Revenue Performance - For the three months ended September 30, 2025, total revenues decreased by 46% to $337,288 from $624,464 in the same period of 2024[130]. - Service revenues fell by approximately 35% to $19,960, primarily due to a lower volume of marketing services provided[132]. - Product revenues decreased by 47% to $317,328, attributed to reduced sales volume and lower customer traffic on the CWS Platform[133]. - Total revenues for the nine months ended September 30, 2025, were $1,265,156, down 24% from $1,663,475 in 2024, with product revenues decreasing by 26% to $1,152,521[142]. Profitability and Losses - Gross profit for the three months ended September 30, 2025, was $1,232, a significant improvement from a gross loss of $62,051 in 2024[131]. - The company reported a net loss of $16,828,913 for the three months ended September 30, 2025, compared to a net loss of $3,363,380 in the same period of 2024, representing a 400% increase in losses[131]. - Net loss for the nine months ended September 30, 2025, was $21,420,945, compared to a net loss of $8,000,066 in 2024, representing an increase in losses of 168%[152]. - Other income (expense) for the nine months ended September 30, 2025, reflected a net expense of approximately $12,989,795, compared to net other income of $250,661 in 2024, primarily due to a $13.0 million legal settlement expense[151]. - Gross profit for the nine months ended September 30, 2025, was $115,896, a significant improvement from a gross loss of $293,738 in 2024, reflecting a 139% increase[148]. Expenses - General and administrative expenses increased by 128% to $3,470,033, mainly due to higher legal fees incurred during the period[137]. - General and administrative expenses increased by 72% to $7,700,806 for the nine months ended September 30, 2025, compared to $4,486,641 in 2024, mainly due to higher legal costs[149]. - Sales and marketing expenses for the nine months ended September 30, 2025, were $846,240, a decrease of 76% compared to $3,470,348 in 2024, primarily due to the absence of website development costs and reduced advertising expenses[150]. Capital and Financing - The company issued 11,073,489 shares of common stock under an at-the-market offering agreement, generating net proceeds of $31,642,347[116]. - The company raised $47,252,830 in net proceeds through the issuance of common stock during the nine months ended September 30, 2025, compared to a net cash used in financing activities of $562,915 in 2024[154]. - Cash and cash equivalents as of September 30, 2025, were $10,039,230, an increase from $5,386,789 as of December 31, 2024[153]. - The company expects to continue incurring losses and requires additional capital to operate, indicating potential future equity offerings or debt financing[156]. Strategic Initiatives - The company plans to pursue opportunistic acquisitions to enhance its market position and expand its brand presence in the alcoholic beverage space[129]. - The company has established a wholly owned subsidiary, SWOL Holdings Inc., and formed another subsidiary, YHC Online Limited, in Hong Kong to support its growth strategy[115].

[FORM 10-Q (Cover Page Information)](index=1&type=section&id=FORM%2010-Q%20%28Cover%20Page%20Information%29) This section details the company's Form 10-Q filing, stock market listing, registrant status, and outstanding shares - LQR House Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025[1](index=1&type=chunk)[2](index=2&type=chunk) - The company's common stock trades on The Nasdaq Stock Market LLC under the symbol **YHC**[3](index=3&type=chunk) Registrant Status | Status | Indication | |:---|:---| | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | - As of August 12, 2025, the Company had **10,378,084 shares** of common stock issued and outstanding[4](index=4&type=chunk) [Implications of Being an Emerging Growth Company](index=4&type=section&id=Implications%20of%20Being%20an%20Emerging%20Growth%20Company) This section outlines the benefits and elections made by the company as an emerging growth company - LQR House Inc. qualifies as an 'emerging growth company' due to having less than **$1.235 billion in revenue** during its most recently completed fiscal year[9](index=9&type=chunk) - The company has elected to use the extended transition period for complying with new or revised accounting standards[10](index=10&type=chunk) - Benefits of emerging growth company status include reduced executive compensation disclosure, exemptions from non-binding shareholder advisory votes, and exemption from auditor attestation on internal control over financial reporting[11](index=11&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited financial statements and management's analysis of financial condition and operations [ITEM 1. Financial Statements – Unaudited](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20%E2%80%93%20Unaudited) This section presents the unaudited condensed consolidated financial statements of LQR House Inc. for the periods ended June 30, 2025, and December 31, 2024 (balance sheet), and for the three and six months ended June 30, 2025 and 2024 (statements of operations, stockholders' equity, and cash flows). These statements are prepared in accordance with U.S. GAAP for interim financial information and include various notes detailing the company's operations, going concern status, significant accounting policies, acquisitions, investments, and related party transactions [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position at specific points in time, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (Unaudited) | ASSETS | June 30, 2025 | December 31, 2024 | |:---|:---|:---| | Cash and cash equivalents | $4,566,936 | $5,386,789 | | Accounts receivable | $69,708 | $28,040 | | Accounts receivable, related party | $300,231 | $149,510 | | Prepaid expenses | $125,572 | $240,729 | | Total current assets | $5,062,447 | $5,805,068 | | Investments, at cost | $1,117,500 | $1,117,500 | | Intangible assets, net | $10,000 | $10,000 | | Prepaid joint venture agreements | $8,166,988 | $- | | **Total assets** | **$14,356,935** | **$6,932,568** | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | $1,040,736 | $530,643 | | Accounts payable, related party | $57,511 | $21,175 | | Due to related party | $3,000 | $- | | Accrued expenses | $385,402 | $927,711 | | Accrued expenses, related party | $678,392 | $5,971,000 | | Total current liabilities | $2,165,041 | $7,450,529 | | Total stockholders' equity (deficit) | $12,191,894 | $(517,961) | | **Total liabilities and stockholders' equity** | **$14,356,935** | **$6,932,568** | - Total assets increased significantly from **$6.93 million** at December 31, 2024, to **$14.36 million** at June 30, 2025, primarily driven by **$8.17 million** in prepaid joint venture agreements[13](index=13&type=chunk) - Stockholders' equity improved from a deficit of **$(517,961)** at December 31, 2024, to a positive **$12.19 million** at June 30, 2025, largely due to increased additional paid-in capital[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the company's financial performance over specific periods, detailing revenues, expenses, and net loss Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---|\ | Revenue - services | $15,319 | $39,980 | $92,675 | $83,771 | | Revenue - product | $483,209 | $517,937 | $835,193 | $955,240 | | Total revenues | $498,528 | $557,917 | $927,868 | $1,039,011 | | Total cost of revenue | $414,022 | $710,107 | $813,204 | $1,270,698 | | Gross profit (loss) | $84,506 | $(152,190) | $114,664 | $(231,687) | | Total operating expenses | $2,288,288 | $2,122,202 | $4,718,302 | $4,515,078 | | Loss from operations | $(2,203,782) | $(2,274,392) | $(4,603,638) | $(4,746,765) | | Net loss | $(2,202,382) | $(2,209,293) | $(4,592,032) | $(4,636,685) | | Net loss per common share - basic and diluted | $(1.10) | $(15.49) | $(3.50) | $(33.69) | - The company achieved a gross profit of **$84,506** for the three months ended June 30, 2025, a significant improvement from a gross loss of **$(152,190)** in the prior year period[14](index=14&type=chunk) - Net loss for the three months ended June 30, 2025, was **$(2,202,382)**, a slight improvement from **$(2,209,293)** in the same period of 2024[14](index=14&type=chunk) - Net loss per common share significantly improved from **$(15.49)** to **$(1.10)** for the three months ended June 30, 2025, primarily due to an increase in weighted average common shares outstanding[14](index=14&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in the company's equity over specific periods, including common stock and accumulated deficit Condensed Consolidated Statements of Stockholders' Equity (Unaudited) | Metric | Balances at Dec 31, 2024 | Balances at June 30, 2025 | |:---|:---|:---|\ | Common Stock (Shares) | 435,788 | 3,048,195 | | Common Stock (Amount) | $44 | $305 | | Additional Paid-In Capital | $42,336,213 | $59,637,839 | | Accumulated Deficit | $(42,306,803) | $(46,898,835) | | Total Shareholder's Equity (Deficit) | $(517,961) | $12,191,894 | - Total stockholders' equity shifted from a deficit of **$(517,961)** at December 31, 2024, to a positive **$12,191,894** at June 30, 2025[15](index=15&type=chunk) - The increase in equity was primarily driven by significant issuances of common stock through ATM offerings (**$11,559,068**) and warrant exercises (**$4,051,415**), and vesting of restricted stock units[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|\ | Net cash used in operating activities | $(8,263,348) | $(2,548,366) | | Net cash used in investing activities | $(8,166,988) | $(3,345,742) | | Net cash provided by (used in) financing activities | $15,610,483 | $(547,415) | | Net change in cash and cash equivalents | $(819,853) | $(6,441,523) | | Cash and cash equivalents at end of period | $4,566,936 | $622,825 | - Net cash used in operating activities increased significantly to **$(8,263,348)** for the six months ended June 30, 2025, compared to **$(2,548,366)** in the prior year, primarily due to a large decrease in accrued expenses, related party[16](index=16&type=chunk) - Net cash used in investing activities increased to **$(8,166,988)** in 2025, mainly due to **$8,166,988** in prepaid joint venture agreements[16](index=16&type=chunk) - Net cash provided by financing activities was **$15,610,483** in 2025, a substantial increase from cash used in financing activities of **$(547,415)** in 2024, driven by common stock issuances from warrant exercises and ATM offerings[16](index=16&type=chunk) [Unaudited Condensed Consolidated Notes to Financial Statements](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Notes%20to%20Financial%20Statements) This section provides detailed explanations and additional information supporting the unaudited condensed consolidated financial statements [1. Nature of Operations](index=9&type=section&id=1.%20Nature%20of%20Operations) This section describes LQR House Inc.'s primary business activities and recent corporate actions - LQR House Inc. operates primarily in the beverage alcohol industry, owning specialty brands and providing marketing and distribution services[17](index=17&type=chunk) - The company acquired the domain name www.cwspirits.com (CWS Platform) on November 1, 2023, for **$10,000** from SSquared Spirits LLC, a related party[18](index=18&type=chunk)[19](index=19&type=chunk) - A **1-for-35 reverse stock split** became effective on April 21, 2025, reducing authorized shares to **10,000,000**, which was later increased to **350,000,000** on June 2, 2025[20](index=20&type=chunk)[21](index=21&type=chunk) [2. Going Concern](index=9&type=section&id=2.%20Going%20Concern) This section addresses the company's ability to continue operations and management's plans to mitigate financial risks - The company has sustained net losses of **$4,592,032** and **$4,636,685** for the six months ended June 30, 2025 and 2024, respectively, and expects continued operating losses[22](index=22&type=chunk) - Management believes that the substantial doubt about the company's ability to continue as a going concern has been alleviated due to cash and cash equivalents of **$4,566,936** as of June 30, 2025, and net proceeds of approximately **$26,000,000** from an ATM offering in July 2025[25](index=25&type=chunk)[27](index=27&type=chunk) - The company intends to fund operations through the July 2025 ATM offering and may pursue additional capital through public or private equity offerings, debt financing, or other strategic funding sources[26](index=26&type=chunk) [3. Summary of Significant Accounting Policies](index=11&type=section&id=3.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the key accounting principles and methods used in preparing the financial statements [Basis of Presentation](index=11&type=section&id=Basis%20of%20Presentation) This section describes the framework and principles used for preparing the financial statements - Financial statements conform to U.S. GAAP, with a fiscal year end of December 31[29](index=29&type=chunk) - As an emerging growth company, LQR House Inc. has elected reduced public company reporting requirements but may adopt accounting standards based on public entity effective dates when early adoption is permitted[30](index=30&type=chunk) [Principles of Consolidation](index=11&type=section&id=Principles%20of%20Consolidation) This section explains which entities are included in the consolidated financial statements - Consolidated financial statements include the accounts of LQR House Inc. and its wholly-owned subsidiary, LQR House Acquisition Corp., with all inter-company transactions eliminated[31](index=31&type=chunk) [Unaudited Interim Financial Information](index=11&type=section&id=Unaudited%20Interim%20Financial%20Information) This section clarifies the nature and limitations of the interim financial statements - Interim financial statements are prepared in accordance with U.S. GAAP for interim information and SEC rules, with certain disclosures condensed or omitted[32](index=32&type=chunk) - Unaudited interim results are not necessarily indicative of full fiscal year results[32](index=32&type=chunk) [Use of Estimates](index=11&type=section&id=Use%20of%20Estimates) This section highlights the role of management's judgments and assumptions in financial reporting - Preparation of financial statements requires management to make estimates and assumptions, particularly for cost method investments and stock-based compensation[34](index=34&type=chunk) - Estimates are based on historical experience and market factors, with actual results potentially differing[34](index=34&type=chunk) [Concentrations of Credit Risk](index=11&type=section&id=Concentrations%20of%20Credit%20Risk) This section addresses potential risks arising from concentrations in financial instruments - Cash is maintained with a major U.S. financial institution, with balances sometimes exceeding federally insured limits (**$250,000**)[35](index=35&type=chunk) [Concentrations](index=11&type=section&id=Concentrations) This section identifies significant dependencies that could impact the company's operations - The company's revenue generation is highly reliant on its relationship with KBROS, LLC, which handles product for the CWS Platform and fulfills products for marketing service clients[36](index=36&type=chunk) - Discontinuance of the KBROS relationship or CWS Platform agreements would have a material negative impact on operations[36](index=36&type=chunk) [Cash and Cash Equivalents](index=13&type=section&id=Cash%20and%20Cash%20Equivalents) This section defines what constitutes cash and cash equivalents for financial reporting purposes - Highly liquid investments with maturities of **three months or less** at purchase date are considered cash equivalents[39](index=39&type=chunk) [Investment at Cost](index=13&type=section&id=Investment%20at%20cost) This section describes the accounting treatment for investments where the company lacks significant influence - Investments where the company lacks significant influence are accounted for at cost and reviewed annually for impairment[40](index=40&type=chunk) - The investment in DRNK Beverage Corp. is carried at an impaired value of **$300,000** as of June 30, 2025, after a **$4,500,000** impairment recognized in 2024[41](index=41&type=chunk) [Fair Value Measurements](index=13&type=section&id=Fair%20Value%20Measurements) This section explains how fair value is determined and categorized for financial assets and liabilities - Fair value is defined as the exit price in an orderly transaction, classified into Level 1 (quoted active markets), Level 2 (observable inputs), or Level 3 (unobservable inputs)[42](index=42&type=chunk) - No transfers between fair value classifications occurred during the six months ended June 30, 2025[43](index=43&type=chunk) [Accounts Receivable](index=14&type=section&id=Accounts%20Receivable) This section outlines the accounting policy for recognizing and managing accounts receivable - Accounts receivable are stated at net realizable value, with monthly reviews for doubtful accounts and write-offs for uncollectible balances[44](index=44&type=chunk) [Intangible Assets](index=14&type=section&id=Intangible%20Assets) This section describes the accounting treatment for intangible assets, including amortization and impairment - Intangible assets are amortized over their estimated lives or reviewed for impairment if indefinite; domain names are owned indefinitely and renewal costs are expensed[45](index=45&type=chunk) [Impairment of Long-Lived Assets](index=14&type=section&id=Impairment%20of%20Long-Lived%20Assets) This section details the company's policy for assessing and recognizing impairment losses on long-lived assets - The company monitors events for potential impairment of long-lived assets, assessing recoverability through undiscounted expected future cash flows[46](index=46&type=chunk) [Related Parties](index=14&type=section&id=Related%20Parties) This section defines related parties and the disclosure requirements for transactions involving them - Related parties are entities or individuals with the ability to direct or cause the direction of company management and policies, with disclosures for non-compensatory transactions[47](index=47&type=chunk) [Revenue Recognition](index=15&type=section&id=Revenue%20Recognition) This section describes the principles and methods used to recognize revenue from various sources - Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods or services to customers[48](index=48&type=chunk) - Revenue sources include marketing services (recognized over time), sales via the CWS Platform (gross revenue, recognized at delivery), SWOL Tequila product sales (recognized at delivery), and Vault membership subscriptions (gross revenue, with reserve for chargebacks)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [Disaggregation of Revenue](index=17&type=section&id=Disaggregation%20of%20Revenue) This section provides a breakdown of revenue by source for different reporting periods Disaggregation of Revenue | Revenue Source | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |:---|:---|:---|:---|:---|\ | CWS Platform | $304,212 | $512,748 | $634,553 | $948,431 | | SWOL product sales | $178,997 | $5,189 | $200,640 | $6,809 | | **Revenue - product** | **$483,209** | **$517,937** | **$835,193** | **$955,240** | | Marketing | $10,500 | $24,624 | $72,902 | $54,975 | | Vault | $4,819 | $15,356 | $19,773 | $28,796 | | **Revenue - services** | **$15,319** | **$39,980** | **$92,675** | **$83,771** | | **Total revenues** | **$498,528** | **$557,917** | **$927,868** | **$1,039,011** | - Product revenue decreased by **7%** for the three months and **13%** for the six months ended June 30, 2025, primarily due to lower sales volume through the CWS Platform[56](index=56&type=chunk) - SWOL product sales saw a significant increase, from **$5,189** to **$178,997** for the three months and from **$6,809** to **$200,640** for the six months ended June 30, 2025[56](index=56&type=chunk) [Cost of Revenue](index=17&type=section&id=Cost%20of%20Revenue) This section defines the components included in the cost of revenue for the company's operations - Cost of revenue includes direct costs such as product costs, packaging, shipping, importing charges, contracted marketing services, and customer service personnel[57](index=57&type=chunk) [Sales and Marketing](index=17&type=section&id=Sales%20and%20Marketing) This section describes the types of expenses categorized as sales and marketing costs - Sales and marketing costs primarily consist of advertising, promotional expenses, marketing consulting, and sales commissions[58](index=58&type=chunk) - Advertising costs for the three and six months ended June 30, 2025, were **$80,676** and **$487,529**, respectively, a significant decrease from **$764,807** and **$1,551,222** in the same periods of 2024[58](index=58&type=chunk) [Stock-Based Compensation](index=17&type=section&id=Stock-Based%20Compensation) This section outlines the accounting treatment for stock options and other equity-based awards - Stock-based compensation is measured at fair value on the grant date and recognized as expense over the vesting period[59](index=59&type=chunk) [Segment Information](index=18&type=section&id=Segment%20Information) This section explains how the company identifies and reports its operating segments - The company has determined it has only one operating and reportable segment, as the CEO reviews operating results for the company as a whole[62](index=62&type=chunk)[63](index=63&type=chunk) [Net Loss per Share](index=18&type=section&id=Net%20Loss%20per%20Share) This section describes the calculation of basic and diluted net loss per common share - Net loss per share is computed by dividing net loss by the weighted-average common shares outstanding; diluted net loss per share is the same as basic due to anti-dilutive securities[65](index=65&type=chunk) [Recently Issued and Adopted Accounting Pronouncements](index=18&type=section&id=Recently%20Issued%20and%20Adopted%20Accounting%20Pronouncements) This section discusses the impact of new accounting standards on the company's financial statements - Management does not believe any recently issued, but not yet effective, accounting standards will have a material effect on the financial statements[66](index=66&type=chunk) [4. Acquisition of CWS Platform](index=19&type=section&id=4.%20Acquisition%20of%20CWS%20Platform) This section details the acquisition of the CWS Platform and its operational dependencies - On November 1, 2023, LQR House Acquisition Corp. acquired the domain name www.cwspirits.com (CWS Platform) from SSquared Spirits LLC for **$10,000**[67](index=67&type=chunk) - The acquisition was considered a business combination, and an intangible asset of **$10,000** was recorded for the domain name[69](index=69&type=chunk) - The CWS Platform's operation is dependent on a product handling agreement with KBROS LLC, a related party, which can be terminated under certain circumstances[70](index=70&type=chunk) [5. Investments, at Cost](index=20&type=section&id=5.%20Investments%2C%20at%20Cost) This section describes the company's strategic investments and their valuation - The company holds minority stakes in Cannon Estate Winery Ltd. (**9.99%**) and DRNK Beverage Corp. (**8.58%**) for strategic purposes[73](index=73&type=chunk)[74](index=74&type=chunk)[76](index=76&type=chunk) - The investment in DRNK Beverage Corp. is carried at an impaired value of **$300,000** as of June 30, 2025, following a **$4,500,000** impairment recognized as of December 31, 2024[77](index=77&type=chunk)[78](index=78&type=chunk) [6. Prepaid Joint Venture Agreements](index=20&type=section&id=6.%20Prepaid%20Joint%20Venture%20Agreements) This section details the nature and purpose of the company's prepaid joint venture agreements - As of June 30, 2025, the company recorded **$8,166,988** in prepaid joint venture agreements related to anticipated strategic collaboration with TikTok[79](index=79&type=chunk) - The proposed agreements involve a newly formed subsidiary, YHC Online Ltd., signing Multi-Channel Network (MCN) agency services contracts to develop, manage, and monetize creator-led content on TikTok[79](index=79&type=chunk) - These agreements are expected to be executed and operationalized in subsequent periods, supporting vertically integrated digital marketing operations[81](index=81&type=chunk) [7. Accrued Expenses](index=20&type=section&id=7.%20Accrued%20Expenses) This section provides a breakdown of the company's accrued liabilities Accrued Expenses | Accrued Expense Type | June 30, 2025 | December 31, 2024 | |:---|:---|:---|\ | Accrued retention and settlement payments | $53,729 | $513,729 | | Accrued professional and other fees | $96,770 | $62,450 | | Taxes payable | $213,337 | $263,087 | | Other accrued | $21,566 | $88,445 | | **Total accrued expenses** | **$385,402** | **$927,711** | | Accrued retention and settlement payments, related parties | $678,392 | $5,971,000 | | **Total accrued expenses, related parties** | **$678,392** | **$5,971,000** | - Total accrued expenses, related parties, significantly decreased from **$5,971,000** at December 31, 2024, to **$678,392** at June 30, 2025, due to approximately **$5,292,600** in payments during the six months ended June 30, 2025[83](index=83&type=chunk) [8. Stockholders' Equity (Deficit)](index=22&type=section&id=8.%20Stockholders%27%20Equity%20%28Deficit%29) This section details changes in the company's capital structure and equity components - The number of authorized common shares was increased from **10,000,000** to **350,000,000** on June 2, 2025, following stockholder approval[84](index=84&type=chunk) - A **1-for-35 reverse stock split** became effective on April 21, 2025, with all share and per share amounts retroactively adjusted[85](index=85&type=chunk)[87](index=87&type=chunk) - During the six months ended June 30, 2025, the company issued **2,361,112 shares** for **$11,559,068** net proceeds via an ATM offering and **210,463 shares** for **$4,051,415** gross proceeds from warrant exercises[88](index=88&type=chunk)[92](index=92&type=chunk) Restricted Stock Unit (RSU) Activity (Six Months Ended June 30, 2025) | Metric | Number of shares | Weighted Average Fair Value | |:---|:---|:---|\ | Unvested as of December 31, 2024 | 5,996 | $381.50 | | Granted | - | - | | Vested | (1,613) | $823 | | Forfeited | (9) | $7,000 | | Unvested as of June 30, 2025 | 4,374 | $198 | [9. Related Party Transactions](index=24&type=section&id=9.%20Related%20Party%20Transactions) This section describes significant transactions and relationships with related parties - The company has significant related party transactions with KBROS, LLC, which acts as the Product Handler for the CWS Platform, and SSquared Spirits LLC, the seller of the CWS Platform[98](index=98&type=chunk) - KBROS receives **$40,000 per month** plus shipping/handling reimbursements and bonuses; handling fees for the six months ended June 30, 2025, were **$40,000**, down from **$240,000** in 2024[98](index=98&type=chunk) - Accrued expenses, related parties, included **$678,392** as of June 30, 2025, and **$3,600,000** as of December 31, 2024, related to a **$4,100,000** settlement agreement with KBROS[100](index=100&type=chunk) - The company had **$300,231** in accounts receivable, related party, with Country Wine & Spirits, Inc. (CWS) as of June 30, 2025[103](index=103&type=chunk) [10. Commitments and Contingencies](index=25&type=section&id=10.%20Commitments%20and%20Contingencies) This section outlines the company's significant future obligations and potential legal liabilities - The company committed to provide annual funding of at least **$2,500,000** to KBROS, the Product Handler, to purchase inventory[107](index=107&type=chunk) - LQR House Inc. and several officers/directors were named as defendants in a lawsuit by Kingbird Ventures, LLC, alleging breach of fiduciary duties and seeking damages and injunctive relief; the company intends to vigorously defend the litigation[109](index=109&type=chunk) [11. Subsequent Events](index=25&type=section&id=11.%20Subsequent%20Events) This section reports significant events that occurred after the reporting period but before the financial statements were issued - In July 2025, the company issued **7,329,889 shares** of common stock through an at-the-market (ATM) offering, receiving net proceeds of approximately **$26 million** for working capital and strategic initiatives[111](index=111&type=chunk) - On August 6, 2025, Yilin Lu was appointed President, and Hong Chun Yeung replaced him on the Compensation and Nominating Committees[112](index=112&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on LQR House Inc.'s financial condition and operational results for the periods ended June 30, 2025, and 2024. It covers the company's business overview, recent developments, core services and brands, factors affecting financial performance, growth strategies, detailed results of operations, liquidity, capital resources, and critical accounting policies. The discussion highlights the company's focus on digital marketing and brand development in the alcoholic beverage space, recent equity raises, and efforts to improve gross margins despite overall revenue declines [Business Overview](index=26&type=section&id=Business%20Overview) This section provides an overview of LQR House Inc.'s business model, strategic focus, and key operations - LQR House Inc. aims to be a full-service digital marketing and brand development entity in the alcoholic beverage space, integrating supply, sales, and marketing[114](index=114&type=chunk) - Primary business includes developing premium limited batch spirit brands (e.g., SWOL Tequila) and marketing internal and external brands via the CWS Platform[114](index=114&type=chunk) - The company holds minority stakes in Cannon Estate Winery Ltd. and DRNK Beverage Corp. (now Chase Mocktails Ltd.) since May and June 2024, respectively[115](index=115&type=chunk) [Recent Developments](index=26&type=section&id=Recent%20Developments) This section highlights significant events and changes that have occurred recently within the company - The company raised **$6,380,248** in net proceeds from an ATM offering during Q2 2025 and an additional **$26 million** in gross proceeds in July 2025[117](index=117&type=chunk)[118](index=118&type=chunk) - A **1-for-35 reverse stock split** was effected on April 21, 2025, reducing authorized common stock to **10,000,000 shares**, which was subsequently increased to **350,000,000 shares** on June 2, 2025[121](index=121&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - David Lazar resigned as President and Board member on April 2, 2025. Yilin Lu was appointed President on August 6, 2025[120](index=120&type=chunk)[127](index=127&type=chunk) - The company was named as a defendant in a lawsuit by Kingbird Ventures, LLC, on July 11, 2025, alleging breach of fiduciary duties and seeking damages and injunctive relief[126](index=126&type=chunk) [The Services and Brands We Market](index=27&type=section&id=The%20Services%20and%20Brands%20We%20Market) This section describes the company's core product and service offerings in the alcoholic beverage market - LQR House is an online retailer of alcohol products, with the CWS Platform serving as a key e-commerce channel for wine and spirits, including exclusive brand SWOL Tequila[128](index=128&type=chunk)[129](index=129&type=chunk) - Key offerings include SWOL Tequila (limited-edition, produced in Mexico), Vault (exclusive CWS Platform membership with benefits), Soleil Vino (planned premium wine subscription service), and LQR House Marketing (marketing services for wholly-owned and third-party brands)[131](index=131&type=chunk) [Principal Factors Affecting Our Financial Performance](index=28&type=section&id=Principal%20Factors%20Affecting%20Our%20Financial%20Performance) This section identifies the primary internal and external factors influencing the company's financial results - Financial performance is primarily affected by the ability to acquire/retain customers, offer competitive pricing, broaden product/service offerings, industry demand/competition, leverage technology, attract/maintain influencers, attract/retain talent, market conditions, and make profitable investments[130](index=130&type=chunk) [Our Growth Strategies](index=28&type=section&id=Our%20Growth%20Strategies) This section outlines the company's plans and initiatives for achieving future business expansion - Growth strategies include collaborative marketing with celebrities and influencers, expanding the existing SWOL brand by purchasing and selling larger amounts of SWOL products, and pursuing opportunistic acquisitions of alcohol brands with distribution licenses and storage[131](index=131&type=chunk)[132](index=132&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance over the reported periods [Comparison of Three Months Ended June 30, 2025 and June 30, 2024](index=30&type=section&id=Comparison%20of%20Three%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) This section compares the company's financial performance for the three-month periods ended June 30, 2025 and 2024 Key Components of Results of Operations (Three Months Ended June 30) | Metric | 2025 | 2024 | Var. $ | Var. % | |:---|:---|:---|:---|:---|\ | Revenue - services | $15,319 | $39,980 | $(24,661) | -62% | | Revenue - product | $483,209 | $517,937 | $(34,728) | -7% | | Total revenues | $498,528 | $557,917 | $(59,389) | -11% | | Total cost of revenue | $414,022 | $710,107 | $(296,085) | -42% | | Gross profit (loss) | $84,506 | $(152,190) | $236,696 | -156% | | General and administrative | $2,207,612 | $1,357,395 | $850,217 | 63% | | Sales and marketing | $80,676 | $764,807 | $(684,131) | -89% | | Loss from operations | $(2,203,782) | $(2,274,392) | $70,610 | -3% | | Net loss | $(2,202,382) | $(2,209,293) | $6,911 | 0% | - Total revenues decreased by **11%** to **$498,528**, driven by a **62%** decrease in service revenues and a **7%** decrease in product revenues, primarily due to lower marketing services volume and reduced CWS Platform sales[135](index=135&type=chunk)[136](index=136&type=chunk) - Gross profit significantly improved to **$84,506** from a gross loss of **$(152,190)** in the prior year, attributed to a strategic shift towards the CWS Platform and lower cost of revenue[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) - Sales and marketing expenses decreased by **89%** to **$80,676**, mainly due to the absence of significant website development costs incurred in the prior year[141](index=141&type=chunk) [Comparison of Six Months Ended June 30, 2025 and June 30, 2024](index=31&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030%2C%202025%20and%20June%2030%2C%202024) This section compares the company's financial performance for the six-month periods ended June 30, 2025 and 2024 Key Components of Results of Operations (Six Months Ended June 30) | Metric | 2025 | 2024 | Var. $ | Var. % | |:---|:---|:---|:---|:---|\ | Revenue - services | $92,675 | $83,771 | $8,904 | 11% | | Revenue - product | $835,193 | $955,240 | $(120,047) | -13% | | Total revenues | $927,868 | $1,039,011 | $(111,143) | -11% | | Total cost of revenue | $813,204 | $1,270,698 | $(457,494) | -36% | | Gross profit (loss) | $114,664 | $(231,687) | $346,351 | -149% | | General and administrative | $4,230,773 | $2,963,856 | $1,266,917 | 43% | | Sales and marketing | $487,529 | $1,551,222 | $(1,063,693) | -69% | | Loss from operations | $(4,603,638) | $(4,746,765) | $143,127 | -3% | | Net loss | $(4,592,032) | $(4,636,685) | $44,653 | 0% | - Total revenues decreased by **11%** to **$927,868**, with product revenues declining by **13%** due to lower CWS Platform sales, while service revenues increased by **11%** due to higher membership services[146](index=146&type=chunk)[147](index=147&type=chunk) - Gross profit improved significantly to **$114,664** from a gross loss of **$(231,687)** in the prior year, reflecting the strategic transition and reduced cost of revenue[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk) - General and administrative expenses increased by **43%** to **$4,230,773**, primarily due to higher professional fees and administrative costs[151](index=151&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its short-term and long-term financial obligations Cash and Cash Equivalents | Date | Cash and Cash Equivalents | |:---|:---|\ | June 30, 2025 | $4,566,936 | | December 31, 2024 | $5,386,789 | - The company raised **$15,610,483** in net proceeds during the six months ended June 30, 2025, through ATM offerings (**$11,559,068**) and warrant exercises (**$4,051,415**)[155](index=155&type=chunk) - In July 2025, an additional **$26,000,000** was raised through an ATM offering, which management believes alleviates substantial doubt about the company's going concern ability for the next 12 months[156](index=156&type=chunk)[159](index=159&type=chunk) [Cash Flow Activities](index=34&type=section&id=Cash%20Flow%20Activities) This section analyzes the company's cash generation and usage across operating, investing, and financing activities [Net Cash Used in Operating Activities](index=34&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities) This section details the cash flows generated or used by the company's primary business operations - Net cash used in operating activities for the six months ended June 30, 2025, was **$8,263,348**, primarily due to a net loss of **$4,592,032** and **$5,251,720** cash used in operating assets and liabilities, partially offset by **$1,580,404** in non-cash charges[162](index=162&type=chunk) [Net Cash Used in Investing Activities](index=35&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) This section details the cash flows related to the acquisition and disposal of long-term assets and investments - Net cash used in investing activities was **$8,166,988** for the six months ended June 30, 2025, primarily due to payments for prepaid joint venture agreements[163](index=163&type=chunk) - In 2024, investing activities included **$4,015,742** in marketable securities purchases and **$670,000** from return of deposits in escrow[164](index=164&type=chunk) [Net Cash Provided By (Used in) Financing Activities](index=35&type=section&id=Net%20Cash%20Provided%20By%20%28Used%20in%29%20Financing%20Activities) This section details the cash flows related to debt, equity, and dividend transactions - Net cash provided by financing activities was **$15,610,483** for the six months ended June 30, 2025, driven by **$4,051,415** from warrant exercises and **$11,559,068** from ATM share issuances[165](index=165&type=chunk) - In contrast, the company used **$547,515** in financing activities in 2024 for share repurchases[165](index=165&type=chunk) [Contractual Obligations and Related Party Transactions](index=35&type=section&id=Contractual%20Obligations%20and%20Related%20Party%20Transactions) This section refers to disclosures regarding the company's commitments and dealings with related parties - Refer to Note 9 to the accompanying unaudited condensed consolidated financial statements for further disclosure on related party transactions[166](index=166&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any transactions, agreements, or other contractual arrangements not recorded on the balance sheet - The company has no off-balance sheet arrangements that have or are reasonably likely to have a material effect on its financial condition or results of operations[167](index=167&type=chunk) [Critical Accounting Policies](index=35&type=section&id=Critical%20Accounting%20Policies) This section discusses the accounting policies that require significant judgment and estimates by management - The discussion of financial condition and results of operations is based on GAAP financial statements, which require management estimates and assumptions[168](index=168&type=chunk) - No material changes have occurred in critical accounting policies since the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[169](index=169&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures about Market Risk](index=36&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, LQR House Inc. is not required to provide quantitative and qualitative disclosures about market risk under SEC regulations - LQR House Inc. is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[170](index=170&type=chunk) [ITEM 4. Controls and Procedures](index=36&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that LQR House Inc.'s disclosure controls and procedures were ineffective as of June 30, 2025, primarily due to insufficient resources for adequate supervision and segregation of duties, and a lack of effective board oversight and formal accounting controls. The company intends to address these material weaknesses by increasing qualified financial personnel and improving accounting policies and procedures - As of June 30, 2025, management concluded that the company's disclosure controls and procedures were ineffective at a reasonable assurance level[172](index=172&type=chunk) - Material weaknesses include insufficient resources for adequate supervision and segregation of duties, and a lack of effective board oversight and formal accounting controls[173](index=173&type=chunk) - The company plans to cure these weaknesses by increasing qualified financial personnel and ensuring consistent accounting policies and procedures[174](index=174&type=chunk) - No material changes in internal control over financial reporting occurred during the six months ended June 30, 2025[175](index=175&type=chunk) [PART II. OTHER INFORMATION](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, equity sales, and other disclosures not included in financial statements [ITEM 1. Legal Proceedings](index=37&type=section&id=ITEM%201.%20Legal%20Proceedings) As of the reporting date, there are no legal proceedings to disclose under this item, although the company was named as a defendant in a lawsuit subsequent to the quarter end, as detailed in Note 10 - No legal proceedings are reported under this item[177](index=177&type=chunk) [ITEM 1A. Risk Factors](index=37&type=section&id=ITEM%201A.%20Risk%20Factors) As a smaller reporting company, LQR House Inc. is not required to provide a full discussion of risk factors in this quarterly report. There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - As a smaller reporting company, LQR House Inc. is not required to provide risk factor information[178](index=178&type=chunk) - No material changes to risk factors have occurred since the Annual Report on Form 10-K filed on March 31, 2025[178](index=178&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=37&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the second quarter of 2025, LQR House Inc. issued several unregistered equity securities, including shares to a former president as part of a separation agreement, shares to board members upon RSU conversion, and shares to a third-party consultant for advisory services. These issuances were made under Section 4(a)(2) and/or Rule 506 of Regulation D - On April 2, 2025, **2,857 shares** of common stock were issued to former President David Lazar as part of his separation agreement[180](index=180&type=chunk) - On June 30, 2025, shares were issued to board members (Hong Chun Yeung, Jing Lu, Lijun Chen, Yilin Lu, Sean Dollinger) due to the conversion of restricted stock units[181](index=181&type=chunk)[182](index=182&type=chunk) - On June 30, 2025, **33,000 shares** of common stock were issued to Integris Ventures LLC for advisory services[182](index=182&type=chunk) - These securities were issued pursuant to Section 4(a)(2) and/or Rule 506 of Regulation D, as they did not involve a public offering[183](index=183&type=chunk) [ITEM 3. Defaults upon Senior Securities](index=38&type=section&id=ITEM%203.%20Defaults%20upon%20Senior%20Securities) LQR House Inc. reported no defaults upon senior securities for the period - No defaults upon senior securities were reported[185](index=185&type=chunk) [ITEM 4. Mine Safety Disclosures](index=38&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to LQR House Inc - Mine Safety Disclosures are not applicable to the company[186](index=186&type=chunk) [ITEM 5. Other Information](index=38&type=section&id=ITEM%205.%20Other%20Information) No other information is reported under this item - No other information is reported under this item[187](index=187&type=chunk) [ITEM 6. Exhibits](index=38&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including various corporate documents, agreements, certifications, and XBRL data files. It details amendments to articles of incorporation, employment agreements, stock option plans, and other material contracts - The report includes various exhibits such as corporate governance documents (Articles of Incorporation, Bylaws), material contracts (Product Handling Agreement, Funding Commitment Agreement), and certifications (CEO/CFO Sarbanes-Oxley Act certifications)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Exhibits 32.1 and 32.2 (Sarbanes-Oxley Act certifications) are furnished, not filed, and are not deemed to be 'filed' for purposes of Section 18 of the Exchange Act[192](index=192&type=chunk) [SIGNATURES](index=43&type=section&id=SIGNATURES) This section provides the official signatures of the company's authorized officers for the quarterly report - The report was signed by Sean Dollinger, Chief Executive Officer, and Kumar Abhishek, Chief Financial Officer, on August 12, 2025[196](index=196&type=chunk)

It appears LQR House (YHC) is facing a lawsuit from 'Kingbird Ventures LLC' filed as of July 11The suit alleges that Sean Dollinger and the board of directors have breached fiduciary duties amongst other allegations and seeks injunctive relief preventing them from making any other corporate decision (i.e. issuing more stock shares).LQR House filed a form 8-K with the SEC disclosing the suit today, sharing their intent to fight back.The plot thickens... ...

Revenue Performance - For the three months ended March 31, 2025, total revenues decreased by 11% to $429,340 compared to $481,094 in the same period of 2024[123] - Service revenues increased by 77% to $77,356, driven by a higher volume of marketing services provided[125] - Product revenues decreased by 20% to $351,984, primarily due to lower sales volume on the CWS Platform[126] Profitability and Loss - Gross profit for the three months ended March 31, 2025, was $30,158, a significant improvement from a gross loss of $79,497 in the same period of 2024[129] - Net loss for the three months ended March 31, 2025, was $2,389,650, a slight improvement from a net loss of $2,427,392 in the same period of 2024[132] - The net loss for the three months ended March 31, 2025, was $2,389,650, partially offset by non-cash charges of $868,189 and changes in operating assets and liabilities of $5,097,912[139] Cash Flow and Liquidity - As of March 31, 2025, cash and cash equivalents were $7,889,597, an increase from $5,386,789 as of December 31, 2024[133] - The Company reported a net cash used in operating activities of $6,619,373 for the three months ended March 31, 2025, compared to $1,374,040 for the same period in 2024[138] - The Company had net cash provided by financing activities of $9,122,181 for the three months ended March 31, 2025, compared to a net cash used of $547,515 in 2024[141] - The Company reported a net change in cash and cash equivalents of $2,502,808 for the three months ended March 31, 2025, compared to a decrease of $5,282,441 in 2024[138] Expenses - General and administrative expenses increased by 26% to $2,023,161, largely due to higher professional fees and personnel-related costs[130] - Sales and marketing expenses decreased by 48% to $406,853, attributed to the absence of website development costs incurred in the prior year[131] Funding and Financial Commitments - The company raised a total of $9,230,236 in net proceeds through the issuance of common stock during the three months ended March 31, 2025[134] - The Company entered into a Funding Commitment Agreement on November 1, 2023, committing to provide a minimum annual funding of $2,500,000 to the Product Handler for inventory purchases[142] Going Concern and Operational Challenges - The company has not generated profits since inception and has negative cash flows from operations of $6,619,374 for the three months ended March 31, 2025, raising doubts about its ability to continue as a going concern[135] - The Company has not been able to generate sufficient cash flows from operations to meet its obligations, raising concerns about its ability to continue as a going concern[137] - The Company is exploring various strategies, including customer acquisition and new partnerships, to increase volume and improve gross margins[136] Investments and Accounting Policies - The Company invested $4,030,986 in mutual fund investments in 2024 and received $670,000 back from an investment it was no longer pursuing[140] - There have been no material changes in the Company's critical accounting policies from those disclosed in the Annual Report for the fiscal year ended December 31, 2024[146] - There were no off-balance sheet arrangements that could affect the Company's financial condition[144]

Market Trends - The alcoholic beverages market is projected to grow by approximately 37% by 2028, reaching over $2.1 trillion from $1.53 trillion in 2022[46] - E-commerce is becoming a significant driver for at-home alcohol consumption, with total global online retail sales expected to reach $8.148 trillion by 2026, representing a 9.26% CAGR[47] - The demand for ready-to-drink (RTD) beverages is increasing, with canned cocktails growing by 35.8% in revenue from 2021 to 2022, while spirits account for only 13% of the RTD market[50] - Tequila has overtaken whiskey to become the second-most consumed spirit by value in the U.S., with 54% of bars reporting tequila outperforming other liquors[51] - 54% of U.S. consumers aged 18-34 are likely to choose premium drinks, indicating a trend towards premiumization in the alcohol market[51] Product Offerings - The SWOL Añejo Tequila is priced at $89.99, while SWOL Peach and Cristalino Tequilas are both priced at $79.99[56][60] - Soleil Vino, a wine subscription service, will offer three membership options with prices ranging from $45.00 to $145.00 per month for different wine selections[59] - The company focuses on developing products that align with current market trends, such as SWOL Peach Tequila[67] Marketing Strategy - The Vault membership program offers a 10% discount on all products, free shipping on orders over $100, and costs $19.95 per month[57] - LQR House has established relationships with 460 influencers, providing a significant competitive advantage in marketing alcoholic beverages[62] - Monthly marketing program costs range from $3,000 to $10,000, depending on client-selected options[61] - The company has seen an increase in clients utilizing marketing services, growing from 4-5 clients monthly to 5-8 clients[71] - The marketing strategy includes leveraging a cumulative following of at least 1.5 million followers across various influencer tiers[64] - LQR House plans to expand its brand presence by purchasing larger amounts of SWOL products and launching a Wine Club[69] Business Development - The company plans to align its marketing and distribution efforts with market trends, focusing on online sales and introducing new premium products[52] - The company intends to pursue acquisitions of unique alcohol brands and channel partners to enhance its market position[70] - LQR House aims to enhance its technology and distribution capabilities through strategic acquisitions[75] Regulatory Compliance - The company is subject to various laws and regulations, including the Credit Card Accountability Responsibility and Disclosure Act of 2009, which impacts credit card and gift certificate use fairness[82] - The California Consumer Privacy Act (CCPA) went into effect on January 1, 2020, granting consumers rights regarding their personal data, including access and deletion rights[84] - Effective January 1, 2023, the company became subject to the California Privacy Rights Act, expanding consumer data use restrictions and penalties[84] - The company is also subject to the Virginia Consumer Data Protection Act, effective January 1, 2023, which is a comprehensive data privacy law[84] - The Colorado Privacy Act and Connecticut's An Act Concerning Personal Data Privacy and Online Monitoring became effective on July 1, 2023, imposing additional consumer privacy obligations[84] - The Utah Consumer Privacy Act will take effect on December 31, 2023, further regulating the handling of consumers' personal data[84] Seasonal Trends - Seasonal trends impact sales, with traditionally lower sales observed in post-holiday and winter months[79] Intellectual Property - The company emphasizes the importance of intellectual property, having acquired trademarks for SWOL and Soleil Vino[73] Reporting Requirements - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[279]

Financial Performance - Total revenues for Q1 2024 were $481,094, a 220% increase from $150,563 in Q1 2023[83] - Product revenues in Q1 2024 were $437,303, compared to $0 in Q1 2023, attributed to the CWS Platform acquisition[85] - Service revenues decreased by $106,772 to $43,791 in Q1 2024, reflecting a strategic shift towards the CWS Platform[84] - Gross profit for Q1 2024 was a loss of $79,497, compared to a profit of $47,566 in Q1 2023, marking a 267% decline[83] - Net loss for Q1 2024 was $2,427,392, compared to a loss of $322,074 in Q1 2023, representing a 654% increase in losses[90] Expenses - General and administrative expenses surged to $1,606,461 in Q1 2024, a 400% increase from $321,317 in Q1 2023[88] - Sales and marketing expenses rose dramatically to $786,415 in Q1 2024, a 1527% increase from $48,323 in Q1 2023[89] Cash Flow - Cash and cash equivalents decreased to $1,781,907 as of March 31, 2024, down from $7,064,348 at the end of 2023[91] - Net cash used in operating activities was $1,374,040 in Q1 2024, significantly higher than $233,433 in Q1 2023[94] Capital and Financing - The company plans to raise additional capital through debt and/or equity financings to support operations and growth strategies[93] Accounting Policies - There have been no material changes in the company's critical accounting policies from those disclosed in the 2023 Annual Report on Form 10-K[103] - The financial statements are prepared in accordance with GAAP, requiring estimates and assumptions that affect reported amounts of assets and liabilities[102] - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[104]

Market Overview - The United States alcoholic beverage market is projected to reach approximately $283.8 billion in 2023, with spirits and wine accounting for about 50.6% of total consumption[37]. - E-commerce is increasingly driving demand for at-home alcohol consumption, with a significant trend towards online purchases continuing post-pandemic[38]. - A survey indicated that 54% of U.S. consumers are willing to try new alcoholic brands, highlighting a growing demand for quality and novel products[39]. - The transactional market for alcohol products has seen over $45 billion in transactions across 97 deals from 2016 to 2020, indicating robust market activity[40]. Product Offerings - The company plans to launch a wine subscription service, Soleil Vino, with three membership options priced between $45 and $145 per month[49]. - SWOL Añejo Tequila is priced at $89.99, while SWOL Peach and Cristalino Tequilas are both priced at $79.99, reflecting premium product positioning[46][50]. - The Vault membership program offers a 10% discount on all products and free shipping on orders over $50 for a monthly fee of $29.95, aimed at building customer loyalty[47]. Marketing Strategy - The company has established relationships with 382 influencers to promote products, enhancing its marketing reach and effectiveness[52]. - Monthly marketing program costs for clients range from $3,000 to $10,000, providing tailored marketing strategies and promotional materials[51]. - The company aims to capitalize on market trends such as the growing popularity of tequila and premiumization in the alcoholic beverage industry[41]. - The company has developed a targeted marketing strategy aimed at the millennial demographic, utilizing sleek ad campaigns and SEO for premium placement opportunities[57]. - The company has established around 500 influencer relationships, enhancing its marketing reach within the alcohol industry[57]. Growth and Expansion - The company plans to expand its SWOL brand by purchasing larger quantities of products and increasing marketing presence, including launching a Wine Club[59]. - The company intends to pursue acquisitions of unique alcohol brands with potential for growth, focusing on spirits, wine, and specialty mixed drinks[60]. - The company has seen an increase in inbound marketing clients, growing from 4-5 clients monthly to at least 8 clients utilizing marketing services[60]. - The company emphasizes product development on unique flavors not generally available in the market, aligning with modern consumer preferences[57]. - The company has a formal acquisition process to identify and analyze targets for strategic alignment with business objectives[61]. - The company considers intellectual property, including trademarks for SWOL and Soleil Vino, as critical assets for driving growth[62]. Regulatory Environment - The company operates under a commercial lease for an office space of approximately 800 square feet, which is adequate for at least the next 12 months[69]. - The company is subject to extensive regulations governing the alcoholic beverage industry, which could impact operations and financial condition[75]. - The company is subject to various laws and regulations, including the CARD Act, which impacts credit card and gift certificate use, potentially affecting operations if compliance fails[77]. - The California Consumer Privacy Act (CCPA) and other state laws impose significant data protection obligations, expanding consumer rights regarding personal data[79]. - Effective January 1, 2023, the company became subject to the California Privacy Rights Act, enhancing consumer data use restrictions and penalties[79]. - The company will be subject to the Utah Consumer Privacy Act starting December 31, 2023, which regulates the handling of consumer personal data[79]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[259].

Financial Performance - Total revenues for the three months ended September 30, 2023, were $170,511, a 31.6% increase from $129,567 in the same period of 2022 [102]. - For the nine months ended September 30, 2023, total revenues were $512,096, a significant increase from $232,792 in the same period of 2022 [111]. - Service revenues for the nine months ended September 30, 2023, increased by $162,420 to $395,212, driven by growth in the marketing customer base [113]. - Net loss for Q3 2023 was $5,541,228, compared to a net loss of $451,224 in Q3 2022 [110]. Revenue Breakdown - Service revenues decreased by $28,153 to $101,414 in Q3 2023, attributed to the company's focus on the IPO in August 2023 [104]. - Product revenues for Q3 2023 were $69,097, compared to $0 in Q3 2022, due to the delivery of a SWOL tequila batch [105]. Cash Flow and Financing - Net cash used in operating activities for the nine months ended September 30, 2023, was $4,568,848, primarily due to a net loss of $9,419,793 [125]. - Net cash used in financing activities for the nine months ended September 30, 2023, was $6,287,692, with proceeds from private placement offering of $905,000, notes of $950,000, and net proceeds from the IPO of $4,494,156 [128]. - The company raised $4.5 million from the IPO and an additional $15.0 million from public offerings in October and November 2023 [123]. - As of September 30, 2023, cash and cash equivalents were $1,863,835, a significant increase from $7,565 at the end of 2022 [121]. Expenses - General and administrative expenses surged to $4,803,821 in Q3 2023, up from $351,738 in Q3 2022, largely due to non-cash stock-based compensation [107]. Cash Flow Comparison - Net cash used in operating activities for the nine months ended September 30, 2022, was $1,035,463, primarily due to a net loss of $1,699,484 [126]. - Net cash provided by investing activities for the nine months ended September 30, 2023, was $137,426, compared to a net cash used of $74,086 in 2022 [127]. Accounting Policies - Revenue is recognized when performance obligations are satisfied, reflecting the consideration expected to be received [132]. - Service revenue is recognized over time as marketing services are provided, while product revenue is recognized upon delivery to customers [133]. - Stock-based compensation is measured based on fair value at the grant date and recognized over the requisite service period [135]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [137]. Other Financial Information - The company had no significant cash requirements for capital expenditures or other cash needs under any contractual obligations during the nine months ended September 30, 2023 [129]. - There are no off-balance sheet arrangements that are likely to affect the company's financial condition or results of operations [130].

As filed with the Securities and Exchange Commission on November 7, 2023 Registration No. 333-[*] UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 LQR House Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Nevada 2080 86-1604197 (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification Number) 6800 Indian Creek Dr. Su ...

As filed with the Securities and Exchange Commission on October 6, 2023 Registration No. 333-[*] UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ____________________________ FORM S-1 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ____________________________ LQR House Inc. (Exact name of registrant as specified in its charter) ____________________________ | Nevada | 2080 | 86-1604197 | | --- | --- | --- | | (State or other jurisdiction of | (Primary Standard Industrial | (I. ...