U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2024

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

For the transition period from _________to _________

Commission File Number 001-40471

SPLASH BEVERAGE GROUP, INC. 

(Exact name of registrant as specified in its charter)

1314 E Las Olas Blvd. Suite 221 

Fort Lauderdale, FL 33301

(Address of principal executive offices) (Zip code)

(954) 745-5815

(Registrant’s telephone number, includingarea code)

Not Applicable

(Former name, former address and former fiscal year,if changed since last report)

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

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-knownseasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes☒ No

Indicate by check mark if the registrant is not requiredto file reports pursuant to Section 13 or Section 15(d) of the Act. ☐Yes ☒ No

Indicate by check mark whether the registrant (i)has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirementsfor the past 90 days. ☒ Yes ☐No

Indicate by checkmark whether the registrant has submittedelectronically every Interactive Data File required to be submitted pursuant to rule 405 of Regulation S-T during the preceding 12 months(or for such shorter period that the registrant was required to submit such files). ☒Yes ☐ No

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

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

Indicate by check mark whether the registrant hasfiled a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reportingunder Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued itsaudit report. ☐

If securities are registered pursuant to Section 12(b)of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction ofan error to previously issued financial statements. ☐

Indicate by check mark whether any of those errorcorrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’sexecutive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is ashell company (as defined in rule 12b-2 of the Act). ☐ Yes ☒No

The aggregate market value of the Registrant’scommon equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last businessday of the Registrant’s most recently completed second quarter was $[*].0

On June 30, 2025, there were 1,899,876 shares of CommonStock issued and outstanding.  

SPLASH BEVERAGE GROUP, INC.

FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2024

TABLE OF CONTENTS

PART I

Except as otherwise indicated,references to “we”, “us”, “our”, “Splash”, “SBG” and the “Company”refer to Splash Beverage Group, Inc. and its wholly owned subsidiaries.

This AnnualReport on Form 10-K (this “Annual Report”) contains “forward-looking statements” Forward-looking statements reflectour current view about future events. When used in this Report, the words “anticipate,” “believe,” “estimate,”“expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions,as they relate to us or our management, identify forward-looking statements. Such statements include, but are not limited to, statementscontained in this Report relating to our business strategy, our future operating results and liquidity and capital resources outlook.Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other futureconditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes incircumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements.They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relyingon any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-lookingstatements include, without limitation, our ability to raise capital to fund continuing operations; our ability to protect our intellectualproperty rights; the impact of any infringement actions or other litigation brought against us; competition from other providers and products;our ability to develop and commercialize products and services; changes in government regulation; our ability to complete capital raisingtransactions; and other factors (including the risks contained in the section of this Annual Report entitled “Risk Factors”)relating to our industry, our operations and results of operations. Actual results may differ significantly from those anticipated, believed,estimated, expected, intended or planned.

Factorsor 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 ofthem. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, includingthe securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statementsto actual results.

Exceptas otherwise indicated, references to “we”, “us”, “our”, “Splash”, “SBG” andthe “Company” refer to Splash Beverage Group, Inc. and its wholly owned subsidiaries.

Item 1. Business.

Company Overview

Splash is a portfolio company managingmultiple brands across several growth segments within the consumer beverage industry. Splash has built organizational capabilities andan infrastructure enabling it to incubate and/or acquire brands with the intention of efficiently accelerating them to higher volume andsales revenue. The management team has proven capabilities in building consumer franchises and marketing and distributing multiple brandsof 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.

We believe the distribution landscapein the beverage industry is changing rapidly as tech-enabled e-commerce business models are thriving. Direct to consumer, office or homesolutions are projected to continue to gain traction in the future. Recognizing this opportunity Splash continues to shape its operatingmodel to be vertically integrated with our e-commerce platform, Qplash, which purchases local and regional brands for developing a directline of sales to boutique retail stores and consumers.

Splash’s wholly owned subsidiary, Splash Beverage Group II, Inc. was originallyincorporated in the State of Nevada under the name TapouT Beverages, Inc. for the purpose of acquiring the rights under a license agreementwith TapouT, LLC (Authentic Brands Group). In Q1 2024 the relationship between TapouT LLC and the Company was terminated.

In December 2020, Splash BeverageGroup Inc. purchased the key assets of the Copa DI Vino^® single serve wine company. 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 jointventure with SALT Naturally Flavored Tequila and Pulpoloco sangria that comes in a biodegradable can.

The Company’s leadershipunderstands the importance of infusing beverage brands with strong popular culture and lifestyle elements that drive trial, belief and,most importantly, repeat purchases.

Our management team led by RobertNistico has over 28 years of experience in all levels of the three-tier distribution system used in the beverage industry working withbrands such as Red Bull and companies such as Gallo Winery and Republic National Distributing Company (RNDC Texas). 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.Our Senior Vice President of Sales, James Allred, has over 25 years’ experience in the beverage industry, predominately with Anheuser-Busch.

Our Strategy

Our strategy is to combine thetraditional approach of manufacturing, distributing, and marketing of beverages, with early-stage brands that have a reasonable levelof pre-existing brand awareness and market presence, or have attributes that we believe to be purely innovative. We believe this allowsus to break through the clutter of numerous brand introductions and dilute risk. We apply this philosophy regardless of whether the brandis 100% owned or a joint venture.

For acquisition or joint ventureconsideration, we prefer to work with brands that already have one or more of the following in place:

We believe this platform modelprovides us with two paths to success: one, developing our wholly owned core brands and two, the ability to tap into high growth, early-stagebrands ready to scale. This platform allows us to limit risk, and significantly reduce development expenses while simultaneously increasingefficiencies for all brands in our portfolio.

Our management team has over 80years 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, MarleyBeverages), we believe our ability to break through the distribution and retail bottlenecks makes us an attractive joint venture partnerto many new brand owners.

Splash has the ability to fullyown a brand or be flexible to engage in business ventures structured with a revenue split, or an equity position.

The benefit to Splash in theseshared brand ownerships is the ability to avoid the development costs for new products. 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.

The Company also believes the distributionlandscape in the beverage category is changing rapidly. Tech-enabled business models are thriving and direct to consumer, office and homesolutions are projected to continue to gain traction as beverage alcohol regulations evolve. A core strategy for us is to optimize theearly success we’re seeing with the Qplash online platform, our consumer-packaged goods retail division and our first entry pointinto the growing e-commerce channel.

Products

During fiscal year 2024 we produced, distributed and marketed SALT Naturally FlavoredTequila (“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 descriptionof these products.

SALT Flavored Tequila

We oversee production, distribute,and market the following flavors under the brand name SALT Naturally Flavored Tequila:

Vodka, rum, and brown spirits haveexperienced significant growth when flavors are introduced, and we expect this growth of flavors to continue, as the tequila categorycontinues to rapidly expand.

SALT is currently being distributedby various Anheuser-Busch & Miller-Coors distributorships, and other distributors in multiple U.S. states. Additionally, SALT is forsale 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 betweenthe Company and SALT USA, LLC. All aspects of manufacturing, logistics, distribution and marketing are our responsibility.

TapouT License Agreement

We have the rights under a LicenseAgreement with ABG TapouT (the “License Agreement”) to produce, market, sell and distribute TapouT sports beverages in NorthAmerica (including US Territories and Military Bases), United Kingdom, Brazil, South Africa, Australia, Scandinavia, Peru, Colombia, Chileand Guatemala. The beverages covered by the License Agreement include sports drinks, energy drinks, energy shots, electrolyte chews, energybars, water, protein, and teas.

We pay a 6% royalty of net salesor a guaranteed minimum annual royalty of $660,000, whichever is greater. The License Agreement will expire on December 31, 2025, witha 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 promotefor sale our TapouT beverages and branded products. As part of the alliance, Splash commits to investing 2% of sales in marketing to theTapouT Performance Brand. TapouT provides marketing collateral for advertising and promotion and has influential relationships with selectcelebrities and athletic talent. TapouT agrees to use reasonable efforts to request its retained celebrities and/or athletes be presentat autograph signings, tradeshows and other similar events. In Q1 2024 the relationship between TapouT LLC and the Companywas terminated.  

Copa DI Vino^® Wine Group, Inc. (CdV)and Related Financing

On December 24, 2020, the Companyentered into an Asset Purchase Agreement with CdV, pursuant to which the Company purchased certain assets and assumed certain liabilitiesthat comprise the CdV business for a total purchase price of $5,980,000, payable in the combination of $2,000,000 in cash, a $2,000,000convertible promissory note to CdV and a variable number of shares of the Company’s common stock based on an attainment of revenuehurdles.

In conjunction with the acquisition,the Company also entered into a Revenue Loan and Security Agreement (the “Loan and Security Agreement”) by and among the Company,Robert Nistico, additional guarantor and each of the subsidiary guarantors from time-to-time party thereto (each a “Guarantor”,and, collectively, the “Guarantors”), and Decathlon Alpha IV, L.P. (the “Lender”). The Loan and Security Agreementprovided 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^® isthe leading producer of premium wine by the glass in the United States. The Copa DI Vino^® product line is highly innovativeas a ready to drink wine glass capable of going anywhere without the need for a bottle, corkscrew or glass. The company also has a growingkeg wine business for on-premises restaurants and bars.

Through our acquisition of CopaDI Vino^® Corporation, we are now able to offer nine varietals of wine: Pinot Grigio, Riesling, Merlot, Chardonnay, WhiteZinfandel, 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. The rights to utilize this packagingfor multiple categories were conveyed to SBG in conjunction with the distribution rights.

E-commerce

“Qplash” is a whollyowned division of Splash. It is our first entry point into the growing e-commerce channel. The division sells beverages online throughwww.qplash.com, and third-party storefronts such as Amazon.com. 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 deliverydirectly to each store.

During fiscal year 2024, Qplashoffered over 1,500 listings and has warehouses that ship from both California and Pennsylvania.

Our Competitive Strengths

We believe the following competitive strengthscontribute to the Company’s success and differentiate us from our competitors:

Manufacturing and Co-packing

We are responsible for the manufacturingof Copa DI Vino^® and SALT. The Copa DI Vino^® product line is bottled at our manufacturing facility in TheDalles, Oregon. Pulpoloco is imported from Spain as a finished product.

Although we are responsible formanufacturing SALT, we do not directly manufacture these products, but instead outsource such manufacturing to third party bottlers andcontract packers and distillers.

SALT products are manufacturedin Mexico, under separate arrangements. Our co-packaging arrangements are terminable upon request and do not obligate us to produce anyminimum quantities of products within specified periods.

We purchase concentrates, flavors,dietary ingredients, cans, bottles, caps, labels, and other components and ingredients for our beverage products from our suppliers, whichare delivered to our manufacturing operations and various third-party bottlers and co-packers. In some cases, certain common suppliesmay be purchased by our various third-party bottlers and co-packers. Depending on the product, the third-party bottlers or packers addfiltered water and/or other ingredients (including dietary ingredients) for the manufacture and packaging of the finished products intoour approved containers in accordance with our formulas.

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 selldirectly to retailers, but instead contract for local and regional distribution with independent distributors. These distributors typicallyhave geographic rights to distribute major beverage brands and call on every store in a given area such as major cities or regions. Ourmanagement team has extensive experience working within this channel and believes that we will be successful in building a strong networkof these distributors.

In addition to working with theseindependent distributors, we also have distribution arrangements with national retail accounts to distribute some of our products directlythrough their warehouse operations. Most notably, SBG executed a distribution agreement with AB-InBev, for distribution with their ownoperations, AB ONE. This provides SBG very effective distribution capabilities.

Intellectual Property

During the fiscal year ended December 31, 2023, wewere granted a trademark for Copa DI Vino^®. The United States Patent and Trademark Office issued the trademark on March12, 2024, providing our company exclusive rights to use the trademark in connection with the product categories specified in this Form10-K.

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 experiencedany work stoppages and consider our relations with our employees to be good.

Listing on the NYSE American

Our common stock and warrants arelisted on the NYSE American exchange under the ticker symbols “SBEV” and “SBEV WT,” respectively.

Recent Developments

On February 7, 2025, Julius Ivancsitsresigned as Chief Financial Officer of the Company. Mr. Ivancsits’s resignation as Chief Financial Officer was not because of anydisagreement with the Company on any matter relating to the Company’s operations, policies, or practices, including accounting principlesand practices. Mr. Ivancsits effective date was February 18, 2025 and the Company thanksMr. Ivancsits for his service.

Simultaneously, on February 7,2025, Dr. John Paglia also notified the Board of his intention to resign as an independent director of the Company and as a member ofeach committee of the Board on which he served, effective as of March 7, 2025. Dr. Paglia’s resignation was not the result of anydispute or disagreement with the Company or the Company’s Board of Directors on any matter relating to the operations, policiesor practices of the Company. Dr. Paglia will be assisting the Company with its search for a new Audit Chair. The Company is grateful forhis service and his assistance in the search for his replacement.

OnMarch 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 Directorsof the Company appointed Mr. Thomas Fore to serve as a Director of the Company, effective March 20, 2025.

Effective March 27, 2025, the Boardof Directors of the Company approved a reverse stock split of the Company’s authorized and issued and outstanding shares of CommonStock at a ratio of 1-for-40 (the “Reverse Stock Split”). The Company filed a Certificate of Change pursuant to Nevada RevisedStatutes Section 78.209 with the Secretary of State of the State of Nevada on March 26, 2025, to be effective March 27, 2025.

On April 7, 2025, NYSE AmericanLLC (“NYSE American”) publicly announced and provided a notice to the Company that NYSE Regulation has determined to commenceproceedings to delist the Company’s Common Stock and publicly trading Warrants to purchase one share of Common Stock, from NYSEAmerican. NYSE Regulation has determined that the Company is no longer suitable for listing pursuant to Section 1009(a) of the NYSE AmericanCompany Guide (the “Company Guide”) as the Company was unable to demonstrate that it had regained compliance with Sections1003(a)(i), (ii), and (iii) of the Company Guide by the end of the maximum 18-month compliance plan period, which expired on April 6,2025.

On April 16, 2025, the Company, receivedan official notice of noncompliance (the “NYSE American Notice”) from NYSE Regulation stating that the Company is not in compliancewith NYSE American continued listing standards (the “Filing Delinquency Notification”) due to the failure to timely file theCompany’s Form 10-K for the year ended December 31, 2024 (the “Delinquent Report”) by the filing due date of April 15,2025 (the “Filing Delinquency”).

On June 9, 2025, the Company fileda Certificate of Designation (the “Certificate of Designation” and, collectively with the Subscription Agreement, the “IssuanceDocuments”) classifying and designating the Series A Preferred Shares with the Secretary of State of Nevada, which Certificate ofDesignation became effective on June 9, 2025.

On June 10, 2025, the Company enteredinto a Subscription and Investment Representation Agreement (the “Subscription Agreement”) with Robert Nistico, the Company’sChief Executive Officer (the “Purchaser”), pursuant to which the Company agreed to issue and sell one thousand (1,000) SeriesA Preferred Shares, par value $0.001 per share (the “Series A Preferred Shares”), to the Purchaser for an aggregate purchaseprice of $1,000 (the “Purchase Price”). The sale closed on June 10, 2025.

Effective June 25, 2025, SplashBeverage Group, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) withaccredited investors pursuant to which the Company sold and issued a total of 650 shares of newly designated Series A-1 Convertible RedeemablePreferred Stock (the “Series A-1”), together with one-year Class A Warrants to purchase a total of 162,500 shares of commonstock (the “A Warrants”) and five-year Class B Warrants to purchase a total of 162,500 shares of common stock (the “BWarrants” and together with the A Warrants, the “Warrants”) for total gross proceeds of $650,000. The Company intendsto use the proceeds for working capital and general corporate purposes.

Effective June 25, 2025, the Companyentered into Securities Exchange Letter Agreements (the “Exchange Agreements”) with certain holders of promissory notes issuedby the Company pursuant to which such holders agreed to exchange a total of $12,671,434 of outstanding balance of such notes in exchangefor a total of 126,710 shares of the Company’s newly designated Series B Convertible Redeemable Preferred Stock (the “SeriesB”). The Company is engaging in the transactions contemplated by the Exchange Agreement in order to exchange debt for equity inan effort to regain compliance with the shareholder equity requirements of the NYSE American. This debt exchange is one key step in meetingthe NYSE American continued listing requirements. The other key step is filing its tardy Form 10-K for the year ended December 31, 2024and Form 10-Q for the three months ended March 31 2025.

On June 26, 2025, the Company enteredinto an Asset Purchase Agreement (the “Acquisition Agreement”) with Utopia Holdings Inc. as seller pursuant to which the Companyagreed 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”). On June 26, 2025,the Company issued such shares of Series C to the seller. Under the Acquisition Agreement, the seller agreed to deliver the Assets tothe Company, or $20 million in lieu thereof (the “Alternative Consideration”), and if the seller fails to deliver the Assetsor Alternative Consideration by December 31, 2025, the issuance of the Series C to the seller shall be cancelled.

Corporate Information

Splash was originally incorporated in the State of Nevada under the name TapouTBeverages, Inc., for the purpose of acquiring the rights under a license agreement with TapouT, LLC (Authentic Brands Group) for the rightto use the TapouT brand in connection with manufacturing and selling certain beverages. In Q1 2024 the relationship between TapouT LLCand the Company was terminated.

Splash executed a reverse mergerwith a fully reporting, public entity called Canfield Medical Supply, Inc. and became a wholly-owned subsidiary of Canfield Medical SupplyInc. on March 31, 2020. At the time of the merger Canfield’s state of incorporation was Colorado. At the time of the merger Canfield’scommon stock was quoted on the OTCQB.

On July 31, 2021, we changed ourname from Canfield Medical Supply, Inc. to Splash Beverage Group, Inc.

On June 11, 2021, our common stockand warrants to purchase common stock began trading on the NYSE American under the symbols “SBEV” and SBEV WT,” respectively.

On November 8, 2021, we changedour state of incorporation from Colorado to Nevada.

Our principal offices are locatedat 1314 E. Las Olas Blvd, Suite 221, Fort Lauderdale, Florida 33301. Our website address is www.splashbeveragegroup.com. We havenot incorporated by reference into this Annual Report on Form 10-K the information that can be assessed through our website and you shouldnot consider it to be part of this Annual Report on Form 10-K.

Available Information

We file annual, quarterly, and current reports, proxystatements and other information with the U.S. Securities Exchange Commission (the “SEC”). These filings are available tothe public through the SEC’s website at http://www.sec.gov. All statements made in any of our securities filings, including allforward-looking statements or information, are made as of the date of the document in which the statement is included unless otherwisespecified, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to doso by law.

Item 1A. Risk Factors.

You should carefully consider therisks described below as well as other information provided to you in this document, including information in the section of this documententitled “Cautionary Note Concerning Forward Looking Statements.” If any of the following risks actually occur, the Company’sbusiness, financial condition or results of operations could be materially adversely affected, the value of the Company’s CommonStock could decline, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

Risks Related to our Business

Our auditors have included an explanatory paragraphin their opinion regarding our ability to continue as a going concern. If we are unable to continue as a going concern, our securitieswill have little or no value.

Rose, Snyder & Jacobs LLP,our independent registered public accounting firm for the fiscal year ended December 31, 2024, has included an explanatory paragraph intheir opinion that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2024, indicatingthat our current liquidity position raises substantial doubt about our ability to continue as a going concern. If we are unable to improveour liquidity position, we may not be able to continue as a going concern.

We have sustained recurringlosses and we have had working capital and stockholders’ equity deficits. These prior losses and expected future losses havehad, and will continue to have, an adverse effect on our financial condition. In addition, continued operations and our ability tocontinue as a going concern may be dependent on our ability to obtain additional financing in the near future and thereafter, andthere are no assurances that such financing will be available to us at all or will be available in sufficient amounts or onreasonable terms. Our financial statements do not include any adjustments that may result from the outcome of this uncertainty. Ifwe are unable to generate additional funds in the future through sales of our products, financing or from other sources ortransactions, we will exhaust our resources and will be unable to continue operations. If we cannot continue as a going concern, ourshareholders would likely lose most or all of their investment in us.

Management recognizes that it maybe required to obtain additional resources via issuances of indebtedness or equity to successfully execute its business plans. No assurancescan be given that management will be successful in raising additional capital, if needed, or on acceptable terms. These conditions raisesubstantial doubt about the Company’s ability to continue as a going concern for the next 12 months. These financial statementsdo not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilitiesthat might be necessary should the Company be unable to continue as a going concern.

Material weaknesses in our internalcontrol over financial reporting may cause us to fail to timely and accurately report our financial results or result ina material misstatement of our consolidated financial statements.

A significant deficiencyand material weakness exists over our financial reporting. We continue to implement and evaluate theeffectiveness of additional policies and procedures to address identified control deficiencies in the design and operation ofour internal control over financial reporting, as further described in Item 9A of this Annual Report(“Controls and Procedures”). A material weakness is a deficiency, or a combination of deficiencies,in internal control over financial reporting such that there is a reasonable possibility that a material misstatement ofour consolidated financial statements will not be prevented or detected on a timely basis. Management identified a material weaknessin the Company’s internal controls related to dedicated services billing and revenue recognition, and has taken actions in2025 to have the material weakness remediated. To note, the significant deficiency and material weakness over our financialreporting or the discovery of additional significant deficiencies or a material weakness and their possible effect on our results,could have material and adverse effect on our stock price.

We have experienced recurring losses from operationsand negative cash flows from operating activities and anticipate that we will continue to incur significant operating losses in the future.

We have experienced recurring lossesfrom operations and negative cash flows from operating activities. We expect to continue to incur significant expenses related to ourongoing operations and generate operating losses for the foreseeable future. The size of our losses will depend, in part, on the rateof future expenditures, our ability to execute on our acquisition strategy and our ability to generate revenues. We incurred a net lossof $23.8 million   for the year ended December 31, 2024. Our accumulated deficit increased to $155.8million as of December 31, 2024, compared to the prior year’s deficit of $133.3million. 

We may encounter unforeseen expenses,difficulties, complications, delays, and other unknown factors that may adversely affect our financial condition. Our prior losses andexpected future losses have had, and will continue to have, an adverse effect on our financial condition. If our products do not achievesufficient market acceptance and our revenues do not increase significantly, we may never become profitable. Even if we achieve profitabilityin the future, we may not be able to sustain profitability in subsequent periods. Our failure to become and remain profitable would decreasethe value of our company and could impair our ability to raise capital, expand our business, diversify our product offerings or continueour operations. A decline in the value of our company could cause you to lose all or part of your investment.

If we are not able to successfully execute onour future operating plans and objectives, our financial condition and results of operation may be materially adversely affected, andwe may not be able to continue as a going concern.

It is important that we meet oursales goals and increase sales going forward as our operating plan already reflects prior significant cost containment measures and maymake it difficult to achieve top-line growth if further significant reductions become necessary. If we do not meet our sales goals, ouravailable cash and working capital will decrease and our financial condition will be negatively impacted.

In order to be successful, we believethat we must, among other things:

We may not be able to meetthese objectives, which could have a material adverse effect on our results of operations. We have incurred significant operatingexpenses in the past and may do so again in the future and, as a result, will need to increase revenues in order to improve ourresults of operations. Our ability to increase sales will depend primarily on success in expanding our current markets, improvingour distribution base, entering into Direct-To-Retail (DTR) arrangements with national accounts, and introducing new brands,products or product extensions to the market. Our ability to successfully enter new distribution areas and obtain national accountswill, in turn, depend on various factors, many of which are beyond our control, including, but not limited to, the continued demandfor our brands and products in target markets, the ability to price our products at competitive levels, available positions withinthe retailer’s planograms, the ability to establish and maintain relationships with distributors in each geographic area ofdistribution and the ability in the future to create, develop and successfully introduce one or more new brands, products, andproduct extensions.

Ourstrategic initiatives including acquisitions and divestitures may not be successful and may divert our management’s attention awayfrom operations and could create general customer uncertainty.

Ourgrowth strategy is based in part on growth through strategic initiatives including both acquisitions and divestitures, which poses a numberof risks. We may not be successful in identifying appropriate acquisition candidates, achieving targeted values as part of a disposition,consummating an acquisition or divestiture on satisfactory terms, integrating any newly acquired or expanded business with our currentoperations, or separating a divested business or commingled operation effectively. We may issue additional equity, incur long-term orshort-term indebtedness, spend cash or use a combination of these for all or part of the consideration paid in future acquisitions orexpansion of our operations, which may not be available to us on terms we find advantageous or acceptable, if at all. In addition, subjectto any requirements in the agreements governing our outstanding indebtedness, we may have significant discretion in how we employ theconsideration received in a divestiture and our management may not apply such consideration in a way that is ultimately accretive to ourbusiness.

The execution of our strategicinitiatives could entail repositioning or similar actions that in turn require us to record impairments, restructuring and other charges.Any such charges would reduce our earnings. We cannot guarantee that any future business acquisitions or divestitures will be pursuedor that any acquisitions or divestitures that are pursued will be consummated.

Additionally, any acquisitionor disposition (including the successful integration and separation of operations, products and personnel) may place a significant burdenon our management and other internal resources. The diversion of management’s attention, and any difficulties encountered in sucha process, could harm our business, financial condition, and operating results. Moreover, our customers may, in response to the announcementor consummation of a transaction, delay or defer purchasing decisions. If our customers delay or defer purchasing decisions, our revenuescould materially decline or any anticipated increases in revenue could be lower than expected.

Failure to Successfully Integrate AcquiredBusinesses, Its Products and Other Assets into the Company, or If Integrated, Failure to Further the Company’s BusinessStrategy, May Result in the Company’s Inability to Realize Any Benefit from Such Acquisition.

The consummation and integration of any acquiredbusiness, product or other assets into the Company may be complex and time-consuming and, if such businesses and assets are notsuccessfully integrated, the Company may not achieve the anticipated benefits, cost-savings or growth opportunities. Furthermore,these acquisitions and other arrangements, even if successfully integrated, may fail to further the Company’s business strategyas anticipated, expose the Company to increased competition or other challenges with respect to the Company’s productsor geographic markets, and expose the Company to additional liabilities associated with an acquired business, technologyor other asset or arrangement. When the Company acquires cannabis businesses, it may obtain the rights to applications for licensesas well as licenses; however, the procurement of such applications for licenses and licenses generally will be subject to governmentaland regulatory approval. There are no guarantees that the Company will successfully consummate such acquisitions, and even if the Companyconsummates such acquisitions, the procurement of applications for licenses may never result in the grant of a license by any state orlocal governmental or regulatory agency and the transfer of any rights to licenses may never be approved by the applicable state and/orlocal governmental or regulatory agency.

Demand for our productsmay be adversely affected by changes in consumer preferences or any inability on our part to innovate, market or distribute our productseffectively, and any significant reduction in demand could adversely affect our business, financial condition or results of operations.

Our beverage portfolio is comprisedof a number of unique brands with reputations and consumer imagery that have been built over time. Our investments in marketing as wellas our strong commitment to product quality are intended to have a favorable impact on brand image and consumer preferences. If we donot adequately anticipate and react to changing demographics, consumer and economic trends, health concerns and product preferences, ourfinancial results could be adversely affected.

Additionally, failure to introducenew brands, products or product extensions into the marketplace as current ones mature and to meet the changing preferences of consumerscould prevent us from gaining market share and achieving long-term profitability. Product lifecycles can vary and consumer preferencesand loyalties change over time. Although we try to anticipate these shifts and innovate new products to introduce to our consumers, wemay not succeed. Consumer preferences also are affected by factors other than taste, such as health and nutrition considerations and obesityconcerns, shifting consumer needs, changes in consumer lifestyles, increased consumer information and competitive product and pricingpressures. Sales of our products may be adversely affected by negative publicity associated with these issues. If we do not adequatelyanticipate or adjust to respond to these and other changes in consumer preferences, we may not be able to maintain and grow our brandimage and our sales may be adversely affected.

Volatility in the price or availability of theinputs we depend on, including raw materials, packaging, energy and labor, could adversely impact our financial results.

The principal raw materials weuse include glass bottles, aluminum cans, PET, fiber-board, labels and cardboard cartons, flavorings and sweeteners. These component andingredient costs are subject to fluctuation. If there were to be substantial increases in the prices of our ingredients, raw materialsand packaging materials, to the extent that they cannot be recouped through increases in the prices of finished beverage products, wouldincrease our operating costs and could reduce our profitability. If our supply of these raw materials is impaired or if prices increasesignificantly, it could affect the affordability of our products and reduce sales.

If we are unable to secure sufficientingredients or raw materials including glass, sugar, and other key supplies, we might not be able to satisfy demand on a short-term basis.

International trade disputes, including U.S.trade tariffs and retaliatory tariffs, could adversely impact our business.

International trade disputes, includingthreatened or implemented tariffs by the United States and threatened or implemented tariffs by foreign countries in retaliation, couldadversely impact our business. Many of our tenants sell imported goods and tariffs or other trade restrictions could increase costs forthese tenants. To the extent our tenants are unable to pass these costs on to their customers, our tenants could be adversely impacted.In addition, international trade disputes, including those related to tariffs, could result in inflationary pressures that directlyimpact our costs, such as costs for steel, lumber and other materials applicable to our redevelopment projects. Trade disputes could alsoadversely impact global supply chains which could further increase costs for us and our tenants or delay delivery of key inventories andsupplies.

Significant political, trade, regulatory developments,and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations.

Significant political, trade, orregulatory developments in the jurisdictions in which we sell our products, such as those stemming from the change in U.S. federal administration,are difficult to predict and may have a material adverse effect on us. Similarly, changes in U.S. federal policy that affect the geopoliticallandscape could give rise to circumstances outside our control that could have negative impacts on our business operations. For example,during the prior Trump administration, increased tariffs were implemented on goods imported into the U.S., particularly from China,Canada, and Mexico. On February 1, 2025, the U.S. imposed a 25% tariff on imports from Canada and Mexico, which were subsequently suspendedfor a period of one month, and a 10% additional tariff on imports from China. Historically, tariffs have led to increased trade and politicaltensions, between not only the U.S. and China, but also between the U.S. and other countries in the international community. In responseto tariffs, other countries have implemented retaliatory tariffs on U.S. goods. Political tensions as a result of trade policies couldreduce trade volume, investment, technological exchange, and other economic activities between major international economies, resultingin a material adverse effect on global economic conditions and the stability of global financial markets. Any changes in political, trade,regulatory, and economic conditions, including, but not limited to, U.S. and China trade policies, could have a material adverse effecton our financial condition or results of operations.

Regulatory changes or actions may alter thenature of an investment in us or restrict the use of cryptocurrencies in a manner that adversely affects our business, prospects, or operations.

As cryptocurrencies have grown in both popularityand market size, governments around the world have reacted differently to cryptocurrencies; certain governments have deemed them illegal,and others have allowed their use and trade without restriction, while some jurisdictions, such as the United States, subject the mining,ownership and exchange of cryptocurrencies to extensive, and in some cases overlapping, unclear and evolving regulatory requirements.

In January 2025, U.S. President Donald Trumpissued an executive order forming a presidential working group to establish a clear regulatory framework for digital assets, and leadersin both houses of the U.S. Congress have announced a bicameral working group with the objective of passing legislation to provide regulatoryclarity for the industry. Committees in both houses of the U.S. Congress have held hearings to ensure fair access to financial services,including for companies operating in the digital asset space. Additionally, President Trump and members of the U.S. Congress announcedthat they are studying the possibility of creating a national strategic digital asset reserve to include Bitcoin, and at least twelvestates have introduced legislation to create strategic Bitcoin reserves.

While these ongoing regulatory developments appearto be positive, and we anticipate greater regulatory certainty in the future, given the difficulty of predicting the outcomes of ongoingand future regulatory actions and legislative developments, it is possible that future developments could have a material adverse effecton our business, prospects, or operations.

Our business, operations, financial position and timelines, could be materially adversely affected by the continuing military action in Ukraine andthe war between Israel and Hamas.

As a result of the military action commenced in February2022 by the Russian Federation and Belarus in Ukraine and the war between Israel and Hamas commenced in October 2023, and related economicsanctions imposed or that may in the future be imposed by certain governments, our financial position and operations may be materiallyand adversely affected. As our ability to continue to operate will be dependent on raising debt and equity finance, any adverse impactto those markets as a result of these conflicts, including due to increased market volatility, decreased availability in third-party financingand/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. The extent of any potential impact is not yet determinable, however.

Changes in government regulation or failureto comply with existing regulations could adversely affect our business, financial condition and results of operations.

Our business and properties aresubject to various federal, state and local laws and regulations, including those governing the production, packaging, quality, labelingand distribution of beverage products. In addition, various governmental agencies have enacted or are considering additional taxes onsoft drinks and other sweetened beverages. Changes in existing laws or regulations could require material expenses and negatively affectour financial results through lower sales or higher costs.

We compete in an industry that is brand-conscious,so brand name recognition and acceptance of our products are critical to our success.

Our business is dependent uponawareness and market acceptance of our products and brands by our target markets. In addition, our business depends on acceptance by ourindependent distributors and retailers of our brands as beverage brands that have the potential to provide incremental sales growth. Ifwe are not successful in the revitalization and growth of our brand and product offerings, we may not achieve and maintain satisfactorylevels of acceptance by independent distributors and retail consumers. Any failure of our brand to maintain or increase acceptance ormarket penetration would likely have a material adverse effect on our revenues and financial results.

Our brands and brand images are keys to ourbusiness and any inability to maintain a positive brand image could have a material adverse effect on our results of operations.

Our success depends on our abilityto maintain brand image for our existing products and effectively build up brand image for new products and brand extensions. We cannotpredict whether our advertising, marketing and promotional programs will have the desired impact on our products’ branding and onconsumer preferences. In addition, negative public relations and product quality issues, whether real or imagined, could tarnish our reputationand image of the affected brands and could cause consumers to choose other products. Our brand image can also be adversely affected byunfavorable reports, studies and articles, litigation, or regulatory or other governmental action, whether involving our products or thoseof our competitors.

Competition from traditional and large, well-financednon-alcoholic and alcoholic beverage manufacturers may adversely affect our distribution relationships and may hinder development of ourexisting markets, as well as prevent us from expanding our markets.

The beverage industry is highlycompetitive. We compete with other beverage companies not only for consumer acceptance but also for shelf space in retail outlets andfor marketing focus by our distributors, all of whom also distribute other beverage brands. Our products compete with all non-alcoholicand alcoholic beverages, most of which are marketed by companies with substantially greater financial resources than ours. Some of thesecompetitors are placing severe pressure on independent distributors not to carry competitive brands such as ours. We also compete withregional 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 ourearnings, market share and volume growth. If, due to such pressure or other competitive threats, we are unable to sufficiently maintainor develop our distribution channels, we may be unable to achieve our current revenue and financial targets. Competition, particularlyfrom companies with greater financial and marketing resources than ours, could have a material adverse effect on our existing markets,as well as on our ability to expand the market for our products.

Legislative or regulatory changes that affectour products, including new taxes, could reduce demand for products or increase our costs.

Taxes imposed on the sale of certainof our products by federal, state and local governments in the United States, or other countries in which we operate could cause consumersto shift away from purchasing our beverages. Several municipalities in the United States have implemented or are considering implementingtaxes on the sale of certain “sugared” beverages, including non-diet soft drinks, fruit drinks, teas and flavored waters tohelp fund various initiatives. These taxes could materially affect our business and financial results.

Our reliance on distributors, retailers andbrokers could affect our ability to efficiently and profitably distribute and market our products, maintain our existing markets and expandour business into other geographic markets.

Our ability to maintain and expandour existing markets for our products, and to establish markets in new geographic distribution areas, is dependent on our ability to establishand maintain successful relationships with reliable distributors, retailers and brokers strategically positioned to serve those areas.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 thedistributors, retailers and brokers of this network. There is a risk that the mentioned entities may not adequately perform their functionswithin the network by, without limitation, failing to distribute to sufficient retailers or positioning our products in localities thatmay not be receptive to our product. Our ability to incentivize and motivate distributors to manage and sell our products is affectedby competition from other beverage companies, some of which may have greater resources than we do. 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. Furthermore,such third-parties’ financial position or market share may deteriorate, which could adversely affect our distribution, marketingand sales activities.

Our ability to maintain and expandour distribution network and attract additional distributors, retailers and brokers will depend on a number of factors, some of whichare outside our control. Some of these factors include:

We may not be able to successfullymanage all or any of these factors in any of our current or prospective geographic areas of distribution. Our inability to achieve successwith regards to any of these factors in a geographic distribution area will have a material adverse effect on our relationships in thatparticular geographic area, thus limiting our ability to maintain or expand our market, which will likely adversely affect our revenuesand financial results.

It is difficult to predict the timing and amountof our sales because our distributors are not required to place minimum orders with us.

Our independent distributors andnational accounts are not required to place minimum monthly or annual orders for our products. In order to reduce their inventory costs,independent distributors typically order products from us on a “just in time” basis in quantities and at such times basedon the demand for the products in a particular distribution area. Accordingly, we cannot predict the timing or quantity of purchases byany of our independent distributors or whether any of our distributors will continue to purchase products from us in the same frequenciesand volumes as they may have done in the past. Additionally, our larger distributors and national partners may make orders that are largerthan we have historically been required to fill. Shortages in inventory levels, supply of raw materials or other key supplies could negativelyaffect us.

If we do not adequately manage our inventorylevels, our operating results could be adversely affected.

We need to maintain adequate inventorylevels to be able to deliver products to distributors on a timely basis. Our inventory supply depends on our ability to correctly estimatedemand for our products. Our ability to estimate demand for our products is imprecise, particularly for new products, seasonal promotionsand 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 we overestimate distributor or retailer demand for our products, we mayend up with too much inventory, resulting in higher storage costs, increased trade spend and the risk of inventory spoilage. If we failto manage our inventory to meet demand, we could damage our relationships with our distributors and retailers and could delay or losesales opportunities, which would unfavorably impact our future sales and adversely affect our operating results. In addition, if the inventoryof our products held by our distributors and retailers is too high, they will not place orders for additional products, which would alsounfavorably impact our sales and adversely affect our operating results.

If we fail to maintain relationships with ourindependent contract manufacturers, our business could be harmed.

We do not manufacture SALT Tequila, Pulpoloco Sangria but instead outsourcethe manufacturing process to third-party bottlers and independent contract manufacturers (co-packers). We do not own the plants or themajority of the equipment required to manufacture and package these brands. Our ability to maintain effective relationships with contractmanufacturers and other third parties for the production and delivery of our beverage products in a particular geographic distributionarea is important to the success of our operations within each distribution area. We may not be able to maintain our relationships withcurrent contract manufacturers or establish satisfactory relationships with new or replacement contract manufacturers, whether in existingor new geographic distribution areas. The failure to establish and maintain effective relationships with contract manufacturers for adistribution area could increase our manufacturing costs and thereby materially reduce gross profits from the sale of our products inthat area. Poor relations with any of our contract manufacturers could adversely affect the amount and timing of product delivered toour distributors for resale, which would in turn adversely affect our revenues and financial condition. In addition, our agreements withour 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 regulationsmay have an adverse impact on our gross margin.

Over the past few years, volatilityin the global oil markets has resulted in variable fuel prices, which many shipping companies have passed on to their customers by wayof higher base pricing and increased fuel surcharges. If fuel prices increase, we expect to experience higher shipping rates and fuelsurcharges, as well as energy surcharges on our raw materials. It is hard to predict what will happen in the fuel markets in 2025 andbeyond. Due to the price sensitivity of our products, we may not always be able to pass such increases on to our customers.

Disruption within our supply chain, contractmanufacturing or distribution channels could have an adverse effect on our business, financial condition and results of operations.

Our ability, through our suppliers,business partners, contract manufacturers, independent distributors and retailers, to make, move and sell products is critical to oursuccess. Damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fireor 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. Failure to take adequate steps to protect against or mitigate the likelihood or potentialimpact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition andresults of operations.

We rely upon our ongoing relationships withour key flavor suppliers. If we are unable to source our flavors on acceptable terms from our key suppliers, we could suffer disruptionsin our business.

We currently purchase our flavorconcentrate 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. Although we have the exclusive rights toflavor 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 exactflavors or concentrates from alternative suppliers on short notice. If we have to replace a flavor supplier, we could experience disruptionsin our ability to deliver products to our customers, which could have a material adverse effect on our results of operations.

If we are unable to attract and retain key personnel,our efficiency and operations would be adversely affected; in addition, management turnover causes uncertainties and could harm our business.

Our success depends on our abilityto attract and retain highly qualified employees in such areas as finance, sales, marketing and product development. We compete to hirenew employees, and, in some cases, must train them and develop their skills and competencies. We may not be able to provide our employeeswith competitive salaries, and our operating results could be adversely affected by increased costs due to increased competition for employees,higher employee turnover or increased employee benefit costs.

Changes to operations, policiesand procedures, which can often occur with the appointment of new personnel, can create uncertainty, may negatively impact our abilityto execute quickly and effectively, and may ultimately be unsuccessful. In addition, management transition periods are often difficultas the new employees gain detailed knowledge of our operations, and friction can result from changes in strategy and management style.Management turnover inherently causes some loss of institutional knowledge, which can negatively affect strategy and execution.

Further, to the extent we experienceadditional management turnover, our operations, financial condition and employee morale could be negatively impacted. In addition, competitionfor top management is high and it may take months to find a candidate that meets our requirements. If we are unable to attract and retainqualified management personnel, our business could suffer.

If we fail to protect our trademarks and tradesecrets, we may be unable to successfully market our products and compete effectively.

We rely on a combination of trademarkand trade secrecy laws, confidentiality procedures and contractual provisions to protect our intellectual property rights. Failure toprotect 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 tradesecrets, could result in the expenditure of significant financial and managerial resources. We regard our intellectual property, particularlyour trademarks and trade secrets to be of considerable value and importance to our business and our success, and we actively pursue theregistration of our trademarks in the United States and internationally. However, the steps taken by us to protect these proprietary rightsmay not be adequate and may not prevent third parties from infringing or misappropriating our trademarks, trade secrets or similar proprietaryrights. In addition, other parties may seek to assert infringement claims against us, and we may have to pursue litigation against otherparties to assert our rights. Any such claim or litigation could be costly. In addition, any event that would jeopardize our proprietaryrights 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.

As part of the licensing strategyof our brands, we enter into licensing agreements under which we grant our licensing partners certain rights to use our trademarks andother designs. Although our agreements require that the use of our trademarks and designs is subject to our control and approval, anybreach of these provisions, or any other action by any of our licensing partners that is harmful to our brands, goodwill and overall image,could have a material adverse impact on our business.

If we encounter product recalls or other productquality issues, our business may suffer.

Product quality issues, real orimagined, or allegations of product contamination, even when false or unfounded, could tarnish our image and could cause consumers tochoose other 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 profitabilityand could negatively affect brand image.

Our business is subject to many regulations and noncompliance iscostly.

The production, marketing and saleof our beverages, including contents, labels, caps and containers, are subject to the rules and regulations of various federal, provincial,state and local health agencies. 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 financialcondition and results of operations. Similarly, any adverse publicity associated with any noncompliance may damage our reputation andour ability to successfully market our products. Furthermore, the rules and regulations are subject to change from time to time and whilewe closely monitor developments in this area, we cannot anticipate whether changes in these rules and regulations will impact our businessadversely. Additional or revised regulatory requirements, whether labeling, environmental, tax or otherwise, could have a material adverseeffect on our financial condition and results of operations.

Significant additional labeling or warning requirementsmay inhibit sales of affected products.

Various jurisdictions may seekto adopt significant additional product labeling or warning requirements relating to the chemical content or perceived adverse healthconsequences of certain of our products. These types of requirements, if they become applicable to one or more of our products under currentor future environmental or health laws or regulations, may inhibit sales of such products. In California, a law requires that a specificwarning appear on any product that contains a component listed by the state as having been found to cause cancer or birth defects. Thislaw recognizes no generally applicable quantitative thresholds below which a warning is not required. If a component found in one of ourproducts is added to the list, or if the increasing sensitivity of detection methodology that may become available under this law andrelated regulations as they currently exist, or as they may be amended, results in the detection of an infinitesimal quantity of a listedsubstance in one of our beverages produced for sale in California, the resulting warning requirements or adverse publicity could affectour sales.

Litigation or legal could expose us to significantliabilities and damage our reputation.

We may become party to litigationclaims and legal proceedings. Litigation involves significant risks, uncertainties and costs, including distraction of management attentionaway from our business operations. We evaluate litigation claims and legal proceedings to assess the likelihood of unfavorable outcomesand to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we establish reserves and disclosethe relevant litigation claims or legal proceedings, as appropriate. These assessments and estimates are based on the information availableto management at the time and involve a significant amount of management judgment. Actual outcomes or losses may differ materially fromthose envisioned by our current assessments and estimates. Our policies and procedures require strict compliance by our employees andagents with all U.S. and local laws and regulations applicable to our business operations, including those prohibiting improper paymentsto government officials. Nonetheless, our policies and procedures may not ensure full compliance by our employees and agents with allapplicable legal requirements. Improper conduct by our employees or agents could damage our reputation or lead to litigation or legalproceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as disgorgement of profits.

Additionally, there has been publicattention 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. We could be exposed to lawsuitsrelating to product liability or marketing or sales practices with respect to our alcoholic products. Adverse developments in lawsuitsconcerning these types of matters or a significant decline in the social acceptability of beverage alcohol products that may result fromlawsuits could have a material adverse effect on our business, liquidity, financial condition and results of operations.

We are subject to risks inherent in sales ofproducts in international markets.

Our operations outside of the UnitedStates, contribute to our revenue and profitability, and we believe that developing and emerging markets could present future growth opportunitiesfor us. However, there can be no assurance that existing or new products that we manufacture, distribute or sell will be accepted or besuccessful in any particular foreign market, due to local or global competition, product price, cultural differences, and consumer preferencesor otherwise. There are many factors that could adversely affect demand for our products in foreign markets, including our inability toattract 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 increasedlabeling, product or production requirements, or other legal restrictions; restrictions on the import or export of our products or ingredientsor substances used in our products; inflationary currency, devaluation or fluctuation; increased costs of doing business due to compliancewith complex foreign and U.S. laws and regulations. If we are unable to effectively operate or manage the risks associated with operatingin international markets, our business, financial condition or results of operations could be adversely affected.

Water scarcity and poor quality could negatively impact our costsand capacity.

Water is a main ingredient in substantiallyall of our products, is vital to the production of the agricultural ingredients on which our business relies and is needed in our manufacturingprocess. It also is critical to the prosperity of the communities we serve. Water is a limited resource in many parts of the world, facingunprecedented challenges from overexploitation, increasing demand for food and other consumer and industrial products whose manufacturingprocesses require water, increasing pollution and emerging awareness of potential contaminants, poor management, lack of physical or financialaccess to water, sociopolitical tensions due to lack of public infrastructure in certain areas of the world and the effects of climatechange. As the demand for water continues to increase around the world, and as water becomes scarcer and the quality of available waterdeteriorates, we may incur higher costs or face capacity constraints and the possibility of reputational damage, which could adverselyaffect our profitability or net operating revenues in the long run.

Fluctuations in quantity and quality of grapesupply could adversely affect our business.

A shortage in the supply of qualitygrapes may result from a variety of factors that determine the quality and quantity of our grape supply, including weather conditions,pruning methods, diseases and pests, the ability to buy grapes on long and short-term contracts and the number of vines producing grapes.Any shortage in grape production could cause a reduction in the amount of wine we are able to produce, which could reduce sales and adverselyimpact our results from operations. Factors that reduce the quantity of our grapes may also reduce their quality, which in turn couldreduce the quality or amount of wine we produce. Deterioration in the quality of our wines could harm our brand name, reduce sales andadversely impact our business and results of operations.

Contamination of our wines could harm our business.

We are subject to certain hazardsand product liability risks, such as potential contamination, through tampering or otherwise, of ingredients or products. Contaminationof any of our wines could force us to destroy wine held in inventory and could cause the need for a product recall, which could significantlydamage our reputation for product quality. We maintain insurance against certain of these kinds of risks, and others, under various insurancepolicies. However, the insurance may not be adequate or may not continue to be available at a price or on terms that are satisfactoryto us and this insurance may not be adequate to cover any resulting liability.

Our business and operations would be adverselyimpacted in the event of a failure or interruption of our information technology infrastructure or as a result of a cybersecurity attack.

The proper functioning of our owninformation technology (IT) infrastructure is critical to the efficient operation and management of our business. We may not have thenecessary financial resources to update and maintain our IT infrastructure, and any failure or interruption of our IT system could adverselyimpact our operations. In addition, our IT is vulnerable to cyberattacks, computer viruses, worms and other malicious software programs,physical and electronic break-ins, sabotage and similar disruptions from unauthorized tampering with our computer systems. We believethat we have adopted appropriate measures to mitigate potential risks to our technology infrastructure and our operations from these IT-relatedand other potential disruptions. 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 impactson our operations or ability to provide products to our customers, the compromising of confidential or personal information, destructionor corruption of data, security breaches, other manipulation or improper use of our systems and networks, financial losses from remedialactions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect onour cash flows, competitive position, financial condition or results of operations.

If we fail to comply with personal data protection and privacy laws,we could be subject to adverse publicity, government enforcement actions and/or private litigation, which could negatively affect ourbusiness and operating results.

In the ordinary course of our business,we receive, process, transmit and store information relating to identifiable individuals (“personal data”), primarily employees,former employees and consumers with whom we interact. As a result, we are subject to various U.S. federal and state and foreign laws andregulations relating to personal data. These laws have been subject to frequent changes, and new legislation in this area may be enactedin other jurisdictions at any time. These laws impose operational requirements for companies receiving or processing personal data, andmany provide for significant penalties for noncompliance. These requirements with respect to personal data have subjected and may continuein the future to subject the Company to, among other things, additional costs and expenses and have required and may in the future requirecostly changes to our business practices and information security systems, policies, procedures and practices. Our security controls overpersonal data, the training of employees and vendors on data privacy and data security, and the policies, procedures and practices weimplemented or may implement in the future may not prevent the improper disclosure of personal data by us or the third-party service providersand vendors whose technology, systems and services we use in connection with the receipt, storage and transmission of personal data. Unauthorizedaccess or improper disclosure of personal data in violation of personal data protection or privacy laws could harm our reputation, causeloss of consumer confidence, subject us to regulatory enforcement actions (including fines), and result in private litigation againstus, which could result in loss of revenue, increased costs, liability for monetary damages, fines and/or criminal prosecution, all ofwhich could negatively affect our business and operating results.

If our third-party service providers and businesspartners do not satisfactorily fulfill their commitments and responsibilities, our financial results could suffer.

In the conduct of our business,we rely on relationships with third parties, including cloud data storage and other information technology service providers, suppliers,distributors, contractors, joint venture partners and other external business partners, for certain functions or for services in supportof key portions of our operations. These third-party service providers and business partners are subject to similar risks as we are relatingto cybersecurity, privacy violations, business interruption, and systems and employee failures, and are subject to legal, regulatory andmarket risks of their own. Our third-party service providers and business partners may not fulfill their respective commitments and responsibilitiesin a timely manner and in accordance with the agreed-upon terms. In addition, while we have procedures in place for selecting and managingour relationships with third-party service providers and other business partners, we do not have control over their business operationsor governance and compliance systems, practices and procedures, which increases our financial, legal, reputational and operational risk.If we are unable to effectively manage our third-party relationships, or for any reason our third-party service providers or businesspartners fail to satisfactorily fulfill their commitments and responsibilities, our financial results could suffer.

Our results of operations may fluctuate fromquarter to quarter for many reasons, including seasonality.

Our sales are seasonal, and weexperience fluctuations in quarterly results as a result of many factors. Companies similar to ours have historically generated a greaterpercentage of our revenues during the warm weather months of April through September. Timing of customer purchases will vary each yearand sales can be expected to shift from one quarter to another. As a result, management believes that period-to-period comparisons ofresults of operations are not necessarily meaningful and should not be relied upon as any indication of future performance or resultsexpected for the fiscal year.

Changes in accounting standards and subjectiveassumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.

The U.S. GAAP and related pronouncements,implementation guidelines and interpretations with regard to a wide variety of matters that are relevant to our business, such as, butnot limited to, stock-based compensation, trade spend and promotions, and income taxes are highly complex and involve many subjectiveassumptions, estimates and judgments by our management. Changes to these rules or their interpretation or changes in underlying assumptions,estimates or judgments by our management could significantly change our reported results.

If we are unable to maintain effective disclosurecontrols and procedures and internal control over financial reporting, our stock price and investor confidence could be materially andadversely affected.

We are required to maintain bothdisclosure controls and procedures and internal control over financial reporting that are effective. Because of their inherent limitations,internal control over financial reporting, however well designed and operated, can only provide reasonable, and not absolute, assurancethat the controls will prevent or detect misstatements. Because of these and other inherent limitations of control systems, there is onlythe reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions. The failure ofcontrols by design deficiencies or absence of adequate controls could result in a material adverse effect on our business and financialresults, which could also negatively impact our stock price and investor confidence.

We are dependent on a distiller in Mexico toprovide us with our finished SALT tequila product. Failure to obtain satisfactory performance from them or a loss of their services couldcause us to lose sales, incur additional costs, and lose credibility in the marketplace.

We depend on a distiller in Mexico,a company in Jalisco, for the production, bottling, labeling, capping and packaging of our finished tequila product. We do not have awritten agreement with our distiller in Mexico obligating it to produce our product. The termination of our relationship with our distillerin Mexico distiller or an adverse change in the terms of its services could have a negative impact on our business. If our distiller inMexico increases its prices, we may not have alternative sources of supply at comparable prices and may not be able to raise the pricesof our products to cover all, or even a portion, of the increased costs. 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 turn, this couldcause us to lose credibility in the marketplace and damage our relationships with our customers and consumers, ultimately leading to adecline in our business and results of operations.

Regulatory decisions and changes in the legal,regulatory and tax environment where our tequila is produced and where we operate could limit our business activities or increase ouroperating costs and reduce our margins.

Our business is subject to extensiveregulation regarding production, distribution, marketing, advertising and labeling of beverage alcohol products in the U.S. and in Mexico,where our tequila is produced. We are required to comply with these regulations and maintain various permits and licenses. We are alsorequired to conduct business only with holders of licenses to import, warehouse, transport, distribute, and sell spirits. We cannot assureyou that these and other governmental regulations, applicable to our industry, will not change or become more stringent. Moreover, becausethese laws and regulations are subject to interpretation, we may not be able to predict when, and to what extent, liability may arise.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 restrictionsor limits on advertising or other marketing activities promoting beverage alcohol products. Failure to comply with any of the currentor future regulations and requirements relating to our industry and products, could result in monetary penalties, suspension or even revocationof our licenses and permits. Costs of compliance with changes in regulations could be significant and could harm our business, as we mayfind it necessary to raise our prices in order to maintain profit margins, which could lower the demand for our products and reduce oursales and profit potential.

In addition, the distribution ofbeverage alcohol products is subject to extensive taxation both in the United States and internationally (and, in the United States, atboth the federal and state government levels), and beverage alcohol products themselves are the subject of national import and exciseduties in most countries around the world. An increase in taxation or in import or excise duties could also significantly harm our salesrevenue and margins, both through the reduction of overall consumption and by encouraging consumers to switch to lower-taxed categoriesof beverage alcohol.

We face substantial competition in the alcoholicand non-alcoholic beverage industry, and we may not be able to effectively compete.

Consolidation among spirits producers,distributors, wholesalers, or retailers could create a more challenging competitive landscape for our products. Consolidation at any levelcould hinder the distribution and sale of our products as a result of reduced attention and resources allocated to our brands, both duringand after transition periods, because our brands might represent a smaller portion of the new business portfolio. Expansion into new productcategories by other suppliers, or innovation by new entrants into the market, could increase competition in our product categories. Changesto our route-to-consumer models or partners in important markets could result in temporary or longer-term sales disruption, higher implementation-relatedor fixed costs, and could negatively affect other business relationships we might have with that partner. Distribution network disruptionor fluctuations in our product inventory levels with distributors, wholesalers, or retailers could negatively affect our results for aparticular period.

Our competitors may respond toindustry and economic conditions more rapidly or effectively than we do. Our competitors offer products that compete directly with oursfor shelf space, promotional displays, and consumer purchases. Pricing, (including price promotions, discounting, couponing, and freegoods), marketing, new product introductions, entry into our distribution networks, and other competitive behavior by our competitorscould adversely affect our sales margins, and profitability.

Our business operations may be adversely affectedby social, political and economic conditions affecting market risks and the demand for and pricing of our products. These risks include:

Uncertainty in the financial markets and otheradverse changes in general economic or political conditions in any of the major countries in which we do business could adversely affectour industry, business and results of operations.

Global economic uncertainties,including foreign currency exchange rates, affect businesses such as ours in a number of ways, making it difficult to accurately forecastand plan our future business activities. There can be no assurance that economic improvements will occur, or that they would be sustainable,or that they would enhance conditions in markets relevant to us.

Our limited operating history makes it difficultto forecast our future results, making any investment in us highly speculative.

We have a limited operating history,and our historical financial and operating information is of limited value in predicting our future operating results. We may not accuratelyforecast customer behavior and recognize or respond to emerging trends, changing preferences or competitive factors facing us, and, therefore,we may fail to make accurate financial forecasts. Our current and future expense levels are based largely on our investment plans andestimates of future revenue. As a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpectedrevenue shortfall, which could then force us to curtail or cease our business operations.

Risks Related to Our Securities

An investment in our common stock is speculativeand there can be no assurance of any return on any such investment.

An investment in our common stockis speculative and there is no assurance that investors will obtain any return on their investment. Investors will be subject to substantialrisks involved in an investment in the Company, including the risk of losing their entire investment.

Future sales of common stock, or the perceptionof such future sales, by some of our existing stockholders could cause our stock price to decline.

The market price of our commonstock 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 salesmay occur. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell shares in thefuture at a time and at a price that we deem appropriate.

From time to time, certain of ourstockholders may be eligible to sell all or some of their common shares by means of ordinary brokerage transactions in the open marketpursuant to Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), subject to certain limitations.In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months subject only to the current public informationrequirement. Affiliates may sell after six months subject to the Rule 144 volume, manner of sale (for equity securities), and currentpublic information and notice requirements.

Our Board of Directors may issue and fix the terms of shares of ourPreferred Stock without stockholder approval, which could adversely affect the voting power of holders of our Common Stock or any changein control of our Company.

Our Articles of Incorporation authorizethe issuance of up to 5,000,000 shares of “blank check” preferred stock, with par value $0.001 per share, with such designationrights and preferences as may be determined from time to time by the Board of Directors. Our Board of Directors is empowered, withoutshareholder approval, to issue shares of preferred stock with dividend, liquidation, conversion, voting or other rights which could adverselyaffect the voting power or other rights of the holders of our common stock. In the event of such issuances, the preferred stock couldbe used, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our company. Any suchissuance would be subject to terms and conditions of any current offering that may disallow any such issuance.

We have 1,000 shares of Series A Preferred Stockauthorized and outstanding with mirrored voting rights.

Series A Preferred Stock

Pursuant to a certificate of designation filed withthe Secretary of State of the State of Nevada on June 10, 2025 (the “Certificate of Designation of Series A Preferred Stock”),one thousand (1,000) shares of preferred stock have been designated as Series A Preferred Stock, par value $0.001 per share, of the Company(“Series A Preferred Stock”). The Certificate of Designation provides that each Series A Preferred Share will have twenty-fivethousand (25,000) votes and will vote together with the Company’s outstanding common shares, par value $0.001 (the “CommonShares”), as a single class, only with respect to the proposal related to the increase of authorized shares at the Special Meeting.The holder of the Series A Preferred Shares has granted an irrevocable proxy to certain officers of the Company to vote the Series A PreferredShares in accordance with the terms of the Issuance Documents, in connection with the Special Meeting. Per the terms of the Issuance Documents,if voted, the Series A Preferred Shares are required to vote on the applicable proposals in the same “mirrored” proportionaggregate votes cast “FOR” and “AGAINST” on the proposal to increase the authorized shares by the holders of theCommon Shares who properly vote on such proposal (but excluding any abstentions). Mr. Nistico, the Company’s Chief Executive Officer,directly beneficially owns such one thousand (1,000) share of Series A Preferred Stock.

The outstanding Series A Preferred Shares are requiredto be redeemed in whole, but not in part, upon the earliest of: (i) if such redemption is authorized and directed by the Board in itssole discretion, automatically and effective on such time and date specified by the Board in its sole discretion, (ii) automatically uponthe approval by the Company’s shareholders of the increase of the authorized shares at any meeting of shareholders or (iii) immediatelyprior to the record date for the 2025 Annual Meeting of Shareholders of the Company Upon such redemption, the holder of the Series A PreferredShares will receive aggregate consideration equal to the Purchase Price.

The Series A Preferred will vote as described aboveto increase the number of authorized shares of our common stock, which could result in substantial dilution to existing stockholders ifadditional shares are issued. The increase in authorized shares provides us with greater flexibility to issue additional equity securitiesfor various corporate purposes, including financings, equity compensation, or other strategic transactions. However, any such issuancesmay dilute the ownership interests of existing stockholders and could adversely affect the market price of our common stock. In addition,the issuance of additional shares may make it more difficult for a third party to acquire control of the Company, which could discourageor delay takeover attempts that could benefit stockholders. There can be no assurance as to when or if any additional shares will be issuedor the terms on which such issuances may occur.

We have issued multiple classes of preferredstock in the Company that will result in dilution to existing stockholders upon their conversion

The issuance of common stock upon conversion of theour Series A-1 Preferred Stock, our Series B Redeemable Preferred Stock, and our Series C Convertible Preferred Stock will result in immediateand substantial dilution to the interests of other stockholders. 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 fromreceiving 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. If holders choose to do this, it will cause substantial dilution to the then holders of ourcommon stock. Additionally, the continued sale of shares issuable upon successive conversions will likely create significant downwardpressure on the price of our common stock as holders sells material amounts of our common stock over time and/or in a short period oftime. This could place further downward pressure on the price of our common stock and in turn result in holders receiving an ever-increasingnumber of additional shares of common stock upon conversion of its securities, and adjustments thereof, which in turn will likely leadto 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 stockhas been volatile over the year and may continue to be volatile.

The market price andtrading volume of our common stock has been volatile over the past year, and it may continue to be volatile.Over fiscal year 2024 and the date of this annual report, our common stock has traded as low as $0.96 and as high as $29.20per share. We cannot predict the price at which our common stock will trade in the future, and the price ofour common stock may decline. The price at which our common stock trades may fluctuate significantly andmay 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 suppliersregarding their own performances, and the impact of other “Risk Factors” discussed in the Annual Report. 

Because certain principal stockholders own alarge percentage of our voting stock, other stockholders’ voting power may be limited.

As of December 31, 2024, our ten(10) largest shareholders own or controlled approximately 57% of our outstanding common stock . If those stockholders act together,they would have the ability to have a substantial influence on matters submitted to our stockholders for approval, including the electionand removal of directors and the approval of any merger, consolidation or sale of all or substantially all of our assets. As a result,our other stockholders may have little or no influence over matters submitted for shareholder approval. In addition, the ownership ofsuch stockholders could preclude any unsolicited acquisition of us, and consequently, adversely affect the price of our common stock.These stockholders may make decisions that are adverse to your interests.

We do not expect to pay dividends and investorsshould not buy our Common Stock expecting to receive dividends.

We do not anticipate that we willdeclare or pay any dividends in the foreseeable future. Consequently, you will only realize an economic gain on your investment in ourcommon stock if the price appreciates. You should not purchase our common stock expecting to receive cash dividends. Therefore, our failureto pay dividends may cause you to not see any return on your investment even if we are successful in our business operations.

There can be no assurances that our common stockwill not be subject to potential delisting if we do not continue to maintain the listing requirements of the NYSE American.

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

On October 6, 2023, the NYSE Americannotified the Company that we were not in compliance with Section 1003(a)(i) of the continued listing standards set forth in the NYSE AmericanCompany Guide (the “Company Guide”), requiring a listed company to have stockholders’ equity of (i) at least $2.0 millionif it has reported losses from continuing operations or net losses in two of its three most recent fiscal years. The notice had no immediateimpact on the listing of our common stock, subject to our compliance with the other continued listing requirements. In accordance withapplicable NYSE American procedures, we submitted a plan of compliance (the “Plan”) advising of the definitive action(s) theCompany has taken, is taking, or would take, that would bring us into compliance with the continued listing standards within the 18 monthsof receipt of the notice. The NYSE American reviewed and accepted the Plan as a reasonable demonstration of an ability to conform to therelevant standards in the 18-month period. On December 20, 2023, we received a notification (the “Plan Letter”), with NYSEAmerican acceptance of the proposed plan and further deficiency notice. In the Plan Letter the NYSE American indicated that in additionto Section 1003(a)(i), the Company was also not in compliance with Section 1003(a)(ii) of the Company Guide, requiring a listed companyto have stockholders’ equity of at least $4.0 million if it has reported losses from continuing operations or net losses in threeof its four most recent fiscal years.

On June 5, 2024, the Company receivednotification from the NYSE American indicating that it is not in compliance with the Exchange’s continued listing standardsunder Section 1003(a)(iii) of the Company Guide, requiring a listed company to have stockholders’ equity of $6 millionor more if the listed company has reported losses from continuing operations and/or net losses in its five most recent fiscal years.

On April 7, 2025, Company, NYSEAmerican publicly announced and provided a notice to the Company that NYSE Regulation has determined to commence proceedings to delistthe Company’s Common Stock and publicly trading Warrants to purchase one share of Common Stock, from NYSE American. NYSE Regulationhas determined that the Company is no longer suitable for listing pursuant to Section 1009(a) of the NYSE American Company Guide as theCompany was unable to demonstrate that it had regained compliance with Sections 1003(a)(i), (ii), and (iii) of the Company Guide by theend of the maximum 18-month compliance plan period, which expired on April 6, 2025.

OnApril 16, 2025, the Company, received an official notice of noncompliance from NYSE Regulation stating that the Company isnot in compliance with NYSE American continued listing standards due to the failure to timely file the Company’s Form 10-K for theyear ended December 31, 2024 by the filing due date of April 15, 2025.

Our common stock will continueto be listed and traded on the NYSE American during the 18-month period, subject to the Company’s compliance with the other continuedlisting standards of the NYSE American and continued periodic review by the NYSE American of the Company’s progress with respectto its Plan. There can be no assurance that the Company will be able to meet its goals set forth in the Plan. If we are unable to satisfythe NYSE American rules and listing standards, or are unable to make progress on our Plan, our securities could be subject to delisting.

If the NYSE American were to delistour securities from trading, we could face significant consequences, including, but not limited to, the following:

● a limited availabilityfor market quotations for our securities;

● reduced liquidity withrespect to our securities;

● a determination thatour common stock is a “penny stock,” which will require brokers trading in our common stock to adhere to more stringent rulesand possibly result in a reduced level of trading activity in the secondary trading market for our common stock;

● limited amount of newsand analyst coverage; and

● a decreased abilityto issue additional securities or obtain additional financing in the future.

Our common stock could be further diluted asthe result of the issuance of additional common stock, convertible securities, warrants or options.

Our issuance of additional commonstock, convertible securities, options and warrants could affect the rights of our stockholders, result in a reduction in the overallpercentage holdings of our stockholders, could put downward pressure on the market price of our common stock, could result in adjustmentsto conversion and exercise prices of outstanding notes and warrants, and could obligate us to issue additional common stock to certainof our stockholders.

Item 1B. Unresolved Staff Comments.

None.

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 managementsystems and processes. We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrenceon or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availabilityof our information systems or any information residing therein.

We conduct periodic risk assessments to identify cybersecuritythreats, as well as assessments in the event of a material change in our business practices that may affect information systems that arevulnerable to such cybersecurity threats. These risk assessments include identification of reasonably foreseeable internal and externalrisks, 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.

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 regularlymonitor the effectiveness of our safeguards. Primary responsibility for assessing, monitoring and managing our cybersecurity risks restswith the President who reports to our Chief Executive Officer, to manage the risk assessment and mitigation process.

We engage consultants, or other third parties in connectionwith 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. We require each third-party service provider to certify that it has the ability to implementand maintain appropriate security measures, consistent with all applicable laws, to implement and maintain reasonable security measuresin connection with their work with us, and to promptly report any suspected breach of its security measures that may affect our company.

We have not encountered cybersecurity challenges thathave materially impaired our operations or financial standing.

Governance

Our board of directors addresses the Company’scybersecurity risk management as part of its general oversight function. The board of directors’ audit committee is responsiblefor overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecuritythreats.

Our cybersecurity risk assessment and management processesare implemented and maintained by certain Company management, including the information technology team at the direction of our President.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 keypriorities to relevant personnel. 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 vulnerabilitymanagement 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. In addition, the Company’s incident response and vulnerabilitymanagement policies include reporting to the audit committee of the board of directors for certain cybersecurity incidents including significantbreaches to the Company’s networks or systems. The audit committee receives regular reports from the information technology teamconcerning 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 2. Properties.

Splash’s physical offices are located at 1500Cordova Rd; Fort Lauderdale, FL 33316 and 1491 2^nd Street, Sarasota FL 34236 while our business office is located at 1314 EastLas Olas Blvd, Suite 221, Fort Lauderdale, FL 33301. Copa’s office/manufacturing facility is located at 901 E. 2^nd Street;The Dalles, OR 97058. Currently, the Company does not own any real property.

Item 3. Legal Proceedings.

We are notcurrently 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.

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 accountspayable.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities.

The Company’s Common Stock and tradeable warrantsare 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 ofCommon Stock issued and outstanding. As of June 30, 2025, at our transfer agent owners totaled approximately 281 holders of record ofour Common Stock.

Dividends

We have not declared any cash dividends on our commonstock since inception and do not anticipate paying such dividends in the foreseeable future. We plan to retain any future earnings foruse in our business operations. Any decisions as to future payment of cash dividends will depend on our earnings and financial positionand such other factors as the Board of Directors deems relevant.

Securities Authorized for Issuance under EquityCompensation Plans

None.

Equity Compensation Plan Information

The information required by this item with respectto securities authorized for issuance under equity compensation plans is set forth in Part III, Item 12 of this Annual Report on Form10-K, and is incorporated herein by reference.

Purchases of Equity Securities by the Issuer.

There were no repurchases of our common stock duringthe year ended December 31, 2024.

Item 6. {Reserved}

Item 7. Management’s Discussion and Analysisof Financial Condition and Results of Operations.

The following discussion and analysis should beread in conjunction with the Audited Consolidated Financial Statements and Notes to Audited Consolidated Financial Statements filed herewith.This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains statements that are forward-looking.These statements are based on current expectations and assumptions that are subject to risk, uncertainties, and other factors. These statementsare often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,”“intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Actualresults could differ materially because of the factors discussed in “Risk Factors” elsewhere in this Annual Report, and otherfactors 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. (“MergerSub”), 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-ownedsubsidiary of Canfield. The Merger was consummated on March 31, 2020.

As the owners and management of Splash had votingand operating control of CMS following the Merger, the Merger transaction was accounted for as a reverse acquisition (that is with Splashas the acquiring entity), followed by a recapitalization.

On July 31, 2020, CMS changed its name to Splash BeverageGroup, Inc. (“SBG”). On June 11, 2021, SBG’s common stock and warrant to purchase common stock began trading on theNYSE American under the symbols “SBEV” and SBEV WT,” respectively.

On November 8, 2021, SBG reincorporated into the Stateof Nevada and became a Nevada corporation.

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 AnnualReport on Form 10-K the information that can be assessed through our website and you should not consider it to be part of this AnnualReport on Form 10-K.

Results of Operations for the Year Ended December31, 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. 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.

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 decreasein cost of goods sold was due to our decreased sales. The $8.4 million decrease in cost of goods sold   was driven by decreasedsales 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. The decrease in operating expenses was primarilydue to $1.7 million of marketing expense, $0.5 million of contracted services, $2.1 million of other general and administrative expensespartially 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.

Other Income/(Expense)

Other expenses for the year ended December 31, 2024were $6.9 million compared to $5.7 million for the year ended December 31, 2023. The other expense increased of $1.2 million is mainlydriven by an increase in interest expense. Interest expenses for the year ended December 31, 2024 were $2.9 million compared to $1.9million for the year ended December 31, 2023. The $1.0 million increase in interest expense is due to new loans with a principal of $3.2million with higher interest rates. The Company also reserved   $0.3 million for legal settlement. Offset by a decrease inamortization of debt discount of $0.2 million and $0.03 million in other expenses.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability of a company to generatefunds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factorsin 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. The decrease was primarily due to expenses relating to operating the business.

Net cash used for continuing operating activitiesduring the year ended December 31, 2024, was $8.0 million as compared to the net cash used by continuing operating activities for theyear ended December 31, 2023, of $10.2 million. The primary reason for the change in net cash used was due to an increase of $1.2 millionin 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 inworking capital.

Net cash used for investing activities during theyear ended December 31, 2024, was $0.01 million as compared to the net cash used for investing activities during the year ended December31, 2023, of $0.01 million. The net cash used in the year 2024 was for machinery & equipment. 

Net cash provided by financing activities during theyear ended December 31, 2024, was $7.5 million compared to $6.1 million provided from financing activities for the year ended December31, 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. No cash advance from shareholders in 2024, $0.2 million was received from a shareholder advance in the year ending December31, 2023. Principal repayment of debt of $2.0 million and $1.0 million were made in years ending December 31, 2024 and 2023 respectively.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. There can be no assurance that additional funds will be available when neededfrom any source or, if available, will be available on terms that are acceptable to us. We will be required to pursue sources of additionalcapital through various means, including debt or equity financings. Future financings through equity investments are likely to be dilutiveto existing stockholders. 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, andthe issuance of incentive awards under equity employee incentive plans, which may have additional dilutive effects. Further, we may incursubstantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printingand distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securitieswe may issue, such as convertible notes and warrants, which will adversely impact our financial condition. Our ability to obtain neededfinancing may be impaired by such factors as the capital markets and our history of losses, which could impact the availability or costof future financings. 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 curtailor cease operations.

Critical Accounting Estimates

The preparation of our consolidated financial statementsin conformity with accounting principles generally accepted in the United States of America requires management to make estimates andassumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as the disclosure of contingent assetsand liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonableunder the circumstances. Actual results could differ from those estimates.

Revenue

The Company faces significant judgmentin revenue recognition due to the complexities of the beverage industry’s competitive landscape and diverse distribution channels.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 recognitionjudgments. However, inherent uncertainties persist, underscoring the critical nature of revenue recognition as it significantly impactsfinancial statements and performance evaluation.

Allowance for Doubtful Accounts

The allowance for doubtful accounts is establishedbased on historical experience, current economic conditions, and specific customer collection issues. Management evaluates the collectabilityof accounts receivable on an ongoing basis and adjusts the allowance as necessary. Changes in economic conditions or customer creditworthinesscould 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 realizablevalue. Estimating the net realizable value of inventory involves significant judgment, particularly when market conditions change rapidlyor when excess or obsolete inventory exists. Management regularly assesses inventory quantities on hand, future demand forecasts, andmarket conditions to determine whether write-downs to inventory are necessary.

Fair Value Measurements

We measure certain financial assets and liabilitiesat fair value on a recurring basis. Fair value measurements involve significant judgment and estimation, particularly when observableinputs 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.

Item 7A. Quantitative and Qualitative Disclosuresabout Market Risk.

Not applicable for smaller reporting companies.

Item 8. Financial Statements and SupplementaryData.

Report of Independent Registered Public Accounting Firm (PCAOB ID: 468)

Report of Independent RegisteredPublic Accounting Firm

To the Board of Directors and Stockholders

Splash Beverage Group, Inc.

Fort Lauderdale, Florida

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of SplashBeverage Group, Inc. at December 31, 2024 and 2023, and the related consolidated statements of operations, changes in stockholders’equity and cash flows for the years ended December 31, 2024 and 2023, and the related notes (collectively referred to as the financialstatements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financialposition of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years ended December31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Uncertainty

The accompanying consolidated financial statements have been prepared assumingthat the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has sufferedrecurring losses from operations and has an accumulated deficit and a working capital deficiency that raise substantial doubt about itsability to continue as a going concern. Management’s plans regarding these matters are also described in Note 3. The consolidatedfinancial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a publicaccounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independentwith respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securitiesand Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit ofits internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control overfinancial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control overfinancial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of materialmisstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such proceduresincluded examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also includedevaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentationof the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period auditof the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accountsor disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

Evaluation of Intangible Assets for Impairment

Description of the Matter

As discussed in Note 2 to the consolidated financial statements, intangibleassets are tested for impairment at least annually or when events or circumstances indicate the fair value of the asset may be below itscarrying value. This analysis involves comparing events and circumstances such as general macroeconomic conditions, conditions specificto the industry and company specific factors. These fair value estimates are sensitive to significant assumptions and judgments, suchas projections of operating expenditures, discount rates, and future levels of revenue.

The Company has experienced a decline in its reported amounts of Beveragerevenue and the Beverage operating segment has experienced losses from operations for the past several years. These factors were considereda triggering event indicative of impairment, which resulted in an impairment assessment by management. Pursuant to current accountingguidance, management performed a quantitative analysis and concluded that its intangible assets were impaired and the Company recordedimpairment charges of approximately $4.3 million during the year ended December 31, 2024. At December 31, 2024, the Company’s intangibleasset balance was $0.

Auditing management’s annual impairment tests was complex becauseof the significant judgment required to evaluate management’s assumptions used to determine the fair value of the intangible assets.

How We Addressed the Matterin our Audit

Our audit procedures related to the evaluation of intangible assets forimpairment included the following, among others:

Rose, Snyder & Jacobs LLP

We have served as the Company’s auditor since 2023

Encino, CA

July 11, 2025

The share amounts above have been retroactively adjusted to reflect the1 for 40 reverse stock split that took effect on March 27, 2025.

The accompanying notes are an integral part of theseconsolidated financial statements.

The share amounts above have been retroactively adjusted to reflect the1 for 40 reverse stock split that took effect on March 27, 2025.

The accompanying notes are an integral part of theseconsolidated financial statements.

The accompanying notes are an integral part of theseconsolidated financial statements

The accompanying notes are an integral part of theseconsolidated financial statements.

Splash Beverage Group, Inc.

Notes to the Consolidated Financial Statements