Fresh Vine Wine(VINE) - 2023 Q3 - Quarterly Report

Financial Performance - For the three months ended September 30, 2023, net revenue was $847,959, an increase from $535,584 in the same period of 2022, representing a growth of 58.2%[111] - Gross profit for the three months ended September 30, 2023, was a loss of $41,885, compared to a loss of $65,962 in the same period of 2022, indicating an improvement of 36.5%[111] - The net loss for the three months ended September 30, 2023, was $2,129,660, a decrease from a net loss of $2,560,040 in the same period of 2022, reflecting a reduction of 16.8%[111] - Net revenue for the three months ended September 30, 2023, was $847,959, an increase of 58.3% compared to $535,584 in the same period of 2022, while net revenue for the nine months decreased by 36.1% to $1,586,714 from $2,484,086[131] Revenue Channels - The wholesale channel accounted for 87.8% of total net revenue for the three months ended September 30, 2023, compared to 61.8% in the same period of 2022, indicating a significant shift towards wholesale sales[123] - Direct-to-consumer (DTC) sales represented 12.2% of total net revenue for the three months ended September 30, 2023, down from 38.2% in the same period of 2022, highlighting a decline in DTC channel performance[123] Expenses and Cost Management - Selling, general, and administrative expenses for the three months ended September 30, 2023, were $1,141,390, a decrease from $2,400,182 in the same period of 2022, representing a reduction of 52.4%[130] - Cost of revenues increased by 47.9% to $889,844 for the three months ended September 30, 2023, and by 77.2% to $3,631,491 for the nine months compared to the same periods in 2022, including a $1.7 million inventory write-down[131] - Selling, general and administrative expenses decreased by 52% to $1,141,390 for the three months ended September 30, 2023, and by 48% to $2,544,711 for the nine months compared to the same periods in 2022[132] Inventory and Write-downs - The company recorded a $1.7 million inventory write-down during the three months ended June 30, 2023, reflecting the net realizable value of its inventory[124] Cash Flow and Financial Position - Cash used in operating activities decreased to $(4,585,403) for the nine months ended September 30, 2023, from $(12,261,556) in the same period of 2022[133] - The company had an accumulated deficit of approximately $24.4 million and total stockholders' equity of approximately $1.1 million as of September 30, 2023[136] - Current assets amounted to approximately $2.6 million, with current liabilities of $1.5 million, resulting in a working capital surplus of approximately $1.1 million[137] Future Outlook and Strategic Initiatives - The company plans to continue investing in its DTC channel and performance marketing to drive customer engagement and satisfaction[121] - The company expects to obtain sales proceeds totaling approximately $800,000 from sales to Grocery Outlet, with $352,000 received during the quarter ended September 30, 2023[140] - The company entered into a Securities Purchase Agreement for the issuance of Series A Convertible Preferred Stock, with total gross proceeds of up to $1.0 million expected[142] - The company is exploring strategic opportunities for mergers or acquisitions to enhance stockholder value, engaging an investment banker for this process[144] - The company projects that existing cash will be sufficient to fund operations into the first quarter of 2024, after which additional financing will be needed[145]