Good afternoon everyone and thank you for participating on today's Fourth Quarter and Full Year 2024 Corporate Update Call for Barfresh Food Group. Joining us today is Barfresh Food Group's Founder and CEO, Riccardo Delle Coste; and Barfresh Food Group's CFO, Lisa Roger. Following prepared remarks, we will open the call for your questions. The discussion today will include forward-looking statements. Except for historical information herein, matters set forth on this call are forward-looking within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about the company's commercial progress, success of its strategic relationships, and the projections of future financial performance. These forward-looking statements are identified by the use of the words such as grow, expand, anticipate, intend, estimate, believe, expect, plan, should, hypothetical, potential forecast and project, continue, could, may, predict, and will, and variations of such words and similar expressions are intended to identify such forward-looking statements. All statements other than the statements of historical fact that address activities, events, or developments that the company believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made based on experience, expected future developments, and other factors that the company believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks, and uncertainties, many of which are beyond the control of the company. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The contents of this call should be considered in conjunction…

Good afternoon, everyone, and thank you for joining us for our fourth quarter and full year 2024 earnings call. 2024 was a transformative year for our company, one where we made significant strategic investments and operational enhancements that have positioned us for sustained growth. I'm pleased to report that these efforts delivered record full year revenue, and we expect this momentum to continue with another year of record revenue expected in 2025, and with growth guidance between 35% and 55%. Our revenue guidance accounts for continuing orders from existing customers and confirmed bids, while also considering estimate revenue from end-user opportunities at later stages in our sales pipeline, including two of the top 10 largest school districts in the United States. Let me highlight our key accomplishments. First, we successfully addressed our manufacturing capabilities, after losing our largest co-manufacturing in 2022 and we secured and began onboarding two new strategic partners. While this transition created some near-term cost pressures in Q4, we expect the onboarding to be complete by the end of Q2 2025 and bringing us to full manufacturing capacity in time for our high season selling in the education channel, which picks up with back-to-school demand in Q3. Second, we expanded our product portfolio with the significant launch of Pop & Go, 100% Juice Freeze Pops in our education channel during Q4. While this new product contributed modest revenue in its first quarter, we're excited about its potential. Unlike our breakfast focus offerings, this product targets the lunch daypart our market opportunity significantly larger than breakfast. With manufacturing ramping to full capacity by the end of Q2, we expect material revenue contribution from this product in 2025. Third, we secured our financial foundation through non-dilutive financing, including non-recourse litigation financing and a $1.5 million line of credit. Additionally,…

Thank you, Riccardo. Revenue for the fourth quarter of 2024 was $2.8 million compared to $1.9 million for the fourth quarter of 2023. Revenue for the full year of 2024 was a record $10.7 million compared to $8.1 million in the same period of 2023. The increase in quarterly and full year revenue is primarily due to expanded bottle production capacity year-over-year, enabling higher sales volumes, complemented by improvements in smoothie carton and bulk sales. Gross margin for the fourth quarter of 2024 was 26% compared to 33% for the fourth quarter of 2023. Adjusted gross margin for the fourth quarter of 2024 was 30% and compared to 33% in the prior year period. Gross margin for the full year of 2024 was 34% compared to 35% for the same period of 2023. Adjusted gross margin for the full year of 2024 was 37% compared to 35% for the full year of 2023. The year-over-year improvement in full year adjusted gross margin is a result of favorable product mix, pricing actions, and a slight improvement in the cost of supply chain components, partially offset by the temporary production inefficiencies and increased logistic costs experienced in the fourth quarter of 2024. Selling, marketing and distribution expense for the fourth quarter of 2024 increased to $872,000 or 31% of revenue compared to $624,000 or 32% of revenue in the fourth quarter of 2023. Selling, marketing and distribution expense for the full year of 2024 increased to $3.1 million or 29% of revenue compared to $2.6 million or 32% of revenue in the same period of 2023. The year-over-year dollar increase in quarterly and full year is a result of increased sales and marketing personnel costs, broker commissions and outbound freight as a result of increased shipments. G&A expenses for the fourth quarter…

Thank you, Lisa. Before we open up the lines for questions, let me emphasize that while 2024 was a year of strategic investment and transformation, we enter 2025 with expanded product portfolio, robust sales coverage and operational improvements underway. As we continue our co-manufacturer ramp through Q2, we expect revenues and margins for Q1 to be consistent with Q4 levels. And for the full year of 2025, we expect significant revenue growth of between 35% and 55%, with margin expansion beginning in the second half as our manufacturing capabilities come online. The temporary costs we absorbed in Q4 were necessary investments to build a stronger foundation. We've been waiting for some time for additional bottle capacity to come online, and it's finally started. And it will be here in a meaningful way very shortly. We have a great pipeline of business, we're confident these actions will drive both top line growth and margin expansion, as we've outlined, making 2025 another record year. We look forward to updating you on our progress in the quarters ahead. And with that, I would like to open up the line for questions. Operator?

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Nicholas Sherwood with Maxim Group. Please proceed.

Hi, good evening. My first question is related to the new Pop & Go, Freeze Pops. You talked about how you expect them to contribute meaningfully in the second half of the year. Can you give us your expectations on how that specific product line is going to help you achieve the revenue guidance you gave for 2025?

Yeah. So it's still pretty early days. We launched the product late in Q4, we launched it in Q4. So we've started to get it out to customers and trials and testing. So we've had very good feedback in terms of acceptability for the product. We do have bids that are in process now. So we're right in the middle of bid season. So we do have some customers that have already started to add it on the bids. So we are waiting to see the total effect of all the testing that we've done, and that's really part of the range and potential further upside depending on how well the Pops get into the market in this bid cycle.

Understood. And then can you just talk about just how you're working with -- or how is your relationships with your customers been during this -- during some of these production issues that you've had in the fourth quarter?

Yeah. So that's a good question. It's definitely tested some relationships in the sense of having availability of products for some of those customers, because we were tested with supply, and that was a challenge still because even though we turned on some of the bottles that still outstrip the capacity that we had at the time. Even though we've incrementally added bottle supply, we just haven't had enough because we've been waiting for additional upgrades and change parts to arrive for equipment. Like we discussed on the call, those change parts expected to be here and installed and commissioned before the end of Q2, paving the way for a very, very solid back half of the year with additional supply more than what we need to do our plans. So whilst relationships has been an uncomfortable discussion for some customers in terms of supply. They really stand there waiting for the product, and they love the product so much. So hopefully, once we've got everything back on track, it will be back in the kids' hands in those schools.

Understood. And my final question is, have you heard anything from your customers sort of related to funding the Department of Education as kind of being whipped up for cuts? Are there any -- have you heard anything from them about any worries for budgetary constraints related to your product?

Yes. We haven't really got any direct negative feedback. Obviously, we see what's in the press, and we see some of the programs that are being cut. Some of those programs that are being cut may actually help us in the long run because they're actually subsidizing other programs that could be offering substitute products than our products that maybe the kids don't like as much, but they have more of a financial incentive to offer them. So there could be out of all the changes so far today, a net positive effect on our products in schools. But again, there's a lot of moving pieces that are going on. Nothing negative.

Understood. Well, yes, thank you for taking the time to answer my questions, and I'll return to the queue.

Thank you.

Thank you. [Operator Instructions] There are no further questions. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.