BranchOut Food (BOF) Status update summary

Financial performance and margin analysis

• Net revenue increased from $6.4 million to $14.3 million, exceeding the doubling target for the year.

• Adjusted gross margin, accounting for depreciation, air freight, and tariff receivables, was 27.8%.

• G&A expenses rose to $3.48 million, with $1.2 million attributed to idle capacity costs.

• R&D expenses increased significantly due to new product testing and development.

• Convertible note payable of $3.36 million is expected to be fully converted, improving the current liability profile.

Operational updates and capacity expansion

• Fourth production line installation in Peru is nearly complete, expanding product capabilities.

• March marked the first month reaching 45 metric tons of production, with utilization at 50%-60%.

• New production line will increase monthly capacity by 40%, targeting up to 80 metric tons.

• Focus remains on optimizing around five core products for efficiency and scalability.

• Dairy-based products offer higher throughput and margin potential due to lower moisture and processing needs.

Sales pipeline and customer diversification

• Major customers include Costco, Sam's Club, and MicroDried, with new products and reorders expanding reach.

• First nationwide Sam's Club order valued at $1.5 million, with potential to scale to $10-$15 million.

• Target to launch five branded SKUs, enhancing brand visibility.

• Walmart and European private label opportunities are advancing, with focus on GLP-1 and high-protein products.

• Pipeline includes partnerships with chocolate and dairy companies, and ongoing innovation for new channels.