v3.25.1
SEGMENT REPORTING
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
SEGMENT REPORTING

6) 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 include retail sales in the tasting rooms, wine club sales, internet 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 (loss) 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 months ended March 31, 2025 and 2024. Sales figures are net of related excise taxes.

 

   Three Months Ended March 31, 
   Direct Sales   Distributor Sales   Unallocated   Total 
   2025   2024   2025   2024   2025   2024   2025   2024 
Sales, net  $4,310,474   $4,286,156   $3,231,109   $4,516,924   $-   $-   $7,541,583   $8,803,080 
Cost of Sales   1,185,593    1,295,145    1,596,882    2,235,213    -    -    2,782,475    3,530,358 
Gross Profit   3,124,881    2,991,011    1,634,227    2,281,711    -    -    4,759,108    5,272,722 
Selling and Marketing Expenses   3,086,255    3,263,381    640,035    504,424    241,420    259,977    3,967,710    4,027,782 
Contribution Margin  $38,626   $(272,370)  $994,192   $1,777,287                     
Percent of Sales   57.2%   48.7%   42.8%   51.3%                    
General and Administration Expenses                       1,661,376    1,847,517    1,661,376    1,847,517 
Loss from Operations                                $(869,978)  $(602,577)