BranchOut Food (BOF) - 2024 Q4 - Annual Report

Financial Position - As of December 31, 2024, the company had a cash balance of $2,329,452 and an accumulated deficit of$17,562,057[183]. - The company has a working capital deficit of $3,897,382 as of December 31, 2024[183]. - As of December 31, 2024, the company reported negative working capital of$3,897,382, total liabilities of $10,514,292, and an accumulated deficit of$17,562,057, compared to an accumulated deficit of $12,810,541 in 2023[232]. Revenue and Profitability - The company's net revenue for the year ended December 31, 2024, was$6,516,337, an increase of $3,690,482, or 131$2,825,855 for the year ended December 31, 2023[223]. - Cost of goods sold for the year ended December 31, 2024, was $5,652,717, an increase of$2,730,632, or 93%, compared to $2,922,085 for the year ended December 31, 2023[224]. - The company achieved a gross profit of$863,620, or 13% of revenues, for the year ended December 31, 2024, compared to a gross operating loss of $96,230, or (3$289,246, or 18%, to $1,870,720 for the year ended December 31, 2024, compared to$1,581,474 for the year ended December 31, 2023[225]. - Salaries and wages increased by $474,342, or 42$1,604,200 for the year ended December 31, 2024, compared to $1,129,858 for the year ended December 31, 2023[227]. - Professional fees rose by$596,545, or 86%, to $1,291,141 for the year ended December 31, 2024, compared to$694,596 for the year ended December 31, 2023[228]. - Other expenses increased by $425,523, or 100$849,075 for the year ended December 31, 2024, primarily due to increased interest expense[229]. - Advertising and marketing expenses increased by $149,538, or 92$311,586 for the year ended December 31, 2024, compared to $162,048 for the year ended December 31, 2023[226]. - The company recognized$704,699 in stock-based compensation for the year ended December 31, 2024, compared to $258,574 for the year ended December 31, 2023[215]. Net Loss - The company's net loss for the year ended December 31, 2024, was$4,751,516, an increase of $825,806, or 21$3,925,710 for the year ended December 31, 2023[230]. Cash Flow - Net cash used in operating activities increased by $1,330,444, or 38$4,859,816 for the year ended December 31, 2024, primarily due to increased net loss and inventory purchases[234]. - Net cash used in investing activities surged by $2,705,996, or 2,321$2,822,561 for the year ended December 31, 2024, mainly due to increased property and equipment purchases[235]. - Net cash provided by financing activities rose by $5,607,342, or 149$9,362,621 for the year ended December 31, 2024, driven by increased net proceeds from debt and convertible debt financing[236]. Financing Activities - The company raised $2,400,000 from sales of common stock in an "At-the-Market" offering after December 31, 2024, but anticipates needing additional financing to sustain operations[243]. - The company completed the sale of 1,750,000 shares of common stock in a public offering at a price of$0.80 per share, resulting in net proceeds of $1,164,685[242]. - The company entered into an ATM Agreement with Alexander Capital for the sale of shares of common stock with an aggregate offering price of up to$5 million, having sold 1,317,307 shares for gross proceeds of approximately $2.5 million as of December 31, 2024[240]. - The company has secured financing through various promissory notes, including a$3,400,000 convertible note and a $1,200,000 senior secured promissory note, both secured by a lien on substantially all assets[237][238]. Operational Developments - The new production facility in Peru commenced operations in December 2024, utilizing three large-scale REV machines[179]. - The company plans to improve operating margins in 2025 by transitioning production from third-party manufacturers to internal production[179]. Impairment and Allowance - The company recognized$761,085 of impairment expense during 2023 due to issues with NXTDried Superfoods, including $485,265 on a note receivable[185]. - The company had an allowance for doubtful accounts of$25,586 as of December 31, 2024, with no allowance necessary in 2023[200]. Depreciation - The company incurred depreciation expenses of $171,873 and$223,856 for the years ended December 31, 2024, and 2023, respectively[202]. Emerging Growth Company Status - The company remains an emerging growth company and is eligible for certain exemptions from various reporting requirements, which may affect the comparability of its financial statements[246].