Local Bounti Corporation
08/07/2026 | Press release | Distributed by Public on 08/07/2026 14:51
Material Agreement, Financial Obligation, Private Placement (Form 8-K)
Item 1.01 Entry into a Material Definitive Agreement.
Convertible Note and Warrant Purchase Agreement
On August 7, 2026, Local Bounti Corporation, a Delaware corporation (the "Company"), entered into a Convertible Note and Warrant Purchase Agreement (the "Purchase Agreement") with U.S. Bounti, LLC (the "Purchaser"), providing for the purchase, sale and issuance of (i) a convertible note with an initial principal balance of $12.5 million (the "Note") and (ii) a common stock purchase warrant (the "Warrant") pursuant to which the Purchaser has the right to purchase and acquire 1,000,000 shares of the Company's common stock, par value $0.0001 per share (the "Common Stock"). The Company intends to use the proceeds from the sale of the Note and the Warrant for working capital and general corporate purposes as set forth in the Purchase Agreement.
The Note bears interest at a rate of 7.0% per year, commencing on the date of the initial issuance of the Note (the "Issuance Date"). Interest will accrue semi-annually on each June 30 and December 31, commencing December 31, 2026 (each, a "PIK Interest Payment Due Date"), and will be payable semi-annually in arrears on each PIK Interest Payment Due Date by automatically increasing the principal amount of the Note by the amount of such interest (with such increased amount thereafter accruing interest as well) on each PIK Interest Payment Due Date ("PIK Interest").
From time to time after the third anniversary of the Issuance Date, interest may be payable quarterly in arrears in cash on each March 31, June 30, September 30 and December 31, commencing December 31, 2029 (each, a "Cash Interest Payment Due Date"), in each case, in an amount equal to interest accrued during the quarter ending on such Cash Interest Payment Due Date, so long as certain conditions are met as set forth in the Note.
During the term of the Note, the Note will be convertible into shares of Common Stock from time to time at the option of the Purchaser, upon delivery on one or more occasions of a written notice to the Company electing to convert all or any portion of Note Obligations Amount. The initial conversion price of the Note is $1.37 per share of Common Stock (the "Conversion Price"). The Conversion Price is subject to adjustment for stock splits, dividends or distributions, recapitalizations or similar transactions.
On the fourth anniversary of the Issuance Date, fifty percent (50%) of the Note Obligations Amount will be automatically converted into shares of Common Stock at the Conversion Price. The remaining fifty percent (50%) of the Note Obligations Amount will be automatically converted into shares of Common Stock at the Conversion Price on the maturity date of the Note. Notwithstanding the foregoing, however, fifty percent (50%) of the Note Obligations Amount may be payable in cash on the fourth anniversary of the Issuance Date, with the remaining fifty percent (50%) of the Note Obligations Amount repaid in cash on the maturity date of the Note, so long as certain conditions are met as set forth in the Note.
Conversion of the full initial principal amount of the Note would result in the issuance of 9,124,088 shares of Common Stock if converted at $1.37 per share, which amount is subject to increase by any PIK Interest that is added to the outstanding principal under the terms of the Note.
The Purchase Agreement includes customary representations, warranties and covenants and sets forth standard events of default upon which the Note may be declared immediately due and payable and will be subordinated to the obligations under the Senior Credit Agreement.
The Warrant is exercisable immediately at an exercise price of $0.125 per share of Common Stock and will expire 10 years from the initial exercise date.
Pursuant to the terms of the Purchase Agreement, the Purchaser will not have the right to receive, upon conversion of the Note or exercise of the Warrant, any shares of Common Stock if the issuance of such shares of Common Stock would exceed 1% of the issued and outstanding Common Stock, except that such limitation will not apply after the date that stockholder approval is obtained and deemed effective, as required by the rules and regulations of the New York Stock Exchange (the "Required Stockholder Approval"). The Company is required to seek the Required Stockholder Approval at a special stockholders meeting not later than November 30, 2026.
The Note, the Warrant and the shares of Common Stock issuable upon conversion of the Note or exercise of the Warrant have not been registered under the Securities Act of 1933, as amended (the "Securities Act") and may not be offered or sold absent registration or an applicable exemption from registration requirements.
The foregoing descriptions of the Note, the Warrant and the Purchase Agreement and the transactions contemplated thereby do not purport to be complete and are qualified in their entirety by reference to the full texts of the Note, the Warrant and the Purchase Agreement, copies of which are attached hereto as Exhibit 4.1, Exhibit 4.2 and Exhibit 10.1, respectively, and incorporated herein by reference.
Also on August 7, 2026, the Company entered into a letter agreement (the "Letter Agreement") with Cargill Financial Services International, Inc., a Delaware corporation ("Cargill Financial"), to supplement certain terms of the Credit Agreement dated as of September 3, 2021, by and among Local Bounti Operating Company LLC, a Delaware limited liability company ("Opco"),
each subsidiary of Opco identified as a "Borrower" therein, and Cargill Financial (as amended by the letter agreement dated as of March 13, 2026 entered into between the Company and Cargill Financial, and as further amended, restated, supplemented or otherwise modified from time to time prior to the Transaction Date, the "Senior Credit Agreement"). Pursuant to the terms of the Letter Agreement the parties agreed, among other things, to revise the minimum liquidity covenant to be $3.5 million through March 31, 2027 and $2.0 million from April 1, 2027 forward, to enable the Borrowers to pay in kind interest accrued during the quarters ending March 31, 2027 and June 30, 2027 (so long as no Default or Event of Default, as such terms are defined in the Senior Credit Agreement, has occurred and is continuing), and Cargill consented to the issuance of the Note and the Warrant.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K (this "Current Report") is incorporated by reference in this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 of this Current Report is incorporated by reference in this Item 3.02. In connection with the issuance of the Note and the Warrant described in Item 1.01, the Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder.
Local Bounti Corporation published this content on August 07, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 07, 2026 at 20:51 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]