BranchOut Food (BOF) - 2025 Q3 - Quarterly Report

Revenue and Profitability - Net revenue for the three months ended September 30, 2025, was $3,220,027, an increase of $1,038,532, or 48%, compared to $2,181,495 for the same period in 2024[180] - Gross profit for the three months ended September 30, 2025, was $569,550, with a gross margin of 17.7%, up from a gross profit of $336,340 and a margin of 15.4% in 2024[181] - For the nine months ended September 30, 2025, net revenue was $9,713,287, an increase of $4,701,790, or 94%, compared to $5,011,497 for the same period in 2024[193] - Cost of goods sold for the three months ended September 30, 2025, was $2,650,477, an increase of $805,322, or 44%, compared to $1,845,155 in 2024[181] - Cost of goods sold for the nine months ended September 30, 2025, was $7,984,763, an increase of 125% from $4,242,810 for the same period in 2024, resulting in a gross profit of $1,728,524 and a gross margin of 17.8%[194] Losses and Expenses - Operating loss for the three months ended September 30, 2025, was $1,427,504, compared to an operating loss of $903,155 for the same period in 2024, an increase of $524,349[179] - Net loss for the three months ended September 30, 2025, was $1,572,552, an increase of $301,747, or 24%, compared to a net loss of $1,270,805 in 2024[190] - General and administrative expenses for the three months ended September 30, 2025, were $897,512, an increase of $580,824, or 183%, compared to $316,688 in 2024[183] - General and administrative expenses rose to $2,204,559 for the nine months ended September 30, 2025, a 231% increase from $666,600 in 2024, with significant increases in idle capacity and research and development costs[196] - Research and development expenses surged by 1,352% to $208,265 in 2025 from $14,348 in 2024, reflecting the company's focus on innovation[197] - Net loss for the nine months ended September 30, 2025, was $4,094,090, a 25% increase from $3,264,326 in 2024, attributed to scaling up production at the new manufacturing facility[203] Cash Flow and Assets - Net cash used in operating activities increased by 55% to $5,064,017 in 2025 from $3,259,049 in 2024, primarily due to a rise in accounts receivable and prepaid inventory[207] - Current assets as of September 30, 2025, were $5,460,580, compared to $4,916,614 as of December 31, 2024, indicating improved liquidity[205] - Total liabilities decreased to $9,544,563 as of September 30, 2025, from $10,514,292 as of December 31, 2024, reflecting a reduction in current liabilities[205] - Cash provided by financing activities was $4,093,929 for the nine months ended September 30, 2025, a decrease of 29% from $5,767,938 in 2024, due to principal repayments on notes payable[209] Operational Costs - The company incurred idle capacity costs of $368,586 for the three months ended September 30, 2025, due to the opening of the new production facility in Pisco, Peru[184] - Shipping and handling expenses increased by 35% to $421,313 in 2025 from $311,073 in 2024, driven by higher sales volumes[200] - Advertising and promotions expenses rose by 159% to $579,507 in 2025 from $223,801 in 2024, largely due to increased in-store product demonstrations[201] Future Plans and Technology - The company plans to leverage its proprietary GentleDry™ Technology to enhance product quality and efficiency, supported by over 17 patents[170] - The lease for the Peru Facility requires monthly payments starting at $8,000 for the first two years, increasing to $25,000 thereafter, with a buy-out option of $1,865,456[174]