Company: BOF
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004712
Chunk: 13

Company: BranchOut Food Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 13
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 its production
operations in Peru. Therefore, the Company’s Chief Executive Officer, who is also the CODM, makes decisions and manages the Company’s
operations based on these two operating segments for the manufacture and distribution of its products.

Fair
Value of Financial Instruments

ASC
820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy for instruments measured at fair value that distinguishes
between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable
inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent
of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants
would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

    F-7

BRANCHOUT
                                            FOOD INC.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

ASC
820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions
in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:

    -
    Level
    1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
  
    -
    Level
    2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that
    are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
  
    -
    Level
    3 inputs to valuation methodology are unobservable and significant to the fair measurement.

Financial
assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination
of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest
for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level
of any input that is significant to the fair value measurement.

Cash
and Cash Equivalents

Cash
equivalents include money market accounts which have maturities of three months or