SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
**☑ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For thequarterly period ended September 30, 2024
or
**☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________________ to _________________________
Commission File Number:001-41147
Fresh Vine Wine, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 87-3905007 |
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| (State or other jurisdiction of | (I.R.S. Employer |
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| incorporation or organization) | Identification No.) |
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| P.O. Box 78984 | Charlotte, NC 28271 |
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| (Address of principal executive offices) | (Zip Code) |
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(855) 766-9463
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
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| Common stock, $0.001 par value | VINE | NYSE American |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☑Yes ☐No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☑Yes ☐No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
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| Non-accelerated filer ☑ | Smaller reporting company ☑ |
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| Emerging growth company ☑ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).☐Yes☑No
As of November 14, 2024, the registrant had 15,976,227 shares of common stock outstanding.
TABLE OF CONTENTS
| Page No. |
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| PART I. FINANCIAL INFORMATION | 1 |
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| Item 1. Financial Statements | 1 |
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| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 |
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| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 30 |
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| Item 4. Controls and Procedures | 30 |
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| PART II. OTHER INFORMATION | 31 |
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| Item 1. Legal Proceedings | 31 |
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| Item 1A. Risk Factors | 31 |
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| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 33 |
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| Item 3. Defaults Upon Senior Securities | 33 |
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| Item 4. Mine Safety Disclosures | 33 |
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| Item 5. Other Information | 33 |
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| Item 6. Exhibits | 34 |
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| Signatures | 35 |
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Cautionary Statement Concerning Forward-Looking Statements
We make forward-looking statements in this Quarterly Report on Form 10-Q. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “should,” “would,” “could,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to known and unknown risks, uncertainties, and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance, or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the numerous risks and uncertainties described in the section titled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, in the other reports and documents that we file with the SEC, and in this Quarterly Report on Form 10-Q.
While we believe we have identified material risks, these risks and uncertainties are not exhaustive. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The forward-looking statements in this report represent our views as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements whether as a result of new information, future developments or otherwise, and we do not intend to do so.
Forward-looking statements include, but are not limited to, statements about:
| ● | our ability to complete, on a timely basis or at all, the proposed Business Combination with Adifex Holdings LLC, pursuant to the terms and conditions of the Business Combination Agreement; |
| ● | the likelihood of the satisfaction of certain conditions to the completion of the Business Combination and whether and when the Business Combination will be completed; |
| ● | the continued listing of our common stock on the NYSE American pending closing of the proposed Business Combination, or new combined company’s ability to satisfy the initial listing standards of the NYSE American; |
| ● | the occurrence of any event, change or other circumstance or condition that could give rise to the termination of the Business Combination Agreement; |
| ● | the sufficiency of our cash and working capital to support continuing operations and to pay transaction expenses of up to $10,000,000 through the closing of the proposed Business Combination; |
| ● | the effect of the announcement, pendency or completion of the proposed Business Combination on our business relationships, operating results and business generally; |
| ● | the outcome of any legal proceedings related to the Business Combination Agreement or the transactions contemplated thereby; |
| ● | the expected benefits of, and potential value created by, the Business Combination for our stockholders;; |
| ● | the strategy or future operations of the new combined company following the closing of the proposed Business Combination; |
| ● | the new combined company’s projected financial performance; |
| ● | our ability to continue as a going concern in the absence of obtaining additional financing; |
| ● | our ability to obtain additional financing within timeframes required on terms acceptable to us, or at all; |
| ● | our ability to regain and maintain compliance with NYSE American continued listing standards; |
| ● | the strategy or future operations of our company; |
| ● | our company’s projected financial performance; |
| ● | expectations concerning Fresh Vine’s relationships and actions with third parties; |
| ● | our ability to retain or recruit, or effect changes required in, our officers, key employees or directors; |
| ● | future regulatory, judicial and legislative changes in Fresh Vine’s industry; |
| ● | our reliance on our brand name, reputation and product quality; |
| ● | our ability to adequately address the demands that may be placed on our management, operational and production capabilities; |
| ● | the effectiveness of our advertising and promotional activities and investments; |
| ● | our ability to refocus our marketing and brand promotion efforts following the termination of the license agreements with our celebrity brand ambassadors; |
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| ● | general competitive conditions, including actions our competitors may take to grow their businesses; |
| ● | fluctuations in consumer demand for wine; |
| ● | overall decline in the health of the economy and consumer discretionary spending; |
| ● | the occurrence of adverse weather events, natural disasters, public health emergencies or other unforeseen circumstances that may cause delays to or interruptions in our operations; |
| ● | risks associated with disruptions in our supply chain for grapes and raw and processed materials, including corks, glass bottles, barrels, winemaking additives and agents, water and other supplies; |
| ● | the impact of COVID-19 on our customers, suppliers, business operations and financial results; |
| ● | disrupted or delayed service by the distributors we rely on for the distribution of our wines; |
| ● | our ability to successfully execute our growth strategy, including continuing our expansion in the direct-to-consumer sales channel; |
| ● | quarterly and seasonal fluctuations in our operating results; |
| ● | our ability to protect our trademarks and other intellectual property rights, including our brand and reputation; |
| ● | our ability to comply with laws and regulations affecting our business, including those relating to the manufacture, sale and distribution of wine; |
| ● | the risks associated with the legislative, judicial, accounting, regulatory, political and economic risks and conditions; |
| ● | claims, demands and lawsuits to which we are, and may in the future, be subject and the existence or sufficiency of our insurance or indemnities coverage; |
| ● | our ability to operate, update or implement our IT systems; |
| ● | our ability to successfully pursue strategic acquisitions and integrate acquired businesses; |
| ● | our ability to remediate any material weakness in, or to maintain effective, internal controls over financial reporting and disclosure controls and procedures; |
| ● | the potential liquidity and trading of our securities; |
| ● | the future trading prices of our common stock and the impact of securities analysts’ reports on these prices; |
| ● | our ability to pay accrued dividends to the holders of our Series A Convertible Preferred Stock; and |
| ● | any statements of the plans, strategies and objectives of management for future operations, including the execution of integration plans and the anticipated timing of filings. |
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this report. Although we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.
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