EDVA

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How EDVA rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Item 1A -Risk Factors” contained in this Report.
Actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.
Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.
We cannot guarantee future results, levels of activity, performance or achievements.
We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Company Overview Historically, Splash was a portfolio company seeking to manage brands across viable growth segments within the consumer beverage industry.
As a result of our lack of capital, we did not generate revenue from February 2025 until March 2026 when we delivered tequila as described below.
Our beverage operations have historically not been profitable.
Because of our lack of capital to generate revenue, our management reviewed strategic alternatives inside and outside of the beverage industry.
As a result, on March 4, 2026 the Company entered into a non-binding letter of intent setting forth the principal terms of a potential acquisition of a leading manufacturer and multi-brand operator of federally compliant cannabinoid wellness products.
See “Letter of Intent” immediately below for more information.
As of the date of this Report, the Company has not entered into a definitive written agreement with respect to such potential transaction.
The delay has been caused by a quest to make the acquisition tax-free for the target’s equity holders.
Because the process for doing so would delay the closing of the proposed acquisition until late 2026, the Company has agreed to pay additional cash to the target company’s investors to cover their income taxes and reduce the equity component of the acquisition.
Letter of Intent On March 4, 2026, Splash entered into a letter of intent (the “Letter”) with the target company, Medterra CBD, LLC (“Medterra”), a leading manufacturer and multi-brand operator of federally compliant cannabinoid wellness products.
Pursuant to the Letter, the parties agreed in principal on the terms of a potential business combination between Medterra and the Company, which transaction is subject to due diligence and execution of a definitive written agreement and other applicable agreements, receipt of audited financial statements of Medterra and customary closing conditions.
In addition, the Company shall be required to raise capital to pay off Medterra’s debt of approximately $10.4 million.
The proposed terms for the acquisition reflect an enterprise value of Medterra of $37.6 million or the issuance of approximately 54.4 million shares of Common Stock, which assumes repayment of its outstanding debt and delivery of approximately $10,000,000 in cash to pay off and extinguish the debt of Medterra and to cover the income taxes of the Medterra equity holders.
At closing the Company will issue Medterra investors a number of shares of the Company’s Common Stock equal to up to 19.99% of the Company’s Common Stock then outstanding, and the remaining shares will be of two series of convertible preferred stock (“Series X” and “Series X-1”) to be issued to Medterra’s equity holders based on their existing ownership interests in Medterra.
The Series X and X-1 shares will convert at $0.50 per share.
The Common Stock to be issued at the closing shall have full rights equal to all outstanding Common Stock, except the holders may not vote upon the stockholder approval of the change of control contemplated by the acquisition.
The Letter also provides that the Company will issue Series X-1 to Medterra’s lender with the stated value based upon the equity value of Medterra.
In exchange the lender shall cancel its warrants to purchase equity of Medterra.
The Company now expects it can close the acquisition of Medterra in May 2026.
The closing will be subject to the Company’s planned meetings with investors during the week of April 13 th and its ability to raise the necessary capital as well as reaching a definitive agreement with Medterra and the parties meeting the closing conditions.
Because the Company recently rescinded its June 2025 acquisition of certain water rights in Costa Rica, it derecognized the $20 million of stockholders’ equity which created a stockholders’ deficit of $15,300,828 at December 31, 2025.
The NYSE American Rules required us to have at least $6 million in stockholders’ equity.
With the expected stockholder’s equity created by the Medterra acquisition, the Company will be in compliance with the NYSE American Rules.
The Company is seeking to meet with the NYSE American Staff as soon as possible.
There is no assurance that the NYSE American will permit us to maintain the listing of our Common Stock.
See Item 1A – “Risk Factors.” Our Strategy Our primary focus is to complete the acquisition of Medterra as described above under “Letter of Intent.” In addition, we are focusing on re-commencing material revenue-generating operations through our beverage business, including through sales of our Chispo Tequila brand subject to obtaining sufficient capital.
In the furtherance of this Chispo tequila opportunity, in December 2025 we purchased $50,000 of inventory for the potential Senior Frogs order described under “Chispo Tequila” below.
The Company did not make any sales in the 2025 calendar year after March 2025 due to its lack of capital resources.
The Company estimates that it will initially require $3,000,000 for the Chispo brand as well as general and administrative expenses for the next 12 months .
Chispo Tequila Chispo is a tequila brand which we recently began distributing to one customer.
Chispo is an authentic blue agave blanco tequila, with fresh, sweet citrus, herbal floral notes ideal for cocktail mixing.
We have entered into an arrangement with the Chispo producer under which we agreed to distribute the brand in certain states in the U.S., as well as in Guatemala and Europe.
We expect that we will need approximately $500,000 in new financing to implement this business.
Senior Frogs Selection In January 2026 the Company announced that Senor Frog’s, an internationally recognized restaurant and entertainment brand known for its vibrant atmosphere and authentic cuisine, selected Chispo Tequila as its house tequila across an initial group of locations in Florida, the Bahamas, and Mexico.
Senor Frog’s belongs to Grupo Anderson’s Mexico who owns more than 50 business units and 15 distinct restaurant brands across 4 countries.

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RISKS RELATED TO OUR BUSINESS Risks Related to our Business Our auditors have included an explanatory paragraph in their opinion regarding our ability to continue as a going concern.
If we are unable to continue as a going concern, our securities will have little or no value.
Rose, Snyder & Jacobs LLP, our independent registered public accounting firm for the fiscal year ended December 31, 2024, has included an explanatory paragraph in their opinion that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2024, indicating that our current liquidity position raises substantial doubt about our ability to continue as a going concern.
If we cannot continue as a going concern, our shareholders would likely lose most or all of their investment in us.
Management recognizes that it may be required to obtain additional resources via issuances of indebtedness or equity to successfully execute its business plans.
No assurances can be given that management will be successful in raising additional capital, if needed, or on acceptable terms.
These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
A significant deficiency and material weakness exists over our financial reporting.
We continue to implement and evaluate the effectiveness of additional policies and procedures to address identified control deficiencies in the design and operation of our internal control over financial reporting, as further described in Item 9A of this Annual Report (“Controls and Procedures”).
Management identified a material weakness in the Company’s internal controls related to dedicated services billing and revenue recognition, and has taken actions in 2025 to have the material weakness remediated.
To note, the significant deficiency and material weakness over our financial reporting or the discovery of additional significant deficiencies or a material weakness and their possible effect on our results, could have material and adverse effect on our stock price.
We have experienced recurring losses from operations and negative cash flows from operating activities and anticipate that we will continue to incur significant operating losses in the future.
The size of our losses will depend, in part, on the rate of future expenditures, our ability to execute on our acquisition strategy and our ability to generate revenues.
We incurred a net loss of $23.8 million for the year ended December 31, 2 024 .
Our accumulated deficit increased to $ 155.8 million as of December 31, 2 024 , compared to the prior year’s deficit of $133.3 million.
If our products do not achieve sufficient market acceptance and our revenues do not increase significantly, we may never become profitable.
Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods.
If we are not able to successfully execute on our future operating plans and objectives, our financial condition and results of operation may be materially adversely affected, and we may not be able to continue as a going concern.
It is important that we meet our sales goals and increase sales going forward as our operating plan already reflects prior significant cost containment measures and may make it difficult to achieve top-line growth if further significant reductions become necessary.
If we do not meet our sales goals, our available cash and working capital will decrease and our financial condition will be negatively impacted.
In order to be successful, we believe that we must, among other things: ● increase the sales volume and gross margins for our products and those that we will acquire; ● maintain efficiencies in operations; ● manage our operating expenses to sufficiently support operating activities; ● maintain fixed costs at or near current levels; and ● avoid significant increases in variable costs relating to production, marketing and distribution.
We may not be able to meet these objectives, which could have a material adverse effect on our results of operations.
We have incurred significant operating expenses in the past and may do so again in the future and, as a result, will need to increase revenues in order to improve our results of operations.
Our ability to increase sales will depend primarily on success in expanding our current markets, improving our distribution base, entering into Direct-To-Retail (DTR) arrangements with national accounts, and introducing new brands, products or product extensions to the market.
Our ability to successfully enter new distribution areas and obtain national accounts will, in turn, depend on various factors, many of which are beyond our control, including, but not limited to, the continued demand for our brands and products in target markets, the ability to price our products at competitive levels, available positions within the retailer’s planograms, the ability to establish and maintain relationships with distributors in each geographic area of distribution and the ability in the future to create, develop and successfully introduce one or more new brands, products, and product extensions.
Our growth strategy is based in part on growth through strategic initiatives including both acquisitions and divestitures, which poses a number of risks.
The execution of our strategic initiatives could entail repositioning or similar actions that in turn require us to record impairments, restructuring and other charges.
Any such charges would reduce our earnings.
Moreover, our customers may, in response to the announcement or consummation of a transaction, delay or defer purchasing decisions.
If our customers delay or defer purchasing decisions, our revenues could materially decline or any anticipated increases in revenue could be lower than expected.
Failure to Successfully Integrate Acquired Businesses, Its Products and Other Assets into the Company, or If Integrated, Failure to Further the Company’s Business Strategy, May Result in the Company’s Inability to Realize Any Benefit from Such Acquisition.
The consummation and integration of any acquired business, product or other assets into the Company may be complex and time-consuming and, if such businesses and assets are not successfully integrated, the Company may not achieve the anticipated benefits, cost-savings or growth opportunities.
When the Company acquires cannabis businesses, it may obtain the rights to applications for licenses as well as licenses; however, the procurement of such applications for licenses and licenses generally will be subject to governmental and regulatory approval.
There are no guarantees that the Company will successfully consummate such acquisitions, and even if the Company consummates such acquisitions, the procurement of applications for licenses may never result in the grant of a license by any state or local governmental or regulatory agency and the transfer of any rights to licenses may never be approved by the applicable state and/or local governmental or regulatory agency.
Our beverage portfolio is comprised of a number of unique brands with reputations and consumer imagery that have been built over time.
If we do not adequately anticipate or adjust to respond to these and other changes in consumer preferences, we may not be able to maintain and grow our brand image and our sales may be adversely affected.
The principal raw materials we use include glass bottles, aluminum cans, PET, fiber-board, labels and cardboard cartons, flavorings and sweeteners.
These component and ingredient costs are subject to fluctuation.
If there were to be substantial increases in the prices of our ingredients, raw materials and packaging materials, to the extent that they cannot be recouped through increases in the prices of finished beverage products, would increase our operating costs and could reduce our profitability.
If our supply of these raw materials is impaired or if prices increase significantly, it could affect the affordability of our products and reduce sales.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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