UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
☑ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR
THE FISCALYEARENDEDDECEMBER 31, 2024
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR
THE TRANSITION PERIOD FROM _______ TO _______
COMMISSION
FILE NUMBER: 001-41147
AMAZE
HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
P.O.
Box 78984
Charlotte,
NC28271
(Address
and Zip Code of principal executive offices)
(Registrant’s
telephone number, including area code): (855) 766-9463
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading symbol(s) Name of each exchange on which registered
Common stock, $0.001 par value AMZE NYSE American
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
No ☑
Indicate
by checkmark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). ☑ Yes ☐ No
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller
reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☑ Smaller reporting company ☑
Emerging growth company ☑
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑.
The
aggregate market value of the registrant’s common stock held by non-affiliates was $5,610,312 as of June 30, 2024 (the last business
day of the registrant’s most recently completed second fiscal quarter), based on a total of 9,182,180 shares of common stock held
by non-affiliates and a closing price of $0.611 as reported on the NYSE American on June 30, 2024. For purposes of this computation,
all officers, directors, and 10% beneficial owners of the registrant are deemed to be affiliates. Such determination should not be deemed
to be an admission that such officers, directors or 10% beneficial owners are, in fact, affiliates of the registrant.
As of March 31, 2025, Amaze Holdings, Inc. had 16,713,398
shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive proxy
statement relating to the 2025 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on
Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days
of the registrant’s fiscal year ended December 31, 2024.
TABLE OF CONTENTS
Page
PART I 1
ITEM 1. Business 1
ITEM 1A. Risk factors 9
ITEM 1B. Unresolved staff comments 27
ITEM 1C. Cybersecurity 27
ITEM 2. Properties 27
ITEM 3. Legal proceedings 27
ITEM 4. Mine safety disclosures 28
ITEM 6. [RESERVED] 28
ITEM 7A. Quantitative and qualitative disclosures about market risk 37
ITEM 8. Financial statements and supplementary data 38
ITEM 9A. Controls and procedures 38
ITEM 9B. Other information 39
ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. 39
PART III 39
ITEM 10. Directors, executive officers and corporate governance 39
ITEM 11. Executive compensation 38
ITEM 14. Principal accounting fees and services 40
ITEM 15. Exhibits, financial statement schedules 40
SIGNATURES 41
i
EXPLANATORY NOTE
On March 7, 2025, Fresh Vine Wine, Inc. (“Fresh
Vine” and after the acquisition described herein, “Amaze Holdings, Inc.”) completed the acquisition of Amaze Software,
Inc. (the Acquisition”), pursuant to the Amended and Restated Agreement and Plan of Merger dated as of March 7, 2024 (the “Merger
Agreement”) by and among Fresh Vine, Amaze Holdings Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger
Sub”), Amaze Software, Inc., a Delaware corporation (“Amaze Software”), the stockholders of Amaze Software listed on
Schedule I thereto (each, a “Holder” and together the “Holders”), and Aaron Day, solely in his capacity as the
Holders’ Representative (the “Holders’ Representative”). Amaze Software is an end-to-end, creator-powered commerce
platform offering tools for seamless product creation, advanced e-commerce solutions, and scalable managed services. Effective March 24,
2025 (the “Effective Date”), Fresh Vine was renamed “Amaze Holdings, Inc.” (“Amaze”).
Unless the context requires otherwise, references in this Annual Report
to “Company,” “we,” “us” and “our” refer to Fresh Vine prior to the Effective Date and
to Amaze Holdings, Inc. and its subsidiaries following the Effective Date, and references to “Amaze Software” refer Amaze
Software, Inc.
The Company’s common stock is listed on the NYSE American under the
symbol “AMZE” as of the Effective Date.
Cautionary Statement Concerning Forward-Looking
Statements
We make forward-looking statements
in this Annual Report on Form 10-K. Such forward-looking statements include, but are not limited to, statements concerning our strategies,
future operations, future financial position and operating results, capital adequacy, growth opportunities, prospects, and plans and objectives
of our management team. In addition, any statements that refer to projections, forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking statements. In some cases, you can identify these statements
by forward-looking words such as “may,” “might,” “should,” “would,” “could,”
“expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,”
“predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology.
The forward-looking statements contained in this Annual Report on Form 10-K are based on current expectations and beliefs concerning future
developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we
have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or
other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking
statements. These risks and uncertainties include, but are not limited to, those factors described below and under the heading “Risk
Factors.”
• the risk that we will experience difficulties in managing our growth;
• We have not generated profits from operations to date;
ii
• We need to hire additional executive officers and other personnel;
• We rely heavily on third-party suppliers and service providers;
• We have been engaged in litigation with our former Chief Operating Officer;
iii
• An active, liquid trading market for our common stock may not develop;
• We have no current plans to pay cash dividends on our common stock; and
Should one or more of these risks
or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those
projected in these forward-looking statements. Some of these risks and uncertainties may in the future be amplified by a global crises
and/or any response to such a crisis and there may be additional risks that we consider immaterial or which are unknown. It is not possible
to predict or identify all such risks. We do not undertake any obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except as may be required under applicable securities laws.
This Annual Report on Form 10-K
includes market data and forecasts with respect to the wine industry. We have obtained this market data and certain industry forecasts
from various independent third-party sources, including industry publications, reports by market research firms, surveys, and other independent
sources. Some data and information are based on management’s estimates and calculations, which are derived from our review and interpretation
of internal company research and data, surveys, and independent sources. We believe the data regarding the industry in which we compete
and our market position and market share within this industry generally indicate size, position, and market share within this industry;
however, this data is inherently imprecise and is subject to significant business, economic and competitive uncertainties and risks due
to a variety of factors, including those described in “Risk Factors.” These and other factors could cause our future performance
to differ materially from our assumptions and estimates.
In addition, statements that
“we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on
information available to us as of the date of this report. Although we believe that information provides a reasonable basis for these
statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive
inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly
rely on these statements.
iv
PART I
ITEM 1. BUSINESS.
Overview
Amaze
Holdings, Inc. (formerly Fresh Vine Wine, Inc.) is a premier producer of low carb, low calorie, premium wines in the United States. Founded
in 2019, the Company brings an innovative “better-for-you” solution to the wine market. Offering bold, crisp, and creamy wines
that embody health, warmth, and a deeper connection to wellness and an active lifestyle, we offer a unique and innovative collection of
today’s most popular varietals. We currently sell seven proprietary varietals: Cabernet Sauvignon, Pinot Noir, Chardonnay, Sauvignon
Blanc, Rosé, Sparkling Rosé, and a limited Reserve Napa Cabernet Sauvignon. All varietals have been produced and bottled
in Napa, California.
Effective March 24, 2025,
we changed our name to Amaze Holdings, Inc. Unless the context requires otherwise, references in this Annual Report to “Fresh Vine,”
“Fresh Vine Wine,” “Amaze,” “Company,” “we,” “us” and “our” refer
to Amaze Holdings, Inc. and its subsidiaries, and references to “Amaze Software” refer to our wholly owned subsidiary Amaze
Software, Inc.
Recent Developments
Agreement and Plan of Merger
On March 7, 2025, Fresh Vine
completed the acquisition of Amaze Software, Inc., pursuant to an Amended and Restated Agreement and Plan of Merger dated as of March
7, 2025 (the “Merger Agreement”) by and among Fresh Vine, Amaze Holdings Inc., a Delaware corporation and wholly owned subsidiary
of Fresh Vine (“Merger Sub”), Amaze Software, Inc., a Delaware corporation (“Amaze Software”), the stockholders
of Amaze Software listed on Schedule I thereto (each, a “Holder” and together the “Holders”), and Aaron Day, solely
in his capacity as the Holders’ Representative (the “Holders’ Representative”). Amaze Software is an end-to-end,
creator-powered commerce platform offering tools for seamless product creation, advanced e-commerce solutions, and scalable managed services.
Pursuant to the Merger Agreement,
(i) Merger Sub merged with and into Amaze Software (the “Merger”) with Amaze Software as the surviving company and a wholly
owned subsidiary of Fresh Vine, and (ii) the aggregate merger consideration paid by Fresh Vine in connection with the acquisition included
750,000 shares of the Fresh Vine’s Series D Convertible Preferred Stock, par value $0.001 per share (“Series D Preferred
Stock”), plus warrants (the “Merger Warrants”) to purchase an aggregate of 8,750,000 shares of Fresh Vine’s common
stock, par value $0.001 per share (the “Common Stock”).
Our Existing Business
We are
a premier producer of low carb, low calorie, premium wines in the United States. Founded in 2019, the Company brings an innovative “better-for-you”
solution to the wine market. Offering bold, crisp, and creamy wines that embody health, warmth, and a deeper connection to wellness and
an active lifestyle, we offer a unique and innovative collection of today’s most popular varietals. We currently sell seven proprietary
varietals: Cabernet Sauvignon, Pinot Noir, Chardonnay, Sauvignon Blanc, Rosé, Sparkling Rosé, and a limited Reserve Napa
Cabernet Sauvignon. All varietals have been produced and bottled in Napa, California.
Our wines are focused on the
affordable luxury segment. Importantly, our wines stand out in the luxury wine market because they address the preferences of our target
demographic of consumers with moderate to affluent income and with a desire to pursue a healthy and active lifestyles for a low-calorie,
low-carb, gluten-free product, while concurrently delivering the quality and taste profile of a premium wine brand. This allows us to
position our wines in the “better for you” segment that seeks to appeal to consumers’ emphasis on a healthy lifestyle.
While we believe our product offerings have mass appeal among all consumers of affordable luxury wines, we have positioned the Company
brand as a complement to the healthy and active lifestyles of younger generation wine consumers.
Our core wine offerings are priced
strategically to appeal to mass markets and sell at a list price between $15 and $25 per bottle - price points that support a premium
product strategy, appeal to mass markets, and allow us to offer significant value across all consumer distribution channels. Given the
Company’s brand “better-for-you” appeal and overall product quality, we believe that it presents today’s consumers
with a unique value proposition within this price category.
As a testament to the quality
of our varietals, in September 2022 we announced that The Tasting Panel Magazine and The Somm Journal, two highly regarded wine publications,
had awarded the Company’s California Cabernet Sauvignon, 2020 Vintage, a 92 Rating (out of 100). This is the second of our varietals
to receive a 92 Rating during 2022, with our Limited Reserve Napa Cabernet Sauvignon receiving a Rating of 92 from James Suckling, regarded
as one of the world’s most influential wine critics, in July. Also, in July 2022, our 2020 California Pinot Noir and California
2021 Rosé varietals were awarded Bronze Medals by TEXSOM. In 2022, the Company’s varietals were recognized by various
industry authorities with a total of 16 separate awards.
Our wines are distributed across
the United States and Puerto Rico through wholesale, retail, and direct-to-consumer (DTC) channels. We are able to conduct wholesale distribution
of our wines in all 50 states and Puerto Rico. As of December 31, 2024, we hold relationships with wholesale distributors in 50 states.
We are working with leading distributors, including Southern Glazer’s Wine & Spirits (SGWS), Johnson Brothers, and Republic
National Distributing Company (RNDC), to continue and expand our presence across the contiguous United States.
Our DTC channel enables us to
sell wine directly to the consumer at full retail prices. Although these prices are consistent with our suggested retail prices (SRPs),
we incur two mark-ups of approximately 30% each for our distributor and retail partners when selling wine through our wholesale
distribution channel, therefore directly reducing our revenue and margins. Because the DTC channel provides significantly higher margins
than sales generated through wholesale distributors, we intend to further invest in DTC capabilities to ensure it remains an integral
part of our business. We also believe continued investment in DTC technologies and capabilities are critical to maintaining an intimate
relationship with our customers, which is becoming increasingly digital. In addition, we also sell through alternative DTC sales platforms,
such as ecommerce marketplaces, product aggregators and virtual distributors, all of which have experienced significant recent growth,
as well as sales through home delivery services.
We do not own or operate any
vineyards. Instead of cultivating our own grapes, we have used Fior di Sole, a third-party supplier, to source grapes. This allows
us to leverage our supplier’s broad network of vendor relationships and purchasing power to negotiate favorable cost structures.
Because our supplier procures product inputs on our behalf, including bulk juice, we do not currently engage directly with grape growers
(“growers”) or bulk distributors of juice (“bulk distributors”). As a result, we have limited front-end supply
chain visibility. This is a strategy by design that we believe provides us with access to diversified growers and large distributors,
which reduces our reliance upon any single vendor and mitigates our exposure to droughts, wildfires, spoilage, contamination and other
supply side risks common to the wine industry.
Our supplier procures grapes
and/or juice for our existing varietals from California. This juice is then stored in Napa until time of production, at which point it
is made available for blending and bottling processes at our Napa Valley production and bottling facility. This is significant in that
both blending and bottling must occur within Napa to be considered produced and bottled in Napa — a distinctive product
attribute that adds significant production value to our brand in the eyes of consumers. However, wine produced by the Company will only
be labelled with a Napa Valley appellation of origin if it is produced from grapes grown in the Napa Valley American Viticultural Area
(AVA). The labels for the Company’s core wines identify California as the appellation of origin.
Our asset-light operating
model allows us to utilize third-party assets, including land and production facilities. This approach helps us mitigate many of
the risks associated with agribusiness, such as isolated droughts or fires. Because we source product inputs from multiple geographically
dispersed vendors, we reduce reliance on any one vendor and benefit from broad availability/optionality of product inputs. This is particularly
important as a California-based wine producer where droughts or fires can have an extremely detrimental impact to a company’s
supply chain if not diversified.
Our Strengths
Differentiated Product Offerings — Premium, Napa
Valley Wines within the “Better-For-You” Segment
We offer wines that are differentiated
from those sold by other wine producers operating within the better-for-you segment of the affordable luxury category based on our
premium quality, our association with an award-winning winemaker and our Napa Valley based state of the art production.
Capital-Efficient and Scalable Operational Structure
We have strategically structured
our organization and operations to minimize our capital investment requirements while maintaining flexibility to rapidly scale our production
capabilities to meet consumer demands. We do this by utilizing internal capabilities while leveraging a network of reputable third-party
providers with industry experience and expertise that we use to perform various functions falling outside our internal core competencies.
Production and Bottling on an Alternating Proprietorship
Basis
We contracted with Fior di Sole,
an industry leading packaging innovation and wine production company based in Napa Valley, California, to serve as a “host winery”
and to occupy a portion of its production and warehouse facility and utilize its production equipment on an alternating proprietorship
basis. Under this arrangement, we used capacity at Fior di Sole’s production facility at times mutually convenient to us and Fior
di Sole to produce and bottle our wines for an initial set-up fee and a recurring monthly fee. Fior di Sole was responsible for keeping
its production equipment in good operating order. When the alternating Premises was operated by or used on behalf of our Company, it was
operated pursuant to our federal basic permit and California winegrower’s license. Under our agreement with Fior di Sole, we were
solely responsible for managing and conducting our own winemaking activities and we made all production decisions relating to our wines.
However, we could have requested the use of Fior di Sole’s personnel to perform crush, fermentation, blending, cellar, warehousing,
barrel topping and/or bottling services for additional fees. This arrangement had allowed us to commence our operations and build the
Company brand without having to incur the considerable overhead costs involved with the purchase or full-time lease of a production
facility. The term of the agreement commenced in July 2019, had an initial term of one year and automatically renews for additional one-year
terms unless either party provides 90 days written notice to the other of its intent to terminate at the end of the then current term.
Either party may terminate the agreement upon 30 days written notice if the other party is in violation of any law or regulation that
renders it impossible to perform its obligations under the agreement for a period of greater than 30 days, makes an assignment for the
benefit of creditors or files for bankruptcy protection, or is in material breach of its obligations under the agreement and such failure
to perform is not cured within 30 days of written notice from the other party.
Fior di Sole also provided us
with capacity juice and blends, finishes, bottles, stops, labels and packages our wine, which reduced our internal overhead expenses
and allowed us to benefit from that company’s increased purchasing power. Fior di Sole provided these services on a purchase order
basis, which purchase orders were subject to the parties’ mutual agreement and governed by a Custom Winemaking and Bottling Agreement.
This agreement outlined the schedule for placing orders, the responsibility and schedule for delivery of production materials, procedures
for establishing the wine bottling date and delivery date. We were required to remit 20% of the amount due for wine produced, bottled
and packaged pursuant to this agreement upon our submission of a purchase order. The payment advance was used by Fior Di Sole to reserve
or procure materials on our behalf with additional vendors for bottles, boxes, corks, labels, juice, and other inputs. We, or our winemaker
on our behalf, oversaw the production at the winery and approved all components and aspects of the production process. The balance of
the amount due for wine produced, bottled and packaged (the remaining 80%) was due following our quality review and acceptance of the
finished product. This agreement was terminated in December 2023.
Licensing, Tax and Regulatory Compliance
We have contracted with a third-party to
manage our regulatory licensing and compliance activities. We maintain licenses that enable us to distribute our wine to all 50 states.
We currently utilize software tools available to the industry and work with our license compliance service provider to navigate and manage
the complex state-by-state tax and other regulations that apply to our operations in the beverage alcohol industry. This has enabled
us to reduce the administrative burden of tax compliance, reporting and product registration.
We believe that leveraging our
network of supply chain and compliance partners, consultants and service providers enables us to avoid potential costly and lengthy delays
on nearly every aspect of our business, from grapes to packaging materials, and will accelerate our return on capital due to our limited
need to procure expensive equipment, real estate, and other capital-intensive resources.
Sales and Marketing Strategy
Omni-Channel Marketing
Approach
Today’s consumers interact
with brands through many channels, from traditional media to social media and other digital channels, and through various in-person and
online purchasing methods. In order to build the visibility of our brand and create a grassroots consumer following to support our DTC
distribution channel, we have employed a strategic omnichannel marketing approach that we believe allows us to engage with our target
consumers on their terms to expand and deepen their recognition of our brand. In addition to other mass market promotional activities,
our marketing strategy also utilizes modern techniques, efficiency measures, and channels not commonly seen in the wine industry, including
a combination of social media lifestyle and wine influencer activities, through which brand ambassadors or “influencers” may
conduct promotional activities through the Company’s or their own social media channels including, but not limited to, Twitter,
Facebook, Instagram, Snapchat, YouTube and Pinterest, among others.
As we expand our marketing
presence and drive visibility through traditional and modern marketing methods, we expect to build awareness and name recognition
for the Company in consumers’ minds. Brand awareness will be built substantially through social media channels. Our brand, and
to a large extent our direct-to-consumer sales outlet, has historically been dependent on the image and popularity of, and affinity
towards, Nina Dobrev and Julianne Hough. Ms. Dobrev and Ms. Hough served as celebrity spokespersons and ambassadors of our company,
and actively endorsed our wines on their sizable social media and other outlets pursuant to agreements that granted us licenses to
use their pre-approved name, likeness, image, and other indicia of identity, as well as certain content published on their social
media and other channels, on and in conjunction with the sale and related pre-approved advertising and promotion of our wine. Such
license agreements terminated on September 7, 2023 and, as a result, we will be required to refocus our marketing and brand
promotion efforts. See “Item 1A Risk Factors - We have relied heavily on celebrities to endorse our wines and market our brand
pursuant to license agreements which have been terminated.”
Professional Sports Sponsorships
We have previously entered into
sponsorship agreements with professional sports organizations and venues spanning all four major United States professional sports
leagues, which support our commitment and outreach to consumers focused on active and healthy lifestyles.
These sponsorship arrangements
generally provide us with advertising placements at the stadiums and arenas during sporting and concert events, as well as specified media
and other advertising and promotional benefits, in exchange for our payment of annual sponsorship fees. As of December 31, 2024 all sponsorship
agreements have been cancelled. We do not anticipate pursuing new professional sports sponsorships as part of our marketing and brand
awareness initiatives going forward since our brand has reached national retail distribution.
Labelling and Innovative Packaging
Initiatives
We believe wine labelling can
have a big impact on consumers’ purchasing practices. We conduct market research to validate the consistency of our wine labels
with our brand narrative. Packaging also continues to be a key driver of brand perception, and we are exploring “active lifestyle
packaging” alternatives to traditional bottling that provides an opportunity for our customers to enjoy the Company in non-traditional settings
now and for future years, including bottles with screw-off caps, aluminum cans, and smaller size bottles and cans that can be
taken on-the-go and are ideal for in-store point of purchase sales.
Engagement with Industry Experienced Third Party
Vendors
In October 2022, we executed
a strategy that is aimed at amplifying cash preservation initiatives while continuing to focus on accelerating sales growth. The plan
resulted in the termination of ten employees on the Company’s internal sales team and the engagement by the Company of a third
party sales and distribution management company positioned to more efficiently and effectively facilitate current and future product
sales. In addition, the Company engaged a reputable third party vendor to manage marketing initiatives and drive growth primarily within
the Company’s Direct-to-Consumer sales channel. This agreement terminated in July 2023.
Amaze Holding’s Strategy for Growth
We have been executing the following strategies to
gain brand and product visibility and increase sales and market share:
• Pursuing distribution of our wines internationally.
With over 500,000 licensed retail
accounts (according to Neilson) in the United States, there remains ample opportunity to continue broadening distribution of our
wines as well as increasing the volume of wine sold to existing accounts.
Competition
The wine industry and alcohol
markets generally are intensely competitive. Our wines compete domestically and internationally with other premium or higher quality wines
produced in Europe, South America, South Africa, Australia and New Zealand, as well as North America. Our wines compete on the basis of
quality, price, brand recognition and distribution capability. The ultimate consumer has many choices of products from both domestic and
international producers. Our wines may be considered to compete with all alcoholic and non-alcoholic beverages.
At any given time, there are
more than 400,000 wine choices available to consumers, differing with one another based on vintage, variety or blend, location and other
factors. Accordingly, we experience competition from nearly every segment of the wine industry. Additionally, some of our competitors
have greater financial, technical, marketing and other resources, offer a wider range of products, and have greater name recognition,
which may give them greater negotiating leverage with distributors and allow them to offer their products in more locations and/or on
better terms than us. Nevertheless, we believe that our brand offerings, scalable infrastructure and relationships with one of the largest
domestic distributors will allow us to continue growing our business.
IT Systems
We rely on various IT systems,
owned by us and third parties, to effectively manage our sales and marketing, accounting, financial, legal and compliance functions. Our
website is hosted by a third party, and we rely on third-party vendors for regulatory compliance for order processing, shipments,
and e-commerce functionality. We believe these systems are scalable to support our growth plans. We recognize the value of enhancing and
extending the uses of information technology in our business.
Regulatory Matters
Regulatory framework
We, along with our contract growers,
producers, manufacturers, distributors, retail accounts and ingredients and packaging suppliers, are subject to extensive regulation in
the United States by federal, state and local government authorities with respect to registration, production processes, product
attributes, packaging, labelling, storage and distribution of wine and other products we make.
We are also subject to state
and local tax requirements in all states where our wine is sold. We monitor the requirements of relevant jurisdictions to maintain compliance
with all tax liability and reporting matters. In California, we are subject to a number of governmental authorities, and are also subject
to city and county building, land use, licensing and other codes and regulations.
Alcohol-related regulation
We are subject to extensive
regulation in the United States by federal, state and local laws regulating the production, distribution and sale of consumable
food items, and specifically alcoholic beverages, including by the TTB and the FDA. The TTB is primarily responsible for overseeing
alcohol production records supporting tax obligations, issuing wine labelling guidelines, including grape source and bottle fill requirements,
as well as reviewing and issuing certificates of label approval, which are required for the sale of wine through interstate commerce.
We carefully monitor compliance with TTB rules and regulations, as well as the state law of each state in which we sell our wines. In
California, where most of our wines are made, we are subject to alcohol-related licensing and regulations by many authorities, including
the ABC. ABC agents and representatives investigate applications for licenses to sell alcoholic beverages, report on the moral character
and fitness of alcohol license applicants and the suitability of premises where sales are to be conducted and enforce California alcoholic
beverages laws. We are subject to municipal authorities with respect to aspects of our operations, including the terms of our use permits.
These regulations may limit the production of wine and control the sale of wine, among other elements.
Employee and occupational safety regulation
We are subject to certain state
and federal employee safety and employment practices regulations, including regulations issued pursuant to the U.S. Occupational
Safety and Health Act (“OSHA”), and regulations governing prohibited workplace discriminatory practices and conditions, including
those regulations relating to COVID-19 virus transmission mitigation practices. These regulations require us to comply with manufacturing
safety standards, including protecting our employees from accidents, providing our employees with a safe and non-hostile work environment
and being an equal opportunity employer. In California, we are also subject to employment and safety regulations issued by state and local
authorities.
Environmental regulation
As a result of our wine production
activities, we and certain third parties with which we work are subject to federal, state and local environmental laws and regulations.
Federal regulations govern, among other things, air emissions, wastewater and stormwater discharges, and the treatment, handling and storage
and disposal of materials and wastes. State environmental regulations and authorities intended to address and oversee environmental issues
are largely state-level analogues to federal regulations and authorities intended to perform the similar purposes. In California,
we are also subject to state-specific rules, such as those contained in the California Environmental Quality Act, California Air
Resources Act, Porter-Cologne Water Quality Control Act, California Water Code sections 13300-13999 and Title 23 of the
California Administrative Code and various sections of the Health and Safety Code. We are subject to local environmental regulations that
address a number of elements of our wine production process, including air quality, the handling of hazardous waste, recycling, water
use and discharge, emissions and traffic impacts.
Labelling regulation
Many of our wines are identified
by their appellation of origin, which are among the most highly regarded wine growing regions in the world. An appellation may be present
on a wine label only if it meets the requirements of applicable state and federal regulations that seek to ensure the consistency and
quality of wines from a specific territory. These appellations designate the specific geographic origin of most or all (depending on the
appellation) of the wine’s grapes, and can be a political subdivision (e.g., a country, state or county) or a designated viticultural
area. The rules for vineyard designation are similar. Although we expect that most of our labels will maintain the same appellation of
origin from year to year, we may choose to change the appellation of one or more of our wines from time to time to take advantage of high-quality grapes
in other areas or to change the profile of a wine.
Privacy and security regulation
We collect personal information
from individuals. Accordingly, we are subject to several data privacy and security related regulations, including but not limited to:
U.S. state privacy, security and breach notification laws; the GDPR; and other European privacy laws as well as privacy laws being
adopted in other regions around the world. In addition, the FTC and many state attorneys general are interpreting existing federal and
state consumer protection laws to impose evolving standards for the online collection, use, dissemination and security of information
about individuals. Certain states have also adopted robust data privacy and security laws and regulations. For example, the CCPA, which
took effect in 2020, imposes obligations and restrictions on businesses regarding their collection, use, and sharing of personal information
and provides new and enhanced data privacy rights to California residents, such as affording them the right to access and delete their
personal information and to opt out of certain sharing of personal information. In response to the data privacy laws and regulations
discussed above and those in other countries in which we do business, we have implemented several technological safeguards, processes,
contractual third-party provisions, and employee trainings to help ensure that we handle information about our employees and customers
in a compliant manner. We maintain a global privacy policy and related procedures, and we train our workforce to understand and comply
with applicable privacy laws.
Intellectual Property
We strive to protect the reputation
of our wine brand. We establish, protect and defend our intellectual property in a number of ways, including through employee and third-party nondisclosure
agreements, copyright laws, domestic and foreign trademark protections, intellectual property licenses and social media and information
security policies for employees. We have been granted three (3) trademark registrations in the United States for FRESH VINE®,
FRESH VINE (Stylized)®, and our FV Logo®, and numerous trademark registrations in other countries for the
FRESH VINE mark, and we have filed, and expect to continue to file, trademark applications seeking to protect any newly-developed wine
brands. We have also been granted a copyright registration in the first version of our website located at www.freshvine.com.
Information contained on or accessible through our website is not incorporated by reference in or otherwise a part of this report. As
a copyright exists in a work of art once it is fixed in tangible medium, we intend to continue to file copyright applications to protect
newly-developed works of art that are important to our business.
We also rely on, and carefully
protect, proprietary knowledge and expertise, including the sources of certain supplies, formulations, production processes, innovation
regarding product development and other trade secrets necessary to maintain and enhance our competitive position.
Seasonality
There is a degree of seasonality
in the growing cycles, procurement and transportation of grapes. The wine industry in general tends to experience seasonal fluctuations
in revenue and net income, with lower sales and net income during the quarter spanning January through March and higher sales and net
income during the quarter spanning from October through December due to the usual timing of seasonal holiday buying. As our operations
expand, we expect that we will be impacted by the seasonality experienced in the wine industry generally.
Employees
As of December 31, 2024,
we had approximately four full-time employees. All of our employees are employed in the United States. None of our employees
are represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be
good.
Legal Proceedings
We may be subject to legal
disputes and subject to claims that arise in the ordinary course of business. Except as disclosed in “Item 3 - Legal Proceedings,”
we are not a party or subject to any pending legal proceedings the resolution of which is expected to have a material adverse effect on
our business, operating results, cash flows or financial condition.
Corporate History
We were initially organized
on May 8, 2019 as a Texas limited liability company under the name “Fresh Grapes, LLC.” In connection with our initial
public offering, on December 8, 2021, we converted from a Texas limited liability company into a Nevada corporation and changed our
name from Fresh Grapes, LLC to Fresh Vine Wine, Inc., which we refer to herein as the “LLC Conversion.” In conjunction with
the LLC Conversion, all of our outstanding units were converted into shares of our common stock based on the relative ownership interests
of our pre-IPO equity holders. In March 2025, Fresh Vine was renamed “Amaze Holdings, Inc.” (“Amaze”). While
operating as a limited liability company, our outstanding equity was referred to as “units.” In this report, for ease of comparison,
we may refer to such units as our common stock for periods prior to the LLC Conversion, unless otherwise indicated in this report. Similarly,
unless otherwise indicated, we may refer to members’ equity in this report as stockholders’ equity. Further, while operating
as a limited liability company, our governing body was referred to as our Board of Managers, with the members thereof being referred to
as “Managers.” We may refer to such governing body throughout this report as our board of directors and such individuals as
our directors.
Company Website Access and SEC Filings
We make available on the Investor
Relations section of our website, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, Proxy Statements, and Forms 3, 4 and 5, and amendments to those reports as soon as reasonably practicable
after filing such documents with, or furnishing such documents to, the SEC. The SEC maintains a website (www.sec.gov) that
contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC.
Our website is www.freshvinewine.com.
We have included our website address in this report as an inactive textual reference only. Information contained on or accessible through
our website is not incorporated by reference in or otherwise a part of this report.
ITEM 1A. RISK FACTORS.
Our company and business involves
a number of challenges and risks. In addition to the other information in this report, you should consider carefully the following risk
factors in evaluating us and our business. The risks described below are not the only ones that we face. Additional risks not presently
known to us or that we currently deem immaterial may also affect our business, financial condition, operating results, or prospects. In
assessing these risks, you should also refer to the other information contained in this report, including our financial statements and
related notes.
Risks related to the recent acquisition of Amaze Software, Inc.
Combining the two companies
may be more difficult, costly or time-consuming than expected, and the anticipated benefits of the acquisition of Amaze Software may not
be realized.
The success of the acquisition
of Amaze Software, including anticipated benefits, will depend, in part, on Amaze Software’s and Fresh Vine’s ability to successfully
combine and integrate the businesses of Amaze Software and Fresh Vine in a manner that permits growth opportunities and does not materially
disrupt existing customer relations or result in decreased revenues due to loss of customers. It is possible that the integration process
could result in the disruption of either company’s or both companies’ ongoing businesses or inconsistencies in standards,
controls, procedures and policies that adversely affect the combined company’s ability to maintain relationships with clients, customers,
and employees or to achieve the anticipated benefits of the acquisition. If Amaze Software and Fresh Vine experience difficulties with
the integration process, the anticipated benefits of the acquisition may not be realized fully or at all, or may take longer to realize
than expected. As with any acquisition, there also may be business disruptions that cause Amaze Software and/or Fresh Vine to lose customers.
Integration efforts between the two companies will also divert management attention and resources. These integration matters could have
an adverse effect on each of Amaze Software and Fresh Vine for an undetermined period. In addition, any cost savings of the acquisition
could be less than anticipated.
Risks related to our company and our business.
We have a limited operating history and have
generated limited revenue to date.
Our company was recently founded,
and we have a limited operating history on which to base an evaluation of our business and prospects. Our prospects must be considered
in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development, particularly
companies in new and evolving markets such as ours. The risks include, but are not limited to, an evolving business model and the management
of growth and product development. To address these risks, we must, among other things, implement and successfully execute our business
strategy and other business systems, respond to competitive developments, and attract, retain and motivate qualified personnel. We cannot
assure you that we will be successful in addressing the risks we may encounter, and our failure to do so could have a material adverse
effect on our business, prospects, financial condition and results of operations.
We have generated very limited
revenues to date, including revenues of approximately $299,000 and $1.8 million during fiscal 2024 and fiscal 2023, respectively. We have
incurred net losses of $2.5 million and $10.6 million during fiscal 2024 and 2023, respectively. We had an accumulated deficit of $29.2
million and $26.5 million at December 31, 2024 and 2023, respectively. We may never generate material revenues or achieve profitability.
We have not generated profits from operations
to date. The success and longevity of our company will depend on our ability to generate profits from future operations or obtain sufficient
capital through financing transactions to meet our business obligations.
The report of our independent
registered public accounting firm on our financial statements for the fiscal year ended December 31, 2024 included an explanatory paragraph
indicating that there is substantial doubt as to our ability to continue as a going concern for twelve months from the financial statement
issuance date. We incurred net losses of $2.5 million and $10.6 million during fiscal 2024 and 2023, respectively. Our cash balance at
December 31, 2024 was approximately $156,000. Our ability to continue as a going concern will be determined by our ability to generate
sufficient cash flow to sustain our operations and/or raise additional capital in the form of debt or equity financing.
We need to hire additional executive officers
and other personnel.
Our executive management is currently
comprised of a Chief Executive Officer and a Chief Financial Officer, both of whom are serving in interim positions. The future success
of our Company will be dependent in part upon us locating and retaining qualified individuals who will serve as executive officers on
a permanent basis and lead our Company and our business operations, and on us locating additional members to serve on our board of directors
to help oversee and guide our company. We cannot predict with certainty when we will be able locate such individuals.
The success of our business depends heavily
on the strength of our wine brand.
Obtaining, maintaining and expanding
our reputation as a producer of premium wine among our customers and the premium wine market generally is critical to the success of our
business and our growth strategy. The premium wine market is driven by a relatively small number of active and well-regarded wine critics
within the industry who have outsized influence over the perceived quality and value of wines. If we are unable to maintain the actual
or perceived quality of our wines, including as a result of contamination or tampering, environmental or other factors impacting the quality
of our grapes or other raw materials, or if our wines otherwise do not meet the subjective expectations or tastes of one or more of a
relatively small number of wine critics, the actual or perceived quality and value of one or more of our wines could be harmed, which
could negatively impact not only the value of that wine, but also the value of the vintage, the particular brand or our broader portfolio.
The winemaking process is a long and labor-intensive process that is built around yearly vintages, which means that once a vintage has
been released we are not able to make further adjustments to satisfy wine critics or consumers. As a result, we are dependent on our winemakers
and tasting panels to ensure that every wine we release meets our exacting quality standards.
With the advent of social media,
word within the premium wine market spreads quickly, which can accentuate both the positive and the negative reviews of our wines and
of wine vintages generally. Public perception of our brands could be negatively affected by adverse publicity or negative commentary on
social media outlets, particularly negative commentary on social media outlets that goes “viral,” or our responses relating
to, among other things:
If we do not produce wines that
are well-regarded by the relatively small wine critic community, the wine market will quickly become aware and our reputation, wine brand,
business and financial results of our operations could be materially and adversely affected. In addition, if our wine receives negative
publicity or consumer reaction, whether as a result of our wines or wines of other producers, our wines in the same vintage could be
adversely affected. Unfavorable publicity, whether accurate or not, related to our industry, us, our winery brands, marketing, personnel,
operations, business performance or prospects could also unfavorably affect our corporate reputation, company value, ability to attract
high-quality talent or the performance of our business.
Any contamination or other
quality control issue could have an adverse effect on sales of the impacted wine or our broader portfolio of wines. If any of our wines
become unsafe or unfit for consumption, cause injury or are otherwise improperly packaged or labelled, we may have to engage in a product
recall and/or be subject to liability and incur additional costs. A widespread recall, multiple recalls, or a significant product liability
judgment against us could cause our wines to be unavailable for a period of time, depressing demand and our brand equity. Even if a product
liability claim is unsuccessful or is not fully pursued, any resulting negative publicity could adversely affect our reputation with existing
and potential customers and accounts, as well as our corporate and individual winery brands image in such a way that current and future
sales could be diminished. In addition, should a competitor experience a recall or contamination event, we could face decreased consumer
confidence by association as a producer of similar products.
Additionally, third parties may
sell wines or inferior brands that imitate our wine brand or that are counterfeit versions of our labels, and customers could be duped
into thinking that these imitation labels are our authentic wines. For example, there could be instances of potential counterfeiting.
A negative consumer experience with such a wine could cause them to refrain from purchasing our brands in the future and damage our brand
integrity. Any failure to maintain the actual or perceived quality of our wines could materially and adversely affect our business, results
of operations and financial results.
Damage to our reputation or loss
of consumer confidence in our wines for any of these or other reasons could result in decreased demand for our wines and could have a
material adverse effect on our business, operational results, and financial results, as well as require additional resources to rebuild
our reputation, competitive position and winery brand strength.
If our business grows, it will place increased
demands on our management, operational and production capabilities that we may not be able to adequately address. If we are unable to
meet these increased demands, our business will be harmed.
Unless we manage our growth effectively,
we may make mistakes in operating our business, such as inaccurate forecasting. The anticipated growth of our operations will place significant
demand on our management and operational resources. In order to manage growth effectively, we must implement and improve our operational