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What changed in BARFRESH FOOD GROUP INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BARFRESH FOOD GROUP INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+163 added−121 removedSource: 10-K (2026-04-15) vs 10-K (2025-03-27)

Top changes in BARFRESH FOOD GROUP INC.'s 2025 10-K

163 paragraphs added · 121 removed · 90 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeResearch and Development The Company incurred approximately $132,000 and $115,000 in research and development expenses for the years ended December 31, 2024 and 2023, respectively. Competition There is significant competition in the smoothie market at both the institutional and consumer purchasing level. The Company distributes products to institutional customers primarily through distributors to school districts.
Biggest changeIn the fourth quarter of 2025, the acquired manufacturing facility produced 18% of supply. Research and Development The Company incurred approximately $128,000 and $132,000 in research and development expenses for the years ended December 31, 2025 and 2024, respectively. Competition There is significant competition in the smoothie market at both the institutional and consumer purchasing level.
At the institutional level, the Company competes with other food and beverage manufacturers, many of which have significantly greater financial resources and distribution reach. The competition at the consumer level is primarily between specialized juice bars (e.g. Jamba Juice) and major fast casual and fast-food restaurant chains (such as McDonalds).
At the institutional level, the Company competes with other food and beverage manufacturers, many of which have significantly greater financial resources and distribution reach. 5 The competition at the consumer level is primarily between specialized juice bars (e.g. Jamba Juice) and major fast casual and fast-food restaurant chains (such as McDonalds).
The Company has a “no sugar added” version of the bulk “Easy Pour” format that is specifically targeted for the aforementioned USDA national school meal programs. In addition, the Company received approval from the United States Defense Logistics Agency (“DLA”) to sell its smoothie products into all branches of the U.S.
The Company has a “no sugar added” version of the bulk “Easy Pour” format that is specifically targeted for the aforementioned USDA national school meal programs. In addition, the Company received approval from the United States Defense Logistics Agency (“USDLA”) to sell its smoothie products into all branches of the U.S.
Item 1. Business. Corporate History and Background The Company is engaged in the manufacturing and distribution of ready-to-drink and ready-to-blend frozen beverages, including smoothies, shakes and frappes. The current operation was established following a 2012 reverse merger into an inactive Delaware corporation, formed on February 25, 2010. We have two direct subsidiaries: Barfresh Corporation, Inc.
Item 1. Business. Corporate History and Background The Company is engaged in the manufacturing and distribution of ready-to-drink and ready-to-blend frozen beverages and food, including smoothies, shakes, frappes and juice pops. The current operation was established following a 2012 reverse merger into an inactive Delaware corporation, formed on February 25, 2010.
Intellectual Property Barfresh owns the domestic and international property rights to its products’ sealed pack of ingredients used in its single serve products. Patents in the United States and Australia are in effect through 2025.
Intellectual Property Barfresh owned the domestic and international property rights to its products’ sealed pack of ingredients used in its single serve products. Patents in the United States and Australia expired in 2025.
Governmental Approval and Regulation While the Company is not aware of the need for any governmental approvals to manufacture or distribute its products, manufacturing products which meet the criteria of the USDA’S national school meal program and USDLA is critical to the Company’s business plan. The Company utilizes contract manufacturers.
Governmental Approval and Regulation While the Company is not aware of the need for any governmental approvals to manufacture or distribute its products, manufacturing products which meet the criteria of the USDA’S national school meal program is critical to the Company’s business plan. As a dairy processor, Arps Dairy is heavily regulated, primarily by the U.S.
Pop & Go ™ contains 4 oz of juice, no added sugars, preservatives or artificial flavors or colors, and comes in five flavors. 4 Distribution The Company conducts sales through several channels, including National Accounts, Regional Accounts, and Broadline Distributors. Manufacturing Barfresh utilizes contract manufacturers to manufacture all of its products in the United States.
Pop & Go ™ contains 4 oz of juice, no added sugars, preservatives or artificial flavors or colors, and comes in five flavors. Distribution The Company conducts sales through several channels, including National Accounts, Regional Accounts, and Broadline Distributors. Raw and processed milk is sold directly to the single customer for these products.
(formerly known as Smoothie, Inc.) and Barfresh, Inc. Our corporate office is located at 3600 Wilshire Boulevard Suite 1720, Los Angeles, 90010. Our telephone number is (310) 598-7113 and our website is www.barfresh.com. Business Overview Barfresh is a leader in the creation, manufacturing and distribution of ready-to-drink and ready-to-blend frozen beverages.
Our corporate office is located at 12100 Wilshire Boulevard, 8 th Floor, Los Angeles, California, 90025. Our telephone number is (310) 598-7113 and our website is www.barfresh.com. Business Overview Barfresh is a leader in the creation, manufacturing and distribution of ready-to-drink and ready-to-blend frozen beverages and food. The current portfolio of products includes smoothies, shakes, frappes and juice pops.
The Company’s bulk “Easy Pour” format, which contains all the ingredients necessary to make the beverage, is packaged in gallon containers in a concentrated formula that is mixed in beverage dispensing equipment 1:1 with water.
At only 125 -130 calories and with 5 grams of protein, it makes the perfect start to any day or on-the-go snack. 4 The Company’s bulk “Easy Pour” format, which contains all the ingredients necessary to make the beverage, is packaged in gallon containers in a concentrated formula that is mixed in beverage dispensing equipment 1:1 with water.
The current portfolio of products includes smoothies, shakes and frappes. Some of the key benefits of the products for the end consumers that drink the products include: ● From as little as 125-130 calories (per serving) ● Real fruit in every smoothie ● Dairy free options ● Kosher approved ● Gluten Free Products Products are packaged in four distinct formats.
Some of the key benefits of the products for the end consumers that drink the products include: ● From as little as 125-130 calories (per serving) ● Real fruit in every smoothie ● Dairy free options ● Kosher approved ● Gluten Free Following the Acquisition, we are also engaged in providing raw and processed milk to a single significant customer.
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Twist & Go™ contains no added sugars, preservatives, artificial flavors or colors. At only 125 -130 calories and with 5 grams of protein, it makes the perfect start to any day or on-the-go snack.
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On October 3, 2025, we acquired Arps Dairy, Inc., an Ohio corporation (“Arps Dairy”), which operates a 15,000- square foot dairy processing facility to be replaced in 2026 by a new 44,000-square foot facility under construction nearby (the “New Facility”), thereby obtaining manufacturing capability that we did not previously have.
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Before entering into any manufacturing contracts, the Company determines that the manufacturer meets all government requirements. Environmental Laws The Company does not believe that it is subject to any environmental laws, either state or federal. Compliance with any laws concerning manufacturing is the responsibility of the contract manufacturer.
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Unless otherwise expressly stated or the context otherwise requires, the description of our business included or incorporated by reference in this prospectus reflects our business after giving effect to the Arps Dairy acquisition (the “Acquisition”). Accordingly, we have two direct subsidiaries: Barfresh Corporation, Inc. (formerly known as Smoothie, Inc.) and Arps Dairy, Inc. and Barfresh, Inc.
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Employees As of March 24, 2025, the Company has 11 employees and 3 consultants. 5
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This legacy Arps Dairy activity is strategic from the standpoint of our supply chain and capacity utilization. Products Barfresh legacy products are packaged in four distinct formats.
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Twist & Go™ contains no added sugars, preservatives, artificial flavors or colors.
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Manufacturing In the past, Barfresh has relied solely on contract manufacturers to manufacture all of its products in the United States.
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With the acquisition of Arps Dairy, Barfresh will now be able to control the quantity and quality of its own production, as well as eliminating fees previously paid to third-party manufacturers, reducing freight costs, enabling the more efficient procurement of ingredients, and lowering cold storage costs.
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As described in Risk Factors , by bringing the majority of its manufacturing in-house, Barfresh gains greater control over its supply chain and positions the Company for accelerated growth and expanded market opportunities. The manufacturing facility acquisition provides Barfresh with the operational foundation and cost efficiencies necessary to scale its business profitably.
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The Company distributes products to institutional customers primarily through distributors to school districts.
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Food and Drug Administration (FDA), the U.S. Department of Agriculture (USDA), and state health departments, requiring compliance with the Pasteurized Milk Ordinance, Food Safety Modernization Act (FSMA) for sanitation, pasteurization standards, and regular inspections. Key areas include raw milk pricing, licensing, structural sanitation, mandatory pasteurization, and temperature controls.
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Key regulatory areas for dairy processors include the following: ● Federal Regulatory Oversight: The FDA governs food safety, while the USDA Agricultural Marketing Service oversees Federal Milk Marketing Orders (FMMOs), which establish minimum prices for raw milk. ● Pasteurized Milk Ordinance: This is the national standard for Grade A milk products, covering production, transportation, and processing. ● Food Safety Modernization Act: Requires comprehensive food safety plans, hazard analysis, and risk-based preventive controls. ● Pasteurization and Equipment Standards: Strict requirements for pasteurizer design, including temperature recording devices (thermograph charts) to be kept for 2 years. ● State Licensing and Inspections: The Ohio Department of Agriculture Division of Dairy issues manufacturing licenses, mandates that raw milk come from approved sources, and conducts sanitation inspections. ● Operational Requirements: Regulations demand proper cleaning facilities, hand-washing stations, ventilation, waste disposal, and approved milk storage tanks.
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Processors must ensure all equipment, such as recording thermometers and flow diversion devices, is calibrated and sealed by regulatory agencies.
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Environmental Laws Regulation is conducted at both the federal and state level by the Environmental Protection Agency and by the Ohio Environmental Protection Agency with respect to the following: ● Clean Water Act (CWA), specifically the Dairy Products Processing Effluent Guidelines: Establishes effluent guidelines for dairy product processing, restricting pollutants in wastewater directly or indirectly discharged into U.S. waters. ● EPA National Pollutant Discharge Elimination System (NPDES) permits: Required for direct discharges to ensure compliance with water quality standards. ● Pretreatment Standards: Regulates indirect dischargers who send wastewater to municipal treatment plants. 6 Employees As of April 13, 2026, the Company has 32 employees and 3 consultants.
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Financial information about segments and geographic areas As a result of the Acquisition, we operate in two reportable segments: Frozen Beverages and Food, and Raw and Processed Milk. All products are predominately sold within the United States.
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Additional information about our product segments is available in Note 9 of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. 10 Failure to maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.
Biggest changeThese rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies which could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.
The trading price of our common stock is likely to be highly volatile and could fluctuate in response to factors such as: ● actual or anticipated variations in our operating results; ● announcements of developments by us or our competitors; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; ● adoption of new accounting standards affecting our industry; ● additions or departures of key personnel; ● introduction of new products by us or our competitors; ● sales of our common stock or other securities in the open market; and ● other events or factors, many of which are beyond our control.
The trading price of our common stock is likely to be highly volatile and could fluctuate in response to factors such as: ● actual or anticipated variations in our operating results; ● announcements of developments by us or our competitors; ● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments; ● adoption of new accounting standards affecting our industry; 15 ● additions or departures of key personnel; ● introduction of new products by us or our competitors; ● sales of our common stock or other securities in the open market; and ● other events or factors, many of which are beyond our control.
Although we believe various debt and equity financing alternatives will be available to us to support our working capital needs, financing arrangements on acceptable terms may not be available to us when needed. Additionally, these alternatives may require significant cash payments for interest and other costs or could be highly dilutive to our existing shareholders.
Although we believe various debt and equity financing alternatives will be available to us to support our capital expenditure and working capital needs, financing arrangements on acceptable terms may not be available to us when needed. Additionally, these alternatives may require significant cash payments for interest and other costs or could be highly dilutive to our existing shareholders.
Our inability to attract highly skilled personnel with sufficient experience in our industries could harm our business. Product liability exposure may expose us to significant liability.
Our inability to attract highly skilled personnel with sufficient experience in our industries could harm our business. 11 Product liability exposure may expose us to significant liability.
Many of our competitors or potential competitors have substantially greater financial and other resources than we do, which may allow them to react to changes in the market quicker than we can. In addition, aggressive pricing by our competitors or the entrance of new competitors into our markets, could reduce our revenue and operating margins.
Many of our competitors or potential competitors have substantially greater financial and other resources than we do, which may allow them to react to changes in the market more quickly than we can. In addition, aggressive pricing by our competitors or the entrance of new competitors into our markets, could reduce our revenue and operating margins.
These risks could be magnified since the number of employees, contractors and others working outside of offices increased since the COVID-19 pandemic. Additionally, continued geopolitical turmoil, including the ongoing wars in Ukraine and Israel, has heightened the risk of cyberattacks.
These risks could be magnified since the number of employees, contractors and others working outside of offices increased since the COVID-19 pandemic. Additionally, continued geopolitical turmoil, including the ongoing wars in Ukraine and the Middle East, has heightened the risk of cyberattacks.
At present, members of our board of directors and/or their affiliated entities control over 50% of the outstanding shares of voting stock, and therefore have the power to control all matters requiring the approval of our stockholders, including the election of directors and the approval of mergers and other significant corporate transactions.
At present, members of our board of directors and/or their affiliated entities control approximately 37% of the outstanding shares of voting stock, and therefore have significant power to influence all matters requiring the approval of our stockholders, including the election of directors and the approval of mergers and other significant corporate transactions.
Future sales of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could adversely affect the then prevailing market price of our common stock and could make it more difficult for us to raise funds in the future through a public offering of our securities. 12 Our common stock is subject to price volatility unrelated to our operations.
Future sales of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could adversely affect the then prevailing market price of our common stock and could make it more difficult for us to raise funds in the future through a public offering of our securities.
While we regained compliance with this Rule in 2023, our stockholders’ equity at December 31, 2024 was only $578,000. We have instead maintained compliance based on the $35,000,000 minimum market value requirement.
While we regained compliance with this Rule in 2023, our stockholders’ equity at December 31, 2025 was only $1,330,000. We have instead maintained compliance based on the $35,000,000 minimum market value requirement.
In addition, if one or more analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
If one or more analysts downgrade our stock or change their opinion of our stock, our share price may decline. In addition, if one or more analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.
Damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics such as COVD-19 and influenza, labor strikes or other reasons, could impair the manufacture, distribution and sale of our products. Many of these events are outside of our control.
In the past, damage or disruption to our suppliers or to manufacturing or distribution capabilities due to weather, natural disaster, fire or explosion, terrorism, pandemics such as COVD-19 and influenza, labor strikes or other reasons, has impaired the manufacture, distribution and sale of our products. Many of these events were outside of our control.
If there is an adverse ruling against us in any litigation, we may be required to pay substantial damages, discontinue the use and sale of infringing products and expend significant resources to develop non-infringing technology or obtain licenses to infringing technology. Our failure to develop or license a substitute technology could prevent us from selling our products.
If there is an adverse ruling against us in any litigation, we may be required to pay substantial damages, discontinue the use and sale of infringing products and expend significant resources to develop non-infringing technology or obtain licenses to infringing technology.
We may be required to seek financing through the issuance of equity or convertible securities to fund our operations. We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for our common stock in connection with hiring or retaining employees, future acquisitions or for other business purposes.
We recently obtained financing through the issuance of convertible debt securities and warrants to fund our operations. We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for our common stock in connection with hiring or retaining employees, future acquisitions or for other business purposes.
Our distributors are not required to place minimum monthly or annual orders for our products. Accordingly, we cannot predict the timing or quantity of purchases by any of our independent distributors or whether any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have done in the past.
Accordingly, we cannot predict the timing or quantity of purchases by any of our independent distributors or whether any of our distributors will continue to purchase products from us in the same frequencies and volumes as they may have done in the past.
If our controls, disaster recovery and business continuity plans or those of our third-party providers do not effectively respond to or resolve the issues related to any such disruptions in a timely manner, our product sales, financial condition, results of operations and stock price may be materially and adversely affected, and we might experience delays in reporting our financial results, loss of intellectual property and damage to our reputation or brands. 11 Risks Related to Ownership of Our Common Stock If we are unable to adequately fund our operations, we may be forced to voluntarily file for deregistration of our common stock with the SEC.
If our controls, disaster recovery and business continuity plans or those of our third-party providers do not effectively respond to or resolve the issues related to any such disruptions in a timely manner, our product sales, financial condition, results of operations and stock price may be materially and adversely affected, and we might experience delays in reporting our financial results, loss of intellectual property and damage to our reputation or brands.
We continue efforts to have less fluctuation with respect to working capital – for example by developing a frozen juice pop product which we expect to be more popular during warmer months of the year – but such efforts require time to be accepted in the marketplace.
We continue efforts to have less fluctuation with respect to working capital – for example by developing a frozen juice pop product which we expect to be more popular during warmer months of the year – but such efforts require time to be accepted in the marketplace. 8 Issues with a manufacturer have resulted in significant losses, as well as other negative impacts.
The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
As a public company, we will continue to incur significant legal, accounting and other expenses. The Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
If necessary, we may explore strategic transactions that we consider to be in the best interest of the Company and our shareholders, which may include, without limitation, public or private offerings of debt or equity securities, and other strategic alternatives; however, these options may not ultimately be available or feasible. 6 A worsening of economic conditions or a decrease in consumer spending may adversely impact our ability to implement our business strategy.
If necessary, we may explore strategic transactions that we consider to be in the best interest of the Company and our shareholders, which may include, without limitation, public or private offerings of debt or equity securities, and other strategic alternatives; however, these options may not ultimately be available or feasible.
If we materially underestimate demand for our products or are unable to maintain sufficient inventory, we might not be able to satisfy demand on a short-term basis.
Our ability to estimate demand for our products is imprecise, particularly for new products, seasonal promotions and new markets. If we materially underestimate demand for our products or are unable to maintain sufficient inventory, we might not be able to satisfy demand on a short-term basis.
Our board of directors controls the majority of the outstanding shares of voting stock.
Our board of directors controls a significant percentage of the outstanding shares of voting stock.
Unless and until we are able to achieve and maintain annual net income from continuing operations of $500,000, fluctuations in the market value of our listed securities may cause us to fail to meet Nasdaq listing standards and result in our common stock only being tradable in the over-the-counter markets.
Unless and until we are able to achieve and maintain annual net income from continuing operations of $500,000, fluctuations in the market value of our listed securities may cause us to fail to meet Nasdaq listing standards and result in our common stock only being tradable in the over-the-counter markets. 14 If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our share price and trading volume could decline.
Additionally, our larger distributors and partners may make orders that are larger than we have historically been required to fill. Shortages in inventory levels, supply of raw materials or other key supplies could negatively affect us. Disruption within our supply chain, contract manufacturing or distribution channels could have an adverse effect on our business, financial condition and results of operations.
Additionally, our larger distributors and partners may make orders that are larger than we have historically been required to fill. Shortages in inventory levels, supply of raw materials or other key supplies could negatively affect us.
Continuity of business applications and services has been, and may in the future be, disrupted by events such as infection by viruses or malware; other cybersecurity attacks; issues with or errors in systems’ maintenance or security; power outages; hardware or software failures; denial of service attacks; telecommunication failures; natural disasters; terrorist attacks; and other catastrophic occurrences.
Shared service centers managed by third parties provide an increasing number of services important to conduct our business, including accounting, internal control, human resources and computing functions. 13 Continuity of business applications and services has been, and may in the future be, disrupted by events such as infection by viruses or malware; other cybersecurity attacks; issues with or errors in systems’ maintenance or security; power outages; hardware or software failures; denial of service attacks; telecommunication failures; natural disasters; terrorist attacks; and other catastrophic occurrences.
While we believe that that our claims have merit, there is no assurance of a favorable outcome to this case. In 2024, we obtained litigation financing to pursue our claims without risk to our financial position or operating results. Our inability to protect our intellectual property rights may force us to incur unanticipated costs.
In 2024, we obtained litigation financing to pursue our claims without risk to our financial position or operating results. Our inability to protect our intellectual property rights may force us to incur unanticipated costs.
We have a history of operating losses and may not achieve or sustain profitability. These operating losses have been generated while we market to potential customers. We cannot guarantee that we will become profitable.
These operating losses have been generated while we market to potential customers. We cannot guarantee that we will become profitable.
If adequate funds are not available or if they are not available on acceptable terms, our ability to fund the growth of our operations, take advantage of opportunities, develop products or services or otherwise respond to competitive pressures, could be significantly limited. Issues with a manufacturer have resulted in significant losses, as well as other negative impacts.
If adequate funds are not available or if they are not available on acceptable terms, our ability to fund the growth of our operations, take advantage of opportunities, develop products or services or otherwise respond to competitive pressures, could be significantly limited. We completed our first acquisition in the fourth quarter of 2025.
The future issuance of any such additional shares of common stock will result in dilution to our shareholders and may create downward pressure on the trading price of our common stock. 13 Provisions in our Company charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
Provisions in our Company charter documents and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
We will continue to incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance initiatives and corporate governance practices. As a public company, we will continue to incur significant legal, accounting and other expenses.
Our failure to develop or license a substitute technology could prevent us from selling our products. 12 We will continue to incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance initiatives and corporate governance practices.
In addition to the financial damage from the product withdrawal, we must obtain suitable replacement contract manufacturers and regain the confidence of our customers and investing public, all while seeking a resolution with the Manufacturer.
In addition to the financial damage from the product withdrawal, we were forced to obtain suitable replacement contract manufacturers and regain the confidence of our customers and investing public, all while seeking a resolution with the Manufacturer. These tasks required substantial amounts of personnel and capital resources in 2023, 2024, and 2025, including production trial and other start-up costs.
Improper conduct by our employees or agents could damage our reputation or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as disgorgement of profits. 9 Our litigation with the Manufacturer was voluntarily withdrawn from the court system in January 2023 and refiled in August 2023, as we were unable to reach a suitable resolution.
Improper conduct by our employees or agents could damage our reputation or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines, as well as disgorgement of profits.
We need to maintain adequate inventory levels to be able to deliver products to distributors on a timely basis. Our inventory supply depends on our ability to correctly estimate demand for our products. Our ability to estimate demand for our products is imprecise, particularly for new products, seasonal promotions and new markets.
If we do not adequately manage our inventory levels, our operating results could be adversely affected. We need to maintain adequate inventory levels to be able to deliver products to distributors on a timely basis. Our inventory supply depends on our ability to correctly estimate demand for our products.
Fluctuations in various food and supply costs, particularly fruit and dairy, could adversely affect our operating results. Supplies and prices of the various ingredients that we are going to use can be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics and economics in the producing countries.
Supplies and prices of the various ingredients that are used in the manufacture of our products can be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics and economics in the producing countries. These factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits.
Our success depends, in part, upon the popularity of our products and our ability to develop new menu items that appeal to consumers across all four day parts.
We compete with many well-established companies, food service and otherwise, on the basis of taste, quality and price of product offered, customer service, and overall experience. Our success depends, in part, upon the popularity of our products and our ability to develop new menu items that appeal to consumers across all four day parts.
With sales to school districts representing an increasing percentage of our total sales, we require a significant amount of working capital to fund the production of inventory during the third calendar quarter. Revenues from sales to school districts generally are reflected in our first quarter and third quarter results.
As an increasing portion of our sales is coming from school districts, our business is becoming more seasonal, which presents certain challenges with respect to cash flow. With sales to school districts representing an increasing percentage of our total sales, we require a significant amount of working capital to fund the production of inventory during the third calendar quarter.
The fruit of the quality we seek tends to trade on a negotiated basis, depending on supply and demand at the time of the purchase. An increase in pricing of any fruit that we are going to use in our products could have a significant adverse effect on our profitability.
An increase in pricing of any fruit that we are going to use in our products could have a significant adverse effect on our profitability. We cannot assure you that we will be able to secure our fruit supply.
If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our share price and trading volume could decline. The trading market for our common stock may be impacted, in part, by research and reports that securities or industry analysts publish about our business or us.
The trading market for our common stock may be impacted, in part, by research and reports that securities or industry analysts publish about our business or us. There can be no assurance that analysts will cover us, continue to cover us or provide favorable coverage.
In addition, if the inventory of our products held by our distributors and retailers is too high, they will not place orders for additional products, which would also unfavorably impact our sales and adversely affect our operating results. Increases in costs of packaging, ingredients and contract manufacturing tolling fees may have an adverse impact on our gross margin.
In addition, if the inventory of our products held by our distributors and retailers is too high, they will not place orders for additional products, which would also unfavorably impact our sales and adversely affect our operating results. 9 We need financing to complete the New Facility and may need additional financing in the future, which may not be available when needed or may be costly and dilutive.
We also compete with other employers in our markets for workers and may become subject to higher labor costs as a result of such competition. It is difficult to predict the timing and amount of our sales because our distributors and national accounts may not be required to place minimum orders with us.
It is difficult to predict the timing and amount of our sales because our distributors and national accounts may not be required to place minimum orders with us. Our distributors are not required to place minimum monthly or annual orders for our products.
There is no certainty regarding economic conditions in the United States, and credit and financial markets and confidence in economic conditions could deteriorate at any time. Accordingly, we may experience declines in revenue during economic turmoil or during periods of uncertainty including uncertainty resulting from war, terrorism or contagious disease.
There is no certainty regarding economic conditions in the United States, and credit and financial markets and confidence in economic conditions could deteriorate at any time.
Packaging costs such as paper and aluminum cans have experienced industry-wide price increases in the past and there is always the risk that the Company’s contract manufacturers increase their toll rates based on increases in their fixed and variable costs. If the Company is unable to pass on these costs, the gross margin will be significantly impacted.
Packaging costs such as paper and aluminum cans have experienced industry-wide price increases in the past and there is always the risk that the Company may be unable to pass on these costs, thereby significantly impacting the gross margin. Fluctuations in various food and supply costs, particularly fruit and dairy, could adversely affect our operating results.
If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, our business, prospects, financial condition or results of operations could be negatively affected. Beginning in March 2020, the COVID-19 pandemic had a significant impact on the Company.
If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, our business, prospects, financial condition or results of operations could be negatively affected. Risks Related to Our Business We have a history of operating losses. We have a history of operating losses and may not achieve or sustain profitability.
If one of our manufacturers or suppliers fails to perform or deliver products, for any reason, our sales and results of operations could be adversely affected.
If one of our manufacturers failed to perform, we were faced with a significant interruption in our supply chain. If one of our manufacturers or suppliers failed to perform or deliver products, for any reason, our sales and results of operations were adversely affected, and led to the possible loss of customers.
Our ability, through our suppliers, business partners, contract manufacturers, independent distributors and retailers, to produce, transport, distribute and sell products is critical to our success.
Disruption within our supply chain, contract manufacturing or distribution channels has had and may continue to have an adverse effect on our business, financial condition and results of operations. Our ability, through our suppliers, business partners, contract manufacturers, independent distributors and retailers, to produce, transport, distribute and sell products is critical to our success.
We may require additional financing to support our working capital needs in the future.
Completion of the New Facility, including the installation of equipment and the buildout of production lines is required in the near term. We may require additional financing to support our capital expenditure and working capital needs in the future.
Most of our suppliers and manufacturers produce similar products for other companies, and our products may represent a small portion of their businesses. Further, it takes a newly engaged manufacturer typically up to nine months of retrofitting/ preparation before it can begin producing our products.
Our experience with the Manufacturer demonstrated how our reliance on a limited number of manufacturers and suppliers increased this risk. Most of our suppliers and manufacturers produce similar products for other companies, and our products may represent a small portion of their businesses.
These factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits. In addition, the prices of fruit and dairy, which are the main ingredients in our products, can be highly volatile.
In addition, the prices of fruit and dairy, which are the main ingredients in our products, can be highly volatile. The fruit of the quality we seek tends to trade on a negotiated basis, depending on supply and demand at the time of the purchase.
The challenges of competing with the many food services businesses may result in reductions in our revenue and operating margins. We compete with many well-established companies, food service and otherwise, on the basis of taste, quality and price of product offered, customer service, and overall experience.
Accordingly, we may experience declines in revenue during economic turmoil or during periods of uncertainty including uncertainty resulting from war, terrorism or contagious disease. 10 The challenges of competing with the many food services businesses may result in reductions in our revenue and operating margins.
Removed
Specifically, our business was impacted by dining bans targeted at restaurants to reduce the size of public gatherings. Such bans precluded our single-serve products from being served at those establishments and in some instances, resulted in abandoned product launches. Furthermore, many school districts closed regular attendance for a period of time thereby disrupting sales of product into that channel.
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Growth by acquisitions involves risks, and we may not be able to effectively integrate the business we acquired to achieve the objectives of the acquisition or implement the contract manufacturing agreement. We completed the acquisition of Arps Dairy in October 2025.
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In 2022 and 2023, we experienced supply chain interruptions and inflation for component and transportation costs. We believe that the impact of the pandemic has substantially abated, but will continue to monitor and assess developments. Risks Related to Our Business We have a history of operating losses.
Added
The Acquisition is subject to various risks and uncertainties and could have a negative impact on our business, financial condition, and/or results of operations.
Removed
These tasks have required substantial amounts of personnel and capital resources in 2023 and 2024, including production trial and other start-up costs, with ongoing activities expected in 2025. We may need additional financing in the future, which may not be available when needed or may be costly and dilutive.
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These risks include the inability to integrate effectively the operations, products, and personnel of the acquired company which is located a significant distance from our existing business, the inability to complete construction that was in progress on the New Facility at the time of the Acquisition within the anticipated timeframe and budget, the inability to achieve anticipated cost savings or operating synergies, the management of risks associated with manufacturing operations including product quality and safety, and the risk we may not be able to effectively manage our operations at an increased scale of operations resulting from the Acquisition. 7 By acquiring Arps Dairy, we are now exposed to operational risk in dairy processing.
Removed
Failure to take adequate steps to protect against or mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, could adversely affect our business, financial condition and results of operations. 7 Our experience with the Manufacturer demonstrates how our reliance on a limited number of manufacturers and suppliers further increases this risk.
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Operating a dairy processing plant involves significant operational, regulatory, and market-related risks. The plant is highly dependent on a consistent supply of raw milk, which may be affected by factors outside of our control.
Removed
In 2023 and 2024 we did not have contracts in place to produce sufficient units to meet projected demand. If one of our manufacturers fails to perform, we would be faced with a significant interruption in our supply chain.
Added
In addition, dairy processing facilities must comply with stringent food safety, environmental, and occupational health regulations; failure to maintain compliance could result in fines, recalls, suspension of operations, or reputational damage. Equipment breakdowns, labor shortages, or disruptions in energy and water supply could materially impact production capacity and increase costs.
Removed
Furthermore, if we are unable to meet our customers’ demands due to a disruption in our supply chain, we may lose that customer which could adversely affect our business, financial condition and results of operations. Our dependence on independent contract manufacturers could make management of our manufacturing and distribution efforts inefficient or unprofitable.
Added
Moreover, given the perishable nature of dairy products, disruptions in transportation or refrigeration systems pose heightened risks of spoilage and product loss. These factors, individually or in combination, may adversely affect the plant’s operational performance, profitability, and long-term viability. Our operations depend on the consistent availability and quality of raw milk.
Removed
We are expected to arrange for our contract manufacturing needs sufficiently in advance of anticipated requirements, which is customary in the contract manufacturing industry for comparably sized companies. Based on the cost structure and forecasted demand for the particular geographic area where our contract manufacturers are located, we continually evaluate which of our contract manufacturers to use.
Added
The supply and cost of raw milk are influenced by factors outside of our control, including seasonal fluctuations, weather conditions, feed and fuel costs, disease outbreaks, and general agricultural market conditions.
Removed
To the extent demand for our products exceeds available inventory or the production capacity of our contract manufacturing arrangements, or orders are not submitted on a timely basis, we will be unable to fulfill distributor orders on demand.
Added
Interruptions in raw milk supply or significant increases in input costs could materially and adversely affect our ability to produce and sell dairy products, and could negatively impact our operating results. Dairy processing facilities are subject to extensive regulation.
Removed
Conversely, we may produce more product inventory than warranted by the actual demand for it, resulting in higher storage costs and the potential risk of inventory spoilage.
Added
Our dairy processing facility will need to comply with regulations by federal, state, and local authorities, including requirements related to food safety, sanitation, labeling, environmental protection, and occupational health and safety. Failure to comply with applicable laws and regulations could result in fines, mandatory product recalls, product seizures, suspension of operations, reputational harm, and liability for damages.
Removed
Our failure to accurately predict and manage our contract manufacturing requirements and our inventory levels may impair relationships with our independent distributors and key accounts, which, in turn, would likely have a material adverse effect on our ability to maintain effective relationships with those distributors and key accounts.
Added
Compliance costs may also increase over time as regulations become more stringent. Any such outcomes could have a material adverse effect on our business and financial performance. Our dairy processing operations are dependent on reliable performance of our equipment.
Removed
At present, we must replace the Manufacturer with one or more new contract manufacturers and/or arrange for increased production from our existing contract manufacturers, all of which require several months to implement. If we do not adequately manage our inventory levels, our operating results could be adversely affected.
Added
The operations at Arps Dairy rely on specialized processing equipment, refrigeration systems, and a reliable supply of utilities such as water and energy. Equipment breakdowns, malfunctions, or prolonged utility outages could disrupt our production and distribution activities, cause product spoilage, and increase operating costs.
Removed
We cannot assure you that we will be able to secure our fruit supply. 8 As an increasing portion of our sales is coming from school districts, our business is becoming more seasonal, which presents certain challenges with respect to cash flow.
Added
Because dairy products are perishable, even brief disruptions in equipment or infrastructure can result in significant product loss and revenue reduction. We require reliable and trained personnel for our dairy operations. Our success depends on maintaining a trained and reliable workforce to operate our dairy processing facilities.
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Shared service centers managed by third parties provide an increasing number of services important to conduct our business, including accounting, internal control, human resources and computing functions.
Added
Labor shortages, increased wage pressures, or work stoppages could impair our ability to operate efficiently. In addition, recruiting and retaining qualified personnel in rural or specialized markets may be difficult. Labor-related challenges could increase costs, reduce production capacity, or negatively impact product quality and safety.
Removed
There can be no assurance that analysts will cover us, continue to cover us or provide favorable coverage. If one or more analysts downgrade our stock or change their opinion of our stock, our share price may decline.
Added
Revenues from sales to school districts generally are reflected in our first quarter and third quarter results.
Added
Further, it takes a newly engaged manufacturer typically up to nine months of retrofitting/ preparation before it can begin producing our products. Starting in 2023 and continuing through the third quarter of 2025 we did not have contracts in place to produce sufficient units to meet projected demand.
Added
Our contract manufacturer that supplied 54% of our product in 2024 and 43% in 2025 (“Manufacturer A”) gave notice that it would not renew our contract when it concluded in February 2026. Additionally, in December 2025, our manufacturer that supplied 38% of our product in 2024 and 40% in 2025 (“Manufacturer B”) discontinued manufacturing our products.
Added
The Acquisition is a significant step towards protecting against or mitigating the likelihood or potential impact of such events, and their adverse effect on our business, financial condition and results of operations. Since the Acquisition, Arps Dairy is now producing virtually all of our product lines, manufacturing 18% of cases produced in the fourth quarter of 2025.
Added
Failure to complete the New Facility within the projected budget and timeframe will likely impact negatively our projected new revenue and adjusted EBITDA estimates.
Added
Our ability to achieve our projected growth, including the timing of new revenue and adjusted EBITDA estimates, depends in large part on the successful execution of the completion of the New Facility and installation of the production lines. These projects involve significant capital expenditures and are subject to numerous risks, many of which are outside of our control.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have implemented a risk-based approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner. 14 We also rely on information technology and third-party vendors to support our operations, including our secure processing of personal, confidential, sensitive, proprietary and other types of information.
Biggest changeWe have implemented a risk-based approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.
Our Management Leadership Team, with oversight from the Board of Directors, has implement ed a comprehensive cybersecurity program, including incident response process, aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework and NIST Computer Security Incident Handling Guide (NIST SP 800-61) to assess, identify, address and manage risks from cybersecurity threats that may result in material adverse effects on the confidentiality, integrity and availability of our business and information systems.
In that regard, we have increased our investment in information systems by upgrading outsourced services and technology platforms previously utilized. 16 Our Management Leadership Team, with oversight from the Board of Directors, has implement ed a comprehensive cybersecurity program, including incident response process, aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework and NIST Computer Security Incident Handling Guide (NIST SP 800-61) to assess, identify, address and manage risks from cybersecurity threats that may result in material adverse effects on the confidentiality, integrity and availability of our business and information systems.
Removed
In that regard, we have increased our investment in information systems by upgrading outsourced services and technology platforms previously utilized.
Added
We also rely on information technology and third-party vendors to support our operations, including our secure processing of personal, confidential, sensitive, proprietary and other types of information.

Item 2. Properties

Properties — owned and leased real estate

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Removed
Item 2. Properties. Our principal executive offices are located at 3600 Wilshire Boulevard Suite 1720, Los Angeles, 90010. Beginning in April 2019, we leased this office space pursuant to a direct lease for approximately $80,000 annually through March 31, 2023. The Company extended its lease multiple times, most recently through March 2025, while management evaluates options for renewal or relocation.
Added
Item 2. Properties. Our principal executive offices are located at 12100 Wilshire Boulevard, 8 th Floor, Los Angeles, California, 90025. Our lease of our former executive offices at 3600 Wilshire Boulevard, Suite 1720, Los Angeles, California, 90010 expired on March 31, 2026 and was not renewed.
Added
Arps Dairy is currently operating a dairy processing plant consisting of approximately 15,000 square feet, located at 220 N. Clinton Drive, in Defiance, Ohio (the “Existing Facility”). It is also in the process of constructing the New Facility, a 44,000-square-foot state-of-the-art manufacturing facility at 136 Fox Run Drive in Defiance, Ohio.
Added
We plan to complete construction and install processing equipment during 2026, creating a modern production hub that will serve as a cornerstone of the Company’s expanded manufacturing strategy. In addition, Arps Dairy has been given a $2.4 million government grant to be used towards the equipment installation at the New Facility.
Added
Arps Dairy will vacate the Existing Facility once the New Facility is ready for operations in late 2026.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings As described in Note 6, the Company has an on-going dispute with the Manufacturer, the outcome of which cannot be predicted at this time. From time to time, various lawsuits and legal proceedings may arise in the ordinary course of business.
Biggest changeItem 3. Legal Proceedings As described in Note 6 of the Notes to Consolidated Financial Statements, the Company has an on-going dispute with the Manufacturer, the outcome of which cannot be predicted at this time. From time to time, various lawsuits and legal proceedings may arise in the ordinary course of business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers and registered clearing agencies. Recent Sales of Unregistered Securities None.
Biggest changeThe number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers and registered clearing agencies.
Purchases of Equity Securities by the Company There were no purchases of equity securities made by the Company in the period covered by this report. 15 Securities Authorized for Issuance Under Equity Compensation Plans For equity compensation plan information, refer to Item 12. Security Ownership of Certain Beneficial Owners and Related Stockholder Matters of this Annual Report on Form 10-K.
Purchases of Equity Securities by the Company There were no purchases of equity securities made by the Company in the period covered by this report. Securities Authorized for Issuance Under Equity Compensation Plans For equity compensation plan information, refer to Item 12. Security Ownership of Certain Beneficial Owners and Related Stockholder Matters of this Annual Report on Form 10-K.
Holders On March 24, 2025, there were 15,810,080 shares of our common stock outstanding. Our shares of common stock are held by 85 stockholders of record.
Holders On April 13, 2026, there were 16,104,853 shares of our common stock outstanding. Our shares of common stock are held by 82 stockholders of record.
Added
Recent Sales of Unregistered Securities During the quarter ended December 31, 2025, the Company issued 29,020 shares of common stock to the former owners of Arps Dairy for continuing debt guarantees valued at $97,000.
Added
The Company relied upon the exemption from registration contained in Section 4(a)(2) of the Securities Act, and corresponding provisions of state securities laws, on the basis that (i) offers were made to a limited number of persons, (ii) each offer was made through direct communication with the offerees by the Company, (iii) each of the offerees had the requisite sophistication and financial ability to bear risks of investing in the Company’s common stock, (iv) the Company provided disclosure to the offerees, and (v) there was no general solicitation and no commission or remuneration was paid in connection with the offers.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeStorage and outbound freight expense increased approximately $195,000 (15%) from $1,278,000 in 2023 to $1,473,000 in 2024, primarily because of the 32% increase in revenue over the same period, partially offset by freight efficiencies, and lower storage and inventory management cost in 2024. 18 General and administrative expense Year ended December 31, 2024 2023 Change Percent Personnel costs $ 1,250,000 $ 1,199,000 $ 51,000 4 % Stock based compensation 784,000 543,000 241,000 44 % Legal, professional and consulting fees 282,000 310,000 (28,000 ) -9 % Research and development 132,000 115,000 17,000 15 % Other general and administrative expenses 595,000 519,000 76,000 15 % $ 3,043,000 $ 2,686,000 $ 357,000 13 % General and administrative expense increased approximately $357,000 (13%) from $2,686,000 in 2023 to $3,043,000 in 2024.
Biggest changeGeneral and administrative expense 2025 2024 Change Percent Personnel costs $ 1,213,000 $ 1,250,000 $ (37,000 ) -3 % Stock based compensation 536,000 784,000 (248,000 ) -32 % Legal, professional and consulting fees 221,000 282,000 (61,000 ) -22 % Research and development 128,000 132,000 (4,000 ) -3 % Other general and administrative expenses 570,000 595,000 (25,000 ) -4 % Business acquisition expense 518,000 - 518,000 nm $ 3,186,000 $ 3,043,000 $ 143,000 5 % General and administrative expense increased approximately $143,000 (5%) from $3,043,000 in 2024 to $3,186,000 in 2025.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The information and financial data discussed below is derived from the audited financial statements of Barfresh for its fiscal years ended December 31, 2024 and 2023. The financial statements of Barfresh were prepared and presented in accordance with generally accepted accounting principles in the United States.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The information and financial data discussed below is derived from the audited financial statements of Barfresh for its fiscal years ended December 31, 2025 and 2024. The financial statements of Barfresh were prepared and presented in accordance with generally accepted accounting principles in the United States.
Provisions for refunds are generally provided for in the period the related sales are recorded, based on management’s assessment of historical and projected trends. 4) Allocate the transaction price to performance obligations in the contract Since the Company’s contracts contain a single performance obligation, delivery of frozen beverages, the transaction price is allocated to that single performance obligation. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company recognizes revenue from the sale of frozen beverages when title and risk of loss passes and the customer accepts the goods, which generally occurs at the time of delivery to a customer warehouse.
Provisions for refunds are generally provided for in the period the related sales are recorded, based on management’s assessment of historical and projected trends. 4) Allocate the transaction price to performance obligations in the contract Since the Company’s contracts contain a single performance obligation, delivery of products, the transaction price is allocated to that single performance obligation. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company recognizes revenue from the sale of products when title and risk of loss passes and the customer accepts the goods, which generally occurs at the time of delivery to a customer warehouse.
For the Company, this consists of the delivery of frozen beverages, which provide immediate benefit to the customer. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and is generally stated on the approved sales order.
For the Company, this consists of the delivery of products, which provide immediate benefit to the customer. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring goods and is generally stated on the approved sales order.
The Company evaluated the requirement to disaggregate revenue and concluded that substantially all of its revenue comes from a single product, frozen beverages. 17 Stock-based Compensation We account for share-based employee compensation plans under the fair value recognition and measurement provisions in accordance with applicable accounting standards, which require all share-based payments to employees, including grants of stock options and restricted stock units (RSUs) and performance stock units (PSUs), to be measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award.
Stock-based Compensation We account for share-based employee compensation plans under the fair value recognition and measurement provisions in accordance with applicable accounting standards, which require all share-based payments to employees, including grants of stock options and restricted stock units (RSUs) and performance stock units (PSUs), to be measured based on the grant date fair value of the awards, with the resulting expense generally recognized on a straight-line basis over the period during which the employee is required to perform service in exchange for the award.
Customer sales incentives such as volume-based rebates or discounts are treated as a reduction of sales at the time the sale is recognized. Shipping and handling costs are treated as fulfilment costs and presented in distribution, selling and administrative costs. Payments that are received before performance obligations are recorded are shown as current liabilities.
Customer sales incentives such as volume-based rebates or discounts are treated as a reduction of sales at the time the sale is recognized. Shipping and handling costs are treated as fulfilment costs and presented in distribution, selling and administrative costs.
Personnel cost represents the cost of employees including salaries, bonuses, employee benefits and employment taxes and continues to be our largest cost. Personnel cost increased by approximately $51,000 (4%) from $1,199,000 in 2023 to $1,250,000 in 2024.
Personnel cost represents the cost of employees including salaries, bonuses, employee benefits and employment taxes and continues to be our largest cost. Personnel cost decreased by approximately $37,000 (3%) from $1,250,000 in 2024 to $1,213,000 in 2025.
Additionally, on December 19, 2023, we drew down $470,000 in convertible debt and converted a total of $653,000 of principal and $4,000 of accrued interest into 495,331 shares of common stock.
Additionally, on December 19, 2023, we drew down $470,000 in convertible debt and converted a total of $653,000 of principal and $4,000 of accrued interest into 495,331 shares of common stock. Finally, on March 27 and 29, 2024, we drew down $136,000 in convertible debt and converted the total drawn into 124,208 shares, settling all debt.
Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors. See “Cautionary Note Regarding Forward Looking Statements” above for a discussion of forward-looking statements and the significance of such statements in the context of this Annual Report. Overview The Company’s products are packaged in four distinct formats.
Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors. See “Cautionary Note Regarding Forward Looking Statements” above for a discussion of forward-looking statements and the significance of such statements in the context of this Annual Report. 18 Overview The Company is primarily engaged in selling frozen beverages and food.
Liquidity and Capital Resources From July 2023 to March 2024, we executed subscription agreements for substantially all of a $2,000,000 privately placed convertible debt offering.
Net loss We had net losses of approximately $2,694,000 and $2,825,000 for the years ended December 31, 2025 and 2024, respectively. 22 Liquidity and Capital Resources From July 2023 to March 2024, we executed subscription agreements for substantially all of a $2,000,000 privately placed convertible debt offering.
Our liquidity needs will depend on how quickly we are able to profitably ramp up sales, as well as our ability to control and reduce variable operating expenses, and to continue to control fixed overhead expense.
Our liquidity needs will depend on careful management of the construction of the New Facility, as well as how quickly we are able to profitably ramp up sales, achieve manufacturing cost synergies anticipated as a result of the Acquisition, control and reduce variable operating expenses, and control fixed overhead expense.
The beverage packs contain all the ingredients necessary to make the beverage, including the base (either sorbet, frozen yogurt, or ice cream), real fruit pieces, juices, and ice – five ounces of water are added before blending. Domestic and international patents are owned by Barfresh, as well as related trademarks for all of the single serve products.
The Company’s single-serve format features portion controlled and ready-to-blend beverage ingredient packs or “beverage packs”. The beverage packs contain all the ingredients necessary to make the beverage, including the base (either sorbet, frozen yogurt, or ice cream), real fruit pieces, juices, and ice – five ounces of water are added before blending.
Our revenue in 2024 benefited from increased sales of our bottled Twist & Go smoothies due to improved availability resulting from inventory built over the months prior to the commencement of the school year, continued acceptance of Twist & Go smoothies provided in cartons, and improvements in bulk sales due to the reintroduction of our WHIRLZ 100% juice product in the fourth quarter of 2023.
Our revenue in 2025 benefited from increased sales of our bottled Twist & Go smoothies due to improved availability resulting from inventory built over the months prior to the commencement of the school year and growth of our Pop & Go juice pops, introduced in the fourth quarter of 2024, partially offset by declining revenue from our bulk, single serve and smoothie carton products.
Revenue Recognition Revenue Recognition In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains ownership of promised goods. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods.
The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods.
This sweet fruit and creamy yogurt smoothie contains four ounces of yogurt and a half-cup of fruit/fruit juice and comes in three different flavors: strawberry banana, peach, and mango pineapple. “Twist & Go”™ contains no added sugars, preservatives, artificial flavors or colors.
This sweet fruit and creamy yogurt smoothie contains four ounces of yogurt and a half-cup of fruit/fruit juice and comes in three different flavors: strawberry banana, peach, and mango pineapple. The product was originally launched in a bottled packaging format. The Company introduced Twist & Go™ cartons in 2022.
Our current dispute with the Manufacturer and the resulting loss of product supply and legal expense have negatively impacted our financial position, results of operations and cash flow.
Our continuing dispute with the Manufacturer and the resulting loss of product supply in 2022 negatively impacted our financial position, results of operations and cash flow. Subsequently, we contracted with a co-manufacturer for additional smoothie bottle manufacturing capacity.
Our operations to date have been financed by the sale of securities, the issuance of convertible debt and the issuance of short-term debt. If we are unable to generate sufficient cash flow from operations with the capital raised we will be required to raise additional funds either in the form of equity or in the form of debt.
If we are unable to generate sufficient cash flow from operations, control construction costs, or raise additional capital through debt issuances, we may be required to raise additional funds in the form of equity.
Selling, marketing and distribution expense Year ended December 31, 2024 2023 Change Percent Sales and marketing $ 1,666,000 $ 1,336,000 $ 330,000 25 % Storage and outbound freight 1,473,000 1,278,000 195,000 15 % $ 3,139,000 $ 2,614,000 $ 525,000 20 % Selling, marketing and distribution expense increased approximately $525,000 (20%) from $2,614,000 in 2023 to $3,139,000 in 2024.
Selling, marketing and distribution expense 2025 2024 Change Percent Sales and marketing $ 1,652,000 $ 1,666,000 $ (14,000 ) -1 % Storage and outbound freight 1,530,000 1,473,000 57,000 4 % $ 3,182,000 $ 3,139,000 $ 43,000 1 % Selling, marketing and distribution expense increased approximately $43,000 (1%) from $3,139,000 in 2024 to $3,182,000 in 2025. 21 Sales and marketing expense decreased approximately $14,000 (1%) from approximately $1,666,000 in 2024 to $1,652,000 in 2025.
At only 125 -130 calories and with 5 grams of protein, it makes the perfect start to any day or on-the-go snack. The Company’s bulk “Easy Pour” format, which contains all the ingredients necessary to make the beverage, is packaged in gallon containers in a concentrated formula that is mixed 1:1 with water.
The Company’s bulk “Easy Pour” format, which contains all the ingredients necessary to make the beverage, is packaged in gallon containers in a concentrated formula that is mixed 1:1 with water. The Company has a “no sugar added” version of the bulk “Easy Pour” format that is specifically targeted for the aforementioned USDA national school meal programs.
Armed Forces and is currently in contract with and selling its bulk Easy Pour products into over one hundred military bases in the United States and abroad. The Company’s single-serve format features portion controlled and ready-to-blend beverage ingredient packs or “beverage packs”.
In addition, the Company received approval from the United States Defense Logistics Agency (“DLA”) to sell its smoothie products into all branches of the U.S. Armed Forces and is currently in contract with and selling its bulk Easy Pour products into over one hundred military bases in the United States and abroad.
There are no assurances that we will be able to generate the necessary capital to carry out our current plan of operations.
There are no assurances that the grant received in December 2025 and the proceeds from the sale of convertible promissory notes in March 2026 will be sufficient to carry out our current plan of operations.
Barfresh utilizes contract manufacturers to manufacture all of the products in the United States. 16 Critical Accounting Policies Our financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Critical Accounting Policies Our financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). 19 Revenue Recognition Revenue Recognition In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when a customer obtains ownership of promised goods.
The increase is due to higher attainment under performance awards and the modification of expiring options issued to our board of directors to extend the term through December 2026. Legal, professional and consulting fees decreased by approximately $28,000 (-9%). We reduced outside services and obtained non-recourse litigation financing to conserve working capital.
The decrease is due to lower attainment under performance awards and the non-recurrence of the two-year extension of expiring board of director options in December 2024. Legal, professional and consulting fees decreased by approximately $61,000 (22%) due to non-recourse litigation funding secured in May of 2024.
Our net loss adjusted for non-cash operating expenses was a loss of $1,752,000, while changes in non-cash current assets and liabilities consumed $477,000 primarily because we invested in inventory for production trials and ramp, and our accounts payable decreased as we improved adherence with vendor terms.
Our net loss adjusted for non-cash operating expenses was a loss of $2,839,000, while changes in current assets and liabilities provided $1,173,000 primarily because of delayed payments to co-manufacturers who discontinued providing product in December 2025 and January 2026.
As of December 31, 2024, we had working capital of $606,000 compared with $2,345,000 at December 31, 2023, both excluding disputed accounts payable of $499,000 resulting from our dispute with the Manufacturer. The decrease in working capital is primarily due to losses incurred in 2024, partially offset by borrowing under our receivables-based line of credit.
As of December 31, 2025, we had negative working capital of $6,303,000, including $2,170,000 of mortgage debt and $2,433,000 of construction payables, compared with working capital $606,000 on December 31, 2024. Disputed accounts payable due to the Manufacturer of $499,000 are excluded from both December 31, 2025 and 2024 working capital amounts.
Expense for PSUs is recognized based on expected performance against targets. Results of Operations Revenue and cost of revenue Revenue was $10,717,000 in 2024 compared to $8,127,000 in 2023, an increase of $2,590,000, or 32%.
Expense for PSUs is recognized based on expected performance against targets. 20 Results of Operations Revenue and cost of revenue We determined that we operate in two reportable segments: Frozen Beverages and Food, and Raw and Processed Milk.
The increase in personnel cost resulted primarily from the non-recurring confirmation and recognition of our 2021 COVID-related tax credit in 2023, partially offset by a reduction in cash bonus expense. Stock-based compensation increased by approximately $241,000 (44%) from $543,000 in 2023 to $784,000 in 2024.
The decrease in personnel cost resulted primarily from a reduction in co-manufacturing administration headcount, partially offset by the addition of general and administrative personnel at Arps Dairy. Stock-based compensation decreased by $248,000 (32%) from $784,000 in 2024 to $536,000 in 2025.
Removed
The Company has a “no sugar added” version of the bulk “Easy Pour” format that is specifically targeted for the aforementioned USDA national school meal programs. In addition, the Company received approval from the United States Defense Logistics Agency (“DLA”) to sell its smoothie products into all branches of the U.S.
Added
As a result of the Acquisition, the Company sells raw and processed milk to a single customer. Continuation of the raw and processed milk business is strategic from the standpoint of our supply chain and capacity utilization. The Company’s legacy products are packaged in four distinct formats.
Removed
Patent rights have been maintained in two jurisdictions including the United States. The patents expire in 2025. The Company conducts sales through several channels, including National Accounts, Regional Accounts, and Broadline Distributors. Currently we have 10 employees and 3 consultants.
Added
“Twist & Go”™ contains no added sugars, preservatives, artificial flavors or colors. At only 125 -130 calories and with 5 grams of protein, it makes the perfect start to any day or on-the-go snack.
Removed
Cost of revenue was $7,049,000 in 2024 compared to $5,243,000 in 2023, an increase of $1,806,000, or 34%. Cost of revenue increased at a slightly higher rate compared to revenue due to $283,000 in cost incurred to relocate our single-serve smoothie pouch production line. Our gross profit was $3,668,000 (34%) and $2,884,000 (36%) for 2024 and 2023, respectively.
Added
In 2024, the Company introduced its ready-to-eat juice pop, “Pop & Go” ™ , with initial shipments in the fourth quarter of 2024. The product will initially be focused towards the National School Lunch and Smart Snacks in Schools Programs.
Removed
Excluding production relocation costs, our gross profit was $3,951,000 in 2024 (37%). The improvement in gross margin is a result of favorable product mix, pricing actions, and a slight improvement in the cost of supply chain components.
Added
Pop & Go ™ contains 4 oz of juice, no added sugars, preservatives or artificial flavors or colors, and comes in five flavors. The Company conducts sales through several channels, including National Accounts, Regional Accounts, and Broadline Distributors. The raw and processed milk is sold directly to a single customer.
Removed
Sales and marketing expense increased approximately $330,000 (25%) from approximately $1,336,000 in 2023 to $1,666,000 in 2024. The increase is a result of higher personnel costs, travel and broker commission due to expansion of the broker network.
Added
As of April 13, we have 32 employees and 3 consultants. In 2025, Barfresh utilized contract manufacturers to manufacture the predominate majority of all of the products in the United States. Barfresh anticipates that it will manufacture the majority of its products in 2026.
Removed
Research and development expense increased by approximately $17,000 (15%) from $115,000 in 2023 to $132,000 in 2024. Expense related to optimization of our carton format and the re-launch of our bulk concentrate products in 2023, and the launch of our Pop & Go product in 2024, as well as reformulations to meet specific market or manufacturing requirements.
Added
The following table summarizes revenue and gross profit by segment for the years ended December 31, 2025 and 2024: 2025 2024 Change Percent Revenue Frozen beverages and food $ 11,460,000 $ 10,717,000 $ 743,000 7 % Raw and processed milk 2,748,000 - 2,748,000 nm Revenue $ 14,208,000 $ 10,717,000 $ 3,491,000 33 % Gross profit Frozen beverages and food $ 2,977,000 $ 3,668,000 $ (691,000 ) -19 % Raw and processed milk 137,000 - 137,000 nm Gross profit $ 3,114,000 $ 3,668,000 $ (554,000 ) -15 % Revenue was $14,208,000 in 2025 compared to $10,717,000 in 2024, an increase of $3,491,000, or 33%.
Removed
Other general and administrative expenses increased approximately $76,000 (15%) from $519,000 in 2023 to $595,000 in 2024 primarily due to recruiting fees incurred to broaden the capabilities of our management team. Interest expense Interest expense was $52,000 in 2024 compared to $8,000 in 2023.
Added
Arps Dairy contributed $2,852,000 to revenue, including $2,748,000 in raw and processed milk sales.
Removed
The increase of $44,000 is a result of securing a receivables-based line of credit in 2024, as well as equipment and software financing. Net loss We had net losses of approximately $2,825,000 and $2,824,000 for the years ended December 31, 2024 and 2023, respectively.
Added
Cost of revenue was $11,094,000 in 2025 compared to $7,049,000 in 2024, an increase of $4,045,000, or 57%. Cost of revenue increased at a higher rate compared to revenue due to the inclusion of the raw and processed milk operations after the Acquisition.
Removed
Finally, on March 27 and 29, 2024, we drew down $136,000 in convertible debt and converted the total drawn into 124,208 shares, settling all debt. 19 During the year ended December 31, 2024, we used $2,229,000 in operations.
Added
Products in this segment are generally commodities with commensurate margins, but provide a strategic milk supply to the business and contribute to fixed overhead costs. Cost of revenue in the frozen beverages and food segment, which consisted primarily of Barfresh legacy products in 2025, increased 20%.
Removed
While the introduction of our carton packaging format in 2023 has mitigated the loss of supply, the product offering has not been accepted by some customers or as a substitute for the bottle product in all use cases. We have contracted with a co-manufacturer for additional smoothie bottle manufacturing capacity.
Added
The rate of increase in cost of revenue exceeded revenue growth due to start up costs at Arps Dairy, provisions for anticipated expirations of bulk product inventory, and provisions for ingredient related cost obligations to conclude our multi-year co-manufacturing agreements. Our gross profit was $3,114,000 (22%) and $3,668,000 (34%) for 2025 and 2024, respectively.
Removed
Expanded capacity became available in the fourth quarter of 2024, and we expect that capacity to increase and become more efficient in 2025, subject to the risks and uncertainties associated with production activities.
Added
Excluding production relocation cost and ingredient contract obligations, our gross profit was $3,177,000 in 2025 (22%) and $3,951,000 in 2024 (37%). Gross profit from frozen beverages and food was $2,977,000 in 2025 (26%) compared to $3,668,000 in 2024 (34%).
Removed
Additionally, we have taken other measures to reduce our liquidity requirements, including compensating our directors and employees with equity to reduce cash compensation requirements, obtaining non-recourse litigation financing, securing receivables financing in the third quarter of 2024, and the sale of an aggregate of 1,052,793 shares of common stock to raise $3,000,000 in February 2025.
Added
The decrease is due to product mix, as bulk, single serve and smoothie carton products have generally sold at a higher gross margin compared to smoothie bottles. Additionally, gross profit was impacted by the increase in cost of revenue from start-up costs and inventory provisions. Gross profit from raw and processed milk was $137,000 in 2025 (5%).
Added
Storage and outbound freight expense increased approximately $57,000 (4%) from $1,473,000 in 2024 to $1,530,000 in 2025, primarily because of the 7% increase in frozen beverage and food revenue over the same period, partially offset by freight efficiencies, and lower storage and inventory management cost in 2024. We incurred $99,000 in outbound freight in 2025 for processed milk deliveries.
Added
Legal, professional and consulting fees associated with the Acquisition are included in business acquisition expense. Other general and administrative expenses decreased approximately $25,000 (4%) from $595,000 in 2024 to $570,000 in 2025. Business acquisition expense of $518,000 represents legal, accounting, and consulting fees, as well as travel associated with the Acquisition.
Added
Interest expense Interest expense was $217,000 in 2025 compared to $52,000 in 2024. The increase of $165,000 is a result of utilization of receivables financing throughout the year, and mortgage debt, notes and lease financing related to the Acquisition and the purchase of equipment required for the New Facility.
Added
On February 5, 2025, we entered into securities purchase agreements with several investors, pursuant to which the Company sold an aggregate of 1,052,793 shares of common stock at a price of $2.85 per share in a registered direct offering, raising $2,974,000.
Added
While expanded capacity became available in the fourth quarter of 2024, we were notified in 2025 that other co-manufacturers elected to discontinue production of smoothie cartons and smoothie bottles in December 2025 and January 2026, respectively. The Acquisition was undertaken to resolve constrained capacity experienced since 2022 under the co-manufacturing business model.
Added
In order to consummate the Acquisition, we paid $1,223,000, net of cash acquired, to purchase 100% of Arps Dairy stock. Additionally, we incurred $518,000 in acquisition costs in 2025. In order to finance the Acquisition, we increased our receivables-based line of credit in September 2025 to $2,500,000.
Added
As a result of the Acquisition, $5,251,000 of mortgage debt, construction related payables and advances from former shareholders payable by Arps Dairy became short-term financial commitments of the Company. The Acquisition was structured to allow us to take control of Arps Dairy manufacturing operations ahead of completing all necessary long-term financing activities.
Added
Following the Acquisition, Arps Dairy secured a receivables-based line of credit of $1,500,000. We acquired $728,000 of equipment through leasing transactions in 2025. In December 2025, we were granted $2,400,000 to fund up to 50% of the cost of new equipment purchases and installation for the New Facility. During the year ended December 31, 2025, we used $1,666,000 in operations.
Added
In February 2026, $400,000 of Arps selling shareholder advances were converted into shares of our common stock. In March 2026, we raised $7,528,000 through the sale of convertible promissory notes.
Added
The proceeds were used to retire $2,541,000 in mortgage debt and construction payables, and are expected to be used to repay remaining construction related payables as well as complete construction of the New Facility in 2026. 23 Our operations to date have been financed by the sale of securities, the issuance of convertible and short-term debt and equipment leasing.
Added
We anticipate that we will have additional sources of liquidity, if required, through mortgage financing supported by the guarantee of the United States Department of Agriculture, and equipment lease financing, among other options. However, there are no assurances that these funds will be available.

Other BRFH 10-K year-over-year comparisons