BranchOut Food Inc. reported its financial results for the first quarter of 2026, revealing a net revenue of $2.61 million, a decrease of 18% from $3.17 million in the same period last year. The decline in revenue was attributed to planned maintenance at the company's Peru facility and the timing of a major customer order expected in the second quarter. The cost of goods sold also decreased to $2.21 million from $2.64 million, resulting in a gross profit of $400,660, or 15.4% of net revenue, compared to $529,856, or 16.7%, in the prior year. The company incurred a net loss of $1.79 million, significantly higher than the $918,382 loss reported in the first quarter of 2025.
Operating expenses surged to $2.02 million, up from $1.18 million in the previous year, primarily due to increased general and administrative costs, which included $482,813 in idle capacity expenses as the facility operated below normal utilization levels. Salaries and wages also rose significantly, reflecting a higher headcount and stock-based compensation. The company’s total liabilities increased to $11.24 million from $8.89 million at the end of 2025, while stockholders' equity rose to $5.93 million, up from $5.57 million.
BranchOut has been transitioning from third-party manufacturing to in-house production at its Peru facility, which began operations in December 2024. The company is focused on expanding its product offerings, including high-protein dehydrated cheese products, and aims to enhance production capacity and efficiency. As of March 31, 2026, the company reported an inventory increase of 69% to $4.03 million, reflecting preparations for anticipated customer orders.
The company continues to face challenges related to its liquidity, with negative working capital of $1.11 million as of March 31, 2026, compared to $584,240 at the end of 2025. Management is actively pursuing new customers and expanding its product mix to increase revenues while seeking additional capital to fund operations. The company has indicated that existing cash balances and cash generated from operations may not be sufficient to meet its operating requirements for the next twelve months, raising substantial doubt about its ability to continue as a going concern.
Looking ahead, BranchOut is focused on scaling its manufacturing operations and improving its financial performance. The company plans to continue investing in product development and operational efficiencies while managing costs effectively. However, the outlook remains uncertain, and the company acknowledges the need for additional financing to support its growth initiatives and operational needs.
About BranchOut Food Inc.
BranchOut Food Inc. develops, markets, and distributes plant-based, dehydrated fruit and vegetable snacks and powders using proprietary GentleDry™ technology. Its product lines include branded snacks like avocado chips and banana bites, private-label offerings, and industrial ingredients. Serving primarily the U.S. grocery and retail markets, BranchOut leverages exclusive dehydration technology licenses and South American supply chains to deliver nutritious, flavorful, minimally processed snacks with superior taste, texture, and color.
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