LQR House Inc

Previous 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.

Current wording

For the three months ended September 30, 2024 and 2023, service revenues were $30,918 and $101,414, 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 $70,496 as more focus was emphasized on the CWS Platform.

Previous 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.

Current wording

For the three months ended September 30, 2024, product revenues were $593,546 compared to $69,097 in the similar 2023 period. The increase was due to $575,115 in revenues generated from the CWS Platform after the acquisition in November 2023.

Previous wording

For the three months ended June 30, 2024 and 2023, service cost of revenues were $69,023 and $95,830, respectively. Cost of service revenues decreased by $26,807 in 2024 due to decrease in service revenue in the second quarter. In 2023, cost of revenues included amortization of the marketing license, which was impaired as of December 31, 2023.

Current wording

For the three months ended September 30, 2024 and 2023, service cost of revenues were $45,870 and $97,504, respectively. Cost of service revenues decreased by $51,634 in 2024, due to decrease in service revenue in the third quarter. In 2023, cost of revenues included amortization of the marketing license, which was impaired as of December 31, 2023.

Previous 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.

Current wording

Product cost of revenues was $640,645 and $65,388 during the three months ended September 30, 2024 and 2023. The increase was due to product and shipping costs associated with the CWS Platform acquisition in November 2023.

Previous wording

Gross profit (loss) was ($152,190) and $55,061 for the three months ended June 30, 2024 and 2023. The Company has incurred gross losses in 2024 as it transitions its strategies from marketing to the CWS Platform. Management is exploring various strategies, including customer acquisition and new partnerships, to increase volume in order to achieve better gross margins in 2024.

Current wording

Gross profit (loss) was ($62,051) and $7,619 for the three months ended September 30, 2024 and 2023. The Company has incurred gross losses in 2024 as it transitions its strategies from marketing to the CWS Platform. Management is exploring various strategies, including customer acquisition and new partnerships, to increase volume in order to achieve better gross margins in 2024.

Previous 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.

Current wording

For the three months ended September 30, 2024 and 2023, general and administrative expenses were $1,522,785 and $4,803,821, respectively. General and administrative expenses decreased by $3,281,036. In 2023, the Company recorded $2,552,500 in non-cash stock-based compensation expense due to the issuance of common shares for services. During the three months ended September 30, 2024 the Company recorded $720,842 in non-cash stock-based compensation expense due to vesting of restricted stock units.

Previous wording

For the three months ended June 30, 2024 and 2023, sales and marketing expenses were $764,807 and $51,864 respectively. The increase of $712,943 was primarily due to advertising and marketing and investor relation campaigns beginning in late 2023 and continuing in the second quarter of 2024. During the three months ended June 30, 2024 bonus expenses were recorded $200,000 under sales and marketing.

Current wording

For the three months ended September 30, 2024 and 2023, sales and marketing expenses were $1,919,125 and $574,026 respectively. The increase of $1,345,099 was primarily due to advertising and marketing and investor relation campaigns beginning in late 2023 and continuing in the third quarter of 2024. During the three months ended September 30, 2024 bonus expenses were recorded $200,000 under sales and marketing.

Previous wording

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

Current wording

Net loss for the three months ended September 30, 2024 and 2023 was $3,363,380 and $5,541,228, respectively.

Previous wording

The following table sets forth key components of our results of operations during the six months ended June 30, 2024 and June 30, 2023.

Current wording

The following table sets forth key components of our results of operations during the nine months ended September 30, 2024 and September 30, 2023.

Previous wording

For the six months ended June 30, 2024 and 2023, service revenues were $83,771 and $293,798 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 $210,027 as more focus was emphasized on the CWS Platform.

Current wording

For the nine months ended September 30, 2024 and 2023, service revenues were $114,689 and $395,212 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 $280,523 as more focus was emphasized on the CWS Platform.

Previous wording

For the six months ended June 30, 2024 product revenues were $955,240 compared to $47,787 in the similar 2023 period. The increase was due to $948,431 in revenues generated from the CWS Platform after the acquisition in November 2023.

Current wording

For the nine months ended September 30, 2024 product revenues were $1,548,786 compared to $116,884 in the similar 2023 period. The increase was due to $1,523,546 in revenues generated from the CWS Platform after the acquisition in November 2023.

Previous 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.

Current wording

For the nine months ended September 30, 2024 and 2023, service cost of revenues were $152,101 and $296,331 respectively. Cost of revenues services decreased by $144,230 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

Product cost of revenues related was $1,164,467 and $40,131 during the six 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.

Current wording

Product cost of revenues related was $1,805,112 and $105,519 during the nine months ended September 30, 2024 and 2023 The increase was due to product and shipping costs associated with the CWS Platform acquisition in November 2023.

Previous wording

Gross profit (loss) was ($231,687) and $102,627 for the six months ended June 30, 2024 and 2023. The Company has incurred gross losses in 2024 as it transitions its strategies from marketing contracts to product revenues via the CWS Platform. Management is exploring various strategies to increase customer acquisition, including an emphasis in organic search optimization to achieve higher revenue volumes. The Company is continuing to explore new partnerships for added revenue sources and is working towards reducing its product cost of revenues.

Current wording

Gross profit (loss) was ($293,738) and $110,246 for the nine months ended September 30, 2024 and 2023. The Company has incurred gross losses in 2024 as it transitions its strategies from marketing contracts to product revenues via the CWS Platform. Management is exploring various strategies to increase customer acquisition, including an emphasis in organic search optimization to achieve higher revenue volumes. The Company is continuing to explore new partnerships for added revenue sources and is working towards reducing its product cost of revenues.

Previous wording

For the six months ended June 30, 2024 and 2023, general and administrative expenses were $2,963,856 and $3,881,005 respectively. General and administrative expenses decreased by $917,149. 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 six months ended June 30, 2024 the Company recorded $1,441,684 in non-cash stock-based compensation expense due to vesting of restricted stock units.

Current wording

For the nine months ended September 30, 2024 and 2023, general and administrative expenses were $4,486,641 and $8,684,826 respectively. General and administrative expenses decreased by $4,198,185. In 2023, the Company recorded $5,552,500 in non-cash stock-based compensation expense due to the issuance of common shares for services. During nine months ended September 30, 2024 the Company recorded $2,162,527 in non-cash stock-based compensation expense due to vesting of restricted stock units.

Previous 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.

Current wording

For the nine months ended September 30, 2024 and 2023, sales and marketing expenses were $3,470,348 and $674,213 respectively. The increase of $2,796,135 was primarily due to advertising and marketing and investor relation campaigns beginning in late 2023 and continuing throughout 2024. During the nine months ended September 30, 2024 bonus expenses were recorded $400,000 under sales and marketing.

Previous wording

Net loss for the six months ended June 30, 2024 and 2023 was $4,636,685 and $3,878,565, respectively.

Current wording

Net loss for the nine months ended September 30, 2024 and 2023 was $8,000,066 and $9,419,793, respectively.

Previous 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.

Current wording

As of September 30, 2024 and December 31, 2023, we had cash and cash equivalents of $247,913 and $7,064,348 respectively. As of September 30, 2024, we also had $3,439,467 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 $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.

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 $8,000,066 and $9,419,793 for the nine months ended September 30, 2024 and 2023, and has negative cash flows from operations of $3,565,293 for the nine months ended September 30, 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.

Previous 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.

Current wording

Management plans to raise additional capital to fund operations through debt and/or equity financings. 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 six months ended June 30, 2024 and 2023:

Current wording

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

Previous 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.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $3,565,293, primarily due to our net loss of $8,000,066 partially offset by non-cash charges of $2,081,286 and changes in our operating assets and liabilities of $2,353,487.

Previous 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.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2023 was $4,568,848, primarily due to our net loss of $9,419,793 partially offset by non-cash charges of $5,828,378 and changes in our operating assets and liabilities of $977,433.

Previous 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.

Current wording

Net cash provided by (used in) investing activities for the nine months ended September 30, 2024 and 2023 were ($2,688,227) and $137,426, respectively. In 2024, the Company purchased marketable securities of $7,727,850, and sold securities of $4,369,623. The Company also received $670,000 back from an investment it was no longer pursuing. In 2023, the Company had repayments from CWS.

Previous 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.

Current wording

Net cash provided by (used in) financing activities for the nine months ended September 30, 2024 and 2023 was ($562,915) and $6,287,692 respectively. In 2024, the Company repurchased shares of common stock. In 2023, the Company received $5,449,156 in proceeds from share issuances.