Investors Rush To Barfresh Food Group Inc (OTCMKTS:BRFH) Thanks To New PR
Before the start of yesterday’s session Barfresh Food Group Inc (OTCMKTS:BRFH) published a new PR and the news they announced caught the attention of the market immediately. The company has signed an agreement with PepsiCo North America Beverages, a division of PepsiCo, Inc. (NYSE:PEP). PepsiCo North America Beverages will be the exclusive sales representative for BRFH‘s line of smoothies and frozen beverages throughout the U.S. and Canada.
For a pennystock such a deal is massive and as we said investors flocked towards the company – yesterday’s daily volume of 860 thousand shares is the biggest registered by BRFH for the past three years. The intense buying caused the stock to add nearly 20% to its value for a close at exactly 70 cents per share. The chart performance did show some weaknesses though. Despite the impressive gain BRFH finished the session below their opening price of $0.727.
Well, signing a deal with a division of Pepsi may be a boost for BRFH but there still are a couple of red flags that must be taken into account. For the quarter ended June 30 they reported the following results:
• $3.5 million cash
• $3.9 million total current assets
• $1.43 million total current liabilities
• $169 thousand revenues
• $1.7 million net loss
Thanks to a $5.27 million private placement from March when Barfresh sold 10,550,000 shares at $0.50 and warrants to purchase up to 5,275,000 shares with a per share exercise price of $0.60 the company still has more than sufficient cash reserves. Year-over-year the generated revenues have seen a drastic increase of 173% but they still remain rather underwhelming. Especially when compared to the massive net loss that has grown at a comparable to the revenues rate – from $796 thousand for the same period the previous year to $1.7 million.
Yesterday’s announcement could keep investors excited for now and BRFH could continue to be intensely traded. Establishing a position without doing your own due diligence may not be wise though. The company is still facing some serious troubles as it needs to expand its sales while keeping the expenses in check. If BRFH‘s cash burn remains the same they could soon find themselves forced to once more look for external sources of capital.
