Item 8.01 Other Events.
Settlement of Litigation with Janelle Anderson
The Company has been a party to an action
pending in Hennepin County District Court, captioned Janelle Anderson v. Fresh Vine Wine, Inc., Damian Novak, and Rick Nechio, Court File
No. 27-CV-22-11491 (the “Lawsuit”), in which Ms. Anderson alleged, among other things, that the Company terminated her employment
in retaliation for reports of alleged wrongdoing pursuant to the Minnesota Whistleblower Act. Defendants also included Damian Novak, Executive
Chairman and a director of the Company, and Rick Nechio, interim Chief Executive Officer and a director of the Company.
On January 27, 2023, the Company entered into a Global Mutual Compromise,
Release and Settlement Agreement (the “Settlement Agreement”) among Ms. Anderson and each of Messrs. Novak and Nechio. Pursuant
to the Settlement Agreement, Ms. Anderson agreed to dismiss the Lawsuit with prejudice and to file with the court any and all documents
necessary to effect such dismissal with prejudice within five business days after all settlement consideration has been actually received
by her, and the parties agreed to general mutual releases. The Company also agreed to indemnify Ms. Anderson and hold her harmless against
any liability, civil damages, penalties, or fines claimed against her for any of her actions done within the course and scope of her employment
with the Company as required by Minn. Stat. §181.970, and under any applicable insurance policies, including but not limited to any
directors and officers policies. The Settlement Agreement also contains a non-disparagement provision.
As consideration for Ms. Anderson’s dismissal and release, and
provided that she does not revoke or rescind the Settlement Agreement within prescribed time periods, the Company agreed to make a cash
payment to Ms. Anderson in the amount of $1,250,000, less certain attorney fees and relevant taxes and other withholdings, in a lump sum.
This cash payment is in addition to $400,000 that the Company previously paid to Ms. Anderson in January 2023 in respect of 2022 bonus
compensation earned by Ms. Anderson under her employment agreement while employed by the Company. Also as contemplated by the Settlement
Agreement, the Company and Ms. Anderson have agreed to enter into a consulting agreement (the “Anderson Consulting Agreement”)
pursuant to which Ms. Anderson will provide certain consulting services to the Company for a period of six months. As consideration for
such services, the Company has agreed to grant and issue to Ms. Anderson 500,000 shares of the Company’s common stock (the “Anderson
Consulting Shares”) from the Company’s 2021 Equity Incentive Plan (the “Anderson Consulting Share Grant”). The
cash payment and the Anderson Consulting Share Grant will be made at the “closing” of the Settlement Agreement, which is scheduled
to occur on February 20, 2023 (the “Settlement Closing”), subject to Ms. Anderson not revoking or rescinding the Settlement
Agreement during the applicable revocation period.
Also pursuant to the Settlement Agreement, Damian Novak, Executive
Chairman and a member of the Board, has agreed to resign as Executive Chairman and remove himself from his management duties with the
Company by February 20, 2023, and has agreed to resign from the Board promptly following completion of certain pending Company capital
raising efforts. In addition, Rick Nechio, the Company’s interim Chief Executive Officer and a member of the Board, has agreed to
resign from the Board by February 20, 2023. The Settlement Agreement further provides that the Company will announce by the date of the
Settlement Closing that it is searching for a permanent chief executive officer to replace Mr. Nechio, who has been serving as Chief Executive
Officer in an interim capacity since June 2022. Following the Company’s appointment of a new chief Executive officer, the Company
may elect to employ Mr. Nechio in an advisory capacity to aid in the transition of his management duties.
The parties to the Settlement Agreement also agreed to the substance
of press releases/narratives, and agreed to the substance of a letter of reference to be exchanged at the Settlement Closing.
The foregoing summaries of the Settlement Agreement and the Anderson
Consulting Agreement are qualified in all respects by the agreements themselves, copies of which are attached as Exhibits 10.1 and 10.2
to this Current Report on Form 8-K and incorporated by reference herein.
Founders’ Common Stock Forfeitures
In conjunction with entering into the Settlement
Agreement, Rick Nechio and Damian Novak entered into Agreements to Forfeit Shares of Common Stock (the “Forfeiture Agreements”)
pursuant to which each agreed to forfeit and transfer back to the Company without consideration 250,000 shares of common stock of the
Company held by them (a total of 500,000 shares), to enable the Company to issue the Anderson Consulting Shares to Ms. Anderson without
subjecting the Company’s other stockholders to dilution therefrom (the “Anderson Consulting-related Forfeitures”). The
Anderson Consulting-related Forfeitures will be effective upon the February 20, 2023 Settlement Closing and contingent upon the occurrence
thereof.
The foregoing summary of the Forfeiture Agreements
with Messrs. Nechio and Novak are qualified in all respects by the form of the agreement itself, a copy of which is attached as Exhibit
10.3 to this Current Report on Form 8-K and incorporated by reference herein.