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]

Part I [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) BranchOut Food Inc. reported Q1 2025 revenue of $3.2 million, a net loss of $0.92 million, and a going concern warning due to negative working capital [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to $14.11 million, liabilities decreased to $10.23 million, and stockholders' equity improved to $3.88 million by March 31, 2025 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Total Current Assets** | $5,791,605 | $4,916,614 | | **Total Assets** | **$14,111,183** | **$12,855,875** | | **Total Current Liabilities** | $8,528,261 | $8,813,996 | | **Total Liabilities** | **$10,230,144** | **$10,514,292** | | **Total Stockholders' Equity** | **$3,881,039** | **$2,341,583** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2025 net revenue doubled to $3.19 million, gross profit increased, and net loss improved to $0.92 million from $1.05 million year-over-year Q1 2025 vs. Q1 2024 Statement of Operations (Unaudited) | Metric | Q1 2025 ($) | Q1 2024 ($) | | :--- | :--- | :--- | | **Net Revenue** | $3,193,522 | $1,467,016 | | **Gross Profit** | $552,515 | $283,588 | | **Operating Loss** | ($682,540) | ($1,025,100) | | **Net Loss** | **($918,382)** | **($1,050,967)** | | **Net Loss Per Share** | ($0.11) | ($0.26) | [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Net cash used in operations increased to $1.93 million, offset by $2.35 million from financing activities, resulting in a net cash increase of $56,929 Cash Flow Summary (Unaudited) | Cash Flow Activity | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | ($1,927,122) | ($503,578) | | Net cash used in investing activities | ($377,841) | ($40,100) | | Net cash provided by financing activities | $2,353,683 | $137,589 | | **Net increase (decrease) in cash** | **$56,929** | **($406,089)** | [Notes to Financial Statements](index=9&type=section&id=Condensed%20Consolidated%20Notes%20to%20Financial%20Statements%20(Unaudited)) Notes detail the company's plant-based snack business, new Peru facility, going concern warning, customer concentration, and significant debt and lease obligations - The company develops and distributes plant-based snacks, with production now at its new facility in Pisco, Peru, operational since December 2024[19](index=19&type=chunk) - Substantial doubt exists about the company's going concern ability due to recurring losses, an accumulated deficit of **$18.5 million**, and negative working capital of **$2.7 million** as of March 31, 2025[24](index=24&type=chunk) - Significant customer concentration risk exists, with two customers accounting for **92% of net revenue** and **88% of accounts receivable** in Q1 2025[66](index=66&type=chunk) - Significant financing agreements include a **$3.4 million** convertible note with Kaufman Kapital and senior secured notes with Eagle Vision, an affiliate of the CFO[51](index=51&type=chunk)[58](index=58&type=chunk)[73](index=73&type=chunk) - To maintain exclusivity for avocado products, the company must make annual royalty minimum payments of **$250,000** starting in 2025 and purchase additional EnWave machines in 2025 and 2026[102](index=102&type=chunk)[103](index=103&type=chunk) [Management's Discussion and Analysis (MD&A)](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 revenue growth, the new Peru facility's role in vertical integration, ongoing net losses, and reliance on external financing amidst going concern doubts [Overview](index=34&type=section&id=Overview) The company is strategically shifting towards vertical integration with its new Peru production facility, aiming to improve margins for its plant-based snack products - The company is transitioning to vertical integration with its new production facility in Peru, operational since December 2024[126](index=126&type=chunk) - The company believes its licensed dehydration technology is superior and provides exclusive rights for products like avocado-based snacks[127](index=127&type=chunk) [Going Concern Uncertainty](index=35&type=section&id=Going%20Concern%20Uncertainty) Recurring losses, a significant accumulated deficit, and negative working capital raise substantial doubt about the company's ability to continue as a going concern Financial Position as of March 31, 2025 | Metric | Value ($) | | :--- | :--- | | Cash Balance | $2,386,381 | | Working Capital Deficit | ($2,736,656) | | Accumulated Deficit | ($18,480,439) | [Results of Operations](index=36&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20March%2031%2C%202025%20and%202024) Q1 2025 net revenue increased 118% to $3.2 million, gross margin slightly declined to 17%, and net loss decreased to $0.92 million Comparison of Operations for the Three Months Ended March 31 | | 2025 ($) | 2024 ($) | Increase / (Decrease) ($) | | :--- | :--- | :--- | :--- | | Net revenue | $3,193,522 | $1,467,016 | $1,726,506 | | Gross profit | $552,515 | $283,588 | $268,927 | | Operating loss | ($682,540) | ($1,025,100) | ($342,560) | | Net loss | ($918,382) | ($1,050,967) | ($132,585) | - The **118% increase in revenue** was primarily due to increased sales to the company's two largest customers[137](index=137&type=chunk) - Gross profit margin decreased slightly from **19% to 17%** due to transition costs for the new Peru Facility[138](index=138&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had a **$2.7 million** working capital deficit, with Q1 2025 operations funded primarily by **$2.35 million** from ATM stock sales Working Capital Summary | | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | Current Assets | $5,791,605 | $4,916,614 | | Current Liabilities | $8,528,261 | $8,813,996 | | **Working Capital** | **($2,736,656)** | **($3,897,382)** | - Net cash from financing activities of **$2.35 million** was primarily driven by **$2.42 million** in proceeds from ATM common stock sales[150](index=150&type=chunk)[18](index=18&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of March 31, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025[156](index=156&type=chunk) Part II [Legal Proceedings and Other Items](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in material legal proceedings and, as a smaller reporting company, is not required to disclose risk factors - The company is not currently party to any pending legal proceedings with a material adverse effect[159](index=159&type=chunk) - As a "smaller reporting company," the company is not required to provide Item 1A. Risk Factors information[160](index=160&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed, including key financing, operational agreements, and certifications from the CEO and CFO - Exhibits list key financing and operational agreements, including the ATM sales agreement, Securities Purchase Agreement with Kaufman Kapital, and License Agreement with EnWave Corporation[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)

Financial Position - As of December 31, 2024, the company had a cash balance of $2,329,452 and an accumulated deficit of $17,562,057[183]. - The company has a working capital deficit of $3,897,382 as of December 31, 2024[183]. - As of December 31, 2024, the company reported negative working capital of $3,897,382, total liabilities of $10,514,292, and an accumulated deficit of $17,562,057, compared to an accumulated deficit of $12,810,541 in 2023[232]. Revenue and Profitability - The company's net revenue for the year ended December 31, 2024, was $6,516,337, an increase of $3,690,482, or 131%, compared to $2,825,855 for the year ended December 31, 2023[223]. - Cost of goods sold for the year ended December 31, 2024, was $5,652,717, an increase of $2,730,632, or 93%, compared to $2,922,085 for the year ended December 31, 2023[224]. - The company achieved a gross profit of $863,620, or 13% of revenues, for the year ended December 31, 2024, compared to a gross operating loss of $96,230, or (3%) of revenues, for the year ended December 31, 2023[224]. Expenses - General and administrative expenses increased by $289,246, or 18%, to $1,870,720 for the year ended December 31, 2024, compared to $1,581,474 for the year ended December 31, 2023[225]. - Salaries and wages increased by $474,342, or 42%, to $1,604,200 for the year ended December 31, 2024, compared to $1,129,858 for the year ended December 31, 2023[227]. - Professional fees rose by $596,545, or 86%, to $1,291,141 for the year ended December 31, 2024, compared to $694,596 for the year ended December 31, 2023[228]. - Other expenses increased by $425,523, or 100%, to $849,075 for the year ended December 31, 2024, primarily due to increased interest expense[229]. - Advertising and marketing expenses increased by $149,538, or 92%, to $311,586 for the year ended December 31, 2024, compared to $162,048 for the year ended December 31, 2023[226]. - The company recognized $704,699 in stock-based compensation for the year ended December 31, 2024, compared to $258,574 for the year ended December 31, 2023[215]. Net Loss - The company's net loss for the year ended December 31, 2024, was $4,751,516, an increase of $825,806, or 21%, compared to a net loss of $3,925,710 for the year ended December 31, 2023[230]. Cash Flow - Net cash used in operating activities increased by $1,330,444, or 38%, to $4,859,816 for the year ended December 31, 2024, primarily due to increased net loss and inventory purchases[234]. - Net cash used in investing activities surged by $2,705,996, or 2,321%, to $2,822,561 for the year ended December 31, 2024, mainly due to increased property and equipment purchases[235]. - Net cash provided by financing activities rose by $5,607,342, or 149%, to $9,362,621 for the year ended December 31, 2024, driven by increased net proceeds from debt and convertible debt financing[236]. Financing Activities - The company raised $2,400,000 from sales of common stock in an "At-the-Market" offering after December 31, 2024, but anticipates needing additional financing to sustain operations[243]. - The company completed the sale of 1,750,000 shares of common stock in a public offering at a price of $0.80 per share, resulting in net proceeds of $1,164,685[242]. - The company entered into an ATM Agreement with Alexander Capital for the sale of shares of common stock with an aggregate offering price of up to $5 million, having sold 1,317,307 shares for gross proceeds of approximately $2.5 million as of December 31, 2024[240]. - The company has secured financing through various promissory notes, including a $3,400,000 convertible note and a $1,200,000 senior secured promissory note, both secured by a lien on substantially all assets[237][238]. Operational Developments - The new production facility in Peru commenced operations in December 2024, utilizing three large-scale REV machines[179]. - The company plans to improve operating margins in 2025 by transitioning production from third-party manufacturers to internal production[179]. Impairment and Allowance - The company recognized $761,085 of impairment expense during 2023 due to issues with NXTDried Superfoods, including $485,265 on a note receivable[185]. - The company had an allowance for doubtful accounts of $25,586 as of December 31, 2024, with no allowance necessary in 2023[200]. Depreciation - The company incurred depreciation expenses of $171,873 and $223,856 for the years ended December 31, 2024, and 2023, respectively[202]. Emerging Growth Company Status - The company remains an emerging growth company and is eligible for certain exemptions from various reporting requirements, which may affect the comparability of its financial statements[246].

Core Viewpoint - BranchOut Food Inc. has partnered with MicroDried to enhance the dried ingredient market, leveraging innovative technology and large-scale production capabilities to meet growing demand [2]. Company Overview - BranchOut Food Inc. specializes in next-generation dehydration technology known as GentleDry [2]. - MicroDried is recognized as a leading provider of premium dried fruit and vegetable ingredients [2]. Financial Highlights - For the three months ended May 31, 2024, BranchOut reported net sales of $45.031 million, an increase from $43.603 million in the same period of 2023 [1]. - Gross profit for the same period was $2.454 million, up from $1.777 million year-over-year [1]. - Net income for the three months was $330,837, compared to $53,406 in the previous year [1]. Market Potential - The collaboration is expected to generate $5-6 million in annual ingredient sales, indicating significant growth potential in the dried ingredient market, valued at $36 billion [2]. - The partnership allows MicroDried to expand its product offerings with GentleDry processed ingredients, catering to the demand for high-quality, clean-label solutions in the food and beverage sector [2]. Strategic Implications - The agreement signifies BranchOut's strategic expansion into the industrial ingredient market, complementing its existing retail and private label divisions [2].

Core Insights - BranchOut Food Inc. has entered a Definitive Agreement with MicroDried to integrate GentleDry technology into MicroDried's premium dried fruit and vegetable ingredient offerings, addressing the growing demand in the food and beverage industry [1][2] - The collaboration aims to enhance large-scale production capabilities at BranchOut's new 50,000 square foot facility in Peru, with projected annual ingredient sales of $5-6 million [2][8] - The global freeze-dried ingredient market is valued at $36 billion and is expected to grow at a CAGR of 7.6%, indicating a rising demand for high-quality, minimally processed ingredients [6] Company Collaboration - The partnership combines MicroDried's established market presence and reputation with BranchOut's innovative GentleDry technology, providing food manufacturers with enhanced ingredient solutions [4][6] - This collaboration is seen as a strategic fit, leveraging both companies' strengths to meet evolving industry demands for high-performance dried ingredients [4][6] Market Expansion - BranchOut's ingredient business is one of three key sales channels, alongside branded retail and private label divisions, which are experiencing strong growth [5] - The company is also preparing to launch a direct-to-consumer e-commerce platform, further expanding its market reach [5] Commitment to Quality - MicroDried is recognized for its dedication to high-quality, ready-to-eat dried ingredients without added sugars or processing aids, and the addition of GentleDry technology enhances this commitment [6][7] - The collaboration aims to provide a wide range of high-performance solutions that meet the needs of food manufacturers while maintaining quality and safety standards [7] Future Outlook - Initial ingredient orders are already in production, positioning both companies to expand their impact in the global ingredient market [8] - The partnership reflects a shared vision of delivering innovative and sustainable dried ingredient solutions to meet the needs of today's food manufacturers [8]

Core Insights - BranchOut Food Inc. is experiencing significant growth through the expansion of its Bell Pepper Crisps product across multiple regions, including a new $600,000+ order from the Midwest, marking its fourth regional expansion [2][4] - The company's GentleDry™ dehydration technology is a key factor in its ability to deliver high-quality, nutrient-rich snacks, positioning BranchOut as a major player in the premium snack market [3][4] - The establishment of a new 50,000-square-foot production facility in Peru enhances the company's production capacity, allowing it to meet increasing demand from major retailers [7][8] Expansion and Product Rollout - The Midwest order for Bell Pepper Crisps is part of a broader strategy that includes recent launches in Southern California, with plans for further rollouts in the Bay Area and Texas [2][6] - BranchOut's Pineapple Chips have returned to Southeast Clubs, achieving nearly $900,000 in reorders, indicating strong consumer demand [6] - The company is set to introduce Organic Chewy Banana Bites in Southern California and Hawaii, with a $400,000+ order scheduled for the end of March [6] Production Capacity and Efficiency - The Peru facility, the largest GentleDry™ production hub globally, operates with three production lines and has an annual capacity exceeding $40 million, positioning the company to fulfill rising order volumes [7] - The efficient operation of the Peru facility allows BranchOut to expand into new regions while maintaining high product quality [8]

Core Insights - BranchOut Food Inc. is experiencing significant growth through the expansion of its Bell Pepper Crisps product across multiple regions, including a new $600,000+ order from the Midwest [2][4] - The company's GentleDry™ dehydration technology is a key factor in its ability to deliver high-quality, nutrient-rich snacks, contributing to its strong market presence [3][8] - The expansion strategy includes a multi-product approach, moving away from a traditional single-product model, which is expected to drive record-breaking revenue [4][6] Expansion and Product Launches - The Bell Pepper Crisps have expanded to four regions, including the Midwest, Bay Area, and Texas, following a successful launch in Southern California [2][6] - BranchOut's Pineapple Chips have returned to Southeast Clubs, achieving nearly $900K in reorders, indicating strong consumer demand [6] - Organic Chewy Banana Bites are set to launch in Southern California and Hawaii with a $400K+ order, further diversifying the product lineup [6] Production Capacity and Efficiency - The new 50,000-square-foot facility in Peru is the largest GentleDry™ production hub globally, with an annual production capacity exceeding $40 million [7] - The Peru facility operates three production lines efficiently, allowing the company to meet increasing demand from major retailers [7][8] - The commitment to maintaining exceptional quality while scaling production is emphasized by the company's leadership [8]

Core Insights - BranchOut Food Inc. is experiencing significant growth through the expansion of its Bell Pepper Crisps product across multiple regions, including a new $600,000+ order from the Midwest [2][4] - The company's GentleDry™ dehydration technology is a key factor in its ability to deliver high-quality, nutrient-rich snacks, contributing to its strong market presence [3][8] - The expansion strategy includes a multi-product approach, moving away from a traditional single-product model, which is expected to drive record-breaking revenue [4][6] Expansion and Product Launches - The Bell Pepper Crisps have expanded to four regions, including the Midwest, Bay Area, and Texas, following a successful launch in Southern California [2][6] - BranchOut's Pineapple Chips have returned to Southeast Clubs, achieving nearly $900K in reorders, indicating strong consumer demand [6] - Organic Chewy Banana Bites are set to launch in Southern California and Hawaii with a $400K+ order, further diversifying the product lineup [6] Production Capacity and Efficiency - The new 50,000-square-foot facility in Peru is the largest GentleDry™ production hub globally, with an annual production capacity exceeding $40 million [7] - The facility operates three production lines efficiently, allowing the company to meet increasing demand from major retailers while maintaining product quality [8]