# Barfresh Food Group Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Barfresh Food Group Inc.](/companies/brfh.md) (CIK 1487197)
- Form: 10-Q
- Filed: 2025-05-01
- Accepted by EDGAR: May 1, 2025, 16:10 ET
- Period: 2025-03-31
- Accession: 0001641172-25-008101
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1487197/000164117225008101/form10-q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1487197/000164117225008101/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $2.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $2.0m | us-gaap:CostOfRevenue |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $900.0k | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $18.0k | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | −$738.0k | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $23.0k | us-gaap:InterestExpenseNonoperating |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | −$761.0k | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.05 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | −$0.05 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 15,387,665 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | −$506.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $28.0k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-03-31 | $1.9m | us-gaap:Cash |
| Current assets | at 2025-03-31 | $4.8m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $5.3m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $2.5m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $2.5m | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $97.0k | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $103.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-03-31 | $2.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 10,902 characters.

The following discussion should be read in conjunction with the financial information included elsewhere in this Quarterly Report on Form 10-Q (this “Report”), including our unaudited condensed consolidated financial statements and the related notes and with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 27, 2025, and other reports that we file with the SEC from time to time.

References in this Quarterly Report on Form 10-Q to “us”, “we”, “our” and similar terms refer to Barfresh Food Group Inc.

### Cautionary Note Regarding Forward-Looking Statements

This discussion includes forward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involve risks and uncertainties, such as plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as “anticipate”, “estimate”, “plan”, “continuing”, “ongoing”, “expect”, “believe”, “intend”, “may”, “will”, “should”, “could” and similar expressions are used to identify forward-looking statements.

We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

### Critical Accounting Policies

Our consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

### Results of Operations

### Results of Operation for the Three Months Ended March 31, 2025 as Compared to the Three Months Ended March 31, 2024

#### Revenue and cost of revenue

Revenue increased $101,000, or 4%, to $2,930,000 in 2025 as compared to $2,829,000 in 2024. Our revenue in 2025 benefited from increased sales of our bottled Twist & Go smoothies.

We have been able to expand our capacity on a limited basis at our existing smoothie bottle manufacturer and have been developing an additional manufacturer relationship since the fourth quarter of 2024, after the candidate we contracted with in July 2024 was unable to successfully produce product at scale. We expect expanded capacity to become available in the second half of 2025, subject to the risks and uncertainties associated with pre-production activities.

Cost of revenue increased $371,000, or 22%, to $2,030,000 in 2025 as compared to $1,659,000 in 2024. Cost of revenue increased at a higher rate compared to revenue due to trial costs at our new manufacturer and elevated costs to supply product in a sub-optimal manner while the production process at our new manufacturer is under development. The increase was partially offset by the non-recurrence of costs to relocate our single-serve manufacturing line, which amounted to $45,000 in 2024.

Our gross profit was $900,000 (31%) and $1,170,000 (41%) for 2025 and 2024, respectively. Excluding production relocation costs, our gross profit was $1,215,000 in 2024 (43%). The reduction in gross margin is a result of product mix and new manufacturer trial and developments costs.

#### Selling, marketing and distribution expense

|  | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change | Percent |
| --- | ---: | ---: | ---: | ---: |
| Sales and marketing | $433,000 | $330,000 | $103,000 | 31% |
| Storage and outbound freight | 391,000 | 364,000 | 27,000 | 7% |
|  | $824,000 | $694,000 | $130,000 | 19% |

Our operations in 2025 were primarily directed towards increasing sales and expanding our distribution network.

Selling, marketing and distribution expense increased approximately $130,000 (19%) from approximately $694,000 in 2024 to $824,000 in 2025.

Sales and marketing expense increased approximately $103,000 (31%) from approximately $330,000 in 2024 to $433,000 in 2025. The increase is a result of higher personnel costs and broker commissions due to expansion of the broker network, as well as an increase in sample expense due to the introduction of our Pop & Go freeze pops.

Storage and outbound freight expense increased approximately $27,000 (7%) from approximately $364,000 in 2024 to $391,000 in 2024, slightly higher than the 4% rate of increase in revenue primarily because of freight inefficiencies resulting from supply constraints.

#### General and administrative expense

|  | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change | Percent |
| --- | ---: | ---: | ---: | ---: |
| Personnel costs | $372,000 | $262,000 | $110,000 | 42% |
| Stock-based compensation | 158,000 | 303,000 | (145,000) | -48% |
| Legal, professional and consulting fees | 81,000 | 157,000 | (76,000) | -48% |
| Research and development | 19,000 | 30,000 | (11,000) | -37% |
| Other general and administrative expenses | 117,000 | 103,000 | 14,000 | 14% |
|  | $747,000 | $855,000 | $(108,000) | -13% |

General and administrative expenses decreased approximately $108,000 (13%) from approximately $855,000 in 2024 to $747,000 in 2025.

Personnel cost represents the cost of employees including salaries, bonuses, employee benefits and employment taxes. Personnel cost increased by approximately $110,000 (42%) from approximately $262,000 in 2024 to $372,000 in 2025. The increase in personnel cost resulted from increased head count, and acceleration of employer payroll taxes due to vesting of stock-based compensation.

Stock-based compensation decreased by approximately $145,000 (48%) from $303,000 in 2024 to $158,000 in 2025 as a result of lower expected attainment under our performance stock unit program.

Legal, professional and consulting fees decreased by approximately $76,000 (48%) from $157,000 in 2024 to $81,000 in 2025 due to a reduction in dispute related legal costs that are paid through non-recourse litigation financing that was arranged in May 2024.

Other general and administrative expenses increased by approximately $14,000 (14%) due to increased information technology costs.

#### Net loss

We had net losses of approximately $761,000 and $449,000 for the three-month periods ending March 31, 2025 and 2024, respectively. The increase in net loss of approximately $312,000 was primarily due to the 10.7 percentage point reduction in gross margin, from 41.4% to 30.7%, resulting in a reduction in gross profit of $270,000. We expect our gross margin to normalize in the second half of 2025 as new co-manufacturers are operating at full capacity and capability, improving our supply and cost structure.

### Liquidity and Capital Resources

From July 2023 to March 2024, we executed subscription agreements for substantially all of a $2,000,000 privately placed convertible debt offering. The debt was available to be drawn in 25% increments, maturing on the anniversary of the draw, bearing interest at 10% per annum for the term, regardless of earlier payment or conversion, and was mandatorily convertible as to principal and interest into shares of our common stock at any time prior to maturity at the greater of $1.20 or 85% of the volume-weighted average price of the common stock for the ten trading days immediately preceding the written notice of the conversion (the “Conversion Price”). If we had not exercised the mandatory conversion, the holder of the debt had the option after six months and on up to four occasions to convert all or any portion of the principal and interest into shares of our common stock at the Conversion Price. On October 23, 2023, we issued $1,390,000 of convertible notes pursuant to the subscription agreements, and immediately converted $1,207,000 of principal and interest into approximately 820,000 shares of common stock. Additionally, on December 19, 2023, we drew down $470,000 in convertible debt and converted a total of $653,000 of principal and $4,000 of accrued interest into 495,331 shares of common stock. Finally, on March 27 and 29, 2024, we drew down $136,000 in convertible debt and converted the total drawn into 124,208 shares, settling all debt.

On February 5, 2025, we entered into securities purchase agreements with several investors, pursuant to which we sold an aggregate of 1,052,793 shares of common stock at a price of $2.85 per share in a registered direct offering.

During the three months ended March 31, 2025, we used $506,000 in operations. Our net loss adjusted for non-cash operating expenses was a loss of $525,000, while changes in current assets and liabilities generated $19,000 primarily because of a reduction of $372,000 in inventory and increases in accounts payable and accrued expense of $222,000 and $218,000, respectively, partially offset by an increase in accounts receivable of $670,000.

As of March 31, 2025, we had working capital of $2,848,000 compared with $606,000 at December 31, 2024, both excluding disputed accounts payable of $499,000 resulting from our dispute with the Manufacturer. The increase in working capital is primarily due to capital raised in the three months ended March 31, 2025 through the sale of common stock, partially offset by losses incurred in the three months ended March 31, 2025.

Our liquidity needs will depend on how quickly we are able to profitably ramp up sales, as well as our ability to control and reduce variable operating expenses, and to continue to control fixed overhead expense.

Our operations to date have been financed by the sale of securities, the issuance of convertible debt and the issuance of short-term debt. If we are unable to generate sufficient cash flow from operations with the capital raised we will be required to raise additional funds either in the form of equity or in the form of debt. There are no assurances that we will be able to generate the necessary capital to carry out our current plan of operations.

### Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expense, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

## Controls and procedures

As filed, 1,132 characters.

### Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Securities and Exchange Act of 1934 Rule 13(a)-15(e). Disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act has been appropriately recorded, processed, summarized, and reported on a timely basis and are effective in ensuring that such information is accumulated and communicated to the Company’s management, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control over Financial Reporting

None.

Filed May 1, 2025.
Source: SEC EDGAR, the filing index for accession 0001641172-25-008101. Last ingested by Listed: Nov 6, 2026, 16:42 ET. No prices; not investment advice.