Company: BOF
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004712
Chunk: 124

Company: BranchOut Food Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 124
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Peru
Facility Lease

On
May 10, 2024, the Company entered into a ten-year lease for the 50,000 square-foot Peru Facility, which commenced operations in December
of 2024. 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. The
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.

In
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 $355,000 was paid during the year ended December 31, 2024. The remaining $912,000 is to be paid in monthly installments
of $152,000 from January 24, 2025 to June 23, 2025, as presented in other current liabilities on the balance sheet. The unpaid balance
accrues interest at 9%. At December 31, 2024, a total of $33,215 of interest was accrued.

The
components of lease expense were as follows:

 Schedule of Components of Lease Expenses

    2024  
    2023 

    For the Years Ended 

    December
    31, 

    2024  
    2023 
  
    Operating lease cost: 

    Amortization
    of right-of-use asset 
    $103,146  
    $- 
  
    Interest on lease liability 
     89,853  
     - 
  
    Capitalized inventory
    costs 
     (15,313) 
     - 
  
    Total operating lease
    cost 
     177,686  
     - 
  
    Finance lease cost: 

    Amortization of right-of-use
    asset 
    $31,563  
    $- 
  
    Interest on lease liability 
     18,164  
     -