Endovia Health Sciences, Inc. 10-K

Item 8. Financial Statements and Supplementary Data. Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 468) F-2 Consolidated Balance Sheets December 31, 2025 and December 31, 2024 F-3 Consolidated Statements of Operations For the Years Ended December 31, 2025 and December 31 2024 F-4 Consolidated Statements of Changes in Stockholders’ Equity For the years ended December 31, 2025 and 2024 F-5 Consolidated Statements of Cash Flows For the Year Ended December 30, 2025 and 2024 F-6 Notes to the Consolidated Financial Statements F-7 F- 1 Report of Independent Registered Public Accounting Firm (PCAOB ID: 468) To the Board of Directors and Stockholders Splash Beverage Group, Inc. Fort Lauderdale, Florida Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Splash Beverage Group, Inc. at December 31, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for the years ended December 31, 2025 and 2024, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations and has an accumulated deficit and a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. Rose, Snyder & Jacobs LLP We have served as the Company’s auditor since 2024 Encino, CA April 15, 2026 468 F- 2 Splash Beverage Group, Inc. Consolidated Balance Sheets December 31, 2025 and December 31, 2024 December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 281,435 $ 13,789 Accounts receivable, net 15,748 191,991 Prepaid expenses 208,051 271,791 Inventory 33,538 319,104 Other receivables 93,221 234,770 Assets of discontinued operations — 872,674 Total current assets 631,993 1,904,119 Non-current assets: Deposit 22,734 48,922 Investment in Salt Tequila USA, LLC 250,000 250,000 Right of use assets 48,041 351,336 Property and equipment, net 12,926 22,210 Assets of discounted operations — 182,598 Total non-current assets 333,701 855,066 Total assets $ 965,694 $ 2,759,185 Liabilities and Stockholders’ Deficit Liabilities: Current liabilities Accounts payable and accrued expenses $ 4,810,061 $ 3,592,037 Derivative liability 189,582 — Dividends payable 831,944 — Right of use liability, current portion 50,720 58,840 Related party notes payable 389,000 389,000 Notes payable, net of discounts 6,225,581 9,632,505 Stockholder advances — 200,000 Accrued interest payable 2,282,528 3,610,329 Liabilities of discontinued operations 1,480,712 1,886,531 Total current liabilities 16,260,128 19,369,242 Long-term liabilities: Notes payable, net of discounts 3,418 1,971,095 Right of use liability, net of current portion 2,976 53,697 Total long-term liabilities 6,394 2,024,792 Total liabilities $ 16,266,522 $ 21,394,034 Stockholders’ deficit: Preferred stock, Series A $ 0.001 par value, 1,000 shares authorized, 0 shares issued and outstanding — — Preferred stock, Series A-1 $ 0.001 par value, 1,500 shares authorized, 1,300 shares issued and outstanding 1 — Preferred stock Series B, $ 0.001 par value, 12% cumulative, 150,000 shares authorized, 123,731 shares issued and outstanding 122 — Preferred stock Series C, $ 0.001 par value, 500,000 shares authorized, 0 shares issued and outstanding — — Common Stock, $ 0.001 par, 400,000,000 shares authorized, 2,998,799 and 1,669,835 shares issued and outstanding, at December 31, 2025 and December 31, 2024, respectively 2,998 1,670 Additional paid in capital 166,561,278 137,114,578 Accumulated other comprehensive income 33,828 81,180 Accumulated deficit ( 181,899,055 ) ( 155,832,277 ) Total stockholders’ deficit ( 15,300,828 ) ( 18,634,849 ) Total liabilities and stockholders’ deficit $ 965,694 $ 2,759,185 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 consolidated financial statements. F- 3 Splash Beverage Group, Inc. Consolidated Statements of Operations For the Years Ended December 31, 2025 and December 31, 2024 2025 2024 Net revenues $ 73,066 $ 801,273 Cost of goods sold ( 56,168 ) 921,070 Gross margin 16,898 ( 119,797 ) Operating expenses: Contracted services 760,446 928,377 Salary and wages 2,593,355 2,912,594 Non-cash share-based compensation 8,623,545 2,356,684 Other general and administrative 2,146,758 3,099,473 Sales and marketing 79,014 483,515 Total operating expenses 14,203,118 9,780,643 Loss from continuing operations ( 14,186,220 ) ( 9,900,440 ) Other income/(expense): Other Income/expense 234,996 ( 871 ) Interest income — 1,991 Interest expense ( 2,523,260 ) ( 3,702,611 ) Legal reserve — ( 330,000 ) Amortization of debt discount ( 1,844,694 ) ( 3,677,143 ) Loss on inventory write off ( 449,205 ) — Loss on Extinguishment of debt ( 5,560,482 ) — Change in FV derivative ( 20,406 ) — Total other expense ( 10,163,051 ) ( 7,708,634 ) Provision for income taxes — — Net (loss) from continuing operations, net of tax ( 24,349,271 ) ( 17,609,074 ) Discontinued operations: Loss from discontinued operations, net of tax ( 885,563 ) ( 6,147,477 ) Net (loss) from discontinued operations ( 885,563 ) ( 6,147,477 ) Net loss $ ( 25,234,834 ) $ ( 23,756,551 ) Preferred Stock Dividends ( 831,944 ) — Net loss available to common stockholders $ ( 26,066,778 ) $ ( 23,756,551 ) Other comprehensive loss Foreign currency translation gain (loss) $ ( 47,352 ) $ 97,763 Total comprehensive loss $ ( 25,282,186 ) $ ( 23,658,788 ) Loss per share - continuing operations – Basic and Diluted ( 11.56 ) ( 13.09 ) Loss per share - discontinued operations Basic and Diluted ( 0.41 ) ( 4.59 ) Net income (loss) per share - Basic and Diluted ( 11.97 ) ( 17.68 ) Weighted average number of common shares outstanding - continuing operations Basic and Diluted 2,178,397 1,338,428 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 consolidated financial statements. F- 4 Splash Beverage Group, Inc. Consolidated Statements of Changes in Stockholders’ Equity For the Years ended December 31, 2025 and 2024 Common Stock Series A Preferred Stock Series A-1 Preferred Stock Series B Preferred Stock Series C Preferred Stock Additional Subscription Accumulated Other Total Stockholders' Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Paid-In Capital Receivable Comprehensive Accumulated Equity Balances at December 31, 2023 1,108,252 $ 1,108 — $ — — $ — — $ — — $ — $ 127,744,932 $ — $ ( 16,583 ) $ ( 133,334,783 ) $ ( 5,605,326 ) Adoption of ASU 2020-06 — — — — — — — — — — ( 2,191,103 ) — — 1,259,057 ( 932,046 ) Stock based compensation — — — — — — — — — — 1,424,745 — — — 1,424,745 Issuance of common stock for convertible note 47,625 48 — — — — — — — — 641,202 — — — 641,250 Issuance of warrants on convertible instruments — — — — — — — — — — 4,327,247 — — — 4,327,247 Issuance of common stock for services 55,458 55 — — — — — — — — 721,634 — — — 721,689 Conversion of notes payable to common stock 458,500 459 — — — — — — — — 4,445,921 — — — 4,446,380 Accumulated Comprehensive Income - Translation — — — — — — — — — — — — 97,763 — 97,763 Net loss — — — — — — — — — — — — — ( 23,756,551 ) ( 23,756,551 ) Balances at December 31, 2024 1,669,835 $ 1,670 — $ — — $ — — $ — — $ — $ 137,114,578 $ — $ 81,180 $ ( 155,832,277 ) $ ( 18,634,849 ) Share based compensation — — — — — — — — — — 8,456,951 — — — 8,456,951 Issuance of Preferred stock A — — 1,000 1 — — — — — — 999 — — — 1,000 Redemption of Preferred stock A — — ( 1,000 ) ( 1 ) — — — — — — ( 999 ) — — — ( 1,000 ) Issuance of Preferred stock A-1 for cash — — — — 1,300 1 — — — — 1,299,999 — — — 1,300,000 Exchange of Notes Payable to Preferred Stock B — — — — — — 126,710 126 — — 16,387,277 — — — 16,387,403 Issuance of Preferred stock C for acquisition of Water Rights — — — — — — — — 20,000 20 19,999,980 ( 20,000,000 ) — — — Cancellation of Preferred stock C ( 20,000 ) ( 20 ) ( 19,999,980 ) 20,000,000 — Issuance of warrants on convertible instruments — — — — — — — — — — 659,958 — — — 659,958 Conversion of Preferred stock B to common stock 328,779 329 — — — — ( 3,979 ) ( 4 ) — — ( 324 ) — — — 0 Conversion of notes payable to common stock 944,685 944 — — — — — — — — 2,501,302 — — — 2,502,246 Issuance of common stocks on convertible instruments 40,000 40 — — — — — — — — 87,560 — — — 87,600 Issuance of common stock for services 15,500 16 — — — — — — — — 53,978 — — — 53,994 Accumulated Comprehensive loss - Translation, net — — — — — — — — — — — — ( 47,352 ) — ( 47,352 ) Dividends payable — — — — — — — — — — — — — ( 831,944 ) ( 831,944 ) Net loss — — — — — — — — — — — — — ( 25,234,834 ) ( 25,234,834 ) Balances at December 31, 2025 2,998,799 $ 2,998 — — 1,300 $ 1 122,731 $ 122 — $ — $ 166,561,279 $ — $ 33,828 $ ( 181,899,055 ) $ ( 15,300,828 ) 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 consolidated financial statements F- 5 Splash Beverage Group, Inc. Consolidated Statements Cash Flows For the Year Ended December 31, 2025 and 2024 2025 2024 Net loss $ ( 25,234,834 ) $ ( 23,756,551 ) (Income) loss from discontinued operations 885,564 1,823,413 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 9,284 401,602 Amortization of debt discount 2,450,178 3,677,143 ROU assets, net ( 24,093 ) 5,900 Loss from intangible impairment — 4,324,064 Non-cash share-based compensation 8,510,946 2,350,482 Change in FV of derivative liability 20,406 — Loss on extinguishment of debt 5,560,482 — Changes in working capital items: Accounts receivable, net 176,244 334,579 Inventory, net 285,566 595,649 Prepaid expenses and other current assets 205,287 ( 53,542 ) Deposits 26,188 524 Accounts payable and accrued expenses 728,690 640,806 Accrued interest payable 1,580,074 2,352,787 Liability to issue shares — — Net cash used in operating activities - continuing operations ( 4,820,018 ) ( 7,303,145 ) Cash flows from investing activities - continuing operations Capital expenditures — — Net cash used in investing activities - continuing operations — — Cash flows from financing activities - continuing operations: Cash advance (repayment) from related party — 9,000 Proceeds from issuance of debt 4,384,445 9,545,300 Proceeds from sale of preferred stock 1,300,000 — Principal repayment of debt ( 580,308 ) ( 2,009,541 ) Net cash provided by financing activities - continuing operations 5,104,137 7,544,759 Cash flows from discontinued operations Operating cash flows 30,879 ( 492,756 ) Investing cash flows — — Financing cash flows — — Net cash provided by (used in) discontinued operations 30,879 ( 492,756 ) Net cash effect of exchange rates on cash ( 47,352 ) 97,763 Net change in cash and cash equivalents 267,646 ( 153,379 ) Cash and cash equivalents, beginning of year 13,789 167,168 Cash and cash equivalents, end of period $ 281,435 $ 13,789 Supplemental Disclosure of Cash Flow Information: Cash paid for Interest $ 132,863 $ 795,022 Supplemental Disclosure of Non-Cash Investing and Financing Activities Notes payable and accrued interest converted to Common Stock (944,685 shares in 2025 & 171,536 shares in 2024,) $ 2,502,246 $ 1,769,656 Non-cash debt discount in the form of issuance of equity instruments in conjunction with convertible notes $ 747,558 $ 2,815,743 Series-B Convertible Preferred Stock Issued 126,710 shares exchanged for notes payable and accrued interest $ 12,670,435 $ — 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 consolidated financial statements. F- 6 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 1 – Business Organization and Nature of Operations Splash Beverage Group (“the Company” or “Splash”), is a Nevada corporation originally incorporated in the State of Ohio in1992. Splash specialized in the manufacturing process, distribution, and sales and marketing of various beverages across multiple channels. Splash operated in both the non-alcoholic and alcoholic beverage segments. Additionally, Splash operates its own vertically integrated B-to-B and B-to-C E-commerce distribution platform called Qplash. On December 24, 2020, the Company consummated an Asset Purchase Agreement (the “Copa APA”) with Copa DI Vino ® Corporation (“CdV”), to purchase certain assets and assume certain liabilities that comprise the Copa DI Vino ® business for a total purchase price of $ 5,980,000 , payable in the combination of $ 2,000,000 in cash (“Cash Consideration”), $ 2,000,000 convertible promissory note (the “Convertible Note”) to Seller and a variable number of shares of the Company’s Common Stock based on a attainment of revenue hurdles. CdV is one of the leading producers of premium wine by the glass in the United States with its primary offices and facilities in The Dalles, Oregon. On February 2021, Management initiated a plan to divest its CMS business. As a result, the assets and operations of CMS have been retrospectively reflected as discontinued operations. On November 12, 2021 the Company changed its state of Domicile from Colorado to Nevada. In coordination with up listing to the NYSE on June 11, 2021 the Company consummated a 1.0 for 3.0 reverse stock split. All Common Stock shares stated herein have been adjusted to reflect the split. Splash Beverage Group, Inc. historical mission was to identify, acquire, and build early stage or under-valued beverage brands that have strong growth potential within its distribution system. Splash’s distribution system was comprehensive in the US and is also seeking to expand to select attractive international markets. Through its division Qplash, Splash’s distribution reach included e-commerce access to both business-to-business (B2B) and business-to-consumer (B2C) customers. Prior to pausing its operations in February 2025, Qplash marketed well known beverage brands to customers throughout the US that prefer delivery direct to their office, facilities, and or homes. On March 27, 2025, the Company implemented a 1.0 for 40.0 reverse stock split. All Common Stock shares stated herein have been adjusted to reflect the split. The purpose of this reverse split was to maintain the company’s listing on the NYSE American. On June 25, 2025, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with a third party (the “Seller”) under which the Seller sold certain water assets located in Costa Rica to the Company in exchange for $20 million of Series C Convertible Preferred Stock (the “Series C”). The Company issued the Series C to the Seller. Section 1.04 of the Asset Purchase Agreement required the Seller to deliver the water assets by December 31, 2025 or pay the Company $20 million in cash. Section 1.04 of the Asset Purchase Agreement further stated that failure to deliver either the water assets or the $20 million by December 31, 2025 rendered the Series C to be “null, void, and of no further force or effect.” The Seller failed to comply with either requirement. As a result, on April 14, 2026, the Board of Directors of the Company terminated the Asset Purchase Agreement and cancelled the Series C, effective December 31, 2025. Due to a lack of working capital, the Company has not generated revenue since February 2025. Currently, the Company’s operations are being conducted by its President, a full-time employee, its Chief Financial Officer, a part-time employee, and its controller, a consultant. Periodically, the President communicates with beverage industry people including former customers, distributors and suppliers. Due to its lack of adequate capital to acquire inventory , the Company has not generated revenue since February 2025. The Company purchased a small amount of inventory in December 2025 in advance of the selection of the Company’s tequila as the house tequila for Senor Frog in certain markets. The Company intends to further its commercialization of its beverage business upon its receipt of sufficient capital. In the interim, beyond the Senor Frog opportunity, the Company intends to focus its efforts on distribution of the Chispo brand tequila, and re-launching its Qplash platform primarily to provide an online supplement to sales of these products. F- 7 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies Basis of Presentation and Consolidation These consolidated financial statements include the accounts of Splash and its wholly owned subsidiaries, Holdings and Splash Mex, and CdV. All intercompany balances have been eliminated in consolidation. Our investment in Salt Tequila USA, LLC is accounted for at cost, as the company does not have the ability to exercise significant influence. Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP). Certain reclassifications have been made to the prior period financial statements to conform to the current period classifications. These reclassifications had no impact on net loss. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CORRECTION OF PRIOR PERIOD ERROR The Company identified a material prior period error in the Consolidated Balance Sheet and Statement of Stockholders Equity recognition of water rights. On June 25, 2025, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with a third party (the “Seller”) under which the Seller sold certain water assets located in Costa Rica to the Company in exchange for $20 million of Series C Convertible Preferred Stock (the “Series C”). The Company issued the Series C to the Seller. Section 1.04 of the Asset Purchase Agreement required the Seller to deliver the water assets by December 31, 2025 or pay the Company $20 million in cash. Section 1.04 of the Asset Purchase Agreement further stated that failure to deliver either the water assets or the $20 million by December 31, 2025 rendered the Series C to be “null, void, and of no further force or effect.” The Seller failed to comply with either requirement. As a result, on April 14, 2026, the Board of Directors of the Company terminated the Asset Purchase Agreement and cancelled the Series C effective December 31, 2025. The Company assessed the materiality of this change in presentation on prior period consolidated financial statements in accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” (ASC Topic 250, Accounting Changes and Error Corrections). Based on this assessment, the Company concluded that these error corrections in its Consolidated Statements of Cash Flows are to the previously presented consolidated financial statements. The corrections had an impact on the Consolidated Balance Sheet sand Consolidated Statements of Changes in Stockholders’ Equity, and notes to these consolidated financial statements, for any previously presented interim periods ended June 30, 2025 and September 30, 2025. Accordingly, the Company corrected the previously reported errors in the annual report for the years ended December 31, 2025 and 2024 in this Annual Report on Form 10-K. The financial reporting periods affected by this error include the Company’s previously reported unaudited consolidated financial statements for the periods ended June 30, 2025 and September 30, 2025. In addition, the Company expects to present the corrected interim 2025 amounts in its 2026 consolidated interim financial statements upon the filing of each of its Quarterly Reports on Form 10-Q on a year-to-date basis as a correction to applicable 2025 periods. A summary of the immaterial corrections to the Company’s previously reported audited consolidated financial statements follows. Corrected Consolidated Balance Sheet and Statement of Stockholder equity for the periods listed below: Corrected Consolidated Balance Sheet and Statement of Stockholder equity June 30, 2025 As Reported Correction As Corrected Water rights $ 20,000,000 $ ( 20,000,000 ) $ — Subscriptions receivable $ — $ 20,000,000 $ 20,000,000 September 30, 2025 As Reported Correction As Corrected Water rights $ 20,000,000 $ ( 20,000,000 ) $ — Subscriptions receivable $ — $ 20,000,000 $ 20,000,000 Cash Equivalents and Concentration of Cash Balance We consider all highly liquid securities with an original maturity of three months or less to be cash equivalents. We had no cash equivalents at December 31, 2025 or December 31, 2024. At December 31, 2025 and December 31, 2024, the Company’s cash on deposit with financial institutions had not exceeded federally insured limits of $ 250,000 . Accounts Receivable and Allowance for Doubtful Accounts Accounts receivables are carried at their estimated collectible amounts and are periodically evaluated for collectability based on past credit history with clients and other factors. We establish provisions for losses on accounts receivable on the basis of loss experience, known and inherent risk in the account balance, and current economic conditions. At December 31, 2025 and December 31, 2024, our accounts receivable amounts are reflected net of allowances of $ 15,748 and $ 396,855 , respectively. F- 8 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies, continued Inventory Inventory is stated at the lower of cost or net realizable value, accounted for using the weighted average cost method. During the year ended December 31, 2025, the Company wrote off approximately $0.5 million of inventory due to product expiration, as the inventory was determined to be unsaleable and had no recoverable value. The inventory balances at December 31, 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, transportation, and warehousing. We establish provisions for excess or inventory near expiration based on management’s estimates of forecast turnover of inventories on hand and under contract. A significant change in the timing or level of demand for certain products as compared to forecast amounts may result in recording additional provisions for excess or expired inventory in the future. Provisions for excess inventory are included in cost of goods sold and have historically been adequate to provide for losses on inventory. We manage inventory levels and purchase commitments in an effort to maximize utilization of inventory on hand and under commitments. The amount of our reserve was $ 0 and $ 621,178 at December 31, 2025 and December 31, 2024, respectively. Property and Equipment We record property and equipment at cost when purchased. Depreciation is recorded for property, equipment, and software using the straight-line method over the estimated economic useful lives of assets, which range from 3-20 years. Company management reviews the recoverability of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount of a long-lived asset might not be recoverable. The Company disposed of Copa Di Vino fixed assets during the year ended December 31, 2025 and recognized a loss of approximately $ 43,812 on the disposal. Depreciation expense totaled $ 148,070 and $ 148,229 for the years ended December 31, 2025 and 2024 respectively. Property and equipment consisted of the following: Schedule of property and equipment 2025 2024 Auto 45,420 45,420 Machinery & equipment — — Buildings & Tanks — — Leasehold improvements — — Computer Software 5,979 5,979 Office furniture & equipment 1,500 1,500 Total cost 52,899 52,899 Accumulated depreciation ( 39,973 ) ( 30,689 ) Property, plant & equipment, net 12,926 22,210 Excise taxes The following taxes are paid when we sell tequila or other alcoholic beverages. The Company pays alcohol excise taxes based on product sales to both the Oregon Liquor Control Commission and to the U.S. Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau (TTB). The Company also pays taxes to the State of Florida – Division of Alcoholic Beverages and Tobacco. The Company is liable for the taxes upon the removal of product from the Company’s warehouse on a per gallon basis. The federal tax rate is affected by a small winery tax credit provision which decreases based upon the number of gallons of wine production in a year rather than the quantity sold. Fair Value of Financial Instruments Financial Accounting Standards (“FASB”) guidance specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: Level 1 - 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. F- 9 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies, continued Level 2 - 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). Level 3 - 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 consolidated financial statements approximate fair values at December 31, 2025 and December 31, 2024, consistent with recent negotiations of notes payable and due to the short duration of maturities. The following table presents the derivative financial instruments, the Company’ s only financial liabilities, measured and recorded at fair value on the Company ’ s consolidated balance sheet on a recurring basis, and their level within the fair value hierarchy as of December 31, 2025 and December 31, 2024: Schedule of derivative financial instruments Balance December 31, 2024 $ — Creation of derivative liability 554,258 Change in value 20,406 Reclassification to equity ( 385,082 ) Balance December 31, 2025 $ 189,582 December 31, 2025 Schedule of derivative liability Amount Level 1 Level 2 Level 3 Embedded conversion derivative liability $ $ — $ — $ 189,582 Total $ $ — $ — $ 189,582 December 31, 2024 Amount Level 1 Level 2 Level 3 Embedded conversion derivative liability $ — $ — $ — $ — Total $ — $ — $ — $ — The table below shows the option-pricing model inputs used by the Company to value the derivative liability at each measurement date: Schedule of option-pricing model inputs Year ended December 31, 2025 Year ended December 31, 2024 Expected term . 50 years — Expected average volatility 109 % - 122 % — Expected dividend yield — — Risk-free interest rate 4.43 % — Revenue Recognition We recognize revenue under ASC 606, Revenue from Contracts with Customers (Topic 606). This guidance sets forth a five-step model which depicts the recognition of revenue in an amount that reflects what we expect to receive in exchange for the transfer of goods or services to customers. F- 10 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies, continued We recognize revenue when our performance obligations under the terms of a contract with the customer are satisfied. Product sales occur once control of our products is transferred upon delivery to the customer. Revenue is measured as the amount of consideration that we expect to receive in exchange for transferring goods and is presented net of provisions for customer returns and allowances. The amount of consideration we receive and revenue we recognize varies with changes in customer incentives we offer to our customers and their customers. Sales taxes and other similar taxes are excluded from revenue. Distribution expenses to transport our products, and warehousing expense after manufacture are accounted for in Other General and Administrative cost. Cost of Goods Sold Cost of goods sold include the costs of products, packaging, transportation, warehousing, and costs associated with valuation allowances for expired, damaged or impaired inventory. The cost of transportation from production site to other 3 rd party warehouses or customer is included in Other General and Administrative cost. Other General and Administrative Expenses Other General and Administrative expenses include Amazon selling fees, cost of transportation from production site to other 3 rd party warehouses or customers, insurance cost, consulting cost, legal and audit fees, investor relations expenses, travel & entertainment expenses, occupancy cost and other cost. Stock-Based Compensation We account for stock-based compensation in accordance with ASC 718,” Compensation - Stock Compensation” . Under the fair value recognition provisions, cost is measured at the grant date based on the fair value of the award and is recognized as expense ratably over the requisite service period, which is generally the option vesting period. We use the Black-Scholes option pricing model to determine the fair value of stock options. We early adopted ASU 2018-07, “Improvements to Nonemployee Share-Based Payment Accounting”, which aligns accounting treatment for such awards to non-employees with the existing guidance on employee share-based compensation in ASC 718. We measure stock-based awards at the grant-date fair value for employees, directors and consultants and recognize compensation expense on a straight-line basis over the vesting period of the award. Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of our Common Stock, and for stock options and warrants, the expected life of the option and warrant, and expected stock price volatility and exercise price. We used the Black-Scholes option pricing model to value its stock-based awards. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The expected life of stock options/warrants were estimated using the “simplified method,” which calculates the expected term as the midpoint between the weighted average time to vesting and the contractual maturity, we have limited historical information to develop reasonable expectations about future exercise patterns. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For stock price volatility, we use comparable public companies as a basis for its expected volatility to calculate the fair value of award. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the award. The estimation of the number of awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from the Company’s current estimates, such amounts are recognized as an adjustment in the period in which estimates are revised. F- 11 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies, continued Income Taxes We use the liability method of accounting for income taxes as set forth in ASC 740,” Income Taxes” . Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. We record a valuation allowance when it is not more likely than not that the deferred tax assets will be realized. Company management assesses its income tax positions and records tax benefits for all years subject to examination based upon its evaluation of the facts, circumstances and information available at the reporting date. In accordance with ASC 740-10, for those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, our policy is to record the largest amount of tax benefit that is more likely than not to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50 % likelihood that a tax benefit will be sustained, no tax benefit will be recognized in the financial statements. Company management has determined that there are no material uncertain tax positions at December 31, 2025 and December 31, 2024. See note 13. 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 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 anti-dilutive Common Stock equivalents, including warrants to purchase shares of Common Stock and warrants granted by our Board that have not been exercised totaling 3,424,996 . Schedule of net loss per common share Net income/(loss) per common shares: Year ended December 31 2025 Year ended December 31, 2024 Net income/(loss $ ( 25,282,186 ) $ ( 23,658,787 ) Dividends on Series A-1 and B preferred stock ( 831,944 ) — Weighted-average shares outstanding 2,178,397 1,338,428 Net loss per common share $ ( 11.97 ) $ ( 17.68 ) Advertising Historically, we conducted advertising for the promotion of our products. In accordance with ASC 720-35, advertising costs are charged to operations when incurred. We recorded advertising expense of $ 64,811 and $ 486,942 for the years ended December 31, 2025 and 2024, respectively. Goodwill and other intangibles Goodwill represents the excess of acquisition cost over the fair value of the net assets acquired and is not subject to amortization. The Company reviews goodwill annually in the fourth quarter for impairment or when circumstances indicate carrying value may exceed the fair value. This evaluation is performed at the reporting unit level. If a qualitative assessment indicates that it is more likely than not that the fair value is less than carrying value, a quantitative analysis is completed using either the income or market approach, or a combination of both. The income approach estimates fair value based on expected discounted future cash flows, while the market approach uses comparable public companies and transactions to develop metrics to be applied to historical and expected future operating results. F- 12 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies, continued 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 entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with a third party (the “Seller”) under which the Seller sold certain water assets located in Costa Rica to the Company in exchange for $20 million of Series C convertible Preferred Stock (the “Series C”). The Company issued the Series C to the Seller. Section 1.04 of the Asset Purchase Agreement required the Seller to deliver the water assets by December 31, 2025 or pay the Company $20 million in cash. Section 1.04 of the Asset Purchase Agreement further stated that failure to deliver either the water assets or the $20 million by December 31, 2025 rendered the Series C to be “null, void, and of no further force or effect.” The Seller failed to comply with either requirement. As a result, on April 14, 2026, the Board of Directors of the Company terminated the Asset Purchase Agreement and cancelled the Series C, effective December 31, 2025. In accordance with ASC 350, Intangibles – Goodwill and Other, the Company performed an impairment test for its Brand Name, Customer Relationships and license. Based on this assessment, the Company determined that the carrying value of the intangible asset exceeded its fair value, resulting in an impairment loss of $ 4.3 million during the year ended December 31, 2024. The impairment loss of $ 4.3 million during the year ended December 31, 2024 was recorded in the statement of operations within Selling, General, and Administrative Expenses. This impairment was primarily driven by the decline in the Company’s sales and was calculated using the present value of future cash flows. Schedule of statement of operations within Selling, General, and Administrative Expenses December 31, 2024 Gross Amount Accumulated Amortization Loss on Impairment Net Carrying Value Finite: Goodwill $ 256,823 — $ 256,823 $ — Brands $ 4,459,000 $ 1,189,071 $ 3,269,929 $ — Customer Relationships 957,000 255,200 701,800 $ — License 360,000 264,488 95,512 $ — Total Intangible Assets $ 6,032,823 $ 1,708,759 $ 4,324,064 $ — Long-lived assets The Company evaluates long-lived assets for impairment on an annual basis, when relocating or closing a facility, or when events or changes in circumstances may indicate the carrying amount of the asset group, generally an individual warehouse, may not be fully recoverable. For asset groups held and used, including warehouses to be relocated, the carrying value of the asset group is considered recoverable when the estimated future undiscounted cash flows generated from the use and eventual disposition of the asset group exceed the respective carrying value. In the event that the carrying value is not considered recoverable, an impairment loss is recognized for the asset group to be held and used equal to the excess of the carrying value above the estimated fair value of the asset group. For asset groups classified as held-for-sale (disposal group), the carrying value is compared to the disposal group’s fair value less costs to sell. The Company estimates fair value by obtaining market appraisals from third party brokers or using other valuation techniques. F- 13 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 2 – Summary of Significant Accounting Policies, continued Foreign Currency Gain/Losses Foreign subsidiaries’ functional currency is the local currency of operations and the net assets of foreign operations are translated into U.S. dollars using current exchange rates. Gain or losses from these translation adjustments are included in the consolidated statement of operations and other comprehensive (loss) income as foreign currency translation gains or losses. Translation gains and losses that arise from the translation of net assets from functional currency to the reporting currency, as well as exchange gains and losses on intercompany balances, are included in Other Comprehensive Income. The Company incurred a foreign currency translation net loss during the year ended December 31, 2025 of $ 47,352 and a foreign currency translation net gain during the year ended December 31, 2024 of $ 97,763 . Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity ’ s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2025. Adoption of the standard will be applied on a prospective basis and retrospective application to all periods presented is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its future consolidated financial statements and related disclosures. In November 2024, the FASB issued Accounting Standards Update 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ( “ ASU 2024-03 ” ). ASU 2024-03 is intended to enhance the disclosures for expenses for all public entities in accordance with ASC Topic 220, Income Statement-Reporting Comprehensive Income. ASU 2024-03 addresses investor requests for more detailed information about expenses, specifically cost of sales and selling, general, and administrative expenses. ASU 2024-03 requires a public entity to disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption presented on the face of the income statement as well as a qualitative description of the amounts remaining in the relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 also requires a public entity to disclose the total amount of selling expenses and the entity ’ s definition of selling expenses. ASU 2024-03 also requires a public entity to disclose the total amount of selling expenses and the entity ’ s definition of selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. A public entity should apply ASU 2024-03 either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of ASU 2024-03 on its future consolidated financial statements and related disclosures. All other newly issued but not yet effective accounting pronouncements have been deemed to be not applicable or immaterial to the Company. F- 14 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 3 – Liquidity, Capital Resources and Going Concern Considerations The Company’s consolidated financial statements have been prepared on the basis of US GAAP for a going concern, on the premise that the Company is able to meet its obligations as they come due in the normal course of business. The Company sustained a net loss of approximately $25.0 million and negative cash flows from operating activities of approximately $ 5.2 million for the year ended December 31, 2025. To date the Company has generated cash flows from issuances of equity and indebtedness. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of December 31, 2025, the Company has incurred significant losses from operations and has experienced negative cash flows from operating activities. Additionally, the Company’s current liabilities exceed its current assets, resulted in a working capital deficit. During 2025, the Company received approximately $ 4.2 million from the issuance of debt and $1.3 million from sale of preferred stock and warrants. During 2024, the Company received approximately $ 9.5 million from the issuance of debt. Management’s plans in regard to these matters include actions to sustain the Company’s operations, such as seeking additional funding to meet its obligations and implement its business plan. The Company has issued preferred stock as part of its strategy to regain compliance with the NYSE American listing standards and reduce debt. These preferred shares, specifically Series B 12% convertible preferred stock, were issued in exchange for promissory notes. The preferred stock offers a 12% cumulative dividend and potential conversion to Common Stock, subject to stockholder approval and an increase in authorized Common Stock. In June 2025, the Company exchanged approximately $12.67 million outstanding promissory notes and accrued interest for 126,710 shares of Series B Preferred Stock. By converting debt into equity, the Company enhanced its balance sheet, reduced interest expense, and improved its stockholder equity position in furtherance of its goal of complying with exchange requirements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Company is unable to continue as a going concern, adjustments would be necessary to the carrying values of its assets and liabilities and the reported amounts of revenues and expenses could be materially affected. F- 15 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 4 – Notes Payable, Related Party Notes Payable, and Revenue Financing Arrangements Notes payable are generally nonrecourse and secured by all Company owned assets. Schedule of notes payable Interest Rate December 31, 2025 December 31, 2024 Notes Payable and Convertible Notes Payable In December 2020, the Company entered into a 56- month loan with a company in the amount of $ 1,578,237 . The loan requires payments of 3.75 % through November 2022 and 4.00 % through September 2025 of the previous month’s revenue. Note was due September 2025. Note is guaranteed by a related party see note 6. 17 % $ 188,839 $ 195,927 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 exchanged to Series B Preferred stock in June 2025. 7 % — 168,000 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 exchanged to Series B Preferred stock in June 2025. 7 % — 50,000 In May 2021, the Company entered into a six-month loan with an individual in the amount of $ 10,000 . The loan had an original maturity of October 2021 with principal and interest due at maturity. The loan due date was extended to October 31, 2024. . 7 % 10,000 10,000 In August 2022, the Company entered into a 56-months auto loan in the amount of $ 45,420 . 2.35 % 13,514 23,372 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 $ 40.00 per share. The loans were exchanged to Series B Preferred stock in June 2025. 12 % — 2,600,000 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 exchanged to Series B Preferred stock in June 2025. 12 % — 1,000,000 F- 16 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 $ 40.00 per share. The loans were exchanged to Series B Preferred stock in June 2025. 12 % — 800,000 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 $ 40.00 per share. The loans were exchanged to Series B Preferred stock in June 2025. 12 % — 100,000 In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $ 100,000 . The note included 50 % warrant coverage. The loan matures in January 2025 with principal and interest due at maturity with conversion price of $ 40.00 per share. The loan was exchanged to Series B Preferred stock in June 2025. 12 % — 100,000 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 matured in August 2024 with principal and interest due at maturity with a conversion price of $ 34.00 per share and is non-interest bearing. — % 43,000 43,000 In October 2023, the Company entered into a three-month loan with an individual in the amount of $ 500,000 . The loan matures in January 2024 with principal and interest due at maturity. The loan due date was extended to June 2025. The Required payment was not made. 10 % 500,000 500,000 In October 2023, the Company entered into a loan with an individual in the amount of $ 130,000 . The loan requires payment of 17% of daily Shopify sales. — % 58,612 66,278 In October 2023, the Company entered into a eighteen-month loan with individuals totaling in the amount of $ 1,250,000 . The note included 100 % warrant coverage. The loan matured in April 2025 with principal and interest due at maturity with conversion price of $ 40.00 per share. The loan was fully converted to Common Stock in January 2025 12 % — 1,143,449 F- 17 In January 2024, the Company entered into a 18-month loan with an individual in the amount of $ 250,000 . The note included 100 % warrant coverage. The loan had a maturity of July 2025 with principal and interest due at maturity with conversion price of $ 20.00 per share. The loan was exchanged to Series B Preferred stock in June 2025. 12 % — 250,000 In February 2024, the Company entered into a 18-month loan with an individual in the amount of $ 150,000 . The note included 100 % warrant coverage. The loan had a maturity of August 2025 with principal and interest due at maturity with conversion price of $ 16.00 per share. The loan was exchanged to Series B Preferred stock in June 2025. 12 % — 150,000 In February 2024, the Company entered into a 6-month loan with an individual in the amount of $ 315,000 . The note included 60 % warrant coverage. The loan had a maturity of August 2024 with principal and interest due at maturity with conversion price of $ 15.20 per share. The loan was exchanged to Series B Preferred stock in June 2025. 12 % — 315,000 In February 2024, the Company entered into a 18-month loan with an entity in the amount of $ 250,000 . The note included 100 % warrant coverage. The loan matures in August 2025 with principal and interest due at maturity with conversion price of $ 18.40 per share. The loan was exchanged to Series B Preferred stock in June 2025. 12 % — 250,000 In April 2024, the Company entered into a commercial financing agreement in the amount of $ 815,000 and to be paid weekly until the loan is paid in full. — % 331,335 357,127 In May 2024, the Company entered into an eighteen-month loan with individuals totaling in the amount of $ 1,850,000 . The note included warrant coverage. The loan matures in November 2026 with principal and interest due at maturity with conversion price of $ 16.00 per share. The loan was exchanged to Series B Preferred stock in June 2025 — % — 1,850,000 In June 2024, the Company entered into a revenue purchase agreement in the amount of $ 250,000 . 4% of revenue will be paid weekly until the loan is paid in full. — % 13,459 181,341 In July 2024, the Company entered into a revenue purchase agreement in the amount of $ 178,250 . The loan matures in April 2025. The loan was fully converted to Common Stock in January 2025. 22 % — 91,999 F- 18 In July 2024, the Company entered into a revenue purchase agreement in the amount of $ 120,750 . The loan matures in May 30, 2025. The loan was fully converted to Common Stock in January 2025 22 % — 120,750 In August 2024, the Company entered into a 5-year loan with individuals totaling in the amount of $ 500,000 . The loan matures in September 2029 with principal and interest due at maturity with conversion price of $ 14.00 per share. The loans were exchanged to Series B Preferred stock in June 2025. 9 % — 500,000 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 exchanged to Preferred stock in June 2025. 12 % — 1,400,000 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 $ 15.20 per share. The loan was exchanged to Series B Preferred stock in June 2025. 12 % — 100,000 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. — % 10,861 82,261 In September 2024, the Company entered into an agreement with individuals totaling in the amount of $ 590,000 . There is no stated maturity, the proceeds of which are to be used for a future acquisition. $290,000 was exchanged to Series B Preferred stock in June 2025 — % 300,000 590,000 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 were to be used for a future acquisition which did not occur. — % 950,000 950,000 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. — % 256,713 311,713 In December 2024, the Company entered into a merchant cash advance agreement in the amount of $ 111,300 to be paid weekly until the loan is paid in full. The loan was fully converted to Common Stock. — % — 111,300 F- 19 In December 2024, the Company entered into a twelve-month loan with an individual in the amount of $ 225,000 . The loan matured in December 2025 with principal and interest due at maturity. 12 % 225,000 225,000 In January 2025, the Company entered into a 12-month loan with individuals in the amount of $ 350,000 . The note included 100 % warrant coverage. The loan had a maturity of January 2026 with principal and interest due at maturity with conversion price of $ 10.00 per share. The loans of $150,000 were exchanged to Series B Preferred stock in June 2025. 12 % 200,000 — In July 2025, the Company entered into a convertible promissory note in the amount of $ 30,000 . The loans was due on August 31, 2025 12 % 30,000 — In August 2025, the Company entered into a convertible promissory note with individuals totaling in the amount of $ 241,280 . The loan had a maturity of May 2026 with principal and interest due at maturity. The loans are convertible at 75% multiplied by the lowest trading price for the Company’s common stock during the 10 trading day period ending on the latest complete trading day prior to the conversion date, subject to a 4.99% equity blocker. 22 % 241,280 — F- 20 In August 2025, the Company entered into a convertible promissory note in the amount of $ 183,280 . The loan had a maturity of June 2026 with principal and interest due at maturity. The loans are convertible at 75% multiplied by the lowest trading price for the Company’s common stock during the 10 trading day period ending on the latest complete trading day prior to the conversion date, subject to a 4.99% equity blocker 22 % 183,280 — In September 2025, the Company entered into a twelve-month loan with individuals totaling in the amount of $ 2,200,000 . The loan matures in September 2026 with principal and interest due at maturity and is convertible into the Company’s Common Stock at a conversion price equal to the lower of $ 1.75 and $ 0.01 above the closing price on the date of conversion. 0 % 2,200,000 — In November 2025, the Company entered into a twelve-month loan with individuals totaling in the amount of $ 500,000 . The loan matures in November 2026 with principal and interest due at maturity and is convertible into the Company’s Common Stock at a conversion price equal to the lower of $ 1.75 and $ 0.01 above the closing price on the date of conversion. 0 % 500,000 — Total notes payable $ 6,255,893 $ 14,635,517 Less notes discount ( 26,894 ) ( 3,031,917 ) Less current portion ( 6,225,581 ) ( 9,632,505 ) Long-term notes payable $ 3,418 $ 1,971,095 F- 21 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 4 – Notes Payable, Stockholder Notes Payable, and Revenue Financing Arrangements, continued Interest expense on notes payable was $ 2,253,260 and $ 3,702,611 for the years ended December 31, 2025 and 2024, respectively. Accrued interest was $ 2,282,528 and $ 3,610,329 at December 31, 2025 and December 31, 2024 , respectively. The Company’s effective interest rate was 22.85 % and 20.53 % for the years ended December 31, 2025 and December 31, 2024, respectively. The Company’s convertible note balances are convertible into 944,685 and 505,257 shares of Common Stock for the years ended December 31, 2025 and 2024. These amounts are reflective of the 1 for 40 reverse split. As of December 31, 2024, and December 31, 2023, the balance of the unamortized debt discount was $ 26,896 and 3,677,143 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 . Notes discount of $ 3,401,524 and $ 3,251,106 for the year ending December 31, 2025 and 2024 respectively is related to the discounted warrants and common shares issued in connection with the notes. In June 2025, the Company exchanged approximately $ 16.4 million of outstanding promissory notes for newly issued preferred equity. The Company did this exchange as part of its effort to regain compliance with the stockholder equity requirements of the NYSE American. By exchanging debt for equity, the Company enhances balance sheet, reduces interest expense, and improves stockholder equity position in furtherance of its goal of complying with exchange requirements. The exchange was the result of an agreement between note holders and the Company. The Company is still assessing the accounting impacts of these exchanges. Schedule of notes payable Interest Rate December 31, 2025 December 31, 2024 Stockholder Notes Payable In April 2024, revised Feb 2023 stockholder advance in the amount of $ 200,000 . The annual interest rate is 12 % with a conversion price of $ 0.35 per share. The revised note were exchanged to Series B Preferred stock in June 2025. 12 % — 200,000 Less current portion — ( 200,000 ) Long-term notes payable $ — $ — Interest expense on related party notes payable was $ 11,720 and $ 24,000 for the year ended December 31, 2025 and 2024, respectively. As of December 31, 2025, the Company’s convertible note balances are convertible into 6,126,419 shares of Common Stock F- 22 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 5 – Licensing Agreement and Royalty Payable 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 consolidated statement of operations and comprehensive loss relating to the termination of the licensing agreement. In connection with the Copa Asset Purchase Agreement, we acquired the license to certain patents from 1/4 Vin SARL (“1/4 Vin”). On February 16, 2018, the Copa DI Vino ® entered into three separate license agreements with 1/4 Vin SARL, (1/4 Vin). 1/4 Vin has the right to license certain patents and patent applications relating to inventions, systems, and methods used in 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. On April 4, 2025, the Company entered into a settlement agreement with CdV (the “Settlement Agreement”) under which the parties agreed to the settlement of two lawsuits brought by CdV against the Company in Oregon and Florida, and the Company agreed to pay CdV a total of $0.7 million with interest accruing at 12% per annum, with installment payments beginning on November 4, 2025 in monthly payments of $63,000 plus applicable accrued interest. The Settlement Agreement provides for certain events of default, the occurrence of which, subject to the Company’s right to cure within 15 days as to a payment default or 30 days with respect to other defaults, would entitle CdV to accelerate payment of the settlement amount, file suit against the Company and/or exercise its right to setoff against any funds or other property in CdV’s possession . See discontinued footnote 10 below. Note 6 – Stockholders’ Equity Common Stock On March 27, 2025, the Company implemented a 1.0 for 40.0 reverse stock split . The reverse stock split was authorized by the Company’s Board of Directors on March 14, 2025. All numbers of shares of Common Stock have been adjusted to reflect the split. The purpose of this reverse split was to ensure that the Company could meet the per share price requirements of the NYSE American. On May 1, 2024, the Company entered into a securities purchase agreement with certain accredited investors. Pursuant to such agreements, the Company sold: (i) senior convertible notes in the aggregate original principal amount of $1,850,000, convertible into up to 115,625 shares of Common Stock, subject to adjustments as provided in the Notes, (ii) 23,125 shares of Common Stock (the “Commitment Shares”), (ii) warrants to initially acquire up to an aggregate of 115,625 additional shares of Common Stock (the “Warrants”) at an exercise price of $34.0 per share . A convertible promissory note was issued to stockholder on April 15, 2024 for $200,000 at 12% with conversion price of $14.0 per share. The note included 14,286 warrants. The loan matured in July 2025 with principal and interest due semi-annually. Accrued interest of $ 27,370 was paid prior to August 15, 2024. F- 23 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 6 – Stockholders’ Equity, continued Preferred Stock 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. The Series A was automatically redeemed after the Company’s 2025 annual stockholders’ meeting. Voting Rights ● Series A-1 carries 180 votes per share. ● Series B and Series C do not carry any voting rights. Dividends ● Series A-1 and Series B carry a fixed 12% annual dividend, payable quarterly in arrears, in either cash or payment-in-kind (PIK) at the Company’s discretion. These dividends are mandatory and take priority over any dividends on Common Stock, regardless of whether Common Stock dividends are declared. ● Series C does not accrue dividends. Conversion into Common Stock ● Series A-1 is convertible into Common Stock at 80% of the VWAP, subject to a floor of $1.25 and a ceiling of $4.00. A-1 is convertible into a range of 262,500 to 840,000 Common Stock. ● Series B is also convertible at 80% of the VWAP, with a floor of $1.25 and a ceiling of $6.00 and is convertible into a range of 2,118,333 to 10,168,000 Common Stock. ● Series C is convertible at a fixed price of $3.00, resulting in the potential issuance of 6,666,667 Common Stock upon conversion. The parties agreed on April 9, 2026 that, notwithstanding anything in the Agreement or in any other agreements and documents between the parties to the contrary, the parties hereby agree to rescind and nullify the Transaction effective December 31, 2025. In the furtherance thereof, the Company hereby agrees to transfer the Purchased Assets to Utopia, and Utopia hereby agrees to surrender the Purchase Price consisting of 20,000 shares of the Company’ s Series C Convertible Preferred Stock which were issued to Utopia, to the Company, in each case effective as of December 31, 2025 Redemption – at the sole discretion of the Company ● Series A-1 and Series B are redeemable by the Company after two years from the date of issuance, for $1,050,000 and $12,700,000, respectively. ● Series C is not redeemable. F- 24 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 6 – Stockholders’ Equity, continued Seniority ● Series B is the most senior class (Seniority Level 1). ● Series A-1 ranks junior to Series B (Seniority Level 2). ● Series C is the most junior class (Seniority Level 3). In May - December 2025, the Company issued 1,300 shares of Series A-1 Preferred Stock in exchange for approximately $1,300,000, of which 150 shares were issued during July 2025 in exchange for $150,000. Series A-1 shares are convertible into common stock, subject to shareholder approval. 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. In June 2025, the Company issued 1,000 shares of Preferred A Stock to Robert Nistico, Director, a related party. Preferred A is super voting preferred, not convertible into common stock. Mr. Nistico is the sole holder of Preferred A. The Company redeemed all 1,000 shares of Preferred A Stock. As of December 31, 2025, no shares of Preferred A Stock were issued and outstanding. 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. The Series C were subsequently cancelled. See Note 1. During the year ended December 31, 2025, 3,979 shares of Preferred-B were converted into 328,779 shares of common stock. Stock Plans A summary of the Company’s stock option plan and changes during the year ended is as follows: Schedule of stock option activity Plan Category No. of Shares to be Issued Upon Exercise or Vesting of Outstanding Stock Options Weighted Average Exercise Price of Outstanding Stock Options Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Equity compensation plan approved by board of directors 216,212 $ 29.60 44,534 Total 216,212 $ 29.60 44,534 F- 25 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 6 – Stockholders’ Equity, continued 2020 Plan adjusted for the 1 for 40 reverse split. In July 2020, the Board adopted the 2020 Stock Incentive Plan (the “2020 Plan”), which provides for the grant of Options, Restricted Stock Awards, Stock Appreciation Rights, Performance Units and Performance Bonuses to consultants and eligible recipients. The total number of shares that may be issued under the 2020 Plan was 152,383 as of December 31, 2025. 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. In October 2023, the stockholders voted to increase the number of shares issuable under the Plan to 7.5%. At January 1, 2024 and 2025, the number of shares issuable under the 2020 Plan increased by 83,119 and 125,238 shares, respectively. The following is a summary of the Company’s stock option activity: Schedule of stock option activity Options 2025 2024 Stock options Weighted average Stock options Weighted average Balance – January 01 216,212 $ 29.60 106,475 $ 45.04 Granted 15,000 6.04 112,125 14.80 Exercises — — — — Cancelled 26,958 10.54 2,388 30.8 Balance – December 204,254 $ 30.39 216,212 $ 29.60 Exercisable - December 31 189,827 $ 30.21 176,520 $ 32.40 * These prices are reflective of the price modification made on April 24, 2023. The Company determined the grant date fair value of the options granted using the Black Scholes Method using the following assumptions: Schedule of stock option assumption December 31, 2025 December 31, 2024 Risk-free interest rates 4 % 4.64 % Exercise price $ 6.04 $ 13.20 – 21.60 Expected life 10 years 5 years Expected volatility 254 % 227 % - 256 % Expected dividends — — The fair value of stock options granted in 2025 has been measured at 15,000 shares using the Black-Scholes option pricing model with the following assumptions: exercise price $ 6.04 , expected life 10 years, expected volatility 254 %, expected dividends 0 %, risk free rate 4.0 %. F- 26 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 6 – Stockholders’ Equity, continued During the year ended December 31, 2025, the fair value of options granted amounted to $ 90,531 . As of December 31, 2025, the intrinsic value of stock options outstanding and exercisable was $ 0 . Stock compensation expense for the years ended December 31, 2025 and 2024 was $ 264,981 and $ 1,411,883 , respectively. On July 31, 2025, the Board of Directors approved the issuance of 5,150,000 warrants to directors, officers, and employees with an exercise price of $0.80 per share and a ten-year term. The awards included grants to directors, the President, the then Chief Financial Officer, and certain employees, with vesting terms consistent with the award agreements. All warrants are fully vested except those issued to the former Chief Executive Officer, Robert Nistico, for whom one-third (250,000) was vested as of December 31, 2025 and 500,000 vest in equal 62,500 share increments quarterly over a two-year period with the first such vesting date being October 31, 2025. As such, as of December 31, 2025, 437,500 of Mr. Nistico’s warrants were vested and 312,500 were unvested. For the year ended December 31, 2025, the Company recorded stock-based compensation expense of $ 8,456,951 , measured using the Black-Scholes option pricing model with the following assumptions: exercise price $ 1.40 , expected life 5 years, expected volatility 254 %, expected dividends 0 %, risk free rate 4.37 %. The following is a summary of the Company’s warrant activity and reflects the 1 for 40 reverse split. Schedule of warrant activity Warrants December 31, 2025 December 31, 2024 Number of Warrants Weighted Average Exercise Price Number of Warrants Weighted Average Exercise Price Balance – beginning of the year 641,588 $ 43.79 354,502 $ 62.76 Granted 6,372,084 1.40 287,086 20.80 Exercises — — — — Cancelled — — — — Balance - end of the year 7,013,672 $ 5.29 641,588 $ 43.79 The fair value of warrants recognized in the period has been estimated using the Black-Scholes option pricing model with the following assumptions. Schedule of assumptions used in Black-Scholes option pricing model December 31, 2025 December 31, 2024 Risk-free interest rates 4.37 % 4.64 % Exercise price $ 0.8 – 4.0 $ 10.0 – 34.0 Expected life 5 years 5 years Expected volatility 254 % 254 % Expected dividends — — F- 27 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 7 – Related Parties During the normal course of business, the Company incurred expenses related to services provided by its then Chief Executive Officer or Company expenses paid by its then Chief Executive Officer, resulting in related party payables. 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, its then Chief Executive Officer, as 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 to Decathlon with a balance of $ 2,325,544 at December 31, 2025 and $ 1,995,950 at December 31, 2024. On September 2024 and November 2024 the Company also entered into a Merchant Cash Advance Agreement (the “Loan and Security Agreement”) by and among the Company, Robert Nistico, as an additional Guarantor and each of the subsidiary Guarantors from time-to-time party thereto, and with Timeless Funding LLC (the “Lender”). The Loan and Security Agreement provided a loan of $325,000 and $340,000, with the gross and interest amount of $172,250 and $173,400 respectively with the Lender (the “Credit Facility”). There was $497,188 and $311,713 respectively outstanding under this agreement as of December 31, 2025. There were related party advances from our then Chief Executive Officer, Robert Nistico, in the amount of approximately $ 0.4 million outstanding as of December 31, 2025 and approximately $ 0.4 million as of December 31, 2024. The advances bear interest at rates ranging from 4% to 7% per annum, and interest expense was accrued in accordance with the terms of the arrangements. In June 2025, the Company issued 1,000 shares of Preferred A Stock to Robert Nistico, our then Chief Executive Officer, a related party. Preferred A is super voting preferred, not convertible into Common Stock. Mr. Nistico is the sole holder of Preferred A. As of December 31, 2025 the shares were redeemed and cancelled by the Company. On July 31, 2025 as subsequently modified, the Company’s Board of Directors granted Robert Nitisco 750,000 five-year Warrants , exercisable at $0.80 per share. See Note 6. Note 8 – Investment in Salt Tequila USA, LLC The Company has a marketing and distribution agreement with SALT Tequila USA, LLC (“SALT”) for the manufacturing of our Tequila product line in Mexico. The Company has a 22.5 % percentage ownership interest in SALT, this investment is carried at cost less impairment, the investment does not have a readily determinable fair value. The Company has the right to increase our ownership to 37.5 %. SALT Tequila was not produced or sold by the Company during the year ended December 31, 2025. It’s unlikely the Company will continue selling SALT in the future. Note 9 – Lease 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 fixed. Any variable lease payments, including utilities, and common area maintenance are expensed during the period incurred. Variable lease costs were immaterial for the year ended December 31, 2025 and 2024. 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. F- 28 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Operating lease expense is recognized on a straight-line basis over the lease term and is included in operating expense on the Company’s condensed consolidated statement of operations and comprehensive loss. Operating lease cost was $ 322,020 and $ 360,409 during the twelve-month period ended December 31, 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 December 31, 2024. Schedule of operating lease liabilities Undiscounted Future Minimum Lease Payments Operating Lease 2026 52,703 2027 2,976 Total 55,679 Amount representing imputed interest ( 1,983 ) Total operating lease liability 53,696 Current portion of operating lease liability ( 50,720 ) Operating lease liability, non-current $ 2,976 The table below presents information for lease costs related to our operating leases at December 31, 2025: Schedule of lease costs Operating lease cost: Amortization of leased assets $ 308,968 Interest of lease liabilities 13,052 Total operating lease cost $ 322,020 The table below presents lease- related terms and discount rates at December 31, 2025: Schedule of lease- related terms and discount rates Remaining term on leases 10.75 months Incremental borrowing rate 4.17 % NOTE 10 – Discontinued operations On December 24, 2020, the Company entered into an Asset Purchase Agreement with CdV, pursuant to which the Company purchased certain assets and assumed certain liabilities that comprise the CdV business for a total purchase price of $ 5,980,000 , payable in the combination of $ 2,000,000 in cash, a $ 2,000,000 convertible promissory note to CdV and a variable number of shares of the Company’s common stock based on an attainment of revenue hurdles. On April 4, 2025, the Company entered into a settlement agreement with CdV (the “Settlement Agreement”) under which the parties agreed to the settlement of two lawsuits brought by CdV against the Company in Oregon and Florida, and the Company agreed to pay CdV a total of $0.7 million with interest accruing at 12% per annum, with installment payments beginning on November 4, 2025 in monthly payments of $ 63,000 plus applicable accrued interest. The Settlement Agreement provides for certain events of default, the occurrence of which, subject to the Company’s right to cure within 15 days as to a payment default or 30 days with respect to other defaults, would entitle CdV to accelerate payment of the settlement amount, file suit against the Company and/or exercise its right to setoff against any funds or other property in CdV’s possession. F- 29 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Due to the lack of working capital to fund operations, it formed a license agreement with a 3 rd party to allow the continued production and flow of product to the customers so that it could later be recovered as the funding challenges were then deemed as only temporary. As the lack of funding persisted through the full year of 2025, the Company subsequently determined it no longer intends to relaunch the product line. As a result, accordingly, the Company has classified the related assets and liabilities associated with its CdV as discontinued operations in its consolidated balance sheets and the results of its logistics and transportation services business has been presented as discontinued operations in its consolidated statements of operations for all periods presented as the discontinuation of its business had a major effect on its operations and financial results. Unless otherwise noted, discussion in the other notes to consolidated financial statements refers to the Company’s continuing operations. The following table presents the major classes of assets and liabilities of the discontinued operations related to the Subsidiaries: Schedule of major classes of assets and liabilities of the discontinued operations December 31, December 31, 2025 2024 Assets of discontinued operations: Cash $ — $ 1,557 Accounts receivable, net — 204,863 Prepaid Expenses — 92,297 Inventory — 573,957 PP&E — 182,598 Total assets of discontinued operations $ — $ 1,055,272 Liabilities of discontinued operations: Notes payable, current portion $ 726,625 $ — Accounts payable 754,087 1,594,561 Accrued expenses — 45,642 Lease liabilities, current portion — 246,328 Liabilities of discontinued operations, current portion 1,480,712 1,886,531 Total liabilities of discontinued operations $ 1,480,712 $ 1,886,531 The following table summarizes the results of operations of discontinued operations: Year Ended December 31, 2025 2024 Revenues $ 369,666 $ 3,353,935 Cost of revenues, excluding depreciation and amortization 416,913 2,878,688 Gross loss ( 47,247 ) 475,247 Operating expenses ( 669,759 ) ( 2,296,979 ) Impairment loss — ( 4,324,064 ) Other expenses ( 168,557 ) ( 1,681 ) Loss from discontinued operations $ ( 885,563 ) $ ( 6,147,477 ) Note 11 – Segment Reporting We have two reportable operating segments: (1) the manufacture and distribution of non-alcoholic and alcoholic beverages, and (2) the retail sale of beverages and groceries online. These operating segments are managed separately and each segment’s major customers have different characteristics. Segment Reporting is evaluated by our chief operating decision maker, which continues to be our chief executive officer. F- 30 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Schedule of segment reporting information Revenue For the Year Ended, December 31, 2025 For the Year Ended, December 31, 2024 Splash Beverage 14,054 155,123 E-Commerce 59,012 646,150 Total Revenues, $ 73,066 $ 801,273 Segment operating loss: 2025 2024 Splash Beverage ( 13,183,573 ) ( 8,555,258 ) E-Commerce ( 1,002,647 ) ( 345,182 ) Total segment operating loss $ ( 14,186,220 ) $ ( 9,900,440 ) Reconciliation of segment loss to corporate loss: 2025 2024 Other income/expense $ 234,996 $ ( 871 ) Amortization of debt discount ( 1,844,694 ) ( 3,677,143 ) Interest income & expense ( 2,523,260 ) ( 3,700,620 ) Loss on Extinguishment of debt ( 5,560,482 ) — Loss on inventory write off ( 449,205 ) — Change in FV of Derivative ( 20,406 ) Legal reserve — ( 330,000 ) Loss before income tax $ ( 24,349,271 ) $ ( 17,609,074 ) Total Assets December 31, 2025 December 31, 2024 Splash Beverage Group $ 938,652 $ 1,554,935 Assets of discontinued operations — 1,055,272 E-Commerce 27,042 148,978 Total Assets $ 965,694 $ 2,759,185 Note 11 – Commitment and Contingencies The Company is a party to asserted claims and are subject to regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the outcome, if any, arising out of any such matter will have a material adverse effect on its business, financial condition or results of operations. The licensing agreement between TapouT LLC and the Company was terminated in Q1 2024. TapouT alleges that as a result of an unpaid invoice they had exercised their right pursuant to section 22 of the licensing agreement to terminate the licensing agreement. TapouT alleges that as a result of the aforementioned termination, pursuant to the licensing agreement, they are owed all unpaid fees and other amounts payable become immediately due. As a result, TapouT have brought two causes of action, the first being breach of contract for the unpaid invoice and the second for accounts stated for all unpaid fees and other amounts payable. TapouT, LLC is seeking approximately $1,700,000 for termination of the licensing agreement. The Company does not view this as a reasonable amount given that the Company believes TapOut LLC did not fulfill their obligations pursuant the licensing agreement. The Company believes the case will be settled for a lower amount and has booked a legal reserve of $330,000 as the estimate for the potential liability. The parties have had multiple mediation sessions and are continuing their efforts to seek an amicable resolution. If these mediation efforts do not yield a settlement agreement, then the Company anticipates that litigation shall continue. F- 31 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 12 – Tax Provision The Company has evaluated the positive and negative evidence in assessing the realizability of its deferred tax assets. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax planning strategies to determine which deferred tax assets are more likely than not to be realized in the future. Due to uncertainty about the Company’s ability to utilize its deferred tax assets, the Company has recorded a full valuation allowance against its deferred tax assets. On December 31, 2025, the Company’s net operating loss carryforward for Federal income tax purposes was $ 128,566,840 , which will be available to offset future taxable income. If not used, these carry forwards will begin to expire in 2032, except for the net operating losses generated January 1, 2018 and after, which can be carried forward indefinitely. There was no income tax expense or benefit for the years ended December 31, 2025 and 2024 due to the full valuation allowance recorded. The reconciliation of the income tax benefit is computed at the U.S. federal statutory rate as follows: Schedule of effective income tax rate reconciliation 2025 2024 Federal Statutory Tax Rate 21.00 % 21.00 % Permanent Differences ( 6.93 %) ( 1.57 %) Change in Valuation Allowance ( 14.07 %) ( 19.43 %) Net deferred tax asset — — The tax effects of temporary differences which give rise to significant portions of deferred tax assets or liabilities on December 31 are as follows: Schedule of deferred tax assets or liabilities 2025 2024 Deferred Tax Assets: Net Operating Losses $ 32,585,266 $ 31,444,821 Accrued Interest/Interest Expense Limitation 5,311,062 2,251,164 Total deferred tax assets 37,896,328 33,695,985 Deferred Tax Liabilities: Depreciation ( 235,827 ) ( 145,467 ) Total deferred tax liabilities ( 235,827 ) ( 145,467 ) Less: Valuation allowance ( 37,660,500 ) ( 33,550,518 ) Total Net Deferred Tax Assets $ — $ — The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The open tax years subject to examination with respect to the Company’s operations are 2015 through 2025. F- 32 Splash Beverage Group, Inc. Notes to the Consolidated Financial Statements Note 13 – Subsequent Events ELOC Letter Agreement On January 26, 2026, the Company entered into an agreement (the “Letter Agreement”) with C/M Capital Master Fund, LP (the “Investor”) which Investor is the counterparty to that certain Securities Purchase Agreement dated September 19, 2025 establishing an equity line of credit facility between the Company and the Investor (the “ELOC Agreement”). Pursuant to the Letter Agreement, the Company in lieu of issuing the Investor shares of Common Stock referred to in the ELOC Agreement as the “Commitment Shares”, as such term is defined and described in the ELOC Agreement, the Company instead issued to the Investor a promissory note (the “Note”). The Note has an initial principal amount of $525,000, which shall be subject to increase up to $700,000 in connection with sales made under the ELOC Agreement which increase, if applicable, would reflect the additional 0.5% of Commitment Shares the Investor was previously entitled to receive under the ELOC Agreement. The Note bears no interest unless an event of default occurs whereupon interest accrues at a rate of 10% per annum, and matures on January 26, 2028. In addition, following the repayment of prior promissory notes originally issued on September 22, 2025 to the Investor and an affiliate, the Note is subject to mandatory prepayments from net proceeds received by the Company under the ELOC Agreement after the first $3 million of net proceeds equal to 30% of any further net proceeds. ELOC Sales From January 1, 2026 through April 14, 2026, the Company has sold 4,840,254 shares of Common Stock for total gross proceeds of $1,917,709 pursuant to the ELOC Agreement. Appointment of Director On February 2, 2026, the Board of Directors the Company increased the size of the Board to five directors and appointed Brady Cobb to serve as a director of the Company to fill the newly created vacancy, effective immediately. 2025 Equity Incentive Plan On September 25, 2025 the Company adopted the 2025 Equity Incentive Plan covering 5,315,780 shares of Common Stock of which have been or may be issued or issuable to employees, non-employee directors, officers, consultants and advisors of the Company and its subsidiaries. Preferred Stock Conversion As of April 14, 2026, 24,251 shares of Series B preferred stock were converted into 1,940,120 shares of common stock. Convertible Note In February 2026 a holder of a $30,000 convertible note payable converted the note into 266,770 shares of common stock. Letter of Intent On March 5, 2026 the Company announced it has executed a non-binding Letter of Intent (“LOI”) for a proposed merger with Medterra CBD, LLC (“Medterra”), a leading manufacturer and multi-brand operator of federally compliant cannabinoid wellness products sold to over 2 million customers across the United States and Internationally. Warrants As of April 14, 2026, our Board of Directors agreed to cancel the 5,050,000 Warrants granted on July 31, 2025 subject to each person as applicable agreeing to cancel them. As of the date of this Report, 1,350,000 Warrants held by our former employees remain outstanding and all other Warrants have been canceled. The Company intends to pursue its remedies with respect to the remaining Warrants . F- 33 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.