SEGMENT REPORTING

3 Months Ended

Mar. 31, 2022

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 month periods ending March 31, 2022 and 2021. Sales figures are net of related excise taxes.

	Three Months Ended March 31,
	Direct Sales						Distributor Sales						Unallocated				Total
	2022			2021			2022			2021			2022		2021		2022			2021
Sales, net	$	2,957,308		$	2,306,184		$	3,285,010		$	3,459,154		$	-	$	-	$	6,242,318		$	5,765,338
Cost of Sales		748,292			537,732			1,773,997			1,734,039			-		-		2,522,289			2,271,771
Gross Margin		2,209,016			1,768,452			1,511,013			1,725,115			-		-		3,720,029			3,493,567
Selling Expenses		1,852,044			1,490,743			478,505			470,481			147,178		155,441		2,477,727			2,116,665
Contribution Margin	$	356,972		$	277,709		$	1,032,508		$	1,254,634
Percent of Sales		47.4	%		40.0	%		52.6	%		60.0	%
General and Administration														1,378,534		1,200,893		1,378,534			1,200,893
Income (loss) from Operations																	$	(136,232	)	$	176,009

Direct sales include $10,500 in bulk wine sales in the three months ended March 31, 2022 compared to no bulk wine sales in the three months ended March 31, 2021.