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 the quarterly period ended September 30, 2024

☐ 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
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

P.O. Box 78984		Charlotte, NC 28271
(Address of principal executive offices)		(Zip Code)

(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
Common stock, $0.001 par value		VINE		NYSE American

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 ☐
Non-accelerated filer ☑	Smaller reporting company ☑
	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.

FRESH VINE WINE, INC.

TABLE OF CONTENTS

	Page No.
PART I. FINANCIAL INFORMATION	1

Item 1. Financial Statements	1

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3. Quantitative and Qualitative Disclosures About Market Risk	30

Item 4. Controls and Procedures	30

PART II. OTHER INFORMATION	31

Item 1. Legal Proceedings	31

Item 1A. Risk Factors	31

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	33

Item 3. Defaults Upon Senior Securities	33

Item 4. Mine Safety Disclosures	33

Item 5. Other Information	33

Item 6. Exhibits	34

Signatures	35

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;

●

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.

iii

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

INDEX TO FINANCIAL STATEMENTS

	Page
Balance Sheets as of September 30, 2024 (unaudited) and December 31, 2023	2
Statements of Operations for the three and nine months ended September 30, 2024 and 2023 (unaudited)	3
Statements of Changes in Stockholders’ Equity (Deficit) for the three and nine months ended September 30, 2024 and 2023 (unaudited)	4
Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (unaudited)	5
Notes to Financial Statements (unaudited)	6

FRESH VINE WINE, INC.

BALANCE SHEETS

	September 30,
	2024 (Unaudited)			December 31, 2023
Assets
Current assets
Cash	$	72,029		$	236,340
Restricted cash		50,039			100,000
Accounts receivable		45,280			172,101
Inventories		232,826			337,873
Prepaid expenses		81,589			42,943
Total current assets		481,763			889,257

Equity investment		500,000			500,000

Total assets	$	981,763		$	1,389,257

Liabilities, and stockholders’ deficit
Current liabilities
Accounts payable	$	1,156,937		$	509,337
Settlement payable		585,976			585,976
Accrued expenses		1,125,942			810,723
Accrued expenses - related parties		309,333			309,333
Deferred revenue		2,685			3,407
Note payable		27,500			—
Convertible notes payable, net of discount		174,969			—
Total current liabilities		3,383,342			2,218,776

Total liabilities		3,383,342			2,218,776

Stockholders’ deficit
Preferred stock, $0.001 par value - 25,000,000 shares authorized
Series A preferred stock, 10,000 shares issued and outstanding at September 30, 2024 and December 31, 2023		10			10
Series B preferred stock, 9,135 and 0 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		9			—
Common stock, $0.001 par value - 100,000,000 shares authorized at September 30, 2024 and December 31, 2023; 15,976,227 shares issued and outstanding at September 30, 2024 and December 31, 2023		15,976			15,976
Additional paid-in capital		26,572,493			25,631,255
Accumulated deficit		(28,990,067	)		(26,476,760	)
Total stockholders’ deficit		(2,401,579	)		(829,519	)

Total liabilities and stockholders’ deficit	$	981,763		$	1,389,257

See accompanying notes to the financial statements.

FRESH VINE WINE, INC.

STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended						Nine months ended
	September 30,						September 30,
	2024			2023			2024			2023
Wholesale revenue	$	7,766		$	744,532		$	39,926		$	1,192,138
Direct to consumer revenue		55,443			103,427			198,335			394,576
Total net revenue		63,209			847,959			238,261			1,586,714

Cost of revenues		65,046			889,844			240,539			3,631,491
Gain from recovery of inventory reserve		(154,483	)		—			—			—
Gross profit (loss)		152,646			(41,885	)		(2,278	)		(2,044,777	)

Selling, general and administrative expenses		459,988			1,141,390			2,393,735			4,784,535
Equity-based compensation		1,626			946,415			4,878			1,734,765
Operating loss		(308,968	)		(2,129,690	)		(2,400,891	)		(8,564,077	)

Other income		—			30			39			1,296
Interest expense		6,322			—			6,322			—

Net loss		(315,290	)		(2,129,660	)		(2,407,174	)		(8,562,781	)
Preferred dividends – Series A		50,000			15,600			106,133			15,600
Net loss attributable to common stockholders	$	(365,290	)	$	(2,145,260	)	$	(2,513,307	)	$	(8,578,381	)

Weighted average shares outstanding
Basic		15,976,227			15,976,227			15,976,227			15,085,911
Diluted		15,976,227			15,976,227			15,976,227			15,085,911

Net loss per share – basic	$	(0.02	)	$	(0.13	)	$	(0.15	)	$	(0.57	)
Net loss per share – diluted	$	(0.02	)	$	(0.13	)	$	(0.15	)	$	(0.57	)

See accompanying notes to the financial statements.

FRESH VINE WINE, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

For the Three and Nine Month Periods Ended September 30, 2024 and 2023

(Unaudited)


	Preferred Stock Series A				Preferred Stock Series B				Common Stock						Additional Paid-In		Accumulated
	Shares		Amount		Shares		Amount		Shares			Amount			Capital		Deficit			Total
Balance, December 31, 2022		—	$	—		—	$	—		12,732,257		$	12,732		$	21,420,732	$	(15,819,858	)	$	(5,613,606	)
Rights offering – common stock and warrants issued		—		—		—		—		3,143,969			3,144			2,543,584		—			2,546,728
Equity-based compensation		—		—		—		—		500,000			500			257,172		—			257,672
Stock forfeiture		—		—		—		—		(500,000	)		(500	)		500		—			—
Net loss		—		—		—		—		—			—			—		(2,010,824	)		(2,010,824	)
Balance, March 31, 2023		—		—		—		—		15,876,226			15,876			24,221,988		(17,830,682	)		6,407,182
Equity-based compensation		—		—		—		—		1,141,332			1,141			373,037		—			374,178
Net loss		—		—		—		—		—			—			—		(4,422,297	)		(4,422,297	)
Balance, June 30, 2023		—	$	—		—	$	—		17,017,558		$	17,017			24,595,025		(22,252,979	)		2,359,063
Issuance of preferred stock		8,000		8		—		—		—			—			749,992		—			750,000
Accrued preferred dividends, Series A (12%/share)		—		—		—		—		—			—			—		(15,600	)		(15,600	)
Equity-based compensation		—		—		—		—		—			—			111,748		—			111,748
Stock forfeiture		—		—		—		—		(1,041,331	)		(1,041	)		1,041		—			—
Net loss		—		—		—		—		—			—			—		(2,129,660	)		(2,129,660	)
Balance, September 30, 2023		8,000	$	8		—	$	—		15,976,227		$	15,976		$	25,457,806	$	(24,398,239	)	$	1,075,551


	Preferred Stock Series A				Preferred Stock Series B				Common Stock				Additional Paid-In		Accumulated
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, December 31, 2023		10,000	$	10		—	$	—		15,976,227	$	15,976	$	25,631,255	$	(26,476,760	)	$	(829,519	)
Issuance of Series B preferred stock		—		—		940		1		—		—		90,324		—			90,325
Accrued preferred dividends, Series A (12%/share)		—		—		—		—		—		—		—		(30,000	)		(30,000	)
Equity-based compensation		—		—		—		—		—				1,625		—			1,625
Net loss		—		—		—		—		—		—		—		(1,212,315	)		(1,212,315	)
Balance, March 31, 2024		10,000		10		940		1		15,976,227		15,976		25,723,204		(27,719,075	)		(1,979,884	)
Issuance of Series B preferred stock		—		—		8,195		8		—		—		714,684		—			714,692
Accrued preferred dividends, Series A (12%/share)		—		—		—		—		—		—		—		(26,133	)		(26,133	)
Equity-based compensation		—		—		—		—		—		—		1,626		—			1,626
Net loss		—		—		—		—		—		—		—		(879,569	)		(879,569	)
Balance, June 30, 2024		10,000	$	10		9,135	$	9		15,976,227	$	15,976		26,439,514		(28,624,777	)		(2,169,268	)
Accrued preferred dividends, Series A (24%/share)		—		—		—		—		—		—		—		(50,000	)		(50,000	)
Equity-based compensation		—		—		—		—		—		—		1,626		—			1,626
Issuance of warrants, with convertible notes payable		—		—		—		—		—		—		131,353

SEC Form 10-Q filed by Fresh Vine Wine Inc.