BranchOut Food Inc.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
BOF$1.68-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-04-15.
0001641172-25-004712
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001493152-26-014040
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 131 current paragraphs.
19 unchanged; 10 reworded; 102 added; 97 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (102)
Current report
This section contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Except for statements of historical fact, all statements regarding the Company’s expected future financial position, results of operations, cash flows, liquidity, business strategy, and plans and objectives of management are forward-looking statements. These statements are based on current expectations and assumptions that are subject to risks, uncertainties, and other factors, many of which are beyond the Company’s control, that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Readers are urged to carefully review and consider the disclosures set forth in this Annual Report on Form 10-K, including the risk factors and other cautionary statements, when evaluating these forward-looking statements.
Current report
Business Overview
Current report
BranchOut Food Inc. (collectively with its subsidiary, “BranchOut,” the “Company,” “we,” “us” or “our”), is a growth-stage consumer packaged foods company focused on developing, manufacturing, marketing, and distributing clean-label, plant-based dried fruit and vegetable snacks for retail and foodservice markets through BranchOut-branded products, private-label offerings, and ingredient sales. The Company operates a 50,000 square foot manufacturing facility in Pisco, Peru, (“Peru Facility”) where it produces finished goods using proprietary GentleDry™ technology licensed from EnWave Corporation. Our operating model is manufacturing-led and dependent on agricultural sourcing, production scale, and retail distribution.
Current report
Company Realignment
Current report
Beginning in April 2024, we initiated an organizational realignment to expand our manufacturing capabilities through the development and operation of the Peru Facility. This initiative represents a transition from reliance on third-party manufacturers to in-house production.
Current report
From April 2024 through December 31, 2025, we incurred aggregate costs of approximately $6.7 million related to this initiative, consisting of (i) approximately $5.1 million of facility start-up costs, including equipment purchases, facility build-out, and initial supplies, (ii) approximately $1.2 million of idle capacity costs associated with underutilization during the ramp-up period, and (iii) approximately $0.4 million of professional fees, legal fees, and travel costs. As of December 31, 2025, the Company has substantially completed the organizational realignment. We continue to expand distribution with large national retail customers while increasing production at our Peru Facility. Operations during the year reflected continued scale-up of manufacturing and commercial activities, with production operating below normalized utilization levels.
Current report
Current Operating Position
Current report
We are in a growth and scaling phase. Operating results continue to be influenced by production levels, manufacturing utilization, working capital requirements, and access to capital. Our operating results during the period reflect production operating below normalized utilization. We continue to operate with recurring losses and negative working capital, and liquidity management remains a key focus.
Current report
Key Considerations Going Forward
Current report
Our near-term operating performance will depend primarily on revenue growth, production scale, cost management, and capital availability. Management continues to focus on increasing production volumes, improving manufacturing efficiency, managing working capital, and supporting distribution expansion. While operating leverage may improve as production scales, we remain dependent on external financing to support operations and working capital requirements.
Current report
Strategic Focus
Current report
Our strategy is focused on executing a manufacturing-led growth model:
Current report
2025 Compared to 2024
Current report
For the year ended December 31, 2025, net revenue increased to $13.7 million from $6.4 million in 2024, primarily driven by increased sales volumes to existing customers and new product introductions. Gross profit increased to $2.05 million from $0.8 million in the prior year, and gross margin improved to 14.8% from 12.2%. The improvement in gross margin reflects increased internal manufacturing, changes in product mix, and logistics efficiencies during the period.
Current report
Operating expenses increased to $7.4 million in 2025 from $4.7 million in 2024, reflecting expanded commercial activities, higher administrative costs associated with operating as a public company, and costs associated with scaling production at the Peru Facility. A portion of these expenses relates to production operating below normalized utilization levels. Operating loss increased to $5.4 million from $3.9 million in 2024. Net loss increased to $6.1 million from $4.8 million in the prior year; however, net loss as a percentage of revenue declined due to higher revenue and improved gross margin.
Current report
Cash used in operating activities increased during 2025 primarily as a result of higher operating losses and increased investment in working capital to support revenue growth.
Current report
Adjusted Gross Margin (Non-GAAP)
Current report
In addition to gross margin calculated in accordance with U.S. generally accepted accounting principles (“GAAP”), we use adjusted gross margin, a non-GAAP supplemental measure to evaluate underlying manufacturing performance. Non-GAAP adjusted gross margin excludes depreciation included in cost of goods sold, tariffs incurred under the International Emergency Economic Powers Act (“IEEPA”) during 2025, which were subsequently ruled unlawful by the U.S. Court of International Trade, and certain air freight costs incurred during the year ended December 31, 2025. Gross profit (GAAP) was $2.0 million versus adjusted gross profit (non-GAAP) of $3.8 million, and gross margin was 14.8% compared to adjusted gross margin of 27.8%.
Current report
Beginning in April 2024, we initiated an organizational realignment to transition from third-party manufacturing to in-house production at our Peru Facility. This transition required significant upfront investment in equipment and facility build-out, resulting in increased depreciation that is not yet aligned with production throughput.
Current report
Adjusted gross margin was higher than reported gross margin, reflecting the impact of this depreciation and air freight costs incurred to support customer-required timelines, primarily related to new product introductions. These air freight costs were driven by specific timing and fulfillment requirements and are not expected to recur at similar levels. Additionally, adjusted gross margin excludes the impact of a potential tariff refund of $348,752, which is treated as a gain contingency under ASC 450 and not recognized in the 2025 financial statements.
Current report
We believe adjusted gross margin provides additional visibility into the underlying unit economics of our manufacturing model during this scale-up phase. As the plant gains operating experience and throughput increases, we expect reported gross margin to improve as additional products achieve manufacturing efficiency. Currently, a limited number of products are produced at or near optimal manufacturing efficiency, while other products remain in earlier stages of production and optimization. New product introductions also begin at lower efficiency levels as they transition from development into scaled production and improve over time.
Current report
A reconciliation of gross profit (GAAP) to adjusted gross profit (non-GAAP), and the related gross margin measures, is presented below:
Current report
Operating Model and Margin Considerations
Current report
Our operating results are closely tied to production volume, facility utilization, product mix, and input costs. We began operating our Peru Facility in December 2024 and are continuing to scale production.
Current report
Our gross margin improvement reflects increased production volumes, improved throughput, and better manufacturing efficiency, including gains in uptime, yields, and production flow. As operations continue to scale and become more consistent, we expect further improvements in per-unit costs. Gross margin is also influenced by product mix across our BranchOut-branded, private-label, and industrial ingredient channels, as well as variability in agricultural raw materials, packaging, labor, and freight. In addition, the timing of raw material sourcing and reliance on spot market purchases, when required, can impact input costs.
Current report
During 2025, production levels remained below normalized capacity as we continued to ramp up operations. As a result, a portion of fixed manufacturing costs was not absorbed into inventory and was recognized as idle capacity expense within operating expenses, which impacted operating margin. As production volumes increase and utilization improves, we expect a greater portion of these costs to be absorbed into product costs and a corresponding reduction in idle capacity expense.
Current report
Operating expenses primarily reflect the cost of supporting our manufacturing platform and growth, including facility-related overhead, distribution expansion, and public company requirements. As the business scales, we expect operating expenses to be more effectively leveraged relative to revenue.
Current report
Financial Position and Operating Scale
Current report
We are in a growth and scale-up phase. Future operating performance will depend on revenue growth, production levels, cost management, and working capital requirements. While gross margin improved during 2025, we continue to operate at a net loss and have negative working capital. Future results will depend on our ability to increase production volumes, manage operating expenses, and maintain access to capital.
Current report
In 2025, revenue more than doubled while gross margin improved as production efficiency increased and the business continued to scale. The Peru Facility is not yet operating at normalized utilization, and current margins still reflect early-stage operating inefficiencies and the burden of fixed cost absorption.
Current report
Cost of goods sold for the year ended December 31, 2025 was $11,690,116, compared to $5,652,717 for the year ended December 31, 2024, an increase of $6,037,399, or 107%. Cost of goods sold included $414,518 and $223,856 of depreciation related to the Peru Facility during the years ended December 31, 2025 and 2024, respectively. The increase in cost of goods sold was primarily due to higher sales volumes during the year.
Current report
Gross profit for the year ended December 31, 2025 was $2,034,447, or 14.8% of net revenue, compared to $781,797 or 12.2% of net revenue, for the year ended December 31, 2024. The increase in gross margin was mainly driven by cost savings from higher proportion of production at our manufacturing facility and the use of bulk shipping arrangements. Additionally, revenue increased at a faster rate than operating expenses, reflecting higher production and sales volumes.
Current report
Adjusted gross profit (non-GAAP) for the year ended December 31, 2025 was $3,820,100, or 27.8% of net revenue. Adjusted gross profit excludes depreciation included in cost of goods sold, certain air freight costs related to customer fulfillment and production ramp, and tariffs incurred under the International Emergency Economic Powers Act (“IEEPA”) during 2025, which were subsequently ruled unlawful by the U.S. Court of International Trade. The expected tariff refund is treated as a gain contingency under ASC 450 and was not recognized in the 2025 financial statements. We believe this measure provides additional insight into underlying manufacturing performance by excluding items not indicative of normalized production costs.
Current report
Gross margins have not yet reached expected long-term levels, as the manufacturing facility operated below normalized utilization during the year and results continue to reflect the impact of fixed cost absorption. Gross margin may continue to be affected by changes in production volumes, input costs, and operating efficiency. The Company’s manufacturing operations include a meaningful fixed-cost component, and as production volumes increase, these costs are expected to be spread over a larger number of units, which may reduce unit production costs and improve margins.
Current report
Idle capacity expense increased during 2025 due to unallocated fixed overhead associated with operating our manufacturing facility below normal utilization levels. We began operations at our manufacturing facility in Pisco, Peru in December 2024, and idle capacity was not measured in 2024. Production during 2025 was below the Peru Facility’s expected long-term capacity. These costs primarily reflect operating the facility and supporting production capabilities ahead of full utilization, as well as investments to expand distribution. As production volumes increase, a greater portion of these fixed costs are expected to be absorbed into production.
Current report
Loan receivable impairment increased during 2025 to $401,522 consisting of a non-cash credit loss expense to fully reserve the Nanuva note receivable, driven by our decision to discontinue third-party manufacturing with Nanuva and the resulting uncertainty regarding repayment.
Current report
Research and development expense increased as we continued product development activities. Sales commissions increased in line with higher sales volumes. Rent expense decreased modestly compared to the prior year, while travel expense increased primarily due to higher business activity.
Current report
Salaries and wages for the year ended December 31, 2025 were $1,622,567, compared to $1,604,200 for the year ended December 31, 2024, an increase of $18,367, or 1%. The relatively flat year-over-year change was primarily due to lower stock-based compensation expense compared to the prior year, largely offset by higher cash compensation associated with the commencement of operations at Peru Facility. While a substantial portion of Peru production labor is capitalized to inventory then expensed in cost of goods sold, non-capitalized Peru salaries and U.S.-based salaries both increased during 2025.
Current report
Professional fees for the year ended December 31, 2025 were $1,142,512, compared to $1,291,141 for the year ended December 31, 2024, a decrease of $148,629, or 12%. The decrease was primarily attributable to lower stock-based compensation issued to third-party service providers during 2025 compared to the prior year, as well as a reduction in legal, accounting, and advisory costs associated with operating as a public company.
Current report
Shipping and Handling
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Removed paragraphs (97)
Previous report
Except for historical information, the matters discussed in this section are forward looking statements that involve risks and uncertainties and are based upon judgments concerning various factors that are beyond the Company’s control. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report.
Previous report
Overview
Previous report
We were incorporated as AvoChips Inc., an Oregon corporation, on February 21, 2017, and on November 2, 2017, we converted into Avochips, LLC, an Oregon limited liability company. On November 19, 2021, we converted from an Oregon limited liability company into BranchOut Food Inc., a Nevada corporation.
Previous report
We are engaged in the development, marketing, sale, and distribution of plant-based, dehydrated fruit and vegetable snacks and powders. Our products have historically been manufactured for us by two contract manufacturers, one based in the Republic of Chile, and the other in the Republic of Peru, which housed our large-scale continuous through-put dehydration machine that completed its first production run in the first quarter of 2023. Our dehydrated fruit and vegetable products are produced using a new proprietary dehydration technology licensed by us from a third party. Our customers are primarily located throughout the United States. In 2024, we decided to initiate our own production facility in Peru to become vertically integrated. We recently completed the build out of the new facility, which commenced operations in December 2024, and utilizes three large-scale REV machines (a REV 60, REV 100 and REV 120)thatwe recently purchased from EnWave, as well as, a small REV 10 R&D machine that is being used for product development and customer sample purposes. We expect operating margins to be further improved in 2025, as we become more vertically integrated with the transition of more of our production from third party contract manufacturers to internal production.
Previous report
Using our licensed technology platform, we believe our lines of branded, private-label and industrial ingredient products positively address current consumer trends. In our experience, conventional dehydration methods, such as freeze-drying and air drying, tend to degrade most fruit and vegetables through oxidation, browning/color degradation, nutritional content reduction and/or flavor loss. As a result, certain highly sensitive fruits, such as avocados and bananas, have not previously been successfully offered as a dehydrated base for consumer products. We believe that our licensed technology platform and process is the only way to produce quality avocado and banana-based snack and powdered products. Additionally, we believe our licensed technology platform produces superior products when using other fruits and vegetables when compared to conventional drying and dehydration technologies. We license technology, consisting of a portfolio of patents, and purchased production machines, from EnWave, and we have been granted the exclusive rights to use the licensed technology platform as applied to several products in Peru, and avocado based products in the United States. In addition, BranchOut has the nonexclusive rights to use the licensed technology platform for other products.
Previous report
Our Products
Previous report
We plan to continue to grow revenues strategically by penetrating the multi-billion dollar grocery, industrial ingredient and online markets. Our current product line includes:
Previous report
We are currently developing many additional products for all sales channels.
Previous report
Going Concern Uncertainty
Previous report
As of December 31, 2024, we had a cash balance of $2,329,452, a working capital deficit of $3,897,382 and had incurred recurring losses from operations resulting in an accumulated deficit of $17,562,057. Subsequent to December 31, 2024, we received gross proceeds of approximately $2.4 million from sales of our common stock in an “At-the-Market” registered offering. Although we anticipate that our results of operations will improve substantially as a result of the recent launch of our new facility in Peru, there can be no assurance in that regard. If we continue to generate substantial operating losses, we will not have sufficient funds to sustain our operations for the next twelve months and we will need to raise additional cash to fund our operations. These factors raise substantial doubt about our ability to continue as a going concern.
Previous report
The report of our independent registered public accounting firm that accompanies our audited financial statements in this Annual Report on Form 10-K contains an explanatory paragraph regarding the substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of the going concern uncertainty.
Previous report
NXTDried Superfoods
Previous report
During the fourth quarter of 2023, NXTDried Superfoods, one of our former contract manufacturers located in Peru, became involved in a legal dispute with its landlord and another third party, which resulted in that manufacturer suspending operations. As a result of such dispute, we had to fulfill orders by shifting fulfillment to other manufacturing sources until we commenced operations at our own fully integrated production facility in Peru in the fourth quarter of 2024. During 2023, we recognized $761,085 of impairment expense, consisting of $485,265, $243,305 and $32,515 on the collectability of a note receivable, VAT taxes receivable and prepaid inventory, respectively, owed to us by NXTDried Superfoods.
Previous report
Peru Facility Lease
Previous report
Given the situation with NXTDried Superfoods, we were required to shift fulfillment of orders to alternative manufacturing sources. On May 10, 2024 we entered into a ten-year lease for our 50,000 square-foot food processing plant located in Peru. The lease of the Peru Facility requires us to make 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 we may purchase the facility for $1,865,456.
Previous report
In connection with our lease of the Peru Facility, we paid $275,000 on May 10, 2024 and another $80,000 during the fourth quarter of 2024, as part of the purchase of a first position mortgage receivable in the amount of $1,267,000, which is secured by the Peru Facility and was owed by the landlord of the Peru Facility to its former tenant. The remaining $912,000 is due and payable in monthly installments of $152,000 through June 23, 2025, at which time an additional $55,604 of interest is due, based on a 9% financing rate.
Previous report
Critical Accounting Policies
Previous report
The establishment and consistent application of accounting policies is a vital component of accurately and fairly presenting our financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”), as well as ensuring compliance with applicable laws and regulations governing financial reporting. While there are rarely alternative methods or rules from which to select in establishing accounting and financial reporting policies, proper application often involves significant judgment regarding a given set of facts and circumstances and a complex series of decisions.
Previous report
In June 2023, we completed our IPO in which we sold 1,190,000 shares of common stock at a price of $6.00 per share pursuant to an Underwriting Agreement with Alexander Capital, L.P. (the “Underwriter”). The Company received net proceeds of $6,226,000, after deducting underwriters’ discounts and commissions and before consideration of other issuance costs. In connection with the IPO, a total of $6,029,204 of convertible debt, consisting of $5,526,691 of principal and $502,513 of interest, was converted into 1,572,171 shares of common stock, inclusive of $179,687, consisting of $165,000 of principal and $14,687 of interest, that converted into 43,562 shares of common stock issued upon the conversion of debts held by related parties.
Previous report
Pursuant to the Underwriting Agreement, we also issued the Underwriter a Common Stock Purchase Warrant to purchase up to 82,110 shares of Common Stock at an exercise price of $7.20, which may be exercised for a five-year period beginning December 18, 2023.
Previous report
Prior to the IPO, all deferred offering costs were capitalized in other noncurrent assets on the balance sheets. Deferred offering costs of $1,283,954, primarily consisting of accounting, legal, and other fees related to the Company’s IPO, were offset against the IPO proceeds upon the closing of the IPO in June 2023.
Previous report
Reverse Stock Split
Previous report
On June 15, 2023, we effected a 2.5-for-1 reverse stock split of our outstanding shares of capital stock. All issued and outstanding shares of common stock have been adjusted in these condensed financial statements, on a retrospective basis, to reflect the reverse stock split for all periods presented, as well as all common stock warrants and stock option awards which, by the terms thereof, were subject to adjustment in connection with the reverse stock split. The par value of the common stock was not adjusted by the reverse stock split.
Previous report
Use of Estimates
Previous report
Segment Reporting
Previous report
Under ASC 280,Segment Reporting, operating segments are defined as components of an enterprise where discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance. The Company has two components, consisting of its sales operations in the United States, and its production operations in Peru. Therefore, the Company’s Chief Executive Officer, who is also the CODM, makes decisions and manages the Company’s operations based on these two operating segments for the manufacture and distribution of its products.
Previous report
Fair Value of Financial Instruments
Previous report
ASC 820,Fair Value Measurements and Disclosures, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.
Previous report
ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following:
Previous report
Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
Previous report
Cash and Cash Equivalents
Previous report
Cash equivalents include money market accounts which have maturities of three months or less. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. Cash equivalents are stated at cost plus accrued interest, which approximates market value. There were no cash equivalents on hand on December 31, 2024 and 2023.
Previous report
Cash in Excess of FDIC Insured Limits
Previous report
The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000, under current regulations. The Company had $1,555,223 and $407,789 in excess of FDIC insured limits on December 31, 2024 and 2023, respectively, and has not experienced any losses in such accounts.
Previous report
Accounts Receivable
Previous report
Accounts receivable is carried at their estimated collectible amounts. Trade accounts receivable is periodically evaluated for collectability based on past credit history with customers and their current financial condition. The Company had an allowance for doubtful accounts of $25,586 at December 31, 2024. No allowance for doubtful accounts was necessary at December 31, 2023.
Previous report
Inventory
Previous report
The Company’s products consist of pre-packaged and bulk-dried fruit and vegetable-based snacks, powders and ingredients purchased from contract-manufacturers in Chile and/or Peru. The Company’s contract manufacturer in Peru uses equipment purchased by the Company in its manufacturing process. Raw materials consist of packaging materials. Appropriate consideration is given to obsolescence, excessive levels, deterioration, and other factors in evaluating net realizable value. No reserve for obsolete inventories has been recognized. Inventory, consisting of raw materials and finished goods are stated at the lower of cost or net realizable value using the average cost valuation method, at December 31, 2024 and 2023, consisted of the following:
Previous report
The Company had prepaid inventory advances on products in the amount of $123,792 and $-0- as of December 31, 2024 and 2023, respectively. Advances of 70% of estimated finish product costs are made to enable manufacturer’s purchase of raw materials to produce finished products. The remaining 30% is paid upon receipt of finished goods.
Previous report
Property and Equipment
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Previous wording
This discussion summarizes the significant factors affecting the operating results, financial condition, liquidity and cash flows of the Company for the fiscal years ended December 31, 2024 and 2023. The discussion and analysis that follows should be read together with the section entitled “Forward Looking Statements” and our financial statements and the notes to the financial statements included elsewhere in this annual report on Form 10-K.
Current wording
This discussion summarizes the significant factors affecting the Company’s results of operations, financial condition, liquidity, and cash flows for the fiscal years ended December 31, 2025 and 2024. The following discussion and analysis should be read in conjunction with the section entitled “Forward-Looking Statements” and the Company’s consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
Previous wording
Our net revenue for the year ended December 31, 2024 was $6,516,337, compared to $2,825,855 for the year ended December 31, 2023, an increase of $3,690,482, or 131%. The increase in revenue was primarily due to increased sales to our largest customer during the year ended December 31, 2024.
Current wording
Our net revenue for the year ended December 31, 2025 was $13,724,563, compared to $6,434,514 for the year ended December 31, 2024, an increase of $7,290,049, or 113%. The increase in revenue was primarily due to higher sales to our largest customers, driven by increased volumes and new product releases. Our revenue may fluctuate due to the seasonal nature of raw material harvest cycles and variability in the timing and size of customer orders.
Previous wording
Cost of Goods Sold and Gross Profit (Loss)
Current wording
Cost of Goods Sold and Gross Profit
Previous wording
Our general and administrative expense for the year ended December 31, 2024 was $1,870,720, compared to $1,581,474 for the year ended December 31, 2023, an increase of $289,246, or 18%. The largest components of our general and administrative expenses are advertising and marketing, rent, travel, commissions, and storage, shipping and handling expense, as shown below.
Current wording
General and administrative expense for the year ended December 31, 2025 was $3,485,195, compared to $1,100,045 for the year ended December 31, 2024, an increase of $2,385,150, or 217%. The increase was primarily related to higher operating activity and the expansion of our manufacturing and administrative infrastructure. The largest components of our general and administrative expenses are plant idle capacity, loan receivable impairment, research and development, rent, travel, sales commissions, and royalties as shown below.
Previous wording
In the year ended December 31, 2024, other expense was $849,075, consisting of $863,231 of interest expense, as partially offset by $14,156 of interest income. During the year ended December 31, 2023, other expense was $423,552, consisting of $435,271 of interest expense, as partially offset by $11,719 of interest income. Other expense increased by $425,523, or 100%, primarily due to interest on increased outstanding debt as we funded our expansion into Peru during the current year.
Current wording
For the year ended December 31, 2025, other expense was $761,195, consisting of $780,595 of interest expense, partially offset by $19,400 of interest income. For the year ended December 31, 2024, other expense was $849,075, consisting of $863,231 of interest expense, partially offset by $14,156 of interest income. Other expense decreased by $87,880, or 10%, primarily due to lower interest expense following the repayment of certain debt financing during 2025.
Previous wording
As of December 31, 2024, we had negative working capital of $3,897,382. We have incurred net losses since our inception and we anticipate net losses and negative operating cash flows for the near future. To date, our primary sources of capital have been cash generated from the sales of our products, common stock sales, and debt and convertible debt financing. As of December 31, 2024, we had cash of $2,329,452, total liabilities of $10,514,292, and an accumulated deficit of $17,562,057. As of December 31, 2023, we had cash of $657,789, total liabilities of $914,622, and an accumulated deficit of $12,810,541.
Current wording
To date, our primary sources of capital have been cash generated from the sales of our products, common stock sales, and debt and equity financing. As of December 31, 2025, we had cash of $616,278, total liabilities of $8,887,985, and an accumulated deficit of $23,686,729. As of December 31, 2024, we had cash of $2,329,452, total liabilities of $10,514,292, and an accumulated deficit of $17,562,057.
Previous wording
Satisfaction of our Cash Obligations for the Next 12 Months
Current wording
Satisfaction of Cash Obligations for the Next 12 Months
Previous wording
On August 30, 2024, the Company borrowed $1,200,000 from Kaufman Kapital pursuant to a Senior Secured Promissory Note in the principal amount of $1,200,000 (the “Note”) issued by the Company to Kaufman Kapital. The Note matures on June 30, 2025. The loan under the Note bears interest at a rate of 15% per annum. The Company’s obligations under the Note are secured by a lien on substantially all of the Company’s assets pursuant to the Security Agreement.
Current wording
On January 28, 2026, we borrowed $1.5 million from Kaufman Kapital LLC (“Kaufman Kapital”) pursuant to a senior secured promissory note that matures on January 28, 2027 and bears interest at 8% per annum. The obligations under the note are secured by a lien on substantially all of our assets under an existing security agreement. In addition, in January 2026, Kaufman Kapital converted $500,000 of principal outstanding under a 12% senior secured convertible promissory note into shares of common stock.
Previous wording
The accompanying financial statements appearing in this 10-K have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Current wording
The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, including adjustments to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.
Previous wording
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
Current wording
The preparation of the Company’s consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures. Management bases its estimates on historical experience, current conditions, and various other assumptions believed to be reasonable under the circumstances. Actual results may differ from these estimates, and such differences may be material to the consolidated financial statements.