S-1: Splash Beverage Group Faces Going Concern Amid Capital Crunch

Splash Beverage Group, Inc. filed an S-1 registration statement for the resale of up to 7.76 million common shares by selling stockholders, highlighting severe liquidity issues, recurring losses, and a critical need for capital to resume operations and pursue new ventures.

Summary

• The S-1 registration statement covers the resale of up to 7,765,238 shares of Common Stock by selling stockholders, from which the company will not receive proceeds, except from cash exercise of warrants.
• The company has not generated any revenue since March 2025 due to a critical lack of capital.
• At least $2,000,000 of working capital is required to re-commence minimal operations, with an estimated $6,000,000 for short-term goals and $22,000,000 for 12-month goals related to the Costa Rica Water Assets.
• The company acquired water extraction rights in Costa Rica (Water Assets) in June 2025, valued at $20,000,000 (consideration for Series C Preferred Stock).
• A $500,000/month purchase order for bottled water has been received from a UAE distributor, but $4,000,000 is needed to bottle, package, and ship this order.
• A joint venture, BAAD Beverages LLC, was established for adult, THC, and CBD beverage products, with Splash Beverage Group's subsidiary holding a 51% financial interest for an initial capital contribution of $25,500.
• Approximately $12,700,000 of outstanding convertible notes were converted into Series B Preferred Stock in June 2025 to improve the balance sheet and regain NYSE American listing compliance.
• Secured convertible promissory notes yielded $2,000,000 in gross proceeds in September 2025.
• An Equity Line of Credit (ELOC) agreement for up to $35,000,000 was entered into with C/M Capital Master Fund, LP.
• The company reported a net loss of $23,756,551 for FY2024, $9,886,045 for Q3 2025, and $22,029,577 for the nine months ended September 30, 2025.
• The accumulated deficit stood at $178,284,467 as of September 30, 2025.
• Cash and cash equivalents were $265,667 as of September 30, 2025, and $168,000 as of December 8, 2025.
• Auditors included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern.
• Compliance with NYSE American listing standards was regained in July 2025, but future compliance is at risk due to potential stock price decline from dilution.
• Robert Nistico resigned as CEO on November 14, 2025, but remains a director; William Devereux resigned as CFO on November 30, 2025; Martin Scott was appointed Interim CFO on December 15, 2025.

Sentiment

Score: 2

Explanation: The company is in a precarious financial state with no revenue for months, significant losses, and a going concern warning. While it has secured some financing and has plans for new ventures, the capital required is substantial, and success is highly uncertain. The high dilution risk and management turnover further contribute to a negative outlook.

Positives

• Regained compliance with NYSE American listing standards in July 2025, addressing minimum stockholders' equity and timely filing requirements.
• Successfully converted approximately $12.7 million of outstanding promissory notes into Series B Preferred Stock, which improved the balance sheet and reduced interest expense.
• Acquired water extraction rights in Costa Rica (Water Assets) in June 2025, with preliminary tests indicating high purity and quality, located in a 'Blue Zone' known for longevity.
• Received a $500,000/month purchase order for bottled water from a distributor in the United Arab Emirates.
• Established a joint venture, BAAD Beverages LLC, for adult, THC, and CBD beverage products, securing a 51% financial interest.
• Secured $2 million in gross proceeds from secured convertible promissory notes in September 2025.
• Entered into an Equity Line of Credit (ELOC) agreement for up to $35 million, providing a potential source of future capital.
• The management team, led by President and Chief Marketing Officer William Meissner, possesses extensive experience in beverage distribution and brand development.

Negatives

• No revenue generated since March 2025 due to a severe lack of capital, leading to a temporary suspension of operations.
• Auditors have expressed substantial doubt about the company's ability to continue as a going concern.
• Experienced significant recurring net losses: $23,756,551 for FY2024, $9,886,045 for Q3 2025, and $22,029,577 for the nine months ended September 30, 2025.
• The accumulated deficit reached $178,284,467 as of September 30, 2025.
• Negative cash flows from operating activities totaled $8,003,919 for FY2024 and $3,828,797 for the nine months ended September 30, 2025.
• Cash and cash equivalents are critically low at $265,667 as of September 30, 2025, and $168,000 as of December 8, 2025.
• Significant additional capital is required ($2M for minimal operations, $6M for short-term water goals, $22M for 12-month water goals) to resume and expand operations.
• The company failed to meet all payroll obligations from February to September 2025, resulting in accrued unpaid wages.
• Existing stockholders face substantial dilution risk from the issuance and potential conversion/exercise of multiple classes of preferred stock, warrants, and convertible notes (totaling tens of millions of shares).
• The market price of common stock has been highly volatile, trading between $0.744 and $13.60 in 2025.
• Material weaknesses in internal control over financial reporting were identified due to limited segregation of duties and insufficient accounting employees.
• Key management turnover occurred with the resignations of former CEO Robert Nistico and former CFO William Devereux in November 2025.
• An ongoing lawsuit from TapouT, LLC seeks $1,400,000 for breach of a licensing agreement, with a legal reserve of $330,000 booked.
• The investment in Salt Tequila USA, LLC is unlikely to continue generating sales for the company in the future.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to lack of capital, recurring losses, and negative cash flows.
• Inability to raise necessary capital ($2M for minimal operations, $6M for short-term water goals, $22M for 12-month water goals) on favorable terms or at all could force cessation of operations.
• Failure to generate sufficient revenue from products (Chispo, Qplash, Water Assets) may prevent the company from achieving profitability.
• Strategic initiatives, including acquisitions and divestitures, may not be successful, could divert management attention, and create customer uncertainty, with potential for unidentified liabilities.
• Challenges in integrating and utilizing Costa Rica Water Assets, including foreign personnel, regulatory compliance, establishing production/distribution channels, and reliance on third parties, could lead to reduced margins or failure to monetize.
• Demand for products may be adversely affected by changes in consumer preferences, health concerns, or inability to innovate, market, or distribute effectively.
• Volatility in the price or availability of raw materials, packaging, energy, and labor could increase operating costs and reduce revenues.
• International trade developments, tariffs, and retaliatory tariffs could increase costs, delay deliveries, and reduce demand, particularly for products sourced from Mexico/Costa Rica or exported to the UAE.
• Government action and geopolitical conflicts could materially and adversely affect business, operations, financial position, and timelines, especially for water sales in the Middle East.
• Failure to maintain or increase brand awareness and market acceptance for products could adversely affect revenues and financial results.
• Intense competition from traditional and large, well-financed beverage manufacturers could adversely affect distribution relationships, market development, and expansion.
• Reliance on third-party distributors, retailers, brokers, contract manufacturers, and distillers introduces risks of inadequate performance, termination of relationships, increased costs, and supply chain disruptions.
• Difficulty in predicting sales and managing inventory levels could lead to shortages, spoilage, increased costs, and damaged relationships.
• Inability to attract and retain key personnel, especially after recent CEO and CFO resignations, could adversely affect efficiency and operations.
• Failure to protect trademarks and trade secrets could harm brand and reputation, and lead to costly litigation.
• Substantial indefinite-lived intangible assets (e.g., $20M for Water Assets) on the balance sheet could result in material future impairment expenses.
• Product quality issues, contamination, or recalls could tarnish brand image, reduce sales, and lead to product liability claims, especially given the current lack of product liability insurance.
• Noncompliance with various federal, foreign, state, and local regulations (production, marketing, labeling, taxation, alcohol-related restrictions) could result in penalties, license revocation, and increased costs.
• Exposure to product liability or other related liabilities, with limited or no product liability insurance currently, poses significant financial repercussions.
• Risk of counterfeit or confusingly similar products harming brand integrity and sales.
• Water scarcity, poor quality, or diminished access to Water Assets could negatively impact costs, capacity, and ability to monetize the asset.
• Failure or interruption of IT infrastructure or cybersecurity attacks could lead to operational delays, data breaches, and financial losses.
• Failure to comply with personal data protection and privacy laws could result in adverse publicity, enforcement actions, and litigation.
• Results of operations may fluctuate significantly due to seasonality, with historically higher revenues in warmer months.
• Material weaknesses in internal control over financial reporting could lead to untimely and inaccurate financial reporting.
• Failure to maintain compliance with NYSE American listing standards could result in delisting of common stock.
• The market price of common stock has been volatile and may continue to be volatile.
• Future sales of common stock or common stock equivalents (preferred stock, warrants, options, ELOC) will result in substantial dilution to existing stockholders.
• Significant additional costs and management time are required for public company responsibilities and corporate governance practices.
• Preferred stock has dividend rights and liquidation preferences that may limit or reduce the rights of common stockholders.
• Anti-takeover provisions in Nevada law and company articles/bylaws may delay or deter a change in control.

Future Outlook

The company plans to access and deploy capital from the ELOC Agreement and other financings to re-commence certain operations and establish new ones. The strategic focus will be on distributing Chispo tequila, establishing and growing material operations through the sale of water from the Costa Rica Water Assets, and re-launching the Qplash e-commerce platform as an online supplement. The company intends to secure a facility to extract water in greater quantities, requiring at least $20 million, with an estimated two-year construction timeline. Management is also exploring strategic alternatives, including acquisitions of assets or businesses outside the beverage industry, and is in preliminary discussions to acquire a majority interest in another beverage product.

Management Comments

• "We are seeking to manage brands across viable growth segments within the consumer beverage industry."
• "We have not generated any revenue since March 2025 due to our lack of capital."
• "We believe the distribution landscape in the beverage industry is changing rapidly as tech-enabled e-commerce business models are thriving."
• "Direct to consumer, office or home solutions are projected to continue to gain traction in the future."
• "Splash continues to shape its operating model to be vertically integrated with our e-commerce platform, Qplash."
• "Splash's alcoholic beverage operations are currently focused on obtaining inventory for the sale of Chispo tequila in the U.S. and certain international markets, which is subject to the Company obtaining necessary capital of at least $500,000."
• "We need to raise approximately $4,000,000 in order to bottle, package, and ship this order [from UAE customer]."
• "Because of our lack of revenue and the amount of capital we acquire to begin to generate revenue for each of our beverage businesses, we have begun looking at strategic alternatives where we may make an acquisition of assets or a business that presents value for our stockholders."
• "We are engaged in preliminary discussions with respect to acquiring a majority interest in a beverage product."
• "We remain committed to resolving these constraints and resuming normal business activities in the upcoming quarter."
• "We believe that, if we can access sufficient capital to re-commence and maintain operations, our access to high quality water from the Water Assets will provide us with a competitive strength relative to many of our competitors."

Industry Context

The company operates in the highly competitive consumer beverage industry, encompassing both non-alcoholic and alcoholic segments. It notes a rapidly changing distribution landscape with thriving tech-enabled e-commerce models and projected growth in direct-to-consumer solutions. The company's strategy to acquire and incubate brands, and its focus on "Blue Zone" sourced water, aligns with consumer trends towards health-focused and environmentally-friendly products. Its entry into adult, THC, and CBD beverages through a joint venture positions it in an emerging, regulated market segment. However, the industry is dominated by large, well-financed competitors, posing significant challenges for smaller enterprises like Splash Beverage Group in securing shelf space, marketing focus, and distribution relationships.

Comparison to Industry Standards

• The company's water from Costa Rica is stated to "outperform certain high quality water brands such as Fiji and Evian in key mineral purity benchmarks."
• The beverage industry is highly competitive, with many companies having "substantially greater financial and marketing resources" than Splash Beverage Group, indicating the company is currently below industry standards in terms of financial strength and market reach compared to major players.
• The company's lack of revenue since March 2025 and recurring significant losses are substantially below industry standards for a publicly traded beverage company aiming for growth.

Management Changes

Corporate Governance

Legal Proceedings

• TapouT, LLC filed a Complaint against the Company on August 14, 2024, in the Supreme Court of New York for New York County, alleging breach of a Licensing Agreement and seeking $1,400,000 for termination. The company believes the case will settle for a lower amount and has booked a legal reserve of $330,000. A motion to compel mediation is pending.
• On April 4, 2025, the company entered into a settlement agreement with Copa DI Vino Corporation (CdV) for two lawsuits in Oregon and Florida, agreeing to pay $0.7 million with 12% interest, with monthly payments of $63,000 starting November 4, 2025.

Related Party Transactions

• Robert Nistico (Former CEO, Director) guaranteed a revenue-based credit facility of $1,578,237 with Decathlon Alpha IV, L.P., with $177,298 outstanding and $2,113,552 accrued interest as of August 31, 2025.
• Robert Nistico guaranteed Merchant Cash Advance Agreements with Cobalt Funding Solutions and Timeless Funding LLC, with various outstanding balances.
• Related party advances from Robert Nistico of $400,000 were outstanding as of September 30, 2025, with asserted interest not yet agreed upon or accrued.
• 1,000 shares of Preferred A Stock were issued to Robert Nistico in June 2025, making him the sole holder of this super voting preferred stock.
• Robert Nistico received a grant of 750,000 five-year Warrants exercisable at $0.80 per share on August 15, 2025, subject to meeting a certain metric.
• C/M Capital Master Fund, LP (a Selling Stockholder) entered into an ELOC Agreement on September 19, 2025, for up to $35,000,000 of common stock and received 347,566 commitment shares.
• C/M Capital Master Fund, LP and WVP Emerging Manager Onshore Fund LLC purchased secured original issue discount convertible notes in September 2025 (part of $2,000,000 gross proceeds).
• C/M Capital Master Fund, LP and WVP Emerging Manager Onshore Fund LLC borrowed $500,000 from two accredited investors in November 2025, issuing senior promissory notes.
• William Devereux (Former CFO) received a grant of 1,000,000 five-year Warrants exercisable at $0.80 per share on August 15, 2025. A prepayment of approximately $146,000 for 90 days of compensation was made in September 2025, with a net amount of approximately $8,000 payable after his resignation.

Stakeholder Impact

• Shareholders face significant dilution risk from the conversion/exercise of various securities and potential total loss of investment due to going concern issues and volatile stock price. Preferred stock holders have senior dividend and liquidation preferences.
• Employees experienced unpaid wages from February to September 2025 and face uncertainty due to management turnover and the company's precarious financial state.
• Customers may experience product availability disruptions due to lack of inventory and paused operations, but could benefit from new, high-quality products if operations resume.
• Suppliers and creditors face risk of non-payment due to liquidity issues, although debt-to-equity conversions have reduced some outstanding debt.
• Regulatory authorities have noted past non-compliance with NYSE listing standards and material weaknesses in internal controls, with ongoing legal proceedings.

Next Steps

• Access and deploy capital from the ELOC Agreement and other financings.
• Re-commence certain operations and establish new ones, focusing on Chispo tequila, Water Assets, and Qplash.
• Raise at least $4,000,000 to use third parties for water extraction and shipping for initial orders.
• Raise at least $20,000,000 to build a company-owned water extraction facility (estimated two years for completion).
• Pursue strategic alternatives, including potential acquisitions of assets or businesses outside the beverage industry.
• Continue preliminary discussions to acquire a majority interest in another beverage product.
• Address material weaknesses in internal control over financial reporting.
• Continue settlement discussions with TapouT, LLC regarding the licensing agreement termination lawsuit.
• Consider increasing authorized common stock at the adjourned meeting on December 10, 2025.

Key Dates

Recommendation

The company is facing severe financial distress, evidenced by zero revenue since March 2025, substantial recurring losses, negative cash flow, and an explicit "going concern" warning from its auditors. Its cash position is critically low ($168,000 as of December 8, 2025), and it requires significant capital to merely resume minimal operations, let alone fund ambitious new ventures like the Costa Rica water project or the THC/CBD joint venture. The proposed capital raises, including the ELOC and convertible securities, carry a very high risk of substantial dilution for existing shareholders. Management turnover (CEO and CFO resignations) adds to operational uncertainty. While the company has regained NYSE compliance, its underlying financial health remains extremely weak, making it a high-risk investment with a strong likelihood of further value erosion.

Keywords

Beverage industry, SEC filing, S-1, Splash Beverage Group, SBEV, Going concern, Liquidity crisis, Capital raise, Dilution, Convertible notes, Preferred stock, Warrants, Chispo tequila, Qplash, E-commerce, Costa Rica water, Water extraction rights, THC beverages, CBD beverages, Joint venture, Financial results, Net loss, Accumulated deficit, Management changes, Corporate governance, Risk factors, Supply chain, Regulatory compliance, Product liability, Intellectual property, Market volatility, NYSE American