As filed with the Securities and Exchange Commission on July 31,December 22, 2015
333-UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
(Amendment No. 1)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Willamette Valley Vineyards, Inc.
(Exact name of registrant as specified in its charter)
Oregon (State or other jurisdiction of incorporation or organization) | | 93-0981021 (I.R.S. Employer Identification No.) |
8800 Enchanted Way SE
Turner, Oregon 97392
(503) 588-9463
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
James W. Bernau
President and Chief Executive Officer
8800 Enchanted Way SE
Turner, Oregon 97392
(503) 588-9463
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies of all communications, including communications sent to agent for service, should be sent to:
| | David C. Baca
Marcus J. Williams Davis Wright Tremaine LLP 1300 SW Fifth Avenue Suite 2400 Portland, Oregon 97201 Tel. (503) 241-2300 Fax (503) 778-5299 | |
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box. x
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, please check the following box. ¨
If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12-b2 of the Exchange Act. (Check one):
| Large accelerated filer ¨ | Accelerated filer ¨ |
| Non-accelerated filer ¨ | Smaller reporting company ⌧x |
| (Do not check if a smaller reporting company) | |
CALCULATION OF REGISTRATION FEE
| Title of each class to be registered | | Amount to be registered (1) | | | Proposed maximum offering price per share (2) | | | Proposed maximum aggregate offering price (3) | | | Amount of registration fee (4) | |
| Series A Redeemable Preferred Stock | | | 1,445,783 | | | $ | 4.45 | | | $ | 6,000,000 | | | $ | 697 | |
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| Total | | | | | | | | | | $ | 6,000,000 | | | $ | 697 | |
| Title of each class to be registered | Amount to be registered (1) | Proposed maximum offering price per unit (2) | Proposed maximum aggregate offering price (3) | Amount of registration fee (4) |
| Common Stock | | | | |
| Preferred Stock | | | | |
| Senior Debt Securities | | | | |
| Subordinated Debt Securities | | | | |
| Units | | | | |
| Warrants | | | | |
| Rights | | | | |
| | | | | |
| Total | | | $18,000,000 | $1,812.60 |
| (1) | This registration statement registers such indeterminate number of shares of Series A Redeemable Preferred Stockcommon stock and preferred stock, such indeterminate principal amount of senior debt securities and subordinated debt securities, such indeterminate number of warrants to purchase common stock, preferred stock and/or debt securities of one or more series, such indeterminate number of rights to purchase common stock, preferred stock and/or debt securities of one or more series, and such indeterminate number of units representing an interest in one or more shares of common stock or preferred stock, debt securities, warrants and/or rights in any combination as shall have an aggregate initial offering price not to exceed $6,000,000.$18,000,000. The numberregistrant will limit its issuance of shares shownsecurities in this column reflects the maximum number of shares issuable in this offering, which is based upon the lowest price at which this offering will be conducted. The actual number of sharesany twelve month calendar period to be issued will be based upon the actual sales proceeds received by the registrantan aggregate market value (determined as further described herein. In accordance with General Instruction I.B.6 of this Form, the amount shown in column 3 of the above table is less thantime of issuance of that security) in excess of one-third of the aggregate market value of all voting and non-voting common equity held by non-affiliates of the registrant.registrant in compliance with General Instruction I.B.6 of Form S-3. Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. |
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| (2) | The proposed maximum initial offering price per shareunit will be based upon a pricing schedule set forthdetermined by the registrant, from time to time, in connection with the sectionsissuance by the registrant of the prospectus entitled “Prospectus Summary”securities registered hereunder. The securities registered also include such indeterminate amounts and “Determinationnumbers of Offering Price.” The maximumshares of common stock and preferred stock and debt securities as may be issued upon conversion of, or exchange for, preferred stock or debt securities that provide for conversion or exchange, upon exercise of warrants or rights or pursuant to the antidilution provisions of such securities. In addition, pursuant to Rule 416 under the Securities Act, the shares being registered hereunder include such indeterminate number of shares of common stock and preferred stock as may be issuable with respect to bethe shares being registered hereunder will be determined on the basisas a result of the offering price, subject to the limit noted in footnote (1) above. The number of shares shown in column 2 assumes that the offering is completed at the lowest offering price, and concomitantly that the registrant issues the maximum number of shares possible. The dollar amount shown in column 3 reflects the maximum offering price per share permitted in this offering.stock splits, stock dividends or similar transactions. |
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| (3) | The proposed maximum aggregate offering price per class of security will be determined from time to time by the registrant in connection with the issuance by the registrant of the securities registered hereunder and is not specified as to each class of security pursuant to General Instruction II.D of Form S-3 under the Securities Act. |
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| (4) | Calculated in accordance with Rule 457(o) under the Securities Act. |
The Registrant hereby amends the Registration Statement on such date or dates as may be necessary to delay its effective date until the Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Act or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.
The information in this prospectus is not complete and may be changed. We may not sell these securities pursuant to this prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JULY 31 ,DECEMBER 22, 2015
PROSPECTUS
Willamette Valley Vineyards, Inc.
Series A Redeemable Common Stock
Preferred Stock
Senior Debt Securities
Subordinated Debt Securities
Warrants
Rights
Units
We may offer and sell, from time to time, sharesany combination of our Series A Redeemable Preferred Stockdebt and equity securities that we describe in this prospectus having an aggregate initial offering price not exceeding $6,000,000. Our Series A Redeemable Preferred Stock may be issued during one or more offering periods, with the price of the shares to be issued in each period increasing incrementally to reflect what we believe is a reduction in investment risk that occurs with the passage of time. The minimum subscription in this offering is for 300 shares of Series A Redeemable Preferred Stock, and unless waived by the Company in its sole discretion, the maximum subscription is 1,205 shares. The minimum offering amount in this offering is $300,000, and until we have received funds from accepted subscriptions totaling or exceeding this amount, we$18,000,000. We will retain all funds from accepted subscriptions in escrow.
This prospectus sets forthprovide the specific terms of these securities in one or more supplements to this offering and describes the terms of the Series A Redeemable Preferred Stock.prospectus. You should read this prospectus and anythe applicable prospectus supplements carefully, including the information incorporated by reference herein and therein, before you invest in our preferred stock.
We have filed applicationsthe securities described in such prospectus supplement. This prospectus may not be used to register offers andconsummate sales of the Series A Redeemable Preferred Stock to investors in Oregon and Washington. We intend to file an application to list the Series A Redeemable Preferred Stock on the Nasdaq Capital Market if and when the shares meet the qualifications for initial listing on that market. Those criteria includesecurities unless it is accompanied by a minimum market cap (excluding shares held by our affiliates) of at least $3,500,000 and no fewer than 100 round lot security holders. There is no assurance that we will ultimately meet such requirements or that we will be able to maintain that listing. The lack of a listing on a national securities exchange will make it more difficult for investors to purchase and sell shares of our Series A Redeemable Preferred Stock; however, you should not presume that the listing of our preferred shares on that exchange or any other will create a liquid market, and you should be prepared to withstand the risks of your investment indefinitely and to bear the complete loss of the amount invested.prospectus supplement.
Our common stock is listed on the Nasdaq Capital Market under the symbol “WVVI”. On July 28 ,December 18, 2015, the last reported sales price of our common stock as reported on the Nasdaq Capital Market was $7.15$7.14 per share. Our Series A Redeemable Preferred Stock is not convertible into or exchangeable for shareslisted on the Nasdaq Capital Market under the symbol “WVVIP,” but as of our common stock. the date of this prospectus, no sales of Series A Redeemable Preferred Stock had been reported in the Nasdaq Capital Market. We are a smaller reporting company and as such are entitled to certain reduced public company reporting requirements.
Investing in our preferred stocksecurities involves risks; for more information please see “Risk Factors” beginning on page 73 of this prospectus, and the risk factors incorporated herein from time to time by reference from our most recent Annual Report on Form 10-K and our most recent Quarterly Report on Form 10-Q.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is July 31 ,December 22, 2015.
TABLE OF CONTENTS
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| Risk Factors | 3 |
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| Use Of Proceeds | 3 |
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| Dividend Policy | 3 |
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| Redemption of Preferred Stock | 4 |
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| Available for Future Issuance | 8 |
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| Debt Securities | 11 |
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| Warrants | 17 |
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| Description of Rights | 20 |
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| Description of Units | 21 |
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| Plan of Distribution | 22 |
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| Legal Matters | 25 |
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| Experts | 25 |
This prospectus is a part of a registration statement that we filed with the Securities and Exchange Commission (“SEC”) using a “shelf” registration process. Under this shelf registration statement, we intendmay sell, either separately or together, common stock, preferred stock, senior debt securities, subordinated debt securities, warrants, rights or units in one or more offerings. We may use the shelf registration statement to sell, in one or more offerings, up to 1,445,783 shares$18,000,000 of our Series A Redeemable Preferred Stock, no par value, forany securities registered, in any combination in an aggregate offering price of not more than $6,000,000. This offering will be conducted directly by us, without the participation of an underwriter or selling group, through our executive officers and certain other officers. These individuals will not be compensated for their participation in this offering.
amount. This prospectus only provides you with a summarygeneral description of the securities we may offer. Each time we sell securities, we will provide a supplement to this prospectus that contains specific information about the terms of the offering, a discussion of certain risk factors, a description of the Series A Redeemable Preferred Stock, the expected use of proceeds of this offering, and plan of distribution. From time to time we may provide additional information about this offeringsecurities and the preferred stock in one or more supplements to this prospectus.offering. A prospectus supplement may include a discussion or update of any risk factors or other special considerations applicable to our companythose securities or to the preferred stock.us. The supplement also may add, update or change information contained in this prospectus. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should rely on the information in the prospectus supplement.
You should carefully read this prospectus, any prospectus supplement, allany documents that we incorporate by reference in this prospectus and in any prospectus supplement, and the additional information described below under “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” before deciding to invest in our Series A Redeemable Preferred Stock.making an investment decision. You should rely only on the information contained in or incorporated by reference intoin this prospectus and any prospectus supplement. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus is not an offer to sell these securities and we areit is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
You should not assume that the information in this prospectus, any prospectus supplement or any documents we incorporate by reference herein or therein is accurate as of any date other than the date on the front of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates.
The registration statement containing this prospectus, including exhibits to the registration statement, provides additional information about us and the securities offered under this prospectus. That registration statement can be read at the SEC website or at the SEC office mentioned under the heading “Where You Can Find More Information” below.
We may sell securities to underwriters who will sell the securities to the public on terms fixed at the time of sale. In addition, the securities may be sold by us directly or through dealers or agents designated from time to time. If we, directly or through agents, solicit offers to purchase the securities, we reserve the sole right to accept and, together with any agents, to reject, in whole or in part, any of those offers.
Any prospectus supplement will contain the names of the underwriters, dealers or agents, if any, together with the terms of offering, the compensation of those underwriters and the net proceeds to us. Any underwriters, dealers or agents participating in the offering may be deemed “underwriters” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).
Unless the context requires otherwise, references to “Willamette Valley Vineyards,” the “Company,” “we,” “our,” “ours” and “us” are to Willamette Valley Vineyards, Inc. and its subsidiaries. Where these statements reflect knowledge, intentions, expectations or beliefs, first-person pronouns refer to our executive management, and are based upon facts known and matters believed by those persons to be accurate as of the date on the cover of the prospectus, prospectus supplement or other document, and not to any subsequent date. You should not construe these statements as assurances of a given outcome or promises of an expected course of action.
We are subject to the information requirements of the Securities Exchange Act of 1934, as amended, or the “ExchangeExchange Act.” In accordance with the Exchange Act, we file and furnish certain reports, proxy statements and other information with the SEC. These documentsSuch reports, proxy statements and other information that we file with or furnish to the SECfiled by us are available to the public free of charge at www.sec.gov. Copies of certain information filed by us with the SEC are also available on our website at www.WillametteValleyVineyards.com. You may also read and copy any document we file with the SEC, including the registration statement on Form S-3 of which this prospectus forms a part, and the exhibits thereto, at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the public reference facilities by calling the SEC at 1-800-SEC-0330. Copies of certain information that we file with or furnish to the SEC are also available on our website at www.wvv.com; however, none of the information contained in or linked through or from our website is incorporated by reference into this prospectus.
This prospectus omits some information contained in the registration statement of which this prospectus forms a part in accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement for further information about us and the securities we are offering. Statements contained in or incorporated by reference into this prospectus concerning any document we filed as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to these documents.filings. You should review the complete document to evaluate these statements.
SEC rules allow us to incorporate“incorporate by referencereference” into this prospectus much of the information we file with the SEC, which means that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate by reference into this prospectus is considered to be part of this prospectus. This prospectus incorporates by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (in each case, other than those documents or the portions of those documents deemed to be furnished and not filed in accordance with SEC rules) until the offering of the securities under the registration statement of which this prospectus forms a part is terminated or completed:
| | · | our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 filed with the SEC on March 26, 2015; |
| · | our Quarterly Reports on Form 10-Q for the fiscal quarter ended (i) March 31, 2014, filed with the SEC on May 13, 2014; (ii) June 30, 2015, filed with the SEC on August 13, 2015; and (iii) September 30, 2015, filed with the SEC on November 12, 2015; and |
| | · | our QuarterlyCurrent Report on Form 10-Q for the fiscal quarter ended March 31, 2015,8-K filed with the SEC on May 13,July 15, 2015, and November 19, 2015. |
Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and later information filed with the SEC may update and supersede some of the information included or incorporated by reference in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine if any of the statements in this prospectus or in any document previously incorporated by reference have been modified or superseded.
We will provide without charge to each person, including any beneficial owners, to whom this prospectus is delivered, upon his or her written or oral request, a copy of any or all documents referred to above which have been or may be incorporated by reference into this prospectus but not delivered with this prospectus, excluding exhibits to those documents unless they are specifically incorporated by reference into those documents. You may request a copy of these documents by writing or telephoning us at the following address:
Willamette Valley Vineyards, Inc.
8800 Enchanted Way SE
Turner, Oregon 97392
(503) 588-9463
Attention: Investor Relations (info@wvv.com)
This prospectus contains “forward-looking statements” that represent our beliefs, expectations, projections and predictions about future events. These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievement described in or implied by such statements. Actual results may differ materially from the expected results described in our forward-looking statements, including with respect to the correct measurement and identification of factors affecting our business or the extent of their likely impact, the accuracy and completeness of publicly available information relating to the factors upon which our business strategy is based or the success of our business.
In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should” or “will” or the negative thereof, variations thereof and similar expressions. Such statements are based on management’s current expectations and are subject to risks and uncertainties which may cause actual results to differ materially from those set forth in the forward-looking statements. There can be no assurance that such expectations or any of the forward-looking statements will prove to be correct, and actual results could differ materially from those projected or assumed in the forward-looking statements. We urge you to carefully review the disclosures we make concerning risks and other factors that may affect our business and operating results, including those made in the section of this Prospectus entitled “Risk Factors,” and in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014, as such risk factors may be updated in subsequent SEC filings, as well as our other reports filed with the SEC and in any prospectus supplement. We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this prospectus or any prospectus supplement. We do not intend, and we undertake no obligation, to update any forward-looking information to reflect events or circumstances after the date of this prospectus or any prospectus supplement or to reflect the occurrence of unanticipated events, unless required by law to do so.
RISK FACTORS
ThisYou should carefully consider the risks under the heading “Risk Factors” beginning on page 13 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on March 26, 2015, which information is incorporated by reference in this prospectus, summary contains a brief description ofand the additional risks and other information aboutin this offering. It does not contain allprospectus, any prospectus supplement and the information you might deem important indocuments incorporated by reference herein and therein before deciding whether to invest in our Series A Redeemable Preferred Stock,securities. If any of the identified risks actually occur, they could materially adversely affect our business, financial condition, operating results or prospects and you should carefully review this entire prospectus, including the documents incorporated herein by reference and particularly including the section below entitled “Risk Factors,” before making an investment decision. Further, where this summary or other sections of this prospectus purport to describe other instruments or documents, particularly including but without limitation the provisionstrading price of our articles of incorporation and the description of the designations, preferences, limitations and relative rights of our capital stock, readers should recognize that those summaries are necessarily incomplete, and in each case they are qualified in their entirety by reference to the actual text of such documents.
The Offering | This offering relates to the proposed issuance and sale of up to 1,445,783 shares of our Series A Redeemable Preferred Stock, no par value. The securities are being offered directly by the Company through its officers, none of whom will be compensated for their selling efforts. These securities will be issued in up to four offering periods, which will close on each of September 30, 2015; December 31, 2015; March 31, 2016; and June 30, 2016. We will issue shares of Series A Redeemable Preferred Stock on the first business day following the expiry of each offering period based on subscriptions we have accepted prior to that date and subject to the attainment of the minimum offering amount of $300,000 in gross proceeds from subscriptions accepted in this offering.
Certain financial rights are based upon the “original issue price” of the Series A Redeemable Preferred Stock, and that price has been set at $4.15 per share, regardless of the date purchased or the price paid for such shares.
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Offering Dates and Pricing | We believe that with the passage of time and the investments we expect to raise in this offering, the risk attendant to an investment in our Series A Redeemable Preferred Stock will decrease and, correspondingly, the value will increase. We are a small company and there is not, and there may never be, a market for these securities. As a result, we have arbitrarily established a time-based pricing schedule for such shares. However, our Series A Redeemable Preferred Stock has certain dividend and redemption features that necessarily implicate the original issue price of such shares, and we have established the original issue price for such purposes as $4.15 per share, regardless of the issue date or the actual purchase price of such shares.
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Dates Offered(1)
| Offering Price |
June 30, 2015 to September 30, 2015 | $4.15 |
October 1, 2015 to December 31, 2015 | $4.25 |
January 1, 2016 to March 31, 2016 | $4.35 |
April 1, 2016 to June 30, 2016 | $4.45 |
| (1) This offering will commence on the date the SEC declares effective the registration statement of which this prospectus forms a part.
The minimum amount to be raised in this offering is $300,000, and all funds from accepted subscriptions will be retained in escrow until such minimum offering amount has been reached. On the first business day following the end of each offering period (and assuming the prior or contemporaneous satisfaction of the minimum offering amount), and on the first business day following the end of each offering period thereafter, all funds received from subscriptions accepted during that period will be released from escrow.
Dividends on shares issued at the end of each offering period will be calculated from the date of issuance (which will coincide with the date upon which funds for the related subscription are released from escrow).
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Ranking | The Series A Redeemable Preferred Stock will rank senior in rights and preferences to our common stock and to any other class or series of our capital stock that does not indicate that it is pari passu with or senior to our Series A Redeemable Preferred Stock. Our Series A Redeemable Preferred Stock will rank junior in rights and preferences to any series of preferred stock issued in the future which provides that it is senior to our Series A Redeemable Preferred Stock.
Prospective investors should note that our articles of incorporation permit our board of directors to designate one or more classes or series of preferred stock from time to time in the future, and to establish the rights, preferences and limitations of each such class or series. Should our board of directors determine that it is in the best interests of the Company or our shareholders to designate and issue shares of preferred stock that have rights and preferences senior to those of the Series A Redeemable Preferred Stock, the board may establish such rights and may issue such capital stock without the approval of holders of the Series A Redeemable Preferred Stock or any other class or series of our capital stock.
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Dividends | The Series A Redeemable Preferred Stock will be entitled to receive dividends when and as declared by our board of directors out of funds legally available therefor, at a rate equal to 5.3% per annum based on the original issue price of $4.15 per share, or $0.22 per share per year. Dividends will run from the issue date for the relevant shares, which will occur on the first business day following that offering period. Dividends accrued but not paid will not bear interest or dividends but will be added to the liquidation preference of the Series A Redeemable Preferred Stock until declared and paid.
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Payment Support | The Series A Redeemable Preferred Stock will not be supported by a sinking fund or any other form of payment support, nor will they be entitled to participate specially in any aspect of our operations or assets.
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Liquidation Preference | Upon any merger, consolidation, sale of all or substantially all of the Company’s assets, reorganization (with certain exceptions for recapitalizations and similar events that do not affect the relative rights of the holders of our capital stock), or any other business combination, the effects of which include the liquidation or termination of the Series A Redeemable Preferred Stock, and following distributions to any class of senior securities, the holders of our Series A Redeemable Preferred Stock will be entitled to receive, prior and in preference to the holders of shares of common stock and any other junior class of securities, an amount in cash or other property equal to the original issue price, plus any dividends theretofore accrued but not paid. Thereafter, the Series A Redeemable Preferred Stock will have no rights to further assets or distributions.
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Redemption | At any time after June 1, 2021, the Company has the option, but not the obligation, to redeem all, but not less than all, of the then-outstanding shares of Series A Redeemable Preferred Stock by delivering written notice to the holders of record thereof. That notice will state a “record date” for the redemption, after which no further transfers of the Series A Redeemable Preferred Stock will be recorded on the Company’s stock transfer books, and after which no future dividends will accrue. Thereafter, upon surrender of the shares as so redeemed, the holder thereof will be entitled to receive an amount equal to (i) the original issue price; plus (ii) all accrued but unpaid dividends (prorated to reflect any partial periods); plus (iii) a redemption premium equal to 3% of the original issue price. From and after the record date for a redemption, if any, the holders thereof will not be entitled to interest or other earnings of any sort, whether or not the shares are promptly tendered.
The redemption rights described above do not preclude the Company from purchasing from time to time in open-market transactions or in a tender offer or other arrangement.
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Voting Rights | The Series A Redeemable Preferred Stock has no voting rights except as required by the Oregon Business Corporation Act, and as to certain limited matters summarized in “Protective Provisions” below. Without limiting the generality of the foregoing, such shares are not entitled to vote in the election of directors.
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Protective Provisions | Without the approval of a majority of the shares of Series A Redeemable Preferred Stock, voting separately as a single class, present at a meeting and voting on the matter, the Company may not pay any dividend or establish or maintain any sinking fund on any common stock or any class of preferred stock that is pari passu with or junior to the Series A Redeemable Preferred Stock.
Prospective investors are advised that the Company’s articles of incorporation permit our board of directors to designate and issue shares of preferred stock in one or more series having rights and preferences senior to the Series A Redeemable Preferred Stock, without the approval of the holders of any class of our capital stock.
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Market Listing | We intend to list the Series A Redeemable Preferred Stock on the Nasdaq Capital Market when and if we meet the criteria for initial listing of those securities. Among other things, those criteria include a minimum bid price of $4.00, a minimum “public float” (the value of shares of this class held by non-affiliates of the Company) of at least $3,500,000, and no fewer than 100 “round lot” security holders. There is no assurance that we will meet these requirements, and the escrow described herein is not conditioned upon our achievement of any minimum value of securities sold. This escrow thus would not preclude our consummating this offering without listing these securities. Similarly, although we intend to list the securities if we meet the initial listing requirements, we are not required to do so, and investors would have no ability to require us to complete such a listing. Moreover, even if we do list the securities on the Nasdaq Capital Market, the number of shares and the market capitalization of the Series A Redeemable Preferred Stock will be relatively small, and you should not presume that such a market listing will assure that an investment in the preferred stock will be liquid.
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An investment in our Series A Redeemable Preferred Stock involves a variety ofsecurities. Additional risks and uncertainties any of which, if occurring alone or in combination, could cause material harm to our business, could materially and adversely affect our financial condition, results of operations, and cash flows, or could otherwise materially diminish the value of our capital stock. A list of the known risk factors that relate to our Series A Redeemable Preferred Stock in particular are set forth immediately below under the heading, “Risks that Affect an Investment in Our Preferred Stock.” This section also includes a segment entitled “Risks that Affect Our Company,” which risks are updated from time to time in Item 1A (“Risk Factors”) of our Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q. Such updates are incorporated herein by reference; however, readers should note that as with other disclosures appearing in such reports and incorporated by reference into this prospectus, such risk factors are accurate only as of the date on the cover of the report, and the related events and circumstances are subject to change thereafter.
Risks that Affect an Investment in Our Preferred Stock
There is no established market for the Series A Redeemable Preferred Stock, and such a market may never develop
The Series A Redeemable Preferred Stock is not presently listed on any securities exchange or quoted in any interdealer quotation system. As of the commencement of this offering, this is a new issue of a new class of securities, and no securities will be outstanding. There is therefore no established trading market for these securities and we cannot offer assurances that any such market will ever develop. Further, although we intend to list the Series A Redeemable Preferred Stock on the Nasdaq Capital Market when and if we meet the criteria for initial listing of those securities, there is no assurance that we will ever meet these requirements, and there is no escrow, holdback or other arrangement that would preclude our consummating this offering without listing these securities. Similarly, although we intend to list the securities if we meet the initial listing requirements, we are not required to do so, and investors would have no ability to require us to complete such a listing. Moreover, even if we do list the securities on the Nasdaq Capital Market, the maximum number of shares we will be permitted to sell in this offering will be 1,445,783, and we may ultimately sell fewer shares. There is no minimum number of shares that must be sold in order for us to complete this offering. As a result, there may be a very limited trading market for shares of our Series A Redeemable Preferred Stock, and even if the Series A Redeemable Preferred Stock is ultimately listed on the Nasdaq, we expect that the trading market will be very thin. Accordingly, shareholders may find it difficult or impossible to sell their shares for a price equal to or greater than the original purchase price, at a price that they would consider reasonable, or at all. You should therefore not invest in our Series A Redeemable Preferred Stock unless you can bear the risk of a complete loss of your investment, and unless you can withstand a partial or complete lack of liquidity in your investment.
There may be times at which you can purchase Series A Redeemable Preferred Stock from existing shareholders at prices less than the then-applicable offering price.
As noted elsewhere in this prospectus, the offering price for the Series A Redeemable Preferred Stock sold in this offering will increase over time and the corresponding dividend rate will decrease over time because the 5.3% dividend rate will always be based on the initial issue price of $4.15 regardless of the purchase price paid for the Series A Redeemable Preferred Stock. The purpose of this increase in the price of the Series A Redeemable Preferred Stock is to reflect an increase in value that our board of directors believes will accompany a reduction in risk as time passes. That is, over time we expect to raise capital in this offering that will accelerate the completion of the projects that form the primary purpose of this offering. We also expect to work toward completion of those projects using the proceeds of this offering and, if management deems it appropriate, using additional funds from working capital. We have thus established a time-based pricing schedule as a means we believe is a reasonably proportionate, but still arbitrary, basis for estimating the appropriate prices of our stock. As a result, it is possible that existing stockholders who have purchased shares in this offering may be willing to sell such shares at a price less than the then-applicable offering price. Such shareholders will not be able to sell their shares on a national securities market because we do not expect to completepresently know or that we currently deem immaterial may also impair our business, financial condition, operating results and prospects and the listing process until the offering has been completed (if at all), and so it may be difficult or impossible to locate willing sellers even though such sellers may exist. Nonetheless, we cannot make assurances that you could not buy sharestrading price of Series A Redeemable Preferred Stock from another person at a price less than the offering price.our securities.
The offering price for, andWe intend to use the dividend rates of, the Series A Redeemable Preferred Stock have been arbitrarily determined.
The offering price for the Series A Redeemable Preferred Stock, as well as the dividend rate, have been determined arbitrarily by our board of directors based on qualitative factors, such as a diminishing risk profile over time, which our board of directors believes are reasonable and appropriate. The Company has not undertaken a detailed quantitative or qualitative analysis of these factors, nor has the Company or any investment banker or other advisor made a determination as to the qualitative appropriateness of the dividend rate.
Further, the purchase price of the Series A Redeemable Preferred Stock in this offering will increase over time, again based upon qualitative factors that our board of directors believes are appropriate, including what our board of directors believes will be a reduction in the risk profile of such shares over time. However, this price increase has been established arbitrarily, and the Company can offer no assurance that either the increase in price is concomitant with or proportionate to a decrease in risk, or that the purchase price as so established will be equal to or greater than any market price of the shares which may exist at a given time in the future. Indeed, the purchase price for shares purchasednet proceeds from the Company in this offering will increase even if you might purchase sharessale of Series A Redeemable Preferred Stock from existing shareholders at a lower price. As such, you should not rely upon the offering price or the dividend rate as an effective measure of the fair market value of such shares.
The Company may be unable to pay accumulated dividends on the Series A Redeemable Preferred Stock
The Series A Redeemable Preferred Stock bears a cumulative 5.3% dividend based upon the original issue price , or $0.22 per share per annum . However, prior to the declaration and payment of dividends our board of directors must determine, among other things, that funds are available out of the surplus of the Company and that the payment would not render us insolvent or compromise our ability to pay our obligations as they come due in the ordinary course of business. Additionally, our existing credit facility limits, and future debt obligations in the future may limit, both our legal and our practical ability to declare and pay dividends. As a result, although the Series A Redeemable Preferred Stock will continue to earn a right to receive dividends, the Company’s ability to pay dividends will depend, among other things, upon our ability to generate excess cash. Further, although sharesany of our Series A Redeemable Preferred Stock will earn cumulative dividends, unpaid dividends will not, themselves, accumulate (as might compounding interest onsecurities for general corporate purposes, unless we state otherwise in a debt security, for example).
prospectus supplement. We may issue securitiestemporarily invest funds that have rights and preferences senior to the Series A Redeemable Preferred Stock
Our articles of incorporation permit our board of directors , with the approval of a majority of our outside directors, to designate one or more classes or series of preferred stock from time to time in the future, and to establish the rights, preferences and limitations of each such class or series. Should our board of directors determine that it is in the best interests of the Company or our shareholders to designate and issue shares of preferred stock that have rights and preferences senior to those of the Series A Redeemable Preferred Stock, the board , with the approval of our outside directors, may establish such rights and may issue such capital stock without the approval of holders of the Series A Redeemable Preferred Stock or any other class or series of our capital stock. Such rights and preferences may include dividend, sinking-fund, redemption and liquidation features that may increase the risk that we will be unable to meet all our obligations to the holders of Series A Redeemable Preferred Stock. They may also include a wide variety of other rights and preferences, such as voting rights, protective provisions, and other governance rights that are not available to the holders of the Series A Redeemable Preferred Stock. Any such actions may adversely affect the value or the price of the Series A Redeemable Preferred Stock.
We have the right, but not the obligation, to redeem shares of Series A Redeemable Preferred Stock
We are entitled, but we are not required, to redeem the shares of Series A Redeemable Preferred Stock at any time after June 1, 2021. If we decide to redeem these shares, we will do so by issuing a redemption notice that will include a record date for the redemption, and thereafter the Series A Redeemable Preferred Stock will no longer bear dividends and will represent only the right to receive, upon delivery of such shares, an amount equal to the original issue price, plus accrued and unpaid dividends, plus a redemption premium of 3% of the original issue price. Investors should not expect that they have a right to perpetual payment of dividends, and should be aware that a proposed redemption of the shares may make it difficult or impossible to sell the shares for a higher price, even if the market price for such shares had previously been higher. Further, an actual notice of redemption will state a “record date” for the redemption, after which no further transfers of the Series A Redeemable Preferred Stock will be recorded on the Company’s stock transfer books, thus making it impossible to transfer record ownership of the stock even if the redemption payment has not yet been made.
We may use the proceeds of this offering as working capital rather than for our planned uses
We are presently planning to use capital raised in this offering to support the Company’s development and construction of a winery and tasting room in the Eola Hills near Hopewell, Oregon for purposes of making small lots of high quality Pinot noir and Chardonnay, and a vineyard development and winery to showcase small lots of high quality Cabernet Sauvignon and other Bordeaux varieties near Walla Walla, Washington. A portion of the proceeds also may be used to plant Pinot noir and Pinot gris on land the Company owns east of Gaston, Oregon. These projects are underway, and the proceeds of this offering are intended to accelerate their completion, but the projects are not contingent upon the success of this offering. Moreover, the estimated aggregate remaining capital cost of these projects, in the aggregate, is approximately $5.6 million, which is equal to the estimated net proceeds of this offering; however, we cannot offer assurances that the ultimate capital investment will be equal to the offering proceeds.
Accordingly, the use of proceeds in this offering is not restricted to use in these projects, and, following receipt of subscriptions for the minimum offering amount of $300,000, funds received from this offering will be made available to the Company as general working capital, to be used as our board of directors determines. If the proceeds of this offering are insufficient to allow us to complete the projects, we may fund completion with working capital, or we may borrow additional funds under available lines of credit or may seek alternative debt financing. Further, we may abandon the winery projects, or may delay the timing or modify the scope of those projects as the board determines is appropriate. Moreover, an investment in our Series A Redeemable Preferred Stock represents an investment in the Company as a whole, and not in this specific project or in any other aspect of our operations.
Proceeds from sales of Series A Redeemable Preferred Stock will be made available to the Company as general working capital
The minimum offering amount for this offering is $300,000. Until we receive funds from accepted subscriptions totaling the minimum offering amount, we will retain funds from all accepted subscriptions in escrow. On the first business day following the expiry of the offering period in which we achieve the minimum investment amount, we will release all proceeds from escrow. Thereafter, the escrow will be conditioned only upon the expiry of the various offering periods as described herein, and after the initial escrow release, we intend to make the proceeds from accepted subscriptions immediately available to the Company. The minimum offering amount is substantially less than the capital budget for the projects we intend to support with this offering. Among other things, this means we may receive proceeds that are insufficient to complete those projects. If this occurs, we may find it necessary to delay or abandon these projects. Either of these outcomes may reduce our revenues or net income, which would create greater uncertainty as to our ability to pay dividends on the Series A Redeemable Preferred Stock.
Further, unless and until there are outstanding shares of Series A Redeemable Preferred Stock held by non-affiliates of the Company having an aggregate market value of at least $3,500,000, we will be ineligible to list the Series A Redeemable Preferred Stock on the Nasdaq Capital Market, which will significantly limit the liquidity of an investment in such shares.
Shares of our Series A Redeemable Preferred Stock are not convertible into common stock
Our Series A Redeemable Preferred Stock is not convertible into or exchangeable for shares of our common stock, nor will it be so convertible or exchangeable at any time in the future. You should invest in our Series A Redeemable Preferred Stock, if at all, based upon the value you believe is attendant to an investment in that class and series of securities. Fluctuations in the value of our common stock will not directly affect the value of our preferred shares.
Our Series A Redeemable Preferred Stock will participate only to a limited extent in the distribution of our assets upon liquidation or upon a merger, consolidation, sale of assets, or other business combination transaction
Because our Series A Redeemable Preferred Stock is not convertible into or exchangeable for shares of our common stock, its rights upon a liquidation of the Company are limited. Although such preferred stock will receive a preferential return of capital and accrued but unpaid dividends (and, in the case of a liquidation during the redemption period, the redemption premium) prior to any payments or distributions to the holders of common stock, once those preferential amounts are paid, holders of the Series A Redeemable Preferred Stock will not have a right to participate in the remainder of the Company’s assets available for distribution.
Shares of our Series A Redeemable Preferred Stock have very limited voting rights and, among other things, do not have the right to vote for the election of directors
Our Series A Redeemable Preferred Stock is nonvoting except as required by the Oregon Business Corporation Act. As a holder of such preferred stock, you would not have the right to attend meetings of the holders of common stock or to vote upon matters such as the election of directors, the approval of equity incentive plans, or other arrangements which are subject to a vote of the common shareholders.
Our Series A Redeemable Preferred Stock is not a debt instrument
Although our Series A Redeemable Preferred Stock is senior in preference to our common stock, it will be subordinated to all our debt obligations, both secured and unsecured. Our Series A Redeemable Preferred Stock is not insured, is not guarantied , is not supported by a sinking fund, and is not backed by any collateral of any sort.
Certain of the rights applicable to owners of our Series A Redeemable Preferred Stock do not have a quantifiable market value and cannot be sold or otherwise transferred separately from shares of such stock
Owners of our Series A Redeemable Preferred Stock are entitled, by virtue of their ownership, to certain intangible benefits associated with an investment in our company. These benefits include rights to participate in various discount programs, marketing incentives, and other rights. The value of these benefits, if any, is indeterminable and is not associated with the number of shares of Series A Redeemable Preferred Stock one owns. Similarly, these rights may not be transferred separately from our Series A Redeemable Preferred Stock (although a transfer of fewer than all of an investor’s preferred shares will allow both the transferor and the transferee to participate in such intangible rights). We have not attempted to establish a value for these benefits, and we do not consider them material to the determination of the price or value of our Series A Redeemable Preferred Stock.
Risks that Affect Our Company
Agricultural risks could adversely affect the Companyimmediately use in short- and medium-term marketable securities.
Winemaking and grape growing are subject to a variety of agricultural risks. Various diseases, pests, fungi, viruses, drought, frost and certain other weather conditions can affect the quantity or quality of grapes available to the Company, decreasing the supply of the Company’s products and negatively impacting profitability. In particular, certain of the Company’s vines are not resistant to phylloxera; accordingly, those vines are particularly at risk to the effects from an infestation of phylloxera. Phylloxera is a pest that attacks the rootstocks of wine grape plants. Vineyards in the United States, including some in Oregon and some owned by us, have been infested with phylloxera. Since May of 1992, the Company’s vineyard properties have been planted with rootstocks believed to be resistant to phylloxera. However, rootstocks planted by the Company prior to 1992 are not resistant. There can be no assurance that the Company’s existing vineyards, or new plantings, will not become susceptible to current or new strains of phylloxera. Pierce’s Disease is a vine bacterial disease. It kills grapevines and there is no known cure. Small insects called Sharpshooters spread this disease. A new strain of the Sharpshooter was discovered in Southern California and is believed to be migrating north. The Company is actively supporting the efforts of the agricultural industry to control this pest and is making every reasonable effort to prevent an infestation in its own vineyards. The Company cannot, however, guarantee that it will succeed in preventing contamination in its vineyards. Future government restrictions regarding the use of certain materials used in grape growing may increase vineyard costs and/or reduce production. Additionally, long-term changes in weather patterns could adversely affect the Company.
The Company may not be able to grow or acquire enough quality fruit for its wines
The adequacy of the Company’s grape supply is influenced by consumer demand for wine in relation to industry-wide production levels. While the Company believes that it can secure sufficient supplies of grapes from a combination of its own production and from grape supply contracts with independent growers, the Company cannot be certain that grape supply shortages will not occur. A shortage in the supply of wine grapes could result in an increase in the price of some or all grape varieties and a corresponding increase in wine production costs.
Loss of key employees could harm the Company’s reputation and business
The Company’s success depends to some degree upon the continued service of a number of key employees. The loss of the services of one or more of these key employees, including the President and Chief Financial Officer, could harm the Company and its reputation and negatively impact its profitability, particularly if one or more of the Company’s key employees resigns to join a competitor or to form a competing company.
The Company’s ability to operate requires utilization of the line of credit
The Company’s cash flow from operations historically has not been sufficient to provide all funds necessary for the Company’s operations. The Company has entered into a line of credit agreement to provide such funds and entered into term loan arrangements, the proceeds of which were used to acquire certain operations, construct and remodel our facilities, and pay down a previous line of credit. There is no assurance that the Company will be able to comply with all conditions under its credit facilities in the future or that the amount available under the line of credit facility will be adequate for the Company’s future needs. Failure to comply with all conditions of the credit facilities or to have sufficient funds for operations could adversely affect the Company’s results of operations and shareholder value.
Costs of being a publicly-held company may put the Company at a competitive disadvantage
As a public company, the Company incurs substantial costs that are not incurred by its competitors that are privately-held. These compliance costs may result in the Company’s wines being more expensive than those produced by its competitors and/or may reduce profitability compared to such competitors.
The Company faces significant competition which could adversely affect profitability
The wine industry is intensely competitive and highly fragmented. The Company’s wines compete in several premium wine market segments with many other premium domestic and foreign wines, with imported wines coming from the Burgundy and Bordeaux regions of France, as well as Italy, Chile, Argentina, South Africa, New Zealand and Australia. The Company’s wines also compete with popular priced generic wines and with other alcoholic and, to a lesser degree, non-alcoholic beverages, for shelf space in retail stores and for marketing focus by the Company’s independent distributors, many of which carry extensive brand portfolios. A result of this intense competition has been and may continue to be upward pressure on the Company’s selling and promotional expenses. In addition, the wine industry has experienced significant consolidation. Many of the Company’s competitors have greater financial, technical, marketing and public relations resources than the Company does. Company sales may be harmed to the extent it is not able to compete successfully against such wine or alternative beverage producers’ costs. There can be no assurance that in the future the Company will be able to successfully compete with its current competitors or that it will not face greater competition from other wineries and beverage manufacturers.DIVIDEND POLICY
The Company competes for shelf space in retail stores and for marketing focus by its independent distributors, most of whom carry extensive product portfolios
Nationwide, the Company sells its products primarily through independent distributors and brokers for resale to retail outlets, restaurants, hotels and private clubs across the United States and in some overseas markets. Sales to distributors are expected to continue to represent a substantial portion of the Company’s net revenue in the future. A change in the relationship with any of the Company’s significant distributors could harm the Company’s business and reduce Company sales. The laws and regulations of several states prohibit changes of distributors, except under certain limited circumstances, making it difficult to terminate a distributor for poor performance without reasonable cause, as defined by applicable statutes. Any difficulty or inability to replace distributors, poor performance of the Company’s major distributors or the Company’s inability to collect accounts receivable from its major distributors could harm the Company’s business. There can be no assurance that the distributors and retailers the Company uses will continue to purchase the Company’s products or provide Company products with adequate levels of promotional support. Consolidation at the retail tier, among club and chain grocery stores in particular, can be expected to heighten competitive pressure to increase marketing and sales spending or constrain or reduce prices.
Fluctuations in quantity and quality of grape supply could adversely affect the Company
A shortage in the supply of quality grapes may result from a variety of factors that determine the quality and quantity of the Company’s grape supply, including weather conditions, pruning methods, diseases and pests, the ability to buy grapes on long and short term contracts and the number of vines producing grapes. Any shortage in the Company’s grape production could cause a reduction in the amount of wine the Company is able to produce, which could reduce sales and adversely impact the Company’s results from operations. Factors that reduce the quantity of the Company’s grapes may also reduce their quality, which in turn could reduce the quality or amount of wine the Company produces. Deterioration in the quality of the Company’s wines could harm its brand name and could reduce sales and adversely impact the Company’s results of operations.
Contamination of the Company’s wines would harm the Company’s business
The Company is subject to certain hazards and product liability risks, such as potential contamination, through tampering or otherwise, of ingredients or products. Contamination of any of the Company’s wines could cause it to destroy its wine held in inventory and could cause the need for a product recall, which could significantly damage the Company’s reputation for product quality. The Company maintains insurance against certain of these kinds of risks, and others, under various insurance policies. However, the insurance may not be adequate or may not continue to be available at a price or on terms that are satisfactory to the Company and this insurance may not be adequate to cover any resulting liability.
A reduction in consumer demand for premium wines could harm the Company’s business
There have been periods in the past in which there were substantial declines in the overall per capita consumption of beverage alcohol products in the United States and other markets in which the Company participates. A limited or general decline in consumption in one or more of the Company’s product categories could occur in the future due to a variety of factors, including: a general decline in economic conditions; increased concern about the health consequences of consuming beverage alcohol products and about drinking and driving; a trend toward a healthier diet including lighter, lower calorie beverages such as diet soft drinks, juices and water products; the increased activity of anti-alcohol consumer groups; and increased federal, state or foreign excise and other taxes on beverage alcohol products. The competitive position of the Company’s products could also be affected adversely by any failure to achieve consistent, reliable quality in the product or service levels to customers.
Changes in consumer spending could have a negative impact on the Company’s financial condition and business results
Wine sales depend upon a number of factors related to the level of consumer spending, including the general state of the economy, federal and state income tax rates, deductibility of business entertainment expenses under federal and state tax laws, and consumer confidence in future economic conditions. Changes in consumer spending in these and other regions can affect both the quantity and the price of wines that customers are willing to purchase at restaurants or through retail outlets. Reduced consumer confidence and spending may result in reduced demand for the Company’s products, limitations on the Company’s ability to increase prices and increased levels of selling and promotional expenses. This, in turn, may have a considerable negative impact upon the Company’s sales and profit margins.
Increased regulation could adversely affect the Company
The wine industry is subject to extensive regulation by the Federal Alcohol Tobacco Tax and Trade Bureau (“TTB”) and various foreign agencies, state liquor authorities, such as the Oregon Liquor Control Commission (“OLCC”), and local authorities. These regulations and laws dictate such matters as licensing requirements, trade and pricing practices, permitted distribution channels, permitted and required labeling, and advertising and relations with wholesalers and retailers. Any expansion of the Company’s existing facilities or development of new vineyards or wineries may be limited by present and future zoning ordinances, environmental restrictions and other legal requirements. In addition, new regulations or requirements or increases in excise taxes, income taxes, property and sales taxes or international tariffs, could affect the Company’s financial condition or results of operations. Recently, many states have considered proposals to increase, and some of these states have increased, state alcohol excise taxes. New or revised regulations or increased licensing fees, requirements or taxes could have a material adverse effect on the Company’s financial condition or results of operations. There can be no assurance that new or revised regulations or increased licensing fees and requirements will not have a material adverse effect on the Company’s business and its results of operations and its cash flows.
The Company’s common stock is thinly traded, and therefore not as liquid as other investments.
The trading volume of the Company’s common stock on NASDAQ is consistently “thin,” in that there is not a great deal of trading activity on a daily basis. Because the average active trading volume is thin, there is less opportunity for shareholders to sell their shares of the Company’s common stock on the open market, resulting in the common stock being less liquid than common stock in other publicly traded companies. Shareholders may therefore have limited opportunities to sell our common stock for the prices they paid, or at all, and they may experience significant fluctuations in the reported sale prices. This may have a number of adverse effects upon the Company, including an inability to use our common stock as a source of additional capital, a disproportionately high regulatory burden and cost, and an increased risk of enforcement action and civil litigation relating to our securities.
The primary purpose of this offering is to raise up to an additional $6,000,000 million of capital (before offering expenses) to support the Company's development and construction of a winery and tasting room in the Eola Hills near Hopewell, Oregon for purposes of making small lots of high quality Pinot noir and Chardonnay, and a vineyard development and winery to showcase small lots of high quality Cabernet Sauvignon and other Bordeaux varieties near Walla Walla, Washington. A portion of the proceeds also may be used to plant Pinot noir and Pinot gris on land the Company owns east of Gaston, Oregon and these and other wine grape varieties on other properties the Company owns or may acquire. The estimated aggregate cost of these projects is approximately $5.6 million, which is approximately equal to the expected net proceeds of this offering. The minimum offering amount in this offering is $300,000, and after we have accepted subscriptions having gross proceeds equal to or exceeding the minimum offering amount, funds will be made available to the Company on the first business day following the end of each offering period. However, the proceeds of this offering are not restricted and may be used to fund the Company’s working capital needs and for general corporate purposes. The projects described above are already underway, and although it is our intention to use this offering to help support and accelerate the completion of the projects, the funds from this offering will be made generally available as working capital. In turn, we plan to use a portion of our working capital to complete these projects, and in the discretion of the board of directors we also may borrow under our existing credit facility or may seek additional debt financing to promote the completion of these projects.
Sales of our Series A Redeemable Preferred Stock are being sold in four offering periods, one of which will close at the end of each of the first four quarters following the commencement of this offering. Funds from accepted subscriptions will be held in escrow pending the closing of each offering period; however, there is no minimum subscription proceeds that must have been received in order to permit the release of funds from escrow. Accordingly, investors should not expect that the Company will receive any minimum amount of capital from this offering, or that any minimum number or value of shares will be sold in this offering.
TheOur Series A Redeemable Preferred Stock is entitled to cumulative dividends accruing annually each year, at a rate of 5.3% per annum on the original issue price of such shares, or $0.22 per share per annum, beginning on the first calendar day of the quarter following the applicable offering period for such shares, payable out of funds legally available therefor, when and as approved by our board of directors. Dividends will accrue at a rate of 5.3% per annum based on an established original issue price of such shares, which is equal to $4.15 per share regardless of the price actually paid toreceived by the Company upon original issuance of the shares, and regardless of the price paid in the aftermarket, if any. Dividends accrued but not paid will not bear interest or dividends but will be added to the liquidation preference of the Series A Redeemable Preferred Stock until declared and paid. The payment of dividends will depend upon a number of factors, including our liquidity, financial condition and results of operations, strategic growth plans, tax considerations, statutory and regulatory limitations and general economic conditions. For the foregoing reasons, there can be no assurance that we will pay any dividends in any future period. Accrued but unpaid dividends, whether or not declared, will be added to the liquidation preference until paid, but will not bear additional dividends or earn interest or similar returns.
We have never paid dividends on our common stock and we have no expectation to pay such dividends in the foreseeable future. We are not permitted to declare or pay dividends on our common stock unless and until we have paid all accrued but unpaid dividends, and any redemption premium, owing on our Series A Redeemable Preferred Stock.
Under certain circumstances, the Company is entitled to redeem all, but not less than all, of the Series A Redeemable Preferred Stock then outstanding. Any such redemption may occur at any time after June 1, 2021. If a redemption occurs, we will notify shareholders of record of the redemption (including the redemption date) electronically or by mail not less than thirty (30) days prior to the record date for such redemption. As of the record date, shares of Series A Redeemable Preferred Stock will be ineligible for future transfers and will represent only the right to receive, upon tender of the shares, an amount in cash equal to the original issue price of $4.15 per share, together with (i) all theretofore accrued but unpaid dividends; and (ii) a redemption premium amounting to 3% of the original issue price. The redemption premium also will be payable upon the occurrence of any liquidation event that occurs during the redemption period. The Series A Redeemable Preferred Stock will not earn dividends after the record date for redemption. As with other financial rights of the Series A Redeemable Preferred Stock, the redemption price is equal to the original issue price, $4.15 per share, regardless of the actual purchase price or the amount paid.
Capital Stock Currently Outstanding
We are authorized under our articles of incorporation, as amended, to issue up to 10,000,000 shares of preferred stock, in one or more series as designated from time to time by our board of directors, and up to 10,000,000 shares of common stock. As of July 30 ,December 15, 2015 there were 4,979,7594,989,278 shares of our common stock outstanding, and no1,054,198 shares of preferred stockSeries A Redeemable Preferred Stock outstanding. As of the date of this prospectus we were engaged in a continuous offering of shares of our Series A Redeemable Preferred Stock. Assuming the full subscription of thisthat offering, and assuming no additional issuances of common stock during the pendency hereof, upon completion this offering we would have outstanding a total of 4,979,7594,989,278 shares of common stock, no par value, and 1,445,7831,444,636 shares of preferred stock, no par value.
Preferred Stock
Our articles of incorporation authorize our board of directors to issue from time to time up to 10,000,000 shares of preferred stock in one or more series with the preferences, limitations and relative rights thereof as may be fixed from time to time by the board of directors for each series before the issuance of any shares of that series. In addition, after the board of directors has established a series of preferred stock, the board of directors may increase or decrease the number of shares contained in the series, but not below the number of shares then issued, or eliminate the series where no shares have been issued. Actions taken by our board of directors with regard to the authorization and issuance of preferred stock require the approval of a majority of our outside directors. Our board of directors has determined that each of our directors other than Mr. Bernau and Mr. Ellis is an “outside director” for purposes of authorizing the Series A Redeemable Preferred Stock, and setting forth the preferences, limitations and relative rights thereto.no par value.
Series A Redeemable Preferred SharesStock
Dividends.
Holders of the Series A Redeemable Preferred Stock are entitled to receive, when, as and if declared by the board of directors, out of funds legally available for the payment of dividends, cumulative cash dividends at the rate of 5.3% per annum of the original issue price of such shares, which is $4.15 per share as described above. Dividends are thus $0.22 per share. Dividends on the Series A Redeemable Preferred Stock accrue daily and are cumulative beginning on the first calendar day of the quarter following the applicable offering period for such shares until the record date for redemption on the basis of such price. Accumulated dividends on our Series A Redeemable Preferred Stock will not bear interest or further dividends, and holders of our Series A Redeemable Preferred Stock will not, except in the case of the Company’s optional redemption of the Series A Redeemable Preferred Stock, be entitled to any dividends in excess of full cumulative dividends.
Our board of directors will not authorize and we will not declare, pay or set apart funds for the payment of any dividend or other distribution with respect to any junior stock (defined below) (other than in shares of junior stock) unless all cumulative dividends with respect to our Series A Redeemable Preferred Stock have been paid or funds have been set apart for payment of such dividends.
Optional Redemption.
We may redeem all, but not less than all, of the Series A Redeemable Preferred Stock on or after June 1, 2021, at a redemption price equal to the original issue price of such shares ($4.15 per share regardless of the price paid for such shares), plus all accrued and unpaid dividends (whether or not earned or declared) to the redemption date, plus a redemption premium equal to 3% of the liquidation preference for the Series A Redeemable Preferred Stock. A redemption in connection with a liquidation event (such as a merger, sale of all or substantially all of the Company’s assets, or similar reorganization) would result in the payment of the redemption premium in addition to theretofore accrued but unpaid dividends.
Ranking.
The Series A Redeemable Preferred Stock ranks: (i) senior to the common stock and any other shares of stock that we may issue in the future, the terms of which specifically provide that such stock ranks junior to the Series A Redeemable Preferred Stock, in each case with respect to payment of dividends and amounts upon liquidation, dissolution or winding up (“junior shares”); (ii) equal to any shares of stock that we may issue in the future, the terms of which specifically provide that such stock ranks on parity with the Series A Redeemable Preferred Stock, in each case with respect to payment of dividends and amounts upon liquidation, dissolution or winding up (“parity shares”); (iii) junior to all other shares of stock issued by us, the terms of which specifically provide that such stock ranks senior to the Series A Redeemable Preferred Stock, in each case with respect to payment of dividends and amounts upon liquidation, dissolution or winding up (“senior shares”); and (iv) junior to all our existing and future indebtedness.
Liquidation Preference. If we merge, consolidate, sell all or substantially all of our assets, reorganize (with certain exceptions for recapitalizations and similar events that do not affect the relative rights of the holders of our capital stock), or effect any other business combination, the effects of which include the liquidation or termination of the Series A Redeemable Preferred Stock, then the holders of the Series A Redeemable Preferred Stock will have the right to receive the original issue price per share, plus all accrued and unpaid dividends (whether or not earned or declared) to, but excluding, the date of payment, before any payments are made to the holders of the common stock and any other junior shares if any.that may then exist. In addition, if the liquidation occurs during the redemption period, the holders of the Series A Redeemable Preferred Stock would receive a redemption premium equal to 3% of the original issue price of $4.15 per share. The rights of the holders of the Series A Redeemable Preferred Stock to receive the liquidation preference are subject to the proportionate rights of holders of each other future series or class of parity shares and subordinate to the rights of senior shares.
Voting Rights.
Without the approval of the holders of a majority of the shares of Series A Redeemable Preferred Stock, voting separately as a single class, we may not pay any dividend or establish or maintain any sinking fund on any common stock or any class of preferred stock that is pari passu with or junior to the Series A Redeemable Preferred Stock unless the Company has paid all accrued but unpaid dividends and any redemption premium owing on our Series A Redeemable Preferred Stock. Other than the voting right described in the preceding sentence, holders of the Series A Redeemable Preferred Stock generally do not have any voting rights, except as otherwise required by the Oregon Business Corporation Act.
No Maturity.
The Series A Redeemable Preferred Stock does not have any stated maturity and is not subject to any sinking fund or mandatory redemption. Accordingly, the shares of the Series A Redeemable Preferred Stock will remain outstanding indefinitely unless we decide to redeem them.
No Conversion.
The Series A Redeemable Preferred Stock is not, pursuant to its terms, convertible into or exchangeable for any other securities or property.
Special Benefits for Holders of Series A Redeemable Preferred Stock.
Each holders of Series A Redeemable Preferred Stock will be entitled to receive the following additional benefits:
| | · | priority wine allocations from the two new estate vineyards funded by this offering beginning with the 2017 release; |
| | · | rights to purchase a portion of the Founders’ Block Pinot Noir beginning with the 2018 release; |
| | · | a 25% discount on wine purchases made directly from the winery; |
| | · | priority access to winery suite reservations; |
| | · | reports on winery developments seeking shareholder feedback and involvement; |
| | · | priority access to appointment only vineyard tasting experiences; and |
| | · | certain other items of nominal value. |
The value of these benefits, if any, is indeterminable and is not associated with the number of shares of Series A Redeemable Preferred Stock one owns. Similarly, these rights may not be transferred separately from our Series A Redeemable Preferred Stock (although a transfer of fewer than all of an investor’s preferred shares will allow both the transferor and the transferee to participate in such intangible rights). We have not attempted to establish a value for these benefits, and we do not consider them material to the determination of the price or value of our Series A Redeemable Preferred Stock.
Common Stock
Voting Rights.
Holders of the common stock are entitled to one vote for each share of common stock held of record on the applicable record date on all matters submitted to a vote of shareholders. A corporate action voted on by shareholders generally is approved, provided a quorum is present, if the votes cast within the voting group favoring the action exceed the votes cast opposing the action. Holders of the common stock are not entitled to cumulate their votes in the election of directors.
Dividend Rights.
Holders of the common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available for that purpose, subject to any preferential dividend rights or other preferences granted to the holders of any of the then-outstanding shares of preferred stock.
Rights Upon Liquidation.
In the event of our liquidation, dissolution or winding up, whether voluntary or involuntary, the holders of the common stock are entitled to share ratably in all remaining assets available for distribution to shareholders after payment of, or provision for, our liabilities, subject to prior distribution rights of shares of the preferred stock, if any, then outstanding.
Preemptive Rights.
Holders of the common stock do not have any preemptive rights to purchase, subscribe for or otherwise acquire any unissued or treasury shares or other of our securities.
Transfer Agent and Registrar
The Transfer Agent and Registrar for our Series A Redeemable Preferred Stock is OTR, Inc. Its address is 1001 SW Fifth Avenue, Suite 1550, Portland, Oregon 97201, and its telephone number is (503) 225-0375.
The Transfer Agent and Registrar for our common stock is Broadridge Corporate Issuer Solutions, Inc.. Its address is 51 Mercedes Way, Edgewood, NJ 11717, and its telephone number is (800) 353-0103.
Nasdaq Listing
The Series A Redeemable Preferred Stock is not presently listed on the Nasdaq Capital Market under the symbol “WVVIP.” any securities exchange or quoted in any interdealer quotation system. As of December 15, 2015, there were 1,445,783 shares of Series A Redeemable Preferred Stock authorized, of which 1,054,198 shares were outstanding, and 391,585 shares remained unissued. These shares are listed for trading on the commencementNasdaq Capital Market; however, as of this offering, this is a new issue of a new class of securities,December 15, 2015, no such shares were reported to have been traded, and no securities will be outstanding. Therethere is therefore no established trading market for these securities and wesecurities. We cannot offer assurances that any such market will ever develop. We intend to list the Series A Redeemable Preferred Stock on the Nasdaq Capital Market when and if we meet the criteria for initial listing of those securities. Among other things, those criteria include a minimum bid price of $4.00, a minimum “public float” (the value ofMoreover, although these shares of this class held by non-affiliates of the Company) of at least $3,500,000, and no fewer than 100 “round lot” security holders. There is no assurance that we will meet these requirements, and there is no escrow, holdback or other arrangement that would preclude our consummating this offering without listing these securities. Similarly, although we intend to list the securities if we meet the initial listing requirements, we are not required to do so, and investors would have no ability to require us to complete such a listing. Moreover, even if we do list the securitieslisted on the Nasdaq Capital Market, the public float, number of shares and market capitalization of this class of securities means that trading is and will beremain relatively limited, and it is unlikely a liquid market will develop for these shares.
Our common stock is listed on the Nasdaq Capital Market under the symbol “WVVI.” Shares of our Series A Redeemable Preferred Stock are not convertible into or exchangeable for shares of our common stock, now or at any time in the future.
Anti-Takeover Effects of our Articles of Incorporation and Bylaws and of Oregon Law
Our charter documentsArticles of Incorporation and the Oregon Business Corporation Act (the “Act”), contain provisions that may have the effect of discouraging, delaying or preventing a change in control or an unsolicited acquisition proposal that a shareholder might consider favorable, including a proposal that might result in the payment of a premium over the market price for the shares held by our shareholders. Certain of these provisions are summarized in the following paragraphs.
Authorized but Unissued Shares of Common Stock and Preferred Stock
We are authorized under our articles of incorporation, as amended, to issue up to 10,000,000 shares of preferred stock, less the number of shares of Series A Preferred Stock sold in the currently ongoing offering of such securities, in one or more series as designated from time to time by our board of directors, withdirectors. These issuances require the approval of a majority of our outside directors, anddirectors. As of December 15, 2015, we also are authorized to issue up to an additional 5,010,722 shares of common stock, for a total of 10,000,000 shares of common stock. The Oregon Business Corporation Act provides that certain significant transactions, including mergers, sales of all or substantially all of the assets, and similar transactions, receive the affirmative vote of the holders of a majority of the shares of each class of capital stock.
Cumulative Voting
No cumulative voting for directors is permitted.
Increase in the Number of Directors
The number of directors of the corporation shall be a minimum of two (2) and a maximum of eleven (11) as determined from time to time by the Board of Directors. The number of directors may be increased or decreased from time to time by amendment of the Bylaws, but no decrease shall have the effect of shortening the term of any incumbent director.
Staggered Board of Directors; Removal of Directors
We do not have a staggered Board of Directors. EachThe Board of Directors is divided into three groups with each director holdsholding office until the nextdate of the third annual meeting of shareholdersfollowing the annual meeting at which such director was elected, and until her or his successors has been elected and qualified. All or any number of the directors may be removed, with or withoutfor cause, at a meeting expressly called for that purpose by a vote of the holders of the majority of the shares then entitled to vote at an election of directors or group of directors.
Advance Notice Requirements for Shareholder Proposals and Director Nominations
To be timely, a shareholder’s notice relating to the annual meeting shall be delivered to our Secretary at our principal executive offices not less than 90 nor more than 120 days prior to the first anniversary of the date on which we first mailed our proxy materials for the preceding year’s annual meeting of shareholders. However, if the date of the annual meeting is advanced by more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, then notice by the shareholder to be timely must be delivered to our Secretary at our principal executive offices not later than the close of business on the later of (i) the 90th day prior to such annual meeting or (ii) the 15th day following the day on which public announcement of the date of such meeting is first made.
Special meetings of the shareholders may be called by the President or by the Board of Directors and shall be called by the President (or in the event of absence, incapacity, or refusal of the President, by the Secretary or any other officer) at the request of the holders of not less than one- halfone-half of all the outstanding shares of the Company’s common stock entitled to vote at the meeting. Prospective investors should note that because theThe Series A Redeemable Preferred Stock has no voting rights except as required by law, therefore the holders thereof, separately or inof the aggregate,Series A Redeemable Preferred Stock have no right to call a special meeting of shareholders.shareholders, separately or in the aggregate.
Anti-Takeover Effects of Oregon Law
Oregon law contains certain provisions that may have the effect of delaying, deterring or preventing a change in control of the Company. ORS 60.801 et seq. imposes certain restrictions upon the voting of shares acquired in “control share acquisitions” and limits a shareholder’s ability to vote in favor of a business combination when that shareholder has acquired shares of voting stock in excess of a specified percentage of the voting stock of a public company. ORS 60.825 et seq. prohibits us, with certain exceptions, from engaging in certain significant business transactions with an “interested person” (including a person who owns 15% or more of the voting stock of a public company) for a period of three years following such person’s share acquisition date. The prohibited business combinations include, among others, a merger or consolidation with, disposition of assets to, or issuance or redemption of stock to or from, the acquiring person, or otherwise allowing the acquiring person to receive a disproportionate benefit as a shareholder. Exceptions to this statutory prohibition include approval of the transaction at a shareholders meeting by holders of not less than a two-thirds of the shares held by each voting group entitled to vote on the transaction, not counting shares as to which the acquiring person has beneficial ownership or voting control, transactions approved by the board of directors prior to the acquiring person first becoming an acquiring person, or, with respect to a merger, share exchange, consolidation, liquidation or distribution entered into with the acquiring person, transactions where certain other requirements regarding the fairness of the consideration to be received by the shareholders have been met. We may not exempt ourselves from coverage of this statute. These statutory provisions may have the effect of delaying, deterring or preventing a change in control of the Company.
Capital Stock Available for Future Issuance
Preferred Stock
Our articles of incorporation authorize our board of directors to issue from time to time up to 10,000,000 shares of preferred stock, reduced by the number of shares of Series A Redeemable Preferred Stock sold in the currently ongoing offering of such securities. Any remaining shares of preferred stock may be designated and issued in one or more series with the preferences, limitations and relative rights thereof as may be fixed from time to time by the board of directors for each series before the issuance of any shares of that series. In addition, after the board of directors has established a series of preferred stock, the board of directors may increase or decrease the number of shares contained in the series, but not below the number of shares then issued, or eliminate the series where no shares have been issued. Actions taken by our board of directors with regard to the authorization and issuance of preferred stock require the approval of a majority of our outside directors. Our board of directors has determined that each of our directors other than Mr. Bernau and Mr. Ellis is an “outside director” for purposes of authorizing any series of preferred stock and setting forth the preferences, limitations and relative rights thereto.
After giving effect to the designation of the Series A Redeemable Preferred Stock, our articles of incorporation entitle us to issue up to 8,555,364 additional shares of preferred stock in one or more series upon the approval of our board of directors, with the approval of a majority of our outside directors but in certain instances without the approval of the holders of the Series A Redeemable Preferred Stock. The following outlines the general provisions of the shares of currently undesignated preferred stock, no par value or “preferred stock,” that we may offer from time to time. The specific terms of a series of preferred stock will be described in the applicable prospectus supplement relating to that series of preferred stock. The following description of the preferred stock and any description of preferred stock in a prospectus supplement is only a summary and is subject to and qualified in its entirety by reference to the articles of amendment to our articles of incorporation, as amended, relating to the particular series of preferred stock, a copy of which we will file with the SEC in connection with the sale of any series of preferred stock.
Under our amended and restated articles of incorporation, as amended, our board of directors is authorized, without shareholder approval, to adopt resolutions providing for the issuance of up to 10,000,000 shares of preferred stock, no par value, in one or more series.series (reduced by the total number of shares of Series A Redeemable Preferred Stock issued and sold in the currently ongoing offering of those shares). As of the dateDecember 15, 2015, 1,054,195 shares of this prospectus,Series A Redeemable Preferred Stock are issued and outstanding, and no shares of any other class of our preferred stock are issued and outstanding, and other than for the Series A Redeemable Preferred Stock, no other class or series of preferred stock has been designated or authorized for issuance.outstanding.
Our board of directors may fix the voting powers, designations, preferences, rights, qualifications, limitations and restrictions of any futureeach series of preferred stock that we may offer.
The prospectus supplement relating to a particular series of preferred stock will contain a description of the specific terms of that series, may include:including, as applicable:
| | · | the title, designation, number of shares and stated or liquidation value of the preferred stock; |
| | · | the dividend amount or rate or method of calculation, the payment dates for dividends and the place or places where the dividends will be paid, whether dividends will be cumulative or noncumulative, and, if cumulative, the dates from which dividends will begin to accrue; |
| | · | any conversion or exchange rights; |
| | · | whether the preferred stock will be subject to redemption and the redemption price and other terms and conditions relative to the redemption rights; |
| | · | any sinking fund provisions; |
| | · | the exchange or market, if any, where the preferred stock will be listed or traded; and |
| | · | any other rights, preferences, privileges, limitations and restrictions that are not inconsistent with the terms of the our amended and restated articles of incorporation, as amended.incorporation. |
Upon the issuance and payment for shares of preferred stock, the shares will be fully paid and nonassessable. Except as otherwise may be specified in the prospectus supplement relating to a particular series of preferred stock, holders of preferred stock will not have any preemptive or subscription rights to acquire any class or series of our capital stock and each series of preferred stock will rank on a parity in all respects with each other series of our preferred stock and prior to our common stock as to dividends and any distribution of our assets.
The authorization of the preferred stock could have the effect of making it more difficult or time consuming for a third party to acquire a majority of our outstanding voting stock or otherwise effect a change of control. Shares of the preferred stock may also be sold to third parties that indicate that they would support the board of directors in opposing a hostile takeover bid. The availability of the preferred stock could have the effect of delaying a change of control and of increasing the consideration ultimately paid to our shareholders.
The board of directors may authorize the issuance of preferred stock for capital-raising activities, acquisitions, joint ventures or other corporate purposes that have the effect of making an acquisition of Willamette Valley Vineyards more difficult or costly, as could also be the case if the board of directors were to issue additional common stock for such purposes. See “Description of CommonCapital Stock – Anti-Takeover Effects of our Articles of Incorporation and Bylaws and of Oregon Law.”
Redemption
If so specified in the applicable prospectus supplement, a series of preferred stock may be redeemable at any time, in whole or in part, at our option, and may be mandatorily redeemable or convertible. Restrictions, if any, on the repurchase or redemption by us of any series of our preferred stock will be described in the applicable prospectus supplement relating to that series. Generally, any redemption of our preferred stock will be subject to prior Federal Reserve approval. Any partial redemption of a series of preferred stock would be made in the manner described in the applicable prospectus supplement relating to that series.
Upon the redemption date of shares of preferred stock called for redemption or upon our earlier call and deposit of the redemption price, all rights of holders of the preferred stock called for redemption will terminate, except for the right to receive the redemption price.
Dividends
Holders of each series of preferred stock will be entitled to receive cash dividends only when, as and if declared by our board of directors out of funds legally available for dividends. The rates or amounts and dates of payment of dividends will be described in the applicable prospectus supplement relating to each series of preferred stock. Dividends will be payable to holders of record of preferred stock on the record dates fixed by our board of directors. Dividends on any series of preferred stock may be cumulative or noncumulative, as described in the applicable prospectus supplement.
Our board of directors may not declare, pay or set apart funds for payment of dividends on a particular series of preferred stock unless full dividends on any other series of preferred stock that ranks equally with or senior to such series of preferred stock with respect to the payments of dividends have been paid or sufficient funds have been set apart for payment for either of the following:
| | · | all prior dividend periods of each such series of preferred stock that pay dividends on a cumulative basis; or |
| | · | the immediately preceding dividend period of each such series of preferred stock that pays dividends on a noncumulative basis. |
Partial dividends declared on shares of any series of preferred stock and other series of preferred stock ranking on an equal basis as to dividends will be declared pro rata. A pro rata declaration means that the ratio of dividends declared per share to accrued dividends per share will be the same for all series of preferred stock of equal priority.
Liquidation Preference
In the event of the liquidation, dissolution or winding-up of us, holders of each series of preferred stock will have the right to receive distributions upon liquidation in the amount described in the applicable prospectus supplement relating to each series of preferred stock, plus an amount equal to any accrued but unpaid dividends. These distributions will be made before any distribution is made on our common stock or on any securities ranking junior to such preferred stock upon liquidation, dissolution or winding-up.
However, holders of the shares of preferred stock will not be entitled to receive the liquidation price of their shares until we have paid or set aside an amount sufficient to pay in full the liquidation preference of any class or series of our capital stock ranking senior as to rights upon liquidation, dissolution or winding up. Unless otherwise provided in the applicable prospectus supplement, neither a consolidation or merger of Willamette Valley Vineyardsthe Company with or into another corporation nor a merger of another corporation with or into Willamette Valley Vineyardsthe Company, nor a sale or transfer of all or part of Willamette Valley Vineyards’the Company’s assets for cash or securities will be considered a liquidation, dissolution or winding up of Willamette Valley Vineyards.
If the liquidation amounts payable to holders of preferred stock of all series ranking on a parity regarding liquidation are not paid in full, the holders of the preferred stock of these series will have the right to a ratable portion of our available assets up to the full liquidation preference. Holders of these series of preferred stock or such other securities will not be entitled to any other amounts from us after they have received their full liquidation preference.
Conversion and Exchange
The prospectus supplement will indicate whether and on what terms the shares of any future series of preferred stock will be convertible into or exchangeable for shares of any other class, series or security of Willamette Valley Vineyards or any other corporation or any other property (including whether the conversion or exchange is mandatory, at the option of the holder or our option, the period during which conversion or exchange may occur, the initial conversion or exchange price or rate and the circumstances or manner in which the amount of common or preferred stock or other securities issuable upon conversion or exchange may be adjusted). It will also indicate for preferred stock convertible into common stock, the number of shares of common stock to be reserved in connection with, and issued upon conversion of, the preferred stock (including whether the conversion or exchange is mandatory, the initial conversion or exchange price or rate and the circumstances or manner in which the amount of common stock issuable upon conversion or exchange may be adjusted) at the option of the holder or our option and the period during which conversion or exchange may occur.
Voting Rights
The holders of shares of preferred stock will have no voting rights, except:
| | · | as otherwise stated in the applicable prospectus supplement; |
| | · | as otherwise stated in the applicable certificate of designation or articles of amendment to our articles of incorporation establishing the series of such preferred stock; and |
| | · | as otherwise required by applicable law. |
Transfer Agent and Registrar
The transfer agent, registrar, dividend paying agent and depositary, if any, for any preferred stock offering will be stated in the applicable prospectus supplement.
Description of Debt Securities
This summary, together with the additional information we include in any applicable prospectus supplements, summarizes the material terms and provisions of the debt securities that we may offer under this prospectus. While the terms we have summarized below will generally apply to any future debt securities we may offer under this prospectus, we will describe the particular terms of any debt securities that we may offer in more detail in the applicable prospectus supplement. The terms of any debt securities we offer under a prospectus supplement may differ from the terms we describe below.
The debt securities may be either secured or unsecured and will either be senior debt securities or subordinated debt securities. We will issue the senior notes under the senior indenture which we will enter into with one or more trustees. We will issue the subordinated notes under the subordinated indenture which we will enter into with one or more trustees. We have filed forms of these documents as exhibits to the registration statement of which this prospectus forms a part. We use the term “indentures” to refer to both the senior indenture and the subordinated indenture.
The indentures will be qualified under the Trust Indenture Act of 1939, as amended, or the Trust Indenture Act. We use the term “debenture trustee” to refer to either the senior trustee or the subordinated trustee, as applicable.
The following summaries of the material provisions of the senior notes, the subordinated notes and the indentures are subject to, and qualified in their entirety by reference to, all of the provisions of the indenture applicable to a particular series of debt securities. We urge you to read the applicable prospectus supplements related to the debt securities that we sell under this prospectus, as well as the complete indentures that contain the terms of the debt securities. Except as we may otherwise indicate, the terms of the senior indenture and the subordinated indenture are identical.
General
We will describe in the applicable prospectus supplement the terms relating to a series of debt securities, including, to the extent applicable:
| · | the principal amount being offered and, if a series, the total amount authorized and the total amount outstanding; |
| · | any limit on the amount that may be issued; |
| · | whether or not we will issue the series of debt securities in global form and, if so, the terms and who the depositary will be; |
| · | the principal amount due at maturity and whether the debt securities will be issued with any original issue discount; |
| · | whether and under what circumstances, if any, we will pay additional amounts on any debt securities held by a person who is not a U.S. person for U.S. federal income tax purposes, and whether we can redeem the debt securities if we have to pay such additional amounts; |
| · | the annual interest rate, which may be fixed or variable, or the method for determining the rate, the date interest will begin to accrue, the dates interest will be payable and the regular record dates for interest payment dates or the method for determining such dates; |
| · | whether or not the debt securities will be secured or unsecured, and the terms of any secured debt; |
| · | whether or not the debt securities will be senior or subordinated, and the terms of the subordination of any series of subordinated debt; |
| · | the place where payments will be payable; |
| · | restrictions on transfer, sale or other assignment, if any; |
| · | our right, if any, to defer payment of interest and the maximum length of any such deferral period; |
| · | the date, if any, after which, the conditions upon which, and the price at which we may, at our option, redeem the series of debt securities pursuant to any optional or provisional redemption provisions, and any other applicable terms of those redemption provisions; |
| · | provisions for a sinking fund, purchase or other analogous fund, if any; |
| · | the date, if any, on which, and the price at which we are obligated, pursuant to any mandatory sinking fund or analogous fund provisions or otherwise, to redeem, or at the holder’s option to purchase, the series of debt securities; |
| · | whether the indenture will restrict our ability and/or the ability of our subsidiaries to |
| o | incur additional indebtedness; |
| o | issue additional securities; |
| o | pay dividends and make distributions in respect of our capital stock and the capital stock of our subsidiaries; |
| o | place restrictions on our subsidiaries’ ability to pay dividends, make distributions or transfer assets; |
| o | make investments or other restricted payments; |
| o | sell or otherwise dispose of assets; |
| o | enter into sale-leaseback transactions; |
| o | engage in transactions with shareholders and affiliates; |
| o | issue or sell stock of our subsidiaries; or |
| o | effect a consolidation or merger; |
| · | whether the indenture will require us to maintain any interest coverage, fixed charge, cash flow-based, asset-based or other financial ratios; |
| · | a discussion of any material or special U.S. federal income tax considerations applicable to the debt securities; |
| · | information describing any book-entry features; |
| · | the procedures for any auction and remarketing, if any; |
| · | the denominations in which we will issue the series of debt securities, if other than denominations of $1,000 and any integral multiple thereof; |
| · | if other than U.S. dollars, the currency in which the series of debt securities will be denominated; and |
| · | any other specific terms, preferences, rights or limitations of, or restrictions on, the debt securities, including any events of default that are in addition to those described in this prospectus or any covenants provided with respect to the debt securities that are in addition to those described above, and any terms which may be required by us or advisable under applicable laws or regulations or advisable in connection with the marketing of the debt securities. |
Conversion or Exchange Rights
We will set forth in the applicable prospectus supplements the terms on which a series of debt securities may be convertible into or exchangeable for common stock or other securities of ours or a third party, including the conversion or exchange rate, as applicable, or how it will be calculated, and the applicable conversion or exchange period. We will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of our securities or the securities of a third party that the holders of the series of debt securities receive upon conversion or exchange would, under the circumstances described in those provisions, be subject to adjustment, or pursuant to which those holders would, under those circumstances, receive other property upon conversion or exchange, for example in the event of our merger or consolidation with another entity.
Consolidation, Merger or Sale
The indentures in the form initially filed as exhibits to the registration statement of which this prospectus forms a part do not contain any covenant that restricts our ability to merge or consolidate, or sell, convey, transfer or otherwise dispose of all or substantially all of our assets. However, any successor of ours or acquirer of such assets must assume all of our obligations under the indentures and the debt securities.
If the debt securities are convertible into our other securities, the person with whom we consolidate or merge or to whom we sell all of our property must make provisions for the conversion of the debt securities into securities which the holders of the debt securities would have received if they had converted the debt securities before the consolidation, merger or sale.
Events of Default Under the Indentures
Unless otherwise specified in the applicable prospectus supplement, the following are events of default under the indentures with respect to any series of debt securities that we may issue:
| · | if we fail to pay interest when due and payable and our failure continues for 90 days and the time for payment has not been validly extended; |
| · | if we fail to pay the principal, or premium, if any, or to make payment required by any sinking fund or analogous fund when due and payable and the time for payment has not been validly extended; |
| · | if we fail to observe or perform any other covenant contained in the debt securities or the indentures, other than a covenant specifically relating to another series of debt securities, and our failure continues for 90 days after we receive notice from the debenture trustee or holders of at least 25% in aggregate principal amount of the outstanding debt securities of the applicable series; and |
| · | if specified events of bankruptcy, insolvency or reorganization occur. |
If an event of default with respect to debt securities of any series occurs and is continuing, other than an event of default specified in the last bullet point above, the debenture trustee or the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series may, by notice to us in writing (and to the debenture trustee if notice is given by such holders), declare the unpaid principal, premium, if any, and accrued interest, if any, due and payable immediately. If an event of default specified in the last bullet point above occurs with respect to us, the principal amount of and accrued interest, if any, of each series of debt securities then outstanding shall be due and payable without any notice or other action on the part of the debenture trustee or any holder.
The holders of a majority in principal amount of the outstanding debt securities of an affected series may waive any default or event of default with respect to the series and its consequences, except defaults or events of default regarding payment of principal, premium, if any, or interest, unless we have cured the default or event of default in accordance with the indenture.
Subject to the terms of the indentures, if an event of default under an indenture shall occur and be continuing, the debenture trustee will be under no obligation to exercise any of its rights or powers under such indenture at the request or direction of any of the holders of the applicable series of debt securities, unless such holders have offered the debenture trustee reasonable indemnity. The holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the debenture trustee, or exercising any trust or power conferred on the debenture trustee, with respect to the debt securities of that series, provided that:
| · | the direction so given by the holder is not in conflict with any law or the applicable indenture; and |
| · | subject to its duties under the Trust Indenture Act, the debenture trustee need not take any action that might involve it in personal liability or might be unduly prejudicial to the holders not involved in the proceeding. |
A holder of the debt securities of any series will only have the right to institute a proceeding under the indentures or to appoint a receiver or trustee, or to seek other remedies, if:
| · | the holder has given written notice to the debenture trustee of a continuing event of default with respect to that series; |
| · | the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request, and such holders have offered reasonable indemnity to the debenture trustee, to institute the proceeding as trustee; and |
| · | the debenture trustee does not institute the proceeding, and does not receive from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series other conflicting directions, within 90 days after the notice, request and offer. |
These limitations do not apply to a suit instituted by a holder of debt securities if we default in the payment of the principal, premium, if any, or interest on the debt securities.
We will periodically file statements with the debenture trustee regarding our compliance with specified covenants in the indentures.
Modification of Indenture; Waiver
We and the debenture trustee may modify an indenture without the consent of any holders with respect to specific matters, including, without limitation:
| · | to fix any ambiguity, defect or inconsistency in the indenture or in the debt securities of any series; |
| · | to comply with the provisions described above under “Consolidation, Merger or Sale”; |
| · | to comply with any requirements of the SEC in connection with the qualification of any indenture under the Trust Indenture Act; |
| · | to evidence and provide for the acceptance of appointment under the indenture by a successor trustee; |
| · | to provide for uncertificated debt securities in addition to or in place of certificated securities and to make all appropriate changes for such purpose; |
| · | to evidence and provide for the acceptance of appointment under the indenture by a successor trustee; |
| · | to add to, delete from, or revise the conditions, limitations and restrictions on the authorized amount, terms or purposes of issuance, authentication and delivery of debt securities of any series; |
| · | to provide for the issuance of and establish the form and terms and conditions of the debt securities of any series authorized pursuant to the indentures, to establish the form of any certifications required to be furnished pursuant to the indentures or any series or to add to the rights of the holders of any series of debt securities; |
| · | to add to our covenants such new covenants, restrictions, conditions or provisions for the protection of the holders, to make the occurrence, or the occurrence and the continuance, of a default in any such additional covenants, restrictions, conditions or provisions an event of default, or to surrender any of our rights or powers under the indenture; or |
| · | to change anything that does not adversely affect the rights of any holder of debt securities of any series in any material respect. |
In addition, under the indentures, the rights of holders of debt securities of any series may be changed by us and the debenture trustee with the written consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of each series that is affected. However, we and the debenture trustee may only make the following changes with the consent of each holder of any outstanding debt securities affected:
| · | extending the fixed maturity of the debt securities of any series; |
| · | reducing the principal amount, reducing the rate of or extending the time of payment of interest or reducing any premium payable upon the redemption of any debt securities; or |
| · | reducing the percentage of debt securities the holders of which are required to consent to any supplemental indenture. |
Discharge
The indentures provide that we can elect to be discharged from our obligations with respect to one or more series of debt securities, except for certain obligations, including obligations to:
| · | register the transfer or exchange of debt securities of the series; |
| · | replace mutilated, destroyed, lost or stolen debt securities of the series; |
| · | maintain paying agencies; |
| · | compensate and indemnify the debenture trustee; and |
| · | appoint any successor trustee |
In order to exercise our rights to be discharged, we must deposit with the debenture trustee money or government obligations, or a combination of both, sufficient to pay all of the principal, premium, if any, and interest on the debt securities of the series on the dates payments are due.
Form, Exchange and Transfer
We will issue the debt securities of each series only in fully registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement, in denominations of $1,000 and any integral multiple thereof. The indentures provide that we may issue debt securities of a series in temporary or permanent global form and as book-entry securities that will be deposited with, or on behalf of, The Depository Trust Company, New York, New York, known as DTC, or another depositary named by us and identified in a prospectus supplement with respect to that series.
At the option of the holder, subject to the terms of the indentures and the limitations applicable to global securities described in the applicable prospectus supplement, the holder of the debt securities of any series can exchange the debt securities for other debt securities of the same series, in any authorized denomination and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the limitations applicable to global securities set forth in the applicable prospectus supplements, holders of the debt securities may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office of any transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities that the holder presents for transfer or exchange, we will not impose a service charge for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges applicable to or associated with such registration of transfer or exchange.
We will name in the applicable prospectus supplements the security registrar, and any transfer agent in addition to the security registrar, that we initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent in each place of payment for the debt securities of each series.
If we elect to redeem the debt securities of any series, we will not be required to:
| · | issue, register the transfer of, or exchange any debt securities of any series being redeemed in part during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at the close of business on the day of the mailing; or |
| · | register the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of any debt securities we are redeeming in part. |
Information Concerning the Debenture Trustee
The debenture trustee, other than during the occurrence and continuance of an event of default under an indenture, undertakes to perform only those duties as are specifically set forth in the applicable indenture. Upon an event of default under an indenture, the debenture trustee must use the same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision, the debenture trustee is under no obligation to exercise any of the powers given it by the indentures at the request of any holder of debt securities unless it is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of the interest on any debt securities on any interest payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close of business on the regular record date for the interest.
We will pay principal of, and any premium and interest on, the debt securities of a particular series at the office of the paying agents designated by us, except that, unless we otherwise indicate in the applicable prospectus supplement, we may make certain payments by check which we will mail to the holder or by wire transfer to certain holders. Unless we otherwise indicate in a prospectus supplement, we will designate an office or agency of the debenture trustee in the city of New York as our sole paying agent for payments with respect to debt securities of each series. We will name in the applicable prospectus supplement any other paying agents that we initially designate for the debt securities of a particular series. We will maintain a paying agent in each place of payment for the debt securities of a particular series.
All money we pay to a paying agent or the debenture trustee for the payment of the principal of or any premium or interest on any debt securities which remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the debt security thereafter may look only to us for payment thereof.
Governing Law
The indentures and the debt securities will be governed by and construed in accordance with the laws of the state of New York, except to the extent that the Trust Indenture Act is applicable.
Subordination of Subordinated Debt Securities
The subordinated debt securities will be subordinate and junior in priority of payment to certain of our other indebtedness to the extent described in a prospectus supplement. The indentures in the form initially filed as exhibits to the registration statement of which this prospectus forms a part do not limit the amount of indebtedness which we may incur, including senior indebtedness or subordinated indebtedness, and do not limit us from issuing any other debt, including secured debt or unsecured debt. Additional or different subordination provisions may be described in a prospectus supplement relating to a particular series of debt securities.
Description of Warrants
This summary, together with the additional information we include in any applicable prospectus supplements, summarizes the material terms and provisions of the warrants that we may offer under this prospectus, which consist of warrants to purchase our common stock, preferred stock and/or debt securities in one or more series. Warrants may be offered independently or together with our common stock, preferred stock, debt securities and/or rights offered by any prospectus supplement, and may be attached to or separate from those securities. While the terms we have summarized below will generally apply to any future warrants we may offer under this prospectus, we will describe the particular terms of any warrants that we may offer in more detail in the applicable prospectus supplement. The terms of any warrants we offer under a prospectus supplement may differ from the terms we describe below.
We will issue the warrants directly or under a warrant agreement which we will enter into with a warrant agent to be selected by us. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent, all as set forth in the prospectus supplement relating to the particular issue of offered warrants. We use the term “warrant agreement” to refer to any of these warrant agreements. We use the term “warrant agent” to refer to the warrant agent under any of these warrant agreements. The warrant agent will act solely as an agent of ours in connection with the warrants and will not act as an agent for the holders or beneficial owners of the warrants.
The following summary of material provisions of the warrants and the warrant agreements are subject to, and qualified in their entirety by reference to, all of the provisions of the warrant agreement applicable to a particular series of warrants. We urge you to read the applicable prospectus supplements related to the warrants that we sell pursuant to this prospectus, as well as the complete warrant agreements that contain the terms of the warrants.
General
We will describe in the applicable prospectus supplements the terms relating to a series of warrants.
If warrants for the purchase of our common stock or preferred stock are offered, the prospectus supplements will describe the following terms, to the extent applicable:
| · | the offering price and the aggregate number of warrants offered; |
| · | the total number of shares that can be purchased if a holder of the warrants exercises them and, in the case of warrants for preferred stock, the designation, total number and terms of the series of preferred stock that can be purchased upon exercise; |
| · | the designation and terms of any series of preferred stock with which the warrants are being offered and the number of warrants being offered with each share of common stock or preferred stock; |
| · | the date on and after which the holder of the warrants can transfer them separately from the related common stock or series of preferred stock; |
| · | the number of shares of common stock or preferred stock that can be purchased if a holder exercises the warrant and the price at which such common stock or preferred stock may be purchased upon exercise, including, if applicable, any provisions for changes to or adjustments in the exercise price and in the securities or other property receivable upon exercise; |
| · | the terms of any rights to redeem or call, or accelerate the expiration of, the warrants; |
| · | the date on which the right to exercise the warrants begins and the date on which that right expires; |
| · | the number of warrants outstanding, if any; |
| · | a discussion of any material U.S. federal income tax considerations applicable to the warrants; |
| · | the terms, if any, on which we may accelerate the date by which the warrants must be exercised; |
| · | whether the warrants are issued pursuant to a warrant agreement with a warrant agent or issued directly by us; and |
| · | any other specific terms, preferences, rights or limitations of, or restrictions on, the warrants. |
Warrants for the purchase of common stock or preferred stock will be in registered form only.
If warrants for the purchase of debt securities are offered, the prospectus supplement will describe the following terms, to the extent applicable:
| · | the offering price and the aggregate number of warrants offered; |
| · | the currencies in which the warrants are being offered; |
| · | the designation, aggregate principal amount, currencies, denominations and terms of the series of debt securities that can be purchased if a holder exercises a warrant; |
| · | the designation and terms of any series of debt securities with which the warrants are being offered and the number of warrants offered with each such debt security; |
| · | the date on and after which the holder of the warrants can transfer them separately from the related series of debt securities; |
| · | the principal amount of the series of debt securities that can be purchased if a holder exercises a warrant and the price at which and currencies in which such principal amount may be purchased upon exercise; |
| · | the terms of any rights to redeem or call the warrants; |
| · | the date on which the right to exercise the warrants begins and the date on which such right expires; |
| · | the number of warrants outstanding, if any; |
| · | a discussion of any material U.S. federal income tax considerations applicable to the warrants; |
| · | the terms, if any, on which we may accelerate the date by which the warrants must be exercised; |
| · | whether the warrants are issued pursuant to a warrant agreement with a warrant agent or issued directly by us; and |
| · | any other specific terms, preferences, rights or limitations of, or restrictions on, the warrants. |
Warrants for the purchase of debt securities will be in registered form only.
A holder of warrant certificates may exchange them for new certificates of different denominations, present them for registration of transfer and exercise them at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement. Until any warrants to purchase common stock or preferred stock are exercised, holders of the warrants will not have any rights of holders of the underlying common stock or preferred stock, including any rights to receive dividends or to exercise any voting rights, except to the extent set forth under “—Warrant Adjustments” below. Until any warrants to purchase debt securities are exercised, the holder of the warrants will not have any of the rights of holders of the debt securities that can be purchased upon exercise, including any rights to receive payments of principal, premium or interest on the underlying debt securities or to enforce covenants in the applicable indenture.
Exercise of Warrants
Each holder of a warrant is entitled to purchase the number of shares of common stock or preferred stock or principal amount of debt securities, as the case may be, at the exercise price described in the applicable prospectus supplements. After the close of business on the day when the right to exercise terminates (or a later date if we extend the time for exercise), unexercised warrants will become void.
A holder of warrants may exercise them by following the general procedure outlined below:
| · | delivering to us or to the warrant agent the payment required by the applicable prospectus supplements to purchase the underlying security; |
| · | properly completing and signing the reverse side of the warrant certificate representing the warrants; and |
| · | delivering the warrant certificate representing the warrants to us or to the warrant agent within five business days of receipt of payment of the exercise price. |
If the holder complies with the procedures described above, the warrants will be considered to have been exercised when we receive or the warrant agent receives, as applicable, payment of the exercise price, subject to the transfer books for the securities issuable upon exercise of the warrant not being closed on such date. After the holder has completed those procedures and subject to the foregoing, we will, as soon as practicable, issue and deliver to such holder the common stock, preferred stock or debt securities that such holder purchased upon exercise. If the holder exercises fewer than all of the warrants represented by a warrant certificate, a new warrant certificate will be issued to such holder for the unexercised amount of warrants. Holders of warrants will be required to pay any tax or governmental charge that may be imposed in connection with transferring the underlying securities in connection with the exercise of the warrants.
Amendments and Supplements to the Warrant Agreements
We may amend or supplement a warrant agreement without the consent of the holders of the applicable warrants to cure ambiguities in the warrant agreement, to cure, correct or supplement a defective provision in the warrant agreement, or to provide for other matters under the warrant agreement that we and the warrant agent deem necessary or desirable, so long as, in each case, such amendments or supplements do not materially adversely affect the interests of the holders of the warrants.
Warrant Adjustments
Unless the applicable prospectus supplements state otherwise, the exercise price of, and the number of securities covered by, a common stock warrant or preferred stock warrant will be adjusted proportionately if we subdivide or combine our common stock or preferred stock, as applicable.
In addition, unless the prospectus supplements state otherwise, if we, without payment therefor:
| · | issue capital stock or other securities convertible into or exchangeable for common stock or preferred stock, or any rights to subscribe for, purchase or otherwise acquire any of the foregoing, as a dividend or distribution to holders of our common stock or preferred stock; |
| · | pay any cash to holders of our common stock or preferred stock other than a cash dividend paid out of our current or retained earnings or other than in accordance with the terms of the preferred stock; |
| · | issue any evidence of our indebtedness or rights to subscribe for or purchase our indebtedness to holders of our common stock or preferred stock; or |
| · | issue common stock or preferred stock or additional stock or other securities or property to holders of our common stock or preferred stock by way of spinoff, split-up, reclassification, combination of shares or similar corporate rearrangement; |
then the holders of common stock warrants and preferred stock warrants, as applicable, will be entitled to receive upon exercise of the warrants, in addition to the securities otherwise receivable upon exercise of the warrants and without paying any additional consideration, the amount of stock and other securities and property such holders would have been entitled to receive had they held the common stock or preferred stock, as applicable, issuable under the warrants on the dates on which holders of those securities received or became entitled to receive such additional stock and other securities and property.
Except as stated above, the exercise price and number of securities covered by a common stock warrant or preferred stock warrant, and the amounts of other securities or property to be received, if any, upon exercise of those warrants, will not be adjusted or provided for if we issue those securities or any securities convertible into or exchangeable for those securities, or securities carrying the right to purchase those securities or securities convertible into or exchangeable for those securities.
Holders of common stock warrants and preferred stock warrants may have additional rights under the following circumstances:
| · | certain reclassifications, capital reorganizations or changes of the common stock or preferred stock, as applicable; |
| · | certain share exchanges, mergers, or similar transactions involving us and which result in changes of the common stock or preferred stock, as applicable; or |
| · | certain sales or dispositions to another entity of all or substantially all of our property and assets. |
If one of the above transactions occurs and holders of our common stock or preferred stock are entitled to receive stock, securities or other property with respect to or in exchange for their securities, the holders of the common stock warrants and preferred stock warrants then outstanding, as applicable, will be entitled to receive upon exercise of their warrants the kind and amount of shares of stock and other securities or property that they would have received upon the applicable transaction if they had exercised their warrants immediately before the transaction.
This summary, together with the additional information we include in any applicable prospectus supplements, summarizes the material terms and provisions of the rights that we may offer under this prospectus, which consist of rights to purchase our common stock, preferred stock and/or debt securities in one or more series. Rights may be offered independently or together with our common stock, preferred stock, debt securities and/or warrants offered by any prospectus supplement, and may be attached to or separate from those securities. While the terms we have summarized below will generally apply to any future rights we may offer pursuant to this prospectus, we will describe the particular terms of any rights that we may offer in more detail in the applicable prospectus supplements. The terms of any rights we offer under a prospectus supplement may differ from the terms we describe below.
The applicable prospectus supplements relating to any rights that we offer will include specific terms of any offering of rights for which this prospectus is being delivered, including the following, to the extent applicable:
| · | the date for determining the persons entitled to participate in the rights distribution; |
| · | the price, if any, per right; |
| · | the exercise price payable for each share of common stock, share of preferred stock or debt security upon the exercise of the rights; |
| · | the number of rights issued or to be issued to each holder; |
| · | the number and terms of the shares of common stock, shares of preferred stock or debt securities that may be purchased per each right; |
| · | the extent to which the rights are transferable; |
| · | any other terms of the rights, including the terms, procedures and limitations relating to the exchange and exercise of the rights; |
| · | the respective dates on which the holder’s ability to exercise the rights will commence and will expire; |
| · | the number of rights outstanding, if any; |
| · | a discussion of any material U.S. federal income tax considerations applicable to the rights; |
| · | the extent to which the rights may include an over-subscription privilege with respect to unsubscribed securities; and |
| · | if applicable, the material terms of any standby underwriting or purchase arrangement entered into by us in connection with the offering of such rights. |
The description in the applicable prospectus supplements of any rights that we may offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable rights agreement and/or rights certificate, which will be filed with the SEC in connection therewith.
This summary, together with the additional information we include in any applicable prospectus supplements, summarizes the material terms and provisions of the units that we may offer under this prospectus, which may consist of one or more shares of common stock, shares of preferred stock, debt securities, warrants, rights or any combination of such securities. While the terms we have summarized below will generally apply to any future units we may offer pursuant to this prospectus, we will describe the particular terms of any units that we may offer in more detail in the applicable prospectus supplements. The terms of any units we offer under a prospectus supplement may differ from the terms we describe below.
The applicable prospectus supplements relating to any units that we offer will include specific terms of any offering of units for which this prospectus is being delivered, including the following, to the extent applicable:
| · | the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; |
| · | whether we will apply to have the units traded on a securities exchange or securities quotation system |
| · | a discussion of any material U.S. federal income tax considerations applicable to the units; and |
| · | how, for U.S. federal income tax purposes, the purchase price paid for the units is to be allocated among the component securities. |
The description in the applicable prospectus supplements of any units that we may offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable unit agreement, which will be filed with the SEC in connection therewith.
We may sell the Series A Redeemable Preferred Stocksecurities offered pursuant to this prospectus and any accompanying prospectus supplements from time to time in one or more transactions through our officers and directors, none of whom will be compensated for their participation in this offering. There will be no sales through underwriters, placement agents or broker-dealers in connection with this offering.transactions:
Our Series A Redeemable Preferred Stock will be offered at prices that will depend upon the date of one’s purchase as indicated in the following table: | · | to or through one or more underwriters or dealers; |
Beginning Date | Ending Date· | Price per Share(1)
|
June 30, 2015(2)
| September 30, 2015 | $4.15 |
October 1, 2015 | December 31, 2015 | $4.25 |
January 1, 2016 | March 31, 2016 | $4.35 |
March 31, 2016 | June 30, 2016 | $4.45to investors directly; |
| | (1)· | The “Original Issue Price” for purposes of dividend and redemption computations will be $4.15 per share, regardless of the price paid.through agents; or |
| | (2)· | This offering will commence on the latterthrough any combination of June 30 , 2015 or the date the SEC declares effective the registration statementthese methods of which this prospectus forms a part.sale. |
The purposeOur securities may be offered and sold from time to time in one or more transaction at:
| · | a fixed price or prices, which may be changed; |
| · | market prices prevailing at the time of sale; |
| · | prices related to the prevailing market prices; or |
Any of the increase in price over time is intendedprices at which we sell securities may be at a discount to reflectmarket prices. Broker-dealers or the reduction in risk over time. Our boardpurchasers of directors believesthe securities, as applicable, may also receive from us compensation that investors who invest earlier in this offering will bear modestly greater risk than those who invest later; however, this belief is not readily quantifiableexpected to exceed that customary in the types of transactions involved.
Each prospectus supplement, to the extent applicable, will describe the number and depends, among other things, uponterms of the amount invested in each period. Further, there is no readily ascertainable value for the Series A Redeemable Preferred Stock, nor is there any market criteria bysecurities to which such prospectus supplement relates, including:
| · | any over-allotment options under which underwriters, if any, may purchase additional securities; |
| · | the name or names of any underwriters or agents with whom we have entered into an arrangement with respect to the sale of such securities; |
| · | the public offering or purchase price of such securities; |
| · | any underwriting discounts or commissions or agency fees or other items constituting underwriter or agent compensation; |
| · | any discounts, commissions or concessions allowed or reallowed or paid to dealers; |
| · | any securities exchanges or markets on which the securities may be listed; and |
| · | the net proceeds we will receive from such sale. |
Underwritten Offerings
If underwriters are used in the sale of any securities, the securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions described above. The applicable prospectus supplement will name any underwriter involved in a value couldsale of securities. Such securities may be established. Accordingly, prospective investors should recognize thateither offered to the pricespublic through underwriting syndicates represented by managing underwriters, or directly by underwriters. Underwriters may sell the securities to or through dealers, and such dealers may receive compensation in the form of each seriesdiscounts. Generally, the underwriters’ obligations to purchase the securities will be subject to conditions precedent and the underwriters will be obligated to purchase all of the Series A Redeemable Preferred Stocksecurities if they purchase any of the securities. We may use underwriters with whom we have been determined arbitrarily,a material relationship. We will describe any such underwriters in the applicable prospectus supplement, naming the underwriter and there can be no assurance that an investor purchasingthe nature of any such shares could sell the shares at a price equal to or greater than the prices listed above, or at all.relationship.
Escrow
The Company has established an escrow account at OTR, Inc.,Direct Sales and funds received in this offering will be deliveredSales through Agents
We may sell securities directly to the escrow agentinstitutional investors or others who may be deemed to be held pendingunderwriters within the closing of a given offering period. The minimum offering amount for this offering is $300,000, and we will not release funds from accepted subscriptions until we have received subscriptions totaling at least the minimum offering amount. Thereafter, on the first business day following eachmeaning of the closing dates indicated inSecurities Act of 1933, as amended, or the table above, the escrow agent will release the funds then held from accepted subscriptions and, within two business days thereafter, will cause the issuance and delivery of the number of Series A Redeemable Preferred Shares to be madeSecurities Act, with respect to eachany sale of those securities. We also may, from time to time, authorize dealers or agents to offer and sell these securities, upon such subscription. For purposesterms and conditions as may be set forth in the applicable prospectus supplement, if applicable. In order to comply with the securities laws of determining entitlement to dividends, liquidation preference, and related matters,certain states, if applicable, the initial issue date for shares so issuedsecurities offered will be sold in such jurisdictions only through registered or licensed brokers or dealers. In addition, in certain states securities may not be sold unless they have been registered or qualified for sale in the first calendar day followingapplicable state or an exemption from the expiryregistration or qualification requirement is available and is complied with. This prospectus, one or more prospectus supplements, and the registration statement of which this prospectus forms a part may be used in conjunction with one or more other registration statements to the extent permitted by the Securities Act and the rules and regulations promulgated thereunder.
Rights Offerings
We also may sell directly to investors through subscription rights distributed to our shareholders on a pro rata basis. In connection with any distribution of subscription rights to shareholders, if all of the relevant offering period, notwithstanding thatunderlying securities are not subscribed for, we may sell the releaseunsubscribed shares of fundsour securities directly to third parties or may engage the actual issuanceservices of shares may occur on a later date.one or more underwriters, dealers or agents, including standby underwriters, to sell the unsubscribed securities to third parties.
Prospective investors are cautioned thatWe may also sell securities in one or more of the following transactions:
| · | block transactions (which may involve crosses) in which a broker-dealer may sell all or a portion of the shares as agent but may position and resell all or a portion of the block as principal to facilitate the transaction; |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its own account; |
| · | ordinary brokerage transactions and transactions in which a broker-dealer solicits purchasers; |
| · | sales “at the market” to or through a market maker or into an existing trading market, on an exchange or otherwise, for securities; and |
| · | sales in other ways not involving a market maker or established trading markets, including direct sales to purchasers |
We may also enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. In connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an escrow arrangement in this fashionunderwriter and will not resultbe identified in the assuranceapplicable prospectus supplement or in a post-effective amendment to the registration statement of which this prospectus forms a part.
Any dealers or agents that any minimum proceeds will be received from this offering: the release of escrow will occur immediately after the end of the relevant offering period regardless of the amounts then heldparticipate in the escrow account.distribution of securities may be deemed to be underwriters under the Securities Act, and in such event, any discounts or commissions received by them and any profit realized by them on the resale of securities they realize may be deemed to be underwriting discounts and commissions under the Securities Act.
Indemnification; ExculpationIndemnification
Our officers and directors who act as issuer salespersons in connection with this offering are entitled to indemnification for any action or claim brought against them in connection with their service on behalf of the Company, including without limitation their participation in this offering. Our articles of incorporation also contain provisions that exculpate our officers, directorsUnderwriters, dealers and agents from liabilities to the Company except in cases of gross negligence or willful misconduct , subject to certain limitations arisingand remarketing firms may be entitled, under federal and state securities laws. In addition, our chief executive officer, Mr. Bernau, is a party to an indemnification agreement pursuant to which the Company is required to extend broad-based indemnification to him and certain of his affiliates and immediate family members. These arrangements entitle these individualsagreements entered into with us, to indemnification against and contribution toward certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments that these personsthe agents, dealers, underwriters or remarketing firms may be required to make.
Stabilization
In connection with many public offeringsany offering of the securities hereby, certain underwriters and selling group members and their respective affiliates may engage in transactions that stabilize, maintain or otherwise affect the market price of the applicable securities. These transactions may include stabilization transactions pursuant to which these persons may bid for or purchase securities for the purpose of stabilizing their market price.
The underwriters in an offering of securities may also create a “short position” for their account by selling more securities in connection with the offering than they are intendedcommitted to havepurchase from us. In that case, the effectunderwriters could cover all or a portion of limiting the volatilityshort position by either purchasing securities in the open market following completion of the offering of these securities or by exercising any over-allotment option granted to them by us. In addition, the managing underwriter may impose “penalty bids” under contractual arrangements with other underwriters, which means that it can reclaim from an underwriter (or any selling group member participating in the offering) for the account of the other underwriters, the selling concession for the securities that are distributed in the offering but subsequently purchased for the account of the underwriters in the open market. Any of the transactions described in this paragraph or comparable transactions that are described in any accompanying prospectus supplement may result in the maintenance of the price of the securities at a level above that which might otherwise prevail in the open market. None of the transactions described in this paragraph or in an accompanying prospectus supplement are required to be taken by an underwriter and, if they are undertaken, may be discontinued at any time.
Under applicable rules and regulations under the Exchange Act, under certain circumstances a person engaged in the distribution of the securities offered under this prospectus and the accompanying prospectus supplement may not simultaneously engage in market making activities with respect to our securities for a specified period prior to the commencement of such distribution.
Passive Market-Making on Nasdaq
Any underwriters who are qualified market makers on the Nasdaq Global Select Market may engage in passive market making transactions in our common stock on the Nasdaq Global Select Market in accordance with Rule 103 of Regulation M. Passive market makers must comply with applicable volume and price limitations and must be identified as passive market makers. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive market making bid, however, the passive market making bid must then be lowered when certain purchase limits are exceeded.
Remarketing Arrangements
Offered securities may also be offered and sold in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as agents for us. We will identify any remarketing firm and describe the terms of its agreements, if any, with us and its compensation in the applicable prospectus supplement.
Delayed Delivery Contracts
If indicated in the applicable prospectus supplement, we will authorize dealers acting as our agents to solicit offers by institutions to purchase securities covered by this prospectus from us at the public offering price set forth in the relevant prospectus supplement under delayed delivery contracts providing for payment and delivery on the date or dates stated in the relevant prospectus supplement. Each delayed delivery contract will be for an amount not less than, and the aggregate principal amount of securities sold during a specified period followingpursuant to delayed delivery contracts shall be not less nor more than, the completionrespective amounts stated in the applicable prospectus supplement. Institutions with whom delayed delivery contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions, but will in all cases be subject to our approval. Delayed delivery contracts will not be subject to any conditions except (i) the purchase by an institution of an underwritten offering.the securities covered by its delayed delivery contracts may not at the time of delivery be prohibited under the laws of any jurisdiction in the United States to which the institution is subject, and (ii) if the securities are being sold to underwriters, we will be required to have sold to such underwriters the total principal amount of the securities less the principal amount thereof covered by delayed delivery contracts. The underwriters and any other agents will not have any responsibility in respect of the validity or performance of delayed delivery contracts.
Investors
Other Relationships
Underwriters, dealers, agents and remarketing firms may engage in this offeringtransactions with, or perform services for, us and our affiliates in the ordinary course of business. Unless we specify otherwise in the related prospectus supplement, each class or series of securities will be a new issue with no established trading market, other than shares of our common stock, which are cautionedlisted on the Nasdaq Global Select Market. It is possible that this offeringone or more underwriters may make a market in our securities, but will not includebe obligated to do so and may discontinue any market making at any time without notice. Therefore, no assurance can be given as to the participationliquidity of an underwriter or selling group, and there will be no stabilizing transactions in the aftermarket for the Series A Redeemable Preferred Stock. As a result, any events that might promote a relative excess of sales (in comparison to atrading market for purchases) may have a more significant adverse impact upon prospective selling prices and, in fact, on opportunities to sell regardless of price, than might a firmly underwritten offering.our securities.
Certain legal matters in connection with the securities offered hereby will be passed upon for us by Davis Wright Tremaine LLP, Portland, Oregon.
Moss Adams LLP, an independent registered public accounting firm, has audited our consolidated financial statements at December 31, 2014 and 2013, , and for each of the fiscal years then ended, included in our Annual Report on Form 10-K for the year ended December 31, 2014, as set forth in its report, which is incorporated by reference in this prospectus and elsewhere in the registration statement of which this prospectus forms a part. Such consolidated financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
INFORMATION NOT REQUIRED IN THE PROSPECTUS
| Item 14. | Other Expenses of Issuance and Distribution |
The following table shows the costs and expenses payable in connection with the sale and distribution of the securities being registered. All amounts reflected below are estimated.
| | | | | | | | | |
| | | Amount | | | Amount | |
| | | | | | | |
| | | | | | | |
| Securities and Exchange Commission Registration Fee | | $ | 700 | | | $ | 1,813 | |
| Accounting Fees and Expenses | | 20,000 | | | 10,000 | |
| Legal Fees and Expenses | | 75,000 | | | 35,000 | |
| Printing Fees, Marketing and Expenses | | 213,000 | | | 200,000 | |
| Blue Sky Fees and Expenses | | | 3,500 | | |
| Transfer Agent Fees and Expenses | | 20,000 | | | 20,000 | |
| Miscellaneous | | | 3,000 | | | | 10,000 | |
| | | | | | | |
| Total | | $ | 335,200 | | | $ | 276,813 | |
| Item 15. | Indemnification of Directors and Officers |
Sections 60.387 et seq. of the Oregon Business Corporation Act, or the Act, authorize and, in certain circumstances, require, a corporation’s board of directors to grant, indemnification to directors and officers on terms sufficiently broad to permit indemnification under certain circumstances for liabilities arising under the Securities Act of 1933. Our articles of incorporation and bylaws require us to indemnify our directors and executive officers, our employees and agents, and certain other persons, to the maximum extent permitted under the Act. The directors and officers of the Company also may be indemnified against liability they may incur for serving in such capacity pursuant to a liability insurance policy we maintain for such purpose. We also have entered into an indemnification agreement with Mr. Bernau for a broad range of liabilities he may incur in connection with the Company’s operations.
Item 16. Exhibits
Exhibit Number | | Description |
| | | |
3.11.1 | | ArticlesUnderwriting Agreement (to be filed by amendment)
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| | |
| 4.1 | | Certificate of IncorporationDesignation of Series A Redeemable Preferred Stock of Willamette Valley Vineyards, Inc.(incorporated |
| | |
| 4.2 | | Form of Specimen Stock Certificate for Common Stock (incorporated by reference from the Company’s Regulation A Offering Statement on Form 1-A [File No. 24S-2996]) |
| | |
| | |
| | | |
3.24.4 | | Form of Preferred Stock Certificate and Form of Certificate of Designation of Preferred Stock (to be filed by amendment) |
| | |
| 4.5 | | Form of Common Stock Warrant Agreement and Warrant Certificate (to be filed by amendment) |
| | |
| 4.6 | | Form of Preferred Sock Warrant Agreement and Warrant Certificate (to be filed by amendment) |
| | |
| | |
| | |
| | |
| 4.9 | | Form of Senior Note (to be filed by amendment) |
| | |
| 4.10 | | Form of Subordinated Note (to be filed by amendment) |
| | |
| 4.11 | | Form of Rights Agreement and Certificate (to be filed by amendment) |
| | |
| 4.12 | | Form of Unit Agreement (to be filed by amendment) |
| | |
| | |
| | |
| 10.1 | | Indemnity Agreement between Willamette Valley Vineyards, Inc. (incorporatedand James W. Bernau dated May 2, 1988 (incorporated by reference from the Company’s Regulation A Offering Statement on Form 1-A [File No. 24S-2996]) |
| | |
| | |
| | |
4.2 | | Form of Specimen Stock Certificate for Common Stock (incorporated by reference from the Company’s Regulation A Offering Statement on Form 1-A [File No. 24S-2996])
|
| | |
| | |
| | |
5.1 | | Opinion of Davis Wright Tremaine LLP (Previously Filed)
|
| | |
10.1 | | Indemnity Agreement between Willamette Valley Vineyards, Inc. and James W. Bernau dated May 2, 1988 (incorporated by reference from the Company’s Regulation A Offering Statement on Form 1-A [File No. 24S-2996])
|
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| | | |
| 23.2 | | Consent of Davis Wright Tremaine LLP (included(included in Exhibit 5.1 as previously filed ) 5.1) |
| (a) | The undersigned registrant hereby undertakes: |
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
| | (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| | (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; |
| | (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) above do not apply if the registration statements is on Form S-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for purposes of determining any liability under the Securities Act of 1933 to any purchaser:
| (i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporate or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
(5) That, for purposes of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrants; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) The undersigned registrant hereby undertakes that, for the purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 15 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.
The undersigned also hereby undertakes that:
| (a) | For the purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
| (b) | For purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Turner, Oregon, on this 31st22nd day of July 2015 .December 2015.
| | Willamette Valley Vineyards, Inc. | |
| | | | |
| | By: | /s/ James W. Bernau | |
| | Name: | James W. Bernau | |
| | Title: | President & Chief Executive Officer | |
| | | |
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints each of James W. Bernau and Richard F. Goward Jr. as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities to sign any and all amendments (including post-effective amendments) to this registration statement (and to any registration statement filed pursuant to Rule 462 under the Securities Act of 1933, as amended), and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitutes, each acting alone, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on July 31 ,December 22, 2015.
| Signature | | Title | | Date |
| | | | |
| | | | | |
| /s/ James W. Bernau | | Chairperson of the Board, | | July 31 ,December 22, 2015 |
| James W. Bernau | | President (Principal Executive Officer) | | |
| | | | | |
| /s/ Richard F. Goward, Jr. | | Chief Financial Officer | | July 31 ,December 22, 2015 |
| Richard F. Goward, Jr. | | (Principal Financial and Accounting Officer | | |
| | | | | |
/s/ James L. Ellis*Ellis | | Director | | July 31 ,December 22, 2015 |
| James L. Ellis | | | | |
| | | | | |
/s/ Christopher L. Sarles*Sarles | | Director | | July 31 ,December 22, 2015 |
| Christopher L. Sarles | | | | |
| | | | | |
/s/ Craig Smith*Smith | | Director | | July 31 ,December 22, 2015 |
| Craig Smith | | | | |
| | | | | |
/s/ Betty M. O’Brien*O’Brien | | Director | | July 31 ,December 22, 2015 |
| Betty M. O’Brien | | | | |
| | | | | |
/s/ Stan G. Turel*Turel | | Director | | July 31 ,December 22, 2015 |
| Stan G. Turel | | | | |
| | | | | |
/s/ Sean M. Cary*Cary | | Director | | July 31 ,December 22, 2015 |
| Sean M. Cary | | | | |
| | | | | |
* By James W. Bernau, Attorney in Fact
EXHIBIT INDEX
Exhibit Number | |
3.1 | Articles of Incorporation of Willamette Valley Vineyards, Inc. (incorporated by reference from the Company’s Regulation A Offering Statement on Form 1-A [File No. 24S-2996])
Description |
| | | |
3.21.1 | Bylaws of Willamette Valley Vineyards, Inc. (incorporated
| Underwriting Agreement (to be filed by reference from the Company’s Regulation A Offering Statement on Form 1-A [File No. 24S-2996])amendment) |
| | | |
| | Certificate of Designation of Series A Redeemable Preferred Stock of Willamette Valley Vineyards, Inc. |
| | |
| 4.2 | | Form of Specimen Stock Certificate for Common Stock (incorporated by reference from the Company’s Regulation A Offering Statement on Form 1-A [File No. 24S-2996]) |
| | | |
| | |
| | | |
5.14.4 | | Form of Preferred Stock Certificate and Form of Certificate of Designation of Preferred Stock (to be filed by amendment) |
| | |
| 4.5 | | Form of Common Stock Warrant Agreement and Warrant Certificate (to be filed by amendment) |
| | |
| 4.6 | | Form of Preferred Sock Warrant Agreement and Warrant Certificate (to be filed by amendment) |
| | |
| | |
| | |
| | |
| | |
| 4.9 | | Form of Senior Note (to be filed by amendment) |
| | |
| 4.10 | | Form of Subordinated Note (to be filed by amendment) |
| | |
| 4.11 | | Form of Rights Agreement and Certificate (to be filed by amendment) |
| | |
| 4.12 | | Form of Unit Agreement (to be filed by amendment) |
| | |
| | |
| | | |
| 10.1 | | Indemnity Agreement between Willamette Valley Vineyards, Inc. and James W. Bernau dated May 2, 1988 (incorporated by reference from the Company’s Regulation A Offering Statement on Form 1-A [File No. 24S-2996]) |
| | | |
| | |
| | | |
| 23.2 | | Consent of Davis Wright Tremaine LLP (included in Exhibit 5.1 as previously filed ) |
| |
