDERS EQUITY

TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

$ 109,017,140

$ 105,708,149

accompanying notes are an integral part of the financial statements.

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Total operating expenses

LOSS FROM OPERATIONS

INCOME (LOSS) FROM OPERATIONS

( 1,207,202 )

OTHER INCOME (EXPENSE)

Interest income

Interest expense

Interest expense, net

( 1,016,180 )

Other income, net

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( 2,047,097 )

LOSS APPLICABLE TO COMMON SHAREHOLDERS

NET LOSS APPLICABLE TO COMMON SHAREHOLDERS

$ ( 2,370,835 )

$ ( 3,245,690 )

Loss per common

share after preferred dividends, basic and diluted

Weighted-average

number of common shares outstanding, basic and diluted

Loss per common share after preferred dividends, basic and diluted

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

accompanying notes are an integral part of the financial statements.

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( 2,047,097 )

( 1,198,593 )

Balance at December 31, 2023

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( 2,252,941 )

( 1,198,593 )

Balance at December 31, 2024

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( 6,113,280 )

( 3,124,749 )

Prepaid expenses and other current assets

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Proceeds from bank overdraft

Proceeds from line of credit

Proceeds from (payments on) line of credit

Payment of loan fees

Payment on long-term debt

( 3,547,749 )

Proceeds from long-term debt

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Payment of preferred stock dividend

Net cash provided by financing activities

Net cash from financing activities

NET CHANGE IN CASH AND CASH EQUIVALENTS

( 13,408,609 )

CASH AND CASH EQUIVALENTS, beginning of year

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December 31, 2024, one customer accounted for approximately 31 % of accounts receivable.

At December 31, 2022, two customers accounted

for approximately 27 % and 14 % of accounts receivable.

At December 31, 2023, one customer accounted

for approximately 27 % of accounts receivable.

comprehensive income – The nature of the Companys business and related transactions do not give rise to other comprehensive

and cash equivalents – Cash and cash equivalents include money market funds.

receivable – The

Company performs ongoing credit evaluations of its customers and does not require collateral.

A reserve is maintained for potential

credit losses.

The allowance for credit losses is based on an assessment of the collectability of customer accounts.

regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts

receivable balances, and current economic conditions that may affect a customers ability to pay.

The Company has credit risk

associated with uncollateralized trade accounts receivable from all operations totaling $ 2,994,829 as

of December 31, 2023, net of the allowance for credit losses.

The Company had credit risk associated with uncollateralized trade

accounts receivable from all operations totaling $ 4,226,948 and $ 3,163,375 as of December 31, 2022 and 2021, net of the allowance

for credit losses.

The allowance for credit losses is further discussed in Note 2.

receivable – The Company performs ongoing credit evaluations of its customers and does not require collateral.

is maintained for potential credit losses.

The allowance for credit losses is based on an assessment of the collectability of customer

The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of

the accounts receivable balances, and current economic conditions that may affect a customers ability to pay.

The Company has

credit risk associated with uncollateralized trade accounts receivable from all operations totaling $ 3,151,810 as of December 31, 2024,

net of the allowance for credit losses.

The Company had credit risk associated with uncollateralized trade accounts receivable from all

operations totaling $ 2,994,829 and $ 4,226,948 as of December 31, 2023 and 2022, net of the allowance for credit losses.

The allowance

for credit losses is further discussed in Note 2.

– For Company produced wines, after a portion of the vineyard becomes commercially productive, the annual crop and production

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and ready for sale.

The cost of finished goods is recognized as cost of

sales when the wine product is sold.

Finished goods and work-in-process inventories are stated at the lower of first-in, first-out cost

or net realizable value by variety.

Winemaking and packaging materials are stated at the lower of average cost or net realizable value.

Net realizable value is the value of an asset that can be realized upon the sale of the asset, less a reasonable estimate of the costs

associated with either the eventual sale or the disposal of the asset in question.

cost of finished goods is recognized as cost of sales when the wine product is sold.

Finished goods and work-in-process inventories are

stated at the lower of first-in, first-out cost or net realizable value by variety.

Winemaking and packaging materials are stated at

the lower of average cost or net realizable value.

Net realizable value is the value of an asset that can be realized upon the sale of

the asset, less a reasonable estimate of the costs associated with either the eventual sale or the disposal of the asset in question.

accordance with general practices in the wine industry, wine inventories are generally included in current assets in the accompanying

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over 3 to 15 years, depending on the classification of the asset.

Leasehold improvements are depreciated over the shorter of the term of

the lease or useful life.

Leasehold improvements are depreciated over the shorter of the term

of the lease or useful life.

Depreciation is discussed further in Note 4.

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As of December 31, 2024, the Company has recorded deferred revenue in the amount

of $ 490,523, which

is included in unearned revenue on the balance sheet.

As of December 31, 2022, and December 31, 2021, the Company has recorded deferred

revenue in the amount of $ 335,431 and $ 255,376 , respectively, which is included in unearned revenue on the balance sheet.

that have been issued but not used are also treated as unearned revenue and were $ 1,480,138

as of December 31, 2023.

Gift cards that have been issued but not used are also treated as unearned

revenue and were $ 1,106,970 and $ 682,881 as of December 31, 2022 and 2021, respectively.

of $ 616,143 , which is included in unearned revenue on the balance sheet.

As of December 31, 2023, and December 31, 2022, the Company

has recorded deferred revenue in the amount of $ 490,523 and $ 335,431 , respectively, which is included in unearned revenue on the balance

Dividend gift cards that have been issued but not used are also treated as unearned revenue and were $ 1,853,982 as of December

Dividend gift cards that have been issued but not used are also treated as unearned revenue and were $ 1,480,138 and $ 1,106,970

as of December 31, 2023 and 2022, respectively.

Sales Segment – Wholesale wine sales are through distributors and the Company recognizes revenue when the product is shipped,

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room sales are recognized as revenue at the point of sale and internet sales are recognized at time of shipment.

Hospitality sales, that

are paid in advance of the event, are accrued as unearned revenue, and are subsequently recognized as revenue in the period of the event.

Wine club sales are made under an agreement with the customer, which specifies the quantity and timing of the wine club shipment.

club charges are billed to the customers credit card, at the time of shipment, and revenue is then recognized.

Hospitality sales,

that are paid in advance of the event, are accrued as unearned revenue, and are subsequently recognized as revenue in the period of

Wine club sales are made under an agreement with the customer, which specifies the quantity and timing of the wine club

Wine club charges are billed to the customers credit card, at the time of shipment, and revenue is then recognized.

For Club Willamette the customer is charged a monthly subscription and 45% of the monthly fee is recognized by the Company in the

month billed.

As of December 31, 2024, the Company has recorded a liability for unused club points in the amount of $263,327, which

is included in unearned revenue on the balance sheet.

Company periodically sells bulk wine or grapes that either do not meet the Companys quality standards or are in excess of production

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For the years ended December 31,

31, 2023 and 2022, these costs, which are included in selling, general and administrative expenses were, $ 93,272

and $ 87,996 ,

respectively.

2024 and 2023, these costs, which are included in selling, general and administrative expenses were, $ 118,483 and $ 93,272 , respectively.

and handling costs – Amounts paid by customers to the Company for shipping and handling costs are included in net sales.

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Company does not currently have any finance leases.

Leases that have a term of twelve months or less upon commencement date are considered short-term in nature.

short-term leases are not included on the balance sheets and are expensed on a straight-line basis over the lease term, which commences

on the date we have the right to control the property.

Leases that have a term of twelve months or less upon commencement date are considered

short-term in nature.

Accordingly, short-term leases are not included on the balance sheets and are expensed on a straight-line basis

over the lease term, which commences on the date we have the right to control the property.

assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease

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adopted accounting pronouncements

June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

Instruments, and in May 2019 issued ASU 2019-05, Credit Losses (Topic 326):

Targeted Transition Relief (collectively referred to as Topic

Topic 326 requires the measurement of all expected credit losses for financial assets held at the reporting date based on

all relevant information, such as historical experience, current conditions, and reasonable and supportable forecasts that could impact

the collectability of the amounts.

Company adopted Topic 326 effective January 1, 2023, using the modified retrospective approach.

No cumulative effect adjustment was required

to opening retained earnings.

The Company measures expected credit losses of financial assets based on historical loss and other information

available to management.

These expected credit losses are recorded to an allowance for credit losses valuation account that is deducted

from accounts receivable to present the net amount expected to be collected on the financial assets in the balance

As of December 31, 2023, no change to allowance for credit losses was deemed necessary.

Recently issued accounting pronouncements

In November 2023, the Financial

Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment

Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures

about significant segment expenses.

The expanded annual disclosures are effective for our year ending December 31, 2024, and the expanded

interim disclosures are effective in 2025 and will be applied retrospectively to all prior periods presented.

The Company is currently

evaluating the impact that ASU 2023-07 will have on our consolidated financial statements.

In December 2023, the FASB

issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires, among other things, additional

disclosures primarily related to the income tax rate reconciliation and income taxes paid.

The expanded annual disclosures are effective

for our year ending December 31, 2025.

The Company is currently evaluating the impact that ASU 2023-09 will have on our consolidated

financial statements and whether we will apply the standard prospectively or retrospectively.

November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Segment Reporting (Topic 280):

to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, primarily through

enhanced disclosures about significant segment expenses.

The expanded annual disclosures are effective for our year ending December 31,

2024, and the expanded interim disclosures are effective in 2025 and were applied retrospectively to all prior periods presented.

issued accounting pronouncements

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires, among other

things, additional disclosures primarily related to the income tax rate reconciliation and income taxes paid.

The expanded annual disclosures

are effective for our year ending December 31, 2025.

The Company is currently evaluating the impact that ASU 2023-09 will have on our

consolidated financial statements and whether we will apply the standard prospectively or retrospectively.

November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income-Expense Disaggregation Disclosures

(Subtopic 220-40):

Disaggregation of Income Statement Expenses (ASU 2024-03).

ASU 2024-03 requires additional disclosures

about the nature of expenses included in the income statement, such as purchases of inventory, employee compensation, and depreciation.

ASU 2024-03 is effective for public business entities for annual periods beginning after December 15, 2026, and interim reporting periods

within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of

ASU 2024-03 on its financial statements and related disclosures.

2 – ACCOUNTS RECEIVABLE, NET

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in the allowance for credit losses are as follows:

of Changes in Allowance for Credit Losses

Year ended December 31,

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Total inventories

4 – PROPERTY AND EQUIPMENT

4 – PROPERTY AND EQUIPMENT, NET

and equipment consists of the following at December 31, 2024 and 2023:

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5 – LINE OF CREDIT FACILITY

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

against eligible accounts receivable and inventories, as defined in the agreement.

The revolving line bears interest at prime less 0.5%,

with a floor of 3.25% , is payable monthly, and is subject to renewal.

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

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

that allows borrowing up to $ 2,000,000 against eligible accounts receivable and inventories, as defined in the agreement.

The revolving

line bears interest at prime less 0.5%, with a floor of 3.25% , is payable monthly, and is subject to renewal.

In July 2021, the Company

renewed the Credit Agreement until July 31, 2023.

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

In July 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%.

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

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%.

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

net worth, debt-to-equity, and debt service coverage, as defined, and limits the level of acquisitions of property and equipment.

of December 31, 2023, 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, 2024.

of December 31, 2024, the Company was in compliance with these financial covenants.

In February 2025 the Company entered into an additional line of credit

agreement with AgWest that allows borrowings up to $4,350,000 against property defined in the agreement.

The line of credit bears interest

at 7.10% and has a maturity date of April, 2027.

6 – NOTES PAYABLE

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AgWest Loan #5

AgWest loan #6

AgWest loan Operating line #6

AgWest 15 year Note

Long-Term Debt, Gross

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Long-Term Debt

Company has three long term debt agreements with AgWest with an aggregate outstanding balance of $ 7,590,659 and $ 7,062,654 as of December

Company has four long term debt agreements with AgWest with an aggregate outstanding balance of $ 14,042,910 and $ 7,590,659 as of December

31, 2024 and 2023, respectively.

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of the loans, at annual fixed interest rates of 4.75 % and 5.21 % , and with maturity dates of 2028 and 2032, respectively.

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

The third loan bears interest at Northwest

Variable base, which was 7.80 % and 6.50 % at December 31, 2023, and 2022, respectively, with interest due annually and principal at maturity

on November 1, 2025.

The third loan

was repaid, and the fourth loan requires monthly principal and interest payments of $87,989 at an annual interest rates of 6.66%, and

with a maturity date of 2039.

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

These loans are collateralized against the property on the main estate in Salem.

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

weighted-average interest rates on the aforementioned borrowings for the years ended December 31, 2023 and 2022, was 6.19 % and 5.57 % respectively.

weighted-average interest rates on the aforementioned borrowings for the years ended December 31, 2024 and 2023, was 6.22 % and 6.19 %

respectively.

8 – SHAREHOLDERS EQUITY

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Permanent differences

State tax rate change

Prior year adjustments

Changes in tax rates and other

differences for the periods consist primarily of changes in non-deductible gifts, meals and entertainment as well as political contributions.

Changes in State Blended Tax Rate and Other

General Business Credit

in the tax rate are detailed in the table above.

Permanent differences for the periods consist primarily of changes in non-deductible

gifts, meals and entertainment as well as political contributions.

Changes in tax rate are detailed above.

The State tax rate change is related

to a decrease in apportionable income to the States.

claiming of general business credits related to amended returns to claim the credit for employer social security and medicare taxes paid

on certain employee tips which include carryforwards and permanent item addbacks have a disproportional impact on the rate.

deferred tax assets and (liabilities) at December 31 consist of:

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Net Operating Losses

Various accruals and deferred timing differences

Prepaid expenses

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( 4,033,750 )

Net deferred tax liability

General Business Credits

Section 163(j) Carryforward

Net noncurrent deferred tax liability

( 2,536,648 )

$ ( 2,911,618 )

Valuation allowance

( 2,536,648 )

( 2,911,618 )

Company recognizes the tax benefit from uncertain tax positions only if it is more likely than not that the tax positions will be sustained

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no valuation allowance has been recognized.

of December 31, 2023, the Company has federal net operating loss carryforward of approximately $ 4,944,891 that do not expire, state net

operating loss carryforwards of approximately $ 3,512,997 which will start expiring in 2033.

of December 31, 2024, the Company has federal net operating loss carryforward of $ 4,094,216 that do not expire, state net operating loss

carryforwards of $ 3,049,143 which will start expiring in 2033.

11 – RELATED PARTY TRANSACTIONS

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housing provided for its CEO.

The Company engages James Ellis a Board member for consulting services.

Company engages James Ellis a Board member for consulting services.

The amount of this compensation was $9,865 in 2024 and $9,446 in

The Willamette Wineworks lease discussed in Note

12 is with a related party.

The Company paid $ 136,863 and $ 128,919 related to this lease for the years ended December 31, 2024 and 2023,

respectively.

12 – COMMITMENTS AND CONTINGENCIES

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but, due to the nature of litigation, the ultimate outcome of any potential actions cannot presently be determined.

leases – Vineyard - In December

1999 , under a sale-leaseback agreement, the Company sold approximately 79 acres of the Tualatin Vineyards property with a net book value of approximately $1,000,000 for approximately $ 1,500,000

cash and entered into a 20 -year

operating lease agreement, with three five-year extension options, and contains an escalation provision of 2.5% per year.

Company extended the lease in January 2019 until January 2025.

This property is referred to as the Peter Michael

Vineyard and includes approximately 69 acres of producing vineyards.

leases – Vineyard - In December 1999, under a sale-leaseback agreement, the Company sold approximately 79 acres of the Tualatin

Vineyards property with a net book value of approximately $1,000,000 for approximately $ 1,500,000 cash and entered into a 20 year operating

lease agreement, with three five-year extension options, and contains an escalation provision of 2.5% per year.

The Company extended

the lease in January 2019 until January 2025.

The Company extended the lease in July 2024 until January 2030.

This property is referred

to as the Peter Michael Vineyard and includes approximately 69 acres of producing vineyards.

For right of use asset and liability calculations

the Company has concluded it is reasonably certain to extend available options through January 2035.

December 2004 , under a sale-leaseback agreement, the Company sold approximately 75 acres of the Tualatin Vineyards property with a net

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five-year extension options, for the vineyard portion of the property.

The first two five year extension has been exercised.

The lease contains a formula-based escalation provision with a maximum increase of 4% every three years.

This property is referred to as the Meadowview Vineyard and includes approximately 49 acres of producing vineyards.

The first two five year extensions have been exercised.

contains a formula-based escalation provision with a maximum increase of 4% every three years.

This property is referred to as the Meadowview

Vineyard and includes approximately 49 acres of producing vineyards.

For right of use asset and liability calculations the Company has

concluded it is reasonably certain to extend available options through November 2033.

February 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.

In June 2021 the Company 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.

This property includes 54 acres of producing vineyards and 2 additional plantable acres.

property includes 54 acres of producing vineyards and 2 additional plantable acres.

For right of use asset and liability calculations

the Company has concluded it is reasonably certain to extend available options through December 2031.

July 2008 , the Company entered into a 34 year lease agreement with a property owner in the Eola Hills for approximately 110 acres adjacent

2 unchanged sentences

Terms of this agreement contain rent increases,

that rises as the vineyard is developed, and contains an escalation provision of CPI plus 0.5% per year capped at 4%.

that rise as the vineyard is developed, and contains an escalation provision of CPI plus 0.5% per year capped at 4%.

This property is

referred to as part of Ingram Vineyard and includes 93 acres of producing vineyards and 17 additional plantable acres.

For right of use

asset and liability calculations the Company has concluded it is reasonably certain to extend available options through December 2053.

March 2017 , the Company entered into a 25 -year lease for approximately 17 acres of agricultural land in Dundee, Oregon.

This lease contains an annual payment that remains constant throughout the term of the lease.

This property

is referred to as part of Bernau Estate Vineyard and includes 9 acres of pre-production vineyards.

This lease contains

an annual payment that remains constant throughout the term of the lease.

This property is referred to as part of Bernau Estate Vineyard

and includes 9 acres of producing vineyards.

Leases – Non-Vineyard – In September 2018 , the Company renewed an existing lease for three years , with two one-year renewal

2 unchanged sentences

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

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

In January 2023, the

Company entered into a new lease to December 2027 with one five 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.

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

2023, the Company entered into a new lease to December 2027 with one five year renewal option, and defined payments over the term of

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

2020 , the Company entered into a lease for 5

years , with three five-year renewal options for a retail wine facility in Folsom, California, referred to as Willamette

The lease contains an escalation provision tied to the CPI not to exceed 3% per annum with increases not allowed in any

year being carried forward to the following years.

February 2020 , the Company entered into a lease for 5 years, with three five-year renewal options for a retail wine facility in Folsom,

California, referred to as Willamette Wineworks.

The lease contains an escalation provision tied to the CPI not to exceed 3% per annum

with increases not allowed in any year being carried forward to the following years.

In January 2025 the Company amended the renewal

options and extended the lease until February 2026.

For right of use asset and liability calculations the Company has concluded it is

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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:

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Other information

Cash paid for amounts included in the measurement of lease

Cash paid for amounts included in the measurement of lease liabilities,

Operating cash flows from operating leases - Vineyard

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2023, respectively.

2023, the Company concluded it was reasonably certain it would exercise the available extension options on certain leases as described

As a result, a remeasurement of the lease liability was completed resulting in an increase to the right-of-use assets and lease

liabilities in the amount of $2,979,145, which is included in the $3,674,710 disclosed above for the right-of-use assets obtained in exchange

for new operating lease liabilities.

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

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14 – 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 December, 31 2023 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 an 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 December

31, 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

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with an offering price of $4.85 per share.

Net proceeds of $3,687,564 have been received under these offering as of December, 31 2023

Net proceeds of $3,938,066 have been received under these offerings as of December 31, 2024

for the issuance of Preferred Stock.

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Distributor Sales include all sales through a third party where prices are given at a wholesale rate.

two segments reflect how the Companys operations are evaluated by senior management and the structure of its internal

financial reporting.

The accounting

policies of the two segments are the same as those described in the summary of significant accounting policies.

The Company does not

have intra-entity sales or transfers.

two segments reflect how the Companys operations are evaluated by senior management and the structure of its internal financial

The Company evaluates performance based on the gross profit of the respective business segments.

expenses that can be directly attributable to the segment, including depreciation of segment specific assets, are included, however,

All expense categories on

the statements of operations are significant and there are no other significant segment expenses that would require disclosure.

Selling expenses that can be directly attributable to the segment, including depreciation of segment specific assets, are included, however,

centralized selling expenses and general and administrative expenses are not allocated between operating segments.

Therefore, net

income (loss) information for the respective segments is not available.

Discrete financial information related to segment assets,

other than segment specific depreciation associated with selling, is not available and that information continues to be

Therefore, net income

(loss) information for the respective segments is not available.

Discrete financial information related to segment assets, other than

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

Companys Chief Executive Officer (CEO) uses results from operations to assess operating performance as compared to

prior results, the annual operating plan and our competitors.

The CEO uses this information to allocate future operating and capital

expenditures.

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

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Months Ended December 31,

Cost of sales

Percent of sales

and administrative expenses

from operations

$ ( 1,207,202 )

(loss) from operations

$ ( 1,207,202 )

11 unchanged sentences

balance sheet but arose after the balance sheet date and before financial statements are issued.

The Company has not identified any material

subsequent events.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data