Company: BOF
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021655
Chunk: 71

Company: BranchOut Food Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 8
Chunk 71
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hold Improvements
     
    15 years

    10

Repairs
and maintenance expenditures are charged to operations as incurred. Major improvements and replacements, which extend the useful life
of an asset, are capitalized, and depreciated over the remaining estimated useful life of the asset. When assets are retired or sold,
the cost and related accumulated depreciation are eliminated, and any resulting gain or loss is reflected in operations.

Impairment
of Long-Lived Assets

Long-lived
assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount
of an asset may not be recoverable or is impaired. Recoverability is assessed using undiscounted cash flows based upon historical results
and current projections of earnings before interest and taxes. Impairment is measured using discounted cash flows of future operating
results based upon a rate that corresponds to the cost of capital. Impairments are recognized in operating results to the extent that
carrying value exceeds discounted cash flows of future operations.

Our
indefinite-lived brand names and trademarks acquired and are assigned an indefinite life as we anticipate that these brand names will
contribute cash flows to the Company perpetually. We evaluate the recoverability of intangible assets periodically by considering events
or circumstances that may warrant revised estimates of useful lives or that indicate the asset may be impaired. The Company expenses
internally developed trademarks.

Derivatives

The
Company evaluates convertible notes payable, stock options, stock warrants and other contracts to determine if those contracts or embedded
components of those contracts qualify as derivatives to be separately accounted for under the relevant sections of ASC Topic 815-40,
Derivative Instruments and Hedging: Contracts in Entity’s Own Equity.

The
result of this accounting treatment could be that the fair value of a financial instrument is classified as a derivative instrument and
is marked-to-market at each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability,
the change in fair value is recorded in the statement of operations as other income or other expense. Upon conversion or exercise of
a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.
Financial instruments that are initially classified as equity that become subject to reclassification under ASC Topic 815-40 are reclassified
to a liability account at the fair value of the instrument on the reclassification date.

Cost
of Goods Sold

Cost
of goods sold includes the direct costs