What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-19 compared with 2025-08-14 · 227 added, 117 removed, 105 unchanged (77% of the section changed)

1 unchanged sentence

Cautionary Statement Regarding Forward-Looking

The information in this

discussion may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section

21E of the Securities Exchange Act of 1934, as amended.

These forward-looking statements involve risks and uncertainties, including statements

regarding our capital needs, business strategy and expectations.

Any statements that are not of historical fact may be deemed to be forward-looking

These forward-looking statements involve substantial risks and uncertainties.

In some cases you can identify forward-looking

statements by terminology such as “may,” “will,” “should,” “expect,” “plan,”

“intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,”

or “continue,” the negative of the terms or other comparable terminology.

Actual events or results may differ materially from

the anticipated results or other expectations expressed in the forward-looking statements.

In evaluating these statements, you should

consider various factors, including the risks included from time to time in other reports or registration statements filed with the United

States Securities and Exchange Commission.

These factors may cause our actual results to differ materially from any forward-looking statements.

The Company disclaims any obligation to publicly update these statements or disclose any difference between actual results and those reflected

in these statements.

This report contains “forward-looking

statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”), and Section 21E

of the Securities Exchange Act of 1934 (the “Exchange Act”).

Such forward-looking statements include those statements which

express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical

fact, including expectations relating to our plans with respect to our legacy businesses and consideration of strategic alternatives and

our ability to raise the necessary working capital, statements concerning our need for and intended efforts to raise capital and the timing

and intended use of proceeds in connection therewith , and the development and commercialization of beverages and other business ventures

and the potential qualities and success of such products and operations.

Forward-looking statements can generally be identified by the

use of words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,”

“should,” “would,” “intend,” “seem,” “potential,” “appear,” “continue,”

“future,” believe,” “estimate,” “forecast,” “project” and other words of similar

meaning, although not all forward-looking statements contain these identifying words.

In particular, these forward-looking statements

include, among others, statements about our intended use of proceeds, the development and commercialization of beverages and their potential

qualities and success.

These statements are based on our current expectations

and projections and involve estimates, assumptions, risks and uncertainties that could cause actual results to differ materially from

those expressed in them.

Any forward-looking statements are qualified in their entirety by reference to the factors discussed herein and

in the other documents we file with the SEC.

Important factors that could cause actual results to differ from those in the forward-looking

statements include the risks and uncertainties arising from our need for additional capital to continue and expand our operations, our

ability to raise the capital needed on favorable terms or at all, our ability to meet regulatory requirements including the rules of the

NYSE American and maintain the listing of our common stock on the NYSE American, our ability to meet our debt obligations and the negative

financial and operational consequences of failing to do so, the impact of the United States and global economies including the weakening

jobs market in the United States, potential inflation, future interest rates, United States tariff policy, our ability to pursue and execute

on our business plan and the risks and challenges we will face in such endeavors, challenges in protecting and maintaining intellectual

property rights including under existing agreements, the intense competition we face in our industry, and if we pursue any strategic alternatives

the many risks we may encounter in evaluating any such alternatives and consummating any transaction.

We also refer you to the Risk Factors

referred to under “Item 1A – Risk Factors” herein, and in the other documents we file with the SEC for both an expanded

discussion of the risks and uncertainties described above and additional risks and uncertainties that could cause actual results to differ

materially and adversely from those expressed or implied by forward-looking statements.

However, factors or events that could cause our

actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.

Unless the context otherwise

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within its distribution system.

Splash’s distribution system is comprehensive in the US and is now expanding to select attractive

international markets.

Through its division Qplash, Splash’s distribution reach includes e-commerce access to both business-to-business

(B2B) and business-to-consumer (B2C) customers.

Qplash markets well known beverage brands to customers throughout the US that prefer delivery

direct to their office, facilities and or homes.

The Company is seeking to manage brands across viable growth segments within the consumer beverage industry.

Splash has built organizational capabilities and an infrastructure enabling it to incubate and/or acquire brands with the intention of

efficiently accelerating them to higher volume and sales revenue.

We have not generated any revenue since March 2025

due to our lack of capital.

However, following the private placement offering in September 2025 in which we sold secured promissory notes,

referred to herein as “Notes,” for total gross proceeds of $2,000,000 and entered into an equity line of credit agreement

which subject to certain conditions including registering the shares on a registration statement will allow us to access additional capital,

we plan to access and deploy such capital to re-commence certain of our operations and to establish new operations as described below.

We believe the distribution landscape in the beverage

industry is changing rapidly as tech-enabled e-commerce business models are thriving.

Direct to consumer, office or home solutions are

projected to continue to gain traction in the future.

Recognizing this opportunity Splash continues to shape its operating model to be

vertically integrated with our e-commerce platform, Qplash, which business model envisions purchasing local and regional brands for developing

a direct line of sales to boutique retail stores and consumers.

Splash’s alcoholic beverage operations are currently

focused on obtaining inventory for the sale of Chispo tequila in the U.S.

and certain international markets, which is subject to the Company

obtaining necessary capital of at least $500,000.

In June 2025 the Company acquired water extraction

rights to an aquifer located in Costa Rica, which we refer to herein as the “Water Assets.” Subject to accessing the necessary

capital and infrastructure, our business plan for the Water Assets envisions the extraction, bottling and sale of high quality drinking

As of the date hereof, we have received a purchase order from a customer in the United Arab Emirates.

We need to raise approximately

$4,000,000 in order to bottle, package, and ship this order.

Because of our lack of revenue and the amount of capital

we acquire to begin to generate revenue for each of our beverage businesses, we have begun looking at strategic alternatives where we

may make an acquisition of assets or a business that presents value for our stockholders.

As of the date of this report, we have not reached

any understandings with respect to any business opportunity, and we may not do so.

Any future acquisition of an unrelated business will

likely require us to raise capital to support its operations even if we only issue equity securities to the seller.

In addition, we are

engaged in preliminary discussions with respect to acquiring a majority interest in a beverage product.

Recent Developments

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 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, which is further discussed in Note 5.

In May – October 2025, the Company issued 1,050

shares of Series A-1 Preferred Stock in exchange for approximately $1,050,000.

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 262,500 1-year A Warrants exercisable

into common stock at 80% of 5-day VWAP, and 262,500 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 126,710 shares of

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approval, and further discussed in Note 5.

In August 2025, the Company issued three notes for

a total of $424,560.

On July 31, 2025 as subsequently modified, the Company’s

Board of Directors granted 750,000 five-year Warrants to each director, exercisable at $0.80 per share.

In addition, our President received

a grant of 750,000 Warrants and our Chief Financial Officer received a grant of 1,000,000 Warrants with identical terms.

We also granted

certain employees a total of 400,000 Warrants with identical terms other than vesting.

Generally, all warrants vested except those granted

to our Chief Executive Officer are fully vested;

for the Chief Executive Officer, one-third will only vested upon meeting a performance

target and the other two-thirds vest in 500,000 share increments quarterly over a two-year period.

As of the date of this Report, 500,000

warrants are vested.

In September 2025 the Company issued $2.2 million

of convertible notes for gross proceeds of $2 million, and entered into a $35 million Equity Line of Credit agreement.

On October 31, 2025, the Company’s stockholders

voted to approve the issuance of shares of common stock under outstanding derivative securities and pursuant to the Equity Line of Credit

Agreement in accordance with NYSE American rules.

The Company’s stockholders also approved the 2025 Equity Incentive Plan providing

the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation

rights to the Company’s employees, directors and independent contractors.

The number of shares reserved under such Plan will originally

be 15% of the outstanding shares of common stock outstanding on a fully diluted basis, which reserve will automatically increase on January

1 of each year for a period of seven years beginning on January 1, 2026, and ending on January 1, 2032, in an amount equal to 5% of the

total number of shares of common stock outstanding on December 31 of the preceding calendar year on a fully diluted basis.

Results of Operations

The Three Months and Six Months Ended June 30, 2025 compared to Three Months and Six Months Ended June 30, 2024

For the three months ended June 30, 2025, the Company

did not record any sales compared to revenues of approximately $1.1 million for the three months ended June 30, 2024.

This was primarily

due to a shortage of operating capital which limited our ability to maintain inventory and fulfil orders.

We remain committed to resolving

these constraints and resuming normal business activities in the upcoming quarter.

Revenue for the six months ended June 30, 2025 was

$0.4 million compared to revenues of $2.6 million for the six months ended June 30, 2024.

The $2.2 million decrease in sales is driven

by decreases in both the e-commerce and beverage businesses.

The Three Months and Nine

Months Ended September 30, 2025 compared to Three Months and Nine Months Ended September 30, 2024

For the three months ended September 30, 2025, the

Company did not record any sales compared to revenues of approximately $1.0 million for the three months ended September 30, 2024.

was primarily due to a shortage of operating capital which limited our ability to maintain inventory and fulfil orders.

We remain committed

to resolving these constraints and resuming normal business activities in the upcoming quarter.

Revenue for the nine months ended September 30, 2025

was $0.4 million compared to revenues of $3.6 million for the nine months ended September 30, 2024.

The $3.2 million decrease in sales

is driven by decreases in both the e-commerce and beverage businesses.

Cost of Goods Sold

Cost of goods sold for the three months ended June

30, 2025 was less than $0.01 million compared to cost of goods sold for the three months ended June 30, 2024 of approximately $0.8 million.

The decrease in cost of goods sold for the three-month period ended June 30, 2025 was primarily due to our decreased sales.

Cost of goods sold for the six months ended June 30,

2025 was $0.5 million compared to cost of goods sold for the six months ended June 30, 2024 of $2.2 million.

The $1.7 million decrease

in cost of goods sold was driven by decreased sales in both the e-commerce and beverage business.

Cost of goods sold for the three months ended September

30, 2025 was less than $0.01 million compared to cost of goods sold for the three months ended September 30, 2024 of approximately $0.7

The decrease in cost of goods sold for the three-month period ended September 30, 2025 was primarily due to our decreased

Cost of goods sold for the nine months ended September

30, 2025 was $0.5 million compared to cost of goods sold for the nine months ended September 30, 2024 of $2.9 million.

The $1.7 million

decrease in cost of goods sold was driven by decreased sales in both the e-commerce and beverage business.

Operating Expenses

Operating expenses for the three months ended June 30, 2025 were $1.7 million compared

to $3.9 million for the three months ended June 30, 2024, a decrease of $2.2 million.

The decrease in our operating expenses was primarily

due to non-cash expenses, new staff, benefit cost, freight cost and Amazon selling fees.

Operating expenses for the six months ended June 30,

2025 were $3.6 million compared to $7.3 million for the six months ended June 30, 2024, a decrease of $3.7 million.

The decrease in operating

expenses was primarily due to non cash expenses, salary, marketing expense, freight cost and Amazon selling.

The net loss for the three months ended June 30, 2025

was $8.5 million as compared to a net loss of approximately $5.3 million for the three months ended June 30, 2024.

The net loss for the

six months ended June 30, 2025 was $12.2 million as compared to a net loss of approximately $10.0 million for the six months ended June

The increase in net loss is due to loss on extinguishment of debt and offset by lower operating expenses and the decrease in

amortization of debt discount.

The Company did not meet its payroll obligations during

the period from February to June 2025.

Operating expenses for the three months ended September 30, 2025 were $9.6 million

compared to $3.0 million for the three months ended September 30, 2024, a increase of $6.6 million.

The increase in our operating expenses

was primarily due to non-cash expenses.

Operating expenses for the nine months ended September

30, 2025 were $13.2 million compared to $9.6 million for the nine months ended September 30, 2024, a increase of $3.6 million.

in operating expenses was primarily due to non cash expenses.

The net loss for the three months ended September

30, 2025 was $9.9 million as compared to a net loss of approximately $4.7 million for the three months ended September 30, 2024.

loss for the nine months ended September 30, 2025 was $22.0 million as compared to a net loss of approximately $14.7 million for the nine

months ended September 30, 2024.

The increase in net loss is due to a non-cash loss on extinguishment of debt and non-cash operating expenses

and offset by the non-cash decrease in amortization of debt discount.

The Company did not meet all of its payroll obligations

during the period from February to September 2025.

As a result, employees were not paid for services rendered during that period.

The unpaid wages

have been fully accrued as liabilities in the accompanying financial statements.

unpaid wages have been fully accrued as liabilities in the accompanying financial statements.

Net Other Income and Expense

Interest expenses for the three months ended

June 30, 2025 were $0.6 million and for the three months ended June 30, 2024.

Interest expenses for the six months ended June 30,

2025 were $1.2 million and for the six months ended June 30, 2024.

Other income was $0 and $0.01 million for the three

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

Amortization of debt discount for the three months

ended June 30, 2025 was approximately $0.7 million compared to $1.0 million for the three months ended June 30, 2024.

Amortization of

debt discount for the six months ended June 30, 2025 was approximately $1.6 million compared to $1.9 million for six months ended June

LIQUIDITY, GOING CONCERN CONSIDERATIONS AND CAPITAL

Interest expenses for the three months ended September 30, 2025 were $0.3 million

and $0.8 million for the three months ended September 30, 2024.

Interest expenses for the nine months ended September 30, 2025 were $1.6

million and $2.0 million for the nine months ended September 30, 2024.

Other income was $0.01 million for the three months

ended September 30, 2025 and September 30, 2024, respectively.

Amortization of debt discount for the three months ended September 30, 2025 was approximately

$0.03 million compared to $0.8 million for the three months ended September 30, 2024.

Amortization of debt discount for the nine months

ended September 30, 2025 was approximately $1.7 million compared to $2.7 million for nine months ended September 30, 2024.

Liquidity and Capital Resources

Liquidity is the ability of a company to generate

2 unchanged sentences

in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures.

Due to our lack of capital, we have not generated

any revenue since March 2025.

In order to generate revenue, we require at least $2,000,000 of working capital in order to acquire inventory

and re-commence minimal operations.

This does not include our plans for our Water Assets or Chispo business plans which will require additional

Our lack of cash resources has prevented us from carrying on our commercialization activities.

In addition, our lack of working

capital has prevented us from marketing our products.

What changed 10-Q

Item 2. Management’s Discussion and Analysis