8-K: Splash Beverage Group to Merge with Medterra CBD

Splash Beverage Group announced a non-binding letter of intent to merge with Medterra CBD, aiming to transform into a cannabinoid wellness platform.

Summary

• Splash Beverage Group, Inc. (SBEV) has executed a non-binding Letter of Intent (LOI) for a proposed merger with Medterra CBD, LLC.
• Medterra CBD is a leading manufacturer and multi-brand operator of federally compliant cannabinoid wellness products, serving over 2 million customers across the United States and internationally.
• The proposed transaction represents a strategic re-alignment for Splash, transforming it into a growth-oriented platform focused on cannabinoid wellness, regulated consumer health, and scalable brand development.
• Medterra generated over $52 million in revenue and was profitable during the fiscal year 2025.
• The combined companies plan to participate in a CBD pilot initiative under evaluation by the Centers for Medicare & Medicaid Services (CMS).
• The transaction is subject to the execution of definitive agreements and shareholder approvals as required by the NYSE American Exchange.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a strategically positive and transformative move for Splash Beverage Group, positioning it in a high-growth sector, though tempered by the non-binding nature of the LOI and the significant capital raise required for closing.

Positives

• Medterra's strong financial performance, with over $52 million in revenue and profitability in fiscal year 2025, demonstrates established operational capabilities and brand equity.
• The proposed combination positions the company for category leadership in the emerging cannabinoid wellness market, leveraging operational scale and access to public markets.
• The transaction aligns with increasing regulatory clarity and growing institutional interest in federally compliant cannabinoid products, including potential federal policy developments.
• Potential participation in a CBD pilot initiative under evaluation by CMS could represent a meaningful long-term growth opportunity.
• Management believes structured reimbursement pathways for cannabinoid wellness products could significantly expand the total addressable market opportunity, potentially exceeding $30 billion in the U.S.

Negatives

• The Letter of Intent is non-binding, meaning the proposed transaction is not guaranteed to close.
• The transaction is subject to the execution of definitive agreements and requires shareholder approvals.
• The company needs to raise sufficient capital to repay Medterra's indebtedness, which is a condition to closing, and secure additional funding for working capital needs.
• An agreement must be reached with Medterra's lender on the value of certain warrants.
• Consents and approvals from third parties are required to proceed with the transaction.

Risks

• Inability to negotiate and enter into a definitive agreement for the business combination.
• Need to raise sufficient capital to repay Medterra's indebtedness (a condition to closing) and additional funding to meet working capital needs.
• Inability to reach an agreement with Medterra's lender on the value of certain warrants.
• Need for consents and approvals from third parties to proceed with the transaction, and risks arising from any failure to obtain such consents and approvals.
• Possibility that the acquisition does not yield the benefits expected or desired.
• Inability to maintain listing on NYSE American before or following the transaction, including the requirement for NYSE American approval of the change of control.
• Regulatory uncertainty and the need to comply with regulations in the highly regulated cannabinoid industry.
• Impact of any future U.S. action on tariffs, U.S. trade policy, and other government actions.
• External forces such as geopolitical conflicts and the possibility of a recession in the U.S. and abroad.
• Possibility that projections and assumptions on which forward-looking statements are based prove to be incorrect, including that positive regulatory reform in the cannabinoid product industry does not occur as or to the extent expected or desired.
• General risks contained in the company's Prospectus filed January 6, 2026.

Future Outlook

The proposed combination aims to position the Company to drive category leadership in the emerging cannabinoid wellness market. Management believes the industry is approaching a period of significant growth driven by regulatory progress, increasing consumer adoption, and institutional engagement. The companies plan to participate in a CBD pilot initiative under evaluation by CMS, which could represent a meaningful long-term growth opportunity, with the potential for the U.S. market to exceed $30 billion with federal reform and reimbursement frameworks.

Management Comments

• Brady Cobb, Board Member of Splash Beverage Group, stated: "This proposed combination represents more than a transaction – it marks the beginning of a new chapter for Splash as we evolve into a platform company built for the future of cannabinoid wellness."
• Brady Cobb also commented: "We believe the industry is approaching a period of significant growth driven by regulatory progress, increasing consumer adoption, and institutional engagement."
• Medterra's CEO, JP Larsen, stated: "This transaction represents a pivotal moment for Medterra. Partnering with Splash provides the resources and capital markets access to scale our platform at a time when the cannabinoid industry is entering a new era of legitimacy and growth driven by federal reform."

Industry Context

StockSavvy.ai notes that this strategic pivot by Splash Beverage Group into the cannabinoid wellness sector aligns with broader industry trends of increasing mainstream acceptance and regulatory evolution for hemp and CBD products. The move positions the company to capitalize on potential federal reforms and emerging healthcare channels, differentiating it from traditional beverage companies and aiming for a significant share in a rapidly expanding market.

Comparison to Industry Standards

• The filing mentions a potential U.S. market exceeding $30 billion for cannabinoid wellness products should federal reform and reimbursement frameworks advance, suggesting a significant growth opportunity compared to the current fragmented market and many niche players.
• Medterra's reported $52 million in revenue and profitability for fiscal year 2025 positions it as a substantial and financially sound player within the federally compliant CBD market, potentially outperforming many smaller, less established operators in this nascent industry.
• The focus on building a 'house of brands' and leveraging 'operational scale' mirrors strategies seen in mature consumer goods sectors, indicating an ambition to consolidate market share and achieve efficiency in a rapidly evolving space, similar to larger CPG companies entering new verticals.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for significant growth and value creation through entry into the cannabinoid wellness market, but also risks associated with transaction completion, capital raising, and regulatory uncertainty.
• Customers (Medterra): Continued access to established cannabinoid wellness products, potentially with expanded reach and resources from a publicly traded platform.
• Employees (Medterra): Integration into a public company platform, potentially offering expanded roles and opportunities within a larger, more diversified entity.
• Creditors (Medterra): Medterra's indebtedness will be repaid as a condition to closing, impacting their financial relationship with the company.

Next Steps

• Negotiate and execute definitive agreements for the proposed merger.
• Seek shareholder approvals as required by the NYSE American Exchange.
• File a Current Report on Form 8-K with the U.S. Securities and Exchange Commission with additional details regarding the proposed transaction.
• Announce additional details regarding the Company's rebranding and strategic evolution.
• Share further updates on leadership and the detailed path forward.
• Evaluate participation in the CMS CBD pilot initiative.

Key Dates

Recommendation

The proposed merger represents a significant strategic pivot into a high-growth industry with a profitable partner, offering substantial long-term potential. However, the non-binding nature of the LOI, the requirement to raise significant capital to repay Medterra's debt, and the need for various approvals introduce considerable execution risk. Investors should hold to monitor progress on definitive agreements, capital raising, and regulatory developments before making further investment decisions.

Keywords

Cannabinoid wellness, CBD, Merger, Acquisition, Medterra, Splash Beverage Group, SBEV, Hemp, Regulatory reform, Healthcare