Splash(US:SBEV)2024-05-15 21:15Financial Performance - Net revenues for Q1 2024 were $1,540,680, a decrease of 73.5% compared to $5,822,727 in Q1 2023[16] - Gross profit for Q1 2024 was $163,615, down 90.7% from $1,761,499 in Q1 2023[16] - Net loss for Q1 2024 was $4,670,897, compared to a net loss of $3,729,299 in Q1 2023, representing an increase in loss of 25.2%[16] - For the three months ended March 31, 2024, total revenues decreased to $1,540,680 from $5,822,727 for the same period in 2023, representing a decline of approximately 73.5%[102] - The loss from continuing operations for the three months ended March 31, 2024, was $3,250,297 compared to a loss of $3,454,921 for the same period in 2023, showing a slight improvement[102] - The net loss for Q1 2024 was $5.1 million, compared to a net loss of approximately $3.7 million in Q1 2023, attributed to higher debt discount and interest expenses[114] Assets and Liabilities - Total current assets decreased to $2,836,442 as of March 31, 2024, from $3,977,248 at December 31, 2023, a decline of 28.7%[13] - Total liabilities increased to $18,061,155 as of March 31, 2024, compared to $15,504,094 at December 31, 2023, an increase of 16.7%[13] - Total stockholders' equity was negative $9,502,688 as of March 31, 2024, compared to negative $5,605,326 at December 31, 2023[13] - As of March 31, 2024, the company had a total asset value of $8,558,467, down from $9,898,768 as of March 31, 2023, reflecting a decrease of approximately 13.5%[102] - The Company has a working capital deficit, with current liabilities exceeding current assets[61] Cash Flow - Cash and cash equivalents decreased to $14,757 at the end of Q1 2024, down from $379,978 at the beginning of the year, a decline of 96.1%[20] - The Company used approximately $1.3 million in net cash for operating activities during the three-month period ended March 31, 2024[61] - Net cash used for operating activities in Q1 2024 was $1.3 million, an improvement from $4.0 million in Q1 2023, driven by decreases in inventory and accounts payable[119] Expenses - Operating expenses for Q1 2024 totaled $3,413,912, a decrease of 34.5% from $5,216,420 in Q1 2023[16] - Interest expense on notes payable was $533,578 for the three months ended March 31, 2024, compared to $167,121 for the same period in 2023[76] - Interest expenses increased to $0.5 million in Q1 2024 from $0.2 million in Q1 2023, due to new loans totaling $6.3 million[115] - Advertising expenses for the three months ended March 31, 2024, were $77,627, significantly lower than $195,048 for the same period in 2023, representing a decrease of approximately 60.3%[54] Revenue Segments - The Splash Beverage Group segment reported revenues of $1,200,282, down from $1,898,968, while the E-Commerce segment saw revenues drop to $340,398 from $3,923,759, indicating significant declines in both segments[102] - Revenues for Q1 2024 were approximately $1.5 million, a decrease of $4.3 million or 76% compared to $5.8 million in Q1 2023, primarily due to a 91% decline in revenues from the Qplash e-commerce platform[111] Future Projections and Plans - The Company plans to raise up to $8.0 million to fund acquisitions, equipment purchases, and working capital[122] - The estimated future amortization expense for acquired intangible assets for fiscal year 2024 is projected to be $294,051[58] Shareholder and Stock Information - The company issued 300,000 shares for services, 200,000 shares for the extension of a note, and 1,552,000 shares on conversion of convertible instruments during the three months ended March 31, 2024[85] - The company granted 630,000 stock options under the 2020 Stock Incentive Plan during the three months ended March 31, 2024, compared to 65,000 options granted in the same period of 2023[88] Debt and Financing - The Company entered into various loans totaling approximately $11.6 million as of March 31, 2024, with a significant portion maturing in the next 18 months[74] - The Company received approximately $1.5 million from the issuance of debt for the three months ending March 31, 2024, which helped mitigate concerns about its ability to continue as a going concern[64] - The balance of unamortized debt discount was $1,825,848 as of March 31, 2024, down from $1,944,348 as of December 31, 2023[78] - The Company recognized approximately $886,838 of interest expense attributable to the amortization of the debt discount during the three months ended March 31, 2024[77] Other Financial Information - The Company recorded amortization expense for acquired identifiable intangible assets of $98,017 for the three months ended March 31, 2024, consistent with the same period in 2023[56] - The Company reported no off-balance sheet arrangements that could materially affect its financial condition[127] - The Company has minimum royalty payments of $495,000 due to ABG TapouT, LLC for the remaining nine months of 2024[125]