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Item 2. Management’s Discussion and Analysis

2022-08-15 compared with 2022-05-16 · 56 added, 70 removed, 39 unchanged (76% of the section changed)

22 unchanged sentences

Financial Statements (unaudited) filed herewith.

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.

On December 24, 2020, SBG consummated an Asset Purchase

Agreement (the “Copa APA”) with Copa di Vino Corporation (“CdV”), to purchase certain assets and assume certain

liabilities that comprise the Copa di Vino business for a total purchase price of $5,980,000, payable in the combination of $2,000,000

in cash (“Cash Consideration”), $2,000,000 convertible promissory note (the “Convertible Note”) to Seller and

a variable number of shares of the Company’s common stock based on a attainment of revenue hurdles.

CdV is one of the leading producers

of premium wine by the glass in the United States with its primary offices and facilities in The Dalles, Oregon.

On February 2021, Management initiated a plan to

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.

On June 30, 2022, Management completed its plan to

divest its CMS business.

CMS was the entity used to execute the reverse merger for Splash to uplist its common stock to NYSE American.

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.

In coordination with uplisting to the NYSE on

June 11, 2021 the Company consummated a 1.0 for 3.0 reverse stock split.

On November 12, 2021 the

Company changed its state of Domicile from Colorado to Nevada.

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

The 2020 Plan has an “EVERGREEN” feature,

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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.

Results of Operations

for the Three Months Ended March 31, 2022 compared to Three Months Ended March 31, 2021.

Revenues for the three months ended March 31, 2022

were $3,926,573 compared to revenues of $2,138,924 for the three months ended March 31, 2021.

The $1,787,649 increase in sales is due

to an increase from CdV ($505105) and within our vertically integrated B2B and B2C e-commerce distribution platform called Qplash ($1,135,233).

Qp;ash sells goods on both Amazon and Shopify.

Cost of goods sold for the three months ended March 31, 2022 were $3,094,571 compared

to cost of goods sold for the three months ended March 31, 2021 of $1,621,504.

The $1,473,066 increase in cost of goods sold for the three-month

period ended March 31, 2022 is primarily due to our increased sales, and as our sales increased, our cost of sales for those sales correspondingly

for the Three and Six Months Ended June 30, 2022 compared to Three and Six Months Ended June 30, 2021.

Net revenues for the three and six months ended June

30, 2022 were higher compared to revenues for the three and six months ended June 30, 2021 due to an increase from our vertically integrated

B2B and B2C e-commerce distribution platform called Qplash (Qplash sells goods on both Amazon and Shopify), increased distribution on

the beverage portfolio and a price increase on CdV.

Cost of Goods Sold

Cost of goods sold for the three and six months ended

June 30, 2022 were higher compared to cost of goods sold for the three and six months ended June 30, 2021.

The increase in cost of goods

sold is primarily due to higher sales at Qplash, incremental volumes in the beverage portfolio and higher supply chain costs on both ingredients

Operating Expenses

Operating expenses for the three months ended March

31, 2022 were $6,515,955 compared to $5,066,349 for the three months ended March 31, 2021.

The $1,449,606 increase in our operating expenses

was primarily a result of recording the warrants issued pursuant to certain private placements conducted by the Company ($888,158), marketing

spend ($633,389) and shipping costs ($296,941) offset by other operating expenses.

The net loss for the three months ended March 31, 2022

was $5,994,407 as compared to a net loss of $4,442,219 for the three months ended March 31, 2021.

The increase in net loss is due to our

increase in operating expenses offset by our increase in revenues.

Operating expenses for the three months ended June

30, 2022 were lower compared to the three months ended June 30, 2021 due to a decrease in share based compensation partially offset by

increases in marketing spend.

Operating expenses for the six months ended June 30, 2022 were higher compared to the six months ended June

30, 2021 driven by an increase in sales and marketing cost partially offset by lower non-cash compensation for services cost

Interest Expense

Interest expenses for the three months ended March

31, 2022 were $85,879 compared to $92,211 for the three months ended March 31, 2021.

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.

of March 31, 2022, we had total cash and cash equivalents of $8,495,672, as compared with $4,181,383 at December 31, 2021.

is primarily due to the gross proceeds of $8,100,000 received from the sale of 2.3 million shares of the Company’s registered common

stock in February 2022 pursuant to the Company’s shelf registration statement on Form S-3.

Interest expenses for the three and six months ended

June 30, 2022 were lower compared to the three and six months ended June 30, 2021 due to the paydown of notes payable.

The net loss for the three months ended June 30, 2022

was lower compared to the three months ended June 30, 2021.

The decrease in the net loss is due to our lower operating expenses and an

increase in revenues.

The net loss for the six months ended June 30, 2022 was higher compared to the six months ended June 30, 2021.

increase in the net loss is due to our higher cost of goods sold and operating expenses against the increase in revenues.

AND CAPITAL RESOURCES

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.

As of June 30, 2022, we had total cash and cash equivalents

of $4,206,208 as compared with $4,181,383 at December 31, 2021.

Net cash used for operating activities during the

three months ended March 31, 2022 was $4,675,886 as compared to the net cash used by operating activities for the three months ended March

six months ended June 30, 2022 was $7,107,851 as compared to the net cash used by operating activities for the six months ended June

30, 2021 of $7,673,122.

The primary reasons for the change in net cash used is due to losses sustained and increases in inventory, offset

by non-cash expenses relating to warrant expense ($1,242,697) and share-based compensation ($1,112,845).

For the period March 31, 2022 and 2021, did not use

or receive cash relating to investing activities.

The primary reasons for the change in net cash used is due to losses sustained, increases in inventory and costs

incurred in connection with the company’s shelf registration statement on Form S-3.

For the period ended June 30, 2022 and 2021, we did

not use or receive cash relating to investing activities.

Net cash provided by financing activities during the

three months ended March 31, 2022 was $8,765,000 compared to $4,505,526 provided from financing activities for the three months ended

March 31, 2021.

During the three months ended March 31, 2022, we received $9,203,074 from investors, which was offset by repayments debt

holders of $437,474.

Share obligation:

company has a obligation to issue 500K

shares to two marketing firms of which the cost associated to 167K shares was accrued for in Q1 2022.

six months ended June 30, 2022 was $7,132,676 compared to $19,477,363 provided from financing activities for the six months ended June

During the six months ended June 30, 2022, we received $9,203,074 from investors from the Company Shelf Registration Statement

on Form S-3, which was offset by repayments to debt holders of $942,398 and financing fees associated with the Shelf Registration Statement

Royalty Payments:

have a licensing agreement with ABG TapouT, LLC (“TapouT”).

Under the licensing agreement, we have minimum royalty payments

to TapouT for the next two years.

We have a licensing agreement with ABG TapouT, LLC

Under the licensing agreement, we have minimum royalty payments to TapouT for $653,400 in 2022.

Purchase Commitments :

Sheet Arrangements

do not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to

have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures

or capital resources.

We do not have any off-balance sheet arrangements

(as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our

financial condition, revenue or expenses, results of operations, liquidity, and capital expenditures or capital resources.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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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 2. Management’s Discussion and Analysis