Company: BOF
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-010566
Chunk: 74

Company: BranchOut Food Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 74
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 the purchase price of the facility.

(2)VAT tax receivable
is comprised of taxes that were paid as the Company imported equipment and raw materials into Peru. These taxes will be refunded as inventory
is exported, or if equipment is exported for any unforeseeable reason.

    14

BRANCHOUT
FOOD INC.

NOTES
TO THE CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Note
8 – Notes Receivable

Nanuva
Note Receivable

On
February 4, 2021, the Company entered into a Manufacturing and Distributorship Agreement (“MDA”) with Natural Nutrition SpA,
a Chilean company (“Nanuva”), in which the Company loaned $500,000 to Nanuva (“Advance Payment”) to help finance
the capital investment needed for Nanuva to purchase two industrial fruit drying machines to be used in servicing the Company’s
manufacturing needs. Pursuant to the MDA, the Company is entitled to recover the Advance Payment in full no later than May 31, 2027,
which prior to repayment, will bear interest at 3% per annum. The Advance Payment is to be repaid pursuant to a two-dollar ($2/kg) deduction
in the price of any product exported by Nanuva to the Company with certain mandatory minimum annual payments. Repayments commence on
the earlier of a) the first invoice issued by Nanuva after installation of the drying equipment, or b) June 30, 2021. The MDA expires
on May 31, 2027, with automatic annual renewals thereafter, unless it is terminated in accordance with the terms of the MDA. The Company
deferred collection of the minimum annual payment requirement for 2023 until 2024 when several large orders were placed. As of March
31, 2025, a total of $156,241 of the Advance Payment had been repaid as a reduction of inventory costs, consisting of $140,018 of principal
and $16,223 of interest. All payments consisted of reductions in inventory costs, other than a payment of $15,000 in cash on March 24,
2021. As of March 31, 2025, a total of $393,385 was outstanding from Nanuva, consisting of $359,982 of principal and $33,403 of unpaid
interest. The Advance Payment is collateralized by a second lien in the equipment. Purs