Barfresh Food Group, Inc. (NASDAQ:BRFH) Q2 2023 Earnings Call Transcript

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Unidentified Analyst: Got it. I mean, that’s kind of like what investors and yourself being the Founder, CEO and the company, you’ve been hoping for. Anything you could share in terms of the Q4? I mean, that’s going to be a pretty significant jump in Q3 versus Q2, almost double.

Riccardo Delle Coste: Sorry, again, it’s really not, right? We should have been here and more last year.

Unidentified Analyst: Yes.

Riccardo Delle Coste: We were already at this point, right? So had it not have been for the issues that we had with the previous manufacturer, we would have been probably a multiple of that already by the end of this year very easily.

Unidentified Analyst: Got it. Got it. Anything you could share on the — how do you see the Q4 shaping in terms of not going into the guidance, but based on the school district you have signed? Do you expect sequentially that to grow over Q3?

Riccardo Delle Coste: Absolutely. I mean, just to be very clear, despite the numbers that we have, which are, as you can see, clearly getting very strong, we have still a significant number of accounts that we can’t service yet because we don’t have the bottle capacity. If we had that bottle capacity now, we would be significantly higher still. not only are we going to expect to increase our sales between Q3 and Q4, but we already know that come Q1 when we have the new bottle manufacturer online, that’s going to open us up to a whole additional range of customers that have been waiting for the additional bottle capacity. So we don’t just expect that growth to come between Q3 and Q4. We expect it to come Q3, Q4 and then into Q1 and on into next year as well.

Unidentified Analyst: Got it. That’s great. One last one. In terms of the cash, where we are, do you think that’s enough? I understand there could be things that can happen that can provide the cash. But are we going to be able to go through and service and show that revenue with this cash? Or are you looking to — will the company raise?

Lisa Roger: Well, we believe that our operating model currently would be cash flow positive in Q3 — or close to breakeven in Q3 and positive in Q4. We have a fairly short operating cycle as far as cash. And so it doesn’t — it’s not like we have to invest a lot into working capital as we grow. So there’s not much concern there. So in addition to that, we previously announced the NASDAQ issue and have secured some funds through a convertible debt offering that’s fully — we haven’t drawn. We don’t have to draw it, but it’s available for us. And it’s primarily intended to shore up the equity balance we have if we need to get there to meet the NASDAQ compliance. But we don’t — we hope not to have to draw it.

Riccardo Delle Coste: And it’s really only as a backup.

Unidentified Analyst: Yes. Got it. So that takes care of that NASDAQ concern as well?

Riccardo Delle Coste: Correct.

Unidentified Analyst: Thanks.

Operator: [Operator Instructions] We have no questions in the queue. And that then concludes today’s conference. You may disconnect your lines at this time, and thank you for your participation.

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