Endovia Health Sciences, Inc. 10-K

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis should be read in conjunction with the Audited Consolidated Financial Statements and Notes to Audited Consolidated Financial Statements filed herewith. Business Overview Canfield Medical Supply, Inc. a company’s whose common stock was quoted on the OTCQB entered into an Agreement and Plan of Merger with SBG Acquisition Inc. (“Merger Sub”), a Nevada Corporation wholly-owned by Canfield, and Splash Beverage Group, II Inc. a Nevada corporation (“Splash”) pursuant to which Merger Sub merged with and into Splash (the “Merger”) with Splash as the surviving company and a wholly-owned subsidiary of Canfield. The Merger was consummated on March 31, 2020. As the owners and management of Splash had voting and operating control of CMS following the Merger, the Merger transaction was accounted for as a reverse acquisition (that is with Splash as the acquiring entity), followed by a recapitalization. On July 31, 2020, CMS changed its name to Splash Beverage Group, Inc. (“SBG”). On June 11, 2021, SBG’s common stock and warrant to purchase common stock began trading on the NYSE American under the symbols “SBEV” and SBEV WS,” respectively On November 9, 2021, SBG reincorporated into the State of Nevada and became a Nevada corporation. Our principal offices are located at 1314 E. Las Olas Blvd, Suite 221, Fort Lauderdale, Florida 33301. Our main telephone number is (954) 745-5815. Our website address is www.splashbeveragegroup.com. We have not incorporated by reference into this Annual Report on Form 10-K the information that can be assessed through our website and you should not consider it to be part of this Annual Report on Form 10-K. Results of Operations for the Year Ended December 31, 2021, compared to Year Ended December 31, 2020. Revenue Revenues for the year ended December 31, 2021, were $11,316,002 compared to revenues of $2,300,126 for the year ended December 31, 2020. The $9,015,876 increase in sales was due to Salt Tequila & TapouT Performance $170,220, Qplash – our vertically integrated B2B and B2C e-commerce distribution platform which sells their products on Amazon and Shopify $4,898,798, and Copa di Vino business $3,946,858. Cost of goods sold for year ended December 31, 2021, were $8,734,413 compared to cost of goods sold for the year ended December 31, 2020, of $1,936,533. The $6,797,880 increase in cost of goods sold for the year ended December 31, 2021, was primarily due to our increased sales, and as our sales increased, our cost of sales for those sales correspondingly increased. Operating Expenses Operating expenses for the year ended December 31, 2021, were $31,664,511 compared to $18,025,359 for the year ended December 31, 2020. The $13,639,152 increase in our operating expenses was primarily a result of recording expenses relating to non-cash warrants and share-based compensation for shares issued in exchange for services $13,101,418, increase in salaries $2,358,075, increase in finance charges due to our S1 registration statement $841,294 and shipping $1,708,586 within our e-commerce business. The net loss from continuing operations for the year ended December 31, 2021, was $29,345,372 as compared to a net loss of $19,588,233 for the year ended December 31, 2020. The increase in net loss is due to our increase in operating expenses slightly offset by our increase in revenues. 21 Other Income/(Expense) Other expense for the year ended December 31, 2021 were $262,450 compared to $1,926,467 for the year ended December 31, 2020. The $1,664,017 decrease in our other expenses was primarily a result of recording a finance charge of $1,236,254 associated with warrants issued to one of our note holders in 2020. LIQUIDITY AND CAPITAL RESOURCES Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. In addition, the Company has an active registration statement on Form S-3 to facilitate raising additional funds. As of December 31, 2021, we had total cash and cash equivalents of $4,181,383, as compared with $380,000 at December 31, 2020. The increase was primarily due to issuances of notes payable and stock subscription agreements offset by expenses relating to the operating the business. Net cash used for continuing operating activities during the year ended December 31, 2021, was $14,616,448 as compared to the net cash used by continuing operating activities for the year ended December 31, 2020, of $21,316,556. The primary reasons for the change in net cash used was due to losses sustained and increases for stock-based compensation, offset by other non-cash expenses. Net cash used for discontinued operating activities during the year ended December 31, 2021, was $515,952 as compared to $60,815 for the year ended December 31, 2020. Net cash used for continuing investing activities during the year ended December 31, 2021, was $0 as compared to the net cash used by continuing investing activities for the year ended December 31, 2020, of $768,624. The net cash used in the year 2020 was primarily due to the $250,000 for an additional investment in SALT Tequila USA and $500,000 of cash paid relating to the Copa di Vino acquisition offset by $72,422 of cash obtained in the acquisition of Canfield Medical Supply, Inc. Net cash used for discontinued investing activities was $0. Net cash provided by financing activities during the year ended December 31, 2021, was $18,933,783 compared to $22,494,984 provided from financing activities for the year ended December 31, 2020. During the year ended December 31, 2021, we received $20,021,065 from investors and related parties and we issued $1,934,541 of debt used to pay debt holders and $261,245 is repayments to shareholder advances offset by $1,934,541 of the right of use liability. Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Not applicable for smaller reporting companies. 22