LQR House (YHC) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01Our business is materially dependent on the Bottled at Origin Joint Responsibility Agreement and the Shared Responsibility and Bonding Agreement
2. 02Our business, revenue, and operations are highly dependent on our relationship with CWS, and any disruption in that relationship could materially adversely affect our businessNew
3. 03We have a limited operating track record for certain aspects of our business, which may make it difficult to evaluate our growth prospects100% rewritten
4. 04Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern, and we will require additional capital to sustain our operationsNew
5. 05The Company may need to raise additional capital to support its operations
6. 06The Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business23% rewritten
7. 07The Company’s future revenue and operating results are unpredictable and may fluctuate significantly
8. 08We rely on a limited number of suppliers, or, in some cases, a sole supplier, and may not be able to find replacements or immediately transition to alternative suppliers
9. 09If demand for our products and services does not develop as expected our projected revenues and profits will be affected
10. 10If we fail to acquire and retain new customers, or fail to do so in a cost-effective manner, we may be unable to increase net revenues, improve margins and achieve profitability
11. 11We rely on other third parties to provide services essential to the success of our business
12. 12Reduced consumer demand for alcoholic beverages could harm our business
13. 13The success of our business relies heavily on brand image, reputation, and product quality
14. 14Changes in consumer spending could have a negative impact on our financial condition and business results
15. 15Our pursuit of opportunistic investments outside our core business has resulted in significant capital outlays, and similar future investments may result in lossesNew
16. 16We are pursuing a significant acquisition in a new line of business, which may expose us to substantial risks and uncertaintiesNew
17. 17Adverse public opinion about alcohol may harm our business
18. 18Increased regulatory costs or taxes would harm our financial performance
19. 19Our business may be adversely affected by political, trade, and regulatory developments, including changes in tariffs and international trade policiesNew
20. 20Changes in the prices of supplies and raw materials could have a materially adverse effect on our business
21. 21We are subject to risks associated with payments to us from our customers and other third parties, including risks associated with fraud
22. 22We may not be able to fully exploit newly acquired brands
23. 23Our proposed initial public offering of SWOL may not be completed and, if completed, would reduce our ownership interest and may result in a loss of control over SWOLNew
24. 24We operate in highly competitive industries, and competitive pressures could have a material adverse effect on our business
25. 25We are dependent on the continued services and performance of our senior management and other key employees, the loss of any of whom could adversely affect our business, operating results and financial condition
26. 26We may not be able to manage future growth effectively
27. 27If the Company fails to develop or protect its intellectual property adequately, the Company’s business could suffer
28. 28The Company’s products, services or processes could be subject to claims of infringement of the intellectual property of others
29. 29We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows
30. 30A failure or breach of our security systems or infrastructure as a result of cyberattacks could disrupt our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses
31. 31Current market conditions and recessionary pressures in one or more of the Company’s markets could impact the Company’s ability to grow its business

Risks Related to Government Regulation and Being a Public Company

1. 32We will face growing regulatory and compliance requirements which can be costly and time consuming
2. 33Our business could be negatively impacted by changes in the U.S. political environment
3. 34Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business
4. 35Our business could be affected by new governmental regulations regarding the Internet
5. 36Changes in laws and government regulations to which we are currently subject, including changes to the method or approach of enforcement, may increase our costs or limit our ability to market our alcohol brands and the brands of our clients, which could adversely affect our operating results and business
6. 37The requirements of being a public company may strain our resources
7. 38If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired
8. 39Our management team has limited experience managing a public company
9. 40Industry and other market data used in this or other periodic reports that we have filed or will in the future file with the SEC, including those undertaken by us or our engaged consultants, may not prove to be representative of current and future market conditions or future results

Risks Related to Ownership of Our Common Stock

1. 41An active trading market for our shares may not be sustained
2. 42Our stock price may be volatile, and purchasers of our common stock could incur substantial losses
3. 43Volatility in the market price of our common stock may prevent investors from being able to sell their shares at or above the initial public offering price. As a result, you may suffer a loss on your investment
4. 44If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the market price for the shares and trading volume could decline
5. 45We have never paid cash dividends on our stock and do not intend to pay cash dividends for the foreseeable future
6. 46Raising additional capital may cause dilution to our stockholders, or restrict our operations
7. 47We may issue additional debt and equity securities, which are senior to our common stock as to distributions and in liquidation, which could materially adversely affect the market price of our common stock
8. 48Enforcing legal liability against certain members of our Board and our senior management might be difficult
9. 49We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, and our stockholders could receive less information than they might expect to receive from more mature public companies
10. 50As a “smaller reporting company,” we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public stockholders
11. 51Future sales of substantial amounts of our common stock or securities convertible into or exchangeable or exercisable for shares of common stock, either by us or by our existing stockholders, or the possibility that such sales could occur, could adversely affect the market price of our common stock
12. 52Our share buyback program that was approved by the Board in September 2023 could affect our stock price and increase its volatility, and may reduce the market liquidity for our stock. The share buyback program may also materially impact the Company’s liquidity