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What changed in SPLASH BEVERAGE GROUP, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SPLASH BEVERAGE GROUP, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+181 added−120 removedSource: 10-K (2025-07-11) vs 10-K (2024-03-29)

Top changes in SPLASH BEVERAGE GROUP, INC.'s 2024 10-K

181 paragraphs added · 120 removed · 93 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest change(CdV) and Related Financing On December 24, 2020, the Company entered into an Asset Purchase Agreement with CdV, pursuant to which the Company purchased certain assets and assumed certain liabilities that comprise the CdV business for a total purchase price of $5,980,000, payable in the combination of $2,000,000 in cash, a $2,000,000 convertible promissory note to CdV and a variable number of shares of the Company’s common stock based on an attainment of revenue hurdles.
Biggest change(CdV) and Related Financing On December 24, 2020, the Company entered into an Asset Purchase Agreement with CdV, pursuant to which the Company purchased certain assets and assumed certain liabilities that comprise the CdV business for a total purchase price of $5,980,000, payable in the combination of $2,000,000 in cash, a $2,000,000 convertible promissory note to CdV and a variable number of shares of the Company’s common stock based on an attainment of revenue hurdles. 4 In conjunction with the acquisition, the Company also entered into a Revenue Loan and Security Agreement (the “Loan and Security Agreement”) by and among the Company, Robert Nistico, 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 rights to utilize this packaging for multiple categories were conveyed to SBG in conjunction with the distribution rights. 4 E-commerce “Qplash” is a wholly owned division of Splash. It is our first entry point into the growing e-commerce channel. The division sells beverages online through www.qplash.com , and third-party storefronts such as Amazon.com.
The rights to utilize this packaging for multiple categories were conveyed to SBG in conjunction with the distribution rights. E-commerce “Qplash” is a wholly owned division of Splash. It is our first entry point into the growing e-commerce channel. The division sells beverages online through www.qplash.com , and third-party storefronts such as Amazon.com.
The Loan and Security Agreement provided for a revenue-based credit facility of $1,578,237 (the “Gross Amount”) with the Lender (the “Credit Facility”). Copa DI Vino ® Wine Group, Inc. Copa DI Vino ® is the leading producer of premium wine by the glass in the United States.
(the “Lender”). The Loan and Security Agreement provided for a revenue-based credit facility of $1,578,237 (the “Gross Amount”) with the Lender (the “Credit Facility”). Copa DI Vino ® Wine Group, Inc. Copa DI Vino ® is the leading producer of premium wine by the glass in the United States.
Our management team has over 120 years of combined experience in the beverage industry, including decades of successful brand introductions by our management team (Gallo, Red Bull, Bacardi, Diageo, Sparkling Ice, Coca-Cola, FUZE Beverage, NOS Energy, PepsiCo, SoBe Beverages, AB InBev, Muscle Milk, Marley Beverages), we believe our ability to break through the distribution and retail bottlenecks makes us an attractive joint venture partner to many new brand owners.
Our management team has over 80 years of combined experience in the beverage industry, including decades of successful brand introductions by our management team (Gallo, Red Bull, Bacardi, Diageo, Sparkling Ice, Coca-Cola, FUZE Beverage, NOS Energy, PepsiCo, SoBe Beverages, AB InBev, Muscle Milk, Marley Beverages), we believe our ability to break through the distribution and retail bottlenecks makes us an attractive joint venture partner to many new brand owners.
For acquisition or joint venture consideration, we prefer to work with brands that already have one or more of the following in place: ● Some level of preexisting brand awareness. ● Regional presence that can be expanded. ● Licensing an existing brand name (TapouT for example). ● Add to an underdeveloped and/or growing category capitalizing on consumer trends. ● Innovation to an existing attractive category (such as flavored tequila). ● A near term clear path to profitability.
For acquisition or joint venture consideration, we prefer to work with brands that already have one or more of the following in place: ● Some level of preexisting brand awareness. ● Regional presence that can be expanded. ● Licensing an existing brand name. ● Add to an underdeveloped and/or growing category capitalizing on consumer trends. ● Innovation to an existing attractive category (such as flavored tequila). ● A near term clear path to profitability.
Manufacturing and Co-packing We are responsible for the manufacturing of Copa DI Vino ® , TapouT Performance and SALT. The Copa DI Vino ® product line is bottled at our manufacturing facility in The Dalles, Oregon. Pulpoloco is imported from Spain as a finished product.
Manufacturing and Co-packing We are responsible for the manufacturing of Copa DI Vino ® and SALT. The Copa DI Vino ® product line is bottled at our manufacturing facility in The Dalles, Oregon. Pulpoloco is imported from Spain as a finished product.
Employees We have 32 full-time employees, including non-officer employees and our executive officers. None of our employees are represented by a labor union. We have not experienced any work stoppages and consider our relations with our employees to be good.
Employees We have 21 full-time employees, including non-officer employees and our executive officers. None of our employees are represented by a labor union. We have not experienced any work stoppages and consider our relations with our employees to be good.
Our Competitive Strengths We believe the following competitive strengths contribute to the Company’s success and differentiate us from our competitors: ● An established distribution network through global sales channels; ● A hybrid distribution model that leverages multiple routes to market, including national chains, independent local markets, regional chains, and specialty food and C-Stores ● Long-term relationships with retailers and the establishment of chains; ● Premium customer service; ● Dynamic and sustainable product offerings of natural quality and freshness with health benefits; ● A highly experienced management team; ● Strategically selected, dedicated sales professionals; ● Qplash, our e-commerce platform, which provides us an integrated distribution platform for our non-alcoholic brands; ● Ability to execute and distribute across many geographies on behalf of our licensed brand portfolio; ● Strong brand awareness through partnerships and acquisitions of brands with pre-existing brand awareness, or viewed as truly innovative; and ● Celebrity and professional athlete endorsement of our brands.
During fiscal year 2024, Qplash offered over 1,500 listings and has warehouses that ship from both California and Pennsylvania. 5 Our Competitive Strengths We believe the following competitive strengths contribute to the Company’s success and differentiate us from our competitors: ● An established distribution network through global sales channels; ● A hybrid distribution model that leverages multiple routes to market, including national chains, independent local markets, regional chains, and specialty food and C-Stores ● Long-term relationships with retailers and the establishment of chains; ● Premium customer service; ● Dynamic and sustainable product offerings of natural quality and freshness with health benefits; ● A highly experienced management team; ● Strategically selected, dedicated sales professionals; ● Qplash, our e-commerce platform, which provides us an integrated distribution platform for our non-alcoholic brands; ● Ability to execute and distribute across many geographies on behalf of our licensed brand portfolio; ● Strong brand awareness through partnerships and acquisitions of brands with pre-existing brand awareness, or viewed as truly innovative; and ● Celebrity and professional athlete endorsement of our brands.
TapouT License Agreement We have the rights under a License Agreement with ABG TapouT (the “License Agreement”) to produce, market, sell and distribute TapouT sports beverages in North America (including US Territories and Military Bases), United Kingdom, Brazil, South Africa, Australia, Scandinavia, Peru, Colombia, Chile and Guatemala.
All aspects of manufacturing, logistics, distribution and marketing are our responsibility. 3 TapouT License Agreement We have the rights under a License Agreement with ABG TapouT (the “License Agreement”) to produce, market, sell and distribute TapouT sports beverages in North America (including US Territories and Military Bases), United Kingdom, Brazil, South Africa, Australia, Scandinavia, Peru, Colombia, Chile and Guatemala.
Our President & CMO, Bill Meissner, has led major beverage brands including Sparkling Ice, Fuze, Sweet Leaf Tea and Jones Soda. Our CFO, Stacy McLaughlin, has over 15 years of experience in public company accounting and finance, with an emphasis on reporting, fundraising and mergers and acquisitions.
Our President & CMO, Bill Meissner, has led major beverage brands including Sparkling Ice, Fuze, Sweet Leaf Tea and Jones Soda. Our CFO, William Devereux, has over 15 years of experience in finance, with an emphasis on investing, fundraising, corporate strategy, and mergers and acquisitions.
On July 31, 2021, we changed our name from Canfield Medical Supply, Inc. to Splash Beverage Group, Inc. On June 11, 2021, our common stock and warrants to purchase common stock began trading on the NYSE American under the symbols “SBEV” and SBEV WT,” respectively. On November 8, 2021, we changed our state of incorporation from Colorado to Nevada.
At the time of the merger Canfield’s common stock was quoted on the OTCQB. On July 31, 2021, we changed our name from Canfield Medical Supply, Inc. to Splash Beverage Group, Inc. On June 11, 2021, our common stock and warrants to purchase common stock began trading on the NYSE American under the symbols “SBEV” and SBEV WT,” respectively.
Splash executed a reverse merger with a fully reporting, public entity called Canfield Medical Supply, Inc. and became a wholly-owned subsidiary of Canfield Medical Supply Inc. on March 31, 2020. At the time of the merger Canfield’s state of incorporation was Colorado. At the time of the merger Canfield’s common stock was quoted on the OTCQB.
In Q1 2024 the relationship between TapouT LLC and the Company was terminated. Splash executed a reverse merger with a fully reporting, public entity called Canfield Medical Supply, Inc. and became a wholly-owned subsidiary of Canfield Medical Supply Inc. on March 31, 2020. At the time of the merger Canfield’s state of incorporation was Colorado.
Our principal offices are located at 1314 E. Las Olas Blvd, Suite 221, Fort Lauderdale, Florida 33301. Our website address is www.splashbeveragegroup.com .
On November 8, 2021, we changed our state of incorporation from Colorado to Nevada. Our principal offices are located at 1314 E. Las Olas Blvd, Suite 221, Fort Lauderdale, Florida 33301. Our website address is www.splashbeveragegroup.com .
Although we are responsible for manufacturing TapouT Performance and SALT, we do not directly manufacture these products, but instead outsource such manufacturing to third party bottlers and contract packers and distillers. Our TapouT Performance and SALT products are manufactured in the United States and Mexico, respectively under separate arrangements with each party.
Although we are responsible for manufacturing SALT, we do not directly manufacture these products, but instead outsource such manufacturing to third party bottlers and contract packers and distillers. SALT products are manufactured in Mexico, under separate arrangements. Our co-packaging arrangements are terminable upon request and do not obligate us to produce any minimum quantities of products within specified periods.
Products We currently produce, distribute and market SALT Naturally Flavored Tequila (“SALT”), a 100% agave 80 proof line of flavored tequilas, “TapouT Performance,” a line of performance beverages that complete in the hydration and energy categories, Copa DI Vino ® single serve wine by the glass, and also import Pulpoloco Sangria in 3 flavors.
Products During fiscal year 2024 we produced, distributed and marketed SALT Naturally Flavored Tequila (“SALT”), a 100% agave 80 proof line of flavored tequilas, Copa DI Vino ® single serve wine by the glass, and also import Pulpoloco Sangria in 3 flavors. The following is a description of these products.
Distribution For our beverage-alcohol products, we operate within what is referred to as a “Three Tier Distribution System” where manufacturers are not permitted to sell directly to retailers, but instead contract for local and regional distribution with independent distributors.
Depending on the product, the third-party bottlers or packers add filtered water and/or other ingredients (including dietary ingredients) for the manufacture and packaging of the finished products into our approved containers in accordance with our formulas. 6 Distribution For our beverage-alcohol products, we operate within what is referred to as a “Three Tier Distribution System” where manufacturers are not permitted to sell directly to retailers, but instead contract for local and regional distribution with independent distributors.
Our co-packaging arrangements are terminable upon request and do not obligate us to produce any minimum quantities of products within specified periods. 5 We purchase concentrates, flavors, dietary ingredients, cans, bottles, caps, labels, and other components and ingredients for our beverage products from our suppliers, which are delivered to our manufacturing operations and various third-party bottlers and co-packers.
We purchase concentrates, flavors, dietary ingredients, cans, bottles, caps, labels, and other components and ingredients for our beverage products from our suppliers, which are delivered to our manufacturing operations and various third-party bottlers and co-packers. In some cases, certain common supplies may be purchased by our various third-party bottlers and co-packers.
This note bears 0% interest. 6 Corporate Information Splash was originally incorporated in the State of Nevada under the name TapouT Beverages, Inc. for the purpose of acquiring the rights under a license agreement with TapouT, LLC (Authentic Brands Group) for the right to use the TapouT brand in connection with manufacturing and selling certain beverages.
Under the Acquisition Agreement, the seller agreed to deliver the Assets to the Company, or $20 million in lieu thereof (the “Alternative Consideration”), and if the seller fails to deliver the Assets or Alternative Consideration by December 31, 2025, the issuance of the Series C to the seller shall be cancelled. 8 Corporate Information Splash was originally incorporated in the State of Nevada under the name TapouT Beverages, Inc., for the purpose of acquiring the rights under a license agreement with TapouT, LLC (Authentic Brands Group) for the right to use the TapouT brand in connection with manufacturing and selling certain beverages.
Listing on the NYSE American Our common stock and warrants are listed on the NYSE American exchange under the ticker symbols “SBEV” and “SBEV WT,” respectively. Recent Developments In January 2024, the Company entered into a convertible note with an individual in the amount of $250,000.
Listing on the NYSE American Our common stock and warrants are listed on the NYSE American exchange under the ticker symbols “SBEV” and “SBEV WT,” respectively. Recent Developments On February 7, 2025, Julius Ivancsits resigned as Chief Financial Officer of the Company. Mr.
Splash has license rights to the TapouT Performance brand in North America (Including US Territories and Military Bases), United Kingdom, Brazil, South Africa, Scandinavia, Peru, Colombia, Chile and Guatemala. 1 In December 2020, Splash Beverage Group Inc. purchased the key assets of the Copa DI Vino ® single serve wine company.
In Q1 2024 the relationship between TapouT LLC and the Company was terminated. 1 In December 2020, Splash Beverage Group Inc. purchased the key assets of the Copa DI Vino ® single serve wine company.
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The following is a description of these products.
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In Q1 2024 the relationship between TapouT LLC and the Company was terminated. Copa DI Vino ® Wine Group, Inc.
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All aspects of manufacturing, logistics, distribution and marketing are our responsibility.
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Ivancsits’s resignation as Chief Financial Officer was not because of any disagreement with the Company on any matter relating to the Company’s operations, policies, or practices, including accounting principles and practices . Mr. Ivancsits effective date was February 18, 2025 and the Company thanks Mr. Ivancsits for his service. Simultaneously, on February 7, 2025, Dr.
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TapouT Performance Isotonic Sports Drinks We produce, market, sell and distribute the following sports beverages under the brand name TapouT: ● TapouT Performance ● TapouT Energy 3 TapouT Performance Beverages are a line of unique advanced performance beverages containing ingredients known for various functional benefits including, focus, cognition, energy, recuperative and cell regeneration which promotes better absorption of nutrients, increase hydration and cellular recovery.
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John Paglia also notified the Board of his intention to resign as an independent director of the Company and as a member of each committee of the Board on which he served, effective as of March 7, 2025. Dr.
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They are exclusively formulated with GRAS (FDA Designation “Generally Regarded as Safe”) ingredients versus controversial ingredients often used in many competitive products. TapouT Performance Beverages are all natural with highly innovative proprietary blends designed to enhance physical and or mental performance.
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Paglia’s resignation was not the result of any dispute or disagreement with the Company or the Company’s Board of Directors on any matter relating to the operations, policies or practices of the Company. Dr. Paglia will be assisting the Company with its search for a new Audit Chair.
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TapouT, formally associated with the UFC and mixed martial arts has been producing branded clothing and light exercise equipment for over 23 years and has a high level of aided and unaided brand awareness.
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The Company is grateful for his service and his assistance in the search for his replacement. On March 20, 2025, the Board of Directors of the Company appointed Mr. William Devereux to serve as Chief Financial Officer of the Company, effective as of the same date. Simultaneously, the Board of Directors of the Company appointed Mr.
Removed
In conjunction with the acquisition, the Company also entered into a Revenue Loan and Security Agreement (the “Loan and Security Agreement”) by and among the Company, Robert Nistico, 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”).
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Thomas Fore to serve as a Director of the Company, effective March 20, 2025. 7 Effective March 27, 2025, the Board of Directors of the Company approved a reverse stock split of the Company’s authorized and issued and outstanding shares of Common Stock at a ratio of 1-for-40 (the “Reverse Stock Split”).
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Currently Qplash offers over 1,500 listings and has warehouses that ship from both California and Pennsylvania.
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The Company filed a Certificate of Change pursuant to Nevada Revised Statutes Section 78.209 with the Secretary of State of the State of Nevada on March 26, 2025, to be effective March 27, 2025.
Removed
In some cases, certain common supplies may be purchased by our various third-party bottlers and co-packers. Depending on the product, the third-party bottlers or packers add filtered water and/or other ingredients (including dietary ingredients) for the manufacture and packaging of the finished products into our approved containers in accordance with our formulas.
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On April 7, 2025, NYSE American LLC (“NYSE American”) publicly announced and provided a notice to the Company that NYSE Regulation has determined to commence proceedings to delist the Company’s Common Stock and publicly trading Warrants to purchase one share of Common Stock, from NYSE American.
Removed
The note has an eighteen-month term, accrues interest at 12% and is convertible into shares of common stock of the Company at $0.50 per share, which also includes 200% warrants at $0.25 In January 2024, the Company entered into a commercial loan in the amount of $500,000.
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NYSE Regulation has determined that the Company is no longer suitable for listing pursuant to Section 1009(a) of the NYSE American Company Guide (the “Company Guide”) as the Company was unable to demonstrate that it had regained compliance with Sections 1003(a)(i), (ii), and (iii) of the Company Guide by the end of the maximum 18-month compliance plan period, which expired on April 6, 2025.
Removed
The total cost of the loan is $250,000 and is paid in weekly increments of 6.97% of the current receivable balance. In February 2024, the Company entered into a convertible note with an individual in the amount of $150,000.
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On April 16, 2025, the Company, received an official notice of noncompliance (the “NYSE American Notice”) from NYSE Regulation stating that the Company is not in compliance with NYSE American continued listing standards (the “Filing Delinquency Notification”) due to the failure to timely file the Company’s Form 10-K for the year ended December 31, 2024 (the “Delinquent Report”) by the filing due date of April 15, 2025 (the “Filing Delinquency”).
Removed
The note has an eighteen-month term, accrues interest at 12% and is convertible into shares of common stock of the Company at $0.40 per share, which also includes 250% warrants at $0.25. In March 2024, the Company received a $109,000 cash advance from our chief executive officer, resulting in a related party payable.
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On June 9, 2025, the Company filed a Certificate of Designation (the “Certificate of Designation” and, collectively with the Subscription Agreement, the “Issuance Documents”) classifying and designating the Series A Preferred Shares with the Secretary of State of Nevada, which Certificate of Designation became effective on June 9, 2025.
Added
On June 10, 2025, the Company entered into a Subscription and Investment Representation Agreement (the “Subscription Agreement”) with Robert Nistico, the Company’s Chief Executive Officer (the “Purchaser”), pursuant to which the Company agreed to issue and sell one thousand (1,000) Series A Preferred Shares, par value $0.001 per share (the “Series A Preferred Shares”), to the Purchaser for an aggregate purchase price of $1,000 (the “Purchase Price”).
Added
The sale closed on June 10, 2025. Effective June 25, 2025, Splash Beverage Group, Inc.
Added
(the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with accredited investors pursuant to which the Company sold and issued a total of 650 shares of newly designated Series A-1 Convertible Redeemable Preferred Stock (the “Series A-1”), together with one-year Class A Warrants to purchase a total of 162,500 shares of common stock (the “A Warrants”) and five-year Class B Warrants to purchase a total of 162,500 shares of common stock (the “B Warrants” and together with the A Warrants, the “Warrants”) for total gross proceeds of $650,000.
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The Company intends to use the proceeds for working capital and general corporate purposes.
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Effective June 25, 2025, the Company entered into Securities Exchange Letter Agreements (the “Exchange Agreements”) with certain holders of promissory notes issued by the Company pursuant to which such holders agreed to exchange a total of $12,671,434 of outstanding balance of such notes in exchange for a total of 126,710 shares of the Company’s newly designated Series B Convertible Redeemable Preferred Stock (the “Series B”).
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The Company is engaging in the transactions contemplated by the Exchange Agreement in order to exchange debt for equity in an effort to regain compliance with the shareholder equity requirements of the NYSE American. This debt exchange is one key step in meeting the NYSE American continued listing requirements.
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The other key step is filing its tardy Form 10-K for the year ended December 31, 2024 and Form 10-Q for the three months ended March 31 2025.
Added
On June 26, 2025, the Company entered into an Asset Purchase Agreement (the “Acquisition Agreement”) with Utopia Holdings Inc. as seller pursuant to which the Company agreed to purchase exclusive water rights and related assets to an underground network of aquifers located in Costa Rica (the “Assets”) in exchange for 20,000 shares of a newly designated Series C Convertible Preferred Stock (the “Series C”).
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On June 26, 2025, the Company issued such shares of Series C to the seller.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe may not have the necessary financial resources to update and maintain our IT infrastructure, and any failure or interruption of our IT system could adversely impact our operations. In addition, our IT is vulnerable to cyberattacks, computer viruses, worms and other malicious software programs, physical and electronic break-ins, sabotage and similar disruptions from unauthorized tampering with our computer systems.
Biggest changeIn addition, our IT is vulnerable to cyberattacks, computer viruses, worms and other malicious software programs, physical and electronic break-ins, sabotage and similar disruptions from unauthorized tampering with our computer systems. We believe that we have adopted appropriate measures to mitigate potential risks to our technology infrastructure and our operations from these IT-related and other potential disruptions.
These risks include: ● Unfavorable economic conditions and related low consumer confidence, high unemployment, weak credit or capital markets, sovereign debt defaults, sequestrations, austerity measures, higher interest rates, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations; ● Changes in laws, regulations, or policies – especially those that affect the production, importation, marketing, sale, or consumption of our beverage alcohol products; 17 ● Tax rate changes (including excise, sales, tariffs, duties, corporate, individual income, dividends, capital gains), or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur; ● Dependence upon the continued growth of brand names; ● Changes in consumer preferences, consumption, or purchase patterns – particularly away from tequila, and our ability to anticipate and react to them; bar, restaurant, travel, or other on-premise declines; ● Unfavorable consumer reaction to our products, package changes, product reformulations, or other product innovation; ● Decline in the social acceptability of beverage alcohol products in our markets; ● Production facility or supply chain disruption; ● Imprecision in supply/demand forecasting; ● Higher costs, lower quality, or unavailability of energy, input materials, labor, or finished goods; ● Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in higher implementation related or fixed costs; ● Inventory fluctuations in our products by distributors, wholesalers, or retailers; Competitors’ consolidation or other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets; ● Insufficient protection of our intellectual property rights; ● Product recalls or other product liability claims; product counterfeiting, tampering, or product quality issues; ● Significant legal disputes and proceedings; government investigations (particularly of industry or company business, trade or marketing practices); ● Failure or breach of key information technology systems; ● Negative publicity related to our company, brands, marketing, personnel, operations, business performance or prospects; and ● Business disruption, decline, or costs related to organizational changes, reductions in workforce, or other cost-cutting measures, or our failure to attract or retain key executive or employee talent.
These risks include: ● Unfavorable economic conditions and related low consumer confidence, high unemployment, weak credit or capital markets, sovereign debt defaults, sequestrations, austerity measures, higher interest rates, political instability, higher inflation, deflation, lower returns on pension assets, or lower discount rates for pension obligations; ● Changes in laws, regulations, or policies - especially those that affect the production, importation, marketing, sale, or consumption of our beverage alcohol products; ● Tax rate changes (including excise, sales, tariffs, duties, corporate, individual income, dividends, capital gains), or changes in related reserves, changes in tax rules or accounting standards, and the unpredictability and suddenness with which they can occur; ● Dependence upon the continued growth of brand names; ● Changes in consumer preferences, consumption, or purchase patterns - particularly away from tequila, and our ability to anticipate and react to them; bar, restaurant, travel, or other on-premise declines; 21 ● Unfavorable consumer reaction to our products, package changes, product reformulations, or other product innovation; ● Decline in the social acceptability of beverage alcohol products in our markets; ● Production facility or supply chain disruption; ● Imprecision in supply/demand forecasting; ● Higher costs, lower quality, or unavailability of energy, input materials, labor, or finished goods; ● Route-to-consumer changes that affect the timing of our sales, temporarily disrupt the marketing or sale of our products, or result in higher implementation related or fixed costs; ● Inventory fluctuations in our products by distributors, wholesalers, or retailers; Competitors’ consolidation or other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets; ● Insufficient protection of our intellectual property rights; ● Product recalls or other product liability claims; product counterfeiting, tampering, or product quality issues; ● Significant legal disputes and proceedings; government investigations (particularly of industry or company business, trade or marketing practices; ● Failure or breach of key information technology systems; ● Negative publicity related to our company, brands, marketing, personnel, operations, business performance or prospects; and ● Business disruption, decline, or costs related to organizational changes, reductions in workforce, or other cost-cutting measures, or our failure to attract or retain key executive or employee talent.
If our supply of these raw materials is impaired or if prices increase significantly, it could affect the affordability of our products and reduce sales. If we are unable to secure sufficient ingredients or raw materials including glass, sugar, and other key supplies, we might not be able to satisfy demand on a short-term basis.
If our supply of these raw materials is impaired or if prices increase significantly, it could affect the affordability of our products and reduce sales. 11 If we are unable to secure sufficient ingredients or raw materials including glass, sugar, and other key supplies, we might not be able to satisfy demand on a short-term basis.
Additionally, our larger distributors and national partners may make orders that are larger than we have historically been required to fill. Shortages in inventory levels, supply of raw materials or other key supplies could negatively affect us. If we do not adequately manage our inventory levels, our operating results could be adversely affected.
Additionally, our larger distributors and national partners may make orders that are larger than we have historically been required to fill. Shortages in inventory levels, supply of raw materials or other key supplies could negatively affect us. 14 If we do not adequately manage our inventory levels, our operating results could be adversely affected.
Competition, particularly from companies with greater financial and marketing resources than ours, could have a material adverse effect on our existing markets, as well as on our ability to expand the market for our products. Legislative or regulatory changes that affect our products, including new taxes, could reduce demand for products or increase our costs.
Competition, particularly from companies with greater financial and marketing resources than ours, could have a material adverse effect on our existing markets, as well as on our ability to expand the market for our products. 13 Legislative or regulatory changes that affect our products, including new taxes, could reduce demand for products or increase our costs.
Additionally, due to increasing public concern over alcohol-related societal problems, including driving while intoxicated, underage drinking, alcoholism and health consequences from the abuse of alcohol, various levels of government may seek to impose additional restrictions or limits on advertising or other marketing activities promoting beverage alcohol products.
Additionally, due to increasing public concern over alcohol-related societal problems, 20 including driving while intoxicated, underage drinking, alcoholism and health consequences from the abuse of alcohol, various levels of government may seek to impose additional restrictions or limits on advertising or other marketing activities promoting beverage alcohol products.
Furthermore, such third-parties’ financial position or market share may deteriorate, which could adversely affect our distribution, marketing and sales activities. 10 Our ability to maintain and expand our distribution network and attract additional distributors, retailers and brokers will depend on a number of factors, some of which are outside our control.
Furthermore, such third-parties’ financial position or market share may deteriorate, which could adversely affect our distribution, marketing and sales activities. Our ability to maintain and expand our distribution network and attract additional distributors, retailers and brokers will depend on a number of factors, some of which are outside our control.
If we cannot continue as a going concern, our shareholders would likely lose most or all of their investment in us. Management recognizes that it may be required to obtain additional resources via issuances of indebtedness or equity to successfully execute its business plans.
If we cannot continue as a going concern, our shareholders would likely lose most or all of their investment in us. 9 Management recognizes that it may be required to obtain additional resources via issuances of indebtedness or equity to successfully execute its business plans.
If we are unable to improve our liquidity position, we may not be able to continue as a going concern. We have sustained recurring losses and we have had working capital and stockholders’ equity deficits. These prior losses and expected future losses have had, 7 and will continue to have, an adverse effect on our financial condition.
If we are unable to improve our liquidity position, we may not be able to continue as a going concern. We have sustained recurring losses and we have had working capital and stockholders’ equity deficits. These prior losses and expected future losses have had, and will continue to have, an adverse effect on our financial condition.
Failure to take adequate steps to protect against or mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results of operations. We rely upon our ongoing relationships with our key flavor suppliers.
Failure to take adequate steps to protect against or mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results of operations. 15 We rely upon our ongoing relationships with our key flavor suppliers.
If we are unable to effectively manage our third-party relationships, or for any reason our third-party service providers or business partners fail to satisfactorily fulfill their commitments and responsibilities, our financial results could suffer. Our results of operations may fluctuate from quarter to quarter for many reasons, including seasonality.
If we are unable to effectively manage our third-party relationships, or for any reason our third-party service providers or business partners fail to satisfactorily fulfill their commitments and responsibilities, our financial results could suffer. 19 Our results of operations may fluctuate from quarter to quarter for many reasons, including seasonality.
Our ability to increase sales will depend primarily on success in expanding our current markets, improving our distribution base, entering into Direct-To-Retail (DTR) arrangements with national accounts, 8 and introducing new brands, products or product extensions to the market.
Our ability to increase sales will depend primarily on success in expanding our current markets, improving our distribution base, entering into Direct-To-Retail (DTR) arrangements with national accounts, and introducing new brands, products or product extensions to the market.
In addition, our agreements with our contract manufacturers are terminable at any time, and any such termination could disrupt our ability to deliver products to our customers. 11 The volatility of energy and increased regulations may have an adverse impact on our gross margin.
In addition, our agreements with our contract manufacturers are terminable at any time, and any such termination could disrupt our ability to deliver products to our customers. The volatility of energy and increased regulations may have an adverse impact on our gross margin.
Failure to protect our intellectual property could harm our brand and our reputation, and adversely affect our ability to compete effectively. Further, enforcing or defending our intellectual property rights, including our trademarks, 12 copyrights, licenses and trade secrets, could result in the expenditure of significant financial and managerial resources.
Failure to protect our intellectual property could harm our brand and our reputation, and adversely affect our ability to compete effectively. Further, enforcing or defending our intellectual property rights, including our trademarks, copyrights, licenses and trade secrets, could result in the expenditure of significant financial and managerial resources.
Rose, Snyder & Jacobs LLP, our independent registered public accounting firm for the fiscal year ended December 31, 2023, has included an explanatory paragraph in their opinion that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2023, indicating that our current liquidity position raises substantial doubt about our ability to continue as a going concern.
Rose, Snyder & Jacobs LLP, our independent registered public accounting firm for the fiscal year ended December 31, 2024, has included an explanatory paragraph in their opinion that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2024, indicating that our current liquidity position raises substantial doubt about our ability to continue as a going concern.
It is hard to predict what will happen in the fuel markets in 2024 and beyond. Due to the price sensitivity of our products, we may not always be able to pass such increases on to our customers.
It is hard to predict what will happen in the fuel markets in 2025 and beyond. Due to the price sensitivity of our products, we may not always be able to pass such increases on to our customers.
We do not manufacture SALT Tequila, Pulpoloco Sangria or TapouT performance drinks but instead outsource the manufacturing process to third-party bottlers and independent contract manufacturers (co-packers). We do not own the plants or the majority of the equipment required to manufacture and package these brands.
We do not manufacture SALT Tequila, Pulpoloco Sangria but instead outsource the manufacturing process to third-party bottlers and independent contract manufacturers (co-packers). We do not own the plants or the majority of the equipment required to manufacture and package these brands.
Damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics such as influenza COVID-19, labor strikes or other reasons, could impair the manufacture, distribution and sale of our products. Many of these events are outside of our control.
Damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics, labor strikes or other reasons, could impair the manufacture, distribution and sale of our products. Many of these events are outside of our control.
As the demand for water continues to increase around the world, and as water becomes scarcer and the quality of available water deteriorates, we may incur higher costs or face capacity constraints and the possibility of reputational damage, which could adversely affect our profitability or net operating revenues in the long run. 14 Fluctuations in quantity and quality of grape supply could adversely affect our business.
As the demand for water continues to increase around the world, and as water becomes scarcer and the quality of available water deteriorates, we may incur higher costs or face capacity constraints and the possibility of reputational damage, which could adversely affect our profitability or net operating revenues in the long run.
If a component found in one of our products is added to the list, or if the increasing sensitivity of detection methodology that may become available under this law and related regulations as they currently exist, or as they may be amended, results in the detection of an infinitesimal quantity of a listed substance in one of our beverages produced for sale in California, the resulting warning requirements or adverse publicity could affect our sales. 13 Litigation or legal could expose us to significant liabilities and damage our reputation.
If a component found in one of our products is added to the list, or if the increasing sensitivity of detection methodology that may become available under this law and related regulations as they currently exist, or as they may be amended, results in the detection of an infinitesimal quantity of a listed substance in one of our beverages produced for sale in California, the resulting warning requirements or adverse publicity could affect our sales.
Because certain principal stockholders own a large percentage of our voting stock, other stockholders’ voting power may be limited. As of December 31, 2023, our ten (10) largest shareholders own or controlled approximately 21.2% of our outstanding common stock.
Because certain principal stockholders own a large percentage of our voting stock, other stockholders’ voting power may be limited. As of December 31, 2024, our ten (10) largest shareholders own or controlled approximately 57% of our outstanding common stock .
We incurred a net loss of $21.0 million for the year ended December 31, 2 023 . Our accumulated deficit increased to $133.3 million as of December 31, 2 023 , compared to the prior year’s deficit of $112.3 million. We may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our financial condition.
We incurred a net loss of $23.8 million for the year ended December 31, 2 024 . Our accumulated deficit increased to $ 155.8 million as of December 31, 2 024 , compared to the prior year’s deficit of $133.3 million. We may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our financial condition.
If the NYSE American were to delist our securities from trading, we could face significant consequences, including, but not limited to, the follo wing: ● a limited availability for market quotations for our securities; ● reduced liquidity with respect to our securities; ● a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future. 20 Our common stock could be further diluted as the result of the issuance of additional common stock, convertible securities, warrants or options.
If the NYSE American were to delist our securities from trading, we could face significant consequences, including, but not limited to, the following: 25 ● a limited availability for market quotations for our securities; ● reduced liquidity with respect to our securities; ● a determination that our common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our common stock; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
This could have an adverse effect on the price of our common stock. Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need in the future, may also be materially and adversely affected if our common stock is not traded on a national securities exchange.
Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need in the future, may also be materially and adversely affected if our common stock is not traded on a national securities exchange.
As a result, our other stockholders may have little or no influence over matters submitted for shareholder approval. In addition, the ownership of such stockholders could preclude any unsolicited acquisition of us, and consequently, adversely affect the price of our common stock.
As a result, our other stockholders may have little or no influence over matters submitted for shareholder approval. In addition, the ownership of such stockholders could preclude any unsolicited acquisition of us, and consequently, adversely affect the price of our common stock. These stockholders may make decisions that are adverse to your interests.
Our ability to successfully enter new distribution areas and obtain national accounts will, in turn, depend on various factors, many of which are beyond our control, including, but not limited to, the continued demand for our brands and products in target markets, the ability to price our products at competitive levels, available positions within the retailer’s planograms, the ability to establish and maintain relationships with distributors in each geographic area of distribution and the ability in the future to create, develop and successfully introduce one or more new brands, products, and product extensions.
Our ability to successfully enter new distribution areas and obtain national accounts will, in turn, depend on various factors, many of which are beyond our control, including, but not limited to, the continued demand for our brands and products in target markets, the ability to price our products at competitive levels, available positions within the retailer’s planograms, the ability to establish and maintain relationships with distributors in each geographic area of distribution and the ability in the future to create, develop and successfully introduce one or more new brands, products, and product extensions. 10 Our strategic initiatives including acquisitions and divestitures may not be successful and may divert our management’s attention away from operations and could create general customer uncertainty.
Unauthorized access or improper disclosure of personal data in violation of personal data protection or privacy laws could harm our reputation, cause loss of consumer confidence, subject us to regulatory enforcement actions (including fines), and result in private litigation against us, which could result in loss of revenue, increased costs, liability for monetary damages, fines and/or criminal prosecution, all of which could negatively affect our business and operating results. 15 If our third-party service providers and business partners do not satisfactorily fulfill their commitments and responsibilities, our financial results could suffer.
Unauthorized access or improper disclosure of personal data in violation of personal data protection or privacy laws could harm our reputation, cause loss of consumer confidence, subject us to regulatory enforcement actions (including fines), and result in private litigation against us, which could result in loss of revenue, increased costs, liability for monetary damages, fines and/or criminal prosecution, all of which could negatively affect our business and operating results.
Based on these assessments and estimates, we establish reserves and disclose the relevant litigation claims or legal proceedings, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from those envisioned by our current assessments and estimates.
These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially from those envisioned by our current assessments and estimates.
The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market or the perception that these sales may occur.
Future sales of common stock, or the perception of such future sales, by some of our existing stockholders could cause our stock price to decline. The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market or the perception that these sales may occur.
Risks Related to Our Securities An investment in our common stock is speculative and there can be no assurance of any return on any such investment. An investment in our common stock is speculative and there is no assurance that investors will obtain any return on their investment.
An investment in our common stock is speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment.
In addition, negative public relations and product quality issues, whether real or imagined, could tarnish our reputation and image of the affected brands and could cause consumers to choose other products.
We cannot predict whether our advertising, marketing and promotional programs will have the desired impact on our products’ branding and on consumer preferences. In addition, negative public relations and product quality issues, whether real or imagined, could tarnish our reputation and image of the affected brands and could cause consumers to choose other products.
Global economic uncertainties, including foreign currency exchange rates, affect businesses such as ours in a number of ways, making it difficult to accurately forecast and plan our future business activities.
Global economic uncertainties, including foreign currency exchange rates, affect businesses such as ours in a number of ways, making it difficult to accurately forecast and plan our future business activities. There can be no assurance that economic improvements will occur, or that they would be sustainable, or that they would enhance conditions in markets relevant to us.
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.
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 our common stock.
Any such claim or litigation could be costly. In addition, any event that would jeopardize our proprietary rights or any claims of infringement by third parties could have a material adverse effect on our ability to market or sell our brands, profitably exploit our products or recoup our associated research and development costs.
In addition, any event that would jeopardize our proprietary rights or any claims of infringement by third parties could have a material adverse effect on our ability to market or sell our brands, profitably exploit our products or recoup our associated research and development costs. 16 As part of the licensing strategy of our brands, we enter into licensing agreements under which we grant our licensing partners certain rights to use our trademarks and other designs.
Our current and future expense levels are based largely on our investment plans and estimates of future revenue. As a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfall, which could then force us to curtail or cease our business operations.
As a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfall, which could then force us to curtail or cease our business operations. 22 Risks Related to Our Securities An investment in our common stock is speculative and there can be no assurance of any return on any such investment.
However, the insurance may not be adequate or may not continue to be available at a price or on terms that are satisfactory to us and this insurance may not be adequate to cover any resulting liability.
However, the insurance may not be adequate or may not continue to be available at a price or on terms that are satisfactory to us and this insurance may not be adequate to cover any resulting liability. 18 Our business and operations would be adversely impacted in the event of a failure or interruption of our information technology infrastructure or as a result of a cybersecurity attack.
We may become party to litigation claims and legal proceedings. Litigation involves significant risks, uncertainties and costs, including distraction of management attention away from our business operations. We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses.
Litigation or legal could expose us to significant liabilities and damage our reputation. We may become party to litigation claims and legal proceedings. Litigation involves significant risks, uncertainties and costs, including distraction of management attention away from our business operations.
These stockholders may make decisions that are adverse to your interests. 19 We do not expect to pay dividends and investors should not buy our Common Stock expecting to receive dividends. We do not anticipate that we will declare or pay any dividends in the foreseeable future.
We do not expect to pay dividends and investors should not buy our Common Stock expecting to receive dividends. We do not anticipate that we will declare or pay any dividends in the foreseeable future. Consequently, you will only realize an economic gain on your investment in our common stock if the price appreciates.
We have a limited operating history, and our historical financial and operating information is of limited value in predicting our future operating results. We may not accurately forecast customer behavior and recognize or respond to emerging trends, changing preferences or competitive factors facing us, and, therefore, we may fail to make accurate financial forecasts.
We may not accurately forecast customer behavior and recognize or respond to emerging trends, changing preferences or competitive factors facing us, and, therefore, we may fail to make accurate financial forecasts. Our current and future expense levels are based largely on our investment plans and estimates of future revenue.
In turn, this could cause us to lose credibility in the marketplace and damage our relationships with our customers and consumers, ultimately leading to a decline in our business and results of operations. 16 Regulatory decisions and changes in the legal, regulatory and tax environment where our tequila is produced and where we operate could limit our business activities or increase our operating costs and reduce our margins.
In turn, this could cause us to lose credibility in the marketplace and damage our relationships with our customers and consumers, ultimately leading to a decline in our business and results of operations.
Additionally, there has been public attention directed at the beverage alcohol industry, which we believe is due to concern over problems related to harmful use of alcohol, including drinking and driving, underage drinking and health consequences from the misuse of alcohol.
Improper conduct by our employees or agents could damage our reputation or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as disgorgement of profits. 17 Additionally, there has been public attention directed at the beverage alcohol industry, which we believe is due to concern over problems related to harmful use of alcohol, including drinking and driving, underage drinking and health consequences from the misuse of alcohol.
Any failure of our brand to maintain or increase acceptance or market penetration would likely have a material adverse effect on our revenues and financial results. 9 Our brands and brand images are keys to our business and any inability to maintain a positive brand image could have a material adverse effect on our results of operations.
Our brands and brand images are keys to our business and any inability to maintain a positive brand image could have a material adverse effect on our results of operations. Our success depends on our ability to maintain brand image for our existing products and effectively build up brand image for new products and brand extensions.
In addition, our business depends on acceptance by our independent distributors and retailers of our brands as beverage brands that have the potential to provide incremental sales growth. If we are not successful in the revitalization and growth of our brand and product offerings, we may not achieve and maintain satisfactory levels of acceptance by independent distributors and retail consumers.
If we are not successful in the revitalization and growth of our brand and product offerings, we may not achieve and maintain satisfactory levels of acceptance by independent distributors and retail consumers. Any failure of our brand to maintain or increase acceptance or market penetration would likely have a material adverse effect on our revenues and financial results.
Our business and operations would be adversely impacted in the event of a failure or interruption of our information technology infrastructure or as a result of a cybersecurity attack. The proper functioning of our own information technology (IT) infrastructure is critical to the efficient operation and management of our business.
The proper functioning of our own information technology (IT) infrastructure is critical to the efficient operation and management of our business. We may not have the necessary financial resources to update and maintain our IT infrastructure, and any failure or interruption of our IT system could adversely impact our operations.
Changes in government regulation or failure to comply with existing regulations could adversely affect our business, financial condition and results of operations. Our business and properties are subject to various federal, state and local laws and regulations, including those governing the production, packaging, quality, labeling and distribution of beverage products.
Our business and properties are subject to various federal, state and local laws and regulations, including those governing the production, packaging, quality, labeling and distribution of beverage products. In addition, various governmental agencies have enacted or are considering additional taxes on soft drinks and other sweetened beverages.
There can be no assurances that our common stock will not be subject to potential delisting if we do not continue to maintain the listing requirements of the NYSE American. Since June 11, 2021, our common stock has been listed on the NYSE American, under the symbol “SBEV”.
Therefore, our failure to pay dividends may cause you to not see any return on your investment even if we are successful in our business operations. 24 There can be no assurances that our common stock will not be subject to potential delisting if we do not continue to maintain the listing requirements of the NYSE American.
We compete in an industry that is brand-conscious, so brand name recognition and acceptance of our products are critical to our success. Our business is dependent upon awareness and market acceptance of our products and brands by our target markets.
Changes in existing laws or regulations could require material expenses and negatively affect our financial results through lower sales or higher costs. We compete in an industry that is brand-conscious, so brand name recognition and acceptance of our products are critical to our success.
There can be no assurance that economic improvements will occur, or that they would be sustainable, or that they would enhance conditions in markets relevant to us. 18 Our limited operating history makes it difficult to forecast our future results, making any investment in us highly speculative.
Our limited operating history makes it difficult to forecast our future results, making any investment in us highly speculative. We have a limited operating history, and our historical financial and operating information is of limited value in predicting our future operating results.
Removed
In addition, various governmental agencies have enacted or are considering additional taxes on soft drinks and other sweetened beverages. Changes in existing laws or regulations could require material expenses and negatively affect our financial results through lower sales or higher costs.
Added
Material weaknesses in our internal control over financial reporting may cause us to fail to timely and accurately report our financial results or result in a material misstatement of our consolidated financial statements. A significant deficiency and material weakness exists over our financial reporting.
Removed
Our success depends on our ability to maintain brand image for our existing products and effectively build up brand image for new products and brand extensions. We cannot predict whether our advertising, marketing and promotional programs will have the desired impact on our products’ branding and on consumer preferences.
Added
We continue to implement and evaluate the effectiveness of additional policies and procedures to address identified control deficiencies in the design and operation of our internal control over financial reporting, as further described in Item 9A of this Annual Report (“Controls and Procedures”).
Removed
As part of the licensing strategy of our brands, we enter into licensing agreements under which we grant our licensing partners certain rights to use our trademarks and other designs.
Added
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis.
Removed
We may be required in the future to record a significant charge to earnings if our goodwill or intangible assets become impaired. Under United States Generally Accepted Accounting Principles (“U.S. GAAP”), we are required to review our intangible assets for impairment at least annually or when events or changes in circumstances indicate the carrying value may not be recoverable.
Added
Management identified a material weakness in the Company’s internal controls related to dedicated services billing and revenue recognition, and has taken actions in 2025 to have the material weakness remediated.
Removed
Factors that may be considered a change in circumstances indicating that the carrying value of our intangible assets may not be recoverable include, declining or slower than anticipated growth rates for certain of our existing products, a decline in stock price and market capitalization, and slower growth rates in our industry.
Added
To note, the significant deficiency and material weakness over our financial reporting or the discovery of additional significant deficiencies or a material weakness and their possible effect on our results, could have material and adverse effect on our stock price.
Removed
We may be required in the future to record a significant charge to earnings during the period in which we determine that our intangible assets have been impaired. Any such charge would adversely impact our results of operations. As of December 31, 2023, our intangible assets totaled approximately $4.71 million.
Added
Our growth strategy is based in part on growth through strategic initiatives including both acquisitions and divestitures, which poses a number of risks.
Removed
Improper conduct by our employees or agents could damage our reputation or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as disgorgement of profits.
Added
We may not be successful in identifying appropriate acquisition candidates, achieving targeted values as part of a disposition, consummating an acquisition or divestiture on satisfactory terms, integrating any newly acquired or expanded business with our current operations, or separating a divested business or commingled operation effectively.
Removed
We believe that we have adopted appropriate measures to mitigate potential risks to our technology infrastructure and our operations from these IT-related and other potential disruptions.
Added
We may issue additional equity, incur long-term or short-term indebtedness, spend cash or use a combination of these for all or part of the consideration paid in future acquisitions or expansion of our operations, which may not be available to us on terms we find advantageous or acceptable, if at all.
Removed
Investors will be subject to substantial risks involved in an investment in the Company, including the risk of losing their entire investment. Future sales of common stock, or the perception of such future sales, by some of our existing stockholders could cause our stock price to decline.
Added
In addition, subject to any requirements in the agreements governing our outstanding indebtedness, we may have significant discretion in how we employ the consideration received in a divestiture and our management may not apply such consideration in a way that is ultimately accretive to our business.
Removed
Consequently, you will only realize an economic gain on your investment in our common stock if the price appreciates. You should not purchase our common stock expecting to receive cash dividends. Therefore, our failure to pay dividends may cause you to not see any return on your investment even if we are successful in our business operations.
Added
The execution of our strategic initiatives could entail repositioning or similar actions that in turn require us to record impairments, restructuring and other charges. Any such charges would reduce our earnings. We cannot guarantee that any future business acquisitions or divestitures will be pursued or that any acquisitions or divestitures that are pursued will be consummated.
Added
Additionally, any acquisition or disposition (including the successful integration and separation of operations, products and personnel) may place a significant burden on our management and other internal resources. The diversion of management’s attention, and any difficulties encountered in such a process, could harm our business, financial condition, and operating results.
Added
Moreover, our customers may, in response to the announcement or consummation of a transaction, delay or defer purchasing decisions. If our customers delay or defer purchasing decisions, our revenues could materially decline or any anticipated increases in revenue could be lower than expected.
Added
Failure to Successfully Integrate Acquired Businesses, Its Products and Other Assets into the Company, or If Integrated, Failure to Further the Company’s Business Strategy, May Result in the Company’s Inability to Realize Any Benefit from Such Acquisition.
Added
The consummation and integration of any acquired business, product or other assets into the Company may be complex and time-consuming and, if such businesses and assets are not successfully integrated, the Company may not achieve the anticipated benefits, cost-savings or growth opportunities.
Added
Furthermore, these acquisitions and other arrangements, even if successfully integrated, may fail to further the Company’s business strategy as anticipated, expose the Company to increased competition or other challenges with respect to the Company’s products or geographic markets, and expose the Company to additional liabilities associated with an acquired business, technology or other asset or arrangement.
Added
When the Company acquires cannabis businesses, it may obtain the rights to applications for licenses as well as licenses; however, the procurement of such applications for licenses and licenses generally will be subject to governmental and regulatory approval.
Added
There are no guarantees that the Company will successfully consummate such acquisitions, and even if the Company consummates such acquisitions, the procurement of applications for licenses may never result in the grant of a license by any state or local governmental or regulatory agency and the transfer of any rights to licenses may never be approved by the applicable state and/or local governmental or regulatory agency.
Added
International trade disputes, including U.S. trade tariffs and retaliatory tariffs, could adversely impact our business. International trade disputes, including threatened or implemented tariffs by the United States and threatened or implemented tariffs by foreign countries in retaliation, could adversely impact our business.
Added
Many of our tenants sell imported goods and tariffs or other trade restrictions could increase costs for these tenants. To the extent our tenants are unable to pass these costs on to their customers, our tenants could be adversely impacted.
Added
In addition, international trade disputes, including those related to tariffs, could result in inflationary pressures that directly impact our costs, such as costs for steel, lumber and other materials applicable to our redevelopment projects.
Added
Trade disputes could also adversely impact global supply chains which could further increase costs for us and our tenants or delay delivery of key inventories and supplies. Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations.
Added
Significant political, trade, or regulatory developments in the jurisdictions in which we sell our products, such as those stemming from the change in U.S. federal administration, are difficult to predict and may have a material adverse effect on us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function. The board of directors’ audit committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats.
Biggest changeWe have not encountered cybersecurity challenges that have materially impaired our operations or financial standing. 26 Governance Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function. The board of directors’ audit committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats.
This executive team is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. 21 Our cybersecurity incident response and vulnerability management policies are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our Chief Executive Officer, and Chief Financial Officer.
This executive team is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. Our cybersecurity incident response and vulnerability management policies are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our Chief Executive Officer, and Chief Financial Officer.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings. We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial conditions. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time. Item 4. Mine Safety Disclosures. Not applicable.
Biggest changeItem 3. Legal Proceedings. We are not currently a party to any pending legal proceedings that we believe will have a material adverse effect on our business or financial conditions. We may, however, be subject to various claims and legal actions arising in the ordinary course of business from time to time.
Added
The licensing agreement between TapouT LLC and the Company has been terminated. The parties are engaged in active and constructive settlement discussions pursuant to the terms of the agreement’s termination provisions. The Company anticipates that any final settlement will not exceed the amounts already recorded in its legal reserve and accrued accounts payable. Item 4. Mine Safety Disclosures.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−5 removed1 unchanged
Biggest changeAs of March 29, 2024, at our transfer agent owners totaled approximately 273 holders of record of our Common Stock. Dividends We have not declared any cash dividends on our common stock since inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business operations.
Biggest changeAs of June 30, 2025, at our transfer agent owners totaled approximately 281 holders of record of our Common Stock. Dividends We have not declared any cash dividends on our common stock since inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings for use in our business operations.
Equity Compensation Plan Information The information required by this item with respect to securities authorized for issuance under equity compensation plans is set forth in Part III, Item 12 of this Annual Report on Form 10-K, and is incorporated herein by reference. 22 Purchases of Equity Securities by the Issuer.
Equity Compensation Plan Information The information required by this item with respect to securities authorized for issuance under equity compensation plans is set forth in Part III, Item 12 of this Annual Report on Form 10-K, and is incorporated herein by reference. Purchases of Equity Securities by the Issuer.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company’s Common Stock and tradeable warrants are publicly traded on the NYSE American under the symbol “SBEV” and “SBEV WS”. Aggregate Number of Holders of Common Stock As of March 29, 2024, there were 45,129,687 shares of Common Stock issued and outstanding.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company’s Common Stock and tradeable warrants are publicly traded on the NYSE American under the symbol “SBEV” and “SBEV WS”. Aggregate Number of Holders of Common Stock As of June 30, 2025, there were 1,899,876 shares of Common Stock issued and outstanding.
There were no repurchases of our common stock during the year ended December 31, 2023.
There were no repurchases of our common stock during the year ended December 31, 2024. Item 6. {Reserved}
Removed
Use of Proceeds On June 7, 2021, our Registration Statement, as amended, and originally filed on Form S-1 (File No. 333-255091) was declared effective by the SEC for our initial public offering of 7,500,000 units, including 3,750,000 additional shares of common stock and 3,750,000 warrants to purchase shares of common stock, each at an offering price of $4.00 per share, for aggregate gross proceeds of approximately $15.0 million.
Removed
After deducting underwriting discounts and commissions and other estimated offering expenses incurred by us of approximately $1.2 million, the net proceeds from the offering were approximately $13.8 million. Kingswood Capital Markets, a division of Benchmark Investments, LLC acted as sole book-running manager and the representative of the underwriters of the underwritten public offering.
Removed
No offering costs were paid or are payable, directly, or indirectly, to our directors or officers, to persons owning 10% or more of any class of our equity securities, or to any of our affiliates. Our common stock and warrants are traded on Nasdaq under the symbols “SBEV” and “SBEV WS”, respectively.
Removed
There has been no material change in the expected use of the net proceeds from our underwritten public offering as described in our final prospectus filed with the SEC on June 14, 2021. Upon receipt, the net proceeds from our underwritten public offering were held in cash and cash equivalents.
Removed
As of December 31, 2023, we have used approximately all of the net proceeds from the underwritten public offering, primarily on working capital and general corporate purposes. Item 6. {Reserved}

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

18 edited+2 added−1 removed14 unchanged
Biggest changeRevenue Revenues for the year ended December 31, 2023 were $18.9 million compared to revenues of $18.1 million for the year ended December 31, 2022. The increase in sales was mainly due to an increase in our E-commerce segment of $0.4 million and an increase in our Splash Beverage Group segment of $0.3 million.
Biggest changeThe $8.4 million decrease in cost of goods sold was driven by decreased sales in the e-commerce and $1.1 million was driven by beverage business. Operating Expenses Operating expenses for the year ended December 31, 2024 were $16.4 million compared to $20.9 million for the year ended December 31, 2023.
Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. Revenue The Company faces significant judgment in revenue recognition due to the complexities of the beverage industry’s competitive landscape and diverse distribution channels.
Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates. 30 Revenue The Company faces significant judgment in revenue recognition due to the complexities of the beverage industry’s competitive landscape and diverse distribution channels.
(“Merger Sub”), a Nevada Corporation wholly-owned by Canfield, and Splash Beverage Group, II Inc.. a Nevada corporation (“Splash”) pursuant to which Merger Sub merged with and into Splash (the “Merger”) with Splash as the surviving company and a wholly-owned subsidiary of Canfield. The Merger was consummated on March 31, 2020.
(“Merger Sub”), a Nevada Corporation wholly-owned by Canfield, and Splash Beverage Group, II Inc.. a Nevada corporation (“Splash”) pursuant to which Merger Sub merged with and into Splash (the “Merger”) with Splash as the surviving company and a wholly-owned subsidiary of Canfield.
As the owners and management of Splash had voting and operating control of CMS following the Merger, the Merger transaction was accounted for as a reverse acquisition (that is with Splash as the acquiring entity), followed by a recapitalization. On July 31, 2020, CMS changed its name to Splash Beverage Group, Inc. (“SBG”).
The Merger was consummated on March 31, 2020. 28 As the owners and management of Splash had voting and operating control of CMS following the Merger, the Merger transaction was accounted for as a reverse acquisition (that is with Splash as the acquiring entity), followed by a recapitalization.
Net cash used for continuing operating activities during the year ended December 31, 2023, was $10.2 million as compared to the net cash used by continuing operating activities for the year ended December 31, 2022, of $14.0 million.
The decrease was primarily due to expenses relating to operating the business. Net cash used for continuing operating activities during the year ended December 31, 2024, was $8.0 million as compared to the net cash used by continuing operating activities for the year ended December 31, 2023, of $10.2 million.
The primary reason for the change in net cash used was due to an increase of $3.8 million in amortization of debt and a decrease of $0.6 million in losses of the business, offset by a decrease of $16.5 million in working capital.
The primary reason for the change in net cash used was due to an increase of $1.2 million in non-cash share-based compensation, and a decrease of $1.6 million in losses of the business, offset by a decrease of $0.6 million in working capital.
Net cash used for investing activities during the year ended December 31, 2023, was $0.01 as compared to the net cash used for investing activities during the year ended December 31, 2022, of $0.1 million. The net cash used in the year 2023 was for a capital expenditure for building improvements.
Net cash used for investing activities during the year ended December 31, 2024, was $0.01 million as compared to the net cash used for investing activities during the year ended December 31, 2023, of $0.01 million. The net cash used in the year 2024 was for machinery & equipment.
Other Income/(Expense) Other expense for the year ended December 31, 2023 were $5.7 million compared to $0.2 million for the year ended December 31, 2022. The other expense increase of $5.5 million is mainly driven by an increase in amortization of debt discount of $3.8 million and a $1.9 million increase in interest expense.
Other Income/(Expense) Other expenses for the year ended December 31, 2024 were $6.9 million compared to $5.7 million for the year ended December 31, 2023. The other expense increased of $1.2 million is mainly driven by an increase in interest expense.
Principal repayment of debt of $1.0 million and $0.6 million were made in years ending December 31, 2023 and 2022 respectively. In the year ending December 31, 2023 a cash advance from related party of $0.4 million was received. 24 In order to have sufficient cash to fund our operations, we will need to raise additional equity or debt capital.
A cash advance from related party of $0.01 million and $0.4 million was received in 2024 and 2023 respectively. In order to have sufficient cash to fund our operations, we will need to raise additional equity or debt capital.
Cost of Goods Sold Cost of goods sold for the year ended December 31, 2023 were $13.3 million compared to cost of goods sold for the year ended December 31, 2022 of $12.2 million. The $1.1 million increase in cost of goods sold was due to our increased sales and inflation.
Cost of Goods Sold Cost of goods sold for the year ended December 31, 2024 were $3.8 million compared to cost of goods sold for the year ended December 31, 2023 of $13.3 million. The $9.5 million decrease in cost of goods sold was due to our decreased sales.
Net cash provided by financing activities during the year ended December 31, 2023, was $6.1 million compared to $14.4 million provided from financing activities for the year ended December 31, 2022. During the year ended December 31, 2023, we received $0 from the issuance of common stock compared to $11.4 million during the year ending December 31, 2022.
Net cash provided by financing activities during the year ended December 31, 2024, was $7.5 million compared to $6.1 million provided from financing activities for the year ended December 31, 2023. Company received $9.5 million and $6.6 million proceeds from the issuance of debt in years ending December 31, 2024 and 2023, respectively.
We received $6.6 million and $4.0 million proceeds from the issuance of debt in years ending December 31, 2023 and 2022, respectively. In the year ending December 31, 2023, $0.2 million was received from a shareholder advance and a $0.4 million shareholder advance was repaid in the year ending December 31, 2022.
No cash advance from shareholders in 2024, $0.2 million was received from a shareholder advance in the year ending December 31, 2023. Principal repayment of debt of $2.0 million and $1.0 million were made in years ending December 31, 2024 and 2023 respectively.
LIQUIDITY 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 expenditures.
Offset by a decrease in amortization of debt discount of $0.2 million and $0.03 million in other expenses. 29 LIQUIDITY 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.
On June 11, 2021, SBG’s common stock and warrant to purchase common stock began trading on the NYSE American under the symbols “SBEV” and SBEV WT,” respectively. On November 8, 2021, SBG reincorporated into the State of Nevada and became a Nevada corporation. Our principal offices are located at 1314 E. Las Olas Blvd, Suite 221, Fort Lauderdale, Florida 33301.
On July 31, 2020, CMS changed its name to Splash Beverage Group, Inc. (“SBG”). On June 11, 2021, SBG’s common stock and warrant to purchase common stock began trading on the NYSE American under the symbols “SBEV” and SBEV WT,” respectively. On November 8, 2021, SBG reincorporated into the State of Nevada and became a Nevada corporation.
In addition, the Company has an active registration statement on Form S-3 to facilitate raising additional funds. As of December 31, 2023, we had total cash of $379,978, as compared with $4,431,745 at December 31, 2022. The decrease was primarily due to expenses relating to operating the business.
Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. In addition, the Company has an active registration statement on Form S-3 to facilitate raising additional funds. As of December 31, 2024, we had total cash of $15,346, as compared with $379,978 at December 31, 2023.
We have not incorporated by reference into this Annual Report on Form 10-K the information that can be assessed through our website and you should not consider it to be part of this Annual Report on Form 10-K. 23 Results of Operations for the Year Ended December 31, 2023, compared to Year Ended December 31, 2022.
Our principal offices are located at 1314 E. Las Olas Blvd, Suite 221, Fort Lauderdale, Florida 33301. Our website address is www.splashbeveragegroup.com. We have not incorporated by reference into this Annual Report on Form 10-K the information that can be assessed through our website and you should not consider it to be part of this Annual Report on Form 10-K.
The remaining operating expense decrease of $0.2 million was due to decreases in sales and marketing expense and other general and administrative expenses of $1.0 million, which were offset by an increase of $0.8 million in salary and wages.
The decrease in operating expenses was primarily due to $1.7 million of marketing expense, $0.5 million of contracted services, $2.1 million of other general and administrative expenses partially offset by increases of the non-cash expenses related to share issuance of $1.2 million. The loss of intangible impairment of $4.2 million was recorded in the other general and administrative expenses.
Operating Expenses Operating expenses for the year ended December 31, 2023 were $20.9 million compared to $27.3 million for the year ended December 31, 2022. Non cash-operating expenses related to share issuance was $1.2 million as of December 31, 2023 compared to $7.4 million in December 31, 2022.
Results of Operations for the Year Ended December 31, 2024, compared to Year Ended December 31, 2023. Revenue Revenues for the year ended December 31, 2024 were $4.2 million compared to revenues of $18.9 million for the year ended December 31, 2023.
Removed
Net cash used for discontinued operating activities during the year ended December 31, 2023, was $0 as compared to $0.03 million for the year ended December 31, 2022.
Added
Part of the $14.7` million decrease in sales was mainly due to a decrease in our beverage sales of $1.7 million. Additionally, revenues from our vertically integrated B2B and B2C e-commerce distribution platform called Qplash decreased approximately $13 million or 88.5% due to low inventory . Total sales declined due to limited liquidity to procure inventory to drive third-party sales.
Added
Interest expenses for the year ended December 31, 2024 were $2.9 million compared to $1.9 million for the year ended December 31, 2023. The $1.0 million increase in interest expense is due to new loans with a principal of $3.2 million with higher interest rates. The Company also reserved $0.3 million for legal settlement.

Other SBEV 10-K year-over-year comparisons