Item 5. Market for Registrant’s Common Equity
ITEM
5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market
Information
The
Companys Common Stock is traded on the NASDAQ Capital Market under the symbol WVVI.
Holders
As
of March 24, 2026, the Company had approximately 3,280 Common Stock stockholders of record. As some of our shares of Common Stock are
held in street name by brokers on behalf of stockholders, we are unable to estimate the total number of beneficial holders
of our Common Stock represented by these record holders.
Dividends
The
Company has paid dividends on the Preferred Stock. The Company has not paid any dividends on its Common Stock, and the Company does not
anticipate paying any dividends on Common Stock in the foreseeable future. The Company intends to use its earnings to expand its vineyards,
winemaking, and customer service facilities.
Equity
Compensation Plans
See
Equity Compensation Plan Information under Item 12 Security Ownership of Certain Beneficial Owners and Management
and Related Shareholder Matters for information on our equity compensation plans.
Recent
Sales of Unregistered Securities
None.
Issuer
Purchases of Equity Securities
None.
ITEM
6. [RESERVED]
ITEM
7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following Managements Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with
the Companys financial statements and related notes. Some statements and information contained in this Managements Discussion
and Analysis of Financial Condition and Results of Operations are not historical facts but are forward-looking statements. For a discussion
of these forward-looking statements, and of important factors that could cause results to differ materially from the forward-looking
statements contained in this report, see Cautionary Note on Forward-Looking Statements.
18
Critical
Accounting Policies and Estimates
Managements
Discussion and Analysis of Financial Condition and Results of Operations discusses Willamette Valley Vineyards financial statements,
which have been prepared in accordance with generally accepted accounting principles. As such, management is required to make certain
estimates, judgments and assumptions that are believed to be reasonable based upon the information available. On an on-going basis, management
evaluates its estimates and judgments, including those related to product returns, bad debts, inventories, leases, investments, income
taxes, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience
and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ
from these estimates under different assumptions or conditions.
While
our significant accounting policies are described in more detail in Note 1 to our financial statements, we believe the following accounting
policies are those most critical to the judgements and estimates used in the preparation of our financial statements.
Revenue
– The Companys principal sources of revenue are derived from direct sales and sales through distributors of wine. Distributor
sales are recognized from wine sales at the time of shipment and passage of title. The Companys payment arrangements with wholesalers
provide primarily 30-day terms and, to a limited extent, 45-day, 60-day, or longer terms for some international wholesalers. Direct sales
through the Companys tasting rooms are recognized at the point of sales. Sales through the internet and wine club sales are recognized
when the product has shipped to the customer or is ready for the scheduled pickup.
The
Company pays depletion allowances to the Companys distributors based on their sales to their customers. The Company sets these
allowances on a monthly basis and the Companys distributors bill them back on a monthly basis. All depletion expenses associated
with a given month are recognized in that month as a reduction of revenues. The Company also reimburses for samples used by distributors
up to 1.5% of product sold to the distributors. Sample expenses are recognized at the time the Company is billed by the distributor as
a selling, general and administrative expense.
Amounts
paid by customers to the Company for shipping and handling expenses are included in the net revenue. Expenses incurred for outbound shipping
and handling charges are included in selling, general and administrative expense.
Inventory
– The Company values inventories at the lower of actual cost to produce the inventory or net realizable value. The Company
regularly reviews inventory quantities on hand and adjusts its production requirements for the next twelve months based on estimated
forecasts of product demand. A significant decrease in demand could result in an increase in the amount of excess inventory quantities
on hand. In the future, if the Companys inventory cost is determined to be greater than the net realizable value of the inventory
upon sale, the Company would be required to recognize such excess costs in its cost of goods sold at the time of such determination.
Therefore, although the Company makes every effort to ensure the accuracy of its forecasts of future product demand, any significant
unanticipated changes in demand could have a significant impact on the ultimate selling price and cases sold and, therefore, the carrying
value of the Companys inventory and its reported operating results.
Additionally,
the Company regularly evaluates inventory for obsolescence and marketability and if it determines that the inventory is obsolete, or
no longer suitable for use or marketable, the cost of that inventory is recognized in cost of sales at the time of such determination.
Other
Accounting Policies and Estimates
Vineyard
Development – The Company capitalizes internal vineyard development costs prior to the vineyard land becoming fully productive.
These costs consist primarily of the costs of the vines and expenditures related to labor and materials to prepare the land and construct
vine trellises. Amortization of such costs as annual crop costs is done on a straight-line basis for the estimated economic useful life
of the vineyard, which is estimated to be 30 years. The Company regularly evaluates the recoverability of capitalized costs. Amortization
of vineyard development costs are included in capitalized crop costs that in turn are included in inventory costs and ultimately become
a component of cost of goods sold.
Income
Taxes – The Company accounts for income taxes using the asset and liability approach. This requires the recognition of deferred
tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and the
tax basis of assets and liabilities at the applicable tax rates. The Company evaluates deferred tax assets, and records a valuation allowance
against those assets, if available evidence suggests that some of those assets will not be realized.
The
effect of uncertain tax positions would be recorded in the financial statements only after determining a more likely than not probability
that the uncertain tax positions would withstand an examination by tax authorities based on the technical merits of the position. The
tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized
upon ultimate settlement. As facts and circumstances change, management reassesses these probabilities and would record any changes in
the financial statements as appropriate.
19
Overview
The
Company generates revenue from the sales of wine to wholesalers and direct to consumers. The Company is experiencing increased levels
of competition in traditional wholesale to retail grocery distribution from large California based wineries that are acquiring, producing,
and marketing Oregon branded wines. Direct to consumer sales primarily include sales through the Companys tasting rooms and wine
club. Direct to consumer sales provide a higher gross profit to the Company due to prices received being closer to retail than those
prices paid by wholesalers. The Company continues to emphasize growth in direct-to-consumer sales through use of the Hospitality Center,
opening tasting rooms and growth in wine club membership. The Company had 10,481 wine club memberships as at December 31, 2025, a net
decrease of 702 when compared to December 31,2024. Additionally, the Companys Preferred Stock sales since August 2015 have resulted
in approximately 14,811 preferred stockholders, many of which the Company believes are wine enthusiasts. When considering joint ownership,
we believe these new shareholders represent approximately 22,216 potential customers of the Company. The Company also has approximately
3,280 shareholders of Common Stock which we believe represent an estimated 4,920 potential customers when considering joint ownership.
Additionally, the Company has made a significant investment in developing alternative wine brands, products, direct sales methods, and
locations.
Periodically,
the Company will sell grapes or bulk wine, which primarily consist of inventory that does not meet Company standards or is in excess
of production targets. However, this activity is not a significant part of the Companys activities.
The
Company sold approximately 173,014 and 186,419 cases of produced wine during the years ended December 31, 2025 and 2024, respectively,
a decrease of 13,405 cases, or 7.2% in the current year over the prior year. The decrease in case sales was primarily the result of both
lower direct sales and lower sales to wholesalers in 2025 when compared to 2024.
Cost
of sales includes grape costs, whether purchased or grown at Company vineyards, crush costs, winemaking and processing costs, bottling,
packaging, warehousing, and shipping and handling costs associated with purchased production materials. For grapes grown at Company vineyards,
costs include farming expenditures and amortization of vineyard development costs.
At
December 31, 2025, wine inventory included 188,527 cases of bottled wine and 697,725 gallons of bulk wine in various stages of the aging
process. Cased wine is expected to be sold over the next 12 to 24 months (and generally before the release date of the next vintage).
The Winery bottled 158,707 cases during the year ended December 31, 2025.
Results
of Operations
2025
compared to 2024
Net loss was $917,685 and $117,894, for the years
ended December 31, 2025 and 2024, respectively, an increase in net loss of $799,791, for the year ended December 31, 2025 over the prior
year period. The primary reason for this increase was a lower gross profit from reduced sales revenue in the current year, being partially
offset by higher other income in 2025 compared to the previous year as the result of a legal settlement received by the Company attributable
to historical wildfires.
Net loss applicable to common shareholders was $3,170,626
and $2,370,835, for the years ended December 31, 2025 and 2024, respectively, an increase of $799,791, or 33.7%, for the year ended December
31, 2025 over the prior year period. This increase was driven by a higher net loss.
The
Company had net sales revenues of $37,197,122 and $39,782,442 for the years December 31, 2025 and 2024, respectively, a decrease of $2,585,320,
or 6.5%, for the year ended December 31, 2025 over the prior year period primarily as a result of a decrease in revenue from direct sales,
net of excise taxes, of $1,013,762, or 4.8% in 2025 compared to 2024, and a decrease in revenue from sales to distributors of $1,571,558
or 8.5% in 2025 compared to 2024.
The
Company has three primary sales channels: direct-to-consumer retail sales, in-state sales to distributors, and out-of-state sales to
distributors. During 2025, revenues from retail sales decreased 4.7%, revenues from in-state sales decreased 4.8%, and revenues from
out-of-state sales decreased 10.2%, compared to 2024.
Direct
sales included $0 of bulk wine and grape sales in the years ended December 31, 2025 and 2024, and represented approximately 54.4% and
53.4% of the Companys total revenue for 2025 and 2024, respectively, while the Companys remaining revenues came from sales
through distributors.
20
The
following table sets forth certain information regarding the Companys revenue, excluding excise taxes, from the Winerys operations
for the twelve months ended December 31, 2025 and 2024:
Year ended
December 31,
2025
2024
Retail sales
$ 20,458,007
$ 21,465,475
In-state sales
6,158,602
6,470,363
Out-of-state sales
11,008,004
12,251,996
Bulk wine/miscellaneous sales
-
-
Total revenue
37,624,613
40,187,834
Less excise taxes
(427,491 )
(405,392 )
Sales, net
$ 37,197,122
$ 39,782,442
Retail
sales revenues for the years ended December 31, 2025 and 2024 were $20,458,007 and $21,465,475 respectively, a decrease of $1,007,468,
or 4.7%, for the year ended December 31, 2025 over the prior year period. The decrease in retail sales revenues in 2025 compared to 2024
was mostly a result of decreased revenues from internet, tasting room and telephone sales in 2025.
In-state
sales revenues for the years ended December 31, 2025 and 2024 were $6,158,602 and $6,470,363, respectively, a decrease of $311,761, or
4.8%, for the year ended December 31, 2025 over the prior year period.
Out-of-state
sales revenues for the years ended December 31, 2025 and 2024 were $11,008,004 and $12,251,996, respectively, a decrease of $1,243,992,
or 10.2%.
The
Company pays alcohol excise taxes to both the OLCC and to the TTB. These taxes are based on product sales volumes. The Company is liable
for the taxes upon the removal of product from the Companys warehouse on a per gallon basis. The Company also pays taxes on its
grape harvest on a per ton basis to the OLCC for the Oregon Wine Board. The Companys excise related taxes for the years ended
December 31, 2025 and 2024 were $427,491 and $405,392, respectively, an increase of $22,099, for the year ended December 31, 2025 over
the prior year period. This decrease was due primarily to the timing of removals in 2025.
Cost
of Sales was $14,704,602 and $15,586,986 for the years ended December 31, 2025 and 2024, respectively, a decrease of $882,384, or 5.7%,
for the year ended December 31, 2025, over the prior year period. This change was primarily the result of a reduction in the volume of
product sold when compared to the prior year.
Gross
profit was $22,492,520 and $24,195,456 for the years ended December 31, 2025 and 2024, respectively, a decrease of $1,702,936 or 7.0%,
for the year ended December 31, 2025 over the prior year period. This decrease was primarily the result of lower sales revenues in 2025
compared to the prior year.
The
gross margin percentage was 60.5% and 60.8% for the years ended December 31, 2025 and 2024, respectively, a decrease of 0.3 percentage
points, for the year ended December 31, 2025 over the prior year period. The decrease in the gross profit percentage was primarily the
result of higher discounts in 2025.
Selling,
general and administrative expenses were $23,928,692 and $23,623,598 for the years ended December 31, 2025 and 2024, respectively, an
increase of $305,094, or 1.3%, for the year ended December 31, 2025 over the prior year period. This increase was primarily as a result
of higher selling costs in 2025.
Income(loss)
from operations was $(1,436,172) and $571,878 for the years ended December 31, 2025 and 2024, respectively, a decrease of $2,008,030,
for the year ended December 31, 2025 compared to the prior year period. This decrease was primarily the result of lower sales and higher
selling expenses in 2025.
Interest
expense, net was $1,167,722 and $1,016,180 for the years ended December 31, 2025 and 2024, respectively, an increase of $151,542, or
14.9%, for the year ended December 31, 2025 over the prior year period. The increase in interest expense was mainly due to the increase
in average loan balances in 2025 compared to the previous year.
21
Other
income, net, was $1,394,628 and $99,629 for the years ended December 31, 2025 and 2024, respectively, an increase of $1,294,999, for
the year ended December 31, 2025 over the prior year period. The increase in other income was primarily due to the settlement of a legal
dispute in 2025 related to historical wildfires.
Provision
for income tax benefit was $291,581 and $226,799 for the years ended December 31, 2025 and 2024, respectively, an increase of $64,782,
or 28.6%, for the year ended December 31, 2025 over the prior year period. This increase in income tax benefit in 2025 compared to 2024
was primarily the result of lower income from operations in 2025 compared to 2024, being partially offset by higher other income in 2025.
Loss
per common share after preferred dividends was $0.64 and $0.48 for the years ended December 31, 2025 and 2024, respectively, an increase
of $0.16, or 33.3%, for the year ended December 31, 2025 over the prior year period. The reason for this increase was a higher net loss
in 2025 compared to 2024.
The
Company had cash balances of $410,886 at December 31, 2025, and $320,883 at December 31, 2024. The Company had an outstanding line of
credit balance of $3,140,140 at December 31, 2025, and $2,405,815 at December 31, 2024. The Company had no bank overdraft at December
31, 2025, and a bank overdraft of $473,016 at December 31, 2024.
EBITDA
In
2025, the Companys earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 19.7% to $3,209,021
from $3,995,135 in 2024, primarily as a result of a higher net loss in 2025.
EBITDA
does not reflect the impact of a number of items that affect our net income (loss), including financing costs. EBITDA is not a measure
of financial performance under the accounting principles generally accepted in the United States of America, referred to as GAAP,
and should not be considered as an alternative to net income (loss) or income (loss) from operations as a measure of performance, nor
as an alternative to net cash from operating activities as a measure of liquidity. We use EBITDA as a benchmark measurement of our own
operating results and as a benchmark relative to our competitors. We consider it to be a meaningful supplement to operating income (loss)
as a performance measure primarily because depreciation and amortization expense are not actual cash costs, and depreciation expense
varies widely from company to company in a manner that we consider largely independent of the underlying cost efficiency of our operating
facilities.
EBITDA
has significant limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our
GAAP results as reported. Because of these limitations, EBITDA should only be considered as a supplemental performance measure and should
not be considered as a measure of liquidity or cash available to us to invest in the growth of our business. See the Statement of Cash
Flows set out in our financial statements included herein.
The
following table provides a reconciliation of net loss (the most comparable GAAP measure) to EBITDA for the periods indicated:
Year Ended December 31,
2025
2024
Net loss
$ (917,685 )
$ (117,894 )
Depreciation and amortization expense
3,249,411
3,323,613
Interest expense
1,168,876
1,016,215
Income tax benefit
(291,581 )
(226,799 )
EBITDA
$ 3,209,021
$ 3,995,135
22
Sales
Wine
case sales for the years ended December 31, 2025 and 2024 and ending inventory amounts for the year ended December 31, 2025, are shown
in the following table:
Cases Sold
Cases Sold
Cases On-Hand
Varietal/Product
2025
2024
December 31, 2025
Pinot Noir/Estate
16,600
16,176
18,127
Pinot Noir/Barrel Select
15,573
17,774
9,337
Pinot Noir/Founders Reserve
3,785
4,031
7,065
Pinot Noir/Special Designates
14,494
14,371
28,125
Pinot Noir/Whole Cluster
45,368
58,367
19,348
Pinot Gris
25,168
30,162
29,293
Riesling
11,528
13,237
14,358
Chardonnay
7,353
4,708
18,087
Other
33,145
27,593
44,787
Total
173,014
186,419
188,527
Approximately
55% of the Companys case sales during 2025 were of the Companys flagship varietal, Pinot Noir. Case sales of Pinot Gris
and Riesling follow with approximately 15% and 7% of case sales, respectively. The Company sold approximately 173,014 and 186,419 cases
of Company-produced wine during the years ended December 31, 2025 and 2024, respectively. This represents a decrease of approximately
13,405 cases, or 7.2%, in 2025 compared to 2024. The decrease in case sales in 2025 compared to 2024 was primarily the result of a decrease
in sales to distributors.
The
Company has three primary sales channels: 1) direct-to-consumer sales; 2) in-state sales to distributors; and 3) out-of-state sales to
distributors. These three sales channels represent 54.4%, 16.4% and 29.3%, of total revenue for the year ended December 31, 2025, respectively.
This compares to 53.4%, 16.1% and 30.5% of total revenue for the year ended December 31, 2024, respectively. Miscellaneous and grape
sales are included in direct-to-consumer sales.
The
Companys direct-to-consumer sales and national sales to distributors offer comparable products to customers and utilize similar
processes and share resources for production, selling and distribution. Direct-to-consumer sales generate a higher gross profit margin
than national sales to distributors due to differentiated pricing between these segments.
Wine
Inventory
The
Company had 188,527 cases of bottled wine on-hand at the end of 2025. Management believes sufficient bulk wine inventory is on-hand to
bottle approximately 293,464 cases of wine in 2025, and that sufficient stock is on hand to meet current demand levels until the 2025
vintage becomes available.
Production
Capacity
Current
production volumes are within the current production capacity constraints of the Winery, when including storage capacity at the Tualatin
Winery and utilization of temporary storage when appropriate. In 2025, 158,707 cases were produced. We have the capacity to store and
process about 275,000 cases of wine per year at the Estate Winery but can expand that capacity by utilizing storage at the Tualatin Winery
and temporary storage. Management continues to invest in new production technologies intended to increase the efficiency and quality
of wine production. The Tualatin Winery has capacity to produce approximately 28,000 cases of wine. Management intends to fully utilize
the production capacity at the Estate Winery before expanding into the Tualatin Winery.
Grape
Supply
For
the 2025 and 2024 vintages, the Company grew approximately 74% and 60% of all grapes harvested, respectively. The remaining grapes harvested
were purchased from other growers. In 2025 and 2024, 9% and 11% of grapes harvested were purchased under short-term contracts, and 17%
and 29% of grapes harvested were purchased under long-term contracts, respectively. The Company considers short-term contracts to be
for single vintage years and long-term contracts to cover multiple vintage years.
23
Grapes
are typically harvested and received in September and October of the vintage year. Upon receipt, the grapes are weighed, and a quality
analysis is performed to ensure the grapes meet the standards set forth in the purchase contract. Based on the quantity of qualifying
grapes received, the full amount payable to the grower is recorded to the Grapes payable liability account. Approximately 50% of the
grapes payable amount is due in November of the vintage year. The remaining amount is due in March of the following year. The grapes
are processed into wine, which is typically bottled and available for sale between five months and two years from the date of harvest.
The
Company received $1,071,099 and $2,275,162 worth of grapes from long-term contracts during the years ended December 31, 2025 and 2024,
respectively. The Company received $251,778 and $681,705 worth of grapes from short-term contracts during the years ended December 31,
2025 and 2024, respectively. Total grapes payable was $654,832 and $1,519,087 as of December 31, 2025 and 2024, respectively. Total grapes
payable includes $538,461 and $1,023,171 of grapes payable from long-term contracts as of December 31, 2025 and 2024, respectively.
The
Company plans to address long-term grape supply needs by developing new vineyards on properties currently owned or secured by lease.
The Company has approximately 39 acres of vineyards that have been planted but are in the pre-productive stage. We anticipate that these
vineyards will begin producing grapes within the next one to three years. The Company has approximately 233 acres of land that is suitable
for future vineyard development. The Company intends to seek out opportunities to acquire land for future grape plantings in order to
continue to increase available quantities, maintain control over farming practices, more effectively manage grape costs and mitigate
uncertainty associated with long-term contracts.
Wine
Quality
Continued
awareness of the Willamette Valley Vineyards brand and the quality of its wines was enhanced by national and regional media coverage
throughout 2025 including the accolades below.
The
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. The Company was
also awarded the #2 Best Wine Club in the nation by USA Today for the second consecutive year.
Wine
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 2022 Bernau Estate Pinot Noir 93
points.
James
Suckling rated the 2023 Founders Reserve Pinot Noir and Chardonnay 93 points. National Sales 2023 White Pinot Noir received
91 points and the 2023 Whole Cluster Pinot Noir 92 points.
Owen
Bargreen rated the 2023 Bernau Block Pinot Noir 93 points, 2023 Whole Cluster Pinot Noir 92 points, and National Sales 2023 White
Pinot Noir received 91 points.
International
Wine Report scored the 2021 Domaine Willamette Blanc de Blancs and Brut Rosé 92 points. National Sales 2024 Pinot Gris
received 91 points and the 2023 Whole Cluster Rosé of Pinot Noir 90 points.
USA
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.
Seasonality
The
Company has historically experienced and expects to continue to experience seasonal fluctuations in its revenue and net income. Typically,
first quarter sales are the lowest of any given year, and sales volumes increase progressively through the fourth quarter, mostly because
of consumer buying habits.
Liquidity
and Capital Resources
At
December 31, 2025, the Company had a working capital balance of $24.6 million and a current ratio of 2.70:1. The Company had cash balances
of $410,886, at December 31, 2025.
Total
cash used in operating activities for the year ended December 31, 2025 was $1,790,239, which resulted primarily from a net loss in 2025
as well as increased accounts receivable and lower grapes payable. This was partially offset by depreciation.
Total
cash used in investing activities for the year ended December 31, 2025 was $502,887, which primarily consisted of cash used on purchase
of production equipment and vineyard development costs.
24
Total
cash provided from financing activities for the year ended December 31, 2025 was $2,383,129, which primarily consisted of proceeds from
long term debt and investor deposits, being partially offset by the payment of a preferred stock dividend and payments on long term debt.
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 Credit Agreement. The
revolving line bears interest at prime less 0.5%, with a floor of 3.25%, is payable monthly, and is subject to renewal. In 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 $3,140,140 at December 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%. The Credit Agreement includes various covenants,
which among other things, requires the Company to maintain minimum amounts of tangible net worth, debt-to-equity, and debt service coverage,
as defined, and limits the level of acquisitions of property and equipment. As of December 31,
2025, the Company was out of compliance with a debt covenant. The Company has received a waiver from Columbia Bank waiving this violation
until the next measurement date of December 31, 2026.
As
of December 31, 2025, the Company had a total long-term debt balance of $15,184,395 owed to AgWest Farm Credit, including the portion
due in the next year, exclusive of debt issuance costs of $158,837. As of December 31, 2024, the Company had a total long-term debt balance
of $14,042,910, exclusive of debt issuance costs of $178,908. The debt with AgWest was used to finance the Estate Hospitality Center
and subsequent remodels, invest in winery equipment to increase the Companys winemaking capacity, acquire new vineyard land for
future development and finance new tasting room locations.
As
of December 31, 2025, the Company had an installment note payable of $884,221, due in quarterly payments of $42,534 through February
2032, associated with the purchase of property in the Dundee Hills AVA.
The
Company believes that cash flow from operations and funds available under its existing credit facilities and preferred stock program
will be sufficient to meet the Companys foreseeable short and long-term operating needs.
Inflation
The
Companys management does not believe inflation has had a material impact on the Companys revenues or loss during 2025 or
2024.
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not
required.
25
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.