
Part I Financial Statements (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 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 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 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 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 202419 - 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, 202524 - Significant customer concentration risk exists, with two customers accounting for 92% of net revenue and 88% of accounts receivable in Q1 202566 - Significant financing agreements include a $3.4 million convertible note with Kaufman Kapital and senior secured notes with Eagle Vision, an affiliate of the CFO515873 - To maintain exclusivity for avocado products, the company must make annual royalty minimum payments of $250,000 starting in 2025 and purchase additional EnWave machines in 2025 and 2026102103 Management's Discussion and Analysis (MD&A) Management discusses Q1 2025 revenue growth, the new Peru facility's role in vertical integration, ongoing net losses, and reliance on external financing amidst going concern doubts Overview The company is strategically shifting towards vertical integration with its new Peru production facility, aiming to improve margins for its plant-based snack products - The company is transitioning to vertical integration with its new production facility in Peru, operational since December 2024126 - The company believes its licensed dehydration technology is superior and provides exclusive rights for products like avocado-based snacks127 Going Concern Uncertainty Recurring losses, a significant accumulated deficit, and negative working capital raise substantial doubt about the company's ability to continue as a going concern Financial Position as of March 31, 2025 | Metric | Value ($) | | :--- | :--- | | Cash Balance | $2,386,381 | | Working Capital Deficit | ($2,736,656) | | Accumulated Deficit | ($18,480,439) | Results of Operations 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 customers137 - Gross profit margin decreased slightly from 19% to 17% due to transition costs for the new Peru Facility138 Liquidity and Capital Resources 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 sales15018 Controls and Procedures 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, 2025156 Part II Legal Proceedings and Other Items 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 effect159 - As a "smaller reporting company," the company is not required to provide Item 1A. Risk Factors information160 Exhibits 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 Corporation165166167