What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-07-11 · 459 added, 332 removed, 602 unchanged (57% of the section changed)

2 unchanged sentences

Condensed Consolidated Financial Statements

March 31, 2025

June 30, 2025

Splash Beverage Group, Inc.

Condensed Consolidated Balance Sheets

March 31, 2025 and December 31, 2024

and cash equivalents

receivable, net

June 30, 2025 and December 31, 2024

December 31, 2024

Current assets:

in Salt Tequila USA, LLC

of use assets

and equipment, net

Cash and cash equivalents

Accounts receivable, net

Prepaid expenses

Other receivables

Total current assets

Non-current assets:

and Stockholders’ Equity

payable and accrued expenses

of use liability, current portion

party notes payable

payable, net of discounts

interest payable

Investment in Salt Tequila USA, LLC

Right of use assets

Property and equipment, net

Total non-current assets

Liabilities and Stockholders’ Equity

Current liabilities

payable, net of discounts

of use liability – net of current portion

Accounts payable and accrued expenses

Dividends payable

Right of use liability, current portion

Related party notes payable

Notes payable, net of discounts

Shareholder advances

Accrued interest payable

Total current liabilities

Long-term liabilities:

Stockholders’

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

Stock, $ 0.001 par, 7,500,000 shares authorized, 1,899,876 shares issued, 1,669,835 shares outstanding at March 31, 2025 and December

paid in capital

other comprehensive loss

Notes payable, net of discounts

Right of use liability – net of current portion

Total long-term liabilities

Total liabilities

Stockholders’ equity:

Preferred stock, Series A $ 0.001 par value, 1,000 shares authorized, 1,000

shares issued and outstanding

Preferred stock, Series A-1 $ 0.001 par value, 1,500 shares authorized, 650 shares issued and outstanding

Preferred stock Series B, $ 0.001 par value, 12% cumulative, 150,000 shares authorized, 126,710 shares issued and outstanding

Preferred stock Series C, $ 0.001 par value, 500,000 shares authorized, 20,000 shares issued and outstanding

Common Stock, $ 0.001 par, 7,500,000 shares authorized, 1,899,876 shares issued, 1,669,835 shares outstanding at June 30, 2025 and December 31, 2024

Additional paid in capital

Accumulated other comprehensive loss

Accumulated deficit

( 167,992,381 )

( 155,832,277 )

stockholders’ equity

liabilities and stockholders’ equity

Total stockholders’ equity

( 18,634,849 )

Total liabilities and stockholders’ equity

Shares and per share amounts are reflective of the

4 unchanged sentences

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three Months Ended March 31, 2025 and 2024

Three months ended

of goods sold

share-based compensation

general and administrative

and marketing

For the Three Months and Six Months Ended June 30, 2025 and June 2024

Three months ended June 30

Six months ended June 30,

Cost of goods sold

( 2,179,417 )

Operating expenses:

from continuing operations

income/(expense):

of debt discount

other expense

for income taxes

loss from continuing operations, net of tax

comprehensive loss foreign currency translation loss, net of tax

comprehensive loss

per share - continuing operations

average number of common shares outstanding - continuing operations

Contracted services

Salary and wages

Non-cash share-based compensation

Other general and administrative

Sales and marketing

Total operating expenses

Loss from operations

( 1,632,590 )

( 3,690,920 )

( 3,665,130 )

( 6,941,217 )

Other income/(expense):

Interest income

Interest expense

( 1,262,392 )

( 1,154,661 )

Other Income/Expense

Amortization of debt discount

( 1,013,816 )

( 1,653,683 )

( 1,900,654 )

Loss on Extinguishment of debt

( 5,560,482 )

Total other income/(expense)

( 6,860,491 )

( 1,635,782 )

( 8,478,402 )

( 3,056,382 )

Provision for income taxes

$ ( 8,493,081 )

$ ( 5,326,702 )

$ ( 12,143,532 )

$ ( 9,997,599 )

Other Comprehensive Income (Loss)

Foreign currency translation loss

Total Comprehensive Income (Loss)

$ ( 8,491,913 )

$ ( 5,326,520 )

$ ( 12,189,434 )

$ ( 10,004,854 )

(Loss) per share - continuing operations

Basic and diluted

Weighted average number of common shares outstanding - continuing operations

Basic and diluted

Shares and per share amounts are reflective of the

3 unchanged sentences

Splash Beverage Group, Inc.

Condensed Consolidated Statement of Changes

in Stockholders’ Equity

For the Three months ended March 31, 2025 and 2024

paid-in capital

other comprehensive loss

stockholders’ equity

Consolidated Statement of Changes in Deficiency in Stockholders' Equity

For the Six months ended June 30, 2025 and June

Comprehensive

Stockholders’

at December 31, 2023

$ 127,701,710

of common stock for note extension

$ ( 133,334,783 )

$ ( 5,605,326 )

discount created from issuance of common stock and

based compensation

of ASU 2020-06

( 2,191,103 )

of warrants on convertible instruments

2 unchanged sentences

Comprehensive loss - Translation, net

( 4,670,897 )

at March 31, 2024

( 136,746,623 )

at December 31, 2024

( 9,502,688 )

stock issuable on convertible 18-month promissory note

based compensation

3 unchanged sentences

Comprehensive loss - Translation, net

( 5,326,702 )

( 5,326,703 )

at June 30, 2024

$ 131,689,438

$ ( 142,073,325 )

$ ( 10,353,838 )

at December 31, 2024

$ 137,114,578

$ ( 155,832,277 )

$ ( 18,634,849 )

based compensation

of warrant for convertible note

of notes payable to common stock

of common stock for services

Comprehensive loss - Translation, net

( 3,650,451 )

at March 31, 2025

( 159,482,728 )

( 20,028,249 )

based compensation

of Preferred stock A

of Preferred stock A-1

of Notes Payable to Preferred Stock B

of Preferred stock C for acquisition of Water Rights

of warrants on convertible instruments

Comprehensive loss - Translation, net

( 8,493,081 )

at June 30, 2025

$ 176,673,136

$ ( 167,992,381 )

Shares and per share amounts are reflective of the

4 unchanged sentences

Condensed Consolidated Statement of Cash Flows

For the Three Months Ended March 31, 2025 and 2024

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

and amortization

of debt discount

share-based compensation

in working capital items:

receivable, net

expenses and other current assets

payable and accrued expenses

interest payable

cash used in operating activities

flows from investing activities:

cash used in investing activities

flows from financing activities:

advance (repayment) from related party

advance from shareholder

from issuance of debt

repayment of debt

cash provided by financing activities

cash effect of exchange rate changes on cash

change in cash and cash equivalents

and cash equivalents, beginning of year

and cash equivalents, end of period

disclosure of cash flow information:

paid for Interest

disclosure of non-cash investing and financing activities

payable and accrued interest converted to common stock (224,541 shares in 2025 & 38,800 shares in 2024,)

debt discount in the form of issuance of equity instruments in conjunction with convertible notes

For the Six Months Ended June 30, 2025 and June 2024

$ ( 12,143,532 )

$ ( 9,997,599 )

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

Depreciation and amortization

Amortization of debt discount

ROU assets, net

Non-cash share-based compensation

Loss on extinguishment of debt

Changes in working capital items:

Accounts receivable, net

Inventory, net

Prepaid expenses and other current assets

Accounts payable and accrued expenses

Accrued interest payable

Net cash used in operating activities

( 1,404,399 )

( 3,738,061 )

Cash flows from investing activities:

Capital expenditures

Net cash used in investing activities

Cash flows from financing activities:

Cash advance (repayment) from related party

Proceeds from issuance of debt

Proceeds from sale of preferred stock

Principal repayment of debt

( 1,302,864 )

Net cash provided by financing activities

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 period

Supplemental 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 (224,541 shares in 2025 & 171,536 shares in 2024,)

Non-cash debt discount in the form of issuance of equity instruments in conjunction with convertible notes

Series-B Convertible Preferred Stock Issued 126,710 Shares exchanged for $12,670,435 notes payable and accrued interest

Series-C Convertible Preferred Stock Issued 20,000 Shares exchanged for Water Rights

Shares and per share amounts are reflective of the

1 for 40 reverse split that occurred on March 27, 2025.

The accompanying notes are an integral

part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these

condensed consolidated financial statements.

Splash Beverage Group, Inc.

49 unchanged sentences

Actual results could differ from those estimates.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Cash Equivalents and Concentration of Cash

1 unchanged sentence

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

The Company had no cash equivalents at March 31, 2025 or December

The Company had no cash equivalents at June 30, 2025 or December

Our cash in bank deposit accounts, at times, may exceed

federally insured limits of $ 250,000 .

At March 31, 2025 and December 31, 2024, the Company’s cash on deposit with financial institutions,

at times, had not exceeded federally insured limits of $ 250,000 .

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

At June 30, 2025 and December 31, 2024, the Company’s cash on deposit with financial institutions

had not exceeded federally insured limits of $ 250,000 .

Note 2 – Summary of Significant Accounting

7 unchanged sentences

value, accounted for using the weighted average cost method.

The inventory balances at March 31, 2025 and December 31, 2024 consisted

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

The inventory balances at June 30, 2025 and December 31, 2024 consisted of

raw materials, work-in-process, and finished goods held for distribution.

The cost elements of inventory consist of purchase of products,

6 unchanged sentences

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

The amount of our reserve was $ 621,178 at March 31, 2025 and December 31, 2024.

The amount of our reserve was $ 621,178 at June 30, 2025 and December 31, 2024.

Property and Equipment

7 unchanged sentences

Depreciation expense totaled $ 37,017 and $ 37,017 for

the three months ended March 31, 2025 and March 31, 2024, respectively.

Property and equipment as of March 31, 2025 and December 31, 2024

consisted of the following:

the three months ended June 30, 2025 and June 30, 2024, respectively.

For the six months ended June 30, 2025 and June 30, 2024, depreciation

expense totaled $ 74,034 and $ 74,229 , respectively.

Property and equipment as of June 30, 2025 and December 31, 2024 consisted of the following:

Schedule of property and equipment

4 unchanged sentences

Accumulated depreciation

( 2,050,557 )

( 1,976,522 )

Property, plant & equipment, net

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

The Company pays alcohol excise taxes based on product

6 unchanged sentences

a small winery tax credit provision which decreases based upon the number of gallons of wine production in a year rather than the quantity

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Note 2 – Summary of Significant Accounting

8 unchanged sentences

The three levels of the fair value hierarchy are as follows:

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 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 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.

The liabilities and indebtedness presented on the

condensed consolidated financial statements approximate fair values at March 31, 2025 and December 31, 2024, consistent with recent negotiations

condensed consolidated financial statements approximate fair values at June 30, 2025 and December 31, 2024, consistent with recent negotiations

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

Embedded debt costs

in convertible debt instruments

Embedded Debt

Costs in Convertible Debt Instruments

In August 2020, the FASB issued “ASU 2020-06,

14 unchanged sentences

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

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

The Company recognizes revenue when the Company’s

9 unchanged sentences

are excluded from revenue.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Note 2 – Summary of Significant Accounting

42 unchanged sentences

an adjustment in the period in which estimates are revised.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

The Company uses the liability method of accounting

11 unchanged sentences

ultimate settlement with a taxing authority that has full knowledge of all relevant information.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Note 2 – Summary of Significant Accounting Policies, continued

2 unchanged sentences

Company management

has determined that there are no material uncertain tax positions at March 31, 2025 and December 31, 2024.

has determined that there are no material uncertain tax positions at June 30, 2025 and December 31, 2024.

Net income (loss) per share

The net income (loss) per share is computed by dividing

the net income (loss) by the weighted average number of shares of common stock outstanding.

Warrants, stock options, and common stock

issuable upon the conversion of the Company’s convertible debt or preferred stock (if any), are not included in the computation

if the effect would be anti-dilutive.

the net income (loss) less preferred stock dividends by the weighted average number of shares of common stock outstanding.

Warrants, stock

options, and common stock issuable upon the conversion of the Company’s convertible debt or preferred stock (if any), are not included

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

Weighted average number of shares outstanding excludes

1 unchanged sentence

the conversion of notes payable.

Schedule of net loss per common share

Net income/(loss) per common shares:

3 months ended June 30, 2025

6 months ended June 30, 2025

Net income/(loss)

$ ( 8,491,913 )

$ ( 12,189,434 )

Dividends on Series A-1 preferred stock

Weighted-average shares outstanding

Net loss per common share

The Company conducts advertising for the promotion

2 unchanged sentences

The Company recorded advertising

expense of $ 22,426 and $ 77,627 for the three months ended March 31, 2025 and 2024, respectively.

expense of $ 18,295 and $ 109,624 for the three months ended June 30, 2025 and 2024, respectively.

The Company recorded advertising expense

of $ 40,721 and $ 187,251 for the six months ended June 30, 2025 and 2024, respectively.

Goodwill and Intangibles Assets

9 unchanged sentences

to be applied to historical and expected future operating results.

The Company’s

goodwill and intangible assets were impaired to $0 at 12/31/24.

At the time of acquisition, the Company estimates

the fair value of the acquired identifiable intangible assets based upon the facts and circumstances related to the particular intangible

Inherent in such estimates are judgments and estimates of future revenue, profitability, cash flows and appropriate discount rates

for any present value calculations.

The Company preliminarily estimates the value of the acquired identifiable intangible assets and then

finalizes the estimated fair values during the purchase allocation period, which does not extend beyond 12 months from the date of acquisition.

The Company’s goodwill and intangible assets were impaired to $ 0 at 12/31/24.

The Company’s goodwill and intangible assets were impaired to

$ 0 at December 31, 2024.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

Notes to the Condensed Consolidated Financial Statements

At the time of acquisition, the Company estimates the fair value of the acquired

identifiable intangible assets based upon the facts and circumstances related to the particular intangible asset.

Inherent in such estimates

are judgments and estimates of future revenue, profitability, cash flows and appropriate discount rates for any present value calculations.

The Company preliminarily estimates the value of the acquired identifiable intangible assets and then finalizes the estimated fair values

during the purchase allocation period, which does not extend beyond 12 months from the date of acquisition.

On June 25, 2025, the Company acquired water concession rights and related

permits in Garabito, Puntarenas, Costa Rica, as part of the Utopia asset acquisition.

The concession grants the legal right to extract

up to 0.81 liters per second from the approved aquifer, with renewals available every ten years, contingent on approval by regulatory

agencies in Costa Rica.

Management expects the concession to be renewed for at least 100 years.

The water rights are classified as indefinite-lived

intangible assets under ASC 350 and are not amortized.

Indefinite-lived intangible assets are tested for impairment annually or more frequently

if indicators of impairment are present.

As of June 30, 2025, the carrying amount of the water rights was $20.0 million, and no impairment

was recorded.

Note 2 – Summary of Significant Accounting

22 unchanged sentences

The Company incurred foreign

currency translation net gain of$ 50,694 and net loss of $ 7,437 for the three months ending March 31, 2025 and 2024 respectively.

currency translation net gain of $ 1,168 and net gain of $ 182 for the three months ending June 30, 2025 and 2024 respectively and net loss

of $ 45,902 and net loss of $ 7,255 for the six months ending June 30, 2025 and 2024 respectively.

Liquidity, Capital Resources and Going Concern Considerations

3 unchanged sentences

The Company historically has incurred significant losses and negative cash flows from operation

since inception and had net-loss of approximately $3.6 million for three-month period ended March 31, 2025 and accumulated deficit of

approximately $159.4 million through March 31, 2025.

During the three-month period ended March 31, 2025, the Company’s net cash

used in operating activities totaled approximately $ 0.7 million.

Additionally, the Company’s current liabilities exceed its current

assets, and it has a working capital deficit.

since inception and had net-loss of approximately $8.5 million for three-month period ended June 30, 2025 and accumulated deficit of approximately

$168.0 million through June 30, 2025.

During the six-month period ended June 30, 2025, the Company’s net cash used in operating

activities totaled approximately $ 1.4 million.

Additionally, the Company’s current liabilities exceed its current assets, and it

has a working capital deficit.

To date the Company has generated cash flows from issuances of equity and indebtedness.

4 unchanged sentences

The Company received approximately $ 1.1 million from

the issuance of debt for the three months ending March 31, 2025.

the issuance of debt and $ 0.7 million from sale of preferred stocks for the six months ending June 30, 2025.

Management’s plans in regard to these matters

34 unchanged sentences

Note 3 – Notes Payable, Related Party

Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements and Bridge Loan Payabl e

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

Notes payable are generally nonrecourse and secured

6 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 .

In April 2021, the Company entered into two six-month loans in the amount

of $ 84,000 each.

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

The loan was converted to Preferred stock in June 2025.

The loan was exchanged

to Series B Preferred stock in June 2025.

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 converted to Preferred stock in June 2025.

The loan was exchanged to Series B Preferred stock in June 2025.

In May 2021, the Company entered into a six-month loan with an individual in the amount of $ 10,000 .

3 unchanged sentences

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 various eighteen-month loans with individuals totaling in the amount of $ 4,000,000 .

In December 2022, the Company entered into various eighteen-month loans with individuals totaling $ 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.

The loans were converted to Preferred stock in June 2025.

The loans were exchanged to Series B Preferred stock in June 2025.

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

The notes included 100 % warrant coverage.

The loan was converted to Preferred stock in June 2025.

The loan was exchanged to Series B Preferred stock in June 2025.

In May 2023, the Company entered into various eighteen-month loans with individuals totaling in the amount of $ 800,000 .

1 unchanged sentence

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

The loans were converted to Preferred stock in June 2025.

The loans were exchanged to Series B Preferred stock in June 2025.

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

1 unchanged sentence

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

The loans were converted to Preferred stock in June 2025.

The loans were exchanged to Series B Preferred stock in June 2025.

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

1 unchanged sentence

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

The loan was converted to Preferred stock in June 2025.

The loan was exchanged to Series B Preferred stock in June 2025.

In August 2023, the Company entered into a twelve-month loan with an individual in the amount of $ 300,000 .

9 unchanged sentences

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

The loan was fully converted in January 2025

The loan was fully converted to common stock in January 2025

In January 2024, the Company entered into a 18-month loan with an individual in the amount of $ 250,000 .

1 unchanged sentence

The loan had a maturity of July 2025 with principal and interest due at maturity with conversion price of $ 0.50 per share.

The loan was converted to Preferred stock in June 2025.

The loan was exchanged to Series B Preferred stock in June 2025.

In February 2024, the Company entered into a 18-month loan with an individual in the amount of $ 150,000 .

1 unchanged sentence

The loan had a maturity of August 2025 with principal and interest due at maturity with conversion price of $ 0.40 per share.

The loan was converted to Preferred stock in June 2025.

The loan was exchanged to Series B Preferred stock in June 2025.

In February 2024, the Company entered into a 6-month loan with an individual in the amount of $ 315,000 .

1 unchanged sentence

The loan had a maturity of August 2024 with principal and interest due at maturity with conversion price of $ 0.38 per share.

The loan was converted to Preferred stock in June 2025.

The loan was exchanged to Series B Preferred stock in June 2025.

In February 2024, the Company entered into a 18-month loan with an entity in the amount of $ 250,000 .

1 unchanged sentence

The loan matures in August 2025 with principal and interest due at maturity with conversion price of $ 0.46 per share.

The loan was converted to Preferred stock in June 2025.

The loan was exchanged to Series B Preferred stock in June 2025.

In April 2024, the Company entered into a commercial financing agreement in the amount of $ 815,000 and will be paid weekly until the loan is paid in full.

3 unchanged sentences

The loan matures in November 2026 with principal and interest due at maturity with conversion price of $ 0.40 per share.

The loan was exchanged to Series B Preferred stock in June 2025

In June 2024, the Company entered into a revenue purchase agreement in the amount of $ 250,000 .

8 unchanged sentences

The loan matures in September 2029 with principal and interest due at maturity with conversion price of $ 0.35 per share.

The loans were converted to Preferred stock in June 2025.

The loans were exchanged to Series B Preferred stock in June 2025.

In August 2024, the Company entered into a eighteen-month loan with individuals totaling in the amount of $ 1,400,000 .

The loan matures in February 2026 with principal and interest due at maturity with conversion price of $ 0.38 per share.

$ 800,000 was converted to Preferred stock in June 2025.

$ 800,000 was exchanged to Preferred stock in June 2025.

In August 2024, the Company entered into a eighteen-month loan with individuals totaling in the amount of $ 100,000 .

The loan matures in September 2025 with principal and interest due at maturity with conversion price of $ 0.38 per share.

The loan was converted to Preferred stock in June 2025.

The loan was exchanged to Series B Preferred stock in June 2025.

In September 2024, the Company entered into a merchant cash advance agreement in the amount of $ 325,000 to be paid weekly until the loan is paid in full.

In September 2024, the Company entered into an agreement with individuals totaling in the amount of $ 590,000 .

$ 290,000 was converted to Preferred stock in June 2025

$ 290,000 was exchanged to Series B Preferred stock in June 2025

In October 2024, the Company entered into an agreement with individuals totaling in the amount of $ 950,000 .

There is no stated maturity, the proceeds of which are to be used for a future acquisition.

In November 2024, the Company entered into a merchant cash advance agreement in the amount of $ 340,000 to be paid weekly until the loan is paid in full.

6 unchanged sentences

The loan had a maturity of January 2026 with principal and interest due at maturity with conversion price of $ 0.25 per share.

The loans were converted to Preferred stock in June 2025.

The loans of $150,000 were exchanged to Series B Preferred stock in June 2025.

In January 2025, the Company entered into a 18-month loan with individuals in the amount of $ 225,000 .

1 unchanged sentence

The loan had a maturity of June 2026 with principal and interest due at maturity with conversion price of $ 0.25 per share.

The loans were converted to Preferred stock in June 2025.

The loans were exchanged to Series B Preferred stock in June 2025.

In January 2025, the Company entered into a convertible promissory note in the amount of $ 156,000 .

2 unchanged sentences

The loan had a maturity of November 2025 with 1 st payment in July 2025.

In April 2025, the Company entered into a senior convertible note in the amount of $ 200,000 with conversion price of $ 1.25 per share.

The loan had a maturity of April 2030 with 125,000 5-year warrants exercisable at $2.00, and 83,334 5-year warrants exercisable into common stock at $3.00

Total notes payable

Less notes discount

( 3,031,917 )

Less current portion

( 3,592,462 )

( 9,632,505 )

Long-term notes payable

4 unchanged sentences

Interest expense on notes payable was $ 625,047 and

$ 533,578 for the three months ended March 31, 2025 and 2024, respectively.

Accrued interest amounted to $ 3,805,534 as of March 31, 2025.

The Company recognized approximately $ 978,720 and approximately $ 886,838

of interest expense attributable to the amortization of the debt discount during the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, and December 31, 2024, the

balance of the unamortized debt discount was $ 2,550,199

and $ 3,031,514

respectively.

The Company adopted ASU 2020-06 on January 1, 2024, which resulted in the reversal of the original beneficial

conversion feature (BCF) amount to additional paid in capital for $ 2,191,103 ,

reversal of the unamortized debt discount related to the beneficial conversion feature (BCF) for $ 932,047

with the balance being recorded through retained earnings for $ 1,259,056 .

$ 607,903 for the three months ended June 30, 2025 and 2024, respectively.

Interest expense on notes payable was $ 1,262,392 and $ 1,130,480

for the six months ended June 30, 2025 and 2024, respectively.

Accrued interest amounted to $ 2,214,868 as of June 30, 2025.

The Company recognized approximately $ 674,962 and

approximately $ 1,013,815 of interest expense attributable to the amortization of the debt discount during the three months ended June

30, 2025 and 2024, respectively.

The Company recognized approximately $ 1,653,683 and approximately $ 1,900,656 of interest expense attributable

to the amortization of the debt discount during the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, and December

31, 2024, the balance of the unamortized debt discount was $ 217,906 and $ 2,859,430 respectively.

Schedule of notes payable

Interest Rate

December 31, 2024

Shareholder Notes Payable

1 unchanged sentence

The annual interest rate is 12 %.

The loans was converted to Preferred stock in June 2025.

The loan was exchanged to Preferred stock in June 2025.

Less current portion

1 unchanged sentence

Interest expense on related party notes payable was

$6,000 for the three months ended March 31, 2025 and 2024, respectively.

The Company’s effective interest rate was 21.80% for the

three months ended March 31, 2025.

As of March 31, 2025, the Company’s convertible

$ 6,000 for the three months ended June 30, 2025 and 2024, respectively.

Interest expense on related party notes payable was $ 12,000 for

the six months ended June 30, 2025 and 2024, respectively.

The Company’s effective interest rate was 20.63% for the six months ended

June 30, 2025.

As of June 30, 2025, the Company’s convertible

note balances are convertible into 167,500 shares of common stock

Note 4 – Licensing Agreement and Royalty

The licensing agreement between TapouT LLC and the Company was terminated

The parties are engaged in active and constructive settlement discussions pursuant to the terms of the agreement’s termination

Based on the settlement discussions, the Company anticipates that any final settlement will not exceed the amounts already

recorded in its legal reserve and accrued accounts payable.

The Company has reserved $ 330,000 that is included in legal reserve in the

condensed consolidated statement of operations and comprehensive loss relating to the termination of the ABG agreement.

The licensing agreement between TapouT LLC and the

Company was terminated in Q1 2024.

The parties are engaged in active and constructive settlement discussions pursuant to the terms of

the agreement’s termination provisions.

Based on the settlement discussions, the Company anticipates that any final settlement will

not exceed the amounts already recorded in its legal reserve and accrued accounts payable.

The Company has reserved $ 330,000 that is included

in legal reserve in the condensed consolidated statement of operations and comprehensive loss relating to the termination of the ABG agreement.

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

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 unchanged sentence

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 expire.

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.

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 expire.

Splash Beverage Group, Inc.

7 unchanged sentences

meet the per share price requirements of the NYSE American.

During the three-months ended March 31, 2025, we

shares valued at $ 35,000

in exchange for services and 224,541

shares for conversion of notes payable and accrued interest totaling $ 1,665,953 .

During the six-months ended June 30, 2025, we issued

5,500 shares valued at $ 35,000 in exchange for services and 224,541 shares for conversion of notes payable and accrued interest totaling

$ 1,665,953 .

Preferred Stock

As of the date of this filing, the Company has issued four series of preferred

The Company evaluated the classification of the Preferred

Stock and related warrants issued with the Series A-1 Preferred Stock in accordance with ASC 480, Distinguishing Liabilities from Equity ,

and ASC 815, Derivatives and Hedging .

Based on this assessment, management determined that the Preferred Stock and warrants meet

the criteria for equity classification.

Specifically, the instruments are not mandatorily redeemable, do not embody obligations to repurchase

the Company’s shares by transferring assets, and do not require settlement in a variable number of shares with a monetary value

that is fixed, tied to a variable other than the Company’s own stock, or indexed to something other than the Company’s stock.

The warrants are indexed solely to the Company’s common stock and meet the scope exception under ASC 815-10-15.

Accordingly, the

Preferred Stock and related warrants have been classified as components of stockholders’ equity in the accompanying condensed consolidated

financial statements.

The Company has issued four series of preferred stock:

Series A, A-1, B, and C , each with distinct rights and preferences as outlined below.

Note agreements were amended to be

exchanged for Preferred B and the impact of those amendments is subject to further review.

Note agreements were amended to be exchanged

for Preferred B and the impact of those amendments is subject to further review.

Voting Rights

Series A carries 25,000 votes per share but is limited solely to voting on the authorization of additional shares.

Series A carries 25,000 votes per share but is limited solely to

voting on the authorization of additional shares.

It has no other voting rights.

Series A is expected to be retired following the special meeting.

Series A will be retired following the special

meeting scheduled for August 29,2025.

Series A shares are held solely by Robert Nistico, CEO, a related party.

Series A-1 carries 231 votes per share.

10 unchanged sentences

Series C is convertible at a fixed price of $3.00, resulting in the potential issuance of 6,666,667 common shares upon conversion.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Redemption – at the sole discretion of the Company.

6 unchanged sentences

Series A is a governance-related instrument and does not participate in liquidation or dividend preferences.

In May 2025, the Company issued 650 shares of Series

A-1 Preferred Stock in exchange for approximately $650,000.

Series A-1 shares are convertible into common stock, subject to shareholder

Investors of A-1 Shares also received 162,500 1-year A Warrants exercisable into common stock at 80% of 5-day VWAP, and 162,500

5-year B Warrants exercisable into common stock at $4.00.

In June 2025, the Company issued 1,000 shares of Preferred A Stock to Robert

Nistico, CEO, a related party.

Preferred A is super voting preferred, not convertible into common stock.

Nistico is the sole holder

of Preferred A.

In June 2025, the Company exchanged previously issued convertible notes, $10,580,336

of principal and $2,090,105 interest for 126,710 shares of Preferred Stock B, eliminating $7,699,596 of current liabilities and $2,070,712

of long-term liabilities.

These liabilities were previously carried net of unamortized discounts.

Debt agreements were amended to be exchanged

for Preferred B.

The Series B shares are convertible into common stock, subject to shareholder approval.

The note discount on the date

of conversion was 1,843,519, The loss on extinguishment of debt was $ 5,560,482 recorded in accordance with ASC 470.

The fair market value

of the Preferred Stock B utilized in the computation of the loss on extinguishment was $16,387,404.

In June 2025, the Company acquired certain assets,

including all contractual water rights to the aquifer located in Garabito, Puntarenas, Costa Rica.

The Company issued 20,000 shares of

Series C Preferred Stock as consideration, at an initial stated value of $1,000 per share.

Management determined that the transaction

is an asset acquisition under ASC 805, as substantially all of the fair value is concentrated in a single identifiable asset—the

water rights—and no substantive processes were acquired..

The acquisition

of the water rights was recorded at a cost of $20 million, which is the fair value of the Series C preferred shares issued as consideration

for the acquisition of the water rights.

The Series C shares are convertible into common stock, subject to shareholder approval.

2020 Plan adjusted for the 1 for 40 reverse split.

3 unchanged sentences

The total number of shares that may be issued under the 2020 plan

was 152,383 as of March 31, 2025.

was 152,383 as of June 30, 2025.

The 2020 Plan has an “evergreen” feature,

5 unchanged sentences

by 83,119 and 125,238 shares, respectively.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

The following is a summary of the Company’s

1 unchanged sentence

Schedule of stock option activity

March 31, 2025

March 31, 2024

Number of Options

4 unchanged sentences

Balance – March 31,

Exercisable – March 31,

During the three-month period ended March 31, 2025

and March 31, 2024, the company granted 15,000 and 15,750 options to new employees under the 2020 plan.

The fair value of stock options granted in the period

has been measured at $ 90,587 using the Black-Scholes option pricing model with the following assumptions:

Balance – June 30,

Exercisable – June 30,

The fair value of stock options granted in 2025 has

been measured at $ 90,531 using the Black-Scholes option pricing model with the following assumptions:

exercise price $ 6.0 , expected

life 10 years, expected volatility 254 %, expected dividends 0 %, risk free rate 4.00 %.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial

During the three-month period ended June 30,

2025 and June 30, 2024, the company granted 0

options to new employees under the 2020 plan, respectively.

During the six-month period ended June 30, 2025 and June 30, 2024, stock-based

compensation was recorded $ 159,531

and $ 1,276,900

respectively.

The remaining unamortized stock-based compensation as of June 30,2025 was $ 201,822 .

Note 5 – Stockholders’ Equity, continued

1 unchanged sentence

and Shareholder Advances

Outstanding balance for shareholder advances on March

31, 2025 and 2024 was $ 200,000 .

The shareholder advances in the amount of $ 0.2 million

was exchanged to 2,444 shares of Preferred Stock B in June 2025.

Note 6 – Related Parties

5 unchanged sentences

(the “Lender”).

The Note Payable to Decathlon with a balance of $ 1,995,950 at December 31, 2024 and $ 1,361,395 at December

The Note Payable to Decathlon with a balance of $ 2,183,504 at June 30, 2025 and $ 1,995,950 at December

On April 2024, the Company also entered into a Merchant

5 unchanged sentences

There was $372,335 outstanding under this agreement as

of March 31, 2025.

of June 30, 2025.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

On September 2024 and November 2024 the Company also

4 unchanged sentences

of $ 325,000 and $340,000, with the gross and interest amount of $ 172,250 and $173,400 respectively with the Lender (the “Credit

There was $ 67,861 and $311,713 respectively outstanding under this agreement as of March 31, 2025.

There was $ 65,861 and $311,713 respectively outstanding under this agreement as of June 30, 2025.

There were related party advances from our chief executive

officer in the amount of approximately $ 0.4 million outstanding as of March 31, 2025 and approximately $ 0.4 million as of December 31,

This amount includes a shareholder note payable in the amount of $ 0.2 million outstanding as of March 31, 2024.

The annual interest

rate of the note is 12 % with a conversion price of $ 14.0 per share.

The note includes 14,285 shares of warrant coverage.

officer in the amount of approximately $ 0.4 million outstanding as of June 30, 2025 and approximately $ 0.4 million as of December 31,

In June 2025, the Company issued 1,000 shares of Preferred A Stock to Robert

Nistico, CEO, a related party.

Preferred A is super voting preferred, not convertible into common stock.

Nistico is the sole holder

of Preferred A.

Note 7 – Investment in Salt Tequila USA,

10 unchanged sentences

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, 2025 and 2024.

Variable lease costs were immaterial for the quarter ended June 30, 2025 and 2024.

A majority of the real estate leases include options

5 unchanged sentences

comprehensive loss.

Operating lease cost was $ 88,603 and $ 97,953 during the period ended March 31, 2025 and 2024, respectively.

Operating lease cost was $ 184,136 and $ 163,590 during the period ended June 30, 2025 and 2024, 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 March 31, 2025

balance sheet at June 30, 2025

of operating lease liabilities

1 unchanged sentence

Operating Lease

2025 (Nine months remaining)

2025 (six months remaining)

Amount representing imputed interest

6 unchanged sentences

The table below presents lease-related terms and discount

rates at March 31, 2025:

Schedule of lease- related terms and

discount rates

rates at June 30, 2025:

Schedule of lease-related terms

Remaining term on leases

11 unchanged sentences

of segment reporting information

March 31, 2025

March 31, 2024

Splash Beverage Group

Total revenues, net, continuing operations

3 months ended

6 months ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Splash Beverage

3 months ended

6 months ended

Segment Operating loss:

March 31, 2025

March 31, 2024

Splash Beverage Group

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Splash Beverage

( 1,377,146 )

( 3,685,962 )

( 3,139,259 )

( 6,930,901 )

Total Contribution after marketing

( 1,632,590 )

( 3,690,920 )

( 3,665,130 )

( 6,941,217 )

3 months ended

6 months ended

Reconciliation of segment loss to corporate loss:

March 31, 2025

March 31, 2024

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Other income/expense

Amortization of debt discount

Interest income and expenses

( 1,013,816 )

( 1,653,683 )

( 1,900,654 )

Interest income and expense

( 1,262,392 )

( 1,153,826 )

Loss on Extinguishment of debt

( 5,560,482 )

Loss from continuing operations

March 31, 2025

( 8,493,081 )

( 5,326,702 )

( 12,143,532 )

( 9,997,599 )

June 30, 2025

December 31, 2024

3 unchanged sentences

Note 10 – Commitment and Contingencies

The Company is a party to asserted claims and are

The Company is a party to assert claims and are

subject to regulatory actions in the ordinary course of business.

7 unchanged sentences

and/or net losses in its five most recent fiscal years.

The Company is now subject to the procedures and requirements of Section 1009

of the Company Guide.

If the Company is not in compliance with the continued listing standards by April 6, 2025 or if the Company does

not make progress consistent with the Plan during the plan period, the NYSE American may commence delisting procedures.

As disclosed in the Company’s Current Report on Form 8-K filed with the

Securities and Exchange Commission on July 30, 2025, on July 28, 2025, the Company received two letters from the NYSE Regulation confirming

that the Company has regained compliance with the continued listing standards of the NYSE American LLC (“NYSE American”).

The licensing agreement between TapouT LLC and the

5 unchanged sentences

Note 11 – Subsequent Events

In April 2025, the Company issued a 5-year promissory

note in the amount of $200,000, it accrues interest at 15%, and is convertible into shares of common stock at $1.25.

The note also received

125,000 5-year warrants exercisable at $2.00, and 83,334 5-year warrants exercisable into common stock at $3.00.

In May 2025, the Company issued 650 shares of Series A-1 Preferred Stock

in exchange for approximately $650,000.

Series A-1 shares are convertible into common stock, subject to shareholder approval, and further

discussed in Note 5.

Investors of A-1 Shares also received 162,500 1-year A Warrants exercisable into common stock at 80% of 5-day VWAP,

and 162,500 5-year B Warrants exercisable into common stock at $4.00.

The accounting treatment of this transaction is subject to further

review and may be adjusted in the future.

In June 2025, the Company issued 1000 shares of Preferred A Stock.

A is super voting preferred, not convertible into common stock, and further discussed in Note 5.

In June 2025, the Company issued 126,710 shares of Series B Preferred Stock

in exchange for approximately $12.7 million in previously outstanding convertible notes.

The Series B shares are convertible into common

stock, subject to shareholder approval and further discussed in Note 5.

The accounting treatment of this transaction is subject to further

review and may be adjusted in the future.

In June 2025, the Company acquired certain assets, including all contractual

water rights to the aquifer located in Garabito, Puntarenas, Costa Rica.

The Company issued 20,000 shares of Series C Preferred Stock

as consideration, at an initial stated value of $1000 per share.

Management determined that the transaction is an asset acquisition under

ASC 805, as substantially all of the fair value is concentrated in a single identifiable asset—the water rights—and no substantive

processes were acquired.

The fair value of the acquired assets has been preliminarily estimated at $20 million and is subject to further

evaluation and assessment.

The Series C shares are convertible into common stock, subject to shareholder approval, and further discussed

Pro Forma Adjustments from Subsequent Events

The accounting treatment of these transaction is subject to further review

and may be adjusted in the future.

During the second quarter of 2025, Splash Beverage Group, Inc.

several strategic financing initiatives.

The unaudited pro forma balance sheet reflects the estimated accounting impact of these transactions

as if they had occurred on March 31, 2025.

Each adjustment column corresponds to a discrete event, as described below:

Preferred Stock A-1

Splash issued 650 shares of Preferred Stock A-1 for cash proceeds of $650,000.

The net impact of this transaction is a $650,000 increase in stockholders’ equity, reflecting the cash received.

See Note 5 for

additional details of Preferred Stock A-1.

Preferred Stock B – Debt Exchange

The Company exchanged previously issued convertible notes for 126,710 shares

of Preferred Stock B, eliminating $7,699,596 of current liabilities and $2,070,712 of long-term liabilities.

These liabilities were previously

carried net of unamortized discounts.

The exchange was a non-cash transaction and resulted in a $9,770,307 increase in stockholders’

Debt agreements were amended to be exchanged for Preferred B and the impact of those amendments is subject to further review.

See Note 5 for additional details of Preferred Stock B.

Preferred Stock C – Asset Acquisition

Splash issued 20,000 shares of Preferred Stock C in exchange for non-current

assets largely consisting of water rights located in Garabito, Puntarenas, Costa Rica.

The asset was recorded at $20,000,000, with a corresponding

increase to stockholders’ equity.

This non-cash transaction supports the Company’s business strategy.

See Note 5 for additional

details of Preferred Stock C.

Senior Convertible Note

Splash issued a $200,000 senior convertible note with

a $30,000 original issuance discount, and warrant coverage that resulted in the recognition of a note discount in the amount of $153,924.

of fair value of the warrant-related

derivative liability

The Period Ended M arch 31, 2025

and cash equivalents

current assets

Investment in Garabito, Puntarenas, Costa Rica Water Rights

Investment in Salt Tequila USA, LLC

and equipment, net

non-current assets

and Stockholders' Equity (Deficit)

payable and accrued expenses

of use liability - current

party notes payable

payable, net of discounts

interest payable

current liabilities

party notes payable - noncurrent

payable - net of discounts

of use liability - net of current portion

long-term liabilities

Stockholders'

stock, Series A-1 $0.001 par value, 1,500 shares authorized, 650 shares

issued and outstanding

stock Series B, $0.001 par value, 12% cumulative, 150,000 shares authorized

, 126,200 shares issued and outstanding

stock Series C, $0.001 par value, 500,000 shares authorized, 20,000 shares

issued and outstanding

Common Stock, $0.001 par, 7,500,000 shares authorized,1,899,876 and 1,669,835 shares issued and outstanding, at March 31, 2025 and

Dec 31, 2024, respectively

paid in capital

Accumulated Comprehensive Income - Translation

Accumulated deficit

( 159,482,727

stockholders' equity

liabilities and deficiency in stockholders' equity

In July 2025, the Company issued 150 shares of Series

A-1 Preferred Stock in exchange for $150,000.

The July issuance is convertible into 37,500 – 120,000 shares of common stock.

A-1 shares are convertible into common stock, subject to shareholder approval.

Investors of A-1 Shares also received 37,500 1-year A Warrants

exercisable into common stock at 80% of 5-day VWAP, and 37,500 5-year B Warrants exercisable into common stock at $4.00.

All outstanding

A-1 shares (800) are convertible into 200,000 – 640,000 shares of common stock, subject to shareholder approval.

In August 2025, the Company entered into a 12% promissory

note in the amount of $183,200.

This loan has a maturity of May 2026 with the 1 st payment in January 2026.

In August 2025, the Company entered into a 22% promissory

note in the amount of $58,000.

This loan has a maturity of May 2026 with the 1 st payment in January 2026.

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