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Segment Reporting
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Segment Reporting

Note 19 – Segment Reporting

 

The Company is engaged in the development, marketing, sale, and distribution of plant-based, dehydrated fruit and vegetable snacks and powders. The Company’s products are currently manufactured at its new production facility that commenced production in Pisco Peru in December 2024, and is supported by contract manufacturers in Peru, as necessary. The Company’s customers are located throughout the United States. The Company’s sales operations, which represent 100% of the Company’s consolidated sales, are one of its two reportable segments. The sales operations’ segment revenues are predominately earned as consumer products are sold to big box retail customers throughout the United States and via the Company’s online platform. The Company aggregates its operating divisions into two reportable segments due to the operating divisions having similar economic characteristics with similar long-term financial performance, but different geographic locations. The Company’s sales occur entirely from, and within, the United States, while all of the Company’s production processes are conducted in Latin America, which represent its other operating segment. In addition, the Company’s operating divisions offer customers the same products, operate in similar regulatory environments, purchase the majority of the merchandise for retail sale from similar (and in many cases identical) vendors on a coordinated basis from a centralized location, serve of the same customers, and are allocated capital from a centralized location. Operating divisions are organized primarily on a geographical basis so the operating division management team can be responsive to local needs of the operating division and can execute company strategic plans and initiatives throughout the locations in their operating division. This geographical separation is the primary differentiation between these operating divisions. The geographical basis of organization reflects how the business is managed and how the Company’s Chief Executive Officer, who acts as the Company’s chief operating decision maker (“CODM”), assesses performance internally.

 

The accounting policies of the retail operations segment are the same as those described in the summary of significant accounting policies in Note 1 to the Condensed Consolidated Financial Statements. The Company’s CODM assesses performance and allocates resources for the retail operations segment using segment earnings before net interest expense, income tax expense and depreciation and amortization (“EBITDA”). The Company defines EBITDA as earnings before interest taxes and depreciation. The Company’s CODM also uses segment EBITDA to measure the operational effectiveness of the Company’s financial model, compare the performance of core operating results between periods, against budget and against competitors and evaluate whether to invest capital in the retail operations segment or in other parts of the Company, such as for share repurchases, debt repayments or capital expenditures. The Company’s CODM is not provided asset information by reportable segment as asset information is provided to the CODM on a consolidated basis. The Company’s capital expenditures are predominately used in the Company’s production operations, rather than its retail operations.

 

The following table presents the Company’s retail operations segment revenue, measure of segment profit or loss, significant segment expenses and reconciliation of the U.S. and Latin America operations segments’ EBITDA to consolidated net earnings before income tax expense for the six months ended June 30, 2025, and 2024:

  

   2025   2024 
   For the Six Months Ended 
   June 30, 
   2025   2024 
         
U.S. operations segment sales  $6,493,260   $2,830,002 
           
U.S. operations segment cost of goods sold   -    2,397,655 
U.S. operations segment expenses:          
General and administrative   1,176,857    458,996 
Rent   23,662    - 
Salaries and wages   503,591    521,318 
Professional fees   443,210    364,090 
Total U.S. operating expenses  $2,147,320   $1,344,404 
U.S. operations segment EBITDA  $4,345,940   $(912,057)
           
Latin American operations segment cost of goods sold  $5,028,726   $- 
Latin American operations segment expenses:          
General and administrative   601,025    21,356 
Rent   77,489    47,913 
Salaries and wages   165,718    32,430 
Professional fees   114,886    40,868 
Total Latin American operating expenses   959,118    142,567 
Latin American operations segment EBITDA  $(5,987,844)  $(142,567)
Consolidated EBITDA  $(1,641,904)  $(1,054,624)
           
Reconciliation of net earnings before income tax expense:          
Consolidated EBITDA  $(1,641,904)  $(1,054,624)
Depreciation   (305,560)   (112,671)
Interest income   11,736    5,695 
Interest expense   (504,713)   (147,701)
Stock compensation expense   (81,097)   (684,220)
Consolidated net loss before income tax expense  $(2,521,538)  $(1,993,521)

 

 

BRANCHOUT FOOD INC.

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(Unaudited)