locl-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Commission File Number						001-40125

LOCAL BOUNTI CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

83-3686055

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S Employer Identification No.)

490 Foley Lane

Hamilton,

59840

(Address of Principal Executive Offices, Including Zip Code)


			(800)			640-4016


(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value of $0.0001 per share

LOCL

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2of the Act). Yes ☐ No ☒

The number of outstanding shares of Local Bounti Corporation’s common stock was 22,271,082 at November 10, 2025.

TABLE OF CONTENTS


			Page
Part I – FINANCIAL INFORMATION			5

Item 1. Financial Statements
Unaudited Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024			5
Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024			6
Unaudited Condensed Consolidated Statements of Stockholders' Deficit for the Three and Nine Months Ended September 30, 2025 and 2024			7
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024			8
Notes to Unaudited Condensed Consolidated Financial Statements			10

Item 2. Management 's Discussion and Analysis of Financial Condition and Results of Operations			21

Item 3. Quantitative and Qualitative Disclosures About Market Risk			29

Item 4. Controls and Procedures			29

Part II – OTHER INFORMATION			30

Item 1. Legal Proceedings			30

Item 1A. Risk Factors			30

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			30

Item 5. Other Information			31

Item 6. Exhibits			32

SIGNATURES			33

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and the information incorporated herein by reference contain certain statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify these forward-looking statements by the use of terms such as "expect," "anticipate," "believe," "continue," "estimate," "intend," "may," "plan," "project," "forecast," "seek," "should," "target," "will," or similar expressions, and variations or negatives of these words, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, without limitation, statements regarding our ability to raise capital in the future, future financial performance, business strategies including future acquisitions, expansion plans including construction of future facilities, future results of operations, estimated revenues, losses, projected costs, prospects, plans and objectives of management. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from results expressed or implied in this Quarterly Report on Form 10-Q. The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements:

•Local Bounti’s ability to continue as a going concern and the risk that Local Bounti will fail to obtain additional necessary capital when needed on acceptable terms or at all;

•Local Bounti's ability to generate significant revenue;

•restrictions and covenants contained in Local Bounti's debt facility agreements with Cargill Financial Services International, Inc. ("Cargill Financial") and Local Bounti's ability to comply therewith;

•the risk that the concentrated ownership of our common stock will prevent other stockholders from influencing significant decisions;

•the risk that Local Bounti may never achieve or sustain profitability;

•the risk that Local Bounti could fail to effectively manage its future growth;

•Local Bounti's ability to complete the build out of its current or additional facilities in the future;

•Local Bounti's reliance on third parties for construction, the risk of delays relating to material delivery and supply chains, and fluctuating material prices;

•Local Bounti's ability to scale its operations and decrease its cost of goods sold over time;

•the potential for damage to or problems with Local Bounti's facilities;

•the impact that current or future acquisitions, investments or expansions of scope of existing relationships have on Local Bounti's business, financial condition, and results of operations;

•unknown liabilities that may be assumed in acquisitions;

•Local Bounti's ability to attract and retain qualified employees;

•Local Bounti's ability to develop and maintain its brand or brands;

•Local Bounti's ability to achieve its sustainability goals;

•Local Bounti's ability to maintain its company culture or focus on its vision as it grows;

•Local Bounti's ability to execute on its growth strategy;

•the risk of diseases and pests destroying crops;

•Local Bounti's ability to compete successfully in the highly competitive markets in which it operates;

•Local Bounti's ability to defend itself against intellectual property infringement claims or other litigation;

•Local Bounti's ability to effectively integrate the acquired operations of any CEA or similar operations which it acquires into its existing operations;

•changes in consumer preferences, perception, and spending habits in the food industry;

•the risk that seasonality may adversely impact Local Bounti's results of operations;

•Local Bounti's ability to repay, refinance, restructure, or extend its indebtedness as it comes due;

•Local Bounti's ability to comply with the continued listing requirements of the New York Stock Exchange ("NYSE") or timely cure any noncompliance thereof; and

•the other factors discussed in Item 1A, "Risk Factors" of the Company's most recent Annual Report on Form

10-K and any updates to those factors set forth in Local Bounti's subsequent Quarterly Reports on Form 10-Q

or Current Reports on Form 8-K.

The forward-looking statements contained herein are based on our current expectations and beliefs concerning future developments and their potential effects on our business. There can be no assurance that future developments affecting our business will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward- looking statements. These risks and uncertainties include, but are not limited to, the Risk Factors identified in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 31, 2025.

Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the effect of all such risk factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements. The forward-looking statements made by us in this Quarterly Report on Form 10-Q speak only as of the date made. Local Bounti undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

WEBSITE AND SOCIAL MEDIA DISCLOSURE

Investors and others should note that we routinely announce material information to investors and the marketplace using filings with the SEC, press releases, public conference calls, presentations, webcasts, and our website. We also intend to use certain social media channels as a means of disclosing information about Local Bounti and our products to our customers, investors and the public (e.g., @Local Bounti and #LocalBounti on X). While not all of the information that we post to our website or social media accounts is of a material nature, some information could be deemed to be material. Accordingly, we encourage investors, the media, and others to sign up for and regularly follow our social media accounts. 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.

ADDITIONAL INFORMATION

Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q to the "Company," "Local Bounti," "we," "us," "our" and similar terms refer to Local Bounti Corporation and its consolidated subsidiaries.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

LOCAL BOUNTI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	September 30,		December 31,
	2025		2024
Assets
Current assets
Cash and cash equivalents	$	6,199	$	937
Restricted cash	6,512		6,529
Accounts receivable, net	2,424		2,282
Inventory, net	6,824		6,814
Prepaid expenses and other current assets	2,174		2,261
Total current assets	24,133		18,823
Property and equipment, net	361,807		370,978
Finance lease right-of-use assets	230		277
Operating lease right-of-use assets	53		73
Intangible assets, net	31,406		37,783
Other assets	132		101
Total assets	$	417,761	$	428,035

Liabilities and stockholders' deficit
Current liabilities
Accounts payable	$	9,234	$	16,987
Accrued liabilities	4,890		18,082
Short-term debt	—		20,205
Financing obligation	79		51
Operating lease liabilities	31		30
Finance lease liabilities	81		81
Total current liabilities	14,315		55,436
Long-term debt
Principal amount	312,000		447,719
Plus: Debt premium, net of amortization	174,416		—
Less: Debt discount, net of amortization	(1,562)		—
Less: Unamortized deferred financing costs	—		(31,142)
Long-term debt, net	484,854		416,577
Accrued interest, noncurrent	9,974		—
Financing obligation, noncurrent	50,286		49,856
Operating lease liabilities, noncurrent	34		57
Finance lease liabilities, noncurrent	166		206
Warrant liability	16,271		6,403
Total liabilities	575,900		528,535

Commitments and contingencies (Note 12)



Stockholders' deficit
Common stock, $0.0001 par value, 400,000,000 shares authorized, 22,124,733 and 8,656,122 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively	2		1
Additional paid-in capital	350,771		322,729
Accumulated deficit	(508,912)		(423,230)
Total stockholders' deficit	(158,139)		(100,500)
Total liabilities and stockholders' deficit	$	417,761	$	428,035

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

LOCAL BOUNTI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Sales	$	12,200	$	10,242	$	35,908	$	28,068
Cost of goods sold(1)(2)	10,794		8,829		31,569		24,518
Gross profit	1,406		1,413		4,339		3,550
Operating expenses:
Research and development(1)(2)	6,677		7,096		20,139		15,102
Sales and marketing(1)(2)	2,441		1,991		6,947		5,872
General and administrative(1)(2)	10,509		10,357		26,658		24,770
Total operating expenses	19,627		19,444		53,744		45,744
Loss from operations	(18,221)		(18,031)		(49,405)		(42,194)
Other income (expense):
Change in fair value of warrant liability	(3,358)		1,921		(8,367)		(1,163)
Interest expense, net	(4,560)		(18,312)		(28,000)		(40,420)
Other (expense) income	(291)		95		90		133
Net loss	(26,430)		(34,327)		(85,682)		(83,644)
Less: Deemed dividend to preferred stockholders	—		—		403		—
Net loss attributable to common stockholders	$	(26,430)	$	(34,327)	$	(86,085)	$	(83,644)

Net loss applicable to common stockholders per basic common share:
Basic and diluted	$	(1.18)	$	(4.01)	$	(5.78)	$	(9.91)
Weighted average common shares outstanding:
Basic and diluted	22,481,564		8,568,970		14,903,536		8,436,727

(1) Amounts include stock-based compensation as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Cost of goods sold	$	16	$	15	$	102	$	75
Research and development	47		86		208		250
Sales and marketing	59		61		341		(64)
General and administrative	1,129		1,225		3,450		1,840
Total stock-based compensation expense, net of amounts capitalized	$	1,251	$	1,387	$	4,101	$	2,101

(2) Amounts include depreciation and amortization as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Cost of goods sold	$	2,094	$	1,642	$	6,057	$	4,197
Research and development	2,342		2,852		7,557		5,031
General and administrative	1,415		1,374		3,973		3,757
Total depreciation and amortization	$	5,851	$	5,868	$	17,587	$	12,985

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

LOCAL BOUNTI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 and 2024

(in thousands, except share data)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Deficit
	Shares	Amount
Balance, December 31, 2024	8,656,122	$	1	$	322,729	$	(423,230)	$	(100,500)
Issuance of common stock for PIPE Investment, net of issuance costs	1,771,586	—		3,477		—		3,477
Deemed dividend to Series A Preferred Stock	—	—		(403)		—		(403)
Vesting of restricted stock units, net	215,260	—		—		—		—
Stock-based compensation	—	—		647		—		647
Net loss	—	—		—		(37,675)		(37,675)
Balance, March 31, 2025	10,642,968	1		326,450		(460,905)		(134,454)
Conversion of Series A Preferred Stock to common stock	10,728,414	1		21,407		—		21,408
Vesting of restricted stock units, net and payment of minimum employee taxes withheld upon net share settlement of restricted stock units	412,895	—		(536)		—		(536)
Stock-based compensation	—	—		2,437		—		2,437
Net loss	—	—		—		(21,577)		(21,577)
Balance, June 30, 2025	21,784,277	2		349,758		(482,482)		(132,722)
Vesting of restricted stock units, net and payment of minimum employee taxes withheld upon net share settlement of restricted stock units	340,456	—		(311)		—		(311)
Stock-based compensation	—	—		1,324		—		1,324
Net loss	—	—		—		(26,430)		(26,430)
Balance, September 30, 2025	22,124,733	$	2	$	350,771	$	(508,912)	$	(158,139)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders' Equity (Deficit)
	Shares	Amount
Balance, December 31, 2023	8,311,237	$	1	$	318,600	$	(303,328)	$	15,273
Vesting of restricted stock units, net	126,305	—		—		—		—
Stock-based compensation	—	—		(670)		—		(670)
Net loss	—	—		—		(24,050)		(24,050)
Balance, March 31, 2024	8,437,542	1		317,930		(327,378)		(9,447)
Vesting of restricted stock units, net	136,707	—		—		—		—
Stock-based compensation	—	—		1,875		—		1,875
Net loss	—	—		—		(25,267)		(25,267)
Balance, June 30, 2024	8,574,249	1		319,805		(352,645)		(32,839)
Vesting of restricted stock units, net	76,400	—		—		—		—
Stock-based compensation	—	—		1,553		—		1,553
Net loss	—	—		—		(34,327)		(34,327)
Balance, September 30, 2024	8,650,649	$	1	$	321,358	$	(386,972)	$	(65,613)

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

LOCAL BOUNTI CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Nine Months Ended September 30,
	2025		2024
Operating Activities:
Net loss	$	(85,682)	$	(83,644)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	14,910		10,307
Amortization of intangible assets	2,677		2,678
Stock-based compensation expense, net of amounts capitalized	4,101		2,101
Allowance for expected credit losses	(18)		(55)
Inventory allowance	(504)		1,664
Loss on disposal of property and equipment	27		1,652
Change in fair value of warrant liability	8,367		1,163
Paid-in-kind and accrued interest expense	25,267		23,271
Amortization of debt premium	(3,661)		—
Amortization of debt issuance costs	2,100		6,300
Interest expense on financing obligation	458		523
Intangibles impairment	3,700		—
Changes in operating assets and liabilities:
Accounts receivable	(125)		1,090
Inventory	494		(4,002)
Prepaid expenses and other current assets	87		903
Other assets	(32)		(2,984)
Accounts payable	(1,507)		5,110
Operating lease liabilities	(4)		(23)
Finance lease liabilities	47		21
Accrued liabilities	2,108		5,630

Net cash used in operating activities	(27,190)		(28,295)

Investing Activities:
Purchases of property and equipment	(12,071)		(72,629)
Net cash used in investing activities	(12,071)		(72,629)

Financing Activities:

Proceeds from issuance of Series A preferred stock, net of issuance costs	21,407		—
Proceeds from issuance of common stock, net of issuance costs	3,543		—
Proceeds from issuance of debt	10,468		90,851
Proceeds from issuance of convertible note, net of debt issuance costs	9,975		—
Payment of minimum employee taxes withheld upon net share settlement of restricted stock units	(847)		—
Principal payment on finance lease liabilities	(40)		(15)
Net cash provided by financing activities	44,506		90,836
Net change in cash and cash equivalents and restricted cash	5,245		(10,088)
Cash and cash equivalents and restricted cash at beginning of period	7,466		16,895
Cash and cash equivalents and restricted cash at end of period	$	12,711	$	6,807

Reconciliation of cash, cash equivalents, and restricted cash from the Unaudited Condensed Consolidated Balance Sheets to the Unaudited Condensed Consolidated Statements of Cash Flows


Cash and cash equivalents	$	6,199	$	317
Restricted cash	6,512		6,490
Total cash and cash equivalents and restricted cash as shown in the Unaudited Condensed Consolidated Statements of Cash Flows	$	12,711	$	6,807


Non-cash investing and financing activities:
Conversion of Series A Preferred Stock to common stock	$	21,407	$	—
Accrued interest capitalized to debt	$	15,293	$	—
Purchases of property and equipment included in accounts payable and accrued liabilities	$	915	$	3,123
Transaction costs recorded to Preferred Stock included in accounts payable	$	469	$	—
Stock-based compensation capitalized to property and equipment, net	$	306	$	655
Deemed dividend to preferred stockholders	$	403	$	—
Interest capitalized to property and equipment, net	$	—	$	10,460

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

LOCAL BOUNTI CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Business Description

Description of the Business

Local Bounti Corporation ("Local Bounti" or the "Company") was founded in August 2018 and is headquartered in Hamilton, Montana. The Company produces sustainably grown produce, focused primarily on grown living lettuce, herbs, salad kits, and loose leaf lettuce. The Company is a controlled environment agriculture ("CEA") company that utilizes patented Stack & Flow Technology®, which is a hybrid of vertical and hydroponic greenhouse farming, to grow healthy food sustainably and affordably. Through the Company's CEA process, its goal is to produce environmentally sustainable products in a manner that will increase harvest efficiency, limit water usage, and reduce the carbon footprint of the production and distribution process.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The Unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in the statements herein.

The Unaudited Condensed Consolidated Financial Statements do not include all of the disclosures required by U.S. GAAP for annual financial statements and should be read in conjunction with the audited Consolidated Financial Statements of the Company for the year ended December 31, 2024 (the "Annual Financial Statements") as filed with the SEC. In the opinion of the Company, the accompanying Unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of only normal recurring adjustments, necessary to fairly present its financial position as of September 30, 2025, its results of operations for the three and nine months ended September 30, 2025 and 2024, its cash flows for the nine months ended September 30, 2025 and 2024, and its stockholders' deficit for the three and nine months ended September 30, 2025 and 2024. Results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year ending December 31, 2025 or any future period. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2024 was derived from the Annual Financial Statements but does not contain all of the footnote disclosures from the Annual Financial Statements.

Change in Presentation

In the Unaudited Condensed Consolidated Statements of Operations for three and nine months ended September 30, 2025, the Company has revised the presentation of operating expenses to separately present "Sales and marketing" and "General and administrative." In prior periods, these expenses were presented on a combined basis as "Selling, general and administrative."

The Company believes this updated presentation provides a more meaningful view of its cost structure and better aligns with how management evaluates financial performance and allocates resources. To facilitate comparison, amounts for the three and nine months ended September 30, 2024 have been recast to conform to the current period presentation. This change in presentation had no impact on total operating expenses, loss from operations, net loss, or loss per share for any period presented.

Impairment of Long-Lived Assets

The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Such indicators include, but are not limited to, significant adverse changes in business climate, market conditions, or other events that indicate an asset’s carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value.

On April 4, 2022, the Company acquired California-based complementary greenhouse farming company Hollandia Produce Group, Inc. and its subsidiaries (the "Pete’s Acquisition"), which operated under the name Pete’s. As part of the acquisition, the Company recognized identifiable intangible assets, including the Pete’s trade name.

As of September 30, 2025, the Company completed the transition of the Pete’s brand to the Local Bounti brand, and the Company is no longer using the Pete’s trade name in its line of products. Because the Pete’s trade name is no longer in use, management concluded that the related trade name intangible asset's carrying value was no longer considered recoverable. Accordingly, the related trade name intangible asset was written off in full, resulting in an impairment charge of $3.7 million. The impairment charge is included in "General and administrative" expenses in the Consolidated Statements of Operations for the three and nine months ended September 30, 2025.

Accounting Pronouncements Recently Adopted

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740), which requires disclosure of specific categories and disaggregation of information in the rate reconciliation table. The ASU also requires disclosure of disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. The Company is adopting ASU 2023-09 for the fiscal year ending December 31, 2025 on a prospective basis. The adoption of this ASU had no impact on the Company’s interim Unaudited Condensed Consolidated Financial Statements and related disclosures.

3. Inventory

Inventory, net consisted of the following:


	September 30,		December 31,
	2025		2024
	(in thousands)
Raw materials	$	2,877	$	2,349
Production	4,509		5,515
Finished goods	186		202
Inventory allowance	(748)		(1,252)
Total inventory, net	$	6,824	$	6,814

4. Property and Equipment

Property and equipment, net consisted of the following:


	September 30,		December 31,
	2025		2024
	(in thousands)
Machinery, equipment, and vehicles	$	119,364	$	115,373
Land	19,253		19,253
Buildings and leasehold improvements	261,610		258,864
Construction-in-progress	4,743		6,039
Less: Accumulated depreciation	(43,163)		(28,551)
Property and equipment, net	$	361,807	$	370,978

Depreciation expense related to property and equipment was approximately $5.0 million and $5.0 million for the three months ended September 30, 2025 and 2024, respectively, and approximately $14.9 million and $10.3 million for the nine months ended September 30, 2025 and 2024, respectively.

5. Accrued Liabilities

Accrued liabilities consisted of the following:

SEC Form 10-Q filed by Local Bounti Corporation