Quarterly report pursuant to Section 13 or 15(d)


9 Months Ended
Sep. 30, 2022
Business Combination and Asset Acquisition [Abstract]  
Acquisitions Acquisitions
Business Combination
On April 4, 2022, the Company acquired 100% of the shares of Pete’s. The purchase price consideration for the acquisition was $92.5 million in cash (subject to customary adjustments) and 5,654,600 shares of Local Bounti common stock, which had an original consideration, at the time of signing, of $30.0 million and a fair value of $50.9 million as of the closing date of the Pete's Acquisition. The acquisition has been accounted for as a business combination. The Company acquired Pete’s in order to leverage Pete's operational scale and retail distribution footprint to create a leading, scaled CEA operator with a national distribution footprint and access to approximately 10,000 retail doors.
Acquisition related costs of $204 thousand and $4,449 thousand were included in selling, general and administrative expense in the Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022, respectively.
The purchase consideration was preliminary allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date, with the excess recorded to goodwill as shown below. Goodwill is primarily attributable to the assembled workforce and expanded market opportunities and was allocated to the Company's single reporting unit. The goodwill is deductible for tax purposes over 15 years and a 338(h)(10) election was filed to step up the tax basis of the assets acquired to fair value.
The preliminary allocation is as follows (in thousands):
Intangible assets $ 52,300
Goodwill 38,476
Assets acquired 56,454
Liabilities assumed (3,776)
Total fair value of net assets acquired: $ 143,454
The measurement period for the valuation of assets acquired and liabilities assumed ends as soon as information on the facts and circumstances that existed as of the acquisition date becomes available, but does not exceed twelve months. The purchase price allocation is subject to future adjustments related to income taxes or other contingencies.
The following table sets forth the fair value of the identifiable intangible assets acquired as of the date of the acquisition (in thousands):
Customer relationships $ 40,200
Trade name 7,400
Non-compete agreements 4,700
Total: $ 52,300
The useful life of the customer relationships, trade name, and non-compete agreements are approximately 16 years, seven years, and 18 months, respectively. Amortization expense of intangible assets was $1,256 thousand and $3,352 thousand for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2022, future amortization expense is expected to be as follows (in thousands):

Remainder of 2022 $ 1,676
2023 5,920
2024 3,570
2025 3,570
2026 3,570
Thereafter 30,643
Total $ 48,949
Pro forma financial information
The following unaudited pro forma results of operations have been prepared as though the business combination of Local Bounti and Pete's was completed on January 1, 2021. Pro forma amounts are based on the preliminary purchase price allocation of the acquisition and are not necessarily indicative of results that may be reported in the future. Non-recurring pro forma adjustments including acquisition-related costs directly attributable to the acquisition are included within the reported pro forma revenue and net loss.

Three Months Ended September 30, Nine Months Ended
September 30,
  2022 2021 2022 2021
(in thousands) (in thousands)
Sales $ 6,285  $ 6,010  $ 18,767  $ 17,423 
Net loss $ (27,104) $ (15,847) $ (85,424) $ (53,272)
Asset Acquisition
On April 4, 2022, in connection with consummating the Pete's Acquisition, Pete’s acquired the properties previously being leased by Pete’s from STORE Master Funding XVIII, LLC ("STORE") pursuant to certain sale-leaseback agreements between Pete’s and STORE for an aggregate cash purchase price of $25.8 million (the "Property Acquisition").
The Company accounted for the properties as an asset acquisition as substantially all of the fair value of the acquisition is concentrated in a single asset or group of similar identifiable assets.
The following table sets forth the fair value of the identifiable assets acquired as of the date of the acquisition (in thousands):
Land $ 13,800
Construction-in-progress 12,013
Total: $ 25,813