Company: BOF
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021655
Chunk: 49

Company: BranchOut Food Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1
Chunk 49
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kW, or greater
rated power, EnWave Equipment (the “Third EnWave Machine”) on or before December 31, 2025, and satisfy the payment obligations
required with respect to the Third EnWave Machine by the License Agreement.

On
September 16, 2025 the Company entered into a Purchase Agreement for the Third EnWave Machine, a refurbished 120kW REV vacuum microwave
for a purchase price of $1,500,000. The purchase price is payable in 24 equal monthly installments, commencing April 1, 2026, pursuant
to a secured promissory note (the “Promissory Note”) bearing interest at the rate of 8.00% per annum.

The
Company is also required to enter an Equipment Purchase Agreement for a 120kW, or greater, rated power EnWave Equipment (the “Fourth
EnWave Machine”) on, or before, December 31, 2026, and to satisfy the payment obligations required with respect to the Fourth EnWave
Machine by the License Agreement. The license is not discernible from the equipment; therefore, the license costs have been capitalized
and depreciated over the useful life of the equipment.

Note
20 - Income Taxes

The
Company incurred a net operating loss for the nine months ended September 30, 2025, accordingly, no provision for income taxes has been
recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. On
September 30, 2025, the Company had approximately $13.7 million of federal net operating losses. The net operating loss carryforwards,
if not utilized, will begin to expire in 2041.

The
effective income tax rate for the nine months ended September 30, 2025, and 2024, was 21%.

The
Company has incurred cumulative losses which make realization of a deferred tax asset difficult to support in accordance with ASC 740.
Based on the available objective evidence, including the Company’s history of its loss, management believes it is more likely than
not that the net deferred tax assets will not be fully realizable. Accordingly, a valuation allowance has been recorded against the Federal
and state deferred tax assets as of September 30, 2025, and December 31, 2024.

Additionally,
in accordance with ASC 740, the Company has evaluated its tax positions and determined there are no uncertain tax positions.