SPLASH BEVERAGE GROUP, INC.

Current report

The information in this discussion may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding our beverage business, our capital needs, our closing the Medterra acquisition and raising the required $10 million. business strategy and expectations. These forward-looking statements involve substantial risks and uncertainties. In some cases you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue”, the negative of the terms or other comparable terminology. Actual events or results may differ materially from the anticipated results or other expectations expressed in the forward-looking statements. In evaluating these statements, you should consider various factors, including the risks included in our 2025 Form 10-K. These factors may cause our actual results to differ materially from any forward-looking statements. The Company disclaim any obligation to publicly update these statements or disclose any difference between actual results and those reflected in these statements.

Current report

Splash Beverage Group, Inc. (the “Company” or “Splash”) is a Nevada corporation that was historically seeking to identify, acquire, and build early stage or under-valued beverage brands that have strong growth potential within its distribution system. Due to its lack of working capital and unsuccessful efforts at commercializing its beverage business, Splash currently has one product line it is distributing – Chispo tequila which it is authorized to distribute in certain U.S. states and certain non-U.S. locations. Presently Chispo is the house tequila for the Senor Frog stores located in Florida, The Bahamas and Mexico. The revenue generated in the first quarter of 2026 came from sales to Senor Frog.

Current report

As a result of its lack of meaningful sales in the beverage business, Splash is transitioning to the regulated wellness and cannaboid markets. See Note 1 to the Consolidated Financial Statements for information on our poroposed acquisition of Medterra CBD, LLC (“Medterra”).

Current report

Revenues for the three months ended March 31, 2026 were less than $0.01 million compared to revenues of approximately $0.07 million for the three months ended March 31, 2025. The $0.06 million decrease in sales is due to a decrease in our beverage sales of $0.06 million. In fact, we did not generate any revenue in fiscal year 2025 after the three months ended March of 2025 due to a lack of operating capital which has hindered the Company’s ability to generate sales since that time. This revenue came from sales of Chispo tequila to SenorFrog.

Current report

Operating expenses for the three months ended March 31, 2026 were $0.98 million compared to $1.68 million for the three months ended March 31, 2025 a decrease of $0.7 million. The increase of non-cash share-based compensation partially offset by a reduced contract services of $0.17 million and reduced salary and wages of $0.53 million and reduced sales and marketing of $0.01 million. The reductions in operational and general and administrative expenses related to our lack of sales activities in 2026 due to the lack of adequate capital.

Current report

Interest expenses for the three months ended March 31, 2026 was $0.89 million compared to $0.64 million for the three months ended March 31, 2025. The $0.39 million increase in interest expense is due to Decathlon loan.

Current report

Discontinued Operations

Current report

Due to the lack of working capital to fund operations, Splash formed a license agreement with a 3 rd party to allow the continued production and flow of product to the customers so that it could later be recovered as the funding challenges were then deemed as only temporary. As the lack of funding persisted through the full year of 2025 the company subsequently determined it no longer intends to relaunch the Copa Di Vino(“CdV”) product line. As a result, accordingly, the Company has classified the related assets and liabilities associated with its CdV as discontinued operations in its consolidated balance sheets and the results of its logistics and transportation services business has been presented as discontinued operations in its consolidated statements of operations for all periods presented as the discontinuation of its business had a major effect on its operations and financial results. Unless otherwise noted, discussion in the other notes to consolidated financial statements refers to the Company’s continuing operations.

Current report

The following table summarizes the results of operations of discontinued operations:

Current report

LIQUIDITY, GOING CONCERN CONSIDERATIONS AND CAPITAL RESOURCES

Current report

As of May 18, 2026, the Company had $394,722 in cash and cash equivalents. The Company does not have sufficient capital to meet its working capital needs for the 12 months following the filing of this Report. We are dependent upon receipt of funding from our equity line of credit. That facility can only provide material capital when our Common Stock is liquid. Its lack of liquidity has adversely affected us. In any event, we need to raise approximately $10 million to complete the Medterra acquisition. We cannot assure you we will be successful in raising the necessary capital or closing the acquisition.

Previous report

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Such forward-looking statements include those statements which express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact, including expectations relating to our plans with respect to our legacy businesses and consideration of strategic alternatives and our ability to raise the necessary working capital, statements concerning our need for and intended efforts to raise capital and the timing and intended use of proceeds in connection therewith , and the development and commercialization of beverages and other business ventures and the potential qualities and success of such products and operations. Forward-looking statements can generally be identified by the use of words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,” “should,” “would,” “intend,” “seem,” “potential,” “appear,” “continue,” “future,” believe,” “estimate,” “forecast,” “project” and other words of similar meaning, although not all forward-looking statements contain these identifying words. In particular, these forward-looking statements include, among others, statements about our intended use of proceeds, the development and commercialization of beverages and their potential qualities and success.

Previous report

These statements are based on our current expectations and projections and involve estimates, assumptions, risks and uncertainties that could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed herein and in the other documents we file with the SEC. Important factors that could cause actual results to differ from those in the forward-looking statements include the risks and uncertainties arising from our need for additional capital to continue and expand our operations, our ability to raise the capital needed on favorable terms or at all, our ability to meet regulatory requirements including the rules of the NYSE American and maintain the listing of our common stock on the NYSE American, our ability to meet our debt obligations and the negative financial and operational consequences of failing to do so, the impact of the United States and global economies including the weakening jobs market in the United States, potential inflation, future interest rates, United States tariff policy, our ability to pursue and execute on our business plan and the risks and challenges we will face in such endeavors, challenges in protecting and maintaining intellectual property rights including under existing agreements, the intense competition we face in our industry, and if we pursue any strategic alternatives the many risks we may encounter in evaluating any such alternatives and consummating any transaction. We also refer you to the Risk Factors referred to under “Item 1A – Risk Factors” herein, and in the other documents we file with the SEC for both an expanded discussion of the risks and uncertainties described above and additional risks and uncertainties that could cause actual results to differ materially and adversely from those expressed or implied by forward-looking statements. However, factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.

Previous report

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

Previous report

Splash Beverage Group, Inc. (the “Company” or “Splash”) seeks to identify, acquire, and build early stage or under-valued beverage brands that have strong growth potential within its distribution system. The Company is seeking to manage brands across viable 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.

Previous report

We have not generated any revenue since March 2025 due to our lack of capital. However, following the private placement offering in September 2025 in which we sold secured promissory notes, referred to herein as “Notes,” for total gross proceeds of $2,000,000 and entered into an equity line of credit agreement which subject to certain conditions including registering the shares on a registration statement will allow 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 below.

Previous report

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. Recognizing this opportunity Splash continues to shape its operating model to be vertically integrated with our e-commerce platform, Qplash, which business model envisions purchasing local and regional brands for developing a direct line of sales to boutique retail stores and consumers.

Previous report

Splash’s alcoholic beverage operations are currently focused on obtaining inventory for the sale of Chispo tequila in the U.S. and certain international markets, which is subject to the Company obtaining necessary capital of at least $500,000.

Previous report

In June 2025 the Company acquired water extraction rights to an aquifer located in Costa Rica, which we refer to herein as the “Water Assets.” Subject to accessing the necessary capital and infrastructure, our business plan for the Water Assets envisions the extraction, bottling and sale of high quality drinking water. As of the date hereof, we have received a purchase order from a customer in the United Arab Emirates. We need to raise approximately $4,000,000 in order to bottle, package, and ship this order.

Previous report

Because of our lack of revenue and the amount of capital we acquire to begin to generate revenue for each of our beverage businesses, we have begun looking at strategic alternatives where we may make an acquisition of assets or a business that presents value for our stockholders. As of the date of this report, we have not reached any understandings with respect to any business opportunity, and we may not do so. Any future acquisition of an unrelated business will likely require us to raise capital to support its operations even if we only issue equity securities to the seller. In addition, we are engaged in preliminary discussions with respect to acquiring a majority interest in a beverage product.

Previous report

Recent Developments

Previous report

In May – October 2025, the Company issued 1,050 shares of Series A-1 Preferred Stock in exchange for approximately $1,050,000. Series A-1 shares are convertible into common stock, subject to shareholder approval, and further discussed in Note 5. Investors of A-1 Shares also received 262,500 1-year A Warrants exercisable into common stock at 80% of 5-day VWAP, and 262,500 5-year B Warrants exercisable into common stock at $4.00. The accounting treatment of this transaction is subject to further review and may be adjusted in the future.

Previous report

In June 2025, the Company issued 126,710 shares of Series B Preferred Stock in exchange for approximately $12.7 million in previously outstanding convertible notes. The Series B shares are convertible into common stock, subject to shareholder approval and further discussed in Note 5. The accounting treatment of this transaction is subject to further review and may be adjusted in the future.

Previous report

In June 2025, the Company acquired certain assets, including all contractual water rights to the aquifer located in Garabito, Puntarenas, Costa Rica. The Company issued 20,000 shares of Series C Preferred Stock as consideration, at an initial stated value of $1000 per share. Management determined that the transaction is an asset acquisition under ASC 805, as substantially all of the fair value is concentrated in a single identifiable asset—the water rights—and no substantive processes were acquired. The fair value of the acquired assets has been preliminarily estimated at $20 million and is subject to further evaluation and assessment. The Series C shares are convertible into common stock, subject to shareholder approval, and further discussed in Note 5.

Previous report

In August 2025, the Company issued three notes for a total of $424,560.

Previous report

On July 31, 2025 as subsequently modified, the Company’s Board of Directors granted 750,000 five-year Warrants to each director, exercisable at $0.80 per share. In addition, our President received a grant of 750,000 Warrants and our Chief Financial Officer received a grant of 1,000,000 Warrants with identical terms. We also granted certain employees a total of 400,000 Warrants with identical terms other than vesting. Generally, all warrants vested except those granted to our Chief Executive Officer are fully vested; for the Chief Executive Officer, one-third will only vested upon meeting a performance target and the other two-thirds vest in 500,000 share increments quarterly over a two-year period. As of the date of this Report, 500,000 warrants are vested.

Previous report

In September 2025 the Company issued $2.2 million of convertible notes for gross proceeds of $2 million, and entered into a $35 million Equity Line of Credit agreement.

Previous report

On October 31, 2025, the Company’s stockholders voted to approve the issuance of shares of common stock under outstanding derivative securities and pursuant to the Equity Line of Credit Agreement in accordance with NYSE American rules. The Company’s stockholders also approved the 2025 Equity Incentive Plan providing the grant of incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation rights to the Company’s employees, directors and independent contractors. The number of shares reserved under such Plan will originally be 15% of the outstanding shares of common stock outstanding on a fully diluted basis, which reserve will automatically increase on January 1 of each year for a period of seven years beginning on January 1, 2026, and ending on January 1, 2032, in an amount equal to 5% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year on a fully diluted basis.

Previous report

Results of Operations

Previous report

For the three months ended September 30, 2025, the Company did not record any sales compared to revenues of approximately $1.0 million for the three months ended September 30, 2024. This was primarily due to a shortage of operating capital which limited our ability to maintain inventory and fulfil orders. We remain committed to resolving these constraints and resuming normal business activities in the upcoming quarter.

Previous report

Revenue for the nine months ended September 30, 2025 was $0.4 million compared to revenues of $3.6 million for the nine months ended September 30, 2024. The $3.2 million decrease in sales is driven by decreases in both the e-commerce and beverage businesses.

Previous report

Cost of goods sold for the nine months ended September 30, 2025 was $0.5 million compared to cost of goods sold for the nine months ended September 30, 2024 of $2.9 million. The $1.7 million decrease in cost of goods sold was driven by decreased sales in both the e-commerce and beverage business.

Previous report

Operating expenses for the three months ended September 30, 2025 were $9.6 million compared to $3.0 million for the three months ended September 30, 2024, a increase of $6.6 million. The increase in our operating expenses was primarily due to non-cash expenses.

Previous report

Operating expenses for the nine months ended September 30, 2025 were $13.2 million compared to $9.6 million for the nine months ended September 30, 2024, a increase of $3.6 million. The increase in operating expenses was primarily due to non cash expenses.

Previous report

The net loss for the three months ended September 30, 2025 was $9.9 million as compared to a net loss of approximately $4.7 million for the three months ended September 30, 2024. The net loss for the nine months ended September 30, 2025 was $22.0 million as compared to a net loss of approximately $14.7 million for the nine months ended September 30, 2024. The increase in net loss is due to a non-cash loss on extinguishment of debt and non-cash operating expenses and offset by the non-cash decrease in amortization of debt discount.

Previous report

The Company did not meet all of its payroll obligations during the period from February to September 2025. As a result, employees were not paid for services rendered during that period. The unpaid wages have been fully accrued as liabilities in the accompanying financial statements.

Previous report

Interest expenses for the three months ended September 30, 2025 were $0.3 million and $0.8 million for the three months ended September 30, 2024. Interest expenses for the nine months ended September 30, 2025 were $1.6 million and $2.0 million for the nine months ended September 30, 2024.

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Liquidity and Capital Resources

Previous report

Due to our lack of capital, we have not generated any revenue since March 2025. In order to generate revenue, we require at least $2,000,000 of working capital in order to acquire inventory and re-commence minimal operations. This does not include our plans for our Water Assets or Chispo business plans which will require additional capital. Our lack of cash resources has prevented us from carrying on our commercialization activities. In addition, our lack of working capital has prevented us from marketing our products. See also “Item 1A - Risk Factors.”

Previous report

We have not generated any revenue since March 2025 due to our lack of capital. In August 2025, the Company issued convertible promissory notes with individuals in the aggregate principal amount of $424,560. 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. In September 2025 we also entered into an Equity Line of Credit Agreement which subject to certain conditions including registering the shares on a registration statement will allow 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. In November 2025, the Company borrowed $500,000 from two accredited investors and issued senior promissory notes with a combined original principal amount of $588,235.30, reflecting a 15% original issue discount. 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.

Previous report

We plan to fund our operations through third party and related party debt/advances, private placement of restricted securities and the issuance of stock in subsequent offerings until such a time as the business achieves profitability or a business combination may be achieved. However, there can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are favorable to us. Debt financing and equity 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. If we raise funds through collaborations, or other similar arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Previous report

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. Historically, we have funded operations primarily through the issuance of equity and debt securities. There is substantial doubt about our ability to continue as a going concern.

Previous report

In June 2025, we exchanged approximately $12.67 million of outstanding promissory notes and accrued interest for 126,710 shares of Series B 12% Convertible Preferred Stock. This transaction reduced outstanding debt, lowered interest expense, and improved our stockholders’ equity position. The Series B Preferred Stock accrues a 12% cumulative dividend and is convertible into common stock, subject to shareholder approval and an increase in authorized shares. This debt-to-equity conversion forms part of our broader plan to strengthen our balance sheet and regain compliance with NYSE American listing standards.

Previous report

Based on our current operating plan, existing cash resources will not be sufficient to fund operations over the next 12 months. Our future capital needs will depend on numerous factors, including our ability to raise capital, revenue growth, gross margin trends, operating expense levels, working capital requirements, and the timing and extent of capital expenditures. We are evaluating opportunities to raise additional capital through equity or debt financing and may seek further debt restructurings to improve liquidity and reduce financing costs.

Previous report

There can be no assurance that these plans will be successful. If we are unable to obtain adequate financing or generate positive cash flow from operations, we may need to further reduce operating expenses, curtail business development activities, sell assets, or pursue other strategic alternatives.

Previous report

In December 2020, Splash acquired the key assets, including intellectual property rights (the “IP”), of the Copa DI Vino single-serve wine company, a third party (“CdV”). On April 4, 2025 the Company entered into an intellectual property license agreement (the “License Agreement”) granting CdV an exclusive license to use the IP for sales of wine beverages and other products bearing the Copa di Vino brand name in the U.S.

Previous report

Under the License Agreement, CdV has the right, but not the obligation, to purchase the IP at fair market value, determined by an independent third party, during the period beginning January 4, 2026 and ending January 4, 2027. If CdV does not exercise its right to purchase the IP under the License Agreement, the exclusive license granted to CdV thereunder will continue for the life of the IP, as applicable.

Previous report

The Company has not marketed or sold the wine or other CdV products since April 2025.

Previous report

On April 4, 2025, the Company entered into a settlement agreement with CdV (the “Settlement Agreement”) under which the parties agreed to the settlement of two lawsuits brought by CdV against the Company in Oregon and Florida, and the Company agreed to pay CdV a total of $0.7 million with interest accruing at 12% per annum, with installment payments beginning on November 4, 2025 in monthly payments of $63,000 plus applicable accrued interest. The Settlement Agreement provides for certain events of default, the occurrence of which, subject to the Company’s right to cure within 15 days as to a payment default or 30 days with respect to other defaults, would entitle CdV to accelerate payment of the settlement amount, file suit against the Company and/or exercise its right to setoff against any funds or other property in CdV’s possession.