What changed in this filing

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Item 1. Financial Statements

2022-07-28 compared with 2022-04-28 · 136 added, 102 removed, 194 unchanged (55% of the section changed)

2 unchanged sentences

Consolidated Balance Sheets

accounts receivable, net

expenses and other current assets

current assets

Restricted cash

Trade accounts receivable, net

Other receivables

Inventory, net

Prepaid expenses and other current assets

Total current assets

Property, plant and equipment, net of depreciation

Operating lease right-of-use assets, net

Intangible assets, net of amortization

Liabilities and Stockholders’ Equity

plant and equipment, net of depreciation

lease right-of-use assets, net

assets, net of amortization

and Stockholders’ Equity

payroll and employee related

current liabilities

Accounts payable

Accrued expenses

Accrued payroll and employee related

Lease liability

Total current liabilities

Long term liabilities:

Accrued interest

Lease liability

Total liabilities

Commitments and contingencies (Note 5)

Stockholders’ equity:

Preferred stock, $ 0.000001 par value, 5,000,000 shares authorized, none issued or outstanding

Common stock, $ 0.000001 par value;

term liabilities:

and contingencies (Note 5)

Stockholders’

stock, $ 0.000001 par value, 5,000,000 shares authorized, none issued or outstanding

stock, $ 0.000001 par value;

295,000,000 shares authorized;

12,919,899 and 12,905,112 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

Additional paid in capital

Accumulated deficit

12,919,899 and 12,905,112 shares issued and outstanding at June 30, 2022

and December 31, 2021, respectively

paid in capital

( 53,796,000 )

( 52,165,000 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

stockholders’ equity

liabilities and stockholders’ equity

the accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Consolidated Statements of Operations

the three months ended March 31, 2022 and 2021

Cost of revenue

the three and six months ended June 30, 2022 and 2021

the three months ended

the six months ended

and marketing

and administrative

and amortization

operating expenses

General and administrative

Depreciation and amortization

Total operating expenses

Operating loss

Other (income)/expenses

Gain from derivative liability

Total other expense

( 1,631,000 )

( 1,151,000 )

Per share information - basic and fully diluted:

Weighted average shares outstanding

Net loss per share

(income)/expenses

from derivative liability

from debt extinguishment - Paycheck Protection Program

on debt extinguishment

other expense

$ ( 737,000 )

$ ( 297,000 )

$ ( 1,631,000 )

$ ( 889,000 )

share information - basic and fully diluted:

average shares outstanding

loss per share

the accompanying notes to the condensed consolidated financial statements

1 unchanged sentence

Consolidated Statements of Cash Flows

the three months ended March 31, 2022 and 2021

Net cash used in operating activities

the six months ended June 30, 2022 and 2021

$ ( 1,631,000 )

$ ( 889,000 )

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization

Stock-based compensation

Stock and options issued for services

Interest expense related to debt discount

Gain on debt extinguishment - Paycheck Protection Program

Gain on derivative

Loss on debt extinguishment

Changes in assets and liabilities

Accounts receivable

Other receivables

Prepaid expenses and other assets

Accounts payable

Accrued expenses

Accrued interest

Net cash used in operating activities

( 1,923,000 )

Investing activities

4 unchanged sentences

Proceeds from note payable

Repayment of convertible notes

Net cash from financing activities

6 unchanged sentences

Non-cash financing and investing activities:

Net carrying value of convertible notes and accrued interest extinguished through issuance of stock

Accrued interest paid in stock

Equipment included in accounts payable and accrued liability

62 unchanged sentences

loan, convertible notes, and derivative liabilities which were settled in 2021.

The carrying value of our financial instruments on March

31, 2022, December 31, 2021 and March 31, 2021 approximates their fair values, except for the derivative liability, which was carried

The carrying value of our financial instruments on June

30, 2022, December 31, 2021 and June 30, 2021 approximates their fair values, except for the derivative liability, which was carried

at fair value prior to its extinguishment.

March 31, 2022 and December 31, 2021, the Company had approximately $ 250,000 and $ 142,000 , respectively, in restricted cash related to

June 30, 2022 and December 31, 2021, the Company had approximately $ 211,000 and $ 142,000 , respectively, in restricted cash related to

a co-packing agreement.

of each of March 31, 2022 and December 31, 2021, the Company’s allowance for doubtful accounts was approximately $ 121,000 .

allowance was estimated based on evaluation of collectability of outstanding accounts receivable.

of December 31, 2021, the Company’s allowance for doubtful accounts was approximately $ 121,000 .

The Company did not have an allowance

for doubtful accounts as of June 30, 2022.

The allowance is estimated based on evaluation of collectability of outstanding accounts receivable.

Delinquent accounts are written-off when it is determined that the amounts are uncollectible.

receivables consist of amounts due from vendors for materials acquired on their behalf for use in manufacturing the Company’s products.

1 unchanged sentence

The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these

goods, net of rebates and other marketing allowances.

The Company applies the following five steps:

11 unchanged sentences

and is generally stated on the approved sales order.

Variable consideration, which typically includes volume-based rebates or discounts,

are estimated utilizing the most likely amount method.

Variable consideration, which typically includes rebates or discounts, are estimated

utilizing the most likely amount method and amounts recorded as revenue and accounts receivable reflect such estimates at the time

Subsequent adjustments to estimates of variable consideration have not been material.

the transaction price to performance obligations in the contract

11 unchanged sentences

and Storage Costs

and handling costs are included in general and administrative expenses.

For the three months ending March 31, 2022 and 2021, shipping

and handling costs totaled approximately $ 437,000 and $ 144,000 , respectively.

and handling costs are included in selling and marketing expenses.

For the three months ending June 30, 2022 and 2021, shipping and handling

costs totaled approximately $ 371,000 and $ 257,000 , respectively.

For the six months ending June 30, 2022 and 2021, shipping and handling

costs totaled approximately $ 757,000 and $ 401,000 , respectively.

and Development

1 unchanged sentence

The Company incurred approximately

$ 31,000 and $ 68,000 , in research and development expenses for the three months ending March 31, 2022 and 2021, respectively.

March 31, 2022 and 2021 common stock equivalents have not been included in the calculation of net loss per share as their effect is anti-dilutive

$ 97,000 and $ 127,000 , in research and development expenses for the three months ending June 30, 2022 and 2021, respectively.

months ending June 30, 2022 and 2021, research and development expense totaled approximately $ 66,000 and $ 138,000 , respectively.

June 30, 2022 and 2021 common stock equivalents have not been included in the calculation of net loss per share as their effect is anti-dilutive

as a result of losses incurred.

Reclassifications

reclassifications have been made to the 2021 financial statements to conform to the 2022 presentation, including the presentation of

selling and marketing expense apart from general and administrative expense in the condensed consolidated statement of operations, and

the presentation of a reconciliation of the components of net cash used in operating activities as well as the inclusion of operating

lease payments in operating activities in the condensed consolidated statement of cash flows.

Pronouncements

8 unchanged sentences

and equipment, net consist of the following:

of Property and Equipment

Furniture and fixtures

Manufacturing equipment and customer equipment

Leasehold improvements

of Major Classes of Property and Equipment

Manufacturing and customer equipment

Other property

Property and equipment, gross

6 unchanged sentences

expense related to these assets was approximately $ 110,000 and $ 130,000 for the three months

ended March 31, 2022 and 2021, respectively.

Depreciation expense in cost of revenue was approximately $ 6,000 for three months ended

March 31, 2021.

There was no depreciation expense in cost of revenue for the three months ended March 31, 2022.

ended June 30, 2022 and 2021, respectively, and $ 255,000 and $ 261,000 for the six months ended June 30, 2022 and 2021, respectively.

Depreciation expense in cost of revenue was approximately $ 10,000 and $ 12,000 for three months ended June 30, 2022 and 2021, respectively,

and $ 10,000 and $ 18,000 for the six months ended June 30, 2022 and 2021, respectively.

Convertible Notes and Derivative Liability (Related and Unrelated Party)

4 unchanged sentences

value of the derivative resulting from the variable conversion provisions each reporting period.

The fair value was reported as a derivative

liability and the change in value of $ 16,787

was recorded as a gain in the accompanying

condensed consolidated statement of operations for the three months ended March 31, 2021.

debt extinguishment the Company’s derivative liability was revalued at approximately $ 25,000 , resulting in a gain of approximately

$ 16,000 for the six months ended June 30, 2021.

The derivative value of $ 25,000 was included in the determining the loss on debt

extinguishment.

Commitments and Contingencies

Company leases office space under a non-cancelable operating lease which expires on March 31, 2023 .

Our periodic lease cost was approximately

each of the three months ended March 31, 2022 and 2021, respectively.

As of March 31, 2022, our right of use asset was $ 70,176 .

following table presents the future operating lease payment as of March 31, 2022.

Schedule of Estimate Future Maturities of Lease Liabilities

2022 (nine months remaining)

The Company’s periodic lease

cost was approximately $ 20,000 for each of the three months ended June 30, 2022 and 2021, respectively, and $ 40,000 for each of the six

months ended June 30, 2022 and 2021, respectively.

As of June 30, 2022, our right of use asset was approximately $ 53,000 .

following table presents the future operating lease payment as of June 30, 2022.

Schedule of Estimate Future Maturities of

Lease Liabilities

2022 (six months remaining)

Total lease payments

8 unchanged sentences

Stockholders’ Equity

following are changes in stockholders’ equity for the three months ended March 31, 2021 and March 31, 2022:

following are changes in stockholders’ equity for the six months ended June 30, 2021 and June 30, 2022:

Barfresh Food Group, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

Schedule of Changes in Stockholders' Equity

1 unchanged sentence

$ ( 50,900,000 )

Shares issued for warrant exercise

Equity based compensation

Issuance of stock for services

Balance March 31, 2021

Issuance of stock for capital raise

Conversion of debt and accrued interest

Interest paid in shares

Stock and options issued for services

Stock-based compensation

Issuance of stock for warrant exercise

Issuance of stock for warrant exercise, shares

Balance June 30, 2021

$ ( 51,789,000 )

1 unchanged sentence

$ ( 52,165,000 )

Shares issued for warrant exercise

Equity based compensation

Issuance of stock for services

Balance March 31, 2022

Issuance of stock for warrant exercise

Stock-based compensation

Stock and options issued for services

( 1,631,000 )

the three months ended March 31, 2022, 96,664 warrants at an exercise price of $ 9.10 per share expired, and 986 warrants at an exercise

price of $ 5.07 per share were exercised for proceeds of approximately $ 5,000 .

( 1,631,000 )

Balance June 30, 2022

$ ( 53,796,000 )

the six months ended June 30, 2022, 99,274 warrants at a weighted average exercise price of $ 8.97 per share expired, and 986 warrants

at an exercise price of $ 5.07 per share were exercised for proceeds of approximately $ 5,000 .

Incentive Plan

following is a summary of stock option activity for the three months ended March 31, 2022:

following is a summary of stock option activity for the six months ended June 30, 2022:

Summary of Stock Options Activity

Number of Options

Weighted average exercise price per share

Remaining term in years

average exercise

price per share

Remaining term

Outstanding on December 31, 2021

Cancelled/expired

Outstanding on March 31, 2022

Exercisable, March 31, 2022

fair value of the options issued (approximately $105,000, in the aggregate) was calculated using the Black-Sholes option pricing model,

based on the following:

Outstanding on June 30, 2022

Exercisable, June 30, 2022

fair value of the options issued was calculated using the Black-Scholes option pricing model, based on the following:

Summary of Fair Value of Options Using Black-Sholes Option Pricing Model

Expected term (in years)

Expected volatility

Risk-free interest rate

Weighted average expected volatility

Weighted average risk-free interest rate

Expected dividends

Weighted average grant date fair value per share

of March 31, 2022, the Company has approximately $ 189,000 of unrecognized share-based compensation expense related to unvested options,

of June 30, 2022, the Company has approximately $ 228,000 of unrecognized share-based compensation expense related to unvested options,

which is expected to be recognized over the remaining weighted average period of 2.4 years.

following is a summary of restricted stock award and restricted stock unit activity for the three months ended March 31, 2022:

following is a summary of restricted stock award and restricted stock unit activity for the six months ended June 30, 2022:

of Restricted Stock Award and Restricted Stock Unit Activity

Number of shares

Weighted average grant date fair value

average grant

date fair value

Unvested at January 1, 2022

Unvested at March 31, 2022

of March 31, 2022, the Company has approximately $ 202,000 of unrecognized share-based compensation expense related to restricted stock

Unvested at June 30, 2022

of June 30, 2022, the Company has approximately $ 175,000 of unrecognized share-based compensation expense related to restricted stock

awards and restricted stock units, which is expected to be recognized over the remaining weighted average period of 2.4 years.

3 unchanged sentences

valuation allowance on all tax assets.

As of March 31, 2022, the estimated effective tax rate for the year was zero .

As of June 30, 2022, the estimated effective tax rate for the 2022 was zero.

are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2017 through

1 unchanged sentence

Our policy is to account for income tax related interest and penalties in income tax expense in the statement of

the three months ended March 31, 2022 and 2021, the Company did not incur any interest and penalties associated with tax positions.

of March 31, 2022, the Company did not have any significant unrecognized uncertain tax positions.

the three and six months ended June 30, 2022 and 2021, the Company did not incur any interest and penalties associated with tax positions.

As of June 30, 2022, the Company did not have any significant unrecognized uncertain tax positions.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements