BranchOut Food Inc. (NASDAQ: BOF) provided a business update on Wednesday, highlighting record production levels and major customer deliveries that position the company for what it expects to be a record revenue second quarter. The food technology company, which uses its proprietary GentleDry™ process to produce natural fruit and vegetable snacks, achieved record production of approximately 46,000 kilograms per month in March and into the second quarter, the highest levels in company history.
While first-quarter revenue fell below the record Q4 2025 results, the company attributed the decline to shipment timing, noting that Q1 served as a production and inventory build quarter ahead of large committed deliveries scheduled for Q2 2026. The inventory build supported the company's largest order to date from the nation's second largest warehouse club retailer, which launched Crunchy Fruit Chips nationwide in over 600 locations. Early sales data indicates the product is performing exceptionally well, potentially exceeding the retailer's thresholds for everyday placement, which BranchOut estimates could represent approximately $15 million in annual recurring revenue.
BranchOut is also nearing finalization of a large-scale tolling partnership with a major household brand. Under the proposed structure, the customer would supply raw materials while BranchOut provides drying and manufacturing services via its newly installed fourth large-scale REV line, potentially operating on a nearly continuous basis. Management estimates the program could generate $6-7 million in annual revenue once fully ramped in the second half of 2026, with higher gross margins due to minimal raw material costs.
Expansion continues with the nation's largest warehouse club retailer through additional regional programs, including a new Mango Chips launch in the Bay Area and potential multipack products for the back-to-school season. Additionally, a major innovation meeting with the world's largest retailer showcased over 35 product concepts across multiple categories, generating strong buyer interest, though launches are now expected in early 2027 rather than late 2026.
The ingredient and bulk supply channel is emerging as a major growth driver, with revenue expected to reach $6-7 million in 2026, up from nearly $2 million in 2025. This growth is supported by commitments from existing customer MicroDried and multiple new industrial ingredient opportunities. BranchOut is also entering the European private label market through a partnership with a German-based snack company, with an initial commercial order of approximately $500,000 expected this month.
To support its accelerating growth, Kaufman Capital has provided approximately $2.25 million in new capital through non-dilutive working capital loans and warrant exercises. In April, Kaufman provided a $750,000 working capital loan, and in May exercised warrants for 500,000 shares at $1.50 per share, injecting $750,000. An additional $750,000 loan is being finalized. The company also amended terms of Kaufman's convertible note, extending maturity to December 31, 2027, reducing the interest rate from 12% to 8%, and implementing a 9.99% beneficial ownership limitation on conversions.
For more information, visit the company's newsroom at https://tinyurl.com/bofnewsroom.
