Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 25, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-55131 | |
Entity Registrant Name | BARFRESH FOOD GROUP INC. | |
Entity Central Index Key | 0001487197 | |
Entity Tax Identification Number | 27-1994406 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 3600 Wilshire Blvd. | |
Entity Address, Address Line Two | Suite 1720 | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90010 | |
City Area Code | 310 | |
Local Phone Number | 598-7113 | |
Title of 12(b) Security | Common stock, $0.000001 par value | |
Trading Symbol | BRFH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Elected Not To Use the Extended Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,919,899 | |
Entity Information, Former Legal or Registered Name | Not Applicable |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 4,284,168 | $ 5,532,840 |
Restricted cash | 250,382 | 142,382 |
Trade accounts receivable, net | 1,719,937 | 1,222,476 |
Other receivables | 231,959 | |
Inventory, net | 850,802 | 705,349 |
Prepaid expenses and other current assets | 101,396 | 63,859 |
Total current assets | 7,438,644 | 7,666,906 |
Property, plant and equipment, net of depreciation | 1,456,527 | 1,588,043 |
Operating lease right-of-use assets, net | 70,176 | 87,391 |
Intangible assets, net of amortization | 354,173 | 370,278 |
Deposits | 6,746 | 6,746 |
Total assets | 9,326,266 | 9,719,364 |
Current liabilities: | ||
Accounts payable | 1,377,590 | 974,218 |
Accrued expenses | 202,336 | 228,227 |
Accrued payroll and employee related | 223,292 | 212,465 |
Lease liability | 76,731 | 81,295 |
Total current liabilities | 1,879,949 | 1,496,205 |
Long term liabilities: | ||
Accrued interest | 33,600 | 33,600 |
Lease liability | 13,701 | |
Total liabilities | 1,913,549 | 1,543,506 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity: | ||
Preferred stock, $0.000001 par value, 5,000,000 shares authorized, none issued or outstanding | ||
Common stock, $0.000001 par value; 295,000,000 shares authorized; 12,919,899 and 12,905,112 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 13 | 13 |
Additional paid in capital | 60,471,988 | 60,340,620 |
Accumulated deficit | (53,059,284) | (52,164,775) |
Total stockholders’ equity | 7,412,717 | 8,175,858 |
Total liabilities and stockholders’ equity | $ 9,326,266 | $ 9,719,364 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.000001 | $ 0.000001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized | 295,000,000 | 295,000,000 |
Common stock, shares issued | 12,919,899 | 12,905,112 |
Common stock, shares outstanding | 12,919,899 | 12,905,112 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 2,525,549 | $ 1,014,851 |
Cost of revenue | 1,709,873 | 665,532 |
Gross profit | 815,676 | 349,319 |
Operating expenses: | ||
General and administrative | 1,549,039 | 751,601 |
Depreciation and amortization | 161,146 | 146,933 |
Total operating expenses | 1,710,185 | 898,534 |
Operating loss | (894,509) | (549,215) |
Other (income)/expenses | ||
Gain from derivative liability | (16,787) | |
Interest | 59,091 | |
Total other expense | 42,304 | |
Net loss | $ (894,509) | $ (591,519) |
Per share information - basic and fully diluted: | ||
Weighted average shares outstanding | 12,909,204 | 11,471,798 |
Net loss per share | $ (0.07) | $ (0.05) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Cash Flows [Abstract] | ||
Net cash used in operating activities | $ (1,132,148) | $ (410,574) |
Investing activities | ||
Purchase of property and equipment | (13,524) | (4,647) |
Net cash used in investing activities | (13,524) | (4,647) |
Financing activities | ||
Proceeds from issuance of stock | 5,000 | |
Proceeds from note payable | 568,131 | |
Net cash from financing activities | 5,000 | 568,131 |
Net change in cash and restricted cash | (1,140,672) | 152,910 |
Cash and restricted cash, beginning of period | 5,675,222 | 1,959,269 |
Cash and restricted cash, end of period | 4,534,550 | 2,112,179 |
Cash paid during the period for: | ||
Cash paid for amounts included in the measurement of lease liabilities | 19,648 | 19,076 |
Non-cash financing and investing activities: | ||
Equipment included in accounts payable and accrued liability | $ 23,511 |
Description of the Business, Ba
Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies | Note 1. Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies Barfresh Food Group Inc., (“we,” “us,” “our,” and the “Company”) was incorporated on February 25, 2010 in the State of Delaware. The Company is engaged in the manufacture and distribution of ready-to-drink and ready-to-blend beverages, particularly, smoothies, shakes and frappes. Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 10, 2022. In management’s opinion, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented. Operating results for any quarter are not necessarily indicative of the results for the full fiscal year. Reverse Stock Split Effective December 29, 2021, the Company amended its certificate of incorporation to implement a 1-for-13 reverse stock split of its issued and outstanding shares of common stock. All the share numbers, share prices, exercise prices and other per share information throughout these financial statements have been adjusted, on a retroactive basis, to reflect the 1-for-13 reverse stock split. Principles of Consolidation The consolidated financial statements include the financial statements of the Company and our wholly owned subsidiaries, Barfresh Inc. and Barfresh Corporation Inc. (formerly known as Smoothie, Inc.). All inter-company balances and transactions among the companies have been eliminated upon consolidation. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. Summary of Significant Accounting Policies There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 10, 2022 that have had a material impact on our condensed consolidated financial statements and related notes. Fair Value Measurement Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange. Level 2 – Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs. Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value. Our financial instruments consist of cash, accounts receivable, accounts payable, advanced payments, restricted cash, as well as our PPP loan, convertible notes, and derivative liabilities which were settled in 2021. The carrying value of our financial instruments on March 31, 2022, December 31, 2021 and March 31, 2021 approximates their fair values, except for the derivative liability, which was carried at fair value prior to its extinguishment. Restricted Cash At March 31, 2022 and December 31, 2021, the Company had approximately $ 250,000 142,000 Accounts Receivable As of each of March 31, 2022 and December 31, 2021, the Company’s allowance for doubtful accounts was approximately $ 121,000 Other Receivables Other receivables consist of amounts due from vendors for materials acquired on their behalf for use in manufacturing the Company’s products. 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 Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable. For the Company, the contract is the approved sales order, which may also be supplemented by other agreements that formalize various terms and conditions with customers. 2) Identify the performance obligation in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer. 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. Variable consideration, which typically includes volume-based rebates or discounts, are estimated utilizing the most likely amount method. 4) Allocate the transaction price to performance obligations in the contract Since our 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. 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 fulfillment costs and presented in distribution, selling and administrative costs. Payments that are received before performance obligations are recorded are shown as current liabilities. The company evaluated the requirement to disaggregate revenue and concluded that substantially all of its revenue comes from smoothie beverages. Shipping and Storage Costs Shipping and handling costs are included in general and administrative expenses. For the three months ending March 31, 2022 and 2021, shipping and handling costs totaled approximately $ 437,000 144,000 Research and Development Expenditures for research activities relating to product development and improvement are charged to expense as incurred. The Company incurred approximately $ 31,000 68,000 Loss Per Share At March 31, 2022 and 2021 common stock equivalents have not been included in the calculation of net loss per share as their effect is anti-dilutive as a result of losses incurred. Recent Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We have not determined if the impact of recently issued standards that are not yet effective will have an impact on our results of operations and financial position. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 2. Inventory Inventory consists of the following: Schedule of Inventory March 31, December 31, 2022 2021 Raw materials $ 102,768 $ 105,355 Finished goods 748,035 599,994 Inventory, net $ 850,802 $ 705,349 |
Property Plant and Equipment
Property Plant and Equipment | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property Plant and Equipment | Note 3. Property Plant and Equipment Property and equipment, net consist of the following: Schedule of Property and Equipment March 31, December 31, 2022 2021 Furniture and fixtures $ 1,524 $ 1,524 Manufacturing equipment and customer equipment 3,813,763 3,800,238 Leasehold improvements 4,886 4,886 Vehicles 29,696 29,696 Property and equipment, gross 3,849,869 3,836,344 Less: accumulated depreciation (3,039,673 ) (2,894,632 ) Property and equipment 810,196 941,712 Equipment not yet placed in service 646,331 646,331 Property and equipment, net of depreciation $ 1,456,527 $ 1,588,043 Depreciation expense related to these assets was approximately 145,000 131,000 6,000 no |
Convertible Notes and Derivativ
Convertible Notes and Derivative Liability (Related and Unrelated Party) | 3 Months Ended |
Mar. 31, 2022 | |
Convertible Notes And Derivative Liability | |
Convertible Notes and Derivative Liability (Related and Unrelated Party) | Note 4. Convertible Notes and Derivative Liability (Related and Unrelated Party) In 2018, the Company issued Milestone I and Milestone II Convertible Notes, which were repaid and converted in the second quarter of 2021. The Milestone II Convertible Notes contained variable conversion provisions based on the future price of the Company’s common stock, resulting in the potential issuance of an indeterminate number of shares of common stock upon conversion. The Company measured the fair value of the derivative resulting from the variable conversion provisions each reporting period. The fair value was reported as a derivative liability and the change in value of $ 16,787 was recorded as a gain in the accompanying condensed consolidated statement of operations for the three months ended March 31, 2021. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5. Commitments and Contingencies The Company leases office space under a non-cancelable operating lease which expires on March 31, 2023 . Our periodic lease cost was approximately $ 20,000 for each of the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, our right of use asset was $ 70,176 . The following table presents the future operating lease payment as of March 31, 2022. Schedule of Estimate Future Maturities of Lease Liabilities 2022 (nine months remaining) $ 60,713 2023 20,238 Total lease payments 80,951 Less: imputed interest (4,220 ) Total lease liability $ 76,731 From time to time, various lawsuits and legal proceedings may arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these, or other matters may arise from time to time that may harm our business. The Company is currently the defendant in one legal proceeding for an amount less than $ 100,000 |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | Note 6. Stockholders’ Equity The following are changes in stockholders’ equity for the three months ended March 31, 2021 and March 31, 2022: Schedule of Changes in Stockholders' Equity Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance December 31, 2020 11,471,797 $ 12 $ 53,223,803 $ (50,899,629 ) $ 2,324,186 Shares issued for warrant exercise - - Equity based compensation - - (34,585 ) - (34,585 ) Issuance of stock for services - - Net loss - - - (591,519 ) (591,519 ) Balance March 31, 2021 11,471,797 $ 12 $ 53,189,218 $ (51,491,148 ) $ 1,698,082 Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance December 31, 2021 12,905,112 $ 13 $ 60,340,620 $ (52,164,775 ) $ 8,175,858 Shares issued for warrant exercise 986 5,000 - 5,000 Equity based compensation - - 28,036 - 28,036 Issuance of stock for services 13,801 98,332 - 98,332 Net loss - - - (894,509 ) (894,509 ) Balance March 31, 2022 12,919,899 $ 13 $ 60,471,988 $ (53,059,284 ) $ 7,412,717 Warrants During the three months ended March 31, 2022, 96,664 9.10 986 5.07 5,000 Equity Incentive Plan The following is a summary of stock option activity for the three months ended March 31, 2022: Summary of Stock Options Activity Number of Options Weighted average exercise price per share Remaining term in years Outstanding on December 31, 2021 625,016 $ 7.55 3.8 Issued 25,385 $ 5.58 Cancelled/expired (11,541 ) $ 4.94 Outstanding on March 31, 2022 638,860 $ 7.52 3.5 Exercisable, March 31, 2022 539,345 $ 7.92 3.0 The fair value of the options issued (approximately $105,000, in the aggregate) was calculated using the Black-Sholes option pricing model, based on the following: Summary of Fair Value of Options Using Black-Sholes Option Pricing Model 2021 Expected term (in years) 5.5 Expected volatility 85.7 % Risk-free interest rate 1.5 1.6 % Expected dividends $ - Weighted average grant date fair value per share $ 4.15 As of March 31, 2022, the Company has approximately $ 189,000 2.2 The following is a summary of restricted stock award and restricted stock unit activity for the three months ended March 31, 2022: Summary of Restricted Stock Award and Restricted Stock Unit Activity Number of shares Weighted average grant date fair value Unvested at January 1, 2022 - $ - Granted 40,554 $ 5.36 Unvested at March 31, 2022 40,554 $ 5.36 As of March 31, 2022, the Company has approximately $ 202,000 2.6 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7. Income Taxes ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of evidence, it is more than likely than not that some portion or all the deferred tax assets will not be recognized. Accordingly, at this time the Company has placed a valuation allowance on all tax assets. As of March 31, 2022, the estimated effective tax rate for the year was zero There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2017 through the current period. Our policy is to account for income tax related interest and penalties in income tax expense in the statement of operations. For the three months ended March 31, 2022 and 2021, the Company did not incur any interest and penalties associated with tax positions. As of March 31, 2022, the Company did not have any significant unrecognized uncertain tax positions. |
Description of the Business, _2
Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the fiscal year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 10, 2022. In management’s opinion, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented. Operating results for any quarter are not necessarily indicative of the results for the full fiscal year. |
Reverse Stock Split | Reverse Stock Split Effective December 29, 2021, the Company amended its certificate of incorporation to implement a 1-for-13 reverse stock split of its issued and outstanding shares of common stock. All the share numbers, share prices, exercise prices and other per share information throughout these financial statements have been adjusted, on a retroactive basis, to reflect the 1-for-13 reverse stock split. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the financial statements of the Company and our wholly owned subsidiaries, Barfresh Inc. and Barfresh Corporation Inc. (formerly known as Smoothie, Inc.). All inter-company balances and transactions among the companies have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the years reported. Actual results may differ from these estimates. |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies There have been no changes to our significant accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 10, 2022 that have had a material impact on our condensed consolidated financial statements and related notes. |
Fair Value Measurement | Fair Value Measurement Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange. Level 2 – Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs. Level 3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value. Our financial instruments consist of cash, accounts receivable, accounts payable, advanced payments, restricted cash, as well as our PPP loan, convertible notes, and derivative liabilities which were settled in 2021. The carrying value of our financial instruments on March 31, 2022, December 31, 2021 and March 31, 2021 approximates their fair values, except for the derivative liability, which was carried at fair value prior to its extinguishment. |
Restricted Cash | Restricted Cash At March 31, 2022 and December 31, 2021, the Company had approximately $ 250,000 142,000 |
Accounts Receivable | Accounts Receivable As of each of March 31, 2022 and December 31, 2021, the Company’s allowance for doubtful accounts was approximately $ 121,000 |
Other Receivables | Other Receivables Other receivables consist of amounts due from vendors for materials acquired on their behalf for use in manufacturing the Company’s 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 Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for goods or services that are transferred is probable. For the Company, the contract is the approved sales order, which may also be supplemented by other agreements that formalize various terms and conditions with customers. 2) Identify the performance obligation in the contract Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer. 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. Variable consideration, which typically includes volume-based rebates or discounts, are estimated utilizing the most likely amount method. 4) Allocate the transaction price to performance obligations in the contract Since our 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. 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 fulfillment costs and presented in distribution, selling and administrative costs. Payments that are received before performance obligations are recorded are shown as current liabilities. The company evaluated the requirement to disaggregate revenue and concluded that substantially all of its revenue comes from smoothie beverages. |
Shipping and Storage Costs | Shipping and Storage Costs Shipping and handling costs are included in general and administrative expenses. For the three months ending March 31, 2022 and 2021, shipping and handling costs totaled approximately $ 437,000 144,000 |
Research and Development | Research and Development Expenditures for research activities relating to product development and improvement are charged to expense as incurred. The Company incurred approximately $ 31,000 68,000 |
Loss Per Share | Loss Per Share At March 31, 2022 and 2021 common stock equivalents have not been included in the calculation of net loss per share as their effect is anti-dilutive as a result of losses incurred. |
Recent Pronouncements | Recent Pronouncements From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We have not determined if the impact of recently issued standards that are not yet effective will have an impact on our results of operations and financial position. |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory consists of the following: Schedule of Inventory March 31, December 31, 2022 2021 Raw materials $ 102,768 $ 105,355 Finished goods 748,035 599,994 Inventory, net $ 850,802 $ 705,349 |
Property Plant and Equipment (T
Property Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consist of the following: Schedule of Property and Equipment March 31, December 31, 2022 2021 Furniture and fixtures $ 1,524 $ 1,524 Manufacturing equipment and customer equipment 3,813,763 3,800,238 Leasehold improvements 4,886 4,886 Vehicles 29,696 29,696 Property and equipment, gross 3,849,869 3,836,344 Less: accumulated depreciation (3,039,673 ) (2,894,632 ) Property and equipment 810,196 941,712 Equipment not yet placed in service 646,331 646,331 Property and equipment, net of depreciation $ 1,456,527 $ 1,588,043 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Estimate Future Maturities of Lease Liabilities | The following table presents the future operating lease payment as of March 31, 2022. Schedule of Estimate Future Maturities of Lease Liabilities 2022 (nine months remaining) $ 60,713 2023 20,238 Total lease payments 80,951 Less: imputed interest (4,220 ) Total lease liability $ 76,731 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Changes in Stockholders' Equity | The following are changes in stockholders’ equity for the three months ended March 31, 2021 and March 31, 2022: Schedule of Changes in Stockholders' Equity Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance December 31, 2020 11,471,797 $ 12 $ 53,223,803 $ (50,899,629 ) $ 2,324,186 Shares issued for warrant exercise - - Equity based compensation - - (34,585 ) - (34,585 ) Issuance of stock for services - - Net loss - - - (591,519 ) (591,519 ) Balance March 31, 2021 11,471,797 $ 12 $ 53,189,218 $ (51,491,148 ) $ 1,698,082 Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance December 31, 2021 12,905,112 $ 13 $ 60,340,620 $ (52,164,775 ) $ 8,175,858 Shares issued for warrant exercise 986 5,000 - 5,000 Equity based compensation - - 28,036 - 28,036 Issuance of stock for services 13,801 98,332 - 98,332 Net loss - - - (894,509 ) (894,509 ) Balance March 31, 2022 12,919,899 $ 13 $ 60,471,988 $ (53,059,284 ) $ 7,412,717 |
Summary of Stock Options Activity | The following is a summary of stock option activity for the three months ended March 31, 2022: Summary of Stock Options Activity Number of Options Weighted average exercise price per share Remaining term in years Outstanding on December 31, 2021 625,016 $ 7.55 3.8 Issued 25,385 $ 5.58 Cancelled/expired (11,541 ) $ 4.94 Outstanding on March 31, 2022 638,860 $ 7.52 3.5 Exercisable, March 31, 2022 539,345 $ 7.92 3.0 |
Summary of Fair Value of Options Using Black-Sholes Option Pricing Model | The fair value of the options issued (approximately $105,000, in the aggregate) was calculated using the Black-Sholes option pricing model, based on the following: Summary of Fair Value of Options Using Black-Sholes Option Pricing Model 2021 Expected term (in years) 5.5 Expected volatility 85.7 % Risk-free interest rate 1.5 1.6 % Expected dividends $ - Weighted average grant date fair value per share $ 4.15 |
Summary of Restricted Stock Award and Restricted Stock Unit Activity | The following is a summary of restricted stock award and restricted stock unit activity for the three months ended March 31, 2022: Summary of Restricted Stock Award and Restricted Stock Unit Activity Number of shares Weighted average grant date fair value Unvested at January 1, 2022 - $ - Granted 40,554 $ 5.36 Unvested at March 31, 2022 40,554 $ 5.36 |
Description of the Business, _3
Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Allowance for doubtful accounts receivable | $ 121,000 | $ 121,000 | |
Shipping and handling costs | 437,000 | $ 144,000 | |
Research and development expenses | 31,000 | $ 68,000 | |
Co-packing Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Restricted cash | $ 250,000 | $ 142,000 |
Schedule of Inventory (Details)
Schedule of Inventory (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 102,768 | $ 105,355 |
Finished goods | 748,035 | 599,994 |
Inventory, net | $ 850,802 | $ 705,349 |
Schedule of Property and Equipm
Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,849,869 | $ 3,836,344 |
Less: accumulated depreciation | (3,039,673) | (2,894,632) |
Property and equipment | 810,196 | 941,712 |
Equipment not yet placed in service | 646,331 | 646,331 |
Property and equipment, net of depreciation | 1,456,527 | 1,588,043 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,524 | 1,524 |
Manufacturing Equipment and Customer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,813,763 | 3,800,238 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,886 | 4,886 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 29,696 | $ 29,696 |
Property Plant and Equipment (D
Property Plant and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 145,000 | $ 131,000 |
Depreciation expense in cost of goods sold | $ 0 | $ 6,000 |
Convertible Notes and Derivat_2
Convertible Notes and Derivative Liability (Related and Unrelated Party) (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Convertible Notes And Derivative Liability | ||
Derivative, Gain (Loss) on Derivative, Net | $ 16,787 |
Schedule of Estimate Future Mat
Schedule of Estimate Future Maturities of Lease Liabilities (Details) | Mar. 31, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 (nine months remaining) | $ 60,713 |
2023 | 20,238 |
Total lease payments | 80,951 |
Less: imputed interest | (4,220) |
Total lease liability | $ 76,731 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Lease Expiration Date | Mar. 31, 2023 | ||
Operating Lease, Expense | $ 20,000 | ||
Operating Lease, Right-of-Use Asset | $ 70,176 | $ 87,391 | |
Legal proceeding amount | $ 100,000 |
Schedule of Changes in Stockhol
Schedule of Changes in Stockholders' Equity (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance December 31, 2021 | $ 8,175,858 | $ 2,324,186 |
Shares issued for warrant exercise | 5,000 | |
Equity based compensation | 28,036 | (34,585) |
Issuance of stock for services | 98,332 | |
Net loss | (894,509) | (591,519) |
Balance March 31, 2022 | 7,412,717 | 1,698,082 |
Common Stock [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance December 31, 2021 | $ 13 | $ 12 |
Balance, shares | 12,905,112 | 11,471,797 |
Shares issued for warrant exercise, shares | 986 | |
Equity based compensation | ||
Issuance of stock for services, shares | 13,801 | |
Net loss | ||
Balance March 31, 2022 | $ 13 | $ 12 |
Balance, shares | 12,919,899 | 11,471,797 |
Additional Paid-in Capital [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance December 31, 2021 | $ 60,340,620 | $ 53,223,803 |
Shares issued for warrant exercise | 5,000 | |
Equity based compensation | 28,036 | (34,585) |
Issuance of stock for services | 98,332 | |
Net loss | ||
Balance March 31, 2022 | 60,471,988 | 53,189,218 |
Retained Earnings [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Balance December 31, 2021 | (52,164,775) | (50,899,629) |
Shares issued for warrant exercise | ||
Equity based compensation | ||
Issuance of stock for services | ||
Net loss | (894,509) | (591,519) |
Balance March 31, 2022 | $ (53,059,284) | $ (51,491,148) |
Summary of Stock Options Activi
Summary of Stock Options Activity (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Equity [Abstract] | |
Number of Options, Outstanding, Beginning | shares | 625,016 |
Weighted average Exercise price per share, Outstanding, Beginning | $ / shares | $ 7.55 |
Remaining term in years, Outstanding, Beginning | 3 years 9 months 18 days |
Number of Options, Issued | shares | 25,385 |
Weighted average exercise price per share, Issued | $ / shares | $ 5.58 |
Number of Options, Cancelled/Expired | shares | (11,541) |
Weighted average Exercise price per share, Exercisable | $ / shares | $ 4.94 |
Number of Options, Outstanding, Ending | shares | 638,860 |
Weighted average Exercise price per share, Outstanding,ending balance | $ / shares | $ 7.52 |
Remaining term in years, Outstanding, ending | 3 years 6 months |
Number of Options, Exercisable | shares | 539,345 |
Weighted average Exercise price per share,Exercisable | $ / shares | $ 7.92 |
Remaining term in years, Exercisable | 3 years |
Summary of Fair Value of Option
Summary of Fair Value of Options Using Black-Sholes Option Pricing Model (Details) | 3 Months Ended |
Mar. 31, 2021$ / shares | |
Equity [Abstract] | |
Expected life (in years) | 5 years 6 months |
Volatility | 85.70% |
Risk Free interest rate. minimum | 1.50% |
Risk Free interest rate, maximum | 1.60% |
Expected dividends | |
Weighted average grant date fair value per share | $ 4.15 |
Summary of Restricted Stock Awa
Summary of Restricted Stock Award and Restricted Stock Unit Activity (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Equity [Abstract] | |
Number of shares, Unvested | shares | |
Weighted average grant date fair value, Unvested | $ / shares | |
Number of shares, Granted | shares | 40,554 |
Weighted average grant date fair value, Granted | $ / shares | $ 5.36 |
Number of shares, Unvested | shares | 40,554 |
Weighted average grant date fair value, Unvested | $ / shares | $ 5.36 |
Stockholders_ Equity (Details N
Stockholders’ Equity (Details Narrative) | 3 Months Ended |
Mar. 31, 2022USD ($)$ / sharesshares | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Warrants issued | shares | 96,664 |
Exercise price | $ / shares | $ 9.10 |
Issuance of warrants | $ 5,000 |
Unrecognized share-based compensation expense | $ 189,000 |
Unrecognized share-based compensation weighted average period | 2 years 2 months 12 days |
Restricted Stock [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Unrecognized share-based compensation expense | $ 202,000 |
Unrecognized share-based compensation weighted average period | 2 years 7 months 6 days |
Warrant one [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Warrants issued | shares | 986 |
Exercise price | $ / shares | $ 5.07 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Income Tax Disclosure [Abstract] | |
Estimated effective tax rate | $ 0 |