Based on the provided financial report articles, I generated the title for the article: "Consolidated Balance Sheets and Statements of Changes in Stockholders' Equity (Unaudited) for the Quarter Ended March 31, 2025 and 2024" Please note that the title may not be exact, as the provided text is a financial report and may contain technical terms and formatting that are not easily readable.
Unfortunately, the provided text does not contain a financial report, but rather a series of financial data and footnotes in a format that is not easily readable. However, I can try to summarize the key financial figures and main events mentioned in the text.
The text appears to be a financial report for a company with the ticker symbol 0001962481, covering the period from January 1, 2024, to March 31, 2025. The report includes information on the company’s assets, liabilities, and equity, as well as its income statement and cash flows.
Some of the key financial figures mentioned in the text include:
- Assets: The company’s total assets increased from $X as of December 31, 2024, to $Y as of March 31, 2025.
- Liabilities: The company’s total liabilities increased from $X as of December 31, 2024, to $Y as of March 31, 2025.
- Equity: The company’s total equity increased from $X as of December 31, 2024, to $Y as of March 31, 2025.
- Revenue: The company’s revenue increased from $X as of March 31, 2024, to $Y as of March 31, 2025.
- Net income: The company’s net income increased from $X as of March 31, 2024, to $Y as of March 31, 2025.
The text also mentions that the company has made significant investments in office equipment and furniture and fixtures during the period.
Please note that this summary is based on the limited information provided and may not be a comprehensive summary of the financial report.
Overview
BranchOut Food Inc. (formerly known as AvoChips Inc. and Avochips, LLC) is a Nevada corporation engaged in the development, marketing, sale, and distribution of plant-based, dehydrated fruit and vegetable snacks and powders. The company was incorporated in 2017 and has undergone several organizational changes, including converting from an Oregon limited liability company to a Nevada corporation in 2021.
BranchOut’s products are manufactured using a proprietary dehydration technology licensed from a third party. The company’s customers are primarily located in the United States, and in 2024, BranchOut decided to initiate its own production facility in Peru to become vertically integrated. The new facility, which commenced operations in December 2024, utilizes three large-scale REV machines purchased from EnWave, as well as a small REV 10 R&D machine for product development and customer sample purposes.
Our Products
BranchOut’s current product line includes:
- BranchOut Snacks: Dehydrated fruit and vegetable-based snacks, such as Avocado Chips, Chewy Banana Bites, Pineapple Chips, Brussels Sprout Crisps, Strawberry Crisps, and Bell Pepper Crisps.
- Private Label: Prunes, Carrots, Brussel Sprouts, and Raisins sold to major retailers.
- BranchOut Industrial Ingredients: Banana, Mango, Blueberry, Pineapple, Cherry Tomato, Avocado, and many others.
The company is currently developing many additional products for all sales channels.
Going Concern Uncertainty
As of March 31, 2025, BranchOut had a cash balance of $2,386,381, a working capital deficit of $2,736,656, and had incurred recurring losses from operations resulting in an accumulated deficit of $18,480,439. Although the company anticipates that its results of operations will improve substantially as a result of the recent launch of its new facility in Peru, there can be no assurance in that regard. If BranchOut continues to generate substantial operating losses, it will not have sufficient funds to sustain its operations for the next twelve months and will need to raise additional cash to fund its operations. These factors raise substantial doubt about the company’s ability to continue as a going concern.
Peru Facility Lease
In 2024, BranchOut formed BranchOut Food Sucursal Peru for the purpose of developing a production facility to produce its products in Peru. The company entered into a ten-year lease for a 50,000 square-foot food processing plant located in Peru, with monthly lease payments ranging from $8,000 to $25,000. The lease also has a 10-year renewal option and a buy-out option under which BranchOut may purchase the facility for $1,865,456. The company began manufacturing products at the Peru Facility in December 2024 and produced approximately $1,450,000 of products during the first quarter of 2025.
Results of Operations for the Three Months Ended March 31, 2025 and 2024
| Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase / (Decrease) |
|---|---|---|---|
| Net revenue | $3,193,522 | $1,467,016 | $1,726,506 |
| Cost of goods sold | $2,641,007 | $1,183,428 | $1,457,579 |
| Gross profit | $552,515 | $283,588 | $268,927 |
| Operating expenses | $1,235,055 | $1,308,688 | $(73,633) |
| Operating loss | $(682,540) | $(1,025,100) | $(342,560) |
| Net loss | $(918,382) | $(1,050,967) | $(132,585) |
Net Revenue BranchOut’s net revenue for the three months ended March 31, 2025 was $3,193,522, compared to $1,467,016 for the three months ended March 31, 2024, an increase of $1,726,506, or 118%. The increase in revenue was primarily due to increased sales to the company’s two largest customers.
Cost of Goods Sold and Gross Profit BranchOut’s cost of goods sold for the three months ended March 31, 2025 was $2,641,007, compared to $1,183,428 for the three months ended March 31, 2024, an increase of $1,457,579, or 123%. The increase in cost of goods sold was primarily due to the increased sales during the three months ended March 31, 2025. As a result, the company had a gross profit of $552,515, representing gross margins of 17%, for the three months ended March 31, 2025, compared to a gross profit of $283,588, or gross margins of 19%, for the three months ended March 31, 2024. The slight decrease in gross profit margin was due primarily to costs incurred transitioning the production of the company’s products to the Peru Facility.
General and Administrative BranchOut’s general and administrative expenses for the three months ended March 31, 2025 were $685,779, compared to $319,736 for the three months ended March 31, 2024, an increase of $366,043, or 114%. The largest components of the increase were in advertising and marketing, rent, and travel expenses.
Salaries and Wages Salaries and wages for the three months ended March 31, 2025 were $314,242, compared to $598,286 for the three months ended March 31, 2024, a decrease of $284,044, or 47%. This decrease was primarily attributable to a reduction in non-cash, stock-based compensation.
Professional Fees Professional fees for the three months ended March 31, 2025 were $235,034, compared to $390,666 for the three months ended March 31, 2024, a decrease of $155,632, or 40%. This decrease was primarily attributable to a reduction in non-cash, stock-based compensation.
Other Income (Expense) In the three months ended March 31, 2025, other expense was $235,842 on a net basis, consisting of $240,978 of interest expense, as partially offset by $5,136 of interest income. This increase in other expense was primarily due to interest on increased outstanding debt as the company funded its expansion into Peru during 2024.
Net Loss BranchOut’s net loss for the three months ended March 31, 2025 was $918,382, compared to $1,050,967 for the three months ended March 31, 2024, a decrease of $132,585, or 13%. The decreased net loss was primarily due to increased gross profits and a decrease in stock-based compensation, as partially offset by increased general and administrative expenses.
Liquidity and Capital Resources
As of March 31, 2025, BranchOut had negative working capital of $2,736,656. The company has incurred net losses since its inception and anticipates net losses and negative operating cash flows for the near future. To date, its primary sources of capital have been cash generated from product sales, common stock sales, and debt and equity financing.
Cash Flow
| Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 |
|---|---|---|
| Net cash used in operating activities | $(1,927,122) | $(503,578) |
| Net cash used in investing activities | $(377,841) | $(40,100) |
| Net cash provided by financing activities | $2,461,215 | $137,589 |
| Effect of exchange rate changes on cash | $8,209 | $- |
| Net change in cash | $56,929 | $(406,089) |
The increase in net cash used in operating activities was primarily due to increased accounts receivable as of March 31, 2025. The increase in net cash used in investing activities was primarily attributable to increased property and equipment purchases. The increase in net cash provided by financing activities was primarily from increased net proceeds received on the sale of common stock.
Cautionary Notice Regarding Forward-Looking Statements
This report includes “forward-looking statements” that are subject to risks and uncertainties. Actual results may differ materially from the company’s expectations, and investors are cautioned not to unduly rely on such statements.
