Investor alleges alkaline water startup hid sales data in white text

A Texas investor alleges an alkaline water startup hid sales data inside his royalty statements - in white text.

A federal lawsuit filed October 29 in Wyoming alleges a small beverage and labeling technology company took at least $3 million from a Texas investor, promised him the deal carried "absolutely no risk," and then allegedly concealed key financial data in his investor statements.

The complaint, filed in the US District Court for the District of Wyoming, says Stephen McCord invested in Plus Brand Industries Inc. between October 2023 and June 2025, buying royalty investment units at $25,000 each, a promissory note paying 22 percent annual interest, and millions of shares of preferred stock. The filing says he has received just $90,000.

According to the complaint, the company's founder and CEO told McCord the investment would "make 100X in the next six months" and that the company was "in the middle of our multiple patent valuations, expected to exceed one billion."

What makes the filing stand out is how McCord alleges the company handled his royalty statements.

Plus Brand sent him five monthly statements in 2024, each with a column labeled "GROSS SALES," according to the complaint. On the face of every statement, the filing says, that column was blank. The statements instead described each payment as a "baseline monthly return" - a term the complaint notes does not appear anywhere in the royalty agreements.

But the electronic files told a different story, the complaint alleges. The filing says each file contained a figure in that same sales column, "formatted in white text so that it does not appear on the page." According to the complaint, every hidden figure equaled the number of royalty units sold that month multiplied by the $25,000 unit price. Put another way, the number the company allegedly concealed was not product revenue - it was the total amount of money it had raised from investors.

The complaint further alleges Plus Brand paid McCord's royalties "at least in part with money raised from investors, including later purchasers of Units."

A celebrity announcement adds another layer. In March 2025, Plus Brand allegedly emailed McCord a press release announcing that boxer Floyd Mayweather Jr. had completed a "$30 million" equity investment, calling it "the first time that Plus Brand has taken in meaningful outside capital," according to the filing.

The complaint alleges this was not what it appeared. The underlying deal was a non-binding term sheet for promotional services, not a cash investment, the filing says. The company's COO later wrote to McCord that the cash investment "has not yet been completed," according to the complaint. And by October 2026, the founder wrote that "[t]here has been no $10 million or $15 million investment in the company" and that "[t]he company has had no revenue since its last communication to shareholders," the filing states.

The complaint also alleges that despite four signed preferred stock agreements, Plus Brand's own capitalization table - the one it gave to its valuation firm in 2025 - listed no preferred stock at all and did not list McCord.

According to the filing, the person who brought McCord to the deal was barred by FINRA and was not registered to sell securities in Texas. The complaint says the company's founder later told McCord he had paid this individual about $1 million over three years to bring in deals and help close them. Yet the company's amended Form D, filed with the SEC in May 2024, reported no sales compensation and no finders' fees, the filing states.

The complaint further alleges the founder was convicted of a felony in Michigan in 2005 and that the state's financial regulator found the conviction "involved fraud, dishonesty, or breach of trust," entering an order barring the founder from certain financial industry roles. According to the filing, none of this was disclosed to McCord before he invested.

The complaint brings 12 claims, including federal securities violations under the Exchange Act, Texas securities law violations, fraud, breach of contract, and breach of fiduciary duty. McCord seeks to unwind his purchases or, alternatively, recover damages of at least $2,910,000, plus payment on his promissory note with 22 percent annual interest, a court declaration of his share ownership, a full accounting, and attorney's fees.

The allegations have not been tested, and no court has made any findings or rulings in the case.