It is a small Krabby Patty with a face that has pickles for eyes, ketchup for pupils, a ketchup smile, and little antennas on it, to make it look babyish and like a cute bug. It comes in the Krusty Kids Meal (and possibly the Kiddie Meal.)
It is given to Barnacle Boy by Squidward as if he were a little child. Everyone in the restaurant surrounding him and starts to laugh at him, and Barnacle Boy refuses to eat it because he thinks he is too old to be eating such an immature food, which is really meant for children.
It also comes with a bib and high chair.
This is also one of the reasons why Barnacle Boy becomes evil in Mermaid Man and Barnacle Boy V. The patty costs more even though it's smaller than a regular Krabby Patty.