What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-31 compared with 2025-04-15 · 1105 added, 1257 removed, 281 unchanged (89% of the section changed)

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THE YEARS ENDED DECEMBER 31, 2025 AND 2024

of Independent Registered Public Accounting Firm, M&K CPAS, PLLC (PCAOB ID:

Balance Sheets as of December 31, 2024 and 2023

Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023

Statement of Stockholders’ Equity for the years ended December 31, 2024 and 2023

Statements of Cash Flows for the years ended December 31, 2024 and 2023

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm, M&K CPAS, PLLC (PCAOB ID:

Consolidated Balance Sheets as of December 31, 2025 and 2024

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024

Consolidated Statement of Stockholders’ Equity for the years ended December 31, 2025 and 2024

Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2025

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders

BranchOut Food, Inc.

on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of BranchOut Food, Inc.

(the Company) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the years ended December 31, 2024 and 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years ended December 31, 2024 and 2023, in conformity with accounting principles generally accepted in the United States of America .

accompanying financial statements have been prepared assuming the Company will continue as a going concern.

As discussed in Note 2

to the financial statements, the Company has incurred recurring losses from operations resulting in an accumulated deficit, and had a

working capital deficit as of December 31, 2024 which raises substantial doubt about its ability to continue as a going concern.

have audited the accompanying consolidated balance sheets of BranchOut Food, Inc.

(the Company) as of December 31, 2025 and 2024, and the related consolidated statements of

operations and comprehensive loss, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively

referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly,

in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and

its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

in Note 2 to the consolidated financial statements, the company has incurred recurring losses from operations and had an accumulated

deficit and a working capital deficit as of December 31, 2025, which raises substantial doubt about its ability to continue as a going

Management’s plans regarding these matters are also described in Note 2.

The financial statements do not include any

adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

The consolidated financial statements do not

include any adjustments that might result from the outcome of this uncertainty.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits,

we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and the significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe our audits provide

a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated

or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial

statements and (2) involved are especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Going Concern

Due to the net loss for the year, the Company evaluated

the need for a going concern.

Auditing management’s evaluation of a going

concern can be a significant judgement given the fact that the Company uses management estimates on future revenues and expenses which

are not able to be substantiated.

As discussed in Note 2, the Company has a going concern

due to recurring net losses from operations resulting in an accumulated deficit and working capital at December 31, 2024.

To evaluate the appropriateness of the going concern,

we examined and evaluated the financial information along with management’s plans to mitigate the going concern and management’s

disclosure on going concern.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

used and the significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe our audits provide a reasonable basis for our opinion.

critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that

was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material

to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication

of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are

not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or

disclosures to which it relates.

to the net loss for the year, the Company evaluated the need for a going concern.

management’s evaluation of a going concern can be a significant judgement given the fact that the Company uses management estimates

on future revenues and expenses which are not able to be substantiated.

discussed in Note 2, the Company has a going concern due to its insufficient cash balance and accumulated net losses.

evaluate the appropriateness of the going concern, we examined and evaluated the financial information along with management’s

plans to mitigate the going concern and management’s disclosure on going concern.

M&K CPAS, PLLC

have served as the Company’s auditor since 2021.

Woodlands, TX

PCAOB ID 2738

We have served as the Company’s auditor since

The Woodlands, TX

BALANCE SHEETS

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Advances on inventory purchases

Other current assets

Prepaid expenses and current assets

Total current assets

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Right-of-use assets

Other receivable, net of current portion

Note receivable

Liabilities and Stockholders’

Liabilities and Stockholders’ Equity

Current liabilities:

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Other current liabilities

Convertible notes payable,

related parties, net of discounts

Notes payable, current

Notes payable, related

Notes payable, current

Finance lease liability,

current portion

Convertible notes payable, related parties, net of discounts, current portion

Equipment notes payable, current portion

Notes payable, related parties

Notes payable, current portion

Operating lease liability, current portion

Finance lease liability, current portion

Total current liabilities

Notes payable, net of current portion

Notes payable

Equipment notes payable, net of current portion

Operating lease liability, net of current portion

Finance lease liability,

net of current portion

Finance lease liability, net of current portion

Total Liabilities

Stockholders’ Equity:

Preferred stock, $ 0.001

par value, 8,000,000 shares authorized;

Preferred stock, $ 0.001 par value, 8,000,000 shares authorized;

no shares issued and outstanding

Common stock, $ 0.001 par

value, 80,000,000 shares authorized;

8,424,600 and 4,044,252 shares issued and outstanding at December 31, 2024 and 2023, respectively

Common stock, $ 0.001 par value, 80,000,000 shares authorized;

13,385,459 and 8,424,600 shares issued

and outstanding at December 31, 2025 and 2024, respectively

Additional paid-in capital

Accumulated other comprehensive

Accumulated other comprehensive income (loss)

Accumulated deficit

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( 17,562,057 )

Total Stockholders’

Total Liabilities and

Stockholders’ Equity

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

accompanying notes are an integral part of these financial statements.

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Cost of goods sold

profit (loss)

Operating expenses:

and administrative

operating expenses

General and administrative

Salaries and wages

Professional fees

Shipping and handling

Advertising and promotions

Total operating expenses

Operating loss

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Interest income

other income (expense)

Interest expense

Total other income (expense)

$ ( 6,124,672 )

$ ( 4,751,516 )

Other comprehensive loss:

on foreign currency translation

Net other comprehensive

Other comprehensive income (loss):

Gain (loss) on foreign currency translation

Net other comprehensive loss

$ ( 6,089,226 )

$ ( 4,760,097 )

Weighted average common

shares outstanding - basic and diluted

Net loss per common

share - basic and diluted

Weighted average common shares outstanding - basic and diluted

Net loss per common share - basic and diluted

accompanying notes are an integral part of these financial statements.

STATEMENT OF STOCKHOLDERS’ EQUITY

Preferred Stock

Comprehensive

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$ ( 12,810,541 )

$ ( 5,139,728 )

Common stock issued pursuant to initial public

Common stock issued for services

Stock options issued for services

Common stock issued for debt conversions

Common stock warrants granted to note holders

pursuant to debt financing

Issuance of common stock in secondary public offering, net of issuance costs

Issuance of common stock

under ATM program, net of issuance costs

Issuance of common stock

units to related parties

Issuance of common stock

Stock-based compensation

Issuance of warrants in connection with debt financing

Fair value adjustment related

to warrant modification

Foreign currency translation

( 4,751,516 )

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$ ( 17,562,057 )

$ ( 12,810,541 )

Common stock issued pursuant to secondary public

Common stock issued pursuant to ATM program

- Authorized shares, 1,500,000 shares

- Unissued shares, 182,693 shares

Common stock units sold to related parties

Common stock issued for services

Stock options issued for services

Common stock warrants granted to note holders

pursuant to debt financing

Amended warrants

Loss on foreign currency translation

Issuance of common stock

under ATM program, net of issuance costs

Issuance of common stock upon

exercise of warrant related to

convertible debt

Issuance of common stock and warrants in underwritten offering, net of issuance costs

Issuance of common stock

upon exercise of warrants

Stock-based compensation

Fair value adjustment related

to warrant modification

Foreign currency translation

( 6,124,672 )

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$ ( 23,686,729 )

$ ( 17,562,057 )

accompanying notes are an integral part of these financial statements.

STATEMENTS OF CASH FLOWS

For the Years Ended

Cash flows from operating

For the Years Ended December 31,

Cash flows from operating activities

$ ( 6,124,672 )

$ ( 4,751,516 )

Adjustments to reconcile

net loss to net cash used in operating

Bad debts expense

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation expense

Bad debts expense

Amortization of debt discounts

Impairment of assets

Common stock issued for

Options and warrants issued

Amended warrants

Decrease (increase) in

Provision for prepaid inventory

Impairment of note receivable

Common stock issued for services

Options and warrants issued for services

Fair value adjustment related to warrant modification

Decrease (increase) in assets:

Accounts receivable

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( 1,593,730 )

Other current assets

Prepaid expenses and other current assets

Right-of-use asset

Other term asset and receivable

( 1,947,483 )

Increase (decrease) in

Increase (decrease) in liabilities:

Accounts payable

Accounts payable, related

Accounts payable, related parties

Accrued expenses

Operating lease liability

Net cash used in operating

Net cash used in operating activities

( 6,999,712 )

( 4,859,816 )

Cash flows from investing

Purchase of property and

Cash flows from investing activities

Purchase of property and equipment

( 2,847,207 )

Payments received on notes

Net cash used in investing

Payments received on notes receivable

Net cash used in investing activities

( 2,822,561 )

Cash flows from financing

Payment of deferred offering

Proceeds received on convertible

notes payable, related parties

Proceeds received on convertible

notes payable, unrelated parties

Proceeds received on notes

Repayment of notes payable

Cash flows from financing activities

Proceeds from convertible notes payable, related parties

Proceeds from notes payable, related party

Repayments on notes payable, related parties

( 2,760,000 )

Proceeds received on notes

payable, related parties

Repayment of notes payable,

related parties

Repayments on revolving

line of credit

Principal payments on finance

Proceeds from sale of common

Net cash provided by financing

Effect of exchange rate

changes on cash

Repayments on notes payable

Principal payments on finance lease

Proceeds from issuance of common stock

Proceeds from exercise of warrants

Payment of deferred offering costs

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net increase in cash

( 1,713,174 )

Cash - beginning of period

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Non-cash investing and financing transactions:

Equipment purchased with

debt financing

Relative fair value of

warrants issued as a debt discount

Relative fair value of

shares issued on debt conversions

Initial recognition of

right-of-use assets and lease liabilities

Equipment purchased with debt financing

Relative fair value of warrants issued as a debt discount

Relative fair value of warrants issued in connection with sale of common stock

Initial recognition of right-of-use assets and lease liabilities

accompanying notes are an integral part of these financial statements.

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1 – Nature of Business

(“BranchOut,” the “Company,” “we,” “our” or “us”) was incorporated

as Avochips Inc.

in Oregon on February 21, 2017, and converted into AvoLov, LLC, an Oregon limited liability company, on November 2,

On November 19, 2021, the Company converted from an Oregon limited liability company into BranchOut Food Inc., a Nevada corporation.

The Company is engaged in the development, marketing, sale, and distribution of plant-based, dehydrated fruit and vegetable snacks and

The Company’s products are currently manufactured at its new production facility that commenced production in Pisco Peru

in December 2024, and is supported by contract manufacturers, as necessary.

The Company’s products are manufactured using a new

proprietary dehydration technology licensed by the Company.

The Company’s customers are primarily located throughout the United

2 – Basis of Presentation

Food Inc., a Nevada corporation, together with its Peruvian subsidiary (collectively, “BranchOut,” the “Company,”

“we,” “our” or “us”), is engaged in the development, marketing, sale and distribution of plant-based,

dehydrated fruit and vegetable snacks and powders manufactured at a 50,000 square foot manufacturing facility leased by the Company in

April 2024, we formed BranchOut Food Sucursal Peru, our Peruvian wholly-owned subsidiary, to operate our manufacturing facility in Pisco

Peru, which commenced operations in December 2024.

Our products are produced using our advanced dehydration platform licensed exclusively

from EnWave Corporation (“EnWave”) to create our private label, branded, and bulk wholesale products.

We use proprietary

GentleDry™ Technology optimized to preserve taste, texture, color, and nutrients.

Our GentleDry™ Technology is protected

by over 17 patents.

Prior to operating our manufacturing facility, we relied on contract manufacturers.

2 – Basis of Presentation and Summary of Significant Accounting Policies

of Accounting

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and ownership at December 31, 2025:

Food Sucursal Peru (2)

company in the form of a corporation.

wholly-owned subsidiary of BranchOut Food Inc.

Name of Entity

BranchOut Food Sucursal Peru (2)

Holding company in the form of a corporation.

Peruvian wholly-owned subsidiary of BranchOut Food Inc.

in the form of a branch.

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are located in Bend, Oregon.

Public Offering

June 2023, the Company completed its initial public offering (“IPO”) in which it issued and sold 1,190,000 shares of its

common stock at a price of $ 6.00 per share pursuant to an Underwriting Agreement between the Company and Alexander

Capital, L.P.

(the “Underwriter”) .

The Company received net proceeds of $ 6,226,000 , after deducting underwriters’

discounts and commissions and before consideration of other issuance costs.

In connection with the IPO, a total of $ 6,029,204 of convertible

debt, consisting of $ 5,526,691 of principal and $ 502,513 of interest, was converted into 1,572,171 shares of common stock, inclusive

of $ 179,687 , consisting of $ 165,000 of principal and $ 14,687 of interest, that converted into 43,562 shares of common stock issued upon

the conversion of debts held by related parties.

to the Underwriting Agreement, the Company also issued to the Underwriter a Common Stock Purchase Warrant to purchase up to 82,110 shares

of Common Stock at an exercise price of $ 7.20 , which may be exercised for a five-year period beginning December 18, 2023.

TO CONSOLIDATED FINANCIAL STATEMENTS

to the IPO, all deferred offering costs were capitalized in other noncurrent assets on the balance sheets.

Deferred offering costs of

$ 1,283,954 , primarily consisting of accounting, legal, and other fees related to the Company’s IPO, were offset against the IPO

proceeds upon the closing of the IPO in June 2023.

June 15, 2023, the Company effected a 2.5-for-1 reverse stock split of its outstanding shares of capital stock.

There was no preferred

stock outstanding prior to or after the reverse stock split.

All issued and outstanding shares of common stock have been adjusted in

these condensed financial statements, on a retrospective basis, to reflect the reverse stock split for all periods presented, as well

as all common stock warrants and stock option awards which, by the terms thereof, were subject to adjustment in connection with the reverse

The par value of the common stock was not adjusted by the reverse stock split.

shown in the accompanying financial statements, the Company has incurred recurring losses from operations resulting in an accumulated

deficit of $ 17,562,057 , and a working capital deficit of $ 3,897,382 as of December 31, 2024.

The Company’s $ 2,329,452 of cash on

hand at December 31, 2024 may not be sufficient to sustain operations.

shown in the accompanying consolidated financial statements, the Company has incurred recurring losses from operations resulting in an

accumulated deficit of $ 23,686,729 , and a working capital deficit of $ 584,240 as of December 31, 2025.

The Company’s $ 616,278 of

cash on hand at December 31, 2025 may not be sufficient to sustain operations.

These factors raise substantial doubt about the Company’s

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Subsequent to December 31, 2025, the Company received gross proceeds of approximately $ 1.5 million

from sales of common stock in an “At-the-Market” registered offering.

Although the Company anticipates that its results of

operations will improve substantially as a result of the recent launch of its new facility in Peru, there can be no assurance in that

from the sale of common stock through an at-the-market registered offering and borrowed a $ 1.5 million under a secured promissory note.

Management is actively pursuing new customers to increase revenues.

In addition, the Company is currently seeking additional

sources of capital to fund short term operations.

In addition, the Company is currently seeking additional sources

of capital to fund short-term operations.

Management believes these factors will contribute toward achieving profitability.

accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going

financial statements do not include any adjustments that might result from the outcome of any uncertainty as to the Company’s ability

to continue as a going concern.

These financial statements also do not include any adjustments relating to the recoverability and classification

of recorded asset amounts or amounts and classifications of liabilities that might be necessary should the Company be unable to continue

as a going concern.

3 – Summary of Significant Accounting Policies

accompanying consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as

to the Company’s ability to continue as a going concern.

These consolidated financial statements also do not include any adjustments

relating to the recoverability and classification of recorded asset amounts, or amounts and classifications of liabilities, that might

be necessary should the Company be unable to continue as a going concern.

Reclassifications

prior period amounts have been reclassified to conform to the current period presentation.

These reclassifications had no impact on previously

reported net loss, total assets, total liabilities, stockholders’ equity, or cash flows, but affected the classification of certain

amounts within the consolidated statements of operations.

preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that may affect the

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would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

TO CONSOLIDATED FINANCIAL STATEMENTS

820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid

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in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that

are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

3 inputs to valuation methodology are unobservable and significant to the fair measurement.

Level 1 inputs

to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 inputs to the valuation

methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset

or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 inputs to valuation

methodology are unobservable and significant to the fair measurement.

assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

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the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 , under current regulations.

The Company had $ 1,555,223

and $ 407,789 in excess of FDIC insured limits on December 31, 2024 and 2023, respectively, and has not experienced any losses in such

receivable is carried at their estimated collectible amounts.

Trade accounts receivable is periodically evaluated for collectability

based on past credit history with customers and their current financial condition.

The Company had an allowance for doubtful accounts

of $ 25,586 at December 31, 2024.

No allowance for doubtful accounts was necessary at December 31, 2023.

Company’s products consist of pre-packaged and bulk-dried fruit and vegetable-based snacks, powders and ingredients purchased from

contract-manufacturers in Chile and/or Peru.

The Company’s contract manufacturer in Peru uses equipment purchased by the Company

in its manufacturing process.

Raw materials consist of packaging materials.

Appropriate consideration is given to obsolescence, excessive

levels, deterioration, and other factors in evaluating net realizable value.

No reserve for obsolete inventories has been recognized.

Inventory, consisting of raw materials and finished goods are stated at the lower of cost or net realizable value using the average cost

valuation method, at December 31, 2024 and 2023, consisted of the following:

Schedule of Inventory

Raw materials

Finished goods

Company had prepaid inventory advances on products in the amount of $ 123,792 and $- 0 - as of December 31, 2024 and 2023, respectively.

Advances of 70 % of estimated finish product costs are made to enable manufacturer’s purchase of raw materials to produce finished

The remaining 30 % is paid upon receipt of finished goods.

TO CONSOLIDATED FINANCIAL STATEMENTS

The Company had $ 250,014 and

$ 1,555,223 in excess of FDIC insured limits on December 31, 2025 and 2024, respectively, and has not experienced any losses in such accounts.

and Development

operate in a fast-moving category shaped by shifting consumer preferences, requiring continuous innovation and new product development.

To support this, we rely on our proprietary GentleDry™ Technology, an advanced dehydration platform licensed exclusively from EnWave.

We expect to continue investing in R&D as we scale our GentleDry™ product portfolio and bring new, innovative offerings to

market that align with evolving consumer needs.

and development costs include salaries, building costs, utilities, administrative expenses and other corporate costs.

For the year ended

December 31, 2025, our research and development expenses totaled $ 269,994 , compared to $ 18,175 for the same period in 2024.

and Equipment

and equipment are stated at the lower of cost or estimated net recoverable amount.

and equipment are stated at cost, less accumulated depreciation and impairment losses.

The cost of property, plant and equipment is depreciated

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Equipment and machinery

Leasehold improvements

Construction in progress

in progress consists of costs incurred on machinery, equipment, and facility improvements that have not yet been placed into service.

These costs are not depreciated until the related assets are completed and placed into service, at which time they are reclassified to

the appropriate property and equipment category and depreciation begins.

and maintenance expenditures are charged to operations as incurred.

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the cost and related accumulated depreciation are eliminated, and any resulting gain or loss is reflected in operations.

expense was $ 171,873 and $ 223,856 for the years ended December 31, 2024 and 2023, respectively.

For the year ended, December 31, 2024,

a total of $ 34,034 of depreciation was included in the inventoried production costs, which gets expensed as Cost of Goods Sold as the

inventory is sold.

of Long-Lived Assets

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carrying value exceeds discounted cash flows of future operations.

indefinite-lived brand names and trademarks acquired and are assigned an indefinite life as we anticipate that these brand names will

contribute cash flows to the Company perpetually.

We evaluate the recoverability of intangible assets periodically by considering events

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internally developed trademarks.

Company is party to a license agreement under which it is licensed to utilize certain technology and production equipment developed and

manufactured by another company, relating on an exclusive basis to avocado products and on a non-exclusive basis to other products.

license is not discernible from the equipment;

therefore, the license costs have been capitalized and depreciated over the useful life

of the equipment.

The license agreement also entitles the licensor to a royalty on all revenue from the sale of products produced using

the equipment.

These royalties are recognized as royalty expenses as the products are sold.

There was a total of $ 41,673 of royalty payments

made during the year ended December 31, 2024, and no ne during the year ended December 31, 2023.

Any future minimum royalty payments or

equipment purchases under this license agreement are an unrecognized commitment as they relate to retaining exclusivity of the avocado

products going forward and the Company can elect not to pay as disclosed in Note 17 to the financial statements included in this 10-K.

Company evaluates convertible notes payable, stock options, stock warrants and other contracts to determine if those contracts or embedded

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to a liability account at the fair value of the instrument on the reclassification date.

TO CONSOLIDATED FINANCIAL STATEMENTS

Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customer .

Under ASC 606, the Company recognizes

revenue from the sale of its plant-based snack products in accordance with a five-step model in which the Company evaluates the transfer

of promised goods or services and recognizes revenue when customers obtain control of promised goods or services in an amount that reflects

the consideration which the Company expects to be entitled to receive in exchange for those goods or services.

To determine revenue recognition

for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate

the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance

The Company has elected, as a practical expedient, to account for the shipping and handling as fulfillment costs, rather

than as separate performance obligations, and the related costs are recorded as selling expenses in general and administrative expenses

in the statement of operations.

Revenue is reported net of applicable provisions for discounts, returns and allowances.

Methodologies

for determining these provisions are dependent on customer pricing and promotional practices.

The Company records reductions to revenue

for estimated product returns and pricing adjustments in the same period that the related revenue is recorded.

These estimates are based

on industry-based historical data, historical sales returns, if any, analysis of credit memo data, and other factors known at the time.

Company’s sales are predominantly generated from the sale of finished products to retailers, and to a lesser extent, direct to

consumers through third party website platforms.

These sales contain a single performance obligation, and revenue is recognized at a

single point in time when ownership, risks and rewards transfer.

Typically, this occurs when the goods are received by the retailer or

customer, or when the title of goods is exchanged.

Revenues are recognized in an amount that reflects the net consideration the Company

expects to receive in exchange for the goods.

Company promotes its products with advertising, consumer incentives and trade promotions.

These programs include discounts, slotting

fees, coupons, rebates, in-store display incentives and volume-based incentives.

Customer trade promotion and consumer incentive activities

are recorded as a reduction to the transaction price based on amounts estimated as being due to customers and consumers at the end of

The Company derives these estimates based principally on historical utilization and redemption rates.

The Company does not

receive a distinct service in relation to the advertising, consumer incentives and trade promotions.

Payment terms in the Company’s

invoices are based on the billing schedule established in contracts and purchase orders with customers.

such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenues as follows:

Schedule of Revenue

Gross revenue

slotting, discounts,

and allowances

of Goods Sold

of goods sold represents costs directly related to the purchase, production and manufacturing of the Company’s products.

include purchase costs, product development, freight-in, packaging, and print production costs.

Company expenses the cost of advertising and promotions as incurred.

Advertising and promotions expense was $ 311,586 and $ 162,048 for

the years ended December 31, 2024 and 2023, respectively.

Company accounts for equity instruments issued to employees and non-employees in accordance with the provisions of ASC 718 Stock Compensation

All transactions in which the consideration provided in exchange for the purchase of goods or services consists

of the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the

equity instrument issued, whichever is more reliably measurable.

Company issued stock-based compensation in the amount of $ 704,699 and $ 258,574 for the years ended December 31, 2024 and 2023, respectively.

TO CONSOLIDATED FINANCIAL STATEMENTS

and Diluted Loss Per Share

basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding.

net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average

number of common shares outstanding plus potential dilutive securities.

For the years ended December 31, 2024 and 2023, potential dilutive

securities had an anti-dilutive effect and were not included in the calculation of diluted net loss per common share.

Company recognizes deferred tax assets and liabilities based on differences between the financial reporting and tax basis of assets and

liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered.

The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more

likely than not.

Tax Positions

accordance with ASC 740, Income Taxes , the Company recognizes the tax benefit from an uncertain tax position only if it is more

likely than not that the tax position will be capable of withstanding examination by the taxing authorities based on the technical merits

of the position.

These standards prescribe a recognition threshold and measurement attribute for the financial statement recognition

and measurement of a tax position taken or expected to be taken in a tax return.

These standards also provide guidance on de-recognition,

classification, interest and penalties, accounting in interim periods, disclosure, and transition.

taxing authorities periodically audit the Company’s income tax returns.

These audits include questions regarding the Company’s

tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions.

In evaluating

the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for

probable exposures.

A number of years may elapse before a particular matter, for which an allowance has been established, is audited,

and fully resolved.

The Company has not yet undergone an examination by any taxing authorities.

assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s

various filing positions.

Accounting Pronouncements

time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted

by the Company as of the specified effective date.

If not discussed, management believes that the impact of recently issued standards,

which are not yet effective, will not have a material impact on the Company’s financial statements upon adoption.

of goods sold includes the direct costs associated with the production and manufacture of the Company’s products.

Production costs

primarily consist of direct raw materials, direct labor, and manufacturing overhead.

These costs are capitalized into inventory and recognized

as cost of goods sold when the related products are sold.

Manufacturing

overhead is allocated to inventory based on production capacity.

Overhead costs include factory rent, utilities, depreciation, and other

factory-related expenses.

The Company allocates fixed manufacturing overhead to inventory based on the normal capacity of the production

facilities in accordance with ASC 330, Inventory.

Costs associated with abnormal levels of idle capacity or other abnormal production

costs are expensed as incurred.

Company periodically reviews production capacity and manufacturing overhead allocations to ensure that inventory costs reflect normal

production levels.

and Promotions Costs

Company incurs advertising and promotional costs related primarily to product demonstrations, trade shows, and other marketing activities

intended to promote the Company’s products and brand awareness.

Advertising and promotional costs are expensed as incurred and

are included in selling, general and administrative expenses in the consolidated statements of operations.

Company accounts for stock-based compensation in accordance with ASC 718, Stock Compensation.

Compensation expense for equity awards

is measured at the grant-date fair value and recognized over the requisite service period, generally the vesting period of the award.

The Company estimates the fair value of stock options using a valuation model that incorporates assumptions such as expected volatility,

expected term, and the risk-free interest rate.

Currency Translation

functional currency of the Company’s foreign subsidiary in Peru is the Peruvian sol.

Assets and liabilities of foreign operations

are translated into U.S.

dollars at exchange rates in effect at the balance sheet date.

Revenues and expenses are translated at average

exchange rates prevailing during the period.

adjustments resulting from this process are recorded in accumulated other comprehensive income (loss) as a component of stockholders’

gains and losses resulting from foreign currency transactions denominated in currencies other than the functional currency are recognized

in the consolidated statements of operations as incurred.

Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires the recognition of deferred tax assets and

liabilities for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the

tax bases of assets and liabilities, as well as for operating loss and tax credit carryforwards.

Deferred tax assets and liabilities

are measured using enacted tax rates expected to apply in the periods in which the temporary differences are expected to reverse.

valuation allowance is recorded to reduce deferred tax assets to the amount that management believes is more likely than not to be realized.

In assessing the need for a valuation allowance, management considers all available positive and negative evidence, including historical

operating results, expectations of future taxable income, and the reversal of existing taxable temporary differences.

Due to the Company’s

cumulative losses since inception, management has determined that it is more likely than not that the Company’s deferred tax assets

will not be realized and has recorded a full valuation allowance.

Company recognizes the financial statement benefit of a tax position only after determining that it is more likely than not that the

position will be sustained upon examination by the relevant taxing authority based on the technical merits of the position.

For tax positions

meeting the more-likely-than-not recognition threshold, the amount recognized in the financial statements is the largest benefit that

is greater than 50 percent likely of being realized upon ultimate settlement.

The Company evaluates uncertain tax positions on a periodic

basis and has determined that there are no uncertain tax positions requiring recognition as of December 31, 2025 and 2024.

Company recognizes interest and penalties related to uncertain tax positions, if any, as a component of income tax expense.

and Diluted Net Loss Per Share

Company computes basic net loss per common share by dividing net loss attributable to common stockholders by the weighted average number

of common shares outstanding during the period.

Diluted net loss per common share is computed by dividing net loss attributable to common

stockholders by the weighted average number of common shares outstanding plus the effect of potentially dilutive common shares outstanding

during the period using the treasury stock or if-converted methods, as applicable.

the years ended December 31, 2025 and 2024, the inclusion of potentially dilutive securities would have been anti-dilutive due to the

Company’s net loss;

therefore, diluted net loss per share is the same as basic net loss per share.

Issued Accounting Pronouncements

Company considers the applicability and impact of all Accounting Standards Updates (“ASUs”) issued by the Financial Accounting

Standards Board (“FASB”).

ASUs not discussed below were assessed and determined to be either not applicable to the Company

or not expected to have a material impact on the Company’s consolidated financial statements.

Adopted Accounting Standards

November 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-07, “S egment Reporting (Topic 280):

Improvements to Reportable Segment Disclosure.

” The ASU updated reportable segment disclosure requirements, primarily through

requiring enhanced disclosures about significant segment expenses and information used to assess segment performance.

The Company adopted

2023-07 during the year ended December 31, 2024.

See Note 22 “ Segment Reporting ” in the accompanying Notes

to the Consolidated Financial Statements for additional information.

Standards Not Yet Adopted

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The amendments

enhance reportable segment disclosure requirements, including expanded disclosures regarding significant segment expenses and information

regularly provided to the chief operating decision maker used to assess segment performance.

The Company adopted ASU 2023-07 during the

year ended December 31, 2024.

See Note 17 – Segment Reporting for additional information.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

amendments in this ASU add specific requirements for income tax disclosures to improve transparency and decision usefulness.

in ASU 2023-09 requires that public business entities disclose specific categories in the income tax rate reconciliation and provide

additional qualitative information for reconciling items that meet a quantitative threshold.

In addition, the amendments in ASU 2023-09

require that all entities disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes and disaggregated

by individual jurisdictions.

The ASU also includes other disclosure amendments related to the disaggregation of income tax expense between

federal, state and foreign taxes.

For public business entities, the amendments in this update are effective for annual periods beginning

after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available

for issuance.

The amendments in this update should be applied on a prospective basis and retrospective application is permitted.

Company is currently evaluating this ASU to determine its impact on the Company’s disclosures.

TO CONSOLIDATED FINANCIAL STATEMENTS

November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03 and in January 2025, the FASB issued ASU 2025-01,

“ Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of

Income Statement Expenses.

” The guidance requires disclosures about specific expense categories, including but not limited

to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses.

The ASU is effective in the first

annual reporting period beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December

The Company is currently assessing the effect that adoption of this guidance will have on its Consolidated Financial Statements.

4 – Related Party Transactions

Convertible Note

July 15, 2024, the Company entered into a Securities Purchase Agreement (as amended, the “SPA”) with Daniel L.

Kaufman, pursuant

Kaufman agreed to purchase from the Company, in a private placement (i) a 12 % Senior Secured Convertible Promissory Note

in the principal amount of up to $ 3,400,000 (the “Convertible Note”), convertible into shares of the Company’s common

stock at a fixed price of $ 0.7582 per share of common stock, a (ii) a warrant to purchase 1,000,000 shares of common stock at an exercise

price of $ 1.00 per share (the “$ 1.00 Warrant”), and (iii) a warrant to purchase 500,000 shares of common stock at an exercise

price of $ 1.50 per share (the “$ 1.50 Warrant” and, together with the $ 1.00 Warrant, the “Warrants” and together

with the Convertible Note, the “Purchased Securities”), in consideration of an initial loan in the principal amount of $ 2,000,000

(the “Initial Loan”) made to the Company under the Convertible Note, subject to the terms and conditions thereof.

19, 2024, the Company, Mr.

Kaufman and Kaufman Kapital LLC (“Kaufman Kapital”) entered into an amendment to the SPA, which

among other things, replaced Mr.

Kaufman with Kaufman Kapital as the “Investor” under the SPA.

July 24, 2024, the Company issued the Purchased Securities to Kaufman Kapital in consideration of making the Initial Loan to the Company.

On December 9, 2024, Kaufman Kapital made an additional loan to the Company under the Convertible Note in the amount of $ 1,400,000 .

Convertible Note matures on the earlier of (i) December 31, 2025 , (ii) the sale by the Company of $ 5,000,000 of equity or debt securities

in a single transaction or series of related transactions (excluding certain specified transactions), or (iii) the closing of a change

of control transaction as provided in the Convertible Note.

Loans outstanding under the Convertible Note bear interest at an initial

rate of 12 % per annum, and together with accrued principal are convertible into common stock.

Company’s obligations under the Convertible Note are secured by a lien granted to Kaufman Kapital on substantially all of the Company’s

assets pursuant to a Security Agreement entered between the Company and Kaufman Kapital (the “Security Agreement”).

the Convertible Note includes affirmative and negative covenants, events of defaults and other terms and conditions, customary in transactions

of this nature.

Promissory Note

August 30, 2024, the Company borrowed $ 1,200,000 from Kaufman Kapital pursuant to a Senior Secured Promissory Note in the principal amount of $ 1,200,000

(the “Note”) issued by the Company to Kaufman Kapital.

The Note matures on June

30, 2025 , as amended.

The loan under the Note bears interest at a rate of 15 %

The Company’s obligations under the Note are secured by a lien on substantially all of the Company’s assets pursuant

to the Security Agreement.

In addition, the Note includes affirmative and negative covenants, events of defaults and other terms and

conditions, customary in transactions of this nature.

Vision Promissory Notes

connection with the sale of the Purchased Securities to Kaufman Kapital LLC under the SPA, the Company entered into an Omnibus Amendment

to Note Documents with substantially all of the holders (the “Holders”) of the Company’s Senior Notes and Warrants

issued under that certain Subscription Agreement dated as of January 10, 2024, as amended, pursuant to which, among other things, (i)

the exercise price of the Warrants issued to the Holders was reduced from $ 2.00 to $ 1.00 , (ii) the outside maturity date of the Senior Notes held by the Holders was extended from December 31, 2024 to December 31, 2025 (subject to further extension in the event the maturity

date of the Convertible Note is extended), (iii) the Company’s obligation to make payments of principal under the Senior Notes

held by the Holders beginning July 1, 2024 has been eliminated, and instead all obligations of the Company under such Senior Notes will

be due in one lump sum on the maturity date of the Senior Notes, and (iv) the Company’s obligations under the Convertible Note

and liens granted to the holder thereof, will be pari passu with the Company’s obligations under the Senior Notes held by the Holders

and liens granted to the holders thereof.

The amendment warrants resulted in $ 89,949 of additional interest expense.

TO CONSOLIDATED FINANCIAL STATEMENTS

various dates from January 9, 2024 through May 22, 2024, the Company completed the sale of an aggregate $ 1,675,000 of Senior Secured

Promissory Notes (“Senior Notes”) and Warrants (“Warrants”) to purchase an aggregate of 518,750 shares of the

Company’s common stock, to a group of Investors (“Investors”) led by Eagle Vision Fund LP (“Eagle Vision”),

an affiliate of John Dalfonsi, CFO of the Company, pursuant to a subscription agreement between the Company and the Investors.

to the subscription agreements, Eagle Vision was paid aggregate cash fees in the amount of $ 177,500 upon the closing of the transactions

for due diligence fees in consideration of services rendered and to be rendered by Eagle Vision to the Company and the investors, including

conducting due diligence with respect to the Company, monitoring the performance by the Company of its obligations under the senior secured

notes, servicing the interest and principal payments for purchasers, engaging in ongoing discussions with the Company’s management

regarding the Company’s operations and financial condition, acting as collateral agent, and evaluating financial and non-financial

information related to the Company, which services are to be provided by Eagle Vision until the senior secured notes have been paid in

full, and an aggregate $ 35,000 of legal fees was paid to Investors’ counsel.

Notes mature on the earlier of December 31, 2025 , or the occurrence of a Qualified Subsequent Financing or Change of Control (as such

terms are defined in the Subscription Agreement) and bear interest at a rate of 15 % per annum.

In addition, the Notes are subject to

covenants, events of defaults and other terms and conditions set forth in the Subscription Agreement.

The Company’s obligations

under the Notes are secured by liens on substantially all of the Company’s assets pursuant to the terms of a Security Agreement

between the Company and the Investors.

Warrant is exercisable for a 10 ten-year period at an exercise price of $ 1.00 per share.

Offering Sale of Common Stock and Warrants

July 15, 2024, the Company entered into Subscription Agreements (the “Subscription Agreements”) with three related parties,

consisting of Eric Healy, the Company’s Chief Executive Officer;

Eagle Vision, an affiliate of John Dalfonsi, the Company’s

Chief Financial Officer;

and the Company’s President, pursuant to which such investors agreed to purchase $ 525,000 of “Units”

from the Company, each Unit consisting of (i) 100 shares of common stock, and (ii) a warrant to purchase 125 shares of common stock over

the following ten years at an exercise price of $ 1.00 per share, at a purchase price per Unit equal to $ 75.82 .

The Company completed

the sale of the Units to Eric Healy and the Company’s President on July 23, 2024, and the sale of the Units to Eagle Vision on

August 30, 2024, resulting in the issuance of an aggregate of 692,429 shares of common stock and warrants to purchase 865,536 shares

of common stock.

Stock Options Issued for Services

February 22, 2024, the Company granted options to purchase 140,000 shares of the Company’s common stock under its 2022 Equity Incentive

Plan (the “2022 Plan”), having an exercise price of $ 1.92 per share, exercisable over a 10 -year term, to the Company’s

The options vested immediately.

February 22, 2024, the Company granted options to purchase 75,000 shares of the Company’s common stock, having an exercise price

of $ 1.92 per share, exercisable over a 10 -year term, to the Company’s CFO.

The options vested immediately.

February 22, 2024, the Company also granted options to purchase an aggregate 79,166 shares of the Company’s common stock, having

an exercise price of $ 1.92 per share, exercisable over a 10 -year term, to a total of three of the Company’s directors.

vested immediately.

August 8, 2023, the Company granted options to purchase 30,000 shares of the Company’s common stock under the 2022 Plan, having

an exercise price of $ 6.00 per share, exercisable over a 10 -year term, to the then chairman of the audit committee and now, Chief Financial

The options vest monthly over a 1 one-year period.

August 8, 2023, the Company granted options to purchase 30,000 shares of the Company’s common stock under the 2022 Plan, having

an exercise price of $ 2.51 per share, exercisable over a 10 -year term, to one of its directors.

The options vest monthly over a 1 one-year

TO CONSOLIDATED FINANCIAL STATEMENTS

Stock Issued for Services

October 26, 2023, the Company issued 12,500 shares, restricted in accordance with Rule 144, to a consultant, who later became a Company

director, for services performed.

The aggregate fair value of the shares was $ 19,000 , based on the

closing traded price of the common stock on the date of grant .

5 – Formation of Subsidiary

April 26, 2024, the Company formed BranchOut Food Sucursal Peru, a wholly-owned subsidiary in Peru, in the form of a legal entity

called a branch, for the purpose of operating the 50,000

square-foot Peru Facility.

The Company began manufacturing products at the Peru Facility in December of 2024.

6 – Fair Value of Financial Instruments

FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date (an exit price).

The standard outlines a valuation framework and creates

a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures.

Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required

for items measured at fair value.

Company has cash, notes receivable, derivative liabilities and debts that must be measured under the fair value standard.

The Company’s

financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy.

The three levels are as

1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access

at the measurement date.

2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets

or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g.,

interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation

or other means (market corroborated inputs).

3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or

following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balances sheet as of December

31, 2024 and 2023:

Schedule of Valuation of Financial Instruments at Fair Value on a Recurring Basis

Value Measurements at December 31, 2024

Right-of-use-asset

Notes receivable

Convertible notes payable, related parties

net of $ 66,587 of discounts

Notes payable

Notes payable, related parties

Lease liabilities

Total assets and liabilities

$ ( 2,686,165 )

$ ( 3,521,286 )

TO CONSOLIDATED FINANCIAL STATEMENTS

Value Measurements at December 31, 2023

Right-of-use-asset

Notes receivable

Notes payable

Lease liability

Total assets and liabilities

were no transfers of financial assets or liabilities between Level 1 and Level 2 inputs for the years ended December 31, 2024 and 2023.

7 – Major Customers and Accounts Receivable

Company had certain customers whose revenue individually represented 10 % or more of the Company’s total net revenue, or whose accounts

receivable balances individually represented 10 % or more of the Company’s total accounts receivable, as follows:

the years ended December 31, 2024 and 2023, two customers accounted for 99 % and 90 % of net revenue, respectively, and 89 % and 85 % of

accounts receivable, respectively.

8 – Other Current Assets

current assets at December 31, 2024 and 2023, consisted of the following:

Schedule of Other Current Assets

The amendments require

enhanced income tax disclosures, including additional disaggregation within the effective tax rate reconciliation and disclosure of income

taxes paid by jurisdiction.

The Company adopted ASU 2023-09 during the year ended December 31, 2025.

See Note 12 – Income Taxes

for additional information.

Standards Not Yet Adopted

November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

(Subtopic 220-40), and in January 2025 issued ASU 2025-01, which clarified the effective date of ASU 2024-03.

The amendments require

public business entities to provide additional disclosures that disaggregate certain income statement expenses, including purchases of

inventory, employee compensation, depreciation, amortization, and selling expenses.

The guidance is effective for annual reporting periods

beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027.

is currently evaluating the impact of this guidance on its consolidated financial statement disclosures.

July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts

Receivable and Contract Assets.

The amendments introduce a practical expedient for estimating expected credit losses on current accounts

receivable and contract assets arising from transactions accounted for under ASC 606.

The guidance is effective for the Company beginning

January 1, 2026, with early adoption permitted.

The Company is currently evaluating the impact this update may have on its consolidated

financial statements.

3 - Revenue Recognition

Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers.

Revenue is recognized when control of promised

goods transfers to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods.

The Company generates revenue primarily from the sale of plant-based snack products and bulk-ingredient products to retailers and distributors,

and to a lesser extent from direct-to-consumer sales through third-party e-commerce platforms.

These arrangements typically contain a

single performance obligation, which is the delivery of finished goods to the customer.

is recognized at a point in time when control of the goods transfers to the customer, which generally occurs upon delivery to the retailer

or customer, or when title and risk of loss pass to the customer in accordance with the contractual shipping terms.

Revenue is recorded

net of variable consideration, including discounts, promotional allowances, returns, and other pricing adjustments.

Estimates of variable

consideration are recognized in the period the related revenue is recorded and are based on historical experience, contractual terms,

and other relevant factors.

These estimates are updated each reporting period as additional information becomes available.

Company promotes its products through trade promotions and consumer incentive programs, including discounts, slotting fees, coupons,

rebates, in-store display incentives, and volume-based incentives.

These amounts are recorded as reductions of revenue as they represent

variable consideration payable to customers or consumers and do not provide a distinct good or service to the Company.

Company has elected the practical expedient under ASC 606 to treat shipping and handling activities performed after control of goods

transfers to the customer as fulfillment activities rather than separate performance obligations.

Accordingly, shipping and handling

costs are recorded within selling expenses in general and administrative expenses in the consolidated statements of operations.

terms are generally established in contracts or purchase orders with customers.

such as slotting fees, sales discounts, and allowances are accounted for as a direct reduction of revenue as follows:

Schedule of Revenue

Gross revenue

slotting, discounts, and allowances

4 – Inventories

Company’s products consist of pre-packaged and bulk dried fruit and vegetable-based snacks, powders, and ingredients developed

at its manufacturing facility in Peru, as well as products purchased from contract manufacturers in Chile and Peru.

Raw materials consist

primarily of purchased fruits, vegetables, and packaging materials.

Inventory, consisting of raw materials, work in process, and finished

goods, is stated at the lower of cost or net realizable value using the weighted-average cost method.

Cost includes direct materials,

direct labor, manufacturing overhead, packaging, tariffs, and inbound freight necessary to bring products to their present condition

and location.

Manufacturing

overhead includes indirect labor, factory rent, utilities, depreciation, and other factory-related costs and is allocated to inventory

based on the normal production capacity of the facility.

Abnormal amounts of idle facility expense, freight, handling costs, or spoilage

are expensed as incurred and are not capitalized into inventory.

The Company evaluates inventory for excess quantities, obsolescence,

deterioration, and other factors in assessing net realizable value.

Inventory that is determined to be obsolete or expired is written

off in the period in which it is identified.

at December 31, 2025 and December 31, 2024 consisted of the following:

Schedule of Inventory

Raw materials

Work in progress

Finished goods

Total inventory

Company secures certain raw materials through advance payments to suppliers of up to 50 %.

The Company had advances on inventory purchases

for raw material in the amounts of $ 561,160 and $ 123,792 as of December 31, 2025 and December 31, 2024, respectively.

5 – Accounts Receivable, Net

receivable are stated at their estimated net realizable value.

The Company evaluates the collectability of trade receivables on an ongoing

basis and establishes an allowance for doubtful accounts as needed based on a combination of factors, including historical collection

experience, the financial condition of customers, specific account reviews, and current economic conditions.

Management believes the

allowance for doubtful accounts is adequate to cover expected credit losses.

The allowance for doubtful accounts was $ 25,586 at both

December 31, 2025 and December 31, 2024.

Company has certain customers whose revenue or accounts receivable balances individually represent 10 % or more of total net revenue

or total accounts receivable, respectively.

For the year ended December 31, 2025, three customers accounted for approximately 96.8 % of

net revenue and 97 % of accounts receivable.

For the year ended December 31, 2024, two customers accounted for approximately 99 % of net

revenue and 90 % of accounts receivable.

6 – Prepaid Expenses and Other Current Assets

expenses and other current assets consisted of the following as of December 31, 2025 and December 31, 2024:

of Prepaid Expenses and Other Current Assets

Prepaid insurance costs

Prepaid advertising and trade show fees

Prepaid professional & license fees

Prepaid professional fees & license fees

Prepaid taxes

Miscellaneous prepaid expenses

VAT tax receivable

Interest receivable

other current assets

Miscellaneous receivable

Total prepaid expenses and other current assets

7 – Property and Equipment

and equipment at December 31, 2024 and 2023, consisted of the following:

Schedule of Property and Equipment

Equipment and machinery

and equipment consisted of the following as of December 31, 2025 and December 31, 2024:

of Property and Equipment

Leasehold improvements

Machinery and equipment

Office furniture, fixtures and equipment

Construction in progress

Accumulated depreciation

property and equipment, net

( 1,140,823 )

Total property and equipment, net

of property and equipment was $ 616,581 and $ 205,907 for the years ended December 31, 2025, and 2024, respectively.

For the year ended,

December 31, 2024, a total of $ 34,034 of depreciation was included in the inventoried production costs, which gets expensed as Cost of

Goods Sold as the inventory is sold.

TO CONSOLIDATED FINANCIAL STATEMENTS

10 – Other Assets

assets consisted of the following as of December 31, 2024 and 2023:

Schedule of Other Assets

First position

receivable (2)

other current assets

May 10, 2024, in connection with the lease of the Company’s facility in Peru, the Company paid $ 275,000

toward the purchase of a First Position Mortgage (“FPM”) receivable in the amount of $ 1,267,000 ,

which is secured by the Peru facility and was owed by the landlord of the Peru facility to its former tenant, for a purchase price

of $ 1,267,000 .

The Company paid an additional $ 80,000

during the fourth quarter of 2024, and the remaining $ 912,000

FPM is to be paid in monthly installments of $ 152,000

from January 24, 2025 to June 23, 2025 , as presented in other current liabilities on the balance sheet.

The unpaid balance

accrues interest at 9 %.

At December 31, 2024, a total of $ 33,215

of interest was accrued.

The FPM enables the Company to ensure that they have uninterrupted access to the leased facility, and secures the

option to purchase the facility by becoming the primary lien holder on the facility.

The Company intends to exercise its option to purchase

the facility at some point in the future, in which case the FPM would either be repaid out of the proceeds from a mortgage, or the FPM

would be used to reduce the purchase price of the facility.

tax receivable is comprised of taxes that were paid as the Company imported equipment and raw materials into Peru.

These taxes will

be refunded as inventory is exported, or if equipment is exported for any unforeseeable reason.

Depreciation expense

related to manufacturing equipment is included in inventory and recognized in cost of goods sold as the related inventory is sold.

Company leases a manufacturing facility located in Pisco, Peru, which is accounted for as an operating lease (see Note 11).

includes a purchase option that allows the Company to acquire the facility at the end of the lease term.

During 2024, the landlord of

this facility entered bankruptcy proceedings.

protect its long-term strategic interests, the Company purchased the first mortgage position on the facility and continues to hold

its contractual purchase option under the lease.

Management currently intends to acquire ownership of the facility either (i)

through the landlord’s bankruptcy settlement process or (ii) by exercising the purchase option at the end of the lease term,

although there can be no assurance that the Company will be successful in this regard.

The Company accounts for the facility as a

leased asset.

The first mortgage position is included on the balance sheet in other assets of $ 1,267,000

as of December 31, 2025 and December 31, 2024 (see Note 8).

As of December 31, 2025, the $ 1,267,000 balance has been paid in full.

The Company capitalizes leasehold improvements related to the buildout of the facility, which expanded the Company’s

production capacity.

8 – Other Assets and Other Receivable

Company has other assets of $ 1,267,000 as of the years ended December 31, 2025, and 2024, consisting of the first mortgage position (the

“FPM”) on the manufacturing facility it leases in Pisco, Peru, which the Company acquired to protect its long-term strategic

interests (see Note 11).

During 2024, the landlord of the leased facility entered bankruptcy proceedings.

May 10, 2024, the Company made the first payment of $ 275,000 toward the FPM.

The FPM is secured by the facility in Peru.

Payments were

made in various installments totaling $ 355,000 as of December 31, 2024, and $ 912,000 during the year ended December 31, 2025.

Company’s Peruvian operations are subject to an 18 % value-added tax (“VAT”) or (“Impuesto General a las Ventas”

or “IGV”) on substantially all purchases and exports of goods and services.

IGV paid on purchases can be offset against IGV

collected on exports, with the net amount either remitted to, or recovered from, the Peruvian tax authority (SUNAT) through a refund

IGV does not represent an expense of the Company when recoverable and is recorded as an asset until applied or refunded.

The receivable

is recoverable from the Peruvian tax authority as a result of the Company’s export activities.

Management evaluates the recoverability

of the VAT receivable based on historical refund experience and believes the balance is fully recoverable.

of December 31, 2025, the Company’s Peruvian operations had paid more IGV on purchases than it had collected on sales, resulting

in a net IGV receivable of $ 1,114,758 , of which $ 679,626 is classified in Other Current Assets (see Note 6).

During the year ended December

31, 2025, the Company received payments from SUNAT, in the amount of $ 541,573 .

9 – Notes Receivable

1 unchanged sentence

February 4, 2021, the Company entered into a Manufacturing and Distributorship Agreement (“MDA”) with Natural Nutrition SpA,

a Chilean company (“Nanuva”), in which the Company loaned $ 500,000 to Nanuva (“Advance Payment”) to help finance

the capital investment needed for Nanuva to purchase two industrial fruit drying machines to be used in servicing the Company’s

manufacturing needs.

Pursuant to the MDA, the Company is entitled to recover the Advance Payment in full no later than May 31, 2027,

which prior to repayment, will bear interest at 3 % per annum.

The Advance Payment is to be repaid pursuant to a two-dollar ($2/kg) deduction

in the price of any product exported by Nanuva to the Company with certain mandatory minimum annual payments.

Repayments commence on

the earlier of a) the first invoice issued by Nanuva after installation of the drying equipment, or b) June 30, 2021.

The MDA expires

on May 31, 2027, with automatic annual renewals thereafter, unless it is terminated in accordance with the terms of the MDA.

deferred collection of the minimum annual payment requirement for 2023 until 2024 when several large orders were placed.

As of December

31, 2024, a total of $ 140,018 of the Advance Payment had been repaid as a reduction of inventory costs, consisting of $ 140,018 of principal

and $ 16,223 of interest.

All payments consisted of reductions in inventory costs, other than a payment of $ 15,000 in cash on March 24,

As of December 31, 2024, a total of $ 390,722 was outstanding from Nanuva, consisting of $ 359,982 of principal and $ 30,740 of unpaid

As of December 31, 2023, a total of $ 404,163 was outstanding from Nanuva, consisting of $ 384,628 of principal and $ 19,535 of

unpaid interest.

The Advance Payment is collateralized by a second lien in the equipment.

Pursuant to the MDA, the Company has been appointed

as Nanuva’s exclusive distributor in the following territories:

Summary of Nanuva’s Exclusive Distributor in Territories

(Kg/month)(“MOQ”)

Avocado Powder

Worldwide (except Chile)

Avocado Snacks

North America (Canada and USA)

Avocado Chips

Other Powders

No Exclusivity

a Chilean company (“Nanuva”).

In connection with the MDA, the Company advanced $ 500,000 to Nanuva (the “Advance Payment”)

to assist Nanuva in financing capital investments required to purchase two EnWave REV™ 10 machines used to produce products for

The Advance Payment is evidenced by a promissory note bearing interest at 3 % per annum on the outstanding principal balance.

The note is collateralized by a second lien on the equipment purchased by Nanuva.

The MDA expires on May 31, 2027 , with automatic annual

renewals thereafter unless terminated in accordance with its terms.

under the agreement are based on kilograms produced by Nanuva for the Company, subject to a minimum contractual annual payment of $ 12,000 .

On February 4, 2024, the Company and Nanuva entered into an amendment to the MDA which extended the date of the first minimum contractual

annual payment to September 30, 2024.

of December 31, 2025, the total outstanding balance of the note receivable from Nanuva was $ 401,523 , consisting of $ 359,982 of principal

and $ 41,541 of accrued interest.

Since inception, the Company has received repayments under the note totaling $ 156,241 , consisting of

$ 140,018 of principal and $ 16,223 of interest, which were recognized as reductions of inventory costs as products were manufactured by

Nanuva for the Company.

2025, the Company determined that it no longer expects to utilize Nanuva for third-party manufacturing as the Company transitioned production

to its manufacturing facility in Pisco, Peru.

Based on this change in operating strategy, the lack of recent manufacturing activity with

Nanuva, and uncertainty regarding Nanuva’s ability to repay the note according to its contractual terms after declaring bankruptcy,

management evaluated the collectability of the note receivable in accordance with ASC 326, Financial Instruments—Credit Losses.

As a result of this assessment, the Company recorded a full allowance for credit losses on the outstanding balance of the Nanuva note

receivable as of December 31, 2025.

Company continues to hold a second lien on the EnWave REV™ 10 machines that collateralize the note receivable and has commenced

negotiations with Nanuva to recover the equipment and terminate the MDA.

Management believes the estimated fair value of the collateral

may exceed the outstanding balance of the note;

however, because the Company has not obtained possession of the equipment as of December

31, 2025, the note receivable has been fully reserved.

Any recovery related to the collateral will be recognized when realized.

April 2024, the Company also advanced Nanuva $ 75,600 related to inventory orders that were not fulfilled.

The Company recorded an allowance

for doubtful accounts for the full amount of this prepaid inventory balance.

10 – Accrued Expenses

expenses consist of the following:

expenses consisted of the following as of December 31, 2025 and December 31, 2024:

Schedule of Accrued Expenses

2 unchanged sentences

Accrued chargebacks

Accrued royalties

accrued expenses

TO CONSOLIDATED FINANCIAL STATEMENTS

13 – Convertible Notes Payable, Related Parties

discussed in further detail in Note 4, on July 24, 2024, the Company issued the $ 3.4 million Convertible Note to Kaufman Kapital, together

with Warrants, convertible into shares of common stock at a fixed price of $ 0.7582 per share.

The Convertible Note matures on the earlier

of (i) December 31, 2025 , (ii) the sale by the Company of $ 5,000,000 of equity or debt securities in a single transaction or series of

related transactions (excluding certain specified transactions), or (iii) the closing of a change of control transaction as provided

in the Convertible Note.

Loans outstanding under the Convertible Note bear interest at an initial rate of 12 % per annum, and together

with accrued principal are convertible into common stock.

Company’s obligations under the Convertible Note are secured by a lien granted to Kaufman Kapital on substantially all of the Company’s

assets pursuant to the Security Agreement.

In addition, the Convertible Note includes affirmative and negative covenants, events of defaults

and other terms and conditions, customary in transactions of this nature.

accordance with ASC 470, the Company recorded total discounts of $ 95,958 , consisting of $ 75,000 of legal fees and $ 20,958 related to

the relative fair value of the Warrants.

The discounts are amortized to interest expense over the term of the loan using the effective

interest method.

As of December 31, 2024, a total of $ 66,587 of unamortized debt discounts are expected to be expensed over the remaining

life of the loan.

Company recognized $ 145,360 of interest expense on convertible notes payable, related parties for the year ended December 31, 2024, consisting

of $ 115,989 of stated interest expense, $ 22,956 of amortized debt discounts and $ 6,415 of amortized debt discounts due to warrants.

Company recognized $ 3,696 of interest expense on convertible notes payable, related parties for the year ended December 31, 2023.

14 – Notes Payable

payable consists of the following as of December 31, 2024 and 2023:

Schedule of Notes Payable

On May 22, 2023, the Company

entered into an equipment purchase agreement with the EnWave Corporation (“EnWave”), for the purchase of a used 100kW

Rev vacuum microwave dehydration machine (the “EnWave Machine”).

Cash payments of $500,000 were paid towards the $1,000,000

purchase price on the EnWave Machine, while the $500,000 balance due is to be paid in twelve (12) monthly installments of $44,424,

bearing interest 12% per annum, commencing August 1, 2024.

On May 22, 2023, the Company

entered into an equipment purchase agreement with the EnWave Corporation (“EnWave”), for the purchase of a used 100kW

Rev vacuum microwave dehydration machine (the “EnWave Machine”).

Cash payments of $ 500,000 were paid towards the $ 1,000,000

purchase price on the EnWave Machine, while the $ 500,000 balance due is to be paid in twelve (12) monthly installments of $ 44,424 ,

bearing interest 12 % per annum, commencing August 1, 2024.

On March 15, 2023, the Company completed

the sale of a $ 200,000 Promissory Note to The John & Kristen Hinman Trust Dated February 23, 2016 (the “Hinman Note”),

pursuant to the Loan Agreement between the Company and the Hinman Trust.

The Hinman Note carried interest at 18 % per annum.

Note was repaid on January 2, 2024.

On May 17, 2020, the

Company entered into a loan agreement with the United States Small Business Administration (the “SBA”), as lender, pursuant

to the SBA’s Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic

on the Company’s business (the “EIDL Loan Agreement”) encompassing a $ 34,500 Promissory Note issued to the SBA

(the “EIDL Note”) (together with the EIDL Loan Agreement, the “EIDL Loan”), bearing interest at 3.75 % per

In connection with entering into the EIDL Loan, the Company also executed a security agreement, dated May 17, 2020, between

the SBA and the Company pursuant to which the EIDL Loan is secured by a security interest on all of the Company’s assets.

the EIDL Note, the Company is required to pay principal and interest payments of $ 169 every month beginning May 17, 2021;

the SBA extended the repayment date to November 17, 2022.

All remaining principal and accrued interest is due and payable on May

The EIDL Note may be repaid at any time without penalty.

Total notes payable

current maturities

Notes payable, less

current maturities

Company recognized $ 19,809 and $ 214,430 of interest expense on notes payable for the years ended December 31, 2024 and 2023, respectively.

TO CONSOLIDATED FINANCIAL STATEMENTS

15 – Notes Payable, Related Parties

discussed in Note 4, on August 30, 2024, the Company borrowed $ 1,200,000 from Kaufman Kapital pursuant to a Senior Secured Promissory

Note that, as amended, matures on June 30, 2025 .

The loan under the Note bears interest at a rate of 15 % per annum.

The Company’s

obligations under the Note are secured by a lien on substantially all of the Company’s assets pursuant to the Security Agreement.

In addition, the Note includes affirmative and negative covenants, events of defaults and other terms and conditions, customary in transactions

of this nature.

discussed in Note 4, in connection with the sale of the Purchased Securities to Kaufman Kapital under the SPA, the Company entered into

an Omnibus Amendment to Note Documents with substantially all of the Holders of the Company’s Senior Notes and Warrants issued

under that certain Subscription Agreement dated as of January 10, 2024, as amended, pursuant to which, among other things, (i) the exercise

price of the Warrants issued to the Holders was reduced from $ 2.00 to $ 1.00 , (ii) the outside maturity date of the Senior Notes held by the Holders was extended from December 31, 2024 to December 31, 2025 (subject to further extension in the event the maturity date

of the Convertible Note is extended), (iii) the Company’s obligation to make payments of principal under the Senior Notes held

by the Holders beginning July 1, 2024 has been eliminated, and instead all obligations of the Company under such Senior Notes will be

due in one lump sum on the maturity date of the Senior Notes, and (iv) the Company’s obligations under the Convertible Note and

liens granted to the holder thereof, will be pari passu with the Company’s obligations under the Senior Notes held by the Holders

and liens granted to the holders thereof.

The amendment warrants resulted in $ 89,949 of additional interest expense.

the period of May 14, 2024 through May 22, 2024, the Company completed the sale of an aggregate of $ 1,050,000 of Senior Notes, and Warrants

to purchase an aggregate of 262,500 shares of the Company’s common stock, to a group of Investors led by Eagle Vision, an affiliate

of John Dalfonsi, a director of the Company and its Chief Financial Officer.

The sales were effected pursuant to a Subscription Agreement,

dated January 10, 2024, between the Company and the investors in the Senior Notes, as amended by an amendment (“First Amendment”)

to the Subscription Agreement dated as of April 16, 2024 (as so amended, the “Subscription Agreement”).

Senior Notes mature on the earlier of December 31, 2025, or the occurrence of a Qualified Subsequent Financing or Change of Control (as

such terms are defined in the Subscription Agreement) and bear interest at a rate of 15 % per annum.

In addition, the Senior Notes are

subject to covenants, events of defaults and other terms and conditions set forth in the Subscription Agreement.

The Company’s

obligations under the Notes are secured by liens on substantially all of the Company’s assets pursuant to the terms of the Security

Agreement entered into by the Company on January 10, 2024 in favor of holders of the Senior Notes (the “Security Agreement”).

Each Warrant is exercisable for a 10 ten-year period at an exercise price of $ 1.00 per share.

April 16, 2024, the Company completed the sale of $ 225,000 of Senior Notes, and Warrants to purchase an aggregate of 56,250 shares of

the Company’s common stock, to a group of seven Investors, pursuant to a First Amendment to the Subscription Agreement between

the Company and the Investors dated as of April 16, 2024.

The First Amendment incorporates and amends certain provisions of the Subscription

Agreement, dated January 10, 2024, previously entered into by the Company and investors that purchased Notes and Warrants from the Company

on January 10, 2024 (the “January Investors”).

On July 30, 2024, the Company repaid an aggregate total of $ 115,000 of principal

to three of the seven Investors in settlement of their promissory notes.

First Amendment also (i) increased the aggregate principal amount of the Senior Notes available to be sold from time to time under the

Subscription Agreement from $ 400,000 to $ 2,000,000 , (ii) increased the number of shares of common stock of the Company available to be

issued under Warrants sold from time to time under the Subscription Agreement from 100,000 to 600,000 , (iii) provides for an aggregate

one-time payment in the amount of $ 46,290 to the January Investors and the issuance to them of Warrants to purchase 100,000 shares of

common stock, in consideration of their agreement to enter into the First Amendment, and (iv) provided for the payment of up to $ 80,000

to Eagle Vision Fund with the proceeds of Notes to be issued by the Company at subsequent closings of sales of Senior Notes and Warrants,

in consideration of services rendered and to be rendered by Eagle Vision to holders of the Senior Notes while the Notes are outstanding,

including acting as collateral agent and due diligence and collateral monitoring services.

TO CONSOLIDATED FINANCIAL STATEMENTS

January 9, 2024, the Company completed the sale of $ 400,000 of Senior Notes and Warrants to purchase an aggregate of 100,000 shares of

the Company’s common stock, to a group of six Investors led by Eagle Vision, pursuant to a Subscription Agreement between the Company

and the Investors.

accordance with ASC 470, the Company recorded total discounts of $ 339,698 , including $ 80,908 on the relative fair value of the Warrants,

incurred as of December 31, 2024.

The discounts are being amortized to interest expense over the term of the debentures using the effective

interest method.

The Company recorded an aggregate $ 339,698 of interest expense pursuant to the amortization of note discounts for the

year ended December 31, 2024.

Vision has been paid aggregate cash fees in the amount of $ 177,500 from the sales of the Senior Notes in consideration of services rendered

and to be rendered by Eagle Vision to the Company and the holders of the Senior Notes, including for conducting due diligence with respect

to the Company, monitoring the performance by the Company of its obligations under the Senior Notes, servicing the interest and principal

payments for holders of the Senior Notes, engaging in ongoing discussions with the Company’s management regarding the Company’s

operations and financial condition, acting as collateral agent, and evaluating financial and non-financial information related to the

The Company has also paid an aggregate of $ 35,000 of the investors’ legal fees from sales of the Senior Notes.

date, in a series of closings pursuant to the Subscription Agreement, including the most recent sales described above, the Company has

issued an aggregate $ 1,675,000 of principal pursuant to the Senior Notes, and Warrants to purchase an aggregate 518,750 shares of common

payable, related parties, consists of the following as of December 31, 2024 and 2023:

Schedule of Notes Payable Related Parties

Total Kaufman Note

Total Senior Notes

held by Eagle Vision

Total Senior Notes payable

Total notes payable,

related parties

current maturities

Notes payable, related

parties, less current maturities

Company recognized $ 664,847 and $ 66,090 of interest expense on notes payable, related parties for the years ended December 31, 2024 and

2023, respectively.

Interest expense for the year ended December 31, 2024, consisted of $ 235,200 of stated interest expense, $ 258,790

of amortized debt discounts and $ 80,908 of amortized debt discounts due to warrants, along with $ 89,949 of additional interest expense

related to the modification of warrants, issued to Eagle Vision Investors.

Interest expense for the year ended December 31, 2023, consisted

of $ 66,090 of amortized debt discounts, including $ 46,090 of amortized debt discounts due to warrants issued on a Subordinated Note during

the year ended December 31, 2023.

Company recognized aggregate interest expense for the years ended December 31, 2024 and 2023 respectively, as follows:

Schedule of Recognized Interest Expense

Interest on convertible notes

payable, related parties

Amortization of debt discounts on related

party convertible notes

Amortization of debt discounts on related

party convertible notes, warrants

Amortization of debt discounts on related

party convertible notes

Interest on convertible notes payable

Interest on notes payable

Interest on notes payable, related parties

Interest on notes payable

Amortization of debt discounts on related

Amortization of debt discounts on modification

of Eagle Vision warrants

Amortization of debt discounts on related

party notes, warrants

Amortization of debt discounts on related

Interest on other current liability, first

position mortgage

Interest on revolving line of credit

Finance charge on letter of credit

Interest on credit

interest expense

TO CONSOLIDATED FINANCIAL STATEMENTS

Accrued miscellaneous

Accrued Enwave royalties

Total accrued expenses

Company has financed production equipment with an acquisition cost of approximately $ 168,141 under a finance lease with a five-year term

5 unchanged sentences

Facility Lease

May 10, 2024, the Company entered into a ten-year lease for the 50,000 square-foot Peru Facility, which commenced operations in December

The lease of the Peru Facility requires monthly lease payments of $ 8,000 in the first two years of the lease, $ 20,000 in the

third year of the lease, $ 22,000 in the fourth year of the lease, $ 24,000 in the fourth year of the lease, and $ 25,000 thereafter.

lease also has a 10 -year renewal option, and a buy-out option under which we may purchase the Peru Facility for $ 1,865,456 .

May 10, 2024, the Company entered into a ten-year lease for the 50,000 square-foot manufacturing facility in Pisco, Peru (the “Peru

Facility”), which commenced operations in December of 2024.

The lease of the Peru Facility requires monthly lease payments of $ 8,000

in the first two years of the lease, $ 20,000 in the third year of the lease, $ 22,000 in the fourth year of the lease, $ 24,000 in the

fourth year of the lease, and $ 25,000 thereafter.

The lease also has a 10 -year renewal option, and a buy-out option under which the Company

may purchase the Peru Facility for $ 1,865,456 .

connection with the lease of the Peru Facility, the Company purchased a first position mortgage receivable in the amount of $ 1,267,000 ,

which is secured by the Peru Facility and was owed by the landlord of the Peru Facility to its former tenant, for a purchase price of

$ 1,267,000 , of which $ 355,000 was paid during the year ended December 31, 2024.

The remaining $ 912,000 is to be paid in monthly installments

of $ 152,000 from January 24, 2025 to June 23, 2025, as presented in other current liabilities on the balance sheet.

The unpaid balance

accrues interest at 9 %.

At December 31, 2024, a total of $ 33,215 of interest was accrued.

components of lease expense were as follows:

$ 1,267,000 , of which payments were made in various installments totaling $ 355,000 during the year ended December 31, 2024;

and $ 912,000

during the year ended December 31, 2025.

As of December 31, 2025, the $ 1,267,000 balance has been paid in full.

See Notes 7 and 8 for additional details.

components of lease expense for the years ended December 31, 2025 and December 31, 2024 were as follows:

Schedule of Components of Lease Expenses

For the Years Ended

For the Years Ended December 31,

Operating lease cost:

of right-of-use asset

Amortization of right-of-use asset

Interest on lease liability

Capitalized inventory

Total operating lease

Capitalized inventory costs

Total operating lease cost

Finance lease cost:

Amortization of right-of-use

Amortization of right-of-use asset

Interest on lease liability

Total finance lease

Total finance lease cost

Other short-term leases

Total lease costs

balance sheet information related to leases was as follows:

balance sheet information related to leases as of December 31, 2025 and December 31, 2024 was as follows:

Schedule of Supplemental Information Related to Leases

Operating lease:

Current portion of operating

lease liability

Noncurrent operating

lease liability

Total operating lease

Operating lease assets

Current portion of operating lease liability

Noncurrent operating lease liability

Total operating lease liability

Finance lease:

Finance lease assets

Current portion of finance

lease liability

Noncurrent finance lease

finance lease liability

Current portion of finance lease liability

Noncurrent finance lease liability

Total finance lease liability

Weighted average remaining lease term:

4 unchanged sentences

Finance lease

TO CONSOLIDATED FINANCIAL STATEMENTS

cash flow and other information related to finance leases was as follows:

cash flow and other information related to finance leases for the years ended December 31, 2025 and December 31, 2024 was as follows:

Schedule of Supplemental Cash and Other Information Related to finance Leases

For the Years Ended

Cash paid for amounts included in the measurement

of lease liabilities:

cash flows provided by operating leases

cash flows used for finance leases

Leased assets obtained in exchange for lease

operating lease liabilities

finance lease liabilities

future minimum lease payments due under operating leases as of December 31, 2024 is as follows:

For the Years Ended December 31,

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows used for operating leases

Finance cash flows used for finance leases

Leased assets obtained in exchange for lease liabilities:

Total operating lease liabilities

Total finance lease liabilities

future minimum lease payments due under operating leases as of December 31, 2025 are as follows:

Schedule of Future Minimum Operating Lease Payments

4 unchanged sentences

Less current portion

Long-term operating

lease liability

future minimum lease payments due under finance leases as of December 31, 2024 is as follows:

Long-term operating lease liability

future minimum lease payments due under finance leases as of December 31, 2025 are as follows:

of Future Minimum Finance Lease Payments

4 unchanged sentences

Less current portion

Long-term finance lease

TO CONSOLIDATED FINANCIAL STATEMENTS

17 – Commitments and Contingencies

time to time, the Company may be a party to various legal matters, threatened claims, or proceedings in the normal course of business.

Legal fees and other costs associated with such actions are expensed as incurred.

The Company assesses, in conjunction with its legal

counsel, the need to record a liability for litigation and contingencies.

Legal accruals are recorded when and if it is determined that

a loss related to a certain matter is both probable and reasonably estimable.

There are currently no pending legal matters.

May 10, 2024, the Company entered into a ten-year lease for the 50,000 square-foot Peru Facility, which commenced operations in December

The lease requires monthly lease payments of $ 8,000 in the first two years of the lease, $ 20,000 in the third year of the lease,

$ 22,000 in the fourth year of the lease, $ 24,000 in the fourth year of the lease, and $ 25,000 thereafter.

The lease also has a 10 -year

renewal option, and a buy-out option under which the Company may purchase the Peru Facility for $ 1,865,456 .

Company leases equipment under a non-cancelable finance lease payable in monthly installments of $ 3,657 expiring on May 31, 2028 .

Contractual Commitments

January 19, 2022, the Company entered into a contract manufacturing agreement with NXTDried Superfoods SAC to produce products for distribution

by the Company.

The Company agreed to pre-pay for inventory via an advance to enable the manufacturer to invest in necessary processing

facilities that will be reimbursed to the Company on an agreed per kg basis over the period of 2022 to 2026.

May 7, 2021, the Company entered into a license agreement (“License Agreement”) with EnWave, pursuant to which EnWave licensed

to the Company a collection of patents and intellectual property (the “EnWave Technology”) used to manufacture and operate

vacuum microwave dehydration machines purchased by the Company from EnWave (the “EnWave Equipment”).

The License Agreement

was amended on October 26, 2022, September 27, 2023 and May 23, 2024, to, among other things, modify the exclusivity retention royalty

payments required to be paid by the Company.

The License Agreement entitles EnWave to a fixed royalty percentage on all of the Company’s

revenue from the sale of products produced using the EnWave Technology, net of trade or volume discounts, refunds paid, settled claims

for damaged goods, applicable excise, sales and withholding taxes imposed at the time of the sale, and provides the Company with certain

exclusivity rights with respect to the production of avocado products.

In order to maintain the exclusivity, the Company must make annual

royalty minimum payments to EnWave of $ 250,000 per year, commencing in 2025 and continuing through each subsequent year in perpetuity,

as long as the Company elects to maintain exclusivity.

addition to the initial EnWave Equipment we purchased, the Company agreed to purchase additional equipment from EnWave over time.

additional equipment purchase schedule, as amended, requires the Company to purchase a “Second EnWave Machine” and pay up-to

four non-refundable deposits for the Second EnWave Machine in the amount of fifty thousand dollars ($ 50,000 ) each on September 30, 2023,

December 31, 2023, March 31, 2024 and June 30, 2024 (the “Interim Deposits”).

The Company paid the first three non-refundable

deposits of $ 50,000 on September 27, 2023, December 31, 2023 and March 8, 2024, and completed the purchase on December 12, 2024.

Company is also required to execute an Equipment Purchase Agreement for a 120kW, or greater rated power, EnWave Equipment (the “Third

EnWave Machine”) on or before December 31, 2025, and satisfy the payment obligations required with respect to the Third EnWave

Machine by the License Agreement.

The Company is also required to enter into an Equipment Purchase Agreement for a 120kW, or greater,

rated power EnWave Equipment (the “Fourth EnWave Machine”) on, or before, December 31, 2026, and to satisfy the payment obligations

required with respect to the Fourth EnWave Machine by the License Agreement.

The License Agreement is effective as long as EnWave possesses

its EnWave technology.

There have been no royalty payments to date, and any future minimum royalty payments or equipment purchases under

this license agreement are an unrecognized commitment, as they relate to retaining exclusivity of the avocado products going forward

and the Company can elect not to pay.

TO CONSOLIDATED FINANCIAL STATEMENTS

18 – Stockholders’ Equity

Company has authorized 8,000,000 shares of $ 0.001 par value preferred stock.

As of December 31, 2024, none of the preferred stock has

been designated or issued.

Company has authorized 80,000,000 shares of $ 0.001 par value common stock.

As of December 31, 2024, a total of 8,424,600 shares of common

stock have been issued.

Each holder of common stock is entitled to one vote for each share of common stock held .

October 23, 2024, the Company entered into an At-The-Market Issuance Sales Agreement (the “ATM Agreement”) for the sale of

shares of its common stock having an aggregate offering price of up to $ 3,000,000 .

The shares were sold at prevailing market prices,

and the offering was conducted through Alexander Capital, L.P.

(“Alexander Capital”).

Net proceeds from the offering of 1,317,307

shares of common stock under the ATM Agreement, after deducting applicable expenses, including a commission paid to Alexander Capital

equal to 3 % of the gross proceeds from the sale of the shares, amounted to approximately $ 2,305,005 for the year ended December 31, 2024.

As of December 31, 2024, the Company had 182,693 shares of common stock authorized but unissued, as held in a brokerage account with

Alexander Capital, which were available for issuance under the ATM Agreement.

These shares of common stock represent a part of the total

authorized share capital.

The issuance of shares has resulted in an increase in the outstanding common stock of the Company, as the proceeds

will be used for general corporate purposes or specific use of proceeds, if applicable.

No equity impact was recorded for these shares

Long-term finance lease liability

Convertible Notes Payable, Related Party

July 15, 2024, the Company entered into a Securities Purchase Agreement (as amended, the “SPA”) with Daniel L.

Kaufman, pursuant

Kaufman agreed to purchase from the Company, in a private placement (i) a 12 % Senior Secured Convertible Promissory Note

in the principal amount of up to $ 3,400,000 (the “Convertible Note”), convertible into shares of the Company’s common

stock at a fixed price of $ 0.7582 per share of common stock, a (ii) a warrant to purchase 1,000,000 shares of common stock at an exercise

price of $ 1.00 per share (the “$ 1.00 Warrant”), and (iii) a warrant to purchase 500,000 shares of common stock at an exercise

price of $ 1.50 per share (the “$ 1.50 Warrant” and, together with the $ 1.00 Warrant, the “Warrants” and together

with the Convertible Note, the “Purchased Securities”), in consideration of an initial loan in the principal amount of $ 2,000,000

(the “Initial Loan”) made to the Company under the Convertible Note, subject to the terms and conditions thereof.

July 19, 2024, the Company, Mr.

Kaufman and Kaufman Kapital LLC (“Kaufman Kapital”) entered into an amendment to the SPA,

which among other things, replaced Mr.

Kaufman with Kaufman Kapital as the “Investor” under the SPA.

Convertible Note matures on the earlier of (i) December 31, 2025 , (ii) the sale by the Company of $ 5,000,000 of equity or debt securities

in a single transaction or series of related transactions (excluding certain specified transactions), or (iii) the closing of a change

of control transaction as provided in the Convertible Note.

Loans outstanding under the Convertible Note bear interest at an initial

rate of 12 % per annum, and together with accrued principal are convertible into common stock.

July 24, 2024 the, the Initial Loan payment of $ 2,000,000 was made to the Company under the Convertible Note, and on December 9, 2024,

Kaufman Kapital made an additional loan to the Company under the Convertible Note in the amount of $ 1,400,000 .

June 1, 2025 the Company and Kaufman Kapital entered into a Warrant Exercise and Amendment to Notes and Warrant Agreement (the “Warrant

Exercise Agreement”), pursuant to which Kaufman Kapital exercised in full the $ 1.00 Warrant on June 4, 2025 for a cash payment

to the Company of $ 1,000,000 .

In addition, pursuant to the Warrant Exercise Agreement, Kaufman Kapital and the Company agreed (i) to

extend the expiration date of the $ 1.50 Warrant to December 31, 2026 , (ii) to extend the maturity date of the Convertible Note to December

31, 2026 , (iii) to extend the maturity date of the Senior Secured Promissory Note of the Company in the original principal amount of

$ 1,200,000 , issued to Kaufman on August 29, 2024 (the “Secured Note”) to December 31, 2025, (iv) that the Company will not

make any prepayment under the Convertible Note at any time amounts are outstanding under the Secured Note or any other non-convertible

notes of the Company (excluding notes issued pursuant to equipment financing), and (v) that the Company will not prepay more than $2,400,000

of principal outstanding under the Convertible Note prior to September 30, 2026.

The amendment to the $1.50 Warrant resulted in $32,099

of additional interest expense during 2025.

to December 31, 2025, on January 28, 2026, Kaufman converted $ 500,000 of principal outstanding under the Company’s Convertible

Note into 659,457 shares of the Company’s common stock.

See Note 21 – Subsequent Events.

Company’s obligations under the Convertible Note are secured by a lien granted to Kaufman Kapital on substantially all of the Company’s

assets pursuant to a Security Agreement entered between the Company and Kaufman Kapital (the “Security Agreement”).

the Convertible Note includes affirmative and negative covenants, events of defaults and other terms and conditions, customary in transactions

of this nature.

accordance with ASC 470, the Company recorded total discounts of $ 95,958 , consisting of $ 75,000 of legal fees and $ 20,958 related to

the relative fair value of the Warrants.

The discounts are amortized to interest expense over the term of the loan using the effective

interest method.

As of December 31, 2025, a total of $ 39,309 of unamortized debt discounts are expected to be expensed over the remaining

life of the loan.

Senior Secured Promissory Note, Related Party

August 29, 2024, the Company borrowed $ 1,200,000 from Kaufman Kapital pursuant to a Senior Secured Promissory Note that, as amended,

matures on December 31, 2025 .

The loan under the Secured Note bears interest at a rate of 15 % per annum.

The Company’s obligations

under the Secured Note are secured by a lien on substantially all of the Company’s assets pursuant to the Security Agreement.

addition, the Secured Note includes affirmative and negative covenants, events of defaults and other terms and conditions, customary

in transactions of this nature.

the year ended December 31, 2025, the Company repaid $ 1,200,000 of principal on the Secured Note.

The principal outstanding under the

Secured Note is $ 0 as of December 31, 2025.

to December 31, 2025, on January 28, 2026, the Company entered into a $ 1,500,000 Senior Secured Promissory Note with Kaufman Kapital.

The note bears interest at 8 % per annum and matures on January 28, 2027 .

See Note 21 – Subsequent Events.

Vision Senior Notes and Warrants, Related Party

January 9, 2024 the Company entered into a Subscription Agreement (the “Subscription Agreement”) with Eagle Vision Fund LP.,

for the sale of Senior Secured Notes bearing interest at a rate of 15 % per annum (“Senior Secured Notes”) to Purchasers in

the aggregate amount of up to $ 400,000 and detachable 10-year warrants (the “Warrants”) to purchase in the aggregate up to

100,000 shares of the Company’s common stock at an exercise price of $ 2.00 per share.

April 16, 2024, the Company amended the Subscription Agreement (the “First Amendment”) to complete the sale of $ 225,000 of

additional Senior Secured Notes and Warrants to purchase an aggregate of 56,250 shares of the Company’s common stock to Purchasers.

On July 30, 2024, the Company repaid an aggregate total of $ 115,000 of principal to Purchasers in settlement of their Senior Secured

First Amendment incorporates and amends certain provisions of the Subscription Agreement.

The First Amendment also (i) increased the

aggregate principal amount of the Senior Secured Notes available to be sold from time to time under the Subscription Agreement from $ 400,000

to $ 2,000,000 , (ii) increased the number of shares of common stock of the Company available to be issued under Warrants sold from time

to time under the Subscription Agreement from 100,000 to 600,000 , (iii) provides for an aggregate one-time payment in the amount of $ 46,290

to the initial Investors in the Senior Secured Notes and the issuance to them of Warrants to purchase 100,000 shares of common stock,

in consideration of their agreement to enter into the First Amendment, and (iv) provided for the payment of up to $ 80,000 to Eagle Vision

Fund with the proceeds of notes to be issued by the Company at subsequent closings of sales of Senior Secured Notes and Warrants, in

consideration of services rendered and to be rendered by Eagle Vision to holders of the Senior Secured Notes while such notes are outstanding,

including acting as collateral agent and due diligence and collateral monitoring services.

the period of May 14, 2024, through May 22, 2024, the Company completed the sale of an aggregate of $ 1,050,000 of Senior Secured Notes

and Warrants to purchase an aggregate of 262,500 shares of the Company’s common stock, to a group of investors led by Eagle Vision,

an affiliate of John Dalfonsi, a director of the Company and its Chief Financial Officer.

the aggregate, through a series of closings pursuant to the Subscription Agreement, including the sales described above, the Company

issued an aggregate $ 1,675,000 of principal pursuant to the Senior Secured Notes and Warrants to purchase an aggregate 518,750 shares

of common stock.

Senior Secured Notes mature on the earlier of December 31, 2025, or the occurrence of a Qualified Subsequent Financing or Change of Control

(as such terms are defined in the Subscription Agreement).

In addition, the Senior Secured Notes are subject to covenants, events of

defaults and other terms and conditions set forth in the Subscription Agreement.

The Company’s obligations under the Senior Secured

Notes are secured by liens on substantially all of the Company’s assets pursuant to the terms of the Security Agreement entered

into by the Company on January 10, 2024, in favor of holders of the Senior Secured Notes.

connection with the sale of the Purchased Securities to Kaufman Kapital under the SPA, the Company entered into an Omnibus Amendment

to Note Documents with substantially all of the Holders of the Company’s Senior Secured Notes and Warrants issued under that certain

Subscription Agreement dated as of January 10, 2024, as amended, pursuant to which, among other things, (i) the exercise price of the

Warrants issued to the Holders was reduced from $ 2.00 to $ 1.00 , (ii) the outside maturity date of the Senior Secured Notes held by the

Holders was extended from December 31, 2024 to December 31, 2025 (subject to further extension i n the event the maturity date of the

Convertible N ote is extended), (iii) the Company’s obligation to make payments of principal under the Senior Secured Notes held

by the Holders beginning July 1, 2024 has been eliminated, and instead all obligations of the Company under such Senior Secured Notes

will be due in one lump sum on the maturity date of the Senior Secured Notes, and (iv) the Company’s obligations under the Convertible

Note and liens granted to the holder thereof, will be pari passu with the Company’s obligations under the Senior Secured Notes

held by the Holders and liens granted to the holders thereof.

The amendment warrants resulted in $ 89,949 of additional interest expense

accordance with ASC 470, the Company recorded total discounts of $ 339,698 , including $ 80,908 on the relative fair value of the Warrants

during the year ended December 31, 2024.

Public Offering

June 2023, the Company completed its initial public offering IPO in which it issued and sold 1,190,000 shares of its common stock at

a price of $ 6.00 per share pursuant to an Underwriting Agreement between the Company and Alexander

Capital, L.P.

(the “Underwriter”) .

The Company received net proceeds of $ 6,226,000 , after deducting underwriters’

discounts and commissions and before consideration of other issuance costs.

to the Underwriting Agreement, the Company also issued to the Underwriter a Common Stock Purchase Warrant to purchase up to 82,110 shares

of Common Stock at an exercise price of $ 7.20 , which may be exercised for a five-year period beginning December 18, 2023.

to the IPO, all deferred offering costs were capitalized in other noncurrent assets on the balance sheets.

Deferred offering costs of

$ 1,283,954 , primarily consisting of accounting, legal, and other fees related to the Company’s IPO, were offset against the IPO

proceeds upon the closing of the Company’s IPO in June 2023.

Offering Sale of Common Stock and Warrants, Related Parties for the Year Ended December 31, 2024

July 15, 2024, the Company entered into Subscription Agreements (the “Subscription Agreements”) with three related parties,

consisting of Eric Healy, the Company’s Chief Executive Officer;

Eagle Vision;

and the Company’s President, pursuant to which

such investors agreed to purchase $ 525,000 of “Units” from the Company, each Unit consisting of (i) 100 shares of common

stock, and (ii) a warrant to purchase 125 shares of common stock over the following ten years at an exercise price of $ 1.00 per share,

at a purchase price per Unit equal to $ 75.82 .

The Company completed the sale of the Units to Eric Healy and the Company’s President

on July 23, 2024, and the sale of the Units to Eagle Vision on August 30, 2024, an affiliate of Mr.

Dalfonsi, the Company’s CFO,

resulting in the issuance of an aggregate of 692,429 shares of common stock and warrants to purchase 865,536 shares of common stock.

TO CONSOLIDATED FINANCIAL STATEMENTS

Offering of Common Stock

June 26, 2024, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Alexander Capital,

as the Representative of the underwriters named therein (the “Representative” and such other Underwriters, the “Underwriters”),

relating to the issuance and sale by the Company to the Underwriters (the “Public Offering”) of 1,750,000 Shares (the “Shares”)

of common stock at a price to the public of $ 0.80 per share, less underwriting discounts and commissions.

Pursuant to the Underwriting

Agreement, the Representative was granted an option (the “Over-Allotment Option”), for a period of 45 days, to purchase from

the Company up to 262,500 additional shares of common stock, at the same price per share, to cover over-allotments, if any.

to the Underwriting Agreement, the Company agreed to an 8.0 % underwriting discount on the gross proceeds received by the Company for

the Shares, in addition to reimbursement of certain expenses, made customary representations, warranties and covenants concerning the

Company, and also agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act.

Offering closed on June 28, 2024.

The Company received net proceeds from the Offering of $ 1,000,925 after deducting the underwriting

discounts and commissions and offering expenses.

July 19, 2024, the Underwriters exercised their Over-Allotment Option to purchase 222,500 shares of common stock at a price of $ 0.80

The Company received net proceeds $ 163,760 , after deducting $ 14,240 of underwriting commissions.

Stock Issued for Services for the Year Ended December 31, 2024

June 1, 2024, the Company issued 6,383 shares of the Company’s common stock under the 2022 Omnibus Equity Incentive Plan (the “2022

Equity Plan”) to PCG Advisory, Inc.

(“PCG”) as payment for services in lieu of cash.

The fair value of the shares was

$ 9,819 , based on the closing traded price of the common stock on the date of grant .

May 1, 2024, the Company issued 4,766 shares of the Company’s common stock under the 2022 Equity Plan to PCG as payment for services

in lieu of cash.

The fair value of the shares was $ 11,438 , based on the closing traded price of

the common stock on the date of grant .

April 22, 2024, the Company issued 99,688 shares under the 2022 Equity Plan to its securities counsel for services performed.

value of the shares was $ 109,657 , based on the closing traded price of the common stock on the

date of grant .

April 1, 2024, the Company issued 4,988 shares of the Company’s common stock under the 2022 Equity Plan to PCG as payment for services

in lieu of cash.

The fair value of the shares was $ 9,577 , based on the closing traded price of

the common stock on the date of grant .

February 19, 2024, the Company issued 16,836 shares under the Company’s 2022 Equity Plan to its securities counsel for services

The fair value of the shares was $ 44,278 , based on the closing traded price of the common

stock on the date of grant .

January 26, 2024, the Company issued 60,258 shares under the 2022 Equity Plan, to its securities counsel for services performed.

fair value of the shares was $ 69,297 , based on the closing traded price of the common stock on

the date of grant .

January 5, 2024, the Company retained PCG to provide strategic advisory and investor relations services pursuant to an Advisory Agreement

under which the Company agreed to issue PCG an aggregate 22,500 shares of the Company’s common stock as payment for services in

lieu of cash for the months of January, February, and March 2024.

The aggregate fair value of the shares was $ 36,019 , based on the

closing traded price of the common stock on the dates of grant .

The shares were subsequently issued on April 15, 2024 under the

2022 Equity Plan.

Stock Issued for Services for the Year Ended December 31, 2023

November 1, 2023, the Company issued 24,478 shares under the 2022 Equity Plan to its securities counsel for services performed.

The aggregate

fair value of the shares was $ 40,389 , based on the closing traded price of the common stock on

the date of grant .

October 26, 2023, the Company issued 12,500 shares under the 2022 Equity Plan to a consultant, who later became a Company director, for

services performed.

The aggregate fair value of the shares was $ 19,000 , based on the closing traded

price of the common stock on the date of grant .

TO CONSOLIDATED FINANCIAL STATEMENTS

August 17, 2023, the Company issued 44,334 shares under the 2022 Equity Plan, to its securities counsel for services performed.

The aggregate

fair value of the shares was $ 99,751 , based on the closing traded price of the common stock on

the date of grant .

connection with the IPO in June 2023, a total of $ 6,029,204 of convertible debt, consisting of $ 5,526,691 of principal and $ 502,513 of

interest, was converted into 1,572,171 shares of common stock, inclusive of $ 179,687 , consisting of $ 165,000 of principal and $ 14,687

of interest, that converted into 43,562 shares of common stock issued upon the conversion of debts held by related parties.

were converted in accordance with the conversion terms;

therefore, no gain or loss had been recognized.

The discounts were amortized to interest expense during 2024 using the effective interest method.

Vision has been paid aggregate cash fees in the amount of $ 177,500 from the sales of the Senior Secured Notes in consideration of services

rendered by Eagle Vision to the Company and the holders of the Senior Secured Notes, including for conducting due diligence with respect

to the Company, monitoring the performance by the Company of its obligations under the Senior Secured Notes, servicing the interest and

principal payments for holders of the Senior Secured Notes, engaging in ongoing discussions with the Company’s management regarding

the Company’s operations and financial condition, acting as collateral agent, and evaluating financial and non-financial information

related to the Company.

The Company has also paid an aggregate of $ 35,000 of the investors’ legal fees from sales of the Senior

Secured Notes.

the year ended December 31, 2025, the Company repaid $ 1,560,000 of remaining principal outstanding under the Senior Secured Notes.

principal outstanding is $ 0 as of December 31, 2025.

the year ended December 31, 2025, of the 518,750 warrants issued to purchasers of the Senior Secured Notes, warrants were exercised to

purchase an aggregate of 362,500 shares of the Company’s common stock at an exercise price of $ 1.00 per share aggregate cash proceeds

of $ 362,500 .

payable to related parties as of December 31, 2025 and December 31, 2024, consists of the following:

Schedule of Notes Payable Related Parties

Total Kaufman Convertible Notes Payable, related party

Convertible notes payable, related parties, net of discounts

current maturities

Convertible notes payable, related parties, less current maturities

Total Kaufman Senior Secured Promissory Note, related party

Total Senior Notes held by Eagle Vision

Total Senior Notes Payable

Total notes payable, related parties

current maturities

Notes payable, related parties, less current maturities

Company recognized $ 445,683 of interest expense on convertible notes payable, related parties for the year ended December 31, 2025, consisting

of $ 418,406 of stated interest expense, $ 21,320 of amortized debt discounts and $ 5,957 of amortized debt discounts due to warrants.

Company recognized $ 261,636 of interest expense on notes payable, related parties for the year ended December 31, 2025.

The Company recognized

$ 664,847 of interest expense on notes payable, related parties for the year ended December 31, 2024, consisting of $ 235,200 of stated

interest expense, $ 258,790 of amortized debt discounts and $ 80,908 of amortized debt discounts due to warrants, along with $ 89,949 of

additional interest expense related to the modification of warrants issued to Senior Secured Notes purchasers.

Equipment Promissory Note

May 22, 2023, the Company entered into an equipment purchase agreement with EnWave for the purchase of a used 100kW REV vacuum microwave

dehydration machine (the “Third EnWave Machine”).

Cash payments of $ 500,000 were paid towards the $ 1,000,000 purchase price

on the Third EnWave Machine, while the $ 500,000 balance due is to be paid in twelve (12) monthly installments of $ 44,424 , bearing interest

12 % per annum, commencing August 1, 2024.

Company is also required to enter an Equipment Purchase Agreement for a 120kW, or greater, rated power EnWave Equipment (the “Fourth

EnWave Machine”) on, or before, December 31, 2026, and to satisfy the payment obligations required with respect to the Fourth EnWave

Machine by the License Agreement.

The license is not discernible from the equipment;

therefore, the license costs have been capitalized

and depreciated over the useful life of the equipment.

September 16, 2025, the Company and EnWave entered into (i) a Fifth Amendment to License Agreement (the “Amendment”), which

amended certain terms of the License Agreement between the Company and EnWave originally dated May 7, 2021 (as amended, the “License

Agreement”), and (ii) an Equipment Purchase Agreement (the “Purchase Agreement”).

to the Purchase Agreement, the Company also purchased from EnWave a refurbished 120kW REV vacuum microwave dehydration machine for a

purchase price of $ 1,500,000 .

The purchase price is payable in 24 equal monthly installments, commencing April 1, 2026, pursuant to a secured promissory note

bearing interest at the rate of 8.00 %

per annum (see Note7).

Note 19 – Commitments and Contingencies for additional information on the License Agreement.

EIDL Loan Agreement

May 17, 2020, the Company entered into a loan agreement with the United States Small Business Administration (the “SBA”),

as lender, pursuant to the SBA’s Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of

the COVID-19 pandemic on the Company’s business (the “EIDL Loan Agreement”) encompassing a $ 34,500 Promissory Note

issued to the SBA (the “EIDL Note”) (together with the EIDL Loan Agreement, the “EIDL Loan”), bearing interest

at 3.75 % per annum.

In connection with entering into the EIDL Loan, the Company also executed a security agreement, dated May 17, 2020,

between the SBA and the Company pursuant to which the EIDL Loan is secured by a security interest on all of the Company’s assets.

Under the EIDL Note, the Company is required to pay interest payments of $ 169 every month beginning May 17, 2021;

the SBA extended the repayment date to November 17, 2022.

All remaining principal and accrued interest is due and payable on May 17,

The EIDL Note may be repaid at any time without penalty.

Company has notes payable (in addition to the Senior Secured Notes and the notes payable to Kaufman Kapital described above), consisting

of the following as of December 31, 2025 and December 31, 2024:

Schedule of Notes Payable

EnWave Equipment Promissory Note

SBA EIDL Loan

Total notes payable

current maturities

Notes payable, less current maturities

Company recognized $ 17,058 and $ 19,809 of interest expense on these notes payable for the years ended December 31, 2025, and 2024, respectively.

schedule of principal maturities of debt as of December 31, 2025 are as follows:

Schedule of Maturities of Debt

Year Ending December 31,

2030 and thereafter

current portion

Long-term debt

Company recognized aggregate interest expense during the years ended December 31, 2025 and December 31, 2024 as follows:

Schedule of Recognized Interest Expense

Years Ended December 31,

Interest on convertible notes payable, related parties

Amortization of debt discounts on related party convertible notes

Amortization of debt discounts on related party convertible notes, warrants

Amortization of debt discounts on related party convertible notes

Interest on notes payable

Interest on notes payable, related parties

Interest on notes payable

Amortization of debt discounts on related party notes

Amortization of debt discounts on related party notes, warrants

Amortization of debt discounts on related party notes

Fair value adjustment related to amended warrant

Interest on credit cards

Interest on first credit position financing

Total interest expense

13 – Changes in Stockholders’ Equity

Company is authorized to issue 8,000,000 shares of preferred stock, par value $ 0.001 per share.

As of December 31, 2025, no shares of

preferred stock were issued or outstanding.

Company is authorized to issue 80,000,000 shares of common stock, par value $ 0.001 per share.

As of December 31, 2025, 13,385,459 shares

of common stock were issued and outstanding.

Holders of common stock are entitled to one vote per share.

June 15, 2023, the Company effected a 2.5-for-1 reverse stock split of its outstanding shares of common stock.

All share and per-share

amounts presented in these consolidated financial statements have been retroactively adjusted to reflect the reverse stock split for

all periods presented.

The par value of the common stock was not adjusted.

At-the-Market

the year ended December 31, 2025, the Company issued 2,421,415 shares of common stock pursuant to its At-the-Market (“ATM”)

programs, resulting in net proceeds of $ 5,239,988 after commissions and offering expenses.

November 13, 2025, the Company completed the sale of 1,034,600 shares of its common stock in an underwritten offering for aggregate gross

proceeds of approximately $ 2.5 million.

After deducting underwriting discounts, fees, and offering expenses, the Company received net

proceeds of $ 2,297,590 .

The Company used the proceeds for working capital and general corporate purposes.

connection with the sale of common stock the Company issued warrants to the underwriter to purchase up to 41,384 shares of common stock

and allocated $ 51,195 of the proceeds to additional paid-in capital based on the relative fair value of the warrants.

This allocation

represented a non-cash financing activity and did not affect total cash proceeds received.

Company maintains the 2022 Equity Incentive Plan, which provides for the issuance of stock options and other equity-based awards.

During the year ended December 31, 2025, the Company issued options to purchase shares of common stock under the plan for services

A summary of stock option activity and related stock-based compensation expense is included in Note 14 – Common

Stock Options.

the year ended December 31, 2025, the Company recorded a $ 32,099 non-cash increase to additional paid-in capital related to the fair

value of warrant modifications.

In addition, warrants were exercised to purchase an aggregate of 1,504,844 shares of the Company’s

common stock, resulting in cash proceeds of $ 1,499,294 .

A summary of warrant activity and related terms is included in Note 15 –

Common Stock Warrants.

Currency Translation

currency translation adjustments, primarily related to the Company’s foreign operations in Peru, increased accumulated other comprehensive

income by $ 35,446 during the year ended December 31, 2025.

14 – Common Stock Options

Incentive Plan

board of directors and shareholders adopted our 2022 Omnibus Equity Incentive Plan on January 1, 2022 (the “2022 Plan”).

Our 2022 Plan allows for the grant of a variety of equity vehicles to provide flexibility in implementing equity awards, including nonqualified

stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance

units, incentive bonus awards, other cash-based awards and other stock-based awards.

The number of shares reserved for issuance under

the 2022 Equity Plan was initially an aggregate of 600,000 shares, as adjusted on June 15, 2023 in connection with the Company’s

reverse stock split, subject to annual increases under the plan, resulting in 1,009,000 reserved shares as of December 31, 2024.

were 593,470 options with a weighted average exercise price of $ 2.39 per share outstanding as of December 31, 2024.

Stock Options Issued for Services

May 1, 2024, the Company granted options to purchase 30,000

shares of the Company’s common stock, having an exercise price of $ 2.40

per share, exercisable over a 10 -year

term, to a new employee.

The options will vest monthly over three years from the date of grant.

The aggregate estimated value using

the plain vanilla Black-Scholes Pricing Model, based on a volatility rate of 41 %

and a call option value of $ 1.1806 ,

and an expected term of 6.5 years, was $ 35,419 .

The options are being expensed over the vesting period, resulting in $ 7,872

of stock-based compensation expense during the year ended December 31, 2024.

As of December 31, 2024, a total of $ 27,547

of unamortized expenses are expected to be expensed over the vesting period.

February 22, 2024, the Company granted options to purchase an aggregate 315,000

shares of the Company’s common stock, having an exercise price of $ 1.92

per share, exercisable over a 10 -year

term, to a total of six employees, including options to purchase 140,000

shares issued to the Company’s CEO and CFO, respectively.

The options vested immediately.

The aggregate estimated value using

the plain vanilla Black-Scholes Pricing Model, based on a volatility rate of 41 %

and a call option value of $ 0.8581 , and an expected term of 5.5 years,

was $ 270,296 .

February 22, 2024, the Company also granted options to purchase an aggregate 79,166

shares of the Company’s common stock, having an exercise price of $ 1.92

per share, exercisable over a 10 -year

term, to a total of three of the Company’s directors.

The options vested immediately.

The aggregate estimated value using the

plain vanilla Black-Scholes Pricing Model, based on a volatility rate of 41 %

and a call option value of $ 1.1407 , and an expected term of 5.5 years,

was $ 90,306 .

October 24, 2023, the Company granted options to purchase an aggregate 42,500

shares of the Company’s common stock, having an exercise price of $ 1.60

per share, exercisable over a 10 -year

term, to a total of four employees.

The options will vest one-year from the date of grant.

The estimated value using the plain

vanilla Black-Scholes Pricing Model, based on a volatility rate of 93 %

and a call option value of $ 0.7118 ,

and an expected term of 5.5 years, was $ 30,253 .

The options were expensed over the vesting period, resulting in $ 24,581

of stock-based compensation expense during the years ended December 31, 2024 and 2023, respectively.

August 8, 2023, the Company granted options to purchase an aggregate 30,000

shares of the Company’s common stock under the 2022 Plan, having an exercise price of $ 6.00

per share, exercisable over a 10 -year

term, to the chairman of the audit committee.

The options will vest monthly over a one-year period.

The estimated value using the

plain vanilla Black-Scholes Pricing Model, based on a volatility rate of 39 %

and a call option value of $ 0.1644 , and an expected term of 3 years,

was $ 4,932 .

The options were expensed over the vesting period, resulting in $ 2,980

of stock-based compensation expense during the years ended December 31, 2024 and 2023, respectively.

August 8, 2023, the Company granted options to purchase an aggregate 30,000

shares of the Company’s common stock under the 2022 Plan, having an exercise price of $ 2.51

per share, exercisable over a 10 -year

term, to one of its directors.

The options will vest monthly over a one-year period.

The estimated value using the plain vanilla

Black-Scholes Pricing Model, based on a volatility rate of 39 %

and a call option value of $ 0.7885 , and an expected term of 3 years,

was $ 23,655 .

The options were expensed over the vesting period, resulting in $ 14,291

of stock-based compensation expense during the years ended December 31, 2024 and 2023, respectively.

TO CONSOLIDATED FINANCIAL STATEMENTS

February 28, 2023, the Company awarded fully vested options to purchase 16,000

shares of common stock under the 2022 Plan at an exercise price equal to $ 4.125

per share, exercisable over a 10 ten-year

period to an employee.

The estimated value using the plain vanilla Black-Scholes Pricing Model, based on a volatility rate of 50 %

and a call option value of $ 2.0249 , and an expected term of 5 years,

was $ 32,399 .

The options were expensed as stock-based compensation expense during the year ended December 31, 2023.

following is a summary of information about the Stock Options outstanding at December 31, 2024.

Schedule of Underlying Stock Options Outstanding

Shares Underlying

Underlying Options Outstanding

following is a summary of activity of outstanding stock options:

of Activity of Outstanding Stock Options

Balance, December 31, 2022

Options granted

Options canceled

Balance, December 31, 2023

Options granted

Balance, December

Exercisable, December

Company’s Board of Directors and stockholders adopted the 2022 Equity Incentive Plan (the “2022 Plan”) effective January

The 2022 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units,

performance awards, and other equity-based awards to employees, directors, and consultants.

number of shares reserved for issuance under the 2022 Plan was initially 600,000 shares and was adjusted in connection with the Company’s

2023 reverse stock split.

Pursuant to the 2022 Plan, the number of shares of common stock available for issuance thereunder automatically

increases on the first day of each fiscal year of the Company in an amount equal to 5 % percent of the total number of shares of our common

stock outstanding on the last day of the immediately preceding fiscal year of the Company, unless the board of directors takes action

prior thereto to provide that there will not be an increase in the share reserve for such year or that the increase in the share reserve

for such year will be of a lesser number of shares of common stock than would otherwise occur.

As of December 31, 2025, the annual increases

to the plan resulted in 1,633,000 shares being able to be issued under the plan.

of December 31, 2025, a total of 1,603,000 shares were reserved for issuance under the 2022 Plan, of which options to purchase 1,383,470

shares of common stock were outstanding.

2025, the Company granted options to purchase 790,000

shares of common stock with a total grant date fair value of $ 810,044

and exercise prices ranging from $ 1.93

The fair value of stock options

granted during 2025 were estimated using the Black-Scholes option pricing model with the following weighted-average

interest rate:

5.0 – 6.5 years

volatility was based on the historical volatility of comparable public companies, and the expected term was determined using the simplified

options granted during 2025 generally vest over a three-year period and expire ten years from the grant date.

Certain options granted

in prior periods vested upon grant.

The Company accounts for forfeitures as they occur and, accordingly, expects substantially all outstanding

options to vest.

of December 31, 2025, options to purchase 803,542

shares of common stock were vested and exercisable, with a weighted-average exercise price of $ 2.42

with a weighted-average exercise price of $ 2.42

and a remaining contractual life of 7.9

years on a weighted-average basis.

of Stock Option Activity

Exercise Price

Intrinsic Value

Outstanding at December 31, 2024

Outstanding at December 31, 2025

compensation expense was $ 245,419 and $ 414,614 for the years ended December 31, 2025, and 2024, respectively.

of December 31, 2025, total unrecognized compensation cost related to unvested stock options was $ 599,549 , which is expected to be recognized

over the remaining weighted-average vesting period of 2.4 years.

As of December 31, 2025, the weighted-average remaining contractual

life of outstanding options was 8.6 years.

15 – Common Stock Warrants

to purchase a total of 3,462,162 shares of common stock at a weighted average exercise price of $ 1.88 per share, with a weighted average

remaining life of 5.11 years, were outstanding as of December 31, 2024.

Issued Pursuant to Convertible Note Financing

discussed in further detail in Note 4, on July 24, 2024, the Company issued to Kaufman Kapital, in a private placement (i) a 12 % Senior

Secured Convertible Promissory Note in the principal amount of up to $ 3,400,000 , (ii) a warrant to purchase 1,000,000 shares of common

stock at an exercise price of $ 1.00 per share, and (iii) a warrant to purchase 500,000 shares of common stock at an exercise price of

$ 1.50 per share, in consideration of an initial loan in the principal amount of $ 2,000,000 made to the Company under the Convertible

The proceeds received were allocated between the debt and warrants on a relative fair value basis.

The relative aggregate estimated

value of the $ 1.00 Warrants using the Black-Scholes Pricing Model, based on a weighted average volatility rate of 39 % and a weighted

average call option value of $ 0.2138 , was $ 20,303 , of which $ 6,214 was recognized as finance expense during the year ended December 31,

As of December 31, 2024, there was $ 14,089 of unamortized expenses expected to be expensed over the remaining life of the outstanding

The relative aggregate estimated value of the $ 1.50 Warrants using the Black-Scholes Pricing Model, based on a weighted average

volatility rate of 39 % and a weighted average call option value of $ 0.0768 , was $ 655 , of which $ 201 was recognized as finance expense

during the year ended December 31, 2024.

As of December 31, 2024, there was $ 454 of unamortized expenses expected to be expensed over

the remaining life of the outstanding debt.

TO CONSOLIDATED FINANCIAL STATEMENTS

Issued Pursuant to Unit Offering to Related Parties

July 15, 2024, the Company entered into Subscription Agreements with three related parties, consisting of Eric Healy, the Company’s

Chief Executive Officer;

Eagle Vision;

and the Company’s President, pursuant to which such investors agreed to purchase $ 525,000

of “Units” from the Company, each Unit consisting of (i) 100 shares of common stock, and (ii) a warrant to purchase 125 shares

of common stock over the following ten years at an exercise price of $ 1.00 per share, at a purchase price per Unit equal to $ 75.82 .

Company completed the sale of the Units to Eric Healy and the Company’s President on July 23, 2024, and the sale of the Units to

Eagle Vision on August 30, 2024, resulting in the issuance of an aggregate of 692,429 shares of common stock and warrants to purchase

865,536 shares of common stock.

Issued Pursuant to Underwriting Agreement

June 28, 2024, pursuant to the Underwriting Agreement, the Company executed and delivered to the Representative a common stock Purchase

Warrant (the “Representative’s Warrant”) to purchase up to 100,625 shares of Common Stock, which may be exercised beginning

on December 23, 2024 (the date that is 180 days following the commencement of sales of common stock in connection with the Offering (the

“Commencement Date”)) until June 26, 2029.

The initial exercise price of the Representative’s Warrant is $ 0.96 per

share, which is equal to 120% of the public offering price for the Shares .

Issued Pursuant to Debt Offering

various dates from January 9, 2024 through May 22, 2024 , the Company issued Warrants to

purchase an aggregate total of 518,750 shares of common stock at an exercise price of $ 2.00 per share in connection with the sale of

Senior Notes to a group of Investors led by Eagle Vision, in the aggregate principal amount of $ 1,675,000 .

The proceeds received were

allocated between the debt and warrants on a relative fair value basis.

The relative aggregate estimated value of the warrants using

the Black-Scholes Pricing Model, based on a weighted average volatility rate of 40 % and a weighted average call option value of $ 0.1560 ,

was $ 80,908 , which was recognized as finance expense during the year ended December 31, 2024.

of Senior Notes and Warrants

connection with the sale of the Purchased Securities to Kaufman Kapital under the SPA, the Company entered into an Omnibus Amendment

to Note Documents with substantially all of the Holders of the Company’s Senior Notes and Warrants issued under that certain Subscription

Agreement dated as of January 10, 2024, as amended, pursuant to which, among other things, (i) the exercise price of the Warrants issued

to the Holders was reduced from $ 2.00 to $ 1.00 , (ii) the outside maturity date of the Senior Notes held by the Holders was extended from December 31, 2024 to December 31, 2025 (subject to further extension in the event the maturity date of the Convertible Note is extended),

(iii) the Company’s obligation to make payments of principal under the Senior Notes held by the Holders beginning July 1, 2024

has been eliminated, and instead all obligations of the Company under such Senior Notes will be due in one lump sum on the maturity date

of the Senior Notes, and (iv) the Company’s obligations under the Convertible Note and liens granted to the holder thereof, will

be pari passu with the Company’s obligations under the Senior Notes held by the Holders and liens granted to the holders thereof.

The amendment warrants resulted in $ 89,949 of additional interest expense.

Issued Pursuant to Debt Offering

July 1, 2023 , the Company issued warrants to purchase an aggregate total of 30,000 shares

of common stock at an exercise price of $ 6.00 per share to note holders in connection with the sale of senior secured promissory notes

in the aggregate principal amount of $ 170,000 to four accredited investors.

The proceeds received were allocated between the debt and

warrants on a relative fair value basis.

The aggregate estimated value of the warrants using the Black-Scholes Pricing Model, based on

a weighted average volatility rate of 54 % and a weighted average call option value of $ 3.8171 , was $ 114,513 , of which $ 46,090 was recognized

as finance expense during the year ended December 31, 2023.

As of December 31, 2023, there were no unamortized expenses expected to be

expensed over the remaining life of the outstanding debt, as the debt was repaid in full on June 16, 2023.

Underwriters’

Warrants Issued Pursuant to IPO

June 21, 2023, the Company issued warrants to purchase 82,110 shares at $ 7.20 per share, exercisable between December 18, 2023 and December

18, 2028, pursuant to the underwriters’ agreement.

The aggregate estimated value of the warrants using the Black-Scholes Pricing

Model, based on a weighted average volatility rate of 54 % and a weighted average call option value of $ 1.7981 , was $ 147,639 .

TO CONSOLIDATED FINANCIAL STATEMENTS

following is a summary of information about our warrants to purchase common stock outstanding at December 31, 2024.

of Warrants to Purchase Common Stock Outstanding

Underlying Warrants Outstanding

fair value of each warrant grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average

assumptions used for grants under the fixed option plan:

of Weighted-Average Assumptions Used for Grants Under Fixed Option Plan

Average risk-free interest rates

Average expected life (in years)

weighted average fair value of warrants granted with exercise prices at the current fair value of the underlying stock was approximately

$ 1.09 and $ 6.88 per warrant for the years ended December 31, 2024 and 2023, respectively.

following is a summary of activity of outstanding common stock warrants, as retrospectively presented pursuant to the amendment on March

of Outstanding Common Stock Warrants

Balance, December 31, 2022

Balance, December 31, 2023

Balance, December

Exercisable, December

21 – Income Taxes

Company incurred a net operating loss for the period from November 19, 2021 (the effective date of the conversion from a limited liability

company to a corporation) through December 31, 2024 and, accordingly, no provision for income taxes has been recorded.

In addition, no

benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets.

At December 31, 2024, the Company

had approximately $ 9,512,000 of federal net operating losses.

The net operating loss carry forwards, if not utilized, will begin to expire

provision (benefit) for income taxes for the period from November 19, 2021 (the effective date of the conversion from a limited liability

company to a corporation) through December 31, 2024 were assuming a 21 % effective tax rate.

TO CONSOLIDATED FINANCIAL STATEMENTS

components of the Company’s deferred tax asset are as follows:

of Deferred Tax Asset

Deferred tax assets:

operating loss carry forwards

Net deferred tax assets before valuation allowance

Valuation allowance

Company evaluated the warrants under ASC 815 and determined that they meet the criteria for equity classification.

November 14, 2025, the Company issued warrants to purchase 41,384 shares of its common stock in connection with an underwritten offering

of common stock.

The warrants fully vest on May 13, 2026.

The warrants are exercisable at an exercise price of $ 3.00 per share and expire

on November 14, 2030 .

The warrants are classified as equity and were recorded to additional paid-in capital at their estimated fair value

on the issuance date, determined using the Black-Scholes option pricing model.

issuance of these warrants did not result in the receipt of additional cash proceeds beyond those received in the related financing transaction.

Refer to Note 13 – Changes in Stockholders’ Equity, for additional information on the offering relating to the issuance of these warrants.

the year ended December 31, 2025, warrants to purchase 1,504,844 shares were exercised, resulting in aggregate cash proceeds of $ 1,500,799 .

aggregate intrinsic value of warrants exercised during 2025 was $ 1,756,000 .

June 4, 2025, Kaufman Kapital exercised warrants to purchase 1,000,000 shares of the Company’s common stock at an exercise price

of $ 1.00 per share, resulting in cash proceeds of $ 1,000,000 .

These warrants were originally issued in connection with the Kaufman Kapital

Senior Secured Convertible Note.

from other series were exercised for the purchase of an aggregate of 504,844 shares of the Company’s common stock at exercise prices

ranging from $ 0.96 to $ 1.00 per share, resulting in aggregate cash proceeds of $ 500,799 .

These exercises included 362,500 shares related

to the Eagle Vision Senior Secured Note at an exercise price of $ 1.00 per share and 101,128 shares related to underwriter warrants issued

in connection with a secondary offering at an exercise price of $ 0.96 per share.

total, warrants were exercised at a weighted-average exercise price of approximately $ 1.00 per share during the year ended December 31,

to Note 12 – Debt for additional information regarding the Kaufman Kapital Senior Secured Convertible Note and Eagle Vision Senior

Secured Note.

June 4, 2025, the Company amended certain warrants to extend their contractual term.

The modification was accounted for as an equity-classified

warrant modification, and the incremental fair value of $ 32,099 resulting from the extension was recognized as an increase to additional

paid-in capital.

No other material terms, including exercise price or number of shares issuable, were changed as part of the amendment.

of Warrant Activity

Number of Warrants

Weighted-Average Exercise Price

Weighted-Average Remaining Contractual Term (Years)

Outstanding at December 31, 2024

Outstanding at December 31, 2025

Exercisable at December 31, 2025

remaining contractual life of outstanding warrants ranges from 1 to 8.7 years.

16 – Fair Value of Financial Instruments

FASB ASC 820-10-5, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date (an exit price).

The standard outlines a valuation framework and creates

a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures.

Under GAAP, certain assets and liabilities must be measured at fair value, and FASB ASC 820-10-50 details the disclosures that are required

for items measured at fair value.

Company has cash, notes receivable, and debts that must be measured under the fair value standard.

The Company’s financial assets

and liabilities are measured using inputs from the three levels of the fair value hierarchy.

The three levels are as follows:

1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access

at the measurement date.

2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets

or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g.,

interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation

or other means (market corroborated inputs).

3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or

following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balances sheet as of December

31, 2025 and 2024:

Schedule of Valuation of Financial Instruments at Fair Value on a Recurring Basis

Fair Value Measurements at December 31, 2025

Right-of-use-asset

Notes receivable

Convertible notes payable, related parties net of $ 66,587 of discounts

Notes payable

Notes payable, related parties

Lease liabilities

Total liabilities

Total assets and liabilities

$ ( 1,534,500 )

$ ( 3,679,463 )

deferred tax assets

Company has incurred cumulative losses which make realization of a deferred tax asset difficult to support in accordance with ASC 740.

Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than

not that the net deferred tax assets will not be fully realizable.

Accordingly, the Company provided for a full valuation allowance against

its net deferred tax assets at December 31, 2024.

accordance with ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

Fair Value Measurements at December 31, 2024

Right-of-use-asset

Notes receivable

Convertible notes payable, related parties net of $ 66,587 of discounts

Notes payable

Notes payable, related parties

Lease liability

Total liabilities

Total assets and liabilities

$ ( 2,686,165 )

$ ( 3,521,286 )

were no transfers of financial assets or liabilities between Level 1 and Level 2 inputs for the years ended December 31, 2025 and 2024.

17 – Segment Reporting

Company is engaged in the development, marketing, sale, and distribution of plant-based, dehydrated fruit and vegetable snacks and powders.

The Company’s products are currently manufactured at its new production facility that commenced production in Pisco Peru in December

2024, and is supported by contract manufacturers in Peru, as necessary.

The Company’s customers are located throughout the United

The Company’s sales operations, which represent 100% of the Company’s consolidated sales, are one of its two reportable

The sales operations’ segment revenues are predominately earned as consumer products are sold to big box retail customers

throughout the United States and via the Company’s online platform.

The Company aggregates its operating divisions into two reportable

segments due to the operating divisions having similar economic characteristics with similar long-term financial performance, but different

geographic locations.

The Company’s sales occur entirely from, and within, the United States, while all of the Company’s

production processes are conducted in Latin America, which represent its other operating segment.

In addition, the Company’s operating

divisions offer customers the same products, operate in similar regulatory environments, purchase the majority of the merchandise for

retail sale from similar (and in many cases identical) vendors on a coordinated basis from a centralized location, serve of the same

customers, and are allocated capital from a centralized location.

Operating divisions are organized primarily on a geographical basis

so the operating division management team can be responsive to local needs of the operating division and can execute company strategic

plans and initiatives throughout the locations in their operating division.

This geographical separation is the primary differentiation

between these operating divisions.

The geographical basis of organization reflects how the business is managed and how the Company’s

Chief Executive Officer, who acts as the Company’s chief operating decision maker (“CODM”), assesses performance internally.

accounting policies of the retail operations segment are the same as those described in the summary of significant accounting policies

in Note 3 to the Consolidated Financial Statements.

The Company’s CODM assesses performance and allocates resources for the retail

operations segment using segment earnings before net interest expense, income tax expense and depreciation and amortization (“EBITDA”).

The Company defines EBITDA as earnings before interest taxes and depreciation.

The Company’s CODM also uses segment EBITDA to measure

the operational effectiveness of the Company’s financial model, compare the performance of core operating results between periods,

against budget and against competitors and evaluate whether to invest capital in the retail operations segment or in other parts of the

Company, such as for share repurchases, debt repayments or capital expenditures.

The Company’s CODM is not provided asset information

by reportable segment as asset information is provided to the CODM on a consolidated basis.

The Company’s capital expenditures

are predominately used in the Company’s production operations, rather than its retail operations.

TO CONSOLIDATED FINANCIAL STATEMENTS

following table presents the Company’s retail operations segment revenue, measure of segment profit or loss, significant segment

expenses and reconciliation of the U.S.

and Latin America operations segments’ EBITDA to consolidated net earnings before income

tax expense for the years ended December 31, 2024 and 2023:

Company is a consumer-packaged foods company focused on developing, manufacturing, marketing, and distributing clean-label, plant-based

dried fruit and vegetable snacks for retail and foodservice markets through BranchOut-branded products, private-label offerings, and

industrial ingredient sales.

In accordance with ASC 280, Segment Reporting, the Company has identified two operating and reportable segments

based on how its Chief Executive Officer, who serves as the Chief Operating Decision Maker (“CODM”), evaluates performance

and allocates resources:

States Operations – includes all sales, marketing, distribution, and customer relationships.

This segment generates substantially all of the Company’s consolidated revenue through

sales to retail customers, distributors, and e-commerce platforms within the United States.

American Operations – includes the Company’s production and manufacturing

activities, including its dehydration facility in Pisco, Peru, and related production support

Structure and Operations

Company’s United States Operations segment is responsible for revenue generation and customer engagement, while the Latin American

Operations segment supports these activities through the manufacture of finished goods and production of ingredient products.

is generated within the United States, and the Latin American Operations segment does not generate external revenue.

Instead, it operates

as an internal production function, with costs reflected in cost of goods sold and operating expenses.

Company manages these segments separately due to differences in function, cost structure, and geographic location.

The United States

Operations segment is focused on sales growth, distribution expansion, and brand development, while the Latin American Operations segment

is focused on production efficiency, capacity utilization, and cost management.

Evaluation and Measure of Profit or Loss

CODM evaluates segment performance and allocates resources primarily based on segment earnings before interest expense, interest income,

income taxes, stock compensation expense, impairment expense, and depreciation and amortization (“EBITDA”).

Segment EBITDA

is used by the CODM to:

operating performance and efficiency,

period-over-period results,

actual performance to budgets and strategic targets, and

capital allocation priorities across the business.

Operations segment, expenses include cost of goods sold from third party manufacturers for raisins and prunes as well as operating

expenses such as general and administrative, salaries and wages, professional fees, and other selling and administrative costs.

the Latin American Operations segment, expenses primarily include production-related costs, including manufacturing overhead, labor,

facility costs, and other operating expenses associated with the Company’s production activities.

During the year ended December

31, 2025, the Latin American Operations segment incurred significant costs associated with the ramp-up and operation of the Company’s

Peru facility, which negatively impacted segment EBITDA.

Corporate-level

expenses, including executive, finance, and administrative functions, are recorded within the U.S.

Operations segment and are not allocated

to the Latin American Operations segment for purposes of CODM evaluation.

and Capital Expenditures

CODM reviews asset information on a consolidated basis and does not evaluate assets by segment.

Accordingly, asset information is not

disclosed by reportable segment.

Capital expenditures are primarily associated with the Latin American Operations segment, reflecting

ongoing investment in manufacturing equipment, facility infrastructure, and production capacity.

Segment Information

following table presents revenue, significant expenses, and segment EBITDA for the Company’s reportable segments, together with

a reconciliation to consolidated net loss before income taxes for the years ended December 31, 2025 and 2024:

of Segment Reporting

For the Years Ended

segment sales

Latin American operations

segment cost of goods sold

operations segment expenses:

United States operations segment sales

Latin American operations segment cost of goods sold

United States operations segment cost of goods sold

United States operations segment expenses:

General and administrative

1 unchanged sentence

Professional fees

operating expenses

operations segment EBITDA

Total United States operating expenses

United States operations segment EBITDA

$ ( 2,160,543 )

Latin American operations

segment cost of goods sold

Latin American operations segment cost of goods sold

Latin American operations segment expenses:

2 unchanged sentences

Professional fees

Latin American operating expenses

Total Latin American operating expenses

Operating expenses

American operations segment EBITDA

$ ( 6,346,231 )

Latin American operations segment EBITDA

$ ( 10,640,295 )

2 unchanged sentences

$ ( 3,025,900 )

Reconciliation of net

earnings before income tax expense:

Reconciliation of net earnings before income tax expense:

Consolidated EBITDA

5 unchanged sentences

Interest expense

net loss before income tax expense

Stock compensation expense

Impairment of note receivable

Consolidated net loss before income tax expense

$ ( 6,124,672 )

$ ( 4,751,516 )

18 – Related Party Transactions

Kapital, led by Daniel Kaufman, is a beneficial owner holding more than 10 % of the Company’s outstanding common stock.

July 15, 2024, the Company entered into a Securities Purchase Agreement with Daniel L.

Kaufman, as described in Note 12.

As of December

31, 2025 the principal outstanding on the Convertible Note was $ 3,400,000 .

Kaufman Kapital exercised the $ 1.00 Warrant on June 24, 2025,

as described in Note 15.

The $ 1.50 Warrant has not been exercised as of December 31, 2025.

August 29, 2024, the Company borrowed $ 1,200,000 from Kaufman Kapital pursuant to the Secured Note, as described in Note 12.

May 7, 2025, September 30, 2025, and November 17, 2025 the Company repaid $ 325,000 , $ 375,000 , and $ 500,000 of principal on the Secured

The principal outstanding is $ 0 as of December 31, 2025.

to December 31, 2025, the Company entered into a $ 1,500,000 Senior Secured Promissory Note with Kaufman Kapital.

In addition, Kaufman

Kapital converted $ 500,000 of principal outstanding under the Company’s Convertible Note into 659,457 shares of the Company’s

common stock.

See Note 21 – Subsequent Events.

Vision Fund LP is led by the Company’s CFO, John Dalfonsi.

discussed further in Note 12 above, on various dates from January 9, 2024 through May 22, 2024, the Company completed the sale of an

aggregate $ 1,675,000 of Senior Secured Notes and Warrants to purchase an aggregate of 518,750 shares of the Company’s common stock,

to a group of investors led by Eagle Vision Fund LP.

the year ended December 31, 2025 the Company repaid $ 1,560,000 of remaining principal outstanding under the Senior Secured Notes resulting

in the payment in full of such notes as of December 31, 2025.

the year ended December 31, 2025, of the 518,750 Warrants issued to purchasers of the Senior Secured Notes, Warrants were exercised to

purchase an aggregate of 350,000 shares of the Company’s common stock at an exercise price of $ 1.00 per share for aggregate cash

proceeds of $ 350,000 .

19 – Commitments and Contingencies

time to time, the Company may be a party to various legal matters, threatened claims, or proceedings in the normal course of business.

Legal fees and other costs associated with such actions are expensed as incurred.

The Company assesses the likelihood of outcomes in

litigation and makes appropriate accruals and disclosures based on current information and legal counsel’s opinions.

no guarantee that these matters won’t significantly impact the Company’s business, financial position, or results of operations.

Legal accruals are recorded when and if it is determined that a loss related to a certain matter is both probable and reasonably estimable.

Company is the subject of a lawsuit commenced by its former Chief Financial Officer alleging wrongful termination.

information currently available and on the advice of legal counsel, the Company is engaged in settlement discussions related to this

While no agreement has been finalized, the Company believes that a resolution of the matter may result in a payment.

time, the Company is unable to determine that a loss is both probable and reasonably estimable and, accordingly, no liability has

been recorded in the accompanying consolidated financial statements.

ultimate outcome of this matter remains uncertain.

than as set forth above, there are no legal matters pending against the Company.

May 10, 2024, the Company entered into a ten-year lease for the 50,000 square-foot Peru Facility, which commenced operations in December

The lease requires monthly lease payments of $ 8,000 in the first two years of the lease, $ 20,000 in the third year of the lease,

$ 22,000 in the fourth year of the lease, $ 24,000 in the fourth year of the lease, and $ 25,000 thereafter.

The lease also has a 10-year

renewal option, and a buy-out option under which the Company may purchase the Peru Facility for $ 1,865,456 .

Company leases equipment under a non-cancelable finance lease payable in monthly installments of $ 3,657 expiring on May 31, 2028 .

Manufacturing Agreement

January 19, 2022, the Company entered into a contract manufacturing agreement with NXTDried Superfoods SAC to produce products for distribution

by the Company.

The Company agreed to pre-pay for inventory via an advance to enable the manufacturer to invest in necessary processing

facilities that will be reimbursed to the Company on an agreed per kg basis over the period of 2022 to 2026.

License Agreement

May 7, 2021, the Company entered into a license agreement (“License Agreement”) with EnWave, pursuant to which EnWave licensed

to the Company a collection of patents and intellectual property (the “EnWave Technology”) used to manufacture and operate

vacuum microwave dehydration machines purchased by the Company from EnWave (the “EnWave Equipment”).

The License Agreement

is effective as long as EnWave possesses its EnWave technology.

various dates the License Agreement has been amended to, among other things, modify the exclusivity retention royalty payments required

to be paid by the Company.

The License Agreement entitles EnWave to a fixed royalty percentage on all of the Company’s revenue

from the sale of products produced using the EnWave Technology, net of trade or volume discounts, refunds paid, settled claims for damaged

goods, applicable excise, sales and withholding taxes imposed at the time of the sale, and provides the Company with certain exclusivity

order to maintain exclusivity, the Company must make annual royalty minimum payments to EnWave of $ 250,000 per year, commencing in 2025

and continuing through each subsequent year in perpetuity, as long as the Company elects to maintain exclusivity.

The Company recognized

$ 250,000 of royalty expenses for the year ended December 31, 2025.

addition to the initial EnWave Equipment we purchased, the Company agreed to purchase additional equipment from EnWave overtime.

additional equipment purchase schedule, as amended, required the Company to purchase a “Second EnWave Machine”, which was

purchased in full on December 12, 2024.

The Company is also required to execute an Equipment Purchase Agreement for a 120kW, or greater

rated power, EnWave Equipment (the “Third EnWave Machine”) on or before December 31, 2025, and satisfy the payment obligations

required with respect to the Third EnWave Machine by the License Agreement.

September 16, 2025 the Company entered into a Purchase Agreement for the Third EnWave Machine, a refurbished 120kW REV vacuum microwave

for a purchase price of $ 1,500,000 .

The purchase price is payable in 24 equal monthly installments, commencing April 1, 2026, pursuant

to a secured promissory note (the “Promissory Note”) bearing interest at the rate of 8.00 % per annum.

Company is also required to enter an Equipment Purchase Agreement for a 120kW, or greater, rated power EnWave Equipment (the “Fourth

EnWave Machine”) on, or before, December 31, 2026, and to satisfy the payment obligations required with respect to the Fourth EnWave

Machine by the License Agreement.

The license is not discernible from the equipment;

therefore, the license costs have been capitalized

and depreciated over the useful life of the equipment.

to the Amendment, among other things, EnWave granted the Company a global exclusive license (but subject to existing licenses previously

issued by EnWave to two other manufacturers) to manufacture Dragon Fruit products using EnWave’s technology under the License Agreement.

20 - Income Taxes

Company incurred net operating losses for the years ended December 31, 2025 and 2024.

Accordingly, no provision for income taxes has

been recorded.

In addition, no income tax benefit has been recognized due to the uncertainty of the realization of deferred tax assets.

Tax Rate Reconciliation

provision (benefit) for income taxes differs from the amount computed by applying the U.S.

federal statutory income tax rate to the Company’s

loss before income taxes for the years ended December 31, 2025 and December 31, 2024 are as follows:

Schedule of Reconciliation of Effective Income Tax Rate

federal statutory rate

Change in valuation allowance

Effective tax rate

components of the Company’s deferred tax asset are as follows:

Schedule of Net

Deferred Tax Assets

Deferred tax assets:

Net operating loss carryforwards

Net deferred tax assets before valuation allowance

Valuation allowance

( 2,703,836 )

( 1,997,520 )

Net deferred tax assets

Company has incurred cumulative losses since inception which makes realization of its deferred tax assets uncertain.

Based on the available

objective evidence, including the Company’s history of operating losses, management believes it is more likely than not that the

deferred tax assets will not be realized.

Accordingly, the Company has recorded a full valuation allowance against its net deferred tax

assets as of December 31, 2025 and 2024.

Operating Loss Carryforwards

December 31, 2025, the Company had approximately $ 12.9 million of federal net operating loss carryforwards available to offset future

taxable income.

Federal net operating losses generated after December 31, 2017 may be carried forward indefinitely;

however, the utilization

of such losses is limited to 80 % of taxable income in any given year.

of the Company’s net operating loss carryforwards may be subject to annual limitations under Section 382 of the Internal Revenue

Code due to changes in ownership.

taxes paid (net of refunds) were as follows:

of Income Tax Paid

Company did not incur or pay income taxes during the years ended December 31, 2025 and 2024 due to operating losses.

Company’s foreign subsidiary is subject to income taxation in Peru.

Deferred tax assets related to the foreign jurisdiction have

not been recognized due to cumulative losses and the Company’s overall valuation allowance position.

Tax Positions

accordance with ASC 740, the Company evaluates uncertain tax positions using a two-step recognition and measurement process.

has evaluated its tax positions and determined that there are no uncertain tax positions as of December 31, 2025 and 2024.

21 – Subsequent Events

Company evaluates events that have occurred after the balance sheet date through the date hereof, which these financial statements were

No events occurred of a material nature that would have required adjustments to or disclosure in these financial statements except

February 18, 2025, the Company entered into entered into a First Amendment to the ATM Agreement to increase the aggregate offering price

of the Shares that the Company may sell under the ATM Agreement to up to $ 5,000,000 .

Subsequent to December 31, 2024, the Company sold

a total of 1,303,115 shares of common stock, including 182,693 shares authorized, but unissued at December 31, 2024, at prevailing market

prices under the ATM Agreement for aggregate net proceeds of $ 2,407,448 , after deducting applicable expenses, including a commission

paid to Alexander Capital equal to 3 % of the gross proceeds from the sale of the shares.

February 14, 2025, the Company received aggregate proceeds of $ 38,157 on the exercise of Representative’s Warrants to purchase

an aggregate of 39,747 shares of common stock.

Company evaluated subsequent events through the date the consolidated financial statements were issued.

January 28, 2026, the Company borrowed $ 1,500,000 from Kaufman Kapital, pursuant to a Senior Secured Promissory Note (the “Note”).

The Note matures on January 28, 2027 and bears interest at a rate of 8 % per annum.

The Company’s obligations under the Note are

secured by a lien on substantially all of the Company’s assets pursuant to a Security Agreement previously entered into in connection

with the issuance of the Company’s 12 % Senior Secured Convertible Promissory Note dated July 23, 2024.

The Note includes customary

affirmative and negative covenants and events of default.

January 28, 2026, Kaufman Kapital converted $ 500,000 of principal outstanding under the Convertible Note into 659,457 shares of the Company’s

common stock.

Refer to Note 12 – Debt for additional information.

February 24, 2026, warrants were exercised to purchase 37,500 shares of the Company’s common stock at an exercise price of $ 1.00

per share, resulting in aggregate cash proceeds of $ 37,500 .

At-the-Market

January 27, 2026, the Company entered into an At-The-Market Issuance Sales Agreement (the “ATM Agreement”) with Alexander

Capital, L.P., as sales agent.

Under the ATM Agreement, the Company may offer and sell shares of its common stock from time to time through

the sales agent for aggregate gross proceeds of up to $ 1,500,000 .

The sales agent is entitled to a commission equal to 3.0 % of the gross

proceeds of shares sold under the ATM Agreement.

of February 13, 2026, the Company had issued and sold 500,000 shares of common stock under the ATM Agreement for aggregate gross proceeds

of $ 1,499,873 .

February 10, 2026, the Compensation Committee of the Board of Directors approved the grant of stock options under the 2022 Plan to directors,

employees, and consultants to purchase an aggregate of 1,390,000 shares of the Company’s common stock at an exercise price of $ 2.96

per share, representing the fair market value of the Company’s common stock on the grant date.

All options have a ten-year term.

grants include a combination of time-based and performance-based awards.

Time-based options vest over periods of up to 36 months, while

certain performance-based options vest upon the Company achieving specified revenue and EBITDA targets.

The Company will recognize stock-based

compensation expense related to these awards in future periods in accordance with ASC 718.

Because these grants were made after December

31, 2025, they did not impact the Company’s consolidated financial statements for the year ended December 31, 2025.

Refund – Gain Contingency

On March 4, 2026, the U.S.

Court of International Trade ruled that certain

tariffs imposed under the International Emergency Economic Powers Act were unlawful.

As a result, the Company may be entitled to a refund

of tariffs previously paid.

As of December 31, 2025, the Company had paid $ 348,752 of such tariffs.

The Company has concluded that recovery

of these amounts represents a gain contingency under ASC 450, Contingencies.

Accordingly, no receivable or reduction of cost of goods

sold has been recognized in the 2025 consolidated financial statements.

Any recovery will be recognized when realized or realizable.

timing and amount of recovery remain subject to further legal proceedings and administrative action by U.S.

Customs and Border Protection.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data