Barfresh(US:BRFH)2020-06-25 20:11Strategic Partnerships and Collaborations - Barfresh Food Group Inc. reported a strategic partnership with PepsiCo, enhancing access to national customer accounts through PepsiCo's extensive foodservice sales team [112]. - Barfresh has received approval from the United States Defense Logistics Agency to sell smoothie products to all branches of the U.S. Armed Forces, with distribution to over 150 military base locations [106]. - An equity investment from Unibel provided Barfresh with $10 million, facilitating growth in new and existing markets [114]. - The company has secured a production capacity increase to 100 million units through its partnership with Yarnell Operations, enhancing supply chain efficiency [113]. Product Offerings and Innovations - The company has launched a "no sugar added" version of its bulk "Easy Pour" format, targeting the USDA national school meal program, and currently serves over 400 school locations [106]. - The company anticipates a new product launch with the Twist & Go 8oz bottles and expects continued improvement in cash flow from operations over the next twelve months [154]. - The company holds patents in 13 jurisdictions, including the U.S., for its single-serve products, enhancing its competitive position [107]. Financial Performance - Revenue decreased by $100,654 (12%) from $834,534 in Q1 2019 to $733,880 in Q1 2020, primarily due to decreased sales of single-serve products [132]. - Gross profit for Q1 2020 was $396,799 (54.1%), compared to $434,704 (52.1%) in Q1 2019, with expectations for consistent gross profit percentage for the remainder of 2020 [133]. - Net losses for Q1 2020 were $743,066, significantly improved from $2,847,262 in Q1 2019, reflecting a reduction in operating losses [150]. - Cash used for operations in Q1 2020 was $973,554, compared to $1,873,982 in Q1 2019, indicating improved cash flow management [152]. - Total cash on the balance sheet as of March 31, 2020, was $2,411,198, including both restricted and unrestricted cash [154]. Cost Management and Expenses - General and administrative expenses decreased by $779,019 (39%) from $2,003,444 in Q1 2019 to $1,224,425 in Q1 2020, driven by lower personnel and marketing expenses [135]. - Personnel costs decreased by $538,686 (56%) from $958,866 in Q1 2019 to $420,180 in Q1 2020, with a reduction in full-time employees from 28 to 16 [135]. - Research and development expenses decreased by $70,775 (45%) from $156,199 in Q1 2019 to $85,424 in Q1 2020, primarily due to reduced labor hours [145]. Revenue Recognition and Accounting - Barfresh's revenue recognition follows ASC 606, with revenue recognized upon customer ownership transfer, primarily from frozen beverages [121]. - The change in fair value of the derivative liability resulted in a gain of $150,902 for Q1 2020, compared to a loss of $406,012 in Q1 2019 [148]. Workforce and Employment - The company has a total of 16 employees, with 10 dedicated to sales efforts [118]. - Barfresh's exclusive distribution agreement with Sysco expired in October 2019, allowing for potential expansion with other distributors [108].