LQR House Inc

Previous wording

Our company, LQR House Inc. (“LQR”, “LQR House”, or the “Company”), intends to become a prominent force in the wine and spirits e-commerce, sector epitomized by its flagship alcohol marketplace, CWSpirits.com (“CWS Platform”). This platform delivers a diverse range of spirits, wines, and champagnes from esteemed retail partners like Country Wine & Spirits. Beyond its role in the e-commerce sector, LQR is a marketing agency with a specialized focus on the alcohol industry. We also intend to integrate the supply, sales, and marketing facets of the alcoholic beverage space into one easy to use platform and become the one-stop-shop for everything related to alcohol. To date, our primary business includes the development of premium limited batch spirit brands and marketing internal and external brands through our ownership of the CWS Platform, a U.S.-based e-commerce portal. Additionally, we are in the process of establishing an exclusive wine club. We believe that the marketing and brand management services we provide to our wholly owned and third-party clients will increase brand recognition thereof, and drive sales thereof through our e-commerce platform.

Current wording

Our company, LQR House Inc., a Nevada corporation (“LQR”, “LQR House”, or the “Company”), intends to become a prominent force in the wine and spirits e-commerce, sector epitomized by its flagship alcohol marketplace, CWSpirits.com (“CWS Platform”). This platform delivers a diverse range of spirits, wines, and champagnes from esteemed retail partners like Country Wine & Spirits. Beyond its role in the e-commerce sector, LQR is a marketing agency with a specialized focus on the alcohol industry. We also intend to integrate the supply, sales, and marketing facets of the alcoholic beverage space into one easy to use platform and become the one-stop-shop for everything related to alcohol. To date, our primary business includes the development of premium limited batch spirit brands and marketing internal and external brands through our ownership of the CWS Platform, a U.S.-based e-commerce portal. Additionally, we are in the process of establishing an exclusive wine club. We believe that the marketing and brand management services we provide to our wholly owned and third-party clients will increase brand recognition thereof, and drive sales thereof through our e-commerce platform.

Previous wording

The CWS Platform is an American online retailer specializing in alcohol products, striving to become the most trusted and convenient destination for online alcohol purchases. Combining the personalized service of a neighborhood alcohol shop with the efficiency of e-commerce, we offer a wide selection of products, including our exclusive brand, SWOL Tequila, all at competitive prices with fast shipping and around-the-clock convenience. At the heart of our brand is a commitment to exceptional customer service, driving us to continuously innovate our operations for an enhanced shopping experience. From user-friendly website navigation and a top-rated mobile app to detailed order tracking and personalized product recommendations, we are revolutionizing the online alcohol shopping experience, ensuring customer satisfaction remains paramount in all our endeavors.

Current wording

The CWS Platformis an American online retailer specializing in alcohol products, striving to become the most trusted and convenient destination for online alcohol purchases. Combining the personalized service of a neighborhood alcohol shop with the efficiency of e-commerce, we offer a wide selection of products, including our exclusive brand, SWOL Tequila, all at competitive prices with fast shipping and around-the-clock convenience. At the heart of our brand is a commitment to exceptional customer service, driving us to continuously innovate our operations for an enhanced shopping experience. From user-friendly website navigation and a top-rated mobile app to detailed order tracking and personalized product recommendations, we are revolutionizing the online alcohol shopping experience, ensuring customer satisfaction remains paramount in all our endeavors.

Previous wording

For the three months ended March 31, 2024 and 2023, service revenues were $43,791 and $150,563, respectively. Service revenues are earned as we contract with third-party alcoholic beverage brands to utilize access to the CWS Platform, as well as vault memberships. Service revenues decreased by $106,772 as more focus was emphasized on the CWS Platform.

Current wording

For the three months ended June 30, 2024 and 2023, service revenues were $39,980 and $143,235, respectively. Service revenues are earned as we contract with third-party alcoholic beverage brands to utilize access to the CWS Platform, as well as vault memberships. Service revenues decreased by $103,255 as more focus was emphasized on the CWS Platform.

Previous wording

For the three months ended March 31, 2024 product revenues were $437,303 compared to $0 in the similar 2023 period. The increase was due to $485,571 in revenues generated from the CWS Platform after the acquisition in November 2023.

Current wording

For the three months ended June 30, 2024, product revenues were $517,937 compared to $47,787 in the similar 2023 period. The increase was due to $512,748 in revenues generated from the CWS Platform after the acquisition in November 2023.

Previous wording

Product cost of revenues related to the SWOL batch was $523,383 in the three months ended March 31, 2024. The increase was due to product and shipping costs associated with the CWS Platform acquisition in November 2023.

Current wording

Product cost of revenues was $641,084 and $40,131 during the three months ended June 30, 2024 and 2023. The increase was due to product and shipping costs associated with the CWS Platform acquisition in November 2023.

Previous wording

For the three months ended March 31, 2024 and 2023, general and administrative expenses were $1,606,461 and $321,317, respectively. General and administrative expenses increased due to professional fees, personnel costs and other public company expenses as our operations scaled upon our initial public offering in August 2023. In 2024, the Company recorded $720,842 in non-cash stock-based compensation expense due to vesting of restricted stock units.

Current wording

For the three months ended June 30, 2024 and 2023, general and administrative expenses were $1,357,395 and $3,559,688, respectively. General and administrative expenses decreased by $2,202,293. In 2023, the Company recorded $3,000,000 in non-cash stock-based compensation expense due to the issuance of common shares for services. During the three months ended June 30, 2024 the Company recorded $720,842 in non-cash stock based compensation expense due to vesting of restricted stock units.

Previous wording

Net loss for the three months ended March 31, 2024 and 2023 was $2,427,392 and $322,074 respectively.

Current wording

Net loss for the three months ended June 30, 2024 and 2023 was $2,209,293 and $3,556,491, respectively.

Previous wording

For the three months ended March 31, 2024 and 2023, service cost of revenues were $37,208 and $102,997, respectively. Cost of revenues services decreased by $65,789 in 2024, corresponding to the decreased revenues. In 2023, cost of revenues included amortization of the marketing license, which was impaired as of December 31, 2023.

Current wording

For the six months ended June 30, 2024 and 2023, service cost of revenues were $106,231 and $198,827 respectively. Cost of revenues services decreased by $92,596 in 2024, corresponding to the decreased revenues. In 2023, cost of revenues included amortization of the marketing license, which was impaired as of December 31, 2023.

Previous wording

For the three months ended March 31, 2024 and 2023, sales and marketing expenses were $786,415 and $48,323 respectively. The increase of $738,092 was primarily due to advertising and marketing and investor relation campaigns beginning in late 2023 and continuing in the first quarter of 2024.

Current wording

For the six months ended June 30, 2024 and 2023, sales and marketing expenses were $1,551,222 and $100,187 respectively. The increase of $1,451,035 was primarily due to advertising and marketing and investor relation campaigns beginning in late 2023 and continuing throughout 2024.

Previous wording

As of March 31, 2024 and December 31, 2023, we had cash and cash equivalents of $1,781,907 and $7,064,348 respectively. As of March 31, 2024, we also had $4,030,986 in mutual fund investments. To date, we have financed our operations primarily through issuances of common stock and sales of our products and services.

Current wording

As of June 30, 2024 and December 31, 2023, we had cash and cash equivalents of $622,825 and $7,064,348 respectively. As of June 30, 2024, we also had $4,015,742 in marketable securities. To date, we have financed our operations primarily through issuances of common stock and sales of our products and services.

Previous wording

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated profits since inception, has sustained net losses of $2,427,392 and $322,074 for the three months ended March 31, 2024 and 2023, and has negative cash flows from operations of $1,374,040 for the three months ended March 31, 2024. The Company requires additional capital to operate and expects losses to continue for the foreseeable future. These factors raise substantial doubts about the Company’s ability to continue as a going concern.

Current wording

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not generated profits since inception, has sustained net losses of $4,636,685 and $3,878,565 for the six months ended June 30, 2024 and 2023, and has negative cash flows from operations of $2,548,366 and 892,464 for the six months ended June 30, 2024 and 2023. The Company requires additional capital to operate and expects losses to continue for the foreseeable future. These factors raise substantial doubts about the Company’s ability to continue as a going concern.

Previous wording

The Company’s ability to continue as a going concern until it reaches profitability is dependent upon its ability to generate cash from operating activities and to raise additional capital to fund operations. Management plans to raise additional capital to fund operations through debt and/or equity financings. The Company has raised funds from the initial public offering in August 2023 and an additional $16.6 million from its public offerings in October and November 2023. Our failure to raise additional capital could have a negative impact on not only our financial condition but also our ability to execute our business plan. No assurance can be given that the Company will be successful in these efforts. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company may not be able to obtain financing on acceptable terms, or at all.

Current wording

Management plans to raise additional capital to fund operations through debt and/or equity financings. The Company has raised funds from the initial public offering in August 2023 and an additional $16.6 million from its public offerings in October and November 2023. Our failure to raise additional capital could have a negative impact on not only our financial condition but also our ability to execute our business plan. No assurance can be given that the Company will be successful in these efforts. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company may not be able to obtain financing on acceptable terms, or at all.

Previous wording

The following table presents selected captions from our condensed statement of cash flows for the three months ended March 31, 2024 and 2023:

Current wording

The following table presents selected captions from our condensed statement of cash flows for the six months ended June 30, 2024 and 2023:

Previous wording

Net cash used in operating activities for the three months ended March 31, 2024 was $1,374,040, primarily due to our net loss of $2,427,392 partially offset by non-cash charges of $720,842 and changes in our operating assets and liabilities of $332,510.

Current wording

Net cash used in operating activities for the six months ended June 30, 2024 was $2,548,366, primarily due to our net loss of $4,636,685 partially offset by non-cash charges of $1,441,684 and changes in our operating assets and liabilities of $646,635.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2023 was $233,433, primarily due to our net loss of $322,074 partially offset by non-cash charges of $62,500 and changes in our operating assets and liabilities of $26,141.

Current wording

Net cash used in operating activities for the six months ended June 30, 2023 was $892,464, primarily due to our net loss of $3,878,565 partially offset by non-cash charges of $3,125,000 and changes in our operating assets and liabilities of $138,899.

Previous wording

Net cash provided by (used in) investing activities for the three months ended March 31, 2024 and 2023 were ($3,360,986) and $308,708, respectively. In 2024, the Company invested $4,030,986 in mutual fund investments, and received $670,000 back from an investment it was no longer pursuing. In 2023, the Company had repayments from CWS.

Current wording

Net cash provided by (used in) investing activities for the six months ended June 30, 2024 and 2023 were ($3,345,742) and $187,426, respectively. In 2024, the Company invested $4,015,742 in mutual fund investments, and received $670,000 back from an investment it was no longer pursuing. In 2023, the Company had repayments from CWS.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2024 and 2023 was $547,415 and $59,259, respectively. In 2024, the Company repurchased shares of common stock. Cash used in 2023 pertained to deferred offering costs.

Current wording

Net cash provided by (used in) financing activities for the six months ended June 30, 2024 and 2023 was ($547,415) and $797,530 respectively. In 2024, the Company repurchased shares of common stock. In 2023, the Company received $905,000 in proceeds from share issuances.

Previous wording

There have been no material changes in our critical accounting policies from those disclosed in our 2023 Annual Report on Form 10-K.

Current wording

There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.