BranchOut Food Closes $400,000 Senior Secured Loan

Rhea-AI Summary

BranchOut Food Inc. (NASDAQ: BOF) secures a $400,000 Senior Secured Loan to refinance an existing $200,000 loan due in January 2024 and provide working capital for customer orders. The loan comes from an investor group, including Eagle Vision Fund LP, a current stockholder in Branchout Food. The CEO, Eric Healy, expressed that the funds will help fulfill the growing number of purchase orders and support production ramping, sales and distribution growth, and building on the company's 2023 record sales.

Insights

Financial Analyst

The strategic refinancing of debt by BranchOut Food Inc. with a new $400,000 Senior Secured Loan indicates a proactive approach to managing the company's capital structure. By refinancing the existing $200,000 loan, the company effectively extends its debt maturity, which could improve its short-term liquidity position and potentially lower interest expenses. The involvement of Eagle Vision Fund LP, a current stockholder, in the loan suggests a vote of confidence in the company's prospects.

Furthermore, the issuance of warrants to purchase shares at an exercise price of $2.00 may dilute current shareholders' equity but also provides a potential future cash inflow if the warrants are exercised. It is essential to monitor the stock's performance relative to the exercise price to understand the potential impact on shareholder value. The discussion of a revolving line of credit is a positive signal for operational flexibility and could reduce the company's cost of capital over time.

Market Research Analyst

BranchOut Food Inc.'s focus on ramping up production and growing sales is indicative of its response to increased demand for its dehydrated fruit and vegetable-based products. The company's record sales in 2023 could reflect a growing consumer trend towards healthier snack options and sustainability, which are key drivers in the food technology sector.

As the company prepares to scale operations, its ability to fulfill larger purchase orders without the immediate need for additional funding is a strong indicator of operational efficiency and financial planning. However, investors should consider the competitive landscape and the company's market share to assess the sustainability of its growth trajectory.

Legal Expert

The involvement of a Board member's fund in the loan arrangement may raise questions regarding potential conflicts of interest. It is crucial that such transactions are conducted at arm's length and with full transparency to avoid any governance concerns. The terms of the loan, including the security interests granted and covenants required, should be scrutinized to ensure they align with industry standards and protect the interests of all stakeholders.

The issuance of warrants as part of the loan agreement is a common practice, but it requires careful examination of the terms to ensure they are fair and equitable. The exercise price, in particular, should be benchmarked against the current market price to evaluate its attractiveness to investors and its potential impact on the company's capital structure.

Refinances existing $200,000 loan due in January 2024 and provides working capital for customer orders

BEND, Ore., Jan. 11, 2024 (GLOBE NEWSWIRE) -- BranchOut Food Inc. (NASDAQ: BOF), a food technology company and maker of dehydrated fruit and vegetable-based products, today announced that the Company has closed on a $400,000 Senior Secured Loan from an investor group that includes Eagle Vision Fund LP. Eagle Vision Fund LP is a current stockholder in Branchout Food and its Managing Member is a member of the Branchout Foods Board of Directors.

Eric Healy, CEO of BranchOut Food, commented, “These funds refinance an existing $200,000 loan and will help fulfill the growing number of purchase orders we’ve received. We’re also in discussions for a revolving line of credit, which together with our cash balances and other current assets, would diminish the need for additional funding to finance customer orders at this time. As we begin the new year, we will continue to focus on ramping production, growing sales and distribution, and building on our 2023 record sales.”

In connection with closing the Senior Secured Loan, the lenders were issued warrants to purchase an aggregate of 100,000 shares of common stock at an exercise price of $2.00 per share.

About BranchOut Food Inc.

BranchOut is an international food-tech company delivering truly great natural snacks and real superfood ingredients enabled by their licensed dehydration technology. BranchOut Food is a leading provider of high-quality dehydrated fruit and vegetable-based products and its commitment to quality and innovation sets it apart as a trusted brand and private label supplier. For more information about BranchOut Food Inc. and its products, please visit www.branchoutfood.com.

Safe Harbor Statement

Certain information set forth in this press release contains “forward-looking information”, including “future-oriented financial information” and “financial outlook”, under applicable securities laws (collectively referred to herein as forward-looking statements). Except for statements of historical fact, the information contained herein constitutes forward-looking statements and includes, but is not limited to, the (i) projected financial performance of the Company; (ii) the expected development of the Company’s business, projects, and joint ventures; (iii) execution of the Company’s vision and growth strategy, including with respect to future M&A activity and global growth; (iv) sources and availability of third-party financing for the Company’s projects; (v) completion of the Company’s projects that are currently underway, in development or otherwise under consideration; (vi) renewal of the Company’s current customer, supplier and other material agreements; and (vii) future liquidity, working capital, and capital requirements. Forward-looking statements are provided to allow potential investors the opportunity to understand management’s beliefs and opinions in respect of the future so that they may use such beliefs and opinions as one factor in evaluating an investment. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or result expressed or implied by such forward-looking statements.

Although forward-looking statements contained in this press release are based upon what management of the Company believes are reasonable assumptions, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.

Contacts:

Investor Relations:

Stephanie Prince
PCG Advisory
sprince@pcgadvisory.com
(646) 863-6341

Media:

BranchOut Food Inc.
info@branchoutfood.com

FAQ

What is the recent announcement from BranchOut Food Inc. (NASDAQ: BOF)?

BranchOut Food Inc. (NASDAQ: BOF) announced that the Company has closed on a $400,000 Senior Secured Loan to refinance an existing $200,000 loan due in January 2024 and provide working capital for customer orders.

Who provided the $400,000 Senior Secured Loan to BranchOut Food Inc. (NASDAQ: BOF)?

The $400,000 Senior Secured Loan was provided by an investor group that includes Eagle Vision Fund LP, a current stockholder in Branchout Food.

What are the plans for the funds secured by BranchOut Food Inc. (NASDAQ: BOF)?

The funds will help fulfill the growing number of purchase orders, support production ramping, sales and distribution growth, and building on the company's 2023 record sales.

What were the terms of the Senior Secured Loan secured by BranchOut Food Inc. (NASDAQ: BOF)?

In connection with closing the Senior Secured Loan, the lenders were issued warrants to purchase an aggregate of 100,000 shares of common stock at an exercise price of $2.00 per share.