Document And Entity Information
Document And Entity Information | 3 Months Ended |
Mar. 31, 2024 | |
Document Information Line Items | |
Entity Registrant Name | FRESH VINE WINE, INC. |
Document Type | S-4/A |
Amendment Flag | true |
Amendment Description | Amendment No. 1 |
Entity Central Index Key | 0001880343 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Incorporation, State or Country Code | NV |
Balance Sheets
Balance Sheets - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | |||
Cash | $ 58,812 | $ 236,340 | |
Restricted cash | 50,039 | 100,000 | |
Accounts receivable | 48,982 | 172,101 | |
Inventories | 172,332 | 337,873 | |
Prepaid expenses | 31,865 | 42,943 | |
Deferred offering costs | 22,850 | ||
Total current assets | 384,880 | 889,257 | |
Equity investment | 500,000 | 500,000 | |
Total assets | 884,880 | 1,389,257 | |
Current liabilities | |||
Accounts payable | 1,100,838 | 509,337 | |
Settlement payable | 585,976 | 585,976 | |
Accrued expenses | 847,601 | 810,723 | |
Note payable | 15,000 | ||
Deferred revenue | 6,016 | 3,407 | |
Total current liabilities | 2,864,764 | 2,218,776 | |
Total liabilities | 2,864,764 | 2,218,776 | |
Stockholders’ deficit | |||
Preferred stock, value | |||
Common stock, value | 15,976 | 15,976 | |
Additional paid-in capital | 25,723,204 | 25,631,255 | |
Accumulated deficit | (27,719,075) | (26,476,760) | |
Total stockholders’ deficit | (1,979,884) | (829,519) | $ (5,613,606) |
Total liabilities and stockholders’ deficit | 884,880 | 1,389,257 | |
Related Party | |||
Current liabilities | |||
Accrued expenses – related parties | 309,333 | 309,333 | |
Previously reported | |||
Current assets | |||
Cash | 236,340 | 2,080,335 | |
Restricted cash | 100,000 | ||
Accounts receivable | 172,101 | 259,317 | |
Due from employees – net of credit loss allowance of $0 and $20,000, respectively | 37,733 | ||
Insurance recovery receivable | 804,907 | ||
Inventories | 337,873 | 3,696,198 | |
Prepaid expenses | 42,943 | 961,211 | |
Deferred offering costs | 68,286 | ||
Total current assets | 889,257 | 7,907,987 | |
Equity investment | 500,000 | ||
Prepaid expenses (long-term) | 678,167 | ||
Total assets | 1,389,257 | 8,586,154 | |
Current liabilities | |||
Accounts payable | 509,337 | 589,204 | |
Accrued compensation | 420,413 | ||
Settlement payable | 585,976 | 1,250,000 | |
Accrued expenses | 810,723 | 422,931 | |
Deferred revenue | 3,407 | 10,000 | |
Total current liabilities | 2,218,776 | 2,972,548 | |
Total liabilities | 2,218,776 | 2,972,548 | |
Commitment and contingencies – Note 12 | |||
Stockholders’ deficit | |||
Preferred stock, value | 10 | ||
Common stock, value | 15,976 | 12,732 | |
Additional paid-in capital | 25,631,255 | 21,420,732 | |
Accumulated deficit | (26,476,760) | (15,819,858) | |
Total stockholders’ deficit | (829,519) | 5,613,606 | |
Total liabilities and stockholders’ deficit | 1,389,257 | 8,586,154 | |
Previously reported | Related Party | |||
Current liabilities | |||
Accrued expenses – related parties | 309,333 | $ 280,000 | |
Series A preferred stock | |||
Stockholders’ deficit | |||
Preferred stock, value | 10 | 10 | |
Series B preferred stock | |||
Stockholders’ deficit | |||
Preferred stock, value | $ 1 |
Balance Sheets (Parentheticals)
Balance Sheets (Parentheticals) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, shares issued | 15,976,227 | 15,976,227 | |
Common stock, shares outstanding | 15,976,227 | 15,976,227 | |
Series A preferred stock | |||
Preferred stock, shares issued | 10,000 | 10,000 | |
Preferred stock, shares outstanding | 10,000 | 10,000 | |
Series B preferred stock | |||
Preferred stock, shares issued | 940 | 0 | |
Preferred stock, shares outstanding | 940 | 0 | |
Previously reported | |||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, shares issued | 15,976,227 | 12,732,257 | |
Common stock, shares outstanding | 15,976,227 | 12,732,257 | |
Due from employees – net of credit loss allowance (in Dollars) | $ 0 | $ 20,000 | |
Previously reported | Series A Convertible Preferred Stock | |||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | |
Preferred stock, shares issued | 10,000 | 0 | |
Preferred stock, shares outstanding | 10,000 | 0 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Total net revenue | $ 104,568 | $ 408,630 | $ 1,826,190 | $ 2,860,001 |
Cost of revenues | 215,816 | 411,992 | 4,412,119 | 2,551,009 |
Gross loss | (111,248) | (3,362) | (2,585,929) | 308,992 |
Selling, general and administrative expenses | 1,099,480 | 1,672,766 | 6,322,184 | 11,489,804 |
Equity-based compensation | 1,626 | 335,922 | 1,708,218 | 4,053,123 |
Operating loss | (1,212,354) | (2,012,050) | (10,616,331) | (15,233,936) |
Other income | 39 | 1,226 | 1,296 | 31,429 |
Net loss | (1,212,315) | (2,010,824) | (10,615,035) | (15,202,507) |
Series A preferred dividends | 30,000 | 41,867 | ||
Net loss attributable to common stockholders | $ (1,242,315) | $ (2,010,824) | $ (10,656,902) | $ (15,202,507) |
Weighted averages shares outstanding | ||||
Basic (in Shares) | 15,976,227 | 13,332,790 | 15,329,617 | 12,550,096 |
Diluted (in Shares) | 15,976,227 | 13,332,790 | 15,329,617 | 12,550,096 |
Net loss per share – basic (in Dollars per share) | $ (0.08) | $ (0.15) | $ (0.69) | $ (1.21) |
Net loss per share – diluted (in Dollars per share) | $ (0.08) | $ (0.15) | $ (0.69) | $ (1.21) |
Wholesale Revenue | ||||
Total net revenue | $ 28,492 | $ 288,374 | $ 1,328,382 | $ 1,651,451 |
Direct to Consumer Revenue | ||||
Total net revenue | $ 76,076 | $ 120,256 | 497,808 | 911,326 |
Related Party Service Revenue | ||||
Total net revenue | $ 297,224 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Preferred Stock Series A | Preferred Stock Series B | Preferred Stock Previously reported | Preferred Stock | Common Stock Previously reported | Common Stock | Additional Paid-In Capital Previously reported | Additional Paid-In Capital | Accumulated Deficit Previously reported | Accumulated Deficit | Previously reported | Total |
Balances at Dec. 31, 2021 | $ 12,200 | $ 17,681,141 | $ (617,351) | $ 17,075,990 | ||||||||
Balances (in Shares) at Dec. 31, 2021 | 12,200,013 | |||||||||||
Equity-based compensation | $ 532 | 2,506,291 | 2,506,823 | |||||||||
Equity-based compensation (in Shares) | 532,244 | |||||||||||
Vendor stock issuance | $ 970 | 1,232,330 | 1,233,300 | |||||||||
Vendor stock issuance (in Shares) | 970,000 | |||||||||||
Stock forfeitures | $ (970) | 970 | ||||||||||
Stock forfeitures (in Shares) | (970,000) | |||||||||||
Net loss | (15,202,507) | (15,202,507) | ||||||||||
Balances at Dec. 31, 2022 | $ 12,732 | $ 12,732 | $ 21,420,732 | 21,420,732 | $ (15,819,858) | (15,819,858) | $ 5,613,606 | (5,613,606) | ||||
Balances (in Shares) at Dec. 31, 2022 | 12,732,257 | 12,732,257 | ||||||||||
Rights offering – common stock and warrants issued | $ 3,144 | 2,543,584 | 2,546,728 | |||||||||
Rights offering – common stock and warrants issued (in Shares) | 3,143,969 | |||||||||||
Equity-based compensation | $ 500 | 257,172 | 257,672 | |||||||||
Equity-based compensation (in Shares) | 500,000 | |||||||||||
Stock forfeitures | $ (500) | 500 | ||||||||||
Stock forfeitures (in Shares) | (500,000) | |||||||||||
Net loss | (2,010,824) | (2,010,824) | ||||||||||
Balances at Mar. 31, 2023 | $ 15,876 | 24,221,988 | (17,830,682) | (6,407,182) | ||||||||
Balances (in Shares) at Mar. 31, 2023 | 15,876,226 | |||||||||||
Balances at Dec. 31, 2022 | $ 12,732 | $ 12,732 | 21,420,732 | 21,420,732 | (15,819,858) | (15,819,858) | 5,613,606 | (5,613,606) | ||||
Balances (in Shares) at Dec. 31, 2022 | 12,732,257 | 12,732,257 | ||||||||||
Rights offering – common stock and warrants issued | $ 3,144 | 2,543,584 | 2,546,728 | |||||||||
Rights offering – common stock and warrants issued (in Shares) | 3,143,969 | |||||||||||
Dividends declared – preferred stock – Series A ($12.00/share) | (41,867) | (41,867) | ||||||||||
Issuance of Series B preferred stock | $ 10 | 949,990 | 950,000 | |||||||||
Issuance of Series B preferred stock (in Shares) | 10,000 | |||||||||||
Equity-based compensation | $ 1,641 | 715,408 | 717,049 | |||||||||
Equity-based compensation (in Shares) | 1,641,332 | |||||||||||
Stock forfeitures | $ (1,541) | 1,541 | ||||||||||
Stock forfeitures (in Shares) | (1,541,331) | |||||||||||
Net loss | (10,615,035) | (10,615,035) | (10,615,035) | |||||||||
Balances at Dec. 31, 2023 | $ 10 | $ 10 | $ 15,976 | $ 15,976 | $ 25,631,255 | 25,631,255 | $ (26,476,760) | (26,476,760) | $ (829,519) | (829,519) | ||
Balances (in Shares) at Dec. 31, 2023 | 10,000 | 10,000 | 15,976,227 | 15,976,227 | ||||||||
Issuance of Series B preferred stock | $ 1 | 90,324 | 90,325 | |||||||||
Issuance of Series B preferred stock (in Shares) | 940 | |||||||||||
Accrued preferred dividends, Series A (12%/share) | (30,000) | (30,000) | ||||||||||
Equity-based compensation | 1,625 | 1,625 | ||||||||||
Net loss | (1,212,315) | (1,212,315) | ||||||||||
Balances at Mar. 31, 2024 | $ 10 | $ 1 | $ 15,976 | $ 25,723,204 | $ (27,719,075) | $ (1,979,884) | ||||||
Balances (in Shares) at Mar. 31, 2024 | 10,000 | 940 | 15,976,227 |
Statements of Changes in Stoc_2
Statements of Changes in Stockholders' Equity (Deficit) (Parentheticals) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Preferred dividends percentage | 12% | |
Previously reported | Preferred Stock Series A | ||
Dividends declared | $ 12 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities | ||||
Net loss | $ (1,212,315) | $ (2,010,824) | $ (10,615,035) | $ (15,202,507) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Amortization | 3,990 | |||
Equity-based compensation | 1,626 | 335,922 | 1,708,218 | 4,053,123 |
Inventory write-down | 110,366 | 1,844,210 | ||
Allowance for doubtful accounts | 15,000 | 37,733 | ||
Changes in operating assets and liabilities | ||||
Accounts receivable | 123,119 | 29,073 | 87,216 | (51,157) |
Accounts receivable – related party | 153,075 | |||
Insurance recovery receivable | 804,907 | 804,907 | (804,907) | |
Receivables with recourse | 146,314 | |||
Related party receivables | 376,000 | |||
Due from employee | (37,733) | |||
Inventories | 55,175 | 228,360 | 1,514,115 | (3,537,138) |
Prepaid expenses and other | 11,078 | (76,339) | 605,268 | 189,776 |
Deferred offering costs | (22,850) | |||
Accounts payable | 591,501 | 188,141 | (79,867) | 172,488 |
Accrued compensation | (420,413) | (420,413) | 3,999 | |
Settlement payable | (1,250,000) | (664,024) | 1,250,000 | |
Accrued expenses | 6,877 | 103,439 | 345,923 | 210,065 |
Accrued expenses – related parties | (30,000) | 29,333 | (249,617) | |
Deferred revenue | 2,609 | (9,075) | (6,593) | (3,750) |
Related party payables | (200,272) | |||
Net cash used in operating activities | (332,814) | (2,091,809) | (4,809,009) | (13,528,251) |
Cash flows from investing activities | ||||
Equity investment | (500,000) | |||
Net cash used in investing activities | (500,000) | |||
Cash flows from financing activities | ||||
Proceeds from note payable | 15,000 | |||
Payments of related party notes payable | (216,000) | |||
Payments of outstanding secured borrowings | (171,069) | |||
Proceeds from issuance of Series B preferred stock – net of issuance costs | 90,325 | 950,000 | ||
Payments for deferred offering costs | (68,286) | |||
Proceeds from rights offering – net of issuance costs | 2,615,014 | 2,615,014 | ||
Net cash provided by financing activities | 105,325 | 2,615,014 | 3,565,014 | (455,355) |
Net (decrease) increase in cash and restricted cash | (227,489) | 523,205 | (1,743,995) | (13,983,606) |
Cash and restricted cash – beginning of period | 336,340 | 2,080,335 | 2,080,335 | 16,063,941 |
Cash and restricted cash – end of period | 108,851 | 2,603,540 | 336,340 | 2,080,335 |
Supplemental disclosure of non-cash investing and financing activities | ||||
Accrued Series A dividends | $ 30,000 | $ 41,867 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Fresh Vine Wine, Inc. (“the Company”, “our”, “we”), a Nevada corporation, is a premium wine brand built to complement consumers’ healthy and active lifestyles. The Company provides a competitively priced premium product that is blended to deliver several important benefits, such as low -cal -sugar -carb -free The Company’s revenue is comprised primarily of wholesale and direct to consumer (DTC) sales, and representation and distribution services. Wholesale revenue is generated through sales to distributors located in states throughout the United States of America. DTC revenue is generated from individuals purchasing wine directly from the Company through club membership and the Company’s website. Basis of Presentation The Company’s financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the financial statements. In certain instances, amounts reported in prior period financial statements have been reclassified to conform to the current financial statement presentation. Agreement and Plan of Merger On January 25, 2024, the Company, FVW Merger Sub, Inc., a Colorado corporation and a wholly -owned -owned Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger, (i) each then outstanding share of Notes Live common stock (collectively, “Notes Live common stock”) (which comprises all of Notes Live’s outstanding capital stock) will be converted into the right to receive a number of shares of Fresh Vine common stock calculated in accordance with the Merger Agreement (the “Exchange Ratio”), (ii) each then outstanding warrant to purchase Notes Live common stock will be exchanged (or otherwise amended) for a warrant exercisable (at an exercise price adjusted to reflect to the Exchange Ratio) to acquire that number of shares of Fresh Vine common stock equal to the number of warrant shares multiplied by the Exchange Ratio, and (iii) any then outstanding Notes Live promissory note that is convertible into Notes Live common stock will be exchanged, or otherwise amended, such that it will be convertible from and after the Merger into shares of Fresh Vine common stock at a per share conversion price adjusted to reflect the Exchange Ratio. Each share of Fresh Vine common stock and each option and warrant to purchase Fresh Vine common stock that is outstanding at the effective time of the Merger will remain outstanding in accordance with its terms and such shares of Fresh Vine common stock, options and warrants will be unaffected by the merger (subject adjustment based on the proposed Reverse Split described below). As contemplated by the Merger Agreement, Fresh Vine intends to effect a reverse stock split at or around the effective date of the merger at a ratio that results in the Fresh Vine common stock satisfying the initial listing standards of the NYSE American stock exchange and the exchange ratio in the Merger being as near to one as reasonably practicable (i.e., so that each share of Notes Live capital stock will be exchanged in the Merger for approximately one share of Fresh Vine common stock) (the “Reverse Split”). At the effective time of the Merger, the board of directors of Fresh Vine is expected to consist of seven members, all of whom will be designated by Notes Live. The Merger Agreement contains certain termination rights of each of Fresh Vine and Notes Live. Upon termination of the Merger Agreement under specified circumstances, Fresh Vine may be required to pay Notes Live a termination fee of $1.0 million and/or reimburse Notes Live’s expenses up to a maximum of $500,000, and Notes Live may be required to pay Fresh Vine a termination fee of $1.0 million, reimburse Fresh Vine’s expenses up to a maximum of $500,000, and/or, at the election of Fresh Vine, redeem the Fresh Vine Equity Investment at the same price per share as the purchase price paid by Fresh Vine therefor. Liquidity, Going Concern, and Management Plan Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $27.7 million as of March 31, 2024. Cash flows used in operating activities were approximately $333,000 and $2.1 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company had an approximately $2.5 million working capital deficit, inclusive of approximately $59,000 in cash and cash equivalents and $50,000 in restricted cash. The Company has increased its liquidity by selling inventory at prices below cost, by significantly reducing staffing levels and by the termination of celebrity endorsement contracts. The Company’s ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors including but not limited to, cash and cash equivalents, working capital and strategic capital raises. The ultimate success of these plans is not guaranteed. In considering our forecast for the next twelve months and the current cash and working capital as of the filing of this Form 10 -Q The Company received gross proceeds of $94,000 and $1 million from preferred stock offerings during the periods ended March 31, 2024 and December 31, 2023, respectively. During the quarter ended March 31, 2024, the Company entered into an Agreement and Plan of Merger (Agreement) with Notes Live, Inc. The Company will need to seek additional debt or equity financing to sustain existing operations. If adequate financing is not available, the Company will be forced to take measures to severely reduce our expenses and business operations or discontinue them completely. Such financing, if available, may be dilutive. At the current reduced pace of incurring expenses and with receipt of additional financing and the receipt of proceeds from the expected sales of inventory, the Company projects that the existing cash balance will be sufficient to fund current operations into the second quarter of 2024, after which additional financing or capital will be needed to satisfy obligations. Additional financing may not be available on favorable terms or at all. If additional financing is available, it may be highly dilutive to existing shareholders and may otherwise include burdensome or onerous terms. The Company’s inability to raise additional working capital in a timely manner would negatively impact the ability to fund operations, generate revenues, maintain or grow the business and otherwise execute the Company’s business plan, leading to the reduction or suspension of operations and ultimately potentially ceasing operations altogether and initiating bankruptcy proceedings. Should this occur, the value of any investment in the Company’s securities would be adversely affected. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include allowance for doubtful accounts, allowance for inventory obsolescence, equity -based -employees Cash The Company maintains its accounts at two financial institutions. At times throughout the year, the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. Restricted Cash Included in the cash balance is a balance of $50,000 and $100,000 as of March 31, 2024 and December 31, 2023, respectively, that the Company’s operating bank has required us to maintain as a security for collectability of automated clearing house transactions. These funds are held in a separate account and are not available for disbursements. Accounts Receivable Accounts receivable consists of amounts owed to the Company for sales of the Company’s products on credit and are reported at net realizable value. Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial conditions. The Company estimates allowances for future returns and doubtful accounts based upon historical experience and its evaluation of the current status of receivables. Accounts considered uncollectible are written off against the allowance. As of March 31, 2024 and December 31, 2023 there was no allowance for doubtful accounts. Inventories Inventories primarily include bottled wine which is carried at the lower of cost (calculated using the average cost method) or net realizable value. The Company reduces the carrying value of inventories that are obsolete or for which market conditions indicate cost will not be recovered to estimated net realizable value. The Company’s estimate of net realizable value is based on analysis and assumptions including, but not limited to, historical experience, future demand, and market requirements. Reductions to the carrying value of inventories are recorded in cost of revenues. As of March 31, 2024 and December 31, 2023, the Company had recorded an inventory allowance of approximately $110,000 and $112,000, respectively. Deferred Offering Costs Deferred offering costs primarily consists of legal fees and any other fees relating to the Company’s Series B preferred stock offering. The deferred offering costs were capitalized as incurred and were offset against proceeds from the sale of Series B preferred stock at the closing of the Company’s offering. Investment in Equity Securities The Company has elected the measurement alternative for non -marketable -marketable Revenue recognition The Company’s total revenue reflects the sale of wine domestically in the U.S. to wholesale distributors or DTC customers. Under ASC Topic 606, Revenue from Contracts with Customers contract includes a single performance obligation to transfer control of the product to the customer. Control is transferred when the product is either shipped or delivered, depending on the shipping terms, at which point the Company recognizes the transaction price for the product as revenue. The Company has elected to account for shipping and handling as a fulfillment activity, with amounts billed to customers for shipping and handling included in total revenue. The Company also generates revenue through membership in its wine club. Wine club members pay a monthly fee, which varies depending on level of membership, and are entitled to receive quarterly shipments of wine, free shipping, and discounts on other wine and merchandise purchased. The Company recognizes revenue for the monthly membership dues when the product is delivered. Any membership dues received before the product is delivered is recorded as deferred revenue on the Company’s balance sheet. ASC 606 notes that when another party is involved in providing goods or services to a customer, the entity should determine whether the nature of its promise is a performance obligation to provide the specified goods or services itself (that is, the entity is a principal) or to arrange for those goods or services to be provided by the other party (that is, the entity is an agent). The Company does not bear responsibility for inventory losses and does not have pricing determination; therefore, the Company would be considered the agent and revenue should be recognized as net sales. Products are sold for cash or on credit terms. Credit terms are established in accordance with local and industry practices, and typically require payment within 30 -60 The following table presents the percentages of total revenue disaggregated by sales channels for the three months ended March 31, 2024 and 2023: Three months ended 2024 2023 Wholesale 27.2 % 70.6 % Direct to consumer 72.8 % 29.4 % Total revenue 100.0 % 100.0 % Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (FASB) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • • • The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The carrying values of cash, accounts receivable, accounts payable, deferred revenue and other financial working capital items approximate fair value at March 31, 2024 and December 31, 2023, due to the short maturity nature of these items. Income Taxes The Company recognizes uncertain tax positions in accordance with ASC 740 on the basis of evaluating whether it is more likely than not that the tax positions will be sustained upon examination by tax authorities. For those tax positions that meet the more -likely-than Equity-Based Compensation The Company measures equity -based The Company measures equity -based -based See Note 8 for further discussion of equity -based Advertising The Company expenses the costs of advertising as incurred. Advertising expenses were approximately $145,000 and $490,000 for the three months ended March 31, 2024 and 2023, respectively. Application of New or Revised Accounting Standards Pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), a company constituting an “emerging growth company” is, among other things, entitled to rely upon certain reduced reporting requirements and is eligible to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. The Company is an emerging growth company and has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocable opts out of the extended transition period provide in the JOBS Act. NYSE Listing Requirements On September 8, 2023, the Company received a written notice (the “Notice”) from NYSE American stating that it was not in compliance with Section 1003(a)(ii) of the NYSE American Company Guide (the “Company Guide”), which requires a listed company that has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years to maintain at least $4 million of stockholders’ equity. The Company reported stockholders’ deficit of approximately $2 million as of March 31, 2024 and have had losses from continuing operations and/or net losses in each of the fiscal years ended December 31, 2020, 2021, 2022 and 2023. As required by the NYSE American, the Company submitted a plan to the NYSE American on October 9, 2023 addressing actions it has taken and how it intends to regain compliance with the continued listing standards within the required 18 On November 21, 2023, the Company received notification (the “Acceptance Letter”) from NYSE American that the Company’s plan to regain compliance with NYSE American’s listing standards was accepted. The Acceptance Letter also stated that the Company is not in compliance with Section 1003(a)(i) of the Company Guide, which requires an issuer to have stockholders’ equity of $2.0 million or more if it has reported losses from continuing operations and/or net losses in two out of its three most recent fiscal years. NYSE American has granted the Company a plan period through March 8, 2025 to regain compliance with Sections 1003(a)(i) and (ii) of the Company Guide. If the Company is not in compliance with all continued listing standards by that date or if the Company does not make progress consistent with the plan during the plan period, the Company will be subject to delisting proceedings. | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Business Fresh Vine Wine, Inc. (“the Company”, “our”, “we”), a Nevada corporation, is a premium wine brand built to complement consumers’ healthy and active lifestyles. The Company provides a competitively priced premium product that is blended to deliver several important benefits, such as low -cal -sugar -carb -free The Company’s revenue is comprised primarily of wholesale and direct to consumer (DTC) sales, and representation and distribution services. Wholesale revenue is generated through sales to distributors located in states throughout the United States of America. DTC revenue is generated from individuals purchasing wine directly from the Company through club membership and the Company’s website. Representation and distribution service revenue is generated by providing access to new markets and distribution channels. Basis of Presentation The Company’s financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the financial statements. In certain instances, amounts reported in prior period financial statements have been reclassified to conform to the current financial statement presentation. Liquidity, Going Concern, and Management Plan Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $26.5 million as of December 31, 2023. Cash flows used in operating activities were $4.8 million and $13.5 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company had approximately a $1.3 million deficiency in working capital, inclusive of $236,000 in cash and cash equivalents and $100,000 in restricted cash. The Company has increased its liquidity by selling inventory at prices below cost, by significantly reducing staffing levels and by the termination of celebrity endorsement contracts. The Company’s ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors including but not limited to, cash and cash equivalents, working capital and strategic capital raises. The ultimate success of these plans is not guaranteed. In considering our forecast for the next twelve months and the current cash and working capital as of the filing of this Form 10 -K The Company received gross proceeds of $1 million from a preferred stock offering during the year ended December 31, 2023. Subsequent to year end, the Company entered into an Agreement and Plan of Merger (Agreement) with Notes Live, Inc. See Note 15 for further details on the Agreement. The Company will need to seek additional debt or equity financing to sustain existing operations. If adequate financing is not available, the Company will be forced to take measures to severely reduce our expenses and business operations or discontinue them completely. Such financing, if available, may be dilutive. At the current reduced pace of incurring expenses and without receipt of additional financing and the receipt of proceeds from the expected sales of inventory under purchase orders from a discount retailer entered into in the third quarter of 2023, the Company projects that the existing cash balance will be sufficient to fund current operations into the first quarter of 2024, after which additional financing or capital will be needed to satisfy obligations. Additional financing may not be available on favorable terms or at all. If additional financing is available, it may be highly dilutive to existing shareholders and may otherwise include burdensome or onerous terms. The Company’s inability to raise additional working capital in a timely manner would negatively impact the ability to fund operations, generate revenues, maintain or grow the business and otherwise execute the Company’s business plan, leading to the reduction or suspension of operations and ultimately potentially ceasing operations altogether and initiating bankruptcy proceedings. Should this occur, the value of any investment in the Company’s securities would be adversely affected. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include allowance for doubtful accounts, allowance for inventory obsolescence, equity -based -employees Cash The Company maintains its accounts at two financial institutions. At times throughout the year, the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. Restricted Cash Included in the cash balance is a deposit of $100,000 that the Company operating bank has required us to maintain as a security for collectability of automated clearing house transactions. These funds are held in a separate account and are not available for disbursements. Accounts Receivable Accounts receivable consists of amounts owed to the Company for sales of the Company’s products on credit and are reported at net realizable value. Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial conditions. The Company estimates allowances for future returns and doubtful accounts based upon historical experience and its evaluation of the current status of receivables. Accounts considered uncollectible are written off against the allowance. As of December 31, 2023 and 2022 there was no allowance for doubtful accounts. Inventories Inventories primarily include bottled wine which is carried at the lower of cost (calculated using the average cost method) or net realizable value. The Company reduces the carrying value of inventories that are obsolete or for which market conditions indicate cost will not be recovered to estimated net realizable value. The Company’s estimate of net realizable value is based on analysis and assumptions including, but not limited to, historical experience, future demand, and market requirements. Reductions to the carrying value of inventories are recorded in cost of revenues. As of December 31, 2023 and 2022, the Company had recorded an inventory allowance of approximately $112,000 and $0, respectively. Deferred Offering Costs Deferred offering costs primarily consist of legal, accounting, SEC filing fees, and any other fees relating to the Company’s subscription rights offering and preferred equity offering. The deferred offering costs as of December 31, 2022 were capitalized as incurred and were offset against proceeds from the sale of rights at the closing of the Company’s capital raise completed on March 14, 2023. Investment in Equity Securities The Company has elected the measurement alternative for non -marketable -marketable Revenue recognition The Company’s total revenue reflects the sale of wine domestically in the U.S. to wholesale distributors or DTC and related party service revenues. Under ASC Topic 606, Revenue from Contracts with Customers The Company also generates revenue through membership in its wine club. Wine club members pay a monthly fee, which varies depending on level of membership, and are entitled to receive quarterly shipments of wine, free shipping, and discounts on other wine and merchandise purchased. The Company recognizes revenue for the monthly membership dues when the product is delivered. Any membership dues received before the product is delivered is recorded as deferred revenue on the Company’s balance sheet. The Company has determined that related party service revenue should be recognized over the period of time it provides such services. ASC 606 also notes that when another party is involved in providing goods or services to a customer, the entity should determine whether the nature of its promise is a performance obligation to provide the specified goods or services itself (that is, the entity is a principal) or to arrange for those goods or services to be provided by the other party (that is, the entity is an agent). The Company does not bear responsibility for inventory losses and does not have pricing determination; therefore, the Company would be considered the agent and revenue should be recognized as net sales. Products are sold for cash or on credit terms. Credit terms are established in accordance with local and industry practices, and typically require payment within 30 -60 The following table presents the percentages of total revenue disaggregated by sales channels for the years ended December 31, 2023 and 2022: Year ended 2023 2022 Wholesale 72.7 % 57.7 % Direct to consumer 27.3 % 31.9 % Related party service — % 10.4 % Total revenue 100.0 % 100.0 % Contract Balances and Receivables When the Company receives pre -orders Contract liabilities as of December 31, 2023 and 2022, and January 1, 2022 were $3,407, $10,000 and $13,750, respectively. Revenue recognized in 2023 and 2022 from contract liabilities as of December 31, 2022 and December 31, 2021 was $10,000 and $13,750, respectively. Receivables with customers as of December 31, 2023 and 2022, and January 1, 2022, were $172,101, $259,317 and $208,160, respectively. Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (FASB) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • • • The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The carrying values of cash, accounts receivable, accounts payable, deferred revenue and other financial working capital items approximate fair value at December 31, 2023 and 2022, due to the short maturity nature of these items. Income Taxes The Company recognizes uncertain tax positions in accordance with ASC 740 on the basis of evaluating whether it is more likely than not that the tax positions will be sustained upon examination by tax authorities. For those tax positions that meet the more -likely-than Equity-Based Compensation The Company measures equity -based -based The Company measures equity -based -based See Note 9 for further discussion of equity -based Advertising The Company expenses the costs of advertising as incurred. Advertising expense for the years ended December 31, 2023 and 2022, was $1,576,325 and $3,059,429, respectively. Application of New or Revised Accounting Standards Pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), a company constituting an “emerging growth company” is, among other things, entitled to rely upon certain reduced reporting requirements and is eligible to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. The Company is an emerging growth company and has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocable opts out of the extended transition period provide in the JOBS Act. NYSE Listing Requirements On September 8, 2023, the Company received a written notice (the “Notice”) from NYSE American stating that it was not in compliance with Section 1003(a)(ii) of the NYSE American Company Guide (the “Company Guide”), which requires a listed company that has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years to maintain at least $4 million of stockholders’ equity. The Company reported stockholders’ deficit of approximately $712,000 as of December 31, 2023 and have had losses from continuing operations and/or net losses in each of the fiscal years ended December 31, 2020, 2021, 2022 and 2023. As required by the NYSE American, the Company submitted a plan to the NYSE American on October 9, 2023 addressing actions it has taken and how it intends to regain compliance with the continued listing standards within the required 18 On November 21, 2023, the Company received notification (the “Acceptance Letter”) from NYSE American that the Company’s plan to regain compliance with NYSE American’s listing standards was accepted. The Acceptance Letter also stated that the Company is not in compliance with Section 1003(a)(i) of the Company Guide, which requires an issuer to have stockholders’ equity of $2.0 million or more if it has reported losses from continuing operations and/or net losses in two out of its three most recent fiscal years. NYSE American has granted the Company a plan period through March 8, 2025 to regain compliance with Sections 1003(a)(i) and (ii) of the Company Guide. If the Company is not in compliance with all continued listing standards by that date or if the Company does not make progress consistent with the plan during the plan period, the Company will be subject to delisting proceedings. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016 -13 Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, -looking |
Loss Per Share
Loss Per Share | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Loss Per Share [Abstract] | ||
LOSS PER SHARE | 2. LOSS PER SHARE Basic net loss per share is determined by dividing net loss attributable to shareholders by the weighted -average -dilutive Three Months Ended March 31, 2024 2023 Numerator: Net loss $ (1,212,315 ) $ (2,010,824 ) Less: dividends on Series A preferred stock 30,000 — Net loss attributable to common stockholders $ (1,242,315 ) $ (2,010,824 ) Denominator: Basic – weighted shares outstanding 15,976,227 13,332,790 Dilutive effect from shares authorized — — Diluted – weighted shares outstanding 15,976,227 13,332,790 Basic loss per share $ (0.08 ) $ (0.15 ) Diluted loss per share $ (0.08 ) $ (0.15 ) At March 31, 2024 and 2023, 15,237,751 and 3,211,563 shares have been excluded from the calculation of diluted weighted average shares outstanding as the inclusion of these shares would have an anti -dilutive | 2. LOSS PER SHARE Basic net loss per share is determined by dividing net loss attributable to shareholders by the weighted -average -dilutive December 31, December 31, Numerator: Net loss $ (10,615,035 ) $ (15,202,507 ) Less: dividends on preferred stock 41,867 — Net loss attributable to common stockholders $ (10,656,902 ) $ (15,202,507 ) Denominator: Basic – weighted shares outstanding 15,329,617 12,550,096 Dilutive effect from shares authorized — — Diluted – weighted shares outstanding 15,329,617 12,550,096 Basic loss per share $ (0.69 ) $ (1.21 ) Diluted loss per share $ (0.69 ) $ (1.21 ) At December 31, 2023 and 2022, 14,748,862 and 2,721,562 shares have been excluded from the calculation of diluted weighted average shares outstanding as the inclusion of these shares would have an anti -dilutive |
Inventories
Inventories | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Inventories [Abstract] | ||
INVENTORIES | 3. INVENTORIES Inventory is primarily bottled wine which is carried at the lower cost (calculated using the average cost method) or net realizable value. During the quarter ended March 31, 2024, the Company recorded a $110,000 inventory write down to net realizable value, which was recorded in cost of revenue in the financial statements. The finished goods inventory was $172,332 and $337,873 as of March 31, 2024 and December 31, 2023, respectively. This inventory included a valuation reserve of $110,000 and $112,000 as of March 31, 2024 and December 31, 2023, respectively. | 3. INVENTORIES Inventories primarily include bottled wine which is carried at the lower cost (calculated using the average cost method) or net realizable value. During 2023, the Company recorded a $1.8 million inventory write down to net realizable value, which is recorded in cost of revenue in the financial statements. The write -down December 31, December 31, Inventory – finished goods $ 337,873 $ 3,683,159 Inventory – merchandise — 13,039 Total $ 337,873 $ 3,696,198 |
Prepaid Expenses
Prepaid Expenses | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Prepaid Expenses [Abstract] | ||
PREPAID EXPENSES | 4. PREPAID EXPENSES Prepaid expenses consist of the following at: March 31, December 31, 2023 Prepaid marketing expenses – current $ 3,871 $ 9,871 Other prepaid expenses 27,994 33,072 Total $ 31,865 $ 42,943 | 4. PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consist of the following at: December 31, December 31, Prepaid marketing expenses – current $ 9,871 $ 313,000 Prepaid marketing expenses – long-term — 678,167 Inventory deposits — 569,377 Other prepaid expenses 33,072 78,834 Total $ 42,943 $ 1,639,378 |
Investments
Investments | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Investments [Abstract] | ||
INVESTMENTS | 5. INVESTMENTS In December 2023, the Company made a $500,000 investment for 50,000 shares of Notes Live, Inc. as part of the letter of intent entered into with Notes Live, Inc. See Note 1 for Agreement and Plan of Merger. The investment was initially measured at cost. The Company noted no impairment or fair value change as of March 31, 2024. | 5. INVESTMENTS In December 2023, the Company made a $500,000 investment for 50,000 shares of Notes Live, Inc. as part of the letter of intent entered into with Notes Live, Inc. See Note 15 for Agreement and Plan of Merger with Notes Live, Inc. The investment was initially measured at cost. The Company noted no impairment or fair value change as of December 31, 2023. |
Accrued Expenses
Accrued Expenses | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Accrued Expenses [Abstract] | ||
ACCRUED EXPENSES | 6. ACCRUED EXPENSES Accrued expenses consist of the following at: March 31, December 31, Sponsorship agreements $ 691,194 $ 608,818 Accrued credit card charges 5,526 7,275 Series A Stock dividends 71,866 41,867 Legal and professional 48,081 125,704 Deferred offering costs 26,524 — Other accrued expenses 4,410 27,059 Total $ 847,601 $ 810,723 The sponsorship agreements relate to marketing contracts with unrelated parties within the sports and entertainment industry. The terms of the agreements range from two four Accrued credit card charges primarily consist of warehouse, shipping and other operating costs paid via Company credit card as a tool for managing cashflow. | 7. ACCRUED EXPENSES Accrued expenses consist of the following at: December 31, December 31, Sponsorship agreements $ 608,818 $ 234,494 Accrued credit card charges 7,275 21,013 Series A Stock dividends 41,867 — Legal and professional 125,704 89,200 Other accrued expenses 27,059 78,224 Total $ 810,723 $ 422,931 The sponsorship agreements relate to marketing contracts with unrelated parties within the sports and entertainment industry. The terms of the agreements range from two four Accrued credit card charges primarily consist of warehouse, shipping and other operating costs paid via Company credit card as a tool for managing cashflow. |
Note Payable
Note Payable | 3 Months Ended |
Mar. 31, 2024 | |
Note Payable [Abstract] | |
NOTE PAYABLE | 7. NOTE PAYABLE The Company entered into a short -term |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Stockholders’ Equity [Abstract] | ||
STOCKHOLDERS’ EQUITY | 8. STOCKHOLDERS’ EQUITY Rights offering During the first quarter of 2023, the Company distributed, at no charge to holders of the Company’s common stock, non -transferable five -subscription -subscription -manager Series A Convertible Preferred Stock On July 27, 2023, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Stock”), which was amended on August 1, 2023 prior to the issuance of any shares of Series A Stock by filing Amendment No. 1 thereto (as so amended, the “Certificate”). The Certificate designates 10,000 shares of the Company’s undesignated preferred stock as Series A Stock and establishes the rights and preferences of Series A Stock. On August 2, 2023, the Company entered into a Securities Purchase Agreement with two accredited investors (the “Purchasers”) pursuant to which the Company agreed to issue and sell in a private placement (the “Offering”) shares of Series A Stock. Pursuant to the Securities Purchase Agreement, the Purchasers collectively agreed to purchase up to 10,000 shares of Series A Stock at a per share purchase price equal to $100.00 (the “Stated Value”), for total gross proceeds of up to $1.0 million. The Purchasers agreed to purchase 4,000 shares of Series A Stock for an aggregate purchase price of $400,000 at an initial closing of the Offering (the “Initial Closing”), which occurred on August 2, 2023. The Securities Purchase Agreement provided that the Company will issue and sell to the Purchasers, and the Purchasers will purchase, an additional 4,000 shares of Series A Stock at a second closing (the “Second Closing”), which occurred on September 7, 2023. The Securities Purchase Agreement provided that the Company will issue and sell to the Purchasers, and the Purchasers will purchase, an additional 2,000 shares of Series A Stock at an optional closing (the “Optional Closing”), which occurred on December 1, 2023. Each share of Series A Stock is convertible, at any time and from time to time from and after the date of the Initial Closing at the option of the holder thereof, into the number of shares of common stock (“Conversion Shares”) calculated by dividing the Stated Value by a conversion price (the “Conversion Price”) of $0.10. However, if the Company’s common stock fails to continue to be listed or quoted for trading on a stock exchange, then the Conversion Price thereafter will mean the lesser of (i) $0.10, or (ii) the closing sale price of the common stock on the trading day immediately preceding the conversion date; provided that the Conversion Price shall not be less than $0.05 (the “Floor Price”). The Conversion Price is subject to standard adjustments based stock splits, stock dividends, stock combinations and the like, and the Floor Price is also subject to anti -dilution Upon any liquidation, dissolution or winding -up -if-converted The Company may redeem (i) up to 75% of the issued and outstanding shares of Series A Stock for a price per share equal to 150% of the Stated Value thereof if such redemption occurs within six months from the date of issuance, and (ii) up to 50% of the issued and outstanding shares of Series A Stock for a price per share equal to 200% of the Stated Value thereof if such redemption occurs after six months but before the expiration of twelve months from the date of issuance. Each holder of a share of Series A Stock is entitled to receive dividends payable, subject to certain conditions, in cash or shares of common stock (“Dividend Shares”) valued as either (i) the then applicable Conversion Price, or (ii) 50% of the then current market price of the Company’s common stock, at the dividend rate of 12% per annum. Dividends are cumulative and will be payable on July 31 st The shares of Series A Stock will vote with the common stock as a single class on all matters submitted to a vote of stockholders of the Company other than any proposal to approve the issuance of shares of common stock in excess of the Exchange Share Cap or the Individual Holder Share Cap. The Preferred Shares will vote on an as -converted There was no issuance activity of the Series A Stock for the three months ended March 31, 2024 and 2023. The Series A Stock meets the requirements for permanent equity classification as prescribed by the authoritative guidance. The following table summarizes accrued dividends that the Company is legally obligated to pay: March 31, December 31, Series A preferred stock $ 71,867 $ 41,867 Series B Convertible Preferred Stock On March 14, 2024, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Stock”). The Certificate designates 50,000 shares of the Company’s undesignated preferred stock as Series B Stock and establishes the rights and preferences of Series B Stock. As of March 31, 2024, the Company entered into two Securities Purchase Agreements with accredited investors (the “Purchasers”) pursuant to which the Company agreed to issue and sell in a private placement (the “Offering”) shares of Series B Stock. Pursuant to the Securities Purchase Agreement, each share of Series B Stock will have a stated value equal to $100.00 (the “Stated Value”). As of March 31, 2024, 940 shares of Series B Stock had been sold for a total in gross proceeds of $94,000. Each share of Series B Stock shall be convertible at the option of the holder thereof into the number of shares common stock (“Conversion Shares”) calculated by dividing the Stated Value by the Conversion Price (the “Conversion Ratio”)(subject to the limitations described below). For such purposes, the “Conversion Price” means $0.45. However, if the Company’s common stock fails to continue to be listed or quoted for trading on a stock exchange (currently, the NYSE American), then the “Conversion Price” thereafter will mean the lesser of (i) $0.45, or (ii) the closing sale price of the common stock on the trading day immediately preceding the conversion date; provided that the Conversion Price shall not be less than $0.05 (the “Floor Price”). The Conversion Price is subject to standard adjustments based stock splits, stock dividends, stock combinations and the like, and the Floor Price is also subject to anti -dilution Except for stock dividends or distributions for which adjustments are to be made pursuant to antidilution provisions of the Certificate, holders of Series B Stock shall be entitled to receive dividends on shares of Series B Stock equal (on an as -if-converted-to-Common-Stock The Company may redeem (i) up to 75% of the issued and outstanding Series B Preferred Shares for a price per share equal to 150% of the Stated Value thereof if such redemption occurs within six months from the date of issuance, and (ii) up to 50% of the issued and outstanding Series B Preferred Shares for a price per share equal to 200% of the Stated Value thereof if such redemption occurs after six months but before the expiration of twelve months from the date of issuance. The Series B Stock will vote with the common stock and the Series A Convertible Preferred Stock as a single class on all matters submitted to a vote of stockholders of the Company other than any proposal to approve the issuance of shares of common stock upon the conversion of Series B Stock in excess of the Exchange Share Cap or the Individual Holder Share Cap. The shares of Series B Stock will vote on an as -converted The Company previously engaged The Oak Ridge Financial Services Group, Inc. to serve as a financial advisor to the Company in connection with capital raising activities. In connection with the Offering, the Company has agreed to pay the Oak Ridge a cash fee equal to 8.0% of the gross proceeds received by the Company in the Offering, in addition to reimbursing Oak Ridge for its out -of-pocket -year The issuance activity of the Series B Stock is summarized below: Three Months Three Months Ended Series B preferred stock shares issued 940 — Net proceeds $ 94,000 $ — The Series B Stock meets the requirements for permanent equity classification as prescribed by the authoritative guidance. Third Party Vendor Engagements and Related Founder Share Forfeitures In December 2022, Rick Nechio and Damian Novak, two of the Company’s founders, together agreed to forfeit and transfer back to the Company without consideration a total of 970,000 shares of common stock of the Company held by them, to enable the Company to preserve cash by issuing such number of shares to certain of the Company’s service providing vendors without subjecting the Company’s other stockholders to dilution therefrom. Also in December 2022, the Company entered into agreements to issue 970,000 shares to such vendors in transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). Recipients of the shares included our third -party -related -based -related | 8. STOCKHOLDERS’ EQUITY Rights offering During the first quarter of 2023, the Company distributed, at no charge to holders of the Company’s common stock, non -transferable five -subscription -subscription -manager Series A Convertible Preferred Stock On July 27, 2023, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A Stock”), which was amended on August 1, 2023 prior to the issuance of any shares of Series A Stock by filing Amendment No. 1 thereto (as so amended, the “Certificate”). The Certificate designates 10,000 shares of the Company’s undesignated preferred stock as Series A Stock and establishes the rights and preferences of Series A Stock. On August 2, 2023, the Company entered into a Securities Purchase Agreement with two accredited investors (the “Purchasers”) pursuant to which the Company agreed to issue and sell in a private placement (the “Offering”) shares of Series A Stock. Pursuant to the Securities Purchase Agreement, the Purchasers collectively agreed to purchase up to 10,000 shares of Series A Stock at a per share purchase price equal to $100.00 (the “Stated Value”), for total gross proceeds of up to $1.0 million. The Purchasers agreed to purchase 4,000 shares of Series A Stock for an aggregate purchase price of $400,000 at an initial closing of the Offering (the “Initial Closing”), which occurred on August 2, 2023. The Securities Purchase Agreement provided that the Company will issue and sell to the Purchasers, and the Purchasers will purchase, an additional 4,000 shares of Series A Stock at a second closing (the “Second Closing”), which occurred on September 7, 2023. The Securities Purchase Agreement provided that the Company will issue and sell to the Purchasers, and the Purchasers will purchase, an additional 2,000 shares of Series A Stock at an optional closing (the “Optional Closing”), which occurred on December 1, 2023. Each share of Series A Stock is convertible, at any time and from time to time from and after the date of the Initial Closing at the option of the holder thereof, into the number of shares of common stock (“Conversion Shares”) calculated by dividing the Stated Value by a conversion price (the “Conversion Price”) of $0.10. However, if the Company’s common stock fails to continue to be listed or quoted for trading on a stock exchange, then the Conversion Price thereafter will mean the lesser of (i) $0.10, or (ii) the closing sale price of the common stock on the trading day immediately preceding the conversion date; provided that the Conversion Price shall not be less than $0.05 (the “Floor Price”). The Conversion Price is subject to standard adjustments based stock splits, stock dividends, stock combinations and the like, and the Floor Price is also subject to anti -dilution The Series A Stock contains “blocker” provisions restricting the holders’ ability to exercise conversion rights if the issuance of Conversion Shares would result in such holder beneficially owning in excess of 4.99% of the Company’s common stock. In addition, a Series A Stock holder’s ability to convert Series A Stock to common stock will be subject to an “Exchange Share Cap” and an “Individual Holder Share Cap.” Under the Exchange Cap, the total number of shares of common stock issuable upon conversion of outstanding Preferred Shares, when added to any previously issued Dividend Shares (as defined below), may not exceed 19.9% of the Company’s issued and outstanding common stock immediately prior to the date on which shares of Series A Stock are first issued. Under the Individual Holder Share Cap, no holder of Series A Stock will have the right to acquire common stock upon conversion of the Series A Stock if the issuance of shares of common stock would result in converting holder beneficially owning in excess of 19.9% of the number of shares of common stock outstanding immediately after giving effect to the issuance. The Exchange Share Cap and the Individual Holder Share Cap will not apply if the Company obtains stockholder approval to issue the shares of common stock exceeding the applicable cap as required by the NYSE American LLC Company Guide. Upon any liquidation, dissolution or winding -up -if-converted The Company may redeem (i) up to 75% of the issued and outstanding shares of Series A Stock for a price per share equal to 150% of the Stated Value thereof if such redemption occurs within six months from the date of issuance, and (ii) up to 50% of the issued and outstanding shares of Series A Stock for a price per share equal to 200% of the Stated Value thereof if such redemption occurs after six months but before the expiration of twelve months from the date of issuance. Each holder of a share of Series A Stock is entitled to receive dividends payable, subject to certain conditions, in cash or shares of common stock (“Dividend Shares”) valued as either (i) the then applicable Conversion Price, or (ii) 50% of the then current market price of the Company’s common stock, at the dividend rate of 12% per annum. Dividends are cumulative and will be payable on July 31 st The shares of Series A Stock will vote with the common stock as a single class on all matters submitted to a vote of stockholders of the Company other than any proposal to approve the issuance of shares of common stock in excess of the Exchange Share Cap or the Individual Holder Share Cap. The Preferred Shares will vote on an as -converted The issuance activity of the Series A Stock is summarized below: For the Series A Stock shares issued 10,000 Net proceeds $ 950,000 The Series A Stock meets the requirements for permanent equity classification as prescribed by the authoritative guidance. The following table summarizes accrued dividends that the Company is legally obligated to pay: For the Series A Stock $ 41,867 Third Party Vendor Engagements and Related Founder Share Forfeitures In December 2022, Rick Nechio and Damian Novak, two of the Company’s founders, together agreed to forfeit and transfer back to the Company without consideration a total of 970,000 shares of common stock of the Company held by them, to enable the Company to preserve cash by issuing such number of shares to certain of the Company’s service providing vendors without subjecting the Company’s other stockholders to dilution therefrom. Also in December 2022, the Company entered into agreements to issue 970,000 shares to such vendors in transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). Recipients of the shares included our third -party -related -based -based -related |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Equity-Based Compensation [Abstract] | ||
EQUITY-BASED COMPENSATION | 9. EQUITY-BASED COMPENSATION This expense was for various marketing and advertising services in exchange for common stock and was being expensed over the lifetime of license agreements with celebrity endorsers. The license agreements were terminated during the period ending September 30, 2023. Restricted Stock Units On April 24, 2023, the Company granted 319,023 restricted stock units to its Chief Executive Officer. On May 11, 2023, the Company granted 170,958 restricted stock units to its Executive Vice President Sales and Marketing. On May 25, 2023, the Company granted 124,902 restricted stock units to its Chief Financial Officer. These restricted stock units had a vesting period that coincided with the Company filing its Form 10 -K Restricted stock units had no balances for the periods ended March 31, 2024 and December 31, 2023. Shares of Restricted Stock In April 2023, the members of the Company’s Board of Directors, collectively, were granted a total of 100,000 shares of restricted stock. The vesting period is as follows: 25,000 shares vested immediately with 25,000 shares vesting each quarter following the award date. Total equity -based Restricted stock activity as of and for the three months ended March 31, 2024 was as follows: Number of Weighted Outstanding at December 31, 2023 20,000 0.00 Granted — — Vested or released (20,000 ) — Forfeited — — Outstanding at March 31, 2024 — — Vendor Stock Awards Vendor stock award activity subject to revenue -related Number of Weighted Outstanding at December 31, 2023 1,030,000 1.25 Granted — — Vested or released — — Forfeited — — Outstanding at March 31, 2024 1,030,000 1.00 Stock Options Equity -based -based Stock option activity for three month period ended March 31, 2024 was as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Outstanding at December 31, 2023 446,559 $ 8.88 8.08 Granted — — — Exercised — — — Forfeited — — — Outstanding at March 31, 2024 446,559 $ 8.88 7.83 Exercisable at March 31, 2024 71,559 $ 3.03 8.42 Warrants As disclosed in Note 7, 3,143,969 7, 300,000 Warrant activity for three -month Number of Weighted Weighted Outstanding at December 31, 2023 3,553,969 $ 1.61 4.16 Granted 300,000 0.50 7.00 Vested or released — — — Forfeited — — — Outstanding at March 31, 2024 3,553,969 $ 1.51 4.17 The Company uses the Black -Scholes -pricing -based -Scholes -free | 9. EQUITY-BASED COMPENSATION As of December 31, 2023 and 2022, there was $0 and $991,167, respectively, of unrecognized equity -based Restricted Stock Units On February 24, 2022, the Company entered into a separation agreement with the former Chief Operating Officer (COO). Among other things, the Company agreed to provide the former COO with cash and expense reimbursements totaling $175,000 and an amendment of the COO’s Restricted Stock Agreement to accelerate the vesting of the 251,851 restricted stock units. Due to the modification of the terms of this award, the fair value was remeasured as of the modification date. Total equity -based During the second quarter of 2022, the Company granted 47,800 restricted stock units to employees of the Company, all of which vested and were delivered in the second quarter of 2022. Total equity -based On March 2, 2022, the Company granted 70,000 restricted stock units to members of the Company’s Board of Directors that fully vested on June 18, 2022. Total equity -based On April 24, 2023, the Company granted 319,023 restricted stock units to its Chief Executive Officer. On May 11, 2023, the Company granted 170,958 restricted stock units to its Executive Vice President Sales and Marketing. On May 25, 2023, the Company granted 124,902 restricted stock units to its Chief Financial Officer. These restricted stock units had a vesting period that coincided with the Company filing its Form 10 -K Restricted stock unit activity as of and for the years ended December 31, 2023 and 2022 was as follows Number of Weighted Outstanding at December 31, 2021 377,777 0.45 Granted 117,800 0.33 Forfeited (495,577 ) — Outstanding at December 31, 2022 — — Granted 614,883 0.86 Forfeited (614,883 ) — Outstanding at December 31, 2023 — — Shares of Restricted Stock During the year ended December 31, 2022, the Company granted 10,000 shares of restricted stock to an employee upon commencement of employment in May 2022, of which 3,334 shares vested immediately with the remaining 6,666 shares scheduled to vest in two equal installments in May 2023 and May 2024. Restricted stock consists of shares of common stock that are subject to transfer and forfeiture restrictions that lapse upon vesting. Total equity -based During the year ended December 31, 2022, the Company hired a new Chief Financial Officer. Pursuant to the employment agreement, the Company granted 100,000 shares of restricted stock. The restricted stock vests in three equal installments with the first third vesting immediately on the grant date of March 30, 2022, and the remaining tranches were scheduled to vest on the one year and two year anniversaries of the grant date subject to continued employment with the Company through the applicable vesting date. Effective June 24, 2022, this employee resigned from the Company and 66,666 unvested shares of restricted stock were forfeited. Total equity -based In January 2023, there was a new grant of 500,000 shares of restricted stock which related to a consulting arrangement entered into in connection with the settlement reached with a previous employee, as further disclosed in Note 12. Total equity -based On April 24, 2023, the Company granted 463,917 shares of restricted stock to its Chief Executive Officer. On May 11, 2023, the Company granted 380,952 shares of restricted stock to its Executive Vice President Sales and Marketing. On May 25, 2023, the Company granted shares of 196,463 restricted stock to its Chief Financial Officer. All shares of restricted stock granted on April 24, 2023, May 11, 2023 and May 25, 2023 were forfeited and canceled during the third quarter of 2023. In April 2023, the Company Board of Directors were granted a total of 100,000 shares of restricted stock. Total equity -based Restricted stock activity for the years ended December 31, 2023 and 2022 was as follows: Number of Weighted Outstanding at December 31, 2021 — — Granted 110,000 9.27 Vested or released (36,668 ) — Forfeited (66,667 ) — Outstanding at December 31, 2022 6,666 0.90 Granted 1,641,332 0.57 Vested or released (570,000 ) — Forfeited (1,057,998 ) — Outstanding at December 31, 2023 20,000 0.00 Vendor Stock Awards Vendor stock award activity subject to revenue -related Number of Weighted Outstanding at December 31, 2021 — — Granted 1,030,000 2.25 Vested or released — — Forfeited — — Outstanding at December 31, 2022 1,030,000 2.25 Granted — — Vested or released — — Forfeited — — Outstanding at December 31, 2023 1,030,000 1.25 Stock Options On March 11, 2022, the Company granted the option to purchase 427,001 shares of common stock at $3.47 per share to its Chief Executive Officer, pursuant to the Chief Executive Officer’s employment agreement with the Company. The shares vest in three equal installments on the nine month, one year, and two year anniversaries of the grant date and are exercisable for 10 years from the grant date. On June 8, 2022, the Chief Executive Officer’s employment with the Company ended resulting in the forfeiture of the entire award, which remained unvested at the time. On March 30, 2022, in addition to the restricted stock granted to the Company’s new Chief Financial Officer, the Company granted the Chief Financial Officer an option to purchase 200,000 shares of common stock at $3.30 per share, pursuant to the employment agreement. The shares vest in three equal installments. The first third vested immediately on the grant date of March 30, 2022, and the remaining tranches were scheduled to vest on the one year and two year anniversaries of the grant date subject to continued employment with the Company through the applicable vesting date. The options are exercisable for 10 years from the grant date or, if earlier, ninety (90) days following termination of employment. Effective June 24, 2022, this employee resigned from the Company and the unvested options were subsequently forfeited. Effective September 1, 2022, the Company entered into an Employment Transition and Consulting Agreement with the previous interim Chief Financial Officer. Pursuant to the Transition and Consulting Agreement, the Company granted a stock option to purchase 69,892 shares of the Company’s common stock at a per share exercise price equal to $3.04 (the fair market value of the Company’s common stock on the date of grant). The stock option vested with respect to 3,584 shares on the last calendar day of September, October and November of 2022, and the balance of the stock option vested in monthly installments as nearly equal as possible (approximately 6,571 shares each) on the last calendar day of each month from December 2022 through August 2023. The total expense recognized for the years ended December 31, 2023 and 2022 was $125,783 and $41,449, respectively. In November 2021, the Company executed founder option agreements with four Class F members. The terms of the agreements grant each founder the right and option to purchase common stock up to 25% of the total shares in the Founders’ Option Pool upon the consummation of the Company’s IPO. The Founder’s Option Pool is a pool of shares reserved for founding members of the Company and will be comprised of 15% of the total shares of common stock outstanding immediately prior to the initial closing of the IPO. The options will vest in 20% installments. Each installment will vest upon the closing price of common stock reaching certain milestones ranging from 200% to 600% of the IPO price. If the vesting condition is not achieved within three years of the grant date, the options will forfeit. As of December 31, 2023 and 2022, the options have not reached any of the vesting milestones required and as such, the probability of reaching each milestone has been factored into the value to be recognized over the three -year Equity -based -based Stock option activity for the years ended December 31, 2023 and 2022 was as follows: Number of Weighted Weighted Outstanding at December 31, 2021 1,830,000 $ 9.86 8.18 Granted 701,893 3.37 10.00 Exercised — — — Forfeited (957,001 ) — — Outstanding at December 31, 2022 1,574,892 $ 9.67 8.94 Granted 1,500,000 0.50 5.00 Exercised — — — Forfeited (2,628,333 ) — — Outstanding at December 31, 2023 446,559 $ 8.88 8.08 Exercisable at December 31, 2023 71,559 $ 3.03 8.67 Warrants On December 17, 2021, in connection with the Company’s IPO, the Company granted to the underwriter warrants to purchase up to 110,000 shares of common stock at $12 per share. These warrants vest one year from the date of issuance and are exercisable for four As disclosed in Note 8, 3,143,969 warrants were granted as part of the Rights Offering in March 2023. As of and for the years ended December 31, 2023 and 2022, the warrants to purchase common shares of the Company outstanding were as follows: Number of Weighted Weighted Outstanding at December 31, 2021 110,000 $ 12.00 4.96 Granted — — — Vested or released — — — Forfeited — — — Outstanding at December 31, 2022 110,000 $ 12.00 3.71 Granted 3,143,969 1.25 5.00 Vested or released — — — Forfeited — — — Outstanding at December 31, 2023 3,253,969 $ 1.61 4.16 The Company uses the Black -Scholes -pricing -based -Scholes -free |
Income Taxes
Income Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Income Taxes [Abstract] | ||
INCOME TAXES | 10. INCOME TAXES The Company has federal and state net operating loss carryforwards with a full valuation allowance against the deferred tax assets as of March 31, 2024. No | 10. INCOME TAXES Components of the provision for income taxes for the years ended December 31, 2023 and 2022 were as follows: 2023 2022 Current $ — $ — Deferred — — Total $ — $ — No income tax benefit was recorded for the years ended December 31, 2023 and 2022 due to net losses and recognition of a valuation allowance. The following table represents a reconciliation of the tax expense computed at the statutory federal rate and the Company’s tax expense for the years ending December 31, 2023 and 2022: 2023 2022 Tax expense (benefit) at statutory rate $ (2,229,000 ) 21.0 % $ (3,193,000 ) 21.0 % State income tax expense (benefit), net of federal tax effect (377,000 ) 3.6 % (162,000 ) 1.1 % Change in valuation allowance on deferred tax assets 2,360,000 -22.2 % 3,355,000 -22.1 % Stock award forfeiture 440,000 -4.3 % — -0.0 % Change in deferred tax rate (102,000 ) 1.0 % — 0.0 % Return to provision adjustments (92,000 ) 0.9 % — 0.0 % Income tax expense (benefit) $ — 0.0 % $ — 0.0 % Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred tax assets relate primarily to its net operating loss carry forwards and other balance sheet basis differences. In accordance with ASC 740, “Income Taxes,” the Company recorded a valuation allowance to fully offset the net deferred tax asset, because it is more likely than not that the Company will not realize future benefits associated with these deferred tax assets at December 31, 2023 and 2022. The tax effects of temporary differences and carry forwards that give rise to significant portions of the deferred tax assets are as follows: December 31, December 31, Deferred tax assets: Deferred revenue $ 1,000 $ 3,000 Amortization 1,000 1,000 Stock based compensation 120,000 868,000 Net operating losses 5,686,000 3,002,000 Inventory reserve 27,000 — Accrued expenses 407,000 — Prepaid expenses (8,000 ) — Valuation allowance (6,234,000 ) (3,874,000 ) Net deferred tax assets: $ — $ — At December 31, 2023, the Company had federal and state net operating loss carry forwards of approximately $23.9 million and $9.1 million, respectively. At December 31, 2022, the Company had federal and state net operating loss carryforwards of approximately $13.3 million and $2.2 million, respectively. The net operating loss carry forwards have no expiration. The Company recognizes uncertain tax positions in accordance with ASC 740 on the basis of evaluating whether it is more likely than not that the tax positions will be sustained upon examination by tax authorities. For those tax positions that meet the more -likely-than no The Company is subject to U.S. federal or state income tax examinations. The Company’s federal, state and local income tax returns are subject to examination by taxing authorities for the three years after the returns are filed, and the Company’s federal, state, and local income tax returns for 2022 and 2021 remain open to examination. Prior to the Company’s December 2021 conversion to a corporation, the Company was a limited liability company and therefore was a disregarded legal entity for income tax purposes. The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of general and administrative expense. |
Supplier and Customer Concentra
Supplier and Customer Concentration | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Supplier and Customer Concentration [Abstract] | ||
SUPPLIER AND CUSTOMER CONCENTRATION | 11. SUPPLIER AND CUSTOMER CONCENTRATION The Company has an agreement with an unrelated party for various wine making activities, including production, bottling, labelling, and packaging. The Company pays certain storage, administrative fees and taxes related to the purchased goods. There is no specified term of the agreement but continues as additional blanket sales orders are issued. For the three month periods ended March 31, 2024 and 2023, substantially all of the Company’s inventory purchases were from this supplier. The Company also engages with other suppliers for the purchase of a select varietal of wine to be offered in limited quantities. There are no formal agreements due to the infrequency of activity with these suppliers. A significant portion of the Company’s wholesale revenue in 2024 comes from three national distributor customers that operate in several markets. For the three month period ended March 31, 2024, approximately 81% of the Company’s wholesale revenue came from these customers as well as one additional customer. At March 31, 2024, these customers accounted for 60% of accounts receivable. For the first quarter of 2023, the Company’s wholesale revenue came from only two national distributors that attributed to 73% of the Company’s wholesale revenue for the three months ended March 31, 2023. These customers accounted for 73% of the Company’s accounts receivable as of March 31, 2023. | 11. SUPPLIER AND CUSTOMER CONCENTRATION The Company has an agreement with an unrelated party for various wine making activities, including production, bottling, labelling, and packaging. The Company pays certain storage, administrative fees and taxes related to the purchased goods. There is no specified term of the agreement but continues as additional blanket sales orders are issued. For the years ended December 31, 2023 and 2022, 100% and 96%, respectively, of the Company’s inventory purchases were from this supplier. The Company also engages with other suppliers for the purchase of a select varietal of wine to be offered in limited quantities. There are no formal agreements due to the infrequency of activity with these suppliers. A significant portion of the Company’s wholesale revenue comes from three national distributor customers that operate in several markets. For the years ended December 31, 2023 and 2022, 74% and 58% of the Company’s wholesale revenue came from these customers, respectively. At December 31, 2023 and 2022, these customers accounted for 73% and 90%, respectively, of accounts receivable. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Commitments and Contingencies [Abstract] | ||
COMMITMENTS AND CONTINGENCIES | 12. COMMITMENTS AND CONTINGENCIES License agreements During March 2021, the Company entered into two license agreements with certain equity investors for marketing and advertising services. These two agreements were terminated during the third quarter of 2023 and the remaining prepaid license fee was expensed. The net expense relating to the agreements was $0 and $120,000 for the three -month Sponsorship Agreements The estimated expense for the sponsorship agreements as described in Note 6 for the periods ending December 31 subsequent to March 31, 2024 is as follows: Sponsorship Agreements 2024 $ 137,357 | 12. COMMITMENTS AND CONTINGENCIES License agreements During March 2021, the Company entered into two license agreements with certain equity investors for marketing and advertising services. These two agreements were terminated during the third quarter of 2023 and the remaining prepaid license fee was expensed. The net expense relating to the agreements was $1,000,500 and $380,000 for the years ended December 31, 2023 and 2022, respectively. Sponsorship Agreements The estimated expense for the sponsorship agreements as described in Note 7 for the periods subsequent to December 31, 2023 is as follows: Sponsorship 2024 $ 162,553 |
Legal Proceedings
Legal Proceedings | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Legal Proceedings [Abstract] | ||
LEGAL PROCEEDINGS | 13. LEGAL PROCEEDINGS Timothy Michaels On February 24, 2022, Timothy Michaels, the former Chief Operating Officer of the Company, signed a Separation Agreement and Release (the “Separation Agreement”) in connection with the termination of his employment with the Company, which occurred on February 7, 2022. On May 27, 2022, Mr. Michaels filed a complaint against the Company in the Fourth Judicial District Court, Hennepin County, Minnesota, alleging that the Company breached the February 24, 2022 Separation Agreement by including a restricted “lock -up -401 -up The Company made a motion seeking dismissal of the conversion and civil theft counts, which was granted by the Fourth Judicial District Court, Hennepin County, Minnesota on October 31, 2022. On August 9, 2023, the Company moved for summary judgment on Mr. Michaels’ remaining claims. A jury trial commenced on January 23, 2024. During trial, on January 24, 2024, the Company filed a motion for judgement in favor of the Company as a matter of law, which was denied by the Court. On January 25, 2024, the jury in the lawsuit rendered a verdict against the Company awarding damages to Mr. Michaels in the amount of $585,976.25, which is included in settlement payable in the accompanying balance sheet. On February 22, 2024, the Company filed a renewed motion for post -verdict -verdict -verdict Website-related Plaintiff’s Lawsuit On January 26, 2024, the Company was served with a complaint filed in the United States District Court for the Southern District of New York alleging that the Company has failed to design, construct, maintain and operate its Internet website to be fully accessible to and independently usable by blind or visually -impaired -impaired | 14. LEGAL PROCEEDINGS Timothy Michaels On February 24, 2022, Timothy Michaels, the former Chief Operating Officer of the Company, signed a Separation Agreement and Release (the “Separation Agreement”) in connection with the termination of his employment with the Company, which occurred on February 7, 2022. On May 27, 2022, Mr. Michaels filed a complaint against the Company in the Fourth Judicial District Court, Hennepin County, Minnesota, alleging that the Company breached the February 24, 2022 Separation Agreement by including a restricted “lock -up -401 -up The Company has denied the allegations and intends to vigorously defend against the lawsuit. The Company made a motion seeking dismissal of the conversion and civil theft counts, which was granted by the Fourth Judicial District Court, Hennepin County, Minnesota on October 31, 2022. On August 9, 2023, the Company moved for summary judgment on Mr. Michaels’ remaining claims. A jury trial commenced on January 23, 2024. During trial, on January 24, 2024, the Company filed a motion for judgement in favor of the Company as a matter of law, which was denied by the Court. On January 25, 2024, the jury in the lawsuit rendered a verdict against the Company awarding damages to Mr. Michaels in the amount of $585,976.25, which is included in settlement payable in the accompanying balance sheet. On February 22, 2024, the Company filed a renewed motion for post -verdict -verdict Website-related Plaintiff’s Lawsuit On January 26, 2024, the Company was served with a complaint filed in the United States District Court for the Southern District of New York alleging that the Company has failed to design, construct, maintain and operate its Internet website to be fully accessible to and independently usable by blind or visually -impaired -impaired Janelle Anderson Litigation Settlement and Related Founder Share Forfeitures The Company was a party to an action pending in Hennepin County District Court, captioned Janelle Anderson v. Fresh Vine Wine, Inc., Damian Novak, and Rick Nechio, Court File No. 27 -CV-22-11491 On January 27, 2023, the Company entered into a Global Mutual Compromise, Release and Settlement Agreement (the “Settlement Agreement”) among Ms. Anderson and each of Messrs. Novak and Nechio. Pursuant to the Settlement Agreement, Ms. Anderson agreed to dismiss the Lawsuit with prejudice and to file with the court any and all documents necessary to effect such dismissal with prejudice within five business days after all settlement consideration has been actually received by her, and the parties agreed to general mutual releases. The Company also agreed to indemnify Ms. Anderson and hold her harmless against any liability, civil damages, penalties, or fines claimed against her for any of her actions done within the course and scope of her employment with the Company as required by Minn. Stat. §181.970, and under any applicable insurance policies, including but not limited to any directors and officers policies. The Settlement Agreement also contains a non -disparagement As consideration for Ms. Anderson’s dismissal and release, and provided that she does not revoke or rescind the Settlement Agreement within prescribed time periods, the Company agreed to make a cash payment to Ms. Anderson in the amount of $1,250,000, less certain attorney fees and relevant taxes and other withholdings, in a lump sum. The Company recouped approximately $805,000 of this cash payment from insurance coverage. The cash payment is in addition to the $400,000 that the Company previously paid to Ms. Anderson in January 2023 in respect of 2022 bonus compensation earned by Ms. Anderson under her employment agreement while employed by the Company. Also as contemplated by the Settlement Agreement, the Company and Ms. Anderson agreed to enter into a consulting agreement (the “Anderson Consulting Agreement”) pursuant to which Ms. Anderson would provide certain consulting services to the Company for a period of six months. As consideration for such services, the Company agreed to grant and issue to Ms. Anderson 500,000 shares of the Company’s common stock (the “Anderson Consulting Shares”) from the Company’s 2021 Equity Incentive Plan (the “Anderson Consulting Share Grant”). The cash payment and the Anderson Consulting Share Grant were scheduled to be made at the “closing” of the Settlement Agreement (the “Settlement Closing”), subject to Ms. Anderson not revoking or rescinding the Settlement Agreement during the applicable revocation period. The Settlement Closing was completed on February 20, 2023, with prejudice. No additional expense has been recorded during 2023 regarding this matter. Also pursuant to the Settlement Agreement, Damian Novak, former Executive Chairman and director, resigned as Executive Chairman and removed himself from his management duties with the Company effective February 20, 2023, and has resigned from our board of directors promptly following completion of the subscription rights offering on March 14, 2023. In addition, Rick Nechio, the Company’s former interim Chief Executive Officer and director, resigned from our board of directors effective February 20, 2023. In conjunction with entering into the Settlement Agreement, Rick Nechio and Damian Novak entered into Agreements to Forfeit Shares of Common Stock (the “Forfeiture Agreements”) pursuant to which each agreed to forfeit and transfer back to the Company without consideration 250,000 shares of common stock of the Company held by them (a total of 500,000 shares), to enable the Company to issue the Anderson Consulting Shares to Ms. Anderson without subjecting the Company’s other stockholders to dilution therefrom (the “Anderson Consulting -related -related |
Subsequent Events
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS As of May 14, 2024, the Company has received subscriptions from accredited investors for the purchase of a total of 6,785 additional shares of Series B Stock and has received gross proceeds of $678,500. | 15. SUBSEQUENT EVENTS Agreement and Plan of Merger with Notes Live, Inc. On January 25, 2024, the Company, FVW Merger Sub, Inc., a Colorado corporation and a wholly -owned -owned Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger, (i) each then outstanding share of Notes Live common stock (collectively, “Notes Live common stock”) (which comprises all of Notes Live’s outstanding capital stock) will be converted into the right to receive a number of shares of Fresh Vine common stock calculated in accordance with the Merger Agreement (the “Exchange Ratio”), (ii) each then outstanding warrant to purchase Notes Live common stock will be exchanged (or otherwise amended) for a warrant exercisable (at an exercise price adjusted to reflect to the Exchange Ratio) to acquire that number of shares of Fresh Vine common stock equal to the number of warrant shares multiplied by the Exchange Ratio, and (iii) any then outstanding Notes Live promissory note that is convertible into Notes Live common stock will be exchanged, or otherwise amended, such that it will be convertible from and after the Merger into shares of Fresh Vine common stock at a per share conversion price adjusted to reflect the Exchange Ratio. Each share of Fresh Vine common stock and each option and warrant to purchase Fresh Vine common stock that is outstanding at the effective time of the Merger will remain outstanding in accordance with its terms and such shares of Fresh Vine common stock, options and warrants will be unaffected by the merger (subject adjustment based on the proposed Reverse Split described below). As contemplated by the Merger Agreement, Fresh Vine intends to effect a reverse stock split at or around the effect date of the merger at a ratio that results in the Fresh Vine common stock satisfying the initial listing standards of the NYSE American stock exchange and the exchange ratio in the Merger being as near to one as reasonably practicable (i.e., so that each share of Notes Live capital stock will be exchanged in the Merger for approximately one share of Fresh Vine common stock) (the “Reverse Split”). At the effective time of the Merger, the board of directors of Fresh Vine is expected to consist of seven members, all of whom will be designated by Notes Live. Consummation of the Merger is subject to certain closing conditions, as described in the Merger Agreement. The Merger Agreement contains certain termination rights of each of Fresh Vine and Notes Live. Upon termination of the Merger Agreement under specified circumstances, Fresh Vine may be required to pay Notes Live a termination fee of $1.0 million and/or reimburse Notes Live’s expenses up to a maximum of $500,000, and Notes Live may be required to pay Fresh Vine a termination fee of $1.0 million, reimburse Fresh Vine’s expenses up to a maximum of $500,000, and/or, at the election of Fresh Vine, redeem the Fresh Vine Equity Investment at the same price per share as the purchase price paid by Fresh Vine therefor. Concurrently with the execution of the Merger Agreement, (a) officers, directors and certain 10% or greater shareholders of Notes Live (solely in their respective capacities as Notes Live shareholders) holding approximately 38% of the outstanding shares of Notes Live capital stock entitled to vote have entered into voting and support agreements with Fresh Vine to vote, among other things, all of their shares of Notes Live capital stock in favor of adoption of the Merger Agreement and the transactions contemplated thereby, and against any alternative acquisition proposals (the “Notes Live Support Agreements”), and (b) certain officers, directors and stockholders of Fresh Vine have entered into voting and support agreements with Notes Live to vote, among other things, all of their shares of Fresh Vine capital stock in favor of the Fresh Vine Shareholder Matters and against any alternative acquisition proposals (the “Fresh Support Agreements”, and together with the Notes Live Support Agreements, the “Support Agreements”). |
Accrued Compensation
Accrued Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Compensation [Abstract] | |
ACCRUED COMPENSATION | 6. ACCRUED COMPENSATION During the year ended December 31, 2022, the Company made certain leadership changes to better align with the Company’s operating goals, including advertising and marketing plans, as well as cash preservation initiatives. As of December 31, 2022, accrued compensation primarily related to unpaid bonus amounts to the Chief Executive Officer totaling $420,413. This bonus was paid in 2023. The balance of accrued compensation is $0 as of December 31, 2023. |
Transactions with Related Parti
Transactions with Related Parties | 12 Months Ended |
Dec. 31, 2023 | |
Transactions with Related Parties [Abstract] | |
TRANSACTIONS WITH RELATED PARTIES | 13. TRANSACTIONS WITH RELATED PARTIES The Company had an arrangement with Rabbit Hole Equity, LLC (RHE), a related party due to common ownership, under which RHE provided development, administrative and financial services to the Company. RHE is solely owned by the majority member of Nechio and Novak, LLC, which is the majority shareholder of the Company. Under the agreement, the Company will pay or reimburse RHE, as applicable, for any expenses it, or third parties acting on its behalf, incurs for the Company. For any selling, general and administrative activities performed by RHE or RHE employees, RHE, as applicable, charged back the employee salaries and wages, rent and related utilities. Beginning in December 2021, the Company entered into a payroll arrangement with a third party and now incurs employee salary and wage expenses directly. The shared expenses are as follows for the years ended December 31, 2023 and 2022: 2023 2022 Rent $ — $ 94,436 Utilities — 5,470 $ — $ 99,906 In October 2021, the Company issued a promissory note to a Class F member in exchange for $216,000. The term of the note was the later of 2 months from the date of the note or upon successful consummation of the IPO. The annual interest rate on the note was the maximum legal amount allowed under the applicable usury laws minus 1%, which was 7% at December 31, 2021. The Company may repay all or any portion of the principal balance at any time without penalty. The total amount of interest accrued on this note as of December 31, 2021 was $9,125. In January 2022, the Company repaid the $216,000 promissory note in full plus accrued interest of $9,125. In October 2021, the Company entered into a service agreement with Appellation Brands, LLC, a related party due to common ownership in the wine industry, to provide representation and distribution services. As of June 13, 2022, the original agreement was terminated. Prior to termination, the Company received a management fee of $50,000 per month plus a tiered fee ranging between $5.00 and $6.50 per case of the products sold. For the year ended December 31, 2022, the Company had recognized $297,224 in service revenue related to this agreement. In the year ended December 31, 2022, the Company purchased inventory from Appellation Brands, LLC in the amount of $195,116. In January 2022, the Company entered into a consulting agreement with FELCS, LLC, an entity owned by Damian Novak to provide consulting and advisory services to the Company in exchange for $25,000 per month. The agreement expires in December 2022, subject to automatic one -year In April 2022, the Company amended its agreement with Whetstone Consulting to include additional bonus commissions ranging from $5,000 to $100,000 subject to specific distribution milestones in addition to the existing $5,000 per month base compensation. The agreement has an initial term of one year and automatically renews for successive one -year |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | ||
Nature of Business | Nature of Business Fresh Vine Wine, Inc. (“the Company”, “our”, “we”), a Nevada corporation, is a premium wine brand built to complement consumers’ healthy and active lifestyles. The Company provides a competitively priced premium product that is blended to deliver several important benefits, such as low -cal -sugar -carb -free The Company’s revenue is comprised primarily of wholesale and direct to consumer (DTC) sales, and representation and distribution services. Wholesale revenue is generated through sales to distributors located in states throughout the United States of America. DTC revenue is generated from individuals purchasing wine directly from the Company through club membership and the Company’s website. | Nature of Business Fresh Vine Wine, Inc. (“the Company”, “our”, “we”), a Nevada corporation, is a premium wine brand built to complement consumers’ healthy and active lifestyles. The Company provides a competitively priced premium product that is blended to deliver several important benefits, such as low -cal -sugar -carb -free The Company’s revenue is comprised primarily of wholesale and direct to consumer (DTC) sales, and representation and distribution services. Wholesale revenue is generated through sales to distributors located in states throughout the United States of America. DTC revenue is generated from individuals purchasing wine directly from the Company through club membership and the Company’s website. Representation and distribution service revenue is generated by providing access to new markets and distribution channels. |
Basis of Presentation | Basis of Presentation The Company’s financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the financial statements. In certain instances, amounts reported in prior period financial statements have been reclassified to conform to the current financial statement presentation. | Basis of Presentation The Company’s financial statements have been prepared and are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The financial statements include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the financial statements. In certain instances, amounts reported in prior period financial statements have been reclassified to conform to the current financial statement presentation. |
Agreement and Plan of Merger | Agreement and Plan of Merger On January 25, 2024, the Company, FVW Merger Sub, Inc., a Colorado corporation and a wholly -owned -owned Subject to the terms and conditions of the Merger Agreement, at the closing of the Merger, (i) each then outstanding share of Notes Live common stock (collectively, “Notes Live common stock”) (which comprises all of Notes Live’s outstanding capital stock) will be converted into the right to receive a number of shares of Fresh Vine common stock calculated in accordance with the Merger Agreement (the “Exchange Ratio”), (ii) each then outstanding warrant to purchase Notes Live common stock will be exchanged (or otherwise amended) for a warrant exercisable (at an exercise price adjusted to reflect to the Exchange Ratio) to acquire that number of shares of Fresh Vine common stock equal to the number of warrant shares multiplied by the Exchange Ratio, and (iii) any then outstanding Notes Live promissory note that is convertible into Notes Live common stock will be exchanged, or otherwise amended, such that it will be convertible from and after the Merger into shares of Fresh Vine common stock at a per share conversion price adjusted to reflect the Exchange Ratio. Each share of Fresh Vine common stock and each option and warrant to purchase Fresh Vine common stock that is outstanding at the effective time of the Merger will remain outstanding in accordance with its terms and such shares of Fresh Vine common stock, options and warrants will be unaffected by the merger (subject adjustment based on the proposed Reverse Split described below). As contemplated by the Merger Agreement, Fresh Vine intends to effect a reverse stock split at or around the effective date of the merger at a ratio that results in the Fresh Vine common stock satisfying the initial listing standards of the NYSE American stock exchange and the exchange ratio in the Merger being as near to one as reasonably practicable (i.e., so that each share of Notes Live capital stock will be exchanged in the Merger for approximately one share of Fresh Vine common stock) (the “Reverse Split”). At the effective time of the Merger, the board of directors of Fresh Vine is expected to consist of seven members, all of whom will be designated by Notes Live. The Merger Agreement contains certain termination rights of each of Fresh Vine and Notes Live. Upon termination of the Merger Agreement under specified circumstances, Fresh Vine may be required to pay Notes Live a termination fee of $1.0 million and/or reimburse Notes Live’s expenses up to a maximum of $500,000, and Notes Live may be required to pay Fresh Vine a termination fee of $1.0 million, reimburse Fresh Vine’s expenses up to a maximum of $500,000, and/or, at the election of Fresh Vine, redeem the Fresh Vine Equity Investment at the same price per share as the purchase price paid by Fresh Vine therefor. | |
Liquidity, Going Concern, and Management Plan | Liquidity, Going Concern, and Management Plan Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $27.7 million as of March 31, 2024. Cash flows used in operating activities were approximately $333,000 and $2.1 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company had an approximately $2.5 million working capital deficit, inclusive of approximately $59,000 in cash and cash equivalents and $50,000 in restricted cash. The Company has increased its liquidity by selling inventory at prices below cost, by significantly reducing staffing levels and by the termination of celebrity endorsement contracts. The Company’s ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors including but not limited to, cash and cash equivalents, working capital and strategic capital raises. The ultimate success of these plans is not guaranteed. In considering our forecast for the next twelve months and the current cash and working capital as of the filing of this Form 10 -Q The Company received gross proceeds of $94,000 and $1 million from preferred stock offerings during the periods ended March 31, 2024 and December 31, 2023, respectively. During the quarter ended March 31, 2024, the Company entered into an Agreement and Plan of Merger (Agreement) with Notes Live, Inc. The Company will need to seek additional debt or equity financing to sustain existing operations. If adequate financing is not available, the Company will be forced to take measures to severely reduce our expenses and business operations or discontinue them completely. Such financing, if available, may be dilutive. At the current reduced pace of incurring expenses and with receipt of additional financing and the receipt of proceeds from the expected sales of inventory, the Company projects that the existing cash balance will be sufficient to fund current operations into the second quarter of 2024, after which additional financing or capital will be needed to satisfy obligations. Additional financing may not be available on favorable terms or at all. If additional financing is available, it may be highly dilutive to existing shareholders and may otherwise include burdensome or onerous terms. The Company’s inability to raise additional working capital in a timely manner would negatively impact the ability to fund operations, generate revenues, maintain or grow the business and otherwise execute the Company’s business plan, leading to the reduction or suspension of operations and ultimately potentially ceasing operations altogether and initiating bankruptcy proceedings. Should this occur, the value of any investment in the Company’s securities would be adversely affected. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. | Liquidity, Going Concern, and Management Plan Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $26.5 million as of December 31, 2023. Cash flows used in operating activities were $4.8 million and $13.5 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company had approximately a $1.3 million deficiency in working capital, inclusive of $236,000 in cash and cash equivalents and $100,000 in restricted cash. The Company has increased its liquidity by selling inventory at prices below cost, by significantly reducing staffing levels and by the termination of celebrity endorsement contracts. The Company’s ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors including but not limited to, cash and cash equivalents, working capital and strategic capital raises. The ultimate success of these plans is not guaranteed. In considering our forecast for the next twelve months and the current cash and working capital as of the filing of this Form 10 -K The Company received gross proceeds of $1 million from a preferred stock offering during the year ended December 31, 2023. Subsequent to year end, the Company entered into an Agreement and Plan of Merger (Agreement) with Notes Live, Inc. See Note 15 for further details on the Agreement. The Company will need to seek additional debt or equity financing to sustain existing operations. If adequate financing is not available, the Company will be forced to take measures to severely reduce our expenses and business operations or discontinue them completely. Such financing, if available, may be dilutive. At the current reduced pace of incurring expenses and without receipt of additional financing and the receipt of proceeds from the expected sales of inventory under purchase orders from a discount retailer entered into in the third quarter of 2023, the Company projects that the existing cash balance will be sufficient to fund current operations into the first quarter of 2024, after which additional financing or capital will be needed to satisfy obligations. Additional financing may not be available on favorable terms or at all. If additional financing is available, it may be highly dilutive to existing shareholders and may otherwise include burdensome or onerous terms. The Company’s inability to raise additional working capital in a timely manner would negatively impact the ability to fund operations, generate revenues, maintain or grow the business and otherwise execute the Company’s business plan, leading to the reduction or suspension of operations and ultimately potentially ceasing operations altogether and initiating bankruptcy proceedings. Should this occur, the value of any investment in the Company’s securities would be adversely affected. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Accounting Estimates | Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include allowance for doubtful accounts, allowance for inventory obsolescence, equity -based -employees | Accounting Estimates Management uses estimates and assumptions in preparing these financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include allowance for doubtful accounts, allowance for inventory obsolescence, equity -based -employees |
Cash | Cash The Company maintains its accounts at two financial institutions. At times throughout the year, the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. | Cash The Company maintains its accounts at two financial institutions. At times throughout the year, the Company’s cash balances may exceed amounts insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk. |
Restricted Cash | Restricted Cash Included in the cash balance is a balance of $50,000 and $100,000 as of March 31, 2024 and December 31, 2023, respectively, that the Company’s operating bank has required us to maintain as a security for collectability of automated clearing house transactions. These funds are held in a separate account and are not available for disbursements. | Restricted Cash Included in the cash balance is a deposit of $100,000 that the Company operating bank has required us to maintain as a security for collectability of automated clearing house transactions. These funds are held in a separate account and are not available for disbursements. |
Accounts Receivable | Accounts Receivable Accounts receivable consists of amounts owed to the Company for sales of the Company’s products on credit and are reported at net realizable value. Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial conditions. The Company estimates allowances for future returns and doubtful accounts based upon historical experience and its evaluation of the current status of receivables. Accounts considered uncollectible are written off against the allowance. As of March 31, 2024 and December 31, 2023 there was no allowance for doubtful accounts. | Accounts Receivable Accounts receivable consists of amounts owed to the Company for sales of the Company’s products on credit and are reported at net realizable value. Credit terms are extended to customers in the normal course of business. The Company performs ongoing credit evaluations of its customers’ financial conditions. The Company estimates allowances for future returns and doubtful accounts based upon historical experience and its evaluation of the current status of receivables. Accounts considered uncollectible are written off against the allowance. As of December 31, 2023 and 2022 there was no allowance for doubtful accounts. |
Inventories | Inventories Inventories primarily include bottled wine which is carried at the lower of cost (calculated using the average cost method) or net realizable value. The Company reduces the carrying value of inventories that are obsolete or for which market conditions indicate cost will not be recovered to estimated net realizable value. The Company’s estimate of net realizable value is based on analysis and assumptions including, but not limited to, historical experience, future demand, and market requirements. Reductions to the carrying value of inventories are recorded in cost of revenues. As of March 31, 2024 and December 31, 2023, the Company had recorded an inventory allowance of approximately $110,000 and $112,000, respectively. | Inventories Inventories primarily include bottled wine which is carried at the lower of cost (calculated using the average cost method) or net realizable value. The Company reduces the carrying value of inventories that are obsolete or for which market conditions indicate cost will not be recovered to estimated net realizable value. The Company’s estimate of net realizable value is based on analysis and assumptions including, but not limited to, historical experience, future demand, and market requirements. Reductions to the carrying value of inventories are recorded in cost of revenues. As of December 31, 2023 and 2022, the Company had recorded an inventory allowance of approximately $112,000 and $0, respectively. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs primarily consists of legal fees and any other fees relating to the Company’s Series B preferred stock offering. The deferred offering costs were capitalized as incurred and were offset against proceeds from the sale of Series B preferred stock at the closing of the Company’s offering. | Deferred Offering Costs Deferred offering costs primarily consist of legal, accounting, SEC filing fees, and any other fees relating to the Company’s subscription rights offering and preferred equity offering. The deferred offering costs as of December 31, 2022 were capitalized as incurred and were offset against proceeds from the sale of rights at the closing of the Company’s capital raise completed on March 14, 2023. |
Investment in Equity Securities | Investment in Equity Securities The Company has elected the measurement alternative for non -marketable -marketable | Investment in Equity Securities The Company has elected the measurement alternative for non -marketable -marketable |
Revenue recognition | Revenue recognition The Company’s total revenue reflects the sale of wine domestically in the U.S. to wholesale distributors or DTC customers. Under ASC Topic 606, Revenue from Contracts with Customers contract includes a single performance obligation to transfer control of the product to the customer. Control is transferred when the product is either shipped or delivered, depending on the shipping terms, at which point the Company recognizes the transaction price for the product as revenue. The Company has elected to account for shipping and handling as a fulfillment activity, with amounts billed to customers for shipping and handling included in total revenue. The Company also generates revenue through membership in its wine club. Wine club members pay a monthly fee, which varies depending on level of membership, and are entitled to receive quarterly shipments of wine, free shipping, and discounts on other wine and merchandise purchased. The Company recognizes revenue for the monthly membership dues when the product is delivered. Any membership dues received before the product is delivered is recorded as deferred revenue on the Company’s balance sheet. ASC 606 notes that when another party is involved in providing goods or services to a customer, the entity should determine whether the nature of its promise is a performance obligation to provide the specified goods or services itself (that is, the entity is a principal) or to arrange for those goods or services to be provided by the other party (that is, the entity is an agent). The Company does not bear responsibility for inventory losses and does not have pricing determination; therefore, the Company would be considered the agent and revenue should be recognized as net sales. Products are sold for cash or on credit terms. Credit terms are established in accordance with local and industry practices, and typically require payment within 30 -60 The following table presents the percentages of total revenue disaggregated by sales channels for the three months ended March 31, 2024 and 2023: Three months ended 2024 2023 Wholesale 27.2 % 70.6 % Direct to consumer 72.8 % 29.4 % Total revenue 100.0 % 100.0 % | Revenue recognition The Company’s total revenue reflects the sale of wine domestically in the U.S. to wholesale distributors or DTC and related party service revenues. Under ASC Topic 606, Revenue from Contracts with Customers The Company also generates revenue through membership in its wine club. Wine club members pay a monthly fee, which varies depending on level of membership, and are entitled to receive quarterly shipments of wine, free shipping, and discounts on other wine and merchandise purchased. The Company recognizes revenue for the monthly membership dues when the product is delivered. Any membership dues received before the product is delivered is recorded as deferred revenue on the Company’s balance sheet. The Company has determined that related party service revenue should be recognized over the period of time it provides such services. ASC 606 also notes that when another party is involved in providing goods or services to a customer, the entity should determine whether the nature of its promise is a performance obligation to provide the specified goods or services itself (that is, the entity is a principal) or to arrange for those goods or services to be provided by the other party (that is, the entity is an agent). The Company does not bear responsibility for inventory losses and does not have pricing determination; therefore, the Company would be considered the agent and revenue should be recognized as net sales. Products are sold for cash or on credit terms. Credit terms are established in accordance with local and industry practices, and typically require payment within 30 -60 The following table presents the percentages of total revenue disaggregated by sales channels for the years ended December 31, 2023 and 2022: Year ended 2023 2022 Wholesale 72.7 % 57.7 % Direct to consumer 27.3 % 31.9 % Related party service — % 10.4 % Total revenue 100.0 % 100.0 % |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (FASB) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • • • The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The carrying values of cash, accounts receivable, accounts payable, deferred revenue and other financial working capital items approximate fair value at March 31, 2024 and December 31, 2023, due to the short maturity nature of these items. | |
Income Taxes | Income Taxes The Company recognizes uncertain tax positions in accordance with ASC 740 on the basis of evaluating whether it is more likely than not that the tax positions will be sustained upon examination by tax authorities. For those tax positions that meet the more -likely-than | Income Taxes The Company recognizes uncertain tax positions in accordance with ASC 740 on the basis of evaluating whether it is more likely than not that the tax positions will be sustained upon examination by tax authorities. For those tax positions that meet the more -likely-than |
Equity-Based Compensation | Equity-Based Compensation The Company measures equity -based The Company measures equity -based -based See Note 8 for further discussion of equity -based | Equity-Based Compensation The Company measures equity -based -based The Company measures equity -based -based See Note 9 for further discussion of equity -based |
Advertising | Advertising The Company expenses the costs of advertising as incurred. Advertising expenses were approximately $145,000 and $490,000 for the three months ended March 31, 2024 and 2023, respectively. | Advertising The Company expenses the costs of advertising as incurred. Advertising expense for the years ended December 31, 2023 and 2022, was $1,576,325 and $3,059,429, respectively. |
Application of New or Revised Accounting Standards | Application of New or Revised Accounting Standards Pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), a company constituting an “emerging growth company” is, among other things, entitled to rely upon certain reduced reporting requirements and is eligible to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. The Company is an emerging growth company and has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocable opts out of the extended transition period provide in the JOBS Act. | |
NYSE Listing Requirements | NYSE Listing Requirements On September 8, 2023, the Company received a written notice (the “Notice”) from NYSE American stating that it was not in compliance with Section 1003(a)(ii) of the NYSE American Company Guide (the “Company Guide”), which requires a listed company that has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years to maintain at least $4 million of stockholders’ equity. The Company reported stockholders’ deficit of approximately $2 million as of March 31, 2024 and have had losses from continuing operations and/or net losses in each of the fiscal years ended December 31, 2020, 2021, 2022 and 2023. As required by the NYSE American, the Company submitted a plan to the NYSE American on October 9, 2023 addressing actions it has taken and how it intends to regain compliance with the continued listing standards within the required 18 On November 21, 2023, the Company received notification (the “Acceptance Letter”) from NYSE American that the Company’s plan to regain compliance with NYSE American’s listing standards was accepted. The Acceptance Letter also stated that the Company is not in compliance with Section 1003(a)(i) of the Company Guide, which requires an issuer to have stockholders’ equity of $2.0 million or more if it has reported losses from continuing operations and/or net losses in two out of its three most recent fiscal years. NYSE American has granted the Company a plan period through March 8, 2025 to regain compliance with Sections 1003(a)(i) and (ii) of the Company Guide. If the Company is not in compliance with all continued listing standards by that date or if the Company does not make progress consistent with the plan during the plan period, the Company will be subject to delisting proceedings. | NYSE Listing Requirements On September 8, 2023, the Company received a written notice (the “Notice”) from NYSE American stating that it was not in compliance with Section 1003(a)(ii) of the NYSE American Company Guide (the “Company Guide”), which requires a listed company that has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years to maintain at least $4 million of stockholders’ equity. The Company reported stockholders’ deficit of approximately $712,000 as of December 31, 2023 and have had losses from continuing operations and/or net losses in each of the fiscal years ended December 31, 2020, 2021, 2022 and 2023. As required by the NYSE American, the Company submitted a plan to the NYSE American on October 9, 2023 addressing actions it has taken and how it intends to regain compliance with the continued listing standards within the required 18 On November 21, 2023, the Company received notification (the “Acceptance Letter”) from NYSE American that the Company’s plan to regain compliance with NYSE American’s listing standards was accepted. The Acceptance Letter also stated that the Company is not in compliance with Section 1003(a)(i) of the Company Guide, which requires an issuer to have stockholders’ equity of $2.0 million or more if it has reported losses from continuing operations and/or net losses in two out of its three most recent fiscal years. NYSE American has granted the Company a plan period through March 8, 2025 to regain compliance with Sections 1003(a)(i) and (ii) of the Company Guide. If the Company is not in compliance with all continued listing standards by that date or if the Company does not make progress consistent with the plan during the plan period, the Company will be subject to delisting proceedings. |
Contract Balances and Receivables | Contract Balances and Receivables When the Company receives pre -orders Contract liabilities as of December 31, 2023 and 2022, and January 1, 2022 were $3,407, $10,000 and $13,750, respectively. Revenue recognized in 2023 and 2022 from contract liabilities as of December 31, 2022 and December 31, 2021 was $10,000 and $13,750, respectively. Receivables with customers as of December 31, 2023 and 2022, and January 1, 2022, were $172,101, $259,317 and $208,160, respectively. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (FASB) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: • • • The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The carrying values of cash, accounts receivable, accounts payable, deferred revenue and other financial working capital items approximate fair value at December 31, 2023 and 2022, due to the short maturity nature of these items. | |
Application of New or Revised Accounting Standards | Application of New or Revised Accounting Standards Pursuant to the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), a company constituting an “emerging growth company” is, among other things, entitled to rely upon certain reduced reporting requirements and is eligible to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. The Company is an emerging growth company and has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocable opts out of the extended transition period provide in the JOBS Act. | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016 -13 Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, -looking |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Summary of Significant Accounting Policies [Abstract] | ||
Schedule of Percentages of Total Revenue Disaggregated by Sales | The following table presents the percentages of total revenue disaggregated by sales channels for the three months ended March 31, 2024 and 2023: Three months ended 2024 2023 Wholesale 27.2 % 70.6 % Direct to consumer 72.8 % 29.4 % Total revenue 100.0 % 100.0 % | The following table presents the percentages of total revenue disaggregated by sales channels for the years ended December 31, 2023 and 2022: Year ended 2023 2022 Wholesale 72.7 % 57.7 % Direct to consumer 27.3 % 31.9 % Related party service — % 10.4 % Total revenue 100.0 % 100.0 % |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Loss Per Share [Abstract] | ||
Schedule of Components of Diluted Shares | The following table shows the components of diluted shares for the periods ending: Three Months Ended March 31, 2024 2023 Numerator: Net loss $ (1,212,315 ) $ (2,010,824 ) Less: dividends on Series A preferred stock 30,000 — Net loss attributable to common stockholders $ (1,242,315 ) $ (2,010,824 ) Denominator: Basic – weighted shares outstanding 15,976,227 13,332,790 Dilutive effect from shares authorized — — Diluted – weighted shares outstanding 15,976,227 13,332,790 Basic loss per share $ (0.08 ) $ (0.15 ) Diluted loss per share $ (0.08 ) $ (0.15 ) | The following table shows the components of diluted shares for the years ending: December 31, December 31, Numerator: Net loss $ (10,615,035 ) $ (15,202,507 ) Less: dividends on preferred stock 41,867 — Net loss attributable to common stockholders $ (10,656,902 ) $ (15,202,507 ) Denominator: Basic – weighted shares outstanding 15,329,617 12,550,096 Dilutive effect from shares authorized — — Diluted – weighted shares outstanding 15,329,617 12,550,096 Basic loss per share $ (0.69 ) $ (1.21 ) Diluted loss per share $ (0.69 ) $ (1.21 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventories [Abstract] | |
Schedule of Inventories Consist | Inventories consist of the following at: December 31, December 31, Inventory – finished goods $ 337,873 $ 3,683,159 Inventory – merchandise — 13,039 Total $ 337,873 $ 3,696,198 |
Prepaid Expenses (Tables)
Prepaid Expenses (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Prepaid Expenses [Abstract] | ||
Schedule of Prepaid Expenses | Prepaid expenses consist of the following at: March 31, December 31, 2023 Prepaid marketing expenses – current $ 3,871 $ 9,871 Other prepaid expenses 27,994 33,072 Total $ 31,865 $ 42,943 | Prepaid expenses and other assets consist of the following at: December 31, December 31, Prepaid marketing expenses – current $ 9,871 $ 313,000 Prepaid marketing expenses – long-term — 678,167 Inventory deposits — 569,377 Other prepaid expenses 33,072 78,834 Total $ 42,943 $ 1,639,378 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Accrued Expenses [Abstract] | ||
Schedule of Accrued Expenses | Accrued expenses consist of the following at: March 31, December 31, Sponsorship agreements $ 691,194 $ 608,818 Accrued credit card charges 5,526 7,275 Series A Stock dividends 71,866 41,867 Legal and professional 48,081 125,704 Deferred offering costs 26,524 — Other accrued expenses 4,410 27,059 Total $ 847,601 $ 810,723 | Accrued expenses consist of the following at: December 31, December 31, Sponsorship agreements $ 608,818 $ 234,494 Accrued credit card charges 7,275 21,013 Series A Stock dividends 41,867 — Legal and professional 125,704 89,200 Other accrued expenses 27,059 78,224 Total $ 810,723 $ 422,931 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Stockholders’ Equity [Abstract] | ||
Schedule of Accrued Dividends | The following table summarizes accrued dividends that the Company is legally obligated to pay: March 31, December 31, Series A preferred stock $ 71,867 $ 41,867 | The following table summarizes accrued dividends that the Company is legally obligated to pay: For the Series A Stock $ 41,867 |
Schedule of Activity of the Series B Stock | The issuance activity of the Series B Stock is summarized below: Three Months Three Months Ended Series B preferred stock shares issued 940 — Net proceeds $ 94,000 $ — | The issuance activity of the Series A Stock is summarized below: For the Series A Stock shares issued 10,000 Net proceeds $ 950,000 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Equity-Based Compensation [Abstract] | ||
Schedule of Restricted Stock Unit Activity | Restricted stock activity as of and for the three months ended March 31, 2024 was as follows: Number of Weighted Outstanding at December 31, 2023 20,000 0.00 Granted — — Vested or released (20,000 ) — Forfeited — — Outstanding at March 31, 2024 — — Vendor stock award activity subject to revenue -related Number of Weighted Outstanding at December 31, 2023 1,030,000 1.25 Granted — — Vested or released — — Forfeited — — Outstanding at March 31, 2024 1,030,000 1.00 Warrant activity for three -month Number of Weighted Weighted Outstanding at December 31, 2023 3,553,969 $ 1.61 4.16 Granted 300,000 0.50 7.00 Vested or released — — — Forfeited — — — Outstanding at March 31, 2024 3,553,969 $ 1.51 4.17 | Restricted stock unit activity as of and for the years ended December 31, 2023 and 2022 was as follows Number of Weighted Outstanding at December 31, 2021 377,777 0.45 Granted 117,800 0.33 Forfeited (495,577 ) — Outstanding at December 31, 2022 — — Granted 614,883 0.86 Forfeited (614,883 ) — Outstanding at December 31, 2023 — — Number of Weighted Outstanding at December 31, 2021 — — Granted 110,000 9.27 Vested or released (36,668 ) — Forfeited (66,667 ) — Outstanding at December 31, 2022 6,666 0.90 Granted 1,641,332 0.57 Vested or released (570,000 ) — Forfeited (1,057,998 ) — Outstanding at December 31, 2023 20,000 0.00 -related Number of Weighted Outstanding at December 31, 2021 — — Granted 1,030,000 2.25 Vested or released — — Forfeited — — Outstanding at December 31, 2022 1,030,000 2.25 Granted — — Vested or released — — Forfeited — — Outstanding at December 31, 2023 1,030,000 1.25 Number of Weighted Weighted Outstanding at December 31, 2021 110,000 $ 12.00 4.96 Granted — — — Vested or released — — — Forfeited — — — Outstanding at December 31, 2022 110,000 $ 12.00 3.71 Granted 3,143,969 1.25 5.00 Vested or released — — — Forfeited — — — Outstanding at December 31, 2023 3,253,969 $ 1.61 4.16 |
Schedule of Stock Option Activity | Stock option activity for three month period ended March 31, 2024 was as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Outstanding at December 31, 2023 446,559 $ 8.88 8.08 Granted — — — Exercised — — — Forfeited — — — Outstanding at March 31, 2024 446,559 $ 8.88 7.83 Exercisable at March 31, 2024 71,559 $ 3.03 8.42 | Stock option activity for the years ended December 31, 2023 and 2022 was as follows: Number of Weighted Weighted Outstanding at December 31, 2021 1,830,000 $ 9.86 8.18 Granted 701,893 3.37 10.00 Exercised — — — Forfeited (957,001 ) — — Outstanding at December 31, 2022 1,574,892 $ 9.67 8.94 Granted 1,500,000 0.50 5.00 Exercised — — — Forfeited (2,628,333 ) — — Outstanding at December 31, 2023 446,559 $ 8.88 8.08 Exercisable at December 31, 2023 71,559 $ 3.03 8.67 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Acrued Income Taxes Abstract | |
Schedule of Components of the Provision for Income Taxes | Components of the provision for income taxes for the years ended December 31, 2023 and 2022 were as follows: 2023 2022 Current $ — $ — Deferred — — Total $ — $ — |
Schedule of Reconcilation of Tax Expense | The following table represents a reconciliation of the tax expense computed at the statutory federal rate and the Company’s tax expense for the years ending December 31, 2023 and 2022: 2023 2022 Tax expense (benefit) at statutory rate $ (2,229,000 ) 21.0 % $ (3,193,000 ) 21.0 % State income tax expense (benefit), net of federal tax effect (377,000 ) 3.6 % (162,000 ) 1.1 % Change in valuation allowance on deferred tax assets 2,360,000 -22.2 % 3,355,000 -22.1 % Stock award forfeiture 440,000 -4.3 % — -0.0 % Change in deferred tax rate (102,000 ) 1.0 % — 0.0 % Return to provision adjustments (92,000 ) 0.9 % — 0.0 % Income tax expense (benefit) $ — 0.0 % $ — 0.0 % |
Schedule of Deferred Tax Assets | The tax effects of temporary differences and carry forwards that give rise to significant portions of the deferred tax assets are as follows: December 31, December 31, Deferred tax assets: Deferred revenue $ 1,000 $ 3,000 Amortization 1,000 1,000 Stock based compensation 120,000 868,000 Net operating losses 5,686,000 3,002,000 Inventory reserve 27,000 — Accrued expenses 407,000 — Prepaid expenses (8,000 ) — Valuation allowance (6,234,000 ) (3,874,000 ) Net deferred tax assets: $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Commitments and Contingencies [Abstract] | ||
Schedule of Estimated Expense for the Sponsorship Agreements | The estimated expense for the sponsorship agreements as described in Note 6 for the periods ending December 31 subsequent to March 31, 2024 is as follows: Sponsorship Agreements 2024 $ 137,357 | The estimated expense for the sponsorship agreements as described in Note 7 for the periods subsequent to December 31, 2023 is as follows: Sponsorship 2024 $ 162,553 |
Transactions with Related Par_2
Transactions with Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Transactions with Related Parties [Abstract] | |
Schedule of Shared Expenses | The shared expenses are as follows for the years ended December 31, 2023 and 2022: 2023 2022 Rent $ — $ 94,436 Utilities — 5,470 $ — $ 99,906 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Sep. 08, 2023 | Nov. 21, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 01, 2022 | |
Summary of Significant Accounting Policies [Line Items] | ||||||||
Shares issued (in Shares) | 1 | 500,000 | ||||||
Accumulated deficit | $ (27,719,075) | $ (26,476,760) | ||||||
Cash flows used in operating activities | (332,814) | $ (2,091,809) | (4,809,009) | $ (13,528,251) | ||||
Working capital | 2,500,000 | 1,300,000 | ||||||
Cash and cash equivalents | 58,812 | 236,340 | ||||||
Restricted cash | 50,000 | 100,000 | ||||||
Received gross proceeds | 94,000 | |||||||
Preferred stock offerings | 1,000,000 | |||||||
Cash balance | 50,039 | 100,000 | ||||||
Inventory allowance | $ 110,000 | $ 112,000 | ||||||
Income tax benefit rate | 50% | 50% | ||||||
Advertising expense | $ 145,000 | 490,000 | $ 1,576,325 | 3,059,429 | ||||
Stockholders equity | $ 4,000,000 | $ 2,000,000 | 2,000,000 | 712,000 | ||||
Received gross proceeds | 90,325 | 950,000 | ||||||
Cash | 100,000 | |||||||
Inventory allowance | 112,000 | 0 | ||||||
Contract liabilities | 3,407 | 10,000 | $ 13,750 | |||||
Revenue recognized | 10,000 | $ 13,750 | ||||||
Receivables with customers | 172,101 | 259,317 | $ 208,160 | |||||
Unrecognized equity-based compensation expense | 7,046 | 0 | 991,167 | |||||
Restricted Cash [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Cash balance | 50,000 | 100,000 | ||||||
Previously Reported [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Accumulated deficit | (26,476,760) | (15,819,858) | ||||||
Cash and cash equivalents | 236,340 | 2,080,335 | ||||||
Cash balance | 100,000 | |||||||
Cash [Member] | Previously Reported [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Cash and cash equivalents | 59,000 | |||||||
Cash and Cash Equivalents [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Cash and cash equivalents | $ 236,000 | |||||||
Notes Live [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Termination fee | 1,000,000 | |||||||
Reimburse expenses | 500,000 | |||||||
Fresh Vine [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Termination fee | 1,000,000 | |||||||
Reimburse expenses | 500,000 | |||||||
Liquidity, Going Concern, and Management Plan [Member] | ||||||||
Summary of Significant Accounting Policies [Line Items] | ||||||||
Cash flows used in operating activities | $ (333,000) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Percentages of Total Revenue Disaggregated by Sales - Customer Concentration Risk [Member] - Revenue Benchmark [Member] | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Percentages of Total Revenue Disaggregated by Sales [Line Items] | ||||
Total revenue percentages | 100% | 100% | 100% | 100% |
Wholesale [Member] | ||||
Schedule of Percentages of Total Revenue Disaggregated by Sales [Line Items] | ||||
Total revenue percentages | 27.20% | 70.60% | 72.70% | 57.70% |
Direct to consumer [Member] | ||||
Schedule of Percentages of Total Revenue Disaggregated by Sales [Line Items] | ||||
Total revenue percentages | 72.80% | 29.40% | 27.30% | 31.90% |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Loss Per Share [Abstract] | ||||
Diluted weighted average shares outstanding | 15,237,751 | 3,211,563 | 14,748,862 | 2,721,562 |
Loss Per Share (Details) - Sche
Loss Per Share (Details) - Schedule of Components of Diluted Shares - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||||
Net loss | $ (1,212,315) | $ (2,010,824) | $ (10,615,035) | $ (15,202,507) |
Less: dividends on Series A preferred stock | 30,000 | 41,867 | ||
Net loss attributable to common stockholders | $ (1,242,315) | $ (2,010,824) | $ (10,656,902) | $ (15,202,507) |
Denominator: | ||||
Basic – weighted shares outstanding | 15,976,227 | 13,332,790 | 15,329,617 | 12,550,096 |
Dilutive effect from shares authorized | ||||
Diluted – weighted shares outstanding | 15,976,227 | 13,332,790 | 15,329,617 | 12,550,096 |
Basic loss per share | $ (0.08) | $ (0.15) | $ (0.69) | $ (1.21) |
Diluted loss per share | $ (0.08) | $ (0.15) | $ (0.69) | $ (1.21) |
Inventories (Details)
Inventories (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Inventories [Line Items] | ||||
Inventory write down | $ 110,366 | $ 1,844,210 | ||
Finished goods inventory | 172,332 | 337,873 | ||
Inventory valuation reserve | 110,000 | $ 112,000 | ||
Inventories [Member] | ||||
Inventories [Line Items] | ||||
Inventory write down | $ 110,000 |
Prepaid Expenses (Details) - Sc
Prepaid Expenses (Details) - Schedule of Prepaid Expenses - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Prepaid Expenses [Abstract] | ||
Prepaid marketing expenses - current | $ 3,871 | $ 9,871 |
Other prepaid expenses | 27,994 | 33,072 |
Total | $ 31,865 | $ 42,943 |
Investments (Details)
Investments (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Inventories [Line Items] | ||
Investment amount | $ 500,000 | $ 500,000 |
Investment shares | 50,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Sep. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Accrued Expenses [Line Items] | |||||
Expense relating to agreements | $ 123,376 | $ 52,664 | |||
Marketing expenses | $ 141,000 | ||||
Sponsor Agreement [Member] | |||||
Accrued Expenses [Line Items] | |||||
Expense relating to agreements | $ 374,325 | $ 353,931 | |||
Minimum [Member] | Sponsor Agreement [Member] | |||||
Accrued Expenses [Line Items] | |||||
Sponsorship agreements term | 2 years | 2 years | |||
Payments for agreements | $ 103,000 | $ 103,000 | |||
Maximum [Member] | Sponsor Agreement [Member] | |||||
Accrued Expenses [Line Items] | |||||
Sponsorship agreements term | 4 years | 4 years | |||
Payments for agreements | $ 216,000 | $ 216,000 |
Accrued Expenses (Details) - Sc
Accrued Expenses (Details) - Schedule of Accrued Expenses - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Accrued Expenses [Abstract] | ||
Sponsorship agreements | $ 691,194 | $ 608,818 |
Accrued credit card charges | 5,526 | 7,275 |
Series A Stock dividends | 71,866 | 41,867 |
Legal and professional | 48,081 | 125,704 |
Deferred offering costs | 26,524 | |
Other accrued expenses | 4,410 | 27,059 |
Total | $ 847,601 | $ 810,723 |
Note Payable (Details)
Note Payable (Details) | Mar. 31, 2024 USD ($) |
Note Payable [Abstract] | |
Short-term agreement | $ 15,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Mar. 14, 2024 | Aug. 02, 2023 | Jul. 27, 2023 | Mar. 14, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 01, 2023 | Sep. 07, 2023 | Feb. 22, 2023 | Dec. 17, 2021 | |
Stockholders' Equity [Line Items] | ||||||||||||
Subscription rights to purchase units | 6,366,129 | |||||||||||
Warrants expiration | 5 years | 1 year | ||||||||||
Warrants exercise price (in Dollars per share) | $ 0.5 | $ 1.25 | ||||||||||
Stockholder received subscription rights (in Dollars per share) | $ 0.5 | |||||||||||
Price per unit (in Dollars per share) | $ 100 | $ 1 | $ 1 | |||||||||
Shares issued | 1 | 500,000 | ||||||||||
Gross cash proceeds (in Dollars) | $ 3,140,000 | |||||||||||
Net proceeds received (in Dollars) | $ 2,600,000 | $ 2,600,000 | ||||||||||
Additional gross proceeds (in Dollars) | $ 3,930,000 | |||||||||||
Convertible preferred stock par value (in Dollars per share) | $ 0.001 | |||||||||||
Purchase of shares | 10,000 | 10,000 | ||||||||||
Total gross proceeds (in Dollars) | $ 90,325 | $ 950,000 | ||||||||||
Aggregate purchase price (in Dollars) | $ 400,000 | $ 90,325 | ||||||||||
Conversion price (in Dollars per share) | $ 0.05 | $ 0.05 | ||||||||||
Capital or surplus | 150% | 150% | ||||||||||
Redemption issued and outstanding | 50% | 50% | ||||||||||
Per share percentage | 200% | 200% | ||||||||||
Dividend rate | 12% | 12% | ||||||||||
Securities purchase agreement (in Dollars per share) | $ 0.47 | $ 0.47 | ||||||||||
Sold shares | 940 | |||||||||||
Gross proceeds (in Dollars) | $ 94,000 | |||||||||||
Conversion price (in Dollars per share) | $ 0.05 | |||||||||||
Percentage of stock issued | 75% | |||||||||||
Percentage of stock outstanding | 75% | |||||||||||
Percentage of stated value | 200% | |||||||||||
Percentage of preferred shares issued | 50% | |||||||||||
Percentage of preferred shares outstanding | 50% | |||||||||||
Percentage of gross proceed | 8% | |||||||||||
Warrants to purchase | 300,000 | |||||||||||
Shares of common stock | 970,000 | |||||||||||
Additional shares of common stock | 1,030,000 | |||||||||||
Additional gross proceeds (in Dollars) | $ 3,930,000 | |||||||||||
Common stock outstanding percentage | 19.90% | |||||||||||
Equity-based compensation (in Dollars) | $ 1,233,300 | |||||||||||
Warrant [Member] | ||||||||||||
Stockholders' Equity [Line Items] | ||||||||||||
Common stock | 1 | |||||||||||
Common Stock [Member] | ||||||||||||
Stockholders' Equity [Line Items] | ||||||||||||
Common stock | 1 | |||||||||||
Conversion price (in Dollars per share) | $ 0.45 | |||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||
Stockholders' Equity [Line Items] | ||||||||||||
Convertible preferred stock par value (in Dollars per share) | $ 0.001 | |||||||||||
Undesignated preferred stock | 10,000 | 10,000 | ||||||||||
Conversion price (in Dollars per share) | 0.1 | $ 0.1 | ||||||||||
Common stock outstanding percentage | 19.90% | |||||||||||
Series A Redeemable Preferred Stock [Member] | ||||||||||||
Stockholders' Equity [Line Items] | ||||||||||||
Price per unit (in Dollars per share) | $ 100 | $ 100 | ||||||||||
Shares issued | 970,000 | 2,000 | 4,000 | |||||||||
Total gross proceeds (in Dollars) | $ 1,000,000 | $ 1,000,000 | ||||||||||
Stock issued | 4,000 | 4,000 | ||||||||||
Conversion price (in Dollars per share) | $ 0.1 | $ 0.1 | ||||||||||
Redemption issued and outstanding | 75% | 75% | ||||||||||
Per share percentage | 150% | 150% | ||||||||||
Dividend rate | 50% | 50% | ||||||||||
Common stock outstanding percentage | 4.99% | |||||||||||
Series B | ||||||||||||
Stockholders' Equity [Line Items] | ||||||||||||
Undesignated preferred stock | 50,000 | |||||||||||
Conversion price (in Dollars per share) | $ 0.45 | |||||||||||
Percentage of stated value | 150% | |||||||||||
Common Stock [Member] | ||||||||||||
Stockholders' Equity [Line Items] | ||||||||||||
Common stock | 1 | |||||||||||
Aggregate purchase price (in Dollars) | ||||||||||||
Rights Offering [Member] | Warrant [Member] | ||||||||||||
Stockholders' Equity [Line Items] | ||||||||||||
Shares issued | 3,143,969 | |||||||||||
Rights Offering [Member] | Common Stock [Member] | ||||||||||||
Stockholders' Equity [Line Items] | ||||||||||||
Shares issued | 3,143,969 | |||||||||||
Rights Offering [Member] | Common Stock [Member] | ||||||||||||
Stockholders' Equity [Line Items] | ||||||||||||
Shares issued | 3,143,969 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of Accrued Dividends - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2023 | |
Schedule of Accrued Dividends [Abstract] | |||
Series A preferred stock | $ 71,867 | $ 41,867 | $ 41,867 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of Activity of the Series B Stock - Series A Preferred Stock [Member] - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Schedule of Activity of the Series B Stock [Line Items] | |||
Series B preferred stock shares issued | 940 | ||
Net proceeds | $ 94,000 | $ 950,000 |
Equity-Based Compensation (Deta
Equity-Based Compensation (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||||||
Apr. 24, 2023 | Mar. 11, 2023 | Sep. 01, 2022 | Mar. 02, 2022 | Dec. 17, 2021 | May 25, 2023 | Apr. 30, 2023 | Mar. 30, 2023 | Jan. 31, 2023 | Jun. 22, 2022 | Feb. 24, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | May 11, 2023 | |
Equity Based Compensation [Line Items] | |||||||||||||||||
Restricted stock units | 10,000 | ||||||||||||||||
Restricted stock units | 47,800 | ||||||||||||||||
Vested shares | 25,000 | 25,000 | 6,666 | ||||||||||||||
Total equity-based compensation expense (in Dollars) | $ 1,626 | $ 335,922 | $ 1,708,218 | $ 4,053,123 | |||||||||||||
Equity-based compensation expense (in Dollars) | 1,626 | $ 53,672 | |||||||||||||||
Unrecognized equity-based compensation expense (in Dollars) | $ 7,046 | $ 0 | 991,167 | ||||||||||||||
Expected volatility | 75% | 75% | |||||||||||||||
Recognized expense | 991,167 | ||||||||||||||||
Other expense (in Dollars) | $ 500,000 | ||||||||||||||||
Total equity-based compensation expense (in Dollars) | 1,658,485 | ||||||||||||||||
Equity-based compensation expense restricted stock (in Dollars) | $ 219,648 | ||||||||||||||||
Unvested shares of restricted stock was forfeited | 6,666 | ||||||||||||||||
Unvested shares of restricted stock | 66,666 | ||||||||||||||||
Shares issued | 1 | 500,000 | |||||||||||||||
Founding members percentage | 25% | ||||||||||||||||
Options installments percentage | 20% | ||||||||||||||||
Options remained Shares | 375,000 | ||||||||||||||||
Warrants purchase shares | 110,000 | ||||||||||||||||
Common stock per shares (in Dollars per share) | $ 12 | ||||||||||||||||
Warrants vest year | 1 year | 5 years | |||||||||||||||
Exercisable vest years | 4 years | ||||||||||||||||
Warrant [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Warrants granted | 7,300,000 | 73,143,969 | |||||||||||||||
Minimum [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Expected term | 5 years | 5 years | |||||||||||||||
Common stock installments percentage | 200% | ||||||||||||||||
Maximum [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Expected term | 10 years | 10 years | |||||||||||||||
Common stock installments percentage | 600% | ||||||||||||||||
Restricted Stock [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Shares of restricted stock | 319,023 | 124,902 | |||||||||||||||
Restricted stock units | 170,958 | ||||||||||||||||
Vested shares | 3,334 | ||||||||||||||||
Total equity-based compensation expense (in Dollars) | $ 0 | $ 188,500 | $ 9,264 | ||||||||||||||
Warrants granted | 614,883 | 117,800 | |||||||||||||||
RSU [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Vested shares | 570,000 | 36,668 | |||||||||||||||
Warrants granted | 1,641,332 | 110,000 | |||||||||||||||
Restricted stock units | 251,851 | ||||||||||||||||
Shares of Restricted Stock [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Shares of restricted stock | 500,000 | ||||||||||||||||
Stock Options [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Total equity-based compensation expense (in Dollars) | $ 565,500 | ||||||||||||||||
Equity-based compensation expense (in Dollars) | 112,040 | $ 223,224 | |||||||||||||||
Shares issued | 427,001 | ||||||||||||||||
Price per share (in Dollars per share) | $ 3.47 | ||||||||||||||||
Board of Directors Chairman [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Restricted stock units | 70,000 | 100,000 | |||||||||||||||
Total equity-based compensation expense (in Dollars) | 39,510 | ||||||||||||||||
Equity-based compensation expense restricted stock (in Dollars) | $ 285,600 | ||||||||||||||||
Board of Directors Chairman [Member] | Shares of Restricted Stock [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Shares of restricted stock | 100,000 | ||||||||||||||||
Chief Operating Officer [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Other expense (in Dollars) | $ 175,000 | ||||||||||||||||
Chief Financial Officer [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Shares of restricted stock | 196,463 | ||||||||||||||||
Restricted stock units | 100,000 | ||||||||||||||||
Vested shares | 3,584 | 6,571 | |||||||||||||||
Total equity-based compensation expense (in Dollars) | $ 110,602 | ||||||||||||||||
Other expense (in Dollars) | 125,783 | 41,449 | |||||||||||||||
Shares issued | 69,892 | 200,000 | |||||||||||||||
Price per share (in Dollars per share) | $ 3.04 | $ 3.3 | |||||||||||||||
Chief Executive Officer [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Shares of restricted stock | 463,917 | ||||||||||||||||
Exercisable term | 10 years | 10 years | |||||||||||||||
Vice President [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Restricted stock units | 380,952 | ||||||||||||||||
Class F [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Total equity-based compensation expense (in Dollars) | $ 6,259 | $ 176,835 | |||||||||||||||
IPO [Member] | |||||||||||||||||
Equity Based Compensation [Line Items] | |||||||||||||||||
Founding members percentage | 15% |
Equity-Based Compensation (De_2
Equity-Based Compensation (Details) - Schedule of Restricted Stock Unit Activity | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Restricted Stock [Member] | |
Schedule of Restricted Stock Unit Activity [Line Items] | |
Number of Shares, Balance beginning | 20,000 |
Weighted Average Remaining Term, Balance beginning | 0 years |
Number of Shares, Granted | |
Weighted Average Remaining Term, Granted | |
Number of Shares, Vested or released | (20,000) |
Weighted Average Remaining Term, Vested or released | |
Number of Shares, Forfeited | |
Weighted Average Remaining Term, Forfeited | |
Number of Shares, Balance ending | |
Weighted Average Remaining Contract Term, Balance ending | |
Vendor Stock [Member] | |
Schedule of Restricted Stock Unit Activity [Line Items] | |
Number of Shares, Balance beginning | 1,030,000 |
Weighted Average Remaining Term, Balance beginning | 1 year 3 months |
Number of Shares, Granted | |
Weighted Average Remaining Term, Granted | |
Number of Shares, Vested or released | |
Weighted Average Remaining Term, Vested or released | |
Number of Shares, Forfeited | |
Weighted Average Remaining Term, Forfeited | |
Number of Shares, Balance ending | 1,030,000 |
Weighted Average Remaining Contract Term, Balance ending | 1 year |
Warrant [Member] | |
Schedule of Restricted Stock Unit Activity [Line Items] | |
Number of Shares, Balance beginning | 3,553,969 |
Weighted Average Remaining Term, Balance beginning | 4 years 1 month 28 days |
Weighted Average Exercise Price, Balance beginning | $ / shares | $ 1.61 |
Number of Shares, Granted | 300,000 |
Weighted Average Remaining Term, Granted | 7 years |
Weighted Average Exercise Price, Granted | $ / shares | $ 0.5 |
Number of Shares, Vested or released | |
Weighted Average Remaining Term, Vested or released | |
Weighted Average Exercise Price, Vested or released | $ / shares | |
Number of Shares, Forfeited | |
Weighted Average Remaining Term, Forfeited | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Number of Shares, Balance ending | 3,553,969 |
Weighted Average Remaining Contract Term, Balance ending | 4 years 2 months 1 day |
Weighted Average Excercise price, Balance ending | $ / shares | $ 1.51 |
Equity-Based Compensation (De_3
Equity-Based Compensation (Details) - Schedule of Stock Option Activity - Equity Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Stock Option Activity [Line Items] | |||
Number of Options, Balance beginning | 446,559 | ||
Weighted Average Exercise Price, Balance beginning | $ 8.88 | $ 9.67 | $ 9.86 |
Weighted Average Remaining Contract Term, Balance beginning | 8 years 29 days | 8 years 2 months 4 days | |
Number of Options, Granted | 1,500,000 | 701,893 | |
Weighted Average Exercise Price, Granted | |||
Weighted Average Remaining Contract Term, Granted | |||
Number of Options, Exercised | |||
Weighted Average Exercise Price, Exercised | |||
Weighted Average Remaining Contract Term, Exercised | |||
Number of Options, Forfeited | (2,628,333) | (957,001) | |
Weighted Average Exercise Price, Forfeited | |||
Weighted Average Remaining Contract Term, Forfeited | |||
Number of Options, Balance ending | 446,559 | 446,559 | |
Weighted Average Exercise Price, Balance ending | $ 8.88 | $ 8.88 | $ 9.67 |
Weighted Average Remaining Contract Term, Balance ending | 7 years 9 months 29 days | ||
Number of Options, Exercisable | 71,559 | 71,559 | |
Weighted Average Exercise Price, Exercisable | $ 3.03 | $ 3.03 | |
Weighted Average Remaining Contract Term, Exercisable | 8 years 5 months 1 day | 8 years 8 months 1 day |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes [Line Items] | ||||
Income tax expense or benefit | $ 0 | |||
Federal net operating loss carry forwards | $ 23,900,000 | $ 13,300,000 | ||
State net operating loss carry forwards | $ 9,100,000 | 2,200,000 | ||
Tax benefit percentage | 50% | |||
Unrecognized tax benefits |
Supplier and Customer Concent_2
Supplier and Customer Concentration (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Customer Concentration Risk [Member] | Revenue Benchmark [Member] | ||||
Supplier and Customer Concentration [Line Items] | ||||
Concentration risk | 100% | 100% | 100% | 100% |
Customer Concentration Risk [Member] | Customers [Member] | Revenue Benchmark [Member] | ||||
Supplier and Customer Concentration [Line Items] | ||||
Concentration risk | 81% | 73% | 74% | 58% |
Customer Concentration Risk [Member] | Customers [Member] | Accounts Receivable [Member] | ||||
Supplier and Customer Concentration [Line Items] | ||||
Concentration risk | 60% | 73% | 73% | 90% |
Supplier Concentration Risk [Member] | Inventory Purchases [Member] | Suppliers [Member] | ||||
Supplier and Customer Concentration [Line Items] | ||||
Concentration risk | 100% | 96% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
License Agreements [Member] | ||||
Commitments and Contingencies [Line Items] | ||||
Net expense | $ 0 | $ 120,000 | $ 1,000,500 | $ 380,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of Estimated Expense for the Sponsorship Agreements - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Estimated Expense for the Sponsorship Agreements [Abstract] | ||
2024 | $ 137,357 | $ 162,553 |
Legal Proceedings (Details)
Legal Proceedings (Details) - USD ($) | 12 Months Ended | ||
Jan. 25, 2024 | Dec. 31, 2023 | Mar. 31, 2024 | |
Legal Proceedings [Line Items] | |||
Cash payment | $ 1,250,000 | ||
Cash payment from insurance coverage | 805,000 | ||
Cash payment | $ 400,000 | ||
Common stock shares (in Shares) | 500,000 | 1 | |
Common stock shares forfeiture (in Shares) | 250,000 | ||
Mr. Michaels [Member] | |||
Legal Proceedings [Line Items] | |||
Awarding damage | $ 585,976.25 | ||
Ms. Anderson [Member] | |||
Legal Proceedings [Line Items] | |||
Common stock shares (in Shares) | 500,000 | ||
Subsequent Event [Member] | Mr. Michaels [Member] | |||
Legal Proceedings [Line Items] | |||
Awarding damage | $ 585,976.25 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 12 Months Ended | |
May 14, 2024 | Dec. 31, 2023 | |
Subsequent Events [Line Items] | ||
Additional shares (in Shares) | 6,785 | |
Gross proceeds | $ 678,500 | |
Termination fee | $ 1,000,000 | |
Termination expenses | $ 500,000 | |
Shareholders merger agreement percentage | 10% | |
Outstanding shares percentage | 38% | |
Fresh Vine [Member] | ||
Subsequent Events [Line Items] | ||
Termination fee | $ 1,000,000 | |
Termination expenses | $ 500,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of Percentages of Total Revenue Disaggregated by Sales - Customer Concentration Risk [Member] - Revenue Benchmark [Member] | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue percentages | 100% | 100% | 100% | 100% |
Wholesale [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue percentages | 27.20% | 70.60% | 72.70% | 57.70% |
Direct to consumer [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue percentages | 72.80% | 29.40% | 27.30% | 31.90% |
Related party service [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue percentages | 10.40% |
Loss Per Share (Details) - Sc_2
Loss Per Share (Details) - Schedule of Components of Diluted Shares - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | ||||
Net loss | $ (1,212,315) | $ (2,010,824) | $ (10,615,035) | $ (15,202,507) |
Less: dividends on preferred stock | 30,000 | 41,867 | ||
Net loss attributable to common stockholders | $ (1,242,315) | $ (2,010,824) | $ (10,656,902) | $ (15,202,507) |
Denominator: | ||||
Basic – weighted shares outstanding | 15,976,227 | 13,332,790 | 15,329,617 | 12,550,096 |
Dilutive effect from shares authorized | ||||
Diluted – weighted shares outstanding | 15,976,227 | 13,332,790 | 15,329,617 | 12,550,096 |
Basic loss per share | $ (0.08) | $ (0.15) | $ (0.69) | $ (1.21) |
Diluted loss per share | $ (0.08) | $ (0.15) | $ (0.69) | $ (1.21) |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of Inventories Consist - Inventories [Member] - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory [Line Items] | ||
Inventory – finished goods | $ 337,873 | $ 3,683,159 |
Inventory – merchandise | 13,039 | |
Total | $ 337,873 | $ 3,696,198 |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets (Details) - Schedule of Prepaid Expenses and Other Assets - Prepaid Expenses and Other Current Assets [Member] - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Prepaid Expenses and Other Assets (Details) - Schedule of Prepaid Expenses and Other Assets [Line Items] | ||
Prepaid marketing expenses - current | $ 9,871 | $ 313,000 |
Prepaid marketing expenses - long-term | 678,167 | |
Inventory deposits | 569,377 | |
Other prepaid expenses | 33,072 | 78,834 |
Total | $ 42,943 | $ 1,639,378 |
Accrued Compensation (Details)
Accrued Compensation (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities [Member] | ||
Accrued Compensation (Details) [Line Items] | ||
Accrued compensation | $ 0 | $ 420,413 |
Accrued Expenses (Details) - _2
Accrued Expenses (Details) - Schedule of Accrued Expenses - Accrued Expenses [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accrued Expenses (Details) - Schedule of Accrued Expenses [Line Items] | ||
Sponsorship agreements | $ 608,818 | $ 234,494 |
Accrued credit card charges | 7,275 | 21,013 |
Series A Stock dividends | 41,867 | |
Legal and professional | 125,704 | 89,200 |
Other accrued expenses | 27,059 | 78,224 |
Total | $ 810,723 | $ 422,931 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of Activity of the Series A Stock - Series A Preferred Stock [Member] - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Schedule of Activity of the Series A Stock [Line Items] | |||
Series A Stock shares issued | 10,000 | 10,000 | |
Net proceeds | $ 94,000 | $ 950,000 |
Stockholders' Equity (Details_4
Stockholders' Equity (Details) - Schedule of Accrued Dividends - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2023 | |
Schedule of Accrued Dividends [Abstract] | |||
Series A Stock | $ 71,867 | $ 41,867 | $ 41,867 |
Equity-Based Compensation (De_4
Equity-Based Compensation (Details) - Schedule of Restricted Stock Unit Activity - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Restricted Stock [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Shares, Balance beginning | 377,777 | |
Weighted Average Remaining Term, Balance beginning | 5 months 12 days | |
Number of Shares, Granted | 614,883 | 117,800 |
Weighted Average Remaining Term, Granted | 10 months 9 days | 3 months 29 days |
Number of Shares, Vested or released | (3,334) | |
Number of Shares, Forfeited | (614,883) | (495,577) |
Weighted Average Remaining Term, Forfeited | ||
Number of Shares, Balance ending | ||
Weighted Average Remaining Contract Term, Balance ending | ||
Restricted Stock Units (RSUs) [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Shares, Balance beginning | 6,666 | |
Weighted Average Remaining Term, Balance beginning | ||
Number of Shares, Granted | 1,641,332 | 110,000 |
Weighted Average Remaining Term, Granted | 6 months 25 days | 9 years 3 months 7 days |
Number of Shares, Vested or released | (570,000) | (36,668) |
Weighted Average Remaining Term, Vested or released | ||
Number of Shares, Forfeited | (1,057,998) | (66,667) |
Weighted Average Remaining Term, Forfeited | ||
Number of Shares, Balance ending | 20,000 | 6,666 |
Weighted Average Remaining Contract Term, Balance ending | 0 years | 10 months 24 days |
Vendor Stock Awards [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Shares, Balance beginning | 1,030,000 | |
Weighted Average Remaining Term, Balance beginning | ||
Number of Shares, Granted | 1,030,000 | |
Weighted Average Remaining Term, Granted | 2 years 3 months | |
Number of Shares, Vested or released | ||
Weighted Average Remaining Term, Vested or released | ||
Number of Shares, Forfeited | ||
Weighted Average Remaining Term, Forfeited | ||
Number of Shares, Balance ending | 1,030,000 | 1,030,000 |
Weighted Average Remaining Contract Term, Balance ending | 1 year 3 months | 2 years 3 months |
Warrant [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Number of Shares, Balance beginning | 110,000 | 110,000 |
Weighted Average Remaining Term, Balance beginning | 4 years 11 months 15 days | |
Number of Warrants, Balance beginning | $ 12 | $ 12 |
Number of Shares, Granted | 3,143,969 | |
Weighted Average Remaining Term, Granted | 5 years | |
Weighted Average Exercise Price, Granted | $ 1.25 | |
Number of Shares, Vested or released | ||
Weighted Average Remaining Term, Vested or released | ||
Weighted Average Excercise price, Vested or released | ||
Number of Shares, Forfeited | ||
Weighted Average Remaining Term, Forfeited | ||
Weighted Average Exercise Price, Forfeited | ||
Number of Shares, Balance ending | 3,253,969 | 110,000 |
Weighted Average Remaining Contract Term, Balance ending | 4 years 1 month 28 days | 3 years 8 months 15 days |
Weighted Average Excercise price, Balance ending | $ 1.61 | $ 12 |
Equity-Based Compensation (De_5
Equity-Based Compensation (Details) - Schedule of Stock Option Activity - Equity Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Number of Options, Balance beginning | 446,559 | 1,574,892 | 1,830,000 |
Weighted Average Exercise Price, Balance beginning | $ 8.88 | $ 9.67 | $ 9.86 |
Weighted Average Remaining Contract Term | 8 years 29 days | 8 years 2 months 4 days | |
Number of Options, Granted | 1,500,000 | 701,893 | |
Weighted Average Exercise Price, Granted | $ 0.5 | $ 3.37 | |
Weighted Average Remaining Contract Term, Granted | 5 years | 10 years | |
Number of Options, Exercised | |||
Weighted Average Exercise Price, Exercised | |||
Weighted Average Remaining Contract Term, Exercised | |||
Number of Options, Forfeited | (2,628,333) | (957,001) | |
Weighted Average Exercise Price, Forfeited | |||
Weighted Average Remaining Contract Term, Forfeited | |||
Number of Options, Balance ending | 446,559 | 1,574,892 | |
Weighted Average Exercise Price, Balance ending | $ 8.88 | $ 8.88 | $ 9.67 |
Weighted Average Remaining Contract Term, Balance ending | 8 years 29 days | 8 years 11 months 8 days | |
Number of Options, Exercisable | 71,559 | 71,559 | |
Weighted Average Exercise Price, Exercisable | $ 3.03 | $ 3.03 | |
Weighted Average Remaining Contract Term, Exercisable | 8 years 5 months 1 day | 8 years 8 months 1 day |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of Components of the Provision for Income Taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Components of the Provision For Income Taxes [Abstract] | ||
Current | ||
Deferred | ||
Total |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of Reconcilation of Tax Expense - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule of Reconcilation of Tax Expense [Abstract] | ||
Tax expense (benefit) at statutory rate, amount | $ (2,229,000) | $ (3,193,000) |
Tax expense (benefit) at statutory rate, percentage | 21% | 21% |
State income tax expense (benefit), net of federal tax effect, amount | $ (377,000) | $ (162,000) |
State income tax expense (benefit), net of federal tax effect, percentage | 3.60% | 1.10% |
Change in valuation allowance on deferred tax assets, amount | $ 2,360,000 | $ 3,355,000 |
Change in valuation allowance on deferred tax assets, percentage | (22.20%) | (22.10%) |
Stock award forfeiture, amount | $ 440,000 | |
Stock award forfeiture, percentage | (4.30%) | 0% |
Change in deferred tax rate, amount | $ (102,000) | |
Change in deferred tax rate, percentage | 1% | 0% |
Return to provision adjustments, amount | $ (92,000) | |
Return to provision adjustments, percentage | 0.90% | 0% |
Income tax expense (benefit), amount | ||
Income tax expense (benefit), percentage | 0% | 0% |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of Deferred Tax Assets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Deferred revenue | $ 1,000 | $ 3,000 |
Amortization | 1,000 | 1,000 |
Stock based compensation | 120,000 | 868,000 |
Net operating losses | 5,686,000 | 3,002,000 |
Inventory reserve | 27,000 | |
Accrued expenses | 407,000 | |
Prepaid expenses | (8,000) | |
Valuation allowance | (6,234,000) | (3,874,000) |
Net deferred tax assets: |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of Estimated Expense for the Sponsorship Agreements - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Schedule of Estimated Expense for the Sponsorship Agreements [Abstract] | ||
2024 | $ 137,357 | $ 162,553 |
Transactions with Related Par_3
Transactions with Related Parties (Details) - USD ($) | 12 Months Ended | |||||||
Jun. 13, 2022 | Apr. 30, 2022 | Jan. 31, 2022 | Jan. 01, 2022 | Oct. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Transactions with Related Parties [Line Items] | ||||||||
Management fee | $ 50,000 | |||||||
Service revenue related to agreement | $ 297,224 | |||||||
Purchase of inventory | 195,116 | |||||||
Expenses related to agreement | $ 275,000 | |||||||
Base compensation. | $ 5,000 | |||||||
Base compensation and commission expense | $ 40,000 | $ 90,000 | ||||||
Promissory Note [Member] | ||||||||
Transactions with Related Parties [Line Items] | ||||||||
Annual interest rate | 1% | 7% | ||||||
Interest accrued | $ 9,125 | $ 9,125 | ||||||
Repaid amount | $ 216,000 | |||||||
Minimum [Member] | ||||||||
Transactions with Related Parties [Line Items] | ||||||||
Products sold per share (in Dollars per share) | $ 5 | |||||||
Bonus commissions | 5,000 | |||||||
Maximum [Member] | ||||||||
Transactions with Related Parties [Line Items] | ||||||||
Products sold per share (in Dollars per share) | $ 6.5 | |||||||
Bonus commissions | $ 100,000 | |||||||
Damian Novak [Member] | ||||||||
Transactions with Related Parties [Line Items] | ||||||||
Consulting and advisory services | $ 25,000 | |||||||
Class F [Member] | Promissory Note [Member] | ||||||||
Transactions with Related Parties [Line Items] | ||||||||
Promissory note issued | $ 216,000 |
Transactions with Related Par_4
Transactions with Related Parties (Details) - Schedule of Shared Expenses - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Transactions with Related Parties (Details) - Schedule of Shared Expenses [Line Items] | ||
Total | $ 99,906 | |
Rent [Member] | ||
Transactions with Related Parties (Details) - Schedule of Shared Expenses [Line Items] | ||
Rent | 94,436 | |
Utilities [Member] | ||
Transactions with Related Parties (Details) - Schedule of Shared Expenses [Line Items] | ||
Utilities | $ 5,470 |