Form 10-Q - Quarterly report [Sections 13 or 15(d)]

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _________

Commission File No. 001-40471

SPLASH BEVERAGE GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada		34-1720075
(State or other jurisdiction of incorporation or formation)		(I.R.S. employer identification number)

1314 E Las Olas Blvd. Suite 221

Fort Lauderdale, FL 33301

(Address of principal executive offices) (Zip code)

(954) 745-5815
(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.001 value per share	SBEV	NYSE American LLC
Warrants to purchase common stock, $0.001 par value per share	SBEV-WT	NYSE American LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Check whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No

As of November 14, 2023, there were 43,817,776 shares of Common Stock issued and outstanding.

SPLASH BEVERAGE GROUP, INC.

FORM 10-Q

September 30, 2023

TABLE OF CONTENTS

		Page
PART I:	FINANCIAL INFORMATION
ITEM 1:	FINANCIAL STATEMENTS	1
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss	3
	Condensed Consolidated Statement of Changes in Shareholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to the Condensed Consolidated Financial Statements	6
ITEM 2:	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
ITEM 3:	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	28
ITEM 4:	CONTROLS AND PROCEDURES	28
PART II:	OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS	29
ITEM 1A:	RISK FACTORS	29
ITEM 2:	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	29
ITEM 3:	DEFAULTS UPON SENIOR SECURITIES	29
ITEM 4:	MINE SAFETY DISCLOSURES	29
ITEM 5:	OTHER INFORMATION	29
ITEM 6:	EXHIBITS	30
	SIGNATURES	31

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Splash Beverage Group, Inc.
Condensed Consolidated Financial Statements

September 30, 2023

Splash Beverage Group, Inc.

Condensed Consolidated Balance Sheets

September 30, 2023 and December 31, 2022


	September 30, 2023			December 31, 2022
Assets		(unaudited)
Current assets:
Cash and cash equivalents	$	96,121		$	4,431,745
Accounts receivable, net		1,512,693			1,812,110
Prepaid expenses		225,446			348,036
Inventory		2,907,461			3,721,307
Other receivables		376,905			344,376
Total current assets		5,118,626			10,657,574

Non-current assets:
Deposit	$	49,398		$	49,290
Goodwill		256,823			256,823
Intangible assets, net		4,564,037			4,851,377
Investment in Salt Tequila USA, LLC		250,000			250,000
Operating lease right of use asset		619,559			750,042
Property and equipment, net		385,603			489,597
Total non-current assets		6,125,420			6,647,129

Total assets	$	11,244,046		$	17,304,703

Liabilities and Stockholders’ Equity

Liabilities:
Current liabilities
Accounts payable and accrued expenses	$	4,199,476		$	3,383,187
Liability to issue shares		—			91,800
Operating lease liabilities - current		259,072			268,749
Notes payable, current portion		5,548,830			1,080,257
Due to related party		426,000			—
Shareholder advance		200,000			—
Accrued interest payable		496,384			141,591
Total current liabilities		11,129,762			4,965,584

Long-term liabilities:
Notes payable		408,801			2,536,319
Operating lease liabilities - noncurrent		363,313			480,666
Total long-term liabilities		772,114			3,016,985

Total liabilities		11,901,876			7,982,569

Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued		—			—
Common Stock, $0.001 par, 300,000,000 shares authorized, 42,902,185 shares issued, 42,902,185 shares outstanding at September 30, 2023 and 41,085,520 shares issued, 41,085,520 shares outstanding at December 31, 2022		42,902			41,086
Additional paid in capital		126,648,371			121,632,547
Accumulated other comprehensive loss		(8,448	)		(20,472	)
Accumulated deficit		(127,340,655	)		(112,331,027	)
Total stockholders’ equity		(657,830	)		9,322,134

Total liabilities and stockholders’ equity	$	11,244,046		$	17,304,703

The accompanying notes are an integral part of these condensed consolidated financial statements.

Splash Beverage Group, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

For the Three and Nine Months Ended September 30, 2023 and 2022
(Unaudited)


	Three months ended September 30						Nine months ended September 30,
	2023			2022			2023			2022
Net revenues		5,144,069			4,870,407			16,161,747			13,295,921
Cost of goods sold		(3,847,202	)		(3,101,807	)		(11,326,298	)		(8,886,508	)
Gross profit		1,296,867			1,768,600			4,835,449			4,409,413

Operating expenses:
Contracted services		382,096			438,004			1,094,398			1,196,852
Salary and wages		1,195,916			1,262,935			3,794,179			3,180,198
Non-cash share-based compensation		367,244			1,697,201			1,224,101			7,039,695
Other general and administrative		3,048,779			2,734,377			8,617,013			7,698,231
Sales and marketing		626,363			746,965			2,105,559			1,918,420
Total operating expenses		5,620,398			6,879,482			16,835,250			21,033,396

Loss from continuing operations		(4,323,531	)		(5,110,882	)		(11,999,801	)		(16,623,983	)

Other income/(expense):
Interest income		348			158			1,668			2,867
Interest expense		(221,488	)		(66,193	)		(561,249	)		(225,543	)
Other Income		—			—			49,819			—
Amortization of debt discount		(1,125,410	)		—			(2,500,065	)		—
Total other expense		(1,346,550	)		(66,035	)		(3,009,827	)		(222,676	)

Provision for income taxes		—			—			—			—

Net loss from continuing operations, net of tax		(5,670,081	)		(5,176,917	)		(15,009,628	)		(16,846,659	)

Net loss from discontinued operations, net of tax		—			—			—			(199,154	)

Gain on sale of discontinued operations		—			33,116			—			148,748

Income (Loss) from discontinued operations		—			33,116			—			(50,406	)

Net loss	$	(5,670,081	)	$	(5,143,801	)	$	(15,009,628	)	$	(16,897,065	)

Other Comprehensive Income
Foreign currency translation Income		29,406			—			12,024			—

Total Comprehensive Loss	$	(5,640,675	)	$	(5,143,801	)	$	(14,997,604	)	$	(16,897,065	)

Loss per share - continuing operations
Basic and diluted	$	(0.13	)	$	(0.14	)	$	(0.36	)	$	(0.46	)

Weighted average number of common shares outstanding - continuing operations
Basic and diluted		42,812,058			37,364,031			41,991,259			36,417,222

The accompanying notes are an integral part of these condensed consolidated financial statements.

Splash Beverage Group, Inc.

Condensed Consolidated Statement of Changes in Stockholders’ Equity

For the Three and Nine months ended September 30, 2023 and 2022

(Unaudited)


														Total
								Accumulated Other						Stockholders'
	Common Stock				Additional			Comprehensive			Accumulated			Equity
	Shares		Amount		Paid-In Capital			Income			Deficit			(Deficit)

Balances at December 31, 2021		33,596,232	$	33,596	$	99,480,188			—		$	(90,640,557	)	$	8,873,227

Issuance of common stock on convertible instruments		223,596		224		1,206,287			—			—			1,206,511
Issuance of warrants and options for services		—		—		1,242,697			—			—			1,242,697
Issuance of common stock for services		550,000		550		1,112,845			—			—			1,113,395
Issuance of common stock and warrants for cash		2,300,000		2,300		8,065,100			—			—			8,067,400
Net loss		—		—		—			—			(5,994,407	)		(5,994,407	)

Balances at March 31, 2022		36,669,828	$	36,670	$	111,107,117			—		$	(96,634,964	)	$	14,508,822

Issuance of warrants for services		—		—		1,174,289			—			—			1,174,289
Issuance of common stock for services		500,000		500		1,429,500			—			—			1,430,000
Issuance of common stock and warrants for cash		100,000		100		109,900			—			—			110,000
Accumulated Comprehensive Income - Translation		—		—		—			(6,570	)		—			(6,570	)
Net loss		—		—		—			—			(5,758,857	)		(5,758,857	)

Balances at June 30, 2022		37,269,828	$	37,270	$	113,820,805		$	(6,570	)	$	(102,393,821	)	$	11,457,685

Issuance of warrants for services		—		—		1,036,066			—			—			1,036,066
Issuance of common stock for APA		380,959		381		(381	)		—			—			—
Issuance of common stock and warrants for cash		2,000,000		2,000		2,631,500			—			—			2,633,500
Accumulated Comprehensive Income - Translation		—		—		—			8,795			—			8,795
Net loss		—		—		—			—			(5,143,801	)		(5,143,801	)

Balances at September 30, 2022		39,650,787	$	39,651	$	117,487,990		$	2,225		$	(107,537,622	)	$	9,992,245


Balances at December 31, 2022	41,085,520	$	41,086	$	121,632,546		$	(20,472	)	$	(112,331,026	)	$	9,322,134

Common stock issuable and beneficial conversion feature on convertible 12-month promissory note	—		—		1,786,468			—			—			1,786,468
Issuance of warrants for services	—		—		215,760			—			—			215,760
Accumulated Comprehensive loss – translation, net	—		—		—			(1,609	)		—			(1,609	)
Net loss	—		—		—			—			(3,729,299	)		(3,729,299	)
Balances at March 31, 2023	41,085,520	$	41,086	$	123,634,774		$	(22,081	)	$	(116,060,325	)	$	7,593,454

Issuance of common stock on convertible instruments	1,500,000		1,500		(1,500	)		—			—			—
Share based compensation	—		—		509,232			—			—			509,232
Issuance of common stock for services	216,666		216		223,449			—			—			223,665
Issuance of warrants on convertible instruments	—		—		1,269,669			—			—			1,269,669
Accumulated Comprehensive loss – translation, net	—		—		—			(15,773	)		—			(15,773	)
Net loss	—		—		—			—			(5,610,249	)		(5,610,249	)

Balances at June 30, 2023	42,802,186	$	42,802	$	125,635,624		$	(37,854	)	$	(121,670,574	)	$	3,969,998

Debt discount from convertible instrument	—		—		79,817			—			—			79,817
Share based compensation	—		—		300,912			—			—			300,912
Issuance of common stock for services	99,999		100		66,232			—			—			66,332
Issuance of warrants on convertible instruments	—		—		565,786			—			—			565,786
Accumulated Comprehensive loss – translation, net	—		—		—			29,406			—			29,406
Net loss	—		—		—			—			(5,670,081	)		(5,670,081	)

Balances at September 30, 2023	42,902,185		$42,902	$	126,648,371		$	(8,448	)	$	(127,340,655	)	$	(657,830)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Splash Beverage Group, Inc.

Condensed Consolidated Statement Cash Flows

For the Nine Months Ended September 30, 2023 and 2022

(Unaudited)


	2023			2022
Net loss	$	(15,009,628	)	$	(16,897,065	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		403,948			306,900
Amortization of debt discount		2,500,065			—
ROU assets, net		3,453			4,888
Loss (gain) from sale of discontinued operation		—			50,407
Common stock issued for services		289,998			—
Non-cash share-based compensation		1,224,101			7,107,684
Changes in working capital items:
Accounts receivable, net		299,417			(364,161	)
Inventory, net		813,846			(1,660,852	)
Prepaid expenses and other current assets		90,061			(398,328	)
Deposits		(108	)		281,635
Accounts payable and accrued expenses		526,290			732,139
Accrued interest payable		354,792			12,101
Net cash used in operating activities - continuing operations		(8,503,765	)		(10,824,652	)

Cash flows from investing activities:
Capital expenditures		(12,613	)		(45,420	)
Net cash used in investing activities - continuing operations		(12,613	)		(45,420	)

Cash flows from financing activities:
Proceeds from issuance of common stock		—			10,810,900
Cash advance from related party		426,000			—
Cash advance from shareholder		200,000			(280,500	)
Proceeds from issuance of debt		4,300,000			45,420
Principal repayment of debt		(757,270	)		(1,285,861	)
Net cash provided by financing activities - continuing operations		4,168,730			9,289,959

Net cash effect of exchange rate changes on cash		12,024			—

Net change in cash and cash equivalents		(4,335,624	)		(1,580,113	)

Cash and cash equivalents, beginning of year		4,431,745			4,181,383

Cash and cash equivalents, end of period	$	96,121		$	2,601,270

Supplemental disclosure of cash flow information:
Cash paid for Interest	$	206,456		$	164,107

Supplemental disclosure of non-cash investing and financing activities
Notes payable and accrued interest converted to common stock (223,596 shares)		—			1,206,511

Non-cash debt discount in the form of issuance of equity instruments and beneficial conversion feature in conjunction with convertible notes		3,099,940			—

The accompanying notes are an integral part of these condensed consolidated financial statements.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Note 1 – Business Organization and Nature of Operations

Splash Beverage Group, Inc. (the “Company”, “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. Through its division Qplash, Splash’s distribution reach includes e-commerce access to both business-to-business (B2B) and business-to-consumer (B2C) customers. Qplash markets well known beverage brands to customers throughout the US that prefer delivery direct to their office, facilities, and or homes.

Note 2 – Summary of Significant Accounting Policies

Basis of Accounting

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), and the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. Accordingly, they do not include all the information and footnotes normally included in financial statements prepared in conformity with U.S. GAAP. They should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2022 Annual Report on Form 10-K, filed with the SEC on March 31,2023 (the “Form 10-K”).

The accompanying condensed consolidated financial statements are unaudited and include all adjustments (consisting of normal recurring adjustments) that management considers necessary for a fair presentation of its condensed financial position and results of operations for the interim periods presented. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the entire year.

Basis of Presentation and Consolidation

These consolidated financial statements include the accounts of Splash and its wholly owned subsidiaries Splash Beverage Holdings LLC (“Holdings”), Splash International Holdings LLC (“International”), Splash Mex SA de CV (“Splash Mex”) and Copa di Vino Wine Group, Inc. (“Copa di Vino”).

Canfield Medical Supply, Inc. (“CMS”) (as discontinued operations), was consolidated until September 30, 2022.

All intercompany balances have been eliminated in consolidation.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Our investment in Salt Tequila USA, LLC is carried at cost less impairment, the investment does not have a readily determinable fair value.

Certain reclassifications have been made to the prior period financial statements to conform to the December 31, 2022 audited financial statement and the current period classifications. In the three months ended September 30, 2022, the Company reclassified $617,553 from cost of goods sold to other general and administrative cost in the condensed consolidated statement of operations and comprehensive loss, which consisted of $176,504 of shipping and handling and $441,049 of Amazon selling fees. In the nine months ended September 30, 2022, the Company reclassified $1,753,208 from cost of goods sold to other general and administrative cost in the condensed consolidated statement of operations and comprehensive loss, which consisted of $602,479 of shipping and handling and $1,150,729 of Amazon selling fees. These reclassifications had no impact on net loss.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. 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 condensed 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

The Company considers all highly liquid securities with an original maturity of three months or less to be cash equivalents. The Company had no cash equivalents at September 30, 2023 or December 31, 2022.

At September 30, 2023 the Company’s cash on deposit with financial institutions, at times, had not exceed federally insured limits of $250,000.

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. The Company establishes 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 September 30, 2023 and December 31, 2022, our accounts receivable amounts are reflected net of allowances of $14,634 and $13,683, 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 September 30, 2023 and December 31, 2022 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. The Company 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. The Company manages inventory levels and purchase commitments in an effort to maximize utilization of inventory on hand and under commitments. The amount of our reserve was $253,603 and $66,146 at September 30, 2023 and December 31, 2022, respectively.

Property and Equipment

The Company records 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 $38,242 and $27,762 for the three months ended September 30, 2023 and September 30, 2022, respectively. For the nine months ended September 30, 2023 and September 30, 2022 depreciation expense totaled $98,285 and $101,991 respectively. Property and equipment as of September 30, 2023 and December 31, 2022 consisted of the following:

Schedule of property and equipment
	2023			2022
Auto		45,420			45,420
Machinery & equipment		1,160,578			1,108,870
Buildings		233,323			282,988
Leasehold improvements		723,639			713,068
Computer Software		5,979			—
Office furniture & equipment		7,657			13,636
Total cost		2,176,596			2,163,983
Accumulated depreciation		(1,790,993	)		(1,674,385	)
Property, plant & equipment, net		385,603			489,597

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 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.

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 Board (“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 September 30, 2023 and December 31, 2022, 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

The Company recognizes 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 the Company expects to receive in exchange for the transfer of goods or services to customers.

The Company recognizes revenue when the Company’s performance obligations under the terms of a contract with the customer are satisfied. Product sales occur for the Splash Beverage and E-commerce businesses once control of the Company’s products are transferred upon delivery to the customer. Revenue is measured as the amount of consideration that the Company expects to receive in exchange for transferring goods, and revenue is presented net of provisions for customer returns and allowances. The amount of consideration the Company receives and revenue the Company recognizes varies with changes in customer incentives offered to the Company’s customers and their customers. Sales taxes and other similar taxes are excluded from revenue.

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.

Other General and Administrative Expenses

Other General and Administrative expenses include Amazon selling fees, royalty cost for selling TapouT, cost associated with the outbound shipping and handling of finished goods, insurance cost, consulting cost, legal and audit fees, Investor Relations expenses, travel & entertainment expenses, occupancy cost, shipping and handling cost and other cost.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Shipping and Handling Costs

The Company includes costs associated with the outbound shipping and handling of finished goods as a component of other general and administrative expenses in the consolidated statements of operations and comprehensive loss. Shipping and handling are not separately billed to the customers and are included in fees charged to the customer and are recorded as revenue when earned.

The Company incurred $1,279,189 and $1,268,636 of shipping and handling costs for the three months ending September 30, 2023 and 2022 respectively. The Company incurred $4,016,394 and $3,261,266 of shipping and handling costs for the nine months ending September 30, 2023 and 2022 respectively. These amounts, which primarily relate to shipping, are recorded in other general and administrative expenses.

Stock-Based Compensation

The Company accounts 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. The Company uses the Black-Scholes option pricing model to determine the fair value of stock-based awards.

Income Taxes

The Company uses 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. The Company records 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 September 30, 2023 and December 31, 2022.

The Company’s federal, state and local income tax returns prior to fiscal year 2019 are closed and management continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings.

The Company recognizes interest and penalties associated with tax matters, if any, as part of operating expenses and includes accrued interest and penalties with accrued expenses in the condensed interim balance sheets.

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 stock outstanding. Warrants, stock options, and common stock issuable upon the conversion of the Company’s convertible debt or preferred stock (if any), are not included in the computation if the effect would be anti-dilutive.

Advertising

The Company conducts advertising for the promotion of its products. In accordance with ASC 720-35, advertising costs are charged to operations when incurred. For the three months ended September 30, 2023 and September 30, 2022 the Company recorded advertising expenses of $248,512 and $746,965, respectively. The Company recorded advertising expense of $1,075,127 and $1,918,420 for the nine months ended September 30, 2023 and 2022, 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 Copa Di Vino. 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 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.

Segment reporting

The Company discloses a measurement of segment profit or loss that its chief operating decision maker (CODM) uses to assess segment performance and to make decisions about resource allocations for each reportable segment.

Recent Accounting Pronouncements

On January 1, 2023, the Company adopted FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”), which requires the immediate recognition of management’s estimates of current and expected credit losses. Adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements or disclosures.

Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

In October 2021, the FASB issued ASU 2021-08, Business Combinations - Accounting for contract assets and contract liabilities from contracts with customers (Topic 805), which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Revenues from contracts with customers (Topic 606). For public companies, the guidance is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company adopted the guidance during fiscal year 2023. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

Foreign Currency Gains/Losses

Foreign Currency Gains/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. Gains or losses from these translation adjustments are included in the condensed consolidated statement of operations and other comprehensive loss 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 foreign currency translation in the condensed consolidated statement of operations and comprehensive loss. The Company incurred foreign currency translation net gain of $13,632 and $4,345 for the three months ended September 30, 2023 and 2022 respectively and net gain of $12,023 and net loss of $2,225 (2,225) for the nine months ending September 30, 2023 and 2022 respectively.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Liquidity and Going Concern Considerations

These condensed consolidated financial statements have been prepared assuming the Company will be able to continue as a going concern. The Company historically has incurred significant losses and negative cash flows from operation since inception and had net-loss of approximately $15 million for nine-month period ended September 30, 2023 and accumulated deficit of approximately $127.3 million through September 30, 2023. During the nine-month period ended September 30, 2023, the Company’s net cash used in operating activities totaled approximately $8.5 million.

If sales volumes do not meet the Company’s projections, expenses exceed the Company’s expectations, or the Company’s plans change, the Company may be unable to generate enough cash flow from operations to cover our working capital requirements. In such case, the Company may be required to adjust its business plan, by reducing marketing, lower its working capital requirements and reduce other expenses or seek additional financing.

In order to have sufficient cash to fund our operations, the Company will need to raise additional equity or debt capital. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. The Company will be required to pursue sources of additional capital through various means, including debt or equity financings. Future financings through equity investments are likely to be dilutive to existing stockholders. Also, the terms of securities the Company may issue in future capital transactions may be more favorable for new investors. Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuances of incentive awards under equity employee incentive plans, which may have additional dilutive effects. Further, the Company may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. The Company may also be required to recognize non-cash expenses in connection with certain securities the Company may issue, such as convertible notes and warrants, which will adversely impact our financial condition. Our ability to obtain needed financing may be impaired by such factors as the capital markets and our history of losses, which could impact the availability or cost of future financings. If the amount of capital the Company is able to raise from financing activities together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that the Company reduce our operations accordingly, the Company may be required to curtail or cease operations. As a result, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the Company’s ability to continue as a going concern for at least twelve months from the date of the consolidated financial statements being available to be issued.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Note 3 – Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable and Revenue Financing Arrangements

Notes payable are generally non-recourse and secured by all Company owned assets.

Schedule of notes payable
	Interest Rate			September 30, 2023		December 31, 2022
Notes Payable and Convertible Notes Payable

In March 2014, the Company 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 and interest was paid off in February 2023		8	%		—		200,000

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 is due September 2025. Note is guaranteed by a related party see note 6.		17	%		494,204		1,044,445

In April 2021, the Company entered into various six-month loans with individuals totaling in the amount of $168,000. The loans had an original maturity of October 2021 with principal and interest due at maturity with conversion price of $3.30 per share. The loans were extended to March 31, 2024.		7	%		168,000		168,000

In May 2021, the Company entered into various six-month loans with individuals totaling in the amount of $60,000. The loans had an original maturity of October 2021 with principal and interest due at maturity with conversion price of $3.30 per share. The loans were extended to March 31, 2024.		7	%		60,000		60,000

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

In August 2022, the Company entered into a 56-months auto loan in the amount of $45,420.	2.35	%	35,367	42,396

In December 2022, the Company entered into various eighteen-month loans with individuals totaling in the amount of $4,000,000. The notes included 100% warrant coverage. The loans mature in June 2024 with principal and interest due at maturity with conversion price of $1.00 per share.	12	%	4,000,000	4,000,000

In February 2023, the Company entered into a twelve-month loan with an entity in the amount of $2,000,000. The convertible note included the issuance of 1,500,000 shares of common stock . The loan matures in February 2024 with conversion price of $0.85 per share and is non-interest bearing	—		2,000,000	—

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 $1.00 per share.	12	%	800,000	—

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

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 $1.00 per share.	12	%		350,000			—

In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $750,000. The note included 100% warrant coverage. The loan matures in July 2024 with principal and interest due at maturity with conversion price of $1.00 per share.	12	%		750,000			—

In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $100,000. The note included 100% warrant coverage. The loan matures in January 2025 with principal and interest due at maturity with conversion price of $1.00 per share.	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 matures in August 2024 with principal and interest due at maturity with conversion price of $0.85 per share and is non-interest bearing.		-		300,000			—

Total notes payable			$	9,057,571		$	5,514,841

Less notes discount				(3,099,940	)		(1,898,265	)
Less current portion				(5,548,830	)		(1,080,257	)

Long-term notes payable			$	408,801		$	2,536,319

Interest expense on notes payable was $207,087 and $65,007 for the three months ended September 30, 2023 and 2022, respectively. Interest expense on notes payable was $546,849 and $217,123 for the nine months ended September 30, 2023 and 2022, respectively. Accrued interest was $496,384 as of September 30, 2023. The Company’s effective interest rate was 41.07% for the nine months ended September 30, 2023.

As of September 30, 2023, the Company’s convertible note balances are convertible into 9,222,251 shares of common stock.

Shareholder Advances

As of February 23, 2023, the Company received a shareholder advance for $200,000 with a 12% interest rate and interest expense was $14,400 for the nine months ended September 30, 2023.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Note 4 – Licensing Agreement and Royalty Payable

The Company has a licensing agreement with ABG TapouT, LLC (“TapouT”), providing the Company with licensing rights to the brand “TapouT” (i)energy drinks, (ii) energy bars, (iii) coconut water, (iv) electrolyte gum/chews, (v) energy shakes, (vi) powdered drink mix, (viii) water (including enhanced water), (vii) energy shots, (viii) teas, and (ix) sports drinks sold in the North America (including US Territories and Military Bases), United Kingdom, Brazil, South Africa, Australia, Scandinavia, Peru, Colombia, Chile and Guatemala. The Company is required to pay a 6% royalty on net sales, as defined, and are required to make minimum monthly payments of $55,000 in 2023 and $54,450 in 2022.

There were no unpaid royalties at September 30, 2023. The Company paid the guaranteed minimum royalty payments of $165,000 and $163,350 for the three months ended September 30, 2023 and 2022 respectively and $495,000 and $490,050 for the nine months ending September 30, 2023 and 2022 respectively, which is included in general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss.

In connection with the Copa di Vino APA, the Company acquired the license to certain patents from 1/4 Vin SARL (“1/4 Vin”). On February 16, 2018, Copa di Vino entered into three separate license agreements with 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. Amortization is approximately $31,000 annually until the license agreement is fully amortized in 2027. The asset is being amortized over a 10-year useful life.

Note 5– Stockholders’ Equity

Common Stock

During the period ended September 30, 2023, the Company entered into a private placement offering to purchase convertible instruments that convert into the Company’s common stock up to an aggregate of $8,500,000. The Company received gross proceeds of $4,300,000 from the issuance of convertible instruments with 3,725,000 shares and 1,000,000 warrants.

In the three months and nine months ended September 30, 2023, the Company granted share-based awards to certain consultants totaling 99,999 and 316,666 shares of common stock, respectively, at a weighted average price of $0.66 and $0.91, respectively, recognized share-based compensation of $66,332 and $289,998, respectively. In the nine months ended September 30, 2023, the Company issued 100,000 shares in satisfaction of a $91,800 liability to issue shares recorded in December 2022.

Splash Beverage Group, Inc.

Notes to the Consolidated Financial Statements

Note 5 – Stockholders’ Equity, continued

Stock Plans

2020 Plan

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 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 of Directors. At January 1, 2023 and 2022, the number of shares issuable under the 2020 plan increased by 2,054,276 and 1,679,812 shares, respectively.

In October 2023, the shareholders voted to increase the number of shares issuable under the Plan to 7.5%.

The following is a summary of the Company’s stock option activity during the period ended September 30, 2023:

Schedule of stock option activity
	Stock options		Weighted average exercise price of outstanding stock options		Weighted average remaining life (Yrs)
Balance January 01, 2023 *		1,151,000	$	1.12
Granted		65,000		1.08
Exercises		—		—
Cancelled		—		—
Balance March 31, 2023		1,216,000	$	1.12

Granted		3,376,008		1.13
Exercises		—		—
Cancelled		—		—

Balance - June 30, 2023		4,592,008	$	1.13


Exercisable - June 30, 2023		3,608,923	$	1.12

Granted		—		—
Exercises		—		—
Cancelled		—		—

Balance - September 30, 2023		4,592,008	$	1.13	$	6.41

Exercisable - September 30, 2023		3,608,923	$	1.12	$	5.68

*	These prices are reflective of the price modification made on April 24, 2023.

The Company recognized $300,912 and $1,025,903 of share-based compensation during the three months and nine months ended September 30, 2023.

Splash Beverage Group, Inc.

Notes to the Consolidated Financial Statements

The following is a summary of the Company’s Warrant activity.

Schedule of warrant activity
	Warrants		Weighted average exercise price of outstanding warrants		Weighted average remaining term (Yrs)
Balance December 31, 2022		14,343,896	$	1.85
Granted		—		—
Balance March 31, 2023		14,343,896	$	1.85

Granted		575,000		0.25
Exercises		68,146		2.19
Cancelled		2,345,677		2.32

Balance - June 30, 2023		12,505,073	$	1.68		3.19

Granted		425,000		0.25
Exercises		—		—
Cancelled		—		—

Balance - September 30, 2023		12,930,073	$	1.63		2.93

Note 6 – Related Parties

During the normal course of business, the Company incurs expenses related to services provided by the CEO for Company expenses paid by the CEO. 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, was 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 had a balance outstanding of $494,204 at September 30,2023.

On June 22, 2023, the Company received an interest free short-term loan from the CEO for $250,000. In August and September 2023, the Company received an interest free short-term loan from the CEO for $165,000 and expense payable of $11,000. The loan is expected to be repaid within the current year.

Note 7 – 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%.

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Note 8 –Leases

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, common area maintenance are expensed during the period incurred. Variable lease costs were immaterial for the three months and nine-month period ended September 30, 2023 and 2022. 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.

Operating lease expense is recognized on a straight-line basis over the lease term and is included in the Company’s condensed consolidated statement of operations and comprehensive loss. Operating lease cost was $273,631 and $263,159 during the nine-month period ended September 30, 2023 and 2022, respectively.

The following table sets forth the maturities of our operating lease liabilities and reconciles the respective undiscounted payments to the operating lease liabilities in the consolidated balance sheet at September 30, 2023:

Schedule of operating lease liability
Undiscounted Future Minimum Lease Payments	Operating Lease

2023 (Three months remaining)		71,416
2024		286,168
2025		287,193
2026		17,856
Total		662,633
Amount representing imputed interest		(40,248	)
Total operating lease liability		622,385
Current portion of operating lease liability		259,072
Operating lease liability, non-current	$	363,313

The table below presents lease-related terms and discount rates at September 30, 2023:

Schedule of lease-related terms and discount rates
Remaining term on leases			1 to 33 months
Incremental borrowing rate			5.0 to 9.0 %

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Note 9 – Segment Reporting

The Company has two reportable operating segments: (1) the manufacture and distribution of non-alcoholic and alcoholic brand beverages, and (2) the e-commerce sale of beverages. These operating segments are managed respectively, and each segment’s major customers have different characteristics. Segment Reporting is evaluated by our Chief Executive Officer and Chief Financial Officer.


	Three Months Ended September 30						Nine Months Ended September 30
Revenue	2023			2022			2023			2022
Splash Beverage Group	$	1,104,878		$	1,147,248		$	4,130,817		$	3,980,794
E-Commerce		4,039,191			3,723,159			12,030,930			9,315,127

Net revenues, continuing operations		5,144,069			4,870,407			16,161,747			13,295,921

Contribution after Marketing
Splash Beverage Group		(652,727	)		(430,049	)		(1,468,563	)		(1,278,987	)
E-Commerce		1,323,231			1,451,684			4,198,453			3,769,980
Total contribution after marketing		670,504			1,021,635			2,729,890			2,490,993

Contracted services		382,096			438,004			1,094,398			1,196,852
Salary and wages		1,195,916			1,262,935			3,794,179			3,180,198
Non-cash share-based compensation		367,244			1,697,201			1,224,101			7,039,695
Other general and administrative		3,048,779			2,734,377			8,617,013			7,963,231
Loss from continuing operations	$	(4,323,531	)	$	(5,110,882	)	$	(11,999,801	)	$	(16,623,983	)

Total assets	September 30, 2023		December 31, 2022
Splash Beverage Group	$	9,599,010	$	14,723,553
E-Commerce		1,645,036		2,581,150

Total assets	$	11,244,046	$	17,304,703

Splash Beverage Group, Inc.

Notes to the Condensed Consolidated Financial Statements

Note 10 – 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.

Note 11 – Subsequent Events

In October, 2023, the Company received approximately $1.9 million from the issuance of senior secured convertible notes, a convertible promissory note and a merchant agreement. The senior convertible notes have an eighteen-month term, accrue interest at 12% and are convertible into shares of common stock of the Company at $0.85 per share and include 100% warrant coverage. The convertible promissory note has a two-and-a-half-month term and accrues interest at a fixed amount of $50,000.

The notes that matured in October 2023 were extended by the note holders to March 31, 2024.

The maturity dates of the related party notes were extended to March 31, 2024.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement Regarding Forward-Looking Statements

The information in this discussion may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business strategy and expectations. Any statements that are not of historical fact may be deemed to be forward-looking statements. These forward-looking statements involve substantial risks and uncertainties. In some cases you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue”, the negative of the terms or other comparable terminology. Actual events or results may differ materially from the anticipated results or other expectations expressed in the forward-looking statements. In evaluating these statements, you should consider various factors, including the risks included from time to time in other reports or registration statements filed with the United States Securities and Exchange Commission. These factors may cause our actual results to differ materially from any forward-looking statements. The Company disclaim any obligation to publicly update these statements or disclose any difference between actual results and those reflected in these statements.

Unless the context otherwise requires, references in this Form 10-Q to “we,” “us,” “our,” or the “Company” refer to Splash Beverage Group and its subsidiaries.

The following discussion and analysis should be read in conjunction with the Condensed Financial Statements (unaudited) and Notes to Condensed Financial Statements (unaudited) filed herewith.

Business Overview

Results of Operations for the Three Months and Nine Months Ended September 30, 2023 compared to Three Months and Nine Months Ended September 30, 2022.

Net Revenue

Three months ended September 30, 2023:

Revenue increased by 5.6%, over same quarter last year $5,144,069 compared to $4,870,407. The increase of $273,662 was due to:

An increase from our e-commerce distribution platform called Qplash.

Increase in the Energy and Salt brands

Offset by a partial decline in sales in the Hydration, Copa and Pulpoloco brands

Nine months ended September 30, 2023:

Revenue increased by 21.6%, over same period last year $16,161,747 compared to $13,295,921. The increase of $2,865,826 was due to:

An increase from our e-commerce distribution platform called Qplash.

Increase in the Energy, Salt and Copa brands.

Offset by a partial decline in sales in the Hydration and Pulpoloco brands.

Cost of Goods Sold

Three months ended September 30, 2023:

Cost of goods sold increased by 24%, over the same quarter last year $3,847,202compared to $3,101,807. The increase of $745,395 was due to:

Increase in sales

Higher production costs in the Hydration brand

Increase in cost associated with valuation allowances for expired, damaged, or impaired inventory.

Nine months ended September 30, 2023:

Cost of goods sold increased by 27.5%, over the same nine months last year $11,326,298 compared to $8,886,508. The increase of $2,439,790 was due to:

Increase in sales

Higher production costs in the Hydration brand

Increase in cost associated with valuation allowances for expired, damaged, or impaired inventory.

Operating Expenses

Three months ended September 30:

Operating expenses for the three months ended September 30, 2023, was $ 5,620,398 compared to $6,879,482 for the three months ended September 30, 2022, a decrease of $1,259,084. The decrease in operating expenses was primarily due to a decrease in consulting fees.

Nine months ended September 30:

Operating expenses for the nine months ended September 30, 2023, was $ 16,835,250 compared to $21,033,396 for the nine months ended September 30, 2022, a decrease of $4,198,146. The decrease in operating expenses was primarily due to:

Decrease in consulting fees.

Offset by increase in Employee cost due to new hires

Offset by increase in e-commerce shipping and handling directly attributive to increase in e-commerce sales

Net Other Income and Expense

Interest expense for the three and nine months ended September 30, 2023 was $221,488 and $561,249 respectively. For the three and nine months ended September 30, 2022 the interest expenses was $66,193 and $225,543 respectively due to additional convertible notes issued in December 2022.

Included in Other Income for the three months ended September 30, 2023 was an insurance settlement of $57,429. For the three and nine months ended September 30, 2022 the other income / expense $0.

Amortization of debt discount for the three months and nine months ended September 30, 2023 was $1,125,409 and $2,500,065 respectively. For the three and nine months ended September 30, 2022 the amortization of debt discount was $0.

LIQUIDITY, GOING CONCERN CONSIDERATIONS AND CAPITAL RESOURCES

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditure.

As of September 30, 2023, the Company had total cash and cash equivalents of $96,121, as compared with $4,431,745 at December 31, 2022.

Net cash used for operating activities during the nine months ended September 30, 2023 was $8,503,765 as compared to the net cash used by operating activities for the nine months ended September 30, 2022 of $10,824,651. The driver for the change in net cash used is due to a reduction of inventory in 2023 and an increase of inventory to support sales commitments in 2022.

Net cash provided by financing activities during the nine months ended September 30, 2023 was $4,168,730. During the nine months ended September 30, 2023, the Company received $4,500,000 for convertible notes and a $460,000 loan from a related party, which was offset by repayments to debt holders of $757,270.

In order to have sufficient cash to fund operations, the Company will need to raise additional equity or debt capital. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to the Company. The Company will be required to pursue sources of additional capital through various means, including debt or equity financings. Future financings through equity investments are likely to be dilutive to existing stockholders. Also, the terms of new securities the Company may issue in future capital transactions may be more favorable for new investors. Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuance of incentive awards under equity incentive plans, which may have additional dilutive effects. Further, the Company may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. The Company may also be required to recognize non-cash expenses in connection with certain securities the Company may issue, such as convertible notes and warrants, which will adversely impact financial condition. The Company’s ability to obtain needed financing may be impaired by such factors as the capital markets and its history of losses, which could impact the availability or cost of future financings. If the amount of capital the Company are able to raise from financing activities together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that the Company reduce our operations accordingly, the Company may be required to curtail or cease operations. As a result, there is uncertainty regarding the Company’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt as to the Company’s ability to continue as a going concern for at least twelve months from the date of the consolidated financial statements being available to be issued.

CONTRACTUAL OBLIGATIONS

Share obligation:

None.

Minimum Royalty Payments:

The Company has a licensing agreement with ABG TapouT, LLC (“TapouT”). Under the licensing agreement, the Company has minimum royalty payments to TapouT of $165,000 for the three months remaining in 2023.

Inventory Purchase Commitments:

None.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Estimates

None.

Recently Issued Accounting Pronouncements

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required for Smaller Reporting Companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of the principal executive and principal financial officers, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a – 15(e) and 15d – 15(e) under the Securities Exchange Act of 1934, as amended, or Exchange Act, as of the end of the period covered by this Report. Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, because of certain material weaknesses in our internal controls over financial reporting, our disclosure controls and procedures were not effective as of September 30, 2023. The material weaknesses relate to a lack of segregation of duties between accounting and other functions and the absence of sufficient depth of in-house accounting personnel with the ability to properly account for complex transactions.

The Company plans to implement additional internal controls or enhance existing internal controls to strengthen its control environment. Subsequent to the quarter ended September 30, 2023, the Company is reviewing a plan to engage additional internal staff, external staff, or an advisory firm to provide support on technical issues related to U.S. GAAP as related to the maintenance of our accounting books and records and the preparation of our financial statements.

Changes in Internal Control Over Financial Reporting

Except as noted there were no additional changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS

There can be no assurances that the common stock will not be subject to potential delisting if the Company do not continue to maintain the listing requirements of the NYSE American.

Since June 11, 2021, the common stock has been listed on the NYSE American, under the symbol “SBEV”. The NYSE American has rules for continued listing, including, without limitation, minimum market capitalization and other requirements. Failure to maintain our listing (i.e., being de-listed from the NYSE American), would make it more difficult for shareholders to sell our common stock and more difficult to obtain accurate price quotations on our common stock. This could have an adverse effect on the price of common stock. The ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing the Company may need in the future, may also be materially and adversely affected if common stock is not traded on a national securities exchange.

As of September 30, 2023, we have a negative stockholders’ equity. If we are unable to raise additional capital, or otherwise become unable to satisfy our obligations as they become due, we may become insolvent and face the risk of bankruptcy.

Since our inception and throughout most of our history, we have incurred net losses, including but not limited to, a net loss of $16,897,065 incurred in Fiscal 2022. As of December 31, 2022, we also reported positive stockholders’ equity of $9,322,134 and a gross loss of $$112,331,027. However, as of September 30, 2023, our current shareholders’ equity is ($657,830). We incur substantial expenditures related to manufacturing products in the United States, sales and marketing, general and administrative and research and development purposes. Our ability to achieve profitability in the future will primarily depend on our ability to increase sales of our products. Stockholders’ equity improvement will also be dependent on our ability to increase sales which will increase the value of our assets and decrease our liabilities. Future profitability is dependent on our ability to reduce manufacturing costs. However, some manufacturing costs are fixed and cannot be reduced.

Upon the occurrence of a breach relating to our outstanding notes, the lender may seek to remedy.

We may have breached terms on certain of our outstanding loans by violating certain covenants. Although we have not been informed by any of our lenders that we are in default, such lenders could do so, and at such time the lenders may seek to remedy. It is possible that the occurrence of such an event could place us in breach of other outstanding agreements as well. At this time we are current on all of our outstanding payments with respect to all of our outstanding agreements.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In the nine months ended September 30, 2023, the Company issued 1,150,000 shares in connection with convertible instruments. On May 10, 2023, the Company received $800,000 for the sale of convertible notes with 12.0% interest and eighteen-month term to four individual investors totaling 800,000 shares with an exercise price of $1.00 per share, the notes included 400,000 warrants with an exercise price of $0.25 per warrant. On June 28, 2023, the Company received $350,000 for the sale of convertible notes with 12.0% interest and eighteen-month term to two individual investors totaling 350,000 shares with an exercise price of $1.00 per share, the notes included 175,000 warrants with an exercise price of $0.25 per warrant. On August 10, 2023, the Company received $1,100,000 for the sale of a convertible note. The note has a twelve -month term, is non-interest bearing and is convertible into shares of common stock of the Company at $1.00 per share, the note includes 500 shares for every $1,000 purchased in the note. These notes were issued to fund acquisitions, equipment purchases and working capital.

In the three months and nine months ended September 30, 2023, the Company issued 99,999 and 316,665 shares of common stock to consultants in exchange for services and recognized non-cash compensation on our Condensed Consolidated Statement of Operation in the amount of $289,998.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

No disclosure required.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

(a) Exhibits required by Item 601 of Regulation S-K.

Exhibits		Description
	4.1	Form of Warrant (Previously filed as exhibit 4.1 to the Company’s Current Report on Form 8-K with the SEC on August 16, 2023)
	4.2	Form of Warrant (Previously filed as exhibit 4.1 to the Company’s Current Report on Form 8-K with the SEC on October 5, 2023)
	10.1	Form of the SPA (Previously filed as exhibit 10.1 to the Company’s Current Report on Form 8-K with the SEC on August 16, 2023)
	10.2	Form of Investor Note (Previously filed as exhibit 10.2 to the Company’s Current Report on Form 8-K with the SEC on August 16, 2023)
	10.3	Form of Second Investor Note (Previously filed as exhibit 10.3 to the Company’s Current Report on Form 8-K with the SEC on August 16, 2023)
	10.4	Amendment dated August 10, 2023 (Previously filed as exhibit 10.4 to the Company’s Current Report on Form 8-K with the SEC on August 16, 2023)
	10.5	Form of the Purchase Agreement (Previously filed as exhibit 10.5 to the Company’s Current Report on Form 8-K with the SEC on August 16, 2023)
	10.6	Form of the Purchase Agreement (Previously filed as exhibit 10.1 to the Company’s Current Report on Form 8-K with the SEC on October 5, 2023)
	10.7	Form of the Note (Previously filed as exhibit 10.2 to the Company’s Current Report on Form 8-K with the SEC on October 5, 2023)
	10.8	Form of Registration Rights Agreement (Previously filed as exhibit 10.3 to the Company’s Current Report on Form 8-K with the SEC on August 16, 2023)
	31.1	Certification of CEO and Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)*
	31.2	Certification of CFO and Principal Financial and Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a)*
	32.1	Certification of CEO and Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically**
	32.2	Certification of CFO and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically**
	101	XBRL Exhibits
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith

** Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SPLASH BEVERAGE GROUP, INC.

Date: November 14, 2023	By:	/s/ Robert Nistico
		Robert Nistico, Chairman and CEO
		(Principal Executive Officer)

Date: November 14, 2023	By:	/s/ Fatima Dhalla
		Fatima Dhalla, Interim CFO
		(Principal Accounting Officer and Principal Financial Officer)

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert Nistico, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Splash Beverage Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within the registrant, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2023

/s/ Robert Nistico
Robert Nistico
Chief Executive Officer
(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Fatima Dhalla, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Splash Beverage Group Inc.;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the of the registrant as of, and for, the periods presented in this report;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2023

/s/ Fatima Dhalla
Fatima Dhalla
Interim Chief Financial Officer
(Principal Accounting Officer and Principal Financial Officer)

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-Q of Splash Beverage Group Inc., a company duly formed under the laws of Nevada (the “Company”), for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Robert Nistico, President (Chief Executive Officer) of the Company, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2023	/s/ Robert Nistico
	Robert Nistico, Chief Executive Officer (Principal Executive Officer)

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Form 10-Q of Splash Beverage Group, Inc., a company duly formed under the laws of Nevada (the “Company”), for the quarter ended June 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Fatima Dhalla, Interim Chief Financial Officer of the Company, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of her knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2023	/s/ Fatima Dhalla
	Fatima Dhalla Interim Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer)

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Nov. 14, 2023
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-40471
Entity Registrant Name	SPLASH BEVERAGE GROUP, INC.
Entity Central Index Key	0001553788
Entity Tax Identification Number	34-1720075
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	1314 E Las Olas Blvd
Entity Address, Address Line Two	Suite 221
Entity Address, City or Town	Fort Lauderdale
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33301
City Area Code	(954)
Local Phone Number	745-5815
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		43,817,776
Common Stock, $0.001 value per share
Title of 12(b) Security	Common Stock, $0.001 value per share
Trading Symbol	SBEV
Security Exchange Name	NYSE
Warrants to purchase common stock, $0.001 par value per share
Title of 12(b) Security	Warrants to purchase common stock, $0.001 par value per share
Trading Symbol	SBEV-WT
Security Exchange Name	NYSE

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 96,121	$ 4,431,745
Accounts receivable, net	1,512,693	1,812,110
Prepaid expenses	225,446	348,036
Inventory	2,907,461	3,721,307
Other receivables	376,905	344,376
Total current assets	5,118,626	10,657,574
Non-current assets:
Deposit	49,398	49,290
Goodwill	256,823	256,823
Intangible assets, net	4,564,037	4,851,377
Investment in Salt Tequila USA, LLC	250,000	250,000
Operating lease right of use asset	619,559	750,042
Property and equipment, net	385,603	489,597
Total non-current assets	6,125,420	6,647,129
Total assets	11,244,046	17,304,703
Current liabilities
Accounts payable and accrued expenses	4,199,476	3,383,187
Liability to issue shares	0	91,800
Operating lease liabilities - current	259,072	268,749
Notes payable, current portion	5,548,830	1,080,257
Due to related party	426,000	0
Shareholder advance	200,000	0
Accrued interest payable	496,384	141,591
Total current liabilities	11,129,762	4,965,584
Long-term liabilities:
Notes payable	408,801	2,536,319
Operating lease liabilities - noncurrent	363,313	480,666
Total long-term liabilities	772,114	3,016,985
Total liabilities	11,901,876	7,982,569
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized, no shares issued	0	0
Common Stock, $0.001 par, 300,000,000 shares authorized, 42,902,185 shares issued, 42,902,185 shares outstanding at September 30, 2023 and 41,085,520 shares issued, 41,085,520 shares outstanding at December 31, 2022	42,902	41,086
Additional paid in capital	126,648,371	121,632,547
Accumulated other comprehensive loss	(8,448)	(20,472)
Accumulated deficit	(127,340,655)	(112,331,027)
Total stockholders’ equity	(657,830)	9,322,134
Total liabilities and stockholders’ equity	$ 11,244,046	$ 17,304,703

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock shares issued	0	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	300,000,000	300,000,000
Common stock shares issued	42,902,185	41,085,520
Common stock shares outstanding	42,902,185	41,085,520

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Net revenues	$ 5,144,069	$ 4,870,407	$ 16,161,747	$ 13,295,921
Cost of goods sold	(3,847,202)	(3,101,807)	(11,326,298)	(8,886,508)
Gross profit	1,296,867	1,768,600	4,835,449	4,409,413
Operating expenses:
Contracted services	382,096	438,004	1,094,398	1,196,852
Salary and wages	1,195,916	1,262,935	3,794,179	3,180,198
Non-cash share-based compensation	367,244	1,697,201	1,224,101	7,039,695
Other general and administrative	3,048,779	2,734,377	8,617,013	7,698,231
Sales and marketing	626,363	746,965	2,105,559	1,918,420
Total operating expenses	5,620,398	6,879,482	16,835,250	21,033,396
Loss from continuing operations	(4,323,531)	(5,110,882)	(11,999,801)	(16,623,983)
Other income/(expense):
Interest income	348	158	1,668	2,867
Interest expense	(221,488)	(66,193)	(561,249)	(225,543)
Other Income	0	0	49,819	0
Amortization of debt discount	(1,125,410)	0	(2,500,065)	0
Total other expense	(1,346,550)	(66,035)	(3,009,827)	(222,676)
Provision for income taxes	0	0	0	0
Net loss from continuing operations, net of tax	(5,670,081)	(5,176,917)	(15,009,628)	(16,846,659)
Net loss from discontinued operations, net of tax	0	0	0	(199,154)
Gain on sale of discontinued operations	0	33,116	0	148,748
Income (Loss) from discontinued operations	0	33,116	0	(50,406)
Net loss	(5,670,081)	(5,143,801)	(15,009,628)	(16,897,065)
Other Comprehensive Income
Foreign currency translation Income	29,406	0	12,024	0
Total Comprehensive Loss	$ (5,640,675)	$ (5,143,801)	$ (14,997,604)	$ (16,897,065)

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
(Loss) per share - continuing operations, Basic	$ (0.13)	$ (0.14)	$ (0.36)	$ (0.46)
(Loss) per share - continuing operations, Diluted	$ (0.13)	$ (0.14)	$ (0.36)	$ (0.46)
Weighted average number of common shares outstanding - continuing operations, Basic	42,812,058	37,364,031	41,991,259	36,417,222
Weighted average number of common shares outstanding - continuing operations, Diluted	42,812,058	37,364,031	41,991,259	36,417,222

Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 33,596	$ 99,480,188		$ (90,640,557)	$ 8,873,227
Beginning balance, shares at Dec. 31, 2021	33,596,232
Issuance of common stock on convertible instruments	$ 224	1,206,287			1,206,511
Issuance of common stock on convertible instruments, shares	223,596
Issuance of warrants and options for services		1,242,697			1,242,697
Issuance of common stock for services	$ 550	1,112,845			1,113,395
Issuance of common stock for services, shares	550,000
Issuance of common stock and warrants for cash	$ 2,300	8,065,100			8,067,400
Issuance of common stock and warrants for cash, shares	2,300,000
Net loss				(5,994,407)	(5,994,407)
Ending balance, value at Mar. 31, 2022	$ 36,670	111,107,117		(96,634,964)	14,508,822
Ending balance, shares at Mar. 31, 2022	36,669,828
Beginning balance, value at Dec. 31, 2021	$ 33,596	99,480,188		(90,640,557)	8,873,227
Beginning balance, shares at Dec. 31, 2021	33,596,232
Net loss					(16,897,065)
Ending balance, value at Sep. 30, 2022	$ 39,651	117,487,990	2,225	(107,537,622)	9,992,245
Ending balance, shares at Sep. 30, 2022	39,650,787
Beginning balance, value at Mar. 31, 2022	$ 36,670	111,107,117		(96,634,964)	14,508,822
Beginning balance, shares at Mar. 31, 2022	36,669,828
Issuance of warrants for services		1,174,289			1,174,289
Issuance of common stock for services	$ 500	1,429,500			1,430,000
Issuance of common stock for services, shares	500,000
Issuance of common stock and warrants for cash	$ 100	109,900			110,000
Issuance of common stock and warrants for cash, shares	100,000
Accumulated Comprehensive loss – translation, net			(6,570)		(6,570)
Net loss				(5,758,857)	(5,758,857)
Ending balance, value at Jun. 30, 2022	$ 37,270	113,820,805	(6,570)	(102,393,821)	11,457,685
Ending balance, shares at Jun. 30, 2022	37,269,828
Issuance of warrants for services		1,036,066			1,036,066
Issuance of common stock for APA	$ 381	(381)
Issuance of common stock for APA, shares	380,959
Issuance of common stock and warrants for cash	$ 2,000	2,631,500			2,633,500
Issuance of common stock and warrants for cash, shares	2,000,000
Accumulated Comprehensive loss – translation, net			8,795		8,795
Net loss				(5,143,801)	(5,143,801)
Ending balance, value at Sep. 30, 2022	$ 39,651	117,487,990	2,225	(107,537,622)	9,992,245
Ending balance, shares at Sep. 30, 2022	39,650,787
Beginning balance, value at Dec. 31, 2022	$ 41,086	121,632,546	(20,472)	(112,331,026)	9,322,134
Beginning balance, shares at Dec. 31, 2022	41,085,520
Common stock issuable and beneficial conversion feature on convertible 12-month promissory note		1,786,468			1,786,468
Issuance of warrants for services		215,760			215,760
Accumulated Comprehensive loss – translation, net			(1,609)		(1,609)
Net loss				(3,729,299)	(3,729,299)
Ending balance, value at Mar. 31, 2023	$ 41,086	123,634,774	(22,081)	(116,060,325)	7,593,454
Ending balance, shares at Mar. 31, 2023	41,085,520
Beginning balance, value at Dec. 31, 2022	$ 41,086	121,632,546	(20,472)	(112,331,026)	9,322,134
Beginning balance, shares at Dec. 31, 2022	41,085,520
Net loss					(15,009,628)
Ending balance, value at Sep. 30, 2023	$ 42,902	126,648,371	(8,448)	(127,340,655)	(657,830)
Ending balance, shares at Sep. 30, 2023	42,902,185
Beginning balance, value at Mar. 31, 2023	$ 41,086	123,634,774	(22,081)	(116,060,325)	7,593,454
Beginning balance, shares at Mar. 31, 2023	41,085,520
Issuance of common stock on convertible instruments	$ 1,500	(1,500)
Issuance of common stock on convertible instruments, shares	1,500,000
Share based compensation		509,232			509,232
Issuance of common stock for services	$ 216	223,449			223,665
Issuance of common stock for services, shares	216,666
Issuance of warrants on convertible instruments		1,269,669			1,269,669
Accumulated Comprehensive loss – translation, net			(15,773)		(15,773)
Net loss				(5,610,249)	(5,610,249)
Ending balance, value at Jun. 30, 2023	$ 42,802	125,635,624	(37,854)	(121,670,574)	3,969,998
Ending balance, shares at Jun. 30, 2023	42,802,186
Debt discount from convertible instrument		79,817			79,817
Share based compensation		300,912			300,912
Issuance of common stock for services	$ 100	66,232			66,332
Issuance of common stock for services, shares	99,999
Issuance of warrants on convertible instruments		565,786			565,786
Accumulated Comprehensive loss – translation, net			29,406		29,406
Net loss				(5,670,081)	(5,670,081)
Ending balance, value at Sep. 30, 2023	$ 42,902	$ 126,648,371	$ (8,448)	$ (127,340,655)	$ (657,830)
Ending balance, shares at Sep. 30, 2023	42,902,185

Condensed Consolidated Statement Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Statement of Cash Flows [Abstract]
Net loss	$ (15,009,628)	$ (16,897,065)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	403,948	306,900
Amortization of debt discount	2,500,065	(0)
ROU assets, net	3,453	4,888
Loss (gain) from sale of discontinued operation	0	50,407
Common stock issued for services	289,998	0
Non-cash share-based compensation	1,224,101	7,107,684
Changes in working capital items:
Accounts receivable, net	299,417	(364,161)
Inventory, net	813,846	(1,660,852)
Prepaid expenses and other current assets	90,061	(398,328)
Deposits	(108)	281,635
Accounts payable and accrued expenses	526,290	732,139
Accrued interest payable	354,792	12,101
Net cash used in operating activities - continuing operations	(8,503,765)	(10,824,652)
Cash flows from investing activities:
Capital expenditures	(12,613)	(45,420)
Net cash used in investing activities - continuing operations	(12,613)	(45,420)
Cash flows from financing activities:
Proceeds from issuance of common stock	0	10,810,900
Cash advance from related party	426,000	0
Cash advance from shareholder	200,000	(280,500)
Proceeds from issuance of debt	4,300,000	45,420
Principal repayment of debt	(757,270)	(1,285,861)
Net cash provided by financing activities - continuing operations	4,168,730	9,289,959
Net cash effect of exchange rate changes on cash	12,024	0
Net change in cash and cash equivalents	(4,335,624)	(1,580,113)
Cash and cash equivalents, beginning of year	4,431,745	4,181,383
Cash and cash equivalents, end of period	96,121	2,601,270
Supplemental disclosure of cash flow information:
Cash paid for Interest	206,456	164,107
Supplemental disclosure of non-cash investing and financing activities
Notes payable and accrued interest converted to common stock (223,596 shares)	0	1,206,511
Non-cash debt discount in the form of issuance of equity instruments and beneficial conversion feature in conjunction with convertible notes	$ 3,099,940	$ 0

Business Organization and Nature of Operations

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Organization and Nature of Operations

Note 1 – Business Organization and Nature of Operations

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2 – Summary of Significant Accounting Policies

Basis of Accounting

Basis of Presentation and Consolidation

Canfield Medical Supply, Inc. (“CMS”) (as discontinued operations), was consolidated until September 30, 2022.

All intercompany balances have been eliminated in consolidation.

Our investment in Salt Tequila USA, LLC is carried at cost less impairment, the investment does not have a readily determinable fair value.

Use of Estimates

Cash Equivalents and Concentration of Cash Balance

At September 30, 2023 the Company’s cash on deposit with financial institutions, at times, had not exceed federally insured limits of $250,000.

Accounts Receivable and Allowance for Doubtful Accounts

Inventory

Property and Equipment

Schedule of property and equipment
	2023			2022
Auto		45,420			45,420
Machinery & equipment		1,160,578			1,108,870
Buildings		233,323			282,988
Leasehold improvements		723,639			713,068
Computer Software		5,979			—
Office furniture & equipment		7,657			13,636
Total cost		2,176,596			2,163,983
Accumulated depreciation		(1,790,993	)		(1,674,385	)
Property, plant & equipment, net		385,603			489,597

Excise taxes

Fair Value of Financial Instruments

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.

Revenue Recognition

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.

Other General and Administrative Expenses

Shipping and Handling Costs

Stock-Based Compensation

Income Taxes

Net income (loss) per share

Advertising

Goodwill and Intangibles Assets

Long-lived assets

Segment reporting

Recent Accounting Pronouncements

Foreign Currency Gains/Losses

Liquidity and Going Concern Considerations

Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable and Revenue Financing Arrangements

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable and Revenue Financing Arrangements

Note 3 – Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable and Revenue Financing Arrangements

Notes payable are generally non-recourse and secured by all Company owned assets.

Schedule of notes payable
	Interest Rate			September 30, 2023		December 31, 2022
Notes Payable and Convertible Notes Payable

In March 2014, the Company 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 and interest was paid off in February 2023		8	%		—		200,000

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 is due September 2025. Note is guaranteed by a related party see note 6.		17	%		494,204		1,044,445

In April 2021, the Company entered into various six-month loans with individuals totaling in the amount of $168,000. The loans had an original maturity of October 2021 with principal and interest due at maturity with conversion price of $3.30 per share. The loans were extended to March 31, 2024.		7	%		168,000		168,000

In May 2021, the Company entered into various six-month loans with individuals totaling in the amount of $60,000. The loans had an original maturity of October 2021 with principal and interest due at maturity with conversion price of $3.30 per share. The loans were extended to March 31, 2024.		7	%		60,000		60,000

In August 2022, the Company entered into a 56-months auto loan in the amount of $45,420.	2.35	%	35,367	42,396

In December 2022, the Company entered into various eighteen-month loans with individuals totaling in the amount of $4,000,000. The notes included 100% warrant coverage. The loans mature in June 2024 with principal and interest due at maturity with conversion price of $1.00 per share.	12	%	4,000,000	4,000,000

In February 2023, the Company entered into a twelve-month loan with an entity in the amount of $2,000,000. The convertible note included the issuance of 1,500,000 shares of common stock . The loan matures in February 2024 with conversion price of $0.85 per share and is non-interest bearing	—		2,000,000	—

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 $1.00 per share.	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 $1.00 per share.	12	%		350,000			—

In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $750,000. The note included 100% warrant coverage. The loan matures in July 2024 with principal and interest due at maturity with conversion price of $1.00 per share.	12	%		750,000			—

In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $100,000. The note included 100% warrant coverage. The loan matures in January 2025 with principal and interest due at maturity with conversion price of $1.00 per share.	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 matures in August 2024 with principal and interest due at maturity with conversion price of $0.85 per share and is non-interest bearing.		-		300,000			—

Total notes payable			$	9,057,571		$	5,514,841

Less notes discount				(3,099,940	)		(1,898,265	)
Less current portion				(5,548,830	)		(1,080,257	)

Long-term notes payable			$	408,801		$	2,536,319

As of September 30, 2023, the Company’s convertible note balances are convertible into 9,222,251 shares of common stock.

Shareholder Advances

As of February 23, 2023, the Company received a shareholder advance for $200,000 with a 12% interest rate and interest expense was $14,400 for the nine months ended September 30, 2023.

Licensing Agreement and Royalty Payable

9 Months Ended

Sep. 30, 2023

Licensing Agreement And Royalty Payable

Licensing Agreement and Royalty Payable

Note 4 – Licensing Agreement and Royalty Payable

Stockholders’ Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Stockholders’ Equity

Note 5– Stockholders’ Equity

Common Stock

Stock Plans

2020 Plan

In October 2023, the shareholders voted to increase the number of shares issuable under the Plan to 7.5%.

The following is a summary of the Company’s stock option activity during the period ended September 30, 2023:

Schedule of stock option activity
	Stock options		Weighted average exercise price of outstanding stock options		Weighted average remaining life (Yrs)
Balance January 01, 2023 *		1,151,000	$	1.12
Granted		65,000		1.08
Exercises		—		—
Cancelled		—		—
Balance March 31, 2023		1,216,000	$	1.12

Granted		3,376,008		1.13
Exercises		—		—
Cancelled		—		—

Balance - June 30, 2023		4,592,008	$	1.13


Exercisable - June 30, 2023		3,608,923	$	1.12

Granted		—		—
Exercises		—		—
Cancelled		—		—

Balance - September 30, 2023		4,592,008	$	1.13	$	6.41

Exercisable - September 30, 2023		3,608,923	$	1.12	$	5.68

*	These prices are reflective of the price modification made on April 24, 2023.

The Company recognized $300,912 and $1,025,903 of share-based compensation during the three months and nine months ended September 30, 2023.

The following is a summary of the Company’s Warrant activity.

Schedule of warrant activity
	Warrants		Weighted average exercise price of outstanding warrants		Weighted average remaining term (Yrs)
Balance December 31, 2022		14,343,896	$	1.85
Granted		—		—
Balance March 31, 2023		14,343,896	$	1.85

Granted		575,000		0.25
Exercises		68,146		2.19
Cancelled		2,345,677		2.32

Balance - June 30, 2023		12,505,073	$	1.68		3.19

Granted		425,000		0.25
Exercises		—		—
Cancelled		—		—

Balance - September 30, 2023		12,930,073	$	1.63		2.93

Related Parties

9 Months Ended

Sep. 30, 2023

Related Parties

Note 6 – Related Parties

Investment in Salt Tequila USA, LLC

9 Months Ended

Sep. 30, 2023

Investments, All Other Investments [Abstract]

Investment in Salt Tequila USA, LLC

Note 7 – 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.

Leases

9 Months Ended

Sep. 30, 2023

Leases

Leases

Note 8 –Leases

Schedule of operating lease liability
Undiscounted Future Minimum Lease Payments	Operating Lease

2023 (Three months remaining)		71,416
2024		286,168
2025		287,193
2026		17,856
Total		662,633
Amount representing imputed interest		(40,248	)
Total operating lease liability		622,385
Current portion of operating lease liability		259,072
Operating lease liability, non-current	$	363,313

The table below presents lease-related terms and discount rates at September 30, 2023:

Schedule of lease-related terms and discount rates
Remaining term on leases			1 to 33 months
Incremental borrowing rate			5.0 to 9.0 %

Segment Reporting

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Reporting

Note 9 – Segment Reporting


	Three Months Ended September 30						Nine Months Ended September 30
Revenue	2023			2022			2023			2022
Splash Beverage Group	$	1,104,878		$	1,147,248		$	4,130,817		$	3,980,794
E-Commerce		4,039,191			3,723,159			12,030,930			9,315,127

Net revenues, continuing operations		5,144,069			4,870,407			16,161,747			13,295,921

Contribution after Marketing
Splash Beverage Group		(652,727	)		(430,049	)		(1,468,563	)		(1,278,987	)
E-Commerce		1,323,231			1,451,684			4,198,453			3,769,980
Total contribution after marketing		670,504			1,021,635			2,729,890			2,490,993

Contracted services		382,096			438,004			1,094,398			1,196,852
Salary and wages		1,195,916			1,262,935			3,794,179			3,180,198
Non-cash share-based compensation		367,244			1,697,201			1,224,101			7,039,695
Other general and administrative		3,048,779			2,734,377			8,617,013			7,963,231
Loss from continuing operations	$	(4,323,531	)	$	(5,110,882	)	$	(11,999,801	)	$	(16,623,983	)

Total assets	September 30, 2023		December 31, 2022
Splash Beverage Group	$	9,599,010	$	14,723,553
E-Commerce		1,645,036		2,581,150

Total assets	$	11,244,046	$	17,304,703

Commitment and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitment and Contingencies

Note 10 – Commitment and Contingencies

Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

Note 11 – Subsequent Events

The notes that matured in October 2023 were extended by the note holders to March 31, 2024.

The maturity dates of the related party notes were extended to March 31, 2024.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Accounting

Basis of Accounting

Basis of Presentation and Consolidation

Basis of Presentation and Consolidation

Canfield Medical Supply, Inc. (“CMS”) (as discontinued operations), was consolidated until September 30, 2022.

All intercompany balances have been eliminated in consolidation.

Our investment in Salt Tequila USA, LLC is carried at cost less impairment, the investment does not have a readily determinable fair value.

Use of Estimates

Use of Estimates

Cash Equivalents and Concentration of Cash Balance

Cash Equivalents and Concentration of Cash Balance

At September 30, 2023 the Company’s cash on deposit with financial institutions, at times, had not exceed federally insured limits of $250,000.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Inventory

Inventory

Property and Equipment

Property and Equipment

Schedule of property and equipment
	2023			2022
Auto		45,420			45,420
Machinery & equipment		1,160,578			1,108,870
Buildings		233,323			282,988
Leasehold improvements		723,639			713,068
Computer Software		5,979			—
Office furniture & equipment		7,657			13,636
Total cost		2,176,596			2,163,983
Accumulated depreciation		(1,790,993	)		(1,674,385	)
Property, plant & equipment, net		385,603			489,597

Excise taxes

Excise taxes

Fair Value of Financial Instruments

Fair Value of Financial Instruments

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.

Revenue Recognition

Revenue Recognition

Cost of Goods Sold

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.

Other General and Administrative Expenses

Other General and Administrative Expenses

Shipping and Handling Costs

Shipping and Handling Costs

Stock-Based Compensation

Stock-Based Compensation

Income Taxes

Income Taxes

Net income (loss) per share

Net income (loss) per share

Advertising

Advertising

Goodwill and Intangibles Assets

Goodwill and Intangibles Assets

Long-lived assets

Long-lived assets

Segment reporting

Segment reporting

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Foreign Currency Gains/Losses

Foreign Currency Gains/Losses

Liquidity and Going Concern Considerations

Liquidity and Going Concern Considerations

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of property and equipment

Schedule of property and equipment
	2023			2022
Auto		45,420			45,420
Machinery & equipment		1,160,578			1,108,870
Buildings		233,323			282,988
Leasehold improvements		723,639			713,068
Computer Software		5,979			—
Office furniture & equipment		7,657			13,636
Total cost		2,176,596			2,163,983
Accumulated depreciation		(1,790,993	)		(1,674,385	)
Property, plant & equipment, net		385,603			489,597

Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable and Revenue Financing Arrangements (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of notes payable

Schedule of notes payable
	Interest Rate			September 30, 2023		December 31, 2022
Notes Payable and Convertible Notes Payable

In March 2014, the Company 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 and interest was paid off in February 2023		8	%		—		200,000

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 is due September 2025. Note is guaranteed by a related party see note 6.		17	%		494,204		1,044,445

In April 2021, the Company entered into various six-month loans with individuals totaling in the amount of $168,000. The loans had an original maturity of October 2021 with principal and interest due at maturity with conversion price of $3.30 per share. The loans were extended to March 31, 2024.		7	%		168,000		168,000

In May 2021, the Company entered into various six-month loans with individuals totaling in the amount of $60,000. The loans had an original maturity of October 2021 with principal and interest due at maturity with conversion price of $3.30 per share. The loans were extended to March 31, 2024.		7	%		60,000		60,000

In August 2022, the Company entered into a 56-months auto loan in the amount of $45,420.	2.35	%	35,367	42,396

In December 2022, the Company entered into various eighteen-month loans with individuals totaling in the amount of $4,000,000. The notes included 100% warrant coverage. The loans mature in June 2024 with principal and interest due at maturity with conversion price of $1.00 per share.	12	%	4,000,000	4,000,000

In February 2023, the Company entered into a twelve-month loan with an entity in the amount of $2,000,000. The convertible note included the issuance of 1,500,000 shares of common stock . The loan matures in February 2024 with conversion price of $0.85 per share and is non-interest bearing	—		2,000,000	—

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 $1.00 per share.	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 $1.00 per share.	12	%		350,000			—

In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $750,000. The note included 100% warrant coverage. The loan matures in July 2024 with principal and interest due at maturity with conversion price of $1.00 per share.	12	%		750,000			—

In July 2023, the Company entered into a twelve-month loan with an individual in the amount of $100,000. The note included 100% warrant coverage. The loan matures in January 2025 with principal and interest due at maturity with conversion price of $1.00 per share.	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 matures in August 2024 with principal and interest due at maturity with conversion price of $0.85 per share and is non-interest bearing.		-		300,000			—

Total notes payable			$	9,057,571		$	5,514,841

Less notes discount				(3,099,940	)		(1,898,265	)
Less current portion				(5,548,830	)		(1,080,257	)

Long-term notes payable			$	408,801		$	2,536,319

Stockholders’ Equity (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of stock option activity

Schedule of stock option activity
	Stock options		Weighted average exercise price of outstanding stock options		Weighted average remaining life (Yrs)
Balance January 01, 2023 *		1,151,000	$	1.12
Granted		65,000		1.08
Exercises		—		—
Cancelled		—		—
Balance March 31, 2023		1,216,000	$	1.12

Granted		3,376,008		1.13
Exercises		—		—
Cancelled		—		—

Balance - June 30, 2023		4,592,008	$	1.13


Exercisable - June 30, 2023		3,608,923	$	1.12

Granted		—		—
Exercises		—		—
Cancelled		—		—

Balance - September 30, 2023		4,592,008	$	1.13	$	6.41

Exercisable - September 30, 2023		3,608,923	$	1.12	$	5.68

*	These prices are reflective of the price modification made on April 24, 2023.

Schedule of warrant activity

Schedule of warrant activity
	Warrants		Weighted average exercise price of outstanding warrants		Weighted average remaining term (Yrs)
Balance December 31, 2022		14,343,896	$	1.85
Granted		—		—
Balance March 31, 2023		14,343,896	$	1.85

Granted		575,000		0.25
Exercises		68,146		2.19
Cancelled		2,345,677		2.32

Balance - June 30, 2023		12,505,073	$	1.68		3.19

Granted		425,000		0.25
Exercises		—		—
Cancelled		—		—

Balance - September 30, 2023		12,930,073	$	1.63		2.93

Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases

Schedule of operating lease liability

Schedule of operating lease liability
Undiscounted Future Minimum Lease Payments	Operating Lease

2023 (Three months remaining)		71,416
2024		286,168
2025		287,193
2026		17,856
Total		662,633
Amount representing imputed interest		(40,248	)
Total operating lease liability		622,385
Current portion of operating lease liability		259,072
Operating lease liability, non-current	$	363,313

Schedule of lease-related terms and discount rates

Schedule of lease-related terms and discount rates
Remaining term on leases			1 to 33 months
Incremental borrowing rate			5.0 to 9.0 %

Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Schedule of segment reporting information


	Three Months Ended September 30						Nine Months Ended September 30
Revenue	2023			2022			2023			2022
Splash Beverage Group	$	1,104,878		$	1,147,248		$	4,130,817		$	3,980,794
E-Commerce		4,039,191			3,723,159			12,030,930			9,315,127

Net revenues, continuing operations		5,144,069			4,870,407			16,161,747			13,295,921

Contribution after Marketing
Splash Beverage Group		(652,727	)		(430,049	)		(1,468,563	)		(1,278,987	)
E-Commerce		1,323,231			1,451,684			4,198,453			3,769,980
Total contribution after marketing		670,504			1,021,635			2,729,890			2,490,993

Contracted services		382,096			438,004			1,094,398			1,196,852
Salary and wages		1,195,916			1,262,935			3,794,179			3,180,198
Non-cash share-based compensation		367,244			1,697,201			1,224,101			7,039,695
Other general and administrative		3,048,779			2,734,377			8,617,013			7,963,231
Loss from continuing operations	$	(4,323,531	)	$	(5,110,882	)	$	(11,999,801	)	$	(16,623,983	)

Total assets	September 30, 2023		December 31, 2022
Splash Beverage Group	$	9,599,010	$	14,723,553
E-Commerce		1,645,036		2,581,150

Total assets	$	11,244,046	$	17,304,703

Summary of Significant Accounting Policies (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 2,176,596	$ 2,163,983
Accumulated depreciation	(1,790,993)	(1,674,385)
Property and equipment, net	385,603	489,597
Auto [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	45,420	45,420
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	1,160,578	1,108,870
Building [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	233,323	282,988
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	723,639	713,068
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	5,979	0
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, at cost	$ 7,657	$ 13,636

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Cost of goods sold		$ 617,553		$ 1,753,208
Shipping and handling expenses		176,504		602,479
Amazon selling fees		441,049		1,150,729
Cash equivalents	$ 0		$ 0		$ 0
Federally insured amount	250,000		250,000
Accounts receivable allowances	14,634		14,634		13,683
Inventory valuation reserves	253,603		253,603		$ 66,146
Depreciation expense	38,242	27,762	98,285	101,991
Shipping and handling cost	1,279,189	1,268,636	$ 4,016,394	3,261,266
Effective incomet tax rate reconciliation percentage			50.00%
Advertising expense	248,512	746,965	$ 1,075,127	1,918,420
Foreign currency translation net gain (loss)	$ 13,632	$ 4,345	$ 12,023	$ (2,225)
Minimum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment useful life	3 years		3 years
Maximum [Member]
Property, Plant and Equipment [Line Items]
Property and equipment useful life	39 years		39 years

Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable, Revenue Financing Arrangements and Bridge Loan Payable (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Total notes payable	$ 9,057,571	$ 5,514,841
Less notes discount	(3,099,940)	(1,898,265)
Less current portion	(5,548,830)	(1,080,257)
Long-term notes payable	408,801	2,536,319
Notes Payables 1 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 200,000
Warrant issued	272,584
Share price	$ 0.94
Interest rate	8.00%
Total notes payable	$ 0	200,000
Notes Payables 2 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 1,578,237
Interest rate	17.00%
Total notes payable	$ 494,204	1,044,445
Notes Payables 2 [Member] \| Through November 2022 [Member]
Short-Term Debt [Line Items]
Interest rate	3.75%
Notes Payables 2 [Member] \| Through September 2025 [Member]
Short-Term Debt [Line Items]
Interest rate	4.00%
Notes Payables 3 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 168,000
Interest rate	7.00%
Total notes payable	$ 168,000	168,000
Conversion price	$ 3.30
Notes Payables 4 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 60,000
Interest rate	7.00%
Total notes payable	$ 60,000	60,000
Conversion price	$ 3.30
Notes Payables 5 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 45,420
Interest rate	2.35%
Total notes payable	$ 35,367	42,396
Notes Payables 6 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 4,000,000
Interest rate	12.00%
Total notes payable	$ 4,000,000	4,000,000
Conversion price	$ 1.00
Warrant coverage percentage	100.00%
Notes Payables 7 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 2,000,000
Total notes payable	$ 2,000,000	0
Conversion price	$ 0.85
Issueance of common stock	1,500,000
Notes Payables 8 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 800,000
Interest rate	12.00%
Total notes payable	$ 800,000	0
Conversion price	$ 1.00
Warrant coverage percentage	50.00%
Notes Payables 9 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 350,000
Interest rate	12.00%
Total notes payable	$ 350,000	0
Conversion price	$ 1.00
Warrant coverage percentage	50.00%
Notes Payables 10 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 750,000
Interest rate	12.00%
Total notes payable	$ 750,000	0
Conversion price	$ 1.00
Warrant coverage percentage	100.00%
Notes Payables 11 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 100,000
Interest rate	12.00%
Total notes payable	$ 100,000	0
Conversion price	$ 1.00
Warrant coverage percentage	100.00%
Notes Payables 12 [Member]
Short-Term Debt [Line Items]
Debt instrument face amount	$ 300,000
Total notes payable	$ 300,000	$ 0
Conversion price	$ 0.85
Issueance of common stock	150,000

Notes Payable, Related Party Notes Payable, Convertible Bridge Loans Payable and Revenue Financing Arrangements (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Feb. 23, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Short-Term Debt [Line Items]
Accrued interest amount		$ 496,384		$ 496,384		$ 141,591
Number of shares converted				9,222,251
Shareholder [Member]
Short-Term Debt [Line Items]
Interest expense				$ 14,400
Shareholder advance	$ 200,000
Interest rate	12.00%
Notes Payables [Member]
Short-Term Debt [Line Items]
Interest expense		207,087	$ 65,007	546,849	$ 217,123
Accrued interest amount		$ 496,384		$ 496,384
Effective interest rate		41.07%		41.07%

Licensing Agreement and Royalty Payable (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Licensing Agreement And Royalty Payable
Royalty payments			$ 55,000	$ 54,450
Royalty paid	$ 165,000	$ 163,350	$ 495,000	$ 490,050
Amortized useful life			10 years

Stockholders' Equity (Details) - Options Held [Member] - $ / shares

3 Months Ended

Sep. 30, 2023

Jun. 30, 2023

Mar. 31, 2023

Offsetting Assets [Line Items]

Options outstanding beginning balance

4,592,008

1,216,000

1,151,000

^[1]

Weighted average exercise price at beginning

$ 1.13

$ 1.12

^[1]

Options granted

3,376,008

65,000

Weighted average exercise price granted

$ 0

$ 1.13

$ 1.08

Options exercised

Weighted average exercise price exercises

$ 0

Options cancelled

Weighted average exercise price cancelled

$ 0

Options, Exercisable

3,608,923

Weighted average exercise price, Exercisable

$ 1.12

Options outstanding ending balance

4,592,008

1,216,000

Weighted average exercise price at ending

$ 1.13

$ 1.12

Weighted average remaining life

6 years 4 months 28 days

Weighted average contract remaining life

5 years 8 months 4 days

[1]	These prices are reflective of the price modification made on April 24, 2023.

Stockholders' Equity (Details 1) - Warrant [Member] - $ / shares	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023
Accumulated Other Comprehensive Income (Loss) [Line Items]
Warrant outstanding beginning balance	12,505,073	14,343,896	14,343,896
Weighted average exercise price, beginning balance	$ 1.68	$ 1.85	$ 1.85
Granted	425,000	575,000	0
Weighted average exercise price, Granted	$ 0.25	$ 0.25	$ 0
Exercises	0	68,146
Weighted average exercise price, Exercises	$ 0	$ 2.19
Cancelled	0	2,345,677
Weighted average exercise price, Cancelled	$ 0	$ 2.32
Weighted average remaining term	2 years 11 months 4 days	3 years 2 months 8 days
Warrant outstanding ending balance	12,930,073	12,505,073	14,343,896
Weighted average exercise price, ending balance	$ 1.63	$ 1.68	$ 1.85

Stockholders’ Equity (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended	9 Months Ended
Stockholders’ Equity (Details Narrative) - USD ($)	Jan. 31, 2023	Jan. 31, 2022	Sep. 30, 2023	Sep. 30, 2023
Subsidiary, Sale of Stock [Line Items]
Share based compensation, shares			99,999	316,666
Share based compensation, value			$ 66,332	$ 289,998
Liability to issue shares, shares				100,000
Liability to issue shares				$ 91,800
Share-based compensation expense			$ 300,912	1,025,903
Stock Incentive 2020 Plan [Member]
Subsidiary, Sale of Stock [Line Items]
Number of shares issued	2,054,276	1,679,812
Private Placement [Member]
Subsidiary, Sale of Stock [Line Items]
Convertible shares, value				$ 8,500,000
Convertible shares, shares				3,725,000
Number of warrants issued				1,000,000
Private Placement [Member] \| Director [Member]
Subsidiary, Sale of Stock [Line Items]
Convertible shares, value				$ 4,300,000

Related Parties (Details Narrative) - USD ($)			3 Months Ended		9 Months Ended
Related Parties (Details Narrative) - USD ($)	Aug. 31, 2023	Jun. 22, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Note payable balance					$ 494,204
Received interest free short term loan		$ 250,000
Expense payable			$ 221,488	$ 66,193	561,249	$ 225,543
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Received interest free short term loan	$ 165,000				165,000
Expense payable	$ 11,000				$ 11,000

Investment in Salt Tequila USA, LLC (Details Narrative) - S A L T Tequila U S A L L C [Member]	Sep. 30, 2023
Investment interest rate	22.50%
Ownership percentage	37.50%

Leases (Details)	Sep. 30, 2023 USD ($)
Leases
2023 (Three months remaining)	$ 71,416
2024	286,168
2025	287,193
2026	17,856
Total	662,633
Amount representing imputed interest	(40,248)
Total operating lease liability	622,385
Current portion of operating lease liability	259,072
Operating lease liability, non-current	$ 363,313

Leases (Details 1)	Sep. 30, 2023
Minimum [Member]
Remaining term on leases	1 month
Incremental borrowing rate	5.00%
Maximum [Member]
Remaining term on leases	33 months
Incremental borrowing rate	9.00%

Leases (Details Narrative) - USD ($)	9 Months Ended
Leases (Details Narrative) - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Leases
Operating lease cost	$ 273,631	$ 263,159

Segment Reporting (Details) - USD ($)	3 Months Ended		9 Months Ended
Segment Reporting (Details) - USD ($)	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Revenue from External Customer [Line Items]
Total revenues net, continuing operations	$ 5,144,069	$ 4,870,407	$ 16,161,747	$ 13,295,921
Total Contribution after Marketing expenses continuing operations	670,504	1,021,635	2,729,890	2,490,993
Contracted services	382,096	438,004	1,094,398	1,196,852
Salary and wages	1,195,916	1,262,935	3,794,179	3,180,198
Non cash share based compensation	367,244	1,697,201	1,224,101	7,039,695
Other general and administrative	3,048,779	2,734,377	8,617,013	7,963,231
Loss from continuing operations	(4,323,531)	(5,110,882)	(11,999,801)	(16,623,983)
Total assets	11,244,046		11,244,046		$ 17,304,703
Splash Beverage Group [Member]
Revenue from External Customer [Line Items]
Total revenues net, continuing operations	1,104,878	1,147,248	4,130,817	3,980,794
Total Contribution after Marketing expenses continuing operations	(652,727)	(430,049)	(1,468,563)	(1,278,987)
Total assets	9,599,010		9,599,010		14,723,553
E Commerce [Member]
Revenue from External Customer [Line Items]
Total revenues net, continuing operations	4,039,191	3,723,159	12,030,930	9,315,127
Total Contribution after Marketing expenses continuing operations	1,323,231	$ 1,451,684	4,198,453	$ 3,769,980
Total assets	$ 1,645,036		$ 1,645,036		$ 2,581,150