What changed in SPLASH BEVERAGE GROUP, INC.'s 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of SPLASH BEVERAGE GROUP, INC.'s 2024 and 2025 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 2025 report.
+347 added−318 removedSource: 10-K (2026-04-15) vs 10-K (2025-07-11)
Top changes in SPLASH BEVERAGE GROUP, INC.'s 2025 10-K
347 paragraphs added · 318 removed · 134 edited across 6 sections
- Item 1A. Risk Factors+231 / −200 · 107 edited
- Item 1. Business+35 / −68 · 7 edited
- Item 7. Management's Discussion & Analysis+51 / −30 · 15 edited
- Item 3. Legal Proceedings+22 / −2 · 1 edited
- Item 1C. Cybersecurity+4 / −13
Item 1. Business
Business — how the company describes what it does
7 edited+28 added−61 removed1 unchanged
Item 1. Business
Business — how the company describes what it does
7 edited+28 added−61 removed1 unchanged
2024 filing
2025 filing
Biggest changeWe 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. Available Information We file annual, quarterly, and current reports, proxy statements and other information with the U.S. Securities Exchange Commission (the “SEC”).
Biggest changeListing on the NYSE American Our Common Stock is listed on the NYSE American exchange under the ticker symbol “SBEV”. Corporate Information We are a Nevada corporation. Our website address is www.splashbeveragegroup.com . Our website is not incorporated into this Report. 4 Available Information We file annual, quarterly, and current reports, proxy statements and other information with the U.S.
These distributors typically have geographic rights to distribute major beverage brands and call on every store in a given area such as major cities or regions. Our management team has extensive experience working within this channel and believes that we will be successful in building a strong network of these distributors.
These distributors typically have geographic rights to distribute major beverage brands and call on every store in a given area such as major cities or regions. Our President and CMO has extensive experience working within this channel and believes that we may be successful in building a strong network of these distributors.
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.
Historically our business strategy has entailed purchasing 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.
These filings are available to the public through the SEC’s website at http://www.sec.gov.
Securities Exchange Commission (the “SEC”). These filings are available to the public through the SEC’s website at http://www.sec.gov.
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.
Manufacturing and Co-packing Although we are responsible for manufacturing tequila products, we do not directly manufacture these products, but instead outsource such manufacturing to third party bottlers and contract packers and distillers. Chispo products are manufactured in Mexico, under contract manufacturing arrangements.
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.
Distribution For our beverage-alcohol products, we operated 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.
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”).
Costa Rica Water On June 25, 2025, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with a third party (the “Seller”) under which the Seller sold certain water assets located in Costa Rica to the Company in exchange for $20 million of Series C Convertible Preferred Stock (the “Series C”).
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Item 1. Business. Company Overview Splash is a portfolio company managing multiple brands across several growth segments within the consumer beverage industry. Splash has built organizational capabilities and an infrastructure enabling it to incubate and/or acquire brands with the intention of efficiently accelerating them to higher volume and sales revenue.
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Item 1. Business. Company Overview Historically, Splash was a portfolio company seeking to manage brands across viable growth segments within the consumer beverage industry. As a result of our lack of capital, we did not generate revenue from February 2025 until March 2026 when we delivered tequila as described below. Our beverage operations have historically not been profitable.
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The management team has proven capabilities in building consumer franchises and marketing and distributing multiple brands of beverages within the non-alcoholic and alcoholic segments. Manufacturing is typically outsourced to third party co-packers and distillers, or in select cases for a brand such as Copa DI Vino ® wines, performed within our own facility in Oregon.
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Because of our lack of capital to generate revenue, our management reviewed strategic alternatives inside and outside of the beverage industry. As a result, on March 4, 2026 the Company entered into a non-binding letter of intent setting forth the principal terms of a potential acquisition of a leading manufacturer and multi-brand operator of federally compliant cannabinoid wellness products.
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We believe the distribution landscape in the beverage industry is changing rapidly as tech-enabled e-commerce business models are thriving. Direct to consumer, office or home solutions are projected to continue to gain traction in the future.
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See “Letter of Intent” immediately below for more information. As of the date of this Report, the Company has not entered into a definitive written agreement with respect to such potential transaction. The delay has been caused by a quest to make the acquisition tax-free for the target’s equity holders.
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Recognizing this opportunity Splash continues to shape its operating model to be vertically integrated with our e-commerce platform, Qplash, which purchases local and regional brands for developing a direct line of sales to boutique retail stores and consumers.
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Because the process for doing so would delay the closing of the proposed acquisition until late 2026, the Company has agreed to pay additional cash to the target company’s investors to cover their income taxes and reduce the equity component of the acquisition. 1 Letter of Intent On March 4, 2026, Splash entered into a letter of intent (the “Letter”) with the target company, Medterra CBD, LLC (“Medterra”), a leading manufacturer and multi-brand operator of federally compliant cannabinoid wellness products.
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Splash’s wholly owned subsidiary, Splash Beverage Group II, Inc. 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).
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Pursuant to the Letter, the parties agreed in principal on the terms of a potential business combination between Medterra and the Company, which transaction is subject to due diligence and execution of a definitive written agreement and other applicable agreements, receipt of audited financial statements of Medterra and customary closing conditions.
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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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In addition, the Company shall be required to raise capital to pay off Medterra’s debt of approximately $10.4 million.
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The operations and IP for Copa DI Vino ® are wholly owned by Splash and incorporated in the state of Nevada under the name Copa DI Vino ® Wine Group Inc. In addition, Splash has a joint venture with SALT Naturally Flavored Tequila and Pulpoloco sangria that comes in a biodegradable can.
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The proposed terms for the acquisition reflect an enterprise value of Medterra of $37.6 million or the issuance of approximately 54.4 million shares of Common Stock, which assumes repayment of its outstanding debt and delivery of approximately $10,000,000 in cash to pay off and extinguish the debt of Medterra and to cover the income taxes of the Medterra equity holders.
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The Company’s leadership understands the importance of infusing beverage brands with strong popular culture and lifestyle elements that drive trial, belief and, most importantly, repeat purchases.
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At closing the Company will issue Medterra investors a number of shares of the Company’s Common Stock equal to up to 19.99% of the Company’s Common Stock then outstanding, and the remaining shares will be of two series of convertible preferred stock (“Series X” and “Series X-1”) to be issued to Medterra’s equity holders based on their existing ownership interests in Medterra.
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Our management team led by Robert Nistico has over 28 years of experience in all levels of the three-tier distribution system used in the beverage industry working with brands such as Red Bull and companies such as Gallo Winery and Republic National Distributing Company (RNDC Texas).
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The Series X and X-1 shares will convert at $0.50 per share. The Common Stock to be issued at the closing shall have full rights equal to all outstanding Common Stock, except the holders may not vote upon the stockholder approval of the change of control contemplated by the acquisition.
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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.
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The Letter also provides that the Company will issue Series X-1 to Medterra’s lender with the stated value based upon the equity value of Medterra. In exchange the lender shall cancel its warrants to purchase equity of Medterra. The Company now expects it can close the acquisition of Medterra in May 2026.
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Our Senior Vice President of Sales, James Allred, has over 25 years’ experience in the beverage industry, predominately with Anheuser-Busch.
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The closing will be subject to the Company’s planned meetings with investors during the week of April 13 th and its ability to raise the necessary capital as well as reaching a definitive agreement with Medterra and the parties meeting the closing conditions.
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Our Strategy Our strategy is to combine the traditional approach of manufacturing, distributing, and marketing of beverages, with early-stage brands that have a reasonable level of pre-existing brand awareness and market presence, or have attributes that we believe to be purely innovative. We believe this allows us to break through the clutter of numerous brand introductions and dilute risk.
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Because the Company recently rescinded its June 2025 acquisition of certain water rights in Costa Rica, it derecognized the $20 million of stockholders’ equity which created a stockholders’ deficit of $15,300,828 at December 31, 2025. The NYSE American Rules required us to have at least $6 million in stockholders’ equity.
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We apply this philosophy regardless of whether the brand is 100% owned or a joint venture.
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With the expected stockholder’s equity created by the Medterra acquisition, the Company will be in compliance with the NYSE American Rules. The Company is seeking to meet with the NYSE American Staff as soon as possible. There is no assurance that the NYSE American will permit us to maintain the listing of our Common Stock.
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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.
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See Item 1A – “Risk Factors.” Our Strategy Our primary focus is to complete the acquisition of Medterra as described above under “Letter of Intent.” In addition, we are focusing on re-commencing material revenue-generating operations through our beverage business, including through sales of our Chispo Tequila brand subject to obtaining sufficient capital.
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We believe this platform model provides us with two paths to success: one, developing our wholly owned core brands and two, the ability to tap into high growth, early-stage brands ready to scale. This platform allows us to limit risk, and significantly reduce development expenses while simultaneously increasing efficiencies for all brands in our portfolio.
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In the furtherance of this Chispo tequila opportunity, in December 2025 we purchased $50,000 of inventory for the potential Senior Frogs order described under “Chispo Tequila” below. The Company did not make any sales in the 2025 calendar year after March 2025 due to its lack of capital resources.
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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.
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The Company estimates that it will initially require $3,000,000 for the Chispo brand as well as general and administrative expenses for the next 12 months . Chispo Tequila Chispo is a tequila brand which we recently began distributing to one customer. See “ Senor Frogs Selection” below.
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Splash has the ability to fully own a brand or be flexible to engage in business ventures structured with a revenue split, or an equity position. The benefit to Splash in these shared brand ownerships is the ability to avoid the development costs for new products.
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Chispo is an authentic blue agave blanco tequila, with fresh, sweet citrus, herbal floral notes ideal for cocktail mixing. We have entered into an arrangement with the Chispo producer under which we agreed to distribute the brand in certain states in the U.S., as well as in Guatemala and Europe.
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This model spreads our risk over several brands, contributes to our economies of scale, improves our relationship with distributors and reduces the overall cost of infrastructure. 2 The Company also believes the distribution landscape in the beverage category is changing rapidly.
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We expect that we will need approximately $500,000 in new financing to implement this business. 2 Senior Frogs Selection In January 2026 the Company announced that Senor Frog’s, an internationally recognized restaurant and entertainment brand known for its vibrant atmosphere and authentic cuisine, selected Chispo Tequila as its house tequila across an initial group of locations in Florida, the Bahamas, and Mexico.
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Tech-enabled business models are thriving and direct to consumer, office and home solutions are projected to continue to gain traction as beverage alcohol regulations evolve. A core strategy for us is to optimize the early success we’re seeing with the Qplash online platform, our consumer-packaged goods retail division and our first entry point into the growing e-commerce channel.
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Senor Frog’s belongs to Grupo Anderson’s Mexico who owns more than 50 business units and 15 distinct restaurant brands across 4 countries. In March 2026, we shipped initial inventory to a distributor which we expect will permit us to recognize revenue for the three months ended March 31, 2026.
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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.
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The rollout marks Chispo’s first high-profile national hospitality partner, providing early validation of the brand’s positioning and quality as it begins to scale in the on-premise channel. Senor Frog’s selected Chispo following an extensive evaluation of authentic tequila brands, with a focus on taste profile, consistency, and resonance with its broad and diverse customer base.
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SALT Flavored Tequila We oversee production, distribute, and market the following flavors under the brand name SALT Naturally Flavored Tequila: ● Citrus flavor ● Berry flavor ● Chocolate flavor Vodka, rum, and brown spirits have experienced significant growth when flavors are introduced, and we expect this growth of flavors to continue, as the tequila category continues to rapidly expand.
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Chispo’s smooth character and approachable style distinguished it in a competitive field of premium and value-positioned tequilas. Chispo Tequila is produced in Jalisco, Mexico in partnership with ZB Distillery, a respected distilling operation known for its commitment to quality and traditional tequila craftsmanship.
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SALT is currently being distributed by various Anheuser-Busch & Miller-Coors distributorships, and other distributors in multiple U.S. states. Additionally, SALT is for sale in Mexico. SALT has also launched in Guatemala and Japan and efforts continue to grow the brand’s international presence. SALT is a business venture between the Company and SALT USA, LLC.
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The Company issued the Series C to the Seller. Section 1.04 of the Asset Purchase Agreement required the Seller to deliver the water assets by December 31, 2025 or pay the Company $20 million in cash.
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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.
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Section 1.04 of the Asset Purchase Agreement further stated that failure to deliver either the water assets or the $20 million by December 31, 2025 rendered the Series C to be “null, void, and of no further force or effect.” The Seller failed to comply with either requirement.
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The beverages covered by the License Agreement include sports drinks, energy drinks, energy shots, electrolyte chews, energy bars, water, protein, and teas. We pay a 6% royalty of net sales or a guaranteed minimum annual royalty of $660,000, whichever is greater.
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As a result, on April 14, 2026, the Board of Directors of the Company terminated the Asset Purchase Agreement and cancelled the Series C effective December 31, 2025. 3 Competition We compete with a large variety of other companies in the marketplace for the sale of alcoholic products.
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The License Agreement will expire on December 31, 2025, with a renewal option through December 31, 2028 at which time it will be reviewed and renegotiated if necessary. We have the right to use the TapouT brand to market, advertise and promote for sale our TapouT beverages and branded products.
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The beverage sector is highly competitive, and include international, national, regional and local producers and distributors. Competitive factors in the beverage industry include price and promotional activity, advertising and marketing programs, point-of-sale merchandising, retail space management, customer service, product differentiation, packaging innovations and distribution methods.
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As part of the alliance, Splash commits to investing 2% of sales in marketing to the TapouT Performance Brand. TapouT provides marketing collateral for advertising and promotion and has influential relationships with select celebrities and athletic talent. TapouT agrees to use reasonable efforts to request its retained celebrities and/or athletes be present at autograph signings, tradeshows and other similar events.
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These co-packaging arrangements are terminable upon request and do not obligate us to produce any minimum quantities of products within specified periods.
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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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Depending on the product, the third-party bottlers or packers add other ingredients for the manufacture and packaging of the finished products into our approved containers in accordance with our formulas.
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(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.
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In addition to working with these independent distributors, we also previously established distribution arrangements with national retail accounts. Employees We have one full-time employee our President who has extensive experience in the beverage business, one part-time employee, our Chief Financial Officer and a part-time accounting consultant. All of our employees and our consultant work remotely.
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(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.
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The Copa DI Vino ® product line is highly innovative as a ready to drink wine glass capable of going anywhere without the need for a bottle, corkscrew or glass. The company also has a growing keg wine business for on-premises restaurants and bars.
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Through our acquisition of Copa DI Vino ® Corporation, we are now able to offer nine varietals of wine: Pinot Grigio, Riesling, Merlot, Chardonnay, White Zinfandel, Moscato, Red Blend, Sauvignon Blanc and Cabernet Sauvignon. In addition to its wine varietals, Copa DI Vino ® also procures Pulpoloco, a sangria which is encased in an eco-friendly fiber based can from Spain.
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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.
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Inside of the division, there are two primary customer groups: business to business retailers, which in turn offer the products to their customers, and business to consumer, selling direct to end users. The business-to-business program allows businesses to control inventory, order with payment terms, and offer the convenience of delivery directly to each store.
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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.
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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.
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In addition to working with these independent distributors, we also have distribution arrangements with national retail accounts to distribute some of our products directly through their warehouse operations. Most notably, SBG executed a distribution agreement with AB-InBev, for distribution with their own operations, AB ONE. This provides SBG very effective distribution capabilities.
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Intellectual Property During the fiscal year ended December 31, 2023, we were granted a trademark for Copa DI Vino ® . The United States Patent and Trademark Office issued the trademark on March 12, 2024, providing our company exclusive rights to use the trademark in connection with the product categories specified in this Form 10-K.
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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.
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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.
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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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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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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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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.
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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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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.
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Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
107 edited+124 added−93 removed49 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
107 edited+124 added−93 removed49 unchanged
2024 filing
2025 filing
Biggest changeNo assurances can be given that management will be successful in raising additional capital, if needed, or on acceptable terms. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for the next 12 months.
Biggest changeThese conditions raise substantial doubt about the Company’s ability to continue as a going concern for the next 12 months. In order to continue and fund its operations, the Company will be required to obtain additional resources through sales and issuances of equity to successfully execute its business plans and keep the Common Stock listed on the NYSE American.
Various jurisdictions may seek to adopt significant additional product labeling or warning requirements relating to the chemical content or perceived adverse health consequences of certain of our products. These types of requirements, if they become applicable to one or more of our products under current or future environmental or health laws or regulations, may inhibit sales of such products.
Various jurisdictions may seek to adopt significant additional product labeling or warning requirements relating to the chemical content or perceived adverse health consequences of certain products. These types of requirements, if they become applicable to one or more of our products under current or future environmental or health laws or regulations, may inhibit sales of such products.
In addition, if the inventory of our products held by our distributors and retailers is too high, they will not place orders for additional products, which would also unfavorably impact our sales and adversely affect our operating results. If we fail to maintain relationships with our independent contract manufacturers, our business could be harmed.
In addition, if the inventory of our products held by our distributors and retailers is too high, they will not place orders for additional products, which would also unfavorably impact our sales and adversely affect our operating results. 12 If we fail to maintain relationships with our independent contract manufacturers, our business could be harmed.
Our security controls over personal data, the training of employees and vendors on data privacy and data security, and the policies, procedures and practices we implemented or may implement in the future may not prevent the improper disclosure of personal data by us or the third-party service providers and vendors whose technology, systems and services we use in connection with the receipt, storage and transmission of personal data.
Our security controls over personal data, the training of employees and vendors on data privacy and data security, 19 and the policies, procedures and practices we implemented or may implement in the future may not prevent the improper disclosure of personal data by us or the third-party service providers and vendors whose technology, systems and services we use in connection with the receipt, storage and transmission of personal data.
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.
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.
In addition, because of changing government regulations or implementation thereof, or allegations of product contamination, we may be required from time to time to recall products entirely or from specific markets. Product recalls could affect our profitability and could negatively affect brand image. Our business is subject to many regulations and noncompliance is costly.
In addition, because of changing government regulations or implementation thereof, or allegations of product contamination, we may be required from time to time to recall products entirely or from specific markets. Product recalls could affect our profitability and could negatively affect brand image. 15 Because our business is subject to many regulations, noncompliance is costly.
In the event of such issuances, the preferred stock could be used, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our company. Any such issuance would be subject to terms and conditions of any current offering that may disallow any such issuance.
In the event of such issuances, the preferred stock could be used, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our company. Any such issuance would be subject to terms and conditions of any current offering that may disallow any such issuance. 22
Our Articles of Incorporation authorize the issuance of up to 5,000,000 shares of “blank check” preferred stock, with par value $0.001 per share, with such designation rights and preferences as may be determined from time to time by the Board of Directors.
Our Articles of Incorporation authorize the issuance of up to 5,000,000 shares of “blank check” preferred stock, with par value $0.001 per share, with such designation rights and preferences as may be determined from time-to-time by the Board of Directors (the “Board”).
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.
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.
To the extent that our distributors, retailers and brokers are distracted from selling our products or do not employ sufficient efforts in managing and selling our products, including re-stocking the retail shelves with our products, our sales and results of operations could be adversely affected.
To the extent that our distributors, retailers and brokers are distracted from selling our products or do not employ sufficient efforts in managing and selling our products, including re-stocking the retail shelves with our products, our results of operations could be adversely affected.
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.
Damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics, labor strikes, geopolitical events or other reasons, could impair the manufacture, distribution and sale of our products. Many of these events are outside of our control.
If our distiller in Mexico increases its prices, we may not have alternative sources of supply at comparable prices and may not be able to raise the prices of our products to cover all, or even a portion, of the increased costs.
If our distiller in increases its prices, we may not have alternative sources of supply at comparable prices and may not be able to raise the prices of our products to cover all, or even a portion, of the increased costs.
These third-party service providers and business partners are subject to similar risks as we are relating to cybersecurity, privacy violations, business interruption, and systems and employee failures, and are subject to legal, regulatory and market risks of their own.
These third-party service providers and business partners are also subject to similar risks as we are relating to cybersecurity, privacy violations, business interruption, and systems and employee failures, and are subject to legal, regulatory and market risks of their own.
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.
Rose, Snyder & Jacobs LLP, our independent registered public accounting firm for the fiscal year ended December 31, 2025, has included an explanatory paragraph in their opinion that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2025, indicating that our current liquidity position raises substantial doubt about our ability to continue as a going concern.
We may not be able to maintain our relationships with current contract manufacturers or establish satisfactory relationships with new or replacement contract manufacturers, whether in existing or new geographic distribution areas.
We may not be able to maintain our relationships with contract manufacturers or establish satisfactory relationships with new or replacement contract manufacturers, whether in existing or new geographic distribution areas.
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.
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 expect to rely upon our ongoing relationships with our key flavor suppliers.
In California, a law requires that a specific warning appear on any product that contains a component listed by the state as having been found to cause cancer or birth defects. This law recognizes no generally applicable quantitative thresholds below which a warning is not required.
For example, in California, a law requires that a specific warning appear on any product that contains a component listed by the state as having been found to cause cancer or birth defects. This law recognizes no generally applicable quantitative thresholds below which a warning is not required.
Accordingly, we cannot predict the timing or quantity of purchases by any of our independent distributors or whether any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have done in the past.
Accordingly, we cannot predict the timing or quantity of purchases by any of our independent distributors or whether any of our distributors will purchase products from us in the same frequencies and volumes as they may have done in the past.
However, given the unpredictability of the timing, nature and scope of any such IT failures or disruptions, we could potentially be subject to downtimes, transactional errors, processing inefficiencies, operational delays, other detrimental impacts on our operations or ability to provide products to our customers, the compromising of confidential or personal information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our cash flows, competitive position, financial condition or results of operations.
However, given the unpredictability of the timing, nature and scope of any such IT failures or disruptions, as well as our limited resources and personnel, we could potentially be subject to downtimes, transactional errors, processing inefficiencies, operational delays, other detrimental impacts on our operations or ability to provide products to our customers, the compromising of confidential or personal information, destruction or corruption of data, security breaches, other manipulation or improper use of our systems and networks, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our cash flows, competitive position, financial condition or results of operations.
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.
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 material weakness exists over our financial reporting.
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.
Furthermore, such third-parties’ financial position or market share may deteriorate, which could adversely affect our distribution, marketing and sales activities. 11 Our ability to establish 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.
Our brand image can also be adversely affected by unfavorable reports, studies and articles, litigation, or regulatory or other governmental action, whether involving our products or those of our competitors.
Our brand images can also be adversely affected by unfavorable reports, studies and articles, litigation, or regulatory or other governmental action, whether involving our products or those of our competitors.
In addition, if our distiller in Mexico fails to perform satisfactorily, fails to handle increased orders, or the loss of the services of our distiller in Mexico, along with delays in shipments of products, could cause us to fail to meet orders, lose sales, incur additional costs, and/or expose us to product quality issues.
In addition, if our distiller in Mexico fails to perform satisfactorily, fails to handle increased orders, or we lose the services of our distiller in Mexico, along with delays in shipments of products, it could cause us to fail to meet orders, lose sales, incur additional costs, and/or expose us to product quality issues.
Our growth strategy is based in part on growth through strategic initiatives including both acquisitions and divestitures, which poses a number of risks.
Our growth strategy is based in part on growth through strategic initiatives including both acquisitions and divestitures of brands and assets, which poses a number of risks.
Our Board of Directors is empowered, without shareholder approval, to issue shares of preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of our common stock.
Our Board is empowered, without stockholder approval, to issue shares of preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of our Common Stock.
If a regulatory authority finds that a current or future product or production batch or “run” is not in compliance with any of these regulations, we may be fined, or production may be stopped, which would adversely affect our financial condition and results of operations.
If a regulatory authority finds that a current or future product or production batch or “run” is not in compliance with any of these regulations, we may be fined, forced to recall products, or production may be stopped, which would adversely affect our financial condition and results of operations.
Volatility in the price or availability of the inputs we depend on, including raw materials, packaging, energy and labor, could adversely impact our financial results. The principal raw materials we use include glass bottles, aluminum cans, PET, fiber-board, labels and cardboard cartons, flavorings and sweeteners. These component and ingredient costs are subject to fluctuation.
Volatility in the price or availability of the inputs we depend on, including raw materials, packaging, energy and labor, could adversely impact our financial results. The principal raw materials we use include glass bottles, aluminum cans, polyethylene terephthalate, fiber-board, labels and cardboard cartons, flavorings and sweeteners. These component and ingredient costs are subject to fluctuation and environmental regulation.
There are many factors that could adversely affect demand for our products in foreign markets, including our inability to attract and maintain key distributors in these markets; volatility in the economic growth of certain of these markets; changes in economic, political or social conditions, the status and renegotiations of the North American Free Trade Agreement, imposition of new or increased labeling, product or production requirements, or other legal restrictions; restrictions on the import or export of our products or ingredients or substances used in our products; inflationary currency, devaluation or fluctuation; increased costs of doing business due to compliance with complex foreign and U.S. laws and regulations.
There are many factors that could adversely affect demand for our products in foreign markets, including our inability to attract and maintain key distributors in these markets; volatility in the economic growth of certain of these markets; changes in economic, political or social conditions, tariffs including retaliatory tariffs, the status and renegotiations of the North American Free Trade Agreement, imposition of new or increased labeling, product or production requirements, or other legal restrictions; restrictions on the import or export of our products or ingredients or substances used in our products; currency fluctuations, and increased costs of doing business due to compliance with complex foreign laws and regulations.
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.
In general, the consummation and integration of any acquired business or 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.
Although holders may not receive shares of common stock exceeding 4.99% of our outstanding shares of common stock immediately after affecting such conversion, this restriction does not prevent holders from receiving shares up to the 4.99% limit, selling those shares, and then receiving the rest of the shares it is due, in one or more tranches, while still staying below the 4.99% limit.
Although conversions are subject to stockholder approval and thereafter holders may not receive shares of Common Stock exceeding 4.99% of our outstanding shares of Common Stock immediately after affecting such conversion, this restriction does not prevent holders from receiving shares up to the 4.99% limit, selling those shares, and then receiving the rest of the shares it is due, in one or more tranches, while still staying below the 4.99% limit.
As our ability to continue to operate will be dependent on raising debt and equity finance, any adverse impact to those markets as a result of these conflicts, including due to increased market volatility, decreased availability in third-party financing and/or a deterioration in the terms on which it is available (if at all), could negatively impact our business, results of operations, cash flows, financial condition, and/or prospects.
As our ability to continue to operate will be dependent on raising capital, any adverse impact to markets as a result of these developments, including due to increased market volatility, decreased availability in third-party financing and/or a deterioration in the terms on which it is available (if at all), could negatively impact our business, results of operations, cash flows, financial condition, and/or prospects.
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.
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 required to sell or distribute related products 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 federal, state and/or local governmental or regulatory agency.
Similarly, any adverse publicity associated with any noncompliance may damage our reputation and our ability to successfully market our products. Furthermore, the rules and regulations are subject to change from time to time and while we closely monitor developments in this area, we cannot anticipate whether changes in these rules and regulations will impact our business adversely.
Similarly, any adverse publicity associated with any noncompliance may damage our reputation and our ability to successfully market our products. Furthermore, the rules and regulations are subject to change from time-to-time, we cannot anticipate whether changes in these rules and regulations will impact our business adversely.
The price at which our common stock trades may fluctuate significantly and may be influenced by many factors, including our financial results, developments generally affecting the coffee industry, general economic, industry and market conditions, the depth and liquidity of the market for our common stock, fluctuations in coffee prices, investor perceptions of our business, reports by industry analysts, negative announcements by our customers, competitors or suppliers regarding their own performances, and the impact of other “Risk Factors” discussed in the Annual Report.
The price at which our Common Stock trades may fluctuate significantly and may be influenced by many factors, including our financial results, developments generally affecting the beverage industry, general economic, industry and market conditions, the depth and liquidity of the market for our Common Stock, fluctuations in prices and costs, investor perceptions of our business, reports by industry analysts, negative announcements by our customers, competitors or suppliers regarding their own performances, and the impact of other Risk Factors discussed herein.
Our beverage portfolio is comprised of a number of unique brands with reputations and consumer imagery that have been built over time. Our investments in marketing as well as our strong commitment to product quality are intended to have a favorable impact on brand image and consumer preferences.
We aim to sell beverages comprised of a number of unique brands with reputations and consumer imagery that have been built over time. Our investments in marketing as well as our strong commitment to product quality are intended to have a favorable impact on brand image and consumer preferences.
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.
We do not manufacture tequila but have instead outsourced 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.
This could place further downward pressure on the price of our common stock and in turn result in holders receiving an ever-increasing number of additional shares of common stock upon conversion of its securities, and adjustments thereof, which in turn will likely lead to further dilution, reductions in the exercise/conversion price of holders securities and even more downward pressure on our common stock, which could lead to our common stock becoming devalued or worthless The market price of our common stock has been volatile over the year and may continue to be volatile.
This could place further downward pressure on the price of our Common Stock and in turn result in holders receiving an ever-increasing number of additional shares of Common Stock upon conversion of its securities, and adjustments thereof, which in turn will likely lead to further dilution, reductions in the exercise/conversion price of holders securities and even more downward pressure on our Common Stock, which could lead to our Common Stock becoming devalued or worthless.
Although we have the exclusive rights to flavor concentrates developed with our current flavor concentrate suppliers, and while we have the rights to the ingredients for our products, we do not have the list of ingredients for our flavor extracts and concentrates. Consequently, we may be unable to obtain these exact flavors or concentrates from alternative suppliers on short notice.
Although we have the exclusive rights to flavor concentrates developed with our current flavor concentrate suppliers, and while we have the rights to the ingredients for our products, we do not have the list of ingredients for our flavor extracts and concentrates, and in the event of a termination or failure to perform by these suppliers, we may be unable to obtain these exact flavors or concentrates from alternative suppliers on short notice.
We are also required to conduct business only with holders of licenses to import, warehouse, transport, distribute, and sell spirits. We cannot assure you that these and other governmental regulations, applicable to our industry, will not change or become more stringent.
We are required to comply with these regulations and to maintain various permits and licenses. We will be required to conduct business only with holders of licenses to import, warehouse, transport, distribute and sell our products. We cannot assure you that these and other governmental regulations applicable to our industry will not change or become more stringent.
Most of our distributors, retailers and brokers sell and distribute competing products, including non-alcoholic and alcoholic beverages, and our products may represent a small portion of their businesses. The success of this network will depend on the performance of the distributors, retailers and brokers of this network.
All of the distributors, retailers and brokers we have used in the past sell and distribute competing products, including non-alcoholic and alcoholic beverages, and our products may represent a small portion of their businesses. The success of this network will depend on the performance of the distributors, retailers and brokers of this network.
If we fail to protect our trademarks and trade secrets, we may be unable to successfully market our products and compete effectively. We rely on a combination of trademark and trade secrecy laws, confidentiality procedures and contractual provisions to protect our intellectual property rights.
If we fail to protect our trademarks and trade secrets, we may be unable to successfully market our products and compete effectively. We rely on a combination of trademark and trade secrets, as well as confidentiality procedures and contractual provisions to protect our intellectual property rights and interests in our operations, products and processes.
Our ability to maintain effective relationships with contract manufacturers and other third parties for the production and delivery of our beverage products in a particular geographic distribution area is important to the success of our operations within each distribution area.
Our ability to maintain effective relationships with contract manufacturers and other third parties for the production and delivery of our beverage products in a particular geographic distribution area is important to the success of our operations within each distribution area. Our agreements with third parties enable such parties to terminate our relationship within a relatively short period of time.
Adverse developments in lawsuits concerning these types of matters or a significant decline in the social acceptability of beverage alcohol products that may result from lawsuits could have a material adverse effect on our business, liquidity, financial condition and results of operations. We are subject to risks inherent in sales of products in international markets.
Adverse developments in lawsuits concerning these types of matters or a significant decline in the social acceptability of beverage alcohol products that may result from lawsuits could have a material adverse effect on our business, financial condition and results of operations.
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.
Failure to protect or maintain 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 and related rights and interests could result in the expenditure of significant financial and managerial resources.
We have issued multiple classes of preferred stock in the Company that will result in dilution to existing stockholders upon their conversion The issuance of common stock upon conversion of the our Series A-1 Preferred Stock, our Series B Redeemable Preferred Stock, and our Series C Convertible Preferred Stock will result in immediate and substantial dilution to the interests of other stockholders.
We have issued multiple classes of preferred stock and other securities of the Company that will result in dilution to existing stockholders upon their conversion and exercise. The issuance of Common Stock upon conversion of our outstanding convertible preferred stock will result in immediate and substantial dilution to the interests of other stockholders.
Our business is dependent upon awareness and market acceptance of our products and brands by our target markets. 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.
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.
From time to time, certain of our stockholders may be eligible to sell all or some of their common shares by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), subject to certain limitations.
In general, from time to time, certain of our stockholders may be eligible to sell all or some of their common shares by means of ordinary brokerage transactions in the open market pursuant to Rule 144, subject to certain limitations.
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.
If we fail to successfully integrate acquired assets or businesses, 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 or other adverse consequences.
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.
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.
If we materially underestimate demand for our products or are unable to maintain sufficient inventory of raw materials, we might not be able to satisfy demand on a short-term basis.
Our ability to estimate demand for our products is imprecise, particularly for new products, seasonal promotions and new markets. If we materially underestimate demand for our products or are unable to maintain sufficient inventory of raw materials, we might not be able to satisfy demand on a short-term basis.
If holders choose to do this, it will cause substantial dilution to the then holders of our common stock. Additionally, the continued sale of shares issuable upon successive conversions will likely create significant downward pressure on the price of our common stock as holders sells material amounts of our common stock over time and/or in a short period of time.
Additionally, the continued sale of shares issuable upon successive conversions will likely create significant downward pressure on the price of our Common Stock as holders sell material amounts of our Common Stock over time and/or in a short period of time.
Sales of our products may be adversely affected by negative publicity associated with these issues. If we do not adequately anticipate or adjust to respond to these and other changes in consumer preferences, we may not be able to maintain and grow our brand image and our sales may be adversely affected.
If we do not adequately anticipate or adjust to respond to these and other changes in consumer preferences, we may not be able to maintain and grow our brand images, and our sales may be adversely affected.
If there were to be substantial increases in the prices of our ingredients, raw materials and packaging materials, to the extent that they cannot be recouped through increases in the prices of finished beverage products, would increase our operating costs and could reduce our profitability.
If there were to be substantial increases in the prices of these products, to the extent that they cannot be recouped through increases in the prices of finished beverage products, it would increase our operating costs.
If we have to replace a flavor supplier, we could experience disruptions in our ability to deliver products to our customers, which could have a material adverse effect on our results of operations.
If we have to replace a flavor supplier, we could experience disruptions in our ability to deliver products to our customers, which could have a material adverse effect on our results of operations. We are dependent on a distiller in Mexico to provide us with our finished tequila product.
There is a risk that the mentioned entities may not adequately perform their functions within the network by, without limitation, failing to distribute to sufficient retailers or positioning our products in localities that may not be receptive to our product.
There is a risk that the mentioned entities may not adequately perform their functions within the network by, without limitation, failing to distribute to sufficient retailers or positioning our products in localities that may not be receptive to our product. Further, these third parties could reduce or terminate their relationship with us for any reason without liability to us.
We do not have a written agreement with our distiller in Mexico obligating it to produce our product. The termination of our relationship with our distiller in Mexico distiller or an adverse change in the terms of its services could have a negative impact on our business.
The termination of our relationship with our distiller in Mexico or an adverse change in the terms of its services could have a negative impact on our business.
RISKS RELATED TO OUR BUSINESS Risks Related to our Business Our auditors have included an explanatory paragraph in their opinion regarding our ability to continue as a going concern. If we are unable to continue as a going concern, our securities will have little or no value.
RISKS RELATED TO OUR BUSINESS Risks Related to our Financial Condition Our auditors have included an explanatory paragraph in their opinion regarding our ability to continue as a going concern. If we are unable to continue as a going concern, our stockholders will lose all or some of their investments.
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.
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.
If we are unable to source our flavors on acceptable terms from our key suppliers, we could suffer disruptions in our business. We currently purchase our flavor concentrate from various flavor concentrate suppliers, and continually develop other sources of flavor concentrate for each of our products. Generally, flavor suppliers hold the proprietary rights to their flavor-specific ingredients.
If we are unable to source our flavors on acceptable terms from our key suppliers, we could suffer disruptions in our business. In the past, we have purchased our flavor concentrate from various flavor concentrate suppliers, and seek to continually develop other sources of flavor concentrate for certain of our products.
The production, marketing and sale of our beverages, including contents, labels, caps and containers, are subject to the rules and regulations of various federal, provincial, state and local health agencies.
The production, marketing and sale of our beverages, including contents, labels, caps and containers, are subject to the rules and regulations of various federal, foreign, state and local health and other agencies. The regulations to which we are subject impose requirements on production, distribution, marketing, advertising and labelling of products.
An increase in taxation or in import or excise duties could also significantly harm our sales revenue and margins, both through the reduction of overall consumption and by encouraging consumers to switch to lower-taxed categories of beverage alcohol. We face substantial competition in the alcoholic and non-alcoholic beverage industry, and we may not be able to effectively compete.
An increase in taxation or in import or excise duties could also significantly harm our revenues and margins, both through the reduction of overall consumption and by encouraging consumers to switch to lower-taxed categories of beverage alcohol.
However, there can be no assurance that existing or new products that we manufacture, distribute or sell will be accepted or be successful in any particular foreign market, due to local or global competition, product price, cultural differences, and consumer preferences or otherwise.
Certain of our contemplated operations are outside of the United States, and there can be no assurance that these products that we sell will be accepted or be successful in any particular foreign market, due to local or global competition, product price, cultural differences, and consumer preferences or otherwise.
We compete with other beverage companies not only for consumer acceptance but also for shelf space in retail outlets and for marketing focus by our distributors, all of whom also distribute other beverage brands. Our products compete with all non-alcoholic and alcoholic beverages, most of which are marketed by companies with substantially greater financial resources than ours.
We compete with other beverage companies not only for consumer acceptance but also for shelf space in retail outlets and for marketing focus by distributors, all of whom also distribute other beverage brands.
Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations.
Our failure to become and remain profitable would decrease the value of our company and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations.
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.
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 including by such distributors and national partners locating competitive brands to meet their demand.
Some of these competitors are placing severe pressure on independent distributors not to carry competitive brands such as ours. We also compete with regional beverage producers and “private label” brands. Increased competitor consolidations, market-place competition, particularly among branded beverage products, and competitive product and pricing pressures could impact our earnings, market share and volume growth.
We will also compete with regional beverage producers and “private label” brands. Increased competitor consolidations, market-place competition, particularly among branded beverage products, and competitive product and pricing pressures could impact our earnings, market share and volume growth.
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.
If we are unable to improve our liquidity position, we may not be able to continue as a going concern. This has continued as of the date of this Report. We have sustained recurring losses and we have had working capital and stockholders’ equity deficits.
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.
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 costs.
We have experienced recurring losses from operations and negative cash flows from operating activities and anticipate that we will continue to incur significant operating losses in the future. We have experienced recurring losses from operations and negative cash flows from operating activities.
We have experienced recurring losses from operations and negative cash flows from operating activities. We expect to continue to incur significant expenses related to our ongoing operations and generate operating losses for the foreseeable future.
Although we try to anticipate these shifts and innovate new products to introduce to our consumers, we may not succeed. Consumer preferences also are affected by factors other than taste, such as health and nutrition considerations and obesity concerns, shifting consumer needs, changes in consumer lifestyles, increased consumer information and competitive product and pricing pressures.
Consumer preferences also are affected by factors other than taste, such as health and nutrition considerations and obesity concerns, shifting consumer needs, changes in consumer lifestyles, increased consumer information and competitive product and pricing pressures. Sales of our products may be adversely affected by negative publicity associated with these issues.
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.
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.
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.
In addition, negative public relations and product quality issues, whether real or imagined, could tarnish our reputation and images of the affected brands and could cause consumers to choose other products.
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.
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. 7 The execution of our strategic initiatives will likely entail incurring goodwill assets or repositioning or similar actions that in turn require us to record impairments, restructuring and other charges.
If we are unable to effectively operate or manage the risks associated with operating in international markets, our business, financial condition or results of operations could be adversely affected. Water scarcity and poor quality could negatively impact our costs and capacity.
If we are unable to effectively operate or manage the risks associated with operating in international markets, our business, financial condition or results of operations could be adversely affected. 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.
Additionally, failure to introduce new brands, products or product extensions into the marketplace as current ones mature and to meet the changing preferences of consumers could prevent us from gaining market share and achieving long-term profitability. Product lifecycles can vary and consumer preferences and loyalties change over time.
If we do not adequately anticipate and react to changing demographics, consumer and economic trends, health concerns and product preferences, our financial results could be adversely affected. 8 Additionally, failure to introduce new brands, products or product extensions into the marketplace as current ones mature and to meet the changing preferences of consumers could prevent us from gaining market share and achieving long-term profitability.
However, the steps taken by us to protect these proprietary rights may not be adequate and may not prevent third parties from infringing or misappropriating our trademarks, trade secrets or similar proprietary rights. In addition, other parties may seek to assert infringement claims against us, and we may have to pursue litigation against other parties to assert our rights.
However, the steps taken by us to protect these proprietary rights may not be adequate and may not prevent third parties from infringing or misappropriating our trademarks, trade secrets or similar proprietary rights, particularly outside of the United States where intellectual property rights may not be fully enforceable.
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.
If we are not successful in the revitalization and growth of our brand and product offerings, or in maintaining and expanding upon the brands we offer, we may not achieve and maintain satisfactory levels of acceptance by independent distributors and retail consumers.
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.
If we are subject to litigation, we may incur significant liabilities and litigation expenses. We have been subject to and may in the future become party to litigation. Litigation involves significant risks, uncertainties and costs, including distraction of management attention away from our business operations.
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.
Additionally, there has been public attention directed at the alcoholic beverage 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.
Our business, operations, financial position and timelines, could be materially adversely affected by the continuing military action in Ukraine and the war between Israel and Hamas.
Our business, operations, financial position and timelines, could be materially adversely affected by government action and geopolitical conflicts.
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Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
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Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
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2024 filing
2025 filing
Removed
Item 1C. Cybersecurity We have established policies and processes for assessing, identifying, and managing material risk from cybersecurity threats, and have integrated these processes into our overall risk management systems and processes.
Added
Item 1C. Cybersecurity Like all companies that utilize technology, we are subject to threats of breaches of our technology systems. To mitigate the threat to our business, our goal to take a comprehensive approach to cybersecurity risk management. Our lack of capital has prevented us from having a more robust cybersecurity program.
Removed
We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
Added
The company’s data and its security is actively managed with oversight from a 3 rd party IT provider. Due to the lack of capital, we have not devoted sufficient resources to cybersecurity. We intend to make investments to maintain the security of our data and cybersecurity infrastructure when feasible including based on our access to sufficient capital.
Removed
We conduct periodic risk assessments to identify cybersecurity threats, as well as assessments in the event of a material change in our business practices that may affect information systems that are vulnerable to such cybersecurity threats.
Added
There can be no guarantee that our policies and procedures will be properly followed in every instance or that those policies and procedures will be effective. We do not believe that risks from prior cybersecurity threats have materially affected our business to date.
Removed
These risk assessments include identification of reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.
Added
We can provide no assurance that there will not be incidents in the future or that future attacks will not materially affect us, including our business strategy, results of operations, or financial condition. in early 2026 we experienced a hacking incident wherein a malicious third party attempted to impersonate our President to divert funds.
Removed
Following these risk assessments, we re-design, implement, and maintain reasonable safeguards to minimize identified risks; reasonably address any identified gaps in existing safeguards; and regularly monitor the effectiveness of our safeguards. Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with the President who reports to our Chief Executive Officer, to manage the risk assessment and mitigation process.
Removed
We engage consultants, or other third parties in connection with our risk assessment processes. These service providers assist us to design and implement our cybersecurity policies and procedures, as well as to monitor and test our safeguards.
Removed
We require each third-party service provider to certify that it has the ability to implement and maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security measures in connection with their work with us, and to promptly report any suspected breach of its security measures that may affect our company.
Removed
We 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.
Removed
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including the information technology team at the direction of our President.
Removed
Our executive team including our Chief Executive Officer, and Chief Financial Officer are responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Removed
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.
Removed
In addition, the Company’s incident response and vulnerability management policies include reporting to the audit committee of the board of directors for certain cybersecurity incidents including significant breaches to the Company’s networks or systems.
Removed
The audit committee receives regular reports from the information technology team concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them. The audit committee also has access to various reports, summaries or presentations related to cybersecurity threats, risk and mitigation.
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
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Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
1 edited+21 added−1 removed0 unchanged
2024 filing
2025 filing
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.
Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business.
Removed
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.
Added
Except for the litigation disclosed below, we are not currently a party to any legal or arbitration proceeding the outcome of which, if ‘determined adversely to us, would individually or in the aggregate be reasonably expected to have a material adverse effect on our business, operating results, cash flows, or financial condition.
Added
On August 14, 2024, TapouT, LLC, (“TapouT”), filed a Complaint against the Company in the Supreme Count of New York for New York County (the “Court”).
Added
The Complaint pertains to breach of a certain Licensing Agreement dated December 8, 2011, under which the Company became a successor in interest on July 1, 2013, pursuant to an amendment to the Licensing Agreement.
Added
TapouT alleges that as a result of an unpaid invoice they had exercised their right pursuant to section 22 of the Licensing Agreement to terminate the Licensing Agreement. TapouT alleges that as a result of the aforementioned termination, pursuant to the Licensing Agreement, they are owed all unpaid fees and other amounts payable become immediately due.
Added
As a result, TapouT have brought two causes of action, the first being breach of contract for the unpaid invoice and the second for accounts stated for all unpaid fees and other amounts payable. TapouT, LLC is seeking approximately $1,700,000 for termination of the Licensing Agreement.
Added
The Company does not view this as a reasonable amount given that the Company believes TapOut LLC did not fulfill their obligations pursuant the Licensing Agreement. The Company believes the case will be settled for a lower amount and has booked a legal reserve of $330,000 as the estimate for the potential liability.
Added
The parties have had multiple mediation sessions and are continuing their efforts to seek an amicable resolution. If these mediation efforts do not yield a settlement agreement, then the Company anticipates that litigation shall continue.
Added
The Company is in the process of resolving alleged and potential claims from investors that are referred to as the “Uptime Investor Claims.” A settlement agreement is in place, and revisions to the same are being negotiated by the Company’s counsel after alleged defaults occurred under the original agreement.
Added
There is a chance that the subsequent revised agreements are not finalized and litigation could ensue, however the Company will exhaust all efforts to finalize the revised agreements as quickly as possible. 23 The Company intends to take all necessary steps to continue to vigorously defend against the action.
Added
The parties meet regularly on this matter in an attempt to settle the matter prior to the court date, but to date no settlement offer has been agreed upon.
Added
On April 14, 2026, the Company was served with a Notice of Claim for Wages made by Miguel Ramirez, a former employee of the Company, demanding back wages in the amount of $32,154.70 and asserting that additional penalties of $12,480 and other remedies of $5,000 are payable in connection with the claim.
Added
The claim was filed with the State of Nevada's Department of Business and Industry, Office of the Labor Commissioner. The Company intends to investigate the claim.
Added
The Company is party to various credit facilities, loan agreements, notes, leases, guarantees, settlement arrangements and other financing and contractual obligations (collectively, the “Obligations”), certain of which contain affirmative and negative covenants, financial maintenance requirements, performance obligations, cross-default provisions and other restrictions customary for obligations of this type.
Added
From time to time, the Company may be in default, or may be deemed to be in default, under one or more of its Obligations, including as a result of covenant breaches, payment defaults, failures to satisfy performance or reporting requirements, breaches of contractual terms, non-compliance with settlement obligations, cross-default triggers, or other events of default.
Added
There can be no assurance that the Company will be able to comply with all such covenants and obligations in the future or that any such defaults will not occur. While any such defaults or breaches may arise under individual Obligations, the aggregate principal amount and associated liabilities of such Obligations, taken together, may be material to the Company.
Added
The existence of any actual or alleged default or breach could permit lenders, counterparties or other stakeholders to accelerate repayment, terminate commitments, enforce settlement terms, exercise remedies against collateral, pursue damages or other contractual remedies, or otherwise initiate enforcement or legal proceedings, including pursuant to cross-default or cross-acceleration provisions in other agreements.
Added
There can be no assurance that any such counterparties would not exercise such rights or that the Company would be able to cure any such defaults, obtain waivers, or otherwise avoid the exercise of remedies.
Added
Any such events, whether individually or in the aggregate, could have a material adverse effect on the Company’s business, financial condition, liquidity, results of operations and ability to continue as a going concern.
Added
In addition, the Company may be required to seek waivers, amendments, forbearance arrangements, refinancings or other accommodations from its creditors or counterparties, which may not be available on favorable terms, or at all, and there can be no assurance that the Company will be able to obtain any such relief on acceptable terms or within required timeframes.
Added
The Company owes an estimated $4.7 million to certain creditors for past due amounts. The Company is in discussions with these creditors and is seeking to negotiate an acceptable resolution and settlement of these balances. However, no assurances can be made that a resolution will be met, in which case we may face litigation from these creditors. Item 4.
Added
Mine Safety Disclosures. Not applicable. 24 PART II
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
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Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
4 edited+0 added−1 removed0 unchanged
2024 filing
2025 filing
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.
Biggest changeAs of April 14, 2026, approximately 280 holders of record of our Common Stock in addition to beneficial owners who hold their shares at accounts with broker-dealers. 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.
There were no repurchases of our common stock during the year ended December 31, 2024. Item 6. {Reserved}
There were no repurchases of our Common Stock during the year ended December 31, 2025. Item 6. [Reserved]
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.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. The Company’s Common Stock is publicly traded on the NYSE American under the symbol “SBEV”. Aggregate Number of Holders of Common Stock As of April 14, 2026, there were 9,953,538 shares of Common Stock issued and outstanding.
Any decisions as to future payment of cash dividends will depend on our earnings and financial position and such other factors as the Board of Directors deems relevant. Securities Authorized for Issuance under Equity Compensation Plans None.
We plan to retain any future earnings, if any, for use in our business operations. Any decisions as to future payment of cash dividends will depend on our earnings and financial position and such other factors as the Board deems relevant. Purchases of Equity Securities by the Issuer.
Removed
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 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
15 edited+36 added−15 removed4 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
15 edited+36 added−15 removed4 unchanged
2024 filing
2025 filing
Biggest changeThere can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. We will be required to pursue sources of additional capital through various means, including debt or equity financings. Future financings through equity investments are likely to be dilutive to existing stockholders.
Biggest changeWe intend to fund our future operations through the issuance of equity securities until such a time as our business achieves profitability. However, there can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.
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.
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.
Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which will adversely impact our financial condition.
Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible preferred stock and warrants, which will adversely impact our financial condition.
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.
Net cash provided by financing activities during the year ended December 31, 2025 was $5.1 million compared to $7.5 million provided from financing activities for the year ended December 31, 2024. The Company received $4.3 and $$9.5 million in proceeds from the issuance of debt in years ending December 31, 2025 and 2024, respectively.
Determining the timing of revenue recognition involves assessing factors such as control transfer, returns, allowances, trade promotions, and distributor sell-through data. Historical analysis, market trends assessment, and contractual term evaluations inform revenue recognition judgments. However, inherent uncertainties persist, underscoring the critical nature of revenue recognition as it significantly impacts financial statements and performance evaluation.
Determining the timing of revenue recognition involves assessing factors such as control transfer, returns, allowances, trade promotions, and distributor sell-through data. Historical analysis, market trends assessment, and contractual term evaluations inform revenue recognition judgments.
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.
Cost of Goods Sold Cost of goods sold for the year ended December 31, 2025 were $0.06 million compared to cost of goods sold for the year ended December 31, 2024 of $0.29 million. The $0.23 million decrease in cost of goods sold was due to our decreased sales.
Also, the terms of securities we may issue in future capital transactions may be more favorable for new investors. Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuance of incentive awards under equity employee incentive plans, which may have additional dilutive effects.
Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuance of incentive awards under equity employee incentive plans, which may have additional dilutive effects.
If the amount of capital we are able to raise from financing activities together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to curtail or cease operations.
If the amount of capital we are able to raise from financing activities together with our revenues from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to curtail or cease operations. 28 As such, we have concluded that such plans do not alleviate the substantial doubt about our ability to continue as a going concern for one year from the date the accompanying financial statements are issued.
Changes in economic conditions or customer creditworthiness could result in adjustments to the allowance for doubtful accounts, impacting our reported financial results. Inventory Valuation We value inventory at the lower of cost or net realizable value. Estimating the net realizable value of inventory involves significant judgment, particularly when market conditions change rapidly or when excess or obsolete inventory exists.
Management evaluates the collectability of accounts receivable on an ongoing basis and adjusts the allowance as necessary. Changes in economic conditions or customer creditworthiness could result in adjustments to the allowance for doubtful accounts, impacting our reported financial results. Inventory Valuation We value inventory at the lower of cost or net realizable value.
Management regularly assesses inventory quantities on hand, future demand forecasts, and market conditions to determine whether write-downs to inventory are necessary. Fair Value Measurements We measure certain financial assets and liabilities at fair value on a recurring basis. Fair value measurements involve significant judgment and estimation, particularly when observable inputs are limited or not available.
Fair Value Measurements We measure certain financial assets and liabilities at fair value on a recurring basis. Fair value measurements involve significant judgment and estimation, particularly when observable inputs are limited or not available. Management utilizes valuation techniques such as discounted cash flow models, market comparables, and third-party appraisals to determine fair values.
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.
As of April 14, 2026, the Company had total cash and cash equivalents of $732,307. Net cash used for continuing operating activities during the year ended December 31, 2025, was $4.8 million as compared to the net cash used by continuing operating activities for the year ended December 31, 2024, of $7.3 million.
Allowance for Doubtful Accounts The allowance for doubtful accounts is established based on historical experience, current economic conditions, and specific customer collection issues. Management evaluates the collectability of accounts receivable on an ongoing basis and adjusts the allowance as necessary.
However, inherent uncertainties persist, underscoring the critical nature of revenue recognition as it significantly impacts financial statements and performance evaluation. 29 Allowance for Doubtful Accounts The allowance for doubtful accounts is established based on historical experience, current economic conditions, and specific customer collection issues.
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.
This non-cash expense significantly contributed to the increase in other expense. Interest expense for the year ended December 31, 2025 was $2.6 million compared to $3.7 million for the year ended December 31, 2024, representing a decrease of approximately $1.8 million.
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.
The increase in operating expenses was primarily due to an increase of approximately $8.6 million of Non-cash share-based compensation partially offset by decreased by a reduced contract services of $0.17 million and reduced salary and wages of $0.32 million and reduced sales and marketing of $0.4 million.
Actual results could differ materially because of the factors discussed in “Risk Factors” elsewhere in this Annual Report, and other factors that we may not know. Business Overview Canfield Medical Supply, Inc. (“CMS”) a company’s whose common stock was quoted on the OTCQB entered into an Agreement and Plan of Merger with SBG Acquisition Inc.
Actual results could differ materially because of the factors discussed in “Risk Factors” elsewhere in this Annual Report, and other factors that we may not know. Business Overview From 2020, we have been engaged in the beverage businesses, although we have not generated revenue since February 2025. The Company’s efforts to commercialize its beverage products as described under “Business”.
Removed
(“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.
Added
In addition, the Company is pursuing potential strategic alternatives, including a potential acquisition as described above under “Business-Letter of Intent.” RESULTS OF OPERATIONS Our consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue our operation.
Removed
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.
Added
Our results of operations reflect our continuing operations and reflect losses from discontinued operations related to the discontinuation of our Copa Di Vino businesses.
Removed
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.
Added
All financial information has been restated to reflect our discontinued operations for all periods presented. 25 For the year ended December 31, 2025 compared with the year ended December 31, 2024 The following table sets forth our revenues, expenses and net loss for the years ended December 31, 2025 and 2024.
Removed
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.
Added
For the Year Ended December 31, 2025 2024 Revenues $ 73,066 $ 801,273 Cost of goods sold (56,168 ) (921,070 ) Operating expenses (14,203,118 ) (9,780,643 ) Loss from operations (14,186,220 ) (9,900,440 ) Other income (expenses), net (10,163,051 ) (7,708,634 ) Income (loss) from continuing operations (24,349,271 ) (2,105,961 ) Loss from discontinued operations (885,563 ) (17,609,074 ) Net income (loss) (25,234,834 ) (17,609,074 ) Foreign currency translation gain (loss) (47,532 ) (6,147,477 ) Comprehensive loss $ (25,282,186 ) $ (23,756,551 ) Results of Operations for the Year Ended December 31, 2025, compared to Year Ended December 31, 2024.
Removed
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.
Added
Revenue Revenues for the year ended December 31, 2025 were $0.07 million compared to revenues of $0.8 million for the year ended December 31, 2024. The $0.73 million decrease in sales primarily due to a shortage of operating capital which hindered our ability to obtain inventory and generate sales.
Removed
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
The Company did not make any sales in the 2025 calendar year after March 2025 due to its lack of capital resources. The Company is seeking to raise at least $ 3 million in the fiscal year ending December 31, 2026 in order to re-establish portions of its prior business through the sale of tequila products.
Removed
The $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.
Added
The Company did not make any sales in the 2025 calendar year after March 2025 due to its lack of capital resources. Operating Expenses Operating expenses for the year ended December 31, 2025 were $14.2 million compared to $9.8 million for the year ended December 31, 2024.
Removed
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.
Added
The reductions in operational and general and administrative expenses related to our lack of sales activities in 2025 due to the lack of adequate capital. Other Income/(Expense) Other expenses for the year ended December 31, 2025 were $10.2 million compared to $7.7 million for the year ended December 31, 2024.
Removed
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.
Added
The other expense increased of $2.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024. 26 During 2025, the Company recognized a $5.6 million loss on extinguishment of debt in connection with the exchange of certain outstanding loans, including principal and accrued interest totaling approximately $12.6 million, for preferred stock.
Removed
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.
Added
The decrease was primarily attributable to the debt exchange transaction described above, which reduced outstanding borrowings and related interest obligations. Amortization of debt discount decreased from $3.7 million in 2024 to $1.9 million in 2025 due to the reduction in debt balances following the exchange transactions. In addition, the Company recorded a $0.5 million inventory write-off during 2025.
Removed
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.
Added
These increases in expense were partially offset by the absence of a $0.3 million legal settlement reserve recorded in 2024 that did not recur in 2025.
Removed
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.
Added
Discontinued Operations Due to the lack of working capital to fund operations, it formed a license agreement with a 3 rd party to allow the continued production and flow of product to the customers so that it could later be recovered as the funding challenges were then deemed as only temporary.
Removed
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.
Added
As the lack of funding persisted through the full year of 2025 the company subsequently determined it no longer intends to relaunch the product line.
Removed
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.
Added
As a result, accordingly, the Company has classified the related assets and liabilities associated with its CdV as discontinued operations in its consolidated balance sheets and the results of its logistics and transportation services business has been presented as discontinued operations in its consolidated statements of operations for all periods presented as the discontinuation of its business had a major effect on its operations and financial results.
Removed
Management utilizes valuation techniques such as discounted cash flow models, market comparables, and third-party appraisals to determine fair values.
Added
Unless otherwise noted, discussion in the other notes to consolidated financial statements refers to the Company’s continuing operations.
Added
The following table summarizes the results of operations of discontinued operations: Year Ended December 31, 2025 2024 Revenues $ 369,666 $ 3,353,935 Cost of revenues, excluding depreciation and amortization 416,913 2,878,688 Gross loss (47,247 ) 475,247 Operating expenses (669,760 ) (2,296,979 ) Impairment loss — (4,324,064 ) Other expenses (168,557 ) (1,681 ) Loss from discontinued operations $ (885,564 ) $ (6,147,477 ) 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.
Added
Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable and accounts payable and capital expenditures. Due to our lack of capital, we did not generate any revenue between March 2025 and February of 2026.
Added
In order to generate material revenue, we require at least $3,000,000 of working capital in order to acquire inventory and re-commence minimal operations. This includes our plans for our Chispo business and general and administrative expenses. Our lack of cash resources has prevented us from carrying on our commercialization activities.
Added
In addition, our lack of working capital has prevented us from marketing our products. 27 In addition, we would need additional capital to acquire and fund the operations of any business we may acquire in a business combination in the future, including potentially Medterra if we can structure, negotiate and pursue a transaction under the Letter of Intent with that entity.
Added
See “Part I, Item 1-Business-Recent Developments-Letter of Intent” at page 2. See also Item 1A – “ Risk Factors”. We have historically raised capital to fund our operations and capital needs through the issuance of debt and equity securities. In August 2025, the Company issued convertible promissory notes with individuals in the aggregate principal amount of $424,560.
Added
These loans mature in May or June 2026 and have an interest rate of 22% per annum. In September 2025 we sold secured convertible promissory notes in the principal amount of $2,200,000 for total gross proceeds of $2,000,000, which notes do not bear any interest absent an event of default, and mature on September 22, 2026.
Added
In September 2025 we also entered into the ELOC Agreement which subject to certain conditions including obtaining and maintaining the registration of the shares on an effective registration statement allows us to access additional capital, we plan to access and deploy such capital to re-commence certain of our operations and to establish new operations as described in this Report.
Added
From January 27, 2026 through April 14, 2026, the Company has sold 4,840,254 shares under the ELOC Agreement for total gross proceeds of $1,917,709. The Company has recently been relying upon the ELOC Agreement as a source of liquidity.
Added
Its ability to generate material capital is in large part based on the future liquidity and the market price of our Common Stock. In November 2025, the Company borrowed $500,000 from two accredited investors and issued senior promissory notes with a combined original principal amount of $588,235, reflecting a 15% original issue discount.
Added
The notes mature on February 12, 2026, accrue interest at 6% starting 30 days after issuance, and include customary default provisions. The notes also permit the holders, at their discretion, to apply outstanding principal, accrued interest, and any Company securities they hold as consideration for participation in future equity, equity-linked, or debt financings.
Added
From June through December 2025, we raised a total of $1,300,000 from the sale of 1,300 shares of Series A-1 Convertible Preferred Stock (“Series A-1”), Class A Warrants to purchase 325,000 shares of Common Stock and Class B Warrants to purchase 325,000 shares of Common Stock.
Added
In December 2025, the Company entered into agreements to issue a total of 113,636 shares of Common Stock and 1,136 shares of Series D Convertible Preferred Stock to holders of options to purchase a total of up to $600,000 shares of Common Stock in exchange for the termination of such options.
Added
We will be required to pursue sources of additional capital through various means, including debt or equity financings. Future financings through equity investments are likely to be dilutive to existing stockholders. Also, the terms of securities we may issue in future capital transactions may be more favorable for new investors.
Added
Financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.
Added
If we raise funds through collaborations, or other similar arrangements with third parties, we may have to pledge or relinquish valuable assets or rights on terms that may not be favorable to us and/or may reduce the value of our Common Stock.
Added
There is therefore substantial doubt about our ability to continue as a going concern. Because our Common Stock is listed on the NYSE American, we cannot issue any indebtedness while listed due to our negative stockholders’ equity as described in this Report.
Added
Further we need to raise material equity in order to complete the Medterra acquisition plan to use the ELOC to support our minimal working capital needs but that requires our stock to trade actively enough; otherwise the investor will sell any Common Stock we issue which will depress the price to a point where our Common Stock will automatically be delisted.
Added
In 2025, we had a loss on debt extinguishment of $5.6 million arising from debt to equity exchanges, and non-cash share based compensation of $8.6 million related to warrants issued to our directors, officers and certain employees.
Added
The Company received $1,300,000 and $0 in proceeds from the issuance of equity securities in years ending December 31, 2025 and 2024, respectively. Warrants Effective July 31, 2025, the Company issued 5,050,000 Warrants to its officers, directors and certain employees.
Added
As of April 14, 2026, our Board of Directors agreed to cancel the Warrants subject to each person as applicable agreeing to cancel them. As of the date of this Report, 1,350,000 Warrants held by former employees remain outstanding and all other Warrants have been canceled. The Company intends to pursue its remedies with respect to the remaining Warrants .
Added
Estimating the net realizable value of inventory involves significant judgment, particularly when market conditions change rapidly or when excess or obsolete inventory exists. Management regularly assesses inventory quantities on hand, future demand forecasts, and market conditions to determine whether write-downs to inventory are necessary.