Good day, and welcome to the Kalera AS first quarter 2022 financial results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note, today's event is being recorded. I would now like to turn the conference over to Eric Berge, Investor Relations. Please go ahead.
Good morning, everyone, and welcome to Kalera's first quarter 2022 earnings conference call. For today's call, we have a presentation deck that was posted to Kalera's website this morning. You should be aware that certain statements made during today's conference call, which may include management's current outlook, viewpoint, predictions, and projections regarding Kalera and its operations, may be considered forward-looking statements. I caution you that as any prediction or projection, there are a number of factors that can cause Kalera's actual results to differ materially from those projections. Management has taken into account known risks and that management believes could materially affect the results. However, there are many other risks that cannot be anticipated. After the presentation, the chat will open for questions. I'd now like to turn the call over to former CEO and chair-elect, Curtis McWilliams.
Thank you, Eric, and good morning, everyone. Today, joining me on the earnings presentation call are Austin Martin, our Chief Operating Officer, Fernando Cornejo, our Chief Financial Officer, and Henner Schwarz, our Chief Commercial Officer. We'll be going through a presentation where I'll be providing some highlights as well as referencing some recent announcements we've made. Henner will follow with a overview of the commercial highlights for the quarter and some upcoming opportunities that we're foreseeing. Fernando will follow with the financial highlights for the quarter, and it'll be followed up by Austin will be talking about operations. I will then come back and provide an update on the SPAC transaction and a brief summary of where we are, and then we'll be opening it up for question and answer.
At the time of question and answer, we'll be joined not only by this group, but by other members of the senior management team to address any questions that you may have. With that, let me start by looking at slide three, where very brief overview. Sales for the first quarter of 2022 were at $1.5 million, which was a record for our quarter, 20% higher than what we achieved in the fourth quarter of last year, and over 300% higher than where we were a year ago.
Probably the most significant news than the one that I'm sure many of you are most excited about was our announcement yesterday of our strategic partnership with US Foods, whereby in this agreement, we will be allocating up to 50% of the production capacity in the United States to serve US Foods and their customers. This is a very important agreement for Kalera and for US Foods as we partner together to serve their marketplace with leafy greens. We do expect that the revenues from this agreement will be at a minimum of $100 million over the next five years, and we are very much looking forward to the opportunity to serve them.
In addition, other developments on the marketing side is we have done an extensive rebranding, which hopefully you have seen, and you'll see even more of that, in the coming months and weeks. Our product portfolio has increased as we are developing additional SKUs to serve our customers, really being driven by customer demand who are requesting both loose leaf and salad mix categories. From an operational standpoint, our financial performance for the first quarter was EBITDA loss of $10 and a half million, slightly more than the $9.3 million we recorded in the fourth quarter, which was primarily driven by the new facilities that we are developing and opening to ensure that we have the revenue growth needed to serve our customer base in the months and years ahead.
Our yields continue to be exceedingly strong in Houston, Orlando, well above our targets of 80% throughput. Our Atlanta yields as a farm overall are slightly lower as we've moved that farm to begin the production of the loose leaf products to support our clients, but the underlying yields in Atlanta remain on target. Vindara, which as you know is the seed breeding business that we acquired a little over a year ago, is beginning to make significant contributions to Kalera's overall business.
In Denver, during the quarter, we began our first trials of a new romaine seed, which has resulted in a growing cycle being accelerated from 45 days to have a commercially viable product to 36 days to having a commercially viable product, or a 20% improvement in cycle time, which in turn would yield to a 20% yield improvement out of any given farm. This is really exciting news. That was only 18 trials that were done to date. We still have over 100 more seeds that we're in trials, and we hope that that number will even get better in the days ahead. We are in the process of completing upgrades on our large scale facilities to accommodate the loose leaf and baby leaf products.
As you know, we opened Denver in April, and our first harvest was in May, and the orders have been very strong, especially with our Kroger client, as they serve the King Soopers market in Denver. With respect to the Agrico merger, as you know, on January thirtieth, we announced the merger of Agrico with Kalera, which will enable the company to move from Oslo to the NASDAQ markets in the U.S. You'll recall that Agrico was a company that specifically focused on ag tech businesses, and we are extremely excited to be able to partner with them as we move forward. More recently, the Securities and Exchange Commission has declared our registration statement, which is the joint proxy between Kalera and Agrico effective, and really, there are no more regulatory hurdles to our moving towards a shareholder vote and closing of this transaction.
To ensure that the closing happens and that there's no concern by any shareholders about any closing conditions being met, the company did announce that we are waiving the $100 million minimum cash condition for the closing of the transaction. With a number of the financings that we have been able to undertake since the announcement of the Agrico merger, and with some work that Fernando and the team are doing with some potential new financings, we are quite comfortable that we will have the necessary capital needed to move forward with our business strategies. Obviously, even though we are waiving the minimum cash condition, the sponsor callback will remain in effect. The merger now is expected to close at the end of this quarter, with our shareholder vote being on June twenty-seventh.
With respect to financing strategies, we have begun to really move forward with our capital light strategy. As you know, we announced in January the sale and leaseback of our St. Paul facility for a total of $8.1 million. Later in the first quarter, we also announced that we had entered into a convertible loan facility, which would provide up to $20 million in capital to the company, with $10 million already having been committed and funded. In April, following right shortly after the quarter, Kalera announced that we'd entered into a credit agreement with Farm Credit of Central Florida, which will be providing up to $30 million in CapEx and general corporate financing for the company.
I'll allow Fernando to talk more, but he is continuing to work on additional financing alternatives, including up to a $50 million financing facility through the export credit facilities. Now, it's with great pleasure that I also highlight the fact that last week we announced the appointment of Jim Leighton as our new President and Chief Executive Officer for Kalera. Jim comes with a deep background in leading public companies in the food space. His focus on operational excellence is exactly what this company needs as it moves forward. We are thrilled that Jim has joined us, and we expect you're gonna be seeing much more from him in the days ahead. With that, I'll turn it over to Henner Schwarz, who will talk further about the US Foods strategic partnership. Henner.
Curtis, thank you very much. Yes, we shared the big news yesterday. Kalera enters into a strategic partnership with US Foods. Both partners foresee that the agreement will lead to a minimum of $100 million in sales over the next five years. It will affect all of Kalera's farms in the U.S., with the exception of Hawaii, and cover a broad product portfolio within the leafy greens category. We are very excited about this strategic partnership as we value US Foods very highly as a customer already. With more than 69 distribution centers throughout the country and over 80 cash-and-carry stores, US Foods is one of the largest foodservice distributors in the country. Their sales force comprises around 3,000 associates that will now help accelerating the sales of Kalera produce. Furthermore, US Foods operates a large and powerful e-commerce platform.
For Kalera, the partnership with US Foods is a strong proof of our business model. It represents an opportunity to allocate up to 50% of our United States production capacity. We're looking forward to accelerating our business with US Foods drastically now, as great food brands typically start in food service. For US Foods, the partnership allows them to serve their customers with much fresher, local living lettuce. As Josh Waters, Senior Vice President of Produce Category Management for US Foods put it, "The agreement with Kalera will fundamentally change the manner in which vertically farmed products are made available to restaurants and other food service operators across the footprint." In order to maximize the opportunity, Kalera will gradually increase the product portfolio to cover the full leafy greens category. This includes whole heads, loose leaves, microgreens, herbs, as well as mixes.
Leveraging our industry-leading technology stack, we can draw from lots of domestic and international experience in growing these crops already. As part of the agreement, Kalera and our wholly owned seed technology business, Vindara, will also work closely with US Foods to develop and launch new products to US Foods customers across the country. Next to US Foods, we have another big announcement. It's the Kalera brand relaunch that has happened last April. Last April, we launched the new brand identity, including a new logo and entirely new look and feel. The new concept is based on thorough customer research. The key visuals on this page, as well as the snapshots from our Instagram page, show you where we're heading.
While we stay true to our core values, vision, and mission, we have sharpened Kalera's purpose, and we'll make it much more tangible and approachable within our entirely new brand appearance. Moving on to the next chart. You see that we are now ready for a third wave of farming. After the industrialized production of greens and greenhouses, and then the organic production of greens, we are now at the brink of yet another revolution. Farming leafy greens in fully enclosed vertical systems, highly automated, up to 75 feet high and grown locally nearby our customers. This gives our customers the cleanest possible greens, fresher, with more nutrients and a much better environmental footprint. The new look and feel of the Kalera brand that you see on the next chart features a clean and minimalistic design. It is stylish, meets the zeitgeist, and works globally.
The next step will be the release of our new packaging, which will be released on June 1st, 2022. With that, over to our CFO, Fernando Cornejo.
Thank you, Henner. We're pleased that Kalera once again achieved record sales for the quarter ended March 31st, 2022. Revenue increased to $1.5 million or over 336% higher versus Q1 2021 and 20% versus last quarter. This increase was driven by growth in sales at both retail and food services, and mainly from whole head products. Going forward, as new farms come online that can produce a variety of products, including loose leaf, cut leaf, herbs, and microgreens, we expect the product mix to change. As for expenses, wages, our single largest expense, increased to close to $6 million versus $2 million for the same period last year.
This increase was driven by the inclusion of a full quarter of wages for the Endeavour GmbH, a newly leased JV employees that joined Kalera during Q4 2021, and pre-opening expenses for the Denver farm that will have its first harvest this month, and pre-opening expenses for other farms that are scheduled to open during the second half of 2022. During Q1 2021, Kalera owned and operated one farm in Orlando. Today, we have operating farms in Orlando, Houston, Atlanta, and Denver. As a result, in Q1 2022, other expenses, of which the vast majority are farm-related expenses, were up from $1.6 million in Q1 2021 to $5.5 million in Q1 2022. Other expenses also include one-time non-recurring expenses related to the Agrico merger, the Luxembourg merger, and CEO recruitment expenses.
Interest expense and financing costs of $1.4 million for this quarter mainly included expenses related to our leases. Kalera closed on over $50 million of financing year-to-date to subsequently increase our financial liquidity. More details will be provided later. For all the reasons above, Kalera adjusted EBITDA for Q1 2022 was negative $10.2 million, compared to negative $3.6 million during Q1 2021. Regarding the balance sheet, our property, plant, and equipment increased to $133 million from $128 million during the end of 2021, predominantly due to construction expenses in new farms. Additionally, Denver began operation during Q2 this year in April. During year-to-date, we made efforts to increase our financial liquidity. During the first quarter, the company executed a sell and leaseback transaction that raised over $8 million.
This resulted in an increase of long-term lease liabilities from $59 million to $66 million at the end of March. In addition, during the first quarter of 2022, the company entered into a convertible bridge financing facility for up to $20 million, with $10 million currently outstanding. This accounted for the majority of the increase in current liabilities. It is important to note that during Q2 2022, Kalera, Inc. entered into a credit agreement with Farm Credit of Central Florida for $30 million that will be reflected on our Q2 2022 balance sheet. The company also anticipates completing the Agrico merger during the second quarter of 2022 that will provide additional liquidity to support the company's ongoing operations.
Going forward, the company is currently in discussions for a second sell and lease back transaction with a third-party lender and additional equipment financing structures that should bring up to $50 million for future capital expenditures during Q3 2022. Regarding cash flows during the quarter, cash used in operating activities was $13.5 million during Q1 2022, compared to cash used in operating activities during Q1 2021 of $2.1 million. The use of cash was mainly driven by operations at the Orlando, Atlanta, Houston, Denver, and Kuwait farms. Recall in Q1 last year, Kalera was only operating the Orlando farm and Kalera's US headquarters.
Cash used in investing activities during Q1 2022 decreased to $7 million versus close to $30 million in Q1 of last year. Q1 2022 investments were in Denver, Seattle, St.Paul, and Singapore farms, compared to $29.6 million that was invested in the Houston, Atlanta, and Denver farms during Q1 2021. As previously discussed, cash raised from financing activities for Q1 2022 was close to $10 million versus $29 million during the same period last year. The $10 million drawn on the convertible facility during the quarter accounted for the majority of the increase compared to $29.3 million during Q1 last year that was mostly raised via private placement to finance the Vindara acquisition. As a result of the many liquidity raises during the past few months, the amount of cash raised from financing activities is expected to grow significantly for Q2 2022.
As a result, cash and cash equivalents at the end of Q1 2022 was $5.5 million, compared to almost $111 million at the end of Q1 2021. With this, I hand over to our COO, Austin Martin.
Thank you, Fernando. As Curtis mentioned early in the highlights, we continue to make great progress on all fronts and operational initiatives. Our throughput yields continue to improve. Our recently opened farm in Houston continues to meet or exceed expectations compared to its original commissioning schedule. Farm throughputs continue to stabilize above 80%. Our construction pipeline, building out one of the strongest indoor vertical farming networks, not only in the U.S. but across the globe, continues to deliver on a broad product portfolio to match our customers' demands.
In addition, we plan to not only impact our newest farms and our farms of the future with a broad portfolio of products, leveraging best-in-class technology and automation to deliver those products, but also work to upgrade current farms and farms currently under construction with some of the latest technology that Kalera continued to develop, not only to meet product portfolios, but to leverage efficiencies in our operations day-to-day. Some of those upgrades are taking place in St. Paul as we speak, as we reposition that farm with these upgrades to best meet our key strategic partnership demands. As we look towards Seattle opening at the end of this quarter, while later than initially planned, is really to make sure that we have solid demand in place before we move forward with the commissioning of that facility.
Singapore continues to make great progress in spite of COVID-related supply chain delays that have only been exacerbated by the recent events in the last quarter. We continued by making great progress on the construction of that farm in the first half and continue and expect to continue with that construction all through the second half of this year with an expected opening date prior to the close of this year. Hawaii continue to be delayed as we develop that sales pipeline.
Our farms of the future in Columbus, while not expected to have an opening in the first half of 2023, are expected to continue on track with a 2023 opening, but more towards the latter part of the year. We've made great progress, and we'll continue to leverage this technology to not only enhance our product portfolio, but enhance the operations of our business to discover efficiencies and leverage those efficiencies. We also plan for leveraging of semi-automation in our current U.S. farms, as well as the ones under construction that we believe are going to help us continue delivering on our mission and vision as we meet our customers' demands here in the U.S. With that, I'll turn it back to Curtis.
Thank you, Austin. I thought it was important for us to just take a second and reflect back on all that has happened since the start of the year. To put this in perspective, we signed the business combination agreement at the very end of January with Agrico and announced that. Subsequent to that time, we've obviously raised capital through the secured convertible bridge facility, through the farm credit loan agreement. We have opened Denver, and we've now announced both Jim Leighton as our new CEO, and we've announced the US Foods transaction. All these things have been key building blocks for this company. The last key building block is clearly the move from Oslo to NASDAQ, which is being allowed through the merger with Agrico.
We were very pleased to announce at the end of last week that our registration statement was declared effective on Friday, May 13th. Immediately, our proxies have begun to be mailed out to our shareholders for the EGM, which is now scheduled for June 27th . The record date for shareholders for Kalera is gonna be June 6th. The vote will happen on June 27th, and we will close shortly thereafter. The pathway is quite clear now towards the move from Oslo to NASDAQ, and really there is nothing in the way to make this a reality. We're excited about this opportunity and look forward to it here in the next five-six weeks. In closing, let me just summarize all the things that have happened in the last few weeks and months for Kalera. We've announced a new president and CEO.
We've announced a key strategic partnership with US Foods, which could generate more than $100 million in sales for this company domestically over the next five years. Our operations are continued to be fine-tuned, and our yields continue to grow, both through operating excellence as well as through the Vindara seed technology. We've launched a new brand and packaging, which will be disclosed at the end of this month. We are now quite certain that the SPAC will be closed at the end of the quarter. All good news for Kalera shareholders, and we're pleased to be able to make these reports. With that, I will wrap it up, and we'll now open it up for Q&A by those who are on the call. Thank you very much.
Ladies and gentlemen.
While you're submitting your-
Oops, sorry. I was gonna say, as a reminder, please enter your questions through the webcast if you have any. Thank you.
While people are submitting their questions, we have received a number of questions regarding the US Foods agreement. I thought I would just take a few minutes to address those while you get the rest of your questions in the queue. US Foods is obviously strategically very important for Kalera. First and foremost, I do believe it validates the business strategy that Kalera has pursued over the last two years. This agreement, this partnership with US Foods would not have occurred unless we had done the following building blocks. One was our aggressive growth in placing farms strategically across the United States. With the farms in Orlando, Atlanta, Houston, Denver, and with farms ready to be opened in St. Paul, Seattle, next year in Columbus, we alone have the ability as a vertical farming company to serve a national footprint. No one else has that.
It has come at a cost, and we've seen that in our our capital expenses and our operating expenses over the last two years. It has allowed us to be in a position where now we stand ready to serve US Foods, and we stand ready to serve other major national chains who are looking for someone who can provide that kind of local national footprint. Secondly, last year, we acquired Vindara. Vindara was a key element in the decision of US Foods to work with Kalera. Vindara allows us to be able to develop specialty products in the vertical farming environment, which can be proprietary products for US Foods and our other customers, whether it be a product that has different texture qualities. Different taste characteristics.
These are the kinds of things that innovative major consumers of leafy greens are looking for, and Kalera and Kalera alone has the ability to deliver that to our customer base. US Foods, who is known for their innovation, recognize that. Thirdly, as you know, we acquired Endeavour in Germany in the fourth quarter of last year. Yes, it does give us some great technological advances. It also gives us farms with an international footprint in Kuwait and Singapore. More especially, Endeavour also brought to us additional product lines within the leafy greens category, such that Kalera now is the only vertical farming company that can deliver the full panoply of products to customers from whole head, Teen Leaf, baby leaf, cut leaf, salad mixes, microgreens, and herbs.
This is unique, and again, allows for a major consumer of leafy greens, whether it be food service, restaurant chain, or retailer, to go to one company to get all of those products. All these things have come together to allow us to do this strategic partnership with US Foods. What does it mean for us? First and foremost, obviously it means with their commitment to take a significant part of our production capacity in the U.S., which will be built up over time, and which is we've established specific milestones that they need to achieve this year, next year, and 2024. Thereafter, we will negotiate and build new milestones for on an annual basis for years 2025 and beyond.
This will obviously improve our sales ramp up, which has been a frustration for us, and I know a frustration for many investors. You will see a significant improvement in sales ramp up from US Foods alone. You should also understand that you're gonna see a significant sales ramp up from Kalera as a result of the fact that where our strategy before was a production-driven strategy to create production capabilities across the United States to now a customer-driven strategy, where we're gonna be building farms, opening farms based on customer input as to what they need, the products they need, the volumes they need, and for new farms which have not been identified yet, will also where those farms will be located, which will be closest to their distribution centers.
All these things will allow for significant improvement in customer ramp up, as we have demand-driven farms as opposed to production-driven farms. We are very excited about the prospects for US Foods, and we do think it has enormous impact for Kalera and for the way this company is positioned, not only with US Foods, but with many others in the years ahead. I hope that gives some additional insights into the US Foods. The next question is regarding CapEx for the remainder of 2022, and maybe Fernando, you'd like to take that question.
According to our existing capital expenditures program, we have a plan during the second half of 2022 to invest $50.9 million for deploying and opening new farms. We are pleased with some of the results as we announced back in 2021, that Kalera was pursuing many different strategies to finance, not just operating expenses or capital expenditures moving forward. Now we can say that we were successful on what we announced back in December as number one, we were able to execute on our sell and lease back of the St. Paul facility. Secondly, we executed on a convertible loan of up to $20 million, and especially we were discussing agriculture related funds and programs that basically brought close to $30 million to Kalera during the past couple of months.
As we move forward and also as part of this plan, we continue to execute on equipment financing and leasing programs, which we believe will bring about $50 million in equipment financing that will be available to Kalera in the end of Q2, beginning of Q3 this year.
Thank you, Fernando. The next question actually goes back to US Foods and asks when the agreement will be effective. The agreement is effective immediately. In fact, we've been working with US Foods pretty much the entire year already in preparing for this rollout. We've begun distributing product to them that will ramp up significantly now with the announcement of this agreement with their various regional operations. I should also note that on the Vindara side, we're hearing that they were hearing from some people that they cannot hear us. Is that. No, I'll keep going. I'm hoping that.
This is the operator. You're coming through loud and clear here, sir.
Okay, thank you so much. On the Vindara side, we've actually already begun working with them on a number of new product innovations that we hope to be delivering to them in the months ahead as opposed to the years ahead. The impact will be significant and it is immediate. The next question relates to the amount of cash that is gonna be in the SPAC trust at the time of the closing merger? The answer is we don't know. It will be highly dependent on what people's views are of the prospects of the merger and where the stock will trade post-merger. Obviously, the higher our stock price grows, the more likely that less cash will be redeemed or more shares will be.
Less shares will be redeemed, more cash will remain in the trust. If our stock continues to linger lower, then it'll be likely that more shares will be redeemed, less cash will be in the trust, which of course will mean that our shareholders will own a higher and higher percentage of the company because of those redemptions. The only thing we do know for certain is that the sponsor has committed that he will not be redeeming his shares, so we know those will stay in. Beyond that, we, you know, it will be our guess.
Shareholders of Agrico need to make a decision about their redemption and whether they're gonna redeem their shares on June 23rd, which is two business days prior to the EGM that Agrico will be holding for the merger. We'll have a better clarity at that point, but probably not much until then. I hope that helps. The next question comes on the upcoming projects. Is it in Kalera's pipeline to focus to expand in areas where there's currently a drought like Nevada, California, or is it too expensive to enter there? And perhaps internationally in places like Spain. Maybe I'll turn that over to Austin. Austin, do you wanna address that from a farm standpoint? Maybe Henner can address it from a commercial standpoint.
I think from a network optimization point of view, we're continually evaluating where our next locations go. Obviously, from the point of, you know, areas where there's environmental impacts that benefit Kalera's future business, it would be on our list to look at those areas. Important to go back to is what Curtis mentioned. As we think about how we expand in the future, it really is about aligning with customer relationships and making sure that we have a solid demand pipeline for sales for any new production facility to look at, whether that be in the US or globally. Yes, we will continue to look and evaluate those areas, but under the condition that we are developing our sales pipelines in advance of that.
Henner, would you like to talk about it, especially with respect to international?
Yes, absolutely. As discussed previously, we have a very clear mechanism to prioritize our pipeline, driven by market attractiveness and our ability to win. We see and continue to see, and nothing has changed in those rollout plans, very attractive opportunities around the globe. When you look at the map in the U.S., yes, in the Southwest and Northeast, there are still white spots today, and we are looking at multiple locations there. Also internationally, I think we discussed previously that in particular in the Middle East, as well as in Southeast Asia, we see very attractive opportunities just because the input parameters that make the market attractive, low electricity cost and high selling prices for leafy greens, look quite good there.
Furthermore, on the ability to win side, given our strong footprint that we have in both regions already, we see ourselves in a very good position to expand in the Middle East as well as in Southeast Asia.
Thank you, Henner. I would note again, I'd re-emphasize what Austin and Henner both said, which is, as we look at opportunities, again, our decisions are gonna be really based very much on consumer customer demand. Where we see customers who are willing in the international markets, where they're willing to give us offtake agreements or in the U.S. markets where we have a clear understanding with our major customers that they're gonna take specific products and identify what those products are, identify the volumes, and we'll construct the facility accordingly. Clearly, where food security is becoming a greater and greater issue both in the United States and internationally, and food safety is becoming a greater issue both in the U.S. and internationally.
The vertical farming methods with our clean room technology and our ability to deliver locally is making us uniquely positioned and attractive for these customers, and it will certainly drive everything we're doing to date. With that, it appears that we don't have any more questions. At this point, we'll call this earnings call to a close. If any of you have additional questions that you would like to address with us directly, I believe you know how to reach either Fernando or myself. Please feel free to reach out to us directly, and we'll try to address them accordingly. Again, we thank you for your time. We thank you for your continued support of Kalera, and we look forward to continuing this dialogue with you. Have a good day.
Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.