Barfresh(BRFH) - 2023 Q4 - Annual Report

Revenue and Profitability - Revenue for Barfresh was $8,127,000 in 2023, a decrease of $1,035,000 or 11% compared to $9,162,000 in 2022[133] - Gross profit increased to $2,884,000 (36%) in 2023 from $1,440,000 (16%) in 2022, reflecting improved margins[135] - Net loss improved to approximately $2,824,000 in 2023 from $6,134,000 in 2022, a decrease of approximately $3,296,000[148] Cost Management - Cost of revenue decreased by $2,479,000 or 32% from $7,722,000 in 2022 to $5,243,000 in 2023[134] - Selling, marketing, and distribution expenses decreased by approximately $247,000 or 9% from $2,861,000 in 2022 to $2,614,000 in 2023[141] - General and administrative expenses decreased by approximately $855,000 or 24% from $3,549,000 in 2022 to $2,694,000 in 2023[143] - Research and development expenses decreased by approximately $267,000 or 70% from $382,000 in 2022 to $115,000 in 2023[139] Financial Position and Liquidity - Working capital as of December 31, 2023, was $1,846,000, compared to $1,801,000 at December 31, 2022[150] - Liquidity needs will depend on the ability to profitably ramp up sales and control variable operating expenses[151] - Operations have been financed through the sale of securities, convertible debt, and short-term debt, including related party advances[152] - If sufficient cash flow from operations is not generated, additional funds will need to be raised either through equity or debt[152] - There are no off-balance sheet arrangements that materially affect the financial condition or results of operations[153] - The company is classified as a smaller reporting company, thus quantitative and qualitative disclosures about market risk are not applicable[154] Business Developments - The company drew down $1,390,000 in convertible debt on October 23, 2023, and converted $1,207,000 of principal into 820,160 shares of common stock[149] - The company is actively working to develop additional smoothie bottle manufacturing capacity, with expectations for expansion in 2024[133] - Recent business developments with the Manufacturer are expected to negatively impact financial position, results of operations, and cash flow[151]