Fresh Vine Wine(VINE) - 2023 Q2 - Quarterly Report

Financial Performance - For the three months ended June 30, 2023, net revenue was $330,125, a decrease from $1,019,377 in the same period of 2022[108] - Gross loss for the three months ended June 30, 2023, was $(1,999,530), compared to a gross profit of $183,325 for the same period in 2022[129] - The net loss for the six months ended June 30, 2023, was $(6,433,121), down from $(8,445,133) in the same period of 2022[108] - For the three months ended June 30, 2023, net revenue decreased by 67.6% to $330,125 compared to $1,019,377 in the same period of 2022[130] - Cost of revenues increased by 178.6% to $2,329,655 for the three months ended June 30, 2023, which included an inventory write-down of $1.7 million[130] - Selling, general and administrative expenses decreased by 51% to $2,970,380 for the three months ended June 30, 2023, compared to $6,049,066 in the same period of 2022[131] - Cash used in operating activities decreased to $(4,218,620) for the six months ended June 30, 2023, from $(10,448,273) in the same period of 2022[132] - The company raised $2,615,014 in net cash from financing activities during the six months ended June 30, 2023, compared to a net cash outflow of $(387,069) in the same period of 2022[133] - As of June 30, 2023, the company had an accumulated deficit of approximately $22.3 million and total stockholders' equity of approximately $2.4 million[135] - Current assets amounted to approximately $3.3 million, with current liabilities of $1.5 million, resulting in a working capital surplus of approximately $1.8 million[136] - The company projects that existing cash balance will be sufficient to fund operations into the fourth quarter of 2023, after which additional financing will be needed[144] Sales and Distribution - Direct-to-consumer (DTC) sales accounted for 51.8% of net revenue for the three months ended June 30, 2023, compared to 21.1% in the same period of 2022[122] - The company expanded its wholesale distribution relationships to 50 states, up from 48 states as of December 31, 2022[103] - The company plans to continue broadening its distributor network and increasing each distributor's average order size to accelerate growth[113] - The company expects to obtain sales proceeds totaling approximately $800,000 from the sale of up to 45,000 cases of wine to Grocery Outlet over the next three months[140] Inventory and Product Development - The company recorded a $1.7 million inventory write-down to reflect it at its net realizable value during the three months ended June 30, 2023[123] - Fresh Vine Wine added two new varietals in 2022, bringing the total to seven, which includes Cabernet Sauvignon, Pinot Noir, Chardonnay, Sauvignon Blanc, Rosé, Sparkling Rosé, and a limited Reserve Napa Cabernet Sauvignon[112] Future Outlook - The company anticipates net revenue to peak during the quarter spanning from October through December due to increased consumer demand around major holidays[114] - The company agreed to issue and sell up to 10,000 shares of Series A Convertible Preferred Stock for total gross proceeds of up to $1.0 million[142]