Willamette Valley Vineyards (WVVI) 10-Q 11 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 11, 2016	Dec. 31, 2015
Document And Entity Information
Entity Registrant Name	WILLAMETTE VALLEY VINEYARDS INC
Entity Central Index Key	838,875
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		5,000,369
Entity Preferred Stock, Shares Outstanding	2,085,288	2,377,119	1,074,338
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,016

BALANCE SHEETS (unaudited)

BALANCE SHEETS (unaudited) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
CURRENT ASSETS
Cash and cash equivalents	$ 6,527,533	$ 4,010,664
Restricted cash (Note 1)	1,266,728	1,476,232
Accounts receivable, net	1,134,574	1,684,502
Inventories (Note 2)	10,406,014	10,632,462
Prepaid expenses and other current assets	416,689	131,173
Income tax receivable	62,158	204,513
Total current assets	19,813,696	18,139,546
Investment in Kore Wine Company	59,186	60,000
Vineyard development costs, net	4,236,634	3,699,947
Property and equipment, net (Note 3)	17,801,004	16,729,162
Debt issuance costs, net	48,030	50,221
TOTAL ASSETS	41,958,550	38,678,876
CURRENT LIABILITIES
Accounts payable	516,745	386,137
Accrued expenses	483,891	604,580
Investor deposits for preferred stock (Note1)	1,266,728	1,476,232
Current portion of note payable	245,417	245,417
Current portion of long term debt	359,325	349,003
Current portion of deferred revenue-distribution agreement	142,857	142,857
Unearned revenue	74,975	73,200
Grapes payable	0	816,879
Total current liabilities	3,089,938	4,094,305
Note payable, net of current portion	0	245,417
Long-term debt, net of current portion	4,641,808	4,824,015
Deferred rent liability	127,162	140,756
Deferred revenue-distribution agreement, net of current portion	166,653	238,083
Deferred gain	105,220	121,267
Deferred income taxes	1,848,000	1,848,000
Total liabilities	9,978,781	11,511,843
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Redeemable preferred stock, no par value, 10,000,000 shares authorized, 2,085,288 shares, liquidation preference $8,847,531, issued and outstanding at June 30, 2016 and 1,074,338 shares issued and outstanding at December 31, 2015 respectively.	$ 7,923,875	$ 3,735,437
Common stock, no par value, 10,000,000 shares authorized, 5,199,177 and 5,139,177 shares issued at June 30, 2016 and December 31, 2015, respectively, 5,002,369 and 4,989,216 shares outstanding at June 30, 2016 and December 31, 2015, respectively.	$ 9,869,158	$ 9,674,362
Retained earnings	15,204,312	14,432,836
Less: Common stock held in treasury, at cost, 196,808 and 149,961 shares at June 30, 2016 and December 31, 2015, respectively	(1,017,576)	(675,602)
Total shareholders' equity	31,979,769	27,167,033
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 41,958,550	$ 38,678,876

BALANCE SHEETS (Parenthetical)

BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
SHAREHOLDERS' EQUITY
Common stock, par value	$ 0	$ 0
Common stock, authorized shares	10,000,000	10,000,000
Common stock, issued shares	5,199,177	5,139,177
Common stock, outstanding shares	5,002,369	4,989,216
Common stock held in treasury	196,808	149,961
Preferred stock, par value	$ 0	$ 0
Preferred stock, authorized shares	10,000,000	10,000,000
Preferred stock, issued shares	2,085,288	1,074,338
Preferred stock, outstanding shares	2,085,288	1,074,338
Preferred stock, liquidation preference	$ 8,847,531

STATEMENTS OF OPERATIONS (unaud

STATEMENTS OF OPERATIONS (unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
SALES, NET	$ 4,639,028	$ 4,721,154	$ 8,822,797	$ 8,633,655
COST OF SALES	1,714,727	1,961,501	3,299,448	3,569,968
GROSS PROFIT	2,924,301	2,759,653	5,523,349	5,063,687
SELLING, GENERAL & ADMINISTRATIVE EXPENSES	2,096,097	1,914,769	3,953,069	3,720,136
INCOME FROM OPERATIONS	828,204	844,884	1,570,280	1,343,551
OTHER INCOME (EXPENSE)
Interest income	2,761	4	4,801	4
Interest expense	(72,154)	(77,975)	(145,165)	(155,009)
Other income, net	35,758	35,715	126,500	117,925
INCOME BEFORE INCOME TAXES	794,569	802,628	1,556,416	1,306,471
INCOME TAX PROVISION	(317,397)	(292,397)	(591,354)	(482,002)
NET INCOME	477,172	510,231	965,062	824,469
Accrued preferred stock dividends	(114,691)	0	(193,586)	0
INCOME APPLICABLE TO COMMON SHAREHOLDERS	$ 362,481	$ 510,231	$ 771,476	$ 824,469
Basic income per common share after preferred dividends	$ 0.07	$ 0.10	$ 0.15	$ 0.17
Diluted income per common share after preferred dividends	$ 0.07	$ 0.10	$ 0.15	$ 0.17
Weighted average number of basic common shares outstanding	4,999,514	4,908,605	4,993,324	4,896,289
Weighted average number of diluted common shares outstanding	5,003,583	4,983,207	4,997,304	4,965,954

STATEMENTS OF CASH FLOWS (unaud

STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 965,062	$ 824,469
Adjustments to reconcile net income to net cash: from operating activities
Depreciation and amortization	654,880	633,003
Stock based compensation expense	744	10,583
Non-cash loss from investment in Kore Wine Company	814	0
Deferred rent liability	(13,594)	(11,470)
Deferred gain	(16,047)	(16,048)
Change in operating assets and liabilities:
Accounts receivable	549,928	345,149
Inventories	226,448	718,827
Prepaid expenses and other current assets	(285,516)	(137,739)
Income taxes receivable	142,355	241,446
Unearned revenue	1,775	22,996
Deferred revenue-distribution agreement	(71,430)	(71,430)
Grapes payable	(816,879)	(698,851)
Accounts payable	(14,740)	(458,642)
Accrued expenses	(120,689)	29,401
Net cash from operating activities	1,203,111	1,431,694
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in Kore Wine Company	0	(60,000)
Additions to vineyard development costs	(496,903)	(297,799)
Additions to property and equipment	(1,618,967)	(1,549,326)
Net cash from investing activities	(2,115,870)	(1,907,125)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from installment note for property purchase	0	490,834
Proceeds from investor deposits held as restricted cash	209,504	0
Proceeds from investor deposits held as liability	(209,504)	0
Payment on installment note for property purchase	(245,417)	0
Payments on long-term debt	(171,885)	(162,665)
Proceeds from issuance of preferred stock	3,994,852	0
Proceeds from exercise of stock options	194,052	245,610
Repurchase of common stock	(341,974)	0
Net cash from financing activities	3,429,628	573,779
NET CHANGE IN CASH AND CASH EQUIVALENTS	2,516,869	98,348
CASH AND CASH EQUIVALENTS, beginning of period	4,010,664	519,761
CASH AND CASH EQUIVALENTS, end of period	6,527,533	618,109
NON-CASH INVESTING AND FINANCING ACTIVITIES
Purchases of property and equipment and vineyard development costs included in accounts payable	$ 161,436	$ 39,759

1. BASIS OF PRESENTATION

1. BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
NOTE 1. BASIS OF PRESENTATION	The accompanying unaudited interim financial statements as of June 30, 2016 and for the three and six months ended June 30, 2016 and 2015 have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements. The financial information as of December 31, 2015 is derived from the audited financial statements presented in the Willamette Valley Vineyards, Inc. (the “Company”) Annual Report on Form 10-K for the year ended December 31, 2015. Certain information or footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying financial statements include all adjustments necessary (which are of a normal recurring nature) for the fair statement of the results of the interim periods presented. The accompanying financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2015, as presented in the Company’s Annual Report on Form 10-K. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 2016, or any portion thereof. The Company’s revenues include direct-to-consumer sales and national sales to distributors. These sales channels utilize shared resources for production, selling and distribution. Basic earnings per share after preferred stock dividends are computed based on the weighted-average number of common shares outstanding each period. Diluted earnings per share are computed using the weighted average number of shares of common stock and dilutive common shares outstanding during the period. Dilutive shares from stock options and other instruments are excluded from the computation when their effect is anti-dilutive. There were no anti-dilutive shares outstanding as of June 30, 2016 and 2015. 4,069 and 74,602 potentially dilutive shares are included in the computation of dilutive earnings per share for the three month periods ended June 30, 2016 and 2015, respectively. 3,980 and 69,665 potentially dilutive shares are included in the computation of dilutive earnings per share for the six month periods ended June 30, 2016 and 2015, respectively. The following table presents the earnings per share after preferred stock dividends calculation for the periods shown: Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Numerator Net income $ 477,172 $ 510,231 $ 965,062 $ 824,469 Accrued preferred stock dividends (114,691 ) - (193,586 ) - Net income applicable to common shares $ 362,481 $ 510,231 $ 771,476 $ 824,469 Denominator Basic weighted average common shares 4,999,514 4,908,605 4,993,324 4,896,289 Dilutive stock options 4,069 74,602 3,980 69,665 Diluted weighted average common shares 5,003,583 4,983,207 4,997,304 4,965,954 Basic income per common share after preferred dividends $ 0.07 $ 0.10 $ 0.15 $ 0.17 Diluted income per common share after preferred dividends $ 0.07 $ 0.10 $ 0.15 $ 0.17 Restricted Cash In August 2015, the Company commenced a public offering of our Series A Redeemable Preferred Stock pursuant to a registration statement filed with the Securities and Exchange Commission. The Company also registered this transaction with the securities authorities of the States of Oregon and Washington. Under the terms of this agreement, the Company remits cash received for stock subscriptions to the transfer agent who holds those funds in escrow until released in accordance with the registration statement. As of June 30, 2016, the Company held restricted cash of $243,491 associated with funds for subscription agreements that had not yet been processed through the transfer agent. Additionally, the Company held restricted cash of $1,023,237 in escrow with the transfer agent for a total restricted cash of $1,266,728. The Company established a corresponding liability for this preferred stock funding.

2. INVENTORIES

2. INVENTORIES	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
NOTE 2. INVENTORIES	The Company’s inventories, by major classification, are summarized as follows, as of the dates shown: June 30, 2016 December 31, 2015 Winemaking and packaging materials $ 836,297 $ 690,292 Work-in-process (costs relating to unprocessed and/or unbottled wine products) 4,939,122 6,058,701 Finished goods (bottled wine and related products) 4,630,595 3,883,469 Current inventories $ 10,406,014 $ 10,632,462

3. PROPERTY AND EQUIPMENT

3. PROPERTY AND EQUIPMENT	6 Months Ended
	Jun. 30, 2016
Property, Plant and Equipment [Abstract]
NOTE 3. PROPERTY AND EQUIPMENT	The Company’s property and equipment consists of the following, as of the dates shown: June 30, 2016 December 31, 2015 Construction in progress $ 677,382 $ 482,284 Land, improvements and other buildings 6,434,633 5,089,472 Winery building and hospitality center 13,869,919 13,756,320 Equipment 9,065,826 9,055,987 30,047,760 28,384,063 Accumulated depreciation (12,246,756 ) (11,654,901 ) Property and equipment, net $ 17,801,004 $ 16,729,162 On June 22, 2016 the Company purchased approximately 53 acres of land, including 25 plantable acres, for future vineyard development. This purchase is part of the Company’s long term plan to increase the portion of grapes derived from its own vineyards in order to better control costs and quality as well as reduce grape supply risks. On May 28, 2016 the Company purchased an option to buy approximately 17 acres of land, including 15 acres of planted Pinot Noir, in the Dundee Hills AVA.

4. DISTRIBUTION AGREEMENT RECEI

4. DISTRIBUTION AGREEMENT RECEIVABLE AND DEFERRED REVENUE	6 Months Ended
	Jun. 30, 2016
Deferred Revenue Disclosure [Abstract]
NOTE 4. DISTRIBUTION AGREEMENT RECEIVABLE AND DEFERRED REVENUE	Effective September 1, 2011, the Company entered into an agreement with Young’s Market Company for distribution of Company-produced wines in Oregon and Washington. The terms of this contract include exclusive rights to distribute Willamette Valley Vineyard’s wines in Oregon and Washington for seven years. In an effort to facilitate the transition, with as little disruption as possible, Young’s Market Company agreed to compensate Willamette Valley Vineyards for ongoing Oregon sales and branding efforts. As a result, the Company received $250,000 in payments per year starting on September 2011 for each of the next four years for a total of $1,000,000. In October of 2014, the Company received payment of the final $250,000 under this agreement. The total amount of $1,000,000 received by the Company related to this agreement is being recognized as revenue on a straight line basis over the seven year life of the agreement. For the three months ended June 30, 2016 and 2015, the Company has recognized revenue related to this agreement in the amount of $35,715 and $35,715, respectively, recorded to other income. For the six months ended June 30, 2016 and 2015, the Company has recognized revenue related to this agreement in the amount of $71,430 and $71,430, respectively, recorded to other income.

5. DEBT

5. DEBT	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
NOTE 5. DEBT	Line of Credit Facility – The line of credit agreement includes various covenants which, among other things, require the Company to maintain minimum amounts of tangible net worth, debt/worth ratio, and debt service coverage as defined. As of June 30, 2016, the Company was in compliance with these financial covenants. Note payable Long Term Debt

6. STOCK BASED COMPENSATION

6. STOCK BASED COMPENSATION	6 Months Ended
	Jun. 30, 2016
Equity [Abstract]
NOTE 6. STOCK BASED COMPENSATION	The Company has a stock incentive plan, originally created in 1992, and most recently amended in 2001. No additional grants may be made under the plan. All stock options have an exercise price that is equal to the fair market value of the Company’s stock on the date the options were granted. Administration of the plan, including determination of the number, term, and type of options to be granted, lies with the Board of Directors or a duly authorized committee of the Board of Directors. Options were generally granted based on employee performance with vesting periods ranging from date of grant to seven years. At the date of the grant, the maximum term before expiration is ten years. The following table presents information related to the value of outstanding stock options for the period shown: Three months ended Six months ended June 30, 2016 June 30, 2016 Weighted Average Exercise Weighted Average Exercise Shares Price Shares Price Outstanding at beginning of period 30,157 $ 3.22 67,000 $ 3.22 Granted - - - - Exercised (23,157 ) 3.22 (60,000 ) 3.23 Forfeited - - - - Outstanding at end of period 7,000 $ 3.09 7,000 $ 3.09 At June 30, 2016, the Company had 7,000 unvested stock options with associated unrecognized compensation cost of $85 that will be recognized over a weighted-average period of 5.06 years. There were no stock options exercisable at June 30, 2016. The Company expenses stock options on a straight-line basis over the options’ related vesting term. Pretax compensation expense related to stock options for the three months ended June 30, 2016 and 2015 was $372 and $5,291, respectively. Pretax compensation expense related to stock options for the six months ended June 30, 2016 and 2015 was $744 and $10,583, respectively. Stock options exercised during the three months ended June 30, 2016 and 2015 were 23,157 and 27,971, respectively. Stock options exercised during the six months ended June 30, 2016 and 2015 were 60,000 and 57,971, respectively.

7. INTEREST AND TAXES PAID

7. INTEREST AND TAXES PAID	6 Months Ended
	Jun. 30, 2016
Other Income and Expenses [Abstract]
NOTE 7. INTEREST AND TAXES PAID	Income taxes Interest

8. SEGMENT REPORTING

8. SEGMENT REPORTING	6 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
NOTE 8. SEGMENT REPORTING	The Company has identified two operating segments, Direct Sales and Distributor Sales, based upon their different distribution channels, margins and selling strategies. Direct Sales includes retail sales in the tasting room and remote sites, Wine Club sales, on-site events, kitchen and catering sales and other sales made directly to the consumer without the use of an intermediary, including sales of bulk wine or grapes. Distributor Sales include all sales through a third party where prices are given at a wholesale rate. The two segments reflect how the Company’s operations are evaluated by senior management and the structure of its internal financial reporting. The Company evaluates performance based on the gross profit of the respective business segments. Selling expenses that can be directly attributable to the segment, including depreciation of segment specific assets, are included, however, centralized selling expenses and general and administrative expenses are not allocated between operating segments. Therefore, net income information for the respective segments is not available. Discrete financial information related to segment assets, other than segment specific depreciation associated with selling, is not available and that information continues to be aggregated. The following table outlines the sales, cost of sales, gross margin, directly attributable selling expenses, and contribution margin of the segments for the three and six month periods ending June 30, 2016 and 2015. Sales figures are net of related excise taxes. Three Months Ended June 30, Direct Sales Distributor Sales Total 2016 2015 2016 2015 2016 2015 Sales, net $ 1,565,355 $ 1,926,021 $ 3,073,673 $ 2,795,133 $ 4,639,028 $ 4,721,154 Cost of Sales 368,546 608,276 1,346,181 1,353,225 1,714,727 1,961,501 Gross Margin 1,196,809 1,317,745 1,727,492 1,441,908 2,924,301 2,759,653 Selling Expenses 835,714 758,364 451,558 404,825 1,287,272 1,163,189 Contribution Margin $ 361,095 $ 559,381 $ 1,275,934 $ 1,037,083 $ 1,637,029 $ 1,596,464 Percent of Sales 33.7 % 40.8 % 66.3 % 59.2 % 100.0 % 100.0 % Six Months Ended June 30, Direct Sales Distributor Sales Total 2016 2015 2016 2015 2016 2015 Sales, net $ 2,966,830 $ 3,382,585 $ 5,855,967 $ 5,251,070 $ 8,822,797 $ 8,633,655 Cost of Sales 695,712 1,014,417 2,603,736 2,555,551 3,299,448 3,569,968 Gross Margin 2,271,118 2,368,168 3,252,231 2,695,519 5,523,349 5,063,687 Selling Expenses 1,523,342 1,428,605 828,345 801,243 2,351,687 2,229,848 Contribution Margin $ 747,776 $ 939,563 $ 2,423,886 $ 1,894,276 $ 3,171,662 $ 2,833,839 Percent of Sales 33.6 % 39.2 % 66.4 % 60.8 % 100.0 % 100.0 % Direct sales include $0 and $390,825 of bulk wine sales in the three months ended June 30, 2016 and 2015, respectively. Direct sales include $0 and $639,701 of bulk wine sales in the six months ended June 30, 2016 and 2015, respectively.

9. SALE OF PREFERRED STOCK

9. SALE OF PREFERRED STOCK	6 Months Ended
	Jun. 30, 2016
Sale Of Preferred Stock
NOTE 9. SALE OF PREFERRED STOCK	In August 2015, the Company commenced a public offering of our Series A Redeemable Preferred Stock pursuant to a registration statement filed with the Securities and Exchange Commission. The preferred stock under this issue is non-voting and will rank senior in rights and preferences to the Company’s common stock. Shareholders of this issue will be entitled to receive dividends, when and as declared by the Company’s Board of Directors, at a rate of $0.22 per share. Dividends accrued but not paid will be added to the liquidation preference of the stock until the dividend is declared and paid. At any time after June 1, 2021, the Company has the option, but not the obligation, to redeem all of the outstanding preferred stock in an amount equal to the original issue price of $4.15 per share plus accrued but unpaid dividends and a redemption premium equal to 3% of the original issue price of $4.15 per share. The Company registered this transaction with the securities authorities of the States of Oregon and Washington and subsequently obtained a listing on the NASDAQ under the trading symbol WVVIP. This issue had an aggregate initial offering price not to exceed $6,000,000 and was fully subscribed as of December 31, 2015. On December 22, 2015 the Company filed a Registration Statement on Form S-3 with the SEC pertaining to the potential future issuance of one or more classes or series of debt, equity or derivative securities. On February 28, 2016 shareholders of the Series A Redeemable Preferred Stock approved an increase in shares designated as Series A Redeemable Preferred Stock, from 1,445,783 to 2,857,548 shares, and amended the certificate of designation for those shares to allow the Company’s Board of Directors to make future increases. On March 10, 2016 the Company filed a Prospectus Supplement to the December 2015 Form S-3, pursuant to which the Company proposed to offer and sell, on a delayed or continuous basis, up to 970,588 additional shares of Series A redeemable Preferred stock having proceeds not to exceed $4,125,000. This stock was established to be sold in four offering periods beginning with an offering price of $4.25 per share and concluding at $4.55 per share. The Company has sold substantially all preferred stock, available under this offering, as of June 30, 2016. Under the terms of this offering, proceeds from the sale of preferred stock for the three months ended June 30, 2016 were held in escrow until the stock was subsequently issued effective July 1, 2016. At June 30, 2016 $1,023,237 in stock sale proceeds were held in escrow and subsequently released to the Company in July 2016. As of June 30, 2016 the Company had on deposit $243,491 in investor stock subscription payments that had not completed processing. Total funds, held by the Company as restricted cash on June 30, 2016, were $1,266,728 associated with this offering.

10. COMMITMENTS AND CONTINGENCI

10. COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
NOTE 10. COMMITMENTS AND CONTINGENCIES	Litigation – From time to time, in the normal course of business, the Company is a party to legal proceedings. Management believes that these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows, but, due to the nature of litigation, the ultimate outcome of any potential actions cannot presently be determined.

1. BASIS OF PRESENTATION (Table

1. BASIS OF PRESENTATION (Tables)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Earnings Per Share	Three months ended June 30, Six months ended June 30, 2016 2015 2016 2015 Numerator Net income $ 477,172 $ 510,231 $ 965,062 $ 824,469 Accrued preferred stock dividends (114,691 ) - (193,586 ) - Net income applicable to common shares $ 362,481 $ 510,231 $ 771,476 $ 824,469 Denominator Basic weighted average common shares 4,999,514 4,908,605 4,993,324 4,896,289 Dilutive stock options 4,069 74,602 3,980 69,665 Diluted weighted average common shares 5,003,583 4,983,207 4,997,304 4,965,954 Basic income per common share after preferred dividends $ 0.07 $ 0.10 $ 0.15 $ 0.17 Diluted income per common share after preferred dividends $ 0.07 $ 0.10 $ 0.15 $ 0.17

2. INVENTORIES (Tables)

2. INVENTORIES (Tables)	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
Inventories	June 30, 2016 December 31, 2015 Winemaking and packaging materials $ 836,297 $ 690,292 Work-in-process (costs relating to unprocessed and/or unbottled wine products) 4,939,122 6,058,701 Finished goods (bottled wine and related products) 4,630,595 3,883,469 Current inventories $ 10,406,014 $ 10,632,462

3. PROPERTY AND EQUIPMENT (Tabl

3. PROPERTY AND EQUIPMENT (Tables)	6 Months Ended
	Jun. 30, 2016
Property, Plant and Equipment [Abstract]
Property and Equipment	June 30, 2016 December 31, 2015 Construction in progress $ 677,382 $ 482,284 Land, improvements and other buildings 6,434,633 5,089,472 Winery building and hospitality center 13,869,919 13,756,320 Equipment 9,065,826 9,055,987 30,047,760 28,384,063 Accumulated depreciation (12,246,756 ) (11,654,901 ) Property and equipment, net $ 17,801,004 $ 16,729,162

6. STOCK BASED COMPENSATION (Ta

6. STOCK BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2016
Equity [Abstract]
Value of outstanding stock options	Three months ended Six months ended June 30, 2016 June 30, 2016 Weighted Average Exercise Weighted Average Exercise Shares Price Shares Price Outstanding at beginning of period 30,157 $ 3.22 67,000 $ 3.22 Granted - - - - Exercised (23,157 ) 3.22 (60,000 ) 3.23 Forfeited - - - - Outstanding at end of period 7,000 $ 3.09 7,000 $ 3.09

8. SEGMENT REPORTING (Tables)

8. SEGMENT REPORTING (Tables)	6 Months Ended
	Jun. 30, 2016
Segment Reporting [Abstract]
SEGMENT REPORTING	Three Months Ended June 30, Direct Sales Distributor Sales Total 2016 2015 2016 2015 2016 2015 Sales, net $ 1,565,355 $ 1,926,021 $ 3,073,673 $ 2,795,133 $ 4,639,028 $ 4,721,154 Cost of Sales 368,546 608,276 1,346,181 1,353,225 1,714,727 1,961,501 Gross Margin 1,196,809 1,317,745 1,727,492 1,441,908 2,924,301 2,759,653 Selling Expenses 835,714 758,364 451,558 404,825 1,287,272 1,163,189 Contribution Margin $ 361,095 $ 559,381 $ 1,275,934 $ 1,037,083 $ 1,637,029 $ 1,596,464 Percent of Sales 33.7 % 40.8 % 66.3 % 59.2 % 100.0 % 100.0 % Six Months Ended June 30, Direct Sales Distributor Sales Total 2016 2015 2016 2015 2016 2015 Sales, net $ 2,966,830 $ 3,382,585 $ 5,855,967 $ 5,251,070 $ 8,822,797 $ 8,633,655 Cost of Sales 695,712 1,014,417 2,603,736 2,555,551 3,299,448 3,569,968 Gross Margin 2,271,118 2,368,168 3,252,231 2,695,519 5,523,349 5,063,687 Selling Expenses 1,523,342 1,428,605 828,345 801,243 2,351,687 2,229,848 Contribution Margin $ 747,776 $ 939,563 $ 2,423,886 $ 1,894,276 $ 3,171,662 $ 2,833,839 Percent of Sales 33.6 % 39.2 % 66.4 % 60.8 % 100.0 % 100.0 %

1. BASIS OF PRESENTATION (Detai

1. BASIS OF PRESENTATION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator
Net income	$ 477,172	$ 510,231	$ 965,062	$ 824,469
Accrued preferred stock dividends	(114,691)	0	(193,586)	0
Net income applicable to common shares	$ 362,481	$ 510,231	$ 771,476	$ 824,469
Denominator
Basic weighted average common shares	4,999,514	4,908,605	4,993,324	4,896,289
Dilutive stock options	4,069	74,602	3,980	69,665
Diluted weighted average common shares	5,003,583	4,983,207	4,997,304	4,965,954
Basic income per common share after preferred dividends	$ 0.07	$ 0.10	$ 0.15	$ 0.17
Diluted income per common share after preferred dividends	$ 0.07	$ 0.10	$ 0.15	$ 0.17

1. BASIS OF PRESENTATION (Det22

1. BASIS OF PRESENTATION (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accounting Policies [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share			0	0
Dilutive Securities included in computation of earnings per share	4,069	74,602	3,980	69,665

2. INVENTORIES (Details)

2. INVENTORIES (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Winemaking and packaging materials	$ 836,297	$ 690,292
Work-in-process (costs relating to unprocessed and/or unbottled wine products)	4,939,122	6,058,701
Finished goods (bottled wine and related products)	4,630,595	3,883,469
Current inventories	$ 10,406,014	$ 10,632,462

3. PROPERTY AND EQUIPMENT (Deta

3. PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Abstract]
Construction in progress	$ 677,382	$ 482,284
Land, improvements and other buildings	6,434,633	5,089,472
Winery building and hospitality center	13,869,919	13,756,320
Equipment	9,065,826	9,055,987
Total Property and Equipment	30,047,760	28,384,063
Accumulated depreciation	(12,246,756)	(11,654,901)
Property and equipment, net	$ 17,801,004	$ 16,729,162

4. DISTRIBUTION AGREEMENT REC25

4. DISTRIBUTION AGREEMENT RECEIVABLE AND DEFERRED REVENUE (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Deferred Revenue Disclosure [Abstract]
Distribution agreement receivable, revenue recognized during period	$ 35,715	$ 35,715	$ 71,430	$ 71,430

5. DEBT (Details Narrative)

5. DEBT (Details Narrative) - USD ($)	Jun. 30, 2016	Dec. 31, 2015
Umpqua [Member]
Debt Instrument [Line Items]
Aggregate Outstanding Balance	$ 0	$ 0
Interest rate	3.50%	3.50%
Walla Walla [Member]
Debt Instrument [Line Items]
Aggregate Outstanding Balance	$ 245,417	$ 490,834
Farm Credit Services [Member]
Debt Instrument [Line Items]
Aggregate Outstanding Balance	5,001,133	5,173,018
Monthly Minimum Payments	$ 53,058	$ 53,058
Interest rate minimum	4.75%	4.75%
Interest rate maximum	6.70%	6.70%

6. STOCK BASED COMPENSATION (De

6. STOCK BASED COMPENSATION (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Number of options
Outstanding at beginning of period	30,157		67,000
Granted	0		0
Exercised	(23,157)	(27,971)	(60,000)	(57,971)
Forfeited	0		0
Outstanding at end of period	7,000		7,000
Weighted average Price
Outstanding at beginning of period	$ 3.22		$ 3.22
Granted	0		0
Exercised	3.22		3.23
Forfeited	0		0
Outstanding at end of period	$ 3.09		$ 3.09

6. STOCK BASED COMPENSATION (28

6. STOCK BASED COMPENSATION (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Equity [Abstract]
Unrecognized compensation cost	$ 85		$ 85
Compensation expense related to stock options	$ 372	$ 5,291	$ 744	$ 10,583
Stock options exercised	23,157	27,971	60,000	57,971

7. INTEREST AND TAXES PAID (Det

7. INTEREST AND TAXES PAID (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Other Income and Expenses [Abstract]
Income taxes	$ 74,000	$ 139,000	$ 449,250	$ 240,550
Interest Paid	$ 72,964	$ 79,217	$ 146,467	$ 156,810

8. SEGMENT REPORTING (Details)

8. SEGMENT REPORTING (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Sales, net	$ 4,639,028	$ 4,721,154	$ 8,822,797	$ 8,633,655
Cost of Sales	1,714,727	1,961,501	3,299,448	3,569,968
Gross Margin	2,924,301	2,759,653	5,523,349	5,063,687
Selling Expenses	1,287,272	1,163,189	2,351,687	2,229,848
Contribution Margin	$ 1,637,029	$ 1,596,464	$ 3,171,662	$ 2,833,839
Percent of Sales	100.00%	100.00%	100.00%	100.00%
Direct Sales
Sales, net	$ 1,565,355	$ 1,926,021	$ 2,966,830	$ 3,382,585
Cost of Sales	368,546	608,276	695,712	1,014,417
Gross Margin	1,196,809	1,317,745	2,271,118	2,368,168
Selling Expenses	835,714	758,364	1,523,342	1,428,605
Contribution Margin	$ 361,095	$ 559,381	$ 747,776	$ 939,563
Percent of Sales	33.70%	40.80%	33.60%	39.20%
Distributor Sales
Sales, net	$ 3,073,673	$ 2,795,133	$ 5,855,967	$ 5,251,070
Cost of Sales	1,346,181	1,353,225	2,603,736	2,555,551
Gross Margin	1,727,492	1,441,908	3,252,231	2,695,519
Selling Expenses	451,558	404,825	828,345	801,243
Contribution Margin	$ 1,275,934	$ 1,037,083	$ 2,423,886	$ 1,894,276
Percent of Sales	66.30%	59.20%	66.40%	60.80%