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]

Core Insights - BranchOut Food Inc. has appointed Jesse Thomas as Chief Brand Officer to enhance its direct-to-consumer (DTC) strategy and brand marketing efforts [2][6] - Thomas has a successful background in scaling DTC brands, notably as the Founder & CEO of Picky Bars, which achieved a $12 million acquisition [3][6] - The company aims to leverage Thomas's expertise to drive high-margin revenue streams through e-commerce and subscription models while expanding its retail presence [4][9] Company Strategy - The focus will be on building and launching a DTC website, expanding product lines onto platforms like Amazon, and developing an email subscription program [7] - BranchOut plans to launch a wholesale portal for independent retailers and oversee digital advertising and social media strategies [7] - The company is positioned for sustained revenue growth, with expectations to reach $9 million in revenue in the first half of 2025 and to become cash flow positive starting this quarter [9] Technology and Product Offering - BranchOut Food specializes in high-quality dehydrated fruit and vegetable products using its proprietary GentleDry™ technology, which preserves up to 95% of the original nutrition [10] - The company holds over 17 patents for its technology, establishing itself as a trusted brand and supplier in the market [10] - The focus on nutrient-dense, clean-label snacks aligns with the growing consumer demand for health-conscious products [5][8]

Core Insights - BranchOut Food (NASDAQ: BOF) is experiencing significant growth, with stock prices up 200% from 2024 lows and potential for an additional 1000% increase [1] - The company is ramping production and improving revenue, projecting first-half revenue of $9 million, which indicates strong growth potential in the dehydrated food industry valued between $50 billion and $350 billion annually [2][3] Company Performance - BranchOut Food is in a hypergrowth phase, with Q1 revenue forecasted to grow over 150% and first-half 2025 revenue expected to increase by more than 200% [5] - A new processing plant in Peru has increased production capacity by $40 million annually, enhancing margins by bringing production in-house [5] - The company has manageable debt, with total liabilities about 3 times equity, and is looking to expand capacity further [6] Market Position - BranchOut Food has established a strong position with major clients, including Costco, which is increasing orders, and Taylor Farms, which has placed an initial order worth $175,000 [2][4] - The company is well-positioned to penetrate other grocery chains like Walmart and Kroger, expanding its market share [3] Acquisition Potential - BranchOut Food is considered a desirable acquisition target for larger snack and packaged food companies like PepsiCo and Kraft Heinz, which could leverage its offerings to sustain revenue growth [7] Stock Performance - The stock has shown resilience, with a strong base at $1.20 and positive momentum driven by favorable news cycles [8]

Core Insights - BranchOut Food Inc. projects record-breaking growth with anticipated revenue of $9 million in H1 2025, representing a 218% year-over-year increase driven by strong sales from a major warehouse club [1][4] - The partnership with the nation's largest warehouse club involves the rollout of four BranchOut products across four regions, highlighting the company's innovation and consumer demand [2][4] - The newly operational 50,000-square-foot facility in Peru has an annual production capacity exceeding $40 million, establishing it as the world's largest GentleDry™ production hub [3][6] Financial Performance - H1 2025 revenue is projected at $9 million, a significant increase of 218% compared to the previous year, with strong momentum expected to continue throughout 2025 [4][7] - The partnership with the warehouse club is expected to generate $4 million in sales during H1 2025 [4] - The company is on track to achieve positive cash flow starting in Q1 2025, driven by increased demand and operational efficiencies [4][7] Product and Market Expansion - The warehouse club has committed to four BranchOut products, with plans to expand to five items across four regions, showcasing the company's product quality and market potential [2][4] - New partnerships in the Midwest and Northeast regions are anticipated to further enhance growth opportunities later in the year [2] - The product offerings include Organic Chewy Banana Bites, Bell Pepper Crisps, Brussels Sprout Crisps, Pineapple Chips, and Crunchy Strawberry Halves across various regions [5] Operational Efficiency - The Peru facility is fully operational with three production lines, enabling the company to meet significant demand and fulfill orders efficiently [3][6] - The GentleDry™ technology allows for the production of premium snacks at competitive costs while maintaining high quality [6][7] - The operational efficiency and capacity of the Peru facility are expected to support the company's rapid growth trajectory [7] Company Overview - BranchOut Food specializes in high-quality dehydrated fruit and vegetable-based products using its proprietary GentleDry™ technology, which preserves up to 95% of the original nutrition [8] - The company holds over 17 patents for its dehydration technology, positioning it as a trusted brand and supplier in the premium snack market [8]