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What changed in LQR House Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LQR House Inc.'s 2024 and 2025 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 2025 report.

+295 added−273 removedSource: 10-K (2026-04-15) vs 10-K (2025-03-31)

Top changes in LQR House Inc.'s 2025 10-K

295 paragraphs added · 273 removed · 154 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

60 edited+37 added−25 removed122 unchanged
Biggest changeThe Company has raised funds from the IPO and an additional $16.6 million from its public offerings in October and November 2023. 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.
Biggest changeDuring the year ended December 31, 2025, the Company raised significant capital through multiple transactions: (i) net proceeds of $43,199,134 from the sale of common stock pursuant to its at-the-market (“ATM”) offering program; (ii) net proceeds of $6,078,701 from the sale of common stock pursuant to registered direct offerings; and (iii) proceeds of $4,051,415 from the exercise of warrants.
Navigating these will require growth opportunities to be assessed on a market, category and price-tier basis, with a more nuanced approach than was previously needed.” We believe the following trends will continue to shape the alcoholic beverage market (IWSR, Five Key Trends Shifting the Beverage Alcohol Market in 2025 , February 2025; Auguste Escoffier School of Culinary Arts, 2025 Alcohol and Beverage Trends: Key Statistics on What’s Pouring in Bars and Homes, January 2025): ● The rise of casual consumption.
Navigating these will require growth opportunities to be assessed on a market, category and price-tier basis, with a more nuanced approach than was previously needed.” 7 We believe the following trends will continue to shape the alcoholic beverage market (IWSR, Five Key Trends Shifting the Beverage Alcohol Market in 2025 , February 2025; Auguste Escoffier School of Culinary Arts, 2025 Alcohol and Beverage Trends: Key Statistics on What’s Pouring in Bars and Homes, January 2025): ● The rise of casual consumption.
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.
One potential source of acquisitions would include approaching existing marketing clients to gauge their interest in becoming a majority owned subsidiary of our company. ● Technologies. We will also seek to acquire applications, analytics and distribution tools that can be utilized to complement our existing operations.
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.
The SWOL Añejo Tequila is currently priced at $89.99 (MRSP). ● 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.
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.
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. 13 Intellectual Property We consider intellectual property to be important to the operation of our business, and critical to driving growth in our commercial revenue.
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.
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. 12 ● Direct Inbound Lead Generation.
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.
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. 15
The SWOL Peach Tequila is currently priced at $79.99 (MRSP). ● SWOL Cristalino Tequila is a crystalline tequila bottled glass blown flasks, inscribed with a unique ID number and adorned with our patch that displays a unique label specific to the Cristalino Tequila line.
The SWOL Peach Tequila is currently priced at $79.99 (MRSP). 9 ● SWOL Cristalino Tequila is a crystalline tequila bottled glass blown flasks, inscribed with a unique ID number and adorned with our patch that displays a unique label specific to the Cristalino Tequila line.
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.
ITEM 1. BUSINESS Overview Our company, LQR House Inc., a Delaware 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.
This approval marked the Company’s entry into the Canadian market, starting with a purchase order from Of The Earth Distribution Corp. 3 Country Wine & Spirits, Inc.
This approval marked the Company’s entry into the Canadian market, starting with a purchase order from Of The Earth Distribution Corp. Country Wine & Spirits, Inc.
Key Trends to Watch , February 2025). 5 Market Trends According to the recent IWSR research (IWSR, Five Key Trends Shifting the Beverage Alcohol Market in 2025 , February 2025), after persistent inflation, geopolitical tensions and varying levels of consumer confidence characterized 2024, the next 12 months will be marked by continued economic uncertainty, but also a number of promising growth opportunities.
Market Trends According to the recent IWSR research (IWSR, Five Key Trends Shifting the Beverage Alcohol Market in 2025 , February 2025), after persistent inflation, geopolitical tensions and varying levels of consumer confidence characterized 2024, the next 12 months will be marked by continued economic uncertainty, but also a number of promising growth opportunities.
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.
In addition, we generate online promotional activities around holidays and life events, while always being mindful of ethically sourcing products for distribution. 8 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 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.
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 Council of Tequila, A.C. Both agreements require that the tequila supplied by the Producer comply with the Mexican Official Tequila Standard.
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.
We believe that these seasonal trends have affected and will continue to affect our quarterly results. 14 Government Regulation The Alcohol Industry A complex multi-jurisdictional regime governs alcoholic beverage manufacturing, distribution, sales, and marketing in the United States.
The second fastest-growing spirits category has been agave, mainly tequila and mezcal, which grew by 17.2% from 2021-2022. In 2025, the vast number of tequila fans are expected to continue to branch out into other agave-based or related beverages like sotol and raicilla (Crafted, What’s Shaping Bev-Alc in 2025?
The second fastest-growing spirits category has been agave, mainly tequila and mezcal, which grew by 17.2% from 2021-2022. In 2025, the vast number of tequila fans are expected to continue to branch out into other agave-based or related beverages like sotol and raicilla (Crafted, What’s Shaping Bev-Alc in 2025? Key Trends to Watch , February 2025).
First, we plan to purchase larger amounts of SWOL products, which will allow us to sell to more customers and increase our brand recognition at a quicker rate. Second, we plan on increasing the marketing presence for SWOL and launching our Wine Club.
First, we plan to purchase larger amounts of SWOL products, which will allow us to sell to more customers and increase our brand recognition at a quicker rate. Second, we plan on increasing the marketing presence for SWOL.
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.
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. LQR also had a key partnership with Country Wine & Spirits, Inc. (“CWS”).
As of March 31, 2025, such registration was completed and the Company has rights to enforce its authorization for the denomination of origin and trademark rights.
As of March 31, 2026, such registration was completed and the Company has rights to enforce its authorization for the denomination of origin and trademark rights.
As of March 31, 2025, such registration was completed and the Company has rights to enforce its authorization for the denomination of origin and trademark rights.
As of March 31, 2026, such registration was completed and the Company has rights to enforce its authorization for the denomination of origin and trademark rights.
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.
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 April 15, 2026, 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.
LQR House works on leveraging its expertise to enhance Cannon’s online presence, extending its reach across borders to the USA and captivating the attention of CWSpirits.com clientele. Cannon Estate Winery, with its established relationships with distributors and retail outlets nationwide, aims to expand LQR House’s brands and marketing clients throughout Canada.
LQR House works on leveraging its expertise to enhance Cannon’s online presence, extending its reach across borders to the USA and captivating the attention of U.S. alcohol enthusiasts. Cannon Estate Winery, with its established relationships with distributors and retail outlets nationwide, aims to expand LQR House’s brands and marketing clients throughout Canada.
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.
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. 3 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.
Key features of the marketing offering include: ● Leveraging multiple advertising campaigns to bring affordability to advertising methods such as influencer marketing, incentive-based sales, or product placement advertising. ● Combining multiple campaigns into one media buy. ● Leveraging specific assets available to LQR House such as the CWS Platform and email distribution list. ● Advertising with targeted banners. ● Leveraging LQR House online campaigns. ● Creating branding and product placement campaigns that elevate a brand’s reach to targeted demographics. ● Creating a brand around an influencer’s following and reach to leverage viewership and monetize their growth.
Key features of the marketing offering include: ● Leveraging multiple advertising campaigns to bring affordability to advertising methods such as influencer marketing, incentive-based sales, or product placement advertising. ● Combining multiple campaigns into one media buy. ● Leveraging specific assets available to LQR House such as the CWS Platform and email distribution list. ● Advertising with targeted banners. ● Leveraging LQR House online campaigns. ● Creating branding and product placement campaigns that elevate a brand’s reach to targeted demographics. ● Creating a brand around an influencer’s following and reach to leverage viewership and monetize their growth. 10 Central to the business model, we offer access to an exclusive network of industry influencers or brand ambassadors.
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.
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, 2025 and 2024, we had net losses of $25,522,618 and $22,754,178, respectively.
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.
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.
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.
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.
We built up our own group (network) of influencers from scratch (bartenders, alcohol personalities, restaurateurs, social media personalities, alcohol representatives). These influencers have a direct line to qualified customers who are looking to buy products that they recommend.
These influencers are often approached by new brands independently, which are then referred to us. We built up our own group (network) of influencers from scratch (bartenders, alcohol personalities, restaurateurs, social media personalities, alcohol representatives). These influencers have a direct line to qualified customers who are looking to buy products that they recommend.
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.
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.
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.
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.
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.
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.
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. LQR House has no ownership interest in any of CWS’s brick and mortar retail locations. To date CWS has distributed all of the alcohol ordered by customers through the CWS Platform.
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.
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.
CWS was formed in 2003 to buy and acquire distressed brick and mortar retail locations for the sale of beer, wine, spirits and create value in retail locations throughout Southern California and grew to 10 locations by 2013.
CWS was formed in 2003 to buy and acquire distressed brick and mortar retail locations for the sale of beer, wine, spirits and create value in retail locations throughout Southern California and grew to 10 locations by 2013. In 2013 CWS found a demand for online shipping of alcohol and started to focus more on e-commerce.
By implementing this targeted approach, in our view, we provide a unique and modern customer experience that helps us capture a key market in the alcoholic beverage industry. Our search engine optimization, or SEO, has been developed over many years. In our view, it provides customers with premium placement opportunities they often cannot source anywhere else. ● Extensive influencer network.
By implementing this targeted approach, in our view, we provide a unique and modern customer experience that helps us capture a key market in the alcoholic beverage industry. Our search engine optimization, or SEO, has been developed over many years.
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.
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. On March 2, 2026, we reincorporated in the State of Delaware through a statutory conversion.
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.
First, we create marketing content on the CWS Platform for our brands and the brands of our marketing services clients. Second, when consumers purchase products on the CWS Platform like tequila with our SWOL brand, a subscription to Vault, or the products of our marketing service clients, CWS will perform the distribution services related to the sale of those products.
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.
However, the Company expects that its cash and cash equivalents of $5,975,408 as of December 31, 2025 may not be sufficient to fund its operating expenses and potential acquisition and investment plans for at least one year.
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.
Our Relationships with Third-Party Alcohol Brands To date, we have engaged with various brands to bring their products to our customer base. 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.
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.
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.
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.
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. 4 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.
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 believe we have developed and solidified relationships with multiple groups that can deliver value to external brand customers. 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 our vetting process allows us to maximize the value we provide to our clients, while also allowing us to provide consumers with exclusive options not available from larger distributors. ● Strategic relationships. We believe we have developed and solidified relationships with multiple groups that can deliver value to external brand customers.
We vet the external brands we promote to ensure that all of the products we market align with our own brand and strategy. We believe our vetting process allows us to maximize the value we provide to our clients, while also allowing us to provide consumers with exclusive options not available from larger distributors. ● Strategic relationships.
We believe that we have crafted unique labelling which aligns with our branding. Our labelling includes a removable patch that can be affixed to other items.
We believe that we have crafted unique labelling which aligns with our branding. Our labelling includes a removable patch that can be affixed to other items. This serves as continued marketing for our products, as the patch remains after the bottle has been consumed.
Moreover, we believe e-commerce is increasingly becoming a driver of demand for at-home consumption of alcoholic products, driven in part by the recent pandemic.
Spirits and wine accounted for approximately 50.6% of total consumption as of January 2023 (Statista, Alcoholic Drinks - Revenue - United States , January 2023). 6 Moreover, we believe e-commerce is increasingly becoming a driver of demand for at-home consumption of alcoholic products, driven in part by the recent pandemic.
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.
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. 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.
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).
Our focus is on the United States market. 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.
Our team has decades of experience combined in e-commerce and implementing online strategies to maximize the benefit of marketing campaigns. This includes online promotional campaigns that drive sales of products. ● Working with highly differentiated brands. We vet the external brands we promote to ensure that all of the products we market align with our own brand and strategy.
We have around 240 influencer relationships that differentiate us from many other online marketing channels available to brands. ● Extensive e-commerce and marketing expertise. Our team has decades of experience combined in e-commerce and implementing online strategies to maximize the benefit of marketing campaigns. This includes online promotional campaigns that drive sales of products. ● Working with highly differentiated brands.
In June 2024, we acquired a minority stake of common shares of DRNK Beverage Corp. (“DRNK”), a British Columbia corporation, operating in the non-alcoholic and ready-to-drink beverage markets (which became Chase Mocktails Ltd). LQR House’s investment in DRNK marked its strategic entry into both the non-alcoholic (NA) and ready-to-drink (RTD) beverage markets, two rapidly growing sectors within the beverage industry.
LQR House’s investment in DRNK marked its strategic entry into both the non-alcoholic (NA) and ready-to-drink (RTD) beverage markets, two rapidly growing sectors within the beverage industry.
Our Business Model Since our inception in January 2021, we have put our business model to the test and believe it is our path towards future success. First, we create marketing content on the CWS Platform for our brands and the brands of our marketing services clients.
The President of CWS, Shawn Kattoula, is also the 100% owner of KBROS. 5 Our Business Model Since our inception in January 2021, we have put our business model to the test and believe it is our path towards future success.
Our most successful service to date is the ability for liquor brands to have their products displayed by a social media influencer team via product placement, promotion and usage in advertorial collaborations. These influencers are often approached by new brands independently, which are then referred to us.
Our Growth Strategies Marketing We have developed three primary methods for facilitating deals through our marketing division: ● Channel Partners/Influencers. Our most successful service to date is the ability for liquor brands to have their products displayed by a social media influencer team via product placement, promotion and usage in advertorial collaborations.
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.
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.
The more an influencer generates in sales for a brand, the more the influencer makes in commissions. This directly aligns the objectives of the brand, influencer and LQR House.
Influencers are provided with a commission based on the number of products they sell and drive traffic to the CWS Platform. The more an influencer generates in sales for a brand, the more the influencer makes in commissions. This directly aligns the objectives of the brand, influencer and LQR House.
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 clients generally include newer alcohol brands that produce small batches and craft spirits. 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.
In 2013 CWS found a demand for online shipping of alcohol and started to focus more on e-commerce with the assistance of our Chief Executive Officer, Sean Dollinger and Dollinger Innovations. With their help, CWS began online alcohol sales and built the business into a sizable alcohol e-commerce company.
Around 2019, our Chief Executive Officer, Sean Dollinger and Dollinger Innovations began assisting CWS with the development of its e-commerce operations.With their help, CWS began online alcohol sales and built the business into a sizable alcohol e-commerce company. Today CWS has 6 brick and mortar locations and specializes in logistics of shipping and helping brands reach customers.
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.
We market this membership program on the CWS Platform. 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 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 United States represents one of the largest global markets for all alcoholic beverage category sales (Statista, Alcoholic Drinks - Market Size , November 2024). This demonstrates a considerable amount of consumption and a large and stable market that is continuing to evolve.
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.
Engaging with us provides clients with the opportunity to select a tailored list of influencers to promote their brand to an ideal target market. LQR House currently has relationships with over 240 influencers, which is a significant differentiator and underscores the uniqueness of our company as a marketing platform.
No assurance can be given that the Company will be successful in these efforts.
No assurance can be given that the Company will be successful in these efforts. For further discussion, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Going Concern ”.
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.
In our view, it provides customers with premium placement opportunities they often cannot source anywhere else. 11 ● Extensive influencer network . 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.
As a result of the Lazar transaction, David Lazar was appointed our President and a Director on our Board and Yilin Lu, Hong Chun Yeung, Lijun Chen and Jing Lu were appointed as Directors on our Board.
On August 6, 2025, the Board appointed Yilin Lu to serve as a President of the Company and replaced him on the Compensation Committee and Nominating and Corporate Governance Committee with Hong Chun Yeung.
Removed
Recent Developments In February 2024, the Board of Directors of the Company (the “Board of Directors” or the “Board”) declared a 50% stock dividend for distribution to all of the Company’s shareholders of record at the close of business on February 12, 2024. On March 1, 2024, 1,609,817 shares were issued per the dividend.
Added
The Company conducts its operations through three wholly-owned subsidiaries: LQR House Acquisition Corp., which owns and operates the CWS Platform; SWOL Holdings Inc., which develops and markets SWOL Tequila; and YHC Online Limited, a Hong Kong incorporated entity through which the Company entered into joint venture agreements in December 2025, as further described under Recent Developments below.
Removed
As a result of the stock dividend, a 3:2 stock split was effected. On September 13, 2024, the Company entered into an at-the-market offering agreement (“ATM Agreement”) with H.C. Wainwright & Co., LLC, as sales agent (“HCW”), relating to the sale of common stock.
Added
In June 2024, we acquired a minority stake of common shares of DRNK Beverage Corp. (“DRNK”), a British Columbia corporation, operating in the non-alcoholic and ready-to-drink beverage markets. DRNK has since rebranded and operates as Chase Mocktails Ltd. (drnkchase.com), an active company in the non-alcoholic ready-to-drink beverage category, a sector that continues to experience significant growth.
Removed
During the year ended December 31, 2024, the Company issued an aggregate of 1,485,575 shares of common stock pursuant to such ATM Agreement for net proceeds of $1,543,079. The Company paid the sales agent compensation with respect to sale of such shares in the amount of $48,018.
Added
Recent Developments On April 1, 2025, we entered into a Supplementary Distribution Agreement (the “Supplementary Distribution Agreement”) with Of The Earth Distribution Corp., a Canadian corporation (the “Distributor”), pursuant to which the Company granted to Distributor the exclusive right to distribute, market, and sell SWOL Tequila products within Thailand and Greece until June 28, 2029.
Removed
On October 15, 2024, the Company entered into a Securities Purchase Agreement (the “Lazar Purchase Agreement”) with David E.
Added
The Supplementary Distribution Agreement also amends Supplier Agreement between the Company and the Distributor, dated June 28, 2024, by providing the Distributor exclusive distribution rights to sell SWOL Tequila in all of Canada without any territorial limitations. On April 2, 2025, David Lazar resigned as President and as member of our Board of Directors (the “Board”), effective immediately.
Removed
Lazar (“Lazar”), pursuant to which Lazar agreed to purchase in aggregate 5,454,545 shares of our common stock and a five-year warrant (the “Lazar Warrant” or if divided and issued to more than one holder, the “Lazar Warrants”) to purchase up to 10,909,090 shares of our common stock at an exercise price of $0.55 per share for $3,000,000 in two separate tranches (the “Lazar Transaction”).
Added
On April 21, 2025, the Company effected a one-for-thirty-five reverse stock split of its issued, outstanding and authorized common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, the total number of authorized common stock of the Company decreased to 10,000,000 shares. The Reverse Stock Split became effective at 12:01 a.m.
Removed
Pursuant to the terms of the Lazar Purchase Agreement we closed the first tranche on October 16, 2024, by issuing to Lazar 1,101,818 shares of common stock (which represented approximately 19.99% of our outstanding stock on October 15, 2024) at a price of $0.55 per share for proceeds of $606,000.
Added
Eastern Time on April 21, 2025, and our common stock began trading on a post-split basis on April 21, 2025.
Removed
Pursuant to the terms of the Lazar Purchase Agreement, the closing of the second tranche was subject to stockholder approval (“Stockholder Approval”) of (i) the issuance of the remaining 4,352,545 issuable under the Lazar Purchase Agreement and (ii) the issuance of the Lazar Warrant and the exercise thereof.
Added
No fractional shares were issued in connection with the Reverse Stock Split and fractional amounts were rounded up to the next highest whole number at the participant level. 1 On April 23, 2025, the Audit Committee of the Board accepted the resignation of dbbmckennon and approved the engagement of Enrome LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2025, effective immediately.
Removed
We obtained Stockholder Approval on December 19, 2024 and closed the second tranche. Pursuant to the terms of the Lazar Purchase Agreement, Lazar assigned his remaining rights and obligations under the Lazar Purchase Agreement to 18 investors (the “Lazar Assignees”).
Added
On June 2, 2025, the Company held LQR House Inc. 2025 Annual Meeting of Stockholders (the “Annual Meeting”) at which meeting: (1) the Company’s stockholders approved an amendment to the Articles of Incorporation to authorize the Company to effect the increase of authorized shares of common stock of the Company from 10,000,000 to 350,000,000 shares, (2) the stockholders re-elected Sean Dollinger, Yilin Lu, Lijun Chen, Jing Lu, and Hong Chun Yeung to serve as directors of the Board until the Company’s 2026 annual meeting of stockholders, or until such persons’ successors are duly elected and qualified, or until such persons’ earlier resignation, death, or removal.
Removed
On December 30, 2024, the Company issued 4,352,727 shares of common stock and the Lazar Warrant to the Lazar Assignees for $2,394,000. On December 30, 2024, the Company issued 2,077,800 shares of common stock pursuant to the cashless exercise of several Lazar Warrants.
Added
Following the Annual Meeting, on June 2, 2025, the Company filed the Certificate of Amendment with the Secretary of State of Nevada and effected the increase of the number of authorized shares of common stock of the Company from 10,000,000 shares to 350,000,000 shares, each share of common stock having a par value of $0.0001.
Removed
All of the remaining Lazar Warrants were exercised by the Lazar Assignees in January 2025 and the Company issued 7,366,209 shares of common stock.
Added
Following the Annual Meeting, the Board approved appointment of Lijun Chen as the Chairman of the Board.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

65 edited+41 added−31 removed216 unchanged
Biggest changeThere can be no assurance that this will occur. Unanticipated problems and expenses often encountered in offering new and unique products or services may impact whether the Company is successful. Furthermore, the Company may encounter substantial delays and unexpected expenses related to development, technological changes, marketing, insurance, legal or regulatory requirements and changes to such requirements or other unforeseen difficulties.
Biggest changeFurthermore, the Company may encounter substantial delays and unexpected expenses related to development, technological changes, marketing, insurance, legal or regulatory requirements and changes to such requirements or other unforeseen difficulties. There can be no assurance that the Company will remain profitable. If the Company sustains losses over a period of time, it may be unable to continue in business.
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.
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.
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 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.
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 ● 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.
Any determination to pay dividends in the future will be made at the discretion of our Board of Directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our Board deems relevant. Raising additional capital may cause dilution to our stockholders, or restrict our operations.
Any determination to pay dividends in the future will be made at the discretion of our Board of Directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our Board deems relevant. 33 Raising additional capital may cause dilution to our stockholders, or restrict our operations.
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
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.
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.
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. 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.
The Company’s operating results may fluctuate from year to year due to the factors listed above and others not listed. At times, these fluctuations may be significant. We rely on a limited number of suppliers, or, in some cases, a sole supplier, and may not be able to find replacements or immediately transition to alternative suppliers.
The Company’s operating results may fluctuate from year to year due to the factors listed above and others not listed. At times, these fluctuations may be significant. 19 We rely on a limited number of suppliers, or, in some cases, a sole supplier, and may not be able to find replacements or immediately transition to alternative suppliers.
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.
Other governmental authorities around the world have enacted or are considering similar types of legislative and regulatory proposals concerning data protection. 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.
To the extent changes in the political environment have a negative impact on us or on our customers, our markets, our business, results of operation and financial condition could be materially and adversely impacted in the future. Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business.
To the extent changes in the political environment have a negative impact on us or on our customers, our markets, our business, results of operation and financial condition could be materially and adversely impacted in the future. 26 Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and 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.
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.
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.
Similar impacts have occurred in the past, such as during the 2008 - 2010 financial crisis. 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.
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.
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. If demand for our products and services does not develop as expected our projected revenues and profits will be affected.
It is possible that we will experience delays, errors, or other problems with their work that will materially impact our operations. In particular, we rely on CWS for the distribution of products sold by our marketing clientele.
It is possible that we will experience delays, errors, or other problems with their work that will materially impact our operations. 20 In particular, we rely on CWS for the distribution of products sold by our marketing clientele.
In addition, investors of shares of our common stock may experience losses, which may be material, if the price of our common stock declines or if such investors purchase shares of our common stock prior to any price decline. We are currently listed on The Nasdaq Capital Market.
In addition, investors of shares of our common stock may experience losses, which may be material, if the price of our common stock declines or if such investors purchase shares of our common stock prior to any price decline. 32 We are currently listed on The Nasdaq Capital Market.
Although we are organized under the laws of the State of Nevada and investors are able to effect service of process in the United States upon us, some of the members of our Board of Directors and some members of our senior management reside outside of the United States and all or a substantial portion of their assets are located outside the United States.
Although we are organized under the laws of the State of Delaware and investors are able to effect service of process in the United States upon us, some of the members of our Board of Directors and some members of our senior management reside outside of the United States and all or a substantial portion of their assets are located outside the United States.
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.
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.
Pursuant to the Bottled at Origin Joint Responsibility Agreement, the Producer supplies to us product that strictly complies with the “Official Tequila Standard” (as defined in the agreement) under Mexican law and allows us to use the word “Tequila” or “Tequila 100% Agave” on the SWOL brand.
Our business is materially dependent on the Bottled at Origin Joint Responsibility Agreement and the Shared Responsibility and Bonding Agreement. 17 Pursuant to the Bottled at Origin Joint Responsibility Agreement, the Producer supplies to us product that strictly complies with the “Official Tequila Standard” (as defined in the agreement) under Mexican law and allows us to use the word “Tequila” or “Tequila 100% Agave” on the SWOL brand.
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.
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. 31 Our stock price may be volatile, and purchasers of our common stock could incur substantial losses.
It is difficult to accurately forecast the Company’s revenues and operating results, and they could fluctuate in the future due to several factors.
The Company’s future revenue and operating results are unpredictable and may fluctuate significantly. It is difficult to accurately forecast the Company’s revenues and operating results, and they could fluctuate in the future due to several factors.
Adverse public opinion about alcohol may harm our business. While a number of research studies suggest that moderate alcohol consumption may provide various health benefits, other studies conclude or suggest that alcohol consumption has no health benefits and may increase the risk of stroke, cancer and other illnesses.
While a number of research studies suggest that moderate alcohol consumption may provide various health benefits, other studies conclude or suggest that alcohol consumption has no health benefits and may increase the risk of stroke, cancer and other illnesses.
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.
Risks Related to Ownership of Our Common Stock An active trading market for our shares may not be sustained. 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.
Any of the following factors could harm our business, financial condition, results of operations or prospects, and could result in a partial or complete loss of your investment. Some statements in this report, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section titled “Cautionary Statement Regarding Forward-Looking Statements”.
Any of the following factors could harm our business, financial condition, results of operations or prospects, and could result in a partial or complete loss of your investment. Some statements in this report, including statements in the following risk factors, constitute forward-looking statements.
If a cyberattack or other information security breach occurs, it could lead to security breaches of the networks, systems or devices that our customers use to access our products and services which could result in the unauthorized disclosure, release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information (including account data information) or data security compromises.
In addition, to access our products and services, our customers will use personal smartphones, tablet computers and other mobile devices that may be beyond our control. 25 If a cyberattack or other information security breach occurs, it could lead to security breaches of the networks, systems or devices that our customers use to access our products and services which could result in the unauthorized disclosure, release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information (including account data information) or data security compromises.
For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not emerging growth companies, including but not limited to: ● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; ● being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and ● being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not emerging growth companies, including but not limited to: ● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; ● being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and ● being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. 34 In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
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.
Our Chief Executive Officer 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.
We have paid no cash dividends on any class of our stock to date, and we do not anticipate paying cash dividends in the near term. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock.
We have never paid cash dividends on our stock and do not intend to pay cash dividends for the foreseeable future. We have paid no cash dividends on any class of our stock to date, and we do not anticipate paying cash dividends in the near term.
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 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 common stock.
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.
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.
Volatility in the market price of our common stock may prevent investors from being able to sell their shares at or above the initial public offering price.
Volatility in the market price of our common stock may prevent investors from being able to sell their shares at or above the initial public offering price. As a result, you may suffer a loss on your investment.
The high costs associated with failing to meet regulatory requirements, combined with the risk of fallout from security breaches, has elevated this topic from the IT organization to the executive and board level.
The high costs associated with failing to meet regulatory requirements, combined with the risk of fallout from security breaches, has elevated this topic from the IT organization to the executive and board level. We may need to spend additional time and money ensuring we will meet future regulatory requirements.
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.
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.
Additionally, on November 19, 2018, a class action complaint was filed in the United States District Court for the Southern District of New York against Namaste, Sean Dollinger, Philip Van Den Berg, and former CFO, Kenneth Ngo, on behalf of persons and entities who or which purchased or otherwise acquired shares of Namaste common stock traded on the over-the-counter market between November 29, 2017, and March 6, 2019.
Dollinger’s involvement in this class action, which was settled without any admissions of guilt or wrongdoing or liability, will have any effect on our ability to operate our business, the price of our stock, or the results of our operations. 16 Additionally, on November 19, 2018, a class action complaint was filed in the United States District Court for the Southern District of New York against Namaste, Sean Dollinger, Philip Van Den Berg, and former CFO, Kenneth Ngo, on behalf of persons and entities who or which purchased or otherwise acquired shares of Namaste common stock traded on the over-the-counter market between November 29, 2017, and March 6, 2019.
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.
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 adversely affected by political, trade, and regulatory developments, including changes in tariffs and international trade policies.
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
If any regulation were to cause a negative impact on the ability of CWS to sell alcohol online, such an impact would have a negative effect on our business, results of operations, and financial condition.
While we do not engage in the act of selling alcohol on the internet, our business depends on the ability of CWS to continue selling alcohol online through the CWS Platform. 28 If any regulation were to cause a negative impact on the ability of CWS to sell alcohol online, such an impact would have a negative effect on our business, results of operations, and financial condition.
The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations.
These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships but could also include factors involving financial markets or the financial services industry generally. 30 The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations.
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.
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.
Industry and other market data used in this or other periodic reports that we have filed or will in the future file with the SEC, including those undertaken by us or our engaged consultants, may not prove to be representative of current and future market conditions or future results.
These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, financial condition and results of operations. 29 Industry and other market data used in this or other periodic reports that we have filed or will in the future file with the SEC, including those undertaken by us or our engaged consultants, may not prove to be representative of current and future market conditions or future results.
These threats may derive from fraud or malice on the part of our employees or third parties or may result from human error or accidental technological failure.
These threats may derive from fraud or malice on the part of our employees or third parties or may result from human error or accidental technological failure. These threats include cyberattacks, such as computer viruses, malicious code, phishing attacks or information security breaches.
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.
Dollinger’s personal interest to agree with Dollinger Innovations Inc. and Dollinger Holdings LLC in opposition to the interests of the Company. 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.
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.
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.
Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock.
For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur.
Although we acquired the CWS Platform from Ssquared on November 1, 2023, and no longer rely on the Marketing Agreement for any revenue, CWS will continue to be for the foreseeable future our only source of distribution of alcoholic beverages.
Although we acquired the CWS Platform from Ssquared on November 1, 2023, and no longer rely on the Marketing Agreement for revenue, CWS continues to be our sole distribution channel for alcoholic beverage products. Our reliance on CWS creates significant concentration risk.
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.
Over the past 52 weeks ended April 9, 2026, the closing price of our common stock has ranged from approximately $10.73 per share to $0.65 per share. The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
In the years ended December 31, 2024 and 2023, all revenue was derived from or directly related to contractual relationship with CWS.
Our business, revenue, and operations are highly dependent on our relationship with CWS, and any disruption in that relationship could materially adversely affect our business. For the years ended December 31, 2025 and 2024, all of our revenue was derived from or directly related to our contractual relationship with CWS.
Consequently, our stock price may suffer, and there is no assurance that we will be able to continue to meet all continuing listing requirements of Nasdaq from which we will not be exempt, including minimum stock price requirements.
Consequently, our stock price may suffer, and there is no assurance that we will be able to continue to meet all continuing listing requirements of Nasdaq from which we will not be exempt, including minimum stock price requirements. 35 Future sales of substantial amounts of our common stock or securities convertible into or exchangeable or exercisable for shares of common stock, either by us or by our existing stockholders, or the possibility that such sales could occur, could adversely affect the market price of our common stock.
Such interference could result in a loss of existing users, advertisers and goodwill, could result in increased costs and could impair our ability to attract new users, thereby harming our revenue and growth.
Such interference could result in a loss of existing users, advertisers and goodwill, could result in increased costs and could impair our ability to attract new users, thereby harming our revenue and growth. 27 Moreover, the adoption of any laws or regulations adversely affecting the growth, popularity or use of the Internet, including laws impacting Internet neutrality, could decrease the demand for our services and increase our operating costs.
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern in its report on our consolidated financial statements. The accompanying financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
If this occurs, our financial results may be negatively impacted, and we may determine it is in the best interest of the Company to no longer support that brand. We operate in highly competitive industries, and competitive pressures could have a material adverse effect on our business.
If this occurs, our financial results may be negatively impacted, and we may determine it is in the best interest of the Company to no longer support that brand. Our proposed initial public offering of SWOL may not be completed and, if completed, would reduce our ownership interest and may result in a loss of control over SWOL.
With respect to individual customers, we face significant competition from various regional distributors and brick and mortar stores, who compete principally on price.
The principal competitive factors in that industry include product range, pricing, distribution capabilities and responsiveness to consumer preferences, with varying emphasis on these factors depending on the market and the product. With respect to individual customers, we face significant competition from various regional distributors and brick and mortar stores, who compete principally on price.
The Company may not be able to obtain financing on acceptable terms, or at all. The Company may need to raise additional capital to support its operations.
The Company may need to raise additional capital to support its operations.
Our customers will rely on digital technologies, computers, email and messaging systems, software and networks to conduct their operations or to utilize our products or services. In addition, to access our products and services, our customers will use personal smartphones, tablet computers and other mobile devices that may be beyond our control.
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. Our customers will rely on digital technologies, computers, email and messaging systems, software and networks to conduct their operations or to utilize our products or 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.
The Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business. During the years ended December 31, 2025 and 2024, we had net losses of $25,522,618 and $22,754,178, respectively. It is anticipated that the Company may continue to sustain operating losses.
Moreover, the adoption of any laws or regulations adversely affecting the growth, popularity or use of the Internet, including laws impacting Internet neutrality, could decrease the demand for our services and increase our operating costs. The legislative and regulatory landscape regarding the regulation of the Internet and, in particular, Internet neutrality, in the U.S. is subject to uncertainty.
The legislative and regulatory landscape regarding the regulation of the Internet and, in particular, Internet neutrality, in the U.S. is subject to uncertainty.
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.
Any such disruption could result in delays in product delivery, loss of customers, and a material adverse effect on our business, financial condition, and results of operations.
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.
We may not be able to fully mitigate the impact of such developments, including by passing increased costs on to customers, which could materially adversely affect our business, financial condition, and results of operations. 22 Changes in the prices of supplies and raw materials could have a materially adverse effect on our business.
Our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern in its report.
Any failure to effectively execute our business strategy could materially adversely affect our business, financial condition and results of operations. 18 Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern, and we will require additional capital to sustain our operations.
Removed
Dollinger’s involvement in this class action, which was settled without any admissions of guilt or wrongdoing or liability, will have any effect on our ability to operate our business, the price of our stock, or the results of our operations.
Added
These disclosures reflect the Company’s beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future.
Removed
Our business is materially dependent on the Bottled at Origin Joint Responsibility Agreement and the Shared Responsibility and Bonding Agreement.
Added
References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. Please refer to the section titled “Cautionary Statement Regarding Forward-Looking Statements”.
Removed
Dollinger’s personal interest to agree with Dollinger Innovations Inc. and Dollinger Holdings LLC in opposition to the interests of the Company.
Added
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.
Removed
Additionally, because the President of CWS is also the 100% equity owner of KBROS, we could have opportunities in the future to expand the number of our distributors or even replace CWS with a distributor that offer terms more favorable.
Added
If CWS is unwilling or unable to continue to distribute products sold through the CWS Platform, whether due to business, regulatory, financial, or operational reasons, our ability to generate revenue would be materially and adversely affected. In addition, KBROS, which is responsible for fulfillment and logistics for the CWS Platform, is affiliated with CWS through common ownership.
Removed
These opportunities could be declined by KBROS as it is responsible for the management of the fulfillment of sales orders that are generated by the CWS Platform.
Added
As a result, potential conflicts of interest may arise. KBROS may decline to pursue opportunities, including alternative distribution arrangements or operational changes, that could benefit us but may not be in the best interests of CWS. We do not currently have alternative distribution arrangements in place.
Removed
Because of the affiliate relationship between KBROS and CWS, KBROS would be conflicted if presented with opportunities for the CWS Platform that are against the interests of CWS and may decline such opportunities against our interest.
Added
If our relationship with CWS were terminated or disrupted, or if KBROS were unable or unwilling to support a transition to a new distributor, we may not be able to secure a replacement distributor on acceptable terms, or at all, in a timely manner.
Removed
While our relationship with CWS is ongoing and is expected to continue, we cannot be certain that CWS will be willing or able to continue to distribute the products sold on the CWS Platform and although under the Management Agreement it is KBROS’s responsibility to fulfill orders, if we could not or KBROS were not able or willing to secure a new distributor for the CWS Platform if necessary, the lack of a distributor would have material adverse consequences on our financial condition and prospects.
Added
We have a limited operating track record for certain aspects of our business, which may make it difficult to evaluate our growth prospects While we have generated revenue in recent periods, certain aspects of our business, including our SWOL Tequila brand and newer strategic initiatives, have a limited operating track record.
Removed
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs of the date of this Annual Report on Form 10-K, we have not experienced any significant cybersecurity attacks and, to date, the risks from cybersecurity threats have not materially affected, or are reasonably likely to materially affect, our business strategy, results of operations, or financial condition.
Biggest changeAs of the date of this Annual Report on Form 10-K, we have not experienced any significant cybersecurity attacks and, to date, the risks from cybersecurity threats have not materially affected our business strategy, results of operations, or financial condition, and we are not currently aware of any cybersecurity threats that are reasonably likely to have such a material effect.
For 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 .”
For 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 .” 36

Item 2. Properties

Properties — owned and leased real estate

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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.
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, which serves as the mailing address for both LQR House Inc. and its wholly-owned subsidiary SWOL Holdings Inc.
Added
We also maintain a mailing address in North Carolina at 5306 Six Forks Rd Ste 107 PMB1290 Raleigh, NC 27609, which is used for correspondence and administrative purposes. We are a remote-first company, meaning that our employees, consultants and contactors work remotely.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 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.
Biggest changeITEM 3. LEGAL PROCEEDINGS From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. Except as described below, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or to which any of their respective properties are subject.
Removed
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.
Added
The Company was previously involved in a civil action filed by Kingbird Ventures, LLC in the Eighth Judicial District Court, Clark County, Nevada (the “Kingbird Action”), in which the Company, together with certain current and former officers and directors, was named as a defendant.
Removed
No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy petition filed against it during the past ten years.
Added
The complaint asserted claims including, among other things, breach of fiduciary duty and related allegations arising from certain corporate governance matters. On September 22, 2025, the Company and the other defendants entered into settlement agreements with Kingbird Ventures, LLC and related parties to resolve all claims asserted in the Kingbird Action.
Removed
No current director or executive officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years.
Added
The settlement provides for mutual releases of claims among the parties and required aggregate cash payments of approximately $13 million by the Nevada defendants. An initial payment of $7.5 million was paid in September 2025, and the remaining balance of approximately $5.5 million was paid in December 2025, satisfying all payment obligations under the settlement.
Removed
No current director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities during the past ten years.
Added
The settlement agreements expressly provide that the defendants did not admit any liability, wrongdoing, or fault. As a result of the settlement, the Kingbird Action has been fully resolved, and no claims arising from that matter remain pending against the Company or any of its current or former officers or directors. ITEM 4. MINE SAFETY DISCLOSURES.
Removed
No current director or officer has been found by a court to have violated a federal or state securities or commodities law during the past ten years. From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.
Removed
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

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUnless otherwise stated above, the issuances of the securities listed above were made in reliance upon exemptions provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D and/or Regulation S thereunder for the offer and sale of securities not involving a public offering. No underwriter was engaged in connection with the foregoing sales of securities.
Biggest changeOn June 30, 2025, the Company issued 33,000 shares of common stock to Integris Ventures LLC for advisory services rendered, with a grant date fair value of $47,520. 39 Unless otherwise stated above, the issuances of the securities listed above were made in reliance upon exemptions provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D and/or Regulation S thereunder for the offer and sale of securities not involving a public offering.
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.
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, 2025.
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.
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) 14,286 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.
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.
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 83,679 shares.
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.
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 April 15, 2026, we had approximately 31 individual shareholders of record of our common stock.
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.
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, 24,716 shares of the Company were purchased at a cost average of $60 per share in accordance with Rule 10b-18.
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
In January 2024, the Company purchased a total of 5,447 shares of the Company’s common stock at an average price of $101.5 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
From the inception of the share buyback program on September 8, 2023, through December 19, 2023, the Company has purchased a total of 865,070 shares of the Company’s common stock at an average price of $1.7 per share for a total purchase price of $1,440,852.
From the inception of the share buyback program on September 8, 2023, through December 19, 2023, the Company has purchased a total of 24,716 shares of the Company’s common stock at an average price of $60 per share for a total purchase price of $1,440,852.
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.
During the year ended December 31, 2024, 5,447 shares of the Company were purchased at a cost average of $101.5 per share in accordance with Rule 10b-18.
Period (In millions, except share and per share data) Total number of shares purchased (1) Average price paid per share (2) September 8 – December 19, 2023 865,070 $ 1.7 January 4 – January 5, 2024 190,628 2.9 Total 1,055,698 $ 1.9 (1) On August 25, 2023 the Company announced that the Board authorized an up to 20% share buyback program, which does not have an expiration date.
Period (In millions, except share and per share data) Total number of shares purchased (1) Average price paid per share (2) September 8 - December 19, 2023 24,716 $ 60 January 4 - January 5, 2024 5,447 101.5 Total 30,163 $ 67.08 (1) On August 25, 2023 the Company announced that the Board authorized an up to 20% share buyback program, which does not have an expiration date.
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.
As of March 31, 2026, the maximum number of shares of our common stock that may be subject to awards under the 2021 Plan is 100,000, after giving effect to the 1-for-35 reverse stock split effective in April 2025, 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.
Plan 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.
Plan 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 - $ - 97,113 Equity compensation plans not approved by security holders - - - Total - $ - 97,113 Recent Sales of Unregistered Securities On January 2, 2025, the Company issued 3,334 shares of common stock to Avraham Ben-Tzvi in recognition of his services as a director in pursuance of separation.
Removed
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.
Added
The shares were valued at $51.80 per share based on grant-date fair value of $172,678. On January 21, 2025, the Company issued an aggregate of 210,463 shares of common stock upon the exercise of outstanding warrants at an exercise price of $19.25 per share, aggregate proceeds of $4,051,415.
Removed
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.
Added
On April 2, 2025, the Company issued 2,857 shares of common stock to David Lazar pursuant to a separation agreement, with a fair value of $111,000.
Removed
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.
Added
No underwriter was engaged in connection with the foregoing sales of securities.
Removed
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 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
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.

Item 6. [Reserved]

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

12 edited+54 added−51 removed13 unchanged
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.
Biggest changeResults of Operations Comparison of Year Ended December 31, 2025 and Year Ended December 31, 2024 Year Ended December 31, 2025 2024 Var. $ Var. % Revenue - services $ 112,640 $ 117,965 $ (5,325 ) -5 % Revenue - product 1,452,183 2,383,695 (931,512 ) -39 % Total revenues 1,564,823 2,501,660 (936,837 ) -37 % Cost of revenue - services 47,129 178,851 (131,722 ) -74 % Cost of revenue - product 1,348,395 2,635,984 (1,287,589 ) -49 % Total cost of revenue 1,395,524 2,814,835 (1,419,311 ) -50 % Gross profit (loss) 169,299 (313,175 ) 482,474 -154 % Operating expenses: General and administrative 10,954,346 14,556,220 (3,601,874 ) -25 % Sales and marketing 643,608 3,617,924 (2,974,316 ) -82 % Total operating expenses 11,597,954 18,174,144 (6,576,190 ) -36 % Loss from operations (11,428,655 ) (18,487,319 ) 7,058,664 -38 % Other income (expense): Impairment of investment (1,127,500 ) (4,500,000 ) 3,372,500 -75 % Legal settlement expense (13,000,000 ) - (13,000,000 ) 100 % Gain on sale of marketable securities - 5,674 (5,674 ) -100 % Other income 33,537 227,467 (193,930 ) -85 % Total other expenses, net (14,093,963 ) (4,266,859 ) (9,827,104 ) 230 % Income tax expense - - - Net loss $ (25,522,618 ) $ (22,754,178 ) $ (2,768,440 ) 12 % Revenues Total revenues for the year ended December 31, 2025 were $1,564,823, a decrease of $936,837, or approximately 37%, compared to $2,501,660 for the year ended December 31, 2024.
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.
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. ● Vault is the exclusive membership program for the CWS Platform, which is offered and managed by the Company.
Our Growth Strategies The key elements of our strategy to expand our business include the following: ● Collaborative Marketing. We intend to develop leading brands for up-and-coming companies and start-ups and align with celebrities and influencers with significant followings to enhance their online marketing presence. ● Expand Our Brand.
Our Growth Strategies The key elements of our strategy to expand our business include the following: ● Collaborative Marketing. We intend to develop leading brands for up-and-coming companies and start-ups and align with celebrities and influencers with significant followings to enhance their online marketing presence. 42 ● Expand Our Brand.
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.
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 that are material to our investors.
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.
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. 41 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.
We intend to continue expanding and developing our existing SWOL brand by purchasing and selling larger amounts of SWOL products to accelerate brand recognition and increasing our marketing presence. ● Opportunistic Acquisitions.
We intend to continue expanding and developing our existing SWOL brand by purchasing and selling larger amounts of SWOL products to accelerate brand recognition and increasing our marketing presence. ● Opportunistic Acquisitions. 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.
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.
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. During the year ended December 31, 2024, the Company recorded an impairment charge of $4,500,000 based on its evaluation of the investee.
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.
Through our wholly-owned subsidiary SWOL Holdings Inc., we develop and market SWOL Tequila, a proprietary limited-edition tequila brand. 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.
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.
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.
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.
During the year ended December 31, 2024, net cash provided by investing activities of $675,674 consisted of proceeds of $7,764,197 from the sale of marketable securities and $670,000 from the return of deposits held in escrow, partially offset by purchases of marketable securities of $7,758,523.
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 following table presents selected captions from our consolidated statement of cash flows for the years ended December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Net cash used in operating activities $ (33,817,140 ) $ (6,618,417 ) Net cash (used in) provided by investing activities $ (18,834,541 ) $ 675,674 Net cash provided by financing activities $ 53,240,300 $ 4,265,184 Net change in cash and cash equivalents $ 588,619 $ (1,677,559 ) 44 Net Cash Used in Operating Activities During the year ended December 31, 2025, we used net cash of $(33,817,140) in operating activities, compared to $(6,618,417) used in operating activities during the year ended December 31, 2024, an increase of cash used by $27,198,723.
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.
During the year ended December 31, 2024, net cash provided by financing activities of $4,265,184 consisted of net proceeds of $1,543,079 from the sale of common stock pursuant to the at-the-market offering program and gross proceeds of $3,350,020 from the sale of securities pursuant to private placement agreements, partially offset by offering costs of $80,500 and repurchases of common stock of $547,415.
Removed
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.
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, pursuant to a Share Exchange Agreement under which the Company issued 21,429 shares of common stock (750,000 shares of its common stock on pre-reverse split basis) with a fair value of $817,500 in exchange for 113,085 common shares of Cannon.
Removed
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.
Added
During the year ended December 31, 2025, the Company determined the investment was fully impaired and recorded an impairment charge of $817,500. The carrying value of this investment was nil as of December 31, 2025.
Removed
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.
Added
During the year ended December 31, 2025, the Company recorded an additional impairment charge of $300,000, fully writing down the remaining carrying value. The carrying value of this investment was nil as of December 31, 2025.
Removed
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.
Added
In December 2025, YHC Online Limited (“YHC”), a wholly-owned subsidiary of the Company, entered into four separate joint venture agreements with Bancroft Equity, Emerald Wealth Inc., Meridian Financial, and Sequoia Equity (collectively, the “Joint Ventures”).
Removed
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.
Added
Each Joint Venture is engaged in the creation and monetization of multi-channel network (“MCN”) content for digital platforms, including TikTok, with each entity targeting a specific geographic market. YHC holds a 20% minority ownership interest in each Joint Venture, with the majority partner in each retaining full operational control.
Removed
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.
Added
The following table summarizes the key terms of each agreement as of December 31, 2025: Co-Venturer Jurisdiction Target Market JV Entity Total Commitment Funded Bancroft Equity Limited Hong Kong UK & Europe Crofty Network Limited 5,000,000 3,590,000 Emerald Wealth Inc. South Dakota Greater China EMYHC MCN Holdings Limited 6,000,000 4,380,000 Meridian Financial Solutions Inc. Wyoming Southeast Asia Fastone Singapore Pte.
Removed
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.
Added
Ltd. 8,000,000 6,700,000 Sequoia Equity Group Inc. South Dakota Middle East Not yet formed(1) 5,000,000 3,824,000 Total 24,000,000 18,494,000 (1) As of December 31, 2025, the joint venture entity for the Middle East arrangement had not yet been formed.
Removed
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.
Added
Amounts of $3,824,000 advanced to Sequoia Equity Group Inc. are presented as advance for investment in joint venture on the consolidated balance sheet. Each agreement provides YHC with a put right, exercisable after the first anniversary of the respective agreement, to require the co-venturer to repurchase YHC’s interest at YHC’s total funded investment amount.
Removed
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.
Added
As the agreements were executed in late 2025 and operations had not yet commenced as of December 31, 2025, no revenue was generated by any Joint Venture during the year ended December 31, 2025. None of the co-venturers is a related party to the Company.
Removed
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.
Added
In March 2026, all four agreements were terminated and all amounts previously funded, aggregating $18,494,000, were returned to YHC in full. The Services and Brands We Market LQR House is an American online retailer of alcohol products.
Removed
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.
Added
The decrease was primarily driven by a significant decline in product revenues, which fell from $2,383,695 in 2024 to $1,452,183 in 2025, a decrease of $931,512, or approximately 39%.
Removed
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.
Added
The decline in product revenues reflects a strategic decision by management to reduce customer acquisition spending and marketing expenditures through the CWS Platform in order to minimize losses and focus on profitability with the existing customer base, rather than pursuing top-line growth at the expense of continued operating losses.
Removed
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.
Added
As a result of reduced marketing spend, new customer acquisition and order volume through the CWS Platform declined during the year. Service revenues decreased by $5,325, or approximately 5%, from $117,965 in 2024 to $112,640 in 2025.
Removed
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.
Added
The decrease was primarily attributable to a reduction in marketing service engagements and lower Vault membership subscription revenue during the period as the Company realigned its service offerings.
Removed
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.
Added
Cost of Revenue and Gross Profit Total cost of revenue for the year ended December 31, 2025 was $1,395,524, a decrease of $1,419,311, or approximately 50%, compared to $2,814,835 for the year ended December 31, 2024. Cost of revenue for services decreased from $178,851 in 2024 to $47,129 in 2025, reflecting the reduction in marketing service engagements during the year.
Removed
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.
Added
Cost of revenue for product decreased from $2,635,984 in 2024 to $1,348,395 in 2025, primarily driven by the significant decline in CWS Platform product sales volume.
Removed
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 elevated cost of revenue in 2024 was primarily attributable to higher CWS Platform product sales volume, which resulted in correspondingly higher product fulfillment and procurement costs, as well as higher service delivery costs associated with a greater number of active marketing service engagements during that year.
Removed
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
Added
These factors combined to produce a gross loss of $(313,175) in 2024, as total cost of revenue exceeded total revenues.
Removed
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.
Added
As a result of the proportionate decrease in product fulfillment costs relative to revenues driven by lower sales volume in 2025, the Company achieved a gross profit of $169,299 for the year ended December 31, 2025, compared to a gross loss of $(313,175) for the year ended December 31, 2024, an improvement of $482,474. 43 Operating Expenses Total operating expenses for the year ended December 31, 2025 were $11,597,954, a decrease of $6,576,190, or approximately 36%, compared to $18,174,144 for the year ended December 31, 2024.
Removed
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
General and administrative expenses decreased from $14,556,220 in 2024 to $10,954,346 in 2025, a decrease of $3,601,874, or approximately 25%.
Removed
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 primary driver of this decrease was the non-recurrence of approximately $8,021,000 in retention, bonus, and settlement agreements recorded in 2024, most of which were paid to insiders and related parties of the Company, with no comparable amounts incurred during 2025.
Removed
The Company continues to seek investment and acquisition opportunities which will help achieve its strategies.
Added
This decrease was partially offset by Legal and professional fees, including consulting and accounting fees, increased by $4,018,951, from $2,508,728 in 2024 to $6,527,679 in 2025.
Removed
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.
Added
This increase was driven primarily by a significant increase in legal fees from $815,482 in 2024 to $4,622,571 in 2025, an increase of $3,807,089, attributable to legal costs associated with the Company’s litigation and corporate development activities. Consulting fees remained relatively consistent at $1,470,066 in 2025 compared to $1,446,790 in 2024, while accounting fees increased modestly from $246,456 to $435,042.
Removed
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
Sales and marketing expenses decreased from $3,617,924 in 2024 to $643,608 in 2025, a decrease of $2,974,316, or approximately 82%. The decrease was primarily attributable to a non-recurring write-off of approximately $2,150,000 recorded in 2024 in connection with the termination of the Company’s website development agreement with X-Media, with no comparable charge incurred during 2025.
Removed
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.
Added
The remainder of the decrease of approximately $824,000 reflects a reduction in advertising, promotional, and marketing campaign expenditures as the Company transitioned its marketing investment strategy toward the distribution and marketing arrangements entered into during 2025, as described in Note 8.
Removed
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.
Added
Loss from Operations Loss from operations for the year ended December 31, 2025 was $(11,428,655), compared to $(18,487,319) for the year ended December 31, 2024, an improvement of $7,058,664, or approximately 38%. The improvement reflects the combined effect of higher gross profit and lower operating expenses during the year.
Removed
In 2023, the Company received $955,000 in proceeds from the private placement offering, $950,000 from notes, $4,507,228 in net proceeds pursuant to the IPO and $16,619,836 in net proceeds from the October and November offerings. The Company paid $1,458,852 for the repurchase of shares, and $60,000 for the cancellation of warrants.
Added
Other Income (Expense) Total other expense for the year ended December 31, 2025 was $(14,093,963), compared to $(4,266,859) for the year ended December 31, 2024, an increase in net expense of $9,827,104. The increase was primarily attributable to a legal settlement expense of $13,000,000 recognized during the year ended December 31, 2025, with no comparable charge in 2024.
Removed
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.
Added
This was partially offset by a lower impairment charge on investments of $1,127,500 in 2025, compared to $4,500,000 in 2024. Other income decreased from $227,467 in 2024 to $33,537 in 2025. The 2024 other income consisted primarily of dividend income and gains on the sale of marketable securities.
Removed
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”).
Added
Net Loss Net loss for the year ended December 31, 2025 was $(25,522,618), compared to $(22,754,178) for the year ended December 31, 2024, an increase in net loss of $2,768,440, or approximately 12%.
Removed
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.
Added
The increased net loss was primarily driven by the $13,000,000 legal settlement expense recorded in 2025, partially offset by improvements in gross profit and reductions in operating expenses. Liquidity and Capital Resources As of December 31, 2025, we had cash and cash equivalents of $5,975,408 compared to $5,386,789 as of December 31, 2024.
Removed
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
As of December 31, 2025, we had a working capital surplus of $14,135,897 and total stockholders’ equity of $29,332,638, compared to a working capital deficit of $(1,645,461) and total stockholders’ equity deficit of $(517,961) as of December 31, 2024. The improvement in our balance sheet reflects significant equity financing activities completed during 2025.
Removed
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
The primary driver of cash used in operating activities was the net loss of $25,522,618, which included the $13,000,000 Kingbird legal settlement paid in cash during 2025. Non-cash items partially offsetting the net loss included share based compensation of $1,932,967, impairment of investments of $1,127,500, depreciation of $28,378, bad debts of $64,530, and provision for expected credit losses of $67,948.
Removed
Critical Accounting Policies and Significant Judgements and Estimates This discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”).
Added
The most significant working capital movements were as follows: Accounts receivable — related party increased by $150,721 , reflecting higher amounts owed by Country Wine & Spirits in connection with CWS Platform product revenues, against which a provision for expected credit losses of $67,948 was recorded.
Removed
The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods.
Added
The outstanding balance was subsequently offset against payables due to KBROS LLC in early 2026. Advance payment to distributor increased by $3,279,000 , reflecting amounts paid to two Hong Kong distributors — $529,000 and $2,750,000 in 2025 — for market access and distribution rights in the Asian market, recorded as advance payment to distributor.

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Item 7. Management's Discussion & Analysis

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

1 edited+1 added−0 removed0 unchanged
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
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 46 Item 8. Financial Statements and Supplementary Data 46 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 47 Item 9A. Controls and Procedures 47 Item 9B. Other Information 48 Item 9C .
Added
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 48 PART III Item 10. Directors, Executive Officers and Corporate Governance 49 Item 11. Executive Compensation 55 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 60 Item 13. Certain Relationships and Related Transactions, and Director Independence 61 Item 14. Principal Accountant Fees and Services 63 PART IV

Other YHC 10-K year-over-year comparisons