What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-13 compared with 2025-05-15 · 431 added, 280 removed, 747 unchanged (49% of the section changed)

FINANCIAL STATEMENTS

BRANCHOUT FOOD INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

Current assets:

1 unchanged sentence

Advances on inventory purchases

Other current assets

Prepaid expenses and other current assets

Total current assets

1 unchanged sentence

Right-of-use assets

Other receivable, net of current portion

Note receivable

11 unchanged sentences

Notes payable, net of current portion

Convertible notes payable, related parties, net of discounts

Operating lease liability, net of current portion

5 unchanged sentences

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

10,719,769 and 8,424,600 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

5 unchanged sentences

Total Liabilities and Stockholders’ Equity

See accompanying notes to financial statements.

BRANCHOUT FOOD INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

accompanying notes to financial statements.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Three Months Ended

For the Six Months Ended

Cost of goods sold

Gross profit (loss)

Operating expenses:

2 unchanged sentences

Professional fees

Shipping and handling

Advertising and promotions

Total operating expenses

1 unchanged sentence

( 1,346,021 )

( 2,028,561 )

( 1,851,515 )

Other income (expense):

4 unchanged sentences

$ ( 942,554 )

Other comprehensive gain:

$ ( 2,521,538 )

$ ( 1,993,521 )

Other comprehensive income:

Gain on foreign currency translation

Net other comprehensive loss

Net other comprehensive income

$ ( 1,582,602 )

$ ( 942,496 )

$ ( 2,492,775 )

$ ( 1,993,463 )

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

accompanying notes to financial statements.

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For the Three Months Ended June 30, 2025

Preferred Stock

Additional Paid-In

Subscriptions

Comprehensive

Stockholders’

Balance, December 31, 2024

Accumulated Other Comprehensive

Total Stockholders’

Balance, March 31, 2025

$ ( 18,480,439 )

Common stock issued pursuant to ATM program

Exercise of underwriters’ warrants

Exercise of Kaufman Kapital convertible debt warrants

Exercise of warrants by note holders

Stock options issued for services

Amended warrant

Gain on foreign currency translation

( 1,603,156 )

Balance, June 30, 2025

$ ( 20,083,595 )

For the Three Months Ended June 30, 2024

Preferred Stock

Additional Paid-In

Subscriptions

Accumulated Other Comprehensive

Total Stockholders’

Balance, March 31, 2024

$ ( 13,861,508 )

Common stock issued pursuant to secondary public offering

Common stock issued for services

Stock options issued for services

Common stock warrants granted to note holders pursuant to debt financing

Gain on foreign currency translation

Balance, June 30, 2024

$ ( 14,804,062 )

accompanying notes to financial statements.

For the Six Months Ended June 30, 2025

Preferred Stock

Additional Paid-In

Subscriptions

Comprehensive

Stockholders’

Accumulated Other Comprehensive

Total Stockholders’

Balance, December 31,

$ ( 17,562,057 )

Common stock issued pursuant to ATM program - Authorized shares, 2,620,422 shares

Exercise of Kaufman Kapital convertible debt warrants

Exercise of other investor warrants

Amended warrant

Stock options issued for services

Gain on foreign currency translation

( 2,521,538 )

Balance, June 30, 2025

$ ( 20,083,595 )

For the Six Months Ended June 30, 2024

Preferred Stock

Additional Paid-In

Subscriptions

Accumulated Other Comprehensive

Total Stockholders’

Balance, December 31, 2023

$ ( 12,810,541 )

Common stock issued pursuant to secondary public offering

Common stock issued for services

1 unchanged sentence

Common stock warrants granted to note holders pursuant to debt financing

Gain on foreign currency translation

( 1,993,521 )

Balance, March 31, 2024

Balance, June 30, 2024

$ ( 14,804,062 )

See accompanying notes to financial statements.

BRANCHOUT FOOD INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended

accompanying notes to financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended

Cash flows from operating activities

3 unchanged sentences

Depreciation expense

Loss on disposal of property and equipment

Provision for prepaid inventory

Amortization of debt discounts

Amended warrant

Common stock issued for services

4 unchanged sentences

Advances on inventory purchases

Other current assets

Prepaid expenses and other current assets

Right-of-use asset

Other long term asset and receivable

Increase (decrease) in liabilities:

5 unchanged sentences

( 3,942,856 )

( 1,357,463 )

Cash flows from investing activities

6 unchanged sentences

Proceeds received on notes payable, related parties

Repayment 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

Proceeds from exercise of warrants

Net cash provided by financing activities

1 unchanged sentence

Net increase (decrease) in cash

( 1,688,323 )

Cash - beginning of period

5 unchanged sentences

Relative fair value of warrants issued as a debt discount

See accompanying notes to financial statements.

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

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,

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

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 production facility leased by the Company in Pisco,

April 2024, we formed BranchOut Food Sucursal Peru, our Peruvian wholly-owned subsidiary, to operate our production 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 production facility, we relied on contract manufacturers.

of Accounting

accompanying unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles

generally accepted in the United States of America (“GAAP”) for interim financial reporting and as required by pursuant

to the rules and regulations of the U.S.

generally accepted in the United States of America (“GAAP”) for interim financial reporting and as required by pursuant to

the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

Accordingly, they do not include

all of the information and notes required by GAAP for complete financial statements.

In the opinion of the Company’s management,

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 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.

Accordingly, they do not include all the

information and notes required by GAAP for complete financial statements.

In the opinion of the Company’s management, 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 June 30, 2025, the results of operations for the three and six months ended

June 30, 2025 and 2024, and cash flows for the six months ended June 30, 2025 and 2024.

The results of operations for the three and six

months ended June 30, 2025 are not necessarily indicative of the results to be expected for the full year.

The balance sheet as of December

4 unchanged sentences

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

and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of

revenue and expenses during the reporting period.

Actual results could differ from those estimates.

of Consolidation

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

and ownership at March 31, 2025:

and ownership at June 30, 2025:

Food Sucursal Peru (2)

1 unchanged sentence

wholly-owned subsidiary of BranchOut Food Inc.

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

established on April 26, 2024 in the form

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

1 unchanged sentence

are located in Bend, Oregon.

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.

is actively pursuing new customers to increase revenues.

In addition, the Company is currently seeking additional sources of capital

to fund short term operations.

shown in the accompanying condensed consolidated financial statements, as of June 30, 2025, the Company has incurred recurring

losses from operations resulting in an accumulated deficit of $ 20,083,595 ,

with positive working capital of $ 662,217 ,

which may not be sufficient to sustain operations.

These factors raise substantial doubt about the Company’s ability to

continue as a going concern.

Management is actively pursuing new customers and continues to expand the Company’s product mix

to increase revenues.

In addition, the Company is currently seeking additional sources of capital to fund short-term operations.

Management believes these factors will contribute to achieving profitability.

The accompanying condensed

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

These condensed 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.

The accompanying condensed consolidated financial

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

condensed 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.

TO THE CONDENSED FINANCIAL STATEMENTS

24 unchanged sentences

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

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

There were no cash equivalents on hand on June 30, 2025 or

December 31, 2024.

3 unchanged sentences

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

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

The Company had $ 89,784 and

$ 1,555,223 in excess of FDIC insured limits on June 30, 2025 and December 31, 2024, respectively, and has not experienced any losses

in such accounts.

3 unchanged sentences

The Company had an allowance for doubtful accounts

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

of $ 25,586 at June 30, 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

7 unchanged sentences

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:

method, and consisted of the following as of June 30, 2025 and December 31, 2024:

Schedule of Inventory

4 unchanged sentences

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.

Company secures raw materials with advances of up to 50 %.

The Company had prepaid inventory advances on product in the amounts of $ 596,559

and $ 123,792 as of June 30, 2025 and December 31, 2024, respectively.

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 six months

ending June 30, 2025, our research and development expenses totaled $ 17,390 , compared to $ 16,448 for the same period in 2024.

and Equipment

10 unchanged sentences

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

Company leases a manufacturing facility located in Pisco, Peru, which is accounted for as an operating lease (see Note 13).

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.

first mortgage position is included on the balance sheet in other assets of $ 1,267,000 as of June 30, 2025 and December 31, 2024.

Company capitalizes leasehold improvements related to the buildout of the facility, which expanded the Company’s production capacity.

of Long-Lived Assets

21 unchanged sentences

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.

There was a total of $ 85,081 and $ 0 of royalty

payments made during the six months ended June 30, 2025 and June 30, 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, See Note 14 for additional information.

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

2 unchanged sentences

Contracts in Entity’s Own Equity.

TO THE CONDENSED FINANCIAL STATEMENTS

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

6 unchanged sentences

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 months

ended March 31, 2025 and 2024:

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

six months ended June 2025 and 2024:

Schedule of Revenue

For the Three Months Ended

For the Six Months Ended

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 $ 156,226 and $ 57,059 for

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

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

costs are primarily calculated from direct raw materials, labor, and variable manufacturing costs.

We determine manufacturing overhead

by applying a predetermined rate based on actual machine hours used in production.

Overhead costs include factory rent, utilities, depreciation,

and other factory-related expenses, allocated to products based on the factory’s capacity and actual machine hours incurred during

analyze factory capacity to establish a normal level of production, which serves as the basis for allocating manufacturing overhead costs.

This approach ensures that our overhead costs are systematically and consistently allocated to inventory.

and Promotions Costs

Company incurs advertising and promotional expenses related to demos with customers, trade shows, and promotional allowances.

and promotional costs are expensed as incurred.

Advertising and promotional expenses were $ 307,635 and $ 98,204 for the six months ending

June 30, 2025 and 2024, respectively.

TO THE CONDENSED FINANCIAL STATEMENTS

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.

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.

Company incurred stock-based compensation in the amount of $ 81,097 and $ 684,220 for the six months ended June 30, 2025 and 2024, respectively.

Accounting Pronouncements

29 unchanged sentences

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.

The Company does not expect a material impact to its financial position,

results of operations, or cash flows from adoption of this guidance.

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

7 unchanged sentences

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

In July 2025, the FASB issued ASU No.

2025-05, “Financial Instruments—Credit

Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”) which

provides a practical expedient for all entities related to the estimation of expected credit losses for current accounts receivable and

current contract assets that arise from transactions accounted for under Topic 606.

ASU 2025-05 will be adopted prospectively and will

be effective for the Company beginning January 1, 2026, including interim periods in 2026, with early adoption permitted.

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

2 – Related Party Transactions

21 unchanged sentences

TO THE CONDENSED FINANCIAL STATEMENTS

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.

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

3 unchanged sentences

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.

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.

August 30, 2024, the Company borrowed $ 1,200,000 from Kaufman Kapital pursuant to the Secured Note.

The Secured Note matures on June

30, 2025 , as amended.

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.

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

of this nature.

May 7, 2025, the Company repaid $ 325,000 of principal on the Secured Note.

On June 1, 2025, the maturity date of the Secured Note was

extended to December 31, 2025 pursuant to the Warrant Exercise Agreement as described above.

Vision Promissory Notes

28 unchanged sentences

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

various dates in June 2025, principal repayments totaling $ 310,000 were made to Holders of the Senior Notes.

In addition, during June

2025, those Holders exercised warrants on a cash basis for 135,000 shares of the Company’s common stock for an aggregate purchase

price of $ 135,000 .

TO THE CONDENSED FINANCIAL STATEMENTS

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

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

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

30, 2025 and December 31, 2024:

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

Fair Value Measurements at March 31, 2025

Fair Value Measurements at June 30, 2025

Right-of-use-asset

19 unchanged sentences

$ ( 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,

were no transfers of financial assets or liabilities between Level 1, Level 2 and Level 3 inputs for the six months ended June 30, 2025,

or the year ended December 31, 2024.

3 unchanged sentences

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

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

the six months ended June 30, 2025, three customers accounted for 97.1 % of net revenue and 97.6 % of accounts receivable at the end of

the period, and for the six months ended June 30, 2024, one customer accounted for 99 % of net revenue and 91 % of accounts receivable

at the end of the period.

5 – Other Current Assets

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

Schedule of Other Current Assets

5 – Prepaid Expenses and Other Current Assets

current assets consisted of the following as of June 30, 2025 and December 31, 2024:

of Prelaid Expenses And Other Current Assets

Prepaid insurance costs

1 unchanged sentence

Prepaid professional fees & license fees

Prepaid software service

Prepaid taxes

1 unchanged sentence

Interest receivable

Refunds receivable

VAT tax receivable

Total other current assets

6 – Property and Equipment

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

and equipment as of June 30, 2025 and December 31, 2024 consisted of the following:

of Property and Equipment

Equipment and machinery

Leasehold Improvements

Machinery and equipment

Office Furniture, fixtures and equipment

Accumulated depreciation

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 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.

of property and equipment was $ 305,560 and $ 112,671 for the six months ended June 30, 2025, and 2024, respectively.

7 – Other Assets and Other Receivable

Company has other assets of $ 1,267,000 as of June 30, 2025, and December 31, 2024, consisting of the first mortgage position on the production

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

Note 13 Leases.

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 six months ended June 30, 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), as applicable.

receivable is recoverable through future offsets of IGV payable or, in certain circumstances, through a refund claim.

IGV does not represent

an expense of the Company when recoverable and is recorded as an asset until applied or refunded.

of June 30, 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 $ 1,034,023 , of which $ 433,931 is classified in Other Current Assets.

See Note 5 above.

The first refund payment

from SUNAT was received on July 10, 2025, in the amount of $ 233,475 .

TO THE CONDENSED FINANCIAL STATEMENTS

3 unchanged sentences

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.

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

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

the capital investment needed for Nanuva to purchase two Enwave Rev 10 machines to be used in servicing the Company’s manufacturing

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

The note bears interest at 3 % per annum on the outstanding principal.

February 4, 2024, the Company and Nanuva entered into an amendment to the MDA which extended the date on which Nanuva is required to

make the first minimum contractual annual payment to June 30, 2024.

Repayments are based on kilograms produced by Nanuva for the Company,

or a minimum of $ 12,000 per contractual year.

April 2024 the Company advanced Nanuva $ 75,600 for inventory orders which were not fulfilled.

The Company currently manufactures all

of its products at its facility in Pisco, Peru and does not anticipate utilizing Nanuva in the future for third-party manufacturing.

As of June 30, 2025, a $ 75,600 allowance for doubtful accounts for the prepaid inventory was established.

of June 30, 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 and $ 16,223 of interest.

The Note Receivable is current with the next $ 12,000 minimum contractual annual payment due by

January 31, 2026.

of June 30, 2025, a total of $ 396,078 was outstanding from Nanuva, consisting of $ 359,982 of principal and $ 36,096 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”)

(except Chile)

America (Canada and USA)

The Company has commenced negotiations with Nanuva to recover

the two Enwave Rev 10 Machines and terminate the MDA.

9 – Accrued Expenses

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

expenses consisted of the following as of June 30, 2025 and December 31, 2024, respectively:

Schedule of Accrued Expenses

21 unchanged sentences

interest method.

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

As of June 30, 2025, a total of $ 33,568 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,

Company recognized $ 340,467 of interest expense on convertible notes payable, related parties for the six months ended June 30, 2025,

consisting of $ 323,867 of stated interest expense, $ 25,808 of amortized debt discounts and $ 7,211 of amortized debt discounts due to

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

TO THE CONDENSED FINANCIAL STATEMENTS

11 – Notes Payable

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

payable consists of the following as of June 30, 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”).

On 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 “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.

8 unchanged sentences

Notes payable, less current maturities

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

Company recognized $ 9,972 and $ 903 of interest expense on notes payable for the six months ended June 30, 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 that, as amended, matures on June 30, 2025 .

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

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 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.

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

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

customary in transactions of this nature.

May 7, 2025, the Company repaid $ 325,000 of principal on the Secured Note.

discussed in Note 2, in connection with the sale of the Purchased Securities to Kaufman Kapital under the SPA, the Company entered into

8 unchanged sentences

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

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

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

42 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

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:

various dates in June 2025, principal repayments totaling $ 310,000 were made to Holders of the Senior Notes.

In addition, during June

2025, those Holders exercised warrants on a cash basis for 135,000 shares of the Company’s common stock for an aggregate purchase

price of $ 135,000 .

payable, related parties, consists of the following as of June 30, 2025 and December 31, 2024:

Schedule of Notes Payable Related Parties

5 unchanged sentences

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

TO THE CONDENSED FINANCIAL STATEMENTS

Company recognized $ 197,577 of interest expense on notes payable, related parties for the six months ended June 30, 2025, and $ 146,798

of interest expense on notes payable, related parties for the six months ended June 30, 2024, consisting of $ 54,630 of stated interest

expense, $ 71,718 of amortized debt discounts and $ 20,450 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:

Company recognized aggregate interest expense for the six months ended June 30, 2025, and 2024 respectively, as follows:

Schedule of Recognized Interest Expense

2 unchanged sentences

Amortization of debt discounts on related party convertible notes, warrants

Amortization of debt discounts on related

party convertible notes

Amortization of debt discounts on related party convertible notes

Interest on notes payable

4 unchanged sentences

Amortization of debt discounts on related party notes

Amended warrant

Interest on credit cards

Interest on first credit position financing

10 unchanged sentences

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 .

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 $ 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

$ 1,267,000 , of which payments were made in various installments totaling $ 355,000 as of December 31, 2024 and $ 912,000 during the six

months ended June 30, 2025.

TO THE CONDENSED FINANCIAL STATEMENTS

components of lease expense were as follows:

Schedule of Components of Lease Expenses

For the Three Months Ended

For the Six Months Ended

Operating lease cost:

27 unchanged sentences

Schedule of Supplemental Cash and Other Information Related to finance Leases

For the Three Months Ended

For the Six Months Ended

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

Operating cash flows used for operating leases

Operating cash flows (provided by) used for

operating leases

Finance cash flows used for finance leases

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:

Leased assets obtained in exchange for lease liabilities:

Total operating lease liabilities

Total finance lease liabilities

TO THE CONDENSED FINANCIAL STATEMENTS

future minimum lease payments due under operating leases as of June 30, 2025, is as follows:

Schedule of Future Minimum Operating Lease Payments

Minimum Lease

2025 (for the three months remaining)

2025 (for the six months remaining)

Total minimum lease payments

3 unchanged sentences

Long-term operating lease liability

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

future minimum lease payments due under finance leases as of June 30, 2025, is as follows:

of Future Minimum Lease Payments

Minimum Lease

2025 (for the three months remaining)

2025 (for the six months remaining)

Total minimum lease payments

6 unchanged sentences

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.

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 recently commenced by its former chief financial officer alleging wrongful termination.

information currently available to the Company and the advice of legal counsel, management believes that the outcome of this lawsuit

is not probable to result in a material adverse effect on the Company’s financial position, results of operations, or cash flows.

While the Company intends to vigorously defend itself against these allegations, the ultimate outcome of the lawsuit is not possible

At this time given the uncertainties inherent in litigation, it is not reasonable to estimate the amount or range of any

potential loss, and therefore no liability has been accrued in the accompanying financial statements.

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

4 unchanged sentences

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

TO THE CONDENSED FINANCIAL STATEMENTS

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

8 unchanged sentences

exclusivity rights with respect to the production of avocado products.

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

In 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,

1 unchanged sentence

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, 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.

The 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 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.

recognized $ 85,081 of

royalty expenses for the six months ended June 30, 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 March 31, 2025, none of the preferred stock had been

As of June 30, 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 March 31, 2025, a total of 9,584,769 shares of common

As of June 30, 2025, a total of 10,719,769 shares of common

stock had been issued.

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

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 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 six months ended June 30, 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.

June 4, 2025, Kaufman Kapital exercised warrants to purchase an aggregate of 1,000,000 shares of the Company’s common stock at

an exercise price of $ 1.00 per share.

These warrants were originally issued in connection with the Kaufman Kapital Senior Secured Convertible

The exercises resulted in aggregate cash proceeds of $ 1,000,000 .

the period ended June 30, 2025, additional warrants were exercised to purchase an aggregate of 135,000 shares of the Company’s

common stock at an exercise price of $ 1.00 per share.

The exercises resulted in aggregate cash proceeds of $ 135,000 .

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 1,633,000 reserved shares as of March 31, 2025.

increases under the plan, resulting in 1,633,000 reserved shares as of June 30, 2025.

There were 1,333,470 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

exercise price of $ 2.20 per share, and a weighted average remaining life of approximately 9.01 years, outstanding as of June 30, 2025.

Stock Options Issued for Services Pursuant to the Company’s 2022 Equity Incentive Plan

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

3 unchanged sentences

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.

April 11, 2025, the Company granted options to purchase 30,000 shares of the Company’s common stock, having an exercise price of

$ 1.93 per share, exercisable over a 10 -year term, to one of the Company’s directors.

The options vested immediately.

The estimated

value using the plain vanilla Black-Scholes Pricing Model, based on a volatility rate of 46 % and a call option value of $ 0.8765 , and

an expected term of 5 years, was $ 26,294 .

April 14, 2025, the Company granted options to purchase an aggregate 90,000 shares of the Company’s common stock, consisting of

options to purchase 15,000 shares to each of six directors, having an exercise price of $ 1.94 per share, exercisable over a 10 -year term,

including options to purchase 15,000 shares issued to each of the Company’s CEO and CFO in consideration of their services as directors.

The options vest monthly over 6 months following the issuance date.

The aggregate estimated value using the plain vanilla Black-Scholes

Pricing Model, based on a volatility rate of 46 % and a call option value of $ 0.8796 , and an expected term of 5 years, was $ 79,170 .

TO THE CONDENSED FINANCIAL STATEMENTS

June 12, 2025 the Company granted options to purchase 610,000 shares of the Company’s common stock having an exercise price of

$ 2.06 per share, exercisable over a 10 -year term, to employees for services performed.

The grant includes options to purchase 180,000

and 20,000 shares to the Company CEO and CFO, respectively.

The options vest in 36 equal monthly installments over the three-year period

following the issuance date.

The aggregate estimated value using the plain vanilla Black-Scholes Pricing Model, based on a volatility

rate of 56 % and a call option value of $ 1.2095 , and an expected term of 6.5 years, was $ 737,783 .

are being expensed over the respective vesting period, resulting in $ 81,097 of stock-based compensation expense during the six months

ended June 30, 2025.

As of June 30, 2025, a total of $ 809,458 of unamortized expenses are expected to be expensed over the remaining

vesting period.

17 – Common Stock Warrants

to purchase a total of 2,287,415 shares of common stock at a weighted average exercise price of $ 2.34 per share, with a weighted average

remaining life of approximately 4.88 years, were outstanding as of March 31, 2025.

remaining life of approximately 6.19 years, were outstanding as of June 30, 2025.

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.

June 4, 2025, Kaufman Kapital exercised warrants to purchase an aggregate of 1,000,000 shares of the Company’s common stock at

an exercise price of $ 1.00 per share.

These warrants were originally issued in connection with the Kaufman Kapital Senior Secured Convertible

The exercises resulted in aggregate cash proceeds of $ 1,000,000 .

the period ended June 30, 2025, additional warrants were exercised to purchase an aggregate of 135,000 shares of the Company’s

common stock at an exercise price of $ 1.00 per share.

The exercises resulted in aggregate cash proceeds of $ 135,000 .

18 - Income Taxes

Company incurred a net operating loss for the three months ended March 31, 2025, accordingly, no provision for income taxes has been

Company incurred a net operating loss for the six months ended June 30, 2025, 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.

March 31, 2025, the Company had approximately $ 10.45 million of federal net operating losses.

The net operating loss carryforwards, if

not utilized, will begin to expire in 2041.

effective income tax rate for the three months ended March 31, 2025 and 2024, was 21 %.

On June 30, 2025,

the Company had approximately $ 12.1 million of federal net operating losses.

The net operating loss carryforwards, if not utilized, will

begin to expire in 2041.

effective income tax rate for the six months ended June 30, 2025, and 2024, was 21 %.

Company has incurred cumulative losses which make realization of a deferred tax asset difficult to support in accordance with ASC 740.

2 unchanged sentences

Accordingly, a valuation allowance has been recorded against the Federal

and state deferred tax assets as of March 31, 2025 and December 31, 2024.

and state deferred tax assets as of June 30, 2025, and December 31, 2024.

Additionally,

in accordance with ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.

TO THE CONDENSED FINANCIAL STATEMENTS

19 – Segment Reporting

22 unchanged sentences

Chief Executive Officer, who acts as the Company’s chief operating decision maker (“CODM”), assesses performance internally.

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED

FINANCIAL STATEMENTS

accounting policies of the retail operations segment are the same as those described in the summary of significant accounting policies

13 unchanged sentences

and Latin America operations segments’ EBITDA to consolidated net earnings before income

tax expense for the three months ended March 31, 2025 and 2024:

tax expense for the six months ended June 30, 2025, and 2024:

of Segment Reporting

For the Three Months Ended

For the Six Months Ended

operations segment sales

Latin American operations segment cost of goods sold

operations segment cost of goods sold

operations segment expenses:

4 unchanged sentences

operations segment EBITDA

$ ( 912,057 )

Latin American operations segment cost of goods sold

19 unchanged sentences

Interest expense

Stock compensation expense

Consolidated net loss before income tax expense

1 unchanged sentence

$ ( 1,993,521 )

TO THE CONDENSED FINANCIAL STATEMENTS

20 — Company Realignment

April 2024, the Company initiated an organizational realignment to expand manufacturing operations by opening and operating a factory

in Pisco, Peru.

This large-scale initiative aligned the Company’s resources, strategies, and goals with our desired outcomes.

incurred total aggregate costs of approximately $ 5.5 million related to this initiative, consisting of (i) approximately $ 4.6 million

in factory start-up costs including purchasing equipment, build-out, and supplies for the new facility and (ii) approximately $ 0.9 million

in factory idle capacity, professional fees, legal fees, travel costs, etc.

The organizational realignment is substantially complete

as of June 30, 2025.

the six months ended June 30, 2025, we incurred approximately $ 1.07 million of realignment costs comprised of:

$ 491,890 for capitalized

machinery and equipment, $ 480,320 for factory idle capacity, $ 23,917 for travel costs and $ 74,394 for professional and legal fees.

the period six months ended June 30, 2024, we incurred $ 20,017 for travel costs and $ 92,303 for professional and legal fees.

21 – Subsequent Events

Company evaluates events that have occurred after the

balance sheet date through the date these financial statements were issued , noting no reportable

event, except as follows:

on Notes Payable, Related Parties

May 7, 2025, the Company repaid $ 325,000 of principal on the $ 1,200,000 Senior Secured Promissory Note from Kaufman Kapital that matures

on June 30, 2025 .

Stock Options Issued to Directors for Services

April 14, 2025, the Company granted options to purchase an aggregate 90,000 shares of the Company’s common stock, consisting of

options to purchase 15,000 shares to each of six directors, having an exercise price of $ 1.94 per share, exercisable over a 10 -year term,

including options to purchase 15,000 shares issued to the Company’s CEO and CFO in consideration of their services as directors.

The options vest monthly over 6 months following the issuance date.

The aggregate estimated value using the plain vanilla Black-Scholes

Pricing Model, based on a volatility rate of 46 % and a call option value of $ 0.8796 , and an expected term of 5 years, was $ 791,170 .

April 11, 2025, the Company granted options to purchase 30,000 shares of the Company’s common stock, having an exercise price of

$ 1.93 per share, exercisable over a 10 -year term, to one of the Company’s directors.

The options vested immediately.

The estimated

value using the plain vanilla Black-Scholes Pricing Model, based on a volatility rate of 46 % and a call option value of $ 0.8765 , and

an expected term of 5 years, was $ 26,294 .

Company evaluates events that have occurred after the balance sheet date through the date these financial statements were issued, noting

no reportable event, except as follows:

July 29, 2025, we entered into an At-The-Market Issuance Sales Agreement (the “ATM Agreement”) with Alexander Capital, L.P.,

as selling agent (the “Sales Agent”).

In accordance with the terms of the ATM Agreement, we may offer and sell shares of

our common stock from time to time through the Sales Agent having an aggregate offering price of up to $ 3,000,000 .

The Sales Agent will

receive a commission of 3.0 % of the gross proceeds of the sales price per share for any shares sold under the ATM Agreement.

of August 13, 2025, 1,000,000 shares

of common stock were issued and 777,896

shares of common stock were sold through the Sales Agent under the ATM Agreement, for aggregate gross proceeds of

$ 1,760,489 .

Following June 30, 2025, warrants to purchase an aggregate of 138,716 shares of common stock at an exercise price of $ 1.00 per share were

exercised, and 63,716 shares were issued, resulting in gross proceeds to the Company of $ 138,716 .

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-Q

Item 1. Financial Statements