BranchOut Food (NASDAQ: BOF) expands $3M secured debt and sets 9.99% Kaufman ownership cap
Rhea-AI Filing Summary
BranchOut Food Inc. entered into an amendment to its 12% Senior Secured Convertible Promissory Note of up to $3,400,000, adding a 9.99% beneficial ownership limitation so Kaufman Kapital LLC cannot convert into common stock above that ownership level.
The company also borrowed an additional $750,000 from Kaufman on May 15, 2026, increasing its senior secured promissory note to a total principal amount of $3,000,000. This note bears 8% annual interest, matures on January 28, 2027, and is secured by a lien on substantially all of BranchOut Food’s assets. The company plans to use the new funds for working capital to produce customer orders.
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Insights
BranchOut adds secured debt while capping Kaufman’s equity ownership at 9.99%.
This 8-K shows BranchOut Food tightening terms on an existing convertible note and expanding secured borrowing. The 12% convertible note now includes a 9.99% beneficial ownership limit, which restricts Kaufman Kapital’s ability to convert debt into common stock beyond that threshold.
The company also upsized its senior secured promissory note with Kaufman to a total of $3,000,000 at 8% interest, maturing on January 28, 2027, secured by a lien on substantially all assets. Proceeds from the additional $750,000 are earmarked for working capital to support production of customer orders. The net effect is higher secured leverage with some constraint on near-term equity concentration from conversions.
8-K Event Classification
3 items: 1.01, 2.03, 9.01
3 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Convertible note size: $3,400,000 principal
Ownership cap: 9.99% beneficial ownership limit
Additional loan amount: $750,000
+3 more
6 metrics
Convertible note size
$3,400,000 principal
12% Senior Secured Convertible Promissory Note
Ownership cap
9.99% beneficial ownership limit
Kaufman conversion into common stock
Additional loan amount
$750,000
Borrowed May 15, 2026 as Additional Loan
Total secured note
$3,000,000 principal
Second Amended and Restated Senior Secured Promissory Note
Interest rate on note
8% per annum
Senior Secured Promissory Note
Maturity date
January 28, 2027
Senior Secured Promissory Note maturity
Key Terms
Senior Secured Convertible Promissory Note, beneficial ownership limitation, Senior Secured Promissory Note, Security Agreement, +1 more
5 terms
Senior Secured Convertible Promissory Note financial
"amendment to the 12% Senior Secured Convertible Promissory Note of the Company in the original principal amount"
A senior secured convertible promissory note is a formal IOU a company issues that is backed by specific assets (secured), given higher priority for repayment than other debts (senior), and can be exchanged for company shares instead of cash (convertible). For investors this means the loan is safer than unsecured debt because it has collateral and repayment priority, but it also carries the potential for dilution if the lender converts the note into equity — like holding a mortgage-backed IOU that can later be swapped for ownership stakes.
beneficial ownership limitation financial
"pursuant to which a 9.99% beneficial ownership limitation provision was added to the Convertible Note"
A beneficial ownership limitation is a rule that caps the percentage of a company’s shares an investor can be treated as owning or controlling for voting, regulatory or tax purposes. It matters to investors because it can restrict how many shares a person or group can buy or vote, affect takeover chances, and influence share liquidity and value — like a speed limit that prevents any single driver from taking over the whole road.
Senior Secured Promissory Note financial
"pursuant to a Senior Secured Promissory Note in the principal amount of $1,500,000"
A senior secured promissory note is a written IOU in which a borrower promises to repay a loan and gives lenders first claim on specific assets if the borrower can't pay. Being "senior" means this debt gets paid before other unsecured obligations, and "secured" means assets back the loan, reducing potential losses for lenders. For investors, that priority and collateral typically make these notes safer and often carry lower interest than unsecured debt—think of being first in line with a pledge on the borrower's car.
Security Agreement financial
"secured by a lien granted to Kaufman on substantially all of the Company’s assets pursuant to a Security Agreement"
A security agreement is a legal contract in which a borrower promises specific assets as collateral to a lender until a debt is repaid. Think of it like leaving your car keys with a mechanic while they fix the car — the lender can take or sell the pledged assets if the borrower defaults. For investors, these agreements reveal which company assets are tied up, who gets paid first in trouble, and how risky other creditors’ claims may be.
events of defaults financial
"the Note includes affirmative and negative covenants, events of defaults and other terms and conditions"
FAQ
What change did BranchOut Food (BOF) make to its convertible note with Kaufman?
BranchOut Food added a 9.99% beneficial ownership limitation to its 12% Senior Secured Convertible Promissory Note of up to $3,400,000. Kaufman cannot convert debt into common stock if conversion would push its ownership above 9.99%.
How much additional debt did BranchOut Food (BOF) incur from Kaufman in May 2026?
BranchOut Food borrowed an additional $750,000 from Kaufman on May 15, 2026. This increased the total principal under the senior secured promissory note to $3,000,000, consolidating prior borrowings into a larger single secured obligation.
What are the key terms of BranchOut Food’s $3,000,000 secured promissory note?
The secured promissory note has a principal amount of $3,000,000, bears interest at 8% per annum, and matures on January 28, 2027. It is secured by a lien on substantially all of BranchOut Food’s assets under an existing security agreement.
How will BranchOut Food (BOF) use the additional $750,000 loan proceeds from Kaufman?
BranchOut Food intends to use the $750,000 Additional Loan for working capital. The company specifies the funds will support production of customer orders, indicating a focus on meeting existing or anticipated demand rather than refinancing older obligations.
What interest rate applies to BranchOut Food’s new $3,000,000 note with Kaufman?
The enlarged senior secured promissory note bears interest at an 8% annual rate. This rate applies to the full $3,000,000 principal amount under the Second Amended and Restated Senior Secured Promissory Note dated May 15, 2026.
What collateral secures BranchOut Food’s obligations to Kaufman under the note?
BranchOut Food’s obligations under the $3,000,000 note are secured by a lien on substantially all of the company’s assets. This collateral is granted through a previously executed Security Agreement tied to the original convertible note.
AI-generated analysis. How Rhea-AI works. Not financial advice.
