Company: BOF
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004712
Chunk: 102

Company: BranchOut Food Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 102
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 accordance with ASC 606, Revenue from Contracts with Customer. Under ASC 606, the Company recognizes
revenue from the sale of its plant-based snack products in accordance with a five-step model in which the Company evaluates the transfer
of promised goods or services and recognizes revenue when customers obtain control of promised goods or services in an amount that reflects
the consideration which the Company expects to be entitled to receive in exchange for those goods or services. To determine revenue recognition
for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify
the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate
the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance
obligation. The Company has elected, as a practical expedient, to account for the shipping and handling as fulfillment costs, rather
than as separate performance obligations, and the related costs are recorded as selling expenses in general and administrative expenses
in the statement of operations. Revenue is reported net of applicable provisions for discounts, returns and allowances. Methodologies
for determining these provisions are dependent on customer pricing and promotional practices. The Company records reductions to revenue
for estimated product returns and pricing adjustments in the same period that the related revenue is recorded. These estimates are based
on industry-based historical data, historical sales returns, if any, analysis of credit memo data, and other factors known at the time.

The
Company’s sales are predominantly generated from the sale of finished products to retailers, and to a lesser extent, direct to
consumers through third party website platforms. These sales contain a single performance obligation, and revenue is recognized at a
single point in time when ownership, risks and rewards transfer. Typically, this occurs when the goods are received by the retailer or
customer, or when the title of goods is exchanged. Revenues are recognized in an amount that reflects the net consideration the Company
expects to receive in exchange for the goods.

The
Company promotes its products with advertising, consumer incentives and trade promotions. These programs include discounts, slotting
fees, coupons, rebates, in-store display incentives and volume-based incentives. Customer trade promotion and consumer incentive activities
are recorded as a reduction to the transaction price based on amounts estimated as being due to customers and consumers at the end of
a period. The Company derives