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Item 1. Financial Statements

2025-11-13 compared with 2025-08-12 · 250 added, 219 removed, 464 unchanged (50% of the section changed)

2 unchanged sentences

BALANCE SHEETS

September 30,

CURRENT ASSETS

13 unchanged sentences

Accrued expenses

Investor deposits for preferred stock

Bank overdraft

11 unchanged sentences

SHAREHOLDERS’ EQUITY

Redeemable preferred stock, no par value, 100,000,000 shares authorized, 10,239,573 shares issued and outstanding, liquidation preference $ 43,620,581 , 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.

Redeemable preferred stock, no par value, 100,000,000 shares authorized, 10,239,573 shares issued and outstanding, liquidation preference $ 44,183,758 , at September 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 September 30, 2025 and December 31, 2024, respectively.

Retained earnings

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Three months ended

Six months ended

Nine months ended

September 30,

COST OF SALES

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Total operating expenses

INCOME (LOSS) FROM OPERATIONS

LOSS FROM OPERATIONS

( 1,213,527 )

( 1,685,341 )

OTHER INCOME (EXPENSE)

Interest expense, net

Other income, net

INCOME (LOSS) BEFORE INCOME TAXES

INCOME TAX (EXPENSE) BENEFIT

NET INCOME (LOSS)

Other income (expense), net

LOSS BEFORE INCOME TAXES

( 1,537,146 )

( 2,432,300 )

INCOME TAX BENEFIT

( 1,092,450 )

( 1,728,636 )

Accrued preferred stock dividends

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$ ( 2,298,448 )

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 this condensed financial statement

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STATEMENTS OF SHAREHOLDERS EQUITY

Six-Month Period Ended June 30, 2025

Nine-Month Period Ended September 30, 2025

Preferred Stock

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Balance at June 30, 2025

Six-Month Period Ended June 30, 2024

Stock based compensation

Preferred stock dividends accrued

( 1,092,450 )

Balance at September 30, 2025

Nine-Month Period Ended September 30, 2024

Preferred Stock

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Balance at June 30, 2024

Preferred stock dividends accrued

Balance at September 30, 2024

accompanying notes are an integral part of this condensed financial statement

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OF CASH FLOWS

Six months ended June 30,

Nine months ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

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Depreciation and amortization

Loss on disposition of property & equipment

Common stock compensation expense

Non-cash lease expense

3 unchanged sentences

( 1,359,690 )

( 3,046,229 )

Prepaid expenses and other current assets

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( 1,886,226 )

( 2,446,233 )

Accounts payable

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( 1,445,702 )

( 2,159,828 )

CASH FLOWS FROM INVESTING ACTIVITIES

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Proceeds from (payments on) bank overdraft

Payments on line of credit

Proceeds from (payments on) line of credit

( 1,241,257 )

Payments on long-term debt

( 1,626,515 )

Proceeds from investor deposits held as liability

Proceeds from long-term debt

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NON-CASH INVESTING AND FINANCING ACTIVITIES

Purchases of property and equipment and vineyard development costs included in accounts payable

Purchases of property and equipment

and vineyard development costs included in accounts payable

Reduction in investor deposits for preferred stock

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BASIS OF PRESENTATION

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.

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.

accompanying unaudited interim financial statements as of September 30, 2025 and for the three and nine months ended September 30, 2025

and 2024 have been prepared in conformity with accounting principles generally accepted in the United States (U.S.

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

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.

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

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 nine months ended September 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.

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

Three months ended June 30,

Six months ended June 30,

Net income (loss)

Schedule of Earning Per Share

Three months ended September 30,

Nine months ended September 30,

$ ( 1,092,450 )

$ ( 282,945 )

$ ( 1,728,636 )

$ ( 608,772 )

Accrued preferred stock dividends

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Schedule of Inventories

June 30, 2025

September 30, 2025

December 31, 2024

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Schedule of Property and Equipment, Net

June 30, 2025

September 30, 2025

December 31, 2024

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Property and equipment, net

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

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

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 $ 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%.

expense for the three months ended September 30, 2025 and 2024 was $ 757,851 and $ 785,581 , respectively.

Depreciation expense for the

nine months ended September 30, 2025 and 2024 was $ 2,289,716 and $ 2,368,537 , respectively.

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

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

In July 2025, the Company renewed the credit

agreement until July 31, 2026.

The Company had an outstanding line of credit balance of $ 1,164,558 at September 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

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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

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

As of June 30, 2025, the Company

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

As of September 30, 2025, the

Company had a balance of $ 913,103 due on this note.

As of December 31, 2024, the Company had a balance of $ 995,968 due on this note.

Debt – The Company has four long term debt agreements with AgWest with an aggregate outstanding balance of $ 15,428,093 and

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

The first two outstanding loans require monthly principal and interest

payments of $62,067 for the life of the loans, at annual fixed interest rates of 4.75% and 5.21%, and with maturity dates of 2028 and

2032, respectively.

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

The first two outstanding loans require monthly principal and

interest payments of $62,067 for the life of the loans, at annual fixed interest rates of 4.75% and 5.21%, and with maturity dates of

2028 and 2032, respectively.

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

The third loan requires monthly

principal and interest payments of $87,989 at an annual interest rate of 6.66%, and with a maturity date of 2039.

The fourth loan 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.

The third loan requires

monthly principal and interest payments of $87,989 at an annual interest rate of 6.66%, and with a maturity date of 2039.

loan 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.

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

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

These loans are collateralized against the property on the Company estates in Salem and Tualatin.

of September 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 .

of September 30, 2025, the Company had unamortized debt issuance costs of $ 163,586 .

As of December 31, 2024, the Company had unamortized

debt issuance costs of $ 178,908 .

INTEREST AND TAXES PAID

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

taxes – The Company paid $ 17,500 in income taxes for the three months ended September 30, 2025 and $ 27,000 in income taxes

for the three months ended September 30, 2024.

The Company paid $ 62,500 in income taxes for the nine months ended September 30, 2025

and $ 27,000 in income taxes for the nine months ended September 30, 2024.

On July 4, 2025, a budget and reconciliation package

referred to as the One Big Beautiful Bill Act ("OBBBA") was signed into law.

The OBBBA enacts significant changes to

tax and related laws, including, among other things, expensing of domestic research expenses, increasing the limit of the interest

expense deduction to thirty percent of EBITDA, and one hundred percent bonus depreciation on eligible property acquired after January

There was no material change to the Company’s effective income tax rate as a result of these changes for the period

ending September 30, 2025.

– The Company paid $ 227,510 and $ 127,444 for the three months ended September 30, 2025 and 2024, respectively, in interest

on debt and the line of credit.

The Company paid $ 723,311 and $ 391,962 for the nine months ended September 30, 2025 and 2024, respectively,

in interest on debt and the line of credit.

SEGMENT REPORTING

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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.

segments for the three and nine month periods ended September 30, 2025 and 2024.

Sales figures are net of related excise taxes.

Schedule of Segment reporting

Three Months Ended June 30,

Distributor Sales

Months Ended September 30,

Cost of sales

Selling expenses

Contribution margin

$ ( 105,308 )

Percent of total sales

General and administration expenses

Income from operations

Six Months Ended June 30,

Distributor Sales

and administration expenses

from operations

$ ( 1,213,527 )

$ ( 136,506 )

Months Ended September 30,

Cost of sales

Selling expenses

Contribution margin

Percent of total sales

General and administration expenses

Loss from operations

and administration expenses

from operations

$ ( 1,685,341 )

$ ( 202,177 )

SALE OF PREFERRED STOCK

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

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

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

30, 2025 for the issuance of Preferred Stock.

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with an offering price of $4.85 per share.

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.

Net proceeds of $3,938,066 have been received under these offerings as of September 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 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.

Net proceeds of $1,621,598

have been received under these offerings as of September 30, 2025 for the issuance of Preferred Stock.

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 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

at September 30, 2025 and December 31, 2024 was $1,321,760 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.

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to the original issue price plus accrued but unpaid dividends and a redemption premium equal to 3% of the original issue price.

8) EQUITY INCENTIVE PLAN

The Willamette Valley Vineyards

Inc, 2025 Omnibus Equity Incentive Plan ("2025 Plan") was adopted by the Company's board of directors on September 9, 2025.

The 2025 Plan provides for the grant of Options, Share Appreciation Rights, Restricted Share Units, Other Share-based Awards or any combination

of the foregoing to selected employees, directors and independent contractors of the Company.

During the three months ended

September 30, 2025, the Company granted 285,000 restricted shares and share units under the 2025 Plan.

As of September 30, 2025, no shares

had been registered with the SEC under this plan.

The Company filed the registration statement to register the shares related to the 2025

Plan on November 12, 2025.

The 15,000 shares that vested prior to November 12, 2025 will be issued during the three month period ended

December 31, 2025.

The Company recognized $89,132

in stock-based compensation expense during the three months ended September 30, 2025 related to the 2025 Plan.

determine if an arrangement is a lease at inception.

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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

options, for its McMinnville tasting room.

In May 2022 the Company amended the lease to extend the lease to August 2025 with one three

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.

Leases – Non-Vineyard – In January 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

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

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

In January 2025 the Company amended the renewal

In September 2025 the Company amended the renewal

options and extended the lease until February 2027.

For right of use asset and liability calculations

the Company has concluded it is reasonably certain to extend available options through February 2040.

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

reasonably certain to extend available options through February 2040.

March 2021 , the Company entered into a lease for 10 years , with two five-year renewal options for a retail wine facility in Vancouver,

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of Lease Cost and Information

Six Months Ended

June 30, 2025

June 30, 2024

Nine Months Ended

September 30, 2025

September 30, 2024

Operating lease cost - Vineyards

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Weighted-average discount rate - Operating leases

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:

assets obtained in exchange for new operating lease obligations were $22,362 for the nine months ended September 30, 2025 and zero for

the nine months ended September 30, 2024.

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

of Maturities of Lease Liabilities

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Such policies

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

were unchanged during the nine months ended September 30, 2025.

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

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this is not a significant part of the Companys activities.

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.

Company sold 124,254 and 135,424 cases of produced wine during the nine months ended September 30, 2025 and 2024, respectively, a decrease

of 11,170 cases, or 8.2% 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,

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of vineyard development costs.

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

September 30, 2025, wine inventory included 231,368 cases of bottled wine and 612,224 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 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

Winery bottled 146,176 cases during the nine months ended September 30, 2025.

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

bloggers including the accolades below.

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 for the second consecutive year.

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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.

Enthusiast Magazine rated the 2022 Père Ami Red Blend 93 points, 2022 Métis Red Blend 94 points, Willamette Valley

Vineyards 2023 Founders Reserve Pinot Noir and 2023 Dijon Clone Chardonnay 92 points, and the 2023 Founders Reserve Chardonnay

Suckling rated the 2023 Founders Reserve Pinot Noir and Chardonnay 93 points.

National Sales 2023 White Pinot Noir received

91 points and 2023 Pinot Gris 90 points.

Wine Ratings Competition awarded the Companys 2023 Estate Pinot Noir 94 points, 2023 Whole Cluster Pinot Noir 93 points, National

Sales 2023 Pinot Gris and 2023 White Pinot Noir 92 points, the 2023 Dijon Clone Pinot Noir rated 92 points.

OF OPERATIONS

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

revenue for the three months ended September 30, 2025 and 2024 were $8,353,200 and $9,370,713, respectively, a decrease of $1,017,513,

or 10.9%, in the current year period over the prior year period.

This decrease was caused by a

decrease in direct sales of $384,420, and a decrease in sales through distributors of $633,093 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,

Sales revenue for the nine months ended September 30, 2025 and 2024 were $26,090,546 and $28,506,151, respectively, a decrease of $2,415,605,

or 8.5%, in the current year period over the prior year period.

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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 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,

of Sales for the three months ended September 30, 2025 and 2024 were $3,349,228 and $3,562,599, respectively, a decrease of $213,371,

or 6.0%, in the current period over the prior year period.

This change was primarily the result of lower sales in the current quarter

compared to the same quarter last year.

Cost of Sales for the nine months ended September 30, 2025 and 2024 were $10,110,848 and $10,953,625,

respectively, a decrease of $842,777 or 7.7%, 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.

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

profit as a percentage of net sales for the three months ended September 30, 2025 and 2024 was 59.9% and 62.0%, respectively, a decrease

of 2.1 percentage points in the current year period over the prior year period, mostly as a result of higher percentage rebates paid

to distributors compared to the same quarter of 2024.

Gross profit as a percentage of net sales for the nine months ended September 30,

2025 and 2024 was 61.2% and 61.6%, respectively, a decrease of 0.4 percentage points in the current year period over the prior year period.

The decrease was primarily the result of higher percentage rebates paid to distributors in the first nine 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 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

general and administrative expenses for the three months ended September 30, 2025 and 2024 was $6,217,499 and $5,944,620 respectively,

an increase of $272,879, or 4.6%, in the current quarter over the same quarter in the prior year.

The increase was primarily the result

of an increase in selling and marketing expenses of $117,582, or 2.7% and an increase in general and administrative expenses of $155,297,

or 9.6% 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

Selling, general and administrative expense for the nine months

ended September 30, 2025 and 2024 was $17,665,039 and $17,754,703, respectively, a decrease of $89,664, or 0.5%, in the current year

period over the prior year period.

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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

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

prior year primarily as a result of lower legal costs being partly offset by higher administration costs.

expense for the three months ended September 30, 2025 and 2024 was $304,957 and $257,192, respectively, an increase of $47,765 or 18.6%,

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

Interest expense for the nine months ended September 30, 2025 and

2024 was $873,323 and $750,573, respectively, an increase of $122,750 or 16.4%, 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

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

The increase in interest expense for the third quarter and first nine months of 2025 was primarily the result of increased long term

debt in these periods compared to the third quarter and first nine months of 2024.

income tax benefit for the three months ended September 30, 2025 and 2024 was $444,696 and $115,177, respectively, an increase of $329,519

or 286.1%, in the third quarter of 2025 over the same quarter in the prior year mostly as a result of the higher pre-tax loss in the

third 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 September 30, 2025 and 2024.

The income tax benefit for the nine months ended September 30, 2025

and 2024 was $703,664 and $247,809, respectively, an increase of $455,855 or 184.0% in the current year period over the prior year period,

mostly a result of a higher pre-tax loss in the first nine 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 nine months ended September 30, 2025 and 2024.

loss for the three months ended September 30, 2025 and 2024 was $1,092,450 and $282,945, respectively, an increase of $809,505, or 286.1%,

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

Net loss for the nine months ended September 30, 2025 and 2024

was $1,728,636 and $608,772, respectively, an increase of $1,119,864, or 184.0%, 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.

The increase in net loss for the third quarter and increase in net loss for the nine months 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 September 30, 2025 and 2024 was $1,655,627 and $846,195 respectively,

an increase of $809,432, or 95.7%, in the third quarter of 2025 over the same quarter in the prior year.

Net loss applicable to common

shareholders for the nine months ended September 30, 2025 and 2024 was $3,418,166 and $2,298,448, respectively, an increase of $1,119,718,

or 48.7%, in the current year period over the prior year period.

The increase in loss applicable to common shareholders in the third

quarter and the first nine months of 2025, compared to the same period of 2024, was the result of a higher net loss in the current periods.

and Capital Resources

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.

September 30, 2025, the Company had a working capital balance of $25.8 million and a current working capital ratio of 3.12:1.

September 30, 2025, the Company had a cash balance of $372,566.

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

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 used for operating activities in the nine months ended September 30, 2025 was $1,445,702.

Cash used in operating activities for

the nine months ended September 30, 2025 was primarily associated with a net loss, as well as reduced grapes payable and increased inventory,

being partially offset by depreciation and amortization and a reduction in accounts receivable.

cash used in investing activities in the three months ended September 30, 2025 was $312,548.

Cash used in investing activities for the

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

cash generated from financing activities in the nine months ended September 30, 2025 was $1,809,933.

Cash generated from financing activities

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)

for the nine months ended September 30, 2025 primarily consisted of proceeds from long-term debt and investor deposits for preferred

stock 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 Columbia Bank (the Credit Agreement)

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

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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.

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

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%.

In November 2022, the Company

increased the borrowing line up to $5,000,000.

In July 2025, the Company renewed the credit agreement until July 31, 2026.

had an outstanding line of credit balance of $1,164,558 at September 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.

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 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.

of September 30, 2025, the Company had a 15-year installment note payable of $913,103, due in quarterly payments of $42,534, associated

with the purchase of property in the Dundee Hills AVA.

of September 30, 2025, the Company had a total long-term debt balance of $15,428,093, including the portion due in the next year, owed

to AgWest, exclusive of debt issuance costs of $163,586.

As of December 31, 2024, the Company had a total long-term debt balance of $14,042,910,

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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-Q

Item 1. Financial Statements