Local Bounti borrowed $12.5 million from its controlling owner on August 7. The company’s second quarter report says that money is what removes substantial doubt about its ability to keep operating, and that it funds at least 12 more months. Cash on hand at June 30 was $3.6 million against $599.6 million in liabilities.
Where the numbers come from
Two filings, both public on EDGAR. The Form 10-Q for the period ended June 30, 2026, filed August 12, carries the balance sheet and the cash flow statement. The Form DEF 14A special meeting proxy, filed September 21, carries the terms of the note and the date of the vote.
Local Bounti is a controlled environment agriculture company founded in 2018 and headquartered in Hamilton, Montana. It grows mostly living and loose leaf lettuce using a hybrid method it calls Stack and Flow, runs facilities in California, Georgia, Washington and Texas, and ships to roughly 13,000 retail locations across 35 states. It is not a microgreens business, but it is the closest thing to one that files audited numbers every quarter.
The balance sheet at June 30
Total assets $402.7 million, of which $349.4 million is property and equipment. Total liabilities $599.6 million. That leaves a stockholders’ deficit of $196.9 million. Accumulated deficit over the life of the company is $550.1 million.
Cash and cash equivalents were $3.6 million, with another $6.5 million restricted. Debt principal is $328.3 million; once debt premium and discounts are applied, long term debt appears on the balance sheet at $489.3 million. Accrued interest classified as noncurrent adds $23.5 million.
Gross profit covers less than a third of interest
This is the line that matters. First half sales were $27.2 million, cost of goods sold $24.6 million, gross profit $2.6 million. That is a 9.5 percent gross margin for the half and 7.6 percent in the second quarter alone.
Net interest expense for the same six months was $8.5 million. Gross profit covers less than a third of the interest bill, and operating expenses of $30.5 million sit on top of that with nothing behind them. Loss from operations was $27.9 million for the half, net loss $32.5 million, or $1.22 per share.
| Six months ended June 30, 2026 | $ million |
|---|---|
| Sales | 27.2 |
| Gross profit | 2.6 |
| Operating expenses | 30.5 |
| Net interest expense | 8.5 |
| Net loss | 32.5 |
| Cash used in operating activities | 13.4 |
How far $12.5 million actually goes
The cash flow statement gives the real rate. Operating activities consumed $13.4 million over six months and equipment purchases took another $2.2 million. That is $15.6 million in half a year, or $2.6 million a month.
Divide $12.5 million by that rate and it buys under five months. Management writes 12, and points to three sources at once: the note, cash on hand, and projected cash from product sales. The gap between five months and twelve rests on the operating plan, and the filing does show that plan in motion. Research and development spending fell from $13.5 million to $10.3 million year over year, general and administrative from $16.1 million to $15.1 million.
Third loan from the same owner in 13 months
The lender is not a bank. It is U.S. Bounti, an entity the proxy describes as controlled by Charles R. Schwab, who holds voting power over 71.5 percent of the shares and beneficially owns 74.3 percent. Since August 2025 the same lender has written three notes:
- August 1, 2025: $10.0 million at 6.0 percent, with a warrant for 550,000 shares at $0.125
- March 13, 2026: $15.0 million at 7.0 percent, with a warrant for 5,500,000 shares at the same $0.125
- August 7, 2026: $12.5 million convertible at $1.37, with a warrant for 1,000,000 shares again at $0.125
That is $37.5 million in thirteen months. Every warrant is struck at $0.125 while the August note converts at $1.37, an eleven-fold difference between two prices inside the same package of documents.
The November 4 vote
NYSE rules force a shareholder vote here, because the lender is an active related party and both the conversion price and the warrant strike sit below the exchange’s minimum price. The special meeting is set for November 4, 2026, with a record date of September 18. On that date there were 23,381,516 shares outstanding and 38 holders of record.
Shareholders vote on issuing up to 12,563,309 conversion shares plus 1,000,000 warrant shares. Against 23.38 million shares outstanding, that is 58 percent dilution. If the vote fails, the purchase agreement obligates the company to call the same meeting every four months until approval comes through. The vote can be delayed, and it cannot be lost permanently.
What a small grower should take from this
The scale does not transfer to anyone reading this. The ratio does. A $349 million equipment base produced $27 million of half-year sales at a 9.5 percent gross margin. That works out to more than six dollars of invested capital for every dollar of annual revenue, and the interest on that capital eats the entire margin before payroll or rent enter the picture.
Set it beside the sector data. The first federal microgreens census counted 516 operations with $86.4 million of sales in 2024. One company’s accumulated deficit equals 6.4 years of revenue for the entire US microgreens industry.
The test is arithmetic anyone can run. Before financing equipment, put last year’s gross profit next to the annual interest the loan would carry. If interest is the larger number, the equipment works for the lender.
