What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-03-31 · 70 added, 50 removed, 37 unchanged (76% of the section changed)

5 unchanged sentences

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.

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.

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

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.

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.

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

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 WT,” respectively

On November 8, 2021, SBG reincorporated into the State

of Nevada and became a Nevada corporation.

Our principal offices are located at 1314 E.

8 unchanged sentences

Revenues for the year ended December 31, 2022 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.

$18.1m compared to revenues of $11.3m for the year ended December 31, 2021.

The $6.8m increase in sales was mainly due to the increase

in our ecommerce division distribution platform, Qplash of $6.4m.

Cost of Goods Sold

Cost of goods sold for year ended December 31, 2022

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.

were $12.1m compared to cost of goods sold for the year ended December 31, 2021 of $8.3m.

The $4.7m increase in cost of goods sold was

due to our increased sales and inflation.

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.

2022 were $27.3m compared to $33m for the year ended December 31, 2021.

Non cash operating expenses related to share issuance was $7.4m

as of December 31, 2022 compared $18.4m in December 31, 2021.

The cash expense increase of $5.3m is mainly driven by an increase in sales

and marketing cost of $2.0m to drive sales and promote the brands, delivery fees of $2.0m and an increase in Amazon selling fees of $0.6m

associated with higher sales of Qplash division.

Other Income/(Expense)

1 unchanged sentence

were $245,429 compared to $262,450 for the year ended December 31, 2021.

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.

These cost are mainly interest expense.

LIQUIDITY AND CAPITAL RESOURCES

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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.

As of December 31, 2022, we had total cash of $4,431,745,

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

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

1 unchanged sentence

ended December 31, 2021, of $14,697,179.

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.

The primary reason for the change in net cash used due to an increase of $0.4m in operating loss

operating losses of the business, offset by a decrease of $1.2m in working capital Net cash used for discontinued operating activities

during the year ended December 31, 2022, was $32,774 as compared to $515,952 for the year ended December 31, 2021 due to discontinuing

the business on June 30, 2022.

Net cash used for investing activities during the

year ended December 31, 2022, was $102,698 as compared to the net cash used for investing activities during the year ended December 31,

The net cash used in the year 2022 was for a capital expenditure for out of home used for advertising and building improvements.

Net cash provided by financing activities during the

year ended December 31, 2022, was $14,446,951 compared to $19,014,524 provided from financing activities for the year ended December 31,

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.

During the year ended December 31, 2022, we received $11,428,591 from the issuance of common stock compared to $19,630,565 during

the year ending December 31, 2021.

We received $4,045,420 and $928,000 proceeds from the issuance of debt in years ending December 31,

2022 and 2021 respectively.

In the year ending December 31, 2022 $390,500 shareholder advance was repaid and in year ending December 31,

2021 $390,500 cash advance from shareholder was received.

Principal repayment of debt $636,560 and $1,673,296 were made in years ending

December 31, 2022 and 2021 respectively.

In year ending December 31, 2021 a cash advance repayment of $261,245 was made.

In order to have sufficient cash to fund our operations,

we will need to raise additional equity or debt capital.

There can be no assurance that additional funds will be available when needed

from any source or, if available, will be available on terms that are acceptable to us.

We will be required to pursue sources of additional

capital through various means, including debt or equity financings.

Future financings through equity investments are likely to be dilutive

to existing stockholders.

Also, the terms of securities we may issue in future capital transactions may be more favorable for new investors.

Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and

the issuances of incentive awards under equity employee incentive plans, which may have additional dilutive effects.

Further, we may incur

substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing

and distribution expenses and other costs.

We may also be required to recognize non-cash expenses in connection with certain securities

we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.

Our ability to obtain needed

financing may be impaired by such factors as the capital markets and our history of losses, which could impact the availability or cost

of future financings.

If the amount of capital we are able to raise from financing activities together with our revenues from operations,

is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to curtail

or cease operations.

Quantitative and Qualitative Disclosures

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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-K

Item 7. Management’s Discussion and Analysis