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Item 7. Management’s Discussion and Analysis

2025-07-11 compared with 2024-03-29 · 53 added, 45 removed, 105 unchanged (48% of the section changed)

Discussion and Analysis of Financial Condition and Results of Operations.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

The following discussion and analysis should be

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These statements are based on current expectations and assumptions that are subject to risk, uncertainties, and other factors.

statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,”

“anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions

or variations.

Actual results could differ materially because of the factors discussed in “Risk Factors” elsewhere in this

Annual Report, and other factors that we may not know.

These statements

are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,”

“intend,” “could,” “estimate,” or “continue,” and similar expressions or variations.

results could differ materially because of the factors discussed in “Risk Factors” elsewhere in this Annual Report, and other

factors that we may not know.

Business Overview

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as the acquiring entity), followed by a recapitalization.

On July 31, 2020, CMS changed its name to Splash

Beverage Group, Inc.

On June 11, 2021, SBG’s common stock and warrant to purchase common stock began trading

on the NYSE American under the symbols “SBEV” and SBEV WT,” respectively.

On November 8, 2021, SBG reincorporated into the

State of Nevada and became a Nevada corporation.

On July 31, 2020, CMS changed its name to Splash Beverage

On June 11, 2021, SBG’s common stock and warrant to purchase common stock began trading on the

NYSE American under the symbols “SBEV” and SBEV WT,” respectively.

On November 8, 2021, SBG reincorporated into the State

of Nevada and became a Nevada corporation.

Our principal offices are located at 1314 E.

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31, 2024, compared to Year Ended December 31, 2023.

Revenues for the year ended December 31, 2023 were

$18.9 million compared to revenues of $18.1 million for the year ended December 31, 2022.

The increase in sales was mainly due to an

increase in our E-commerce segment of $0.4 million and an increase in our Splash Beverage Group segment of $0.3 million.

for the year ended December 31, 2024 were $4.2 million compared to revenues of $18.9

million for the year ended December 31, 2023.

Part of the $14.7` million decrease in sales

was mainly due to a decrease in our beverage sales of $1.7 million.

Additionally, revenues

from our vertically integrated B2B and B2C e-commerce distribution platform called Qplash

decreased approximately $13 million or 88.5% due to low inventory .

Total sales declined

due to limited liquidity to procure inventory to drive third-party sales.

Cost of Goods Sold

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2024 were $3.8 million compared to cost of goods sold for the year ended December 31, 2023 of $13.3 million.

The $1.1 million increase

in cost of goods sold was due to our increased sales and inflation.

The $9.5 million decrease

in cost of goods sold was due to our decreased sales.

The $8.4 million decrease in cost of goods sold was driven by decreased

sales in the e-commerce and $1.1 million was driven by beverage business.

Operating Expenses

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2024 were $16.4 million compared to $20.9 million for the year ended December 31, 2023.

Non cash-operating expenses related to share

issuance was $1.2 million as of December 31, 2023 compared to $7.4 million in December 31, 2022.

The remaining operating expense decrease

of $0.2 million was due to decreases in sales and marketing expense and other general and administrative expenses of $1.0 million, which

were offset by an increase of $0.8 million in salary and wages.

The decrease in operating expenses was primarily

due to $1.7 million of marketing expense, $0.5 million of contracted services, $2.1 million of other general and administrative expenses

partially offset by increases of the non-cash expenses related to share issuance of $1.2 million.

The loss of intangible impairment of

$4.2 million was recorded in the other general and administrative expenses.

Other Income/(Expense)

Other expense for the year ended December 31, 2023

Other expenses for the year ended December 31, 2024

were $6.9 million compared to $5.7 million for the year ended December 31, 2023.

The other expense increase of $5.5 million is mainly

driven by an increase in amortization of debt discount of $3.8 million and a $1.9 million increase in interest expense.

The other expense increased of $1.2 million is mainly

driven by an increase in interest expense.

Interest expenses for the year ended December 31, 2024 were $2.9 million compared to $1.9

million for the year ended December 31, 2023.

The $1.0 million increase in interest expense is due to new loans with a principal of $3.2

million with higher interest rates.

The Company also reserved $0.3 million for legal settlement.

Offset by a decrease in

amortization of debt discount of $0.2 million and $0.03 million in other expenses.

LIQUIDITY AND CAPITAL RESOURCES

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The primary reason for the change in net cash used was due to an increase of $1.2 million

in amortization of debt and a decrease of $0.6 million in losses of the business, offset by a decrease of $16.5 million in working capital.

Net cash used for discontinued operating activities during the year ended December 31, 2023, was $0 as compared to $0.03 million for

the year ended December 31, 2022.

in non-cash share-based compensation, and a decrease of $1.6 million in losses of the business, offset by a decrease of $0.6 million in

working capital.

Net cash used for investing activities during the

year ended December 31, 2023, was $0.01 as compared to the net cash used for investing activities during the year ended December 31,

year ended December 31, 2024, was $0.01 million as compared to the net cash used for investing activities during the year ended December

31, 2023, of $0.01 million.

The net cash used in the year 2023 was for a capital expenditure for building improvements.

Net cash provided by financing activities during

the year ended December 31, 2023, was $6.1 million compared to $14.4 million provided from financing activities for the year ended December

During the year ended December 31, 2023, we received $0 from the issuance of common stock compared to $11.4 million during

the year ending December 31, 2022.

We received $6.6 million and $4.0 million proceeds from the issuance of debt in years ending December

31, 2023 and 2022, respectively.

In the year ending December 31, 2023, $0.2 million was received from a shareholder advance and a $0.4

million shareholder advance was repaid in the year ending December 31, 2022.

Principal repayment of debt of $1.0 million and $0.6 million

were made in years ending December 31, 2023 and 2022 respectively.

In the year ending December 31, 2023 a cash advance from related party

of $0.4 million was received.

The net cash used in the year 2024 was for machinery & equipment.

Net cash provided by financing activities during the

year ended December 31, 2024, was $7.5 million compared to $6.1 million provided from financing activities for the year ended December

Company received $9.5 million and $6.6 million proceeds from the issuance of debt in years ending December 31, 2024 and 2023,

respectively.

No cash advance from shareholders in 2024, $0.2 million was received from a shareholder advance in the year ending December

Principal repayment of debt of $2.0 million and $1.0 million were made in years ending December 31, 2024 and 2023 respectively.

A cash advance from related party of $0.01 million and $0.4 million was received in 2024 and 2023 respectively.

In order to have sufficient cash to fund our operations,

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and third-party appraisals to determine fair values.

Quantitative and

Qualitative Disclosures about Market Risk.

Quantitative and Qualitative Disclosures

about Market Risk.

Not applicable for smaller reporting companies.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis