# EDGAR Filing Document

**Accession Number:** 0001843165
**File Stem:** 0001213900-26-044131
**Filing Date:** 2026-4
**Character Count:** 487783
**Document Hash:** 11adbdf0ce7287600d30f71888b577b2
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-044131.hdr.sgml**: 20260415

**ACCESSION NUMBER**: 0001213900-26-044131

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 85

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260415

**DATE AS OF CHANGE**: 20260415

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LQR House Inc.
- **CENTRAL INDEX KEY:** 0001843165
- **STANDARD INDUSTRIAL CLASSIFICATION:** BEVERAGES [2080]
- **ORGANIZATION NAME:** 04 Manufacturing
- **EIN:** 661604197
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41778
- **FILM NUMBER:** 26864834

**BUSINESS ADDRESS:**
- **STREET 1:** 6538 COLLINS AVE SUITE 344
- **CITY:** MIAMI BEACH
- **STATE:** FL
- **ZIP:** 33141
- **BUSINESS PHONE:** (786) 389-9771

**MAIL ADDRESS:**
- **STREET 1:** 6538 COLLINS AVE SUITE 344
- **CITY:** MIAMI BEACH
- **STATE:** FL
- **ZIP:** 33141

?xml version='1.0' encoding='ASCII'? lqr-20251231

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-K**

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended **December 31, 2025**

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number: 001-41778

**LQR House Inc.**

(Exact name of registrant as specified in its charter)

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| | |
|:---|:---|
| Delaware | 86-1604197 |
| (State or other jurisdiction of<br> incorporation or organization) | (I.R.S. Employer<br> Identification No.) |

---

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **6538 Collins Ave. Suite 344** | **6538 Collins Ave. Suite 344** | **6538 Collins Ave. Suite 344** | **5306 Six Forks Rd Ste 107 PMB1290** | **5306 Six Forks Rd Ste 107 PMB1290** | **5306 Six Forks Rd Ste 107 PMB1290** |
| **Miami Beach,** | **Florida** | **33141** | **Raleigh,** | **NC** | **27609** |
| **(Address of principal executive offices)** | **(Address of principal executive offices)** | **(Zip Code)** | **(Address of principal executive offices)** | **(Address of principal executive offices)** | **(Zip Code)** |

---

(Address of principal executive offices, including zip code)

**Tel: (786) 389-9771**

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, $0.0001 par value per share | YHC | The Nasdaq Stock Market LLC |

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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," "smaller reporting company," and emerging growth company in Rule 12b-2 of the Exchange Act.

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| | | | |
|:---|:---|:---|:---|
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ |
|  |  | Emerging growth company | ☒ |

---

If an emerging growth company, indicate by check mark if this registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2025, the last business day of its most recently completed second fiscal quarter, was $4,475,628 based on the closing price of the registrant's common stock as reported by The Nasdaq Capital Market on that date.

As of April 15, 2026, the Company had 21,371,656 shares of common stock, $0.0001 par value, issued and 21,366,209 shares outstanding.

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| [PART I](#lqr_001) |  |  |
| &nbsp;&nbsp;&nbsp;Item 1. | [Business](#lqr_002) | 1 |
| &nbsp;&nbsp;&nbsp;Item 1A. | [Risk Factors](#lqr_003) | 16 |
| &nbsp;&nbsp;&nbsp;Item 1B. | [Unresolved Staff Comments](#lqr_004) | 36 |
| &nbsp;&nbsp;&nbsp;Item 1C. | [Cybersecurity](#lqr_005) | 36 |
| &nbsp;&nbsp;&nbsp;Item 2. | [Properties](#lqr_006) | 37 |
| &nbsp;&nbsp;&nbsp;Item 3. | [Legal Proceedings](#lqr_007) | 37 |
| &nbsp;&nbsp;&nbsp;Item 4. | [Mine Safety Disclosures](#lqr_008) | 37 |
| [PART II](#lqr_009) |  |  |
| &nbsp;&nbsp;&nbsp;Item 5. | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#lqr_010) | 38 |
| &nbsp;&nbsp;&nbsp;Item 6. | [Reserved](#a_001) | 41 |
| &nbsp;&nbsp;&nbsp;Item 7. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#lqr_011) | 41 |
| &nbsp;&nbsp;&nbsp;Item 7A. | [Quantitative and Qualitative Disclosures About Market Risk](#lqr_012) | 46 |
| &nbsp;&nbsp;&nbsp;Item 8. | [Financial Statements and Supplementary Data](#lqr_013) | 46 |
| &nbsp;&nbsp;&nbsp;Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#lqr_014) | 47 |
| &nbsp;&nbsp;&nbsp;Item 9A. | [Controls and Procedures](#lqr_015) | 47 |
| &nbsp;&nbsp;&nbsp;Item 9B. | [Other Information](#lqr_016) | 48 |
| &nbsp;&nbsp;&nbsp;Item 9C. | [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](#lqr_017) | 48 |
| [PART III](#lqr_018) |  |  |
| &nbsp;&nbsp;&nbsp;Item 10. | [Directors, Executive Officers and Corporate Governance](#lqr_019) | 49 |
| &nbsp;&nbsp;&nbsp;Item 11. | [Executive Compensation](#lqr_020) | 55 |
| &nbsp;&nbsp;&nbsp;Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#lqr_021) | 60 |
| &nbsp;&nbsp;&nbsp;Item 13. | [Certain Relationships and Related Transactions, and Director Independence](#lqr_022) | 61 |
| &nbsp;&nbsp;&nbsp;Item 14. | [Principal Accountant Fees and Services](#lqr_023) | 63 |
| [PART IV](#lqr_024) |  |  |
| &nbsp;&nbsp;&nbsp;Item 15. | [Exhibits and Financial Statement Schedules](#lqr_025) | 64 |
| &nbsp;&nbsp;&nbsp;Item 16. | [Form 10-K Summary](#lqr_026) | 64 |

---

i

**IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY**

As a company with less than $1.235 billion in revenue during our most recently completed fiscal year, we qualify as an "emerging growth company" as defined in Section 2(a) of the Securities Act of 1933, as amended, (the "Securities Act,") as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As an emerging growth company, we may take advantage of specified reduced disclosure and other exemptions from requirements that are otherwise applicable to public companies that are not emerging growth companies. These provisions include:

● Reduced disclosure about our executive compensation arrangements;

● Exemptions from non-binding shareholder advisory votes on executive compensation or golden parachute; and

● Exemption from auditor attestation requirement in the assessment of our internal control over financial reporting.

We will remain an emerging growth company until the earliest of (i) the last day of the year in which we have total annual gross revenue of $1.235 billion or more; (ii) the last day of the year following the fifth anniversary of the first sale of the common equity securities pursuant to an effective registration under the Securities Act; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

ii

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends impacting the financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.

Forward-looking statements include all statements that are not historical facts. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expect," "intend," "seek," "plan," "anticipate," "believe," "estimate," "project," "predict," "potential," "might," "forecast," "continue," or the negative of those terms, and similar expressions and comparable terminology intended to reference future periods. Forward-looking statements include, but are not limited to, statements about:

● our ability to introduce new products and services;

● our ability to obtain additional funding to develop additional products, services and offerings;

● compliance with obligations under intellectual property licenses with third parties;

● market acceptance of our new offerings;

● competition from existing online offerings or new offerings that may emerge;

● our ability to establish or maintain collaborations, licensing or other arrangements;

● our ability and third parties' abilities to protect intellectual property rights;

● our ability to adequately support future growth;

● our goals and strategies;

● our future business development, financial condition and results of operations;

● expected changes in our revenue, costs or expenditures;

● growth of and competition trends in our industry;

● the accuracy and completeness of the data underlying our or third-party sources' industry and market analyses and projections;

● our expectations regarding demand for, and market acceptance of, our products and services;

● our expectations regarding our relationships with investors, institutional funding partners and other parties with whom we collaborate;

● fluctuations in general economic and business conditions in the markets in which we operate; and

● relevant government policies and regulations relating to our industry.

Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Accordingly, the forward-looking statements in this Annual Report on Form 10-K should not be regarded as representations that the results or conditions described in such statements will occur or that our objectives and plans will be achieved, and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements.

iii

**PART I**

*References in this Annual Report on Form 10-K to "we," "us," "LQR House," "LQR," "Company," or "our company" are to LQR House Inc., a Delaware corporation, References to "management" or our "management team" are to our officers and directors.*

**ITEM 1. BUSINESS**

**Overview**

Our company, LQR House Inc., a Delaware corporation ("LQR", "LQR House", or the "Company"), intends to become a prominent force in the wine and spirits e-commerce, sector epitomized by its flagship alcohol marketplace, CWSpirits.com ("CWS Platform"). This platform delivers a diverse range of spirits, wines, and champagnes from esteemed retail partners like Country Wine & Spirits. Beyond its role in the e-commerce sector, LQR is a marketing agency with a specialized focus on the alcohol industry. We also intend to integrate the supply, sales, and marketing facets of the alcoholic beverage space into one easy to use platform and become the one-stop-shop for everything related to alcohol. To date, our core business includes e-commerce sales in the United States through CWSpirits.com, growing our in-house tequila brand SWOL Tequila, and developing marketing strategies for external brands. These strategies include banner ads on our site, targeted email campaigns, and influencer marketing, all designed to drive product awareness and sales.

**Our Organization**

Our company was incorporated in the State of Delaware on January 11, 2021, under the name LQR House Inc. On February 3, 2023, we changed our state of incorporation to the State of Nevada by merging into LQR House Inc., a Nevada corporation. On March 2, 2026, we reincorporated in the State of Delaware through a statutory conversion. The Company conducts its operations through three wholly-owned subsidiaries: LQR House Acquisition Corp., which owns and operates the CWS Platform; SWOL Holdings Inc., which develops and markets SWOL Tequila; and YHC Online Limited, a Hong Kong incorporated entity through which the Company entered into joint venture agreements in December 2025, as further described under Recent Developments below.

In May 2024, we acquired a minority stake of common shares of Cannon Estate Winery Ltd. ("Cannon"), a British Columbia corporation, an owner of Cannon Estate Winery. Pursuant to the Share Exchange Agreement between the Company and Cannon, Cannon transferred and delivered to the Company 113,085 of the Common Shares of Cannon held of record and beneficially by Cannon and in exchange the Company issued and delivered to Cannon 750,000 shares of the Company's common stock ("common stock"). Cannon Estate Winery located at 30523 Burgess Ave. in the Mount Lehman area of Abbotsford, British Columbia. The estate boasts 20 acres under vine, with 16 varietals planted across 23 plots, including Chardonnay, Muscat, Petite Milo, Pinot Noir, and Gamay Noir. According to its management, Cannon Estate Winery has become a local gem, recently expanding to include a lounge for hosting both locals, and wine enthusiasts from across the globe. While LQR House and Cannon Estate Winery operate in different areas of the alcohol industry, the Company believes that the synergy between them promises mutual benefits that will propel both entities to new heights. LQR House works on leveraging its expertise to enhance Cannon's online presence, extending its reach across borders to the USA and captivating the attention of U.S. alcohol enthusiasts. Cannon Estate Winery, with its established relationships with distributors and retail outlets nationwide, aims to expand LQR House's brands and marketing clients throughout Canada.

In June 2024, we acquired a minority stake of common shares of DRNK Beverage Corp. ("DRNK"), a British Columbia corporation, operating in the non-alcoholic and ready-to-drink beverage markets. DRNK has since rebranded and operates as Chase Mocktails Ltd. (drnkchase.com), an active company in the non-alcoholic ready-to-drink beverage category, a sector that continues to experience significant growth. LQR House's investment in DRNK marked its strategic entry into both the non-alcoholic (NA) and ready-to-drink (RTD) beverage markets, two rapidly growing sectors within the beverage industry.

**Recent Developments**

On April 1, 2025, we entered into a Supplementary Distribution Agreement (the "Supplementary Distribution Agreement") with Of The Earth Distribution Corp., a Canadian corporation (the "Distributor"), pursuant to which the Company granted to Distributor the exclusive right to distribute, market, and sell SWOL Tequila products within Thailand and Greece until June 28, 2029. The Supplementary Distribution Agreement also amends Supplier Agreement between the Company and the Distributor, dated June 28, 2024, by providing the Distributor exclusive distribution rights to sell SWOL Tequila in all of Canada without any territorial limitations.

On April 2, 2025, David Lazar resigned as President and as member of our Board of Directors (the "Board"), effective immediately.

On April 21, 2025, the Company effected a one-for-thirty-five reverse stock split of its issued, outstanding and authorized common stock (the "Reverse Stock Split"). As a result of the Reverse Stock Split, the total number of authorized common stock of the Company decreased to 10,000,000 shares. The Reverse Stock Split became effective at 12:01 a.m. Eastern Time on April 21, 2025, and our common stock began trading on a post-split basis on April 21, 2025. No fractional shares were issued in connection with the Reverse Stock Split and fractional amounts were rounded up to the next highest whole number at the participant level.

On April 23, 2025, the Audit Committee of the Board accepted the resignation of dbbmckennon and approved the engagement of Enrome LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2025, effective immediately.

On June 2, 2025, the Company held LQR House Inc. 2025 Annual Meeting of Stockholders (the "Annual Meeting") at which meeting: (1) the Company's stockholders approved an amendment to the Articles of Incorporation to authorize the Company to effect the increase of authorized shares of common stock of the Company from 10,000,000 to 350,000,000 shares, (2) the stockholders re-elected Sean Dollinger, Yilin Lu, Lijun Chen, Jing Lu, and Hong Chun Yeung to serve as directors of the Board until the Company's 2026 annual meeting of stockholders, or until such persons' successors are duly elected and qualified, or until such persons' earlier resignation, death, or removal.

Following the Annual Meeting, on June 2, 2025, the Company filed the Certificate of Amendment with the Secretary of State of Nevada and effected the increase of the number of authorized shares of common stock of the Company from 10,000,000 shares to 350,000,000 shares, each share of common stock having a par value of $0.0001.

Following the Annual Meeting, the Board approved appointment of Lijun Chen as the Chairman of the Board. The Board also approved that the Audit Committee of the Board shall consist of Hong Chun Yeung (Chair), Lijun Chen and Jing Lu, the Compensation Committee of the Board shall consist of Jing Lu (Chair), Yilin Lu, Lijun Chen, and Nominating and Corporate Governance Committee of the Board shall consist of Jing Lu (Chair), Lijun Chen, Yilin Lu.

On or about July 11, 2025, the Company, along with over two dozen parties including several officers and directors of the Company, was named as a defendant in an action before the Eighth Judicial District Court, Clark County, Nevada titled Kingbird Ventures, LLC ("*Kingbird*") v. Sean Dollinger, et al. The complaint sought damages in an unspecified amount by a recent shareholder of the Company. Along with the complaint, Kingbird filed a motion for the Court to appoint a receiver over the Company and for an injunction. On September 22, 2025, the Company entered into two settlement agreements with Kingbird and other parties named therein to resolve all matters related to this litigation (collectively, the "Settlement Agreements"). The First Settlement Agreement resolved the direct claims asserted by Kingbird against the Company and other defendants and provided for dismissal of those claims with prejudice, mutual releases among the parties and customary provisions, including no admission of liability and confidentiality. The Second Settlement Agreement resolved stockholder derivative claims brought on behalf of the Company against certain current and former officers and directors and provided for dismissal of those claims, subject to court approval, together with mutual releases and customary provisions. As of the date of this Annual Report, the matter has been fully resolved and no claims remain pending. Pursuant to the Settlement Agreements, a total payment of $7.5 million was paid in September 2025 and the remaining payment of $5.5 million was paid in December 2025.

On August 6, 2025, the Board appointed Yilin Lu to serve as a President of the Company and replaced him on the Compensation Committee and Nominating and Corporate Governance Committee with Hong Chun Yeung.

In December 2025, YHC Online Limited ("YHC"), a wholly-owned subsidiary of the Company, entered into joint venture agreements with Bancroft Equity Limited, Emerald Wealth Inc., Meridian Financial Solutions Inc., and Sequoia Equity Group Inc. to cooperate in the creation and monetization of multi-channel network ("MCN") content for digital platforms, including TikTok, with each arrangement targeting a specific geographic market. YHC holds a 20% minority ownership interest in each of the three formed joint ventures, with the majority partner in each retaining full operational control. The Company's aggregate investment commitment across the three formed joint ventures is $19,000,000, of which $14,670,000 had been funded as of December 31, 2025. In addition, $3,824,000 had been advanced to Sequoia Equity Group Inc. toward the establishment of a planned joint venture targeting the Middle East market, the entity for which had not yet been formed as of December 31, 2025, and is recorded as an advance for investment in joint venture on the consolidated balance sheet.

Each agreement provides YHC with a put right, exercisable following the first anniversary of the respective agreement, pursuant to which YHC may require the co-venturer to repurchase YHC's interest at a price equal to YHC's total funded investment amount. Subsequent to December 31, 2025, in April 2026, all four agreements were terminated and all amounts previously funded, aggregating $18,494,000, were returned to YHC in full.

On September 2, 2025, we entered into a Contribution Agreement (the "Contribution Agreement") with SWOL Holdings Inc., our wholly owned subsidiary. Among other things, the Contribution Agreement provides for the contribution by us to SWOL of all of our assets, properties and rights, whether tangible or intangible, personal or mixed, accrued, unaccrued or contingent (including goodwill), wherever located and whether now existing or hereafter acquired prior to the closing of the Contribution Agreement, related to, used or held for use in connection with the business of producing, marketing and distributing a limited-edition Anejo Tequila under the SWOL trademark ("SWOL Tequila") in exchange for two (2) million shares of SWOL's common stock.

On October 15, 2025, Dr. Jing Lu resigned from the Company's Board of Directors and all associated committees. The resignation was not due to any disagreement with the Company, its management, or operations. On October 20, 2025, the Board appointed Mr. Kah Loong Randy Yeo as a new independent director. Mr. Yeo was also designated as Chair of the Nominating and Corporate Governance and Audit Committees and as a member of the Compensation Committee.

On December 17, 2025, the Company entered into securities purchase agreements (the "*Purchase Agreements*") with certain investors (the "*Investors*"), and directors, officers and employees of the Company (the "Insiders" together with the Investors, the "Purchasers") for the purchase and sale of an aggregate of 7,249,972 shares of the Company's common stock (the "*Shares*") in a registered direct offering (the "*Offering*"). The Shares were sold at a purchase price of $0.90 per share, for aggregate gross proceeds to the Company of approximately $6,524,974.80, before deducting placement agent fees and expenses and net proceeds of $6,078,701. Pursuant to a placement agency agreement (the "*Placement Agency Agreement*") dated as of December 17, 2025, between the Company and A.G.P./Alliance Global Partners, the Company engaged the A.G.P. to act as the Company's sole placement agent in connection with the Offering. Pursuant to the Placement Agency Agreement, the Company agreed to pay the Placement Agent a cash fee equal to five percent (5.0%) of the gross proceeds received by the Company from the sale of the Shares to the Purchasers. The offering closed on December 19, 2025.

On January 27, 2026, SWOL filed a registration statement on Form S-1 with the Securities and Exchange Commission (the "SEC") in connection with a proposed initial public offering of SWOL's equity securities. The registration statement has not yet been declared effective, and the Company cannot assure that the offering will be completed on the terms currently contemplated, or at all. The Company continues to evaluate the timing, structure and potential benefits of the proposed offering, including its impact on the Company's operations, financial condition and ownership interest in SWOL. The Company had $203,950 in deferred offering costs related to this registration statement as of December 31, 2025.

On March 2, 2026, the Company held a special meeting of stockholders, at which stockholders approved proposals to reincorporate the Company from the State of Nevada to the State of Delaware, to increase the number of authorized shares of common stock from 350,000,000 to 1,500,000,000, to authorize the Board of Directors of the Company to effect one or more reverse stock splits of the Company's common stock at a ratio in the range of 1-for-40 to 1-for-800 at any time prior to or on February 23, 2028, and to re-elect Hong Chun Yeung, Yilin Lu, Lijun Chen and Kah Loong Randy Yeo and to elect Hon Kit Anthony Kwong to serve until the Company's 2027 annual meeting of stockholders and until their successors are duly elected and qualified.

On March 2, 2026, the Company filed the articles of conversion with the State of Nevada and a certificate of conversion and certificate of incorporation with the State of Delaware to effect the reincorporation as a Delaware corporation.

On April 11, 2026, the Company entered into a share purchase agreement with Fusion Five Continents Securities Limited, a New Zealand limited company (the "Target Company"), and with the Target Company's controlling shareholder, pursuant to which the Company agreed to acquire all of the issued and outstanding shares of the Target Company in multiple closings, at a total consideration of $126,880,000. An initial payment of $28,080,000 in Tether (USDT) will be made no later than April 24, 2026 for 24% of the Target Company's ordinary shares. The acquisition of the remaining shares is subject to required regulatory approvals, after which the Company will acquire the remaining Target Company shares in one or more subsequent closings for an aggregate purchase price of $98,800,000.

**Our Business** 

LQR House owns 100% of CWS Platform, an online marketplace offering a comprehensive range of alcohol-related products to customers across the United States, while presently not extending its services to Canada and Mexico. We acquired the CWS Platform from Ssquared Spirits, LLC ("Ssquared") on November 1, 2023, pursuant to the Domain Name Transfer Agreement (the "Domain Name Transfer Agreement"), which ensures that we have permanent control over all aspects of the CWS Platform, notwithstanding the term or any other provisions of the Marketing Agreement described below. Our company places a significant emphasis on direct-to-consumer marketing, leveraging various channels such as social media, email campaigns, and both paid and organic digital strategies. Additionally, LQR House has cultivated its own network of influencers, effectively positioning brands in front of a dedicated audience and boasting a proven track record of increasing sales on CWSpirits.com. Effective November 1, 2023, LQR House secured full control of the CWS Platform through the Domain Name Transfer Agreement, ensuring perpetual oversight independent of previous contractual terms. Ssquared, previously responsible for product management and platform maintenance, has transitioned these duties to us. Pursuant to the Management Agreement (as defined below), KBROS, LLC ("KBROS") is responsible for the fulfillment, and distribution of all products sold on the CWS Platform. On November 1, 2023, the Company entered into the Product Handling Agreement (the "Product Handling Agreement") and the Funding Commitment Agreement (the "Funding Commitment Agreement" and collectively with the Product Handling Agreement, the "Management Agreement") with KBROS.

Under the Product Handling Agreement, KBROS provides the Company with the following services relating to the purchase and delivery of spirits and other beverage products purchased by customers of the Company through or in relation to websites associated with the CWS Platform:

● purchase of products to be delivered to customers of the Company, delivery of such products, and related receipt of returns of products and delivery of replacements of the products from time to time, necessary for the operation of the business by the Company, pursuant to orders for the products by the Company's customers generated as the result of sales, promotion and marketing of the products through the CWS Platform; and

● procurement and maintenance of all certificates, licenses, authorizations and registrations required to import, possess, promote, sell, distribute and receive payment for the products and compliance with all laws, rules and regulations applicable thereto and to the operation of the CWS Platform and conduct of sales and processing of the products, as reasonably deemed necessary by the Company.

Under the Funding Commitment Agreement, the Company commits to providing annual funding to KBROS from time to time in the minimum amount of $2,500,000 to enable KBROS to purchase inventory from Company-approved vendors. The Company may, without notice to KBROS, elect not to advance funding for any inventory sold by any particular vendor with respect to which the Company reasonably feels insecure. The Funding Commitment Agreement concerns a funding commitment, and not the purchase of products from KBROS or vendors.

LQR also had a key partnership with Country Wine & Spirits, Inc. ("CWS"). Pursuant to an Exclusive Marketing Agreement (the "Marketing Agreement") dated April 1, 2021 among CWS, Ssquared and us, Ssquared and CWS granted us the exclusive right, until April 1, 2031, to promote and market spirits, other beverage products and related products including but not limited to branded merchandise, apparel, glassware and the like through the CWS Platform for sale to customers with billing and shipping addresses within Canada, Mexico and the United States. At this time, CWS Platform does not service customers in Canada and Mexico. Prior to our acquisition of CWS Platform in November 2023, the Marketing Agreement also provided us with the sole right to manage and make decisions with regard to user-facing content on the CWS Platform, including the placement and removal of products and the creation and management of promotional initiatives. Upon acquisition of the CWS Platform, this Exclusive Marketing Agreement was effectively cancelled. LQR House is responsible for all digital marketing of products offered on the CWS Platform, including social media marketing and cooperation with their influencer network. Ssquared, KBROS, and CWS are responsible for product management on the CWS Platform and ensuring that there is always inventory available on the site and the site is always live and accessible to its customers.

On March 19, 2021, we purchased the SWOL brand of tequila from Dollinger Innovations Inc., Dollinger Holdings LLC and Sean Dollinger pursuant to an Asset Purchase Agreement (the "Tequila Asset Purchase Agreement"). SWOL is manufactured at our request in Mexico by a local manufacturer who we contract with. We also contract with Rilo Import & Export ("Rilo") who we engage to import SWOL from Mexico to CWS in the United States. CWS pays us for its orders of SWOL, and we pay a portion of such amounts to the local manufacturer to produce SWOL and to Rilo to import SWOL. However, it is important to note that we do not engage in the sale of alcoholic products in the United States or the distribution of any alcoholic products anywhere.

In accordance with the Tequila Asset Purchase Agreement, the Company became an assignee to that certain Shared Responsibility and Bonding Agreement dated March 19, 2021, between Leticia Hermosillo Ravelero ("Producer") and Dollinger Innovations Inc., (the "Shared Responsibility and Bonding Agreement"). In connection with this assignment, on July 7, 2023, the Company, Dollinger Innovations Inc. and the Producer signed a ratification of the agreement of assignment of rights of the Shared Responsibility and Bonding Agreement, which required registration with the Mexican Institute of Industrial Property. As of March 31, 2026, such registration was completed and the Company has rights to enforce its authorization for the denomination of origin and trademark rights. Pursuant to the Shared Responsibility and Bonding Agreement, the Producer produces and supplies to LQR House an alcoholic beverage "Tequila made 100% of agave" labeled "SWOL" and LQR House facilitates the distribution of this product in collaboration with Rilo. The Producer manufactures exclusively for Dollinger Innovations Inc. "Tequila Anejo" and "Tequila 100% De Agave". The Shared Responsibility and Bonding Agreement as between the original parties, the Producer, and Dollinger Innovations Inc., became effective on August 6, 2021, which is the date of its registration with the Mexican Institute of Industrial Property. The cost and amount of each batch of tequila produced will be determined in advance of the production of each batch by agreement between Producer and the Company. The agreement prohibits distribution and marketing of the product supplied by the Producer in bulk. The Shared Responsibility and Bonding Agreement will terminate on August 6, 2026, unless terminated prior to that date by joint agreement with at least 30 days advance written notice.

On June 30, 2023, pursuant to an assignment agreement, Dollinger Innovations Inc., Dollinger Holdings LLC, and Sean Dollinger assigned their rights as distributor under the Packaging of Origin Co-Responsibility Agreement dated July 6, 2020 (the "Packaging of Origin Co-Responsibility Agreement") to the Company. Subsequent to that on July 11, 2023, the Producer and LQR House signed a Bottled at Origin Joint Responsibility Agreement (the "Bottled at Origin Joint Responsibility Agreement"), which required registration with the Mexican institute of Industrial Property. As of March 31, 2026, such registration was completed and the Company has rights to enforce its authorization for the denomination of origin and trademark rights. Under that agreement, the Producer supplies to the Company, bottled at origin product that strictly complies with the "Official Tequila Standard" (as defined in the agreement) and allows the Company to use the word "Tequila" or "Tequila 100% Agave" on the SWOL brand. The Producer also supplies exclusively to the Company Tequila Anejo and tequila flavored in accordance with the orders submitted by the Company. In its turn, the Company agrees to use the "Tequila Denomination of Origin" and to distribute the product of the same name, supplied by the Producer exclusively in containers bearing the SWOL trademark, used to distinguish and identify the alcoholic beverage called "TEQUILA". The agreement came into force on the date when it is registered by the Mexican Institute of Industrial Property and is entered for indefinite term. The agreement can be terminated by mutual agreement of the parties. The agreement will also automatically be terminated in case of failure by either party to comply with the "Official Tequila Standard" as that will result in the suspension or cancellation of the export certificates issued by the regulatory Council of Tequila, A.C. Both agreements require that the tequila supplied by the Producer comply with the Mexican Official Tequila Standard.

LQR House has made a significant move in the realm of e-commerce with its acquisition of the CWS Platform, an online platform in the wine and spirits industry in the USA. With this purchase, LQR House gained full ownership of one of the most established websites in the field, boasting a dedicated customer base of over 125,000. Leveraging their expertise in website management, design, development, email marketing, and SEO, LQR House worked on enhancing sales on the platform, offering a diverse array of products including new releases, limited editions, celebrity-affiliated brands, cocktail content, and gift options. This acquisition marked a departure from previous marketing arrangements with Country Wine & Spirits, providing LQR House with direct control over the platform's operations and facilitating improved access for both marketing clients and alcohol suppliers. Notably, product handling, packaging, and shipping for purchases made on the CWS Platform remains the responsibility of KBROS, the owner of Country Wine and Spirits' brick-and-mortar locations. LQR House's acquisition of the CWS Platform signified a strategic move towards bolstering its presence in the online alcohol retail market, offering consumers across the nation an enhanced shopping experience.

In June 2024, we entered into a supplier agreement with Of The Earth Distribution Corp. providing them with exclusive rights to sell SWOL Tequila in several provinces of Canada, including Quebec, Ontario, Prince Edward Island, Nova Scotia, Newfoundland, and New Brunswick. In the fourth quarter of 2024, SWOL Tequila, a premium brand fully owned by LQR House, successfully completed a rigorous product analysis by the Liquor Control Board of Ontario (LCBO), clearing the way for distribution across Ontario under the LCBO's regulatory oversight. This approval marked the Company's entry into the Canadian market, starting with a purchase order from Of The Earth Distribution Corp.

**Country Wine & Spirits, Inc.**

CWS was formed in 2003 to buy and acquire distressed brick and mortar retail locations for the sale of beer, wine, spirits and create value in retail locations throughout Southern California and grew to 10 locations by 2013. In 2013 CWS found a demand for online shipping of alcohol and started to focus more on e-commerce. Around 2019, our Chief Executive Officer, Sean Dollinger and Dollinger Innovations began assisting CWS with the development of its e-commerce operations.With their help, CWS began online alcohol sales and built the business into a sizable alcohol e-commerce company. Today CWS has 6 brick and mortar locations and specializes in logistics of shipping and helping brands reach customers. CWS's average brick and mortar store is 3000-5000 square feet in prestigious neighborhoods and offer brands that customers have a hard time sourcing. LQR House has no ownership interest in any of CWS's brick and mortar retail locations. To date CWS has distributed all of the alcohol ordered by customers through the CWS Platform.

**KBROS, LLC**

KBROS was founded in 2013 and is an asset management company that specializes in managing e-commerce platforms and real estate and sourcing of logistic companies. The President of CWS, Shawn Kattoula, is also the 100% owner of KBROS.

**Our Business Model**

Since our inception in January 2021, we have put our business model to the test and believe it is our path towards future success. First, we create marketing content on the CWS Platform for our brands and the brands of our marketing services clients. Second, when consumers purchase products on the CWS Platform like tequila with our SWOL brand, a subscription to Vault, or the products of our marketing service clients, CWS will perform the distribution services related to the sale of those products. Simultaneously, Ssquared will manage the backend e-commerce operations related to the CWS Platform. Our company is the only authorized advertiser on the CWS Platform and derive significant revenue from all sales made to our marketing partners via the CWS Platform and subscriptions offered through the CWS Platform. Moreover, we derive significant revenue from the sale of alcohol that bears our SWOL trademark. The objective of these activities is to generate recurring monthly revenue through subscriptions and product placements.

We believe that our business model will result in multiple, highly sustainable revenue sources and an opportunity to capitalize on the growth in demand for liquor in the United States. To date, sales of alcoholic beverages have been generated through our exclusive arrangement with CWS, who sells these products. This includes third-party brands hiring the Company to market their alcoholic beverage products, subscriptions through our membership programs, and the product sale of tequila branded with our trademark, "SWOL," bearing application number 2345291 and registration number 2141431 (registered in Mexico). We intend to further diversify our revenue streams and anticipate that the diversity of our revenue streams will continue to grow as our internal brands gain market recognition and penetration, our marketing services abilities become well known, and our subscription services become popular.

**Our Historical Performance**

The Company's independent registered public accounting firm has expressed substantial doubt as to the Company's ability to continue as a going concern. During the years ended December 31, 2025 and 2024, we had net losses of $25,522,618 and $22,754,178, respectively.

During the year ended December 31, 2025, the Company raised significant capital through multiple transactions: (i) net proceeds of $43,199,134 from the sale of common stock pursuant to its at-the-market ("ATM") offering program; (ii) net proceeds of $6,078,701 from the sale of common stock pursuant to registered direct offerings; and (iii) proceeds of $4,051,415 from the exercise of warrants. However, the Company expects that its cash and cash equivalents of $5,975,408 as of December 31, 2025 may not be sufficient to fund its operating expenses and potential acquisition and investment plans for at least one year. The Company's ability to continue as a going concern for the next twelve months is dependent upon its ability to generate sufficient cash flows from operations to meet its obligations, which it has not been able to accomplish to date, or to obtain additional capital financing to support current negative cash flow trends. No assurance can be given that the Company will be successful in these efforts.

For further discussion, see "*Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Going Concern*".

**Industry Overview**

We plan to address market demand by aligning with key industry trends and by utilizing strategic relationships to source, brand, finance and distribute products. Specifically, we focus on tequila, wine, and other specialty products by utilizing e-commerce and technology to drive sales. The market for alcohol includes beverages such as spirits, wines, and beer. Our focus is on the United States market.

The alcoholic beverages market is expected to grow by around 37% by 2028 to over 2.1 trillion U.S. dollars in value from 2022's value of 1.53 trillion dollars. The United States represents one of the largest global markets for all alcoholic beverage category sales (Statista, *Alcoholic Drinks - Market Size*, November 2024). This demonstrates a considerable amount of consumption and a large and stable market that is continuing to evolve. Spirits and wine accounted for approximately 50.6% of total consumption as of January 2023 (Statista, *Alcoholic Drinks - Revenue - United States*, January 2023).

Moreover, we believe e-commerce is increasingly becoming a driver of demand for at-home consumption of alcoholic products, driven in part by the recent pandemic. Due to this shift, people who used to go to a bar or a restaurant to consume alcohol are now buying products increasingly online or even going to the manufacturer directly where the law permits, and we believe that this trend will continue even as the impact of the pandemic begins to lessen. We also believe that this demonstrates great potential for continued market expansion and the relevance of e-commerce platforms for alcohol. In particular, the United States has shown a strong uptrend in the purchase of alcohol online, as set forth in the chart below (Vaimo, Martin Hjalm, *Alcohol Ecommerce: Trends, Strategies, and Markets in 2023*, January 2023). Total global online retail sales are expected to reach $8.148 trillion in 2026. Digital retail sales increased 17.1% between 2020 and 2021, largely due to the COVID-19 pandemic. Growth slowed to 9.7% the following year. Between now and 2026, online retail sales are expected to record a 9.26% CAGR. By 2026, they could make up 24% of total global retail sales (Emarketer, Ethan Cramer-Flood, *Worldwide Ecommerce Forecast Update 2022*, July 2022).

In addition to sustained demand for the largest product categories (beer, wine and spirits) and increased prominence of e-commerce, the demand for quality and novel products continues to increase as well (Forbes, Joseph Micallef, *The Top Ten Trends Shaping The Adult Beverage Market In 2021*, January 2021). Within this market, the consumption of products is increasing due to several market trends, including the demand for new categories of beverages, such as specialty spirits, flavored wines and sparkling wines, and premixed carbonated drinks. A survey of 1,600 adult U.S. consumers by PwC Consumer Segment Survey sets forth this trend with 54% of those buying alcoholic beverages responding, "I am buying new brands even when my usual brands are available" (PwC, *M&A breathes new life into brand portfolios for spirits companies*, 2021) as opposed to only 47% of those buying non-alcoholic beverages.

The market is also being impacted by health-conscious trends, as evidenced by the growing demand for functional, low-alcohol, and alcohol-free beverages as well as organic and sustainable options. Customers now find it simpler to buy alcoholic beverages online thanks to the market's additional transformation brought about by the e-commerce boom. Consumer tastes are also still influenced by social and cultural trends, such as the rising appeal of cocktail culture and experience drinking. The United States continues to be a vital market for producers of alcoholic beverages despite obstacles. Customers are also more willing to try novel and inventive alcoholic beverages, which encourages more experimentation with ingredients, flavors, and brewing and distilling methods. (Research and Markets, *Alcoholic Beverages Market Trends and Forecast Report 2025-2033: Revenues to Grow by Nearly $1 Trillion,* March 2025).

If recent trends continue, the year ahead should continue to see "ready-to-drink" alcoholic beverages ("RTDs") grow faster than any other segment of the spirits category. It has outpaced all other segments by wide growth rates for several years running. One of the key trends to watch in 2025 is a continued shift to more premium spirits-based RTDs. According to the Distilled Spirits Council of the U.S. (DISCUS), canned cocktails have grown faster than any other spirit segment - 35.8% by revenue from 2021-2022. Spirits have a lot of room to grow in RTDs, as they only comprise 13% of the market, compared to 86% malt-based and only a sliver, 1%, wine-based. The second fastest-growing spirits category has been agave, mainly tequila and mezcal, which grew by 17.2% from 2021-2022. In 2025, the vast number of tequila fans are expected to continue to branch out into other agave-based or related beverages like sotol and raicilla (Crafted, *What's Shaping Bev-Alc in 2025? Key Trends to Watch*, February 2025).

**Market Trends**

According to the recent IWSR research (IWSR, *Five Key Trends Shifting the Beverage Alcohol Market in 2025*, February 2025), after persistent inflation, geopolitical tensions and varying levels of consumer confidence characterized 2024, the next 12 months will be marked by continued economic uncertainty, but also a number of promising growth opportunities. In IWSR article, Emily Neill, Chief Operating Officer Research and Operations of IWSR, says that "the drinks industry faces a subdued but opportunity-rich environment in 2025. Channel shifts offer a note of optimism, with the on-premise showing nascent growth in some key markets, and digital platforms wielding a growing influence on both online and offline purchasing decisions. As these key trends shape the beverage alcohol landscape in 2025, they start to frame some key growth segments and markets for the industry. Navigating these will require growth opportunities to be assessed on a market, category and price-tier basis, with a more nuanced approach than was previously needed."

We believe the following trends will continue to shape the alcoholic beverage market (IWSR, *Five Key Trends Shifting the Beverage Alcohol Market in 2025*, February 2025; Auguste Escoffier School of Culinary Arts, *2025 Alcohol and Beverage Trends: Key Statistics on What's Pouring in Bars and Homes,* January 2025):

● The rise of casual consumption.

According to Richard Halstead, Chief Operating Officer Consumer Insights and Custom Analytics of IWSR, "the shift from formal, high-profile drinking occasions to more casual and spontaneous settings is transforming the beverage alcohol landscape - especially for categories such as rosé wine, Prosecco, bitters and spirit aperitifs. Changing social norms, economic constraints and a preference for relaxed, versatile beverages are driving this shift." In the US, Prosecco and RTDs are proving popular at brunches, barbecues and informal gatherings, replacing more expensive options such as Champagne.

● Channel shifts impacting purchasing decisions.

Digital platforms are now playing a pivotal role in driving offline sales, with more consumers turning to online research to guide their in-store purchases. According to IWSR research, 63% of online alcohol buyers conduct extensive research before making a purchase - a trend increasingly echoed by offline shoppers.

● Ready-to-Drink Beverages.

RTDs are one of the fastest growing segments in the industry-and, that trend is likely to continue. Increasingly, higher end RTD cocktails are entering the market, giving people the opportunity to try high quality products without going to a bar or studying mixology.

● Agave-Based Spirits.

In recent years, Americans' appetite for these Mexican spirits has proven to be nearly insatiable. In 2023 tequila overtook whiskey to become the second-most consumed spirit by value in the U.S.-and in 2024, tequila outsold vodka in the U.S. bars. One industry review found that 54% of bars said tequila outperformed all other liquors last year, and 64% of bars are planning to offer more tequila (and other agave spirits) compared to other liquors in the year to come.

● Premiumization.

In recent years the alcohol industry has seen a trend toward premiumization-the consumer habit of spending more on fewer purchases of higher quality products. This concept goes hand in hand with the trend of consumers drinking less; if people are drinking less, and on fewer occasions, they may be willing to spend more when they do decide to imbibe. Young people seem more inclined to premium habits than older groups. According to a report from Curren Goodden Associates (CGA), 54% of 18-34-year-olds are likely to choose a premium drink versus 35% of those over 55. Similarly, a survey conducted by Bacardi in 2023 found that 41% of U.S. consumers between the ages of 21 and 44 planned to "seek more premium spirits" in 2024.

We anticipate all these market trends will positively impact our business and present an opportunity to continue expanding. Specifically, we align with market trends by focusing our marketing and distribution efforts online, and we expect to bring new and exciting premium products to market across categories. In addition, we generate online promotional activities around holidays and life events, while always being mindful of ethically sourcing products for distribution.

**The Services and Brands**

**The CWS Platform** is an American online retailer specializing in selling alcohol products, striving to become the most trusted and convenient destination for online alcohol purchases. Combining the personalized service of a neighborhood alcohol shop with the efficiency of e-commerce, we offer a wide selection of products, including our exclusive brand, SWOL Tequila, all at competitive prices with fast shipping and around-the-clock convenience. At the heart of our brand is a commitment to exceptional customer service, driving us to continuously innovate our operations for an enhanced shopping experience. From user-friendly website navigation and a top-rated mobile app to detailed order tracking and personalized product recommendations, we are revolutionizing the online alcohol shopping experience, ensuring customer satisfaction remains paramount in all our endeavors.

We provide marketing services with respect to the following products and services. Marketing these brands constitutes the core elements of our business model and allow us to serve every type of customer in the alcohol industry, including individual consumers, wholesalers, and third-party alcohol brands:

***SWOL Tequila*** is a limited-edition blend of Añejo Tequila made in exclusive batches of up to 10,000 bottles and represents the first installment under our "SWOL" trademarked alcohol branding. Through our partnership with CWS, we market Tequila bearing the "SWOL" trademark, which we call "SWOL Tequila," on the CWS Platform, which distributes SWOL Tequila throughout the United States. SWOL Tequila is produced by Casa Cava de Oro S.A., an authentic tequila distillery in Jalisco, Mexico, sold by LQR House to CWS before it is imported from Mexico into the United States, and is imported into the United States by Rilo in cooperation with CWS. All marketing and branding for SWOL Tequila is led by our marketing team, who has led the way on all branding efforts from conceptualizing the bottle shape and size, to overseeing the design of the labels. We also work with the producers in Mexico on all product development, including the original SWOL Añejo and the additions of Peach and Cristalino.

When product testing was initiated for the label with the trademark SWOL on it, which we call "SWOL," a campaign was created around a "Mystery Tequila" where CWS's network of influencers promoted SWOL without showing the bottle or label. We believe that this marketing tactic generated customer excitement for the product and led to an increase in anticipation for its reveal. Since then, we have seen continuous growth in SWOL customer interest and have taken steps to expand the product line to match that interest. With each product, we focus on creating unique labels, each with the signature SWOL sew-on patch, which accompanies each hand-numbered bottle. The patch can be peeled off and sewn onto clothing or accessories.

We believe that our focus on our brand identity and product innovation will allow us to continue generating consumer interest and hype for each addition to the product line bearing the SWOL trademark. Moreover, SWOL has been developed to align with current consumer preferences and trends within the market. Essentially, we generate SWOL products that maintain the high-quality ingredients from the Tequila region of Mexico and combine that tradition of quality with new and exciting flavors. CWS Platform is offering the following products bearing the SWOL trademark at competitive price points:

● <u>SWOL Añejo Tequila</u> is an extremely limited-edition tequila that is bottled in glass blown flasks inscribed with a unique ID number and adorned with our patch that displays a unique label specific to the Añejo Tequila line. Each bottle contains a tequila produced using artisanal Mexican and modern techniques that impart each drink with a smoky, rich, sweet flavor. The SWOL Añejo Tequila is currently priced at $89.99 (MRSP).

● <u>SWOL Peach Tequila</u> is an amber, dark coppery tequila that is bottled in glass blown flasks inscribed with a unique ID number and adorned with our patch that displays a unique label specific to the Peach Tequila line. The production imparts an authentic tequila taste with notes of peach, toasted nuts and oak. Through market analysis and sales data, our peach products are often in high demand, and we expect this trend to continue. The SWOL Peach Tequila is currently priced at $79.99 (MRSP).

● <u>SWOL Cristalino Tequila</u> is a crystalline tequila bottled glass blown flasks, inscribed with a unique ID number and adorned with our patch that displays a unique label specific to the Cristalino Tequila line. The tequila displays light blue crystalline flashes and production imparts an authentic tequila taste with notes of fruity oak, toasted nuts and light spice. The SWOL Cristalino Tequila is currently priced at $79.99 (MRSP).

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***Vault*** is an exclusive membership program for CWS Platform customers. Through the CWS Platform, users can sign up for this exclusive membership where they will have access to all products available through CWS combined with special membership benefits including: (i) 10% off all products site wide, including sale items; (ii) exclusive access to redeem loyalty points to use for further discounts on purchases; (iii) free ground shipping (2-5 business days) on orders over $100 (limited to three shipping addresses, not valid for corporate orders); (iv) access to special promotional offers; and (v) free mystery vault gifts. The monthly membership costs customers $19.95 and requires an initial 6-month start-up commitment. The objective is to create a loyal customer base that provides us with recurring monthly subscription revenue. Vault also provides us with the means to provide customers with special discounts to marketing partner brands, which we make solely available to Vault members. We market this membership program on the CWS Platform.

***LQR House Marketing*** is a marketing service in which we utilize our marketing expertise to help our wholly owned brands and third-party clients market their products to consumers. For example, by engaging LQR House for its marketing services, our clients gain the ability to advertise and sell their brand on the CWS Platform. We generally charge a monthly fee for our marketing services and often enter into multi-month programs with clients. Monthly program costs generally range from $3,000 to $10,000 depending on the program options selected by the client. Our services also include the creation of a creative marketing campaign strategy, and the development of promotional materials. Key features of the marketing offering include:

● Leveraging multiple advertising campaigns to bring affordability to advertising methods such as influencer marketing, incentive-based sales, or product placement advertising.

● Combining multiple campaigns into one media buy.

● Leveraging specific assets available to LQR House such as the CWS Platform and email distribution list.

● Advertising with targeted banners.

● Leveraging LQR House online campaigns.

● Creating branding and product placement campaigns that elevate a brand's reach to targeted demographics.

● Creating a brand around an influencer's following and reach to leverage viewership and monetize their growth.

Central to the business model, we offer access to an exclusive network of industry influencers or brand ambassadors. Engaging with us provides clients with the opportunity to select a tailored list of influencers to promote their brand to an ideal target market. LQR House currently has relationships with over 240 influencers, which is a significant differentiator and underscores the uniqueness of our company as a marketing platform. Influencers are provided with a commission based on the number of products they sell and drive traffic to the CWS Platform. The more an influencer generates in sales for a brand, the more the influencer makes in commissions. This directly aligns the objectives of the brand, influencer and LQR House. Key elements of a typical influencer program may include:

● Best efforts to maximize posts per months by various influencers.

● Monthly posts will include content from an influencer list with a cumulative following of at least 1.5 million followers. For example, a typical influencer mix would be as follows: (i) 2-3 Major Influencers, influencers with more than 500,000 followers, (ii) 3-5 Top-Tier Influencers, influencers with more than 100,000 followers, (iii) 5-10 Micro Influencers, influencers with 10,000 to 100,000 followers, and (iv) 3-5 Beginner Influencers, influencers with less than 10,000 followers.

● Posts presented on multiple social media platforms, including cross posting where the same video or content may be shared several times to capture many different audiences, targeting social media platforms such as Facebook and Facebook Reels, Instagram and Instagram Reels, YouTube and YouTube Shorts, Pinterest and Pinterest Idea Pins, X, Khal Media, Clapper, LinkedIn, Reddit, Twitch, Tumblr, etc.

● 1-2 email blasts per month from the influencer featuring the brand.

● Placement of brand on the main sliding banner on the CWS Platform homepage or mobile app, in the category page and Spirits dropdown of the website, and in our holiday gift guide.

Within 5 days of the end of the month, we generate a summary report of the influencer program which includes the following types of data: (i) the total sales of product on the CWS Platform with basic customer location data, (ii) a list of posts per influencers with links to content across platforms, and (iii) a description of product placements on the CWS Platform.

**Our Relationships with Third-Party Alcohol Brands**

To date, we have engaged with various brands to bring their products to our customer base. We have engaged with brands including, but not limited to Loca Loka, Pinaq, Don Ramon, Soda Jerk, and Full Bore Whiskey to market and sell their products on the CWS Platform. Our clients generally include newer alcohol brands that produce small batches and craft spirits. Many customers return for additional marketing programs after the initial engagement and elect to enter multiple month arrangements.

**Our Competition and Competitive Strengths**

The market for online sales and promotions of alcohol is competitive. This includes large online retailers such as Amazon, specialty e-commerce sites and direct sales from producers. These companies are often larger than us, and have considerable financial, technical and human capital resources. However, we believe that we have the following competitive strengths that will allow us to capitalize on the growing alcoholic beverage industry and alcohol e-commerce:

● ***Targeted marketing.*** We believe that our branding style, and the branding services we provide to our clients, allow us to market directly to the millennial market demographic. We believe we accomplish this marketing through our ad campaigns and marketing materials that have a sleek and modern look and feel. By implementing this targeted approach, in our view, we provide a unique and modern customer experience that helps us capture a key market in the alcoholic beverage industry. Our search engine optimization, or SEO, has been developed over many years. In our view, it provides customers with premium placement opportunities they often cannot source anywhere else.

● ***Extensive influencer network***. We believe that our team has created one of the most extensive influencer relationship lists within the alcohol industry for small batch and exclusive brands. We have around 240 influencer relationships that differentiate us from many other online marketing channels available to brands.

● ***Extensive e-commerce and marketing expertise.*** Our team has decades of experience combined in e-commerce and implementing online strategies to maximize the benefit of marketing campaigns. This includes online promotional campaigns that drive sales of products.

● ***Working with highly differentiated brands.*** We vet the external brands we promote to ensure that all of the products we market align with our own brand and strategy. We believe our vetting process allows us to maximize the value we provide to our clients, while also allowing us to provide consumers with exclusive options not available from larger distributors.

● ***Strategic relationships.*** We believe we have developed and solidified relationships with multiple groups that can deliver value to external brand customers. This includes marketing, import, storage and retail/wholesale distribution relationships.

In addition to online competition, we face competition from other emerging products, as the market can be characterized as highly fragmented with many new brands coming to the market. We believe we differentiate our wholly-owned brands in several ways:

● ***Development of products that are not generally available in the market.*** We focus our product development on flavors and variations of products that are not generally available on the market. This differentiation aligns with current market trends and results in alignment with modern consumer preference for new and exciting brand products that expand the profile of legacy products. For example, SWOL Peach Tequila.

● ***Setting competitive price points.*** We believe we have set a competitive price point, which aligns with the uniqueness and quality of the products offered by the Company. This price point is important in the context of differentiating legacy or generic products in the industry. This comes from years of experience within the industry and significant data points about comparable products within the market that we and our partners collected.

● ***Focus on quality.*** We believe all our products are sourced from the highest quality producers, and we vet our producers by visiting locations to verify quality and control procedures.

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*●* ***Labelling and marketing promotions.*** We believe that we have crafted unique labelling which aligns with our branding. Our labelling includes a removable patch that can be affixed to other items. This serves as continued marketing for our products, as the patch remains after the bottle has been consumed.

**Our Growth Strategies**

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***Marketing***

We have developed three primary methods for facilitating deals through our marketing division:

● *Channel Partners/Influencers.* Our most successful service to date is the ability for liquor brands to have their products displayed by a social media influencer team via product placement, promotion and usage in advertorial collaborations. These influencers are often approached by new brands independently, which are then referred to us. We built up our own group (network) of influencers from scratch (bartenders, alcohol personalities, restaurateurs, social media personalities, alcohol representatives). These influencers have a direct line to qualified customers who are looking to buy products that they recommend. After signing a marketing client, we send their products to our influencers who then create client specific content that directs their followers to the CWS website to buy the product. The influencers are only paid a percentage of sales.

● *Direct Inbound Lead Generation.* Due to the surge in demand for marketing companies that specialize in liquor and alcohol promotion, we have been contacted by an influx of new brands and medium-sized companies that are looking to scale via resources and available services. This is also being driven based on past successes with brands that refer their industry relationships to LQR House. For example, when we first launched the program, we contracted with four to five clients on a monthly basis. Since then, we have had at least 5-8 clients utilizing our marketing services on a monthly basis. As we continue to grow our operations and increase our service offerings, we intend to increase inbound marketing via Google Ads, social media promotion and search engine optimization to ensure new leads flowing in.

● *Liquor Brand Development.* Through our exclusive marketing agreements with external brands, we are developing a reputation as a premium marketer and advertiser for liquor brands, and one that offers efficient and cost-effective services. Brands that are looking to establish themselves often find the Company through web properties of those lines, such as swoltequila.com.

We believe that by continuing to develop leading brands for up-and-coming companies and, by aligning with celebrities and influencers with significant followings, we will continue to offer quality work-product that will attract start-ups looking to establish an online marketing presence. Moreover, we believe that we are developing a portfolio of successful marketing campaigns that will positively influence our word-of-mouth and referral lead generation and overall reputation in the industry.

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***Brands***

We intend to continue expanding and developing our existing brands, like those associated with our SWOL trademark, in two ways. First, we plan to purchase larger amounts of SWOL products, which will allow us to sell to more customers and increase our brand recognition at a quicker rate. Second, we plan on increasing the marketing presence for SWOL. Moreover, we will continue developing new flavors, like SWOL Cristalino and SWOL Peach, that align us with current market trends and evolving consumer preferences.

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***Acquisitions***

We intend to pursue opportunistic acquisitions of the following types of companies involved in the alcoholic beverage industry, or companies that could be beneficial if integrated into our current business model:

● *Existing Brands.* We intend to target up-and-coming unique alcohol brands with initial market penetration and the potential to expand with additional marketing and distribution expertise. Our focus will be on the spirits, wine and specialty mixed drink segments of the market. One potential source of acquisitions would include approaching existing marketing clients to gauge their interest in becoming a majority owned subsidiary of our company.

 

*●* *Technologies.* We will also seek to acquire applications, analytics and distribution tools that can be utilized to complement our existing operations. Our technology acquisitions will focus on platforms that we believe will gain additional market insights and advertising opportunities for internal and external brands that we are developing, or plan to develop in the future.

*●* *Distribution Licenses and Physical Storage Locations.* We intend to target companies with importation licenses and storage facilities that will allow us to physically import and store our brands and our clients' brands.

We expect to utilize a formal acquisition process for the identification and analysis of targets in the context of strategic alignment to our business objectives, approaching targets for solicitation of interest in a transaction, completing financial, legal and technical due diligence, and negotiating the terms of a transaction and related legal documentation. The core objective of this process is to scale our revenue and earnings and complement our existing operational activities. Members of our management team have completed significant financial transactions over the course of their careers, and have experience working with corporate issuers, investment and merchant banks, and law firms, and we believe that our management's experience will help us achieve our business goals. As of the date of this Annual Report on Form 10-K, we do not have any acquisitions in progress, nor have we identified any potential acquisitions.

**Intellectual Property**

We consider intellectual property to be important to the operation of our business, and critical to driving growth in our commercial revenue. We acquired trademarks pursuant to the Asset Purchase Agreement in connection with SWOL between LQR House as the Buyer and Dollinger Innovations Inc., Dollinger Holdings LLC, and Sean Dollinger as the Sellers dated as of March 19, 2021 and pursuant to the Asset Purchase Agreement in connection with Soleil Vino among LQR House as the Buyer and Dollinger Holdings LLC as the Sellers dated as of May 31, 2021. We consider our intellectual property to be a key business asset and therefore have rights to use and market the following portfolio of intellectual property:

***SWOL Intellectual Property***

● Trademarks: SWOL and Design and all associated intellectual property rights, which are registered in Mexico only (application number 2345291, registration number 2141431).

● All labels, logos and other branding bearing the SWOL and Design marks or any mark substantially similar to the same.

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***Soleil Vino Intellectual Property***

● Trademarks for Soleil Vino and all associated trade dress and intellectual property rights (which are not currently registered by us).

● All labels, logos and other branding bearing the Soleil Vino marks or any mark substantially similar to the same.

● Domain name *http://www.soleilvino.com*, and all related digital and social media content including but not limited to influencer networks, and all related content, and all related sales channels.

Enforcement of our trademark rights is important in maintaining the value of each of our brands. While it would be cost-prohibitive to act in all instances, our aim is to consistently reduce trademark infringements by carrying out coordinated, cost-effective enforcement actions following investigation of suspected trademark infringements. Enforcement action takes a variety of forms, such as working with authorities to seize counterfeit goods and stopping the activities of unauthorized sellers to taking direct legal action against infringers, for example, by issuing cease and desist letters. In relation to materials for which copyright protection is available, our current practice is generally to secure copyright ownership where possible and appropriate.

**Human Capital**

As of April 15, 2026, we have 4 employees, and 3 independent contractors. Our independent contractors include third-party service providers who staff our organization and supplement our teams as needed. None of our personnel are represented by labor unions, and we believe that we have an excellent relationship with everyone who works with us. We operate the Company under remote-first principles.

**Seasonality**

Seasonality has some impact on our business via the levels at which customers engage with our products and brand. For example, we have traditionally seen lower total sales in the post-holiday and winter months. Our marketing strategies, which may be informed by these seasonal trends, will also impact our quarterly results of operations. These trends may cause our cash requirements to vary from quarter to quarter depending on the variability in the volume and timing of sales. We believe that these seasonal trends have affected and will continue to affect our quarterly results.

**Government Regulation**

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***The Alcohol Industry***

A complex multi-jurisdictional regime governs alcoholic beverage manufacturing, distribution, sales, and marketing in the United States. The alcoholic beverages industry in which we operate is subject to extensive regulation by the Alcohol and Tobacco Tax and Trade Bureau (and other federal agencies), each state's liquor authority, and potentially local authorities depending on location. These regulations and laws dictate such matters as licensing requirements, production, importation, ownership restrictions, trade, and pricing practices, permitted distribution channels, delivery, and prohibitions on sales to minors, permitted, and required labeling, and advertising and relations with wholesalers and retailers. These laws, regulations and licensing requirements may, and sometimes are, interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other legal mandates or with the Company's business practices. Further, these laws, rules, regulations, and interpretations are constantly changing because of litigation, legislation, and agency priorities, and could result in increased regulation. The Company's actual or asserted non-compliance with any such law, regulation or requirement could expose us to investigations, claims, litigation, injunctive proceedings and other criminal or civil proceedings by private parties and regulatory authorities, as well as license suspension, license revocation, substantial fines, and negative publicity, any of which could adversely affect our results of operations, financial condition, and business.

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***The Internet***

We are subject to several laws and regulations that affect companies conducting business on the Internet, many of which are still evolving and could be interpreted in ways that could harm our business. The way existing laws and regulations will be applied to the Internet and how they will relate to our business are often unclear. For example, we often cannot be certain how existing laws will apply in the e-commerce and online context, including with respect to such topics as privacy, defamation, pricing, credit card fraud, advertising, taxation, sweepstakes, promotions, content regulation, quality of products and services, and intellectual property ownership and infringement.

Numerous laws and regulatory schemes have been adopted at the national and state level in the United States, and in some cases internationally, that have a direct impact on our business and operations. For example:

The Credit Card Accountability Responsibility and Disclosure Act of 2009, or CARD Act, and similar laws and regulations adopted by several states regulate credit card and gift certificate use fairness, including expiration dates and fees. Our business also requires that we comply with payment card industry data security and other standards. We are subject to payment card association operating rules, certification requirements, and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for card issuing banks' costs, subject to fines and higher transaction fees, and lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers, or facilitate other types of online payments, and our business and results of operations could be adversely affected.

The Digital Millennium Copyright Act (DMCA) provides relief for claims of circumvention of copyright protected technologies and includes a safe harbor intended to reduce the liability of online service providers for hosting, listing, or linking to third-party content that infringes copyrights of others.

The California Consumer Privacy Act (CCPA), which went into effect on January 1, 2020, provides consumers the right to know what personal data companies collect, how it is used, and the right to access, delete, and opt out of the sale of their personal information to third parties. It also expands the definition of personal information and gives consumers increased privacy rights and protections for that information. The CCPA also includes special requirements for California consumers under the age of 16. In addition, the European Union and United Kingdom have adopted the General Data Protection Regulation (GDPR), which likewise impose significant data protection obligations on enterprises, including limitations on data uses and constraints on certain uses of sensitive data. Effective January 1, 2023, we became subject to the California Privacy Rights Act, which expands upon the consumer data use restrictions, penalties and enforcement provisions under the California Consumer Privacy Act, and Virginia's Consumer Data Protection Act, another comprehensive data privacy law. Effective July 1, 2023, we became subject to the Colorado Privacy Act and Connecticut's An Act Concerning Personal Data Privacy and Online Monitoring, which are also comprehensive consumer privacy laws. Effective December 31, 2023, we became subject to the Utah Consumer Privacy Act, regarding business handling of consumers' personal data.

**ITEM 1A. RISK FACTORS**

*An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this Annual Report on Form 10-K, before purchasing our common stock. We have listed below (not necessarily in order of importance or probability of occurrence) what we believe to be the most significant risk factors applicable to us, but they do not constitute all of the risks that may be applicable to us. Any of the following factors could harm our business, financial condition, results of operations or prospects, and could result in a partial or complete loss of your investment. Some statements in this report, including statements in the following risk factors, constitute forward-looking statements. These disclosures reflect the Company's beliefs and opinions as to factors that could materially and adversely affect the Company and its securities in the future. References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future. Please refer to the section titled "Cautionary Statement Regarding Forward-Looking Statements".*

**Risks Related to Our Business and Industry**

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***Our Chief Executive Officer, Sean Dollinger, has been the subject of a compliance review that was initiated by the British Columbia Securities Commission, and has not formally been concluded, in connection with the sale of a subsidiary by Namaste Technologies Inc. when Mr. Dollinger was the Chief Executive Officer there, and if the British Columbia Securities Commission or any other regulatory agency takes additional action against Mr. Dollinger, our business could be materially adversely affected.***

Sean Dollinger, our Chief Executive Officer, was the Chief Executive Officer of Namaste Technologies Inc., or Namaste, a Canadian public company, from June 2015 to February 2019. In October 2017, Namaste sought to list its securities on the TSX Venture Exchange, or TSXV. During that time, the TSXV and the Toronto Stock Exchange, or TXV, advised their listed issuers that they could not hold interests in any entities engaging in activities related to cannabis in the United States. After receiving the TSXV Notice, Namaste sought to divest one of its subsidiaries who would be the subject of the TSXV's notice, Dollinger Enterprises US Inc., or Dollinger US. On November 28, 2017, in a transaction approved by the Namaste board of directors, Namaste sold Dollinger US to ESC Hughes Holdings Ltd, or ESC Hughes, a company owned by David Hughes, who was acting as Chief Marketing Officer of Namaste through his wholly owned consulting firm, ORH Marketing Ltd. In an Investor call on November 29, 2017, Mr. Dollinger affirmed that the $400,000.00 purchase price for Dollinger US was fair market value and that the deal was conducted at arm's length.

On September 13, 2018, and October 4, 2018, Citron Research, a company controlled by US-based short-seller Andrew Left, released two reports on Namaste. In those reports, Citron Research made allegations of securities fraud relating to the sale of Dollinger US. On October 9, 2018, and October 10, 2018, the British Columbia Securities Commission's ("BCSC") compliance department, which is a separate and distinct group from the BCSC's enforcement department, issued comment letters to Namaste containing requests for information regarding the allegations in Citron Research's report. Namaste responded to the letter and stated that neither ESC Hughes nor David Hughes was then, or is now, a "related party" to the Company (as defined in Multilateral Instrument 61-101, *Protection of Minority Security Holders in Special Transactions*) as neither ESC Hughes nor David Hughes individually, or in aggregate, held then, or hold now, greater than 10% of the outstanding securities of Namaste. Mr. Dollinger departed from Namaste in February 2019 but has offered his full cooperation to the BCSC in all requests. The BCSC has not filed an action against Mr. Dollinger, or Namaste, because of the Dollinger US transaction.

In connection with the sale of Dollinger US, on October 19, 2018, a class action complaint was filed in the Ontario Superior Court of Justice against Namaste and its former CEO, Sean Dollinger, and COO, Philip Van Den Berg on behalf of those who acquired securities of Namaste during certain time periods, alleging that the Defendants made misrepresentations of material facts relating to Namaste's business, operations, and finances by omitting from core documents, non-core documents and statements, material facts about the sale of Dollinger US. The complaint asserted causes of action for misrepresentations with respect to securities under Section 138.3 of Ontario Securities Act (imposing liability "Where a responsible issuer or a person or company with actual, implied or apparent authority to act on behalf of a responsible issuer releases a document that contains a misrepresentation …") and common law claims for secondary market negligent and fraudulent misrepresentations. The Ontario Court approved a settlement agreement on July 22, 2019, in which the plaintiffs received $2,150,000.00, paid out by Namaste's insurance policy, and the defendants, including Mr. Dollinger, did not make any admissions of guilt, liability, or wrongdoing. We do not believe that Mr. Dollinger's involvement in this class action, which was settled without any admissions of guilt or wrongdoing or liability, will have any effect on our ability to operate our business, the price of our stock, or the results of our operations.

Additionally, on November 19, 2018, a class action complaint was filed in the United States District Court for the Southern District of New York against Namaste, Sean Dollinger, Philip Van Den Berg, and former CFO, Kenneth Ngo, on behalf of persons and entities who or which purchased or otherwise acquired shares of Namaste common stock traded on the over-the-counter market between November 29, 2017, and March 6, 2019. In that claim, plaintiffs alleged violations of Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 based on allegations that the defendants made false or misleading statements or failed to disclose that Namaste did not disclose that it had sold Dollinger US to Namaste executives and, consequently, Namaste did not sell Dollinger US in an arm's length transaction, and as a result, Namaste's public statements were materially false and misleading at all relevant times relating to the sale of Dollinger US. The District Court in this case approved a settlement agreement on March 11, 2020, in which the plaintiffs were awarded $2,750,000.00, paid out by Namaste's insurance policy, and the defendants, including Mr. Dollinger, did not make any admissions of guilt, liability, or wrongdoing. We do not believe that Mr. Dollinger's involvement in this class action, which was settled without any admissions of guilt or wrongdoing or liability, will have any effect on our ability to operate our business, the price of our stock, or the results of our operations.

Regarding the BCSC compliance review and correspondence with Mr. Dollinger, we believe that it is reasonable to infer from the length of time that has passed since the last contact from the BCSC, though not a certainty, that the BCSC compliance department has concluded its review into Mr. Dollinger. Additionally, we believe it is reasonable to infer that, had the BCSC enforcement department, which has a six-year statute of limitations as to actionable securities fraud, found wrongdoing involving the matter described above, the BCSC enforcement department likely would have contacted Mr. Dollinger or his lawyer by now, though, again, that inference is by no means a certainty. We do not believe that there is an ongoing BCSC investigation or review in which Mr. Dollinger is a subject, however, we have not received formal confirmation to that effect, and we will likely never receive formal confirmation of that fact since the BCSC does not make public their confidential investigations. If there is an active investigation or review of Mr. Dollinger by the BCSC or any other enforcement division of a regulatory agency, and that review results in an enforcement action against him by the BCSC or any other regulatory agency, then the filing of that action or the result thereof could cause a diversion of the time that Mr. Dollinger has to spend on our business and otherwise may have a have a material adverse impact on the price of our securities and the results of our operations.

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***Our Chief Executive Officer is, and may in the future become, affiliated with entities engaged in business activities similar to those that could be conducted by us and, accordingly, may in the future have conflicts of interest in allocating his time and determining to which entity a particular business opportunity should be presented.***

We intend to become the full-service digital marketing and brand development face of the alcoholic beverage space. Our Chief Executive Officer is also a sole shareholder and Director of Dollinger Innovations Inc., a Canadian corporation, and the sole Member and Manager of Dollinger Holdings LLC, a Florida Limited liability Company.

Our Packaging of Origin Co-Responsibility Agreement, dated July 6, 2020 (the "Packaging of Origin Co-Responsibility Agreement"), originally signed by and among Leticia Hermosillo Ravelero (the "Producer"), Sean Dollinger, Dollinger Innovations Inc., and Dollinger Holdings LLC, was assigned to us pursuant to an assignment agreement, dated June 30, 2023 (the "June 30 Assignment Agreement"), by and among LQR House (assignee), Dollinger Innovations Inc., Dollinger Holdings LLC, Sean Dollinger (assignor), and the Producer. Following the assignment to us of all rights, title, and interest in the Packaging of Origin Co-Responsibility Agreement under the June 30 Assignment Agreement, we and the Producer signed a Bottled at Origin Joint Responsibility Agreement, dated July 11, 2023 (the "Bottled at Origin Joint Responsibility Agreement").

Further, the Shared Responsibility & Bonding Agreement dated March 19, 2021 (the "Shared Responsibility and Bonding Agreement"), as originally among Sean Dollinger, Dollinger Innovations Inc., Dollinger Holdings, LLC, and the Producer, was assigned to us pursuant to (i) an asset purchase agreement dated March 19, 2021, which assigned over all rights, title, and interest in the Shared Responsibility and Bonding Agreement to LQR House and (ii) a ratification agreement containing the Producer's assent to the assignment, among LQR House, Dollinger Innovations Inc., Dollinger Holdings LLC, and Sean Dollinger (collectively, the "Shared Responsibility and Bonding Assignment Agreement").

Our business is materially dependent on the Bottled at Origin Joint Responsibility Agreement and the Shared Responsibility and Bonding Agreement.

Pursuant to the Bottled at Origin Joint Responsibility Agreement, the Producer supplies to us product that strictly complies with the "Official Tequila Standard" (as defined in the agreement) under Mexican law and allows us to use the word "Tequila" or "Tequila 100% Agave" on the SWOL brand. The Producer also supplies exclusively to us Tequila Anejo and flavored tequila in accordance with the orders submitted by us.

Pursuant to the Shared Responsibility and Bonding Agreement, the Producer produces and supplies to "Tequila made 100% of agave" and labeled with the trademark "SWOL" obtained in Mexico. We facilitate the distribution of tequila in collaboration with Rilo, who we engage to import SWOL branded tequila from Mexico to the United States.

Sean Dollinger, our Director and Chief Executive Officer is also the sole shareholder and Director of Dollinger Innovations Inc., and the sole Member and Manager of Dollinger Holdings LLC. If there is a disagreement between us on one hand and Dollinger Innovations Inc and Dollinger Holdings LLC on the other, with respect to the June 30 Assignment Agreement and the Shared Responsibility and Bonding Assignment Agreement, it could be in Mr. Dollinger's personal interest to agree with Dollinger Innovations Inc. and Dollinger Holdings LLC in opposition to the interests of the Company. If this occurred, the Company could lose access to a material portion of its assets which would have a material adverse effect on our business, financial condition and results of operations.

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***Our business, revenue, and operations are highly dependent on our relationship with CWS, and any disruption in that relationship could materially adversely affect our business.***

For the years ended December 31, 2025 and 2024, all of our revenue was derived from or directly related to our contractual relationship with CWS. Although we acquired the CWS Platform from Ssquared on November 1, 2023, and no longer rely on the Marketing Agreement for revenue, CWS continues to be our sole distribution channel for alcoholic beverage products. Our reliance on CWS creates significant concentration risk. If CWS is unwilling or unable to continue to distribute products sold through the CWS Platform, whether due to business, regulatory, financial, or operational reasons, our ability to generate revenue would be materially and adversely affected. In addition, KBROS, which is responsible for fulfillment and logistics for the CWS Platform, is affiliated with CWS through common ownership. As a result, potential conflicts of interest may arise. KBROS may decline to pursue opportunities, including alternative distribution arrangements or operational changes, that could benefit us but may not be in the best interests of CWS. We do not currently have alternative distribution arrangements in place. If our relationship with CWS were terminated or disrupted, or if KBROS were unable or unwilling to support a transition to a new distributor, we may not be able to secure a replacement distributor on acceptable terms, or at all, in a timely manner. Any such disruption could result in delays in product delivery, loss of customers, and a material adverse effect on our business, financial condition, and results of operations.

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***We have a limited operating track record for certain aspects of our business, which may make it difficult to evaluate our growth prospects***

While we have generated revenue in recent periods, certain aspects of our business, including our SWOL Tequila brand and newer strategic initiatives, have a limited operating track record. As a result, our ability to successfully execute our business strategy, scale operations, and achieve sustained profitability is subject to significant uncertainty. Our future performance will depend on a number of factors, including our ability to expand distribution, maintain key commercial relationships, manage costs, and respond to competitive and regulatory developments. There can be no assurance that we will be successful in achieving these objectives. Any failure to effectively execute our business strategy could materially adversely affect our business, financial condition and results of operations.

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***Our 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 operations.***

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern in its report on our consolidated financial statements. The accompanying financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have incurred significant net losses and negative cash flows from operations. For the year ended December 31, 2025, we incurred net losses of $25,522,618, and as of December 31, 2025, we had an accumulated deficit of $67,829,421. We used $33,817,140 of cash in operating activities during the year ended December 31, 2025. We expect to continue to incur operating losses for the foreseeable future. Our ability to continue as a going concern depends on our ability to generate sufficient revenue and cash flows from operations and to raise additional capital. We have historically relied on equity financings, including proceeds from warrant exercises, at-the-market offerings, and registered direct offerings, to fund our operations. In March 2026, we entered into a sales agreement pursuant to which we may offer and sell shares of our common stock having an aggregate offering price of up to $50,273,610 in at-the-market transactions. There can be no assurance that we will be able to raise additional capital on acceptable terms, or at all. Any failure to obtain adequate financing when needed could require us to significantly reduce or discontinue operations, delay or abandon business initiatives, or otherwise materially adversely affect our business, financial condition, and results of operations. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

***The Company may need to raise additional capital to support its operations.***

The Company may need to procure additional financing over time, the amount and timing of which will depend on a number of factors, including the pace of expansion of the Company's opportunities and customer base, the scope of product development to be undertaken by the Company, the need to respond to customer needs for improvement of product offerings, the services offered and development efforts, the cash flow generated by its operations, the extent of losses, if any with respect to matters identified as risk factors herein and the extent of other unanticipated areas or amounts of expenditure. The Company cannot fully predict the extent to which it will require additional financing. There can be no assurance regarding the availability or terms of additional financing the Company may be able to procure over time. Any new investor may require that any future debt financing or issuance of preferred equity by the Company could be senior to the rights of stockholders, and any future issuance of equity could result in the dilution of the value of our shares.

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***The Company may incur significant losses, and there can be no assurance that the Company will ever become a profitable business.***

During the years ended December 31, 2025 and 2024, we had net losses of $25,522,618 and $22,754,178, respectively. It is anticipated that the Company may continue to sustain operating losses. Its ability to become and/or remain profitable depends in material part on success in growing and expanding the Company's products and services. There can be no assurance that this will occur. Unanticipated problems and expenses often encountered in offering new and unique products or services may impact whether the Company is successful. Furthermore, the Company may encounter substantial delays and unexpected expenses related to development, technological changes, marketing, insurance, legal or regulatory requirements and changes to such requirements or other unforeseen difficulties. There can be no assurance that the Company will remain profitable. If the Company sustains losses over a period of time, it may be unable to continue in business.

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***The Company's future revenue and operating results are unpredictable and may fluctuate significantly.***

It is difficult to accurately forecast the Company's revenues and operating results, and they could fluctuate in the future due to several factors. These factors may include acceptance of the Company's products and services; the amount and timing of operating costs and capital expenditures; competition from other market venues or services that may reduce market share and create pricing pressure; and adverse changes in general economic, industry and regulatory conditions and requirements. The Company's operating results may fluctuate from year to year due to the factors listed above and others not listed. At times, these fluctuations may be significant.

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***We 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.***

Our SWOL Tequila is produced by the sole supplier, an individual based in Guadalajara, Mexico. This supplier is solely responsible for the production, bottling, labeling, capping, and packaging of our finished tequila product. If our contracts with this supplier are terminated for any reason (including, natural death of our supplier), we may not have alternative sources of supply at comparable prices and may not be able to complete orders for SWOL Tequila in time or at all. If we find a replacement, we also may not be able to raise the prices of our products to cover all, or even a portion, of the increased costs. In addition, if our supplier fails to perform satisfactorily, fails to handle increased orders, it could cause us to fail to meet orders, lose sales, incur additional costs and/or expose us to product quality issues. This could cause us to lose credibility in the marketplace and damage our relationships with our customers and partners, ultimately leading to a decline in our business and results of operations. We may not be able to obtain an acceptable substitute for production, bottling, labeling, capping, and packaging from another supplier on the same basis or at all. Even if we are able to obtain acceptable substitutes from replacement suppliers, their use could require us to significantly alter our business operations. An interruption in our business operations could occur if we encounter delays or difficulties in securing or maintaining the production of SWOL Tequila. Any such interruption could negatively impact our business development, launches of new products, and significantly affect our business, financial condition, results of operations, and reputation.

 

***If demand for our products and services does not develop as expected our projected revenues and profits will be affected.***

Our future profits are influenced by many factors, including economics, world events and changing customer preferences. We believe that the markets in our product segment will continue to grow, that we will be successful in marketing our products and services in these markets. If our expectations as to the size of these markets and our ability to sell our products and services in this market are not correct, our revenue may not materialize, and our business will be adversely affected.

 

***If 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.***

Our success depends on our ability to acquire and retain new customers and to do so in a cost-effective manner. We must continue to acquire customers in order to increase net revenues, improve margins, and achieve profitability. We intend to make significant investments related to customer acquisition and expect to continue to spend significant amounts to acquire additional customers. We cannot assure you that the net revenues from the new customers we acquire will ultimately exceed the cost of acquiring those customers. If we fail to deliver a quality shopping experience, or if consumers do not perceive the products we offer to be of high value and quality, we may be unable to acquire or retain customers. If we are unable to acquire or retain customers who purchase products in volumes sufficient to grow our business, we may be unable to generate the scale necessary to achieve operational efficiency. Consequently, our prices may increase, or may not decrease to levels sufficient to generate customer interest, our net revenues may decrease, and our margins and profitability may decline or not improve. As a result, our business, financial condition, and results of operations may be materially and adversely affected.

We believe that many of our new customers will originate from word-of-mouth and other non-paid referrals from our customers. Therefore, we must ensure that our customers remain loyal to us to continue receiving those referrals. If our efforts to satisfy our customers are not successful, we may be unable to acquire new customers in sufficient numbers to continue to grow our business, and we may be required to incur significantly higher marketing expenses to acquire new customers.

***We rely on other third parties to provide services essential to the success of our business.***

Third parties provide a variety of essential business functions for us, including customer service, legal and distribution. It is possible that some of these third parties will fail to perform their services or will perform them in an unacceptable manner. It is possible that we will experience delays, errors, or other problems with their work that will materially impact our operations.

In particular, we rely on CWS for the distribution of products sold by our marketing clientele. In the event CWS were to lose their distribution license, for any reason, including but not limited to, changes in state and federal regulations, we would have to seek alternative distribution options immediately. The services we sell to our clients could be interrupted by the change in distribution provider and our business and reputation could suffer. If our efforts to contract with another distributor are unsuccessful, the Company may be unable to achieve or maintain profitability and may incur significant losses in the future. As a result, our business, financial condition, and results of operations may be materially and adversely affected.

The value of our brand also depends on effective customer support to provide a high-quality customer experience, which requires significant personnel expenses. If not managed properly, this expense could impact our profitability. Failure to manage or train our outsourced customer support representatives properly could compromise our ability to handle customer complaints effectively.

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***Reduced consumer demand for alcoholic beverages could harm our business.***

There have been periods in the past in which overall per capita consumption of alcoholic beverages in the United States and other markets in which we participate has declined substantially. A limited or general decline in consumption in one or more of our product categories could occur in the future due to a variety of factors, including a general decline in economic conditions, increased concern about the health consequences of consuming alcoholic beverage products and about drinking and driving, a trend toward a healthier diet including lighter, lower-calorie beverages such as diet soft drinks, juices and water products, the increased activity of anti-alcohol groups and increased federal, state or foreign excise and other taxes on alcoholic beverage products. The competitive position of the Company's products could also be affected adversely by any failure to achieve consistent, reliable quality in the product or service levels to customers.

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***The success of our business relies heavily on brand image, reputation, and product quality.***

It is important that we maintain and increase the image and reputation of our existing brands and products. Concerns about product quality, even when unsubstantiated, could be harmful to our image and reputation of our brands and products. While we have quality control programs in place, in the event we experienced an issue with product quality, we may experience recalls or liability in addition to business disruption which could further negatively impact brand image and reputation and negatively affect our sales. Our brand image and reputation may also be more difficult to protect due to less oversight and control because of the outsourcing of some of our operations. We also could be exposed to lawsuits relating to product liability or marketing or sales practices. Deterioration to our brand equity may be difficult to combat or reverse and could have a material effect on our business and financial results.

In addition, in recent years, there has been a marked increase in the use of social media platforms and other forms of Internet-based communications that provide individuals with access to broad audiences, and the availability of information on social media platforms is virtually immediate, as can be its impact. Many social media platforms immediately publish the content their participants post, often without filters or checks on accuracy of the content posted. Furthermore, other Internet-based or traditional media outlets may in turn reference or republish such social media content to an even broader audience. Information concerning us, regardless of its accuracy, may be posted on such platforms at any time. Information posted may be adverse to our interests or may be inaccurate, each of which may materially harm our brand, reputation, performance, prospects and business, and such harm may be immediate and we may have little or no opportunity to respond or to seek redress or a correction.

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***Changes in consumer spending could have a negative impact on our financial condition and business results.***

Alcohol sales depend upon a number of factors related to the level of consumer spending, including the general state of the economy, federal and state income tax rates, deductibility of business entertainment expenses under federal and state tax laws, and consumer confidence in future economic conditions. Changes in consumer spending in these and other areas can affect both the quantity and the price of wines that customers are willing to purchase online, at restaurants or through retail outlets. Reduced consumer confidence and spending may result in reduced demand for our products, limitations on our ability to increase prices and increased levels of selling and promotional expenses. This, in turn, may have a considerable negative impact upon sales and gross margins.

We are subject to, or voluntarily comply with, a number of other laws and regulations relating to the payments we accept from our customers and third parties, including with respect to money laundering, money transfers, privacy, and information security, and electronic fund transfers. These laws and regulations could change or be reinterpreted to make it difficult or impossible for us to comply. If we were found to be in violation of any of these applicable laws or regulations, we could be subject to civil or criminal penalties and higher transaction fees or lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, which may make our services less convenient and less attractive to our customers and diminish the customer experience.

***Our pursuit of opportunistic investments outside our core business has resulted in significant capital outlays, and similar future investments may result in losses.***

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We have pursued opportunistic investments outside of our core alcohol e-commerce and tequila business, including investments in digital content monetization and related activities. These investments have required significant capital outlays and may not generate returns. We may continue to evaluate similar investment opportunities in the future.

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For example, during the fiscal year ended December 31, 2025, we invested an aggregate of approximately $18.5 million in joint venture arrangements and paid approximately $3.3 million under certain distribution and marketing service arrangements. Although these arrangements were subsequently terminated and the invested amounts were returned, there can be no assurance that future investments will be similarly recoverable.

Investments outside our core business involve significant risks, including limited operational experience, reliance on third-party partners, unproven business models, and exposure to rapidly evolving market conditions. The deployment of capital in such investments may reduce our available liquidity, create opportunity costs, and divert management attention from our core operations. Future investments of a similar nature could result in permanent impairment of capital, losses, or other adverse financial consequences, which could materially adversely affect our business, financial condition and results of operations.

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***We are pursuing a significant acquisition in a new line of business, which may expose us to substantial risks and uncertainties.***

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We have entered into a Share Purchase Agreement to acquire up to 100% of Fusion Five Continents Securities Limited, a securities brokerage firm based in New Zealand, in a multi-step transaction that is subject to regulatory approvals and other closing conditions. There can be no assurance that we will complete the acquisition of the remaining interest or that the anticipated benefits of the transaction will be realized. This transaction represents an expansion into a new line of business that differs from our core alcohol e-commerce and tequila operations. As a result, we may face risks associated with limited experience in the securities brokerage industry, increased regulatory oversight, operational complexity, and integration challenges. In addition, the acquisition involves cross-border operations, which may expose us to additional legal, regulatory, and compliance risks. The initial purchase price is payable in digital assets (Tether, or USDT), which introduces additional risks, including volatility, regulatory uncertainty, and operational risks associated with the use of digital assets in transactions. If we are unable to successfully complete or integrate this acquisition, or if the acquired business does not perform as expected, our financial condition, results of operations, and business prospects could be materially adversely affected.

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***Adverse public opinion about alcohol may harm our business.***

While a number of research studies suggest that moderate alcohol consumption may provide various health benefits, other studies conclude or suggest that alcohol consumption has no health benefits and may increase the risk of stroke, cancer and other illnesses. An unfavorable report on the health effects of alcohol consumption could significantly reduce the demand for wine, which could harm our business by reducing sales and increasing expenses.

In recent years, activist groups have used advertising and other methods to inform the public about the societal harms associated with the consumption of alcoholic beverages. These groups have also sought, and continue to seek, legislation to reduce the availability of alcoholic beverages, to increase the penalties associated with the misuse of alcoholic beverages, or to increase the costs associated with the production of alcoholic beverages. Over time, these efforts could cause a reduction in the consumption of alcoholic beverages generally, which could harm our business by reducing sales and increasing expenses.

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***Increased regulatory costs or taxes would harm our financial performance.***

The Alcohol and Tobacco Tax and Trade Bureau of the U.S. Department of the Treasury, or the TTB, imposes excise taxes, and/or other taxes on beverage alcohol products, and/or on certain raw materials used to produce our beverage alcohol products, in varying amounts. TTB or other governmental bodies may propose changes to international trade agreements, tariffs, taxes and other government rules and regulations. Significant increases in taxes on, or that impact, beverage alcohol products could have a material adverse effect on our business, liquidity, financial condition and/or results of operations.

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***Our business may be adversely affected by political, trade, and regulatory developments, including changes in tariffs and international trade policies.***

Our business is subject to risks arising from political, trade, and regulatory developments in the jurisdictions in which we operate, including the United States, Mexico, and Canada. Changes in U.S. federal policies, international trade agreements, tariffs, import or export restrictions, or other geopolitical developments may be difficult to predict and could adversely affect our business, financial condition, and results of operations. For example, in 2025, the United States imposed tariffs of up to 25% on certain imports from Canada and Mexico and approximately 20% on certain imports from China. In response, other countries, including China, implemented or proposed retaliatory tariffs of up to approximately 15% on certain U.S. exports. These measures were subject to subsequent modifications, exemptions, and policy changes. These developments illustrate the potential for rapidly changing trade policies and increasing geopolitical tensions, which may result in higher costs, supply chain disruptions, or reduced cross-border trade. We import our SWOL Tequila from Mexico and sell products in Canada. As a result, our business may be particularly sensitive to changes in trade policies affecting these jurisdictions. Any imposition of new tariffs, changes to existing trade agreements (including the United States-Mexico-Canada Agreement), or other trade restrictions could increase our costs, limit our ability to source or distribute products, or otherwise negatively impact our operations. In addition, broader geopolitical tensions and regulatory changes may reduce trade volume, investment, and economic activity between countries. The ultimate impact of these developments is uncertain and will depend on factors beyond our control, including the scope and duration of any trade measures and the responses of affected countries. We may not be able to fully mitigate the impact of such developments, including by passing increased costs on to customers, which could materially adversely affect our business, financial condition, and results of operations.

***Changes in the prices of supplies and raw materials could have a materially adverse effect on our business.***

There have been changes in the cost of raw materials used in tequila production and especially raw spirits in recent years. The increases in prices may also take place in the future and our inability to pass on increases to our customers could reduce our margins and profits and have a material adverse effect on our business. We cannot assure you that shortages or increases in the prices of our supplies or raw materials will not have a material adverse effect on our financial condition and results of operations.

We are subject to, or voluntarily comply with, a number of other laws and regulations relating to the payments we accept from our customers and third parties, including with respect to money laundering, money transfers, privacy, and information security, and electronic fund transfers. These laws and regulations could change or be reinterpreted to make it difficult or impossible for us to comply. If we were found to be in violation of any of these applicable laws or regulations, we could be subject to civil or criminal penalties and higher transaction fees or lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, which may make our services less convenient and less attractive to our customers and diminish the customer experience.

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***We are subject to risks associated with payments to us from our customers and other third parties, including risks associated with fraud.***

Nearly all of our customers' payments, for marketing services, are made by credit card or debit card. We currently rely exclusively on one third party vendor to provide payment processing services, including the processing of payments from credit cards and debit cards, and our business would be disrupted if this vendor becomes unwilling or unable to provide these services to us and we are unable to find a suitable replacement on a timely basis. We are also subject to payment brand operating rules, payment card industry data security standards and certification requirements, which could change or be reinterpreted to make it more difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from customers, which would make our services less convenient and attractive to our customers and likely result in a substantial reduction in revenue. We may also incur losses as a result of claims that the customer did not authorize given purchases, fraud, erroneous transmissions and customers who have closed bank accounts or have insufficient funds in their accounts to satisfy payments owed to us.

We are subject to, or voluntarily comply with, a number of other laws and regulations relating to the payments we accept from our customers and third parties, including with respect to money laundering, money transfers, privacy, and information security, and electronic fund transfers. These laws and regulations could change or be reinterpreted to make it difficult or impossible for us to comply. If we were found to be in violation of any of these applicable laws or regulations, we could be subject to civil or criminal penalties and higher transaction fees or lose our ability to accept credit and debit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, which may make our services less convenient and less attractive to our customers and diminish the customer experience.

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***We may not be able to fully exploit newly acquired brands.***

We intend to acquire third-party brands. In our experience, not every brand deployment is successful. We may incur significant costs acquiring and promoting new brands only to have limited market acceptance and limited resulting sales. If this occurs, our financial results may be negatively impacted, and we may determine it is in the best interest of the Company to no longer support that brand.

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***Our 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 SWOL.***

In January 2026, we filed a registration statement on Form S-1 with the Securities and Exchange Commission in connection with a proposed initial public offering of our subsidiary, SWOL. The registration statement has not yet been declared effective, and there can be no assurance that the offering will be completed on the terms currently contemplated, or at all. If the offering is not completed, we may not realize the anticipated benefits of the transaction, including access to additional capital to support SWOL's growth. If the offering is completed, we expect to own approximately 41.40% of the outstanding equity of SWOL, which would significantly reduce our ownership interest and could result in a loss of control over SWOL. As a result, we may no longer be able to direct SWOL's operations, strategy, or key decisions, and our interests may differ from those of other stockholders of SWOL. In addition, SWOL may operate independently and may enter into transactions or pursue strategies that are not aligned with our business objectives. Following the offering, our financial results may be impacted by changes in the accounting treatment of SWOL, including whether we continue to consolidate SWOL or account for our investment under the equity method. Any such changes could materially affect our reported revenues, expenses, and financial position. In addition, the offering could result in increased costs, including legal, accounting, and compliance expenses, and may require significant management attention. The proposed offering also exposes us to risks associated with market conditions and investor demand, which are outside of our control. Adverse market conditions or other factors could delay or prevent completion of the offering.

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***We operate in highly competitive industries, and competitive pressures could have a material adverse effect on our business.***

The alcoholic beverage distribution industry in the United States is intensely competitive and highly fragmented. The principal competitive factors in that industry include product range, pricing, distribution capabilities and responsiveness to consumer preferences, with varying emphasis on these factors depending on the market and the product. With respect to individual customers, we face significant competition from various regional distributors and brick and mortar stores, who compete principally on price. The effect of this competition could adversely affect our results of operations.

***We 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.***

Our future performance depends on the continued services and contributions of our senior management and other key employees, including Sean Dollinger, our founder and Chief Executive Officer, and Kumar Abhishek, our Chief Financial Officer and Jaclyn Hoffman, our Chief Marketing Officer. Without these key executives and employees, we may not have the ability to execute our business plans and to identify and pursue new opportunities and product innovations. The loss of services of senior management or other key employees could significantly delay or prevent the achievement of our development and strategic objectives. The loss of the services of our senior management or other key employees for any reason could adversely affect our business, financial condition and operating results. We do not presently maintain any key man life insurance policies.

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***We may not be able to manage future growth effectively.***

If our business plans are successful, we may experience significant growth in a short period of time and potential scaling issues. Should we grow rapidly, our financial, management and operating resources may not expand sufficiently to adequately manage our growth. If we are unable to manage our growth, our costs may increase disproportionately, our future revenues may stop growing or decline and we may face dissatisfied customers. Our failure to manage our growth may adversely impact our business and the value of your investment.

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***If the Company fails to develop or protect its intellectual property adequately, the Company's business could suffer.***

The Company has attempted, and may attempt, to develop certain intellectual property of its own, but cannot assure that it will be able to obtain exclusive rights in trade secrets, patents, trademark registrations and copyright registrations. At this time, the Company is unsure of what types of intellectual property might be developed. The cost of developing, applying for and obtaining such enforceable rights is expensive. Even after such enforceable rights are obtained, there are significant costs for maintaining and enforcing them. The Company may lack the resources to put in place exclusive protection and enforcement efforts. Also, certain of the Company's product or service offerings initially draws from publicly available technology in the marketplace. The Company's failure to obtain or maintain adequate protection of its intellectual property rights for any reason could have a material adverse effect on its business, financial condition and results of operations.

If the Company were to develop intellectual property, the Company may seek to enforce its intellectual property rights on others through litigation. The Company's claims, even if meritorious, may be found invalid or inapplicable to a party the Company believes infringes or has misappropriated its intellectual property rights. In addition, litigation can:

● be expensive and time consuming to prosecute or defend;

● result in a finding that the Company does not have certain intellectual property rights or that such rights lack sufficient scope or strength;

● divert management's attention and resources; or

● require the Company to license its intellectual property.

We do not have any trademarks that are registered in the United States. Our SWOL trademark is registered in Mexico only. As a result, a third party may be able to successfully challenge our enforcement of the SWOL trademark in the United States. If a successful challenge to our enforcement of our trademarks rights with respect to SWOL were to occur, we could lose the ability to market SWOL in the United States and such an occurrence could have a material adverse effect on our financial condition.

The Company relies or may rely in the future on trademarks or service marks to establish a market identity for its products or services. To maintain the value of the Company's trademarks or service marks, the Company might have to file lawsuits against third parties to prevent them from using marks confusingly similar to or dilutive of the Company's registered or unregistered trademarks or service marks. The Company also might not obtain registrations for its pending or future trademark or service marks applications and might have to defend its registered trademark or service marks and pending applications from challenge by third parties. Enforcing or defending the Company's registered and unregistered trademarks or service marks might result in significant litigation costs and damages, including the inability to continue using certain marks.

The laws of foreign countries in which the Company may contemplate doing business in the future may not recognize intellectual property rights or protect them to the same extent as do the laws of the United States. Adverse determinations in a judicial or administrative proceeding could prevent the Company from offering or providing its products or services or prevent the Company from stopping others from offering or providing competing services, and thereby have a material adverse effect on the Company's business, financial condition, and results of operations.

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***The Company's products, services or processes could be subject to claims of infringement of the intellectual property of others.***

Claims that the Company's products, services, business methods, or processes infringe upon the proprietary rights of others often are not asserted until after commencement of commercial sales of a product. Significant litigation regarding intellectual property rights exists in the Company's industry. Third parties may make claims of infringement against the Company in connection with the use of its technology. Any claims, even those without merit, could:

● be expensive and time consuming to defend;

● cause the Company to cease making, licensing, or using services that incorporate the challenged intellectual property; or

● divert management's attention and resources.

The Company cannot be certain of the outcome of any litigation. Any royalty or licensing agreement, if required, may not be available to the Company on acceptable terms or at all. The Company's failure to obtain the necessary licenses or other rights could prevent the development, or distribution of the Company's marketing technology and, therefore, could have a material adverse effect on the Company's business.

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***We are exposed to fluctuations in currency exchange rates that could negatively impact our financial results and cash flows*.**

Our supplier is located in Mexico. Because of this we face exposure to adverse movements in foreign currency exchange rates. Our primary exposures are expected to be related to pesos denominated operating expenses in Mexico. These exposures may change over time as business practices evolve, and they could have a material adverse impact on our financial results and cash flows.

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***A 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.***

Information security risks for technology companies, such as the Company, have significantly increased in recent years in part because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties. These threats may derive from fraud or malice on the part of our employees or third parties or may result from human error or accidental technological failure. These threats include cyberattacks, such as computer viruses, malicious code, phishing attacks or information security breaches.

Our operations will, in part, rely on the secure processing, transmission and storage of confidential proprietary and other information in our computer systems and networks. Our customers will rely on digital technologies, computers, email and messaging systems, software and networks to conduct their operations or to utilize our products or services. In addition, to access our products and services, our customers will use personal smartphones, tablet computers and other mobile devices that may be beyond our control.

If a cyberattack or other information security breach occurs, it could lead to security breaches of the networks, systems or devices that our customers use to access our products and services which could result in the unauthorized disclosure, release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information (including account data information) or data security compromises. Such events could also cause service interruptions, malfunctions or other failures in the physical infrastructure or operations systems that will support our businesses and customers, as well as the operations of our customers or other third parties. Any actual attacks could lead to damage to our reputation with our customers and other parties and the market, additional costs to the Company (such as repairing systems, adding new personnel or protection technologies or compliance costs), regulatory penalties, financial losses to both us and our customers and partners and the loss of customers and business opportunities. If such attacks are not detected immediately, their effect could be compounded.

Although we will attempt to mitigate these risks, there can be no assurance that we will be immune to these risks and not suffer losses in the future.

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***Current market conditions and recessionary pressures in one or more of the Company's markets could impact the Company's ability to grow its business.***

The U.S. economy faces continued concerns about the systemic impacts of adverse economic conditions such as the U.S. deficit, historically high inflation, volatile energy costs, geopolitical issues, the continued availability and cost of credit in the face of expected interest rate increases by the U.S. Federal Reserve, ongoing supply chain disruptions, the ongoing impact of the COVID-19 pandemic, and unstable financial and real estate markets. Foreign countries, including those in the Euro zone, are affected by similar systemic impacts. Turbulence in the United States and international markets and economic conditions may adversely affect the Company's liquidity and financial condition, and the liquidity and financial condition of the Company's customers. If these market conditions occur, they may limit the Company's ability, and the ability of the Company's customers, to replace maturing liabilities and to access the capital markets to meet liquidity needs, which could have a material adverse effect on the Company's financial condition and results of operations. There is no assurance that the Company's products and services will be accepted in the marketplace. To date, inflationary pressures have not had a material impact on the Company's financial condition and results of operations, and we have not developed any plans or taken any action to mitigate such inflationary pressures. However, there is no assurance the inflationary pressures will not have a material effect on the Company's financial condition and results of operations in the future. If inflationary pressures begin to have a material effect on the Company in the future, we may or may not develop plans to mitigate those pressures.

**Risks Related to Government Regulation and Being a Public Company**

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***We will face growing regulatory and compliance requirements which can be costly and time consuming.***

New and evolving regulations and compliance standards for cyber security, data protection, privacy, and internal IT controls are often created in response to the tide of cyberattacks and will increasingly impact organizations like our company. Existing regulatory standards require that organizations implement internal controls for user access to applications and data. In addition, data breaches are driving a new wave of regulation, such as the European Union's General Data Protection Regulation, with stricter enforcement and higher penalties. Regulatory and policy-driven obligations require expensive and time-consuming compliance measures. The fear of non-compliance, failed audits, and material findings has pushed organizations to spend more to ensure they are in compliance, often resulting in costly, one-off implementations to mitigate potential fines or reputational damage. The high costs associated with failing to meet regulatory requirements, combined with the risk of fallout from security breaches, has elevated this topic from the IT organization to the executive and board level. We may need to spend additional time and money ensuring we will meet future regulatory requirements.

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***Our business could be negatively impacted by changes in the U.S. political environment.***

There is significant ongoing uncertainty with respect to potential legislation, regulation and government policy at the federal, state and local levels in the United States. Such uncertainty and any material changes in such legislation, regulation and government policy could significantly impact our business as well as the markets in which we compete. Specific legislative and regulatory proposals that might materially impact us include, but are not limited to, changes to liability rules for data privacy regulations, import and export regulations, income tax regulations and the U.S. federal tax code and public company reporting requirements, immigration policies and enforcement, healthcare law, minimum wage laws, climate and energy policies, foreign trade and relations with foreign governments, and pandemic response. To the extent changes in the political environment have a negative impact on us or on our customers, our markets, our business, results of operation and financial condition could be materially and adversely impacted in the future.

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***Failure to comply with data privacy and security laws and regulations could adversely affect our operating results and business.***

In the ordinary course of our business, we might collect and store in our internal and external data centers, cloud services and networks sensitive data, including our proprietary business information and that of our customers, suppliers and business collaborators, as well as personal information of our customers and employees. The secure processing, maintenance and transmission of this information is critical to our operations and business strategy. The number and sophistication of attempted attacks and intrusions that companies have experienced from third parties has increased over the past few years. Despite our security measures, it is impossible for us to eliminate this risk.

A number of U.S. states have enacted data privacy and security laws and regulations that govern the collection, use, disclosure, transfer, storage, disposal, and protection of personal information, such as social security numbers, financial information and other sensitive personal information. For example, all 50 states and several U.S. territories now have data breach laws that require timely notification to affected individuals, and at times regulators, credit reporting agencies and other bodies, if a company has experienced the unauthorized access or acquisition of certain personal information. Other state laws, such as the California Consumer Privacy Act, as amended, or the CCPA, among other things, contain disclosure obligations for businesses that collect personal information about residents in their state and affords those individuals new rights relating to their personal information that may affect our ability to collect and/or use personal information. Effective January 1, 2023, we became subject to the California Privacy Rights Act, which expands upon the consumer data use restrictions, penalties and enforcement provisions under the California Consumer Privacy Act, and Virginia's Consumer Data Protection Act, another comprehensive data privacy law. Effective July 1, 2023, we became subject to the Colorado Privacy Act and Connecticut's An Act Concerning Personal Data Privacy and Online Monitoring, which are also comprehensive consumer privacy laws. Effective December 31, 2023, we will also become subject to the Utah Consumer Privacy Act, regarding business handling of consumers' personal data. Meanwhile, several other states and the federal government have considered or are considering privacy laws like the CCPA. We will continue to monitor and assess the impact of these laws, which may impose substantial penalties for violations, impose significant costs for investigations and compliance, allow private class-action litigation and carry significant potential liability for our business.

Outside of the U.S., data protection laws, including the EU General Data Protection Regulation, or the GDPR, also might apply to some of our operations or business collaborators. Legal requirements in these countries relating to the collection, storage, processing and transfer of personal data/information continue to evolve. The GDPR imposes, among other things, data protection requirements that include strict obligations and restrictions on the ability to collect, analyze and transfer EU personal data/information, a requirement for prompt notice of data breaches to data subjects and supervisory authorities in certain circumstances, and possible substantial fines for any violations (including possible fines for certain violations of up to the greater of 20 million Euros or 4% of total company revenue). Other governmental authorities around the world have enacted or are considering similar types of legislative and regulatory proposals concerning data protection.

The interpretation and enforcement of the laws and regulations described above are uncertain and subject to change and may require substantial costs to monitor and implement and maintain adequate compliance programs. Failure to comply with U.S. and international data protection laws and regulations could result in government enforcement actions (which could include substantial civil and/or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business.

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***Our business depends on our customers' continued and unimpeded access to the Internet and the development and maintenance of Internet infrastructure. Internet access providers may be able to block, degrade or charge for access to certain of our services, which could lead to additional expenses and the loss of customers.***

Our services depend on the ability of our customers, and the customers of Country Wine & Spirits Inc., to access the Internet. Currently, this access is provided by companies having significant market power in the broadband and Internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies and government-owned service providers. Some of these providers have the ability to take measures including legal actions, that could degrade, disrupt or increase the cost of user access to certain of our services by restricting or prohibiting the use of their infrastructure to support our services, charging increased fees to our users, or regulating online speech. Such interference could result in a loss of existing users, advertisers and goodwill, could result in increased costs and could impair our ability to attract new users, thereby harming our revenue and growth.

Moreover, the adoption of any laws or regulations adversely affecting the growth, popularity or use of the Internet, including laws impacting Internet neutrality, could decrease the demand for our services and increase our operating costs. The legislative and regulatory landscape regarding the regulation of the Internet and, in particular, Internet neutrality, in the U.S. is subject to uncertainty.

To the extent any laws, regulations or rulings permit Internet service providers to charge some users higher rates than others for the delivery of their content, Internet service providers could attempt to use such law, regulation or ruling to impose higher fees or deliver our content with less speed, reliability or otherwise on a non-neutral basis as compared to other market participants, and our business could be adversely impacted. Internationally, government regulation concerning the Internet, and in particular, network neutrality, may be developing or non-existent. Within such a regulatory environment, we could experience discriminatory or anticompetitive practices impeding both our and our customers' domestic and international growth, increasing our costs or adversely affecting our business. Additional changes in the legislative and regulatory landscape regarding Internet neutrality, or otherwise regarding the regulation of the Internet, could harm our business, operating results and financial condition.

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***Our business could be affected by new governmental regulations regarding the Internet.***

To date, government regulations have not materially restricted the use of the Internet in most parts of the world. However, the legal and regulatory environment relating to the Internet is uncertain, and governments may impose regulation in the future. New laws may be passed, courts may issue decisions affecting the Internet, existing but previously inapplicable or unenforced laws may be deemed to apply to the Internet or regulatory agencies may begin to more rigorously enforce such formerly unenforced laws, or existing legal safe harbors may be narrowed, both by U.S. federal or state governments and by governments of foreign jurisdictions. The adoption of any new laws or regulations, or the narrowing of any safe harbors, could hinder growth in the use of the Internet and online services generally, and decrease acceptance of the Internet and online services as a means of communications, e-commerce and advertising. In addition, such changes in laws could increase our costs of doing business or prevent us from delivering our services over the Internet or in specific jurisdictions, which could harm our business and our results of operations.

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***Changes 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.***

A complex multi-jurisdictional regime governs alcoholic beverage manufacturing, distribution, sales, and marketing in the United States. The alcoholic beverages industry in which we operate is subject to extensive regulation by the TTB (and other federal agencies), each state's liquor authority, and potentially local authorities depending on location. These regulations and laws dictate such matters as licensing requirements, production, importation, ownership restrictions, trade, and pricing practices, permitted distribution channels, delivery, and prohibitions on sales to minors, permitted, and required labeling, and advertising and relations with wholesalers and retailers. These laws, regulations and licensing requirements may, and sometimes are, interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other legal mandates or with the Company's business practices. Further, these laws, rules, regulations, and interpretations are constantly changing because of litigation, legislation, and agency priorities, and could result in increased regulation. The Company's actual or asserted non-compliance with any such law, regulation or requirement could expose us to investigations, claims, litigation, injunctive proceedings and other criminal or civil proceedings by private parties and regulatory authorities, as well as license suspension, license revocation, substantial fines, and negative publicity, any of which could adversely affect our results of operations, financial condition, and business.

Government laws and regulations may result in increased production and sales costs, including an increase on the applicable tax in various state, federal and foreign jurisdictions in which we do business. The amount of alcohol that CWS can sell directly to consumers over the internet is regulated, and in certain states CWS is not allowed to sell alcohol directly to consumers at all. Changes in these laws and regulations that tighten current rules could have an adverse impact on sales or increase costs to produce, market, package or sell alcohol. Changes in regulation that require significant additional source data for registration and sale, in the labelling or warning requirements, or limitations on the permissibility of any component, condition or ingredient, in the places in which our alcohol can be legally sold could inhibit sales of affected products in those markets. While we do not engage in the act of selling alcohol on the internet, our business depends on the ability of CWS to continue selling alcohol online through the CWS Platform.

If any regulation were to cause a negative impact on the ability of CWS to sell alcohol online, such an impact would have a negative effect on our business, results of operations, and financial condition. If CWS were ever to become unable to sell alcohol online through the CWS Platform, we would lose a significant source of our revenue, which would have a material adverse impact on our business, results of operations and financial condition.

The alcohol industry, and the 'sale' of alcohol online, is subject to extensive regulation by a number of federal, state, and local authorities. These regulations and laws dictate such matters as trade and pricing practices, permitted distribution channels, permitted and required labeling, and advertising. New or updated regulations, requirements or licenses, particularly changes that impact CWS' ability to sell direct to customer and/or retain accounts in the states in which it operates, or new or increased excise taxes, income taxes, sales taxes or international tariffs, could have an indirect, material adverse effect on our financial condition or results of operations. From time to time, states consider proposals to increase state alcohol excise taxes. New or revised regulations or increased licensing fees, requirements or taxes could have an indirect, material adverse effect on our business, financial condition, and results of operations.

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***The requirements of being a public company may strain our resources.***

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the listing standards of Nasdaq. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming and costly, and place significant strain on our personnel, systems and resources. Management's attention may be diverted from other business concerns, which could adversely affect our business and operating results.

The Exchange Act requires that our company file annual, quarterly, and current reports with respect to our business, financial condition, and results of operations. In addition, establishing the corporate infrastructure necessary for operating a public company may divert our management's attention from implementing our growth strategy, which could delay or slow the implementation of our business strategies, and in turn negatively impact our company's financial condition and results of operations.

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***If 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.***

Our current internal controls and any new controls that we develop may become inadequate because of changes in conditions in our business or changes in the applicable laws, regulations and standards. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results, cause us to fail to meet our reporting obligations, result in a restatement of our financial statements for prior periods or adversely affect the results of management evaluations and independent registered public accounting firm audits of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq in the future.

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***Our management team has limited experience managing a public company.***

Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company that is subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, financial condition and results of operations.

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***Industry 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.***

This report includes or refers to, and periodic reports that we have filed and will in the future file with the SEC may include or refer to, statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties and surveys and studies that we undertook ourselves regarding the market potential for our current products. Although we believe that such information has been obtained from reliable sources, the sources of such data have not guaranteed the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data. The results of this data represent various methodologies, assumptions, research, analysis, projections, estimates, composition of respondent pool, presentation of data and adjustments, each of which may ultimately prove to be incorrect, and cause actual results and market viability to differ materially from those presented in any such report or other materials.

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***Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations.***

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank, or SVB, was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or the FDIC, as receiver. Similarly, on March 12, 2023, Signature Bank Corp., or Signature, and Silvergate Capital Corp. were each swept into receivership. Although a statement by the Department of the Treasury, the Federal Reserve and the FDIC indicated that all depositors of SVB would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts, borrowers under credit agreements, letters of credit and certain other financial instruments with SVB, Signature or any other financial institution that is placed into receivership by the FDIC may be unable to access undrawn amounts thereunder. Although we are not a borrower under or party to any material letter of credit or any other such instruments with SVB, Signature or any other financial institution currently in receivership, if we enter into any such instruments and any of our lenders or counterparties to such instruments were to be placed into receivership, we may be unable to access such funds. In addition, if any of our partners, suppliers or other parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties' ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. In this regard, counterparties to credit agreements and arrangements with these financial institutions, and third parties such as beneficiaries of letters of credit (among others), may experience direct impacts from the closure of these financial institutions and uncertainty remains over liquidity concerns in the broader financial services industry. Similar impacts have occurred in the past, such as during the 2008 - 2010 financial crisis.

Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. Although the U.S. Department of Treasury, FDIC and Federal Reserve Board have announced a program to provide up to $25 billion of loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediately liquidity may exceed the capacity of such program.

Our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, any financial institutions with which we enter into credit agreements or arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships but could also include factors involving financial markets or the financial services industry generally.

The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations. These risks include, but may not be limited to, the following:

● delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets;

● inability to enter into credit facilities or other working capital resources;

● potential or actual breach of contractual obligations that require us to maintain letters of credit or other credit support arrangements; or

● termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses or other obligations, financial or otherwise, result in breaches of our financial and/or contractual obligations, or result in violations of federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors, could have material adverse impacts on our liquidity and our current and/or projected business operations and financial condition and results of operations.

Any further deterioration in the macroeconomic economy or financial services industry could lead to losses or defaults by our partners, vendors or suppliers, which in turn, could have a material adverse effect on our current and/or projected business operations and results of operations and financial condition. For example, a partner may fail to make payments when due, default under their agreements with us, become insolvent or declare bankruptcy, or a supplier may determine that it will no longer deal with us as a customer. In addition, a vendor or supplier could be adversely affected by any of the liquidity or other risks that are described above as factors that could result in material adverse impacts on us, including but not limited to delayed access or loss of access to uninsured deposits or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution. The bankruptcy or insolvency of any partner, vendor or supplier, or the failure of any partner to make payments when due, or any breach or default by a partner, vendor or supplier, or the loss of any significant supplier relationships, could cause us to suffer material losses and may have a material adverse impact on our business.

**Risks Related to Ownership of Our Common Stock**

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***An active trading market for our shares may not be sustained.***

Although our shares are listed on The Nasdaq Stock Market LLC, the market for our shares has demonstrated varying levels of trading activity. The current level of trading may not be sustained in the future. The lack of an active market for our shares may impair investors' ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the fair market value of their shares and may impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire additional assets by using our shares as consideration. ****

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***Our stock price may be volatile, and purchasers of our common stock could incur substantial losses.***

The stock market in general has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to operating performance of individual companies, particularly following a public offering of a company with a small public float. There is the potential for rapid and substantial price volatility of our common stock. Broad market factors may seriously harm the market price of our common stock, regardless of our actual or expected operating performance and financial condition or prospects, which may make it difficult for investors to assess the rapidly changing value of our common stock. Additionally, the price and volume of our common stock may fluctuate significantly as a result of the following factors:

● quarterly variations in our operating results compared to market expectations;

● adverse publicity about us, the industries we participate in or individual scandals;

● announcements of new offerings or significant price reductions by us or our competitors;

● fluctuations in stock market prices and volumes;

● changes in senior management or key personnel;

● changes in financial estimates by securities analysts;

● the market's reaction to our reduced disclosure as a result of being an "emerging growth company" under the JOBS Act;

● negative earnings or other announcements by us or our competitors;

● defaults on indebtedness, incurrence of additional indebtedness, or issuances of additional capital stock;

● global economic, legal and regulatory factors unrelated to our performance; and

● the other factors listed in this "*Risk Factors*" section.

Volatility 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.

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***Certain recent initial public offerings of companies with relatively small public floats comparable to our anticipated public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. The trading price of our common stock has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control.***

Our share price is highly volatile. Over the past 52 weeks ended April 9, 2026, the closing price of our common stock has ranged from approximately $10.73 per share to $0.65 per share. The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above the public offering price and you may lose some or all of your investment.

In addition to the risks addressed above, our common stock may continue to be subject to rapid and substantial price volatility. Recently, companies with comparably small public floats and initial public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company's underlying performance. Although the specific cause of such volatility is unclear, our anticipated public float may amplify the impact the actions taken by a few stockholders have on the price of our stock, which may cause our stock price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business. Our common stock may experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock. In addition, investors of shares of our common stock may experience losses, which may be material, if the price of our common stock declines or if such investors purchase shares of our common stock prior to any price decline.

***We are currently listed on The Nasdaq Capital Market. If we are unable to maintain listing of our securities on Nasdaq or any stock exchange, our stock price could be adversely affected and the liquidity of our stock and our ability to obtain financing could be impaired and it may be more difficult for our stockholders to sell their securities.***

Although our common stock is currently listed on The Nasdaq Capital Market, we may not be able to continue to meet the exchange's minimum listing requirements or those of any other national exchange. If we are unable to maintain listing on Nasdaq or if a liquid market for our common stock does not develop or is sustained, our common stock may remain thinly traded.

The listing rules of Nasdaq require listing issuers to comply with certain standards in order to remain listed on its exchange. If, for any reason, we should fail to maintain compliance with these listing standards and Nasdaq should delist our securities from trading on its exchange and we are unable to obtain listing on another national securities exchange, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our stockholders:

● the liquidity of our common stock;

● the market price of our common stock;

● our ability to obtain financing for the continuation of our operations;

● the number of institutional and general investors that will consider investing in our common stock;

● the number of investors in general that will consider investing in our common stock;

● the number of market makers in our common stock;

● the availability of information concerning the trading prices and volume of our common stock; and

● the number of broker-dealers willing to execute trades in shares of our common stock.

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***If 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.***

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts who covers us downgrades our common stock or publishes inaccurate or unfavorable research about our business, the market price for our common stock would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume for our common stock to decline.

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***We have never paid cash dividends on our stock and do not intend to pay cash dividends for the foreseeable future.***

We have paid no cash dividends on any class of our stock to date, and we do not anticipate paying cash dividends in the near term. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the future will be made at the discretion of our Board of Directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our Board deems relevant.

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***Raising additional capital may cause dilution to our stockholders, or restrict our operations.***

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equity and/or debt financing and collaborations, licensing agreements or other strategic arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of such securities may include liquidation or other preferences that adversely affect your rights as a stockholder.

To the extent that we raise additional capital through debt financing, it would result in increased fixed payment obligations and a portion of our operating cash flows, if any, being dedicated to the payment of principal and interest on such indebtedness. In addition, debt financing may involve agreements that include restrictive covenants that impose operating restrictions, such as restrictions on the incurrence of additional debt, the making of certain capital expenditures or the declaration of dividends.

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***We 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.***

In the future, we may attempt to increase our capital resources by entering into additional debt or debt-like financing that is secured by all or up to all of our assets, or issuing debt or equity securities, which could include issuances of commercial paper, medium-term notes, senior notes, subordinated notes or shares. In the event of our liquidation, our lenders and holders of our debt securities would receive a distribution of our available assets before distribution to our stockholders. In addition, any additional preferred stock, if issued by our company, may have a preference with respect to distributions and upon liquidation, which could further limit our ability to make distributions to our stockholders. Because our decision to incur debt and issue securities in our future offerings will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings and debt financing.

Further, market conditions could require us to accept less favorable terms for the issuance of our securities in the future. Thus, you will bear the risk of our future offerings reducing the value of your common stock and diluting your interest in our company.

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***Enforcing legal liability against certain members of our Board and our senior management might be difficult.***

Although we are organized under the laws of the State of Delaware and investors are able to effect service of process in the United States upon us, some of the members of our Board of Directors and some members of our senior management reside outside of the United States and all or a substantial portion of their assets are located outside the United States. As a result, it may not be possible to serve process on these directors and certain members of our senior management in the United States or to enforce court judgments obtained in the United States against these individuals based on the civil liability provisions of the U.S. federal or state securities laws. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable outside the United States.

***We 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.***

We are required to publicly report on an ongoing basis as an "emerging growth company" (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as we remain an emerging growth company, we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not emerging growth companies, including but not limited to:

● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

● being permitted to comply with reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and

● being exempt from the requirement to hold a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

We expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would remain an emerging growth company for up to five years, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, we would cease to be an emerging growth company as of the following December 31.

Because we are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, our stockholders could receive less information than they might expect to receive from more mature public companies. We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock.

 

*We are a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.*

Rule 12b-2 of the Exchange Act defines a "smaller reporting company" as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:

● had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or

● in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or

● in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available.

As a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our proxy statements; we will provide only two years of financial statements; and we need not provide the table of selected financial data. We also will have other "scaled" disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our common stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.

 

***As 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****.*

Under Nasdaq rules, a "smaller reporting company," as defined in Rule 12b-2 under the Exchange Act, is not subject to certain corporate governance requirements otherwise applicable to companies listed on Nasdaq. For example, a smaller reporting company is exempt from the requirement of having a compensation committee composed solely of directors meeting certain enhanced independence standards, as long as the compensation committee has at least two members who do meet such standards. Although we do not currently rely on any of these exemptions, we may elect to rely on any or all of these exemptions in the future. By electing to utilize any such exemptions, our company may be subject to greater risks of poor corporate governance, poorer management decision-making processes, and reduced results of operations from problems in our corporate organization. Consequently, our stock price may suffer, and there is no assurance that we will be able to continue to meet all continuing listing requirements of Nasdaq from which we will not be exempt, including minimum stock price requirements.

 

 

*Future 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.*

Future sales in the public market of shares of our common stock or securities convertible into or exchangeable or exercisable for shares of common stock, shares held by our existing stockholders or shares issued upon exercise of our outstanding stock options or warrants, or the perception by the market that these sales could occur, could lower the market price of our common stock or make it difficult for us to raise additional capital.

 

*Our 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.*

Repurchases pursuant to the share buyback program approved in September 2023, or any other share buyback program we adopt in the future, could affect our stock price and increase its volatility and may reduce the market liquidity for our stock. The existence of a share buyback program could also cause our stock price to be higher than it would be in the absence of such a program. Additionally, these repurchases will diminish our cash and may subject us to additional taxes, which could impact our ability to pursue possible future strategic opportunities and acquisitions and would result in lower overall returns on our cash balances. There can be no assurance that any share repurchases will, in fact, occur, or, if they occur, that they will enhance stockholder value. Although share buyback programs are intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the effectiveness of these repurchases.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

We maintain a cyber-risk management program which is intended to assist in assessing, identifying, and managing material risks from cybersecurity threats to our data and information systems. This program is to ensure that cybersecurity considerations are included in decision-making processes throughout the Company.

Our approach consists of, among other things, cybersecurity threat and vulnerability prevention, detection, mitigation and remediation of potential cybersecurity risks. We employ cybersecurity intrusion detection systems and continuous monitoring, in order to help defend against unauthorized access. We also employ identity-based access controls and identity authentication requirements. Access to the Company's data is monitored and controlled according to access control policies. Data protection and privacy practices, including data loss prevention, help to safeguard sensitive information. We have also outsourced significant elements of our information technology infrastructure; as a result, we manage independent vendor relationships with third parties who are responsible for maintaining significant elements of our information technology systems and infrastructure.

Our Board of Directors is responsible for oversight of our cyber-risk management program and management's role is to assist the Board of Directors in identifying and considering material cybersecurity risks, ensure implementation of management and employee level cybersecurity practices and training and provide the Board of Directors with regular reports regarding any cybersecurity attacks or vulnerabilities.

As of the date of this Annual Report on Form 10-K, we have not experienced any significant cybersecurity attacks and, to date, the risks from cybersecurity threats have not materially affected our business strategy, results of operations, or financial condition, and we are not currently aware of any cybersecurity threats that are reasonably likely to have such a material effect. For more information regarding the risks the Company faces from cybersecurity threats, see "*Item 1A. Risk Factors--Risks Related to Our Business and Operations--We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks*."

ITEM 2. PROPERTIES

We do not own any real property. We do not lease any real property or physical office space. We maintain a mailing address at 6538 Collins Ave. Suite 344, Miami Beach, Florida 33141, which serves as the mailing address for both LQR House Inc. and its wholly-owned subsidiary SWOL Holdings Inc.

We also maintain a mailing address in North Carolina at 5306 Six Forks Rd Ste 107 PMB1290 Raleigh, NC 27609, which is used for correspondence and administrative purposes.

We are a remote-first company, meaning that our employees, consultants and contactors work remotely. Substantially all of our executive team meetings are held virtually, with meetings occasionally held in-person at locations that are not our offices. We hold all of our stockholder meetings virtually. As a result of this strategy, we do not maintain corporate headquarters or principal executive offices. We believe this arrangement is presently adequate to meet the Company's operational needs.

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. Except as described below, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or to which any of their respective properties are subject.

The Company was previously involved in a civil action filed by Kingbird Ventures, LLC in the Eighth Judicial District Court, Clark County, Nevada (the "Kingbird Action"), in which the Company, together with certain current and former officers and directors, was named as a defendant. The complaint asserted claims including, among other things, breach of fiduciary duty and related allegations arising from certain corporate governance matters. On September 22, 2025, the Company and the other defendants entered into settlement agreements with Kingbird Ventures, LLC and related parties to resolve all claims asserted in the Kingbird Action. The settlement provides for mutual releases of claims among the parties and required aggregate cash payments of approximately $13 million by the Nevada defendants. An initial payment of $7.5 million was paid in September 2025, and the remaining balance of approximately $5.5 million was paid in December 2025, satisfying all payment obligations under the settlement. The settlement agreements expressly provide that the defendants did not admit any liability, wrongdoing, or fault. As a result of the settlement, the Kingbird Action has been fully resolved, and no claims arising from that matter remain pending against the Company or any of its current or former officers or directors.

ITEM **4. MINE SAFETY DISCLOSURES.**

Not Applicable.

Part II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

Our common stock is trading on the Nasdaq Capital Market under the symbol "YHC."

 

Holders

As of April 15, 2026, we had approximately 31 individual shareholders of record of our common stock. We believe that the number of beneficial owners of our common stock is greater than the number of record holders, because a number of shares of our common stock are held through brokerage firms in "street name."

Dividend Policy

We have never declared or paid any cash dividend on our common stock. We do not intend to pay cash dividends to our stockholders in the foreseeable future. We currently intend to retain all our available funds and future earnings, if any, to finance the growth and development of our business. Any future determination related to our dividend policy will be made at the discretion of our Board of Directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our Board of Directors may deem relevant.

Securities Authorized for Issuance under Equity Compensation Plans

In February 2021 our Board of Directors and our stockholders approved our 2021 Equity Incentive Plan (the "2021 Plan") as amended by Amendment No. 1 which was approved by our Board of Directors and stockholders on March 10, 2023, and by Amendment No.2 ("Second Plan Amendment") which was approved by our Board and stockholders. The 2021 Plan governs equity awards to our employees, directors, officers, consultants and other eligible participants. In accordance with the Second Plan Amendment, which was approved by the stockholders of the Company on December 19, 2024 the total number of shares that may be subject to awards under the 2021 Plan was increased by additional 83,679 shares. In addition, the 2021 Plan allows for an automatic increase of number of shares subject to the 2021 Plan at the beginning of each fiscal year beginning with the 2025 fiscal year, in an amount equal to the least of (a) 14,286 shares, (b) a number of shares equal to four percent (4%) of the total number of shares of all classes of common stock of the Company outstanding on the last day of the immediately preceding fiscal year, and (c) such number of shares determined by the administrator of 2021 Plan no later than the last day of the immediately preceding fiscal year. As of March 31, 2026, the maximum number of shares of our common stock that may be subject to awards under the 2021 Plan is 100,000, after giving effect to the 1-for-35 reverse stock split effective in April 2025,

The types of awards permitted under the 2021 Plan include nonqualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units and other awards. Each option shall be exercisable at such times and subject to such terms and conditions as the Board of Directors of the Company may specify.

The 2021 Plan is administered by our Compensation Committee which shall have the power and authority to grant awards consistent with the terms of the 2021 Plan, including the power and authority: (i) to select the individuals to whom awards may from time to time be granted; (ii) to determine the time or times of grant, and the extent, if any, of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock awards, restricted stock units, unrestricted stock awards, cash-based awards, and dividend equivalent rights, or any combination of the foregoing, granted to any one or more grantees; (iii) to determine the number of shares of stock to be covered by any award; (iv) to determine and modify from time to time the terms and conditions, including restrictions, not inconsistent with the terms of the 2021 Plan, of any award, which terms and conditions may differ among individual awards and grantees, and to approve the forms of award certificates; (v) to accelerate at any time the exercisability or vesting of all or any portion of any award; (vi) subject to the provisions of the 2021 Plan to extend at any time the period in which stock options may be exercised; and (vii) at any time to adopt, alter and repeal such rules, guidelines and practices for administration of the 2021 Plan and for its own acts and proceedings as it shall deem advisable; to interpret the terms and provisions of the 2021 Plan and any award (including related written instruments); to make all determinations it deems advisable for the administration of the 2021 Plan; to decide all disputes arising in connection with the 2021 Plan; and to otherwise supervise the administration of the 2021 Plan. All decisions and interpretations of the administrator shall be binding on all persons, including the Company and the 2021 Plan grantees.

The table below sets forth information as of December 31, 2025.

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|:---|:---|:---|:---|
| **Plan Category** | **Number of<br> securities to<br> be issued<br> upon<br> exercise of<br> outstanding<br> options,<br> and rights** | **Weighted-<br> average<br> exercise<br> price of<br> outstanding<br> options,<br> and rights** | **Number of<br> securities<br> remaining<br> available for<br> future<br> issuance<br> under equity<br> compensation<br> plans<br> (excluding<br> securities<br> reflected in <br> column** |
| Equity compensation plans approved by security holders |  | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- | 97113 |
| Equity compensation plans not approved by security holders |  | - | - |
| Total |  | $&nbsp;&nbsp;&nbsp;&nbsp; - | 97113 |

---

 

Recent Sales of Unregistered Securities

On January 2, 2025, the Company issued 3,334 shares of common stock to Avraham Ben-Tzvi in recognition of his services as a director in pursuance of separation. The shares were valued at $51.80 per share based on grant-date fair value of $172,678.

On January 21, 2025, the Company issued an aggregate of 210,463 shares of common stock upon the exercise of outstanding warrants at an exercise price of $19.25 per share, aggregate proceeds of $4,051,415.

On April 2, 2025, the Company issued 2,857 shares of common stock to David Lazar pursuant to a separation agreement, with a fair value of $111,000.

On June 30, 2025, the Company issued 33,000 shares of common stock to Integris Ventures LLC for advisory services rendered, with a grant date fair value of $47,520.

Unless otherwise stated above, the issuances of the securities listed above were made in reliance upon exemptions provided by Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D and/or Regulation S thereunder for the offer and sale of securities not involving a public offering.

No underwriter was engaged in connection with the foregoing sales of securities. The Company has reason to believe that all of the foregoing purchasers were familiar with or had access to information concerning the operations and financial condition of the Company, and all of those individuals or entities purchasing securities represented that they were accredited investors, acquiring the shares for investment and without a view to the distribution thereof. At the time of issuance, all of the foregoing securities were deemed to be restricted securities for purposes of the Securities Act and the certificates representing such securities bore legends to that effect.

Purchases of Equity Securities by Issuer and Its Affiliates

In August 2023, the Company's Board of Directors approved a share buyback program under which the Company can repurchase up to 20% of its common stock in open market and privately negotiated purchases, in compliance with Rule 10b-18 under the Exchange Act. The Company engaged and entered into an agreement with Dominari Securities LLC ("Dominari") on August 28, 2023, to effect the share buyback program. The share buyback program commenced on, or about, September 8, 2023. Dominari shall determine, in its sole discretion, the timing, amount, prices and manner of purchase of securities during such period. The share buyback program does not obligate the Company to acquire any particular amount of common stock, and the program may be suspended or discontinued at any time. During the year ended December 31, 2023, 24,716 shares of the Company were purchased at a cost average of $60 per share in accordance with Rule 10b-18. During the year ended December 31, 2024, 5,447 shares of the Company were purchased at a cost average of $101.5 per share in accordance with Rule 10b-18.

---

| | | |
|:---|:---|:---|
| **Period (In millions, except share and per share data)** | **Total<br> number<br> of shares<br> purchased (1)** | **Average<br> price paid<br> per share (2)** |
| September 8 - December 19, 2023 | 24716 | $60 |
| January 4 - January 5, 2024 | 5447 | 101.5 |
| Total | 30163 | $67.08 |

---

<sup>(1)</sup> On August 25, 2023 the Company announced that the Board authorized an up to 20% share buyback program, which does not have an expiration date. From the inception of the share buyback program on September 8, 2023, through December 19, 2023, the Company has purchased a total of 24,716 shares of the Company's common stock at an average price of $60 per share for a total purchase price of $1,440,852. In January 2024, the Company purchased a total of 5,447 shares of the Company's common stock at an average price of $101.5 per share.

<sup>(2)</sup> Average price paid per share excludes costs associated with the repurchases.

Use of Proceeds from our Initial Public Offering of Common Stock

Not applicable.

ITEM 6. RESERVED

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

*The following discussion and analysis are intended as a review of significant factors affecting our financial condition and results of operations for the periods indicated. The discussion should be read in conjunction with our audited consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. In addition to historical information, the following Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these forward-looking statements as a result of certain factors discussed herein and any other periodic reports filed and to be filed with the SEC.*

Business Overview

Our company, LQR House Inc., intends to become the full-service digital marketing and brand development face of the alcoholic beverage space. We also intend to integrate the supply, sales, and marketing facets of the alcoholic beverage space into one easy to use platform and become the one-stop-shop for everything related to alcohol. To date, our primary business includes the development of premium limited batch spirit brands and marketing internal and external brands through our ownership of the CWS Platform. Through our wholly-owned subsidiary SWOL Holdings Inc., we develop and market SWOL Tequila, a proprietary limited-edition tequila brand. We believe that the marketing and brand management services we provide to our wholly owned and third-party clients will increase brand recognition thereof, and drive sales thereof through our e-commerce platform partner.

In May 2024, we acquired a minority stake of common shares of Cannon Estate Winery Ltd., a British Columbia corporation, an owner of Cannon Estate Winery, pursuant to a Share Exchange Agreement under which the Company issued 21,429 shares of common stock (750,000 shares of its common stock on pre-reverse split basis) with a fair value of $817,500 in exchange for 113,085 common shares of Cannon. During the year ended December 31, 2025, the Company determined the investment was fully impaired and recorded an impairment charge of $817,500. The carrying value of this investment was nil as of December 31, 2025.

In June 2024, we acquired a minority stake of common shares of DRNK Beverage Corp., a British Columbia corporation (which became Chase Mocktails Ltd.), operating in the non-alcoholic and ready-to-drink beverage markets. During the year ended December 31, 2024, the Company recorded an impairment charge of $4,500,000 based on its evaluation of the investee. During the year ended December 31, 2025, the Company recorded an additional impairment charge of $300,000, fully writing down the remaining carrying value. The carrying value of this investment was nil as of December 31, 2025.

In December 2025, YHC Online Limited ("YHC"), a wholly-owned subsidiary of the Company, entered into four separate joint venture agreements with Bancroft Equity, Emerald Wealth Inc., Meridian Financial, and Sequoia Equity (collectively, the "Joint Ventures"). Each Joint Venture is engaged in the creation and monetization of multi-channel network ("MCN") content for digital platforms, including TikTok, with each entity targeting a specific geographic market. YHC holds a 20% minority ownership interest in each Joint Venture, with the majority partner in each retaining full operational control. The following table summarizes the key terms of each agreement as of December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Co-Venturer** | **Jurisdiction** | **Target Market** | **JV Entity** | **Total Commitment** | **Funded** |
| Bancroft Equity Limited | Hong Kong | UK & Europe | Crofty Network Limited | 5000000 | 3590000 |
| Emerald Wealth Inc. | South Dakota | Greater China | EMYHC MCN Holdings Limited | 6000000 | 4380000 |
| Meridian Financial Solutions Inc. | Wyoming | Southeast Asia | Fastone Singapore Pte. Ltd. | 8000000 | 6700000 |
| Sequoia Equity Group Inc. | South Dakota | Middle East | Not yet formed(1) | 5000000 | 3824000 |
| Total |  |  |  | 24000000 | 18494000 |

---

<sup>(1)</sup> As of December 31, 2025, the joint venture entity for the Middle East arrangement had not yet been formed. Amounts of $3,824,000 advanced to Sequoia Equity Group Inc. are presented as advance for investment in joint venture on the consolidated balance sheet.

Each agreement provides YHC with a put right, exercisable after the first anniversary of the respective agreement, to require the co-venturer to repurchase YHC's interest at YHC's total funded investment amount. As the agreements were executed in late 2025 and operations had not yet commenced as of December 31, 2025, no revenue was generated by any Joint Venture during the year ended December 31, 2025.

None of the co-venturers is a related party to the Company. In March 2026, all four agreements were terminated and all amounts previously funded, aggregating $18,494,000, were returned to YHC in full.

The Services and Brands We Market

LQR House is an American online retailer of alcohol products.

**The CWS Platform** is an American online retailer specializing in selling alcohol products, striving to become the most trusted and convenient destination for online alcohol purchases. Combining the personalized service of a neighborhood alcohol shop with the efficiency of e-commerce, we offer a wide selection of products, including our exclusive brand, SWOL Tequila, all at competitive prices with fast shipping and around-the-clock convenience. At the heart of our brand is a commitment to exceptional customer service, driving us to continuously innovate our operations for an enhanced shopping experience. From user-friendly website navigation and a top-rated mobile app to detailed order tracking and personalized product recommendations, we are revolutionizing the online alcohol shopping experience, ensuring customer satisfaction remains paramount in all our endeavors.

The following products and services constitute the core elements of our business model and allow us to serve various types of customers in the alcohol industry, including individual consumers, wholesalers, and third-party alcohol brands:

● ***SWOL Tequila*** is a limited-edition blend of tequila made in exclusive batches of up to 10,000 bottles which was originally owned by Dollinger Innovations and transferred over to us pursuant to the Tequila Asset Purchase Agreement. Pursuant to the Tequila Asset Purchase Agreement, we purchased all of the right, title and interest in the trademarks SWOL and all associated trade dress and intellectual property rights and all labels, logos and other branding bearing the SWOL marks or any mark substantially similar to the same. Tequila bearing the "SWOL" trademark is produced by Casa Cava de Oro S.A., an authentic tequila distillery in Jalisco, Mexico, imported into the United States through Rilo Import & Export ("Rilo") by Country Wine & Spirits LLC ("CWS") and sold to retail customers in the United States via the CWS Platform and in CWS's physical locations.

● ***Vault*** is the exclusive membership program for the CWS Platform, which is offered and managed by the Company. We receive the subscriptions fees generated by this program. Through the CWS Platform, users can sign up for this exclusive membership where they will have access to all products available through CWS combined with special membership benefits.

 

*●* ***Soleil Vino*** will be a wine subscription service marketed on the CWS Platform that will offer a selection of vintage and limited production wines. Through the CWS Platform, users will be able to sign up for this exclusive membership where they will have access to curated selections of wine from around the world. With Soleil Vino, we intend to create a premium wine subscription service on the market with high qualities and diverse selections of wine offerings. Pursuant to an asset purchase agreement, dated May 31, 2021, between us and Dollinger Holdings LLC, we purchased all of the right, title and interest in all trademarks regardless of registration status for Soleil Vino and all associated trade dress and intellectual property rights, all labels, logos and other branding bearing the Soleil Vino marks or any mark substantially similar to the same, and all website and all related digital and social media content including but not limited to influencer networks, *http://www.soleilvino.com*, and all related content, and all related sales channels was transferred.

*●* ***LQR House Marketing*** is a marketing service in which we utilize our marketing expertise to help our wholly owned brands and third-party clients market their products to consumers. For example, by engaging us for our marketing services, our clients gain the ability to advertise and sell their brand on the CWS Platform.

Principal Factors Affecting Our Financial Performance

Our operating results are primarily affected by the following factors:

● our ability to acquire new customers and users or retain existing customers and users;

● our ability to offer competitive pricing;

● our ability to broaden product or service offerings;

● industry demand and competition;

● our ability to leverage technology and use and develop efficient processes;

● our ability to attract and maintain a network of influencers with a relevant audience;

● our ability to attract and retain talented employees and contractors; and

● market conditions and our market position.

● ability to make profitable investments in complimentary business.

Our Growth Strategies

The key elements of our strategy to expand our business include the following:

● ***Collaborative Marketing.*** We intend to develop leading brands for up-and-coming companies and start-ups and align with celebrities and influencers with significant followings to enhance their online marketing presence.

● ***Expand Our Brand.*** We intend to continue expanding and developing our existing SWOL brand by purchasing and selling larger amounts of SWOL products to accelerate brand recognition and increasing our marketing presence.

 

*●* ***Opportunistic Acquisitions.*** We intend to pursue opportunistic acquisitions with existing alcohol brands and companies that have distribution licenses and physical storage locations and acquire technology that complements our business.

Results of Operations

*Comparison of Year Ended December 31, 2025 and Year Ended December 31, 2024*

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Year Ended December 31,** | **Year Ended December 31,** | | |
|  | **2025** | **2024** |<br>**Var. $** |<br>**Var. %** |
| Revenue - services | $112640 | $117965 | $(5325) | -5% |
| Revenue - product | 1452183 | 2383695 | (931512) | -39% |
| &nbsp;&nbsp;&nbsp;Total revenues | 1564823 | 2501660 | (936837) | -37% |
| Cost of revenue - services | 47129 | 178851 | (131722) | -74% |
| Cost of revenue - product | 1348395 | 2635984 | (1287589) | -49% |
| &nbsp;&nbsp;&nbsp;Total cost of revenue | 1395524 | 2814835 | (1419311) | -50% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit (loss) | 169299 | (313175) | 482474 | -154% |
| Operating expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 10954346 | 14556220 | (3601874) | -25% |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 643608 | 3617924 | (2974316) | -82% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 11597954 | 18174144 | (6576190) | -36% |
| Loss from operations | (11428655) | (18487319) | 7058664 | -38% |
| Other income (expense): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Impairment of investment | (1127500) | (4500000) | 3372500 | -75% |
| &nbsp;&nbsp;&nbsp;Legal settlement expense | (13000000) |  | (13000000) | 100% |
| &nbsp;&nbsp;&nbsp;Gain on sale of marketable securities |  | 5674 | (5674) | -100% |
| &nbsp;&nbsp;&nbsp;Other income | 33537 | 227467 | (193930) | -85% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses, net | (14093963) | (4266859) | (9827104) | 230% |
| Income tax expense | - | - | - |  |
| Net loss | $(25522618) | $(22754178) | $(2768440) | 12% |

---

Revenues

Total revenues for the year ended December 31, 2025 were $1,564,823, a decrease of $936,837, or approximately 37%, compared to $2,501,660 for the year ended December 31, 2024. The decrease was primarily driven by a significant decline in product revenues, which fell from $2,383,695 in 2024 to $1,452,183 in 2025, a decrease of $931,512, or approximately 39%. The decline in product revenues reflects a strategic decision by management to reduce customer acquisition spending and marketing expenditures through the CWS Platform in order to minimize losses and focus on profitability with the existing customer base, rather than pursuing top-line growth at the expense of continued operating losses. As a result of reduced marketing spend, new customer acquisition and order volume through the CWS Platform declined during the year. Service revenues decreased by $5,325, or approximately 5%, from $117,965 in 2024 to $112,640 in 2025. The decrease was primarily attributable to a reduction in marketing service engagements and lower Vault membership subscription revenue during the period as the Company realigned its service offerings.

Cost of Revenue and Gross Profit

Total cost of revenue for the year ended December 31, 2025 was $1,395,524, a decrease of $1,419,311, or approximately 50%, compared to $2,814,835 for the year ended December 31, 2024. Cost of revenue for services decreased from $178,851 in 2024 to $47,129 in 2025, reflecting the reduction in marketing service engagements during the year. Cost of revenue for product decreased from $2,635,984 in 2024 to $1,348,395 in 2025, primarily driven by the significant decline in CWS Platform product sales volume.

The elevated cost of revenue in 2024 was primarily attributable to higher CWS Platform product sales volume, which resulted in correspondingly higher product fulfillment and procurement costs, as well as higher service delivery costs associated with a greater number of active marketing service engagements during that year. These factors combined to produce a gross loss of $(313,175) in 2024, as total cost of revenue exceeded total revenues.

As a result of the proportionate decrease in product fulfillment costs relative to revenues driven by lower sales volume in 2025, the Company achieved a gross profit of $169,299 for the year ended December 31, 2025, compared to a gross loss of $(313,175) for the year ended December 31, 2024, an improvement of $482,474.

Operating Expenses

Total operating expenses for the year ended December 31, 2025 were $11,597,954, a decrease of $6,576,190, or approximately 36%, compared to $18,174,144 for the year ended December 31, 2024.

General and administrative expenses decreased from $14,556,220 in 2024 to $10,954,346 in 2025, a decrease of $3,601,874, or approximately 25%. The primary driver of this decrease was the non-recurrence of approximately $8,021,000 in retention, bonus, and settlement agreements recorded in 2024, most of which were paid to insiders and related parties of the Company, with no comparable amounts incurred during 2025. This decrease was partially offset by Legal and professional fees, including consulting and accounting fees, increased by $4,018,951, from $2,508,728 in 2024 to $6,527,679 in 2025. This increase was driven primarily by a significant increase in legal fees from $815,482 in 2024 to $4,622,571 in 2025, an increase of $3,807,089, attributable to legal costs associated with the Company's litigation and corporate development activities. Consulting fees remained relatively consistent at $1,470,066 in 2025 compared to $1,446,790 in 2024, while accounting fees increased modestly from $246,456 to $435,042.

Sales and marketing expenses decreased from $3,617,924 in 2024 to $643,608 in 2025, a decrease of $2,974,316, or approximately 82%. The decrease was primarily attributable to a non-recurring write-off of approximately $2,150,000 recorded in 2024 in connection with the termination of the Company's website development agreement with X-Media, with no comparable charge incurred during 2025. The remainder of the decrease of approximately $824,000 reflects a reduction in advertising, promotional, and marketing campaign expenditures as the Company transitioned its marketing investment strategy toward the distribution and marketing arrangements entered into during 2025, as described in Note 8.

Loss from Operations

Loss from operations for the year ended December 31, 2025 was $(11,428,655), compared to $(18,487,319) for the year ended December 31, 2024, an improvement of $7,058,664, or approximately 38%. The improvement reflects the combined effect of higher gross profit and lower operating expenses during the year.

Other Income (Expense)

Total other expense for the year ended December 31, 2025 was $(14,093,963), compared to $(4,266,859) for the year ended December 31, 2024, an increase in net expense of $9,827,104. The increase was primarily attributable to a legal settlement expense of $13,000,000 recognized during the year ended December 31, 2025, with no comparable charge in 2024. This was partially offset by a lower impairment charge on investments of $1,127,500 in 2025, compared to $4,500,000 in 2024. Other income decreased from $227,467 in 2024 to $33,537 in 2025. The 2024 other income consisted primarily of dividend income and gains on the sale of marketable securities.

Net Loss

Net loss for the year ended December 31, 2025 was $(25,522,618), compared to $(22,754,178) for the year ended December 31, 2024, an increase in net loss of $2,768,440, or approximately 12%. The increased net loss was primarily driven by the $13,000,000 legal settlement expense recorded in 2025, partially offset by improvements in gross profit and reductions in operating expenses.

Liquidity and Capital Resources

As of December 31, 2025, we had cash and cash equivalents of $5,975,408 compared to $5,386,789 as of December 31, 2024. As of December 31, 2025, we had a working capital surplus of $14,135,897 and total stockholders' equity of $29,332,638, compared to a working capital deficit of $(1,645,461) and total stockholders' equity deficit of $(517,961) as of December 31, 2024. The improvement in our balance sheet reflects significant equity financing activities completed during 2025.

The following table presents selected captions from our consolidated statement of cash flows for the years ended December 31, 2025 and 2024:

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| | | |
|:---|:---|:---|
|  | **Year Ended** | **Year Ended** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Net cash used in operating activities | $(33817140) | $(6618417) |
| Net cash (used in) provided by investing activities | $(18834541) | $675674 |
| Net cash provided by financing activities | $53240300 | $4265184 |
| Net change in cash and cash equivalents | $588619 | $(1677559) |

---

*<u>Net Cash Used in Operating Activities</u>*

During the year ended December 31, 2025, we used net cash of $(33,817,140) in operating activities, compared to $(6,618,417) used in operating activities during the year ended December 31, 2024, an increase of cash used by $27,198,723.

The primary driver of cash used in operating activities was the net loss of $25,522,618, which included the $13,000,000 Kingbird legal settlement paid in cash during 2025. Non-cash items partially offsetting the net loss included share based compensation of $1,932,967, impairment of investments of $1,127,500, depreciation of $28,378, bad debts of $64,530, and provision for expected credit losses of $67,948.

The most significant working capital movements were as follows:

*Accounts receivable — related party increased by $150,721*, reflecting higher amounts owed by Country Wine & Spirits in connection with CWS Platform product revenues, against which a provision for expected credit losses of $67,948 was recorded. The outstanding balance was subsequently offset against payables due to KBROS LLC in early 2026.

*Advance payment to distributor increased by $3,279,000*, reflecting amounts paid to two Hong Kong distributors — $529,000 and $2,750,000 in 2025 — for market access and distribution rights in the Asian market, recorded as advance payment to distributor. Subsequent to December 31, 2025, both arrangements were terminated and the full $3,279,000 was returned to the Company in April 2026.

*Due to/from related party decreased by $2,357,737*, reflecting net advances made to the Company's CEO ($50,000) and President ($2,314,450) during 2025, partially offset by amounts due to a related party credit card of $6,713. The amounts due from related parties were received back in April 2026.

*Accounts payable decreased by $454,124*, reflecting settlement of outstanding vendor payables during the year.

 

*Accrued and other payables — related party decreased by $5,210,025*, representing cash payments made during 2025 to settle retention, bonus, and settlement obligations that had been accrued in 2024 in connection with agreements entered into with executives, directors, and related parties. These were non-recurring cash outflows with no comparable amounts expected in future periods.

During the year ended December 31, 2024, we used net cash of $(6,618,417) in operating activities.

The primary driver was the net loss of $22,754,178. Non-cash items added back to reconcile net loss to cash used in operating activities included impairment of investments of $4,500,000 relating to the write-down of the DRNK Beverage Corp. investment, share based compensation of $2,533,256, write-off of advances to related party of $177,340, and gain on sale of marketable securities of $(5,674).

The most significant working capital movements during 2024 were as follows:

*Accounts receivable — related party decreased by $22,983*, reflecting collections on amounts owed by Country Wine & Spirits in connection with CWS Platform product revenues.

*Prepaid expenses decreased by $1,949,226*, as prepaid balances established in prior periods — primarily prepaid marketing and service costs — were amortized into expense during 2024.

*Accrued and other payables — related party increased by $5,971,000*, representing the accrual during the fourth quarter of 2024 of retention, bonus, and settlement obligations entered into with executives, directors, and related parties of the Company. These obligations were designed to retain key personnel and ensure continuity of leadership and governance. The cash settlement of substantially all of these obligations was deferred to 2025.

*Accrued and other payables increased by $789,126*, reflecting accrued professional fees, legal fees, and other vendor obligations at December 31, 2024 compared to the prior year.

*Accounts payable increased by $265,414*, reflecting higher outstanding vendor payables at year end.

*Accounts payable — related party decreased by $37,414*, reflecting payments made on outstanding related party payables during the year.

*<u>Net Cash (Used in) Provided by Investing Activities</u>*

Net cash used in investing activities was $(18,834,541) for the year ended December 31, 2025, compared to net cash provided by investing activities of $675,674 for the year ended December 31, 2024. The increase in cash used in investing activities was primarily attributable to the Company's funding of an aggregate of $18,494,000 through YHC Online Limited, a wholly-owned subsidiary, in connection with four joint venture agreements entered into in December 2025, comprising $14,670,000 funded to three formed joint venture entities and $3,824,000 advanced to Sequoia Equity Group Inc. toward a planned fourth joint venture, established to cooperate in the creation and monetization of multi-channel network ("MCN") content for digital platforms, including TikTok, targeting specific geographic markets. Additional investing outflows during 2025 included purchases of property and equipment of $340,541. Subsequent to December 31, 2025, in April 2026, all four agreements were terminated and the full amount of $18,494,000 previously funded was returned to the Company.

During the year ended December 31, 2024, net cash provided by investing activities of $675,674 consisted of proceeds of $7,764,197 from the sale of marketable securities and $670,000 from the return of deposits held in escrow, partially offset by purchases of marketable securities of $7,758,523.

*Net Cash Provided by Financing Activities*

Net cash provided by financing activities was $53,240,300 for the year ended December 31, 2025, compared to $4,265,184 for the year ended December 31, 2024. During 2025, the Company raised significant capital through: (i) issuance of common stock pursuant to its at-the-market ("ATM") offering program, generating proceeds of $43,199,134; (ii) issuance of common stock pursuant to registered direct offerings, generating net proceeds of $6,078,701; and (iii) exercise of warrants, generating proceeds of $4,051,415. Additionally, the Company incurred $88,950 in deferred offering costs during the year ended December 31, 2025 in connection with the registration of securities of SWOL Holdings Inc., its wholly-owned subsidiary, which are reflected as a use of cash in financing activities in the consolidated statement of cash flows.

During the year ended December 31, 2024, net cash provided by financing activities of $4,265,184 consisted of net proceeds of $1,543,079 from the sale of common stock pursuant to the at-the-market offering program and gross proceeds of $3,350,020 from the sale of securities pursuant to private placement agreements, partially offset by offering costs of $80,500 and repurchases of common stock of $547,415.

We have incurred net losses since inception and have financed our operations primarily through equity offerings. We expect to continue to incur losses for the foreseeable future as we execute on our growth strategy. Management plans to raise additional capital to fund operations through public or private equity offerings, debt financings, or other capital sources. However, there can be no assurance that we will be able to raise additional capital on terms acceptable to us, or at all. These conditions raise substantial doubt about our ability to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that are material to our investors.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide information required under this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements are contained on pages F-1 through F-30, which appear at the end of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

*Evaluation of Disclosure Controls and Procedures*

 

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms promulgated by the U.S. Securities and Exchange Commission (the "SEC"), and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Because of the inherent limitations to the effectiveness of any system of disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that all control issues and instances of fraud, if any, with a company have been prevented or detected on a timely basis. Even disclosure controls and procedures determined to be effective can only provide reasonable assurance that their objectives are achieved.

As of December 31, 2025, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) pursuant to Rule 13a-15 of the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are ineffective at the reasonable assurance level.

Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation. Therefore, it is difficult to effectively segregate accounting duties which comprises a material weakness in internal controls. We also lack effective board oversight and formal accounting controls for the timely and accurate closing of financial information.

To the extent reasonably possible given our limited resources, we intend to take measures to cure the aforementioned weaknesses, including, but not limited to, increasing the capacity of our qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate control over our Exchange Act reporting disclosures.

*Management's Report on Internal Controls over Financial Reporting*

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management utilized the criteria established in the Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to conduct an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have identified a material weakness due to lack of segregation of duties and have therefore concluded that our internal controls over financial reporting are not effective at the reasonable assurance level due to existence of following material weaknesses:

*Segregation of Duties.* Our size has prevented us from being able to employ sufficient resources to enable an adequate level of supervision and segregation of duties. It is therefore difficult to effectively segregate accounting duties, which constitutes a material weakness in internal controls.

*Insufficient Accounting and Financial Reporting Personnel.* The Company lacks sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. generally accepted accounting principles ("U.S. GAAP") and SEC reporting requirements. This deficiency has resulted in errors and adjustments identified during the audit process for the year ended December 31, 2025, and increases the risk that material misstatements in the consolidated financial statements would not be prevented or detected on a timely basis.

A material weakness is a deficiency, or combination of deficiencies, in our internal controls over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements would not be prevented or detected on a timely basis.

The Company is implementing measures designed to improve its internal control over financial reporting and remediate the identified material weaknesses, including the following:

● Increasing the capacity of qualified financial personnel to ensure that accounting policies and procedures are consistent across the organization and that we have adequate controls over our Exchange Act reporting disclosures.

● Providing more regular training on an ongoing basis to our accounting personnel covering a broad range of U.S. GAAP and SEC financial reporting topics.

● Implementing enhanced review procedures over the financial statement close process and disclosures to reduce the risk of misstatement.

There can be no assurance that these measures will be sufficient to remediate the identified material weaknesses or prevent future material weaknesses from arising.

As an emerging growth company, management's assessment of internal control over financial reporting was not subject to attestation by our independent registered public accounting firm.

*Changes in Internal Control over Financial Reporting*

There have been no changes in our internal control procedures over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during our year ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

During the quarter ended December 31, 2025, (A) no director or officer adopted or terminated any (i) "Rule 10b5-1 trading arrangement," as defined in Item 408(a) of Regulation S-K intending to satisfy the affirmative defense conditions of Rule 10b5-1(c) or (ii) "non-Rule 10b5-1 trading arrangement," as defined in Item 408(a) of Regulation S-K; and (B) there was no information that was required to be disclosed on a Current Report on Form 8-K during such quarter that was not so disclosed.

On August 15, 2024, LQR House Inc. (the "Company") received a subpoena from the Securities and Exchange Commission ("SEC"), as referenced in the SEC's letter dated August 15, 2024. The subpoena requests documents beginning on that date. The Company is cooperating with the investigation and intends to produce the requested documents. This action is not a formal litigation but is at the end of its preliminary stages It is too early to determine whether the SEC will proceed with a formal litigation at this time. No assurance can be given regarding the outcome of the investigation or its potential impact on the Company.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

Part III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table and biographical summaries set forth information, including principal occupation and business experience about our directors and executive officers as of April 15, 2026:

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| | | |
|:---|:---|:---|
| Name | Age | Position |
| Sean Dollinger | 46 | Chief Executive Officer |
| Kumar Abhishek | 49 | Chief Financial Officer |
| Jaclyn Hoffman | 36 | Chief Marketing Officer |
| Alexandra Hoffman | 37 | Secretary and Technical Writer |
| Yilin Lu | 44 | President and Director |
| Hong Chun Yeung | 42 | Director |
| Lijun Chen | 58 | Director, Chairman of the Board |
| Kah Loong Randy Yeo | 50 | Director |
| Hon Kit Anthony Kwong | 37 | Director |

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***Sean Dollinger*** has served as our Chief Executive Officer since January 2023, and he founded our company in January 2021. Mr. Dollinger has also been on the board of directors of Veg House Holdings Inc. since December 2022 and has served as its Chief Executive Officer from January 2023 to July 2023. Since December 2019 Mr. Dollinger has been involved in the founding and development of PlantX Life Inc. (CSE: VEGA), an exchange listed and public company in Canada. From June 2015 to February 2019, Mr. Dollinger acted as the Founder, Chief Executive Officer, and President of Lifeist Wellness Inc. (formerly Namaste Technologies Inc., or Namaste), a registered company under the Canadian securities laws that is a portfolio of wellness companies, where he oversaw the day-to-day operations of the company and its growth strategies. In October 2018, Mr. Dollinger became a part of a British Columbia Securities Commission compliance review of Namaste, a Canadian class action lawsuit, and a United States class action lawsuit, by way of his position as Chief Executive Officer and President of Namaste. For more information, see the risk factor in this Annual Report on Form 10-K that starts "*Our Chief Executive Officer and Director, Sean Dollinger, has been the subject of a compliance review that was initiated by the British Columbia Securities Commission, and has not formally been concluded.*" Mr. Dollinger has a wealth of experience in e-commerce, where he has had success across numerous different digital markets. We believe that Mr. Dollinger is qualified to serve on our Board due to his extensive operational experience, background in ecommerce, and international capital markets experience.

 

***Kumar Abhishek*** has served as our Chief Financial Officer since May 2023. Prior to joining our company as Chief Financial Officer, Mr. Abhishek was the owner and director of Boston Crest Private Limited, a knowledge processing output company located in India, where he simultaneously oversaw multiple companies' financial and daily operations and was responsible for managing a team of 10+ accountants who assisted controllers and auditors in ensuring the financial success of each company. Through his work at Boston Crest, Mr. Abhisek has served as the director of finance and operations at PlantX Life Inc., a publicly listed company in Canada, since January 2020. Through his work at Boston Crest, Mr. Abhishek also served as our director of finance and operations from January 2021 to May 2023,. Moreover, at Aspen Communications Pvt LTD, another knowledge processing output company in India, he served as director of finance and operations at Lifeist Wellness Inc. (formerly Namaste Technologies Inc.) from November 2015 to October 2020. Mr. Abhishek holds a Bachelor of Computer Applications degree from Ranchi University, Ranchi, Jharkhand, India.

 

 

***Jaclyn Hoffman*** has served as the Chief Marketing Officer for LQR House since January 2021, where she oversees internal design projects, as well as design projects for partnering brands. She is also responsible for brand development, brand communication, and digital campaigns. Since October 2021, Jaclyn has worked as the Creative Director at PlantX Life Inc, where she oversees all creative projects for PlantX and its subsidiaries. This role includes working closely with teams of graphic designers, copywriters, web developers, and email marketing specialists to support the overall marketing strategy with creative content. From November 2019 until September 2021, Ms. Hoffman worked as a Web Design and Development Manager for Falcon Marketing, LLC, a marketing and search engine optimization agency, where she worked with graphic designers and web developers to create optimized websites for a wide range of clients. From October 2018 to November 2019, Ms. Hoffman worked as a Branding Consultant for Joyva Corp, a specialty candy company founded in 1907, where she helped modernize the brand's identity. From September 2016 to August 2018, Ms. Hoffman worked as a graphic designer for Lakeside Photoworks, a print, photo and signage shop in New Orleans, LA, where she was responsible for building the brand identity of several local businesses. Ms. Hoffman holds a Bachelor of Arts from McGill University in Montreal, QC, and an Associate in Graphic Design degree from Delgado Community College in New Orleans, LA.

***Alexandra Hoffman*** has served as the Secretary and Technical Writer since May 2023. From January 2021 to May 2023. Since February, 2025, Ms. Hoffman has served as Chief Executive Officer of SWOL Holdings Inc., a wholly-owned subsidiary of the Company. Ms. Hoffman provided the Company with marketing and branding services. On May 1, 2023, Ms. Hoffman entered into an employment agreement with the Company as a Technical Writer. Since January to October 2023, she served as the Chief Marketing Officer of Veg House Holdings Inc. where she oversaw all marketing activities from branding to web design and messaging both print and digital. Since March 2023, Ms. Hoffman has serves as a member of the Board of Directors and since October 2023 as the Chief Executive Officer of Veg House Holdings Inc. Since April 2019, Ms. Hoffman has served as Chief Marketing Officer and Director at PlantX Life Inc. (CSE: VEGA), where she oversees all marketing activities, manages design & development teams, digital marketing teams, and PlantX Life's overall branding and messaging for all of its subsidiaries. Additionally, between June 2018 and June 2023, Ms. Hoffman has served as a Director of Marketing and Technical Writer at Falcon Marketing LLC, a marketing and search engine optimization agency, where she oversees all marketing activities within the agency and is responsible for Falcon Marketing's overall strategy as well as tailored strategies for its clients. From May 2017 to June 2018, Ms. Hoffman served as a technical Writer and Marketing Manager at Fabuwood Cabinetry Corporation, a kitchen cabinet fabrication company, where she managed a team of designers and developers, wrote strategic content for marketing manuals and search engine optimization. Ms. Hoffman holds a Bachelor of Commerce degree from Concordia University in Montreal, Quebec. We believe that Ms. Hoffman is qualified to serve on our Board due to her background in branding and product/platform positioning as well as her previous experience as a senior member of other public companies.

*Yilin Lu* has served as the member of our Board of Directors since December 2024. From June 2023 to October 2025, Mr. Lu served as the Founder and CEO of Senchi Morgan Capital Market and Senchi Morgan Asset Management, broker dealers and asset management firms. Mr. Lu started his investment banking career at Goldman Sachs in 2006. He joined China International Capital Corporation (CICC) later and was named the responsible officer of CICC US Securities (Hong Kong) Ltd in 2011. He also held positions as managing director with Cantor Fitzgerald Capital Markets in Hong Kong, Which he left to set up his own investment bank in 2016. From July 2018 to June 2023, Mr. Lu served as a Founder and the CEO of Cheung On Securities Limited, a broker dealer and asset management firm. He has over 15 years of experience in equity investment and trading. Mr. Lu is a Chartered Financial Analyst (CFA) and a Financial Risk Manager (FRM). We believe that Mr. Lu is qualified to serve on our Board due to his experience in portfolio management, investment analysis, financial analysis and reporting as well as financial advisory services.

***Hong Chun Yeung*** has served as the member of our Board of Directors since December 2024. Hong Chun Yeung has been serving as a Director of Zhonghui Anda CPA, a CPA firm, specializing in audit and assurance, starting August 2014. Prior to that, he had worked in international firm RSM Hong Kong for over five years. He has around 13-year experience in auditing and business consultation. He has extensive experience in providing audit and assurance service, M&A advisory service and pre-listing advisory service to listed and pre-listing companies operating in a variety of industries including manufacturing, mining, logistics, engineering, etc. Mr. Hong Chun Yeung holds a Bachelor of Business Administration degree in Accounting from Hong Kong Baptist University. He is a practicing member of the Hong Kong Institute of Certified Public Accountant. We believe that Mr. Hong Chun Yeung is qualified to serve on our Board due to his accounting experience as well as experience in providing advisory services to listed company.

***Lijun Chen*** has served as a Chairman of our Board of Directors since December 2024. Mr. Lijun Chen is a dedicated leader with a rich background in various sectors. Mr. Chen graduated from the Central University of Finance and Economics with a Bachelor's degree in Industrial Economics in 1989. He began his career at Shijiazhuang Changlu Trading Company, where he worked diligently as the Head of the Import and Export Trade Department and later as General Manager, contributing to the company's operations in coal trading and daily necessities, from October 1989 to May 2004. In 2004, Mr. Chen co-founded Fuli Real Estate Development Co. Ltd., where he served as Executive Director until May 2014. His efforts in this role helped shape the company's growth in the real estate market through thoughtful development and sales strategies. Following this, he founded Hebei Jiujiukang Biotechnology Development Co. Ltd. in 2014, focusing on biotechnology research and pharmaceutical production, where Mr. Chen served until July 2018. Since August 2018, Mr. Chen has been serving as the Chairman of Shenzhen Yihu Tea Technology Innovation Group Co. Ltd., where he is involved in e-commerce and technology promotion. His journey reflects a commitment to learning and adapting across different industries, and he remains grateful for the opportunities to contribute to each organization he has been part of. We believe that Mr. Chen is qualified to serve on our Board of Directors due to his extensive experience in various sectors.

***Kah Loong Randy Yeo*** has served as member of our Board since October 2025. Since December 2025, Mr. Yeo has served as Interim Chief Financial Officer of Toppoint Holdings Inc. is an accomplished finance executive with over 20 years of experience in public accounting, investment banking, asset management, and financial technology. He has led financial operations, accounting, and strategic growth for investment funds, fintech startups, and hedge funds. From 2021 to 2024, Mr. Yeo served as Chief Financial Officer, Chief Compliance Officer, and Head of Operations at Chiral Global Investors L.P., where he established and managed an institutional-quality asset management fund and implemented financial strategies that enhanced reporting transparency and operational scalability. Prior to that, he was U.S. Senior Controller at Riskfield Inc., where he helped guide the company through a $300 million IPO and streamlined cross-border financial operations. Mr. Yeo previously served as Chief Financial Officer and Head of Financial Control & Accounting at CITIC Securities International USA, LLC, overseeing financial reporting, forecasting, and investor relations. Earlier in his career, he held finance leadership roles at Direct Markets Holdings Corp., focusing on compliance, M&A integrations, and finance transformation initiatives. Mr. Yeo holds a Bachelor of Commerce in Accounting and Management Information Systems from Deakin University (Australia) and an MBA in Accounting from Maharishi University. We believe that Mr. Yeo is qualified to serve on our Board because of his extensive senior level experience in finance and accounting across asset management and financial technology, his public company board and committee service, and his role in guiding companies through significant capital markets transactions.

***Hon Kit Anthony Kwong*** has served as a member of our Board since March 2026. He is currently the founder and director of Luen Fat Accounting and Secretarial Service Limited, a Hong Kong professional services firm he established in June 2021 that provides accounting and tax advisory services to clients across a range of industries. From September 2020 to June 2021, Mr. Kwong served as a Manager in the Corporate Services division of Intertrust Hong Kong (now part of CSC), where he supervised teams in Hong Kong and India, handled client inquiries, provided commercial support to local entities (including full set accounts, local tax planning and HR support), and liaised with auditors, bankers and government authorities. From November 2016 to August 2020, he was an Assistant Manager in the Business and Consultancy Services division of Vistra Hong Kong, where he managed accounting and consolidation engagements, provided tax planning advice and tax return preparation, supported HR and payroll administration, and played an active role in the implementation of the firm's shared service center in China. From October 2012 to October 2016, Mr. Kwong was an accountant at Orangecorp Asia Management Limited, where he was responsible for full set accounts and tax filing preparation and coordinated with external auditors and banks on behalf of clients. Mr. Kwong is a Certified Public Accountant in Hong Kong, a Chartered Tax Advisor and a Certified Anti Money Laundering Specialist, and he holds a BBA (Hons) in Accountancy from The Hong Kong Polytechnic University. We believe that Mr. Kwong qualifies to serve on our Board because of his extensive experience in accounting, tax advisory and corporate services for a wide range of businesses, as well as his leadership in establishing and managing a professional services firm.

Family Relationships

Alexandra Hoffman, the Secretary and a Technical Writer for the Company and Chief Executive Officer of SWOL Holdings Inc., a wholly-owned subsidiary of the Company, and Jaclyn Hoffman, our Chief Marketing Officer, are sisters.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

● been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

● had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

● been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

● been found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

● been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

● been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.

Corporate Governance

 

*The Board's Role in Risk Oversight*

The Board of Directors oversees that the assets of our company are properly safeguarded, that the appropriate financial and other controls are maintained, and that our business is conducted wisely and in compliance with applicable laws and regulations and proper governance. Included in these responsibilities is the Board's oversight of the various risks facing our company. In this regard, our Board seeks to understand and oversee critical business risks. Our Board does not view risk in isolation. Risks are considered in virtually every business decision and as part of our business strategy. Our Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, purposeful and appropriate risk-taking is essential for our company to be competitive on a global basis and to achieve its objectives.

While the Board oversees risk management, company management is charged with managing risk. Management communicates routinely with the Board and individual directors on the significant risks identified and how they are being managed. Directors are free to, and indeed often do, communicate directly with senior management.

Our Board administers its risk oversight function as a whole by making risk oversight a matter of collective consideration. Much of this work has been delegated to committees, which will meet regularly and report back to the full Board. The audit committee oversees risks related to our financial statements, the financial reporting process, accounting and legal matters, the compensation committee evaluates the risks and rewards associated with our compensation philosophy and programs, and the nominating and corporate governance committee evaluates risk associated with management decisions and strategic direction.

 

*Independent Directors*

Nasdaq's rules generally require that a majority of an issuer's board of directors consist of independent directors. Our Board of Directors consists of five (5) directors, four (4) of whom are independent within the meaning of Nasdaq's rules. Yilin Lu is not independent within the meaning of Nasdaq's rules.

*Committees of the Board of Directors*

Our Board has established an audit committee, a compensation committee, and a nominating and corporate governance committee, each with its own charter approved by the Board. The committee charters have been filed as exhibits to this Annual Report on the Form 10-K. Each committee's charter is available on our website at *www.lqrhouse.com*.

In addition, our Board of Directors may, from time to time, designate one or more additional committees, which shall have the duties and powers granted to it by our Board of Directors.

*<u>Audit Committee</u>*

Kah Loong Randy Yeo, Hong Chun Yeung, and Lijun Chen, each of whom satisfies the "independence" requirements of Rule 10A-3 under the Exchange Act and Nasdaq's rules serve on our audit committee with Kah Loong Randy Yeo serving as the chairman. Our Board has determined that Mr. Yeo qualifies as an "audit committee financial expert." The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.

The audit committee is responsible for, among other things: (i) retaining and overseeing our independent accountants; (ii) assisting the Board in its oversight of the integrity of our financial statements, the qualifications, independence and performance of our independent auditors and our compliance with legal and regulatory requirements; (iii) reviewing and approving the plan and scope of the internal and external audit; (iv) pre-approving any audit and non-audit services provided by our independent auditors; (v) approving the fees to be paid to our independent auditors; (vi) reviewing with our chief executive officer and principal financial officer and independent auditors the adequacy and effectiveness of our internal controls; (vii) reviewing hedging transactions; and (viii) reviewing and assessing annually the audit committee's performance and the adequacy of its charter.

*<u>Compensation Committee</u>*

Lijun Chen, and Kah Loong Randy Yeo , each of whom satisfies the "independence" requirements of Rule 10C-1 under the Exchange Act and Nasdaq's rules serve on our compensation committee, with Lijun Chen serving as the chairman. The members of the compensation committee are also "outside directors" as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code, and "non-employee directors" within the meaning of Section 16 of the Exchange Act. The compensation committee assists the Board in reviewing and approving the compensation structure, including all forms of compensation relating to our directors and executive officers.

The compensation committee is responsible for, among other things: (i) reviewing and approving the remuneration of our executive officers; (ii) making recommendations to the Board regarding the compensation of our independent directors; (iii) making recommendations to the Board regarding equity-based and incentive compensation plans, policies and programs; and (iv) reviewing and assessing annually the compensation committee's performance and the adequacy of its charter.

 

*<u>Nominating and Corporate Governance Committee</u>*

Hong Chun Yeung, Lijun Chen, and Kah Loong Randy Yeo, each of whom satisfies the "independence" requirements of Nasdaq's rules, serve on our nominating and corporate governance committee, with Kah Loong Randy Yeo, serving as the chairman. The nominating and corporate governance committee assists the Board of Directors in selecting individuals qualified to become our directors and in determining the composition of the Board and its committees.

The nominating and corporate governance committee is responsible for, among other things: (i) identifying and evaluating individuals qualified to become members of the Board by reviewing nominees for election to the Board submitted by stockholders and recommending to the Board director nominees for each annual meeting of stockholders and for election to fill any vacancies on the Board; (ii) advising the Board with respect to Board organization, desired qualifications of Board members, the membership, function, operation, structure and composition of committees (including any committee authority to delegate to subcommittees), and self-evaluation and policies; (iii) advising on matters relating to corporate governance and monitoring developments in the law and practice of corporate governance; (iv) overseeing compliance with our code of ethics; and (v) approving any related party transactions.

The nominating and corporate governance committee's methods for identifying candidates for election to our Board of Directors (other than those proposed by our stockholders, as discussed below) include the solicitation of ideas for possible candidates from a number of sources - members of our Board of Directors, our executives, individuals personally known to the members of our Board of Directors, and other research. The nominating and corporate governance committee may also, from time-to-time, retain one or more third-party search firms to identify suitable candidates.

In making director recommendations, the nominating and corporate governance committee may consider some or all of the following factors: (i) the candidate's judgment, skill, experience with other organizations of comparable purpose, complexity and size, and subject to similar legal restrictions and oversight; (ii) the interplay of the candidate's experience with the experience of other Board members; (iii) the extent to which the candidate would be a desirable addition to the Board and any committee thereof; (iv) whether or not the person has any relationships that might impair his or her independence; and (v) the candidate's ability to contribute to the effective management of our company, taking into account the needs of our company and such factors as the individual's experience, perspective, skills and knowledge of the industry in which we operate.

Code of Ethics

We have adopted a code of ethics that applies to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer. Such code of ethics addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance with laws, regulations and policies, including disclosure requirements under the federal securities laws, and reporting of violations of the code.

A copy of the code of ethics has been filed as an exhibit to this Annual Report on Form 10-K. It is also available on our website at *www.lqrhouse.com*. We are required to disclose any amendment to, or waiver from, a provision of our code of ethics applicable to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions. We intend to use our website as a method of disseminating this disclosure as well as by SEC filings, as permitted or required by applicable SEC rules. Any such disclosure will be posted to our website within four (4) business days following the date of any such amendment to, or waiver from, a provision of our code of ethics.

Clawback Policy

On November 29, 2023, the Board of Directors adopted the LQR House Inc. Clawback Policy for the recovery of erroneously awarded incentive-based compensation (the "Clawback Policy"), with an effective date of November 29, 2023, in order to comply with Section 10D of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), Rule 10D-1 of the Exchange Act ("Rule 10D-1"), and the listing rules adopted by The Nasdaq Stock Market, LLC (collectively, the "Final Clawback Rules"). The Board was designated as the administrator of the Clawback Policy.

The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from current and former executive officers as defined in Rule 10D-1 ("Covered Officers") of the Company in the event that the Company is required to prepare an accounting restatement, in accordance with the Final Clawback Rules. The recovery of such compensation applies regardless of whether a Covered Officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement. Under the Clawback Policy, the Company may recoup from the Covered Officers erroneously awarded incentive-based compensation received within a lookback period of the three completed fiscal years preceding the date on which the Company is required to prepare an accounting restatement.

Insider Trading Policy

In March 2024, we adopted an insider trading policy governing the purchase, sale, and/or other dispositions of our securities by our directors, officers, and employees, to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards applicable to us. Our insider trading policy, among other things, prohibits our directors, officers, and employees from holding our securities in a margin account or pledging our securities as collateral for a loan. In addition, our insider trading policy prohibits employees, officers, and directors from engaging in put or call options, short selling, or similar hedging activities involving our stock.

Delinquent Section 16(a) Reports

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and persons who own more than 10% of our outstanding shares of common stock ("Ten Percent Holders") to file with the SEC reports of their share ownership and changes in their share ownership of our common stock. Directors, executive officers and Ten Percent Holders are also required to furnish us with copies of all ownership reports they file with the SEC. To our knowledge, based solely on a review of the copies of such reports furnished to us, the following directors, executive officers and Ten Percent Holders did not comply with all Section 16(a) filing requirements as of March 31, 2026: Kah Loong Randy Yeo.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

c concerning all cash and non-cash compensation that have been or will be awarded to, earned by or paid during our fiscal year ended December 31, 2025 and December 31, 2024 to our Chief Executive Officer (principal executive officer), our Chief Financial Officer, our Chief Marketing Officer and our President. We refer to these individuals as our "named executive officers" ("NEO").

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name and Principal Position** | **Year** | **Salary<br> ($)** | **Bonus<br> ($)** | **Stock <br> Awards<br> ($)** | **Option<br> Awards<br> ($)** | **All Other <br> Compensation<br> ($)** | **Total<br> ($)** |
| Sean Dollinger, | 2025 | 498644 | 100000 |  | – |  | 598644 |
| &nbsp;&nbsp;&nbsp;Chief Executive Officer | 2024 | 586700 | 200000 |  | – | 850000<sup>(1)</sup> | 1636700 |
| Kumar Abhishek, | 2025 | 72000 | 5000 |  | – |  | 77000 |
| &nbsp;&nbsp;&nbsp;Chief Financial Officer | 2024 | 73271 |  |  | – | 550000<sup>(2)</sup> | 623271 |
| Jaclyn Hoffman, | 2025 |  |  |  | – |  |  |
| &nbsp;&nbsp;&nbsp;Chief Marketing Officer | 2024 | 99600 |  |  | – | 285000<sup>(3)</sup> | 384600 |
| Yilin Lu | 2025 |  |  |  | – |  |  |
| &nbsp;&nbsp;&nbsp;President | 2024 |  |  | 79500<sup>(4)</sup> | – |  | 79500 |
| Alexandra Hoffman | 2025 | 226658 |  |  | – |  | 226658 |
| &nbsp;&nbsp;&nbsp;Secretary and Technical Writer | 2024 | 196686 |  |  | – |  | 196686 |

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<sup>(1)</sup> In October 2024, the Company entered into a retention agreement with its Chief Executive Officer, and entities affiliated with the CEO, whereby a retention bonus of $850,000 was awarded for continued services. As of December 31, 2024, $800,000 had been unpaid and was later paid in January 2025.

<sup>(2)</sup> In October 2024, the Company entered into a retention agreement with its Chief Financial Officer whereby a retention bonus of $550,000 was awarded for continued services. As of December 31, 2024, $250,000 remained unpaid and has been paid in 2025.

<sup>(3)</sup> In October 2024, the Company entered into a retention agreement with its Chief Marketing Officer whereby a retention bonus of $285,000 was awarded for continued services. As of December 31, 2024, $255,000 remained unpaid. Of this amount, $100,000 was paid in January 2025, and $155,000 remains unpaid.

<sup>(4)</sup> In December 2024, Yilin Lu was appointed to the Board of Directors and received a grant of 1,429 restricted stock units with a grant-date fair value of $79,500, vesting in eight equal quarterly installments commencing in the first quarter of 2025. Effective August 6, 2025, Mr. Lu was appointed President of the Company. No additional compensation arrangements were entered into in connection with his appointment as President during the year ended December 31, 2025.

Employment Agreements

We have executed the following employment agreements and consulting agreements with our NEOs. The material terms of each of those arrangements are summarized below. The summaries are not complete description of all provisions of the employment arrangements and are qualified in their entirety by reference to the written employment arrangements, each filed as an exhibit to this Annual Report on Form 10-K.

*Sean Dollinger*

Under our employment agreement dated March 29, 2023, as amended on November 1, 2023, with our Chief Executive Officer, Sean Dollinger, effective as of the date of the consummation of the Company's IPO, we agreed that, for a 1-year term renewed automatically, unless terminated earlier in accordance with its terms, we will pay Mr. Dollinger an annual base salary (the "Base Salary") of $540,000. Mr. Dollinger will also be entitled to the following types of bonuses:

(i) an annual incentive bonus as determined by the Board of Directors within thirty (30) days of the filing of the Company's annual reports with the U.S. Securities and Exchange Commission (the "SEC"); and

(ii) a monthly performance bonuses (the "Bonuses"), payable on or before the fifteenth (15th) day of the calendar month immediately following the calendar month with respect to which the amount of the performance bonus is determined, commencing with the calendar month ending on November 30, 2023, in an amount equal to One Hundred Thousand Dollars ($100,000.00) for each One Million Dollars ($1,000,000.00) oft gross revenue generated through sales made on or through the website associated with the domain name www.cwspirits.com (or any successor website)("Website Revenue") for such calendar month; provided, that, within fifteen (15) days of the filing of each of the Company's quarterly reports with the SEC, the amount of such bonuses for the months during the applicable fiscal quarter shall be adjusted, upwards or downwards, as the case may be, based on the Website Revenue for the applicable quarter as reported by the Company in its quarterly filing with the SEC for such quarter. Any such downwards adjustment shall require Mr. Dollinger to pay the amount of such downwards adjustment to the Company within ten (10) days of the determination of such adjustment. Any such upwards adjustment shall require the Company to pay the amount of such upwards adjustment to Mr. Dollinger within ten (10) days of the determination of such adjustment. Notwithstanding the foregoing, in no event shall the total amount of the Bonuses paid to the Executive in any one fiscal year exceed Five Million Dollars ($5,000,000.00).

The Company provides standard indemnification and directors' and officers' insurance in addition to the ability to participate in standard employee benefits, such as health, medical, dental and visions insurance. Mr. Dollinger can be terminated without cause and upon death or disability. Mr. Dollinger is also subject to certain confidentiality and non-competition provisions.

If Mr. Dollinger's employment agreement is terminated by the Company without cause, all compensation payable to Mr. Dollinger shall cease as of the date of termination specified in the Company's notice and the Company shall pay Mr. Dollinger, the following sums: (i) the Base Salary on the date of termination specified in the Company's notice (the "Termination Date") for the shorter of (x) six months and (y) the remainder of the term of the employment agreement (the "Term") (the applicable period being referred to as the "Severance Period"), payable in monthly installments; (ii) benefits under group health and life insurance plans in which Mr. Dollinger participated prior to termination through the Severance Period; (iii) all previously earned, accrued, and unpaid benefits from the Company and its employee benefit plans, including any such benefits under the Company's pension, disability, and life insurance plans, policies, and programs; and (iv) so long as the Company has achieved its budgeted EBITDA level for the period commencing with the end of the Company's immediately previous fiscal year through the Termination Date, an amount equal to the product of the bonus paid to Mr. Dollinger in respect of the immediately preceding fiscal year times the quotient obtained by dividing (x) the number of full calendar months occurring since the end of the immediately previous fiscal year through the Termination Date, by (y) 12.

If, prior to the date on which the Company's obligations to pay Mr. Dollinger the Base Salary on the Termination Date cease, Mr. Dollinger certain covenants as listed in his employment agreement, then the Company shall have no obligation to make any of the payments that remain payable by the Company in the form of Base Salary or benefits on or after the date of such violation. The payment of severance may be conditioned by the Company on the delivery by Mr. Dollinger of a release of any and all claims that Mr. Dollinger may have against the Company.

If the Employment Agreement is terminated by the Company for cause, death or disability, Mr. Dollinger (or his estate or representative as applicable) shall not receive the Base Salary but will receive all other sums.

*Kumar Abhishek*

Under our employment agreement dated May 1, 2023 with our Chief Financial Officer, Kumar Abhishek, effective as of May 1, 2023, we agreed that, for a 1-year term renewed automatically, unless terminated earlier in accordance with its terms, we will pay Mr. Abhishek an annual base salary (the "Base Salary") of $72,000, which will increase by no less than 5% on each anniversary of his employment. Mr. Abhishek will be eligible to receive an annual incentive bonus as determined by the Board of Directors within thirty (30) days of filing of the Company's annual reports. Mr. Abhishek is entitled to 3 weeks of paid vacation for the first year of his employment and 4 weeks of paid vacation for the second and third years of his employment. The Company also provides standard indemnification and directors' and officers' insurance in addition to the ability to participate in standard employee benefits, such as health, medical, dental and visions insurance. Mr. Abhishek can be terminated without cause and upon death or disability. Mr. Abhishek will also be entitled to certain severance payments if his employment is terminated with or without cause and on death or disability. Mr. Abhishek is also subject to certain confidentiality and non-competition provisions. Mr. Abhishek's employment agreement with the Company is conditioned upon him working at least 35 hours per week as our Chief Financial Officer.

If Mr. Abhishek's employment agreement is terminated by the Company without cause, all compensation payable to Mr. Abhishek shall cease as of the date of termination specified in the Company's notice and the Company shall pay Mr. Abhishek, the following sums: (i) the Base Salary on the date of termination specified in the Company's notice (the "Termination Date") for the shorter of (x) six months and (y) the remainder of the term of the employment agreement (the "Term") (the applicable period being referred to as the "Severance Period"), payable in monthly installments; (ii) benefits under group health and life insurance plans in which Mr. Abhishek participated prior to termination through the Severance Period; (iii) all previously earned, accrued, and unpaid benefits from the Company and its employee benefit plans, including any such benefits under the Company's pension, disability, and life insurance plans, policies, and programs; and (iv) so long as the Company has achieved its budgeted EBITDA level for the period commencing with the end of the Company's immediately previous fiscal year through the Termination Date, an amount equal to the product of the bonus paid to Mr. Abhishek in respect of the immediately preceding fiscal year times the quotient obtained by dividing (x) the number of full calendar months occurring since the end of the immediately previous fiscal year through the Termination Date, by (y) 12.

If, prior to the date on which the Company's obligations to pay Mr. Abhishek the Base Salary on the Termination Date cease, Mr. Abhishek certain covenants as listed in his Employment Agreement, then the Company shall have no obligation to make any of the payments that remain payable by the Company in the form of Base Salary or benefits on or after the date of such violation. The payment of severance may be conditioned by the Company on the delivery by Mr. Abhishek of a release of any and all claims that Mr. Abhishek may have against the Company.

If the employment agreement is terminated by the Company for cause, death or disability, Mr. Abhishek (or his estate or representative as applicable) shall not receive the Base Salary but will receive all other sums.

*Jaclyn Hoffman*

Under our employment agreement dated May 1, 2023 with our Chief Marketing Officer, Jaclyn Hoffman effective as of May 1, 2023, we agreed that, for a 1-year term renewed automatically, unless terminated earlier in accordance with its terms, we will pay Ms. Hoffman an annual base salary (the "Base Salary") of $63,000, which will increase by no less than 5% on each anniversary of her employment. Ms. Hoffman will be eligible to receive an annual incentive bonus as determined by the Board of Directors within thirty (30) days of filing of the Company's annual reports. Ms. Hoffman is entitled to 3 weeks of paid vacation for the first year of her employment and 4 weeks of paid vacation for the second and third years of her employment. The Company also provides standard indemnification and directors' and officers' insurance in addition to the ability to participate in standard employee benefits, such as health, medical, dental and visions insurance. Ms. Hoffman can be terminated without cause and upon death or disability. Ms. Hoffman will also be entitled to certain severance payments if her employment is terminated with or without cause and on death or disability. Ms. Hoffman is also subject to certain confidentiality and non-competition provisions.

If Ms. Hoffman's employment agreement is terminated by the Company without cause, all compensation payable to Ms. Hoffman shall cease as of the date of termination specified in the Company's notice (the "Termination Date") and the Company shall pay Ms. Hoffman, the following sums: (i) the Base Salary on the Termination Date for the shorter of (x) six months and (y) the remainder of the term of the employment agreement (the "Term") (the applicable period being referred to as the "Severance Period"), payable in monthly installments; (ii) benefits under group health and life insurance plans in which Ms. Hoffman participated prior to termination through the Severance Period; (iii) all previously earned, accrued, and unpaid benefits from the Company and its employee benefit plans, including any such benefits under the Company's pension, disability, and life insurance plans, policies, and programs; and (iv) so long as the Company has achieved its budgeted EBITDA level for the period commencing with the end of the Company's immediately previous fiscal year through the Termination Date, an amount equal to the product of the bonus paid to Ms. Hoffman in respect of the immediately preceding fiscal year times the quotient obtained by dividing (x) the number of full calendar months occurring since the end of the immediately previous fiscal year through the Termination Date, by (y) 12.

If, prior to the date on which the Company's obligations to pay Ms. Hoffman the Base Salary on the Termination Date cease, Ms. Hoffman certain covenants as listed in her Employment Agreement, then the Company shall have no obligation to make any of the payments that remain payable by the Company in the form of Base Salary or benefits on or after the date of such violation. The payment of severance may be conditioned by the Company on the delivery by Ms. Hoffman of a release of any and all claims that Ms. Hoffman may have against the Company.

If the employment agreement is terminated by the Company for cause, death or disability, Ms. Hoffman (or her estate or representative as applicable) shall not receive the Base Salary but will receive all other sums.

***Yilin Lu***

 ****

We do not have a written employment agreement with our President, Yilin Lu. Mr. Lu's employment is at will and his compensation is determined from time to time by the Company.

Outstanding Equity Awards at Fiscal Year-End

As of December 31, 2025, no NEO holds any options. No NEO holds any RSUs.

Policies and Practices for Granting Certain Equity Awards

Our policies and practices regarding the granting of equity awards are carefully designed to ensure compliance with applicable securities laws and to maintain the integrity of our executive compensation program. The Compensation Committee is responsible for the timing and terms of equity awards to executives and other eligible employees.

The timing of equity award grants is determined with consideration to a variety of factors, including but not limited to, the achievement of pre-established performance targets, market conditions and internal milestones. The Company does not follow a predetermined schedule for the granting of equity awards; instead, each grant is considered on a case-by-case basis to align with the Company's strategic objectives and to ensure the competitiveness of our compensation packages.

In determining the timing and terms of an equity award, the Board or the Compensation Committee may consider material nonpublic information to ensure that such grants are made in compliance with applicable laws and regulations. The Board's or the Compensation Committee's procedures to prevent the improper use of material nonpublic information in connection with the granting of equity awards include oversight by legal counsel and, where appropriate, delaying the grant of equity awards until the public disclosure of such material nonpublic information.

The Company is committed to maintaining transparency in its executive compensation practices and to making equity awards in a manner that is not influenced by the timing of the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. The Company regularly reviews its policies and practices related to equity awards to ensure they meet the evolving standards of corporate governance and continue to serve the best interests of the Company and its shareholders.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serve as a member of the Compensation Committee of our Board of Directors (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board of Directors or Compensation Committee.

Director Compensation

The following summary Board compensation table provides information regarding the Board compensation paid during our fiscal year ended December 31, 2025 to our Board members. Only our independent directors received compensation for being directors during fiscal year 2025.

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| | | | |
|:---|:---|:---|:---|
|  | **Cash<br> Compensation** | **Equity<br> Compensation** | **Total<br> Compensation** |
| Hong Chun Yeung (1) | $19136 | $&nbsp;&nbsp;&nbsp;&nbsp; - | $19136 |
| Yilin Lu (1) |  |  |  |
| Lijun Chen (1) |  |  |  |
| Jing Lu (1) (2) | 21000 |  | 21000 |
| James O'Brien (3) | 18000 |  | 18000 |
| Kah Loong Randy Yeo (4) | - | - | - |
|  | $58136 | $- | $58136 |

---

(1) In December 2024, Hong Chun Yeung, Yilin Lu, Lijun Chen and Jing Lu were appointed as directors of the Board. Each of them is entitled to receive annual cash fee of $36,000 to be paid in monthly installments. In addition, each of these directors shall also receive equity compensation in form of 1,429 RSUs vesting in eight (8) equal quarterly installments commencing in the first quarter of 2025, subject to continued services. The grant-date fair value of such RSU awards was $79,500 per director and was reported in the fiscal year 2024 director compensation table. No new equity awards were granted to directors during fiscal year 2025.

(2) Dr. Jing Lu resigned from the Board of Directors effective October 15, 2025. Cash fees reflect actual payments made during fiscal year 2025.

(3) James O'Brien ceased service as a director following the Annual General Meeting held on May 30, 2025. Cash fees reflect monthly director fees paid through the date of his cessation of service.

(4) Kah Loong Randy Yeo was appointed to the Board of Directors on October 20, 2025. No compensation was paid or accrued to Mr. Yeo during fiscal year 2025.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information, as of April 15, 2026 with respect to the holdings of (1) each person, or group of affiliated persons, who is the beneficial owner of more than 5% of Company voting stock, (2) each of our directors, (3) each executive officer, and (4) all of our current directors and executive officers as a group.

We have determined beneficial ownership in accordance with the rules and regulations of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting thereof, or to dispose or direct the disposition thereof or has the right to acquire such powers within 60 days. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days of March 31, 2026 are deemed to be outstanding and beneficially owned by the person holding the options. Shares issuable pursuant to stock options or warrants are deemed outstanding for computing the percentage ownership of the person holding such options or warrants, but are not deemed outstanding for computing the percentage ownership of any other person. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and entities named in the table below will have sole voting and investment power with respect to all shares of common stock that they will beneficially own, subject to applicable community property laws.

Our calculation of the number of shares and percentage of beneficial ownership is based on 21,371,656 shares of common stock outstanding as of April 15, 2026.

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| | | | |
|:---|:---|:---|:---|
| Name and Address of Beneficial Owner<sup>(1)</sup> | Title | Number<sup>(2)</sup> | Percent |
| Officers and Directors |  |  |  |
| Sean Dollinger<sup>(3)</sup> | Chief Executive Officer | 2102 | \*% |
| Kumar Abhishek | Chief Financial Officer | 12 | \*% |
| Jaclyn Hoffman | Chief Marketing Officer | 42 | \*% |
| Alexandra Hoffman | Secretary and Technical Writer | 24 | \*% |
| Yilin Lu<sup>(4)</sup> | Director | 2000537 | 9.36% |
| Hong Chun Yeung<sup>(5)</sup> | Director | 537 | \*% |
| Lijun Chen<sup>(6)</sup> | Director | 537 | \*% |
| Kah Loong Randy Yeo | Director | -% |  |
| Hon Kit Anthony Kwong | Director | -% |  |
| All Officers and Directors as a Group (total of 9 persons) | All Officers and Directors as a Group (total of 9 persons) | 2004328 | 9.37% |
| 5% Beneficial Owners of a Class of Voting Stock | 5% Beneficial Owners of a Class of Voting Stock |  |  |

---

\* Less than 1%

<sup>(1)</sup> Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o our Company, LQR House Inc., 6538 Collins Ave. Suite 344, Miami Beach, FL 33141.

(2) Based on 21,371,656 shares of common stock outstanding as of April 15, 2026.

(3) Consists of (i) 624 shares of common stock issued upon vesting of RSUs granted to Mr. Dollinger under the 2021 Plan and (ii) 90 RSUs scheduled to vest and convert into shares of common stock of the Company within 60 days of March 31, 2026.

<sup>(4)</sup> Consists of 179 RSUs, scheduled to vest and convert into shares of common stock of the Company within 60 days of March 31, 2026, in accordance with the terms of independent director agreement signed by the Company and the director on December 19, 2024. Pursuant to the agreement Mr. Yilin Lu is entitled to receive equity compensation in form of 1,429 RSUs vesting in eight (8) equal quarterly installments commencing in first quarter of 2025.

(5) Consists of 179 RSUs, scheduled to vest and convert into shares of common stock of the Company within 60 days of March 31, 2026, in accordance with the terms of independent director agreement signed by the Company and the director on December 19, 2024. Pursuant to the agreement Mr. Yeung is entitled to receive equity compensation in form of 1,429 RSUs vesting in eight (8) equal quarterly installments commencing in first quarter of 2025.

(6) Consists of 179 RSUs, scheduled to vest and convert into shares of common stock of the Company within 60 days of March 31, 2026, in accordance with the terms of independent director agreement signed by the Company and the director on December 19, 2024.Pursuant to the agreement Mr. Chen is entitled to receive equity compensation in form of 1,429 RSUs vesting in eight (8) equal quarterly installments commencing in first quarter of 2025.

Equity Plan Information

See Part II, Item 5 "Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities" of this Annual Report on Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Party Transactions

Set forth below is a description of certain relationships and related person transactions since January 1, 2023, between us or our subsidiaries, and our directors, executive officers and holders of more than 5% of our voting securities that involve the lower of $120,000 or 1% of the average of total assets in the last two fiscal years. We believe that all of the following transactions were entered into with terms as favorable as could have been obtained from unaffiliated third parties.

● We, CWS, and Ssquared are parties to an Exclusive Marketing Agreement dated April 1, 2021. Pursuant to that agreement, CWS and Ssquared granted us exclusive marketing rights regarding any of CWS and Ssquared's products. Pursuant to that agreement, Sean Dollinger, our Chief Executive Officer and Director, and 50% owner of Ssquared, received 33,333 shares of our common stock (8,334 shares of common stock on a post-split basis), and KBROS, LLC, the owner of CWS and 50% owner of Ssquared, received 133,333 shares of our common stock (33,333 shares of common stock on a post-split basis).

● Mr. Gregory Hoffman, a brother of a brother of Ms. Jaclyn Hoffman, our Chief Marketing Officer, and Ms. Alexandra Hoffman, our Secretary and Technical Writer, entered into an advisor agreement with the Company on June 1, 2023, pursuant to which the Company issued to Mr. Hoffman 12,500 shares of common stock.

● We and 1226053 B.C. Ltd, our shareholder, are parties to a debt settlement agreement, dated September 27, 2023, pursuant to which the Company issued to 1226053 B.C. Ltd 19,130 shares of common stock. 1226053 B.C. Ltd is a legal entity owned and controlled by Mr. Avtar Dhaliwal, a brother of Mr. Jay Dhaliwal, a former Director on our Board.

● In August 2023, the Company entered into an independent contractor agreement with Catalyst LLC, for investor relations and advisory services with an entity for up to $1,000,000, for which the Company paid $500,000 through December 31, 2023. The contractor co-owns a company with the Company's Chief Executive Officer, which is not controlled by LQR. Therefore, the contractor and his related entities are considered affiliates.

● On November 1, 2023, LQR House Acquisition Corp. (the "Buyer"), a wholly owned subsidiary of the Company, and Ssquared entered into a Domain Name Transfer Agreement pursuant to which, Ssquared sold to the Buyer all right, title, and interest in and to the domain name www.cwspirits.com and trademark rights associated with the domain name in any jurisdiction, all Internet traffic through the domain name and all website content, together with any goodwill associated therewith in exchange for the payment by the Buyer of the purchase price of $10,000. The Company's Chief Executive Officer and Director, Sean Dollinger, owns 50% of the equity of Ssquared, and the other 50% is owned by a minority shareholder of the Company, who is considered a related party.

● On November 1, 2023, the Company entered into the Product Handling Agreement with KBROS. KBROS acts as the Company's Product Handler, whereby they are entitled to compensation of $40,000 per month plus reimbursement for shipping and handling fees incurred by them for orders fulfilled through the CWS Platform, and bonus for reaching certain revenue milestones. The spouse of the Company's former Chief Executive Officer and Director, is the President and controlling stockholder of KBROS, the managing member and director of Ssquared, and a minority shareholder with the Company.

● On November 1, 2023, the Company entered into the Funding Commitment Agreement with KBROS. Pursuant to this agreement, the Company committed to provide annual funding to the Product Handler from time to time in the minimum amount of $2,500,000 to enable the Product Handler to purchase inventory from Company-approved vendors. The spouse of the Company's former Chief Executive Officer and Director, is the President and controlling stockholder of KBROS, the managing member and director of Ssquared, and a minority shareholder with the Company.

● On October 15, 2024, we entered into a Securities Purchase Agreement with David E. Lazar, our former President and Director, pursuant to which he acquired 31,480 shares of common stock (which represented approximately 19.99% of our outstanding stock on October 15, 2024) at a price of $19.25 per share for proceeds of $606,000.

● In October 2024, the Company entered into a settlement and release agreement with KBROS, and its controlling stockholder, for an aggregate amount equal to $4,100,000. The spouse of the Company's former Chief Executive Officer and Director, is the President and controlling stockholder of KBROS, the managing member and director of Ssquared, and a minority shareholder with the Company.

● In October 2024, the Company entered into a retention agreement with its Chief Financial Officer whereby a retention bonus of $550,000 was awarded for continued services.

● In October 2024, the Company entered into a retention agreement with its Chief Executive Officer, and entities affiliated with the CEO, whereby a retention bonus of $850,000 was awarded for continued services.

● In October 2024, the Company entered into a retention agreement with its Chief Marketing Officer, Jaclyn Hoffman, whereby a retention bonus of $285,000 was awarded for continued services.

● In October 2024, the Company entered into a retention agreement with its Director, Alexandra Hoffman, whereby a retention bonus of $600,000 was awarded for continued services.

● In October 2024, the Company entered into a settlement agreement with South Doll LP, its former landlord, pursuant to which the Company agreed to pay this entity $40,000. Sean Dollinger our Chief Executive Officer and Director, owns an entity that acts as a general partner of South Doll LP.

● In October 2024, the Company entered into settlement agreement and general and mutual release with its independent director, James O'Brien, pursuant to which the Company settled outstanding liabilities amongst the parties in the amount of $30,000.

● In October 2024, the Company entered into settlement agreement and general and mutual release with each of the following former independent directors of the Company: James Huber and Jay Dhaliwal, pursuant to which the Company settled outstanding liabilities with each of the directors for a amount of $30,000.

Independence of the Board of Directors

Our Board of Directors has determined that a majority of the members of our Board of Directors, including Hong Chun Yeung, Lijun Chen, Kah Loong Randy Yeo and Hon Kit Anthony Kwong, are "independent" as that term is defined under applicable SEC rules and regulations.

In addition, each of the members of each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee are independent, as determined in accordance with the applicable independence requirements for such committee.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit and Non-Audit Fees

Enrome LLP served as our independent registered public accounting firm to audit our books and accounts for the fiscal year ended December 31, 2025. dbb*mckennon* served as our independent registered public accounting firm to audit our books and accounts for the fiscal year ended December 31, 2024. The table below presents the aggregate fees paid for professional services for fiscal years 2025 and 2024.

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| | | |
|:---|:---|:---|
|  | **2025** | **2024** |
| Audit fees | $200000 | $167247 |
| Audit-related fees | 165600 | - |
| Total fees | $365600 | $167247 |

---

In the above tables, "audit fees" are fees billed for services provided related to the audit of our annual financial statements, quarterly reviews of our interim financial statements, and services normally provided by the independent accountant in connection with regulatory filings or engagements for those fiscal periods. "Audit-related fees" are fees not included in audit fees that are billed by the independent accountant for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. "All other fees" are fees billed by the independent accountant for products and services not included in the foregoing categories. All audit fees are pre-approved by the audit committee.

PART IV

ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements and Financial Statement Schedules are set forth under Part II, Item 8 of this report.

(b) Exhibits

See the Exhibit Index immediately preceding the signature page of this Annual Report on Form 10-K.

ITEM 16. FORM 10-K SUMMARY

None.

EXHIBIT INDEX

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| | |
|:---|:---|
| Exhibit No. | Description |
| 2.1 | [Plan of Conversion of LQR House Inc., dated as of January 26, 2023 (incorporated by reference to Exhibit 2.1 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex2-1_lqr.htm) |
| 2.2 | [Plan of Conversion of LQR House Inc., dated as of March 2, 2026 (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K filed with the SEC on March 6, 2026).](https://www.sec.gov/Archives/edgar/data/1843165/000121390026024783/ea028043101ex2-1.htm) |
| 3.1 | [Articles of Incorporation of LQR House Inc. filed on February 3, 2023 (incorporated by reference to Exhibit 3.1 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex3-1_lqr.htm) |
| 3.2 | [Certificate of Amendment to Articles of Incorporation of LQR House Inc. filed on March 29, 2023 (incorporated by reference to Exhibit 3.2 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex3-2_lqr.htm) |
| 3.3 | [Certificate of Amendment to Articles of Incorporation of LQR House Inc. filed on June 5, 2023 (incorporated by reference to Exhibit 3.3 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex3-3_lqr.htm) |
| 3.4 | [Certificate of Correction to the Certificate of Amendment to Articles of Incorporation filed on April 11, 2023(incorporated by reference to Exhibit 3.4 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex3-4_lqr.htm) |
| 3.5 | [Certificate of Change Pursuant to NRS 78.209 of LQR House filed on November 28, 2023 (incorporated by reference to Exhibit 3.1 of the Company's current report on the form 8-K filed with the SEC on December 1, 2023)](https://www.sec.gov/Archives/edgar/data/1843165/000121390023092007/ea189398ex3-1_lqrhouse.htm) |
| 3.6 | [Amendment to Articles of Incorporation of LQR House Inc. filed on February 13, 2024 (incorporated by reference to Exhibit 3.8 of the Company's Annual Report on Form 10-K filed with the SEC on April 1, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024028934/ea020221501ex3-8_lqrhouse.htm) |
| 3.7 | [Certificate of Change Pursuant to NRS 78.209 of LQR House filed on April 16, 2025 (incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K filed with the SEC on April 21, 2025).](https://www.sec.gov/Archives/edgar/data/1843165/000121390025033739/ea023887601ex3-1_lqrhouse.htm) |
| 3.8 | [Certificate of Amendment to the Articles of Incorporation of LQR House Inc., dated June 2, 2025 (incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K filed with the SEC on June 4, 2025)](https://www.sec.gov/Archives/edgar/data/1843165/000121390025051152/ea024464401ex3-1_lqrhouse.htm) |
| 3.9 | [Delaware Certificate of Conversion of LQR House Inc. as filed with the Delaware Secretary of State on March 2, 2026 (incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K filed with the SEC on March 6, 2026).](https://www.sec.gov/Archives/edgar/data/1843165/000121390026024783/ea028043101ex3-1.htm) |
| 3.10 | [Delaware Certificate of Incorporation of LQR House Inc. as filed with the Delaware Secretary of State on March 2, 2026 (incorporated by reference to Exhibit 3.2 of the Company's Current Report on Form 8-K filed with the SEC on March 6, 2026).](https://www.sec.gov/Archives/edgar/data/1843165/000121390026024783/ea028043101ex3-2.htm) |
| 3.11 | [Bylaws of LQR House Inc. (incorporated by reference to Exhibit 3.5 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex3-5_lqr.htm) |
| 3.12 | [First Amendment to the By-laws of the Company dated November 13, 2023 (incorporated by reference to Exhibit 3.1 of the Company's quarterly report on the form 10-Q filed with the SEC on November 16, 2023)](http://www.sec.gov/Archives/edgar/data/1843165/000121390023087732/f10q0923ex3-1_lqrhouse.htm) |
| 3.13 | [Delaware Bylaws of LQR House dated as of March 2, 2026 (incorporated by reference to Exhibit 3.3 of the Company's Current Report on Form 8-K filed with the SEC on March 6, 2026).](https://www.sec.gov/Archives/edgar/data/1843165/000121390026024783/ea028043101ex3-3.htm) |
| 4.1 | [Description of Registrant's securities (incorporated by reference to Exhibit 4.1 of the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2025)](https://www.sec.gov/Archives/edgar/data/1843165/000121390025026396/ea023489201ex4-1_lqrhouse.htm) |
| 4.2 | [Form of Warrant dated December 30, 2024 (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K filed with the SEC on January 3, 2025)](https://www.sec.gov/Archives/edgar/data/1843165/000121390025000780/ea022668101ex4-1_lqr.htm) |
| 10.1 | [Packaging of Origin Co-Responsibility Agreement dated July 6, 2020, between Leticia Hermosillo Ravelero and Sean Dollinger (incorporated by reference to Exhibit 10.3 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-3_lqr.htm) |
| 10.2 | [Shared Responsibility & Bonding Agreement dated March 19, 2021, between Leticia Hermosillo Ravelero and Dollinger Innovations Inc. (incorporated by reference to Exhibit 10.4 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-4_lqr.htm) |
| 10.3 | [Exclusive License Agreement dated May 18, 2020 by and between Dollinger Holdings and Dollinger Innovations (incorporated by reference to Exhibit 10.5 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-5_lqr.htm) |
| 10.4 | [Product Distribution Agreement, dated July 1, 2020, between Dollinger Holdings and Country Wine & Spirits Inc. (incorporated by reference to Exhibit 10.6 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-6_lqr.htm) |
| 10.5 | [Asset Purchase Agreement, dated May 31, 2021, between LQR House Inc. and Dollinger Holdings LLC (incorporated by reference to Exhibit 10.7 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-7_lqr.htm) |

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| | |
|:---|:---|
| 10.6 | [Asset Purchase Agreement, dated March 19, 2021, among LQR House Inc. and Dollinger Innovations Inc., Dollinger Holdings LLC and Sean Dollinger (incorporated by reference to Exhibit 10.8 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-8_lqr.htm) |
| 10.7 | [Exclusive Marketing Agreement, dated April 1, 2021, by and among Country Wine & Spirits, Inc., Ssquared Spirits, LLC, and LQR House, Inc. (incorporated by reference to Exhibit 10.9 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-9_lqr.htm) |
| 10.8† | [Employment Agreement between LQR House Inc. and Sean Dollinger, dated March 29, 2023 (incorporated by reference to Exhibit 10.10 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-10_lqr.htm) |
| 10.9† | [Employment Agreement between LQR House Inc. and Kumar Abhishek, dated May 1, 2023 (incorporated by reference to Exhibit 10.11 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-11_lqr.htm) |
| 10.10† | [Employment Agreement between LQR House Inc. and Jaclyn Hoffman, dated May 1, 2023 (incorporated by reference to Exhibit 10.12 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-12_lqr.htm) |
| 10.11† | [Employment Agreement between LQR House Inc. and Alexandra Hoffman, dated May 1, 2023 (incorporated by reference to Exhibit 10.13 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-13_lqr.htm) |
| 10.12† | [Form of Independent Director Agreement between LQR House Inc. and each director nominee (incorporated by reference to Exhibit 10.14 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-14_lqr.htm) |
| 10.13† | [Form of Non-Independent Director Agreement between LQR House Inc. and Non-Independent Director (incorporated by reference to Exhibit 10.15 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-15_lqr.htm) |
| 10.14 | [Form of Director and Officer Indemnification Agreement between LQR House Inc. and each officer or director (incorporated by reference to Exhibit 10.16 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-16_lqr.htm) |
| 10.15† | [LQR House Inc. 2021 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.17 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-17_lqr.htm) |
| 10.16† | [Amendment No. 1 to the LQR House Inc. 2021 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.18 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-18_lqr.htm) |
| 10.17† | [Amendment No. 2 to the LQR House Inc. 2021 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.17 of the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2025)](https://www.sec.gov/Archives/edgar/data/1843165/000121390025026396/ea023489201ex10-17_lqrhouse.htm) |
| 10.18† | [Form of Incentive Stock Option Agreement (included in Exhibit 10.17) (incorporated by reference to Exhibit 10.19 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-17_lqr.htm) |
| 10.19† | [Form of Non-Qualified Stock Option Agreement for Non-Employee Directors (included in Exhibit 10.17) (incorporated by reference to Exhibit 10.20 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-17_lqr.htm) |
| 10.20† | [Form of Non-Qualified Stock Option Agreement for Company Employees (included in Exhibit 10.17) (incorporated by reference to Exhibit 10.21 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-17_lqr.htm) |
| 10.21† | [Form of Non-Qualified Stock Option Agreement for Non-Employee Consultants (included in Exhibit 10.17) (incorporated by reference to Exhibit 10.22 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-17_lqr.htm) |
| 10.22† | [Form of Restricted Stock Award Agreement (included in Exhibit 10.17) (incorporated by reference to Exhibit 10.23 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-17_lqr.htm) |
| 10.23† | [Form of Restricted Stock Unit Award Agreement for Non-Employee Directors (included in Exhibit 10.17) (incorporated by reference to Exhibit 10.24 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-17_lqr.htm) |
| 10.24† | [Form of Restricted Stock Unit Award Agreement for Company Employees (included in Exhibit 10.17) (incorporated by reference to Exhibit 10.25 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-17_lqr.htm) |

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|:---|:---|
| 10.25 | [Form of Advisor Agreement, dated June 1, 2023 (incorporated by reference to Exhibit 10.26 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-26_lqr.htm) |
| 10.26 | [Commercial Lease Agreement (incorporated by reference to Exhibit 10.27 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex10-27_lqr.htm) |
| 10.27 | [Ratification Assignment of the Bonding Agreement, dated July 7, 2023 (incorporated by reference to Exhibit 10.29 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of July 14, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023056901/ea181640ex10-29_lqrhouse.htm) |
| 10.28 | [Assignment Agreement of the Packaging of Origin and Co-Responsibility Agreement, dated June 30, 2023, between Dollinger Innovations Inc., Dollinger Holdings LLC, and LQR House Inc. (incorporated by reference to Exhibit 10.30 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of July 14, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023056901/ea181640ex10-30_lqrhouse.htm) |
| 10.29 | [Bottled at Origin Joint Responsibility Agreement, dated July 11, 2023 (incorporated by reference to Exhibit 10.31 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of July 14, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023056901/ea181640ex10-31_lqrhouse.htm) |
| 10.30 | [Writ obtained in connection with registering the Bottled at Origin Joint Responsibility Agreement with the Mexican Institute of Industrial property, dated July 13, 2023 (incorporated by reference to Exhibit 10.32 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of July 24, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023059200/ea182219ex10-32_lqrhouse.htm) |
| 10.31 | [Writ obtained in connection with registering the Shared Responsibility & Bonding Agreement with the Mexican Institute of Industrial property, dated July 12, 2023 (incorporated by reference to Exhibit 10.33 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of July 24, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023059200/ea182219ex10-33_lqrhouse.htm) |
| 10.32 | [Form of Independent Director Agreement between LQR House Inc. and Jay Dhaliwal (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K/A filed with the Commission on August 23, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023070186/ea184091ex10-2_lqrhouse.htm) |
| 10.33 | [Form of Independent Contractor Agreement 2023 (incorporated by reference to Exhibit 10.35 of the Company's Registration Statement on Form S-1 (File No. 333-274903) filed with the SEC as of October 6, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000101376223002577/fs12023ex10-35_lqrhouseinc.htm) |
| 10.34 | [10b-18 Repurchase Program (the "Program") Letter of Engagement with Dominari Securities (incorporated by reference to Exhibit 10.1 of the Company's quarterly report on the form 10-Q filed with the SEC on September 21, 2023)](http://www.sec.gov/Archives/edgar/data/1843165/000121390023078324/f10q0623ex10-1_lqrhouse.htm) |
| 10.35 | [Services Agreement, dated October 15, 2023, by and between X-Media Inc. and LQR House Inc. (incorporated by reference to Exhibit 10.1 of the Company's current report on the form 8-K filed with the SEC on October 17, 2023)](http://www.sec.gov/Archives/edgar/data/1843165/000101376223004407/ea186890ex10-1_lqrhouse.htm) |
| 10.36 | [Consulting Agreement between the Company and IR Agency LLC dated October 27, 2023 (incorporated by reference to Exhibit 10.1 of the Company's current report on the form 8-K filed with the SEC on November 2, 2023)](http://www.sec.gov/Archives/edgar/data/1843165/000121390023082764/ea187613ex10-1_lqrhouse.htm) |
| 10.37 | [Domain Name Transfer Agreement between LQR House Acquisition Corp. and SSquared Spirits LLC dated November 1, 2023 (incorporated by reference to Exhibit 10.1 of the Company's current report on the form 8-K filed with the SEC on November 6, 2023)](http://www.sec.gov/Archives/edgar/data/1843165/000121390023083853/ea187659ex10-1_lqrhouse.htm) |
| 10.38† | [Amendment to the Employment Agreement by and between the Company and Sean Dollinger dated November 1, 2023 (incorporated by reference to Exhibit 10.2 of the Company's current report on the form 8-K filed with the SEC on November 6, 2023)](http://www.sec.gov/Archives/edgar/data/1843165/000121390023083853/ea187659ex10-2_lqrhouse.htm) |
| 10.39 | [Product Handling Agreement by and between the Company and KBROS, LLC dated November 1, 2023 (incorporated by reference to Exhibit 10.55 of the Company's Annual Report on Form 10-K filed with the SEC on April 1, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024028934/ea020221501ex10-55_lqrhouse.htm) |
| 10.40 | [Funding Commitment Agreement by and between the Company and KBROS, LLC dated November 1, 2023 (incorporated by reference to Exhibit 10.56 of the Company's Annual Report on Form 10-K filed with the SEC on April 1, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024028934/ea020221501ex10-56_lqrhouse.htm) |
| 10.41 | [Form of the Share Exchange Agreement between the Company and the Seller dated May 19, 2024 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on May 23, 2024)](http://www.sec.gov/Archives/edgar/data/1843165/000121390024046257/ea020675001ex10-1_lqrhouse.htm) |

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|:---|:---|
| 10.42 | [Form of the Subscription Agreement between the Company and DRNK dated June 7, 2024 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on June 13, 2024)](http://www.sec.gov/Archives/edgar/data/1843165/000121390024052477/ea020767301ex10-1_lqrhouse.htm) |
| 10.43 | [Form of Director Agreement by and between the Company and Avraham Ben Tzvi, dated October 15, 2024 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on October 18, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024088992/ea021796101ex10-1_lqrhouse.htm) |
| 10.44 | [Form of Amendment No. 1 to Director Agreement by and between the Company and Avraham Ben Tzvi, dated October 17, 2024 (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed with the SEC on October 18, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024088992/ea021796101ex10-2_lqrhouse.htm) |
| 10.45 | [Form of the Securities Purchase Agreement between the Company and David Lazar dated October 15, 2024 (incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K filed with the SEC on October 18, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024088992/ea021796101ex10-3_lqrhouse.htm) |
| 10.46 | [Form of a Warrant Agreement (incorporated by reference to Exhibit 10.4 of the Company's Current Report on Form 8-K filed with the SEC on October 18, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024088992/ea021796101ex10-4_lqrhouse.htm) |
| 10.47 | [Form of Director Settlement Agreement (incorporated by reference to Exhibit 10.5 of the Company's Current Report on Form 8-K filed with the SEC on October 18, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024088992/ea021796101ex10-5_lqrhouse.htm) |
| 10.48 | [Form of Settlement Agreement (incorporated by reference to Exhibit 10.6 of the Company's Current Report on Form 8-K filed with the SEC on October 18, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024088992/ea021796101ex10-6_lqrhouse.htm) |
| 10.49 | [Form of KBROS Settlement Agreement (incorporated by reference to Exhibit 10.7 of the Company's Current Report on Form 8-K filed with the SEC on October 18, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024088992/ea021796101ex10-7_lqrhouse.htm) |
| 10.50 | [Form of Independent Director Agreement, dated December 19, 2024 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on December 26, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024112744/ea022611901ex10-1_lqr.htm) |
| 10.51 | [Form of Purchase Agreement dated December 30, 2024 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on January 3, 2025)](https://www.sec.gov/Archives/edgar/data/1843165/000121390025000780/ea022668101ex10-1_lqr.htm) |
| 10.52 | [Sales Agreement by and between LQR House Inc. and A.G.P./Alliance Global Partners, dated March 11, 2026 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on March 11, 2026).](https://www.sec.gov/Archives/edgar/data/1843165/000121390026026510/ea028110401ex10-1.htm) |
| 10.53 | [Supplementary Distribution Agreement, dated April 1, 2025, between LQR House Inc. and Of The Earth Distribution Corp (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on April 4, 2025).](https://www.sec.gov/Archives/edgar/data/1843165/000121390025029127/ea023718101ex10-1_lqr.htm) |
| 10.54 | [Share Purchase Agreement, dated April 11, 2026, by and among LQR House Inc., Fusion Five Continents Securities Limited and Dean Shields (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on April 15, 2026).](https://www.sec.gov/Archives/edgar/data/1843165/000121390026044043/ea028644801ex10-1.htm) |
| 10.55 | [Separation Agreement, dated April 2, 2025, between LQR House Inc. and David Lazar (incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed with the SEC on April 4, 2025).](https://www.sec.gov/Archives/edgar/data/1843165/000121390025029127/ea023718101ex10-2_lqr.htm) |
| 10.56 | [Lock-up Agreement, dated April 2, 2025, between LQR House Inc. and David Lazar (incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K filed with the SEC on April 4, 2025).](https://www.sec.gov/Archives/edgar/data/1843165/000121390025029127/ea023718101ex10-3_lqr.htm) |
| 14.1 | [Code of Ethics and Business Conduct (incorporated by reference to Exhibit 14.1 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex14-1_lqr.htm) |
| 19.1\* | [LQR House Inc. Insider Trading Policy.](ea028175801ex19-1.htm) |
| 21.1\* | [List of subsidiaries.](ea028175801ex21-1.htm) |
| 23.1\* | [Consent of Enrome LLP](ea028175801ex23-1.htm) |
| 23.2\* | [Consent of dbb*mckennon*](ea028175801ex23-2.htm) |
| 31.1\* | [Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act](ea028175801ex31-1.htm) |
| 31.2\* | [Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act](ea028175801ex31-2.htm) |
| 32.1# | [Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act](ea028175801ex32-1.htm) |
| 32.2# | [Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act](ea028175801ex32-2.htm) |
| 99.1 | [Audit Committee Charter (incorporated by reference to Exhibit 99.1 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex99-1_lqr.htm) |
| 99.2 | [Compensation Committee Charter (incorporated by reference to Exhibit 99.2 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex99-2_lqr.htm) |
| 99.3 | [Nominating and Corporate Governance Committee Charter (incorporated by reference to Exhibit 99.3 of the Company's Registration Statement on Form S-1 (File No. 333-272660) filed with the SEC as of June 15, 2023).](http://www.sec.gov/Archives/edgar/data/1843165/000121390023049050/ea179659ex99-3_lqr.htm) |
| 97.1 | [LQR House Inc. Clawback Policy (incorporated by reference to Exhibit 97.1 of the Company's Annual Report on Form 10-K filed with the SEC on April 1, 2024)](https://www.sec.gov/Archives/edgar/data/1843165/000121390024028934/ea020221501ex97-1_lqrhouse.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

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\* Filed herewith.

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|:---|:---|
| † | Executive compensation plan or arrangement. |

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# Exhibits 32.1 and 32.2 are being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall such exhibits be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise specifically stated in such filing.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

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|:---|:---|:---|
|  | LQR HOUSE INC. | LQR HOUSE INC. |
| Dated: April 15, 2026 | By: | */s/ Seam Dollinger* |
|  |  | Sean Dollinger |
|  |  | Chief Executive Officer |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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| | | |
|:---|:---|:---|
| Signatures | Title | Date |
| /s/ *Sean Dollinger* | Chief Executive Officer | April 15, 2026 |
| Sean Dollinger | (Principal Executive Officer) |  |
| /s/ Kumar Abhishek | Chief Financial Officer | April 15, 2026 |
| Kumar Abhishek | (Principal Financial and Accounting Officer) |  |
| /*s/ Yilin Lu* | Director and President | April 15, 2026 |
| Yilin Lu |  |  |
| /*s/ Hong Chun Yeung* | Director | April 15, 2026 |
| Hong Chun Yeung |  |  |
| /*s/ Lijun Chen* | Director | April 15, 2026 |
| Lijun Chen |  |  |
| /s/ Kah Loong Randy Yeo | Director | April 15, 2026 |
| Kah Loong Randy Yeo |  |  |
| /s/ Hon Kit Anthony Kwong | Director | April 15, 2026 |
| Hon Kit Anthony Kwong |  |  |

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**LQR HOUSE, INC.**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

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| | |
|:---|:---|
| **CONTENTS** | **Page(s)** |
| [REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID #6907)](#f_001) | F-2 |
| [REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID #3501)](#mm_001) | F-3 |
| [CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2025 AND 2024](#f_002) | F-4 |
| [CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024](#f_003) | F-5 |
| [CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT) FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024](#f_004) | F-6 |
| [CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024](#f_005) | F-7 |
| [NOTES TO CONSOLIDATED FINANCIAL STATEMENTS](#f_006) | F-8 |

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**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

The Board of Directors and Stockholders

LQR House, Inc.

***Opinion on the Financial Statements***

We have audited the accompanying consolidated balance sheets LQR House, Inc. and its subsidiaries (the "Company") as of December 31, 2025, the related consolidated statements of operations, change in stockholders' equity (deficit), and cash flows for the year ended December 31, 2025 and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").

***Material Uncertainty Related to Going Concern***

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as going concern. As discussed in Note 2 to the financial statements, the Company had accumulated deficit of US$67,829,421 as of December 31, 2025. The Company incurred a net loss of US$25,522,618 for the year ended December 31, 2025 and operating cash outflow of US$33,817,140 for the year ended December 31, 2025. These factors, raise substantial doubt about its ability to continue as going concern. Management's plan in regard to these matters are described in Note 2. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

***Basis for Opinion***

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Enrome LLP

We have served as the Company's auditor since 2025.

Singapore

April 15, 2026

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

The Board of Directors and Stockholders

LQR House, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheet of LQR House, Inc., and subsidiary (the "Company") as of December 31, 2024, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

**Going Concern**

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has sustained net losses and negative cash flow from operations and requires additional capital to operate, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regards to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Emphasis of Matter**

As discussed in Note 9 and 11 to the financial statements, the Company entered into certain retention and settlement agreements, primarily with related parties. Management has disclosed the nature, terms and financial impact of these transactions.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ *dbbmckennon*

 

We have served as the Company's auditor from 2021 to 2025

Newport Beach, California

March 31, 2025

**PART II – FINANCIAL INFORMATION**

**ITEM 8 – FINANCIAL STATEMENTS**

**LQR House, Inc.**

**Consolidated Balance Sheets**

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| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| **ASSETS** |  |  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $5975408 | $5386789 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, net | 23946 | 28040 |
| &nbsp;&nbsp;&nbsp;Accounts receivable, related party | 232283 | 149510 |
| &nbsp;&nbsp;&nbsp;Advance for investment in joint venture | 3824000 |  |
| &nbsp;&nbsp;&nbsp;Advance payment to distributor | 3279000 |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 276157 | 240729 |
| &nbsp;&nbsp;&nbsp;Due from related party | 2364450 |  |
| &nbsp;&nbsp;&nbsp;Security deposit | 19450 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 15994694 | 5805068 |
| Property and equipment, net | 312163 |  |
| Right-of-use asset | 51651 |  |
| Deferred offering costs | 203950 |  |
| Intangible assets, net |  | 10000 |
| Investment in joint ventures | 14670000 |  |
| Investment, at cost | - | 1117500 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total assets | $31232458 | $6932568 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |  |  |
| Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $76519 | $530643 |
| &nbsp;&nbsp;&nbsp;Accounts payable, related party |  | 21175 |
| &nbsp;&nbsp;&nbsp;Accrued and other payables | 982739 | 927711 |
| &nbsp;&nbsp;&nbsp;Accrued and other payables, related party | 760975 | 5971000 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 10423 |  |
| &nbsp;&nbsp;&nbsp;Due to related party | 6713 |  |
| &nbsp;&nbsp;&nbsp;Lease liability | 21428 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 1858797 | 7450529 |
| Lease liability, non-current | 41023 | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities | 1899820 | 7450529 |
| Commitments and contingencies (Note 15) |  |  |
| Stockholders' equity (deficit) : |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 350,000,000 shares authorized, 21,371,656 and 21,366,209 shares issued and outstanding as of December 31, 2025 and 435,788 and 430,341 shares issued and outstanding as of December 31, 2024, respectively | 2137 | 44 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 97707337 | 42336213 |
| &nbsp;&nbsp;&nbsp;Treasury stock, at cost (5,447 shares) | (547415) | (547415) |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (67829421) | (42306803) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity (deficit) | 29332638 | (517961) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total liabilities and stockholders' equity (deficit) | $31232458 | $6932568 |

---

See the accompanying notes to the audited financial statements.

**LQR House, Inc.**

**Consolidated Statements of Operations**

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| | | |
|:---|:---|:---|
|  | Years Ended | Years Ended |
|  | December 31, | December 31, |
|  | 2025 | 2024 |
| Revenue - services | $112640 | $117965 |
| Revenue - product | 1452183 | 2383695 |
| &nbsp;&nbsp;&nbsp;Total revenues | 1564823 | 2501660 |
| Cost of revenue - services | 47129 | 178851 |
| Cost of revenue - product | 1348395 | 2635984 |
| &nbsp;&nbsp;&nbsp;Total cost of revenue | 1395524 | 2814835 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit (loss) | 169299 | (313175) |
| Operating expenses: |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative | 10954346 | 14556220 |
| &nbsp;&nbsp;&nbsp;Sales and marketing | 643608 | 3617924 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 11597954 | 18174144 |
| Loss from operations | (11428655) | (18487319) |
| Other income (expense): |  |  |
| &nbsp;&nbsp;&nbsp;Impairment of investment | (1127500) | (4500000) |
| &nbsp;&nbsp;&nbsp;Legal settlement expense | (13000000) |  |
| &nbsp;&nbsp;&nbsp;Gain on sale of marketable securities |  | 5674 |
| &nbsp;&nbsp;&nbsp;Other income | 33537 | 227467 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses, net | (14093963) | (4266859) |
| Income tax expense | - | - |
| Net loss | $(25522618) | $(22754178) |
| Weighted average common shares outstanding - basic and diluted | 7281549 | 157656 |
| Net loss per common share - basic and diluted | $(3.51) | $(144.33) |

---

See the accompanying notes to the audited financial statements.

**LQR House, Inc.**

CONSOLIDATED STATEMENTS STOCKHOLDERS' EQUITY (DEFICIT)

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Treasury Stock** | **Treasury Stock** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br> Paid-In**<br>**Capital** | **Accumulated**<br>**Deficit** | **Total<br> Shareholder's<br> Equity**<br>**(Deficit)** |
| **Balances at December 31, 2023** | 137984 | $14 |  | $- | $34172888 | $(19552625) | $&nbsp;&nbsp;&nbsp;&nbsp; 14620277 |
| Share based compensation | 469 |  |  |  | 2533256 |  | 2533256 |
| Repurchase of common stock |  |  | (5447) | (547415) |  |  | (547415) |
| Corrective issuance from stock dividend | 69 |  |  |  |  |  |  |
| Common stock issued for investment | 21429 | 2 |  |  | 817498 |  | 817500 |
| Issuance of common stock pursuant ATM | 42445 | 5 |  |  | 1543074 |  | 1543079 |
| Issuance of common stock pursuant to private placement | 174026 | 17 |  |  | 3350003 |  | 3350020 |
| Exercise of warrants | 59366 | 6 |  |  | (6) |  |  |
| Offering costs |  |  |  |  | (80500) |  | (80500) |
| Net loss | - | - | - | - | - | (22754178) | (22754178) |
| **Balances at December 31, 2024** | 435788 | $44 | (5447) | $(547415) | $42336213 | $(42306803) | $(517961) |
| Shares based compensation | 1613 |  |  |  | 1712769 |  | 1712769 |
| Issuance of common stock pursuant to ATM | 13434601 | 1343 |  |  | 43197791 |  | 43199134 |
| Exercise of warrants | 210463 | 21 |  |  | 4051394 |  | 4051415 |
| Issuance of common stock pursuant to separation agreements | 6191 | 1 |  |  | 283677 |  | 283678 |
| Issuance of common stock pursuant to consultant agreement | 33000 | 3 |  |  | 47517 |  | 47520 |
| Issuance of common stock pursuant to registered direct offerings | 7249972 | 725 |  |  | 6077976 |  | 6078701 |
| Effect of stock split | 28 |  |  |  |  |  |  |
| Net loss | - | - | - | - | - | (25522618) | (25522618) |
| **Balances at December 31, 2025** | 21371656 | $2137 | (5447) | $(547415) | $97707337 | $(67829421) | $29332638 |

---

See the accompanying notes to the audited financial statements.

**LQR House, Inc.**

CONSOLIDATED STATEMENTS OF CASH FLOWS

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| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| **Cash flows from operating activities:** |  |  |
| Net loss | $(25522618) | $(22754178) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of right-of-use asset | 7637 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debts | 64530 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provision for expected credit losses | 67948 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 28378 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Write off of advances to related party |  | 177340 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment of investment | 1127500 | 4500000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of marketable securities |  | (5674) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share based compensation | 1932967 | 2533256 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (60436) | (28040) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, related parties | (150721) | 22983 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advance payment to distributor | (3279000) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses | (35428) | 1949226 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from related party | (2357737) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable | (454124) | 265414 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, related parties | (21175) | (37414) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued and other payables | 61828 | 789126 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued and other payables, related party | (5210025) | 5971000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract liabilities | 10423 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Security deposit | (19450) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease liability, net | 3163 | (1456) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (33817140) | (6618417) |
| **Cash flows from investing activities:** |  |  |
| Purchase of property and equipment | (340541) |  |
| Advance for investment in joint venture | (3824000) |  |
| Payment for investment in joint ventures | (14670000) |  |
| Purchases of marketable securities |  | (7758523) |
| Sales of marketable securities |  | 7764197 |
| Return of deposits in escrow | - | 670000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by investing activities | (18834541) | 675674 |
| **Cash flows from financing activities:** |  |  |
| Payment of deferred offering costs | (88950) |  |
| Issuance of common stock pursuant to exercise of warrants | 4051415 |  |
| Issuance of common stock pursuant to registered direct offerings | 6078701 | 1543079 |
| Issuance of common stock pursuant to ATM | 43199134 |  |
| Issuance of common stock pursuant to private placement |  | 3350020 |
| Offering costs |  | (80500) |
| Repurchase and buyback of common stock | - | (547415) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by financing activities | 53240300 | 4265184 |
| **Net change in cash and cash equivalents** | 588619 | (1677559) |
| Cash and cash equivalents at beginning of year | 5386789 | 7064348 |
| Cash and cash equivalents at end of year | $5975408 | $5386789 |
| **Supplemental disclosure of cash flow information:** |  |  |
| Cash paid for income taxes | $- | $- |
| Cash paid for interest | $- | $- |
| **Supplemental disclosure of non-cash flow information:** |  |  |
| Issuance of common stock for accrued and other payables | $111000 | $- |
| Deferred offering costs included in accrued expenses and other payables | $115000 | $- |
| Operating lease liabilities arising from obtaining right-of-use assets | $51651 | $- |
| Common stock issued for investment | $- | $817500 |
| Reclassification of deposit in escrow to investment | $- | $4800000 |

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See the accompanying notes to the audited financial statements.

**LQR House, Inc.**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1. NATURE OF OPERATIONS**

LQR House Inc. ("LQR" or the "Company") was incorporated on January 11, 2021, in the state of Delaware. On February 3, 2023, the Company changed its state of incorporation to the State of Nevada by merging into LQR House Inc., a Nevada corporation. On March 2, 2026, the Company reincorporated in the State of Delaware through a statutory conversion.

The Company operates in the beverage alcohol industry, owning specialty brands, providing marketing and distribution services. Through its wholly owned subsidiary LQR House Acquisition Corp., the Company operates CWSpirits.com (the "CWS Platform"), an e-commerce marketplace for spirits, wines, and champagnes serving customers throughout the United States through partnerships with licensed retail partners, including Country Wine & Spirits. The CWS Platform was acquired in November 2023 from a related party. See Note 11 - Related Party Transactions.

Through its wholly owned subsidiary SWOL Holdings Inc. incorporated in the State of Nevada on January 22, 2025, the Company develops and markets SWOL Tequila, a proprietary tequila brand. The Company also provides digital marketing services to alcohol industry brands.

Through its wholly-owned subsidiary YHC Online Limited, incorporated in Hong Kong in July 2025, the Company entered into joint venture agreements in December 2025 to cooperate in the creation and monetization of multi-channel network ("MCN") content for digital platforms. Subsequent to December 31, 2025, all joint venture agreements were terminated in March 2026 and all amounts previously funded were returned to the Company in full. See Note 7 — Investment in Joint Ventures.

*Reverse Stock Split*

On April 21, 2025, the Company effected a 1-for-35 reverse stock split (the "Reverse Stock Split") of its common stock, par value $0.0001 per share, pursuant to a Certificate of Change filed with the Secretary of State of the State of Nevada on April 16, 2025. In connection with the Reverse Stock Split, the number of authorized shares of common stock was reduced to 10,000,000. All share and per share amounts for all periods presented in these consolidated financial statements and accompanying notes have been retroactively adjusted to reflect the Reverse Stock Split.

On June 2, 2025, the Company increased the number of authorized shares of common stock from 10,000,000 to 350,000,000 shares, par value $0.0001 per share, pursuant to a Certificate of Amendment filed with the Secretary of State of Nevada. The increase was approved by the Company's stockholders at the Annual Meeting of Stockholders held on May 30, 2025.

 

**2. GOING CONCERN**

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has incurred net losses since inception, including net losses of $25,522,618 for the year ended December 31, 2025. Net cash used in operating activities was $33,817,140 for the year ended December 31, 2025. As of December 31, 2025, the Company had an accumulated deficit of $67,829,421.

*Management Plans*

 

Subsequent to December 31, 2025, the Company entered into a new at-the-market Sales Agreement with A.G.P./Alliance Global Partners, dated March 11, 2026, under which the Company may offer and sell shares of common stock having an aggregate offering price of up to $50,273,610, subject to market conditions and applicable securities law limitations. In addition, on March 2, 2026, the Company's stockholders approved an increase in the number of authorized shares of common stock from 350,000,000 to 1,500,000,000, providing additional capacity to support future equity financing.

In addition, the management terminate the joint venture agreements, distribution and marketing service agreements, the Company have received back the fund's total of $21,773,000 from April 9 to 13, 2026.

Based on the above factors, the management believe that the Company will be able to generate sufficient positive cash flows from the continued operations and obtain additional funding in order to enable the Company to meet the operating requirements and to pay their debts as and when they fall due. As such, the management has a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and determined that it is appropriate for the consolidated financial statements of the Company to be prepared on going concern basis in the next 12 months from the date of issuance of consolidated financial statements.

**3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of Presentation***

 **

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America ("GAAP"). The Company's fiscal year end is December 31.

The Company is an emerging growth company as the term is used in The Jumpstart Our Business Startups Act and has elected to comply with certain reduced public company reporting requirements, however, the Company may adopt accounting standards based on the effective dates for public entities when early adoption is permitted.

***Principles of Consolidation***

 ****

The consolidated financial statements include the accounts of LQR House Inc. and its wholly-owned subsidiaries, LQR House Acquisition Corp., SWOL Holdings Inc., and YHC Online Limited.

A subsidiary is an entity in which the Company holds a controlling financial interest, which is generally evidenced by direct or indirect ownership of a majority of the outstanding voting shares or the power to govern the financial and operating policies of the entity in accordance with ASC 810, *Consolidation*.

Subsidiaries are consolidated from the date on which control is obtained and are deconsolidated from the date on which control ceases. The results of operations of subsidiaries are included in the consolidated statements of operations from the effective date of acquisition or formation.

All intercompany transactions, balances, revenues, and expenses between the Company and its subsidiaries have been eliminated in consolidation.

The Company does not have any variable interest entities or non-controlling interests.

 ****

***Use of Estimates***

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, the valuation of cost method investments, the allowance for credit losses on accounts receivable, the valuation allowance against deferred tax assets, stock-based compensation, and the fair value of equity instruments issued in connection with financing transactions. In accordance with ASC 250, *Accounting Changes and Error Corrections*, changes in accounting estimates are recognized prospectively in the period of change and, if applicable, future periods. Actual results could differ materially from those estimates.

***Concentrations of Credit Risk***

The Company maintains its cash with a major financial institution located in the United States of America which it believes to be credit worthy. Balances are insured by the Federal Deposit Insurance Corporation up to $250,000. At times, the Company maintains balances in excess of the federally insured limits.

 **

***Concentrations***

 **

The Company's ability to derive revenue is reliant on its relationship with KBROS, LLC ("KBROS") who currently handles product for the CWS Platform and fulfills the products sold by clientele using our marketing services. The discontinuance of such relationship or termination of the CWS Platform agreements would have a material negative impact on the Company's operations.

Furthermore, the Company relies and expects to continue to rely on a small number of vendors. The loss of one of these vendors may have a negative short-term impact on the Company's operations. However, the Company believes there are acceptable substitute vendors that can be utilized longer term.

***Cash and Cash Equivalents***

Cash and cash equivalents represent cash at bank and online payment platform which are unrestricted as to withdrawal and use, and which have original maturities of three months or less.

***Marketable Securities***

During the year ended December 31, 2024, the Company held investments in marketable securities which were classified as trading securities and carried at fair value. These investments had a readily determinable fair value and were recognized as Level 1 financial instruments within the fair value hierarchy. The Company did not hold any marketable securities as of December 31, 2025 or during the year then ended.

***Investments***

 ****

The Company holds two categories of long-term investments: cost method investments in equity securities without readily determinable fair values, and investments in joint ventures accounted for under ASC 323.

 ****

*Cost Method Investments*

In accordance with ASC 321-10-35-2, equity investments without readily determinable fair values over which the Company does not exercise significant influence are carried at cost, less any impairment. The Company reviews such investments at each reporting period for indicators of impairment. If events or changes in circumstances indicate that the carrying value of an investment may not be recoverable, the Company assesses whether the decline in value is other than temporary. If such a determination is made, the carrying value is written down to estimated fair value with the resulting loss recognized in the consolidated statements of operations. As of December 31, 2025, all cost method investments held by the Company had been fully impaired

*Investments in Joint Ventures*

The Company evaluated its investments in joint ventures under ASC 323, *Investments — Equity Method and Joint Ventures*. Although YHC Online Limited, a wholly-owned subsidiary of the Company, holds a 20% ownership interest in each joint venture entity, the Company has determined that significant influence does not exist. This conclusion is supported by the express terms of each joint venture agreement, which explicitly prohibit YHC from appointing directors or officers of, or participating in the day-to-day management or operations of, any joint venture entity. As the presumption of significant influence has been rebutted, the equity method of accounting has not been applied, and the investments are carried at cost. Dividends or distributions received are recognized as income when declared. The Company reviews its investments for indicators of impairment at each reporting period. If the carrying value of an investment exceeds its estimated fair value and the decline is not expected to recover, the carrying value is written down to fair value with the resulting loss recognized in the consolidated statements of operations.

***Property and Equipment***

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Property and equipment, net are stated at cost less accumulated depreciation and impairment, if any, and depreciated on a straight-line basis over the estimated useful lives of the assets. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. Depreciation expenses are included in general and administrative expenses. Land is not depreciated since it has an indefinite useful life. Estimated useful lives are as follows:

The Company's property and equipment consists of a motor vehicle with an estimated useful life of five years.

Expenditure for maintenance and repairs, which do no materially extend the useful lives of the assets, are charged to expenses as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of operations.

***Fair Value Measurements***

 ****

The Company follows ASC 820, *Fair Value Measurement*, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three levels of the fair value hierarchy:

● Level 1—Quoted prices in active markets for identical assets or liabilities.

● Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

● Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The carrying values of the Company's cash and cash equivalents, accounts receivable, due from/to related party, accounts payable, and accrued and other payables approximate their fair values due to the short-term nature of these instruments.

The Company's cost method investments in equity securities are carried at cost, less impairment, and are not measured at fair value on a recurring basis. See Note 6.

The Company's investments in joint ventures are carried at cost following rebuttal of the significant influence presumption under ASC 323, and are not measured at fair value on a recurring basis. See Note 7.

There were no transfers between Level 1, Level 2, or Level 3 fair value classifications during the year ended December 31, 2025.

***Accounts Receivable***

Accounts receivable are recorded at the gross billing amount less an allowance for any uncollectible accounts due from the customers. Accounts receivable do not bear interest.

Since January 1, 2024, the Company adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets.

The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as "General and administrative expenses" in the unaudited condensed consolidated statements of comprehensive income. The Group assesses collectability by reviewing accounts receivable on aging schedules because the accounts receivable were primarily consisted of receivables arising from provision of marketing services, p*roduct Sales, CWS platform and vault*. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company's ability to collect from customers. Delinquent account balances are written-off against the allowance for expected credit loss after management has determined that the likelihood of collection is not probable.

As of December 31, 2025 and 2024, the Company recorded an allowance for credit losses of $67,948 and nil, respectively. For the years ended December 31, 2025 and 2024, the Company has recorded bad debt expense of $64,530 and nil, respectively.

***Intangible Assets***

An intangible asset is recognized when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. Intangible assets are initially recognized at cost, less any accumulated amortization and any impairment losses. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

The Company's domain names are considered to have indefinite useful lives. Costs to renew domain names are expensed as incurred.

During the year ended December 31, 2025, the Company determined that its domain name intangible asset was fully impaired and recorded an impairment charge of $10,000. As of December 31, 2025, the Company had no intangible assets remaining on the consolidated balance sheet.

***Impairment of Long-Lived Assets***

For long-lived assets the Company evaluates for impairment whenever events or changes indicate that the carrying amount of an asset may no longer be recoverable. The Company assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to receive from use of the assets and their eventual disposition. Such assets are considered to be impaired if the sum of the expected undiscounted cash flows is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company tests impairment of long-lived assets at the reporting unit level when impairment indicator appeared and recognizes impairment in the event at the carrying value exceeds the fair value of each reporting unit.

No impairment charge of long-lived assets was recorded for the years ended December 31, 2025 and 2024.

***Deferred Offering Costs***

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The Company complies with the requirements of FASB ASC 340-10-S99-1 with regards to offering costs. Prior to the completion of an offering, offering costs are capitalized. Upon completion of an offering, deferred offering costs are reclassified to additional paid-in capital as a reduction of the offering proceeds. If an offering is abandoned, the deferred offering costs are charged to expense in the period the offering is determined not to be completed.

As of December 31, 2025, the Company had deferred offering costs of $203,950 relating to the registration of securities of SWOL Holdings Inc., a wholly-owned subsidiary of the Company, in connection with its Form S-1 registration statement. As of December 31, 2024, the Company had no deferred offering costs. **

***Contract Liabilities***

 **

The Company recognizes contract liabilities in accordance with ASC 606, *Revenue from Contracts with Customers*. A contract liability represents the Company's obligation to transfer goods or services to a customer for which the Company has received consideration before the related performance obligation has been satisfied. Contract liabilities are recognized as revenue when the Company satisfies the related performance obligation. Due to the generally short-term duration of the relevant contracts, all performance obligations are satisfied within one year. Where transaction prices for marketing services, p*roduct Sales, CWS platform and vault* are received upfront from the customers, such receipts are recorded as contract liabilities and recognized as revenues either over the contract period or point in time upon service rendered.

The following table presents the activity in contract liabilities for the years ended December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Years Ended <br> December 31,** | **Years Ended <br> December 31,** |
|  | **2025** | **2024** |
| Balance, beginning of the year | $- | $&nbsp;&nbsp;&nbsp;&nbsp; - |
| Additions - consideration received in advance | 10628 | - |
| Balance, end of the year | $10628 | $- |

---

As of December 31, 2025 and 2024, the Company had contract liabilities of $10,628 and nil, respectively, representing advance payments received from customers for goods or services not yet delivered. The Company expects to recognize the balance outstanding as of December 31, 2025, as revenue within the next twelve months as the related performance obligations are satisfied.

***Related Parties***

The Company follows ASC 850, *Related Party Disclosures*, for the identification and disclosure of related party transactions. Related parties include principal owners, management, members of their immediate families, affiliates, and other parties that can significantly influence the management or operating policies of the Company, or that can be significantly influenced by the Company. All material transactions with related parties are disclosed in the accompanying notes to the consolidated financial statements, with the exception of compensation arrangements that are established through the Company's standard employment and compensation practices.

 ****

***Revenue Recognition***

In accordance with FASB ASC 606, *Revenue from Contracts with Customers*¸ the Company determines revenue recognition through the following steps:

● Identification of a contract with a customer;

● Identification of the performance obligations in the contract;

● Determination of the transaction price;

● Allocation of the transaction price to the performance obligations in the contract; and

● Recognition of revenue when or as the performance obligations are satisfied.

Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company's customers in an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance.

The Company derives its revenue from marketing services, sales via the CWS Platform, distribution of its SWOL Tequila and subscription-based membership revenue. Revenue is reported net of discounts.

 

*Marketing Services*

 

The Company provides integrated marketing services to third-party alcoholic beverage brands through its CWS Platform, including campaign strategy development, creation of promotional materials, and digital advertising execution over a defined campaign period, generally ranging from one to three months. In applying ASC 606-10-25-14, the Company has concluded that each contract contains a single performance obligation, as the promised services are not separately identifiable within the context of the contract and are combined to deliver a single integrated marketing campaign. In accordance with ASC 606-10-25-19, the Company determined that the individual services are not distinct, as they are highly interrelated and interdependent and do not provide benefit to the customer on a standalone basis. The services represent a series of distinct services that are substantially the same and have the same pattern of transfer.

Revenue is recognized over time in accordance with ASC 606-10-25-27, as the customer simultaneously receives and consumes the benefits of the services as they are performed. The Company measures progress using a time-elapsed output method over the campaign period. The Company has concluded that it acts as the principal under ASC 606-10-55-37A and 55-39, as it controls the services prior to transfer, maintains primary responsibility for fulfillment, and has discretion in directing third-party service providers. Accordingly, revenue is recognized on a gross basis. Revenue from marketing services is disaggregated and recognized over the campaign period, and contracts are generally short-term in nature; therefore, the Company does not disclose remaining performance obligations pursuant to the practical expedient in ASC 606-10-50-20.

 

*CWS Platform*

 

The Company sells wine and spirits directly to end customers through its CWSpirits.com platform. Each transaction contains a single performance obligation under ASC 606-10-25-14, consisting of delivery of the product to the customer. The Company determined that the product is distinct in accordance with ASC 606-10-25-19, as the customer can benefit from the product independently. Revenue is recognized at a point in time in accordance with ASC 606-10-25-30, when control transfers to the customer upon delivery.

The Company has concluded that it acts as the principal in these arrangements under ASC 606-10-55-37A and 55-39, as it establishes pricing, directs marketing activities, and bears financial inventory risk, including risk of loss. Accordingly, revenue is recognized on a gross basis. Revenue is disaggregated as e-commerce product revenue and recognized upon delivery, and the Company does not have material remaining performance obligations due to the short-term nature of transactions in accordance with ASC 606-10-50-20.

 

*Product Sales*

 

The Company generates wholesale revenue from the sale of SWOL Tequila, which is produced by a third-party manufacturer and delivered to CWS for retail distribution. Each arrangement contains a single performance obligation under ASC 606-10-25-14, consisting of delivery of the product to the customer. The Company determined that the product is distinct in accordance with ASC 606-10-25-19, as it can be consumed independently.

Revenue is recognized at a point in time in accordance with ASC 606-10-25-30, when control transfers upon delivery to the customer. The Company has concluded that it acts as the principal under ASC 606-10-55-37A and 55-39, as it controls the product prior to transfer, establishes pricing, and bears inventory and production risk. Accordingly, revenue is recognized on a gross basis. Revenue is disaggregated as wholesale product revenue and recognized upon delivery. Due to regulatory restrictions, ownership transfers upon delivery with no right of return. Remaining performance obligations are not material in accordance with ASC 606-10-50-20.

 

*Vault*

The Company offers a subscription-based membership program that provides customers with access to exclusive benefits, including discounts, free shipping, and promotional offers. Each subscription arrangement contains a single performance obligation under ASC 606-10-25-14, consisting of the provision of ongoing membership benefits over the subscription term. In accordance with ASC 606-10-25-19, the Company determined that the membership services are not distinct individually but represent a series of services that are substantially the same and provided continuously over the subscription period.

Revenue is recognized over time in accordance with ASC 606-10-25-27, as the customer simultaneously receives and consumes the benefits of the membership. Revenue is recognized on a straight-line basis over the subscription period. The Company has concluded that it acts as the principal under ASC 606-10-55-37A and 55-39, as it controls the membership program and establishes pricing. Accordingly, revenue is recognized on a gross basis. Prior to the acquisition of the CWS Platform, the Company acted as an agent and recognized net revenue. Revenue is disaggregated as subscription revenue and recognized over the subscription period. The Company records reserves for chargebacks and cancellations based on historical experience, and remaining performance obligations are not disclosed for contracts with an original expected duration of one year or less in accordance with ASC 606-10-50-

 

*Principal vs. Agent Considerations*

 

The Company evaluates whether it acts as a principal or an agent in each revenue arrangement in accordance with ASC 606-10-55-36 through 55-40, considering whether it controls the promised good or service before transfer to the customer, bears inventory risk, and has pricing discretion. Where the Company is the principal, revenue is recorded gross. Where the Company is the agent, revenue is recorded net. The Company has determined it acts as principal for CWS Platform transactions and SWOL Tequila sales and records revenue on a gross basis accordingly.

 

*Disaggregation of Revenue*

 

The following is a summary of the disaggregation of revenue for the years ended December 31, 2025 and 2024:

 

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| | | |
|:---|:---|:---|
| | **Years Ended** | **Years Ended** |
| | **December 31,** | **December 31,** |
| <br>**Disaggregation of Revenues** | **2025** | **2024** |
| CWS Platform | $1251543 | $2343255 |
| SWOL product sales | 200640 | 40440 |
| Revenue - product | 1452183 | 2383695 |
| Marketing | 64992 | 73455 |
| Vault | 47648 | 44510 |
| Revenue - services | 112640 | 117965 |
| Total revenues | $1564823 | $2501660 |

---

The following table presents the timing of recognition of revenue for the years ended December 31, 2025 and 2024:

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| | | |
|:---|:---|:---|
| | **Years Ended** | **Years Ended** |
| | **December 31,** | **December 31,** |
| <br>**Revenue recognized at a point in time** | **2025** | **2024** |
| CWS Platform | $1251543 | $2343255 |
| SWOL product sales | 200640 | 40440 |
| &nbsp;&nbsp;&nbsp;Revenue - product | 1452183 | 2383695 |
| **Revenue recognized over time** |  |  |
| Marketing | 64992 | 73455 |
| Vault | 47648 | 44510 |
| &nbsp;&nbsp;&nbsp;Revenue - services | 112640 | 117965 |
| &nbsp;&nbsp;&nbsp;Total revenues | $1564823 | $2501660 |

---

***Cost of Revenue***

Cost of revenue consists of all direct costs attributable to sales and performing marketing services. Cost of revenue includes product costs, packaging, shipping and other importing and delivery charges, as well as contracted marketing services. Cost of revenue also includes customer service personnel costs.

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***Sales and Marketing***

Sales and marketing costs primarily consist of advertising, promotional expenses and marketing consulting and advisory services. Sales and marketing costs also include sales commissions.

***Stock-Based Compensation***

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ASC 718-10 requires that share-based payment transactions with employees and non-employees, such as share options, be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation cost related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period.

***Leases***

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The Company leases certain office space from third parties. Leases with an initial term of 12 months or less are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. For leases beginning in 2019 and later, at the inception of a contract management assesses whether the contract is, or contains, a lease. The assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the right to substantially all the economic benefit from the use of the asset throughout the period is obtained, and (3) whether the Company has the right to direct the use of the asset. At the inception of a lease, management allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company accounts for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the non lease components (e.g., common-area maintenance costs).

Most leases include one or more options to renew, with renewal terms that can extend the lease term from one year or more. The exercise of lease renewal options is at the Company's sole discretion. Renewal periods are included in the lease term only when renewal is reasonably certain, which is a high threshold and requires management to apply judgment to determine the appropriate lease term. The Company's leases do not include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term. Certain lease agreements include rental payments adjusted periodically for inflation. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. All of the Company's leases are classified as operating leases. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less. The effect of short-term leases and initial direct costs on our right-of-use asset and lease liability was not material.

ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or cancellation provisions, and determining the discount rate.

As the rate implicit in the lease is not usually available, the Company used an incremental borrowing rate based on the information available at the adoption date of ASC 842 in determining the present value of lease payments for existing leases. The Company will use information available at the lease commencement date to determine the discount rate for any new leases.

***Net Loss per Share***

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Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the year. Diluted net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted for the potentially dilutive effect of outstanding equity awards and other convertible instruments. Potentially dilutive securities are excluded from the computation of diluted net loss per share when their inclusion would be anti-dilutive. As the Company incurred a net loss for each of the years ended December 31, 2025 and 2024, all potentially dilutive securities are anti-dilutive and diluted net loss per share is the same as basic net loss per share for both periods presented.

***Segment Information***

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An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company's chief operating decision maker in order to allocate resources and assess performance of the segment.

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the "CODM") in deciding how to allocate resources and in assessing performance. The Company's revenue segments have similar economic characteristics, and they are managed as a single business unit. The Company uses the "management approach" in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company's CODM for making operating decisions and assessing performance as the source for determining the Company's reportable segments. The Company's CODM reviews results when making decisions about allocating resources and assessing performance of the Company. The Company has determined that there is only one reportable operating segment.

***Income Taxes***

The Company accounts for income taxes in accordance with ASC 740, *Income Taxes*, using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates expected to be in effect in the years in which those temporary differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

The Company records a valuation allowance against deferred tax assets to the extent it is more likely than not that some or all of the deferred tax assets will not be realized based on available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, and the history of operating losses.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authority based on the technical merits of the position. The tax benefit recognized is measured as the largest amount of benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. Interest and penalties related to uncertain tax positions, if any, are recognized as a component of income tax expense.

The Company adopted ASU 2023-09, *Improvements to Income Tax Disclosures*, for the fiscal year ended December 31, 2025. ASU 2023-09 requires enhanced disclosures in the rate reconciliation and additional disaggregation of income taxes paid. The adoption of ASU 2023-09 affected disclosures only and did not have an impact on the Company's consolidated financial statements.

***Recently Accounting Pronouncements***

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In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures*, which requires enhanced disclosures about significant segment expenses and other segment items regularly provided to the chief operating decision maker, and expands interim disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 for the fiscal year ended December 31, 2024, on a retrospective basis. The adoption affected disclosures only and did not have a material impact on the Company's consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740) — Improvements to Income Tax Disclosures*, which requires enhanced disclosures in the annual rate reconciliation, including specific categories of reconciling items, and disaggregation of income taxes paid by federal, state, and foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the fiscal year ended December 31, 2025. The adoption affected disclosures only and did not have a material impact on the Company's consolidated financial statements.

*Recently Issued Accounting Pronouncements Not Yet Adopted*

In November 2024, the FASB issued ASU 2024-03, *Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40)*, which requires public entities to disclose, in the notes to the financial statements, specified information about certain costs and expenses included in expense line items on the face of the income statement. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements and disclosures.

In January 2025, the FASB issued ASU 2025-01, *Income Statement — Reporting Comprehensive Income (Topic 220) — Clarifying the Effective Date*, which clarifies the effective date of ASU 2024-03 for entities that do not have an issued interim financial statement before the issuance of ASU 2025-01. ASU 2025-01 is effective upon issuance. The adoption of ASU 2025-01 did not have a material impact on the Company's consolidated financial statements.

In March 2025, the FASB issued ASU No. 2025-04, *Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer*, which clarifies the accounting for share-based payment awards granted to customers in connection with revenue arrangements, addressing the interaction between Topic 718 and Topic 606 with respect to measurement, classification, and recognition of such awards. ASU 2025-04 is effective for the Company for the fiscal year beginning January 1, 2026. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In July 2025, the FASB issued ASU 2025-05, *Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets*: The ASU provides a practical expedient permitting entities to assume that conditions at the balance sheet date remain unchanged over the life of current accounts receivable and current contract assets when estimating expected credit losses. The guidance is effective for annual and interim reporting periods beginning after December 15, 2025, with early adoption permitted. The Company does not expect ASU 2025-05 to have a material impact on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, *Interim Reporting (Topic 270): Narrow-Scope Improvements*: The ASU requires entities to disclose events occurring since the end of the last annual reporting period that have a material impact on the entity. The amendments apply to all entities that present interim financial statements in accordance with GAAP. The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted. The amendments may be applied either prospectively or retrospectively. The Company expects ASU 2025-11 to impact its disclosures only and does not expect it to affect its results of operations, financial condition or cash flows.

In December 2025, the FASB issued ASU 2025-12, *Codification Improvements*, which makes various non-substantive technical corrections and clarifications to the FASB Accounting Standards Codification. ASU 2025-12 is effective upon issuance. The Company does not expect the adoption of ASU 2025-12 to have a material impact on its consolidated financial statements.

**4. PROPERTY AND EQUIPMENT, NET**

Property and equipment consisted of the following as of December 31, 2025 and 2024:

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| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Motor vehicle | $340541 | $- |
| Less: Accumulated depreciation | (28378) | - |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | $312163 | $- |

---

Depreciation expense for the years ended December 31, 2025 and 2024 was $28,378 and nil, respectively.

**5. ACQUISITION OF CWS PLATFORM**

On November 1, 2023, LQR House Acquisition Corp. (the "Buyer"), a wholly owned subsidiary of the Company, and SSquared Spirits LLC (the "Seller", "SSquared") entered into a Domain Name Transfer Agreement ("Agreement"). Pursuant to the Agreement, the Seller irrevocably sold, assigned, transferred, and conveyed to the Buyer (a) all right, title, and interest in and to the domain name www.cwspirits.com (the "Domain Name", "CWS Platform"), including its current registration and (b) any other rights (including, but not limited to, trademark rights associated with the Domain Name in any jurisdiction, all Internet traffic through the Domain Name and all Website Content (as defined in the Agreement) the Seller may have in the Domain Name, together with any goodwill associated therewith in exchange for the payment by the Buyer of the purchase price of $10,000.

In connection with the Company's purchase of the Domain Name, on November 1, 2023, the Company entered into a product handling agreement ("Product Handling Agreement") with KBROS LLC ("KBROS"). Pursuant to the Product Handling Agreement:

Commencing as of the Effective Date of this Agreement, Product Handler shall provide to the Company the following services relating to the purchase and delivery ("Handling") of spirits and other beverage products (referred to herein as "Product" and the "Products") purchased by customers of the Company through or in relation to websites associated with the Domain:

Purchase of Products to be delivered to customers of the Company, delivery of such Products, and related receipt of returns of Products and delivery of replacements of the Products from time to time, necessary for the operation of the Business by the Company, pursuant to orders for the Products by the Company's customers generated as the result of sales, promotion and marketing of the Products through the Website (sale, promotion and marketing of the Products through the Website is collectively referred to herein as "Processing");

Procurement and maintenance of all certificates, licenses, authorizations and registrations required to import, possess, promote, sell, distribute and receive payment for the Products and compliance with all laws, rules and regulations applicable thereto and to the operation of the Website and conduct of sales and Processing of the Products, as reasonably deemed necessary by the Company;

Under Regulation S-X 3-05, management determined that the CWS Platform acquisition constituted a business combination as the revenue producing activity (e-commerce sales) was expected to be similar both pre and post-domain name acquisition. As such, the Company recorded an intangible asset of $10,000 for the purchase price consideration of the domain name.

Management assessed the fair value of the Domain Name and CWS Platform in determining to allocate the $10,000 to the domain name. In making such determination, management considered the related party nature of the transaction, the current environment for direct-to-consumer alcoholic beverage companies and the related competition in which they operate, and the fact that the initial and continued operation of the CWS platform is completely dependent on the relationship between the Company, our CEO and a minority shareholder, who co-owned SSquared and operates KBROS, LLC ("KBROS", or "Product Handler"), the Company's contracted product handler. Without such relationship, which can be terminated in certain circumstances, the underlying CWS Platform would be unable to operate as intended until a suitable alterative product handler would be identified. Therefore, no fair value in excess of the consideration provided was considered.

The Company has consolidated the results of operations of the CWS Platform since November 1, 2023. During the year ended December 31, 2025, the Company determined that the CWS Platform intangible asset was fully impaired. The Company recorded an impairment charge of $10,000, which is included in impairment of investments in the consolidated statements of operations for the year ended December 31, 2025.

**6. INVESTMENTS, AT COST** 

The Company held minority equity interests in Cannon Estate Winery Ltd. and DRNK Beverage Corp. (subsequently renamed Chase Mocktails Ltd.), both accounted for under the cost method as the Company does not exercise significant influence over either investee. During the year ended December 31, 2025, both investments were fully impaired and written off.

***Cannon Estate Winery Ltd.***

On May 19, 2024, the Company acquired approximately 9.99% of the common shares of Cannon Estate Winery Ltd., a British Columbia corporation ("Cannon"), pursuant to a Share Exchange Agreement with a majority shareholder and director of Cannon. The Company issued 750,000 shares of its common stock in exchange for 113,085 common shares of Cannon. The investment was recorded at $817,500, representing the fair value of the 750,000 shares issued based on a per share price of $1.09 on the acquisition date.

During the year ended December 31, 2025, the Company recognized an impairment charge of $817,500 on its investment in Cannon. The impairment was triggered by deterioration in Cannon's financial performance, reduced prospects for recovery of carrying value.

 ****

***Chase Mocktails Ltd (f/k/a DRNK Beverage Corp.)***

On June 7, 2024, the Company consummated an acquisition of approximately 8.58% of common shares of DRNK Beverage Corp. ("DRNK") which became Chase Mocktails Ltd., pursuant to a Subscription Agreement ("DRNK Agreement"). Pursuant to the Agreement, the Company subscribed for and purchased from DRNK 1,920,000 common shares of DRNK at a price of $2.50 per share for an aggregate amount of $4,800,000. Upon the closing of the DRNK Agreement, the Company reclassified $4,800,000 which was held as a deposit in escrow to investments on the consolidated balance sheet.

As of December 31, 2024, the Company recognized an impairment expense of $4,500,000 related to its investment with DRNK. The impairment reflects the difference between the carrying value and the fair value of investment, as determined by the market conditions.

During the year ended December 31, 2025, the Company recognized an additional impairment charge of $300,000. The total cumulative impairment recognized on this investment is $4,800,000.

**7. INVESTMENT IN JOINT VENTURES**

In December 31, 2025, YHC Online Limited ("YHC"), a wholly-owned subsidiary of the Company, entered into four separate joint venture agreements with Bancroft Equity Limited, Emerald Wealth Inc., Meridian Financial Solutions Inc., and Sequoia Equity Group Inc., to cooperate in the creation of multi-channel network ("MCN") content for digital platforms, including TikTok. Each joint venture is engaged in the creation and monetization of influencer-hosted content targeted at a specific geographic market. Under each agreement, YHC holds a 20% minority ownership interest and has no rights to appoint directors or officers of, or participate in the day-to-day management or operations of, any joint venture entity. The majority partner in each joint venture retains full operational control. None of the co-venturers is a related party of the Company.

The following table summarizes the key terms of each arrangement as of December 31, 2025:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Co-Venturer** | **Jurisdiction** | **Target<br> Market** | **JV Entity** | **Total<br> Commitment** | **Funded** |
| Bancroft Equity Limited | Hong Kong | UK & Europe | Crofty Network Limited | 5000000 | 3590000 |
| Emerald Wealth Inc. | South Dakota | Greater China | EMYHC MCN Holdings Limited | 6000000 | 4380000 |
| Meridian Financial Solutions Inc. | Wyoming | Southeast Asia | Fastone Singapore Pte. Ltd. | 8000000 | 6700000 |
| Sequoia Equity Group Inc. | South Dakota | Middle East | Not yet formed (1) | 5000000 | 3824000 |
| Total |  |  |  | 24000000 | 18494000 |

---

<sup>(1)</sup> As of December 31, 2025, the joint venture entity for the Middle East arrangement had not yet been formed. The $3,824,000 advanced to Sequoia Equity Group Inc. is presented as advance for investment in joint venture on the consolidated balance sheet.

The Company evaluated its investments under ASC 323, *Investments — Equity Method and Joint Ventures*. Although YHC holds a 20% ownership interest in each joint venture entity, the Company has determined that significant influence does not exist over the three formed joint venture entities, as the express terms of each joint venture agreement explicitly prohibit YHC from appointing directors or officers of, or participating in the day-to-day management or operations of, any joint venture entity. As the presumption of significant influence has been rebutted, the equity method of accounting has not been applied, and the investments are carried at cost.

Each joint venture agreement provides YHC with a put right, exercisable at any time following the first anniversary of the respective agreement, pursuant to which YHC may require the co-venturer to repurchase YHC's interest at a price equal to YHC's total funded investment amount.

Of the aggregate $24,000,000 total commitment, $18,494,000 had been funded as of December 31, 2025, comprising $14,670,000 funded to the three formed joint venture entities and $3,824,000 advanced to Sequoia Equity Group Inc. pending formation of the Middle East joint venture entity.

No income or loss from the joint ventures was recognized during the year ended December 31, 2025, as the investments are carried at cost and no dividends or distributions were declared by any joint venture entity during the period. No impairment indicators were identified with respect to any joint venture investment as of December 31, 2025, based on the early stage of operations and the contractual put right providing for full recovery of the funded investment amount from each respective co-venturer.

In April 2026, all four agreements were terminated and all amounts previously funded, aggregating $18,494,000, were returned to YHC in full. Following the terminations, the Company has no remaining joint venture commitments or obligations.

**8. ADVANCE PAYMENT TO DISTRIBUTOR**

On March 25, 2025, the Company entered into a Distribution and Marketing Service Agreement with a Hong Kong entity pursuant to which the Company paid $529,000 for market access, brand development, and distribution services within the Asian market, excluding the Company's SWOL Tequila product line. The amount has been recorded as a prepaid distribution and marketing cost and will be recognized as expense over the period in which services are rendered. As of December 31, 2025, no amortization has been recorded pending commencement of service under the arrangement.

On April 1, 2025, the Company entered into a Distribution and Marketing Services Agreement with a Hong Kong entity pursuant to which the entity agreed to provide market access, promotional services, and distribution of the Company's products and CWSpirits.com platform within the Asian market, including selling through its network of distributors to wholesale and retail accounts such as bars, hotels, restaurants, and other licensed outlets, excluding the Company's SWOL Tequila product line. Under the arrangement, products are distributed on a consignment basis, with title retained by the Company until sold, and the distributor remits proceeds to the Company on a cost plus 20% basis (FOB Mexico), payable in quarterly installments. The total fee paid by the Company for market access, promotional services, and distribution rights under the agreement is $2,750,000, which has been recorded as a prepaid distribution and marketing cost and will be recognized as expense commensurate with the performance of services. As of December 31, 2025, no amortization has been recorded pending commencement of services under the arrangement.

In April 2026, both arrangements were terminated and all amounts previously paid, aggregating $3,279,000, were returned to the Company in full. As a result, the Company does not anticipate recording any expense or loss in connection with these arrangements.

**9. ACCRUED AND OTHER PAYABLES**

Accrued and other payables consist of the following:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Accrued retention and settlement payments | $13729 | $513729 |
| Accrued consulting and other fees | 231435 | 62450 |
| Taxes payable | 11143 | 263087 |
| Accrued deferred offering costs | 115000 |  |
| Accrued compensation | 280000 |  |
| Accrued legal & professional fees | 177809 |  |
| Other accrued | 153623 | 88445 |
| Total accrued and other payables | $982739 | $927711 |
| Other accrued expenses, related party | 45000 |  |
| Accrued retention and settlement payments, related parties | 715975 | 5971000 |
| Total accrued and other payables, related parties | $760975 | $5971000 |

---

From October to December 2024, the Company entered into bonus and retention agreements reflect to retain key talent and incentivize critical personnel, including executives, directors, other related entities (See Note 11) and vendors. These were designed to ensure continuity in leadership, governance and support the Company's long-term goals with key consultants and vendors, even though the Company is not currently profitable.

As of December 31, 2024, $6,484,729 were accrued and unpaid. During the year ended December 31, 2025, the Company paid approximately $5,755,025 of these previously accrued balances. The remaining balance of $729,704 remains accrued as of December 31, 2025, of which $715,975 relates to related parties and $13,729 pertains to other parties. Subsequent to December 31, 2025, the Company entered into an offset arrangement pursuant to which the outstanding accounts receivable, related party balance of $232,283 owed by Country Wine & Spirits, Inc. was offset against the accrued retention and settlement payments due to Kbros LLC of $675,975. The President of CWS is also the 100% owner of KBROS, the Company's contracted Product Handler, and accordingly CWS and KBROS are treated as affiliated related parties. The offset resulted in a net reduction of both balances by $232,283 with no cash exchanged.

**10. STOCKHOLDERS' EQUITY** 

*Reverse Stock Split*

 

On April 16, 2025, the Company filed a Certificate of Change to its Articles of Incorporation with the Secretary of State of the State of Nevada to effect a 1-for-35 reverse stock split (the "Reverse Stock Split") of its common stock, par value $0.0001 per share, which became effective on April 21, 2025. Pursuant to the Reverse Stock Split, every 35 shares of the Company's issued and outstanding common stock were automatically converted into one share of common stock. No fractional shares were issued; fractional amounts were rounded up to the nearest whole share at the individual stockholder level. The par value per share remained unchanged at $0.0001. All share and per share amounts in these consolidated financial statements have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented.

 

*Increase in Authorized Shares*

On June 2, 2025, the Company filed a Certificate of Amendment to its Articles of Incorporation with the Secretary of State of Nevada to increase the number of authorized shares of common stock from 10,000,000 to 350,000,000 shares, par value $0.0001 per share. The increase was approved by the Company's stockholders at the Annual Meeting of Stockholders held on May 30, 2025.

**2025 Stock Transactions**

 

*At-the-Market Offering*

 

During the year ended December 31, 2025, the Company issued 13,434,601 shares of common stock pursuant to its at-the-market offering program under the At The Market Offering Agreement dated September 13, 2024 with H.C. Wainwright & Co., LLC, for aggregate net proceeds of $43,199,134.

*Exercise of Warrants*

During the year ended December 31, 2025, the Company issued 210,463 shares of common stock upon the cash exercise of outstanding warrants for aggregate gross proceeds of $4,051,415. As of December 31, 2025, no warrants remain outstanding.

*Registered Direct Offering*

 

On December 17, 2025, the Company entered into securities purchase agreements with certain investors and certain directors, officers, and employees of the Company for the purchase and sale of 7,249,972 shares of common stock at a price of $0.90 per share in a registered direct offering, for aggregate gross proceeds of approximately $6,524,975. The offering closed on December 19, 2025. Pursuant to a Placement Agency Agreement, A.G.P./Alliance Global Partners acted as sole placement agent and received a cash fee equal to 5.0% of gross proceeds. Net proceeds to the Company after placement agent fees were approximately $6,078,701. The shares were offered pursuant to the Company's Registration Statement on Form S-3 (Registration No. 333-282118).

*Separation Agreements*

On January 2, 2025, the Company issued 3,334 shares of common stock to Avraham Ben-Tzvi in recognition of his service as a director. The shares were valued at $51.80 per share based on the grant-date fair value, for total non-cash compensation of $172,678, recognized as general and administrative expense during the year ended December 31, 2025.

On April 2, 2025, in connection with the resignation of David Lazar as President and as a member of the Board of Directors, the Company issued 2,857 shares of common stock pursuant to a Separation Agreement, which also provided for a cash payment of $415,000. The expense associated with the issuance of these shares of $111,000 was fully recognized during the year ended December 31, 2024. No additional expense related to this agreement was recognized during the year ended December 31, 2025. The shares are subject to a one-year lock-up agreement.

*Consultant Agreement*

On June 3, 2025, the Company issued 33,000 shares of common stock pursuant to an Advisory Services Agreement with a third party for capital markets and investor relations advisory services. The shares were valued at $1.44 per share based on the agreement date, resulting in total non-cash compensation expense of $47,520, recognized as general and administrative expense during the year ended December 31, 2025.

**2024 Stock Transactions**

*Common Stock Issued for Investment*

In May 2024, the Company issued 21,429 shares of common stock pursuant to the Cannon Agreement for a fair value of $817,500, representing 113,085 common shares of Cannon Estate Winery Ltd. See Note 6 - Investments, at Cost.

 

*Securities Purchase Agreements*

On October 15, 2024, the Company entered into a Securities Purchase Agreement with David E. Lazar, pursuant to which the Company issued 31,481 shares of common stock at a price of $19 per share for gross proceeds of $606,000.

In December 2024, the Company issued 124,364 shares of common stock to several accredited investors at a price of $19 per share and five-year warrants to purchase an aggregate of 311,688 shares of common stock at the exercise price of $19 per share (the "Warrant") pursuant to the Securities Purchase Agreement ("Lazar Purchase Agreement"), dated October 15, 2024 by and between the Company and David E. Lazar. These investors obtained the rights to the issuance of such securities pursuant to the assignment of rights of a purchaser by David Lazar as provided for in the Lazar Purchase Agreement. The Company received net proceeds of $2,394,000 pursuant to the transaction.

In December 2024, the Company issued 18,183 share of common stock at a price of $19 per share to various investors pursuant to a Securities Purchase Agreement for aggregate gross proceeds of $350,020.

*At-the-Market Offering*

During the year ended December 31, 2024, the Company issued 42,445 share of common stock pursuant to its at-the-market offering program for net proceeds of $1,543,079.

*Exercise of Warrants*

In December 2024, 59,366 share of common stock were issued pursuant 101,226 cashless exercise of outstanding warrants. As of December 31, 2024, 210,462 warrants remained outstanding.

 

*Repurchase of Common Stock*

In January 2024, the Company purchased 5,447 share of common stock for $547,415, which is recorded as treasury stock in the accompanying consolidated balance sheets and statements of stockholders' equity.

***Restricted Stock Units***

In August 2023, the Company granted 893 restricted stock units, the Director RSU's, which were to vest in eight equal quarterly installments commencing on October 1, 2023. On August 30, 2023, the Board authorized deferring the vesting of the Director RSUs until such date that the 2021 Plan is amended, which occurred on December 19, 2024, at which time vesting resumed. The 2023 Director RSUs had a grant-date fair value of $6,266,533.

In December 2024, the Company granted 5,714 restricted stock units to four newly elected independent directors 1,429 RSUs each (the "2024 Director RSUs"), vesting in eight equal quarterly installments commencing in the first quarter of 2025, subject to continued service. The 2024 Director RSUs had a grant-date fair value of $55.65 per unit, for an aggregate grant-date fair value of $318,000.

The following table summarizes RSU activity for the years ended December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Restricted Stock Units** | **Restricted Stock Units** |
|  | **Number of<br> shares** | **Weighted<br> Average <br> Fair Value** |
| Unvested as of December 31, 2023 | 836 | $6911 |
| &nbsp;&nbsp;&nbsp;Granted | 5714 | 56 |
| &nbsp;&nbsp;&nbsp;Vested | (469) | 7000 |
| &nbsp;&nbsp;&nbsp;Forfeited | (86) | 6125 |
| Unvested as of December 31, 2024 | 5996 | $382 |
| &nbsp;&nbsp;&nbsp;Granted |  |  |
| &nbsp;&nbsp;&nbsp;Vested | (2419) | 839 |
| &nbsp;&nbsp;&nbsp;Forfeited | (3577) | 73 |
| Unvested as of December 31, 2025 | - | $- |

---

Stock-based compensation expense recognized in connection with RSU vesting was $1,712,769 and $2,533,256 for the years ended December 31, 2025 and 2024, respectively, recorded within general and administrative expenses in the consolidated statements of operations. As of December 31, 2025, all restricted stock units have been fully vested or forfeited and there is no unrecognized compensation cost remaining.

**11. RELATED PARTY TRANSACTIONS**

 

*KBROS and Ssquared Spirits LLC*

The Company's founder and Chief Executive Officer, who is a stockholder and member of the board of directors has an economic interest in Ssquared Spirits LLC, the seller of the CWS Platform acquisition. The spouse of the Company's former Chief Executive Officer and director, is the President and controlling stockholder of KBROS, the managing member and director of Ssquared Spirits LLC, and a minority shareholder with the Company. See Note 5 for the CWS Platform acquisition from SSquared.

KBROS serves as the Company's Product Handler pursuant to a Product Handling Agreement, under which KBROS provides product procurement, order fulfillment, and regulatory compliance services in connection with the CWS Platform. Under the agreement, KBROS is entitled to a monthly fee of $40,000 plus reimbursement of shipping and handling fees incurred in fulfilling customer orders, and a bonus upon reaching certain revenue milestones. The Company incurred product handling fees of $40,000 and $480,000 to KBROS for the years ended December 31, 2025 and 2024, respectively, recorded within cost of revenue in the consolidated statements of operations. In addition, for the years ended December 31, 2025 and 2024, the Company paid $100,000 and 200,000, respectively, in incentive compensation, which is included in sales and marketing expenses in the consolidated statements of operations.

In October, 2024, the Company entered into a settlement and release agreement with KBROS, and its controlling stockholder, for an aggregate amount equal to $4,100,000, which is included in general and administrative expenses in the consolidated statements of operations. As of December 31, 2025 and December 31, 2024, $675,975 and $3,600,000, respectively, remained unpaid and were included in accrued and other payables, related party on the consolidated balance sheet.

See Note 15 for funding commitment with KBROS.

 

 

*Country Wine & Spirits, Inc. ("CWS")* 

CWS operates six brick and mortar locations for the sale of beer, wine, spirits and create value in retail locations throughout Southern California and specializes in logistics of shipping and helping brands reach customers. To date CWS has distributed all of the alcohol ordered by customers through the CWS Platform, via our Product Handler agreement with KBROS. The President of CWS is also the 100% owner of KBROS, the Product Handler.

As of December 31, 2025, the Company had gross accounts receivable, related party with CWS of $300,231, against which the Company recorded an allowance for credit losses of $67,948, resulting in a net carrying value of $232,283, included in accounts receivable, related party on the consolidated balance sheet. As of December 31, 2024, accounts receivable, related party with CWS was $149,510 with no allowance recorded. Subsequent to December 31, 2025, the Company offset the outstanding receivable balance against regular payables due to KBROS, resulting in a net settlement of the amount owed.

*Performance Bonus – Chief Executive Officer*

During the years ended December 31, 2025 and 2024, the Company paid its Chief Executive Officer a performance bonus of $100,000 and $200,000 for achieving certain revenue levels through the CWS Platform, which is included under sales and marketing expense in the consolidated statements of operations.

*Retention Agreements*

 

In October 2024, the Company entered into a retention agreement with its Chief Financial Officer whereby a retention bonus of $550,000 was awarded for continued services. This amount was included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2024. As of December 31, 2025 and 2024, $0 and $250,000, respectively, remained unpaid and is included within accrued and other payables, related party in the consolidated balance sheets.

In October 2024, the Company entered into a retention agreement with its Chief Executive Officer, and entities affiliated with the CEO, whereby a retention bonus of $850,000 was awarded for continued services. This amount was included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2024. As of December 31, 2025 and 2024, $0 and $800,000, respectively, remained unpaid and is included within accrued and other payables, related party in the consolidated balance sheets.

In October 2024, the Company entered into a retention agreement with its Chief Marketing Officer, Jaclyn Hoffman, whereby a retention bonus of $285,000 was awarded for continued services. This amount was included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2024. As of December 31, 2025 and 2024, $0 and $255,000, respectively, remained unpaid and is included within accrued and other payables, related party in the consolidated balance sheets.

In October 2024, the Company entered into a retention agreement with its director Alexandra Hoffman whereby a retention bonus of $600,000 was awarded for continued services. This amount was included in general and administrative expenses in the consolidated statements of operations for the year ended December 31, 2024. As of December 31, 2025 and 2024, $0 and $500,000, respectively, remained unpaid and was included within accrued and other payables, related party on the consolidated balance sheet.

During the year ended December 31, 2025 and 2024, the Company paid an aggregate of $0 and $120,000, respectively, to four former directors as per their respective settlement agreements.

*Due to/from Related Parties*

As of December 31, 2025, the Company had $6,713 due to related parties on the consolidated balance sheet, consisting of (i) $3,713 in Company business expenses charged to a credit card held by Sean Dollinger, the Company's Chief Executive Officer, representing reimbursable business expenses; and (ii) $3,000 payable directly to Mr. Dollinger. As of December 31, 2024, there were no such amounts outstanding.

As of December 31, 2025, the Company had $2,364,450 due from related parties, consisting of $50,000 due from Sean Dollinger, the Company's Chief Executive Officer, and $2,314,450 due from President and a member of the Board of Directors of the Company. As of December 31, 2024, there were no such amounts outstanding. These amounts are unsecured, non-interest bearing, and have no fixed repayment terms. On April 10, 2026, the amount was received by the Company.

*Lease*

The Company historically leased space, which is now month-to-month from South Doll Limited Partnership, an entity affiliated with the Company's CEO. During the year ended December 31, 2024, as part of the retention and settlement agreements, the Company agreed to pay this entity $40,000, which is outstanding as on December 31, 2025 and 2024 and included in accrued and other payables, related party in the consolidate balance sheets.

SWOL Holdings Inc., a wholly owned subsidiary of the Company, entered into a commercial lease agreement with CapMinds, a related party, for office space at 6538 Collins Avenue, Suite 344, Miami Beach, Florida 33141, commencing March 15, 2025 and expiring March 31, 2030, at a monthly base rent of $1,200. CapMinds is an entity affiliated with Alexandra Hoffman, Secretary and Technical Writer of the Company and Chief Executive Officer of SWOL Holdings Inc.

The Company also maintains a mailing address in North Carolina at 5306 Six Forks Rd Ste 107 PMB1290 Raleigh, NC 27609, which is used for correspondence and administrative purposes.

**12. SEGMENT AND GEOGRAPHIC INFORMATION**

The Company determines its operating segments in accordance with ASC 280, *Segment Reporting*, based on the information reviewed by the Chief Operating Decision Maker ("CODM"), who is the Company's Chief Executive Officer. The CODM reviews financial performance and allocates resources on the basis of consolidated net loss as presented in the consolidated statements of operations. Accordingly, the Company has determined that it operates as a single reportable segment in the beverage alcohol e-commerce and marketing industry. The financial information for this single segment is presented in the consolidated financial statements and accompanying notes contained herein.

*Geographic Information*

The Company's revenues are generated primarily in the United States. The Company's subsidiary, YHC Online Limited, is incorporated and operates in Hong Kong; however, it did not generate revenue during the years ended December 31, 2025 and 2024. Accordingly, substantially all revenues are attributable to the United States.

**13. LEASES**

*SWOL Lease*

In March 2025, SWOL Holdings Inc., a wholly-owned subsidiary of the Company, entered into a commercial lease agreement with CapMinds, a related party, for office space located at 6538 Collins Ave, Suite 344, Miami Beach, Florida, which also serves as the Company's principal executive offices. CapMinds is an entity affiliated with Alexandra Hoffman, CEO of SWOL Holdings. See Note 11 - Related Party Transactions. The lease commenced on March 15, 2025 and expires on March 31, 2030, with a term of approximately five years. Base rent is $1,200 per month, with all utilities and service charges borne by the landlord. The lease does not contain renewal options at a predetermined rate, variable lease payments, or residual value guarantees.

Upon commencement, the Company recognized a right-of-use asset and corresponding operating lease liability calculated using an incremental borrowing rate of 8.0% per annum. For the year ended December 31, 2025, the Company recognized lease expense of $10,800, included in general and administrative expenses in the consolidated statements of operations.

The following table summarizes the operating lease assets and liabilities as of December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| **<u>Operating Leases</u>** |  |  |
| Right-of-use assets | $51651 | $- |
| Right of use liability, current portion | 10628 |  |
| Right of use liability | 41023 | - |
| &nbsp;&nbsp;&nbsp;Total lease liabilities | $51651 | $- |
| Weighted Average Remaining Lease Term (years) | 4.25 |  |
| Weighted Average Discount Rate | 8% |  |

---

A summary of lease expense recognized in the consolidated statement of operations is as follows:

---

| | | |
|:---|:---|:---|
|  | **Years Ended<br> December 31,** | **Years Ended<br> December 31,** |
|  | **2025** | **2024** |
| <u>Operating Leases</u> |  |  |
| Amortization of right-of-use asset | $7637 | $&nbsp;&nbsp;&nbsp;&nbsp;- |
| Internet of lease liability | 3163 | $- |
| Total operating lease expense | $10800 | $- |

---

The following is the summary of future minimum payments:

---

| | |
|:---|:---|
| **December 31,** | |
| 2026 | 14400 |
| 2027 | 14400 |
| 2028 | 14400 |
| 2029 | 14400 |
| Thereafter | 3600 |
| Total lease payments | 61200 |
| Less: Imputed interest | (9549) |
| Total | $51651 |

---

Subsequent to December 31, 2025, the commercial lease agreement became ineffective. As a result of the lease going ineffective, the related right-of-use asset of $51,651 and operating lease liability of $51,651 recognized on the consolidated balance sheet as of December 31, 2025 will be derecognized in the period in which the lease was determined to be ineffective.

**14. INCOME TAXES**

The Company accounts for income taxes under ASC 740, *Income Taxes*, using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

*Income Tax expense*

 

The income tax expense consisted of the following for the years ended December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Years Ended <br> December 31,** | **Years Ended <br> December 31,** |
|  | **2025** | **2024** |
| Current: |  |  |
| Federal | $- | $- |
| State |  |  |
| Foreign | - | - |
| Total current |  |  |
| Deferred: |  |  |
| Federal |  |  |
| State |  |  |
| Foreign | - | - |
| Total deferred | - | - |
| Total income tax expense | $- | $- |

---

*Effective Tax Rate Reconciliation*

 

The following table reconciles the U.S. federal statutory income tax rate to the Company's effective income tax rate:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the year ended<br> December 31,** | **For the year ended<br> December 31,** | **For the year ended<br> December 31,** | **For the year ended<br> December 31,** |
|  | **2025** | **2025(%)** | **2024** | **2024(%)** |
| Tax benefit at statutory federal rate | (7134082) | -27.95% | (6360248) | -27.95% |
| State income taxes |  | 0.0% |  | 0.0% |
| Non-deductible M&E | 43044 | 0.2% | 18446 | 0.08% |
| Non-deductible impairment charges and other | 315159 | 1.2% | 1134572 | 4.99% |
| Non-deductible stock-based compensation | 540302 | 2.1% | 708096 | 3.11% |
| Change in valuation allowance | 6235577 | 24.44% | 4499134 | 19.77% |
| Effective income tax rate | $- | 0% | $- | 0% |

---

*Deferred Tax Assets*

The significant components of the Company's deferred tax assets as of December 31, 2025 and 2024 are as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
| Deferred tax assets: |  |  |
| Net operating loss carry forwards | $13449558 | $7213981 |
| Total gross deferred tax assets | 13449558 | 7213981 |
| Less: Valuation allowance | (13449558) | (7213981) |
| Net deferred tax asset | $- | $- |

---

*Net Operating Loss Carryforwards*

 

As of December 31, 2025, the Company had U.S. federal net operating loss carryforwards of approximately $48.1 million. These NOL carryforwards were generated after December 31, 2017 and may be carried forward indefinitely. However, pursuant to the Tax Cuts and Jobs Act of 2017, the utilization of these NOL carryforwards is limited to 80% of taxable income in any given tax year. The Company's NOL carryforwards may be subject to further annual limitations under Section 382 of the Internal Revenue Code in the event of certain ownership changes.

*Valuation Allowance*

 

The following table presents the activity in the Company's valuation allowance for the years ended December 31, 2025 and 2024:

---

| | | |
|:---|:---|:---|
|  | **Years Ended <br> December 31,** | **Years Ended <br> December 31,** |
|  | 2025 | 2024 |
| Balance, beginning of year | $7213981 | $2714847 |
| Increase: |  |  |
| Current year NOL generated | 6235577 | 4499134 |
| Balance, end of year | $13449558 | $7213981 |

---

The Company has recorded a full valuation allowance against its net deferred tax assets as of December 31, 2025 and 2024. Management determined that it is more likely than not that the deferred tax assets will not be realized, based on the Company's history of cumulative operating losses and the uncertainty regarding the generation of sufficient future taxable income.

*Uncertain Tax Positions*

The Company had no unrecognized tax benefits as of December 31, 2025 and 2024, and does not anticipate any material changes in unrecognized tax benefits within the next twelve months. The Company's policy is to recognize interest and penalties related to uncertain tax positions as a component of income tax expense. No interest or penalties were recognized during the years ended December 31, 2025 and 2024.

The Company files income tax returns in the U.S. federal jurisdiction, applicable U.S. state jurisdictions, and Hong Kong.

The Company has evaluated its income tax positions and has determined that it does not have any uncertain tax positions. The Company will recognize interest and penalties related to any uncertain tax positions through its income tax expense.

The Company is subject to taxation in the following jurisdictions:

 *United States — Federal and State:* The Company is subject to U.S. federal corporate income tax at a statutory rate of 21% under the Tax Cuts and Jobs Act of 2017. The Company also determined that California state income tax applies, resulting in a combined blended effective rate of approximately 27.95%. Nevada, the Company's state of incorporation through March 2, 2026, does not impose a state corporate income tax. Following reincorporation in Delaware on March 2, 2026, the Company may be subject to Delaware state income tax in future periods.

 *Hong Kong:* YHC Online Limited, incorporated in Hong Kong in July 2025, is subject to Hong Kong profits tax at a rate of 8.25% on the first HKD 2,000,000 of assessable profits and 16.5% on profits above that threshold. YHC Online Limited did not generate any taxable income in Hong Kong during the year ended December 31, 2025.

The Company files income tax returns in the U.S. federal jurisdiction, applicable U.S. state jurisdictions, and Hong Kong. The Company is not presently subject to any income tax audit in any taxing jurisdiction. All tax years from 2021 remain open to examination by U.S. federal and applicable state tax authorities, and all periods since YHC Online Limited's incorporation in July 2025 remain open to examination by Hong Kong tax authorities.

**15. COMMITMENTS AND CONTINGENCIES**

 

*Funding Commitment Agreement*

On November 1, 2023, the Company entered into a Funding Commitment Agreement with KBROS, the Product Handler pursuant to the Product Handling Agreement as defined in Note 5. Pursuant to this agreement, the Company committed to provide annual funding to the Product Handler from time to time in the minimum amount of $2,500,000 to enable the Product Handler to purchase inventory from Company-approved vendors ("Vendors"). The Company may, without notice to Product Handler, elect not to advance funding for any inventory sold by particular Vendors with respect to which the Company reasonably feels insecure. This Agreement concerns a funding commitment, and not the purchase of Products from Product Handler or Vendors.

For further details regarding the settlement agreement, see Note 11.

*Legal Proceedings — Kingbird Ventures, LLC*

On July 11, 2025, the Company, along with several of its current and former officers and directors and other parties, was named as a defendant in an action filed in the Eighth Judicial District Court, Clark County, Nevada, captioned *Kingbird Ventures, LLC v. Sean Dollinger, et al.* The complaint alleged, among other things, breach of fiduciary duties, violations of Nevada Revised Statutes Sections 78.650, 78.630, 207.400, 90.570, and 32.010, alter ego liability, and civil conspiracy. The complaint sought, among other things, unspecified monetary damages, a declaratory judgment, injunctive relief to freeze the assets of the Company and certain other defendants, and relief to prevent material corporate decisions by the Company.

On September 22, 2025, the Company entered into two settlement agreements with Kingbird Ventures and the other parties named therein to resolve all matters related to the litigation.

The First Settlement Agreement resolved the direct claims asserted by Kingbird Ventures against the Company and other defendants, providing for the dismissal of all direct claims with prejudice, mutual releases among the parties, a cash payment obligation of $13,000,000 from the Nevada Defendants (as defined in the First Settlement Agreement), and customary provisions including no admission of liability and confidentiality.

The Second Settlement Agreement resolved the stockholder derivative claims brought on behalf of the Company against certain current and former officers and directors, providing for the dismissal of the derivative action with prejudice, subject to court approval, mutual releases among the parties, and customary provisions including no admission of liability, cooperation undertakings, and confidentiality.

The Company recognized the full settlement amount of $13,000,000 as legal settlement expense in the consolidated statements of operations for the year ended December 31, 2025, presented as a separate line item within other expense to distinguish it from the Company's ongoing operating results. As of December 31, 2025, the settlement obligation has been paid in full and no remaining liability is recorded on the consolidated balance sheet in connection with this matter.

**16. SUBSEQUENT EVENTS**

*Reincorporation and Capital Structure Changes*

On March 2, 2026, the Company's stockholders approved the reincorporation of the Company from the State of Nevada to the State of Delaware, which was effected on the same date. In connection with the special meeting, stockholders also approved an increase in the number of authorized shares of common stock from 350,000,000 to 1,500,000,000 shares, and authorized the Board of Directors, at its discretion, to effect one or more reverse stock splits of the Company's common stock at a ratio ranging from 1-for-40 to 1-for-800 at any time prior to February 23, 2028. As of the date of these financial statements, no reverse stock split has been effected.

*At-the-Market Offering*

 

On March 11, 2026, the Company entered into a sales agreement with A.G.P./Alliance Global Partners, pursuant to which the Company may sell shares of its common stock having an aggregate offering price of up to $50,273,610 from time to time in at-the-market transactions. The sales agent is entitled to a commission of 3.0% of gross proceeds per share sold.

*Termination of Joint Venture Agreements*

In April 2026, all four joint venture agreements entered into in December 2025 by YHC Online Limited with Bancroft Equity Limited, Emerald Wealth Inc., Meridian Financial Solutions Inc., and Sequoia Equity Group Inc. were terminated. In connection with the terminations, all amounts previously funded under the agreements, aggregating $18,494,000, comprising $14,670,000 funded to the three formed joint venture entities and $3,824,000 advanced to Sequoia Equity Group Inc., were returned to the Company in full. Following the terminations, the Company has no remaining joint venture commitments or obligations.

*Termination of Distribution and Marketing Service Agreements*

In April 2026, both distribution and marketing service agreements entered into during 2025 with two Hong Kong entities were terminated. In connection with the terminations, all amounts previously paid under the agreements, aggregating $3,279,000, were returned to the Company in full.

*SWOL Holdings Inc.- Form S-1 Registration Statement*

 

On January 27, 2026, SWOL Holdings Inc., a wholly-owned subsidiary of the Company, filed a registration statement on Form S-1 with the SEC in connection with a proposed initial public offering of SWOL's equity securities. As of the date of these financial statements, the registration statement has not been declared effective. There can be no assurance that the offering will be completed on the terms currently contemplated, or at all. The Company had $203,950 in deferred offering costs related to this registration statement recorded as of December 31, 2025, which will be reclassified to additional paid-in capital upon completion of the offering or expensed if the offering is abandoned.

*Fusion Five Continents Securities Limited Share Purchase Agreement*

On April 11, 2026, the Company entered into a share purchase agreement with Fusion Five Continents Securities Limited, a New Zealand limited company (the "Target Company"), and with the Target Company's controlling shareholder, pursuant to which the Company agreed to acquire all of the issued and outstanding shares of the Target Company in multiple closings, at a total consideration of $126,880,000. An initial payment of $28,080,000 in Tether (USDT) will be made no later than April 24, 2026 for 24% of the Target Company's ordinary shares. The acquisition of a controlling stake in the Target Company is subject to required government regulatory approvals, after which the Company will complete the purchase of the remaining Target Company shares in one or more subsequent closings for an aggregate purchase price of $98,800,000.

The Target Company is a brokerage enabling clients internationally to buy and sell securities electronically and offering clients the ability to make stablecoin deposits for the trading of Hong Kong and U.S. equities. In addition to commercial considerations about revenue growth and market potential, the Company's management believes that the Target Company will help to ensure the Company's long-term financial stability and profitability.

## Exhibit 19.1

**Exhibit 19.1**

**LQR HOUSE INC.**

**INSIDER TRADING POLICY**

**Dated: March 28, 2024**

**<u>Purpose</u>**

This Insider Trading Policy (the "**Policy**") provides guidelines with respect to transactions in the securities of LQR House Inc. (the "**Company**") and the handling of confidential information about the Company and the companies with which the Company does business.

The Company's Board of Directors has adopted this Policy to promote compliance with federal, state and foreign securities laws that prohibit certain persons who are aware of material nonpublic information about a company from: (i) trading in securities of that company; or (ii) providing material nonpublic information to other persons who may trade on the basis of that information.

**<u>Persons Subject to the Policy</u>**

This Policy applies to all officers of the Company and any subsidiaries the Company may acquire, all members of the Company's Board of Directors and all employees of the Company and its subsidiaries.

The Company may also determine that other persons should be subject to this Policy, such as contractors or consultants who have access to material nonpublic information.

This Policy also applies to family members, other members of a person's household and entities controlled by a person covered by this Policy, as described below.

**<u>Transactions Subject to the Policy</u>**

This Policy applies to transactions in the Company's securities (collectively referred to in this Policy as "**Company Securities**"), including the Company's common stock, options to purchase common stock, or any other type of securities that the Company may issue, including (but not limited to) preferred stock, convertible debentures and warrants, as well as derivative securities that are not issued by the Company, such as exchange-traded put or call options or swaps relating to the Company's Securities.

**<u>Individual Responsibility</u>**

Persons subject to this Policy have ethical and legal obligations to maintain the confidentiality of information about the Company and to not engage in transactions in Company Securities while in possession of material nonpublic information.

Persons subject to this policy must not engage in illegal trading and must avoid the appearance of improper trading.

Each individual is responsible for making sure that he or she complies with this Policy, and that any family member, household member or entity whose transactions are subject to this Policy, as discussed below, also comply with this Policy.

In all cases, the responsibility for determining whether an individual is in possession of material nonpublic information rests with that individual, and any action on the part of the Company, the Compliance Officer or any other employee or director pursuant to this Policy (or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws.

LQR House Inc. – Insider Trading Policy 1

*You could be subject to severe legal penalties and disciplinary action* by the Company for any conduct prohibited by this Policy or applicable securities laws, as described below in more detail under the heading "Consequences of Violations."

**<u>Administration of the Policy</u>**

Kumar Abhishek shall serve as the Compliance Officer for the purposes of this Policy, and in his absence, another employee designated by the Compliance Officer shall be responsible for administration of this Policy. The Compliance Officer is authorized to consult with the Company's securities counsel without notice and at such times as he may deem necessary or appropriate at the expense of the Company. All determinations and interpretations by the Compliance Officer shall be final and not subject to further review. The Company's securities counsel is Jeffrey Wofford, Esq., at the law firm of Sichenzia Ross Ference Carmel LLP. His email is: jwofford@srfc.law; telephone: 646-876-0618.

**<u>Statement of Policy</u>**

It is the policy of the Company that no director, officer or other employee of the Company (or any other person designated by this Policy or by the Compliance Officer as subject to this Policy) who is aware of material nonpublic information relating to the Company may, directly, or indirectly through family members or other persons or entities:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Engage in transactions in Company Securities, except as otherwise specified in this Policy under the headings "Transactions Under Company Plans," "Transactions Not Involving a Purchase or Sale" and "Rule 10b5-1 Plans;"

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Recommend the purchase or sale of any Company Securities to any person or entity;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Disclose material nonpublic information to persons within the Company whose jobs do not require them to have that information, or outside of the Company to other persons, including, but not limited to, family, friends, business associates, investors and expert consulting firms, unless any such disclosure is made in accordance with the Company's policies regarding the protection or authorized external disclosure of information regarding the Company; or,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Assist anyone engaged in the above activities.

In addition, it is the policy of the Company that no director, officer or other employee of the Company (or any other person designated as subject to this Policy) who, in the course of working for the Company, learns of material nonpublic information about a company with which the Company does business, including a customer or supplier of the Company, may trade in that company's securities until the information becomes public or is no longer material.

There are no exceptions to this Policy, except as specifically noted herein. Transactions that may be necessary or justifiable for independent reasons (such as the need to raise money for an emergency expenditure), or small transactions, are *not excepted from this Policy*. The securities laws do not recognize any mitigating circumstances, and, in any event, even the appearance of an improper transaction must be avoided to preserve the Company's reputation for adhering to the highest standards of conduct.

LQR House Inc. – Insider Trading Policy 2

**<u>Definition of Material Nonpublic Information</u>**

<u>Material Information</u>. Information is considered "material" if a reasonable investor would consider that information important in making a decision to buy, hold or sell securities. Any information that could be expected to affect a company's stock price, whether it is positive or negative, should be considered material. There is no bright-line standard for assessing materiality; rather, materiality is based on an assessment of all of the facts and circumstances, and is often evaluated by enforcement authorities with the benefit of hindsight. While it is not possible to define all categories of material information, some examples of information that ordinarily would be regarded as material are:

● Projections of future earnings or losses, or other earnings guidance;

● Changes to previously announced earnings guidance, or decisions to suspend earnings guidance;

● A pending or proposed merger, acquisition or tender offer;

● A pending or proposed acquisition or disposition of a significant asset;

● A pending or proposed joint venture;

● A Company restructuring;

● Significant related party transactions;

● A change in dividend policy, the declaration of a stock split or an offering of additional securities;

● Bank borrowings or other financing transactions out of the ordinary course of business;

● The establishment of a repurchase program for Company Securities;

● A change in the Company's pricing or cost structure;

● Major marketing changes;

● A change in management;

● A change in auditors or notification that the auditor's report may no longer be relied upon;

● Development of a significant new product, process or service;

● Pending or threatened significant litigation, or the resolution of such litigation;

● Impending bankruptcy or the existence of severe liquidity problems;

● The gain or loss of a significant customer or supplier;

● The results of clinical trials or testing of the Company's products or services;

● A significant cybersecurity incident, such as a data breach, or any other significant disruption in the Company's operations or loss, potential loss, breach or unauthorized access of its property or assets, whether at its facilities or through its information technology infrastructure; or

● The imposition of an event-specific restriction on trading in the Company's Securities or the securities of another company or the extension or termination of such restriction.

<u>When Information is Considered Public</u>. Information that has not been disclosed to the public is generally considered to be nonpublic information. In order to establish that the information has been disclosed to the public, it may be necessary to demonstrate that the information has been widely disseminated. Information generally would be considered widely disseminated if it has been disclosed through the Dow Jones "broad tape," newswire services, a broadcast on widely-available radio or television programs, publication in a widely-available newspaper, magazine or news website, or public disclosure documents filed with the United States Securities and Exchange Commission ("**SEC**") that are available on the SEC's website, or subject to the Compliance Officer's determination, disclosure on the Company's website or through a social media.

By contrast, information would likely not be considered widely disseminated if it is available only to the Company's employees, or if it is only available to a select group of analysts, brokers and institutional investors.

LQR House Inc. – Insider Trading Policy 3

Once information is widely disseminated, it is still necessary to provide the investing public with sufficient time to absorb the information. As a general rule, information should not be considered fully absorbed by the marketplace until after the second business day after the day on which the information is released. If, for example, the Company were to make an announcement on a Monday, you should not trade in Company Securities until Thursday. Depending on the particular circumstances, the Company may determine that a longer or shorter period should apply to the release of specific material nonpublic information. For purposes of this Policy, a "**business day**" is any day that the Nasdaq Capital Market is open for regular way day trading.

**<u>Transactions by Family Members and Others</u>**

This Policy applies to your family members who reside with you (including a spouse, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), anyone else who lives in your household, and any family members who do not live in your household but whose transactions in Company Securities are directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in Company Securities (collectively referred to as "**Family Members**").

You are responsible for the transactions of these other persons and therefore should make them aware of the need to confer with you before they trade in Company Securities, and you should treat all such transactions for the purposes of this Policy and applicable securities laws as if the transactions were for your own account.

This Policy does not, however, apply to personal securities transactions of Family Members where the purchase or sale decision is made by a third party not controlled by, influenced by or related to you or your Family Members.

**<u>Transactions by Entities that You Influence or Control</u>**

This Policy applies to any entities that you influence or control, including any corporations, partnerships or trusts (collectively referred to as "**Controlled Entities**"), and transactions by these Controlled Entities should be treated for the purposes of this Policy and applicable securities laws as if they were for your own account.

**<u>Transactions Under Company Plans</u>**

This Policy does not apply in the case of the following transactions, if currently applicable, except as specifically noted:

<u>Stock Option Exercises</u>. This Policy does not apply to the exercise of an employee stock option acquired pursuant to the Company's plans, or to the exercise of a tax withholding right pursuant to which a person has elected to have the Company withhold shares subject to an option to satisfy tax withholding requirements. This Policy does apply, however, to any sale of stock as part of a broker-assisted cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an option.

<u>Restricted Stock Awards</u>. This Policy does not apply to the vesting of restricted stock, or the exercise of a tax withholding right pursuant to which you elect to have the Company withhold shares of stock to satisfy tax withholding requirements upon the vesting of any restricted stock. The Policy *does apply*, however, to any market sale of restricted stock.

<u>401(k) Plan</u>. This Policy does not apply to purchases of Company Securities in the Company's 401(k) plan resulting from your periodic contribution of money to the plan pursuant to your payroll deduction election.

This Policy *does apply*, however, to certain elections you may make under the 401(k) plan, including: (a) an election to increase or decrease the percentage of your periodic contributions that will be allocated to the Company stock fund; (b) an election to make an intra-plan transfer of an existing account balance into or out of the Company stock fund; (c) an election to borrow money against your 401(k) plan account if the loan will result in a liquidation of some or all of your Company stock fund balance; and (d) an election to pre-pay a plan loan if the pre-payment will result in allocation of loan proceeds to the Company stock fund. It should be noted that sales of Company Securities from a 401(k) account are *also subject to Rule 144*, and therefore affiliates should ensure that a Form 144 is filed when required.

LQR House Inc. – Insider Trading Policy 4

<u>Employee Stock Purchase Plan</u>. This Policy does not apply to purchases of Company Securities in the employee stock purchase plan resulting from your periodic contribution of money to the plan pursuant to the election you made at the time of your enrollment in the plan. This Policy also does not apply to purchases of Company Securities resulting from lump sum contributions to the plan, provided that you elected to participate by lump sum payment at the beginning of the applicable enrollment period.

This Policy *does apply*, however, to your election to participate in the plan for any enrollment period, and to your sales of Company Securities purchased pursuant to the plan.

<u>Dividend Reinvestment Plan</u>. This Policy does not apply to purchases of Company Securities under the Company's dividend reinvestment plan resulting from your reinvestment of dividends paid on Company Securities.

This Policy *does apply*, however, to voluntary purchases of Company Securities resulting from additional contributions you choose to make to the dividend reinvestment plan, and to your election to participate in the plan or increase your level of participation in the plan. This Policy also applies to your sale of any Company Securities purchased pursuant to the plan.

<u>Other Similar Transactions</u>. Any other purchase of Company Securities from the Company or sales of Company Securities to the Company are not subject to this Policy.

**<u>Transactions Not Involving a Purchase or Sale</u>**

*Bona fide* gifts are not transactions subject to this Policy, unless the person making the gift has reason to believe that the recipient intends to sell the Company Securities while the officer, employee or director is aware of material nonpublic information, or the person making the gift is subject to the trading restrictions specified below under the heading "Additional Procedures" and the sales by the recipient of the Company Securities occur during a blackout period.

Further, transactions in mutual funds that are invested in Company Securities are not transactions subject to this Policy.

**<u>Special and Prohibited Transactions</u>**

Accordingly, the Company has determined that there is a heightened legal risk and/or the appearance of improper or inappropriate conduct if the persons subject to this Policy engage in certain types of transactions. It therefore is the Company's policy that any persons covered by this Policy may not engage in any of the following transactions, or should otherwise consider the Company's preferences as described below:

<u>Short-Term Trading</u>. Short-term trading of Company Securities may be distracting to the person and may unduly focus the person on the Company's short-term stock market performance instead of the Company's long-term business objectives. For these reasons, any director, officer or other employee of the Company who purchases Company Securities in the open market may not sell any Company Securities of the same class during the six months following the purchase (or vice versa). Directors and officers should note the short term trading restrictions of Section 16(b) of the United States Securities Exchange Act of 1934 ("**Exchange Act**").

LQR House Inc. – Insider Trading Policy 5

<u>Short Sales</u>. Short sales of Company Securities (i.e., the sale of a security that the seller does not own) may evidence an expectation on the part of the seller that the securities will decline in value, and therefore have the potential to signal to the market that the seller lacks confidence in the Company's prospects. In addition, short sales may reduce a seller's incentive to seek to improve the Company's performance. For these reasons, short sales of Company Securities are prohibited. In addition, Section 16(c) of the Exchange Act prohibits officers and directors from engaging in short sales. (Short sales arising from certain types of hedging transactions are governed by the paragraph below captioned "Hedging Transactions.")

<u>Publicly-Traded Options</u>. Given the relatively short term of publicly-traded options, transactions in options may create the appearance that a director, officer or employee is trading based on material nonpublic information and focus a director's, officer's or other employee's attention on short-term performance at the expense of the Company's long-term objectives. Accordingly, transactions in put options, call options or other derivative securities, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the next paragraph below.)

<u>Hedging Transactions</u>. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such transactions may permit a director, officer or employee to continue to own Company Securities obtained through employee benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, the director, officer or employee may no longer have the same objectives as the Company's other shareholders. Therefore, directors, officers and employees are prohibited from engaging in any such transactions.

<u>Margin Accounts and Pledged Securities</u>. Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer's consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company Securities, directors, officers and other employees are prohibited from holding Company Securities in a margin account and are strongly discouraged from pledging Company Securities as collateral for a loan. Any person wishing to enter into a legitimate loan pledge arrangement must first submit the proposed transaction in writing for approval by the Compliance Officer at least two weeks prior to the proposed execution of documents evidencing the proposed transaction and must set forth a justification for the proposed transaction and clearly demonstrate the financial capacity to repay the loan without resorting to the pledged securities. The person making the request shall have no other contact with the Compliance Officer on that matter and the Compliance Officer's decision shall be final and binding. (Pledges of Company Securities arising from certain types of hedging transactions are governed by the paragraph above captioned "Hedging Transactions.")

<u>Standing and Limit Orders</u>. Standing and limit orders (except standing and limit orders under approved Rule 10b5-1 Plans, as described below) create heightened risks for insider trading violations similar to the use of margin accounts. There is no control over the timing of purchases or sales that result from standing instructions to a broker, and as a result the broker could execute a transaction when a director, officer or other employee is in possession of material nonpublic information. The Company therefore discourages placing standing or limit orders on Company Securities. If a person subject to this Policy determines that they must use a standing order or limit order, the order should be limited to short duration and should otherwise comply with the restrictions and procedures outlined below under the heading "Additional Procedures."

LQR House Inc. – Insider Trading Policy 6

**<u>Additional Procedures</u>**

The Company has established additional procedures in order to assist the Company in the administration of this Policy, to facilitate compliance with laws prohibiting insider trading while in possession of material nonpublic information, and to avoid the appearance of any impropriety. These additional procedures are applicable only to those individuals described below.

<u>Pre-Clearance Procedures</u>. Any person designated by the Compliance Officer as being subject to these procedures, as well as the Family Members and Controlled Entities of such persons, may not engage in any transaction in Company Securities without first obtaining pre-clearance of the transaction from the Compliance Officer.

A written request for pre-clearance should be submitted to the Compliance Officer at least two business days in advance of the proposed transaction. The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance, and may determine not to permit the transaction. If a person seeks preclearance and permission to engage in the transaction is denied, then he or she should refrain from initiating any transaction in Company Securities, and should not inform any other person of the restriction.

When a request for pre-clearance is made, the requestor should carefully consider whether he or she may be aware of any material nonpublic information about the Company, and should describe fully those circumstances to the Compliance Officer. The requestor should also indicate whether he or she has effected any non-exempt "opposite-way" transactions within the past six months, and should be prepared to report the proposed transaction on an appropriate Form 4 or Form 5. The requestor should also be prepared to comply with SEC Rule 144 and file Form 144, if necessary, at the time of any sale.

All pre-cleared trades must be effected within five business days of receipt of pre-clearance unless an exception is granted. Transactions not effected within the time limit are subject to pre-clearance again.

Within three business days after the execution of the transaction, the requestor shall notify the Compliance Officer of the date and size of the transaction.

<u>Quarterly Trading Restrictions</u>. All officers of the Company, members of the Company's Board of Directors and any persons designated by the Compliance Officer as subject to this restriction, as well as their Family Members or Controlled Entities, may not conduct any transactions involving the Company's Securities (other than as specified by this Policy), during a "**Blackout Period**" for each fiscal quarter, which begins on the 15<sup>th</sup> calendar day of the last month of such quarter and ends on the second business day following the date of the public release of the Company's earnings results for such quarter. In other words, these persons may only conduct transactions in Company Securities during the "**Window Period**" beginning on the third business day following the public release of the Company's quarterly earnings for a quarter and ending on the 14<sup>th</sup> calendar day of the last month of the next fiscal quarter.

Under certain very limited circumstances, a person subject to this restriction may be permitted to trade during a Blackout Period, but only if the Compliance Officer, with the advice of securities counsel if requested by the Compliance Officer, concludes that the person does not, in fact, possess material nonpublic information and may otherwise trade. Persons wishing to trade during a Blackout Period must make such request in writing to the Compliance Officer for approval at least three business days in advance of any proposed transaction involving Company Securities. All such trades are subject to the pre-clearance procedures set forth above under "Pre-Clearance Procedures."

LQR House Inc. – Insider Trading Policy 7

<u>Event-Specific Trading Restriction Periods</u>. From time to time, an event may occur that is material to the Company and is known by only a few directors, officers and/or employees. The involved directors, officers or employees shall promptly notify the Compliance Officer of such event. So long as the event remains material and nonpublic, the persons designated by the Compliance Officer may not trade Company Securities.

In addition, the Company's financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, designated persons should refrain from trading in Company Securities even sooner than the typical Blackout Period described above.

In either event, the Compliance Officer may notify these persons that they should not trade in the Company's Securities, without disclosing the reason for the restriction. The existence of an event-specific trading restriction period or extension of a Blackout Period will not be announced to the Company as a whole, and should not be communicated to any other person. If you know of the event, then even if the Compliance Officer has not designated you as a person who should not trade due to an event-specific restriction, you should not trade while you are aware of material nonpublic information. Exceptions will not be granted during an event-specific trading restriction period.

<u>Exceptions</u>. The quarterly trading restrictions and event-specific trading restrictions do not apply to those transactions to which this Policy does not apply, as described above under the headings "Transactions Under Company Plans" and "Transactions Not Involving a Purchase or Sale." Further, the requirement for pre-clearance, the quarterly trading restrictions and event-specific trading restrictions do not apply to transactions conducted pursuant to approved Rule 10b5-1 plans, described under the heading "Rule 10b5-1 Plans."

**<u>Rule 10b5-1 Plans</u>**

Rule 10b5-1 under the Exchange Act provides a defense from insider trading liability under Rule 10b-5. In order to be eligible to rely on this defense, a person subject to this Policy must enter into a Rule 10b5-1 plan for transactions in Company Securities that meets certain conditions specified in the Rule (a "**Rule 10b5-1 Plan**"). If the plan meets the requirements of Rule 10b5-1, Company Securities may be purchased or sold without regard to certain insider trading restrictions.

To comply with the Policy, a Rule 10b5-1 Plan must be approved by the Compliance Officer and meet the requirements of Rule 10b5-1 and the Company's "Guidelines for Rule 10b5-1 Plans," which may be obtained from the Company's securities counsel. In general, a Rule 10b5-1 Plan must be entered into at a time when the person entering into the plan is not aware of material nonpublic information. Once the plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price at which they are to be traded or the date of the trade. The plan must either specify the amount, pricing and timing of transactions in advance or delegate discretion on these matters to an independent third party.

Any Rule 10b5-1 Plan must be submitted in writing for approval by the Compliance Officer no less than five business days prior to the entry into the Rule 10b5-1 Plan. No further pre-approval of transactions conducted pursuant to the Rule 10b5-1 Plan will be required.

**<u>Post-Termination Transactions</u>**

This Policy continues to apply to transactions in Company Securities even after termination of service to the Company. If an individual is in possession of material nonpublic information when his or her service terminates, that individual may not trade in Company Securities until that information has become public or is no longer material.

LQR House Inc. – Insider Trading Policy 8

**<u>Consequences of Violations</u>**

The purchase or sale of securities while aware of material nonpublic information, or the disclosure of material nonpublic information to others who then trade in the Company's Securities, is prohibited by the federal and state laws. Insider trading violations are pursued vigorously by the SEC, U.S. Attorneys and state enforcement authorities as well as the laws of foreign jurisdictions.

*Punishment for insider trading violations is severe, and could include significant fines and imprisonment.* While the regulatory authorities concentrate their efforts on the individuals who trade, or who tip inside information to others who trade, the federal securities laws also impose potential liability on companies and other "controlling persons" if they fail to take reasonable steps to prevent insider trading by company personnel.

In addition, an individual's failure to comply with this Policy may subject the individual to Company-imposed sanctions, including dismissal for cause, whether or not the employee's failure to comply results in a violation of law. Needless to say, a violation of law, or even an SEC investigation that does not result in prosecution, can tarnish a person's reputation and irreparably damage a career.

**<u>Company Assistance</u>**

Any person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from the Compliance Officer, who can be reached via e-mail at kumar@plantx.com.

**<u>Certification</u>**

All persons subject to this Policy must certify their understanding of, and intent to comply with, this Policy.

LQR House Inc. – Insider Trading Policy 9

**<u>CERTIFICATION</u>**

I certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have read and understand the Insider Trading Policy of LQR House Inc. (the "Policy").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Since the date the Policy became effective, or such shorter period of time that I have been an employee of the Company, I have complied with the Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. I will continue to comply with the Policy for as long as I am subject to the Policy.

---

| |
|:---|
| Print Name: |
| Signature: |
| Date: |

---

LQR House Inc. – Insider Trading Policy 10

## Exhibit 21.1

**Exhibit 21.1** 

**LQR House Inc. Subsidiaries**

---

| | | | |
|:---|:---|:---|:---|
| **Name** | | **Jurisdiction and Principal Activities** | **Ownership** |
| LQR House Acquisition Corp. | ● | Nevada corporation | 100% |
|  | ● | Owns and operates CWS Platform |  |
| YHC Online Limited | ● | Hong Kong company | 100% |
|  | ● | Investment holding |  |
| SWOL Holdings Inc. | ● | Nevada corporation | 100% |
|  | ● | Producing, marketing and distributing a limited-edition Anejo Tequila |  |

---

## Exhibit 23.1

**Exhibit 23.1**

![](ea028638301_ex23-1img1.jpg)

**CONSENT OF INDEPENDENT REGISTERED PUBLIC<br> ACCOUNTING FIRM**

We consent to the incorporation by reference in the Registration Statement of LQR House Inc. on Form S-8 (No. 333-274168) and on Form S-3 (Nos. 333-284485, 333-284138, 333-282118), of our report dated April 15, 2026, relating to the consolidated financial statements of LQR House Inc. for the year ended December 31, 2025, which includes an explanatory paragraph regarding material uncertainty related to going concern which report is included in this Annual Report on Form 10-K of LQR House Inc. for the year ended December 31, 2025.

/s/ ENROME LLP<br>

April 15, 2026

---

| | | |
|:---|:---|:---|
| **Enrome LLP** | 143 Cecil Street, #19-03/04 | admin@enrome-group.com |
|  | GB Building Singapore 069542 | www.enrome-group.com |

---

## Exhibit 23.2

**Exhibit 23.2**

**Consent of Independent Registered Public Accounting Firm**

We consent to the incorporation by reference in the Registration Statement of LQR House Inc. on Form S-8 (No. 333-274168) and on Form S-3 (Nos. 333-284485, 333-284138, 333-282118), of our report dated March 31, 2025, relating to the consolidated financial statements of LQR House Inc. for the year ended December 31, 2024, which includes an explanatory paragraph regarding substantial doubt about its ability to continue as a going concern, and an emphasis of matter paragraph related to retention and settlement agreements primarily with related parties, which report is included in this Annual Report on Form 10-K of LQR House Inc. for the year ended December 31, 2025.

/s/ dbb*mckennon*

 

Newport Beach, California

April 15, 2026

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED**

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Sean Dollinger, certify that:

1. I have reviewed this Annual Report on Form 10-K of LQR House,
Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: April 15, 2026 | By: | */s/ Sean Dollinger* |
|  | Name: | Sean Dollinger |
|  | Title: | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO RULE 13a-14(a)/15d-14(a), AS ADOPTED**

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Kumar Abhishek, certify that:

1. I have reviewed this Annual Report on Form 10-K of LQR House,
Inc.;

2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee
of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | |
|:---|:---|:---|
| Date: April 15, 2026 | By: | */s/ Kumar Abhishek* |
|  | Name: | Kumar Abhishek |
|  | Title: | Chief Financial Officer |
|  |  | (Principal Financial Officer) |
|  |  | (Principal Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER**

**PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Sean Dollinger, the Chief Executive Officer of LQR House, Inc. (the "Company"), hereby certify, that, to my knowledge:

1. The Annual Report on Form 10-K for the period ended December
31, 2025 (the "Report") of the Company fully complies with the requirements of Section 13(a) and 15(d) of the Securities
Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: April 15, 2026 | By: | */s/ Sean Dollinger* |
|  | Name: | Sean Dollinger |
|  | Title: | Chief Executive Officer |
|  |  | (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER**

**PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Kumar Abhishek, the Chief Financial Officer of LQR House Inc. (the "Company"), hereby certify, that, to my knowledge:

1. The Annual Report on Form 10-K for the period ended December
31, 2025 (the "Report") of the Company fully complies with the requirements of Section 13(a)/15(d) of the Securities Exchange
Act of 1934; and

2. The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

---

| | | |
|:---|:---|:---|
| Date: April 15, 2026 | By: | */s/ Kumar Abhishek* |
|  | Name: | Kumar Abhishek |
|  | Title: | Chief Financial Officer |
|  |  | (Principal Financial Officer) |
|  |  | (Principal Accounting Officer) |

---