Industry Overview - The natural foods industry has transformed from a niche market to a mainstream powerhouse due to increasing consumer health consciousness and environmental awareness [1] - Consumers are prioritizing clean eating practices and ethical sourcing, leading to a surge in demand for natural and organic food products [1][2] - The global healthy foods market is projected to reach $2.26 trillion by 2035, indicating significant growth potential [4] Consumer Trends - There is a heightened preference for transparency in sourcing and minimal processing, with organic, non-GMO, and preservative-free options becoming standard [2] - Governments worldwide are reinforcing this shift through stricter food labeling regulations, enhancing market expansion and consumer trust [2] Company Responses - Companies like General Mills, Inc. and The Hain Celestial Group, Inc. are adapting to the rising demand for organic and clean-label foods [3] - Vital Farms is expanding its network to over 450 family farms, a 50% increase since the end of 2023, to secure a stable supply of pasture-raised eggs [7] - Sprouts Farmers Market has introduced over 7,100 new items in 2024, with more than 70% of its products being attribute-driven [9][10] Investment Opportunities - Vital Farms is seeing robust growth in its butter segment, with net revenues increasing by 41% year over year [7] - Sprouts Farmers generated $1.7 billion in sales from private-label products in 2024, enhancing its reputation for high-quality offerings [10] - United Natural Foods, Inc. reported a 12% sales growth in its Wholesale Natural Products segment, outpacing the broader food industry [12] Innovation and Infrastructure - Companies are investing in plant-based alternatives, functional foods, and sustainable farming technologies to meet growing consumer demand [4] - Vital Farms is constructing a new facility in Indiana and enhancing its egg grading capacity to boost efficiency [8] - United Natural Foods is streamlining processes through Lean Daily Management across 20 distribution centers, improving fill rates and service levels [13][14] Product Development - Beyond Meat is focusing on clean-label credentials and health-forward innovation, launching products like Beyond Chicken Pieces and reformulated Beyond Burger [15][16] - The company emphasizes transparency and health impact through marketing campaigns that track health improvements in consumers [17]

Industry Overview - The Zacks Food – Meat Products industry is facing challenges such as high input costs and operational expenses, along with export-related hurdles like trade uncertainties and port disruptions [1][5] - The industry includes companies that manufacture, process, market, and sell various meat products, including chicken, pork, beef, and plant-based meats, catering to retail and foodservice customers [3] Current Trends - Rising cost pressures from feed, raw materials, labor, and transportation are straining profit margins, with inflation affecting consumer shopping habits, leading to tighter budgets [4] - Export challenges are exacerbated by trade uncertainties, biosecurity concerns, and strong domestic demand, which limits supply for international markets [5] - The demand for high-protein diets is increasing, benefiting meat companies, while plant-based alternatives are gaining traction as consumers seek healthier options [6] Industry Performance - The Zacks Food – Meat Products industry ranks 201, placing it in the bottom 18% of over 250 Zacks industries, indicating dull near-term prospects [7][8] - The industry has underperformed the broader Zacks Consumer Staples sector and the S&P 500, declining 10.6% over the past year compared to the sector's growth of 2.8% and the S&P 500's rise of 11.1% [10] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 12.44X, significantly lower than the S&P 500's 22.52X and the sector's 17.42X [12] Company Highlights - Tyson Foods, a leading player in the protein industry, benefits from a diversified multi-protein strategy and strong brand recognition, positioning it for long-term growth despite industry volatility [14] - Beyond Meat focuses on plant-based meat alternatives, capitalizing on the growing consumer demand for healthier food options, and is well-positioned for success in the alternative protein market [19]

Industry Overview - The agriculture industry is undergoing a significant transformation driven by advanced technologies and innovations, addressing the urgent need for sustainable and efficient farming practices due to global population growth and climate change [2][3] - Agricultural technology (AgTech) and food innovation are pivotal in revolutionizing food production, enhancing productivity, and reducing environmental impact [2][3] AgTech Innovations - AgTech is reshaping food production, processing, and distribution through advancements in artificial intelligence (AI), biotechnology, and automation, leading to smarter and more sustainable agriculture [3] - Technologies such as precision farming, lab-grown meat, and plant-based alternatives are at the forefront of this transformation, enabling farmers to optimize operations and reduce resource waste [3][5] Protein Market Transformation - The global protein market is shifting towards healthier and more sustainable alternatives, including plant-based proteins and lab-grown meat, driven by health-conscious consumers [4] - Companies like Ingredion Incorporated are investing in plant-based ingredients to meet the rising global demand for sustainable protein solutions [4] Supply Chain Enhancements - Emerging technologies like blockchain and the Internet of Things (IoT) are improving food traceability and safety standards while minimizing waste in logistics and distribution [5] - Automation in food processing and packaging is enabling companies to deliver fresher products more efficiently and reduce operational costs [5] Investment Opportunities - Companies adopting advanced technologies are gaining a competitive edge, with top-performing stocks in AgTech and food innovation presenting compelling investment opportunities [6] - Industry leaders such as Beyond Meat, Hormel Foods, and Tyson Foods are leveraging AgTech to enhance growth and competitiveness [6] Beyond Meat Initiatives - Beyond Meat is focused on redefining protein production through innovative plant-based meats that replicate traditional animal products, addressing climate change and public health challenges [8] - The company is expanding its global footprint and investing in sustainable product development and supply chain transformation [11] Hormel Foods Strategies - Hormel Foods is utilizing digital technologies and AgTech solutions to enhance operational efficiency and food production standards, including a $1.7 million investment in regenerative agriculture [11][13] - The company is expanding its innovation pipeline with a focus on alternative protein development through partnerships, such as with The Better Meat Co. [12] Tyson Foods Transformation - Tyson Foods is investing in agricultural technology and food innovation to support sustainable protein production and digital transformation [14] - The company is enhancing operational efficiency through automation and logistics improvements, aiming for $200 million in annual savings by 2030 [16]

Industry Overview - The natural foods industry has transitioned from a niche market to a mainstream sector due to increased health consciousness and environmental awareness among consumers [2] - There is a growing focus on clean eating, sustainability, and ethical sourcing, leading to rapid popularity of natural and organic food products [2] - Consumers are favoring transparency in sourcing and minimal processing, with a preference for organic, non-GMO, and preservative-free options [3] Market Dynamics - Governments worldwide are promoting clean eating and implementing stricter food labeling regulations, which is driving market expansion [3] - Natural food companies are experiencing stronger brand loyalty and the ability to command premium pricing as a result of these trends [3] - The global healthy foods market is projected to reach $2.26 trillion by 2035, indicating significant growth potential [5] Key Players - Companies like The Hain Celestial Group, Inc. and Vital Farms, Inc. are responding to the rising demand for organic and ethically sourced foods [4] - Sprouts Farmers Market, Inc. has seen substantial growth in a market estimated at approximately $290 billion, focusing on high-quality and ethically sourced products [7] - United Natural Foods, Inc. is one of the largest distributors of organic and natural products in North America, with a strategic shift to focus on natural, organic, specialty, and fresh products [10][11] Innovations and Strategies - Companies are investing in plant-based alternatives, functional foods, and sustainable farming technologies to meet evolving consumer preferences [5] - Sprouts Farmers Market has launched a new loyalty program and is self-distributing fresh meat and seafood to enhance customer experience and supply chain efficiency [8][9] - Beyond Meat is focusing on clean-label credentials and health-forward innovation, with product launches like Beyond Chicken Pieces and reformulated Beyond Burger [14][15] Future Outlook - The natural foods industry is expected to continue evolving with ongoing innovation and expanding product categories [5] - General Mills is strategically positioning itself in the natural and organic food space, with a focus on fewer but larger innovations targeting high-protein and sustainable foods [16][17] - Companies are refining existing products and adjusting marketing strategies to better meet consumer demands for natural ingredients and organic options [18][19]

Financial Data and Key Metrics Changes - The company confirmed that a quorum was present for the meeting, indicating active shareholder engagement [8] - The board of directors recommended voting in favor of three proposals, reflecting confidence in governance and strategic direction [9][12] Business Line Data and Key Metrics Changes - The company highlighted its leadership in the plant-based protein space, emphasizing the need for top talent to drive industry disruption [17] - The performance of Beyond Meat products in McDonald's France was noted, with nuggets being sold in 1,500 stores and performing well [22] Market Data and Key Metrics Changes - The company is actively marketing in the EU with a campaign titled "All Taste No Worries," indicating a strategic focus on European markets [23] - The company is addressing concerns about processed food by explaining its clean production process compared to traditional meat production [26] Company Strategy and Development Direction - Beyond Meat remains committed to its mission of transforming protein delivery globally, focusing on sustainability and health benefits [34] - The company is working on sustainability metrics and lifecycle assessments (LCA) to document environmental advantages over animal protein [28][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current challenges but expressed optimism about future recovery and growth [18] - The company is focused on aligning executive compensation with shareholder interests, emphasizing that a significant portion of executive pay is in equity [20] Other Important Information - The company is exploring new product ideas, such as a vegan holiday roast, reflecting responsiveness to consumer preferences [32] Q&A Session Summary Question: Why are executives asking for compensation when the company is not doing well? - Management emphasized the importance of retaining top talent to lead the industry and acknowledged the current challenges while expressing hope for recovery [17][18] Question: Why give shares to executives and directors? - The company explained that equity compensation aligns interests with shareholders and that executive compensation is significantly tied to stock performance [20] Question: Why is there limited advertising in Europe? - Management highlighted successful partnerships, such as with McDonald's in France, and ongoing marketing efforts in the EU [22][23] Question: How to counter the argument that Beyond Meat is ultra-processed? - The company detailed its clean production process and contrasted it with traditional meat production methods to highlight its advantages [26] Question: What is the status of sustainability metrics and LCA updates? - Management confirmed ongoing work on sustainability metrics, showcasing significant reductions in greenhouse gas emissions and resource use compared to animal protein [28][30] Question: Consideration of a vegan holiday roast? - Management expressed enthusiasm for the proposal and indicated it would be taken into consideration [32]

Group 1 - The author has been active in the markets for several years, focusing primarily on long/short equities [1] - The author holds a Bachelor of Science Degree in Finance and Accounting, with a minor in History, and has experience managing investment portfolios [1] - The author has completed internships at a large bank and in managing a university endowment [1] Group 2 - The article emphasizes the importance of conducting due diligence before making any investment decisions [3] - It is advised that investors seek advice from brokers or financial advisers [3] - The article states that past performance is not indicative of future results, and no formal investment recommendations are made [4]

Company Performance - Beyond Meat reported a quarterly loss of $0.67 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.52, and an improvement from a loss of $0.72 per share a year ago [1] - The company posted revenues of $68.73 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 9.39%, and down from $75.6 million year-over-year [2] - Over the last four quarters, Beyond Meat has surpassed consensus EPS estimates only once and topped consensus revenue estimates two times [2] Stock Movement and Outlook - Beyond Meat shares have declined approximately 33% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the earnings outlook [4][6] - The current consensus EPS estimate for the upcoming quarter is -$0.37 on revenues of $94.66 million, and for the current fiscal year, it is -$1.58 on revenues of $328.81 million [7] Industry Context - The Food - Meat Products industry, to which Beyond Meat belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Hormel Foods, another company in the same industry, is expected to report quarterly earnings of $0.35 per share, reflecting a year-over-year change of -7.9%, with revenues projected at $2.9 billion, up 0.6% from the previous year [9]

Financial Data and Key Metrics Changes - In Q1 2025, net revenues decreased by 9.1% to $68.7 million compared to $75.6 million in the same period last year, primarily due to an 11.2% decrease in volume sold, partially offset by a 2.4% increase in net revenue per pound [18][19] - Gross profit was a loss of $1.1 million, resulting in a gross margin of negative 1.5%, compared to a gross profit of $3.7 million and a gross margin of 4.9% in the prior year [25][26] - Net loss was $52.9 million in Q1 2025, compared to a net loss of $54.4 million in the same period last year, with net loss per share at $0.69 compared to $0.84 [28][29] Business Line Data and Key Metrics Changes - U.S. Retail channel net revenues decreased by 15.4% to $31.4 million, driven by a 23.2% decrease in volume sold, partially offset by a 10% increase in net revenue per pound [20][21] - U.S. Foodservice net revenues decreased by 23.5% to $9.4 million, primarily due to a 22% decrease in volume sold and a 2% decrease in net revenue per pound [23] - International retail channel net revenues increased by 0.8% to $12.7 million, driven by a 10.3% increase in net revenue per pound, despite an 8.6% decrease in volume sold [24] Market Data and Key Metrics Changes - Consumption data indicated a progressive weakening in U.S. retail takeaway during Q1 2025, contributing to weaker shipments than expected [21] - International foodservice channel net revenues increased by 12.1% to $15.3 million, primarily due to a 13.5% increase in volume sold [25] Company Strategy and Development Direction - The company aims to achieve EBITDA positive on a run rate basis by the end of 2026, focusing on reducing operational expenses and optimizing manufacturing towards margin objectives [10][32] - A new marketing campaign, "Real People, Real Results," is being launched to improve consumer perception and drive demand for plant-based products [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that Q1 2025 was disappointing due to worsening category and macroeconomic conditions impacting top-line recovery [5][6] - The company has withdrawn its full-year guidance due to elevated uncertainty in the operating environment, limiting revised outlook to Q2 net revenue expectations of $80 million to $85 million [32][66] Other Important Information - The company closed a financing facility providing up to $100 million in new senior secured debt, which will help support strategic priorities and liquidity [16][30] - The company is focusing on dispelling misinformation about its products and enhancing consumer understanding of the benefits of plant-based diets [13][41] Q&A Session Questions and Answers Question: What potential initiatives could be taken to stabilize the top line in the U.S. market? - Management indicated that restoring distribution lost due to product transitions and improving consumer perception through marketing efforts are key initiatives [37][39] Question: Can more details be shared about the financing agreement of the $100 million? - The financing facility has an initial term of approximately five years with an interest rate of 12% for drawdowns, increasing to 17.5% after the maturity date [45][46] Question: What is the outlook regarding tariffs and demand uncertainty? - Management noted that while there are discussions around tariffs, the direct impact on the business is considered minimal, but consumer confidence remains a concern [68][70]

Financial Data and Key Metrics Changes - In Q1 2025, net revenues decreased by 9.1% to $68.7 million compared to $75.6 million in the same period last year, primarily driven by an 11.2% decrease in volume sold, partially offset by a 2.4% increase in net revenue per pound [19][20] - Gross profit was a loss of $1.1 million, resulting in a gross margin of negative 1.5%, compared to a gross profit of $3.7 million and a gross margin of 4.9% in the prior year [27][28] - Net loss was $52.9 million in Q1 2025, compared to a net loss of $54.4 million in the same quarter last year, with net loss per share improving from $0.84 to $0.69 [30][31] Business Line Data and Key Metrics Changes - U.S. Retail channel net revenues decreased by 15.4% to $31.4 million, driven by a 23.2% decrease in volume sold, partially offset by a 10% increase in net revenue per pound [21][22] - U.S. Foodservice net revenues decreased by 23.5% to $9.4 million, primarily due to a 22% decrease in volume sold and a 2% decrease in net revenue per pound [25] - International retail channel net revenues increased by 0.8% to $12.7 million, driven by a 10.3% increase in net revenue per pound, despite an 8.6% decrease in volume sold [26] Market Data and Key Metrics Changes - Consumption data indicated a progressive weakening in U.S. retail takeaway during Q1 2025, contributing to weaker shipments than expected [22][23] - International foodservice channel net revenues increased by 12.1% to $15.3 million, primarily due to a 13.5% increase in volume sold [27] Company Strategy and Development Direction - The company aims to achieve EBITDA positive on a run rate basis by the end of 2026, focusing on reducing operational expenses and optimizing manufacturing towards margin objectives [11][34] - A new marketing campaign, "Real People, Real Results," is being launched to improve consumer perception and drive demand for plant-based products [16][17] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in Q1 2025 due to worsening category and macroeconomic conditions, impacting top-line recovery [5][6] - The company has withdrawn its full-year guidance due to elevated uncertainty in the operating environment, limiting revised outlook to Q2 net revenue expectations of $80 million to $85 million [34][70] Other Important Information - The company closed a financing facility providing up to $100 million in new senior secured debt, aimed at enhancing liquidity and supporting strategic priorities [17][32] - Operating expenses in Q1 2025 were $55.1 million, a decrease from $57.1 million in the previous year, including $7.2 million in transient expenses [29][30] Q&A Session Summary Question: What initiatives could be taken to stabilize the top line in the U.S. market? - Management highlighted the importance of restoring distribution lost due to product transitions in retail and emphasized the need to improve consumer perception through effective messaging and marketing campaigns [39][42] Question: Can you provide more details on the financing agreement? - The financing facility has an initial term of approximately 4.75 years, with interest accruing at 12% initially and 17.5% thereafter, payable in kind [47][49] Question: What is the outlook regarding tariffs and demand uncertainty? - Management indicated that while there are discussions around tariffs, the direct impact on the business is minimal, but consumer confidence remains a concern that could affect demand [72][74] Question: What is the expected run rate for SG&A in the coming quarters? - Management noted that extraordinary items in Q1 would not repeat, and they expect a normalization of legal expenses, with ongoing impacts from the suspension of operations in China [76][86]

[Loan and Security Agreement](index=1&type=section&id=LOAN%20AND%20SECURITY%20AGREEMENT) This agreement, effective **May 7, 2025**, outlines the terms for a term loan between **UNPROCESSED FOODS, LLC** and **BEYOND MEAT, INC.**, secured by the **Borrower's** assets [Parties and Effective Date](index=1&type=section&id=Parties%20and%20Effective%20Date) This Loan and Security Agreement is dated May 7, 2025, between UNPROCESSED FOODS, LLC (as a Lender), other Lenders, BEYOND MEAT, INC. (as Borrower), and its Guarantors - The agreement is effective as of **May 7, 2025**[2](index=2&type=chunk) Parties to the Agreement | Role | Entity | Jurisdiction | | :--- | :--- | :--- | | **Lender** | UNPROCESSED FOODS, LLC | Wyoming limited liability company | | **Borrower** | BEYOND MEAT, INC. | Delaware corporation | [Loan and Terms of Payment](index=1&type=section&id=1%20LOAN%20AND%20TERMS%20OF%20PAYMENT) This section details the term loan's availability, repayment terms, interest rates (including **PIK** and default rates), fees, and provisions for changes in circumstances and tax treatment [Term Loan](index=1&type=section&id=1.1%20Term%20Loan) The agreement provides for term loan advances up to the Term Loan Availability Amount, which cannot be reborrowed after repayment. All outstanding amounts are due on the Term Loan Maturity Date. The agreement details procedures for borrowing, optional prepayments, and mandatory prepayments upon certain events. A key feature is the MOIC (Multiple of Invested Capital) Amount, ensuring Lenders achieve at least a 2.0x return, or a Termination Fee in specific insolvency scenarios Term Loan Key Terms | Feature | Detail | | :--- | :--- | | **Availability** | Up to the Term Loan Availability Amount during the Draw Period. Not re-borrowable. | | **Minimum Advance** | $3 million per advance. | | **Maturity** | All unpaid principal, interest, and other Obligations are due on the Term Loan Maturity Date. | | **Optional Prepayment** | Allowed at any time with 3 business days' notice, must include accrued interest and any MOIC Amount. | - Mandatory prepayment is required upon a **Liquidation Event** or an **Inconsistent Use Event** (use of funds for purposes not specified in the Side Letter)[6](index=6&type=chunk)[8](index=8&type=chunk) - Any repayment or prepayment under sections 1.1(c), (d), (e), or (f) must include a "**MOIC Amount**" to ensure **Lenders** receive a return of at least a **2.00 to 1.00** multiple of invested capital. In certain insolvency cases, this is replaced by a **Termination Fee**[9](index=9&type=chunk)[12](index=12&type=chunk) [Payment of Interest](index=3&type=section&id=1.2%20Payment%20of%20Interest%20on%20the%20Term%20Loan%20Advances) Interest on the term loan is paid-in-kind (PIK) quarterly by capitalizing it and adding it to the principal balance. The standard interest rate is 12.0%, increasing to 17.5% if the maturity date is extended. A default rate of an additional 2.25% applies during an Event of Default - Quarterly interest payments are made by capitalizing the interest ("**PIK Interest**"), which increases the outstanding principal amount of the loan. Cash interest is only payable upon repayment or prepayment of the principal[14](index=14&type=chunk) Interest Rates | Condition | Per Annum Fixed Rate | | :--- | :--- | | **Standard Rate** | 12.0% | | **Post-Extension Rate** | 17.5% (after Initial Maturity Date is extended) | | **Default Rate** | Standard Rate + 2.25% | [Fees](index=3&type=section&id=1.3%20Fees) The Borrower is required to pay a Commitment Fee to UF as outlined in the separate Commitment Letter - **Borrower** must pay the **Commitment Fee** to **UF** as per the terms of the Commitment Letter[18](index=18&type=chunk) [Change in Circumstances](index=4&type=section&id=1.5%20Change%20in%20Circumstances) If a change in law or regulations increases the Lenders' costs or reduces their rate of return related to the loan, the Borrower must pay additional amounts to compensate the Lenders for these increased costs or reductions - **Borrower** must compensate **Lenders** for increased costs or reduced returns resulting from any "**Change in Law**," which includes changes in reserve requirements, taxes (other than excluded taxes), or capital/liquidity requirements[21](index=21&type=chunk)[22](index=22&type=chunk) [Taxes](index=5&type=section&id=1.6%20Taxes) The Borrower must make all payments free of tax deductions, unless required by law. If taxes are withheld, the Borrower must 'gross-up' the payment so the Lender receives the full intended amount. The Borrower also agrees to indemnify Lenders for any "Indemnified Taxes" - All payments by the **Borrower** must be made without deduction for any Taxes, except as required by law. If an **Indemnified Tax** is withheld, the payment amount must be increased to ensure the **Lender** receives the full sum it would have otherwise received[25](index=25&type=chunk) - The **Borrower** indemnifies each **Lender** for the full amount of any **Indemnified Taxes** paid by the **Lender**[27](index=27&type=chunk) [Extension of Maturity Date](index=6&type=section&id=1.7%20Extension%20of%20Maturity%20Date) The Borrower may request to extend the Term Loan Maturity Date, and any Lender may agree to such an extension for its portion of the loan at its sole discretion. The maturity date cannot be extended beyond May 7, 2035 - The **Term Loan Maturity Date** can be extended with the mutual consent of the **Borrower** and the individual **Lender** for that **Lender's** portion of the Term Loan Advances. The final possible maturity date is **May 7, 2035**[33](index=33&type=chunk) [Conditions Precedent](index=6&type=section&id=2%20CONDITIONS%20PRECEDENT%20TO%20EFFECTIVENESS%20AND%20TO%20TERM%20LOAN%20ADVANCES) This section specifies the essential conditions that must be met for the loan agreement to become effective and for any term loan advances to be disbursed [Conditions Precedent to Effectiveness](index=6&type=section&id=2.1%20Conditions%20Precedent%20to%20Effectiveness) For the agreement to become effective, the Borrower must deliver several key documents, including the signed agreement, a Perfection Certificate, and corporate resolutions. Additionally, the Commitment Fee must be paid, certain representations and warranties must be true, and all necessary filings to perfect the Lender's lien must be in proper form - Key deliverables for effectiveness include: executed **Loan Documents** (Agreement, Side Letter, Warrant Agreement), payment of the **Commitment Fee**, corporate authorizing resolutions, good standing certificates, a legal opinion, and a solvency certificate[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [Conditions Precedent to all Term Loan Advances](index=7&type=section&id=2.2%20Conditions%20Precedent%20to%20all%20Term%20Loan%20Advances) Before each term loan advance, the Borrower must satisfy several conditions. These include submitting an Advance Request Form, ensuring no liens other than permitted ones exist, providing evidence of insurance, and confirming that no Default or Event of Default has occurred. Additionally, representations and warranties must be true and correct at the time of the advance - For each loan advance, the **Borrower** must provide an Advance Request Form, and **Lenders** must have received satisfactory **UCC lien search** results, evidence of insurance, and pledged equity certificates (if any)[37](index=37&type=chunk) - A critical condition for each advance is that no **Default** or **Event of Default** has occurred and is continuing, and all representations and warranties remain true and correct[38](index=38&type=chunk) - A **Warrant to purchase Borrower's common stock** must be registered for each **Lender** in proportion to their share of the Term Loan Advance, not to exceed the **Maximum Warrant Share Amount**[38](index=38&type=chunk) [Creation of Security Interest](index=8&type=section&id=3%20CREATION%20OF%20SECURITY%20INTEREST) This section establishes the **Lenders'** first-priority security interest in all of the **Borrower's** and its **Domestic Subsidiaries'** assets, outlining the conditions for its termination [Grant of Security Interest](index=8&type=section&id=3.1%20Grant%20of%20Security%20Interest) To secure all obligations, the Borrower and its Domestic Subsidiaries grant the Lenders a continuing first-priority security interest in all of their assets, referred to as the Collateral. This includes all current and future property and its proceeds - The **Borrower** and each **Domestic Subsidiary** grant **UF**, for the benefit of **Lenders**, a continuing first priority lien on and security interest in the **Collateral** to secure all **Obligations**[40](index=40&type=chunk) [Termination and Release of Liens](index=9&type=section&id=3.4%20Termination%20and%20Automatic%20Release%20of%20Liens) The Lenders' lien on the Collateral will continue until all obligations under the agreement are paid in full. Upon full repayment and termination of the lending commitment, the lien will be automatically released and all rights to the Collateral will revert to the Borrower - Upon full payment of the **Obligations** (other than certain surviving obligations) and termination of the **Lenders'** commitment to make loans, all Liens in favor of the **Lenders** will be automatically released and discharged[43](index=43&type=chunk) [Representations and Warranties](index=9&type=section&id=4%20REPRESENTATIONS%20AND%20WARRANTIES) This section details the **Borrower's** and **Loan Parties'** assurances regarding their corporate status, collateral ownership, financial condition, and compliance with all applicable laws [Summary of Representations and Warranties](index=9&type=section&id=Summary%20of%20Representations%20and%20Warranties) The Borrower and its Loan Parties make several standard representations and warranties to the Lenders. These include assurances of due organization, valid corporate authority, ownership of collateral, accuracy of financial statements, solvency, and compliance with laws (including regulatory, tax, and anti-corruption laws). They also confirm there has been no Material Adverse Change since December 31, 2024, and that all information provided is complete and not misleading - **Corporate Status:** Each **Loan Party** is duly organized, in good standing, and has the authority to enter into the **Loan Documents**[45](index=45&type=chunk) - **Collateral:** Each **Loan Party** has good title to the **Collateral**, and the security interest granted is a first priority perfected lien, subject only to **Permitted Liens**[50](index=50&type=chunk) - **Financial Condition:** Financial statements provided are fair representations, the company is solvent, and there has been no **Material Adverse Change** since **December 31, 2024**[54](index=54&type=chunk)[55](index=55&type=chunk)[65](index=65&type=chunk) - **Compliance:** The **Loan Parties** are in compliance with all applicable laws, including regulatory (e.g., not an 'investment company'), tax, **ERISA**, sanctions, and anti-corruption laws[57](index=57&type=chunk)[60](index=60&type=chunk)[62](index=62&type=chunk)[64](index=64&type=chunk) [Affirmative Covenants](index=12&type=section&id=5%20AFFIRMATIVE%20COVENANTS) This section outlines the ongoing obligations of the **Borrower**, including the permitted use of loan proceeds, regular financial reporting, and requirements for new subsidiaries [Use of Proceeds](index=12&type=section&id=5.1%20Use%20of%20Proceeds) The proceeds from the term loans must be used exclusively for financing working capital needs or for general corporate purposes. The funds are explicitly forbidden from being used to repay or restructure existing notes or other borrowed money, with minor exceptions - Loan proceeds are to be used solely for working capital and general corporate purposes[67](index=67&type=chunk) - Proceeds may not be used to repay **Existing Notes**, **New Notes**, or other indebtedness for borrowed money, except for debt owed to **Lenders** or certain asset financing[67](index=67&type=chunk) [Financial Statements and Reporting](index=13&type=section&id=5.3%20Financial%20Statements%3B%20Reports) The Borrower is required to provide Lenders with regular financial reports and other key information. This includes audited annual financial statements within 90 days of fiscal year-end, unaudited quarterly statements within 45 days of quarter-end, and a compliance certificate with each. They must also provide annual projections, key performance indicator reports, and prompt notice of any defaults or material adverse changes - Deliver audited annual financial statements within **90 days** of fiscal year-end[71](index=71&type=chunk) - Deliver unaudited quarterly financial statements within **45 days** of each fiscal quarter-end[71](index=71&type=chunk) - Concurrently with financials, deliver a **Compliance Certificate** and a report on **Key Performance Indicators (KPIs)** including revenue, margins, and cash flow[71](index=71&type=chunk) - Promptly notify **Lenders** of any **Default**, **Event of Default**, or any development that could result in a **Material Adverse Change**[72](index=72&type=chunk) [Formation or Acquisition of Subsidiaries](index=16&type=section&id=5.8%20Formation%20or%20Acquisition%20of%20Subsidiaries) If the Borrower forms or acquires a new subsidiary (that is not an Excluded Subsidiary), it must cause the new subsidiary to become a Guarantor under the agreement. This involves executing a Guaranty Joinder and pledging the subsidiary's equity interests to secure the loan - Any newly formed or acquired subsidiary (unless it is an **Excluded Subsidiary**) must become a **Guarantor** by executing a **Guaranty Joinder**[81](index=81&type=chunk) - The **Loan Party** must pledge the equity interests of the new subsidiary to the **Lenders** as part of the collateral[81](index=81&type=chunk) [Negative Covenants](index=16&type=section&id=6%20NEGATIVE%20COVENANTS) This section details the restrictions on the **Borrower's** activities, including limitations on asset dispositions, business changes, mergers, indebtedness, liens, distributions, investments, and financial covenants [Dispositions](index=16&type=section&id=6.1%20Dispositions) Loan Parties are prohibited from selling, leasing, or otherwise transferring their business or property, except for specific permitted transfers. These exceptions include selling inventory in the ordinary course of business, disposing of obsolete equipment, and other transfers of assets up to a specified aggregate value of $7.5 million, with other specific caps for certain types of sales - General prohibition on asset transfers, with exceptions for ordinary course inventory sales, disposal of worn-out equipment, and transfers between **Loan Parties**[87](index=87&type=chunk) - Specific caps on other dispositions include: up to **$25 million** for assets sold to non-Loan Party subsidiaries, up to **$25 million** for assets held for sale, and a general basket of up to **$7.5 million** for other asset transfers[88](index=88&type=chunk) [Changes in Business and M&A](index=17&type=section&id=6.2%20Changes%20in%20Business%2C%206.3%20Mergers%20or%20Acquisitions) Loan Parties cannot materially change their line of business, liquidate, or dissolve (unless merging into another Loan Party). They are also prohibited from merging with or acquiring other entities, with limited exceptions for mergers between existing subsidiaries or Loan Parties - **Loan Parties** must not engage in any material business other than their current business or reasonably related activities[89](index=89&type=chunk) - Mergers and acquisitions are generally prohibited, except for internal reorganizations where a **Loan Party** is the surviving entity[90](index=90&type=chunk) [Indebtedness and Liens](index=18&type=section&id=6.4%20Indebtedness%2C%206.5%20Liens%20and%20Restrictive%20Agreements) Loan Parties are forbidden from incurring any new debt or creating any liens on their property, except for specifically defined "Permitted Indebtedness" and "Permitted Liens." This ensures that the Lenders' security interest remains first priority and that the company's debt levels are controlled - **Loan Parties** cannot create, incur, or assume any Indebtedness other than **Permitted Indebtedness**[92](index=92&type=chunk) - **Loan Parties** cannot create or allow any Lien on their property except for **Permitted Liens**, ensuring the **Lenders'** security interest remains first priority[93](index=93&type=chunk) [Distributions and Investments](index=18&type=section&id=6.6%20Distributions%3B%20Investments) Loan Parties are restricted from paying dividends, making distributions, or repurchasing stock, with limited exceptions such as dividends payable in stock and small-scale repurchases from former employees. They are also prohibited from making any investments other than those defined as "Permitted Investments" - Dividends and stock repurchases are generally prohibited, with exceptions for non-cash dividends and repurchases from former employees up to **$1 million** per year[94](index=94&type=chunk) - Investments are restricted to a list of "**Permitted Investments**," which includes cash equivalents, certain intercompany loans, and a general basket for other investments[94](index=94&type=chunk) [Financial Covenants](index=19&type=section&id=6.10%20Financial%20Covenants) The Borrower must adhere to two key financial covenants: maintaining a minimum level of liquidity and capping the annual cash interest payments on junior debt Financial Covenants | Covenant | Requirement | | :--- | :--- | | **Minimum Liquidity** | Must not be less than $15 million. | | **Junior Debt Service Cap** | Cash interest payments on junior debt must not exceed $20 million per fiscal year. | [Cash Repayment of Existing Notes](index=20&type=section&id=6.11%20Cash%20Repayment%20of%20Existing%20Notes) The agreement places a specific limit on the amount of cash that can be used to repay the company's Existing Notes at maturity. The cap is set at $60 million plus any cash proceeds from equity issuances. This restriction does not apply to refinancing the notes with new junior or unsecured debt - **Loan Parties** are prohibited from repaying the **Existing Notes** at maturity with cash exceeding the sum of **$60 million** plus proceeds from any equity issuance[100](index=100&type=chunk) [Events of Default](index=20&type=section&id=7%20EVENTS%20OF%20DEFAULT) This section defines the specific occurrences, such as payment failures, covenant breaches, or insolvency, that trigger an **Event of Default**, allowing **Lenders** to exercise their remedies [Summary of Events of Default](index=20&type=section&id=Summary%20of%20Events%20of%20Default) An Event of Default can be triggered by several occurrences, giving Lenders the right to exercise their remedies. Key triggers include failure to make payments (Payment Default), violation of covenants (Covenant Default), insolvency or bankruptcy proceedings, default on other significant debt, large unpaid judgments, material misrepresentations in the loan documents, or a Change of Control of the Borrower - **Payment Default:** Failure to pay principal when due, or interest/other obligations within a 5-business-day grace period[101](index=101&type=chunk) - **Covenant Default:** Violation of any negative covenant (Article 6) or certain affirmative covenants, with cure periods of **15-30 days** for less critical breaches[102](index=102&type=chunk) - **Insolvency:** The company becomes insolvent, begins bankruptcy proceedings, or has such proceedings initiated against it that are not dismissed within **60 days**[102](index=102&type=chunk) - **Other Triggers:** Include default on other debt, large judgments (over **$10 million**), material misrepresentations, failure of the guaranty, or a **Change of Control**[102](index=102&type=chunk)[103](index=103&type=chunk) [Lenders' Rights and Remedies](index=21&type=section&id=8%20LENDERS%27%20RIGHTS%20AND%20REMEDIES) This section outlines the broad actions **Lenders** can take upon an **Event of Default**, including accelerating obligations, ceasing advances, and taking control of collateral [Rights and Remedies](index=21&type=section&id=8.1%20Rights%20and%20Remedies) Upon an Event of Default, Lenders have broad rights and remedies. They can declare all obligations immediately due and payable (acceleration), cease further lending, take control of and sell the Collateral, and exercise any other rights available under the law or the loan documents - Upon an **Event of Default**, **Lenders** can declare all **Obligations** immediately due and payable[104](index=104&type=chunk) - **Lenders** may stop advancing money, take possession of and sell the **Collateral**, and collect directly from **Account Debtors**[104](index=104&type=chunk) - In the case of an insolvency-related default (Section 7.4), all **Obligations** become automatically due and payable without any action from the **Lenders**[104](index=104&type=chunk) [Notices](index=23&type=section&id=9%20NOTICES) This section specifies the formal procedures and designated contacts for all official communications between the **Borrower** and the **Lenders** [Notice Procedures](index=23&type=section&id=9.1%20Notice%20Procedures) This section specifies the official addresses and methods for all formal communications between the parties. Notices must be in writing and can be delivered by mail, electronic mail, or overnight courier to the designated contacts for the Borrower (Beyond Meat, Inc.) and the Lender (Unprocessed Foods, LLC) - All official notices must be in writing and sent to the specified addresses for **Borrower** (in **El Segundo, CA**) and **Lenders** (c/o **Unprocessed Foods, LLC** in **Cheyenne, WY**)[113](index=113&type=chunk)[114](index=114&type=chunk) [Governing Law and Jurisdiction](index=24&type=section&id=10%20GOVERNING%20LAW%2C%20JURISDICTION%2C%20CONSENT%20TO%20SERVICE%20OF%20PROCESS%20AND%20JURY%20TRIAL%20WAIVER) This section establishes **New York** law as the governing legal framework for the agreement and includes an irrevocable waiver of jury trial for all parties [Governing Law and Waiver of Jury Trial](index=24&type=section&id=10.1%20Governing%20Law%3B%2010.2%20Waiver%20of%20Jury%20Trial) The loan documents are governed by the laws of the State of New York. All parties agree to the exclusive jurisdiction of U.S. federal or New York state courts in New York, New York for any disputes. Critically, all parties irrevocably waive their right to a trial by jury for any legal proceeding related to the agreement - The agreement and related documents shall be governed by and construed in accordance with the laws of the **State of New York**[115](index=115&type=chunk) - EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY **JURY** in any legal proceeding arising out of the agreement[117](index=117&type=chunk) [General Provisions](index=24&type=section&id=11%20GENERAL%20PROVISIONS) This section covers standard contractual clauses, including restrictions on assignment, the **Borrower's** obligation to cover **Lenders'** expenses and indemnification, and confidentiality requirements [Key General Provisions](index=25&type=section&id=11.2%20Successors%20and%20Assigns%3B%2011.4%20Expenses%3B%20Indemnification%3B%2011.8%20Confidentiality) This section contains several standard but important clauses. The Borrower cannot assign its rights without Lender consent, while Lenders can only assign to specific affiliates. The Borrower must reimburse Lenders for all reasonable out-of-pocket expenses related to the loan (capped at $250,000 for initial documentation) and indemnify them against losses and claims. Lenders must maintain the confidentiality of information provided by the Borrower, with standard exceptions for legal requirements and sharing with advisors - **Assignment:** **Borrower** may not assign the agreement without **Lender** consent. **Lenders** may only assign to certain **US-based affiliates** not in the same industry as the **Borrower**[121](index=121&type=chunk) - **Expenses & Indemnification:** **Borrower** must pay **Lenders'** reasonable and documented out-of-pocket expenses, with legal fees for documentation capped at **$250 thousand**. **Borrower** also indemnifies **Lenders** from claims arising from the transaction[123](index=123&type=chunk)[125](index=125&type=chunk) - **Confidentiality:** **Lenders** agree to keep information from the **Borrower** confidential, subject to legally required disclosures and sharing with affiliates and advisors who are also bound by confidentiality[132](index=132&type=chunk) [Guaranty](index=28&type=section&id=12%20GUARANTY) This section details the absolute, unconditional, and irrevocable guarantee provided by each **Guarantor** for all of the **Borrower's** obligations, waiving common defenses [Guaranty](index=28&type=section&id=12.1%20Guaranty) Each Guarantor (typically a subsidiary of the Borrower) provides an absolute, unconditional, and irrevocable guarantee for the full payment of all Obligations. This is a guaranty of payment, not collection, meaning Lenders can demand payment directly from a Guarantor without first suing the Borrower. The Guarantors waive numerous defenses, ensuring the guaranty remains enforceable even in cases of bankruptcy or other issues with the Borrower - Each **Guarantor** is jointly and severally liable for all "**Guaranteed Obligations**" as a primary obligor, not merely as a surety[143](index=143&type=chunk) - The guaranty is one of payment, not collection, and is unconditional. **Guarantors** waive most defenses, including those arising from the **Borrower's** insolvency or changes to the underlying obligations[144](index=144&type=chunk)[145](index=145&type=chunk)[148](index=148&type=chunk) - New subsidiaries required to become **Guarantors** will do so by executing a "**Guaranty Joinder**"[162](index=162&type=chunk) [Definitions](index=31&type=section&id=13%20ACCOUNTING%20TERMS%20AND%20OTHER%20DEFINITIONS) This section provides precise definitions for all capitalized terms used throughout the agreement, clarifying key financial, collateral, and operational terms [Key Definitions](index=33&type=section&id=13.3%20Definitions) This section defines all capitalized terms used throughout the agreement. Key definitions include the financial terms that govern the loan, the scope of what constitutes collateral, the specific actions that are permitted or restricted, and the conditions that could lead to a default - **Term Loan Availability Amount:** The total principal amount available to be borrowed, defined as **$100 million**[292](index=292&type=chunk) - **MOIC Amount:** An additional payment required upon prepayment or repayment to ensure **Lenders** achieve at least a **2.00 to 1.00** multiple of invested capital[255](index=255&type=chunk) - **Change of Control:** Defined as any person or group (other than certain creditors) becoming the beneficial owner of more than **50%** of the total voting stock of the **Borrower**[183](index=183&type=chunk) - **Permitted Indebtedness:** A detailed list of debt the company is allowed to incur, including the existing notes, **subordinated debt** up to **$400 million**, and various operational or capital expenditure-related debts within specific limits[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk) - **Subordinated Debt:** Debt that is subordinated in payment and security to the **Obligations** owed to the **Lenders**, with a maturity date at least **90 days** after the loan's maturity date[288](index=288&type=chunk)