Local Bounti CorporationDE

Previous wording

Plans remain underway to build additional capacity across our network of facilities enabled with our Stack & Flow Technology®. The locations and degree of expansion will be announced at a future date, but construction is currently anticipated to begin late in the second quarter of 2024, subject to the closing of the CCLs from a commercial finance lender discussed in the Liquidity and Capital Resources section of this Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 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 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.

Current wording

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Previous wording

Our mission is to bring our farm to your kitchen. Our vision is to deliver the freshest, locally grown produce over the fewest food miles. We believe that happy plants make happy taste buds and we are committed to reimagining the standards of freshness. We also believe that local is the best kind of business, and we are committed to helping communities thrive for generations to come. We are committed to building empowered local teams.

Current wording

Our mission is to revolutionize agriculture, ensuring accessibility to fresh, sustainable, locally grown produce to nourish communities everywhere for generations to come. Our vision is to reimagine freshness. We envision a future where transformative innovation and technology combine to enable us to locally grow produce with minimal food miles, ensuring the freshest and most sustainable offerings for communities everywhere. We believe that happy plants make happy taste buds, and we are committed to reimagining the standards of freshness. We also believe that local is the best kind of business, and we are committed to helping communities thrive for generations to come. We are committed to building empowered local teams. Together, we are capable of extraordinary achievements in sustainable agriculture.

Previous wording

Local Bounti is a controlled environment agriculture ("CEA") company that produces sustainably grown produce, focused today on living 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, 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, consistent, and delicious 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 today on living 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 full commercial operation by the second half of 2020. In 2021, we successfully completed the expansion of our Montana Facility, more than doubling our production capacity. The Montana Facility is currently used for commercial production, as well as research-and-development activities. 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 Texas and Washington, bringing our total facility count to six.

Current 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 2021, we successfully completed the expansion of our Montana Facility, more than doubling our production capacity. The Montana Facility is currently used for commercial production, as well as research-and-development activities. 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.

Previous wording

We distribute our products to over 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, 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 are currently expanding distribution of our Grab & Go Salad Kits and are set to expand our baby leaf portfolio by introducing several high-velocity offerings including spinach, arugula, 50/50 blend and power greens by the third quarter of 2024. In October 2022, we signed an offtake agreement with Sam's Club for our leafy greens production initially starting at our greenhouse facility in Georgia. The offtake agreement provides for the sale of defined minimum quantities of leafy greens from certain 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 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 are currently expanding distribution of our Grab & Go Salad Kits and have expanded our baby leaf portfolio by introducing several high-velocity offerings in the second quarter of 2024, including spinach, arugula, and basil. In addition, we are set to introduce 50/50 blend and power greens by 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.

Previous wording

Commissioning at Mount Pleasant, TX and Pasco, WA Facilities; Shipping First Product to Customers

Current wording

Now Shipping Product from Mount Pleasant, TX & Pasco, WA Facilities

Previous wording

Hamilton, Montana Facility to Transition from R&D to Commercial Production

Current wording

Hamilton, Montana Facility Transition to Commercial Production Nearly Complete

Previous wording

The transition of the Montana Facility from a research and development focus to a commercially oriented focus growing produce for sale to customers is on track for mid-year completion. This transition will follow the capacity enhancements brought about by the completion of the Georgia facility and the commencement of operations at both Texas and Washington and is expected to help drive us toward our goal of achieving positive adjusted EBITDA in early 2025.

Current wording

The transition of our Montana Facility from a research and development focus to a commercially oriented focus growing produce for sale to customers is nearly complete. This transition follows the capacity enhancements brought about by the completion of the Georgia facility and the commencement of operations at both the Texas and Washington facilities and is expected to help drive us toward our goals of achieving positive adjusted EBITDA in early 2025.

Previous wording

Starting in the second quarter of 2024, we expect to expand distribution of our Grab-and-Go Salad Kits to customers throughout the Pacific Northwest and Southern United States, which will include approximately 700 doors of incremental distribution to our current footprint and include four unique flavor offerings: Artisanal Chicken Caesar, Memphis Inspired Chicken, Sweet Poppy Power, and Modern Greek Style.

Current wording

Starting in the second quarter of 2024, we rolled out our Grab-and-Go Salad Kits to customers representing approximately 200 doors throughout the Pacific Northwest and Southern United States; we expect this to expand to a total of approximately 700 doors in the second half of 2024. These product expansions include four unique flavor offerings: Artisanal Chicken Caesar, Memphis Inspired Chicken, Sweet Poppy Power, and Modern Greek Style.

Previous wording

We are set to expand our baby leaf assortment in the third quarter of 2024 by introducing several high-velocity offerings including Arugula, Baby Spinach & Spring Mix Blend, and Power Greens. While we are still scaling up these products, we are pleased to have delivered our first shipment of Spinach to customers in March of 2024 out of the Georgia facility.

Current wording

We are set to expand our product assortment in the third quarter of 2024 by introducing several high-velocity offerings including Arugula, Spring Mix & Spinach Blend, Power Greens, and Basil.

Previous wording

•standardize operating and manufacturing processes across our facilities;

Current wording

•standardize operating and manufacturing processes across our facilities including increased expenses associated with growing operations;

Previous wording

We derive our revenue from the sale of produce grown at our facilities. Sales increased by $1.7 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase was primarily due to increased production and growth in sales from our facility in Georgia.

Current wording

Sales increased by $2.3 million for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase was due to increased production and growth in sales from our facility in Georgia and, to a lesser extent, sales from our newly opened facilities in Texas and Washington.

Previous wording

Cost of goods sold increased by $1.2 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, due primarily to increased production and sales of $1.7 million.

Current wording

Cost of goods sold increased by $1.8 million for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, due primarily to increased production and increased sales of $2.3 million.

Previous wording

Research and development expenses consist primarily of costs related to research and development of our production, harvesting, and post-harvest packaging methods, techniques, and processes, as well as production surplus costs related to the development and testing of our production processes. Our research and development efforts are focused on the development of our processes utilizing our facilities, increasing production yields, developing new leafy green SKUs and value-added products such as grab-and-go salads, and exploring new crops, including spinach, arugula, and berries. We expect that as our facilities continue to scale that research and development expenses will decrease significantly in 2024 and beyond as a result of the establishment of our growing process. Research and development is performed at the Montana and Georgia facilities, where we continue to develop our commercial scale Stack & Flow Technology® and processes for implementation at our other facilities. We expect to transition in 2024 the majority of our Montana Facility from its current focus on research and development to a commercially oriented facility that is growing produce for sale to customers. This transition will follow the capacity enhancements brought about by the completion of our Georgia facility and the commencement of operations at both the Texas and Washington facilities and is expected to help drive us toward our goal of achieving positive adjusted EBITDA in early 2025.

Current wording

Research and development expenses consist primarily of costs related to the continued development of our production, harvesting, and post-harvest packaging methods, techniques, and processes, as well as production surplus costs related to the development and testing of our production processes during the post-commissioning phase at our new facilities. Our research and development efforts are focused on the development of our processes utilizing our facilities, increasing production yields, developing new leafy green SKUs and value-added products such as grab-and-go salads, and exploring new crops, including spinach, arugula, and berries. Research and development is performed at the Montana, Texas, Washington, and Georgia facilities, where we continue to develop our commercial scale Stack & Flow Technology® and processes for implementation throughout our facility footprint.

Previous wording

Research and development costs decreased by $0.1 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. As explained above, as the Georgia facility has been completed and operations have commenced at both the Texas and Washington facilities, there has been a resulting decrease of investment in personnel, materials, supplies, and facility capacity devoted to research and development. However, we continue to incur costs for the 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 Georgia facility.

Current wording

Research and development costs increased by $1.0 million for the three months ended June 30, 2024, compared to the three months ended June 30, 2023 and increased by $0.9 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. As explained above, as the Georgia facility expansion has been completed and operations have commenced at both the Texas and Washington facilities, there has been a resulting decrease of investment in personnel, materials, supplies, and facility capacity devoted to research and development.

Previous wording

Selling, general, and administrative expenses decreased by $8.4 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily related to a $6.2 million decrease in stock-based compensation expense that was a result of prior year awards that were issued at a higher fair value, as compared to the fair value of awards being expensed in the current period, that fully vested and expensed in the prior quarter. In addition, stock-based compensation resulted in a net benefit for the three months ended March 31, 2024 due to forfeitures of RSU awards in the current period that were granted at significantly higher grant-date fair values than the RSU awards currently being expensed. Additional decreases as compared to the prior year period were a $1.2 million decrease in legal, accounting, and professional consulting fees, and a $0.7 million decrease in depreciation and amortization.

Current wording

Selling, general, and administrative expenses decreased by $14.4 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily related to a $8.5 million decrease in stock-based compensation expense that was a result of prior year awards that were issued at a higher fair value, as compared to the fair value of awards being expensed in the current period, that fully vested and expensed in the prior quarter. Additional decreases as compared to the prior year period were a $2.6 million decrease in legal, accounting, and professional consulting fees, a $1.7 million decrease in salaries, benefits, and payroll related fees, a $0.4 million decrease in transaction costs, and a $0.4 million decrease in marketing and advertising costs.

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 increase in fair value of the warrant liability is primarily due to the increase in our closing stock price at March 31, 2024 compared to the closing stock price on the prior measurement date of 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 warrant liability to reflect its fair value as of the end of the reporting period. The decrease in the fair value of warrant liability for the three months ended June 30, 2024 is primarily due to the decrease in our closing stock price at June 30, 2024 compared to the closing stock price on the prior measurement date of March 31, 2024. The increase in fair value of the warrant liability for the six months ended June 30, 2024 is primarily due to a net increase in our closing stock price at June 30, 2024 compared to the closing stock price on the prior measurement date of 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.

Previous wording

Interest expense, net increased by $5.3 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023. The increase is primarily due to an increase in the principal amount outstanding on the Senior Facility, and, to a lesser extent, a variable rate increase on the Senior Facility period over period, both of which increased interest expense by $4.4 million over the prior year period. Also contributing to the net increase was $0.9 million of incremental interest expense for the financing obligations related to the California Facilities. During the three months ended March 31, 2024 and 2023, we capitalized $5.7 million and $2.1 million of interest, respectively.

Current wording

Interest expense, net increased by $6.0 million for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase is primarily due to an increase in the principal amount outstanding on the Senior Facility, and, to a lesser extent, a variable rate increase on the Senior Facility period over period, both of which increased interest expense by $5.7 million over the prior year period. Also contributing to the net increase was $0.3 million of incremental interest expense for the financing obligations related to the California Facilities. During the three months ended June 30, 2024 and 2023, we capitalized $4.4 million and $3.2 million of interest, respectively.

Previous wording

We have incurred losses and generated negative cash flows from operations since our inception. At March 31, 2024, we had an accumulated deficit of $327.4 million and cash and cash equivalents and restricted cash of $14.7 million.

Current wording

We have incurred losses and generated negative cash flows from operations since our inception. At June 30, 2024, we had an accumulated deficit of $352.6 million and cash and cash equivalents and restricted cash of $16.2 million.

Previous wording

The Facilities 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

The credit facilities 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. We are currently in compliance with the financial covenants under the credit facilities, but in the past, we have periodically failed to meet certain quarterly financial covenants. While we were able to obtain permanent waivers for all past covenant violations, there can be no assurances that we will be able to obtain waivers for any future covenant compliance failures. 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 Ninth Amendment to the credit facilities with Cargill Financial, as described in Note 6, Debt, of the Unaudited Condensed Consolidated Financial Statements, allows for the payment in kind of the quarterly interest payments due and payable for the quarters ending June 30, 2024, September 30, 2024, and December 31, 2024. The Ninth Amendment also provides for up to $15.0 million in working capital for the Company, $5.0 million of which has been drawn down, and the remaining $10.0 million of which remains available to the Company as of March 31, 2024. In addition, the Company expects to close in the second quarter of 2024 on the four previously disclosed CCLs from a commercial finance lender that were executed in the second half of 2023. Together, the CCLs will provide financing of approximately $228 million to fund its 2024 facility expansions, its new greenfield facility in the Midwest, and to repay certain existing construction financing which will lower the Company’s cost of capital. The funding expected pursuant to the CCLs is subject to the completion of definitive documents and the satisfaction of customary closing conditions.

Current wording

The Ninth Amendment to the credit facilities with Cargill Financial, as described in Note 6, Debt, of the Unaudited Condensed Consolidated Financial Statements, allows for the payment in kind of the quarterly interest payments due and payable for the quarters ending June 30, 2024, September 30, 2024, and December 31, 2024. In addition, the Company expects to close in the third quarter of 2024 on the four previously disclosed CCLs from a commercial finance lender that were executed in the second half of 2023. Together, the CCLs will provide financing of approximately $228 million. In addition, in July 2024, we entered into negotiations for an additional CCL for up to $175 million of potential financing with the same commercial finance lender. Combined with the existing $228 million of previously announced CCLs, we will have CCLs that could provide up to approximately $400 million of financing to fund our existing facility expansions, our planned greenfield facility in the Midwest, working capital needs, strategic growth capital and to repay certain existing construction financing which is expected to lower our cost of capital. The funding expected pursuant to the CCLs is subject to the completion of definitive documents and the satisfaction of customary closing conditions which we believe will be complete in the third quarter of 2024. We have also entered into a non-binding letter of intent for a $55 million sale-lease back of our facility in Byron, GA, subject to the completion of customary diligence and binding documentation.

Previous wording

The Company believes that the remaining $10.0 million of working capital from Cargill Financial, the $228 million from a commercial finance lender, the Company's current cash position, cash generated from product sales, and anticipated additional deferrals of future cash interest and principal payments under the Company's credit facilities with Cargill Financial will be adequate to fund the Company’s planned operations over the next 12 months from the issuance of these Unaudited Condensed Consolidated Financial Statements.

Current wording

The Company believes that financing associated with the CCLs from a commercial finance lender, the Company's current cash position, cash generated from product sales, and anticipated additional deferrals of future cash interest and principal payments under the Company's credit facilities with Cargill Financial will be adequate to fund the Company’s planned operations over the next 12 months from the issuance of these Unaudited Condensed Consolidated Financial Statements.

Previous wording

In September 2021, the Company and Cargill Financial entered into the Senior Facility and the Subordinated Facility. Subsequent to the amendments described in Note 6, Debt, of the Unaudited Condensed Consolidated Financial Statements, Cargill Financial may in its discretion provide advances under the Facilities of up to $343.5 million (plus paid-in-kind interest and fees), including capital to fund construction at the Company’s facilities in Georgia, Texas, and Washington, subject to certain conditions. As of March 31, 2024, a total of $317.6 million and $49.7 million was outstanding on the Senior Facility and the Subordinated Facility, respectively. The Senior Facility and the Subordinated Facility are included in "Long-term debt" on the Unaudited Condensed Consolidated Balance Sheets.

Current wording

In September 2021, the Company and Cargill Financial entered into the Senior Facility and the Subordinated Facility. Subsequent to the amendments described in Note 6, Debt, of the Unaudited Condensed Consolidated Financial Statements, Cargill Financial may in its discretion provide advances under the Facilities of up to $343.5 million (plus paid-in-kind interest and fees), including capital to fund construction at the Company’s facilities in Georgia, Texas, and Washington, subject to certain conditions. As of June 30, 2024, a total of $358.1 million and $51.2 million (including paid-in-kind interest and fees) was outstanding on the Senior Facility and the Subordinated Facility, respectively. Also, the credit facilities, as amended, require quarterly principal and interest payments beginning April 1, 2025, which is reflected in the table below, and the funding of a debt service reserve on April 1, 2025 equal to two quarters of principal and interest payments. The Senior Facility and the Subordinated Facility are included in "Short-term debt" and "Long-term debt" on the Unaudited Condensed Consolidated Balance Sheets.

Previous wording

(1)Interest is calculated based on a 12.5% interest rate for the Subordinated Facility and a 13.81% interest rate for the Senior Facility effective as of April 1, 2024.

Current wording

(1)Interest is calculated based on a 12.5% interest rate for the Subordinated Facility and a 13.83% interest rate for the Senior Facility effective as of April 1, 2024.

Previous wording

We have two financing obligations related to sale leaseback transactions that did not qualify for sales treatment of the underlying assets. In June 2020, the Company completed the construction of the Montana Facility. Subsequent to its completion, the Company entered into a sale leaseback transaction of the Montana Facility with Grow Bitterroot, LLC, a related party, for total consideration of $6.9 million with an initial term of 15 years. On April 27, 2023, Hollandia Real Estate, LLC, a wholly owned subsidiary of the Company, and STORE Master Funding XXXI, LLC consummated a $35 million multi-site sale and leaseback transaction relating to our Carpinteria Facility and our Oxnard Facility (collectively, the "California Facilities").

Current wording

We have two financing obligations related to sale leaseback transactions that did not qualify for sales treatment of the underlying assets. In June 2020, the Company completed the construction of the Montana Facility. Subsequent to its completion, the Company entered into a sale leaseback transaction of the Montana Facility with Grow Bitterroot, LLC, a related party, for total consideration of $6.9 million with a current lease term of 20 years. On April 27, 2023, Hollandia Real Estate, LLC, a wholly owned subsidiary of the Company, and STORE Master Funding XXXI, LLC consummated a $35 million multi-site sale and leaseback transaction with an initial term of 25 years relating to our Carpinteria Facility and our Oxnard Facility (collectively, the "California Facilities").

Previous wording

Net cash used in operating activities was $7.1 million for the three months ended March 31, 2024 due to a net loss of $24.1 million and an increase in other assets of $2.9 million. This was partially offset by non-cash activities of $9.8 million in paid-in-kind interest, a non-cash loss of $4.2 million related to change in fair value of warrant liability, $2.3 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 $11.1 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023 due to a net loss of $49.3 million. This was partially offset by non-cash activities of $21.7 million in paid-in-kind interest, $5.3 million in depreciation expense, $4.2 million in amortization of debt issuance costs, a non-cash loss of $3.1 million related to change in fair value of warrant liability, $1.8 million in amortization expense, and $0.9 million net increase of cash from changes in assets and liabilities.

Previous wording

Net cash used in operating activities was $7.8 million for the three months ended March 31, 2023 due to a net loss of $23.5 million. This was partially offset by non-cash activities of $6.0 million in stock-based compensation expense, net of amounts capitalized, $1.8 million in depreciation expense, and $1.7 million in amortization expense. Additional offset was due to $5.2 million net increase of cash from changes in assets and liabilities.

Current wording

Net cash used in operating activities was $16.1 million for the six months ended June 30, 2023 due to a net loss of $34.2 million. The net loss included a non-cash gain in fair value of warrant liability of $15.2 million. These amounts were partially offset by non-cash activities of $10.4 million in stock-based compensation expense, net of amounts capitalized, $9.3 million of paid-in-kind interest, $3.4 million in depreciation expense, $3.4 million in amortization expense, $3.1 million in amortization of debt issuance costs, and $3.1 million net increase of cash from changes in assets and liabilities.

Previous wording

Net cash used in investing activities was $32.7 million for the three months ended March 31, 2023, due primarily to purchases of construction materials and services, equipment, and other items for the Washington, Georgia, and Texas facilities.

Current wording

Net cash used in investing activities was $59.8 million for the six months ended June 30, 2024, due primarily to purchases of construction materials and services, equipment, and other items for the Washington, Texas, and Georgia facilities.

Previous wording

Net cash used in investing activities was $35.0 million for the three months ended March 31, 2024, 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 $76.2 million for the six months ended June 30, 2023, due primarily to purchases of equipment and other items for the Washington, Georgia, and Texas facilities.

Previous wording

Net cash provided by financing activities was $39.9 million for the three months ended March 31, 2024, comprised of $39.9 million of net proceeds from the issuance of debt.

Current wording

Net cash provided by financing activities was $70.2 million for the six months ended June 30, 2024, comprised of $70.2 million of net proceeds from the issuance of debt.

Previous wording

Net cash provided by financing activities was $23.0 million for the three months ended March 31, 2023, comprised of $23.0 million of net proceeds from the issuance of debt.

Current wording

Net cash provided by financing activities was $107.8 million for the six months ended June 30, 2023, comprised of $73.0 million of proceeds from the issuance of debt and $35.0 million of proceeds from the sale and leaseback transaction with STORE for the Hollandia Facilities.