Latest 10-K filed Apr 15, 2026. Sentiment + YoY language diff vs prior year. Read sections →
Sentiment via Loughran-McDonald lexicon · YoY diff via Jaccard similarity + paragraph set difference.
0 Form 4 / 4-A filings, newest first
| Filed | Top transaction | Shares | Price | Value | ||
|---|---|---|---|---|---|---|
| Filed | Insider | Top transaction | Shares | Price | Value | |
|---|---|---|---|---|---|---|
| No filings on this page. | ||||||
Showing 0-0 of 0
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
18,580 words
ITEM 1A. RISK FACTORS
Investing in our securities involves a high degree of risk. You should carefully consider the following risk factors, as well as the other information included in this Annual Report on Form 10-K, including our consolidated financial statements and the related notes. If any of the following risks actually occur, our business, financial condition, results of operations and cash flows could be materially and adversely affected.
Risks Related to Our Business and Industry
Our results may be negatively impacted in the event of non-renewal, termination or breach of our existing Intellectual Property License Agreements.
Our business model relies on marketing our portfolio of products under nationwide and widely known brands that are licensed to us by third parties under bilateral agreements with an average term duration of three years. As of the date of this Annual Report on Form 10-K, three of our four license agreements with Unilever have expired. The Arisco agreement expired on December 1, 2025, the Maizena agreement expired on February 28, 2026, and the Mae Terra agreement expired on March 1, 2026. Our sole remaining license covers the Knorr brand for 15 specified products and is scheduled to expire on June 30, 2026. We are in discussions regarding the potential renewal of these agreements; however, no renewals have been finalized and there can be no assurance that any renewal will occur or that any renewal will be on commercially acceptable terms. The failure to renew our remaining Knorr license or to enter into replacement licensing agreements would eliminate our current product portfolio and would have a material adverse effect on our business, revenue and financial condition.
Three of our four key intellectual property license agreements have expired as of the date of this Annual Report on Form 10-K, collectively covering 46 of our 61 planned new products, and the failure to renew these agreements would have a materially adverse effect on our business, results of operations and financial condition.
Our business model relies on our ability to commercialize products under licensed brands pursuant to four intellectual property license agreements with Unilever. As of the date of this Annual Report on Form 10-K, three of these four license agreements have expired as follows:
The Arisco brand license agreement (Unilever Brasil Ltda.), covering 11 products, expired on December 1, 2025.
The Maizena brand license agreement (Conopco, Inc. d/b/a Unilever), covering 5 described products, expired on February 28, 2026.
The Mae Terra brand license agreement (Mae Terra Produtos Naturais Ltda.), covering 27 products, expired on March 1, 2026.
Together, these expired agreements covered 46 of the 61 new products previously included in our planned 2026 expanded product portfolio rollout. Our sole remaining license agreement, covering the Knorr brand for 15 specified products (Unilever IP Holdings B.V.), is scheduled to expire on June 30, 2026. We are currently in discussions with the applicable Unilever entities regarding the potential renewal of the three expired agreements and the renewal of the Knorr brand license agreement prior to its scheduled expiration .However, none of these renewals have been finalized, and there can be no assurance that any renewal will occur or that any renewal will be on commercially acceptable terms.
If these agreements are not renewed or extended, we will not be permitted to manufacture or sell products under the Arisco, Maizena or Mae Terra brands, which would eliminate 46 of the 61 new products from our contemplated product portfolio. Further, if the Knorr agreement is not renewed prior to its June 30, 2026 expiration, we will not be permitted to manufacture or sell any products under the Knorr brand following the agreement expiration date, which would eliminate our entire remaining active product portfolio. The loss of any or all of these licensing arrangements would have a material adverse effect on our business, results of operations, financial condition and ability to generate revenue.
We have incurred net losses from operations, experienced net cash outflows from our operating activities and our independent registered public accounting firm included an explanatory paragraph concerning substantial doubt about our ability to continue as a going concern in its report on our financial statements for the years ended December 31, 2025 and 2024. If we do not effectively manage our cash and other liquid financial assets, execute our plan to increase profitability and obtain additional financing, our ability to continue as a going concern could be negatively affected.
We have incurred significant operating losses, experienced net cash outflows from operations and we have accumulated deficit. Our net loss was approximately $1.1 for the year ended December 31, 2025 and $1.6 million for the year ended December 31, 2024. As of December 31, 2025 and December 31, 2024, the Company had negative working capital of approximately $7.4 million and $5.6 million, respectively. In its report on our financial statements for the years ended December 31, 2025 and 2024, our independent registered public accounting firm included an explanatory paragraph stating that our accumulated losses of approximately $8.2 million and negative shareholders’ equity of approximately $6.8 million as of December 31, 2025, raise substantial doubt about our ability to continue as a going concern. As of December 31, 2025, total liabilities exceeded total assets by approximately $6.8 million. The Company generated no net revenue for the year ended December 31, 2025 and has not generated revenue since the second quarter of 2024. Our management has implemented various efforts to improve liquidity and conserve cash. If we are to obtain sufficient funding, increase revenue and reduce operating expenses, our business, prospects, financial condition and results of operations will be materially and affected and we may be to continue as a going . If we are to continue as a going , we may have to our assets and may receive less than the value at which those assets are carried on our audited financial statements, and it is likely that investors will all or a part of their investment.
Table of Contents
Our principal assets are our indirect ownership interests in our subsidiaries BR Brands S.A. (formerly BR Brands Ltda.) and Boni Logistica Ltda. If these subsidiaries are restricted from distributing or otherwise transferring funds to us, pursuant to applicable law, regulation or otherwise, our liquidity, financial condition or results of operations could be materially and adversely affected.
We have no material assets other than our indirect ownership of the equity interests in our subsidiaries in Brazil and no sources of revenue other than from our subsidiaries. To the extent that we need funds and our subsidiaries may be restricted under applicable law or regulation from paying dividends or making other distributions or are otherwise unable to provide such funds, such restrictions or inability could materially adversely affect our liquidity, financial condition, and results of operations.
Brazilian law permits the Brazilian government to impose temporary restrictions on conversions of Brazilian currency into foreign currencies and on remittances to foreign investors of proceeds from their investments in Brazil, whenever there is a serious imbalance in Brazil’s balance of payments or there are reasons to expect a pending serious imbalance. Although no such restrictions are currently in place, Brazilian banks may also impose similar restrictions on conversions and remittances. Any imposition of restrictions on conversions and remittances could hinder or prevent our Brazilian subsidiaries from converting Brazilian currency into US dollars or other foreign currencies and remitting dividends or distributions abroad. As a result, any imposition of exchange controls restrictions could reduce the market price of the shares of our common stock.
Cash repatriation restrictions and exchange controls may also limit our ability to convert foreign currencies such as the Brazilian Real into US dollars or to remit payments by our Brazilian subsidiaries or businesses located in or conducted within a country imposing restrictions or controls. While we have repatriated cash historically, should we need to do so in the future to fund our operations, we may be unable to repatriate or convert such cash, or be unable to do so without incurring substantial costs which may have a material adverse effect on our operating results and financial condition.
We have paused sales of our products since the second quarter of 2024 and there is no assurance that we will be able to successfully re-enter the market or regain customer and/or vendor relationships.
During the second quarter of fiscal 2024, we made the strategic decision to temporarily pause sales of our products in order to focus on operational readiness and product portfolio development. As a result, we have not generated revenue since the second quarter of fiscal 2024. While this pause was intended to support our long-term growth, it has introduced a number of risks and uncertainties. These include the potential inability to recover lost market share due to changes in customer behavior or increased competition, as well as the possibility that customer loyalties may have shifted during our product sales pause period. Some of our former customers may have entered into longer-term arrangements with competitors or may harbor concerns regarding our ability to ensure product supply continuity and reliability.
Our ability to re-establish our market position depends on a number of factors, including the successful introduction and commercialization of products under our remaining and any renewed or replacement license agreements, competitive pricing, effectiveness of our marketing campaigns, and our ability to restore and expand our sales and distribution channels. As of the date of this Annual Report on Form 10-K, our ability to launch products is further constrained by the expiration of three of our four Unilever license agreements. Our sole remaining license agreement, covering the Knorr brand for 15 specified products, expires on June 30, 2026. There can be no assurance that we will successfully renew this license agreement or enter into replacement license agreements. We may face challenges in renegotiating commercial terms with key retailers and vendors, particularly if they have filled gaps left by pause in product sales. We may also face delays, operational challenges, or unexpected costs in relaunching our product sales.
In addition, our competitors may have captured market share during our period of sales inactivity, making it more difficult for us to regain market share. If we are unable to successfully re-enter the market, re-engage effectively with our customers and vendors, rebuild our distribution network, and generate sustainable revenue from our new product offerings, our business, financial condition, and results of operations could be materially adversely affected.
Table of Contents
The categories in which we participate are very competitive, and if we are not able to compete effectively, our results of operations could be adversely affected.
The food industry categories in which we participate, which correspond mainly to rice, beans, corn, pasta, potatoes and cassava which make up a significant part of Brazilian individuals’ basic food, are very competitive. Our principal competitors in these categories are manufacturers, as well as retailers with their own branded and private label products. Competitors also market and sell their products through the same distribution channels as we do, including brick-and-mortar stores and e-commerce. Some of our principal competitors have substantial financial, marketing, and other resources. In most product categories, we compete not only with other widely advertised branded products, but also with regional brands and with generic and private label products that are generally sold at lower prices. Competition in our product categories is based on product innovation, product quality, price, brand recognition and loyalty, effectiveness of marketing, promotional activity, convenient ordering and delivery to the consumer, and the ability to identify and satisfy consumer preferences. If our large competitors were to seek an advantage through pricing or promotional changes, we could choose to do the same, which could adversely affect our margins and profitability. If we choose not do the same, our revenues and market share could be adversely affected. Our market share and revenue growth could also be impacted if we are not in introducing products in response to changing consumer demands or to new product introductions by our competitors. If we are to build and sustain brand loyalty offering recognizably product quality, we may be to maintain premium pricing over generic and private label products.
In addition, our future success and earnings growth depend in part on our ability to be efficient in providing our products in highly competitive markets. Gaining additional efficiencies may become more difficult over time. Our failure to reduce costs through productivity gains or by eliminating redundant costs resulting from acquisitions or divestitures could adversely affect our profitability and weaken our competitive position. Many productivity initiatives involve complex reorganization of manufacturing facilities and production lines. Such manufacturing realignment may result in the interruption of production, which may negatively impact product volume and margins. We periodically engage in restructuring and cost savings initiatives designed to increase our and reduce expenses. If we are to execute these initiatives as planned, we may not realize all or any of the anticipated benefits, which could affect our business and results of operations.
We may be unable to maintain our profit margins in the face of a consolidating retail environment.
There has been significant consolidation in the grocery industry, resulting in customers with increased purchasing power. In addition, large retail customers may seek to use their position to improve their profitability through improved efficiency, lower pricing, increased payment deadlines and reliance on their own brand name products, increased emphasis on generic and other economy brands, and increased promotional programs. If we are unable to use our scale, marketing expertise, product innovation, knowledge of consumers’ needs and product category leadership positions to respond to these demands, our profitability and volume growth could be negatively impacted. In addition, the loss of any large customer (e.g. supermarkets) could adversely affect our sales and profits.
We may be unable to maintain our profit margins in the face of loss of our tax benefits granted by Brazilian government.
Many of our products are included in the basic elements of food consumption in Brazil (cesta básica) and therefore are subject to a special tax treatment that enables us to benefit from certain tax relief that reduces most of our taxation burden (in particular, in relation to consumer taxes). If the Brazilian government reduces or eliminate these benefits, our sales may be negatively impacted and/or prices of our products will have to be increased, which may hinder the ability of poorer people to acquire our products.
We have no agreements with our customers and depend on a few major customers; the loss of any of these customers could have a material adverse effect on our business, financial condition and results of operations.
We currently have no written agreements with any of our customers and our customers are therefore not obligated to purchase any items from us. In addition, a relatively limited number of our customers make up a large portion of our sales.
For the year ended December 31, 2025 we did not generate any revenue, and therefore did not have revenue concentration for that period. As of December 31, 2025, we had no accounts receivable.
For the year ended December 31, 2024, one wholesale customer represented approximately 10.1% of our revenues. As of December 31, 2024, two wholesale customers represented approximately 10.1% and 9.1% of our accounts receivable, net, respectively.
Due to the concentration of revenues from a limited number of customers, if we do not receive the payments from, or if our relationships with said customers become impaired, our revenue, results of operation and financial condition will be negatively impacted.
In addition, we cannot assure that any of our customers in the future will not cease using our products, significantly reduce orders or seek price reductions in the future, and any such event could have a material adverse effect on our revenue, profitability, and results of operations.
Table of Contents
Price changes for the commodities we depend on for raw materials, packaging, and energy may adversely affect our profitability.
The principal raw materials that we use are commodities that experience price volatility caused by external conditions such as weather, climate change, product scarcity, limited sources of supply, commodity market fluctuations, currency fluctuations, trade tariffs, pandemics (such as the COVID-19 pandemic), wars (including international sanctions imposed on Russia for its invasion of Ukraine), and changes in governmental agricultural and energy policies and regulations. Commodity prices have become, and may continue to be, more volatile during geopolitical distress. Commodity price changes may result in unexpected increases in raw material, packaging, energy and transportation costs. If we are unable to increase productivity or increase our prices to offset these increased costs, we may experience reduced margins and profitability. We do not hedge against changes in commodity prices, and the risk management procedures that we do use may not always work as intended.
Concerns with the safety and quality of our products could cause consumers to avoid certain products or ingredients.
We could be adversely affected if consumers in our principal markets lose confidence in the safety and quality of certain of our products or ingredients. Adverse publicity about these types of concerns, whether valid or not, may discourage consumers from buying our products or cause production and delivery disruptions.
Disruption of our supply chain could adversely affect our business.
Our ability to make, move, and sell products (and maintain certain working capital levels) is critical to our success. Damage or disruption to raw material supplies and products by our suppliers or our distribution capabilities due to weather, climate change, natural disaster, fire, terrorism, cyber-attack, pandemics (such as the COVID-19 pandemic), war, governmental restrictions or mandates, labor shortages, strikes, import/export restrictions, or other factors could impair our ability to manufacture or sell our products. Many of our product lines and raw materials used in our products are manufactured at diverse locations or sourced from multiple suppliers. The failure of third parties on which we rely, including those third parties who supply our ingredients, packaging, capital equipment and other necessary operating materials, contract manufacturers, commercial transport, distributors, contractors, and external business partners, to meet their obligations to us, or significant disruptions in their ability to do so, may negatively impact our operations. Our suppliers’ policies and practices can our reputation and the quality and safety of our products. with significant suppliers, including regarding pricing or performance, could affect our ability to supply products to our customers and could materially and affect our sales, financial condition, and results of operations. to take adequate steps to mitigate the likelihood or potential impact of such events, or to effectively manage such events if they occur, particularly when a product is sourced from a single location or supplier, could affect our business and results of operations, as well as require additional resources to restore our supply chain.
Additionally, short-term or sustained increases in consumer demand at our retail customers may exceed our production capacity or otherwise strain our supply chain. Our failure to meet the demand for our products could adversely affect our business and results of operations.
We rely heavily on certain vendors, suppliers, logistics suppliers and distributors, which could adversely affect our business.
We rely heavily on certain vendors, suppliers, logistics suppliers and distributors. For the year ended December 31, 2025, 4 vendors accounted for approximately 75%, 15%, 5% and 5% of the Company’s accounts payable, respectively. For the year ended December 31, 2024, 4 vendors accounted for approximately 75%, 15%, 5% and 5% of the Company’s accounts payable, respectively.
Our ability to maintain consistent prices and product quality depends in part upon our ability to acquire specified food products and supplies in sufficient quantities from third-party vendors, suppliers and distributors at a reasonable cost. We do not control the businesses of our vendors, suppliers, logistic suppliers and distributors, and our efforts to specify and monitor the standards under which they perform may not be successful. Furthermore, certain food items are perishable, and we have limited control over whether these items will be delivered to us in appropriate condition for use in our business. Our reliance on a limited number of vendors increases our risks, because if we experience a significant increase in demand for our products, or if we need to replace an existing vendor, we may not be able to supplement a service or replace a vendor on acceptable terms, which may undermine our ability to deliver products to customers in a timely manner. If any of our vendors, suppliers, logistic suppliers or distributors are unable to fulfill their obligations to meet our standards, or if we are unable to find replacement providers in the event of a supply or service disruption, we could encounter supply shortages and incur higher costs to secure adequate supplies, which could materially affect our business, financial condition and results of operations.
If our products become adulterated, misbranded, or mislabeled, we might need to recall those items and may experience product liability claims if consumers are injured.
We may need to recall some of our products if they become adulterated, misbranded, or mislabeled. A widespread product recall could result in significant losses due to the costs of a recall, the destruction of product inventory, and lost sales due to the unavailability of our product for a period of time. We could also suffer losses from a significant product liability judgment against us. A significant product recall or product liability case could also result in adverse publicity, damage to our reputation, and a loss of consumer confidence in our products, which could have an effect on our business results and the value of our brands.
Table of Contents
We may be unable to anticipate changes in consumer preferences and trends, which may result in decreased demand for our products.
Our success depends in part on our ability to anticipate the tastes, eating habits, and purchasing behaviors of consumers and to offer products that appeal to their preferences in channels where they shop. Consumer preferences and category-level consumption may change from time to time and can be affected by a number of different trends and other factors. If we fail to anticipate, identify or react to these changes and trends, such as adapting to emerging e-commerce channels, or to introduce new and improved products on a timely basis, we may experience reduced demand for our products, which would in turn cause our revenues and profitability to suffer. Similarly, demand for our products could be affected by consumer concerns regarding the health effects of ingredients in our products such as sodium, trans fats, genetically modified organisms, sugar, processed wheat, or grain-free or legume-rich pet food, or other product ingredients or attributes.
We may be unable to grow our market share or add products that are in faster growing and more profitable categories.
The food industry’s growth potential is constrained by population growth. Our success depends in part on our ability to grow our business faster than populations are growing in the markets that we serve. One way to achieve that growth is to enhance our portfolio by adding innovative new products in faster growing and more profitable categories. Our future results will also depend on our ability to increase market share in our existing product categories. If we do not succeed in developing innovative products for new and existing categories, our growth and profitability could be adversely affected.
Our results may be negatively impacted if consumers do not maintain their favorable perception of our licensed brands.
The value of our licensed brands is based in large part on the degree to which consumers react and respond positively to these brands. Brand value could diminish significantly due to a number of factors, including consumer perception that the brand owner or we have acted in an irresponsible manner, adverse publicity about our products, failure to maintain the quality of our products, the failure of our products to deliver consistently positive consumer experiences, concerns about food safety, or our products becoming unavailable to consumers. Consumer demand for our products may also be impacted by changes in the level of advertising or promotional support. The use of social and digital media by consumers, us, and third parties increases the speed and extent that information or misinformation and opinions can be shared. Negative posts or comments about us, our licensed brands, or our products on social or digital media could seriously our reputation. If we do not maintain the consumer perception of our licensed brands, our business results could be impacted.
Our reporting currency is the US dollar but a significant portion of our revenue and costs and expenses are denominated in Brazilian Reais, so that exchange rate movements may affect our financial performance.
We generate revenue and incur costs and expenses in our Brazilian operations in Brazilian reais. The results of our Brazilian operations are translated from reais into US dollars when we prepare our consolidated financial statements. When the US dollar weakens relative to the Brazilian Real, the contribution of our Brazilian operations to our overall results of operations increases as a function of translating our consolidated financial statements from the Brazilian reais to the weakened US dollar. By contrast, when the US dollar strengthens against the Brazilian Real, the contribution of our Brazilian operations tends to decrease, as a function of translating our consolidated financial statements from the Brazilian reais to the stronger US dollar, on the overall result and profitability of the Company. See “ Risk Factors — Risks Related to Doing Business in Brazil — Exchange rate instability may have adverse effects on the Brazilian economy, and, as result, us ” on page 23 for a discussion of more risks on the exchange rate fluctuation and regulations in Brazil.
The Brazilian currency has historically been subject to significant exchange rate fluctuations in relation to the US dollar and other currencies and has been devalued frequently over the past decades. These exchange rate movements have been attributable to economic conditions in Brazil, Brazilian governmental policies and actions, developments in global foreign exchange markets and other factors. The Brazilian government has in the past implemented various economic plans and used various exchange rate policies to address exchange rate fluctuation and there can be no assurances the government will not take similar actions in the future.
Our reported consolidated results of operations have periodically been affected by the strength of the US dollar relative to the Brazilian Real and further appreciation of the US dollar in future periods could adversely affect our consolidated results of operations in those periods. Disruptions in financial markets may also result in significant changes in foreign exchange rates in relatively short periods of time which further increases the risk of an adverse currency effect. We do not currently use financial derivatives or hedging agreements to manage our currency exposure. In the future, we may choose to use a combination of natural hedging techniques and financial derivatives to protect against foreign currency exchange rate risks. However, such activities may be ineffective or may not offset more than a portion of the adverse financial effect resulting from foreign currency variations.
An appreciation of the US dollar rate versus the Brazilian Real may have an adverse effect on Brazilian inflation, energy and supply chain costs and therefore may adversely impact our prices, revenues and profitability.
Table of Contents
Our products are subject to multiple regulatory requirements and constant scrutiny from government authorities in Brazil, and our inability to meet those requirements may generate losses in the future, which may cause the market price of our shares to decline.
Our facilities and products are subject to many laws and regulations in Brazil, including, among others, regulations related to the production, packaging, labelling, storage, distribution, quality, merchandise and market, and safety of food products and the health and safety of our employees.
Most of our food products are subject to registration with the Brazilian Agriculture Ministry. Changes in regulation by the Ministry may impact our production and operational costs or even create additional burdens that may not necessarily be transferred to prices and therefore may impact our revenues and profitability. Failure to comply with the regulatory requirements set out in the regulations, which includes obtaining the applicable licenses and registrations from the competent agencies, may result in penalties for the Company, including, without limitation, interdiction of the facilities and fines.
Our failure to comply with such laws and regulations could subject us to lawsuits, administrative penalties, and civil remedies, including fines, injunctions, and recalls of our products, as well as sealing off production facilities or create impediments to marketing our products. We advertise our products and could be the target of claims relating to alleged false or deceptive advertising under federal, state, and foreign laws and regulations. Further, our advertising activities are also subject to sanctions or restrictions imposed by the advertisement self-regulation body, the Conselho Nacional de Autorregulamentação Publicitária , or CONAR, which is a Brazilian non-governmental organization that self-regulates the advertising sector in Brazil.
Changes in laws or regulations that impose additional regulatory requirements on us could increase our cost of doing business or restrict our actions, causing our results of operations to be adversely affected.
Our activities are subject to environmental regulation, including obtaining and maintaining licenses and authorizations. These regulations may increase our costs, limit our operations or otherwise adversely affect us.
We are subject to various federal, state, local, and foreign environmental laws and regulations. Our failure to comply with environmental laws and regulations, including obtaining and maintaining licenses and authorizations, could subject us to lawsuits, administrative penalties, and civil remedies. We cannot guarantee that (a) our compliance with environmental laws in general, will not exceed our established liabilities or otherwise have an adverse effect on our business and results of operations; or (b) we will timely obtain or renew any such licenses required to operate. Our operations may be adversely affected by a failure to timely obtain or renew any such licenses.
In addition, we may also be subject to direct and indirect, strict and joint and several liability, being obliged to repair environmental damages, regardless of our fault. The liability of companies does not exclude individuals, offenders, principals or accessories, often times extending the liability for these acts to the members of management of these companies, who took part in decisions or omitted themselves, when they could have avoided the resulting losses. We cannot guarantee that our compliance with environmental laws in general, will not exceed our established liabilities or otherwise have an adverse effect on our business and results of operations.
Climate change and other sustainability matters could adversely affect our business.
There is growing concern that carbon dioxide and other greenhouse gases in the earth’s atmosphere may have an adverse impact on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. If such climate change has a negative effect on agricultural productivity, we may experience decreased availability and higher pricing for certain commodities that are necessary for our products. Increased frequency or severity of extreme weather could also impair our production capabilities, disrupt our supply chain, impact demand for our products, and increase our insurance and other operating costs. Increasing concern over climate change or other sustainability issues also may adversely impact demand for our products due to changes in consumer preferences or negative consumer reaction to our commitments and actions to address these issues or increase energy or supply chain costs. We may also become subject to additional legal and regulatory requirements relating to climate change or other sustainability issues, including greenhouse gas emission regulations (e.g., carbon taxes), energy policies, sustainability initiatives (e.g., single-use plastic limits), and disclosure obligations. If additional legal and regulatory requirements are enacted and are more aggressive than the sustainability measures that we are currently undertaking to monitor our emissions and our energy and other sustainability goals, or if we chose to take actions to more aggressive goals, we may experience significant increases in our costs of operations.
We are in the process of establishing goals and commitments to reduce our carbon footprint and to develop, sustain and increase our ESG programs. If we fail to achieve or establish these programs aimed toward achieving our carbon emissions reduction goals and commitments, then the resulting negative publicity could harm our reputation and adversely affect demand for our products.
Economic downturns could limit consumer demand for our products.
The willingness of consumers to purchase our products depends in part on local economic conditions. In periods of economic uncertainty, consumers may purchase more generic, private label, and other cheaper brands and may forego certain purchases altogether. In those circumstances, we could experience a reduction in sales of higher margin products or a shift in our product mix to lower margin offerings. In addition, as a result of economic conditions or competitive actions, we may be unable to raise our prices sufficiently to protect margins. Consumers may also reduce the amount of food that they consume. Any of these events could have an adverse effect on our results of operations.
Table of Contents
We have a history of net losses and may incur losses in the future
Our operations began in 2020 and throughout our history most of our free cash flow has been used to fund our operations and growth, capital expenditure investments, human resources and other expenses. As a result, we experienced losses of US$173,435 in our fiscal year ended December 31, 2021. We recorded a net profit of US$405,191 for our fiscal year ended December 31, 2022, we recorded a net loss of US$5,839,344 for our fiscal year ended December 31, 2023, we recorded a net loss of US$1,627,82 for our fiscal year ended December 31, 2024, and we recorded a net loss of US$1,092,374 for the year ended December 31, 2025. We anticipate our continued growth and expansion will require further investment, retention of cash and accrual of expenses, additional financing needs and obtaining bank lines of credit, which will adversely impact or even eliminate altogether our profitability.
We may experience higher operating costs, including increases in supplier prices and employee salaries and benefits, which could adversely affect our financial performance.
Our ability to maintain consistent quality throughout our services and products depends, in part, upon our ability to acquire fresh and quality food products, including substantial quantities of beans and flour products, and related items from reliable sources in accordance with our specifications and in sufficient quantities. We do not have long-term pricing agreements with our suppliers for our product purchases and for our purchases of certain other commodities in Brazil. The prices we acquire our products are determined by day-to-day fluctuation of commodities prices. Fluctuation of supplier prices generally results in price changes for the final consumer. If our suppliers do not perform adequately or otherwise fail to distribute supplies to our Company, we may be unable to replace them in a short period of time on acceptable terms. Any inability to so replace suppliers could increase our costs or cause product shortages at our business, which could result in a loss of customers and, consequently, decreased revenue during the time of the product shortage.
If we pay higher prices for food items or other supplies or increase compensation or benefits to our employees, we will sustain an increase in our operating costs. Many factors affect the prices paid for food and other items, including conditions affecting the markets, weather, energy and water supply, changes in demand and inflation. Factors that may affect compensation and benefits paid to our employees include changes in minimum wage, benefits included in collective bargaining agreements and changes in employee benefits laws as discussed below under “Risk Factors — Risk Relating to Our Business and Industry — We could face workplace-related lawsuits and be subject to complex social security and employment laws” .
We could face workplace-related lawsuits and be subject to complex social security and employment laws
Various federal labor laws govern our relationships with our employees and affect operating costs. Our business may be adversely affected by legal or governmental proceedings brought by or on behalf of our employees. Termination of a significant number of employees may disrupt our operations and/or cause temporary increases in our labor costs as we train new employees.
In recent years, a number of companies, including our Company, have been subject to lawsuits and other claims, including lawsuits alleging violations of federal law governing workplace and employment matters such as various forms of discrimination, wrongful termination, harassment and similar matters. A number of these lawsuits and claims against other companies have resulted in various penalties, including the payment of damages by the defendants. In addition, lawsuits by employees or on behalf of employees are common in Brazil after termination of employment and we have been subject to such lawsuits. The Company is currently exposed to a total amount of US$57,738.48 for two (2) of these lawsuits representing the approximate amount claimed by the relevant plaintiffs. Any amount granted by courts can be increased by court fees, attorneys’ fees, social security charges and a gross-up of income taxation. Insurance may not be available at all or in sufficient amounts to cover all liabilities with respect to these matters. Accordingly, we may incur substantial and expenses resulting from and lawsuits, which would increase our operating costs, decrease funds available for the development of our business and result in charges to our income statements resulting in decreased or net . Employee us create legal and financial liability and publicity that could affect us and our financial and management resources that would otherwise be used to the future performance of our operations.
Brazil has specialized courts for labor disputes, which have jurisdiction over any disputes involving a company and their employees. Brazilian labor courts are historically very biased in favor of the employees, and this usually works as an incentive for terminated employees to sue the company in labor courts.
Our Company’s workforce is currently comprised mostly of managerial roles and salesforce personnel. Our Company has limited exposure to outsourcing practices, but the ratio of primary-to-outsourced workforce may change as our Company’s growth continues and is sustained. Moreover, the structure adopted by the Company to engage employees primarily involved in sales may expose the Company to increased labor litigation risks.
Table of Contents
The Brazilian workforce market experiences a widespread lack of specialized labor. Our Company may also face certain challenges to increase its workforce due to this situation and therefore may have difficulties in delivering its growth if it suffers from the shortage of specialized employees.
Litigation concerning food quality, health, employee conduct and other issues could require us to incur additional liabilities; we have no product liability insurance.
Companies in our industry have from time to time faced lawsuits alleging that a customer suffered illness, including actions seeking damages resulting from food-borne illness and relating to lack of notices with respect to chemicals contained in food products provided by these companies. Similarly, food tampering, employee hygiene and cleanliness failures or improper employee conduct could lead to product liability or other claims. To date, we are not aware of any lawsuit asserting such a claim or any other claim regarding product safety or integrity and/or consumer claims. However, we are involved in two (2) proceedings initiated by former employees of one of our business partners, in which we are exposed to an aggregate total claimed amount of US$15,996 for the two (2) lawsuits, not including court fees, attorneys’ fees, social security charges and a gross-up of income taxation. We believe that we have been wrongfully associated with these and expect that we will not be liable to pay any amounts, although there can be no assurance that the Company is correct in such belief. See “Business — Legal Proceedings”. We do not currently maintain insurance coverage for product liability issues. We cannot you that such a lawsuit will not be filed us, and we cannot guarantee that our internal controls and training will be fully in and/or how such , if and when brought us, will affect our reputation. for products liability could be substantial and a claim for products liability could have a material effect on the Company, its results of operations and liquidity.
We are also subject to various claims arising in the ordinary course of our business, including personal injury claims, contract claims and other matters. Regardless of whether any claims against us are valid or whether we are ultimately held liable, these claims may be expensive to defend and may divert management attention and other resources from our operations and may negatively affect our financial performance. A judgment significantly in excess of our insurance coverage for any claims would materially adversely affect our results of operations and financial condition. In addition, adverse publicity resulting from any such claims may negatively impact our revenue.
We may be subject to intellectual property rights claims and validity challenges by third parties, which are extremely costly to defend, could require us to pay significant damages and could limit our ability to use certain technologies.
Third parties may assert claims of infringement of intellectual property rights or initiate invalidity proceedings challenging our licensed intellectual property, against us for which we may be liable or have an indemnification obligation. Any claim of infringement by a third party, even those without merit, could cause us to incur substantial costs defending against the claim and could distract our management from operating our business. We might not have the necessary capital to defend against any potential claims which could adversely affect our business. There can be no assurance that any proprietary intellectual property we may develop and we may file will be granted by the Brazilian Trademark and Patents Office (INPI) and/or foreign patent offices in the future.
Although third parties may offer a license to their intellectual property, the terms of any offered license may not be acceptable and the failure to obtain a license or the costs associated with any license could cause our business, financial condition and results of operations to be materially and adversely affected. In addition, some licenses may be non-exclusive, and therefore our competitors may have access to the same intellectual property licensed to us. Alternatively, we may be required to develop non-infringing intellectual property, which could require significant effort and expense and ultimately may not be successful. Any of these events could seriously harm our business financial condition and results of operations.
Our future investments to sustain our growth may impact our profitability and such growth may or may not be achieved by the Company, which may cause the market price of our shares to decline.
We intend to make significant investments in our business, including with respect to our employee base, sales and marketing, including but not limited to expenses relating to increased direct marketing efforts, development of new products, services, and features; expansion of office space, data management, data centers and other infrastructure, development of international operations and general administration, including legal, finance, and other compliance expenses related to being a public company. Moreover, in order to maintain our growth ratio and increase in operations and efficiency, a higher level of working capital will have to be employed, retained and sustained by the Company.
If the costs associated with acquiring and supporting new or larger customers materially rise in the future, including the fees we pay to third parties to advertise our products and services, our expenses may rise significantly. In addition, increases in our client base could cause us to incur losses, because costs associated with new clients are generally incurred up front, while revenue is recognized thereafter as customers utilize our services. If we are unable to generate adequate revenue growth and manage our expenses, or maintain our working capital needs, our results of operations and operating metrics may fluctuate and we may incur significant losses in the future, which could cause the market price of our shares to decline.
Table of Contents
We occasionally invest in developing products or services that we believe will improve our long-term results of operations. However, these improvements often cause us to incur significant up-front costs and may not result in the long-term benefits that we expect, which may materially and adversely affect our business. Successful implementation of our growth strategy will require significant expenditures before any substantial associated revenue is generated. We cannot assure you that our increased investment in marketing activities will actually result in corresponding revenue growth.
We have a limited operating history with financial results that may not be indicative of future performance, and our revenue growth rate is likely to slow as our business matures.
We began operations in 2020. As a result of our limited operating history, we have limited financial data that can be used to evaluate our current business, and such data may not be indicative of future performance. In particular, we have experienced periods of high revenue growth since we began selling our products and services, and we do expect to be able to maintain the same rate of revenue growth as our business matures. However, estimates of future revenue growth are subject to many risks and uncertainties and our future revenue may be materially lower than projected.
We have encountered, and expect to continue to encounter, risks and difficulties frequently experienced by growing companies, including challenges in financial forecasting accuracy, determining appropriate investments, developing new products and features, maintaining minimum cash and working capital levels, among others. Any evaluation of our business and prospects should be considered in light of our limited operating history, and the risks and uncertainties inherent in investing in early-stage companies.
We may face challenges in expanding into new geographic regions outside of Brazil.
Although currently there are no specific plans for expansion outside of Brazil, the Company may decide in the future to expand its activities to other countries, in particular to Latin America and North America (but also for other regions). The expansion to new jurisdictions may impose additional challenges, costs, regulatory demands, working capital needs and investments, and therefore can affect our revenue and profitability.
Any acquisitions, partnerships or joint ventures that we make or enter into could disrupt our business and harm our financial condition.
Acquisitions, partnerships and joint ventures are part of our growth strategy. We evaluate, and expect in the future to evaluate, potential strategic acquisitions of, and partnerships or joint ventures with, complementary businesses, services or technologies. We may not be successful in identifying viable acquisition, partnership and joint venture targets. In addition, we may not be able to successfully finance or integrate any businesses, services or technologies that we acquire or with which we form a partnership or joint venture, and we may lose customers as a result of any acquisition, partnership or joint venture. Furthermore, the integration of any acquisition, partnership or joint venture may divert management’s time and resources from our core business and disrupt our operations and impact the overall results of the Company. Certain acquisitions, partnerships and joint ventures we make may prevent us from competing for certain clients or in certain lines of business, may lead to a loss of clients and may adversely impact our minimum cash requirements and working capital needs. We may spend time and money on projects that do not increase our revenue. To the extent we pay the purchase price of any acquisition in cash, it would reduce our cash reserves, and to the extent the purchase price is paid with our shares, it could be dilutive to our shareholders. To the extent we pay the purchase price with proceeds from the incurrence of debt, it would increase our level of indebtedness and could affect our liquidity and restrict our operations. Our competitors may be willing or to pay more than us for acquisitions, which may cause us to certain acquisitions that we would otherwise desire to complete. We cannot ensure that any acquisition, partnership or joint venture we make will not have a material effect on our business, financial condition and results of operations.
We are subject to economic and political risk, the business cycles and credit risk of our clients and issuing banks and volatility in the overall level of consumer, business and government spending, which could negatively impact our business, financial condition and results of operations.
The food industry depends heavily on the overall level of consumer, business and government spending. We are exposed to general economic conditions that affect consumer confidence, consumer spending, consumer discretionary income or changes in consumer purchasing habits. A sustained deterioration in general economic conditions, including a rise in unemployment rates in Brazil, or increases in interest rates may adversely affect our financial performance by reducing the number of consumers of our products and services. A reduction in the amount of consumer spending could result in a decrease in our revenue and profits.
Our insurance policies may not be sufficient to cover all claims.
Our insurance policies may not adequately cover all risks to which we are exposed. A significant claim not covered by our insurance, in full or in part, may result in significant expenditures by us. Moreover, we may not be able to maintain insurance policies in the future at reasonable costs or on acceptable terms, which may adversely affect our business and the trading price of our shares.
Table of Contents
We are subject to costs and risks associated with increased or changing laws and regulations affecting our business, including those relating to the sale of consumer products.
We operate in a complex regulatory and legal environment that exposes us to compliance and litigation risks that could materially affect our results of operations. These laws may change, sometimes significantly, as a result of political, economic or social events, as legislators may be subject to political and social influence/unrest. Some of the federal, state or local laws and regulations in Brazil that affect us include: those relating to consumer products, product liability or consumer protection; those relating to the manner in which we advertise, market or sell products; labor and employment laws, including wage and hour laws; tax or social security laws or interpretations thereof; bank secrecy laws, data protection and privacy laws and regulations; and securities and exchange laws and regulations. There can be no guarantee that we will have sufficient financial resources to comply with any new regulations or successfully compete in the context of a shifting regulatory environment.
These laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible they will be interpreted and applied in ways that will materially and adversely affect our business. Any failure, real or perceived, by us to comply with our posted privacy policies or with any regulatory requirements or orders or other local, state, federal, or international privacy or consumer protection-related laws and regulations could cause sellers or their customers to reduce their use of our products and services and could materially and adversely affect our business.
We depend on our information technology systems, and any failure of these systems could adversely affect our business and subject us to risks associated with non-compliance with the applicable data protection laws.
We are subject to the Brazilian Internet Law (Law No. 12,965/2014) and to Law No. 13,709/18 (“Brazilian Data Protection Law” or “LGPD”) which lays down rules relating to the processing of personal data in Brazil. Failure by us to comply with the LGPD and any additional privacy laws or regulations enacted or approved in Brazil or in other jurisdictions in which we operate could adversely affect our business, financial condition or results. The LGPD regulates practices related to the processing of personal data and establishes the principles to be observed by all sectors of the economy in the processing of personal data, regardless of how personal data is collected (electronic or physical environment). Failure to comply with any provisions provided for in that law may expose us to the following risks: (i) legal proceedings or administrative procedures filed by competent, individual or collective bodies preferring damages resulted from violations, based not only on the LGPD, but on sparse and sectoral legislation on data protection still in force; (ii) the application of penalties provided for in LGPD; and (iii) the application of provided for in sparse legislation, such as the Consumer Protection Code and Internet Law, by some consumer protection agencies, since they have already applied in the past, especially in cases of security that result in access to personal data. If we to comply with its obligations under the LGPD, we may be liable for individual or collective it may cause and may be subject to the administrative sanctions of , obligation to the , temporary blocking and/or exclusion of personal data and fine of up to 2% (two percent) of the company, group or conglomerate in Brazil in its last fiscal year, excluding taxes, up to the total amount of R$50 million for .
The Company currently handles limited amounts of customers’ personal data, and the information that we have access to is mostly public and available in general to other parties. However, the Company is yet to establish policies for data processing to fully comply with the requirements of the LGPD.
The servers of the Company, in which such information is stored, may be subject to attacks and the Company is implementing safeguards to ensure that no third-party information or management/Company proprietary information is exposed.
We are subject to regulatory activity and antitrust litigation under competition laws.
We are subject to scrutiny from governmental agencies under competition laws in Brazil. Brazilian legislation also provides private rights of action for competitors or consumers to assert claims of anticompetitive conduct. Other companies or governmental agencies may allege that our actions violate antitrust or competition laws, or otherwise constitute unfair competition. Contractual agreements with buyers, sellers, or other companies could give rise to regulatory action or antitrust investigations or litigation. Also, our trade market practices, albeit within market standards, could give rise to regulatory action or antitrust investigations or litigation. Some regulators may perceive our business to have such significant market power such that otherwise uncontroversial business practices could be deemed anticompetitive. Any such and , even if they are , may be expensive to , involve publicity and substantial of management time and effort, and could result in significant judgments us.
Changes in tax laws, tax incentives, the termination of existing tax benefits or differing interpretations of tax laws may adversely affect our results of operations.
Brazilian tax and social security are highly complex and subject to various interpretation, especially considering that taxation is imposed at the Federal, State and Municipal levels, in which city the Company operates.
Table of Contents
Changes in tax laws, regulations, related interpretations and tax accounting standards in Brazil, may result in a higher overall tax rate on our earnings and revenues, assets or profits, which may significantly reduce our net profits and cash flows. For example, in 2015 the Brazilian government increased the rate of PIS (social integration program)/COFINS (contribution for the financing of social security) tax (which is a tax levied on revenues) from 0% to approximately 4% on financial income realized by Brazilian companies that are taxed under the non-cumulative regime. Most of our products are subject to tax exemptions and therefore to an overall tax rate of 0%. However, whenever we provide logistics services, such services (and the resulting revenues and profits) are subject to regular taxation applicable under Brazilian law.
In addition, our results of operations and financial condition may decline if certain tax incentives are cancelled by the Brazilian government and/or if the Brazilian government creates additional taxes or charges. If the taxes applicable to our business increase or any tax benefits are revoked and we cannot alter our cost/pricing structures to pass our tax increases on to customers through price increase in our products, our financial condition, results of operations and cash flows could be seriously harmed.
As the Company operates in several states in Brazil, we are subject to the State Tax on the Circulation of Merchandise (ICMS), and each state has its own legislation, regulations, benefits and reliefs, that may be applicable to us and/or to our competitors. If a competitor is entitled to a certain tax benefit that is not similarly extended to us, we may be less competitive and lose market share, as our prices or profitability may be hindered. See “Risk Factors — Risks Related to Our Business and Industry — We may be unable to maintain our profit margins in the face of loss of our tax benefits granted by Brazilian government ” on page 8 for a discussion of the risks pertaining to the tax benefits that the Company is entitled to.
On January 16, 2025, the Brazilian government passed Supplementary Law No. 214, which regulates the consumer tax reform bill (PEC 45/2019) passed by the Brazilian national congress (“Brazilian Congress”) on December 15, 2023, to simplify the Brazilian tax framework. Supplementary Law No. 214/2025 creates a dual value-added tax, or VAT, system, which includes the State Tax on Goods and Services ( Imposto sobre Bens e Serviços , or IBS) and the federal Contribution on Goods and Services ( Contribuição sobre Bens e Serviços , or CBS), replacing five taxes, including the ICMS, the federal Social Integration Program ( Programa de Integração Social ) or PIS, and Contribution for Social Security Funding ( Contribuição para o Financiamento da Seguridade Social , or COFINS) taxes. Tax collection on the new VAT taxes will be a tax on consumption (rather than a tax on production, as in the prior system). Under Supplementary Law No. 214/2025, the new dual VAT system will be implemented within a 7-year transition period beginning with a testing period in 2026 and ending with the full adoption of the new system in 2033. Different IBS and CBS rates may apply to specific goods and services listed in the Brazilian Constitution. Although it is still not possible to calculate the actual IBS and CBS rates, Supplementary Law No. 214/2025 sets forth that if the sum of all such rates reaches an amount that is greater than 26.5%, the government shall discuss a new bill of law to reduce such rates so that they are equal to or lower than 26.5%.
Supplementary Law No. 214/2025 also sets forth a new tax ( Imposto Seletivo , or IS) to discourage the consumption of goods and services that are harmful to human health and the environment. In the food industry, as of the date of this Annual Report on Form 10-K, only drinks with added sugar are subject to the IS, but future regulatory changes in taxation of food and beverages may be put in place. For example, in 2023 Colombia introduced a tax on products with added sugars, sodium, and saturated fats that exceed specific thresholds, beginning at 10% and set to increase to 15% in 2024 and 20% in 2025. Other tax regimes, such as the research and development tax incentive program ( Lei do Bem ) and the deduction of interest on shareholders’ equity, may be revoked to increase the government’s revenues in light of a possible reduction in the income tax rate.
The effects of the tax reform measures and any other changes that could result from the enactment of new and additional tax regulations have not been, and cannot be, quantified yet. We cannot guarantee that the IBS and CBS rates will not be higher than the levies currently applied to our business, that the Brazilian government will not impose penalty taxes to certain of our raw materials, or that the new tax regulations to be passed by the Brazilian Congress will not have a material adverse effect on our business, financial condition, results of operation and prospects.
Distribution of dividends is currently exempted from income tax in Brazil, but there are several legislative initiatives to impose taxation on dividends. If the Brazilian Congress approves legislation to that effect, the amount of revenues received by us from our Brazilian subsidiaries will be reduced.
Furthermore, we are subject to tax laws and regulations that may be interpreted differently by tax authorities and us. The application of indirect taxes, such as sales and use tax, value-added tax, or VAT, provincial taxes, goods and services tax, business tax and gross receipt tax, to businesses like ours is a complex and evolving issue. Significant judgment is required to evaluate applicable tax obligations. In many cases, the ultimate tax determination is uncertain because it is not clear how existing statutes apply to our business. One or more states, or Municipalities, the federal government or other countries may seek to challenge the taxation or procedures applied to our transactions imposing the charge of taxes or additional reporting, record-keeping or indirect tax collection obligations on businesses like ours. New taxes could also require us to incur substantial costs to capture data and collect and remit taxes. If such obligations were imposed, the additional costs associated with tax collection, remittance and audit requirements could have a material adverse effect on our business and financial results.
Table of Contents
The costs and effects of pending and future litigation, investigations or similar matters, or adverse facts and developments related thereto, could materially affect our business, financial position and results of operations.
We are, and may be in the future, party to legal, arbitration and administrative investigations, inspections and proceedings arising in the ordinary course of our business or from extraordinary corporate, tax or regulatory events, involving our clients, suppliers, customers, as well as competition, government agencies, tax and environmental authorities, particularly with respect to civil, tax and labor claims. Litigation in Brazil may be very time-consuming and cost inefficient. Our insurance indemnities may not cover all claims that may be asserted against us, and any claims asserted against us, regardless of merit or eventual outcome, may harm our reputation. Furthermore, there is no guarantee that we will be successful in defending ourselves in pending or future litigation or similar matters under various laws. Should the ultimate judgments or settlements in any pending or future or significantly exceed our indemnity rights, they could have a material effect on our business, financial condition and results of operations and the price of our shares. Further, even if we address issues raised by an inspection conducted by an agency or our case in an administrative proceeding or court action, we may have to set aside significant financial and management resources to settle issues raised by such proceedings or to those lawsuits or , which could affect our business.
If we lose key personnel our business, financial condition and results of operations may be adversely affected.
We are dependent upon the ability and experience of a number of key personnel who have substantial experience with our operations and the markets in which we carry our business. Many of our key personnel were recruited by us specifically due to their industry experience. It is possible that the loss of the services of one or a combination of our senior executives or key managers, including our chief executive officer, could have a material adverse effect on our business, financial condition and results of operations.
Our operations may be adversely affected by a failure to timely obtain or renew any licenses required to operate our hubs.
The operation of the hubs and properties we occupy or may come to occupy are subject to certain license and certification requirements under applicable law, including operation and use licenses ( alvará de licença de uso e funcionamento ) from the municipalities in which we operate and certificates of inspection from applicable local fire departments and health and sanitation authorities. Our operations may be adversely affected by a failure to timely obtain or renew any such licenses required to operate our hubs. In addition, we cannot assure you that we will obtain such licenses in a timely manner for the opening of new hubs.
If we are unable to renew or obtain such licenses, we may be subject to certain penalties, which include the imposition of fines and the suspension or termination of our operations at the respective hub. The imposition of such penalties, or, in extreme scenarios, the sealing off of the premises by relevant public authorities pending compliance with all the requirements demanded by the municipalities and fire departments, may adversely affect our operations and our ability to generate revenues at the relevant location.
We are subject to anti-corruption, anti-bribery and anti-money laundering laws and regulations.
We operate in jurisdictions that have a high risk for corruption and we are subject to anti-corruption, anti-bribery and anti-money laundering laws and regulations, including the Brazilian Federal Law No. 12,846/2013, or the Clean Company Act, and the United States Foreign Corrupt Practices Act of 1977, as amended, or the FCPA. Both the Clean Company Act and the FCPA impose liability against companies who engage in bribery of government officials, either directly or through intermediaries. Moreover, Brazil is a signatory to the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of the Organization of Economic Cooperation and Development (OECD). We are yet to implement a comprehensive compliance program that is designed to manage the risks of doing business in light of these new and existing legal and regulatory requirements. Violations of the anti-corruption, anti-bribery and anti-money laws and regulations could result in liability, administrative and civil lawsuits, significant and , of significant assets, as well as reputational .
Regulators may increase enforcement of these obligations, which may require us to make adjustments to our compliance program, including the procedures we use to verify the identity of our customers and to monitor our transactions. Costs associated with fines or enforcement actions, changes in compliance requirements, or limitations on our ability to grow could harm our business, and any new requirements or changes to existing requirements could impose significant costs.
Any determination that we have violated the anti-corruption laws mentioned above could subject us to, among other things, civil and criminal penalties or material fines, profit disgorgement, injunctions on future conduct, securities litigation and a general loss of investor confidence, any one of which could adversely affect our business prospects, financial position or the market value of our shares.
Table of Contents
Requirements associated with being a public company in the United States will require significant Company resources and management attention.
Upon completion of our initial public offering, we expect to incur costs associated with corporate governance requirements that will become applicable to us as a public company, including rules and regulations of the SEC, under the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the Exchange Act, as well as the rules of the Nasdaq. These rules and regulations are expected to significantly increase our accounting, legal and financial compliance costs and make some activities more time-consuming. We also expect these rules and regulations to make it more expensive for us to obtain and maintain directors’ and officers’ liability insurance. As a result, it may be more difficult for us to attract and retain qualified people to serve on our board of directors or as executive officers. Accordingly, increases in costs incurred as a result of becoming a publicly traded company may materially and adversely affect our business, financial condition and results of operations.
If we fail to establish and maintain effective internal controls, our ability to produce accurate financial statements and other disclosures on a timely basis could be impaired.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is accumulated and communicated to our principal executive and financial officers.
We are also continuing to expand our internal controls over financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs, external audits and significant management oversight. If any of these new or improved controls and systems do not perform as expected, we may experience material weaknesses in our controls. Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations or cause us to fail to meet our reporting obligations and may result in a of our financial statements for prior periods. Any to implement and maintain internal control over financial reporting also could affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
Our management team has identified no material weaknesses in our disclosure controls and procedures. Despite no material weaknesses being identified, and while the Company’s management team makes continuous efforts to reduce the likelihood of occurrence of any material weaknesses in the future, there can be no assurance that it will be successful. To that end, the Company has invested in (i) advanced systems and software controls; and (ii) adding and expanding its teams with qualified and experienced personnel, to ensure security, information speed, information quality and governance. Recent investments have consisted of the upgrade of our ERP system (SAP was implemented in the first quarter of 2023) and new warehouse management system (WMS) and transportation management systems (TMS) were implemented in the third quarter of 2024.
We are dependent on retail partners for a significant portion of our sales.
We derive significant revenue from our network of international retail partners, consisting of large retail traders, supermarkets and other retailers, among others. A decision by any of our major retail partners, whether motivated by marketing strategy, competitive conditions, financial difficulties or otherwise, to decrease significantly the amount of merchandise purchased from us, or to change their manner of doing business with us, could substantially reduce our revenue and have a material adverse effect on our profitability. In addition, store closings by our retail partners shrink the number of doors carrying our products, while the remaining stores may purchase a smaller amount of our products and/or may reduce the retail floor space designated for our products. If any disputes with our retail partners arose, if we were to lose any of our key retail partners or if any of our key retail partners consolidate and/or gain greater market power, our business, results of operations and financial condition may be materially adversely affected. In addition, we may be similarly impacted if any of our key retail partners experience any operational or generate less traffic.
Certain of our retail partners may from time to time experience financial difficulties, including bankruptcy or insolvency. If our retail partners suffer significant financial difficulty, they may reduce their orders from us or stop purchasing from us and/or be unable to pay the amounts due to us timely or at all, which could have a material adverse effect on our ability to collect on receivables and our results of operations. It is possible that retail partners may contest their contractual obligations to us under bankruptcy laws or otherwise. Further, we may have to negotiate significant discounts and/or extended financing terms with these retail partners in such a situation. If we are unable to collect upon our accounts receivable as they come due in an efficient and timely manner, our business, results of operations and financial condition may be materially adversely affected. In addition, product sales are dependent in part on high-quality merchandising and an appealing retail environment to attract consumers, which requires continuing investments by retailers. Retailers that experience financial may to make such investments or them, resulting in lower sales and orders for our products. Consolidations among our retail partners would concentrate our credit risk with a relatively small number of retailers, and, if any of these retailers were to experience a of liquidity or consumer behavior shifts away from traditional retail, it would increase the risk that their outstanding payables to us may not be paid. In addition, increasing market share concentration among one or a few retailers in a particular region increases the risk that if any one of them substantially reduces their purchases of our products, we may be to find a sufficient number of other retail outlets for our products to sustain the same level of sales and revenue.
Table of Contents
We are dependent on certain third-party suppliers and contract manufacturers.
We purchase ingredients, packaging and other materials from third-party suppliers and, in certain cases, we engage contract manufacturers to produce and/or package our products. We purchase raw materials from manufacturers and distributors globally. As is customary in our industry, we generally do not have long-term contracts or even written agreements with our suppliers. Instead, we often enter into short term contracts (and/or one-time deals) for raw materials at fixed prices to provide us with time to address price increases and mitigate impact on our margins and in other cases we may buy at spot prices. These one-time deals for purchases, are purchases occurring through a broker or through our purchase team acquiring the product directly from a farmer. These one-time deal purchases are documented by purchase orders generated within our systems and by invoices issued by the vendor. We may not be able to negotiate such contracts or deals on acceptable terms, if at all. For our business to be successful, our suppliers and contract manufacturers must provide us with quality products in substantial quantities, in compliance with regulatory requirements, at acceptable costs and on a timely basis. Our ability to obtain a sufficient selection or volume of merchandise on a timely basis at competitive prices could suffer as a result of any deterioration or change in our supplier or contract manufacturer relationships, quality, manufacturing or other regulatory issues, or events that affect our suppliers or contract manufacturers.
There can be no assurance we will be able to detect, prevent or fix all defects that may affect raw materials from our suppliers or products or components of products manufactured by our contract manufacturers. Failure to detect, prevent or fix defects, or the occurrence of real or perceived quality or safety problems or material defects in such raw materials, components of products or finished products could result in a variety of consequences, including a greater number of product returns than expected from consumers and our retail partners, litigation, class-actions, complaints, regulatory investigations and enforcement actions, product recalls and withdrawals and credit, warranty or other claims, among others, which could expose us to liability and harm our results of operations and financial condition. Such could impact consumer confidence in our products and our brand image, which is to maintaining and expanding our business.
Material increases in the price of, or availability constraints on or interruptions in the supply of, raw materials and/or disruption in the operations of our suppliers or contract manufacturers for any reason, such as changes in economic and political conditions, tariffs, trade disputes, regulatory requirements, import restrictions, loss of certifications, power interruptions, transportation delays, shipment issues, quality, manufacturing or other regulatory issues, natural or man-made disasters, inclement weather conditions, war, acts of terrorism, outbreak of viruses, widespread illness, infectious diseases, contagions and the occurrence of unforeseen epidemics (including the COVID-19 pandemic and its potential impact on our financial results) and other unforeseen or catastrophic events, could have a material adverse effect on our business, results of operations, financial condition and cash flows. Also, currency fluctuations, including the decline in the value of the Brazilian Real, could result in higher costs for raw materials purchased abroad. Our suppliers or contract manufacturers may be to reduce or their production, undertake corrective and preventive actions, down their operations or file for due to financial , or associated with their business. Our suppliers may consolidate, increasing their market power. Our business is dependent upon the ability of our suppliers and contract manufacturers to locate, train, employ and retain adequate personnel. Our suppliers and contract manufacturers may increase their pricing if their raw materials become more expensive, and may pass the increase in sourcing costs to us through price increases, thereby impacting our margins. Material changes in the pricing practices of our suppliers and contract manufacturers could impact our . Additionally, our business could be affected if any of these third parties to comply with governmental regulations applicable to the safety, quality or manufacturing of our products and/or government authorities impose certain restrictions or additional requirements onto their business. If we experience significant increases in demand for our products, we and our suppliers and contract manufacturers may not be to obtain in a timely manner the raw materials, equipment or packaging materials required to manufacture our products and allocate sufficient capacity to us in order to meet our requirements, fill our orders in a timely manner or meet our safety and quality standards.
If any of our suppliers or contract manufacturers fail to make timely shipments, do not meet our safety and quality standards or otherwise fail to deliver us product in accordance with our plans, there could be a material adverse effect on our results of operations. If our significant suppliers or contract manufacturers were to fail to meet our supply, safety or quality requirements, sever their relationship with us or significantly alter the terms of our relationship, including due to changes in applicable trade policies, we may not be able to obtain replacement materials or products in a timely manner or on favorable terms or at all. Even if we are able to expand existing or find new manufacturing or sources of materials, we may encounter delays in production and added costs as a result of the time it takes to train suppliers in our methods, products, quality control standards and labor, health and safety standards. The occurrence of one or more of these events could impact our ability to get products to our consumers and retail partners, result in to our operations, increase our costs and decrease our .
Table of Contents
In addition, regulatory requirements could pose barriers to the manufacture of our products. In general terms, our products are required to be manufactured in compliance with the regulations of the Brazilian Ministry of Agriculture, the local municipalities and fire departments, Federal, state or local environmental authorities, sanitary authorities and the Brazilian Consumer Law (Brazilian Federal Law no. 8,078), among others. As a result, the facilities used by us or any of our current or future third-party manufacturers must be compliant with such regulations. In addition, the negligent actions of our third-party manufacturers that result in environmental damage may expose us to the risk of joint and several liability to remediate such environmental damages caused exclusively by third parties directly related to our activities. In that case, we could adversely affected. If our third-party manufacturers cannot successfully manufacture material, components, and products that conform to our specifications and the strict regulatory requirements of the above mentioned authorities and/or any applicable foreign regulatory authority, our products may be deemed , and we could face or enforcement actions. If we need to find alternative manufacturing facilities, we could be subject to in supply, which could impact our sales.
We are subject to third-party transportation and logistics risks, and we rely on a limited number of available third-party suppliers to deliver our products.
We depend on fast and efficient transportation and logistics services to, among other things, deliver and distribute our products. Any prolonged disruption of these services may have a material adverse impact on our business, financial condition and results of operations. For example, on May 21, 2018, a national truckers’ strike commenced in Brazil regarding increases in fuel prices. The strike materially disrupted the supply chain of various industries across the country. There can be no assurance that the truckers will not seek to engage in any future strikes if, for instance, there is a steep rise of fuel prices and the Brazilian federal government or any other party involved is unable to meet the demands of the truckers in a satisfactory manner. Any such strike could adversely affect our supply chain or the operation of our production facilities. In addition, a significant increase in fuel prices and transportation service rates as well as any other reduction in the reliability or availability of transportation or logistics services, including as a result of, among other things, flooding, warehouse fires, global shipping container , or labor strikes, could affect our ability to our supply chain requirements and deliver our products to our customers in a commercially viable manner. Any such to the transportation or logistics services that we depend on could have a material impact on our results of operations and financial condition.
On June 30, 2023, the Brazilian Federal Supreme Court, or STF, rendered null and void certain parts of Law No. 13,103/2015, or the Truck Driver’s Law, relating to working hours and daily and weekly resting periods. This decision has increased truck drivers’ hiring costs and as a result it may cause a raise in freight costs, which will require additional fleet to support our operations and have an adverse impact in transportation productivity and in our operating results.
Our holding company structure makes us dependent on the operations of our subsidiaries.
Our material assets are our direct and indirect equity interests in our subsidiaries. We are, therefore, dependent upon payments, dividends and distributions from our subsidiaries for funds to pay our holding company’s operating and other expenses and to pay future cash dividends or distributions, if any, to holders of our shares, and we may have tax costs in connection with any dividend or distribution. Furthermore, exchange rate fluctuation will affect the U.S. dollar value of any distributions our subsidiaries make with respect to our equity interests in those subsidiaries.
Dividend distribution out of Brazilian companies is currently exempted from income tax in Brazil, and new legislation may come to terminate such exemption.
US tax rules may impose certain restrictions or additional burdens on taxable gains and income accrued by our foreign subsidiaries Boni Logistica Ltda. and BR Brands S.A. (formerly BR Brands Ltda.).
We may not be able to secure financing on favorable terms, or at all, to meet our future capital needs.
We have funded our operations since inception primarily through equity financing, bank credit facilities, and financing arrangements. We do not know when or if our operations will generate sufficient cash to fund our ongoing operations. In the future, we may require additional capital to respond to business opportunities, refinancing needs, challenges, acquisitions, or unforeseen circumstances or contingent or materialized liabilities and may decide to engage in equity or debt financings or enter into credit facilities for other reasons, and we may not be able to secure any such additional debt or equity financing or refinancing on favorable terms, in a timely manner, or at all. Any debt financing obtained by us in the future could also include restrictive covenants relating to our capital-raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. Our future credit facilities will likely contain restrictive covenants, including customary limitations on the incurrence of certain indebtedness and liens. Our ability to comply with these covenants, if any, may be affected by events beyond our control, and of these covenants could result in a under our credit facilities and any future financing agreements into which we may enter. If not waived, could cause our outstanding indebtedness under our credit facilities and any future financing agreements that we may enter into under these terms to become immediately due and payable. If we are to obtain adequate financing or financing on terms to us when we require it, our ability to continue to grow or support our business and to respond to business could be significantly limited.
Table of Contents
As a general rule, in our operations we have to pay our suppliers within 7 days after delivery of our products and we receive payment from our clients within 65 days after we sell our products. As a result, we have significant working capital needs that we may or may not sustain throughout any given fiscal year. Moreover, these needs may be increased in case suppliers reduce their payment deadlines or if customers increase theirs.
Implementing our growth strategy, including new investment products and business initiatives, may be unsuccessful.
We may be subject to a number of risks and uncertainties associated with our growth strategy, including the risk that new business initiatives will not contribute towards achieving our objectives or that we will not execute such new initiatives successfully. New initiatives may also be difficult to launch, for instance where we do not have a proven track record within the area of the new initiative, or may not reach the set goals and expectations following launch. New brands may not be well perceived by consumers. Given our diverse offering of products and services, these initiatives could increase our costs and expose us to new market risks and legal and regulatory requirements and could expose us to greater reputation and litigation risk. Implementing our growth strategy may also entail significant difficulties and costs, including the logistical and overhead costs of opening and expanding offices, the cost of recruiting, training and retaining a higher number of investment advisory professionals and higher costs arising from exposure to additional jurisdictions (including the laws, rules and regulations thereof) and activities. New initiatives and expanding our business, including to open new offices or develop new product offerings, could also significant time and attention of our senior management in the development of such new initiatives to the of our existing business. Furthermore, we may be directly to new business risks or be to exposure to existing risks if business initiatives are financed with our own capital.
Misconduct of our employees, suppliers, consultants or subcontractors could harm us by impairing our ability to attract and retain clients and subjecting us to significant legal liability and reputational harm.
Our employees, suppliers, consultants and subcontractors could engage in misconduct that adversely affects our business and reputation. We are subject to a number of obligations and standards arising from our asset management business and our authority over the assets managed by our asset management business. The violation of these obligations and standards by any of our employees, suppliers, consultants and subcontractors would adversely affect our clients and us. If our employees, consultants and subcontractors were to improperly use or disclose confidential information, we could suffer serious harm to our reputation, financial position and current and future business relationships. Detecting or deterring employee misconduct is not always possible, and the extensive precautions we take to detect and prevent this activity may not be effective in all cases. If one of our employees, consultants and subcontractors were to engage in or were to be of such , our business and our reputation could be affected.
Risks Related to Doing Business in Brazil
The Brazilian federal government has exercised, and continues to exercise, significant influence over the Brazilian economy. This involvement, as well as Brazil’s political and economic conditions, could harm us and the price of our shares.
The Brazilian federal government frequently exercises significant influence over the Brazilian economy and occasionally makes significant changes in policy and regulations. The Brazilian government’s actions to control inflation, foster GDP growth and other policies and regulations have often involved, among other measures, increases or decreases in interest rates, changes in fiscal policies, wage and price controls, foreign exchange rate controls, blocking access to bank accounts, currency devaluations, capital controls and import restrictions. We have no control over and cannot predict what measures or policies the Brazilian government may take in the future. We and the market price of our securities may be harmed by changes in Brazilian government policies, as well as general economic factors, including, without limitation:
growth or downturn of the Brazilian economy;
interest rates and monetary policies;
exchange rates and currency fluctuations;
inflation;
liquidity in Brazilian financial and capital market;
import and export controls;
exchange controls and restrictions on remittances abroad;
modifications to laws and regulations according to political, social and economic interests;
fiscal policy and changes in tax laws;
economic, political and social instability;
labor and social security regulations;
energy and water shortages and rationing; and
other political, diplomatic, social and economic developments in or affecting Brazil.
Table of Contents
Uncertainty over whether the Brazilian federal government will implement changes in policy or regulation affecting these or other factors in the future may affect economic performance and contribute to economic uncertainty in Brazil, which may have an adverse effect on us and our shares.
Political instability and economic uncertainty in Brazil may adversely affect us.
Brazil’s political environment has historically affected, and continues to affect, the performance of the country’s economy and, consequently, the confidence of investors and the general public. As a result, historically, a political crisis may cause an economic deceleration and heightened volatility in the securities issued by companies with operations in Brazil.
The Brazilian markets experienced an increase in volatility due to the uncertainties arising from several ongoing investigations into money laundering and corruption charges conducted by the Brazilian Federal Police and the Federal Public Prosecutor’s Office. These investigations have had a negative impact on the country’s economy and political environment. We have no control over and cannot predict whether such investigations or allegations will lead to further political and economic instability or whether new allegations against government officials and/or executives of private companies will arise in the future, adversely affecting us. In recent years, the Brazilian political environment has experienced intense instability as a result of, among other factors, successive significant corruption , political and institutional among the branches of government, all of which have affected the Brazilian economy.
Furthermore, any difficulty by the federal government in reaching a majority in the national congress could result in impasse in Congress, political unrest and massive demonstrations and/or strikes that could adversely affect our operations. Uncertainties regarding the implementation, by the current government, of changes relating to monetary, fiscal and social security policies, as well as the relevant legislation, may contribute to economic instability.
The result of the presidential election, with a change of Federal Government from January 2023, as well as the elections for members of the Legislative branch, causes uncertainty in relation to the monetary and fiscal policies of the new government of Luiz Inácio Lula da Silva, which may differ significantly from those adopted by the previous government.
In addition, the Minister of Economy, Mr. Fernando Haddad, has a critical view on tax incentives to certain economic sectors and had suggested cutting some of these incentives. In November 2024, responding to increasing pressures on the government to reduce its spending, Minister Haddad announced a package of policies including the government’s intention to prohibit the granting, increase or extension of tax incentives whenever the federal government records a primary deficit. This package was, however, seen as insufficient by the market and as a result the government is under current pressure to adopt additional measures to cut its spendings and increase revenue, which will likely impact the productive sector. We cannot guarantee that these or similar policies will not have a negative impact in our business in the future. In 2025, we expect an increase in tax collection and in the medium term an increase in government spending.
Political and economic uncertainty and any new policies or changes to current policies could have a material adverse effect on our business, results of operations, financial condition and prospects. Uncertainty as to whether the Brazilian government will implement significant reforms in public policy in the future may contribute to economic uncertainty in Brazil and to heightened volatility in the Brazilian markets and the securities issued by Brazilian companies. These factors may be further aggravated by the government’s need to deliver on its campaign promises and to create political alliances in order to strengthen its position in the upcoming 2026 elections, which we expect to be as polarized as the 2022 elections. As a result, there may be high volatility in the domestic financial markets in the short to medium term, and economic recovery in the long term may be hindered. Accordingly, improvements in the labor market and income growth may be limited, which could have an adverse effect on our operations and financial results. political and economic conditions in Brazil may increase production and supply chain costs and affect our business, results of operations and financial condition.
Inflation and certain measures by the Brazilian government to curb inflation may adversely affect us.
Brazil has historically faced high rates of inflation. Such inflation added to certain measures taken by the Brazilian government in an attempt to curb inflation have, historically, adversely affected the Brazilian economy.
In accordance to the National Consumer Price Index ( Índice Nacional de Preços ao Consumidor Amplo — IPCA), which is published by the Instituto Brasileiro de Geografia e Estatistica (Brazilian Institute of Geography and Statistics, IBGE), Brazilian inflation rates were 4.26%, 4.83%, 4,62%, 5.79%, 10.06%, and 4.52% in 2025, 2024, 2023, 2022, 2021 and 2020, respectively.
Table of Contents
In an attempt to curb the inflation, Brazil’s government has historically taken certain intervening measures and policies, which include the maintenance of a restrictive monetary policy with high interest rates that restricted credit availability and reduced economic growth, causing volatility in interest rates, and may introduce policies that could harm our business and the price of our shares.
In 2021, the Brazilian Central Bank ( Banco Central do Brasil , “BACEN”) began increasing the country’s base interest rates in an attempt to curb increasing inflation rates due to, among other factors, the COVID-19 pandemic. The Company sells products with payment terms of up to 65 days after delivery to our customers. As a result, the cost of capital to finance our operations and working capital has become more costly to the Company. To avoid leveraging for operating cash flow with high interest rates using Brazilian finance institutions, the Company has decided to shift its financing needs to U.S. finance institutions, to continue its expansion plan and mitigate the high cost of capital in Brazil.
BACEN’s monetary policy decisions, particularly the adjustments to the Brazilian basic interest rate (“Selic rate”), have a direct effect on our borrowing costs and working capital. In May 2024, BACEN reduced the Selic rate to 10.50%, from a 13.25% interest rate set in August 2023, increasing market liquidity and alleviating the cost of our debts and working capital. Our borrowing and sale of receivables costs increased in 2023 because of high inflation and high interest rates, adversely affecting cash generation and causing a negative impact on our results of operations for 2023. Brazil’s economic scenario coupled with government incentives to accelerate economic growth and job creation have consequently increased inflation. In order to address inflation, the government raised the Selic rate to 12.25% in December 2024. During the 2025 fiscal year, BACEN made a number of increases in the Selic rate, in an effort to contain the rise in the price of domestic products, with its most recent Selic rate increase to 15.00% occurring in June 2025. We cannot accurately forecast whether inflation levels will decrease and that the Selic rate will follow a downward trend. We are able to pass on part of the increased cost of working capital to our customers through our product pricing strategy. Thus, an increase of the Selic rate would adversely affect our financial results as the financial cost directly affects our working capital, reducing our cash generation capacity and impacting our financial condition.
If Brazil experiences high inflation and interest rates in the future, we may not be able to adjust the prices we charge our customers in order to offset the effects of inflation on our cost structure, which could increase our costs and reduce our net and operating margins.
Exchange rate instability may have adverse effects on the Brazilian economy, and, as result, us.
The Brazilian currency (Brazilian Real ) has been historically volatile and has suffered significant depreciation over the past three decades in relation to U.S. dollar and other foreign currencies. Since 1999, Brazil government adopted, with support of the Central Bank, measures that allowed the Brazilian Real/U.S dollar exchange rate to float freely.
During this period, the Brazilian government has implemented a number of economic plans and exchange rate policies, including sudden devaluations, periodic mini-devaluations (during which the frequency of adjustments has ranged from daily to monthly), exchange controls, dual exchange rate markets and a floating exchange rate system. We cannot assure you these measures will not be taken by the Brazilian government in the future or that we will not be adversely affected by a depreciation or appreciation of the Brazilian Real against the U.S. dollar and other currencies.
The variation of the Brazilian Real against U.S dollar during the past three years corresponds:
In 2023, the Brazilian Real appreciated by approximately 10% against the U.S. dollar and on Decembr 29, 2023, the Brazilian Real/U.S. dollar exchange rate was R$4.8521 per US$1.00.
In 2024, the Brazilian Real depreciated by approximately 27% against the U.S. dollar and on December 31, 2024, the Brazilian Real/U.S. dollar exchange rate was R$6.1840 per US$1.00.
(iii)
In 2025, the Brazilian Real appreciated by approximately 11% against the U.S. dollar and on December 31, 2025, the Brazilian Real/U.S. dollar exchange rate was R$5.4770 per US$1.00.
We cannot assure you that the Brazilian Real will not significantly appreciate or depreciate in relation to the U.S. dollar.
Depreciation of the Brazilian Real may create additional inflationary pressures in Brazil and cause increases in interest rates, which may negatively affect the overall Brazilian economy and, consequently, us, due to decreased consumption and increased costs. We have no control over and cannot predict the Brazilian foreign exchange policy. We may be adversely affected by changes in foreign exchange policies.
Table of Contents
In addition, any depreciation of the Brazilian Real against the U.S. dollar would adversely affect the U.S. dollar value of our revenues and any distributions and dividends we make with respect to our shares, which will be made by our subsidiaries in reais .
On the other hand, an appreciation of the Brazilian Real relative to the U.S. dollar and other foreign currencies may deteriorate the Brazilian foreign exchange current accounts. We and certain of our suppliers purchase goods and services from countries outside of Brazil, and thus changes in the value of the U.S. dollar compared to other currencies may affect the costs of goods and services that we purchase.
Depending on the circumstances, either devaluation or appreciation of the Brazilian Real relative to the U.S. dollar and other foreign currencies could restrict the growth of the Brazilian economy, as well as our business, results of operations and profitability.
Risks related to the global economy may affect the perception of risks in other countries, particularly in the United States, China, Europe, Middle East and emerging markets, adversely affecting the Brazilian economy and the market price of Brazilian securities, including ours.
The market value of securities of Brazilian companies or companies with substantial operations in Brazil is affected to varying degrees by geopolitical, economic and market conditions in other countries, including the United States, China, European countries, the Middle East and other Latin American and emerging market countries. Although economic conditions in the United States and European countries may differ significantly from economic conditions in Brazil, investors’ reactions to developments in these countries (such as the United Kingdom’s withdrawal from the European Union, the COVID-19 pandemic, the Russian-Ukraine war, the war in the Gaza strip, and the escalating confrontations between Iran on one side and Israel and the United States on the other) may adversely affect the market value of securities of such companies, including our shares. Moreover, crises or significant developments in other countries and capital markets may diminish investors’ interest in securities of such companies, including our shares, and their trading price, limiting or preventing our access to capital markets and to funds to finance our future operations at acceptable terms.
Additionally, the financial crisis and political instability in the world, including as a result of the effects of the banking crisis in the United States and Europe, the Russian-Ukraine war, the war in the Gaza strip, the escalating confrontations between Iran on one side and Israel and the United States on the other), tensions between the United States and China, the COVID-19 pandemic, or other factors beyond our control may produce a number of effects that directly or indirectly affected the Brazilian capital markets and economy, including fluctuations in the price of securities of listed companies, reduced availability of credit, deterioration of the global economy, fluctuation in exchange rates and inflation, among others, which may adversely affect us. In addition, uncertainty surrounding presidential elections in the United States may adversely affect the Brazilian economy. If economic conditions in Brazil deteriorate due to, among other factors, a downturn in economic activity, depreciation of the real, inflation, or increases in domestic interest rates or increased rates, a higher percentage of our customers may , causing a material effect on our business.
As economic problems in emerging market countries or elsewhere adversely affect Brazil, our business and the market price of our securities may also be adversely affected. The decrease in foreign investment in Brazil can negatively affect growth and liquidity in the Brazilian economy, which, in turn, can have a negative impact on our business. The interruption or volatility in global financial markets may further increase the negative effects on the economic and financial scenario in Brazil, which may have a material adverse effect on us.
Any further downgrading of Brazil’s credit rating could reduce the trading price of our shares.
We may be harmed by investors’ perceptions of risks related to Brazil’s sovereign debt credit rating. Rating agencies regularly evaluate Brazil and its sovereign ratings, which are based on a number of factors including macroeconomic trends, fiscal and budgetary conditions, indebtedness metrics and the perspective of changes in any of these factors.
Table of Contents
The rating agencies began to review Brazil’s sovereign credit rating in September 2015. Subsequently, the three major rating agencies downgraded Brazil’s investment-grade status:
Standard & Poor’s initially downgraded Brazil’s foreign currency credit rating from BBB-negative to BB-positive and subsequently downgraded it again from BB-positive to BB, maintaining its negative outlook, citing a worse credit situation since the first downgrade. On January 11, 2018, Standard & Poor’s further downgraded Brazil’s credit rating from BB to BB-negative, and on December 11, 2019, the agency affirmed the rating at BB- and revised the outlook on Brazil to positive. On April 7, 2020, the rating was reaffirmed as BB- with stable outlook, reflecting uncertainties stemming from the coronavirus pandemic, along with how extraordinary government spending will adversely affect the fiscal performance in 2020. On November 30, 2021 and June 15, 2022, Standard & ’s further reaffirmed Brazil’s rating at BB with outlook. On June 14, 2023, the agency affirmed the rating at BB- and revised its outlook of Brazil to . On December 19, 2023, Standard & upgraded Brazil’s rating to BB with a neutral outlook, citing recent economic reform measures. However, Standard & may Brazil’s credit rating, if Brazil to control its public spending.
In December 2015, Moody’s placed Brazil’s Baa3’s issue and bond ratings under review for downgrade and subsequently downgraded the issue and bond ratings to below investment grade, at Ba2 with a negative outlook, citing the prospect of a further deterioration in Brazil’s debt indicators, taking into account the low growth environment and the challenging political scenario. On April 9, 2018, Moody’s revised the outlook to stable, reaffirming the Ba2 rating. In September 2020, Moody’s maintained Brazil’s credit rating at Ba2 and with a stable outlook. In May 2020, Moody’s confirmed Brazil’s long-term foreign currency sovereign credit rating at Ba2 maintaining the stable outlook. On May 25, 2021, April 12, 2022 and October 20, 2023, Moody’s further reaffirmed Brazil’s rating at Ba2 with stable outlook.
In February 2018, Fitch downgraded Brazil’s sovereign credit rating from BB-positive to BB-negative, citing, among other reasons, fiscal deficits, the increasing burden of public debt and an inability to implement reforms that would structurally improve Brazil’s public finances. In November 2020, Fitch Ratings affirmed Brazil’s long-term foreign currency sovereign credit rating at BB- with a negative outlook. On December 14, 2021, Fitch further reaffirmed Brazil’s credit rating at BB-negative with a negative outlook. On July 14, 2022, while reaffirming Brazil’s credit rating at BB-negative, Fitch changed its outlook on Brazil’s credit rating to a positive outlook. On July 26, 2023, Fitch upgraded Brazil’s credit rating at BB and changed its outlook on Brazil’s credit rating to a stable outlook.
Brazil’s sovereign credit rating is currently rated below investment grade by the three main credit rating agencies. Consequently, the prices of securities issued by companies with significant Brazilian operations have been negatively affected. A prolongation or worsening of the recent Brazilian recession and continued political uncertainty, among other factors, could lead to further ratings downgrades. Any further downgrade of Brazil’s sovereign credit ratings could heighten investors’ perception of risk and, as a result, cause the trading price of our shares to decline.
Enforcement risks related to civil liabilities due to our subsidiaries and our officers and directors being located in Brazil.
Our operational subsidiaries (BR Brands S.A. (formerly BR Brands Ltda.) and Boni Logística Ltda.) are companies incorporated under the laws of Brazil and part of our directors and executive officers are individuals resident in Brazil. As a result, it may be more difficult to enforce liabilities, rulings and judgments on these individuals and entities in the U.S. Investors who wish to invest in our shares are subject to several limitations in effecting service of process and enforcing civil liabilities in Brazil; especially considering the lack of reciprocity and treaties between Brazil and U.S. for service of process and the reasonable costs that may be incurred in any future litigation against our subsidiaries, directors and officers located in Brazil. Our directors and officers do not have process agents in the U.S.
A final conclusive judgment for civil liabilities rendered by any court in the United States in respect of these individuals and entities would be recognized by Brazilian courts (to the extent they have jurisdiction) without reconsideration of the merits of the original lawsuit, upon recognition by the Brazilian Superior Court of Justice ( Superior Tribunal de Justiça ). Decisions on interlocutory measures may likewise be enforced in Brazil in accordance with applicable laws. Recognition will occur if the foreign decision (i) complies with all formalities necessary for its enforcement under the laws of the place where it was issued; (ii) is issued by a court of competent jurisdiction or authority within the jurisdiction where it was awarded, after proper service of process on the relevant party (and, if the relevant party is located in Brazil, service of process has been made in accordance with Brazilian law) or the absence of the relevant party is duly certified; (iii) is final and therefore not subject to appeal ( res judicata ) in the jurisdiction where it was awarded; (iv) is not contrary to Brazilian national sovereignty or public policy or morality or violate human dignity; (v) does not violate a final and unappealable decision issued by a Brazilian court; (vi) does not the jurisdiction of Brazilian courts; and (vii) is duly authenticated by a competent Brazilian consulate or, if the place of signing is a contracting state to the Convention the Requirement of Legalization for Foreign Public Documents dated October 5, 1961, apostilled, and be accompanied by a sworn translation thereof into Portuguese, unless an exemption is provided by an international treaty to which Brazil is a signatory.
Notwithstanding the foregoing, we cannot assure that (1) the confirmation of any judgment issued by a foreign court will be obtained, (2) the proceedings described above can be conducted promptly or (3) Brazilian courts will enforce any penalty established by the foreign final judgment in the event the defendant refuses to comply with it.
Table of Contents
Risks Related to Our Indebtedness
If we are unable to generate sufficient cash to service all of our indebtedness, we may be forced to take other actions to fund the satisfaction of our obligations under our indebtedness, which may not be successful.
If our cash flow is insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, raise additional debt or equity capital or restructure or refinance our indebtedness. However, we may not be able to implement any such alternative measures on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. Even if new financing were available, it may be on terms that are less attractive to us than our then existing indebtedness or it may not be on terms that are acceptable to us.
If we cannot generate sufficient cash flow to permit us to make scheduled payments on our debt, then we will be in default and holders of that debt could declare all outstanding principal and interest to be due and payable. If our existing indebtedness were to be accelerated, there can be no assurance that we would have, or be able to obtain, sufficient funds to repay such indebtedness in full.
7,340 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion and analysis of our financial condition and results of operations should be read together with our Consolidated Financial Statements and the related notes and the other information included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties and are not guarantees of future performance. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report, particularly those under “Risk Factors.” Dollars in tabular format are presented in thousands, except per share data, or otherwise indicated .
Overview
BRB Foods Inc. (the “Company”) is a Wyoming-incorporated holding company that indirectly owns two subsidiaries based in Brazil: BR Brands S.A., formerly BR Brands Ltda., (“BR Brands”), a food production company, and Boni Logistica Ltda. (“Boni Logistica”), a logistics and distribution company. The Company operates an integrated platform combining food product development, commercialization and logistics coordination. Our primary mission is to enhance the everyday meals of Brazilian families by offering high-quality food products, while maintaining a commitment to sustainability. We provide a range of products made from grains, cereals and other food categories, supported by operational and quality standards designed to ensure consistency and reliability.
00019768700001477932-26-002290https://insiderdelta.com/issuers/0001976870/10-k/0001477932-26-002290Strategic Growth and Product Expansion
Since launching operations in 2021, the Company has established an operational platform in the Brazilian market. Initial market tests in São Paulo for Knorr-branded products demonstrated commercial viability and supported the Company’s expansion strategy.
In 2022 and 2023, the Company entered into license agreements with Unilever to create and launch up to 61 products under brands including Arisco, Maizena, Knorr and Mãe Terra. As of the date of this Annual Report on Form 10-K, three of these four license agreements have expired: the Arisco agreement expired on December 1, 2025; the Maizena agreement expired on February 28, 2026; and the Mãe Terra agreement expired on March 1, 2026. The Company’s sole remaining license agreement, covering the Knorr brand for 15 specified products, is scheduled to expire on June 30, 2026. There can be no assurance that the Knorr license agreement will be renewed or extended on acceptable terms, if at all. The expiration or non-renewal of the Knorr license agreement would have a material adverse effect on the Company’s business, results of operations and financial condition. See “Risk Factors—Risks Related to Our Business and Industry—Three of our four key intellectual property license agreements have expired as of the date of this Annual Report on Form 10-K, collectively covering 46 of our 61 planned new products, and the failure to renew these agreements would have a materially adverse effect on our business, results of operations and financial condition.” on page 6 of this Annual Report on Form 10-K.
Product Portfolio Expansion:
In 2022 and 2023, the Company entered into license agreements with Unilever to create and launch up to 61 products across categories such as rice, corn, potatoes, pasta, natural sugars, cocoa and cereals. As described above, three of these four license agreements have expired. The Company’s remaining license agreement covers the Knorr brand for 15 specified products and is scheduled to expire on June 30, 2026. We currently expect the 15 products supported under the Knorr license agreement to be launched during 2026, subject to capital availability and completion of our commercialization plan. The Company believes that its expanded portfolio, once fully commercialized, has the potential to support revenue growth and improve operational efficiency; however, there can be no assurance regarding the timing or extent of such commercialization.
Operational Strategy and Logistics:
Our logistics subsidiary, Boni Logística, plays a critical role in our operational platform. The Company operates through 14 strategically located third-party independent distribution centers (“IDCs”) across Brazil, which support its nationwide logistics and distribution capabilities. Leveraging management’s logistics experience, the Company continues to focus on operational efficiency, cost management and supply chain optimization.
During the fiscal year ended December 31, 2023, the Company completed the technical and commercial qualification of 14 IDCs and 16 national suppliers. Building on this foundation, in the second quarter of 2024, the Company made the strategic decision to temporarily pause revenue-generating product sales activities in order to focus on operational readiness and product portfolio development. As a result, net revenue declined to US$40,463 in fiscal year 2024, compared to US$10,054,390 in fiscal year 2023.
Table of Contents
During this period, the Company focused on strengthening its operational infrastructure and preparing for future commercialization, including:
finalizing technical and commercial development of products under its licensing agreements;
completing integration with distribution centers and suppliers;
implementing SAP Business One and warehouse and transportation management systems (WMS/TMS);
training its commercial team for future product deployment; and
maintaining commercial relationships with its existing customer base.
The Company is currently focused on preparing for the commercialization of products supported by its existing licensing agreements. The timing and extent of any product launches depend on multiple factors, including licensing status, operational readiness and capital availability. There can be no assurance regarding the timing or success of such efforts.
Future Opportunities:
The Company is engaged in discussions with potential commercial counterparties that may support future portfolio diversification, including complementary product categories. These discussions are preliminary and ongoing, and there can be no assurance that any such discussions will result in definitive agreements or contribute to future revenue.
Operational Update
During the year ended December 31, 2023, the Company focused on strengthening its operational structure and capabilities. The Company utilized its licensed brands to support its commercial activities and expand into additional product categories. Its sales and distribution strategy was supported by its sell-out model and logistics network.
The Company considers its food operations, with emphasis on distribution and logistics, to be a viable operating model. A key challenge remains cash flow management. The Company expects that additional capital will be required to support working capital needs and future operations. The ability to execute its business plan is dependent on obtaining such financing.
During the year ended December 31, 2023, the Company expanded its logistics presence to seventeen (17) Brazilian states and completed the homologation of fourteen (14) strategically located IDCs and sixteen (16) national suppliers. These developments support the Company’s operational platform and its ability to scale distribution. During the second quarter of 2024, we made the strategic decision to temporarily suspend revenue-generating product sales activities in order to focus on operational readiness and product portfolio development. The Company is currently preparing for the commercialization of products supported by its existing licensing agreement. The timing and extent of such commercialization depend on multiple factors, including licensing status, operational readiness and capital availability.
External Economic Environment:
External challenges such as limited credit availability and high financing costs have had a significant impact on the Company’s financial condition and results of operations. Interest expense for the year ended December 31, 2025 was $353,138, compared to $1,172,087 for the year ended December 31, 2024.
Brazil’s high interest rate environment has increased the cost of working capital financing and reduced the availability of credit, which has affected the Company’s liquidity and financial flexibility. As of December 31, 2025, the benchmark interest rate in Brazil was 15.00%, compared to 12.73% as of December 31, 2024.
High interest rates in Brazil have impacted the Company in several ways including:
increased costs associated with financing inventory and working capital;
higher financing costs embedded in supplier pricing;
increased debt servicing requirements, reducing available cash flow; and
higher accrued interest expenses, further impacting liquidity.
Table of Contents
In response to these conditions, the Company has implemented measures aimed at managing its cost structure and liquidity, including pricing adjustments where possible, operational efficiencies and cash flow prioritization.
Despite these measures, increased borrowing costs continue to affect the Company’s cash generation capacity and may limit its ability to invest in operations and growth initiatives. Looking ahead, macroeconomic conditions in Brazil, including interest rates, inflation, credit availability and consumer demand, may continue to impact the Company’s financial condition and results of operations. The Company continues to monitor these factors and adjust its operational plans accordingly; however, there can be no assurance regarding the extent or duration of such impacts.
Strategic Investments:
General and administrative expenses for the year ended December 31, 2025 were $709,099, compared to $387,678 for the year ended December 31, 2024, representing an increase of 82.9% from 2024 to 2025. Variations in general and administrative expenses reflect the Company’s operational transition, including the strategic suspension of revenue-generating activities, continued investment in corporate infrastructure and operational readiness, as well as the impact of foreign exchange fluctuations, as certain expenses denominated in Brazilian reais increased when translated into U.S. dollars.
EBITDA:
EBITDA for the year ended December 31, 2025 was $(709,031), compared to $(192,250) for the year ended December 31, 2024, an increase of $516,781. Variations in EBITDA across periods were due to reduction of sales during the Company’s strategic transition and increase in operational expenses.
Strategic Operational Decisions to Temporarily Pause Sales:
In the first quarter of 2024, the Company began reducing sales volume in preparation for a broader product portfolio. In the second quarter of 2024, we made the strategic decision to temporarily suspend revenue-generating product sales activities in order to focus on operational readiness and product portfolio development.
During this period, the Company focused on consolidating relationships with third-party distribution centers, implementing enterprise resource systems and advancing product development under its then-existing licensing agreements.
While the qualification of 14 independent distribution centers and sixteen (16) national suppliers was completed during the fiscal year ended December 31, 2023, integration and operational deployment continued during the sales pause period in fiscal 2024, which we believe strengthened the Company’s logistics and operational capabilities.
As a result of the sales pause, the Company reported no net revenue or cost of products sold for the year ended December 31, 2025. However, the Company has maintained its operational platform, supplier relationships and commercial structure during this period. We believe the Company is currently positioned to support the resumption of commercial activities; however, the timing and extent of such resumption depend on multiple factors, including operational readiness, licensing agreement status and capital availability, and there can be no assurance regarding the timing or success of such efforts.
Financial Performance and External Challenges
The Company experienced a significant decline in revenue, from $10,054,390 in the year ended December 31, 2023 to $40,463 in the year ended December 31, 2024. For the year ended December 31, 2025, the Company generated no revenue. The significant decline in revenue is primarily as a result of the strategic suspension of sales and prevailing macroeconomic conditions.
Net loss for the year ended December 31, 2025 was approximately $1.1 million, compared to approximately $1.6 million in fiscal year 2024. The Company’s financial performance has been impacted by reduced revenue during the sales pause period, as well as increased financing costs associated with higher interest rates in Brazil. The Company continues to actively manage its cost structure, preserve liquidity and maintain its operational platform and commercial relationships during this period. While management believes that the Company’s operational platform and logistics infrastructure position it to support future commercialization and growth, there can be no assurance regarding the timing or extent of revenue generation or profitability.
Table of Contents
Innovation and Sustainability
Innovation remains an important component of the Company’s operational strategy. The Company continues to evaluate opportunities for product development, partnerships and operational improvements. The Company implemented an enterprise resource planning (“ERP”) system in 2023 to support operational efficiency and scalability across its operations. The Company also seeks to improve resource utilization and maintain relationships with suppliers aligned with its operational standards and business practices.
Logistics Business:
Boni Logística Ltda. (“Boni Logistica”), our logistics operations subsidiary in Brazil, plays an important role in supporting the Company’s distribution platform and coordination of product flows through third-party IDCs.
Product Development Initiatives:
The Company continues to evaluate product development opportunities, commercial relationships and operational improvements to align with consumer demand and market trends. During the period of suspended sales activities, the Company has focused on product development initiatives and operational readiness, including formulation adjustments, packaging design, supplier qualification and process optimization.
Operational Cornerstones
Excellence in supply chain : The Company maintains an operational structure across sourcing, manufacturing, logistics and planning, supported by its team and its logistics subsidiary, Boni Logística. This structure is intended to support efficient product flow across its operations
Quality as the primary goal : The Company maintains quality control processes designed to support product consistency and customer experience across its B2B2C model. These processes include monitoring at production and point-of-sale levels. The Company conducts its business in accordance with applicable laws and seeks to engage suppliers aligned with its operational standards and long-term objectives.
Conclusion:
We believe the Company’s operational platform, product portfolio and logistics infrastructure position it to support future commercialization and growth. The Company continues to focus on refining its operations and evaluating growth opportunities; however, there can be no assurance regarding the timing or extent of future growth or the Company’s ability to achieve profitability.
Business Model
Developing categories and building brands
The Company has historically managed licensed brands with established recognition in Brazil, including Knorr, Maizena and Mãe Terra. As of the date of this Annual Report on Form 10-K, the Knorr brand is the only remaining active licensed brand, with Maizena and Mãe Terra license agreements having expired in February 2026 and March 2026, respectively. The Company and seeks to maintain quality standards across its production and distribution processes, focuses on the point of sale as a key component of its commercial strategy, and seeks to align its product offering with consumer demand. The Company has expanded certain licensed brands into additional product categories, leveraging management experience in the food and logistics sectors.
Our Operations
Since commencing operations, the Company has structured its processes with reference to ESG principles, including food safety, operational standards and supplier selection. The Company maintains processes intended to support product quality, including monitoring, storage and operational controls across its supply chain. The Company’s commercial activities include product development, supplier coordination, packaging development, retail registration and distribution through its logistics structure.
Growth Strategy
The Company’s strategy is based on operational efficiency, product portfolio development, customer focus and cost management. In 2022 and 2023, the Company entered into license agreements with Unilever for the development of multiple products. As of the date of this Annual Report on Form 10-K, three of these four license agreements have expired. The Company’s remaining agreement covers the Knorr brand for 15 specified products and is scheduled to expire on June 30, 2026. The Company expects to commercialize products supported by its existing agreement; however, the timing and extent of such commercialization depend on multiple factors, including licensing status, operational readiness and capital availability.
The Company’s strategy also includes geographic expansion and potential entry into new product categories, subject to market conditions and execution capability.
Table of Contents
Strategic Planning
The Company’s long-term strategy is focused on maintaining its presence in Brazil, managing its licensed brands and improving operational efficiency. The Company temporarily suspended revenue-generating activities in the second quarter of 2024 as part of an operational transition. During this period, the Company has maintained its operational structure, including its distribution network and commercial relationships.
The Company’s infrastructure, including its network of 14 IDCs and points of sale, is intended to support future commercialization; however, such commercialization depends on operational and financial factors, including the status of the Company’s remaining and any future licensing arrangements. The Company continues to evaluate strategic opportunities and market developments as part of its long-term planning.
Our strategic pillars include:
Strategic national relaunch in Brazil: Preparation for the coordinated launch of products under recognized brands, replacing the Company’s prior limited portfolio.
Brand positioning: Leveraging licensed brands (including Knorr) to support consumer recognition and market entry.
Logistics platform: Utilization of 14 independent distribution centers to support potential national fulfillment.
Technology infrastructure: Implementation of SAP ERP and WMS/TMS systems to support operational efficiency and control.
Operational optimization: Strategic suspension of lower-scale operations to prepare for a more efficient commercial rollout.
Operational and financial discipline: Maintenance of core infrastructure, including leased facilities and audited financial processes, to support business continuity.
Historical growth foundation: The Company achieved sales growth in prior periods and established a market presence in selected regions before the suspension of sales in 2024
Our Priorities
The Company’s priorities include improving operational efficiency, strengthening its commercial structure and supporting long-term value creation. These priorities are based on its existing operational platform, market presence and relationships within its value chain.
Critical Accounting Policies and Estimates
Estimates and accounting judgments
Our financial statements are prepared in accordance with U.S. GAAP, requiring judgment and estimates that may affect reported figures. The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis. Reviews in relation to accounting estimates are recognized in the period in which the estimates are reviewed and in any affected future periods.
Foreign Currency Translation
All our operations are conducted in Brazil; thus we consider the Brazilian Real our functional currency.
Table of Contents
The assets and liabilities in Brazil are converted into US dollars, which is our reporting currency, at exchange rates existing at the relevant balance sheet dates. Revenue and expenses are converted at average exchange rates and shareholders’ equity and net worth are converted at historical exchange rates. Adjustments resulting from converting the financial statements from Brazilian Real into US dollars are included in the foreign currency conversion adjustment, a component of accumulated other comprehensive income (loss).
Description of the Line Items of our Statement of Profit (Loss)
Revenue Recognition
U.S. GAAP states the specific conditions under which revenue must be recognized and determines the accounting for such revenue. Typically, revenue is recognized when a critical event occurs, when a product or service is delivered to a customer and the cash value is easily measurable by the Company.
Management has also to ensure that all revenue recognition principles within the Company remain constant over time, so historical financials can be reviewed and revised for seasonal trends or inconsistencies by investors and stakeholders.
The revenue recognition principle is also regulated by ASC 606 in U.S. GAAP terms and requires that revenues are recognized in the income statement in the period in which they are transferred/realized and earned — not necessarily when cash is received.
The revenue-generating activity must be fully or essentially completed to be included in revenue during the respective accounting period. In addition, there must be a reasonable level of certainty that payment for the revenue earned will be received. Finally, according to the standard principle, revenue and its associated costs must be reported in the same accounting period.
Accounting Standards Codification (ASC) 606: On May 28, 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 606, referring to revenue from contracts with customers. ASC 606 provides a uniform framework for recognizing revenue from contracts with customers. The old guidance was industry-specific, which created a fragmented policy system. The updated revenue recognition standard is industry-neutral and therefore more transparent. It allows for better comparability of financial statements with standard revenue recognition practices across industries.
The five steps required under U.S. GAAP to satisfy the updated revenue recognition principle, all of which are followed by the Company, are as follows:
Identify the agreement with the customer;
Identify contractual enforcement obligations;
Determine the consideration amount/price of the transaction;
Allocate the determined amount of consideration/price to the contractual obligations and;
Recognize revenue when the performing party satisfies the performance obligation.
In addition, there must be a reasonable level of certainty that payment for the revenue earned will be received. Finally, according to the standard principle, revenue and its associated costs must be reported in the same accounting period.
Government Grants
Government grants are recognized when there is reasonable assurance that the entity will comply with all conditions. When the benefit refers to an expense item, it is recognized as revenue over the benefit period, in line with the credit reporting period under the accrual basis of accounting.
The government grants we receive are in form of tax incentives received from the various states in which we operate in the amount of ICMS ( Imposto sobre Circulação de Mercadorias e Serviços , a State Value-Added Tax on Services and Circulation of Goods) that may be due and levied on the Company’s business.
We are eligible to benefit from tax benefits arising from government subsidies related to the reduction of the ICMS calculation base on the sale of grains, which therefore grant a presumed credit to the Company for purposes of calculating the ICMS to be paid by the Company.
Table of Contents
The portion of net income resulting from these tax incentives, not taxed, in accordance with article 195-A of Law 6,404/76, is allocated to a tax incentive reserve in our financials, which is consequently excluded from the profit distribution calculation, and used only for capital increase or the absorption of accumulated losses.
According to Brazilian tax law, tax benefits granted in the form of presumed/granted ICMS credits arising of operations with food products carried out by industrial and commercial establishments (which is the case of the Company) in the states of Rio de Janeiro, Paraná and São Paulo are now considered subsidies for investments, and may be deducted from the calculation basis of income tax and social contribution on net profits. Thus, the Company had no ICMS tax benefit for fiscal year 2025, as no sales were recorded in the period, and calculated the ICMS tax benefit in the accumulated total of US$3,681 as of December 31, 2024. As provided for in Article 30 of Brazilian Law no. 12,973/14, the tax incentive reserve may be used to absorb accumulated losses, provided that the other Profit Reserves (with the exception of the Legal Reserve), if any, have previously been fully absorbed, or for a capital stock increase. Within the same legal provision, the tax incentive reserve and legal reserve do not make up the calculation base for the minimum mandatory dividend, and the Company must submit it to taxation, in case of distribution.
Taxes
Current income and social contribution taxes, tax rates and laws used to calculate the amounts are those in force at the base date of the relevant financial statements. In Brazil, income taxes include both income and social contribution taxes. Under the taxable profit based on accounting records regime (“ lucro real ”), applicable to the Company, income tax is calculated at the rate of 15% on taxable profit, plus 10% surtax on profit exceeding BRL240 thousand over 12 months, whereas social contribution tax is levied at a rate of 9% on taxable profit, both recognized on an accrual basis, therefore additions to book income of temporarily nondeductible expenses or exclusions of temporarily nontaxable income upon determination of current taxable profit generate deferred tax assets or liabilities.
Sales taxes
Revenues, expenses and assets are recognized net of sales taxes, except:
When sales taxes incurred on the purchase of assets or services are not recoverable from tax authorities, in which case sales taxes are recognized as part of the acquisition cost of the asset or expense item, as applicable;
When amounts receivable and payable are stated together with sales taxes; and
When net sales taxes, either recoverable or payable, are included as a component of amounts receivable or payable in the statements of financial position. Revenues from sales in Brazil are subject to the following taxes and contributions, at the basic rates below:
Rates
State value-added tax (ICMS)
Contribution tax on gross revenues for social security financing (COFINS)
Contribution tax on gross revenues for social integration (PIS)
Federal value-added tax (IPI)
Services tax (ISS)
Non-cumulative PIS/COFINS credits are recorded as a deduction of cost of products sold or general and administrative expenses in the statements of profit or loss, according to the source of the expenditure. Taxes recoverable are stated under current or noncurrent assets according to their estimated realization. Revenues are stated net of taxes in the statements of profit or loss.
Cost of Goods Sold
We work in a business-to-business-to-consumer (“B2B2C”) model, in which we sell directly to the consumer, but the sale is facilitated by a third-party (including supermarkets, wholesalers and other retailers), so that the business model includes the entire chain.
In practice, the Company buys raw materials from its producers, sends the raw materials to the factory, which performs the raw material quality process and sends it to the distribution partner.
Table of Contents
In the case of Knorr beans, for example, BR Brands buys the raw material and manages the processing at the factory, in order to ensure the quality of the beans. Then, the product is packaged, with Unilever’s brand logo, but designed by BR Brands which sells directly to wholesalers and supermarkets.
At this stage, there is great operational synergy with Boni Logística, which delivers the finished product to our distributor. We handle all stages of the supply chain including production, factory, manufacturing, services and sale to the final consumer.
BR Brands works under the assumption that the point of sale is to be handled with state-of-the-art techniques, transforming the supermarket shelves with an attractive visual identity for the consumer, combined with the training of teams that are on-site focused on sales promotion, and an automated process for inspecting the shelves where customers’ brand products are displayed.
Selling and Marketing expenses
Selling and marketing expenses comprise (i) expenses for our sales team, (ii) commissions paid to franchisee, (iii) advertising expenses, and (iv) allowance for expected credit losses for account receivables.
In the context of the sales process, the sales promoter is the most important element in our sales process, seeking to have the best possible relationship with store managers as well as all wholesalers and supermarket employees directly involved. There is constant search for space on shelves, for the product to be available and for the presentation of product posters on sales islands.
General and Administrative Expenses
We incur general and administrative expenses in the management and support of our operating activities. Our main general and administrative expenses are personnel expenses, provision for contingencies, and depreciation and amortization.
Financial Result
Financial result represents financial income less financial costs. For the fiscal years ended December 31, 2025 and 2024, the main items that comprise our financial result are interest on loans and debts and revenue from financial investments (cash equivalents).
Results of Operations for the Years Ended December 31, 2025 and 2024
The following table shows the components of our results of operations for the fiscal years ended December 31, 2025 and 2024:
Fiscal Year Ended
December 31,
($) (Restated)
Change
Change
Net revenue
Cost of products sold
Gross Loss
Operating Income (Expenses)
General and Administrative Expenses
Sales expenses
Operating Loss before financial income
Financial Income
Financial Revenue
Financial Expenses
Net Loss before Income Tax
Income Tax
Net Loss
Restatements
For the years ended December 31, 2024 and 2023, the Company restated its results. As discussed in Note 4, Consolidated Financial Statements Restated, to the audited financial statements for the year ended December 31, 2025:
For the years ended December 31, 2024 and 2023, in accordance with Staff Accounting Bulletin Topic 5, which provides that specific incremental costs directly attributable to a proposed or actual offering of securities may properly be deferred and charged against the gross proceeds of the offering, the Company recorded expenses related to legal and consulting services directly attributable to its IPO process amounting to USD 1,025,195, which have been properly deferred. Separately, expenses related to research and development (“R&D”) in the amount of USD 1,166,238 were expensed as incurred in accordance ASC 730. The Company made an adjustment of US$1,166,238 (was made as a GAAP adjustment) because the Company’s local books are maintained under IFRS. Per IAS 38 guidance, companies are required to capitalize and amortize development expenditures. However, for GAAP purposes, R&D costs were expenses as incurred, consistent with ASC 730.
Results of Operations and Impact of Strategic Realignment
During the second quarter of 2024, we made the strategic decision to temporarily suspend revenue-generating product sales activities in order to focus on operational readiness and product portfolio development. The Company’s sales and expenses significantly reduced in fiscal years 2025 and 2024.
For the year ended December 31, 2025, the Company generated no net revenue, compared to $40,463 for the year ended December 31, 2024 (restated), representing a decrease of $40,463, or 100.0%. The absence of net revenue in fiscal 2025 reflects the continuation of the Company’s strategic sales pause that commenced in the second quarter of 2024 Cost of products sold was $nil for the year ended December 31, 2025, compared to $48,616 for the year ended December 31, 2024, a decrease of $48,616, or 100.0%, which is consistent with the absence of revenue-generating sales activity during fiscal 2025. We recorded a gross profit of $nil for the year ended December 31, 2025, compared to a gross loss of $(8,153) for the year ended December 31, 2024.
The Company’s general and administrative expenses, including essential support and operational management activities, was $709,099 for the year ended December 31, 2025, compared to $387,678 for the year ended December 31, 2024, an increase of $321,421 (or 82.9%). The increase in general and administrative expenses was primarily driven by services from third parties which increased $436,784 and others reductions in the amount of $(115,364).
Sales expenses for the year ended December 31, 2025 were $30,137, compared to $56,961 for the year ended December 31, 2024, a decrease of $(26,824) (or 47.1%). The decrease in sales expenses was primarily driven by the decrease in Company’s sales and decrease in related sales expenses and royalties.
Financial expenses for the year ended December 31, 2025 were $353,138, compared to $1,172,087 for the year ended December 31, 2024, a decrease of $(819,949) (or 69.9%). The decrease in financial expenses was primarily driven by a decrease of ($554,931) in banking expenses and a decrease of $(264,017) in interest during the period.
Net loss for the year ended December 31, 2025 was approximately $1.1million, compared to $1.6 million for the year ended December 31, 2024, a decrease of approximately $0.5 million (or 32.9%). The decrease in net loss was primarily driven by reduction of our operations.
EBITDA decreased , due to our ongoing sales pause during fiscal year 2025, to $(709,031) in the year ended December 31, 2025 from $(217,673) in the year ended December 31, 2024. Variations in EBITDA across periods were due to reduction of sales during the Company’s strategic transition and increase in operational expenses.
Total assets were $2,172,299 as of December 31, 2024 and decreased to $1,990,390 as of December 31, 2025, a decrease of $181,909, or 8.4%. The decrease in total assets was primarily driven by the reduction of operating lease assets in the amount of $168,945 during the period.
Current liabilities were $6,992,147 as of December 31, 2024 and increased to $8,783,458 as of December 31, 2025, an increase of $1,791,311, or 25.6%. The increase in current liabilities was primarily driven by accounts payables, for which the increase was $1,140,471 (or 33.0%) and loans which increased by $408,401 from fiscal 2024 to fiscal 2025..
Table of Contents
Total liabilities were $7,045,505 as of December 31, 2024 and increased to $8,783,458 as of December 31, 2025, an increase of $1,737,953, or 24.7%. The increase in total liabilities was primarily driven by interest and foreign exchange rate which represented an increase of $474,392, an increase in suppliers in the amount of $1,140,471, and other liabilities variation in the amount of $189,081 during the period.
Our accounts payable were settled at an average of 7 days for the year ended December 31, 2025.
Liquidity and Capital Resources
The following discussion of our liquidity and capital resources is based on the financial information derived from our audited consolidated financial statements as of and for the year ended December 31, 2025, included elsewhere in this Annual Report on Form 10-K.
Liquidity
Our sources of liquidity have primarily been derived from our: (i) advance of 100% of our receivables by local banks and others financial institutions, with high level of interest rates; and (ii) our founders and earlier investors’ capital contributions.
Our main uses of capital include: (i) purchase of raw materials; (ii) logistic and warehouse expenses; and (iii) product placement in retail channels.
As of December 31, 2025, we had a working capital deficit of approximately $7.4 million, which raises substantial doubt about our ability to continue as a going concern. In its report on our financial statements for the years ended December 31, 2025 and 2024, our independent registered public accounting firm included an explanatory paragraph stating that our accumulated losses raise substantial doubt about our ability to continue as a going concern. Our management is actively exploring opportunities to improve our liquidity position, including the potential infusion of equity capital from our initial public offering and improvements to our cost of capital, both of which would have a significant impact on our ability to support our ongoing operations and improve our profitability.
Our primary capital needs relate to funding that affect our liquidity, including: (i) working capital needs; (ii) the purchase of raw materials on more favorable financial terms; and (iii) continued investment in product development. We may encounter operational challenges, or unexpected costs in relaunching our product sales, however, an improvement in our costs of cash or an infusion of equity could significantly affect our profitability.
Our cash and cash equivalents include cash on hand, deposits with banks and other short-term highly liquid investments with original maturities of three months or less, which have an immaterial risk of change in value. For more information, see notes to our audited consolidated financial statements.
Cash Flows
Our net cash provided by operating activities consisted of loss for the period adjusted for certain non-cash items including, but not limited to, depreciation and amortization, other financial costs, cumulative translation adjustments, as well as adjustments for changes in our operating assets and liabilities, the amounts for income taxes and social contributions that we pay, and net interest income that we receive during the period.
Our net cash used in investing activities consisted of amounts paid on our purchase of property and equipment, purchases and development of intangible assets.
We work with prepayment of receivables operations with local Fundos de Investimento em Direitos Creditórios , or FIDCs (Credit Rights Investment Funds), which will be settled upon receipt from customers.
The table below summarizes our Statement of Cash Flows for the years ended December 31, 2025 and 2024:
Year
Ended
December 31, 2025
Year
Ended
December 31, 2024 (Restated)
Net Loss
Net cash provided by (used in) operating activities
Net cash provided by (used in) investment activities
Net cash provided by (used in) financing activities
Table of Contents
Net cash provided by operating activities
For the year ended December 31, 2025, net cash provided by operating activities was $188,449, primarily as a result of:
Net loss of $(1,092,374), adjusted for non-cash expenses consisting primarily of depreciation and amortization of $30,205 and cumulative translation adjustments of $(827,487) and interest of $761,539. The total amount of adjustment to net loss from non-cash items for the year ended December 31, 2025, was $(35,743).
Net cash from changes in working capital, arising from changes in operating assets and liabilities, totaled an outflow of $1,316,567 principally due to:
a decrease in accounts receivable of $11,326, an increase in suppliers of $1,140,471 a decrease in inventory of $(6,720), and other variations of $171,490.
EBITDA
EBITDA is the earnings before interest, depreciation and amortization.
Net Loss for the year
(+) Interest
(+) Depreciation and amortization
(+) Income Tax and Social Contribution
EBITDA
(+) Non-Recurring Expenses – PCLD
Total Adjusted EBITDA
Introduction to adjusted EBITDA
We have introduced adjusted EBITDA among our indicators, with the intention of providing more detail on the items that impact our activities and presenting how we evaluate our lines of business.
Adjusted EBITDA is part of the business performance assessment process established by our management.
The comparative information of the adjustment items was obtained from the audited financial statements for the respective periods. The introduction of adjusted EBITDA does not change the accounting information already published, it only complements them.
It is important to emphasize, on the one hand, that these were non-recurring events, and on the other, that they did not affect the Company’s ability to produce future results.
We present below the nature of the reconciliation items, with a brief description of the adjustments, in the order in which they are presented:
Non-recurring expenses related to the allowance for doubtful accounts of specific clients (PCLD) in the amount of US$32,952. Such amounts are not recurring and are not associated with a recurring operation;
Table of Contents
We present below the reconciliation of EBITDA to adjusted EBITDA for the year ended December 31, 2025:
EBITDA
(+) Non-Recurring Expenses – Provisions
(+) Non-Recurring Expenses – PCLD
(-) Non-Recurring Expenses – Adjustments
Total adjusted EBITDA
Past Offerings
2023A Convertible Note Offering
On February 17, 2023, we closed a private placement (the “2023A Convertible Note Offering”) of a convertible note (the “2023A Convertible Note”) to an accredited investor pursuant to Rule 506 of Regulation D of the Securities Act. The 2023A Convertible Note has an annual rate of return of six and one-half percent (6.5%) per annum, payable as a Payment-in-Kind in the Company’s common stock valued, at a price equal to sixty five percent (65%) of the per share price of securities sold in this offering, at the Maturity Date of the 2023A Convertible Note.
The 2023A Convertible Note shall mature nine (9) months from the closing date of the 2023A Convertible Note Offering (the “Maturity Date”). The outstanding principal balance of the 2023A Convertible Note and all accrued interest shall automatically convert into common stock of the Company immediately prior to the Company’s receipt of an effective order from the SEC declaring the registration statement of its initial public offering effective.
As of February 17, 2023, $100,000 of the 2023A Convertible Note have been sold. No offers are being taken as a result of the filing of the registration statement of our initial public offering.
2023B Convertible Note Offering
On August 4, 2023, we closed a private placement (the “2023B Convertible Note Offering”) of a convertible note (the “2023B Convertible Note”) to an accredited investor pursuant to Rule 506 of Regulation D of the Securities Act. The 2023B Convertible Note has an annual rate of return of twelve and one-half percent (12.5%) per annum, payable as a Payment-in-Kind in the Company’s common stock valued, at a price equal to sixty five percent (65%) of the per share price of securities sold in this offering, at the Maturity Date of the 2023B Convertible Note.
The 2023B Convertible Note shall mature nine (9) months from the closing date of the 2023B Convertible Note Offering (the “Maturity Date”). The outstanding principal balance of the 2023B Convertible Note and all accrued interest shall automatically convert into common stock of the Company immediately prior to the Company’s receipt of an effective order from the SEC declaring the registration statement of its initial public offering effective.
As of August 4, 2023, $150,000 of the 2023B Convertible Note have been sold. No offers are being taken as a result of the filing of the registration statement of our initial public offering.
2023C Convertible Note Offering
On October 13, 2023, we closed a private placement (the “2023C Convertible Note Offering”) of a convertible note (the “2023C Convertible Note”) to an accredited investor pursuant to Rule 506 of Regulation D of the Securities Act. The 2023C Convertible Note has an annual rate of return of twelve and one-half percent (12.5%) per annum, payable as a Payment-in-Kind in the Company’s common stock valued, at a price equal to sixty five percent (65%) of the per share price of securities sold in this offering, at the Maturity Date of the 2023C Convertible Note.
The 2023C Convertible Note shall mature nine (9) months from the closing date of the 2023C Convertible Note Offering (the “Maturity Date”). The outstanding principal balance of the 2023C Convertible Note and all accrued interest shall automatically convert into common stock of the Company immediately prior to the Company’s receipt of an effective order from the SEC declaring the registration statement of its initial public offering effective.
As of October 13, 2023, $43,200 of the 2023C Convertible Note have been sold. No offers are being taken as a result of the filing of the registration statement of our initial public offering.
Table of Contents
2024 Convertible Note Offering
On February 15, 2024, we closed a private placement (the “2024 Convertible Note Offering”) of a convertible note (the “2024 Convertible Note”) to an accredited investor pursuant to Rule 506 of Regulation D of the Securities Act. The 2024 Convertible Note has an annual rate of return of six and one-half percent (6.5%) per annum, payable as a Payment-in-Kind in the Company’s common stock valued, at a price equal to sixty five percent (65%) of the per share price of securities sold in this offering, at the Maturity Date of the 2024 Convertible Note.
The 2024 Convertible Note shall mature nine (9) months from the closing date of the 2024 Convertible Note Offering (the “Maturity Date”). Additionally, the Company shall issue with the 2024 Convertible Notes warrants to purchase up to $100,000 of the Company’s common stock (the “Warrants”) and the Warrants shall be exercisable for a period of three (3) years at a price equal to one hundred and twenty five percent (125%) of the per share price of the securities sold in this offering. All or parts of the outstanding principal balance and accrued interest of the 2024 Convertible Note may be converted into common stock of the Company, at the sole discretion of the note holder, immediately prior to the Company’s receipt of an effective order from the SEC declaring the registration statement of its initial public offering effective (the “Financing Event”). Additionally, the 2024 Convertible Note provides for a true-up issuance of additional shares of our common stock to the note holder in the event the conversion price on the date which is 20 trading days after the Financing Event is less than the conversion price on the date of the Financing Event.
As of February 15, 2024, $100,000 of the 2024 Convertible Note have been sold. No offers are being taken as a result of the filing of the registration statement of our initial public offering.