Company: BOF
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001641172-25-023605
Chunk: 51

Company: BranchOut Food Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 51
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, Cherry Tomato, Avocado and many others.

We
are currently developing many additional products for all sales channels.

27

Going
Concern Uncertainty

As
of June 30, 2025, we had a cash balance of $641,129, a positive working capital of $662,217, and had incurred recurring losses from
operations resulting in an accumulated deficit of $20,083,595. Although we anticipate that our results of operations will improve
substantially as a result of the recent launch of our new facility in Peru, there can be no assurance in that regard. If we continue
to generate substantial operating losses, we will not have sufficient funds to sustain our operations for the next twelve months and
we will need to raise additional cash to fund our operations. These factors raise substantial doubt about our ability to continue as
a going concern.

The
condensed consolidated financial statements do not include any adjustments that might result from the outcome of any uncertainty as to
the Company’s ability to continue as a going concern. The condensed consolidated financial statements also do not include any adjustments
relating to the recoverability and classification of recorded asset amounts or amounts and classifications of liabilities that might
be necessary should the Company be unable to continue as a going concern. Our ability to scale production and distribution capabilities
and further increase the value of our brands is largely dependent on our success in raising additional capital.

Peru
Facility Lease

On
May 10, 2024, we 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 the Company plans to exercise the buy-out option and purchase the Peru
Facility for $1,865,456.

In
connection with the lease of the Peru Facility, we 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 payments were made