Barfresh Food Group Inc (OTCMKTS:BRFH) Goes Wobbly
There’s no getting away from the fact that people seem to like Barfresh Food Group Inc (OTCMKTS:BRFH)’s ready-to-blend frozen smoothies, frappes, and shakes. That’s clearly visible in the financial reports which show that despite the seasonal character of BRFH‘s products, the revenues are growing leaps and bounds. During the second calendar quarter, for example, the company logged about $168 thousand in sales which is an increase of 211% on a quarter-over-quarter and 173% on a year-over-year basis.
Consumers aren’t the only ones interested in the frozen smoothies. None other than PepsiCo, Inc. (NYSE:PEP) contacted BRFH through one of their divisions a few weeks ago and as a result, an agreement was drawn up which made the beverage giant an exclusive sales representative for the BarFresh line of products in the US and Canada. The press release hinted at a potential international expansion in the near future as well.
Needless to say, investors were quite excited about the new deal with Pepsi. The volumes picked up immediately after the press release and in a matter of a couple of weeks of heavy trading, the ticker managed to run from just under $0.60 all the way to $0.90.
Sadly, the enthusiasm seems to have withered away a bit over the last few days. A 3% slip on Monday was followed by a pretty uneventful session on Tuesday. Yesterday, however, BRFH dropped another 5% to a close of less than $0.83 per share. Sure, the fall isn’t exactly vertical, but it does pose the question: “Is this just a consolidation, or is it a sign of something worse coming BRFH‘s way?”.
We’ve already discussed the company’s Q2 report and we’ve mentioned the fact that the balance sheet isn’t too horrific. We’ve also noted the seven-figure net loss, however, and we’ve said that the company’s future depends on its elimination.
As for the stock, its current fluctuations could become more severe if a large number of discounted shares flood the open market. Up until the end of August, BRFH was relatively successful at keeping the dilution at bay. We know that because of the latest 10-Q.
What we don’t know, however, is whether this is still the case. Yesterday, the company announced that it will be late with the report for the third calendar quarter of the year, and we, for one, are a bit disappointed about the delay, because we’re quite eager to get our hands on some important information that should be contained in the filing.
At the end of Q2, there was $420 thousand worth of notes convertible at a fixed rate of $0.25 per share and the maturity date was September 6, 2015. The upcoming report should tell us whether the notes have been converted.
