Fresh Vine Wine, Inc. and Notes Live, Inc. Mutually Agree to Terminate Merger Agreement

Rhea-AI Summary

Fresh Vine Wine Inc. (NYSE American: VINE) and Notes Live, Inc. have mutually agreed to terminate their merger agreement announced on January 29, 2024. The termination comes as conditions for closing the merger were not met by the July 31, 2024 end date. Notes Live expressed a desire to end the transaction, leading to discussions and mutual agreement to terminate. Fresh Vine retains its previously acquired shares in Notes Live.

Michael Pruitt, CEO of Fresh Vine, expressed disappointment but thanked Notes Live's management for their partnership. He stated that Fresh Vine will explore strategic options to maximize stockholder value, potentially including seeking another combination opportunity.

Positive

• Fresh Vine retains its previously acquired shares in Notes Live
• The company is exploring strategic options to maximize stockholder value

Negative

• Termination of the merger agreement with Notes Live
• Failure to meet conditions for closing the merger by the set end date

Insights

Financial Analyst

The termination of the merger agreement between Fresh Vine Wine Inc. (NYSE American: VINE) and Notes Live, Inc. is a significant development that warrants close attention from investors. This decision could have substantial implications for Fresh Vine's future strategic direction and financial performance.

Key points to consider:

• The merger's failure to meet the July 31, 2024 deadline suggests potential complications in the deal structure or due diligence process.
• Fresh Vine retains its shareholding in Notes Live, which could still provide some value and strategic options.
• The company's statement about exploring "strategic options" and potentially seeking another combination opportunity indicates a continued focus on inorganic growth strategies.

From a financial perspective, this development may create short-term uncertainty for Fresh Vine. The company will need to reassess its growth strategy and potentially reallocate resources that were earmarked for the merger. Investors should closely monitor Fresh Vine's next moves, particularly any announcements regarding new strategic initiatives or potential partnerships.

While the termination of a major merger agreement is generally seen as a setback, it's worth noting that it can sometimes lead to better opportunities or a more focused internal growth strategy. The market's reaction to this news will be important to watch in the coming days, as it may provide insights into investor sentiment and expectations for Fresh Vine's future prospects.

Legal Expert

The mutual termination of the merger agreement between Fresh Vine Wine Inc. and Notes Live, Inc. raises several legal considerations that investors should be aware of:

• The presence of termination rights in the original agreement, triggered by the July 31, 2024 end date, suggests prudent legal planning by both parties.
• The mutual nature of the termination likely minimizes the risk of legal disputes or penalties that could arise from a unilateral termination.
• Fresh Vine's retention of Notes Live shares acquired earlier this year presents potential legal considerations regarding insider information and securities regulations.

From a legal standpoint, the company's statement about investigating "strategic options" must be carefully managed to avoid any implications of undisclosed material information. Shareholders will be keenly interested in how the company plans to "maximize value," and any future deals or partnerships will need to be scrutinized for potential conflicts of interest, especially given the existing shareholding in Notes Live.

It's important for Fresh Vine to maintain transparent communication with shareholders about the reasons for the merger's failure and the company's go-forward strategy. This transparency is not just a best practice but also a legal obligation to keep investors informed of material changes in the company's prospects.

Overall, while the termination appears to have been handled in a legally sound manner, investors should remain vigilant about how Fresh Vine navigates its next steps, particularly in terms of corporate governance and securities law compliance.

CHARLOTTE, N.C., Aug. 01, 2024 (GLOBE NEWSWIRE) -- Fresh Vine Wine Inc. (NYSE American: VINE) (“Fresh Vine”) today announced it has agreed with Notes Live, Inc. to terminate their previously announced merger agreement, originally announced on January 29, 2024, pursuant to which Notes Live would have combined with, and become a wholly-owned subsidiary of, Fresh Vine. The merger agreement provided for termination rights, subject to certain exceptions, in favor of either party if the merger contemplated by the merger agreement was not consummated by a July 31, 2024 end date. Conditions to the closing of the merger were not satisfied as of the end date and Notes Live indicated its desire to terminate the transaction. Following discussions between Fresh Vine and Notes Live, the parties mutually agreed to terminate the merger agreement. Fresh Vine continues to hold the shares of Notes Live’s stock that it acquired earlier this year.

“While today’s announcement is unfortunate, I want to thank the Notes Live management team for their partnership over the last several months and, as a continuing shareholder of Notes Live, we wish them success for the future,” stated Michael Pruitt, CEO of Fresh Vine. “We intend to investigate our range of strategic options in a continued effort to seek to maximize value for Fresh Vine stockholders, which may include seeking to identify another combination opportunity.”

About Fresh Vine Wine, Inc.

Fresh Vine Wine, Inc. (NYSE American: VINE) is a producer of lower carb, lower calorie premium wines in the United States. Fresh Vine Wine positions its core brand lineup as an affordable luxury, retailing between $14.99 - $24.99 per bottle. Fresh Vine Wine’s varietals currently include its Cabernet Sauvignon, Chardonnay, Pinot Noir, Rosé, Sauvignon Blanc, Sparkling Rosé, and a limited Reserve Napa Cabernet Sauvignon. All varietals have been produced and bottled in Napa, California.

Note on Forward-looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally can be identified using words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,” “believe,” “estimate,” “forecast,” “goal,” “project,” and other words of similar meaning. These forward-looking statements address various matters including statements regarding the timing or nature of future operating or financial performance or other events. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Among these risks and uncertainties are those set forth in Fresh Vine’s annual report on Form 10-K for the year ended December 31, 2023, and subsequently filed documents with the SEC. In addition to such risks and uncertainties, risks and uncertainties related to forward-looking statements contained in this press release include statements relating to Fresh Vine’s business and the pursuit of Fresh Vine’s strategic options, including seeking to identify another combination opportunity. Actual results may differ materially from those indicated by such forward-looking statements as a result of various factors, including without limitation: (i) uncertainties relating to Fresh Vine’s ability to identify a suitable combination partner within an appropriate timeline or at all, (ii) risks related to Fresh Vine’s continued listing on the NYSE American; (iii) the effect of the announcement of the termination of the merger agreement on Fresh Vine’s business relationships, operating results, business generally and reputation; (iv) the sufficiency of Fresh Vine’s cash and working capital to support continuing operations and efforts to pursue another strategic transaction; (v) uncertainties regarding other events and unanticipated spending and costs that could reduce Fresh Vine’s cash resources; (vi) Fresh Vine’s ability to obtain additional financing when and if needed to do so, and the dilutive impact of any such financing; (vii) the existence and outcome of any legal proceedings that may be instituted against Fresh Vine or its directors or officers related to the proposed merger transaction and the termination of the merger agreement; and (viii) the value or benefits that may be realized by Fresh Vine’s investment in Notes Live, Inc. A further description of the risks and uncertainties relating to the business of Fresh Vine is contained in Fresh Vine’s most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q, as well as any amendments thereto reflected in subsequent filings with the SEC. Fresh Vine cautions investors not to place considerable reliance on the forward-looking statements contained in this press release. You are encouraged to read Fresh Vine’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this press release speak only as of the date of this document, and Fresh Vine undertakes no obligation to update or revise any forward-looking statements as a result of new information, future events or changes in its expectations.

FAQ

Why did Fresh Vine Wine (VINE) and Notes Live terminate their merger agreement?

The merger agreement was terminated because conditions for closing were not met by the July 31, 2024 end date, and Notes Live expressed a desire to end the transaction.

What happens to Fresh Vine Wine's (VINE) shares in Notes Live after the merger termination?

Fresh Vine Wine continues to hold the shares of Notes Live's stock that it acquired earlier in the year, despite the merger termination.

What are Fresh Vine Wine's (VINE) plans following the termination of the merger with Notes Live?

Fresh Vine Wine intends to explore strategic options to maximize stockholder value, which may include seeking another combination opportunity.

When was the original merger agreement between Fresh Vine Wine (VINE) and Notes Live announced?

The original merger agreement between Fresh Vine Wine and Notes Live was announced on January 29, 2024.