Company: BOF
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004712
Chunk: 127

Company: BranchOut Food Inc.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 8
Chunk 127
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 legal matters, threatened claims, or proceedings in the normal course of business.
Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with its legal
counsel, the need to record a liability for litigation and contingencies. Legal accruals are recorded when and if it is determined that
a loss related to a certain matter is both probable and reasonably estimable. There are currently no pending legal matters.

Operating
Lease

On
May 10, 2024, the Company entered into a ten-year lease for the 50,000 square-foot Peru Facility, which commenced operations in December
of 2024. The lease requires monthly lease payments of $8,000 in the first two years of the lease, $20,000 in the third year of the lease,
$22,000 in the fourth year of the lease, $24,000 in the fourth year of the lease, and $25,000 thereafter. The lease also has a 10-year
renewal option, and a buy-out option under which the Company 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.

Other
Contractual Commitments

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.

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
was amended on October 26, 2022, September 27, 2023 and May 23, 2024, 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