Company: BOF
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021655
Chunk: 48

Company: BranchOut Food Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 1
Chunk 48
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 may purchase the Peru Facility for $1,865,456.

Finance
Lease

The
Company leases equipment under a non-cancelable finance lease payable in monthly installments of $3,657 expiring on May 31, 2028.

NXTDried
Manufacturing Agreement

On
January 19, 2022, the Company entered into a contract manufacturing agreement with NXTDried Superfoods SAC to produce products for distribution
by the Company. The Company agreed to pre-pay for inventory via an advance to enable the manufacturer to invest in necessary processing
facilities that will be reimbursed to the Company on an agreed per kg basis over the period of 2022 to 2026.

EnWave
License Agreement

On
May 7, 2021, the Company entered into a license agreement (“License Agreement”) with EnWave, pursuant to which EnWave licensed
to the Company a collection of patents and intellectual property (the “EnWave Technology”) used to manufacture and operate
vacuum microwave dehydration machines purchased by the Company from EnWave (the “EnWave Equipment”). The License Agreement
is effective as long as EnWave possesses its EnWave technology.

At
various dates the License Agreement has been amended to, among other things, modify the exclusivity retention royalty payments required
to be paid by the Company. The License Agreement entitles EnWave to a fixed royalty percentage on all of the Company’s revenue
from the sale of products produced using the EnWave Technology, net of trade or volume discounts, refunds paid, settled claims for damaged
goods, applicable excise, sales and withholding taxes imposed at the time of the sale, and provides the Company with certain exclusivity
rights.

    28

In
order to maintain exclusivity, the Company must make annual royalty minimum payments to EnWave of $250,000 per year, commencing in 2025
and continuing through each subsequent year in perpetuity, as long as the Company elects to maintain exclusivity. The Company recognized
$167,540 of royalty expenses for the nine months ended September 30, 2025.

In
addition to the initial EnWave Equipment we purchased, the Company agreed to purchase additional equipment from EnWave overtime. The
additional equipment purchase schedule, as amended, required the Company to purchase a “Second EnWave Machine”, which was
purchased in full on December 12, 2024. The Company is also required to execute an Equipment Purchase Agreement for a 120