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What changed in LQR House Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of LQR House Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+260 added−210 removedSource: 10-K (2025-03-31) vs 10-K (2024-04-01)

Top changes in LQR House Inc.'s 2024 10-K

260 paragraphs added · 210 removed · 155 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

69 edited+56 added−21 removed82 unchanged
Biggest changeMarketing these brands constitutes the core elements of our business model and allow us to serve every type of customer in the alcohol industry, including individual consumers, wholesalers, and third-party alcohol brands: SWOL is a trademark, bearing application number 2345291 and bearing registration number 2141431 that was granted by the Mexican Institute of Industrial Property (“IMPI”) to Dollinger Innovations and which was later purchased by LQR House pursuant to the asset purchase agreement, dated March 19, 2021, among LQR House and Dollinger Innovations Inc., Dollinger Holdings LLC and Sean Dollinger.
Biggest changeMarketing these brands constitutes the core elements of our business model and allow us to serve every type of customer in the alcohol industry, including individual consumers, wholesalers, and third-party alcohol brands: SWOL Tequila is a limited-edition blend of Añejo Tequila made in exclusive batches of up to 10,000 bottles and represents the first installment under our “SWOL” trademarked alcohol branding.
Under the Product Handling Agreement, KBROS provides the Company the following services relating to the purchase and delivery of spirits and other beverage products purchased by customers of the Company through or in relation to websites associated with the CWS Platform: ● purchase of products to be delivered to customers of the Company, delivery of such products, and related receipt of returns of products and delivery of replacements of the products from time to time, necessary for the operation of the business by the Company, pursuant to orders for the products by the Company’s customers generated as the result of sales, promotion and marketing of the products through the CWS Platform; and ● procurement and maintenance of all certificates, licenses, authorizations and registrations required to import, possess, promote, sell, distribute and receive payment for the products and compliance with all laws, rules and regulations applicable thereto and to the operation of the CWS Platform and conduct of sales and processing of the products, as reasonably deemed necessary by the Company.
Under the Product Handling Agreement, KBROS provides the Company with the following services relating to the purchase and delivery of spirits and other beverage products purchased by customers of the Company through or in relation to websites associated with the CWS Platform: ● purchase of products to be delivered to customers of the Company, delivery of such products, and related receipt of returns of products and delivery of replacements of the products from time to time, necessary for the operation of the business by the Company, pursuant to orders for the products by the Company’s customers generated as the result of sales, promotion and marketing of the products through the CWS Platform; and ● procurement and maintenance of all certificates, licenses, authorizations and registrations required to import, possess, promote, sell, distribute and receive payment for the products and compliance with all laws, rules and regulations applicable thereto and to the operation of the CWS Platform and conduct of sales and processing of the products, as reasonably deemed necessary by the Company.
Simultaneously, Ssquared will manage the backend e-commerce operations related to the CWS Platform. Our company is the only authorized advertiser on the CWS Platform and will derive significant revenue from all sales made to our marketing partners via the CWS Platform and subscriptions offered through the CWS Platform.
Simultaneously, Ssquared will manage the backend e-commerce operations related to the CWS Platform. Our company is the only authorized advertiser on the CWS Platform and derive significant revenue from all sales made to our marketing partners via the CWS Platform and subscriptions offered through the CWS Platform.
We also believe that this demonstrates a great potential for continued market expansion and the relevance of e-commerce platforms for alcohol. In particular, the United States has shown a strong uptrend in the purchase of alcohol online, as set forth in the chart below (Vaimo, Martin Hjalm, Alcohol Ecommerce: Trends, Strategies, and Markets in 2023 , January 2023).
We also believe that this demonstrates great potential for continued market expansion and the relevance of e-commerce platforms for alcohol. In particular, the United States has shown a strong uptrend in the purchase of alcohol online, as set forth in the chart below (Vaimo, Martin Hjalm, Alcohol Ecommerce: Trends, Strategies, and Markets in 2023 , January 2023).
This includes marketing, import, storage and retail/wholesale distribution relationships. In addition to online competition, we face competition from other emerging products, as the market can be characterized as highly fragmented with many new brands coming to market. We believe we differentiate our wholly-owned brands in several ways: ● Development of products that are not generally available in the market.
This includes marketing, import, storage and retail/wholesale distribution relationships. In addition to online competition, we face competition from other emerging products, as the market can be characterized as highly fragmented with many new brands coming to the market. We believe we differentiate our wholly-owned brands in several ways: ● Development of products that are not generally available in the market.
We focus our product development on flavors and variations of products that are not generally available in the market. This differentiation aligns with current market trends and results in alignment with modern consumer preference for new and exciting brand products that expand the profile of legacy products. For example, SWOL Peach Tequila. ● Setting competitive price points.
We focus our product development on flavors and variations of products that are not generally available on the market. This differentiation aligns with current market trends and results in alignment with modern consumer preference for new and exciting brand products that expand the profile of legacy products. For example, SWOL Peach Tequila. ● Setting competitive price points.
Through the CWS Platform, users will sign up for this exclusive membership where they will have access to curated selections of wine from around the world. With Soleil Vino, we intend to create the premium wine subscription service on the market with the highest quality, and diverse selections of wine offerings, which we refer to as our Wine Club.
Through the CWS Platform, users will sign up for this exclusive membership where they will have access to curated selections of wine from around the world. With Soleil Vino, we intend to create a premium wine subscription service on the market with the highest quality, and diverse selections of wine offerings, which we refer to as our Wine Club.
If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for card issuing banks’ costs, subject to fines and higher transaction fees, and lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers, or facilitate other types of online payments, and our business and results of operations could be adversely affected. 12 The Digital Millennium Copyright Act (DMCA) provides relief for claims of circumvention of copyright protected technologies and includes a safe harbor intended to reduce the liability of online service providers for hosting, listing, or linking to third-party content that infringes copyrights of others.
If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for card issuing banks’ costs, subject to fines and higher transaction fees, and lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers, or facilitate other types of online payments, and our business and results of operations could be adversely affected. 14 The Digital Millennium Copyright Act (DMCA) provides relief for claims of circumvention of copyright protected technologies and includes a safe harbor intended to reduce the liability of online service providers for hosting, listing, or linking to third-party content that infringes copyrights of others.
CWS is offering the following products bearing the SWOL trademark at competitive price points: ● SWOL Añejo Tequila is an extremely limited-edition tequila that is bottled in glass blown flasks inscribed with a unique ID number and adorned with our patch that displays a unique label specific to the Añejo Tequila line.
CWS Platform is offering the following products bearing the SWOL trademark at competitive price points: ● SWOL Añejo Tequila is an extremely limited-edition tequila that is bottled in glass blown flasks inscribed with a unique ID number and adorned with our patch that displays a unique label specific to the Añejo Tequila line.
The tequila displays light blue crystalline flashes and production imparts an authentic tequila taste with notes of fruity oak, toasted nuts and light spice. The SWOL Cristalino Tequila is currently priced at $79.99 (MRSP). Vault is the exclusive membership program for CWS customers.
The tequila displays light blue crystalline flashes and production imparts an authentic tequila taste with notes of fruity oak, toasted nuts and light spice. The SWOL Cristalino Tequila is currently priced at $79.99 (MRSP). Vault is an exclusive membership program for CWS Platform customers.
After signing a marketing client, we send their products to our influencers who then create client specific content that directs their followers to the CWS website to buy the product. The influencers are only paid on a percentage of sales. ● Direct Inbound Lead Generation.
After signing a marketing client, we send their products to our influencers who then create client specific content that directs their followers to the CWS website to buy the product. The influencers are only paid a percentage of sales. ● Direct Inbound Lead Generation.
Within 5 days of the end of the month, we generate a summary report of the influencer program which includes the following types of data: (i) the total sales of product on the CWS Platform with basic customer location data, (ii) a list of posts per influencers with links to content across platforms, and (iii) a description of product placements on the CWS Platform. 7 Our Relationships with Third-Party Alcohol Brands To date, we have engaged with various brands to bring their products to our customer base.
Within 5 days of the end of the month, we generate a summary report of the influencer program which includes the following types of data: (i) the total sales of product on the CWS Platform with basic customer location data, (ii) a list of posts per influencers with links to content across platforms, and (iii) a description of product placements on the CWS Platform. 9 Our Relationships with Third-Party Alcohol Brands To date, we have engaged with various brands to bring their products to our customer base.
We believe we set a competitive price point, which aligns with the uniqueness and quality of the products offered by the Company. This price point is important in the context of differentiating legacy or generic products in the industry.
We believe we have set a competitive price point, which aligns with the uniqueness and quality of the products offered by the Company. This price point is important in the context of differentiating legacy or generic products in the industry.
For example, when we first launched the program, we contracted with four to five clients on a monthly basis. Since then, we have had at least 8 clients utilizing our marketing services on a monthly basis.
For example, when we first launched the program, we contracted with four to five clients on a monthly basis. Since then, we have had at least 5-8 clients utilizing our marketing services on a monthly basis.
Moreover, we will derive significant revenue from the sale of alcohol that bears our SWOL trademark. The objective of these activities is to generate recurring monthly revenue through subscriptions and product placements.
Moreover, we derive significant revenue from the sale of alcohol that bears our SWOL trademark. The objective of these activities is to generate recurring monthly revenue through subscriptions and product placements.
This membership includes hand-picked bottles of wine from award winning wineries Fee for 2 bottles per month $45.00/month $55.00/month $75.00/month Fee for 4 bottles per month $85.00/month $105.00/month $145.00/month 6 LQR House Marketing is a marketing service in which we utilize our marketing expertise to help our wholly owned brands and third-party clients market their products to consumers.
This membership includes hand-picked bottles of wine from award winning wineries Fee for 2 bottles per month $45.00/month $55.00/month $75.00/month Fee for 4 bottles per month $85.00/month $105.00/month $145.00/month 8 LQR House Marketing is a marketing service in which we utilize our marketing expertise to help our wholly owned brands and third-party clients market their products to consumers.
One potential source of acquisitions would include approaching existing marketing clients to gauge their interest in becoming a majority owned subsidiary of our company. 9 ● Technologies. We will also seek to acquire applications, analytics and distribution tools that can be utilized to complement our existing operations.
One potential source of acquisitions would include approaching existing marketing clients to gauge their interest in becoming a majority owned subsidiary of our company. 11 ● Technologies. We will also seek to acquire applications, analytics and distribution tools that can be utilized to complement our existing operations.
For further discussion, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Going Concern ”. 3 Industry Overview We plan to address market demand by aligning with key industry trends and by utilizing strategic relationships to source, brand, finance and distribute products.
For further discussion, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Going Concern ”. 4 Industry Overview We plan to address market demand by aligning with key industry trends and by utilizing strategic relationships to source, brand, finance and distribute products.
In addition to sustained demand for the largest product categories (beer, wine and spirts) and increased prominence of e-commerce, the demand for quality and novel products continues to increase as well (Forbes, Joseph Micallef, The Top Ten Trends Shaping The Adult Beverage Market In 2021 , January 2021).
In addition to sustained demand for the largest product categories (beer, wine and spirits) and increased prominence of e-commerce, the demand for quality and novel products continues to increase as well (Forbes, Joseph Micallef, The Top Ten Trends Shaping The Adult Beverage Market In 2021 , January 2021).
The SWOL Añejo Tequila is currently priced at $89.99 (MRSP). 5 ● SWOL Peach Tequila is an amber, dark coppery tequila that is bottled in glass blown flasks inscribed with a unique ID number and adorned with our patch that displays a unique label specific to the Peach Tequila line.
The SWOL Añejo Tequila is currently priced at $89.99 (MRSP). 7 ● SWOL Peach Tequila is an amber, dark coppery tequila that is bottled in glass blown flasks inscribed with a unique ID number and adorned with our patch that displays a unique label specific to the Peach Tequila line.
Effective July 1, 2023, we became subject to the Colorado Privacy Act and Connecticut’s An Act Concerning Personal Data Privacy and Online Monitoring, which are also comprehensive consumer privacy laws. Effective December 31, 2023, we will also become subject to the Utah Consumer Privacy Act, regarding business handling of consumers’ personal data.
Effective July 1, 2023, we became subject to the Colorado Privacy Act and Connecticut’s An Act Concerning Personal Data Privacy and Online Monitoring, which are also comprehensive consumer privacy laws. Effective December 31, 2023, we became subject to the Utah Consumer Privacy Act, regarding business handling of consumers’ personal data.
Specifically, we will focus initially on tequila, wine, and other specialty products by utilizing e-commerce and technology to drive sales. The market for alcohol includes beverages such as spirits, wines, and beer. Our focus is on the United States market.
Specifically, we focus on tequila, wine, and other specialty products by utilizing e-commerce and technology to drive sales. The market for alcohol includes beverages such as spirits, wines, and beer. Our focus is on the United States market.
This serves as continued marketing for our products, as the patch remains after the bottle has been consumed. 8 Our Growth Strategies Marketing We have developed three primary methods for facilitating deals through our marketing division: ● Channel Partners/Influencers.
This serves as continued marketing for our products, as the patch remains after the bottle has been consumed. 10 Our Growth Strategies Marketing We have developed three primary methods for facilitating deals through our marketing division: ● Channel Partners/Influencers.
In connection with this assignment, on July 7, 2023, the Company, Dollinger Innovations Inc. and the Producer signed a ratification of the agreement of assignment of rights of the Shared Responsibility and Bonding Agreement, which requires registration with the Mexican Institute of Industrial Property.
In connection with this assignment, on July 7, 2023, the Company, Dollinger Innovations Inc. and the Producer signed a ratification of the agreement of assignment of rights of the Shared Responsibility and Bonding Agreement, which required registration with the Mexican Institute of Industrial Property.
This acquisition marks a departure from previous marketing arrangements with Country Wine & Spirits, providing LQR House with direct control over the platform’s operations and facilitating improved access for both marketing clients and alcohol suppliers.
This acquisition marked a departure from previous marketing arrangements with Country Wine & Spirits, providing LQR House with direct control over the platform’s operations and facilitating improved access for both marketing clients and alcohol suppliers.
In addition, we generate online promotional activities around holidays and life events, while always being mindful of ethically sourcing products for distribution. 4 The Services and Brands The CWS Platform is an American online retailer specializing in alcohol products, striving to become the most trusted and convenient destination for online alcohol purchases.
In addition, we generate online promotional activities around holidays and life events, while always being mindful of ethically sourcing products for distribution. 6 The Services and Brands The CWS Platform is an American online retailer specializing in selling alcohol products, striving to become the most trusted and convenient destination for online alcohol purchases.
The agreement comes into force on the date when it is registered by the Mexican Institute of Industrial Property and is entered for indefinite term. The agreement can be terminated by mutual agreement of the parties.
The agreement came into force on the date when it is registered by the Mexican Institute of Industrial Property and is entered for indefinite term. The agreement can be terminated by mutual agreement of the parties.
Under the Funding Commitment Agreement, the Company commits to provide annual funding to KBROS from time to time in the minimum amount of $2,500,000 to enable KBROS to purchase inventory from Company-approved vendors.
Under the Funding Commitment Agreement, the Company commits to providing annual funding to KBROS from time to time in the minimum amount of $2,500,000 to enable KBROS to purchase inventory from Company-approved vendors.
This includes third-party brands hiring the Company to market their alcoholic beverage products, subscriptions through our membership programs, and the product sale of tequila branded with our trademark, “SWOL,” bearing application number 2345291 and registration number 2141431.
This includes third-party brands hiring the Company to market their alcoholic beverage products, subscriptions through our membership programs, and the product sale of tequila branded with our trademark, “SWOL,” bearing application number 2345291 and registration number 2141431 (registered in Mexico).
Each of our management team members has completed significant financial transactions over the course of their careers, and has with experience working with corporate issuers, investment and merchant banks, and law firms, and we believe that our management’s experience will help us achieve our business goals.
Members of our management team have completed significant financial transactions over the course of their careers, and have experience working with corporate issuers, investment and merchant banks, and law firms, and we believe that our management’s experience will help us achieve our business goals.
The monthly membership costs customers $29.95 and requires an initial 3-month start-up commitment. The objective is to create a loyal customer base that provide us with recurring monthly subscription revenue. Vault also provides us with the means to provide customers special discounts to marketing partner brands, which we make solely available to Vault members.
The monthly membership costs customers $19.95 and requires an initial 6-month start-up commitment. The objective is to create a loyal customer base that provides us with recurring monthly subscription revenue. Vault also provides us with the means to provide customers with special discounts to marketing partner brands, which we make solely available to Vault members.
We believe that our team has created one of the most extensive influencer relationship lists within the alcohol industry for small batch and exclusive brands. We have around 500 influencer relationships that differentiates us from many other online marketing channels available to brands. ● Extensive e-commerce and marketing expertise.
We believe that our team has created one of the most extensive influencer relationship lists within the alcohol industry for small batch and exclusive brands. We have around 460 influencer relationships that differentiate us from many other online marketing channels available to brands. ● Extensive e-commerce and marketing expertise.
We consider our intellectual property to be a key business asset and therefore have rights to use and market the following portfolio of intellectual property: SWOL Intellectual Property ● Trademarks: SWOL and Design and all associated intellectual property rights, which are registered in Mexico only. ● All labels, logos and other branding bearing the SWOL and Design marks or any mark substantially similar to the same.
We consider our intellectual property to be a key business asset and therefore have rights to use and market the following portfolio of intellectual property: SWOL Intellectual Property ● Trademarks: SWOL and Design and all associated intellectual property rights, which are registered in Mexico only (application number 2345291, registration number 2141431). ● All labels, logos and other branding bearing the SWOL and Design marks or any mark substantially similar to the same.
The Company may, without notice to KBOS, elect not to advance funding for any inventory sold by any particular vendor with respect to which the Company reasonably feels insecure. The Funding Commitment Agreement concerns a funding commitment, and not the purchase of products from KBROS or vendors. LQR also has a key partnership with Country Wine & Spirits LLC (“CWS”).
The Company may, without notice to KBROS, elect not to advance funding for any inventory sold by any particular vendor with respect to which the Company reasonably feels insecure. The Funding Commitment Agreement concerns a funding commitment, and not the purchase of products from KBROS or vendors. 2 LQR also has a key partnership with Country Wine & Spirits, Inc.
Second, when consumers purchase products on the CWS Platform like tequila with our SWOL brand, a subscription to Vault (or to the Soleil Vino wine club, which we are going to launch), or the products of our marketing service clients, CWS will perform the distribution services related to the sale of those products.
Second, when consumers purchase products on the CWS Platform like tequila with our SWOL brand, a subscription to Vault (or to the Soleil Vino wine club, which we may launch in future), or the products of our marketing service clients, CWS will perform the distribution services related to the sale of those products.
Leveraging their expertise in website management, design, development, email marketing, and SEO, LQR House aims to enhance sales on the platform, offering a diverse array of products including new releases, limited editions, celebrity-affiliated brands, cocktail content, and gift options.
Leveraging their expertise in website management, design, development, email marketing, and SEO, LQR House worked on enhancing sales on the platform, offering a diverse array of products including new releases, limited editions, celebrity-affiliated brands, cocktail content, and gift options.
The agreement will also automatically be terminated in case of failure by either party to comply with the “Official Tequila Standard” as that will result in the suspension or cancellation of the export certificates issued by the RCT. Both agreements require that the tequila supplied by the Producer should comply with the Mexican Official Tequila Standard.
The agreement will also automatically be terminated in case of failure by either party to comply with the “Official Tequila Standard” as that will result in the suspension or cancellation of the export certificates issued by the regulatory Counsil of Tequila, A.C. Both agreements require that the tequila supplied by the Producer comply with the Mexican Official Tequila Standard.
LQR House currently has relationships with 382 influencers, which is a significant differentiator and underscores the uniqueness of our company as a marketing platform. Influencers are provided a commission based on the number of products they sell and drive traffic to the CWS website. Commissions paid are solely the responsibility of CWS.
LQR House currently has relationships with 460 influencers, which is a significant differentiator and underscores the uniqueness of our company as a marketing platform. Influencers are provided with a commission based on the number of products they sell and drive traffic to the CWS Platform.
Subsequent to that on July 11, 2023, the Producer and LQR House signed a Bottled at Origin Joint Responsibility Agreement (the “Bottled at Origin Joint Responsibility Agreement”), which requires registration with the Mexican institute of Industrial Property, which was requested by the Company on July 13, 2023.
Subsequent to that on July 11, 2023, the Producer and LQR House signed a Bottled at Origin Joint Responsibility Agreement (the “Bottled at Origin Joint Responsibility Agreement”), which required registration with the Mexican institute of Industrial Property.
Enforcement of our trademark rights is important in maintaining the value of each of our brands. While it would be cost-prohibitive to act in all instances, our aim is to consistently reduce trademark infringements by carrying out coordinated, cost-effective enforcement actions following investigation of suspected trademark infringements.
While it would be cost-prohibitive to act in all instances, our aim is to consistently reduce trademark infringements by carrying out coordinated, cost-effective enforcement actions following investigation of suspected trademark infringements.
Our Historical Performance The Company’s independent registered public accounting firm has previously expressed substantial doubt as to the Company’s ability to continue as a going concern. During the years ended December 31, 2023 and 2022, we had net losses of $15,747,724 and $1,842,175, respectively.
Our Historical Performance The Company’s independent registered public accounting firm has expressed substantial doubt as to the Company’s ability to continue as a going concern. During the years ended December 31, 2024 and 2023, we had net losses of $22,754,178 and $15,747,724, respectively.
This demonstrates a considerable amount of consumption and a large and stable market that is continuing to evolve. Spirits and wine account for approximately 50.6% of total consumption as of January 2023, as set forth in the following chart (Statista, Alcoholic Drinks — Revenue — United States , January 2023).
This demonstrates a considerable amount of consumption and a large and stable market that is continuing to evolve. Spirits and wine accounted for approximately 50.6% of total consumption as of January 2023 (Statista, Alcoholic Drinks — Revenue — United States , January 2023).
The Producer manufactures exclusively for Dollinger Innovations Inc. “Tequila Anejo” and “Tequila 100% De Agave”. The Shared Responsibility and Bonding Agreement as between the original parties, the Producer, and Dollinger Innovations Inc., became effective on August 6, 2021, which is the date of its registration with the Mexican Institute of Industrial Property.
The Shared Responsibility and Bonding Agreement as between the original parties, the Producer, and Dollinger Innovations Inc., became effective on August 6, 2021, which is the date of its registration with the Mexican Institute of Industrial Property.
Today CWS has 6 brick and mortar locations and specializes in logistics of shipping and helping brands reach customers. CWS’s average brick and mortar store is 3000-5000 square feet in prestigious neighborhoods and offer brands that customers have a hard time sourcing.
Today CWS has 6 brick and mortar locations and specializes in logistics of shipping and helping brands reach customers. CWS’s average brick and mortar store is 3000-5000 square feet in prestigious neighborhoods and offer brands that customers have a hard time sourcing. To date CWS has distributed all of the alcohol ordered by customers through the CWS Platform.
Soleil Vino Intellectual Property ● Trademarks for Soleil Vino and all associated trade dress and intellectual property rights (which are not currently registered by us). ● All labels, logos and other branding bearing the Soleil Vino marks or any mark substantially similar to the same. ● Website and all related digital and social media content including but not limited to influencer networks, http://www.soleilvino.com , and all related content, and all related sales channels.
Soleil Vino Intellectual Property ● Trademarks for Soleil Vino and all associated trade dress and intellectual property rights (which are not currently registered by us). ● All labels, logos and other branding bearing the Soleil Vino marks or any mark substantially similar to the same. ● Domain name http://www.soleilvino.com , and all related digital and social media content including but not limited to influencer networks, and all related content, and all related sales channels. 12 Enforcement of our trademark rights is important in maintaining the value of each of our brands.
Through the CWS Platform, users can sign up for this exclusive membership where they will have access to all products available through CWS combined with special membership benefits including: (i) 10% off all products site wide; (ii) free ground shipping (2-5 business days) on orders over $50 (limited to three shipping addresses); (iii) access to special promotional offers; and (iv) free mystery vault gifts in every shipment.
Through the CWS Platform, users can sign up for this exclusive membership where they will have access to all products available through CWS combined with special membership benefits including: (i) 10% off all products site wide, including sale items; (ii) exclusive access to redeem loyalty points to use for further discounts on purchases; (iii) free ground shipping (2-5 business days) on orders over $100 (limited to three shipping addresses, not valid for corporate orders); (iv) access to special promotional offers; and (v) free mystery vault gifts.
LQR House owns 100% of CWSpirits.com (the “CWS Platform”), a leading online marketplace offering a comprehensive range of alcohol-related products to customers across the United States, while presently not extending its services to Canada and Mexico.
Our Business LQR House owns 100% of CWS Platform, an online marketplace offering a comprehensive range of alcohol-related products to customers across the United States, while presently not extending its services to Canada and Mexico.
This includes large online retailers such as Amazon, specialty e-commerce sites and direct sales from producers. These companies are often larger than us, and have considerable financial, technical and human capital resources. However, we believe that we have the following competitive strengths that will allow us to capitalize on the growing alcoholic beverage industry and alcohol e-commerce: ● Targeted marketing.
These companies are often larger than us, and have considerable financial, technical and human capital resources. However, we believe that we have the following competitive strengths that will allow us to capitalize on the growing alcoholic beverage industry and alcohol e-commerce: ● Targeted marketing.
We have engaged with brands including, but not limited to, Cocktail Caviar, Soda Jerk, Bake Sale and Just the Tipsy to market and sell their products on the CWS Platform. Our clients generally include newer alcohol brands that produce small batches and craft spirits.
We have engaged with brands including, but not limited to Loca Loka, Pinaq, Don Ramon, Soda Jerk, and Full Bore Whiskey to market and sell their products on the CWS Platform. Our clients generally include newer alcohol brands that produce small batches and craft spirits.
Government Regulation The Alcohol Industry A complex multi-jurisdictional regime governs alcoholic beverage manufacturing, distribution, sales, and marketing in the United States. The alcoholic beverages industry in which we operate is subject to extensive regulation by the Alcohol and Tobacco Tax and Trade Bureau (and other federal agencies), each state’s liquor authority, and potentially local authorities depending on location.
The alcoholic beverages industry in which we operate is subject to extensive regulation by the Alcohol and Tobacco Tax and Trade Bureau (and other federal agencies), each state’s liquor authority, and potentially local authorities depending on location.
To date CWS has distributed all of the alcohol (other than SWOL Tequila) ordered by customers through the CWS Platform. KBROS, LLC KBROS was founded in 2013 and is an asset management company that specializes in managing e-commerce platforms and real estate and sourcing of logistic companies. The President of CWS, Shawn Kattoula, is also the 100% owner of KBROS.
KBROS, LLC KBROS was founded in 2013 and is an asset management company that specializes in managing e-commerce platforms and real estate and sourcing of logistic companies. The President of CWS, Shawn Kattoula, is also the 100% owner of KBROS.
At this time, the Company does not service customers in Canada and Mexico. The Marketing Agreement also provided us with the sole right to manage and make decisions with regard to user-facing content on the CWS Platform, including the placement and removal of products and the creation and management of promotional initiatives.
Prior to our acquisition of CWS Platform in November 2023, the Marketing Agreement also provided us with the sole right to manage and make decisions with regard to user-facing content on the CWS Platform, including the placement and removal of products and the creation and management of promotional initiatives.
Key Agreements with Supplier In accordance with a certain asset purchase agreement dated March 19, 2021, by and between the Company, as buyer, and Dollinger Innovations Inc., Dollinger Holdings LLC, and Sean Dollinger, our Chief Executive Officer, as sellers, the Company became an assignee to that certain Shared Responsibility and Bonding Agreement dated March 19, 2021, between Leticia Hermosillo Ravelero (“Producer”) and Dollinger Innovations Inc., (the “Shared Responsibility and Bonding Agreement”).
In accordance with the Tequila Asset Purchase Agreement, the Company became an assignee to that certain Shared Responsibility and Bonding Agreement dated March 19, 2021, between Leticia Hermosillo Ravelero (“Producer”) and Dollinger Innovations Inc., (the “Shared Responsibility and Bonding Agreement”).
We anticipate all these market trends will positively impact our business and present an opportunity to continue expanding. Specifically, we align with market trends by focusing our marketing and distribution efforts online and we expect to bring new and exciting premium products to market across categories.
Specifically, we align with market trends by focusing our marketing and distribution efforts online, and we expect to bring new and exciting premium products to market across categories.
CWS pays us for its orders of SWOL and we pay a portion of such amounts to the local manufacturer to produce SWOL and to Rilo to import SWOL.
We also contract with Rilo Import & Export (“Rilo”) who we engage to import SWOL from Mexico to CWS in the United States. CWS pays us for its orders of SWOL, and we pay a portion of such amounts to the local manufacturer to produce SWOL and to Rilo to import SWOL.
The Shared Responsibility and Bonding Agreement will terminate on August 6, 2026, unless terminated prior to that date by joint agreement with at least 30 days advance written notice. 11 On June 30, 2023, pursuant to an assignment agreement, Dollinger Innovations Inc., Dollinger Holdings LLC, and Sean Dollinger assigned their rights as distributor under the Packaging of Origin Co-Responsibility Agreement dated July 6, 2020 (the “Packaging of Origin Co-Responsibility Agreement”) to the Company.
On June 30, 2023, pursuant to an assignment agreement, Dollinger Innovations Inc., Dollinger Holdings LLC, and Sean Dollinger assigned their rights as distributor under the Packaging of Origin Co-Responsibility Agreement dated July 6, 2020 (the “Packaging of Origin Co-Responsibility Agreement”) to the Company.
Seasonality Seasonality has some impact on our business via the levels at which customers engage with our products and brand. For example, we have traditionally seen lower total sales in the post-holiday and winter months. Our marketing strategies, which may be informed by these seasonal trends, will also impact our quarterly results of operations.
For example, we have traditionally seen lower total sales in the post-holiday and winter months. Our marketing strategies, which may be informed by these seasonal trends, will also impact our quarterly results of operations. These trends may cause our cash requirements to vary from quarter to quarter depending on the variability in the volume and timing of sales.
Through the Marketing Agreement, LQR House was responsible for all digital marketing of products offered on the CWS Platform, including social media marketing and cooperation with their influencer network. Ssquared was responsible for product management on the CWS Platform and ensuring that the site is always live and accessible to the customers.
Upon acquisition of the CWS Platform, this Exclusive Marketing Agreement was effectively cancelled. LQR House is responsible for all digital marketing of products offered on the CWS Platform, including social media marketing and cooperation with their influencer network.
The Company submitted documents to the Mexican Institute of Industrial Property to obtain such registration on July 12, 2023. Pursuant to the Shared Responsibility and Bonding Agreement, the Producer produces and supplies to LQR House an alcoholic beverage “Tequila made 100% of agave” labeled “SWOL” and LQR House facilitates the distribution of this product in collaboration with Rilo.
Pursuant to the Shared Responsibility and Bonding Agreement, the Producer produces and supplies to LQR House an alcoholic beverage “Tequila made 100% of agave” labeled “SWOL” and LQR House facilitates the distribution of this product in collaboration with Rilo. The Producer manufactures exclusively for Dollinger Innovations Inc. “Tequila Anejo” and “Tequila 100% De Agave”.
LQR House’s acquisition of the CWS Platform signifies a strategic move towards bolstering its presence in the online alcohol retail market, offering consumers across the nation an enhanced shopping experience. 2 Country Wine & Spirits, Inc.
Notably, product handling, packaging, and shipping for purchases made on the CWS Platform remains the responsibility of KBROS, the owner of Country Wine and Spirits’ brick-and-mortar locations. LQR House’s acquisition of the CWS Platform signified a strategic move towards bolstering its presence in the online alcohol retail market, offering consumers across the nation an enhanced shopping experience.
With this purchase, LQR House gains full ownership of one of the most established websites in the field, boasting a dedicated customer base of over 125,000.
LQR House has made a significant move in the realm of e-commerce with its acquisition of the CWS Platform, an online platform in the wine and spirits industry in the USA. With this purchase, LQR House gained full ownership of one of the most established websites in the field, boasting a dedicated customer base of over 125,000.
Many customers return for additional marketing programs after the initial engagement and elect to enter multiple month arrangements. The following graphics contain advertisements we created for some of our clients, to be run on the CWS Platform. Our Competition and Competitive Strengths The market for online sales and promotions of alcohol is competitive.
Many customers return for additional marketing programs after the initial engagement and elect to enter multiple month arrangements. Our Competition and Competitive Strengths The market for online sales and promotions of alcohol is competitive. This includes large online retailers such as Amazon, specialty e-commerce sites and direct sales from producers.
Our independent contractors include third-party service providers who staff our organization and supplement our teams as needed. None of our personnel are represented by labor unions, and we believe that we have an excellent relationship with everyone who works with us. We operate the Company under remote-first principles.
None of our personnel are represented by labor unions, and we believe that we have an excellent relationship with everyone who works with us. We operate the Company under remote-first principles. Seasonality Seasonality has some impact on our business via the levels at which customers engage with our products and brand.
Intellectual Property We consider intellectual property to be important to the operation of our business, and critical to driving growth in our commercial revenue.
As of the date of this Annual Report on Form 10-K, we do not have any acquisitions in progress, nor have we identified any potential acquisitions. Intellectual Property We consider intellectual property to be important to the operation of our business, and critical to driving growth in our commercial revenue.
The Company has raised funds from the IPO and an additional $16.6 million from its public offerings in October and November 2023. However, the Company expects that its cash and cash equivalents as of the date of issuance of these financial statements may not be sufficient to fund its operating expenses and acquisition plans for at least one year.
However, the Company expects that its cash and cash equivalents as of the date of this Annual Report on Form 10-K may not be sufficient to fund its operating expenses and potential acquisition plans for at least one year.
SWOL Tequila is a limited-edition blend of Añejo Tequila made in exclusive batches of up to 10,000 bottles and represents the first installment under our “SWOL” trademarked alcohol branding. Through our partnership with CWS, we market Tequila bearing the “SWOL” trademark, which we call “SWOL Tequila,” on the CWS Platform, which distributes SWOL Tequila throughout the United States.
Through our partnership with CWS, we market Tequila bearing the “SWOL” trademark, which we call “SWOL Tequila,” on the CWS Platform, which distributes SWOL Tequila throughout the United States.
In relation to materials for which copyright protection is available, our current practice is generally to secure copyright ownership where possible and appropriate. 10 Human Capital As of April 1, 2024, we have 18 consultants, including Sean Dollinger, Kumar Abhishek, Jaclyn Hoffman, and Alexandra Hoffman.
In relation to materials for which copyright protection is available, our current practice is generally to secure copyright ownership where possible and appropriate. Human Capital As of March 31, 2025, we have 4 employees, and 3 independent contractors. Our independent contractors include third-party service providers who staff our organization and supplement our teams as needed.
These trends may cause our cash requirements to vary from quarter to quarter depending on the variability in the volume and timing of sales. We believe that these seasonal trends have affected and will continue to affect our quarterly results.
We believe that these seasonal trends have affected and will continue to affect our quarterly results. 13 Government Regulation The Alcohol Industry A complex multi-jurisdictional regime governs alcoholic beverage manufacturing, distribution, sales, and marketing in the United States.
As set forth in the above chart, the United States, which is estimated to consume a total of approximately $283.8 billion worth of alcoholic beverages in 2023, represents one of the largest global markets for all alcoholic beverage category sales (Statista, Alcoholic Drinks — Worldwide , January 2023).
The alcoholic beverages market is expected to grow by around 37% by 2028 to over 2.1 trillion U.S. dollars in value from 2022’s value of 1.53 trillion dollars. The United States represents one of the largest global markets for all alcoholic beverage category sales (Statista, Alcoholic Drinks — Market Size , November 2024).
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ITEM 1. BUSINESS Our Company Our Company, LQR House Inc., is an ecommerce company dedicated to forging a niche marketplace within the alcohol industry and intends to become the full-service digital marketing and brand development face of the alcoholic beverage space, LQR House Inc. is disrupting traditional paradigms with its direct-to-consumer platform and innovative marketing strategies.
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ITEM 1. BUSINESS Overview Our company, LQR House Inc., a Nevada corporation (“LQR”, “LQR House”, or the “Company”), intends to become a prominent force in the wine and spirits e-commerce, sector epitomized by its flagship alcohol marketplace, CWSpirits.com (“CWS Platform”). This platform delivers a diverse range of spirits, wines, and champagnes from esteemed retail partners like Country Wine & Spirits.
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We will only request SWOL to be manufactured based on purchase orders we receive from CWS, who is licensed to distribute alcohol in and from California. We also contract with Rilo Import & Export (“Rilo”) who we engage to import SWOL from Mexico to CWS in the United States.
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Beyond its role in the e-commerce sector, LQR is a marketing agency with a specialized focus on the alcohol industry. We also intend to integrate the supply, sales, and marketing facets of the alcoholic beverage space into one easy to use platform and become the one-stop-shop for everything related to alcohol.
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However, it is important to note that we do not engage in the sale of alcoholic products in the United States or the distribution of any alcoholic products anywhere. 1 On May 31, 2021, we purchased from Dollinger Holdings LLC, all of the right, title and interest in all trademarks regardless of registration status for Soleil Vino and all associated trade dress and intellectual property rights, all labels, logos and other branding bearing the Soleil Vino marks or any mark substantially similar to the same, and all website and all related digital and social media content including but not limited to influencer networks, http://www.soleilvino.com , and all related content, and all related sales channels was transferred.
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To date, our core business includes e-commerce sales in the United States through CWSpirits.com, growing our in-house tequila brand SWOL Tequila, and developing marketing strategies for external brands. These strategies include banner ads on our site, targeted email campaigns, and influencer marketing, all designed to drive product awareness and sales.
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On July 7, 2023, the Company, Dollinger Innovations Inc. and Leticia Hermosillo Raverero (the “Producer”) signed a ratification of the agreement of assignment of rights of the Shared Responsibility and Bonding Agreement, which requires registration with the Mexican Institute of Industrial Property.
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Additionally, we are in the process of establishing an exclusive wine club. Our Organization Our company was incorporated in the State of Delaware on January 11, 2021, under the name LQR House Inc. On February 3, 2023, we changed our state of incorporation to the State of Nevada by merging into LQR House Inc., a Nevada corporation.
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The registration is required under Mexican law to put third parties on notice of the existence of agreements that contain intellectual property rights.
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The Company owns and operates CWS Platform through its wholly owned subsidiary, LQR House Acquisition Corp. In May 2024, we acquired a minority stake of common shares of Cannon Estate Winery Ltd. (“Cannon”), a British Columbia corporation, an owner of Cannon Estate Winery.
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The Company submitted documents to the Mexican Institute of Industrial Property to obtain such registration on July 12, 2023, but such registration will not be complete until it has been notified by the Mexican government and we cannot predict when that will occur.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur common stock have experienced and may potentially experience rapid and substantial price volatility, which may make it difficult for prospective investors to assess the value of our common stock. In addition to the risks addressed above, our common stock may be subject to rapid and substantial price volatility.
Biggest changeAs a result of this volatility, you may not be able to sell your common stock at or above the public offering price and you may lose some or all of your investment. In addition to the risks addressed above, our common stock may continue to be subject to rapid and substantial price volatility.
These laws and regulations could change or be reinterpreted to make it difficult or impossible for us to comply.
These laws and regulations could change or be reinterpreted to make it difficult or impossible for us to comply.
If we were found to be in violation of any of these applicable laws or regulations, we could be subject to civil or criminal penalties and higher transaction fees or lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, which may make our services less convenient and less attractive to our customers and diminish the customer experience.
If we were found to be in violation of any of these applicable laws or regulations, we could be subject to civil or criminal penalties and higher transaction fees or lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, which may make our services less convenient and less attractive to our customers and diminish the customer experience.
These laws and regulations could change or be reinterpreted to make it difficult or impossible for us to comply.
These laws and regulations could change or be reinterpreted to make it difficult or impossible for us to comply.
If we were found to be in violation of any of these applicable laws or regulations, we could be subject to civil or criminal penalties and higher transaction fees or lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, which may make our services less convenient and less attractive to our customers and diminish the customer experience.
If we were found to be in violation of any of these applicable laws or regulations, we could be subject to civil or criminal penalties and higher transaction fees or lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, which may make our services less convenient and less attractive to our customers and diminish the customer experience.
Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that: ● had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or ● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or 33 ● in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.
Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that: ● had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or ● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or 35 ● in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.
Our failure to raise additional capital could have a negative impact on not only our financial condition but also our ability to execute our business plan. No assurance can be given that the Company will be successful in these efforts. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Our failure to raise additional capital in future could have a negative impact on not only our financial condition but also our ability to execute our business plan. No assurance can be given that the Company will be successful in these efforts. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Dollinger affirmed that the $400,000.00 purchase price for Dollinger US was fair market value and that the deal was conducted at arm’s length. 13 On September 13, 2018, and October 4, 2018, Citron Research, a company controlled by US-based short-seller Andrew Left, released two reports on Namaste.
Dollinger affirmed that the $400,000.00 purchase price for Dollinger US was fair market value and that the deal was conducted at arm’s length. 15 On September 13, 2018, and October 4, 2018, Citron Research, a company controlled by US-based short-seller Andrew Left, released two reports on Namaste.
If our efforts to satisfy our customers are not successful, we may be unable to acquire new customers in sufficient numbers to continue to grow our business, and we may be required to incur significantly higher marketing expenses to acquire new customers. We rely on other third parties to provide services essential to the success of our business.
If our efforts to satisfy our customers are not successful, we may be unable to acquire new customers in sufficient numbers to continue to grow our business, and we may be required to incur significantly higher marketing expenses to acquire new customers. 20 We rely on other third parties to provide services essential to the success of our business.
In addition, establishing the corporate infrastructure necessary for operating a public company may divert our management’s attention from implementing our growth strategy, which could delay or slow the implementation of our business strategies, and in turn negatively impact our company’s financial condition and results of operations. 27 If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
In addition, establishing the corporate infrastructure necessary for operating a public company may divert our management’s attention from implementing our growth strategy, which could delay or slow the implementation of our business strategies, and in turn negatively impact our company’s financial condition and results of operations. 29 If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired.
Deterioration to our brand equity may be difficult to combat or reverse and could have a material effect on our business and financial results. 19 In addition, in recent years, there has been a marked increase in the use of social media platforms and other forms of Internet-based communications that provide individuals with access to broad audiences, and the availability of information on social media platforms is virtually immediate, as can be its impact.
Deterioration to our brand equity may be difficult to combat or reverse and could have a material effect on our business and financial results. 21 In addition, in recent years, there has been a marked increase in the use of social media platforms and other forms of Internet-based communications that provide individuals with access to broad audiences, and the availability of information on social media platforms is virtually immediate, as can be its impact.
Dollinger has to spend on our business and otherwise may have a have a material adverse impact on the price of our securities and the results of our operations. 14 Our Chief Executive Officer and Director is, and may in the future become, affiliated with entities engaged in business activities similar to those that could be conducted by us and, accordingly, may in the future have conflicts of interest in allocating his time and determining to which entity a particular business opportunity should be presented.
Dollinger has to spend on our business and otherwise may have a have a material adverse impact on the price of our securities and the results of our operations. 16 Our Chief Executive Officer and Director is, and may in the future become, affiliated with entities engaged in business activities similar to those that could be conducted by us and, accordingly, may in the future have conflicts of interest in allocating his time and determining to which entity a particular business opportunity should be presented.
In addition, such changes in laws could increase our costs of doing business or prevent us from delivering our services over the Internet or in specific jurisdictions, which could harm our business and our results of operations. 26 Changes in laws and government regulations to which we are currently subject, including changes to the method or approach of enforcement, may increase our costs or limit our ability to market our alcohol brands and the brands of our clients, which could adversely affect our operating results and business.
In addition, such changes in laws could increase our costs of doing business or prevent us from delivering our services over the Internet or in specific jurisdictions, which could harm our business and our results of operations. 28 Changes in laws and government regulations to which we are currently subject, including changes to the method or approach of enforcement, may increase our costs or limit our ability to market our alcohol brands and the brands of our clients, which could adversely affect our operating results and business.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our common stock to decline. 31 We have never paid cash dividends on our stock and do not intend to pay dividends for the foreseeable future.
If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our common stock to decline. 33 We have never paid cash dividends on our stock and do not intend to pay cash dividends for the foreseeable future.
In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable outside the United States. 32 We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, and our stockholders could receive less information than they might expect to receive from more mature public companies.
In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable outside the United States. 34 We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, and our stockholders could receive less information than they might expect to receive from more mature public companies.
Enforcing or defending the Company’s registered and unregistered trademarks or service marks might result in significant litigation costs and damages, including the inability to continue using certain marks. 22 The laws of foreign countries in which the Company may contemplate doing business in the future may not recognize intellectual property rights or protect them to the same extent as do the laws of the United States.
Enforcing or defending the Company’s registered and unregistered trademarks or service marks might result in significant litigation costs and damages, including the inability to continue using certain marks. 24 The laws of foreign countries in which the Company may contemplate doing business in the future may not recognize intellectual property rights or protect them to the same extent as do the laws of the United States.
We may need to spend additional time and money ensuring we will meet future regulatory requirements. 24 Our business could be negatively impacted by changes in the U.S. political environment. There is significant ongoing uncertainty with respect to potential legislation, regulation and government policy at the federal, state and local levels in the United States.
We may need to spend additional time and money ensuring we will meet future regulatory requirements. 26 Our business could be negatively impacted by changes in the U.S. political environment. There is significant ongoing uncertainty with respect to potential legislation, regulation and government policy at the federal, state and local levels in the United States.
We have a limited operating history, which may make it difficult to evaluate our business and prospects. The Company is an early, startup stage entity with little operating history. The Company only has nominal cash as of the date of this Annuary Report on the Form 10-K. The revenue and income potential of the Company’s business and market are unproven.
We have a limited operating history, which may make it difficult to evaluate our business and prospects. The Company is an early, startup stage entity with little operating history. The Company only has nominal cash as of the date of this Annual Report on Form 10-K. The revenue and income potential of the Company’s business and market are unproven.
Any new investor may require that any future debt financing or issuance of preferred equity by the Company could be senior to the rights of stockholders, and any future issuance of equity could result in the dilution of the value of our shares. 16 The Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business.
Any new investor may require that any future debt financing or issuance of preferred equity by the Company could be senior to the rights of stockholders, and any future issuance of equity could result in the dilution of the value of our shares. 18 The Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business.
There can be no assurance that any share repurchases will, in fact, occur, or, if they occur, that they will enhance stockholder value. Although share buyback programs are intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the effectiveness of these repurchases. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 34
There can be no assurance that any share repurchases will, in fact, occur, or, if they occur, that they will enhance stockholder value. Although share buyback programs are intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the effectiveness of these repurchases. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 36
Other governmental authorities around the world have enacted or are considering similar types of legislative and regulatory proposals concerning data protection. 25 The interpretation and enforcement of the laws and regulations described above are uncertain and subject to change and may require substantial costs to monitor and implement and maintain adequate compliance programs.
Other governmental authorities around the world have enacted or are considering similar types of legislative and regulatory proposals concerning data protection. 27 The interpretation and enforcement of the laws and regulations described above are uncertain and subject to change and may require substantial costs to monitor and implement and maintain adequate compliance programs.
As a result, you may suffer a loss on your investment. 30 Certain recent initial public offerings of companies with relatively small public floats comparable to our anticipated public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company.
As a result, you may suffer a loss on your investment. 32 Certain recent initial public offerings of companies with relatively small public floats comparable to our anticipated public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company.
Similar impacts have occurred in the past, such as during the 2008 – 2010 financial crisis. 28 Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. Although the U.S.
Similar impacts have occurred in the past, such as during the 2008 – 2010 financial crisis. 30 Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. Although the U.S.
These threats include cyberattacks, such as computer viruses, malicious code, phishing attacks or information security breaches. 23 Our operations will, in part, rely on the secure processing, transmission and storage of confidential proprietary and other information in our computer systems and networks.
These threats include cyberattacks, such as computer viruses, malicious code, phishing attacks or information security breaches. 25 Our operations will, in part, rely on the secure processing, transmission and storage of confidential proprietary and other information in our computer systems and networks.
If this occurred, the Company could lose access to a material portion of its assets which would have a material adverse effect on our business, financial condition and results of operations. 15 Our business, revenue, and operations depend on our continuing relationship with CWS.
If this occurred, the Company could lose access to a material portion of its assets which would have a material adverse effect on our business, financial condition and results of operations. 17 Our business, revenue, and operations depend on our continuing relationship with CWS.
The effect of this competition could adversely affect our results of operations. 21 We are dependent on the continued services and performance of our senior management and other key employees, the loss of any of whom could adversely affect our business, operating results and financial condition.
The effect of this competition could adversely affect our results of operations. 23 We are dependent on the continued services and performance of our senior management and other key employees, the loss of any of whom could adversely affect our business, operating results and financial condition.
In the years ended December 31, 2023 and 2022, all revenue was derived from or directly related to contractual relationship with CWS.
In the years ended December 31, 2024 and 2023, all revenue was derived from or directly related to contractual relationship with CWS.
ITEM 1A. RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this annual report, before purchasing our common stock.
ITEM 1A. RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this Annual Report on Form 10-K, before purchasing our common stock.
During the years ended December 31, 2023 and 2022, we had net losses of $15,747,724 and $1,842,175, respectively. It is anticipated that the Company may continue to sustain operating losses. Its ability to become and/or remain profitable depends in material part on success in growing and expanding the Company’s products and services.
During the years ended December 31, 2024 and 2023, we had net losses of $22,754,178 and $15,747,724, respectively. It is anticipated that the Company may continue to sustain operating losses. Its ability to become and/or remain profitable depends in material part on success in growing and expanding the Company’s products and services.
Broad market factors may seriously harm the market price of our common stock, regardless of our actual or expected operating performance and financial condition or prospects, which may make it difficult for investors to assess the rapidly changing value of our common stock.
There is the potential for rapid and substantial price volatility of our common stock. Broad market factors may seriously harm the market price of our common stock, regardless of our actual or expected operating performance and financial condition or prospects, which may make it difficult for investors to assess the rapidly changing value of our common stock.
The bankruptcy or insolvency of any partner, vendor or supplier, or the failure of any partner to make payments when due, or any breach or default by a partner, vendor or supplier, or the loss of any significant supplier relationships, could cause us to suffer material losses and may have a material adverse impact on our business. 29 Risks Related to Ownership of Our Common Stock Our stock price may be volatile, and purchasers of our common stock could incur substantial losses.
The bankruptcy or insolvency of any partner, vendor or supplier, or the failure of any partner to make payments when due, or any breach or default by a partner, vendor or supplier, or the loss of any significant supplier relationships, could cause us to suffer material losses and may have a material adverse impact on our business. 31 Risks Related to Ownership of Our Common Stock An active trading market for our shares may not be sustained.
The stock market in general has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to operating performance of individual companies, particularly following a public offering of a company with a small public float. There is the potential for rapid and substantial price volatility of our commonstock.
Our stock price may be volatile, and purchasers of our common stock could incur substantial losses. The stock market in general has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to operating performance of individual companies, particularly following a public offering of a company with a small public float.
The Company sustained net losses of $15,747,724 and $1,842,175 during the years ended December 31, 2023 and 2022, respectively, and had cash used in operations of $9,113,855 during the year ended December 31, 2023. The Company requires additional capital to operate and expects losses to continue for the foreseeable future.
The Company sustained net losses of $22,754,178 and $15,747,724 during the years ended December 31, 2024 and 2023, respectively, and had cash used in operations of $6,618,417 during the year ended December 31, 2024. The Company requires additional capital to operate and expects losses to continue for the foreseeable future.
As a result, our business, financial condition, and results of operations may be materially and adversely affected. 18 We believe that many of our new customers will originate from word-of-mouth and other non-paid referrals from our customers. Therefore, we must ensure that our customers remain loyal to us to continue receiving those referrals.
We believe that many of our new customers will originate from word-of-mouth and other non-paid referrals from our customers. Therefore, we must ensure that our customers remain loyal to us to continue receiving those referrals.
Consequently, our prices may increase, or may not decrease to levels sufficient to generate customer interest, our net revenues may decrease, and our margins and profitability may decline or not improve.
Consequently, our prices may increase, or may not decrease to levels sufficient to generate customer interest, our net revenues may decrease, and our margins and profitability may decline or not improve. As a result, our business, financial condition, and results of operations may be materially and adversely affected.
Significant increases in taxes on, or that impact, beverage alcohol products could have a material adverse effect on our business, liquidity, financial condition and/or results of operations. Changes in the prices of supplies and raw materials could have a materially adverse effect on our business.
Significant increases in taxes on, or that impact, beverage alcohol products could have a material adverse effect on our business, liquidity, financial condition and/or results of operations. Our business may be impacted by political, trade or regulatory developments in the jurisdictions in which we sell our products.
We cannot assure you that shortages or increases in the prices of our supplies or raw materials will not have a material adverse effect on our financial condition and results of operations. 20 We are subject to, or voluntarily comply with, a number of other laws and regulations relating to the payments we accept from our customers and third parties, including with respect to money laundering, money transfers, privacy, and information security, and electronic fund transfers.
We are subject to, or voluntarily comply with, a number of other laws and regulations relating to the payments we accept from our customers and third parties, including with respect to money laundering, money transfers, privacy, and information security, and electronic fund transfers.
We believe that the markets in our product segment will continue to grow, that we will be successful in marketing our products and services in these markets.
Our future profits are influenced by many factors, including economics, world events and changing customer preferences. We believe that the markets in our product segment will continue to grow, that we will be successful in marketing our products and services in these markets.
Removed
Any such interruption could negatively impact our business development, launches of new products, and significantly affect our business, financial condition, results of operations, and reputation. 17 The Company’s ability to import SWOL Tequila may be suspended at any time by the Mexican authorities and until registration of the Company’s Mexican agreements is complete, the Company will not be able to enforce its authorization to use the denomination of origin “TEQUILA” applied in their products branded under the SWOL trademark against third parties in Mexico.
Added
During the year ended December 31, 2024, the Company received net proceeds of $1,543,079 from the sale of an aggregate of 1,485,575 shares of common stock pursuant to an at-the-market public offering.
Removed
On March 19, 2021, the Company entered into an asset purchase agreement with Dollinger Innovations Inc., Dollinger Holdings LLC, and Sean Dollinger pursuant to which we acquired the assets related to the online or in-person sale of original SWOL tequila and other SWOL branded products.
Added
In addition, the Company received gross proceeds of $350,020 from the sale of securities pursuant to the December Purchase Agreement, and gross proceeds of $3,000,000 from the sale of securities pursuant to Lazar Purchase Agreement.
Removed
The transaction included the assignment of the Shared Responsibility and Bonding Agreement by and between Dollinger Innovations and Leticia Hermosillo Raverero relating to the production of original SWOL tequila for exclusive importation into the United States by Dollinger Innovations or its assigns.
Added
Any such interruption could negatively impact our business development, launches of new products, and significantly affect our business, financial condition, results of operations, and reputation. 19 If demand for our products and services does not develop as expected our projected revenues and profits will be affected.
Removed
In connection with this assignment, on July 7, 2023, the Company, Dollinger Innovations Inc. and the Producer signed a ratification of the agreement of assignment of rights of the Shared Responsibility and Bonding Agreement, which requires registration with the Mexican Institute of Industrial Property.
Added
Significant political, trade, or regulatory developments in the jurisdictions in which we sell our products, such as those stemming from the change in U.S. federal administration, are difficult to predict and may have a material adverse effect on us.
Removed
The Company submitted documents to the Mexican Institute of Industrial Property to obtain such registration on July 12, 2023. On June 30, 2023, pursuant to an assignment agreement, Dollinger Innovations Inc., Dollinger Holdings LLC, and Sean Dollinger assigned their rights as distributor under the Packaging of Origin Co-Responsibility Agreement with the Producer dated July 6, 2020 to the Company.
Added
Similarly, changes in U.S. federal policy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on our business operations. For example, in March 2025, the U.S. initially imposed a 25% tariff on imports from Canada and Mexico and imposed a 20% tariff on imports from China.
Removed
Subsequent to that, on July 11, 2023, the Producer and LQR House signed a Bottled at Origin Joint Responsibility Agreement, which requires registration with the Mexican institute of Industrial Property, which was requested by the Company on July 13, 2023.
Added
The U.S. largely reversed course and goods eligible for treatment under the 2020 United States-Mexico-Canada Agreement (“USMCA”) can enter the U.S. tariff free until April 2, 2025. Historically, tariffs have led to increased trade and political tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods.
Removed
The Company does not know when it will receive the completed registrations described above, and the Mexican authorities could suspend importation into the United States of SWOL branded products at any time.
Added
In retaliation to the recent U.S. imposed tariffs, China imposed tariffs up to 15% on a wide array of U.S. farm exports, and Canada and Mexico have stated they will impose tariffs on the U.S.
Removed
Until we obtain a completed registration, the Company will not be able to enforce its authorization to use the denomination of origin “TEQUILA” applied in their products branded under the SWOL trademark against third parties in Mexico.
Added
Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. We import our SWOL Tequila from Mexico. We also sell out products in Canada.
Removed
After we obtain such registrations, the Mexican authorities could suspend such importation of SWOL branded products only in case of cancellation of the registration, which would only happen in the following scenarios: i) if the parties fail to comply with the “Official Tequila Standard” as that will result in the suspension or cancellation of the export certificates issued by the regulatory Council of Tequila, A.C.
Added
Any changes in political, trade, regulatory, and economic conditions, including U.S. trade policies, could have a material adverse effect on our financial condition, results of operations or our industry.
Removed
(“RCT”); ii) if LQR House fails to include the phrases: “Protected Designation of Origin” in their products in the terms provided in article 302 of Mexico Federal Law for the Protection of Industrial Property; and iii) by termination of the validity of the authorization provided by the Producer.
Added
The impact of these potential tariffs on our financial condition, results of operations or industry, if any, is subject to a number of factors that are not yet known, including any countermeasures that the target countries may take in response to such tariffs.
Removed
In the event that importation of SWOL products is suspended it would have a material adverse effect on the Company’s financial results and reputation. If demand for our products and services does not develop as expected our projected revenues and profits will be affected. Our future profits are influenced by many factors, including economics, world events and changing customer preferences.
Added
In light of these uncertainties, we can provide no assurance that any mitigating actions that may become available to us, such as our ability to pass along some or all of the costs of any tariffs to some or all of our customers, will be successful. 22 Changes in the prices of supplies and raw materials could have a materially adverse effect on our business.
Added
We cannot assure you that shortages or increases in the prices of our supplies or raw materials will not have a material adverse effect on our financial condition and results of operations.
Added
Although our shares are listed on The Nasdaq Stock Market LLC, the market for our shares has demonstrated varying levels of trading activity. The current level of trading may not be sustained in the future.
Added
The lack of an active market for our shares may impair investors’ ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the fair market value of their shares and may impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire additional assets by using our shares as consideration.
Added
The trading price of our common stock has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. Our share price is highly volatile.
Added
During the period from August 10, 2023, to March 28, 2025 the closing price of our common stock ranged from a high of $155.97 per share to a low of $0.22 per share. The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor more information regarding the risks the Company faces from cybersecurity threats, see “Item 1A. Risk Factors––Risks Related to Our Business and Operations––We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks.”
Biggest changeFor more information regarding the risks the Company faces from cybersecurity threats, see “ Item 1A. Risk Factors––Risks Related to Our Business and Operations––We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks .”

Item 2. Properties

Properties — owned and leased real estate

1 edited+1 added−0 removed0 unchanged
Biggest changeITEM 2. PROPERTIES We do not own any real property. Our executive offices are located at 6800 Indian Creek Dr., Suite 1E, Miami Beach, Florida 33141. We lease our office space from a third party under a lease agreement that commenced in February 2023, and expires in February 2025 with monthly base rent payments of $850.
Biggest changeITEM 2. PROPERTIES We do not own any real property. We do not lease any real property or physical office space. We maintain a mailing address at 6538 Collins Ave. Suite 344, Miami Beach, Florida 33141. We are a remote-first company, meaning that our employees, consultants and contactors work remotely.
Added
Substantially all of our executive team meetings are held virtually, with meetings occasionally held in-person at locations that are not our offices. We hold all of our stockholder meetings virtually. As a result of this strategy, we do not maintain corporate headquarters or principal executive offices. We believe this arrangement is presently adequate to meet the Company’s operational needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS There are no material proceedings to which any director or officer, or any associate of any such director or officer, is a party that is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries.
Biggest changeThere are no material proceedings to which any director or officer, or any associate of any such director or officer, is a party that is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries.
Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Item 4. MINE SAFETY DISCLOSURES. Not Applicable. 35 Part II
Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Item 4. MINE SAFETY DISCLOSURES. Not Applicable. 37 Part II
Added
ITEM 3. LEGAL PROCEEDINGS There are no material pending legal proceedings, to which the Company or any of its subsidiaries is a party or of which any of our property is the subject.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

12 edited+10 added−14 removed6 unchanged
Biggest changePlan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted- average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column Equity compensation plans approved by security holders 29,250 $ 197.16 42,000 Equity compensation plans not approved by security holders - - - Total 29,250 $ 197.16 42,000 Recent Sales of Unregistered Securities From April to September 2023, the Company conducted a private placement of and entered into certain subscription agreements with several accredited investors with a number of (i) accredited investors as defined in Section 2(a)(15) of the Securities Act, and Rule 501 promulgated thereunder, or (ii) non-U.S. persons made in compliance with the provisions of Regulation S promulgated under the Securities Act.
Biggest changePlan Category Number of securities to be issued upon exercise of outstanding options, and rights Weighted- average exercise price of outstanding options, and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column Equity compensation plans approved by security holders 209,845 $ 10.90 2,773,750 Equity compensation plans not approved by security holders - - - Total 209,845 $ 10.90 2,773,750 Recent Sales of Unregistered Securities On May 19, 2024, the Company entered into Share Exchange Agreement with a Director (the “Seller”) of Cannon Estate Winery Ltd., a British Columbia corporation to consummate an acquisition of approximately 9.99% of Common Shares of Cannon by the Company.
We believe that the number of beneficial owners of our common stock is greater than the number of record holders, because a number of our shares of our are held through brokerage firms in “street name.” Dividend Policy We have never declared or paid any cash dividend on our common stock.
We believe that the number of beneficial owners of our common stock is greater than the number of record holders, because a number of shares of our common stock are held through brokerage firms in “street name.” Dividend Policy We have never declared or paid any cash dividend on our common stock.
The 2021 Plan is administered by our Compensation Committee who shall have the power and authority to grant awards consistent with the terms of the 2021 Plan, including the power and authority: (i) to select the individuals to whom awards may from time to time be granted; (ii) to determine the time or times of grant, and the extent, if any, of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, unrestricted stock awards, cash-based awards, and dividend equivalent rights, or any combination of the foregoing, granted to any one or more grantees; (iii) to determine the number of shares of stock to be covered by any award; (iv) to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the 2021 Plan, of any award, which terms and conditions may differ among individual awards and grantees, and to approve the forms of award certificates; (v) to accelerate at any time the exercisability or vesting of all or any portion of any award; (vi) subject to the provisions of the 2021 Plan to extend at any time the period in which stock options may be exercised; and (vii) at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the 2021 Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the 2021 Plan and any award (including related written instruments); to make all determinations it deems advisable for the administration of the 2021 Plan; to decide all disputes arising in connection with the 2021 Plan; and to otherwise supervise the administration of the 2021 Plan.
The 2021 Plan is administered by our Compensation Committee which shall have the power and authority to grant awards consistent with the terms of the 2021 Plan, including the power and authority: (i) to select the individuals to whom awards may from time to time be granted; (ii) to determine the time or times of grant, and the extent, if any, of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, unrestricted stock awards, cash-based awards, and dividend equivalent rights, or any combination of the foregoing, granted to any one or more grantees; (iii) to determine the number of shares of stock to be covered by any award; (iv) to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the 2021 Plan, of any award, which terms and conditions may differ among individual awards and grantees, and to approve the forms of award certificates; (v) to accelerate at any time the exercisability or vesting of all or any portion of any award; (vi) subject to the provisions of the 2021 Plan to extend at any time the period in which stock options may be exercised; and (vii) at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the 2021 Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the 2021 Plan and any award (including related written instruments); to make all determinations it deems advisable for the administration of the 2021 Plan; to decide all disputes arising in connection with the 2021 Plan; and to otherwise supervise the administration of the 2021 Plan.
The Company engaged and entered into an agreement with Dominari Securities LLC (“Dominari”) on August 28, 2023, to effect the share buyback program. The share buyback program is expected to commence on, or about, September 8, 2023. Dominari shall determine, in its sole discretion, the timing, amount, prices and manner of purchase of securities during such period.
The Company engaged and entered into an agreement with Dominari Securities LLC (“Dominari”) on August 28, 2023, to effect the share buyback program. The share buyback program commenced on, or about, September 8, 2023. Dominari shall determine, in its sole discretion, the timing, amount, prices and manner of purchase of securities during such period.
Securities Authorized for Issuance under Equity Compensation Plans On February, 2021, our board of directors and our stockholders approved our 2021 Equity Incentive Plan (the “2021 Plan”) as amended by Amendment No. 1 which was approved by our board of directors and stockholders on March 10, 2023.
Securities Authorized for Issuance under Equity Compensation Plans In February 2021 our Board of Directors and our stockholders approved our 2021 Equity Incentive Plan (the “2021 Plan”) as amended by Amendment No. 1 which was approved by our Board of Directors and stockholders on March 10, 2023, and by Amendment No.2 (“Second Plan Amendment”) which was approved by our Board and stockholders.
All decisions and interpretations of the administrator shall be binding on all persons, including the Company and the 2021 Plan grantees. 36 The table below sets forth information as of December 31, 2023.
All decisions and interpretations of the administrator shall be binding on all persons, including the Company and the 2021 Plan grantees. 38 The table below sets forth information as of December 31, 2024.
The share buyback program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or discontinued at any time. During the year ended December 31, 2023, 576,713 shares of the Company were purchased at a cost average of $2.5 per share in accordance with Rule 10b-18.
The share buyback program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or discontinued at any time. During the year ended December 31, 2023, 865,070 shares of the Company were purchased at a cost average of $1.7 per share in accordance with Rule 10b-18.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is trading on the Nasdaq Capital Market under the symbol “LQR.” Holders As of April 1, 2024, we had approximately 25 individual shareholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information Our common stock is trading on the Nasdaq Capital Market under the symbol “YHC.” Holders As of March 31, 2025, we had approximately 30 individual shareholders of record of our common stock.
In January 2024, the Company purchased a total of 190,628 shares of the Company’s common stock at an average price of $2.9 per share. (2) Average price paid per share excludes costs associated with the repurchases.
In January 2024, the Company purchased a total of 190,628 shares of the Company’s common stock at an average price of $2.9 per share. (2) Average price paid per share excludes costs associated with the repurchases. Use of Proceeds from our Initial Public Offering of Common Stock Not applicable. 40
At the time of issuance, all of the foregoing securities were deemed to be restricted securities for purposes of the Securities Act and the certificates representing such securities bore legends to that effect. 37 Purcha ses of Equity Securities by Issuer and Its Affiliates In August 2023, the Company’s Board approved a share buyback program under which the Company can repurchase up to 20% of its common stock in open market and privately negotiated purchases, in compliance with Rule 10b-18 under the Exchange Act.
Purchases of Equity Securities by Issuer and Its Affiliates In August 2023, the Company’s Board of Directors approved a share buyback program under which the Company can repurchase up to 20% of its common stock in open market and privately negotiated purchases, in compliance with Rule 10b-18 under the Exchange Act.
The types of awards permitted under the 2021 Plan includes nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other awards. Each option shall be exercisable at such times and subject to such terms and conditions as the Board may specify.
As of March 31, 2025, the maximum number of shares of our common stock that may be subject to awards under the 2021 Plan is 3,500,000. The types of awards permitted under the 2021 Plan include nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other awards.
The 2021 Plan governs equity awards to our employees, directors, officers, consultants and other eligible participants. The maximum number of shares of our common stock that may be subject to awards under the 2021 Plan is 2,850,000 (or 71,250 on a post-reverse split basis).
The 2021 Plan governs equity awards to our employees, directors, officers, consultants and other eligible participants. In accordance with the Second Plan Amendment, which was approved by the stockholders of the Company on December 19, 2024 the total number of shares that may be subject to awards under the 2021 Plan was increased by additional 2,928,750 shares.
Removed
Pursuant to the agreements, the Company issued 23,875 shares of common stock at $40 per share for a total of $955,000. In June 2023, the Company entered into advisor agreements with certain advisors, pursuant to which the advisors provided business and corporate advice in connection with the initial public offering to the Company.
Added
In addition, the 2021 Plan allows for an automatic increase of number of shares subject to the 2021 Plan at the beginning of each fiscal year beginning with the 2025 fiscal year, in an amount equal to the least of (a) 500,000 shares, (b) a number of shares equal to four percent (4%) of the total number of shares of all classes of common stock of the Company outstanding on the last day of the immediately preceding fiscal year, and (c) such number of shares determined by the administrator of 2021 Plan no later than the last day of the immediately preceding fiscal year.
Removed
In consideration for the advisor’s services, the Company issued 12,500 shares of common stock to six individuals and entities, for an aggregate of 75,000 shares. The Company recorded an expense of $3,000,000, or fair value of $40 per share, pertaining to these issuances, which is included in general and administrative expense in the statements of operations.
Added
Each option shall be exercisable at such times and subject to such terms and conditions as the Board of Directors of the Company may specify.
Removed
In June 2023, the Company entered into a Cancellation Agreement with four stockholders, who each owned 18,750 shares of common stock or an aggregate of 75,000 shares. The stockholders purchased these shares from the founder, Sean Dollinger, pursuant to a stock purchase agreement on January 12, 2023, between Mr. Dollinger and each of these four stockholders.
Added
Pursuant to the Agreement, the Seller transferred and delivered to the Company 113,085 of the Common Shares of Cannon and in exchange the Company issued and deliver to the Seller 750,000 shares of the Company’s common stock.
Removed
The Company repurchased the shares for $18,000. In August 2023, the board of directors approved an issuance of and the Company issued an aggregate total of 62,501 shares of the Company’s common stock under the LQR House Inc.
Added
On October 15, 2024, the Company entered into Lazar Purchase Agreement pursuant to which Company issued to Lazar 1,101,818 shares of common stock at a price of $0.55 per share for aggregate proceeds of $606,000. 39 On December 19, 2024 the Company entered into independent director agreements with newly elected and appointed directors Mr. Yilin Lu, Mr.
Removed
Stock Option and Incentive Plan (“2021 Plan”) to certain consultants with whom the Company entered into independent contractor agreements, in consideration for their providing consulting services to the Company.
Added
Hong Chun Yeung, Mr. Lijun Chen and Dr. Jing Lu, pursuant to which each director shall receive an equity compensation in a form of 50,000 restricted stock units, vesting in eight (8) equal quarterly installments commencing in the first quarter of 2025, provided that such directors remain in continuous service of the Company on such dates granted.
Removed
In August, 2023 the Company granted 31,250 restricted stock units (the “Director RSUs”) to directors Sean Dollinger, Darren Collins, Guy Dollinger, Holiday Russell, James Huber, and James O’Brien which were to vest in eight (8) equal quarterly installments commencing on October 1, 2023.
Added
In October and December 2024, three directors Jay Dhaliwal, James Huber and Gary Herman resigned as a member of board. Following their resignation, the unvested restricted stock units (“RSUs”) to them were cancelled. As of December 31, 2024, total RSUs 209,845 remained outstanding.
Removed
On August 21, 2023, Jay Dhaliwal was added to the Board and was granted 500 Director RSUs which Director RSUs were to vest in eight (8) equal quarterly installments commencing on October 1, 2023. On August 30, 2023, the Board authorized deferring the vesting of the Director RSUs until such date that the 2021 Plan is amended.
Added
On December 30, 2024, the Company issued 4,352,727 shares of common stock at a price of $0.55 per share, and a five-year warrant to acquire up to 10,909,090 shares of common stock at an exercise price of $0.55 per share to the Lazar Assignees pursuant to the Lazar Purchase Agreement.
Removed
Following Darren Collins’ and Guy Dollinger’s resignations, effective, September 25, 2023, they consented to the cancelation of 1,250 Director RSUs each that they were granted and the Company effected such cancelation on October 6, 2023. As of December 31, 29,250 Director RSUs were outstanding after the cancellations.
Added
On December 30, 2024, the Company issued 636,400 shares of common stock to various investors pursuant to Securities Purchase Agreement at a price of $0.55 per share for aggregate gross proceeds of $350,020.
Removed
On September 28, 2023, the Company issued 63,766 shares of common stock as settlement for outstanding principal on notes of $950,000 and accrued interest of $171,000. These shares were issued in reliance upon the exemption contained in Regulation S.
Added
At the time of issuance, all of the foregoing securities were deemed to be restricted securities for purposes of the Securities Act and the certificates representing such securities bore legends to that effect.
Removed
Use of Proceeds from our Initial Public Offering of Common Stock On August 11, 2023, we closed our initial public offering (the “IPO”), in which we sold and issued 28,750 shares of our common stock (on a post-stock split basis), which included the exercise by the underwriters in full of the over-allotment option, at a price to the public of $200 per share.
Added
During the year ended December 31, 2024, 190,628 shares of the Company were purchased at a cost average of $2.9 per share in accordance with Rule 10b-18.
Removed
We received $4.5 million in aggregate net proceeds from our IPO after deducting underwriting discounts and commissions and other offering expenses. EF Hutton, division of Benchmark Investments, LLC was the underwriter of our IPO.
Removed
The offer and sale of all of the shares of our common stock in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333- 272660), which was declared effective by the SEC on August 9, 2023.
Removed
The net proceeds from our IPO have been used as follows: (i) for acquisitions of alcoholic beverage brands; (ii) to invest in marketing of existing brands, including SWOL; (iii) for working capital and general corporate purposes; and (iv) to compensate certain executive officers.
Removed
There has been no material change in our planned use of the net proceeds from our IPO as described in our final prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on August 10, 2023. 38

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

31 edited+21 added−9 removed24 unchanged
Biggest changeYear Ended December 31, 2023 2022 Amount % of Revenues Amount % of Revenues Revenue - services $ 474,048 42 % $ 470,359 78 % Revenue - product 646,574 58 % 130,772 22 % Total revenues 1,120,622 100 % 601,131 100 % Cost of revenue - services 351,823 31 % 668,654 111 % Cost of revenue - product 563,775 50 % 134,490 22 % Total cost of revenue 915,598 82 % 803,144 134 % Gross profit (loss) 205,024 18 % (202,013 ) -34 % Operating expenses: General and administrative 11,426,747 1,020 % 985,011 164 % Sales and marketing 2,480,001 221 % 655,151 109 % Impairment expense 1,875,000 167 % - 0 % Total operating expenses 15,781,748 1,408 % 1,640,162 273 % Loss from operations (15,576,724 ) -1,390 % (1,842,175 ) -306 % Total other expense (171,000 ) -15 % - 0 % Net loss $ (15,747,724 ) -1,405 % $ (1,842,175 ) -306 % Revenue For the years ended December 31, 2023 and 2022, service revenues were $474,048 and $470,359, respectively.
Biggest changeYear Ended December 31, 2024 2023 Var. $ Var. % Revenue - services $ 117,965 $ 474,048 $ (356,083 ) -75 % Revenue - product 2,383,695 646,574 1,737,121 269 % Total revenues 2,501,660 1,120,622 1,381,038 123 % Cost of revenue - services 178,851 351,823 (172,972 ) -49 % Cost of revenue - product 2,635,984 563,775 2,072,209 368 % Total cost of revenue 2,814,835 915,598 1,899,237 207 % Gross profit (loss) (313,175 ) 205,024 (518,199 ) -253 % Operating expenses: General and administrative 14,556,220 11,426,747 3,129,473 27 % Sales and marketing 3,617,924 2,480,001 1,137,923 46 % Impairment of intangible asset - 1,875,000 (1,875,000 ) -100 % Total operating expenses 18,174,144 15,781,748 2,392,396 15 % Loss from operations (18,487,319 ) (15,576,724 ) (2,910,595 ) 19 % Other income (expense): Interest expense - (171,000 ) 171,000 -100 % Impairment of investment (4,500,000 ) - (4,500,000 ) 100 % Other income 227,467 - 227,467 100 % Realized gain/(loss) on securities 5,674 - 5,674 100 % Total other income (4,266,859 ) (171,000 ) 4,095,859 2,395 % Provision for income taxes - - - Net loss $ (22,754,178 ) $ (15,747,724 ) $ (7,006,454 ) 44 % Revenue For the years ended December 31, 2024 and 2023, service revenues were $117,965 and $474,048, respectively.
Pursuant to an asset purchase agreement, dated May 31, 2021, between us and Dollinger Holdings LLC, LQR House purchased all of the right, title and interest in all trademarks regardless of registration status for Soleil Vino and all associated trade dress and intellectual property rights, all labels, logos and other branding bearing the Soleil Vino marks or any mark substantially similar to the same, and all website and all related digital and social media content including but not limited to influencer networks, http://www.soleilvino.com , and all related content, and all related sales channels was transferred. ● LQR House Marketing is a marketing service in which we utilize our marketing expertise to help our wholly owned brands and third-party clients market their products to consumers.
Pursuant to an asset purchase agreement, dated May 31, 2021, between us and Dollinger Holdings LLC, we purchased all of the right, title and interest in all trademarks regardless of registration status for Soleil Vino and all associated trade dress and intellectual property rights, all labels, logos and other branding bearing the Soleil Vino marks or any mark substantially similar to the same, and all website and all related digital and social media content including but not limited to influencer networks, http://www.soleilvino.com , and all related content, and all related sales channels was transferred. ● LQR House Marketing is a marketing service in which we utilize our marketing expertise to help our wholly owned brands and third-party clients market their products to consumers.
We follow ASC 850, Related Party Disclosures , for the identification of related parties and disclosure of related party transactions. 44 Acquisitions, Goodwill and Other Intangible Assets The Company allocates the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.
We follow ASC 850, Related Party Disclosures , for the identification of related parties and disclosure of related party transactions. 46 Acquisitions, Goodwill and Other Intangible Assets The Company allocates the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.
At the heart of our brand is a commitment to exceptional customer service, driving us to continuously innovate our operations for an enhanced shopping experience. From user-friendly website navigation and a top-rated mobile app to detailed order tracking and personalized product recommendations, we are revolution izing the online alcohol shopping experience, ensuring customer satisfaction remains paramount in all our endeavors.
At the heart of our brand is a commitment to exceptional customer service, driving us to continuously innovate our operations for an enhanced shopping experience. From user-friendly website navigation and a top-rated mobile app to detailed order tracking and personalized product recommendations, we are revolutionizing the online alcohol shopping experience, ensuring customer satisfaction remains paramount in all our endeavors.
Related Party Transactions See Note 8 to the accompanying consolidated financial statements for further disclosure. 43 Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Related Party Transactions See Note 9 to the accompanying consolidated financial statements for further disclosure. 45 Off-Balance Sheet Arrangements We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
We intend to pursue opportunistic acquisitions with existing alcohol brands and companies that have distribution licenses and physical storage locations and acquire technology that complements our business. 40 Results of Operations Comparison of Years Ended December 31, 2023 and 2022 The following table sets forth key components of our results of operations during the years ended December 31, 2023 and 2022.
We intend to pursue opportunistic acquisitions with existing alcohol brands and companies that have distribution licenses and physical storage locations and acquire technology that complements our business. 42 Results of Operations Comparison of Years Ended December 31, 2024 and 2023 The following table sets forth key components of our results of operations during the years ended December 31, 2024 and 2023.
Principal Factors Affecting Our Financial Performance Our operating results are primarily affected by the following factors: ● our ability to acquire new customers and users or retain existing customers and users; ● our ability to offer competitive pricing; ● our ability to broaden product or service offerings; ● industry demand and competition; ● our ability to leverage technology and use and develop efficient processes; ● our ability to attract and maintain a network of influencers with a relevant audience; ● our ability to attract and retain talented employees and contractors; and ● market conditions and our market position.
Principal Factors Affecting Our Financial Performance Our operating results are primarily affected by the following factors: ● our ability to acquire new customers and users or retain existing customers and users; ● our ability to offer competitive pricing; ● our ability to broaden product or service offerings; ● industry demand and competition; ● our ability to leverage technology and use and develop efficient processes; ● our ability to attract and maintain a network of influencers with a relevant audience; ● our ability to attract and retain talented employees and contractors; and ● market conditions and our market position. ● ability to make profitable investments in complimentary business.
Contractual Obligations and Related Party Transactions Funding Commitment Agreement On November 1, 2023, the Company entered into a Funding Commitment Agreement with KBROS, the Product Handler pursuant to the Product Handling Agreement as defined in Note 4.
Contractual Obligations Funding Commitment Agreement On November 1, 2023, the Company entered into a Funding Commitment Agreement with KBROS, the Product Handler pursuant to the Product Handling Agreement as defined in Note 4.
The CWS Platform is a leading American online retailer specializing in alcohol products, striving to become the most trusted and convenient destination for online alcohol purchases.
The CWS Platform is an American online retailer specializing in selling alcohol products, striving to become the most trusted and convenient destination for online alcohol purchases.
Impairment Expense Upon the acquisition of the CWS Platform, the Company determined that the license under the CWS Agreement was no longer applicable as the Company now maintained ownership over the Platform and the relevant marketing efforts. As such, the Company recorded an impairment of the remaining carrying value of $1,875,000.
Upon the acquisition of the CWS Platform, the Company determined that the license under the CWS Agreement was no longer applicable as the Company now maintained ownership over the Platform and the relevant marketing efforts. As such, during the year ended December 31, 2023, the Company recorded an impairment of the remaining carrying value of $1,875,000.
Tequila bearing the “SWOL” trademark is produced by Casa Cava de Oro S.A., an authentic tequila distillery in Jalisco, Mexico, imported into the United States through Rilo by CWS and sold to retail customers in the United States via the CWS Platform and in CWS’s physical locations. 39 ● Vault is the exclusive membership program for the CWS Platform, which is offered and managed by the Company.
Tequila bearing the “SWOL” trademark is produced by Casa Cava de Oro S.A., an authentic tequila distillery in Jalisco, Mexico, imported into the United States through Rilo Import & Export (“Rilo”) by Country Wine & Spirits LLC (“CWS”) and sold to retail customers in the United States via the CWS Platform and in CWS’s physical locations. 41 ● Vault is the exclusive membership program for the CWS Platform, which is offered and managed by the Company.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The following products and services constitute the core elements of our business model and allow us to serve various types of customers in the alcohol industry, including individual consumers, wholesalers, and third-party alcohol brands: ● SWOL Tequila is a limited-edition blend of Añejo Tequila made in exclusive batches of up to 10,000 bottles and represents the first installment under our “SWOL” trademark with application number 2345291 and registration number 2141431 which was originally owned by Dollinger Innovations and transferred over to us pursuant to the Tequila Asset Purchase Agreement.
The following products and services constitute the core elements of our business model and allow us to serve various types of customers in the alcohol industry, including individual consumers, wholesalers, and third-party alcohol brands: ● SWOL Tequila is a limited-edition blend of tequila made in exclusive batches of up to 10,000 bottles which was originally owned by Dollinger Innovations and transferred over to us pursuant to the Tequila Asset Purchase Agreement.
The Company’s ability to continue as a going concern for the next twelve months is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, or to obtain additional capital financing to support current negative cash flow trends.
The Company’s ability to continue as a going concern for the next twelve months is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, or to obtain additional capital to fund operations through debt and/or equity financings.
Pursuant to this agreement, the Company commits to provide annual funding to the Product Handler from time to time in the minimum amount of $2,500,000 to enable the Product Handler to purchase inventory from Company-approved vendors (“Vendors”) and for other purposes set forth in the Product Handling Agreement.
Pursuant to this agreement, the Company committed to provide annual funding to the Product Handler from time to time in the minimum amount of $2,500,000 to enable the Product Handler to purchase inventory from Company-approved vendors (“Vendors”).
No assurance can be given that the Company will be successful in these efforts. 42 Cash Flow Activities The following table presents selected captions from our condensed statement of cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Net cash used in operating activities $ (9,113,855 ) $ (918,197 ) Net cash provided used in investing activities $ (5,342,574 ) $ (190,339 ) Net cash provided by financing activities $ 21,513,212 $ - Net change in cash and cash equivalents $ 7,056,783 $ (1,108,536 ) Net Cash Used in Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $9,113,855, primarily due to our net loss of $15,747,724, partially offset by non-cash charges of $8,727,481 and $2,093,612 in cash used in operating assets and liabilities.
No assurance can be given that the Company will be successful in these efforts. 44 Cash Flow Activities The following table presents selected captions from our condensed statement of cash flows for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Net cash used in operating activities $ (6,618,417 ) $ (9,113,855 ) Net cash provided by (used in) investing activities $ 675,674 $ (5,342,574 ) Net cash provided by financing activities $ 4,265,184 $ 21,513,212 Net change in cash and cash equivalents $ (1,677,559 ) $ 7,056,783 Net Cash Used in Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $6,618,417, primarily due to our net loss of $22,754,178, partially offset by non-cash charges of $7,204,922 and $8,930,839 in cash provided by operating assets and liabilities.
The Company has not generated profits since inception, has sustained net losses of $15,747,724 and $1,842,175 for the years ended December 31, 2023 and 2022, and has negative cash flows from operations for the years ended December 31, 2023 and 2022.
The Company has not generated profits since inception, has sustained net losses of $22,754,178 and $15,747,724 for the years ended December 31, 2024 and 2023, and has negative cash flows from operations $6,618,417 and $9,113,855 for the years ended December 31, 2024 and 2023 respectively.
The Company may combine all of the Company’s advances to Product Handler or on Product Handler’s behalf, whether under this Agreement or any other agreement. The Company may, without notice to Product Handler, elect not to advance funding for any inventory sold by particular Vendors with respect to which the Company reasonably feels insecure.
The Company may, without notice to Product Handler, elect not to advance funding for any inventory sold by particular Vendors with respect to which the Company reasonably feels insecure. This agreement concerns a funding commitment, and not the purchase of products from Product Handler or Vendors.
We believe that the marketing and brand management services we provide to our wholly owned and third-party clients will increase brand recognition thereof, and drive sales thereof through our e-commerce platform partner. The Services and Brands We Market LQR House is an American online retailer of alcohol products.
Additionally, we are in the process of establishing an exclusive wine club. We believe that the marketing and brand management services we provide to our wholly owned and third-party clients will increase brand recognition thereof, and drive sales thereof through our e-commerce platform partner.
Liquidity and Capital Resources As of December 31, 2023 and 2022, we had cash and cash equivalents of $7,064,348 and $7,565, respectively. To date, we have financed our operations primarily through issuances of common stock and sales of our products and services.
Net Loss Net loss for the years ended December 31, 2024 and 2023 was $22,754,178 and $15,747,724, respectively. Liquidity and Capital Resources As of December 31, 2024 and 2023, we had cash and cash equivalents of $5,386,789 and $7,064,348, respectively. To date, we have financed our operations primarily through issuances of common stock and sales of our products and services.
In 2023, the Company recorded $5,552,500 in non-cash stock-based compensation expense due to the issuance of common shares for services and $1,091,648 pertaining to the issuance of restricted stock units.
In 2024, the Company recorded $2,533,256 in non-cash stock-based compensation expense pertaining to the issuance of restricted stock units as compared to $1,091,648 recorded in 2023.
Service revenues are earned as we contract with third-party alcoholic beverage brands to utilize access to the CWS Platform, as well as vault memberships beginning in late 2022. Service revenues increased by $3,689 as we slightly grew our marketing customer base with beverage brands. For the year ended December 31, 2023, product revenues were $646,574 compared to $130,772 in 2022.
Service revenues are earned as we contract with third-party alcoholic beverage brands to utilize access to the CWS Platform, as well as vault memberships. Service revenues decreased by $356,083 as more focus was emphasized on the CWS Platform. For the year ended December 31, 2024, product revenues were $2,383,695 compared to $646,574 in the similar 2023.
Business Overview Our company, LQR House Inc., intends to become the full-service digital marketing and brand development face of the alcoholic beverage space. We also intend to integrate the supply, sales, and marketing facets of the alcoholic beverage space into one easy to use platform and become the one-stop-shop for everything related to alcohol.
We also intend to integrate the supply, sales, and marketing facets of the alcoholic beverage space into one easy to use platform and become the one-stop-shop for everything related to alcohol. To date, our primary business includes the development of premium limited batch spirit brands and marketing internal and external brands through our ownership of the CWS Platform.
Net Cash Provided Used In Investing Activities Net cash used in investing activities for the years ended December 31, 2023 and 2022 were $5,342,574 and $190,339, respectively, pertaining to repayments from (advances to) CWS of $137,426 and ($190,339), and deposits in escrow of $5,470,000 and acquisition of CWS Platform of $10,000 in 2023.
In 2023, the Company had repayments from CWS of $137,426, and deposits in escrow of $5,470,000 and acquisition of CWS Platform of $10,000 in 2023. Net Cash Provided by Financing Activities Net cash provided by financing activities for the years ended December 31, 2024 and 2023 was $4,265,184 and $21,513,212, respectively.
Net cash used in operating activities for the year ended December 31, 2022 was $918,197, primarily due to our net loss of $1,842,175, partially offset by non-cash charges of $567,875 and $356,103 in cash provided by operating assets and liabilities.
Net cash used in operating activities for the year ended December 31, 2023 was $9,113,855, primarily due to our net loss of $15,747,724, partially offset by non-cash charges of $8,727,481 and $2,093,612 in cash used in operating assets and liabilities.
The increase was due to $485,571 in revenues generated from the CWS Platform after the acquisition in November 2023. Cost of Revenue For the years ended December 31, 2023 and 2022, service cost of revenues was $351,823 and $668,654, respectively.
The increase of $1,737,121 in revenues is due to product sales via the CWS Platform after the acquisition in November 2023. Cost of Revenue and Gross Profit (Loss) For the years ended December 31, 2024 and 2023, service cost of revenues was $178,851 and $351,823, respectively. Cost of revenues decreased by $172,972 in 2024 due to decrease in service revenue.
In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.
Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC. Business Overview Our company, LQR House Inc., intends to become the full-service digital marketing and brand development face of the alcoholic beverage space.
The increase of $1,824,850 was primarily due to advertising and marketing and investor relation campaigns the Company entered into in the third and fourth quarter of 2023.
Sales and Marketing For the years ended December 31, 2024 and 2023, sales and marketing expenses were $3,617,924 and $2,480,001, respectively. The increase of $1,137,923 was primarily due to advertising and marketing and investor relation campaigns the Company entered into in late 2023, which extended throughout 2024.
The discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this Registration Statement and the audited financial statements and the other information set forth in the Registration Statement.
The discussion should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. In addition to historical information, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties.
The increase was due to product and shipping costs associated with the CWS Platform acquisition in November 2023. General and Administrative For the years ended December 31, 2023 and 2022, general and administrative expenses were $11,426,747 and $985,011, respectively.
The increase was due to product and shipping costs associated with the product sales via the CWS Platform, which was acquired in November 2023. Gross profit (loss) was ($313,175) and $205,024 for the years ended December 31, 2024 and 2023. The Company has incurred gross losses in 2024 as it transitions its strategies from marketing to the CWS Platform.
Cost of revenues decreased by $316,831 in 2023 due to our ability to support marketing campaigns via dedicated personnel and ceased certain digital ad costs to support campaigns. Product cost of revenues was $563,775 and $134,490 in the years ended December 31, 2023 and 2022, respectively.
In 2023, cost of revenues included amortization of the marketing license, which was impaired as of December 31, 2023. Product cost of revenues was $2,635,984 and $563,775 in the years ended December 31, 2024 and 2023, respectively.
Removed
To date, our primary business includes the development of premium limited batch spirit brands and marketing internal and external brands through our ownership of the CWS Platform. Additionally, we are in the process of establishing an exclusive wine club.
Added
In May 2024, we acquired a minority stake of common shares of Cannon Estate Winery Ltd., a British Columbia corporation, an owner of Cannon Estate Winery. In June 2024, we acquired a minority stake of common shares of DRNK Beverage Corp., a British Columbia corporation (which became Chase Mocktails Ltd.), operating in the non-alcoholic and ready-to-drink beverage markets.
Removed
General and administrative expenses also increased due to professional fees, personnel costs and other public company expenses as our operations scaled upon the IPO. 41 Sales and Marketing For the years ended December 31, 2023 and 2022, sales and marketing expenses were $2,480,001 and $655,151, respectively.
Added
As of December 31, 2024, the Company has recorded an impairment based on its evaluation of the investee. Refer to the consolidated financial statements for further disclosure. The Services and Brands We Market LQR House is an American online retailer of alcohol products.
Removed
Other Expense For the years ended December 31, 2023 and 2022, other expense was $171,000 and $0, respectively. The other expense in 2023 was due to interest on the Company’s note payable issued in August and September 2023. Net Loss Net loss for the years ended December 31, 2023 and 2022 was $15,747,724 and $1,842,175, respectively.
Added
Management is exploring various strategies, including customer acquisition and new partnerships, to increase volume in order to achieve better gross margins in 2025. 43 General and Administrative For the years ended December 31, 2024 and 2023, general and administrative expenses were $14,556,220 and $11,426,747, respectively. General and administrative expenses increased by $3,129,473 in 2024 as compared to 2023.
Removed
The Company has raised funds from the IPO (Note 1) and an additional $16.6 million from its public offerings in October and November 2023 (see Note 9).
Added
General and administrative expenses also increased due to personnel costs as the Company entered into several settlement, bonus and retention agreements totaling $8,021,000 in late 2024 most of which were paid to insiders and related parties of the Company. Bonus and retention agreements reflect strategic decisions made by the Company to retain key talent and incentivize critical personnel.
Removed
However, the Company expects that its cash and cash equivalents as of the date of issuance of these unaudited interim condensed financial statements may not be sufficient to fund its operating expenses and acquisition plans for at least one year.
Added
These bonus and retention agreements were based on strategic decisions made by the Company to retain key talent and incentivize critical personnel. These were designed to ensure continuity in leadership and support the Company’s long-term goals, even though the Company is not currently profitable.
Removed
Net Cash Provided By Financing Activities Net cash provided in financing activities for the years ended December 31, 2023 and 2022 was $21,513,212 and $0, respectively.
Added
Lastly, The Company determined it was no longer pursuing the website development services as per its October 2023 agreement with X-Media. As such, the full amount of the prepaid was written of during the year, representing an expense of $2,150,000. The amount was included in sales and marketing expenses in the consolidated statements of operations.
Removed
This Agreement concerns funding commitment, and not the purchase of Products from Product Handler or Vendors.
Added
Impairments For the year ended December 31, 2024, the Company recognized an impairment expense $4,500,000 related to its investment in DRNK Beverage Corp, which was included in other income (expense) in the consolidated statements of operations. The impairment was triggered by a significant decline in the fair value of the Company’s investment upon management’s review and monitoring of the investee.
Removed
Significant estimates and assumptions reflected in these financial statements include, but are not limited to the valuation of assets acquired and liabilities assumed pursuant to business combinations (see Note 4 to the financial statements) and stock-based compensation as it applies to the private company valuation of common stock. Actual results may differ from these estimates under different assumptions or conditions.
Added
During the year ended December 31, 2024, the Company issued an aggregate of 1,518,188 shares of common stock pursuant to at-the-market offering agreement, dated September 13, 2024, between the Company and H.C. Wainwright & Co., LLC, for net proceeds of $1,599,814. The Company paid to H.C.
Removed
Stock-Based Compensation Stock-based compensation is accounted for in accordance with ASC Topic 718-10, Compensation-Stock Compensation (“ASC 718-10”).
Added
Wainwright & Co., LLC, as the sales agent a compensation with respect to sale of such shares in the amount of $48,018. In 2025, the Company has issued 13,816,082 shares of common stock pursuant to its ATM Agreement for net proceeds of $5,014,022.
Added
The Company requires additional capital to operate and expects losses to continue for the foreseeable future. These factors raise substantial doubts about the Company’s ability to continue as a going concern.
Added
The Company’s ability to continue as a going concern until it reaches profitability is dependent upon its ability to generate cash from operating activities and to raise additional capital to fund operations. Management is exploring various strategies, including customer acquisition and new partnerships, to increase volume in order to achieve better gross margins and profitability.
Added
The Company continues to seek investment and acquisition opportunities which will help achieve its strategies.
Added
Our failure to raise additional capital could have a negative impact on not only our financial condition but also our ability to execute our business plan.
Added
Net Cash Provided by (Used In) Investing Activities Net cash provided by (used in) investing activities for the years ended December 31, 2024 and 2023 were 675,674 and ($5,342,574), respectively. In 2024, the Company purchased marketable securities of $7,758,523, and sold securities of $7,764,197. The Company also received $670,000 back from an investment it was no longer pursuing.
Added
In 2024, the Company received $3,350,020 in proceeds from private placement offerings, $1,543,079 in net proceeds pursuant to public offerings, incurred $80,500 in offering cost. The Company paid $547,415 for repurchase of shares.
Added
In October, 2024, the Company entered into a settlement and release agreement with KBROS, and its controlling stockholder, for an aggregate amount equal to $4,100,000, which is included in general and administrative expenses in the consolidated statements of operations. As of December 31, 2024, $3,600,000 remained unpaid and was included as accrued expenses on the consolidated balance sheet.
Added
Of this amount, $1,800,000 was paid in 2025 and $1,800,000 remained unpaid as of issuance date of these consolidated financial statements. The Company no longer maintains its funding commitment pursuant to the October 2024 settlement agreement.
Added
Investments, at Cost In accordance with FASB ASC Subtopic 321, Investments – Others – Cost Method Investments , investments where the Company does not have a significant influence are accounted for at cost.
Added
The Company reviews all material investments on an annual basis to determine whether a significant event or change in circumstances has occurred that may have an adverse effect on the fair value of the investment. In the event the fair value of the investment declines below the cost basis, the Company records an impairment.
Added
As of December 31, 2024, the Company recognized an impairment expense of $4,500,000 related to its investment in DRNK Beverage Corp, which was recorded within other income (expense) in the consolidated statements of operations. This impairment was triggered by company specific information and progress of the investee against expectations.
Added
The impairment also reflects the ongoing challenges in the marketplace and the reduced prospects for recovery of the carrying value of the investment. The Company continues to monitor the situation and will assess the need for any further adjustments in future periods. Stock-Based Compensation Stock-based compensation is accounted for in accordance with ASC Topic 718-10, Compensation-Stock Compensation (“ASC 718-10”).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 45 Item 8. Financial Statements and Supplementary Data 45 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 45 Item 9A. Controls and Procedures 45
Biggest changeItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 41 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 47 Item 8. Financial Statements and Supplementary Data 47 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 47 Item 9A. Controls and Procedures 47

Other YHC 10-K year-over-year comparisons