Local Bounti Corporation (NYSE:LOCL) Q2 2023 Earnings Conference Call August 9, 2023 8:00 AM ET Company Participants Jeff Sonnek - SVP, ICR Anna Fabrega - CEO Kathleen Valiasek - CFO Conference Call Participants Kristen Owen - Oppenheimer Ben Klieve - Lake Street Capital Markets Brian Wright - ROTH MKM Operator Good morning, and welcome to the Local Bounti's Second Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation there will be an opportunity t ...

Part I – FINANCIAL INFORMATION [Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) The unaudited financial statements show a significant sales increase from the Pete's acquisition, but the company continues to face net losses and negative operating cash flow [Unaudited Condensed Consolidated Balance Sheets](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Total assets and liabilities increased, driven by property additions and new debt, while cash and stockholders' equity significantly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $7,468 | $13,666 | | Property and equipment, net | $196,907 | $157,844 | | Total assets | $298,629 | $278,740 | | **Liabilities & Equity** | | | | Accounts payable | $21,849 | $13,757 | | Long-term debt, net | $122,417 | $119,814 | | Warrant liability | $25,697 | $0 | | Total liabilities | $194,462 | $157,407 | | Total stockholders' equity | $104,167 | $121,333 | [Unaudited Condensed Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Sales surged due to the Pete's acquisition, and the net loss narrowed slightly despite the revenue growth Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Sales | $6,698 | $282 | | Gross profit | $279 | $48 | | Loss from operations | $(19,278) | $(24,159) | | Net loss | $(23,527) | $(25,772) | | Basic and diluted EPS | $(0.23) | $(0.32) | - Stock-based compensation expense **decreased significantly to $6.0 million** in Q1 2023 from $11.0 million in Q1 2022, primarily impacting selling, general and administrative expenses[23](index=23&type=chunk) - Depreciation and amortization expense **increased substantially to $3.5 million** in Q1 2023 from $0.5 million in Q1 2022, reflecting asset additions from acquisitions and facility construction[23](index=23&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company experienced a net cash decrease of $17.5 million, driven by significant investments in property and equipment, partially offset by financing activities Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(7,830) | $(10,014) | | Net cash used in investing activities | $(32,685) | $(14,673) | | Net cash provided by financing activities | $23,045 | $0 | | **Net decrease in cash** | **$(17,470)** | **$(24,687)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes highlight significant financing activities, including an expanded credit facility and warrant issuance, and key subsequent events like a sale-leaseback transaction - The company's debt agreements with Cargill Financial were amended multiple times, culminating in the Sixth Amendment on March 28, 2023, which expanded the total facilities from $170 million to **up to $280 million** to fund construction in Georgia, Texas, and Washington[43](index=43&type=chunk) - In consideration for the expanded credit facility, Local Bounti issued Cargill Financial **69.6 million warrants** with a $1.00 exercise price, recorded as a **$25.7 million warrant liability**[43](index=43&type=chunk)[44](index=44&type=chunk) - On April 27, 2023, a subsidiary of the company completed a **$35 million sale and leaseback transaction** for its Carpinteria and Oxnard, California facilities with a 25-year initial lease term[61](index=61&type=chunk)[63](index=63&type=chunk) - Stockholders approved an amendment to authorize a **reverse stock split** at a ratio between 1-for-2 and 1-for-25, to be effected at the board's discretion before June 30, 2024[59](index=59&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the sales increase from the Pete's acquisition, ongoing facility expansion, and recent financing activities to fund growth plans [Company Overview and Expansion](index=24&type=section&id=Company%20Overview%20and%20Expansion) The company is expanding its production capacity through new facility construction in Georgia, Texas, and Washington, following the Pete's acquisition - The company is expanding its Georgia facility, with 'Stack' zone integration expected to be completed in Q4 2023, adding approximately **40% incremental revenue-generating capacity**[79](index=79&type=chunk) - Construction is underway for a new six-acre facility in Mount Pleasant, Texas, expected to **commence operations in Q4 2023**[80](index=80&type=chunk) - The Pasco, Washington facility is expected to **begin operations in Q1 2024**, a slight delay to stagger commissioning with the Texas facility[81](index=81&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Q1 2023 saw a $6.4 million sales increase from the Pete's acquisition and a $6.3 million decrease in SG&A expenses due to lower stock compensation Comparison of Operations (in thousands) | Line Item | Q1 2023 | Q1 2022 | Change | | :--- | :--- | :--- | :--- | | Sales | $6,698 | $282 | $6,416 | | Cost of goods sold | $6,419 | $234 | $6,185 | | Research and development | $3,576 | $1,948 | $1,628 | | Selling, general and administrative | $15,981 | $22,259 | $(6,278) | | Loss from operations | $(19,278) | $(24,159) | $4,881 | | Net loss | $(23,527) | $(25,772) | $2,245 | - The increase in sales was primarily due to the acquisition of Pete's at the beginning of April 2022, which added **more than 10,000 retail locations**[89](index=89&type=chunk) - SG&A expenses decreased mainly due to a **$5.4 million decrease in stock-based compensation** and a $3.9 million decrease in transaction costs related to the Pete's acquisition in the prior year[95](index=95&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Despite a history of losses, management believes current cash, sales, and an expanded credit facility are sufficient for the next 12 months - As of March 31, 2023, the company had an **accumulated deficit of $202.8 million** and cash and cash equivalents of **$7.5 million**[100](index=100&type=chunk) - The credit facility with Cargill Financial provides for advances of **up to $280.0 million** (plus interest and fees paid in kind) to fund operations and construction[104](index=104&type=chunk) - Management believes current cash, cash flow from operations, proceeds from the sale leaseback transaction, and borrowing capacity are **sufficient to fund cash requirements for the next 12 months**[103](index=103&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from providing market risk disclosures as it qualifies as a smaller reporting company - As a **smaller reporting company**, Local Bounti is exempt from providing quantitative and qualitative disclosures about market risk[113](index=113&type=chunk) [Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - Management concluded that as of March 31, 2023, the company's **disclosure controls and procedures were effective** at the reasonable assurance level[116](index=116&type=chunk) - **No changes in internal control over financial reporting** occurred during the three months ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[117](index=117&type=chunk) Part II – OTHER INFORMATION [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is not aware of any legal proceedings expected to have a material adverse effect on its financials - Management is not aware of any legal matters that are expected to have a **material adverse effect** on the company[58](index=58&type=chunk)[120](index=120&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor was added regarding the proposed Reverse Stock Split and its potential negative impacts on stock price and liquidity - A new risk factor was disclosed, stating there is **no assurance that the proposed Reverse Stock Split will increase the stock price** or improve marketability and liquidity, and it could be viewed negatively by investors[121](index=121&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No previously unreported unregistered sales of equity securities occurred during the first quarter of 2023 - The company reported **no unregistered sales of equity securities** during the period covered by the report that were not previously disclosed[122](index=122&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including credit agreement amendments and required officer certifications - Key exhibits filed include the Third, Fourth, Fifth, and Sixth Amendments to the Credit Agreements with Cargill Financial, along with **required CEO and CFO certifications**[124](index=124&type=chunk)

Part I [Business](index=6&type=section&id=Item%201.%20Business) Local Bounti is a Controlled Environment Agriculture (CEA) company specializing in sustainably grown produce using its proprietary Stack & Flow Technology™, significantly expanding operations and distribution through the April 2022 Pete's acquisition - Local Bounti is a Controlled Environment Agriculture (CEA) company using its patent-pending Stack & Flow Technology™, a hybrid of vertical and greenhouse farming, to grow produce sustainably[22](index=22&type=chunk) - On April 4, 2022, the company acquired Pete's, significantly increasing its footprint to four operating facilities (two in CA, one in GA, one in MT) and expanding distribution to over 10,000 retail locations across 35 U.S. states and Canadian provinces[24](index=24&type=chunk) - The company's primary products include living butter lettuce, for which it holds an approximate **80% share** of the CEA market in the Western U.S., as well as packaged salad and cress[24](index=24&type=chunk) - Local Bounti's farming methods use **90% less water and land** compared to traditional agriculture and significantly reduce the need for pesticides and herbicides[22](index=22&type=chunk)[34](index=34&type=chunk) [Company Overview](index=6&type=section&id=Item%201.%20Business%23Company%20Overview) Local Bounti, founded in 2018, is a CEA company utilizing proprietary Stack & Flow Technology™ for sustainable produce, significantly expanding its operations and distribution network through the April 2022 acquisition of Pete's - Utilizes a patent-pending hybrid process called Stack & Flow Technology™, which combines vertical farming for early plant growth with greenhouse farming for the final grow-out phase[22](index=22&type=chunk) - Acquired California-based Pete's on April 4, 2022, adding three greenhouse facilities (two in CA, one in GA) and expanding distribution to over 10,000 retail locations[24](index=24&type=chunk) - Key retail partners include Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, and AmazonFresh[24](index=24&type=chunk) [Market Overview](index=8&type=section&id=Item%201.%20Business%23Market%20Overview) The company operates in a market driven by global food demand, shrinking resources, and consumer preference for sustainable produce, with the U.S. vegetable and herb market projected to reach **$75 billion by 2025** - The global population is projected to need **70% more food by 2050**, while the world has lost over **30% of its arable land** in the last 40 years[36](index=36&type=chunk) - The U.S. market for vegetables and fresh-cut herbs is projected to grow **15% annually**, reaching **$75 billion by 2025**[37](index=37&type=chunk) - CEA addresses market needs by using up to **90% less water and land**, reducing the need for pesticides, and enabling local production to shorten supply chains[41](index=41&type=chunk) [Our Solution and Facilities](index=14&type=section&id=Item%201.%20Business%23Our%20Solution%20and%20Facilities) Local Bounti's core solution is its Farm of the Future™ utilizing patent-pending Stack & Flow Technology™ to optimize unit economics, operating four facilities and constructing new ones in Texas and Washington - The company's proprietary Stack & Flow Technology™ combines vertical farming in a nursery with hydroponic greenhouses, aiming for lower capex, opex, and higher yields[58](index=58&type=chunk) Facility Status | Facility | Location | Status | Notes | | :--- | :--- | :--- | :--- | | Montana Facility | Hamilton, MT | Operational | Expanded in 2021 | | Carpinteria Facility | Carpinteria, CA | Operational | Acquired via Pete's | | Oxnard Facility | Oxnard, CA | Operational | Acquired via Pete's | | Georgia Facility | Byron, GA | Operational | Began operations mid-2022; undergoing expansion and Stack & Flow retrofit | | Texas Facility | Mount Pleasant, TX | Under Construction | Expected completion Q4 2023 | | Washington Facility | Pasco, WA | Under Construction | Expected completion Q1 2024 | [Growth Strategies](index=18&type=section&id=Item%201.%20Business%23Growth%20Strategies) The company's growth strategies focus on improving unit economics, scaling capacity, expanding product lines and sales channels, and investing in R&D, including plant genetics and automation - Improve unit economics through technology, computer vision, AI, and robotics[79](index=79&type=chunk) - Scale the platform by building or acquiring new facilities near population centers, using modular designs for rapid deployment[80](index=80&type=chunk) - Expand product line beyond the current **25 SKUs** to include items like spinach, kale, and arugula[82](index=82&type=chunk) - Develop new sales channels, including potential co-location with distributors and international licensing opportunities[83](index=83&type=chunk) [ESG and Sustainability](index=19&type=section&id=Item%201.%20Business%23ESG%20and%20Sustainability) Sustainability is central to Local Bounti's business, addressing 12 U.N. Sustainable Development Goals through commitments to water stewardship, carbon neutrality by 2050, sustainable packaging, and social and governance initiatives - The company's business model directly addresses **12 of the 17 U.N. Sustainable Development Goals**[34](index=34&type=chunk)[50](index=50&type=chunk) - Key ESG commitments approved by the Board include: - **Water Stewardship:** Monitor, reduce, and reuse water - **Climate Protection:** Adopt a science-based target (SBT) in 2023 and be carbon neutral by 2050 - **Sustainable Packaging:** Exceed **30% post-consumer or bio-based content by 2025**[92](index=92&type=chunk)[98](index=98&type=chunk) - Identified four primary climate-related issues: Weather (opportunity), Water (risk/opportunity), Energy (risk), and Supply Chain (risk)[99](index=99&type=chunk) [Competition](index=21&type=section&id=Item%201.%20Business%23Competition) Local Bounti competes with traditional and high-tech greenhouse operators, as well as vertical farming companies, believing its hybrid Stack & Flow Technology™ provides a competitive yield advantage - Competes with traditional greenhouse operators (e.g., Mastronardi Produce), high-tech greenhouse companies (e.g., AppHarvest, Bright Farms), and vertical farming operators (e.g., AeroFarms, Bowery Farming)[101](index=101&type=chunk)[102](index=102&type=chunk) - Believes its hybrid Stack & Flow Technology™ offers a competitive advantage, yielding **1.5 to 2.0 times more** than comparable greenhouse farms[103](index=103&type=chunk) [Intellectual Property](index=21&type=section&id=Item%201.%20Business%23Intellectual%20Property) The company holds significant intellectual property, including 18 patents submitted to the USPTO as of December 2022, covering its core Stack & Flow Technology™ and various trademarks - As of December 2022, Local Bounti has **18 total patents** submitted to the USPTO, including seven non-provisional and eleven provisional patents[110](index=110&type=chunk) - A patent application for its core "Stack & Flow Technology™" was submitted in August 2020[110](index=110&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a history of losses, capital intensity, reliance on limited facilities, construction and integration challenges, competition, crop diseases, and debt covenants with Cargill Financial - The company is an early-stage company with a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future[125](index=125&type=chunk)[129](index=129&type=chunk) - The business is capital-intensive and may require additional financing, which, if not obtained, could force the company to delay or reduce operations and growth[125](index=125&type=chunk)[132](index=132&type=chunk) - The company's credit facilities with Cargill Financial are secured by all company assets, including intellectual property, where an uncured event of default could lead to foreclosure on all assets[125](index=125&type=chunk)[195](index=195&type=chunk) - Significant risks are associated with integrating the acquired Pete's business, including assimilating different business strategies, technologies, and personnel, which may divert management attention[126](index=126&type=chunk)[204](index=204&type=chunk) [Unresolved Staff Comments](index=53&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - None[273](index=273&type=chunk) [Properties](index=53&type=section&id=Item%202.%20Properties) As of December 31, 2022, Local Bounti owns and leases several production and R&D properties, including facilities in Montana, California, and Georgia, with new construction in Texas and Washington, and a planned **$35 million** sale-leaseback for California facilities Key Properties as of December 31, 2022 | Facility Type/Use | Location | Owned/Leased | Status | | :--- | :--- | :--- | :--- | | Hamilton Production Facility | Hamilton, MT | Leased | Operational | | Carpinteria Production Facility | Carpinteria, CA | Owned | Operational | | Oxnard Production Facility | Oxnard, CA | Owned | Operational | | Georgia Production Facility | Byron, GA | Owned | Operational | | Texas Production Facility | Mount Pleasant, TX | Owned | Under Construction (Est. Q4 2023) | | Pasco Production Facility | Pasco, WA | Owned | Under Construction (Est. Q1 2024) | - On March 28, 2023, the company entered into a Purchase and Sale Agreement for a **$35 million** sale and leaseback transaction for its Carpinteria and Oxnard, CA facilities, expected to close in Q2 2023[275](index=275&type=chunk) [Legal Proceedings](index=54&type=section&id=Item%203.%20Legal%20Proceedings) The company states that it is not currently a party to any legal proceedings that would have a material adverse effect on its business, financial condition, or results of operations - The company is not presently a party to any material legal proceedings[277](index=277&type=chunk) [Mine Safety Disclosures](index=54&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[278](index=278&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=55&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock and warrants trade on the NYSE, and it has never paid cash dividends nor intends to, with dividend payments restricted by credit agreements - Common stock trades on the NYSE under the symbol "LOCL"; warrants trade under "LOCL.WS"[281](index=281&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future, with its ability to do so also restricted by its debt agreements[283](index=283&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2022, sales surged to **$19.5 million** due to the Pete's acquisition, though net loss widened to **$111.1 million** from increased operating expenses, while liquidity is managed through cash, operations, and an expanded Cargill credit facility Financial Highlights (2022 vs 2021) | Metric | 2022 (in thousands) | 2021 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Sales | $19,474 | $638 | $18,836 | | Gross Profit | $2,215 | $206 | $2,009 | | Loss from Operations | $(94,526) | $(44,717) | $(49,809) | | Net Loss | $(111,071) | $(56,093) | $(54,978) | - The significant increase in sales was primarily due to the acquisition of Pete's in April 2022[311](index=311&type=chunk) - The company is expanding its Georgia facility and constructing new facilities in Texas (expected completion Q4 2023) and Washington (expected completion Q1 2024)[298](index=298&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk) - In March 2023, the credit facility with Cargill Financial was expanded from **$170 million** to up to **$280 million**, and the company issued Cargill warrants to purchase up to **69.6 million shares** at **$1.00 per share**[302](index=302&type=chunk) [Results of Operations (FY 2022 vs. FY 2021)](index=59&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Results%20of%20Operations) For FY2022, sales increased to **$19.5 million** due to the Pete's acquisition, but operating expenses rose significantly, leading to an operating loss of **$94.5 million** and a net loss of **$111.1 million** - **Sales:** Increased by **$18.8 million** to **$19.5 million**, primarily due to the Pete's acquisition[311](index=311&type=chunk) - **Cost of Goods Sold:** Increased by **$16.8 million**, driven by higher sales volume and a **$1.0 million** negative impact from the fair value step-up of acquired inventory from Pete's[313](index=313&type=chunk) - **Research & Development:** Increased by **$10.6 million** due to greater investment in personnel, materials, and facility capacity for product and process development[316](index=316&type=chunk) - **Selling, General & Administrative:** Increased by **$41.2 million**, primarily due to a **$20.2 million** increase in stock-based compensation, a **$6.2 million** increase in employee-related costs, and a **$5.0 million** increase in amortization of intangibles[318](index=318&type=chunk) - **Interest Expense, net:** Increased by **$10.1 million**, mainly due to higher principal amounts outstanding on debt facilities with Cargill Financial[323](index=323&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Liquidity%20and%20Capital%20Resources) As of December 31, 2022, the company held **$24.9 million** in cash with **$140.9 million** in outstanding debt to Cargill Financial, and management believes current liquidity and expected proceeds are sufficient for the next 12 months Liquidity Position as of Dec 31, 2022 | Metric | Amount (in thousands) | | :--- | :--- | | Cash and cash equivalents | $13,666 | | Restricted cash and cash equivalents | $11,272 | | **Total Cash** | **$24,938** | | Accumulated Deficit | $(179,313) | - As of Dec 31, 2022, the principal amount due under credit facilities with Cargill Financial totaled **$140.9 million**[326](index=326&type=chunk) - Management believes current cash, expected proceeds from a sale-leaseback, and borrowing capacity are sufficient to fund operations for at least 12 months from the financial statement issuance date[328](index=328&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is a smaller reporting company and is therefore not required to provide the information for this item - As a smaller reporting company, Local Bounti is not required to provide this information[341](index=341&type=chunk) [Financial Statements and Supplementary Data](index=66&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited consolidated financial statements for FY2022 and FY2021 show total assets increased to **$278.7 million** and a net loss of **$111.1 million** in 2022, with notes detailing key policies, the Pete's acquisition, debt, and related party transactions [Report of Independent Registered Public Accounting Firm](index=67&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The independent registered public accounting firm, WithumSmith+Brown, PC, issued an unqualified opinion on the company's consolidated financial statements for the years ended December 31, 2022 and 2021 - WithumSmith+Brown, PC issued an unqualified audit opinion on the company's consolidated financial statements for the years ended December 31, 2022 and 2021[345](index=345&type=chunk) [Consolidated Balance Sheets](index=68&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Consolidated%20Balance%20Sheets) As of December 31, 2022, total assets increased to **$278.7 million** from **$143.9 million** in 2021, driven by the Pete's acquisition, while total liabilities rose to **$157.4 million** and stockholders' equity to **$121.3 million** Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Total Current Assets | $34,104 | $105,508 | | Property and equipment, net | $157,844 | $37,350 | | Goodwill | $38,481 | $0 | | **Total Assets** | **$278,740** | **$143,930** | | Total Current Liabilities | $23,267 | $17,968 | | Long-term debt, net | $119,814 | $11,199 | | **Total Liabilities** | **$157,407** | **$42,247** | | **Total Stockholders' Equity** | **$121,333** | **$101,683** | [Consolidated Statements of Operations](index=69&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Consolidated%20Statements%20of%20Operations) For FY2022, sales were **$19.5 million**, resulting in a gross profit of **$2.2 million**, an operating loss of **$94.5 million**, and a net loss of **$111.1 million**, or **($1.27)** per share Consolidated Statement of Operations (in thousands) | Account | Year Ended Dec 31, 2022 | Year Ended Dec 31, 2021 | | :--- | :--- | :--- | | Sales | $19,474 | $638 | | Gross Profit | $2,215 | $206 | | Loss from Operations | $(94,526) | $(44,717) | | Net Loss | $(111,071) | $(56,093) | | Net Loss per Share (Basic & Diluted) | $(1.27) | $(1.06) | - Stock-based compensation expense was **$39.2 million** in 2022, compared to **$17.9 million** in 2021[354](index=354&type=chunk) [Notes to Consolidated Financial Statements](index=75&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data%23Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, confirm going concern, outline the Pete's acquisition for **$92.5 million** cash and **5.65 million** shares, describe Cargill debt amendments, stock-based compensation, related party transactions, and subsequent events including a **$35.0 million** sale-leaseback - **Going Concern (Note 2):** Management concluded that its plans, including cash on hand, expected proceeds from a sale-leaseback, and the amended credit facility, are sufficient to fund operations for at least twelve months, alleviating substantial doubt about its ability to continue as a going concern[368](index=368&type=chunk) - **Pete's Acquisition (Note 3):** The acquisition on April 4, 2022, involved **$92.5 million** in cash and **5,654,600 shares** of common stock, with preliminary allocation resulting in **$38.5 million** of goodwill and **$52.3 million** of intangible assets (customer relationships, trade name, non-compete agreements)[418](index=418&type=chunk)[421](index=421&type=chunk) - **Debt (Note 7):** The company amended its credit agreements with Cargill Financial multiple times in 2022, resulting in a reduced total facility of **$170.0 million** and an increased interest rate, with **$140.9 million** outstanding as of Dec 31, 2022[438](index=438&type=chunk)[440](index=440&type=chunk) - **Subsequent Events (Note 17):** In March 2023, the company expanded its credit facility with Cargill to up to **$280 million** and entered into an agreement for a **~$35.0 million** sale-leaseback of its two California facilities[497](index=497&type=chunk)[498](index=498&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=102&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on any matter of accounting principles or practices, or financial statement disclosure - None[500](index=500&type=chunk) [Controls and Procedures](index=102&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, having remediated a previously identified material weakness related to accounting personnel - Management concluded that disclosure controls and procedures were effective as of December 31, 2022[502](index=502&type=chunk) - A material weakness identified in 2021, related to a lack of sufficient qualified accounting personnel and segregation of duties, was remediated as of December 31, 2022[507](index=507&type=chunk)[509](index=509&type=chunk) - Remediation actions included hiring additional accounting and finance personnel with public company experience and implementing a more robust review and monitoring process for financial reporting[509](index=509&type=chunk) [Other Information](index=104&type=section&id=Item%209B.%20Other%20Information) On March 28, 2023, the company amended its Cargill Financial credit agreements for up to an additional **$110 million** in financing and issued warrants to purchase up to **69.6 million** shares at **$1.00** per share - On March 28, 2023, the company amended its credit agreements with Cargill Financial, providing for up to an additional **$110 million** in financing[511](index=511&type=chunk) - As part of the amendment, the company issued warrants to Cargill to purchase up to **69.6 million shares** of common stock at an exercise price of **$1.00 per share**[512](index=512&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=105&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the company's definitive Proxy Statement for its 2023 annual meeting of stockholders - Required information is incorporated by reference from the forthcoming 2023 Proxy Statement[516](index=516&type=chunk) - The Board has adopted a Code of Business Conduct and Ethics applicable to all directors, officers, and employees[517](index=517&type=chunk) [Executive Compensation](index=105&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive Proxy Statement for its 2023 annual meeting of stockholders - Required information is incorporated by reference from the forthcoming 2023 Proxy Statement[519](index=519&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=105&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners, management, and related stockholder matters is incorporated by reference from the company's definitive Proxy Statement for its 2023 annual meeting of stockholders - Required information is incorporated by reference from the forthcoming 2023 Proxy Statement[520](index=520&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=105&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the company's definitive Proxy Statement for its 2023 annual meeting of stockholders - Required information is incorporated by reference from the forthcoming 2023 Proxy Statement[521](index=521&type=chunk) [Principal Accountant Fees and Services](index=105&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's definitive Proxy Statement for its 2023 annual meeting of stockholders - Required information is incorporated by reference from the forthcoming 2023 Proxy Statement[522](index=522&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=106&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Annual Report on Form 10-K, including financial statements and an index of all exhibits such as merger and credit agreements - This section provides an index of all exhibits filed with the Form 10-K, including key agreements related to mergers, debt, and equity plans[526](index=526&type=chunk)[528](index=528&type=chunk) [Form 10-K Summary](index=110&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary provided - None[533](index=533&type=chunk)

Summary of Local Bounti Corporation Full Year 2022 Earnings Conference Call Company Overview - **Company**: Local Bounti Corporation (NYSE: LOCL) - **Industry**: Controlled Environment Agriculture (CEA) Key Points and Arguments Business Performance and Strategy - 2022 marked the first full year as a public company, with significant advancements in Stack & Flow Technology, enhancing crop turns and maximizing ROI across various CEA approaches [6][8] - The acquisition of Pete's in April 2022 allowed for strategic expansion and integration of technologies to improve productivity [6] - Distribution reach exceeds 10,000 doors, with new commercial partnerships, including an offtake agreement with Sam's Club for leafy greens [7][8] Financial Highlights - Announced $145 million in new financing, including a $110 million expansion of the credit facility with Cargill and a $35 million sale-leaseback transaction [8][24][25] - Fourth quarter 2022 sales were $6.6 million, up from $0.3 million in the prior year, with full year sales at $19.5 million compared to $0.6 million [21][23] - Adjusted gross margin for Q4 2022 was approximately 39%, with a full year adjusted gross margin of 38% [22][23] Technology and Yield Improvements - Stack & Flow Technology has led to a 25% to 35% yield improvement at the Montana facility, translating to 17.5 to 25 pounds of production per square foot [10] - Early trials in Georgia show potential yields of 1.4 to 1.8 times higher than traditional greenhouse technology [11] - Commitment to diversify crop types, including trials for high-value crops like berries, indicating potential for improved unit economics [12][13] Facility Expansion and Construction Updates - Georgia facility's Phase 1-B is expected to be completed early in Q2 2023, doubling production capacity [15][16] - New six-acre facility in Texas is under construction, expected to commence operations in Q4 2023 [17] - Pasco, Washington facility is anticipated to be completed in Q1 2024, with ongoing evaluations for expansion in the Northeastern U.S. [18] Market Dynamics and Consumer Trends - Increased demand for locally sourced products aligns with consumer preferences, with packaged salad products being shipped to 18 new distribution centers [14][15] - The CEA sector is positioned to benefit from supply chain challenges faced by conventional agriculture, potentially narrowing the price gap for consumers [36] Future Outlook - Full year 2023 revenue guidance is set between $34 million and $40 million, representing at least 74% growth [26] - Expected sequential revenue improvement as new facilities come online, with a path to positive adjusted EBITDA anticipated [27][28] Risks and Considerations - Construction timelines may be affected by weather conditions, as seen with delays in the Georgia facility due to severe rains [16][34] - Potential acquisitions could impact growth expectations and timelines [28] Additional Important Information - The company is focused on institutionalizing learning cycles to optimize operations across facilities, leveraging insights from existing operations to enhance future performance [45][47] - The integration of Stack & Flow Technology is yielding consistent improvements in yield and efficiency across facilities [57] This summary encapsulates the key discussions and insights from the Local Bounti Corporation's earnings conference call, highlighting the company's strategic direction, financial performance, technological advancements, and market positioning within the CEA industry.

For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-40125 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 LOCAL BOUNTI CORPORATION (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorp ...

Local Bounti Corporation (NYSE:LOCL) Q3 2022 Earnings Conference Call November 10, 2022 8:00 AM ET Company Participants Jeff Sonnek - Managing Director, ICR Craig Hurlbert - Co-Chief Executive Officer Travis Joyner - Co-Chief Executive Officer Brian Cook - President Kathleen Valiasek - Chief Financial Officer Conference Call Participants Ben Klieve - Lake Street Capital Markets Colin Rusch - Oppenheimer Brian Wright - ROTH Capital Partners Christopher Barnes - Deutsche Bank Pamela Kaufman - Morgan Stanley O ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to LOCAL BOUNTI CORPORATION (Exact name of registrant as specified in its charter) | Delaware | 001-40125 | | | 98-1584830 | | --- | --- | --- | --- | --- | | ...

Local Bounti Corporation (NYSE:LOCL) Q2 2022 Results Conference Call August 15, 2022 8:00 AM ET Company Participants Craig Hurlbert - Co-Chief Executive Officer and Chairman of the Board Jeff Sonnek - Managing Director, ICR Brian Cook - President Travis Joyner - Co-Chief Executive Officer and Director Kathleen Valiasek - Chief Financial Officer Conference Call Participants Ben Klieve - Lake Street Capital Markets Brian Wright - ROTH Capital Partners Kristen Owen - Oppenheimer Christopher Barnes - Deutsche B ...

Company Overview and Strategy - Local Bounti was founded by Craig and Travis, aiming for long-term CEA leadership with a focus on unit economics [7, 12] - The company utilizes a differentiated approach focusing on unit economics, local and distributed logistics, brand and product diversity, and sustainability [8, 9] - Local Bounti's strategy involves selecting geographic opportunities and analyzing build vs buy strategic approaches to expand its footprint [19, 20] Financial Highlights and Projections - Projected revenues for 2025 are estimated at $462 million [12] - The company has a $170 million debt facility in place with Cargill [12] - Facility capital costs are 30 times EBITDA [13] Technology and Production - Local Bounti employs patent-pending Stack & Flow Technology to achieve superior production unit economics [8] - The company achieves 15x-20x yield of comparable greenhouse farms [13, 15] - Local Bounti's technology uses 90% less water and land usage compared to outdoor growers [10, 15] ESG Alignment - Local Bounti exhibits exceptional ESG performance, directly addressing over half of the U N Sustainable Development Goals [10]

[General Information](index=1&type=section&id=General%20Information) This part covers the company's basic filing details, forward-looking statement disclaimers, and disclosure practices [Form 10-Q Details](index=1&type=section&id=Form%2010-Q%20Details) This section provides basic filing information for the Quarterly Report on Form 10-Q for the period ended March 31, 2022 - The registrant is **LOCAL BOUNTI CORPORATION**, incorporated in Delaware, with its principal executive offices in Hamilton, MT[2](index=2&type=chunk) Securities Registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, par value of $0.0001 per share | LOCL | New York Stock Exchange | | Warrants, each exercisable for one share of Common Stock for $11.50 per share | LOCL WS | New York Stock Exchange | - The registrant is a **Non-accelerated filer**, a **Smaller reporting company**, and an **Emerging growth company**[5](index=5&type=chunk) - As of May 5, 2022, the number of outstanding shares of common stock was **94,105,753**[5](index=5&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=5&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section warns that the report contains forward-looking statements subject to risks, and actual results may differ materially - Forward-looking statements reflect current expectations and projections about future events but are not guarantees of future performance[11](index=11&type=chunk) - Key risk factors include the company's **early-stage status with a history of losses**, need for additional financing, risks from the Pete's Acquisition, and reliance on limited facilities[12](index=12&type=chunk)[13](index=13&type=chunk) - Other significant risks involve substantial expenditures for facility build-out, potential cost increases, COVID-19 impacts, and challenges in executing its growth strategy[12](index=12&type=chunk)[15](index=15&type=chunk) [Website and Social Media Disclosure](index=7&type=section&id=WEBSITE%20AND%20SOCIAL%20MEDIA%20DISCLOSURE) The company outlines its channels for disclosing material information, including SEC filings, press releases, and its website - Material information is routinely announced via SEC filings, press releases, public conference calls, and the company's website[17](index=17&type=chunk) - The company intends to use social media channels like Twitter for disclosing information[17](index=17&type=chunk) [Additional Information](index=7&type=section&id=ADDITIONAL%20INFORMATION) This section clarifies the terms used throughout the Quarterly Report to refer to the company - References to 'Company,' 'Local Bounti,' 'we,' 'us,' and 'our' refer to Local Bounti Corporation[19](index=19&type=chunk) [Part I – Financial Information](index=8&type=section&id=Part%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed consolidated financial statements and management's analysis of financial performance and condition [Item 1. Financial Statements](index=8&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements and detailed notes for the reporting period [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Item | March 31, 2022 (Unaudited) | December 31, 2021 | | :-------------------------------- | :------------------------- | :------------------ | | **Assets** | | | | Cash and cash equivalents | $71,974 | $96,661 | | Total current assets | $81,311 | $105,508 | | Property and equipment, net | $43,994 | $37,350 | | Total assets | $126,479 | $143,930 | | **Liabilities and Stockholders' Equity** | | | | Accounts payable | $7,431 | $1,912 | | Accrued liabilities | $6,721 | $16,020 | | Total current liabilities | $14,289 | $17,968 | | Long-term debt | $11,110 | $11,199 | | Total liabilities | $39,526 | $42,247 | | Total stockholders' equity | $86,953 | $101,683 | | Total liabilities and stockholders' equity | $126,479 | $143,930 | [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Unaudited Condensed Consolidated Statements of Operations (in thousands, except per share data) | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Sales | $282 | $57 | | Cost of goods sold | $234 | $45 | | Gross profit | $48 | $12 | | Research and development | $1,948 | $432 | | Selling, general and administrative | $22,259 | $8,294 | | Total operating expenses | $24,207 | $8,726 | | Loss from operations | $(24,159) | $(8,714) | | Interest expense, net | $(1,643) | $(405) | | Net loss | $(25,772) | $(9,398) | | Net loss per basic and diluted common share | $(0.32) | $(0.19) | | Weighted average common shares outstanding | 81,009,268 | 49,131,554 | [Unaudited Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Changes in Stockholders' Equity (Deficit) (in thousands) | Item | Balance, Dec 31, 2021 | Stock-based compensation | Net loss | Balance, Mar 31, 2022 | | :-------------------- | :-------------------- | :----------------------- | :------- | :-------------------- | | Additional Paid-in Capital | $169,916 | $11,042 | — | $180,958 | | Accumulated Deficit | $(68,242) | — | $(25,772) | $(94,014) | | Total Stockholders' Equity (Deficit) | $101,683 | $11,042 | $(25,772) | $86,953 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(10,085) | $(3,223) | | Net cash used in investing activities | $(14,673) | $(1,070) | | Net cash provided by financing activities | $71 | $21,604 | | Net (decrease) increase in cash and restricted cash | $(24,687) | $17,311 | | Cash and restricted cash at end of period | $76,390 | $17,356 | - Non-cash investing and financing activities for Q1 2022 included **$8,161 thousand in purchases of property and equipment** in accounts payable and accrued liabilities[27](index=27&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential context for the financial statements, covering business operations, accounting policies, and key financial components [1. Business Description](index=14&type=section&id=1.%20Business%20Description) - Local Bounti Corporation is an indoor farming company using proprietary **Stack & Flow Technology™** to grow food sustainably[28](index=28&type=chunk) - On April 4, 2022, the Company completed the acquisition of Pete's, a California-based indoor farming company, for **$122.5 million**[29](index=29&type=chunk)[30](index=30&type=chunk) - Pete's operates three greenhouse facilities and distributes to approximately **10,000 retail locations** across 35 U.S. states and Canadian provinces[30](index=30&type=chunk) [2. Summary of Significant Accounting Policies](index=14&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited condensed consolidated financial statements are prepared in accordance with GAAP and include all wholly-owned subsidiaries[31](index=31&type=chunk) - Depreciation and property and equipment classifications were reclassified to enhance comparability with industry peers[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - The Company adopted ASU 2021-04 and ASU 2019-12 on January 1, 2022, with no material impact on the financial statements[37](index=37&type=chunk)[38](index=38&type=chunk) [3. Inventory](index=15&type=section&id=3.%20Inventory) Inventory Composition (in thousands) | Item | March 31, 2022 | December 31, 2021 | | :---------------- | :------------- | :---------------- | | Raw materials | $399 | $145 | | Work-in-process | $173 | $173 | | Finished goods | $104 | $69 | | Packaging | $682 | $467 | | Consignment | — | $163 | | Inventory allowance | $(95) | $(95) | | **Total inventory, net** | **$1,263** | **$922** | [4. Property and Equipment](index=16&type=section&id=4.%20Property%20and%20Equipment) Property and Equipment (in thousands) | Item | March 31, 2022 | December 31, 2021 | | :---------------------- | :------------- | :---------------- | | Greenhouse facility | $11,033 | $10,194 | | Equipment | $4,986 | $3,683 | | Land | $3,991 | $4,122 | | Leasehold improvements | $3,947 | $3,947 | | Construction-in-progress | $21,549 | $16,375 | | Less: Accumulated depreciation | $(1,512) | $(971) | | **Property and equipment, net** | **$43,994** | **$37,350** | Depreciation Expense (in thousands) | Period | Depreciation Expense | | :-------------------------- | :------------------- | | Three months ended March 31, 2022 | $541 | | Three months ended March 31, 2021 | $124 | [5. Accrued Liabilities](index=16&type=section&id=5.%20Accrued%20Liabilities) Accrued Liabilities (in thousands) | Item | March 31, 2022 | December 31, 2021 | | :------------------------ | :------------- | :---------------- | | Accrued construction expenses | $135 | $11,192 | | Accrued insurance | $1,825 | $2,582 | | Accrued payroll | $273 | $792 | | Accrued agriculture expenses | $294 | $461 | | Accrued legal fees | $3,448 | $273 | | Accrued other | $746 | $720 | | **Total accrued liabilities** | **$6,721** | **$16,020** | [6. Debt](index=16&type=section&id=6.%20Debt) Debt Composition (in thousands) | Item | March 31, 2022 | December 31, 2021 | | :------------------------------------ | :------------- | :---------------- | | Subordinated Facility | $16,293 | $16,293 | | Unamortized deferred financing costs, Cargill Credit Agreements | $(5,183) | $(5,094) | | **Total debt** | **$11,110** | **$11,199** | - The Subordinated Facility has an interest rate of **10.5% per annum**, with **$16,293 thousand outstanding** as of March 31, 2022[46](index=46&type=chunk)[47](index=47&type=chunk) - The Senior Facility had **no amounts outstanding** as of March 31, 2022 and December 31, 2021[48](index=48&type=chunk) - The Company was in compliance with all applicable financial covenants under the Cargill Financial credit agreements as of March 31, 2022[49](index=49&type=chunk)[51](index=51&type=chunk) [7. Fair Value Measurements](index=18&type=section&id=7.%20Fair%20Value%20Measurements) Recurring Fair Value Measurements (in thousands) | Item | March 31, 2022 (Level 1) | December 31, 2021 (Level 1) | | :------------------------------------------ | :----------------------- | :-------------------------- | | Money market funds, included in cash and cash equivalents | $71,943 | $96,661 | | **Total** | **$71,943** | **$96,661** | - The fair value of money market funds is determined using quoted market prices, classifying them as **Level 1 measurements**[52](index=52&type=chunk) [8. Stock-Based Compensation](index=19&type=section&id=8.%20Stock-Based%20Compensation) Restricted Common Stock Awards (RSAs) Activity | Item | Number of Shares | Average Grant Date Fair Value | | :-------------------------- | :--------------- | :---------------------------- | | Unvested at December 31, 2021 | 5,479,451 | $1.80 | | Vested | (208,682) | $2.66 | | Unvested at March 31, 2022 | 5,270,769 | $1.84 | - Total expense for RSAs for Q1 2022 was **$917 thousand**, with **$5,302 thousand in unrecognized compensation cost**[54](index=54&type=chunk) Restricted Stock Units (RSUs) Activity | Item | Number of RSUs | Average Grant Date Fair Value | | :-------------------------------- | :------------- | :---------------------------- | | Unvested at December 31, 2021 | 2,395,789 | $9.73 | | Granted | 7,321,188 | $5.67 | | Forfeited | (49,697) | $(9.97) | | Vested | (123,884) | $(9.83) | | Unvested and outstanding at March 31, 2022 | 9,543,396 | $6.61 | - Total expense for RSUs for Q1 2022 was **$10,096 thousand**, with **$51,525 thousand in unrecognized compensation cost**[55](index=55&type=chunk) [9. Income Taxes](index=19&type=section&id=9.%20Income%20Taxes) - The Company incurred net operating losses for Q1 2022 and 2021, resulting in **no provision for income taxes**[56](index=56&type=chunk) Net Operating Losses (NOLs) (in thousands) | Date | U.S. Federal and State NOLs | | :---------------- | :-------------------------- | | March 31, 2022 | $54,600 | | December 31, 2021 | $41,800 | These NOL carryforwards can be carried forward indefinitely. [10. Net Loss Per Share](index=19&type=section&id=10.%20Net%20Loss%20Per%20Share) Net Loss Per Share (in thousands, except share and per share data) | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(25,772) | $(9,398) | | Weighted average common stock outstanding, basic and diluted | 81,009,268 | 49,131,554 | | Net loss per common share, basic and diluted | $(0.32) | $(0.19) | - Diluted loss per common share is the same as basic loss per common share because the effects of potentially dilutive items were **anti-dilutive**[58](index=58&type=chunk) Anti-Dilutive Securities (Weighted-Average Shares Outstanding) | Security | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------- | :-------------------------------- | :-------------------------------- | | CIC Restricted Stock | 5,395,590 | 9,679,209 | | Convertible Notes | — | 3,095 | | Warrants | 11,539,306 | 6,650 | [11. Commitments and Contingencies](index=21&type=section&id=11.%20Commitments%20and%20Contingencies) - Management is not aware of any legal matters expected to have a material adverse effect on the Company's financial position[61](index=61&type=chunk) Non-Cancelable Purchase Commitments (in thousands) | Period | Purchase Commitments | | :---------------- | :------------------- | | Remainder of 2022 | $357 | | 2023 | $402 | | 2024 | $204 | | **Total** | **$963** | Operating Lease Liabilities (in thousands) | Period | Operating Leases | | :---------------- | :--------------- | | Remainder of 2022 | $99 | | 2023 | $96 | | 2024 | $90 | | **Total** | **$285** | [12. Related Party Transactions](index=22&type=section&id=12.%20Related%20Party%20Transactions) - The management services agreement with BrightMark Partners LLC was terminated in March 2021, resulting in **no management fees for Q1 2022**[64](index=64&type=chunk)[65](index=65&type=chunk) - A commercial lease agreement with McLeod Property HM LLC was terminated on March 15, 2022[66](index=66&type=chunk) Accrued Liabilities, Related Party (in thousands) | Date | Amount | | :---------------- | :----- | | March 31, 2022 | $26 | | December 31, 2021 | $8 | [13. Subsequent Events](index=22&type=section&id=13.%20Subsequent%20Events) - On April 4, 2022, the Company completed the acquisition of Pete's for **$122.5 million**[69](index=69&type=chunk)[70](index=70&type=chunk) - In connection with the Pete's Acquisition, Pete's acquired properties from STORE Master Funding XVIII, LLC for **$25.8 million in cash**[71](index=71&type=chunk) - On April 4, 2022, an amendment to the Cargill Financial credit agreements reduced the aggregate commitment to **$170.0 million** and increased interest rates by **2%**[72](index=72&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations for Q1 2022 [Overview](index=23&type=section&id=Overview) - Local Bounti produces sustainably grown produce using its patent-pending **Stack & Flow Technology™**[75](index=75&type=chunk) - The Montana Facility increased its capacity by approximately **140% in Q3 2021** and was fully commissioned in Q4 2021[75](index=75&type=chunk) - The company's growth strategy includes increasing production capacity, expanding to new markets, and broadening its product offerings[76](index=76&type=chunk) [Recent Developments](index=23&type=section&id=Recent%20Developments) - On April 4, 2022, Local Bounti acquired Pete's, a California-based indoor farming company with distribution to **~10,000 retail locations**[78](index=78&type=chunk) - The acquisition provides access to Pete's established retail customer base and allows for technology integration to enhance yields[79](index=79&type=chunk) [Environmental, Social and Governance](index=24&type=section&id=Environmental,%20Social%20and%20Governance) - Local Bounti emphasizes sustainability, believing its growing technology delivers clean produce with safer methods[80](index=80&type=chunk) - The company's compact, efficient, and local farms aim to make it among the most sustainable produce suppliers[81](index=81&type=chunk) [Factors Affecting Our Financial Condition and Results of Operations](index=24&type=section&id=Factors%20Affecting%20Our%20Financial%20Condition%20and%20Results%20of%20Operations) - The company expects to expend substantial resources on integrating Pete's operations and building out new CEA facilities[83](index=83&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) Historical Operating Results (in thousands) | Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | $ Change | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Sales | $282 | $57 | $225 | | Cost of goods sold | $234 | $45 | $189 | | Gross profit | $48 | $12 | $36 | | Research and development | $1,948 | $432 | $1,516 | | Selling, general and administrative | $22,259 | $8,294 | $13,965 | | Total operating expenses | $24,207 | $8,726 | $15,481 | | Loss from operations | $(24,159) | $(8,714) | $(15,445) | | Management fee income | $30 | $20 | $10 | | Convertible Notes fair value adjustment | — | $(299) | $299 | | Interest expense, net | $(1,643) | $(405) | $(1,238) | | Net loss | $(25,772) | $(9,398) | $(16,374) | [Sales](index=26&type=section&id=Sales) - Sales of produce increased by **$225 thousand** to **$282 thousand** for Q1 2022[86](index=86&type=chunk) - This increase was driven by expanded production at the Montana Facility, leading to sales in over **500 retail locations**[86](index=86&type=chunk) [Cost of Goods Sold](index=26&type=section&id=Cost%20of%20Goods%20Sold) - Cost of goods sold increased by **$189 thousand** in Q1 2022, primarily due to increased sales volume[88](index=88&type=chunk) - The company expects cost of goods sold to decrease as a percentage of sales over time as operations scale[87](index=87&type=chunk) [Research and Development](index=26&type=section&id=Research%20and%20Development) - Research and development costs increased by **$1,516 thousand** in Q1 2022, reflecting increased investment in product expansion[90](index=90&type=chunk) - Ongoing R&D efforts have led to approximately **26 crop turns annually** for commercial loose-leaf lettuce[89](index=89&type=chunk) [Selling, General, and Administrative Expenses](index=26&type=section&id=Selling,%20General,%20and%20Administrative%20Expenses) - Selling, general, and administrative expenses rose by **$13,965 thousand** in Q1 2022[92](index=92&type=chunk) - This increase was primarily driven by a **$6,071 thousand rise in stock-based compensation** and **$3,901 thousand in transaction costs** for the Pete's acquisition[92](index=92&type=chunk) [Management Fee Income](index=26&type=section&id=Management%20Fee%20Income) - Management fee income increased by **$10 thousand** in Q1 2022, related to managing the Montana Facility[93](index=93&type=chunk) [Convertible Notes Fair Value Adjustment](index=26&type=section&id=Convertible%20Notes%20Fair%20Value%20Adjustment) - There was **no Convertible Notes fair value adjustment** for Q1 2022, as all notes were converted in November 2021[96](index=96&type=chunk) - For Q1 2021, the adjustment was **$(299) thousand**[96](index=96&type=chunk) [Interest Expense, net](index=28&type=section&id=Interest%20Expense,%20net) - Net interest expense increased by **$1,238 thousand** in Q1 2022[97](index=97&type=chunk) - This increase was primarily due to a **$1,079 thousand rise in interest and fees** related to Cargill Financial debt[97](index=97&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Cash, Cash Equivalents, and Restricted Cash (in thousands) | Date | Amount | | :---------------- | :----- | | March 31, 2022 | $76,390 | | December 31, 2021 | $101,077 | - The company had an accumulated deficit of **$94,014 thousand** as of March 31, 2022[98](index=98&type=chunk) - The CEA business is capital-intensive, but current cash and borrowing capacity are believed sufficient for the next 12 months[99](index=99&type=chunk)[100](index=100&type=chunk) - The Cargill Financial credit facility was amended on April 4, 2022, reducing the aggregate commitment to **$170.0 million**[104](index=104&type=chunk) [Cash Flow Analysis](index=29&type=section&id=Cash%20Flow%20Analysis) Summary of Cash Flows (in thousands) | Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(10,085) | $(3,223) | | Net cash used in investing activities | $(14,673) | $(1,070) | | Net cash provided by financing activities | $71 | $21,604 | - Net cash used in operating activities increased to **$(10,085) thousand** in Q1 2022, primarily due to a net loss of **$(25,772) thousand**[107](index=107&type=chunk) - Net cash used in investing activities significantly increased to **$(14,673) thousand** in Q1 2022, mainly due to purchases of property and equipment[109](index=109&type=chunk) - Net cash provided by financing activities decreased to **$71 thousand** in Q1 2022, compared to **$21,604 thousand** in Q1 2021[110](index=110&type=chunk)[111](index=111&type=chunk) [Off-Balance Sheet Arrangements](index=29&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company has not entered into any off-balance sheet arrangements[112](index=112&type=chunk) [Critical Accounting Policies and Estimates](index=29&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[113](index=113&type=chunk) [Recent Accounting Pronouncements](index=29&type=section&id=Recent%20Accounting%20Pronouncements) - For information about recent accounting pronouncements, refer to Note 2 of the Unaudited Condensed Consolidated Financial Statements[114](index=114&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, specifically inflation and interest rate risks [Inflation Risk](index=31&type=section&id=Inflation%20Risk) - The company does not believe inflation has had a material effect on its business to date[116](index=116&type=chunk) - However, significant inflationary pressures on costs that cannot be offset by price increases could harm the business[116](index=116&type=chunk) [Interest Rate Risk](index=31&type=section&id=Interest%20Rate%20Risk) - Borrowings under the Senior Facility expose the company to market risk from changes in interest rates[117](index=117&type=chunk) - As of March 31, 2022, there was **no outstanding balance** under the Senior Facility[117](index=117&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) This section addresses the effectiveness of the company's disclosure controls, identifying a material weakness and outlining remediation [Evaluation of Disclosure Controls and Procedures](index=31&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - As of March 31, 2022, the company's disclosure controls and procedures were **not effective** due to a continuing material weakness[118](index=118&type=chunk) - The material weakness is related to the **lack of adequate finance and accounting personnel**[118](index=118&type=chunk) [Remediation Plan](index=31&type=section&id=Remediation%20Plan) - Management is continuing to implement the remediation plan disclosed in the Annual Report on Form 10-K[119](index=119&type=chunk) - The material weakness will be considered remediated only after management concludes controls are effectively designed and operating[120](index=120&type=chunk) [Changes in Internal Control over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - No other material changes in internal control over financial reporting occurred during Q1 2022[121](index=121&type=chunk) [Part II – Other Information](index=32&type=section&id=Part%20II%20%E2%80%93%20OTHER%20INFORMATION) This part contains information on legal proceedings, risk factors, unregistered sales of securities, and filed exhibits [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the financial statement notes for information regarding any legal proceedings involving the company - Information regarding legal proceedings can be found in Note 11, Commitments and Contingencies, to the financial statements[124](index=124&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section details risks that could materially affect the business, from operations and growth to market and regulatory factors [Summary Risk Factors](index=32&type=section&id=Summary%20Risk%20Factors) - The company is an **early-stage entity with a history of losses**, requiring additional financing to achieve its goals[127](index=127&type=chunk)[128](index=128&type=chunk) - Risks include liabilities from the **Pete's Acquisition**, reliance on a limited number of facilities, and difficulty forecasting future results[127](index=127&type=chunk)[128](index=128&type=chunk) - Other risks encompass the ability to decrease cost of goods sold, potential damage to facilities, and competition in the natural food market[128](index=128&type=chunk) [Risks Related to Local Bounti's Business](index=36&type=section&id=Risks%20Related%20to%20Local%20Bounti's%20Business) - Local Bounti is an early-stage company with a history of losses and expects to incur **significant expenses and continuing losses**[130](index=130&type=chunk)[131](index=131&type=chunk) - The company will require **additional financing** to achieve its goals, and failure to obtain it could force delays or termination of operations[133](index=133&type=chunk)[134](index=134&type=chunk) - Local Bounti relies on a **limited number of facilities**, making operations vulnerable to adverse changes or developments[135](index=135&type=chunk)[137](index=137&type=chunk) - The build-out of new facilities will require **significant capital expenditures** and is subject to delays and unexpected costs[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - The company's ability to decrease cost of goods sold depends on scaling operations, which may be hindered by inflation or supply chain interruptions[141](index=141&type=chunk) - Damage or problems with CEA facilities could severely impact operations and financial condition[142](index=142&type=chunk)[143](index=143&type=chunk) - Failure to attract and retain a skilled local labor force could negatively impact business and results of operations[146](index=146&type=chunk)[147](index=147&type=chunk)[149](index=149&type=chunk) - Failure to develop and maintain its brand, or negative publicity, could harm the business and competitive position[150](index=150&type=chunk)[151](index=151&type=chunk) - Estimates of market opportunity and forecasts of market growth may be inaccurate[152](index=152&type=chunk) - The effects of **COVID-19** and other public health crises on business, operating results, and cash flows are uncertain[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk) - Inability to maintain company culture as it grows could harm the business and competitive position[159](index=159&type=chunk) - Local Bounti may be unable to successfully execute its growth strategy, which could adversely affect financial results[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - Operating costs may be higher than expected due to fluctuating utility prices or increased labor costs[175](index=175&type=chunk)[176](index=176&type=chunk) - Incorrect estimates relating to critical accounting policies could adversely affect results of operations[177](index=177&type=chunk) - Operating as a public company will incur increased costs and require substantial management time[178](index=178&type=chunk) - The company has identified **material weaknesses in internal control over financial reporting**, which could lead to inaccurate financial reporting[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk)[183](index=183&type=chunk) - The ability to use **net operating loss carryforwards (NOLs)** may be limited due to potential ownership changes[184](index=184&type=chunk) [Risks Related to the Natural Food Market](index=46&type=section&id=Risks%20Related%20to%20the%20Natural%20Food%20Market) - Local Bounti faces inherent risks in the CEA business, including plant diseases and pest infestations[185](index=185&type=chunk)[186](index=186&type=chunk) - The company operates in a **highly competitive natural foods market**, facing competition from large-scale operations and other indoor growers[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - The ability to grow revenue is dependent on increasing crop yield and quality[193](index=193&type=chunk) [Risks Related to Local Bounti's Technology, Intellectual Property and Infrastructure](index=47&type=section&id=Risks%20Related%20to%20Local%20Bounti's%20Technology,%20Intellectual%20Property%20and%20Infrastructure) - Local Bounti may need to defend itself against **intellectual property infringement claims**, which could be time-consuming and expensive[194](index=194&type=chunk) - The loss of any registered trademark or other intellectual property could enable competitors and damage brand reputation[195](index=195&type=chunk)[196](index=196&type=chunk) - Reliance on information technology systems means any failure or security breach could harm the ability to operate the business[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) [Risks related to the Pete's Acquisition](index=48&type=section&id=Risks%20related%20to%20the%20Pete's%20Acquisition) - The Pete's Acquisition involves **significant capital investment and integration difficulties**, which may detract from core operations[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Failure to successfully integrate Pete's business could prevent the realization of anticipated acquisition benefits[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk) - Pete's operations are subject to federal, state, and local environmental laws, which could lead to increased costs and penalties[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) - The acquisition may lead to increased costs for accounting, internal controls, and compliance[215](index=215&type=chunk)[216](index=216&type=chunk) - Pete's existing facilities may not be adaptable to Local Bounti's new technologies[217](index=217&type=chunk) - Supply chain disruptions could lead to construction delays at acquired facilities, impacting liquidity[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk) - Following the acquisition, operating facilities are concentrated in Montana, California, and Georgia, increasing regional risk[221](index=221&type=chunk) - **Lack of sufficient water**, particularly in California due to drought, could severely impact production[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk) [Risks Related to our Customers](index=52&type=section&id=Risks%20Related%20to%20our%20Customers) - Local Bounti could be adversely affected by changes in consumer preferences and spending habits[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) - Demand for greens and herbs is subject to seasonal fluctuations, which may adversely impact results[230](index=230&type=chunk) - The loss or significant reduction in orders from top retail customers could have a material adverse impact on the business[231](index=231&type=chunk) [Risks Related to Legal Matters and Regulations](index=53&type=section&id=Risks%20Related%20to%20Legal%20Matters%20and%20Regulations) - The unavailability or elimination of government and economic incentives could negatively impact the business[232](index=232&type=chunk)[233](index=233&type=chunk) - Local Bounti may be subject to litigation and government inquiries with unpredictable outcomes[234](index=234&type=chunk)[235](index=235&type=chunk) - The business involves significant risks that may not be fully covered by insurance[236](index=236&type=chunk) - Future operations could expose the company to material environmental and regulatory liabilities[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) - Political issues and changes in legislation could significantly impact the business[241](index=241&type=chunk) - **Product contamination or food-safety incidents** could expose Local Bounti to lawsuits, product recalls, and reduced demand[242](index=242&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk) - Real or perceived quality or food-safety issues could diminish its brand and reputation[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - Local Bounti's operations are subject to extensive regulation by the USDA, FDA, and other authorities[249](index=249&type=chunk)[250](index=250&type=chunk) - Failure by suppliers or distribution partners to comply with regulations could disrupt supply and harm reputation[251](index=251&type=chunk) [Risks Related to Local Bounti's Term Loan Facility](index=57&type=section&id=Risks%20Related%20to%20Local%20Bounti's%20Term%20Loan%20Facility) - The credit facility with Cargill Financial is **secured by all of the company's assets**, including intellectual property[253](index=253&type=chunk) - An uncured event of default could grant Cargill Financial the right to foreclose on all assets[253](index=253&type=chunk) [Risks Relating to Ownership of Our Securities](index=57&type=section&id=Risks%20Relating%20to%20Ownership%20of%20Our%20Securities) - The price of Local Bounti's securities may be **volatile or decline** regardless of operating performance[254](index=254&type=chunk) - Local Bounti has **never paid cash dividends** and does not anticipate doing so in the foreseeable future[255](index=255&type=chunk) - Anti-takeover provisions could impair takeover attempts, potentially limiting stockholders' opportunity to receive a premium[256](index=256&type=chunk) - The company is subject to risks related to taxation in the United States, including potential changes in tax laws[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk)[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) - The company's application for a PPP Loan could be determined impermissible, potentially leading to penalties[265](index=265&type=chunk)[266](index=266&type=chunk) - As a holding company, Local Bounti is dependent on distributions from its subsidiaries to pay taxes and cover expenses[267](index=267&type=chunk)[268](index=268&type=chunk) - There is no guarantee that public warrants will be in the money, and they may expire worthless[269](index=269&type=chunk)[270](index=270&type=chunk) - The company may redeem unexpired warrants prior to their exercise at a disadvantageous time for holders[271](index=271&type=chunk)[272](index=272&type=chunk) - Future issuance of a substantial number of additional shares would dilute existing shareholders' interests[273](index=273&type=chunk) - The NYSE may delist the company's securities, limiting investors' ability to transact[274](index=274&type=chunk)[275](index=275&type=chunk) - Future sales of shares by existing stockholders may adversely affect the market price of common stock[276](index=276&type=chunk)[277](index=277&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk)[280](index=280&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk) - If securities or industry analysts cease publishing research or change recommendations adversely, the stock price could decline[283](index=283&type=chunk) - As an **'emerging growth company'**, Local Bounti takes advantage of certain exemptions from reporting requirements[284](index=284&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section confirms no unregistered sales of equity securities occurred during the reporting period that were not previously disclosed - There were no unregistered sales of equity securities during the period that were not previously reported on a Form 8-K[287](index=287&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed as part of the Quarterly Report, including agreements, certifications, and financial data Exhibits List | Exhibit Number | Description | | :------------- | :---------- | | 2.1* | Business Combination Agreement, dated as of June 17, 2021 | | 3.1 | Certificate of Incorporation of Local Bounti Inc. | | 3.2 | Certificate of Amendment to Certificate of Incorporation of Local Bounti Corporation | | 3.3 | Bylaws of Local Bounti Inc. | | 31.1 | Certification of Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 31.2 | Certification of Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | 32.1** | Certification of Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 32.2** | Certification of Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | 101 | The following financial statements from Local Bounti's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL: (a) Unaudited Condensed Consolidated Statements of Cash Flows, (b) Unaudited Condensed Consolidated Statements of Operations, (c) Condensed Consolidated Balance Sheets, and (d) Notes to Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags. | | 104 | Cover Page Interactive Data File - the cover page from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, formatted in Inline XBRL (included in Exhibit 101). | [Signatures](index=66&type=section&id=SIGNATURES) This part contains the authorized signatures of the company's principal officers, affirming the report's submission [Signatures](index=66&type=section&id=Signatures) This section contains the duly authorized signatures of the company's principal executive, financial, and accounting officers - The report is signed by Craig M. Hurlbert (Co-Chief Executive Officer), Kathleen Valiasek (Chief Financial Officer), and Daniel Martinelli (Chief Accounting Officer) on May 12, 2022[293](index=293&type=chunk)