Core Viewpoint - Local Bounti Corporation (LOCL) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are crucial for predicting near-term stock price movements [2][4]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling pressure that affects stock prices [4][5]. Recent Developments for Local Bounti - Local Bounti is projected to earn -$7.68 per share for the fiscal year ending December 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for Local Bounti has increased by 13.7%, reflecting a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade of Local Bounti to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) This section presents Local Bounti Corporation's unaudited condensed consolidated financial statements and notes, outlining financial position, performance, and cash flows [Unaudited Condensed Consolidated Balance Sheets](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Unaudited Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $426,774 | $428,035 | | Total Current Assets | $24,947 | $18,823 | | Cash and cash equivalents | $5,286 | $937 | | Restricted cash | $7,885 | $6,529 | | Total Liabilities | $559,496 | $528,535 | | Total Current Liabilities | $19,381 | $55,436 | | Long-term debt, net | $478,330 | $416,577 | | Total Stockholders' Deficit | $(132,722) | $(100,500) | - Total assets decreased slightly from **$428.0 million** at December 31, 2024, to **$426.8 million** at June 30, 2025. Total liabilities increased from **$528.5 million** to **$559.5 million**, while total stockholders' deficit worsened from **$(100.5) million** to **$(132.7) million**[23](index=23&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Unaudited Condensed Consolidated Statements of Operations | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Sales | $12,103 | $9,443 | $23,708 | $17,826 | | Cost of goods sold | $10,631 | $8,092 | $20,775 | $15,689 | | Gross profit | $1,472 | $1,351 | $2,933 | $2,137 | | Total operating expenses | $16,922 | $15,215 | $34,117 | $26,300 | | Loss from operations | $(15,450) | $(13,864) | $(31,184) | $(24,163) | | Net loss | $(21,577) | $(25,267) | $(59,252) | $(49,317) | | Net loss attributable to common stockholders | $(21,577) | $(25,267) | $(59,655) | $(49,317) | | Basic and diluted EPS | $(1.63) | $(3.00) | $(5.40) | $(5.89) | | Weighted average common shares outstanding | 13,270,197 | 8,411,226 | 11,051,720 | 8,368,596 | - Sales increased by **28%** for the three months ended June 30, 2025, and by **33%** for the six months ended June 30, 2025, compared to the respective prior year periods. Despite increased sales, net loss attributable to common stockholders improved by **15%** for the three-month period but worsened by **20%** for the six-month period. Basic and diluted EPS improved for both periods[25](index=25&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' Deficit](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Deficit) Unaudited Condensed Consolidated Statements of Stockholders' Deficit | Metric | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | | :-------------------------------- | :------------------------------- | :----------------------------- | | Total Stockholders' Deficit | $(100,500) | $(132,722) | | Common Stock Shares Outstanding | 8,656,122 | 21,784,277 | | Additional Paid-in Capital | $322,729 | $349,758 | | Accumulated Deficit | $(423,230) | $(482,482) | - The total stockholders' deficit increased from **$(100.5) million** at December 31, 2024, to **$(132.7) million** at June 30, 2025, primarily due to a net loss of **$(59.252) million** for the six months ended June 30, 2025. Common stock shares outstanding significantly increased from **8.66 million** to **21.78 million**, largely due to the conversion of Series A Preferred Stock[27](index=27&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Unaudited Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(18,270) | $(11,084) | | Net cash used in investing activities | $(10,884) | $(59,824) | | 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 end of period | $13,171 | $16,174 | - Net cash used in operating activities increased to **$(18.3) million** for the six months ended June 30, 2025, from **$(11.1) million** in the prior year. Net cash used in investing activities significantly decreased to **$(10.9) million** from **$(59.8) million**. Net cash provided by financing activities decreased to **$34.9 million** from **$70.2 million**, leading to a positive net change in cash of **$5.7 million**, compared to a negative change of **$(0.7) million** in the prior year[28](index=28&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=16&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Business Description](index=16&type=section&id=1.%20Business%20Description) - Local Bounti Corporation, founded in August 2018, is a controlled environment agriculture (CEA) company headquartered in Hamilton, Montana. It specializes in sustainably grown produce, including living lettuce, herbs, and salad kits, utilizing its patented Stack & Flow Technology, a hybrid of vertical and hydroponic greenhouse farming[31](index=31&type=chunk) [2. Summary of Significant Accounting Policies](index=16&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The financial statements are prepared in accordance with U.S. GAAP and include consolidated accounts of the Company and its wholly-owned subsidiaries[32](index=32&type=chunk) - A change in presentation for operating expenses now separately presents 'Sales and marketing' and 'General and administrative' for better clarity, with prior periods recast for comparison[33](index=33&type=chunk)[34](index=34&type=chunk) - The adoption of ASU 2023-09 on Income Taxes for the fiscal year ending December 31, 2025, had no interim impact[35](index=35&type=chunk) [3. Inventory](index=17&type=section&id=3.%20Inventory) Inventory | Inventory Category | June 30, 2025 (in thousands) | December 31, 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 | - Net inventory increased slightly from **$6.814 million** at December 31, 2024, to **$7.028 million** at June 30, 2025. This was driven by an increase in raw materials and finished goods, partially offset by a decrease in production inventory and a reduced inventory allowance[36](index=36&type=chunk) [4. Property and Equipment](index=17&type=section&id=4.%20Property%20and%20Equipment) Property and Equipment | Property and Equipment Category | June 30, 2025 (in thousands) | December 31, 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 | - Net property and equipment decreased from **$370.978 million** at December 31, 2024, to **$365.262 million** at June 30, 2025, primarily due to increased accumulated depreciation. Depreciation expense for the three months ended June 30, 2025, was **$5.0 million**, up from **$3.0 million** in the prior year, and for the six months, it was **$10.0 million**, up from **$5.3 million**[37](index=37&type=chunk) [5. Accrued Liabilities](index=17&type=section&id=5.%20Accrued%20Liabilities) Accrued Liabilities | Accrued Liability Category | June 30, 2025 (in thousands) | December 31, 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 | - Total accrued liabilities significantly decreased from **$18.082 million** at December 31, 2024, to **$9.673 million** at June 30, 2025. This reduction was primarily driven by a substantial decrease in accrued interest from **$15.293 million** to **$4.968 million**[38](index=38&type=chunk) [6. Debt](index=18&type=section&id=6.%20Debt) Debt | Debt Category | June 30, 2025 (in thousands) | December 31, 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 | - On March 31, 2025, the Company restructured its credit agreements with Cargill Financial through the Eleventh Amendment. This resulted in the cancellation of **$139.0 million** of Senior Facility loans and **$58.0 million** of Subordinated Facility loans, reducing the outstanding Senior Facility principal to **$312.0 million**[41](index=41&type=chunk)[42](index=42&type=chunk) - A debt premium of **$181.7 million** (net of unamortized debt discount) was recorded and will be amortized as a reduction to interest expense[43](index=43&type=chunk) - The Eleventh Amendment was deemed a troubled debt restructuring, with no gain recognized on debt cancellation[43](index=43&type=chunk) - The Senior Facility's interest rate is three-month SOFR plus **2.0%** (increasing to **6.0%** after March 31, 2031), with a maturity date of December 31, 2035[44](index=44&type=chunk)[46](index=46&type=chunk) - Financial covenants include minimum Consolidated Interest Coverage Ratio, minimum liquidity, minimum Consolidated Adjusted EBITDA, and a current ratio[48](index=48&type=chunk) [7. Fair Value Measurements](index=19&type=section&id=7.%20Fair%20Value%20Measurements) Fair Value Measurements | Item | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------- | | Money market funds (Level 1) | $11,771 | $7,448 | | Cargill Amended Warrants Liability (Level 3) | $11,412 | $6,403 | - The fair value of the Cargill Amended Warrants Liability increased from **$6.403 million** at December 31, 2024, to **$11.412 million** at June 30, 2025[50](index=50&type=chunk) - This increase is primarily due to the Eleventh Amendment, which reduced the warrant exercise price from **$6.50** to **$4.00** per share and extended the expiration date to March 31, 2033, increasing the warrant's value[51](index=51&type=chunk) - The fair value is determined using a Black-Scholes model[51](index=51&type=chunk) [8. Stockholders' Deficit](index=22&type=section&id=8.%20Stockholders%27%20Deficit) - On March 31, 2025, the Company completed a **$25 million** PIPE Investment, issuing **1,771,586** shares of common stock and **10,728,414** shares of Series A Preferred Stock at **$2.00** per share[53](index=53&type=chunk) - The Series A Preferred Stock was converted to common stock after stockholder approval on June 11, 2025[54](index=54&type=chunk) - The Company recognized a **$0.4 million** deemed dividend to preferred stockholders due to the increase in the Series A Preferred Stock's redemption value[55](index=55&type=chunk) - The Company's 2021 Equity Incentive Plan was amended to increase the number of issuable shares by an additional **2,473,042** shares, effective June 11, 2025, following stockholder approval[56](index=56&type=chunk) [9. Stock-Based Compensation](index=23&type=section&id=9.%20Stock-Based%20Compensation) Stock-Based Compensation | Stock-Based Compensation | Three Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | | :----------------------- | :---------------------------------------------- | :-------------------------------------------- | | Total RSU expense, net | $2,200 | $2,800 | | Total RSA expense | $0 | $100 | - Total RSU expense, net of amounts capitalized, was **$2.2 million** for the three months and **$2.8 million** for the six months ended June 30, 2025, an increase from **$1.5 million** and **$0.3 million** respectively in the prior year[57](index=57&type=chunk) - All Restricted Common Stock Awards (RSAs) were vested by June 30, 2025, with no remaining compensation cost[58](index=58&type=chunk) - As of June 30, 2025, **$7.1 million** in compensation cost related to unvested RSUs remains unrecognized, expected to be recognized over **1.67 years**[58](index=58&type=chunk) [10. Net Loss Per Share](index=23&type=section&id=10.%20Net%20Loss%20Per%20Share) Net Loss Per Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders (in thousands) | $(21,577) | $(25,267) | $(59,655) | $(49,317) | | Weighted average common shares outstanding | 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) | $(5.89) | - Basic and diluted net loss per share were the same for all periods presented as all potentially dilutive securities were anti-dilutive[60](index=60&type=chunk) - The net loss per common share improved to **$(1.63)** for the three months ended June 30, 2025, from **$(3.00)** in the prior year, and to **$(5.40)** for the six months, from **$(5.89)** in the prior year[62](index=62&type=chunk) [11. Segment Reporting](index=25&type=section&id=11.%20Segment%20Reporting) - The Company operates as a single operating and reportable segment, deriving revenue from the production and sale of agricultural produce in the U.S[63](index=63&type=chunk) - The Chief Executive Officer, as the chief operating decision maker (CODM), reviews consolidated financial information to make operating decisions and assess performance[64](index=64&type=chunk) Segment Net Loss | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | $12,103 | $9,443 | $23,708 | $17,826 | | Segment net loss | $(21,577) | $(25,267) | $(59,252) | $(49,317) | [12. Commitments and Contingencies](index=26&type=section&id=12.%20Commitments%20and%20Contingencies) - The Company is involved in various legal proceedings in the ordinary course of business but is currently unaware of any matters expected to have a material adverse effect on its financial position, results of operations, or cash flows[66](index=66&type=chunk) [13. Subsequent Events](index=26&type=section&id=13.%20Subsequent%20Events) - On August 1, 2025, the Company entered into a Convertible Note and Warrant Purchase Agreement with U.S. Bounti, LLC, for a **$10.0 million** convertible note (**6.0%** interest) and a warrant to purchase **550,000** shares at **$0.125** per share[67](index=67&type=chunk) - The note is convertible into up to **4,000,000** common shares at **$2.50** per share, subject to stockholder approval[67](index=67&type=chunk) - Concurrently, on August 1, 2025, the Company executed a Twelfth Amendment to its Senior Credit Agreement with Cargill Financial, resulting in the cancellation of **$10.0 million** of outstanding loans and reducing the principal to **$302.0 million**[68](index=68&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides an analysis of Local Bounti's financial condition, results of operations, business updates, and liquidity for the reported periods [Our Mission and Vision](index=27&type=section&id=Our%20Mission%20and%20Vision) - Local Bounti's mission is to revolutionize agriculture by providing fresh, sustainable, locally grown produce to communities[71](index=71&type=chunk) - Its vision is to reimagine freshness through transformative innovation and technology, minimizing food miles and ensuring environmentally sustainable, nutritious, and consistent non-GMO products[71](index=71&type=chunk) [Company Overview](index=27&type=section&id=Company%20Overview) - Local Bounti is a CEA company producing sustainably grown living lettuce, herbs, and salad kits using patented Stack & Flow Technology[72](index=72&type=chunk) - The company operates six facilities across the U.S. (Montana, California, Georgia, Washington, Texas) and distributes to approximately **13,000** retail locations in **35** states, including major retailers like Walmart and Kroger[72](index=72&type=chunk)[73](index=73&type=chunk) - The company aims to expand production capacity and market reach through new facility construction, existing facility expansion, or acquisitions, while also exploring new product offerings like berries[72](index=72&type=chunk)[74](index=74&type=chunk) - Its technology uses **90%** less water and land than traditional agriculture[74](index=74&type=chunk) [Commercial Facility Update](index=28&type=section&id=Commercial%20Facility%20Update) - The Texas facility reconfiguration for flexible head lettuce and cut product production was completed in late July 2025, now operating at full harvestable capacity with automated harvesting equipment installed[75](index=75&type=chunk) - Tower upgrades are planned for Georgia (late August), Texas (late August), and Washington (early September) facilities to enhance production efficiency and yield capacity[76](index=76&type=chunk) - The company is advancing a seed cost reduction program for Texas and Washington facilities, building on successful implementations in Georgia, with anticipated implementation throughout Q3 and Q4 2025[76](index=76&type=chunk) - Additional annualized cost reduction initiatives of **$2.5 million** to **$3 million** are targeted for action in H2 2025[76](index=76&type=chunk) - Plans for additional capacity expansion across the network, including into the Midwest, remain under review, pending discussions with retailers to optimize facilities for specific products and expand distribution[77](index=77&type=chunk) [Product Development & Distribution](index=28&type=section&id=Product%20Development%20%26%20Distribution) - Local Bounti launched its salad kit line in April 2025 and plans to introduce a new, larger family-sized Caesar salad kit with a multi-national retailer in the Pacific Northwest in Q4[78](index=78&type=chunk) - The company is also expanding its partnership with a leading home delivery service, launching four new private label salad kits in mid-September[78](index=78&type=chunk) - The relationship with Walmart is growing, with expanded commitments to serve **13** Walmart distribution centers with Conventional Living Butter Lettuce from California and Texas facilities, commencing in late April[79](index=79&type=chunk) [Factors Affecting Our Financial Condition and Results of Operations](index=28&type=section&id=Factors%20Affecting%20Our%20Financial%20Condition%20and%20Results%20of%20Operations) - The Company expects to continue expending substantial resources on completing new and expanded facilities, standardizing operating processes, investing in growth opportunities (new products, innovation), and increasing sales and marketing efforts, all of which will impact financial condition and results of operations[80](index=80&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) [Sales](index=32&type=section&id=Sales) Sales | Period | Sales (in thousands) | YoY Change ($) | YoY Change (%) | | :-------------------------------- | :------------------- | :------------- | :------------- | | Three Months Ended June 30, 2025 | $12,103 | $2,660 | 28% | | Three Months Ended June 30, 2024 | $9,443 | | | | Six Months Ended June 30, 2025 | $23,708 | $5,882 | 33% | | Six Months Ended June 30, 2024 | $17,826 | | | - Sales increased due to increased production and growth from the Georgia facility and new sales from the Texas and Washington facilities, which began shipping in Q2 2024[84](index=84&type=chunk) [Cost of Goods Sold](index=32&type=section&id=Cost%20of%20Goods%20Sold) Cost of Goods Sold | Period | Cost of Goods Sold (in thousands) | YoY Change ($) | YoY Change (%) | | :-------------------------------- | :------------------------ | :------------- | :------------- | | Three Months Ended June 30, 2025 | $10,631 | $2,539 | 31% | | Three Months Ended June 30, 2024 | $8,092 | | | | Six Months Ended June 30, 2025 | $20,775 | $5,086 | 32% | | Six Months Ended June 30, 2024 | $15,689 | | | - Cost of goods sold increased primarily due to production ramp-up at the new Texas and Washington facilities and increased production at the Georgia facilities[85](index=85&type=chunk) - The company expects COGS to decrease as a percentage of sales as the business scales[86](index=86&type=chunk) [Research and Development](index=32&type=section&id=Research%20and%20Development) Research and Development Expenses | Period | R&D Expenses (in thousands) | YoY Change ($) | YoY Change (%) | | :-------------------------------- | :-------------------- | :------------- | :------------- | | Three Months Ended June 30, 2025 | $6,485 | $1,966 | 44% | | Three Months Ended June 30, 2024 | $4,519 | | | | Six Months Ended June 30, 2025 | $13,462 | $5,456 | 68% | | Six Months Ended June 30, 2024 | $8,006 | | | - Research and development costs increased significantly, driven by additional development of production, harvesting, and post-harvest packaging techniques[87](index=87&type=chunk) - This includes production surplus costs related to commercial-scale Stack & Flow Technology and processes at the Washington and Texas facilities[88](index=88&type=chunk) [Sales and Marketing](index=32&type=section&id=Sales%20and%20Marketing) Sales and Marketing Expenses | Period | Sales & Marketing Expenses (in thousands) | YoY Change ($) | YoY Change (%) | | :-------------------------------- | :------------------------------ | :------------- | :------------- | | Three Months Ended June 30, 2025 | $2,392 | $296 | 14% | | Three Months Ended June 30, 2024 | $2,096 | | | | Six Months Ended June 30, 2025 | $4,506 | $625 | 16% | | Six Months Ended June 30, 2024 | $3,881 | | | - Sales and marketing costs increased due to higher salaries, commissions, benefits, payroll-related expenses, and increased transportation and delivery costs resulting from higher sales volumes[90](index=90&type=chunk)[91](index=91&type=chunk) [General, and Administrative](index=32&type=section&id=General%2C%20and%20Administrative) General and Administrative Expenses | Period | G&A Expenses (in thousands) | YoY Change ($) | YoY Change (%) | | :-------------------------------- | :-------------------- | :------------- | :------------- | | Three Months Ended June 30, 2025 | $8,045 | $(555) | (6)% | | Three Months Ended June 30, 2024 | $8,600 | | | | Six Months Ended June 30, 2025 | $16,149 | $1,736 | 12% | | Six Months Ended June 30, 2024 | $14,413 | | | - General and administrative expenses decreased by **$0.6 million** for the three months ended June 30, 2025, due to lower salaries, professional fees, and property tax, partially offset by increased stock-based compensation and depreciation[93](index=93&type=chunk) - For the six months, G&A increased by **$1.7 million**, driven by higher stock-based compensation, depreciation, and insurance, partially offset by decreases in salaries, professional fees, and property tax[94](index=94&type=chunk) [Change in Fair Value of Warrant Liability](index=33&type=section&id=Change%20in%20Fair%20Value%20of%20Warrant%20Liability) Change in Fair Value of Warrant Liability | Period | Change in Fair Value of Warrant Liability (in thousands) | YoY Change ($) | YoY Change (%) | | :-------------------------------- | :--------------------------------------- | :------------- | :------------- | | Three Months Ended June 30, 2025 | $(1,499) | $(2,595) | (237)% | | Three Months Ended June 30, 2024 | $1,096 | | | | Six Months Ended June 30, 2025 | $(5,009) | $(1,925) | 62% | | Six Months Ended June 30, 2024 | $(3,084) | | | - The increase in the fair value of warrant liability is primarily due to the Eleventh Amendment, which decreased the per share exercise price of the Original Warrants from **$6.50** to **$4.00** and extended the expiration date[95](index=95&type=chunk) - This change in terms increased the value of the warrants and the related liability[95](index=95&type=chunk) - An additional increase for the three months ended June 30, 2025, was due to a net increase in the closing stock price[95](index=95&type=chunk) [Interest Expense, net](index=33&type=section&id=Interest%20Expense%2C%20net) Interest Expense, net | Period | Interest Expense, net (in thousands) | YoY Change ($) | YoY Change (%) | | :-------------------------------- | :--------------------------- | :------------- | :------------- | | Three Months Ended June 30, 2025 | $(4,602) | $7,898 | (63)% | | Three Months Ended June 30, 2024 | $(12,500) | | | | Six Months Ended June 30, 2025 | $(23,440) | $(1,332) | 6% | | Six Months Ended June 30, 2024 | $(22,108) | | | - Interest expense, net, decreased by **$7.9 million** for the three months ended June 30, 2025, primarily due to a **$10.6 million** decrease in interest expense from the Eleventh Amendment's principal reduction and a **$1.7 million** increase in debt premium amortization[97](index=97&type=chunk) - This was partially offset by a **$4.4 million** decrease in capitalized interest (no interest capitalized in Q2 2025)[97](index=97&type=chunk) - For the six months, interest expense, net, increased by **$1.3 million**, driven by a **$10.1 million** decrease in capitalized interest compared to the prior year (due to Washington and Texas facility construction)[98](index=98&type=chunk) - This increase was partially offset by a **$7.0 million** decrease in interest expense from the Eleventh Amendment and a **$1.7 million** increase in debt premium amortization[98](index=98&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, Local Bounti had an accumulated deficit of **$482.5 million** and cash and cash equivalents and restricted cash of **$13.2 million**[99](index=99&type=chunk) - The principal amount outstanding under the Cargill Financial credit facility was **$312.0 million**, all classified as long-term[100](index=100&type=chunk) - The CEA business is capital-intensive, with primary liquidity sources being cash on hand, product sales, and Cargill Financial credit facilities[101](index=101&type=chunk) - The company expects to incur significant operating costs over the next **12 months** and may need additional debt, equity, or sale leaseback financing, with no assurance of availability or favorable terms[102](index=102&type=chunk) [Cargill Loans](index=35&type=section&id=Cargill%20Loans) - As of June 30, 2025, **$312.0 million** principal was outstanding on the Senior Facility[103](index=103&type=chunk) - The Eleventh Amendment reduced the principal balance and interest rate, and a debt premium will amortize as a reduction to interest expense over the **10-year** term[103](index=103&type=chunk) - Interest payment terms vary: cash payments on **$100 million** (2027-2029), cash or PIK on excess over **$100 million** (2027-2029), cash payments on up to **$200 million** (2030-2031), cash or PIK on excess over **$200 million** (2027-2031)[104](index=104&type=chunk)[105](index=105&type=chunk) - After March 31, 2031, all interest is cash-payable[106](index=106&type=chunk) - Principal repayment of **50%** of free cash flow begins in Q4 2027, with a maturity date of December 31, 2035[106](index=106&type=chunk) [Financing Obligations](index=35&type=section&id=Financing%20Obligations) - The Company has two financing obligations from sale leaseback transactions for the Montana Facility (**$6.9 million**, **20-year** lease) and the California Facilities (**$35 million**, **25-year** lease)[107](index=107&type=chunk) Financing Obligation Payments | Fiscal Year | Financing Obligation Payments (in thousands) | | :---------- | :----------------------------------------- | | Remainder of 2025 | $2,534 | | 2026 | $5,158 | | 2027 | $5,297 | | 2028 | $5,439 | | 2029 | $5,585 | | Thereafter | $115,948 | | Total | $139,961 | [Cash Flow Analysis](index=36&type=section&id=Cash%20Flow%20Analysis) Cash Flow Summary | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(18,270) | $(11,084) | | Net cash used in investing activities | $(10,884) | $(59,824) | | Net cash provided by financing activities | $34,859 | $70,187 | | Cash and cash equivalents and restricted cash at end of period | $13,171 | $16,174 | [Net Cash Used In Operating Activities](index=36&type=section&id=Net%20Cash%20Used%20In%20Operating%20Activities) - Net cash used in operating activities was **$(18.3) million** for the six months ended June 30, 2025, primarily due to a net loss of **$(59.3) million**, partially offset by non-cash adjustments including **$15.3 million** in paid-in-kind interest, **$5.0 million** change in warrant liability, **$10.0 million** depreciation, and **$2.9 million** stock-based compensation[110](index=110&type=chunk) - For the six months ended June 30, 2024, net cash used in operating activities was **$(11.1) million**, driven by a net loss of **$(49.3) million**, partially offset by **$21.7 million** paid-in-kind interest, **$5.3 million** depreciation, **$4.2 million** amortization of debt issuance costs, and **$3.1 million** change in warrant liability[111](index=111&type=chunk) [Net Cash Used In Investing Activities](index=36&type=section&id=Net%20Cash%20Used%20In%20Investing%20Activities) - Net cash used in investing activities decreased significantly to **$(10.9) million** for the six months ended June 30, 2025, from **$(59.8) million** in the prior year, primarily due to reduced purchases of construction materials, services, and equipment for the Washington and Texas facilities[112](index=112&type=chunk) [Net Cash Provided By Financing Activities](index=36&type=section&id=Net%20Cash%20Provided%20By%20Financing%20Activities) - Net cash provided by financing activities was **$34.9 million** for the six months ended June 30, 2025, comprising **$21.4 million** from Series A Preferred Stock issuance, **$10.5 million** from debt issuance, and **$3.5 million** from common stock issuance[113](index=113&type=chunk) - For the six months ended June 30, 2024, net cash provided by financing activities was **$70.2 million**, entirely from net proceeds from debt issuance[113](index=113&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - There have been no changes to the Company's critical accounting policies and estimates from those described in the Annual Report on Form 10-K for the year ended December 31, 2024[114](index=114&type=chunk) [Recent Accounting Pronouncements](index=36&type=section&id=Recent%20Accounting%20Pronouncements) - Information regarding recent accounting pronouncements is incorporated by reference from Note 2 of the Unaudited Condensed Consolidated Financial Statements[115](index=115&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Local Bounti Corporation is not required to provide quantitative and qualitative disclosures about market risk - The Company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[116](index=116&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of Local Bounti's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Limitations on effectiveness of control and procedures](index=38&type=section&id=Limitations%20on%20effectiveness%20of%20control%20and%20procedures) - Management acknowledges that any controls and procedures, regardless of design, can only provide reasonable assurance of achieving desired control objectives due to inherent limitations and resource constraints[118](index=118&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - As of June 30, 2025, management, with the participation of the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level[119](index=119&type=chunk) [Changes in Internal Control over Financial Reporting](index=38&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - There were no changes in internal control over financial reporting during the three months ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[120](index=120&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 12 of the financial statements for information regarding legal proceedings, indicating no material adverse effects are expected - Information regarding legal proceedings is provided in Note 12, Commitments and Contingencies, to the Unaudited Condensed Consolidated Financial Statements[123](index=123&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting the significant influence of concentrated ownership and the company's 'controlled company' status under NYSE rules - Following the conversion of Series A Preferred Stock, U.S. Bounti, LLC (controlled by Charles R. Schwab) holds approximately **55%** of voting power and Mr. Schwab beneficially owns approximately **60%** of outstanding common stock[124](index=124&type=chunk) - This concentrated ownership allows significant influence over decisions, including director elections and corporate transactions, potentially delaying or blocking changes in control[124](index=124&type=chunk) - The Company qualifies as a 'controlled company' under NYSE rules, which provides exemptions from certain corporate governance requirements (e.g., independent directors majority, independent nominating/compensation committees)[125](index=125&type=chunk) - However, the Company does not currently, and does not expect to, rely on these exemptions and complies with all relevant NYSE corporate governance requirements[127](index=127&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities during the reporting period that were not previously disclosed in a Current Report on Form 8-K - No unregistered sales of equity securities occurred during the fiscal quarter ended June 30, 2025, that were not previously reported in a Current Report on Form 8-K[126](index=126&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) This section confirms that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter - No directors or officers informed the Company of the adoption or termination of a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the fiscal quarter ended June 30, 2025[129](index=129&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate documents, credit agreements, warrant amendments, and certifications - The exhibits include corporate documents (Certificate of Incorporation, Bylaws), debt restructuring agreements (Eleventh Amendment to Senior Credit Agreement), warrant amendments, securities purchase agreements, investor rights agreements, support agreements, and certifications (CEO/CFO certifications under Sarbanes-Oxley Act)[131](index=131&type=chunk) - Financial statements formatted in Inline XBRL (Unaudited Condensed Consolidated Statements of Cash Flows, Operations, Balance Sheets, and Notes) are included as Exhibit 101, with the cover page in Inline XBRL as Exhibit 104[131](index=131&type=chunk) [SIGNATURES](index=44&type=section&id=SIGNATURES) This section contains the signature of the authorized representative of Local Bounti Corporation, confirming the due filing of the report - The report is signed by Kathleen Valiasek, President, Chief Executive Officer, and Chief Financial Officer of Local Bounti Corporation, on August 14, 2025[135](index=135&type=chunk)

分组1 - Local Bounti Corporation reported a quarterly loss of $1.63 per share, better than the Zacks Consensus Estimate of a loss of $1.95, and improved from a loss of $3 per share a year ago, resulting in an earnings surprise of +16.41% [1] - The company posted revenues of $12.1 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.6%, but showing an increase from $9.44 million in the same quarter last year [2] - Local Bounti shares have increased approximately 21.3% since the beginning of the year, outperforming the S&P 500's gain of 9.6% [3] 分组2 - The earnings outlook for Local Bounti is mixed, with the current consensus EPS estimate for the coming quarter at -$1.44 on revenues of $13.9 million, and -$8.90 on revenues of $59.7 million for the current fiscal year [7] - The Agriculture - Operations industry, to which Local Bounti belongs, is currently ranked in the bottom 22% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - The second quarter sales increased by 28% to $12.1 million compared to $9.4 million in the prior year period, driven by increased production and sales from the Georgia facility and new facilities in Texas and Washington [14] - Adjusted gross margin percentage improved to approximately 30%, up from 29% in the prior year period, marking the highest quarterly adjusted gross margin in recent quarters [15] - Adjusted EBITDA loss improved to $6.5 million compared to a loss of $8.3 million in the prior year period and $8.8 million in the first quarter [15][16] Business Line Data and Key Metrics Changes - The Texas facility is now operating at full harvestable capacity, allowing for increased revenue generation from both cut and living full head products [37] - Cost reduction initiatives have resulted in approximately $7 million in annualized savings across operating expenses and cost of goods sold, with an additional $2.5 million to $3 million expected in the second half of the year [10][16] Market Data and Key Metrics Changes - The company is experiencing strong momentum in customer discussions, with several significant opportunities progressing that could drive capacity utilization improvements in the Washington and Texas facilities [13] - Retail partners are increasingly recognizing the value proposition of the company's technology, leading to a growing demand for CEA products in the market [13] Company Strategy and Development Direction - The company aims to build a streamlined organization with a focus on sustainable profitability, leveraging its Stack and Flow technology to capture opportunities in sustainable food production [5][6] - The addition of a new Chief Commercial Officer is expected to enhance strategic relationships with existing customers and expand retail presence [12][28] Management's Comments on Operating Environment and Future Outlook - Management expects revenue run rates to ramp up later in 2025, with modest sequential growth anticipated in the third quarter, accelerating into the fourth quarter [19] - Positive adjusted EBITDA is projected to be achieved in early 2026 as the company scales alongside retail deployment schedules [20][21] Other Important Information - The company ended the quarter with cash and cash equivalents of $13.2 million, following a $10 million debt reduction and a $1 million financing through a convertible note [18] - The company is in the planning phases for a Midwest facility, alongside expansions of existing facilities in Georgia, Washington, and Texas [30][31] Q&A Session Summary Question: Can you help us understand how gross margin expands throughout the year? - Management indicated that several factors impact margin, including tower upgrades, pricing, product mix, and cost reductions [25] Question: What are the goals for the new Chief Commercial Officer? - The focus will be on expanding strategic relationships with customers and enhancing the existing commercial team's efforts [28] Question: Is the Midwest facility still in the two-year horizon? - Management confirmed that the Midwest facility is still in planning phases, along with expansions of existing facilities [30] Question: What gives confidence in retailer engagement despite delays in EBITDA targets? - Management highlighted that the Texas facility is largely sold out and that engagement with retailers is at an all-time high, which supports confidence in future growth [41]

[Second Quarter 2025 Financial Results Announcement](index=1&type=section&id=Financial%20Results%20Announcement) [Overview and Highlights](index=1&type=section&id=Overview%20and%20Highlights) Local Bounti reported a 28% Q2 2025 revenue increase, achieved $7 million in H1 annualized cost reductions, and completed a $10 million convertible note financing with debt reduction - Q2 2025 revenue increased by **28%** year-over-year[2](index=2&type=chunk) - Achieved **$7 million** in annualized cost reductions in the first half, with an additional **$2.5 million to $3 million** planned for the second half[2](index=2&type=chunk)[3](index=3&type=chunk) - Completed **$10 million** convertible note financing and reduced **$10 million** in principal debt[2](index=2&type=chunk)[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted disciplined cost management, superior unit economics, projected significant H2 2025 revenue growth, and positive Adjusted EBITDA by early 2026, supported by strategic investor confidence and improved capital structure - CEO and CFO Kathleen Valiasek stated the company achieved approximately **$7 million** in annualized cost reductions in H1 2025, with an additional **$2.5 million to $3 million** planned for H2, projecting positive Adjusted EBITDA by early 2026[3](index=3&type=chunk) - Executive Chairman Craig Hurlbert noted that strategic investors recently injected **$10 million** in capital and reduced debt, strengthening the company's balance sheet at a critical inflection point[3](index=3&type=chunk) - The company is committed to realizing the significant opportunity in sustainable food production through its patented Stack & Flow Technology® and world-class team[3](index=3&type=chunk) [Second Quarter 2025 Financial Summary](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Summary) [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) Q2 2025 saw sales grow 28% to $12.1 million, gross profit at $1.5 million, adjusted gross margin at 30%, and improved net loss and Adjusted EBITDA loss | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Sales | $12.1 Million | $9.4 Million | +28% | | Gross Profit | $1.5 Million | $1.4 Million | +7.1% | | Adjusted Gross Margin | 30% | 29% | +1 pp | | General and Administrative Expenses | $8.0 Million | $8.6 Million | -7.0% | | Adjusted General and Administrative Expenses | $4.3 Million | $6.0 Million | -28.3% | | Net Loss | $(21.6) Million | $(25.3) Million | Improved $3.7 Million | | Adjusted EBITDA Loss | $(6.5) Million | $(8.3) Million | Improved $1.8 Million | - Sales growth was primarily driven by increased production at the Georgia facility and sales contributions from new facilities in Texas and Washington[4](index=4&type=chunk) - Net loss improvement was mainly due to lower net interest expense resulting from debt restructuring activities completed in Q1 2025[8](index=8&type=chunk) [Operational Updates](index=2&type=section&id=Operational%20Updates) [Commercial Facilities Update](index=2&type=section&id=Commercial%20Facilities%20Update) The company completed Texas facility reconfiguration, installed automated harvesting, and is advancing yield and cost reduction initiatives across facilities, with future capacity expansion under review - The Texas facility reconfiguration was completed in late July, fully operational in early August, with automated harvesting equipment installed and running, expected to enhance operational efficiency and profitability by the end of Q3[5](index=5&type=chunk) - Tower upgrades at the Georgia facility are expected to be completed in late August, with similar upgrades planned for Texas and Washington facilities in late August and early September, aiming to improve production efficiency and yield[6](index=6&type=chunk) - Seed cost reduction initiatives at the Texas and Washington facilities are projected for Q3 and Q4 2025, targeting an additional **$2.5 million to $3 million** in annualized cost reductions[6](index=6&type=chunk) - The scope and timing of capacity expansion projects, including Midwest expansion, remain under review to align with retailer discussions and optimize facilities for specific product needs[7](index=7&type=chunk) [Product Development & Distribution](index=3&type=section&id=Product%20Development%20%26%20Distribution) Local Bounti launched new salad kits, expanded partnerships with a major retailer and a home delivery service, and continued growing its distribution with Walmart, including new product launches and increased store presence - Successfully launched a line of salad kits in April 2025, with plans to introduce a family-sized Caesar salad kit with a major multinational retailer in the Pacific Northwest by early Q4[9](index=9&type=chunk) - Expanded partnership with a leading home delivery service partner, launching four new private label salad kits in mid-September, increasing total products with this customer to six[9](index=9&type=chunk) - Partnership with Walmart continues to grow, currently supplying products to **191 stores** and committed to supplying traditional living butter lettuce to **13 Walmart distribution centers**[10](index=10&type=chunk) [Capital Structure](index=3&type=section&id=Capital%20Structure) [Financing and Debt Management](index=3&type=section&id=Financing%20and%20Debt%20Management) As of June 30, 2025, the company held $13.2 million in cash, completed a $10 million convertible note financing, reduced $10 million in principal debt, and restructured $312 million in senior secured debt with favorable terms Cash and Restricted Cash (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $5,286 Thousand | $937 Thousand | | Restricted Cash | $7,885 Thousand | $6,529 Thousand | | **Total Cash and Restricted Cash** | **$13,171 Thousand** | **$7,466 Thousand** | - On August 4, 2025, the company completed **$10 million** in convertible note financing and amended its credit agreement, reducing **$10 million** in principal debt[11](index=11&type=chunk) - In March 2025, completed a **$25 million** equity investment and restructured credit agreements, forming a **$312 million** senior secured debt agreement with no cash interest or principal payments until April 2027, and canceling approximately **$197 million** in debt principal and accrued interest[11](index=11&type=chunk) - Expected to recover approximately **$2.3 million** in cash through equipment lease transactions[11](index=11&type=chunk) [Shares Outstanding](index=3&type=section&id=Shares%20Outstanding) As of June 30, 2025, Local Bounti had approximately 21.8 million common shares, 10.7 million preferred shares, 6.2 million warrant shares, and 3.4 million restricted stock units, totaling 31.4 million fully diluted shares Shares Outstanding (as of June 30, 2025) | Share Type | Quantity (as of June 30, 2025) | | :--- | :--- | | Common Stock | 21.8 Million | | Preferred Stock | 10.7 Million | | Common Stock Underlying Warrants | 6.2 Million | | Restricted Stock Units | 3.4 Million | | **Total Fully Diluted Shares** | **31.4 Million** | [Financial Outlook](index=3&type=section&id=Financial%20Outlook) [Sales and Profitability Projections](index=3&type=section&id=Sales%20and%20Profitability%20Projections) The company projects moderate Q3 sales growth accelerating in Q4, driven by facility contributions and new products, with continued Adjusted EBITDA loss improvement and positive Adjusted EBITDA by early 2026 - Projected moderate quarter-over-quarter sales growth in Q3 2025, accelerating in Q4, driven by Texas facility contributions, Georgia yield enhancements, new product launches, and customer expansion[13](index=13&type=chunk) - Anticipated continuous improvement in Adjusted EBITDA loss rates for Q3 and Q4 2025[14](index=14&type=chunk) - Based on enhanced visibility into customer timelines and commercial rollout plans, the company now expects to achieve positive Adjusted EBITDA by early 2026[3](index=3&type=chunk)[14](index=14&type=chunk) [Corporate Information](index=4&type=section&id=Corporate%20Information) [Conference Call Details](index=4&type=section&id=Conference%20Call%20Details) Local Bounti will host a conference call on August 13, 2025, at 8:00 AM ET to discuss financial results, accessible via dial-in and webcast on its investor relations website - Conference call scheduled for **Wednesday, August 13, 2025, at 8:00 AM ET**[15](index=15&type=chunk) - North American dial-in: **(877) 514-3623**; International dial-in: **+1 (201) 689-8768**; Conference ID: **13754459**[15](index=15&type=chunk) - The call will be webcast and archived via the 'Investors' section of the company's website, localbounti.com[16](index=16&type=chunk) [About Local Bounti](index=4&type=section&id=About%20Local%20Bounti) Local Bounti is a pioneering U.S. indoor agriculture company utilizing patented Stack & Flow Technology® to enhance crop efficiency and sustainability, serving approximately 13,000 retail stores nationwide - Local Bounti is a groundbreaking U.S. indoor agriculture company leveraging its patented **Stack & Flow Technology®** to enhance crop turns, yield, and unit economics[17](index=17&type=chunk) - The company operates advanced indoor growing facilities across the U.S., serving approximately **13,000 retail stores**[17](index=17&type=chunk) - Its sustainable growing methods save **90% of land** and **90% of water** compared to traditional agriculture, aiming to provide healthier, more nutritious, and longer-lasting products[17](index=17&type=chunk) [Legal and Financial Disclosures](index=5&type=section&id=Legal%20and%20Financial%20Disclosures) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding financial performance and operations, subject to risks and uncertainties that may cause actual results to differ, with no obligation for the company to update them - Forward-looking statements cover revenue, sales, costs, profits, product expansion, facility operations, 2025 financial guidance, timing of positive Adjusted EBITDA, and capital costs[18](index=18&type=chunk) - These statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations, including but not limited to going concern ability, obtaining additional capital, generating significant revenue, debt covenant compliance, profitability, growth management, facility construction, supply chain risks, competition, and intellectual property litigation[18](index=18&type=chunk) - The company undertakes no obligation to update or revise any forward-looking statements and cautions readers not to place undue reliance on them[18](index=18&type=chunk) [Non-GAAP Financial Information](index=6&type=section&id=Non-GAAP%20Financial%20Information) This press release includes non-GAAP financial measures like Adjusted EBITDA and Adjusted Gross Profit, used by management for performance assessment, but not as GAAP substitutes - Non-GAAP financial measures include Adjusted EBITDA, Adjusted Gross Profit, Adjusted Gross Margin, and Adjusted General and Administrative Expenses[19](index=19&type=chunk) - Adjusted EBITDA is defined as net loss plus interest expense, depreciation and amortization, adjusted for stock-based compensation, change in fair value of warrant liability, business acquisition and strategic transaction-related costs, loss on disposal of property and equipment, and other non-core items[19](index=19&type=chunk) - These non-GAAP measures are intended to enhance understanding of the company's future prospects and historical performance but are not substitutes for GAAP and should be read in conjunction with GAAP financial statements[20](index=20&type=chunk) [Financial Statements and Reconciliations](index=7&type=section&id=Financial%20Statements%20and%20Reconciliations) [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were $426.8 million, total liabilities increased to $559.5 million, and stockholders' deficit expanded to $132.7 million, reflecting changes in debt and cash Unaudited Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | 5,286 | 937 | | Restricted Cash | 7,885 | 6,529 | | Total Current Assets | 24,947 | 18,823 | | Property and Equipment, Net | 365,262 | 370,978 | | Total Assets | 426,774 | 428,035 | | **Liabilities and Stockholders' Deficit** | | | | Total Current Liabilities | 19,381 | 55,436 | | Long-Term Debt, Net | 478,330 | 416,577 | | Warrant Liability | 11,412 | 6,403 | | Total Liabilities | 559,496 | 528,535 | | Total Stockholders' Deficit | (132,722) | (100,500) | | Total Liabilities and Stockholders' Deficit | 426,774 | 428,035 | [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 sales increased 28% to $12.1 million, gross profit rose 8.9%, and net loss narrowed to $21.577 million, with improved basic and diluted net loss per share Unaudited Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Sales | 12,103 | 9,443 | 23,708 | 17,826 | | Cost of Sales | 10,631 | 8,092 | 20,775 | 15,689 | | Gross Profit | 1,472 | 1,351 | 2,933 | 2,137 | | Total Operating Expenses | 16,922 | 15,215 | 34,117 | 26,300 | | Operating Loss | (15,450) | (13,864) | (31,184) | (24,163) | | Net Loss | (21,577) | (25,267) | (59,252) | (49,317) | | Basic and Diluted Net Loss Per Share | (1.63) | (3.00) | (5.40) | (5.89) | | Weighted Average Common Shares Outstanding | 13,270,197 | 8,411,226 | 11,051,720 | 8,368,596 | Stock-Based Compensation Expense (in thousands) | Expense Category | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Cost of Sales | 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** | **2,260** | **1,648** | **2,850** | **714** | Depreciation and Amortization Expense (in thousands) | Expense Category | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Cost of Sales | 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** | [Reconciliation of GAAP to Non-GAAP Financial Information](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Information) The company provided GAAP to non-GAAP reconciliations for gross profit, G&A expenses, and net loss to Adjusted EBITDA, illustrating the impact of non-core items for clearer operational performance Reconciliation of Gross Profit to Adjusted Gross Profit (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 1,472 | 1,351 | 2,933 | 2,137 | | Add: Depreciation | 2,050 | 1,352 | 3,963 | 2,555 | | Add: Stock-Based Compensation | 75 | 39 | 86 | 60 | | Add: Restructuring and Business Realignment Costs | 56 | — | 56 | — | | **Adjusted Gross Profit** | **3,653** | **2,742** | **7,038** | **4,752** | | **Adjusted Gross Margin %** | **30 %** | **29 %** | **30 %** | **27 %** | Reconciliation of General and Administrative Expenses to Adjusted General and Administrative Expenses (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | General and Administrative | 8,045 | 8,597 | 16,149 | 14,413 | | Less: Stock-Based Compensation | (1,795) | (1,463) | (2,321) | (615) | | Less: Depreciation and Amortization | (1,277) | (1,155) | (2,558) | (2,383) | | Less: Business Acquisition and Strategic Transaction Costs | (16) | — | (112) | (842) | | Less: Intellectual Property and Other Litigation | (254) | — | (565) | — | | Less: Restructuring and Business Realignment Costs | (405) | — | (480) | (289) | | **Adjusted General and Administrative** | **4,298** | **5,979** | **10,113** | **10,284** | Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Loss | (21,577) | (25,267) | (59,252) | (49,317) | | Add: Stock-Based Compensation Expense | 2,260 | 1,648 | 2,850 | 714 | | Add: Interest Expense, Net | 4,602 | 12,500 | 23,440 | 22,108 | | Add: Depreciation and Amortization | 5,856 | 3,889 | 11,736 | 7,117 | | Add: Business Acquisition and Strategic Transaction Costs | 16 | — | 112 | 842 | | Add: Debt Restructuring Transaction Costs | 101 | — | 750 | — | | Add: Intellectual Property and Other Litigation | 254 | — | 565 | — | | Add: Restructuring and Business Realignment Costs | 584 | — | 659 | 289 | | Add: Change in Fair Value of Warrant Liability | 1,499 | (1,096) | 5,009 | 3,084 | | Less: Other Income | (75) | (1) | (1,131) | (38) | | **Adjusted EBITDA** | **(6,480)** | **(8,327)** | **(15,262)** | **(15,201)** |

Core Insights - Local Bounti Corporation reported a 28% year-over-year revenue growth, reaching $12.1 million in the second quarter of 2025, driven by expanded facility operations and strengthened retail relationships [9][10] - The company achieved $7 million in annualized expense reductions in the first half of 2025, with an additional $2.5 to $3 million in cost optimization initiatives planned for the second half of 2025 [2][6] - Local Bounti closed a $10 million convertible note and amended its credit facility, resulting in a $10 million principal debt reduction, enhancing its capital structure [12] Financial Performance - Sales increased to $12.1 million in Q2 2025 from $9.4 million in the prior year, attributed to increased production and sales from new facilities in Texas and Washington [9] - Gross profit for Q2 2025 was $1.5 million, with an adjusted gross margin of approximately 30%, up from 29% in the prior year [9][28] - The net loss narrowed to $21.6 million in Q2 2025 from $25.3 million in the same period last year, primarily due to lower net interest expenses [9] Cost Management and Efficiency - The company has implemented significant cost reduction initiatives, including tower upgrades and seed cost reduction programs, expected to enhance production efficiency and yield capacity [6][7] - General and administrative expenses decreased to $8.0 million in Q2 2025 from $8.6 million in the prior year, with adjusted general and administrative expenses down to $4.3 million [9][30] Strategic Developments - Local Bounti is expanding its product offerings, including a new salad kit line launched in April 2025 and plans for a family-sized Caesar salad kit in Q4 2025 [8] - The company is building additional capacity across its facilities to meet growing demand from retail partners, with ongoing discussions to optimize these expansions [7] Future Outlook - The company anticipates modest sequential sales growth in Q3 2025, followed by acceleration in Q4 2025, supported by improved operational efficiencies and new product introductions [14][15] - Local Bounti expects to achieve positive adjusted EBITDA in early 2026, as it scales alongside retail deployment schedules [15]

Core Insights - Local Bounti Corporation has appointed Dane Almassy as Chief Commercial Officer, effective August 25, 2025, to enhance its leadership team and drive growth [1][2][3] Company Overview - Local Bounti is an innovative indoor agriculture company utilizing patented Stack & Flow Technology® to improve crop yields and unit economics, operating advanced facilities across the U.S. and servicing approximately 13,000 retail locations [5] - The company emphasizes sustainable practices, using 90% less land and water compared to conventional farming, with a mission to provide fresh, locally grown produce [5] Leadership and Experience - Dane Almassy brings over 20 years of experience in the fresh produce and controlled environment agriculture (CEA) sectors, having held senior roles at PepsiCo, WhiteWave Foods, and AeroFarms [2][3] - His expertise includes strategic growth, operational efficiency, and brand development, which will be instrumental in expanding Local Bounti's distribution and customer relationships [2][3] Strategic Goals - Almassy aims to leverage his experience to deepen relationships with strategic retail customers and drive long-term growth, aligning with Local Bounti's commitment to quality and innovation [2][3]

Core Viewpoint - Local Bounti Corporation is set to release its financial results for the fiscal second quarter on August 13, 2025, indicating ongoing developments in the indoor agriculture sector [1]. Financial Results Announcement - The financial results will be announced before the market opens on August 13, 2025 [1]. - A conference call will be held at 8:00 a.m. ET on the same day to discuss the results and business updates [2]. Conference Call Details - The conference call will be accessible to North American listeners at (877) 514-3623 and international listeners at +1 (201) 689-8768 [2]. - The call will also be available via live webcast on the Company's website and archived for later access [3]. - Telephonic playback will be available until August 20, 2025, with specific dial-in numbers provided for North American and international listeners [3]. Company Overview - Local Bounti is innovating indoor farming through its patented Stack & Flow Technology®, which enhances crop turns and improves unit economics [4]. - The company operates advanced indoor growing facilities across the U.S., servicing approximately 13,000 retail doors [4]. - Local Bounti's sustainable methods use 90% less land and water compared to conventional farming, aligning with its mission to provide fresh, sustainable produce [4].

Core Viewpoint - Local Bounti Corporation has secured $10 million through a convertible note and amended its credit facility, reducing its principal debt by the same amount, which strengthens its financial position for future operations [1][2]. Financial Summary - The company issued a convertible note with a 5-year maturity and a 6.0% annual interest rate, payable in kind [2]. - As part of the transaction, Local Bounti will issue a warrant to purchase up to 550,000 shares of common stock at an exercise price of $0.125 per share [2]. Company Overview - Local Bounti is innovating indoor farming with its patented Stack & Flow Technology®, which enhances crop turns and improves unit economics [3]. - The company operates advanced indoor growing facilities across the U.S., servicing approximately 13,000 retail doors [3]. - Local Bounti's sustainable methods use 90% less land and 90% less water compared to conventional farming, aiming to revolutionize agriculture and ensure access to fresh, sustainable produce [3].

Financial Performance - Sales increased by $3.2 million to $11.6 million for the three months ended March 31, 2025, representing a 38% increase compared to the same period in 2024[78] - Gross profit rose to $1.5 million, an 86% increase from $786,000 in the prior year[78] - The net loss for the three months ended March 31, 2025, was $37.7 million, a 57% increase from the net loss of $24.1 million in the same period in 2024[78] - Interest expense increased by $9.2 million for the three months ended March 31, 2025, primarily due to a $3.4 million increase in the principal amount outstanding on the Senior Facility and a $5.6 million decrease in capitalized interest compared to the prior year[90] - As of March 31, 2025, the company had an accumulated deficit of $460.9 million and cash and cash equivalents of $28.4 million[91] - Net cash used in operating activities was $9.6 million for the three months ended March 31, 2025, due to a net loss of $37.7 million[102] - Net cash provided by financing activities was $35.5 million for the three months ended March 31, 2025, including $21.5 million from the issuance of Series A Preferred Stock[105] - Net cash used in investing activities was $5.0 million for the three months ended March 31, 2025, primarily for purchases related to the Washington and Texas facilities[104] - The company has incurred losses and generated negative cash flows from operations since inception, indicating ongoing financial challenges[91] Operational Developments - The company operates six facilities, with significant production increases from the Georgia, Texas, and Washington facilities[79] - The Texas facility is undergoing a reconfiguration to produce both head lettuce and cut products, expected to begin commercial production in Q2 2025[72] - The company plans to expand its product offerings to include new varieties of fresh greens, herbs, and berries[71] - The company has secured an offtake agreement with Sam's Club for leafy greens production through September 2028[70] Sustainability Initiatives - The company utilizes 90% less water and land compared to traditional agriculture, enhancing sustainability[69] Financial Obligations - The principal amount due under the credit facility with Cargill Financial totaled $312.0 million, with various financial covenants that could risk default if not complied with[92] - Future aggregate financing obligation payments total $141.2 million, with significant payments due in the years following 2025[100] - The maturity date of the Senior Facility is December 31, 2035, with specific repayment terms starting from 2027[98] - The company expects interest expense to decrease by at least 50% following the Eleventh Amendment to the Senior Facility with Cargill Financial, which resulted in a lower principal balance and reduced interest rate[95] Expense Trends - Research and development expenses surged by $3.5 million to $7.0 million, a 100% increase year-over-year[78] - General and administrative expenses increased by $2.3 million to $8.1 million, a 39% rise compared to the previous year[78]