UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 17, 2021
BARFRESH FOOD GROUP INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-55131 | 27-1994406 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
3600 Wilshire Boulevard Suite 1720, Los Angeles, California 90010
(Address of principal executive offices)
Registrant’s telephone number, including area code: (310) 598-7113
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
| Title of each class | ||||
| common stock, $0.000001 par value |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition.
On May 17, 2021, Barfresh Food Group, Inc., a Delaware corporation (the “Company”) issued an update on recent business developments in conjunction with the filing of its form 10-Q for the first quarter ended March 31, 2021.
The conference call discussing these results took place on Monday, May 17, 2021, at 1:30 pm Pacific Time (4:30 pm Eastern Time). A telephonic playback will be available through Monday, May 31, 2021.
Use of Non-GAAP Measures
Barfresh Food Group, Inc. prepares its condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). In order to aid in the understanding of the Company’s business performance, the Company has also presented certain non-GAAP measures, including EBITDA and Adjusted EBITDA, which are reconciled to net (loss) in the schedules to the press release furnished with this Current Report on Form 8-K as Exhibit 99.1. The primary factors in reconciling these items are non-cash costs, including stock compensation, stock issued for services, and gain or loss on the sale of derivatives.
Management believes that Adjusted EBITDA provides useful information to the investor because it is directly reflective of the cash flow of the Company. In addition, we use Adjusted EBITDA in developing our internal budgets, forecasts and strategic plan; in analyzing the effectiveness of our business strategies; and in making compensation decisions and in communications with our board of directors concerning our financial performance. The primary factors in reconciling these items are non-cash costs, including stock compensation, stock issued for services, and gain or loss on the sale of derivatives.
Adjusted EBITDA should not be considered as an alternative to net loss or to net cash flows from operating activities as a measure of operating results or of liquidity. It may not be comparable to similarly titled measures used by other companies and exclude financial information that some may consider important in evaluating the Company’s performance.
Forward Looking Statements
Except for historical information herein, matters set forth in this press release are forward-looking, including statements about the Company’s commercial progress and future financial performance. These forward-looking statements are identified by the use of words such as “grow”, “expand”, “anticipate”, “intend”, “estimate”, “believe”, “expect”, “plan”, “should”, “hypothetical”, “potential”, “forecast” and “project”, among others. All statements, other than statements of historical fact, included in the press release that address activities, events or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors the Company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company and may not materialize. Investors are cautioned that any such statements are not guarantees of future performance. The contents of this release should be considered in conjunction with the warnings, risk factors and cautionary statements contained in the Company’s recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Furthermore, the Company does not intend, and is not obligated, to update publicly any forward-looking statements, except as required by law.
Item 7.01. Regulation FD Disclosures.
The disclosures set forth in Item 2.02 are incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit relating to Items 2.02 and 7.01 shall be deemed to be furnished, and not filed:
| 99.1 | Press Release of Barfresh Food Group, Inc. dated May 17, 2021 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized.
Barfresh Food Group Inc., a Delaware corporation (Registrant) | ||
| Date: May 17, 2021 | /s/ Riccardo Delle Coste | |
| By: | Riccardo Delle Coste | |
| Its: | CEO | |
Exhibit 99.1
Barfresh Provides First Quarter 2021 Results and Business Update
First Quarter 2021 Revenue Increased 38% Compared to Prior Year Despite Supply Shortages
Company Expects Sequential and Year-Over-Year Revenue Improvement in Second Quarter of 2021
Company Has Already Generated Over $1.0 Million in Revenue to Date in Second Quarter of 2021
LOS ANGELES, May 17, 2021 (GLOBE NEWSWIRE) – Barfresh Food Group, Inc. (the “Company” or “Barfresh”) (OTCQB: BRFH), a manufacturer of frozen, ready-to-blend and ready-to-drink beverages, is providing a business update in conjunction with the filing of its form 10-Q for the first quarter ended March 31, 2021.
Management Comments
Riccardo Delle Coste, the Company’s Chief Executive Officer, stated, “We are off to a strong start this fiscal year with our first quarter revenue reaching over $1.0 million, despite COVID headwinds and industry-wide supply shortages affecting our business. Increased sales of not only our Twist & Go product, but also a return of our bulk and single serve products have continued into the second quarter and we are expecting the upcoming quarter to grow on both an annual and sequential basis. We have spent the past 12-months reducing our expenses, expanding our product assortment, and growing our customer base so that we are positioned to emerge stronger and ready to capture a larger share of the market once our customers return to normal capacity. Our Company is on the path to profitability and we are very excited about the additional growth opportunities in our pipleline this year.”
Financial Results
Revenue for the first quarter of 2021 increased 38% to $1.0 million, compared to $733,000 in the first quarter of 2020. The increase in revenue is the result of increased orders for the Company’s Twist & Go product in the school channel, as well as the gradual return in sales of the Company’s single and bulk serve products. Gross margins for first quarter of 2021 were 34%, compared to 54% for the first quarter of 2020. The decline in gross margins was due to product mix, as the Company’s lower margin Twist & Go product made up a larger percent of sales in the first quarter of 2021 compared to the prior year period. The Company expects gross profit margins for the remainder of 2021 to be approximately 40% due to higher concentration of sales from this product, partially offset by a gradual return of the higher margin single and bulk serve products. Net loss for the first quarter of 2021 improved to $0.6 million, as compared to a loss of $0.7 million in the first quarter of 2020. The Company continued to significantly reduce core operating expenses, reducing total G&A expenses in the first quarter of 2021 by 39% compared with the prior year period.
During the first quarter of 2021, net cash used in operating activities was $394,088, compared to $973,554 in the prior fiscal year. As of March 31, 2021, the Company had approximately $2.1 million of cash, and approximately $0.8 million of inventory on its balance sheet. The increased cash position highlights the improved expense management and the receipt of a $568,131 PPP loan during the first quarter of 2021.
The above information is presented in conformity with accounting principles generally accepted in the United States. In order to aid in the understanding of the Company’s business performance, the Company has also presented below certain non-GAAP measures, including EBITDA and Adjusted EBITDA, which are reconciled in the table below to comparable GAAP measures. Management believes that Adjusted EBITDA provides useful information to the investor because it is directly reflective of the cash flow of the Company. The primary factors in reconciling these items are non-cash costs, including stock compensation, stock issued for services, and gain or loss on derivatives. Adjusted EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income, income from operations or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of liquidity.
Adjusted EBITDA improved to a loss of $0.4 million for the first quarter of 2021, compared to a loss of $0.7 million for the first quarter of 2020. A reconciliation of Adjusted EBITDA to net (loss) is provided below.
| For the three months ended March 31, | ||||||||
| 2021 | 2020 | |||||||
| Net (loss) | $ | (591,519 | ) | $ | (743,066 | ) | ||
| Depreciation and Amortization | 146,933 | 150,148 | ||||||
| Interest | 59,091 | 295,394 | ||||||
| EBITDA | (385,495 | ) | (297,524 | ) | ||||
| Stock based compensation | (34,585 | ) | 138,712 | |||||
| Stock issued for Services | - | 12,500 | ||||||
| (Gain)/loss from debt extinguishment | - | (379,200 | ) | |||||
| (Gain)/Loss on Sale of Derivatives | (16,787 | ) | (150,902 | ) | ||||
| Adjusted EBITDA | $ | (436,867 | ) | $ | (676,414 | ) | ||
Conference Call
The conference call to discuss these results is scheduled for today, Monday, May 17, 2021, at 1:30 pm Pacific Time (4:30 pm Eastern Time). Listeners can dial (877) 407-4018 in North America, and international listeners can dial (201) 689-8471.
A telephonic playback will be available approximately two hours after the call concludes and will be available through Monday, May 31, 2021. Listeners in North America can dial (844) 512-2921, and international listeners can dial (412) 317-6671. Passcode is 13719382.
Interested parties may also listen to a simultaneous webcast of the conference call by logging onto the Company’s website at www.barfresh.com in the Investors-Presentations section.
About Barfresh Food Group
Barfresh Food Group, Inc. (OTCQB: BRFH) is a developer, manufacturer and distributor of ready-to-blend and ready-to-drink beverages, including smoothies, shakes and frappes, primarily for restaurant chains and the foodservice industry. The company’s proprietary, patented system uses portion-controlled pre-packaged beverage ingredients that deliver freshly made frozen beverages that are quick, cost efficient, better for you and without waste. Barfresh has an exclusive distribution partnership with the leading food distributor in North America. For more information, please visit www.barfresh.com.
Forward Looking Statements
Except for historical information herein, matters set forth in this press release are forward-looking, including statements about the Company’s commercial progress, success of its strategic relationship(s), and projections of future financial performance. These forward-looking statements are identified by the use of words such as “grow”, “expand”, “anticipate”, “intend”, “estimate”, “believe”, “expect”, “plan”, “should”, “hypothetical”, “potential”, “forecast” and “project”, “continue,” “could,” “may,” “predict,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. All statements, other than statements of historical fact, included in the press release that address activities, events or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments and other factors the Company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The contents of this release should be considered in conjunction with the Company’s recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, including any warnings, risk factors and cautionary statements contained therein. Furthermore, the Company expressly disclaims any current intention to update publicly any forward-looking statements after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.
Investor Relations
John Mills
ICR
646-277-1254
John.Mills@icrinc.com
Deirdre Thomson
ICR
646-277-1283
Deirdre.Thomson@icrinc.com