What changed in this filing

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Item 1. Business

2026-03-24 compared with 2025-03-25 · 76 added, 91 removed, 428 unchanged (28% of the section changed)

67 unchanged sentences

federal and/or Oregon state trademark registrations for the trademarks material to the business, including but not

Willamette, Willamette Valley Vineyards, WVV, Domaine Willamette, Willamette Whiskey, Willamette+, Whole Cluster, Give Your

Whole Heart with Willamette Whole Cluster, Daedalus Cellars, Elton, Griffin, Griffin Creek, Ingram Estate, Its Willamette, Dammit!,

Jory Claim, Pambrun, Pambrun Cross Logo, SIP.

SAVE., Made in Oregon Cellars, Heart Vine, Camp Willamette, Natoma, Salem Hills, Oregon

Blossom, Oregons Landmark Winery, Oregons Nog, Club Willamette, Eagles Clutch, Kayak, W and Circle Design and W

Willamette Valley Vineyards and Circle Design, Fuller, Maison Bleue Winery, Métis, Willamette Wineworks, Tualatin Estate, Tualatin,

Natoma, Côte du Bleue and Père Ami.

overview – Although the United States wine industry added 400 new wineries in 2022, a 3% increase from 2021, according to

Wine Analytics Report .

According to a Wine Business Monthlys February 2024 report, the number of U.S.

active wineries

in 2023 stood at 11,620, which represented a 1% decrease compared to the number of wineries in 2022.

The total US wine market was

estimated at $81.3 billion in 2023 by Grand View research.

Average wine consumption per United States resident was 2.68 gallons in

2023, down 15 percent compared to the 2021 peak.

Additionally,

according to Silicon Valley Banks 2025 annual report, premium wineries faced a challenging landscape in 2024.

According to this

report, US wine volume consumed has reduced over the last four years.

Additionally, direct-to-consumer volume declined and tasting room

visitation dropped for the third consecutive year and consumer demand for the overall wine category continued its decline, with fewer

consumers opting for wine and choosing alternatives such as ready-to-drink beverages, spirits, cannabis, or abstaining altogether.

According to the Wine Business Analytics 2024 Year in Review direct to consumer shipping in 2024 was down 10% year over year in volume

and down 5% year over year in value.

Willamette, Willamette Valley Vineyards, WVV, Domaine Willamette, Willamette Whiskey, Whole Cluster, Give Your Whole Heart

with Willamette Whole Cluster, Daedalus Cellars, Elton, Griffin, Griffin Creek, Ingram Estate, Its Willamette, Dammit!, Jory Claim,

Pambrun, Pambrun Cross Logo, SIP.

SAVE., Made in Oregon Cellars, Heart Vine, Camp Willamette, Natoma, Salem Hills, Oregon Blossom, Oregons

Landmark Winery, Oregons Nog, Club Willamette, Eagles Clutch, Kayak, W Willamette Valley Vineyards, Fuller, Maison Bleue

Winery, Métis, Willamette Wineworks, Tualatin Estate, Tualatin, Natoma, Côte du Bleue and Père Ami.

overview – According to Silicon Valley Banks (SVB) 2026 annual report, US wine volume reduced by around 2% to 329 million

cases and revenue reduced 1.6% to around $74.3 billion in 2025 from 2024.

According to this report, US wine volume consumed has reduced

over the last five years.

Additionally, direct-to-consumer volume declined and tasting room visitation dropped for the fourth consecutive

year and consumer demand for the overall wine category continued its decline, with fewer U.S.

consumers opting for wine and choosing

alternatives such as ready-to-drink beverages, spirits, cannabis, or abstaining altogether.

The SVB forecast for 2026 is a continuing

decline but at a slower rate, bottoming out in 2027 at around $73.0 billion, and then relatively flat through 2030.

to the SOVOS 2026 Direct-to-Consumer Wine Shipping Report, 2025 had the largest one year drop with volume down 15% year over year to

5.4 million cases and value down 6% to $3.7 billion.

2023 study conducted by the Wine Market Council of 1,500 U.S.

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the Healthy Eating Pyramid, alcohol consumption is now cautioned against by organizations like the World Health Organization.

we expect the industry to stabilize in 2025 around the current levels.

We believe future positive sales and growth will depend on the

industry targeting younger consumers.

According to the State of the Wine Industry Report 2023 by Rob McMillan, younger wine consumers

are not limited by cost;

instead, they seek something enticing to draw them in to learn more about wine, including but not limited to

health, sustainability, social values, and transparent labeling,

to the State of the Wine Industry Report 2023 by Rob McMillan, younger wine consumers are not limited by cost;

instead, they seek something

enticing to draw them in to learn more about wine, including but not limited to health, sustainability, social values, and transparent

Companys Board of Directors and management believe the winerys focus on integrity in winemaking, small scale, storied estate

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Institute for Policy Research and Engagement (UOIPRE) in 2024, the most recent year such data is available, the

overall number of wineries increased from 1,116 to 1,143 with the biggest increases coming from the Willamette Valley, which added 24

Planted acres of wine grape vineyards increased by 1,512 acres from 44,487 to 45,999, an increase of 3%, 40,313 acres

of which were harvested.

Oregon wine grapes produced a 2023 crop with a total value of $349 million, an increase of 6% from 2022.

Noir leads all varieties accounting for 60% of planted acreage and 59% of production.

According to UOIPRE, Oregon case sales in 2023

were 6.0 million, a 5% increase from 2022.

overall number of wineries decreased from 1,143 to 1,076.

Planted acres of wine grape vineyards increased by 1,344 acres to 47,343,

while harvested acres decreased by 3%.

Oregon wine grapes produced a 2024 crop with a total value of $329 million, a decrease of 6% from

Pinot Noir leads all varieties accounting for 60% of planted acreage and 58% of production.

According to UOIPRE, Oregon case sales

in 2024 were 5.8 million, a 4% decrease from 2023.

of climate, soil and other growing conditions, we believe the Willamette Valley in western Oregon is ideally suited to growing superior

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to other vineyards.

a result of these factors, subject to the risks and uncertainties identified in this Annual Report on Form 10-K, the Company believes

that long-term prospects for growth in the Oregon wine industry are good.

The Company believes that over the next several years, the

Oregon wine industry will grow at a faster rate than the overall domestic wine industry, and that much of this growth will favor producers

of premium, super premium and ultra-premium wines such as the Companys Estate, Elton, Domaine Willamette, Pambrun, Maison Bleue

and Griffin Creek brands.

Companys Board of Directors and management believe the Winerys focus on integrity in winemaking, small scale, storied estate

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pressing and fermentation of wine grapes.

Companys marketing and selling strategy is to sell its premium, super premium and ultra-premium cork-finished-wine through a combination

of direct sales at the Companys wineries, tasting room and restaurant locations in Oregon, Washington and California and sales

through independent distributors and wine brokers who market the Companys wine in specific targeted areas.

remain competitive in the premium, super premium and ultra-premium market, the Company has embarked on a brand expansion project including

developing a brand and winery in the Walla Walla American Viticultural Area (AVA) under the names Pambrun, Maison Bleue

This future winery is expected to produce small vintages of Cabernet Sauvignon and other Bordeaux-varietals, under the Pambrun

brand, and Syrah and other Rhone-varietals, under the Maison Bleue brand, to compete in the ultra-premium wine market.

The Company has

released wines under the Pambrun label beginning with the 2015 vintage year and under the Maison Bleue label beginning with the 2016

vintage year.

Additionally, the Company has developed a single vineyard brand near Hopewell, Oregon adjacent to the current site of Elton

Vineyards to produce wine under the Elton label.

This brand produces primarily Pinot Noir and Chardonnay, also for sale in the ultra-premium

The Company has released wines under the Elton label beginning with the 2015 vintage year.

In 2020, the Company opened a microwinery

featuring wine tasting and a custom blending experience under the name Willamette Wineworks, in historic Folsom, California, and began

selling wine under the brand name Natoma.

In 2022, the Company opened a sparkling wine facility and tasting room called Domaine Willamette,

at Bernau Estate that features the Companys sparkling wines, as well as its other reserve wines, and its biodynamic farming practices.

Companys marketing and selling strategy is to sell its premium, super premium and ultra-premium wine through a combination of

direct sales at the Companys wineries, tasting room and restaurant locations in Oregon, Washington and California and sales through

independent distributors and wine brokers who market the Companys wine in specific targeted areas.

remain competitive in the premium, super premium and ultra-premium market, the Company has developed a brand in the Walla Walla American

Viticultural Area (AVA) under the names Pambrun, Maison Bleue and Metis.

The Company produces small vintages of Cabernet

Sauvignon and other Bordeaux-varietals, under the Pambrun brand, and Syrah and other Rhone-varietals, under the Maison Bleue brand, to

compete in the ultra-premium wine market.

The Company has released wines under the Pambrun label beginning with the 2015 vintage year

and under the Maison Bleue label beginning with the 2016 vintage year.

Additionally, the Company has developed a single vineyard brand

near Hopewell, Oregon adjacent to the current site of Elton Vineyards to produce wine under the Elton label.

This brand produces primarily

Pinot Noir and Chardonnay, also for sale in the ultra-premium space.

The Company has released wines under the Elton label beginning with

the 2015 vintage year.

In 2020, the Company opened a microwinery featuring wine tasting and a custom blending experience under the name

Willamette Wineworks, in historic Folsom, California, and began selling wine under the brand name Natoma.

In 2022, the Company opened

a sparkling wine facility and tasting room called Domaine Willamette, at Bernau Estate that features the Companys sparkling wines,

as well as its other reserve wines, and its biodynamic farming practices.

Company owns and leases approximately 1,018 acres of land, of which 801 acres are either currently planted as vineyards or are suitable

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Vineyard Name

Pre-Production

Non-Plantable

Owned Vineyards

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and 777 clones have been grafted onto seven acres of self-rooted, non-phylloxera-resistant vines at the Companys Estate Vineyard.

2024, crop yields were roughly 1% above the 10-year average and the Companys producing acres yielded approximately 913 tons of

grapes an increase of 5.3% over approximately 867 tons of grapes produced in 2023.

2025, crop yields were roughly 13% below the 10-year average and the Companys producing acres yielded approximately 794 tons of

grapes a decrease of 13% compared to approximately 913 tons of grapes produced in 2024.

Company fulfills its remaining grape needs by purchasing grapes from other nearby vineyards at competitive prices.

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purchased an additional 594 tons of grapes from other growers.

The Company cannot grow enough grapes to meet anticipated production

needs, and therefore contracts grape purchases to make up the difference.

Contracted grape purchases are considered an important component

of the Companys long-term growth and risk-management plan.

The Company cannot grow enough grapes to meet anticipated production needs,

and therefore contracts grape purchases to make up the difference.

Contracted grape purchases are considered an important component of

the Companys long-term growth and risk-management plan.

The Company believes high quality grapes will be available for purchase

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In 2025, the Winery produced approximately

253,974 cases (603,835 gallons) of wine, primarily from its 2022 and 2023 harvest.

158,707 cases (377,333 gallons) of wine, primarily from its 2023 and 2024 harvests.

Winery is 12,784 square feet in size and contains areas for processing, fermenting, aging and bottling wine, as well as an underground

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Dundee, Oregon.

on properties – The Companys winery facilities at the Estate Winery are subject to three mortgages with an aggregate

on properties – The Companys winery facilities at the Estate Winery are subject to four mortgages with an aggregate

principal balance of $15,184,395 at December 31, 2025.

The first two outstanding loans require aggregate 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.

The third outstanding loan currently requires aggregate monthly principal and interest payments of $87,989 on the

loan, at an annual variable interest rate of 6.66% with a maturity date of 2039.

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 6.60% and has a maturity date of April, 2027.

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

These loans are collateralized against

the property on the Company estates in Salem and Tualatin.

production – The Company operates on the principle that winemaking is a natural, but highly technical, process requiring the

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through mailing lists, and through distributors and wine brokers.

As the Company has increased production volumes and achieved greater

brand recognition, sales to out of state markets have increased, both in terms of absolute dollars and as a percentage of total Company

Company uses a variety of marketing channels to generate interest in its wines.

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The Company sells its wine through its own e-commerce

Company also operates eight additional tasting rooms at the following locations:

(i) McMinnville, Oregon;

(ii) Tualatin Vineyard, Oregon;

(iii) Lake Oswego, Oregon;

(iv) Happy Valley, Oregon;

(v) Walla Walla, Washington;

(vi) Vancouver, Washington;

(vii) Folsom, California,

and (viii) Bend, Oregon.

Company also operates seven additional tasting rooms at the following locations:

(i) Tualatin Vineyard, Oregon;

(ii) Lake Oswego, Oregon;

(iii Happy Valley, Oregon;

(iv) Walla Walla, Washington;

(v) Vancouver, Washington;

(vi) Folsom, California, and (vii) Bend, Oregon.

Company holds various festivals and events at its locations throughout the year.

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From Portland, tourists can visit the Willamette Valley winery of their choice in anywhere

from a 45 minute to a two-hour drive.

from a 45 minute to a three-hour drive.

Company believes the locations of the Estate Winery next to Interstate 5, and the Domaine Willamette Winery next to Highway 99W, significantly

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business