locl-20250630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Commission File Number						001-40125

LOCAL BOUNTI CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

83-3686055

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S Employer Identification No.)

490 Foley Lane

Hamilton,

59840

(Address of Principal Executive Offices, Including Zip Code)


			(800)			640-4016


(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value of $0.0001 per share

LOCL

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Act). Yes ☐ No ☒

The number of outstanding shares of Local Bounti Corporation’s common stock was 22,123,010 at August 11, 2025.

TABLE OF CONTENTS


			Page
Part I – FINANCIAL INFORMATION			5

Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets at June 30, 2025 and December 31, 2024			5
Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024			6
Unaudited Condensed Consolidated Statements of Stockholders' Deficit for the Three and Six Months Ended June 30, 2025 and 2024			7
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024			8
Notes to Unaudited Condensed Consolidated Financial Statements			10

Item 2. Management 's Discussion and Analysis of Financial Condition and Results of Operations			19

Item 3. Quantitative and Qualitative Disclosures About Market Risk			26

Item 4. Controls and Procedures			27

Part II – OTHER INFORMATION			28

Item 1. Legal Proceedings			28

Item 1A. Risk Factors			28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28

Item 5. Other Information			29

Item 6. Exhibits			29

SIGNATURES			32

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and the information incorporated herein by reference contain certain statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify these forward-looking statements by the use of terms such as "expect," "anticipate," "believe," "continue," "estimate," "intend," "may," "plan," "project," "forecast," "seek," "should," "target," "will," or similar expressions, and variations or negatives of these words, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, without limitation, statements regarding our ability to raise capital in the future, future financial performance, business strategies including future acquisitions, expansion plans including construction of future facilities, future results of operations, estimated revenues, losses, projected costs, prospects, plans and objectives of management. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from results expressed or implied in this Quarterly Report on Form 10-Q. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements:

•Local Bounti’s ability to continue as a going concern and the risk that Local Bounti will fail to obtain additional necessary capital when needed on acceptable terms or at all;

•Local Bounti's ability to generate significant revenue;

•restrictions and covenants contained in Local Bounti's debt facility agreements with Cargill Financial Services International, Inc. ("Cargill Financial") and Local Bounti's ability to comply therewith;

•the risk that the concentrated ownership of our common stock will prevent other stockholders from influencing significant decisions;

•the risk that Local Bounti may never achieve or sustain profitability;

•the risk that Local Bounti could fail to effectively manage its future growth;

•Local Bounti's ability to complete the build out of its current or additional facilities in the future;

•Local Bounti's reliance on third parties for construction, the risk of delays relating to material delivery and supply chains, and fluctuating material prices;

•Local Bounti's ability to scale its operations and decrease its cost of goods sold over time;

•the potential for damage to or problems with Local Bounti's facilities;

•the impact that current or future acquisitions, investments or expansions of scope of existing relationships have on Local Bounti's business, financial condition, and results of operations;

•unknown liabilities that may be assumed in acquisitions;

•Local Bounti's ability to attract and retain qualified employees;

•Local Bounti's ability to develop and maintain its brand or brands;

•Local Bounti's ability to achieve its sustainability goals;

•Local Bounti's ability to maintain its company culture or focus on its vision as it grows;

•Local Bounti's ability to execute on its growth strategy;

•the risk of diseases and pests destroying crops;

•Local Bounti's ability to compete successfully in the highly competitive markets in which it operates;

•Local Bounti's ability to defend itself against intellectual property infringement claims or other litigation;

•Local Bounti's ability to effectively integrate the acquired operations of any CEA or similar operations which it acquires into its existing operations;

•changes in consumer preferences, perception, and spending habits in the food industry;

•the risk that seasonality may adversely impact Local Bounti's results of operations;

•Local Bounti's ability to repay, refinance, restructure, or extend its indebtedness as it comes due;

•Local Bounti's ability to comply with the continued listing requirements of the New York Stock Exchange ("NYSE") or timely cure any noncompliance thereof; and

•the other factors discussed in Item 1A, "Risk Factors" of the Company's most recent Annual Report on Form

10-K and any updates to those factors set forth in Local Bounti's subsequent Quarterly Reports on Form 10-Q

or Current Reports on Form 8-K.

The forward-looking statements contained herein are based on our current expectations and beliefs concerning future developments and their potential effects on our business. There can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward- looking statements. These risks and uncertainties include, but are not limited to, the Risk Factors identified in Part I, Item 1A of this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks and

uncertainties emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the effect of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements. The forward-looking statements made by us in this Quarterly Report on Form 10-Q speak only as of the date made. Local Bounti undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

WEBSITE AND SOCIAL MEDIA DISCLOSURE

Investors and others should note that we routinely announce material information to investors and the marketplace using filings with the SEC, press releases, public conference calls, presentations, webcasts, and our website. We also intend to use certain social media channels as a means of disclosing information about Local Bounti and our products to our customers, investors and the public (e.g., @Local Bounti and #LocalBounti on X). While not all of the information that we post to our website or social media accounts is of a material nature, some information could be deemed to be material. Accordingly, we encourage investors, the media, and others to sign up for and regularly follow our social media accounts. Users may automatically receive email alerts and other information about Local Bounti by signing up for email alerts under the Investors tab of our website.

ADDITIONAL INFORMATION

Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q to the "Company," "Local Bounti," "we," "us," "our" and similar terms refer to Local Bounti Corporation and its consolidated subsidiaries.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

LOCAL BOUNTI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	June 30,		December 31,
	2025		2024
Assets
Current assets
Cash and cash equivalents	$	5,286	$	937
Restricted cash	7,885		6,529
Accounts receivable, net	2,438		2,282
Inventory, net	7,028		6,814
Prepaid expenses and other current assets	2,310		2,261
Total current assets	24,947		18,823
Property and equipment, net	365,262		370,978
Finance lease right-of-use assets	246		277
Operating lease right-of-use assets	59		73
Intangible assets, net	35,999		37,783
Other assets	261		101
Total assets	$	426,774	$	428,035

Liabilities and stockholders' deficit
Current liabilities
Accounts payable	$	9,527	$	16,987
Accrued liabilities	9,673		18,082
Short-term debt	—		20,205
Financing obligation	69		51
Operating lease liabilities	31		30
Finance lease liabilities	81		81
Total current liabilities	19,381		55,436
Long-term debt
Principal amount	312,000		447,719
Plus: Debt premium, net of amortization	166,330		—
Less: Unamortized deferred financing costs	—		(31,142)
Long-term debt, net	478,330		416,577
Financing obligation, noncurrent	50,152		49,856
Operating lease liabilities, noncurrent	39		57
Finance lease liabilities, noncurrent	182		206
Warrant liability	11,412		6,403
Total liabilities	559,496		528,535

Commitments and contingencies (Note 12)



Stockholders' deficit
Common stock, $0.0001 par value, 400,000,000 shares authorized, 21,784,277 and 8,656,122 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively	2		1
Additional paid-in capital	349,758		322,729
Accumulated deficit	(482,482)		(423,230)
Total stockholders' deficit	(132,722)		(100,500)
Total liabilities and stockholders' deficit	$	426,774	$	428,035

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

LOCAL BOUNTI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Sales	$	12,103	$	9,443	$	23,708	$	17,826
Cost of goods sold(1)(2)	10,631		8,092		20,775		15,689
Gross profit	1,472		1,351		2,933		2,137
Operating expenses:
Research and development(1)(2)	6,485		4,519		13,462		8,006
Sales and marketing(1)(2)	2,392		2,096		4,506		3,881
General and administrative(1)(2)	8,045		8,600		16,149		14,413
Total operating expenses	16,922		15,215		34,117		26,300
Loss from operations	(15,450)		(13,864)		(31,184)		(24,163)
Other income (expense):
Change in fair value of warrant liability	(1,499)		1,096		(5,009)		(3,084)
Interest expense, net	(4,602)		(12,500)		(23,440)		(22,108)
Other (expense) income	(26)		1		381		38
Net loss	(21,577)		(25,267)		(59,252)		(49,317)
Less: Deemed dividend to preferred stockholders	—		—		403		—
Net loss attributable to common stockholders	$	(21,577)	$	(25,267)	$	(59,655)	$	(49,317)

Net loss applicable to common stockholders per basic common share:
Basic and diluted	$	(1.63)	$	(3.00)	$	(5.40)	$	(5.89)
Weighted average common shares outstanding:
Basic and diluted	13,270,197		8,411,226		11,051,720		8,368,596

(1) Amounts include stock-based compensation as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Cost of goods sold	$	75	$	39	$	86	$	60
Research and development	145		71		161		164
Sales and marketing	245		75		282		(125)
General and administrative	1,795		1,463		2,321		615
Total stock-based compensation expense, net of amounts capitalized	$	2,260	$	1,648	$	2,850	$	714

(2) Amounts include depreciation and amortization as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Cost of goods sold	$	2,050	$	1,352	$	3,963	$	2,555
Research and development	2,529		1,382		5,215		2,179

General and administrative	1,277		1,155		2,558		2,383
Total depreciation and amortization	$	5,856	$	3,889	$	11,736	$	7,117

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

LOCAL BOUNTI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 and 2024

(in thousands, except share data)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Deficit
	Shares	Amount
Balance, December 31, 2024	8,656,122	$	1	$	322,729	$	(423,230)	$	(100,500)
Issuance of common stock for PIPE Investment, net of issuance costs	1,771,586	—		3,477		—		3,477
Deemed dividend to Series A Preferred Stock	—	—		(403)		—		(403)
Vesting of restricted stock units, net	215,260	—		—		—		—
Stock-based compensation	—	—		647		—		647
Net loss	—	—		—		(37,675)		(37,675)
Balance, March 31, 2025	10,642,968	1		326,450		(460,905)		(134,454)
Conversion of Series A Preferred Stock to common stock	10,728,414	1		21,407		—		21,408
Vesting of restricted stock units, net and payment of minimum employee taxes withheld upon net share settlement of restricted stock units	412,895	—		(536)		—		(536)
Stock-based compensation	—	—		2,437		—		2,437
Net loss	—	—		—		(21,577)		(21,577)
Balance, June 30, 2025	21,784,277	$	2	$	349,758	$	(482,482)	$	(132,722)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity (Deficit)
	Shares	Amount
Balance, December 31, 2023	8,311,237	$	1	$	318,600	$	(303,328)	$	15,273
Vesting of restricted stock units, net	126,305	—		—		—		—
Stock-based compensation	—	—		(670)		—		(670)
Net loss	—	—		—		(24,050)		(24,050)
Balance, March 31, 2024	8,437,542	$	1	$	317,930	$	(327,378)	$	(9,447)
Vesting of restricted stock units, net	136,707	—		—		—		—
Stock-based compensation	—	—		1,875		—		1,875
Net loss	—	—		—		(25,267)		(25,267)
Balance, June 30, 2024	8,574,249	$	1	$	319,805	$	(352,645)	$	(32,839)

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

LOCAL BOUNTI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Six Months Ended June 30,
	2025		2024
Operating Activities:
Net loss	$	(59,252)	$	(49,317)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	9,951		5,332
Amortization of intangible assets	1,785		1,785
Stock-based compensation expense, net of amounts capitalized	2,850		714
Allowance for expected credit losses	(18)		(31)
Inventory allowance	(384)		212
Loss on disposal of property and equipment	14		42
Change in fair value of warrant liability	5,009		3,084
Paid-in-kind interest expense	15,293		21,652
Amortization of debt premium	(1,717)		—
Amortization of debt issuance costs	2,100		4,200
Interest expense on financing obligation	314		363
Changes in operating assets and liabilities:
Accounts receivable	(138)		608
Inventory	170		(1,476)
Prepaid expenses and other current assets	(49)		186
Other assets	(160)		(2,986)
Accounts payable	(1,027)		1,514
Operating lease liabilities	(3)		(21)
Finance lease liabilities	31		6
Accrued liabilities	6,961		3,049
Net cash used in operating activities	(18,270)		(11,084)

Investing Activities:
Purchases of property and equipment	(10,884)		(59,824)
Net cash used in investing activities	(10,884)		(59,824)

Financing Activities:

Proceeds from issuance of Series A preferred stock, net of issuance costs	21,408		—
Proceeds from issuance of common stock, net of issuance costs	3,543		—
Proceeds from issuance of debt	10,468		70,191
Payment of minimum employee taxes withheld upon net share settlement of restricted stock units	(536)		—
Principal payment on finance lease liabilities	(24)		(4)
Net cash provided by financing activities	34,859		70,187
Net change in cash and cash equivalents and restricted cash	5,705		(721)
Cash and cash equivalents and restricted cash at beginning of period	7,466		16,895
Cash and cash equivalents and restricted cash at end of period	$	13,171	$	16,174

Reconciliation of cash, cash equivalents, and restricted cash from the Unaudited Condensed Consolidated Balance Sheets to the Unaudited Condensed Consolidated Statements of Cash Flows


Cash and cash equivalents	$	5,286	$	9,685
Restricted cash	7,885		6,489
Total cash and cash equivalents and restricted cash as shown in the Unaudited Condensed Consolidated Statements of Cash Flows	$	13,171	$	16,174


Non-cash investing and financing activities:
Conversion of Series A Preferred Stock to common stock	$	21,408	$	—
Accrued interest capitalized to debt	$	15,293	$	—
Purchases of property and equipment included in accounts payable and accrued liabilities	$	658	$	(153)
Transaction costs recorded to Preferred Stock included in accounts payable	$	469	$	—
Stock-based compensation capitalized to property and equipment, net	$	234	$	491
Deemed dividend to preferred stockholders	$	403	$	—
Interest capitalized to property and equipment, net	$	—	$	10,108

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

LOCAL BOUNTI CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Business Description

Description of the Business

Local Bounti Corporation ("Local Bounti" or the "Company") was founded in August 2018 and is headquartered in Hamilton, Montana. The Company produces sustainably grown produce, focused primarily on grown living lettuce, herbs, salad kits, and loose leaf lettuce. The Company is a controlled environment agriculture ("CEA") company that utilizes patented Stack & Flow Technology®, which is a hybrid of vertical and hydroponic greenhouse farming, to grow healthy food sustainably and affordably. Through the Company's CEA process, its goal is to produce environmentally sustainable products in a manner that will increase harvest efficiency, limit water usage, and reduce the carbon footprint of the production and distribution process.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the statements herein.

The Unaudited Condensed Consolidated Financial Statements do not include all of the disclosures required by GAAP for annual financial statements and should be read in conjunction with the audited Consolidated Financial Statements of the Company for the year ended December 31, 2024 (the "Annual Financial Statements") as filed with the SEC. In the opinion of the Company, the accompanying Unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary to fairly present its financial position as of June 30, 2025, its results of operations for the three and six months ended June 30, 2025 and 2024, its cash flows for the six months ended June 30, 2025 and 2024, and its stockholders' deficit for the three and six months ended June 30, 2025 and 2024. Results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2025 or any future period. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2024 was derived from the Annual Financial Statements but does not contain all of the footnote disclosures from the Annual Financial Statements.

Change in Presentation

In the Unaudited Condensed Consolidated Statements of Operations for three and six months ended June 30, 2025, the Company has revised the presentation of operating expenses to separately present "Sales and marketing" and "General and administrative." In prior periods, these expenses were presented on a combined basis as "Selling, general and administrative."

The Company believes this updated presentation provides a more meaningful view of its cost structure and better aligns with how management evaluates financial performance and allocates resources. To facilitate comparison, amounts for the three and six months ended June 30, 2024 have been recast to conform to the current period presentation. This change in presentation had no impact on total operating expenses, loss from operations, net loss, or loss per share for any period presented.

Accounting Pronouncements Recently Adopted

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740), which requires disclosure of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The Company is adopting ASU 2023-09 for the fiscal year ending December 31, 2025 on a prospective basis. The adoption of this ASU had no impact on the Company’s interim Unaudited Condensed Consolidated Financial Statements and related disclosures.

3. Inventory

Inventory, net consisted of the following:


	June 30,		December 31,
	2025		2024
	(in thousands)
Raw materials	$	2,870	$	2,349
Production	4,799		5,515
Finished goods	227		202
Inventory allowance	(868)		(1,252)
Total inventory, net	$	7,028	$	6,814

4. Property and Equipment

Property and equipment, net consisted of the following:


	June 30,		December 31,
	2025		2024
	(in thousands)
Machinery, equipment, and vehicles	$	116,785	$	115,373
Land	19,253		19,253
Buildings and leasehold improvements	261,172		258,864
Construction-in-progress	6,256		6,039
Less: Accumulated depreciation	(38,204)		(28,551)
Property and equipment, net	$	365,262	$	370,978

Depreciation expense related to property and equipment was approximately $5.0 million and $3.0 million for the three months ended June 30, 2025 and 2024, respectively, and approximately $10.0 million and $5.3 million for the six months ended June 30, 2025 and 2024, respectively.

5. Accrued Liabilities

Accrued liabilities consisted of the following:


	June 30,		December 31,
	2025		2024
	(in thousands)
Interest	$	4,968	$	15,293
Construction	79		46
Payroll	1,429		631
Production	1,069		704
Professional services	419		295
Other	1,709		1,113
Total accrued liabilities	$	9,673	$	18,082

6. Debt

Debt consisted of the following:


	June 30,		December 31,
	2025		2024
	(in thousands)
Senior Facility	$	312,000	$	413,359
Debt premium, net of amortization	166,330		—
Subordinated Facility	—		54,564
Unamortized deferred financing costs	—		(31,141)
Total debt	478,330		436,782
Less: Short-term portion	—		(20,205)
Total long-term debt	$	478,330	$	416,577

Restructured Credit Agreements with Cargill Financial

On September 3, 2021, Local Bounti Operating Company LLC and certain subsidiaries entered into a multiple-advance term loan credit agreement (the "Senior Credit Agreement" and “Senior Facility”) and a subordinated credit agreement (the "Subordinated Credit Agreement" and "Subordinated Facility" and, together with the Senior Credit Agreement, the "Original Credit Agreements") with Cargill Financial.

On March 31, 2025, the Company entered into a restructuring agreement and an Eleventh Amendment to the Senior Credit Agreement (the “Eleventh Amendment” and the "Amended Senior Credit Agreement") with Cargill Financial, as further described below.

Eleventh Amendment to the Senior Credit Agreement

Pursuant to the Eleventh Amendment, (i) $139.0 million of loans outstanding under the Senior Facility, together with all accrued and unpaid interest was cancelled, and (ii) $58.0 million of loans outstanding under the Subordinated Credit Agreement, together with all accrued and unpaid interest, was cancelled, constituting all of the loans and interest outstanding under the Subordinated Credit Agreement. In accordance with the Eleventh Amendment, the aggregate principal amount of loans outstanding under the Senior Facility subsequent to the Eleventh Amendment was $312.0 million. Additionally, in connection with the Eleventh Amendment, the per share exercise price of the Original Warrants (as defined below in Note 7, Fair Value Measurements), was amended from $6.50 to $4.00 per share with an amended expiration date of March 31, 2033.

The Company concluded the Eleventh Amendment met the definition of a troubled debt restructuring as the Company was experiencing financial difficulties and the creditor granted a concession as a result of the reduction of principal, cancellation of accrued interest, modification of interest rates, and the extension of the maturity date under the Original Credit Agreements. Therefore, no gain was recognized on the cancellation of debt. Instead, $181.7 million of cancelled principal and $15.4 million of accrued interest, net of $29.0 million of unamortized debt discount remaining under the original Senior Facility, was recorded as a debt premium (representing the excess of the $480.0 million carrying amount of the Senior Facility and the Subordinated Facility prior to the restructuring over the new $312.0 million principal amount of the Senior Facility subsequent to the Eleventh Amendment) that 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.

General Provisions of the Senior Facility

Subsequent to the Eleventh Amendment, interest on the Senior Facility will accrue at three-month SOFR plus 2.0%. On March 31, 2031, the interest rate will increase to three-month SOFR plus 6.0%. 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.

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.

At all times after March 31, 2031, interest shall be payable only in cash on the first business day after each calendar quarter ends. Additionally, beginning in the fourth quarter of 2027, 50% of the free cash flow 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.

The Amended Senior Credit Agreement includes affirmative and negative covenants and events of default, and other requirements and restrictions. The financial covenants under the Amended Senior Credit Agreement consist of the following:

•Minimum Consolidated Interest Coverage Ratio: Beginning June 30, 2027, the Company must maintain a Consolidated Interest Coverage Ratio of at least 1.00 to 1.00, increasing to 1.25 to 1.00 on June 30, 2028, and thereafter.

•Minimum Liquidity: The Company is required to maintain minimum liquidity of $3.0 million as of December 31, 2025, December 31, 2026, and thereafter.

•Minimum EBITDA: The Company must achieve minimum Consolidated Adjusted EBITDA of $0 for the quarter ending March 31, 2026; $3.0 million for each of the quarters ending December 31, 2026 and March 31, 2027; and $7.0 million for the twelve-month period ending March 31, 2027. Adjusted EBITDA is a non-GAAP financial measure defined as net loss before the impact of interest expense, depreciation, and amortization, and adjusted to exclude stock-based compensation expense, change in fair value of warrant liability, and certain other non-core items.

•Current Ratio: Starting June 30, 2027, the Company must maintain a minimum current ratio covenant of at least 1.00 to 1.00, increasing to 1.20 to 1.00 beginning June 30, 2028, and thereafter.

7. Fair Value Measurements

The following table sets forth, by level within the fair value hierarchy, the accounting of the Company’s financial assets and liabilities at fair value on a recurring and nonrecurring basis according to the valuation techniques the Company uses to determine their fair value:


	June 30, 2025
	Level 1		Level 2		Level 3
	(in thousands)
Recurring fair value measurements
Assets:
Money market funds	$	11,771	$	—	$	—

Liabilities:
Cargill Amended Warrants Liability	$	—	$	—	$	11,412


	December 31, 2024
	Level 1		Level 2		Level 3
	(in thousands)
Recurring fair value measurements
Assets:
Money market funds	$	7,448	$	—	$	—

Liabilities:
Cargill Amended Warrants Liability	$	—	$	—	$	6,403

The fair value of the Company's money market funds is determined using quoted market prices in active markets for identical assets.

Common Stock Purchase Warrant Amendment

In connection with the Eleventh Amendment, the Company entered into amendments for existing warrants held by Cargill Financial (the "Warrant Amendments") to amend (i) that certain Common Stock Purchase Warrant, dated March 28, 2023 (the "Base Warrant") and (ii) those certain Warrants to Purchase Common Stock, each issued November 21, 2021 (the "2021 Warrants" and, together with the Base Warrant, the "Original Warrants"; the Original Warrants as amended, the "Amended Warrants") to (a) amend the exercise price for the Original Warrants from $6.50 to $4.00 per share of common stock, (b) extend the expiration date to eight years from the closing of the Eleventh Amendment, and (c) amend and restate the Base Warrant to be on the same form as the 2021 Warrants. The Original Warrants were issued by the Company to Cargill Financial to purchase up to an aggregate of 5,408,145 shares of common stock and the aggregate number of shares is the same for the Amended Warrants. The change in the per share exercise price did not affect the classification of the Original Warrants. Therefore, the change in fair value of the Original Warrants will continue to be 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 Unaudited Condensed Consolidated Statements of Operations.

The fair value of the liability of the Amended Warrants is determined using a Black-Scholes model. The following table presents changes in the Level 3 fair value measurement for the warrant liability on a recurring basis:


	June 30,
	2025
	(in thousands)
Balance as of December 31, 2024	$	6,403
Fair value measurement adjustments through other income (expense)	5,009
Balance as of June 30, 2025	$	11,412

The key inputs into the Black-Scholes model used to determine the fair value of the liability of the Amended Warrants were as follows at their measurement dates:


	June 30, 2025		June 30, 2024
Input
Share price	$	2.34	$	2.79
Risk-free interest rate	4.0%		4.3%
Volatility	123%		125%
Exercise price	$	4.00	$	6.50
Warrant life (years)	7.8		3.7
Dividend yield	—%		—%

As of June 30, 2025 and December 31, 2024, the carrying value of the Company's cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses approximated their respective fair values due to their short-term maturities. Therefore, no unrealized gains or losses were recorded during the periods presented. There were no transfers of financial instruments between Level 1, Level 2, and Level 3 during the periods presented.

8. Stockholders' Deficit

Securities Purchase Agreement

On March 31, 2025, simultaneous with the Eleventh Amendment (see Note 6, Debt for further information), the Company entered into a securities purchase agreement (the "Purchase Agreement") with certain investors (the "Investors") for a $25 million investment (the "PIPE Investment"). In connection with the PIPE Investment, the Company issued 1,771,586 shares of common stock (the "PIPE Common Stock"), $0.0001 par value per share, and 10,728,414 shares Series A Preferred Stock (the "Series A Preferred Stock"), $0.0001 par value per share (and together with the PIPE Common Stock, (the "Securities")) at a purchase price of $2.00 per share (the "Purchase Price") to comply with NYSE stockholder approval rules. As required by the NYSE shareholder approval rules, the Series A Certificate of Designations limited the number of shares of common stock issuable upon conversion of the Series A Preferred Stock such that, when aggregated with the shares of PIPE Common Stock issued at closing, such issuances would not exceed 19.99% of the Company’s issued and outstanding common stock until the date stockholder approval was obtained. All shares of Series A Preferred Stock were automatically converted into one share of common stock without any action by the holders on the first trading day after the Company obtained stockholder approval, which the Company obtained at its June 11, 2025, Annual Meeting of Stockholders. The Investors are subject to a 180-day lock-up period with respect to the Securities purchased in the PIPE Investment.

The Purchase Agreement included customary representations, warranties and covenants of the parties. The securities issued pursuant to the Purchase Agreement were sold in private placements in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended ("Securities Act") and/or Rule 506(b) of Regulation D promulgated under the Securities Act, without general solicitation, made only to and with accredited investors as defined in Regulation D. The transaction closed on March 31, 2025, following the satisfaction of customary closing conditions. Upon closing, the Company received aggregate net proceeds of approximately $24.5 million, net of offering expenses, which was allocated between the common stock and Series A Preferred Stock on a relative fair value basis resulting in $3.4 million of net proceeds from the sales of common stock and $21.1 million from the sale of Series A Preferred Stock. The Company intends to use the proceeds from the Securities sale for general corporate purposes.

The Series A Preferred Stock was initially classified in temporary equity on the Unaudited Condensed Consolidated Balance Sheets as prior to its conversion to common stock it was contingently redeemable in cash at the original purchase price at the holder’s option upon the occurrence of events which were deemed outside of the Company’s control. In accordance with the accounting guidance for contingently redeemable equity instruments, the Company elected to record changes in redemption value immediately as the changes occur, and to adjust the carrying amount of the Series A Preferred Stock to its redemption value at the end of each reporting period. At issuance, the Series A Preferred Stock had a relative fair value of $21.1 million. At the end of the reporting period on March 31, 2025, the redemption value of the Series A Preferred Stock was equal to the original purchase price of $2.00 per share, or $21.5 million. Consequently, the Company recognized a $0.4 million increase to the initial carrying value of the Series A Preferred Stock and a decrease to additional paid in capital to reflect the Series A Preferred Stock at its maximum redemption value. This increase to the carrying value is treated as a deemed dividend to the preferred stockholders and increases the net loss attributable to common stockholders and basic net loss per share for the six months ended June 30, 2025. See Note 10, Net Loss Per Share for further information.

Equity Incentive Plan

The Company's Board of Directors adopted an amendment to the Company's 2021 Equity Incentive Plan to increase the number of shares issuable under the plan by an additional 2,473,042 shares of common stock, par value $0.0001 per share, that was approved by the Company's stockholders on, and which became effective as of, June 11, 2025.

9. Stock-Based Compensation

Restricted Common Stock Awards

A summary of the restricted common stock awards ("RSAs") for the six months ended June 30, 2025 is as follows:


	Number of Shares of Restricted Common Stock Awards	Average Grant-Date Fair Value
Unvested and outstanding at December 31, 2024	24,357	$	36.27

Vested	(24,357)	$	36.27
Unvested and outstanding at June 30, 2025	—	$	—

There was no RSA expense for the three months ended June 30, 2025. Total RSA expense for the six months ended June 30, 2025 was $0.1 million. Total expense of RSAs for the three and six months ended June 30, 2024 was $0.1 million and $0.4 million, respectively. As of June 30, 2025, there is no remaining compensation cost related to unvested RSAs as they have all been vested.

Restricted Stock Units

A summary of the restricted stock units ("RSUs") activity for the six months ended June 30, 2025 is as follows:


	Number of RSUs	Average Grant-Date Fair Value
Unvested and outstanding at December 31, 2024	1,226,308	$	12.60
Granted	3,308,975	$	2.44
Forfeited	(275,258)	$	3.94
Vested	(870,446)	$	13.86

Unvested and outstanding at June 30, 2025	3,389,579	$	3.04

Total RSU expense, net of amounts capitalized, for the three and six months ended June 30, 2025 was $2.2 million and $2.8 million, respectively. Total expense of RSUs, net of amounts capitalized, for the three and six months ended June 30, 2024 was $1.5 million and $0.3 million, respectively. As of June 30, 2025, the total compensation cost related to unvested RSUs not yet recognized is $7.1 million. Unvested RSU expense not yet recognized is expected to be recognized over a weighted average period of 1.67 years.

On March 27, 2025, the Compensation Committee of the Company's Board of Directors approved a grant of 1,400,000 and 700,000 RSUs to each of Kathleen Valiasek and Craig Hurlbert, respectively. The RSUs will vest in equal quarterly increments over approximately two years beginning on July 1, 2025 and will continue to vest to the extent that they remain employed by the Company through each vesting date. On March 27, 2025, the Compensation Committee of the Company's Board of Directors also approved the acceleration of all RSUs previously granted to Kathleen Valiasek and Craig Hurlbert as of July 1, 2025.

10. Net Loss Per Share

The Company computes net loss per share in accordance with Accounting Standards Codification 260, Earnings Per Share. Basic net loss per share of common stock is computed by dividing the Company’s net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock is computed by giving effect to all potentially dilutive securities, including restricted stock awards and units, convertible preferred stock, and common stock warrants using the treasury stock method or the if-converted method, as applicable. For the three and six months ended June 30, 2025 and 2024, basic net loss per share was the same as diluted net loss per share because the inclusion of all potentially dilutive securities outstanding was anti-dilutive. As such, the numerator and denominator used in computing both basic and diluted net loss attributable to common stockholders is the same for all periods presented.

The Company follows the two-class method to compute net loss per share when shares are issued that meet the definition of participating securities. The two-class method requires income available to common stockholders for the period to be allocated between common and participating securities based upon their respective rights to share in the earnings of the Company as if all income for the period had been distributed. The two-class method also requires losses for the period to be allocated between common and participating securities only if the participating securities are contractually obligated to fund the losses of the issuing entity or the contractual redemption amount related to the participating securities is reduced as a result of losses incurred by the issuing entity. In computing net loss per share, the Company's unvested restricted common stock and warrants are not considered participating securities.

The following table sets forth the computation of the Company's net loss per share attributable to common stockholders:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands, except share and per share data)				(in thousands, except share and per share data)
Net loss attributable to common stockholders	$	(21,577)	$	(25,267)	$	(59,655)	$	(49,317)
Weighted average common shares outstanding, basic and diluted	13,270,197		8,411,226		11,051,720		8,368,596
Net loss per common share, basic and diluted	$	(1.63)	$	(3.00)	$	(5.40)	$	(5.89)

The following table discloses the weighted-average or period-end shares outstanding of securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share as the impact would be anti-dilutive:


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Restricted Stock	—	83,508	9,824	96,031
Warrants	6,241,475	6,241,475	6,241,475	6,241,475

11. Segment Reporting

The Company has a single operating and reportable segment that derives its revenue from customers through the production and sale of agricultural produce, consisting primarily of grown living and loose leaf lettuce, arugula, bok choy, and basil. All of the Company's revenue is generated in the U.S. and the Company manages its business activities on a consolidated basis. The Company’s chief operating decision maker ("CODM") is the Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources.

The CODM assesses segment performance and decides how to allocate resources based on net loss, which is also reported on the Consolidated Statements of Operations, and net cash generated by or used in operating activities, which is also reported on the Consolidated Statements of Cash Flows. The measure of segment assets is reported on the Consolidated Balance Sheets as total assets. Significant expenses reviewed by the CODM include those that are presented in the Consolidated Statements of Operations.

Segment operating results, including significant expenses regularly provided to the CODM, along with a reconciliation of segment operating loss to consolidated net loss, are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Revenue	$	12,103	$	9,443	$	23,708	$	17,826
Less:
Salaries and wages

SEC Form 10-Q filed by Local Bounti Corporation