Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 29, 2022 | Jun. 30, 2021 | |
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-21522 | ||
Entity Registrant Name | WILLAMETTE VALLEY VINEYARDS, INC. | ||
Entity Central Index Key | 0000838875 | ||
Entity Tax Identification Number | 93-0981021 | ||
Entity Incorporation, State or Country Code | OR | ||
Entity Address, Address Line One | 8800 Enchanted Way | ||
Entity Address, Address Line Two | S.E. | ||
Entity Address, City or Town | Turner | ||
Entity Address, State or Province | OR | ||
Entity Address, Postal Zip Code | 97392 | ||
City Area Code | (503) | ||
Local Phone Number | 588-9463 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 62,070,250 | ||
Entity Common Stock, Shares Outstanding | 4,964,529 | ||
Auditor Name | Moss Adams LLP | ||
Auditor Location | Portland, Oregon | ||
Auditor Firm ID | 659 | ||
Common Stock [Member] | |||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | WVVI | ||
Security Exchange Name | NASDAQ | ||
Redeemable Preferred Stock | |||
Title of 12(b) Security | Series A Redeemable Preferred Stock | ||
Trading Symbol | WVVIP | ||
Security Exchange Name | NASDAQ |
BALANCE SHEETS
BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 13,747,285 | $ 13,999,755 |
Accounts receivable, net | 3,163,375 | 2,671,576 |
Inventories | 19,076,750 | 17,687,973 |
Prepaid expenses and other current assets | 299,461 | 182,266 |
Income tax receivable | 138,986 | 484,560 |
Total current assets | 36,425,857 | 35,026,130 |
Other assets | 13,824 | 13,824 |
Vineyard development costs, net | 8,088,968 | 8,020,074 |
Property and equipment, net | 40,596,135 | 31,486,856 |
Operating lease right of use assets | 6,250,326 | 4,943,463 |
TOTAL ASSETS | 91,375,110 | 79,490,347 |
CURRENT LIABILITIES | ||
Accounts payable | 2,102,435 | 1,416,210 |
Accrued expenses | 1,156,823 | 1,335,125 |
Investor deposits for preferred stock | 4,134,422 | 510,636 |
Current portion of note payable | 1,295,541 | 1,384,581 |
Current portion of long-term debt | 472,420 | 450,040 |
Current portion of lease liabilities | 443,484 | 277,686 |
Unearned revenue | 938,257 | 622,077 |
Grapes payable | 1,388,601 | 1,307,165 |
Total current liabilities | 11,931,983 | 7,303,520 |
Long-term debt, net of current portion and debt issuance costs | 4,930,193 | 5,389,457 |
Lease liabilities, net of current portion | 5,954,433 | 4,724,344 |
Deferred income taxes | 3,596,507 | 3,251,099 |
Total liabilities | 26,413,116 | 20,668,420 |
SHAREHOLDERS EQUITY | ||
Redeemable preferred stock, no par value, 10,000,000 shares authorized, 7,523,539 shares issued and outstanding, liquidation preference $31,222,687, at December 31, 2021 and 6,309,508 shares issued and outstanding, liquidation preference $26,184,458, at December 31, 2020. | 30,956,192 | 25,817,305 |
Common stock, no par value, 10,000,000 shares authorized, 4,964,529 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively. | 8,512,489 | 8,512,489 |
Retained earnings | 25,493,313 | 24,492,133 |
Total shareholders equity | 64,961,994 | 58,821,927 |
LIABILITIES AND SHAREHOLDERS EQUITY | $ 91,375,110 | $ 79,490,347 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 7,523,539 | 6,309,508 |
Preferred Stock, Shares Outstanding | 7,523,539 | 6,309,508 |
Preferred Stock, Liquidation Preference, Value | $ 31,222,687 | $ 26,184,458 |
Common Stock, Par or Stated Value Per Share | $ 0 | $ 0 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 4,964,529 | 4,964,529 |
Common Stock, Shares, Outstanding | 4,964,529 | 4,964,529 |
STATEMENTS OF INCOME
STATEMENTS OF INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
SALES, NET | $ 31,786,864 | $ 27,314,852 |
COST OF SALES | 13,121,191 | 10,585,076 |
GROSS PROFIT | 18,665,673 | 16,729,776 |
OPERATING EXPENSES: | ||
Sales and marketing | 9,603,723 | 7,458,139 |
General and administrative | 5,371,931 | 4,269,864 |
Total operating expenses | 14,975,654 | 11,728,003 |
INCOME FROM OPERATIONS | 3,690,019 | 5,001,773 |
OTHER INCOME (EXPENSE) | ||
Interest income | 12,412 | 21,022 |
Interest expense | (391,272) | (414,061) |
Other income, net | 155,183 | 165,916 |
INCOME BEFORE INCOME TAXES | 3,466,342 | 4,774,650 |
INCOME TAX PROVISION | (1,020,879) | (1,379,654) |
NET INCOME | 2,445,463 | 3,394,996 |
Preferred stock dividends | (1,444,283) | (1,116,378) |
INCOME APPLICABLE TO COMMON SHAREHOLDERS | $ 1,001,180 | $ 2,278,618 |
Earnings per common share after preferred dividends, basic and diluted | $ 0.20 | $ 0.46 |
Weighted-average number of common shares outstanding | 4,964,529 | 4,964,529 |
STATEMENTS OF SHAREHOLDERS' EQU
STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) | Redeemable Preferred Stock | Common Stock [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 18,319,102 | $ 8,512,489 | $ 22,213,515 | $ 49,045,106 |
Beginning Balance, Shares at Dec. 31, 2019 | 4,662,768 | 4,964,529 | ||
Issuance of preferred stock, net | $ 7,428,482 | 7,428,482 | ||
Issuance of preferred stock, net, Shares | 1,646,740 | |||
Stock based compensation | $ 69,721 | 69,721 | ||
Preferred stock dividends declared | (1,116,378) | (1,116,378) | ||
Net income | 3,394,996 | 3,394,996 | ||
Ending balance, value at Dec. 31, 2020 | $ 25,817,305 | $ 8,512,489 | 24,492,133 | 58,821,927 |
Ending Balance, Shares at Dec. 31, 2020 | 6,309,508 | 4,964,529 | ||
Issuance of preferred stock, net | $ 5,099,828 | 5,099,828 | ||
Issuance of preferred stock, net, Shares | 1,214,031 | |||
Stock based compensation | $ 39,059 | 39,059 | ||
Preferred stock dividends declared | (1,444,283) | (1,444,283) | ||
Net income | 2,445,463 | 2,445,463 | ||
Ending balance, value at Dec. 31, 2021 | $ 30,956,192 | $ 8,512,489 | $ 25,493,313 | $ 64,961,994 |
Ending Balance, Shares at Dec. 31, 2021 | 7,523,539 | 4,964,529 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 2,445,463 | $ 3,394,996 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 1,952,093 | 1,812,394 |
Gain on disposition of property & equipment | (5,905) | (8,000) |
Preferred stock compensation expense | 39,059 | 69,721 |
Non-cash lease expense | 423,118 | 280,331 |
Loan fee amortization | 13,248 | 13,247 |
Deferred income taxes | 345,408 | 292,493 |
Change in operating assets and liabilities: | ||
Accounts receivable, net | (491,799) | (857,572) |
Inventories | (1,388,777) | (612,893) |
Prepaid expenses and other current assets | (117,195) | 20,715 |
Income tax receivable | 345,574 | 139,008 |
Unearned revenue | (419,878) | (530,387) |
Lease liabilities | (334,094) | (276,752) |
Grapes payable | 81,436 | 514,570 |
Accounts payable | (136,741) | 290,596 |
Accrued expenses | (178,302) | 330,844 |
Net cash from operating activities | 2,572,708 | 4,873,311 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from disposition of property and equipment | 35,510 | |
Additions to vineyard development | (288,973) | (593,157) |
Additions to property and equipment | (10,083,442) | (4,178,821) |
Net cash from investing activities | (10,301,395) | (4,771,978) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from Paycheck Protection Program | 1,655,200 | |
Payments on Paycheck Protection Program | (1,655,200) | |
Proceeds from investor deposits held as liability | 4,134,422 | 510,636 |
Payment on installment note for property purchase | (89,040) | (83,892) |
Payments on long-term debt | (450,132) | (438,289) |
Proceeds from issuance of preferred stock | 4,589,192 | 7,428,482 |
Payment of preferred stock dividend | (708,225) | (568,691) |
Net cash from financing activities | 7,476,217 | 6,848,246 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (252,470) | 6,949,579 |
CASH AND CASH EQUIVALENTS, beginning of year | 13,999,755 | 7,050,176 |
CASH AND CASH EQUIVALENTS, end of year | 13,747,285 | 13,999,755 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Purchases of property and equipment and vineyard development costs included in accounts payable | 1,143,735 | 320,769 |
Reduction in investor deposits for preferred stock | 510,636 | |
Gift cards given in lieu of cash dividends | 736,058 | 547,687 |
Supplemental disclosure of cash flow information: | ||
Interest paid (net of capitalized interest) | 389,163 | 413,319 |
Income tax paid | $ 329,898 | $ 956,672 |
SUMMARY OF OPERATIONS, BASIS OF
SUMMARY OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Organization and operations The Company has direct-to-consumer sales and national sales to distributors. These sales channels offer comparable products to customers and utilize similar processes and share resources for production, selling and distribution. Direct-to-consumer sales generate a higher gross profit margin than national sales to distributors due to differentiated pricing between these segments. Basis of presentation The COVID-19 pandemic has been declared a National Public Health Emergency in the United States, and on March 8, 2020, Oregon Governor Kate Brown declared a state of emergency to address the spread of COVID-19 in Oregon. The outbreak in Oregon and other parts of the United States, as well as the response to COVID-19 by federal, state and local governments could have a continued material adverse impact on economic and market conditions in the United States, which may negatively affect our business and operations. Although the administration of vaccines in Oregon and throughout the United States contributed to the lifting of certain restrictive measures, there remains ongoing uncertainty about the impact of COVID-19 variations on infection levels. The re-emergence of significant increases in infection rates could result in governments re-imposing restrictive measures that could reduce or impair economic activity. Consequently, the COVID-19 pandemic and the government responses to the outbreak presents continued uncertainty and risk with respect to the Company and its performance and financial results. With the exception of key operations personnel, we have shifted our office staff to primarily remote workstations, and we expect we will continue to operate primarily remotely until management determines it is safe for employees to return to offices. Far exceeding the required Oregon Healthy Authority protocols, a new state-of-the-art UV light filtration has been installed in the Companys HVAC system to reduce harmful viruses in the air at its tasting room locations and staff offices. We have not yet experienced significant disruptions to our supply chain network; however, any future restrictions imposed by our local or state governments may have a negative impact on our future direct to consumer sales. In response to the previous closure of, and capacity restrictions in, our tasting rooms, the Company launched curbside pick-ups, and complimentary shipping specials with minimum purchase, which were able to more than offset the expected declines in direct to consumer sales. Additionally, the demand for the Companys wine sold directly or through distributors to restaurants, bars, and other hospitality locations could be reduced in the near-term due to the re-imposition of orders from state and local governments restricting consumers from visiting, as well as in some cases the temporary closure of such establishments. The extent of the impact of the COVID-19 pandemic on the Companys business is highly uncertain and difficult to predict, as the response to the pandemic, and in particular the response to the COVID-19 variants that have emerged, is continuing to evolve. The severity of the impact of the COVID-19 pandemic on the Companys business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Companys customers, all of which are uncertain and cannot be predicted. Financial instruments and concentrations of risk – The Company has the following financial instruments: cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, grapes payable and long-term debt. Cash and cash equivalents are maintained at five financial institutions. Deposits held with these financial institutions may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with a financial institution of reputable credit and therefore bear minimal credit risk. In 2021, sales to one distributor represented approximately 18.1% 24.0% Other comprehensive income Cash and cash equivalents Accounts receivable – 3,163,375 2,671,576 Inventories The cost of finished goods is recognized as cost of sales when the wine product is sold. Inventories are stated at the lower of first-in, first-out (FIFO) cost or net realizable value by variety. In accordance with general practices in the wine industry, wine inventories are generally included in current assets in the accompanying balance sheets, although a portion of such inventories may be aged for more than one year (Note 3). Vineyard development costs 2,070,009 1,824,610 Amortization of vineyard development costs are included in capitalized crop costs that in turn are included in inventory costs and ultimately become a component of cost of goods sold. For the years ending December 31, 2021 and 2020, $ 245,399 243,760 Property and equipment 15 30 3 10 Expenditures for repairs and maintenance are charged to operating expense as incurred. Expenditures for additions and betterments are capitalized. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in operations. Review of long-lived assets for impairment Recoverability of assets is measured by a comparison of the carrying amount of an asset group to future net undiscounted cash flows expected to be generated by the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company groups its long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). This would typically be at the winery level. The Company did not recognize any impairment charges associated with long-lived assets during the years ended December 31, 2021 and 2020. Income taxes – The Company had no unrecognized tax benefits as of December 31, 2021 or 2020. The Company recognizes interest assessed by taxing authorities as a component of tax expense. The Company recognizes any penalties assessed by taxing authorities as a component of tax expense. Interest and penalties for the years ended December 31, 2021 and 2020 were not material. The Company files U.S. federal income tax returns with the Internal Revenue Service (IRS) as well as income tax returns in Oregon and California. The Company is subject to the Oregon Corporate Activity Tax (OR CAT) beginning in 2020. The Company may be subject to examination by the IRS for tax years 2018 through 2021. Additionally, the Company may be subject to examinations by state taxing jurisdictions for tax years 2017 through 2021. The Company is not aware of any current examinations by the IRS or the state taxing authorities. Revenue recognition – The cost of price promotions and rebates are treated as reductions of revenue. Credit sales are recorded as trade accounts receivable and no collateral is required. Revenue from items sold through the Companys retail locations is recognized at the time of sale. Net revenue reported herein is shown net of sales allowances and excise taxes. If the conditions for revenue recognition are not met, the Company defers the revenue until all conditions are met. As of December 31, 2021, and December 31, 2020, the Company has recorded deferred revenue in the amount of $ 229,106 131,782 Distributor Sales Segment – The Company has price incentive programs with its distributors to encourage product placement and depletions. Sales are reported net of incentive program expenses. Incentive program payments are made when completed incentive program payment requests are received from the customers. For the year ended December 31, 2021 and 2020, the Company recorded incentive program expenses of $ 1,437,481 1,757,631 67,326 157,044 Estimates are based on historical and projected experience for each type of program or customer and have historically been in line with actual costs incurred. Direct Sales Segment Tasting room and web site sales are paid for and recognized as revenue at the point of sale. Hospitality sales, that are paid in advance of the event, are accrued as unearned revenue and are subsequently recognized as revenue in the period of the event. Wine club sales are made under an agreement with the customer which specifies the quantity and timing of the wine club shipment. Wine club charges are billed to the customers credit card, at the time of shipment, and revenue is then recognized. The Company periodically sells bulk wine or grapes that either do not meet the Companys quality standards or are in excess of production requirements. These sales are recognized when ownership transfers to the buyer which occurs at the point of shipment. Cost of goods sold Administrative support, purchasing, receiving and most other fixed overhead costs are expensed as selling, general and administrative expenses without regard to inventory units. Warehouse and winery production and facilities costs, are allocated to inventory units on a per gallon basis during the production of wine, prior to bottling the final product. No further costs are allocated to inventory units after bottling. Selling, general and administrative expenses 329,152 247,049 The Company provides an allowance to distributors for providing sample of products to potential customers. For the years ended December 31, 2021 and 2020, these costs, which are included in selling, general and administrative expenses, totaled approximately $ 89,000 87,000 Shipping and handling costs Excise taxes – 384,000 372,000 Income per common share after preferred dividends – Leases ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Significant judgment may be required when determining whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and non-lease components, and the determination of the discount rate included in our leases. We review the underlying objective of each contract, the terms of the contract, and consider our current and future business conditions when making these judgments. Recently adopted accounting pronouncements Accounting Standard Update (ASU) 2019-12, Income Taxes (Topic 740). This standard simplifies the accounting for income taxes by removing certain Codification exceptions and others to be discussed. This was adopted on January 1, 2021 and did not have a significant impact. Recently issued accounting pronouncements not yet adopted There are no recently issued accounting pronouncements that the Company has yet to adopt that management believes will have a significant impact on the Companys financial statements. Reclassifications |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2021 | |
Credit Loss [Abstract] | |
ACCOUNTS RECEIVABLE, NET | NOTE 2 – ACCOUNTS RECEIVABLE, NET The Companys accounts receivable balance is net of an allowance for doubtful accounts of $ 10,000 10,000 Changes in the allowance for doubtful accounts Year ended December 31, 2021 2020 Beginning of year $ 10,000 $ 10,000 Charged to costs and expenses - - Write-offs, net of recoveries - - End of year $ 10,000 $ 10,000 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 – INVENTORIES Inventory consists of the following at December 31, 2021 and 2020: December 31, December 31, 2021 2020 Winemaking and packaging materials $ 742,188 $ 690,114 Work-in-process (costs relating to unprocessed and/or unbottled wine products) 9,691,140 9,066,782 Finished goods (bottled wine and related products) 8,643,422 7,931,077 Total inventories $ 19,076,750 $ 17,687,973 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consists of the following at December 31, 2021 and 2020: Schedule of Property and Equipment, Net December 31, December 31, 2021 2020 Construction in progress $ 14,556,807 $ 6,553,803 Land, improvements and other buildings 12,850,316 11,787,334 Winery buildings and hospitality center 17,791,684 17,694,466 Equipment 15,960,178 14,392,923 Property and equipment, gross 61,158,985 50,428,526 Less accumulated depreciation (20,562,850 ) (18,941,670 ) Property and equipment, net $ 40,596,135 $ 31,486,856 Depreciation expense was $ 1,645,471 1,614,665 |
LINE OF CREDIT FACILITY
LINE OF CREDIT FACILITY | 12 Months Ended |
Dec. 31, 2021 | |
Line Of Credit Facility | |
LINE OF CREDIT FACILITY | NOTE 5 – LINE OF CREDIT FACILITY In December of 2005, the Company entered into a revolving line of credit agreement with Umpqua Bank that allows borrowing up to $ 2,000,000 interest at prime less 0.5%, with a floor of 3.25% no The line of credit agreement includes various covenants, which among other things, requires the Company to maintain minimum amounts of tangible net worth, debt-to-equity, and debt service coverage as defined, and limits the level of acquisitions of property and equipment. As of December 31, 2021, the Company was in compliance with these financial covenants. |
NOTES PAYABLE
NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 6 – NOTES PAYABLE In February of 2017 the Company purchased property, including vineyard land, bare land and structures in the Dundee Hills AVA under terms that included a 15 year note payable with quarterly payments of $42,534 at 6%. The note may be called by the owner, up to the outstanding balance, with 180 days written notice. As of December 31, 2021 and 2020, the Company had a balance of $ 1,295,541 1,384,581 |
LONG-TERM DEBT
LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | NOTE 7 – LONG-TERM DEBT Long-term debt consists of the following at December 31, 2021 and 2020: Schedule of Long-term Debt December 31, 2021 2020 Northwest Farm Credit Services Loan #4 $ 1,109,860 $ 1,240,453 Northwest Farm Credit Services Loan #5 4,425,236 4,743,819 Toyota Credit Corporation - 956 Long-Term Debt, Gross 5,535,096 5,985,228 Debt issuance costs (132,483 ) (145,731 ) Current portion of long-term debt (472,420 ) (450,040 ) Long-Term Debt $ 4,930,193 $ 5,389,457 The Company has two long term debt agreements with Farm Credit Services (FCS) with an aggregate outstanding balance of $5,535,096 and $5,984,272 as of December 31, 2021 and 2020, respectively. The outstanding loans require monthly principal and interest payments of $62,067 for the life of the loans, at annual fixed interest rates of 4.75% and 5.21%, and with maturity dates of 2028 and 2032. The general purposes of these loans were to make capital improvements to the winery and vineyard facilities. The loan agreements contain covenants, which require the Company to maintain certain financial ratios and balances. At December 31, 2021, the Company was in compliance with these covenants. In the event of future noncompliance with the Companys debt covenants, FCS would have the right to declare the Company in default, and at FCS option without notice or demand, the unpaid principal balance of the loan, plus all accrued unpaid interest thereon and all other amounts due shall immediately become due and payable. The Company had an outstanding loan with Toyota Credit Corporation which matured and was paid in full in February 2021, at zero interest, with an outstanding balance of $0 and $956 as of December 31, 2021 and 2020, respectively. Future minimum principal payments of long-term debt mature as follows for the years ending December 31: Schedule of Future Minimum Long-term Debt Payment 2022 $ 472,420 2023 496,970 2024 522,798 2025 549,971 2026 578,559 Thereafter 2,914,378 Future minimum principal payments of long-term debt total $ 5,535,096 The weighted-average interest rates on the aforementioned borrowings for the fiscal years ended December 31, 2021 and 2020 was 5.12% and 5.11% respectively. |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 8 – SHAREHOLDERS EQUITY The Company is authorized to issue 10,000,000 The Company is authorized to issue 10,000,000 0.22 4.15 |
STOCK INCENTIVE PLAN
STOCK INCENTIVE PLAN | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
STOCK INCENTIVE PLAN | NOTE 9 – STOCK INCENTIVE PLAN The Company had a stock incentive plan, originally created in 1992, most recently amended in 2001. No additional grants may be made under the plan. All stock options contained an exercise price that was equal to the fair market value of the Companys stock on the date the options were granted. There were no stock options outstanding or exercisable at December 31, 2021 and 2020. No stock compensation expense under this plan was recognized for the years ended December 31, 2021 and 2020. As of December 31, 2021, there was no unrecognized compensation expense related to stock options. As part of an incentive, the Company issued preferred stock during the years ended December 31, 2021 and 2020, resulting in stock compensation expense of $39,059 and $69,721, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10 – INCOME TAXES The provision for income taxes consists of: Schedule of Income Tax Provision Year Ended December 31, 2021 2020 Current tax expense: Federal $ 459,640 $ 719,342 State 215,831 367,819 Current tax expense 675,471 1,087,161 Deferred tax expense: Federal 263,911 227,246 State 81,497 65,247 Deferred tax expense (benefit) 345,408 292,493 Total $ 1,020,879 $ 1,379,654 The effective income tax rate differs from the federal statutory rate as follows: Schedule of Effective Income Tax Rate Year Ended December 31, 2021 2020 Federal statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 6.49 % 6.79 % Permanent differences 1.26 % 0.26 % Prior year adjustments -1.54 % 0.76 % Changes in tax rates and other 2.24 % 0.09 % Total 29.45 % 28.90 % Permanent differences for the periods consist primarily of changes in non-deductible gifts, meals and entertainment as well as political contributions. Changes in tax rate are described above. Net deferred tax assets and (liabilities) at December 31 consist of: Schedule of Net Deferred Tax Assets and Liabilities Year Ended December 31, 2021 2020 Various Accruals and Deferred Timing Differences $ 36,037 $ 145,195 Prepaid (31,706 ) (29,404 ) Depreciation (3,289,735 ) (2,744,921 ) Inventory (311,103 ) (621,969 ) Net noncurrent deferred tax liability (3,596,507 ) (3,251,099 ) Valuation allowance - - Net deferred tax liability $ (3,596,507 ) $ (3,251,099 ) |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS The Company provides living accommodations in a residence on the Companys premises, at its convenience, for the Companys chief executive officer (CEO). The CEO provides security and lock-up services and is required to live on premises as a condition of his employment. Over the years the Company has recorded annual expenses less than $12,000, exclusive of depreciation, related to the housing provided for its CEO. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 – COMMITMENTS AND CONTINGENCIES Litigation Operating leases – Vineyard In December 1999 1,500,000 20 Peter Michael Vineyard In December 2004 727,000 15 Meadowview Vineyard In February 2007 Elton Vineyard 11 In July 2008 34 Ingram Vineyard In March 2017 25 Bernau Estate Vineyard Operating Leases – Non-Vineyard In September 2018 three In January 2018 In February 2020 5 In March 2021 10 The following tables provide lease cost and other lease information for the year ended December 31, 2021: Schedule of Lease Cost and Other Lease Information Year Ended December 31, 2021 Lease Cost Operating Lease cost - Vineyards $ 459,128 Operating Lease cost - Other 229,769 Short-term lease cost 31,656 Total Lease Cost $ 720,553 Other information Cash paid for amounts included in the measurement of lease liabilities, Operating cash flows from operating leases - Vineyard 445,473 Operating cash flows from operating leases - Other 154,399 Weighted-average remaining lease term - operating leases 13.03 Weighted-average discount rate - operating leases 5.41 % Right-of-use assets obtained in exchange for new operating lease obligations were $1,729,981 and $360,887 for the years ended December 31 2021 and 2020, respectively. The Company has two additional operating leases that have not yet commenced as of December 31, 2021, and as such, have not been recognized in the Companys balance sheet. These operating leases are expected to commence in 2022 with lease terms of 10 years. As of December 31, 2021, maturities of lease liabilities were as follows: Schedule of Maturities of Lease Liabilities Operating Years Ended December 31, Leases 2022 $ 769,014 2023 766,597 2024 772,008 2025 704,016 2026 698,289 Thereafter 5,454,066 Total minimal lease payments 9,163,990 Less present value adjustment (2,766,073 ) Operating lease liabilities 6,397,917 Less current lease liabilities (443,484 ) Lease liabilities, net of current portion $ 5,954,433 Grape Purchases 1,388,601 1,307,165 Domaine Willamette |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | NOTE 13 – EMPLOYEE BENEFIT PLAN In February 2006, the Company instituted a 401(k) profit sharing plan (the Plan) covering all eligible employees. Employees who participate may elect to make salary deferral contributions to the Plan up to 100% of the employees eligible payroll subject to annual Internal Revenue Code maximum limitations. The Company may make a discretionary contribution to the entire qualified employee pool, in accordance with the Plan. For the years ended December 31, 2021 and 2020 there were $ 164,188 138,588 |
SALE OF PREFERRED STOCK
SALE OF PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
SALE OF PREFERRED STOCK | NOTE 14 - SALE OF PREFERRED STOCK On January 24, 2020, the Company filed a shelf Registration Statement on Form S-3 with the United States Securities and Exchange Commission (the SEC) pertaining to the potential future issuance of one or more classes or series of debt, equity or derivative securities. The maximum aggregate offering amount of securities sold pursuant to the January 2020 Form S-3 is not to exceed $20,000,000 . On June 10, 2020, the Company filed with the SEC a Prospectus Supplement to the January 2020 Form S-3, pursuant to which the Company proposed to offer and sell, on a delayed or continuous basis, up to 1,917,525 shares of Series A Redeemable Preferred Stock having proceeds not to exceed $9,300,000. This Prospectus Supplement established that our shares of preferred stock were to be sold in four offering periods with four separate offering prices beginning with an offering price of $ 4.85 5.15 On June 11, 2021, the Company filed with the SEC an additional Prospectus Supplement to the January 2020 Form S-3, pursuant to which the Company proposed to offer and sell, on a delayed or continuous basis, up to 2,118,811 4,134,422 Shareholders have the option to receive dividends as cash or as a gift card for purchasing Company products. The amount of unused dividend gift cards at December 31, 2021 and 2020 was $682,881 and $487,633, respectively and is recorded as unearned revenue on the balance sheet. Dividends accrued but not paid will be added to the liquidation preference of the stock until the dividend is declared and paid. At any time after June 1, 2021, the Company has the option, but not the obligation, to redeem all of the outstanding preferred stock in an amount equal to the original issue price plus accrued but unpaid dividends and a redemption premium equal to 3% of the original issue price. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 15 – SEGMENT REPORTING The Company has identified two operating segments, Direct Sales and Distributor Sales, based upon their different distribution channels, margins and selling strategies. Direct Sales include retail sales in the tasting rooms, wine club sales, internet sales, on-site events, kitchen and catering sales and other sales made directly to the consumer without the use of an intermediary, including sales of bulk wine or grapes. Distributor Sales include all sales through a third party where prices are given at a wholesale rate. The two segments reflect how the Companys operations are evaluated by senior management and the structure of its internal financial reporting. The Company evaluates performance based on the gross profit of the respective business segments. Selling expenses that can be directly attributable to the segment, including depreciation of segment specific assets, are included, however, centralized selling expenses and general and administrative expenses are not allocated between operating segments. Therefore, net income information for the respective segments is not available. Discrete financial information related to segment assets, other than segment specific depreciation associated with selling, is not available and that information continues to be aggregated. The following table outlines the sales, cost of sales, gross margin, directly attributable selling expenses, and contribution margin of the segments for the years ended December 31, 2021 and 2020. Sales figures are net of related excise taxes. Schedule of Segment reporting Twelve Months Ended December 31, Direct Sales Distributor Sales Unallocated Total 2021 2020 2021 2020 2021 2020 2021 2020 Sales, net $ 13,272,659 $ 10,533,070 $ 18,514,205 $ 16,781,782 $ - $ - $ 31,786,864 $ 27,314,852 Cost of sales 3,470,963 2,646,706 9,650,228 7,938,370 - - 13,121,191 10,585,076 Gross margin 9,801,696 7,886,364 8,863,977 8,843,412 - - 18,665,673 16,729,776 Selling expenses 6,929,882 5,170,804 1,914,207 1,677,797 759,634 609,538 9,603,723 7,458,139 Contribution margin $ 2,871,814 $ 2,715,560 $ 6,949,770 $ 7,165,615 Percent of sales 41.8 % 38.6 % 58.2 % 61.4 % General and administration 5,371,931 4,269,864 5,371,931 4,269,864 Income from operations $ 3,690,019 $ 5,001,773 Direct sales include $ 103,471 103,958 Net direct-to-consumer sales, including bulk wine, miscellaneous sales, and grape sales, represented approximately 41.8% 38.6% Net sales through distributors represented approximately 58.2% 61.4% |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 16 – SUBSEQUENT EVENTS Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. The Company recognizes in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing the financial statements. The Companys financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the balance sheet date and before financial statements are issued. The Company has not identified any material subsequent events. |
SUMMARY OF OPERATIONS, BASIS _2
SUMMARY OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Organization and operations | Organization and operations The Company has direct-to-consumer sales and national sales to distributors. These sales channels offer comparable products to customers and utilize similar processes and share resources for production, selling and distribution. Direct-to-consumer sales generate a higher gross profit margin than national sales to distributors due to differentiated pricing between these segments. |
Basis of presentation | Basis of presentation The COVID-19 pandemic has been declared a National Public Health Emergency in the United States, and on March 8, 2020, Oregon Governor Kate Brown declared a state of emergency to address the spread of COVID-19 in Oregon. The outbreak in Oregon and other parts of the United States, as well as the response to COVID-19 by federal, state and local governments could have a continued material adverse impact on economic and market conditions in the United States, which may negatively affect our business and operations. Although the administration of vaccines in Oregon and throughout the United States contributed to the lifting of certain restrictive measures, there remains ongoing uncertainty about the impact of COVID-19 variations on infection levels. The re-emergence of significant increases in infection rates could result in governments re-imposing restrictive measures that could reduce or impair economic activity. Consequently, the COVID-19 pandemic and the government responses to the outbreak presents continued uncertainty and risk with respect to the Company and its performance and financial results. With the exception of key operations personnel, we have shifted our office staff to primarily remote workstations, and we expect we will continue to operate primarily remotely until management determines it is safe for employees to return to offices. Far exceeding the required Oregon Healthy Authority protocols, a new state-of-the-art UV light filtration has been installed in the Companys HVAC system to reduce harmful viruses in the air at its tasting room locations and staff offices. We have not yet experienced significant disruptions to our supply chain network; however, any future restrictions imposed by our local or state governments may have a negative impact on our future direct to consumer sales. In response to the previous closure of, and capacity restrictions in, our tasting rooms, the Company launched curbside pick-ups, and complimentary shipping specials with minimum purchase, which were able to more than offset the expected declines in direct to consumer sales. Additionally, the demand for the Companys wine sold directly or through distributors to restaurants, bars, and other hospitality locations could be reduced in the near-term due to the re-imposition of orders from state and local governments restricting consumers from visiting, as well as in some cases the temporary closure of such establishments. The extent of the impact of the COVID-19 pandemic on the Companys business is highly uncertain and difficult to predict, as the response to the pandemic, and in particular the response to the COVID-19 variants that have emerged, is continuing to evolve. The severity of the impact of the COVID-19 pandemic on the Companys business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic and the extent and severity of the impact on the Companys customers, all of which are uncertain and cannot be predicted. |
Financial instruments and concentrations of risk | Financial instruments and concentrations of risk – The Company has the following financial instruments: cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, grapes payable and long-term debt. Cash and cash equivalents are maintained at five financial institutions. Deposits held with these financial institutions may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with a financial institution of reputable credit and therefore bear minimal credit risk. In 2021, sales to one distributor represented approximately 18.1% 24.0% |
Other comprehensive income | Other comprehensive income |
Cash and cash equivalents | Cash and cash equivalents |
Accounts receivable | Accounts receivable – 3,163,375 2,671,576 |
Inventories | Inventories The cost of finished goods is recognized as cost of sales when the wine product is sold. Inventories are stated at the lower of first-in, first-out (FIFO) cost or net realizable value by variety. In accordance with general practices in the wine industry, wine inventories are generally included in current assets in the accompanying balance sheets, although a portion of such inventories may be aged for more than one year (Note 3). |
Vineyard development costs | Vineyard development costs 2,070,009 1,824,610 Amortization of vineyard development costs are included in capitalized crop costs that in turn are included in inventory costs and ultimately become a component of cost of goods sold. For the years ending December 31, 2021 and 2020, $ 245,399 243,760 |
Property and equipment | Property and equipment 15 30 3 10 Expenditures for repairs and maintenance are charged to operating expense as incurred. Expenditures for additions and betterments are capitalized. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in operations. |
Review of long-lived assets for impairment | Review of long-lived assets for impairment Recoverability of assets is measured by a comparison of the carrying amount of an asset group to future net undiscounted cash flows expected to be generated by the asset group. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company groups its long-lived assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (or asset group). This would typically be at the winery level. The Company did not recognize any impairment charges associated with long-lived assets during the years ended December 31, 2021 and 2020. |
Income taxes | Income taxes – The Company had no unrecognized tax benefits as of December 31, 2021 or 2020. The Company recognizes interest assessed by taxing authorities as a component of tax expense. The Company recognizes any penalties assessed by taxing authorities as a component of tax expense. Interest and penalties for the years ended December 31, 2021 and 2020 were not material. The Company files U.S. federal income tax returns with the Internal Revenue Service (IRS) as well as income tax returns in Oregon and California. The Company is subject to the Oregon Corporate Activity Tax (OR CAT) beginning in 2020. The Company may be subject to examination by the IRS for tax years 2018 through 2021. Additionally, the Company may be subject to examinations by state taxing jurisdictions for tax years 2017 through 2021. The Company is not aware of any current examinations by the IRS or the state taxing authorities. |
Revenue recognition | Revenue recognition – The cost of price promotions and rebates are treated as reductions of revenue. Credit sales are recorded as trade accounts receivable and no collateral is required. Revenue from items sold through the Companys retail locations is recognized at the time of sale. Net revenue reported herein is shown net of sales allowances and excise taxes. If the conditions for revenue recognition are not met, the Company defers the revenue until all conditions are met. As of December 31, 2021, and December 31, 2020, the Company has recorded deferred revenue in the amount of $ 229,106 131,782 Distributor Sales Segment – The Company has price incentive programs with its distributors to encourage product placement and depletions. Sales are reported net of incentive program expenses. Incentive program payments are made when completed incentive program payment requests are received from the customers. For the year ended December 31, 2021 and 2020, the Company recorded incentive program expenses of $ 1,437,481 1,757,631 67,326 157,044 Estimates are based on historical and projected experience for each type of program or customer and have historically been in line with actual costs incurred. Direct Sales Segment Tasting room and web site sales are paid for and recognized as revenue at the point of sale. Hospitality sales, that are paid in advance of the event, are accrued as unearned revenue and are subsequently recognized as revenue in the period of the event. Wine club sales are made under an agreement with the customer which specifies the quantity and timing of the wine club shipment. Wine club charges are billed to the customers credit card, at the time of shipment, and revenue is then recognized. The Company periodically sells bulk wine or grapes that either do not meet the Companys quality standards or are in excess of production requirements. These sales are recognized when ownership transfers to the buyer which occurs at the point of shipment. |
Cost of goods sold | Cost of goods sold Administrative support, purchasing, receiving and most other fixed overhead costs are expensed as selling, general and administrative expenses without regard to inventory units. Warehouse and winery production and facilities costs, are allocated to inventory units on a per gallon basis during the production of wine, prior to bottling the final product. No further costs are allocated to inventory units after bottling. |
Selling, general and administrative expenses | Selling, general and administrative expenses 329,152 247,049 The Company provides an allowance to distributors for providing sample of products to potential customers. For the years ended December 31, 2021 and 2020, these costs, which are included in selling, general and administrative expenses, totaled approximately $ 89,000 87,000 |
Shipping and handling costs | Shipping and handling costs |
Excise taxes | Excise taxes – 384,000 372,000 |
Income per common share after preferred dividends | Income per common share after preferred dividends – |
Leases | Leases ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Significant judgment may be required when determining whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and non-lease components, and the determination of the discount rate included in our leases. We review the underlying objective of each contract, the terms of the contract, and consider our current and future business conditions when making these judgments. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements Accounting Standard Update (ASU) 2019-12, Income Taxes (Topic 740). This standard simplifies the accounting for income taxes by removing certain Codification exceptions and others to be discussed. This was adopted on January 1, 2021 and did not have a significant impact. Recently issued accounting pronouncements not yet adopted There are no recently issued accounting pronouncements that the Company has yet to adopt that management believes will have a significant impact on the Companys financial statements. |
Reclassifications | Reclassifications |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Credit Loss [Abstract] | |
Changes in the allowance for doubtful accounts | Changes in the allowance for doubtful accounts |
ACCOUNTS RECEIVABLE | Year ended December 31, 2021 2020 Beginning of year $ 10,000 $ 10,000 Charged to costs and expenses - - Write-offs, net of recoveries - - End of year $ 10,000 $ 10,000 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventory consists of the following at December 31, 2021 and 2020: |
INVENTORIES | December 31, December 31, 2021 2020 Winemaking and packaging materials $ 742,188 $ 690,114 Work-in-process (costs relating to unprocessed and/or unbottled wine products) 9,691,140 9,066,782 Finished goods (bottled wine and related products) 8,643,422 7,931,077 Total inventories $ 19,076,750 $ 17,687,973 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Schedule of Property and Equipment, Net |
PROPERTY AND EQUIPMENT | December 31, December 31, 2021 2020 Construction in progress $ 14,556,807 $ 6,553,803 Land, improvements and other buildings 12,850,316 11,787,334 Winery buildings and hospitality center 17,791,684 17,694,466 Equipment 15,960,178 14,392,923 Property and equipment, gross 61,158,985 50,428,526 Less accumulated depreciation (20,562,850 ) (18,941,670 ) Property and equipment, net $ 40,596,135 $ 31,486,856 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Long-term debt consists of the following at December 31, 2021 and 2020: Schedule of Long-term Debt |
LONG TERM DEBT | December 31, 2021 2020 Northwest Farm Credit Services Loan #4 $ 1,109,860 $ 1,240,453 Northwest Farm Credit Services Loan #5 4,425,236 4,743,819 Toyota Credit Corporation - 956 Long-Term Debt, Gross 5,535,096 5,985,228 Debt issuance costs (132,483 ) (145,731 ) Current portion of long-term debt (472,420 ) (450,040 ) Long-Term Debt $ 4,930,193 $ 5,389,457 |
Schedule of Future Minimum Long-term Debt Payment | Future minimum principal payments of long-term debt mature as follows for the years ending December 31: Schedule of Future Minimum Long-term Debt Payment |
LONG TERM DEBT (Details 2) | 2022 $ 472,420 2023 496,970 2024 522,798 2025 549,971 2026 578,559 Thereafter 2,914,378 Future minimum principal payments of long-term debt total $ 5,535,096 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income Tax Provision | The provision for income taxes consists of: Schedule of Income Tax Provision |
INCOME TAXES | Year Ended December 31, 2021 2020 Current tax expense: Federal $ 459,640 $ 719,342 State 215,831 367,819 Current tax expense 675,471 1,087,161 Deferred tax expense: Federal 263,911 227,246 State 81,497 65,247 Deferred tax expense (benefit) 345,408 292,493 Total $ 1,020,879 $ 1,379,654 |
Schedule of Effective Income Tax Rate | The effective income tax rate differs from the federal statutory rate as follows: Schedule of Effective Income Tax Rate |
INCOME TAXES (Details 2) | Year Ended December 31, 2021 2020 Federal statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 6.49 % 6.79 % Permanent differences 1.26 % 0.26 % Prior year adjustments -1.54 % 0.76 % Changes in tax rates and other 2.24 % 0.09 % Total 29.45 % 28.90 % |
Schedule of Net Deferred Tax Assets and Liabilities | Net deferred tax assets and (liabilities) at December 31 consist of: Schedule of Net Deferred Tax Assets and Liabilities |
INCOME TAXES (Details 3) | Year Ended December 31, 2021 2020 Various Accruals and Deferred Timing Differences $ 36,037 $ 145,195 Prepaid (31,706 ) (29,404 ) Depreciation (3,289,735 ) (2,744,921 ) Inventory (311,103 ) (621,969 ) Net noncurrent deferred tax liability (3,596,507 ) (3,251,099 ) Valuation allowance - - Net deferred tax liability $ (3,596,507 ) $ (3,251,099 ) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Lease Cost and Other Lease Information | The following tables provide lease cost and other lease information for the year ended December 31, 2021: Schedule of Lease Cost and Other Lease Information |
LEASES | Year Ended December 31, 2021 Lease Cost Operating Lease cost - Vineyards $ 459,128 Operating Lease cost - Other 229,769 Short-term lease cost 31,656 Total Lease Cost $ 720,553 Other information Cash paid for amounts included in the measurement of lease liabilities, Operating cash flows from operating leases - Vineyard 445,473 Operating cash flows from operating leases - Other 154,399 Weighted-average remaining lease term - operating leases 13.03 Weighted-average discount rate - operating leases 5.41 % |
Schedule of Maturities of Lease Liabilities | As of December 31, 2021, maturities of lease liabilities were as follows: Schedule of Maturities of Lease Liabilities |
LEASES (Details 2) | Operating Years Ended December 31, Leases 2022 $ 769,014 2023 766,597 2024 772,008 2025 704,016 2026 698,289 Thereafter 5,454,066 Total minimal lease payments 9,163,990 Less present value adjustment (2,766,073 ) Operating lease liabilities 6,397,917 Less current lease liabilities (443,484 ) Lease liabilities, net of current portion $ 5,954,433 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Segment reporting | The following table outlines the sales, cost of sales, gross margin, directly attributable selling expenses, and contribution margin of the segments for the years ended December 31, 2021 and 2020. Sales figures are net of related excise taxes. Schedule of Segment reporting |
SEGMENT REPORTING | Twelve Months Ended December 31, Direct Sales Distributor Sales Unallocated Total 2021 2020 2021 2020 2021 2020 2021 2020 Sales, net $ 13,272,659 $ 10,533,070 $ 18,514,205 $ 16,781,782 $ - $ - $ 31,786,864 $ 27,314,852 Cost of sales 3,470,963 2,646,706 9,650,228 7,938,370 - - 13,121,191 10,585,076 Gross margin 9,801,696 7,886,364 8,863,977 8,843,412 - - 18,665,673 16,729,776 Selling expenses 6,929,882 5,170,804 1,914,207 1,677,797 759,634 609,538 9,603,723 7,458,139 Contribution margin $ 2,871,814 $ 2,715,560 $ 6,949,770 $ 7,165,615 Percent of sales 41.8 % 38.6 % 58.2 % 61.4 % General and administration 5,371,931 4,269,864 5,371,931 4,269,864 Income from operations $ 3,690,019 $ 5,001,773 |
SUMMARY OF OPERATIONS, BASIS _3
SUMMARY OF OPERATIONS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Product Information [Line Items] | ||
Accounts Receivable, after Allowance for Credit Loss, Current | $ 3,163,375 | $ 2,671,576 |
[custom:AmortizationOfVineyardDevelopmentCost] | 2,070,009 | |
[custom:AmortizationOfVineyardDevelopmentCosts] | 1,824,610 | |
Accumulated Amortization of Other Deferred Costs | 245,399 | 243,760 |
Deferred Revenue | 229,106 | 131,782 |
[custom:IncentiveProgramExpenses] | 1,437,481 | 1,757,631 |
[custom:IncentiveProgramLiabilities-0] | 67,326 | 157,044 |
Advertising Expense | 329,152 | 247,049 |
[custom:AllowanceToDistributors] | 89,000 | 87,000 |
Excise and Sales Taxes | $ 384,000 | $ 372,000 |
Land Improvements [Member] | ||
Product Information [Line Items] | ||
Property, Plant and Equipment, Useful Life | 15 years | |
Building [Member] | ||
Product Information [Line Items] | ||
Property, Plant and Equipment, Useful Life | 30 years | |
Equipment [Member] | Minimum [Member] | ||
Product Information [Line Items] | ||
Property, Plant and Equipment, Useful Life | 3 years | |
Equipment [Member] | Maximum [Member] | ||
Product Information [Line Items] | ||
Property, Plant and Equipment, Useful Life | 10 years | |
One Distributor [Member] | Revenue Benchmark [Member] | ||
Product Information [Line Items] | ||
Concentration Risk, Percentage | 18.10% | 24.00% |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Credit Loss [Abstract] | ||
Beginning of year | $ 10,000 | $ 10,000 |
Charged to costs and expenses | ||
Write-offs, net of recoveries | ||
End of year | $ 10,000 | $ 10,000 |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Credit Loss [Abstract] | |||
Accounts Receivable, Allowance for Credit Loss | $ 10,000 | $ 10,000 | $ 10,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Winemaking and packaging materials | $ 742,188 | $ 690,114 |
Work-in-process (costs relating to unprocessed and/or unbottled wine products) | 9,691,140 | 9,066,782 |
Finished goods (bottled wine and related products) | 8,643,422 | 7,931,077 |
Total inventories | $ 19,076,750 | $ 17,687,973 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Abstract] | ||
Construction in progress | $ 14,556,807 | $ 6,553,803 |
Land, improvements and other buildings | 12,850,316 | 11,787,334 |
Winery buildings and hospitality center | 17,791,684 | 17,694,466 |
Equipment | 15,960,178 | 14,392,923 |
Property and equipment, gross | 61,158,985 | 50,428,526 |
Less accumulated depreciation | (20,562,850) | (18,941,670) |
Property and equipment, net | $ 40,596,135 | $ 31,486,856 |
PROPERTY AND EQUIPMENT (Detai_2
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 1,645,471 | $ 1,614,665 |
LINE OF CREDIT FACILITY (Detail
LINE OF CREDIT FACILITY (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2005 | |
Line Of Credit Facility | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,000,000 | ||
Line of Credit Facility, Interest Rate Description | interest at prime less 0.5%, with a floor of 3.25% | ||
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 | $ 0 |
LONG TERM DEBT (Details)
LONG TERM DEBT (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Extinguishment of Debt [Line Items] | ||
Long-Term Debt, Gross | $ 5,535,096 | $ 5,985,228 |
Debt issuance costs | 132,483 | 145,731 |
Current portion of long-term debt | (472,420) | (450,040) |
Long-Term Debt | 4,930,193 | 5,389,457 |
Northwest Farm Credit Services Loan 4 [Member] | ||
Extinguishment of Debt [Line Items] | ||
Long-Term Debt, Gross | 1,109,860 | 1,240,453 |
Northwest Farm Credit Services Loan 5 [Member] | ||
Extinguishment of Debt [Line Items] | ||
Long-Term Debt, Gross | 4,425,236 | 4,743,819 |
Toyota Credit Corporation [Member] | ||
Extinguishment of Debt [Line Items] | ||
Long-Term Debt, Gross | $ 956 |
LONG TERM DEBT (Details 2)
LONG TERM DEBT (Details 2) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
2022 | $ 472,420 | |
2023 | 496,970 | |
2024 | 522,798 | |
2025 | 549,971 | |
2026 | 578,559 | |
Thereafter | 2,914,378 | |
Future minimum principal payments of long-term debt total | $ 5,535,096 | $ 5,985,228 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Notes Payable, Current | $ 1,295,541 | $ 1,384,581 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Equity [Abstract] | ||
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Dividends Per Share, Declared | $ 0.22 | |
Preferred Stock, Liquidation Preference Per Share | $ 4.15 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Current tax expense: | ||
Federal | $ 459,640 | $ 719,342 |
State | 215,831 | 367,819 |
Current tax expense | 675,471 | 1,087,161 |
Deferred tax expense: | ||
Federal | 263,911 | 227,246 |
State | 81,497 | 65,247 |
Deferred tax expense (benefit) | 345,408 | 292,493 |
Total | $ 1,020,879 | $ 1,379,654 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 2100.00% | 2100.00% |
State taxes, net of federal benefit | 649.00% | 679.00% |
Permanent differences | 126.00% | 26.00% |
Prior year adjustments | (154.00%) | 76.00% |
Changes in tax rates and other | 224.00% | 9.00% |
Total | 2945.00% | 2890.00% |
INCOME TAXES (Details 3)
INCOME TAXES (Details 3) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Abstract] | ||
Various Accruals and Deferred Timing Differences | $ (36,037) | $ (145,195) |
Prepaid | 31,706 | 29,404 |
Depreciation | 3,289,735 | 2,744,921 |
Inventory | 311,103 | 621,969 |
Net noncurrent deferred tax liability | 3,596,507 | 3,251,099 |
Valuation allowance | ||
Net deferred tax liability | $ 3,596,507 | $ 3,251,099 |
LEASES (Details)
LEASES (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Lease cost - Vineyards | $ 459,128 |
Operating Lease cost - Other | 229,769 |
Short-term lease cost | 31,656 |
Total Lease Cost | 720,553 |
Operating cash flows from operating leases - Vineyard | 445,473 |
Operating cash flows from operating leases - Other | $ 154,399 |
Operating Lease, Weighted Average Remaining Lease Term | 13 years 11 days |
Operating Lease, Weighted Average Discount Rate, Percent | 5.41% |
LEASES (Details 2)
LEASES (Details 2) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
2022 | $ 769,014 | |
2023 | 766,597 | |
2024 | 772,008 | |
2025 | 704,016 | |
2026 | 698,289 | |
Thereafter | 5,454,066 | |
Total minimal lease payments | 9,163,990 | |
Less present value adjustment | (2,766,073) | |
Operating lease liabilities | 6,397,917 | |
Less current lease liabilities | (443,484) | $ (277,686) |
Lease liabilities, net of current portion | $ 5,954,433 | $ 4,724,344 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | ||||||||||
Mar. 31, 2021 | Feb. 29, 2020 | Dec. 31, 2018 | Jan. 31, 2018 | Mar. 31, 2017 | Jul. 31, 2008 | Feb. 28, 2007 | Dec. 31, 2004 | Dec. 31, 1999 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Combination, Separately Recognized Transactions [Line Items] | |||||||||||
[custom:GrapesPayableCurrent-0] | $ 1,388,601 | $ 1,307,165 | |||||||||
Tualatin Vineyards [Member] | |||||||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||||||
Sale Leaseback Transaction, Description of Asset(s) | In December 2004, under a sale-leaseback agreement, the Company sold approximately 75 acres of the Tualatin Vineyards property with a net book value of approximately $551,000 for approximately $727,000 cash and entered into a 15-year operating lease agreement, with three five-year extension options, for the vineyard portion of the property. The first five year extension has been exercised. The lease contains a formula-based escalation provision with a maximum increase of 4% every three years. This property is referred to as the | In December 1999, under a sale-leaseback agreement, the Company sold approximately 79 acres of the Tualatin Vineyards property with a net book value of approximately $1,000,000 for approximately $1,500,000 cash and entered into a 20-year operating lease agreement, with three five-year extension options, and contains an escalation provision of 2.5% per year. The Company extended the lease in January 2019 until January 2025. This property is referred to as the | |||||||||
Sale Leaseback Transaction, Date | December 2004 | December 1999 | |||||||||
Sale Leaseback Transaction, Historical Cost | $ 727,000 | $ 1,500,000 | |||||||||
Sale Leaseback Transaction, Lease Period | 15 years | 20 years | |||||||||
Elton Vineyards [Member] | |||||||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||||||
Sale Leaseback Transaction, Description of Asset(s) | In February 2007, the Company entered into a lease agreement for 59 acres of vineyard land at | ||||||||||
Sale Leaseback Transaction, Date | February 2007 | ||||||||||
Sale Leaseback Transaction, Lease Period | 11 years | ||||||||||
Eola Hills [Member] | |||||||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||||||
Sale Leaseback Transaction, Description of Asset(s) | In July 2008, the Company entered into a 34-year lease agreement with a property owner in the Eola Hills for approximately 110 acres adjacent to the existing Elton Vineyards site. These 110 acres are being developed into vineyards. Terms of this agreement contain rent increases, that rises as the vineyard is developed, and contains an escalation provision of CPI plus 0.5% per year capped at 4%. This property is referred to as part of | ||||||||||
Sale Leaseback Transaction, Date | July 2008 | ||||||||||
Sale Leaseback Transaction, Lease Period | 34 years | ||||||||||
Dundee [Member] | |||||||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||||||
Sale Leaseback Transaction, Description of Asset(s) | In March 2017, the Company entered into a 25-year lease for approximately 17 acres of agricultural land in Dundee, Oregon. These acres are being developed into vineyards. This lease contains an annual payment that remains constant throughout the term of the lease. This property is referred to as part of | ||||||||||
Sale Leaseback Transaction, Date | March 2017 | ||||||||||
Sale Leaseback Transaction, Lease Terms | 25 | ||||||||||
McMinnville [Member] | |||||||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||||||
Sale Leaseback Transaction, Description of Asset(s) | In September 2018, the Company renewed an existing lease for three years, with two one-year renewal options, for its McMinnville tasting room. The lease contains an escalation provision with a cap at 3% per year. The Company has exercised the first one year renewal option. | ||||||||||
Sale Leaseback Transaction, Date | September 2018 | ||||||||||
Sale Leaseback Transaction, Lease Period | 3 years | ||||||||||
Maison Bleue [Member] | |||||||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||||||
Sale Leaseback Transaction, Description of Asset(s) | In January 2018, the Company assumed a lease, through December 2022, for its Maison Bleue tasting room in Walla Walla, Washington. The lease contains fixed payments that increase over the term of the agreement. | ||||||||||
Sale Leaseback Transaction, Date | January 2018 | ||||||||||
Willamette Wineworks [Member] | |||||||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||||||
Sale Leaseback Transaction, Description of Asset(s) | In February 2020, the Company entered into a lease for 5 years, with three five-year renewal options for a retail wine facility in Folsom, California, referred to as Willamette Wineworks. The lease contains an escalation provision tied to the CPI not to exceed 3% per annum with increases not allowed in any year being carried forward to following years. | ||||||||||
Sale Leaseback Transaction, Date | February 2020 | ||||||||||
Sale Leaseback Transaction, Lease Period | 5 years | ||||||||||
Retail Wine Facility [Member] | |||||||||||
Business Combination, Separately Recognized Transactions [Line Items] | |||||||||||
Sale Leaseback Transaction, Description of Asset(s) | In March 2021, the Company entered into a lease for 10 years, with two five-year renewal options for a retail wine facility in Vancouver, Washington. The lease defines the payments over the term of the lease and option periods. | ||||||||||
Sale Leaseback Transaction, Date | March 2021 | ||||||||||
Sale Leaseback Transaction, Lease Period | 10 years |
EMPLOYEE BENEFIT PLAN (Details
EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Defined Contribution Plan, Employer Discretionary Contribution Amount | $ 164,188 | $ 138,588 |
SALE OF PREFERRED STOCK (Detail
SALE OF PREFERRED STOCK (Details Narrative) - USD ($) | Dec. 31, 2021 | Jun. 11, 2021 | Dec. 31, 2020 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Customer Deposits, Current | $ 4,134,422 | $ 510,636 | |
Redeemable Preferred Stock | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Shares to be Issued | 2,118,811 | ||
Redeemable Preferred Stock | Minimum [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Shares to be issued, per share | $ 4.85 | ||
Redeemable Preferred Stock | Maximum [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Shares to be issued, per share | $ 5.15 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Sales, net | $ 31,786,864 | $ 27,314,852 |
Cost of sales | 13,121,191 | 10,585,076 |
Gross margin | 18,665,673 | 16,729,776 |
Selling expenses | 9,603,723 | 7,458,139 |
General and administration | 5,371,931 | 4,269,864 |
Income from operations | 3,690,019 | 5,001,773 |
Direct Sales [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales, net | 13,272,659 | 10,533,070 |
Cost of sales | 3,470,963 | 2,646,706 |
Gross margin | 9,801,696 | 7,886,364 |
Selling expenses | 6,929,882 | 5,170,804 |
Contribution margin | $ 2,871,814 | $ 2,715,560 |
Percent of sales | 41.80% | 38.60% |
Distributor Sales [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales, net | $ 18,514,205 | $ 16,781,782 |
Cost of sales | 9,650,228 | 7,938,370 |
Gross margin | 8,863,977 | 8,843,412 |
Selling expenses | 1,914,207 | 1,677,797 |
Contribution margin | $ 6,949,770 | $ 7,165,615 |
Percent of sales | 58.20% | 61.40% |
Unallocated [Member] | ||
Segment Reporting Information [Line Items] | ||
Sales, net | ||
Cost of sales | ||
Gross margin | ||
Selling expenses | 759,634 | 609,538 |
General and administration | $ 5,371,931 | $ 4,269,864 |
SEGMENT REPORTING (Details Narr
SEGMENT REPORTING (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 31,786,864 | $ 27,314,852 |
Direct Sales [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 13,272,659 | $ 10,533,070 |
Concentration Risk, Percentage | 41.80% | 38.60% |
Direct Sales [Member] | Bulk Wine And Grape [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 103,471 | $ 103,958 |
Concentration Risk, Percentage | 41.80% | 38.60% |
Distributor Sales [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 18,514,205 | $ 16,781,782 |
Concentration Risk, Percentage | 58.20% | 61.40% |
Distributor Sales [Member] | Bulk Wine And Grape [Member] | ||
Segment Reporting Information [Line Items] | ||
Concentration Risk, Percentage | 58.20% | 61.40% |