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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 2, 2021
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to
                  
Commission File Number: 001-38879

https://cdn.kscope.io/b99d4452c80136da5a977e5b4b34bfb6-bynd-20211002_g1.jpg

BEYOND MEAT, INC.
(Exact name of registrant as specified in its charter)
Delaware
26-4087597
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
119 Standard Street
El Segundo, CA 90245
(Address, including zip code, of principal executive offices)

(866) 756-4112
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading
Symbol(s)
 Name of each exchange on which registered
Common Stock, $0.0001 par value BYND The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                                                Yes     No   
    
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes     No  
    
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                                 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                                                Yes     No  
As of November 11, 2021, the registrant had 63,330,838 shares of common stock, $0.0001 par value per share, outstanding.



TABLE OF CONTENTS
Page

i


Note Regarding Forward-Looking Statements
This report includes forward-looking statements within the meaning of the federal securities laws that involve risks and uncertainties concerning the business, products and financial results of Beyond Meat, Inc. (including its subsidiaries unless the context otherwise requires, “Beyond Meat,” “we,” “us,” “our” or the “Company”). We have based these forward-looking statements largely on our current opinions, expectations, beliefs, plans, objectives, assumptions and projections about future events and financial trends affecting the operating results and financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:
the effects of the COVID-19 pandemic on our business, financial condition and results of operations, including on our supply chain, the demand for our products, our product and channel mix, labor needs at the Company as well as in the supply chain and at customers, the timing and level of retail purchasing, our manufacturing facilities and operations, our inventory levels, our ability to expand and produce in new geographic markets or the timing of such expansion efforts, the pace and success of new product introductions, the timing of new foodservice launches, and on overall economic conditions and consumer confidence and spending levels;
the impact of uncertainty in our domestic and international supply chain, including labor shortages and disruption and shipping delays and disruption;
a resurgence of COVID-19 and the impact of variants of the virus that causes COVID-19, such as the Delta variant, which could slow, halt or reverse the reopening process, or result in the reinstatement of social distancing measures, business closures, restrictions on operations, quarantines and travel bans;
the impact of uncertainty as a result of doing business in China;
government or employer mandates requiring certain behaviors from employees due to COVID-19, including COVID-19 vaccine mandates, which could result in employee attrition at the Company, suppliers, and customers as well as difficulty securing future labor and supply needs;
the impact of adverse and uncertain economic and political conditions in the U.S. and international markets;
the volatility of capital markets and other macroeconomic factors;
our ability to effectively manage our growth;
our ability to identify and execute cost-down initiatives intended to achieve price parity with animal protein;
the success of operations conducted by joint ventures, such as The PLANeT Partnership, LLC with PepsiCo, Inc., where we share ownership and management of a company with one or more parties who may not have the same goals, strategies or priorities as we do and where we do not receive all of the financial benefit;
the effects of increased competition from our market competitors and new market entrants;
changes in the retail landscape, including the timing and level of trade and promotion discounts, our ability to grow market share and increase household penetration, repeat buying rates and purchase frequency, and our ability to maintain and increase sales velocity of our products;
the timing and success of distribution expansion and new product introductions in increasing revenues and market share;
the timing and success of strategic partnership launches and limited time offerings resulting in permanent menu items;
our estimates of the size of our market opportunities;
our ability to effectively expand our manufacturing and production capacity;
ii


our ability to accurately forecast demand for our products and manage our inventory, including the impact of customer orders ahead of holidays and shelf reset activities, and supply chain and labor disruptions;
our operational effectiveness and ability to fulfill orders in full and on time;
variations in product selling prices and costs, and the mix of products sold;
our ability to successfully enter new geographic markets, manage our international expansion and comply with any applicable laws and regulations including risks associated with doing business in foreign countries, substantial investments in our manufacturing operations in China and the Netherlands, and our ability to comply with the U.S. Foreign Corrupt Practices Act (“FCPA”) or other anti-corruption laws;
the effects of global outbreaks of pandemics or contagious diseases or fear of such outbreaks, such as COVID-19;
the success of our marketing initiatives and the ability to grow brand awareness, maintain, protect and enhance our brand, attract and retain new customers and grow our market share;
our ability to attract, maintain and effectively expand our relationships with key strategic foodservice partners;
our ability to attract and retain our suppliers, distributors, co-manufacturers and customers;
our ability to procure sufficient high-quality raw materials to manufacture our products;
the availability of pea and other protein that meets our standards;
our ability to diversify the protein sources used for our products;
our ability to differentiate and continuously create innovative products, respond to competitive innovation and achieve speed-to-market;
our ability to successfully execute our strategic initiatives;
the volatility associated with ingredient, packaging and other input costs;
the impact of inflation across the economy, including higher food, grocery, transportation and fuel costs;
real or perceived quality or health issues with our products or other issues that adversely affect our brand and reputation;
our ability to accurately predict consumer taste preferences, trends and demand and successfully innovate, introduce and commercialize new products and improve existing products, including in new geographic markets;
significant disruption in, or breach in security of our information technology systems and resultant interruptions in service and any related impact on our reputation;
management and key personnel changes, the attraction, training and retention of qualified employees and key personnel and our ability to maintain our company culture as we continue to grow;
the effects of natural or man-made catastrophic or severe weather events particularly involving our or any of our co-manufacturers’ manufacturing facilities or our suppliers’ facilities;
the impact of marketing campaigns aimed at generating negative publicity regarding our products, brand and the plant-based industry category;
the effectiveness of our internal controls;
our significant indebtedness and ability to repay such indebtedness;
risks related to our debt, including limitations on our cash flow from operations and our ability to satisfy our obligations under the convertible senior notes; our ability to raise the funds necessary to repurchase the convertible senior notes for cash, under certain circumstances, or to pay any cash amounts due upon conversion; provisions in the indenture governing the convertible senior notes delaying or preventing an otherwise beneficial takeover of us; and any adverse impact on our reported financial condition and results from the accounting methods for the convertible senior notes;
estimates of our expenses, future revenues, capital expenditures, capital requirements and our needs for additional financing;
iii


our ability to meet our obligations under our campus headquarters lease, the timing of occupancy and completion of the build-out of our space, cost overruns and the impact of COVID-19 on our space demands;
changes in laws and government regulation affecting our business, including the U.S. Food and Drug Administration (“FDA”) and the U.S. Federal Trade Commission (“FTC”) governmental regulation, and state, local and foreign regulation;
new or pending legislation, or changes in laws, regulations or policies of governmental agencies or regulators, both in the U.S. and abroad, affecting plant-based meat, the labeling or naming of our products, or our brand name or logo;
the failure of acquisitions and other investments to be efficiently integrated and produce the results we anticipate;
the financial condition of, and our relationships with our suppliers, co-manufacturers, distributors, retailers, and foodservice customers, and their future decisions regarding their relationships with us;
our ability and the ability of our suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations;
seasonality, including increased levels of purchasing by customers ahead of holidays, customer shelf reset activity and the timing of product restocking by our retail customers;
the sufficiency of our cash and cash equivalents to meet our liquidity needs and service our indebtedness;
economic conditions and the impact on consumer spending;
outcomes of legal or administrative proceedings, or new legal or administrative proceedings filed against us;
our, our suppliers’ and our co-manufacturers’ ability to protect our proprietary technology, intellectual property and trade secrets adequately;
the impact of tariffs and trade wars;
the impact of changes in tax laws;
foreign exchange rate fluctuations; and
the risks discussed in Part I, Item 1A, “Risk Factors,” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on March 1, 2021 (the “2020 10-K”), Part II, Item 1A, “Risk Factors” included herein, and those discussed in other documents we file from time to time with the SEC.
In some cases, you can identify forward-looking statements by the use of words such as “believe,” “may,” “will,” “will continue,” “could,” “will likely result,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “predict,” “project,” “expect,” “potential” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. These forward-looking statements are based on our current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those anticipated or implied in the forward-looking statements.
This report also contains estimates and other statistical data obtained from independent parties and by us relating to market size and growth and other data about our industry and ultimate consumers. The number of retail and foodservice outlets are derived from data as of September 2021. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates and data.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date of this report. You should not put undue reliance on any forward-looking statements. We assume no obligation to publicly update or revise any forward-looking statements because of new information, future events, changes in assumptions or otherwise, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
“Beyond Meat,” “Beyond Burger,” “Beyond Beef,” “Beyond Sausage,” “Beyond Breakfast Sausage,” “Beyond Meatballs,” “Beyond Chicken,” the Caped Steer Logo, and “Eat What You Love,” are registered or
iv


pending trademarks of Beyond Meat, Inc. in the United States and, in some cases, in certain other countries. All other brand names or trademarks appearing in this report are the property of their respective holders. Solely for convenience, the trademarks and trade names contained herein are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

v


Part I. Financial Information
ITEM I. FINANCIAL STATEMENTS

BEYOND MEAT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(unaudited)
October 2,
2021
December 31,
2020
Assets
Current assets:
Cash and cash equivalents$886,442 $159,127 
Accounts receivable48,849 35,975 
Inventory193,490 121,717 
Prepaid expenses and other current assets
24,341 15,407 
Total current assets$1,153,122 $332,226 
Property, plant, and equipment, net197,290 115,299 
Operating lease right-of-use assets25,444 14,570 
Prepaid lease costs, non-current49,456  
Other non-current assets, net7,062 5,911 
Total assets$1,432,374 $468,006 
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable$45,387 $53,071 
Wages payable4,269 2,843 
Accrued bonus1,400 57 
Current portion of operating lease liabilities3,962 3,095 
Short-term borrowings under revolving credit facility 25,000 
Accrued expenses and other current liabilities
19,091 4,830 
Short-term finance lease liabilities183 71 
Total current liabilities$74,292 $88,967 
Long-term liabilities:
Convertible senior notes, net$1,128,690 $ 
Operating lease liabilities, net of current portion
21,799 11,793 
Finance lease obligations and other long-term liabilities488 149 
Total long-term liabilities$1,150,977 $11,942 
(continued on the next page)
1


BEYOND MEAT, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(unaudited)
October 2,
2021
December 31,
2020
Commitments and Contingencies (Note 10)
Stockholders’ equity:
Preferred stock, par value $0.0001 per share—500,000 shares authorized, none issued and outstanding
$ $ 
Common stock, par value $0.0001 per share—500,000,000 shares authorized; 63,326,309 and 62,820,351 shares issued and outstanding at October 2, 2021 and December 31, 2020, respectively
6 6 
Additional paid-in capital503,690 560,210 
Accumulated deficit(296,601)(194,867)
Accumulated other comprehensive income10 1,748 
Total stockholders’ equity$207,105 $367,097 
Total liabilities and stockholders’ equity$1,432,374 $468,006 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2


BEYOND MEAT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
Three Months Ended Nine Months Ended
October 2,
2021
September 26,
2020
October 2,
2021
September 26,
2020
Net revenues$106,432 $94,436 $364,022 $304,848 
Cost of goods sold83,456 68,908 260,986 207,978 
Gross profit22,976 25,528 103,036 96,870 
Research and development expenses14,862 8,278 44,610 20,488 
Selling, general and administrative expenses
56,362 33,560 143,602 95,167 
Restructuring expenses5,750 2,146 12,068 6,028 
Total operating expenses76,974 43,984 200,280 121,683 
Loss from operations(53,998)(18,456)(97,244)(24,813)
Other (expense) income, net
Interest expense(1,005)(689)(2,656)(1,963)
Other, net759 (85)(631)(829)
Total other expense, net(246)(774)(3,287)(2,792)
Loss before taxes(54,244)(19,230)(100,531)(27,605)
Income tax (benefit) expense(23)55 27 70 
Equity in losses of unconsolidated joint venture595  1,176  
Net loss$(54,816)$(19,285)$(101,734)$(27,675)
Net loss per share available to common stockholders—basic and diluted$(0.87)$(0.31)$(1.61)$(0.45)
Weighted average common shares outstanding—basic and diluted63,280,122 62,487,152 63,111,703 62,114,399 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3


BEYOND MEAT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(unaudited)

Three Months EndedNine Months Ended
October 2,
2021
September 26,
2020
October 2,
2021
September 26,
2020
Net loss$(54,816)$(19,285)$(101,734)$(27,675)
Other comprehensive (loss) income, net of tax:
Foreign currency translation (loss) income, net of tax(1,040)645 (1,738)478 
Comprehensive loss, net of tax$(55,856)$(18,640)$(103,472)$(27,197)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4


BEYOND MEAT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands, except share data)
(unaudited)
Common StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive Income (Loss)Total
SharesAmount
Balance at December 31, 201961,576,494 $6 $526,199 $(142,115)$ $384,090 
Net income— — — 1,815 — 1,815 
Issuance of common stock under equity incentive plans, net280,883 — 1,002 — — 1,002 
Share-based compensation for equity classified awards— — 5,074 — — 5,074 
Balance at March 28, 202061,857,377 $6 $532,275 $(140,300)$ $391,981 
Net loss— — — (10,205)— (10,205)
Issuance of common stock under equity incentive plans, net568,263 — 1,590 — — 1,590 
Share-based compensation for equity classified awards— — 6,711 — — 6,711 
Foreign currency translation adjustment— — — — (167)(167)
Balance at June 27, 202062,425,640 $6 $540,576 $(150,505)$(167)$389,910 
Net loss— — — (19,285)— (19,285)
Issuance of common stock under equity incentive plans, net199,989 — 2,162 — — 2,162 
Share-based compensation for equity classified awards— — 5,968 — — 5,968 
Foreign currency translation adjustment— — — — 645 645 
Balance at September 26, 202062,625,629 $6 $548,706 $(169,790)$478 $379,400 

5


BEYOND MEAT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands, except share data)
(unaudited)
Common StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive IncomeTotal
SharesAmount
Balance at December 31, 202062,820,351 $6 $560,210 $(194,867)$1,748 $367,097 
Net loss— — — (27,266)— (27,266)
Issuance of common stock under equity incentive plans, net188,183 — 2,048 — — 2,048 
Purchase of capped calls related to convertible senior notes— — (83,950)— — (83,950)
Share-based compensation for equity classified awards— — 7,376 — — 7,376 
Foreign currency translation adjustment— — — — (1,258)(1,258)
Balance at April 3, 202163,008,534 $6 $485,684 $(222,133)$490 $264,047 
Net loss— — — (19,652)— (19,652)
Issuance of common stock under equity incentive plans, net234,964 — 2,663 — — 2,663 
Share-based compensation for equity classified awards— — 7,863 — — 7,863 
Foreign currency translation adjustment— — — — 560 560 
Balance at July 3, 202163,243,498 $6 $496,210 $(241,785)$1,050 $255,481 
Net loss— — — (54,816)— (54,816)
Issuance of common stock under equity incentive plans, net82,811 — 94 — — 94 
Share-based compensation for equity classified awards— — 7,386 — — 7,386 
Foreign currency translation adjustment— — — — (1,040)(1,040)
Balance at October 2, 202163,326,309 $6 $503,690 $(296,601)$10 $207,105 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6


BEYOND MEAT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Nine Months Ended
October 2,
2021
September 26,
2020
Cash flows from operating activities:
Net loss$(101,734)$(27,675)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization14,910 9,276 
Non-cash lease expense
2,351 1,573 
Share-based compensation expense
21,624 20,377 
Loss on sale of fixed assets
199 218 
Amortization of debt issuance costs
2,338 195 
Loss on extinguishment of debt
1,037 1,538 
Equity in losses of unconsolidated joint venture1,176  
Net change in operating assets and liabilities:
Accounts receivable
(13,495)10,365 
Inventories
(73,557)(50,263)
Prepaid expenses and other assets
(13,249)(9,444)
Accounts payable
965 2,442 
Accrued expenses and other current liabilities
18,176 245 
Prepaid lease costs, non-current(49,456) 
Operating lease liabilities
(2,332)(1,584)
Net cash used in operating activities
$(191,047)$(42,737)
Cash flows from investing activities:
Purchases of property, plant and equipment
$(104,301)$(38,048)
Purchases of property, plant and equipment held for sale
 (2,288)
Proceeds from note receivable on assets previously held for sale 599 
Payment of security deposits
(132)(9)
Net cash used in investing activities
$(104,433)$(39,746)
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes$1,150,000 $ 
Purchase of capped calls related to convertible senior notes(83,950) 
Proceeds from revolving credit facility
 50,000 
Debt issuance costs
(23,605)(1,224)
Debt extinguishment costs
 (1,200)
Repayment of revolving credit facility(25,000) 
Repayment of revolving credit line
 (6,000)
Repayment of term loan
 (20,000)
Repayment of equipment loan
 (5,000)
(continued on the next page)
7


BEYOND MEAT, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
Nine Months Ended
October 2,
2021
September 26,
2020
Principal payments under finance lease obligations
(130)(52)
Proceeds from exercise of stock options
7,554 6,491 
Payments of minimum withholding taxes on net share settlement of equity awards
(2,749)(1,736)
Net cash provided by financing activities
$1,022,120 $21,279 
Net increase (decrease) in cash and cash equivalents$726,640 $(61,204)
Effect of exchange rate changes on cash675 (169)
Cash and cash equivalents at the beginning of the period
159,127 275,988 
Cash and cash equivalents at the end of the period
$886,442 $214,615 
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest
$323 $2,114 
Taxes
$24 $15 
Non-cash investing and financing activities:
Non-cash additions to property, plant and equipment
$2,653 $2,545 
Non-cash additions to financing leases$580 $ 
Operating lease right-of-use assets obtained in exchange for lease liabilities
$14,269 $3,151 
Reclassification of other current liability to additional paid-in capital in connection with the share-settled obligation$2,535 $ 
Note receivable from sale of assets held for sale$ $4,558 
(concluded)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8


BEYOND MEAT, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1. Introduction
The Company
Beyond Meat, Inc., a Delaware corporation (including its subsidiaries unless the context otherwise requires, the “Company”), is one of the fastest growing publicly traded food companies in the United States, 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 commitment, “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.
On January 14, 2020, the Company registered its subsidiary, Beyond Meat EU B.V., in the Netherlands. On April 28, 2020, the Company registered its subsidiary, Beyond Meat (Jiaxing) Food Co., Ltd. (“BYND JX”), in the Zhejiang Province in China. On June 17, 2021, the Company incorporated its subsidiary, Beyond Meat Canada Inc. in Canada.
The Company’s primary production facilities are located in Columbia, Missouri, and Devault, Pennsylvania, and research and development and administrative offices are located in El Segundo, California. In addition to its own production facilities, the Company uses co-manufacturers in various locations in the United States, Canada and the Netherlands. In the second quarter of 2020, the Company acquired its first manufacturing facility in Europe located in Enschede, the Netherlands. This facility completed operational testing of dry blend production in late 2020. In the second quarter of 2021, this facility completed commercial trial runs for dry blend production and completed commercial trial runs for the Company’s extruded product in the third quarter of 2021. In addition, in June 2020 the Company announced the official opening of a new co-manufacturing facility to be used for Beyond Meat production built by the Company’s distributor in the Netherlands. In the third quarter of 2020, the Company and BYND JX entered into an investment agreement and related factory leasing contract to design and develop manufacturing facilities in the Jiaxing Economic & Technological Development Zone to manufacture plant-based meat products under the Beyond Meat brand in China. Renovations in the leased facility were substantially completed and trial production began in the first quarter of 2021.
The Company sells to a variety of customers in the retail and foodservice channels throughout the United States and internationally primarily through distributors who purchase, store, sell, and deliver the Company’s products. In addition, the Company sells directly to customers in the retail and foodservice channels who handle their own distribution. In the third quarter of 2020, the Company launched an e-commerce site to sell its products direct to consumers in the United States.
As of October 2, 2021, approximately 91.5% of the Company’s assets were located in the United States.
COVID-19 Pandemic
On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The global spread and unprecedented impact of COVID-19 continues to create significant volatility, uncertainty and economic disruption. The Company’s operations and its financial results including net revenues, gross profit, gross margin and operating expenses were negatively impacted by COVID-19 in 2020 and the first three quarters of 2021. The extent of COVID-19’s effect on the Company’s operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic (including any resurgences), the impact of variants of the virus that causes COVID-19, the wide distribution and public acceptance of COVID-19 vaccines, labor needs at the Company as well as in the
9

BEYOND MEAT, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
supply chain and at customers, compliance with government or employer COVID-19 vaccine mandates and the resulting impact on available labor, and the level of social and economic restrictions imposed in the United States and abroad in an effort to curb the spread of the virus, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. As a result, it is not currently possible to ascertain the overall impact of COVID-19 on the Company’s business, results of operations, financial condition or liquidity. While the ultimate health and economic impact of COVID-19 continues to be highly uncertain, the Company acknowledges that its business operations and results of operations, including its net revenues, gross profit, gross margin, earnings and cash flows, will be adversely impacted through 2021 and likely into 2022. Future events and effects related to the COVID-19 pandemic cannot be determined with precision and actual results could significantly differ from estimates or forecasts.
Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the condensed consolidated financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the Company’s financial position and of the results of operations and cash flows for the periods presented. These interim results are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 or for any other interim period or for any other future fiscal year. These condensed consolidated financial statements should be read in conjunction with the Company's audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 1, 2021 (the “2020 10-K”). The condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited financial statements at that date. There have been no material changes in the Company’s significant accounting policies from those that were disclosed in the 2020 10-K, except as noted below.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company balances and transactions have been eliminated.
Management’s Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates made by the Company include trade promotion accruals; useful lives of property, plant and equipment; valuation of deferred tax assets; valuation of inventory; incremental borrowing rate used to determine operating lease right-of-use assets and operating lease liabilities; assessment of contract-based factors, asset-based factors, entity-based factors and market-based factors to determine the lease term impacting right-of-use assets and lease liabilities; and the valuation of the fair value of stock options used to determine share-based compensation expense. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could differ from those estimates and such differences may be material to the condensed consolidated financial statements.
10

BEYOND MEAT, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
Convertible Senior Notes
On March 5, 2021, the Company issued $1.0 billion aggregate principal amount of its 0% Convertible Senior Notes due 2027 (the “Convertible Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). On March 12, 2021, the initial purchasers of the Convertible Notes exercised their option to purchase an additional $150.0 million aggregate principal amount of the Company’s 0% Convertible Senior Notes due 2027 (the “Additional Notes”, and together with the Convertible Notes, the “Notes”), and such Additional Notes were issued on March 16, 2021. See Note 7. The Company accounts for the Notes under Accounting Standards Update (“ASU”) No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (“ASU 2020-06”), which the Company early adopted in the first quarter of 2021 concurrent with the issuance of the Notes. The Company records the Notes in “Long-term liabilities” at face value net of issuance costs. If any of the conditions to the convertibility of the Notes is satisfied, or the Notes become due within one year, then the Company may be required under applicable accounting standards to reclassify the liability carrying value of the Notes as a current, rather than a long-term, liability.
Capped Call Transactions
Capped call transactions cover the aggregate number of shares of the Company’s common stock that will initially underlie the Notes, and generally reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company may make in excess of the principal amount of the converted Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the capped call transactions. The Company determined that the freestanding capped call option contracts qualify as equity under the accounting guidance on indexation and equity classification, and recognized the contract by recording an entry to “Additional paid-in capital” (“APIC”) in stockholders’ equity in its condensed consolidated balance sheet. The Company also determined that the capped call option contracts meet the definition of a derivative under Accounting Standards Codification (“ASC”) Topic 815, “Derivatives and Hedging” (“ASC 815”), but are not required to be accounted for as a derivative as they meet the scope exception outlined in ASC 815. Instead the capped call options are recorded in APIC and not remeasured.
Issuance Costs
Issuance costs related to the Notes offering were capitalized and offset against proceeds from the Notes. Issuance costs consist of legal and other costs related to the issuance of the Notes and are amortized to interest expense over the term of the Notes. Total issuance costs capitalized in the nine months ended October 2, 2021 were approximately $23.6 million, of which none remained unpaid as of October 2, 2021. There were no issuance costs related to the Notes in the nine months ended September 26, 2020.
Foreign Currency
Foreign currency translation (loss) income, net of tax, reported as cumulative translation adjustment through “Other comprehensive (loss) income” was $(1.0) million and $0.6 million, respectively, in the three months ended October 2, 2021 and September 26, 2020.
Foreign currency translation (loss) income, net of tax, reported as cumulative translation adjustments through “Other comprehensive (loss) income” was $(1.7) million and $0.5 million, respectively, in the nine months ended October 2, 2021 and September 26, 2020.
Realized and unrealized foreign currency transaction losses included in “Other, net” were $(0.2) million and $(0.4) million in the three and nine months ended October 2, 2021, respectively. Realized and unrealized foreign currency transaction (losses) gains included in “Other, net” were $(15,000) and $0.1 million, respectively, in the three and nine months ended September 26, 2020.
11

BEYOND MEAT, INC. AND SUBSIDIARIES
Notes to Unaudited Condensed Consolidated Financial Statements (continued)
Fair Value of Financial Instruments
The fair value measurement accounting guidance creates a fair value hierarchy to prioritize the inputs used to measure fair value into three categories. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement, where Level 1 is the highest and Level 3 is the lowest.
The three levels are defined as follows:
Level 1—Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which significant value drivers are observable.
Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable.
The Company’s financial instruments include cash equivalents, accounts receivable, accounts payable, and accrued expenses, for which the carrying amounts approximate fair value due to the short-term maturity of these financial instruments. The Company’s convertible notes are carried at face value less the unamortized debt issuance costs (see Note 7).
The Company had no financial instruments measured at fair value on a recurring basis as of October 2, 2021 and December 31, 2020, other than the liability classified share-settled obligation to one of the Company’s executive officers (see Note 9) which represented a Level 1 financial instrument. The executive officer separated from the Company effective August 27, 2021. As a result, the fourth quarterly tranche of the liability classified share-settled obligation was not earned and cancelled. As of October 2, 2021, no liability remained for this liability classified share-settled obligation.
There were no transfers of financial assets or liabilities into or out of Level 1, Level 2 or Level 3 for the three and nine months ended October 2, 2021.
Revenue Recognition
The Company’s revenues are generated through sales of its products to distributors or customers. Revenue is recognized at the point in which the performance obligation under the terms of a contract with the customer have been satisfied and control has transferred. The Company’s performance obligation is typically defined as the accepted purchase order, the direct-to-consumer order, or the contract, with the customer which requires the Company to deliver the requested products at agreed upon prices at the time and location of the customer’s choice. The Company generally does not offer warranties or a right to return on the products it sells except in the instance of a product recall or other limited circumstances.
Revenue is measured as the amount of consideration the Company expects to receive in exchange for fulfilling the performance obligation. Sales and other taxes the Company collects concurrent with the sale of products are excluded from revenue. The Company's normal payment terms vary by the type and location of its customers and the products offered. The time between invoicing and when payment is due is not significant. None of the Company's customer contracts as of October 2, 2021 contains a significant financing component.
The Company routinely offers sales discounts and promotions through various programs to its customers and consumers. These programs include rebates, temporary on shelf price reductions, buy-one-get-one-free programs, off invoice discounts, retailer advertisements, product coupons and other trade activities. Provision for discounts and incentives are recorded in the same period in which the related revenues are recognized. At the end of each accounting period, the Company recognizes a liability for estimated sales discounts that have been incurred but not paid which totaled $3.1 million and
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Notes to Unaudited Condensed Consolidated Financial Statements (continued)
$3.6 million as of October 2, 2021 and December 31, 2020, respectively. The offsetting charge is recorded as a reduction of revenues in the same period when the expense is incurred.
The Company recognizes the incremental costs of obtaining contracts as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one year or less. The incremental cost to obtain contracts was not material.
Presentation of Net Revenues by Channel
The Company presents net revenues by geography and distribution channel as follows:
Distribution ChannelDescription
U.S. Retail
Net revenues from retail sales to the U.S. market(1)
U.S. FoodserviceNet revenues from restaurant and foodservice sales to the U.S. market
International RetailNet revenues from retail sales to international markets, including Canada
International FoodserviceNet revenues from restaurant and foodservice sales to international markets, including Canada
____________
(1) Includes net revenues from direct-to-consumer sales.
The following table presents the Company’s net revenues by channel:
Three Months Ended Nine Months Ended
(in thousands)October 2,
2021
September 26,
2020
October 2,
2021
September 26,
2020
Net revenues:
U.S.:
Retail$52,361 $62,057 $193,382 $202,019 
Foodservice15,139 16,325 55,842 45,442 
U.S. net revenues67,500 78,382 249,224 247,461 
International:
Retail21,391 7,975 67,134 23,499 
Foodservice17,541 8,079 47,664 33,888 
International net revenues38,932 16,054 114,798 57,387 
Net revenues$106,432 $94,436 $364,022 $304,848 

Two distributors accounted for approximately 13% and 11%, respectively, of the Company’s gross revenues in the three months ended October 2, 2021 and one distributor accounted for approximately 11% of the Company’s gross revenues in the three months ended September 26, 2020. Two distributors accounted for approximately 12% and 11%, respectively, of the Company’s gross revenues in the nine months ended October 2, 2021 and one distributor accounted for approximately 13% of the Company’s gross revenues in the nine months ended September 26, 2020. No other distributor or customer accounted for more than 10% of the Company’s gross revenues in the three and nine months ended October 2, 2021 and September 26, 2020.
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Notes to Unaudited Condensed Consolidated Financial Statements (continued)
Investment in Joint Venture
The Company uses the equity method of accounting to record transactions associated with its joint venture when the Company shares in joint control of the investee. Investment in joint venture is not consolidated but is recorded in “Other non-current assets, net” in the Company’s condensed consolidated balance sheet. The Company recognizes its portion of the investee’s results in “Equity in losses of unconsolidated joint venture” in its condensed consolidated statement of operations. Activity related to the joint venture during the three and nine months ended October 2, 2021 was not material.
Shipping and Handling Costs
Outbound shipping and handling costs included in selling, general and administrative (“SG&A”) expenses in the three months ended October 2, 2021 and September 26, 2020 were $5.9 million and $3.3 million, respectively. Outbound shipping and handling costs included in SG&A expenses in the nine months ended October 2, 2021 and September 26, 2020 were $14.0 million and $8.1 million, respectively.
Recently Adopted Accounting Pronouncements
On December 18, 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, “Simplifying the Accounting for Income Taxes (Topic 740)” (“ASU 2019-12”). ASU 2019-12 eliminates the need for an organization to analyze whether the following apply in a given period (1) exceptions to the incremental approach for intra-period tax allocation, (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments, and (3) exceptions in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 also is designed to improve financial statement preparers’ application of income tax-related guidance and simplify GAAP for (1) franchise taxes that are partially based on income, (2) transactions with a government that result in a step-up in the tax basis of goodwill, (3) separate financial statements of legal entities that are not subject to tax, and (4) enacted changes in tax laws in interim periods. For public business entities, the amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted ASU 2019-12 beginning on January 1, 2021. Adoption of ASU 2019-12 did not result in any material changes to the way the tax provision is prepared and did not have a material impact on the Company’s financial position, results of operations or cash flows.
On August 5, 2020, the FASB issued ASU No. 2020-06, “Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity's Own Equity” (“ASU 2020-06”). ASU 2020-06 simplifies accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity, by removing certain separation models that require the separation of a convertible debt instrument into a debt component and an equity or derivative component. ASU 2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. After adoption of ASU 2020-06 entities will not separately present in equity an embedded conversion feature in such debt. Instead entities will account for a convertible debt instrument wholly as debt, and for convertible preferred stock wholly as preferred stock (i.e., as a single unit of account), unless (1) a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or (2) a convertible instrument was issued at a substantial premium. ASU 2020-06 also expands disclosure requirements for convertible instruments and simplifies areas of the guidance for diluted earnings-per-share calculations that are impacted by the amendments. Under ASU 2020-06, entities must apply the more dilutive of the if-converted method and the two-class method to all convertible instruments; the treasury stock method is no longer available. ASU 2020-06 eliminates an entity’s ability to overcome the presumption of share settlement, and as a result, the issuers of convertible debt that may be settled in any combination of cash or stock at the issuer’s option, must use the more dilutive among the if-converted method and the two-class method in computing diluted net income per share, which is typically more dilutive than the net share settlement under the treasury stock method. ASU 2020-06 is effective for interim and annual periods beginning after December 15, 2021, with early adoption permitted. The Company early adopted ASU 2020-06 in the first quarter of 2021 concurrent with
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Notes to Unaudited Condensed Consolidated Financial Statements (continued)
the issuance of its Notes. There were no changes to the Company’s previously issued financial statements since the Company had no existing convertible notes prior to issuance of the Notes in the first quarter of 2021. Upon adoption of ASU 2020-06, the Company recorded the issuance of the Notes at their face value net of issuance costs in long-term liabilities and the value of the capped call options in APIC.
Note 3. Restructuring
In May 2017, management approved a plan to terminate the Company’s exclusive supply agreement (the “Agreement”) with one of its co-manufacturers, due to non-performance under the Agreement and on May 23, 2017, the Company notified the co-manufacturer of its decision to terminate the Agreement. In the three months ended October 2, 2021 and September 26, 2020, the Company recorded $5.8 million and $2.1 million, respectively, in restructuring expenses related to this dispute, which consisted primarily of legal and other expenses. In the nine months ended October 2, 2021 and September 26, 2020, the Company recorded $12.1 million and $6.0 million, respectively, in restructuring expenses related to this dispute, which consisted primarily of legal and other expenses. See Note 10. As of October 2, 2021 and December 31, 2020, the Company had $3.7 million and $0.8 million, respectively, in accrued and unpaid restructuring expenses.
Note 4. Leases
Leases are classified as either finance leases or operating leases based on criteria in ASC 842. The Company has operating leases for its corporate offices, including its Manhattan Beach Project Innovation Center where the Company’s research and development facility is located, its manufacturing facilities, warehouses and vehicles, and finance leases for certain of the Company’s equipment. Such leases generally have original lease terms between two and 12 years, and often include one or more options to renew. Some leases also include early termination options, which can be exercised under specific conditions. The Company includes options to extend the lease term if the options are reasonably certain of being exercised. The Company does not have residual value guarantees or material restrictive covenants associated with its leases.
In the third quarter of 2021, the Company completed the purchase of a property in Missouri, consisting of land, building, and associated tenant improvements, which it was leasing as an operating lease, for cash consideration of $10.4 million including transaction costs. The Company de-recognized the right of use asset and liability and recognized the difference between the purchase price and the carrying amount of the lease liability immediately before the purchase as an adjustment to the carrying value of the asset. The purchase price was allocated to the assets acquired based upon their relative values, which are included in “Property, plant and equipment, net” and “Other non-current assets,” on the Company’s condensed consolidated balance sheets.
In the third quarter of 2021, the Company also assumed an operating lease for a building comprising approximately 64,000 square feet in California to house its commercialization center. The lease expires in August 2033 and includes an option to extend the term for an additional 60 months.
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Notes to Unaudited Condensed Consolidated Financial Statements (continued)
Three Months Ended
(in thousands)Statement of Operations Location
October 2, 2021
September 26, 2020
Operating lease cost:
Lease costCost of goods sold$535 $341 
Lease costResearch and development expenses155 187 
Lease costSelling, general and administrative expenses141 136 
Variable lease cost (1)
Cost of goods sold1  
Operating lease cost$832 $664 
Short-term lease costSelling, general and administrative expenses$72 $95 
Finance lease cost:
Amortization of right-of use assetsCost of goods sold$47 $19 
Interest on lease liabilitiesInterest expense5 3 
Finance lease cost$52 $22 
Total lease cost$956 $781 
____________
(1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs.
Nine Months Ended
(in thousands)Statement of Operations Location
October 2, 2021
September 26, 2020
Operating lease cost:
Lease costCost of goods sold$1,630 $993 
Lease costResearch and development expenses494 470 
Lease costSelling, general and administrative expenses486 409 
Variable lease cost (1)
Cost of goods sold30 7 
Operating lease cost$2,640 $1,879 
Short-term lease costSelling, general and administrative expenses$185 $270 
Finance lease cost:
Amortization of right-of use assetsCost of goods sold$131 $57 
Interest on lease liabilitiesInterest expense15 10 
Finance lease cost$146 $67 
Total lease cost$2,971 $2,216 
____________
(1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs.

Supplemental balance sheet information as of October 2, 2021 and December 31, 2020 related to leases are as follows:
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Notes to Unaudited Condensed Consolidated Financial Statements (continued)
(in thousands) Balance Sheet Location
October 2, 2021
December 31, 2020
Assets
Operating leasesOperating lease right-of-use assets$25,444 $14,570 
Finance leases, netProperty, plant and equipment, net661 212 
Prepaid lease costs, non-current(1)
Prepaid lease costs, non-current49,456  
Total lease assets$75,561 $14,782 
Liabilities
Current:
Operating lease liabilitiesCurrent portion of operating lease liabilities$3,962 $3,095 
Finance lease liabilitiesShort-term finance lease liabilities183 71 
Long-term:
Operating lease liabilitiesOperating lease liabilities, net of current portion21,799 11,793 
Finance lease liabilitiesFinance lease obligations and other long-term liabilities488 149 
Total lease liabilities$26,432 $15,108 
_______________
(1) Payments to a construction escrow account for the Campus Lease that has not commenced as of October 2, 2021. See Note 10.

The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year, as of October 2, 2021:
October 2, 2021
(in thousands)Operating LeasesFinance Leases
Remainder of 2021$1,274 $50 
20224,928 194 
20234,660 181 
20243,211 146 
20252,765 115 
20262,619 10 
Thereafter12,359  
Total undiscounted future minimum lease payments31,816 696 
Less imputed interest(6,055)(25)
Total discounted future minimum lease payments$25,761 $671 
Weighted average remaining lease terms and weighted average discount rates were:
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Notes to Unaudited Condensed Consolidated Financial Statements (continued)
October 2, 2021
Operating LeasesFinance Leases
Weighted average remaining lease term (years)8.83.8
Weighted average discount rate4.4 %2.3 %

Note 5. Inventories
Major classes of inventory were as follows:
(in thousands)October 2,
2021
December 31,
2020
Raw materials and packaging$104,415 $83,702 
Work in process41,655 12,887 
Finished goods47,420 25,128 
Total$193,490 $121,717 

Note 6. Property, Plant and Equipment
Property, plant, and equipment are stated at cost and finance lease assets are included. A summary of property, plant, and equipment as of October 2, 2021 and December 31, 2020, is as follows:
(in thousands)October 2,
2021
December 31,
2020
Manufacturing equipment$100,099 $62,521 
Research and development equipment16,656 12,342 
Leasehold improvements18,283 9,277 
Building21,782 12,569 
Finance leases867 212 
Software1,198 402 
Furniture and fixtures857 614 
Vehicles584 377 
Land5,459 3,995 
Assets not yet placed in service78,483 46,148 
Total property, plant and equipment$244,268 $148,457 
Accumulated depreciation and amortization(46,978)(33,158)
Property, plant and equipment, net$197,290 $115,299 

Depreciation and amortization expense for the three months ended October 2, 2021 and September 26, 2020 was $5.7 million and $3.4 million, respectively. Of the total depreciation and amortization expense in the three months ended October 2, 2021 and September 26, 2020, $4.7 million and $2.6 million, respectively, were recorded in cost of goods sold; $0.9 million and $0.7 million, respectively, were recorded in research and development expenses; and $0.1 million and $30,000, respectively, were recorded in SG&A expenses in the Company’s condensed consolidated statements of operations.
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Notes to Unaudited Condensed Consolidated Financial Statements (continued)
Depreciation and amortization expense for the nine months ended October 2, 2021 and September 26, 2020 was $14.9 million and $9.3 million, respectively. Of the total depreciation and amortization expense in the nine months ended October 2, 2021 and September 26, 2020, $12.1 million and $7.1 million, respectively, were recorded in cost of goods sold; $2.7 million and $2.1 million, respectively, were recorded in research and development expenses; and $0.1 million and $0.1 million, respectively, were recorded in SG&A expenses in the Company’s condensed consolidated statements of operations.
The Company had no property, plant and equipment that meet the criteria for assets held for sale as of October 2, 2021 and December 31, 2020. Amounts previously classified as assets held for sale were sold for amounts that approximated book value for which a note receivable of $5.0 million, net of payments received, was recorded, of which $4.5 million remains unpaid and is included in “Other non-current assets, net” in the Company’s condensed consolidated balance sheet at October 2, 2021. At December 31, 2020, the Company had a note receivable of $4.6 million from the sale of assets held for sale, of which $2.4 million was included in “Prepaid expenses and other current assets” and $2.2 million was included in “Other non-current assets, net” in the Company’s condensed consolidated balance sheet.

Note 7. Debt
The following is a summary of debt balances as of October 2, 2021 and December 31, 2020: