What changed in this filing

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Item 1. Financial Statements

2023-11-14 compared with 2023-08-14 · 294 added, 282 removed, 537 unchanged (52% of the section changed)

2 unchanged sentences

Condensed Consolidated Financial Statements

June 30, 2023

September 30, 2023

Splash Beverage Group, Inc.

Condensed Consolidated Balance Sheets

June 30, 2023 and December 31, 2022

September 30, 2023 and December 31, 2022

September 30,

December 31, 2022

17 unchanged sentences

Notes payable, current portion

Shareholder advances

Due to related party

Shareholder advance

Accrued interest payable

7 unchanged sentences

Preferred stock, $ 0.001 par value, 5,000,000 shares authorized, no shares issued

Common Stock, $ 0.001 par, 300,000,000 shares authorized, 42,802,186 shares issued, 42,802,186 shares outstanding at June 30, 2023 and 41,085,520 shares issued, 41,085,520 shares outstanding at December 31, 2022

Common Stock, $ 0.001 par, 300,000,000 shares authorized, 42,902,185 shares issued, 42,902,185 shares outstanding at September 30, 2023 and 41,085,520 shares issued, 41,085,520 shares outstanding at December 31, 2022

Additional paid in capital

9 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three and Six Months Ended June 30, 2023 and 2022

Three months ended June 30

Six months ended June 30,

For the Three and Nine Months Ended September 30, 2023 and 2022

Three months ended September 30

Nine months ended September 30,

Cost of goods sold

( 3,847,202 )

( 3,101,807 )

( 11,326,298 )

( 8,886,508 )

Operating expenses:

6 unchanged sentences

Loss from continuing operations

( 4,323,531 )

( 5,110,882 )

( 11,999,801 )

( 16,623,983 )

Other income/(expense):

1 unchanged sentence

Interest expense

Other Income/Expense

Amortization of debt discount

Total other income/(expense)

( 1,125,410 )

( 2,500,065 )

Total other expense

( 1,346,550 )

( 3,009,827 )

Provision for income taxes

Net loss from continuing operations, net of tax

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

( 5,670,081 )

( 5,176,917 )

( 15,009,628 )

( 16,846,659 )

Net loss from discontinued operations, net of tax

Gain on sale of discontinued operations

Income of discontinued operations

Other Comprehensive Income (Loss)

Foreign currency translation loss

Total Comprehensive Income (Loss)

Income (Loss) from discontinued operations

$ ( 5,670,081 )

$ ( 5,143,801 )

$ ( 15,009,628 )

$ ( 16,897,065 )

Other Comprehensive Income

Foreign currency translation Income

Total Comprehensive Loss

$ ( 5,640,675 )

$ ( 5,143,801 )

$ ( 14,997,604 )

$ ( 16,897,065 )

Loss per share - continuing operations

7 unchanged sentences

Statement of Changes in Stockholders’ Equity

For the Three and Six months ended June

For the Three and Nine months ended September

30, 2023 and 2022

Treasury Stock

Additional Paid-In

Stockholders’ Equity

Accumulated Other

Stockholders'

Comprehensive

Paid-In Capital

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

2 unchanged sentences

Accumulated Comprehensive Income - Translation

( 5,758,857 )

Balances at June 30, 2022

( 102,393,821

Issuance of warrants for services

Issuance of common stock for APA

Issuance of common stock and warrants for cash

Accumulated Comprehensive Income - Translation

Balances at September 30, 2022

( 107,537,622

Balances at December 31, 2022

2 unchanged sentences

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

Share based compensation

Issuance of warrants for services

Accumulated Comprehensive loss – translation, net

14 unchanged sentences

$ ( 121,670,574 )

Debt discount from convertible instrument

Share based compensation

Issuance of common stock for services

Issuance of warrants on convertible instruments

Accumulated Comprehensive loss – translation, net

Balances at September 30, 2023

( 127,340,655

The accompanying notes are an integral part

2 unchanged sentences

Condensed Consolidated Statement Cash Flows

For the Six Months Ended June 30, 2023 and 2022

For the Nine Months Ended September 30, 2023 and 2022

$ ( 15,009,628 )

$ ( 16,897,065 )

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

Adjustments to reconcile

net loss to net cash used in operating activities:

Depreciation and amortization

1 unchanged sentence

ROU assets, net

Gain from sale of discontinued operation

Common stock issued for services

Non-cash financing service

Loss (gain) from sale

of discontinued operation

Common stock issued for

Non-cash share-based compensation

Changes in working capital items:

Changes in working capital

Accounts receivable, net

Inventory, net

Prepaid expenses and other current assets

Accounts payable and accrued expenses

( 1,660,852 )

Prepaid expenses and other

current assets

Accounts payable and accrued

Accrued interest payable

Net cash used in operating activities - continuing operations

Net cash used in operating activities - continuing

( 8,503,765 )

2 unchanged sentences

Capital expenditures

Net cash used in investing activities - continuing operations

Net cash used in investing activities - continuing

Cash flows from financing activities:

Proceeds from issuance of common stock

Cash advance from related party

Proceeds from issuance

of common stock

Cash advance from related

Cash advance from shareholder

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

Principal repayment of debt

Net cash provided by financing activities - continuing operations

Net cash effect of exchange rate changes on cash

Proceeds from issuance

Principal repayment of

( 1,285,861 )

Net cash provided by financing activities -

continuing operations

Net cash effect of exchange rate changes on

Net change in cash and cash equivalents

( 4,335,624 )

( 1,580,113 )

Cash and cash equivalents, beginning of year

Cash and cash equivalents, end of period

Supplemental disclosure of cash flow information:

disclosure of cash flow information:

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)

Non-cash debt discount in the form of issuance of shares and beneficial conversion feature in conjunction with convertible notes

disclosure of non-cash investing and financing activities

Notes payable and accrued

interest converted to common stock (223,596 shares)

Non-cash debt discount

in the form of issuance of equity instruments and beneficial conversion feature in conjunction with convertible notes

The accompanying notes are an integral part

15 unchanged sentences

Basis of Accounting

The 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

The accompanying condensed consolidated financial

statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.

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 U.S.

GAAP can be condensed or omitted.

Accordingly, they do not include all

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”).

under those rules, certain footnotes or other financial information that are normally required by U.S.

GAAP can be condensed or

Accordingly, they do not include all 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”).

The accompanying condensed consolidated financial

5 unchanged sentences

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.

(as discontinued operations), and Copa di Vino Wine Group, Inc.

(“Copa di Vino”).

All intercompany balances have been

eliminated in consolidation.

Holdings LLC (“International”), Splash Mex SA de CV (“Splash Mex”) and Copa di Vino Wine Group, Inc.

Canfield Medical Supply, Inc.

(as discontinued operations), was consolidated until September 30, 2022.

All intercompany balances have been eliminated

in consolidation.

Splash Beverage Group, Inc.

5 unchanged sentences

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

In the three months ended June 30, 2022, the Company reclassified $ 676,510 from cost of goods sold to other general and administrative

In the three months ended September 30, 2022, the Company reclassified $ 617,553 from cost of goods sold to other general and administrative

cost in the condensed consolidated statement of operations and comprehensive loss, which consisted of $ 176,504 of shipping and

handling and $ 441,049 of Amazon selling fees.

In the six months ended June 30, 2022, the Company reclassified $ 1,135,655 from cost

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

In the nine months ended September 30, 2022, the Company reclassified $ 1,753,208

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

loss, which consisted of $ 602,479 of shipping and handling and $ 1,150,729 of Amazon selling fees.

12 unchanged sentences

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

The Company had no cash equivalents at June 30, 2023

The Company had no cash equivalents at September 30,

2023 or December 31, 2022.

The Company’s cash on deposit with financial

institutions, at times, may exceed federally insured limits of $250,000.

At June 30, 2023 the Company had $ 56,836 in excess of

the federally insured limits.

The Company bank deposit amounts in Mexico of $ 2,168 , are uninsured.

At September 30, 2023 the Company’s cash

on deposit with financial institutions, at times, had not exceed federally insured limits of $ 250,000 .

Splash Beverage Group, Inc.

9 unchanged sentences

the account balance, and current economic conditions.

At June 30, 2023 and December 31, 2022, our accounts receivable amounts are

reflected net of allowances of $ 24,045 and $ 13,683 , respectively.

At September 30, 2023 and December 31, 2022, our accounts receivable amounts

are reflected net of allowances of $ 14,634 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 June 30, 2023 and December

The inventory balances at September 30, 2023 and December

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

10 unchanged sentences

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

The amount of our reserve was $ 0 and $ 66,146 at

June 30, 2023 and December 31, 2022, respectively.

The amount of our reserve was $ 253,603 and $ 66,146

at September 30, 2023 and December 31, 2022, respectively.

Property and Equipment

7 unchanged sentences

Depreciation expense totaled $ 38,242 and $ 27,762

for the three months ended June 30, 2023 and June 30, 2022, respectively.

For the six months ended June 30, 2023 and June 30,

2022 depreciation expense totaled $ 78,366 and $ 74,229 respectively.

Property and equipment as of June 30, 2023 and December 31,

2022 consisted of the following:

for the three months ended September 30, 2023 and September 30, 2022, respectively.

For the nine months ended September 30, 2023

and September 30, 2022 depreciation expense totaled $ 98,285 and $ 101,991 respectively.

Property and equipment as of September

30, 2023 and December 31, 2022 consisted of the following:

Schedule of property and equipment

34 unchanged sentences

The liabilities and indebtedness presented

on the condensed consolidated financial statements approximate fair values at June 30, 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.

on the condensed consolidated financial statements approximate fair values at September 30, 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.

9 unchanged sentences

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.

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.

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.

taxes and other similar taxes are excluded from revenue.

Cost of Goods Sold

3 unchanged sentences

Other General and Administrative expenses include

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, shipping

and handling cost and other cost.

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, shipping and handling cost and other cost.

Splash Beverage Group, Inc.

1 unchanged sentence

Consolidated Financial Statements

and Handling Costs

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.

Shipping and Handling Costs

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.

The Company incurred $ 1,279,189 and $ 1,268,636

of shipping and handling costs for the three months ending June 30, 2023 and 2022 respectively.

of shipping and handling costs for the three months ending September 30, 2023 and 2022 respectively.

The Company incurred $ 4,016,394

and $ 1,992,630 of shipping and handling costs for the six months ending June 30, 2023 and 2022 respectively.

These amounts, which

primarily relate to shipping, are recorded in other general and administrative expenses.

and $ 3,261,266 of shipping and handling costs for the nine months ending September 30, 2023 and 2022 respectively.

These amounts,

which primarily relate to shipping, are recorded in other general and administrative expenses.

Stock-Based Compensation

21 unchanged sentences

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, 2023 and December 31, 2022.

Company management has determined that there are no material uncertain tax positions at September 30, 2023 and December 31, 2022.

The Company’s federal, state and local

19 unchanged sentences

For the three months

ended June 30, 2023 and June 30, 2022 the Company recorded advertising expenses of $ 194,415 and $ 131,327 , respectively.

recorded advertising expense of $ 389,462 and $ 218,917 for the six months ended June 30, 2023 and 2022, respectively.

ended September 30, 2023 and September 30, 2022 the Company recorded advertising expenses of $ 248,512 and $ 746,965 , respectively.

The Company recorded advertising expense of $ 1,075,127 and $ 1,918,420 for the nine months ended September 30, 2023 and 2022, respectively.

Goodwill and Intangibles Assets

46 unchanged sentences

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

In October 2021, the FASB issued ASU 2021-08, Business Combinations

- Accounting for contract assets and contract liabilities from contracts with customers (Topic 805), which requires contract assets

and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date

in accordance with Revenues from contracts with customers (Topic 606).

For public companies, the guidance is effective for fiscal

years beginning after December 15, 2022, and interim periods within those fiscal years.

The Company adopted the guidance during

fiscal year 2023.

The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

Foreign Currency Gains/Losses

4 unchanged sentences

consolidated statement of operations and other comprehensive loss as foreign currency translation gains or losses.

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 $ 15,773 and $ 6,570 for the

three months ended June 30, 2023 and 2022 respectively and net loss of $ 17,382 and $ 6,570 for the six months ending June 30, 2023

and 2022 respectively.

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 gain of $ 13,632

for the three months ended September 30, 2023 and 2022 respectively and net gain of $ 12,023

and net loss of $2,225 ( 2,225 )

for the nine months ending September 30, 2023 and 2022 respectively.

Splash Beverage Group, Inc.

5 unchanged sentences

The Company historically has incurred significant

losses and negative cash flows from operation since inception and had net-loss of approximately $9.3 million for six-month period

ended June 30, 2023 and accumulated deficit of approximately $121.7 million through June 30, 2023.

During the six-month period

ended June 30, 2023, the Company’s net cash used in operating activities totaled approximately $6.5 million.

losses and negative cash flows from operation since inception and had net-loss of approximately $15 million for nine-month period

ended September 30, 2023 and accumulated deficit of approximately $127.3 million through September 30, 2023.

During the nine-month

period ended September 30, 2023, the Company’s net cash used in operating activities totaled approximately $8.5 million.

If sales volumes do not meet the Company’s

33 unchanged sentences

Consolidated Financial Statements

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

Note 3 – Notes Payable, Related

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

Notes payable are generally non-recourse and

1 unchanged sentence

Schedule of notes payable

September 30,

Notes Payable and Convertible Notes Payable

7 unchanged sentences

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 with conversion price of $ 3.30 per share.

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 with conversion price of $ 3.30 per share.

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 with conversion price of $ 3.30 per share.

The loan was extended to October 2023.

In April 2021, the Company entered into various six-month loans with individuals totaling in the amount of $ 168,000 .

The loans had an original maturity of October 2021 with principal and interest due at maturity with conversion price of $ 3.30 per share.

The loans were extended to March 31, 2024.

In May 2021, the Company entered into various six-month loans with individuals totaling in the amount of $ 60,000 .

The loans had an original maturity of October 2021 with principal and interest due at maturity with conversion price of $ 3.30 per share.

The loans were extended to March 31, 2024.

Splash Beverage Group, Inc.

1 unchanged sentence

Consolidated Financial Statements

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 with conversion price of $ 3.30 per share.

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 with conversion price of $ 1.00 per share .

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 with conversion price of $ 1.00 per share.

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 with conversion price of $ 1.00 per share.

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 with conversion price of $ 1.00 per share .

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 with conversion price of $ 1.00 per share.

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 with conversion price of $ 1.00 per share .

Splash Beverage Group, Inc.

Notes to the Condensed

Consolidated Financial Statements

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 with conversion price of $ 1.00 per share.

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 with conversion price of $ 1.00 per share.

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 purchased.

The loan matures in February 2024 with conversion price of $ 1.00 per share.

In May 2023, the Company entered into an eighteen-month loan with an individual in the amount of $ 100,000 .

The note included 50 % warrant coverage.

The loan matures in November 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share .

In May 2023, the Company entered into an eighteen-month loan with an individual in the amount of $ 400,000 .

The note included 50 % warrant coverage.

The loan matures in November 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share.

In May 2023, the Company entered into an eighteen-month loan with an individual in the amount of $ 200,000 .

The note included 50 % warrant coverage.

The loan matures in November 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share .

In May 2023, the Company entered into an eighteen-month loan with an individual in the amount of $ 100,000 .

The note included 50 % warrant coverage.

The loan matures in November 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share .

In December 2022, the Company entered into various eighteen-month loans with individuals totaling in the amount of $ 4,000,000 .

The notes included 100 % warrant coverage.

The loans mature in June 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share .

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 the issuance of 1,500,000 shares of

common stock .

The loan matures in February 2024 with conversion price of $ 0.85

per share and is non-interest bearing

In May 2023, the Company entered into various eighteen-month loans with

individuals totaling in the amount of $ 800,000 .

The notes included 50 %

warrant coverage.

The loans mature in November 2024 with principal and interest due at maturity with

conversion price of $ 1.00

Splash Beverage Group, Inc.

1 unchanged sentence

Consolidated Financial Statements

In June 2023, the Company entered into an eighteen-month loan with an individual in the amount of $ 250,000 .

In June 2023, the Company entered into various eighteen-month loans with individuals totaling in the amount of $ 350,000 .

The notes included 50 % warrant coverage.

The loans mature in December 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share.

In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $ 750,000 .

The note included 100 % warrant coverage.

The loan matures in December 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share .

In June 2023, the Company entered into an eighteen-month loan with an individual in the amount of $ 100,000 .

The loan matures in July 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share.

In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $ 100,000 .

The note included 100 % warrant coverage.

The loan matures in December 2024 with principal and interest due at maturity with conversion price of $ 1.00 per share .

The loan matures in January 2025 with principal and interest due at maturity with conversion price of $ 1.00 per share.

In August 2023, the Company entered into a twelve-month loan

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

The convertible note included the issuance of 150,000 shares of common stocks.

The loan matures in August 2024 with principal and

interest due at maturity with conversion price of $ 0.85

per share and is non-interest bearing.

Total notes payable

Less notes discount

( 3,099,940 )

( 1,898,265 )

Less current portion

( 5,548,830 )

( 1,080,257 )

Long-term notes payable

Interest expense on notes payable was $ 170,078

for the three months ended June 30, 2023 and 2022, respectively.

Interest expense on notes payable was $ 333,985

and $ 150,715

for the six months ended June 30, 2023 and 2022, respectively.

Accrued interest was $ 137,743 and $ 300,658

for the three months and six months ended June 30, 2023.

The Company’s effective interest rate was 33 % for the six months

ended June 30, 2023.

As of June 30, 2023, the Company’s

convertible note balances are convertible into 7,697,968

shares of common stock.

expense on notes payable was $ 207,087 and

the three months ended September 30, 2023 and 2022, respectively.

Interest expense on notes payable was $ 546,849 and

$ 217,123 for

the nine months ended September 30, 2023 and 2022, respectively.

Accrued interest was $ 496,384 as

of September 30, 2023.

The Company’s effective interest rate was 41.07 %

for the nine months ended September 30, 2023.

As of September 30, 2023, the Company’s

convertible note balances are convertible into 9,222,251 shares of common stock.

Shareholder Advances

As of February 23, 2023, the Company received

a shareholder advance for $ 200,000 with a 12 % interest rate and is repayable on February 24, 2024.

a shareholder advance for $ 200,000 with a 12 % interest rate and interest expense was $ 14,400 for the nine months ended September 30, 2023.

Splash Beverage Group, Inc.

10 unchanged sentences

and $ 54,450 in 2022.

There were no unpaid royalties at June 30,

The Company paid the guaranteed minimum royalty payments of $ 165,000 and $ 163,350 for the three months ended June 30, 2023

and 2022 respectively and $ 330,000 and $ 326,700 for the six months ending June 30, 2023 and 2022 respectively, which is included

in general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss.

There were no unpaid royalties at September

The Company paid the guaranteed minimum royalty payments of $ 165,000 and $ 163,350 for the three months ended September

30, 2023 and 2022 respectively and $ 495,000 and $ 490,050 for the nine months ending September 30, 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

11 unchanged sentences

Note 5– Stockholders’ Equity

During the period ended June 30, 2023, the

Company entered into a private placement offering to

purchase convertible instruments that convert into the Company’s common stock up to an aggregate of $ 8,500,000 .

received gross proceeds of $ 1,150,000 from the issuance of convertible instruments with 1,150,000 shares and 575,000 warrants.

In the three months and six months ended June

30, 2023 the Company granted share-based awards to certain consultants totaling 116,666 shares of common stock at a weighted average

price of $1.10 and recognized share based compensation of $ 127,999 .

In the three months and six months ended June 30, 2023 the Company issued

100,000 shares in satisfaction of a $ 91,800 liability to issue shares recorded in December 2022.

During the period ended September 30, 2023,

the Company entered into a private placement offering to purchase convertible instruments that convert into the Company’s

common stock up to an aggregate of $ 8,500,000 .

The Company received gross proceeds of $ 4,300,000 from the issuance of convertible

instruments with 3,725,000 shares and 1,000,000 warrants.

In the three months and nine months ended September

30, 2023, the Company granted share-based awards to certain consultants totaling 99,999 and 316,666 shares of common stock, respectively,

at a weighted average price of $0.66 and $0.91, respectively, recognized share-based compensation of $ 66,332 and $ 289,998 , respectively.

In the nine months ended September 30, 2023, the Company issued 100,000 shares in satisfaction of a $ 91,800 liability to issue

shares recorded in December 2022.

Splash Beverage Group, Inc.

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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 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 of Directors.

At January 1, 2023 and 2022, the number

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

shares, respectively.

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 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 of Directors.

At January 1,

2023 and 2022, the number of shares issuable under the 2020 plan increased by 2,054,276 and 1,679,812 shares, respectively.

In October 2023, the shareholders voted to

increase the number of shares issuable under the Plan to 7.5%.

The following is a summary of the Company’s

stock option activity during the period ended June 30, 2023:

stock option activity

stock option activity during the period ended September 30, 2023:

Schedule of stock option activity

Stock options

Weighted average exercise

price of outstanding stock

average remaining life (Yrs)

Balance January 01, 2023 *

Balance March 31, 2023

Weighted average exercise price of outstanding stock

Weighted average remaining life (Yrs)

January 01, 2023 *

March 31, 2023

Balance - June 30, 2023

Exercisable - June 30, 2023

These prices are reflective of the price modification made

on April 24, 2023.

In the three months ending June 30, 2023, the Company

granted 3,376,008

options to employees and directors at weighted average strike price of $ 1.13 ,

weighted average expected life of 6.0

years, weighted average volatility of 264.3 %,

weighted average risk-free rate of 3.6 %

and no dividend.

On April 24, 2023, the Company modified the price of 4,134,008

options to $ 1.12

from a weighted average price of $ 2.56 .

The options have a weighted average expected life of 6.3

years, weighted average volatility of 266.7 %,

weighted average risk-free rate of 3.6 %

Following ASC Topic 718 the Company recognized an incremental expense from the modification of the option pricing resulted

in an expense of $ 7,348

that was reflected in the quarter.

The grant date fair value of options granted during the six months ended June 30, 2023 was

$ 1,049,585 .

The Company recognized $ 724,991 of share-based compensation during the six months ended June 30, 2023.

Balance - September 30, 2023

Exercisable - September 30, 2023

These prices are reflective of the price modification made on April 24, 2023.

The Company recognized $ 300,912 and $ 1,025,903

of share-based compensation during the three months and nine months ended September 30, 2023.

Splash Beverage Group, Inc.

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price of outstanding

Weighted average

remaining term (Yrs)

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Balance - June 30, 2023

Balance - September 30, 2023

Note 6 – Related Parties

During the normal course of business, the Company incurs expenses related to

services provided by the CEO for Company expenses paid by the CEO.

In 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,

was an 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, L.P.

During the normal course of business, the Company

incurs expenses related to services provided by the CEO for Company expenses paid by the CEO.

In 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, was an 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, L.P.

(the “Lender”).

The Note Payable had a balance outstanding

of $ 672,695 at June 30,2023.

The Note Payable had a balance outstanding of $ 494,204 at September 30,2023.

On June 22, 2023, the Company received an interest

free short-term loan from the CEO for $ 250,000 .

In August and September 2023, the Company received an interest free short-term

loan from the CEO for $ 165,000 and expense payable of $ 11,000 .

The loan is expected to be repaid within the current year.

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Note 8 – Leases

The Company has various operating lease agreements primarily related to real

estate and office space.

The Company has various operating lease agreements

primarily related to real estate and office space.

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 three months and six month period ended June 30, 2023 and 2022.

A majority of the real estate leases include

options to extend the lease.

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.

Lease payments are mainly fixed.

Any variable lease payments, including utilities, common area maintenance are expensed during

the period incurred.

Variable lease costs were immaterial for the three months and nine-month period ended September 30, 2023 and

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

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

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comprehensive loss.

Operating lease cost was $ 182,658 and $ 175,734 during the six-month period ended June 30, 2023 and 2022, respectively.

Operating lease cost was $ 273,631 and $ 263,159 during the nine-month period ended September 30, 2023 and 2022,

respectively.

The following table sets forth the maturities

of our operating lease liabilities and reconciles the respective undiscounted payments to the operating lease liabilities in the

consolidated balance sheet at June 30, 2023:

consolidated balance sheet at September 30, 2023:

Schedule of operating lease liability

1 unchanged sentence

Operating Lease

2023 (Six months remaining)

2023 (Three months remaining)

Amount representing imputed interest

3 unchanged sentences

The table below presents lease-related terms

and discount rates at June 30, 2023:

Summary of lease related terms and discount rates

and discount rates at September 30, 2023:

Schedule of lease-related terms and discount

Remaining term on leases

5 unchanged sentences

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

respectively and each segment’s major customers have different characteristics.

Segment Reporting is evaluated by our Chief Executive

Officer and Chief Financial Officer.

(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 respectively, and each segment’s major customers have different characteristics.

Reporting is evaluated by our Chief Executive Officer and Chief Financial Officer.

Schedule of segment reporting information

Three Months Ended June 30

Six Months Ended June 30

Three Months Ended September 30

Nine Months Ended September 30

Splash Beverage Group

2 unchanged sentences

Splash Beverage Group

( 1,468,563 )

( 1,278,987 )

Total contribution after marketing

8 unchanged sentences

$ ( 16,623,983 )

June 30, 2023

September 30, 2023

December 31, 2022

9 unchanged sentences

Note 11 – Subsequent Events

In July 2023, the Company received approximately

$ 0.85 million from a Private Placement issuance of convertible notes.

The notes have a twelve to eighteen-month term, accrue interest

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

In August 2023, the Company received approximately $ 1.1 million

from a Private Placement issuance of a convertible note.

The note has a twelve -month term, is non-interest bearing and is convertible

into shares of common stock of the Company at $ 1.00 per share, the note includes 500 shares for every $ 1,000 purchased in the note.

These notes are part of a Securities Purchase Agreement to raise up to $ 8.5 million to fund acquisitions, equipment purchases

and working capital.

In October, 2023, the Company received

approximately $ 1.9 million

from the issuance of senior secured convertible notes, a convertible promissory note and a merchant agreement.

convertible notes have an eighteen-month term, accrue interest at 12% and are convertible into shares of common stock of the Company

at $0.85 per share and include 100% warrant coverage.

The convertible promissory note has a two-and-a-half-month term and accrues

interest at a fixed amount of $ 50,000 .

notes that matured in October 2023 were extended by the note holders to March 31, 2024.

maturity dates of the related party notes were extended to March 31, 2024.

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