Releases Details

ORLANDO, Fla., Nov. 14, 2022 (GLOBE NEWSWIRE) --  Kalera Public Limited Company (Nasdaq: KAL, “Kalera” or the “Company”), a vertical farming company, today reported its financial results for the third quarter ended September 30, 2022.

“Although our balance sheet is challenged, we are meeting or exceeding our goals on both the top and bottom lines,” said Jim Leighton, President and Chief Executive Officer of Kalera. “Revenue more than doubled compared to the third quarter of last year and increased sequentially over the second quarter of this year, driven by growing customer relationships, higher volumes, improved product mix and increased sales velocity. In addition, our operational metrics are seeing sustainable progress as we consistently hit yield targets and improve capacity utilization. These metrics are key drivers in achieving our #1 priority of cash flow break-even in our U.S. farms by the end of fiscal 2023.”

Third Quarter Financial Overview

• Total revenue of $1.7 million, an increase of $0.9 million from $0.8 million reported in the third quarter last year, and an increase of $0.4 million from the second quarter of this year:
  • Foodservice revenue of $0.9 million, a year-over-year increase of $0.4 million, and an increase of $0.1 million from the second quarter of this year.
  • Retail revenue of $0.8 million, a year-over-year increase of $0.4 million, and an increase of $0.3 million from the second quarter of this year.
• Net loss of $1.1 million, or a loss of $0.05 per basic and diluted share, included a $19.8 million change in fair value for the contingent value earnout and warrants, and a $2.3 million one-time non-cash expense for a Property, Plant and Equipment impairment.
• Adjusted EBITDA of negative $14.0 million.

Adjusted EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below.

Third Quarter Operational Highlights

• Capacity Utilization increased to 24% from 11% in the third quarter of 2021.
• Third-quarter yields met or exceeded targets in all US Farms.

Third Quarter 2022 Consolidated Financial Review
Total revenue for the third quarter of 2022 was $1.7 million, an increase of $0.9 million, from $0.8 million reported in the third quarter last year and an increase of $0.4 million over the second quarter of this year. The revenue increase was reflective of the new farming facilities opened over the past 12 months.  
                                                                                                                 
Selling, general and administrative (SG&A) expenses were $10.8 million, compared with $7.4 million in the third quarter last year. The increase in SG&A expense was primarily related to the opening of new farms and expenses from Kalera GmbH, Kuwait and Singapore that were not included in the third quarter of 2021.

Gross operating loss for the third quarter was $20.7 million, compared to a loss of $11.1 million for the same period last year. The gross operating loss included a one-time non-cash expense of $2.3 million for a property, plant and equipment impairment, a $3.4 million increase in SG&A expense, and an increase of $2.7 million in Depreciation and Amortization for new operational farms.

Net loss for the third quarter was $1.1 million, or a loss of $0.05 per basic and diluted share, compared to a net loss of $11.6 million, or a loss of $0.76 per basic and diluted share for the same period last year and a net loss of $78.6 million or a loss of $3.92 per basic and diluted share in the second quarter of this year.

Adjusted EBITDA was negative $14.0 million, compared to Adjusted EBITDA of negative $8.0 million for the same period last year and negative $14.1 million in the second quarter of this year.

Balance Sheet and Liquidity
The Company’s cash balance as of September 30, 2022, was $2.3 million. During and subsequent to the third quarter, the Company took important steps to increase its liquidity and strengthen its balance sheet.

On October 31, Kalera raised $8.84 million (before fees and expenses) through its public offering of an aggregate of 68,000,000 units at a public offering price of $0.13 per unit.

On October 18, the Company announced its plans to divest its subsidiary, Vindara and the assets of its international business. The Company expects these divestitures will address the strategy to bring its farms to cash flow positive much faster than anticipated while reducing capital requirements for all Kalera holdings.

Outlook
As a market leader in vertical farming – an industry expected to grow to $19 billion in five years^* – Kalera is uniquely positioned to capitalize on significant growth opportunities. We will do this by optimizing our high-tech production capacity for sustainable lettuce, microgreens and herbs in the United States and internationally and by building out our capabilities. We plan to expand in select markets and communities that do not have accessibility to local and fresh produce, allowing us to capture an increased share of the broader U.S. lettuce and microgreens categories. We believe our growth will be supported by several key macro and micro drivers including: (1) the growing mainstream acceptance of our products, (2) heightened consumer awareness of the role food and nutrition play in long-term health and wellness, (3) growing awareness of the beneficial impact that vertical farming has on the environment relative to traditional agriculture and (4) increasing concern regarding food security on a global scale. Looking ahead, we will balance growth with disciplined capital deployment to create long-term value for our shareholders.

^*According to Global Market Insights

Note Regarding Non-GAAP Financial Measures
EBITDA and Adjusted EBITDA are not financial measures presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial condition and results of operations. Net loss is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures has important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measures. You should not consider EBITDA or Adjusted EBITDA in isolation or as substitutes for analysis of our results as reported under GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Conference Call and Webcast
Kalera will host a conference call on November 15 at 8:00 am ET/6:00 am PT to discuss its financial results. The conference call may be accessed by dialing 1-844-889-4333 (domestic) or 1-412-317-5477 (international). A live audio webcast of the call also will be available on the Investor Relations section of Kalera’s website at Events & Presentations | Kalera Public Limited Company and will be archived for replay.

About Kalera
As a leader in controlled environmental agriculture, Kalera is driven by our belief that vertical farming can play an important role in securing access to fresh produce for a growing world population facing climate change and concerns about the future of traditional farming. Through our proprietary technology, we sustainably grow local, delicious, nutrient-rich, pesticide-free, non-GMO leafy greens year-round. Our automated, data-driven, hydroponic vertical farms produce higher yields and, use 95% less water, and 99% less land than traditional farming. Sold under the Kalera brand, our leafy greens are “better than organic” and priced competitively, always with the end consumer in mind. Kalera is headquartered in Orlando, Florida with operating farms in Orlando, Florida; Atlanta, Georgia; Houston, Texas; Denver, Colorado; and Kuwait, with additional farms under development. More information is available at www.kalera.com.

Safe Harbor Statement
This press release contains statements that may 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”), that involve substantial risks and uncertainties. All statements contained in this Quarterly Report other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believes,” “expects,” “intends,” “estimates,” “projects,” “anticipates,” “will,” “plan,” “design,” “may,” “should,” or similar language are intended to identify forward-looking statements.

It is routine for our internal projections and expectations to change throughout the year, and any forward-looking statements based upon these projections or expectations may change prior to the end of the next quarter or year. Readers of this Quarterly Report are cautioned not to place undue reliance on any such forward-looking statements. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements. Risks and uncertainties are identified under “Risk Factors” in Item 1A herein and in our other filings with the Securities and Exchange Commission (the “SEC”). The impact of COVID-19 and its variants may also exacerbate these risks, any of which could have a material effect on us. All forward-looking statements included herein are made only as of the date hereof. Unless otherwise required by law, we do not undertake, and specifically disclaim, any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise after the date of such statement.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes, and our audited consolidated financial statements and related notes for the year ended December 31, 2021, included in our registration statement on Form S-4 (File No. 333-264422). As used in this section, unless the context suggests otherwise, “we,” “us,” “our,” “Company,” “Kalera” refer to Kalera Public Limited Company, Inc. and its consolidated subsidiaries.

Financial Profiles, Inc.

KaleraIR@finprofiles.com

310-622-8256

KALERA PUBLIC LTD CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

	Unaudited September 30, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$                      2,309		$                    16,146
Trade receivables, net	703		795
Inventory	1,280		1,190
Prepaid expenses and other current assets	2,808		2,960
Total current assets	7,100		21,091
Property, plant, and equipment, net	144,624		128,162
Operating lease right-of-use assets	54,019		55,276
Goodwill	—		68,421
Intangible assets, net	59,692		72,371
Equity method investment	1,432		1,322
Other non-current assets	3,575		3,353
Total assets	$                  270,442		$                  349,996
Liabilities and shareholders’ equity
Current liabilities:
Accounts payable	$                    13,648		$                    10,421
Financing obligation	297		—
Operating lease liabilities	2,638		1,618
Accrued salaries and wages	528		717
Accrued expenses	1,535		1,964
Total current liabilities	18,646		14,720
Debt	25,321		662
Convertible debt	14,495		—
Non-current operating lease liabilities	56,420		57,717
Non-current financing obligation	7,125		—
Deferred underwriting fees and grants	5,349		—
Earn-out and warrant liabilities	2,860		—
Deferred tax liability	6,673		8,447
Asset retirement obligations	1,655		1,527
Total liabilities	138,544		83,073
Commitments and contingencies (Note 19)
Shareholders' equity:
Common stock, $.0001 par, 72,400,000 authorized, 23,877,828 and 18,946,567 issued & outstanding as of September 30, 2022 and December 31, 2021, respectively	2		2
Additional paid in capital	306,756		331,074
Accumulated other comprehensive loss	(16,202)		(1,547)
Accumulated deficit	(158,658)		(62,606)
Total shareholders' equity	131,898		266,923
Total liabilities and shareholders' equity	$                  270,442		$                  349,996

THE ACCOMPANYING NOTES ARE IN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

KALERA PUBLIC LTD CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
 COMPREHENSIVE LOSS
(UNAUDITED)
(In thousands, except per share amounts)

	Unaudited Three Months Ended September 30,				Unaudited Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales	$    1,674		$        801		$    4,440		$    1,629
Cost of goods sold (exclusive of depreciation and amortization shown separately below)	(5,873)		(2,063)		(17,152)		(4,708)
Selling, general, and administrative expenses (inclusive of research and development costs)	(10,766)		(7,432)		(45,778)		(17,666)
Depreciation and amortization	(3,517)		(772)		(9,033)		(1,547)
Impairment loss	(2,252)		(1,610)		(66,504)		(1,610)
Operating loss	(20,734)		(11,076)		(134,027)		(23,902)
Interest (expense) income, net	(677)		(138)		(1,494)		28
Change in fair value of earn-out and warrant liabilities	19,777		—		37,027		—
Other income (expense)	95		(364)		742		(284)
Loss from operations before income tax	(1,539)		(11,578)		(97,752)		(24,158)
Income tax benefit	485		—		1,773		—
Loss before equity in net loss of affiliate	(1,054)		(11,578)		(95,979)		(24,158)
Equity in net loss of affiliate	25		—		73		—
Net loss	(1,079)		(11,578)		(96,052)		(24,158)
Currency translation adjustments	(4,134)		—		(14,655)		—
Total comprehensive loss	$  (5,213)		$  (11,578)		$(110,707)		$  (24,158)
Net loss per share - basic and diluted	$    (0.05)		$      (0.76)		$      (4.64)		$      (1.60)
Weighted average common shares outstanding – basic and diluted	23,688		15,282		20,686		15,129

THE ACCOMPANYING NOTES ARE IN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

KALERA PUBLIC LTD CO. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands, except share data)

	Nine Months Ended September 30,
	2022		2021
Cash flows - operating activities
Net loss	$  (96,052)		$  (24,158)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	9,033		1,547
Amortization of debt issuance costs and discounts	16		—
Non-cash lease expense - operating lease	2,277		2,274
Non-cash interest expense	495		—
Share-based compensation expense	9,337		1,599
Deferred income tax benefit	(1,773)		—
Equity in net loss of affiliate	73		—
Change in fair value of earn-out and warrant liabilities	(37,027)		—
Impairment loss	66,504		1,610
Changes in assets and liabilities:
Inventory	(90)		(588)
Prepaid expenses and other current assets	152		(669)
Trade receivables	92		(175)
Other non-current assets	(222)		(601)
Account payables and accrued expenses	2,833		9,903
Other non-current liabilities	(5,039)		(1,083)
Net cash used in operating activities	(49,391)		(10,341)
Cash flows - investing activities
Purchases of property, plant, and equipment	(23,411)		(59,961)
Deposit for acquisition	—		(35,924)
Payment for acquisition, net of cash acquired	—		(14,213)
Net cash used in investing activities	(23,411)		(110,098)
Cash flows - financing activities
Net proceeds from issuance of common stock	9,526		30,632
Proceeds from government grant	1,906		—
Proceeds from issuance of convertible debt	14,000		—
Proceeds from sale of property, plant and equipment for failed sale-leaseback	8,080		—
Proceeds from loan facility	25,500		32,615
Debt issuance costs	(352)		—
Payments on finance lease liabilities	(1,267)		—
Net cash provided by financing activities	57,393		63,247
Net decrease in cash and cash equivalents	(15,409)		(57,192)
Cash and cash equivalents at beginning of period	16,146		113,353
Effect of exchange rate changes on cash and cash equivalents	1,572		—
Cash and cash equivalents at end of period	$      2,309		$     56,161
Non-cash activities:
Fixed assets purchases in accounts payable	3,350		—
Right-of-use assets obtained in exchange for new finance lease liabilities	7,423		—
Right-of-use assets obtained in exchange for new operating lease liabilities	(237)		44,180
Exercise of pre-funded warrants	390		—
Supplemental cash flow information:
Cash paid for interest	706		28

THE ACCOMPANYING NOTES ARE IN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

KALERA PUBLIC LTD CO. AND SUBSIDIARIES
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
(UNAUDITED)
(in thousands, except per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2022		2021		2022		2021
Net loss for the period	$(1,079)		$(11,578)		$(96,052)		$(24,158)
Interest expense	677		138		1,494		(28)
Income tax benefit	(485)		—		(1,773)		—
Depreciation and amortization	3,517		772		9,033		1,547
EBITDA	2,630		(10,668)		(87,298)		(22,639)
Loss on equity method investment	25		—		73		—
Impairment loss	2,252		1,610		66,504		1,610
Change in fair value of earn-out and warrant liabilities	(19,777)		—		(37,027)		—
Other expense	(95)		364		(742)		284
Share-based compensation expense	540		597		9,337		1,599
One time accounting, consulting, and legal fees	419		79		7,952		232
Adjusted EBITDA	$(14,006)		$(8,018)		$(41,201)		$(18,914)

Source: Kalera Inc.