Local Bounti Corporation/DE

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, bok choy, 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, herbs, 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

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 reconfiguration and expect to begin commercial production in this section starting in second quarter of 2025. The automated harvesting equipment for the configuration is expected to be installed early third quarter 2025, replacing the temporary harvester it will use during second quarter, and is expected to drive operational efficiencies and margin improvement.

Current wording

As previously reported, we reconfigured three acres of the Texas 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. The retrofit was completed in late July, and the facility is now operating at full harvestable capacity in early August. The automated harvesting equipment installation is now complete and operational, replacing the temporary harvester used during the second quarter, and is expected to begin driving anticipated operational efficiencies and margin improvements in late third quarter.

Previous wording

We have also evolved our Grab-and-Go Salad Kit offerings to better serve retail partners and consumer trends. This includes the launch of new salad kits in Q1 2025, with additional flavors expected to be introduced in Q3, as well as the creation of a new product line that meets the needs of today's value-oriented consumer. We are particularly excited about our upcoming exclusive launch of a new larger, approximately 12-ounce family-sized Caesar salad kit with a large multi-national retailer in the Pacific Northwest beginning in the third quarter. In addition, we continue to expand our relationship with a leading meal subscription business that is now seeking additional SKUs.

Current wording

Building on the momentum achieved in the first quarter, we successfully launched our salad kit line in April 2025, expanding our grab-and-go product offerings to better serve retail partners and consumer trends. We continue to develop new pack sizes to deliver value to consumers and expect to launch a new, larger, family-sized Caesar salad kit with a large multi-national retailer in the Pacific Northwest early in the fourth quarter. We are also expanding our relationship with a leading home delivery service partner, launching four new private label salad kits in mid-September, bringing our total offerings with the customer to six.

Previous wording

Our relationship with Walmart continues to strengthen, building on the 191 stores already being served with premium baby leaf varieties. We have secured an additional commitment to serve 13 Walmart distribution centers with Conventional Living Butter Lettuce, with shipments having commenced in late April from both the California and Texas facilities.

Current wording

Our relationship with Walmart continues to grow, building on the 191 stores already being supplied with premium baby leaf varieties. We have also secured an expanded commitment to serve 13 Walmart distribution centers with Conventional Living Butter Lettuce, with shipments having commenced in late April from both our California and Texas facilities.

Previous wording

Sales increased by $3.2 million for the three months ended March 31, 2025, compared to the three months ended March 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.

Current wording

Sales increased by $2.7 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 and sales increased by $5.9 million for the six months ended June 30, 2025, compared to the six months ended June 30, 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 $2.5 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, 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 $2.5 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 and increased by $5.1 million for the six months ended June 30, 2025, compared to the six months ended June 30, 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 costs increased by $3.5 million for the three months ended March 31, 2025, compared to the three months ended March 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 and Texas facilities.

Current wording

Research and development costs increased by $2.0 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 and increased by $5.5 million for the six months ended June 30, 2025, compared to the six months ended June 30, 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 and Texas facilities.

Previous wording

Sales and marketing costs increased by $0.3 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase is driven primarily by an increase 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 $0.3 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The increase is driven primarily by an increase of $0.2 million in salaries, commissions, benefits, and payroll-related expenses and 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.

Previous wording

General, and administrative expenses increased by $2.3 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily driven by a $1.4 million increase in stock-based compensation that was a result of prior year stock-based compensation that resulted in a net benefit for the three months ended March 31, 2024 due to forfeitures of RSU awards. Additional increases as compared to the prior year period were a $0.3 million increase in salaries, benefits, and payroll-related expenses, and a $0.5 million increase in insurance.

Current wording

General, and administrative expenses increased by $1.7 million for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily driven by a $1.7 million increase in stock-based compensation, a $0.5 million increase in depreciation and amortization, and a $0.6 million increase in insurance. This increase was offset by a decrease of $0.1 million in salaries, benefits, and payroll-related expenses, a decrease of $0.7 million in professional fees, and a decrease of $0.2 million in property tax.

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 Debt Restructuring Agreement, which amended the Original Warrants by decreasing the per share exercise price of the Original Warrants from $6.50 to $4.00 per share with an amended expiration date of March 31, 2033. This change in terms increased the value of the warrants and the related liability.

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 increase in fair value of the warrant liability is primarily due to the Eleventh Amendment, which amended the Original Warrants by decreasing the per share exercise price of the Original Warrants from $6.50 to $4.00 per share with an amended expiration date of March 31, 2033. This change in terms increased the value of the warrants and the related liability for the six months ended June 30, 2025. Additional increase in the value of the warrants for the three months ended June 30, 2025 is primarily due to a net increase in our closing stock price at June 30, 2025 compared to the closing stock price on the prior measurement date of March 31, 2025. 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 $9.2 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The increase is primarily due to a significant increase in the principal amount outstanding on the Senior Facility, which increased interest expense by $3.4 million over the prior year period. Also contributing to the net increase was a decrease in capitalized interest of $5.6 million during the three months ended March 31, 2025 as compared to the prior year due to interest capitalized during the construction of the Washington and Texas facilities in the prior year period. During the three months ended March 31, 2025 and 2024, we capitalized $0.1 million and $5.7 million of interest, respectively.

Current wording

Interest expense, net decreased by $7.9 million for the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The decrease is primarily due to a decrease in the principal amount outstanding on the Senior Facility as a result of the Eleventh Amendment, which decreased interest expense by $10.6 million over the prior year period. Also contributing to the net decrease was an increase in amortization of debt premium of $1.7 million as a result of the Eleventh Amendment during the three months ended June 30, 2025 as compared to the same prior year period. This decrease was offset by a decrease of $4.4 million in interest capitalized during the construction of the Washington and Texas facilities in the prior year period. No interest was capitalized during the three months ended June 30, 2025. We capitalized $4.4 million of interest during the three months ended June 30, 2024.

Previous wording

We have incurred losses and generated negative cash flows from operations since our inception. At March 31, 2025, we had an accumulated deficit of $460.9 million and cash and cash equivalents and restricted cash of $28.4 million.

Current wording

We have incurred losses and generated negative cash flows from operations since our inception. At June 30, 2025, we had an accumulated deficit of $482.5 million and cash and cash equivalents and restricted cash of $13.2 million.

Previous wording

As of March 31, 2025, a total of $312.0 million of principal was outstanding on the Senior Facility. The Senior Facility is included in "Long-term debt" on the Unaudited Condensed Consolidated Balance Sheets. We expect our interest expense to decrease by at least 50% following the Eleventh Amendment to our Senior Facility with Cargill Financial, as described in Note 6, Debt, to the Unaudited Condensed Consolidated Financial Statements. The amendment 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 wording

As of June 30, 2025, a total of $312.0 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 6, 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.

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 liability, $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 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 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 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 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 $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 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.

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

comprised of $70.2 million of net proceeds from the issuance of debt.