Financial Analysis

Note 11 Commitment and Contingencies The Company is a party to asserted claims and are subject to regulatory actions in the ordinary course of business. The results of such proceedings cannot be predicted with certainty, but the Company does not anticipate that the outcome, if any, arising out of any such matter will have a material adverse effect on its business, financial condition or results of operations. The licensing agreement between TapouT LLC and the Company was terminated in Q1 2024. TapouT alleges that as a result of an unpaid invoice they had exercised their right pursuant to section 22 of the licensing agreement to terminate the licensing agreement. TapouT alleges that as a result of the aforementioned termination, pursuant to the licensing agreement, they are owed all unpaid fees and other amounts payable become immediately due. As a result, TapouT have brought two causes of action, the first being breach of contract for the unpaid invoice and the second for accounts stated for all unpaid fees and other amounts payable. TapouT, LLC is seeking approximately $1,700,000 for termination of the licensing agreement. The Company does not view this as a reasonable amount given that the Company believes TapOut LLC did not fulfill their obligations pursuant the licensing agreement. The Company believes the case will be settled for a lower amount and has booked a legal reserve of $330,000 as the estimate for the potential liability. The parties have had multiple mediation …

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Note 4 Notes Payable, Related Party Notes Payable, and Revenue Financing Arrangements Notes payable are generally nonrecourse and secured by all Company owned assets. Schedule of notes payable Interest Rate December 31, 2025 December 31, 2024 Notes Payable and Convertible Notes Payable In December 2020, the Company entered into a 56- month loan with a company in the amount of $ 1,578,237 . The loan requires payments of 3.75 % through November 2022 and 4.00 % through September 2025 of the previous months revenue. Note was due September 2025. Note is guaranteed by a related party see note 6. 17 % $ 188,839 $ 195,927 In April 2021, the Company entered into two six-month loans in the amount of $ 84,000 each. The loan had an original maturity of October 2021 with principal and interest due at maturity. The loan was exchanged to Series B Preferred stock in June 2025. 7 % 168,000 In May 2021, the Company entered into a six-month loan with an individual in the amount of $ 50,000 . The loan had an original maturity of October 2021 with principal and interest due at maturity. The loan was exchanged to Series B Preferred stock in June 2025. 7 % 50,000 In May 2021, the Company entered into a six-month loan with an individual in the amount of $ 10,000 . The loan had an original maturity of October 2021 with principal and interest due at maturity. The loan due date was extended to October 31, 2024. . 7 % 10,000 10,000 In August 2022, the Company entered into a 56-months auto loan in the am …

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Note 12 Tax Provision The Company has evaluated the positive and negative evidence in assessing the realizability of its deferred tax assets. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax planning strategies to determine which deferred tax assets are more likely than not to be realized in the future. Due to uncertainty about the Companys ability to utilize its deferred tax assets, the Company has recorded a full valuation allowance against its deferred tax assets. On December 31, 2025, the Companys net operating loss carryforward for Federal income tax purposes was $ 128,566,840 , which will be available to offset future taxable income. If not used, these carry forwards will begin to expire in 2032, except for the net operating losses generated January 1, 2018 and after, which can be carried forward indefinitely. There was no income tax expense or benefit for the years ended December 31, 2025 and 2024 due to the full valuation allowance recorded. The reconciliation of the income tax benefit is computed at the U.S. federal statutory rate as follows: Schedule of effective income tax rate reconciliation 2025 2024 Federal Statutory Tax Rate 21.00 % 21.00 % Permanent Differences (6.93 %) (1.57 %) Change in Valuation Allowance (14.07 %) (19.43 %) Net deferred tax asset The tax effects of temporary differences which give rise to significant portions of deferred tax assets or liabilitie …

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Note 9 Lease The Company has various operating lease agreements primarily related to real estate and office space. The Companys real estate leases represent a majority of the lease liability. Lease payments are mainly fixed. Any variable lease payments, including utilities, and common area maintenance are expensed during the period incurred. Variable lease costs were immaterial for the year ended December 31, 2025 and 2024. A majority of the real estate leases include options to extend the lease. Management reviews all options to extend at the inception of the lease and account for these options when they are reasonably certain of being exercised. Operating lease expense is recognized on a straight-line basis over the lease term and is included in operating expense on the Companys condensed consolidated statement of operations and comprehensive loss. Operating lease cost was $ 322,020 and $ 360,409 during the twelve-month period ended December 31, 2025 and 2024, respectively. The following table sets for the maturities of our operating lease liabilities and reconciles the respective undiscounted payments to the operating lease liabilities in the consolidated balance sheet at December 31, 2024. Schedule of operating lease liabilities Undiscounted Future Minimum Lease Payments Operating Lease 2026 52,703 2027 2,976 Total 55,679 Amount representing imputed interest (1,983 ) Total operating lease liability 53,696 Current portion of operating lease liability (50,720 ) Operating le …

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Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands disclosures in an entity s income tax rate reconciliation table and disclosures regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2025. Adoption of the standard will be applied on a prospective basis and retrospective application to all periods presented is permitted. The Company is currently evaluating the impact of ASU 2023-09 on its future consolidated financial statements and related disclosures. In November 2024, the FASB issued Accounting Standards Update 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ( ASU 2024-03 ). ASU 2024-03 is intended to enhance the disclosures for expenses for all public entities in accordance with ASC Topic 220, Income Statement-Reporting Comprehensive Income. ASU 2024-03 addresses investor requests for more detailed information about expenses, specifically cost of sales and selling, general, and administrative expenses. ASU 2024-03 requires a public entity to disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activ …

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Note 7 Related Parties During the normal course of business, the Company incurred expenses related to services provided by its then Chief Executive Officer or Company expenses paid by its then Chief Executive Officer, resulting in related party payables. In conjunction with the acquisition of Copa di Vino, the Company also entered into a Revenue Loan and Security Agreement (the Loan and Security Agreement) by and among the Company, Robert Nistico, its then Chief Executive Officer, as an additional Guarantor and each of the subsidiary guarantors from time-to-time party thereto (each a Guarantor, and, collectively, the Guarantors), and Decathlon Alpha IV, L.P. (the Lender). The Note Payable to Decathlon with a balance of $ 2,325,544 at December 31, 2025 and $ 1,995,950 at December 31, 2024. On September 2024 and November 2024 the Company also entered into a Merchant Cash Advance Agreement (the Loan and Security Agreement) by and among the Company, Robert Nistico, as an additional Guarantor and each of the subsidiary Guarantors from time-to-time party thereto, and with Timeless Funding LLC (the Lender). The Loan and Security Agreement provided a loan of $325,000 and $340,000, with the gross and interest amount of $172,250 and $173,400 respectively with the Lender (the Credit Facility). There was $497,188 and $311,713 respectively outstanding under this agreement as of December 31, 2025. There were related party advances from our then Chief Executive Officer, Robert Nistico, in t …

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Note 11 Segment Reporting We have two reportable operating segments: (1) the manufacture and distribution of non-alcoholic and alcoholic beverages, and (2) the retail sale of beverages and groceries online. These operating segments are managed separately and each segments major customers have different characteristics. Segment Reporting is evaluated by our chief operating decision maker, which continues to be our chief executive officer. Schedule of segment reporting information Revenue For the Year Ended, December 31, 2025 For the Year Ended, December 31, 2024 Splash Beverage 14,054 155,123 E-Commerce 59,012 646,150 Total Revenues, $ 73,066 $ 801,273 Segment operating loss: 2025 2024 Splash Beverage (13,183,573 ) (8,555,258 ) E-Commerce (1,002,647 ) (345,182 ) Total segment operating loss $ (14,186,220 ) $ (9,900,440 ) Reconciliation of segment loss to corporate loss: 2025 2024 Other income/expense $ 234,996 $ (871 ) Amortization of debt discount (1,844,694 ) (3,677,143 ) Interest income & expense (2,523,260 ) (3,700,620 ) Loss on Extinguishment of debt (5,560,482 ) Loss on inventory write off (449,205 ) Change in FV of Derivative (20,406 ) Legal reserve (330,000 ) Loss before income tax $ (24,349,271 ) $ (17,609,074 ) Total Assets December 31, 2025 December 31, 2024 Splash Beverage Group $ 938,652 $ 1,554,935 Assets of discontinued operations 1,055,272 E-Commerce 27,042 148,978 Total Assets $ 965,694 $ 2,759,185 …

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Note 2 Summary of Significant Accounting Policies Basis of Presentation and Consolidation These consolidated financial statements include the accounts of Splash and its wholly owned subsidiaries, Holdings and Splash Mex, and CdV. All intercompany balances have been eliminated in consolidation. Our accounting and reporting policies conform to accounting principles generally accepted in the United States of America (GAAP). Certain reclassifications have been made to the prior period financial statements to conform to the current period classifications. These reclassifications had no impact on net loss. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. CORRECTION OF PRIOR PERIOD ERROR The Company identified a material prior period error in the Consolidated Balance Sheet and Statement of Stockholders Equity recognition of water rights. On June 25, 2025, the Company entered into an Asset Purchase Agreement (the Asset Purchase Agreement) with a third party (the Seller) under which the Seller sold certain water assets located in Costa Rica to the Company in exchange for $20 million of Series C …

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Note 6 Stockholders Equity Common Stock On March 27, 2025, the Company implemented a 1.0 for 40.0 reverse stock split . The reverse stock split was authorized by the Companys Board of Directors on March 14, 2025. All numbers of shares of Common Stock have been adjusted to reflect the split. The purpose of this reverse split was to ensure that the Company could meet the per share price requirements of the NYSE American. On May 1, 2024, the Company entered into a securities purchase agreement with certain accredited investors. Pursuant to such agreements, the Company sold: (i) senior convertible notes in the aggregate original principal amount of $1,850,000, convertible into up to 115,625 shares of Common Stock, subject to adjustments as provided in the Notes, (ii) 23,125 shares of Common Stock (the Commitment Shares), (ii) warrants to initially acquire up to an aggregate of 115,625 additional shares of Common Stock (the Warrants) at an exercise price of $34.0 per share . A convertible promissory note was issued to stockholder on April 15, 2024 for $200,000 at 12% with conversion price of $14.0 per share. The note included 14,286 warrants. The loan matured in July 2025 with principal and interest due semi-annually. Accrued interest of $ 27,370 was paid prior to August 15, 2024. Preferred Stock The Company evaluated the classification of the Preferred Stock and related warrants issued with the Series A-1 Preferred Stock in accordance with ASC 480, Distinguishing Liabilities from …

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Note 13 Subsequent Events ELOC Letter Agreement On January 26, 2026, the Company entered into an agreement (the Letter Agreement) with C/M Capital Master Fund, LP (the Investor) which Investor is the counterparty to that certain Securities Purchase Agreement dated September 19, 2025 establishing an equity line of credit facility between the Company and the Investor (the ELOC Agreement). Pursuant to the Letter Agreement, the Company in lieu of issuing the Investor shares of Common Stock referred to in the ELOC Agreement as the Commitment Shares, as such term is defined and described in the ELOC Agreement, the Company instead issued to the Investor a promissory note (the Note). The Note has an initial principal amount of $525,000, which shall be subject to increase up to $700,000 in connection with sales made under the ELOC Agreement which increase, if applicable, would reflect the additional 0.5% of Commitment Shares the Investor was previously entitled to receive under the ELOC Agreement. The Note bears no interest unless an event of default occurs whereupon interest accrues at a rate of 10% per annum, and matures on January 26, 2028. In addition, following the repayment of prior promissory notes originally issued on September 22, 2025 to the Investor and an affiliate, the Note is subject to mandatory prepayments from net proceeds received by the Company under the ELOC Agreement after the first $3 million of net proceeds equal to 30% of any further net proceeds. ELOC Sales Fr …

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