Company: BOF
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010566
Chunk: 76

Company: BranchOut Food Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 76
---
 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.

The
Company’s obligations under the Convertible Note are secured by a lien granted to Kaufman Kapital on substantially all of the Company’s
assets pursuant to the Security Agreement. In addition, the Convertible Note includes affirmative and negative covenants, events of defaults
and other terms and conditions, customary in transactions of this nature.

In
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.

The
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
warrants.

    15

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED
FINANCIAL STATEMENTS

(Unaudited)

Note
11 – Notes Payable

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

 Schedule of Notes Payable 

    March 31,  
    December 31, 

    2025  
    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. 
    $167,412  
    $251,647 

    On May 17, 202