DEF: Local Bounti Seeks Stockholder Approval for Share Issuance and Incentive Plan Amendment

Local Bounti is asking stockholders to vote on proposals including the election of directors, ratification of auditors, approval of share issuance related to preferred stock conversion, and an amendment to the equity incentive plan at its upcoming annual meeting.

Summary

• Local Bounti Corporation is holding its annual meeting of stockholders on June 11, 2025.
• The meeting will be conducted virtually.
• Stockholders will vote on several proposals, including the election of three Class I directors, ratification of the appointment of WithumSmith+Brown, PC as the independent auditor, approval of the issuance of common stock upon conversion of Series A Preferred Stock, and approval of an amendment to the 2021 Equity Incentive Plan to increase the number of shares available for grant by 2,473,042 shares.
• The Board of Directors recommends voting in favor of all nominees for director and all proposals.
• The record date for determining stockholders eligible to vote is April 14, 2025.
• Proxy materials are being distributed to stockholders starting on or about April 17, 2025.
• U.S. Bounti, LLC, controlled by Charles R. Schwab, will hold the voting power over 56.2% of Local Bounti's outstanding common stock following the conversion of the Series A Preferred Stock upon approval of the NYSE Approval Proposal.
• Mr. Schwab, through his control of other entities which hold shares of Local Bounti's common stock, will beneficially own 61.5% of Local Bounti's outstanding common stock.

Sentiment

Score: 6

Explanation: The document is neutral in tone, as it is a formal proxy statement. However, the need for shareholder approval for share issuance and the potential for strategic alternatives if approval is not obtained introduces some uncertainty.

Positives

• The Board is actively planning for CEO succession and reviewing senior management selection.
• The company has adopted a Compensation Recovery Policy (clawback policy) applicable to current and former executive officers.
• The company has a written Related Party Transaction Policy to ensure fair dealings.
• The company is committed to promoting high standards of ethical business conduct and compliance with applicable laws.
• The company has adopted Corporate Governance Guidelines as a general framework to assist the Board in carrying out its responsibilities.

Negatives

• If the NYSE Approval Proposal is not approved, Local Bounti may need to consider strategic alternatives to strengthen its liquidity position, which involve significant uncertainties, potential significant delays, costs and other risks.
• If the NYSE Approval Proposal is not approved by stockholders within a year of the date of the Annual Meeting, Local Bounti may have to repay the purchase price of the Series A Preferred Stock if requested by the purchasers of the Series A Preferred Stock.
• Dilution will occur if the stockholders vote to approve the conversion of the Series A Preferred Stock into shares of common stock.

Risks

• Failure to obtain stockholder approval for the issuance of shares upon conversion of the Series A Preferred Stock could lead to financial instability and the need for strategic alternatives.
• Concentration of ownership with Charles R. Schwab could lead to decisions that don't align with all stockholders' interests and may deter potential acquisitions.
• Dilution of existing stockholders' equity if the proposal to issue shares upon conversion of preferred stock is approved.
• If the 2021 Plan Amendment is not approved by our stockholders, our ability to recruit and retain employees could be negatively impacted.

Future Outlook

Local Bounti may consider strategic alternatives to strengthen its liquidity position if the NYSE Approval Proposal is not approved, including capital markets transactions, asset sales, and other strategic transactions.

Industry Context

The document does not provide specific industry context beyond the company's operations. It focuses on corporate governance and shareholder voting matters.

Management Changes

Corporate Governance

Related Party Transactions

• In June 2020, Local Bounti sold a greenhouse facility to Grow Bitterroot, LLC, a qualified opportunity zone fund owned in part by Live Oak Ventures, LLC, which owns more than 10% of Local Bounti's stock, and Orange Strategies LLC, of which director Pamela Brewster is principal.
• Travis M. Joyner, a director, is manager of Grow Bitterroot.
• Local Bounti leases land and the greenhouse facility from Grow Bitterroot and provides property maintenance and management services in exchange for an annual fee of $50,000.
• In December 2020, Local Bounti entered into a short-term lease agreement for commercial office space with BrightMark Partners, LLC, co-founded by Craig M. Hurlbert and Travis M. Joyner, who are executive officers of Local Bounti.
• In May 2022, Local Bounti entered into a residential lease agreement with Spencer Properties I, LLC, owned by Kathleen Valiasek, President, Chief Executive Officer, and Chief Financial Officer, and her husband.
• Rick D. Leggott is the control person of Bitterroot Partners, LLC, a stockholder of Local Bounti, and his immediate family member, Jeff Leggott, is a full-time employee of Local Bounti.

Stakeholder Impact

• Stockholders will be impacted by the decisions made at the annual meeting, particularly regarding share issuance and the equity incentive plan.
• Employees may be affected by changes to the equity incentive plan, which impacts compensation and retention.
• The company's financial stability and strategic direction could be influenced by the outcome of the vote on the Series A Preferred Stock conversion.

Next Steps

• Stockholders need to vote on the proposals outlined in the proxy statement.
• The company will hold its annual meeting on June 11, 2025.
• The company will file a Form 8-K with the SEC to disclose the voting results within four business days after the Annual Meeting.

Key Dates

Keywords

proxy statement, annual meeting, stockholders, board of directors, election of directors, auditor ratification, share issuance, equity incentive plan, preferred stock, WithumSmith+Brown, Local Bounti