LOCL - NYSE

Good afternoon and welcome to the Local Bounti's First Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask a question. Please also note today's event is being recorded. At this time, I'd like to turn the conference over to Jeff Sonnek, Investor Relations for ICR. Please go ahead.

Thank you, and good afternoon. Today's presentation will be hosted by Local Bounti's Co - CEOs, Craig M. Hurlbert and Travis Joyner. President Brian Cook, and Chief Financial Officer, Kathleen Valiasek. The comments made during today's call contain forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts are considered forward-looking statements. These statements are based on management's current expectations and beliefs, as well as a number of assumptions concerning future events. Such forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from the results discussed in the forward-looking statements. Some of these risks and uncertainties are identified and discussed in the company's filings with the SEC. We'll refer to certain non-GAAP financial measures today, please refer to the press release which can be found on the Investor Relations website, investors.localBounti.com for reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures. With that, I'd now like to turn the call over to Craig M. Hurlbert, co-CEO.

Thank you, Jeff and good afternoon, everyone. Since we last spoke with you in mid-March, we closed our acquisition of Pete's and have been busy integrating the team into our business. And as a reminder, for those new to the Local Bounti story, we acquired Pete's in early April. This was a very important transformational and accretive transaction for us in many, many respects, from a distribution perspective, Pete's springs a national footprint and existing relationships with retailers covering some 10,000 doors. The opportunity that this creates for our entire business can't be overstated. The relationships with customers and the demand that they are generating is informing our build-out strategy, and we expect it to accelerate Local Bounti's brand-building and market access on a national level. In terms of operations, the transaction enhanced our set of capabilities and de -risked our near-term execution. Our ability to taps Pete's wealth of knowledge and experience in growing techniques is invaluable as we embark on our own continuous improvement of Local Bounti's growing systems and contemplate new designs that are enabled by our patent pending Stack and Flow Technology. And of course, the financial considerations, the transaction brought with it a degree of scale that we otherwise would've had to build from scratch, consuming precious time, including our Georgia facility, which is nearing completion and is expected to come online in July. We will have three commercial facilities in production, not including our Montana facility, which was temporarily refocused on research and development activities in support of Pete's acquisition and other commercial facility plans. As we look ahead to the balance of the year, we expect commercial production at the Montana Facility to ramp up significantly in support of our pent-up customer demand in the Pacific Northwest. Upon the Georgia facility reaching full production, we expect to be generating run rate sales of at least $30 million on an annualized basis, producing positive gross margins and driving hard toward our goal of reaching break even cash flow in the near-term. Financial leadership and capital efficiency remained at the forefront of the Local Bounti strategy. With that, I'll pass it over to Brian.

Thanks, Craig. Over the past month, we had been on the road meeting with customers, sharing the wonderful benefits of our combined enterprise. And most importantly, reinforcing our commitment to quality and service across our network. Our conversations have been very productive and is reinforcing our build-out strategy so that we could be one of the key players to meet the demand presence in the marketplace for high-quality, controlled environment agricultural produce. We expect to create immense efficiency for our operations as we execute the commissioning of the Georgia facility and begin the process of ramping up production. We have been working hard to put the staffing in place to ensure a smooth ramp up and are excited to get to work. Our customer interactions are also enhancing our visibility to the build-out of our next facility. While we're still in the planning stages, we have several key regions and focus that have strong customer overlap and who are demonstrating strong demand for our brands and products. As soon as we are able, we look forward to sharing a result of this work and our plans for the next phase of growth. With respect to our Greenfield build-out in Pascoe Washington, I'm pleased to share that construction activities have recommenced after a brief hiatus. As we noted during our last conference call, we have been working on a design to account for the learning from both Local Bounti and piece operations to ensure that facility is optimized in every sense. Whether that be operational design or CapEx. Again, as Travis loves to say, we do the math and this dovetailed back to our ongoing quest for capital efficiency and maximizing returns on capital. We continue to see an opportunity to drive significant value creation with our united front. Pete's growth has been constrained for years and with Local Bounti's balance sheet and access to public capital Markets, our combined organization is energized to put our growth plan into motion. Customer response has been very positive, which is a wonderful endorsement of the trust we've built the value of both brands and the strategy that we will employ to capitalize on the exciting opportunity that lies ahead. I'll pass it back to Craig for his additional remarks.

Capital efficiency continues to be at the forefront of our strategy. We intend to be direct with the deployment of capital towards revenue-generating activities. This is visible in our buy versus build approach with Pete's, which brought what will be three facilities into our production network, cemented our presence in the west coast market with its two California locations, and we'll add improved bi-coastal service to customers via the pending Georgia facility. The accelerated nature of our footprint growth is plain to see, but the quality of our team is invaluable, which is an element that has had increasing value in today's tight labor market. As we look ahead, we expect buy versus build to continue to be a key consideration for us, and we believe we are uniquely able to leverage the strategy on an opportunistic basis given the advantages inherent in our flexible Stack and Flow technology. Stack and Flow provides the ability to unlock 1.5-2 times yield improvement compared to a traditional greenhouse operation. This is highly disruptive and highly differentiated, and why we are so excited about opportunities that lie ahead as we continue to execute on our plan to be the leader in CEA, simply put, our technology strategy gives us an advantage to make a direct iterative improvement on existing infrastructure in a capital efficient manner, which we expect will ultimately drive higher Return on Investment while minimizing required capital. This was foundational to our rationale for the Pete's transaction and the integration strategy that is underway. We expect to implement Stack and Flow into existing operations with minimal disruption to production levels and continuing to build capacity around the operations to enhance throughput and drive higher unit level returns. With that, I'll pass the call to Travis for a few additional remarks.

Thanks, Greg. Integrating Stack and Flow with our existing facilities is one of our highest priorities, and the testing and optimization of those systems as an area that we're keenly focused on at our Montana facility. In fact, we nearly doubled the rate of annual crop turns for our commercial head lettuce since last year, and we made some exciting advancements in our commercial loose-leaf lettuce as well. As of March 31, 2022, we generated approximately 26 crop turns annually, which compares to approximately 17 to 22 turns annually as of December 31, 2021. To put it into context in both instances, this performance already exceeds our long-term assumptions that we previously reported. We also have been hard at work translating our innovations into a robust IP portfolio across process improvements, genetics, computer Vision, AI, and controls, which will protect our investment in position the business for long-term growth. I mentioned all of this is a window into the importance of Stack and Flow to our long-term strategy to drive additional capacity at the lowest possible cost, thereby optimizing our unit level economics, which will enable value creation for our shareholders. We believe there's an immense amount of facility capacity that can be improved upon, and we intend to do just that. In summary, the integration of Pete's is progressing nicely. There is an incredible amount of learnings happening across the organization, and I'm pleased with how our cultures are coming together. We have an amazing opportunity ahead of us within the CEA landscape. And we're focused on capitalizing on it quickly. As we move our business ahead in the coming quarters and years, we expect to continue demonstrating wise strategy and sound capital allocation all geared toward our goal of establishing a formidable CEA leader with a corresponding financial profile that investors can have confidence in over the long term. Now I'll turn the call to Kathy for her review of the financials.

Thank you, Travis. And good afternoon, everyone. As previously announced, the company closed this acquisition of Pete's on April 4th for $122.5 million creating a scaled CEA operator with a national distribution footprint that reaches approximately 10,000 retail doors. I'll cover our first-quarter 2022 results briefly, which represents Local Bounti on a standalone basis prior to the transaction and reflects the performance of our Montana facilities, which was temporarily geared towards innovation and R&D activities, while we were closing the Pete's transaction. As Craig mentioned, we expect commercial production asset facility who ramp up significantly in support of pent-up demand from Pete's customers in the Pacific Northwest. First quarter 2022, sales were 282,000 as compared to 57,000 in the prior-year period. Just FYI, Pete's standalone sales for the first quarter were $5.9 million. Local Bounti gross profit was 48,000, representing a gross margin of 17%. Excluding depreciation, to make an apples-to-apples comparison to our long-term projections that we provided during the deep star process. Adjusted gross margin was approximately 39%, which was consistent with the prior-year period. Our results reflect a temporary increase in R&D at our Montana facility associated with the development of additional and crops cycle yield improvements. This is a critical element of our strategy behind the Pete's acquisition and other commercial facility plans, including the pending opening of the new Georgia facility. Looking ahead to the second quarter and beyond, our Montana facility is shifting back towards commercial production and so we expect improved revenue margin performance at that facility. Net loss was $25.8 million in the first quarter 2022, and includes approximately $3.9 million of expenses associated with the Pete's acquisition, as well as $11 million in stock-based comp, $1.6 million in interest expense, and $0.5 million of depreciation. Adjusting for these and other discrete items, adjusted EBITDA loss was $8.5 million. We recently filed an 8-K with some historical Pete's figures, as well as some pro forma combined company financials for 2020 and 2021, including detail of the various adjustments to bring Pete's reporting in alignment with GAAP, included within is an adjusted EBITDA reconciliation. I'd like to call a couple of select metrics and articulate some influences on those results so you better appreciate what this business capable of achieving. The growth margin is the key KPI for both Pete's and Local Bounti. Local Bounti has been driving positive gross margin on our low revenue base and Pete's 2021 adjustment gross margin was 45%, which is in the range of our expectations and should provide a great base to expand from as we implement our margin enhancing Stack & Flow Technology. Further, we are just beginning to work through actions to capture the cost synergy opportunity, which we believe could approximate about 10% savings on Local Bounti's existing cost of goods sold from raw materials and packaging in the first full year of operations. We are working hard to ensure we get our organizations aligned to extract these synergies. The other key KPI is adjusted EBITDA margins. What you see with the Pete's performance in 2020 and 2021 is a more subdued margin performance because of the temporary impact with COVID-related factors. Over the long-term in the pre -pandemic era, Pete's was a consistent 20% adjusted EBITDA margin generator. From the capital structure perspective, our balance sheet as of March 31st, 2022, reflects the standalone Local Bounti business. The end of the quarter with cash, cash equivalents, and restricted cash of $76.4 million, as previously disclosed, in April we utilized a combination of $92.5 million in depth through our cargo facility and $30 million of equity to finance the acquisition of Pete's. So we had an 86.5 million shares outstanding as of March 31st, 2022. And on a pro forma basis, including the consideration for the Pete's transaction our warrants and our restricted stock units outstanding. We have a fully-diluted share pound of approximately 115 million shares. As we look ahead to the full year 2022, we are really excited about the scale that Pete's provides to our business. We are equally excited to begin the implementation of our Stack and Flow Technology into Pete's facilities over 2022 and 2023. We are reaffirming our 2022 revenue guidance of at least $20 million, which includes three quarters of contribution from Pete's. Additionally, we continue to expect to achieve initial run rate revenue from the three Pete's facilities of at least $30 million at full production, excluding the expected future positive impact from implementing our Stack and Flow Technology across these facilities. We look forward to continuing to update you on our progress as we execute on the achievement of milestones and identify new opportunities to drive growth in this exciting CEA marketplace. That concludes our prepared remarks, Operator, please open the call for questions.

Thank you. We will now be conducting a question-and-answer session. A confirmation will indicate your line is in the question queue. For participants using speaker equipment, enabling being heard, pick up your headset before pressing the star key. Please ask one question and a follow up question, and then re-queue for additional questions. One moment, please, while we pause for questions. Thank you. Our first question comes from Colin Rusch with Oppenheimer. Please, proceed with your question.

Hi, good afternoon. This is Kristen on for Colin, thank you for taking our questions. I was wondering if we could start first with a little bit of color around the focus of the R&D efforts going on at the Hamilton facility. What are the levers specifically that you're looking at to drive those incremental turns and the results that you've shared with us?

Great, Kristen. This is Craig M. Hurlbert. Thanks so much for your question, and give our regards to Colin, please. Travis, why don't you take the first cut of that, please?

Yeah, absolutely. Thanks for the question, Kristen and Colin. o specifically as it relates to R&D efforts, we're using, I think, a combination of enhancements to the core Stack and Flow system. And then as well investing in controls and computer Vision, AI. And really, as we started to have line of sight on the Pete's transaction in the first quarter, we decided to really broaden and expand our near-term R&D at Hamilton to solve for increased in specific SKU demand from Pete's customers in California and Georgia. So remember that Pete's, they're really the head lettuce kings, if you will, of CEA, lots of market share. They're in lots of doors, and they have lots of skews. And so specifically, Pete's living butter lettuce, really, where we're focused, one of the things we're focused on in the first quarter is, applying our Stack and Flow Technology and innovating around that technology to pull the crop cycle down and increase the turns that we could get out of our facility on a per annum basis. And what that resulted in is, through our R&D efforts, we're able to cut the crops cycle by seven days. So pick up roughly four turns per year, 17.3 turns per year in total. So as Georgia comes online, we'll be scaling down our Hamilton R&D and increasing commercial production. But the main areas of innovation that we're focused on are core Stack and Flow patents, as well as controls, computer Vision, increasing the number of recipes, etc.

That's really helpful. Thank you for that, Travis. And then as my follow-up wanted to ask about just sort of the cycle times with customers. You talked about the change in the tone of your conversation with customers since the Pete's acquisition. Obviously, your ability to demonstrate the favorable unit economics in this space is something that we can see, but I'm wondering how that's contributing to the nature of the conversation that you're having with customers and any sort of commentary that you can offer around co-location opportunities? I'll leave it there. Thank you.

Kristen what a great question, I guess series of questions. Brian, do you want to take that one, please?

Yes. Thank you for the question Kristen. When you think about the overall sales life cycle, when someone comes new to the market, the one thing that you have an appreciation for really quick is how relational our market is. And so it generally takes a -- it can take a solid year plus for a new company to start selling in any kind of significant numbers within our produce arena. The one beauty about this combined effort is that we already had access to 10,000 doors and through that just long-standing trusting relationships on new product launches. And so what it does is it really reduces the time-to-market not only for just having more capacity and being able to do more with current skews, but also adding additional skews that are in the pipeline.

Thanks, Brian.

I think that answered part of your question. Let me know if there's something I missed.

No. That's really helpful. I appreciate the color.

Thank you.

Our next question comes from Chris Barnes with Deutsche Bank. Please, proceed with your question.

Hey, good afternoon, and thanks for the question. I guess I just -- to start, I appreciate all the color around the progress on the Georgia facility update, but I was just hoping you could comment on the integration of Stack and Flow and to the other Pete's facilities out in California. Has that process started yet or has much of the time right now been focused on commissioning and ramping up Warner Robbins? And then relatedly, could you share any details around the implementation and integration costs for each of the three facilities? Thanks.

Thank you, Chris, appreciate the question. Again, I'll ask Travis to comment on the integration of the Stack and Flow Technology in California specifically. Travis?

Yes. So as I said, Pete's has a lot of doors and a number of successful SKUs. Those California facilities, however, are very focused on their core product, including butter lettuce. So a lot of the integration and R&D efforts that we did in Montana this year were really centered around specifically reducing the crop cycle at the existing Pete's facilities in California and in Georgia, and the result that I highlighted as it relates to head lettuce which is one of their core products will be directly applicable to the California facility. So really what we're trying to do is in our growth systems right now are get reps to prepare us to do the full technology integration in both California and Georgia so that when we turn those systems on its plug-and-play.

Got it. That's helpful. And then as my follow-up, I just wanted to just dig a little bit more into the $30 million per year run-rate that you guys are looking to achieve, excluding Stack and Flow. Is there any timeline around that that you think that you could achieve these goals, is that 2023 potential or is that really out in medium-term? And then, maybe you could you share what Stack and Flow would add to that because it seems like the crops around you, you'd be able to drive after implementing Stack and Flow, $30 million seems very conservative, so just any color you can share there would be great. Thanks.

Hey, Chris, this is Craig. I love that question, and it's very -- it's a great question and very intuitive. Kathy, I'm going to ask you to chime in on that, and then we can maybe follow-up with Brian and Travis. Kathy, go ahead.

Yes. Sure. The $30 million run rate is that full production for each of the facilities. So -- obviously excluding Stack and Flow. Stack and Flow will improve the yield 40%, which is obviously very significant, but the $30 million run rate is -- would start in Q1, 2023.

In other words, the $30 million run rate is operating the horizontal assets without the benefit of the Stack phase. So when the Stack phase gets activated in 2023, that's when you'll see that incremental bump.

Great, that's very helpful. Thanks, guys.

Thank you, Chris. Appreciate the question.

Our next question comes from Ben Klieve with Lake Street Capital Markets. Please, go ahead.

Thanks for taking my questions. First question is around Pete's and a follow-up to what you were just addressing. First of all, I guess congratulations on getting this closed as quickly as you did. I wish the rest of my coverage could announce the closure of an acquisition so soon after the announcement. So congratulations there. But my first question is around the expected revenue contributions here, because with the $20 million revenue guidance on the year and $6 million of Pete's revenue in the first quarter, it would seem to be that not much is expected to be contributed from the Georgia facility when Phase 1-A is complete this summer. So can you talk about Georgia contribution specifically in the back half of this year, please.

Yea, great. Hey, Ben, nice to hear your voice again. Why don't we have a combination of Brian and Kathy answer that. Maybe Kathy start, and Brian, you can top it off.

I -- and great to hear your voice, Ben. What we're trying to do, Ben, is just be conservative, right? We do say in the release that the facility -- the Georgia facility Phase 1-A will be operational in July of this year. And we anticipate that it's going to do very, very well. We're just trying to be conservative with the 20.

Okay. All right. Fair enough. And then my --

Let's have Brian comment. Sorry, let's have, Brian --

Oh, I'm sorry.

comments that he'd like to add.

Yeah. No, I think that fact was what Kathy is mentioning, we were conservative on the number, but there's also the inherent ramp that goes along with it that you want to be sensitive to. So we're strong on that $20 million number. So we're -- and we're hoping to see some significant upside to that.

Hey, Ben, it's Craig. One question -- or one comment. This whole industry has been plagued with what I would call over committing and under delivering. And we talk about financial leadership, and one of the things we want to really emerge over time is that you can count on what we're telling you, that we will move heaven and earth to deliver on that. And I understand your question, it's really good. And obviously, if you just do the math, it looks like we're a little light there, but there's a lot of moving parts. You did comment on the integration moving very quickly. I don't want that, but -- I don't want that to go without saying, we have an amazing team involved in that transaction led by Kathy Valiasek and Brian on his side, and Bill their CFO. And I would say I haven't been involved in many of these transactions. One of the folks at Pete's said it was like a zipper coming together, that we were almost meant to be together, kind of like a zipper zipping it up and that's what's played out, and it's allowed us to go down three layers. The integration has gone incredibly smoothly, couldn't be more pleased with where we are, and really has just helped really risk so many different facets of the business. I'll stop there.

Got it. And that's helpful from each of you on. And congratulations, and I'll look forward to seeing the fully integrated business here in coming quarters. And my -- so my second question is around your legacy efforts and the Pascoe facility. Great to hear the construction there has begun again, but you've given that you discussed a re-design of the facility and paused construction for a bit. I'm wondering if you can update us on expectations today for size and total revenue contributions from the redesign facility. And then also give us an update on the expected timing for that facility to be completed.

Great question, Ben. Maybe, Travis, you start on that one. Okay?

Yeah. I'll just comment and say that the facility, and I've touched on this point again, Pete's had a very robust and diverse, not only customer based, but also SKU count. And so, really, the Pascoe facility is being redesigned to account for the demand side of the SKU mix that's desired by Pete's customers. So some tweaks to the selection and mix of our gross systems as a result, and really all around solving for capital efficiency. So we're still chipping away at the design. And I think, next quarter, we should have a more wholesome updated to the timeline, estimated completion, and revenue add on a go-forward basis.

That's a great answer, Travis, and I think that you can look forward to that next quarter.

Okay. We'll stay tuned, then. Very good. Thanks for taking my questions, and I'll get back in queue.

Thanks, Ben, we appreciate you.

Our next question comes from Brian Wright with ROTH Capital Partners. Please proceed with your question.

Hey. Thanks. Good afternoon, and thanks for the questions. Wanted to get a little bit of more clarification on what consist of Phase 1-A and Phase 1B, maybe in terms of square footage. Number one, for each, and number two, is it also a function of Phase 1 is the traditional high-tech greenhouse and then Phase 2 is the Stack and Flow, or is there multiple dynamics to this. Wanted to understand that?

Hey, thanks, Brian, appreciate the question. It is multiple, and I'll let Brian tackle that question.

Hey, Brian. So Phase 1A is 130,000 square feet of actual production square footage, and that's in our channel system. Phase 1B is an additional 130,000 square foot as part of 1-A of the head house work that was required was done part of the original design. So Phase B becomes just a bolt-on as far as needs requirements from the head house. So there's no additional square footage required on the head house side.

Okay. And then I understand the 30 we talked about and I was kind of going through my notes and I apologize if I haven't asked this before but when everything is kind of fully ramped up, what is the full capacity revenue of the Georgia facility?

Kathy, do you want to take that? I'm not sure we're giving that guidance, but Kathy, go ahead.

Yes, Brian, thanks for the question, and great to hear your voice. We have not gotten that specific on the Georgia facility, we've just not gotten that specific. Maybe we can give an update on the next call, but so far we just haven't got that specific.

Okay. If I could just follow-up on that, and that's totally understandable. Can you just remind us what the California facility sizes are for Pete’s?

Hey, Brian.

No, definitely. So the Carpentaria facility is 16 acres, and the Oxnard facility is 13 acres, and it's important to note that the Georgia facility has the same system as a newer retrofit that we did in part of our Oxnard facility which is about a little over an acre. And so that's been producing for about a year-and-a-half now. To just give -- I don't want you to make the leap between what that little three acres in Georgia does to the 29 acres that we're doing in California because it's an apples-to-oranges comparison.

Okay. Thank you.

Brian, anything else?

That will do it for now.

Thank you, Brian. I appreciate the questions.

Thank you.

This last question comes from Pamela Kaufman with Morgan Stanley. Please proceed with your question.

Hi. Good afternoon. This is about for Pam. I just wanted to touch space on the company's long-term facility expansion plans. So going back to in Investor Day, the company initially provided a facility outlook projected having around eight operational facilities in 2025, and this was prior to Pete's acquisition. So now that the company gained two facilities in California and soon you'll have another operational facility in Georgia. What are the current projections of facilities through '25? And then related to that, can you discuss the strategic priorities considered when it comes to timing of breaking ground for new facility and then also determining the location of that facility?

Great questions, . Thank you so much. And I appreciate the questions. I guess maybe I'll take a start at this and then others can add in. I think with the acquisition of Pete's, what's happened is we're now in 10,000 doors. We're now in conversations with people that just kind of accelerated the conversations we were having prior. And as a result of that, we're really looking at the customer conversation backwards to where we're going to locate facilities. And there's some very hardy conversations there in the works around where we should be placing facilities. So while Local Bounti pre -Pete's had a plan in place, Local Bounti with Pete's will be developing that plan over time, customer backwards. And I think we can all agree there's a lot of change going on in the world right now. And I think supply chain, many customers are looking to back-solve for having quality product, and also guaranteed supply, a higher-risk of supply. So we're in a lot of very interesting conversations. And that plan will develop overtime, and we will be announcing, each quarter, what we're thinking upon as it relates to that. I'll stop there. Travis, maybe you can add in on top of that.

I think you pretty well handled that. Kathy, I don't know if you wanted to give any specific guidance around 2025 though.

Yes. I think what we've said in a public forum is that we're comfortable with the numbers as we had set forth last year in terms of the financial metrics. In other words, we're going to get there, we're probably just going to get there in a different way. Right now we're -- as Craig alluded, we're not counting facilities, we're counting, hey -- talking to the customer and then making sure that we fulfill all of their needs. And we're also spending quite a bit of time also considering build versus buy consideration.

Sorry, I interrupted you. Go ahead.

No problem, thank you. That's helpful for the color. And then just as a follow-up question regarding capital allocation, you mentioned how you assess the Return on Investment capital when it comes to Greenfield opportunities where there's buying and retrofitting Stack and Flow technology. So I guess on that basis, do you see more room for M&A as the company continues to scale, and at what point might you be ready to consider another transaction?

Right. Great question. A really good question, I get important question. I think you have to start answering that question by understanding what's happening at the ground level inside the industry of controlled environment agriculture, CEA. And that is, is it's a very cluttered and space today. There's a lot of smaller players, most of which may be considered undercapitalized. And I believe that consolidation we talked about this ever since we started is inevitable, and I think us and Pete's combining has us emerging as if not the leader of the very few leaders in the space. And I think what's going to happen is there's going to be more of this that plays out over time. But it will be as we like to say, we will do the math and we will do the geography, and we will listen to our customers, we'll stay focused on delivering delicious products. And I think with all of that said, we will be making great decisions from a position of strength. Which is really where I believe we sit today inside of the industry. So yes, I hesitate to give you a timeline, but I would say that is a possibility over the pro forma period.

Great. Thank you so much.

Thank you for the question.

Ladies and gentlemen, at this time, I'm showing no further questions. I'd like to end the Q&A session, turn the conference call back over to management for closing remarks.

Well, we certainly on behalf of all 250 employees at Local Bounti, we would certainly like to thank everyone for their time today, your interest in the company. Please reach out to us directly and I will put this offer out there as well, we would love to have you come to our facility and see with your own two eyes what we're doing and how we're doing it, I think it will really help all of your question gel. On behalf of all of us, thank you so much for your time and your attention today. Everybody have a great day.