Notes
to the Condensed Consolidated Financial Statements
Note
1 – Business Organization and Nature of Operations
Splash seeks 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
is comprehensive in the US and is now expanding to select attractive international markets. The Splash brand portfolio is growing and
diverse, covering multiple categories that are exhibiting strong growth in both the non-alcohol and alcohol sectors. Through its wholly
owned subsidiary Qplash, Splash’s distribution reach includes e-commerce access to both B-to-B and B-to-C customers. Q-plash markets
well known beverage brands to customers throughout the US that prefer delivery direct to their office, facilities and or homes.
On
February 2021, Management initiated a plan to divest its Canfied Medical Supply, Inc. (“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 uplisting 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 on a retrospective basis to reflect the split.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
2 – Summary of Significant Accounting Policies
Basis
of Presentation and Consolidation
These
condensed consolidated financial statements include the accounts of Splash Beverage Group and its wholly owned subsidiaries, Holdings, Copa di Vino, Inc.(‘CdV”) and Splash Mexico., CMS is reflected as discontinued operations. All intercompany balances have been eliminated in consolidation.
Our
accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP).
The
accompanying condensed financial statements have been prepared by us without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for
the three months ended March 31, 2022 and 2021 have been made.
Certain
information and footnote disclosures normally included in consolidated financial statements prepared in GAAP have been condensed or omitted.
The results of operations for the period ended March 31, 2022 are not necessarily indicative of the operating results for the full year.
Use
of Estimates
The
preparation of condensed 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.
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 March 31, 2022 or December
31, 2021.
Our cash in bank deposit amounts, at times, may exceed
federally insured limits of $250,000. At March 31, 2022 we had $7,632,587
in excess of the federally insured limits. Our bank deposit amounts in Mexico $2,169
are uninsured.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
2 – Summary of Significant Accounting Policies, continued
Accounts
Receivable and Allowance for Doubtful Accounts
Accounts
receivable are carried at their estimated recoverable 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 March 31, 2022 and December 31, 2021, our accounts receivable
amounts are reflected net of allowances of $13,949
and $45,203,
respectively.
Inventory
Inventory
is stated at the lower of cost or net realizable value, accounted for using the weighted average cost method. The inventory balances
at March 31, 2022 and December 31, 2021 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 are 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 $253,703
and $223,223
at March 31, 2022 and December 31, 2021, 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 3-39
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.
Depreciation
expense totaled $30,695
and $43,487
for the three months ended March 31, 2022 and
March 31, 2021, respectively. Property and equipment as of March 31, 2022 and December 31, 2021 consisted of the following:
Schedule
of Property and equipment | |
| | | |
| | |
| |
2022 | |
2021 |
Machinery & equipment | |
| 1,108,870 | | |
| 1,108,870 | |
Buildings | |
| 282,988 | | |
| 279,543 | |
Leasehold improvements | |
| 662,537 | | |
| 662,537 | |
Office furniture & equipment | |
| 70,960 | | |
| 70,960 | |
Total cost | |
| 2,125,355 | | |
| 2,121,910 | |
Accumulated depreciation | |
| (1,582,820 | ) | |
| (1,552,125 | ) |
Property, plant & equipment, net | |
| 542,535 | | |
| 569,785 | |
Excise
taxes
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 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.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
2 – Summary of Significant Accounting Policies, continued
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. |
|
|
|
|
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 condensed consolidated financial statements approximate fair values at March 31, 2022 and
December 31, 2021, consistent with recent negotiations of notes payable and due to the short duration of maturities and market rates
of interest.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
2 – Summary of Significant Accounting Policies, continued
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.
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 finished goods products, where applicable, and warehousing expense are accounted for within operating expenses.
Distribution expense is capitalized as part of inventory as the materials are received by our distillery, co-packer or internal/external
warehouse.
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.
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 award’s vesting period. We use the Black-Scholes option pricing model to determine the fair value of stock-based
awards. 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.
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 March 31, 2022 and December 31, 2021.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
2 – Summary of Significant Accounting Policies, continued
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 for awards granted from 2021 to 2022 excludes anti-dilutive common stock equivalents, including
warrants to purchase 3
million shares of common stock for nominal consideration.
Advertising
We
conduct 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 $87,590
and $1,987
for the three-months ended March 31, 2022 and
2021, respectively.
Goodwill
and Intangibles Assets
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.
Intangible assets consist of customer lists, brands
and license agreements acquired in the acquisition of CdV. The Company amortizes intangible assets with finite lives on a straight-line
basis over their estimated useful lives of 15 years.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
2 – Summary of Significant Accounting Policies, continued
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.
Recent
Accounting Pronouncements
Management
does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying
financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances.
Reclassifications
Certain prior period amounts have been reclassified
to conform with the current year presentation.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
3 – Notes Payable, Related Party Notes Payable, Convertible
Bridge Loans Payable, Revenue Financing Arrangements and Bridge Loan Payable
Notes
payable are generally nonrecourse and secured by all Company owned assets.
Schedule of Notes payable | |
| | | |
| | | |
| | |
| |
Interest
Rate | |
March 31,
2022 | |
December 31,
2021 |
Notes Payable and Convertible
Notes Payable | |
| |
| |
|
In March 2014, we entered into
a short-term loan agreement with an entity in the amount of $200,000.
The note included warrants for 272,584
shares of common stock at $0.94
per share. The warrants expired unexercised on February
28, 2017. The loan matured and remains in default. | |
| 8 | % | |
| 200,000 | | |
| 200,000 | |
| |
| | | |
| | | |
| | |
In September 2021, we entered into a twelve-month
loan with a company in the amount of $208,000.
The loan requires 12 amortized payments with the final payment due August 2022. | |
| 4.8 | % | |
| 46,870 | | |
| 116,478 | |
| |
| | | |
| | | |
| | |
In December 2020, we entered into a 56
month loan with a company in the amount of $1,578,237.
The loan requires payments of 3.75%
of the previous months revenue. Note is due September 2025 | |
| 17 | % | |
| 1,396,198 | | |
| 1,423,334 | |
| |
| | | |
| | | |
| | |
In April 2021, we entered into a six-month
convertible loan with an individual in the amount of $84,000.
The loan had an original maturity of October 2021 with principal and interest due at maturity. The loan was extended to August 2022. | |
| 7 | % | |
| 84,000 | | |
| 84,000 | |
| |
| | | |
| | | |
| | |
In April 2021, we entered into a six-month
convertible loan with an individual in the amount of $84,000.
The loan had an original maturity of October 2021 with principal and interest due at maturity. The loan was extended to August 2022. | |
| 7 | % | |
| 84,000 | | |
| 84,000 | |
| |
| | | |
| | | |
| | |
In May 2021, we entered into a six-month
convertible 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 extended to August 2022. | |
| 7 | % | |
| 50,000 | | |
| 50,000 | |
| |
| | | |
| | | |
| | |
In May 2021, we entered into a six-month
convertible loan with an individual in the amount of $500,000.
The loan had an original maturity of October 2021 with principal and interest due at maturity. The principal and interest was converted
into shares of common stock in February 2022. | |
| 7 | % | |
| — | | |
| 500,000 | |
| |
| | | |
| | | |
| | |
In May 2021, we entered into a six-month
convertible 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 was extended to August 2022. | |
| 7 | % | |
| 10,000 | | |
| 10,000 | |
| |
| | | |
| | | |
| | |
In May 2021, we entered into a six-month
convertible loan with an individual in the amount of $200,000.
The loan had an original maturity of October 2021 with principal and interest due at maturity. The principal and interest was converted
into shares of common stock in February 2022. | |
| 7 | % | |
| — | | |
| 200,000 | |
| |
| | | |
| | | |
| | |
In November 2021, we entered into a one-year
convertible loan with an individual in the amount of $300,000.
The loan expires November 2022 with the principal and interest due at maturity. | |
| 7 | % | |
| 300,000 | | |
| 300,000 | |
| |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | |
| |
| Total
notes payable
and convertible notes payable | | |
$ | 2,171,068 | | |
$ | 2,967,812 | |
| |
| | | |
| | | |
| | |
| |
| Less
current portion | | |
| (2,171,068 | ) | |
| (2,967,812 | ) |
| |
| | | |
| | | |
| | |
| |
| Long-term
notes payable
and convertible notes payable | | |
$ | — | | |
$ | — | |
Interest
expense on notes payable was $81,700
and $9,625
for the three months ended March 31, 2022 and
2021, respectively. Accrued interest was $154,209
at March 31, 2022.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
3– Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements and
Bridge Loan Payable, continued
Interest
expense on related party notes payable was $2,602
and $0
for the three months ended March 31, 2022 and
2021, respectively. Accrued interest was $0
as of March 31, 2022.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
4 – Licensing Agreement and Royalty Payable
We have a licensing agreement with ABG TapouT, LLC
(“TapouT”), providing us with licensing rights to the brand “TapouT” on energy drinks, energy shots, water, teas
and sports drinks for beverages sold in the United States of America, its territories, possessions, U.S. military bases and Mexico. Under
the terms of the agreement, we are required to pay a 6% royalty on net sales, as defined. We are required to make minimum monthly payments
of $54,450
in 2022 and $49,500
in 2021.
There
were no unpaid royalties at March 31, 2022. We paid the guaranteed minimum royalty payments of $163,350
and $148,500
for the three-months ended March 31, 2022 and
2021, which is included in general and administrative expenses.
In
connection with the Copa APA, we acquired the license to certain patents from 1/4 Vin SARL
(“1/4 Vin”) On February 16, 2018, the CdV 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 our manufacturing
process. In exchange for notes payable, 1/4 Vin granted us a nonexclusive, royalty-bearing,
non-assignable, nontransferable, terminable license which would continue until the subject
equipment is no longer in service or the patents expire. Amortization is approximately $31,000
annually until the license agreement is fully amortized. The asset is being amortized over
a 10-year
useful life.
Note
5– Stockholders’ Equity
Common
Stock
At
March 31, 2021, we issued 168,333 shares
of common stock in exchange for services provided to us. At September 30, 2021, we issued 2,136,819 shares
of common stock in exchange for services provided to us. At December 31, 2021, we issued 977,497 shares
of common stock in exchange for services provided to us. At March 31, 2022, we issued 550,000 shares
of common stock in exchange for services, and 2,300,000 as part of our S3 drawdown and convertible instruments. For the
three-month-ended March 31, 2022 the shares were valued at a fair market value stock price based on the agreement date. We
recognized share-based compensation expense for the three-months ended March 31, 2022 of $2,355,542,
which is classified within the other general and administrative line on our Condensed Consolidated Statements of
Operations.
Private
Placement Memorandum (PPM)
In
January 2021, the Board of Directors approved a private placement offering of 1,212,121
shares of the common stock of the Company, $0.001
value per share at a purchase price of $3.30
per share for aggregate gross proceeds of $4,000,000
(“PPM”). As part of the PPM, each
purchaser received a warrant to purchase one share for every two shares purchased. In February 2021, we completed our PPM by issuing
a total of 1,212,355
of shares and 606,178
warrants receiving gross proceeds of approximately
$4,000,000.
Splash
Beverage Group, Inc.
Notes
to the Consolidated Financial Statements
Note
5 – Stockholders’ Equity, continued
Stock
Plans
2020
Plan
On August 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 2,313,133 at the time the 2020 plan was adopted
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. At January 1, 2021 AND 2022, the number of shares issuable
under the 2020 plan increased by 1,057,852 and 1,679,812 shares, respectively.
During the three-month period ended March 31, 2022,
the company granted 773,596 shares under the 2020 plan. At March 31, 2022, the total number of awards that may be issued under the 2020
plan was 2,123,703.
The fair value of stock options recognized in the
period has been estimated using the Black-Scholes option pricing model.
The company did not grant any new options, warrants,
or shares in Q1 2022 that would fall under the 2020 plan.
Shareholder
Advances and Liability to Issue Stock and Warrants
We have various agreements
with consultants in the amount of 0.5 million shares to be issued by in Q2 2022. The stock price will be valued using
the 10-day average price of the company’s stock from the issuance date. As part of our private placement memoranda, we owe an investor
33,333 shares at $3.30 of the Company’s common stock which will be issued in Q2 2022.
Note
6 – Related Parties
There
are related party notes payable of $0.3
and $0.7
million outstanding as of March 31, 2022 and
December 31,2021, respectively. See note 3.
Note
7 – Investment in Salt Tequila USA, LLC
We have a marketing and distribution agreement with
SALT Tequila USA, LLC (“SALT”) for the manufacturing of our Tequila product line in Mexico.
We have a
22.5%
percentage ownership interest in SALT, have the right to increase our ownership to 37.5%.
This investment is accounted for at cost, due to our inability to exercise significant influence over the assets and operations.
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
8 – Operating Lease Obligations
Effective
July 2018, we entered into a lease agreement for the right to use and occupy office space. The lease term commenced July
1, 2018 and is scheduled to expire
after 36
months, on June
30, 2021. In July 2021, we executed
a two-year renewal at the same monthly amount.
Effective
November 2019, we entered into a new lease with Interport Logistics, LLC. The lease term commenced on November
11, 2019 and is scheduled to expire
on November
11, 2022.
Effective
May 2019, we entered into a new lease in Mexico. The lease commenced May
1, 2019 and is scheduled to expire
after 24 months, on April 1, 2021. Our new 1
year lease agreement is renewed annually.
Effective
January 2021, we entered into a lease agreement for the right to use and occupy office space. The lease term commenced January
18, 2021 and is scheduled to expire
after 18
months, on July
31, 2022.
Effective
January 2021, we entered into a lease agreement for the right to use and occupy office and manufacturing space. The lease term commenced
January
1, 2021 and is scheduled to expire
after 60
months, on December
31, 2025.
The
following table presents the discounted present value of minimum lease payments for our office and warehouses to the amounts reported
as financial lease liabilities on the condensed consolidated balance sheet at March 31, 2022:
Schedule of maturities
of lease liabilities | |
| | |
Undiscounted
Future Minimum Lease Payments | |
Operating Lease |
| |
|
2022 (Nine months remaining) | |
| 252,723 | |
2023 | |
| 279,790 | |
2024 | |
| 252,000 | |
2025 | |
| 252,000 | |
Total | |
| 1,036,513 | |
Amount representing imputed interest | |
| (83,448 | ) |
Total operating lease liability | |
| 953,065 | |
Current portion of operating lease liability | |
| 284,372 | |
Operating lease liability, non-current | |
$ | 668,693 | |
The
table below presents information for lease costs related to our operating leases at March 31, 2022:
Schedule
of lease costs | |
| | |
Operating lease cost: | |
|
Amortization of leased assets | |
$ | 386,475 | |
Interest of lease liabilities | |
| 71,811 | |
Total operating lease cost | |
$ | 458,286 | |
The
table below presents lease-related terms and discount rates at March 31, 2022:
Summary of lease-related
terms and discount rates | |
| | |
Remaining term on leases | |
| 4
to 45
months | |
Incremented borrowing rate | |
| 5.0 | % |
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
9 – Business Combination
We
consummated the acquisition of CdV on December 24, 2020. The purchase price consideration was comprised of $1.5 million in debt, $0.5
million in cash and $2.0 million in contingent shares, and a note payable for $2.0 million (see note 4) for total consideration of approximately
$6.0 million.
The
following summarizes our allocation of the updated purchase price for the acquisition:
Schedule of purchase
price for the acquisition | |
| | | |
| | |
| |
Preliminary Purchase Accounting | |
Final Purchase Accounting |
Accounts receivable, net | |
| 88,131 | | |
| 88,131 | |
Other current assets | |
| 11,236 | | |
| 11,236 | |
Inventory, net | |
| 273,951 | | |
| 273,951 | |
Property and equipment, net | |
| 663,273 | | |
| 663,273 | |
License agreement, net | |
| 222,095 | | |
| 222,095 | |
Brands | |
| | | |
| 4,459,000 | |
Customer lists | |
| | | |
| 957,000 | |
Goodwill | |
| 5,672,823 | | |
| 256,823 | |
Total indentifiable assets | |
| 6,931,509 | | |
| 6,931,509 | |
| |
| | | |
| | |
Accounts payable and accrued expenses | |
| 882,297 | | |
| 882,297 | |
Note payable | |
| 69,212 | | |
| 69,212 | |
Equity | |
| 5,980,000 | | |
| 5,980,000 | |
Total liabilities and equity | |
| 6,931,509 | | |
| 6,931,509 | |
Splash
Beverage Group, Inc.
Notes
to the Condensed Consolidated Financial Statements
Note
10 – Segment Reporting
The
Company evaluates segment reporting in accordance with the FASB Accounting Standards Codification Topic 280, Segment Reporting, each
reporting period, including evaluating the reporting package reviewed by the Chief Executive Officer and Chief Financial Officer.
Note:
The CdV business is included in our Splash Beverage Group segment.
Schedule of Segment Reporting Information |
|
|
|
|
|
|
|
|
Revenue | |
2022 | |
2021 |
Splash Beverage Group | |
| 1,478,158 | | |
| 825,742 | |
E-Commerce | |
| 2,448,415 | | |
| 1,313,182 | |
| |
| | | |
| | |
Total Revenues continuing operations | |
| 3,926,573 | | |
| 2,138,924 | |
| |
| | | |
| | |
Total Revenues discontinuing operations | |
| 114,071 | | |
| 278,777 | |
Total assets |
|
2022 |
|
2021 |
Splash Beverage Group |
|
|
19,188,887 |
|
|
|
14,998,597 |
|
E-Commerce |
|
|
1,170,122 |
|
|
|
913,312 |
|
Total assets discontinued operations |
|
|
187,401 |
|
|
|
473,461 |
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
20,611,306 |
|
|
|
16,385,370 |
|
Note
11 – Commitment and Contingencies
We
are 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 we do 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.
Note
12 – Subsequent Events
None