The Company has restated its condensed consolidated statements as of and for the three months ended September 30, 2022.

During the process of closing the second quarter ended December 31, 2022, classification of certain assets and the classification and timing of recording certain costs were identified by the Company's finance team that materially impacted our condensed consolidated financial statements for the three months ended September 30, 2022.

The correction led to a net decrease in previously recognized revenue of $0.6 million, an increase in cost of goods sold of $1.9 million, a decrease in selling, general and administrative expenses of $0.5 million, a loss on remeasurement of contingent liability of $0.8 million , an increase in stock-based compensation expense of $29 thousand for the three months ended September 30, 2022, a decrease in current assets of $1.3 million, an increase in current liabilities of $0.2 million and an increase in other long-term liabilities of $0.2 million as of, and for the period ended September 30, 2022. The net income tax effect of these corrections resulted in a reduction to our income tax provision of $1.5 million. After giving effect to these changes, diluted earnings per share allocable to common stockholders for the three months ended September 30, 2022 as previously reported was reduced by $0.02 to $0.00.

The following tables present the impact of the adjustments described above to our previously reported condensed consolidated balance sheets for the three months ended September 30, 2022, and the related condensed consolidated statements of operations, condensed consolidated statements of stockholders’ equity and condensed consolidated cash flows for the three months ended September 30, 2022.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share amounts)


	September 30, 2022
	As Previously Reported			Adjustments			As Restated

Assets
Current assets:
Cash	$	44,622		$	-		$	44,622
Restricted cash		-			-			-
Accounts receivable, net		38,424			-			38,424
Other receivables		3,071			803			3,874
Inventories		201,940			(1,181	)		200,759
Assets held for sale		6,553			-			6,553
Current interest rate swap asset		5,826			-			5,826
Prepaid expenses and other current assets		9,478			-			9,478
Total current assets		309,914			(378	)		309,536
Property, plant, and equipment, net		228,204			-			228,204
Operating lease right-of-use assets		35,509			-			35,509
Finance lease right-of-use-assets		689			-			689
Goodwill		154,951			-			154,951
Intangible assets, net		62,672			-			62,672
Interest rate swap asset		12,555			-			12,555
Other assets		5,187			-			5,187
Total assets	$	809,681		$	(378	)	$	809,303
Liabilities, redeemable noncontrolling interest, and stockholders' equity
Current liabilities:
Line of credit	$	140,066		$	-		$	140,066
Accounts payable		20,076			276			20,352
Accrued liabilities and other payables		27,867			412			28,279
Current operating lease liabilities		5,197			-			5,197
Current finance lease liabilities		263			-			263
Current maturities of long-term debt		14,738			-			14,738
Total current liabilities		208,207			688			208,895
Other long-term liabilities		6,140			175			6,315
Long-term debt, less current maturities		165,577			-			165,577
Long-term operating lease liabilities		31,637			-			31,637
Long-term finance lease liabilities		429			-			429
Deferred tax liability		29,952			-			29,952
Deferred gain		10,332			-			10,332
Total liabilities		452,274			863			453,137
Commitments and contingencies (Note 13)
Redeemable noncontrolling interest		1,282			-			1,282
Stockholders' equity:
Preferred stock, no par value, 2,000,000 shares authorized, and none issued and outstanding at September 30, 2022 and June 30, 2022.		-			-			-
Common stock, no par value, 200,000,000 shares authorized, 61,691,054 issued and 58,819,160 outstanding at September 30, 2022 and June 30, 2022.		-			-			-
Additional paid-in capital		382,347			29			382,376
Treasury stock, at cost: 2,871,894 shares held at September 30, 2022 and June 30, 2022, respectively.		(26,034	)		-			(26,034	)
Retained earnings (accumulated deficit)		406			(1,270	)		(864	)
Total Vintage Wine Estates, Inc. stockholders' equity		356,719			(1,241	)		355,478
Noncontrolling interests		(594	)		-			(594	)
Total stockholders' equity		356,125			(1,241	)		354,884
Total liabilities, redeemable noncontrolling interest, and stockholders' equity	$	809,681		$	(378	)	$	809,303

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

(in thousands, except share amounts)


	Three Months Ended September 30,
	2022
	As Previously Reported			Adjustments			As Restated
Net revenue
Wine, spirits and cider	$	52,052		$	(633	)	$	51,419
Nonwine		25,810			-			25,810
		77,862			(633	)		77,229
Cost of revenue								-
Wine, spirits and cider		34,522			109			34,631
Nonwine		13,192			1,746			14,938
		47,714			1,855			49,569
Gross profit		30,148			(2,488	)		27,660
Selling, general, and administrative expenses		34,244			(537	)		33,707
Amortization expense		1,811			-			1,811
Loss on remeasurement of contingent liability		-			826			826
Gain on litigation proceeds		(530	)		-			(530	)
Gain on sale leaseback		(334	)					(334	)
Gain on sale of property, plant, and equipment		(118	)		-			(118	)
(Loss) from operations		(4,925	)		(2,777	)		(7,702	)
Other income (expense)								-
Interest expense		(3,381	)		-			(3,381	)
Net unrealized gain on interest rate swap agreements		9,327			-			9,327
Other, net		271			-			271
Total other income (expense), net		6,217			-			6,217
Income (loss) before provision for income taxes		1,292			(2,777	)		(1,485	)
Income tax provision		658			(1,507	)		(849	)
Net income (loss)		634			(1,270	)		(636	)
Net loss attributable to the noncontrolling interests		(343	)		-			(343	)
Net income (loss) attributable to Vintage Wine Estates, Inc.		977			(1,270	)		(293	)
Accretion on redeemable Series B stock		-			-			-
Net income (loss) allocable to common stockholders	$	977		$	(1,270	)	$	(293	)

Net earnings (loss) per share allocable to common stockholders
Basic	$	0.02		$	(0.02	)	$	(0.00	)
Diluted	$	0.02		$	(0.02	)	$	(0.00	)
Weighted average shares used in the calculation of earnings per share allocable to common stockholders
Basic		58,819,160						58,819,160
Diluted		58,819,160						58,819,160

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

(in thousands, except share amounts)


	Redeemable Non-Controlling Interest Amount			Common Stock				Treasury Stock					Additional Paid-In Capital			Accumulated Deficit			Non-Controlling Interests			Total Stockholders' Equity
				Shares		Amount		Shares		Amount
Balance, June 30, 2022	$	1,663			61,691,054	$	-		2,871,894	$	(26,034	)	$	377,897		$	(571	)	$	(566	)	$	350,726
Stock-based compensation expense		-			-		-		-		-			4,622			-			-			4,622
Repurchase of public warrants		-			-		-		-		-			(172	)		-			-			(172	)
Shareholder distribution		(66	)		-		-		-		-			-			-			-			-
Net income (loss)		(315	)		-		-		-		-			-			977			(28	)		949
Adjustments														29			(1,270	)					(1,241	)
Balance, September 30, 2022, As Restated	$	1,282			61,691,054	$	-		2,871,894	$	(26,034	)	$	382,376		$	(864	)	$	(594	)	$	354,884

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands, except share amounts)


	Three Months Ended September 30,
	2022
	As Previously Reported			Adjustments			As Restated
Cash flows from operating activities
Net income (loss)	$	634		$	(1,270	)	$	(636	)
Adjustments to reconcile net income to net cash from operating activities:
Depreciation		3,215			-			3,215
Non-cash operating lease expense		37			-			37
Amortization expense		1,978			-			1,978
Remeasurement of contingent consideration liabilities		-			826			826
Stock-based compensation expense		4,622			29			4,651
Provision for doubtful accounts		(280	)		-			(280	)
Net unrealized gain on interest rate swap agreements		(9,327	)		-			(9,327	)
(Benefit) provision for deferred income tax		(27	)		-			(27	)
(Gain) on disposition of assets		(118	)		-			(118	)
Deferred gain on sale leaseback		(334	)		-			(334	)
Deferred rent		(2,079	)		-			(2,079	)
Change in operating assets and liabilities (net of effect of business combinations):					-			-
Accounts receivable		48			-			48
Other receivables		795			(803	)		(8	)
Inventories		(8,138	)		1,181			(6,957	)
Prepaid expenses and other current assets		3,916			-			3,916
Other assets		(1,766	)		(95	)		(1,861	)
Accounts payable		2,087			276			2,363
Accrued liabilities and other payables		5,532			(239	)		5,293
Net change in lease assets and liabilities		1,288			-			1,288
Net cash provided by (used in) operating activities		2,083			(95	)		1,988
Cash flows from investing activities
Proceeds from disposition of assets		-			-			-
Purchases of property, plant, and equipment		(3,454	)		-			(3,454	)
Label design expenditures		(95	)		95			-
Net cash used in investing activities		(3,549	)		95			(3,454	)
Cash flows from financing activities
Principal payments on line of credit		(34,466	)		-			(34,466	)
Proceeds from line of credit		30,317			-			30,317
Outstanding checks in excess of cash		4,042			-			4,042
Principal payments on long-term debt		(3,753	)		-			(3,753	)
Principal payments on finance leases		(67	)		-			(67	)
Distributions to noncontrolling interest		(66	)		-			(66	)
Repurchase of public warrants		(172	)		-			(172	)
Payments on acquisition payable		(39	)		-			(39	)
Net cash (used in) provided by financing activities		(4,204	)		-			(4,204	)
Net change in cash and restricted cash		(5,670	)		-			(5,670	)
Cash and restricted cash, beginning of period		50,292			-			50,292
Cash and restricted cash, end of period	$	44,622		$	-		$	44,622
Supplemental cash flow information
Cash paid during the period for:
Interest	$	3,187		$	-		$	3,187
Income taxes	$	-		$	-		$	-
Noncash investing and financing activities:					-
Increase in operating lease assets and liabilities upon adoption of ASC 842	$	36,776		$	-		$	36,776
Increase in finance lease assets and liabilities upon adoption of ASC 842	$	759		$	-		$	759