Q2 2024 Barfresh Food Group Inc Earnings Call

August 14, 2024

Speaker Change: Good afternoon everyone and thank you for participating on today's second quarter 2024 corporate update call for Barfresh food group.

Operator: 2024 Corporate Update, call for Barfresh. Joining us today is Barfresh Food Group's founder and CEO, Riccardo Della Coste, and Barfresh Food Group's CFO, Lisa Roger.

Operator: 24 Corporate update call for Barfresh Food Group. Joining us today is Barfresh Food Group's founder and CEO, Riccardo Delacoste, and Barfresh Food Group's CFO, Lisa Roger.

Speaker Change: Joining us today is Barfresh Food Group's founder and CEO, Riccardo Della Coste, and Barfresh Food Group CFO, Lisa Roger. Following prepared remarks, we will open up the call for questions.

Operator: Following prepared remarks, we will open up the call for questions. The discussion today will include forward-looking statements, except for historical information herein. Matter set forth on this call are forward-looking within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about the company's commercial progress, success of its strategic relationship, 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.

Operator: Following prepared remarks, we will open the call. The discussion today will include forward-looking statements. Except for historical information herein, matters set forth on this call are forward-looking within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 19.., who in statements about the company's commercial progress, and the success of its strategic relationships. Projections of Future Financial Performance [inaudible] These forward-looking statements are identified by the use of words such as grow, expand, Anticipate, and in ten. 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.

Speaker Change: The discussion today will include forward-looking statements. Except for historical information herein, matters set forth on this call are forward-looking within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Speaker Change: Including statements about the company's commercial progress, success of its strategic relationship, and projections of future financial performance.

Speaker Change: These forward-looking statements are identified by the use of words such as grow, expand,

Speaker Change: Anticipate

Speaker Change: Intend

Speaker Change: 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.

Operator: All statements, although the statements of historical fact that address activities, events, or developments that the company believes will anticipate, will, or may occur in the future, are forward-looking statements. These statements are based on certain assumptions, may, based on experience, expected future developments, and other factors that 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.

Operator: All statements other than the statements of historical fact 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, and may be based on experience, expected future developments, and other factors that 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.

Speaker Change: All statements other than the statements of historical fact that address activities, events or developments that the company believes or anticipates will or may occur in the future are forward-looking statements.

Speaker Change: These statements are based on certain assumptions made based on experience, expected future developments and other factors that the company believes are appropriate under the circumstances.

Speaker Change: Such statements are subject to a number of assumptions, risks, and uncertainties, many of which are beyond the control of the company.

Operator: 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, investors are cautioned not to place undue reliance on these forward-looking statements.

Speaker Change: 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.

Operator: Accordingly, investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made.

Speaker Change: Accordingly, investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made.

Operator: Week, only as of the date they are issued. The contents of this call should be considered in conjunction with the recent follow-ups with the securities in exchange, including its annual report on Form 10-K and the 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 this call, whether as a result of new information, future events, Changes in Assumptions, or other. In order to aid in the understanding of the company's business performance, the company is also presenting certain non-GAAP measures, including adjusted EBITDA, which are reconciled in the table in the business update to the most comparable gap. The reconciling items are non-operating or non-cash costs, including stock compensation and other non-reoccurring costs such as those associated with the product withdrawal, the related dispute, and certain manufacturing relocation.

Operator: The contents of this call should be considered in conjunction with the company's recent follow-ins with the Securities and Exchange Commission, including its annual report on Form 10-K, and the quarterly reports on Form 10-Q, and current reports on Form 8-K, including any warnings, risk factors, and cautionary statements contained therein.

Speaker Change: The contents of this call should be considered in conjunction with the company's

Speaker Change: recent filings with the Securities and Exchange Commission.

Speaker Change: including its annual report on Form 10K.

Speaker Change: and the Quarterly Reports on Form 10Q.

Speaker Change: and current reports on Form 8K, including any warnings, risk factors, and cautionary statements contained therein.

Speaker Change: Furthermore, the company expressly disclaims any current intention to update publicly any further look-and-statements after this call, whether it's a result of new information, future events, changes in assumptions, or otherwise.

Operator: In order to aid in the understanding of the company's business performance, the company is also presenting certain non-GAAP measures, including adjusted EBITDA, which are reconciled in a table and the business update released to the most comparable GAAP measures. The reconciling items are non-operational or non-cash costs, including stock compensation and other non-reoccurring costs, such as those associated with the product withdrawal, the related dispute, and certain manufacturing relocation costs. Management believes that adjusted EBITDA presides useful information to the investor because it directly is reflective of the period-to-beary performance of the company's court. Business.

Speaker Change: In order to aid in the understanding of the company's business performance, the company is also presenting certain non-gap measures, including adjusted EBITDA, which are reconciled in a table in the business update release to the most comparable gap measures.

Speaker Change: [inaudible]

Speaker Change: Management believes that a just that EBITDA provides useful information to the investor because it directly is reflective of the peer-to-peary performance of the company's core business.

Riccardo Della Coste: Management believes that adjusted EBITDA provides useful information to the investor because it is directly reflective of the period-to-period performance of the company's core business. Now I'd like to turn the call over to the CEO of Barfresh Food Group, Mr. Riccardo Delacoste. Please go ahead. Good afternoon everyone, and thank you for joining us for our second quarter and first six months of 2024 Earnings Call. During the first six months of this year, we have made tremendous improvements in all areas of our business.

Riccardo Delacoste: Now I like to turn that call over to the CEO of Barfresh Food Group, Mr. Riccardo Delacoste. Please go ahead, sir. Good afternoon, everyone, and thank you for joining us for our second quarter and first six months of 2024 earnings call. During the first six months of this year, we have made tremendous improvements in all areas of our business. Our recent infrastructure investments have us role-positioned to achieve record quarterly revenue in tier 3, record annual revenues in financial year 2024, positive adjusted impact in tier 3, and in the back half of this year, and margin improvement.

Speaker Change: Now, I'd like to turn the call over to the CEO of Barfresh Food Group, Mr. Ricardo Della Coste. Please go ahead, sir.

Riccardo Della Coste: Our recent infrastructure investments have us well positioned to achieve record quarterly revenue in Q3, record annual revenue in financial year 2024, positive adjusted EBITDA in Q3 and in the back half of this year, and margin improvement. I'm excited to announce we've reached a significant inflection point in our business. Our Q3 revenue and orders have already reached more than $2.2 million, representing a 40% increase year-over-year, and we still have a month and a half to go in this quarter. What's particularly noteworthy is that we haven't even launched our new Pop'n Go product yet.

Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Speaker Change: Good afternoon everyone and thank you for joining us for our second quarter and first six months of 2024 earnings call.

Speaker Change: During the first six months of this year, we have made tremendous improvements in all areas of our business.

Speaker Change: Our recent infrastructure investments have us well positioned to achieve record quarterly revenue in Q3, record annual revenue in FY2024, positive adjusted EBITDA in Q3 and in the back half of this year, and margin improvement.

Riccardo Delacoste: I'm excited to announce we've reached a significant inflection point in our business. Our Q3 revenue and orders have already reached more than $2.2 million, representing a 40% increase year over year, and we still have a month and a half to go in this quarter. What's particularly noteworthy is that we haven't even launched our new pop-and-go product yet. This growth is a testament to the strength of our existing offerings and the effectiveness of our recent investments. The recent investments include expanding our product line, which we will commence production on shortly, dramatically scaling our production capacity, expanding our sales reach by adding to our sales broken network, which now covers 95% of the country, and all while bringing on top talent to our leadership team.

Rachel: I'm excited to announce we reached a significant inflection point in our business.

Rachel: Our Q3 revenue and orders have already reached more than $2.2 million, representing a 40% increase year over year.

Rachel: and we still have a month and a half to go in this quarter. What's particularly noteworthy is that we haven't even launched our new pop-and-go product yet.

Riccardo Della Coste: This growth is a testament to the strength of our existing offerings and the effectiveness of our recent investment. The recent investments include expanding our product line, which we will commence production on shortly, dramatically scaling our production capacity, expanding our sales reach by adding to our sales broken network, which now covers 95% of the country, and all while bringing on top talent to our leadership team. These investments are not just about this year's results.

Rachel: This growth is a testament to the strength of our existing offerings and the effectiveness of our recent investments.

Rachel: The recent investments include expanding our product line, which we will commence production on shortly, dramatically scaling our production capacity, expanding our sales reach by adding to our sales broker network, which now covers 95% of the country, and all while bringing on top talent to our leadership team.

Riccardo Delacoste: These investments are not just about this year's results. They are about building a company that is trying to sustain long-term growth. The infrastructure we've put in place thus far is the launch pad for our next phase of growth.

Riccardo Della Coste: They are about building a company that is primed for sustained, long-term growth. The infrastructure we've put in place thus far is the launchpad for our next phase of growth. As we look ahead, I'm energized by the opportunities before us and confident in our ability to deliver substantial value to our customers and shareholders alike. During the first six months of this year, we have announced over 3,100 new custom school locations, representing over 2.2 million students that will be served a range of our current and recently announced products, either on their breakfast menus or our cart menus.

Rachel: These investments are not just about this year's results, they are about building a company that is primed for sustained long-term growth.

Rachel: The infrastructure we've put in place thus far is the launch pad for our next phase of growth. As we look ahead, I'm energised by the opportunities before us and confident in our ability to deliver substantial value to our customers and shareholders alike.

Riccardo Della Coste: In addition, we have many opportunities to initiate and expand menu placements under bids in the education channel that include our products, and we anticipate announcing more non-bid cycle opportunities in the coming months. Thanks to our new manufacturing expansion, we will begin onboarding some of these schools in August, leading to our expected highest quarterly revenue in the company's history during the upcoming third quarter. In addition to new locations, our customers are extremely excited about our recently announced new 100% juice freeze pops and popping dough.

Riccardo Delacoste: As we look ahead, I'm energized by the opportunities before us and confident in our ability to deliver substantial value to our customers and shareholders' life. During the first six months of this year, we announced over 3,100 new customer school locations, representing over 2.2 million students that will be served the range of our current and recently announced products either on their breakfast menus or our cart menus. In addition, we have many opportunities to initiate and expand many placements under bids in the education channel that included our products, and we anticipate announcing more non-bid cycle opportunities in the coming months.

Speaker Change: In the first six months of this year, we announced over 3,100 new customer school locations representing over 2.2 million students that will be served the range of our current and recently announced products either on their breakfast menus or our cart menus.

Speaker Change: In addition, we have many opportunities to initiate and expand menu placements under bids in the education channel that included our products and we anticipate announcing more non-bid cycle opportunities in the coming months.

Riccardo Delacoste: Thanks to our new manufacturing expansion, we will begin onboarding some of these schools in August, leading to our expected highest quarterly revenue in the company's history during the upcoming third quarter. In addition to new locations, our customers are extremely excited about our recently announced new 100% juice freeze pops, Popping Go. This innovative product aims to provide students with healthier options throughout the school day. Popping Go was created with a commitment to nutrition and quality. Containing a half-couple fruit juice, no added sugars, no preservatives, artificial flavours or colours. and available in five delicious flavors. In addition, the new Pop & Go Freeze Pops are compliant with USDA reimbursable mill programs and Smart Snack guidelines.

Speaker Change: Thanks to our new manufacturing expansion, we will begin onboarding some of these schools in August , leading to our expected highest quarterly revenue in the company's history during the upcoming third quarter.

Speaker Change: In addition to new locations, our customers are extremely excited about our recently announced new 100% juice freeze pops, Pop'n Go.

Riccardo Della Coste: This innovative product aims to provide students with healthier options throughout the school day. Pop'n Go was created with a commitment to nutrition and quality. Containing a half cup of fruit juice, no added sugars, no preservatives, artificial flavors, or colors, and available in five delicious flavors. In addition, the new Pop'n Go Freeze Pops are compliant with USDA reimbursable meal programs and Smart Snack Guidelines. Initially, this new product line will target lunch menus in schools across the country, which can result in up to five times more volume of meals served than the breakfast menu where our Twist and Go and Bulk products are typically offered. Pop'n Go extends the company's reach into different meal paths, providing nutritious options for breakfast, lunch, and after school programs.

Speaker Change: This innovative product aims to provide students with healthier options throughout the school day.

Speaker Change: Pop'n Go was created with a commitment to nutrition and quality, containing a half cup of fruit juice, no added sugars, no preservatives, artificial flavours or colours, and available in five delicious flavours.

Speaker Change: In addition, the new Pop'n Go Freeze Pops are compliant with USDA reimbursable meal programs and Smart Snack Guidelines.

Riccardo Delacoste: Initially, this new product line will target lunch menus in schools across the country, which can result in up to five times more volume of mill served than the breakfast menu where our twists and go and bulk products are typically offered. Pop & Go extends the company's reach into different mill bay paths, providing nutritious options to breakfast, lunch, and after school programs. We recently announced three manufacturing partnerships, and one of these facilities will primarily be dedicated to manufacturing our recently launched Pop & Go 100% use freeze pops, as well as some of our other offerings. In addition, we now have the ability to produce over 120 million units annually of our full range of product offerings in all channels.

Speaker Change: Initially, this new product line will target lunch menus in schools across the country, which can result in up to five times more volume of meals served than the breakfast menu where our Twist and Go and Bolt products are typically offered.

Speaker Change: Pop'n Go extends the company's reach into different meal day paths, providing nutritious options for breakfast, lunch and after school programs.

Riccardo Della Coste: We recently announced three manufacturing partnerships, and one of these facilities will primarily be dedicated to manufacturing our recently launched pop-in-go 100% juice-freeze pops, as well as some of our other offerings. In addition, we now have the ability to produce over 120 million units annually of our full range of product offerings in all channels. This is a 400% increase from our previous path. These three key partners are part of our strategic initiative to strengthen and diversify our manufacturing footprint for all aspects of our offerings, including the much anticipated bottle expansion.

Speaker Change: We recently announced three new manufacturing partnerships, and one of these facilities will primarily be dedicated to manufacturing our recently launched Pop & Go 100% Geo Squeeze Pops, as well as some of our other offerings.

Speaker Change: In addition, we now have the ability to produce over 120 million units annually of our full range of product offerings in all channels. This is a 400% increase from our previous capacity.

Riccardo Delacoste: This is a 400% increase from our previous capacity. These three key partners are part of our strategic initiative to strengthen and diversify our manufacturing footprint for all aspects of our offerings, including the much anticipated bottle expansion. This approach not only positions us for rapid expansion, but also mitigates risks by reducing reliance on any single location where possible, and significantly enhances our operational resilience and scalability.

Speaker Change: These three key partners are part of our strategic initiative to strengthen and diversify our manufacturing footprint for all aspects of our offerings, including the much-anticipated bottle expansion.

Riccardo Della Coste: This approach not only positions us for rapid expansion but also mitigates risks by reducing reliance on any single location where possible and significantly enhances our operational resilience and scalability. To support our dramatically expanded manufacturing capacity, we recently announced the hiring of Marco Matlar as Vice President of Supply Chain and Contract Manufacturing. Spearheading our efforts to seamlessly on-board our new contract manufacturers, with over 25 years of comprehensive end-to-end supply chain expertise, Marco brings a wealth of invaluable experience in establishing robust product manufacturing and supply chain operations. His command over the domain coupled with deep-rooted relationships with co-manufacturers, food service customers, and distributors positions him exceptionally well to ensure a steady product flow and uncompromised service delivery to all our valued customers.

Speaker Change: This approach not only positions us for rapid expansion, but also mitigates risks by reducing reliance on any single location, where possible, and significantly enhances our operational resilience and scalability.

Riccardo Delacoste: To support our dramatically expanded manufacturing capacity, we recently announced the Marko MATLA as Vice President of Supply Chain and Contract Manufacturing. Spearheading our efforts to seamlessly onboard our new contract manufacturers with over 25 years of comprehensive end-to-end supply chain expertise, Marko brings a wealth of invaluable experience in establishing robust product manufacturing and supply chain operations. We command over the domain, coupled with deep-rooted relationships with co-manufacturers, food service customers, and distributors, positioned him exceptionally well to ensure a steady product flow and uncompromised service delivery to all our value customers.

Speaker Change: To support our dramatically expanded manufacturing capacity, we recently announced the hiring of Marco Matlar as Vice President of Supply Chain and Contract Manufacturing.

Speaker Change: Spearheading our efforts to seamlessly onboard our new contract manufacturers with over 25 years of comprehensive end-to-end supply chain expertise, Marco brings a wealth of invaluable experience in establishing robust product manufacturing and supply chain operations.

Speaker Change: His command over the domain coupled with deep-rooted relationships with co-manufacturers, food service customers and distributors position him exceptionally well to ensure a steady product flow and uncompromised service delivery to all our valued customers.

Riccardo Delacoste: This strategic hire underscores our commitment to building a full-meable supply chain infrastructure that can scale efficiently to support our long-term growth plan.

Riccardo Della Coste: This strategic hire underscores our commitment to building a formidable supply chain infrastructure that can scale efficiently to support our long-term growth plan. Additionally, to bolster our sales capabilities and drive revenue growth, we recently announced the appointment of Tony Glossy as Vice President of Sales. Tony brings over 25 years of executive experience in food and beverage sales, including schools, education, and restaurant QSR service distributors. With his proven track record of building high-performance teams and achieving ambitious goals, we're confident Tony will spearhead our sales efforts to help expand our client base, oversee our expanded sales broker network, and accelerate revenue growth in fiscal year 24 and beyond.

Speaker Change: This strategic hire underscores our commitment to building a formidable supply chain infrastructure that can scale efficiently to support our long-term growth plan.

Riccardo Delacoste: To bolster our sales capabilities and drive revenue growth, we recently announced the appointment of Tony Glossi as Vice President of Sales. Tony brings over 25 years of executive experience in food and beverage sales, including schools, education, and restaurant QSR service distributors. With his proven track record of building high-performing teams and achieving ambitious goals, confident Tony will spearhead our sales efforts to help expand our client base, oversee our expanded sales broker network, and accelerate revenue growth in fiscal year 24 and beyond. As we enter the back half of 2024, we have enhanced our management team, increased our manufacturing capacity by 400%, added an exciting new product offering for Q4, significantly increased the number of school customers served, and increased our sales broker network to cover over 95% of the country.

Speaker Change: To bolster our sales capabilities and drive revenue growth, we recently announced the appointment of Tony Glossy as Vice President of Sales.

Speaker Change: Tony brings over 25 years of executive experience in food and beverage sales including schools, education and restaurant QSR service distributors

Speaker Change: with his proven track record of building high-performing teams and achieving ambitious goals, we're confident Tony will spearhead our sales efforts.

Speaker Change: to help expand our client base, oversee our expanded sales broker network and accelerate revenue growth in fiscal year 24 and beyond.

Riccardo Della Coste: As we enter the back half of 2024, we have enhanced our management team, increased our manufacturing capacity by 400%, added an exciting new product offering for Q4, significantly increased the number of school customers served, and increased our sales broken network to cover over 95% of the country. All of these improvements add up to an expected record year in 2024 and continued strong, profitable growth beyond. I'll now turn the call over to our CFO, Lisa Roger. Lisa?

Speaker Change: As we enter the back half of 2024, we have enhanced our management team, increased our manufacturing capacity by 400%, added an exciting new product offering for Q4,

Speaker Change: significantly increased the number of school customers served and increased our sales broker network to cover over 95% of the country. All of these improvements add up to an expected record year in 2024 and continued strong profitable growth beyond.

Riccardo Delacoste: All of these improvements add up to an expected record year in 2024 and continued strong, profitable growth beyond.

Lisa Roger: I'll now turn the call over to our CFO. Lisa Roger. Lisa?

Speaker Change: I'll now turn the call over to our CFO, Lisa Roger.

Lisa Roger: Thank you, Riccardo. Revenue for the second quarter of 2024 decreased 3% to 1.46 million compared to 1.51 million in the second quarter of 2023. Revenue in 2023 was positively impacted by adjustments to estimated credits related to the dispute with our manufacturer. Excluding such adjustments, revenue increased by 6% year-over-year, driven by increased capacity in carton production and improvements in bulk sales. First margin for the second quarter of 2024 was 34.8%, compared to 31.4% for the second quarter of 2023. The year-over-year increase is due to product mix, pricing actions, and a slight improvement in the cost of supply chain components.

Lisa Roger: Thank you, Riccardo. Revenue for the second quarter of 2024 decreased 3% to $1.46 million, compared to $1.51 million in the second quarter of 2023. However, revenue in 2023 was positively impacted by adjustments to estimated credits related to the dispute with our manufacturer. Excluding such adjustments, revenue increased by 6% year over year, driven by increased capacity in carton production and improvements in bulk sales.

Lisa Roger: Revenant for the second quarter of 2024 decreased 3% to 1.46 million compared to 1.51 million in the second quarter of 2023.

Lisa Roger: Revenue in 2023 was positively impacted by adjustments to estimated credits related to the dispute with our manufacturer. Excluding such adjustments, revenue increased by 6% year-over-year, driven by increased capacity in carton production and improvements in bulk sales.

Lisa Roger: Gross margin for the second quarter of 2024 was 34.8%, compared to 31.4% for the second quarter of 2023. The year-over-year increase is due to product mix, pricing actions, and a slight improvement in the cost of supply chain components. Selling, marketing, and distribution expense for the second quarter of 2024 decreased 7% to $583,000, compared to $625,000 in the second quarter of 2023. The decrease was primarily due to freight efficiencies and lower storage and inventory management costs.

Lisa Roger: Selling, marketing, and distribution expense for the second quarter of 2024 decreased 7% to 583,000 compared to 625,000 in the second quarter of 2023. The decrease was primarily due to freight efficiencies and lower storage and inventory management costs. As a percent of sales, the two periods were comparable at 40% of revenue in the second quarter of 2024 and 41% of revenue in the second quarter of 2023.

Lisa Roger: Selling, marketing, and distribution expense for the second quarter of 2024 decreased 7% to $583,000, compared to $625,000 in the second quarter of 2023.

Lisa Roger: The decrease was primarily due to freight efficiencies and lower storage and inventory management costs. As a percent of sales, the two periods were comparable at 40% of revenue in the second quarter of 2024, than 41% of revenue in the second quarter of 2023.

Lisa Roger: As a percent of sales, the two periods were comparable at 40% of revenue in the second quarter of 2024 and 41% of revenue in the second quarter of 2023. G&A expenses for the second quarter of 2024 were $871,000 compared to $493,000 in the same period last year. The increase in GNA was driven by a number of factors, including fees to broaden the capabilities of our management team, a non-cash shift to stock-based compensation, and the non-recurrence of recognizing employee retention tax credit benefits in 2023.

Lisa Roger: GNA expenses for the second quarter of 2024 were 871,000 compared to 493,000 in the same period last year. The increase in GNA was driven by a number of factors, including fees to broaden the capabilities of our management team, a non-tash shift to stock-based compensation, and the non-recurrents of recognizing employee retention tax credit benefits in 2023. Our net loss for the second quarter of 2024 was a million compared to a net loss of 742,000 in the second quarter of 2023. The year-over-year increases the result of a shift to stock-based compensation, recruiting expense related to the enhancement of our management team, and the non-recurrents of recognizing employee retention tax credit benefits in 2023.

Lisa Roger: G&A expenses for the second quarter of 2024 were $871,000 compared to $493,000 in the same period last year.

Lisa Roger: The increase in G&A was driven by a number of factors, including fees to broaden the capabilities of our management team, a non-cash shift to stock-based compensation, and the non-recurrence of recognizing employee retention tax credit benefits in 2023.

Lisa Roger: Oh, a note loss for the second quarter of 2024 was a million compared to a net loss of 742,000 in the second quarter of 2023. The year-over-year increase is a result of a shift to stock-based compensation, recruiting expenses related to the enhancement of our management team, and the non-recurrence of recognizing the employee retention tax credit benefits in 2023. For the second quarter of 2024, our adjusted EBITDA was a loss of approximately $682,000 compared to a loss of $617,000 for the prior year period.

Lisa Roger: Our note loss for the second quarter of 2024 was a million compared to a net loss of 742,000 in the second quarter of 2023.

Lisa Roger: The year-over-year increase is a result of a shift to stock-based compensation, recruiting expense related to the enhancement of our management team, and the non-recurrence of recognizing the employee retention tax credit benefits in 2023.

Lisa Roger: For the second quarter of 2024, our adjusted EBITDA was a loss of approximately 682,000, compared to a loss of 617,000 for the prior year period.

Lisa Roger: For the second quarter of 2024, our adjusted EBITDA was a loss of approximately $682,000 compared to a loss of $617,000 for the prior year period. As Riccardo said, we believe we will achieve positive adjusted EBITDA in the third quarter and back half of this year.

Lisa Roger: As Ricardo said, we believe we will achieve positive adjusted EBITDA in the third quarter and backtouch of this year.

Lisa Roger: As Riccardo said, we believe we will achieve positive adjusted EBITDA in the third quarter and back half of this year. Now moving on to our balance sheet. As of June 30th, 2024, we had approximately 383,000 in cash and approximately 1.5 million in inventory on our balance sheet.

Lisa Roger: Now moving on to our balance sheet. As of June 30th, 2024, we had approximately 383,000 in cash and approximately 1.5 million of inventory on our balance sheet. In the first half of the year, we deployed a significant amount of cash to go up to inventory in preparation for our seasonally high to three. This decision was made as we continued to work to secure additional production capacity to meet anticipated demand. Given that we have now secured this additional capacity and production is set to commence, we expect our cash burn to normalize in the second half of the year.

Speaker Change: Now moving on to our balance sheet. As of June 30th, 2024, we had approximately 383,000 in cash and approximately 1.5 million of inventory on our balance sheet.

Lisa Roger: In the first half of the year, we deployed a significant amount of cash to increase inventory in preparation for our seasonally high Q3. This decision was made as we continued to work to secure additional production capacity to meet anticipated demand. Given that we have now secured this additional capacity and production is set to commence, we expect our cash burn to normalize in the second half of the year. Furthermore, I'm pleased to report that earlier this month we secured a $1.5 million receivables financing facility with a one-year term that renews annually and is secured by accounts receivable inventory.

Riccardo: In the first half of the year, we deployed a significant amount of cash to go up inventory in preparation for our season early to high 23. This decision was made as we continued to work to secure additional production capacity to meet anticipated demand.

Riccardo: Given that we have now secured this additional capacity and production is set to commence, we expect our cash burn to normalize in the second half of the year.

Lisa Roger: Furthermore, I'm pleased to report that earlier this month we secured a 1.5 million receivable financing facility with a 1-year term that renews annually and is secured by accounts receivable inventory. This provides us with extra coverage to fund inventory, so we need to flex that production further. This proactive approach ensures we have the flexibility to respond quickly to market demands while maintaining a strong financial position.

Riccardo: Furthermore, I'm pleased to report that earlier this month, we secured a $1.5 million receivables financing facility with a one-year term that renews annually and is secured by accounts receivable inventory.

Lisa Roger: This provides us with extra coverage to fund inventory, so we need to flex that production further. This proactive approach ensures we have the flexibility to respond quickly to market demands while maintaining a strong financial position. In addition, we have also received non-recourse litigation financing to allow vigorous pursuit of our legal complaint without further expense to the company.

Riccardo: This provides us with extra coverage to fund inventory so we need to flex that production further. This proactive approach ensures we have the flexibility to respond quickly to market demands while maintaining a strong financial position.

Lisa Roger: In addition, we have also received non-recourse litigation financing to allow vigorous pursuit of our legal complaint without further expense to the company.

Riccardo: In addition, we have also received non-reports notification financing to allow vigorous pursuits of our legal complaint without further expense to the company.

Riccardo Delacoste: Now, we'll turn the call back to Riccardo for closing remarks. Thank you, Lisa. We've absorbed a lot of the infrastructure and manufacturing capacity investments. Key personnel hires and product development expenses in the second quarter and will be leveraging these costs in the third quarter and beyond.

Riccardo Della Coste: Now I will turn the call back to Riccardo for closing remarks. Thank you, Lisa. We've absorbed a lot of the infrastructure and manufacturing capacity investment, key personnel hires and product development expenses in the second quarter and we'll be leveraging these costs in the third quarter and beyond. Since last year, we have achieved the following, increased our co-manufacturing capacity by 400 percent, relaunched our 5 to 1 juice concentrates, added a new and very exciting product offering that has received tremendous feedback and interest and has the potential to be as big as all of our other products combined, enhanced our management team, increased our sales broker network to cover 95% of the country, significantly increased the number of school customers and secured non-recourse litigation funding as well as secured a $1.5 million receivables financing facility.

Riccardo: Now I will turn the call back to Ricardo for closing remarks.

Ricardo: Thank you, Lisa

Ricardo: We've absorbed a lot of the infrastructure and manufacturing capacity investments. Keep personnel hires and product development expenses in the second quarter and we'll be leveraging these costs in the third quarter and beyond.

Riccardo Delacoste: Since last year, we have achieved the following. Increased our co-manufacturing capacity by 400%, relaunched our five-to-one use concentrates, added in view and very exciting product offering that has received tremendous feedback and interest and has the potential to be as big as all of our other products combined. Enhanced our management team, increased our sales broker network to cover 95% of the country, significantly increased the number of school customers and secured non-recourse litigation funding, as well as secured a $1.5 million receivable finance facility. This strategic groundwork has set us up for the third quarter to achieve positive adjusted EBITDA and the highest quarterly revenue in the company's history, with over $2.2 million in orders already received halfway through the quarter, a 40% increase over last year.

Speaker Change: Since last year we have achieved the following.

Ricardo: increased our co-manufacturing capacity by 400%, relaunched our 5 to 1 juice concentrates, added a new and very exciting product offering that has received tremendous feedback and interest and has the potential to be as big as all of our other products combined.

Speaker Change: and Hands Down Management Team increased our style of broken network to cover 95% of the country.

Speaker Change: Significantly increased the number of school customers and secured non-recourse litigation funding as well as secured a $1.5 million receivable financing facility.

Riccardo Della Coste: This strategic groundwork has set us up for the third quarter to achieve positive adjusted EBITDA and the highest quarterly revenue in the company's history with over $2.2 million in orders already received halfway through the quarter, a 40% increase over last year, and it's worth noting that this doesn't even include potential revenue from our new pop and go 100% juice freeze pop.

Speaker Change: This strategic groundwork has set us up for the third quarter to achieve positive adjusted EBITDA and the highest quarterly revenue in the company's history, with over $2.2 million in orders already received halfway through the quarter, a 40% increase over last year.

Riccardo Delacoste: And it's worth noting that this doesn't even include potential revenue from our new pop and go 100% due spree pops. The company is in the best position it's ever been in, with an increased on-trend product portfolio, increased capacity, increased sales team capacity, and an enhanced experience management team. We are extremely excited about our future opportunities and believe we are very well positioned to dramatically improve our growth and EBITDA.

Operator: 24 corporate update call for Barfresh Food Group.

Speaker Change: and it's worth noting that this doesn't even include the potential revenue from our new pop-in-go 100% juice freeze-pops.

Operator: Joining us today is Barfresh Food Group's founder and CEO Riccardo Delacoste and Barfresh Food Group's CFO, Lisa Roger. Following prepare remarks, we will open up the call for questions. The discussion today will include forward-looking statements, except for historical information herein. Matterset forth on this call are forward-looking within the meeting of the safe harbor provisions of the private securities litigation reform act of 1995, including statements about the company's commercial progress, success of its strategic relationship, and projections of future financial performance.

Riccardo Della Coste: The company is in the best position it's ever been in, with an increased on-trend product portfolio, increased capacity, increased sales team capacity, and an enhanced experience management team. We are extremely excited about our future opportunities and believe we are very well positioned to dramatically improve our growth and EBITDA. Operator?

Speaker Change: The company is in the best position it's ever been in with an increased on-trend product portfolio, increased capacity, increased sales team capacity and an enhanced experienced management team.

Speaker Change: We are extremely excited about our future opportunities and believe we are very well positioned to dramatically improve our growth and EBITDA. And with that, I'd like to open up the line for questions. Operator?

Riccardo Delacoste: And with that, I'd like to open up the line for questions.

Operator: Operator? Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation: don't indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For a participant using speaker equipment, it may be necessary to pick up your hands set before pressing the star keys.

Operator: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone key. A confirmation tone will indicate your line is in the question queue... You may press star 2 if you'd like to remove your question from the queue.

Speaker Change: Thank you. At this time we'll be conducting a question and answer session. If you like to ask the question, please press star 1 on your telephone key back.

Operator: 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, although the statements of historical fact that address activities, events, or developments that the company believes will anticipate will or may occur in the future are forward-looking statements.

Speaker Change: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start. Okay, let's give it a few moments while we poll for questions. My first question comes from Nicholas Sherwood with Maxim Group. Please proceed with your question. Hi, good evening.

Operator: Okay, let's give it a few moments while we pull for questions.

Speaker Change: Okay, let's give it a few moments while we poll for questions.

Speaker Change: [inaudible]

Speaker Change: Hello, I'm Riccardo Coste, and I'll be back with you in the next video, and I'll be back with you in the next video.

Speaker Change: Thank you for watching, see you in the next video.

Operator: These statements are based on certain assumptions, may, based on experience, expected future developments, and other factors that the company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risk, and uncertainties, many of which are beyond the control of the company. Should one of 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, investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made.

Nicholas Sherwood: My first question comes from Nicholas Sherwood with Maxim Group. Please proceed with your question. My first question is, what have you been seeing in the non-education channels in the second quarter and then looking forward specifically convenience, military, and entertainment? And did you see any sort of boost in the summer in that entertainment channel in the beginning of the third quarter or at any time in the second quarter, like in June? Not particularly. Overall, the summer sales for us was flat versus last year. A lot of our focus has been around the education channel. So we do expect that to increase next year.

Speaker Change: Hi, first question comes from Nicholas Sherwood with Max and Group. Please proceed with your question.

Nicholas Sherwood: Um, Barfresh, first question. My first question is, what have you been seeing in the non-education channels, you know, in the second quarter, and then looking forward, you know, specifically convenience, military, and entertainment, and did you see any sort of boost in the summer in that entertainment channel in this? at the beginning of the third quarter or at any time in the second quarter, like in June. Not particularly, overall summer sales for us with Flatburst last year were a lot of our focus has been around the Education Channel, so... We do expect that to increase next year. However, however..., the various segments that are relatively flat, and that's really a factor of. Kings COVID.

Nicholas Sherwood: Hi, uh, good evening.

Nicholas Sherwood: My first question is, what have you been seeing in the non-education channels in the second quarter and then looking forward, specifically convenience, military, and entertainment? And did you see any sort of boost in the summer in that entertainment channel in this?

Speaker Change: At the beginning of this third quarter or at any time in this second quarter I can

Speaker Change: Not particularly over all the summer sails for us with flat verse last year, a lot of our focus has been around thee.

Operator: The contents of this call should be considered in conjunction with the company's recent follow-ins with the Securities and Exchange Commission, including its annual report on Form 10K, and the quarterly reports on Form 10Q, and current reports on Form 8K, including any warnings, risk factors, and cautionary statements contained therein.

Speaker Change: Education Channel, so we do expect that to increase next year, however...

Riccardo Delacoste: However, the various segments that are relative and flat. And that's really a factor of things COVID. Most of the focus has really been around the education channel. Absolutely understood.

Speaker Change: the various segments that relatively flat.

Riccardo Della Coste: Most of the focus has really been on the education town. Absolutely understood. And then my second question is, you know, what is the hiring outlook for the sales team? Do you think that you'll need to make a substantial number of more hires? Or is that team pretty filled out?

Speaker Change: and that's really a factor of...

Speaker Change: Things COVID. Most of the focus has really been around the education tower.

Operator: Furthermore, the company expressly disclaims any current intention to update publicly any forward-looking statements after this call, whether it's a result of new information, future events, changes in assumptions, or otherwise. In order to aid in the understanding of the company's business performance, the company is also presenting certain non-gap measures, including adjusted EBITDA, which are reconciled in a table and the business update released to the most comparable gap measures. The reconciling items are non-operational or non-cash costs, including stock compensation and other non-reoccurring costs, such as those associated with the product withdrawal, the related dispute, and certain manufacturing relocation costs. Management believes that adjusted EBITDA presides useful information to the investor because it directly is reflective of the period-to-beary performance of the company's court. Business.

Nicholas Sherwood: And will their focus be entirely on the education channel? Or will you sort of open up some of those lines of communication into some of those other channels, you know, as you get into the school year and look west to secure new education customers? That's a great question.

Nicholas Sherwood: And then my second question is, what is the hiring outlook for the sales team? Do you think that you'll need to make a substantial number of more hires, or is that team pretty filled out? And will their focus be entirely on the education channel, or will you sort of open up some of those lines of communication to and to some of those other channels, you know, as you get into the school year and you're looking west to secure a new education. That's a great question. Now, we feel that we are fully staffed now with the recent hire of our VP of Sales, Tony Grossi.

Speaker Change: Absolutely understood and then my second question is

Speaker Change: What is the hiring outlook for the sales team do you think that you need to make a substantial number of more hires or is that team pretty filled out?

Speaker Change: Will their focus be entirely on the education channel, or will you sort of open up some of those lines of communication into some of those other channels as you get into the school year?

Speaker Change: You're looking less to secure a new education classroom.

Riccardo Della Coste: Now we feel that we, uh..., with the recent hire of our VP of Sales, Tony Grossi. He's really completed the sales team for us, and with the completion of our sales broker network around the country, we've over 95% now, almost at 98% of each state covered with local representation, that's boots on the ground, with our broker network in 98% of the States around the country. So we feel that we're pretty solid on the hiring front and on the sales front.

Speaker Change: That's a great question. Now we feel that we uh...

Speaker Change: Fully staffed now with the recent eye of our VP of sales, Tony Grosse, who's really completed the sales team for us and with the...

Riccardo Delacoste: He really completed the sales team for us. And with the completion of our sales broker network around the country, with over 95% now, almost at 98% of each state covered with local representation, that's boots on the ground with our broker network in 98% of the states around the country. So we feel that we're pretty, you know, solid on the hiring front on the sales front. And as it relates to that, we're now formulating our strategies to go after the various channels that we haven't really been as focused on in the past due to our focus being primarily on the education channel.

Speaker Change: Completion of our sales broker network around the country with 95 over 95% now almost at 98% of each state covered with local representation that's booths on the ground with our broker network in 98%

Operator: Now I like to turn that call over to the CEO of Barfresh Food Group, Mr. Riccardo Delacoste. Please go ahead, sir.

Speaker Change: of the states around the country. So we feel that we're pretty...

Riccardo Della Coste: And as it relates to that, we're now formulating our strategies to go after the various channels that we haven't really been as focused on in the past due to our focus being primarily on the education channel. So we are commencing our outreach to the other channels, including the QSRs, General Food Service, et cetera.

Speaker Change: You know, solid on the hiring front on the sales front and as it relates to that.

Riccardo Delacoste: Good afternoon, everyone, and thank you for joining us for our second quarter and first six months of 2024 earnings call. During the first six months of this year, we have made tremendous improvements in all areas of our business. Our recent infrastructure investments have us role-positioned to achieve record quarterly revenue in tier 3, record annual revenues in financial year 2024, positive adjusted impact in tier 3, and in the back half of this year, and margin improvement.

Speaker Change: We're now formulated in our strategies to go after the various channels that we haven't really been as focused on in the past due to our focus being primarily on the education channel. So we are commencing our outreach with the other channels including the QSRs, general food service, etc.

Nicholas Sherwood: So we are commencing our outreach with the other channels, including the QSI, general food service, etc. Awesome. Thank you for that color. Those are all of my questions, and I'll return to the queue. Thanks.

Nicholas Sherwood: Those are all my questions, and I'll return to the queue. Thank you. As a reminder, if you'd like to ask a question, please press star 1 on your telephone. One moment, please, while we pull for quests. Again, as a reminder, if anyone would like to ask a question, please press star 1 on your telephone. One moment, please, while we pull for credit. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Speaker Change: Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Speaker Change: Awesome, thank you for that color. Those are all of my questions and I'll return to the queue.

Operator: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we pull for questions.

Speaker Change: Thanks.

Speaker Change: As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. One moment, please, while we poll for questions.

Speaker Change: Hello, I'm Riccardo Coste, and I'll be back with you in the next video, and I'll be back with you in the next video.

Speaker Change: Thank you for watching, see you in the next video.

Operator: This includes today's conference.

Riccardo Delacoste: The recent investments include expanding our product line, which we will commence production on shortly, dramatically scaling our production capacity, expanding our sales reach by adding to our sales broken network, which now covers 95% of the country, and all while bringing on top talent to our leadership team. These investments are not just about this year's results. They are about building a company that is trying to sustain long-term growth. The infrastructure we've put in place thus far is the launch pad for our next phase of growth.

Operator: You may disconnect your lines at this time, and we thank you for your participation.

Speaker Change: This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.

Speaker Change: [inaudible]

Riccardo Delacoste: As we look ahead, I'm energized by the opportunities before us and confident in our ability to deliver substantial value to our customers and shareholder's life. During the first six months of this year, we announced over 3,100 new customer school locations, representing over 2.2 million students that will be served the range of our current and recently announced products either on their breakfast menus or our cart menus. In addition, we have many opportunities to initiate and expand many placements under bids in the education channel that included our products and we anticipate announcing more non-bid cycle opportunities in the coming months.

Riccardo Delacoste: Thanks to our new manufacturing expansion, we will begin onboarding some of these schools in August leading to our expected highest quarterly revenue in the company's history during the upcoming third quarter. In addition to new locations, our customers are extremely excited about our recently announced new 100% Juice Freeze Pops, Popping Go. This innovative product aims to provide students with healthier options throughout the school day. Popping Go was created with a commitment to nutrition and quality.

Riccardo Delacoste: Containing a half-couple fruit juice, no added sugars, no preservatives, artificial flavours or colours, and available in five delicious flavors. In addition, the new Pop & Go Freeze Pops are compliant with USDA reimbursable mill programs and Smart Snack Guidelines. Initially, this new product line will target lunch menus in schools across the country, which can result in up to five times more volume of mill served than the breakfast menu where our twists and go and bulk products are typically offered.

Riccardo Delacoste: Pop & Go extends the company's reach into different mill bay paths, providing nutritious options to breakfast, lunch and after school programs. We recently announced three manufacturing partnerships and one of these facilities will primarily be dedicated to manufacturing our recently launched Pop & Go 100% use freeze pops, as well as some of our other offerings. In addition, we now have the ability to produce over 120 million units annually of our full range of product offerings in all channels.

Riccardo Delacoste: To support our dramatically expanded manufacturing capacity, we recently announced the Marko MATLA as vice president of supply chain and contract manufacturing. Spearheading our efforts to seamlessly onboard our new contract manufacturers with over 25 years of comprehensive end-to-end supply chain expertise, Marko brings a wealth of invaluable experience in establishing robust product manufacturing and supply chain operations. We command over the domain coupled with deep-rooted relationships with co-manufacturers, food service customers and distributors, positioned him exceptionally well to ensure a steady product flow and uncompromise service delivery to all our value customers.

Riccardo Delacoste: This strategic hire underscores our commitment to building a full-meable supply chain infrastructure that can scale efficiently to support our long-term growth plan.

Riccardo Delacoste: To bolster our sales capabilities and drive revenue growth, we recently announced the appointment of Tony Glossi as vice president of sales. Tony brings over 25 years of executive experience in food and beverage sales, including schools, education and restaurant QSR service distributors. With his proven track record of building high-performing teams and achieving ambitious goals, with confident Tony will spearhead our sales efforts to help expand our client base, oversee our expanded sales broker network, and accelerate revenue growth in fiscal year 24 and beyond.

Riccardo Delacoste: As we enter the back half of 2024, we have enhanced our management team, increased our manufacturing capacity by 400%, added an exciting new product offering for Q4, significantly increased the number of school customers served, and increased our sales broker network to cover over 95% of the country. All of these improvements add up to an expected record year in 2024 and continued strong profitable growth beyond.

Operator: I'll now turn the call over to our CFO. Lisa Roger. Lisa?

Lisa Roger: Thank you Riccardo. Revenue for the second quarter of 2024 decreased 3% to 1.46 million compared to 1.51 million in the second quarter of 2023. Revenue in 2023 was positively impacted by adjustments to estimated credits related to the dispute with our manufacturer.

Lisa Roger: Excluding such adjustments, revenue increased by 6% year-over-year, driven by increased capacity in carton production and improvements in bulk sales. First margin for the second quarter of 2024 was 34.8%, compared to 31.4% to the second quarter of 2023. The year-over-year increase is due to product mix, pricing actions, and a slight improvement in the cost of supply chain components. Selling, marketing and distribution expense for the second quarter of 2024 decreased 7% to 583,000 compared to 625,000 in the second quarter of 2023.

Lisa Roger: Our net loss for the second quarter of 2024 was a million compared to a net loss of 742,000 in the second quarter of 2023. The year-over-year increases the result of a shift to stock-based compensation, recruiting expense related to the enhancement of our management team, and the non-recurrents of recognizing employee retention tax credit benefits in 2023. For the second quarter of 2024, our adjusted EBITDA was a loss of approximately 682,000, compared to a loss of 617,000 for the prior year period.

Lisa Roger: As Ricardo said, we believe we will achieve positive adjusted EBITDA in the third quarter and backtouch of this year. Now moving on to our balance sheet. As of June 30th, 2024, we had approximately 383,000 in cash and approximately 1.5 million of inventory on our balance sheet. In the first half of the year, we deployed a significant amount of cash to go up to inventory in preparation for our seasonally high to three.

Lisa Roger: This decision was made as we continued to work to secure additional production capacity to meet anticipated demand. Given that we have now secured this additional capacity and production is set to commence, we expect our cash burn to normalize in the second half of the year.

Lisa Roger: This proactive approach ensures we have the flexibility to respond quickly to market demands while maintaining a strong financial position. In addition, we have also received non-recourse litigation financing to allow vigorous pursuit of our legal complaint without further expense to the company.

Riccardo Delacoste: Since last year, we have achieved the following. Increased our co-manufacturing capacity by 400% relaunched our five-to-one use concentrates, added in view and very exciting product offering that has received tremendous feedback and interest and has the potential to be as big as all of our other products combined. Enhanced our management team, increased our sales broker network to cover 95% of the country, significantly increased the number of school customers and secured non-recourse litigation funding as well as secured a $1.5 million receivable finance in facility.

Riccardo Delacoste: This strategic groundwork has set us up for the third quarter to achieve positive adjusted EBITDA and the highest quarterly revenue in the company's history with over $2.2 million in orders already received halfway through the quarter, a 40% increase over last year. And it's worth noting that this doesn't even include potential revenue from our new pop and go 100% due spree pops. The company is in the best position it's ever been in with an increased on-trend product portfolio, increased capacity, increased sales team capacity and an enhanced experience management team.

Riccardo Delacoste: We are extremely excited about our future opportunities and believe we are very well positioned to dramatically improve our growth and EBITDA.

Operator: And with that, I'd like to open up the line for questions. Operator? Thank you.

Operator: At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keyback. A confirmation, don't indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For a participant using speaker equipment, it may be necessary to pick up your hands set before pressing the star keys. Okay, let's give it a few moments while we pull for questions.

Operator: My first question comes from Nicholas Sherwood with Maxim Group. Please proceed with your question.

Nicholas Sherwood: My first question is, what have you been seeing in the non-education channels in the second quarter and then looking forward specifically convenience, military, and entertainment? And did you see any sort of boost in the summer in that entertainment channel in the beginning of the third quarter or at any time in the second quarter, like in June? Not particularly. Overall, the summer sales for us was flat versus last year.

Riccardo Delacoste: A lot of our focus has been around the education channel. So we do expect that to increase next year. However, the various segments that relative and flat. And that's really a factor of things COVID. Most of the focus has really been around the education channel. Absolutely understood.

Nicholas Sherwood: And then my second question is, what is the hiring outlook for the sales team? Do you think that you'll need to make a substantial number of more hires or is that team pretty filled out? And will their focus be entirely on the education channel or will you sort of open up some of those lines of communication to and to some of those other channels, you know, as you get into the school year and you're looking west to secure a new education.

Riccardo Delacoste: That's a great question. Now, we feel that we are fully staffed now with the recent hire of our VP of sales, Tony Grossi. He really completed the sales team for us. And with the completion of our sales broker network around the country with 95 over 95% now, almost at 98% of each state covered with local representation that's boots on the ground with our broker network in 98% of the states around the country.

Riccardo Delacoste: So we feel that we're pretty, you know, solid on the hiring front on the sales front. And as it relates to that, we're now formulating our strategies to go after the various channels that we haven't really been as focused on in the past due to our focus being primarily on the education channel. So we are commencing our outreach with the other channels, including the QSI, general food service, etc.

Nicholas Sherwood: Awesome. Thank you for that color.

Nicholas Sherwood: Those are all of my questions and I'll return to the queue. Thanks.

Operator: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we pull for questions.

This includes today's conference. You may disconnect your lines at this time and we thank you for your participation.

Q2 2024 Barfresh Food Group Inc Earnings Call

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