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Operator: Good afternoon, everyone, and thank you for participating on today’s First Quarter 2025 Corporate Update Call for Barfresh Food Group. Joining us today is Barfresh Food Group’s Founder and CEO, Riccardo Delle Coste; and Barfresh Food Group’s CFO, Lisa Roger. Following prepared remarks, we will open the call for your questions. 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, including statements about the company’s, commercial progress, success of its strategic relations and projections of future financial performance.

These forward-looking statements are identified by the use of the words such as grow, expand, anticipate, intend, estimate, believe, expect, plan, should, hypothetical, potential forecast and project, continue, could, may, predict, and will, and variations of such words and similar expressions are intended to identify such forward-looking statements. All statements other than 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 made 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. Accordingly, investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The contents of this call should be considered in conjunction with the company’s recent filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K, and the quarterly reports on Form 10-Q, current reports on Form 8-K, including any warnings, risk factors, and cautionary statements contained therein.

Furthermore, the company expressingly 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 otherwise. In order to aid in the understanding of the company’s business performance, the company is also presenting certain non-GAAP measures, including adjusted gross profit, EBITDA, adjusted EBITDA, which are reconciled in tables in the business update released to the most comparable GAAP measures and certain calculations based on the results, including gross margin and adjusted gross margin. The reconciling items are non-operational or non-cash costs, including stock compensation and other non-recurring costs, that are those associated with the project withdrawal, the related dispute and certain manufacturing relocation costs.

Management believes that adjusted gross profit, EBITDA and adjusted EBITDA proved useful information to the investors, because they are directly reflective of the performance of the company. Now, I would like to turn the call over to the CEO of Barfresh Group, Mr. Riccardo Delle Coste. Please go ahead, sir.

Riccardo Delle Coste: Good afternoon, everyone, and thank you for joining us for our first quarter 2025 earnings call. We achieved our revenue and gross margin guidance for the first quarter and continue to sign new customers in the education channel as we continue to invest in our manufacturing operations, to be well-prepared for the upcoming 2025 school year. Based on the progress, we are making towards additional manufacturing capacity and our first quarter results we are reiterating our full year revenue guidance of 35% to 55% growth. Our revenue guidance accounts for continuing orders from existing customers and confirmed bids, while also considering estimated revenue from end-user opportunities at later stages in our sales pipeline.

I would like to now provide an update on our manufacturing capacity. During the fourth quarter of 2024, we began onboarding two new strategic partners. This entails important equipment investments by ourselves and our partners which will continue into the second quarter. While this transition creates near-term cost pressures on our first and second quarter bottom line results we expect all of the investments and onboarding process to be complete by the end of Q2 2025, bringing us to full manufacturing capacity in time for our high season selling in the education channel, which picks up with back-to-school demand in Q3. Once our new manufacturing partner for Twist & Go is fully online, we will increase our bottling capacity, enabling us to expand our revenue in the back half of this year.

In addition, we expect our gross and operating margins to dramatically improve in the back half of 2025, enabling us to achieve positive adjusted EBITDA in the second half of the year. The costs associated with onboarding our new co-manufacturers, including higher supply chain expenses from sourcing products, from multiple locations and trial costs are expected to be completed by the end of the second quarter. Turning to our product portfolio. We launched a new Pop & Go 100% Juice Freeze Pops in our education channel during Q4 and it continues to gain traction as we enter the second quarter. While this new product contributed modest revenue in the first quarter we’re excited about its potential. Unlike our breakfast-focused offerings, this product targets the lunch daypart, a market opportunity significantly larger than breakfast.

On the sales front, our robust sales network is now covering 95% of the U.S. As a reminder, while we’ve had strong success in new customer acquisition in the education channel, we’re still only at a 5% market penetration, representing significant runway for growth. And many of these new wins will not start contributing to our top line until the back half of 2025. During the second quarter, we will continue to make the appropriate investments in our manufacturing and supply chain, but we fully believe this will be completed by the end of the second quarter. Our expanded manufacturing capacity, new product introductions, and robust sales network give us confidence in our growth projection. More importantly, we expect to see meaningful margin improvement as we realize the benefits of our operational investments.

Before I turn it over to Lisa for a detailed financial review, I want to thank our employees, partners, and shareholders for their support during this transition period for our company. The investment we have made into our overall company during the past few quarters will enable us to achieve profitable growth in the back half of 2025 and we are very excited about our future. I’ll now turn the call over to our CFO, Lisa Roger. Lisa?

Lisa Roger: Thank you, Riccardo. As we guided during our last earnings call, our first quarter revenue remained consistent with Q4 levels as we continue to manage our supply chain through a transitional period. Revenue for the first quarter of 2025 was $2.9 million compared to $2.8 million for the first quarter of 2024. The year-over-year increase in revenue is primarily driven by expanded bottle capacity at our existing bottle manufacturer, enabling higher sales volume compared to the prior year. Gross margin for the first quarter of 2025 was 31% compared to 41% for the first quarter of 2024. Adjusted gross margin for the first quarter of 2025 was 31% compared to 43% in the prior year period. Our adjusted gross margin for the first quarter of 2025 was consistent with Q4 2024 adjusted gross margin of 30% as expected.

The year-over-year decrease was due primarily to temporary production inefficiencies and higher supply chain expenses related to sourcing elements of our production process from multiple locations as we continue to enhance our supply chain capabilities. We expect our gross margin to normalize in the second half of 2025 as new co-manufacturers are operating at a higher capacity and capability improving our supply and cost structure. Selling, marketing, and distribution expense for the first quarter of 2025 increased to $824,000 or 28% of revenue compared to $694,000 or 25% of revenue in the first quarter of 2024. The year-over-year increase is a result of higher personnel costs and broker commissions due to expansion of our broker network as well as an increase in sample expense due to the introduction of Pop & Go 100% Juice Freeze Pops.

G&A expenses for the first quarter of 2025 were $747,000 compared to $855,000 in the same period last year. The year-over-year decrease in G&A was driven by a reduction in legal, professional, and consulting fees and lower stock-based compensation as a result of lower expected attainment under our performance stock unit program, partially offset by an increase in personnel-related expenses. Net loss for the first quarter of 2025 was $761,000 compared to a net loss of $449,000 in the first quarter of 2024. The increase in net loss was primarily due to the reduction in gross margin as previously discussed. For the first quarter of 2025, our adjusted EBITDA was a loss of approximately $506,000 compared to a gain of approximately $53,000 in the same period last year.

Adjusted EBITDA in the first quarter of 2025 was impacted by costs associated with sourcing elements of the production process from multiple locations, while new co-manufacturers complete equipment installations required to perform as full service partners. This resulted in higher logistics costs and less efficient production than in the first quarter of 2024. The equipment is expected to be delivered installed and operational by the end of the second quarter and we should return to our optimized production and distribution network in the back half of the year. Now, moving on to our balance sheet. As of March 31st, 2025, we had approximately $3.4 million of cash and accounts receivable and approximately $1.1 million of inventory on our balance sheet.

The company has taken measures to reduce its liquidity requirements including compensating its Directors and employees with equity to reduce cash compensation requirements, obtaining non-recourse litigation financing, and securing receivables financing. In February 2025, the company secured $3 million in growth financing. This capital raise enhances our financial position and support scaling of production capacity to meet growing customer demand particularly in the education channel. Now I will turn the call back to Riccardo for closing remarks.

Riccardo Delle Coste : Thank you, Lisa. For the full year of 2025, we continue to expect significant revenue growth of between 35% and 55% with margin expansion beginning in the second half as our manufacturing capabilities come online. We look forward to updating you on our progress in the quarters ahead. And with that, I would like to open up the line for questions. Operator?

Operator: Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Anthony Vendetti from Maxim Group. Please go ahead.

Anthony Vendetti : Yes. Thank you. It sounds like the co-manufacturing partners will be up and running by the end of second quarter 2025 with all the equipment that you need to get everything ready to go. Is there anything that could slow that down Riccardo? Or is everything on track?

Riccardo Delle Coste : I mean we don’t know what we don’t know. But we’ve done an enormous amount of testing. In actual fact we went live on some of the equipment last week. And we had our first production runs with the new change parts that are being installed. We do have a little bit more of just refinement of the process, but we expect that to be completed over the next couple of weeks. So definitely before the end of Q2, we expect it to be up and running. And it’s already started in part this week technically. So, we feel very good about it.

Anthony Vendetti : Okay. Great. And then I know we still have to finish out the 2024-2025 school year, but has the bidding process started for the 2025-2026 school year? And what does that pipeline look like at this point?

Riccardo Delle Coste : Yes, it most definitely has started. It started a couple of months ago. So that’s really how we’re providing the guidance based on our existing customers expectations of repeat orders as well as a portion of what we have in our pipeline already. And there’s been some more kind of customers being added and will continue to be added to that pipeline as we move through the bidding process. We should start to be notified of the bids up until the end of June really. We still get notifications of them being awarded. We’ve completed a lot of them. The awards haven’t necessarily all come back yet. But over the next couple of months we expect those to come back.

Anthony Vendetti : Okay. And this year in particular whether it’s from some of your existing customers or some of the new potential schools and school districts are they bidding — are they interested in both the Twist & Go and the Pop & Go? Or is it more the Twist & Go and then the Pop & Go is sort of an add-on for some but not all?

Riccardo Delle Coste : I mean, I wouldn’t say that everyone is adding it to their bids, but we are definitely completing quite a number of bids with the Pop & Go on them.

Anthony Vendetti : Okay. Great, great. And you have with these new co-packers and co-manufacturing partners you have all the inventory you need to meet that demand for the 2025-2026 school year?

Riccardo Delle Coste : Correct, as it stands right now. Keeping in mind that over the last few months, we’ve been doing an enormous amount of testing on the POPs in the customers taste testing with the students, with the administrators. So there’s been a lot of work that’s been happening in the background.

Anthony Vendetti : Okay. And are you currently staffed appropriately? Do you need to add any additional salespeople or other senior execs to make sure all this logistics work out? And I’m just curious where do you feel like you stand?

Riccardo Delle Coste : We feel like we’ve got the right amount of staff where we are and what we need to achieve.

Anthony Vendetti : Okay. Great. All right. Great. I’ll hop back in the queue. Appreciate it.

Riccardo Delle Coste : Thanks.

Operator: Thank you. [Operator Instructions] The next question comes from the line of Ankoor Sagar [ph], an investor. Please go ahead.

Unidentified Analyst : Hey, good afternoon, Riccardo and Lisa. Thank you for taking my questions. Just have a couple. You have been bottlenecked with this co-manufacturing and you expect to have this completed by Q2. Anything you can share in terms of what, sort of, manufacturing capacity will this provide to you in terms of the revenue even if it’s a range? Could there be an upside to even the guidance that you have provided if you have — if you’re able to fulfill more assuming you probably have the customer base and the orders to fill that as well?

Riccardo Delle Coste: Yeah, it really depends on product mix, because we have a significant capacity in the Pop & Go also in the cartons and we’re now just opening up that capacity with the bottles as well. Anywhere five to 10 in a quarter is probably quite doable where we are in that range. Again it depends on the product mix.

Unidentified Analyst: Okay, okay. And I think you probably mentioned it in the prepared remarks but just to clarify, I mean with these co-manufacturings coming up online, you expect the gross margin to track back to normally above 40s? Is that fair to say?

Riccardo Delle Coste: It’s at about 40 is what we’re expecting. We have been spending a lot of money just trying to get the co-mans up and running, whether it’s testing, getting product out that we’ve had to double handle trial costs you name it. There’s been an enormous amount of money being spent. So now that the changes have been made at the plants, we expect the margins to get back to where they should have been. And hopefully we’ll see some upside in that as well.

Unidentified Analyst: Okay. All right. Thank you.

Riccardo Delle Coste: Thanks.

Operator: Thank you. [Operator Instructions] As there are no further questions, I would now hand the conference over to Riccardo Delle Coste for his closing comments.

Riccardo Delle Coste: Thanks, everyone. We look forward to updating you on our progress and upcoming development shortly. Thanks.

Operator: Thank you. Ladies and gentlemen, the conference of Barfresh Food Group has now concluded. Thank you for your participation. You may now disconnect your lines.