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AppHarvest Latest News: Multiple Lease Agreements

AppHarvest ships first tomatoes from Richmond Kentucky Facility

Discover the latest news from AppHarvest, a high-tech, controlled environment agriculture company. AppHarvest is a publicly traded company under the ticker symbol ” APPH.”

AppHarvest Enters Multiple Lease Agreements Amid Chapter 11 Bankruptcy Proceedings (2023/09/21)

On September 14, 2023, AppHarvest signed three lease agreements with Equilibrium for properties in Richmond and Morehead, Kentucky. This comes after AppHarvest filed for Chapter 11 bankruptcy on July 23, 2023. Equilibrium is required to maintain property insurance for Furniture, Fixtures, and Equipment (FF&E) during the term of the agreements. The bankruptcy court confirmed the company’s plan of liquidation on September 14, 2023. The company warns security holders that trading in its securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks.

AppHarvest Initiates Chapter 11 Proceedings: Pursues Operational Transition for Debt Reduction and Job Preservation (2023/07/24)

AppHarvest, Inc. today revealed plans for a financial and operational transition to decrease its outstanding liabilities. While it navigates this transition, the company will sustain its operations at all of its farm locations and continue to distribute its products to leading national grocery chains, restaurants, and food service providers. AppHarvest, which is a public benefit corporation and a Certified B Corporation, has become renowned for its large-scale production of affordable and nutritious fruits and vegetables, as well as its focus on providing quality employment opportunities in the Appalachia region.

In order to facilitate this transition, the company has voluntarily filed petitions for Chapter 11 protection under the U.S. Bankruptcy Code with the U.S. Bankruptcy Court for the Southern District of Texas. Additionally, AppHarvest has secured a commitment from its largest secured creditor, Equilibrium, for debtor-in-possession (DIP) financing of about $30 million. This financial aid is aimed at maintaining operations at its Morehead, Richmond, and Somerset farms during the Chapter 11 process, though it is still awaiting the Court’s approval.

Simultaneously, AppHarvest is also planning to transfer operations of its Berea facility to its distribution partner, Mastronardi Produce, or one of its subsidiaries. In exchange for this, the company will receive approximately $3.75 million, along with additional incremental funding and support for its restructuring plan. However, this move is also dependent on the Court’s approval. The company’s board of directors and executive leadership, under CEO Tony Martin, is diligently working to restructure operations to both maximize the potential return for creditors and to safeguard jobs. AppHarvest is presently being represented by Sidley Austin LLP and Jackson Walker LLP as counsel, Jefferies LLC as investment banker, and Portage Point Partners as financial adviser.

AppHarvest Subsidiary Grapples with Debt Repayment, Announces Changes in Executive Leadership (2023/07/17)

AppHarvest Morehead Farm (AppHarvest Stock: APPH), a subsidiary of AppHarvest, received a Notice of Acceleration from lender Rabo AgriFinance on July 11, 2023, due to an alleged default in payment of certain principal and interest amounts. The non-payment, which was supposed to be made on July 3, 2023, led Rabo to demand immediate repayment of $47.2 million, inclusive of principal, accrued interest, additional fees, costs, and other related obligations under the credit agreement dated June 15, 2021.

The notice has accelerated the financial obligations of the Borrower Subsidiary under the Master Credit Agreement, and the debt is accruing interest at the unpaid principal balance rate plus 5% per annum. The collateral for the payment includes the Borrower Subsidiary’s assets, which comprise of real estate property in Rowan County, Kentucky, as well as any licensing agreement for the rights to certain intellectual properties held by the subsidiary.

In light of the alleged default, Rabo holds the rights to pursue legal remedies, including judicial foreclosure of the Morehead Property, the court-ordered appointment of a receiver for the same property, or a suit against the Borrower Subsidiary to recover the debt. Should the sale of the Morehead Property not cover the debt owed, Rabo can still pursue the deficit.

AppHarvest is engaging with Rabo to resolve the situation, although they can offer no guarantees for a timely resolution, or that the terms will be favorable, if a resolution is possible at all. The inability to resolve these defaults could have a significant impact on AppHarvest’s liquidity, financial condition, and operational results, and could potentially lead to bankruptcy or insolvency.

AppHarvest Appoints Tony Martin as CEO to Accelerate Strategic Plan, Project New Leaf (2023/07/13)

AppHarvest has appointed Tony Martin as its new CEO. The company is engaged in building some of the world’s largest high-tech indoor farms to produce affordable, nutritious fruits and vegetables at scale, while also providing employment opportunities in Appalachia.

Martin, who has served as a board member at AppHarvest since October 2022 and as Chief Operating Officer since January of this year, joins the company after a nearly 12-year tenure with Windset Farms, one of North America’s largest controlled environment agriculture (CEA) producers.

Martin’s strategic plan, dubbed Project New Leaf, aims to improve labor efficiency, strengthen industry relationships, implement disciplined cost control, improve feedback across the organization, and align the workforce with the company’s five-year plan. He anticipates more operational efficiencies leading to increased performance throughout the year.

Kevin Willis, an AppHarvest board member since February 2022, will become the board chair. AppHarvest founder Jonathan Webb will transition from his roles as chairman and CEO to become Chief Strategy Officer. He remains on the board as a director and continues to support the company in its mission to improve domestic food security and foster economic opportunities in Central Appalachia.

AppHarvest Berea in Dispute over Lease Agreement and Interest Payment Default (2023/07/11)

AppHarvest Berea Farm, LLC (AppHarvest Berea), a subsidiary of AppHarvest Inc. (AppHarvest Stock: APPH), faces two significant challenges that could potentially impact its financial stability according to a recent form 8-K filled out by the company. The first issue involves a Notice of Default and Termination received on July 5, 2023, from Mastronardi Berea LLC, the landlord of a property leased by AppHarvest Berea in Madison County, Kentucky. The second is a deferred interest payment, leading to potential default under a credit agreement.

According to the Termination Letter, Mastronardi Berea alleges that AppHarvest Berea has continually violated Section 8.1(n) of their Lease Agreement concerning maintaining minimum production volumes at the Leased Property. As a result, Mastronardi claims the right to terminate the lease and has requested AppHarvest Berea to vacate the property. In addition, Mastronardi reserves the right to initiate legal proceedings against AppHarvest Berea. However, AppHarvest Berea disputes this claim, asserting no violation under the Lease and reserving all rights under the Lease and applicable law. The company engages with Mastronardi to resolve the dispute but acknowledges the risk of an adverse outcome.

Parallelly, AppHarvest Berea is facing potential default under a Credit Agreement with Equilibrium Sustainable Foods, LLC. The company’s board elected to defer an interest payment of approximately $455,720, due on June 30, 2023, and chose to continue this deferral past the grace period, which ended on July 5, 2023. AppHarvest Berea is currently in dialogue with Equilibrium to resolve this matter. However, if no agreement is reached, Equilibrium has the right to pursue various actions, including judicial foreclosure of a property in Richmond, Kentucky.

If AppHarvest Berea cannot satisfactorily resolve these issues, the firm acknowledges that there could be a severe impact on its liquidity, financial condition, and operational results. The company could potentially face bankruptcy or insolvency. These events underline the financial and operational challenges within the agricultural industry, particularly in these uncertain times.

Latest Stockholder Decision On Amendments of Certificate of Incorporation (2023/06/14)

In a recent decision, stockholders of AppHarvest approved a series of amendments to the company’s Certificate of Incorporation. These changes allow the Board to carry out a reverse stock split of the company’s common stock. The approved ratio for this reverse split ranges from one-for-ten (1:10) to one-for-twenty (1:20). The voting outcomes for these amendments were as follows: 89,805,724 votes were in favor, 7,186,956 were against, and 716,134 abstained from voting.

AppHarvest Faces Impeding Foreclosure and Notice of Acceleration (2023/06/07)

AppHarvest (AppHarvest Stock: APPH) is under financial strain following a Notice of Default and Reservation of Rights from CEFF II AppHarvest Holdings, LLC (“CEFF”). The notice, received by AppHarvest Richmond Farm, LLC, the Borrower Subsidiary, alleges defaults related to unapproved increases in the construction budget and delays, a mechanic’s lien, and purported construction deficiencies.

Adding to AppHarvest’s woes, CEFF, an affiliate of Equilibrium Sustainable Foods, LLC, issued a Notice of Acceleration on May 30, 2023, based on the previously asserted events of default. The Notice demands immediate repayment of $66.7 million, comprising principal and accrued interest, along with any further fees, costs, and other obligations under the Equilibrium Credit Agreement.

AppHarvest Q1 2023: Performance Improvements But Concerns Rise Regarding Its Liquidity (2023/04/16)

AppHarvest Inc. (APPH Stock) has reported robust financial results for the first quarter of 2023. The company’s net sales surged to $13.0 million in Q1 2023, a significant jump from $5.2 million reported in the first quarter of 2022, marking a staggering increase of over 250%. The revenue also represents nearly 90% of the company’s net sales for the entire fiscal year of 2022. Despite the remarkable revenue growth, the company posted a net loss of $33.6 million and a non-GAAP Adjusted EBITDA loss of $23.2 million in Q1 2023, which aligned with expectations. These figures compare to a net loss of $30.6 million and a non-GAAP Adjusted EBITDA loss of $18.0 million in Q1 2022.

AppHarvest Discloses Doubts To Continue As A Going Concern (2023/03/16)

AppHarvest, a high-tech controlled environment agriculture (CEA) company, has indicated in an SEC filing significant doubts about its ability to continue operating due to sustained operational losses and negative cash flows since its inception. The company’s ongoing plans, including planting and harvesting activities, are projected to continue yielding losses and generating negative cash flows. The capital-intensive nature of the CEA business, coupled with AppHarvest’s plans to construct future CEA facilities and the corresponding debt service requirements, is projected to impact liquidity significantly. Moreover, the company expects considerable expenditure to complete ongoing facility construction, technology development, and skilled labor acquisition and retention. Consequently, AppHarvest acknowledges the need for additional funding to maintain operations, meet upcoming obligations, and continue constructing and launching new CEA facilities.

4th Quarter Results: Misses Consensus (2023/03/10)

AppHarvest, Inc. has announced its Q4 2022 and full-year financial and operating results, showing missed earnings but an increase in sales and a quadrupling of its farm network. The company reported Q4 net sales of $4.5 million, a 45% increase from Q4 2021, and full-year net sales of $14.6 million, representing a year-over-year increase of 60%. However, the company saw a net loss of $93.3 million and a non-GAAP Adjusted EBITDA loss of $24.1 million for the fourth quarter, compared to a net loss of $88.4 million and a non-GAAP Adjusted EBITDA loss of $18.3 million in the prior year. The full-year 2022 non-GAAP Adjusted EBITDA loss was within its revised guidance range. The company, which increased its farm network four-fold and grew nearly 1.5 million tomato plants in 2022, expects to triple its net sales in 2023. AppHarvest secured $50 million in USDA-guaranteed loans and completed a $127 million sale-leaseback of its Berea, Kentucky, indoor salad greens facility for non-dilutive financing in 2022. With these results, AppHarvest is concentrating on optimizing operations under Project New Leaf, its strategic program focusing on profitability.

Closes Public Offering Of Its Common Stock, Raises $46M (2023/02/28)

AppHarvest, Inc., (AppHarvest: APPH) completed an underwritten public offering of 46,000,000 shares of its common stock at $1.00 per share. An additional option for underwriters to purchase 6,000,000 shares was also included. This offering resulted in aggregate gross proceeds of $46 million, which will be used for working capital and general corporate purposes. Cowen and Company, LLC acted as the sole book-running manager, while Roth Capital Partners, LLC served as the co-manager for this offering. As a public benefit corporation, AppHarvest is legally obligated to consider the interests of all stakeholders, including the environment, its employees, the communities it serves, and its shareholders.

AppHarvest Ships First Tomatoes From Richmond Facility (2023/01/19)

AppHarvest shipped its first tomatoes at its new 60-acre high-tech indoor farm in Richmond, Kentucky. This marks the first time all facilities in the AppHarvest four-farm network are shipping to top national grocery store chains, restaurants, and food service outlets under various brands for Mastronardi Produce.

AppHarvest Appoints Tony Martin As COO (2023/01/03)

AppHarvest (AppHarvest Stock: APPH) has announced that Tony Martin has been named its chief operating officer. Martin will retain his board seat and be responsible for optimizing production and revenue across AppHarvest’s four-farm network, which now consists of 165 acres of controlled environment agriculture (CEA). Martin previously worked for Windset Farms, one of the largest CEA producers in North America, and has served as a consultant in the CEA sector.

AppHarvest Completes a $127M Sale-Leaseback With Mastronardi Produce (2022/12/27)

AppHarvest has completed the sale-leaseback of its indoor leafy greens farm in Berea, Kentucky, for a little over $127 million. The business also just constructed a 60-acre high-tech indoor farm in Richmond, Kentucky. A portion of the money raised will go toward paying down the $30 million bridge loan.

AppHarvest Initiates Shipment of Tomato From Its Latest Facility (2022/11/23)

AppHarvest (AppHarvest Stock: APPH) started the third season of harvesting from its 60-acre indoor farm in Morehead, Kentucky. These products are being distributed to national grocery stores, restaurants, and food services through its distributor, Mastronardi Produce. AppHarvest is also developing a fourth 60-acre farm in Richmond, Kentucky, to begin harvesting in January 2023. According to CEO Jonathan Webb, the experience from two seasons of harvests has resulted in improved quality and yield.

AppHarvest Announce Q3 Results Beating EPS Estimation Despite Disruptions (2022/11/08)

The Morehead company’s financial report for Q3 2022 shows net sales of $524,000 from selling 0.75 million pounds of tomatoes for 70 cents per pound. This result, while slightly lower than the Q3 2021 sales of $543,000 generated from selling 1.5 million pounds of tomatoes at 37 cents per pound, reflects an increase in the price per pound of tomatoes, offset by a reduction in yield due to plant health issues disclosed earlier. Historically, Q3 has been the company’s weakest period due to the annual summer refresh for replanting at the Morehead farm. The rapid expansion to four farms led to a net loss of $24.0 million and a non-GAAP Adjusted EBITDA loss of $12.0 million, compared to the prior year’s Q3 net loss of $17.3 million and a non-GAAP Adjusted EBITDA loss of $16.5 million.

Opens Its 30-Acre Somerset, Ky. Facility To Grow Strawberries & Cucumbers (2022/11/04)

AppHarvest (AppHarvest Stock: APPH), a controlled environment agriculture (CEA) company, announced the opening of its 30-acre high-tech indoor farm in Somerset, Kentucky, designed for growing strawberries and cucumbers. The facility is equipped with automation for lighting, humidity, and temperature and utilizes a closed-loop irrigation system for efficient water usage. It also features a blast chiller to extend the shelf life of harvested strawberries. The company, located within a day’s drive of about 70% of the U.S. population, is now shipping strawberries and expects to begin alternating seasonally with English cucumbers. With this addition, AppHarvest operates three farms, with the fourth, a 60-acre tomato farm in Richmond, expected to commence planting in November. As part of its expansion, the company has strengthened its board with industry veterans Tony Martin and Hollie P. Harris while David Lee transitions from president to board member.

Hollie Phillips Joins The Board of Directors (2022/11/03)

AppHarvest, Inc. (AppHarvest Stock: APPH, APPHW), announced the appointment of Appalachian Regional Healthcare (ARH) president and CEO Hollie Harris Phillips as an independent director of the company and a member of the audit committee, effective immediately.

Opens Its Berea, Ky., Facility & Announced a USD 30M Loan From Mastronardi Produce (2022/10/27)

The company opened its Berea, Ky., 15-acre high-tech indoor salad greens farm featuring a touchless growing system with autonomous harvesting. It announced a USD 30M loan from marketing partner Mastronardi Produce secured by the AppHarvest (AppHarvest Stock: APPH) Berea farm. Consistent with its strategy to secure attractive long-term financing for its assets, AppHarvest also intends to pursue sale-leaseback financing for its Berea farm. The secured financing is being delivered in two tranches of USD 15 million each, the first of which occurred on Oct. 25, and the second is anticipated four weeks later. The loan will incur an interest rate of 7.5%, with interest paid in kind until the loan matures.

Greater Commercial Lending Completes Its USD 50M in Financing for AppHarvest (2022/10/26)

Greater Commercial Lending (GCL) has completed around $50 million in financing for AppHarvest’s high-tech berry farm in Somerset, Kentucky, with these loans guaranteed by the U.S. Department of Agriculture (USDA). The farm, expected to be operational by year-end, will use an eco-friendly approach, utilizing sunshine, rainwater, and 90% less water than conventional farming, producing up to 30 times traditional agriculture’s yields. Most of the financing is guaranteed by the USDA’s Business and Industry Rural Development Program and Rural Energy America Program (REAP), featuring contributions from the Greater Nevada Credit Union, Community Bank, and Trust of Georgia. The funding enables AppHarvest to scale its operations, with plans to bring the Somerset farm and two additional controlled environment agriculture facilities online by year-end. The project is anticipated to generate approximately 142 jobs.

AppHarvest Appoints CEA Veteran Tony Martin (2022/10/21)

Completes Calibration of Autonomous Harvest System & Provides Facility Updates (2022/09/20)

AppHarvest, Inc. (Appharvest stock: APPH, APPHW) announced it had completed the calibration of its “touchless growing system” for salad greens at its 15-acre Berea, Ky., indoor farm by having successfully grown more than 20 varieties of lettuce and is approximately 80% complete with the planting of its 30-acre AppHarvest Somerset Farm, which has the capacity to grow about 1 million strawberry plants. The company’s 60-acre flagship farm in Morehead, Ky., is expected to start harvesting its third season of tomatoes mid-fourth quarter.

AppHarvest Q2 Beats GAAP EPS, Misses on Revenue (2022/08/04)

AppHarvest (AppHarvest Stock: APPH) reported Q2 2022 net sales of $4.4 million on 6.0 million pounds of tomatoes sold, reflecting a 39% YoY increase, although it fell short of estimates by $1.74 million. The company secured a $50 million USDA-backed loan during Q2, marking one of the most substantial supports ever for controlled environment agriculture (CEA). Despite recent flooding in Eastern Kentucky, the company’s facilities remained undamaged. However, AppHarvest now anticipates reaching the lower end of its guidance range, adjusting its full-year 2022 net sales forecast to between $20 and $25 million. Following these updates, the company’s share price dropped by $0.37 (-9.18%) in pre-market trading. AppHarvest continues progressing with Mastronardi Produce Ltd. regarding a potential FarmCo joint venture that could expand its national footprint and bolster network scale.

$50 Million in Funding For Somerset Farm (2022/08/01)

AppHarvest (AppHarvest Stock: APPH) secured $50 million through two loans guaranteed by the United States Department of Agriculture (USDA). The financing, organized by Greater Commercial Lending (GCL), a Greater Nevada Credit Union subsidiary, is targeted at AppHarvest’s high-tech indoor berry farm in Somerset, Kentucky, which is expected to be operational by year’s end. The funding will assist in expanding operations, bringing the Somerset farm and two other controlled environment agriculture facilities online, significantly diversifying AppHarvest’s product offerings. The USDA guarantees 80% of the financing, with each loan having a 23-year term and a rate that resets every five years. The funds will be utilized to settle an existing $46 million loan with J.P. Morgan, used partially to fund the initial construction phase of the Somerset farm.

AppHarvest Announces Fourth and Fifth High-Tech Indoor Farms (2022/06/29)

AppHarvest (AppHarvest Stock: APPH) has commenced the construction of two new high-tech indoor farms in Somerset and Morehead, Kentucky, aiming to grow berries and leafy greens, respectively. The 30-acre Somerset facility marks the company’s entry into berry farming, while the Morehead farm is the second in Rowan County and will produce leafy greens over 15 acres. These developments come on the heels of the Kentucky company’s 2.76-million-square-foot tomato-growing facility in Morehead, a 15-acre leafy green farm in Berea, and a 60-acre vine crop farm in Richmond. The Somerset and Morehead facilities, expected to be operational by the end of 2022, will grow non-GMO, pesticide-free fruits, and vegetables for top U.S. grocers and restaurants. This expansion aligns with AppHarvest’s aim to operate 12 high-tech indoor farms by 2025, providing hundreds of jobs and reinforcing Kentucky’s position as a leader in the AgriTech industry.

Image provided by AppHarvest


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