Barfresh(US:BRFH)2021-11-14 16:00Business Agreements and Partnerships - Barfresh Food Group Inc. has signed a five-year agreement with PepsiCo North America Beverages to become its exclusive sales representative within the food service channel, facilitating access to potential national customer accounts [100]. - The company has a strategic distribution agreement with Sysco Corporation, the largest broadline distributor in the U.S., which includes all Barfresh products in Sysco's national core selection [97]. - Barfresh has multiple supply agreements with major global on-site foodservice operators, including a national restaurant chain with over 2,500 locations [98]. Financial Performance - Revenue increased by $1,222,936 (173%) from $707,610 in 2020 to $1,930,546 in 2021, driven by growing "Twist & Go"™ revenue and returning demand [121]. - Net losses for Q3 2021 were $506,660 compared to $878,257 in Q3 2020, reflecting an improvement in financial performance [137]. - The company reported net losses of $1,395,419 for the nine months ended September 30, 2021, compared to $2,800,843 for the same period in 2020, indicating an improvement in financial performance [157]. - Total revenue for the nine months ended September 30, 2021, increased by $2,298,842 (118%) from $1,947,766 in 2020 to $4,246,608 in 2021 [138]. Investment and Capital Structure - The company received an equity investment of $10 million from Unibel, which included the purchase of 15,625,000 shares at $0.64 per share and warrants for an additional 7,812,500 shares [102]. - The company completed a private placement of 16,666,666 shares at $0.36 per share, resulting in gross proceeds of $6,000,000 on June 1, 2021 [161]. - The company raised $4.3 million in the first quarter of 2019 through a private placement offering and warrant conversions, issuing a total of 7,141,454 shares [107]. - In March 2020, Barfresh completed a private placement offering for common shares priced at $0.50 per share, resulting in proceeds of $3,825,000 and the issuance of 7,650,000 shares [108]. Operational Metrics - The company currently employs 14 employees and 3 consultants, indicating a lean operational structure [111]. - Shipping and storage expenses increased by $208,677 (165%) from $126,737 in 2020 to $335,414 in 2021, becoming the largest expense due to higher sales volume and fuel costs [133]. - Personnel costs decreased by $20,440 (6%) from $370,010 in 2020 to $349,570 in 2021, with a reduction in full-time employees from 17 to 14 [125]. - Research and development expenses decreased by $113,284 (77%) from $147,738 in 2020 to $34,454 in 2021, primarily due to reduced labor hours [132]. Legal and Compliance - Legal and professional fees increased by $16,121 (54%) from $29,680 in 2020 to $45,801 in 2021, mainly due to legal services for up listing [127]. - The company has no off-balance sheet arrangements that could materially affect its financial condition or operations [165]. Debt and Liquidity - The company extinguished $840,000 in principal debt and converted $399,000 in principal and $280,610 in interest into 1,741,873 shares of common stock [155]. - Interest expense decreased by $292,570 (70%) to $128,064 for the nine months ended September 30, 2021, compared to $420,634 for the same period in 2020, due to the conversion and repayment of $2,005,366 in convertible notes [156]. - The company faces liquidity challenges and may need to raise additional funds if it cannot generate sufficient cash flow from operations [163]. - As of September 30, 2021, the company had a working capital surplus of $6,214,494, up from $1,196,741 at December 31, 2020, primarily due to a private placement that raised $6,000,000 [158]. Product Development - Barfresh's products are available in four formats, including portion-controlled single-serving packs and bulk "Easy Pour" formats, catering to various beverage needs [95]. - The company has developed new WHIRLZ 100% Juice Concentrates and ready-to-drink bottled smoothies, expanding its product offerings [95]. - Barfresh has received patents in 13 jurisdictions, including the U.S., for its single-serve products, enhancing its competitive position in the market [96]. Margins and Expenses - Gross profit for Q3 2021 was $721,121 (37.4%), down from $278,553 (39.4%) in Q3 2020, with expectations of improving margins to approximately 39% for the remainder of 2021 [122]. - Operating losses improved by $329,724 (39%) from $836,384 in Q3 2020 to $506,660 in Q3 2021, attributed to higher sales volume and product margin [135]. - Marketing and selling expenses decreased by $19,623 (36%) from $55,194 in 2020 to $35,571 in 2021, due to changes in sales commission agreements [130].