BRB Foods (BRBF) S-1/AIPO registration (amended)

As filed with the Securities and Exchange Commission on July 25, 2024.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-1
(Amendment No. 3)
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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BRB FOODS INC.
(Exact name of registrant as specified in its charter)

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Rua Doutor Eduardo de Souza Aranha
387 – Conjunto 151
São Paulo, SP, Brazil, 04543-121
+55 4040-5766
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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Wyoming Discount Registered Agent, Inc.
36 Shadow Brook Lane
Lander, WY 82520
(775) 782-6587
(Name, address, including zip code, and telephone number, including area code, of agent for service)

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Copies to:

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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company,” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

TABLE OF CONTENTS

ABOUT THIS PROSPECTUS

You should rely only on the information contained in this prospectus and in any free writing prospectus. We and the underwriters have not authorized anyone to provide you with information different from that contained in this prospectus. We and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock.

Neither we, the selling shareholders, nor any of the underwriters has done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside of the United States.

Our logo and some of our trademarks and tradenames are used or incorporated by reference in this prospectus. This prospectus also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this prospectus may appear without the ®, trademark (™) and service mark (SM) symbols, but those references are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensor to these trademarks, tradenames and service marks.

We obtained the statistical data, market data and other industry data and forecasts described or incorporated by reference in this prospectus from market research, publicly available information and industry publications. Industry publications generally state that they obtain their information from sources that they believe to be reliable, but they do not guarantee the accuracy and completeness of the information. Similarly, while we believe that the statistical data, industry data and forecasts and market research are reliable, we have not independently verified the data, and we do not make any representation as to the accuracy of the information. We have not sought the consent of the sources to refer to their reports appearing or incorporated by reference in this prospectus.

Market, Industry and Other Data

Unless otherwise indicated, information contained in this prospectus concerning our industry and the markets in which we operate, including our general expectations and market position, market opportunity and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources and on our knowledge of the markets for our services.

These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. We have not independently verified any third-party information and cannot assure you of its accuracy or completeness. While we believe the market position, market opportunity and market size information included in this prospectus is generally reliable, such information is inherently imprecise. In addition, projections, assumptions and estimates of our future performance and the future performance of the industry in which we operate is necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in “Risk Factors” and elsewhere in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates made by the independent parties and by us.

Presentation of Financial Information

We are a holding company and do not have any material operations of our own. We conduct our activities through our subsidiaries in Brazil, BR Brands S.A. (formerly BR Brands Ltda) and Boni Logistica Ltda., using the Brazilian Real (“BRL”), the currency of Brazil and our functional currency. Our reporting currency is the United States dollars (“US$” or “U.S. dollars”). All translations of Brazilian Real into U.S. dollars in our financial statements have been made at using the following criteria: (i) assets and liabilities translated to U.S. dollars using the exchange rate for the quarter; (ii) income statement, comprehensive income statement, and statement of cash flows translated to U.S. dollars using monthly average rates; and (iii) equity translated to U.S. dollars at the historical amount of composition. Exchange rate variations from the conversion of the aforementioned accounts are recognized in a specific account of equity named “Equity valuation adjustments”. No representation is being made that the Brazilian Real amounts could have been, or could be, converted, realized or settled into U.S. dollars at such rate, or at any other rate.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus, including the sections entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business” contains forward-looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in “Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Forward-looking statements in this prospectus may include, for example, statements about:

•        our current and future capital requirements to support our operations;

•        our ability to maintain or protect the validity of our intellectual property;

•        our ability to retain key executive members;

•        our ability to hire and continue to hire qualified personnel;

•        our ability to maintain and continue acceptance within the food industry;

•        competitors and competition;

•        our cash on hand and continued investment;

•        the accuracy of our estimates regarding expenses and capital requirements; and

•        regulation.

You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

ENFORCEABILITY OF CIVIL LIABILITIES

We are incorporated under the law of the State of Wyoming; however, all our executive officers and directors and some of the experts named in this prospectus are located in Brazil and all or a substantial portion of their assets or of our assets are located outside the United States. As a result, it may be difficult for stockholders to effect service of process on our officers, directors and experts who are located outside of the United States, and any judgment obtained in the United States against any of our officers, directors or such experts may not be collectible within the United States. See “Risk Factors — Risks Related to Doing Business in Brail — Enforcement risks related to civil liabilities due to our subsidiaries and our officers and directors located in Brazil”.

RISK FACTORS

The following section discusses material risks and uncertainties that could adversely affect our business and financial condition. Investing in our securities involves substantial risks. You should carefully consider the following risk factors, as well as all of the other information contained in this prospectus, including “Management’s Discussion and Analysis of the Financial Condition and Results of Operations” and the combined consolidated financial statements and related notes thereto included elsewhere in this prospectus, before deciding to invest in our common stock.

Risks Related to Our Business and Industry

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, 2023 and 2022. 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 $0.6 million for the three months ended March 31, 2024, $4.7 million for the year ended December 31, 2023, and we recorded a net profit of $0.4 million for the year ended December 31, 2022. As of March 31, 2024 and December 31, 2023, the Company had negative working capital of approximately $5.7 million and $5.4 million. In its report on our financial statements for the years ended December 31, 2023 and 2022, our independent registered public accounting firm included an explanatory paragraph stating that our accumulated losses, driven by increased company investments during fiscal year ended December 31, 2023, raise substantial doubt about our ability to continue as a going concern. Our management has implemented various efforts to improve liquidity and conserve cash. If we are unable to obtain sufficient funding, increase revenue and reduce operating expenses, our business, prospects, financial condition and results of operations will be materially and adversely affected and we may be unable to continue as a going concern. If we are unable to continue as a going concern, we may have to liquidate 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 lose all or a part of their investment.

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.

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 adversely impacted if we are not successful in introducing innovative products in response to changing consumer demands or to new product introductions by our competitors. If we are unable to build and sustain brand loyalty offering recognizably superior product quality, we may be unable 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 efficiency and reduce expenses. If we are unable to execute these initiatives as planned, we may not realize all or any of the anticipated benefits, which could adversely 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, 2022, one wholesale customer represented 23.7% of our revenue. As of December 31, 2022, two wholesale customers represented approximately 17.9% and 12.6% of accounts receivable, net.

For the year ended December 31, 2023, one wholesale customer represented approximately 10.1% of our revenues. As of December 31, 2023, two wholesale customers represented approximately 10.1% and 9.1% of accounts receivable, net, respectively.

For the three months ended March 31, 2024, 4 wholesale customers each represented approximately 18.5% and 14.5% and 14.5% and 12.0%, and of our revenues and approximately 18.5% and 14.5% and 14.5% and 12.0% of our accounts receivable, 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.

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 fully 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 damage our reputation and the quality and safety of our products. Disputes with significant suppliers, including disputes regarding pricing or performance, could adversely affect our ability to supply products to our customers and could materially and adversely affect our sales, financial condition, and results of operations. Failure to take adequate steps to mitigate the likelihood or potential negative 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 adversely 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 three months ended March 31, 2024, 4 vendors accounted for approximately 75%, 15%, 5% and 5% of the Company’s accounts payable. For the year ended December 31, 2023, 4 vendors accounted for approximately 45%, 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 adversely 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 adverse effect on our business results and the value of our brands.

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 in the event of 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. Termination of these agreements by licensor, or breach thereof, may negatively impact our ability to continue to use such brands and have an adverse effect on our sales and therefore revenues.

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 damage our reputation. If we do not maintain the favorable consumer perception of our licensed brands, our business results could be negatively 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 29 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 impact our prices, revenues and profitability.

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.

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.

Significant COVID-19-related changes in the political conditions in markets in which we manufacture, transport, sell or distribute our products (including quarantines, import/export restrictions, price controls, governmental or regulatory actions, closures or other restrictions that limit or close our operating and manufacturing facilities, restrict our employees’ ability to travel or perform necessary business functions or otherwise prevent our third-party partners, suppliers, or customers from sufficiently staffing operations, including operations necessary for the production, transportation, distribution, sale, and support of our products) could adversely impact our operations and results.

We are subject to various federal, state, local, and foreign environmental laws and regulations. Our failure to comply with environmental laws and regulations could subject us to lawsuits, administrative penalties, and civil remedies. 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 improve our energy efficiency and other sustainability goals, or if we chose to take actions to achieve 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.

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 and recorded a net loss of US$4,698,529 for our fiscal year ended December 31, 2023. 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 substantial 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 two (2) of such lawsuits. The Company is currently exposed to a total amount of US$15,996.00 for the two (2) 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 damages and expenses resulting from claims 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 profitability or net losses. Employee claims against us create legal and financial liability and negative publicity that could adversely affect us and divert our financial and management resources that would otherwise be used to benefit 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.

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 have not been a defendant in 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 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 the we have been wrongfully associated with these claims 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 assure you that such a lawsuit will not be filed against us, and we cannot guarantee that our internal controls and training will be fully effective in preventing claims and/or how such claims, if and when brought against us, will affect our reputation. Claims for products liability could be substantial and a successful claim for products liability could have a material adverse 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.

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 negatively affect our liquidity and restrict our operations. Our competitors may be willing or able to pay more than us for acquisitions, which may cause us to lose 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 adverse 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.

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.

On August 14, 2018, the President of Brazil approved Law No. 13,709/2018 (Lei Geral de Proteção de Dados), or the LGPD, that became effective in 2020 The LGPD is a comprehensive data protection law establishing general principles and obligations that apply across multiple economic sectors and contractual relationships. The LGPD establishes detailed rules for the collection, use, processing and storage of personal data and will affect all economic sectors, including the relationship between customers and suppliers of goods and services, employees and employers and other relationships in which personal data is collected, whether in a digital or physical environment.

All companies in Brazil are subject to laws and regulations relating to the collection, use, retention, security, and transfer of information, including the personally identifiable information of our employees and our customers and their respective customers. As with the other laws and regulations noted above, 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.

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 treatment 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 claims and investigations, even if they are unfounded, may be expensive to defend, involve negative publicity and substantial diversion of management time and effort, and could result in significant judgments against 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.

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. Our payment processing activities are not subject to service taxes (Imposto Sobre Serviços, or ISS).

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 12 for a discussion of the risks pertaining to the tax benefits that the company is entitled to.

In addition, Brazilian government authorities at the federal, state and local levels are considering changes in tax laws in order to cover budgetary shortfalls resulting from the recent economic downturn in Brazil. If these proposals are enacted they may harm our profitability by increasing our tax burden, increasing our tax compliance costs, or

otherwise affecting our financial condition, results of operations and cash flows. Tax rules in Brazil, particularly at the local level, can change without notice. We may not always be aware of all such changes that affect our business, and we may therefore fail to pay the applicable taxes or otherwise comply with tax regulations, which may result in additional tax assessments and penalties for our company.

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.

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 litigation or future litigation or investigation significantly exceed our indemnity rights, they could have a material adverse effect on our business, financial condition and results of operations and the price of our shares. Further, even if we adequately address issues raised by an inspection conducted by an agency or successfully defend 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 claims, which could adversely 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, the rapidly changing payment processing industry and the markets in which we offer our services. 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 laundering laws and regulations could result in criminal liability, administrative and civil lawsuits, significant fines and penalties, forfeiture of significant assets, as well as reputational harm.

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.

Requirements associated with being a public company in the United States will require significant company resources and management attention.

Upon completion of this 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 NYSE American. 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 restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely 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) are both expected to be implemented between the first and second 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 adversely impacted if any of our key retail partners experience any operational difficulties 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 difficulties may fail to make such investments or delay 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 shortage 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 unable to find a sufficient number of other retail outlets for our products to sustain the same level of sales and revenue.

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 adversely 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 problems could negatively impact consumer confidence in our products and hurt our brand image, which is critical 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 forced to reduce or cease their production, undertake corrective and preventive actions, shut down their operations or file for bankruptcy due to financial instability, difficulties or problems 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 negatively impact our profitability. Additionally, our business could be adversely affected if any of these third parties fail 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 able 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 disruptions to our operations, increase our costs and decrease our profitability.

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 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. 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 noncompliant, and we could face recalls or enforcement actions. If we need to find alternative manufacturing facilities, we could be subject to disruptions in supply, which could negatively impact our sales.

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..

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 breaches of these covenants could result in a default under our credit facilities and any future financing agreements into which we may enter. If not waived, defaults 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 unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to grow or support our business and to respond to business challenges could be significantly limited.

As a general rule, in our operations we have to pay our suppliers within 15 days after delivery of our products and we receive payment from our clients within 60 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 divert significant time and

attention of our senior management in the development of such new initiatives to the detriment of our existing business. Furthermore, we may be directly exposed to new business risks or be subjected to enhanced 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 misconduct or were to be accused of such misconduct, our business and our reputation could be adversely 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.

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 economy, political environment and the confidence of investors and the general public in Brazil have been recently affected adversely by the ongoing investigations into allegations of money laundering and corruption being conducted by the Office of the Brazilian Federal Prosecutor and the Federal Police.

The outcome of these investigations remains uncertain, but they have had an adverse impact on the confidence and reputation of the companies involved, and on the general market perception of the Brazilian economy and political environment. We are not able to predict whether the ongoing investigations will result in further political and economic instability, or if new allegations against government officials and/or executives of private companies will arise in the future, adversely affecting us.

In January 2023, a new government, led by President Luiz Inácio Lula da Silva was inaugurated. Although the outline of his administration’s fiscal, monetary and economic policies are yet to be determined, as no concrete macroeconomic measures have been taken so far, there is an expectation that the new government will be leaning on left-wing political platforms than the previous administration.

Market and political researchers also share a widespread view that the government will increase its interference in the economy and may increase public spending to finance social protection programs. The Ministry of Economy is forecast to propose new budgetary rules to be submitted to Congress in order to reduce the current levels of government debt. It is unclear whether Mr. da Silva’s administration will be able to form a coalition and/or a legislative majority to be able to approve such initiatives.

In addition, any difficulties of the Brazilian government to obtain a majority vote in the national congress to implement reforms, may result in congressional gridlock and political unrest, which could adversely affect us.

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 4,62%, 5.79%, 10.06%, 4.52% and 4.31% in 2023, 2022, 2021 and 2020, respectively.

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 60 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 (including this offering), 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. Despite the decrease in the Selic rate since August 2023, in the most recent announcement in June 2024 BACEN kept the Selic rate at 10.50%. We expect that the Selic rate will not decrease further in 2024 and believe we

will operate in the same financial scenario as the previous year. We cannot accurately forecast whether inflation levels will decrease and that the Selic rate will follow its recent 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 negatively 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:

(i)     In 2021, the Brazilian Real depreciated by 6.8% against the U.S. dollar and on December 30, 2021, the Brazilian real/U.S. dollar exchange rate was R$5.5749 per US$1.00.

(ii)    In 2022, the Brazilian Real appreciated by 6.9% against the U.S. dollar and on December 30, 2022, the Brazilian real/U.S. dollar exchange rate was R$5.2860 per US$1.00.

(iii)   In 2023, the Brazilian Real appreciated by 10% against the U.S. dollar and on December 29, 2023, the Brazilian Real/U.S. dollar exchange rate was R$4.8521 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.

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, Europe 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 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 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 United States, including the impact of the COVID-19 pandemic, the war involving Russia and Ukraine, the trade war between the United States and China, crisis in Europe and other countries, as well as the consequences of the departure of the United Kingdom from the European Union affected the global economy, producing 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.

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.

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.

•        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.

•        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.

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 all 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.

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.

Risks Related to the Offering, Our Securities and the Securities Markets

There is no existing market for our shares, and we do not know whether one will develop to provide you with adequate liquidity. If the trading price of our shares fluctuates after this offering, you could lose all or a significant part of your investment.

Prior to this offering and the sales of our common stock by the selling shareholders pursuant to the Resale Prospectus filed contemporaneously herewith, there has not been a public market for our shares. If an active trading market does not develop, you may have difficulty selling any of our shares that you buy. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on the NYSE American, or otherwise or how liquid that market might become or if it will be maintained active or sustained in the long term. The initial public offering price for our shares will be determined by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our shares at prices equal to or greater than the price paid by you in this offering or at all.

In addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of our shares, regardless of our operating performance. In the past, following periods of volatility in the market price of certain companies’ securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or results of operations. If a market does not develop or is not maintained, the liquidity and price of our shares could be seriously harmed.

Trading in our securities may be prohibited if the PCAOB determines that it cannot inspect or fully investigate our auditors, and as a result, NYSE American may determine not to list or to delist our securities.

Our auditor, Russell Bedford GM Auditores Independentes S/S, an independent registered public accounting firm headquartered in Brazil, is currently subject to PCAOB inspections and has not been inspected by the PCAOB on a regular basis. However, Russell Bedford GM Auditores Independentes S/S has been registered with the PCAOB since October 6, 2020 and is currently subject to, and available for, PCAOB inspection at any time. If the PCAOB is unable to inspect the work papers of our accounting firm, such lack of inspection could cause trading in our common stock to be prohibited, and as a result, an exchange may determine not to list or to delist our common stock. The delisting and the cessation of trading of our common stock, or the threat of our common stock being delisted and prohibited from being traded, may materially and adversely affect the value of your investment. If our auditors fail to timely meet the PCAOB inspection requirement, our common stock may be prohibited from trading on the NYSE American.

Sales of substantial amounts of our shares in the public market, or the perception that these sales may occur, could cause the market price of our shares to decline.

Sales of substantial amounts of our shares in the public market, or the perception that these sales may occur, could cause the market price of our shares to decline. This could also impair our ability to raise additional capital through the sale of our equity securities.

Under our articles of incorporation, we are authorized to issue up to 30,000,000 shares with a par value of $0.001 per share. We and our existing shareholders have agreed in connection with this offering, subject to certain exceptions, not to offer, sell, or dispose of any shares of our share capital or securities convertible into or exchangeable or exercisable for any shares of our share capital during the 180-day period following the date of this offer without their prior written approval. We cannot predict the size of future issuances of our shares or the effect, if any, that future sales and issuances of shares would have on the market price of our shares.

Following the completion of this offering, we will have outstanding 14,772,568 shares of common stock, or 15,147,568 shares of common stock if the underwriters exercise in full their option to purchase additional shares.

Our controlling shareholder will, in the aggregate, own at least 60.3% of our issued shares and nonetheless will control all matters requiring shareholder approval. Our controlling shareholder also has the right to nominate a majority of our board and consent rights over certain corporate transactions. This concentration of ownership limits your ability to influence corporate matters.

Prior to the date of this prospectus, Mr. Paulo R. Bonifacio, our President and controlling shareholder, hold approximately 73.4% of our outstanding shares of common stock. Immediately following the completion of this offering, our controlling shareholder will own approximately 60.3% of our outstanding shares and will continue to be our controlling shareholder following the completion of this offering. As a result, the controlling shareholder will control a majority of our voting power and will have the ability to control matters affecting us which are submitted to a vote of shareholders for approval. Mr. Paulo R. Bonifacio will have the power to, among other matters, elect the members of our board of directors and of our subsidiaries in Brazil, set our management policies and exercise significant control over the outcome of all decisions at our shareholders’ meetings. He will also be able to direct our actions in areas such as business strategy, financing, distributions, acquisitions and dispositions of assets or businesses.

The interests of our controlling shareholder may potentially conflict with, or differ from, the interests of our other shareholders. For example, our controlling shareholder may cause us to make acquisitions that increase the amount of our indebtedness or outstanding shares, sell revenue-generating assets, decrease our level of working capital or inhibit change of control transactions that may benefit other shareholders. He may also pursue acquisition opportunities for himself that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us. Such potential conflicts of interest could cause the interests of our controlling shareholder to differ from the interests of our other shareholders.

As long as Mr. Paulo R. Bonifacio continues to own a majority of our outstanding shares, he will have the power to significantly influence all our corporate decisions and may be able to effect or inhibit changes in the control of our company.

Given the capital needs to finance and sustain the growth of the company, Mr. Paulo R. Bonifacio and our management may have to propose a retention of cash and not recommend the distribution of dividends to shareholders in order for the company to have sufficient funds to meet its financial, working capital and investment needs.

We are a “controlled company” as defined under NYSE American listing standards, and we are permitted to elect to rely on certain exemptions from corporate governance rules; although we do not expect to rely on the “controlled company” exemption under the listing standards of the NYSE American, we expect to have the right to use such exemption and therefore we could in the future avail ourselves of certain reduced corporate governance requirements.

We are a “controlled company” as defined under the NYSE American listing standards because our shareholder, Mr. Paulo R. Bonifacio, currently beneficially owns approximately 73.4% of the voting power prior to this offering and the sales of our common stock by the selling shareholders pursuant to the Resale Prospectus filed contemporaneously herewith, and will own approximately 60.3% of the voting power at the completion of this offering. As long as Mr. Paulo R. Bonifacio continues to own at least 50% of the voting power of our Company, we will continue to be a controlled company under NYSE American listing standards. For so long as we are a controlled company under that definition, we are permitted however to elect to rely on certain exemptions from corporate governance rules, including:

•        an exemption from the rule that a majority of our board of directors must be independent directors;

•        an exemption from the rule that the compensation of our chief executive officer must be determined or recommended solely by independent directors; and

•        an exemption from the rule that our director nominees must be selected or recommended solely by independent directors.

Although we do not intend to rely on the controlled company exemptions provided under the NYSE American listing standards, we expect to have the right to use such exemptions in the future. To the extent we use the controlled company exemption under the NYSE American listing standards in the future, a majority of the members of our board of directors may not be independent directors, and each of the Compensation Committee and the Nominating and Corporate Governance Committee may not consist solely of independent directors. As a result, you may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our shares and our trading volume could decline.

The trading market for our shares will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no or too few securities or industry analysts commence coverage of our company, the trading price for our shares would likely be negatively affected. In the event securities or industry analysts initiate coverage, if one or more of the analysts who cover us downgrade our shares or publish inaccurate or unfavorable research about our business, the price of our shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our shares could decrease, which might cause the price of our shares and trading volume to decline.

The market price and trading volume of our common stock may be volatile, which could result in rapid and substantial losses for our stockholders and you may lose all or part of your investment.

Even if an active trading market develops, the market price of our common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. If the market price of our common stock declines significantly, you may be unable to resell your shares at or above your purchase price, if at all. The market price of our common stock may fluctuate or decline significantly in the future and you could lose all or part of your investment.

Certain broad market and industry factors may materially decrease the market price of our common stock, regardless of our actual operating performance. The stock market in general has from time to time experienced extreme price and volume fluctuations, including recently. In addition, in the past, following periods of volatility in the overall market and decreases in the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Our ability to pay dividends to our shareholders is restricted by applicable laws and regulations and by the ability of our subsidiaries to pay dividends to us.

Our revenues depend on the dividend stream coming out of our Brazilian subsidiaries.

In order to increase our cash position and strengthen our working capital levels and reduce third-party capital needs, we currently intend to retain our future earnings, if any, for the foreseeable future, to fund the operation of our business and future growth. We and our subsidiaries do not intend to pay any dividends to holders of our shares for a period that may exceed 5 years from this offer. As a result, capital appreciation in the price of our shares, if any, will be your only source of gain on an investment in our shares.

In addition to what is described above, we cannot guarantee that we will be able to pay dividends to holders of our shares following this offering. Holders of our shares are only entitled to receive cash dividends to the extent our board of directors out of funds legally available for such payments. The declaration, payment and amount of any future dividends will be made at the discretion of our board of directors and will depend upon, among other things, the results of operations, cash flows and financial condition, operating and capital requirements, and other factors as our board of directors considers relevant. In addition, our holding company structure makes us dependent on the operations and payment of dividends of our subsidiaries. There is no assurance that future dividends will be paid, and if dividends are paid, there is no assurance with respect to the amount of any such dividend.

Brazilian corporate legislation imposes certain restrictions on dividend distribution, such as a mandatory offset of losses and payment of corporate income taxes prior to any such distribution.

New investors in our shares will experience immediate and substantial book value dilution after this offering.

The initial public offering price of our shares will be substantially higher than the pro forma net tangible book value per share of the outstanding shares immediately after this offering. Based on an assumed midpoint initial public offering price of $4.50 per share (the midpoint of the price range set forth on the cover page of this prospectus) and our net tangible book value as of December 31, 2023, if you purchase our shares in this offering you will pay more for your shares than the amounts paid by our existing shareholders for their shares and you will suffer immediate

dilution of approximately $4.27 per share in pro forma net tangible book value. As a result of this dilution, investors purchasing our shares in this offering may receive significantly less than the full purchase price that they paid for the shares purchased in this offering in the event of a liquidation.

The offering price of the primary offering and resale offering could differ.

The offering price of our common stock in the initial public offering has been determined by negotiations between us and the underwriters. The offering price in the initial public offering bears no relationship to our assets, earnings or book value, or any other objective standard of value. The selling shareholders may sell the resale shares at prevailing market prices or privately negotiated prices after close of the offering and listing of our common stock on the NYSE American. Therefore, the offering prices of the initial public offering and resale offering could differ. As a result, the purchasers in the resale offering could pay more or less than the offering price in the primary offering.

The resale by the Selling Shareholders may cause the market price of our common stock to decline.

The resale of shares of our common stock by the selling shareholders, as well as the issuance of our common stock in this offering could result in resales of our common stock by our current shareholders concerned about the potential dilution of their holdings. In addition, the resale by the selling shareholders after expiration of the lock-up period could have the effect of depressing the market price for our common stock.

The Selling Shareholders will be able to sell their shares after the completion of this offering subject to restrictions under Rule 144 under the Securities Act, which could impact the trading price of our Common Stock.

12,000,000 shares of our common stock are issued and outstanding as of the date of this prospectus. Our selling shareholders may be able to sell their shares of common stock under Rule 144 after the completion of this offering. Because these selling shareholders have paid a lower price per share than participants in this offering, when they are able to sell their pre-IPO shares under Rule 144, they may be more willing to accept a lower sales price than the IPO price, which could impact the trading price of our common stock following the completion of the offering, to the detriment of participants in this offering. Under Rule 144, before the selling shareholders can sell their shares, in addition to meeting other requirements, they must meet the required holding period.

We may need to raise additional capital in the future by issuing securities or may enter into corporate transactions with an effect similar to a merger, which may dilute your interest in our share capital and affect the trading price of our shares.

We may need to raise additional funds to grow our business and implement our growth strategy through public or private issuances of shares or securities convertible into, or exchangeable for, our shares, which may dilute your interest in our share capital or result in a decrease in the market price of our shares. In addition, we may also enter into mergers or other similar transactions in the future, which may dilute your interest in our share capital or result in a decrease in the market price of our shares. Any fundraising through the issuance of shares or securities convertible into or exchangeable for shares, or the participation in corporate transactions with an effect similar to a merger, may dilute your interest in our capital stock or result in a decrease in the market price of our shares.

We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.

Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our shares. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, financial condition and results of operations.

The future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise will dilute all other stockholdings.

We have reserved a total of 815,000 shares of common stock in our 2023 Equity Incentive Plan to fulfill any future grants under the Company’s 2023 Equity Incentive Plan or other future grants by the Company to its employees, officer or directors.

As of the date of this Prospectus, we have granted to certain director and employees of the Company or its subsidiaries (the “Beneficiaries”) restricted stock units for an aggregate total of 415,000 shares of our common stock.

USE OF PROCEEDS

We estimate that our net proceeds from the sale of our shares in this offering will be approximately $9,625,000, assuming an initial public offering price of $4.50 per share, which is the midpoint of the range set forth on the cover page of this prospectus, and assuming no exercise of the underwriter’s over- allotment option to purchase additional shares.

We intend to use the net proceeds from this in the following ways:

(i)     85% of the net proceeds for general corporate purposes including working capital, capital expenditures and operating expenses such as procurement of IT systems, marketing and sales expenses, supply chain expenses, and logistics; and

(ii)    15% of the net proceeds to acquire additional resources to support our product developments and business growth strategies.

Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition and our actual use of proceeds may vary based upon management’s judgement. As of the date of this prospectus, we cannot predict with complete certainty all of the particular uses for the net proceeds to be received upon the closing of this offering or the actual amounts that we will spend on the uses set forth above.

Our management will have broad discretion in the application of the net proceeds from this offering, and investors will be relying on the judgment of our management regarding the application of those net proceeds. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business.

DIVIDEND POLICY

We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings, if any, to fund the development and expansion of our business and we do not anticipate paying any cash dividends in the foreseeable future. Any future determination related to dividend policy will be made at the discretion of our Board of Directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, tax considerations, legal or contractual restrictions, business prospects, the requirements of current or then-existing debt instruments, general economic conditions and other factors our Board of Directors may deem relevant.

CAPITALIZATION

The following table sets forth our capitalization as of March 31, 2024 presented:

•        On an actual basis; and

•        On a pro forma as adjusted basis, to give further effect to (i) the sale of 2,500,000 shares of common stock by us in this offering at the assumed midpoint initial public offering price of $4.50 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and assuming no exercise of the underwriters’ over-allotment option to purchase additional shares; (ii) 100,068 shares of common stock issuable upon conversion of the 2023A Convertible Note, 2023B Convertible Note, 2023C Convertible Note, and 2024 Convertible Note and accrued payment-in-kind interest of approximately $23,300 as of March 31, 2024, at a conversion price of $2.93 (equal to 65% of the offering price per share of common stock in this offering, which is assumed to be $4.50 per share, the midpoint of the estimated offering price range set forth on the cover page of this prospectus); and (iii) 177,500 restricted stock units granted to certain employees of the Company.

You should read this table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and related notes included elsewhere in this prospectus.

Each $1.00 increase or decrease in the assumed midpoint initial public offering price of $4.50 per share (which is the midpoint of the range set forth on the cover page of this prospectus) would increase or decrease each of cash, total stockholder’s equity and total capitalization on an as adjusted basis by approximately $2,300,000, assuming the number of shares offered, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

Each $1.00 share increase or decrease in the number of shares offered in this offering would increase or decrease each of cash, total stockholder’s equity and total capitalization on an as adjusted basis by approximately $2,300,000, assuming that the price per share for the offering remains at $4.50 (which is the midpoint of the range set forth on the cover page of this prospectus), and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.

The pro forma as adjusted information set forth above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing.

DILUTION

If you invest in our common stock in this offering, your interest will be immediately diluted to the extent of the difference between the initial public offering price per share of common stock in this offering and the net tangible book value per share of our common stock after this offering.

Our historical net tangible book value as of March 31, 2024 was $(6,718,009), or approximately $(0.56) per share of our common stock.

“Net tangible book value” is total assets minus the sum of liabilities and intangible assets. “Net tangible book value per share” is net tangible book value divided by the total number of shares outstanding on March 31, 2024.

After giving further effect to the sale of 2,500,000 shares in this offering at an assumed midpoint initial public offering price of $4.50 per share, the midpoint of the range set forth on the cover page of this prospectus, and assuming no exercise of the underwriter’s over- allotment option to purchase additional shares, and after deducting the underwriting discount and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2024 would have been approximately $3,351,991, or $0.23 per share. This represents an immediate increase in pro forma as adjusted net tangible book value of $10,070,000 or $0.84 per share to the existing stockholders and an immediate dilution of $4.27 per share to new investors. The following table illustrates this per share dilution:

The following table illustrates this dilution:

A $1.00 increase (decrease) in the assumed midpoint initial public offering price of $4.50 per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by $0.16 ($0.16), and would increase (decrease) dilution per share to new investors in this offering by $1.03 ($1.03), assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. Similarly, each increase (decrease) of 1.0 million shares of common stock in the number of shares offered by us would increase (decrease) our as adjusted net tangible book value per share after this offering by approximately $0.35 ($0.35) per share and decrease (increase) the dilution to new investors by approximately $1.18 ($1.18) per share, assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discount and estimated offering expenses payable by us. The pro forma as adjusted information set forth above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing.

The following table shows, as of March 31, 2024, after giving effect to the number of shares of common stock purchased from us, the total consideration paid to us and the price paid per share by the existing stockholders and by new investors purchasing shares of common stock in this offering at an assumed midpoint initial public offering price of $4.50 per share, before deducting the underwriting discount and estimated offering expenses payable by us, and assuming no exercise of the underwriter’s over-allotment option or conversion of the convertible notes (in thousands, except per share amounts and percentages):

The above table and discussion includes 12,000,000 shares of common stock outstanding as of March 31, 2024, and excludes:

•        815,000 shares of common stock reserved for issuance upon the exercise of incentive stock options (ISOs) under the 2023 Equity Incentive Plan and non-qualified stock options (NSOs), at a weighted average exercise price of $4.50, or other securities that may be granted under the 2023 Equity Incentive Plan.

•        375,000 shares reserved for the exercise of the underwriter’s over-allotment option.

•        Conversion of $293,200 convertible notes into shares of common stock (100,068 as of the date hereof at a conversion price equal to 65% of the offering price per share of common stock in this offering. which is assumed to be $4.50 per share).

MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those financial statements appearing elsewhere in this prospectus.

This discussion and analysis contains certain forward-looking statements that involve risks and uncertainties, including, without limitation, those factors set forth under the “Cautionary Statement Concerning Forward-Looking Statements”, “Presentation of Financial Information”, and “Risk Factors” sections of this prospectus that could cause actual results to differ materially from those anticipated in these forward-looking statements. Additionally, our historical results are not necessarily indicative of the results that may be expected for any future period.

Overview

BRB Foods Inc. (the “Company”) is a holding company incorporated in the State of Wyoming which indirectly owns BR Brands S.A. (formerly BR Brands Ltda.), its food company subsidiary, and Boni Logistica Ltda., its logistics and distribution company subsidiary, which are both incorporated in Brazil. Through our operational subsidiaries based in São Paulo, Brazil, we aim to be present in all meals of Brazilian families, by introducing healthy and quality food. We currently provide our products in seventeen (17) Brazilian states through fourteen (14) integrated distribution centers (“IDCs”). Aligned with Brazilians’ eating habits and with the search for natural foods for a healthy life, we offer products based on grains, cereals, milk protein, vegetable protein, vegetables, and fruits. Our products are cultivated, selected, and prepared within the highest operational standards.

In 2023, we entered into an agreement with Unilever for the creation and launch of over 65 new products to sell across Brazil under the brands Arisco, Maizena, Knorr and Mae Terra, one of which was launched in 2023. We plan to launch the remaining 64 products in July 2024, after which we will offer 68 products across Brazil” under four (4) well-known brands in Brazil through 14 distribution centers countrywide. Additionally, due to our management’s logistics experience, our distribution capabilities continue to be further improved. We consider our distribution capabilities a key aspect of our business as it allows us to provide improved delivery services to our customers while increasing efficiency and sustainability.

The Company successfully expanded its customer base and penetrated new markets, laying a robust foundation for continued growth.

Product Portfolio Expansion:

In 2023, we signed an agreement with Unilever for the creation and launch of over 65 different products such as rice, corn, potatoes, pasta, natural sugars, cocoa and cereals, under the brands Arisco, Maizena, Knorr and Mae Terra, one of which was launched in 2023. The remaining 64 products will be launched in July of 2024, which when combined with our existing 3 products and one new product, provides us with a portfolio totaling 68 products. This comprehensive portfolio is expected to significantly increase revenue and improve EBITDA.

Advanced Conversions:

BRB Foods is in the advanced stages of negotiations to start operations with three large companies, including two multinationals and one national company. These partnerships would enhance our current portfolio with complementary products such as desserts, cookies, and coffee. There can be no assurance that any of these negotiations will result in agreements or increased revenue or profits.

Operational Update

During the year ended December 31, 2023, we improved the strength, structure, and the capabilities of our Company. Our use of well-known brands has proven to be effective with sales of our existing products and when launching new products and entering new food categories. Our sell-out workforce is focused on increasing the end-customer experience, which increases our final sales volumes and brand awareness. Our distribution efficiency in our fourteen (14) integrated distribution centers (“IDC”) continues to play a key role in our operation as it makes our company more competitive and sustainable. Nevertheless, a key challenge we face is our cash mismatch.

We consider our food operations with emphasis on distribution and logistics to be a viable business model. A key challenge remains our cash flow management. New investments are expected to support our working capital needs and facilitate growth. With access to new cash infusions to be used as working capital, we believe we will be able to generate the necessary cashflow to meet our existing demand and realize our projected growth.

During the year ended December 31, 2023, we reached important milestones. We increased our sales presence to seventeen (17) Brazilian states and completed the homologation process of fourteen (14) strategically located IDCs, giving us the ability to manufacture, sell and distribute our products to all of Brazil.

We also acquired additional licensing for certain existing products and new products launches. Consequently, we now sell 68 licensed products under four (4) globally recognized brands in the Brazilian market, which is a significantly increased product catalog compared to selling only 3 products in fiscal 2022.

We believe our product portfolio expansion and distribution operations will enable us to increase our gross margin, improve cash management and increase efficiency and sustainability of our entire business operation.

The Company’s fiscal year 2022 results underscore our ability to adapt and innovate in a volatile economic environment. Despite setbacks in fiscal 2023 due to external factors, the Company’s strategic focus on optimizing operational efficiency and pursuing aggressive growth strategies positions it well for future success. With a comprehensive new product portfolio and advanced logistics, we believe we are poised for a strong recovery and sustained growth as the Brazilian market conditions improve.

External Economic Environment:

External challenges such as limited credit availability and high financing costs led to a 29.4% decline in 2023 revenues as compared to 2022, and we recorded a loss of USD 649,317 in 2023. At the end of FYE 2022, Brazil’s Central Bank set the monetary policy rate at 12.73%, up from 4.91% in the previous year. This means an increase in the cost of working capital financing of approximately 30% per year to advance our receivables, which also reduced the availability of credit lines, and significantly increased financial expenses from US$772,952 in fiscal year 2022 to US$1,466,976 in fiscal year 2023.

High interest rates in Brazil have a significant impact on our financial condition, particularly on our balance sheet. As interest rates have increased, our borrowing costs have also increased and these borrowing cost increases have affected various aspects of our financial performance including (i) higher interest rates leading to higher inventory storage costs, as we need to finance our inventory storage for longer periods of time, this increases our cost of goods sold and reduces our profit margins; (ii) we recorded higher financing costs for our accounts payable, as our suppliers in Brazil pass on their increased borrowing costs to us; (iii) higher debt servicing costs, which reduce our cash flows and increase our debt-to-equity ratio; and (iv) higher accrued interest expenses, further reducing our cash flows

To fund these additional costs attributable to increased interest rates in Brazil, we have implemented various strategies including (i) we pass on a portion of the increased costs to our customers through our product pricing; (ii) the expansion of our portfolio of products to dilute fixed costs relating to our operations; and (iii) we are prioritizing our cash flows to ensure timely debt servicing and maintaining adequate cash reserves.

The cost of debt is not transferable to our customers, and the increased borrowing costs directly reduce our cash generation capacity. This limits our growth potential, as we need to allocate a larger portion of our cash flows towards debt servicing, rather than investing in our operations and expansion.

Strategic Investments:

General and administrative expenses increased by 70.4% from 2023 to 2022, along with elevated personnel and sales and marketing costs, were part of a deliberate strategy to strengthen long-term growth objectives.

EBITDA:

EBITDA significantly decreased from US$ 1,220,258 in 2022 to US$ 3,255,654 in 2023, reflecting the costs associated with scaling our operations and adapting to a challenging economic scenario.

Strategic Operational Decisions:

We decided in Q1 of 2024 to reduce sales temporarily until the complete portfolio was ready, opting for a complete structuring to resume growth with improved profit margins. Instead of concentrating on boosting sales of existing products, the Company strategically redirected its resources to establish new distribution channels for innovative products, broadening its offerings and paving the way for a strategic shift towards higher-margin products. This move anticipated the reduced costs associated with the availability of the proceeds of this offering, in order to later have the basis to implement a more profitable and sustainable business model.

Logistics Business:

We expect Boni Logística Ltda, our logistics operations subsidiary in Brazil, to facilitate our product transfers to 14 IDCs, thereby ensuring we effectively satisfy customer supply needs.

Logistical Advancements:

Boni Logística’s robust infrastructure will facilitate product transfer to 14 distribution centers, ensuring efficient customer supply and exploring new market opportunities for increased profitability.

Conclusion

BRB Foods’ 2022 results underscore the Company’s ability to adapt and innovate in a volatile economic environment. Despite setbacks in 2023 due to external factors, the Company’s strategic focus on optimizing operational efficiency and pursuing aggressive growth strategies positions it well for future success. With a comprehensive new product portfolio and advanced logistics, BRB Foods is poised for a strong recovery and sustained growth as market conditions improve.

We believe that our strategic focus and action plan illustrate BRB Foods’ resilience, strategic decisions, and future potential, providing a robust platform for stakeholders to understand the company’s trajectory and investment opportunities.

Constant Innovation

We prioritize innovation, continually seeking new opportunities and partnerships to meet consumer demands and stay ahead of market trends. We believe we stand out in our industry due to our daily and constant search for innovation, improving ourselves through research, and engaging with product development. We monitor market trends and we are always looking for new ideas, opportunities, partnerships and creating new products to surprise, care for and satisfy consumer desires.

Operational Cornerstones

Excellence in supply chain:    Due to the nature of our business, we need to have a well-implemented structure for all stages of the production chain. From purchasing inputs, to manufacturing, logistics (receipt, storage and delivery) and planning, the Company has a team of qualified professionals leading these activities, so that BR Brands S.A. (formerly BR Brands Ltda), our subsidiary in Brazil, has a smooth and efficient flow of products, utilizing the partnership and support of Boni Logística Ltda., our subsidiary in Brazil, for logistics operations.

Quality as the primary goal:    Our subsidiaries have teams dedicated to quality control, to ensure that the interactions between the end customer and the supermarket, in the B2B2C model, occurs efficiently and safely. These quality control teams also work at the point-of-sale, closely monitoring product shelves and everything occurring in retail establishments. As a result, the company believes it obtains a holistic view of the point of sale and can react quickly where necessary.

Conducting our business with high ethical standards, in compliance with applicable legislation is fundamental for the Company. For this reason, we select suppliers aligned with our values and commitments, who can contribute to building quality and long-term relationships.

Business Model

Developing categories and building brands

We are responsible for managing certain licensed brands with significant nationwide brand-recognition in Brazil, such as Knorr, Arisco, Maizena and Mãe Terra. Consequently, we verify our entire production and distribution process meets our quality control and sustainability standards. We recognize that our main focus is the point of sale, the point where our product’s relationship with the customer begins and the customer’s needs are satisfied.

Combining the strength of our licensed brands and the experience of our executives in the food and logistics sector, we were able to foster the expansion of our licensed brands to categories in which they were not previously present, despite the significant recognition these licensed brands had in Brazil.

The significant regionalization of brands in different product categories in Brazil, the result of tax and regulatory differences from state to state in Brazil, and the universality of the products that the Company began developing, presented us with the challenge of how to produce and sell product categories in Brazil — a large country.

Common brands in one region of Brazil may be unknown brands in other regions, creating a tangle of products with which we would come to compete with global strength products, such as Knorr and Maizena, and others of great national strength, such as Arisco and Mãe Terra.

Our Operations

Since we began operating in 2020, the Company has structured its processes to be based on pillars of the environmental, social, and corporate governance (“ESG”) philosophy, focusing on food safety, quality associated with excellence and recognition of our licensed brands and work safety. We work against child labor, avoid suppliers we are aware maintain poor workplace conditions, and respect the environment and employ best practices in our product quality.

We believe our products are cultivated, selected and prepared with the highest rigor and operational standards. Our products are carefully selected from their origin to their packaging, all while adhering to the strictest planting, harvesting and processing practices.

In addition to ensuring that production is carried out with the strictest standards, we verify compliance our product quality standards by analyzing product samples, storing products using the strictest product-storing criteria, and processing the products with adherence to the ESG pillars at all stages.

Considering the sales process is a central element of our business activities, our products are packaged and distributed seeking to engage the consumer by using clear and direct packaging communicating the quality and benefits of the product to perfect traceability from the package on the shelf to the arrival of the purchase of feedstock. To this end:

•        we identify opportunities, anticipate trends and propose a product portfolio to our customers;

•        from a matrix of products, we develop and certify suppliers — whether in accordance with our strict quality and standards, or customized to the specific requirements of each client;

•        we develop packaging and visual communication materials;

•        we register our products with major supermarket chains which sell our products;

•        we deliver our products through our own logistics division using vehicles we continuously monitor and track; and

•        through our own SAC, we believe we can satisfy our end customers.

Growth Strategy

Innovation, focus on the customer, sustainability, an agile cost-efficient structure, improved sales processes and customer experience, and absolute quality are the essential elements that we were able to strengthen during the fiscal year 2023, resulting in an improved relationship between the Company and Unilever, the licensor of our major brands. In 2024 we will continue to improve national distribution of certain products we sell which were previously regionalized and standardize distribution of these products nationally.

In 2023, we launched 4 new products under the “Maizena” brand, launched 2 new products under the “Arisco” brand. These additional product launches complement products we previously launched under the licensed “Knorr” brand. In 2023, the Company added 5 new products to its portfolio, which added to the existing 3 products.

In 2023, we agreed with Unilever to develop over 65 new products to sell across Brazil under the brands Arisco, Maizena, Knorr and Mae Terra, 1 of which were launched in 2023. We plan to launch the balance of this new portfolio in July 2024, after which we will offer 68 products across Brazil.

In addition, we are a vertically operated Company and must ensure we make good use of our assets, we have cohesion in our values and practices, we maintain win-win relationships in the value chain, and we cultivate leaders capable of adequately guiding our business.

Our strategic direction is based on strengthening as a national food company in Brazil and paving way for our international operations through profitable growth, expansion of our operational efficiency through optimization in our use of natural resources, reduction in our use of product packaging, and development of more nutritious products. Our projected business expansion occurs based on two key pillars:

•        Current business growth through geographic diversification: to this end, we pay particular attention to our product portfolio, product mix and distribution channels, taking advantage of our existing logistics network with a focus on agile processes.

•        Entry into new product categories that may occur organically or inorganically, focusing on products that have synergy with our current business: our entry into new product categories is focused on expanding the Company’s product portfolio with brands and products offering greater added value thereby increasing our current margins.

To sustain our growth strategy, the Company relies on a solid business model and a commercial strategy based on consistent investments in marketing, assertive pricing models, use of technology and new methodologies to meet market trends.

Innovation is also an important pillar of our strategy. In 2023, the Company successfully implemented an enterprise resource planning software covering all sectors of the company to enable our better handling of larger product order volumes.

The Company relies on the involvement of its management and employees in all areas of the Company’s growth strategy and vision. We foresee the Company’s future as a consolidated large national and international food company, with diversified operations, sustainable growth and respect for origins.

Strategic Planning

Our long-term strategic plan is anchored in maintaining a strong market presence in Brazil, managing our licensed brands, and ensuring excellent operational and financial management. We believe that it is up to leadership to meticulously study movements in the national and international markets — with projects such as those carried out in recent years, for the acquisition of leading companies — and capture opportunities related to innovation and differentiation in a sector of strong competition.

We recognize the importance of maintaining a long-term perspective that gives confidence to our stakeholders regarding the Company’s direction and vision.

Our strategic planning is based on the following pillars:

•        Strong performance in large consumer markets: the Company has a wide presence in the state of São Paulo, the largest consumer market in Latin America, added to the excellent long-term relationship with large retailers and supermarkets and is present in more than 2,500 points of sale.

•        Renowned brands: traditional and recognized brands, built over decades — a characteristic widely considered by consumers in their purchases, with 4 brands and 6 product families.

•        Excellent operational and financial management: The Company has its own factory and warehouse, duly equipped, with balance sheets being audited by external auditors since 2020 and excellence in operational controls.

•        Significant growth: relevant sales growth since 2020, through gains in market share and entry into new markets, with the implementation of measures to improve operating results. All this in a segment with high growth potential (convenience foods) for the coming years.

Our Priorities

Since the beginning of the subsidiary’s activities, directors, advisors and other leaders have mobilized in the construction of the Strategic Plan, validated by the Board of Directors and translated into actions, projects and investments designed to enhance efficiency, integration of operations and greater profitability of the Company and thus build an assertive long-term path, further strengthening the Company’s strengths.

Through this planning, we will reinforce management in the most sensitive areas and evolve in the areas conquered in recent years, always oriented to generate value in a consistent and planned way.

Achieving this vision is based on our competitive advantages and is guided by three central guidelines:

•        Global presence with strong brands — we are leaders among the main cash-and-carry companies in Greater São Paulo;

•        Focus on the main product categories in which we operate — strengthening the portfolio and its quality and convenience is part of a constant effort, which requires prioritization and focus on the main categories in which we operate;

•        Capturing opportunities — growth through investments in production, joint ventures and partnerships. We must, therefore, keep an eye out for all opportunities to grow and gain market share.

Critical Accounting Policies and Estimates

Estimates and accounting judgments

Our financial statements are prepared in accordance with US GAAP, requiring judgment and estimates that may affect reported figures. The preparation of the consolidated financial statements in accordance with US 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.

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

US 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 US 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 US 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.

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 deducted from the calculation basis of income tax and social contribution on net profits. Thus, the Company calculated the ICMS tax benefit in the accumulated total of US$1,043,814 as of December 31, 2022 (US$181,274 on December 31, 2021). 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 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:

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 B2B2C model, which means Business-to-Business-to-Consumer, in which it sells directly to the consumer, but the sale is facilitated by the retailer (supermarkets, wholesalers and retailers), so that the business model includes the entire chain.

In practice, the company buys raw materials from their producers, sends it to the factory, which performs the raw material quality process and sends it to the distribution partner.

In the case of Knorr beans, for example, BR Brands buy the raw material and manages the processing at the factory, in order to ensure the quality of the beans. Then, the product goes to bagging the package, with the customer’s visual identity, but designed by BR Brands which sells directly to wholesalers — among the customers are GPA, Carrefour and Sendas, for example.

At this stage, there is great operational synergy with Boni Logística, which delivers the finished product to the partner distributor. At the end of the day, we handle all stages of the supply chain — production, factory, industry, services and sale to the final consumer.

On another front, 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 with 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 logic, seeking to have the best possible relationship with the store manager as well as all employees directly involved, from the forklift to the lyricist. There is a constant search for space on the shelf, for the product to be available and for the presentation of the poster to the sales islands.

General and Administrative Expenses

We incur general and administrative expenses in the management and support of 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. The main groups that comprise financial result are interest on loans and debts and revenue from financial investments (cash equivalents).

Businesses

Income for the Three Months Ended March 31, 2024

In 2022, we implemented various management, equity and financial adjustments, in order to lay foundations for the company’s growth. During 2023, we realized benefits of these 2022 adjustment implementations.

Despite challenges we faced during fiscal year 2022, we managed to obtain the best result for the company in 2022. During fiscal year 2023, internal business processes were reviewed, costs related to products in the sales line were cut, but there were also investments in systems, quality and mainly in logistics so that we can distribute and sell all 68 products from 2024. Thus, the entire company was readjusted. to its new reality of distributing and selling a portfolio of 68 products throughout Brazil.

The most visible consequences for our business were the leadership obtained in the metropolitan region of São Paulo with the main wholesale companies, which were able to confirm during 2022 that we have full operational and financial capacity to meet all contracted orders.

In response to these events and changes in the scenario, we adopted short-term measures with an immediate impact on results and our operation: we were able to anticipate the main variations in commodity prices, passing on 100% of the gain obtained directly to the price, becoming more aggressive before the others, without harming our margin.

There were comprehensive and timely responses, which mitigated the impacts on our results, although they were not able to completely neutralize the negative effects on the business.

EBITDA significantly decreased from US$ 1,220,258 in 2022 to US$ 3,255,654 in 2023, reflecting the costs associated with scaling our operations and adapting to a challenging economic scenario.

Disregarding the non-recurring results and the costs incurred due to our strong growth, we generated operating profit, as shown below.

EBITDA

EBITDA is the earnings before interest, depreciation and amortization.

Results of Operations for the Three Months Ended March 31, 2024 and 2023

The following table shows the components of our results of operations for the three months ended March 31, 2024 and 2023:

For the three months ended March 31, 2024, compared to the three months ended March 31, 2023, our net revenue decreased from $4,941,252 to $40,463, representing a decrease of 99.2%. This decrease is related to significant reduction of the Company´s operation in Q1 2024. Instead of concentrating on boosting sales of existing products, the Company strategically redirected its resources to establish new distribution channels for innovative products, broadening its offerings and paving the way for a strategic shift towards higher-margin products with the complete portfolio of 68 products. This move anticipated the reduced costs associated with the availability of the proceeds of this initial public offering, in order to later have the basis to implement a more profitable and sustainable business model.”

EBITDA increased by 56.8% in the three-month period ended March 31, 2024, compared to the three-month period ended March 31, 2023, decreased from $(126,726) for the three-month period ended March 3, 2023 to $(54,732) for the three-month period ended March 31, 2024. Comparing EBITDA with net sales, a change occurred from (2.6)% over net sales for the three-month period ended March 31, 2023 to (135.3)% of net sales for the three-month period ended March 31, 2024. This decrease is mainly related to significant reduction of Company´s operation during the first quarter of 2024.

Cost of revenue

The following table set forth the components of our cost of revenue for the three months ended March 31, 2024 and 2023:

Our total cost of revenue decreased by 98.7%, from $4,102,48 for the three-month period ended March 31, 2024 to $48,616 for the three-month period ended March 31, 2023 to $48,616 for the three-month period ended March 31, 2024. This decrease was due to significant reduction in our operations, with cost of raw materials decreased from $3,660,275 for the three-month period ended March 31, 2023 to $47,029 for the three-month period ended March 31, 2024, or by 99%.

Gross profit

For the reasons discussed above, our gross profit decreased by 101.0%, from $838,783 for the three months ended March 31, 2024 to $(8,153) for the three months ended March 31, 2023. Gross profit margin in the period decreased from 17.0% for the three months ended March 31, 2023 to (20.1)% for the three months ended March 31, 2024.

Selling, general and administrative expenses

The following table sets forth the components of our selling, general and administrative expenses for the three months ended March 31, 2024 and 2023:

We incur general and administrative expenses in the management and support of operating activities. Our main general and administrative expenses are personnel expenses, provision for contingencies, and depreciation and amortization administrative expenses. Our selling, general and administrative expenses decreased by 90.2%, from $1,038,901 for the three-month period ended March 31, 2023 to $101,374 for the three-month period ended March 31, 2024. Selling, general and administrative as a percentage of net revenue, increased from 10% for the three months ended March 31, 2023 to 41% for the three months ended March 31, 2024. Our waiver to pay royalties as per our Licensee Agreements lasted until the end of July 2022. On August 2022, royalties expenses kicked in. This decrease in SG&A is related to significant reduction of sales in line with our operational reduction in the Q1 2024.

Interest expenses and other financial expenses

The following table sets forth the components of our interest and other financial expenses for the three months ended March 31, 2024 and 2023:

Other financial expenses (income) represent the difference between interest income and other financial expenses. Interest expenses include interest on loans and increased from $261,252 for the three months ended March 31, 2023 to $516,501 for the three months ended March 31, 2024, an increase of 97.7%. Other financial expenses (income) include bank expenses and Brazilian financial transaction taxes (“IOF”). The level of our interest expenses is related to gross sales. We borrow from banks and other financial institutions in anticipation of our sales, which increases our interest expenses as our sales grow.

Net income

For the three months ended March 31, 2024, compared to the three months ended March 31, 2023, net loss increased from $(456,789) to $(630,311). Our negative net profit margin for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, increased from (9.4%)% to (1557.7)%. The increase is driven by significant decrease in sales attributable to a decrease in our operations coupled with higher interest expenses and other financial expenses during the period.

Liquidity and Capital Resources

Working Capital

Historically, our sources of liquidity have primarily included: (i) advances on all of our receivables by local banks and others financial institutions, with high interest rates; (ii) our founders and early investors’ capital contributions; and (iii) net income from our operations. Our main uses of capital include: (i) purchase of raw materials; (ii) logistics and warehouse expenses; and (iii) execution into point of sales. Our liquidity is significantly affected by accounts receivable collected at an average of sixty-five (65) days, while our accounts payables are settled at an average of seven (7) days. In order to balance our cash flow, we need to anticipate account receivables, generating an increase in financial expenses at high interest costs.

Our primary capital needs include: (i) funding our working capital; (ii) purchase of raw materials on improved financial terms; and (iii) investments in product development. We believe our current working capital is sufficient for our present requirements.

Current Assets

The following table shows the components of our current assets as of March 31, 2024 and December 31, 2023:

Current assets decreased by 13.1% from December 31, 2023 to March 31, 2024. As of December 31, 2023, total current assets were $536,761, and as of March 31, 2024, total current assets were $466,608. This decrease is attributable to a decrease in accounts receivable by $14,884 (or 17 %), and a decrease in inventory by $32,372 (or 33%). Instead of concentrating on boosting sales of existing products, the Company strategically redirected its resources to establish new distribution channels for innovative products, broadening its offerings and paving the way for a strategic shift towards higher-margin products. This move anticipated the reduced costs associated with the availability of the proceeds of this offering, in order to later have the basis to implement a more profitable and sustainable business model.

Current liabilities

The following table shows the components of our current liabilities as of March 31, 2024 and December 31, 2023:

As of December 31, 2023, total current liabilities were $5,943,331, and as of March 31, 2024 our total current liabilities were $6,150,517. This increase was primarily due to a 19% increase in our loans payable which were $1,005,576 as of December 31, 2023 and $1,195,972 as of March 31, 2024.

Sources of 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; (ii) founders and earlier investors capital contributions; and (iii) net income from our operations.

Our main uses of capital include: (i) purchase of raw materials; (ii) logistics and warehouse expenses; and (iii) execution into point of sales.

Our liquidity is significantly affected by accounts receivable collected at an average of 65 days, while our accounts payables are settled at an average of 7 days. In order to balance our cash flow, we need to anticipate account receivables, generating an increase in financial expenses at high interest costs. We are working to reduce the average accounts receivable collection period.

Our primary capital needs include: (i) funding our working capital to clients; (ii) purchase of raw materials on better financial terms; and (iii) investment in product development. We believe our current working capital is sufficient for our present requirements. However, an improvement on our costs of cash or the infusion of equity will dramatically 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.

Cash Provided by (Used in) Operating Activities

Our net cash provided by (used in) operating activities has consisted of profit (loss) for the period adjusted for certain non-cash items including depreciation and amortization, share-based payments expense, other financial costs and foreign exchange, net, deferred income tax expense, loss on disposal of assets, among other non-cash items, as well as changes in our operating assets and liabilities and the cash amounts of income taxes and social contributions that we pay and net interest income that we receive during the period.

For the three months ended March 31, 2024, net cash provided by operating activities was $319,678, comprised primarily of:

•        Net loss of $630,311, combined with non-cash expenses consisting primarily of depreciation and amortization of $54,795, cumulative translation adjustments of $233,914, interest of $517,914 and other adjustments of $8,925.

•        The total amount of adjustment to net income from non-cash items for the three months ended March 31, 2024, was $815,476.

•        Net cash from changes in working capital, arising from changes in operating assets and liabilities, totaled an inflow of $134,513, principally due to:

•        The main variations in cash related to assets were due to accounts receivables of $14,884 and inventory of $32,372 and taxes recover of $15,847; and

•        main variations in cash related to liabilities were due to: suppliers of $(126,339) and labor and social securities of $129,451.

Cash Provided By (Used in) Investing Activities

Our net cash provided by (used in) investing activities has consisted of amounts paid on our purchase of property and equipment, purchases and development of intangible assets, acquisition (redemption) of financial instruments, cash received on disposal of non-current assets, acquisition of interest in associates and cash received in acquisitions.

For the three months ended March 31, 2024, net cash used in investing activities was $62,148, comprised primarily of Intangible assets of $62,148, which are related to implementation of ERP system (SAP) and others.

Cash Used in Financing Activities

For the three months ended March 31, 2024, net cash provided by financing activities was $238,506, comprised primarily of loans of $(324,730) and related parties of $129,451 and others of $(43,227). During the three months ended March 31, 2024, the Company sold convertible notes payable:

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 this registration statement.

Material Cash Requirements

A natural consequence of working capital growth is the corresponding increase in accounts receivable, and, in order to support this growth, we work with prepayment of receivables operations with local FIDCs (Credit Rights Investment Funds), which will be settled upon receipt from customers.

Currency Risk

In line with our review of the operations and business of companies in Brazil, mainly related to the elements to determine its functional currency, the Management concluded that the Brazilian Real is its functional currency. This conclusion is based on the review of the following indicators:

•        Currency that most influences prices of goods and services in Brazil;

•        Currency of the country, which competitive powers and regulations most influence the determination of the selling price of its products and services;

•        Currency that most influences material and other costs to supply products or services;

•        Currency through which the proceeds of financial activities are substantially obtained; and

•        Currency in which amounts received from operating activities are normally accumulated.

The amounts in US Dollars (USD) presented in the financial statements of the companies are measured translate from BRL (as the functional currency which is the currency that best reflects the economic environment in which the Company is included and the way it is managed).

We currently have no off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Our financial instruments consist of cash and cash equivalents and accrued expenses. The carrying amount of these financial instruments is approximate of fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in our financial statements. If our estimate of the fair value is incorrect on March 31, 2024, it could negatively affect our financial position and liquidity and could result in our having understated our net loss.

Results of Operations for the Years Ended December 31, 2023 and 2022

The following table shows the components of our results of operations for the fiscal years ended December 31, 2023 and 2022:

In 2023, BRB Foods ambitiously aimed to double its revenue, despite streamlining its product range to just three core items. Initial trends were promising, with first-quarter growth at 69% year-over-year, projecting potential annual revenues nearing $34 million.

However, external challenges including a lack of access to available credit and high financing costs impacted our growth and resulted in a 31.3% decline in revenue in fiscal year 2023 compared to fiscal year 2022. We recorded a gross loss of $(649,317) in fiscal year 2023 compared to a gross profit of $2,647,307 recorded in fiscal year 2022. We believe this setback in our profitability underscores the volatile economic environment rather than a failure in our operational execution.

The Company’s general and administrative expenses, including essential support and operational management activities, increased by $737,424 (or 70.44%). Despite this increase in general and administrative expenses, we continued investing in our workforce, by increasing personnel-related spending to support the strategic direction of our business. Sales and marketing expenses also increased as part of our efforts to bolster our sales team and promotional efforts, all actions aligned with our long-term growth objectives.

EBITDA decreased significantly, due to these strategic investments and external economic pressures, from $1,220,258 in fiscal year 2022 to $(3,255,654) in fiscal year 2023. The negative EBITDA reflects the transitional costs associated with scaling our operations and adapting to a challenging economic landscape.

Interest expenses increased from $772,952 in 2022 to $1,466,976 in 2023 as a result of higher interest rates in Brazil. Our interest expense increase underscores the broader economic challenges faced by businesses in Brazil’s high-interest environment.

Despite these adversities, the Company’s strengths and the potential demonstrated in fiscal year 2022 offer a platform for our future recovery and growth. The Company has signed an agreement with Unilever in 2023 and developed 64 new products to significantly broaden its portfolio to sell thru its 14 new distribution centers countrywide.

In 2023, we signed an agreement with Unilever for the creation and launch of over 65 different products such as rice, corn, potatoes, pasta, natural sugars, cocoa and cereals, under the brands Arisco, Maizena, Knorr and Mae Terra, one of which was launched in 2023. The remaining 64 products will be launched in July of 2024, which when combined with our existing 3 products and one new product, provides us with a portfolio totaling 68 products. This comprehensive portfolio is expected to significantly increase revenue and improve EBITDA.

Fiscal year 2023 results illustrate the company’s capacity to adapt and innovate, laying the groundwork for sustained success as market conditions improve. Our strategic focus remains on optimizing operational efficiency and pursuing aggressive growth strategies as soon as the economic climate permits, aiming to realize the full potential of the investments made in 2023.

Total assets were $5,037,570 in 2022 and decreased to $3,688,008 in 2023, a decrease of 26.8%. This is the result of our net sales decreasing by 31.3% from 2022 to 2023.

Current liabilities increased by 65.0% from 2022 to 2023. In 2022 total current liabilities were $3,602,599, and in 2023 total current liabilities were $5,943,331. Most of these increases were driven by advances on accounts receivables, for which the increase was 342%. The Company’s accounts payable increased 471.0% between 2022 and 2023 and were $694,031 in 2022 and $3,963,058 in 2023.

Total liabilities were $3,779,880 in 2022 and increased to $7,284,221 in 2023, an increase of 92.7%. This increase was due to the strategy of extending payments to suppliers to support investments made in winning new customers and new markets.

Our average accounts receivable collection period was 65 days for the year ended December 31, 2023 while our accounts payable were settled at an average of 7 days during the same period. In order to manage our cash flow, we are working to reduce the average accounts receivable collection period.

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.

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; (ii) founders and earlier investors capital contributions; and (iii) net income from our operations.

Our main uses of capital: (i) purchase of raw materials; (ii) logistic and warehouse expenses; and (iii) execution into point of sales.

Our liquidity balance has been affected by our average accounts receivable collection period of 65 days for the year ended December 31, 2023 compared to our accounts payable average days outstanding of 7 days for the same period. In order to manage our cash flow, we are working to reduce our average accounts receivable collection period.

Our primary capital needs relate to funding that affect our liquidity to include: (i) funding our working capital to clients; (ii) purchase of raw materials on better financial terms; and (iii) investment in product development. We believe our current working capital is sufficient for our present requirements. However, an improvement on our costs of cash or the infusion of equity will dramatically 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 (used in) operating activities has consisted of profit (loss) for the period adjusted for certain non-cash items including depreciation and amortization, share-based payments expense, other financial costs and foreign exchange, net, deferred income tax expense, loss on disposal of assets, among other non-cash items, as well as changes in our operating assets and liabilities and the cash amounts of income taxes and social contributions that we pay and net interest income that we receive during the period.

Our net cash provided by (used in) investing activities has consisted of amounts paid on our purchase of property and equipment, purchases and development of intangible assets, acquisition (redemption) of financial instruments, cash received on disposal of non-current assets, acquisition of interest in associates and cash received in acquisitions.

A natural consequence of working capital growth is the corresponding increase in accounts receivable, and, in order to support this growth, we work with prepayment of receivables operations with local 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, 2023 and 2022:

Net cash used in operating activities

For the year ended December 31, 2023, net cash used in operating activities was $3,272,993, primarily as a result of:

•        Net loss of $4,698,529, combined with non-cash expenses consisting primarily of depreciation and amortization of $449,349 and accrual for bad debts of $159,281 and allowance for doubtful accounts of $(156,518) and interest of $(525,300) and others $(3,932). The total amount of adjustment to net income from non-cash items for the nine months ended December 31, 2021, was $(77,108).

•        Net cash from changes in working capital, arising from changes in operating assets and liabilities, totaled an outflow of $8,048,631, principally due to:

•        an increase in the balance of accounts receivable which led to negative cash flows of $3,489,814, an increase in advance to suppliers of $493,144, an increase of inventory of $371, 269.

•        partially offset mainly by an increase in accounts payable of $3,742,734.

EBITDA

EBITDA is the earnings before interest, depreciation and amortization.

Foreign Currency Exchange Risk

The reporting currency for our consolidated financial statements is the US dollar. However, during the fiscal year ended December 31, 2023 we generated 100% of our revenue in Brazil and therefore the Brazilian Real is our functional currency.

As a result, we have been impacted by changes in exchange rates and may be impacted materially for the foreseeable future. For example, if the US dollar strengthens it would have a negative impact on our Brazilian operating results upon translation of those results into US dollars for the purposes of consolidation. The exchange rate of the Brazilian Real against the US dollar is currently near a multi-year high.

To the extent the ratio between our revenue generated in Brazilian reais increases as compared to our expenses generated in Brazilian reais, we expect that our results of operations will be further impacted by changes in exchange rates. We do not currently hedge foreign currency fluctuations. However, in the future, in an effort to mitigate losses associated with these risks, we may at times enter into derivative financial instruments, although we have not historically done so. These may take the form of forward sales contracts and option contracts. We do not, and do not intend to, engage in the practice of trading derivative securities for profit.

Interest Rate Risk

We are exposed to market risk from changes in interest rates on our debt. We manage our interest rate risk through normal operating and financing activities and, when determined appropriate, through the use of derivative financial instruments.

Inflation

Inflationary factors such as increases COGS and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative costs as a percentage of revenue if our prices do not increase with these increases.

Other

The Company has entered into certain intellectual property license agreements with certain parties and we have commenced product sales using brands licensed pursuant to these license agreements.

Effective December 1, 2022, BR Brands Ltda. (currently BR Brands S.A.) entered into an Intellectual Property License Out Agreement with Unilever Brasil Ltda (the “IP License Out — Foods Agreement”) pursuant to which we obtained a license to use, in Brazil only, certain intellectual property rights owned or acquired by Unilever for the purpose of enabling our use of certain Unilever-owned products and trademarks for our products and product packaging. The IP License Out –Foods Agreement may be terminated by either party upon at least 30 days prior notice to the other party if the other party breaches any provision of the IP License Out – Foods Agreement and fails to remedy such breach within 30 days of written notice of such breach. Unilever may terminate the IP License Out – Foods Agreement for, among other things, our failure to pay any amount due within 7 business days of the due date such failure not being remedied within 7 business days of written notice from Unilever. The IP License Out — Foods Agreement has a term of three (3) years and expires on December 1, 2025.

Effective March 1, 2023, BR Brands Ltda. (currently BR Brands S.A.) entered into an Intellectual Property License Out Agreement with Conopco, Inc., d/b/a Unilever (the “Conopco License Agreement”) pursuant to which we obtained a license to use, in Brazil only, certain intellectual property rights owned or acquired by Unilever for the purpose of enabling our use of certain Unilever-owned products and trademarks for our products and product packaging. The Conopco License Agreement may be terminated by either party upon at least 30 days prior notice to the other party if the other party breaches any provision of the Conopco License Agreement and fails to remedy such breach within 30 days of written notice of such breach. Unilever may terminate the Conopco License Agreement for, among other things, our failure to pay any amount due within 7 business days of the due date and such failure not being remedied within 7 business days of written notice from Unilever. The Conopco License Agreement has a term of three (3) years and expires on February 28, 2026.

BUSINESS

Overview

BRB Foods Inc. (the “Company” or “BRBF”) is a producer, manufacturer and distributor of dry food products under name brands licensed from Unilever Brasil Ltda, Unilever IP Holdings B.V., Mae Terra Produtos Naturais Ltda, and Conopco, Inc. d/b/a Unilever. Our company specializes in acquiring, producing, processing, manufacturing and packaging high-quality dry food products that are distributed to and marketed at major retailers and food service establishments throughout Brazil. We employ sales personnel who prepare retail displays at the physical locations of products’ sales. For the three months ended March 31, 2024, we generated net revenue of approximately $0.04 million. We generated net revenue of approximately $10.1 million and $14.6 million during the fiscal years ended December 30, 2023 and 2022, respectively.

Our product portfolio includes a wide range of dry food products such as pasta, rice, beans, corn, cassava, potato, snacks, and other dry food items that are produced under strict quality guidelines and procedures. Our most popular brand products include Knorr, Arisco, Maizena and Mãe Terra. We also offer a variety of packaging options, including custom packaging solutions, to meet the specific needs of our clients.

We are committed to sustainability and responsible sourcing. We work with local farmers and suppliers to ensure that our raw materials are ethically sourced and sustainably produced. Our production processes are designed to minimize waste and reduce our environmental impact. Since the beginning of activities, in 2020, we have always been very clear that the entire approval process would be based on the pillars of the ESG philosophy, focusing on food safety, quality associated with excellence and tradition of brands and work safety, in addition to strict respect for the environment and good market practices with the quality area.

We work closely with our clients to ensure that their specific needs and requirements are met, and we strive to provide them with the highest level of customer service and product quality. Our state-of-the-art facilities utilize the latest technology to ensure that our products meet the highest standards of food safety and quality control. Our team of experienced professionals is dedicated to providing our clients with exceptional service and high-quality products that meet their specific needs. We are proud to partner with named brand food companies such as Unilever.

Our Agreements with Unilever all have minimum required royalties, no up-front payment requirements, target sales volumes and are licensed on a non-exclusive basis (except that Unilever cannot issue a license for the same property in Brazil) and provide for the following number of products and term:

•        Mae Terra brand: contract terminates January 3, 2026, 27 products.

•        Arisco brand: contract terminates January 12, 2025, 11 described products but in this contract no identification of specific stock keeping unit (“SKU”) that will vary in quantities.

•        Maizena brand: contract terminates February 28, 2026, 5 described products, but do not specify the SKUs which is expected to be at least double that in the portfolio due to variations of those products.

•        Knorr brand: contract terminates June 30, 2026, 15 specified products.

Our Operations

Our products are cultivated, selected and prepared within the highest rigor and operational standards, and carefully selected from the origin to their packaging, within the planting, harvesting and processing practices. Considering the sales process as a central element, the product is packaged and distributed seeking to dialogue with the consumer, from clear and direct packaging describing the quality and benefits involved in that product to perfect traceability from the package on the shelf to the arrival of the purchase of feedstock.

All of our assets and operational subsidiaries are located in Brazil, consequently it may be more difficult to enforce liabilities, rulings and judgments on our subsidiaries located in Brazil. See “Risk Factors — Risks Related to Doing Business in Brazil — Enforcement risks related to civil liabilities due to our subsidiaries and our officer and directors being located in Brazil.” on page 30 of this prospectus for more information.

•        We identify opportunities, anticipate trends and propose a product portfolio to our customers

•        From a matrix of products, we develop and certify suppliers — whether in accordance with our strict quality and standards, or customized to the specific requirements of each client

•        We develop packaging and visual communication materials.

•        We register our products in the main supermarket chains and sell them.

•        We deliver our products through our own logistics division, with vehicles continuously monitored and tracked.

•        Through our own SAC (Aftersales Customer Service), we guarantee the satisfaction of our end customers.

We work in a B2B2C model, which means Business-to-Business-to-Consumer, in which sales are made directly to the consumer, but the sale is facilitated by the retailer (supermarkets, wholesalers and retailers), so that the business model includes the entire commercial chain, benefiting all parties. In practice, the Company buys from the producer, sends it to the factory, which performs the raw material quality testing and packaging, and then it is sent to the distribution partner.

For example, in the case of Knorr beans, the Company buys the raw material (e.g., foods) and manages the processing at the factory, in order to ensure the quality of the beans. Then, the product goes through packaging with the customer’s visual identity that is licensed to BR Brands. BR Brands then sells directly to wholesalers. Wholesale customers include GPA, Carrefour and Sendas. Although our selling process ends with the wholesaler, the Company has a strong final sales team to increase B2C sales (i.e., sales from the wholesaler to the consumer) and thereby increase the quality of customer experience and reduce the time interval until the next wholesaler order.

To ensure a smooth and efficient process, we have two essential pillars: a qualified team and business intelligence. Decisions are worked out based on analysis and continuously updated numbers. In the case of beans, to give you an idea, we monitor, in real time, the price of beans, inventory levels, average price, factory costs, in order to have sufficient subsidies to allow strategic decisions based on data and intelligence, always looking for the greatest possible efficiency with technology and sustainability. This model allows us to be specialized in the management and operation of production, marketing and sales, in a format similar to that of licensing, which allows the client to remain in its core business, product and brand development.

Our quality management flow consists of:

•        Monitoring of standards and quality inspections in production

•        Audit of inventories carried out by suppliers

MANAGEMENT

The following table sets forth certain information about our executive officers, key employees and directors as of the date of this Registration Statement. We intend to appoint 3 (three) independent directors prior to the consummation of this offering.

____________

*        Mr. Bruno Bonifacio is the son of Mr. Paulo R. Bonifacio.

**      Independent Director.

Mr. Bruno Bonifacio currently serves as our Chief Executive Officer and Director and resides in Brazil. Mr. Bruno Bonifacio has served as our Chief Executive Officer since the Company’s inception in October 2022. Mr. Bruno Bonifacio has served as Supply Chain Director of BR Brands S.A., our 100% owned indirect subsidiary, from September 2022 to July 2023. Mr. Bonifacio was one of the founders of Boni Logística Ltda., our 100% owned indirect subsidiary, in February 2020 and previously served as Director of Operations of Boni Logística Ltda. from May 2021 to September 2022. He previously served as General Manager of McLaren Brazil from October 2017 to May 2021, where he was responsible for the implementation of McLaren Brazil’s automotive operation, gathering relevant experience in importation, sales, after sales, marketing, team building and business planning. Based on Mr. Bruno Bonifacio’s experience discussed above, including primarily his operational and international experience, the Company has concluded that Mr. Bonifacio should serve as a director of the Company.

Mr. Paulo R. Bonifacio currently serves as the President of the Company and resides in Brazil. Mr. Bonifacio has served as our President since the Company’s inception in October 2022. Mr. Bonifacio has served as the President of BR Brands S.A., our 100% owned indirect subsidiary, since its inception in December 2020. Mr. Bonifacio has over six (6) years of experience in the dry foods goods industry. Mr. Bonifacio previously served as Chief Executive Officer of Araxa Metais S.A., a mining company in Brazil, from January 2015 to April 2017. He also founded Bonifacio Logistics and served as CEO from of Bonifacio Logistics from January 1994 to September 2007, where he led the merger with GATX, a railcar leasing and service company, led another merger with Tegma, a Brazilian transport company, and led Tegma until its initial public offering on the Brazilian stock market. Mr. Bonifacio also has past experience in different markets such as importation.

Mr. Leonardo Pucci Burti currently serves as our Chief Financial Officer and resides in Brazil. Mr Burti has served as our Chief Financial Officer since May 2024. Mr Burti is an engineer and has 15 years of experience in finance. Prior to joining the Company, Mr. Burti served as CEO of HSM Consulting from March 2019 to August 2023, where he was involved in management consulting. Mr. Burti previously served as the chief financial officer of Credit Brasil FIDC Multisetorial from January 2014 to January 2019, where he focused in the creditor rights market for this organization. He previously served as head of finance and later CEO of Editora Gráficos Burti, a family-owned printing business, from 1999 to 2014. Mr. Burti earned a degree in engineering from the Instituto Maua de Tecnologia in Brazil in 2004.

Mr. Joel A. Gallo currently serves as a Director and resides in China. Mr. Gallo has served as our Director since October, 2023. Mr. Gallo also currently serves as Chief Financial Officer of HD EDU, a technology firm based in Shenzhen, China, and has served in this role since February 2023. Mr. Gallo also currently serves on the board of directors of Hywin Wealth Management Co. Ltd., a subsidiary of Hywin Holdings Ltd. (Nasdaq ticker: HYW). Mr. Gallo also currently serves as a director of International Technical Holdings Corporation. He also currently serves as an independent director nominee of Good Faith Technology. Prior to joining HD EDU, Mr. Gallo served as the Chief Financial Officer of CoinTiger, a cryptocurrency trading platform company, from July 2022 to January 2023. Mr. Gallo served as the Chief Financial Officer of ETAO International Group, a telehealth company, from March 2021 to May 2022. He served as Chief Executive Officer of Columbia China League Business Advisory Co., a professional advisory services company, from November 2019 to February 2021, providing professional advisory services to various companies, including advising Chinese companies on initial public offerings in the United States. Mr. Gallo

served as co-founder and principal of GLS Group LLC from April 2013 to December 2018, and was responsible for providing management consulting services to financial sector firms. From February 1994 to March 2013, Mr. Gallo was a senior executive at Scudder Kemper Investments (Deutsche Bank Asset Management), TLX Trading Networks, Deloitte, Ernst & Young, PricewaterhouseCoopers, EMC. In those roles, Mr. Gallo advised about 100 global financial institutions on strategy, transformation, risk management projects. Mr. Gallo obtained his bachelor’s degree in management from Binghamton University — State University of New York, in 1993. He obtained a master of arts degree in international relations from Tufts University, in 2008. He obtained a master of public administration degree from Columbia University in 2018. Based on Mr. Gallo’s previous business experience discussed above, primarily including his previous experience serving in directorship roles, the Company has concluded that Mr. Gallo should serve as a director of the Company.

Mr. Jacques Benoliel currently serves as a Director and resides in Spain. Mr. Benoliel has served as our Director since May 2024. Mr. Benoliel has over 30 years of experience in IT and innovation. Mr. Benoliel currently serves as as founder and CEO at Distrisave, an automation and AI services company, and has served in this role since [•] 2020. From June 2019 to December 2022, Mr. Benoliel served as a director at Industrial Technical Holdings Corporation, an engineering company in China. He obtained a civil engineering degree from the Ecole des Ponts & Chaussées in Paris, in 1984. Mr. Benoliel has developed his career across Spain, France, and the US, and is fluent in Spanish, French, and English.

Based on Mr. Benoliel’s previous business experience discussed above, primarily including his previous experience serving in a directorship role, the Company has concluded that Mr. Benoliel should serve as a director of the Company.

Family Relationships

Bruno Bonifacio, our CEO and a Director of the Company, is the son of our President, Paulo Bonifacio. Rafael Bonifacio, an employee of the Company and the holder of 772,500 shares of our common stock, which are owned through MALP Holdings Ltd, a Bahamian international business company, of which Mr. Rafael Bonifacio is the sole owner and member, is the son of our President, Paulo Bonifacio.

Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past 10 years, been involved in any legal proceedings described in subparagraph (f) of Item 401 of Regulation S-K.

Corporate Governance

Director Independence

We expect that more than 50% of the voting power of the common stock of the Company will be held by one shareholder after the closing of this offering; therefore we are deemed a “controlled company” under the NYSE American corporate governance rules. “Controlled” companies are exempt from the requirements to have a board with a majority of independent members and the requirements regarding compensation and nominating committees. However, we do not intend to rely on the “controlled company” exemption. See “Risk Factors — We are a ‘controlled company’ as defined under NYSE American listing standards, and we are permitted to elect to rely on certain exemptions from corporate governance rules; although we do not expect to rely on the ‘controlled company’ exemption under the listing standards of the NYSE American, we expect to have the right to use such exemption and therefore we could in the future avail ourselves of certain reduced corporate governance requirements.”

Our Board has reviewed the independence of our directors based on the NYSE American listing standards. Based on this review, our Board determined that each of Joel A. Gallo and Jacques Benoliel re independent within the meaning of the NYSE American rules. In making this determination, our Board considered the relationships that each of these non-employee directors has with us and all other facts and circumstances our Board deemed relevant in determining their independence. In addition, we anticipate that our independent directors will meet in regularly scheduled executive sessions at which only independent directors are present.

Board of Directors: Term of Office

Our Bylaws provide that each member of our Board of Directors shall serve for a term of one (1) year and hold office until their successors are elected and qualified at the following annual meeting of stockholders.

Board Committees

Our Board will establish the following three standing committees: audit committee; compensation committee; and nominating and governance committee. Our board of directors will adopt written charters for each of these committees. Our board of directors may establish other committees as it deems necessary or appropriate from time to time.

Duties of Directors

Under Delaware law, our directors owe fiduciary duties to our company, including a duty of loyalty, a duty to act honestly, and a duty to act in a manner they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper purpose. Our directors also owe to our company a duty to act with skill, care and diligence, which contains both objective and subjective elements. This duty requires directors to act with the skill, care and diligence that may reasonably be expected of a person of the director’s knowledge and skill carrying out the same functions as are carried out by that director in relation to the company, and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure compliance with our amended and restated memorandum and articles of association, as amended and restated from time to time. We have the right to seek damages if a duty owed by our directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in our name if a duty owed by our directors is breached.

Remuneration and Borrowing

The directors may receive such remuneration as our board of directors may determine from time to time. Each director is entitled to be reimbursed for all traveling, hotel and other expenses incurred in attending meetings of our board of directors or committees of our board of directors or shareholder meetings or otherwise in connection with the business of the Company. The compensation committee will assist the directors in reviewing and approving the compensation structure for the directors. Our board of directors may exercise all the powers of the Company to borrow money and to mortgage or charge our undertakings, property, and uncalled capital or any part thereof, and to issue debentures, debenture stock, mortgages, bonds and other securities whether outright or as security for any debt, liability or obligation of the company or of any third party.

Audit Committee

The audit committee is responsible for, among other matters:

•        appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm;

•        discussing with our independent registered public accounting firm the independence of its members from its management;

•        reviewing with our independent registered public accounting firm the scope and results of their audit;

•        approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;

•        overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC;

•        reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements;

•        coordinating the oversight by our board of directors of our code of business conduct and our disclosure controls and procedures

•        establishing procedures for the confidential and/or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and

•        reviewing and approving related-person transactions.

Our audit committee consists of Joel Gallo and Jacques Benoliel, with Joel Gallo serving as the chairman. Each member of our audit committee can read and understand fundamental financial statements in accordance with the SEC and the NYSE American audit committee requirements. In arriving at this determination, our Board has examined Jacques Benoliel and Joel Gallo’s scope of experience and the nature of their prior and/or current employment.

Compensation Committee

The compensation committee is responsible for, among other matters:

•        reviewing key employee compensation goals, policies, plans and programs;

•        reviewing and approving the compensation of our directors and executive officers;

•        reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and

•        appointing and overseeing any compensation consultants or advisors.

Our compensation committee consists of Joel Gallo and Jacques Benoliel, with Jacques Benoliel serving as the chairman.

Nominating and Governance Committee

The purpose of the nominating and governance committee is to assist the board in identifying qualified individuals to become board members, in determining the composition of the board and in monitoring the process to assess board effectiveness. Our nominating committee consists of Joel Gallo and Jacques Benoliel, with Jacques Benoliel serving as the chairman.

Code of Business Conduct and Ethics

Our board of directors will adopt a code of business conduct and ethics that applies to our directors, officers and employees. Upon completion of this offering, a copy of this code will be available on our website. We intend to disclose on our website any amendments to the Code of Business Conduct and Ethics and any waivers of the Code of Business Conduct and Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table presents information regarding the total compensation awarded to, earned by, or paid to our chief executive officer and our two most highly-compensated executive officers (other than the chief executive officer) who were serving as executive officers as of December 31, 2023 for services rendered in all capacities to us for the years ended December 31, 2023 and 2022. These three individuals are referred to as our “Named Executive Officers”.

Other than as set forth in the table and described more fully below, during the fiscal years ended December 31, 2023 and 2022, we did not pay any fees to, make any equity awards or non-equity awards to, or pay any other compensation to the Named Executive Officers. The compensation reported in this summary compensation table below is not necessarily indicative of how we will compensate our Named Executive Officers in the future. We expect that we will continue to review, evaluate, and modify our compensation framework as a result of becoming a publicly traded company, and our compensation program could vary significantly from our historical practices in the future.

Employment Agreements

On June 30, 2023, the Company and Bruno Bonifacio entered into an agreement, pursuant to which Bruno Bonifacio agreed to be employed as the Chief Executive Officer of the Company. The Company agreed to pay Bruno Bonifacio (i) a base annual salary of BRL 384,000 (or approximately USD79,834); (ii) a discretionary bonus of up to 2.0% of salary.

On June 30, 2023, the Company and Paulo R. Bonifacio entered into an agreement, pursuant to which Paulo R. Bonifacio agreed to be employed as the President of the Company. The Company agreed to pay Paulo R. Bonifacio (i) a base annual salary of BRL 1,260,000 (or approximately USD261,954); (ii) a discretionary bonus of up to 2.0% of salary.

On June 30, 2023, the Company and Fabio Farina entered into an agreement, pursuant to which Fabio Farina agreed to be employed as the Chief Financial Officer of the Company. The Company agreed to pay Fabio Farina (i) a base annual salary of BRL 542,740.20 (or approximately USD112,836); (ii) a discretionary bonus of up to 2.0% of salary. Effective March 1, 2024, Fabio Farina resigned as the Chief Financial Officer and Director of the Company.

On April 3, 2024, the Company and Leonardo Pucci Burti entered into an agreement, pursuant to which Leonardo Pucci Burti agreed to be employed as the Chief Financial Officer of the Company. The Company agreed to pay Leonardo Pucci Burti (i) a base annual salary of BRL 600,000 (or approximately USD123,658); (ii) a discretionary bonus of up to 2.0% of salary.

Under these agreements, we may terminate employment for cause, at any time, without advance notice or remuneration, for certain acts of the executive officer, which include, but are not limited to, a conviction or plea of guilty to a non-vehicular felony or any act involving moral turpitude, willful misconduct or gross negligence, dishonest acts to our detriment, continued failure to satisfactorily follow lawful and reasonable directives of the Board, or breach of certain restrictive covenants set forth in the employment agreement. We may also terminate an officer’s employment without cause upon giving 180-day advance written notice.

Each of the executive officers has agreed to hold, both during and after the termination or expiry of his or her employment agreement, in strict confidence and not to use, except as required in the performance of his or her duties in connection with the employment, any confidential information or trade secrets of ours, our customers or prospective customers, or the confidential or proprietary information of any third-party received by us and for which we have confidential obligations. Each of the executive officers has also agreed to disclose in confidence to us all inventions and designs which they conceive or develop during the executive officer’s employment with us and to assign all right, title and interest in them to us.

Non-Executive Director Compensation

The non-executive members of our board of directors have not received any compensation prior to this offering and no arrangements have been entered into in relating to compensation after this offering. Following this offering, the board of directors will establish a compensation package for the non-executive members of the board of directors.

Clawback Policy

We will adopt a clawback policy in accordance with SEC and NYSE rules prior to completion of this offering. Under this policy, which will be administered by our Compensation Committee, each of our officers is required to execute an agreement with the Company pursuant to which the Company shall have the ability to recover any erroneously awarded incentive-based compensation received by current and former executive officers in the event of a required accounting restatement.

2023 Equity Incentive Plan

We have reserved a total of 815,000 shares of common stock in our 2023 Equity Incentive Plan to fulfill any future grants under the Company’s 2023 Equity Incentive Plan or other future grants by the Company to its employees, officer or directors.

The restricted stock units granted to the Beneficiaries were made pursuant to certain restricted stock unit grant agreements entered into between the Company and each respective Beneficiary (“RSU Agreement”). Pursuant to the RSU Agreements, an aggregate total of (a) 177,500 restricted stock units vested on July 1, 2024; (b) 177,500 restricted stock units vest on December 28, 2024; (c) 5,000 restricted stock units vest on March 28, 2025; (d) 5,000 restricted stock units vest on June 26, 2025; and (e) 10,000 restricted stock units each vest on April 1 of 2025, 2026, 2027, 2028, and 2029, respectively. Consequently, as of the date of this prospectus, 177,500 restricted stock units have vested and the 237,500 restricted stock units will vest after the consummation of this offering.

As of the date of this Prospectus, we have granted to certain director and employees of the Company or its subsidiaries (the “Beneficiaries”) restricted stock units for an aggregate total of 415,000 shares of our common stock. Further, on June 30, 2023, the Company granted 150,000 restricted stock units to Mr. Fabio L. Farina, former Chief Financial Officer of the Company. Effective March 1, 2024, Mr. Fabio L. Farina resigned as the Chief Financial Officer and Director of the Company. Consequently, all restricted stock units granted to Mr. Fabio L. Farina were forfeited to the Company on March 1, 2024. No stock-based compensation expense related to Mr. Farina or other Beneficiaries was recognized in the 2023 fiscal year.

The restricted stock units granted to the Beneficiaries were made pursuant to certain restricted stock unit grant agreements entered into between the Company and each respective Beneficiary (“RSU Agreement”). Pursuant to the RSU Agreements, an aggregate total of (a) 177,500 restricted stock units vested on July 1, 2024; (b) 177,500 restricted stock units vest on December 28, 2024; (c) 5,000 restricted stock units vest on March 28, 2025; (d) 5,000 restricted stock units vest on June 26, 2025; and (e) 10,000 restricted stock units each vest on April 1 of 2025, 2026, 2027, 2028, and 2029, respectively. Consequently, as of the date of this prospectus, 177,500 restricted stock units have vested and the 237,500 restricted stock units will vest after the consummation of this offering.

The purpose of the 2023 Equity Incentive Plan is to establish rules for employees of the Company to acquire our shares, with the aim of: (i) aligning the interests of executives and other employees with those of the Company’s shareholders, in generating results and creating sustainable value, and (ii) reinforcing the long-term orientation of decisions taken by executives. The goal is to create a long-term incentive, based on the concept of a stock option, which consists of granting a right and not an obligation to buy Company common shares at pre-established prices and terms. Under the terms of our 2023 Equity Incentive Plan, if a participant ceases to be a service provider, other than upon the participant’s termination as the result of the participant’s death or disability, the participant may exercise his or her option within such period of time as is specified in the award agreement (but in no event later than the expiration of the term of such option as set forth in the award agreement) to the extent that the option is vested on the date of termination. In the absence of a specified time in the award agreement, the option shall remain exercisable for three months following the participant’s termination. Unless otherwise provided by the administrator, if on the date of termination the participant is not vested as to his or her entire option, the shares covered by the unvested portion of the option will be forfeited and revert to the Plan. If after termination the participant does not exercise the vested portion of his or her option within the time specified by the administrator, the option will terminate, and the shares covered by such option will revert to the Plan.

CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS

Unless described below, during the last two fiscal years ended December 31, 2023 and 2022 and during the period beginning January 1, 2024 through the date herein, there are no transactions or series of similar transactions to which we were a party or will be a party, in which:

•        the amounts involved exceeded or will exceed the lesser of (i) $120,000, or (ii) 1% of the average of BRB Foods Inc.’s total assets for the last two completed fiscal years; and

•        any of our directors, executive officers or holders of more than 5% of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest.

Employment Agreements

The company has entered into employment agreements with executive officers. See summaries of such agreements under “Executive Compensation — Employment Agreements”.

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding the beneficial ownership of our common stock as of April 30, 2024, and as adjusted to reflect the sale of common stock being offered in this offering by:

•        each person, or group of affiliated persons, known to us to own beneficially more than 5% of our common stock;

•        each of our current directors;

•        each of our named executive officers; and

•        all of our current directors and executive officers as a group.

The information in the following table has been presented in accordance with the rules of the SEC. Under such rules, beneficial ownership of a class of capital stock includes any shares of such class as to which a person, directly or indirectly, has or shares voting power or investment power and also any shares as to which a person has the right to acquire such voting or investment power within 60 days through the exercise of any stock option, warrant or other right. If two or more persons share voting power or investment power with respect to specific securities, each such person is deemed to be the beneficial owner of such securities. Except as we otherwise indicate below and under applicable community property laws, we believe that the beneficial owners of the common stock listed below, based on information they have furnished to us, have sole voting and investment power with respect to the shares shown. Except as otherwise indicated, each stockholder named in the table is assumed to have sole voting and investment power with respect to the number of shares listed opposite the stockholder’s name.

The calculations of beneficial ownership in this table are based on 12,000,000 shares of common stock outstanding on April 30, 2024.

____________

(1)      Unless otherwise indicated, the business address of each of the named individuals is Rua Doutor Eduardo de Souza Aranha, 387 — Conjunto 151, São Paulo, SP 04543-121, Brazil.

(2)      Mr. Paulo R. Bonifacio is the owner of 8,802,000 shares of our common stock, 599,000 shares of which are owned through Tivix Investments LLC, a Delaware limited liability company, of which Mr. Paulo R. Bonifacio is the sole owner and member. Mr. Paulo R. Bonifacio has the voting, dispositive or investment power over his respective shares owned through Tivix Investments LLC. The address of Tivix Investments LLC is 2255 Glades Road, Suite 122A, Boca Raton, FL 33431.

(3)      Mr. Rafael Bonifacio is the owner of 772,500 shares of our common stock, which are owned through MALP Holdings Ltd, a Bahamian international business company, of which Mr. Rafael Bonifacio is the sole owner and member. Mr. Rafael Bonifacio has the voting, dispositive or investment power over his respective shares owned through MALP Holdings Ltd. The address of MALP Holdings Ltd is Bahamas Financial Center, third floor, BF11, Shirley and Charlotte streets, Nassau, NP Bahamas.

(4)      Mr. Leoardo Pucci Burti has been granted restricted stock units for 50,000 shares of our common stock, which restricted stock units vest at 10,000 each on April of 2025, 2026, 2027, 2028 and 2029, respectively.

(5)      Mr. Joel A. Gallo owns 2,000 options to acquire 2,000 shares at a price of $4.50, which options vest commencing one year from the date of this Offering.

(6)      Mr. Leoardo Pucci Burti owns 2,000 options to acquire 2,000 shares at a price of $4.50, which options vest commencing one year from the date of this Offering.

DESCRIPTION OF CAPITAL STOCK

The following is a summary of all material characteristics of our capital stock as set forth in our articles of incorporation and bylaws. The summary does not purport to be complete and is qualified in its entirety by reference to our articles of incorporation and bylaws, all of which are incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and the applicable provisions of Wyoming law.

General

Our articles of incorporation authorizes us to issue a total of 30,000,000 shares, par value $0.001 per share.

Common Stock

We are authorized to issue 30,000,000 shares, par value $0.001 per share. As of the date hereof, a total of 12,000,000 shares of our common stock are issued and outstanding, which does not include shares of common stock issuable upon conversion of promissory notes.

Each share of common stock is entitled to one vote on the election of any director or any other matter upon which stockholders are required or permitted to vote. Holders of our common stock do not have cumulative voting rights.

Issuance of additional shares of common stock in the future will reduce proportionate ownership and voting power of each share outstanding. Directors can authorize the issuance of additional shares of common stock without stockholder approval, to the extent authorized.

Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock. Holders of our common stock are entitled to receive dividends when and as declared by our board of directors, out of funds legally available. We have not paid cash dividends in the past and do not expect to pay any within the foreseeable future.

Anti-Takeover Issues

Wyoming law does not impose enhanced fiduciary duties on directors in attempted takeover situations. Instead, the “business judgment rule” is applied to the use of antitakeover tactics, which may allow directors to consider the interests of shareholders as just one factor among others.

Cumulative voting is not provided for in our Articles of Incorporation or Bylaws or in the Wyoming Business Corporation Act, which may make it harder for third parties to gain control over the Company. We do not currently have a staggered Board of Directors, and we have not adopted any shareholders’ rights plans, or so-called poison pills.

Dividends

We have not paid any cash dividends on our common stock to date and do not intend to pay cash dividends prior to the completion of this offering. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial conditions subsequent to completion of this offering. The payment of any cash dividends subsequent to this offering will be within the discretion of our board of directors at such time. Further, if we incur any additional indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

Transfer Agent and Registrar

VStock Transfer, LLC is the transfer agent and registrar for our common stock. VStock Transfer, LLC’s offices are located at 18 Lafayette Place, Woodmere, NY 11598.

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering and the sales of our common stock by the selling shareholders pursuant to the Resale Prospectus filed contemporaneously herewith, no public market for our common stock existed, and a liquid trading market for our common stock may not develop or be sustained after this offering. Future sales of substantial amounts of our common stock in the public market could adversely affect prevailing market prices of our common stock from time to time and could impair our future ability to raise equity capital in the future. Furthermore, because only a limited number of shares of our common stock will be available for sale shortly after this offering due to certain contractual and legal restrictions on resale described below, sales of substantial amounts of our common stock in the public market after such restrictions lapse, or the anticipation of such sales, could adversely affect the prevailing market price of our common stock and our ability to raise equity capital in the future.

Based upon the 12,000,000 shares outstanding as of April 30, 2024, upon the closing of this offering, we will have outstanding an aggregate of 14,500,000 shares of common stock, assuming no exercise of the underwriters’ over-allotment option, no exercise of outstanding options and without giving effect to the conversion of the convertible notes. All of the 2,500,000 shares sold in this offering by us will be freely tradable without restrictions or further registration under the Securities Act, unless held by our affiliates, as that term is defined under Rule 144 under the Securities Act, or subject to lock-up agreements. The remaining shares of common stock outstanding upon the closing of this offering are restricted securities as defined in Rule 144. Restricted securities may be sold in the U.S. public market only if registered or if they qualify for an exemption from registration, including by reason of Rule 144 or Rule 701 under the Securities Act, which rules are summarized below. These remaining shares will generally become available for sale in the public market as follows:

•        2,525,568 shares will be eligible for sale by selling shareholders in this offering in the public market on the date of this prospectus; and

•        approximately 11,474,432 shares will be eligible for sale in the public market upon expiration of lock-up agreements 180 days after the date of this prospectus, subject in certain circumstances to the volume, manner of sale and other limitations of Rule 144 and Rule 701.

We may issue shares of common stock from time to time as consideration for future acquisitions, investments or other corporate purposes. In the event that any such acquisition, investment or other transaction is significant, the number of shares of common stock that we may issue may in turn be significant.

We may also grant registration rights covering those shares of common stock issued in connection with any such acquisition and investment.

Rule 144

In general, persons who have beneficially owned restricted shares of our common stock for at least six months, and any affiliate of the company who owns either restricted or unrestricted shares of our common stock, are entitled to sell their securities without registration with the SEC under an exemption from registration provided by Rule 144 under the Securities Act.

In general, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (1) such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, a sale, (2) we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale and (3) we are current in our Exchange Act reporting at the time of sale.

Persons who have beneficially owned restricted shares of our common stock for at least six months, but who are our affiliates at the time of, or any time during the 90 days preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either of the following:

•        1% of the number of shares of our common stock then outstanding, which will equal approximately 146,001 shares immediately after the closing of this offering assuming no exercise of the over-allotment option (or approximately 149,751 shares assuming full exercise of the over-allotment option).

branch profits tax equal to 30% (or such lower rate specified by an applicable income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items. Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.

Non-U.S. holders that do not provide the required certification on a timely basis, but that qualify for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

Gain on Disposition of Our Common Stock

Subject to the discussions below regarding backup withholding and FATCA, a non-U.S. holder generally will not be subject to U.S. federal income tax on any gain realized on the sale or other disposition of our common stock, unless:

•        the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, and if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States;

•        the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition, and certain other requirements are met; or

•        our common stock constitutes a “United States real property interest” by reason of our status as a United States real property holding corporation, or USRPHC, for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or the non-U.S. holder’s holding period for our common stock, and our common stock is not regularly traded on an established securities market during the calendar year in which the sale or other disposition occurs.

If we are a USRPHC and either our common stock is not regularly traded on an established securities market or a non-U.S. holder holds, or is treated as holding, more than 5% of our outstanding common stock, directly or indirectly, during the applicable testing period, gain described in the third bullet point above will generally be taxed in the same manner as gain that is effectively connected with the conduct of a U.S. trade or business, except that the branch profits tax generally will not apply. Determining whether we are a USRPHC depends on the fair market value of our U.S. real property interests relative to the fair market value of our other trade or business assets and our foreign real property interests. We believe that we are not currently and do not anticipate becoming a USRPHC for U.S. federal income tax purposes, although there can be no assurance we will not in the future become a USRPHC. If we are a USRPHC and our common stock is not regularly traded on an established securities market, a non-U.S. holder’s proceeds received on the disposition of shares will also generally be subject to withholding at a rate of 15%. Prospective investors are encouraged to consult their own tax advisors regarding the possible consequences to them if we are, or were to become, a USRPHC.

Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular U.S. federal income tax rates in the same manner as if such holder were a resident of the United States. A non-U.S. holder that is a foreign corporation also may be subject to an additional branch profits tax equal to 30% (or such lower rate specified by an applicable income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items.

Gain described in the second bullet point above will be subject to U.S. federal income tax at a flat 30% rate (or such lower rate specified by an applicable income tax treaty), but may be offset by certain U.S.-source capital losses (even though the individual is not considered a resident of the United States), provided that the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses. Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.

Information Reporting and Backup Withholding

Annual reports are required to be filed with the IRS and provided to each non-U.S. holder indicating the amount of dividends on our common stock paid to such holder and the amount of any tax withheld with respect to those dividends. These information reporting requirements apply even if no withholding was required because the dividends were effectively connected with the holder’s conduct of a U.S. trade or business, or withholding was reduced or eliminated by an applicable income tax treaty. This information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established. Backup

withholding, currently at a 24% rate, generally will not apply to payments to a non-U.S. holder of dividends on or the gross proceeds of a disposition of our common stock provided the non-U.S. holder furnishes the required certification for its non-U.S. status, such as by providing a valid IRS Form W-8BEN, IRS Form W-8BEN-E or IRS Form W-8ECI, or certain other requirements are met. Backup withholding may apply if the payor has actual knowledge, or reason to know, that the holder is a U.S. person who is not an exempt recipient.

The gross proceeds from sales or other dispositions of our common stock may be subject, in certain circumstances discussed below, to U.S. backup withholding and information reporting. If a non-U.S. Holder sells or otherwise disposes of our common stock outside the United States through a non-U.S. office of a non-U.S. broker and the disposition proceeds are paid to the non-U.S. Holder outside the United States, then the U.S. backup withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting, but not U.S. backup withholding, will apply to a payment of disposition proceeds, even if that payment is made outside the United States, if a non-U.S. Holder sells our common stock through a non-U.S. office of a broker that is a United States person or has certain enumerated connections with the United States, unless the broker has documentary evidence in its files that the non-U.S. Holder is not a United States person and certain other conditions are met or the non-U.S. Holder otherwise qualifies for an exemption.

If a non-U.S. Holder receives payments of the proceeds of a disposition of our common stock to or through a U.S. office of a broker, the payment will be subject to both U.S. backup withholding and information reporting unless the non-U.S. Holder provides to the broker a properly executed IRS Form W-8BEN or W-8BEN-E (or other applicable form) certifying under penalties of perjury that the non-U.S. Holder is not a United States person, or the non-U.S. Holder otherwise qualifies for an exemption.

Backup withholding is not an additional tax. If any amount is withheld under the backup withholding rules, the non-U.S. holder should consult with a U.S. tax advisor regarding the possibility of and procedure for obtaining a refund or a credit against the non-U.S. holder’s U.S. federal income tax liability, if any.

Withholding on Foreign Entities

FATCA imposes a U.S. federal withholding tax at a rate of 30% on certain payments made to a “foreign financial institution” (as specially defined under these rules) of (i) U.S.-source dividends (including dividends paid on our common stock) and (ii) the gross proceeds from the sale or other disposition of property that produces U.S.-source dividends (including sales or other dispositions of our common stock). FATCA withholding tax generally applies to a foreign entity, whether acting as a beneficial owner or an intermediary, unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding certain U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners) or an exemption applies. FATCA also generally will impose a U.S. federal withholding tax of 30% on certain payments made to a non-financial foreign entity unless such entity provides the withholding agent a certification identifying certain direct and indirect U.S. owners of the entity or an exemption applies. Accordingly, the entity through which a non-U.S. Holder holds our common stock will affect the determination of whether such withholding is required. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes. FATCA currently applies to dividends paid on our common stock. Under applicable Treasury Regulations and administrative guidance, withholding under FATCA would have applied to payments of gross proceeds from the sale or other disposition of our common stock on or after January 1, 2019, but under proposed regulations (the preamble to which specifies that taxpayers are permitted to rely on such proposed regulations pending finalization), no withholding would apply with respect to payments of gross proceeds.

Prospective investors are encouraged to consult with their own tax advisors regarding FACTA and the possible implications of this legislation on their investment in our common stock.

•        Penalty bids permit the underwriter to reclaim a selling concession from a syndicate member when the securities originally sold by that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.

These stabilizing transactions, over-allotment transactions, syndicate covering transactions, and penalty bids may have the effect of raising or maintaining the market price of our securities or preventing or retarding a decline in the market price of our securities. As a result, the price of our securities in the open market may be higher than it would otherwise be in the absence of these transactions. Neither we nor the underwriter make any representation or prediction as to the effect that the transactions described above may have on the price of our securities. These transactions may be affected on the New York Stock Exchange, in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

Passive Market Making

In connection with this offering, underwriter, and selling group members may engage in passive market making transactions in our securities on the New York Stock Exchange in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales of the shares and extending through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, then that bid must then be lowered when specified purchase limits are exceeded.

Other Relationships

The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Certain of the underwriters and their respective affiliates have provided, and may in the future provide, a variety of these services to us and to persons and entities with relationships with us, for which they received or will receive customary fees and expenses.

Potential Conflicts of Interest

The underwriters and their affiliates may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses. In the ordinary course of their various business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own accounts and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of our Company. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect to such securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Other Relationships

The underwriters and certain of their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing, and brokerage activities. Some of the underwriters and certain of their affiliates may in the future engage in investment banking and other commercial dealings in the ordinary course of business with us and our affiliates, for which they may in the future receive customary fees, commissions, and expenses.

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long, and/or short positions in such securities and instruments.

intended to be published in respect of the securities. This document is issued on a confidential basis to “qualified investors” (within the meaning of section 86(7) of FSMA) in the United Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section 86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Canada

The securities may not be offered, sold, or distributed, directly or indirectly, in any province or territory of Canada other than the provinces of Ontario and Quebec or to or for the benefit of any resident of any province or territory of Canada other than the provinces of Ontario and Quebec, and only on a basis that is pursuant to an exemption from the requirement to file a prospectus in such province, and only through a dealer duly registered under the applicable securities laws of such province or in accordance with an exemption from the applicable registered dealer requirements

Australia.

This prospectus is not a product disclosure statement, prospectus, or other type of disclosure document for the purposes of Corporations Act 2001 (Commonwealth of Australia) (the “Act” and does not purport to include the information required of a product disclosure statement, prospectus, or other disclosure document under Chapter 6D.2 of the Act. No product disclosure statement, prospectus, disclosure document, offering material, or advertisement in relation to the offer of the securities has been or will be lodged with the Australian Securities and Investments Commission or the Australian Securities Exchange.

Accordingly, (1) the offer of the securities under this prospectus may only be made to persons: (i) to whom it is lawful to offer the securities without disclosure to investors under Chapter 6D.2 of the Act under one or more exemptions set out in Section 708 of the Act, and (ii) who are “wholesale clients”, as that term is defined in section 761G of the Act, (2) this prospectus may only be made available in Australia to persons as set forth in clause (1) above, and (3) by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (1) above, and the offeree agrees not to sell or offer for sale any of the securities sold to the offeree within 12 months after their issue except as otherwise permitted under the Act.

Hong Kong.

The securities may not be offered or sold in Hong Kong by means of this prospectus or any other document other than (i) in circumstances that do not constitute an offer or invitation to the public within the meaning of the Companies (Cap.32, Laws of Hong Kong) or the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances that do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the securities may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), that is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder.

People’s Republic of China (the “PRC”).

This prospectus may not be circulated or distributed in the PRC, and the securities may not be offered or sold, and will not be offered or sold to any person for re-offering or resale, directly or indirectly, to any resident of the PRC except pursuant to applicable laws and regulations of the PRC. For the purpose of this paragraph, PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.

BRB FOODS INC.
Index to Consolidated Financial Statements

BRB FOODS INC.

CONSOLIDATED BALANCE SHEETS

FOR THREE MONTHS ENDED AS OF MARCH 31, 2024

(Amounts expressed in US Dollar — USD)

Management’s explanatory notes form an integral part of the consolidated financial statements.

BRB FOODS INC.

CONSOLIDATED BALANCE SHEETS

FOR THREE MONTHS ENDED AS OF MARCH 31, 2024

(Amounts expressed in US Dollar — USD)

Management’s explanatory notes form an integral part of the consolidated financial statements.

BRB FOODS INC.

INCOME STATEMENT
FOR THREE MONTHS ENDED AS OF MARCH 31, 2024

(Amounts expressed in US Dollar — USD)