Local Bounti (NYSE: LOCL) secures $15M convertible note and warrant deal
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Local Bounti Corporation entered a financing deal with U.S. Bounti, LLC involving a $15.0 million convertible note and a warrant for 5,500,000 common shares. The note carries 7.0% annual interest, initially paid-in-kind by increasing principal, and is convertible at $2.50 per share. Half of the note balance will automatically convert on the fourth anniversary and the rest at maturity, with options to repay in cash if conditions are met. Full conversion of the initial principal would issue 6,000,000 shares, plus any added PIK interest. The warrant is immediately exercisable at $0.125 per share for 10 years. Share issuance from conversions and exercises is capped at 1% of outstanding common stock until required stockholder approval, which the company must seek by June 30, 2026. A related letter with Cargill revised minimum liquidity covenants to $3.5 million through September 30, 2026 and $2.0 million thereafter, and delayed minimum EBITDA testing to March 31, 2027.
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Insights
Local Bounti adds $15M convertible funding and eases key covenants.
Local Bounti secured a
This structure provides immediate liquidity while deferring cash interest and principal, but introduces potential equity dilution through conversion of up to 6.0 million shares from principal, plus any shares tied to PIK interest and warrant exercises over time.
A supplemental letter with Cargill Financial lowers the minimum liquidity covenant to
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
FORM 8-K
______________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 13, 2026
LOCAL BOUNTI CORPORATION
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) | |||||||||
(Address of principal executive offices, including zip code) | |||||||||||
Registrant’s telephone number, including area code: (800 ) 640-4016
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
Convertible Note and Warrant Purchase Agreement
On March 13, 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 $15.0 million (the “Note”) and (ii) a common stock purchase warrant (the “Warrant”) pursuant to which the Purchaser has the right to purchase and acquire 5,500,000 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 and certain capital expenditures 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 $2.50 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 6,000,000 shares of Common Stock if converted at $2.50 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 an annual or special stockholders meeting not later than June 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 March 13, 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 (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 September 30, 2026 and $2.0 million from October 1, 2026 forward, to amend the minimum EBITDA covenant to be tested starting on March 31, 2027 instead of March 31, 2026, 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.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
(d) Exhibits.
Exhibit No. | Description | ||||
4.1 | Convertible Note by and between Local Bounti Corporation and U.S. Bounti, LLC. | ||||
4.2 | Common Stock Purchase Warrant issued by Local Bounti Corporation to U.S. Bounti, LLC. | ||||
10.1 | Convertible Note and Warrant Purchase Agreement, dated March 13, 2026, by and between Local Bounti Corporation and U.S. Bounti, LLC. | ||||
104 | Cover Page Interactive Data File (formatted as inline XBRL) | ||||
SIGNATURE
Pursuant to the requirements of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Local Bounti Corporation | |||||
/s/ Kathleen Valiasek | |||||
Name: Kathleen Valiasek | |||||
Title: President and Chief Executive Officer | |||||
Date: March 16, 2026
FAQ
What financing did Local Bounti (LOCL) announce in this 8-K?
Local Bounti entered a Convertible Note and Warrant Purchase Agreement for a $15.0 million convertible note and a warrant to buy 5,500,000 common shares from U.S. Bounti, LLC, providing new capital for working capital, general purposes, and specified capital expenditures.
What are the key terms of Local Bounti (LOCL)’s $15 million convertible note?
The note bears 7.0% annual interest, initially paid-in-kind by increasing principal. It is convertible into common stock at $2.50 per share, with half the balance automatically converting on the fourth anniversary and the remainder on the maturity date, subject to specified conditions.
How many shares could be issued from Local Bounti (LOCL)’s new convertible note and warrant?
Conversion of the note’s initial $15.0 million principal at $2.50 per share would issue 6,000,000 shares, subject to additional shares from paid-in-kind interest. The warrant allows purchase of 5,500,000 shares at an exercise price of $0.125 per share.
What stockholder approval constraints affect Local Bounti (LOCL)’s new securities?
Until stockholders approve as required by New York Stock Exchange rules, the investor cannot receive more than 1% of outstanding common stock from note conversion or warrant exercise. Local Bounti must seek this required stockholder approval by a meeting held no later than June 30, 2026.
How did Local Bounti (LOCL) amend its covenants with Cargill Financial?
A letter agreement with Cargill revised the minimum liquidity covenant to $3.5 million through September 30, 2026 and $2.0 million thereafter. It also delays the start of the minimum EBITDA covenant test from March 31, 2026 to March 31, 2027.
Were Local Bounti (LOCL)’s new note and warrant registered under the Securities Act?
No. The note, warrant, and underlying common shares were issued without registration under the Securities Act, relying on Section 4(a)(2) and Rule 506 of Regulation D, restricting offers and sales to transactions qualifying for applicable registration exemptions.
Filing Exhibits & Attachments
6 documents
LOCAL BOUNTI CORP