DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Description of Business:

Kalera Public Ltd Co. (“Kalera” or the “Company”) is the holding company of the Kalera group, originally formed in 2010. Together with its subsidiaries, Kalera is a leading vertical farming company. The Company utilizes proprietary technology and plant and seed science to sustainably grow local, delicious, nutrient-rich, pesticide-free, non-GMO leafy greens year-round for the retail and food service markets.

At September 30, 2022, the Company has five (5) large scale operating hydroponic farms (“farms” or “production facilities”) within Colorado, Florida, Georgia, Texas and Kuwait. The Company is building new farms in several locations, including Washington, Minnesota and Singapore.

The Company is organized as a single operating segment. Substantially all of the assets and operations of the Company are located in the United States (“U.S.”).

Business Combination:

On June 28, 2022, (the “Closing Date”), Kalera SA (f/k/a Kalera AS) consummated a previously announced business combination (the “Business Combination”) pursuant to the business combination agreement and plan of reorganization (the “Business Combination Agreement”) dated January 30, 2022, by and among: (i) Agrico Acquisition Corp., a Cayman Islands exempted company (together with its successors, “Agrico”), (ii) the Company (f/k/a/ Figgreen Limited, an Irish private limited company then renamed “Kalera Public Limited Company,” in connection with the Business Combination), (iii) Kalera Cayman Merger Sub, a Cayman Islands exempted company (“Cayman Merger Sub”), (iv) Kalera Luxembourg Merger Sub SARL (“Lux Merger Sub” and, together with Cayman Merger Sub, the “Merger Subs”) and (v) Kalera AS, a Norwegian private limited liability company.

The Merger Subs were formed solely as vehicles for consummating the Business Combination, and the Merger Subs were direct wholly owned subsidiaries of Kalera SA. As of the Closing Date, the Merger Subs ceased to have a separate legal existence and Kalera SA became a wholly owned subsidiary of Kalera. Shortly after the Closing Date, Agrico elected to be treated as a “disregarded entity” for U.S. federal income tax purposes, and started its process of liquidation. Pursuant to the Business Combination Agreement:

a.On June 27, 2022, Cayman Merger Sub merged with and into Agrico, with Agrico continuing as the surviving entity and as a wholly owned subsidiary of Kalera (the “First Merger”). Agrico issued Agrico Class A ordinary shares to Kalera (the “Agrico Share Issuance”), and, in each case as consideration for the First Merger and the Agrico Share Issuance:

i.Agrico shareholders received shares in the capital of Kalera, and

ii.the holders of Agrico Warrants (as defined below) had their Agrico Warrants assumed by Kalera and adjusted to become exercisable for shares in the capital of Kalera.

b. On the Closing Date, by way of a capital reduction (the “Kalera Capital Reduction”) pursuant to the Luxembourg Companies Act, and in each case as consideration for the ordinary shares of Kalera SA and the Kalera SA options being cancelled and ceasing to exist or being assumed (as applicable) upon completion of the Second Merger (as defined below):

i.Kalera SA shareholders (except Kalera) received shares in the capital of Kalera:

ii.The holders of in-the-money Kalera SA options received options in the capital of Kalera, (the “Kalera Options”) and

iii.Kalera SA options that were out-of-the money were cancelled.

c. Immediately following the Kalera Capital Reduction, on the Closing Date, Lux Merger Sub merged with and into Kalera SA, with Kalera SA as the surviving entity of the Second Merger. Kalera SA issued shares to Kalera.

“Agrico Warrants” means warrants entitling the holder thereof to purchase one Agrico ordinary share at a price of $11.50 per share, including certain warrants purchased by DJCAAC LLC and Maxim Group LLC in a private placement at the time of the Agrico IPO for a purchase price of $1.00 per warrant, each of which is exercisable for one ordinary share.

The Business Combination is accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with accounting principles generally accepted in the United States of America. Under this method of accounting, Agrico is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of the Company issuing stock for the net assets of Agrico, accompanied by a recapitalization. The net assets of Agrico are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of the Company.

Nature of Operations, Liquidity and Going Concern Considerations:

Since inception, the Company has financed its operations primarily through the sale of shares of common stock and debt financing. The Company incurred net losses during the nine months ended September 30, 2022 and 2021 of $(96,052) thousand and $(24,158) thousand, respectively, and has an accumulated deficit of $(158,658) thousand at September 30, 2022. The Company expects to continue to generate operating losses and consume significant cash resources for the foreseeable future. These operating losses and accumulated deficits raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date these unaudited condensed consolidated financial statements are issued, meaning that the Company may be unable to continue operations for the foreseeable future or realize assets and discharge liabilities in the ordinary course of operations. The Company’s continuation as a going concern is dependent upon its ability to obtain additional operating capital, complete development of new seeds and produce, and attain profitability. The Company has implemented and continues to implement plans to fund its operations and finance its future development activities and its working capital needs. However, substantial doubt about the Company’s ability to continue as a going concern still exists.

In the first quarter of 2022, the Company executed a sale-leaseback transaction that raised approximately $8,100 thousand. In addition, during the first quarter of 2022 the Company entered into a convertible bridge financing facility for up to $20,000 thousand with $10,000 thousand committed as of September 30, 2022. During the second quarter of 2022, the Company entered into a credit agreement with Farm Credit for $30,000 thousand with $20,000 thousand for capital expenditures and $10,000 thousand available for working capital (see Note 13).

In the third quarter of 2022, the Company entered into a securities purchase agreement with a single institutional investor to raise approximately $10,000 thousand through a private placement. Pursuant to the securities purchase agreement, the Company agreed to issue to a single institutional investor certain Kalera ordinary shares at par value of $.0001 per share, and certain pre-funded warrants, Series A Warrants and Series B Warrants (both terms as defined below), at a price of $4.00 per ordinary share (see Note 17). In addition, the Company amended its convertible debt to secure an additional $4,000 thousand and drew an additional $5,500 thousand on its existing Farm Credit Facility.

Furthermore, in October 2022, the Company entered into a placement agency agreement with a placement agent to raise approximately $8,840 thousand through a public offering. Pursuant to the placing agency agreement the Company agreed to issue certain units, consisting of Kalera ordinary shares with a par value of $0.0001, certain pre-funded warrants and Class A Warrants (as defined below), at a price of $0.13 per ordinary share (see Note 22).

If the Company continues to seek additional financing to fund its business activities in the future and there remains doubt about its ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding on commercially reasonable terms, or at all. If the Company is unable to raise the necessary funds when needed or other strategic objectives are not achieved, it may not be able to continue its operations, or it could be required to modify its operations, which could slow future growth.

The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and payments of liabilities in the ordinary course of business. Accordingly, the unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of and classification of liabilities that may result should the Company be unable to continue as a going concern.