Local Bounti Corporation/DE
For the period ended Dec 31, 2025. Filed Mar 27, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 27, 2026
LOCL$0.87-3.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-31.
0001840780-25-000009
Item 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-27.
0001628280-26-021706
Item 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 96 previous paragraphs and 104 current paragraphs.
50 unchanged; 22 reworded; 29 added; 22 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 6 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
Product Development
Current report
The launch of our family-sized 10-ounce Romano Caesar Salad Kit in the Pacific Northwest continues to build momentum with consumers at retail — the kit realized a 75% increase in its baseline velocity (units sold per store per week) during the fourth quarter.
Current report
We continue to pursue growth of our arugula offering following its successful launch at both our Washington and Texas facilities in early 2025. Conventional arugula is often unreliable and insufficient and is a category that we believe we can continue to address through leveraging our baby leaf capabilities.
Current report
Distribution
Current report
We currently service approximately 13,000 retail doors and expanded our retail presence in select southern markets with a new national retailer in the fourth quarter. During the first quarter of 2026, we secured two additional accounts that are expected to launch in the coming months – a large premier retail customer covering more than 250 stores with a six SKU placement rollout and a large regional retailer.
Current report
Yield Enhancement
Current report
We continue to advance our yield improvement and cost reduction initiatives across our facility network. Tower upgrades were completed at each of our facilities during the fourth quarter, which resulted in enhanced production efficiency and an approximate 10% increase in run-rate yield capacity to reach our highest yields to date.
Current report
We are also making select investments in our California facilities to improve operational efficiency, which we believe can improve yields by as much as 20%, resulting in increased throughput and enhanced margins.
Current report
Capacity Expansion Project
Current report
Intellectual Property
Current report
In February 2026, we were issued U.S. Patent No. 12,557,741, titled "Optimizing Growing Process in a Hybrid Growing Environment Using Computer Vision and Artificial Intelligence." The patent covers our proprietary methods for using computer vision, machine learning, and automated environmental controls to optimize plant growth across our hybrid vertical and greenhouse growing phases. This is a significant milestone that strengthens the competitive moat around our patented Stack & Flow Technology platform and underscores our technology leadership in controlled environment agriculture. We have been deploying these capabilities across all of our Stack & Flow Technology–enabled facilities with tangible results, using AI-driven analysis of plant growth and environmental data to drive improved consistency and yield.
Current report
Subsequently, in connection with the Eleventh Amendment to the Original Credit Agreements, we entered into additional amendments to existing warrants held by Cargill Financial (the “Cargill Warrant Amendments”). These amendments applied to (i) the March 2023 Cargill Warrant (the “Cargill Base Warrant”) and (ii) the warrants issued to Cargill Financial on November 21, 2021 (the “Cargill 2021 Warrants,” and together with the Base Warrant, the “Cargill Original Warrants”). The Cargill Warrant Amendments (a) reduced the exercise price of the Cargill Original Warrants to $4.00 per share of common stock, (b) extended the expiration date of each warrant to eight years from the closing date of the Eleventh Amendment, and (c) amended and restated the Cargill 2021 Warrants so that its terms conform to the form of the Cargill Base Warrant. The Cargill Original Warrants and the Cargill Amended Warrants cover the same aggregate number of shares, representing the right to purchase up to 5,408,145 shares of our common stock.
Current report
On August 1, 2025, we entered into a Convertible Note and Warrant Purchase Agreement with U.S. Bounti, LLC, pursuant to which the Company issued (i) a $10.0 million convertible note (the “Note”) and (ii) a common stock purchase warrant to acquire 550,000 shares of our common stock at an exercise price of $0.125 per share (the “U.S. Bounti Warrant”). The U.S. Bounti Warrant is exercisable upon issuance and expires on August 1, 2035. Similar to the Cargill Original Warrants, the Company determined that the U.S. Bounti Warrant does not meet the indexation or equity classification criteria under ASC 815 and therefore requires liability classification. The initial $1.5 million fair value of the U.S. Bounti Warrant was recorded as additional debt discount and a derivative liability in the "Warrant liability" line item of the Consolidated Balance Sheets.
Current report
Both the Cargill Amended Warrants and the U.S. Bounti Warrant will continue to be remeasured at fair value each period until exercised or expired. Any significant changes to the underlying valuation assumptions may result in material volatility in the “Change in fair value of warrant liability” line item in the Consolidated Statements of Operations.
Current report
As of December 31, 2025, the Company is no longer using the Pete’s trade name in its line of products. Because the Pete’s trade name is no longer in use, management concluded that the related trade name intangible asset's carrying value was no longer recoverable. Accordingly, the related trade name intangible asset was written off in full during the third quarter of 2025, resulting in an impairment charge of $3.7 million. The impairment charge is included in "General and administrative" expenses in the Consolidated Statements of Operations for the year ended December 31, 2025.
Current report
Sales and Marketing
Current report
Sales and marketing costs increased by $1.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by an increase of $0.6 million in transportation and delivery costs as a result of increased shipments of produce driven by an increase in sales, an increase of $0.5 million in stock-based compensation, and a $0.2 million increase in salaries, benefits, and payroll-related expenses. This was partially offset by a decrease of $0.2 million in marketing and advertising costs. The remaining difference is due to individually immaterial differences.
Current report
General and Administrative
Current report
General and administrative expenses increased by $0.9 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by an impairment charge of $3.7 million related to Pete's trade name and an increase in stock-based compensation of $1.4 million, which was partially offset by a decrease of $1.7 million in salaries, benefits, and payroll-related expenses, a decrease of $1.4 million in loss on disposal of assets, and a decrease of $0.9 million in professional fees. The remaining difference is due to individually immaterial differences.
Current report
Other (expense) income, net for the year ended December 31, 2025 consists primarily of the release of a multi-year special indemnity escrow established in connection with the Pete's Acquisition. The escrow secured certain specified indemnification obligations (including water rights-related representations) and was released upon mutual settlement of the escrow agreement with the former Pete's shareholders, resulting in a one-time, non-operating gain.
Current report
As of December 31, 2025, a total of $302.0 million of principal was outstanding on the Senior Facility. The Senior Facility is included in "Long-term debt, net" on the Unaudited Condensed Consolidated Balance Sheets. The Eleventh Amendment, as described in Note 7, Debt, to the Unaudited Condensed Consolidated Financial Statements, resulted in a lower principal balance and a reduced interest rate. In addition, a debt premium recorded in connection with the amendment will be amortized as a reduction to interest expense over the 10-year term of the Amended Senior Credit Agreement using the effective interest method.
Current report
From January 1, 2027 to December 31, 2029, interest will accrue on $100 million of the Senior Facility and will be due and payable in cash starting the first business day after the close of each calendar quarter, beginning with the quarter commencing April 1, 2027, and continuing through December 31, 2029. Interest accruing on the outstanding principal balance of the Senior Facility in excess of $100 million will, at the Company’s option, either be paid in cash or paid in kind, beginning with the quarter commencing April 1, 2027, and continuing through December 31, 2029. As no interest payments are due in the next twelve months, the accrued interest has been classified within "Accrued interest, noncurrent" on the Unaudited Condensed Consolidated Balance Sheets.
Current report
From January 1, 2030 to March 31, 2031, interest will accrue on up to $200 million of the Senior Facility and will be due and payable in cash starting the first business day after the close of each calendar quarter, beginning with the quarter commencing April 1, 2030, and continuing through March 31, 2031. Interest accruing on the outstanding principal balance of the Senior Facility in excess of $200 million will, at the Company's option, either be paid in cash or paid-in-kind, beginning with the quarter commencing April 1, 2027, and continuing through March 31, 2031.
Current report
At all times after March 31, 2031, interest shall be payable only in cash on the first business day after each calendar quarter end. Additionally, beginning in the fourth quarter of 2027, 50% of the free cash flow (as defined in the Eleventh Amendment) generated in the preceding quarter must be used for principal repayment on a quarterly basis. The maturity date of the Senior Facility subsequent to the Eleventh Amendment is December 31, 2035.
Current report
U.S. Bounti, LLC Convertible Note
Current report
On August 1, 2025, the Company entered into a Convertible Note and Warrant Purchase Agreement with U.S. Bounti, LLC, providing for the issuance of (i) the Note with an initial principal balance of $10.0 million and (ii) the U.S. Bounti Warrant pursuant to which U.S. Bounti, LLC has the right to purchase and acquire 550,000 shares of our common stock at $0.125 per share. The Note has a maturity date of August 1, 2030 and carries a 6.0% annual interest rate, with interest added to the Note balance twice a year through the end of 2028.
Current report
The Note can be converted into our common stock at $2.50 per share (the "Conversion Price"). Conversion of the full initial principal amount of the Note would result in the issuance of 4.0 million shares of our common stock, with additional shares possible from accrued interest. On August 1, 2029, 50% of the Note will automatically convert into shares of our common stock at the Conversion Price. The remaining 50% of the Note will automatically convert into shares of our common stock at the Conversion Price on the maturity date of the Note. The Note is subordinated to obligations under the Company’s Senior Facility.
Current report
From time to time after August 1, 2028, interest may be payable quarterly in arrears in cash, commencing December 31, 2028, if certain conditions are met. As no interest payments are due in the next twelve months, the accrued interest has been classified within "Accrued interest, noncurrent" on the Unaudited Condensed Consolidated Balance Sheets.
Current report
Net cash provided by financing activities was $45.2 million for the year ended December 31, 2025, comprised of $20.9 million of proceeds from the issuance of Series A Preferred Stock, $10.5 million of proceeds from the issuance of debt, $9.9 million of proceeds from the issuance of the U.S. Bounti, LLC convertible note, $3.5 million from the issuance of common stock, and $1.6 million of proceeds from a financing obligation related to certain greenhouse and conveyor equipment located in the Company's Texas facility.
Removed paragraphs (22)
Previous report
Texas Facility Product Mix Transition Progress
Previous report
We continue to make significant progress at our six-acre Texas facility. In response to evolving customer demands, we strategically reconfigured three acres of the facility—originally designed for head lettuce production—to create a flexible growing environment capable of producing both head lettuce and cut products based on customer preferences. This purposeful design approach highlights our commitment to adaptability and customer-centric operations. While this reconfiguration temporarily impacted the full utilization of the facility in the second half of 2024 and first quarter of 2025, we are now in the final stages of completing this work and expect to begin commercial production in this section starting in the second quarter of 2025. The purpose-built automated harvesting equipment for the configuration will be installed early third quarter 2025, replacing the temporary harvester we will use during the second quarter of 2025. The purpose-built harvester is expected to drive significant operational efficiencies and margin improvement.
Previous report
Capacity Expansion Project Update
Previous report
Product Development & Distribution
Previous report
We expanded our high-value specialty greens distribution in the fourth quarter of 2024, bringing products like Arugula and Power Crisp to several Pacific Northwest retailers. We also expanded our Texas-grown Arugula offering with Brookshire's in approximately 80 stores in the first quarter of 2025 and began distributing Organic Living Butter Lettuce from California to HEB, strategically leveraging regional production to align with specific customer needs. Additionally, we started shipping living Basil to an existing large retail customer across approximately 60 stores and secured distribution with several other wholesalers for their Basil products.
Previous report
We further strengthened our distribution network by establishing a new partnership with a prominent Midwest wholesaler and significantly expanded our relationship with Walmart, now serving 191 stores with premium baby leaf varieties. We also secured an additional commitment to serve 13 Walmart distribution centers with our Conventional Living Butter Lettuce, with shipments commencing in the second quarter from both our California and Texas facilities.
Previous report
Building on our Grab-and-Go Salad Kit rollout in 2024, we have evolved this offering to better serve retail partners and consumer trends. This evolution included the launch of new salad kits in the first quarter 2025, with additional flavors expected to be introduced in the third quarter of 2025, as well as the creation of a new product line that meets the needs of today’s value-oriented consumer. These developments reflect our strategy of implementing an optimized product mix while aligning production capabilities with specific customer needs.
Previous report
•Complete construction and commissioning of new and expanded facilities;
Previous report
Goodwill
Previous report
We account for acquired businesses using the acquisition method of accounting which requires that the assets acquired, and liabilities assumed be recorded at the date of acquisition at their respective fair values.
Previous report
Goodwill is not subject to amortization and is reviewed for impairment annually during the fourth fiscal quarter, or earlier whenever events or changes in business circumstances indicate an impairment may have occurred. Our impairment tests are based on a single reporting unit structure. Goodwill is considered impaired if the carrying value of the reporting unit exceeds its fair value, with an impairment charge recognized for the difference.
Previous report
When reviewing goodwill for impairment, we begin by performing a qualitative assessment, which includes, but is not limited to, reviewing factors such as macroeconomic conditions, industry and market considerations, budget-to-actual performance, and trends in market capitalization for us and our peers. As a result of this qualitative assessment in the fourth quarter of 2023, we determined that it was more likely than not that the fair value of our single reporting unit was less than its carrying value. Therefore, we performed a subsequent quantitative assessment. After performing the quantitative impairment test in accordance with ASC 350-20-35-3C, we determined that the carrying amount of our single reporting unit exceeded the fair value of the reporting unit, resulting in a goodwill impairment of $38.5 million for the year ended December 31, 2023. No goodwill remained on the Consolidated Balance Sheets as of December 31, 2024 and 2023.
Previous report
Selling, General, and Administrative Expenses
Previous report
Selling, general, and administrative expenses decreased by $23.8 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily driven by a $12.9 million decrease in stock-based compensation that was a result of prior year awards that were issued at a higher fair value that fully vested and were expensed in prior periods, as compared to the fair value of awards being expensed in the current period. Additional decreases as compared to the prior year period were a $3.9 million decrease in salaries, benefits, and payroll-related expenses, $3.6 million decrease in legal, accounting, and professional consulting costs, and a $2.9 million decrease in loss on disposals charges primarily for construction-in-progress assets, which was partially offset by an increase of $1.0 million in insurance, and an increase of $0.9 million in transportation and delivery costs.
Previous report
Goodwill Impairment
Previous report
During the year ended December 31, 2023, we recognized a goodwill impairment of $38.5 million. There was no goodwill impairment recognized during the year ended December 31, 2024.
Previous report
The Company's expectation of generating operating losses and negative operating cash flows in the future, and the need for additional funding to support the Company's planned operations initially raised substantial doubt regarding its ability to continue as a going concern. However, based on management's current operating plan, the Company believes its cash on hand, projected cash generated from product sales, as well as the PIPE Financing completed on March 31, 2025, which provided $25.0 million of additional working capital, as disclosed in Note 18, Subsequent Events, of the Consolidated Financial Statements, are sufficient to fund the Company's operations for a period of a least 12 months subsequent to the issuance of the accompanying Consolidated Financial Statements and alleviates the conditions that initially raised substantial doubt regarding the Company's ability to continue as a going concern.
Previous report
In September 2021, the Company and Cargill Financial entered into the Senior Facility and the Subordinated Facility. Subsequent to the amendments described in Note 7, Debt, of the Consolidated Financial Statements, Cargill Financial may, at its discretion, provide advances under the Facilities of up to $393.7 million (plus interest and fees paid in kind), including capital to fund construction at the Company’s facilities in Georgia, Texas, and Washington, subject to certain conditions. As of December 31, 2024, a total of $54.6 million and $413.4 million was outstanding on the Subordinated Facility and the Senior Facility, respectively. The Subordinated Facility and the Senior Facility are included in "Long-term debt, net of debt issuance costs" and "Short-term debt" on the Consolidated Balance Sheet.
Previous report
At December 31, 2024, our principal and estimated interest payment obligations for the Senior Facility and the Subordinated Facility are as follows(1):
Previous report
(1)Interest is calculated based on a 12.5% interest rate for the Subordinated Facility and a 12.8% interest rate for the Senior Facility effective as of January 1, 2025.
Previous report
We have two financing obligations related to failed sale leaseback transactions for the California Facilities and the Montana Facility (see Note 8, Financing Obligations, to the Consolidated Financial Statements for additional detail on these transactions).
Previous report
Net cash provided by financing activities was $187.4 million for the year ended December 31, 2023, comprised of $152.6 million of proceeds from the issuance of debt and $35.0 million of proceeds from the sale and leaseback transaction for the California Facilities. See Note 9, Financing Obligations, in Notes to the Consolidated Financial Statements for additional detail on the sale and leaseback transaction.
Reworded paragraphs (22)
Previous wording
Local Bounti is a controlled environment agriculture ("CEA") company that produces sustainably grown produce, focused primarily on living and loose leaf lettuce, arugula, spinach, and basil. Founded in 2018 and headquartered in Hamilton, Montana, Local Bounti utilizes its patented Stack & Flow Technology® to grow healthy food sustainably and affordably. Our proprietary process is a hybrid growing approach, utilizing vertical farming in early plant growth, followed by greenhouse farming for final grow out. We designed our Stack & Flow Technology® to give our products exactly what they need at every step of their growth cycle. Our goal is to grow in an environmentally sustainable manner that not only increases harvest efficiency and enhances unit economics, but also limits water usage and reduces the carbon footprint of the production and distribution process. Controlling the environmental conditions in both the 'Stack' and 'Flow' components of our growing system helps to ensure healthy, nutritious, and consistent products that are non-genetically modified organisms ("non-GMO"). We use 90% less water, 90% less land, and significantly less pesticides and herbicides than traditional outdoor agriculture operations.
Current wording
Local Bounti is a controlled environment agriculture ("CEA") company that produces sustainably grown produce, focused primarily on living lettuce, salad kits, and loose leaf lettuce. Founded in 2018 and headquartered in Hamilton, Montana, Local Bounti utilizes its patented Stack & Flow Technology® to grow healthy food sustainably and affordably. Our proprietary process is a hybrid growing approach, utilizing vertical farming in early plant growth, followed by greenhouse farming for final grow out. We designed our Stack & Flow Technology to give our products exactly what they need at every step of their growth cycle. Our goal is to grow in an environmentally sustainable manner that not only increases harvest efficiency and enhances unit economics, but also limits water usage and reduces the carbon footprint of the production and distribution process. Controlling the environmental conditions in both the 'Stack' and 'Flow' components of our growing system helps to ensure healthy, nutritious, and consistent products that are non-genetically modified organisms ("non-GMO"). We use 90% less water, 90% less land, and significantly less pesticides and herbicides than traditional outdoor agriculture operations.
Previous wording
Our first facility in Hamilton, Montana (the "Montana Facility") commenced construction in 2019 and reached commercial operation by the second half of 2020. In 2022, we acquired California-based complementary greenhouse farming company Hollandia Produce Group, Inc. and its subsidiaries, which operated under the name Pete's. Through the Pete's Acquisition, we significantly increased our growing footprint to include two then-existing facilities in California and one under-construction facility in Georgia. The Georgia facility initially became operational in July 2022 and was significantly expanded in 2023. In 2024, we completed construction on two new facilities in Washington and Texas, bringing our total facility count to six.
Current wording
Our first facility in Hamilton, Montana (the "Montana Facility") commenced construction in 2019, reached commercial operation by the second half of 2020, and now acts as a corporate headquarters without active commercial operations. The Company is currently evaluating the future commercial use of its Montana facility because we no longer have additional capacity at other facilities. Management is exploring various utilization options, including supporting capacity needs within the Company’s existing network as well as potential third-party commercial arrangements. In 2022, we acquired California-based complementary greenhouse farming company Hollandia Produce Group, Inc. and its subsidiaries, which operated under the name Pete's. Through the Pete's Acquisition, we significantly increased our growing footprint to include two then-existing facilities in California and one under-construction facility in Georgia. The Georgia facility initially became operational in July 2022 and was significantly expanded in 2023. In 2024, we completed construction on two new facilities in Washington and Texas.
Previous wording
We distribute our products to approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, H-E-B, Sprouts, and AmazonFresh. Our primary products include living butter lettuce – for which we are a leading provider with an approximate 80% share of the CEA market within the Western U.S. – as well as packaged leafy greens and cress. We recently introduced new Grab & Go Salads and additions to our baby leaf portfolio with several high-velocity offerings, including Spinach, Arugula, and Basil. In addition, we introduced 50/50 blend and power greens in the third quarter of 2024. We signed an offtake agreement with Sam's Club in October 2022 for our leafy greens production, initially from our Georgia facility and now including both our Georgia and Texas facilities. The offtake agreement provides for the sale of defined minimum quantities of leafy greens from our Georgia and Texas facilities and runs through September 2028.
Current wording
We distribute our products to approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, and H-E-B. Our primary products include living butter lettuce – for which we are a leading provider with an approximate 80% share of the CEA market within the Western U.S. – as well as packaged leafy greens and cress.
Previous wording
Plans remain in place to build additional capacity across our network of facilities enabled with our patented Stack & Flow Technology®. The planned expansions are designed to provide additional capacity and allow for our growing product assortment to meet existing demand from our direct relationships with blue-chip retailers and distributors. The timing and scope of these projects, including plans to expand into the Midwest, remain under review pending ongoing discussions with retailers to optimize those facilities for specific products in support of retail commitments and strategies to expand distribution.
Current wording
Plans remain in place to build additional capacity across our network of facilities enabled with our patented Stack & Flow Technology. The expansions are designed to provide additional capacity and allow for our growing product assortment to meet existing demand from our direct relationships with blue-chip retailers and distributors. The timing and scope of these projects, including plans to expand into the Midwest, remain under review pending ongoing discussions with retailers to optimize those facilities for specific products in support of retail commitments and strategies to expand distribution.
Previous wording
On March 28, 2023, Local Bounti Operating Company LLC, the Company and certain subsidiaries entered into a Sixth Amendment to the Original Credit Agreements (the "Sixth Amendment") with Cargill Financial. In connection with the Sixth Amendment, we issued Cargill Financial 5.4 million warrants with a per share exercise price of $13.00 per share (both number of warrants and per share exercise price adjusted for the June 15, 2023 Reverse Stock Split (as defined in Note 11, Stockholders' Equity (Deficit), to our Consolidated Financial Statements)) and a 5-year term that expires on March 28, 2028 (the "March 2023 Cargill Warrant"). On January 23, 2024, the Company entered into an amendment to amend the March 2023 Cargill Warrant. The amendment amended the exercise price of the March 2023 Cargill Warrant from $13.00 to $6.50 per share of common stock (refer to Note 7, Debt, of the Consolidated Financial Statements for more information about the amendment to the March 2023 Cargill Warrant).
Current wording
On March 28, 2023, we entered into a Sixth Amendment to the Original Credit Agreements with Cargill Financial. In connection with the Sixth Amendment, we issued Cargill Financial 5.4 million warrants with a per-share exercise price of $13.00 and a five-year term expiring March 28, 2028 (the “March 2023 Cargill Warrant”). On January 23, 2024, we amended the March 2023 Cargill Warrant to reduce the exercise price from $13.00 to $6.50 per share (see Note 7, Debt, of the Consolidated Financial Statements for additional information). The initial $25.7 million fair value of the March 2023 Cargill Warrant was recorded as additional debt discount and a derivative liability in the "Warrant liability" line item of the Consolidated Balance Sheets.
Previous wording
Due to certain provisions that could result in the issuance of additional shares upon settlement, the warrant instrument did not meet the fixed-for-fixed criteria necessary for the instrument to be classified and recorded within equity. As a result, the March 2023 Cargill Warrant is accounted for at fair value until settled through exercise or expiration and is classified as a derivative warrant liability in the Consolidated Balance Sheets at December 31, 2024 and 2023, in accordance with ASC Topic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity.
Current wording
Due to certain provisions that could result in the issuance of additional shares upon settlement, the warrant instrument did not meet the fixed-for-fixed criteria necessary for the instrument to be classified and recorded within equity. As a result, the Cargill Original Warrants are accounted for at fair value until settled through exercise or expiration and is classified as a derivative warrant liability in the Consolidated Balance Sheets at December 31, 2025 and 2024, in accordance with ASC Topic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity.
Previous wording
We utilize a Black-Scholes option pricing model ("Black-Scholes model") to estimate the fair value of the March 2023 Cargill Warrant at each reporting date. The application of the Black-Scholes model utilizes significant assumptions and estimates to determine an appropriate risk-free interest rate, volatility, term, dividend yield, discount due to exercise restrictions, and the fair value of common stock. Any significant adjustments to the unobservable inputs would directly impact the fair value of the warrant liability. As a result of the unobservable inputs that were used to determine the expected volatility of the March 2023 Cargill Warrant, the fair value measurement of these warrants reflected a Level 3 measurement within the fair value measurement hierarchy.
Current wording
We utilize a Black-Scholes option pricing model (“Black-Scholes model”) to estimate the fair value of the Cargill Original Warrants and the U.S. Bounti Warrant at each reporting date. The application of the Black-Scholes model involves significant assumptions and estimates, including the risk-free interest rate, expected volatility, remaining contractual term, dividend yield, any applicable discounts for exercise restrictions, and the fair value of our common stock. Any significant adjustments to these unobservable inputs would directly impact the fair value of the related warrant liabilities. Because the valuation of these derivative warrant instruments incorporates unobservable inputs, including those used to determine expected volatility, the fair value measurements are classified as Level 3 within the fair value measurement hierarchy.
Previous wording
Long-lived assets that are held and used are tested for impairment at the asset group level. An asset group is the unit of account for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Since each Company greenhouse facility is able to generate identifiable cash flows, each of our facilities is considered to be an asset group. The Company did not recognize any impairment of long-lived assets for the years ended December 31, 2024 and 2023.
Current wording
Long-lived assets that are held and used are tested for impairment at the asset group level. An asset group is the unit of account for a long-lived asset or assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Since each Company greenhouse facility is able to generate identifiable cash flows, each of our facilities is considered to be an asset group.
Previous wording
Sales increased by $10.6 million to $38.1 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase was due to increased production and growth in sales from our facility in Georgia and sales from our new facilities in Texas and Washington, which began shipping and selling products in the second quarter of 2024.
Current wording
We derive our revenue from the sale of produce grown at our facilities. Sales increased by $10.2 million to $48.4 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase was due to increased production and growth in sales from our facility in Georgia and sales from our new facilities in Texas and Washington, which began shipping and selling products in the second quarter of 2024.
Previous wording
Cost of goods sold increased by $8.7 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, due primarily to production ramp-up at our new Texas and Washington facilities and increased production at our Georgia facilities.
Current wording
Cost of goods sold increased by $8.5 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, due primarily to production ramp-up at our new Texas and Washington facilities and increased production at our Georgia facilities.
Previous wording
Research and development expenses primarily consist of costs associated with the ongoing development, improvement, testing, alteration, and refinement of our product offerings, production lines, manufacturing processes, growing techniques, and post-harvest packaging methods. Our research and development efforts focus on enhancing each facility’s indoor environmental controls, growing recipes, and refining Stack & Flow Technology® processes, all aimed at meeting facility design and production yield specifications. Additionally, we also focus on the development of new leafy green product offerings, value-added products such as Grab & Go Salads, and new crops, including spinach, arugula, basil, and berries. Research and development activities are conducted at the facilities in Montana, Texas, Washington, California, and Georgia.
Current wording
Research and development expenses primarily consist of costs associated with the ongoing development, improvement, testing, alteration, and refinement of our product offerings, production lines, manufacturing processes, growing techniques, and post-harvest packaging methods. Our research and development efforts focus on enhancing each facility’s indoor environmental controls, growing recipes, and refining Stack & Flow Technology processes, all aimed at meeting facility design and production yield specifications. Additionally, we also focus on the development of new leafy green product offerings, value-added products such as Grab & Go Salads, and new crops, including arugula and berries.
Previous wording
Research and development costs increased by $6.2 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase is driven primarily by the additional development of our production, harvesting, and post-harvest packaging techniques and processes, including production surplus costs, related to the development and testing of our commercial-scale Stack & Flow Technology® and production processes at the Washington and Texas facilities.
Current wording
Research and development costs increased by $3.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The increase is driven primarily by the additional development of our production, harvesting, and post-harvest packaging techniques and processes, including production surplus costs, related to the development and testing of our commercial-scale Stack & Flow Technology and production processes at the Washington, Texas, and Georgia facilities.
Previous wording
Selling, general, and administrative expenses consist of employee compensation, including salaries, benefits, and stock-based compensation for our executive, legal, finance, information technology, human resources and sales and marketing teams, expenses for third-party professional services, insurance, marketing, advertising, computer hardware and software, and amortization of intangible assets, among others.
Current wording
General and administrative expenses consist of employee compensation, including salaries, benefits, and stock-based compensation for our executive, legal, finance, information technology, and human resources teams, expenses for third-party professional services, insurance, computer hardware and software, and amortization of intangible assets, among others.
Previous wording
The change in fair value of warrant liability includes the mark-to-market adjustments to the warrant liability to reflect its fair value as of the end of the reporting period. The decrease in fair value of the warrant liability is due to the decrease in our closing stock price on December 31, 2024, compared to the closing stock price on December 31, 2023. The period-end close stock price is a key input to the Black-Scholes model we use to measure and estimate the fair value of the warrant at the end of each reporting period.
Current wording
The change in fair value of warrant liability includes the mark-to-market adjustments to the Cargill Amended Warrants liability and the initial issuance and subsequent mark-to-market adjustments to the U.S. Bounti Warrant liability to reflect their fair value as of the end of the reporting period. The increase in fair value of the warrant liability is primarily due to the Eleventh Amendment entered into on March 31, 2025, which amended the Cargill Original Warrants by decreasing the per share exercise price of the Cargill Original Warrants from $6.50 to $4.00 per share with an amended expiration date of March 31, 2033 and the issuance of the U.S. Bounti Warrant in connection with the issuance of a convertible note with an initial principal balance of $10.0 million on August 1, 2025. The issuance of the U.S. Bounti Warrant and the change in terms of the Cargill Amended Warrants increased the value of the warrants and the related liability for year ended December 31, 2025. Additional increase in the value of the warrants for the year ended December 31, 2025 is primarily due to a net increase in our closing stock price at December 31, 2025 compared to the closing stock price on the prior measurement date of December 31, 2024. The period-end close stock price is a key input to the Black-Scholes model we use to measure and estimate the fair value of the warrant at the end of each reporting period.
Previous wording
Interest expense, net increased by $33.2 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. The increase is primarily due to a significant increase in the principal amount outstanding on the Senior Facility, which increased interest expense by $31.6 million over the prior year period. Also contributing to the net increase was $1.5 million of incremental interest expense for the financing obligations related to the California Facilities. During the year ended December 31, 2024 and 2023, we capitalized $10.8 million and $14.9 million of interest, respectively.
Current wording
Interest expense, net decreased by $26.8 million for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease is primarily due to a decrease in the principal amount outstanding under the Senior Facility and a reduction in the contractual interest rate as a result of the Eleventh Amendment, which decreased interest expense by $27.1 million, net of interest capitalized, over the prior year period.
Previous wording
Other (expense) income consists primarily of a $3.0 million write-off offinancing fees related to unsuccessful efforts in raising additional capital during the year ended December 31, 2024.
Current wording
Other (expense) income, net for the year ended December 31, 2024 consists primarily of a $3.0 million write-off of financing fees related to unsuccessful efforts in raising additional capital during the year ended December 31, 2024.
Previous wording
We have incurred losses and generated negative cash flows from operations since our inception. At December 31, 2024, we had an accumulated deficit of $423.2 million and cash and cash equivalents and restricted cash of $7.5 million.
Current wording
We have incurred losses and generated negative cash flows from operations since our inception. At December 31, 2025, we had an accumulated deficit of $517.6 million and cash and cash equivalents and restricted cash of $10.7 million.
Previous wording
As of December 31, 2024, the principal amount due under our credit facilities with Cargill Financial totaled $467.9 million, of which $20.2 million is classified as current. We also had accrued interest of $15.3 million as of December 31, 2024. These debt agreements contain various financial and non-financial covenants and certain restrictions on our business, which include restrictions on additional indebtedness, minimum liquidity and other financial covenants, and material adverse effects that could cause us to be at risk of default. A failure to comply with the covenants and other provisions of these debt instruments, including any failure to make payments when required, would generally result in events of default under such instruments, which could result in the acceleration of a substantial portion of such indebtedness.
Current wording
As of December 31, 2025, the principal amount due under our credit facilities with Cargill Financial totaled $302.0 million, none of which is classified as current. In addition, the Company has an outstanding convertible note for $10.0 million to U.S. Bounti, LLC, none of which is classified as current. The debt agreements with Cargill Financial contain various financial and non-financial covenants and certain restrictions on our business, which include restrictions on additional indebtedness, minimum liquidity and other financial covenants, and material adverse effects that could cause us to be at risk of default. A failure to comply with the covenants and other provisions of these debt instruments, including any failure to make payments when required, would generally result in events of default under such instruments, which could result in the acceleration of a substantial portion of such indebtedness.
Previous wording
The CEA business is capital-intensive. Currently, our primary sources of liquidity and capital resources are cash on hand, cash flows generated from the sale of our products, and the credit facilities with Cargill Financial. Cash expenditures over the next 12 months are expected to include general operating costs for employee wages and related benefits, outside services for legal, accounting, IT infrastructure, and costs associated with growing, harvesting, and selling our products, such as the purchase of seeds, soil, nutrients, and other growing supplies, shipping and fulfillment costs, and facility maintenance costs.
Current wording
The CEA business is capital-intensive. Currently, our primary sources of liquidity and capital resources are cash on hand, cash flows generated from the sale of our products, and the credit facilities with U.S. Bounti, LLC and Cargill Financial. Cash expenditures over the next 12 months are expected to include general operating costs for employee wages and related benefits, outside services for legal, accounting, IT infrastructure, and costs associated with growing, harvesting, and selling our products, such as the purchase of seeds, soil, nutrients, and other growing supplies, shipping and fulfillment costs, and facility maintenance costs.
Previous wording
The following table summarizes future aggregate financing obligation payments by fiscal year for both the California Facilities and the Montana Facility:
Current wording
We have three financing obligations related to sale leaseback transactions that did not qualify for sales treatment of the underlying assets. For more information about our financing obligations, see Note 8, Financing Obligations, of the Consolidated Financial Statements. The following table summarizes future aggregate financing obligation payments by fiscal year:
Previous wording
Net cash used in operating activities was $33.2 million for the year ended December 31, 2023, primarily due to a net loss of $124.0 million, which included a non-cash gain of $18.5 million related to change in fair value of warrant liability. This was partially offset by non-cash activities of $38.5 million in goodwill impairment, $24.0 million in paid-in-kind interest, $16.3 million in stock-based compensation expense, net of amounts capitalized, $7.3 million in amortization of debt issuance costs, $7.2 million in depreciation expense, $5.9 million in amortization expense, $4.7 million in loss on disposal of property and equipment, and a $5.1 million net increase of cash from changes in assets and liabilities.
Current wording
Net cash used in operating activities was $30.3 million for the year ended December 31, 2025, primarily due to a net loss of $94.4 million. This was partially offset by non-cash activities of $30.9 million in paid-in-kind interest, $19.9 million in depreciation expense, $5.2 million in stock-based compensation expense, net of amounts capitalized, $3.7 million of intangible asset impairment, $3.4 million related to the change in fair value of warrant liability, $3.3 million in amortization expense, $2.2 million in amortization of debt issuance costs, $0.3 million in loss on disposal of property and equipment, and a $0.3 million net increase of cash from changes in assets and liabilities. These amounts were partially offset by $5.7 million of non-cash amortization of debt premium.
Previous wording
Net cash used in investing activities was $162.3 million for the year ended December 31, 2023, due primarily to purchases of equipment and other items for the Washington, Georgia, and Texas facilities.
Current wording
Net cash used in investing activities was $11.6 million for the year ended December 31, 2025, due primarily to purchases of equipment and other items for the Washington, Georgia, and Texas facilities.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
On April 4, 2022, the Company acquired California-based complementary greenhouse farming company Hollandia Produce Group, Inc. and its subsidiaries, which operated under the name Pete’s. As part of the acquisition, the Company recognized identifiable intangible assets, including, among other intangibles, the Pete’s trade name.
Current report — wording carried from elsewhere
The Company did not recognize any other impairment of long-lived assets for the years ended December 31, 2025 and 2024.
Current report — wording carried from elsewhere
Sales and marketing expenses consist of employee compensation, including salaries, benefits, and stock-based compensation for our sales and marketing teams, transportation and delivery costs, marketing, and advertising, among others.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The initial $25.7 million fair value of the March 2023 Cargill Warrant was recorded as additional debt discount and a derivative liability in the "Warrant Liability" line item of the Consolidated Balance Sheets. The change in fair value of the warrant is remeasured each quarter until the instrument is settled or expires with changes in fair value recorded in "Change in fair value of warrant liability" in the Consolidated Statements of Operations.
Previous report — wording carried elsewhere
We derive our revenue from the sale of produce grown at our six facilities.