Splash Beverage Group's Revenue Plunges 88%, Operations Halted Amid Capital Crunch

TL;DR

**SBEV is a distressed asset, pivoting to a capital-intensive water business after suspending core operations; avoid until clear funding and execution emerge.**

AI Summary

SPLASH BEVERAGE GROUP, INC. (SBEV) reported a significant decline in net revenues for the nine months ended September 30, 2025, plummeting to $438,272 from $3,569,320 in the prior year, representing an 87.7% decrease. The company also experienced a substantial increase in net loss, reaching $22,029,577 for the nine-month period, up from $14,717,161 in 2024, an increase of 49.7%. This was largely driven by a $5,560,482 loss on extinguishment of debt and a surge in non-cash share-based compensation to $7,946,217 from $2,085,671. Operations were temporarily suspended in February 2025 due to a lack of adequate capital, impacting inventory acquisition and business maintenance. A strategic shift includes the acquisition of Costa Rican water extraction rights for $20,000,000 in June 2025, funded by Series C Preferred Stock, with plans to bottle and sell high-quality drinking water, including a purchase order from the UAE requiring $4,000,000 in capital. The company also executed a 1-for-40 reverse stock split on March 27, 2025, to maintain its NYSE American listing. Total assets dramatically increased to $22,489,297 from $2,759,185 at December 31, 2024, primarily due to the water rights acquisition.

Why It Matters

SBEV's drastic revenue decline and operational suspension signal severe distress, impacting investor confidence and potentially jeopardizing employee jobs. The company's pivot to water rights in Costa Rica, valued at $20,000,000, represents a high-risk, high-reward strategy, requiring substantial capital ($4,000,000 for one order) to execute. This shift places SBEV in direct competition with established beverage giants, a challenging prospect given its current financial instability. For investors, the significant increase in net loss and reliance on non-cash compensation raise red flags about long-term viability and shareholder value, especially after the 1-for-40 reverse stock split.

Risk Assessment

Risk Level: high — The company temporarily suspended operations in February 2025 due to a 'lack of adequate capital to acquire inventory and otherwise maintain its business operations,' indicating severe liquidity issues. Net revenues plummeted by 87.7% to $438,272, and the net loss increased by 49.7% to $22,029,577 for the nine months ended September 30, 2025, demonstrating significant operational and financial deterioration.

Analyst Insight

Investors should exercise extreme caution and consider divesting from SBEV. The company's operational suspension, massive revenue decline, and substantial net losses indicate a highly speculative investment. Wait for concrete evidence of successful capital raises and a clear, profitable execution strategy for the new water business before considering any position.

Financial Highlights

revenue

$438,272

total Assets

$22,489,297

net Income

-$22,029,577

cash Position

$265,667

revenue Growth

-87.7%

Key Numbers

• $438,272 — Net Revenues (87.7% decrease for nine months ended Sept 30, 2025, from $3,569,320 in 2024)
• $22,029,577 — Net Loss (49.7% increase for nine months ended Sept 30, 2025, from $14,717,161 in 2024)
• $7,946,217 — Non-cash share-based compensation (Increased from $2,085,671 in 2024 for nine months ended Sept 30, 2025)
• $5,560,482 — Loss on Extinguishment of debt (Recorded for nine months ended Sept 30, 2025)
• $20,000,000 — Water rights acquisition (Acquired in June 2025, funded by Series C Preferred Stock)
• $4,000,000 — Capital needed (Required to bottle, package, and ship initial water order to UAE)
• 1 for 40 — Reverse stock split ratio (Implemented on March 27, 2025, to maintain NYSE American listing)
• $265,667 — Cash and cash equivalents (As of September 30, 2025, up from $15,346 at December 31, 2024)
• $15,667 — Cash in excess of federally insured limits (As of September 30, 2025)
• 2,550,694 — Shares of Common Stock (Issued and outstanding as of November 19, 2025)

Key Players & Entities

• SPLASH BEVERAGE GROUP, INC. (company) — registrant
• NYSE American LLC (regulator) — stock exchange
• Qplash (company) — division of Splash Beverage Group
• Salt Tequila USA, LLC (company) — investment by Splash Beverage Group
• U.S. Securities and Exchange Commission (regulator) — regulatory body
• Chispo (company) — brand of tequila
• United Arab Emirates (person) — customer location

FAQ

Risk Factors

• Significant Revenue Decline and Increased Net Loss [high — financial]: Net revenues plummeted by 87.7% to $438,272 for the nine months ended September 30, 2025, compared to $3,569,320 in the prior year. Concurrently, the net loss widened by 49.7% to $22,029,577 from $14,717,161, driven by a $5,560,482 loss on extinguishment of debt and a substantial increase in non-cash share-based compensation to $7,946,217.
• Temporary Suspension of Operations [high — operational]: Operations were temporarily suspended in February 2025 due to a lack of adequate capital, which impacted inventory acquisition and business maintenance. This highlights a critical dependency on external funding for basic operational continuity.
• Dependence on Capital Infusion for New Ventures [medium — financial]: The acquisition of water rights for $20,000,000 was funded by Series C Preferred Stock. Furthermore, a $4,000,000 capital requirement exists for bottling, packaging, and shipping an initial order to the UAE, indicating ongoing reliance on significant capital raises for strategic initiatives.
• Reverse Stock Split to Maintain Listing [medium — regulatory]: The company executed a 1-for-40 reverse stock split on March 27, 2025, to maintain its listing on the NYSE American. This action suggests the stock price had fallen below exchange requirements, indicating potential underlying business performance issues.

Industry Context

Splash Beverage Group is navigating a highly competitive beverage market, shifting its focus from traditional beverages to premium water. The bottled water industry is characterized by established global players and increasing consumer demand for healthier options. Success will depend on differentiating its product, securing efficient distribution, and managing production costs effectively.

Regulatory Implications

The company's need to execute a reverse stock split to maintain its NYSE American listing suggests potential scrutiny regarding its financial health and stock performance. Compliance with exchange rules and accurate financial reporting are critical to avoid delisting.

What Investors Should Do

1. Monitor the execution of the water rights strategy and the UAE order fulfillment.
2. Analyze the company's ability to secure additional capital.
3. Evaluate the impact of increased non-cash compensation on future dilution.

Key Dates

• 2025-02-01: Temporary suspension of operations — Indicates severe capital constraints and operational disruption.
• 2025-03-27: 1-for-40 reverse stock split — Executed to maintain NYSE American listing, suggesting prior stock price deficiency.
• 2025-06-01: Acquisition of Costa Rican water extraction rights — Major strategic shift into the water business, funded by Series C Preferred Stock, significantly increasing assets.
• 2025-09-30: Nine months ended financial reporting — Reveals drastic revenue decline and increased net loss, alongside a substantial asset increase due to the water rights acquisition.

Glossary

Loss on extinguishment of debt

A loss recognized when a company repays or retires debt before its scheduled maturity date, often involving fees or penalties. (Contributed $5,560,482 to the increased net loss for the nine months ended September 30, 2025.)

Non-cash share-based compensation

Compensation expense recognized for stock options, restricted stock, or other equity awards that does not involve an outflow of cash. (Increased significantly to $7,946,217 from $2,085,671, contributing to the widened net loss.)

Series C Preferred Stock

A class of preferred stock, often issued in later funding rounds, typically with specific rights and preferences over common stock. (Used to fund the $20,000,000 acquisition of water rights.)

Reverse stock split

A corporate action where a company reduces the total number of its outstanding shares by a specified ratio, increasing the per-share price. (A 1-for-40 split was implemented to maintain the NYSE American listing.)

Year-Over-Year Comparison

Compared to the prior year, Splash Beverage Group has experienced a dramatic 87.7% decline in net revenues for the nine months ended September 30, 2025, falling to $438,272. This revenue drop is accompanied by a 49.7% increase in net loss, reaching $22,029,577, exacerbated by significant one-time charges like debt extinguishment and higher share-based compensation. While total assets have surged due to a major water rights acquisition, the operational challenges and severe revenue contraction present a starkly bearish financial picture compared to the previous period.

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 value per share SBEV NYSE American
• $12,670,435 — ock Issued 126,557 Shares exchanged for $12,670,435 notes payable and accrued interest $ 1
• $20 m — roducts. Subject to receipt of at least $20 million, the Company intends to secure a
• $15,667 — . At September 30, 2025 the Company had $15,667 in excess of the federally insured limi

Filing Documents

• e7014_10q.htm (10-Q) — 1301KB
• e7014_ex31-1.htm (EX-31.1) — 8KB
• e7014_ex31-2.htm (EX-31.2) — 8KB
• e7014_ex32-1.htm (EX-32.1) — 4KB
• e7014_ex32-2.htm (EX-32.2) — 4KB
• 0001731122-25-001571.txt ( ) — 5867KB
• sbev-20250930.xsd (EX-101.SCH) — 49KB
• sbev-20250930_cal.xml (EX-101.CAL) — 50KB
• sbev-20250930_def.xml (EX-101.DEF) — 155KB
• sbev-20250930_lab.xml (EX-101.LAB) — 348KB
• sbev-20250930_pre.xml (EX-101.PRE) — 274KB
• e7014_10q_htm.xml (XML) — 1032KB

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 32 ITEM 1A:

RISK FACTORS

RISK FACTORS 32 ITEM 2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 48 ITEM 3: DEFAULTS UPON SENIOR SECURITIES 48 ITEM 4: MINE SAFETY DISCLOSURES 49 ITEM 5: OTHER INFORMATION 49 ITEM 6: EXHIBITS 50

– FINANCIAL

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS Splash Beverage Group, Inc. Condensed Consolidated Financial Statements September 30, 2025 1 Splash Beverage Group, Inc. Condensed Consolidated Balance Sheets September 30, 2025 and December 31, 2024 September 30, 2025 December 31, 2024 Assets (unaudited) Current assets: Cash and cash equivalents $ 265,667 $ 15,346 Accounts receivable, net 139,504 396,855 Prepaid expenses 498,032 364,087 Inventory 855,326 893,061 Other receivables 212,544 234,770 Total current assets 1,971,073 1,904,119 Non-current assets: Deposits $ 48,922 $ 48,922 Investment in Salt Tequila USA, LLC 250,000 250,000 Water rights 20,000,000 — Right of use assets 125,546 351,336 Property and equipment, net 93,756 204,808 Total non-current assets 20,518,224 855,066 Total assets $ 22,489,297 $ 2,759,185 Liabilities and Stockholders' Equity Liabilities: Current liabilities Accounts payable and accrued expenses $ 6,746,050 $ 5,232,241 Dividends payable 422,613 — Right of use liability, current portion 120,942 305,167 Related party notes payable 389,000 389,000 Notes payable, net of discounts 5,830,998 9,632,505 Shareholder advances — 200,000 Accrued interest payable 2,132,327 3,610,329 Total current liabilities 15,641,930 19,369,242 Long-term liabilities: Notes payable, net of discounts 58,130 1,971,095 Right of use liability – net of current portion 11,685 53,697 Total long-term liabilities 69,815 2,024,792 Total liabilities 15,711,745 21,394,034 Stockholders' equity: Preferred stock, Series A $ 0.001 par value, 1,000 shares authorized, 1,000 shares issued and outstanding 1 — Preferred stock, Series A-1 $ 0.001 par value, 1,500 shares authorized, 800 shares issued and outstanding 1 — Preferred stock Series B, $ 0.001 par value, 12% cumulative, 150,000 shares authorized, 124,645 shares issued and outstanding 124 — Preferred stock S

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View this 10-Q filing on SEC EDGAR