10-Q: Amaze Holdings Q2: Revenue Soars Post-Acquisition

Amaze Holdings reports significant revenue growth in Q2 2025 driven by its Amaze Software acquisition, despite widening net losses and a substantial working capital deficit.

Summary

• Amaze Holdings, Inc. (formerly Fresh Vine Wine, Inc.) completed the acquisition of Amaze Software, Inc. on March 7, 2025, pivoting to a creator-powered commerce platform.
• Total revenues for the three months ended June 30, 2025, increased by 1134% to $869,884, up from $70,484 in the prior year period, primarily due to the acquisition.
• Gross income improved significantly to $787,512 for Q2 2025, compared to a gross loss of $(43,676) for Q2 2024.
• Net loss for the three months ended June 30, 2025, widened to $(5,048,167), compared to $(879,569) for the same period in 2024.
• For the six months ended June 30, 2025, total revenues were $930,098, a 431% increase from $175,052 in the prior year period.
• Net loss for the six months ended June 30, 2025, was $(7,137,375), compared to $(2,091,884) for the same period in 2024.
• The company reported an accumulated deficit of approximately $36.4 million as of June 30, 2025.
• A working capital deficit of approximately $27 million was reported as of June 30, 2025, a significant deterioration from a positive working capital position at December 31, 2024.
• Cash used in operating activities increased to approximately $3.9 million for the six months ended June 30, 2025, from $946,000 in the prior year period.
• The company's business is now organized into two segments: Fresh Vine (wine operations) and Amaze Software (e-commerce and subscription services).
• Gross Merchandise Value (GMV) for the quarter ended June 30, 2025, was $3.8 million.
• The company has identified material weaknesses in its internal control over financial reporting, including lack of segregation of duties and control deficiencies in accounting for sales refunds, revenue presentation, cash foreign currency, accounts payable, and equity transactions.

Sentiment

Score: 2

Explanation: The company faces severe liquidity issues, substantial doubt about its ability to continue as a going concern, and widening net losses despite revenue growth from an acquisition. While the strategic pivot and revenue increase are positive, the underlying financial instability, significant working capital deficit, and ongoing legal challenges present a highly precarious situation. The need for continuous capital raises to sustain operations indicates extreme financial distress.

Positives

• Significant revenue growth of 1134% for the quarter and 431% for the six months ended June 30, 2025, primarily driven by the Amaze Software acquisition.
• Transition from a gross loss to a gross income of $787,512 for the three months ended June 30, 2025, indicating improved margin profile from the Amaze platform.
• Successful resolution of NYSE American stockholders' equity deficiency, regaining compliance with listing standards as of March 10, 2025.
• Strategic pivot to a creator-powered commerce platform (Amaze Software) with an asset-light model, leveraging third-party resources to mitigate risks like excess inventory.
• Obtained stockholder approval on June 12, 2025, to issue shares in excess of Exchange Share Cap and Individual Holder Share Cap limitations for Series A, B, C, and D Preferred Stock conversions.

Negatives

• Substantial doubt about the company's ability to continue as a going concern due to historical losses and negative cash flows from operations.
• Net loss significantly widened to $(5.05) million for Q2 2025 and $(7.14) million for H1 2025, compared to prior year periods.
• Increased cash used in operating activities, reaching $(3.9) million for the six months ended June 30, 2025.
• Accumulated deficit grew to approximately $36.4 million as of June 30, 2025.
• Current liabilities significantly increased to $28.3 million, resulting in a working capital deficit of approximately $27 million as of June 30, 2025.
• Ongoing legal proceedings, including a jury verdict against the company for $585,976.25 (plus $21,644 in additional damages) in the Timothy Michaels lawsuit, with garnishment proceedings and a motion for limited receiver pending.
• Material weaknesses in internal control over financial reporting persist, indicating deficiencies in accounting and reporting functions.
• High interest expense of $684,116 for Q2 2025 and $924,988 for H1 2025, largely tied to new financing instruments.

Risks

• Ability to continue as a going concern in the absence of obtaining additional financing.
• Inability to obtain additional financing within required timeframes or on acceptable terms, which could be dilutive to existing shareholders.
• Substantial indebtedness could adversely affect financial condition and limit ability to raise additional capital.
• Intense competition in the e-commerce marketplace, including from larger, more established companies.
• Failure to keep pace with rapid technological changes, enhance current offerings, and develop new offerings to meet evolving customer needs.
• Fluctuating revenue growth rate and financial performance, making demand prediction difficult.
• Dependence on attracting and retaining active and engaged communities of buyers and sellers.
• Reliance on sellers to provide a fulfilling experience to buyers, with potential for negative publicity from poor seller performance.
• Changes in social media platform algorithms, policies, or user preferences could significantly impact business model and creator engagement.
• Software complexity and potential for undetected errors or vulnerabilities, especially with continuous deployment and reliance on AI/ML systems.
• Heavy reliance on Amazon Web Services (AWS) for core operations, posing risks of disruption or increased costs.
• Vulnerability to technology disruptions, misuse/disclosure of personal data, or cybersecurity breaches, leading to liability, expenses, and reputational damage.
• Dependence on third-party services and technology (e.g., cloud providers, marketing platforms, payment processors, shipping carriers) for business operations and scalability.
• Insufficient production and disaster recovery systems in the event of a cyber-related incident.
• Enforcement of marketplace policies may negatively impact brands, reputation, or financial performance.
• Failure to deal effectively with fraud or other illegal activity on the platform.
• Reputation harm if community members use unethical business practices or if third-parties use marketplaces for illegal/unethical activities.
• Regular claims alleging counterfeit, infringing, illegal, or harmful items listed by sellers, potentially leading to liability or reputational damage.
• Challenges in international expansion and operations due to cultural differences, regulatory complexities, and competition.
• Goodwill impairment charges could negatively impact net income and stockholders' equity.
• Expanding and evolving regulations in privacy and user data protection (e.g., GDPR, CCPA) creating compliance burdens and potential liabilities.
• Inability to adequately protect intellectual property, including copyrights, trademarks, and patents.
• Potential lawsuits from third parties for alleged infringement of proprietary rights.
• Reliance on senior management and key technical employees, with risks if unable to retain or motivate them.
• Operational and financial risks associated with future acquisitions.
• Economic downturns, inflation, natural disasters, public health crises, political crises, or geopolitical events adversely affecting business.
• Increased costs and management time due to operating as a public company.
• Volatility in common stock price and potential for delisting from NYSE American if compliance requirements are not met.
• Risks specific to the wine business, including brand strength, reliance on critics, supply chain issues (grapes, materials), competition, and regulatory changes in alcohol distribution.

Future Outlook

The company projects that its existing cash balance, combined with additional financing from an equity line of credit and expected inventory sales, will be sufficient to fund current operations into 2026. However, additional financing or capital may be needed thereafter to satisfy obligations. Management cautions that such financing may not be available on favorable terms or at all, and could be highly dilutive to existing shareholders or include burdensome terms. The inability to raise additional working capital could lead to severe expense reduction, business suspension, or even bankruptcy. The company anticipates net revenue to peak during the October-December quarter due to increased consumer demand around major holidays, particularly in its marketplace revenue channel.

Management Comments

• Our business is currently organized in two reporting segments: Fresh Vine and Amaze Software.
• This marks a significant corporate transition and strategic pivot toward a platform-based digital commerce business focused on enabling creators and brands to monetize through direct audience engagement.
• Our improved margin profile is attributed to the operating leverage of the Amaze platform, which enables high-margin digital and physical sales with lower incremental cost compared to traditional wholesale models.
• We expected the composition and scale of SG&A to shift in the second quarter as consolidated operations begin to normalize post-merger.
• We expect the composition and scale of SG&A to shift in the third quarter as consolidated operations begin to normalize post-Acquisition.
• Our ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors including but not limited to, cash and cash equivalents, working capital and strategic capital raises. The ultimate success of these plans is not guaranteed.
• In considering our forecast for the next twelve months and the current cash and working capital as of the filing of this Form 10-Q, such matters create a substantial doubt regarding the Company’s ability to meet their financial needs and continue as a going concern.
• The Company will need additional debt or equity financing to sustain existing operations. If adequate financing is not available, the Company will be forced to take measures to severely reduce our expenses and business operations or discontinue them completely. Such financing, if available, may be dilutive.
• At the current reduced pace of incurring expenses and with receipt of additional financing, including potential proceeds pursuant to an equity line of credit entered into by the Company on May 6, 2025, and the receipt of proceeds from the expected sales, the Company projects that the existing cash balance will be sufficient to fund current operations into 2026, after which additional financing or capital may be needed to satisfy obligations.
• Additional financing may not be available on favorable terms or at all. If additional financing is available, it may be highly dilutive to existing shareholders and may otherwise include burdensome or onerous terms.
• The Company’s inability to raise additional working capital in a timely manner would negatively impact the ability to fund operations, generate revenues, maintain or grow the business and otherwise execute the Company’s business plan, leading to the reduction or suspension of operations and ultimately potentially ceasing operations altogether and initiating bankruptcy proceedings.

Industry Context

Amaze Holdings is undergoing a significant strategic pivot from a traditional wine business to a creator-powered digital commerce platform. This aligns with the growing 'creator economy' trend, where individuals and small businesses leverage online platforms for direct monetization. The company's asset-light model, relying on third-party production and distribution, is a common strategy in this space to reduce inventory risk and enhance flexibility. The shift positions Amaze to compete in the broader e-commerce and social commerce markets, moving beyond the highly regulated and competitive wine industry, though the wine segment still exists. The focus on owning fan data and optimizing the creator-to-fan sales funnel is a key differentiator in the competitive creator platform landscape.

Comparison to Industry Standards

• The company's pivot to a creator-powered commerce platform positions it against established players like Shopify (e-commerce tools), Patreon (subscriptions), and various print-on-demand services (e.g., Teespring, which Amaze acquired assets from).
• Amaze's reported GMV of $3.8 million for Q2 2025 is relatively small compared to industry giants like Shopify, which reported $57.5 billion in GMV for Q2 2024, indicating Amaze is still in a very early growth stage in this new segment.
• The asset-light model is a common and effective strategy for new e-commerce platforms, similar to how many dropshipping or print-on-demand businesses operate, reducing capital expenditure and inventory risk.
• The company's gross margin improvement post-acquisition suggests the new e-commerce segment has a more favorable cost structure than the legacy wine business, which is typical for software-as-a-service or platform models compared to physical goods production and distribution.

Management Changes

Corporate Governance

Legal Proceedings

• Timothy Michaels v. Fresh Vine Wine, Inc.: Jury verdict against the company for $585,976.25 on January 25, 2024. Court of appeals affirmed judgment in February 2025, granting approximately $22,000 in additional damages. Supreme court denied review on May 13, 2025. Garnishment proceedings against company bank accounts and other third parties are pending, and a motion for appointment of a limited receiver was filed on July 14, 2025, with a hearing scheduled for September 9, 2025. Accrued settlement payable was $622,839 as of June 30, 2025.
• G&I IX Aviation LLC v. Teespring, Inc. et al.: Amaze Holding Company LLC is a defendant. Plaintiff demands $868,513.34 in unpaid rent plus attorneys' fees. The court denied Plaintiff's motion for summary judgment against Amaze on June 12, 2024. The matter remains in discovery.
• Dubow Decorating, Inc. v. Amaze Software, Inc.: Amaze Software, Inc. is the defendant. Plaintiff claims $394,000 in damages for unpaid invoices. Amaze asserted defenses and counterclaims for defamation and tortious interference. Litigation is in early stages.
• DinoCloud, Inc. v. Amaze Software, Inc.: Amaze Software, Inc. is the defendant. Plaintiff claims $202,000 in damages for breach of contract, breach of good faith and fair dealing, detrimental reliance, and unjust enrichment. The company filed its answer and affirmative defenses on July 17, 2025.

Related Party Transactions

• As of June 30, 2025, and December 31, 2024, there was $309,333 outstanding under terminated license agreements with certain equity investors for marketing and advertising services.

Stakeholder Impact

• Shareholders: Significant dilution risk from ongoing and future capital raises (e.g., ELOC), potential for further stock price volatility due to going concern issues, widening losses, and legal liabilities. The reverse stock split aimed to maintain NYSE listing but does not guarantee sustained price or liquidity.
• Employees: Potential for severe expense reduction or business operations discontinuation if additional financing is not secured, impacting job security. Management changes and the need to hire additional accounting/finance staff for internal control remediation could affect morale and workload.
• Customers (Creators/Consumers): The strategic pivot to a creator-powered platform aims to enhance service offerings and engagement. However, financial instability and operational challenges (e.g., software errors, service disruptions) could negatively impact user experience and trust.
• Suppliers/Creditors: Increased accounts payable and notes payable indicate higher obligations. The company's going concern risk and substantial indebtedness could affect its ability to pay suppliers and creditors in a timely manner, potentially leading to strained relationships or legal actions (e.g., garnishment proceedings).

Next Steps

• Continue efforts to remediate material weaknesses in internal control over financial reporting by designing processes for segregation of duties and implementing additional controls for account reconciliations.
• Seek additional debt or equity financing to sustain existing operations beyond 2026.
• Address ongoing legal proceedings, including the motion for appointment of a limited receiver in the Timothy Michaels lawsuit (hearing scheduled for September 9, 2025).
• Complete the formal valuation analysis and purchase price allocation for the Amaze Software acquisition within one year of the acquisition date (March 7, 2025).
• Continue to evolve and refine products and bring on new suppliers, products, and services for the E-commerce business.
• Expand distribution and accelerate in-country supply for the E-commerce business.
• Monitor and adapt to seasonal fluctuations, with anticipated net revenue peaking during the October-December quarter.

Key Dates

Recommendation

The company faces severe financial distress, explicitly stating 'substantial doubt about our ability to continue as a going concern.' Despite a significant revenue increase driven by an acquisition, net losses have widened considerably, and cash burn from operations has increased. The working capital deficit is substantial, indicating a critical liquidity crunch. While the company is actively raising capital through an equity line of credit and notes, this financing is highly dilutive and essential for mere survival, not growth. Multiple ongoing legal proceedings add significant financial and operational uncertainty. The identified material weaknesses in internal controls further compound the risk. For a seasoned investor, the fundamental risks of potential bankruptcy, severe dilution, and operational instability far outweigh any speculative upside from the new business segment. The stock is a high-risk, distressed asset.

Keywords

Creator Economy, E-commerce Platform, Social Commerce, Digital Commerce, Software Solutions, Creator Monetization, Direct-to-Consumer, Wine Industry, SEC Filing, 10-Q, Financial Reporting, Going Concern, Liquidity, Capital Raise, Merger & Acquisition, Risk Factors, Corporate Governance, Legal Proceedings, Internal Controls