Company: BOF
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023605
Chunk: 112

Company: BranchOut Food Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 8
Chunk 112
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, or 122%. Cost of goods sold increased primarily due to increased sales during the six months ended June 30,
2025. As a result of the foregoing, we had gross profit of $1,158,974, representing gross margins of 17.8%, for the six months ended
June 30, 2025, as compared to a gross margin of $432,347, of 15.3%, for the six months ended June 30, 2024.

Gross
margin increased primarily due to the transition of manufacturing operations from third-party suppliers to our facility located in Pisco,
Peru. This insourcing initiative created greater control over production processes, improved product quality, reduced contract manufacturing
costs, and improved overall efficiency shortening the production cycle and allowing for faster order fulfillment. As production continues
to scale, we expect further margin expansion from manufacturing existing products more efficiently and from our enhanced ability to bring
new products to market more quickly.

31

General
and Administrative

Our
general and administrative expense for the six months ended June 30, 2025, was $1,307,047, compared to $349,912 for the six months ended
June 30, 2024, an increase of $957,135, or 274%. The largest components of our general and administrative expenses are plant idle capacity,
rent, travel, and commissions, as shown below.

    Six Months Ended June 30,  

    2025  
    2024  
    Difference  
    % change 

    Idle Capacity 
    $480,320  
    $-  
    $480,320  
     100%
  
    Rent 
    $101,150  
    $47,913  
    $53,237  
     111%
  
    Travel 
    $132,224  
    $68,630  
    $63,594  
     93%
  
    Commissions 
    $133,202  
    $114,139  
    $19,063  
     17%

Idle
capacity increased due to the opening of the production facility located in Pisco, Peru. In December 2024 operations commenced at the
facility. As our factory scales, idle capacity will decrease. Rent increase is related to the Pisco, Peru production facility. Travel
increased due to the opening of the facility in Peru and sales initiatives to expand production distribution. Com