BOF BranchOut Food Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 10, 2024

 

BRANCHOUT FOOD INC.

(Exact name of registrant as specified in its charter)

 

Nevada		001-41723		87-3980472
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		Identification Number)

 

205 SE Davis Avenue, Bend Oregon		97702
(Address of principal executive offices)		(Zip Code)

 

(844) 263-6637

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.001 per share		BOF		Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01.

Entry into a Material Definitive Agreement.

 

On May 10, 2024, BranchOut Food Inc. (the “Company”) entered into a Lease Agreement (the “Lease Agreement”) providing for the 10-year lease by the Company of a 50,000 square-foot food processing plant located in Peru (the “Peru Facility”). Pursuant to the Lease Agreement, the Company is required 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 Agreement also provides the Company with a 10-year lease renewal option, and a buy-out option under which the Company may purchase the Peru Facility for $1,865,456.

 

In connection with the Company’s lease of the Peru Facility, on May 10, 2024 the Company entered into a Assignment Of Credit and Substitution of Mortgagee (the “Assignment Agreement”), under which the Company purchased 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 the assignor, for a purchase price of $1,267,000, of which $275,000 was paid by the Company to the assignor on May 10, 2024. The remaining $992,000 of the purchase price under the Assignment Agreement is due and payable to the assignor on August 10, 2024.

 

The information set forth above is qualified in its entirety by reference to the actual terms of the Lease Agreement and Assignment Agreement, English translations of which have been filed as Exhibits 10.1 and 10.2 hereto, respectively, and which are incorporated herein by reference.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d)

Exhibits.

 

Exhibit 10.1		Lease Agreement, dated as of May 10, 2024, between BranchOut Food Inc. and landlord of the Peru Facility.*†
Exhibit 10.2		Assignment Of Credit and Substitution of Mortgagee, dated as of May 10, 2024, among BranchOut Food Inc., assignor, and landlord of the Peru Facility*†
Exhibit 104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

* This exhibit is an English translation of a foreign language document. BranchOut Food Inc. agrees to furnish supplementally to the SEC, upon request, a copy of the foreign language document.

† Portions of this exhibit have been redacted.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	BranchOut Food Inc.
Date: May 16, 2024	By:	/s/ Eric Healy
		Eric Healy, Chief Executive Officer

 

 

 

Exhibit 10.1

 

THE IDENTITY OF THE COUNTERPARTY TO THIS AGREEMENT AND CERTAIN OTHER INFORMATION HAS BEEN REDACTED BECAUSE IT IS NOT MATERIAL, IS TREATED AS CONFIDENTIAL BY THE REGISTRANT, AND MAY CAUSE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

This Exhibit Is An English Translation Of A Foreign Language Document. The Company Hereby Agrees To Supplementally Furnish To The Securities And Exchange Commision, Upon Request, A Copy Of The Foreign Language Document.

 

Mr. Notary,

 

Please add to your Records of Public Deeds a Lease Agreement (hereinafter, the “Contract”), which includes:

 

On the one hand:

 

●	[***********] (hereinafter, “THE LANDLORD”).

 

From the other side:

 

●

BRANCHOUT FOOD INC., a company incorporated under the laws of the State of Nevada, United States of America, identified with Tax Identification No. 87-3980472, with address at 205 SE Davis Ave, Suite C Bend Oregon 97702, United States of America, duly represented by Mr. Eric Healy, identified with United States Passport No. 565054630, according to powers granted by unanimous written agreement of the Board of Directors of the Company, dated May 7, 2024, notarized by a Notary Public of the State of Washington, United States of America, BJ Pritchett, (hereinafter referred to as “THE RENTER”).

 

Hereinafter, THE LESSEE and THE LESSOR shall be referred to jointly as the “PARTIES”; and, individually and indistinctly, as the “PARTY”.

 

This Agreement is concluded on the terms and conditions contained in the following clauses:

 

CLAUSE ONE:

BACKGROUND

 

1.1.	THE LESSOR is the sole and exclusive owner of the property located at [***********] (hereinafter, the “PROPERTY”).
1.2.	A food processing and freezing plant has been built on the PROPERTY with different facilities, assets and machinery linked to this purpose, (hereinafter, the “PLANT”), which is not currently in operation.

 

 

1.3.	THE LESSEE is a company dedicated to the production, packaging and export of dehydrated products, which is interested in leasing the PROPERTY with the preferential option of acquiring said PROPERTY, in order to use it for manufacturing activities within the Peruvian territory, either directly or through a related company.
1.4.	THE LESSEE is in the process of establishing a branch in Peru (hereinafter, the “Branch”), through which it will carry out the operations of its business within the Peruvian territory. It is expressly stated that the Branch will act as lessee under the terms of this Agreement once it is duly constituted. In this regard, the PARTIES agree that THE LESSOR gives its prior consent for THE LESSEE to make an assignment of contractual position in favor of the Branch, in accordance with the provisions of Clause Nine of this Agreement.
1.5.	On the other hand, THE LESSOR, for its part, is interested in leasing the PROPERTY, given that, to date, the PLANT is not operating, and in granting THE LESSEE a purchase option on the PROPERTY.

 

CLAUSE TWO:

OBJECT

 

2.1.	By means of this Agreement, THE LESSOR shall:

 

	a)	Leases to THE LESSEE the following assets (hereinafter referred to as the “LEASED PROPERTY”): (i) the PROPERTY; and, (ii) all assets related to the PLANT located in the PROPERTY, which are detailed in Annex 1 of this Agreement (hereinafter, the “Assets”); and
	b)	Grants THE TENANT an option to purchase the PROPERTY, in accordance with the terms and conditions established in Clause Ten of this Agreement.

 

2.2.	For its part, THE TENANT undertakes to pay the rent on time under the terms established in Clause Four, and to comply with the other obligations that correspond to it under this Agreement.

 

CLAUSE THREE:

LEASE TERM

 

3.1.	The lease term is ten (10) years (120 months), which will be counted from May 9, 2024 and will end on May 9, 2034. The deadline will be binding on both parties.
3.2.	Notwithstanding the provisions of the preceding paragraph, THE LESSEE may terminate this Agreement without giving cause by sending a notarized communication to THE LESSOR at least three (3) months in advance, informing them of their decision to terminate the Agreement. It is expressly stated that, in this case, THE TENANT must pay the sum equivalent to the last twelve (12) months of rent as an early termination penalty.

 

 

3.3.	THE LESSEE shall have the right of preference to renew this Agreement for an additional term of ten (10) years, which shall be binding on both parties, subject to the following conditions:

 

	3.3.1.	THE LESSEE shall exercise his/her right of first refusal by notifying THE LESSOR, within the 8th year of each 10-year period, his/her intention to renew the lease.
	3.3.2.	The PARTIES will have a period of six (6) months from the exercise of THE LESSEE’s right of first refusal to agree on the renewal of the lease agreement and the new conditions to be applied to it.
	3.3.3.	The renewal of the lease contract will be formalized with the signing by the PARTIES of a public deed containing the addendum with the terms and conditions applicable to the renewal of the Contract. This public deed will be registered in the electronic entry of the PROPERTY.
	3.3.4.	The LESSEE’s right of first refusal shall be extinguished if it is not exercised within the eighth (8) year of each ten (10) year term of the lease, or if, within six (6) months following its exercise, the PARTIES do not sign the public deed described in section 3.4.3. above.

 

CLAUSE FOUR:

INCOME

 

4.1.	The monthly rent that THE TENANT must pay to THE LANDLORD will be as indicated below, as well as the opportunity and method of payment (hereinafter, the “RENT”):

 

	4.1.1.	From the first month (month 1) to the twenty-fourth month (month 24): USD 8,000.00 (Eight Thousand and 00/100 Dollars) per month, not including IGV.
	4.1.2.	From the twenty-fifth month (month 25) to the thirty-sixth (month 36) month: USD 20,000.00 (Twenty Thousand and 00/100 Dollars) per month, not including VAT.
	4.1.3.	From the thirty-seventh month (month 37) to the forty-eighth month (month 48): USD 22,000.00 (Twenty-two Thousand and 00/100 Dollars) per month, excluding VAT.
	4.1.4.	From the forty-ninth month (month 49) to the sixtieth month (month 60): USD 24,000.00 (Twenty-four Thousand and 00/100 Dollars) per month, not including VAT.
	4.1.5.	From the sixty-first month (month 60) onwards, until the term of the Contract: USD 25,000.00 (Twenty-five Thousand and 00/100 Dollars) per month, not including VAT.

 

The agreed rent will be paid by THE TENANT by transfer to the bank account of THE LANDLORD indicated below:

 

	●	Dollar Account Number:
	●	Swift:
	●	Bank Name: Banco Internacional del Perú S.A.A.- Interbank

 

 

	●	Address: Av. Carlos Villarán N° 140, Urb. Santa Catalina, La Victoria, Lima, Peru
	●	Interbank Account Number (20-digit CCI) if the international transfer includes a local tranche.
	●	CCI:

 

4.2.	Payment must be made by THE RENTER during the first ten (10) business days of each month.
4.3.	It is expressly stated that the PARTIES have agreed on the schedule of payment of the RENT in the manner indicated in Numeral 4.1. above, by virtue of the fact that during the first two (2) years (twenty-four months) of the validity of this Agreement, THE LESSEE will be in an investment period. After that, from the twenty-fifth month onwards, the PARTIES agree that, as indicated in the aforementioned schedule, the price will be paid at market value. In this regard, the PARTIES state that there is a fair equivalence between the payment of the RENT and the LEASED PROPERTY.

 

CLAUSE FIVE:

STATEMENTS BY THE PARTIES

 

5.1.	THE LESSEE represents and warrants in favor of THE LESSOR the following:

 

	a)	It is a validly incorporated company existing under the laws of the State of Nevada, United States of America.
	b)	Your representative has sufficient powers of attorney to enter into this Agreement on your behalf.
	c)	There is no legal or contractual restriction on entering into this Agreement and performing your obligations under this Agreement.

 

5.2.	For its part, THE LESSOR declares and guarantees in favor of THE LESSEE the following:

 

	a)	It is a validly incorporated company existing under the laws of the Republic of Peru.
	b)	Your representatives have sufficient powers of attorney to enter into this Agreement on your behalf.
	c)	You are not subject to any legal or contractual restrictions on entering into this Agreement and performing your obligations under this Agreement. If LESSOR is required to obtain any third-party waiver, it is the LESSOR’s sole responsibility to obtain such waiver prior to entering into this Agreement
	d)	The LEASED GOODS have sufficient authorizations, permits and licenses for the LESSEE to use the PLANT to carry out the activities indicated in subsection a) of numeral 6.1 of the Sixth Clause of this Agreement, without problems or interruptions.

 

 

At the same time, the LESSOR undertakes to carry out the necessary actions and to sign the pertinent documents to achieve the transfer of licenses, permits and/or authorizations, which are required, if applicable.

 

e)

It has not entered into or created encumbrances and/or encumbrances on the LEASED ASSETS, with the exception of:

 

	(i)	Mortgage on the PROPERTY in favor of [***********] registered in entry [***********];
	(ii)	Mortgage on the PROPERTY in favor of [***********], registered in entry [***********].

 

CLAUSE SIX:

OBLIGATIONS OF THE PARTIES

 

6.1.	THE LESSEE undertakes to THE LESSOR to comply with the following:

 

	a)	To use the LEASED GOODS solely and exclusively for the following uses: manufacture of dehydrated food.
	b)	Pay the monthly rent punctually, in the form and manner agreed in Clause Four of this Agreement.
	c)	Deliver the LEASED GOODS in favor of THE LESSOR once the term of this CONTRACT has expired.
	d)	Make timely payment for electricity and drinking water supply services.

 

6.2.	For its part, THE LESSOR undertakes to comply with the following:

 

	a)	Deliver possession of the LEASED GOODS in favor of THE LESSOR on the date of signing this Agreement, which will be accredited by the signing of a delivery deed by both PARTIES.
	b)	To allow the peaceful, free, total and uninterrupted use, enjoyment and possession of the GOODS LEASED to THE LESSEE, during the entire term of this Agreement, seeking at all times: (i) the normal and continuous development of the activities of THE LESSEE; (ii) the defense of the interests of THE LESSEE against third parties for possession, for conflicts between owners or neighbors of the LEASED GOODS and, (iii) in general, for any conflict or controversy with persons who carry out acts that disturb or may disturb the possession, use and usufruct of the LEASED GOODS.

 

In the same sense, THE LESSOR will allow and guarantee throughout the term of this Agreement, the full and total exercise of the right of use over the LEASED GOODS that corresponds to THE LESSEE, and must communicate to the latter within the next business day of having become aware of any fact that affects or may affect the rights of THE LESSOR or THE LESSEE on LEASED GOODS.

 

 

If failure to comply with the obligations described in the preceding paragraph results in the impossibility of allocating all or part of the LEASED GOODS to the uses established in this Agreement, THE LESSEE shall not be obliged to pay the monthly rent during the period of time in which he/she is unable to allocate all or part of the LEASED GOODS to the uses indicated above.

 

	c)	THE LESSOR shall not enter into contracts that may constitute encumbrances or encumbrances and/or rights in rem over the LEASED GOODS, or over the goods comprising them in whole or in part, without the express written consent of THE LESSEE. If applicable, faithfully and timely comply with all legal and/or contractual obligations arising from those acts and/or contracts by virtue of which charges or encumbrances and/or rights in rem are established over the LEASED GOODS, or that in any way affect or may affect the rights of THE LESSEE over the LEASED GOODS.
	d)	Pay the Property Tax and any other tax levied on the property of the LEASED PROPERTY, during the entire term of this Agreement.
	e)	THE LESSOR shall assume at its own expense all repairs due to structural defects or hidden defects affecting the LEASED GOODS, within a period not exceeding seven (7) business days from the date on which THE LESSEE has communicated in writing the need to carry out such repairs. THE LESSEE is expressly entitled, but not obliged, to carry out such repairs at the expense of THE LESSOR, who will reimburse the costs and expenses required to carry out the respective repairs. This reimbursement will be compensated from the monthly rents from the month following the date of completion of the aforementioned repairs, after written communication accompanying the settlement and supporting documentation of the expenses incurred.
	f)	THE LESSOR shall hold harmless and compensate THE LESSEE for any damage and/or harm that the LESSEE may suffer as a result of (i) the invalidity or ineffectiveness, partial or total, of this Agreement for reasons attributable to THE LESSOR; (iii) any third-party claim that in any way affects or may affect THE LESSEE’s right to the LEASED GOODS; and/or (iv) the breach of any obligation of THE LESSOR arising from this Agreement.
	g)	THE LESSOR shall notify THE LESSEE of its intention to transfer ownership of any of the LEASED GOODS. THE LESSOR agrees to cause the purchaser of the LEASED GOODS to abide by all the terms and conditions of this Agreement.
	h)	Manage all the acts of legal physical sanitation required by the LEASED GOODS, so that THE LESSEE can use them for the purposes established in this Agreement.
	i)	Deliver to THE LESSEE the receipts and documents that justify the non-payment of the public and private services that the LEASED GOODS have, within fifteen (15) calendar days following the date of execution of this Agreement.

 

 

j)

To sign all public and/or private documents necessary for the formalization and registration of this Agreement in the Public Registries, in accordance with the provisions of Clause Thirteen of this Agreement.

 

CLAUSE SEVEN:

RESOLUTION

 

7.1.	This Agreement may be terminated by THE LESSOR, in the event that THE LESSEE fails to comply with its obligations to pay the rent established in the Fourth Clause of this Agreement, for two (2) months and 15 consecutive calendar days, in accordance with the provisions of Article 1429 of the Peruvian Civil Code.
7.2.	For its part, THE LESSEE may terminate this Agreement in accordance with the provisions of Article 1430° of the Peruvian Civil Code, in the event that THE LESSOR fails to comply with any of the obligations established in numeral 6.2 of the Sixth Clause above. To do so, it will be sufficient for THE LESSEE to inform THE LESSOR via notary that the contract has been terminated by the express termination clause indicated in this paragraph.
7.3.	Likewise, this Agreement will be terminated if THE LESSEE exercises its right of option to purchase and acquires ownership of the PROPERTY.

 

CLAUSE EIGHT:

REFURBISHMENT, IMPROVEMENTS TO THE PROPERTY

 

8.1.	THE LESSEE shall be authorized to carry out in THE PROPERTY and in the LEASED PROPERTY the works of conditioning, implementation, habilitation, improvements and equipment that are indispensable and necessary for the proper functioning and operation of the activities to which they will be intended.

 

For this purpose, it is expressly stated that, by signing this Agreement, THE LESSOR expressly authorizes THE LESSEE in advance to make this type of improvements, as long as they do not exceed USD 1,000,000.00 (One Million and 00/100 United States Dollars). For any improvement in excess of this amount, prior approval from THE LESSOR will always be required. Any improvement made, with or without the approval of THE LESSOR, will be for the benefit of the leased property, and will not be subject to reimbursement by THE LESSOR.

 

The Parties agree that the improvements made during the term of the lease will not increase the price to be paid by THE LESSEE in the event that the tenant exercises the option to purchase THE PROPERTY, in accordance with the terms agreed in this Agreement.

 

8.2.	At the termination of the Contract, all improvements that cannot be separated from the PROPERTY without causing detriment to the structures, installations and equipment of the same will remain for the benefit of THE LESSOR, and the rest of the improvements may be removed by THE LESSEE.
8.3.	For those works of conditioning, implementation, habilitation, improvements and equipment that involve alterations in the structures of the constructions of the LEASED ASSETS, prior and express authorization must be obtained from THE LESSOR, which must be granted within a maximum period of five (5) business days from the time it was requested by THE LESSEE and will not be unjustifiably denied.

 

 

 

CLAUSE NINE:

ASSIGNMENTS

 

Neither of the PARTIES may assign its rights, obligations and/or contractual position under this Agreement, without the prior written authorization of the other PARTY, with the exception of THE LESSEE in the case indicated in numeral 1.4 of the First Clause of this Agreement, according to which it may assign its contractual position in this Agreement in favor of the Branch, with the prior authorization of THE LESSOR.

 

CLAUSE TEN:

PURCHASE OPTION

 

In accordance with Article 1419 of the Civil Code, during the term of the Contract, THE LESSOR grants an option to purchase the PROPERTY, and an option to purchase the Assets indicated in Annex 1, which is an integral part of this Agreement, which may be exercised by THE LESSEE or by the person designated by the latter, by virtue of the provisions of Article 1422 of the Civil Code, independently, under the following terms and conditions:

 

10.1	The final contract will be perfected and THE LESSOR will transfer ownership of the PROPERTY and/or the Assets as appropriate to THE LESSEE -or whoever he/she designates- on the date of exercise of the right of option to purchase, that is, when THE LESSEE notifies THE LESSOR, through a notary, of his/her willingness to exercise his/her right of option to purchase the PROPERTY and/or the Assets, and enter into the definitive contract to acquire ownership of the REAL ESTATE and/or the Assets.
10.2	Within fifteen (15) days following the signing of the definitive contract for the sale of the PROPERTY and/or the Assets, the Parties will sign the public deed of exercise of the purchase option and execution of the definitive contract and THE LESSEE will initiate the procedure for the registration of the transfer of ownership of the PROPERTY in its favor.
10.3	The sale price of the PROPERTY is USD 1,865,456.17 (One Million Eight Hundred Sixty-Five Thousand Four Hundred Fifty-Six and 17/100 United States Dollars), not including the IGV, if applicable. The sale price does not include the Assets linked to the PLANT. On the other hand, the sale price for the Assets will be the one resulting from the appraisal that will be carried out on them, once THE LESSEE exercises its purchase option. To this end, the Parties agree to appoint three (3) reputable appraisers in the market to present three different appraisal alternatives. In the event that the Parties do not agree on the appointment of appraisers, the alternative proposed by THE LESSEE shall prevail .

 

The Parties shall choose, from among the three appraisals carried out by the designated appraisers, the one that presents an average price among the three to determine the sale price of the Assets.

 

 

In any case, the sale price of the PROPERTY will be paid with the signing of the public deed that generates the definitive contract for the transfer of ownership of the PROPERTY and/or the Assets, as indicated in numeral 10.2 of this clause.

 

10.4.	The obligation to pay the sale price by THE TENANT is subject to the condition that the PROPERTY is free of any limitation, encumbrance or encumbrance that may affect it, with the exception of the mortgage indicated in subsection i) of section e) of numeral 5.2 of the fifth clause of this Agreement, and that THE LANDLORD has complied with the payment of the property tax that falls on the PROPERTY for the statute of limitations.
10.5.	Consequently THE TENANT shall not be obliged to pay the sale price of the PROPERTYmeanwhile THE LANDLORD has not accredited THE TENANT compliance with the payment conditions set out in section 10.4 above.
10.6.	In accordance with Article 1120 of the Civil Code, THE LANDLORD waiver of the legal mortgage established by Article 1118 of the Civil Code to guarantee the payment of the balance of the sale price of the PROPERTY pending on the date of signing the definitive contract.
10.7.	Once the payment of the sale price of the PROPERTYthe PARTS They will sign the public deed of cancellation of the price.

 

CLAUSE ELEVEN:

NOTIFICATIONS

 

11.1	All communications and notifications that may be made under the terms of this CONTRACT must be made in writing to the addresses of the PARTIES indicated in the introduction to this Agreement, or to the following e-mails, always through the contact persons indicated below:

 

a)

THE LANDLORD:

 

[***********]

 

b)

THE TENANT:

 

Representative: Eric Healy

Email: eric@branchoutfood.com

Address: Elias Aguirre 849, Apt. 01, Miraflores, Lima- Peru

 

11.2	The modification of the addresses, e-mails and contact persons indicated in the previous paragraph must be communicated five (5) business days in advance of the date on which said modification becomes effective in order to take effect against the other PARTY.

 

 

TWELFTH CLAUSE:

EXPENSE

 

The expenses and taxes levied on the execution, formalization and registration of this Agreement will be assumed in equal parts by the PARTIES.

 

THIRTEENTH CLAUSE:

GOVERNING LAW AND DISPUTE RESOLUTION

 

12.1.	The PARTIES agree that this Agreement is governed by the applicable laws of the Republic of Peru.
12.2.	Any dispute or controversy arising between the PARTIES in connection with this Agreement, including those relating to the interpretation, performance, validity or effectiveness of the Agreement, shall seek to be resolved by the PARTIES in good faith by direct dealing.
12.3.	If the PARTIES do not reach an agreement within fifteen (15) days from the time either of them notified the other Party in writing of the existence of the discrepancy or controversy, at the request of either of them, the dispute shall be resolved by arbitration of law, which shall be subject to the following rules:

 

	(i)	The arbitration shall be conducted by an arbitral tribunal composed of three (3) members. The arbitration shall be conducted in accordance with the Arbitration Rules of the Arbitration Center of the Lima Chamber of Commerce (the “Center”).
	(ii)	Each of the PARTIES shall appoint an arbitrator. The third arbitrator shall be appointed by mutual agreement of the arbitrators appointed by the PARTIES. The third arbitrator shall preside over the arbitral tribunal.

 

In the event that either of the PARTIES does not appoint its respective arbitrator within a period of ten (10) days, counted from the date on which they are requested to do so by the other PARTY, the arbitrator will be appointed by the Center.

 

Likewise, in the event that the two appointed arbitrators do not appoint the third arbitrator within a period of ten (10) days from the date of the appointment of the last of them, the third arbitrator will be appointed by the Center.

 

	(iii)	The arbitral award rendered by the arbitral tribunal shall be final and final. The arbitral tribunal may also be responsible for determining the precise nature of the dispute.
	(iv)	The place of arbitration shall be in the city of Lima, Republic of Peru and the language to be used in the arbitration proceedings shall be Spanish.
	(v)	The expenses and costs of the arbitration shall be borne by the losing PARTY only when there is a final award in the proceedings.
	(vi)	For any intervention of the ordinary judges and courts within the arbitration mechanisms, the PARTIES expressly submit to the judges and courts of the headquarters of the judicial district of Cercado de Lima, renouncing the jurisdiction of their domiciles.

 

 

12.4.

The provisions of this clause shall survive the termination or termination of this Agreement

 

CLAUSE FOURTEEN:

FORMALIZATION AND REGISTRATION

 

13.1.	The PARTIES undertake to sign the public deed that originates this Agreement within a maximum period of two (2) business days from the signing of the same.
13.2.	Notwithstanding the provisions of the preceding paragraph, THE LESSOR shall sign all the documents, public and/or private, necessary to obtain the registration of this Agreement in the Peruvian Public Registries, within the business day following the request of THE LESSEE.

 

Add the introduction and conclusion of the law, insert the pertinent parts, and pass parts to the corresponding Real Property Registry for registration.

 

/s/ [***********]		/S/ [***********]
/s/ Eric Healy
BRANCHOUT FOOD INC.
Eric Healy
Pasaporte de los Estados Unidos de América No. 565054630

 

 

 

Exhibit 10.2

 

THE IDENTITIES OF THE COUNTERPARTIES TO THIS AGREEMENT AND CERTAIN OTHER IDENTIFYING INFORMATION HAVE BEEN REDACTED BECAUSE SUCH INFORMATION IS NOT MATERIAL, IS TREATED AS CONFIDENTIAL BY THE REGISTRANT, AND MAY CAUSE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

 

This Exhibit Is An English Translation Of A Foreign Language Document. The Company Hereby Agrees To Supplementally Furnish To The Securities And Exchange Commision, Upon Request, A Copy Of The Foreign Language Document.

 

Mr. Notary,

 

Please include in your Public Deed registry, a document stating an ASSIGNMENT OF CREDIT AND SUBSTITUTION OF MORTGAGEE entered into:

 

On the one hand:

 

	●	[***********] “Assignor”; and on the other hand,
	●	BRANCHOUT FOOD INC., a validly existing company incorporated under the laws of the State of Nevada, United States of America, with tax identification number 87-3980472, with registered office at 205 SE Davis Ave, Suite C Bend Oregon 97702, United States of America, duly represented by Eric Healy, identified with United States Passport No. 565054630, according to powers granted by unanimous written agreement of the Board of Directors of the Company, dated May 7, 2024, legalized by a Notary Public of the State of Washington, United States of America, BJ Pritchett, (hereinafter, “BOF” or the “Assignee”, indistinctly).

 

With the intervention of:

 

●

[***********]

 

Hereinafter, BOF and [***********] Assignor shall be referred to individually and indistinctly as the “Party”, and jointly as the “Parties”. This agreement for the assignment of credit and substitution of real estate security (hereinafter, the “Agreement”) is entered into under the following terms and conditions:

 

FIRST.- BACKGROUND

 

1.1.

By means of a Joint and Several Bond Agreement signed in Public Deed No. [***********] before the Notary Public of Ica, Dr. Cesar Sánchez Baiocchi, entered into between Banco de Crédito del Perú – BCP (hereinafter, the “BANK”) and [***********] Assignor jointly and severally with others, Assignor was constituted as joint guarantor of [***********] for all direct and indirect credits that it owed or could owe in the future to the Bank, plus interest and expenses.

 

 

1.2.	By means of Public Deed No. [***********], granted before the Notary Public of Ica, Dr. Ana Ethel del Rosario Jara Velasquez, the unification of the mortgages previously constituted1 on the property owned by [***********], located at [***********] (hereinafter, the “Property”), on which a plant for food production (mainly asparagus) is built and implemented, with a cold area and product packaging (hereinafter, the “Plant”), in favor of the BANK, as recorded in Entry [***********], and it was agreed in turn to increase the amount of the mortgage up to the amount of US$ 1,501,124.00 (One Million Five Hundred One Thousand One Hundred Twenty-Four Thousand and 00/100 United States Dollars) (hereinafter, the “Mortgage”), which remains in force to date.
1.3.	As of February 6, 2024, [***********] had unpaid obligations with a principal balance totaling US$ 1,800,000.00 (One Million Eight Hundred Thousand and 00/100 United States Dollars), related to six (6) post-shipment loan operations against the BANK. The obligations settled as of January 31, 2024 as a whole amounted to the sum of US$ 1,266,891.74 (One million two hundred sixty-six thousand eight hundred and ninety-one with 74/100 US dollars).
1.4.	By means of a Debt Payment Agreement on behalf of a Guarantor and Substitution of a Mortgage Creditor elevated to Public Deed No. [***********], before the Notary Public of Ica, Dr. Cesar E. Sánchez Baiocchi, signed between Assignor and the BANK, Assignor paid the full amount owed by [***********] irrevocably authorizing the charge of US$ 1.267 million (One Million Two Hundred and Sixty-Seven Thousand and 00/100 United States Dollars) (hereinafter, the “Credit”), and, therefore, replaced the BANK in all the rights that corresponded to it in its capacity as creditor, including the Mortgage.
	As a result, the assignment of the Mortgage in favour of Assignor is registered in Entry [***********] of the Electronic Entry of the Property.
1.5.	BOF is a company dedicated to the production, packaging and export of dehydrated products for export, which is interested in acquiring the Credit that Assignor maintains against [***********] and replacing Assignor in all the rights that correspond to it in its capacity as creditor, including the Mortgage. For its part, Assignor is interested in assigning the Credit and Mortgage in favor of BOF, in accordance with the terms and conditions established herein.

 

¹ (i) Mortgage constituted by means of a Public Deed dated December 1 , 2005, issued before Notary Public Dr. Cesar Sánchez Baiocchi, up to the amount of US$ 449,866.00 (four hundred and forty-nine thousand eight hundred and sixty-six with 00/100 US dollars), registered in entry [***********] of the Electronic Item of the PROPERTY; and, (ii) mortgage constituted by Public Deed dated June 25, 2014, issued before Notary Public Dr. Cesar Sanchez Baiocchi, by license of the owner Ana Jara Velásquez, up to the sum of US$ 480,187.00 (four hundred eighty thousand one hundred and forty-seven with 00/100 US dollars), registered in entry [***********] of the Electronic Item of the PROPERTY.

 

 

1.6.

At the same time, BOF is interested in leasing the Property owned by the Company, in order to be able to carry out the operations of its line of business in the Plant, either directly or through any related company. To this end, the Company and BOF will enter into a Lease Agreement (hereinafter, the “Lease Agreement”), simultaneously with the signing of this Agreement.

 

SECOND.- PURPOSE OF THE CONTRACT

 

2.1	In this act and by means of this instrument, the Assignor assigns and transfers to the Assignee, by virtue of Article 1206 of the Civil Code, its right of credit for the sum of US$ 1,267,000.00 (One Million Two Hundred and Sixty-Seven Thousand and 00/100 United States Dollars) that it maintains against the Company, as well as all the rights that as a creditor you have derived from the Credit, such as your position as a secured creditor with the Mortgage (hereinafter, the “Assignment”). The Assignment takes effect from the date of signature of this document.
2.2	The price of the Assignment is the sum of US$ 1,267,000.00 (One Million Two Hundred and Sixty-Seven Thousand and 00/100 United States Dollars), which corresponds to the total face value of the Credit, which the Assignee acknowledges to owe to the Assignor hereunder, and which will be paid in accordance with the terms indicated in the Third Clause of this Agreement and subject to compliance with the conditions established in the Fourth Clause of this Agreement. this document.
2.3	The Parties declare that the Assignment includes all privileges and security interests, particularly the Mortgage, as well as the accessories to the Credit.
2.4	The Assignment will remain in force until the payment and total extinction of the Credit.

 

THIRD.- ON THE PAYMENT OF CONSIDERATION FOR THE ASSIGNMENT

 

The Parties agree that the payment of consideration for this assignment of the Receivable in favor of the Assignee, under the terms indicated in the Second Clause above, shall be made in favor of the Assignor as indicated below:

 

3.1.	A first payment of US$ 275,000.00 (Two Hundred and Seventy-Five Thousand and 00/100 United States Dollars) will be made upon signing this Agreement.
3.2.	The balance amounting to US$ 992,000.00 (Nine Hundred and Ninety-Two Thousand and 74/100 United States Dollars) will be paid within three (3) months from the date of signing this Agreement (the “Term”) subject to verification by the Assignee of compliance with the conditions set forth in the Fourth Clause below (hereinafter, the “Foregoing Conditions”), for which the Assignor shall send a letter five (5) calendar days prior to the expiration of the Term, via notary, in which it declares that it has complied with all the Foregoing Conditions.

 

 

	The Parties agree that in the event that the Assignor has not complied with proving compliance with any of the conditions indicated in paragraph 4.1. of the Fourth Clause at the time of the expiration of the Term, the Assignor may request in writing to the Assignee to extend the Term for an additional three (3) months, so that the Assignor can comply with all the conditions indicated in said paragraph (the “Extension of the Term”).
3.3.	Payments under this clause shall be made by bank transfer to the account of the Assignor:

 

	●	Dollar Account Number:
	●	Swift:
	●	Bank Name: Scotiabank Peru SAA
	●	Address: Av. Dionisio Derteano 102, San Isidro, Lima -Peru
	●	Phone: 211-6000
	●	Interbank Account Number (20-digit CCI) if the international transfer includes a local tranche.
	●	CCI:

 

3.4.

Likewise, the assignment of the Mortgage must be registered in the Electronic Entry of the Property as soon as possible from the date of signing the public deed originated by this Contract, a period that must not exceed 4 business days from the date of signing this Contract. To this end, both Parties undertake to execute as many public and/or private documents, perform as many acts and adopt as many agreements as may be necessary to achieve such registration within twenty (20) business days following the signing of the public deed that originates this Agreement.

 

QUARTER.- PRECEDING CONDITIONS

 

The Parties expressly agree that the payment of the balance of the consideration for the Assignment, as indicated in numeral 3.2 of the Third Clause above, is subject to compliance with the following conditions precedent:

 

4.1.	Upon completion of the Term, the following conditions must have been met and verified by the Assignee, to its satisfaction:

 

	(i)	The Mortgage must remain in force and registered in the Registry Entry of the Property, in favor of the Assignee.
	(ii)	The Assignor must be the main creditor of the Company, so that, when the Assignment of the Credit is formalized, in the event of the eventual initiation of bankruptcy proceedings against the Company, the Assignee is the principal and preferential creditor of the Company, considering the order of priority applicable according to the current insolvency regulations.
	(iii)	That the Company does not have material or formal tax obligations that are due, pending payment, or are in a situation of non-compliance, which could substantially affect it and/or have a material impact on its financial situation;
	(iv)	Whereas, the Company does not have any inspection procedure or sanctioning procedure initiated by a tax authority or judicial process for tax obligations that could substantially affect the Company.

 

 

	(v)	Whereas, the Company does not have resolutions or payment orders pending before the tax authority that could substantially affect the Company and/or have a material impact on its financial situation.
	(vi)	Whereas, the Company has complied with all labor and social security, formal and substantive obligations under its responsibility, including all its obligations in terms of Occupational Health and Safety. (e.g. Occupational Health and Safety Regulations, Formation of the Occupational Safety and Health Committee, etc.), in accordance with the applicable labor legislation.
	(vii)	Whereas, the Company does not maintain administrative procedures and/or processes (SUNAFIL, SUNAT, etc.) and judicial processes of a labor nature that represent contingencies that are likely to generate a material affectation.

 

4.2.

In the event that the Assignee verifies that any of the conditions indicated in the previous paragraph have not been complied with, at the time of the expiration of the Term Extension, the Assignee may terminate this Contract by right, in accordance with the provisions of Article 1430 of the Civil Code, for which it is sufficient to send a notification to the other Party in this regard. at which time, this Agreement will be terminated and therefore, the obligation to pay the balance of the price for this Assignment will not be enforceable, nor will the Assignee be liable for any damage or loss that may be caused to the Assignor.

 

FIFTH.- SUBSISTING OBLIGATIONS

 

5.1.	The Parties agree that, in the event that after the second disbursement of the consideration for the Assignment has been made, in accordance with the provisions of paragraph 3.1 of the Third Clause, any claim, complaint or demand (the “Legal Actions”) of third parties, former employees and/or entities against the Company is generated, related to the Preceding Conditions indicated in numerals (iii), (iv), (v), (vi) and (vii) of paragraph 4.1, the Assignor undertakes to assume the payment of any debt generated to the Company derived from these Legal Actions, including the payment of costs and expenses of the pertinent legal defense.
	This, taking special attention to the fact that, in the event of the initiation of an insolvency proceeding in which the Company participates as a debtor, the existence of any debt duly accredited in compliance with the provisions of the General Law of the Bankruptcy System – Law No. 27809, of a labor and tax nature, will have preference in the collection, over the cancellation of the Credit that the Assignee will acquire against the Company, by virtue of this Assignment.

 

SIXTH.- LEASE CONTRACT

 

6.1.	The Parties and the Company acknowledge that, simultaneously on the date of signing this Agreement, the Assignee and the Company shall enter into the Lease Agreement on the Property, by virtue of which the Company will lease the entire Property in favor of the Assignee.

 

 

6.2.	To this end, the Company intervenes in this contract, in order to expressly declare, by signing this document, its knowledge of the obligation it is assuming and which in turn, constitutes a condition for this Assignment and payment of the balance of the price.

 

SEVENTH.- ACCEPTANCE OF ASSIGNMENT BY THE DEBTOR

 

The Company, in its capacity as debtor of the Credit, for the purposes provided for in Article 1215 of the Peruvian Civil Code, intervenes in this act, in order to expressly declare that it has become aware of the assignment of the Credit in the terms indicated in the Second Clause above in favor of the Assignee, recognizing the Assignee as the sole creditor of the Credit that until this date it had with the Assignor. under the same terms and conditions agreed with the latter.

 

EIGHTH.- APPLICABLE LAW

 

This Agreement shall be governed by the laws of the Republic of Peru.

 

NINTH.- NOTIFICATIONS AND DISPUTE RESOLUTION

 

9.1.	For the validity of all communications and notifications between the Parties, on the occasion of the execution of the Agreement, both indicate as their respective domiciles those indicated in the introduction of this document. A change of domicile of either Party shall take effect from the date of communication of such change to the other Party, by any written means.
9.2.	The Parties undertake to make their best efforts to ensure that any disagreement or controversy that may arise from the interpretation or execution of this document, including those of its nullity or invalidity, is resolved in a climate of good faith, through direct and friendly treatment between their representatives appointed for this purpose. The representatives of both Parties, acting in accordance with the guidelines set forth in this clause, shall attempt to resolve disputes that arise directly within a period of no more than fifteen (15) business days.
9.3.	If, after this period, the Parties do not reach a solution that puts an end to the dispute that has arisen, it will be submitted to arbitration as a matter of law, subject to the statutes and rules of the Arbitration Center of the Lima Chamber of Commerce, to whose rules and regulations the Parties are subject. The arbitration proceedings shall be governed by the following provisions:

 

	i)	The arbitral proceedings shall be conducted by three (3) arbitrators who shall compose the Arbitral Tribunal.
	ii)	The arbitration shall be de jure and shall be conducted in the city of Lima, Peru, in the Spanish language.
	iii)	The award rendered by the Arbitral Tribunal shall be final and binding.
	iv)	In cases where the complementary intervention of the Judiciary is required, the Parties submit to the jurisdiction of the judges of the Judicial District of Lima-Cercado, waiving the jurisdiction of their domiciles, if applicable.

 

Consequently, the Parties record the Assignment of the Credit and the new ownership of the mortgage lien, and you, Mr. Notary, must issue the corresponding report for its registration in the Real Property Registry of the Public Registries of Pisco.

 

 

El Cesionario:
/s/ Eric Healy
BRANCHOUT FOOD INC.
Eric Healy
Pasaporte de los Estados Unidos de
América No. 565054630
El Cedente:
/s/ [***********]		/s/ [***********]
Con la intervención de:
/s/ [***********]		[***********]

 

 

v3.24.1.1.u2

Cover	May 10, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 10, 2024
Entity File Number	001-41723
Entity Registrant Name	BRANCHOUT FOOD INC.
Entity Central Index Key	0001962481
Entity Tax Identification Number	87-3980472
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	205 SE Davis Avenue
Entity Address, City or Town	Bend
Entity Address, State or Province	OR
Entity Address, Postal Zip Code	97702
City Area Code	(844)
Local Phone Number	263-6637
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	BOF
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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