Company: BOF
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021655
Chunk: 130

Company: BranchOut Food Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 2
Chunk 130
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 during the nine months ended
September 30, 2025. As a result of the foregoing, we had gross profit of $1,728,524, representing gross margins of 17.8%, for the nine
months ended September 30, 2025, as compared to a gross margin of $768,687, of 15.3%, for the nine months ended September 30, 2024.

Gross
margin increased primarily due to the transition of manufacturing operations from third-party suppliers to our facility located in Pisco,
Peru. This insourcing initiative created greater control over production processes, improved product quality, reduced contract manufacturing
costs, and improved overall efficiency shortening the production cycle and allowing for faster order fulfillment. As production continues
to scale, we expect further margin expansion from manufacturing existing products more efficiently and from our enhanced ability to bring
new products to market more quickly.

33

General
and Administrative

Our
general and administrative expense for the nine months ended September 30, 2025, was $2,204,559, compared to $666,600 for the nine months
ended September 30, 2024, an increase of $1,537,959, or 231%. The largest components of our general and administrative expenses are plant
idle capacity, research and development, rent, travel, and commissions, as shown below.

    Nine Months Ended September 30,  

    2025  
    2024  
    Difference  
    % Change 

    Idle Capacity 
    $848,906  
    $-  
    $848,906  
     100%
  
    Research & Development 
    $208,265  
    $14,348  
    $193,917  
     1,352%
  
    Rent 
    $152,020  
    $160,751  
    $(8,731) 
     (5)%
  
    Travel 
    $172,118  
    $99,132  
    $72,986  
     74%
  
    Commissions 
    $197,130  
    $139,049  
    $58,081  
     42%

Idle
capacity increased due to the opening of the production facility located in Pisco, Peru. In December 2024 operations commenced at the
facility. As our factory scales, idle capacity will decrease. Rent increase is related to the