UNITED
STATES

 SECURITIES
AND EXCHANGE COMMISSION

 WASHINGTON,
D.C. 20549

 FORM

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

 For
the fiscal year ended December 31, 2024

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)

 Nevada

 86-1604197

 (State or other jurisdiction of
 incorporation or organization)

 (I.R.S. Employer
 Identification No.)

 6538 Collins Ave. Suite 344

 Miami
Beach, FL 33141

 (786) 389-9771

 (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:

 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

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

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

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

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

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.

 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.

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.

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).

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, 2024,
the last business day of its most recently completed second fiscal quarter, was $ 4,637,182 based on the closing price of the
registrant's common stock as reported by The Nasdaq Capital Market on that date.

 As of March 28, 2025, the Company had 36,591,337
shares of common stock, $0.0001 par value, issued, and 36,400,709 shares outstanding.

 TABLE
OF CONTENTS

 Item
 1.

 Business

 Item
 1A.

 Risk Factors

 Item
 1B.

 Unresolved Staff Comments

 Item
 1C

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal Proceedings

 Item
 4.

 Mine Safety Disclosures

 Item
 5.

 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 Reserved

 Item
 7.

 Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative and Qualitative Disclosures About Market Risk

 Item
 8.

 Financial Statements and Supplementary Data

 Item
 9.

 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls and Procedures

 Item
 9B.

 Other Information

 Item
 9C

 Disclosure Regarding Foreign Jurisdictions That Prevent Inspections

 Item
 10.

 Directors, Executive Officers and Corporate Governance

 Item
 11.

 Executive Compensation

 Item
 12.

 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item
 13.

 Certain Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal
 Accountant Fees and Services

 Item
 15.

 Exhibits
 and Financial Statement Schedules

 Item

 Form 10-K Summary

 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 Nevada corporation, References to
"management" or our "management team" are to our officers and directors.

 ITEM
1. BUSINESS

 Overview

 Our company, LQR House Inc., a Nevada 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. Additionally, we are in the process
of establishing an exclusive wine club.

 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. The Company owns and operates CWS Platform through its wholly owned subsidiary,
LQR House Acquisition Corp.

 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 CWSpirits.com clientele. 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
(which became Chase Mocktails Ltd). 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

 In February 2024, the Board of Directors of the
Company (the "Board of Directors" or the "Board") declared a 50% stock dividend for distribution to all of the
Company's shareholders of record at the close of business on February 12, 2024. On March 1, 2024, 1,609,817 shares were issued per
the dividend. As a result of the stock dividend, a 3:2 stock split was effected.

 On
September 13, 2024, the Company entered into an at-the-market offering agreement ("ATM Agreement") with H.C. Wainwright &
Co., LLC, as sales agent ("HCW"), relating to the sale of common stock. During the year ended December 31, 2024, the Company
issued an aggregate of 1,485,575 shares of common stock pursuant to such ATM Agreement for net proceeds of $1,543,079. The
Company paid the sales agent compensation with respect to sale of such shares in the amount of $48,018.

 On October 15, 2024, the Company entered into
a Securities Purchase Agreement (the "Lazar Purchase Agreement") with David E. Lazar ("Lazar"), pursuant to which
Lazar agreed to purchase in aggregate 5,454,545 shares of our common stock and a five-year warrant (the "Lazar Warrant" or
if divided and issued to more than one holder, the "Lazar Warrants") to purchase up to 10,909,090 shares of our common stock
at an exercise price of $0.55 per share for $3,000,000 in two separate tranches (the "Lazar Transaction"). Pursuant to the
terms of the Lazar Purchase Agreement we closed the first tranche on October 16, 2024, by issuing to Lazar 1,101,818 shares of common
stock (which represented approximately 19.99% of our outstanding stock on October 15, 2024) at a price of $0.55 per share for proceeds
of $606,000. Pursuant to the terms of the Lazar Purchase Agreement, the closing of the second tranche was subject to stockholder approval
("Stockholder Approval") of (i) the issuance of the remaining 4,352,545 issuable under the Lazar Purchase Agreement and (ii)
the issuance of the Lazar Warrant and the exercise thereof. We obtained Stockholder Approval on December 19, 2024 and closed the second
tranche. Pursuant to the terms of the Lazar Purchase Agreement, Lazar assigned his remaining rights and obligations under the Lazar Purchase
Agreement to 18 investors (the "Lazar Assignees"). On December 30, 2024, the Company issued 4,352,727 shares of common stock
and the Lazar Warrant to the Lazar Assignees for $2,394,000. On December 30, 2024, the Company issued 2,077,800 shares of common stock
pursuant to the cashless exercise of several Lazar Warrants. All of the remaining Lazar Warrants were exercised by the Lazar Assignees
in January 2025 and the Company issued 7,366,209 shares of common stock. As a result of the Lazar transaction, David Lazar was appointed
our President and a Director on our Board and Yilin Lu, Hong Chun Yeung, Lijun Chen and Jing Lu were appointed as Directors on our Board.

 On December 16, 2024, the Company changed its
ticker symbol on NASDAQ from "LQR" to "YHC".

 On December 19, 2024, immediately after the Annual
Meeting, James Huber and Gary Herman resigned from the Board of Directors, effective immediately.

 On December 30, 2024, the Company entered into a Securities Purchase
Agreement ("December Purchase Agreement") with various investors, pursuant to which the Company issued 636,400 shares of common
stock at a price of $0.55 per share for aggregate gross proceeds of $350,020.

 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 has 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, 2025, 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, 2025, 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 Counsil
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 with the assistance of our Chief Executive Officer, Sean Dollinger and Dollinger Innovations.
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. 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 to the Soleil Vino wine club, which
we may launch in future), 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, 2024 and 2023, we had net losses of $22,754,178 and $15,747,724, respectively.

 The Company has raised funds from the IPO and an additional $16.6 million
from its public offerings in October and November 2023. During the year ended December 31, 2024, the Company received net proceeds of
$1,543,079 from the sale of an aggregate of 1,485,575 shares of common stock pursuant to an at-the-market public offering. In addition,
the Company received gross proceeds of $350,020 from the sale of securities pursuant to the December Purchase Agreement, and gross proceeds
of $3,000,000 from the sale of securities pursuant to Lazar Purchase Agreement. However, the Company expects that its cash and cash equivalents
as of the date of this Annual Report on Form 10-K may not be sufficient to fund its operating expenses and potential acquisition 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 ros 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 A ejo 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 A ejo 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:

 SWOL
 A ejo Tequila 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 A ejo 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
 A ejo Tequila is currently priced at $89.99 (MRSP).

 SWOL
 Peach Tequila 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).

 SWOL
 Cristalino Tequila 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).

 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.

 Soleil
Vino will be a wine subscription service that is marketed on the CWS Platform and will offer a selection of vintage and limited
production wines. Through the CWS Platform, users will 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 the highest
quality, and diverse selections of wine offerings, which we refer to as our Wine Club. We expect our Wine Club to have three membership
options based on different wine quality and price. Within each membership, our customers will select whether they want to receive two
or four bottles each month, and whether they want white wine only, red wine only, or a variety box. Members will also get access to a
members-only dashboard, where they can access informational blogs written by in-house wine experts. They will also receive monthly newsletters
with additional information, and various discounts for other products on the CWS Platform. Membership fees for Soleil Vino will be charged
monthly and can be cancelled at any time after the initial three months of subscription service. We are responsible for launching
the Wine Club through a series of ads, social and email campaigns, and all exclusive content and wine selection for members will be handled
by in-house wine experts. We will market the Wine Club on the CWS Platform and are entitled to all the revenue from the subscriptions.
The Wine Club is expected to have three subscription membership options based on different wine quality, price, and quantity.

 The
following table is representative of the Soleil Vino membership options, that we intend to list on the CWS Platform:

 Membership
 Option

 Select
 Membership

 Classic
 Membership

 Premier
 Membership

 Description

 This
 package features, popular, value priced wines and consumer favorites.

 This
 membership will feature quality vintage wine from well-known producers.

 This
 membership includes hand-picked bottles of wine from award winning wineries

 Fee for 2 bottles per month

 $45.00/month

 $55.00/month

 $75.00/month

 Fee for 4 bottles per month

 $85.00/month

 $105.00/month

 $145.00/month

 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 460 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, Linked In, 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 460 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.

 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

 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.

 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 and launching our Wine Club. Moreover, we will continue
developing new flavors, like SWOL Cristalino and SWOL Peach, that align us with current market trends and evolving consumer preferences.

 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.

 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  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 March 31, 2025, 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

 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.

 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. Please refer to the section titled "Cautionary Statement Regarding Forward-Looking
Statements".

 Risks
Related to Our Business and Industry

 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.

 Our
Chief Executive Officer and Director 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.

 Our
business, revenue, and operations depend on our continuing relationship with CWS.

 In the years ended December 31, 2024 and 2023,
all revenue was derived from or directly related to 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 any revenue, CWS will continue to be for the foreseeable future
our only source of distribution of alcoholic beverages. Additionally, because the President of CWS is also the 100% equity owner of KBROS,
we could have opportunities in the future to expand the number of our distributors or even replace CWS with a distributor that offer
terms more favorable. These opportunities could be declined by KBROS as it is responsible for the management of the fulfillment of sales
orders that are generated by the CWS Platform. Because of the affiliate relationship between KBROS and CWS, KBROS would be conflicted
if presented with opportunities for the CWS Platform that are against the interests of CWS and may decline such opportunities against
our interest. While our relationship with CWS is ongoing and is expected to continue, we cannot be certain that CWS will be willing or
able to continue to distribute the products sold on the CWS Platform and although under the Management Agreement it is KBROS's
responsibility to fulfill orders, if we could not or KBROS were not able or willing to secure a new distributor for the CWS Platform
if necessary, the lack of a distributor would have material adverse consequences on our financial condition and prospects.

 We
have a limited operating history, which may make it difficult to evaluate our business and prospects.

 The
Company is an early, startup stage entity with little operating history. The Company only has nominal cash as of the date of this Annual Report on Form 10-K. The revenue and income potential of the Company's business and market are unproven. The Company's limited
operating history makes an evaluation of the Company and its prospects difficult and highly speculative. There can be no assurances that:
(a) the Company will be able to develop products or services on a timely and cost effective basis; (b) the Company will be
able to generate any increase in revenues; (c) the Company will have adequate financing or resources to continue operating its business
and to provide products and services to customers; (d) the Company will earn a profit; (e) the Company can raise sufficient
capital to support operations by attaining profitability; or (f) the Company can satisfy future liabilities.

 Our
independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern in its
report.

 The
Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about
the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements
are issued.

 The accompanying consolidated financial statements
have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal
course of business. The Company sustained net losses of $22,754,178 and $15,747,724 during the years ended December 31, 2024 and 2023,
respectively, and had cash used in operations of $6,618,417 during the year ended December 31, 2024. The Company requires additional
capital to operate and expects losses to continue for the foreseeable future. These factors raise substantial doubts about the Company's
ability to continue as a going concern.

 The Company's ability to continue as a going concern until it
reaches profitability is dependent upon its ability to generate cash from operating activities and to raise additional capital to fund
operations. Management plans to raise additional capital to fund operations through debt and/or equity financings. The Company has raised
funds from the IPO and an additional $16.6 million from its public offerings in October and November 2023. During the year ended December
31, 2024, the Company received net proceeds of $1,543,079 from the sale of an aggregate of 1,485,575 shares of common stock pursuant to
an at-the-market public offering. In addition, the Company received gross proceeds of $350,020 from the sale of securities pursuant to
the December Purchase Agreement, and gross proceeds of $3,000,000 from the sale of securities pursuant to Lazar Purchase Agreement. Our
failure to raise additional capital in future could have a negative impact on not only our financial condition but also our ability to
execute our business plan. No assurance can be given that the Company will be successful in these efforts. The financial statements do
not include any adjustments that might result from the outcome of this uncertainty. The Company may not be able to obtain financing on
acceptable terms, or at all.

 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.

 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, 2024 and 2023, we had net
losses of $22,754,178 and $15,747,724, 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.

 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.

 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.

 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.

 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.

 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.

 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.

 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.

 Our business may be impacted by political,
trade or regulatory developments in the jurisdictions in which we sell our products.

 Significant political, trade, or regulatory developments
in the jurisdictions in which we sell our products, such as those stemming from the change in U.S. federal administration, are difficult
to predict and may have a material adverse effect on us. Similarly, changes in U.S. federal policy that affect the geopolitical landscape
could give rise to circumstances outside our control that could have negative impacts on our business operations. For example, in March
2025, the U.S. initially imposed a 25% tariff on imports from Canada and Mexico and imposed a 20% tariff on imports from China. The U.S.
largely reversed course and goods eligible for treatment under the 2020 United States-Mexico-Canada Agreement ("USMCA")
can enter the U.S. tariff free until April 2, 2025. Historically, tariffs have led to increased trade and political tensions. In response
to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. In retaliation to the recent U.S. imposed tariffs, China
imposed tariffs up to 15% on a wide array of U.S. farm exports, and Canada and Mexico have stated they will impose tariffs on the U.S.
Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange and other economic activities
between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global
financial markets. We import our SWOL Tequila from Mexico. We also sell out products in Canada. Any changes in political, trade, regulatory,
and economic conditions, including U.S. trade policies, could have a material adverse effect on our financial condition, results of operations
or our industry. The impact of these potential tariffs on our financial condition, results of operations or industry, if any, is subject
to a number of factors that are not yet known, including any countermeasures that the target countries may take in response to such tariffs.
In light of these uncertainties, we can provide no assurance that any mitigating actions that may become available to us, such as our
ability to pass along some or all of the costs of any tariffs to some or all of our customers, will be successful.

 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.

 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.

 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.

 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.

 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.

 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.

 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.

 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.

 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.

 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

 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.

 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.

 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.

 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.

 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.

 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.

 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.

 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.

 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.

 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.

 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

 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.

 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.

 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. During the period from August 10, 2023, to March 28, 2025 the closing price of our common stock ranged from a high of $155.97
per share to a low of $0.22 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.

 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.

 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.

 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.

 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.

 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 Nevada 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, or are reasonably likely to materially affect, our business strategy, results
of operations, or financial condition. 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.

 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

 There are no material pending legal proceedings,
to which the Company or any of its subsidiaries is a party or of which any of our property is the subject.

 There
are no material proceedings to which any director or officer, or any associate of any such director or officer, is a party that is adverse
to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries. No director or
executive officer has been a director or executive officer of any business which has filed a bankruptcy petition or had a bankruptcy
petition filed against it during the past ten years. No current director or executive officer has been convicted of a criminal offense
or is the subject of a pending criminal proceeding during the past ten years. No current director or executive officer has been the subject
of any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities during the past ten years. No current director or officer has been found by
a court to have violated a federal or state securities or commodities law during the past ten years.

 From
time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation
is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

 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 March 31, 2025, we had approximately 30 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 2,928,750 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) 500,000 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, 2025, the maximum number of shares of our common stock that may be subject to awards under the 2021 Plan
is 3,500,000.

 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, 2024.

 Plan Category

 Number of
 securities to
 be issued
 upon
 exercise of
 outstanding
 options,

and rights

 Weighted-
 average
 exercise
 price of
 outstanding
 options,
 and rights

 Number of
 securities
 remaining
 available for
 future
 issuance
 under equity
 compensation
 plans
 (excluding
 securities
 reflected in
 column

 Equity compensation plans approved by security holders

 209,845

 $
 10.90

 2,773,750

 Equity compensation plans not approved by security holders

 -

 -

 -

 Total

 209,845

 $
 10.90

 2,773,750

 Recent
Sales of Unregistered Securities

 On May 19, 2024, the Company entered
into Share Exchange Agreement with a Director (the "Seller") of Cannon Estate Winery Ltd., a British Columbia corporation
to consummate an acquisition of approximately 9.99% of Common Shares of Cannon by the Company. Pursuant to the Agreement, the Seller
transferred and delivered to the Company 113,085 of the Common Shares of Cannon and in exchange the Company issued and deliver to the
Seller 750,000 shares of the Company's common stock.

 On October 15, 2024, the Company entered into Lazar Purchase Agreement
pursuant to which Company issued to Lazar 1,101,818 shares of common stock at a price of $0.55 per share for aggregate proceeds of $606,000.

 On December 19, 2024 the Company entered into
independent director agreements with newly elected and appointed directors Mr. Yilin Lu, Mr. Hong Chun Yeung, Mr. Lijun Chen and Dr. Jing
Lu, pursuant to which each director shall receive an equity compensation in a form of 50,000 restricted stock units, vesting in eight
(8) equal quarterly installments commencing in the first quarter of 2025, provided that such directors remain in continuous service of
the Company on such dates granted. In October and December 2024, three directors Jay Dhaliwal, James Huber and Gary Herman resigned as
a member of board. Following their resignation, the unvested restricted stock units ("RSUs") to them were cancelled. As of
December 31, 2024, total RSUs 209,845 remained outstanding.

 On December 30, 2024, the Company issued 4,352,727 shares of common
stock at a price of $0.55 per share, and a five-year warrant to acquire up to 10,909,090 shares of common stock at an exercise price of
$0.55 per share to the Lazar Assignees pursuant to the Lazar Purchase Agreement.

 On
December 30, 2024, the Company issued 636,400 shares of common stock to various investors pursuant to Securities Purchase Agreement at
a price of $0.55 per share for aggregate gross proceeds of $350,020.

 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, 865,070 shares of the Company were purchased at
a cost average of $1.7 per share in accordance with Rule 10b-18. During the year ended December 31, 2024, 190,628 shares of the Company
were purchased at a cost average of $2.9 per share in accordance with Rule 10b-18.

 Period (In millions, except share and per share data)

 Total
 number
 of shares
 purchased (1)

 Average
 price paid
 per share (2)

 September 8 – December 19, 2023

 865,070

 $
 1.7

 January 4 – January 5, 2024

 190,628

 2.9

 Total

 1,055,698

 $
 1.9

 (1)

 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 865,070 shares of the Company's common stock at an average price of $1.7 per share for a total purchase price of
 $1,440,852. In January 2024, the Company purchased a total of 190,628 shares of the Company's common stock at an
 average price of $2.9 per share.

 (2)

 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. Additionally, we are
in the process of establishing an exclusive wine club. 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.

 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. As of December 31, 2024, the Company has recorded an impairment based on its evaluation of the investee. Refer
to the consolidated financial statements for further disclosure.

 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,  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 Years Ended December 31, 2024 and 2023

 The
following table sets forth key components of our results of operations during the years ended December 31, 2024 and 2023.

 Year Ended December 31,

 2024

 2023

 Var. $

 Var. %

 Revenue - services

 $
 117,965

 $
 474,048

 $
 (356,083
)

 -75
 %

 Revenue - product

 2,383,695

 646,574

 1,737,121

 %

 Total revenues

 2,501,660

 1,120,622

 1,381,038

 %

 Cost of revenue - services

 178,851

 351,823

 (172,972
)

 -49
 %

 Cost of revenue - product

 2,635,984

 563,775

 2,072,209

 %

 Total cost of revenue

 2,814,835

 915,598

 1,899,237

 %

 Gross profit (loss)

 (313,175
)

 205,024

 (518,199
)

 -253
 %

 Operating expenses:

 General and administrative

 14,556,220

 11,426,747

 3,129,473

 %

 Sales and marketing

 3,617,924

 2,480,001

 1,137,923

 %

 Impairment of intangible asset

 -

 1,875,000

 (1,875,000
)

 -100
 %

 Total operating expenses

 18,174,144

 15,781,748

 2,392,396

 %

 Loss from operations

 (18,487,319
)

 (15,576,724
)

 (2,910,595
)

 %

 Other income (expense):

 Interest expense

 -

 (171,000
)

 171,000

 -100
 %

 Impairment of investment

 (4,500,000
)

 -

 (4,500,000
)

 %

 Other income

 227,467

 -

 227,467

 %

 Realized gain/(loss) on securities

 5,674

 -

 5,674

 %

 Total other income

 (4,266,859
)

 (171,000
)

 4,095,859

 2,395
 %

 Provision for income taxes

 -

 -

 -

 $
 (22,754,178
)

 $
 (15,747,724
)

 $
 (7,006,454
)

 %

 Revenue

 For
the years ended December 31, 2024 and 2023, service revenues were $117,965 and $474,048, respectively. Service revenues are earned
as we contract with third-party alcoholic beverage brands to utilize access to the CWS Platform, as well as vault memberships. Service
revenues decreased by $356,083 as more focus was emphasized on the CWS Platform.

 For
the year ended December 31, 2024, product revenues were $2,383,695 compared to $646,574 in the similar 2023. The increase of $1,737,121
in revenues is due to product sales via the CWS Platform after the acquisition in November 2023.

 Cost
of Revenue and Gross Profit (Loss)

 For
the years ended December 31, 2024 and 2023, service cost of revenues was $178,851 and $351,823, respectively. Cost of revenues decreased
by $172,972 in 2024 due to decrease in service revenue. In 2023, cost of revenues included amortization of the marketing license, which
was impaired as of December 31, 2023.

 Product
cost of revenues was $2,635,984 and $563,775 in the years ended December 31, 2024 and 2023, respectively. The increase was due to product
and shipping costs associated with the product sales via the CWS Platform, which was acquired in November 2023.

 Gross
profit (loss) was ($313,175) and $205,024 for the years ended December 31, 2024 and 2023. The Company has incurred gross losses in 2024
as it transitions its strategies from marketing to the CWS Platform. Management is exploring various strategies, including customer acquisition
and new partnerships, to increase volume in order to achieve better gross margins in 2025.

 General
and Administrative

 For the years ended December 31, 2024
and 2023, general and administrative expenses were $14,556,220 and $11,426,747, respectively. General and administrative expenses
increased by $3,129,473 in 2024 as compared to 2023. In 2024, the Company recorded $2,533,256 in non-cash stock-based compensation
expense pertaining to the issuance of restricted stock units as compared to $1,091,648 recorded in 2023. General and administrative
expenses also increased due to personnel costs as the Company entered into several settlement, bonus and retention agreements
totaling $8,021,000 in late 2024 most of which were paid to insiders and related parties of the Company.

 Bonus
and retention agreements reflect strategic decisions made by the Company to retain key talent and incentivize critical personnel.
These bonus and retention agreements were based on strategic decisions made by the Company to retain key talent and incentivize critical
personnel. These were designed to ensure continuity in leadership and support the Company's long-term goals, even though the Company
is not currently profitable.

 Sales
and Marketing

 For the years ended December 31, 2024 and 2023, sales and marketing
expenses were $3,617,924 and $2,480,001, respectively. The increase of $1,137,923 was primarily due to advertising and marketing and investor
relation campaigns the Company entered into in late 2023, which extended throughout 2024. Lastly, The Company determined it was no longer
pursuing the website development services as per its October 2023 agreement with X-Media. As such, the full amount of the prepaid was
written of during the year, representing an expense of $2,150,000. The amount was included in sales and marketing expenses in the consolidated
statements of operations.

 Impairments

 For the year ended December 31, 2024, the Company
recognized an impairment expense $4,500,000 related to its investment in DRNK Beverage Corp, which was included in other income (expense)
in the consolidated statements of operations. The impairment was triggered by a significant decline in the fair value of the Company's
investment upon management's review and monitoring of the investee.

 Upon
the acquisition of the CWS Platform, the Company determined that the license under the CWS Agreement was no longer applicable as the
Company now maintained ownership over the Platform and the relevant marketing efforts. As such, during the year ended December 31, 2023,
the Company recorded an impairment of the remaining carrying value of $1,875,000.

 Net
Loss

 Net loss for the years ended December 31, 2024 and 2023 was $22,754,178
and $15,747,724, respectively.

 Liquidity
and Capital Resources

 As
of December 31, 2024 and 2023, we had cash and cash equivalents of $5,386,789 and $7,064,348, respectively. To date, we have financed
our operations primarily through issuances of common stock and sales of our products and services.

 During the year ended December 31, 2024, the
Company issued an aggregate of 1,518,188 shares of common stock pursuant to at-the-market offering agreement, dated
September 13, 2024, between the Company and H.C. Wainwright & Co., LLC, for net proceeds of $1,599,814. The Company paid to H.C.
Wainwright & Co., LLC, as the sales agent a compensation with respect to sale of such shares in the amount of $48,018. In 2025,
the Company has issued 13,816,082 shares of common stock pursuant to its ATM Agreement for net proceeds of $5,014,022.

 The accompanying financial statements have been
prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course
of business. The Company has not generated profits since inception, has sustained net losses of $22,754,178 and $15,747,724 for the years
ended December 31, 2024 and 2023, and has negative cash flows from operations $6,618,417 and $9,113,855 for the years ended December 31,
2024 and 2023 respectively. The Company requires additional capital to operate and expects losses to continue for the foreseeable future.
These factors raise substantial doubts about the Company's ability to continue as a going concern.

 The
Company's ability to continue as a going concern until it reaches profitability is dependent upon its ability to generate cash
from operating activities and to raise additional capital to fund operations. Management is exploring various strategies, including customer
acquisition and new partnerships, to increase volume in order to achieve better gross margins and profitability. The Company continues
to seek investment and acquisition opportunities which will help achieve its strategies.

 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
to fund operations through debt and/or equity financings. Our failure to raise additional capital could have a negative impact on not
only our financial condition but also our ability to execute our business plan. No assurance can be given that the Company will be successful
in these efforts.

 Cash
Flow Activities

 The
following table presents selected captions from our condensed statement of cash flows for the years ended December 31, 2024 and 2023:

 2024

 2023

 Net
 cash used in operating activities

 $
 (6,618,417
)

 $
 (9,113,855
)

 Net
 cash provided by (used in) investing activities

 $
 675,674

 $
 (5,342,574
)

 Net
 cash provided by financing activities

 $
 4,265,184

 $
 21,513,212

 Net
 change in cash and cash equivalents

 $
 (1,677,559
)

 $
 7,056,783

 Net
Cash Used in Operating Activities

 Net cash used in operating activities for the
year ended December 31, 2024 was $6,618,417, primarily due to our net loss of $22,754,178, partially offset by non-cash charges
of $7,204,922 and $8,930,839 in cash provided by operating assets and liabilities.

 Net
cash used in operating activities for the year ended December 31, 2023 was $9,113,855, primarily due to our net loss of $15,747,724,
partially offset by non-cash charges of $8,727,481 and $2,093,612 in cash used in operating assets and liabilities.

 Net
Cash Provided by (Used In) Investing Activities

 Net
cash provided by (used in) investing activities for the years ended December 31, 2024 and 2023 were 675,674 and ($5,342,574), respectively.
In 2024, the Company purchased marketable securities of $7,758,523, and sold securities of $7,764,197. The Company also received $670,000 back
from an investment it was no longer pursuing.

 In
2023, the Company had repayments from CWS of $137,426, and deposits in escrow of $5,470,000 and acquisition of CWS Platform of $10,000
in 2023.

 Net
Cash Provided by Financing Activities

 Net cash provided by financing activities for the years ended December
31, 2024 and 2023 was $4,265,184 and $21,513,212, respectively. In 2024, the Company received $3,350,020 in proceeds from private placement
offerings, $1,543,079 in net proceeds pursuant to public offerings, incurred $80,500 in offering cost. The Company paid $547,415 for repurchase
of shares.

 In
2023, the Company received $955,000 in proceeds from the private placement offering, $950,000 from notes, $4,507,228 in net proceeds
pursuant to the IPO and $16,619,836 in net proceeds from the October and November offerings. The Company paid $1,458,852 for the repurchase
of shares, and $60,000 for the cancellation of warrants.

 Contractual
Obligations

 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 4.
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.

 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, 2024, $3,600,000 remained unpaid and was
included as accrued expenses on the consolidated balance sheet. Of this amount, $1,800,000 was paid in 2025 and $1,800,000 remained unpaid
as of issuance date of these consolidated financial statements.

 The Company no longer maintains its funding commitment
pursuant to the October 2024 settlement agreement.

 Related
Party Transactions

 See
Note 9 to the accompanying consolidated financial statements for further disclosure.

 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.

 Critical
Accounting Policies and Significant Judgements and Estimates

 This
discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared
in accordance with generally accepted accounting principles in the United States ("GAAP"). The preparation of these
financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during
the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable
under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in more detail in the notes to our financial statements included elsewhere in
this report, we believe that the following accounting policies are critical to understanding our historical and future performance, as
these policies relate to the more significant areas involving management's judgments and estimates. We believe our most critical
accounting policies and estimates relate to the following:

 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 our 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.

 Service
revenue is recognized over a period time, as the marketing services are being continually provided on a daily and monthly basis over
the life of an agreed upon campaign. Product revenue is recognized at the point in the products are delivered, when the Company has fulfilled
its performance obligation.

 Related
Parties

 Related
parties are any entities or individuals that, through employment, ownership, or other means, possess the ability to direct or cause the
direction of the management and policies of the Company. We disclose related party transactions that are outside of normal compensatory
agreements, such as salaries. We follow ASC 850, Related Party Disclosures, for the identification of related parties
and disclosure of related party transactions.

 Acquisitions,
Goodwill and Other Intangible Assets

 The
Company allocates the cost of an acquired business to the assets acquired and liabilities assumed based on their estimated fair values
at the date of acquisition. The excess value of the cost of an acquired business over the estimated fair value of the assets acquired
and liabilities assumed is recognized as goodwill. The Company uses a variety of information sources to determine the value of acquired
assets and liabilities, including: identifiable intangibles.

 Goodwill
and indefinite-lived intangibles are not amortized but are instead evaluated annually for impairment as part of the Company's annual
financial review, or when indicators of a potential impairment are present. The annual test for impairment performed for goodwill can
be qualitative or quantitative, taking into consideration certain factors surrounding the fair value of the goodwill including, level
by which fair value exceeded carrying value in the prior valuation, as well as macroeconomic factors, industry conditions and actual
results at the test date.

 Investments, at Cost

 In accordance with FASB ASC Subtopic 321, Investments
– Others – Cost Method Investments, investments where the Company does not have a significant influence are accounted
for at cost. The Company reviews all material investments on an annual basis to determine whether a significant event or change in circumstances
has occurred that may have an adverse effect on the fair value of the investment. In the event the fair value of the investment declines
below the cost basis, the Company records an impairment.

 As of December 31, 2024, the Company recognized
an impairment expense of $4,500,000 related to its investment in DRNK Beverage Corp, which was recorded within other income (expense)
in the consolidated statements of operations. This impairment was triggered by company specific information and progress of the investee
against expectations. The impairment also reflects the ongoing challenges in the marketplace and the reduced prospects for recovery
of the carrying value of the investment. The Company continues to monitor the situation and will assess the need for any further adjustments
in future periods.

 Stock-Based Compensation

 Stock-based
compensation is accounted for in accordance with ASC Topic 718-10, Compensation-Stock Compensation ("ASC 718-10").
The Company measures all equity-based awards granted to employees, independent contractors and advisors based on the fair value
on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the
vesting period of the respective award.

 We
classify stock-based compensation expense in its statement of operations in the same manner in which the award recipient's
payroll costs are classified or in which the award recipient's service payments are classified.

 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-22, 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, 2024, 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, 2024. 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. 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.

 Our size has prevented us from being able to employ
sufficient resources to enable us to have an adequate level of supervision and segregation of duties. Therefore, it is difficult to effectively
segregate accounting duties which comprises a material weakness in internal controls. 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 controls over our Exchange Act reporting disclosures.

 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, 2024, that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

 ITEM
9B. OTHER INFORMATION

 Not
applicable.

 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 March 31, 2025:

 Name

 Age

 Position

 Sean
 Dollinger

 Chief
 Executive Officer and Director

 Kumar
 Abhishek

 Chief
 Financial Officer

 Jaclyn
 Hoffman

 Chief
 Marketing Officer

 Alexandra
 Hoffman

 and Technical Writer

 David
 Lazar

 President
 and Director

 James
 O'Brien

 Yilin
 Lu

 Hong
 Chun Yeung

 Lijun
 Chen

 Director, Chairman of the Board

 Jing
 Lu

 Sean Dollinger has
served as our Chief Executive Officer and as a member of our Board 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 a member of our Board since April 2023. From January 2021 to May 2023 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.

 David E. Lazar was
appointed to serve as a member of our Board and the President of the Company in October 2024. Mr. Lazar has served as the Chief
Executive Officer of Titan Pharmaceuticals Inc. listed on the Nasdaq (TTNP) since August 2022, where he also served as a
director and board chairman from August 2022 until October 2023. On December 28, 2023, Mr. Lazar was appointed
Chief Executive Officer and to the board of directors of Minim, Inc. (NASDAQ: MINM). Mr. Lazar has successfully served as a
custodian to numerous public companies across a wide range of industries, including without limitation, C2E Energy, Inc. (OTCMKTS:
OOGI), China Botanic Pharmaceutical Inc. (OTCMKTS: CBPI), One 4 Art Ltd., Romulus Corp., Moveix, Inc., Arax Holdings Corp. (OTCMKTS:
ARAT), ESP Resources, Inc. (OTCMKTS: ESPIQ), Adorbs, Inc., Exobox Technologies Corp. (OTCMKTS: EXBX), Petrone Worldwide, Inc.
(OTCMKTS: PFWIQ), Superbox, Inc. (OTCMKTS: SBOX), Sino Green Land Corp. (OTCMKTS: SGLA), SIPP International Industries, Inc.
(OTCMKTS: SIPN), Cereplast, Inc. (OTCMKTS: CERPQ), Energy 1 Corp. (OTCMKTS: EGOC), ForU Holdings, Inc. (OTCMKTS: FORU), China
Yanyuan Yuhui National Education Group, Inc. (OTCMKTS: YYYH), Pan Global Corp. (OTCMKTS: PGLO), Shengtang International, Inc.
(OTCMKTS: SHNL), Alternaturals, Inc. (OTCMKTS: ANAS), USA Recycling Industries, Inc. (OTCMKTS: USRI), Tele Group Corp., Xenoics
Holdings, Inc. (OTCMKTS: XNNHQ), Richland Resources International Group, Inc. (OTCMKTS: RIGG), AI Technology Group, Inc., Reliance
Global Group, Inc. (NASDAQ: RELI), Melt, Inc., Ketdarina Corp., 3D MarkerJet, Inc. (OTCMKTS: MRJT), Lvpai Group Ltd., Gushen, Inc.,
FHT Future Technology Ltd., Inspired Builders, Inc., Houmu Holdings Ltd. (OTCMKTS: HOMU), Born, Inc. (OTCMKTS: BRRN), Changsheng
International Group Ltd., Sollensys Corp. (OTCMKTS: SOLS), Guozi Zhongyu Capital Holdings Co. (OTCMKTS: GZCC) and Cang Bao Tian Xia
International Art Trade Center, Inc. Mr. Lazar also served as the Interim CEO of Cyclacel Pharmaceuticals, Inc.
(Nasdaq: CYCC) from January – March 2025. From 2017 Mr. Lazar serves as the CEO of Custodian Ventures LLC, a company focused on
buying and reselling public companies via court ordered custodianships. We believe that Mr. Lazar is qualified to serve on our
Board due to his extensive experience serving on the boards of other public companies.

 James O'Brien was appointed
to serve as a member of our Board of Directors in August 2023. Mr. O'Brien is a Founder of Oakridge Law Professional Corporation
("Oakridge"), a boutique law firm based in Toronto, Ontario that specializes in M&A and Securities. Oakridge will officially
open its doors January 6, 2025. Since October of 2024, Mr. O'Brien has operated Blackthorn Law Corporation, also specializing in M&A
and Securities. From January 2019 to December 2023, Mr. O'Brien has been a partner at MLT Aikins LLP, one of Western Canada's
leading law firms, where he practices primarily in the areas of corporate and commercial law with a specific focus on mergers and acquisitions
and corporate finance and securities. Before that, he joined MLT Aikins LLP as an associate attorney in 2012. Mr. O'Brien received
his Bachelor of Laws degree from the University of Manitoba in 2010. He also received his Bachelor of Science degree from the University
of Manitoba in 2007. Mr. O'Brien is admitted to practice law in Manitoba, Canada and has passed Levels 1 and 2 of the Chartered
Financial Analyst programs. We believe that Mr. O'Brien is qualified to serve on our Board due to the combination of his extensive
legal and finance background.

 Yilin Lu has served as the
member of our Board of Directors since December 2024. Since June 2023, Mr. Lu has 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 offer 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.

 Jing
Lu has served as a member of our Board of Directors since December 2024. From April 2023, Dr. Lu serves as Chief
Financial Officer of Bowen Acquisition Corporation, a Nasdaq-listed SPAC company. From August 2024, Dr. Lu also serves as an
independent director of Autozi Internet Technology (Global) Ltd, auto-parts e-commerce company listed on Nasdaq. From February 2021
to April 2024, she served as Chief Financial Officer of Keyarch Acquisition Corporation, also a Nasdaq-listed SPAC company, which
went successfully from independent IPO in 2022 to De-SPAC IPO in 2024. Before that, from September 2019 to February 2021, Dr. Lu
served as Chief Investment Officer of the New Hope Fertility Center in New York, sourcing and managing PE investments, bank loans
and government PPP loans. Dr. Lu also served as a Managing Director and then Chief Operating Officer of China Bridge Capital
International Inc., a PE/VC investment advisory company specialized in innovative technologies from 2017 to 2019 and from March 2021
to January 2022. Prior to that, Dr. Lu was President of ACE AV Consulting Inc. from 2005 to 2017. Dr. Lu was an Executive Director
at CIBC World Markets in 2001 working on corporate securities. Between 1998 and 2001, Dr. Lu worked at the Federal Reserve Bank of
New York as a bank regulator and supervisor. Before moving to New York, Dr. Lu was a professor of economics at York University in
Canada for four years, specializing her teaching and research in Macroeconomics, Institutional Economics, and Econometrics. Dr. Lu
received a Ph. D. and M.A. in Economics from Western University in Canada, a Graduate Certificate in Economics from the
People's University in China, and a B.A in World Economy from Fudan University in China. We believe that Dr. Lu is qualified
to serve on our Board of Directors due to her extensive experience in the financial service industry.

 Family
Relationships

 Alexandra Hoffman, a member of our Board of Directors
and a Technical Writer for 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 eight (8) directors,
five (5) of whom are independent within the meaning of Nasdaq's rules. Sean Dollinger, David Lazar, and Alexandra Hoffman are
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.

 Audit
Committee

 James O'Brien, Jing Lu 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 James O'Brien serving as the chairman. Our Board has determined that James O'Brien 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.

Committee

 James O'Brien, and Jing Lu, 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 James O'Brien 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.

 Nominating
and Corporate Governance Committee

 James O'Brien, Lijun Chen, and Jing Lu, each of whom satisfies
the "independence" requirements of Nasdaq's rules, serve on our nominating and corporate governance committee, with
Jing Lu, 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, 2025:

 (i)
 Ms. Alexandra Hoffman filed her form 4 regarding four (4) transactions
as of November 26, 2024, late in 2024.

 ITEM
11. EXECUTIVE COMPENSATION

 Summary
Compensation Table

 The following summary compensation table provides information 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, 2024
and December 31, 2023 to our Chief Executive Officer (principal executive officer), our Chief Financial Officer, and our Chief Marketing
Officer. We refer to these individuals as our "named executive officers" ("NEO").

 Name and Principal Position

 Year

 Salary
 ($)

 Bonus
 ($)

 Stock
 Awards
 ($)

 Option
 Awards
 ($)

 All Other
 ($)

 Total
 ($)

 Sean Dollinger,

 2024

 586,700

 200,000

 -

 -

 850,000
 (1)

 1,636,700

 Chief Executive Officer

 2023

 337,572

 100,000

 5,000,100
 (3)

 -

 -

 5,437,672

 Kumar Abhishek,

 2024

 73,271

 -

 -

 -

 550,000
 (2)

 623,271

 Chief Financial Officer

 2023

 88,600

 25,000

 -

 -

 113,600

 Jaclyn Hoffman,

 2024

 99,600

 -

 -

 -

 285,000
 (4)

 384,600

 Chief Marketing Officer

 2023

 64,100

 -

 -

 -

 64,100

 (1)
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 remained unpaid and has been paid in January 2025.

 (2)

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.

 (3)
 Represents
 the grant-date fair value of 25,000 restricted stock units issued to Mr. Dollinger in 2023.

 (4)
 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.

 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.

 Outstanding
Equity Awards at Fiscal Year-End

 As
of December 31, 2024, no NEO holds any options, however, Sean Dollinger, our CEO, has 25,000 restricted stock units ("RSU"),
have a grant-date fair value of $5,000,100. No other 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.

 The following summary Board compensation table
provides information regarding the Board compensation paid during our fiscal year ended December 31, 2024 to our Board members. Only our
independent directors received compensation for being directors during fiscal year 2024.

 Cash

 Equity

 Total

 James O'Brien

 $
 80,000

 $
 -

 $
 80,000

 James Huber

 60,000

 -

 60,000

 Jay Dhaliwal

 54,000

 -

 54,000

 Gary Herman

 39,000

 -

 39,000

 Yilin Lu (1)

 -

 Hong Chun Yeung (1)

 -

 Lijun Chen (1)

 -

 Jing Lu (1)

 -

 $
 233,000

 $
 318,000

 $
 551,000

 (1)
 In
December 2024 Yilin Lu, Hong Chun Yeung, 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 50,000 RSUs vesting in eight (8) equal quarterly installments commencing in the first quarter of 2025. Equity
compensation has a grant-date fair value of $79,500.

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

 The following table sets forth certain information,
as of March 28, 2025 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 28, 2025 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 36,400,709 shares of common stock outstanding as of March 28, 2025.

 Name and Address of Beneficial Owner (1)

 Title

 Number (2)

 Percent

 Officers and Directors

 Sean Dollinger (3)

 Chief Executive Officer and Director

 95,993

 *
 %

 Kumar Abhishek

 Chief Financial Officer

 *
 %

 Jaclyn Hoffman

 Chief Marketing Officer

 1,460

 *
 %

 Alexandra Hoffman

 Director and Technical Writer

 *
 %

 James O'Brien (4)

 *
 %

 Yilin Lu (5)

 6,250

 %

 Hong Chun Yeung (6)

 6,250

 %

 Lijun Chen (7)

 6,250

 %

 Jing Lu (8)

 6,250

 %

 David Lazar

 -

 All Officers and Directors as a Group (total of 8 persons)

 124,640

 0.36
 %

 5% Beneficial Owners of a Class of Voting Stock

 *

 Less
 than 1%

 (1)

 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 36,400,709 shares of common stock outstanding as of March 28, 2025.

 (3)

 Consists of (i) 15,625 shares of common stock issued upon vesting of RSUs granted to Mr. Dollinger under the 2021 Plan and (ii) 3,125 RSUs scheduled to vest and convert into shares of common stock of the Company within 60 days of March 31, 2025.

 (4)

 Consists of (i) 780 shares of common stock issued upon vesting of RSUs
granted to Mr. O'Brien under the 2021 Plan and (ii) 156 RSUs scheduled to vest and convert into shares of common stock of the Company
within 60 days of March 31, 2025.

 (5)

 Consists of 6,250 RSUs, scheduled to vest and convert into shares of common stock of the Company within 60 days of March 31, 2025, 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 50,000 RSUs vesting in eight (8) equal quarterly installments commencing in first quarter of 2025.

 (6)

 Consists of 6,250 RSUs, scheduled to vest and convert into shares of common stock of the Company within 60 days of March 31, 2025, 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 50,000 RSUs vesting in eight (8) equal quarterly installments commencing in first quarter of 2025.

 (7)

 Consists of 6,250 RSUs, scheduled to vest and convert into shares of common stock of the Company within 60 days of March 31, 2025, 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 50,000 RSUs vesting in eight (8) equal quarterly installments commencing in first quarter of 2025.

 (8)

 Consists of 6,250 RSUs, scheduled to vest and convert into shares of common stock of the Company within 60 days of March 31, 2025, in accordance with the terms of independent director agreement signed by the Company and the director on December 19, 2024.Pursuant to the agreement Dr. Jing Lu is entitled to receive equity compensation in form of 50,000 RSUs vesting in eight 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 Ms. Alexandra Hoffman, our director, 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 President and Director, pursuant to which he acquired 1,101,818 shares of common stock (which represented approximately 19.99% of our outstanding stock on October 15, 2024) at a price of $0.55 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 Yilin Lu, Hong Chun Yeung, James O'Brian, Lijun Chen, and Ling Lu, 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

 dbb mckennon
 served as our independent registered public accounting firm to audit our books and accounts for the fiscal years ended December 31,
2024 and 2023. The table below presents the aggregate fees billed for professional services rendered by dbb mckennon for fiscal
years 2024 and 2023.

 2024

 2023

 Audit fees

 $
 167,247

 $
 233,473

 Audit-related fees

 Tax fee

 All other fees

 Total fees

 $
 167,247

 $
 233,473

 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

 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).

 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).

 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).

 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).

 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).

 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)

 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)

 3.7

 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).

 3.8

 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)

 4.1

 Description of Registrant's securities

 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)

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 10.17

 Amendment No. 2 to the LQR House Inc. 2021 Stock Option and Incentive Plan

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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).

 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)

 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)

 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)

 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)

 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)

 10.39

 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).

 10.40

 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)

 10.41

 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)

 10.42

 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)

 10.49

 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)

 10.43

 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)

 10.44

 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)

 10.45

 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)

 10.46

 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)

 10.47

 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)

 10.48

 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)

 10.49

 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)

 10.50

 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)

 10.51

 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)

 10.52

 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)

 10.53

 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)

 10.54

 Supplier Agreement between the Company and Of The Earth Distribution Corp., dated June 28, 2024.

 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).

 19.1

 LQR House Inc. Insider Trading Policy, dated March 28, 2024 (incorporated by reference to Exhibit 19.1 of the Company's Annual Report on Form 10-K filed with the SEC on April 1, 2024)

 21.1

 List of subsidiaries (incorporated by reference to Exhibit 21.1 of the Company's Quarterly Report on Form 10-Q filed with the SEC on November 14, 2024).

 23.1

 Consent of dbbmckennon

 31.1

 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act

 31.2

 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act

 32.1#

 Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act

 32.2#

 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

 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).

 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).

 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).

 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)

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 Executive compensation plan or arrangement.

 #

 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.

 LQR
 HOUSE INC.

 Dated:

 By:

 /s/
 Sean 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.

 Signatures

 Title

 Date

 /s/
 Sean Dollinger

 Chief
 Executive Officer

 March

 Sean
 Dollinger

 (Principal
 Executive Officer)

 /s/
 Kumar Abhishek

 Chief
 Financial Officer

 March

 Kumar
 Abhishek

 (Principal
 Financial and Accounting Officer)

 /s/
 Alexandra Hoffman

 March

 Alexandra
 Hoffman

 /s/
Yilin Lu

 March

 Yilin
Lu

 /s/
 Hong Chun Yeung

 March

 Hong
Chun Yeung

 /s/
 James O'Brien

 March

 James
 O'Brien

 /s/
 Lijun Chen

 Lijun Chen

 /s/ Jing Lu

 Jing Lu

 /s/ David Lazar

 David Lazar

 LQR HOUSE, INC.

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 DECEMBER 31, 2024 AND 2023

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID # 3501)

 CONSOLIDATED BALANCE SHEETS

 CONSOLIDATED STATEMENTS OF OPERATIONS

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY ( DEFICIT)

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 The Board of Directors and Stockholders

 Opinion on the Financial Statements

 We have audited the
accompanying consolidated balance sheets of LQR House, Inc., and subsidiary (the "Company") as of December 31, 2024 and
2023, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years
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 2023, and the results of its operations and its cash flows for the years 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 Notes 7 and
9 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 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 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 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 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 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/ dbb mckennon

 We have served as the Company's auditor since 2021

 Newport Beach, California

 F- 2

 PART I – FINANCIAL INFORMATION

 ITEM 1 – FINANCIAL STATEMENTS

 Consolidated Balance Sheets

 2024

 2023

 ASSETS

 Current assets:

 Cash and cash equivalents

 $
 5,386,789

 $
 7,064,348

 Accounts receivable

 28,040

 -

 Accounts receivable, related party

 149,510

 172,493

 Advances to related party

 -

 177,340

 Deposits in escrow

 -

 5,470,000

 Prepaid expenses

 240,729

 2,189,955

 Total current assets

 5,805,068

 15,074,136

 Investments, at cost

 1,117,500

 -

 Intangible assets, net

 10,000

 10,000

 Right of use asset

 -

 8,402

 Total assets

 $
 6,932,568

 $
 15,092,538

 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

 Current liabilities:

 Accounts payable

 $
 530,643

 $
 265,229

 Accounts payable, related party

 21,175

 58,589

 Accrued expenses

 927,711

 138,585

 Accrued expenses, related party

 -

 Right of use liability, current portion

 -

 7,324

 Total current liabilities

 7,450,529

 469,727

 Right of use liability

 -

 2,534

 Total liabilities

 7,450,529

 472,261

 Commitments and contingencies (Note 11)

 Stockholders' equity (deficit):

 Common stock, $ 0.0001 par value, 350,000,000 shares authorized, 15,252,580 and 15,061,952 shares issued and outstanding as of December 31, 2024 and 4,829,438 shares issued and outstanding as of December 31, 2023, respectively

 1,525

 Additional paid-in capital

 42,334,732

 34,172,420

 Treasury stock, at cost ( 190,628 shares)

)

 -

 Accumulated deficit

 ( 42,306,803
)

 ( 19,552,625
)

 Total stockholders' equity (deficit)

 ( 517,961
)

 14,620,277

 Total liabilities and stockholders'
 equity (deficit)

 $
 6,932,568

 $
 15,092,538

 See the accompanying notes to the audited financial
statements.

 F- 3

 Consolidated Statements of Operations

 2024

 2023

 Revenue - services

 $
 117,965

 $
 474,048

 Revenue - product

 2,383,695

 646,574

 Total revenues

 2,501,660

 1,120,622

 Cost of revenue - services

 178,851

 351,823

 Cost of revenue - product

 2,635,984

 563,775

 Total cost of revenue

 2,814,835

 915,598

 Gross profit (loss)

 ( 313,175
)

 205,024

 Operating expenses:

 General and administrative

 14,556,220

 11,426,747

 Sales and marketing

 3,617,924

 2,480,001

 Impairment of intangible asset

 -

 1,875,000

 Total operating expenses

 18,174,144

 15,781,748

 Loss from operations

 ( 18,487,319
)

 ( 15,576,724
)

 Other income (expense):

 Interest expense

 -

 ( 171,000
)

 Impairment of investment

 ( 4,500,000

)

 -

 Other income

 227,467

 -

 Gain on sale of marketable securities

 5,674

 -

 Total other income (expense)

 ( 4,266,859
)

 ( 171,000
)

 Provision for income taxes

 -

 -

 $
 ( 22,754,178
)

 $
 ( 15,747,724
)

 Weighted average common shares outstanding - basic and diluted

 5,517,945

 925,607

 Net loss per common share - basic and diluted

 $
 4.12

 $
 ( 17.01
)

 See the accompanying notes to the audited financial
statements.

 F- 4

 CONSOLIDATED
STATEMENTS STOCKHOLDERS' EQUITY (DEFICIT)

 Common Stock

 Treasury Stock

 Additional

Paid-In

 Accumulated

 Total

Shareholder's

Equity

 Shares

 Amount

 Shares

 Amount

 Capital

 Deficit

 (Deficit)

 Balances at December 31, 2022

 230,011

 -

 $
 -

 $
 5,844,519

 $
 ( 3,804,901
)

 $
 2,039,641

 Issuance of common stock pursuant to private placement

 23,875

 -

 -

 954,998

 -

 955,000

 Issuance of common stock for services

 137,500

 -

 -

 5,552,486

 -

 5,552,500

 Repurchase of shares

 ( 75,000
)

 ( 8
)

 -

 -

 ( 17,992
)

 -

 ( 18,000
)

 Issuance of common stock pursuant to IPO

 28,750

 -

 -

 5,749,997

 -

 5,750,000

 Conversion of note payable into common stock

 63,766

 -

 -

 1,120,994

 -

 1,121,000

 Issuance of common stock pursuant to public offerings

 5,228,384

 -

 -

 18,049,477

 -

 18,050,000

 Effect of stock split

 57,222

 -

 -

 ( 6
)

 -

 -

 Vesting of restricted stock units

 -

 -

 -

 -

 1,091,648

 -

 1,091,648

 Offering costs

 -

 -

 -

 -

 ( 2,672,936
)

 -

 ( 2,672,936
)

 Cancellation of warrants

 -

 -

 -

 -

 ( 60,000
)

 -

 ( 60,000
)

 Repurchase of common stock

 -

 -

 ( 865,070
)

 ( 1,440,852
)

 -

 -

 ( 1,440,852
)

 Retirement of shares

 ( 865,070
)

 ( 87
)

 865,070

 1,440,852

 ( 1,440,765
)

 -

 -

 -

 -

 -

 ( 15,747,724
)

 ( 15,747,724
)

 Balances at December 31, 2023

 4,829,438

 $

 -

 $
 -

 $
 34,172,420

 $
 ( 19,552,625
)

 $
 14,620,277

 Vesting of restricted stock units

 16,405

 -

 -

 2,533,254

 -

 2,533,256

 Repurchase of common stock

 -

 -

 ( 190,628
)

)

 -

 -

)

 Corrective issuance from stock dividend

 2,417

 -

 -

 -

 -

 -

 -

 Common stock issued for investment

 750,000

 -

 -

 817,425

 -

 817,500

 Issuance of common stock pursuant to public offerings

 1,485,575

 -

 -

 1,542,930

 -

 1,543,079

 Issuance of common stock pursuant to private placement

 6,090,945

 -

 -

 3,349,411

 -

 3,350,020

 Exercise of warrants

 2,077,800

 -

 -

 ( 208
)

 -

 -

 Offering costs

 -

 -

 -

 -

 ( 80,500
)

 -

 ( 80,500
)

 -

 -

 -

 -

 -

 ( 22,754,178
)

 ( 22,754,178
)

 Balances at December 31, 2024

 15,252,580

 $
 1,525

 ( 190,628
)

 $
)

 $
 42,334,732

 $
 ( 42,306,803
)

 $
 ( 517,961
)

 See the accompanying notes to the audited financial
statements.

 F- 5

 CONOLIDATED
STATEMENTS OF CASH FLOWS

 2024

 2023

 Cash flows from operating activities:

 $
 ( 22,754,178
)

 $
 ( 15,747,724
)

 Adjustments to reconcile net loss to net cash used in operating activities:

 Write off of advances to related party

 177,340

 -

 Amortization

 -

 208,333

 Impairment of investment

 4,500,000

 -

 Impairment of intangible asset

 -

 1,875,000

 Vesting of restricted stock units

 2,533,256

 1,091,648

 Gain on sale of marketable securities

 ( 5,674
)

 -

 Issuance of common stock for services

 -

 5,552,500

 Changes in operating assets and liabilities:

 Accounts receivable

 ( 28,040
)

 -

 Accounts receivable, related party

 22,983

 52,199

 Prepaid expenses

 1,949,226

 ( 2,189,955
)

 Accounts payable

 265,414

 ( 22,228
)

 Accounts payable, related party

 ( 37,414
)

 ( 45,413
)

 Accrued expenses

 789,126

 110,329

 Accrued expenses, related party

 -

 Right of use liability, net

 ( 1,456
)

 1,456

 Net cash used in operating activities

 ( 6,618,417
)

 ( 9,113,855
)

 Cash flows from investing activities:

 Purchases of marketable securities

 ( 7,758,523
)

 -

 Sales of marketable securities

 7,764,197

 -

 Acquisition of CWS Platform

 -

 ( 10,000
)

 Net repayments from related party

 -

 137,426

 Deposits in escrow

 -

 ( 5,470,000
)

 Return of deposits in escrow

 670,000

 -

 Net cash provided by (used in) investing activities

 675,674

 ( 5,342,574
)

 Cash flows from financing activities:

 Proceeds from note payable

 -

 950,000

 Issuance of common stock and pursuant to private placement

 3,350,020

 955,000

 Issuance of common stock and pursuant to IPO, net of offering costs

 -

 4,507,228

 Issuance of common stock and pursuant to public offerings, net of offering costs

 1,543,079

 16,619,836

 Repurchase and buyback of common stock

)

 ( 1,458,852
)

 Cancellation of warrants

 -

 ( 60,000
)

 Offering costs

 ( 80,500
)

 -

 Net cash provided by financing activities

 4,265,184

 21,513,212

 Net change in cash and cash equivalents

 ( 1,677,559
)

 7,056,783

 Cash and cash equivalents at beginning of year

 7,064,348

 7,565

 Cash and cash equivalents at end of year

 $
 5,386,789

 $
 7,064,348

 Supplemental disclosure of cash flow information:

 Cash paid for income taxes

 $
 -

 $
 -

 Cash paid for interest

 $
 -

 $
 -

 Supplemental disclosure of non-cash financing activities:

 Common stock issued for investment

 $
 817,500

 $
 -

 Reclassification of deposit in escrow to investment

 $
 4,800,000

 $
 -

 Conversion of note payable and accrued interest into common stock

 $
 -

 $
 1,121,000

 See the accompanying notes to the audited financial
statements.

 F- 6

 NOTES TO CONSOLDATED 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. The Company operates primarily
in the beverage alcohol industry, owning specialty brands, providing marketing and distribution services.

 Country Wine & Spirits
("CWS") Platform

 On November 1, 2023, LQR
House Acquisition Corp. (the "Buyer"), a subsidiary of the Company, and SSquared Spirits LLC (the "Seller") 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",
or "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. See Note 4.

 The Company's Chief
Executive Officer, Sean Dollinger, owns 50 % of the equity of the Seller, and the other 50 % is owned by a minority shareholder
of the Company, who is considered a related party. A Special Committee of the Company's Board of Directors consisting of all independent
directors approved the terms of the Agreement on November 1, 2023. See Note 8.

 Stock Dividend in the
Form of Stock Split

 In February 2024, the Board
of Directors declared a 50 % stock dividend for distribution to all of the Company's shareholders of record at the close of
business on February 12, 2024. On March 1, 2024, 1,609,817 shares were issued per the dividend. As a result of the stock dividend,
a 3:2 stock split was effected. Accordingly, all share and per share amounts for all periods presented in the accompanying financial
statements and notes thereto have been adjusted retroactively, where applicable, to reflect the stock split.

 2. GOING CONCERN

 The Company has evaluated
whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability
to continue as a going concern within one year after the date that the consolidated financial statements are issued.

 The accompanying
consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company sustained net losses of $ 22,754,178 and $ 15,747,724 during
the years ended December 31, 2024 and 2023, respectively, and had cash used in operations of $ 6,618,417 during the year ended
December 31, 2024. The Company requires additional capital to operate and expects losses to continue for the foreseeable future.
These factors raise substantial doubts about the Company's ability to continue as a going concern. See Note 12 for capital
raised subsequent to December 31, 2024.

 The Company's ability
to continue as a going concern until it reaches profitability is dependent upon its ability to generate cash from operating activities
and to raise additional capital to fund operations. Management plans to raise additional capital to fund operations through debt and/or
equity financings. Our failure to raise additional capital could have a negative impact on not only our financial condition but also our
ability to execute our business plan. No assurance can be given that the Company will be successful in these efforts. The unaudited condensed
consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company may
not be able to obtain financing on acceptable terms, or at all.

 F- 7

 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

 These consolidated financial
statements include the accounts of the Company and its wholly-owned subsidiary, LQR House Acquisition Corp. All inter-company transactions
and balances have been eliminated on consolidation.

 Use of Estimates

 The preparation of the Company's
financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the 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 cost method investments and stock-based compensation. The Company bases its estimates on historical
experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.
On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts and experience. Changes in estimates
are recorded in the period in which they become known. Actual results could differ 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

 The Company considers all
highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents.

 F- 8

 Marketable Securities

 The Company held investments
in mutual funds. The investments were classified as available-for-sale and are held at fair value. The investments have a readily determinable
fair value and as such, were recognized as Level 1 financial instruments.

 Investments, at Cost

 In accordance with FASB
ASC Subtopic 321, Investments – Others – Cost Method Investments, investments where the Company does not have a
significant influence are accounted for at cost. The Company reviews all material investments on an annual basis to determine
whether a significant event or change in circumstances has occurred that may have an adverse effect on the fair value of the
investment. In the event the fair value of the investment declines below the cost basis, the Company records an impairment.

 As of December 31, 2024, the Company recognized
an impairment expense of $ 4,500,000 related to its investment in DRNK Beverage Corp, which was recorded within other income (expense)
in the consolidated statements of operations. This impairment was triggered by company specific information and progress
of the investee against expectations. The impairment also reflects the ongoing challenges in the
marketplace and the reduced prospects for recovery of the carrying value of the investment. The Company continues to monitor the situation
and will assess the need for any further adjustments in future periods.

 See Note 6 for further detail.

 Fair Value Measurements

 Certain assets and liabilities
of the Company are carried at fair value under GAAP. Fair value is defined 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 to be classified and disclosed
in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered
unobservable:

 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 accounts receivable and accounts payable approximate their fair values due to the short maturity of these instruments.
The Company believes the carrying amount of its advances to related parties approximate fair value due to its short-term maturity.

 The Company's investments
are accounted for under the cost method. See above and Note 6.

 Accounts Receivable

 Accounts receivable are derived
from services and products delivered to customers and are stated at their net realizable value. Each month, the Company reviews its receivables
on a customer-by-customer basis and evaluates whether an allowance for doubtful accounts is necessary based on any known or perceived
collection issues. Any balances that are eventually deemed uncollectible are written off against the allowance after all means of collection
have been exhausted and the potential for recovery is considered remote.

 Intangible Assets

 Intangible assets are amortized
over the respective estimated lives on a straight-line basis, unless the lives are determined to be indefinite and reviewed for impairment
whenever events or other changes in circumstances indicate that the carrying amount may not be recoverable. The Company owns domain names
indefinitely. Costs to renew domains are expensed as incurred.

 F- 9

 Impairment of Long-Lived
Assets

 The Company continually monitors
events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events
or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying
value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less
than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the
fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

 Related Parties

 Related parties are any entities
or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management
and policies of the Company. The Company discloses related party transactions that are outside of normal compensatory agreements, such
as salaries. The Company follows ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of
related party transactions.

 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 contracts with
third-party alcoholic beverage brands to utilize access to the CWS Platform. The Company and the brands enter into a commercial relationship.
The Company performs services such as creating a marketing campaign strategy, developing promotional materials and advertising promotional
materials through the CWS Platform. Revenue is recognized over a period time, as the marketing services are being continually provided
on a daily and monthly basis over the life of an agreed upon campaign. Marketing campaigns generally range from one to three months.

 F- 10

 CWS Platform

 Cwsspirits.com is an e-commerce platform that sells wine and spirits.
The Company is responsible for contracting with CWS and customers to fulfill orders through the website. The Company, though not legally
able to own alcohol inventory, does take on financial inventory risk. The Company is solely responsible for any risk of loss of the end
customer and paying to replenish the loss order. The Company establishes the price and selection of products to be sold on the CWS Platform,
and directs all marketing activities pertaining to the Platform. As such, the Company is the primary obligor for transactions with customers
on the CWS Platform and records gross revenue. Revenue is recognized at the point in time when products are delivered to the end customer,
when LQR has fulfilled its performance obligation, net of returns.

 Product Sales

 The Company wholly owns SWOL
Tequila, a tequila produced in limited batches by a third-party manufacturer in Mexico. The Company handles all logistics to deliver the
product to CWS for retail distribution in the United States, including advancing production, shipping, and other import-related expenses.
Under historical agreements, the Company is entitled to receive payment for these costs, plus an additional 20 % for each bottle of SWOL
Tequila sold via wholesale channels. Revenue is recognized when the product is delivered, fulfilling the Company's performance obligation.
Due to regulatory restrictions surrounding the delivery and custodianship of alcoholic beverages, CWS assumes ownership at the time of
delivery, with no recourse or right of return.

 Vault

 Vault is the exclusive membership
program for CWS Platform customers. Through the CWS Platform, users can sign up for membership where they will have access to all products
available through CWS combined with special membership benefits including discounted products, free shipping and promotional offers.
Prior to the acquisition of the CWS Platform, the Company marketed this membership program on the CWS Platform and was entitled to 50 %
of the revenue from the subscriptions as the agent of the transaction. Upon the acquisition of the CWS Platform, the Company records gross
revenue as it is the principal in the transaction. The Company records a reserve for chargebacks and cancellations at the time of the
transaction based on historical experience.

 Disaggregation of Revenue

 The following is a summary
of the disaggregation of revenue for the years ended December 31, 2024 and 2023:

 Disaggregation of Revenues

 2024

 2023

 CWS Platform

 $
 2,343,255

 $
 528,450

 SWOL product sales

 40,440

 118,124

 Revenue - product

 2,383,695

 646,574

 Marketing

 73,455

 442,662

 Vault

 44,510

 31,386

 Revenue - services

 117,965

 474,048

 Total revenues

 $
 2,501,660

 $
 1,120,622

 Cost of Revenue

 Cost of revenue consists
of all direct costs attributable to prost sales and performing marketing services. Cost of revenue includes product costs, packaging,
shipping and other importing and delivery charges, as well contracted marketing services. Cost of revenue also includes customer service
personnel and amortization of the Company's marketing license asset in 2023.

 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. Advertising costs were approximately $ 628,000 in 2024, and nominal in 2023.

 F- 11

 Deferred Offering Costs

 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.
The deferred offering costs are charged to additional paid-in capital or as a discount to debt, as applicable, upon the completion of
an offering or to expense if the offering is not completed. As of December 31, 2024 and 2023, the Company has no deferred offering costs.

 Stock-Based Compensation

 Stock-based compensation
is accounted for in accordance with ASC Topic 718-10, Compensation-Stock Compensation ("ASC 718-10"). The Company measures
all equity-based awards granted to employees, independent contractors and advisors based on the fair value on the date of the grant and
recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective
award.

 The Company classifies equity-based
compensation expense in its statement of operations in the same manner in which the award recipient's payroll or contractor costs
are classified or in which the award recipient's service payments are classified.

 Segment Information

 In accordance with ASC 280,
Segment Reporting ("ASC 280"), we identify our operating segments according to how our business activities are managed and
evaluated. ASC 280 establishes standards for companies to report financial statement information about operating segments, products, services,
geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial
information is available that is regularly evaluated by the Company's chief operating decision maker ("CODM"), or group,
in deciding how to allocate resources and assess performance.

 The CODM has been identified
as the Chief Executive Officer, who reviews the operating results for the Company as a whole to make decisions about allocating resources
and assessing financial performance. Accordingly, management has determined that the Company only has one operating and reportable segment.

 The key measures of segment
profit or loss reviewed by our CODM are revenue and operating costs. These metrics are reviewed and monitored by the CODM to manage and
forecast cash. The CODM also reviews operating costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned
with all agreements and budget.

 Income Taxes

 The Company uses the liability
method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined
based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to
be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is unlikely that the deferred
tax assets will not be realized. We assess our income tax positions and record tax benefits for all years subject to examination based
upon our evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those
tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy will be to record the largest
amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge
of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained,
no tax benefit will be recognized in the financial statements.

 Net Loss per Share

 Net earnings or loss per
share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding
shares subject to redemption or forfeiture. The Company presents basic and diluted net earnings or loss per share. Diluted net earnings
or loss per share reflect the actual weighted average of common shares issued and outstanding during the period, adjusted for potentially
dilutive securities outstanding. Potentially dilutive securities are excluded from the computation of the diluted net loss per share if
their inclusion would be anti-dilutive. As all potentially dilutive securities are anti-dilutive as of December 31, 2024 and December
31, 2023, diluted net loss per share is the same as basic net loss per share. Potentially dilutive items outstanding as of December 31,
2024 include the Company's outstanding restricted stock units and warrants to purchase common stock (See Note 8).

 Recently Issued and Adopted Accounting Pronouncements

 In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic
280) - Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim
basis, primarily disclosure of significant segment expense categories and amounts for each reportable segment. The new standard is effective
for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company
adopted ASU 2023-07 in the annual financial statements for the year ended December 31, 2024, and for interim periods beginning in 2025.
The adoption of ASU 2023-07 did not have a significant impact on the Company's consolidated financial statements.

 Management does not believe
that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.
As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

 F- 12

 4. ACQUISITION OF CWS PLATFORM

 On November 1, 2023, LQR
House Acquisition Corp. (the "Buyer"), a 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.

 Unaudited Pro Forma Financial Information

 The following unaudited pro
forma financial information presents the Company's financial results as if the CWS Platform acquisition had occurred as of January
1, 2023. The unaudited pro forma financial information is not necessarily indicative of what the financial results actually would have
been had the acquisitions been completed on this date. In addition, the unaudited pro forma financial information is not indicative of,
nor does it purport to project, the Company's future financial results. The pro forma information does not give effect to any estimated
and potential cost savings or other operating efficiencies that could result from the acquisition:

 2023

 Revenues

 $
 3,091,206

 ( 16,037,213
)

 Net loss per common share

 $
 ( 17.33
)

 F- 13

 5. OTHER ASSETS

 Prepaid Expenses

 The Company determined it
was no longer pursuing the website development services as per its October 2023 agreement with X-Media. As such, the Company recognized
an expense of $ 1,350,000 as of December 31, 2024, representing the remaining unamortized prepaid amount. The amount was included
in sales and marketing expenses in the consolidated statements of operations.

 Deposits in Escrow

 As of December 31, 2023,
the Company had $ 5,470,000 in deposits held in escrow for potential investments. In the first quarter of 2024, the Company received
$ 670,000 back from an investment it was no longer pursuing. The remaining $ 4,800,000 was transferred to an investment in the
common stock of a third-party entity, DRNK Beverage Corp. which became Chase Mocktails Ltd. See below.

 6. INVESTMENTS, AT COST

 The Company's investments at cost includes
a minority stake in the common shares of Cannon Estate Winery Ltd and DRNK Beverage Corp. These investments are primarily held for strategic
purposes.

 Cannon Estate Winery Ltd.

 On May 19, 2024, the Company and a majority shareholder
and a director (the "Seller") of Cannon Estate Winery Ltd., a British Columbia corporation ("Cannon") consummated
an acquisition of approximately 9.99 % of common shares of Cannon by the Company pursuant to a Share Exchange Agreement ("Cannon
Agreement") between the Company and the Seller. Pursuant to the Cannon Agreement, the Seller transferred and delivered to the Company 113,085 of
the common shares of Cannon (the "Cannon Shares"), and in exchange the Company issued and delivered to the Seller 750,000 shares
of the Company's common stock.

 The Company recorded an investment of $ 817,500,
which is the fair value of the 750,000 shares issued to Cannon at a fair value per share of $ 1.09 on May 19, 2024. The
Company accounted for the investment in Cannon under the cost method as it owns 9.99 % of Cannon's common shares and does not
exert significant influence.

 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.

 As
of December 31, 2024, the Company recognized an impairment expense of $ 4,500,000 related to its investment in DRNK based on
impairment indicators on DRNK's financial performance and DRNK's progress as compared to initial expectations. In determining the impairment, management used a market approach using
projected revenue information obtained from DRNK and market multiples for companies in similar industry segments.

 As a result of this
adjustment, the carrying value of the investment has been reduced to $ 300,000, and the impairment charge of $ 4,500,000 has been
recorded within other income (expense) in the consolidated statements of operations.

 F- 14

 7. ACCRUED EXPENSES

 Accrued expenses consist of the following:

 2024

 2023

 Accrued retention and settlement payments

 $
 513,729

 $
 -

 Accrued professional and other fees

 62,450

 -

 Taxes payable

 263,087

 93,585

 Other accrued

 88,445

 45,000

 Total accrued expenses

 $
 927,711

 $
 138,585

 Accrued retention and settlement payments, related parties

 -

 Total accrued expenses, related parties

 $

 $
 183,585

 From October to December
2024, the Company entered into several settlement, bonus and retention agreements, of which $ 6,484,729 were accrued and unpaid as of December
31, 2024. Through the issuance date of these financial statements, approximately $ 5,600,000 of the accrued balances have been paid.

 The following is a summary
of the amounts incurred, paid and accrued with respect to the agreements noted above:

 2024

 Retention and settlement expenses, related parties

 $
 7,071,000

 Retention and settlement expenses

 950,000

 Total expenses (general and administrative)

 8,021,000

 Less: 2024 payments, related parties

 ( 1,100,000
)

 Less: 2024 payments

 ( 436,271
)

 Total payments in 2024

 ( 1,536,271
)

 Accrued retention and settlement payments, related parties

 Accrued retention and settlement payments

 513,729

 Total accrued retention and settlement payments

 $
 6,484,729

 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 9) 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

 F- 15

 8. STOCKHOLDERS' EQUITY (DEFICIT)

 Dual Class Share
Structure

 On March 29, 2023, the
Company amended its articles of incorporation to institute a dual class share structure consisting of Class A Common Stock, and Class B
Common Stock, and any number of classes of preferred stock. Class A Common Stock was entitled to twenty (20) votes per share
on proposals requiring or requesting stockholder approval, and Class B Common Stock was entitled to one (1) vote on any such
matter. A share of Class A Common Stock could have been voluntarily converted into a share of Class B Common Stock. A transfer
of a share of Class A Common Stock would have resulted in its automatic conversion into Common Stock upon such transfer, subject
to certain exceptions, including that the transfer of shares of Class A Common Stock to another holder of Class A Common Stock
would not have resulted in such automatic conversion. Class B Common Stock was not convertible. Other than as to voting and conversion
rights, Class A Common Stock and Class B Common Stock had the same rights and preferences and ranked equally, shared ratably
and were identical in all respects as to all matters.

 Due to this amendment, the
Company's authorized capital stock became 350,000,000 shares, consisting of: (i) 300,000,000 shares of
common stock, par value $ 0.0001 per share, of which 20,000,000 shares were designated Class A Common Stock, $ 0.0001 par value
per share, and 280,000,000 shares were designated as Class B Common Stock, $ 0.0001 par value per share; and (ii) 50,000,000 shares
of preferred stock, $ 0.0001 par value per share. All 153,340 shares of common stock issued and outstanding at the time
of the amendment became shares of Class B Common Stock.

 Single Common Stock Structure

 On June 5, 2023,
the Company further amended its articles of incorporation to amend the share structure by (i) eliminating a dual class
share structure consisting of the Class A Common Stock and Class B Common Stock and establishing a single common stock
structure consisting of shares of common stock only, with 350,000,000 authorized shares being all designated as common stock with a
par value of $ 0.0001 per share (the "Single Common Stock Structure"), entitled to one (1) vote per share; and by
(ii) eliminating all authorized shares of preferred stock. All shares of Class B Common Stock issued and outstanding at
the time of the amendment became shares of common stock. The accompanying financial statements reflect the single common stock
structure in place as of December 31, 2024 and 2023.

 The Company filed on November
28, 2023 a Certificate of Change to the Articles of Incorporation of the Company with the Secretary of State of the State of Nevada (the
"Certificate of Change") that provides for a 1-for-60 reverse stock split (the "Split") of its shares of common
stock, par value $ 0.0001 per share (the "Common Stock") that became effective on November 30, 2023. No fractional shares
were issued in connection with the Split and fractional amounts were rounded up to one whole share.

 2024 Stock Transactions

 In May 2024, the Company
issued 750,000 shares of common stock pursuant to the Cannon Agreement for a fair value of $ 817,500. See Note 6.

 On October 15, 2024, the
Company entered into a Securities Purchase Agreement (the "Purchase Agreement") with David E. Lazar ("Lazar"), pursuant to which the Company issued 1,101,818 shares of common stock at a price of $ 0.55 per share for proceeds of $ 606,000.

 In December 2024, the
Company issued 4,352,727 shares of common stock to several accredited investors at a price of $ 0.55 per share and five-year warrants to
purchase an aggregate of 10,909,090 shares of common stock at the exercise price of $ 0.55 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
entered into a Securities Purchase Agreement with various investors, pursuant to which the Company issued 636,400 shares of common stock
at a price of $ 0.55 per share for aggregate gross proceeds of $ 350,020.

 In December 2024, the Company
issued 2,077,800 shares of common stock pursuant to the cashless exercise of warrants.

 During the year ended December 31, 2024, the Company issued an
aggregate of 1,485,575 shares of common stock pursuant to an at-the-market public offering for net proceeds of $ 1,543,079.

 F- 16

 As of December 31, 2024, the Company had 15,252,580 shares issued and
 15,061,952 shares outstanding.

 2023 Stock Transactions

 2023 Private Placement

 From April to June 2023,
the Company conducted a private placement of and entered into certain subscription agreements with several accredited investors. Pursuant
to the agreements, the Company issued 23,875 shares of common stock at $ 60 per share for a total of $ 955,000.

 Advisor and Consulting
Agreements

 In June 2023, the Company
entered into advisor agreements with certain advisors, pursuant to which the advisors will provide business and corporate advice in connection
with the Offering to the Company. In consideration for the advisor's services, the Company issued 12,500 shares of common
stock to six individuals and entities, for an aggregate of 75,000 shares. The Company recorded an expense of $ 3,000,000, or
fair value of $ 40 per share, pertaining to these issuances, which is included in general and administrative expense in the statements
of operations. The fair value was determined based on recent sales of stock under the 2023 Private Placement disclosure noted above.

 In August 2023, the board
of directors approved the issuance of an aggregate total of 62,501 shares of the Company's common stock under the LQR
House Inc. Stock Option and Incentive Plan ("2021 Plan") to certain consultants with whom the Company entered into independent
contractor agreements, in consideration for their providing consulting services to the Company. The Company recognized stock-based compensation
expense of $ 2,552,500, or $ 40.80 per share based on the fair value of the Company's common stock at the time of the agreements,
for the year ended December 31, 2023. The amount was included in general and administrative expenses in the statements of operations.

 Initial Public Offering

 In the IPO, which closed
on August 11, 2021, the Company issued and sold 28,750 shares of common stock, including the exercise of the over-allotment
option, at a public offering price of $ 200 per share. Total gross proceeds to the Company from the IPO were $ 5.75 million. The
aggregate net proceeds to the Company from the IPO were approximately $ 4.5 million after deducting underwriting discounts and commissions
and total offering expenses.

 In connection to the IPO,
the Company agreed to issue the underwriters five-year warrants to purchase an aggregate of 1,437 shares of the Company's common stock
with an exercise price of $ 200 per share. The warrants are immediately exercisable.

 Follow-On Public Offerings

 On October 16, 2023, the
Company completed a subsequent closing of the public offering and issued 710,526 shares of common stock for gross proceeds of
$ 5.4 million, or $ 7.60 per share. The Company received $ 4.9 million in net proceeds. In connection with the October follow-on
offering, the Company issued to the underwriters five-year warrants to purchase an aggregate of 35,526 shares of the Company's
common stock with an exercise price of $ 7.60 per share.

 On November 13, 2023, the
Company completed an additional closing of the public offering and issued 3,928,572 shares of common stock for gross proceeds
of $ 11.0 million, or $ 2.80 per share. The Company received $ 5.3 million in net proceeds, as $ 4.8 million of the gross
proceeds which were deposited in escrow for a potential investment. In connection with the November follow-on offering, the Company issued
to the underwriters five-year warrants to purchase an aggregate of 196,428 shares of the Company's common stock with an
exercise price of $ 2.80 per share.

 On December 27, 2023, the
underwriters exercised their over-allotment option from the November offering and the Company issued an additional 589,286 shares
of common stock for gross proceeds of $ 1.65 million, or $ 2.80 per share. The Company received $ 1.56 million in net proceeds.

 Debt Settlement for Shares

 On September 27, 2023, the
Company issued 63,766 shares of common stock as settlement for outstanding principal on notes of $ 950,000 and accrued interest
of $ 171,000 (see Note 5).

 Cancellations

 Stock cancellations

 In June 2023, the Company
entered into a Cancellation Agreement with four stockholders, who each owned 18,750 shares of common stock or an aggregate of 75,000 shares.
The stockholders purchased these shares from the founder, Sean Dollinger, pursuant to a stock purchase agreement on January 12, 2023,
between Mr. Dollinger and each of these four stockholders. The Company repurchased the shares for $ 18,000.

 F- 17

 Warrant cancellations

 On December 16, 2023, the
Company cancelled all outstanding warrants issued to the underwriter for consideration of $ 60,000.

 Share Buyback

 On September 1, 2023, the
board of directors of the Company authorized a share buyback program for up to 20 % of the Company's common stock and approved
an agreement entered by and between the Company and Dominari Securities LLC ("Dominari") on August 28, 2023 to effect the
share buyback program. From September 8, 2023 through December 22, 2023, the Company confirmed the acquisition of 865,070 shares
of common stock for a total of $ 1,440,852, which was initially recorded as treasury stock on the balance sheet and statement of stockholders'
equity (deficit). On December 22, 2023, the 865,070 shares were sent to the Company's transfer agent for retirement.

 In January 2024, the Company
purchased a total of 190,628 shares of the Company's common stock for $ 547,415, which was recorded as treasury stock
on the balance sheet and statement of stockholders' equity (deficit).

 Warrants

 On December 30, 2024, the Company issued five-year warrants to several
accredited investors to purchase an aggregate of 10,909,090 shares of common stock at the exercise price of $ 0.55 per share (the "Warrant
Shares"). The warrants are immediately exercisable. These warrants can also be exercised, in whole or in part, by means of a "cashless
exercise" in which the holder shall be entitled to receive the number of Warrant Shares equal to the quotient obtained by dividing
a) the volume weighted-average price of the stock on the trading day preceding the exercise notice less the exercise price multiplied
by the Warrant Shares by b) the volume weighted-average price.

 On December 30, 2024, 2,077,800
shares were issued pursuant to the immediate cashless exercise of the warrants. As of December 31, 2024, 7,366,209 warrants remained outstanding.

 Restricted Stock Units

 In August 2023, the Company
granted 31,250 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. The RSUs had a grant-date fair value of $ 6,266,533. During the year ended December 31, 2023, the Company recognized stock-based
compensation expense of $ 1,091,648, which is included in general and administrative expenses in the statement of operations. As of December
31, 2023, there were 29,250 Director RSUs outstanding after cancellations.

 On December 19, 2024, the
Company granted 50,000 restricted stock units (the 2024 Director RSU's) to each newly elected independent director (see Note 8)
which shall vest in eight (8) equal quarterly installments commencing in the first quarter of 2025, provided that such directors remain
in continuous service of the Company on such dates. The RSUs had a grant-date fair value of $ 318,000.

 During the year ended December
31, 2024, 3,000 restricted stock units were forfeited following the resignation of three directors.

 During the year ended December
31, 2024, the Company recognized stock-based compensation expense of $ 2,533,256 in the statement of operations pertaining to the vesting
of director RSUs. Total unrecognized compensation cost related to non-vested restricted stock units amounted to $ 1,953,482 as of December
31, 2024, which is expected to be recognized over approximately 2 years. As of December 31, 2024, 209,845 RSUs remained unvested.

 The following table summarizes RSU activity for the year ended December
31, 2024:

 Restricted Stock Units

 Number of
 shares

 Weighted
 Average
 Fair Value

 Unvested of December 31, 2023

 29,250

 $
 197.45

 Granted

 200,000

 1.59

 Vested

 ( 16,405
)

 200.00

 Forfeited

 ( 3,000
)

 175.00

 Unvested as of December 31, 2024

 209,845

 $
 10.90

 F- 18

 9. 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 4 for the CWS Platform acquisition from SSquared. 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. Pursuant to the Product Handling Agreement, the Company incurred $ 480,000,
to KBROS for the year ended December 31, 2024, which is included in cost of revenue in the consolidated statements of operations. During
the year ended December 31, 2024, the Company paid $ 200,000 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, 2024, $ 3,600,000 remained unpaid and was included as accrued expenses on the consolidated balance sheet. Of this amount,
$ 1,800,000 was paid in 2025 and $ 1,800,000 remained unpaid as of issuance date of these consolidated financial statements.

 See Note 11 for funding commitment
with KBROS.

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

 CWS has 6 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, 2024 and
2023, the Company had $ 149,510 and $ 172,493, respectively, in accounts receivable, related party with CWS pertaining to product revenues.
In the event that CWS fails to repay the trade receivables, the Company believes it can offset the outstanding receivables against regular
payables due to KBROS.

 Accounts Payable, Related
Party

 As of December 31, 2024 and
2023, the Company had accounts payable of $ 21,175 and $ 58,589, respectively, with related parties, including KBROS, the Company's
founder and Chief Executive Officer, and officers and directors.

 F- 19

 Board of Directors

 In October 2024, Jay Dhaliwal
resigned from the Board of Directors, and pursuant to his resignation 500 RSU's were cancelled which were unvested at time of resignation.

 In December 2024, two directors,
James Huber and Gary Herman resigned from the Board of Directors, and pursuant to their resignation unvested 1,250 RSU's to each
director, were cancelled.

 On December 19, 2024, after
the Annual Meeting, the Board appointed Mr. Lijun Chen and Dr. Jing Lu to fill the vacancies on the Board resulting from the resignations
of Mr. Huber and Mr. Herman, effective as of December 19, 2024. The initial terms as director for Mr. Chen and Dr. Lu will expire at the
Company's 2025 annual meeting of stockholders. Mr. Chen was also appointed to serve as the Chairman of the Board, a member of the
Audit Committee of the Board and a member of the Nominating and Corporate Governance Committee of the Board. Dr. Lu was appointed to serve
as a member of the Compensation Committee of the Board, a Chairperson of the Nominating and Corporate Governance Committee of the Board
and a Member of the Audit Committee of the Board.

 On December 19, 2024 and
immediately after the Annual Meeting, the Board appointed newly elected director James O'Brien to serve as Chairman of the Compensation
Committee of the Board.

 In connection with such director
appointments and the election of Mr. Yilin Lu and Mr. Hong Chun Yeung as directors of the Company on December 19, 2024, the Company entered
into an independent director agreement with each of the newly elected and appointed directors: Mr. Yilin Lu, Mr. Hong Chun Yeung, Mr.
Lijun Chen and Dr. Jing Lu (each, the "Director Agreement"). Pursuant to the Director Agreement, each of the abovementioned
directors will be entitled to receive from the Company an annual cash fee of $ 36,000, to be paid in monthly installments, for their services
as a director of the Board. Each of these directors shall also receive equity compensation in the form of 50,000 restricted stock units
("RSUs"), vesting in eight (8) equal quarterly installments commencing in the first quarter of 2025, provided that such directors
remain in continuous service of the Company on such dates.

 Performance Bonus

 During the year ended December
31, 2024, the Company paid its Chief Executive Officer and KBROS a performance bonus of $ 200,000 each for achieving certain revenue
levels through the CWS Platform.

 Retention Agreements

 See Note 7 for a summary
reconciliation of related and non-related party retention agreements. See below for a detailed description.

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. As of December 31, 2024, $ 250,000 remained unpaid and was included
within accrued expenses, related party on the consolidated balance sheet, which has been paid as of the date of issuance of these consolidated
financial statements.

 F- 20

 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. As of December 31, 2024, $ 800,000 remained unpaid and was included within accrued expenses, related party on the consolidated
balance sheet, which has been paid in January 2025.

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. As of December 31, 2024, $ 255,000 remained
unpaid and was included within accrued expenses, related party on the consolidated balance sheet. Of this amount, $ 100,000 was paid in
January 2025, and $ 155,000 remained unpaid as of issuance date of these consolidated financial statements.

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. As of December 31, 2024, $ 500,000 remained unpaid and was included
within accrued expenses, related party on the consolidated balance sheet. This amount was paid in January 2025.

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

 Lease

 The Company historically
leased space from a related party entity, which is now month-to-month. As part of the retention and settlement agreements above, the Company
agreed to pay this entity $ 40,000.

 10. INCOME TAXES

 For the years ended December 31,
2024 and 2023, the Company did not record a current or deferred income tax expense or benefit due to current and historical losses incurred
by the Company. The Company's losses before income taxes consist solely of losses from domestic operations.

 Deferred taxes are recognized
for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The following table
presents the deferred tax assets and liabilities by source:

 2024

 2023

 Deferred tax assets:

 Net operating loss carryforwards

 $
 7,213,981

 $
 2,714,847

 Valuation allowance

 ( 7,213,981
)

 ( 2,714,847
)

 Net deferred tax assets

 $
 -

 $
 -

 The Company recognizes deferred
tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the
Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences,
projected future taxable income, tax-planning strategies, and results of recent operations. The Company assessed the need for a valuation
allowance against its net deferred tax assets and determined a full valuation allowance is required due, cumulative losses through December
31, 2024, and no history of generating taxable income. Therefore, valuation allowances of $ 7,213,981 and $ 2,714,847, respectively, were
recorded as of December 31, 2024 and 2023. Valuation allowance increased by $ 4,499,134 and $ 1,949,039 during the years ended December
31, 2024 and 2023, respectively. Deferred tax assets were calculated using the Company's combined effective tax rate, which it estimated
to be approximately 28.0 %. The effective rate is reduced to 0 % for 2024 and 2023 due to the full valuation allowance on its net deferred
tax assets.

 The Company's ability
to utilize net operating loss carryforwards will depend on its ability to generate adequate future taxable income. At December 31, 2024
and 2023, the Company had net operating loss carryforwards available to offset future taxable income in the amounts of approximately $ 25,808,400
and $ 9,712,000, respectively, which can be carried forward indefinitely. Certain changes in ownership can result in a limitation on the
amount of net operating loss and tax credit carryovers that can be utilized each year. As of December 31, 2024, management has not determined
the extent of any such limitations, if any.

 F- 21

 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 U.S. and various state jurisdictions. The Company is not presently subject to any income tax audit in any taxing jurisdiction,
though all tax years from 2021 on remain open to examination.

 11. 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 4. 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 9.

 Contingencies

 The Company may be subject
to pending legal proceedings and regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted
with certainty, but the Company does not anticipate that the final outcome, if any, arising out of any such matters will have a material
adverse effect on its business, financial condition or results of operations.

 12. SUBSEQUENT EVENTS

 Through the issuance date,
the Company has issued common shares pursuant to the exercise of 7,366,209 warrants for proceeds of approximately $ 4,050,000.

 Through the issuance date,
the Company has issued 13,816,082 shares of common stock pursuant to its ATM Agreement for net proceeds of $ 5,014,022.

 F- 22

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