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): June 1, 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) (Zip Code)
Registrant’s telephone number, including area code: (310) 598-7113
Not applicable
(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:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | Not applicable | Not applicable |
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 3.02 Unregistered Sales of Equity Securities.
On June 1, 2021, the registrant completed a private placement of 16,666,666 shares of its common stock at $0.36 per share, resulting in gross proceeds of $6,000,000. In addition, holders of debt converted a total of $399,000 in principal and $280,610 in interest into 1,741,873 shares of common stock.
The registrant relied upon the exemption from registration contained in Rule 506(b) and Section 4(a)(2) of the Securities Act, and corresponding provisions of state securities laws, on the basis that (i) offers were made to a limited number of prospective investors and existing debt holders, (ii) each offer was made through direct communication with the offerees by the registrant, (iii) each of the offerees had the requisite sophistication and financial ability to bear risks of investing in the registrant’s common stock, (iv) the registrant provided extensive disclosure to the offerees, and (v) there was no general solicitation and no commission or remuneration was paid in connection with the offers.
The balance sheet impact of the transactions described above, as well as the forgiveness of a PPP loan in the amount of $568,131 and retirement of debt in the amount of $840,000, is reflected in the unaudited pro forma balance attached hereto as Exhibit 99.2.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits relating to Item 3.02 shall be deemed to be furnished, and not filed:
| 99.1 | Press Release of Barfresh Inc. dated June 3, 2021 | |
| 99.2 | Pro forma condensed consolidated balance sheet as of March 31, 2021(unaudited) |
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: June 3, 2021 | /s/ Riccardo Delle Coste | |
| By: | Riccardo Delle Coste | |
| Its: | Chief Executive Officer | |
Exhibit 99.1
Barfresh Completes $6 million Financing to Accelerate Growth and Meet Uplisting Requirements for a National Exchange
Company Expects Continued Sequential Revenue Growth as Schools, Military, Restaurants and Amusement Parks Slowly Return to Normal Service Throughout 2021
Company Expects Strong Improvement in both Revenue and Operating Cash Flow in the Back Half of 2021 Compared to the First Half of 2021
LOS ANGELES, June 3, 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, today announced that it has completed a private placement of approximately $6 million of common stock at $0.36 per share with no warrant coverage. In addition, the Company has negotiated the conversion of approximately $0.7 million and the retirement of approximately $0.8 million of existing debt and interest. This eliminates all prior convertible debt and related interest. After these transactions, the company now has approximately $7 million of cash and no debt except for a $0.56 million Paycheck Protection Program loan that is expected to be forgiven.
The Company’s first Paycheck Protection Program “PPP” loan of $0.56 million has been forgiven. The Company was granted a second PPP loan In January 2021 for $0.56 million and also expects this loan to be forgiven in Q3 2021. The Company expects to be debt free when the second PPP loan is forgiven.
Riccardo Delle Coste, the Company’s CEO stated, “This financing dramatically improves our liquidity and will provide the appropriate capital for profitable expansion in our many and growing channels throughout 2021 and beyond as well as satisfying the shareholder equity criteria for uplisting to a national exchange. We are very well positioned to continue the penetration in the public schools throughout the United States and expect to enter the new school year in approximately double the number of locations the company is currently serving. “
Mr. Delle Coste continued, “Our new Twist & Go product combined with our bulk and single serve products has us well positioned to achieve much stronger top and bottom line improvement in the backhalf of 2021 compared to the first half. In addition, we have dramatically improved our expenses and expanded our customer base positioning us to capture a larger share of the market. I believe this is a strong vote of confidence from several of our significant long-term existing stockholders leading this offering.”
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
Exhibit 99.2
Barfresh Food Group Inc.
Proforma Condensed Consolidated Balance Sheet
March 31, 2021
Unaudited
| As presented in Form 10-Q as of March 31, 2021 as Filed | Adjustments | March 31, 2021 - Proforma | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash | $ | 1,969,797 | $ | 5,160,000 | 1,2 | $ | 7,129,797 | |||||
| Restricted cash | 142,382 | - | 142,382 | |||||||||
| Accounts receivable, net | 578,687 | - | 578,687 | |||||||||
| Inventory, net | 764,023 | - | 764,023 | |||||||||
| Prepaid expenses and other current assets | 58,649 | - | 58,649 | |||||||||
| Total current assets | 3,513,538 | 5,160,000 | 8,673,538 | |||||||||
| Property, plant and equipment, net of depreciation | 1,820,243 | - | 1,820,243 | |||||||||
| Operating lease right-of-use assets, net | 133,202 | - | 133,202 | |||||||||
| Intangible assets, net of amortization | 415,373 | - | 415,373 | |||||||||
| Deposits | 14,817 | - | 14,817 | |||||||||
| Total Assets | $ | 5,897,173 | $ | 5,160,000 | $ | 11,057,173 | ||||||
| Liabilities And Stockholders’ Equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | $ | 336,684 | $ | - | $ | 336,684 | ||||||
| Accrued expenses | 416,780 | 15,000 | 431,780 | |||||||||
| Advance payment | 401,306 | - | 401,306 | |||||||||
| Accrued payroll | 231,720 | - | 231,720 | |||||||||
| Accrued vacation | 85,272 | - | 85,272 | |||||||||
| Accrued interest | 240,047 | (240,047 | )2 | - | ||||||||
| Lease liability | 67,223 | - | 67,223 | |||||||||
| Loan payable – Paycheck Protection Program | 505,005 | (505,005 | )3 | - | ||||||||
| Convertible note - related party, net of discount | 200,625 | (200,625 | )2 | - | ||||||||
| Convertible note, net of discount | 981,753 | (981,753 | )2 | - | ||||||||
| Derivative liabilities | 24,688 | (24,688 | )2 | - | ||||||||
| Total current liabilities | 3,491,103 | (1,937,118 | ) | 1,553,985 | ||||||||
| Long term liabilities: | ||||||||||||
| Lease liability | 76,731 | - | 76,731 | |||||||||
| Loan payable – Paycheck Protection Program | 631,257 | (63,126 | )3 | 568,131 | ||||||||
| Total liabilities | 4,199,091 | (2,000,244 | ) | 2,198,847 | ||||||||
| Stockholders’ equity: | ||||||||||||
| Preferred stock, $0.000001 par value, 5,000,000 shares authorized, none issued or outstanding | ||||||||||||
| Common stock, $0.000001 par value; 295,000,000 | ||||||||||||
| shares authorized; 149,133,372 shares issued | ||||||||||||
| and outstanding at March 31, 2021 and 167,601,435 shares on a pro forma basis | 149 | 18 | 1,2 | 167 | ||||||||
| Additional paid in capital | 53,189,080 | 6,749,389 | 1,2 | 59,938,469 | ||||||||
| Accumulated deficit | (51,491,147 | ) | 410,837 | (51,080,310 | ) | |||||||
| Total stockholders’ equity | 1,698,082 | 7,160,244 | 8,858,326 | |||||||||
| Total Liabilities and Stockholders’ Equity | $ | 5,897,173 | $ | 5,160,000 | $ | 11,057,173 | ||||||
Note 1. Presentation
The unaudited pro forma condensed consolidated balance sheet has been prepared in accordance with Rule 8-05 of Regulation S-X. The unaudited pro forma condensed consolidated balance sheet as of March 31, 2021 gives effect to only the actions described below as if they had occurred at March 31, 2021, and no other changes to the balance sheet that have occurred subsequent to March 31, 2021.
The unaudited pro forma condensed consolidated balance sheet is presented for illustrative purposes only. The pro forma condensed consolidated balance sheet may not be useful in predicting the future financial condition of the Company. The Company’s actual financial position may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
The assumptions and estimates underlying the unaudited adjustments to the pro forma condensed consolidated balance sheet are described in the note below. The unaudited pro forma condensed consolidated balance sheet should be read together with the Company’s historical financial statements which are included in the Company’s latest annual report on Form 10-K and quarterly report on Form 10-Q.
Note 2. Pro Forma Adjustments
The following pro forma adjustments are included in the Company’s unaudited pro forma condensed consolidated balance sheet:
(1) Capital Raise: On June 1, 2021, the Company completed a Private Placement offering of its common stock in the amount of $6,000,000 and issued 16,666,666 shares of stock.
(2) Extinguishment of Debt: On June 1, 2021, the Company extinguished convertible debt in the principal amount of $1,239,000 and accrued interest of $280,610. The consideration included $840,000 in cash and 1,741,873 shares of the Company’s common stock valued at $679,610, which resulted in an extinguishment loss of $69,798.
(3) Paycheck Protection Program forgiveness: On May 20, 2021, the loan payable of $568,131 with the Paycheck Protection Program was forgiven. As a result, loan payable was reduced with the offset taken to the current earnings.