PART I [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited financial statements, management's discussion and analysis, and disclosures on market risk and controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for the period ended June 30, 2025, show significant revenue growth alongside widening net losses, driven by the scaling of new manufacturing operations, with the notes highlighting high customer concentration, related-party debt, and going concern doubts [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$13.15 million** from **$12.86 million** at year-end 2024, primarily due to a significant rise in accounts receivable, while total liabilities decreased from **$10.51 million** to **$9.61 million**, largely because convertible notes were reclassified from current to long-term, consequently improving stockholders' equity to **$3.54 million** from **$2.34 million** and turning working capital positive Condensed Consolidated Balance Sheet Highlights (in USD) | Balance Sheet Item | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $5,201,109 | $4,916,614 | | **Total Assets** | **$13,151,387** | **$12,855,875** | | **Total Current Liabilities** | $4,538,892 | $8,813,996 | | **Total Liabilities** | **$9,608,777** | **$10,514,292** | | **Total Stockholders' Equity** | **$3,542,610** | **$2,341,583** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three and six months ended June 30, 2025, net revenue more than doubled year-over-year, reaching **$3.3 million** and **$6.5 million**, respectively, but despite improved gross profit, the net loss widened for both periods due to a sharp increase in operating expenses, particularly general and administrative costs associated with scaling production Statement of Operations Summary (in USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenue** | $3,299,738 | $1,362,986 | $6,493,260 | $2,830,002 | | **Gross Profit** | $606,459 | $148,759 | $1,158,974 | $432,347 | | **Operating Loss** | $(1,346,021) | $(826,415) | $(2,028,561) | $(1,851,515) | | **Net Loss** | $(1,603,156) | $(942,554) | $(2,521,538) | $(1,993,521) | | **Net Loss Per Share** | $(0.17) | $(0.22) | $(0.27) | $(0.48) | [Condensed Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity increased from **$2.34 million** at December 31, 2024, to **$3.54 million** at June 30, 2025, primarily driven by capital raising activities, including **$2.4 million** from the At-The-Market (ATM) program and **$1.17 million** from the exercise of warrants, which more than offset the **$2.52 million** net loss incurred during the period - Key drivers for the increase in stockholders' equity during the first six months of 2025 were: - **Common stock issued via ATM program:** +**$2,407,448**[17](index=17&type=chunk) - **Exercise of warrants:** +**$1,173,158**[17](index=17&type=chunk) - **Net loss:** -**$2,521,538**[17](index=17&type=chunk) [Condensed Statements of Cash Flows](index=11&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company's cash position decreased by **$1.69 million**, with net cash used in operating activities significantly increasing to **$3.94 million** from **$1.36 million** in the prior year, driven by higher net loss and investments in working capital, partially offset by **$2.72 million** in net cash provided by financing activities, mainly from stock sales and warrant exercises Cash Flow Summary (in USD) | Cash Flow Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(3,942,856) | $(1,357,463) | | **Net cash used in investing activities** | $(491,332) | $(566,431) | | **Net cash provided by financing activities** | $2,717,102 | $2,202,108 | | **Net (decrease) increase in cash** | **$(1,688,323)** | **$278,272** | | **Cash - ending of period** | $641,129 | $936,061 | [Notes to Financial Statements](index=13&type=section&id=Condensed%20Consolidated%20Notes%20to%20Financial%20Statements%20(Unaudited)) The notes provide critical context to the financial statements, detailing the company's business, accounting policies, and significant transactions, including a going concern warning due to recurring losses and an accumulated deficit of over **$20 million**, significant reliance on related-party financing, extremely high customer concentration, and commitments related to the new Peru facility lease, technology licensing, and a pending lawsuit - The company is engaged in developing, marketing, and distributing plant-based, dehydrated fruit and vegetable snacks and powders from its production facility in Pisco, Peru, using proprietary GentleDry™ Technology[23](index=23&type=chunk)[24](index=24&type=chunk) - The financial statements were prepared under the assumption of a going concern, but recurring losses, an accumulated deficit of **$20,083,595**, and limited working capital raise substantial doubt about the company's ability to continue operations without additional funding[28](index=28&type=chunk) - The company has a very high customer concentration, with three customers accounting for **97.1%** of net revenue and **97.6%** of accounts receivable for the six months ended June 30, 2025, compared to one customer accounting for **99%** of net revenue in the same period of 2024[81](index=81&type=chunk) - The company initiated an organizational realignment to open its Peru factory, incurring total costs of approximately **$5.5 million**, with realignment costs for the six months ended June 30, 2025, being approximately **$1.07 million**, including capitalized equipment and factory idle capacity expenses[157](index=157&type=chunk)[158](index=158&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant revenue growth of **142%** in Q2 and **129%** in H1 2025, driven by increased sales to major customers, with the transition to in-house manufacturing at the new Peru facility improving gross margins to **18.4%** in Q2, though this transition also led to higher operating expenses, including **$480,320** in idle capacity costs, which widened the net loss, and liquidity remains a concern with a low cash balance and an accumulated deficit of over **$20 million**, raising substantial doubt about the company's ability to continue as a going concern despite recent capital raises [Results of Operations (Q2 2025 vs Q2 2024)](index=47&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202025%2C%20and%202024) In Q2 2025, net revenue increased by **142%** to **$3.3 million** compared to Q2 2024, and gross margin improved significantly from **10.9%** to **18.4%** due to the operational start of the new Peru facility, however, operating expenses surged by **347%**, primarily from **$480,320** in factory idle capacity costs, leading to an increased net loss of **$1.6 million**, up from **$0.9 million** in the prior-year quarter - Net revenue grew by **142%** year-over-year, primarily due to increased sales to the company's largest customer[176](index=176&type=chunk) - Gross margin improved to **18.4%** from **10.9%** in the prior year, attributed to the transition from third-party suppliers to the company's own manufacturing facility in Peru[178](index=178&type=chunk) - General and administrative expenses increased by **347%**, largely due to **$480,320** in idle capacity costs associated with the new production facility as it scales up operations[179](index=179&type=chunk)[180](index=180&type=chunk) [Results of Operations (H1 2025 vs H1 2024)](index=50&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%2C%20and%202024) For the first six months of 2025, net revenue grew **129%** to **$6.5 million**, and gross margin expanded to **17.8%** from **15.3%** in H1 2024, reflecting efficiency gains from the new facility, but despite this, the net loss increased by **26%** to **$2.5 million**, driven by higher general & administrative, shipping, and advertising expenses related to business expansion Six-Month Operational Highlights (in USD) | Metric | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Net Revenue** | $6,493,260 | $2,830,002 | +129% | | **Gross Profit** | $1,158,974 | $432,347 | +168% | | **Gross Margin** | 17.8% | 15.3% | +2.5 p.p. | | **Operating Loss** | $(2,028,561) | $(1,851,515) | +9.6% | | **Net Loss** | $(2,521,538) | $(1,993,521) | +26% | [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity position improved, with working capital turning positive to **$662,217** at June 30, 2025, from a deficit of **$3.9 million** at year-end 2024, however, cash on hand was low at **$641,129**, and the company has historically relied on debt and equity financing to fund its operations, which have generated an accumulated deficit of **$20.1 million**, with cash used in operations increasing significantly to **$3.9 million** in H1 2025, funded primarily by **$2.7 million** raised from financing activities Working Capital (in USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Current Assets** | $5,201,109 | $4,916,614 | | **Current Liabilities** | $4,538,892 | $8,813,996 | | **Working Capital** | **$662,217** | **$(3,897,382)** | - Net cash used in operating activities increased by **190%** to **$3.9 million** for H1 2025, mainly due to a **$1.44 million** increase in accounts receivable and a **$0.55 million** increase in prepaid inventory[205](index=205&type=chunk) - Net cash from financing activities was **$2.7 million** in H1 2025, primarily from **$2.4 million** in proceeds from the sale of common stock and **$1.2 million** from warrant exercises, offset by **$0.85 million** in debt repayments[207](index=207&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is classified as a "smaller reporting company" and is therefore not required to provide quantitative and qualitative disclosures about market risk - As a "smaller reporting company," as defined in Rule 12b-2 of the Exchange Act, the Company is exempt from providing the information required by this item[214](index=214&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025, and concluded that they were not effective, with no material changes in internal control over financial reporting during the six-month period - Based on an evaluation as of June 30, 2025, the chief executive officer and chief financial officer concluded that the company's disclosure controls and procedures were not effective[215](index=215&type=chunk) - No changes in internal control over financial reporting occurred during the six months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, internal controls[216](index=216&type=chunk) PART II [PART II. OTHER INFORMATION](index=55&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered sales of equity securities, defaults upon senior securities, other information, and exhibits [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is currently involved in a lawsuit filed by its former chief financial officer alleging wrongful termination, and while management believes the outcome is not likely to have a material adverse effect on the company's financial position, the ultimate result is unpredictable and no liability has been accrued - The Company is defending a lawsuit from its former CFO for wrongful termination, and management does not believe the outcome will be materially adverse, but cannot predict the result or estimate a potential loss[218](index=218&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) As a "smaller reporting company," BranchOut Food Inc. is not required to provide risk factor disclosures in its Form 10-Q - The Company is not required to provide the information for this item as it is a "smaller reporting company"[220](index=220&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company reported no unregistered sales of equity securities or use of proceeds during the reporting period - None reported[221](index=221&type=chunk) [Defaults Upon Senior Securities](index=55&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities during the period - None reported[222](index=222&type=chunk) [Other Information](index=55&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None reported[224](index=224&type=chunk) [Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents like the Articles of Incorporation and Bylaws, as well as certifications from the CEO and CFO as required by the Sarbanes-Oxley Act, and interactive data files (XBRL) - The report includes exhibits such as Articles of Incorporation, Bylaws, CEO/CFO certifications (Rule 13a-14(a) and Section 906), and Inline XBRL documents[225](index=225&type=chunk)

[Form 8-K Current Report](index=1&type=section&id=Form%208-K%20Current%20Report) This Form 8-K filing details BranchOut Food Inc.'s financial results, accompanying exhibits, and corporate authorization [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) BranchOut Food Inc. announced selected financial results for the quarter and six-month periods ended June 30, 2025, via a press release - The company issued a press release on **August 11, 2025**, detailing financial results for the quarter and six months ended **June 30, 2025**[4](index=4&type=chunk) - Information in the press release (Exhibit 99.1) is **furnished**, not filed, limiting liability under Section 18 of the Exchange Act[5](index=5&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section details the exhibits accompanying the Form 8-K filing, primarily the August 11, 2025, press release - Exhibits include **Exhibit 99.1**, the Press Release dated August 11, 2025, and **Exhibit 104**, the Cover Page Interactive Data File[7](index=7&type=chunk) [Signatures](index=3&type=section&id=Signatures) The report was officially signed and authorized by BranchOut Food Inc.'s Chief Executive Officer on August 13, 2025 - The report was signed by **Eric Healy**, CEO of BranchOut Food Inc., on **August 13, 2025**[9](index=9&type=chunk)[10](index=10&type=chunk)

Core Insights - BranchOut Food Inc. reported a record performance in June 2025, achieving the highest monthly revenue of approximately $1.7 million and a gross margin of 27% [4][8] - The company experienced a year-to-date revenue growth of 129% compared to the same period in 2024, driven by strong demand across retail and ingredient channels [8][12] - Operational improvements were noted, with factory throughput increasing by 50% in June, and inventory turnover reduced to under 60 days [5][8] Financial Performance - The first half of 2025 saw revenue more than double year-over-year, with an EBITDA loss of $1.6 million primarily due to one-time scale-up costs [12] - Current liability debt was significantly reduced by 67%, from $6.39 million to $2.16 million in Q2 [8][11] - Management anticipates improved financial performance in the second half of the year due to enhanced operational efficiency and lower freight costs [12] Operational Efficiency - The company has been actively working to address a backlog of orders since opening its Peru facility, which has led to temporary reliance on air freight, impacting margins [5][8] - As operations catch up, gross margins are expected to improve by approximately 3-4% by transitioning from air freight to ocean freight [5] - The company is focused on scaling production efficiently for new products, with significant orders already placed by major retailers [6][7] Growth Strategy - BranchOut is committed to rapid growth through agile product development, which includes training new teams and optimizing production processes [6][10] - The company is well-positioned for continued growth, supported by strong sell-through in warehouse clubs and national retailers, as well as growing ingredient sales through partnerships [13] - Tariffs on Chinese imports are expected to provide additional competitive advantages for the company [13]

Core Insights - BranchOut Food Inc. has secured over $2.8 million in new orders from a major warehouse club, driven by strong consumer demand for its products, particularly Pineapple Chips, Chewy Banana Bites, and the upcoming launch of Crunchy Strawberry Halves [3][4][11] Product Performance - Pineapple Chips and Chewy Banana Bites have shown strong sales performance, leading to significant reorder volumes, including a $714,000 order for Pineapple Chips in the Southeast and an $860,000 order for Chewy Banana Bites in the Midwest [6][4] - The Midwest region alone has generated over $1.8 million in orders across three different SKUs, indicating robust market acceptance [5][6] - The new Crunchy Strawberry Halves are expected to replace an imported product, with early performance suggesting it could become a top-selling item [7][11] Innovation and Expansion Plans - BranchOut is preparing to launch a new line of snack packs targeted at children, aimed at grocery retailers, which is projected to be a $20–30 million opportunity [12][13] - The company has a pipeline of innovative products ready for retail presentations, including Mango Slices, Dragon Fruit, and Snack Mixes, designed to meet growing consumer demand for nutritious snacks [9][11] - The multipack format is anticipated to double the addressable market opportunity within warehouse clubs, with interest already expressed by retailers [13] Operational Strategy - The company is raising $3 million through an ATM program to support growth initiatives, including strategic hires, expanded partnerships, and new product development [16] - BranchOut's GentleDry™ technology is fully operational, with plans to address bottlenecks in preprocessing to maximize production capacity [15][17]

Core Insights - BranchOut Food Inc. has received over $2.8 million in new orders from a major warehouse club, indicating strong consumer demand and brand validation in the better-for-you snack category [2][10] - The company is expanding its product offerings with the launch of new items, including Crunchy Strawberry Halves, which are expected to become a staple in the warehouse club channel [5][11] - BranchOut is preparing a robust pipeline of innovative products aimed at enhancing its market presence and meeting consumer demand for nutritious snacks [8][10] Product Performance - Pineapple Chips and Organic Chewy Banana Bites have shown strong sales performance, leading to significant reorder volumes, including a $714,000 order for Pineapple Chips in the Southeast and an $860,000 order for Chewy Banana Bites in the Midwest [6][3] - The Midwest region alone has accounted for over $1.8 million in orders across three different SKUs, demonstrating the scalability of these products [4][6] - The upcoming launch of Crunchy Strawberry Halves is expected to replace an imported freeze-dried product, offering superior quality and value [5][6] Growth Strategy - BranchOut plans to launch a new branded line of snack packs targeted at kids and school lunches in 2026, aiming for placement in grocery produce departments to improve margins [11][12] - The multipack format presents a significant opportunity, potentially doubling the addressable market within the warehouse club channel [12] - The company is also developing a breakthrough product line outside the fruit and vegetable category, leveraging its GentleDry™ technology [13][14] Operational Enhancements - The company is raising $3 million through an ATM program to support growth initiatives, including strategic hires and operational enhancements [15] - BranchOut's Peru facility is currently underutilized, with plans to address bottlenecks in preprocessing to unlock the full potential of its GentleDry™ technology [14][15] - Investments in vertical integration and additional capital expenditures are expected to resolve existing constraints and enhance scalability [14][15]

Core Insights - BranchOut Food Inc. has announced the inclusion of its Cinnamon Churro Banana Chips in the upcoming Initial Operational Test and Evaluation (IOT&E) for the Close Combat Assault Ration (CCAR) by the U.S. Army [1][2][3] - The CCAR is designed to provide troops with lightweight, nutrient-dense, and shelf-stable food solutions for up to five days [2][3] - The initiative highlights the effectiveness of BranchOut's GentleDry technology, which preserves up to 95% of the original nutrition of fresh produce [7] Company Overview - BranchOut Food Inc. specializes in clean-label snacks and innovative dehydration technology, positioning itself as a leader in the food technology sector [1][7] - The company is working with the U.S. Army's Combat Capabilities Development Command (DEVCOM) to explore future military rations, indicating a strong alignment with government needs [4][5] - BranchOut's strategy includes commercializing its patented GentleDry platform across various markets, including national retail and international food security programs [5] Product Development - The Cinnamon Churro Banana Chips will undergo testing where DEVCOM will gather feedback from Warfighters, emphasizing the product's potential for military applications [3][4] - BranchOut is actively reviewing multiple products for future inclusion in military menus, showcasing its commitment to innovation in high-performance food solutions [4][5] Technology and Innovation - The GentleDry technology is protected by over 17 patents, allowing BranchOut to differentiate itself in the market as a trusted supplier of high-quality dehydrated products [7] - The company aims to push the boundaries of food innovation in demanding environments, reflecting its focus on taste, nutrition, and durability [4]

Core Insights - BranchOut Food Inc. is expanding its innovative Brussels Sprout Crisps to 3,945 stores, nearly doubling its previous distribution, following strong sales performance [2][3] - The company is also launching a new product, Cinnamon Sweet Potato Sticks, in 1,952 locations, which represents about 50% of the retailer's footprint [4] - The expansion highlights the effectiveness of BranchOut's proprietary GentleDry™ technology, which preserves the nutritional quality of the snacks [5][6] Financial Performance - For the three months ended May 31, 2024, BranchOut reported net sales of $6.5 million, a significant increase from $3.6 million in the same period of 2023 [1] - Gross profit for the same period was $2.45 million, compared to $1.78 million in 2023, indicating improved profitability [1] - The company achieved a net income of $330,837, a substantial increase from $53,406 in the previous year [1] Product Innovation - The Brussels Sprout Crisps are noted for their unique market position as the first of their kind, receiving an overwhelming consumer response since their launch [3] - The new Cinnamon Sweet Potato Sticks are designed to offer a crunchy, lightly sweet experience, utilizing the GentleDry™ technology to maintain the produce's quality [4] - BranchOut's focus on innovation is further validated by its growing partnership with the nation's largest retailer, enhancing its market presence [5] Market Position - BranchOut Food is recognized as a leader in food technology, specializing in high-quality dehydrated snacks [6] - The company holds over 17 patents for its GentleDry™ technology, which preserves up to 95% of the original nutrition of fresh produce, setting it apart in the industry [6] - The expansion of its product line and distribution channels positions BranchOut as a preferred supplier for innovative dried fruit and vegetable snacks [5]

Core Insights - BranchOut Food Inc. has achieved a significant national expansion, with its Brussels Sprout Crisps now available in 3,945 stores, nearly doubling its previous distribution [1][2] - The company is launching a new product, Cinnamon Sweet Potato Sticks, in 1,952 locations, which represents about 50% of the retailer's footprint [3] Company Performance - The Brussels Sprout Crisps have received an overwhelming consumer response since their launch, establishing themselves as a standout new item in the market [2] - The expansion of the product line and distribution reflects BranchOut's ability to innovate and meet rising consumer demand for healthier snack options [4] Technology and Innovation - BranchOut utilizes its proprietary GentleDry™ technology, which preserves up to 95% of the original nutrition of fresh produce, enhancing the quality and taste of its products [5] - The company has over 17 patents protecting its technology, positioning it as a trusted brand and supplier in the dehydrated snack market [5] Market Position - BranchOut is establishing itself as a preferred supplier for innovative dried fruit and vegetable-based snacks, particularly in light of recent tariffs on Chinese-sourced freeze-dried fruits [4]

Core Insights - Kaufman Kapital LLC has executed a strategic agreement with BranchOut Food Inc., resulting in a $1 million cash infusion through the early exercise of existing warrants, which strengthens BranchOut's financial strategy and balance sheet [1][2] - The agreement includes amendments to existing financing terms, allowing for debt repayment and extending key debt maturities, reflecting Kaufman Kapital's confidence in BranchOut's long-term growth strategy [2][4] Financial Strategy - The $1 million proceeds from the warrant exercise will be utilized to pay down outstanding debt obligations, part of BranchOut's initiative to eliminate all current liability notes payable by the end of 2025 [2][5] - BranchOut plans to repay $1.56 million in senior secured debt through a combination of cash flow and the recent warrant exercise proceeds, with the remaining $875,000 principal on the Kaufman note expected to be paid gradually through operating cash flow [5] Operational Improvements - BranchOut is entering a transformative phase with multiple cost burdens and liabilities set to be reduced, which is expected to lead to significant improvements in operating cash flow as production scales and efficiencies are driven at its Peru facility [3][6] - The company has made strategic investments, including a $500,000 addition of dedicated air-drying capacity to its Peru facility, which is expected to enhance vertical integration and improve gross margins [6] Future Growth Potential - A recently filed $10 million shelf registration is intended to provide strategic flexibility for growth capital, allowing the company to act opportunistically for future expansion without raising equity to repay debt or fund operating losses [7][8] - BranchOut anticipates generating positive operating income in 2025 and plans to repay all remaining current liability notes payable through a combination of warrant proceeds and operating cash flow [7][8] Company Overview - BranchOut Food Inc. specializes in high-quality dehydrated fruit and vegetable-based products through its proprietary GentleDry Technology, which preserves up to 95% of the original nutrition of fresh produce [9]

Core Insights - BranchOut Food Inc. reported record Q1 2025 revenue of $3.2 million, a 118% year-over-year increase, marking a significant operational milestone with the full operation of its Peru facility [2][12][16] - The company is strategically positioned to benefit from U.S. tariffs on Chinese imports, providing a cost advantage over competitors reliant on Chinese sourcing [9][10] Financial Performance - Q1 2025 revenue reached $3.2 million, reflecting a 118% increase compared to the previous year [2] - The company anticipates being debt-free by the end of 2025, with substantial improvements in gross margin and cost structure expected to begin in Q2 [6][15] Operational Developments - The Peru facility, which is fully operational, supports over $40 million in annual production capacity and allows for better control over product quality and supply chain efficiency [2][6] - The facility's utilization is expected to improve significantly, with Q2 utilization already up more than 50% compared to Q1 [14] Strategic Partnerships and Market Expansion - BranchOut has expanded its partnership with the largest warehouse club in the U.S., generating nearly $3 million in sales in H1 2025 [3][6] - The company has entered a strategic partnership with MicroDried to lead sales in the industrial ingredient channel, projecting annual revenue of $5–6 million [6][8] Product Innovation and Direct-to-Consumer Strategy - BranchOut is expanding into the direct-to-consumer (DTC) channel, focusing on e-commerce and subscriptions, leveraging its proprietary GentleDry™ technology for competitive advantage [5][10] - The company has launched several innovative products, including Brussels Sprout Crisps and Carrot Sticks, which are now available nationwide [4][7] Market Positioning - With tariffs on Chinese imports at 30%, BranchOut is well-positioned to disrupt the freeze-dried snack market, competing against brands that heavily rely on Chinese sourcing [9][10] - The company is actively discussing replacing China-sourced private label SKUs with its own offerings to provide pricing stability and supply chain resilience [11]