What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 544 added, 766 removed, 483 unchanged (73% of the section changed)

FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

BRANCHOUT FOOD INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

Current assets:

Accounts receivable

Accounts receivable, net

Advances on inventory purchases

current assets

Other current assets

Total current assets

2 unchanged sentences

Note receivable

Liabilities and Stockholders’

Liabilities and Stockholders’ Equity

Current liabilities:

1 unchanged sentence

Accrued expenses

Notes payable, current

Notes payable, related

Notes payable, current

Operating lease liability,

current portion

lease liability, current portion

Other current liabilities

Convertible notes payable, related parties, net of discounts

Notes payable, current portion

Notes payable, related parties

Notes payable, current portion

Finance lease liability, current portion

Total current liabilities

Convertible notes payable, related parties,

net of discounts, net of current portion

Notes payable, net of current portion

Notes payable, related parties, net of discounts,

net of current portion

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;

6,924,600 and 4,044,252 shares issued and outstanding at September 30, 2024 and December 31,

2023, respectively

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

9,584,769 and 8,424,600 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

Accumulated other comprehensive

Accumulated other comprehensive loss

Accumulated deficit

( 18,480,439 )

( 17,562,057 )

Total Stockholders’

Total Liabilities and

Stockholders’ Equity

accompanying notes to financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

See accompanying notes to financial statements.

BRANCHOUT FOOD INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended

For the Nine Months Ended

Cost of goods sold

profit (loss)

Operating expenses:

1 unchanged sentence

Salaries and wages

operating expenses

Professional fees

Total operating expenses

Operating loss

( 1,025,100 )

( 2,059,353 )

Other income (expense):

Interest income

other income (expense)

$ ( 1,270,805 )

$ ( 705,993 )

$ ( 3,264,326 )

$ ( 2,456,596 )

Other comprehensive loss:

on foreign currency translation

Net other comprehensive

$ ( 1,272,657 )

$ ( 705,993 )

$ ( 3,266,120 )

$ ( 2,456,596 )

Weighted average common

shares outstanding - basic and diluted

Net loss per common

share - basic and diluted

accompanying notes to financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

the Three Months Ended September 30, 2024

Subscriptions

Comprehensive

Stockholders’

Balance, June 30, 2024

$ ( 14,804,062 )

Common stock issued pursuant to secondary public

Common stock units sold to executives

Stock options issued for services

Common stock warrants granted to note holders

pursuant to debt financing

Amended warrants

Loss on foreign currency translation

( 1,270,805 )

Interest expense

Total other income (expense)

$ ( 918,382 )

Balance, September 30, 2024

$ ( 1,050,967 )

the Three Months Ended September 30, 2023

Subscriptions

Comprehensive

Stockholders’

Balance, June 30, 2023

Other comprehensive gain:

Gain on foreign currency translation

Net other comprehensive loss

$ ( 910,173 )

Common stock issued for services

Stock options issued for services

Balance, September 30, 2023

$ ( 1,050,967 )

the Nine Months Ended September 30, 2024

Weighted average common shares outstanding - basic and diluted

Net loss per common share - basic and diluted

See accompanying notes to financial statements.

BRANCHOUT FOOD INC.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Preferred Stock

Subscriptions

3 unchanged sentences

$ ( 17,562,057 )

Common stock issued pursuant to secondary public

Common stock units sold to executives

Common stock issued for services

Common stock issued pursuant to ATM program

Exercise of underwriters’ warrants

Stock options issued for services

Common stock warrants granted to note holders

pursuant to debt financing

Amended warrants

Loss on foreign currency translation

( 3,264,326 )

Balance, September 30, 2024

Gain on foreign currency translation

Balance, March 31, 2025

$ ( 18,480,439 )

the Nine Months Ended September 30, 2023

Preferred Stock

Subscriptions

4 unchanged sentences

$ ( 12,810,541 )

$ ( 8,884,831 )

$ ( 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

Common stock warrants granted to note holders pursuant to debt financing

( 1,050,967 )

Balance, September 30, 2023

Balance, March 31, 2024

$ ( 13,861,508 )

accompanying notes to financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

Cash flows from operating

See accompanying notes to financial statements.

BRANCHOUT FOOD INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

Cash flows from operating activities

$ ( 918,382 )

$ ( 1,050,967 )

Adjustments to reconcile

net loss to net cash used in operating activities:

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

Depreciation expense

Loss on disposal of property and equipment

Amortization of debt discounts

Common stock issued for

Options and warrants issued

Amended warrants

Decrease (increase) in

Common stock issued for services

Options and warrants issued for services

Decrease (increase) in assets:

Accounts receivable

( 1,035,104 )

Advances on inventory purchases

1 unchanged sentence

Right-of-use asset

Increase (decrease) in

Increase (decrease) in liabilities:

Accounts payable

Accounts payable, related

Accounts payable, related parties

Accrued expenses

lease liability

cash used in operating activities

( 3,259,049 )

( 3,258,248 )

Cash flows from investing

Purchase of property and

( 2,120,337 )

received on notes receivable

Net cash used in investing

( 2,095,691 )

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

Operating lease liability

Net cash used in operating activities

( 1,927,122 )

Proceeds received on notes

payable, related parties

Cash flows from investing activities

Purchase of property and equipment

Payments received on notes receivable

Net cash used in investing activities

Cash flows from financing activities

Payment of deferred offering costs

Repayment of notes payable

related parties

Repayments on revolving

line of credit

Principal payments on finance

from sale of common stock

Net cash provided by financing

of exchange rate changes on cash

Net increase in cash

and restricted cash - beginning of period

Proceeds received on notes payable, related parties

Principal payments on finance lease

Proceeds from sale of common stock pursuant to ATM program

Proceeds from exercise of underwriters’ warrants

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net increase (decrease) in cash

Cash - beginning of period

Cash - ending of period

Supplemental disclosures:

Interest paid

Income taxes paid

Non-cash investing and financing transactions:

purchased with debt financing

fair value of warrants issued as a debt discount

fair value of shares issued on debt conversions

recognition of right-of-use assets and lease liabilities

accompanying notes to financial statements.

TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Relative fair value of warrants issued as a debt discount

See accompanying notes to financial statements.

TO THE CONDENSED FINANCIAL STATEMENTS

1 – Nature of Business and Significant Accounting Policies

(“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, 2017.

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 powders.

On April 26, 2024, the Company formed a wholly-owned subsidiary in Peru, in the form of a legal

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

square-foot food processing plant in Pisca, Peru (the “Peru Facility”).

The Company began manufacturing

products at the Peru F acility in October, 2024.

The Company also purchases inventory

from contract manufacturers based in South America and North America.

The Company’s

products are produced using a new proprietary dehydration technology that the Company licenses from a third party .

Company’s customers are primarily located throughout the United States.

(“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

of Accounting

7 unchanged sentences

the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring

nature) necessary to present fairly the financial position as of September 30, 2024, the results of operations for the three and nine

months ended September 30, 2024 and 2023, and cash flows for the nine months ended September 30, 2024 and 2023.

The results of operations

for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the full year.

The balance sheet as of December 31, 2023 was derived from our audited financial statements.

The accompanying condensed consolidated

financial statements and notes thereto should be read in conjunction with the audited financial statements for the year ended December

31, 2023, which were included in our Annual Report on Form 10-K.

The Company follows the same accounting policies in the preparation

of interim reports.

nature) necessary to present fairly the financial position as of March 31, 2025, the results of operations for the three months ended

March 31, 2025 and 2024, and cash flows for the three months ended March 31, 2025 and 2024.

The results of operations for the three months

ended March 31, 2025 are not necessarily indicative of the results to be expected for the full year.

The balance sheet as of December

31, 2024 was derived from our audited financial statements.

The accompanying condensed consolidated financial statements and notes thereto

should be read in conjunction with the audited financial statements for the year ended December 31, 2024, which were included in our

Annual Report on Form 10-K.

The Company follows the same accounting policies in the preparation of interim reports.

preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets

4 unchanged sentences

accompanying consolidated financial statements include the accounts of the following entities, all of which were under common control

and ownership at September 30, 2024:

and ownership at March 31, 2025:

Food Sucursal Peru (2)

1 unchanged sentence

wholly-owned subsidiary of BranchOut Food Inc.

in the form of a branch.

established on April 26, 2024 in the form of a branch.

consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above.

1 unchanged sentence

are located in Bend, Oregon.

Reclassifications

reclassifications have been made to the prior years’ financial statements to conform to current year presentation.

These reclassifications

had no effect on previously reported results of operations or retained earnings.

TO THE CONDENSED FINANCIAL STATEMENTS

shown in the accompanying condensed consolidated financial statements, as of September 30, 2024, the Company has incurred recurring losses

from operations resulting in an accumulated deficit of $ 16,074,867 , with working capital of $ 702,541 , which may not be sufficient to

sustain operations.

shown in the accompanying condensed consolidated financial statements, as of March 31, 2025, the Company has incurred recurring losses

from operations resulting in an accumulated deficit of $ 18,480,439 , with negative working capital of $ 2,736,656 , which may not be sufficient

to sustain operations.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

8 unchanged sentences

as a going concern.

TO THE CONDENSED FINANCIAL STATEMENTS

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

2 unchanged sentences

Actual results could differ from these estimates.

280, Segment Reporting , requires annual and interim reporting for an enterprise’s operating segments and related disclosures

about its products, services, geographic areas and major customers.

An operating segment is defined as a component of an enterprise that

engages in business activities from which it may earn revenues and expenses, and about which separate financial information is regularly

evaluated by the chief operating decision maker in deciding how to allocate resources.

The Company operates as a single segment and will

evaluate additional segment disclosure requirements as it expands its operations.

ASC 280, Segment Reporting , operating segments are defined as components of an enterprise where discrete financial information

is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources

and in assessing performance.

The Company has two components, consisting of its sales operations in the United States, and its production

operations in Peru.

Therefore, the Company’s Chief Executive Officer, who is also the CODM, makes decisions and manages the Company’s

operations based on these two operating segments for the manufacture and distribution of its products.

Value of Financial Instruments

12 unchanged sentences

are stated at cost plus accrued interest, which approximates market value.

There were no cash equivalents on hand on September 30, 2024

or December 31, 2023.

TO THE CONDENSED FINANCIAL STATEMENTS

There were no cash equivalents on hand on March 31, 2025 or

December 31, 2024.

in Excess of FDIC Insured Limits

2 unchanged sentences

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

The Company had $ 631,973 and

$ 407,789 in excess of FDIC insured limits on September 30, 2024 and December 31, 2023, respectively, and has not experienced any losses

The Company had $ 1,628,846

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

in such accounts.

2 unchanged sentences

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

The Company had no allowance for doubtful accounts

on September 30, 2024 or 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.

Raw materials consist of packaging materials.

Appropriate consideration is given to obsolescence, excessive

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

The Company had an allowance for doubtful accounts

of $ 25,586 at March 31, 2025 and December 31, 2024.

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

its production facility in Peru, and purchased products from contract-manufacturers in Chile and/or Peru.

Raw materials consist of purchased

fruits and vegetables and 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, and consisted of the following as of September 30, 2024 and December 31, 2023:

Inventory, consisting of raw

materials, work in progress and finished goods are stated at the lower of cost or net realizable value using the average cost valuation

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

Schedule of Inventory

September 30,

Raw materials

Work in progress

Finished goods

Company had prepaid inventory advances on product in the amount of $ 337,945 as of September 30, 2024.

Advances of 70 % of estimated finished

product costs are made to enable manufacturers to purchase raw materials necessary to produce finished products.

The remaining 30 % of

finished product costs are paid upon receipt of finished goods.

Total inventory

TO THE CONDENSED FINANCIAL STATEMENTS

Company had prepaid inventory advances on product in the amounts of $ 233,093 and $ 123,792 as of March 31, 2025 and December 31, 2024,

respectively.

Advances of 70 % of estimated finished product costs are made to enable manufacturers to purchase raw materials necessary

to produce finished products.

The remaining 30 % of finished product costs are paid upon receipt of finished goods.

and Equipment

4 unchanged sentences

Schedule of Estimated Useful Lives

Office equipment

Furniture and fixtures

Equipment and machinery

and machinery

and maintenance expenditures are charged to operations as incurred.

18 unchanged sentences

internally developed trademarks.

TO THE CONDENSED FINANCIAL STATEMENTS

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 to avocado products.

The 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 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.

See Note 15, below.

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 $ 40,585 of royalty payments

made during the three months ended March 31, 2025, and no ne during the three months ended March 31, 2024.

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 See Note 14, below.

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

components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40,

Derivative Instruments and Hedging:

Contracts in Entity’s Own Equity.

result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and

is marked-to-market at each balance sheet date and recorded as a liability.

In the event that the fair value is recorded as a liability,

the change in fair value is recorded in the statement of operations as other income or other expense.

Upon conversion or exercise of

a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified

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

TO THE CONDENSED FINANCIAL STATEMENTS

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

35 unchanged sentences

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 for the three and

nine months ended September 2024 and 2023:

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

ended March 31, 2025 and 2024:

Schedule of Revenue

For the Three Months Ended

For the Nine Months Ended

slotting, discounts,

and allowances

slotting, discounts, and allowances

of Goods Sold

1 unchanged sentence

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

TO THE CONDENSED FINANCIAL STATEMENTS

Company expenses the cost of advertising and promotions as incurred.

Advertising and promotions expense was $ 156,226 and $ 57,059 for

the nine months ended September 30, 2024 and 2023, respectively.

the three months ended March 31, 2025 and 2024, respectively.

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

2 unchanged sentences

equity instrument issued, whichever is more reliably measurable.

Company incurred stock-based compensation of $ 698,785 and $ 179,389 for the nine months ended September 30, 2024 and 2023,

respectively.

TO THE CONDENSED FINANCIAL STATEMENTS

Company incurred stock-based compensation of $ 4,024 and $ 525,978 for the three months ended March 31, 2025 and 2024, respectively.

Accounting Pronouncements

3 unchanged sentences

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

July 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-03 to amend various SEC paragraphs in the Accounting

Standards Codification to primarily reflect the issuance of SEC Staff Accounting Bulletin No.

2023-03, “ Presentation

of Financial Statements (Topic 205), Income Statement—Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from

Equity (Topic 480), Equity (Topic 505), and Compensation—Stock Compensation (Topic 718):

Amendments to SEC Paragraphs Pursuant

to SEC Staff Accounting Bulletin No.

120, SEC Staff Announcement at the March 24, 2022 EITF Meeting, and Staff Accounting Bulletin Topic

6.B, Accounting Series Release 280—General Revision of Regulation S-X:

Income or Loss Applicable to Common Stock.

2023-03 amends the ASC for SEC updates pursuant to SEC Staff Accounting Bulletin No.

SEC Staff Announcement at the March 24, 2022

Emerging Issues Task Force (“EITF”) Meeting;

and Staff Accounting Bulletin Topic 6.B, Accounting Series Release 280 - General

Revision of Regulation S-X:

Income or Loss Applicable to Common Stock.

These updates were immediately effective and did not have a significant

impact on our financial statements.

TO THE CONDENSED 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 19 “ Segment Reporting ” in the accompanying Notes

to the Consolidated Financial Statements for additional information.

Standards Not Yet Adopted

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.

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.

2 – Related Party Transactions

1 unchanged sentence

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

pursuant to which Mr.

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”) to be 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.

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

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

3 unchanged sentences

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 the Investor on substantially all of the Company’s

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

TO THE CONDENSED FINANCIAL STATEMENTS

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

1 unchanged sentence

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 the earlier of (i) December

31, 2024 , or (ii) the funding by Kaufman Kapital

of an additional loan to the Company in the amount of $ 1,400,000

under the Convertible Note.

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.

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.

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,

4 unchanged sentences

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

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

8 unchanged sentences

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

TO THE CONDENSED FINANCIAL STATEMENTS

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

5 unchanged sentences

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 %

In addition, the Notes are subject to covenants, events of defaults and other terms and conditions set forth in the Subscription

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 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

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, having an exercise price

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

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.

3 – Formation of Subsidiary

April 26, 2024, the Company formed 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 October of 2024.

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 -year period at an exercise price of $ 1.00 per share.

3 – Fair Value of Financial Instruments

5 unchanged sentences

for items measured at fair value.

TO THE CONDENSED FINANCIAL STATEMENTS

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

9 unchanged sentences

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

TO THE CONDENSED FINANCIAL STATEMENTS

following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of September

following schedule summarizes the valuation of financial instruments at fair value on a recurring basis in the balance sheets as of March

31, 2025 and December 31, 2024:

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

Value Measurements at September 30, 2024

Right-of-use-assets

Fair Value Measurements at March 31, 2025

Right-of-use-asset

Notes receivable

Convertible notes payable, net of $ 83,371 of

Convertible notes payable, related parties net of $ 50,168 of discounts

Notes payable

Notes payable, related parties, net of $ 109,655

Notes payable, related parties

Lease liabilities

Total liabilities

Total assets and liabilities

1 unchanged sentence

$ ( 3,518,847 )

Value Measurements at December 31, 2023

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

Lease liability

Notes payable, related parties

Lease liabilities

Total liabilities

Total assets and liabilities

were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the nine months ended September

$ ( 2,686,165 )

$ ( 3,452,955 )

were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the three months ended March 31,

2025, or the year ended December 31, 2024.

TO THE CONDENSED FINANCIAL STATEMENTS

4 – Major Customers and Accounts Receivable

1 unchanged sentence

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

the nine months ended September 30, 2024, two customers accounted for 99 % of net revenue and 97 % of accounts receivable at the end of

the period, and for the nine months ended September 30, 2023, two customers accounted for 87 % of net revenue and 79 % of accounts receivable

the three months ended March 31, 2025, two customers accounted for 92 % of net revenue and 88 % of accounts receivable at the end of the

period, and for the three months ended March 31, 2024, one customer accounted for 99 % of net revenue and 93 % of accounts receivable

at the end of the period.

5 – Other Current Assets

current assets consisted of the following as of September 30, 2024 and December 31, 2023:

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

Schedule of Other Current Assets

September 30,

Prepaid insurance costs

1 unchanged sentence

Prepaid professional fees & license fees

Prepaid software service

Prepaid taxes

Miscellaneous prepaid expenses

Interest receivable

Refund receivable

other current assets

TO THE CONDENSED FINANCIAL STATEMENTS

Refunds receivable

Total other current assets

6 – Property and Equipment

and equipment as of September 30, 2024 and December 31, 2023 consisted of the following:

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

of Property and Equipment

September 30,

Equipment and machinery

Accumulated depreciation

property and equipment, net

of property and equipment was $ 173,285 and $ 167,520 for the nine months ended September 30, 2024 and 2023, respectively.

Total property and equipment, net

of property and equipment was $ 152,355 and $ 56,336 for the three months ended March 31, 2025 and 2024, respectively.

For the three months

ended March 31, 2025, a total of $ 152,265 of depreciation was included in the inventoried production costs, which is expensed through

Cost of Goods Sold as the inventory is sold.

7 – Other Assets

assets consisted of the following as of September 30, 2024 and December 31, 2023:

of Other Assets

September 30,

Deposit on first

position mortgage (1)

receivable (2)

other current assets

(1) On May 10, 2024, in

connection with the lease of the Company’s Peru Facility, the Company paid $ 275,000 toward the purchase of 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 .

The remaining $ 992,000 was due and payable on August 10, 2024,

subject to certain requirements which haven’t yet been met, therefore the Company has deferred payment until a later date, to

be determined.

(2) VAT 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.

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

Schedule of Other Assets

First position mortgage (1)

VAT tax receivable (2)

Total other assets

(1) On 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 another $ 456,000 during the first quarter of 2025.

The remaining $ 456,000 due on the FPM is to be paid in monthly

installments of $ 152,000 through June 23, 2025 , as presented in other current liabilities on the balance sheet.

The unpaid balance accrues

interest at 9 %.

At March 31, 2025, a total of $ 50,081 of interest was accrued.

The FPM enables the Company to have uninterrupted access

to the leased facility, and secures the option to purchase the facility by becoming the primary lien-holder on the facility.

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.

(2) VAT 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.

TO THE CONDENSED FINANCIAL STATEMENTS

8 – Notes Receivable

13 unchanged sentences

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

As of September

31, 2025, a total of $ 156,241 of the Advance Payment had been repaid as a reduction of inventory costs, consisting of $ 140,018 of principal

1 unchanged sentence

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

As of September 30, 2024, a total of $ 388,000 was outstanding from Nanuva, consisting of $ 359,982 of principal and $ 28,018 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.

As of March 31, 2025, a total of $ 393,385 was outstanding from Nanuva, consisting of $ 359,982 of principal and $ 33,403 of unpaid

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

1 unchanged sentence

as Nanuva’s exclusive distributor in the following territories:

of Nanuva’s Exclusive Distributor in Territories

Minimum Volume

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

(except Chile)

America (Canada and USA)

9 – Accrued Expenses

expenses consisted of the following as of September 30, 2024 and December 31, 2023, respectively:

of Accrued Expenses

September 30,

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

Schedule of Accrued Expenses

Accrued payroll and taxes

1 unchanged sentence

Accrued chargebacks

Accrued royalties

Total accrued expenses

TO THE CONDENSED FINANCIAL STATEMENTS

10 – Convertible Notes Payable, Related Parties

discussed in further detail in Note 2, 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 ,

a (ii) a warrant to purchase 1,000,000

shares of common stock at an exercise price of

per share, and (iii) a warrant to purchase 500,000

shares of common stock at an exercise price of

per share, in consideration of an initial loan

in the principal amount of $ 2,000,000

the Company under the Convertible Note.

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 the Investor on substantially all of the Company’s

discussed in further detail in Note 2, 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.

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

of this nature.

Company recognized $ 57,957 of interest expense on convertible notes payable, related parties for the nine months ended September 30,

2024, consisting of $ 45,370 of stated interest expense, $ 9,838 of amortized debt discounts and $ 2,749 of amortized debt discounts due

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 March 31, 2025, a total of $ 50,168 of unamortized debt discounts are expected to be expensed over the remaining

life of the loan.

Company recognized $ 117,022 of interest expense on convertible notes payable, related parties for the three months ended March 31, 2025,

consisting of $ 100,603 of stated interest expense, $ 12,833 of amortized debt discounts and $ 3,586 of amortized debt discounts due to

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

11 – Notes Payable

payable consists of the following as of September 30, 2024 and December 31, 2023:

of Notes Payable

September 30,

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 %

The Hinman 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 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 principal and interest payments of $ 169 every month beginning May 17, 2021;

however, the SBA extended the repayment

date to November 17, 2022.

payable consists of the following as of March 31, 2025 and December 31, 2024:

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 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 principal and interest payments of $ 169 every month beginning May 17, 2021;

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

All remaining principal and accrued interest is due and payable on May 17, 2050.

The EIDL Note may be

repaid at any time without penalty.

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

Total notes payable

1 unchanged sentence

Notes payable, less current maturities

Company recognized $ 9,231 and $ 251,249 of interest expense on notes payable for the nine months ended September 30, 2024 and 2023, respectively.

Interest expense included $ 46,090 of amortized debt discounts due to warrants issued on a Subordinated Note during the nine months ended

September 30, 2023.

TO THE CONDENSED FINANCIAL STATEMENTS

Company recognized $ 5,008 and $ 598 of interest expense on notes payable for the three months ended March 31, 2025 and 2024, respectively.

12 – Notes Payable, Related Parties

discussed in Note 2, on 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

issued by the Company to Kaufman Kapital.

Note matures on the earlier of (i) December

31, 2024 , or (ii) the funding by Kaufman Kapital

of an additional loan to the Company in the amount of $ 1,400,000

under the Convertible Note.

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.

As discussed in Note 2, 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

discussed in Note 2, 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 2, 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.

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

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

11 unchanged sentences

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 ten -year period at an exercise price of $ 1.00 per share.

Each Warrant is exercisable for a 10 -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

17 unchanged sentences

and the Investors.

TO THE CONDENSED FINANCIAL STATEMENTS

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 September 30, 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 $ 92,168 of interest expense pursuant to the amortization of note discounts for the

nine months ended September 30, 2024.

As of September 30, 2024, there were $ 247,530 of unamortized expenses expected to be expensed over

the remaining life of the outstanding debt.

during the year ended December 31, 2024.

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 Notes in consideration of services rendered

6 unchanged sentences

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 September 30, 2024 and December 31, 2023:

of Notes Payable Related Parties

September 30,

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

payable, related parties, consists of the following as of March 31, 2025 and December 31, 2024:

Schedule of Notes Payable Related Parties

Total Kaufman Note

2 unchanged sentences

Total notes payable, related parties

debt discounts

current maturities

Notes payable, related parties, less current

Company recognized $ 450,845 of interest expense on notes payable, related parties for the nine months ended September 30, 2024, consisting

of $ 130,853 of stated interest expense, $ 175,473 of amortized debt discounts and $ 54,570 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.

Company recognized aggregate interest expense for the nine months ended September 30, 2024 and 2023 respectively, as follows:

of Recognized Interest Expense

September 30,

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

Notes payable, related parties, less current maturities

Company recognized $ 102,082 of interest expense on notes payable, related parties for the three months ended March 31, 2025, and $ 28,146

of interest expense on notes payable, related parties for the three months ended March 31, 2024, consisting of $ 13,480 of stated interest

expense, $ 2,034 of amortized debt discounts and $ 12,632 of amortized debt discounts due to warrants.

Company recognized aggregate interest expense for the three months ended March 31, 2025 and 2024 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

1 unchanged sentence

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 revolving line of credit

Finance charge on letter of credit

Interest on credit cards

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

Interest on first credit position financing

Total interest expense

TO THE CONDENSED FINANCIAL STATEMENTS

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

and a bargain purchase price of $ 1.00 at the end of the lease term.

The finance lease commenced on May 9, 2023 and expires on August

31, 2027 , with monthly lease payments of $ 3,657 commencing June 1, 2023, subject to the ASU 2016-02.

As the Company’s lease does

not provide implicit discount rates, the Company uses an incremental borrowing rate based on the information available at the commencement

date in determining the present value of lease payments.

The finance lease commenced on May 9, 2023 and expires on May 31,

2028 , with monthly lease payments of $ 3,657 commencing June 1, 2023, and a pre-funding and acceptance fee of $ 18,079 , subject to the

As the Company’s lease does not provide implicit discount rates, the Company uses an incremental borrowing rate based

on the information available at the commencement date in determining the present value of lease payments.

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 October of

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.

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

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

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 .

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 $ 275,000 was paid by us on May 10, 2024.

The remaining $ 992,000 was due and payable on August 10, 2024, subject

to certain requirements which haven’t yet been met, therefore the Company has deferred payment until a later date, to be determined.

$ 1,267,000 , of which $ 456,000 was paid during the three months ended March 31, 2025, and $ 355,000 was paid during the year ended December

The remaining $ 456,000 is to be paid in monthly installments of $ 152,000 through June 23, 2025, as presented in other current

liabilities on the balance sheet.

The unpaid balance accrues interest at 9 %.

At March 31, 2025, a total of $ 50,081 of interest was accrued.

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

components of lease expense were as follows:

of Components of Lease Expenses

For the Nine Months Ended

Schedule of Components of Lease Expenses

For the Three Months Ended

Operating lease cost:

Amortization of right-of-use

Amortization of right-of-use asset

Interest on lease liability

4 unchanged sentences

Total finance lease cost

Total lease costs

balance sheet information related to leases was as follows:

of Supplemental Information Related to Leases

September 30,

Schedule of Supplemental Information Related to Leases

Operating lease:

14 unchanged sentences

Finance lease

TO THE CONDENSED FINANCIAL STATEMENTS

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

of Supplemental Cash and Other Information Related to finance Leases

For the Nine Months Ended

Cash paid for amounts included in the measurement

of lease liabilities:

Operating cash flows used for

operating leases

Schedule of Supplemental Cash and Other Information Related to finance Leases

For the Three Months Ended

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

Total operating lease liabilities

Total finance lease liabilities

future minimum lease payments due under operating leases as of September 30, 2024 is as follows:

of Future Minimum Operating Lease Payments

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

future minimum lease payments due under operating leases as of March 31, 2025 is as follows:

Schedule of Future Minimum Operating Lease Payments

Minimum Lease

5 unchanged sentences

Long-term operating lease liability

future minimum lease payments due under finance leases as of September 30, 2024 is as follows:

future minimum lease payments due under finance leases as of March 31, 2025 is as follows:

of Future Minimum Lease Payments

6 unchanged sentences

Long-term finance lease liability

TO THE CONDENSED FINANCIAL STATEMENTS

14 – Commitments and Contingencies

6 unchanged sentences

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 October of 2024.

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

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 August 31, 2027 .

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

Contractual Commitments

3 unchanged sentences

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

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

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

12 unchanged sentences

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.

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.

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

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.

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.

Agreement is effective as long as EnWave possesses its EnWave technology.

The Company recognized $ 40,585 of royalty expenses for the

three months ended March 31,2025.

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 THE CONDENSED FINANCIAL STATEMENTS

15 – Changes in Stockholders’ Equity

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

As of September 30, 2024, none of the preferred stock had

been designated or issued.

As of March 31, 2025, none of the preferred stock had been

designated or issued.

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

As of September 30, 2024, a total of 6,924,600 shares of common

As of March 31, 2025, a total of 9,584,769 shares of common

stock had been issued.

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

Offering Sale of Common Stock and Warrants, Related Parties

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.

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.

addition, the officers and directors of the Company have agreed not to offer, sell, transfer or otherwise dispose of any shares of the Company’s common stock, or securities convertible into, or exercisable or exchangeable for, shares of common stock,

during the six-month period following the date of the Prospectus, and the Company agreed that it will not issue or announce the issuance

or proposed issuance of any shares of common stock or common stock equivalents for a period of six months following the date of the Prospectus,

other than certain exempt issuances.

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

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.

TO THE CONDENSED FINANCIAL STATEMENTS

February 18, 2025, the Company entered into a First Amendment to an At-The-Market Issuance Sales Agreement (the “ATM

Agreement”) to increase the aggregate offering price of the shares of common stock that the Company may sell under the ATM

Agreement from $ 3,000,000 to up to $ 5,000,000 .

During the three months ended March 31, 2025, 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 commissions paid to

Alexander Capital, L.P., as sales agent, 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.

16 – Common Stock Options

7 unchanged sentences

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 September 30, 2024.

There were 593,470 options with a weighted

average exercise price of $ 2.39 per share, and a weighted average remaining life of approximately 8.63 years, outstanding as of September

increases under the plan, resulting in 1,633,000 reserved shares as of March 31, 2025.

There were 603,470 options with a weighted average

exercise price of $ 2.39 per share, and a weighted average remaining life of approximately 8.16 years, outstanding as of March 31, 2025.

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

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 Black-Scholes Pricing Model, based on a volatility rate of 41 % and a call option value of $ 1.1806 ,

was $ 35,419 .

The options are being expensed over the vesting period, resulting in $ 4,920 of stock-based compensation expense during the

nine months ended September 30, 2024.

As of September 30, 2024, a total of $ 30,499 of unamortized expenses are expected to be expensed

February 13, 2025, the Company granted options to purchase 10,000 shares of the Company’s common stock, having an exercise price

of $ 2.50 per share, exercisable over a 10 -year term, to a new employee.

The options will vest quarterly over three years from the date

The aggregate estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 43 % and a call option value

of $ 1.2384 , was $ 12,384 .

The options are being expensed over the vesting period, resulting in $- 0 - of stock-based compensation expense

during the three months ended March 31, 2025.

As of March 31, 2025, a total of $ 12,384 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

and 75,000 shares issued to the Company’s CEO and CFO, respectively.

The options vested immediately.

The aggregate estimated value

using the Black-Scholes Pricing Model, based on a volatility rate of 41 % and a call option value of $ 0.8581 , 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.

vested immediately.

The aggregate estimated value using the Black-Scholes Pricing Model, based on a volatility rate of 41 % and a call

option value of $ 1.1407 , was $ 90,306 .

17 – Common Stock Warrants

to purchase a total of 3,422,415 shares of common stock at a weighted average exercise price of $ 1.89 per share, with a weighted average

remaining life of approximately 5.37 years, were outstanding as of September 30, 2024.

Issued Pursuant to Convertible Note Financing

As discussed in further detail in Note

2, 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 Note.

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 $ 2,663

was recognized as finance expense during the nine months ended September 30, 2024.

As of September 30, 2024, there was $ 17,640

of unamortized expenses expected to be expensed over the remaining life of the outstanding debt.

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 ,

of which $ 86

was recognized as finance expense during the nine months ended September 30, 2024.

As of September 30, 2024, there was $ 569

of unamortized expenses expected to be expensed over the remaining life of the outstanding debt.

TO THE CONDENSED FINANCIAL STATEMENTS

Issued Pursuant to Executive Unit Offering Sale

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 .

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.

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, and the Representative may not effect the disposition of such

warrant for a period of one hundred eighty (180) days following the Commencement Date.

In addition, the Representative’s Warrant

contains “piggy-back” registration rights with respect to the shares underlying such warrant, and limits the number of shares

issuable upon its exercise to 4.99% / 9.99% of the outstanding shares of common stock, as applicable.

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 , of which $ 54,570 was recognized as finance expense during the nine months ended September 30, 2024.

As of September 30,

2024, there was $ 26,338 of unamortized expenses expected to be expensed over the remaining life of the outstanding debt.

of Senior Notes and Warrants