Barfresh(US:BRFH)2021-04-13 16:00Financial Investments - Barfresh reported a gross investment of $10 million from Unibel, with 15,625,000 shares sold at $0.64 per share and warrants for an additional 7,812,500 shares [153]. - The company raised $4.3 million in the first quarter of 2019 through a private placement offering, issuing 7,141,454 shares at $0.60 per share [158]. - In March 2020, Barfresh completed a private placement offering for common shares priced at $0.50 per share, resulting in proceeds of $3.825 million and the issuance of 7,650,000 shares [159]. - The company has financed operations through the sale of securities and convertible debt, indicating a potential need for additional funding [203]. Partnerships and Distribution - The company has exclusive distribution agreements with Sysco Corporation, the largest broadline distributor in the U.S., which includes all Barfresh products in Sysco's national core selection [149]. - The company has a strategic partnership with PepsiCo, facilitating access to a significant customer base through PepsiCo's foodservice sales team [151]. Product Development - Barfresh's new product formats include ready-to-drink bottled smoothies and 100% juice concentrates, expanding its product offerings in the beverage market [146]. - The company has received patent rights in 13 jurisdictions, enhancing its competitive position in the beverage industry [148]. Revenue and Profitability - Revenue decreased by $1,739,238, or 40%, from $4,306,785 in 2019 to $2,567,547 in 2020, primarily due to decreased sales impacted by COVID-19 [174]. - Gross profit for 2020 was $764,072 (30%) compared to $2,313,209 (54%) in 2019, reflecting a significant decline driven by the pandemic and product mix changes [175]. - General and administrative expenses decreased by $2,470,590 (36%) from $6,850,566 in 2019 to $4,379,976 in 2020, mainly due to lower personnel costs and reduced marketing expenses [176]. Operational Changes - Personnel costs decreased by $1,256,271 (44%) from $2,837,685 in 2019 to $1,581,414 in 2020, with a reduction in full-time employees from 17 to 12 [177]. - Stock-based compensation increased by $51,615 (23%) from $225,026 in 2019 to $276,641 in 2020, attributed to changes in workforce and timing of equity grants [179]. - Interest expense decreased by $734,119 (60%) from $1,213,263 in 2019 to $479,144 in 2020, due to the conversion and repayment of $2,005,366 of convertible notes [189]. - The company recorded a net gain on extinguishment of debt of $379,200, primarily from the conversion of convertible notes to common stock [191]. - The company currently employs 12 employees and 3 consultants, indicating a lean operational structure [162]. Cash Flow and Working Capital - As of December 31, 2020, the company had a working capital surplus of $1,196,741, an increase from $146,337 at the end of 2019, driven by higher cash availability from stock issuance and PPP loan proceeds [194]. - The company used cash of $3,197,782 in operations during the year ended December 31, 2020, while receiving $3,797,800 from stock issuance and $568,131 from a PPP loan [196]. Future Outlook - The company anticipates that shipping and storage expenses as a percentage of sales will continue to decrease in the future due to more efficient distribution arrangements [187]. - The Company experienced significant operational impacts due to COVID-19, particularly affecting sales in the restaurant and school channels [202]. - Supply chain disruptions have been noted as the market begins to recover from COVID-19 [202]. Lease and Financial Arrangements - The aggregate minimum lease requirement under a direct lease is $178,620 as of December 31, 2020 [204]. - There are no off-balance sheet arrangements that materially affect the Company's financial condition [205].