BARFRESH FOOD GROUP INC. 8-K

What Happened

• Barfresh Food Group Inc. (BRFH) announced subscriptions, beginning March 5, 2026, for unsecured senior convertible promissory notes totaling $7,278,000. The Notes have a 24‑month term and carry a 10% per annum interest rate for the first 12 months (the “Minimum Interest”). The Notes are mandatorily convertible into common shares if the stock trades at $4.35 (150% of the $2.90 conversion price) for 20 of 30 consecutive trading days; holders also have up to 10 optional conversion opportunities at a $2.90 conversion price. Purchasers received warrants equal to 100% of their investment (4‑year term) with a $3.20 exercise price. Barfresh posted an updated investor presentation used in the placement at barfresh.com/investors.

Key Details

• Total raised via Notes: $7,278,000; term: 24 months; Minimum Interest: 10% p.a. for first 12 months.
• Conversion price: $2.90/share; mandatory conversion trigger: $4.35/share for 20 of 30 trading days; holders have up to 10 conversion elections.
• Warrants: amount equal to 100% of investment, $3.20 exercise price, 4‑year term; company can call warrants if stock trades at $4.80 for 20 of 30 days.
• Interest paid quarterly starting April 1, 2026, payable in cash or shares (if paid in stock, shares must be registered and valued at a 10% discount to 10‑day VWAP). Company must file a registration statement for underlying shares and warrants within 60 days or incur a 1% per month penalty.

Why It Matters

• This is a material financing: it brings immediate capital but creates potential dilution through conversion and warrant exercises if the stock rises or if the company chooses to pay interest in shares.
• Conversion and anti-dilution provisions mean the conversion price could be adjusted downward if Barfresh sells securities at a lower price in future financings, and the warrant exercise price ties to those adjustments, affecting shareholder value.
• The registration filing requirement is important for liquidity of the new shares; failure to timely file carries a monetary penalty. Retail investors should note the added share overhang from both convertible notes and large warrant issuances when assessing future share supply and potential dilution.