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What changed in Local Bounti Corporation/DE's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Local Bounti Corporation/DE's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+298 added−277 removedSource: 10-K (2026-03-27) vs 10-K (2025-03-31)

Top changes in Local Bounti Corporation/DE's 2025 10-K

298 paragraphs added · 277 removed · 194 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

63 edited+14 added−28 removed119 unchanged
Biggest changeThe first phase of this facility became operational in July 2022 and was further expanded in 2023. During the fourth quarter of 2023, we also implemented our patented Stack & Flow Technology ® at the Georgia facility, which doubled run-rate production.
Biggest changeDuring the fourth quarter of 2023, we also implemented our patented Stack & Flow Technology at the Georgia facility, which doubled run-rate production, and over the first year, tripled pre-Stack & Flow commissioning production. In the second quarter of 2024, we commenced operations at both our Texas and Washington facilities and began shipping product.
While population shifts and community health evolve, the Company is well-positioned to respond within existing systems and expand on continuity planning and community investment activities. • Regulatory: In the United States and globally, there is a growing amount of regulatory action in response to climate change. Recently, we have seen increased regulation relating to climate-smart investments and 16 sustainability disclosures.
While population shifts and community health evolve, the Company is well-positioned to respond within existing systems and expand on continuity planning and community investment activities. • Regulatory: In the United States and globally, there is a growing amount of regulatory action in response to climate change. Recently, we have seen increased regulation relating to climate-smart investments and sustainability disclosures.
Additionally, the food 7 industry has faced increasing challenges related to product recalls and contamination issues in traditional agriculture, often linked to factors such as soilborne pathogens, pesticide exposure, and inconsistent quality control. CEA minimizes these risks by providing a controlled, sterile environment that reduces exposure to contaminants, enhancing food safety and reducing costly recalls.
Additionally, the food industry has faced increasing challenges related to product recalls and contamination issues in traditional agriculture, often linked to factors such as soilborne pathogens, pesticide exposure, and inconsistent quality control. CEA minimizes these risks by providing a controlled, sterile environment that reduces exposure to contaminants, enhancing food safety and reducing costly recalls.
Combined with our advanced technologies and the location of our facilities in proximity to retail partner distribution centers and communities with available supporting resources such as adequate water and renewable energy, we believe Local Bounti has the potential to be among the most sustainable produce suppliers in the nation. Our sustainability program is foundational to our business.
Combined with our advanced technologies and the location of our facilities in proximity to retail partner distribution centers and communities with available supporting resources such as adequate water and renewable energy, we believe Local Bounti has the potential to be among the most sustainable produce suppliers in the nation. 13 Our sustainability program is foundational to our business.
Plans remain in place to build additional capacity across our network of facilities enabled with our Stack & Flow Technology ® . The planned expansion are designed to provide additional capacity and allow for our growing product assortment to meet existing demand from our direct relationships with blue-chip retailers and distributors.
Plans remain in place to build additional capacity across our 11 network of facilities enabled with our Stack & Flow Technology ® . The planned expansion are designed to provide additional capacity and allow for our growing product assortment to meet existing demand from our direct relationships with blue-chip retailers and distributors.
Our employees are not represented by any labor union, and we have never experienced a work stoppage or strike. We believe that our employee relations are good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors, and consultants.
Our employees are not represented by any labor union, and we have never experienced a work stoppage or strike. We believe that our employee relations are good. 16 Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors, and consultants.
The facility also includes a cold storage room for finished goods and a packaging room with 12 processing equipment to transform freshly harvested product into package goods that are ready for retail shelves. The Texas facility is designed and laid out for potential future expansion. Development Pipeline.
The facility also includes a cold storage room for finished goods and a packaging room with processing equipment to transform freshly harvested product into package goods that are ready for retail shelves. The Texas facility is designed and laid out for potential future expansion. Development Pipeline.
Our 13 approach is to build or acquire geographically distributed production facilities so we can provide our customers with locally grown, lower pesticide and herbicide produce delivered at peak freshness on a year-round basis.
Our approach is to build or acquire geographically distributed production facilities so we can provide our customers with locally grown, lower pesticide and herbicide produce delivered at peak freshness on a year-round basis.
We have performed product shelf-life tests 14 which demonstrated that our loose-leaf lettuce lasts longer in the consumer's refrigerator (assuming purchased on the day of delivery to the purchase point) than one of our organic loose-leaf lettuce competitors.
We have performed product shelf-life tests which demonstrated that our loose-leaf lettuce lasts longer in the consumer's refrigerator (assuming purchased on the day of delivery to the purchase point) than one of our organic loose-leaf lettuce competitors.
A series of conversations across all aspects of the business occurred as the Company identified short-term (0-24 months), Medium Term (2-10 years), and Long Term (10+ years) impacts that have a substantive financial or strategic impact on the business.
A series of conversations across all aspects of the business occurred as the 14 Company identified short-term (0-24 months), Medium Term (2-10 years), and Long Term (10+ years) impacts that have a substantive financial or strategic impact on the business.
Previously, she served as Vice President, General Counsel, and Secretary from January 2015 to December 2019 and Assistant General Counsel and Assistant Secretary from January 2012 to January 2015 of Intrepid Potash, Inc. (NYSE: IPI), a potash and specialty plant-nutrient company. From 2004 through 2011, Ms.
Previously, she served as Vice President, General Counsel, and Secretary from January 2015 to December 2019 and Assistant General Counsel and Assistant Secretary from January 2012 to January 2015 of Intrepid Potash, Inc. (NYSE: IPI), a potash and specialty plant-nutrient company. 18 From 2004 through 2011, Ms.
Additionally, we may target existing greenhouse or CEA operations for acquisitions if they are strategically located and meet our other business criteria, including, for example, the Pete's Acquisition. 9 Local Bounti Facility Locations 10 Our Solution We believe Local Bounti is positioned as a disruptor to loose leaf lettuce, living lettuce and other produce production by changing the way food is grown by focusing on driving profitable unit economics and capitalizing on our patented Stack & Flow Technology ® .
Additionally, we may target existing greenhouse or CEA operations for acquisitions if they are strategically located and meet our other business criteria, including, for example, the Pete's Acquisition. 8 Local Bounti Facility Locations 9 Our Solution We believe Local Bounti is positioned as a disruptor to loose leaf lettuce, living lettuce and other produce production by changing the way food is grown by focusing on driving profitable unit economics and capitalizing on our patented Stack & Flow Technology.
Our Board of Directors (the "Board") has adopted an Environmental Policy, which documents our policies relating to the environment, including the following: • Water Stewardship: We are committed to monitoring, reducing, and reusing water resources. • Climate Protection: We are committed to being carbon neutral by 2050. • Sustainable Packaging: We are committed to using an average of 30% recycled content or responsibly sourced biobased content in consumer-facing packaging by the end of 2025. • Sustainable Sourcing: Our Board has approved a Supplier Code of Conduct, which address the standards of business conduct we expect from our suppliers.
Our Board of Directors (the "Board") has adopted an Environmental Policy, which documents our policies relating to the environment, including the following: • Water Stewardship: We are committed to monitoring, reducing, and reusing water resources. • Climate Protection: We are committed to being carbon neutral by 2050. • Sustainable Packaging: We are committed to using an average of 30% recycled content or responsibly sourced biobased content in consumer-facing packaging. • Sustainable Sourcing: Our Board has approved a Supplier Code of Conduct, which address the standards of business conduct we expect from our suppliers.
Local Bounti is subject to state and local food safety regulation, including registration and licensing requirements for our facilities, enforcement of standards for our products and facilities by state and local health agencies and regulation of our trade practices in connection with selling our products.
Local Bounti is subject to state and local food safety regulation, including registration and licensing requirements for our facilities, enforcement of standards for our products and facilities by state and local agencies and regulation of our trade practices in connection with selling our products.
Branded product with SKU diversity . Local Bounti products are currently sold at approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, H-E-B, Sprouts, and AmazonFresh.
Branded product with SKU diversity . Local Bounti products are currently sold at approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, and H-E-B.
Local Bounti products are currently sold at approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, H-E-B, Sprouts, and AmazonFresh.
Local Bounti products are currently sold at approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, and H-E-B.
We distribute our products to approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, H-E-B, Sprouts, and AmazonFresh.
We distribute our products to approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, and H-E-B.
We believe that CEA represents an attractive alternative for industry players seeking greater reliability and will lead to further adoption. 8 On a more global basis, CEA addresses 12 of the 17 total U.N. Sustainable Development Goals, including: U.N.
We believe that CEA represents an attractive alternative for industry players seeking greater reliability and will lead to further adoption. 7 On a more global basis, CEA addresses 12 of the 17 total U.N. Sustainable Development Goals, including: U.N.
He previously served as our Senior Vice President of Strategy from June 2023 to December 2023 and our Co-Chief Executive Officer from November 2021 to June 2023. Mr. Hurlbert co-founded Local Bounti in August 2018. Mr.
He previously served as our Chief Executive Officer from December 2023 to March 2025, our Senior Vice President of Strategy from June 2023 to December 2023, and our Co-Chief Executive Officer from November 2021 to June 2023. Mr. Hurlbert co-founded Local Bounti in August 2018. Mr.
In the past five years, the western half of the United States has experienced water shortages that are increasing in severity. This has led to restricted usage, increased regulation, rising costs, and other restrictive measures as local jurisdictions work to manage the shortages. In the short-term future, Local Bounti anticipates these water shortages will continue.
In recent years, the western half of the United States has experienced water shortages that are increasing in severity. This has led to restricted usage, increased regulation, rising costs, and other restrictive measures as local jurisdictions work to manage the shortages. In the short-term future, Local Bounti anticipates these water shortages will continue.
Company Overview Local Bounti is a controlled environment agriculture ("CEA") company that produces sustainably grown produce, focused primarily on living and loose leaf lettuce, arugula, spinach, and basil. Founded in 2018, and headquartered in Hamilton, Montana, Local Bounti utilizes its patented Stack & Flow Technology ® to grow healthy food sustainably and affordably.
Company Overview Local Bounti is a controlled environment agriculture ("CEA") company that produces sustainably grown produce, focused primarily on living and loose leaf lettuce. Founded in 2018, and headquartered in Hamilton, Montana, Local Bounti utilizes its patented Stack & Flow Technology ® to grow healthy food sustainably and affordably.
Increasing focus on healthy eating. Over the past few decades, there has been a growing consumer focus on healthy eating. Individuals are increasingly conscious of their diets and are opting for more fresh vegetables and produce.
Over the past few decades, there has been a growing consumer focus on healthy eating. Individuals are increasingly conscious of their diets and are opting for more fresh vegetables and produce. Demand for fresh and local produce .
She also served as Chief Financial Officer from January 2017 to June 2019 and Chief Business Officer from June 2019 to March 2021 at Amyris, a science and technology leader in the research, development and production of sustainable ingredients for the clean health and beauty and flavors and fragrances markets. Prior to Amyris, Ms.
Valiasek served as Chief Financial Officer from January 2017 to June 2019 and Chief Business Officer from June 2019 to March 2021 at Amyris (NASDAQ: AMRS), a science and technology leader in the research, development, and production of sustainable ingredients for the clean health and beauty and flavors and fragrances markets. Prior to Amyris, Ms.
Through the Pete’s Acquisition, we significantly increased our growing footprint to include two then-existing facilities in California and one under-construction facility in Georgia. The Georgia facility initially became operational in July 2022 and was significantly expanded in 2023. In 2024 we completed construction of two new facilities in Washington and Texas, bringing our total facility count to six.
Through the Pete’s Acquisition, we significantly increased our growing footprint to include two then-existing facilities in California and one under-construction facility in Georgia. The Georgia facility became operational in July 2022 and was significantly expanded in 2023. In 2024 we completed construction of two new facilities in Washington and Texas.
Users may automatically receive email alerts and other information about Local Bounti by signing up for email alerts under the Investors tab of our website. 18 Executive Officers Below is biographical information about our executive officers as of March 30, 2025: Name Age Position Craig M.
Users may automatically receive email alerts and other information about Local Bounti by signing up for email alerts under the Investors tab of our website. 17 Executive Officers Below is biographical information about our executive officers as of March 27, 2026: Name Age Position Craig M.
In the future, we seek to co-locate with nationally recognized distributors in order to leverage their existing distribution networks and thereby decrease further the carbon footprint by not adding additional distribution, and we are currently evaluating implementation of this strategy through our existing distribution network.
We focus on the retail channel and complement our distribution with club and foodservice. In the future, we seek to co-locate with nationally recognized distributors in order to leverage their existing distribution networks and thereby decrease further the carbon footprint by not adding additional distribution, and we are currently evaluating implementation of this strategy through our existing distribution network.
Large-scale greenhouse operators have the largest market position and own and operate hundreds to thousands of acres of greenhouse. Most of the companies have the major portions of their operations in Mexico and Canada, but all are either looking to develop, are developing, or have already developed U.S.-based high-tech greenhouses. These companies include Mastronardi Produce Ltd. and Pure Flavor.
Large-scale greenhouse operators have the largest market position and own and operate hundreds to thousands of acres of greenhouse. Most of the companies have the major portions of their operations in Mexico and 15 Canada, but all are either looking to develop, are developing, or have already developed U.S.-based high-tech greenhouses.
We believe the protection of our patents, trademarks, copyrights and domain names are important to our success and we intend to aggressively protect our intellectual property rights. Employees and Human Capital Resources As of December 31, 2024, we had 333 full-time employees. This includes 214 non-exempt and 119 exempt employees.
We believe the protection of our patents, trademarks, copyrights and domain names are important to our success, and we intend to aggressively protect our intellectual property rights. Employees and Human Capital Resources As of December 31, 2025, we had 286 full-time employees. This includes 204 non-exempt and 82 exempt employees.
McCandless holds a J.D. from the University of Wisconsin Law School and a B.S. in Accounting from the University of Colorado at Boulder. Board of Directors Below is information about the members of our Board of Directors as of March 30, 2025: Name Age Position Craig M. Hurlbert 62 Co-Founder and Chief Executive Officer Travis M.
McCandless holds a J.D. from the University of Wisconsin Law School and a B.S. in Accounting from the University of Colorado at Boulder. Board of Directors Below is information about the members of our Board of Directors as of March 27, 2026: Name Age Position Craig M. Hurlbert 63 Co-Founder and Executive Chairman Travis M.
Our trademarks are valuable assets that reinforce the distinctiveness of our brand to customers and shoppers. In February 2024, the USPTO granted a patent covering our Stack & Flow Technology. Local Bounti has several additional patents submitted to the USPTO relating to its operations and technology.
Our trademarks are valuable assets that reinforce the distinctiveness of our brand to customers and shoppers. The USPTO has granted Local Bounti several patents relating to our operations and technology, including a patent relating to our Stack & Flow Technology. Local Bounti has several additional patent applications submitted to the USPTO.
Our stock keeping unit (“SKU”) assortment at the end of 2024 includes 32 SKUs across living and loose leaf lettuce, spinach, arugula, basil, organic and conventional, cress and value add product lines.
Our stock keeping unit (“SKU”) assortment at the end of 2025 includes 30 SKUs across living and loose leaf lettuce, arugula, organic and conventional, cress and value add product lines.
We believe we are innovating within the living and loose-leaf lettuce and herbs produce category, and we intend to further establish our Local Bounti branded line of products as synonymous with fresh, delicious, locally and sustainably grown food.
Continue to develop our brand to further our differentiation and customer and consumer loyalty . We believe we are innovating within the living and loose-leaf lettuce and herbs produce category, and we intend to further 12 establish our Local Bounti branded line of products as synonymous with fresh, delicious, locally and sustainably grown food.
CEA can also be implemented locally, which reduces the supply-chain risk associated with distanced or international suppliers. Recent events, including the COVID-19 pandemic, have forced grocers, restaurants, and other food providers to reconsider their supply chain risk and seek reliable and less variable suppliers.
CEA can also be implemented locally, which reduces the supply-chain risk associated with distanced or international suppliers. Events such as the COVID-19 pandemic, highlighted issues in the traditional food system, and have forced grocers, restaurants, and other food providers to reconsider their supply chain risk and seek reliable and less variable suppliers.
With the completion of our Texas and Washington facilities in 2024, Local Bounti now operates six facilities, spread across the Northwest, West, South and Southeastern United States, allowing us to capture a greater portion of the U.S. TAM.
With the completion of our Texas and Washington facilities in 2024, Local Bounti currently operates five facilities, spread across the Northwest, West, South and Southeastern United States (as well as our headquarters facility in Montana), allowing us to capture a greater portion of the U.S. TAM.
We will continue to consider opportunities for community engagement in future site selection process as well. Governance: Local Bounti sees sustainability as a competitive advantage and strives to be fully supportive of these endeavors at all levels of the Company. This alignment and focus will aid us in steering our long-term corporate actions in the right direction.
Governance: Local Bounti sees sustainability as a competitive advantage and strives to be fully supportive of these endeavors at all levels of the Company. This alignment and focus will aid us in steering our long-term corporate actions in the right direction.
Key considerations include meeting known demand from key existing customers within the network, as well as optimizing freight routes to ensure that transportation is optimized to limit cost while enhancing customer service with consistent delivery schedules.
We regularly assess our pipeline of future farm locations to maximize our national distribution footprint. Key considerations include meeting known demand from key existing customers within the network, as well as optimizing freight routes to ensure that transportation is optimized to limit cost while enhancing customer service with consistent delivery schedules.
Market Overview According to the U.N., the world’s population is projected to keep growing over the next 50 to 60 years, reaching a peak of approximately 10.3 billion people in the mid-2080s, up from 8.2 billion in 2024. The majority will reside in urban areas, which creates challenges related to energy, transportation, housing, and food availability.
Market Overview According to the U.N., the world’s population is projected to keep growing over the next 50 to 60 years, reaching a peak of approximately 10.3 billion people in the mid-2080s, up from 8.2 billion in 2024.
McCandless was Chief Compliance Officer, Assistant General Counsel, and Corporate Secretary of Royal Gold, Inc. (Nasdaq: RGLD), a precious metals streaming and royalty company, from January 2020 to January 2022.
McCandless has served as our General Counsel since February 2022 and our Corporate Secretary since March 2022. Before joining Local Bounti, Ms. McCandless was Chief Compliance Officer, Assistant General Counsel, and Corporate Secretary of Royal Gold, Inc. (Nasdaq: RGLD), a precious metals streaming and royalty company, from January 2020 to January 2022.
We strive to hire locally and promote employees internally by investing in internal and community training programs. All full time Local Bounti employees receive benefits within their first month of work.
We strive to hire locally and promote employees internally by investing in internal and community training programs. All full time Local Bounti employees receive benefits within their first month of work. To keep up with the evolving market, we survey all employees throughout the year regarding various aspects of their employment experience.
Hurlbert 62 Chief Executive Officer and Director Kathleen Valiasek 61 President and Chief Financial Officer Margaret McCandless 52 General Counsel and Corporate Secretary Craig M. Hurlbert. Mr. Hurlbert has served as our Chief Executive Officer since December 2023 and as a member of our Board since November 2021.
Hurlbert 63 Executive Chairman Kathleen Valiasek 62 President and Chief Executive Officer Dane Almassy 47 Chief Commercial Officer Anthony Hughes 61 Interim Chief Financial Officer Margaret McCandless 53 General Counsel and Corporate Secretary Craig M. Hurlbert. Mr. Hurlbert has served as our Executive Chairman since March 2025 and as a member of our Board since November 2021.
We potentially compete with traditional greenhouse producers, as well as CEA companies using high technology greenhouses such as Bright Farms, Revol Greens, Gotham Greens, and Little Leaf Farms. We also potentially compete against vertical farming operators, including AeroFarms and Plenty.
We potentially compete with traditional greenhouse producers, as well as CEA companies using high technology greenhouses such as Bright Farms and Little Leaf Farms.
Local Bounti produce is grown with significantly less pesticides and herbicides than traditional field-grown produce, is non-GMO, and is certified with Harmonized Good Agricultural Practices under a Global Food Safety Initiative ("GFSI") benchmarked program. Cargill Relationship.
Local Bounti produce is grown with significantly less pesticides and herbicides than traditional field-grown produce, is non-GMO, and is certified with Harmonized Good Agricultural Practices under a Global Food Safety Initiative ("GFSI") benchmarked program. Cargill Relationship. We have a credit agreement with Cargill Financial, as described in Note 7, Debt , of the Consolidated Financial Statements included in Item 8.
Our operations, and those of our distributors and suppliers, are subject to various laws and regulations relating to environmental protection, water usage and discharge, water conservation and worker health and safety matters. 17 Trademarks and Other Intellectual Property Local Bounti owns patents, trademarks and other proprietary rights that are important to our business, including our principal trademarks for "Local Bounti" and "Stack & Flow Technology." As appropriate, our trademarks are registered with the United States Patent and Trademark Office ("USPTO") and select trademarks have been extended to multiple international markets.
Trademarks and Other Intellectual Property Local Bounti owns patents, trademarks and other proprietary rights that are important to our business, including our principal trademarks for "Local Bounti" and "Stack & Flow Technology." As appropriate, our trademarks are registered with the United States Patent and Trademark Office ("USPTO") and select trademarks have been extended to certain international markets.
More information on our key sustainability programs, goals, commitments, and metrics can be found in our most recent sustainability report, which is available on our website. Information contained on our website or connected thereto does not constitute part of, and is not incorporated by reference into, this Annual Report on Form 10-K.
Information contained on our website or connected thereto does not constitute part of, and is not incorporated by reference into, this Annual Report on Form 10-K.
Valiasek was typically engaged for critical roles on multi-year assignments including M&A transactions, debt and equity financings, IPOs, and spin-offs. Ms. Valiasek holds a B.B.A. from the University of Massachusetts at Amherst. Margaret McCandless. Ms. McCandless has served as our General Counsel since February 2022 and our Corporate Secretary since March 2022. Before joining Local Bounti, Ms.
Valiasek was typically engaged for critical roles on multi-year assignments including M&A transactions, debt and equity financings, IPOs, and spinoffs. Ms. Valiasek holds a B.B.A. from the University of Massachusetts at Amherst. Dane Almassy. Mr. Almassy has served as our Chief Commercial Officer since August 2025. Prior to joining Local Bounti, Mr.
Additionally, consumer demands are pushing agricultural businesses to produce food in safer, more transparent, personalized, and sustainable ways. Expanding Global Agriculture Crisis. The world is facing a rapidly expanding global agriculture crisis.
The majority will reside in urban areas, which creates challenges related to energy, transportation, housing, and food availability. 6 Additionally, consumer demands are pushing agricultural businesses to produce food in safer, more transparent, personalized, and sustainable ways. Expanding Global Agriculture Crisis. The world is entering a rapidly accelerating agricultural crisis.
Our facilities have been purposely designed for rapid expansion, allowing us to potentially build and commission a facility within 15 months of land acquisition. For pre-existing facilities like those acquired with the Pete's Acquisition, we may update facilities, where appropriate, using our patented Stack & Flow Technology ® , which would then benefit from the same baseline platform.
For pre-existing facilities like those acquired with the Pete's Acquisition, we may update facilities, where appropriate, using our patented Stack & Flow Technology, which would then benefit from the same baseline platform.
We report on human capital metrics, including gender balance, racial and ethnic diversity in our workforce, employee engagement and professional development. We have supplier programs that integrate sustainability in the procurement of goods and services. We have reported annually on GHG emissions since our first full year of commercial production.
Our annual sustainability reporting and key metrics are aligned with the priorities we have set on human capital, professional development, health, safety, and ethics. We report on human capital metrics, including gender balance, racial and ethnic diversity in our workforce, employee engagement and professional development. We have supplier programs that integrate sustainability in the procurement of goods and services.
The offtake agreement provides for the sale of defined minimum quantities of leafy greens from our Georgia and Texas facilities and runs through September 2028. 5 We intend to continue to increase our production capacity and expand our reach to new markets, new geographies, and new customers through building of new facilities, the expansion of existing facilities, or the acquisition of existing greenhouse facilities, which we would evaluate to update with our Stack & Flow Technology ® .
Our leafy greens consist of ready-to-eat blends, value add salad kits, and specialty greens like arugula. 5 We intend to continue to increase our production capacity and expand our reach to new markets, new geographies, and new customers through building of new facilities, the expansion of existing facilities, or the acquisition of existing greenhouse facilities, which we would evaluate to update with our Stack & Flow Technology.
The Nominating and Corporate Governance Committee periodically reviews our carbon and water data and provides oversight for climate-related risks and opportunities to operations. In 2023, the Company conducted a climate change scenario based approach to its work to identify and assess climate-related risks and opportunities.
In 2023, the Company conducted a climate change scenario based approach to its work to identify and assess climate-related risks and opportunities.
The FDA and USDA generally have the authority to inspect our facilities and require that certain information appear on our product labels and, more generally, that our labels and labeling be truthful and non-misleading. Similarly, the FTC requires that Local Bounti's marketing and advertising be truthful, non-misleading, not deceptive to consumers and not otherwise an unfair means of competition.
Similarly, the FTC requires that Local Bounti's marketing and advertising be truthful, non-misleading, not deceptive to consumers and not otherwise an unfair means of competition.
We actively engage with our stakeholders, internally and externally, to encourage input on the materiality of various sustainability issues to Local Bounti and incorporate input into our strategic planning and sustainability reporting.
We periodically engage with our stakeholders, internally and externally, to encourage input on the materiality of various sustainability issues to Local Bounti and incorporate input into our strategic planning and sustainability reporting. We disclose our impacts in our annual sustainability reports (using the Global Reporting Initiative ("GRI") and Sustainability Accounting Standards Board ("SASB") frameworks) and other disclosures.
In the second quarter of 2024, we commenced operations at both our Texas and Washington facilities and began shipping product. We were able to scale these facilities in less than one-third of the time that it took to scale Georgia given the advantages of purpose-built design and other efficiencies that were integrated.
We were able to scale these facilities in less than one-third of the time that it took to scale Georgia given the advantages of purpose-built design and other efficiencies that were integrated. The Washington facility bolsters our distribution capabilities with new and existing customers in the Pacific Northwest to serve our expanding customer base.
To keep up with the evolving market, we survey all employees throughout the year regarding various aspects of their employment experience. 15 Social – Community: We prioritize communities where our facilities are located and as a corporation are and will continue donating produce to our communities. These investments are supported by large on-going local purchases and significant employment.
Social – Community: We prioritize communities where our facilities are located and as a corporation are and will continue donating produce to our communities. These investments are supported by large on-going local purchases and significant employment. We will continue to consider opportunities for community engagement in future site selection process as well.
Valiasek has served as our President since June 2024 and our Chief Financial Officer since November 2021.
Valiasek has served as our Chief Executive Officer since March 2025 and President since June 2024. She has also served as a member of our Board since December 2025. Ms. Valiasek previously served as our Chief Financial Officer from November 2021 to December 2025.
Certain regulations under the FDA’s Food Safety Modernization Act are still being developed and implemented, including recently adopted product traceability requirements for various products including leafy greens.
Certain regulations under the FDA’s Food Safety Modernization Act are still being developed and implemented, including product traceability requirements for various products including leafy greens. The FDA and USDA generally have the authority to inspect our facilities and require that certain information appear on our product labels and, more generally, that our labels and labeling be truthful and non-misleading.
At the end of 2024, Local Bounti offered 32 SKUs across living and loose leaf lettuce, spinach, arugula, basil, organic and conventional, cress and value add product lines, and intends to continue to expand 11 its SKUs to meet customer demand.
At the end of 2025, Local Bounti offered 30 SKUs across living and loose leaf lettuce, arugula, organic and conventional, cress and value add product lines, and intends to continue to expand its SKUs to meet customer demand. 10 We believe that SKU diversity in these markets will allow us to capture more in-store real estate and will result in consumer loyalty across multiple regional markets.
We believe growing healthy vegetables is good business, and our growing technology delivers clean produce with safer growing methods, which we believe benefits all stakeholders and differentiates us from traditional agriculture. We expect that consumer demand for clean, nutritious, locally grown, and high-quality products will increase over time.
We believe this necessitates a shift toward sustainability in agriculture practices to meet growing demands for cleaner, healthier produce. We believe growing healthy vegetables is good business, and our growing technology delivers clean produce with safer growing methods, which we believe benefits all stakeholders and differentiates us from traditional agriculture.
Joyner 42 Co-Founder Pamela Brewster 55 Principal at Orange Strategies LLC Jennifer Carr-Smith 53 President of JCS Advisory Services, LLC Edward C. Forst 64 Former Chairman and Partner of Lion Capital Mark J. Nelson 56 Former Chief Financial Officer and Treasurer of Beyond Meat, Inc. Matthew Nordby 45 Managing Partner of Flume Ventures 19
Joyner 43 Co-Founder Kathleen Valiasek 62 President and Chief Executive Officer Pamela Brewster 56 Principal at Orange Strategies LLC Michael Molnar 52 Co-Chairman of OnCore Golf Mark J. Nelson 57 Former Chief Financial Officer and Treasurer of Beyond Meat, Inc. Matthew Nordby 46 Managing Partner of Flume Ventures Charles R. Schwab, Jr. 61 Former Managing Partner of Chess Ventures 19
Our Carpinteria Facility was originally built in 1976, with many additions happening over 30 years, the latest in the mid-2000s.
Management is exploring various utilization options, including supporting capacity needs within the Company’s existing network as well as potential third-party commercial arrangements. Carpinteria Facility. Our Carpinteria Facility was originally built in 1976, with many additions happening over 30 years, the latest in the mid-2000s.
Continue to develop and diversify our sales channels and geographies . We intend to expand our sales channels where we can enhance our brand and maximize the efficiency of our distribution. We focus on the retail channel and complement our distribution with foodservice.
At the end of 2025, we offered 30 SKUs across living and loose leaf lettuce, arugula organic and conventional, cress and value add product lines. Continue to develop and diversify our sales channels and geographies . We intend to expand our sales channels where we can enhance our brand and maximize the efficiency of our distribution.
Our compact, efficient, and local farms provide fresh produce with minimum transportation distances.
We expect that consumer demand for clean, nutritious, locally grown, and high-quality products will increase over time. Our compact, efficient, and local farms provide fresh produce with minimum transportation distances.
Our first facility in Hamilton, Montana (the "Montana Facility") commenced construction in 2019 and reached full commercial operation by the second half of 2020. In 2022, we acquired California-based complementary greenhouse farming company Hollandia Produce Group, Inc. and its subsidiaries, which operated under the name Pete’s (the "Pete's Acquisition").
Management is exploring various utilization options, including supporting capacity needs within the Company’s existing network as well as potential third-party commercial arrangements. In 2022, we acquired California-based complementary greenhouse farming company Hollandia Produce Group, Inc. and its subsidiaries, which operated under the name Pete’s (the "Pete's Acquisition").
Removed
We recently introduced new Grab & Go Salads and additions to our baby leaf portfolio with several high-velocity offerings, including Spinach, Arugula, and Basil. In addition, we introduced 50/50 blend and power greens in the third quarter of 2024.
Added
Our first facility in Hamilton, Montana (the "Montana Facility") commenced construction in 2019, reached full commercial operation by the second half of 2020, and now acts as a corporate headquarters without active commercial operations. The Company is currently evaluating the future commercial use of its Montana facility because we no longer have additional capacity at other facilities.
Removed
We signed an offtake agreement with Sam's Club in October 2022 for our leafy greens production initially from our Georgia facility and now including both our Georgia and Texas facilities.
Added
Long-standing Food and Agriculture Organization of the United Nations projections warn that by 2050 we will need 60–70% more food to feed a larger global population — yet land, water, and soil resources are deteriorating faster than our ability to expand traditional farming. Updated analyses from the U.N. Food and Agriculture Organization and the U.N.
Removed
We are working to develop key partnerships with agricultural and equipment vendors to ensure efficient construction. As a result, we believe we can build, scale and commission a facility within 15 months of acquiring the underlying land, which we believe is significantly faster than our competitors.
Added
Convention to Combat Desertification show that up to 40% of global land is already degraded, and degradation is advancing at millions of hectares per year. Water stress is compounding the problem: over half of irrigated agriculture now depends on regions where water demand has exceeded sustainable limits, threatening long-term crop yields. Increasing focus on healthy eating.
Removed
This strategy enables us to reduce the distance of our farms to our customers by more than 50% of the distance that is standard in the industry, mitigate supply chain risk, simplify transportation logistics and reduce food spoilage and waste.
Added
The Montana Facility was built in 2019 and reached full commercial operation by the second half of 2020, and now acts as a corporate headquarters without active commercial operations. The Company is currently evaluating the future commercial use of its Montana facility because we no longer have additional capacity at other facilities.
Removed
We expanded our product assortment in 2024 by introducing several high-velocity offerings, including Arugula, Spinach, Spring Mix & Spinach Blend, Power Crisp, and Basil. We began shipping our entire assortment to customers during the third quarter of 2024 and added additional distribution with retailers in the mass and grocery channels in the fourth quarter.
Added
Management is exploring various utilization options, including supporting capacity needs within the Company’s existing network as well as potential third-party commercial arrangements. Our Georgia facility was acquired as part of the Pete's Acquisition during its first phase of construction. The first phase of this facility became operational in July 2022 and was further expanded in 2023.
Removed
We continued to rollout Grab & Go Salads to customers throughout the Pacific Northwest and Southern United States in 2024. The Grab & Go Salads assortment includes four unique flavor offerings: Artisanal Chicken Caesar, Memphis Inspired Chicken, Sweet Poppy Power, and Modern Green Style.
Added
Select Local Bounti Product Offerings Montana Facility. Our Montana Facility was built in 2019 and reached commercial operations in the second half of 2020, and now acts as a corporate headquarters without active commercial operations. The Company is currently evaluating the future commercial use of its Montana facility because we no longer have additional capacity at other facilities.
Removed
In the second quarter of 2025, we plan expand our product assortment further, with the launch of new, built-in-house salad kits, adding more optionality for our end consumers.
Added
We have reported annually on GHG emissions since our first full year of commercial production. More information on our key sustainability programs, goals, commitments, and metrics can be found in our most recent sustainability report, which is available on our website.
Removed
We believe the power of our brand and the quality of our products allow customers and consumers to associate Local Bounti produce with freshness and sustainability, and choose our products to enhance their diets while safeguarding the environment.
Added
Our operations, and those of our distributors and suppliers, are subject to various laws and regulations relating to environmental protection, water usage and discharge, water conservation and worker health and safety matters.
Removed
Paired with our geographically distributed production, we believe that our branding and SKU diversity will allow us to capture greater market share with 6 customers and consumers who seek a diversity of leafy green produce and are oriented to locally produced, sustainable food.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

77 edited+40 added−22 removed288 unchanged
Biggest changeAdditionally, if there is an occurrence of an uncured event of default, Cargill Financial has the right to foreclose on all of the Company's and its subsidiaries' assets, and securities in the Company could be rendered worthless. • Local Bounti's ability to decrease its cost of goods sold over time is dependent on its ability to scale its operations and Local Bounti may not be able to achieve such decreases due to factors outside of its control such as inflation or global supply chain interruptions. • Any damage to or problems with Local Bounti's CEA facilities could severely impact Local Bounti's operations and financial condition. • There can be no assurance that future acquisitions, investments or expansions of scope of existing relationships will have a beneficial impact on Local Bounti's business, financial condition and results of operations. • Local Bounti may acquire additional greenhouses or other indoor farming operations, which may divert our management's attention and result in additional dilution to our stockholders.
Biggest changeAdditionally, if there is an occurrence of an uncured event of default, Cargill Financial has the right to foreclose on all of the Company's and its subsidiaries' assets, and securities in the Company could be rendered worthless. • Local Bounti currently relies on a limited number of facilities for its operations. • The build-out of new facilities and retrofitting of acquired facilities will require significant expenditures for capital improvements and operating expenses and may be subject to delays in construction and unexpected costs due to governmental approvals and permitting requirements, reliance on third parties for construction, delays relating to material delivery and supply chains, and fluctuating material prices. • Local Bounti's ability to decrease its cost of goods sold over time is dependent on its ability to scale its operations and Local Bounti may not be able to achieve such decreases due to factors outside of its control such as inflation or global supply chain interruptions. • Any damage to or problems with Local Bounti's CEA facilities could severely impact Local Bounti's operations and financial condition. • There can be no assurance that future acquisitions, investments or expansions of scope of existing relationships will have a beneficial impact on Local Bounti's business, financial condition and results of operations. • Local Bounti may acquire additional greenhouses or other indoor farming operations, which may divert our management's attention and result in additional dilution to our stockholders.
We may be unable to integrate additional acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions. • Local Bounti depends on employing a skilled local labor force, and failure to attract and retain qualified employees could negatively impact its business, results of operations and financial condition. • If Local Bounti fails to develop and maintain its brand, its business could suffer. • Local Bounti's estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which it competes achieves the forecasted growth, Local Bounti's business could fail to grow at similar rates, if at all. • If Local Bounti cannot maintain its company culture or focus on its vision as it grows, Local Bounti's business and competitive position may be harmed. • Local Bounti may be unable to successfully execute on its growth strategy. 20 • Local Bounti's operating costs to grow and sell its products may be higher than expected, which could impact its results and financial condition. • If Local Bounti's estimates or judgments relating to its critical accounting policies prove to be incorrect, its results of operations could be adversely affected. • If Local Bounti fails to continue to maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial results in a timely manner, which may adversely affect investor confidence in Local Bounti. • Local Bounti's ability to use its net operating loss ("NOL") carryforwards to offset future taxable income may be subject to certain limitations. • Local Bounti faces risks inherent in the CEA business, including the risks of diseases and pests. • Local Bounti may not be able to compete successfully in the highly competitive natural food market. • Local Bounti's ability to generate and grow revenue is dependent on its ability to increase the yield in each of the anticipated product lines it intends to grow.
We may be unable to integrate additional acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions. • Local Bounti depends on employing a skilled local labor force, and failure to attract and retain qualified employees could negatively impact its business, results of operations and financial condition. • If Local Bounti fails to develop and maintain its brand, its business could suffer. • Local Bounti's estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which it competes achieves the forecasted growth, Local Bounti's business could fail to grow at similar rates, if at all. 20 • If Local Bounti cannot maintain its company culture or focus on its vision as it grows, Local Bounti's business and competitive position may be harmed. • Local Bounti may be unable to successfully execute on its growth strategy. • Local Bounti's operating costs to grow and sell its products may be higher than expected, which could impact its results and financial condition. • If Local Bounti's estimates or judgments relating to its critical accounting policies prove to be incorrect, its results of operations could be adversely affected. • If Local Bounti fails to continue to maintain an effective system of internal control over financial reporting, it may not be able to accurately report its financial results in a timely manner, which may adversely affect investor confidence in Local Bounti. • Local Bounti's ability to use its net operating loss ("NOL") carryforwards to offset future taxable income may be subject to certain limitations. • Local Bounti faces risks inherent in the CEA business, including the risks of diseases and pests. • Local Bounti may not be able to compete successfully in the highly competitive natural food market. • Local Bounti's ability to generate and grow revenue is dependent on its ability to increase the yield in each of the anticipated product lines it intends to grow.
Further, there are numerous conditions precedent to drawing down amounts available under the credit facility, including that amounts remaining to be drawn are at Cargill Financial's discretion. If we are unable to meet these conditions precedent, we may not be able to draw down funds available under the facilities, which could materially and adversely affect our business and operations.
Further, there are numerous conditions precedent to drawing down remaining amounts available under the credit facility, including that amounts remaining to be drawn are at Cargill Financial's discretion. If we are unable to meet these conditions precedent, we may not be able to draw down funds available under the facilities, which could materially and adversely affect our business and operations.
Our operations use intellectual property that is patented, and our trademarks are valuable assets that reinforce the distinctiveness of our brand to consumers. We believe that the protection of our patents, trademarks, copyrights and domain names is important to its success. Local Bounti has also invested a significant amount of money in establishing and promoting its trademarked brand.
Our operations use intellectual property that is patented, and our trademarks are valuable assets that reinforce the distinctiveness of our brand to consumers. We believe that the protection of our patents, trademarks, copyrights and domain names is important to our success. Local Bounti has also invested a significant amount of money in establishing and promoting its trademarked brand.
For one or more of these transactions, we may: • issue additional equity securities that would dilute our existing stockholders; • use cash that we may need in the future to operate our business; • encounter difficulties retaining key employees of the acquired company or integrating diverse facility operations or business cultures; • incur large charges or substantial liabilities; • incur additional debt on terms unfavorable to us or that we are unable to repay; • divert our resources to understand and comply with new jurisdictions if such acquired company is in a new country; and/or • become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges.
For one or more of these transactions, we may: • issue additional equity securities that would dilute our existing stockholders; • use cash that we may need in the future to operate our business; • encounter difficulties retaining key employees of the acquired company or integrating diverse facility operations or business cultures; 25 • incur large charges or substantial liabilities; • incur additional debt on terms unfavorable to us or that we are unable to repay; • divert our resources to understand and comply with new jurisdictions if such acquired company is in a new country; and/or • become subject to adverse tax consequences, substantial depreciation, or deferred compensation charges.
Local Bounti's defense of intellectual property rights claims brought against it or its customers, suppliers and partners, with or without merit, could adversely affect Local Bounti's relationships with its customers, may deter future customers from purchasing its products, could be time-consuming, expensive to litigate or settle, divert management 31 resources and attention and force Local Bounti to acquire intellectual property rights and licenses, which may involve substantial royalty or other payments and may not be available on acceptable terms or at all.
Local Bounti's defense of intellectual property rights claims brought against it or its customers, suppliers and partners, with or without merit, could adversely affect Local Bounti's relationships with its customers, may deter future customers from purchasing its products, could be time-consuming, expensive to litigate or settle, divert management resources and attention and force Local Bounti to acquire intellectual property rights and licenses, which may involve substantial royalty or other payments and may not be available on acceptable terms or at all.
Local Bounti's effective income tax rate could be adversely affected by various factors, including, but not limited to, changes in the mix of earnings in tax jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in existing tax policies, laws, regulations or rates, changes in the level of non-deductible expenses (including share-based compensation), changes in the location of Local Bounti's operations, changes in Local Bounti's future levels of research and development spending, mergers and acquisitions or the results of examinations by various tax authorities.
Local Bounti's effective income tax rate could be adversely affected by various factors, including, but not limited to, changes in the mix of earnings in tax jurisdictions with different statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in existing tax policies, laws, 39 regulations or rates, changes in the level of non-deductible expenses (including share-based compensation), changes in the location of Local Bounti's operations, changes in Local Bounti's future levels of research and development spending, mergers and acquisitions or the results of examinations by various tax authorities.
Local Bounti also depends on consistent access of other inputs and supplies to operate its facilities reliably, including water supply, nutrients, growth media, food safety testing, sanitation supplies and packaging materials, among others. If the cost of any of these inputs increases materially, then Local Bounti's financial results could be adversely affected. • Distribution of Finished Goods.
Local Bounti also depends on consistent access of other inputs and supplies to operate its facilities reliably, 28 including water supply, nutrients, growth media, food safety testing, sanitation supplies and packaging materials, among others. If the cost of any of these inputs increases materially, then Local Bounti's financial results could be adversely affected. • Distribution of Finished Goods.
The costs to procure such materials and services to build new or expanded facilities may fluctuate widely based on the impact of numerous factors beyond Local Bounti's control including, international, economic and political trends, foreign currency fluctuations, expectations of inflation, global or regional consumptive patterns, speculative 23 activities and increased or improved production and distribution methods.
The costs to procure such materials and services to build new or expanded facilities may fluctuate widely based on the impact of numerous factors beyond Local Bounti's control, including international, economic and political trends, foreign currency fluctuations, expectations of inflation, global or regional consumptive patterns, speculative activities and increased or improved production and distribution methods.
Any issues affecting Local Bounti's access to or relations with workers could negatively affect facility operations or financial condition. 24 • Food Safety and Quality Assurance. Local Bounti is subject to food and safety standards set forth by its own internal practices and by regulatory authorities, including the USDA as Harmonized Good Agricultural Practices (GAP Plus+).
Any issues affecting Local Bounti's access to or relations with workers could negatively affect facility operations or financial condition. • Food Safety and Quality Assurance. Local Bounti is subject to food and safety standards set forth by its own internal practices and by regulatory authorities, including the USDA as Harmonized Good Agricultural Practices (GAP Plus+).
Any expansion in Local Bounti's market depends on a number of factors, including the cost and perceived value associated with its product and those of its competitors. Even if the market in which Local Bounti competes meets the size estimates and growth forecasts, Local Bounti's business could fail to grow at the rate it anticipates, if at all.
Any expansion in Local Bounti's market depends on a number of factors, including the cost and perceived value associated with its 26 product and those of its competitors. Even if the market in which Local Bounti competes meets the size estimates and growth forecasts, Local Bounti's business could fail to grow at the rate it anticipates, if at all.
If Local Bounti does not align production capacity of its new commercial facilities with consumer demand and efficient distribution channels, or if Local Bounti does not maintain competitive pricing, it may have underutilized assets which do not perform to expected operational results or profitability, which could adversely affect its business, financial condition and results of operations.
If Local Bounti does not align production capacity of its new commercial facilities with consumer demand and efficient distribution channels, or if Local Bounti does not maintain competitive pricing, it may have underutilized 27 assets which do not perform to expected operational results or profitability, which could adversely affect its business, financial condition and results of operations.
Local Bounti also has no control over its products once a third-party distributor takes possession of them. Distributors or consumers may store Local Bounti products under conditions and for periods of time inconsistent with the USDA, the FDA, and other governmental guidelines, which may adversely affect the quality and safety of Local Bounti's products.
Local Bounti also has no control over its products once a third-party distributor takes possession of them. Distributors or consumers may store Local Bounti products under conditions and for periods of time inconsistent with 36 the USDA, the FDA, and other governmental guidelines, which may adversely affect the quality and safety of Local Bounti's products.
Global demand on shipping and transport services may cause Local Bounti to experience delays in the future, which could impact Local Bounti's ability to obtain materials or build its facilities in a timely manner. These factors could otherwise disrupt Local Bounti's operations and could negatively impact its business, financial condition and results of operations.
Global demand on shipping and transport services may cause Local Bounti to experience delays in the future, which could impact Local Bounti's ability to obtain materials or build its facilities in a timely manner. These factors could otherwise disrupt Local Bounti's operations and could negatively impact its business, financial condition and 23 results of operations.
A general decline in the consumption of Local Bounti products could occur at any time as a result of change in consumer spending habits, including an inability to purchase Local Bounti products due to financial hardship, increased price sensitivity, inflationary concerns, or other local or global economic issues. • Desire for Sustainable Products.
A general decline in the consumption of Local Bounti products could occur at any time as a result of change in consumer spending habits, including an inability to purchase Local Bounti products 33 due to financial hardship, increased price sensitivity, inflationary concerns, or other local or global economic issues. • Desire for Sustainable Products.
Any claims or litigation, even if fully indemnified or insured, could damage Local Bounti's reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future. Local Bounti's business involves significant risks and uncertainties that may not be covered by indemnity or insurance.
Any claims or litigation, even if fully indemnified or insured, could damage Local Bounti's reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future. 34 Local Bounti's business involves significant risks and uncertainties that may not be covered by indemnity or insurance.
We cannot predict if investors will find the common stock less attractive because we will rely on these exemptions. If some investors find the common stock less attractive as a result, there may be a less active trading market for the common stock and our share price may be more volatile. Item 1B. Unresolved Staff Comments None. 42
We cannot predict if investors will find the common stock less attractive because we will rely on these exemptions. If some investors find the common stock less attractive as a result, there may be a less active trading market for the common stock and our share price may be more volatile. Item 1B. Unresolved Staff Comments None.
Since inception, we have filed several patents protecting various features of our growing technology, including a patent that has been issued for our Stack & Flow Technology ® . We also rely on unpatented proprietary expertise and copyright protection to develop and maintain its competitive position.
Since inception, we have filed several patents protecting various features of our growing technology, including a patent that has been issued for our Stack & Flow Technology ® . We also rely on unpatented proprietary expertise and copyright protection to develop and maintain our competitive position.
Local Bounti may not be successful in identifying trends in consumer preferences and growing or developing products that respond to such trends in a timely manner. Local Bounti or its retail partners also may not be able to effectively promote Local Bounti products by marketing and advertising campaigns and gain market 33 acceptance.
Local Bounti may not be successful in identifying trends in consumer preferences and growing or developing products that respond to such trends in a timely manner. Local Bounti or its retail partners also may not be able to effectively promote Local Bounti products by marketing and advertising campaigns and gain market acceptance.
Any of the foregoing provisions and terms that have the effect of delaying or deterring a change in control could limit the opportunity for 38 stockholders to receive a premium for their shares of common stock, and could also affect the price that some investors are willing to pay for the common stock.
Any of the foregoing provisions and terms that have the effect of delaying or deterring a change in control could limit the opportunity for stockholders to receive a premium for their shares of common stock, and could also affect the price that some investors are willing to pay for the common stock.
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with U.S. GAAP. In the past, we have identified material weaknesses in our internal control over financial reporting.
Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with U.S. GAAP. In the past, we have identified material weaknesses in our internal control over financial reporting.
Such incidents could also expose Local Bounti to product 35 liability, negligence, or other lawsuits, including consumer class action lawsuits. Any claims brought against us may exceed or be outside the scope of Local Bounti's existing or future insurance coverage or limits.
Such incidents could also expose Local Bounti to product liability, negligence, or other lawsuits, including consumer class action lawsuits. Any claims brought against us may exceed or be outside the scope of Local Bounti's existing or future insurance coverage or limits.
If current stockholders sell, or 41 indicate an intent to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline significantly and make it difficult for us to raise funds through securities offerings in the future.
If current stockholders sell, or indicate an intent to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline significantly and make it difficult for us to raise funds through securities offerings in the future.
If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common stock in the public market, the trading price of our common stock could decline significantly and make it difficult for us to raise funds through securities offerings in the future.
If our stockholders sell, or the market perceives that our stockholders intend to sell, substantial amounts of our common 42 stock in the public market, the trading price of our common stock could decline significantly and make it difficult for us to raise funds through securities offerings in the future.
If the useful life turns out to be materially shorter than expected, the Company may need to invest additional capital to replace these assets, and the corresponding depreciation expense may be greater than expected which would affect the Company's profitability and 28 financial condition generally.
If the useful life turns out to be materially shorter than expected, the Company may need to invest additional capital to replace these assets, and the corresponding depreciation expense may be greater than expected which would affect the Company's profitability and financial condition generally.
Such factors include consumer preference, consumer income, consumer confidence in and perception of the safety and quality of Local Bounti products and shifts in the perceived value for Local Bounti products relative to alternatives. • Consumer Preferences. Local Bounti's current products include loose leaf and living lettuce, herbs, and pre-packaged salads.
Such factors include consumer preference, consumer income, consumer confidence in and perception of the safety and quality of Local Bounti products and shifts in the perceived value for Local Bounti products relative to alternatives. • Consumer Preferences. Local Bounti's current products include loose leaf and living lettuce and pre-packaged salads.
Local Bounti may rely on certain seed supplies that may be specifically tailored to grow high-quality plants in its CEA facilities. Seeds may originate from field-grown plants, where seeds are harvested, then bred to generate seed inventory.
Local Bounti may rely on certain seed supplies that may be specifically tailored to grow high-quality plants in its CEA facilities. Seeds may originate from field-grown plants, where seeds are 30 harvested, then bred to generate seed inventory.
In general, under Section 382, a corporation 39 that undergoes an “ownership change,” as defined in the Code, is subject to limitations on its ability to utilize its pre-ownership change NOL carryforwards to offset future taxable income.
In general, under Section 382, a corporation that undergoes an “ownership change,” as defined in the Code, is subject to limitations on its ability to utilize its pre-ownership change NOL carryforwards to offset future taxable income.
If we are unable to secure additional financing in the future, we will not be able to continue as a going concern. If additional financing is available, financing terms may lead to significant dilution of our stockholders’ equity (deficit).
If we are unable to secure additional financing in the future, we will not be able to continue as a going concern. If additional financing is available, financing terms may lead to significant dilution of our stockholders’ deficit.
Such events could erode consumer confidence in and demand for Local Bounti's products, which could impact its ability to operate facilities reliably, and could generally cause serious adverse effects to Local Bounti's business and financial condition. • Weather.
Such events could erode consumer confidence in and demand for Local Bounti's products, which could impact its ability to operate facilities reliably, and could generally cause serious adverse effects to Local Bounti's business and financial condition. 24 • Weather.
This could materially and adversely affect Local Bounti's business, prospects, financial condition and operating results. 37 Risks Relating to Ownership of Our Securities The price of our securities may be volatile or may decline regardless of our operating performance.
This could materially and adversely affect Local Bounti's business, prospects, financial condition and operating results. Risks Relating to Ownership of Our Securities The price of our securities may be volatile or may decline regardless of our operating performance.
These confidentiality agreements with team members and certain consultants, contract employees, suppliers and independent contractors generally require that all information made known to them be kept strictly confidential.
These confidentiality agreements with team members and certain consultants, contract 31 employees, suppliers and independent contractors generally require that all information made known to them be kept strictly confidential.
During the year ended December 31, 2021, we have experienced changes in our share ownership as a result of the merger of Legacy Local Bounti into Leo Holdings III Corp in November 2021, which may limit the future use of our NOLs pursuant to Section 382 of the Code.
During the year ended December 31, 2021, we experienced changes in our share ownership as a result of the merger of Legacy Local Bounti into Leo Holdings III Corp in November 2021, which limit the future use of our NOLs pursuant to Section 382 of the Code.
Political issues and considerations, including potential tariffs, could have a significant effect on Local Bounti's business. There is uncertainty with respect to, among other things, legislation, regulation and government policy at the federal, state and local levels.
Political issues and considerations, including tariffs, could have a significant effect on Local Bounti's business. There is continuing uncertainty with respect to, among other things, legislation, regulation and government policy at the federal, state and local levels.
If Local Bounti is unable to increase the yield in each or most of these product lines, Local Bounti's projection may not be achieved on currently anticipated timelines or at all. • Local Bounti may need to defend itself against intellectual property infringement claims, which may be time-consuming and could cause Local Bounti to incur substantial costs. • The loss of, or failure to achieve, any registered patent, trademark, or other intellectual property rights could enable other companies to compete more effectively with Local Bounti. • Local Bounti relies on information technology systems and any inadequacy, failure, interruption or security breaches of those systems may harm its ability to effectively operate its business. • Local Bounti could be adversely affected by a change in consumer preferences, perception and spending habits in the food industry, and failure to develop and expand its product offerings or gain market acceptance of its products could have a negative effect on Local Bounti's business. • Demand for lettuce, herbs, and other greens is subject to seasonal fluctuations and may adversely impact Local Bounti's results of operations in certain quarters. • Our failure to meet the NYSE's continued listing requirements could result in the suspension of trading of our common stock and a subsequent delisting of our common stock. • Public health crises could have an adverse effect on Local Bounti's business, operating results and cash flows.
If Local Bounti is unable to increase the yield in each or most of these product lines, Local Bounti's projection may not be achieved on currently anticipated timelines or at all. • Local Bounti may need to defend itself against intellectual property infringement claims, which may be time-consuming and could cause Local Bounti to incur substantial costs. • The loss of, or failure to achieve, any registered patent, trademark, or other intellectual property rights could enable other companies to compete more effectively with Local Bounti. • Local Bounti relies on information technology systems and any inadequacy, failure, interruption or security breaches of those systems may harm its ability to effectively operate its business. • Local Bounti could be adversely affected by a change in consumer preferences, perception and spending habits in the food industry, and failure to develop and expand its product offerings or gain market acceptance of its products could have a negative effect on Local Bounti's business. • Demand for lettuce, herbs, and other greens is subject to seasonal fluctuations and may adversely impact Local Bounti's results of operations in certain quarters. • Our failure to meet the NYSE's continued listing requirements could result in the suspension of trading of our common stock and a subsequent delisting of our common stock.
Local Bounti expects that its existing cash on hand, projected cash generated from product sales, as well as the PIPE Financing as disclosed in Note 18, Subsequent Events , of the Consolidated Financial Statements will be sufficient to fund its planned operating expenses and capital expenditure requirements through at least the next 12 months.
Local Bounti expects that its existing cash on hand, projected cash generated from product sales, as well as the additional financing disclosed in Note 18, Subsequent Events , of the Consolidated Financial Statements will be 22 sufficient to fund its planned operating expenses and capital expenditure requirements through at least the next 12 months.
Local Bounti expects to expend substantial resources as it: • operates its existing facilities; • identifies and invests in future growth opportunities, including expansion into new markets, development of new or expanded facilities, introduction of new products, and commercialization of new crops; • invests in creating and protecting intellectual property; and • incurs additional general administration expenses, including increased finance, legal and accounting expenses, associated with growing operations.
Local Bounti expects to expend substantial resources as it: • operates its existing facilities; • identifies and invests in future growth opportunities, including expansion into new markets, development of new or expanded facilities, introduction of new products, and commercialization of new crops; • begins repayment of its loans with Cargill; • invests in creating and protecting intellectual property; and • incurs additional general administration expenses, including increased finance, legal and accounting expenses, associated with growing operations.
On April 3, 2024, we received a written notice (the "Notice") from the NYSE that we were not in compliance with the continued listing standards set forth in Rule 802.01B of the NYSE Listed Company Manual (the “Minimum Market Capitalization Standard”) because our average global market capitalization over a consecutive 30 trading-day period was less than $50 million and, at the same time, our last reported stockholders' equity (deficit) was less than $50 million.
On February 5, 2026, we received a written notice (the "Notice") from the NYSE that we were not in compliance with the continued listing standards set forth in Rule 802.01B of the NYSE Listed Company Manual (the “Minimum Market Capitalization Standard”) because our average global market capitalization over a consecutive 30 trading-day period was less than $50 million and, at the same time, our last reported stockholders' equity (deficit) was less than $50 million.
In addition, in the past, following periods of volatility in the overall market and the market price of a particular company's securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted, could result in substantial costs and a diversion of management's attention and resources.
In addition, in the past, following periods of volatility in the overall market and the market price of a particular company's securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted, could result in substantial costs and a diversion of management's attention and resources. U.S. Bounti, LLC ("U.S.
We may issue a substantial number of additional shares of common stock under an employee incentive plan. Any such issuances would dilute the interest of our stockholders and likely present other risks. We may issue additional shares of common stock under an employee incentive plan.
Any such issuances would dilute the interest of our stockholders and likely present other risks. We may issue additional shares of common stock under an employee incentive plan.
Local Bounti has only recently started to generate revenue and its ability to continue to generate revenue is uncertain given Local Bounti's limited operating history. Local Bounti may never achieve or sustain profitability. Local Bounti's business could be adversely affected if it fails to effectively manage its future growth.
Local Bounti’s ability to generate revenue is uncertain given Local Bounti's limited operating history. Local Bounti may never achieve or sustain profitability. Local Bounti's business could be adversely affected if it fails to effectively manage its future growth. Given that Local Bounti has limited operating history, its ability to continue to generate revenue is uncertain.
Any changes in the political issues and considerations may have a negative impact on Local Bounti's business, its financial condition and results of operations could be adversely affected. Changes in global trade policy could adversely affect our business.
Any changes in the political issues and considerations may have a negative impact on Local Bounti's business, its financial condition and results of operations could be adversely affected. Changes in global trade policy could adversely affect our business. Trade policy remains fluid in the United States and abroad.
Additional risks not presently known to us or that we currently deem immaterial may also affect our business, operating results, prospects or financial condition. Risks Related to Local Bounti's Business Local Bounti is an early-stage company with a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future.
Additional risks not presently known to us or that we currently deem immaterial may also affect our business, operating results, prospects or financial condition. Risks Related to Local Bounti's Business Local Bounti has a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future.
Because all of Local Bounti's assets are pledged under the credit facility, Local Bounti's ability to incur additional secured indebtedness or to sell or dispose of assets to raise capital may be impaired, which could have an adverse effect on Local Bounti's financial flexibility.
Because all of Local Bounti's assets are pledged under the credit facility, Local Bounti's ability to incur additional secured indebtedness or to sell or dispose of assets to raise capital may be impaired, which could have an adverse effect on Local Bounti's financial flexibility in planning for, and reacting to, changes in business conditions.
In addition, international supply chains may be impacted by events outside of our control, including but not limited to pandemics or other public health crises, the conflict between Russia and Ukraine and the conflict in Israel and the Gaza Strip, and limit our ability to procure timely delivery of supplies or finished goods and services.
In addition, international supply chains may be impacted by events outside of our control, including but not limited to pandemics or other public health crises and geopolitical events, such as the conflict between Russia and Ukraine, the conflict in Israel and the Gaza Strip, the current political situation in Venezuela and instability in the Middle East, and limit our ability to procure timely delivery of supplies or finished goods and services.
Subsequently, we submitted, and the NYSE accepted, a plan setting forth the actions we were taking that were designed to regain compliance with the Minimum Market Capitalization Standard within 18 months of receipt of the Notice (the “Market Capitalization Cure Period”).
Subsequently, we submitted a plan setting forth the actions we are taking that are designed to regain compliance with the Minimum Market Capitalization Standard within nine months of receipt of the Notice (the “Market Capitalization Cure Period”).
In addition, breaches of our information technology systems or security measures (including those of our third-party partners) and the unauthorized dissemination of sensitive personal, proprietary or confidential information about our business, our business partners, customers or other third parties could expose us to significant potential liability and reputational harm, materially damage our customer and business partner relationships, and subject us to significant reputational, financial, legal, and operational consequences. 32 Moreover, any breach or attack could result in litigation against us by customers or other third parties whose data is compromised by any attack.
In addition, breaches of our information technology systems or security measures (including those of our third-party partners) and the unauthorized dissemination of sensitive personal, proprietary or confidential information about our business, our business partners, customers or other third parties could expose us to significant potential liability and reputational harm, materially damage our customer and business partner relationships, and subject us to significant reputational, financial, legal, and operational consequences.
Local Bounti depends on third party contractors to help build its facilities. If Local Bounti does not effectively manage these projects and relationships, new facilities may not be completed on schedule or within allocated budgets.
Local Bounti depends on third party contractors to help build its facilities. If Local Bounti does not effectively manage these projects and relationships, new facilities may not be completed on schedule or within allocated budgets. These delays and increased costs could adversely affect Local Bounti's financial results.
As of December 31, 2024, we had approximately $595.6 million of federal and state NOL carryforwards available to reduce future taxable income.
As of December 31, 2025, we had approximately $373.8 million of federal and state NOL carryforwards available to reduce future taxable income.
In the future, Local Bounti may pursue new markets, new crops, and new product categories, by leveraging its technology platform to target what the Company may see as opportunities to expand its addressable market. For example, Local Bounti has recently expanded into selling salad kits.
In the future, Local Bounti may pursue new markets, new crops, and new product categories, by leveraging its technology platform to target what the Company may see as opportunities to expand its addressable market.
Local Bounti is subject to the risks inherent in an agricultural business, such as insects, plant diseases and similar agricultural risks, which may include crop losses, for which Local Bounti may not be insured.
Risks Related to the Natural Food Market Local Bounti faces risks inherent in the CEA business, including the risks of diseases and pests. Local Bounti is subject to the risks inherent in an agricultural business, such as insects, plant diseases and similar agricultural risks, which may include crop losses, for which Local Bounti may not be insured.
If new regulations are enacted, our costs of operations may increase, including but not limited to increased energy, environmental, and other costs and capital expenditures. In particular, increasing regulation of fuel emissions could increase the distribution and supply chain costs associated with our products. As a result, climate change may adversely affect our business, results of operations, and financial condition.
If new regulations are enacted, our costs of operations may increase, including but not limited to increased energy, environmental, and other costs and capital expenditures. In particular, increasing 37 regulation of fuel emissions could increase the distribution and supply chain costs associated with our products.
These delays and increased costs could adversely affect Local Bounti's financial results. 27 Local Bounti may be unsuccessful in identifying available future sites that support its planned growth strategy, and even if identified, Local Bounti may not be able to lease or purchase the land for any number of reasons.
Local Bounti may be unsuccessful in identifying available future sites that support its planned growth strategy, and even if identified, Local Bounti may not be able to lease or purchase the land for any number of reasons.
Our newer facilities are much larger than our initial Montana Facility. Local Bounti may encounter unexpected challenges as it operates larger facilities, which could cause it to be unable to operate larger facilities reliably. The inability to operate larger facilities would have a material negative impact on Local Bounti's business and financial condition. • Channel Mix.
Local Bounti may encounter unexpected challenges as it operates larger facilities, which could cause it to be unable to operate larger facilities reliably. The inability to operate larger facilities would have a material negative impact on Local Bounti's business and financial condition. • Channel Mix. Local Bounti relies on making assumptions about the expected channel mix of its facilities.
These risks include, but are not limited to, the following: • Local Bounti is an early-stage company with a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future. Local Bounti has only recently started to generate revenue and its ability to continue to generate revenue is uncertain given Local Bounti's limited operating history.
These risks include, but are not limited to, the following: • Local Bounti has a history of losses and expects to incur significant expenses and continuing losses for the foreseeable future. Local Bounti’s ability to generate revenue is uncertain given Local Bounti's limited operating history. Local Bounti may never achieve or sustain profitability.
The unavailability, reduction or elimination of government and economic incentives could negatively impact Local Bounti's business, prospects, financial condition and operating results.
As a result, climate change may adversely affect our business, results of operations, and financial condition. The unavailability, reduction or elimination of government and economic incentives could negatively impact Local Bounti's business, prospects, financial condition and operating results.
Issues regarding the safety of any of Local Bounti's products, regardless of the cause, may harm its brand, reputation and operating results. 36 Local Bounti's operations are subject to regulation by the USDA, the FDA and other federal, state and local regulation, and while Local Bounti intends to comply with all such applicable regulations, there is no assurance that Local Bounti will be in compliance with all such regulations.
Local Bounti's operations are subject to regulation by the USDA, the FDA and other federal, state and local regulation, and while Local Bounti intends to comply with all such applicable regulations, there is no assurance that Local Bounti will be in compliance with all such regulations.
If Local Bounti does not achieve and maintain favorable perception of its brand, Local Bounti's business, financial condition and results of operations could be adversely affected. 26 Local Bounti's estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which it competes achieves the forecasted growth, Local Bounti's business could fail to grow at similar rates, if at all.
Local Bounti's estimates of market opportunity and forecasts of market growth may prove to be inaccurate, and even if the market in which it competes achieves the forecasted growth, Local Bounti's business could fail to grow at similar rates, if at all.
These laws and regulations apply to many aspects of Local Bounti's business, including the production, packaging, labeling, distribution, advertising, sale, quality, and safety of its products, as well as the health and safety of its employees and the protection of the environment. 34 Local Bounti is subject to regulation by various government agencies, including the USDA, FDA, FTC, OSHA, and EPA, as well as various state and local agencies.
Local Bounti and its suppliers are subject to a variety of laws and regulations. These laws and regulations apply to many aspects of Local Bounti's business, including the production, packaging, labeling, distribution, advertising, sale, quality, and safety of its products, as well as the health and safety of its employees and the protection of the environment.
Refer to Note 7, Debt , of the Consolidated Financial Statements for more information about the credit facility. Risks Related to Local Bounti's Technology, Intellectual Property and Infrastructure Local Bounti may need to defend itself against intellectual property infringement claims, which may be time-consuming and could cause Local Bounti to incur substantial costs.
Risks Related to Local Bounti's Technology, Intellectual Property and Infrastructure Local Bounti may need to defend itself against intellectual property infringement claims, which may be time-consuming and could cause Local Bounti to incur substantial costs.
In addition, Local Bounti’s California facilities are only partially enclosed from the outside in certain places, meaning that they may be susceptible to risks associated with outside agriculture, such as weather, diseases, and pests. Crop losses because of these CEA and agricultural risks could negatively impact Local Bounti's business, prospects, financial condition, results of operations and cash flows.
In addition, Local Bounti’s California facilities are only partially enclosed from the outside in certain places, meaning that they may be susceptible to risks associated with outside agriculture, such as weather, diseases, and pests.
Local Bounti's financial condition and operating results will be adversely affected if it fails to implement its growth strategy or if Local Bounti invests resources in a growth strategy that ultimately proves unsuccessful. 30 Local Bounti's ability to generate and grow revenue is dependent on its ability to increase the yield in each of the anticipated product lines it intends to grow.
Local Bounti's financial condition and operating results will be adversely affected if it fails to implement its growth strategy or if Local Bounti invests resources in a growth strategy that ultimately proves unsuccessful.
Any such redemption 40 may have similar consequences to a cash redemption described above. In addition, such redemption may occur at a time when the warrants are "out-of-the-money," in which case you would lose any potential embedded value from a subsequent increase in the value of the common stock had your warrants remained outstanding.
In addition, such redemption may occur at a time when the warrants are "out-of-the-money," in which case you would lose any potential embedded value from a subsequent increase in the value of the common stock had your warrants remained outstanding. 41 We may issue a substantial number of additional shares of common stock under an employee incentive plan.
Local Bounti may not be able to compete successfully in the highly competitive natural food market. Local Bounti operates in the highly competitive natural foods environment. With the importing of crops rapidly increasing, Local Bounti's competition includes large-scale operations in Mexico, Canada and to a lesser extent the western United States.
With the importing of crops rapidly increasing, Local Bounti's competition includes large-scale operations in Mexico, Canada and to a lesser extent the western United States.
Local Bounti has only recently started to generate revenue and given that it has limited operating history, Local Bounti's ability to continue to generate revenue is uncertain. Local Bounti believes it will continue to incur net losses for the foreseeable future as it continues its facility expansion and commercial sales of its products.
Local Bounti believes it will continue to incur net losses for the foreseeable future as it continues its facility expansion and commercial sales of its products.
If Local Bounti is unable to attain reliable performance of its facilities, there could be severe adverse impact on its business. Local Bounti faces risks including, but not limited to, the following: • Production Scale. In 2024, we completed construction on two new facilities in Texas and Washington, bringing our total facility count to six.
If Local Bounti is unable to attain reliable performance of its facilities, there could be severe adverse impact on its business. Local Bounti faces risks including, but not limited to, the following: • Production Scale. Our newer facilities are much larger than our initial Montana Facility.
Local Bounti grows plants with and without sunlight, thus requiring lighting technology and adequate power supply as primary factors of production. Local Bounti considers the reliability of utilities and related infrastructure as a key factor in its site selection criteria for facility locations.
Local Bounti considers the reliability of utilities and related infrastructure as a key factor in its site selection criteria for facility locations.
Failure to raise capital as and when needed could have significant negative consequences for our business, financial condition and results of consolidated operations. Local Bounti currently relies on a limited number of facilities for its operations. In 2024, Local Bounti completed construction on two new facilities in Texas and Washington, bringing its total facility count to six.
Failure to raise capital as and when needed could have significant negative consequences for our business, financial condition and results of consolidated operations. Local Bounti currently relies on a limited number of facilities for its operations. Adverse changes or developments affecting Local Bounti's facilities could impair Local Bounti's ability to produce its products.
Acquisitions may also disrupt our business, divert our resources, and require significant management attention that would otherwise be available for development of our existing business.
Acquisitions may also disrupt our business, divert our resources, and require significant management attention that would otherwise be available for development of our existing business. Moreover, the anticipated benefits of any acquisition or business relationship may not be realized or we may be exposed to unknown risks or liabilities.
Our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial institutions with which we have arrangements directly, or the financial services industry or economy in general. 22 Additionally, Local Bounti's operating plan may change because of factors currently unknown, and Local Bounti may need to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations.
Our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, the financial institutions with which we have arrangements directly, or the financial services industry or economy in general.
If Local Bounti is not correct in forecasting demand by channel to achieve its expected results, it may experience a reduced average sales price or a supply-demand imbalance, which could negatively affect its financial performance. Demand for loose leaf lettuce products may also be subject to some degree of seasonality due to consumer behavior.
Demand for Local Bounti's products fluctuates due to changes in customer orders which typically do not work on long-term contracts in the produce industry. If Local Bounti is not correct in forecasting demand by channel to achieve its expected results, it may experience a reduced average sales price or a supply-demand imbalance, which could negatively affect its financial performance.
As a result, comparisons of Local Bounti's sales and operating results between different periods may not necessarily be meaningful comparisons. If Local Bounti is unable to operate facilities to reliably achieve the target channel mix on average, there could be material adverse effects on its business, operational results, and financial performance. • Energy Interruption.
If Local Bounti is unable to operate facilities to reliably achieve the target channel mix on average, there could be material adverse effects on its business, operational results, and financial performance. • Energy Interruption. Local Bounti grows plants with and without sunlight, thus requiring lighting technology and adequate power supply as primary factors of production.
One of Local Bounti's most significant assets is its direct and indirect interests in its subsidiaries and, accordingly, Local Bounti is dependent upon distributions from its subsidiaries to pay taxes and cover its corporate and other overhead expenses and pay dividends, if any, on the common stock.
For these reasons, we may not be able to utilize a material portion of our reported NOLs as of December 31, 2025, even if we attain profitability, which could adversely affect our cash flows and results of operations. 40 One of Local Bounti's most significant assets is its direct and indirect interests in its subsidiaries and, accordingly, Local Bounti is dependent upon distributions from its subsidiaries to pay taxes and cover its corporate and other overhead expenses and pay dividends, if any, on the common stock.
Moreover, the anticipated benefits of any acquisition or business relationship may not be realized or we may be exposed to unknown risks or liabilities. 25 Negotiating these transactions can be time-consuming, difficult, and expensive, and our ability to complete these transactions may often be subject to approvals that are beyond our control.
Negotiating these transactions can be time-consuming, difficult, and expensive, and our ability to complete these transactions may often be subject to approvals that are beyond our control. Consequently, these transactions, even if announced, may not be completed.
Any of these impacts could negatively impact Local Bounti's business, financial condition, and cash flows. Risks Related to the Natural Food Market Local Bounti faces risks inherent in the CEA business, including the risks of diseases and pests.
Crop losses because of these CEA and agricultural risks could negatively impact Local Bounti's business, prospects, financial condition, results of operations and cash flows. 29 Local Bounti may not be able to compete successfully in the highly competitive natural food market. Local Bounti operates in the highly competitive natural foods environment.
If we are unable to secure additional financing in the future, we will not be able to continue as a going concern.
If we are unable to secure additional financing in the future, we will not be able to continue as a going concern. If additional financing is available, financing terms may lead to significant dilution of our stockholders' equity (deficit). • Local Bounti has entered into agreements with Cargill Financial for term loan credit facilities.
Specific legislative and regulatory proposals discussed recently that may adversely impact Local Bounti include, but are not limited to, changes to existing trade agreements, import and export regulations, tariffs, customs duties, income tax regulations and the federal tax code, public company reporting requirements, environmental regulations and antitrust enforcement.
Developments that may adversely affect Local Bounti include, but are not limited to, changes to trade and industrial policy (including tariffs, import restrictions and customs enforcement), modifications to existing trade agreements, adjustments to federal and state tax laws and regulations, evolving public company reporting and corporate governance requirements, climate- and sustainability-related disclosure and compliance obligations, environmental, health, safety and food labeling standards and enhanced antitrust enforcement, including in labor markets.
Removed
Local Bounti may never achieve or sustain profitability.
Added
Additionally, Local Bounti's operating plan may change because of factors currently unknown, and Local Bounti may need to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations.
Removed
If additional financing is available, financing terms may lead to significant dilution of our stockholders' equity (deficit). • Local Bounti currently relies on a limited number of facilities for its operations. • Local Bounti has been operating facilities at commercial capacity for less than five years, which makes it difficult to forecast future results of operations. • The build-out of new facilities and retrofitting of acquired facilities will require significant expenditures for capital improvements and operating expenses and may be subject to delays in construction and unexpected costs due to governmental approvals and permitting requirements, reliance on third parties for construction, delays relating to material delivery and supply chains, and fluctuating material prices. • Local Bounti has entered into agreements with Cargill Financial for term loan credit facilities.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Audit Committee regularly receives an overview of our cybersecurity activities from management. Material cybersecurity threat risks may also be considered during separate Board discussions of important matters such as enterprise risk management, budgeting, and other relevant matters. Our cybersecurity risk management and strategy processes are led by our CIO, who reports directly to our President and Chief Financial Officer.
Biggest changeThe Audit Committee periodically receives an overview of our cybersecurity activities from management. Material cybersecurity threat risks may also be considered during separate Board discussions of important matters such as enterprise risk management, budgeting, and other relevant matters. Our cybersecurity risk management and strategy processes are led by our CIO, who reports directly to our President and Chief Executive Officer.
To aid in our efforts to assess, identify, and manage any material risks, we have implemented several cybersecurity processes, technologies, and controls. Our process for identifying and assessing material risks from cybersecurity threats operates within our broader overall risk management program.
To aid in our efforts to assess, identify, and manage any material risks, we have implemented several cybersecurity processes, technologies, and controls. 43 Our process for identifying and assessing material risks from cybersecurity threats operates within our broader overall risk management program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe table below sets forth certain information regarding these properties as of December 31, 2024: Facility Type/Use Location Owned/Leased* Size (sq. ft.) Montana Production Facility Hamilton, MT Leased 93,544 Vacant Land for Future Production Facility Hamilton, MT Owned 874,685 Carpinteria Production Facility Carpinteria, CA Leased 558,000 Oxnard Production Facility Oxnard, CA Leased 663,000 Georgia Production Facility Byron, GA Owned 347,269 Texas Production Facility Mount Pleasant, TX Owned 459,158 Washington Production Facility Pasco, WA Owned 244,101 _____________________ *Owned facilities are subject to a first-priority lien under the Credit Agreements with Cargill Financial.
Biggest changeThe table below sets forth certain information regarding these properties as of December 31, 2025: Facility Type/Use Location Owned/Leased* Size (sq. ft.) Montana Headquarters Hamilton, MT Leased 93,544 Vacant Land for Future Production Facility Hamilton, MT Owned 874,685 Carpinteria Production Facility Carpinteria, CA Leased 558,000 Oxnard Production Facility Oxnard, CA Leased 663,000 Georgia Production Facility Byron, GA Owned 347,269 Texas Production Facility Mount Pleasant, TX Owned 459,158 Washington Production Facility Pasco, WA Owned 244,101 _____________________ *Owned facilities are subject to a first-priority lien under the Credit Agreement with Cargill Financial.
Item 2. Properties Our principal executive offices are located in Hamilton, Montana. In addition, we have CEA facilities in Montana, Washington, California, Georgia, and Texas.
Item 2. Properties Our principal executive offices are located in Hamilton, Montana. In addition, we have CEA facilities in Washington, California, Georgia, and Texas.
We believe our facilities are adequate and suitable for our current needs. If necessary, suitable additional or alternative space will be available to accommodate our operations. 43
We believe our facilities are adequate and suitable for our current needs. If necessary, suitable additional or alternative space will be available to accommodate our operations. 44

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures Not applicable. 44 PART II
Biggest changeThe results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. Mine Safety Disclosures Not applicable. 45 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the NYSE under the trading symbol "LOCL." Holders of Common Stock As of December 31, 2024, there were 42 holders of record of our common stock.
Biggest changeMarket Information Our common stock is listed on the NYSE under the trading symbol "LOCL." Holders of Common Stock As of December 31, 2025, there were 42 holders of record of our common stock.
Recent Sales of Unregistered Securities There were no unregistered sales of our equity securities during the period covered by this Annual Report on Form 10-K that were not previously reported in a Current Report on Form 8-K. Item 6. Reserved 45
Recent Sales of Unregistered Securities There were no unregistered sales of our equity securities during the period covered by this Annual Report on Form 10-K that were not previously reported in a Current Report on Form 8-K. Item 6. Reserved 46
Added
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Period Total number of shares purchased (1) Average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs October 1 - October 31, 2025 0 — — — November 1 - November 30, 2025 66,222 $ 2.46 — — December 1 - December 31, 2025 0 — — — Total 66,222 $ 2.46 — — _____________ (1) Reflects 66,222 shares of our common stock surrendered to the Company in November 2025 by a former employee in connection with the former employee’s separation from employment.
Added
The surrendered shares consisted of vested restricted stock awards and shares issued upon settlement of restricted stock units. The Company accepted the surrendered shares as consideration for full repayment of an outstanding loan previously made to the former employee to cover tax obligations arising from restricted stock awards following a revaluation of our common stock.
Added
These purchases were not made pursuant to any publicly announced plan or program. (2) Represents the closing price of the common stock on NYSE on November 13, 2025. Such price was used to determine the number of shares to be surrendered as consideration for full repayment of the outstanding loan described in footnote (1) above.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

46 edited+47 added−33 removed27 unchanged
Biggest changeNo goodwill remained on the Consolidated Balance Sheets as of December 31, 2024 and 2023. 49 Results of Operations Year Ended December 31, 2024 compared to Year Ended December 31, 2023 The following table sets forth our historical operating results for the periods indicated: Year Ended December 31, 2024 2023 $ Change % Change (in thousands) Sales $ 38,138 $ 27,557 10,581 38% Cost of goods sold (1)(2) 34,048 25,341 8,707 34% Gross profit 4,090 2,216 1,874 85% Operating expenses: Research and development (1)(2) 22,287 16,086 6,201 39% Selling, general and administrative (1)(2) 40,771 64,559 (23,788) (37)% Goodwill impairment — 38,481 (38,481) 100% Total operating expenses 63,058 119,126 (56,068) (47)% Loss from operations (58,968) (116,910) 57,942 (50)% Other income (expense): Change in fair value of warrant liability 811 18,483 (17,672) 100% Interest expense, net (58,923) (25,745) (33,178) 129% Other (expense) income, net (2,822) 157 (2,979) (1897)% Net loss $ (119,902) $ (124,015) 4,113 (3)% (1) Amounts include stock-based compensation as follows: Year Ended December 31, 2024 2023 $ Change % Change (in thousands) Cost of goods sold $ 73 $ 123 (50) (41)% Research and development 274 1,464 (1,190) (81)% Selling, general and administrative 3,001 14,687 (11,686) (80)% Total stock-based compensation expense, net of amounts capitalized $ 3,348 $ 16,274 (12,926) (79)% (2) Amounts include depreciation and amortization as follows: Year Ended December 31, 2024 2023 $ Change % Change (in thousands) Cost of goods sold $ 6,137 $ 3,513 2,624 75% Research and development 7,631 2,505 5,126 205% Selling, general and administrative 5,103 7,114 (2,011) (28)% Total depreciation and amortization $ 18,871 $ 13,132 5,739 44% The following sections discuss and analyze the changes in the significant line items in our Consolidated Statements of Operations for the comparative periods in the table above.
Biggest changeThe Company did not recognize any other impairment of long-lived assets for the years ended December 31, 2025 and 2024. 50 Results of Operations Year Ended December 31, 2025 compared to Year Ended December 31, 2024 The following table sets forth our historical operating results for the periods indicated: Year Ended December 31, 2025 2024 $ Change % Change (in thousands) Sales $ 48,365 $ 38,138 10,227 27% Cost of goods sold (1)(2) 42,505 34,048 8,457 25% Gross profit 5,860 4,090 1,770 43% Operating expenses: Research and development (1)(2) 25,575 22,287 3,288 15% Sales and marketing (1)(2) 9,143 7,893 1,250 16% General and administrative (1)(2) 33,769 32,878 891 3% Total operating expenses 68,487 63,058 5,429 9% Loss from operations (62,627) (58,968) (3,659) 6% Other income (expense): Change in fair value of warrant liability (3,358) 811 (4,169) (514)% Interest expense, net (32,167) (58,923) 26,756 45% Other income (expense), net 3,773 (2,822) 6,595 234% Net loss $ (94,379) $ (119,902) 25,523 21% (1) Amounts include stock-based compensation as follows: Year Ended December 31, 2025 2024 $ Change % Change (in thousands) Cost of goods sold $ 124 $ 73 51 70% Research and development 232 274 (42) (15)% Sales and marketing 441 (13) 454 3492% General and administrative 4,394 3,014 1,380 46% Total stock-based compensation expense, net of amounts capitalized $ 5,191 $ 3,348 1,843 55% (2) Amounts include depreciation and amortization as follows: Year Ended December 31, 2025 2024 $ Change % Change (in thousands) Cost of goods sold $ 8,142 $ 6,137 2,005 33% Research and development 9,933 7,631 2,302 30% Selling, general and administrative 5,122 5,103 19 —% Total depreciation and amortization $ 23,197 $ 18,871 4,326 23% The following sections discuss and analyze the changes in the significant line items in our Consolidated Statements of Operations for the comparative periods in the table above.
Net Cash Used In Investing Activities Net cash used in investing activities was $82.5 million for the year ended December 31, 2024, due primarily to purchases of equipment and other items for the Washington, Georgia, and Texas facilities.
Net cash used in investing activities was $82.5 million for the year ended December 31, 2024, due primarily to purchases of equipment and other items for the Washington, Georgia, and Texas facilities.
The increase is driven primarily by the additional development of our production, harvesting, and post-harvest packaging techniques and processes, including production surplus costs, related to the development and testing of our commercial-scale Stack & Flow Technology ® and production processes at the Washington and Texas facilities.
The increase is driven primarily by the additional development of our production, harvesting, and post-harvest packaging techniques and processes, including production surplus costs, related to the development and testing of our commercial-scale Stack & Flow Technology and production processes at the Washington, Texas, and Georgia facilities.
The increase was due to increased production and growth in sales from our facility in Georgia and sales from our new facilities in Texas and Washington, which began shipping and selling products in the second quarter of 2024 . 50 Cost of Goods Sold Cost of goods sold is the direct cost of growing produce for sale at our greenhouse facilities, including labor costs, which consists of wages, salaries, benefits, and stock-based compensation, seeds, soil, nutrients and other input supplies, packaging materials, depreciation, utilities, and other manufacturing overhead.
The increase was due to increased production and growth in sales from our facility in Georgia and sales from our new facilities in Texas and Washington, which began shipping and selling products in the second quarter of 2024 . 51 Cost of Goods Sold Cost of goods sold is the direct cost of growing produce for sale at our greenhouse facilities, including labor costs, which consists of wages, salaries, benefits, and stock-based compensation, seeds, soil, nutrients and other input supplies, packaging materials, depreciation, utilities, and other manufacturing overhead.
We distribute our products to approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, H-E-B, Sprouts, and AmazonFresh.
We distribute our products to approximately 13,000 retail locations across 35 U.S. states, primarily through direct relationships with blue-chip retail customers, including Albertsons, Sam's Club, Kroger, Target, Walmart, Whole Foods, Brookshire's, and H-E-B.
Factors Affecting Our Financial Condition and Results of Operations We have expended, and we expect to continue to expend, substantial resources as we: • Complete construction and commissioning of new and expanded facilities; • Standardize operating and manufacturing processes across our facilities, including increased expenses associated with growing operations; • Identify and invest in future growth opportunities, including new product lines; • Invest in product innovation and development; • Invest in sales and marketing efforts to increase brand awareness, engage customers, and drive sales of our products; and • Incur additional general administration expenses 47 Critical Accounting Estimates Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S.
Factors Affecting Our Financial Condition and Results of Operations We have expended, and we expect to continue to expend, substantial resources as we: • Standardize operating and manufacturing processes across our facilities, including increased expenses associated with growing operations; • Identify and invest in future growth opportunities, including new product lines; • Invest in product innovation and development; • Invest in sales and marketing efforts to increase brand awareness, engage customers, and drive sales of our products; and 48 • Incur additional general administration expenses Critical Accounting Estimates Management's Discussion and Analysis of Financial Condition and Results of Operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with U.S.
Through the Pete's Acquisition, we significantly increased our growing footprint to include two then-existing facilities in California and one under-construction facility in Georgia. The Georgia facility initially became operational in July 2022 and was significantly expanded in 2023. In 2024, we completed construction on two new facilities in Washington and Texas, bringing our total facility count to six.
Through the Pete's Acquisition, we significantly increased our growing footprint to include two then-existing facilities in California and one under-construction facility in Georgia. The Georgia facility initially became operational in July 2022 and was significantly expanded in 2023. In 2024, we completed construction on two new facilities in Washington and Texas.
Selling, General, and Administrative Expenses Selling, general, and administrative expenses consist of employee compensation, including salaries, benefits, and stock-based compensation for our executive, legal, finance, information technology, human resources and sales and marketing teams, expenses for third-party professional services, insurance, marketing, advertising, computer hardware and software, and amortization of intangible assets, among others.
General and Administrative General and administrative expenses consist of employee compensation, including salaries, benefits, and stock-based compensation for our executive, legal, finance, information technology, and human resources teams, expenses for third-party professional services, insurance, computer hardware and software, and amortization of intangible assets, among others.
These debt agreements contain various financial and non-financial covenants and certain restrictions on our business, which include restrictions on additional indebtedness, minimum liquidity and other financial covenants, and material adverse effects that could cause us to be at risk of default.
The debt agreements with Cargill Financial contain various financial and non-financial covenants and certain restrictions on our business, which include restrictions on additional indebtedness, minimum liquidity and other financial covenants, and material adverse effects that could cause us to be at risk of default.
Company Overview Local Bounti is a controlled environment agriculture ("CEA") company that produces sustainably grown produce, focused primarily on living and loose leaf lettuce, arugula, spinach, and basil. Founded in 2018 and headquartered in Hamilton, Montana, Local Bounti utilizes its patented Stack & Flow Technology ® to grow healthy food sustainably and affordably.
Company Overview Local Bounti is a controlled environment agriculture ("CEA") company that produces sustainably grown produce, focused primarily on living lettuce, salad kits, and loose leaf lettuce. Founded in 2018 and headquartered in Hamilton, Montana, Local Bounti utilizes its patented Stack & Flow Technology ® to grow healthy food sustainably and affordably.
Cost of goods sold increased by $8.7 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, due primarily to production ramp-up at our new Texas and Washington facilities and increased production at our Georgia facilities.
Cost of goods sold increased by $8.5 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, due primarily to production ramp-up at our new Texas and Washington facilities and increased production at our Georgia facilities.
As a result, the March 2023 Cargill Warrant is accounted for at fair value until settled through exercise or expiration and is classified as a derivative warrant liability in the Consolidated Balance Sheets at December 31, 2024 and 2023, in accordance with ASC Topic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity .
As a result, the Cargill Original Warrants are accounted for at fair value until settled through exercise or expiration and is classified as a derivative warrant liability in the Consolidated Balance Sheets at December 31, 2025 and 2024, in accordance with ASC Topic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity .
Currently, our primary sources of liquidity and capital resources are cash on hand, cash flows generated from the sale of our products, and the credit facilities with Cargill Financial.
Currently, our primary sources of liquidity and capital resources are cash on hand, cash flows generated from the sale of our products, and the credit facilities with U.S. Bounti, LLC and Cargill Financial.
Recoverability of Long-Lived Assets Our long-lived assets include property and equipment. We evaluate groups of long-lived assets for impairment triggers annually and whenever events or changes in circumstances indicate that the carrying amounts of these asset groups may not be recoverable.
We evaluate groups of long-lived assets for impairment triggers annually and whenever events or changes in circumstances indicate that the carrying amounts of these asset groups may not be recoverable.
Our actual results may differ from these estimates under different assumptions or conditions. Our critical accounting policies that involve significant estimates and judgments of management include the following: Derivatives On March 28, 2023, Local Bounti Operating Company LLC, the Company and certain subsidiaries entered into a Sixth Amendment to the Original Credit Agreements (the "Sixth Amendment") with Cargill Financial.
Our actual results may differ from these estimates under different assumptions or conditions. Our critical accounting policies that involve significant estimates and judgments of management include the following: Derivatives On March 28, 2023, we entered into a Sixth Amendment to the Original Credit Agreements with Cargill Financial.
The estimates may be significantly different from those recorded in the Consolidated Financial Statements because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market.
The derivative is not traded in an active market and the fair value is determined using valuation techniques. The estimates may be significantly different from those recorded in the Consolidated Financial Statements because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market.
Net cash used in investing activities was $162.3 million for the year ended December 31, 2023, due primarily to purchases of equipment and other items for the Washington, Georgia, and Texas facilities.
Net Cash Used In Investing Activities Net cash used in investing activities was $11.6 million for the year ended December 31, 2025, due primarily to purchases of equipment and other items for the Washington, Georgia, and Texas facilities.
We capitalize interest costs on borrowings during the construction period of major construction projects as part of the cost of the constructed assets. Interest expense, net increased by $33.2 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
We capitalize interest costs on borrowings during the construction period of major construction projects as part of the cost of the constructed assets. Interest expense, net decreased by $26.8 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
The timing and scope of these projects, including plans to expand into the Midwest, remain under review pending ongoing discussions with retailers to optimize those facilities for specific products in support of retail commitments and strategies to expand distribution.
The timing and scope of these projects, including plans to expand into the Midwest, remain under review pending ongoing discussions with retailers to optimize those facilities for specific products in support of retail commitments and strategies to expand distribution. Intellectual Property In February 2026, we were issued U.S.
Research and development costs increased by $6.2 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Research and development costs increased by $3.3 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
Sales We derive our revenue from the sale of produce grown at our six facilities. Sales increased by $10.6 million to $38.1 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Sales We derive our revenue from the sale of produce grown at our facilities. Sales increased by $10.2 million to $48.4 million for the year ended December 31, 2025, compared to the year ended December 31, 2024.
This was partially offset by non-cash activities of $38.5 million in goodwill impairment, $24.0 million in paid-in-kind interest, $16.3 million in stock-based compensation expense, net of amounts capitalized, $7.3 million in amortization of debt issuance costs, $7.2 million in depreciation expense, $5.9 million in amortization expense, $4.7 million in loss on disposal of property and equipment, and a $5.1 million net increase of cash from changes in assets and liabilities.
This was partially offset by non-cash activities of $30.9 million in paid-in-kind interest, $19.9 million in depreciation expense, $5.2 million in stock-based compensation expense, net of amounts capitalized, $3.7 million of intangible asset impairment, $3.4 million related to the change in fair value of warrant liability, $3.3 million in amortization expense, $2.2 million in amortization of debt issuance costs, $0.3 million in loss on disposal of property and equipment, and a $0.3 million net increase of cash from changes in assets and liabilities.
Cash expenditures over the next 12 months are expected to include general operating costs for employee wages and related benefits, outside services for legal, accounting, IT infrastructure, and costs associated with growing, harvesting, and selling our products, such as the purchase of seeds, soil, nutrients, and other growing supplies, shipping and fulfillment costs, and facility maintenance costs.
Cash expenditures over the next 12 months are expected to include general operating costs for employee wages and related benefits, outside services for legal, accounting, IT infrastructure, and costs associated with growing, harvesting, and selling our products, such as the purchase of seeds, soil, nutrients, and other growing supplies, shipping and fulfillment costs, and facility maintenance costs. 53 We also believe additional cash can be secured through other debt, equity financings, or sale leaseback financing, if necessary.
We also believe additional cash can be secured through other debt, equity financings, or sale leaseback financing, if necessary. However, there can be no assurance that equity or debt financing will be available to us should we need it or, if available, that the terms will be satisfactory to us and not dilutive to existing shareholders.
However, there can be no assurance that equity or debt financing will be available to us should we need it or, if available, that the terms will be satisfactory to us and not dilutive to existing shareholders.
The amendment amended the exercise price of the March 2023 Cargill Warrant from $13.00 to $6.50 per share of common stock (refer to Note 7, Debt , of the Consolidated Financial Statements for more information about the amendment to the March 2023 Cargill Warrant).
On January 23, 2024, we amended the March 2023 Cargill Warrant to reduce the exercise price from $13.00 to $6.50 per share (see Note 7 , Debt , of the Consolidated Financial Statements for additional information).
If the carrying amount of an asset group exceeds its estimated future cash flows, we then assess whether the situation is more than temporary.
If the carrying amount of an asset group exceeds its estimated future cash flows, we then assess whether the situation is more than temporary. If it is determined that the future cash flows are more than temporary, we will record an impairment charge equal to the amount by which the carrying amount of the asset group exceeds its fair value.
The following table summarizes future aggregate financing obligation payments by fiscal year for both the California Facilities and the Montana Facility: Financing Obligation (in thousands) 2025 $ 5,024 2026 5,158 2027 5,296 2028 5,439 2029 5,584 Thereafter 115,949 Total financing obligation payments 142,450 Cash Flow Analysis A summary of our cash flows from operating, investing, and financing activities is presented in the following table: Year Ended December 31, (in thousands) 2024 2023 Net cash used in operating activities $ (27,061) $ (33,157) Net cash used in investing activities (82,454) (162,265) Net cash provided by financing activities 100,086 187,379 Cash and cash equivalents and restricted cash at beginning of year 16,895 24,938 Cash and cash equivalents and restricted cash at end of year $ 7,466 $ 16,895 53 Net Cash Used In Operating Activities Net cash used in operating activities was $27.1 million for the year ended December 31, 2024, primarily due to a net loss of $119.9 million.
The following table summarizes future aggregate financing obligation payments by fiscal year: Financing Obligation (in thousands) 2026 $ 6,188 2027 6,456 2028 5,439 2029 5,584 2030 5,734 Thereafter 110,214 Total financing obligation payments 139,615 Cash Flow Analysis A summary of our cash flows from operating, investing, and financing activities is presented in the following table: Year Ended December 31, 2025 2024 (in thousands) Net cash used in operating activities $ (30,336) $ (27,061) Net cash used in investing activities (11,589) (82,454) Net cash provided by financing activities 45,178 100,086 Cash and cash equivalents and restricted cash at beginning of year 7,466 16,895 Cash and cash equivalents and restricted cash at end of year $ 10,719 $ 7,466 Net Cash Used In Operating Activities Net cash used in operating activities was $30.3 million for the year ended December 31, 2025, primarily due to a net loss of $94.4 million.
The period-end close stock price is a key input to the Black-Scholes model we use to measure and estimate the fair value of the warrant at the end of each reporting period. 51 Interest Expense, net Interest expense consists primarily of contractual interest and amortization of debt issuance costs, net of interest capitalized for construction assets, related to the loans with Cargill Financial, and also interest recognized per the terms of our financing obligation related to the Montana Facility and the California Facilities.
Interest Expense, net Interest expense consists primarily of contractual interest and amortization of debt issuance costs, net of interest capitalized for construction assets, related to the loans with Cargill Financial, and also interest recognized per the terms of our financing obligation related to the Montana Facility and the California Facilities.
Capacity Expansion Project Update Plans remain in place to build additional capacity across our network of facilities enabled with our patented Stack & Flow Technology ® . The planned expansions are designed to provide additional capacity and allow for our growing product assortment to meet existing demand from our direct relationships with blue-chip retailers and distributors.
The expansions are designed to provide additional capacity and allow for our growing product assortment to meet existing demand from our direct relationships with blue-chip retailers and distributors.
During the year ended December 31, 2024 and 2023, we capitalized $10.8 million and $14.9 million of interest, respectively. Other (expense) income, net Other (expense) income consists primarily of a $3.0 million write-off of financing fees related to unsuccessful efforts in raising additional capital during the year ended December 31, 2024.
Other (expense) income, net for the year ended December 31, 2024 consists primarily of a $3.0 million write-off of financing fees related to unsuccessful efforts in raising additional capital during the year ended December 31, 2024. Liquidity and Capital Resources We have incurred losses and generated negative cash flows from operations since our inception.
Change in Fair Value of Warrant Liability The change in fair value of warrant liability includes the mark-to-market adjustments to the warrant liability to reflect its fair value as of the end of the reporting period.
Bounti Warrant liability to reflect their fair value as of the end of the reporting period.
Our research and development efforts focus on enhancing each facility’s indoor environmental controls, growing recipes, and refining Stack & Flow Technology® processes, all aimed at meeting facility design and production yield specifications.
Our research and development efforts focus on enhancing each facility’s indoor environmental controls, growing recipes, and refining Stack & Flow Technology processes, all aimed at meeting facility design and production yield specifications. Additionally, we also focus on the development of new leafy green product offerings, value-added products such as Grab & Go Salads, and new crops, including arugula and berries.
Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in Item 1A, Risk Factors .
Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in Item 1A, Risk Factors . Our failure to raise capital as and when needed could have significant negative consequences for our business, financial condition, and results of consolidated operations.
Net Cash Provided By Financing Activities Net cash provided by financing activities was $100.1 million for the year ended December 31, 2024, comprised primarily of $100.1 million of net proceeds from the issuance of debt.
Net Cash Provided By Financing Activities Net cash provided by financing activities was $45.2 million for the year ended December 31, 2025, comprised of $20.9 million of proceeds from the issuance of Series A Preferred Stock, $10.5 million of proceeds from the issuance of debt, $9.9 million of proceeds from the issuance of the U.S.
If it is determined that the future cash flows are more than temporary, we will record an impairment charge equal to the amount by which the carrying amount of the asset group exceeds its fair value. 48 Evaluating each long-lived asset group for impairment triggers requires us to estimate the amounts and timing of the projected cash flows to be generated over an extended period.
Evaluating each long-lived asset group for impairment triggers requires us to estimate the amounts and timing of the projected cash flows to be generated over an extended period.
In connection with the Sixth Amendment, we issued Cargill Financial 5.4 million warrants with a per share exercise price of $13.00 per share (both number of warrants and per share exercise price adjusted for the June 15, 2023 Reverse Stock Split (as defined in Note 11, Stockholders' Equity (Deficit) , to our Consolidated Financial Statements)) and a 5-year term that expires on March 28, 2028 (the "March 2023 Cargill Warrant").
In connection with the Sixth Amendment, we issued Cargill Financial 5.4 million warrants with a per-share exercise price of $13.00 and a five-year term expiring March 28, 2028 (the “March 2023 Cargill Warrant”).
As of December 31, 2024, a total of $54.6 million and $413.4 million was outstanding on the Subordinated Facility and the Senior Facility, respectively. The Subordinated Facility and the Senior Facility are included in "Long-term debt, net of debt issuance costs" and "Short-term debt" on the Consolidated Balance Sheet.
Cargill Loans As of December 31, 2025, a total of $302.0 million of principal was outstanding on the Senior Facility. The Senior Facility is included in "Long-term debt, net" on the Unaudited Condensed Consolidated Balance Sheets.
As of December 31, 2024, the principal amount due under our credit facilities with Cargill Financial totaled $467.9 million, of which $20.2 million is classified as current. We also had accrued interest of $15.3 million as of December 31, 2024.
At December 31, 2025, we had an accumulated deficit of $517.6 million and cash and cash equivalents and restricted cash of $10.7 million. As of December 31, 2025, the principal amount due under our credit facilities with Cargill Financial totaled $302.0 million, none of which is classified as current.
The decrease in fair value of the warrant liability is due to the decrease in our closing stock price on December 31, 2024, compared to the closing stock price on December 31, 2023.
Additional increase in the value of the warrants for the year ended December 31, 2025 is primarily due to a net increase in our closing stock price at December 31, 2025 compared to the closing stock price on the prior measurement date of December 31, 2024.
Additional decreases as compared to the prior year period were a $3.9 million decrease in salaries, benefits, and payroll-related expenses, $3.6 million decrease in legal, accounting, and professional consulting costs, and a $2.9 million decrease in loss on disposals charges primarily for construction-in-progress assets, which was partially offset by an increase of $1.0 million in insurance, and an increase of $0.9 million in transportation and delivery costs.
General and administrative expenses increased by $0.9 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily driven by an impairment charge of $3.7 million related to Pete's trade name and an increase in stock-based compensation of $1.4 million, which was partially offset by a decrease of $1.7 million in salaries, benefits, and payroll-related expenses, a decrease of $1.4 million in loss on disposal of assets, and a decrease of $0.9 million in professional fees.
The increase is primarily due to a significant increase in the principal amount outstanding on the Senior Facility, which increased interest expense by $31.6 million over the prior year period. Also contributing to the net increase was $1.5 million of incremental interest expense for the financing obligations related to the California Facilities.
The decrease is primarily due to a decrease in the principal amount outstanding under the Senior Facility and a reduction in the contractual interest rate as a result of the Eleventh Amendment, which decreased interest expense by $27.1 million, net of interest capitalized, over the prior year period.
Our first facility in Hamilton, Montana (the "Montana Facility") commenced construction in 2019 and reached commercial operation by the second half of 2020. In 2022, we acquired California-based complementary greenhouse farming company Hollandia Produce Group, Inc. and its subsidiaries, which operated under the name Pete's.
Since each Company greenhouse facility is able to generate identifiable cash flows, each of our facilities is considered to be an asset group. On April 4, 2022, the Company acquired California-based complementary greenhouse farming company Hollandia Produce Group, Inc. and its subsidiaries, which operated under the name Pete’s.
Net cash used in operating activities was $33.2 million for the year ended December 31, 2023, primarily due to a net loss of $124.0 million, which included a non-cash gain of $18.5 million related to change in fair value of warrant liability.
These amounts were partially offset by $5.7 million of non-cash amortization of debt premium. Net cash used in operating activities was $27.1 million for the year ended December 31, 2024, primarily due to a net loss of $119.9 million.
We utilize a Black-Scholes option pricing model ("Black-Scholes model") to estimate the fair value of the March 2023 Cargill Warrant at each reporting date. The application of the Black-Scholes model utilizes significant assumptions and estimates to determine an appropriate risk-free interest rate, volatility, term, dividend yield, discount due to exercise restrictions, and the fair value of common stock.
The application of the Black-Scholes model involves significant assumptions and estimates, including the risk-free interest rate, expected volatility, remaining contractual term, dividend yield, any applicable discounts for exercise restrictions, and the fair value of our common stock. Any significant adjustments to these unobservable inputs would directly impact the fair value of the related warrant liabilities.
Net cash provided by financing activities was $187.4 million for the year ended December 31, 2023, comprised of $152.6 million of proceeds from the issuance of debt and $35.0 million of proceeds from the sale and leaseback transaction for the California Facilities.
Bounti, LLC convertible note, $3.5 million from the issuance of common stock, and $1.6 million of proceeds from a financing obligation related to certain greenhouse and conveyor equipment located in the Company's Texas facility. 55 Net cash provided by financing activities was $100.1 million for the year ended December 31, 2024, comprised primarily of $100.1 million of net proceeds from the issuance of debt.
Any change in the estimates used may cause the value to be higher or lower than that reported. The derivative is not traded in an active market and the fair value is determined using valuation techniques.
Bounti Warrant was recorded as additional debt discount and a derivative liability in the "Warrant liability" line item of the Consolidated Balance Sheets. Determining the appropriate fair-value model and calculating the fair value of warrants requires considerable judgment. Any change in the estimates used may cause the value to be higher or lower than that reported.
Removed
We recently introduced new Grab & Go Salads and additions to our baby leaf portfolio with several high-velocity offerings, including Spinach, Arugula, and Basil. In addition, we introduced 50/50 blend and power greens in the third quarter of 2024.
Added
Our first facility in Hamilton, Montana (the "Montana Facility") commenced construction in 2019, reached commercial operation by the second half of 2020, and now acts as a corporate headquarters without active commercial operations. The Company is currently evaluating the future commercial use of its Montana facility because we no longer have additional capacity at other facilities.
Removed
We signed an offtake agreement with Sam's Club in October 2022 for our leafy greens production, initially from our Georgia facility and now including both our Georgia and Texas facilities. The offtake agreement provides for the sale of defined minimum quantities of leafy greens from our Georgia and Texas facilities and runs through September 2028.
Added
Management is exploring various utilization options, including supporting capacity needs within the Company’s existing network as well as potential third-party commercial arrangements. In 2022, we acquired California-based complementary greenhouse farming company Hollandia Produce Group, Inc. and its subsidiaries, which operated under the name Pete's.
Removed
Additionally, we evaluate commercial opportunities as part of these expansion efforts on an ongoing basis. 46 Commercial Facilities Update Texas Facility Product Mix Transition Progress We continue to make significant progress at our six-acre Texas facility.
Added
Additionally, we evaluate commercial opportunities as part of these expansion efforts on an ongoing basis. 47 Product Development The launch of our family-sized 10-ounce Romano Caesar Salad Kit in the Pacific Northwest continues to build momentum with consumers at retail — the kit realized a 75% increase in its baseline velocity (units sold per store per week) during the fourth quarter.
Removed
In response to evolving customer demands, we strategically reconfigured three acres of the facility—originally designed for head lettuce production—to create a flexible growing environment capable of producing both head lettuce and cut products based on customer preferences. This purposeful design approach highlights our commitment to adaptability and customer-centric operations.
Added
We continue to pursue growth of our arugula offering following its successful launch at both our Washington and Texas facilities in early 2025. Conventional arugula is often unreliable and insufficient and is a category that we believe we can continue to address through leveraging our baby leaf capabilities.
Removed
While this reconfiguration temporarily impacted the full utilization of the facility in the second half of 2024 and first quarter of 2025, we are now in the final stages of completing this work and expect to begin commercial production in this section starting in the second quarter of 2025.
Added
Distribution We currently service approximately 13,000 retail doors and expanded our retail presence in select southern markets with a new national retailer in the fourth quarter.
Removed
The purpose-built automated harvesting equipment for the configuration will be installed early third quarter 2025, replacing the temporary harvester we will use during the second quarter of 2025. The purpose-built harvester is expected to drive significant operational efficiencies and margin improvement.
Added
During the first quarter of 2026, we secured two additional accounts that are expected to launch in the coming months – a large premier retail customer covering more than 250 stores with a six SKU placement rollout and a large regional retailer.
Removed
Product Development & Distribution We expanded our high-value specialty greens distribution in the fourth quarter of 2024, bringing products like Arugula and Power Crisp to several Pacific Northwest retailers.
Added
Commercial Facilities Update Yield Enhancement We continue to advance our yield improvement and cost reduction initiatives across our facility network. Tower upgrades were completed at each of our facilities during the fourth quarter, which resulted in enhanced production efficiency and an approximate 10% increase in run-rate yield capacity to reach our highest yields to date.
Removed
We also expanded our Texas-grown Arugula offering with Brookshire's in approximately 80 stores in the first quarter of 2025 and began distributing Organic Living Butter Lettuce from California to HEB, strategically leveraging regional production to align with specific customer needs.
Added
We are also making select investments in our California facilities to improve operational efficiency, which we believe can improve yields by as much as 20%, resulting in increased throughput and enhanced margins. Capacity Expansion Project Plans remain in place to build additional capacity across our network of facilities enabled with our patented Stack & Flow Technology.
Removed
Additionally, we started shipping living Basil to an existing large retail customer across approximately 60 stores and secured distribution with several other wholesalers for their Basil products. We further strengthened our distribution network by establishing a new partnership with a prominent Midwest wholesaler and significantly expanded our relationship with Walmart, now serving 191 stores with premium baby leaf varieties.
Added
Patent No. 12,557,741, titled "Optimizing Growing Process in a Hybrid Growing Environment Using Computer Vision and Artificial Intelligence." The patent covers our proprietary methods for using computer vision, machine learning, and automated environmental controls to optimize plant growth across our hybrid vertical and greenhouse growing phases.
Removed
We also secured an additional commitment to serve 13 Walmart distribution centers with our Conventional Living Butter Lettuce, with shipments commencing in the second quarter from both our California and Texas facilities. Building on our Grab-and-Go Salad Kit rollout in 2024, we have evolved this offering to better serve retail partners and consumer trends.
Added
This is a significant milestone that strengthens the competitive moat around our patented Stack & Flow Technology platform and underscores our technology leadership in controlled environment agriculture. We have been deploying these capabilities across all of our Stack & Flow Technology–enabled facilities with tangible results, using AI-driven analysis of plant growth and environmental data to drive improved consistency and yield.
Removed
This evolution included the launch of new salad kits in the first quarter 2025, with additional flavors expected to be introduced in the third quarter of 2025, as well as the creation of a new product line that meets the needs of today’s value-oriented consumer.
Added
Subsequently, in connection with the Eleventh Amendment to the Original Credit Agreements, we entered into additional amendments to existing warrants held by Cargill Financial (the “Cargill Warrant Amendments”).
Removed
These developments reflect our strategy of implementing an optimized product mix while aligning production capabilities with specific customer needs.
Added
These amendments applied to (i) the March 2023 Cargill Warrant (the “Cargill Base Warrant”) and (ii) the warrants issued to Cargill Financial on November 21, 2021 (the “Cargill 2021 Warrants,” and together with the Base Warrant, the “Cargill Original Warrants”).
Removed
On January 23, 2024, the Company entered into an amendment to amend the March 2023 Cargill Warrant.
Added
The Cargill Warrant Amendments (a) reduced the exercise price of the Cargill Original Warrants to $4.00 per share of common stock, (b) extended the expiration date of each warrant to eight years from the closing date of the Eleventh Amendment, and (c) amended and restated the Cargill 2021 Warrants so that its terms conform to the form of the Cargill Base Warrant.
Removed
The change in fair value of the warrant is remeasured each quarter until the instrument is settled or expires with changes in fair value recorded in "Change in fair value of warrant liability" in the Consolidated Statements of Operations. Determining the appropriate fair-value model and calculating the fair value of warrants requires considerable judgment.
Added
The Cargill Original Warrants and the Cargill Amended Warrants cover the same aggregate number of shares, representing the right to purchase up to 5,408,145 shares of our common stock.
Removed
Any significant adjustments to the unobservable inputs would directly impact the fair value of the warrant liability. As a result of the unobservable inputs that were used to determine the expected volatility of the March 2023 Cargill Warrant, the fair value measurement of these warrants reflected a Level 3 measurement within the fair value measurement hierarchy.
Added
On August 1, 2025, we entered into a Convertible Note and Warrant Purchase Agreement with U.S. Bounti, LLC, pursuant to which the Company issued (i) a $10.0 million convertible note (the “Note”) and (ii) a common stock purchase warrant to acquire 550,000 shares of our common stock at an exercise price of $0.125 per share (the “U.S. Bounti Warrant”).
Removed
Since each Company greenhouse facility is able to generate identifiable cash flows, each of our facilities is considered to be an asset group. The Company did not recognize any impairment of long-lived assets for the years ended December 31, 2024 and 2023.
Added
The U.S. Bounti Warrant is exercisable upon issuance and expires on August 1, 2035. Similar to the Cargill Original Warrants, the Company determined that the U.S. Bounti Warrant does not meet the indexation or equity classification criteria under ASC 815 and therefore requires liability classification. The initial $1.5 million fair value of the U.S.
Removed
Goodwill We account for acquired businesses using the acquisition method of accounting which requires that the assets acquired, and liabilities assumed be recorded at the date of acquisition at their respective fair values.
Added
We utilize a Black-Scholes option pricing model (“Black-Scholes model”) to estimate the fair value of the Cargill Original Warrants and the U.S. Bounti Warrant at each reporting date.

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