Barfresh Food (BRFH) 10-Q 27 Apr 23 2023 Q1 Quarterly report Financial data

Cover

Cover - shares	3 Months Ended
	Mar. 31, 2023	Apr. 21, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2023
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-41228
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		13,002,603
Entity Information, Former Legal or Registered Name	Not Applicable

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash	$ 1,566,000	$ 2,808,000
Restricted cash	211,000	211,000
Trade accounts receivable, net	571,000	126,000
Other receivables	11,000	101,000
Inventory, net	1,055,000	1,048,000
Prepaid expenses and other current assets	169,000	79,000
Total current assets	3,583,000	4,373,000
Property, plant and equipment, net of depreciation	297,000	389,000
Operating lease right-of-use assets, net		18,000
Intangible assets, net of amortization	291,000	306,000
Deposits	7,000	7,000
Total assets	4,178,000	5,093,000
Current liabilities:
Accounts payable	1,306,000	1,534,000
Disputed co-manufacturer accounts payable (Note 4)	499,000	499,000
Accrued expenses	255,000	286,000
Accrued payroll and employee related	273,000	233,000
Lease liability		20,000
Total current liabilities	2,333,000	2,572,000
Total liabilities	2,333,000	2,572,000
Commitments and contingencies (Note 4)
Stockholders’ equity:
Preferred stock, $0.000001 par value, 400,000 shares authorized, none issued or outstanding
Common stock, $0.000001 par value; 23,000,000 shares authorized; 13,002,603 and 12,934,741 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively
Additional paid in capital	61,139,000	60,905,000
Accumulated deficit	(59,294,000)	(58,384,000)
Total stockholders’ equity	1,845,000	2,521,000
Total liabilities and stockholders’ equity	$ 4,178,000	$ 5,093,000

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.000001	$ 0.000001
Preferred stock, shares authorized	400,000	400,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.000001	$ 0.000001
Common stock, shares authorized	23,000,000	23,000,000
Common stock, shares issued	13,002,603	12,934,741
Common stock, shares outstanding	13,002,603	12,934,741

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Revenue	$ 2,091,000	$ 2,526,000
Cost of revenue	1,236,000	1,762,000
Gross profit	855,000	764,000
Operating expenses:
Selling, marketing and distribution	667,000	675,000
General and administrative	994,000	823,000
Depreciation and amortization	104,000	161,000
Total operating expenses	1,765,000	1,659,000
Net loss	$ (910,000)	$ (895,000)
Per share information - basic and fully diluted:
Weighted average shares outstanding	12,977,000	12,909,000
Net loss per share	$ (0.07)	$ (0.07)

Condensed Consolidated Statem_2

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Statement of Cash Flows [Abstract]
Net loss	$ (910,000)	$ (895,000)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	107,000	161,000
Stock-based compensation	175,000	28,000
Stock and options issued for services	83,000	98,000
Changes in assets and liabilities
Accounts receivable	(445,000)	(497,000)
Other receivables	90,000	(232,000)
Inventories	(7,000)	(145,000)
Prepaid expenses and other assets	(92,000)	(39,000)
Accounts payable	(228,000)	404,000
Accrued expenses	(15,000)	(15,000)
Net cash used in operating activities	(1,242,000)	(1,132,000)
Investing activities
Purchase of property and equipment		(14,000)
Net cash used in investing activities		(14,000)
Financing activities
Proceeds from issuance of stock		5,000
Net cash provided by financing activities		5,000
Net decrease in cash and restricted cash	(1,242,000)	(1,141,000)
Cash and restricted cash, beginning of period	3,019,000	5,675,000
Cash and restricted cash, end of period	1,777,000	4,534,000
Cash paid during the year for:
Amounts included in the measurement of lease liabilities	20,000	20,000
Non-cash financing and investing activities:
Value of shares relinquished in modification of stock-based compensation awards (Note 5)	$ 24,000

Description of the Business, Ba

Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2023
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 manufacturing 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, 2022 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 2, 2023. 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. 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 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. Vendor Concentrations The Company is exposed to supply risk as a result of concentrations in its vendor base resulting from the use of a limited number of contract manufacturers. Purchases from the Company’s significant contract manufacturers as a percentage of all finished goods purchased were as follows: Schedule of Company’s Contract Manufacturers of Finished Goods For the three months ended March 31, 2023 2022 Manufacturer A 49 % 31 % Manufacturer B 46 % 0 % Manufacturer C 0 % 59 % 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, 2022, as filed with the SEC on March 2, 2023 that have had a material impact on our condensed consolidated financial statements and related notes. Fair Value Measurement and Financial Instruments Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value and unobservable (i.e., supported by little or no market activity). The Company’s financial instruments consist of cash, restricted cash, accounts receivable and accounts payable. The carrying value of the Company’s financial instruments approximates their fair value. Restricted Cash At each of March 31, 2023 and December 31, 2022, the Company had approximately $ 211,000 Accounts Receivable and Allowances Accounts receivable are recorded and carried at the original invoiced amount less allowances for credits and for any potential uncollectible amounts due to credit losses. We make estimates of the expected credit and collectability trends for the allowance for credit losses based on our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from our customers. Expected credit losses are recorded as general and administrative expenses on our condensed consolidated statements of operations. As of March 31, 2023 and December 31, 2022, there was no Other Receivables Other receivables consist of amounts due from vendors for materials acquired on their behalf for use in manufacturing the Company’s products, vendor rebates and freight claims. 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 rebates or discounts, are estimated utilizing the most likely amount method. 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. 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. The Company evaluated the requirement to disaggregate revenue and concluded that substantially all of its revenue comes from a single product, frozen beverages. Storage and Shipping Costs Storage and outbound freight costs are included in selling, marketing and distribution expense. For the three months ending March 31, 2023 and 2022, storage and outbound freight totaled approximately $ 311,000 386,000 Research and Development Expenditures for research activities relating to product development and improvement are charged to expense as incurred. The Company incurred approximately $ 21,000 31,000 Loss Per Share For the three months ended March 31, 2023 and 2022 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. Reclassifications Certain reclassifications have been made to the 2022 financial statements to conform to the 2023 presentation, namely the presentation of selling and marketing expense apart from general and administrative expense in the consolidated statement of operations, the reclassification of materials shipping to cost of revenue, and the presentation of the components of cash used in operations. 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, 2023
Inventory Disclosure [Abstract]
Inventory	Note 2. Inventory Inventory consists of the following: Schedule of Inventory March 31, December 31, 2023 2022 Raw materials $ 49,000 $ 65,000 Finished goods 1,006,000 983,000 Inventory, net $ 1,055,000 $ 1,048,000

Property Plant and Equipment

Property Plant and Equipment	3 Months Ended
	Mar. 31, 2023
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, Net March 31, December 31, 2023 2022 Manufacturing and customer equipment $ 3,637,000 $ 3,637,000 Other property 69,000 69,000 Property and equipment, gross 3,706,000 3,706,000 Less: accumulated depreciation (3,409,000 ) (3,317,000 ) Property and equipment, net of depreciation $ 297,000 $ 389,000 Depreciation expense related to these assets was approximately $ 92,000 145,000 4,000 no

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Note 4. Commitments and Contingencies Lease Commitments The Company leases office space under a non-cancellable operating lease which expired on March 31, 2023 extended through June 30, 2023 20,000 Legal Proceedings Schreiber Dispute The Company’s products are produced to its specifications through several contract manufacturers. One of the Company’s contract manufacturers (the “Manufacturer”) provided approximately 52 42 Over the course of 2022, the Company experienced numerous quality issues with the case packaging utilized by the Manufacturer. In addition, in July of 2022, the Company began receiving customer complaints about the texture of the Company’s smoothie products produced by the Manufacturer. In response, the Company withdrew product from the market and destroyed on-hand inventory, withholding $ 499,000 The Company attempted to resolve the issues based on the contractual procedures described in the Supply Agreement. However, on November 4, 2022, in response to a formal proposal of alternate resolutions, the Company received notification from the Manufacturer that it was denying any responsibility for the defective manufacture of the product. In response, on November 10, 2022, the Company filed a complaint in the United States District Court for the Central District of California, Western Division (the “Complaint”), claiming that the Manufacturer had not met its obligations under the Supply Agreement, and seeking economic damages. In response, the Manufacturer terminated the Supply Agreement. On January 20, 2023, the Company filed a voluntary dismissal of the Complaint which allows the parties to reach a potential resolution outside of the court system. However, if the parties are once again unable to come to an agreement, the Company has the right to refile the Complaint in California State Court. Due to the uncertainties surrounding the claim, the Company is not able to predict either the outcome or a range of reasonably possible recoveries that could result from its actions against the Manufacturer, and no gain contingencies have been recorded. The disruption in its supply resulting from the dispute has and will continue to adversely impact its results of operations and cash flow until a suitable resolution is reached or new sources of reliable supply at sufficient volume can be identified and developed, the timing of which is uncertain. Other legal matters 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. We are currently the defendant in one legal proceeding for an amount less than $ 100,000

Stockholders_ Equity

Stockholders’ Equity	3 Months Ended
	Mar. 31, 2023
Equity [Abstract]
Stockholders’ Equity	Note 5. Stockholders’ Equity The following are changes in stockholders’ equity for the three months ended March 31, 2022 and 2023: Schedule of Changes in Stockholders' Equity Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance December 31, 2021 12,905,112 $ - $ 60,341,000 $ (52,165,000 ) $ 8,176,000 Shares issued for warrant exercise 986 - 5,000 - 5,000 Equity-based compensation - - 28,000 - 28,000 Issuance of stock and options for services 13,801 - 98,000 - 98,000 Cash settlement of equity-based compensation Net loss - - - (895,000 ) (895,000 ) Balance March 31, 2022 12,919,899 $ - $ 60,472,000 $ (53,060,000 ) $ 7,412,000 Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance December 31, 2022 12,934,741 $ - $ 60,905,000 $ (58,384,000 ) $ 2,521,000 Beginning balance 12,934,741 $ - $ 60,905,000 $ (58,384,000 ) $ 2,521,000 Equity-based compensation 35,659 - 175,000 - 175,000 Cash settlement of equity-based compensation - - (24,000 ) - (24,000 ) Issuance of stock and options for services 32,203 - 83,000 - 83,000 Net loss - - - (910,000 ) $ (910,000 ) Balance March 31, 2023 13,002,603 $ - $ 61,139,000 $ (59,294,000 ) 1,845,000 Ending balance 13,002,603 $ - $ 61,139,000 $ (59,294,000 ) 1,845,000 Warrants During the three months ended March 31, 2023, 684,639 5.85 Equity Incentive Plan Through 2022, the Company issued equity awards under the 2015 Equity Incentive Plan (the “2015 Plan”) and outside the Plan. In March 2023, the Board of Directors adopted the 2023 Equity Incentive Plan (the “2023 Plan”), reserving 650,000 As of March 31, 2023, the Company has $ 227,000 1.8 Stock Options The following is a summary of stock option activity for the three months ended March 31, 2023: Summary of Stock Options Activity Number of Options Weighted average exercise price per share Remaining term in years Outstanding on December 31, 2022 682,939 $ 7.30 3.2 Issued 20,891 $ 1.62 8.0 Cancelled/expired (4,000 ) $ 5.65 Outstanding on March 31, 2023 699,830 $ 7.14 3.1 Exercisable, March 31, 2023 638,110 $ 7.26 2.8 The fair value of the options issued was calculated using the Black-Scholes option pricing model, based on the following: Summary of Fair Value of Options Using Black-Sholes Option Pricing Model 2023 Expected term (in years) 8.0 Expected volatility 84.4 % Risk-free interest rate 3.5 % Expected dividends $ - Weighted average grant date fair value per share $ 1.31 Restricted Stock The following is a summary of restricted stock award and restricted stock unit activity for the three months ended March 31, 2023: Summary of Restricted Stock Award and Restricted Stock Unit Activity Number of shares Weighted average grant date fair value Unvested at January 1, 2023 41,923 $ 4.92 Granted 5,000 $ 1.25 Vested (4,386 ) $ 5.06 Forfeited (4,054 ) $ 5.39 Unvested at March 31, 2023 38,483 $ 4.37 Performance Stock Units During 2022, the Company issued performance share units (“PSUs”) that represented shares potentially issuable based upon Company and individual performance in 2022. The following table summarizes the activity for the Company’s unvested PSUs for the three months ended March 31, 2023: Summary of Performance Stock Unit Activity Number of shares Weighted average grant date fair value Unvested at January 1, 2023 17,678 $ 4.50 Cash settled (17,678 ) $ 4.50 Granted 71,265 $ 1.36 Vested (45,251 ) $ 1.36 Unvested at March 31, 2023 26,014 $ 1.36 In February 2023, the unvested awards issued for individual performance and outstanding at January 1, 2023 were modified to cash-settle the original grant-date fair value of approximately $ 80,000 56,000 24,000 71,000 26,000 64,000 The Company adopted a 2023 PSU program in April 2023, granting approximately 172,000 67,000

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Note 6. 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, 2023, the estimated effective tax rate for the 2023 was zero There are open statutes of limitations for taxing authorities in federal and state jurisdictions to audit our tax returns from 2018 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, 2023 and 2022, the Company did not incur any interest and penalties associated with tax positions. As of March 31, 2023, the Company did not have any significant unrecognized uncertain tax positions.

Liquidity

Liquidity	3 Months Ended
	Mar. 31, 2023
Liquidity
Liquidity	Note 7. Liquidity During the three months ended March 31, 2023, the Company used cash for operations of $ 1,242,000 However, as of March 31, 2023, the Company has $ 1,777,000

Description of the Business, _2

Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2023
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, 2022 included in the Company’s Annual Report on Form 10-K, as filed with the SEC on March 2, 2023. 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.
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 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.
Vendor Concentrations	Vendor Concentrations The Company is exposed to supply risk as a result of concentrations in its vendor base resulting from the use of a limited number of contract manufacturers. Purchases from the Company’s significant contract manufacturers as a percentage of all finished goods purchased were as follows: Schedule of Company’s Contract Manufacturers of Finished Goods For the three months ended March 31, 2023 2022 Manufacturer A 49 % 31 % Manufacturer B 46 % 0 % Manufacturer C 0 % 59 %
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, 2022, as filed with the SEC on March 2, 2023 that have had a material impact on our condensed consolidated financial statements and related notes.
Fair Value Measurement and Financial Instruments	Fair Value Measurement and Financial Instruments Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical assets and liabilities in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3 – Prices or valuation techniques that require inputs that are both significant to the fair value and unobservable (i.e., supported by little or no market activity). The Company’s financial instruments consist of cash, restricted cash, accounts receivable and accounts payable. The carrying value of the Company’s financial instruments approximates their fair value.
Restricted Cash	Restricted Cash At each of March 31, 2023 and December 31, 2022, the Company had approximately $ 211,000
Accounts Receivable and Allowances	Accounts Receivable and Allowances Accounts receivable are recorded and carried at the original invoiced amount less allowances for credits and for any potential uncollectible amounts due to credit losses. We make estimates of the expected credit and collectability trends for the allowance for credit losses based on our assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect our ability to collect from our customers. Expected credit losses are recorded as general and administrative expenses on our condensed consolidated statements of operations. As of March 31, 2023 and December 31, 2022, there was no
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, vendor rebates and freight claims.
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 rebates or discounts, are estimated utilizing the most likely amount method. 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. 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. The Company evaluated the requirement to disaggregate revenue and concluded that substantially all of its revenue comes from a single product, frozen beverages.
Storage and Shipping Costs	Storage and Shipping Costs Storage and outbound freight costs are included in selling, marketing and distribution expense. For the three months ending March 31, 2023 and 2022, storage and outbound freight totaled approximately $ 311,000 386,000
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 $ 21,000 31,000
Loss Per Share	Loss Per Share For the three months ended March 31, 2023 and 2022 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.
Reclassifications	Reclassifications Certain reclassifications have been made to the 2022 financial statements to conform to the 2023 presentation, namely the presentation of selling and marketing expense apart from general and administrative expense in the consolidated statement of operations, the reclassification of materials shipping to cost of revenue, and the presentation of the components of cash used in operations.
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.

Description of the Business, _3

Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2023
Accounting Policies [Abstract]
Schedule of Company’s Contract Manufacturers of Finished Goods	Schedule of Company’s Contract Manufacturers of Finished Goods For the three months ended March 31, 2023 2022 Manufacturer A 49 % 31 % Manufacturer B 46 % 0 % Manufacturer C 0 % 59 %

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2023
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventory consists of the following: Schedule of Inventory March 31, December 31, 2023 2022 Raw materials $ 49,000 $ 65,000 Finished goods 1,006,000 983,000 Inventory, net $ 1,055,000 $ 1,048,000

Property Plant and Equipment (T

Property Plant and Equipment (Tables)	3 Months Ended
	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment, Net	Property and equipment, net consist of the following: Schedule of Property and Equipment, Net March 31, December 31, 2023 2022 Manufacturing and customer equipment $ 3,637,000 $ 3,637,000 Other property 69,000 69,000 Property and equipment, gross 3,706,000 3,706,000 Less: accumulated depreciation (3,409,000 ) (3,317,000 ) Property and equipment, net of depreciation $ 297,000 $ 389,000

Stockholders_ Equity (Tables)

Stockholders’ Equity (Tables)	3 Months Ended
	Mar. 31, 2023
Equity [Abstract]
Schedule of Changes in Stockholders' Equity	The following are changes in stockholders’ equity for the three months ended March 31, 2022 and 2023: Schedule of Changes in Stockholders' Equity Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance December 31, 2021 12,905,112 $ - $ 60,341,000 $ (52,165,000 ) $ 8,176,000 Shares issued for warrant exercise 986 - 5,000 - 5,000 Equity-based compensation - - 28,000 - 28,000 Issuance of stock and options for services 13,801 - 98,000 - 98,000 Cash settlement of equity-based compensation Net loss - - - (895,000 ) (895,000 ) Balance March 31, 2022 12,919,899 $ - $ 60,472,000 $ (53,060,000 ) $ 7,412,000 Additional Common Stock paid in Accumulated Shares Amount Capital (Deficit) Total Balance December 31, 2022 12,934,741 $ - $ 60,905,000 $ (58,384,000 ) $ 2,521,000 Beginning balance 12,934,741 $ - $ 60,905,000 $ (58,384,000 ) $ 2,521,000 Equity-based compensation 35,659 - 175,000 - 175,000 Cash settlement of equity-based compensation - - (24,000 ) - (24,000 ) Issuance of stock and options for services 32,203 - 83,000 - 83,000 Net loss - - - (910,000 ) $ (910,000 ) Balance March 31, 2023 13,002,603 $ - $ 61,139,000 $ (59,294,000 ) 1,845,000 Ending balance 13,002,603 $ - $ 61,139,000 $ (59,294,000 ) 1,845,000
Summary of Stock Options Activity	The following is a summary of stock option activity for the three months ended March 31, 2023: Summary of Stock Options Activity Number of Options Weighted average exercise price per share Remaining term in years Outstanding on December 31, 2022 682,939 $ 7.30 3.2 Issued 20,891 $ 1.62 8.0 Cancelled/expired (4,000 ) $ 5.65 Outstanding on March 31, 2023 699,830 $ 7.14 3.1 Exercisable, March 31, 2023 638,110 $ 7.26 2.8
Summary of Fair Value of Options Using Black-Sholes Option Pricing Model	The fair value of the options issued was calculated using the Black-Scholes option pricing model, based on the following: Summary of Fair Value of Options Using Black-Sholes Option Pricing Model 2023 Expected term (in years) 8.0 Expected volatility 84.4 % Risk-free interest rate 3.5 % Expected dividends $ - Weighted average grant date fair value per share $ 1.31
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, 2023: Summary of Restricted Stock Award and Restricted Stock Unit Activity Number of shares Weighted average grant date fair value Unvested at January 1, 2023 41,923 $ 4.92 Granted 5,000 $ 1.25 Vested (4,386 ) $ 5.06 Forfeited (4,054 ) $ 5.39 Unvested at March 31, 2023 38,483 $ 4.37
Summary of Performance Stock Unit Activity	The following table summarizes the activity for the Company’s unvested PSUs for the three months ended March 31, 2023: Summary of Performance Stock Unit Activity Number of shares Weighted average grant date fair value Unvested at January 1, 2023 17,678 $ 4.50 Cash settled (17,678 ) $ 4.50 Granted 71,265 $ 1.36 Vested (45,251 ) $ 1.36 Unvested at March 31, 2023 26,014 $ 1.36

Schedule of Company_s Contract

Schedule of Company’s Contract Manufacturers of Finished Goods (Details) - Customer Concentration Risk [Member] - Vendor [Member]	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Manufacturer A [Member]
Product Information [Line Items]
Manufacturer percentage	49%	31%
Manufacturer B [Member]
Product Information [Line Items]
Manufacturer percentage	46%	0%
Manufacturer C [Member]
Product Information [Line Items]
Manufacturer percentage	0%	59%

Description of the Business, _4

Description of the Business, Basis of Presentation, and Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Accounting Policies [Abstract]
Restricted cash	$ 211,000		$ 211,000
Allowance for doubtful accounts	0		$ 0
Shipping and handling costs	311,000	$ 386,000
Research and development expenses	$ 21,000	$ 31,000

Schedule of Inventory (Details)

Schedule of Inventory (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 49,000	$ 65,000
Finished goods	1,006,000	983,000
Inventory, net	$ 1,055,000	$ 1,048,000

Schedule of Property and Equipm

Schedule of Property and Equipment, Net (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,706,000	$ 3,706,000
Less: accumulated depreciation	(3,409,000)	(3,317,000)
Property and equipment, net of depreciation	297,000	389,000
Manufacturing and Customer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	3,637,000	3,637,000
Other Property [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 69,000	$ 69,000

Property Plant and Equipment (D

Property Plant and Equipment (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 92,000	$ 145,000
Depreciation expense in cost of revenue	$ 4,000	$ 0

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022	Dec. 31, 2021	Jul. 31, 2022
Related Party Transaction [Line Items]
Lease expiration date	Mar. 31, 2023
Operating lease extension description	extended through June 30, 2023
Operating lease expense	$ 20,000	$ 20,000
Companies product holdings			52%	42%
Payment due	1,306,000		$ 1,534,000
Legal proceeding amount	$ 100,000
Related Party [Member]
Related Party Transaction [Line Items]
Payment due					$ 499,000

Schedule of Changes in Stockhol

Schedule of Changes in Stockholders' Equity (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 2,521,000	$ 8,176,000
Shares issued for warrant exercise		5,000
Equity-based compensation	175,000	28,000
Issuance of stock and options for services	83,000	98,000
Cash settlement of equity-based compensation	(24,000)
Net loss	(910,000)	(895,000)
Ending balance	1,845,000	7,412,000
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance
Beginning balance, shares	12,934,741	12,905,112
Shares issued for warrant exercise
Shares issued for warrant exercise, shares		986
Equity-based compensation
Equity-based compensation, shares	35,659
Issuance of stock and options for services
Issuance of stock and options for services, shares	32,203	13,801
Cash settlement of equity-based compensation
Net loss
Ending balance
Ending balance, shares	13,002,603	12,919,899
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ 60,905,000	$ 60,341,000
Shares issued for warrant exercise		5,000
Equity-based compensation	175,000	28,000
Issuance of stock and options for services	83,000	98,000
Cash settlement of equity-based compensation	(24,000)
Net loss
Ending balance	61,139,000	60,472,000
Retained Earnings [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(58,384,000)	(52,165,000)
Shares issued for warrant exercise
Equity-based compensation
Issuance of stock and options for services
Cash settlement of equity-based compensation
Net loss	(910,000)	(895,000)
Ending balance	$ (59,294,000)	$ (53,060,000)

Summary of Stock Options Activi

Summary of Stock Options Activity (Details) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Equity [Abstract]
Number of Options, Outstanding, Beginning	682,939
Weighted average exercise price per share, Outstanding, Beginning	$ 7.30
Remaining term in years, Outstanding	3 years 1 month 6 days	3 years 2 months 12 days
Number of Options, Issued	20,891
Weighted average exercise price per share, Issued	$ 1.62
Remaining term in years, Issued	8 years
Number of Options, Cancelled/Expired	(4,000)
Weighted average exercise price per share, Cancelled/Expired	$ 5.65
Number of Options, Outstanding, Ending	699,830	682,939
Weighted average exercise price per share, Outstanding, ending balance	$ 7.14	$ 7.30
Number of Options, Exercisable	638,110
Weighted average exercise price per share, Exercisable	$ 7.26
Remaining term in years, Exercisable	2 years 9 months 18 days

Summary of Fair Value of Option

Summary of Fair Value of Options Using Black-Sholes Option Pricing Model (Details)	3 Months Ended
	Mar. 31, 2023 $ / shares
Equity [Abstract]
Expected life (in years)	8 years
Expected volatility	84.40%
Risk-free interest rate	3.50%
Expected dividends
Weighted average grant date fair value per share	$ 1.31

Summary of Restricted Stock Awa

Summary of Restricted Stock Award and Restricted Stock Unit Activity (Details)	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Equity [Abstract]
Number of shares, Unvested | shares	41,923
Weighted average grant date fair value, Unvested | $ / shares	$ 4.92
Number of shares, Granted | shares	5,000
Weighted average grant date fair value, Granted | $ / shares	$ 1.25
Number of shares, Vested | shares	(4,386)
Weighted average grant date fair value, Vested | $ / shares	$ 5.06
Number of shares, Forfeited | shares	(4,054)
Weighted average grant date fair value, Forfeited | $ / shares	$ 5.39
Number of shares, Unvested | shares	38,483
Weighted average grant date fair value, Unvested | $ / shares	$ 4.37

Summary of Performance Stock Un

Summary of Performance Stock Unit Activity (Details)	3 Months Ended
	Mar. 31, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares, Unvested | shares	41,923
Weighted average grant date fair value, Unvested | $ / shares	$ 4.92
Number of shares, Granted | shares	5,000
Weighted average grant date fair value, Granted | $ / shares	$ 1.25
Number of shares, Vested | shares	(4,386)
Weighted average grant date fair value, Vested | $ / shares	$ 5.06
Number of shares, Unvested | shares	38,483
Weighted average grant date fair value, Unvested | $ / shares	$ 4.37
Performance Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of shares, Unvested | shares	17,678
Weighted average grant date fair value, Unvested | $ / shares	$ 4.50
Number of shares, Cash settled | shares	(17,678)
Weighted average grant date fair value, Cash Settled | $ / shares	$ 4.50
Number of shares, Granted | shares	71,265
Weighted average grant date fair value, Granted | $ / shares	$ 1.36
Number of shares, Vested | shares	(45,251)
Weighted average grant date fair value, Vested | $ / shares	$ 1.36
Number of shares, Unvested | shares	26,014
Weighted average grant date fair value, Unvested | $ / shares	$ 1.36

Stockholders_ Equity (Details N

Stockholders’ Equity (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended
	Apr. 30, 2023	Feb. 28, 2023	Mar. 31, 2023	Mar. 31, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Warrants issued			684,639
Exercise price			$ 5.85
Unrecognized stock based compensation			$ 227,000
Unrecognized share-based compensation weighted average period			1 year 9 months 18 days
Grant date fair value		$ 24,000
Stock-based compensation			$ 175,000	$ 28,000
Shares granted			5,000
Performance Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Grant date fair value		80,000
Incremental compensation		$ 56,000
Modified to vest			71,000
Stock-based compensation			$ 64,000
Shares granted			71,265
Stock-based compensation			$ 67,000
Performance Shares [Member] | Time-Based Vesting [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Modified to vest			26,000
2023 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Reserve shares for future issuance			650,000
2023 Plan [Member] | Performance Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares granted	172,000

Income Taxes (Details Narrative

Income Taxes (Details Narrative)	3 Months Ended
	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Estimated effective tax rate	0%

Liquidity (Details Narrative)

Liquidity (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Liquidity
Cash for operations	$ 1,242,000	$ 1,132,000
Cash and restricted cash	$ 1,777,000