NOTE 1 - Business Business Truett-Hurst, Inc. (Truett-Hurst, the Company, or THI) is a holding company formed in Delaware and its sole asset is a controlling interest in H.D.D. LLC (LLC). The audited consolidated financial statements as of and for the years ended June 30, 2018 and June 30, 2017 include the results of Truett-Hurst, Inc. and its subsidiary, the LLC. Truett-Hurst consolidates the financial results of the LLC and records a noncontrolling interest for the economic interest in the LLC that is not attributable to Truett-Hurst, Inc. The Company operates and controls all of the business and affairs and consolidates the financial results of the LLC. In addition, pursuant to the limited liability company agreement of the LLC, the Company has the right to determine when distributions will be made to the members of the LLC and the amount of distributions. If a distribution is authorized, such distribution will be made to the members of the LLC pro rata in accordance with the percentages of their respective limited liability company interests. Quantities or results referred to as to date or as of this date mean as of or to June 30, 2018, unless otherwise specifically noted. References to FY or fiscal year refer to the fiscal year ending on June 30th of the designated year. For example, FY18 and fiscal year 2018 each refer to the fiscal year ended June 30, 2018. This Annual Report on Form 10-K references certain trademarks and registered trademarks of products or service names of other companies mentioned in this Annual Report on Form 10-K that may be trademarks or registered trademarks of its respective owners. On August 13, 2018, the Company, entered into an Asset Purchase Agreement (the Purchase Agreement) with Precept Brands LLC, a Washington limited liability company (Precept) pursuant to which the Company agreed to sell certain assets comprising its wholesale wine business (the Wholesale Business) to Precept (the Precept Transaction). As a result, certain balances have been adjusted to reflect the results of this transaction. See Note 3, Discontinued Operations , and Note 12,  Subsequent Events . Capital Structure The Company has two classes of stock with shares outstanding: Class A common stock and Class B common stock. As of June 30, 2018, there were 4,535,750 shares of Class A common stock and 6 shares of Class B common stock outstanding. One share of Class B common stock is issued to each holder of LLC units which, on matters presented for shareholder vote, provides its owner one vote for each LLC unit held. The 6 shares of Class B common stock were associated with 2.73 million LLC units (the entire amount of LLC units held by parties other than the Company) and represents 40% of the voting power of the combined outstanding Class A and Class B common stock. The Company maintains an exchange agreement with holders of LLC units, several of whom are directors and/or officers, under which each LLC member may exchange their LLC units for shares of Class A common stock on a one-to-one basis. Through ownership of Class A and Class B common stock, individuals who are officers and/or directors of the Company control 40% of the voting power of the combined outstanding Class A and Class B common stock. Tax Receivable Agreement Prior to the completion of the IPO, the Company entered into a tax receivable agreement with the LLC members. The agreement provides for the payment from time to time, as corporate taxpayer, to holders of LLC Units of 90% of the amount of the benefits, if any, that the corporate taxpayer is deemed to realize as a result of the exchange of LLC Units (current and future) and certain other tax benefits related to the Company entering into the agreement. These payment obligations are obligations of the corporate taxpayer and not of the LLC.