Introduction |
6 Months Ended |
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Jun. 28, 2025 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Introduction | Introduction The Company Beyond Meat, Inc., a Delaware corporation (including its subsidiaries unless the context otherwise requires, the “Company”), is a leading plant-based meat company offering a portfolio of revolutionary plant-based meats. The Company builds meat directly from plants, an innovation that enables consumers to experience the taste, texture and other sensory attributes of popular animal-based meat products while enjoying the nutritional and environmental benefits of eating the Company’s plant-based meat products. The Company’s brand promise, “Eat What You Love,” represents a strong belief that there is a better way to feed our future and that the positive choices we all make, no matter how small, can have a great impact on our personal health and the health of our planet. By shifting from animal-based meat to plant-based meat, we can positively impact four growing global issues: human health, climate change, constraints on natural resources and animal welfare. Global Operations Review and Reductions in Force In 2023, to reduce operating expenses, the Company initiated a review of its global operations (the “Global Operations Review”), narrowing the Company’s commercial focus to certain anticipated growth opportunities, and accelerating activities that prioritize gross margin expansion and cash generation. As part of this review, on November 1, 2023, the Company’s board of directors (the “Board”) approved a plan to reduce the Company’s workforce by approximately 65 employees, representing approximately 19% of the Company’s global non-production workforce (or approximately 8% of the Company’s total global workforce). On February 24, 2025, the Board approved a plan to reduce the Company’s workforce in North America and the EU by approximately 44 employees, representing approximately 17% of the Company’s global non-production workforce (or approximately 6% of the Company’s total global workforce). In addition, as part of the Company’s Global Operations Review, on February 24, 2025, the Board approved a plan to suspend the Company’s operational activities in China, which substantially ceased as of the end of the second quarter of 2025. As part of this plan, the Company reduced its workforce in China by approximately 20 employees, representing approximately 95% of the Company’s China workforce (or approximately 3% of the Company’s total global workforce). Subsequent to the period ended June 28, 2025, on August 6, 2025, management of the Company approved a plan to reduce the Company’s current workforce in North America by approximately 44 employees, representing approximately 6% of the Company’s total global workforce. This decision was based on cost-reduction initiatives intended to reduce cost of goods sold and operating expenses. See Note 14. Loan and Security Agreement; Warrant Agreement On May 7, 2025, the Company, as borrower, entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Unprocessed Foods, LLC, an affiliate of the Ahimsa Foundation, as lender (“Unprocessed Foods”), the other lenders party thereto from time to time (together with Unprocessed Foods, the “Lenders”), and certain of the Company’s subsidiaries party thereto from time to time, as guarantors (together with the Company, the “Loan Parties”), pursuant to which the Lenders agreed to provide for a senior secured delayed draw term loan facility (the “Delayed Draw Term Loan Facility” and the loans thereunder, the “Delayed Draw Term Loans”) in an aggregate principal amount of $100.0 million. Certain of the Company’s subsidiaries have guaranteed the Company’s obligations under the Loan and Security Agreement. The Delayed Draw Term Loans are secured by a first-priority lien and security interest in substantially all of the assets, subject to certain exceptions, of the Company and certain of its subsidiaries. On June 26, 2025, at the Company’s request, Unprocessed Foods, as the sole Lender at such time, made a Delayed Draw Term Loan to the Company in the principal amount of $40.0 million. The Company plans to use the proceeds of such Delayed Draw Term Loan for general corporate purposes of the Company and the guarantors. See Note 6. On May 7, 2025, in connection with the entry into the Loan and Security Agreement, the Company and the Lenders entered into a warrant agreement (the “Warrant Agreement”) setting forth the rights and obligations of the Company and the Lenders as holders (in such capacity, the “Holders”) in connection with warrants (the “Warrants”) representing such Holders’ right to purchase up to, in the aggregate, 9,558,635 shares of the Company’s common stock, which represented 12.5% of the Company’s issued and outstanding shares of common stock as of May 5, 2025) (the “Maximum Warrant Share Amount”) at an exercise price calculated as 115% of the average daily volume-weighted average prices of the common stock for the 30-day period beginning on May 8, 2025, subject to a minimum exercise price of $2.00 and a maximum exercise price of $3.75. The Loan and Security Agreement provides that at each funding date of any Delayed Draw Term Loans, the Company will execute and deliver to the applicable Lenders Warrants representing the pro rata portion of the Maximum Warrant Share Amount based on the amount of Delayed Draw Term Loans provided by such Lender on the date thereof. See Note 6. On June 26, 2025, in connection with the Delayed Draw Term Loan made on the same date, the Company issued to Unprocessed Foods, Warrants to purchase 3,823,454 shares of common stock with an exercise price of $3.26 per share, fair value per share of $2.088 and an aggregate fair value of approximately $8.0 million. See Note 2 and Note 6. The Company concluded it was reasonably certain to draw the remaining $60.0 million available under the Delayed Draw Term Loan before December 31, 2025, and expects to issue to the Lenders warrants to purchase the remaining 5,735,181 unissued shares of common stock pursuant to the Loan and Security Agreement. The fair value of the contingently issuable warrants measured as of June 28, 2025 using a Monte-Carlo valuation model was $12.1 million. The Company has recorded $20.1 million in liability for the total fair value of the issued and contingently issuable warrants in Delayed draw term loan warrants in its condensed consolidated balance sheet at June 28, 2025. See Note 6. Partial Lease Termination and Sublease On May 9, 2025, the Company entered into the Second Amendment to Lease (the “Second Amendment”) with HC Hornet Way, LLC, a Delaware limited liability company (the “Landlord”), amending that certain Lease dated January 14, 2021 (the “Original Lease”), as amended by that certain First Amendment to Lease dated September 17, 2024 (the “First Amendment” and, together with the Original Lease, and as further amended by that certain Third Amendment to Lease dated as of July 16, 2025 (the “Third Amendment”), the “Campus Lease”), pursuant to which the Company leased approximately 282,000 rentable square feet in a portion of a building at 888 Douglas Street, El Segundo, California. The Second Amendment provided for, among other things, the surrender by the Company to the Landlord of approximately 61,556 rentable square feet of the existing premises (the “Surrendered Premises”), a release of all claims arising out of, or based upon, any act, matter, or thing regarding the Surrendered Premises, and the continued leasing of approximately 220,519 rentable square feet of the existing premises. See Note 3. Subsequent to the period ended June 28, 2025, effective as of July 22, 2025, the Company entered into a Sublease Agreement (the “Varda Sublease”) with Varda Space Industries, Inc., a Delaware corporation (the “Subtenant”), pursuant to which the Company will sublease to the Subtenant approximately 54,749 rentable square feet of the existing premises at the Campus Headquarters. See Note 14.
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