Transaction Positions Company for Accelerated Growth with Enhanced Manufacturing Capabilities and Operational Synergies Company on Track to Deliver Fiscal Year 2025 Revenue of $14.5 Million to $15.5 Million Acquisition Expected to More Than Double Revenue to $30 Million to $35 Million and Enhance Profitability in Fiscal Year 2026 LOS ANGELES, Oct. 07, 2025 (GLOBE NEWSWIRE) -- Barfresh Food Group Inc. (the “Company” or “Barfresh”) (Nasdaq: BRFH), a provider of frozen, ready-to-blend and ready-to-drink bevera ...

Market Overview - U.S. stocks experienced gains, with the Nasdaq Composite increasing by approximately 100 points on Friday. The Dow rose by 0.34% to 46,297.65, the NASDAQ increased by 0.45% to 22,572.34, and the S&P 500 gained 0.31% to 6,652.30 [1] - Consumer discretionary shares saw a rise of 0.8%, while energy stocks fell by 1% on the same day [1] Company Performance - Lennar Corp. reported weaker-than-expected third-quarter results, with adjusted earnings of $2 per share, missing the consensus estimate of $2.10. Quarterly revenue was $8.81 billion, below the Street estimate of $8.99 billion [2] Commodity Market - In commodity news, oil prices decreased by 1.2% to $62.80, while gold prices increased by 0.3% to $3,690.40. Silver rose by 1.1% to $42.575, and copper saw a slight increase of 0.2% to $4.6080 [5] Stock Movements - AGM Group Holdings Inc. saw a significant increase in shares, rising 378% to $10.67 after announcing the sale of Nanjing Lucun Semiconductor Co. Ltd. for $57.45 million [8] - Barfresh Food Group, Inc. shares surged by 10% to $4.2201 following an increase in revenue guidance for FY26 and an upward revision of FY25 sales guidance [8] - ZOOZ Power Ltd. shares increased by 33% to $3.11 after shareholder approval for a $180 million private placement [8] - Reviva Pharmaceuticals Holdings, Inc. shares dropped by 38% to $0.2615 after announcing a $9 million offering of common shares and warrants [8] - ChowChow Cloud International shares fell by 17% to $4.45 amid post-IPO volatility [8] - Hess Midstream LP shares decreased by 9% to $35.81 after the company revised its financial outlook due to a slowdown in drilling activity by Chevron Corp [8] International Markets - European shares were mostly higher, with the eurozone's STOXX 600 rising by 0.06% and Spain's IBEX 35 Index increasing by 0.64%. However, Germany's DAX 40 fell by 0.02% [6] - Asian markets closed mostly lower, with Japan's Nikkei declining by 0.57% and China's Shanghai Composite falling by 0.30% [9]

Core Insights - Company has increased its fiscal year 2025 revenue guidance to a range of $14.5 million to $15.5 million, up from a previous range of $12.5 million to $14.0 million [1][2] - Preliminary fiscal year 2026 pro forma revenue guidance is set at $30 million to $35 million, indicating a 126% increase compared to the high end of fiscal 2025 guidance [1][2] - Acquisition of Arps Dairy, Inc. for approximately $1.6 million in debt repayment is expected to enhance manufacturing capabilities and be accretive to earnings in fiscal 2026 [1][2][3] Revenue Guidance - Fiscal year 2025 revenue guidance raised to $14.5 million to $15.5 million, reflecting operational efficiencies from the acquisition [2] - Preliminary fiscal year 2026 revenue guidance of $30 million to $35 million reflects the full-year impact of enhanced manufacturing capabilities and operational synergies [1][2] Acquisition Details - Barfresh is acquiring Arps Dairy, which includes a 15,000-square-foot processing facility and a nearly completed 44,000-square-foot manufacturing facility [1][2] - The acquisition is structured as a stock purchase for approximately $1.6 million, with closing expected by October 1, 2025 [3] - The acquisition is expected to eliminate third-party manufacturing fees, reduce freight costs, and improve operational oversight [2] Operational Advantages - The acquisition is anticipated to provide multiple operational advantages, including lower cold storage costs and more efficient ingredient procurement [2] - Barfresh has already commenced manufacturing certain products at Arps Dairy's existing facility and plans to expand production immediately upon closing [2]

Core Viewpoint - Barfresh Food Group Inc. reported a quarterly loss of $0.06 per share, consistent with the Zacks Consensus Estimate, and an improvement from a loss of $0.07 per share a year ago [1]. Financial Performance - The company posted revenues of $1.63 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 31.72%, but showing an increase from $1.46 million in the same quarter last year [2]. - Over the last four quarters, Barfresh has not surpassed consensus EPS estimates, although it has topped consensus revenue estimates twice [2][1]. Stock Performance - Barfresh shares have increased approximately 3.1% since the beginning of the year, while the S&P 500 has gained 9.6% [3]. - The current Zacks Rank for Barfresh is 3 (Hold), indicating expected performance in line with the market in the near future [6]. Earnings Outlook - The consensus EPS estimate for the upcoming quarter is breakeven on revenues of $5.11 million, and -$0.10 on revenues of $15.32 million for the current fiscal year [7]. - The trend of estimate revisions for Barfresh was mixed ahead of the earnings release, which could change following the recent report [6]. Industry Context - The Beverages - Soft drinks industry, to which Barfresh belongs, is currently ranked in the top 27% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8].

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $1,600,000, representing an 11% year-over-year growth from $1,500,000 in Q2 2024 [6][10] - Gross margin decreased to 31% in Q2 2025 from 35% in Q2 2024, attributed to product mix and new manufacturer trial costs [11] - Net loss for Q2 2025 was $880,000, an improvement from a net loss of $1,000,000 in Q2 2024 [12] Business Line Data and Key Metrics Changes - The company is expanding its manufacturing capacity with two co-manufacturers now producing products, which is expected to improve operational consistency [5][6] - The company is building inventory for the first time in many quarters, preparing for the high selling season in the education channel [7] Market Data and Key Metrics Changes - The company has only 5% market penetration in the education channel, indicating significant growth potential [8] - Interest in new products like Pop and Go 100% Juice Freeze Pops is increasing, targeting the lunch market [8] Company Strategy and Development Direction - The company is focused on solidifying its long-term supply chain and enhancing production capabilities to support sustainable growth [5][15] - The company is revising its fiscal year 2025 revenue guidance to $12,500,000 to $14,000,000, reflecting anticipated growth despite earlier manufacturing constraints [8] Management Comments on Operating Environment and Future Outlook - Management acknowledged that product supply shortages impacted revenue but emphasized progress in resolving manufacturing challenges [15] - The company expects revenue growth in the second half of the year as manufacturing capacity increases and operational consistency improves [9] Other Important Information - As of June 30, 2025, the company had approximately $1,300,000 in cash and accounts receivable and $1,800,000 in inventory [14] - Adjusted EBITDA for Q2 2025 was a loss of approximately $600,000, an improvement from a loss of approximately $682,000 in Q2 2024 [13] Q&A Session Summary Question: Progress on new school year contracts and interest in Pop and Go products - Management reported good interest in Pop and Go products, with large school districts already approving them, and the bidding process is nearing completion [20][21] Question: Commitment from customers who took products off their menus - Management indicated that most products are already approved, and customers will return them to menus once consistent supply is established [23] Question: Specific regions for near-term expansion opportunities - Management noted that increased capacity will allow broader penetration across the country, with a focus on larger populated areas [25] Question: Composition of inventory at the end of the quarter - The inventory primarily consists of bottles, built up to prepare for the school year [29][30] Question: Future manufacturing capacity and product distribution - Management expects the new manufacturing capacity to allow production in the range of 20,000,000 to 25,000,000 bottles next year, with significantly more capacity for cartons [41][42]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) This section presents Barfresh Food Group Inc.'s unaudited condensed consolidated financial statements and related notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at specific points in time Condensed Consolidated Balance Sheet Highlights (June 30, 2025 vs. December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Cash | $712,000 | $235,000 | +$477,000 | +203.0% | | Total Current Assets | $3,253,000 | $2,723,000 | +$530,000 | +19.5% | | Total Assets | $3,767,000 | $3,318,000 | +$449,000 | +13.5% | | Line of Credit | $0 | $609,000 | -$609,000 | -100.0% | | Total Current Liabilities | $1,651,000 | $2,616,000 | -$965,000 | -36.9% | | Total Liabilities | $1,720,000 | $2,740,000 | -$1,020,000 | -37.2% | | Total Stockholders' Equity | $2,047,000 | $578,000 | +$1,469,000 | +254.2% | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific periods Condensed Consolidated Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,625,000 | $1,464,000 | +$161,000 | +11.0% | | Cost of Revenue | $1,119,000 | $955,000 | +$164,000 | +17.2% | | Gross Profit | $506,000 | $509,000 | -$3,000 | -0.6% | | Loss from Operations | $(868,000) | $(1,005,000) | +$137,000 | -13.6% | | Net Loss | $(880,000) | $(1,011,000) | +$131,000 | -13.0% | | Net Loss per Share | $(0.06) | $(0.07) | +$0.01 | -14.3% | Condensed Consolidated Statements of Operations Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $4,555,000 | $4,293,000 | +$262,000 | +6.1% | | Cost of Revenue | $3,149,000 | $2,614,000 | +$535,000 | +20.5% | | Gross Profit | $1,406,000 | $1,679,000 | -$273,000 | -16.3% | | Loss from Operations | $(1,606,000) | $(1,450,000) | -$156,000 | +10.8% | | Net Loss | $(1,641,000) | $(1,460,000) | -$181,000 | +12.4% | | Net Loss per Share | $(0.10) | $(0.10) | $0.00 | 0.0% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net Cash Used in Operating Activities | $(1,575,000) | $(1,549,000) | -$26,000 | | Net Cash Used in Investing Activities | $(94,000) | $(4,000) | -$90,000 | | Net Cash Provided by Financing Activities | $2,146,000 | $45,000 | +$2,101,000 | | Net Increase (Decrease) in Cash | $477,000 | $(1,508,000) | +$1,985,000 | | Cash, End of Period | $712,000 | $383,000 | +$329,000 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the financial statements [Note 1. Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies](index=7&type=section&id=Note%201.%20Description%20of%20the%20Business,%20Basis%20of%20Presentation,%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note describes the company's operations, financial statement basis, and key accounting policies - The company manufactures and distributes ready-to-drink and ready-to-blend beverages, specifically smoothies, shakes, and frappes[16](index=16&type=chunk) Vendor Concentrations (Percentage of Finished Goods Purchased) | Manufacturer | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Manufacturer A | 44% | 45% | 48% | 56% | | Manufacturer B | 44% | 49% | 41% | 41% | | Other Manufacturers | 12% | 6% | 11% | 3% | - Manufacturer A will cease supplying Twist & Go smoothie bottles by February 2026; Manufacturer B is installing new bottling equipment expected to be operational by January 2026 with **400% additional capacity**[20](index=20&type=chunk) - Revenue is recognized when a customer obtains ownership of promised goods, typically upon delivery to a customer warehouse[28](index=28&type=chunk) Research and Development Expense | Period | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Three months ended June 30 | $31,000 | $17,000 | +$14,000 | +82.4% | | Six months ended June 30 | $49,000 | $47,000 | +$2,000 | +4.3% | [Note 2. Inventory](index=9&type=section&id=Note%202.%20Inventory) This note details the composition and valuation of the company's inventory assets Inventory Composition (June 30, 2025 vs. December 31, 2024) | Category | June 30, 2025 | December 31, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Raw materials and packaging | $470,000 | $505,000 | -$35,000 | -6.9% | | Finished goods | $1,372,000 | $995,000 | +$377,000 | +37.9% | | Inventory, net | $1,842,000 | $1,500,000 | +$342,000 | +22.8% | [Note 3. Property Plant and Equipment](index=10&type=section&id=Note%203.%20Property%20Plant%20and%20Equipment) This note outlines the company's fixed assets, including manufacturing and customer equipment Property and Equipment, Net (June 30, 2025 vs. December 31, 2024) | Category | June 30, 2025 | December 31, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Manufacturing equipment | $1,556,000 | $1,376,000 | +$180,000 | +13.1% | | Customer equipment | $1,398,000 | $1,398,000 | $0 | 0.0% | | Construction in progress | $66,000 | $152,000 | -$86,000 | -56.6% | | Total Gross Property & Equipment | $3,020,000 | $2,926,000 | +$94,000 | +3.2% | | Accumulated depreciation | $(2,700,000) | $(2,593,000) | -$107,000 | +4.1% | | Property and equipment, net | $320,000 | $333,000 | -$13,000 | -3.9% | Depreciation Expense | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Three months ended June 30 | $54,000 | $56,000 | -$2,000 | | Six months ended June 30 | $107,000 | $113,000 | -$6,000 | [Note 4. Commitments and Contingencies](index=10&type=section&id=Note%204.%20Commitments%20and%20Contingencies) This note discloses legal disputes and other potential future obligations or claims - The company is engaged in a legal dispute with a contract manufacturer (Schreiber Dispute) over quality issues and contract termination, resulting in a **$499,000 withholding of payments**[38](index=38&type=chunk)[39](index=39&type=chunk) - Non-recourse litigation financing was secured in May 2024 to fund the pursuit of the complaint against the manufacturer[40](index=40&type=chunk) - The supply disruption from the dispute has adversely impacted operations, though the company has mitigated this with single-serve smoothie cartons[41](index=41&type=chunk) [Note 5. Debt](index=11&type=section&id=Note%205.%20Debt) This note details the company's various financing agreements and outstanding debt obligations - A **$1,500,000** receivables financing facility was secured in August 2024, with no outstanding borrowings as of June 30, 2025[43](index=43&type=chunk) Financing Agreements Amounts Due (as of June 30, 2025) | Period | Amount Due | | :--- | :--- | | 2025 (6 months) | $64,000 | | 2026 | $136,000 | | Total payments due | $200,000 | | Less: interest | $(24,000) | | Net amount | $176,000 | | Less: current portion | $(107,000) | | Financing agreements (non-current) | $69,000 | - A **$2,000,000** privately placed convertible debt offering from July 2023 to March 2024 was fully settled by March 2024 through conversion into common stock[46](index=46&type=chunk)[47](index=47&type=chunk) [Note 6. Stockholders' Equity](index=12&type=section&id=Note%206.%20Stockholders'%20Equity) This note outlines changes in the company's equity, including stock issuances and compensation - On February 5, 2025, the company sold **1,052,793 shares** of common stock at **$2.85 per share** in a registered direct offering, raising **$2,974,000**[48](index=48&type=chunk) Stockholders' Equity Changes (Six Months Ended June 30, 2025) | Item | Amount | | :--- | :--- | | Balance December 31, 2024 | $578,000 | | Issuance of common stock for equity compensation, net | $(161,000) | | Equity-based compensation expense | $297,000 | | Registered issuance of common stock | $2,974,000 | | Net loss | $(1,641,000) | | Balance June 30, 2025 | $2,047,000 | - Total unrecognized share-based compensation expense is **$867,000**, expected to be recognized over a weighted average period of **2.2 years**[50](index=50&type=chunk) [Note 7. Income Taxes](index=14&type=section&id=Note%207.%20Income%20Taxes) This note explains the company's income tax provisions and deferred tax assets - A valuation allowance has been placed on all deferred tax assets, resulting in an estimated effective tax rate of **zero for 2025**[56](index=56&type=chunk) - No significant unrecognized uncertain tax positions or associated interest and penalties were incurred for the three and six months ended June 30, 2025 and 2024[58](index=58&type=chunk) [Note 8. Liquidity](index=14&type=section&id=Note%208.%20Liquidity) This note assesses the company's ability to meet its short-term obligations and fund operations - The company used **$1,575,000** in cash from operations during the six months ended June 30, 2025[59](index=59&type=chunk) - Working capital increased to **$2,101,000** as of June 30, 2025, from **$606,000** at December 31, 2024, primarily due to capital raised[59](index=59&type=chunk)[94](index=94&type=chunk) - Despite a history of operating losses and negative cash flow, actions such as securing new manufacturing capacity, obtaining litigation financing, and raising capital have alleviated substantial doubt about the company's ability to continue as a going concern[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management discusses the company's financial condition, operational results, liquidity, and capital resources [Cautionary Note Regarding Forward-Looking Statements](index=15&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note advises that future results may differ from forward-looking statements due to risks - The discussion includes forward-looking statements subject to risks and uncertainties, and actual results may differ materially[66](index=66&type=chunk)[67](index=67&type=chunk) [Critical Accounting Policies](index=15&type=section&id=Critical%20Accounting%20Policies) This section highlights key accounting policies requiring significant management judgment - Consolidated financial statements are prepared in conformity with GAAP[68](index=68&type=chunk) [Results of Operations](index=15&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance over the reported periods [Results of Operation for the Three Months Ended June 30, 2025 as Compared to the Three Months Ended June 30, 2024](index=15&type=section&id=Results%20of%20Operation%20for%20the%20Three%20Months%20Ended%20June%2030,%202025%20as%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030,%202024) This section compares the company's financial performance for the three-month periods - Revenue increased by **11% to $1,625,000**, while cost of revenue increased by **17%** due to new manufacturer trial costs and sub-optimal supply methods[69](index=69&type=chunk)[70](index=70&type=chunk) - Gross profit margin decreased from **34.8% in 2024 to 31.1% in 2025**, attributed to product mix and new manufacturer trial costs[71](index=71&type=chunk) - Selling, marketing, and distribution expenses rose by **9% to $634,000**, primarily due to a **27% increase** in storage and outbound freight costs[74](index=74&type=chunk)[75](index=75&type=chunk) - General and administrative expenses decreased by **22% to $673,000**, driven by lower personnel costs (**14% decrease**), stock-based compensation (**35% decrease**), and legal fees (**49% decrease** due to non-recourse funding)[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Net loss improved by **$131,000 to $(880,000)**, with gross margin expected to normalize in the second half of 2025 as new co-manufacturers reach full capacity[80](index=80&type=chunk) [Results of Operation for the Six Months Ended June 30, 2025 as Compared to the Six Months Ended June 30, 2024](index=17&type=section&id=Results%20of%20Operation%20for%20the%20Six%20Months%20Ended%20June%2030,%202025%20as%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030,%202024) This section compares the company's financial performance for the six-month periods - Revenue increased by **6% to $4,555,000**, but cost of revenue increased by **20%** due to new manufacturer trial costs and sub-optimal supply[81](index=81&type=chunk)[82](index=82&type=chunk) - Gross profit margin decreased significantly from **39.1% in 2024 to 30.9% in 2025**, primarily due to product mix and new manufacturer trial and development costs[83](index=83&type=chunk) - Selling, marketing, and distribution expenses increased by **14% to $1,458,000**, driven by higher sales and marketing costs (**13% increase**) and storage/outbound freight (**15% increase**) due to product mix and freight inefficiencies[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - General and administrative expenses decreased by **17% to $1,420,000**, mainly due to lower stock-based compensation (**43% decrease**) and legal fees (**48% decrease**), partially offset by a **10% increase** in personnel costs[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - Net loss increased by **$181,000 to $(1,641,000)**, primarily due to the decrease in gross margin and increased selling, marketing, and distribution costs[90](index=90&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash position, funding sources, and capital management - The company used **$1,575,000** in cash from operations during the first six months of 2025, with changes in current assets and liabilities using **$391,000**, mainly due to inventory investment and decreases in payables[93](index=93&type=chunk) - Working capital significantly increased to **$2,101,000** as of June 30, 2025, from **$606,000** at December 31, 2024, primarily due to a **$3,000,000** capital raise from common stock sales in February 2025[92](index=92&type=chunk)[94](index=94&type=chunk) - All convertible debt from a **$2,000,000** offering (July 2023-March 2024) was fully converted into common stock by March 2024[91](index=91&type=chunk) - Future liquidity depends on profitable sales growth, control of operating expenses, and the ability to secure additional funding if necessary[95](index=95&type=chunk)[96](index=96&type=chunk) [Off-Balance Sheet Arrangements](index=19&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any material off-balance sheet transactions or obligations - The company has no off-balance sheet arrangements that are material to its financial condition or results of operations[97](index=97&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=19&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) As a smaller reporting company, Barfresh Food Group Inc. is not required to provide market risk disclosures - The company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company[98](index=98&type=chunk) [Item 4. Controls and Procedures](index=19&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management evaluated disclosure controls and procedures as effective with no changes in internal control - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of June 30, 2025[99](index=99&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[100](index=100&type=chunk) [PART II - OTHER INFORMATION](index=19&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=19&type=section&id=Item%201.%20Legal%20Proceedings.) The company is involved in an ongoing legal dispute with a contract manufacturer and another minor proceeding - Ongoing dispute with a contract manufacturer (Schreiber Dispute) regarding product quality issues and contract termination, with an unpredictable outcome[102](index=102&type=chunk) - The company is a defendant in a legal proceeding for less than **$100,000**, with a material unfavorable outcome considered remote[103](index=103&type=chunk) [Item 1A. Risk Factors](index=20&type=section&id=Item%201A.%20Risk%20Factors.) The company faces significant supply chain and manufacturing disruption risks due to reliance on limited manufacturers - Significant risk of disruption within the supply chain, contract manufacturing, or distribution channels due to reliance on a limited number of manufacturers[105](index=105&type=chunk)[107](index=107&type=chunk) - A contract manufacturer for Twist & Go smoothie bottles will cease supply by February 1, 2026, and the company is working with new and existing manufacturers to replace and increase that volume, but success is not assured[108](index=108&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=20&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) The company issued **19,920 shares** for **$50,000** to board members under registration exemptions during Q2 2025 - Issued **19,920 shares** of common stock to two board members for **$50,000** in settlement of vested restricted stock units during Q2 2025[109](index=109&type=chunk) - The issuance relied on exemptions from registration under Rule 506(b) and Section 4(a)(2) of the Securities Act[109](index=109&type=chunk) [Item 3. Defaults Upon Senior Securities](index=20&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) The company reported no defaults upon senior securities for the period - No defaults upon senior securities were reported[110](index=110&type=chunk) [Item 4. Mine Safety Disclosures](index=20&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) Mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[111](index=111&type=chunk) [Item 5. Other Information](index=20&type=section&id=Item%205.%20Other%20Information.) No other material information was reported in this section - No other information was reported[112](index=112&type=chunk) [Item 6. Exhibits](index=21&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents List of Exhibits | Exhibit No. | Description | | :--- | :--- | | 31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14(a) | | 31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14(a) | | 32.1 | Certification pursuant to 18 U.S.C. Section 1350 | | 101.INS | Inline XBRL Instance Document* | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document* | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | | 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [SIGNATURES](index=22&type=section&id=SIGNATURES) The report is signed by Barfresh Food Group Inc.'s CEO and CFO as of August 13, 2025 - The report was signed by Riccardo Delle Coste (CEO) and Lisa Roger (CFO) on August 13, 2025[115](index=115&type=chunk)[116](index=116&type=chunk)

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) Barfresh Food Group reported an 11% year-over-year revenue increase to **$1.6 million** for Q2 2025, achieving a **31%** gross margin, with operational challenges resolved by a new co-manufacturer. - **Q2 2025 Key Highlights**: * Revenue: Increased **11%** Year-over-Year to **$1.6 million**[1](index=1&type=chunk) * Gross Margin: Achieved **31%**[1](index=1&type=chunk) * New Co-Manufacturer: Completed equipment installation at the end of Q2 2025 and commenced increased supply for Q3 2025[1](index=1&type=chunk) * Outlook: Company expects an increase in revenue and gross margin for the second half of 2025 compared to the first half of 2025[1](index=1&type=chunk) - **Management Commentary**: * CEO Riccardo Delle Coste noted **11%** year-over-year revenue growth and solid margin performance despite ongoing operational challenges[2](index=2&type=chunk) * The co-manufacturing partner completed equipment installation, resolving temporary inefficiencies and elevated logistics costs that impacted first-half results[2](index=2&type=chunk) * Barfresh now has two manufacturers producing product and is focused on building consistent production capabilities[2](index=2&type=chunk) * The company maintains its guidance for double-digit year-over-year revenue growth for the full year, though expectations are adjusted to reflect the greater impact of operational challenges[2](index=2&type=chunk) * Investments in manufacturing capacity and operational improvements are building a more scalable platform for growth and improved margins over time[2](index=2&type=chunk) [Second Quarter of 2025 Financial Results](index=1&type=section&id=Second%20Quarter%20of%202025%20Financial%20Results) Barfresh's Q2 2025 revenue grew **11%** to **$1.6 million**, primarily driven by expanded bottle capacity, while gross margin decreased to **31.1%** due to product mix and new manufacturer trial costs. [Revenue Performance](index=1&type=section&id=Revenue%20Performance) Revenue increased **11%** to **$1.6 million** in Q2 2025, primarily due to expanded bottle capacity. Q2 and H1 2025 Revenue Performance | Metric | Q2 2025 | Q2 2024 | YoY Change (Q2) | H1 2025 | H1 2024 | | :----- | :------ | :------ | :-------------- | :------ | :------ | | Revenue | $1,625,000 | $1,464,000 | +11% | $4,555,000 | $4,293,000 | - The increase in revenue is primarily driven by expanded bottle capacity at an additional manufacturing location developed since the fourth quarter of 2024[3](index=3&type=chunk) [Gross Profit and Margin Analysis](index=1&type=section&id=Gross%20Profit%20and%20Margin%20Analysis) Gross profit slightly decreased in Q2 2025, with gross margin declining to **31.1%** due to product mix and new manufacturer trial costs. Q2 and H1 2025 Gross Profit and Margin | Metric | Q2 2025 | Q2 2024 | Change (Q2) | H1 2025 | H1 2024 | | :---------------- | :------ | :------ | :---------- | :------ | :------ | | Gross Profit | $506,000 | $509,000 | -$3,000 | $1,406,000 | $1,679,000 | | Gross Margin | 31.1% | 34.8% | -3.7 pp | 30.9% | 39.1% | | Adjusted Gross Margin | 31.1% | 35.1% | -4.0 pp | 30.9% | 40.3% | - The decrease in gross margin is a result of product mix and new manufacturer trial and development costs, including inefficiencies during the early production period incurred to gain additional production volume[4](index=4&type=chunk) [Operating Expenses](index=1&type=section&id=Operating%20Expenses) Q2 2025 operating expenses included **$634,000** for selling, marketing & distribution and **$673,000** for G&A. Q2 2025 Operating Expenses | Metric | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Selling, marketing & distribution | $634,000 (39% of revenue) | $583,000 (40% of revenue) | | G&A expenses | $673,000 | $865,000 | [Net Loss and Adjusted EBITDA](index=1&type=section&id=Net%20Loss%20and%20Adjusted%20EBITDA) Net loss improved to **$(880,000)** and Adjusted EBITDA loss narrowed to **$(600,000)** in Q2 2025. Q2 and H1 2025 Net Loss and Adjusted EBITDA | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------- | :-------- | :-------- | :-------- | :-------- | | Net Loss | $(880,000) | $(1,011,000) | $(1,641,000) | $(1,460,000) | | Adjusted EBITDA | $(600,000) | $(682,000) | $(1,106,000) | $(629,000) | [Balance Sheet Snapshot](index=2&type=section&id=Balance%20Sheet%20Snapshot) As of June 30, 2025, the balance sheet shows approximately **$1.3 million** in cash and accounts receivable, and **$1.8 million** in inventory. Balance Sheet as of June 30, 2025 | Asset Category | Amount | | :----------------------- | :----------- | | Cash and Accounts Receivable | ~$1.3 million | | Inventory | ~$1.8 million | [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) Barfresh presents non-GAAP measures, including Adjusted Gross Profit, EBITDA, and Adjusted EBITDA, to provide investors with a clearer understanding of the company's core business performance. - Management believes that Adjusted Gross Profit and Adjusted EBITDA provide useful information to investors as they are directly reflective of the Company's performance[7](index=7&type=chunk) - The exclusion of certain items (e.g., manufacturing relocation costs, stock compensation, product withdrawal costs, business development expenses) in calculating Adjusted Gross Profit and Adjusted EBITDA aims to provide a useful measure for period-to-period comparisons of the Company's core business performance[7](index=7&type=chunk) - Adjusted Gross Profit and Adjusted EBITDA are not recognized measurements under GAAP and should not be considered as alternatives to GAAP measures[7](index=7&type=chunk) [Updated Outlook for 2025](index=3&type=section&id=Updated%20Outlook%20for%202025) Barfresh has successfully resolved bottling production and logistics constraints, positioning the company for stronger second-half performance, though fiscal year 2025 revenue guidance has been revised downwards. - The bottling production and logistics constraints, which persisted throughout the second quarter with greater-than-anticipated impact, are believed to have been resolved[13](index=13&type=chunk) - With the second co-manufacturing partner's equipment installation complete and production capability expanded, Barfresh is positioned for stronger performance in the second half of the year[13](index=13&type=chunk) Revised Fiscal Year 2025 Revenue Guidance | Metric | Previous Guidance | Revised Guidance | | :---------------- | :---------------- | :--------------- | | FY2025 Revenue | $14.5 million to $16.6 million | $12.5 million to $14.0 million | [Company Information and Disclosures](index=3&type=section&id=Company%20Information%20and%20Disclosures) This section provides details on the upcoming conference call for investors, an overview of Barfresh Food Group's business operations, and important disclaimers regarding forward-looking statements. [Conference Call Details](index=3&type=section&id=Conference%20Call) This section provides details for the upcoming Q2 2025 earnings conference call, including access information. - **Conference Call Schedule**: * **Date & Time**: Wednesday, August 13, 2025, at 1:30 pm Pacific Time (4:30 pm Eastern Time)[15](index=15&type=chunk) * **Dial-in (North America)**: (877) 407-4018[15](index=15&type=chunk) * **Dial-in (International)**: (201) 689-8471[15](index=15&type=chunk) * **Telephonic Playback**: Available approximately two hours after the call until Tuesday, August 26, 2025. Passcode: 13754380[15](index=15&type=chunk) * **Webcast**: Accessible on the Company's website at www.barfresh.com in the Investors-Presentations section[15](index=15&type=chunk) [About Barfresh Food Group](index=3&type=section&id=About%20Barfresh%20Food%20Group) Barfresh Food Group develops and distributes ready-to-blend and ready-to-drink beverages for the education and foodservice markets. - **Company Overview**: * **Business**: Developer, manufacturer, and distributor of ready-to-blend and ready-to-drink beverages, including smoothies, shakes, and frappes[16](index=16&type=chunk) * **Primary Markets**: Education market, foodservice industry, and restaurant chains[16](index=16&type=chunk) * **Product Formats**: Fully prepared individual portions or single serving and bulk formats for on-site preparation[16](index=16&type=chunk) * **Proprietary System**: Utilizes portion-controlled pre-packaged beverage ingredients for quick, cost-efficient, healthier, and waste-free freshly made frozen beverages[16](index=16&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward%20Looking%20Statements) This section clarifies that statements regarding future performance are forward-looking and subject to inherent risks and uncertainties. - Statements in the press release regarding commercial progress, strategic relationships, and future financial performance are forward-looking[17](index=17&type=chunk) - These statements are based on certain assumptions and are subject to risks and uncertainties, which may cause actual results to vary materially[17](index=17&type=chunk) - The Company expressly disclaims any current intention to publicly update any forward-looking statements after the distribution of this release[17](index=17&type=chunk) [Investor Relations](index=3&type=section&id=Investor%20Relations) Investor relations contact information is provided for inquiries regarding Barfresh Food Group. - **Investor Relations Contacts**: * John Mills, ICR, 646-277-1254, John.Mills@icrinc.com[18](index=18&type=chunk) * Deirdre Thomson, ICR, 646-277-1283, Deirdre.Thomson@icrinc.com[18](index=18&type=chunk)

Core Insights - Barfresh Food Group Inc. reported an 11% year-over-year revenue increase to $1.6 million for the second quarter of 2025, driven by expanded manufacturing capacity [4][3] - The company achieved a gross margin of 31.1% for the second quarter of 2025, down from 34.8% in the same period of 2024, attributed to product mix and new manufacturer trial costs [5][4] - Barfresh expects revenue and gross margin improvements in the second half of 2025, following the completion of equipment installation by a new co-manufacturer [2][13] Financial Performance - Revenue for the second quarter of 2025 was $1.625 million, compared to $1.464 million in the second quarter of 2024 [10] - The net loss for the second quarter of 2025 was $880,000, an improvement from a loss of $1.0 million in the second quarter of 2024 [6][10] - Adjusted EBITDA for the second quarter of 2025 was a loss of approximately $600,000, compared to a loss of $682,000 in the same quarter of 2024 [7][10] Operational Developments - The company has completed equipment installation with its new co-manufacturer, which is expected to resolve previous operational inefficiencies and logistics costs [3][2] - Barfresh is focused on building consistent production capabilities to better serve its customers, particularly in the education channel [3][2] - The company is revising its fiscal year 2025 revenue guidance to a range of $12.5 million to $14.0 million, down from a previous range of $14.5 million to $16.6 million [14][13] Future Outlook - Management remains confident in achieving double-digit year-over-year revenue growth for the full year, despite adjusting expectations due to operational challenges [3][13] - Investments in manufacturing capacity and operational improvements are aimed at creating a scalable platform for future growth [3][2] - The company anticipates being better positioned to capitalize on market opportunities as production capacity stabilizes [3][13]

分组1 - Barfresh Food Group Inc. reported a quarterly loss of $0.05 per share, which aligns with the Zacks Consensus Estimate, compared to a loss of $0.03 per share a year ago [1] - The company posted revenues of $2.93 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 8.52%, and showing an increase from $2.83 million year-over-year [2] - Barfresh Food Group shares have declined approximately 8.2% since the beginning of the year, while the S&P 500 has decreased by 5.3% [3] 分组2 - The earnings outlook for Barfresh Food Group is currently unfavorable, resulting in a Zacks Rank 5 (Strong Sell), indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $2.38 million, and for the current fiscal year, it is -$0.10 on revenues of $15.09 million [7] - The Beverages - Soft drinks industry, to which Barfresh belongs, is currently ranked in the top 33% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $2.9 million, an increase from $2.8 million in Q1 2024, primarily driven by expanded bottle capacity at existing manufacturers [11] - Gross margin for Q1 2025 was 31%, down from 41% in Q1 2024, attributed to temporary production inefficiencies and higher supply chain expenses [11][12] - Adjusted EBITDA for Q1 2025 was a loss of approximately $506,000, compared to a gain of approximately $53,000 in the same period last year [15] Business Line Data and Key Metrics Changes - The company launched a new product, Pop and Go 100% Juice Freeze Pops, which is gaining traction in the education channel, although it contributed modest revenue in Q1 [8] - The sales network now covers 95% of the U.S., with only 5% market penetration, indicating significant growth potential [9] Market Data and Key Metrics Changes - The bidding process for the 2025-2026 school year has started, with expectations of repeat orders from existing customers and new additions to the pipeline [20][21] Company Strategy and Development Direction - The company is focused on expanding manufacturing capacity and introducing new products to enhance revenue, particularly in the education channel [5][10] - Full manufacturing capacity is expected to be achieved by the end of Q2 2025, aligning with the back-to-school demand in Q3 [7] Management's Comments on Operating Environment and Future Outlook - Management reiterated full-year revenue guidance of 35% to 55% growth, with expectations for margin improvement in the second half of 2025 as new co-manufacturers come online [5][17] - The company anticipates achieving positive adjusted EBITDA in the second half of the year [7][10] Other Important Information - As of March 31, 2025, the company had approximately $3.4 million in cash and accounts receivable, and $1.1 million in inventory [16] - The company secured $3 million in growth financing in February 2025 to support scaling production capacity [16] Q&A Session Summary Question: Will the co-manufacturing partners be operational by the end of Q2 2025? - Management confirmed that they expect the co-manufacturing partners to be operational by the end of Q2, with initial production runs already taking place [18] Question: Has the bidding process for the 2025-2026 school year started? - Yes, the bidding process has started, and management is providing guidance based on existing customer expectations and pipeline opportunities [19][20] Question: Do you have sufficient inventory to meet demand for the upcoming school year? - Management confirmed that they currently have the necessary inventory to meet demand for the 2025-2026 school year [23] Question: Is the company adequately staffed for logistics and operations? - Management believes they have the right amount of staff for current needs and do not anticipate needing additional personnel [24]