What changed in this filing

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Item 1. Financial Statements

2022-08-15 compared with 2022-05-16 · 338 added, 378 removed, 234 unchanged (75% of the section changed)

FINANCIAL STATEMENTS

Beverage Group, Inc.

Splash Beverage Group, Inc.

Condensed Consolidated Financial Statements

June 30, 2022

Beverage Group, Inc.

1 unchanged sentence

30, 2022 and December 31, 2021

March 31, 2022

December 31, 2021

Current assets:

Cash and cash equivalents

Accounts Receivable, net

Prepaid Expenses

Inventory, net

Other receivables

Assets from discontinued operations

Total current assets

and cash equivalents

Receivable, net

from discontinued operations

current assets

Non-current assets:

Intangible assets

Investment in Salt Tequila USA, LLC

Right of use asset, net

Property and equipment, net

Total non-current assets

Liabilities and Stockholders’

Intangible, net

in Salt Tequila USA, LLC

and equipment, net

non-current assets

and Stockholders’ Equity

payable and accrued expenses

of use liability – current

party notes payable

payable, current portion

Liability to issue common stock

interest payable

from discontinued operations

current liabilities

Accounts payable and accrued expenses

Liability to issue shares

Sales tax payable

Right of use liability - current

Related party notes payable

Notes payable, current portion

Shareholder advances

Accrued interest payable

Liabilities from discontinued operations

Total current liabilities

Long-term Liabilities:

Liability to issue shares in APA

Right of use liability - noncurrent

Total long-term liabilities

Total liabilities

Common stock, (mezzanine shares) 12,605,283 shares, contingently

convertible to notes payable at December 31, 2020

Deficiency in stockholders’ equity (deficit):

Common Stock, $ 0.001

par, 150,000,000

shares authorized, 36,669,828

and 33,596,232

shares issued 36,669,828

and 33,596,232

outstanding, at March 31, 2022 and December 31, 2021, respectively

Additional paid in capital

Accumulated deficit

Total deficiency in stockholders’ equity

Total liabilities, mezzanine shares and deficiency in stockholders’

payable – noncurrent

of use liability – noncurrent

long-term liabilities

Stockholders’

Stock, $ 0.001 par, 150,000,000 shares authorized, 37,269,828 and 33,596,232 shares issued 37,269,828 and 33,596,232 outstanding,

at June 30, 2022 and December 31, 2021, respectively

paid in capital

Comprehensive Income – Translation

( 102,393,821 )

( 90,640,557 )

stockholders’ equity

liabilities, and stockholders’ equity

accompanying notes are an integral part of these condensed consolidated financial statements.

Splash Beverage Group, Inc.

Beverage Group, Inc.

Consolidated Statements of Operations

the Three Months Ended March 31, 2022 and 2021

Three months ended March 31,

Customer discounts

the Three and Six Months Ended June 30, 2022 and June 30, 2021

Three months ended June 30,

Six months ended June 30,

Customer discount

Cost of goods sold

( 3,094,571 )

( 1,621,504 )

Operating expenses:

1 unchanged sentence

Salary and wages

Salary and wages - non-cash share-based compensation

Non-cash share-based compensation

Other general and administrative

Other general and administrative - non-cash share-based

Sales and marketing

2 unchanged sentences

( 5,829,148 )

( 4,548,929 )

Other income/(expense):

Interest income

Interest expense

Gain from debt extinguishment

Total other (expense)

Total other income/(expense)

Provision for income taxes

Net loss from continuing operations, net of tax

( 5,769,831 )

( 4,639,707 )

Net loss /income from discontinued operations, net of

$ ( 5,994,408 )

$ ( 4,442,219 )

Net income (loss) from discontinued operations, net of tax

Gain on sale of discontinued operations

Income of discontinued operations

(Loss) per share - continuing operations

Basic and dilutive

Weighted average number of common shares outstanding - continuing operations

Income/(Loss) per share - discontinuing operations

Basic and dilutive

Income/(loss) per share - discontinued operations

Weighted average number of common shares outstanding - discontinued operations

accompanying notes are an integral part of these condensed consolidated financial statements.

Beverage Group, Inc.

Consolidated Statement of Changes in Stockholders’ Equity

the three months ended March 31, 2022 and 2021

stockholders’ equity, beginning balances

stock and additional paid-in capital

of common stock upon conversion of

convertible instruments

of warrants for services

of common stock for services

of common stock for cash

Reclassification

of Mezzanine shares

stockholders’ equity, ending balances

Weighted average number of common shares outstanding - discontinuing operations

accompanying notes are an integral part of these condensed consolidated financial statements.

Beverage Group, Inc.

Consolidated Statement Cash Flows

the Three Months Ended March 31, 2022 and 2021

Consolidated Statements of Changes in Stockholders’ Equity

the Three and Six months ended June 30, 2022 and 2021

Treasury Stock

Additional Paid-In

Stockholders’ Equity

Balances at December 31, 2020

( 61,589,735 )

( 9,350,724 )

to reconcile net loss to net cash used in operating activities:

and amortization

Issuance of warrants for services

Issuance of common stock for services

Issuance of common stock and warrants for cash

Mezzanine shares

( 4,442,219 )

warrant expense

noncash changes

in working capital items:

receivable, net

expenses and other current assets

payable and accrued expenses

Interest payable

cash used in operating activities - continuing operations

( 4,442,219 )

Balances at March 31, 2021

( 66,031,954 )

cash used in operating activities - discontinued operations

Flows from Investing Activities:

in Salt Tequila USA, LLC

used for Copa acquisition

cash acquired in Canfield merger

cash used in investing activities - continuing operations

cash used in investing activities - discontinued operations

Flows from Financing Activities:

from issuance of Common stock

advance from shareholder

of cash advance

from issuance of debt

repayment of debt

cash provided by financing activities - continuing operations

cash provided by financing activities - discontinued operations

Change in Cash and Cash Equivalents

and Cash Equivalents, beginning of year

and Cash Equivalents, end of year

Disclosure of Cash Flow Information:

paid for Interest

Disclosure of Non-Cash Investing and Financing Activities

payable and accrued interest converted to common stock ( 223,596

Issuance of warrants for services

Issuance of common stock for services

Issuance of common stock and warrants for cash

( 6,560,600 )

Balances at June 30, 2021

( 72,592,554 )

Stockholders’

at December 31, 2021

of common stock on convertible instruments

of warrants for services

of common stock for services

of common stock and warrants for cash

at March 31, 2022

of warrants for services

of common stock for services

of common stock and warrants for cash

Comprehensive Income - Translation

at June 30, 2022

( 102,400,391

accompanying notes are an integral part of these condensed consolidated financial statements.

Beverage Group, Inc.

Consolidated Statements of Cash Flows

the Six -Months Ended June 30, 2022 and 2021

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Gain from debt extinguishment

Gain from sale of discontinued operation

Non-cash share-based compensation

Changes in working capital items:

Accounts receivable, net

Inventory, net

Prepaid expenses and other current assets

Accounts payable and accrued expenses

Accrued Interest payable

Net cash used in operating activities - continuing operations

Net cash used in operating activities - discontinued operations

Cash Flows from Investing Activities:

Net cash used in investing activities - continuing operations

Cash Flows from Financing Activities:

Proceeds from issuance of Common stock

Cash advance from shareholder

Repayment of cash advance

Proceeds from issuance of debt

Principal repayment of debt

Net cash provided by financing activities - continuing operations

Net cash provided by financing activities - discontinued operations

Net Change in Cash and Cash Equivalents

Cash and Cash Equivalents, beginning of year

Cash and Cash Equivalents, end of year

Supplemental Disclosure of Cash Flow Informati on:

Cash paid for Interest

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Notes payable and accrued interest converted to common stock ( 223,596 shares)

accompanying notes are an integral part of these condensed consolidated financial statements.

Beverage Group, Inc.

to the Condensed Consolidated Financial Statements

1 – Business Organization and Nature of Operations

Splash seeks to identify, acquire, and build early

stage or under-valued beverage brands that have strong growth potential within its distribution system.

Splash’s distribution system

is comprehensive in the US and is now expanding to select attractive international markets.

The Splash brand portfolio is growing and

diverse, covering multiple categories that are exhibiting strong growth in both the non-alcohol and alcohol sectors.

Through its wholly

owned subsidiary Qplash, Splash’s distribution reach includes e-commerce access to both B-to-B and B-to-C customers.

Q-plash markets

well known beverage brands to customers throughout the US that prefer delivery direct to their office, facilities and or homes.

seeks to identify, acquire, and build early stage or under-valued beverage brands that have strong growth potential within its distribution

Splash’s distribution system is comprehensive in the US and is now expanding to select attractive international markets.

The Splash brand portfolio is growing and diverse, covering multiple categories that are exhibiting strong growth in both the non-alcohol

and alcohol sectors.

Through its wholly owned subsidiary Qplash, Splash’s distribution reach includes e-commerce access to both

B-to-B and B-to-C customers.

Q-plash markets well known beverage brands to customers throughout the US that prefer delivery direct to

their office, facilities and or homes.

February 2021, Management initiated a plan to divest its Canfied Medical Supply, Inc.

(“CMS”) business.

As a result, the assets and operations of CMS have been retrospectively

reflected as discontinued operations.

On November 12, 2021 the Company changed its state of Domicile from Colorado to Nevada.

As a result, the

assets and operations of CMS have been retrospectively reflected as discontinued operations.

On November 12, 2021 the Company changed

its state of Domicile from Colorado to Nevada.

June 30, 2022, the Company entered into a Business Transfer and Indemnity Agreement (“Agreement”).

Pursuant to the

Agreement, the Company transferred and assigned the assets and liabilities from the CMS business.

Pursuant to the Agreement the

Company was paid $ 31,000 and recorded

a gain of $ 115,632

for the three months ended June 30, 2022.

coordination with uplisting to the NYSE on June 11, 2021, the Company consummated a 1.0 for 3.0 reverse stock split.

5 unchanged sentences

of Presentation and Consolidation

condensed consolidated financial statements include the accounts of Splash Beverage Group and its wholly owned subsidiaries, Holdings, Copa di Vino, Inc.(‘CdV”) and Splash Mexico., CMS is reflected as discontinued operations.

These condensed consolidated financial statements

include the accounts of Splash Beverage Group and its wholly owned subsidiaries, Splash International Holdings LLC, Splash Beverage Group

Holding LLC, Splash Beverage Group II, Inc., Copa di Vino Wine Group, Inc.

(“CdV”) and Splash Mexico SA de CV.

CMS is reflected

as discontinued operations until its disposal on June 30, 2022.

All intercompany balances have been eliminated in consolidation.

accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP).

accompanying condensed financial statements have been prepared by us without audit.

In the opinion of management, all adjustments (which

include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for

the three months ended March 31, 2022 and 2021 have been made.

information and footnote disclosures normally included in consolidated financial statements prepared in GAAP have been condensed or omitted.

The results of operations for the period ended March 31, 2022 are not necessarily indicative of the operating results for the full year.

The accompanying condensed consolidated financial

statements have been prepared by us without audit.

In the opinion of management, all adjustments (which include only normal recurring

adjustments) necessary to present fairly the financial position, results of operations and cash flows for the three and six months ended

June 30, 2022 and 2021 have been made.

Certain information and footnote disclosures

normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted.

of operations for the period ended June 30, 2022 are not necessarily indicative of the operating results for the full year.

preparation of condensed consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions

5 unchanged sentences

consider all highly liquid securities with an original maturity of three months or less to be cash equivalents.

cash equivalents at March 31, 2022 or December

Our cash in bank deposit amounts, at times, may exceed

federally insured limits of $250,000.

At March 31, 2022 we had $ 7,632,587

We had no cash equivalents

at June 30, 2022 or December 31, 2021.

cash in bank deposit amounts, at times, may exceed federally insured limits of $250,000.

At June 30, 2022 we had $ 3,405,814

in excess of the federally insured limits.

Our bank deposit amounts in Mexico $ 2,169

are uninsured.

Our bank deposit amounts in Mexico of $ 2,000 are

Beverage Group, Inc.

6 unchanged sentences

and inherent risk in the account balance, and current economic conditions.

At March 31, 2022 and December 31, 2021, our accounts receivable

amounts are reflected net of allowances of $ 13,949

and $ 45,203 ,

respectively.

is stated at the lower of cost or net realizable value, accounted for using the weighted average cost method.

The inventory balances

at March 31, 2022 and December 31, 2021 consisted of raw materials, work-in-process, and finished goods held for distribution.

elements of inventory consist of purchase of products, transportation, and warehousing.

We establish provisions for excess or inventory

near expiration are based on management’s estimates of forecast turnover of inventories on hand and under contract.

A significant

change in the timing or level of demand for certain products as compared to forecast amounts may result in recording additional provisions

for excess or expired inventory in the future.

Provisions for excess inventory are included in cost of goods sold and have historically

been adequate to provide for losses on inventory.

We manage inventory levels and purchase commitments in an effort to maximize utilization

of inventory on hand and under commitments.

The amount of our reserve was $ 253,703

At June 30, 2022 and December 31, 2021, our accounts receivable

amounts are reflected net of allowances of $ 13,855 and $ 45,203 , respectively.

is stated at the lower of cost or net realizable value and accounted for using the weighted average cost method.

The inventory

balances at June 30, 2022 and December 31, 2021 consisted of raw materials, work-in-process, and finished goods held for

distribution.

The cost elements of inventory consist of purchase of products, transportation, and warehousing.

provisions for excess or inventory near expiration are based on management’s estimates of forecast turnover of inventories on

hand and under contract.

A significant change in the timing or level of demand for certain products as compared to forecast amounts

may result in recording additional provisions for excess or expired inventory in the future.

Provisions for excess inventory are

included in cost of goods sold and have historically been adequate to provide for losses on inventory.

We manage inventory

levels and purchase commitments in an effort to maximize utilization of inventory on hand and under commitments.

The amount of our

reserve was $ 68,349

and $ 223,223

at March 31, 2022 and December 31, 2021, respectively.

at June 30, 2022 and December 31, 2021, respectively.

and Equipment

5 unchanged sentences

amount of a long-lived asset might not be recoverable.

expense totaled $ 30,695

for the three months ended March 31, 2022 and

March 31, 2021, respectively.

Property and equipment as of March 31, 2022 and December 31, 2021 consisted of the following:

of Property and equipment

Furniture and computer equipment of $ 60,626

were written off as of June 30, 2022

expense totaled $ 43,534 and $ 36,561 for the three months ended June 30, 2022 and June 30, 2021, respectively.

expense totaled $ 74,229 and

the six months ended June 30, 2022 and June 30, 2021, respectively.

Property and equipment as of June 30, 2022

and December 31, 2021 consisted of the following:

Schedule of Property and equipment

June 30, 2022

December 31, 2021

Machinery & Equipment

Leasehold Improvements

Office furniture & equipment

Office Furniture & Fixtures

Property and equipment, at cost

Accumulated depreciation

1 unchanged sentence

( 1,552,125 )

Property, plant & equipment, net

Property and equipment, net

Company pays alcohol excise taxes based on product sales to both the Oregon Liquor Control Commission and to the U.S.

17 unchanged sentences

the fair value hierarchy are as follows:

quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement

Unadjusted quoted

prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 1 primarily consists of financial instruments whose value is based on quoted market prices such as exchange-traded instruments

and listed equities.

other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g.,

quoted prices of similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in

markets that are not active).

inputs for the asset or liability.

Financial instruments are considered Level 3 when their fair values are determined using pricing models,

discounted cash flows or similar techniques and at least one significant model assumption or input is unobservable.

liabilities and indebtedness presented on the condensed consolidated financial statements approximate fair values at March 31, 2022 and

December 31, 2021, consistent with recent negotiations of notes payable and due to the short duration of maturities and market rates

Inputs other than quoted prices

included within Level 1 that are observable for the asset or liability, either directly or indirectly (e.g., quoted prices of similar

assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active).

Unobservable inputs for the

asset or liability.

Financial instruments are considered Level 3 when their fair values are determined using pricing models, discounted

cash flows or similar techniques and at least one significant model assumption or input is unobservable.

The liabilities and indebtedness presented on the

condensed consolidated financial statements approximate fair values at June 30, 2022 and December 31, 2021, consistent with recent negotiations

of notes payable and due to the short duration of maturities and market rates of interest.

Beverage Group, Inc.

12 unchanged sentences

Sales taxes and other similar taxes are excluded from revenue.

expenses to transport our finished goods products, where applicable, and warehousing expense are accounted for within operating expenses.

expenses to transport our finished goods, where applicable, and warehousing expense are accounted for within operating expenses.

Distribution expense is capitalized as part of inventory as the materials are received by our distillery, co-packer or internal/external

5 unchanged sentences

Under the fair value recognition provisions, cost is measured

at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period, which

is generally the award’s vesting period.

We use the Black-Scholes option pricing model to determine the fair value of stock-based

We early adopted ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting”, which aligns accounting

treatment for such awards to non-employees with the existing guidance on employee share-based compensation in ASC 718.

at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period, which is

generally the award’s vesting period.

We use the Black-Scholes option pricing model to determine the fair value of stock-based awards.

We early adopted ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting”, which aligns accounting treatment

for such awards to non-employees with the existing guidance on employee share-based compensation in ASC 718.

use the liability method of accounting for income taxes as set forth in ASC 740, “ Income Taxes” .

3 unchanged sentences

We record a valuation allowance

when it is not more likely than not that the deferred tax assets will be realized.

when it is more likely than not that the deferred tax assets will not be realized.

management assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation

3 unchanged sentences

that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant

those income tax positions where there is less than 50 %

likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements.

Company management has

determined that there are no material uncertain tax positions at March 31, 2022 and December 31, 2021.

those income tax positions where there is less than 50 % likelihood that a tax benefit will be sustained, no tax benefit will be recognized

in the financial statements.

Company management has determined that there are no material uncertain tax positions at June 30, 2022 and

December 31, 2021.

Beverage Group, Inc.

2 unchanged sentences

income (loss) per share

net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding.

Warrants, stock options, and common stock issuable upon the conversion of the Company’s convertible debt or preferred stock (if

any), are not included in the computation if the effect would be anti-dilutive.

average number of shares outstanding for awards granted from 2021 to 2022 excludes anti-dilutive common stock equivalents, including

warrants to purchase 3

million shares of common stock for nominal consideration.

net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common stock

Warrants, stock options, and common stock issuable upon the conversion of the Company’s convertible debt or

preferred stock (if any), are not included in the computation if the effect would be anti-dilutive.

conduct advertising for the promotion of our products.

In accordance with ASC 720-35, advertising costs are charged to operations when

In accordance with ASC 720-35, advertising costs are charged to operations

when incurred.

We recorded advertising expense of $ 131,327

for the three-months ended March 31, 2022 and

2021, respectively.

and $ 150,753 for

the three-months ended June 30, 2022 and 2021, respectively.

We recorded advertising expense of $ 218,917 and $ 198,538 for the six

months ended June 30, 2022 and 2021, respectively.

and Intangibles Assets

6 unchanged sentences

public companies and transactions to develop metrics to be applied to historical and expected future operating results.

Intangible assets consist of customer lists, brands

and license agreements acquired in the acquisition of CdV.

The Company amortizes intangible assets with finite lives on a straight-line

basis over their estimated useful lives of 15 years.

assets consist of customer lists, brands and license agreements acquired in the acquisition of CdV.

The Company amortizes intangible

assets with finite lives on a straight-line basis over their estimated useful lives of 15 years.

Beverage Group, Inc.

16 unchanged sentences

Reclassifications

Certain prior period amounts have been reclassified

to conform with the current year presentation.

prior period amounts have been reclassified to conform with the current year presentation.

Beverage Group, Inc.

to the Condensed Consolidated Financial Statements

3 – Notes Payable, Related Party Notes Payable, Convertible

Bridge Loans Payable, Revenue Financing Arrangements and Bridge Loan Payable

3 – Notes Payable and Related Party Notes Payable

payable are generally nonrecourse and secured by all Company owned assets.

Schedule of Notes payable

Notes Payable and Convertible

Notes Payable

In March 2014, we entered into

a short-term loan agreement with an entity in the amount of $ 200,000 .

The note included warrants for 272,584

shares of common stock at $ 0.94

Notes Payable and Convertible Notes Payable

In March 2014, we entered into a short-term loan agreement with an entity in the amount of $ 200,000 .

The note included warrants for 272,584 shares of common stock at $ 0.94 per share.

The warrants expired unexercised on February 28, 2017 .

2 unchanged sentences

loan with a company in the amount of $ 208,000 .

The loan requires 12 amortized payments with the final payment due August 2022.

In December 2020, we entered into a 56

month loan with a company in the amount of $ 1,578,237 .

The loan requires payments of 3.75 %

of the previous months revenue.

The principal and interest was paid off in June 2022

In December 2020, we entered into a 56 month loan with a company in the amount of $ 1,578,237 .

The loan requires payments of 3.75 % of the previous months revenue.

Note is due September 2025

In April 2021, we entered into a six-month

convertible loan with an individual in the amount of $ 84,000 .

In April 2021, we entered into a six-month convertible loan with an individual in the amount of $ 84,000 .

The loan had an original maturity of October 2021 with principal and interest due at maturity.

The loan was extended to August 2022.

In April 2021, we entered into a six-month

convertible loan with an individual in the amount of $ 84,000 .

In April 2021, we entered into a six-month convertible loan with an individual in the amount of $ 84,000 .

The loan had an original maturity of October 2021 with principal and interest due at maturity.

The loan was extended to August 2022.

In May 2021, we entered into a six-month

convertible loan with an individual in the amount of $ 50,000 .

In May 2021, we entered into a six-month convertible loan with an individual in the amount of $ 50,000 .

The loan had an original maturity of October 2021 with principal and interest due at maturity.

The loan was extended to August 2022.

In May 2021, we entered into a six-month

convertible loan with an individual in the amount of $ 500,000 .

In May 2021, we entered into a six-month convertible loan with an individual in the amount of $ 500,000 .

The loan had an original maturity of October 2021 with principal and interest due at maturity.

The principal and interest was converted

into shares of common stock in February 2022.

In May 2021, we entered into a six-month

convertible loan with an individual in the amount of $ 10,000 .

The principal and interest was converted into shares of common stock in February 2022.

In May 2021, we entered into a six-month convertible loan with an individual in the amount of $ 10,000 .

The loan had an original maturity of October 2021 with principal and interest due at maturity.

The loan was extended to August 2022.

In May 2021, we entered into a six-month

convertible loan with an individual in the amount of $ 200,000 .

In May 2021, we entered into a six-month convertible loan with an individual in the amount of $ 200,000 .

The loan had an original maturity of October 2021 with principal and interest due at maturity.

The principal and interest was converted

into shares of common stock in February 2022.

In November 2021, we entered into a one-year

convertible loan with an individual in the amount of $ 300,000 .

The loan expires November 2022 with the principal and interest due at maturity.

notes payable

The principal and interest was converted into shares of common stock in February 2022.

In November 2021, we entered into a one-year convertible loan with an individual in the amount of $ 300,000 .

The principal and interest was converted to shares of common stock in April

Total notes payable

and convertible notes payable

current portion

( 2,171,068 )

( 2,967,812 )

notes payable

Less current portion

Long-term notes payable

and convertible notes payable

expense on notes payable was $ 69,015

for the three months ended March 31, 2022 and

2021, respectively.

Accrued interest was $ 154,209

at March 31, 2022.

and $ 133,702 for

the three months ended June 30, 2022 and 2021, respectively.

Interest expense on notes payable was $ 150,715 and $ 203,236 for

the six months ended June 30, 2022 and 2021, respectively.

Accrued interest was $ 167,449 at

June 30, 2022.

Beverage Group, Inc.

to the Condensed Consolidated Financial Statements

3– Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements and

Bridge Loan Payable, continued

3– Notes Payable and Related Party Notes Payable

Schedule of Related Party Notes Payable

Interest Rate

March 31, 2022

Related Parties Notes Payable

In December 2020, we entered into an 18 month loan with an individual in the amount of $ 2,000,000 .

The loan requires 18 monthly amortized payments of principal and interest in the amount of $ 114,444 with the final payment due June 2022.

Less current portion

Long-term notes payable

expense on related party notes payable was $ 2,602

for the three months ended March 31, 2022 and

2021, respectively.

Accrued interest was $ 0

as of March 31, 2022.

June 30, 2022

Parties Notes Payable

December 2020, we entered into an 18 month loan with an individual in the amount of $ 2,000,000 .

The loan was paid off in June 2022.

current portion

notes payable

expense on related party notes payable was $ 2,805 and

the three months ended June 30, 2022 and 2021, respectively.

Interest expense on related party notes payable was $ 5,407 and

$ 15,839 for the six months ended June 30, 2022 and 2021, respectively.

Accrued interest was $ 0 as

of June 30, 2022.

Beverage Group, Inc.

1 unchanged sentence

4 – Licensing Agreement and Royalty Payable

We have a licensing agreement with ABG TapouT, LLC

(“TapouT”), providing us with licensing rights to the brand “TapouT” on energy drinks, energy shots, water, teas

and sports drinks for beverages sold in the United States of America, its territories, possessions, U.S.

have a licensing agreement with ABG TapouT, LLC (“TapouT”), providing us with licensing rights to the brand

“TapouT” on energy drinks, energy shots, water, teas and sports drinks for beverages sold in the United States of

America, its territories, possessions, U.S.

military bases and Mexico.

the terms of the agreement, we are required to pay a 6% royalty on net sales, as defined.

We are required to make minimum monthly payments

in 2022 and $ 49,500

were no unpaid royalties at March 31, 2022.

We paid the guaranteed minimum royalty payments of $ 163,350

Under the terms of the agreement, we are required to pay a 6%

royalty on net sales, as defined.

We are required to make minimum royalty monthly payments of $ 54,450 in

2022 and $ 49,500 in

were no unpaid royalties at June 30, 2022.

Royalty payments including the minimum totaling $ 381,150

and $ 346,500

for the three-months ended March 31, 2022 and

2021, which is included in general and administrative expenses.

connection with the Copa APA, we acquired the license to certain patents from 1/4 Vin SARL

(“1/4 Vin”) On February 16, 2018, the CdV entered into three separate license

agreements with 1/4 Vin SARL, (1/4 Vin).

were made for the six months ended June 30, 2022 and 2021, respectively, these costs are included in general and administrative

connection with the Copa APA, we acquired the license to certain patents from 1/4 Vin SARL (“1/4 Vin”) On February 16, 2018,

the CdV entered into three separate license agreements with 1/4 Vin SARL, (1/4 Vin).

1/4 Vin has the right to license certain patents

and patent applications relating to inventions, systems, and methods used in our manufacturing

In exchange for notes payable, 1/4 Vin granted us a nonexclusive, royalty-bearing,

non-assignable, nontransferable, terminable license which would continue until the subject

equipment is no longer in service or the patents expire.

Amortization is approximately $31,000

annually until the license agreement is fully amortized.

The asset is being amortized over

and patent applications relating to inventions, systems, and methods used in our manufacturing process.

In exchange for notes payable,

1/4 Vin granted us a nonexclusive, royalty-bearing, non-assignable, nontransferable, terminable license which would continue until the

subject equipment is no longer in service or the patents expire.

Amortization is approximately $31,000 annually until the license agreement

is fully amortized.

The asset is being amortized over a 10 -year useful life.

5– Stockholders’ Equity

March 31, 2021, we issued 168,333 shares

of common stock in exchange for services provided to us.

At September 30, 2021, we issued 2,136,819 shares

of common stock in exchange for services provided to us.

At December 31, 2021, we issued 977,497 shares

of common stock in exchange for services provided to us.

At March 31, 2022, we issued 550,000 shares

of common stock in exchange for services, and 2,300,000 as part of our S3 drawdown and convertible instruments.

three-month-ended March 31, 2022 the shares were valued at a fair market value stock price based on the agreement date.

recognized share-based compensation expense for the three-months ended March 31, 2022 of $ 2,355,542 ,

which is classified within the other general and administrative line on our Condensed Consolidated Statements of

Placement Memorandum (PPM)

January 2021, the Board of Directors approved a private placement offering of 1,212,121

Private Placement Memorandum (PPM)

January 2021, the Board of Directors approved a Private Placement Memorandum (PPM) offering of 1,212,121

shares of the common stock of the Company, $ 0.001

1 unchanged sentence

per share for aggregate gross proceeds of $4,000,000.

As part of the PPM, each

purchaser received a warrant to purchase one share for every two shares purchased.

In February 2021, we completed our PPM by issuing

a total of 1,212,355

of shares and 606,178

warrants receiving gross proceeds of approximately

$ 4,000,000 .

As part of the PPM, each purchaser received a warrant to purchase one

share for every two shares purchased.

In February 2021, the Company issued a total of 1,212,355

shares and 606,178

warrants and received the gross proceeds of approximately $ 4,000,000 .

During the quarter, the Company granted share-based awards to certain officers

and consultants to purchase 146,000 shares of common stock at an exercise price of $ 2.31 .

The options were valued at $ 337,260 .

Beverage Group, Inc.

to the Consolidated Financial Statements

5 – Stockholders’ Equity, continued

On August 2020, the Board adopted the 2020 Stock Incentive

Plan (the “2020 Plan”), which provides for the grant of Options, Restricted Stock Awards, Stock Appreciation Rights, Performance

Units and Performance Bonuses to consultants and eligible recipients.

The total number of shares that may be issued under the 2020 plan

was 2,313,133 at the time the 2020 plan was adopted

The 2020 Plan has an “EVERGREEN” feature,

which provides for the annual increase in the number of shares issuable under the plan by an amount equal to 5% of the number of issued

and outstanding common shares at year end, unless otherwise adjusted by the board.

At January 1, 2021 AND 2022, the number of shares issuable

under the 2020 plan increased by 1,057,852 and 1,679,812 shares, respectively.

During the three-month period ended March 31, 2022,

the company granted 773,596 shares under the 2020 plan.

At March 31, 2022, the total number of awards that may be issued under the 2020

plan was 2,123,703 .

The fair value of stock options recognized in the

period has been estimated using the Black-Scholes option pricing model.

The company did not grant any new options, warrants,

or shares in Q1 2022 that would fall under the 2020 plan.

Advances and Liability to Issue Stock and Warrants

We have various agreements

with consultants in the amount of 0.5 million shares to be issued by in Q2 2022.

The stock price will be valued using

the 10-day average price of the company’s stock from the issuance date.

As part of our private placement memoranda, we owe an investor

33,333 shares at $3.30 of the Company’s common stock which will be issued in Q2 2022.

6 – Related Parties

are related party notes payable of $ 0.3

million outstanding as of March 31, 2022 and

December 31,2021, respectively.

outstanding balance as of June 30, 2022 and $ 653,081

was outstanding as of December 31,2021.

7 – Investment in Salt Tequila USA, LLC

We have a marketing and distribution agreement with

SALT Tequila USA, LLC (“SALT”) for the manufacturing of our Tequila product line in Mexico.

percentage ownership interest in SALT, have the right to increase our ownership to 37.5 %.

This investment is accounted for at cost, due to our inability to exercise significant influence over the assets and operations .

have a marketing and distribution agreement with SALT Tequila USA, LLC (“SALT”) for the manufacturing of our Tequila product

line in Mexico.

have a 22.5 %

percentage ownership interest in SALT and have the right to increase our ownership to 37.5 %.

This investment is accounted for at cost, due to our inability to exercise significant influence over the assets and

Beverage Group, Inc.

2 unchanged sentences

July 2018, we entered into a lease agreement for the right to use and occupy office space.

The lease term commenced July

1, 2018 and is scheduled to expire

months, on June

In July 2021, we executed

a two-year renewal at the same monthly amount.

The lease term commenced July 1, 2018 and

is scheduled to expire after 36 months, on June 30, 2021 .

In July 2021, we executed a two-year renewal at the same monthly amount.

November 2019, we entered into a new lease with Interport Logistics, LLC.

The lease term commenced on November

11, 2019 and is scheduled to expire

The lease term commenced on November 11, 2019 and is scheduled

to expire on November 11, 2022 .

May 2019, we entered into a new lease in Mexico.

The lease commenced May

1, 2019 and is scheduled to expire

after 24 months, on April 1, 2021.

year lease agreement is renewed annually.

1, 2019 and was renewed on

April 1, 2022 for one year.

January 2021, we entered into a lease agreement for the right to use and occupy office space.

The lease term commenced January

18, 2021 and is scheduled to expire

months, on July

18, 2021 and was extended

for 1 one year to

January 2021, we entered into a lease agreement for the right to use and occupy office and manufacturing space.

The lease term commenced

1, 2021 and is scheduled to expire

months, on December

January 1, 2021 and is scheduled to expire after 60 months, on December 31, 2025 .

following table presents the discounted present value of minimum lease payments for our office and warehouses to the amounts reported

as financial lease liabilities on the condensed consolidated balance sheet at March 31, 2022:

Schedule of maturities

of lease liabilities

Future Minimum Lease Payments

Operating Lease

2022 (Nine months remaining)

Amount representing imputed interest

Total operating lease liability

Current portion of operating lease liability

Operating lease liability, non-current

table below presents information for lease costs related to our operating leases at March 31, 2022:

of lease costs

Operating lease cost:

as financial lease liabilities on the condensed consolidated balance sheet at June 30, 2022:

Schedule of maturities of lease liabilities

Undiscounted Future Minimum Lease Payments

2022 (six months)

Amount representing

imputed interest

Total Operating Lease

Current portion operating

lease liability

Operating lease liability,

The table below presents

information for lease costs related to our operating leases at June 30, 2022

Schedule of lease costs

Amortization of leased assets

1 unchanged sentence

Total operating lease cost

table below presents lease-related terms and discount rates at March 31, 2022:

The table below presents

lease-related terms and discount rates at June 30, 2022

Summary of lease-related terms and discount rates

Summary of lease-related

1 unchanged sentence

Remaining term on leases

Incremented borrowing rate

Beverage Group, Inc.

to the Condensed Consolidated Financial Statements

9 – Business Combination

consummated the acquisition of CdV on December 24, 2020.

The purchase price consideration was comprised of $1.5 million in debt, $0.5

million in cash and $2.0 million in contingent shares, and a note payable for $2.0 million (see note 4) for total consideration of approximately

$6.0 million.

following summarizes our allocation of the updated purchase price for the acquisition:

Schedule of purchase

price for the acquisition

Preliminary Purchase Accounting

Final Purchase Accounting

Accounts receivable, net

Other current assets

Inventory, net

Property and equipment, net

License agreement, net

Customer lists

Total indentifiable assets

Accounts payable and accrued expenses

Total liabilities and equity

borrowing rate

Beverage Group, Inc.

3 unchanged sentences

reporting period, including evaluating the reporting package reviewed by the Chief Executive Officer and Chief Financial Officer.

The CdV business is included in our Splash Beverage Group segment.

The CdV business is included in our Splash Beverage

Group segment.

Schedule of Segment Reporting Information

Three-Months Ended

Six-Months Ended

Splash Beverage Group

Total Revenues continuing operations

Total Revenues discontinuing operations

Splash Beverage Group

Total assets discontinued operations

Total Revenues discontinued operations

Beverage Group

Medical Devices - Discontinued

10 – Commitment and Contingencies

The Company signed an agreement to acquire 80%

of Pulpoloco Sangria in a transaction that will give Splash control over the manufacturing and distribution of Pulpoloco across the US

while adding international markets and capturing the additional margin and revenue.

June 10, 2022, Copa Di Vino Corporation (“Copa”) filed a lawsuit against the

Company in Broward County, Florida.

The complaint alleges that the Company still owes part

of the final payment under the December 24, 2020 Asset Purchase Agreement (“APA”)

between Copa and the Company.

Specifically, Copa maintains that 380,959 shares are owed.

The parties are actively discussing amicable resolution on a framework both sides appear

to be agreeable to.

The Company will vigorously defend the case if a settlement is not reached.

Litigation is uncertain, however, and no particular result can be assured.

are a party to asserted claims and are subject to regulatory actions in the ordinary course of business.

3 unchanged sentences

11– Subsequent Events

to June 30, 2022 the Company's Board approved the issuance of 250,000 shares as a performance

bonus pursuant to a consulting agreement.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements