Local Bounti Corporation/DE

Previous 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 (the "Pete's Acquisition"). 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 became operational in July 2022 and was significantly expanded in 2023. In 2024, we completed construction of two new facilities in Washington and Texas.

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. 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 (the "Pete's Acquisition"). 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 became operational in July 2022 and was significantly expanded in 2023. In 2024, we completed construction of two new facilities in Washington and Texas.

Previous wording

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 of 2025. During the first quarter of 2026, we secured and launched programs with two additional accounts, including a large premier retail customer covering more than 250 stores with a six SKU rollout, and a large regional retailer. Our quarterly sales to a major e-commerce and direct-to-consumer customer continue to perform strongly following significant growth during 2025.

Current wording

•In the first quarter of 2026, a six-SKU rollout covering more than 250 Harris Teeter stores.

Previous wording

We continue to benefit from strong demand and ongoing support from our long-standing customer base. In the first and early second quarter of 2026, we were awarded bids that extend supply programs with multiple national retail accounts through the first quarter of 2027. These commitments span several of our key product lines, including baby leaf lettuce and organic butter lettuce. The awards underscore the strength of our relationships with blue-chip retail partners and reflect those customers’ continued confidence in our ability to deliver consistent, high-quality products over the long term.

Current wording

•In the first and second quarter of 2026, we were awarded bids extending supply arrangements with multiple national retail accounts, spanning key product lines including baby leaf lettuce and organic butter lettuce.

Previous wording

We continue to advance our yield improvement and cost reduction initiatives across our facility network. Tower upgrades were completed at our Georgia, Texas and Washington facilities during the fourth quarter of 2025, which resulted in enhanced production efficiency and an approximate 10% increase in run-rate yield capacity to reach the highest yields in our history.

Current wording

We continue to advance our yield improvement and cost reduction initiatives across our facility network. Tower upgrades were completed at our Georgia, Texas, and Washington facilities during the fourth quarter of 2025, which resulted in enhanced production efficiency and an increase in run-rate yield capacity to reach our highest historical yields and its yields remain at this improved run-rate capacity today.

Previous wording

We derive our revenue from the sale of produce grown at our five facilities. Sales increased by $1.7 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was due to increased production and growth in sales from our facilities in Georgia, Texas and Washington.

Current wording

We derive our revenue from the sale of produce grown at our five facilities. Sales increased by $1.7 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025 and sales increased by $3.5 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due to increased production and growth in sales from our facilities in Georgia, Texas and Washington.

Previous wording

Cost of goods sold increased by $1.7 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was due to production ramp-up at our facilities in Georgia, Texas and Washington.

Current wording

Cost of goods sold increased by $2.2 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025 and increased by $3.8 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The increase was due to production ramp-up at our facilities in Georgia, Texas and Washington.

Previous wording

Research and development costs decreased by $1.3 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease was primarily attributable to the maturation of our production, harvesting, and post-harvest packaging initiatives. As testing and refinement of our commercial-scale Stack & Flow Technology and related production processes at the Washington, Texas, and Georgia facilities progressed toward operational deployment, associated development activities declined.

Current wording

Research and development costs decreased by $1.9 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025 and decreased by $3.2 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decrease was primarily attributable to the maturation of our production, harvesting, and post-harvest packaging initiatives. As testing and refinement of our commercial-scale Stack & Flow Technology and related production processes at the Washington, Texas, and Georgia facilities progressed toward operational deployment, associated development activities declined.

Previous wording

Sales and marketing costs increased by $0.1 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase is driven primarily by an increase of $0.1 million in transportation and delivery costs as a result of increased shipments of produce driven by an increase in sales.

Current wording

Sales and marketing costs increased by $0.5 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The increase is driven primarily by an increase of $0.4 million in transportation and delivery costs as a result of increased shipments of produce driven by an increase in sales. The remaining difference is due to individually immaterial differences.

Previous wording

General and administrative expenses decreased by $0.6 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by a decrease of $1.1 million in salaries, benefits, and payroll-related expenses and a decrease of $0.2 million in insurance expense, which was partially offset by an increase of $1.0 million in professional fees primarily related to litigation and financing activities. The remaining difference is due to individually immaterial differences.

Current wording

General and administrative expenses decreased by $0.5 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily driven by a decrease of $0.3 million in salaries, benefits, and payroll-related expenses, a decrease of $0.9 million in stock-based compensation, and a decrease of $0.3 million in depreciation and amortization. This decrease was partially offset by an increase of $0.7 million in professional fees and an increase of $0.3 million in property tax. The remaining difference is due to individually immaterial differences.

Previous wording

During the comparative periods, fluctuations in fair value were driven primarily by (i) amendments to the Cargill Amended Warrants, including reductions in exercise price and extensions of contractual lives pursuant to the Eleventh Amendment to our credit agreement, (ii) the issuance of the 2026 U.S. Bounti Warrant and the 2025 U.S. Bounti Warrant, and (iii) changes in key valuation inputs, most notably our stock price at each reporting date. As a result of these factors, the Company recognized a net gain of $5.2 million for the three months ended March 31, 2026, compared to a loss of $3.5 million in the prior-year period.

Current wording

During the comparative periods, fluctuations in fair value were driven primarily by (i) amendments to the Cargill Amended Warrants, including reductions in exercise price and extensions of contractual lives pursuant to the Eleventh Amendment to our credit agreement, (ii) the issuance of the 2026 U.S. Bounti Warrant and the 2025 U.S. Bounti Warrant, and (iii) changes in key valuation inputs, most notably our stock price at each reporting date. As a result of these factors, the Company recognized a net loss of $1.4 million and a net gain of $3.9 million for the three and six months ended June 30, 2026, respectively, compared to a net loss of $1.5 million and a net loss of $5.0 million for the three and six months ended June 30, 2025, respectively.

Previous wording

Interest expense, net decreased by $14.8 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease is primarily due to a decrease in the principal amount outstanding under the Senior Facility as well as a reduction in the overall interest rate as a result of the Eleventh Amendment, which decreased interest expense by $15.0 million, net of interest capitalized, over the prior year period. This decrease was partially offset by an increase of $0.2 million of interest expensed related to our three financing obligations related to sale leaseback transactions.

Current wording

Interest expense, net decreased by $0.1 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025 and decreased by $14.9 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decrease for the six months ended June 30, 2026, compared to the six months ended June 30, 2025 is primarily due to a decrease in the principal amount outstanding under the Senior Facility as well as a reduction in the overall interest rate as a result of the Eleventh Amendment.

Previous wording

We have incurred losses and generated negative cash flows from operations since our inception. At March 31, 2026, we had an accumulated deficit of $530.3 million and cash and cash equivalents and restricted cash of $18.8 million.

Current wording

We have incurred losses and generated negative cash flows from operations since our inception. At June 30, 2026, we had an accumulated deficit of $550.1 million and cash and cash equivalents and restricted cash of $10.1 million.

Previous wording

As of March 31, 2026, the principal amount due under our credit facility with Cargill Financial totaled $302.8 million, none of which is classified as current. In addition, the Company has outstanding convertible notes for $25.0 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.

Current wording

As of June 30, 2026, the principal amount due under our credit facility with Cargill Financial totaled $302.8 million, none of which is classified as current. In addition, the Company has outstanding convertible notes with an initial principal of $25.0 million to U.S. Bounti, LLC, none of which is classified as current. Subsequent to June 30, 2026, the Company issued an additional convertible note to U.S. Bounti, LLC with an initial principal balance of $12.5 million, together with a warrant to purchase 1,000,000 shares of the Company's common stock, which provided $12.5 million of gross proceeds. See Note 13, Subsequent Events, to the Unaudited Condensed Consolidated Financial Statements for further information. 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 and cash flows generated from the sale of our products. 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. Also, we are scheduled to begin making quarterly cash interest payments on April 1, 2027 on the first $100 million principal balance of the Cargill Senior Facility (as discussed further in the Cargill Loans section below). The cash interest payments are estimated to be approximately $1.5 million each quarter through January 2, 2030, based on the current three-month SOFR rate plus the application margin.

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 proceeds from the August 2026 convertible note financing. 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. In addition, interest on the first $100 million principal balance of the Cargill Senior Facility (as discussed further in the Cargill Loans section below) is scheduled to become payable in cash quarterly beginning April 1, 2027; however, pursuant to the August 2026 letter agreement with Cargill Financial, the Company may elect, so long as no default or event of default has occurred and is continuing, to pay interest accrued during the quarters ending March 31, 2027 and June 30, 2027 in kind. If the Company makes this election for both quarters, the first required quarterly cash interest payment would occur on October 1, 2027, with respect to interest accrued during the quarter ending September 30, 2027. The quarterly cash interest payments are estimated to be approximately $1.5 million each quarter through January 2, 2030, based on the current three-month SOFR rate plus the applicable margin.

Previous wording

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 wording

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; provided that, pursuant to the August 2026 letter agreement with Cargill Financial described in Note 13, Subsequent Events, interest accrued during the quarters ending March 31, 2027 and June 30, 2027 may, at the Company's election and so long as no default or event of default has occurred and is continuing, be paid in kind. 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 the Company expects to elect to pay interest accrued during the quarters ending March 31, 2027 and June 30, 2027 in kind pursuant to the August 2026 letter agreement, no cash interest payments are expected to be due within the next twelve months, and accrued interest has been classified within “Accrued interest, noncurrent” on the Unaudited Condensed Consolidated Balance Sheets.

Previous wording

Net cash used in operating activities was $6.1 million for the three months ended March 31, 2026 due to a net loss of $12.7 million, a non-cash gain of $5.2 million related to change in fair value of warrant liabilities, and $2.1 million in amortization of debt premium. This was partially offset by non-cash activities of $5.6 million in depreciation and amortization expense, $1.0 million in stock-based compensation expense, net of amounts capitalized, $0.1 million in amortization of debt issuance costs, and $7.2 million net increase of cash from changes in operating assets and liabilities.

Current wording

Net cash used in operating activities was $13.4 million for the six months ended June 30, 2026 due to a net loss of $32.5 million, a non-cash gain of $3.9 million related to change in fair value of warrant liabilities, and $4.1 million in amortization of debt premium. This was partially offset by non-cash activities of $11.2 million in depreciation and amortization expense, $2.0 million in stock-based compensation expense, net of amounts capitalized, $0.3 million in amortization of debt issuance costs, and $13.1 million net increase of cash from changes in operating assets and liabilities.

Previous wording

Net cash used in operating activities was $9.6 million for the three months ended March 31, 2025 due to a net loss of $37.7 million. This was partially offset by non-cash activities of $15.3 million in paid-in-kind interest, a non-cash loss of $3.5 million related to change in fair value of warrant liabilities, $5.0 million in depreciation expense, $0.9 million in amortization expense, and $2.1 million in amortization of debt issuance costs.

Current wording

Net cash used in operating activities was $18.3 million for the six months ended June 30, 2025 due to a net loss of $59.3 million. This was partially offset by non-cash activities of $15.3 million in paid-in-kind interest, a non-cash loss of $5.0 million related to change in fair value of warrant liability, $10.0 million in depreciation expense, $2.9 million in stock-based compensation expense, net of amounts capitalized, $1.8 million in amortization expense, and $2.1 million in amortization of debt issuance costs.

Previous wording

Net cash used in investing activities was $1.1 million for the three months ended March 31, 2026, due primarily to purchases of construction materials and services, equipment, and other items for the Washington and Texas facilities.

Current wording

Net cash used in investing activities was $2.2 million for the six months ended June 30, 2026, due primarily to purchases of construction materials and services, equipment, and other items for the Washington and Texas facilities.

Previous wording

Net cash used in investing activities was $5.0 million for the three months ended March 31, 2025, due primarily to purchases of construction materials and services, equipment, and other items for the Washington and Texas facilities.

Current wording

Net cash used in investing activities was $10.9 million for the six months ended June 30, 2025, due primarily to purchases of construction materials and services, equipment, and other items for the Washington and Texas facilities.

Previous wording

Net cash provided by financing activities was $15.2 million for the three months ended March 31, 2026, primarily driven by $14.9 million of proceeds from the issuance of the U.S. Bounti, LLC convertible note.

Current wording

Net cash provided by financing activities was $15.0 million for the six months ended June 30, 2026, primarily driven by $14.9 million of proceeds from the issuance of the U.S. Bounti, LLC convertible note.

Previous wording

Net cash provided by financing activities was $35.5 million for the three months ended March 31, 2025, comprised of $21.5 million of proceeds from the issuance of Series A Preferred Stock and $10.5 million of proceeds from the issuance of debt.

Current wording

Net cash provided by financing activities was $34.9 million for the six months ended June 30, 2025, comprised of $21.4 million of proceeds from the issuance of Series A Preferred Stock, $10.5 million of proceeds from the issuance of debt, and $3.5 million from the issuance of common stock.