What changed in this filing

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Item 1. Financial Statements

2023-06-06 compared with 2022-11-14 · 564 added, 449 removed, 184 unchanged (85% of the section changed)

1 unchanged sentence

Splash Beverage Group, Inc.

Condensed Consolidated Balance Sheets

September 30, 2022 and December 31, 2021

Condensed Consolidated Financial Statements

March 31, 2023

Splash Beverage Group,

Consolidated Balance Sheets

March 31, 2023 and December 31, 2022

Current assets:

and cash equivalents

receivable, net

from discontinued operations

current assets

intangible assets, net

Prepaid expenses

Other receivables

Total current

Non-current assets:

in Salt Tequila USA, LLC

lease right of use asset

and equipment, net

non-current assets

and Stockholders’ Equity (Deficit)

Total non-current

and Stockholders’ Equity

Current liabilities

payable and accrued expenses

of use liability - current

to related parties

party notes payable

payable, current portion

to issue shares

interest payable

from discontinued operations

current liabilities

payable - noncurrent

of use liability - noncurrent

lease liabilities - current

Notes payable,

current portion

Accrued interest

Total current

Long-term liabilities:

Stockholders’

Stock, $ 0.001

Notes payable

lease liabilities - noncurrent

Total long-term

Total liabilities

Stockholders’ equity :

Preferred stock, $ 0.001

par value, 5,000,000

shares authorized, no

shares issued

Common Stock,

par, 300,000,000

shares authorized, 41,085,520

and 33,596,232

shares issued, 41,085,520

and 33,596,232

outstanding, at September 30, 2022 and December

31, 2021, respectively

shares outstanding at March 31, 2023 and December

paid in capital

Comprehensive Income - Translation

other comprehensive loss

( 116,060,325

( 112,331,027

stockholders’ equity

liabilities and stockholders’ equity

The accompanying notes are an integral part of these financial statements.

Total stockholders’

Total liabilities

and stockholders’ equity

The accompanying notes are an integral part

of these condensed consolidated financial statements.

Splash Beverage Group, Inc.

Condensed Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2022 and September 30, 2021

months ended September 30,

of goods sold

share based compensation

general and administrative

and marketing

Consolidated Statements of Operations and Comprehensive Loss

For the Three Months Ended March 31, 2023 and 2022

Three months ended March 31,

Cost of goods sold

Operating expenses:

from continuing operations

income/(expense):

from debt extinguishment

Contracted services

Salary and wages

Non-cash share-based compensation

Other general and administrative

Sales and marketing

Total operating expenses

Loss from continuing operations

Other income/(expense):

for income taxes

loss from continuing operations, net of tax

income (loss) from discontinued operations, net of tax

on sale of discontinued operations

(loss) from discontinued operations, net of tax

per share - continuing operations

average number of common shares outstanding - continuing operations

per share - discontinued operations

average number of common shares outstanding - discontinued operations

The accompanying notes are an integral part of these financial statements.

Amortization of debt discount

Interest expense

Total other expense

Provision for income taxes

Net loss from continuing operations, net of tax

Net loss from discontinued operations, net of tax

Other comprehensive loss foreign currency translation loss, net of tax

Total comprehensive loss

Loss per share - continuing operations

Basic and dilutive

Weighted average number of common shares outstanding - continuing operations

Basic and dilutive

Loss per share - discontinued operations

Basic and dilutive

Weighted average number of common shares outstanding - discontinued operations

Basic and dilutive

The accompanying notes are an integral part

of these condensed consolidated financial statements.

Splash Beverage Group, Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity

For the Three and Nine months ended September, 2022 and 2021

Treasury Stock

Stockholders'

Paid-In Capital

Equity (Deficit)

Balances at December 31, 2020

( 61,589,735 )

( 9,350,724 )

Issuance of warrants for services

Issuance of common stock for services

Issuance of common stock and warrants or cash

Mezzanine shares

( 4,442,219 )

Balances at March 31, 2021

$ ( 66,031,954 )

Issuance of warrants for services

Issuance of common stock for services

Issuance of common stock and warrants or cash

( 6,560,600 )

Balances at June 30, 2021

$ ( 72,592,554 )

Issuance of warrants for services

Issuance of common stock for services

( 12,169,894 )

Balances at September 30, 2021

$ ( 84,762,448 )

Treasury Stock

Stockholders'

Paid-In Capital

Equity (Deficit)

Condensed Consolidated

Statement of Changes in Stockholders’ Equity

For the three months ended March 31, 2023

Common Shares

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

stockholders’ equity

Balances at December 31, 2021

( 90,640,557 )

Issuance of common stock on convertible instruments

Issuance of warrants for services

Issuance of warrants and options for services

Issuance of common stock for services

Issuance of common stock and warrants for cash

( 5,994,407 )

Balances at March 31, 2022

( 96,634,964 )

Issuance of warrants for services

Issuance of common stock for services

Issuance of common stock and warrants for cash

Accumulated Comprehensive Income - Translation

( 5,758,857 )

Balances at June 30, 2022

( 102,400,391 )

Issuance of warrants for services

Issuance of common stock for APA

Issuance of common stock and warrants for cash

Accumulated Comprehensive Income - Translation

( 5,143,801 )

Balances at December 31, 2022

( 112,331,026

Balances at September 30, 2022

Common stock issuable and beneficial conversion feature on convertible 12-month

promissory note

Share based compensation

Accumulated Comprehensive loss – translation, net

Balances at March 31, 2023

( 116,060,325

The accompanying notes are an integral part of these condensed consolidated

financial statements.

Splash Beverage Group, Inc.

Condensed Consolidated Statement Cash Flows

For the Nine -Months Ended September 30, 2022 and 2021

Nine months ended

September 30,

The accompanying notes are an integral part

of these condensed consolidated financial statements.

Splash Beverage Group,

Condensed Consolidated Statement

For the Three Months Ended March

31, 2023 and 2022

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

Amortization of debt discount

ROU assets, net

Beneficial conversion

Liability to issue shares

Other noncash changes

Non-cash share-based compensation

6 unchanged sentences

Net cash used in operating activities - continuing operations

Net cash used in operating activities - discontinued operations

Net cash provided by operating activities - discontinued operations

Cash flows from investing activities:

1 unchanged sentence

Net cash used in investing activities - continuing operations

Net cash used in investing activities - discontinued operations

Cash flows from financing activities:

1 unchanged sentence

Cash advance from shareholder

Repayment of cash advance

Proceeds from issuance of debt

Proceeds from convertible 12-month promissory note and 1,500,000 restricted shares

Principal repayment of debt

ROU liability

Net cash provided by financing activities - continuing operations

Net cash provided by financing activities - discontinued operations

Net cash effect of exchange rate changes on cash

Net change in cash and cash equivalents

Cash and cash equivalents, beginning of year

Cash and Cash Equivalents, end of year

Cash and cash equivalents, end of period

Supplemental disclosure of cash flow information:

Cash paid for Interest

Supplemental Disclosure

of Non-Cash Investing and Financing Activities:

Supplemental disclosure of non-cash investing and financing activities

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

Liability issued for investment in SALT Tequila USA, LLC

The accompanying notes are an integral part of these consolidated financial

Non-cash debt discount in the form of issuance of shares and beneficial

conversion feature in conjunction with convertible notes

The accompanying notes are an integral part

of these condensed consolidated financial statements.

Splash Beverage Group, Inc.

1 unchanged sentence

Note 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 B2B and B2C 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 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

On 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

$ 148,747 for the nine months ended September 30, 2022.

In coordination with uplisting to the NYSE on

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

All common stock shares stated herein have been adjusted

on a retrospective basis to reflect the split.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Beverage Group, Inc.

(the “Company”, “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.

Through its division Qplash, Splash’s distribution reach

includes e-commerce access to both business-to-business (B2B) and business-to-consumer (B2C) customers.

Qplash markets well known beverage

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

Summary of Significant Accounting Policies

of Accounting

accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted

in the United States (“U.S.

GAAP”), and the requirements of the U.S.

Securities and Exchange Commission (the “SEC”)

for interim reporting.

As permitted under those rules, certain footnotes or other financial information that are normally required by

GAAP can be condensed or omitted.

Accordingly, they do not include all of the information and footnotes normally included in financial

statements prepared in conformity with U.S.

They should be read in conjunction with the consolidated financial statements and notes

thereto included in the Company’s 2022 Annual Report on Form 10-K, filed with the SEC on March 31,2023 (the “Form 10-K”).

accompanying condensed consolidated financial statements are unaudited and include all adjustments (consisting of normal recurring adjustments)

that management considers necessary for a fair presentation of its condensed financial position and results of operations for the interim

periods presented.

The results of operations for the interim periods are not necessarily indicative of the results that may be expected

for the entire year.

Basis of Presentation and Consolidation

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.

Our accounting and reporting policies conform

to accounting principles generally accepted in the United States of America (GAAP).

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 nine months

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

These consolidated financial statements include

the accounts of Splash and its wholly owned subsidiaries Splash Beverage Holdings LLC (“Holdings”), Splash International

Holdings LLC (“International”), Splash Mex SA de CV (“Splash Mex”), Canfield Medical Supply, Inc.

(“CMS”) (as discontinued

operations), and Copa di Vino Wine Group, Inc.

(“Copa di Vino”).

All intercompany balances have been eliminated in

consolidation.

Our investment in Salt Tequila USA, LLC is carried

at cost less impairment, the investment does not have a readily determinable fair value.

Certain reclassifications have been made to the

prior period financial statements to conform to the December 31, 2022 audited financial statement and the current period

classifications.

In the three months ending March 31, 2022 the Company reclassified $ 459,260

from cost of goods sold to other general and administrative cost in the condensed consolidated statement of operations and

comprehensive loss, $ 126,437

of shipping and handling and $ 332,823

of Amazon selling fees.

These reclassifications had no impact on net loss.

Use of Estimates

The preparation of condensed consolidated financial

statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of

assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements

statements in conformity with U.S.

GAAP requires our management to make estimates and assumptions that affect the reported amounts of

assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements

and the reported amounts of revenues and expenses during the reporting period.

2 unchanged sentences

of Cash Balance

We consider all highly liquid securities with

an original maturity of three months or less to be cash equivalents.

We had no cash equivalents at September 30, 2022 or December

Our cash in bank deposit amounts, at times, may

exceed federally insured limits of $250,000.

At September 30, 2022 we had $ 2,210,567

in excess of the federally insured limits.

Our bank deposit amounts in Mexico of $ 1,940

are uninsured.

At December 31, 2021 we had $ 3,643,474 over the federally insured limits.

Our cash in uninsured foreign bank accounts

was $ 10,749 at December 31, 2021.

Splash Beverage Group,

Notes to the Condensed Consolidated Financial

The Company considers all highly liquid

securities with an original maturity of three months or less to be cash equivalents.

The Company had no

cash equivalents at March 31, 2023 or December 31, 2022.

The Company cash in bank deposit amounts, at times,

may exceed federally insured limits of $250,000.

At March 31, 2023 the Company had $ 271,743 in excess of the federally insured limits.

bank deposit amounts in Mexico, $ 2,051 , are uninsured.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated

Financial Statements

Note 2 – Summary of Significant

4 unchanged sentences

recoverable amounts and are periodically evaluated for collectability based on past credit history with clients and other factors.

We establish provisions for losses on accounts receivable on the basis of loss experience, known and inherent risk in the account

Company establishes provisions for losses on accounts receivable on the basis of loss experience, known and inherent risk in the account

balance, and current economic conditions.

At September 30, 2022 and December 31, 2021, our accounts receivable amounts are reflected

net of allowances of $ 13,827 and $ 45,203 , respectively.

Inventory is stated at the lower of cost or

net realizable value and accounted for using the weighted average cost method.

The inventory balances at September 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.

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 $ 67,170 and $ 223,223 at September 30, 2022

and December 31, 2021, respectively.

At March 31, 2023 and December 31, 2022, our accounts receivable amounts are reflected net

of allowances of $ 13,797

and $ 13,683 ,

respectively.

Inventory 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, 2023 and December 31, 2022 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.

The Company 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.

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

amount of our reserve was $ 0 and $ 66,146 at March 31, 2023 and December

31, 2022, respectively.

Property and Equipment

We record property and equipment at cost when

The Company record property and equipment at cost when

Depreciation is recorded for property, equipment, and software using the straight-line method over the estimated economic

3 unchanged sentences

not be recoverable.

Furniture and computer equipment of $ 60,626 was no longer in use and written off as of September 30, 2022.

Depreciation expense totaled $ 46,701 and $ 30,695

for the three months ended September 30, 2022 and September 30, 2021, respectively.

Depreciation expense totaled $ 101,991 and $ 80,048

for the nine months ended September 30, 2022 and September 30, 2021, respectively.

Property and equipment as of September 30, 2022

and December 31, 2021 consisted of the following:

for the three months ended March 31, 2023 and March 31, 2022, respectively.

Property and equipment as of March 31, 2023 and December

31, 2022 consisted of the following:

Schedule of Property and equipment

September 30, 2022

December 31, 2021

Machinery & equipment

Leasehold improvements

Office Furniture & Fixtures

Property and equipment, at cost

Computer Software

Office furniture & equipment

Accumulated depreciation

1 unchanged sentence

( 1,674,385 )

Property and equipment, net

Property, plant & equipment, net

The Company pays alcohol excise taxes based

2 unchanged sentences

and Trade Bureau (TTB).

The Company is liable for the taxes upon the removal of product from the Company’s warehouse on a

per gallon basis.

The federal tax rate is affected by a small winery tax credit provision which decreases based upon the number

of gallons of wine production in a year rather than the quantity sold.

Splash Beverage Group,

The company also pays taxes to the State of Florida – Division of Alcoholic Beverages and Tobacco.

The Company is liable for the taxes upon the removal of product from the Company’s warehouse on a per gallon basis.

tax rate is affected by a small winery tax credit provision which decreases based upon the number of gallons of wine production

in a year rather than the quantity sold.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

10 unchanged sentences

hierarchy are as follows:

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.

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.

Unadjusted quoted prices

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

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

instruments and listed equities.

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

Unobservable inputs for the asset or

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 September 30, 2022 and December 31, 2021, consistent

on the condensed consolidated financial statements approximate fair values at March 31, 2023 and December 31, 2022, consistent

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

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Notes to the Condensed Consolidated

Financial Statements

Summary of Significant Accounting Policies, continued

Revenue Recognition

We recognize revenue under ASC 606, Revenue

from Contracts with Customers (Topic 606).

This guidance sets forth a five-step model which depicts the recognition of revenue

in an amount that reflects what we expect to receive in exchange for the transfer of goods or services to customers.

We recognize revenue when our performance obligations

under the terms of a contract with the customer are satisfied.

Product sales occur once control of our products is transferred

upon delivery to the customer.

Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring

goods and is presented net of provisions for customer returns and allowances.

The amount of consideration we receive and revenue

we recognize varies with changes in customer incentives we offer to our customers and their customers.

Sales taxes and other similar

taxes are excluded from revenue.

The Company recognizes revenue under ASC 606,

Revenue from Contracts with Customers (Topic 606).

This guidance sets forth a five-step model which depicts the recognition of

revenue in an amount that reflects what the Company expects to receive in exchange for the transfer of goods or services to customers.

The Company recognizes revenue when the Company’s performance

obligations under the terms of a contract with the customer are satisfied.

Product sales occur for the Splash Beverage and E-commerce

businesses once control of the Company’s products are transferred upon delivery to the customer.

Revenue is measured as the amount

of consideration that the Company expects to receive in exchange for transferring goods, and revenue is presented net of provisions for

customer returns and allowances.

The amount of consideration the Company receives and revenue the Company recognizes varies with changes

in customer incentives offered to the Company’s customers and their customers.

Sales taxes and other similar taxes are excluded

from revenue.

Shipping and Handling —The Company

includes costs associated with the outbound shipping and handling of finished goods as a component of other general and administrative

expenses in the consolidated statements of operations and comprehensive loss.

Shipping and handling are not separately billed to

the customers and are included in fees charged to the customer and are recorded as revenue when earned.

Cost of Goods Sold

Cost of goods sold include the costs of products,

packaging, transportation, warehousing, and costs associated with valuation allowances for expired, damaged or impaired inventory.

Distribution expenses to transport our finished

goods, where applicable, and warehousing expense are accounted for within cost of goods.

Cost of goods sold include the costs of

products, packaging, transportation, warehousing, and costs associated with valuation allowances for expired, damaged or

impaired inventory.

In the three months ending March 31, 2022 the Company reclassified $ 459,260 from cost of goods sold to

other general and administrative cost in the condensed consolidated statement of operations and comprehensive loss, $ 126,437

of shipping and handling and $ 332,823

of Amazon selling fees.

Other General and Administrative Expenses

Other General and Administrative expenses includes

Amazon selling fees, royalty cost for selling TapouT, cost associated with the outbound shipping and handling of finished goods,

insurance cost, consulting cost, legal and audit fees, Investor Relations expenses, travel & entertainment expenses, occupancy

cost and other cost.

Company incurred $ 1,374,328

and $ 803,318

of shipping and handling costs for the three

months ending March 31, 2023 and 2022 respectively.

These amounts, which primarily relate to shipping, are recorded in other general

and administrative expenses.

Stock-Based Compensation

We account for stock-based compensation in

accordance with ASC 718, ” Compensation - Stock Compensation” .

The Company accounts for stock-based compensation

in accordance with ASC 718, ” Compensation - Stock Compensation” .

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 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

We use the liability method of accounting for

income taxes as set forth in ASC 740, ” Income Taxes” .

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.

The Company uses the Black-Scholes option pricing model to determine the

fair value of stock-based awards.

The Company 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

The Company uses the liability method of accounting

for income taxes as set forth in ASC 740, ” Income Taxes” .

Under the liability method, deferred taxes are determined

based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected

to be in effect during the years in which the basis differences reverse.

We record a valuation allowance when it is more likely

than not that the deferred tax assets will not be realized.

based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to

be in effect during the years in which the basis differences reverse.

The Company records a valuation allowance when it is not more likely

than not that the deferred tax assets will be realized.

Company management assesses its income tax

4 unchanged sentences

than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

For 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 September 30, 2022 and December 31, 2021.

For those income tax positions where there is less

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, 2023 and December 31, 2022.

The Company’s

federal, state and local income tax returns prior to fiscal year 2019 are closed and management continually evaluates expiring

statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

The Company recognizes interest and penalties associated

with tax matters, if any, as part of operating expenses and includes accrued interest and penalties with accrued expenses in the condensed

interim balance sheets.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Notes to the Condensed Consolidated

Financial Statements

Note 2 – Summary of Significant

6 unchanged sentences

in the computation if the effect would be anti-dilutive.

We conduct advertising for the promotion of

our products.

The Company conducts advertising for the

promotion of its products.

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

We recorded advertising

and marketing expense of $ 746,965 and $ 249,100 for the three-months ended September 30, 2022 and 2021, respectively.

advertising and marketing expense of $ 1,918,420 and $ 465,705 for the nine months ended September 30, 2022 and 2021, respectively.

recorded advertising expense of $ 195,048

for the three months ended March 31, 2023 and 2022, respectively.

Goodwill and Intangibles Assets

10 unchanged sentences

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.

brands and license agreements acquired in the acquisition of Copa Di Vino.

The Company amortizes intangible assets with finite

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

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Notes to the Condensed Consolidated

Financial Statements

Note 2 – Summary of Significant

1 unchanged sentence

Long-lived assets

The Company evaluates long-lived assets for

impairment on an annual basis when relocating or closing a facility, or when events or changes in circumstances may indicate the

carrying amount of the asset group, generally an individual warehouse, may not be fully recoverable.

For asset groups held and

used, including warehouses to be relocated, the carrying value of the asset group is considered recoverable when the estimated

future undiscounted cash flows generated from the use and eventual disposition of the asset group exceed the respective carrying

In the event that the carrying value is not considered recoverable, an impairment loss is recognized for the asset group

to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group.

For asset groups

classified as held-for-sale (disposal group), the carrying value is compared to the disposal group’s fair value less costs

The Company evaluates long-lived assets for impairment

when events or changes in circumstances may indicate the carrying amount of the asset group, generally an individual warehouse, may not

be fully recoverable.

For asset groups held and used, including warehouses to be relocated, the carrying value of the asset group is considered

recoverable when the estimated future undiscounted cash flows generated from the use and eventual disposition of the asset group exceed

the respective carrying value.

In the event that the carrying value is not considered recoverable, an impairment loss is recognized for

the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group.

groups classified as held-for-sale (disposal group), the carrying value is compared to the disposal group’s fair value less costs

The Company estimates fair value by obtaining market appraisals from third party brokers or using other valuation techniques.

The Company discloses a measurement of segment profit

or loss that its chief operating decision maker (CODM) uses to assess segment performance and to make decisions about resource allocations

for each reportable segment.

Recent Accounting Pronouncements

Management does not believe that any other

recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements.

As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.

Reclassifications

Certain prior period amounts have been reclassified

to conform with the current year presentation.

On January 1, 2023, the Company adopted FASB issued

2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires the immediate recognition

of management’s estimates of current and expected credit losses.

Adoption of this standard did not have a material impact on the

Company’s condensed consolidated financial statements or disclosures.

Management does not believe that any recently issued,

but not yet effective, accounting standards could have a material effect on the accompanying financial statements.

As new accounting pronouncements

are issued, the Company will adopt those that are applicable under the circumstances.

Foreign Currency Gains/Losses

Foreign Currency Gains/Losses —

foreign subsidiaries’ functional currency is the local currency of operations and the net assets of foreign operations

are translated into U.S.

dollars using current exchange rates.

Gains or losses from these translation adjustments are

included in the condensed consolidated statement of operations and other comprehensive loss as foreign currency translation

gains or losses.

Translation gains and losses that arise from the translation of net assets from functional currency to the

reporting currency, as well as exchange gains and losses on intercompany balances, are included in foreign currency

translation in the condensed consolidated statement of operations and comprehensive loss.

The Company incurred foreign

currency translation net loss of $ 1,609 and

the three months ending March 31, 2023 and 2022 respectively.

and Going Concern Considerations

These condensed consolidated financial statements have been prepared assuming

the Company will be able to continue as a going concern.

The Company historically has incurred significant losses and negative cash flows

from operation since inception and had net-loss of approximately $3.7 million for three-month period ended March 31, 2023 and accumulated

deficit of approximately $116.1 million through March 31, 2023.

During the three-month period ended March 31, 2023, the Company’s

net cash used in operating activities totaled approximately $4.1 million.

If sales volumes do not meet the Company’s projections, expenses

exceed the Company’s expectations, or the Company’s plans change, the Company may be unable to generate enough cash flow from

operations to cover our working capital requirements.

In such case, the Company may be required to adjust its business plan, by reducing

marketing, lower its working capital requirements and reduce other expenses or seek additional financing.

In order to have sufficient cash to fund our operations, the Company 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.

The Company 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 the Company 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.

Company 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.

The Company may also be required to recognize non-cash expenses in connection

with certain securities the Company 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 the Company is 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 the Company reduce our operations

accordingly, the Company may be required to curtail or cease operations.

As a result, there is uncertainty regarding the Company’s ability

to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the Company’s ability

to continue as a going concern for at least twelve months from the date of the consolidated financial

statements being available to be issued.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Note 3 – Notes Payable and Related

Party Notes Payable

Notes to the Condensed Consolidated

Financial Statements

Note 3 – Notes Payable, Related

Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements and Bridge Loan Payable

Notes payable are generally nonrecourse and

secured by all Company owned assets.

Interest Rate

September 30, 2022

December 31, 2021

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 .

In March 2014, the Company 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.

The loan matured and remains in default.

In September 2021, we entered into a twelve-month loan with a company in the amount of $ 208,000 .

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 .

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

The loan was extended to January 2023.

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 January 2023

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

The loan and interest was paid off in February 2023

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

loan requires payments of 3.75% through November 2022 and 4.00% through September 2025 of the previous month’s revenue.

is due September 2025.

Note is guaranteed by a related party see note 6.

In April 2021, the Company entered into a six-month 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 January 2023.

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

The loan was extended to October 2023.

In April 2021, the Company entered into a six-month 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 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 was extended to October 2023.

In May 2021, the Company entered into a six-month 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 January 2023

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

The loan was extended to October 2023.

In May 2021, the Company entered into a six-month 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 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 2022.

In August 2022, we entered into an 56-month auto loan in the amount of $ 45,420 .

The loan was extended to October 2023.

In August 2022, the Company entered into a 56-months auto loan in the amount of $ 45,420 .

In December 2022, the Company entered into an eighteen-month loan with an individual in the amount of $ 100,000 .

The note included 100% warrant coverage.

The loan matures in June 2024 with principal and interest due at maturity.

In December 2022, the Company entered into an eighteen-month loan with an individual in the amount of $ 250,000 .

The note included 100% warrant coverage.

The loan matures in June 2024 with principal and interest due at maturity.

In In December 2022, the Company entered into an eighteen-month loan with an individual in the amount of $ 1,000,000 .

The note included 100% warrant coverage.

The loan matures in June 2024 with principal and interest due at maturity.

In December 2022, the Company entered into an eighteen-month loan with an individual in the amount of $ 250,000 .

The note included 100% warrant coverage.

The loan matures in June 2024 with principal and interest due at maturity.

In December 2022, the Company entered into an eighteen-month loan with an individual in the amount of $ 250,000 .

The note included 100% warrant coverage.

The loan matures in June 2024 with principal and interest due at maturity.

In December 2022, the Company entered into an eighteen-month loan with an individual in the amount of $ 250,000 .

The note included 100% warrant coverage.

The loan matures in June 2024 with principal and interest due at maturity.

In December 2022, the Company entered into an eighteen-month loan with an individual in the amount of $ 400,000 .

The note included 100% warrant coverage.

The loan matures in June 2024 with principal and interest due at maturity.

In December 2022, the Company entered into an eighteen-month loan with an individual in the amount of $ 1,500,000 .

The note included 100% warrant coverage.

The loan matures in June 2024 with principal and interest due at maturity.

In February 2023, the Company entered into a twelve-month loan with an entity in

the amount of $ 2,000,000 .

The convertible note included 750 additional shares for each $ 1,000

The loan matures in February 2024.

Total notes payable

and convertible notes payable

Less notes discount

( 3,437,072 )

( 1,898,265 )

Less current portion

( 1,275,540 )

( 1,080,257 )

Long-term notes payable

and convertible notes payable

Interest expense on notes payable was $ 167,121

and $ 82,871 for the three months ended September 30, 2022 and 2021, respectively.

Interest expense on notes payable was $ 217,123

and $ 340,653

for the nine months ended September 30, 2022 and 2021 respectively.

Accrued interest was $ 183,553 at September 30, 2022.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Note 3– Notes Payable and Related

Party Notes Payable

Schedule of related party notes payable

Interest Rate

September 30, 2022

December 31, 2021

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 was paid off in June 2022.

Less current portion

Long-term notes payable

Interest expense on related party notes payable

was $ 0 and $ 5,995 for the three months ended September 30, 2022 and 2021, respectively.

Interest expense on related party notes

payable was $ 5,407 and $ 21,833 for the nine months ended September 30, 2022 and 2021, respectively.

Accrued interest was $ 0 as

of September 30, 2022.

and $ 81,700 for the three months ended March 31, 2023 and 2022, respectively.

Accrued interest was $ 123,990 at March 31, 2023.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Notes to the Condensed Consolidated

Financial Statements

Note 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.

military bases

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 2021.

There were no unpaid royalties at September

Royalty payments including the minimum totaling $ 490,050 and $ 445,500 were made for the nine months ended September 30,

2022 and 2021, respectively, these costs are included in general and administrative expenses.

In 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 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 Company has a licensing agreement with ABG TapouT, LLC (“TapouT”),

providing the Company with licensing rights to the brand “TapouT” (i)energy drinks, (ii) energy bars, (iii) coconut water,

(iv) electrolyte gum/chews, (v) energy shakes, (vi) powdered drink mix, (viii) water (including enhanced water), (vii) energy shots, (viii)

teas, and (ix) sports drinks sold in the North America (including US Territories and Military Bases), United Kingdom, Brazil, South Africa,

Australia, Scandinavia, Peru, Colombia, Chile and Guatemala.

The Company is required to pay a 6% royalty on net sales, as defined, and

are required to make minimum monthly payments of $ 55,000 in 2023 and $ 54,450 in 2022.

There were no unpaid royalties at March 31, 2023.

The Company paid the guaranteed minimum royalty payments of $ 165,000

and $ 163,350

for the three months ended March 31, 2023 and 2022 respectively, which is included in general and administrative expenses

in the condensed consolidated statement of operations and comprehensive loss.

In connection with the Copa di Vino APA, the Company acquired the license

to certain patents from 1/4 Vin SARL (“1/4 Vin”) On February 16, 2018, Copa di Vino entered into three separate license agreements

with 1/4 Vin.

1/4 Vin has the right to license certain patents and patent applications relating to inventions, systems, and methods used

in the Company’s manufacturing process.

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

non-assignable, nontransferable, terminable license which would continue until the subject equipment is no longer in service or the patents

Amortization is approximately $31,000 annually until the license agreement is fully amortized in 2027.

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

Note 5– Stockholders’ Equity

During the three-months ended September 30, 2022,

the Company issued 2,000,000 shares of common stock as part of the public offering and 380,959 shares in settlement of litigation.

During the nine-months ended September 30, 2022, the

Company issued 4,300,000 shares of common stock as part of the public offerings, 1,050,000 shares in exchange for services, 380,959 shares

in settlement of litigation, 223,596 shares on convertible instruments, and 100,000 shares for cash.

Private Placement Memorandum (PPM)

In 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 value per share at

a purchase price of $ 3.30 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, the Company issued a total of 1,212,355 shares

and 606,178 warrants and received the gross proceeds of approximately $ 4,000,000 .

In February 2023, the Board of Directors approved

a private placement offering of 2,000,000 shares of the common stock of the Company, $0.001 value per share at a purchase price of $1.00

per share for aggregate gross proceeds of $2,000,000 (“SPA”).

As part of the SPA, each purchaser received additional

restricted shares equal to 750 units for every $1,000 purchased.

Splash Beverage Group, Inc.

Notes to the Consolidated Financial Statements

Note 5 – Stockholders’ Equity,

In July 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, 2022 and 2023,

the number of shares issuable under the 2020 plan increased by 1,679,812 and 2,054,276 shares, respectively.

The following is a summary of the Company’s

stock option activity during the quarter ended March 31, 2023:

Schedule of stock option activity

exercise price of outstanding stock options

Balance – December 31, 2022

Balance – March 31, 2023

Exercisable –

March 31, 2023

During the three-month period ended March 31,

2023, the company granted 65,000 options to new employees under the 2020 plan.

The fair value of stock options granted in the

period has been measured at $ 149,999 using the Black-Scholes option pricing model with the following assumptions:

exercise price

expected life 10

years, expected volatility 228 %, expected dividends 0 %,

risk free rate 3.7 %.

Stock Issuable, Liability to Issue Stock and Shareholder Advances

On February 28, 2023, the Company entered into a securities

purchase agreement (the “Securities Purchase Agreement” or “SPA”) with an investor.

Pursuant to the Securities

Purchase Agreement, the Company issued a non-interest bearing, convertible 12-month promissory note (the “Note”) convertible

for up to 2,000,000 shares of the Company’s common stock and received aggregate gross proceeds of $ 2,000,000 .

The note has a Conversion

Price of $ 1 per share, subject to adjustments as provided in the Note.

Pursuant to the terms of the SPA, the Company is obligated to issue

1,500,000 restricted shares of restricted common stock to the investor at the time of funding of the note, which was not issued by March 31, 2023.

The per share value of the restricted shares at the

date of the SPA was $ 1.36 , the Company’s quoted stock price at that date, representing a total value of $ 2,000,000 .

The restricted

shares have been accounted for as a debt discount.

The debt discount was recorded at $ 1,786,468 , the amount of cash received from the

investor for the Note.

The discount is being amortized as an other expense over the 12 -month term of the Note.

also has an obligation to issue 100,000 shares

of common stock for legal and consulting services provided in connection with a potential acquisition.

These shares were

valued at $ 0.918 per

share, the quoted stock price at the date services were provided.

Outstanding balance for shareholder advances on

March 31, 2023 was $ 200,000 .

Note 6 – Related Parties

There is a $ 75,000 balance due to a related party as of September 30, 2022 and $ 653,081 was

outstanding as of December 31, 2021.

During the normal course of business, the Company

incurred expenses related to services provided by the CEO or Company expenses paid by the CEO, resulting in related party payables.

conjunction with the acquisition of Copa di Vino, the Company also entered into a Revenue Loan and Security Agreement (the “Loan

and Security Agreement”) by and among the Company, Robert Nistico, additional Guarantor and each of the subsidiary guarantors from

time-to-time party thereto (each a “Guarantor”, and, collectively, the “Guarantors”), and Decathlon Alpha IV,

(the “Lender”).

The Note Payable with a balance of $ 876,836

at March 31,2023.

Note 7 – Investment in Salt Tequila

We have a marketing and distribution agreement

The Company has a marketing and distribution agreement

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

We 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 operations.

The Company has a 22.5 %

percentage ownership interest in SALT, this investment is carried at cost less impairment, the investment

does not have a readily determinable fair value.

The Company has the right to increase our ownership to 37.5 %.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Note 8 – Operating Lease Obligations

Effective 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 after

36 months, on June 30, 2021 .

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

A three-year lease was signed

in September 2022.

Effective 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 on November 11,

2022 , at which point it became month-to-month.

Effective May 2019, we entered into a new lease

The lease commenced May 1, 2019 and was renewed on April 1, 2022 for one year.

Effective 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 was extended for 1

18 months to July

Effective January 2021, we entered into a lease

agreement for the right to use and occupy office and manufacturing space.

The lease term commenced January 1, 2021 and is scheduled

to expire after 60 months, on December 31, 2025 .

The 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 September 30, 2022:

Notes to the Condensed Consolidated

Financial Statements

Note 8 – Leases

The Company has various operating lease agreements primarily related to

real estate and office.

The Company’s real estate leases represent a majority of the lease liability.

Lease payments are mainly

Any variable lease payments, including utilities, common area maintenance are expensed during the period incurred.

Variable lease

costs were immaterial for the quarter ended March 31, 2023 and 2022.

A majority of the real estate leases include options to extend the

Management reviews all options to extend at the inception of the lease and account for these options when they are reasonably certain

of being exercised.

Operating lease expense is recognized on a straight-line basis over the

lease term and is included in operating expense on the Company’s condensed consolidated statement of operations and comprehensive

Operating lease cost was $ 93,328

and $ 92,788 during the period ended March 31, 2023 and 2022, respectively.

The following table sets for the maturities of our operating lease

liabilities and reconciles the respective undiscounted payments to the operating lease liabilities in the consolidated balance

sheet at December 31, 2022

Schedule of operating lease liability

Undiscounted Future Minimum Lease Payments

Operating Lease

2022 (three months)

2023 (Nine months remaining)

Amount representing imputed interest

Total operating lease liability

Current portion operating lease liability

Current portion of operating lease liability

Operating lease liability, non-current

The table below presents information for lease

costs related to our operating leases at September 30, 2022

Schedule of lease costs

Operating lease cost:

Amortization of leased assets

Interest of lease liabilities

Total operating lease cost

The table below presents lease-related terms

and discount rates at September 30, 2022

Summary of lease-related terms and discount rates

and discount rates at March 31, 2023:

Summary of lease-related terms and discount rates

1 unchanged sentence

1 to 33 months

Incremented borrowing rate

Incremental borrowing rate

Splash Beverage Group, Inc.

1 unchanged sentence

Note 9 – Segment Reporting

The Company evaluates segment reporting in

accordance with the FASB Accounting Standards Codification Topic 280, Segment Reporting, each 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 Company has two reportable operating segments:

(1) the manufacture and distribution of non-alcoholic and alcoholic brand beverages, and (2) the e-commerce sale of beverages.

These operating

segments are managed separately and each segment’s major customers have different characteristics.

Segment Reporting is evaluated

by our Chief Executive Officer and Chief Financial Officer.

The Copa di Vino business is included

in our Splash Beverage Group segment.

Schedule of Segment Reporting Information

Three-Months Ended

Nine-Months Ended

March 31, 2023

March 31, 2022

Splash Beverage Group

Total net revenues continuing operations

Total net revenues discontinued operations

September 30,

Total revenues, net, continuing operations

Total revenues, net, discontinuing operations

Contribution after Marketing

March 31, 2023

March 31, 2022

Splash Beverage Group

Medical Devices - Discontinued

– Liability to Issue Shares

The Company has obligations to issue shares of its

common stock at September 30, 2022 arising from the following transactions:

· 154,200 shares in connection with the conversion of indebtedness in the

amount of $ 308,400

· Shares equal to $ 150,000 in connection with consulting services provided

· 250,000 shares in connection with consulting services provided

· 5,000 shares in connection with consulting services provided

· 10,000 shares in connection with consulting services provided

$ ( 286,929 )

$ ( 459,775 )

Total contribution after marketing

Contracted services

Salary and wages

Non-cash share-based compensation

Other general and administrative

Loss from continuing operations

$ ( 3,454,921 )

$ ( 5,683,953 )

Splash Beverage Group

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Note 10 – Commitment and Contingencies

We are a party to asserted claims and are subject

The Company is a party to asserted claims and are subject

to regulatory actions in the ordinary course of business.

The results of such proceedings cannot be predicted with certainty, but

we do not anticipate that the outcome, if any, arising out of any such matter will have a material adverse effect on its business,

the Company do not anticipate that the outcome, if any, arising out of any such matter will have a material adverse effect on its business,

financial condition or results of operations.

Note 11 – Subsequent Events

Subsequent to September 30, 2022 the

Company’s Board approved the issuance of 225,000 shares associated with a 3 year contract and 18,519 shares for services.

The Company issued 296,129 shares

upon exercise of the underwriters’ over-allotment that generated gross amount of $459,000.

We have extended a licensing

agreement with ABG TapouT, LLC (“TapouT”) through 2028.

On May 2, 2023 the Company issued 1,500,000 shares

of common stock to the purchaser of the convertible promissory note issued on February 28, 2023.

The Company granted 375,000

options in April to Board Directors and 125,000

options in May to the new Board Director under the 2020 plan.

In May 2023 the Company received

approximately $ 0.8

million from a Private Placement issuance of convertible notes.

The notes have an eighteen-month term, accrue interest at

12.0% are convertible into shares of common stock of the Company at $1.00 per share, and include and 50% warrant coverage.

These notes are part

of a Securities Purchase Agreement to raise up to $ 8.0

million to fund acquisitions, equipment purchases and working capital.

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