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Splash Beverage Group (SBEV) – A High-Risk Microcap Aiming for a ‘Water Asset’ Turnaround from Its Beverage Portfolio

AI Prompt 2025. 11. 25. 08:14
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Splash Beverage Group (SBEV) – A High-Risk Microcap Aiming for a ‘Water Asset’ Turnaround from Its Beverage Portfolio

※ Splash Beverage Group (NYSE American: SBEV) is a portfolio beverage company that has owned brands such as TapouT sports drinks, Copa di Vino (cup wine), Pulpoloco (paper-can sangria), and SALT tequila across alcoholic and non-alcoholic categories. Recently, due to a lack of capital, the company has effectively halted its existing operations and is trying to restructure its business around Costa Rica underground water extraction rights (“water assets”) and a Mexican tequila brand (Chispo). However, with accumulated losses, going-concern uncertainty, and listing-compliance risk, it is an extremely high-risk, high-volatility microcap stock. 😅

 

1. Company Overview

  • Company name: Splash Beverage Group, Inc.
  • Ticker: SBEV (NYSE American)
  • Headquarters: Fort Lauderdale, Florida, USA (near East Las Olas Blvd)
  • Sector / Industry: Consumer Non-Cyclicals / Beverages

Core Business Concept

Historically, Splash was known for a portfolio-brand strategy built around the following products:

  • TapouT: Sports / functional hydration beverage
  • Copa di Vino: “Wine by the glass” in single-serve cups
  • Pulpoloco Sangria: Sangria in eco-friendly paper cans (CartoCan)
  • SALT Tequila: Flavored tequila brand
  • Qplash: B2B/B2C beverage e-commerce & delivery platform

The company’s stated goal was to become a platform beverage company: acquiring and growing early-stage / undervalued beverage brands with strong growth potential, then scaling them quickly via its distribution network (wholesale, retail, e-commerce).

2. Business Model & Brand Portfolio

2-1. Past Portfolio Strategy

  1. Brand Sourcing / Acquisition
    • Categories: Sports drinks, wine, sangria, tequila, etc.
    • Differentiation: Emphasis on lifestyle/pop-culture, convenience (cup wine, paper cans) and functionality (hydration, performance).
  2. Distribution Expansion
    • Placement in convenience and liquor chains (e.g., Thorntons/AMPM, some 7-Eleven, etc.).
    • Collaboration with regional beverage distributors (wholesale partners).
    • Use of Qplash to supply offices and households via online delivery (B2B/B2C).
  3. Revenue Model (in theory)
    • Product revenue → gross margin → covers fixed costs (marketing, distribution, payroll).
    • As brand equity improves, expand with more SKUs, more doors, and more partnerships.

2-2. The Reality in 2025

By 2025, the company has disclosed that it effectively halted operations from February onward because it could not secure inventory due to lack of capital.

  • Qplash platform temporarily suspended.
  • Distribution/marketing for the existing beverage brands either scaled down or stopped.
  • Although in the past SBEV posted several millions of dollars in annual revenue,
    Q2 2025 was reported with zero quarterly revenue.

In other words, the label “multi-brand beverage portfolio company” is now closer to a historical description, and the company is effectively in a restructuring / semi-dormant state.

3. Recent Restructuring & the Costa Rica “Water Asset” Story

3-1. Acquisition of Costa Rica Water Rights (Water Assets)

In June 2025, Splash acquired underground water extraction rights and related permits (the “Utopia” assets) in Garabito, Puntarenas, Costa Rica.

  • Rights to extract a certain volume of water from a specific aquifer.
  • Recognized on the balance sheet as an intangible asset of about USD 20 million (indefinite-lived, not amortized).
  • Business concept: extract, bottle, and export high-quality drinking water.

The company also states that it has received an order from a UAE-based customer for bottled water, but that in order to fulfill this order it would need approximately USD 4 million in additional capital for bottling, packaging, and logistics.

Furthermore, to launch full-scale production and export, the company indicates that at least USD 20 million in additional capital would be required.

3-2. Key Strategic Focus Areas (Planned)

According to the latest 10-Q, assuming successful capital raising, Splash aims to focus on three strategic initiatives:

  1. Expansion of Chispo tequila distribution
  2. Water business based on the Costa Rica water assets (extraction, bottling, export)
  3. Relaunch of the Qplash platform – primarily as an online channel for the company’s own products

In short, the story is shifting from “multi-brand beverage portfolio” to “a focused play on tequila + water assets.”

4. Financial & Valuation Snapshot (as of Q3 2025)

4-1. Profit & Cash Flow

  • Net loss for the first nine months of 2025: ~USD 22.02 million
  • Net loss for Q3 alone: ~USD 9.88 million (loss of about USD –4.51 per share)
  • Accumulated deficit: ~USD 178.3 million as of September 30, 2025
  • Net cash used in operating activities (9 months): about USD –3.82 million
  • Cash and cash equivalents: roughly USD 0.26 million (a very thin cash cushion)

4-2. Capital Structure & Going-Concern Status

  • The company has converted multiple high-interest loans and convertible notes into Series B convertible preferred stock (12% dividend) and other equity-type instruments, reducing some debt and increasing equity on paper.
  • On March 27, 2025, SBEV implemented a 1-for-40 reverse stock split, primarily to maintain NYSE American listing requirements.
  • Despite these measures:
    • Current liabilities still exceed current assets (negative working capital).
    • Operations have been effectively halted; there is an extended revenue gap.
    • There is material uncertainty regarding the ability to remain listed and to secure sufficient funding.

As a result, the 10-Q explicitly states that there is “substantial doubt” about the company’s ability to continue as a going concern.

4-3. Market Cap & Valuation

As of late November 2025 (KST) – figures may vary slightly depending on data provider and timing:

  • Recent daily price range: roughly USD 0.7–1.7, with sharp intraday moves.
  • 52-week range: approx. USD 0.71 – 13.59 (around a 90%+ decline over one year).
  • Market cap: around USD 2 million – an ultra-tiny microcap.

Compared to the USD 20 million book value of the water intangible, the market cap is extremely low. However, whether this asset can actually be monetized depends entirely on future capital raising and successful project execution.

In addition, in 2025 NYSE American initiated delisting proceedings for SBEV and its warrants, which underscores that maintaining exchange listing is itself a key risk factor.

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5. Bullish Points (Potential Upside Drivers)

“Why might someone even look at this stock?” – upside scenarios

  1. Brand Assets and Legacy Distribution
    • TapouT, Copa di Vino, Pulpoloco, SALT, etc. already have some operational history and prior shelf presence in U.S. channels such as convenience and liquor chains.
    • If the company successfully replenishes inventory and relaunches these brands, there could be a “restart momentum” angle.
  2. Option Value of the Water Assets
    • The Costa Rica water rights are carried on the books at around USD 20 million as an indefinite-lived intangible.
    • If the high-quality water export story (especially the UAE order) materializes, the market could re-rate SBEV from a “beverage portfolio” story to a **“premium water & tequila” story.
  3. Efforts to Improve the Balance Sheet via Debt-to-Equity Swaps
    • Some loans and notes have been converted into preferred equity, reducing reported debt and increasing equity.
    • If the company manages to attract additional capital on top of this, at least the short-term survival risk might be somewhat reduced.
  4. Extremely Low Price & High Volatility for Event-Driven Trading
    • With the stock down over 90% from its 52-week high and a market cap near USD 2 million, any headline related to financing, project execution, or business resumption could trigger short-term price moves of several dozen to several hundred percent.
    • From a pure trading perspective, it has the characteristics of an event-driven, ultra-high-beta microcap.

6. Bearish Risks (Downside Factors)

The things you must look at first with this name

  1. Going-Concern Risk
    • The company explicitly states in its 10-Q that there is substantial doubt about its ability to continue as a going concern, due to capital shortages, accumulated deficits, and negative working capital.
    • If additional financing is not secured, extreme outcomes such as
      asset sales (including water rights), aggressive restructuring, or even bankruptcy protection cannot be ruled out.
  2. Operational Shutdown & Revenue Gap
    • Since February 2025 the company has been effectively unable to secure inventory, leading to an operational standstill.
    • Q2 2025 revenue was reported as zero.
    • With no meaningful ongoing operations or cash generation, the longer this situation persists, the greater the risk of default and dilution.
  3. Persistent Losses & Dilution Risk
    • As of late September 2025, SBEV had an accumulated deficit of about USD 178.3 million and a nine-month net loss of about USD 22 million.
    • To service debt and fund operations, the company will likely have to rely on:
      • New convertible preferred stock
      • Additional warrants
      • Further equity raises
    • These would be heavily dilutive to existing common shareholders.
  4. Listing (Delisting) Risk
    • Despite the 1-for-40 reverse split, NYSE American has initiated delisting procedures for SBEV and its warrants.
    • If delisting occurs, liquidity will likely collapse and the stock will move to OTC markets, where spreads widen and execution risk for retail investors increases significantly.
  5. Uncertainty Around Water Asset Monetization
    • While the water rights are booked at USD 20 million, the ability to convert them into meaningful cash flow is contingent on raising at least USD 4–20 million of additional capital for bottling capacity, logistics, and scaling.
    • If the company is unable to execute, there is a real risk of future impairment charges that would further erode reported assets and equity.

7. Checkpoints & Strategy Notes for Investors

If you decide to keep SBEV on your radar, it’s essential to track at least the following four items:

  1. Financing News
    • How much capital is raised, via which instruments (common, preferred, CB, warrants), and at what terms?
    • Does the post-financing working capital position turn positive, or is it merely a short-term lifeline?
  2. Real Progress in the Water Business
    • Groundbreaking and completion of bottling facilities in Costa Rica.
    • Actual shipments and recognized revenue from UAE or other overseas customers.
    • Execution of long-term offtake agreements with credible buyers.
  3. Relaunch (or Not) of Legacy Brands
    • Whether TapouT, Copa di Vino, Pulpoloco, SALT / Chispo and other brands
      regain shelf space in major retail channels (mass grocery, convenience chains, etc.).
  4. Listing Compliance & SEC Filings
    • Ongoing compliance with NYSE American quantitative standards (price, market cap, shareholders’ equity).
    • Progress or resolution of delisting procedures.
    • Changes in 10-K/10-Q language about going-concern, NT 10-Q filings for late reports, etc.

8. Quick Q&A (FAQ)

Q1. Is SBEV still actively selling beverages today?

→ No, not in a normal sense. The company disclosed that, starting February 2025, it could not secure inventory due to lack of capital and effectively halted operations. Q2 2025 revenue was reported as zero for that reason. As of now, SBEV is closer to the stage of planning to restart around water assets and tequila than actually operating at scale.

Q2. What exactly are the Costa Rica water assets?

→ They are water extraction rights and associated permits for an underground aquifer in a specific area of Costa Rica. The plan is to extract, bottle, and export high-quality drinking water. These rights are recognized as an indefinite-lived intangible asset of around USD 20 million. However, the company itself says it needs at least USD 4–20 million in additional capital to build facilities and fulfill orders, so the economic value of this asset is entirely dependent on future funding and execution.

Q3. What is SBEV’s current financial condition?

→ As of September 30, 2025, the company had an accumulated deficit of about USD 178.3 million, a nine-month net loss of about USD 22 million, and negative operating cash flow of about USD 3.82 million. Cash on hand was only in the ~USD 0.26–0.3 million range. The company clearly states that there is substantial doubt about its ability to continue as a going concern.

Q4. What type of investor might SBEV be suitable for?

→ SBEV is essentially an extreme high-risk turnaround microcap with:

  • No current meaningful cash-generating operations
  • A business plan that is heavily conditional on new financing
  • Serious uncertainty regarding its ability to remain listed and solvent

It may appeal only to investors who:

  • Focus on event-driven, ultra-high-risk, short-term trading, and
  • Allocate only a very small portion of their portfolio to speculative positions.

For investors who prioritize stable dividends, robust cash flow, and solid balance sheets, SBEV is likely not appropriate.

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