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Item 1. Financial Statements

2025-08-12 compared with 2025-05-13 · 235 added, 158 removed, 448 unchanged (47% of the section changed)

30 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, 2025 and 10,239,573 shares issued and outstanding, liquidation

preference $ 42,494,228 , at December 31, 2024.

Common stock, no par value, 10,000,000

shares authorized, 4,964,529 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively.

Redeemable preferred stock, no par value, 100,000,000 shares authorized, 10,239,573 shares issued and outstanding, liquidation preference $ 43,620,581 , at June 30, 2025 and 10,239,573 shares issued and outstanding, liquidation preference $ 42,494,228 , at December 31, 2024.

Common stock, no par value, 10,000,000 shares authorized, 4,964,529 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively.

Retained earnings

3 unchanged sentences

$ 109,017,140

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)

1 unchanged sentence

Other income, net

LOSS BEFORE INCOME TAXES

( 1,025,723 )

INCOME TAX BENEFIT

INCOME (LOSS) BEFORE INCOME TAXES

INCOME TAX (EXPENSE) BENEFIT

NET INCOME (LOSS)

Accrued preferred stock dividends

( 1,126,353 )

( 1,126,426 )

LOSS APPLICABLE TO COMMON SHAREHOLDERS

1 unchanged sentence

$ ( 367,271 )

$ ( 1,762,539 )

$ ( 1,452,253 )

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

Period Ended March 31, 2025

at December 31, 2024

of preferred stock, net

stock dividends accrued

at March 31, 2025

Period Ended March 31, 2024

at December 31, 2023

of preferred stock, net

stock dividends accrued

at March 31, 2024

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

Six-Month Period Ended June 30, 2025

Preferred Stock

Balance at December 31, 2024

Preferred stock dividends accrued

Balance at March 31, 2025

Preferred stock dividends accrued

Balance at June 30, 2025

Six-Month Period Ended June 30, 2024

Preferred Stock

Balance at December 31, 2023

Issuance of preferred stock, net

Preferred stock dividends accrued

Balance at March 31, 2024

Preferred stock dividends accrued

Balance at June 30, 2024

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

4 unchanged sentences

Non-cash lease expense

Loan fee amortization

Debt issuance costs

Change in operating assets and liabilities:

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 )

( 3,012,769 )

CASH FLOWS FROM INVESTING ACTIVITIES

1 unchanged sentence

Additions to property and equipment

( 1,061,541 )

Net cash from investing activities

( 1,188,276 )

CASH FLOWS FROM FINANCING ACTIVITIES

Payment on installment note for property purchase

Proceeds from bank overdraft

Proceeds from (payments on) line of credit

Proceeds from (payments on) bank overdraft

Payments on line of credit

( 1,958,933 )

Payment on long-term debt

Payments on long-term debt

Proceeds from long-term debt

8 unchanged sentences

Accrued preferred stock dividends

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, 2025 and for the three months ended March 31, 2025 and

accompanying unaudited interim financial statements as of June 30, 2025 and for the three and six months ended June 30, 2025 and 2024

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, 2024 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, 2024 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, 2024.

(the 2024 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, 2024, as presented

in the Companys Annual Report on Form 10-K.

results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the entire year

ending December 31, 2025, 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, 2024, as presented in the Companys Annual Report on Form 10-K.

results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the entire

year ending December 31, 2025, or any portion thereof.

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

3 unchanged sentences

following table presents the earnings per share after preferred stock dividends calculation for the periods shown:

Schedule of Earnings Per Share

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Net income (loss)

$ ( 636,186 )

1 unchanged sentence

Accrued preferred stock dividends

Net loss applicable to common shareholders

( 1,126,353 )

( 1,126,426 )

Net loss applicable to common shares

$ ( 470,381 )

$ ( 367,271 )

$ ( 1,762,539 )

$ ( 1,452,253 )

Weighted-average number of common shares outstanding basic and diluted

4 unchanged sentences

Schedule of Inventories

March 31, 2025

June 30, 2025

December 31, 2024

6 unchanged sentences

Schedule of Property and Equipment, Net

March 31, 2025

June 30, 2025

December 31, 2024

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, 2025 and 2024 was $770,370 and $791,986, respectively.

expense for the three months ended June 30, 2025 and 2024 was $ 761,496 and $ 790,970 , respectively.

Depreciation expense for the six months

ended June 30, 2025 and 2024 was $ 1,531,865 and $ 1,582,956 , 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 $ 1,203,983 at March 31, 2025, at an interest rate of 7.0%, and an outstanding line of credit balance of $ 2,405,815

at December 31, 2024, at an interest rate of 7.0%.

credit balance of $ 446,882 at June 30, 2025, at an interest rate of 7.0%, and an outstanding line of credit balance of $ 2,405,815 at

December 31, 2024, at an interest rate of 7.0%.

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

1 unchanged sentence

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

In July 2025, the Company renewed the credit agreement

until July 31, 2026.

Payable – In February 2017, the Company purchased property, including vineyard land, bare land, and structures in the Dundee

1 unchanged sentence

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

As of March 31, 2025, the Company

As of June 30, 2025, the Company

had a balance of $ 940,314 due on this note.

1 unchanged sentence

Debt – The Company has four long term debt agreements with AgWest with an aggregate outstanding balance of $ 16,584,054 and

$ 14,042,910 as of March 31, 2025 and December 31, 2024 respectively.

$ 14,042,910 as of June 30, 2025 and December 31, 2024, respectively.

The first two outstanding loans require monthly principal and interest

9 unchanged sentences

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

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, 2025, the Company had unamortized debt issuance costs of $ 173,081 .

As of December 31, 2024, the Company had unamortized

debt issuance costs of $ 178,908 .

of June 30, 2025, future minimum principal payments of long-term debt are as follows for the years ending December 31:

Schedule of Future Minimum Principal Payment for Long-Term Debt Maturities

of June 30, 2025, the Company had unamortized debt issuance costs of $ 168,333 .

As of December 31, 2024, the Company had unamortized debt

issuance costs of $ 178,908 .

INTEREST AND TAXES PAID

taxes – The Company paid zero in income taxes for the three months ended March 31, 2025, and 2024.

– The Company paid $ 228,105 and $ 134,979 for the three months ended March 31, 2025 and 2024, respectively, in interest on long-term

debt and the line of credit.

taxes – The Company paid $ 45,000 in income taxes for the three months ended June 30, 2025 and zero in income taxes for the

three months ended June 30, 2024.

The Company paid $ 45,000 in income taxes for the six months ended June 30, 2025 and zero in income

taxes for the six months ended June 30, 2024.

– The Company paid $ 267,696 and $ 129,539 for the three months ended June 30, 2025 and 2024, respectively, in interest on debt

and the line of credit.

The Company paid $ 495,801 and $ 264,518 for the six months ended June 30, 2025 and 2024, respectively, in interest

on debt and the line of credit.

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, 2025 and 2024.

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, 2025 and 2024.

Sales figures are net of related excise taxes.

Schedule of Segment reporting

Three Months Ended March 31,

Three Months Ended June 30,

Distributor Sales

Cost of sales

Selling and Marketing Expenses

Selling expenses

Contribution margin

$ ( 272,370 )

Percent of Sales

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

Percent of total sales

General and administration expenses

Loss from operations

$ ( 471,814 )

$ ( 602,577 )

SALE OF PREFERRED STOCK

10 unchanged sentences

$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 March

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

30, 2025 for the issuance of Preferred Stock.

9 unchanged sentences

with an offering price of $4.85 per share.

Net proceeds of $3,938,066 have been received under these offerings as of March 31, 2025 for

Net proceeds of $3,938,066 have been received under these offerings as of June 30, 2025 for

the issuance of Preferred Stock.

June 17, 2025, the Company filed a shelf Registration Statement on Form S-3 (the June 2025 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 2025 Form S-3

is not to exceed $20,000,000.

On July 3, 2025, the Company filed with the SEC a Prospectus Supplement to the June 2025 Form S-3, pursuant

to which the Company proposed to offer and sell, on a delayed or continuous basis, up to 1,343,284 shares of Series A Redeemable Preferred

Stock having proceeds not to exceed $4,500,000.

have the option to receive dividends as cash or as a gift card for purchasing Company products.

The amount of unused dividend gift cards

at March 31, 2025 and December 31, 2024 was $1,637,861 and $1,853,982, respectively, and is recorded as unearned revenue on the balance

at June 30, 2025 and December 31, 2024 was $1,457,927 and $1,853,982, 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.

64 unchanged sentences

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 producing vineyards.

the Company entered into a 25-year

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 producing vineyards.

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

34 unchanged sentences

of Lease Cost and Information

Three Months Ended

March 31, 2025

March 31, 2024

Six Months Ended

June 30, 2025

June 30, 2024

Operating lease cost - Vineyards

3 unchanged sentences

Other Information

Cash paid for amounts included in the

measurement of lease liabilities

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases - Vineyard

2 unchanged sentences

Weighted-average discount rate - Operating leases

assets obtained in exchange for new operating lease obligations were zero for the three months ended March 31, 2025 and 2024.

of March 31, 2025, maturities of lease liabilities were as follows:

assets obtained in exchange for new operating lease obligations were zero for the six months ended June 30, 2025 and 2024.

of June 30, 2025, maturities of lease liabilities were as follows:

of Maturities of Lease Liabilities

20 unchanged sentences

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

used in this Quarterly Report on Form 10-Q, we, us, our and the Company refer

to Willamette Valley Vineyards, Inc.

used in this Quarterly Report on Form 10-Q, we, us, our and the Company

refer to Willamette Valley Vineyards, Inc.

Looking Statements

38 unchanged sentences

Such policies

were unchanged during the three months ended March 31, 2025.

were unchanged during the six months ended June 30, 2025.

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 33,080 and 43,208 cases of produced wine during the three months ended March 31, 2025 and 2024, respectively, a decrease

of 10,128 cases, or 23.5% in the current year period over the prior year period.

The decrease in wine case sales was primarily the result

of having lower wholesale case sales in the current quarter when compared to the same quarter last year.

Company sold 83,968 and 91,102 cases of produced wine during the six months ended June 30, 2025 and 2024, respectively, a decrease of

7,134 cases, or 7.8% in the current year period over the prior year period.

The decrease in wine case sales was 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, 2025, wine inventory included 213,444 cases of bottled wine and 628,019 gallons of bulk wine in various stages of the aging

June 30, 2025, wine inventory included 244,252 cases of bottled wine and 497,066 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 40,216 cases during the three months ended March 31, 2025.

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 2022 Bernau Estate Pinot Noir 92 points and the 2023 Tualatin Estate Chardonnay 91 points.

Winery bottled 93,462 cases during the six months ended June 30, 2025.

Willamette Valley Vineyards continues to receive

positive recognition through national magazines, regional publications, local newspapers and online bloggers including the accolades

room at the Company’s 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 for the second consecutive year.

The Company was

also awarded the #2 Best Wine Club in the nation by USA Today for the second consecutive year.

James Suckling rated the 2023 Whole

Cluster Pinot Noir 92 points, and the 2023 White Pinot Noir 91 points.

Suckling rated the 2023 Whole Cluster Pinot Noir 92 points.

International

Wine Report awarded the 2022 Tualatin Estate Pinot Noir 93 points and the 2021 Elton Self-Rooted Pinot Noir 92 points.

Enthusiast Magazine rated the 2023 Whole Cluster Pinot Noir, 2023 White Pinot Noir, 2023 Bernau Block Chardonnay and 2021 Domaine Willamette

Brut 91 points.

OF OPERATIONS

revenue for the three months ended March 31, 2025 and 2024 was $7,541,583 and $8,803,080, respectively, a decrease of $1,261,497, or

revenue for the three months ended June 30, 2025 and 2024 were $10,195,763 and $10,332,358, respectively, a decrease of $136,595, or

1.3%, in the current year period over the prior year period.

This decrease was caused by a decrease in revenues from distributor sales

of $1,285,815, partly offset by an increase in direct sales to consumers of $24,318 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.

decrease in revenue from distributors was primarily attributed to fewer points of distribution in the current year three-month period

over the same period in the prior year.

of sales for the three months ended March 31, 2025 and 2024 was $2,782,475 and $3,530,358, respectively, a decrease of $747,883, or 21.2%,

This decrease was caused by a decrease

in direct sales of $223,199, partly offset by an increase in sales through distributors of $86,604 in the current year three-month period

over the prior year period.

The decrease in revenue from direct sales was primarily related to lower internet and telephone sales.

Sales revenue for the six months ended June 30, 2025 and 2024 were $17,737,346 and $19,135,438, respectively, a decrease of $1,398,092,

or 7.3%, in the current year period over the prior year period.

This decrease was caused by a decrease

in revenues from direct sales of $198,880 and a decrease in revenues from sales through distributors of $1,199,212 in the current year

period over the prior year period.

The decrease in revenues from sales through distributors was primarily the result of lower

case sales in the current year.

of Sales for the three months ended June 30, 2025 and 2024 were $3,979,145 and $3,860,668, respectively, an increase of $118,477, or

3.1%, in the current period over the prior year period.

This change was primarily the result of the lower number of cases sold in the first

quarter of 2025 when compared to the same quarter in 2024.

profit for the three months ended March 31, 2025 and 2024 was $4,759,108 and $5,272,722, respectively, a decrease of $513,614, or 9.7%,

in the first quarter of 2025 over the same quarter in the prior year.

This decrease was primarily the result of a decrease in sales through

distributors.

profit as a percentage of net sales for the three months ended March 31, 2025 and 2024 was 63.1% and 59.9%, respectively, an increase

of 3.2 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 retail locations in the first quarter of 2025 when compared to the same quarter in

This change was primarily the result of higher cost products sold in the current

quarter compared to the same quarter last year.

Cost of Sales for the six months ended June 30, 2025 and 2024 were $6,761,620 and $7,391,026,

respectively, a decrease of $629,406 or 8.5%, in the current period over the prior year period.

This change was primarily the result

of lower case sales in the first six months of 2025 when compared to the same period in 2024.

profit as a percentage of net sales for the three months ended June 30, 2025 and 2024 was 61.0% and 62.6%, respectively, a decrease of

1.6 percentage points in the current year period over the prior year period, mostly as a result of more discounts on products compared

to the same quarter of 2024.

Gross profit as a percentage of net sales for the six months ended June 30, 2025 and 2024 was 61.9% and

61.4%, respectively, an increase of 0.5 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 in direct sales in the first six months of 2025 compared to the same period in

the prior year.

General and Administrative Expenses

general and administrative expenses for the three months ended March 31, 2025 and 2024 was $5,629,086 and $5,875,299, respectively, a

decrease of $246,213, or 4.2%, in the current quarter over the same quarter in the prior year.

This decrease was primarily the result

of a decrease in selling expenses of $60,072, or 1.5% and a decrease in general and administrative expenses of $186,141, or 10.1% in

the current quarter compared to the same quarter last year.

General and administrative expenses decreased in the first quarter of 2025

compared to the same quarter of 2024 primarily as a result of lower legal costs.

expense for the three months ended March 31, 2025 and 2024 was $298,221 and $229,678, respectively, an increase of $68,543 or 29.8%,

in the first quarter of 2025 over the same quarter in the prior year.

The increase in interest expense for the first quarter was primarily

the result of higher debt compared to the first quarter of 2024.

income tax benefit for the three months ended March 31, 2025 and 2024 was $296,742 and $212,407, respectively, an increase of $84,335

or 39.7%, in the first quarter of 2025 over the same quarter in the prior year, primarily as a result of a higher pre-tax loss in the

first quarter of 2025, compared to the same quarter in 2024.

The Companys estimated federal and state combined income tax rate

for the three months ended March 31, 2025 and 2024 was 28.9% and 28.9% respectively.

loss for the three months ended March 31, 2025 and 2024 was $728,981 and $521,805, respectively, an increase of $207,176, or 39.7%, in

the first quarter of 2025 over the same quarter in the prior year.

The increase in net loss for the first quarter of 2025, compared to

the comparable period in 2024, was primarily the result of lower case sales to distributors in 2025.

general and administrative expenses for the three months ended June 30, 2025 and 2024 was $5,818,454 and $5,934,784 respectively, a decrease

of $116,330, or 2.0%, 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 $144,536, or 3.3% being partially offset by an increase in general and administrative expenses of

$28,206, or 1.8% in the current quarter compared to the same quarter last year.

Selling, general and administrative expense for the six

months ended June 30, 2025 and 2024 was $11,447,540 and $11,810,083, respectively, a decrease of $362,543, or 3.1%, in the current year

period over the prior year period.

This decrease was primarily the result of a decrease in selling and marketing expenses of $204,608,

or 2.4% combined with a decrease in general and administrative expenses of $157,935, or 4.6% in the current year period compared to the

same period in 2024.

General and administrative expenses decreased in the first six months of 2025 compared to the same period in the

prior year primarily as a result of lower legal costs.

expense for the three months ended June 30, 2025 and 2024 was $270,145 and $263,694, respectively, an increase of $6,451 or 2.4%, in

the second quarter of 2025 over the same quarter in the prior year.

Interest expense for the six months ended June 30, 2025 and 2024

was $568,366 and $493,381, respectively, an increase of $74,985 or 15.2%, in the current year period over the prior year period.

increase in interest expense for the second quarter and first six months of 2025 was primarily the result of increased long term debt

compared to the second quarter and first six months of 2024.

income tax expense for the three months ended June 30, 2025 and 2024 was $37,774 and $79,775, respectively, a decrease of $42,001 or

52.6%, in the second quarter of 2025 over the same quarter in the prior year mostly as a result of the lower pre-tax income in the second

quarter of 2025, compared to the same quarter in 2024.

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

and the three months ended June 30, 2025 and 2024.

The income tax benefit for the six months ended June 30, 2025 and 2024 was $258,968

and $132,632, respectively, an increase of $126,336 or 95.3% in the current year period over the prior year period, mostly a result of

a higher pre-tax loss in the first six months of 2025, compared to the same period in 2024.

The Companys estimated federal and

state combined income tax rate was 28.9% for the six months ended June 30, 2025 and 2024.

Income (Loss)

income for the three months ended June 30, 2025 and 2024 was $92,795 and $195,978, respectively, a decrease of $103,183, or 52.7%, in

the second quarter of 2025 over the same quarter in the prior year.

Net loss for the six months ended June 30, 2025 and 2024 was $636,186

and $325,827, respectively, an increase of $310,359, or 95.3%, in the current year period over the prior year period.

The decrease in

net income for the second quarter and increase in net loss for the first half of 2025, compared to the comparable periods in 2024, was

primarily the result of lower revenue in 2025.

Loss Applicable to Common Shareholders

loss applicable to common shareholders for the three months ended March 31, 2025 and 2024 was $1,292,158 and $1,084,982, respectively,

an increase of $207,176, or 19.1%, in the first quarter of 2025 over the same quarter in the prior year.

The increase in loss applicable

to common shareholders in the first quarter of 2025, compared to the same period of 2024, was the result of a higher net loss in the

current period.

Net loss applicable to common shareholders for the

three months ended June 30, 2025 and 2024 was $470,381 and $367,271, respectively, an increase of $103,110, or 28.1%, in the second quarter

of 2025 over the same quarter in the prior year.

Net loss applicable to common shareholders for the six months ended June 30, 2025 and

2024 was $1,762,539 and $1,452,253, respectively, an increase of $310,286, or 21.4%, in the current year period over the prior year period.

The increase in loss applicable to common shareholders in the second quarter and the first six months of 2025, compared to the same period

of 2024, was the result of a higher net loss in the current period.

and Capital Resources

March 31, 2025, the Company had a working capital balance of $26.7 million and a current working capital ratio of 3.60:1.

March 31, 2025, the Company had a cash balance of $332,889.

June 30, 2025, the Company had a working capital balance of $27.3 million and a current working capital ratio of 4.07:1.

June 30, 2025, the Company had a cash balance of $350,643.

At December 31, 2024, the Company had a cash balance of $320,883.

cash used for operating activities in the three months ended March 31, 2025 was $1,337,263.

Cash used in operating activities for the

three months ended March 31, 2025 was primarily associated with reduced grapes payable and increased inventories, being partially offset

by depreciation and amortization and lower receivables.

cash used in investing activities in the three months ended March 31, 2025 was $115,344.

Cash used in investing activities for the three

months ended March 31, 2025 consisted of cash used for equipment and vineyard development costs.

cash generated from financing activities in the three months ended March 31, 2025 was $1,464,613.

cash used for operating activities in the six months ended June 30, 2025 was $27,768.

Cash used in operating activities for the six months

ended June 30, 2025 was primarily associated with a net loss, as well as reduced grapes payable and accrued expenses, being partially

offset by depreciation and amortization.

cash used in investing activities in the three months ended June 30, 2025 was $209,533.

Cash used in investing activities for the six

months ended June 30, 2025 consisted of cash used on equipment and vineyard development costs.

cash generated from financing activities in the six months ended June 30, 2025 was $267,061.

Cash generated from financing activities

for the three months ended March 31, 2025 primarily consisted of proceeds from long-term debt, being partially offset by the repayment

on the line of credit.

for the six months ended June 30, 2025 primarily consisted of proceeds from long-term debt being partially offset by the repayment of

long-term debt and the line of credit.

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

6 unchanged sentences

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

The Company had an outstanding line of credit balance of $1,203,983

at March 31, 2025, at an interest rate of 7.0%, and an outstanding line of credit balance of $2,405,815 at December 31, 2024, at an interest

The Company had an outstanding line of credit balance of $446,882 at

June 30, 2025, at an interest rate of 7.0%, and an outstanding line of credit balance of $2,405,815 at December 31, 2024, at an interest

rate of 7.0%.

2 unchanged sentences

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

of March 31, 2025, the Company had a 15-year installment note payable of $968,348, due in quarterly payments of $42,534, associated with

In July 2025, the Company renewed the credit agreement

until July 31, 2026.

of June 30, 2025, the Company had a 15-year installment note payable of $940,314, due in quarterly payments of $42,534, associated with

the purchase of property in the Dundee Hills AVA.

of March 31, 2025, the Company had a total long-term debt balance of $16,818,597, including the portion due in the next year, owed to

of June 30, 2025, the Company had a total long-term debt balance of $16,584,054, including the portion due in the next year, owed to

AgWest, exclusive of debt issuance costs of $168,333.

6 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