Barfresh(US:BRFH)2024-08-14 20:10Financial Performance - Total revenue for Q2 2024 was $1,464,000, a decrease of 3.1% from $1,511,000 in Q2 2023[4] - Gross profit for Q2 2024 increased to $509,000, up 7.4% from $474,000 in Q2 2023[4] - Net loss for Q2 2024 was $(1,011,000), compared to a net loss of $(742,000) in Q2 2023, representing a 36.4% increase in losses[4] - Revenue increased by $691,000, or 19%, to $4,293,000 in 2024 compared to $3,602,000 in 2023, driven by the acceptance of carton packaging and improved bulk sales[55] - Gross profit was $1,679,000 (39.1%) for the six months ended June 30, 2024, compared to $1,329,000 (36.9%) for the same period in 2023, reflecting improved gross margins[65] - Net loss for the three months ended June 30, 2024, was approximately $1,011,000, an increase of $269,000 from a net loss of $742,000 in 2023[65] - Net loss decreased to approximately $1,460,000 in 2024 from $1,647,000 in 2023, primarily due to an increase in gross profit[71] Assets and Liabilities - Total current assets decreased to $2,729,000 as of June 30, 2024, down 34.2% from $4,153,000 at December 31, 2023[3] - Total liabilities decreased to $1,655,000 as of June 30, 2024, down 28.2% from $2,307,000 at December 31, 2023[3] - As of June 30, 2024, the company had $1,185,000 in working capital, including $383,000 in cash[48] - Working capital as of June 30, 2024, was $1,185,000, down from $1,846,000 at December 31, 2023, primarily due to losses incurred[76] Cash Flow and Expenses - Cash at the end of Q2 2024 was $383,000, a significant decrease of 79.8% from $1,891,000 at the beginning of the period[5] - Operating expenses for Q2 2024 totaled $1,520,000, an increase of 24.9% from $1,216,000 in Q2 2023[4] - The company experienced negative cash flow of $1,549,000 in operations during the six months ended June 30, 2024[49] - Selling, marketing, and distribution expenses decreased by approximately $42,000 (7%) from $625,000 in 2023 to $583,000 in 2024[60] - General and administrative expenses increased by approximately $378,000 (77%) from $493,000 in 2023 to $871,000 in 2024, primarily due to increased personnel costs and stock-based compensation[61] - Personnel costs decreased by approximately $130,000 (18%) from $733,000 in 2023 to $603,000 in 2024 due to a reduction in headcount[70] - Stock-based compensation increased by approximately $326,000 (171%) from $191,000 in 2023 to $517,000 in 2024[70] Inventory and Production - As of June 30, 2024, the Company’s inventory totaled approximately $1,534,000, an increase from $1,214,000 as of December 31, 2023[22] - The company expects expanded production capacity to become available in the third quarter of 2024, following a contract with an additional manufacturer[56] - The company expects expanded manufacturing capacity for smoothie bottles to become available in 2024, subject to pre-production risks[77] Debt and Financing - The Company executed subscription agreements for a $2,000,000 privately placed convertible debt offering, with $1,390,000 drawn down by October 23, 2023[30] - The company secured a $1,500,000 receivables financing facility in August 2024, with a thirteen-month term and interest at prime plus 1.2%[47] - The Company executed subscription agreements for a $2,000,000 convertible debt offering, with $1,390,000 issued and $1,207,000 converted into common stock[73] Legal and Operational Challenges - The company faced supply disruptions due to a dispute with a contract manufacturer, impacting operations and cash flow until a resolution is reached[28] - Legal proceedings are ongoing with a manufacturer, which may impact financial results, but management believes a material unfavorable outcome is remote[84] Cost of Revenue - Cost of revenue increased by $341,000, or 15%, to $2,614,000 in 2024, growing at a lower rate than revenue due to product mix and improvements in raw material costs[65]