Okay, grab your seat. Grab your seat, John. I'd like to introduce our next presentation here at Planet MicroCap Las Vegas, powered by MicroCapClub. We have an excellent Q&A hosted by Michael Saunders from Fairlight Capital with BranchOut Food. John. We clap. Thank you. Thanks very much for choosing this fireside chat in comparison with all the other ones you could have chosen from. My name is Mike Saunders. I work at Fairlight Capital. We are an emerging manager. We specialize in micro caps. We've been going seven years. Since we've been going, we have produced returns of just over 900%, and we are owners of this particular company, and it's a compelling story. I think, if you could- Yeah, appreciate it. All right. Yeah, thank you everyone for coming. Super excited to tell our story here today. I'm Eric Healy, Founder and CEO of BranchOut Foods. We have John Dalfonsi over there in the corner. He's our CFO, longtime investment banker from ROTH, and joined us a while back and took us public. I guess my quick background, I was an aerospace engineer for about 10 years. My family was in the natural food business forever, having started Kettle Brand KETTLE Chips and sold that, Kona Brewery, and some others. I basically at one point decided to quit my career and join the family business, and we started a cookie company that we sold to a private-- it was a small brand, but we got into about 10,000 retail doors across the country and sold it to private equity. In parallel to that, I started BranchOut and essentially found this new dehydration technology that we'll talk about. Quick disclaimer, we are not just a CPG company, we are a food technology platform. That's how we like to look at ourselves. We are taking on the freeze-dried market. Freeze-dried is sort of the legacy technology. It's been around for 100 years, but growing very rapidly still. There's a lot of demand and it's underserved from a capacity standpoint, growing at double digits. We're using this new technology that's aimed at replacing freeze-dry, and we're really the world leaders at it with the largest installation. In 2024, Prior to 2024, we had a small facility, we had some partners with it and stuff, and kind of played around. Long story there, some adventures there in Latin America that we don't need to get into today, 2024, we raised some money after going public and built out our own factory in Peru. Again, largest installation of the technology. It's in Peru, and I'll get into the reasons why we're down there. It's probably fairly obvious. Opened the plant in early 2025, really it's pretty new still. We're about 18 months into our own vertical integration. Since then we've been selling to all the big guys, Walmart, Sam's Club, Costco. We just announced today that we got 5 SKUs into Target, they're all branded SKUs. Growing from there, we have other avenues, non-retail avenues of the business as well that we can get into. We've been growing at about 100% year-over-year. 2024, we did roughly $7 million. Last year, we did about $14 million, we expect to probably be in the $20s this year, depending on how some things end up. Yeah, we believe very close to profitability. We'll get into that story a little bit. We're very opportunistic on how we go to market, we're taking on some orders that are smaller and more diverse than what makes the plant run efficiently. We think about somewhere between $16 million-$18 million annual revenue will get us to profitability. We're kind of right on that line right now. A little bit about the technology and why we're in Peru. Again, it's called REV, Radiant Energy Vacuum. There's actually the company that created the technology is here today. They're called EnWave. They own 14-some patents on the technology. They developed it, they're a company that has been around for a little while, we're really the first kind of big initiative to commercialize the technology and commercialize all the products on it. We have an exclusive license agreement with them to do what we're doing in the way we're doing it, in the region we're doing it. We can get into that in more detail if we want as well. Our plant down there is about 1,000 metric tons a year. It's bigger, more capacity than we believe any freeze dryer in North America. The technology itself is just super efficient. It's kind of our secret sauce is not just the technology and its efficiency, but placing it in Peru where we have low cost, very low-cost fruit and vegetable raw materials, labor, and other things as well. Why we're in Peru, again, we're at the source of the fruit, right? We buy fruit at probably $0.10 on the dollar compared to being in North America. We're able to buy fruits and vegetables that are sort of 2nd grade, so they're not export quality. We're slicing it, we're cutting it, so that doesn't really matter to us. That's a big reason. We're also right at the source, so it's a very short supply chain. When we buy the fruit, it was on the farm probably five or 10 days ago, and it goes straight into our machine. That really speaks to the end quality of the product. Also the products themselves are just, there's no way around it, they're very labor-intensive. I don't believe this model would work in North America or any market that's more expensive than where we're at. We just have to have people handling it, cutting it, putting it out on trays, that sort of thing. That really gives us a lot of versatility on what products we can make as well. The technology itself is called REV, Radiant Energy Vacuum. Again, we believe this is destined to replace freeze-dry. Multi-billion dollar market, and we're kind of the first, the leaders with it, so we think there's a pretty large TAM that we can go after. It works very differently. It's an industrial vacuum microwave system. It's a large vacuum chamber. We put the fruit in when it's fresh. We draw a vacuum down, and that does two things. It eliminates the oxidation, so we don't get the browning. We get a very nice fresh-looking color. It also lowers the boiling point of water. We apply the microwave energy, and it's much more efficient because we've lowered the boiling point of water. We're literally boiling the water out of the food at about near room temperature. We're boiling at like 80 degrees. What that does is it removes the water very rapidly. The food has basically never been heated, it's never been frozen, and it's never been oxidized. We're putting this really fresh, high-quality food in that just came off the farm, and we're basically getting that back out, but it's dried and shelf-stable. Much quicker, much more efficient. With that, it gives us basically all of these attributes. Three times the flavor. Our Pineapple Chips, we've actually measured it in a lab compared to freeze-dry, and we have three times as much flavor that's preserved in the product. Whereas freeze-dry, it's literally vacuuming the flavor out of the product for like 32 hours. It's a very long, harsh process. We get more of a snackable texture, so it's more of a crunch, which leads into our whole brand play. This is really the first snackable dried fruit. I'm sure you've all had freeze-dried before. It's very chalky, not a great texture. Vibrant color, I mentioned that. The fruit almost looks fresh when it comes out. Quite a bit lower cost. Our batch time from the fruit from fresh to finished is about 40 minutes. Freeze-dry, it can be 24 hours, 32 hours for about the same CapEx spend. It's a much more efficient process. Just our Pineapple Chips, we actually will have some at our booth today, so if anyone wants to come by and try them. Great product. Again, we tested it. You can taste it, you can smell it. The flavor there is just incredible. Just a color comparison on some items, definitely more vibrant, fresh-looking, where freeze-dry is kind of that muted, chalky texture and color. We've done consumer feedback, consumer trials with our product versus traditional dried fruit. We're just preferred. Intent to buy levels are very high. This was an early study we did, we're proving it right now in retail. A little bit about the revenue. I mentioned we're growing very quickly, doubling about every year. We have this year some very big things in the hopper that can break one way or another. We have a very big one that is going to be announced soon. We believe we can maintain this growth rate for the foreseeable future. There's really a lot of irons in the fire. We don't just do retail. We have really three legs of the business. We have branded retail. Again, we're going into Target, we're in Sam's Club, we're in Costco. We also have private label. We have a big business with Walmart where we do private label. There's advantages and disadvantages to all the different parts of the business. The third one is industrial ingredients. We also sell fruit powders, fruit fragments, through some distributors and partners, but ultimately it gets sold into General Mills and Nestlé and kind of all the big guys that use these as ingredients. They like it because, of course, the flavor compounds are much higher than what's been possible before. Just some images of the plant. Again, we built out in 2024. It's about 50,000 sq ft. We installed three production lines, three of these large-scale machines. Actually, early this year, we just added a fourth line. That's super exciting. The idea there was we actually built out a new building on our property down there, and it allows us to do cheese. This facility, this building is allergen-free, we're only doing fruits and veg. In the new building, we're able to dry cheese. We have a whole line of dried cheeses, dried cheesecake, and it really just speaks to the versatility of this technology. We'll also have some of that to try later today as well. Just kind of a quick snapshot of our branded line. The other thing I didn't mention about the technology is it can dry things that have never been possible before. It's really exciting that we go into a retail meeting and show them things that they've never seen before. We went into a Costco meeting and the buyer said, "Hey, I really want Brussels sprouts. I've never seen a dried snackable Brussels sprout before." We had never thought of it. We went back and tried it, and turned out it was a really good product. She actually didn't take it in, that product's national. It's national in Walmart right now under private label. A lot of things that are like bell pepper, there's never been a bell pepper before. A lot of things we can do that have never been possible before with the platform. These are the new multi-packs, is what I'm showing here today. Our new initiative this year is we're going into mainstream grocery with the product line. These are multi-packs, it's kind of a kid mom play. Five of the little bags in the big bag, and we're selling those into the produce department of grocery stores. It'll be a long build there, probably a few years, but we think we can get that part of the business to $20 million-$30 million. Just a snapshot on kind of what we've been selling into Costco. The Pineapple Chips are definitely number one. They've been reordering that quite a bit. They're in the southeast region right now. We also have the new mango. We have a Mango Chip that's in the Bay Area region. If anyone's from there, go check it out. Yeah, just a lot of things. Again, we go into Costco and we don't just show them a couple SKUs. We show them this technology platform and say, "What are you looking for?" We're very product development focused, and we usually go and a lot of times we'll develop something specifically for them. This is the product that is in Sam's Club. This is super exciting this year. We brought on Sam's Club for the first time. This launched in May. It's pretty well sold out at this point. Maybe a few stores have it left. It sold exceptionally well. It was a one-time rotation in all 619 stores. The buyer just told us that she's bringing it in every day now. We're super excited about that. It's a huge win for the company. This will go in in September. We don't have final store count yet, but we expect it to be an additional $10 million-$15 million in incremental business with this product. It sold very well. It scored very well. Feedback from consumers was great. No one's ever seen anything like it. I mean, they're literally just dried fruit chips that actually taste good and have the nutrition and super exciting. Just some more stuff. These are mixed pack items, kind of the same products, but packaged different ways that we're showing to Costco D12, Department 12, which is a separate department that we haven't worked with yet. Yeah, just more innovation. We do a lot of different mixes. We can season products, like cinnamon apple. L.A. Costco's looking at cinnamon apple right now. I mentioned that mangoes in the Bay Area. This is just kind of out of left field, but again, it shows the versatility of our platform. We figured out that we can take fresh cheesecake and put it through our machine and dry it a little bit, not fully dried, and it makes it totally shelf-stable. This is where we added the new area that we can do dairy products. It's a really incredible product because we now have shelf-stable Cheesecake Bites without adding preservatives. It's simply through the dehydration process that makes that happen. It's still creamy, it's still soft. It's not hard like a freeze-dried product. We have interest from Sam's Club, multiple Costco regions. Walmart's looking at this for private label. This is what I find really exciting about this business is we can develop one new product and it's like a complete game changer. This could be its own business on its own right, this SKU, right? Yeah. More mixed packs, different kind of dried. We're starting to play around with just different types of protein. Dried Greek yogurt, dried cottage cheese, mixing them with the fruits. This is aimed actually more at the GLP-1 trend. Walmart, in a meeting we had with them, asked us, they said, they have this GLP-1 trend, as everyone knows about that, but there has yet to be really food items that are positioned for it. This is high protein with the dried dairy and high fiber with the dried fruit. Really, it speaks to that trend. A little bit more about just kind of our whole menu of what we offer. Again, we kind of show this to retailers and we're sort of like their product development arm. That's how we present ourselves. That's basically it. Just kind of a quick snapshot of what I talked about here. Yeah, three-pronged revenue approach. Branded retail, private label, and industrial ingredient. All three are growing. The industrial ingredient is kind of the least sexy, but it's growing strong. We did about $2 million last year. We'll probably do $7 million there this year, with a bunch of General Mills and some other programs that are starting towards the end of the year. That's us. Yeah. A question for you. Yeah. I was wondering found the product itself, but can you explain the relationship between you and EnWave, the technology provider? Yeah. Why you want a new entrant? I mean, what prevents Enwave? All the businesses get killed because competition comes in. Yeah. What prevents someone or Enwave from licensing it to another company who comes in, maybe even and becomes a standalone private label and they compete against. Sure. Yeah, it's a great question. He's asking about, if you didn't hear, our relationship with Enwave and essentially the license agreement. Yeah. Like you said, most food companies don't have any IP, right? As soon as you're onto something and you show success in the market, everyone piles in. We don't claim to have a perfect IP moat, but what we have is an exclusive license agreement with Enwave. It's globally exclusive for a few of our products, so there are a few products that we have locked up. We have the region of Peru, so no one can come down there and make it in Peru, which isn't that great, but it helps. The big thing with us is really we're the leaders. It took us probably five or six years to get to where we are. We've invested maybe $10, $15 million in that plant. It took 18 months, and we're still dialing in our supply chain and the process, the SOPs. There's a lot to it, is my point. Somebody would really have to catch up. You got to build the market, you got to build the sales. Someone would really have to catch up there. We're talking to a lot of big CPG companies, and they're all interested in the technology. It's a lot easier for them to just come to us and have us make it for them, a lot lower risk. That's how we're positioned. John, you got something to add here? This is our CFO. Yeah. John. Yeah. You just don't take this product and put it in the machine. You have to develop the quality, you have to develop the taste, you have to develop the color. We spend a lot on R&D. If you and I bought a machine, there's just no way these products would come out like this. It'd take years to make the pineapple taste like the pineapple. There's a lot of innovation, research and development, quality testing that goes through. The great thing is, when we do go put something through, there's no shrinkage in the plant. You go through pineapple, try to perfect it, and say you make $1 million worth. We just sell it to MicroDried, our ingredient manufacturer, so we have no shrink, and we can experiment as much as we want. To my point earlier, we believe you have to do this in a Latin American country like this. You couldn't do it up here, just the economics don't work. It's no picnic, going down there, it's a completely different system that we had to navigate. A lot of risk in getting to where we are now. Yeah, go ahead. Knowing that EnWave does the market on a product by geo licensing setup, are there any licensees out there that have, for whatever reason, not really matured with the product that you would have an opportunity to go buy the license to build on where you are right now? Yeah. It's a good question, that's probably a better question for EnWave. I don't know that we need to buy anyone's license. The license agreement typically states you have to have commercial success with it. There's minimums. If somebody's completely failing at something, they're going to take it back. They make a royalty, so they want whatever that product is to be made by somebody. If I go to them and say, "Hey, I'm going to make this product," the other guy isn't, they'll let us go for it. Go ahead. You said you had three lines, and then added another building. Just kind of curious, that 50,000 sq ft you have, what's your capacity additional to that? Yeah. Actually, the new building's in addition to the 50,000. I don't know, we're probably 70 or 80,000. We actually built it out bigger so that we can add a fifth line in the future. There's space down there right now for a fifth, and it's pre-plumbed and wired. On the property, I'd say we could probably add a sixth, and we're in process right now. There's a property next door to us that's about equal size that we're looking at acquiring. Who would own it? Well, it's complicated. We have a 10-year lease on the site with the option to buy it, and the owner of the property is going through bankruptcy, and we own the lien on the property. Our strategy is we'll acquire it through the bankruptcy process with our lien. Yeah. In the back, yeah. Fiber seems to be a trend lately. Does your process preserve the fiber in the frozen vegetables? Oh, yeah. That's mostly what's left is Yeah. We're starting to label all of our products. I think we have it. Maybe not on this one, but yeah. It's a big GLP-1 trend. Yeah. Go ahead. How does the flavor and the texture compare? Anything significant from- Yeah. Everything's different, we say it's about 95% of the original nutritional value. It's on par with freeze-dried. That's the one thing freeze-dried does do pretty well. It's pretty good. It's almost all there. Go ahead. Latin America aside, could you basically find the same ongoing sale, or is there other parts of Latin America? Yeah. Overall, people, when labor is a lot cheaper in South America, a lot harder to actually make good labor, how does that factor into that with from just what's over here? Yeah. The question was why Peru, I didn't really catch the rest of it. Yeah. Why did you pick Peru over other countries, also why Latin America over Asia? Yeah. Why Latin America? Just because our market is North America, it's a two to three-week boat ride from Lima up to either L.A. or Houston. It's positioned well to service North American markets. Asia's probably, we could probably make the economics work in some Southeast Asia countries, but it's further away, frankly. That's really all. Why Peru, specifically Latin America? There's maybe other countries, but it's very much up and coming. They have a lot of produce in the country, and then we can also pull from Chile to the south, that has opposite growing regions. Peru has multiple regions as well, so we have kind of the lowlands and then the highlands up in the Andes, and they have opposite growing seasons as well. It's just kind of, for all those reasons, it's a good place to be. Yeah, go ahead. Can you talk about tariffs and tariff pricing? Yeah. It's been difficult to predict, but the good thing is, so there is technically a 10% tariff on imports from Peru, but they've excluded all the tropical fruit and anything related to tropical fruit. Because we can't do that up here, right? We can't make that up here. Most of our SKUs are tariff-free. Apples and strawberries, because that competes with crops up here, there is a 10%. We're selling the product, it's an intercompany sale from our Peru entity to our U.S. entity, and we bring it up in bulk. In the end product, it's probably only 5%. We do all the packaging and stuff up here. Yeah, right there. What's the typical shelf life of the product? We put 18 months on the bag. Frankly, it's probably forever. We haven't tested it that long, but it's similar to freeze-dry. Yeah. Are you going to penetrate supermarket? Sorry, say that again. Are you going to try to penetrate supermarket? Yeah. We kind of did that last. We opened this big plant, we needed quick volume. We went to club first. This whole product line is aimed at supermarkets, mainstream grocery stores, and that's really this year. We're just getting started with that. Okay. One more. Are you guaranteed that the supply guaranteed that perfectly weighted or you have agreement with the With the retailers? Yeah. Yeah, it's never guaranteed. It's really based on how well we sell. We've been selling very well. It's been increasing. Yeah. Stop by our booth if you guys want to talk more. Happy to answer more questions