WVVI 10-K & 10-Q changes, risk factors and insider trading

Winemaking and grape growing are subject to a variety of agricultural risks. Various diseases, pests, fungi, viruses, including Grapevine Red Blotch Disease (“GRBV”), drought, frost and certain other weather conditions can affect the quantity of grapes available to the Company, decreasing the supply of the Company’s products and negatively impacting profitability. In particular, certain of the Company’s vines are not resistant to phylloxera; accordingly, those vines are particularly at risk to the effects from an infestation of phylloxera. Phylloxera is a pest that attacks the rootstocks of wine grape plants. Vineyards in the United States, including some in Oregon and some owned by us, have been infested with phylloxera. In particular, Tualatin Estate Vineyards have phylloxera. There can be no assurance that the Company’s existing vineyards, or the rootstocks the Company is now using in its planting programs, will not become susceptible to current or new strains of phylloxera or that the phylloxera present at the Tualatin Vineyards will not spread to our other vineyards. Pierce’s Disease is a vine bacterial disease. It kills grapevines and there is no known cure. Small insects called Sharpshooters spread this disease. A new strain of the Sharpshooter was discovered in Southern California and is believed to be migrating north. The Company is actively supporting the efforts of the agricultural industry to control this pest and is making every reasonable effort to prevent an infestation in its own vineyards. The Company cannot, however, guarantee that it will succeed in preventing contamination in its vineyards. Additionally, any future government restrictions created in connection with government attempts to combat phylloxera, phylloxera, GRBV or other pests or viruses may increase vineyard costs and/or reduce production.

The Company’s success depends to some degree upon the continued service of a number of key employees. The loss of the services of one or more of these key employees, including James W. Bernau, our President and Chief Executive Officer andPresident, John Ferry, our Chief Financial Officer and Mike Osborn, our Chief Executive Officer could harm the Company and its reputation and negatively impact its profitability, particularly if one or more of the Company’s key employees resigns to join a competitor or to form a competing company.

In August 2015, the Company commenced a public offering of our Series A Redeemable Preferred Stock (the “Preferred Stock”) pursuant to a registration statement filed with the SEC. The Company registered this transaction with the securities authorities of the States of Oregon and Washington and, in November 2015, achieved listing status for the Preferred Stock on NASDAQ under the trading symbol “WVVIP”. Subsequent to this date, the Company completed an additional 11 offerings of Preferred Stock, in each case pursuant to a registration statement, filed with and declared effective by, the SEC. The terms of our Preferred Stock are unusual for a company of our size, and we believe the structure of these securities and of the offering is not commonplace among issuers. Federal and state securities laws impose significant liabilities on issuers of securities if the related offering documents contain material misstatements of fact, or if the documents omit to state facts necessary, in light of the circumstances as a whole, to prevent the documents from being misleading. These liabilities can include rescission liability to the purchasers of the securities, as well as potential enforcement liability that could give rise to civil money penalties. Securities litigation can be extraordinarily expensive and protracted, and if we are accused of misstatements or omissions in our offering documents, we may face economic harms and management distractions regardless of the ultimate outcome of any such litigation. Further, if we ultimately are adjudged to have actually made a material misstatement or omission, the Company may be liable for the repayment of the purchase price of the related securities, plus interest from the date of purchase. Any one or more of these events or circumstances would have a material adverse impact upon our business, financial condition or results of operations, and may make it more difficult or more expensive to undertake capital-raising efforts in the future.

Certain provisions in our articles of incorporation, our by-laws and Oregon law could make it more difficult for a third party to acquire control of us, even if that transaction could be beneficial to stockholders. These impediments include, but are not limited to; the classification of our board of directors (the “Board”) into three classes serving staggered three-year terms, which makes it more difficult to quickly replace Board members; the ability of our Board, subject to certain limitations under the NASDAQ rules, to issue shares of Preferred Stock with rights as it deems appropriate without stockholder approval; a provision that special meetings of our Board may be called only by our chief executive officerPresident or at the request of holders of not less than half of all outstanding shares of our Common Stock; a provision that any member of the Board, or the entire Board, may be removed from office only for cause; and a provision that our stockholders comply with advance-notice provisions to bring director nominations or other matters before meetings of our stockholders. The Board may implement other changes that further limit the potential for tender offers or takeover attempts.

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 Company’s 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 new tasting rooms and growth in wine club membership. The Company had 11,18310,481 wine club memberships foras the year endedat December 31, 2024,2025, a net decrease of 358702 when compared to 2023.December 31,2024. Additionally, the Company’s Preferred Stock sales since August 2015 have resulted resulted in approximately 14,71514,811 preferred stockholders, many of which the Company believes are wine enthusiasts. When considering joint ownership, ownership, we believe these new shareholders represent approximately 22,07222,216 potential customers of the Company. The Company also has approximately approximately 3,2493,280 shareholders of Common Stock which we believe represent an estimated 4,8734,920 potential customers when considering joint ownership. ownership. Additionally, the Company has made a significant investment in developing alternative wine brands, products, direct sales methods, and locations.

The Company sold approximately 186,419173,014 and 191,619186,419 cases of produced wine during the years ended December 31, 20242025 and 2023,2024, respectively, a decrease of 5,20013,405 cases, or 2.7%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 20242025 when compared to 2023.2024.

Net loss was $117,894$917,685 and $1,198,593,$117,894, for the years ended December 31, 20242025 and 2023,2024, respectively, aan decreaseincrease in net loss of $1,080,699, or 90.2%,$799,791, for the year ended December 31, 20242025 over the prior year period. The primary reason for this decreaseincrease was a higherlower gross profit from additional reduced sales revenue at higher margins in the current yearyear, being partially offset by higher interestother expenseincome in 20242025 compared to the previous year as the result of a legal settlement received by the Company attributable year.to historical wildfires.

Net loss applicable to common shareholders was $2,370,835 $3,170,626 and $3,245,690,$2,370,835, for the years ended December 31, 20242025 and 2023,2024, respectively, a decreasean increase of $874,855,$799,791, or 27.0%,33.7%, for the year ended December 31, 20242025 over the prior year period. This decreaseincrease was primarily driven by a lowerhigher net loss, being partially offset by higher preferred stock dividends.loss.

The Company had net sales revenues of $39,782,442$37,197,122 and $39,136,114$39,782,442 for the years December 31, 20242025 and 2023,2024, respectively, ana increasedecrease of $2,585,320, $646,328, or 1.7%,6.5%, for the year ended December 31, 20242025 over the prior year period primarily as a result of ana increasedecrease in revenue from direct sales, net of excise taxes, of $736,057,$1,013,762, or 3.6%4.8% in 20242025 compared to 2023,2024, being partially offset byand a decrease in revenue from sales to distributors of $89,729 $1,571,558 or 0.5%8.5% in 20242025 compared to 2023.2024.

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 2024,2025, revenues from retail sales increaseddecreased 3.8%,4.7%, revenues from in-state sales increaseddecreased 13.8%,4.8%, and revenues from out-of-state sales decreased 6.7%,10.2%, compared to 2023.2024.

Direct sales included $0 and $69,924 of bulk wine and grape sales in the years ended December 31, 20242025 and 2023, respectively,2024, and represented approximately 53.4%54.4% and 52.4% 53.4% of the Company’s total revenue for 20242025 and 2023,2024, respectively, while the Company’s remaining revenues came from sales through distributors.

Retail sales revenues for the years ended December 31, 20242025 and 20232024 were $21,465,475$20,458,007 and $20,680,024$21,465,475 respectively, ana increasedecrease of $785,451,$1,007,468, or 3.8%,4.7%, for the year ended December 31, 20242025 over the prior year period. The increasedecrease in retail sales revenues in 20242025 compared to 20232024 was mostly a result of increaseddecreased revenues from ainternet, newtasting retailroom locationand beingtelephone opensales forin longer during 2024.2025.

In-state sales revenues for the years ended December 31, 20242025 and 20232024 were $6,470,363$6,158,602 and $5,686,517,$6,470,363, respectively, ana increasedecrease of $783,846,$311,761, or or 13.8%,4.8%, for the year ended December 31, 20242025 over the prior year period.

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 Company’s 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 Company’s excise related taxes for the years ended December 31, 20242025 and 20232024 were $405,392$427,491 and $431,714,$405,392, respectively, aan decreaseincrease of $26,322,$22,099, for the year ended December 31, 20242025 over the prior year period. This decrease was due primarily to the timing of removals in 2024.2025.

Cost of Sales was $15,586,986$14,704,602 and $16,578,986$15,586,986 for the years ended December 31, 20242025 and 2023,2024, respectively, a decrease of $992,000,$882,384, or 6.0%,5.7%, for the year ended December 31, 2024,2025, over the prior year period. This change was primarily the result of a reduction in the volume of product sold and lower unit costs when compared to the prior year.

Gross profit was $24,195,456$22,492,520 and $22,557,128$24,195,456 for the years ended December 31, 20242025 and 2023,2024, respectively, ana increasedecrease of $1,638,328$1,702,936 or 7.3%,7.0%, for the year ended December 31, 20242025 over the prior year period. This increasedecrease was primarily the result of higher prices being charged for products and a higher percentage of totallower sales coming from direct salesrevenues in 2024 2025 compared to the prior year.

The gross margin percentage was 60.8%60.5% and 57.6%60.8% for the years ended December 31, 20242025 and 2023,2024, respectively, ana increasedecrease of 3.20.3 percentage points, for the year ended December 31, 20242025 over the prior year period. ThisThe increasedecrease in the gross profit percentage was primarily the result of higher direct sales prices and more sales coming from direct to consumer salesdiscounts in 2024.2025.

Selling, general and administrative expenses were $23,623,598$23,928,692 and $23,764,330$23,623,598 for the years ended December 31, 20242025 and 2023,2024, respectively, aan decreaseincrease of $140,732,$305,094, or 0.6%,1.3%, for the year ended December 31, 20242025 over the prior year period. This decreaseincrease was primarily as a result of lower laborhigher selling costs in 2024.2025.

Income(loss) from operations was $571,858$(1,436,172) and $(1,207,202)$571,878 for the years ended December 31, 20242025 and 2023,2024, respectively, ana increasedecrease of $1,779,060,$2,008,030, or 147.4%, for the year ended December 31, 20242025 compared to the prior year period. This increasedecrease was primarily the result of alower sales and higher gross profit and lower labor operatingselling expenses in 2024.2025.

Other income, net, was $99,629$1,394,628 and $114,827$99,629 for the years ended December 31, 20242025 and 2023,2024, respectively, aan decreaseincrease of $15,198,$1,294,999, or 13.2%,for for the year ended December 31, 20242025 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 $226,799$291,581 and $487,861$226,799 for the years ended December 31, 20242025 and 2023,2024, respectively, aan decreaseincrease of $261,062,$64,782, or 53.5%,28.6%, for the year ended December 31, 20242025 over the prior year period. This decreaseincrease in income tax benefit in 20242025 compared to 20232024 was primarily the result of a higherlower income from operations in 20242025 compared to 20232024, alongbeing withpartially theoffset impactby ofhigher aother changeincome in the tax rate related to amended returns to claim the credit for employer social security and medicare taxes paid on certain employee tips.2025.

Loss per common share after preferred dividends was $0.48$0.64 and $0.65$0.48 for the years ended December 31, 20242025 and 2023,2024, respectively, aan decreaseincrease of $0.17,$0.16, or 26.0%,33.3%, for the year ended December 31, 20242025 over the prior year period. The primary reason for this decreaseincrease was a lower higher net loss partially offset by higher preferred stock dividends in 20242025 compared to 2023.2024.

The Company had cash balances of $410,886 at December 31, 2025, and $320,883 at December 31, 2024, and $238,482 at December 31, 2023.2024. 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, and $2,684,982 at December 31, 2023.2024. The Company had no bank overdraft at December 31, 2025, and a bank overdraft of $473,016 at December 31, 2024, and $393,416 at December 31, 2023.2024.

In 2024,2025, the Company’s earnings before interest, taxes, depreciation, and amortization (“EBITDA”) increaseddecreased 71.1%19.7% to $3,995,135$3,209,021 from $2,334,629$3,995,135 in 2023,2024, primarily as a result of a lowerhigher net loss in 2024.2025.

Approximately 59%55% of the Company’s case sales during 20242025 were of the Company’s flagship varietal, Pinot Noir. Case sales of Pinot Gris and Riesling follow with approximately 16%15% and 7% of case sales, respectively. The Company sold approximately 186,419173,014 and 191,619186,419 cases of Company-produced wine during the years ended December 31, 20242025 and 2023,2024, respectively. This represents a decrease of approximately 5,20013,405 cases, or 2.7%,7.2%, 2024in 2025 compared to 2023.2024. The decrease in case sales in 20242025 compared to 20232024 was primarily the result of a decrease in sales to distributors.

The tasting 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.Awards for the second consecutive year. The Company was also awarded the #2 Best Wine Club in the nation by USA Today.Today for the second consecutive year.

Wine Enthusiast Magazine awardedrated the Company’s2022 Père Ami Red Blend 93 points, 2022 Métis Red Blend 94 points, Willamette Valley Vineyards 20212023 BernauFounders’ BlockReserve Pinot Noir 93and 2023 Dijon Clone Chardonnay 92 points, and the 2022 DijonBernau Estate Pinot Noir 93 Clone Chardonnay was also awarded 91 points.

James Suckling rated the Company’s2023 2021Founders’ EltonReserve Pinot Noir 92 points and theChardonnay 202193 Signaturepoints. CuvéeNational Sales’ 2023 White Pinot Noir 91 points. He alsoreceived rated the Company’s 2021 Estate Pinot Noir 91 points, Dijon Clone Chardonnay 91 points, 2021 Elton Chardonnay 91 points and the 20222023 Whole Cluster Pinot GrisNoir 9092 points.

OwenInternational BargreenWine ratedReport scored the Company’s 20202021 Domaine Willamette MéthodeBlanc Traditionnellede Blancs and Brut Rosé, 2022 Tualatin Estate Chardonnay, 2021 Mètis Red Blend and 2022 Dry Riesling allRosé 92 points. BargreenNational alsoSales’ scored2024 thePinot 2022 Dry Gewürztraminer atGris received 91 points and the 2023 PinotWhole BlancCluster andRosé 2022of Tualatin Estate White Pinot Noir 9290 points.

Total cash used in operating activities for the year ended December 31, 20242025 was $3,237,743,$1,790,239, which resulted primarily from a net loss in 20242025 as well as increased inventoryaccounts receivable and lower grapes payable. This was partially offset by depreciation, and an increase in accrued expenses.depreciation.

Total cash used in investing activities for the year ended December 31, 20242025 was $2,089,705,$502,887, which primarily consisted of cash used on landpurchase purchase,of propertyproduction developmentequipment and vineyard development costs.

Total cash provided from financing activities for the year ended December 31, 20242025 was $5,409,849,$2,383,129, which primarily consisted of proceeds from long term debt,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 UmpquaColumbia Bank (the “Credit Agreement”) that allows borrowing up to $2,000,000 against eligible accounts receivable and inventories, as defined in the agreement.Credit Agreement. The revolving revolving line bears interest at prime less 0.5%, with a floor of 3.25%, is payable monthly, and is subject to renewal. In July 2021, the Company renewed the Credit Agreement until July 31, 2023. In November 2022, the Company increased the borrowing line up to $5,000,000. In July 2023 2025, the line of credit wasCompany renewed forthe anCredit additionalAgreement twountil years.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%,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 andebt outstandingservice linecoverage, as defined, and limits the level of credit balanceacquisitions of $2,684,982property atand 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, 2023, at an interest rate of 8.0%.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 owed to AgWest, including the portion due in the next year,$14,042,910, exclusive of debt issuance costs of $178,908. As of December 31, 2023, the Company had a total long-term debt balance of $7,590,659, exclusive of debt issuance costs of $105,989. The debt with AgWest was used to finance the Estate Hospitality Center and subsequent remodels, invest in winery equipment to increase the Company’s winemaking capacity, acquire new vineyard land for future development and finance new tasting room locations.

The foregoing discussion and analysis of the Company’s financial condition and results of operations are based upon our unaudited condensed financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these unaudited condensed financial statements requires the Company’s management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to revenue recognition, collection of accounts receivable, valuation of inventories, and amortization of vineyard development costs. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. A description of the Company’s critical accounting policies and related judgments and estimates that affect the preparation of the Company’s financial statements is set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Such policies were unchanged during the threesix months ended MarchJune 31,30, 2026.

The Company’s wines are made from grapes grown in vineyards owned, leased or contracted by the Company, and from grapes purchased from other vineyards. The grapes are harvested, fermented and made into wine primarily at the Company’s winery in TurnerTurner, Oregon (the “Winery”) and the wines are sold principally under the Company’s Willamette Valley Vineyards label, but also under the Griffin Creek, Pambrun, Elton, Maison Bleue, Metis, Natoma, Pere Ami, Elton, Domaine Willamette and Tualatin Estates labels. The Company also owns the Tualatin Estate Vineyards and Winery, located near Forest Grove, Oregon and the Domaine Willamette Winery located near Dundee, Oregon. The Company generates revenues from the sales of wine to wholesalers and direct to consumers.

Direct to consumer sales primarily include sales through the Company’s tasting rooms, telephone, internet and wine club. Direct to consumer sales are at a higher unit price than sales through distributors 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 the Company’s existing tasting rooms and the opening of new locations, and growth in wine club membership. Additionally, the Company’s Preferred Stock sales since August 2015 have resulted in approximately 16,287 current21,381 new preferred stockholders many of which the Company believes are wine enthusiasts that are current and potential customers of the Company.

The Company sold 38,89287,655 and 31,83580,489 cases of produced wine during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, an increase of 7,0577,166 cases, or 22.2%8.9% in the current year period over the prior year period. The increase in wine case sales was primarily the result of having higher wholesaleincreased case sales inthrough the current quarter when compared to the same quarter last year.distributors.

At March 31,June 30, 2026, wine inventory included 152,337 165,930 cases of bottled wine and 681,857523,103 gallons of bulk wine in various stages of the aging process. Case 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 2,58767,212 cases during the threesix months ended MarchJune 31,30, 2026.

Owen BargreenPaul Gregutt rated the Company’s 2023 Bernau Estate Pinot Noir and 2022 Elton Pinot Noir 9392 points, and 91 points andto the 2024 Estate Pinot Gris 92 points.Gris.

Cost of salesSales for the three months ended MarchJune 31,30, 2026 and 2025 waswere $3,227,089$4,262,550 and $2,782,475,$3,979,145, respectively, an increase of $444,614,$283,405, or 16.0%,7.1%, in the current period over the prior year period. This change was primarily the result of the higher numbercost of casesproducts sold in the current quarter compared to the same quarter last year. Cost of Sales for the six months ended June 30, 2026 and 2025 were $7,489,639 and $6,761,620, respectively, an increase of $728,019 or 10.8%, in the current period over the prior year period. This change was primarily the result of higher cost products sold in the first quartersix months of 2026 when compared to the same quarterperiod in 2025.

Gross profit as a percentage of net sales for the three months ended MarchJune 31,30, 2026 and 2025 was 60.9%57.5% and 63.1%,61.0%, respectively, a decrease of of 2.23.5 percentage points in the current quarteryear period over the prior year period, mostly as a result of higher costs of products compared to the same quarter of 2025. Gross profit as a percentage of net sales for the six months ended June 30, 2026 and 2025 was 59.1% and 61.9%, respectively, a decrease of 2.8 percentage points in the current year period over the prior year.year period. The decrease was primarily the result of ahigher higher percentagecosts of products in direct and distributor sales coming from distribution which has a lower gross margin combined with the mix of vintages sold in the first quarter six months of 2026 when compared to the same quarterperiod in the 2025.prior year.

Net lossInterest expense for the three months ended March 31,June 30, 2026 and 2025 was $565,073$267,994 and $728,981,$270,145, respectively, a decrease of $163,908$2,151 or 22.5%,0.8%, in the firstsecond quarter of 2026 over the same quarter in the prior year. Interest expense for the six months ended June 30, 2026 and 2025 was $555,307 and $568,366, respectively, a decrease of $13,058 or 2.3%, in the current year period over the prior year period. The decrease in netinterest lossexpense for the second quarter and first quartersix months of 2026, compared to the comparable period in 2025,2026 was primarily the result of higherlower casecredit salesline balances compared to distributorsthe insecond 2026.quarter and first six months of 2025.

Net loss applicable to common shareholders for the three months ended MarchJune 31,30, 2026 and 2025 was $1,171,144$1,995,947 and $1,292,158,$470,381, respectively, a decreasean increase of $121,014,$1,525,566, or 9.4%,324.3%, in the first second quarter of 2026 over the same quarter in the prior year. Net loss applicable to common shareholders for the six months ended June 30, 2026 and 2025 was $3,167,091 and $1,762,539, respectively, an increase in net loss of $1,404,552, or 79.7%, in the current year period over the prior year period. The decreaseincrease in loss applicable to common shareholders in the second quarter and the first quartersix months of 2026, compared to the same period of 2025, was the result of a lowerhigher net loss in the current period.

At MarchJune 31,30, 2026, the Company had a working capital balance of $26.6$23.7 million and a current working capital ratio of 3.452.92:1.

At MarchJune 31,30, 2026, the Company had a cash balance of $404,712.$589,502. At December 31, 2025, the Company had a cash balance of $410,886.

Total cash generated from operating activities in the threesix months ended MarchJune 31,30, 2026 was $794,947.$2,745,399. Cash generated from operating activities for the threesix months ended MarchJune 31,30, 2026 was primarily associated with lower accounts receivablesreceivables, lower inventories and lowerhigher inventories,accounts payable, being partially offset by reduced grapes payable.

Total cash used in investing activities in the three six months ended MarchJune 31,30, 2026 was $70,750.$124,248. Cash used in investing activities for the three six months ended MarchJune 31,30, 2026 consisted of cash used for computer on equipment and vineyard development costs.

Total cash used in financing activities in the three six months ended MarchJune 31,30, 2026 was $730,371.$2,442,535. Cash used in financing activities for the three six months ended MarchJune 31,30, 2026 primarily consisted of payments on the line of credit and payments on long term debt, being partially offset by an increase in bank overdraft proceeds.

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.agreement. The revolving line bears interest at prime less 0.5%,0.5% with a floor of 3.25%,7.0%, is payable monthly, and is subject to renewal. In NovemberJuly 2022, the Company increased2026 the borrowing line upof tocredit $5,000,000. In July 2025, the Companywas renewed thefor Credit$4,000,000. Agreement until July 31, 2026. The Company had an outstanding line of credit balance of $2,359,437$634,842 at MarchJune 31,30, 2026, at an interest rate of 7.0%, and an outstanding line of credit balance of $3,140,140 at December 31, 2025, at an interest rate of 7.0%.

As of MarchJune 31,30, 2026, the Company had a 15-year installment note payable of $854,907,$825,152, due in quarterly payments of $42,534, associated with the purchase of property in the Dundee Hills AVA.

As of MarchJune 31,30, 2026, the Company had a total long-term debt balance of $14,935,020,$14,686,418, including the portion due in the next year, owed to AgWest, exclusive of debt issuance costs of $154,090.$149,342. As of December 31, 2025, the Company had a total long-term debt balance of $15,184,395, exclusive of debt issuance costs of $158,837.