Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2021 | |
Cover [Abstract] | |
Document Type | POS AM |
Entity Registrant Name | AppHarvest, Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Central Index Key | 0001807707 |
Amendment Flag | true |
Amendment Description | AMENDMENT NO. 1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 297,660,000 | $ 21,908,907 |
Accounts receivable, net | 1,182,000 | 0 |
Inventories, net | 4,903,000 | 3,387,113 |
Prepaid expenses and other current assets | 3,531,000 | 481,003 |
Total current assets | 307,276,000 | 25,777,023 |
Operating lease right-of-use assets, net | 1,703,000 | 1,307,173 |
Property and equipment, net | 190,962,000 | 152,645,000 |
Other assets, net | 7,481,000 | 1,187,967 |
Total non-current assets | 200,146,000 | 155,140,475 |
Total assets | 507,422,000 | 180,917,498 |
Current Liabilities: | ||
Accounts payable | 23,070,000 | 1,341,822 |
Accrued expenses | 8,204,000 | 5,183,880 |
Current portion of lease liabilities with a related party | 0 | 59,217,000 |
Current portion of lease liabilities | 300,000 | 166,354 |
Current portion of financing obligation with a related party | 0 | 58,795,000 |
Note payable with a related party | 0 | 30,000,000 |
Other current liabilities | 832,000 | 76,948 |
Total current liabilities | 32,406,000 | 154,780,798 |
Lease liabilities, net of current portion | 1,850,000 | 1,370,462 |
Deferred income tax liabilities | 1,769,000 | 0 |
Private Warrant liabilities | 29,920,000 | 0 |
Other liabilities | 227,000 | 0 |
Total non-current liabilities | 33,766,000 | 1,370,462 |
Total liabilities | 66,172,000 | 156,151,260 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity | ||
Preferred stock, par value $0.0001, 10,000 shares authorized, 0 issued and outstanding, as of March 31, 2021 and December 31, 2020, respectively | 0 | 0 |
Common stock, par value $0.0001, 750,000 shares authorized, 97,925 and 44,461 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 10,000 | 4,446 |
Additional paid-in capital | 491,552,000 | 45,890,000 |
Accumulated deficit | (49,643,000) | (21,128,133) |
Accumulated other comprehensive loss | (669,000) | 0 |
Total stockholders' equity | 441,250,000 | 24,766,000 |
Total liabilities and stockholders' equity | $ 507,422,000 | $ 180,917,498 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2021 | Jan. 29, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Condensed Consolidated Balance Sheets (Unaudited) | ||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | |
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | 19,600,000 |
Common stock, shares issued | 97,925,000 | 44,461,000 | 9,676,677 | |
Common stock, shares outstanding | 97,925,000 | 44,461,000 | 9,676,677 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) | ||
Net sales | $ 2,299,000 | $ 0 |
Cost of goods sold | 6,836,000 | 0 |
Gross profit (loss) | (4,537,000) | 0 |
Operating expenses: | ||
Selling, general and administrative expenses | 31,489,000 | 980,000 |
Total operating expenses | 31,489,000 | 980,000 |
Loss from operations | (36,026,000) | (980,000) |
Other income (expense): | ||
Development fee income from a related party | 0 | 134,000 |
Interest expense from related parties | (658,000) | (2,000) |
Change in fair value of Private Warrants | 9,826,000 | 0 |
Other | 356,000 | 30,000 |
Loss before income taxes | (26,502,000) | (818,000) |
Income tax expense | (2,013,000) | 0 |
Net loss | (28,515,000) | (818,000) |
Other comprehensive loss: | ||
Net unrealized loss on cash flow hedges, net of tax | (669,000) | 0 |
Comprehensive loss | $ (29,184,000) | $ (818,000) |
Net loss per common share: | ||
Net loss per common share, Basic and diluted (in dollars per share) | $ (0.35) | $ (0.02) |
Weighted average common shares outstanding: | ||
Weighted-average common shares outstanding, Basic and diluted (in shares) | 80,729 | 32,858 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Previously ReportedSeries A Preferred Stock | Previously ReportedSeries A-1 Preferred Stock | Previously ReportedSeries B Preferred Stock | Previously ReportedSeries C Preferred Stock | Previously ReportedCommon stock | Previously ReportedAdditional Paid-in Capital | Previously ReportedRetained Earnings | Previously Reported | Revision of Prior Period, AdjustmentSeries A Preferred Stock | Revision of Prior Period, AdjustmentSeries A-1 Preferred Stock | Revision of Prior Period, AdjustmentSeries B Preferred Stock | Revision of Prior Period, AdjustmentSeries C Preferred Stock | Revision of Prior Period, AdjustmentCommon stock | Revision of Prior Period, AdjustmentAdditional Paid-in Capital | Revision of Prior Period, Adjustment | Series A Preferred Stock | Series A-1 Preferred Stock | Series B Preferred Stock | Common stock | Additional Paid-in Capital | Retained Earnings | AOCI Attributable to Parent | Total |
Temporary equity, shares outstanding, ending balance (in shares) at Dec. 31, 2019 | 2,770,000 | 392,000 | 1,483,000 | (2,770,000) | (392,000) | (1,483,000) | |||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 910 | $ 11,559 | $ (934,407) | $ (921,938) | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Stock option exercise (in shares) | 0 | ||||||||||||||||||||||
Stock-based compensation | 139,798 | $ 139,798 | |||||||||||||||||||||
Net loss | (2,746,021) | (2,746,021) | |||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 9,677,000 | 21,123,000 | 30,800,000 | ||||||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 1,000 | $ 497,000 | $ (3,680,000) | $ (3,182,000) | $ 2,000 | $ 12,256,000 | $ 12,258,000 | $ 3,000 | 12,753,000 | (3,680,428) | 9,076,000 | ||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||
Temporary equity, carrying amount, ending balance | $ 5,203,000 | $ 992,000 | $ 6,063,000 | $ (5,203,000) | $ (992,000) | $ (6,063,000) | 12,258,132 | ||||||||||||||||
Temporary equity, carrying amount, beginning balance at Dec. 31, 2019 | 5,203,000 | 992,000 | 6,063,000 | (5,203,000) | (992,000) | (6,063,000) | 12,258,132 | ||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||
Temporary equity, carrying amount, ending balance | $ 5,203,000 | $ 992,000 | $ 6,063,000 | $ (5,203,000) | $ (992,000) | $ (6,063,000) | 12,258,132 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Issuance of preferred shares, net (in shares) | 0 | 0 | 0 | 2,470,000 | |||||||||||||||||||
Issuance of preferred shares, net | $ 0 | $ 0 | $ 0 | $ 0 | 4,880,000 | 0 | 4,880,000 | ||||||||||||||||
Stock-based compensation | 19,000 | 19,000 | |||||||||||||||||||||
Net loss | (818,000) | (818,000) | |||||||||||||||||||||
Net unrealized loss on cash flow hedges, net of tax | 0 | ||||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 33,270,000 | ||||||||||||||||||||||
Ending balance at Mar. 31, 2020 | $ 3,000 | 17,652,000 | (4,498,000) | 13,157,000 | |||||||||||||||||||
Temporary equity, shares outstanding, beginning balance (in shares) at Dec. 31, 2019 | 2,770,000 | 392,000 | 1,483,000 | (2,770,000) | (392,000) | (1,483,000) | |||||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Dec. 31, 2020 | 2,770,000 | 392,000 | 2,632,000 | 5,131,000 | (2,770,000) | (392,000) | (2,632,000) | (5,131,000) | |||||||||||||||
Temporary equity, carrying amount, beginning balance at Dec. 31, 2019 | $ 5,203,000 | $ 992,000 | $ 6,063,000 | $ (5,203,000) | $ (992,000) | $ (6,063,000) | 12,258,132 | ||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||
Temporary equity, carrying amount, ending balance | $ 5,203,000 | $ 992,000 | $ 6,063,000 | $ (5,203,000) | $ (992,000) | $ (6,063,000) | 12,258,132 | ||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 9,677,000 | 21,123,000 | 30,800,000 | ||||||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ 1,000 | 497,000 | (3,680,000) | (3,182,000) | $ 2,000 | 12,256,000 | 12,258,000 | $ 3,000 | 12,753,000 | (3,680,428) | $ 9,076,000 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Stock option exercise (in shares) | 73,750 | 73,750 | |||||||||||||||||||||
Stock option exercise | $ 7 | 34,663 | $ 34,670 | ||||||||||||||||||||
Stock-based compensation | 153,897 | 153,897 | |||||||||||||||||||||
Net loss | (17,447,705) | (17,447,705) | |||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 9,750,000 | 34,711,000 | 44,461,000 | ||||||||||||||||||||
Ending balance at Dec. 31, 2020 | $ 1,000 | 686,000 | (21,128,000) | (20,441,000) | $ 3,000 | 45,204,000 | 45,207,000 | $ 4,000 | 45,890,000 | (21,128,133) | 24,766,000 | ||||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 33,270,000 | ||||||||||||||||||||||
Ending balance at Mar. 31, 2020 | $ 3,000 | 17,652,000 | (4,498,000) | 13,157,000 | |||||||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Dec. 31, 2020 | 2,770,000 | 392,000 | 2,632,000 | 5,131,000 | (2,770,000) | (392,000) | (2,632,000) | (5,131,000) | |||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 9,750,000 | 34,711,000 | 44,461,000 | ||||||||||||||||||||
Ending balance at Dec. 31, 2020 | $ 1,000 | $ 686,000 | $ (21,128,000) | $ (20,441,000) | $ 3,000 | $ 45,204,000 | $ 45,207,000 | $ 4,000 | 45,890,000 | (21,128,133) | 24,766,000 | ||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||
Temporary equity, carrying amount, ending balance | $ 5,203,000 | $ 992,000 | $ 10,942,000 | $ 28,069,000 | $ (5,203,000) | $ (992,000) | $ (10,942,000) | $ (28,069,000) | 45,207,530 | ||||||||||||||
Temporary equity, carrying amount, beginning balance at Dec. 31, 2020 | 5,203,000 | 992,000 | 10,942,000 | 28,069,000 | (5,203,000) | (992,000) | (10,942,000) | (28,069,000) | 45,207,530 | ||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||||
Temporary equity, carrying amount, ending balance | $ 5,203,000 | $ 992,000 | $ 10,942,000 | $ 28,069,000 | $ (5,203,000) | $ (992,000) | $ (10,942,000) | $ (28,069,000) | 45,207,530 | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||
Business Combination and PIPE Shares, net (in shares) | 53,361,000 | ||||||||||||||||||||||
Business Combination and PIPE Shares, net | $ 6,000 | 433,521,000 | 433,527,000 | ||||||||||||||||||||
Conversion of Private Warrants | 5,819,000 | 5,819,000 | |||||||||||||||||||||
Stock option exercise (in shares) | 103,000 | ||||||||||||||||||||||
Stock option exercise | 35,000 | 35,000 | |||||||||||||||||||||
Stock-based compensation | 6,287,000 | 6,287,000 | |||||||||||||||||||||
Net loss | (28,515,000) | (28,515,000) | |||||||||||||||||||||
Net unrealized loss on cash flow hedges, net of tax | $ (669,000) | (669,000) | |||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 97,925,000 | ||||||||||||||||||||||
Ending balance at Mar. 31, 2021 | $ 10,000 | $ 491,552,000 | $ (49,643,000) | $ (669,000) | $ 441,250,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Activities | ||
Net loss | $ (28,515,000) | $ (818,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of Private Warrants | (9,826,000) | 0 |
Deferred income tax provision | 2,013,000 | |
Depreciation and amortization | 1,802,000 | 21,000 |
Stock-based compensation expense | 6,287,000 | 19,000 |
Rent expense in excess of rent payments | 19,000 | |
Interest accrual with a related party | 0 | 2,000 |
Amortization of development fee with a related party | 0 | (134,000) |
Changes in operating assets and liabilities | ||
Accounts receivable | (1,182,000) | |
Inventory | (1,516,000) | |
Prepaid expenses and other current assets | (3,133,000) | 2,000 |
Other assets, net | (5,993,000) | (20,000) |
Accounts payable | 8,000 | (98,000) |
Accrued expenses | 3,694,000 | 52,000 |
Other current liabilities | (42,000) | 21,000 |
Other non-current liabilities | 227,000 | |
Net cash used in operating activities | (36,157,000) | (953,000) |
Investing Activities | ||
Purchases of property and equipment | (11,183,000) | (83,000) |
Purchases of property and equipment from a related party | (122,911,000) | |
Advances on equipment | (444,000) | |
Net cash used in investing activities | (134,538,000) | (83,000) |
Financing Activities | ||
Proceeds from Business Combination and PIPE shares, net | 448,500,000 | |
Payments on financing obligation to a related party | (2,089,000) | |
Proceeds from stock option exercise | 35,000 | |
Issuance of preferred stock, net | 0 | 4,880,000 |
Net cash provided by financing activities | 446,446,000 | 4,880,000 |
Change in cash and cash equivalents | 275,751,000 | 3,844,000 |
Cash and Cash Equivalents | ||
Beginning of period | 21,908,907 | 6,031,270 |
End of period | 297,660,000 | 9,875,000 |
Non-cash Activities: | ||
Fixed assets purchases in accounts payable | 20,313,000 | |
Fixed assets purchases in accrued liabilities | 1,408,000 | |
Operating lease right-of-use assets and liabilities | $ 735,000 | $ 30,000 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2021 | |
Description of Business | |
Description of Business | 1. Description of Business AppHarvest was founded on January 19, 2018 and, together with its subsidiaries, is a sustainable food company creating a resilient and scalable ecosystem of applied technology greenhouses to serve the rapidly growing consumer demand for fresh, chemical-free, non-GMO fruits, vegetables and related products. AppHarvest is operating and building some of the largest and most advanced agricultural facilities in the world. AppHarvest combines conventional agricultural techniques with the latest in controlled environment agriculture (“CEA”) technology to grow high-quality fruits and vegetables throughout the year. AppHarvest’s vision is to create America’s AgTech capital from within Appalachia and provide better produce, better farming practices, and better jobs. Prior to October 2020, AppHarvest’s operations were limited to organizing and staffing, business planning, raising capital, and acquiring and developing properties for CEA. In October 2020, AppHarvest partially opened its first CEA facility in Morehead, Kentucky, which AppHarvest estimates can cultivate more than 720,000 tomato plants with an approximate yield of more than 40 million pounds per year. AppHarvest harvested its first crop of beefsteak tomatoes in January 2021 and began harvesting its first crop of tomatoes on the vine in March 2021. AppHarvest’s Morehead CEA facility has been fully operational since March 2021 and AppHarvest is currently constructing two additional CEA facilities in Berea and Richmond, both in Madison County, Kentucky. AppHarvest is organized as a single operating segment. Substantially all of the assets and operations of AppHarvest are located in the United States (“U.S.”). Basis of Presentation On January 29, 2021, (the “Closing Date”), Novus Capital Corporation (“Novus”), a special purpose acquisition company, consummated the business combination agreement and plan of reorganization (the “Business Combination Agreement”) dated September 2020, by and among ORGA, Inc., a wholly owned subsidiary of Novus (“Merger Sub”), and AppHarvest Operations, Inc., a Delaware corporation (f/k/a AppHarvest, Inc.) (“Legacy AppHarvest”). Pursuant to the terms of the Business Combination Agreement, a business combination between Novus and Legacy AppHarvest was effected through the merger of Merger Sub with and into Legacy AppHarvest, with Legacy AppHarvest surviving the merger as a wholly-owned subsidiary of Novus (the “Merger” and, collectively with the other transactions described in the Business Combination Agreement, the “Business Combination”). On the Closing Date, Novus changed its name to AppHarvest, Inc. (the “Company”, “we”, “our” or “AppHarvest”). Pursuant to the Business Combination Agreement, the Merger was accounted for as a reverse recapitalization (the “Reverse Recapitalization”) in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) . Under this method of accounting, Novus is treated as the “acquired” company and Legacy AppHarvest is treated as the acquirer for financial reporting purposes. The Reverse Recapitalization was treated as the equivalent of Legacy AppHarvest issuing stock for the net assets of Novus, accompanied by a recapitalization. The net assets of Novus are stated at historical cost, with no goodwill or other intangible assets recorded. Legacy AppHarvest was determined to be the accounting acquirer based on the following predominant factors: · Legacy AppHarvest stockholders have the largest portion of voting rights in the Company; · The Board and Management are primarily composed of individuals associated with Legacy AppHarvest; and · Legacy AppHarvest was the larger entity based on historical operating activity and Legacy AppHarvest had the larger employee base at the time of the Business Combination. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Legacy AppHarvest. The shares and corresponding capital amounts and losses per share, prior to the Business Combination, have been retroactively restated based on shares reflecting the exchange ratio established in the Business Combination. Activity within the Statements of Stockholders’ Equity for the issuance and repurchases of Legacy AppHarvest redeemable convertible preferred stock were also retroactively converted to Legacy AppHarvest common stock. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial reporting and Securities and Exchange Commission regulations. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Results of operations for the interim periods are not necessarily indicative of the results to be expected for the full year ended December 31, 2021. A description of the Company’s significant accounting policies is included in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2020. These unaudited condensed consolidated financial statements should be read in conjunction with the Legacy AppHarvest December 31, 2020 audited consolidated financial statements and the accompanying notes. The unaudited condensed consolidated financial statements include the accounts of the Company and its controlled subsidiaries. All significant intercompany accounts and transactions have been eliminated. Certain prior period balances have been reclassified to conform to the current period presentation in the unaudited condensed consolidated financial statements and the accompanying notes. All dollar and share amounts are in thousands, except per share amounts, unless otherwise noted. Share and per share amounts are presented on a post-conversion basis for all periods presented, unless otherwise specified. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates in Condensed Consolidated Financial Statements In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the recording of revenue, valuation of inventory, the valuation of stock-based compensation, the valuation of private warrants, lease accounting, the useful life of fixed assets and income taxes. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the global volatility and general market disruption resulting from the global outbreak of the novel coronavirus disease (“COVID-19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. Accounts Receivables Accounts receivable consist of amounts due from customers in connection with our normal business activities and are carried at sales value less allowance for doubtful accounts. The allowance for doubtful accounts is established to reflect the expected losses of accounts receivable based on past collection history, age, account payment status compared to invoice payment terms and specific individual risks identified. Write-offs are recorded against the allowance for doubtful accounts when all reasonable efforts for collection have been exhausted. The provision at March 31, 2021 and December 31, 2020 did not have a material impact on the condensed consolidated financial statements. Convertible Preferred Stock Prior to the Business Combination, the Company recorded shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company applied the guidance in Accounting Standards Codification (“ASC”) 480-10-S99-3A and therefore classified all of its outstanding redeemable convertible preferred stock as temporary equity. The redeemable convertible preferred stock was recorded outside of stockholders’ equity because, in the event of certain deemed liquidation events considered not solely within the Company’s control, such as a merger, acquisition and sale of all or substantially all of the Company’s assets, the preferred stock would become redeemable at the option of the holders. In the event of a change of control of the Company, proceeds received from the sale of such shares would be distributed in accordance with the liquidation preferences set forth in the Company’s Amended and Restated Certificate of Incorporation then in effect. All convertible preferred stock previously classified as temporary equity was retroactively adjusted and reclassified to permanent equity as a result of the Business Combination. As a result of the Business Combination, each share of redeemable convertible preferred stock that was then issued and outstanding was automatically converted into Legacy AppHarvest Common Stock, such that each converted share of preferred stock was no longer outstanding and ceased to exist. Each share of Legacy AppHarvest common stock, including the Legacy AppHarvest common stock issued upon conversion of Legacy AppHarvest preferred stock, was converted into and exchanged for 2.1504 (the “Exchange Ratio”) shares of the Company’s common stock.The Exchange Ratio was established pursuant to the terms of the Business Combination Agreement. During the three-month period ended March 31, 2020, Legacy AppHarvest issued shares of Legacy AppHarvest Series B redeemable convertible preferred stock to new and existing investors for net proceeds of $4,880. Warrants At March 31, 2021, there were 13,250 warrants to purchase Common Stock outstanding, consisting of 10,500 public warrants (“Public Warrants”) and 2,750 private warrants (“Private Warrants”), (collectively, “Warrants”) held by the Novus initial stockholders. Each warrant entitles the registered holder to purchase one share of Common Stock at a price of $11.50 per share. The warrants expire on January 29, 2026, or earlier upon redemption or liquidation. The Company may redeem the Public Warrants: · In whole and not in part; · At a price of $0.01 per Warrant; · Upon not less than 30 days’ prior written notice of redemption; · If, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and · if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The Public Warrants were determined to be equity classified in accordance with U.S. GAAP. The Private Warrants are identical to the Public Warrants except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As a result of the provisions in the warrant agreement that provide for differences in the mechanics of a cashless exercise dependent upon the characteristics of the warrant holder, and because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provisions preclude the Private Warrant from being classified in equity. Accordingly, the Private Warrants are classified as a liability and remeasured at fair value at each reporting date. The Company accounts for its Private Warrants in accordance with ASC 815-40, under which the Company has determined that the Private Warrants are recognized as liabilities at fair value and subject to re-measurement at each balance sheet date until exercised. Changes in fair value of the Private Warrants is recognized in the Company’s condensed consolidated statement of operations and comprehensive loss. The fair value of the Private Warrants is estimated at each measurement date using a Black-Scholes option pricing model. See Note 5- Fair Value Measurements for inputs used in calculating the estimated fair value. Derivative Financial Instruments Derivative financial instruments are used to manage foreign currency exchange risks. The financial instruments used by the Company are straight-forward, non-leveraged instruments. The counterparties to these financial instruments are financial institutions with strong credit ratings. The Company maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit ratings of these institutions. For all transactions designated as hedges, the hedging relationships are formally documented at the inception and on an ongoing basis in offsetting changes in cash flows of the hedged transaction. The Company records derivative financial instruments on the condensed consolidated balance sheets as either an asset or liability measured at its fair value. Changes in a derivative's fair value (i.e. unrealized gains or losses) are recorded each period in earnings unless the derivative qualifies as a hedge on future cash flows. Gains and losses related to a hedge are either recognized in income immediately to offset the gain or loss on the hedged item, or deferred and recorded in the stockholders' equity section of the condensed consolidated balance sheets as a component of accumulated other comprehensive loss (“AOCL”) and subsequently recognized in the condensed consolidated statements of operations and comprehensive loss when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge, if any, is recognized in income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded to net income immediately. New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 is part of the FASB’s overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes certain exceptions to the general principles of ASC 740, Income Taxes, in order to reduce the cost and complexity of its application in the areas of intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date losses in interim periods and other areas within ASC 740. The Company adopted ASU 2019-12 on January 1, 2021 and the adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the condensed consolidated financial statements . | (2) Summary of Significant Accounting Policies The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and are presented in U.S. Dollars. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and an Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). a) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, the valuation of instruments issued for financing and stock-based compensation, lease accounting and income taxes. The Company utilizes estimates and assumptions in determining the fair value of its Common Stock and other equity instruments. The fair value was determined using valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation . The Company granted stock options at exercise prices not less than the fair value of its Common Stock, as determined by the Board of Directors contemporaneously at the date such grants were made, with input from management. The fair value of Common Stock at the grant date was determined to have been higher in connection with retrospective fair value assessments for financial reporting purposes. The exercise prices of the stock option awards affected by the retrospective fair value assessment were not modified. The Company’s retrospective fair value assessment estimated the fair value of the Company’s Common Stock based on a number of objective and subjective factors, including external market conditions affecting the Company’s industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s Common Stock at the time, and the likelihood of achieving a Deemed Liquidity Event, as defined, such as a public offering or sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of Common Stock and other equity instruments at each valuation date. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the impact from the global outbreak of the novel coronavirus disease (“COVID‑19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. b) Principles of Consolidation The Company consolidates entities in which it holds a controlling financial interest. For voting interest entities, the Company is considered to hold a controlling financial interest when it is able to exercise control over the investees’ operating and financial decisions. The Company does not have interests in any entities that would be considered variable interest entities. All significant intercompany balances and transactions have been eliminated in consolidation. c) Cash and Cash Equivalents The Company considers all highly liquid, short-term investments with an original maturity date of three months or less to be cash equivalents. The Company deposits its cash and cash equivalents in a commercial bank. From time to time, cash balances in these accounts exceed the Federal Deposit Insurance Corporation insured limits. The Company mitigates exposure to credit risk by placing cash and cash equivalents with highly rated financial institutions. To date, the Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk on its cash and cash equivalents. At December 31, 2020, cash and cash equivalents includes $5,646,392 of cash restricted for future minimum lease payments and operating and maintenance costs associated with the Company’s lease with a related party (see Note 8(a)). The Company had no restricted cash balances at December 31, 2019. d) Fair Value Measurements and Disclosures Carrying values of cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses, other current liabilities, and notes payable approximate fair values because of their short-term nature. There were no material assets or liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and 2019. e) Inventories Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Finished goods inventories represent costs associated with boxed produce not yet sold. Growing crop inventories primarily represent the costs associated with growing produce within the Company’s controlled environment agriculture facilities. Materials and supplies primarily represent growing and packaging supplies. Inventory costs are comprised of the purchase and transportation cost plus production labor and overhead. f) Long-Lived Assets Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for additions or renewals and improvements are capitalized; expenditures for maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its economic life are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: · Building: 25 years · Leasehold and building improvements: the lessor of the lease term or 4 to 10 years. · Machinery: 5 to 10 years · Equipment: 3 to 10 years Assets held under financing leases are recorded at the net present value of the minimum lease payments, net of incentives provided by the lessor. Depreciation expense for assets held under financing leases is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. If the related lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise or the lease transfers ownership of the underlying asset to the Company by the end of the lease term, depreciation expense is computed over the estimated useful life of the asset. Impairment Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of a long-lived asset or asset group may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company did not record any impairment losses for the years ended December 31, 2020 and 2019. g) Leases The Company determines if an arrangement contains a lease at inception. The right-of-use assets, net and liabilities associated with leases are recognized based on the present value of the future minimum lease payments over the lease term. The Company uses its incremental borrowing rate at the recognition date in determining the present value of future payments for leases that do not have a readily determinable implicit rate. Lease terms reflect options to extend or terminate the lease when it is reasonably certain that the option will be exercised. For leases that include residual value guarantees or payments for terminating the lease, the Company includes these costs in the lease liability when it is probable such costs will be incurred. Right-of-use assets and obligations for short-term leases (leases with an initial term of 12 months or less) are not recognized in the consolidated balance sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. When contracts contain lease and non-lease components, the Company generally accounts for both components as a single lease component. h) Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of December 31, 2020 and 2019, the Company does not have any uncertain tax positions. The Company’s policy is to recognize interest and penalties on uncertain tax positions as income tax expense. i) Retirement Plans The AppHarvest 401(k) Plan provides for matching contributions. The Company incurred $105,007 and $11,154 of expenses associated with the 401(k) Plan for the years ended December 31, 2020 and 2019, respectively. j) Stock-Based Compensation The Company recognizes in its Consolidated Statements of Operations and Comprehensive Loss the grant-date fair value of stock options, restricted stock awards, and restricted stock units issued to employees and directors. All the Company’s stock option and restricted stock awards are subject only to service-based vesting conditions. Stock-based compensation expense related to stock options and restricted stock awards is recognized on a straight-line basis over the associated service period of the award, which is generally the vesting term. Restricted stock unit awards are subject to both service- and performance-based vesting conditions. The Company recognizes forfeitures of awards as they occur. The Company estimates the fair value of its restricted stock units and restricted stock awards based upon the fair value of the common stock at the date the terms of the awards are mutually agreed upon between the Company and the holder. The Company estimates the fair value of its stock option awards using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (a) the expected stock price volatility, (b) the calculation of expected term of the award, (c) the risk-free interest rate, and (d) expected dividends. Due to the lack of a public market for the trading of the Company’s Common Stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded and have similar characteristics to the Company. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 107, Share-Based Payment , to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted to employees. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among its employee population. The expected term of the stock option awards granted historically was assumed to be the weighted average between the options contract life and the vesting term of the underlying award (based upon the underlying arrangement). The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. k) Development Fee Income from a Related Party The Company recognizes development fee income related to indirect limited oversight services it performs in connection with the greenhouse construction site in Morehead, Kentucky (see Note 8(a)). The development fee of $750,000 was received in May 2019 and was recognized on a straight-line basis, consistent with the level of service, through October 2020, the date when the Morehead Facility reached substantial completion. l) Net Loss Per Common Share The Company’s basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of Common Stock outstanding for the period. The diluted net loss per common share is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, stock options to purchase Common Stock, restricted stock units and redeemable convertible preferred stock are considered to be Common Stock equivalents but have been excluded from the calculation of diluted net loss per common share as their effect is anti-dilutive. m) Advertising Advertising costs are expensed when incurred. Advertising expense for the years ended December 31, 2020 and 2019 was $142,305 and $40,217, respectively, and is included in selling, general, and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. n) Segment Information The Company is organized as a single operating segment. All the assets and operations of the Company are located in the United States (“U.S.”) o) Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events. Comprehensive loss was equal to net loss for all periods presented. p) Distribution Agreement On March 28, 2019, the Company entered into a Purchase and Marketing Agreement (the “Mastronardi Morehead Agreement”) with Mastronardi Produce Limited (“Mastronardi”) pursuant to which Mastronardi will be the sole and exclusive marketer and distributor of all tomatoes, cucumbers, peppers, berries and leafy greens produced at the Company’s controlled environment agriculture facility in Morehead, Kentucky that meet certain quality standards (collectively, the “Products”). Under the terms of the Mastronardi Morehead Agreement, the Company is responsible for growing, producing, packing, and delivering the Products to Mastronardi, and Mastronardi is responsible for marketing, branding and distributing the Products to its customers. Mastronardi will pay the Company market prices for the Products that are consistent with the best and highest prices available during the duration of the applicable growing season for like kind U.S. Department of Agriculture Grade No. 1 products. Mastronardi will set the market price for the Products and will pay over to the Company the gross sale price of the Product sold by Mastronardi, less a marketing fee and Mastronardi’s costs incurred in the sale and distribution of the Products. If Mastronardi rejects, returns or otherwise refuses Products for failure to meet certain quality standards, the Company has the right, at its cost and expense, to sell or otherwise dispose of the Products, subject to certain conditions. The Mastronardi Morehead Agreement has a term of 10 years. The Company has a limited, one-time right to terminate the Mastronardi Morehead Agreement if certain return targets are not reached. During the term of the Mastronardi Morehead Agreement, Mastronardi has a right of first refusal to enter into similar arrangements with regard to any additional growing facilities the Company established in Kentucky or West Virginia. As of December 31, 2020, the Company has commenced commercial production, but has not yet sold any Product to Mastronardi. Once product distribution commences, the Company will derive substantially all of its revenue from sales to Mastronardi. q) Deferred offering costs Deferred offering costs, which primarily consist of direct incremental legal and accounting fees related to the Merger and related equity issuances, are capitalized. The deferred offering costs will be offset against Merger and equity issuance proceeds upon the consummation of the offering. Deferred offering costs were $1,126,619 at December 31, 2020, and reflected in Other assets in the Consolidated Balance Sheets. No amounts were incurred or deferred as of December 31, 2019. r) Selling, general and administrative expenses Selling, general and administrative expenses primarily consist of payroll and payroll related expenses, stock-based compensation, legal and professional costs, rent expense, marketing and advertising, communications, insurance and various other personnel and office related costs. During the year ended December 31, 2020, $2,213,906 of start-up expenses related to pre-commencement commercial activities at the controlled environment agriculture facility in Morehead, Kentucky were expensed as incurred by the Company and recorded within selling, general and administrative expenses within the consolidated statement of operations and comprehensive loss. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2021 | |
Business Combination | |
Business Combination | 3. Business Combination As discussed in Note 1, on January 29, 2021, Novus completed the Business Combination with Legacy AppHarvest through the Merger, with Legacy AppHarvest surviving the Merger as a wholly-owned subsidiary of the Company. Upon the consummation of the Business Combination, each share of Legacy AppHarvest common stock issued and outstanding was canceled and converted into the right to receive 2.1504 shares of the Company’s common stock. Upon the closing of the Business Combination, the Company’s certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of all classes of capital stock to 760,000 shares, of which 750,000 shares were designated common stock, $0.0001 par value per share, and 10,000 shares designated Preferred Stock, $0.0001 par value per share. Each option to purchase Legacy AppHarvest common stock that was outstanding immediately prior to the Business Combination, whether vested or unvested, was converted into an option to purchase a number of shares of the Company’s common stock equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Legacy AppHarvest common stock subject to such Legacy AppHarvest option and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Legacy AppHarvest option, divided by (B) the Exchange Ratio. Each restricted stock unit awarded by Legacy AppHarvest that was outstanding immediately prior to the Business Combination, whether vested or unvested, was converted into an award of restricted stock units to acquire a number shares of the Company’s common stock equal to the product (rounded down to the nearest whole number) of (1) the number of shares of Legacy AppHarvest common stock subject to the Legacy AppHarvest restricted stock unit award and (2) the Exchange Ratio. In connection with the execution of the Business Combination Agreement, the Company entered into separate subscription agreements (the “Subscription Agreements”) with certain investors (each a “Subscriber”), pursuant to which the Subscribers agreed to purchase, and the Company agreed to sell to the Subscribers, an aggregate of 37,500 shares of common stock (the “PIPE Shares”), for a purchase price of $10.00 per share and an aggregate purchase price of $375,000, in a private placement pursuant to the Subscription Agreements (the “PIPE”). The PIPE investment closed concurrently with the closing of the Business Combination. Prior to the Business Combination, Novus had outstanding 10,000 Public Warrants and 3,250 Private Warrants which were listed on the Nasdaq Capital Market under the symbol “NOVSW.” Upon the closing of the Business Combination, they became listed on the Nasdaq Global Select Market under the symbol “APPHW.” The Warrants remain subject to the same terms and conditions as prior to the Business Combination. Also immediately prior to the closing of the Business Combination, Novus assumed the Legacy AppHarvest convertible note (the “Convertible Note”). Upon completion of the Business Combination, the outstanding principal and unpaid accrued interest due on the Legacy AppHarvest Convertible Note was converted into an aggregate of 3,242 shares of common stock, and the converted note was no longer outstanding, and ceased to exist. See Note 9 Note Payable with a Related Party. Upon consummation of the Business Combination and the closing of the PIPE, the most significant change in Legacy AppHarvest’s financial position and results of operations was a total net increase in cash and cash equivalents of approximately $435,239, including $375,000 in gross proceeds from the PIPE. The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Novus was treated as the “acquired” company for financial reporting purposes. See Note 1 Description of Business for further details. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Legacy AppHarvest issuing stock for the net assets of Novus, accompanied by a recapitalization. The net assets of Novus are stated at historical cost, with no goodwill or other intangible assets recorded. The following table reconciles the elements of the Business Combination to the unaudited condensed consolidated statements of stockholders’ equity and cash flows for the three months ended March 31, 2021: Recapitalization Cash-Novus trust and cash, net of redemptions $ 99,896 Cash-PIPE financing 375,000 Non-cash Convertible Note conversion 30,808 Non-cash net liabilities assumed from Novus (2,850) Less: Fair value of assumed common stock Private Warrants (45,565) Less: transaction costs allocated to equity (23,762) Net impact on total stockholders’ equity 433,527 Less: cash payments for transaction costs at Closing (2,634) Less: non-cash Convertible Note conversion (30,808) Add: non-cash net liabilities assumed from Novus 2,850 Add: non-cash fair value of assumed common stock Private Warrants 45,565 Net impact on net cash provided by financing activities 448,500 Less: transaction costs included in net cash used in operating activities (a) (13,261) Total net increase in cash and cash equivalents $ 435,239 (a) Including transaction costs in the amount of $2,887 allocated to the Private Warrants. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition | |
Revenue Recognition | 4. Revenue Recognition The Company began recognizing revenue in connection with its first harvest during the three months ended March 31, 2021, and generated no revenues prior to this period. Substantially all of the Company’s revenues are generated from the sale of tomatoes under an agreement with one customer, Mastronardi Produce Limited (“Mastronardi”). On March 28, 2019, the Company entered into a Purchase and Marketing Agreement (the “Mastronardi Morehead Agreement”) with Mastronardi pursuant to which Mastronardi will be the sole and exclusive marketer and distributor of all tomatoes, cucumbers, peppers, berries and leafy greens produced at the Company’s CEA facility in Morehead, Kentucky that meet certain quality standards (collectively, the “Products”). Under the terms of the Mastronardi Morehead Agreement, the Company is responsible for growing, producing, packing, and delivering the Products to Mastronardi, and Mastronardi is responsible for marketing, branding and distributing the Products to its customers. Mastronardi will pay the Company market prices for the Products that are consistent with the best and highest prices available during the duration of the applicable growing season for like kind U.S. Department of Agriculture Grade No. 1 products. Mastronardi will set the market price for the Products and will pay the Company the gross sale price of the Product sold by Mastronardi, less a marketing fee and Mastronardi’s costs incurred in the sale and distribution of the Products. If Mastronardi rejects, returns or otherwise refuses Products for failure to meet certain quality standards, the Company has the right, at its cost and expense, to sell or otherwise dispose of the Products, subject to certain conditions. The Mastronardi Morehead Agreement has a term of 10 years. The Company has a limited, one-time right to terminate the Mastronardi Morehead Agreement if certain return targets are not reached. During the term of the Mastronardi Morehead Agreement, Mastronardi has a right of first refusal to enter into similar arrangements with regard to any additional growing facilities the Company establishes in Kentucky or West Virginia. The Company recognizes revenue at a point in time and at the amount it expects to be entitled to be paid when its performance obligation is complete, which is generally when control of the Products is transferred to its customers upon pick-up by the customer or the customer’s agent from the Company’s facilities. Prices for the Company’s Products are based on agreed upon rates with customers and do not include financing components or noncash consideration. Revenue is recorded net of variable consideration, such as commissions and other shipping, handling and marketing costs incurred as defined in the customer agreements. Revenue is also recorded net of provisions for returns and rejections for Products that do not meet quality specifications, with such provisions calculated using historical averages adjusted for any expected changes due to current business conditions. Payment terms are generally 30 days. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. Fair Value Measurements The company categorizes its assets and liabilities into one of three levels based on the assumptions (inputs) used in determining their values, as defined below: · Level 1 : Unadjusted quoted prices in active markets for identical assets or liabilities. · Level 2 : Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 : Unobservable inputs reflecting management’s assumptions about the inputs used in pricing the asset or liability. The table below presents the Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for each measurement: Fair Value as of March 31, 2021 (In thousands) Balance Sheet Account Level 1 Level 2 Level 3 Total Assets: Foreign currency options Other assets, net $ — $ 166 $ — $ 166 Total assets $ — $ 166 $ — $ 166 Liabilities: Foreign currency forward contracts Other current liabilities $ — $ 798 $ — $ 798 Private Warrants Private Warrant liabilities — 29,920 — 29,920 Total liabilities $ — $ 30,718 $ — $ 30,718 The Company’s condensed consolidated financial instruments include foreign currency forward and option contracts that are measured at fair value based on observable market transactions as of the reporting date. The fair values of the outstanding derivative instruments were measured using valuations based upon quoted prices for similar assets and liabilities in active markets (Level 2) and are valued by reference to similar financial instruments, adjusted for terms specific to the contracts. See Note 11. Derivative Financial Instruments for more information on the Company’s use of financial instruments. The Private Warrant liabilities are determined using a Black-Scholes option pricing model, a Level 2 valuation. The significant inputs to the Private Warrant valuation are as follows: On the Closing Date of the Business Combination March 31, 2021 Exercise price $ 11.50 $ 11.50 Stock price $ 24.95 $ 18.30 Volatility 25.0 % 55.8 % Remaining term in years 5.00 4.83 Risk-free rate 0.45 % 0.92 % Dividend yield — — The following table summarizes the private warrant activity for the three months ended March 31, 2021: (In thousands) Fair value of Private Warrants on the Closing Date $ 45,565 Fair value of Private Warrants converted to Public Warrants (5,819) Change in fair value of Private Warrants (9,826) Fair value of Private Warrants outstanding as of March 31, 2021 $ 29,920 The Company did not have any assets or liabilities subject to fair value measurements on a recurring basis as of December 31, 2020. The Warrants are deemed equity instruments for income tax purposes, and accordingly, there is no tax accounting relating to changes in the fair value of the Private Warrants recognized. The changes in the fair value of the Private Warrants may be material to our future operating results. The Company measures certain assets and liabilities at fair value on a non-recurring basis. Assets and liabilities that are measured at fair value on a non-recurring basis include long-lived assets which would generally be recorded at fair value as a result of an impairment charge. Assets acquired and liabilities assumed as part of a business combination or asset acquisition are also measured at fair value on a non-recurring basis during the measurement period allowed by the accounting standards codification guidance for business combinations, when applicable. Carrying values of cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other current assets, accounts payable, accrued expenses, and other current liabilities approximate fair values because of their short-term nature. |
Inventories
Inventories | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Inventories | 6. Inventories Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Finished goods inventories represent costs associated with boxed produce not yet sold. Growing crop inventories primarily represent the costs associated with growing produce within the Company’s CEA facilities. Materials and supplies primarily represent growing and packaging supplies. Inventory costs are comprised of the purchase and transportation cost plus production labor and overhead. Inventories consisted of the following: March 31, 2021 December 31, 2020 Growing crops $ 3,275 $ 2,606 Raw materials 1,597 781 Finished goods 31 — Total inventories, net $ 4,903 $ 3,387 | (4) Inventories, net Inventories, net consisted of the following at December 31, 2020: Finished goods $ — Raw materials Growing crops Total inventories, net $ |
Property and Equipment
Property and Equipment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | 7. Property and Equipment Property and equipment at cost and accumulated depreciation are as follows: March 31, 2021 December 31, 2020 Land $ 19,449 $ 7,277 Buildings 76,165 57,362 Machinery and equipment 43,357 9,581 Construction in progress 50,824 78,174 Leasehold improvements 2,320 871 Less: accumulated depreciation (1,153) (620) Total property and equipment, net $ 190,962 $ 152,645 Depreciation expense for the three months ended March 31, 2021 and 2020 was $1,772 and $21, respectively. During the three months ended March 31, 2021, the Company continued construction on the two additional CEA facilities in Berea, Kentucky and Richmond, Kentucky. The Company also acquired the Morehead CEA facility and related property from Equilibrium Controlled Environment Foods Fund, LLC and its affiliates (“Equilibrium”), a related party (See Note 10(a)). The purchase price for the Morehead CEA facility was $125,000, which was equal to a multiple of Equilibrium’s cost of acquire, develop and construct the Morehead CEA facility. The Morehead CEA facility was placed in service during the three months ended March 31, 2021. As of December 31, 2020, building cost included $56,748 related to Morehead CEA facility right-to-use assets held under a finance lease with Equilibrium. | (5) Property and Equipment, net Property and equipment at cost and accumulated depreciation at December 31, 2020 and 2019 are as follows: December 31, 2020 Original Accumulated Assets cost depreciation net Land $ 3,678,296 $ — $ 3,678,296 Land with a related party – see Note 8(a) 3,599,324 — 3,599,324 Buildings 57,362,041 (436,209) 56,925,832 Construction in progress 23,525,658 — 23,525,658 Construction in progress with a related party – see Note 8(a) 54,648,634 — 54,648,634 Automobiles 151,898 (14,791) 137,107 Leasehold improvements 871,259 (17,660) 853,599 Equipment 1,803,347 (68,074) 1,735,273 Machinery 7,625,332 (83,720) 7,541,612 $ 153,265,789 $ (620,454) $ 152,645,335 December 31, 2019 Original Accumulated Assets cost depreciation net Land with a related party – see Note 8(a) $ 3,599,324 $ — $ 3,599,324 Equipment 25,399 (7,235) 18,164 Machinery 95,512 (11,926) 83,586 $ 3,720,235 $ (19,161) $ 3,701,074 Depreciation expense for property and equipment for the year ended December 31, 2020 and 2019 was $175,843 and $16,129, respectively. Building cost includes $56,747,769 related to right-to-use assets held under a finance lease with a related party (see Note 8(a)). |
Accrued Expenses
Accrued Expenses | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | ||
Accrued Expenses | 8. Accrued Expenses Accrued expenses are as follow: March 31, 2021 December 31, 2020 Payroll and related $ 2,237 $ 563 Professional service fees 2,284 693 Construction costs 1,408 2,574 Other accrued liabilities 935 352 Incentive compensation 864 — Utilities 476 384 Interest on convertible debt with a related party — 618 Total accrued expenses $ 8,204 $ 5,184 | (3) Accrued Expenses Accrued expenses consist of the following as of December 31: 2020 2019 Accrued construction costs $ $ — Accrued professional service fees $ 693,206 $ 35,792 Accrued interest on convertible debt with a related party 618,082 — Accrued payroll 562,641 1,644 Accrued utilities 383,852 — Other accrued liabilities 351,795 11,799 Total accrued expenses $ 5,183,880 $ 49,235 |
Notes Payable with a Related Pa
Notes Payable with a Related Party | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable with a Related Party | 9. Note Payable with a Related Party On September 28, 2020, the Company entered into a convertible promissory note with Inclusive Capital Partners Spring Master Fund, L.P., a related party, to finance capital investments and operating needs. The Convertible Note had a principal balance of $30,000 and interest at 8.0% per annum. The outstanding principal amount of the Convertible Note and unpaid accrued interest was extinguished at a conversion price equal to $9.50 per share upon the successful closing of the Business Combination. The note principal of $30,000 and accrued interest of $618 were included as current liabilities at December 31, 2020. In connection with the Business Combination on January 29, 2021, the outstanding principal and unpaid accrued interest due was converted into an aggregate 3,242 shares of the Company’s common stock, such that the Convertible Note was no longer outstanding and ceased to exist. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 10. Commitments and Contingencies (a) On March 1, 2021, the Company closed on the Membership Interest Purchase and Sale Agreement (the “MIPSA”) with Equilibrium that was entered into in December 2020, pursuant to which it purchased from Equilibrium 100% of its membership interests in its subsidiary, Morehead Farm LLC. The purchase price for Morehead Farm LLC (“Morehead Farm”) was $125,000 which was equal to a multiple of Equilibrium’s cost to acquire, develop and construct the Morehead Facility. At closing, Morehead Farm LLC, which owns the Morehead facility, became a wholly owned subsidiary of the Company. Concurrent with the closing of the MIPSA the Master Lease Agreement that the Company had entered into on May 13, 2019 with Morehead Farm LLC to lease the Morehead facility and ancillary agreements related thereto, were terminated. As a result, the closing date balances of $66,504 for the financing obligation related to construction in progress assets and $58,496 for the finance lease liability related to the completed portion of the Morehead facility were settled and de-recognized from the Company’s unaudited condensed consolidated balance sheet. (b) The Company’s other lease portfolio is primarily comprised of operating leases for offices. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on whether the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating lease right-of-use assets, net and liabilities are recognized within the condensed consolidated balance sheets based on the present value of lease payments over the lease term. As the implicit rate is generally not readily determinable for most leases, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate reflects the estimated rate of interest that the Company would pay to borrow on a collateralized basis over a similar term in a similar economic environment. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Leases may include renewal options, and the renewal option is included in the lease term if the Company concludes that it is reasonably certain that the option will be exercised. A certain number of the Company’s leases contain rent escalation clauses, either fixed or adjusted periodically for inflation of market rates, that are factored into the calculation of lease payments to the extent they are fixed and determinable at lease inception. For the period ended March 31, 2021 and 2020 the Company recognized $97 and $14, respectively, of operating lease expense in selling, general and administrative expense (“SG&A”) within the unaudited condensed consolidated statement of operations and comprehensive loss. The future minimum rental payments required under the leases for each year of the next five years and in the aggregate thereafter are as follows: Operating leases Remainder of 2021 $ 319 2022 426 2023 415 2024 368 2025 355 2026 and thereafter 729 Total minimum payments required 2,612 Less: imputed interest costs (1) (462) Present value of net minimum lease payments (2) $ 2,150 Weighted-average imputed interest rate 6.32 % Weighted-average remaining lease term 6.3 (1) (2) Period Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 52 $ 10 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 735 $ 30 (c) Agreements with Dalsem The Company entered into agreements with Dalsem Greenhouse Technology, B.V. (“Dalsem”) for the construction of new CEA facilities in Richmond, Kentucky and Berea, Kentucky on November 20, 2020 and December 11, 2020, respectively. Under terms of the agreements, Dalsem will provide certain services related to the design, engineering, procurement, construction, startup and testing of a greenhouse and certain ancillary facilities at each site. Total costs under the agreements are based on actual costs incurred by Dalsem and payments are due upon the completion of certain established project milestones, with a portion of each payment due in Euros and a portion due in U.S. dollars. Either party is entitled to terminate the agreements upon the occurrence of certain events of default and the Company is entitled to terminate the agreements if Dalsem fails to meet certain performance requirements. The Company may also terminate the agreements without cause with written notice and a termination payment to Dalsem. (d) Purchase Commitments There were no purchase commitments that were unrecorded at March 31, 2021 and December 31, 2020, respectively. | (8) Commitments and Contingencies (a) Equilibrium Transactions On April 15, 2019, the Company entered into a mortgage loan with Equilibrium, a related party, to finance the purchase of land from a third party in Morehead, Kentucky (the “Morehead Land”). The loan had a principal balance of $3,481,222 and bore interest at 8.00% per year. On May 13, 2019, the Company entered a series of agreements with Equilibrium, resulting in the sale of the legal entity that was established to purchase the Morehead Land. The net assets of the entity sold to Equilibrium included the land, related permitting and the mortgage note owed to Equilibrium. On that same date, the Company also entered into a Master Lease Agreement (the “Master Lease Agreement”) with Morehead Farm LLC (“Morehead Farm”) for an indoor controlled agriculture facility on a portion of the Morehead Land (the “Morehead Facility”). The Master Lease Agreement had an initial term of 20 years commencing at substantial completion of construction and included a ground lease for the Morehead Land. In October 2020, the Company took occupancy of the completed portion of the Morehead Facility, resulting in lease commencement under the Master Lease Agreement. Lease payments under the Master Lease Agreement consisted of a base rent calculated as a percentage of defined construction costs, certain non-lease costs and rent based on gross revenues generated from the Morehead Facility. Equilibrium maintains an option to sell, and the Company is required to purchase, any excess land not otherwise utilized by the construction of the Morehead Facility at a price equal to the original cost of acquisition. During the term of the Master Lease Agreement, the Company has a right of first refusal to purchase the Morehead Land. The Company has accounted for the transfer of the Morehead Land to Equilibrium in 2019 as a financing transaction. On March 1, 2021, the Company closed on the Membership Interest Purchase and Sale Agreement with Equilibrium that was entered into in December 2020, pursuant to which it purchased from Equilibrium 100% of the membership interests in Morehead Farm (the “Membership Interest Purchase and Sale Agreement”). The purchase price for Morehead Farm was $125,000,055, which was equal to a multiple of Equilibrium’s cost to acquire, develop and construct the Morehead Facility. At closing, Morehead Farm, an Equilibrium subsidiary which owns the Morehead facility, became a wholly owned subsidiary of the Company. Concurrent with the closing of the Membership Interest Purchase and Sale Agreement, the Master Lease Agreement and ancillary agreements related thereto, were terminated. At December 31, 2020, the Company maintains a finance lease liability with Equilibrium of $59,216,485 related to the completed portion of the Morehead Facility and a related right-of-use asset at cost of $56,747,769. At December 31, 2020, the Company also has construction-in-progress assets of $54,648,634, and a corresponding financing obligation of $58,795,309 with Equilibrium for the portion of the Morehead Facility that remains under construction. The Company controls the remaining Morehead Facility construction activities. The finance lease liability and financing obligation related to the Morehead Facility have been recorded within current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2020, since the closing of the Membership Interest Purchase and Sale Agreement occurred within twelve months of the balance sheet date. (b) Other Leases The Company’s other lease portfolio is primarily comprised of operating leases for offices. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on whether the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating lease right-of-use assets, net and liabilities are recognized within the Consolidated Balance Sheets based on the present value of lease payments over the lease term. As the implicit rate is generally not readily determinable for most leases, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate reflects the estimated rate of interest that the Company would pay to borrow on a collateralized basis over a similar term in a similar economic environment. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Leases may include renewal options, and the renewal option is included in the lease term if the Company concludes that it is reasonably certain that the option will be exercised. A certain number of the Company’s leases contain rent escalation clauses, either fixed or adjusted periodically for inflation of market rates, that are factored into the calculation of lease payments to the extent they are fixed and determinable at lease inception. For the year ended December 31, 2020 and 2019, the Company recognized $168,955 and $70,129, respectively, of operating lease expense, including short-term lease expense and variable lease costs, which were immaterial. Rent expense is included in selling, general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss. The future minimum rental payments required under the leases for each year of the next five years ending December 31, and in the aggregate thereafter are as follows: Finance Lease Operating with leases Equilibrium 2021 $ 258,225 $ 59,446,868 2022 280,977 — 2023 270,112 — 2024 276,780 — 2025 264,928 — 2026 and thereafter 549,488 — Total minimum payments required 1,900,510 59,446,868 Less: imputed interest costs (1) (363,694) (230,383) Present value of net minimum lease payments (2) $ 1,536,816 $ 59,216,485 Weighted-average imputed interest rate 6.29 % 4.72 % Weighted-average remaining lease term 6.9 0.2 (1) Represents the amount necessary to reduce net minimum lease payments to present value using actual rate in the lease agreement or the Company’s incremental borrowing rate at lease inception. (2) Included in the Consolidated Balance Sheet as of December 31, 2020 as current lease liability with a related party of $59,216,485, current lease liability with other parties of $166,354, and noncurrent lease liability of $1,370,462. Supplemental Consolidated Statement of Cash Flow information is as follows for the years ended December 31: 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 96,104 $ 37,668 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,441,486 $ 160,948 (c) Agreements with Dalsem The Company entered into agreements with Dalsem Greenhouse Technology, B.V. (“Dalsem”) for the construction of new greenhouse facilities in Richmond, Kentucky and Berea, Kentucky on November 20, 2020 and December 11, 2020, respectively. Under terms of the agreements, Dalsem will provide certain services related to the design, engineering, procurement, construction, startup and testing of a greenhouse and certain ancillary facilities at each site. Total costs under the agreements are based on actual costs incurred by Dalsem and payments are due upon the completion of certain established project milestones, with a portion of each payment due in Euros and a portion due in U.S. dollars. Either party is entitled to terminate the agreements upon the occurrence of certain events of default and the Company is entitled to terminate the agreements if Dalsem fails to meet certain performance requirements. The Company may also terminate the agreements without cause with written notice and a termination payment to Dalsem. (d) Purchase Commitments There were no purchase commitments that were unrecorded at December 31, 2020 and 2019. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 11. Derivative Financial Instruments During the three months ended March 31, 2021, the Company entered into foreign currency forward and option contracts to hedge certain cash flows related to anticipated expenditures related to the construction of its Berea, Kentucky and Richmond, Kentucky CEA facilities. These contracts, which have maturities ranging through December 2022, qualify as cash flow hedges and are used to hedge the Company’s foreign currency risk associated with the Euro denominated payments due upon the completion of established project milestones under the applicable CEA facility construction contracts. As of March 31, 2021, the total notional amount outstanding of foreign currency contracts designated as cash flow hedging instruments was €49,692. The Company maintains collateral of $5,000 for the hedge program which is included in other non-current assets and margin call deposits of $670 which are included in prepaid expenses and other current assets in the unaudited condensed consolidated balance sheet at March 31, 2021. The Company has elected to measure hedge effectiveness using the “spot method” under which the hedging relationship is considered perfectly effective and changes in the fair value of the forward and options contracts attributable to changes in the spot rate are recorded as a component of other AOCL. As the hedged items are ultimately capitalized as part of the CEA facility fixed assets, the AOCL amounts will be reclassified into earnings over the same periods as the future depreciation expense related to those assets. Consistent with the allocation of greenhouse facility fixed asset depreciation, the AOCL reclassification will also be allocated between cost of goods sold (“COGS”) and SG&A within the unaudited condensed consolidated statement of operations and comprehensive loss. Under the “spot method”, changes in the fair value of forward contracts attributable to changes in the difference between the forward rate and the spot rate (forward points) and the fair value of option contracts attributable to time and volatility values (up-front premium) will be excluded from the measure of hedge effectiveness and amortized as COGS and SG&A on a straight-line basis over the terms of the underlying contracts. During the three months ended March 31, 2021, the Company recognized amortization expense of $30 related to its foreign currency hedge contracts within its unaudited condensed consolidated statement of operations and comprehensive loss. As of March 31, 2021, the Company had a net liability of $(632) in foreign currency contracts designated as cash flow hedging instruments, which is included in other current and non-current liabilities according to the expected settlement dates of the related contracts. The Company recorded unrealized losses of $(669), net of tax impact of $244, in AOCL for the three months ended March 31, 2021. The Company will release the AOCL amounts, net of tax impact, in the periods that the underlying transactions impact earnings as described above. |
Stock Compensation and Other Be
Stock Compensation and Other Benefit Plans | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation and Other Benefit Plans | 12. Stock Compensation and Other Benefit Plans Equity Incentive Plan On January 29, 2021, stockholders approved the 2021 Equity Incentive Plan, (the “Plan”), replacing the 2018 Equity Incentive Plan, (the “2018 Plan”), pursuant to which the Company’s Board of Directors may grant stock awards, including stock options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards, to officers, key employees, and directors. The Plan allows for non-employee director grants, which are accounted for in the same manner as employee awards. There are 10,027 registered shares of common stock reserved for issuance under the Plan. During the three months ended March 31, 2021, no awards were granted under the Plan. There are 5,371 registered shares of common stock reserved for issuance upon exercise or settlement, as applicable, of awards made under the 2018 Plan. While no further awards may be granted under the 2018 Plan, that plan continues to govern all outstanding awards previously issued under it. Vesting of the restricted stock units issued under the 2018 Plan (“2018 RSUs”) was dependent on a liquidity event, the Business Combination, which occurred on January 29, 2021. Accordingly, the Company recognized a one-time stock-based compensation expense of $2,616 as of that date as a retroactive catch-up of cumulative stock-based compensation expense for such awards from their original grant dates. Total stock-based compensation expense related to 2018 RSU’s was $6,244 during the three months ended March 31, 2021. As of March 31, 2021, the Company had 1,830 granted but unvested 2018 RSU’s with unrecognized stock-based compensation expense of $17,111 remaining. Total stock-based compensation expense was $6,287 and $19 for the three months ended March 31, 2021 and 2020, respectively. Of these amounts, $6,027 and $19 were included in SG&A for the three months ended March 31, 2021 and 2020, respectively, and $260 and zero, respectively, in COGS for the three months ended March 31, 2021 and 2020, respectively, within the Company’s unaudited condensed consolidated statements of operations and comprehensive loss. Employee Stock Purchase Plan On January 29, 2021, stockholders approved the 2021 Employee Stock Purchase Plan, (the “ESPP”). The ESPP provides eligible employees with a means of acquiring equity in the Company at a discounted price using their own accumulated payroll deductions. Under the terms of the ESPP employees can elect to have amounts of their annual compensation withheld, up to a maximum set by the board, to purchase shares of Company common stock for a purchase price equal to 85% of the lower of the fair market value per share (at closing) of Company common stock on (i) the offering date or (ii) the respective purchase date. There are 2,005 shares of common stock reserved for issuance under the ESPP. During the three months ended March 31, 2021, there were no shares purchased under the ESPP. Employee Cash Incentive Plan On March 23, 2021, the Compensation Committee of the Board (the “Committee”) adopted an Employee Cash Incentive Plan (the “Cash Incentive Plan”) which will govern the terms of annual cash incentive awards granted to eligible employees of the Company, as determined by the Committee from time to time. The Company’s named executive officers are eligible to participate in the Cash Incentive Plan, except that Jonathan Webb, the Company’s Chief Executive Officer, is not eligible to participate for the 2021 performance period. The Committee (or its delegate) will administer the Cash Incentive Plan and will have the authority to determine all of the awards granted under the Cash Incentive Plan. The Cash Incentive Plan provides for a cash incentive award determined based on the achievement of specified annual Company performance goals, which include net revenue, adjusted EBITDA and improvement in the Company’s benefit corporation certification score, as well as individual performance goals. The performance measures for the Company’s named executive officers for the Company’s fiscal year ending December 31, 2021 will be described in the Company’s annual proxy statement filed in 2022. Each eligible employee will be assigned an individual incentive target expressed as a percentage of the employee’s annual base salary. Following the end of each annual performance period, the Committee will determine achievement of the Company and individual performance goals. The Committee may modify and/or adjust the performance goals or the related level of achievement, in whole or in part, as it deems appropriate or equitable. Any cash incentive awards that become payable under the Cash Incentive Plan will generally be paid no later than 90 days following the end of the applicable performance period. In order to receive an award under the Cash Incentive Plan, the participant must generally remain employed and in good standing with the Company through the date of payment. |
Income Taxes
Income Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 13. Income Taxes The Company’s effective income tax rate was (7.6)% and 0% for the three months ended March 31, 2021 and 2020, respectively. The variance from the U.S. federal statutory rate of 21% for the three months ended March 31, 2021 was primarily attributable to a change in the Company’s valuation allowance. The Company’s income tax provision is impacted by a valuation allowance on the Company’s net deferred tax assets, net of reversing taxable temporary differences and considering future annual limitations on net operating loss carryforward utilization enacted by U.S. tax reform legislation. The Company maintains a valuation allowance on its net deferred tax assets for all periods presented as the Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all the recorded deferred tax assets will not be realized in future periods. There was no income tax expense recognized in the three months ended March 31, 2020. | (6) Income Taxes For the years ended December 31, 2020 and 2019, the Company incurred net operating losses and, accordingly, no current provision for income taxes has been recorded. Income tax expense for the year ended December 31, 2020 consisted of the following components: Deferred income taxes: Federal $ State Total deferred income taxes Total income tax expense $ 9,186 For the year ended December 31, 2019, no deferred income tax benefit for income taxes was recorded due to the uncertainty of the realization of net deferred tax assets. The reconciliation of the statutory federal income tax with the provision for income taxes are as follows for the years ended December 31: 2020 2019 Loss before income taxes $ (17,438,519) $ (2,746,021) Income tax benefit at U.S. Federal statutory rate (3,662,089) (576,664) Permanent items 211,193 95,081 Change in valuation allowance 4,121,884 572,404 State income taxes, net of U.S. Federal income tax benefit (661,802) (90,821) Income tax expense $ 9,186 $ — The Company has considered the impact of state rate changes, apportionment weighting and state filing positions when determining its state effective tax rate. The Company adjusts its state effective tax rate for enacted law changes during the year. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income and for tax carryforwards. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 4,856,533 $ 812,183 Lease liabilities 15,679,593 39,604 Financing obligation 15,581,566 962,009 Other 19,607 3,811 36,137,299 1,817,607 Valuation allowance (4,921,773) (799,889) 31,215,526 1,017,718 Deferred tax liabilities: Property and equipment $ (30,879,012) $ (982,871) Operating lease right-of-use assets (349,375) (38,522) (31,228,387) (1,021,393) Net deferred tax liabilities $ (12,861) $ (3,675) When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. The Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets, and accordingly, a full valuation allowance has been provided on its net deferred tax assets as of December 31, 2020 and 2019. The valuation allowance increased $4,121,884 during the year ended December 31, 2020, primarily as a result of an increase in net operating loss carryforwards. The Company continues to monitor the need for a valuation allowance based on the sources of future taxable income. At December 31, 2020, the Company has $19,477,629 of federal net operating loss carryforwards that have no expiration. The Company has $19,398,243 of state net operating loss carryforwards that have no expiration. Under the provisions of the Internal Revenue Code, net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may be subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders by more than 50% over a three-year period, as defined in Sections 382 and 383 of the Internal Revenue Code and similar state provisions. The amount of the annual limitation is determined based on the value of the Company immediately before the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not completed a study to assess whether a change of control has occurred or whether there have been multiple changes of control since the date of the Company’s formation and that there could be additional changes in control in the future. As a result, the Company is unable to estimate the effect of these limitations, if any, on the Company’s ability to utilize net operating losses in the future. A valuation allowance has been provided against the Company’s net operating and tax credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the net operating loss carryforward and the valuation allowance. As of December 31, 2020 and 2019, the Company had no accrued uncertain tax positions or associated interest or penalties and no amounts have been recognized in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company files income tax returns in the U.S. federal jurisdiction and state jurisdictions. The tax years since inception remain open and subject to examination by federal and state taxing authorities. |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net Loss Per Common Share | 14. Net Loss Per Common Share Diluted net loss per common share is the same as basic net loss per common share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive: Anti-dilutive common share equivalents March 31, 2021 March 31, 2020 Stock options 2,866 2,159 Restricted Stock Units 2,561 — Warrants 13,250 — Total anti-dilutive common share equivalents 18,677 2,159 Period Ended March 31, 2021 2020 Numerator: Net loss $ (28,515) $ (818) Denominator: Weighted-average common shares outstanding, basic and diluted 80,729 32,858 Net loss per common share, basic and diluted $ (0.35) $ (0.02) | (13) Net Loss Per Share Diluted net loss per common share is the same as basic loss per common share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented: December 31, Anti-dilutive common share equivalents: 2020 2019 Series A Preferred Stock 2,770,165 2,770,165 Series A-1 Preferred Stock 392,276 392,276 Series B Preferred Stock 2,631,972 1,483,491 Series C Preferred Stock 5,130,658 — Restricted stock units 1,183,500 — Stock options 1,384,984 1,004,000 Total anti-dilutive common share equivalents 13,493,555 5,649,932 Basic and diluted net loss per common share is calculated as follows: Year Ended December 31, 2020 2019 Numerator: Net loss $ (17,447,705) $ (2,746,021) Denominator: Weighted-average common shares outstanding, basic and diluted 9,716,768 9,507,926 Net loss per common share, basic and diluted $ (1.80) $ (0.29) |
Subsequent Events
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 15. Subsequent Events In April 2021, the Company acquired Root AI, Inc., (“Root AI”) an artificial intelligence farming startup that creates intelligent robots to help manage high-tech indoor farms, for approximately $60,000. Total consideration included $10,000 in cash and 2,328 shares of the Company’s common stock. Founded in 2018, Root AI is based in Somerville, Massachusetts and has 19 full-time employees. The acquisition of Root AI is expected to provide the Company with a baseline of harvesting support while helping to evaluate crop health, predict yield, and optimize overall operations of its CEA facilities. The acquisition of Root AI will be accounted for under the acquisition method. On April 12, 2021, the Company granted a total of 6,003 restricted stock units under the Plan. | (14) Subsequent Events On January 29, 2021, the Business Combination and Merger was completed. The transaction provided the Company approximately $475.0 million of unrestricted cash, including $375.0 million in gross proceeds from the fully committed common stock PIPE. In connection with the transaction: · Each share of Preferred Stock that was then issued and outstanding was automatically converted into AppHarvest Common Stock, such that each converted share of Preferred Stock was no longer outstanding and ceased to exist. · Novus assumed the Convertible Note, and the outstanding principal and unpaid accrued interest due was converted into an aggregate 3,242,336 shares of Novus’ common stock, such that the Convertible Note was no longer outstanding and ceased to exist. · Each share of AppHarvest Common Stock, including the AppHarvest Common stock issued upon conversion by the AppHarvest Preferred stockholders, was converted into and exchanged for 2.1504 shares (the “Exchange Ratio”) of Novus’ common stock. · Each option to purchase AppHarvest Common Stock that was outstanding, whether vested or unvested, was converted into an option to purchase a number of shares of Novus Common Stock equal to the product (rounded down to the nearest whole number) of (i) the number of shares of AppHarvest Common Stock subject to such AppHarvest option and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such AppHarvest option, divided by (B) the Exchange Ratio. · Each restricted stock unit awarded by AppHarvest that was outstanding, whether vested or unvested, was converted into an award of restricted stock units to acquire a number shares of Novus Common Stock equal to the product (rounded down to the nearest whole number) of (1) the number of shares of AppHarvest Common Stock subject to the AppHarvest restricted stock unit award and (2) the Exchange Ratio. As further discussed within Note 8(a) to these consolidated financial statements, on March 1, 2021, the Company closed on the Membership Interest Purchase and Sale Agreement with Equilibrium. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Consolidation | b) Principles of Consolidation The Company consolidates entities in which it holds a controlling financial interest. For voting interest entities, the Company is considered to hold a controlling financial interest when it is able to exercise control over the investees’ operating and financial decisions. The Company does not have interests in any entities that would be considered variable interest entities. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Use of Estimates in Condensed Consolidated Financial Statements | Use of Estimates in Condensed Consolidated Financial Statements In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the recording of revenue, valuation of inventory, the valuation of stock-based compensation, the valuation of private warrants, lease accounting, the useful life of fixed assets and income taxes. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the global volatility and general market disruption resulting from the global outbreak of the novel coronavirus disease (“COVID-19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. | a) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, the valuation of instruments issued for financing and stock-based compensation, lease accounting and income taxes. The Company utilizes estimates and assumptions in determining the fair value of its Common Stock and other equity instruments. The fair value was determined using valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation . The Company granted stock options at exercise prices not less than the fair value of its Common Stock, as determined by the Board of Directors contemporaneously at the date such grants were made, with input from management. The fair value of Common Stock at the grant date was determined to have been higher in connection with retrospective fair value assessments for financial reporting purposes. The exercise prices of the stock option awards affected by the retrospective fair value assessment were not modified. The Company’s retrospective fair value assessment estimated the fair value of the Company’s Common Stock based on a number of objective and subjective factors, including external market conditions affecting the Company’s industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s Common Stock at the time, and the likelihood of achieving a Deemed Liquidity Event, as defined, such as a public offering or sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of Common Stock and other equity instruments at each valuation date. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the impact from the global outbreak of the novel coronavirus disease (“COVID‑19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. |
Accounts Receivables | Accounts Receivables Accounts receivable consist of amounts due from customers in connection with our normal business activities and are carried at sales value less allowance for doubtful accounts. The allowance for doubtful accounts is established to reflect the expected losses of accounts receivable based on past collection history, age, account payment status compared to invoice payment terms and specific individual risks identified. Write-offs are recorded against the allowance for doubtful accounts when all reasonable efforts for collection have been exhausted. The provision at March 31, 2021 and December 31, 2020 did not have a material impact on the condensed consolidated financial statements. | |
Convertible Preferred Stock | Convertible Preferred Stock Prior to the Business Combination, the Company recorded shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company applied the guidance in Accounting Standards Codification (“ASC”) 480-10-S99-3A and therefore classified all of its outstanding redeemable convertible preferred stock as temporary equity. The redeemable convertible preferred stock was recorded outside of stockholders’ equity because, in the event of certain deemed liquidation events considered not solely within the Company’s control, such as a merger, acquisition and sale of all or substantially all of the Company’s assets, the preferred stock would become redeemable at the option of the holders. In the event of a change of control of the Company, proceeds received from the sale of such shares would be distributed in accordance with the liquidation preferences set forth in the Company’s Amended and Restated Certificate of Incorporation then in effect. All convertible preferred stock previously classified as temporary equity was retroactively adjusted and reclassified to permanent equity as a result of the Business Combination. As a result of the Business Combination, each share of redeemable convertible preferred stock that was then issued and outstanding was automatically converted into Legacy AppHarvest Common Stock, such that each converted share of preferred stock was no longer outstanding and ceased to exist. Each share of Legacy AppHarvest common stock, including the Legacy AppHarvest common stock issued upon conversion of Legacy AppHarvest preferred stock, was converted into and exchanged for 2.1504 (the “Exchange Ratio”) shares of the Company’s common stock.The Exchange Ratio was established pursuant to the terms of the Business Combination Agreement. During the three-month period ended March 31, 2020, Legacy AppHarvest issued shares of Legacy AppHarvest Series B redeemable convertible preferred stock to new and existing investors for net proceeds of $4,880. | |
Warrants | Warrants At March 31, 2021, there were 13,250 warrants to purchase Common Stock outstanding, consisting of 10,500 public warrants (“Public Warrants”) and 2,750 private warrants (“Private Warrants”), (collectively, “Warrants”) held by the Novus initial stockholders. Each warrant entitles the registered holder to purchase one share of Common Stock at a price of $11.50 per share. The warrants expire on January 29, 2026, or earlier upon redemption or liquidation. The Company may redeem the Public Warrants: · In whole and not in part; · At a price of $0.01 per Warrant; · Upon not less than 30 days’ prior written notice of redemption; · If, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and · if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The Public Warrants were determined to be equity classified in accordance with U.S. GAAP. The Private Warrants are identical to the Public Warrants except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As a result of the provisions in the warrant agreement that provide for differences in the mechanics of a cashless exercise dependent upon the characteristics of the warrant holder, and because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provisions preclude the Private Warrant from being classified in equity. Accordingly, the Private Warrants are classified as a liability and remeasured at fair value at each reporting date. The Company accounts for its Private Warrants in accordance with ASC 815-40, under which the Company has determined that the Private Warrants are recognized as liabilities at fair value and subject to re-measurement at each balance sheet date until exercised. Changes in fair value of the Private Warrants is recognized in the Company’s condensed consolidated statement of operations and comprehensive loss. The fair value of the Private Warrants is estimated at each measurement date using a Black-Scholes option pricing model. See Note 5- Fair Value Measurements for inputs used in calculating the estimated fair value. | |
Derivative Financial Instruments | Derivative Financial Instruments Derivative financial instruments are used to manage foreign currency exchange risks. The financial instruments used by the Company are straight-forward, non-leveraged instruments. The counterparties to these financial instruments are financial institutions with strong credit ratings. The Company maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit ratings of these institutions. For all transactions designated as hedges, the hedging relationships are formally documented at the inception and on an ongoing basis in offsetting changes in cash flows of the hedged transaction. The Company records derivative financial instruments on the condensed consolidated balance sheets as either an asset or liability measured at its fair value. Changes in a derivative's fair value (i.e. unrealized gains or losses) are recorded each period in earnings unless the derivative qualifies as a hedge on future cash flows. Gains and losses related to a hedge are either recognized in income immediately to offset the gain or loss on the hedged item, or deferred and recorded in the stockholders' equity section of the condensed consolidated balance sheets as a component of accumulated other comprehensive loss (“AOCL”) and subsequently recognized in the condensed consolidated statements of operations and comprehensive loss when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge, if any, is recognized in income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded to net income immediately. | |
New Accounting Pronouncements | New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 is part of the FASB’s overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes certain exceptions to the general principles of ASC 740, Income Taxes, in order to reduce the cost and complexity of its application in the areas of intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date losses in interim periods and other areas within ASC 740. The Company adopted ASU 2019-12 on January 1, 2021 and the adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the condensed consolidated financial statements . | |
Fair Value Measurements | d) Fair Value Measurements and Disclosures Carrying values of cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses, other current liabilities, and notes payable approximate fair values because of their short-term nature. There were no material assets or liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and 2019. |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combination | |
Schedule of Reconciliation of the elements of the Business Combination | The following table reconciles the elements of the Business Combination to the unaudited condensed consolidated statements of stockholders’ equity and cash flows for the three months ended March 31, 2021: Recapitalization Cash-Novus trust and cash, net of redemptions $ 99,896 Cash-PIPE financing 375,000 Non-cash Convertible Note conversion 30,808 Non-cash net liabilities assumed from Novus (2,850) Less: Fair value of assumed common stock Private Warrants (45,565) Less: transaction costs allocated to equity (23,762) Net impact on total stockholders’ equity 433,527 Less: cash payments for transaction costs at Closing (2,634) Less: non-cash Convertible Note conversion (30,808) Add: non-cash net liabilities assumed from Novus 2,850 Add: non-cash fair value of assumed common stock Private Warrants 45,565 Net impact on net cash provided by financing activities 448,500 Less: transaction costs included in net cash used in operating activities (a) (13,261) Total net increase in cash and cash equivalents $ 435,239 (a) Including transaction costs in the amount of $2,887 allocated to the Private Warrants |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Subject to Fair Value Measurements on a Recurring Basis | The table below presents the Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for each measurement: Fair Value as of March 31, 2021 (In thousands) Balance Sheet Account Level 1 Level 2 Level 3 Total Assets: Foreign currency options Other assets, net $ — $ 166 $ — $ 166 Total assets $ — $ 166 $ — $ 166 Liabilities: Foreign currency forward contracts Other current liabilities $ — $ 798 $ — $ 798 Private Warrants Private Warrant liabilities — 29,920 — 29,920 Total liabilities $ — $ 30,718 $ — $ 30,718 |
Fair Value Measurement Inputs and Valuation Techniques | The Private Warrant liabilities are determined using a Black-Scholes option pricing model, a Level 2 valuation. The significant inputs to the Private Warrant valuation are as follows: On the Closing Date of the Business Combination March 31, 2021 Exercise price $ 11.50 $ 11.50 Stock price $ 24.95 $ 18.30 Volatility 25.0 % 55.8 % Remaining term in years 5.00 4.83 Risk-free rate 0.45 % 0.92 % Dividend yield — — |
Summary of Private Warrant Activity | The following table summarizes the private warrant activity for the three months ended March 31, 2021: (In thousands) Fair value of Private Warrants on the Closing Date $ 45,565 Fair value of Private Warrants converted to Public Warrants (5,819) Change in fair value of Private Warrants (9,826) Fair value of Private Warrants outstanding as of March 31, 2021 $ 29,920 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Schedule of Inventory, Net | Inventories consisted of the following: March 31, 2021 December 31, 2020 Growing crops $ 3,275 $ 2,606 Raw materials 1,597 781 Finished goods 31 — Total inventories, net $ 4,903 $ 3,387 | Inventories, net consisted of the following at December 31, 2020: Finished goods $ — Raw materials Growing crops Total inventories, net $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Property, Plant and Equipment | Property and equipment at cost and accumulated depreciation are as follows: March 31, 2021 December 31, 2020 Land $ 19,449 $ 7,277 Buildings 76,165 57,362 Machinery and equipment 43,357 9,581 Construction in progress 50,824 78,174 Leasehold improvements 2,320 871 Less: accumulated depreciation (1,153) (620) Total property and equipment, net $ 190,962 $ 152,645 | Property and equipment at cost and accumulated depreciation at December 31, 2020 and 2019 are as follows: December 31, 2020 Original Accumulated Assets cost depreciation net Land $ 3,678,296 $ — $ 3,678,296 Land with a related party – see Note 8(a) 3,599,324 — 3,599,324 Buildings 57,362,041 (436,209) 56,925,832 Construction in progress 23,525,658 — 23,525,658 Construction in progress with a related party – see Note 8(a) 54,648,634 — 54,648,634 Automobiles 151,898 (14,791) 137,107 Leasehold improvements 871,259 (17,660) 853,599 Equipment 1,803,347 (68,074) 1,735,273 Machinery 7,625,332 (83,720) 7,541,612 $ 153,265,789 $ (620,454) $ 152,645,335 December 31, 2019 Original Accumulated Assets cost depreciation net Land with a related party – see Note 8(a) $ 3,599,324 $ — $ 3,599,324 Equipment 25,399 (7,235) 18,164 Machinery 95,512 (11,926) 83,586 $ 3,720,235 $ (19,161) $ 3,701,074 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | ||
Schedule of Accrued Expenses | Accrued expenses are as follow: March 31, 2021 December 31, 2020 Payroll and related $ 2,237 $ 563 Professional service fees 2,284 693 Construction costs 1,408 2,574 Other accrued liabilities 935 352 Incentive compensation 864 — Utilities 476 384 Interest on convertible debt with a related party — 618 Total accrued expenses $ 8,204 $ 5,184 | Accrued expenses consist of the following as of December 31: 2020 2019 Accrued construction costs $ $ — Accrued professional service fees $ 693,206 $ 35,792 Accrued interest on convertible debt with a related party 618,082 — Accrued payroll 562,641 1,644 Accrued utilities 383,852 — Other accrued liabilities 351,795 11,799 Total accrued expenses $ 5,183,880 $ 49,235 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Summary of Operating Lease Liability by Maturity | Operating leases Remainder of 2021 $ 319 2022 426 2023 415 2024 368 2025 355 2026 and thereafter 729 Total minimum payments required 2,612 Less: imputed interest costs (1) (462) Present value of net minimum lease payments (2) $ 2,150 Weighted-average imputed interest rate 6.32 % Weighted-average remaining lease term 6.3 | The future minimum rental payments required under the leases for each year of the next five years ending December 31, and in the aggregate thereafter are as follows: Finance Lease Operating with leases Equilibrium 2021 $ 258,225 $ 59,446,868 2022 280,977 — 2023 270,112 — 2024 276,780 — 2025 264,928 — 2026 and thereafter 549,488 — Total minimum payments required 1,900,510 59,446,868 Less: imputed interest costs (1) (363,694) (230,383) Present value of net minimum lease payments (2) $ 1,536,816 $ 59,216,485 Weighted-average imputed interest rate 6.29 % 4.72 % Weighted-average remaining lease term 6.9 0.2 (1) Represents the amount necessary to reduce net minimum lease payments to present value using actual rate in the lease agreement or the Company’s incremental borrowing rate at lease inception. (2) Included in the Consolidated Balance Sheet as of December 31, 2020 as current lease liability with a related party of $59,216,485, current lease liability with other parties of $166,354, and noncurrent lease liability of $1,370,462. |
Summary of Lease Cost | Period Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 52 $ 10 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 735 $ 30 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive: Anti-dilutive common share equivalents March 31, 2021 March 31, 2020 Stock options 2,866 2,159 Restricted Stock Units 2,561 — Warrants 13,250 — Total anti-dilutive common share equivalents 18,677 2,159 | December 31, Anti-dilutive common share equivalents: 2020 2019 Series A Preferred Stock 2,770,165 2,770,165 Series A-1 Preferred Stock 392,276 392,276 Series B Preferred Stock 2,631,972 1,483,491 Series C Preferred Stock 5,130,658 — Restricted stock units 1,183,500 — Stock options 1,384,984 1,004,000 Total anti-dilutive common share equivalents 13,493,555 5,649,932 |
Schedule of Earnings Per Share, Basic and Diluted | Period Ended March 31, 2021 2020 Numerator: Net loss $ (28,515) $ (818) Denominator: Weighted-average common shares outstanding, basic and diluted 80,729 32,858 Net loss per common share, basic and diluted $ (0.35) $ (0.02) | Year Ended December 31, 2020 2019 Numerator: Net loss $ (17,447,705) $ (2,746,021) Denominator: Weighted-average common shares outstanding, basic and diluted 9,716,768 9,507,926 Net loss per common share, basic and diluted $ (1.80) $ (0.29) |
Description of Business (Detail
Description of Business (Details) | 3 Months Ended |
Mar. 31, 2021facility | |
Description of Business | |
Number of facilities under construction | 2 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021USD ($)D$ / sharesshares | Mar. 31, 2020USD ($) | Jan. 29, 2021 | Jan. 28, 2021shares | |
Class of Warrant or Right [Line Items] | ||||
Exchange ratio | 2.1504 | |||
Issuance of preferred stock, net | $ | $ 0 | $ 4,880 | ||
Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 13,250 | |||
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.50 | |||
Warrants | Common stock | ||||
Class of Warrant or Right [Line Items] | ||||
Number of shares called by each warrant (in shares) | 1 | |||
Public Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 10,500 | 10,000 | ||
Redemption price (in dollars per share) | $ / shares | $ 0.01 | |||
Minimum notice of redemption, term | 30 days | |||
Common stock price threshold which triggers warrant redemption (in dollars per share) | $ / shares | $ 18 | |||
Consecutive trading days threshold (in days) | D | 20 | |||
Trading day threshold (in days) | D | 30 | |||
Private Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants outstanding (in shares) | 2,750 | 3,250 |
Business Combination (Details)
Business Combination (Details) $ / shares in Units, $ in Thousands | Jan. 29, 2021USD ($)$ / sharesshares | Mar. 31, 2021$ / sharesshares | Jan. 28, 2021shares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares |
Reverse Recapitalization [Line Items] | |||||
Exchange ratio | 2.1504 | ||||
Capital stock, shares authorized (in shares) | 760,000,000 | ||||
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | 19,600,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Number of shares issued (PIPE shares) | 37,500,000 | ||||
Share price (in dollars per share) | $ / shares | $ 10 | ||||
Aggregate purchase price in private placement | $ | $ 375,000 | ||||
Increase in cash and cash equivalents as a result of the Business Combination | $ | 435,239 | ||||
Gross proceeds from the PIPE | $ | $ 375,000 | ||||
Common stock | Convertible Debt | |||||
Reverse Recapitalization [Line Items] | |||||
Shares issued upon conversion (in shares) | 3,242,000 | ||||
Public Warrants | |||||
Reverse Recapitalization [Line Items] | |||||
Warrants outstanding (in shares) | 10,500,000 | 10,000,000 | |||
Private Warrants | |||||
Reverse Recapitalization [Line Items] | |||||
Warrants outstanding (in shares) | 2,750,000 | 3,250,000 |
Business Combination - Reconcil
Business Combination - Reconciliation of the Business Combination (Details) - USD ($) $ in Thousands | Jan. 29, 2021 | Mar. 31, 2021 |
Schedule of Reverse Recapitalization [Line Items] | ||
Cash - Novus trust and cash, net of redemptions | $ 99,896 | |
Cash - PIPE financing | 375,000 | |
Non-cash Convertible Note conversion | 30,808 | |
Non-cash net liabilities assumed from Novus | (2,850) | |
Less: Fair value of assumed common stock Private Warrants | (45,565) | |
Less: transaction costs allocated to equity | (23,762) | |
Net impact on total stockholders' equity | 433,527 | $ 448,500 |
Less: cash payments for transaction costs at Closing | (2,634) | |
Less: non-cash Convertible Note conversion | (30,808) | |
Add: non-cash net liabilities assumed from Novus | 2,850 | |
Add: non-cash fair value of assumed common stock Private Warrants | 45,565 | |
Net impact on net cash provided by financing activities | 448,500 | |
Less: transaction costs included in net cash used in operating activities | (13,261) | |
Total net increase in cash and cash equivalents | 435,239 | |
Private Warrants | ||
Schedule of Reverse Recapitalization [Line Items] | ||
Transaction costs recognized as operating expense | $ 2,887 |
Revenue Recognition (Details)
Revenue Recognition (Details) | Mar. 28, 2019 |
Revenue Recognition | |
Term of contract | 10 years |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Mar. 31, 2021 | Jan. 29, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Liabilities: | ||||
Private Warrants | $ 29,920,000 | $ 45,565,000 | ||
Fair Value, Recurring | ||||
Assets: | ||||
Foreign currency options | 166,000 | |||
Total assets | 166,000 | $ 0 | $ 0 | |
Liabilities: | ||||
Foreign currency forward contracts | 798,000 | |||
Private Warrants | 29,920,000 | |||
Total liabilities | 30,718,000 | $ 0 | $ 0 | |
Level 1 | Fair Value, Recurring | ||||
Assets: | ||||
Foreign currency options | 0 | |||
Total assets | 0 | |||
Liabilities: | ||||
Foreign currency forward contracts | 0 | |||
Private Warrants | 0 | |||
Total liabilities | 0 | |||
Level 2 | Fair Value, Recurring | ||||
Assets: | ||||
Foreign currency options | 166,000 | |||
Total assets | 166,000 | |||
Liabilities: | ||||
Foreign currency forward contracts | 798,000 | |||
Private Warrants | 29,920,000 | |||
Total liabilities | 30,718,000 | |||
Level 3 | Fair Value, Recurring | ||||
Assets: | ||||
Foreign currency options | 0 | |||
Total assets | 0 | |||
Liabilities: | ||||
Foreign currency forward contracts | 0 | |||
Private Warrants | 0 | |||
Total liabilities | $ 0 |
Fair Value Measurements - Signi
Fair Value Measurements - Significant Inputs to the Private Warrant Valuation (Details) | Mar. 31, 2021$ / sharesUSD ($) | Jan. 29, 2021$ / sharesUSD ($) |
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0.45 | |
Exercise price | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 11.50 | 11.50 |
Stock price | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 18.30 | 24.95 |
Volatility | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 55.8 | 25 |
Remaining term in years | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | $ | 4.83 | 5 |
Dividend yield | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0 | 0 |
Fair Value Measurements - Priva
Fair Value Measurements - Private Warrant Activity (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Increase (Decrease) In Fair Value Of Warrants [Roll Forward] | |||
Fair value of Private Warrants, beginning | $ 45,565 | ||
Fair value of Private Warrants converted to Public Warrants | (5,819) | $ (5,819) | |
Change in fair value of Private Warrants | (9,826) | (9,826) | $ 0 |
Fair value of Private Warrants, ending | $ 29,920 | $ 29,920 |
Inventories (Details)
Inventories (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Growing crops | $ 3,275,000 | $ 2,605,891 |
Raw materials | 1,597,000 | 781,222 |
Finished goods | 31,000 | 0 |
Total inventories, net | $ 4,903,000 | $ 3,387,113 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (1,153) | $ (620) |
Total property and equipment, net | 190,962 | 152,645 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 19,449 | 7,277 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 76,165 | 57,362 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 43,357 | 9,581 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 50,824 | 78,174 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,320 | $ 871 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) | Mar. 01, 2021USD ($) | Mar. 31, 2021USD ($)facility | Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Property, Plant and Equipment [Line Items] | |||||
Depreciation | $ 1,772,000 | $ 21,000 | $ 175,843 | $ 16,129 | |
Number of facilities under construction | facility | 2 | ||||
Purchase price of Morehead CEA facility | $ 125,000,000 | ||||
Buildings | |||||
Property, Plant and Equipment [Line Items] | |||||
Right-to-use assets under finance lease related to Morehead CEA facility | $ 56,748,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | |||
Payroll and related | $ 2,237,000 | $ 562,641 | $ 1,644 |
Professional service fees | 2,284,000 | 693,206 | 35,792 |
Construction costs | 1,408,000 | 2,574,000 | |
Other accrued liabilities | 935,000 | 351,795 | 11,799 |
Incentive compensation | 864,000 | 0 | |
Utilities | 476,000 | 383,852 | |
Interest on convertible debt with a related party | 0 | 618,082 | |
Accrued expenses | $ 8,204,000 | $ 5,183,880 | $ 49,235 |
Notes Payable with a Related _2
Notes Payable with a Related Party (Details) - USD ($) $ / shares in Units, shares in Thousands | Jan. 29, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Sep. 28, 2020 |
Debt Instrument [Line Items] | ||||
Interest on convertible debt with a related party | $ 0 | $ 618,082 | ||
Convertible Debt | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 30,000,000 | |||
Interest on convertible debt with a related party | 618,000 | |||
Convertible Debt | Inclusive Capital Partners Spring Master Fund, L.P. | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 30,000,000 | |||
Interest rate | 8.00% | |||
Conversion price (in dollars per share) | $ 9.50 | |||
Convertible Debt | Common stock | ||||
Debt Instrument [Line Items] | ||||
Shares issued upon conversion (in shares) | 3,242 |
Commitment and Contingencies -
Commitment and Contingencies - Additional Information (Details) $ in Thousands | Mar. 01, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Interests acquired | 100.00% |
Purchase price of Morehead CEA facility | $ 125,000 |
Financing obligation related to construction in progress assets | 66,504 |
Finance lease liability | $ 58,496 |
Commitment and Contingencies _2
Commitment and Contingencies - Operating Leases (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease expense | $ 97,000 | $ 14,000 | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Remainder of 2021 | 319,000 | $ 258,225 | ||
2022 | 426,000 | 280,977 | ||
2023 | 415,000 | 270,112 | ||
2024 | 368,000 | 276,780 | ||
2025 | 355,000 | 264,928 | ||
2026 and thereafter | 729,000 | 549,488 | ||
Total minimum payments required | 2,612,000 | 1,900,510 | ||
Less: imputed interest costs | (462,000) | (363,694) | ||
Present value of net minimum lease payments | $ 2,150,000 | $ 1,536,816 | ||
Weighted-average imputed interest rate | 6.32% | 6.29% | ||
Weighted-average remaining lease term | 6 years 3 months 18 days | 6 years 10 months 24 days | ||
Current portion of lease liabilities | $ 300,000 | $ 166,354 | $ 44,654 | |
Lease liabilities, net of current portion | 1,850,000 | 1,370,462 | 103,524 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 52,000 | 10,000 | 96,104 | 37,668 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 735,000 | $ 30,000 | $ 1,441,486 | $ 160,948 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Details) € in Thousands, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2021EUR (€) | Mar. 31, 2021USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Amortization expense related to foreign currency hedge contracts | $ 30 | |||
Net unrealized loss on cash flow hedges, net of tax | (669) | $ 0 | ||
Net unrealized loss on cash flow hedges, tax impact | $ 244 | |||
Foreign Currency Contract | Cash Flow Hedging | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Notional amount | € | € 49,692 | |||
Derivative collateral | $ 5,000 | |||
Margin call deposits | 670 | |||
Net derivative liability | $ (632) |
Stock Compensation and Other _2
Stock Compensation and Other Benefit Plans (Details) - USD ($) $ in Thousands | Jan. 29, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for issuance (in shares) | 15,749,573 | 9,923,323 | |||
Share-based compensation expense | $ 6,287 | $ 19 | |||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 1,183,500 | ||||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for issuance (in shares) | 2,005,000 | ||||
Purchase price of common stock, percent | 85.00% | ||||
The 2021 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for issuance (in shares) | 10,027,000 | ||||
The 2018 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for issuance (in shares) | 5,371,000 | ||||
Share-based compensation expense | $ 2,616 | ||||
The 2018 Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 6,244 | ||||
Number of shares granted | 1,830 | ||||
Unrecognized stock-based compensation expense | $ 17,111 | ||||
SG&A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 6,027 | 19 | |||
COGS | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 260 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | (7.60%) | 0.00% |
Net Loss Per Common Share - Ant
Net Loss Per Common Share - Anti-dilutive Common Share Equivalents (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common share equivalents | 18,677,000 | 2,159,000 | 13,493,555 | 5,649,932 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common share equivalents | 2,866,000 | 2,159,000 | 1,384,984 | 1,004,000 |
Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common share equivalents | 2,561,000 | 0 | ||
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common share equivalents | 13,250,000 | 0 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||||
Net loss | $ (28,515,000) | $ (818,000) | $ (17,447,705) | $ (2,746,021) |
Denominator: | ||||
Weighted-average common shares outstanding, Basic and diluted (in shares) | 80,729 | 32,858 | 9,716,768 | 9,507,926 |
Net loss per common share, Basic and diluted (in dollars per share) | $ (0.35) | $ (0.02) | $ (1.80) | $ (0.29) |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Apr. 12, 2021shares | Apr. 30, 2021USD ($)employeeshares | Dec. 31, 2020shares |
Restricted Stock Units | |||
Subsequent Event [Line Items] | |||
Number of shares granted | 1,396,000 | ||
Subsequent Event | Restricted Stock Units | The 2021 Plan | |||
Subsequent Event [Line Items] | |||
Number of shares granted | 6,003,000 | ||
Subsequent Event | Root AI | |||
Subsequent Event [Line Items] | |||
Number of employees | employee | 19 | ||
Subsequent Event | Root AI | |||
Subsequent Event [Line Items] | |||
Business combination, consideration transferred | $ | $ 60 | ||
Cash payment to acquire business | $ | $ 10 | ||
Shares issued to acquire business (in shares) | 2,328,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 21,908,907 | $ 6,031,270 |
Inventories, net | 3,387,113 | |
Prepaid expenses | 481,003 | 26,300 |
Total current assets | 25,777,023 | 6,057,570 |
Operating lease right-of-use assets, net | 1,307,173 | 144,127 |
Property and equipment, net | 152,645,335 | 3,701,074 |
Lease deposits with a related party | 4,000,000 | |
Other assets | 1,187,967 | 40,334 |
Total non-current assets | 155,140,475 | 7,885,535 |
Total assets | 180,917,498 | 13,943,105 |
Current Liabilities: | ||
Accounts payable | 1,341,822 | 166,956 |
Accrued expenses | 5,183,880 | 49,235 |
Current portion of lease liabilities with a related party | 59,216,485 | |
Current portion of lease liabilities | 166,354 | 44,654 |
Current portion of financing obligations with a related party | 58,795,309 | |
Deferred development fee income from a related party | 406,004 | |
Note payable with a related party | 30,000,000 | |
Total current liabilities | 154,780,798 | 666,849 |
Other current liabilities | 76,948 | |
Lease liabilities, net of current portion | 1,370,462 | 103,524 |
Financing obligation with a related party | 4,096,754 | |
Total non-current liabilities | 1,370,462 | 4,200,278 |
Total liabilities | 156,151,260 | 4,867,127 |
Redeemable convertible preferred stock, $0.0001 par value: | ||
Common stock subject to possible redemption 12,650,000 shares at redemption value | 45,207,530 | 12,258,132 |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Common stock, par value $0.0001, 25,500,000 and 19,600,000 shares authorized, 9,750,427 and 9,676,677 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 4,446 | 968 |
Additional paid in capital | 45,890,000 | 497,306 |
Accumulated deficit | (21,128,133) | (3,680,428) |
Total stockholders' equity | 24,766,000 | 9,076,000 |
Total liabilities and stockholders' equity | 180,917,498 | 13,943,105 |
Series A Preferred Stock | ||
Redeemable convertible preferred stock, $0.0001 par value: | ||
Common stock subject to possible redemption 12,650,000 shares at redemption value | 5,203,342 | 5,203,342 |
Series A-1 Preferred Stock | ||
Redeemable convertible preferred stock, $0.0001 par value: | ||
Common stock subject to possible redemption 12,650,000 shares at redemption value | 992,285 | 992,285 |
Series B Preferred Stock | ||
Redeemable convertible preferred stock, $0.0001 par value: | ||
Common stock subject to possible redemption 12,650,000 shares at redemption value | 10,942,411 | $ 6,062,505 |
Series C Preferred Stock | ||
Redeemable convertible preferred stock, $0.0001 par value: | ||
Common stock subject to possible redemption 12,650,000 shares at redemption value | $ 28,069,492 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Redeemable convertible preferred stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000,000 | 19,600,000 |
Common stock, shares issued | 44,461,000 | 9,676,677 |
Common Stock Shares Outstanding | 44,461,000 | 9,676,677 |
Series A Preferred Stock | ||
Redeemable convertible preferred stock, shares authorized | 2,770,165 | 2,770,165 |
Redeemable convertible preferred stock, shares issued | 2,770,165 | 2,770,165 |
Common stock subject to possible redemption, shares | 2,770,165 | 2,770,165 |
Series A-1 Preferred Stock | ||
Redeemable convertible preferred stock, shares authorized | 392,276 | 392,276 |
Redeemable convertible preferred stock, shares issued | 392,276 | 392,276 |
Common stock subject to possible redemption, shares | 392,276 | 392,276 |
Series B Preferred Stock | ||
Redeemable convertible preferred stock, par value | $ 0.0001 | |
Redeemable convertible preferred stock, shares authorized | 3,500,000 | 2,000,000 |
Redeemable convertible preferred stock, shares issued | 2,631,972 | 1,483,491 |
Common stock subject to possible redemption, shares | 2,631,972 | 1,483,491 |
Series C Preferred Stock | ||
Redeemable convertible preferred stock, shares authorized | 5,250,000 | |
Redeemable convertible preferred stock, shares issued | 5,130,658 | |
Common stock subject to possible redemption, shares | 5,130,658 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Expenses [Abstract] | ||
Selling, general and administrative expenses | $ 16,295,530 | $ 2,716,796 |
Depreciation | 175,843 | 16,129 |
Total operating expenses | 16,471,373 | 2,732,925 |
Loss from operations | (16,471,373) | (2,732,925) |
Nonoperating Income (Expense) [Abstract] | ||
Amortization of development fee with a related party | (406,004) | (349,788) |
Loss on SAFE Note revaluation | (345,003) | |
Interest expense from related parties | (1,423,208) | (27,515) |
Other | 50,058 | 9,634 |
Loss before income taxes | (17,438,519) | (2,746,021) |
Income tax expense | (9,186) | |
Net loss | $ (17,447,705) | $ (2,746,021) |
Net loss per common share, basic and diluted | $ (1.80) | $ (0.29) |
Weighted average shares outstanding, basic and diluted | 9,716,768 | 9,507,926 |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit - USD ($) | Common stock | Additional Paid-in Capital | Retained Earnings | Series A Preferred Stock | Series A-1 Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Total |
Beginning balance at Dec. 31, 2018 | $ 910 | $ 11,559 | $ (934,407) | $ (921,938) | ||||
Balance at beginning (in shares) at Dec. 31, 2018 | 9,100,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (2,746,021) | (2,746,021) | ||||||
Issuance of preferred shares, net | $ 3,953,345 | $ 992,285 | $ 6,062,505 | |||||
Issuance of preferred shares, net (in shares) | 2,111,856 | 392,276 | 1,483,491 | |||||
SAFE Note conversion | $ 58 | 345,949 | $ 1,249,997 | 346,007 | ||||
SAFE Note conversion (in shares) | 576,677 | 658,309 | ||||||
Stock-based compensation | 139,798 | 139,798 | ||||||
Ending balance at Dec. 31, 2019 | $ 3,000 | 12,753,000 | (3,680,428) | $ 9,076,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Number of options exercised | 0 | |||||||
Balance at ending (in shares) at Dec. 31, 2019 | 9,676,677 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (818,000) | $ (818,000) | ||||||
Issuance of preferred shares, net (in shares) | 1,148,481 | |||||||
Stock-based compensation | 19,000 | 19,000 | ||||||
Ending balance at Mar. 31, 2020 | $ 3,000 | 17,652,000 | (4,498,000) | 13,157,000 | ||||
Beginning balance at Dec. 31, 2019 | $ 3,000 | 12,753,000 | (3,680,428) | 9,076,000 | ||||
Balance at beginning (in shares) at Dec. 31, 2019 | 9,676,677 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (17,447,705) | (17,447,705) | ||||||
Issuance of preferred shares, net | $ 4,879,906 | $ 28,069,492 | ||||||
Issuance of preferred shares, net (in shares) | 1,148,481 | 5,130,658 | ||||||
Stock-based compensation | 153,897 | 153,897 | ||||||
Stock option exercise | $ 7 | 34,663 | 34,670 | |||||
Ending balance at Dec. 31, 2020 | $ 4,000 | 45,890,000 | (21,128,133) | $ 24,766,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Number of options exercised | 73,750 | 73,750 | ||||||
Balance at ending (in shares) at Dec. 31, 2020 | 9,750,427 | |||||||
Ending balance at Dec. 31, 2020 | $ 4,000 | 45,890,000 | (21,128,133) | $ 24,766,000 | ||||
Balance at ending (in shares) at Dec. 31, 2020 | 9,750,427 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (28,515,000) | (28,515,000) | ||||||
Stock-based compensation | 6,287,000 | 6,287,000 | ||||||
Stock option exercise | 35,000 | 35,000 | ||||||
Ending balance at Mar. 31, 2021 | $ 10,000 | $ 491,552,000 | $ (49,643,000) | $ 441,250,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Number of options exercised | 103,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash Flow from Operating Activities: | ||
Net loss | $ (17,447,705) | $ (2,746,021) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | ||
Deferred tax benefit | 9,186 | 0 |
Depreciation | 175,843 | 16,129 |
Stock-based compensation expense | 153,897 | 139,798 |
Loss on SAFE Note revaluation | 345,003 | |
Rent payments (in excess of) less than average rent expense, net | 25,778 | (462) |
Interest accrual on financing with related parties | 1,413,944 | 22,127 |
Amortization of development fee with a related party | (406,004) | (349,788) |
Increase (Decrease) in Operating Capital [Abstract] | ||
Inventory | (2,961,664) | |
Prepaid expenses and other current assets | (347,262) | (22,025) |
Other assets, net | (947,633) | (34,527) |
Accounts payable | 1,174,866 | 345,890 |
Accrued expenses | 1,933,073 | 37,403 |
Deferred income from a related party | 406,004 | |
Other current liabilities | 76,948 | |
Lease deposits with a related party | 4,000,000 | (4,000,000) |
Net cash used in operating activities | (13,146,733) | (5,490,681) |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (35,682,287) | (3,615,167) |
Net cash used in investing activities | (35,682,287) | (3,615,167) |
Cash Flow from Financing Activities: | ||
Payments on finance lease liability with a related party | (258,607) | |
Borrowings on land mortgage loan and related financing with a related party | 3,774,627 | |
Proceeds from loan agreements with related parties | 32,000,000 | |
Payments on financing obligation to a related party | (18,804) | |
Proceeds from stock option exercises | 34,670 | |
Preferred stock issuance costs | (86,933) | (85,193) |
Other financing activities | (951) | |
Net cash provided by financing activities | 64,706,657 | 14,781,811 |
Cash and cash equivalents | ||
Beginning of period | 6,031,270 | 355,307 |
End of period | 21,908,907 | 6,031,270 |
Change in cash and cash equivalents | 15,877,637 | 5,675,963 |
Noncash activities | ||
SAFE Conversion | 1,596,003 | |
Conversion of equipment loan to a finance lease liability with a related party | 2,088,655 | |
Accrued purchases of property and equipment | 2,574,304 | |
Series A Preferred Stock | ||
Cash Flow from Financing Activities: | ||
Issuance of Preferred Stock | 4,009,992 | |
Series A-1 Preferred Stock | ||
Cash Flow from Financing Activities: | ||
Issuance of Preferred Stock | 999,990 | |
Series B Preferred Stock | ||
Cash Flow from Financing Activities: | ||
Issuance of Preferred Stock | 4,886,976 | $ 6,083,346 |
Series C Preferred Stock | ||
Cash Flow from Financing Activities: | ||
Issuance of Preferred Stock | $ 28,149,355 |
Description of Business_2
Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Description of Business | |
Description of Business | (1) Description of Business AppHarvest Inc. was founded on January 19, 2018 and together with its subsidiaries (the “Company” or “AppHarvest”) is a sustainable food company creating a resilient and scalable ecosystem of applied technology greenhouses to serve the rapidly growing consumer demand for fresh, chemical-free, non-GMO fruits, vegetables and related products. The Company’s operations through December 31, 2020, have been limited to organizing and staffing, business planning, raising capital, and acquiring and developing properties for controlled environment agriculture. The Company has not generated any revenues through December 31, 2020. On January 29, 2021, pursuant to the business combination agreement and plan of reorganization (“Business Combination Agreement”) with Novus Capital Corporation (“Novus”) and ORGA, Inc., a wholly owned subsidiary of Novus (“Merger Sub”), executed in September 2020, the Company merged with and into Merger Sub (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Novus. On the closing date, the Company changed its name to AppHarvest Operations, Inc. and Novus changed its name from Novus Capital Corporation to AppHarvest, Inc. The Company’s basis of the presentation within these consolidated financial statements do not reflect any adjustment as a result of the Merger closing. The Merger will be accounted for as a reverse recapitalization. Under this method of accounting, AppHarvest will be treated as the accounting acquirer for financial reporting purposes. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. Summary of Significant Accounting Policies Use of Estimates in Condensed Consolidated Financial Statements In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the recording of revenue, valuation of inventory, the valuation of stock-based compensation, the valuation of private warrants, lease accounting, the useful life of fixed assets and income taxes. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the global volatility and general market disruption resulting from the global outbreak of the novel coronavirus disease (“COVID-19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. Accounts Receivables Accounts receivable consist of amounts due from customers in connection with our normal business activities and are carried at sales value less allowance for doubtful accounts. The allowance for doubtful accounts is established to reflect the expected losses of accounts receivable based on past collection history, age, account payment status compared to invoice payment terms and specific individual risks identified. Write-offs are recorded against the allowance for doubtful accounts when all reasonable efforts for collection have been exhausted. The provision at March 31, 2021 and December 31, 2020 did not have a material impact on the condensed consolidated financial statements. Convertible Preferred Stock Prior to the Business Combination, the Company recorded shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company applied the guidance in Accounting Standards Codification (“ASC”) 480-10-S99-3A and therefore classified all of its outstanding redeemable convertible preferred stock as temporary equity. The redeemable convertible preferred stock was recorded outside of stockholders’ equity because, in the event of certain deemed liquidation events considered not solely within the Company’s control, such as a merger, acquisition and sale of all or substantially all of the Company’s assets, the preferred stock would become redeemable at the option of the holders. In the event of a change of control of the Company, proceeds received from the sale of such shares would be distributed in accordance with the liquidation preferences set forth in the Company’s Amended and Restated Certificate of Incorporation then in effect. All convertible preferred stock previously classified as temporary equity was retroactively adjusted and reclassified to permanent equity as a result of the Business Combination. As a result of the Business Combination, each share of redeemable convertible preferred stock that was then issued and outstanding was automatically converted into Legacy AppHarvest Common Stock, such that each converted share of preferred stock was no longer outstanding and ceased to exist. Each share of Legacy AppHarvest common stock, including the Legacy AppHarvest common stock issued upon conversion of Legacy AppHarvest preferred stock, was converted into and exchanged for 2.1504 (the “Exchange Ratio”) shares of the Company’s common stock.The Exchange Ratio was established pursuant to the terms of the Business Combination Agreement. During the three-month period ended March 31, 2020, Legacy AppHarvest issued shares of Legacy AppHarvest Series B redeemable convertible preferred stock to new and existing investors for net proceeds of $4,880. Warrants At March 31, 2021, there were 13,250 warrants to purchase Common Stock outstanding, consisting of 10,500 public warrants (“Public Warrants”) and 2,750 private warrants (“Private Warrants”), (collectively, “Warrants”) held by the Novus initial stockholders. Each warrant entitles the registered holder to purchase one share of Common Stock at a price of $11.50 per share. The warrants expire on January 29, 2026, or earlier upon redemption or liquidation. The Company may redeem the Public Warrants: · In whole and not in part; · At a price of $0.01 per Warrant; · Upon not less than 30 days’ prior written notice of redemption; · If, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and · if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The Public Warrants were determined to be equity classified in accordance with U.S. GAAP. The Private Warrants are identical to the Public Warrants except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As a result of the provisions in the warrant agreement that provide for differences in the mechanics of a cashless exercise dependent upon the characteristics of the warrant holder, and because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provisions preclude the Private Warrant from being classified in equity. Accordingly, the Private Warrants are classified as a liability and remeasured at fair value at each reporting date. The Company accounts for its Private Warrants in accordance with ASC 815-40, under which the Company has determined that the Private Warrants are recognized as liabilities at fair value and subject to re-measurement at each balance sheet date until exercised. Changes in fair value of the Private Warrants is recognized in the Company’s condensed consolidated statement of operations and comprehensive loss. The fair value of the Private Warrants is estimated at each measurement date using a Black-Scholes option pricing model. See Note 5- Fair Value Measurements for inputs used in calculating the estimated fair value. Derivative Financial Instruments Derivative financial instruments are used to manage foreign currency exchange risks. The financial instruments used by the Company are straight-forward, non-leveraged instruments. The counterparties to these financial instruments are financial institutions with strong credit ratings. The Company maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit ratings of these institutions. For all transactions designated as hedges, the hedging relationships are formally documented at the inception and on an ongoing basis in offsetting changes in cash flows of the hedged transaction. The Company records derivative financial instruments on the condensed consolidated balance sheets as either an asset or liability measured at its fair value. Changes in a derivative's fair value (i.e. unrealized gains or losses) are recorded each period in earnings unless the derivative qualifies as a hedge on future cash flows. Gains and losses related to a hedge are either recognized in income immediately to offset the gain or loss on the hedged item, or deferred and recorded in the stockholders' equity section of the condensed consolidated balance sheets as a component of accumulated other comprehensive loss (“AOCL”) and subsequently recognized in the condensed consolidated statements of operations and comprehensive loss when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge, if any, is recognized in income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded to net income immediately. New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 is part of the FASB’s overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes certain exceptions to the general principles of ASC 740, Income Taxes, in order to reduce the cost and complexity of its application in the areas of intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date losses in interim periods and other areas within ASC 740. The Company adopted ASU 2019-12 on January 1, 2021 and the adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the condensed consolidated financial statements . | (2) Summary of Significant Accounting Policies The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and are presented in U.S. Dollars. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and an Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). a) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, the valuation of instruments issued for financing and stock-based compensation, lease accounting and income taxes. The Company utilizes estimates and assumptions in determining the fair value of its Common Stock and other equity instruments. The fair value was determined using valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation . The Company granted stock options at exercise prices not less than the fair value of its Common Stock, as determined by the Board of Directors contemporaneously at the date such grants were made, with input from management. The fair value of Common Stock at the grant date was determined to have been higher in connection with retrospective fair value assessments for financial reporting purposes. The exercise prices of the stock option awards affected by the retrospective fair value assessment were not modified. The Company’s retrospective fair value assessment estimated the fair value of the Company’s Common Stock based on a number of objective and subjective factors, including external market conditions affecting the Company’s industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s Common Stock at the time, and the likelihood of achieving a Deemed Liquidity Event, as defined, such as a public offering or sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of Common Stock and other equity instruments at each valuation date. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the impact from the global outbreak of the novel coronavirus disease (“COVID‑19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. b) Principles of Consolidation The Company consolidates entities in which it holds a controlling financial interest. For voting interest entities, the Company is considered to hold a controlling financial interest when it is able to exercise control over the investees’ operating and financial decisions. The Company does not have interests in any entities that would be considered variable interest entities. All significant intercompany balances and transactions have been eliminated in consolidation. c) Cash and Cash Equivalents The Company considers all highly liquid, short-term investments with an original maturity date of three months or less to be cash equivalents. The Company deposits its cash and cash equivalents in a commercial bank. From time to time, cash balances in these accounts exceed the Federal Deposit Insurance Corporation insured limits. The Company mitigates exposure to credit risk by placing cash and cash equivalents with highly rated financial institutions. To date, the Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk on its cash and cash equivalents. At December 31, 2020, cash and cash equivalents includes $5,646,392 of cash restricted for future minimum lease payments and operating and maintenance costs associated with the Company’s lease with a related party (see Note 8(a)). The Company had no restricted cash balances at December 31, 2019. d) Fair Value Measurements and Disclosures Carrying values of cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses, other current liabilities, and notes payable approximate fair values because of their short-term nature. There were no material assets or liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and 2019. e) Inventories Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Finished goods inventories represent costs associated with boxed produce not yet sold. Growing crop inventories primarily represent the costs associated with growing produce within the Company’s controlled environment agriculture facilities. Materials and supplies primarily represent growing and packaging supplies. Inventory costs are comprised of the purchase and transportation cost plus production labor and overhead. f) Long-Lived Assets Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for additions or renewals and improvements are capitalized; expenditures for maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its economic life are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: · Building: 25 years · Leasehold and building improvements: the lessor of the lease term or 4 to 10 years. · Machinery: 5 to 10 years · Equipment: 3 to 10 years Assets held under financing leases are recorded at the net present value of the minimum lease payments, net of incentives provided by the lessor. Depreciation expense for assets held under financing leases is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. If the related lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise or the lease transfers ownership of the underlying asset to the Company by the end of the lease term, depreciation expense is computed over the estimated useful life of the asset. Impairment Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of a long-lived asset or asset group may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company did not record any impairment losses for the years ended December 31, 2020 and 2019. g) Leases The Company determines if an arrangement contains a lease at inception. The right-of-use assets, net and liabilities associated with leases are recognized based on the present value of the future minimum lease payments over the lease term. The Company uses its incremental borrowing rate at the recognition date in determining the present value of future payments for leases that do not have a readily determinable implicit rate. Lease terms reflect options to extend or terminate the lease when it is reasonably certain that the option will be exercised. For leases that include residual value guarantees or payments for terminating the lease, the Company includes these costs in the lease liability when it is probable such costs will be incurred. Right-of-use assets and obligations for short-term leases (leases with an initial term of 12 months or less) are not recognized in the consolidated balance sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. When contracts contain lease and non-lease components, the Company generally accounts for both components as a single lease component. h) Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of December 31, 2020 and 2019, the Company does not have any uncertain tax positions. The Company’s policy is to recognize interest and penalties on uncertain tax positions as income tax expense. i) Retirement Plans The AppHarvest 401(k) Plan provides for matching contributions. The Company incurred $105,007 and $11,154 of expenses associated with the 401(k) Plan for the years ended December 31, 2020 and 2019, respectively. j) Stock-Based Compensation The Company recognizes in its Consolidated Statements of Operations and Comprehensive Loss the grant-date fair value of stock options, restricted stock awards, and restricted stock units issued to employees and directors. All the Company’s stock option and restricted stock awards are subject only to service-based vesting conditions. Stock-based compensation expense related to stock options and restricted stock awards is recognized on a straight-line basis over the associated service period of the award, which is generally the vesting term. Restricted stock unit awards are subject to both service- and performance-based vesting conditions. The Company recognizes forfeitures of awards as they occur. The Company estimates the fair value of its restricted stock units and restricted stock awards based upon the fair value of the common stock at the date the terms of the awards are mutually agreed upon between the Company and the holder. The Company estimates the fair value of its stock option awards using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (a) the expected stock price volatility, (b) the calculation of expected term of the award, (c) the risk-free interest rate, and (d) expected dividends. Due to the lack of a public market for the trading of the Company’s Common Stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded and have similar characteristics to the Company. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 107, Share-Based Payment , to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted to employees. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among its employee population. The expected term of the stock option awards granted historically was assumed to be the weighted average between the options contract life and the vesting term of the underlying award (based upon the underlying arrangement). The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. k) Development Fee Income from a Related Party The Company recognizes development fee income related to indirect limited oversight services it performs in connection with the greenhouse construction site in Morehead, Kentucky (see Note 8(a)). The development fee of $750,000 was received in May 2019 and was recognized on a straight-line basis, consistent with the level of service, through October 2020, the date when the Morehead Facility reached substantial completion. l) Net Loss Per Common Share The Company’s basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of Common Stock outstanding for the period. The diluted net loss per common share is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, stock options to purchase Common Stock, restricted stock units and redeemable convertible preferred stock are considered to be Common Stock equivalents but have been excluded from the calculation of diluted net loss per common share as their effect is anti-dilutive. m) Advertising Advertising costs are expensed when incurred. Advertising expense for the years ended December 31, 2020 and 2019 was $142,305 and $40,217, respectively, and is included in selling, general, and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. n) Segment Information The Company is organized as a single operating segment. All the assets and operations of the Company are located in the United States (“U.S.”) o) Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events. Comprehensive loss was equal to net loss for all periods presented. p) Distribution Agreement On March 28, 2019, the Company entered into a Purchase and Marketing Agreement (the “Mastronardi Morehead Agreement”) with Mastronardi Produce Limited (“Mastronardi”) pursuant to which Mastronardi will be the sole and exclusive marketer and distributor of all tomatoes, cucumbers, peppers, berries and leafy greens produced at the Company’s controlled environment agriculture facility in Morehead, Kentucky that meet certain quality standards (collectively, the “Products”). Under the terms of the Mastronardi Morehead Agreement, the Company is responsible for growing, producing, packing, and delivering the Products to Mastronardi, and Mastronardi is responsible for marketing, branding and distributing the Products to its customers. Mastronardi will pay the Company market prices for the Products that are consistent with the best and highest prices available during the duration of the applicable growing season for like kind U.S. Department of Agriculture Grade No. 1 products. Mastronardi will set the market price for the Products and will pay over to the Company the gross sale price of the Product sold by Mastronardi, less a marketing fee and Mastronardi’s costs incurred in the sale and distribution of the Products. If Mastronardi rejects, returns or otherwise refuses Products for failure to meet certain quality standards, the Company has the right, at its cost and expense, to sell or otherwise dispose of the Products, subject to certain conditions. The Mastronardi Morehead Agreement has a term of 10 years. The Company has a limited, one-time right to terminate the Mastronardi Morehead Agreement if certain return targets are not reached. During the term of the Mastronardi Morehead Agreement, Mastronardi has a right of first refusal to enter into similar arrangements with regard to any additional growing facilities the Company established in Kentucky or West Virginia. As of December 31, 2020, the Company has commenced commercial production, but has not yet sold any Product to Mastronardi. Once product distribution commences, the Company will derive substantially all of its revenue from sales to Mastronardi. q) Deferred offering costs Deferred offering costs, which primarily consist of direct incremental legal and accounting fees related to the Merger and related equity issuances, are capitalized. The deferred offering costs will be offset against Merger and equity issuance proceeds upon the consummation of the offering. Deferred offering costs were $1,126,619 at December 31, 2020, and reflected in Other assets in the Consolidated Balance Sheets. No amounts were incurred or deferred as of December 31, 2019. r) Selling, general and administrative expenses Selling, general and administrative expenses primarily consist of payroll and payroll related expenses, stock-based compensation, legal and professional costs, rent expense, marketing and advertising, communications, insurance and various other personnel and office related costs. During the year ended December 31, 2020, $2,213,906 of start-up expenses related to pre-commencement commercial activities at the controlled environment agriculture facility in Morehead, Kentucky were expensed as incurred by the Company and recorded within selling, general and administrative expenses within the consolidated statement of operations and comprehensive loss. |
Accrued Expenses_2
Accrued Expenses | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | ||
Accrued Expenses | 8. Accrued Expenses Accrued expenses are as follow: March 31, 2021 December 31, 2020 Payroll and related $ 2,237 $ 563 Professional service fees 2,284 693 Construction costs 1,408 2,574 Other accrued liabilities 935 352 Incentive compensation 864 — Utilities 476 384 Interest on convertible debt with a related party — 618 Total accrued expenses $ 8,204 $ 5,184 | (3) Accrued Expenses Accrued expenses consist of the following as of December 31: 2020 2019 Accrued construction costs $ $ — Accrued professional service fees $ 693,206 $ 35,792 Accrued interest on convertible debt with a related party 618,082 — Accrued payroll 562,641 1,644 Accrued utilities 383,852 — Other accrued liabilities 351,795 11,799 Total accrued expenses $ 5,183,880 $ 49,235 |
Inventories, net
Inventories, net | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Inventories, net | 6. Inventories Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Finished goods inventories represent costs associated with boxed produce not yet sold. Growing crop inventories primarily represent the costs associated with growing produce within the Company’s CEA facilities. Materials and supplies primarily represent growing and packaging supplies. Inventory costs are comprised of the purchase and transportation cost plus production labor and overhead. Inventories consisted of the following: March 31, 2021 December 31, 2020 Growing crops $ 3,275 $ 2,606 Raw materials 1,597 781 Finished goods 31 — Total inventories, net $ 4,903 $ 3,387 | (4) Inventories, net Inventories, net consisted of the following at December 31, 2020: Finished goods $ — Raw materials Growing crops Total inventories, net $ |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment, net | 7. Property and Equipment Property and equipment at cost and accumulated depreciation are as follows: March 31, 2021 December 31, 2020 Land $ 19,449 $ 7,277 Buildings 76,165 57,362 Machinery and equipment 43,357 9,581 Construction in progress 50,824 78,174 Leasehold improvements 2,320 871 Less: accumulated depreciation (1,153) (620) Total property and equipment, net $ 190,962 $ 152,645 Depreciation expense for the three months ended March 31, 2021 and 2020 was $1,772 and $21, respectively. During the three months ended March 31, 2021, the Company continued construction on the two additional CEA facilities in Berea, Kentucky and Richmond, Kentucky. The Company also acquired the Morehead CEA facility and related property from Equilibrium Controlled Environment Foods Fund, LLC and its affiliates (“Equilibrium”), a related party (See Note 10(a)). The purchase price for the Morehead CEA facility was $125,000, which was equal to a multiple of Equilibrium’s cost of acquire, develop and construct the Morehead CEA facility. The Morehead CEA facility was placed in service during the three months ended March 31, 2021. As of December 31, 2020, building cost included $56,748 related to Morehead CEA facility right-to-use assets held under a finance lease with Equilibrium. | (5) Property and Equipment, net Property and equipment at cost and accumulated depreciation at December 31, 2020 and 2019 are as follows: December 31, 2020 Original Accumulated Assets cost depreciation net Land $ 3,678,296 $ — $ 3,678,296 Land with a related party – see Note 8(a) 3,599,324 — 3,599,324 Buildings 57,362,041 (436,209) 56,925,832 Construction in progress 23,525,658 — 23,525,658 Construction in progress with a related party – see Note 8(a) 54,648,634 — 54,648,634 Automobiles 151,898 (14,791) 137,107 Leasehold improvements 871,259 (17,660) 853,599 Equipment 1,803,347 (68,074) 1,735,273 Machinery 7,625,332 (83,720) 7,541,612 $ 153,265,789 $ (620,454) $ 152,645,335 December 31, 2019 Original Accumulated Assets cost depreciation net Land with a related party – see Note 8(a) $ 3,599,324 $ — $ 3,599,324 Equipment 25,399 (7,235) 18,164 Machinery 95,512 (11,926) 83,586 $ 3,720,235 $ (19,161) $ 3,701,074 Depreciation expense for property and equipment for the year ended December 31, 2020 and 2019 was $175,843 and $16,129, respectively. Building cost includes $56,747,769 related to right-to-use assets held under a finance lease with a related party (see Note 8(a)). |
Income Taxes_2
Income Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 13. Income Taxes The Company’s effective income tax rate was (7.6)% and 0% for the three months ended March 31, 2021 and 2020, respectively. The variance from the U.S. federal statutory rate of 21% for the three months ended March 31, 2021 was primarily attributable to a change in the Company’s valuation allowance. The Company’s income tax provision is impacted by a valuation allowance on the Company’s net deferred tax assets, net of reversing taxable temporary differences and considering future annual limitations on net operating loss carryforward utilization enacted by U.S. tax reform legislation. The Company maintains a valuation allowance on its net deferred tax assets for all periods presented as the Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all the recorded deferred tax assets will not be realized in future periods. There was no income tax expense recognized in the three months ended March 31, 2020. | (6) Income Taxes For the years ended December 31, 2020 and 2019, the Company incurred net operating losses and, accordingly, no current provision for income taxes has been recorded. Income tax expense for the year ended December 31, 2020 consisted of the following components: Deferred income taxes: Federal $ State Total deferred income taxes Total income tax expense $ 9,186 For the year ended December 31, 2019, no deferred income tax benefit for income taxes was recorded due to the uncertainty of the realization of net deferred tax assets. The reconciliation of the statutory federal income tax with the provision for income taxes are as follows for the years ended December 31: 2020 2019 Loss before income taxes $ (17,438,519) $ (2,746,021) Income tax benefit at U.S. Federal statutory rate (3,662,089) (576,664) Permanent items 211,193 95,081 Change in valuation allowance 4,121,884 572,404 State income taxes, net of U.S. Federal income tax benefit (661,802) (90,821) Income tax expense $ 9,186 $ — The Company has considered the impact of state rate changes, apportionment weighting and state filing positions when determining its state effective tax rate. The Company adjusts its state effective tax rate for enacted law changes during the year. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income and for tax carryforwards. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 4,856,533 $ 812,183 Lease liabilities 15,679,593 39,604 Financing obligation 15,581,566 962,009 Other 19,607 3,811 36,137,299 1,817,607 Valuation allowance (4,921,773) (799,889) 31,215,526 1,017,718 Deferred tax liabilities: Property and equipment $ (30,879,012) $ (982,871) Operating lease right-of-use assets (349,375) (38,522) (31,228,387) (1,021,393) Net deferred tax liabilities $ (12,861) $ (3,675) When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. The Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets, and accordingly, a full valuation allowance has been provided on its net deferred tax assets as of December 31, 2020 and 2019. The valuation allowance increased $4,121,884 during the year ended December 31, 2020, primarily as a result of an increase in net operating loss carryforwards. The Company continues to monitor the need for a valuation allowance based on the sources of future taxable income. At December 31, 2020, the Company has $19,477,629 of federal net operating loss carryforwards that have no expiration. The Company has $19,398,243 of state net operating loss carryforwards that have no expiration. Under the provisions of the Internal Revenue Code, net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may be subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders by more than 50% over a three-year period, as defined in Sections 382 and 383 of the Internal Revenue Code and similar state provisions. The amount of the annual limitation is determined based on the value of the Company immediately before the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not completed a study to assess whether a change of control has occurred or whether there have been multiple changes of control since the date of the Company’s formation and that there could be additional changes in control in the future. As a result, the Company is unable to estimate the effect of these limitations, if any, on the Company’s ability to utilize net operating losses in the future. A valuation allowance has been provided against the Company’s net operating and tax credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the net operating loss carryforward and the valuation allowance. As of December 31, 2020 and 2019, the Company had no accrued uncertain tax positions or associated interest or penalties and no amounts have been recognized in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company files income tax returns in the U.S. federal jurisdiction and state jurisdictions. The tax years since inception remain open and subject to examination by federal and state taxing authorities. |
Notes Payable with a Related _3
Notes Payable with a Related Party | 12 Months Ended |
Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | |
Notes Payable with a Related Party | (7) Notes Payable with a Related Party On May 12, 2020, the Company entered into a loan agreement with Equilibrium Controlled Environment Foods Fund, LLC and its affiliates (“Equilibrium”), a related party, to finance the purchase of equipment to be used in the Company’s operations in Morehead, Kentucky (the “Equipment Loan”.) The loan agreement had a principal balance of $2,000,000 and an interest rate of 9.5% per year. In October 2020, as a result of completion of the Morehead Facility (see Note 8(a)) and subsequent occupancy, the principal balance of the loan was extinguished and added to the future base rent calculation to be paid over the term of the lease. On September 28, 2020, the Company entered into a convertible promissory note with Inclusive Capital Partners Spring Master Fund, L.P., a related party, to finance capital investments and operating needs (the “Convertible Note”). The Convertible Note has a principal balance of $30,000,000 and bears simple interest at 8.0% per annum. The outstanding principal amount of the Convertible Note and any unpaid accrued interest shall automatically convert into shares of Novus at a conversion price equal to $9.50 per share upon closing of a Business Combination Agreement. Absent such conversion, all unpaid interest and principal shall be due and payable upon demand on or after September 28, 2021. The Company has recorded the Convertible Note as a current liability at December 31, 2020. The Convertible Note includes certain other terms which can accelerate and/or change the manner in which the Convertible Note are redeemed or converted. In a change in control, the holders of the Convertible Note can demand repayment of principal, accrued but unpaid interest, and a repayment premium in the amount of 50% of principal. In addition, upon a future equity financing event, the holder of the Convertible Note may elect to convert the outstanding principal and interest into the most senior stock of the Company issued in such a financing at the lower of 80% of the price paid by such investor or based on a valuation of $500 million. A merger between the Company and Novus, and any merger related financings, do not qualify as a change in control or future financing event under the terms of the Convertible Note. The fair value of these embedded derivatives was not significant at issuance or at December 31, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS | 10. Commitments and Contingencies (a) On March 1, 2021, the Company closed on the Membership Interest Purchase and Sale Agreement (the “MIPSA”) with Equilibrium that was entered into in December 2020, pursuant to which it purchased from Equilibrium 100% of its membership interests in its subsidiary, Morehead Farm LLC. The purchase price for Morehead Farm LLC (“Morehead Farm”) was $125,000 which was equal to a multiple of Equilibrium’s cost to acquire, develop and construct the Morehead Facility. At closing, Morehead Farm LLC, which owns the Morehead facility, became a wholly owned subsidiary of the Company. Concurrent with the closing of the MIPSA the Master Lease Agreement that the Company had entered into on May 13, 2019 with Morehead Farm LLC to lease the Morehead facility and ancillary agreements related thereto, were terminated. As a result, the closing date balances of $66,504 for the financing obligation related to construction in progress assets and $58,496 for the finance lease liability related to the completed portion of the Morehead facility were settled and de-recognized from the Company’s unaudited condensed consolidated balance sheet. (b) The Company’s other lease portfolio is primarily comprised of operating leases for offices. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on whether the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating lease right-of-use assets, net and liabilities are recognized within the condensed consolidated balance sheets based on the present value of lease payments over the lease term. As the implicit rate is generally not readily determinable for most leases, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate reflects the estimated rate of interest that the Company would pay to borrow on a collateralized basis over a similar term in a similar economic environment. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Leases may include renewal options, and the renewal option is included in the lease term if the Company concludes that it is reasonably certain that the option will be exercised. A certain number of the Company’s leases contain rent escalation clauses, either fixed or adjusted periodically for inflation of market rates, that are factored into the calculation of lease payments to the extent they are fixed and determinable at lease inception. For the period ended March 31, 2021 and 2020 the Company recognized $97 and $14, respectively, of operating lease expense in selling, general and administrative expense (“SG&A”) within the unaudited condensed consolidated statement of operations and comprehensive loss. The future minimum rental payments required under the leases for each year of the next five years and in the aggregate thereafter are as follows: Operating leases Remainder of 2021 $ 319 2022 426 2023 415 2024 368 2025 355 2026 and thereafter 729 Total minimum payments required 2,612 Less: imputed interest costs (1) (462) Present value of net minimum lease payments (2) $ 2,150 Weighted-average imputed interest rate 6.32 % Weighted-average remaining lease term 6.3 (1) (2) Period Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 52 $ 10 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 735 $ 30 (c) Agreements with Dalsem The Company entered into agreements with Dalsem Greenhouse Technology, B.V. (“Dalsem”) for the construction of new CEA facilities in Richmond, Kentucky and Berea, Kentucky on November 20, 2020 and December 11, 2020, respectively. Under terms of the agreements, Dalsem will provide certain services related to the design, engineering, procurement, construction, startup and testing of a greenhouse and certain ancillary facilities at each site. Total costs under the agreements are based on actual costs incurred by Dalsem and payments are due upon the completion of certain established project milestones, with a portion of each payment due in Euros and a portion due in U.S. dollars. Either party is entitled to terminate the agreements upon the occurrence of certain events of default and the Company is entitled to terminate the agreements if Dalsem fails to meet certain performance requirements. The Company may also terminate the agreements without cause with written notice and a termination payment to Dalsem. (d) Purchase Commitments There were no purchase commitments that were unrecorded at March 31, 2021 and December 31, 2020, respectively. | (8) Commitments and Contingencies (a) Equilibrium Transactions On April 15, 2019, the Company entered into a mortgage loan with Equilibrium, a related party, to finance the purchase of land from a third party in Morehead, Kentucky (the “Morehead Land”). The loan had a principal balance of $3,481,222 and bore interest at 8.00% per year. On May 13, 2019, the Company entered a series of agreements with Equilibrium, resulting in the sale of the legal entity that was established to purchase the Morehead Land. The net assets of the entity sold to Equilibrium included the land, related permitting and the mortgage note owed to Equilibrium. On that same date, the Company also entered into a Master Lease Agreement (the “Master Lease Agreement”) with Morehead Farm LLC (“Morehead Farm”) for an indoor controlled agriculture facility on a portion of the Morehead Land (the “Morehead Facility”). The Master Lease Agreement had an initial term of 20 years commencing at substantial completion of construction and included a ground lease for the Morehead Land. In October 2020, the Company took occupancy of the completed portion of the Morehead Facility, resulting in lease commencement under the Master Lease Agreement. Lease payments under the Master Lease Agreement consisted of a base rent calculated as a percentage of defined construction costs, certain non-lease costs and rent based on gross revenues generated from the Morehead Facility. Equilibrium maintains an option to sell, and the Company is required to purchase, any excess land not otherwise utilized by the construction of the Morehead Facility at a price equal to the original cost of acquisition. During the term of the Master Lease Agreement, the Company has a right of first refusal to purchase the Morehead Land. The Company has accounted for the transfer of the Morehead Land to Equilibrium in 2019 as a financing transaction. On March 1, 2021, the Company closed on the Membership Interest Purchase and Sale Agreement with Equilibrium that was entered into in December 2020, pursuant to which it purchased from Equilibrium 100% of the membership interests in Morehead Farm (the “Membership Interest Purchase and Sale Agreement”). The purchase price for Morehead Farm was $125,000,055, which was equal to a multiple of Equilibrium’s cost to acquire, develop and construct the Morehead Facility. At closing, Morehead Farm, an Equilibrium subsidiary which owns the Morehead facility, became a wholly owned subsidiary of the Company. Concurrent with the closing of the Membership Interest Purchase and Sale Agreement, the Master Lease Agreement and ancillary agreements related thereto, were terminated. At December 31, 2020, the Company maintains a finance lease liability with Equilibrium of $59,216,485 related to the completed portion of the Morehead Facility and a related right-of-use asset at cost of $56,747,769. At December 31, 2020, the Company also has construction-in-progress assets of $54,648,634, and a corresponding financing obligation of $58,795,309 with Equilibrium for the portion of the Morehead Facility that remains under construction. The Company controls the remaining Morehead Facility construction activities. The finance lease liability and financing obligation related to the Morehead Facility have been recorded within current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2020, since the closing of the Membership Interest Purchase and Sale Agreement occurred within twelve months of the balance sheet date. (b) Other Leases The Company’s other lease portfolio is primarily comprised of operating leases for offices. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on whether the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating lease right-of-use assets, net and liabilities are recognized within the Consolidated Balance Sheets based on the present value of lease payments over the lease term. As the implicit rate is generally not readily determinable for most leases, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate reflects the estimated rate of interest that the Company would pay to borrow on a collateralized basis over a similar term in a similar economic environment. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Leases may include renewal options, and the renewal option is included in the lease term if the Company concludes that it is reasonably certain that the option will be exercised. A certain number of the Company’s leases contain rent escalation clauses, either fixed or adjusted periodically for inflation of market rates, that are factored into the calculation of lease payments to the extent they are fixed and determinable at lease inception. For the year ended December 31, 2020 and 2019, the Company recognized $168,955 and $70,129, respectively, of operating lease expense, including short-term lease expense and variable lease costs, which were immaterial. Rent expense is included in selling, general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss. The future minimum rental payments required under the leases for each year of the next five years ending December 31, and in the aggregate thereafter are as follows: Finance Lease Operating with leases Equilibrium 2021 $ 258,225 $ 59,446,868 2022 280,977 — 2023 270,112 — 2024 276,780 — 2025 264,928 — 2026 and thereafter 549,488 — Total minimum payments required 1,900,510 59,446,868 Less: imputed interest costs (1) (363,694) (230,383) Present value of net minimum lease payments (2) $ 1,536,816 $ 59,216,485 Weighted-average imputed interest rate 6.29 % 4.72 % Weighted-average remaining lease term 6.9 0.2 (1) Represents the amount necessary to reduce net minimum lease payments to present value using actual rate in the lease agreement or the Company’s incremental borrowing rate at lease inception. (2) Included in the Consolidated Balance Sheet as of December 31, 2020 as current lease liability with a related party of $59,216,485, current lease liability with other parties of $166,354, and noncurrent lease liability of $1,370,462. Supplemental Consolidated Statement of Cash Flow information is as follows for the years ended December 31: 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 96,104 $ 37,668 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,441,486 $ 160,948 (c) Agreements with Dalsem The Company entered into agreements with Dalsem Greenhouse Technology, B.V. (“Dalsem”) for the construction of new greenhouse facilities in Richmond, Kentucky and Berea, Kentucky on November 20, 2020 and December 11, 2020, respectively. Under terms of the agreements, Dalsem will provide certain services related to the design, engineering, procurement, construction, startup and testing of a greenhouse and certain ancillary facilities at each site. Total costs under the agreements are based on actual costs incurred by Dalsem and payments are due upon the completion of certain established project milestones, with a portion of each payment due in Euros and a portion due in U.S. dollars. Either party is entitled to terminate the agreements upon the occurrence of certain events of default and the Company is entitled to terminate the agreements if Dalsem fails to meet certain performance requirements. The Company may also terminate the agreements without cause with written notice and a termination payment to Dalsem. (d) Purchase Commitments There were no purchase commitments that were unrecorded at December 31, 2020 and 2019. |
Stock Compensation Plan
Stock Compensation Plan | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation Plan | (9) Stock Compensation Plan In 2018, the Company adopted a stock compensation plan (the “Plan”) pursuant to which the Company’s Board of Directors may grant stock awards to officers, key employees and directors. The Plan initially authorized awards to purchase up to 1,382,983 shares of Common Stock. The Plan was amended in December 2019 to allow for an additional 1,472,401 shares of Common Stock to be issued. The Plan provides for both incentive and nonqualified stock options. The options granted under the Plan may only be granted with an exercise price of not less than fair market value of the Company’s common stock on the date of grant. Awards under the Plan may be either vested or unvested options and each award will specify the vesting period or requisite performance conditions. The incentive stock options (“ISO”) that have been granted generally vest over 48 months, with 25% vesting at the end of the first year and ratable vesting thereafter for the next 36 months. The nonqualified stock options (“NSO”) that have been granted vest ratably over 10 to 36 months. The ISOs and NSOs generally expire ten years after the date of grant. The fair value of the ISOs and NSOs on the date of grant is recognized as an expense over the requisite service period. The Company uses the Black-Scholes option-pricing model to calculate the fair value of the options granted. The grant date fair value was based on the following assumptions used within the Black-Scholes option pricing model for the years ended December 31: 2020 2019 Expected term 5.80 5.72 Risk-free interest rate 0.41 % 2.27 % Expected volatility 49.45 % 40.98 % Expected dividend yield — % — % The following table summarizes stock option activity for the year ended December 31, 2020: Weighted Average average remaining exercise contractual Options Shares price term Outstanding at December 31, 2019 1,004,000 $ 0.46 9.39 Granted 471,734 1.20 Exercised (73,750) 0.50 Forfeited or expired (17,000) 1.20 Outstanding at December 31, 2020 1,384,984 $ 0.70 8.71 Expected to vest, December 31, 2020 796,680 0.80 8.84 Exercisable, December 31, 2020 588,304 0.57 8.53 The Company recorded $153,897 and $101,357 of stock-based compensation expense for options issued to employees and directors during the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and 2019, unrecognized stock-based compensation expense of $366,349 and $200,278, respectively, is related to non-vested options granted, which is anticipated to be recognized over the next weighted average 2.20 years and 2.79 years, respectively, commensurate with the remaining requisite service period. Aggregate intrinsic value represents the estimated fair value of the Company’s Common Stock at the end of the period in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable. The intrinsic value for all outstanding options as of December 31, 2020 was $39,108,581 and $16,690,075 for those awards exercisable. The intrinsic value of options forfeited in the year ended December 31, 2020 was $471,580. No options were forfeited as of December 31, 2019. The weighted average grant date fair value of options granted during the years ended December 31, 2020 and 2019 was $0.70 and $0.30, respectively. The total intrinsic value of options exercised in the year ended December 31, 2020 was $2,099,660. No options were exercised as of December 31, 2019. The Company will use authorized and unissued shares to satisfy award exercises. During the year ended December 31, 2020, the Company granted Restricted Stock Units (“RSU”) to directors, officers, and employees. The following table summarizes RSU activity for the year ended December 31, 2020: Weighted average grant date fair RSUs Units value Outstanding at December 31, 2019 — $ — Granted 1,396,000 19.13 Vested — — Forfeited (212,500) 17.02 Unvested at December 31, 2020 1,183,500 $ 19.51 Expected to vest, December 31, 2020 1,183,500 $ 19.51 The RSUs contain performance and service vesting conditions. The requisite service period for 1,083,500 of the RSUs outstanding at December 31, 2020, is 48 months, with 25% vesting at the end of the first year and ratable vesting every 3 months thereafter for the next 36 months. The remaining 100,000 RSUs vest ratably every 3 months over 36 months. Vesting of the RSUs is also dependent upon a liquidity event, which has not occurred at December 31, 2020. Accordingly, the Company has not recognized any stock-based compensation related to the RSUs through the period ended December 31, 2020. As of December 31, 2020, unrecognized stock-based compensation expense of $23,091,450 is related to non-vested RSUs granted. On October 8, 2018, the Company granted a restricted stock award to a director with a twelve-month requisite service period. The award share total was 100,000 and the grant date fair value was based upon a Common Stock value of $0.50. The award was fully vested by December 31, 2019. The number of shares vested was 0 and 83,334 during the year ended December 31, 2020 and 2019, respectively. Stock-based compensation expense recognized related to this restricted stock award was $0 and $38,441 in the years ended December 31, 2020 and 2019, respectively. Aggregate stock-based compensation expense of $153,897 and $139,798 for the year ended December 31, 2020 and 2019, respectively, is included in selling, general, and administrative expense within the Company’s Consolidated Statements of Operations and Comprehensive Loss. |
SAFE Notes
SAFE Notes | 12 Months Ended |
Dec. 31, 2020 | |
SAFE Notes | |
SAFE Notes | (10) SAFE Notes During 2018, the Company raised $1,225,000 by entering into SAFE Notes with several parties. The Simple Agreement for Future Equity (“SAFE”) Notes resulted in cash proceeds to the Company in exchange for the right to certain capital units of the Company or cash upon occurrence of a future financing. The SAFE Notes had an Adjusted Purchase Amount, calculated as the amount originally invested by the SAFE Note counterparty plus 5% per year, non-compounding. The SAFE Notes allowed the holder to participate in the future equity financings through a share-settled redemption. The SAFE Notes would automatically convert into preferred shares upon a future equity financing in which the Company sold shares of its preferred stock. The number of shares into which the SAFE Notes would convert would be the greater of (a) a stated valuation cap divided by the number of shares outstanding before the capital raise transaction or (b) the Adjusted Purchase Amount divided by the per-share price of the issued preferred stock less a discount of 20%. The number of shares that could be issued upon conversion of SAFE Notes was not limited. Upon an event of liquidation or dissolution, SAFE Noteholders would receive cash payment based on the Adjusted Purchase Amount in satisfaction of the SAFE Note. SAFE Noteholders did not have dividend or voting rights. The Company determined that the SAFE Notes were not legal form debt (i.e., no creditors’ rights) but allowed for redemption based upon certain events that are outside of the control of the Company. The SAFE Notes were classified as marked-to-market liabilities pursuant to ASC 480, Distinguishing Liabilities from Equity. The SAFE Notes were measured at fair value, with changes in fair value recorded within loss on SAFE Note revaluation within the Consolidated Statement of Operations and Comprehensive Loss. In conjunction with the issuance of Series A Redeemable Convertible Preferred Stock (“Series A Preferred Stock”) in March 2019, the SAFE Notes were converted into shares of Series A Preferred Stock and Common Stock in accordance with the terms of the Series A Preferred Stock Investment Agreement. |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2020 | |
Redeemable Convertible Preferred Stock | |
Redeemable Convertible Preferred Stock | (11) Redeemable Convertible Preferred Stock On March 27, 2019, the Company issued 2,111,856 of $0.0001 par value Series A Preferred Stock for cash of $1.8988 per share, for total proceeds of $4,009,992, less issuance costs of $56,647, for net proceeds to the Company of $3,953,345. Concurrently, upon conversion of SAFE Notes, the Company issued 658,309 shares of $0.0001 par value Series A Preferred Stock and 576,677 shares of Common Stock. On June 7, 2019, the Company issued 392,276 shares of $0.0001 par value Series A‑1 Redeemable Convertible Preferred Stock (the “Series A‑1 Preferred Stock”) for cash of $2.5492 per share, for total proceeds of $999,990, less issuance costs of $7,705, for net proceeds to the Company of $992,285. On several dates in December 2019, the Company issued 1,483,491 shares of $0.0001 par value Series B Redeemable Convertible Preferred Stock (the “Series B Preferred Stock”) for cash of $4.1681 per share, for total proceeds of $6,083,346, less issuance costs of $20,841, for net proceeds to the Company of $6,062,505. Total and net proceeds include subscription receivable of $99,993, which is recorded in mezzanine equity on the consolidated balance sheet as of December 31, 2019. In the first quarter of 2020, the Company concluded a Series B Preferred Stock funding by issuing 1,148,481 shares of $0.0001 par value Series B Preferred Stock for $4.1681 per share, for total proceeds of $4,886,976, less issuance costs of $7,070, for net proceeds to the Company of $4,879,906. In July 2020, the Company issued 5,130,658 shares of $0.0001 par value Series C Redeemable Convertible Preferred Stock (the "Series C Preferred Stock") for $5.4865 per share, for total proceeds of $28,149,355, less issuance costs of $79,863, for net proceeds to the Company of $28,069,492. The Series A, A‑1, B, and C Preferred Stock is referred to collectively as “Preferred Stock.” Due to the contingent redeemable nature of the Company’s Preferred Stock upon a Deemed Liquidation Event as further discussed below, the Company’s Preferred Stock has been classified as temporary equity. However, the Preferred Stock was not currently redeemable as of December 31, 2020 and 2019 as the redemption depends on a Deemed Liquidation Event that was not probable of occurrence. The Preferred Stock is not being accreted to its liquidation preference, as it is not probable that the Preferred Stock will become redeemable as of December 31, 2020 and 2019. Voting The holders of Preferred Stock are entitled to the number of votes equal to the number of whole shares of Common Stock into which the shares of the applicable series of Preferred Stock are convertible. Except as provided otherwise by law or the Company’s certificate of incorporation, the holders of Preferred Stock vote together with the holders of Common Stock as a single class. Certain significant actions must be approved by at least 50% of the holders of Preferred Stock voting as a single class on an as converted basis. Such significant actions include but are not limited to increase of the authorized number of shares, authorization of a new class of preferred shares, redemption of shares, declaration of dividends, changes in the authorized numbers of directors constituting the Board of Directors, liquidation or Deemed Liquidation, amendments to the certificate of incorporation and bylaws, and other. Additionally, certain actions affecting Series B Preferred Stock rights or Series C Preferred Stock Rights require approval of at least 50% of the holders of the corresponding Series. Several named holders of the Company’s Preferred Stock and Common Stock designate four members of the Company’s Board of Directors. All holders of the Company’s Common Stock designate two members of the Company’s Board of Directors. The remaining four members of the Company's Board of Directors are elected by holders of a majority of the Company’s Preferred Stock and Common Stock. Dividends Dividends are payable pro rata on Common Stock and Preferred Stock according to the number of shares of Common Stock held by such holders on an as-converted basis. Dividends are payable, if permitted by law, in accordance with the Preferred Stock terms or when and if declared by the Board of Directors. No dividends have been declared or paid in the years ended December 31, 2020 and 2019. The Preferred Stock does not have a stipulated dividend yield. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Company, or upon the occurrence of a Deemed Liquidation Event, as defined, holders of Series C Preferred Stock are entitled to be paid the Series C Liquidation Preference. The aggregate Series C Liquidation Preference is $28,149,355 at December 31, 2020. After the Series C Liquidation Preference is satisfied, out of any remaining proceeds, holders of Series B Preferred Stock are entitled to be paid the Series B Liquidation Preference. The aggregate Series B Liquidation Preference is $10,970,322 at December 31, 2020. After the Series C Liquidation Preference and Series B Liquidation Preference are satisfied, out of any remaining proceeds, holders of Series A Preferred Stock and Series A‑1 Preferred Stock are entitled to be paid the Series A Liquidation Preference and the Series A-1 Liquidation Preference, respectively. The aggregate Series A Liquidation Preference is $5,259,989 at December 31, 2020. The aggregate Series A‑1 Liquidation Preference is $999,990 at December 31, 2020. After the payment of all preferential amounts required to be paid to the holders of Preferred Stock, the remaining assets, if any, available for distribution will be distributed among the holders of Preferred Stock and Common Stockholders on an as-converted basis. Conversion Each share of Preferred Stock is convertible at the option of the holder into fully paid and non-assessable shares of Common Stock, at a conversion rate of 1 to 1 initially, subject to adjustments. At December 31, 2020, the applicable conversion price for each series of Preferred Stock is equal to its initial offering price. Each share of Preferred Stock is automatically converted into fully paid and non-assessable shares of Common Stock at the then-applicable conversion ratio, as defined, upon either: (i) the closing of the sale of shares of the Company’s Common Stock to the public in an underwritten public offering of at least $50,000,000, or (ii) written consent of the holders of more than 65% of the then outstanding shares of Preferred Stock on an as-converted basis. At the time of each of the issuances of Preferred Stock, the Company’s Common Stock into which each series of the Company’s Preferred Stock is convertible had an estimated fair value less than the effective conversion prices of the convertible Preferred Stock. Therefore, no beneficial conversion element existed at the respective issuance dates. The Preferred Stock also contains a down-round protection provision that reduces the conversion price if the Company issues shares at less than the conversion price or for no consideration. As such, if this provision is triggered, it could result in the conversion option becoming more beneficial if such adjustment causes the applicable conversion price to decline below the commitment date fair value of the Common Stock. If this occurs, a contingent beneficial conversion feature will be recognized at the date of such adjustment. The Company continues to monitor for the issuance of additional shares below the conversion price, which could result in a contingent beneficial conversion feature. Redemption The Company is obligated to redeem Preferred Stock upon the occurrence of certain Deemed Liquidation Events, as defined (including merger, share exchange, or consolidation in which the Company is a party, or a subsidiary of the Company is a party where the Company issues shares of its capital stock, resulting in a loss of control by the current stockholders; or sale or other disposition of substantially all assets of the Company). The Company determined that triggering events that could result in a Deemed Liquidation Event are not solely within the control of the Company. Additionally, the Company is obligated to redeem all Preferred Stock upon the occurrence of such Deemed Liquidation Events if a majority, by voting power, of all holders of Preferred Stock request such redemption (“Redemption Event”). The redemption price shall be equal to the liquidation preferences, as defined above. If the assets of the Company are not sufficient to redeem all of the Preferred Stock upon the occurrence of a Redemption Event, the Company shall redeem Preferred Stock ratably based on amounts that would be payable if the assets were sufficient, and redeem the remaining Preferred Stock as soon as the Company may lawfully do so thereafter. The Company continues to monitor circumstances that may cause the Preferred Stock to become probable of becoming redeemable. Subsequent adjustments to the carrying amounts to accrete up to the Preferred Stock redemption values will be made only when the shares become probable of becoming redeemable. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
Common Stock | (12) Common Stock The voting, dividend, and liquidation rights of the holders of Common Stock are subject to and qualified by the rights, powers, and preferences of the holders of Preferred Stock. The Common Stock has the following characteristics: Voting The holders of Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders and written actions in lieu of meetings. Dividends The holders of Common Stock are entitled to receive dividends, if and when declared by the Board of Directors. The Company may not declare or pay any cash dividends to the holders of Common Stock unless, in addition to obtaining any necessary consents, dividends are paid on each series of Preferred Stock in accordance with their respective terms. No dividends have been declared or paid in the year ended December 31, 2020 or 2019. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Company, the holders of Common Stock are entitled to share ratably with the holders of Preferred Stock in the Company’s assets available for distribution to stockholders after payment to the holders of Preferred Stock of their liquidation preferences have been satisfied. Common Stock Reserved for Future Issuance The Company has reserved 15,749,573 and 9,923,323 shares of Common Stock for future issuance as of December 31, 2020 and 2019, respectively. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net Loss Per Share | 14. Net Loss Per Common Share Diluted net loss per common share is the same as basic net loss per common share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive: Anti-dilutive common share equivalents March 31, 2021 March 31, 2020 Stock options 2,866 2,159 Restricted Stock Units 2,561 — Warrants 13,250 — Total anti-dilutive common share equivalents 18,677 2,159 Period Ended March 31, 2021 2020 Numerator: Net loss $ (28,515) $ (818) Denominator: Weighted-average common shares outstanding, basic and diluted 80,729 32,858 Net loss per common share, basic and diluted $ (0.35) $ (0.02) | (13) Net Loss Per Share Diluted net loss per common share is the same as basic loss per common share for all periods presented because the effects of potentially dilutive items were anti-dilutive given the Company’s net loss. The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented: December 31, Anti-dilutive common share equivalents: 2020 2019 Series A Preferred Stock 2,770,165 2,770,165 Series A-1 Preferred Stock 392,276 392,276 Series B Preferred Stock 2,631,972 1,483,491 Series C Preferred Stock 5,130,658 — Restricted stock units 1,183,500 — Stock options 1,384,984 1,004,000 Total anti-dilutive common share equivalents 13,493,555 5,649,932 Basic and diluted net loss per common share is calculated as follows: Year Ended December 31, 2020 2019 Numerator: Net loss $ (17,447,705) $ (2,746,021) Denominator: Weighted-average common shares outstanding, basic and diluted 9,716,768 9,507,926 Net loss per common share, basic and diluted $ (1.80) $ (0.29) |
Subsequent Events_2
Subsequent Events | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Subsequent Events [Abstract] | ||
Subsequent Events | 15. Subsequent Events In April 2021, the Company acquired Root AI, Inc., (“Root AI”) an artificial intelligence farming startup that creates intelligent robots to help manage high-tech indoor farms, for approximately $60,000. Total consideration included $10,000 in cash and 2,328 shares of the Company’s common stock. Founded in 2018, Root AI is based in Somerville, Massachusetts and has 19 full-time employees. The acquisition of Root AI is expected to provide the Company with a baseline of harvesting support while helping to evaluate crop health, predict yield, and optimize overall operations of its CEA facilities. The acquisition of Root AI will be accounted for under the acquisition method. On April 12, 2021, the Company granted a total of 6,003 restricted stock units under the Plan. | (14) Subsequent Events On January 29, 2021, the Business Combination and Merger was completed. The transaction provided the Company approximately $475.0 million of unrestricted cash, including $375.0 million in gross proceeds from the fully committed common stock PIPE. In connection with the transaction: · Each share of Preferred Stock that was then issued and outstanding was automatically converted into AppHarvest Common Stock, such that each converted share of Preferred Stock was no longer outstanding and ceased to exist. · Novus assumed the Convertible Note, and the outstanding principal and unpaid accrued interest due was converted into an aggregate 3,242,336 shares of Novus’ common stock, such that the Convertible Note was no longer outstanding and ceased to exist. · Each share of AppHarvest Common Stock, including the AppHarvest Common stock issued upon conversion by the AppHarvest Preferred stockholders, was converted into and exchanged for 2.1504 shares (the “Exchange Ratio”) of Novus’ common stock. · Each option to purchase AppHarvest Common Stock that was outstanding, whether vested or unvested, was converted into an option to purchase a number of shares of Novus Common Stock equal to the product (rounded down to the nearest whole number) of (i) the number of shares of AppHarvest Common Stock subject to such AppHarvest option and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such AppHarvest option, divided by (B) the Exchange Ratio. · Each restricted stock unit awarded by AppHarvest that was outstanding, whether vested or unvested, was converted into an award of restricted stock units to acquire a number shares of Novus Common Stock equal to the product (rounded down to the nearest whole number) of (1) the number of shares of AppHarvest Common Stock subject to the AppHarvest restricted stock unit award and (2) the Exchange Ratio. As further discussed within Note 8(a) to these consolidated financial statements, on March 1, 2021, the Company closed on the Membership Interest Purchase and Sale Agreement with Equilibrium. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Use of Estimates | Use of Estimates in Condensed Consolidated Financial Statements In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the recording of revenue, valuation of inventory, the valuation of stock-based compensation, the valuation of private warrants, lease accounting, the useful life of fixed assets and income taxes. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the global volatility and general market disruption resulting from the global outbreak of the novel coronavirus disease (“COVID-19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. | a) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, the valuation of instruments issued for financing and stock-based compensation, lease accounting and income taxes. The Company utilizes estimates and assumptions in determining the fair value of its Common Stock and other equity instruments. The fair value was determined using valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation . The Company granted stock options at exercise prices not less than the fair value of its Common Stock, as determined by the Board of Directors contemporaneously at the date such grants were made, with input from management. The fair value of Common Stock at the grant date was determined to have been higher in connection with retrospective fair value assessments for financial reporting purposes. The exercise prices of the stock option awards affected by the retrospective fair value assessment were not modified. The Company’s retrospective fair value assessment estimated the fair value of the Company’s Common Stock based on a number of objective and subjective factors, including external market conditions affecting the Company’s industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s Common Stock at the time, and the likelihood of achieving a Deemed Liquidity Event, as defined, such as a public offering or sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of Common Stock and other equity instruments at each valuation date. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the impact from the global outbreak of the novel coronavirus disease (“COVID‑19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. |
Principles of Consolidation | b) Principles of Consolidation The Company consolidates entities in which it holds a controlling financial interest. For voting interest entities, the Company is considered to hold a controlling financial interest when it is able to exercise control over the investees’ operating and financial decisions. The Company does not have interests in any entities that would be considered variable interest entities. All significant intercompany balances and transactions have been eliminated in consolidation. | |
Cash and Cash Equivalents | c) Cash and Cash Equivalents The Company considers all highly liquid, short-term investments with an original maturity date of three months or less to be cash equivalents. The Company deposits its cash and cash equivalents in a commercial bank. From time to time, cash balances in these accounts exceed the Federal Deposit Insurance Corporation insured limits. The Company mitigates exposure to credit risk by placing cash and cash equivalents with highly rated financial institutions. To date, the Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk on its cash and cash equivalents. At December 31, 2020, cash and cash equivalents includes $5,646,392 of cash restricted for future minimum lease payments and operating and maintenance costs associated with the Company’s lease with a related party (see Note 8(a)). The Company had no restricted cash balances at December 31, 2019. | |
Fair Value Measurements and Disclosures | d) Fair Value Measurements and Disclosures Carrying values of cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses, other current liabilities, and notes payable approximate fair values because of their short-term nature. There were no material assets or liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and 2019. | |
Inventories | e) Inventories Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Finished goods inventories represent costs associated with boxed produce not yet sold. Growing crop inventories primarily represent the costs associated with growing produce within the Company’s controlled environment agriculture facilities. Materials and supplies primarily represent growing and packaging supplies. Inventory costs are comprised of the purchase and transportation cost plus production labor and overhead. | |
Long-Lived Assets | f) Long-Lived Assets Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for additions or renewals and improvements are capitalized; expenditures for maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its economic life are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: · Building: 25 years · Leasehold and building improvements: the lessor of the lease term or 4 to 10 years. · Machinery: 5 to 10 years · Equipment: 3 to 10 years Assets held under financing leases are recorded at the net present value of the minimum lease payments, net of incentives provided by the lessor. Depreciation expense for assets held under financing leases is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. If the related lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise or the lease transfers ownership of the underlying asset to the Company by the end of the lease term, depreciation expense is computed over the estimated useful life of the asset. Impairment Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of a long-lived asset or asset group may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company did not record any impairment losses for the years ended December 31, 2020 and 2019. | |
Leases | g) Leases The Company determines if an arrangement contains a lease at inception. The right-of-use assets, net and liabilities associated with leases are recognized based on the present value of the future minimum lease payments over the lease term. The Company uses its incremental borrowing rate at the recognition date in determining the present value of future payments for leases that do not have a readily determinable implicit rate. Lease terms reflect options to extend or terminate the lease when it is reasonably certain that the option will be exercised. For leases that include residual value guarantees or payments for terminating the lease, the Company includes these costs in the lease liability when it is probable such costs will be incurred. Right-of-use assets and obligations for short-term leases (leases with an initial term of 12 months or less) are not recognized in the consolidated balance sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. When contracts contain lease and non-lease components, the Company generally accounts for both components as a single lease component. | |
Income Taxes | h) Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of December 31, 2020 and 2019, the Company does not have any uncertain tax positions. The Company’s policy is to recognize interest and penalties on uncertain tax positions as income tax expense. | |
Retirement Plans | i) Retirement Plans The AppHarvest 401(k) Plan provides for matching contributions. The Company incurred $105,007 and $11,154 of expenses associated with the 401(k) Plan for the years ended December 31, 2020 and 2019, respectively. | |
Stock-Based Compensation | j) Stock-Based Compensation The Company recognizes in its Consolidated Statements of Operations and Comprehensive Loss the grant-date fair value of stock options, restricted stock awards, and restricted stock units issued to employees and directors. All the Company’s stock option and restricted stock awards are subject only to service-based vesting conditions. Stock-based compensation expense related to stock options and restricted stock awards is recognized on a straight-line basis over the associated service period of the award, which is generally the vesting term. Restricted stock unit awards are subject to both service- and performance-based vesting conditions. The Company recognizes forfeitures of awards as they occur. The Company estimates the fair value of its restricted stock units and restricted stock awards based upon the fair value of the common stock at the date the terms of the awards are mutually agreed upon between the Company and the holder. The Company estimates the fair value of its stock option awards using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (a) the expected stock price volatility, (b) the calculation of expected term of the award, (c) the risk-free interest rate, and (d) expected dividends. Due to the lack of a public market for the trading of the Company’s Common Stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded and have similar characteristics to the Company. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 107, Share-Based Payment , to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted to employees. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among its employee population. The expected term of the stock option awards granted historically was assumed to be the weighted average between the options contract life and the vesting term of the underlying award (based upon the underlying arrangement). The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. | |
Development Fee Income from a Related Party | k) Development Fee Income from a Related Party The Company recognizes development fee income related to indirect limited oversight services it performs in connection with the greenhouse construction site in Morehead, Kentucky (see Note 8(a)). The development fee of $750,000 was received in May 2019 and was recognized on a straight-line basis, consistent with the level of service, through October 2020, the date when the Morehead Facility reached substantial completion. | |
Net Loss Per Common Share | l) Net Loss Per Common Share The Company’s basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of Common Stock outstanding for the period. The diluted net loss per common share is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, stock options to purchase Common Stock, restricted stock units and redeemable convertible preferred stock are considered to be Common Stock equivalents but have been excluded from the calculation of diluted net loss per common share as their effect is anti-dilutive. | |
Advertising | m) Advertising Advertising costs are expensed when incurred. Advertising expense for the years ended December 31, 2020 and 2019 was $142,305 and $40,217, respectively, and is included in selling, general, and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. | |
Segment Information | n) Segment Information The Company is organized as a single operating segment. All the assets and operations of the Company are located in the United States (“U.S.”) | |
Comprehensive Loss | o) Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events. Comprehensive loss was equal to net loss for all periods presented. | |
Distribution Agreement | p) Distribution Agreement On March 28, 2019, the Company entered into a Purchase and Marketing Agreement (the “Mastronardi Morehead Agreement”) with Mastronardi Produce Limited (“Mastronardi”) pursuant to which Mastronardi will be the sole and exclusive marketer and distributor of all tomatoes, cucumbers, peppers, berries and leafy greens produced at the Company’s controlled environment agriculture facility in Morehead, Kentucky that meet certain quality standards (collectively, the “Products”). Under the terms of the Mastronardi Morehead Agreement, the Company is responsible for growing, producing, packing, and delivering the Products to Mastronardi, and Mastronardi is responsible for marketing, branding and distributing the Products to its customers. Mastronardi will pay the Company market prices for the Products that are consistent with the best and highest prices available during the duration of the applicable growing season for like kind U.S. Department of Agriculture Grade No. 1 products. Mastronardi will set the market price for the Products and will pay over to the Company the gross sale price of the Product sold by Mastronardi, less a marketing fee and Mastronardi’s costs incurred in the sale and distribution of the Products. If Mastronardi rejects, returns or otherwise refuses Products for failure to meet certain quality standards, the Company has the right, at its cost and expense, to sell or otherwise dispose of the Products, subject to certain conditions. The Mastronardi Morehead Agreement has a term of 10 years. The Company has a limited, one-time right to terminate the Mastronardi Morehead Agreement if certain return targets are not reached. During the term of the Mastronardi Morehead Agreement, Mastronardi has a right of first refusal to enter into similar arrangements with regard to any additional growing facilities the Company established in Kentucky or West Virginia. As of December 31, 2020, the Company has commenced commercial production, but has not yet sold any Product to Mastronardi. Once product distribution commences, the Company will derive substantially all of its revenue from sales to Mastronardi. | |
Deferred offering costs | q) Deferred offering costs Deferred offering costs, which primarily consist of direct incremental legal and accounting fees related to the Merger and related equity issuances, are capitalized. The deferred offering costs will be offset against Merger and equity issuance proceeds upon the consummation of the offering. Deferred offering costs were $1,126,619 at December 31, 2020, and reflected in Other assets in the Consolidated Balance Sheets. No amounts were incurred or deferred as of December 31, 2019. | |
Selling, general and administrative expenses | r) Selling, general and administrative expenses Selling, general and administrative expenses primarily consist of payroll and payroll related expenses, stock-based compensation, legal and professional costs, rent expense, marketing and advertising, communications, insurance and various other personnel and office related costs. During the year ended December 31, 2020, $2,213,906 of start-up expenses related to pre-commencement commercial activities at the controlled environment agriculture facility in Morehead, Kentucky were expensed as incurred by the Company and recorded within selling, general and administrative expenses within the consolidated statement of operations and comprehensive loss. | |
Recent Accounting Pronouncements | New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 is part of the FASB’s overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes certain exceptions to the general principles of ASC 740, Income Taxes, in order to reduce the cost and complexity of its application in the areas of intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date losses in interim periods and other areas within ASC 740. The Company adopted ASU 2019-12 on January 1, 2021 and the adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the condensed consolidated financial statements . |
Accrued Expenses (Tables)_2
Accrued Expenses (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | ||
Schedule of accrued expenses | Accrued expenses are as follow: March 31, 2021 December 31, 2020 Payroll and related $ 2,237 $ 563 Professional service fees 2,284 693 Construction costs 1,408 2,574 Other accrued liabilities 935 352 Incentive compensation 864 — Utilities 476 384 Interest on convertible debt with a related party — 618 Total accrued expenses $ 8,204 $ 5,184 | Accrued expenses consist of the following as of December 31: 2020 2019 Accrued construction costs $ $ — Accrued professional service fees $ 693,206 $ 35,792 Accrued interest on convertible debt with a related party 618,082 — Accrued payroll 562,641 1,644 Accrued utilities 383,852 — Other accrued liabilities 351,795 11,799 Total accrued expenses $ 5,183,880 $ 49,235 |
Inventories, net (Tables)
Inventories, net (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Schedule of inventories | Inventories consisted of the following: March 31, 2021 December 31, 2020 Growing crops $ 3,275 $ 2,606 Raw materials 1,597 781 Finished goods 31 — Total inventories, net $ 4,903 $ 3,387 | Inventories, net consisted of the following at December 31, 2020: Finished goods $ — Raw materials Growing crops Total inventories, net $ |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of property and equipment at cost and accumulated depreciation | Property and equipment at cost and accumulated depreciation are as follows: March 31, 2021 December 31, 2020 Land $ 19,449 $ 7,277 Buildings 76,165 57,362 Machinery and equipment 43,357 9,581 Construction in progress 50,824 78,174 Leasehold improvements 2,320 871 Less: accumulated depreciation (1,153) (620) Total property and equipment, net $ 190,962 $ 152,645 | Property and equipment at cost and accumulated depreciation at December 31, 2020 and 2019 are as follows: December 31, 2020 Original Accumulated Assets cost depreciation net Land $ 3,678,296 $ — $ 3,678,296 Land with a related party – see Note 8(a) 3,599,324 — 3,599,324 Buildings 57,362,041 (436,209) 56,925,832 Construction in progress 23,525,658 — 23,525,658 Construction in progress with a related party – see Note 8(a) 54,648,634 — 54,648,634 Automobiles 151,898 (14,791) 137,107 Leasehold improvements 871,259 (17,660) 853,599 Equipment 1,803,347 (68,074) 1,735,273 Machinery 7,625,332 (83,720) 7,541,612 $ 153,265,789 $ (620,454) $ 152,645,335 December 31, 2019 Original Accumulated Assets cost depreciation net Land with a related party – see Note 8(a) $ 3,599,324 $ — $ 3,599,324 Equipment 25,399 (7,235) 18,164 Machinery 95,512 (11,926) 83,586 $ 3,720,235 $ (19,161) $ 3,701,074 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of income tax expense | Income tax expense for the year ended December 31, 2020 consisted of the following components: Deferred income taxes: Federal $ State Total deferred income taxes Total income tax expense $ 9,186 |
Summary of reconciliation of the statutory federal income tax with the provision for income taxes | 2020 2019 Loss before income taxes $ (17,438,519) $ (2,746,021) Income tax benefit at U.S. Federal statutory rate (3,662,089) (576,664) Permanent items 211,193 95,081 Change in valuation allowance 4,121,884 572,404 State income taxes, net of U.S. Federal income tax benefit (661,802) (90,821) Income tax expense $ 9,186 $ — |
Summary of significant components of the Company's deferred tax assets and liabilities | December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 4,856,533 $ 812,183 Lease liabilities 15,679,593 39,604 Financing obligation 15,581,566 962,009 Other 19,607 3,811 36,137,299 1,817,607 Valuation allowance (4,921,773) (799,889) 31,215,526 1,017,718 Deferred tax liabilities: Property and equipment $ (30,879,012) $ (982,871) Operating lease right-of-use assets (349,375) (38,522) (31,228,387) (1,021,393) Net deferred tax liabilities $ (12,861) $ (3,675) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Summary of future minimum rental payments required under the leases | Operating leases Remainder of 2021 $ 319 2022 426 2023 415 2024 368 2025 355 2026 and thereafter 729 Total minimum payments required 2,612 Less: imputed interest costs (1) (462) Present value of net minimum lease payments (2) $ 2,150 Weighted-average imputed interest rate 6.32 % Weighted-average remaining lease term 6.3 | The future minimum rental payments required under the leases for each year of the next five years ending December 31, and in the aggregate thereafter are as follows: Finance Lease Operating with leases Equilibrium 2021 $ 258,225 $ 59,446,868 2022 280,977 — 2023 270,112 — 2024 276,780 — 2025 264,928 — 2026 and thereafter 549,488 — Total minimum payments required 1,900,510 59,446,868 Less: imputed interest costs (1) (363,694) (230,383) Present value of net minimum lease payments (2) $ 1,536,816 $ 59,216,485 Weighted-average imputed interest rate 6.29 % 4.72 % Weighted-average remaining lease term 6.9 0.2 (1) Represents the amount necessary to reduce net minimum lease payments to present value using actual rate in the lease agreement or the Company’s incremental borrowing rate at lease inception. (2) Included in the Consolidated Balance Sheet as of December 31, 2020 as current lease liability with a related party of $59,216,485, current lease liability with other parties of $166,354, and noncurrent lease liability of $1,370,462. |
Summary of supplemental consolidated statement of cash flow information | 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 96,104 $ 37,668 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,441,486 $ 160,948 |
Stock Compensation Plan (Tables
Stock Compensation Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of assumptions used within the Black-Scholes option pricing model | 2020 2019 Expected term 5.80 5.72 Risk-free interest rate 0.41 % 2.27 % Expected volatility 49.45 % 40.98 % Expected dividend yield — % — % |
Summary of stock option activity | The following table summarizes stock option activity for the year ended December 31, 2020: Weighted Average average remaining exercise contractual Options Shares price term Outstanding at December 31, 2019 1,004,000 $ 0.46 9.39 Granted 471,734 1.20 Exercised (73,750) 0.50 Forfeited or expired (17,000) 1.20 Outstanding at December 31, 2020 1,384,984 $ 0.70 8.71 Expected to vest, December 31, 2020 796,680 0.80 8.84 Exercisable, December 31, 2020 588,304 0.57 8.53 |
Summary of RSU activity | The following table summarizes RSU activity for the year ended December 31, 2020: Weighted average grant date fair RSUs Units value Outstanding at December 31, 2019 — $ — Granted 1,396,000 19.13 Vested — — Forfeited (212,500) 17.02 Unvested at December 31, 2020 1,183,500 $ 19.51 Expected to vest, December 31, 2020 1,183,500 $ 19.51 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Summary of securities that have been excluded from the calculation of weighted-average common shares outstanding | The following common share equivalent securities have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive: Anti-dilutive common share equivalents March 31, 2021 March 31, 2020 Stock options 2,866 2,159 Restricted Stock Units 2,561 — Warrants 13,250 — Total anti-dilutive common share equivalents 18,677 2,159 | December 31, Anti-dilutive common share equivalents: 2020 2019 Series A Preferred Stock 2,770,165 2,770,165 Series A-1 Preferred Stock 392,276 392,276 Series B Preferred Stock 2,631,972 1,483,491 Series C Preferred Stock 5,130,658 — Restricted stock units 1,183,500 — Stock options 1,384,984 1,004,000 Total anti-dilutive common share equivalents 13,493,555 5,649,932 |
Summary of basic and diluted net loss per common share | Period Ended March 31, 2021 2020 Numerator: Net loss $ (28,515) $ (818) Denominator: Weighted-average common shares outstanding, basic and diluted 80,729 32,858 Net loss per common share, basic and diluted $ (0.35) $ (0.02) | Year Ended December 31, 2020 2019 Numerator: Net loss $ (17,447,705) $ (2,746,021) Denominator: Weighted-average common shares outstanding, basic and diluted 9,716,768 9,507,926 Net loss per common share, basic and diluted $ (1.80) $ (0.29) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 25 years |
Minimum | Leasehold and building improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 4 years |
Minimum | Machinery | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Minimum | Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum | Leasehold and building improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Maximum | Machinery | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Maximum | Equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 10 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) | Mar. 28, 2019 | May 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 |
Significant Accounting Policy [Line Items] | |||||
Cash restricted for future minimum lease payments | $ 5,646,392 | $ 0 | |||
Retirement Plans | |||||
Employer matching contribution | 105,007 | 11,154 | |||
RELATED PARTY TRANSACTIONS | |||||
Development fee income from related party | $ 750,000 | ||||
Advertising | |||||
Advertising expense | 142,305 | 40,217 | |||
Distribution Agreement | |||||
Term of purchase and marketing agreement | 10 years | ||||
SG&A | |||||
Distribution Agreement | |||||
Start-up expenses | 2,213,906 | ||||
Fair Value, Recurring | |||||
Significant Accounting Policy [Line Items] | |||||
Assets measured at fair value | 0 | 0 | $ 166,000 | ||
Retirement Plans | |||||
Liabilities measured at fair value | 0 | 0 | $ 30,718,000 | ||
Other Assets [Member] | |||||
Distribution Agreement | |||||
Deferred offering costs | $ 1,126,619 | $ 0 |
Accrued Expenses (Details)_2
Accrued Expenses (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | |||
Accrued construction costs | $ 2,574,304 | ||
Accrued professional service fees | $ 2,284,000 | 693,206 | $ 35,792 |
Accrued interest on convertible debt with a related party | 0 | 618,082 | |
Accrued payroll | 2,237,000 | 562,641 | 1,644 |
Accrued utilities | 476,000 | 383,852 | |
Other accrued liabilities | 935,000 | 351,795 | 11,799 |
Accrued expenses | $ 8,204,000 | $ 5,183,880 | $ 49,235 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 31,000 | $ 0 |
Raw materials | 1,597,000 | 781,222 |
Growing crops | $ 3,275,000 | 2,605,891 |
Total inventories, net | $ 3,387,113 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | $ 153,265,789 | $ 3,720,235 | ||
Accumulated depreciation | (620,454) | (19,161) | ||
Assets net | 152,645,335 | 3,701,074 | ||
Depreciation | $ 1,772,000 | $ 21,000 | 175,843 | 16,129 |
Land | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 3,678,296 | |||
Assets net | 3,678,296 | |||
Land with a related party | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 3,599,324 | 3,599,324 | ||
Assets net | 3,599,324 | 3,599,324 | ||
Buildings | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 57,362,041 | |||
Accumulated depreciation | (436,209) | |||
Assets net | 56,925,832 | |||
Right To Use Assets Held Under Finance Lease With Related Party Member | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 56,747,769 | |||
Construction in progress | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 23,525,658 | |||
Assets net | 23,525,658 | |||
Construction In Progress Related Party Member | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 54,648,634 | |||
Assets net | 54,648,634 | |||
Automobiles [Member] | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 151,898 | |||
Accumulated depreciation | (14,791) | |||
Assets net | 137,107 | |||
Leasehold improvements | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 871,259 | |||
Accumulated depreciation | (17,660) | |||
Assets net | 853,599 | |||
Equipment | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 1,803,347 | 25,399 | ||
Accumulated depreciation | (68,074) | (7,235) | ||
Assets net | 1,735,273 | 18,164 | ||
Machinery | ||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||
Original cost | 7,625,332 | 95,512 | ||
Accumulated depreciation | (83,720) | (11,926) | ||
Assets net | $ 7,541,612 | $ 83,586 |
Income Taxes (Details)_2
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred income taxes: | ||||
Federal | $ 8,606 | |||
State | 580 | |||
Total deferred income taxes | $ 2,013,000 | 9,186 | $ 0 | |
Total income tax expense | $ 2,013,000 | $ 0 | 9,186 | |
Current provision for income taxes | $ 0 | $ 0 |
Income Taxes - Provision for in
Income Taxes - Provision for income taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of the statutory federal income tax with the provision for income taxes | ||||
Loss before income taxes | $ (26,502,000) | $ (818,000) | $ (17,438,519) | $ (2,746,021) |
Income tax benefit at U.S. Federal statutory rate | (3,662,089) | (576,664) | ||
Permanent items | 211,193 | 95,081 | ||
Change in valuation allowance | 4,121,884 | 572,404 | ||
State income taxes, net of U.S. Federal income tax benefit | (661,802) | $ (90,821) | ||
Income tax provision | $ 2,013,000 | $ 0 | $ 9,186 |
Income Taxes - Significant comp
Income Taxes - Significant components of the Company's deferred tax assets and liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 4,856,533 | $ 812,183 |
Lease liabilities | 15,679,593 | 39,604 |
Financing obligation | 15,581,566 | 962,009 |
Other | 19,607 | 3,811 |
Total deferred tax assets | 36,137,299 | 1,817,607 |
Valuation allowance | (4,921,773) | (799,889) |
Deferred tax assets after valuation allowance | 31,215,526 | 1,017,718 |
Deferred tax liabilities: | ||
Property and equipment | (30,879,012) | (982,871) |
Operating lease right-of-use assets, net | 349,375 | 38,522 |
Deferred tax liabilities, net, Total | (31,228,387) | (1,021,393) |
Net deferred tax liabilities | (12,861) | $ (3,675) |
Increase in valuation allowance | $ 4,121,884 |
Income Taxess - Net operating l
Income Taxess - Net operating loss carryforwads (Details) | Dec. 31, 2020USD ($) |
U.S. federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 19,477,629 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 19,398,243 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Accrued uncertain tax positions | $ 0 | $ 0 |
Interest or penalties | $ 0 | $ 0 |
Notes Payable with a Related _4
Notes Payable with a Related Party (Detail) - USD ($) | Sep. 28, 2020 | May 12, 2020 |
Equilibrium | Loan Agreement Member | ||
Related Party Transaction | ||
Principal balance | $ 2,000,000 | |
Interest rate (as a percent) | 9.50% | |
Inclusive Capital Partners Spring Master Fund L.p. Member | Convertible Promissory Note Member | ||
Related Party Transaction | ||
Principal balance | $ 30,000,000 | |
Interest rate (as a percent) | 8.00% | |
Conversion price of debt (in dollars per share) | $ 9.50 | |
Redemption price of principal (as percent) | 50.00% | |
Redemption price (as percent) | 80.00% | |
Redemption price | $ 500,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Equilibrium Transactions (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Apr. 15, 2019 | |
Related Party Transaction [Line Items] | ||||
Operating lease expense | $ 168,955 | $ 70,129 | ||
Operating lease right-of-use assets, net | 1,307,173 | 144,127 | $ 1,703,000 | |
Assets net | 152,645,335 | $ 3,701,074 | ||
Construction In Progress Related Party Member | ||||
Related Party Transaction [Line Items] | ||||
Operating lease right-of-use assets, net | 58,795,309 | |||
Assets net | 54,648,634 | |||
Equilibrium | ||||
Related Party Transaction [Line Items] | ||||
Finance lease liability | 59,216,485 | |||
Operating lease right-of-use assets, net | $ 56,747,769 | |||
Membership Interest Purchase and Sale Agreement | Equilibrium | Morehead Farm Llc [Member] | ||||
Related Party Transaction [Line Items] | ||||
Percent of membership interests acquired | 100.00% | |||
Purchase price | $ 125,000,055 | |||
Mortgage loan | Equilibrium | ||||
Related Party Transaction [Line Items] | ||||
Principal balance | $ 3,481,222 | |||
Interest rate (as a percent) | 8.00% |
Commitments and Contingencies_2
Commitments and Contingencies - Future minimum rental payments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Operating leases, 2021 | $ 319,000 | $ 258,225 | ||
Operating leases, 2022 | 426,000 | 280,977 | ||
Operating leases, 2023 | 415,000 | 270,112 | ||
Operating leases, 2024 | 368,000 | 276,780 | ||
Operating leases, 2025 | 355,000 | 264,928 | ||
Operating leases, 2026 and thereafter | 729,000 | 549,488 | ||
Total minimum payments required | 2,612,000 | 1,900,510 | ||
Less: imputed interest costs | (462,000) | (363,694) | ||
Present value of net minimum lease payments | $ 2,150,000 | $ 1,536,816 | ||
Weighted-average imputed interest rate | 6.32% | 6.29% | ||
Weighted-average remaining lease term | 6 years 3 months 18 days | 6 years 10 months 24 days | ||
Current lease liability with related party | $ 59,216,485 | |||
Current lease liability with other parties | $ 300,000 | 166,354 | $ 44,654 | |
Noncurrent lease liability | 1,850,000 | 1,370,462 | 103,524 | |
Supplemental Consolidated Statement of Cash Flow | ||||
Cash paid for amounts included in the measurement of operating lease liabilities | 52,000 | $ 10,000 | 96,104 | 37,668 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 735,000 | $ 30,000 | 1,441,486 | $ 160,948 |
Equilibrium | ||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Finance Lease, 2021 | 59,446,868 | |||
Finance Lease, total minimum payments required | 59,446,868 | |||
Finance Lease, Less: imputed interest costs | (230,383) | |||
Finance Lease, present value of net minimum lease payments | $ 59,216,485 | |||
Finance Lease, weighted-average imputed interest rate | 4.72% | |||
Finance Lease,weighted-average remaining lease term | 2 months 12 days |
Commitments and Contingencies_3
Commitments and Contingencies - Purchase commitments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Purchase commitments | ||
Purchase commitments | $ 0 | $ 0 |
Stock Compensation Plan (Detail
Stock Compensation Plan (Details) - shares | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2018 | |
Incentive stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized | 1,382,983 | ||
Number of additional shares authorized | 1,472,401 | ||
Incentive stock options | Vesting at the end of the first year for 1083500 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 48 months | ||
Vesting percentage | 25.00% | ||
Incentive stock options | Vesting every 3 months thereafter for the next 36 months for 1083500 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 36 months | ||
Nonqualified stock options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 10 months | ||
Nonqualified stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 36 months |
Stock Compensation Plan - Assum
Stock Compensation Plan - Assumption used within the Black-Scholes option pricing (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Assumptions used within the Black-Scholes option pricing model | ||
Expected term | 5 years 9 months 18 days | 5 years 8 months 19 days |
Risk-free interest rate | 0.41% | 2.27% |
Expected volatility | 49.45% | 40.98% |
Stock Compensation Plan - Stock
Stock Compensation Plan - Stock option (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at the beginning | 1,004,000 | |
Granted | 471,734 | |
Exercised | (73,750) | 0 |
Forfeited or expired | (17,000) | |
Outstanding at the end | 1,384,984 | 1,004,000 |
Expected to vest at the end | 796,680 | |
Options-exercisable at the end | 588,304 | |
Weighted average exercise price | ||
Outstanding at the beginning (in dollars per share) | $ 0.46 | |
Granted (in dollars per share) | 1.20 | |
Exercised (in dollars per share) | 0.50 | |
Forfeited or expired (in dollars per share) | 1.20 | |
Outstanding at the end (in dollars per share) | 0.70 | $ 0.46 |
Expected to vest at the end (in dollars per share) | 0.80 | |
Options-exercisable at the end (in dollars per share) | $ 0.57 | |
Average remaining contractual term | ||
Outstanding average remaining contractual term | 8 years 8 months 16 days | 9 years 4 months 21 days |
Granted | 0 years | |
Expected to vest at the end | 8 years 10 months 2 days | |
Options-exercisable at the end | 8 years 6 months 11 days |
Stock Compensation Plan - Incen
Stock Compensation Plan - Incentive stock options (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 6,287,000 | $ 19,000 | ||
Intrinsic value for outstanding options | $ 39,108,581 | |||
Intrinsic value of options forfeited | $ 471,580 | $ 0 | ||
Number of options granted during the period | 471,734 | |||
Number of options exercised | 73,750 | 0 | ||
Total intrinsic value of options exercised | $ 2,099,660 | |||
Incentive stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 153,897 | $ 101,357 | ||
Unrecognized stock-based compensation expense | $ 366,349 | $ 200,278 | ||
Unrecognized stock-based compensation expense anticipated to recognize in weighted average years | 2 years 2 months 12 days | 2 years 9 months 15 days | ||
Intrinsic value for outstanding options | $ 16,690,075 | |||
Weighted average grant date fair value of options granted | $ 0.70 | $ 0.30 |
Stock Compensation Plan - Restr
Stock Compensation Plan - Restricted stock Activity (Details) - Restricted Stock Units | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Units. | |
Number of restricted share award granted | shares | 1,396,000 |
Forfeited (in dollars) | shares | (212,500) |
Outstanding at the end (in dollars) | shares | 1,183,500 |
Expected to vest at the end (in dollars) | shares | 1,183,500 |
Weighted average grant date fair value | |
Granted (in dollars per share) | $ / shares | $ 19.13 |
Forfeited (in dollars per share) | $ / shares | 17.02 |
Outstanding at the end (in dollars per share) | $ / shares | 19.51 |
Expected to vest at the end (in dollars per share) | $ / shares | $ 19.51 |
Stock Compensation Plan - Res_2
Stock Compensation Plan - Restricted stock (Details) - USD ($) | Oct. 08, 2018 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 6,287,000 | $ 19,000 | |||
SG&A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 153,897 | $ 139,798 | |||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of restricted share award granted | 1,396,000 | ||||
Common Stock value per share | $ 19.13 | ||||
Restricted Stock Units | Share Based Payment Arrangement Tranche Vesting Of 1083500 Member | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting of RSU | 1,083,500 | ||||
Restricted Stock Units | Vesting at the end of the first year for 1083500 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Requisite service period of RSUs outstanding | 48 months | ||||
Vesting percentage | 25.00% | ||||
Restricted Stock Units | Vesting every 3 months thereafter for the next 36 months for 1083500 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Requisite service period of RSUs outstanding | 36 months | ||||
Restricted Stock Units | Share Based Payment Arrangement Tranche Vesting Of 100000 Member | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting of RSU | 100,000 | ||||
Requisite service period of RSUs outstanding | 36 months | ||||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of restricted share award granted | 100,000 | ||||
Common Stock value per share | $ 0.50 | ||||
Vesting of RSU | 0 | 83,334 | |||
Stock-based compensation expense | $ 0 | $ 38,441 | |||
Restricted stock units | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | $ 23,091,450 |
SAFE Notes (Details)
SAFE Notes (Details) | 11 Months Ended |
Dec. 31, 2018USD ($) | |
SAFE Notes | |
Amount raised | $ 1,225,000 |
Adjusted Purchase Amount, Non-compounding rate per year (as a percent) | 5.00% |
Adjusted Purchase Amount, discount rate (as a percent) | 20.00% |
Redeemable Convertible Prefer_2
Redeemable Convertible Preferred Stock - Convertible preferred stock activity - Additional Information (Details) - USD ($) | Jun. 07, 2019 | Mar. 27, 2019 | Jul. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Temporary Equity [Line Items] | ||||||||
Par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Issuance of Preferred Stock | $ 0 | $ 4,880,000 | ||||||
Issuance costs | $ 86,933 | $ 85,193 | ||||||
Series A Preferred Stock | ||||||||
Temporary Equity [Line Items] | ||||||||
Issuance of preferred shares, net (in shares) | 2,111,856 | 2,111,856 | ||||||
Par value (in dollars per share) | $ 0.0001 | |||||||
Share price | $ 1.8988 | |||||||
Issuance of Preferred Stock | $ 4,009,992 | $ 4,009,992 | ||||||
Issuance costs | 56,647 | |||||||
Net proceeds | $ 3,953,345 | |||||||
Shares issued upon conversion of SAFE Notes | 658,309 | 658,309 | ||||||
Series A-1 Preferred Stock | ||||||||
Temporary Equity [Line Items] | ||||||||
Issuance of preferred shares, net (in shares) | 392,276 | 392,276 | ||||||
Par value (in dollars per share) | $ 0.0001 | |||||||
Share price | $ 2.5492 | |||||||
Issuance of Preferred Stock | $ 999,990 | $ 999,990 | ||||||
Issuance costs | 7,705 | |||||||
Net proceeds | $ 992,285 | |||||||
Series B Preferred Stock | ||||||||
Temporary Equity [Line Items] | ||||||||
Issuance of preferred shares, net (in shares) | 1,483,491 | 1,148,481 | 1,148,481 | 1,483,491 | ||||
Par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Share price | $ 4.1681 | $ 4.1681 | $ 4.1681 | |||||
Issuance of Preferred Stock | $ 6,083,346 | $ 4,886,976 | $ 4,886,976 | $ 6,083,346 | ||||
Issuance costs | 20,841 | 7,070 | ||||||
Net proceeds | 6,062,505 | $ 4,879,906 | ||||||
Subscription receivable | $ 99,993 | $ 99,993 | ||||||
Series C Preferred Stock | ||||||||
Temporary Equity [Line Items] | ||||||||
Issuance of preferred shares, net (in shares) | 5,130,658 | 5,130,658 | ||||||
Par value (in dollars per share) | $ 0.0001 | |||||||
Share price | $ 5.4865 | |||||||
Issuance of Preferred Stock | $ 28,149,355 | $ 28,149,355 | ||||||
Issuance costs | 79,863 | |||||||
Net proceeds | $ 28,069,492 | |||||||
Common stock | ||||||||
Temporary Equity [Line Items] | ||||||||
Shares issued upon conversion of SAFE Notes | 576,677 |
Redeemable Convertible Prefer_3
Redeemable Convertible Preferred Stock - Voting and Dividends (Details) | Jan. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020director | Dec. 31, 2019USD ($) |
Temporary Equity [Line Items] | |||||
Percentage of holders of Preferred Stock voting required for significant actions | 50.00% | ||||
Number of director of Company's Board of Directors can be elected by several named holders of Preferred Stock and Common Stock | 4 | ||||
Number of director of Company's Board of Directors can be elected by Common Stock holders | 2 | ||||
Number of remaining director of Company's Board of Directors can be elected by majority of the Company's Preferred Stock and Common Stock holders | 4 | ||||
Dividends declared or paid | $ | $ 0 | $ 0 | $ 0 | $ 0 | |
Series B Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Percentage of holders of Preferred Stock voting required for significant actions | 50.00% |
Redeemable Convertible Prefer_4
Redeemable Convertible Preferred Stock - Liquidation (Details) | Dec. 31, 2020USD ($) |
Series B Preferred Stock | |
Temporary Equity [Line Items] | |
Liquidation preference | $ 10,970,322 |
Series A Preferred Stock | |
Temporary Equity [Line Items] | |
Liquidation preference | 5,259,989 |
Series A-1 Preferred Stock | |
Temporary Equity [Line Items] | |
Liquidation preference | 999,990 |
Series C Preferred Stock | |
Temporary Equity [Line Items] | |
Liquidation preference | $ 28,149,355 |
Redeemable Convertible Prefer_5
Redeemable Convertible Preferred Stock - Conversion and Redemption (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Redeemable Convertible Preferred Stock | |
Conversion rate | 1 |
Threshold amount on issuance of common stock for automatic conversion of preferred stock | $ 50,000,000 |
Percentage of holders of Preferred Stock voting required for automatic conversion of preferred stock | 65.00% |
Beneficial conversion | $ 0 |
Common Stock (Details)
Common Stock (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)Voteshares | Dec. 31, 2019USD ($)shares | |
STOCKHOLDERS' EQUITY | ||
Number of vote for each share of Common Stock | Vote | 1 | |
Dividends declared or paid | $ | $ 0 | $ 0 |
Shares of Common Stock reserved for future issuance | shares | 15,749,573 | 9,923,323 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common share equivalent securities exclusion of shares in the calculation of weighted average of common shares outstanding | 18,677,000 | 2,159,000 | 13,493,555 | 5,649,932 |
Series A Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common share equivalent securities exclusion of shares in the calculation of weighted average of common shares outstanding | 2,770,165 | 2,770,165 | ||
Series A-1 Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common share equivalent securities exclusion of shares in the calculation of weighted average of common shares outstanding | 392,276 | 392,276 | ||
Series B Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common share equivalent securities exclusion of shares in the calculation of weighted average of common shares outstanding | 2,631,972 | 1,483,491 | ||
Series C Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common share equivalent securities exclusion of shares in the calculation of weighted average of common shares outstanding | 5,130,658 | |||
Restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common share equivalent securities exclusion of shares in the calculation of weighted average of common shares outstanding | 1,183,500 | |||
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common share equivalent securities exclusion of shares in the calculation of weighted average of common shares outstanding | 2,866,000 | 2,159,000 | 1,384,984 | 1,004,000 |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and diluted net loss per common share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||||
Net loss | $ (17,447,705) | $ (2,746,021) | ||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||||
Weighted average shares outstanding, basic and diluted | 80,729 | 32,858 | 9,716,768 | 9,507,926 |
Net loss per common share, basic and diluted | $ (0.35) | $ (0.02) | $ (1.80) | $ (0.29) |
Subsequent Events (Details)_2
Subsequent Events (Details) $ in Thousands | Jan. 29, 2021USD ($)shares |
Subsequent Event [Line Items] | |
Gross proceeds from the PIPE | $ 375,000 |
Subsequent Event | |
Subsequent Event [Line Items] | |
Gross proceeds from business combination arrangement | 475,000 |
Gross proceeds from the PIPE | $ 375,000 |
Number of shares issued upon conversion | shares | 3,242,336 |
Stockholders' Equity Note, Stock Split, Conversion Ratio | 2.1504 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET | Dec. 31, 2020USD ($) |
Current Assets | |
Cash | $ 21,908,907 |
Prepaid expenses | 481,003 |
Total current assets | 25,777,023 |
Total assets | 180,917,498 |
Liabilities, Current [Abstract] | |
Total current liabilities | 154,780,798 |
Deferred tax liability | 0 |
Private Warrant liabilities | 0 |
Total liabilities | 156,151,260 |
Commitments | |
Common stock subject to possible redemption 12,650,000 shares at redemption value | 45,207,530 |
Stockholders' Deficit | |
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, none issued and outstanding | 0 |
Common stock, par value $0.0001, 25,500,000 and 19,600,000 shares authorized, 9,750,427 and 9,676,677 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 4,446 |
Additional paid in capital | 45,890,000 |
Accumulated deficit | (21,128,133) |
Total stockholders' equity | 24,766,000 |
Total liabilities and stockholders' equity | 180,917,498 |
Novus Capital Corp [Member] | |
Current Assets | |
Cash | 311,954 |
Prepaid expenses | 77,701 |
Total current assets | 389,655 |
Cash and marketable securities held in Trust Account | 100,048,410 |
Total assets | 100,438,065 |
Liabilities, Current [Abstract] | |
Accounts payable and accrued expenses | 3,078,188 |
Total current liabilities | 3,078,188 |
Private Warrant liabilities | 16,900,000 |
Total liabilities | 19,978,188 |
Commitments | |
Common stock subject to possible redemption 12,650,000 shares at redemption value | 126,500,000 |
Stockholders' Deficit | |
Common stock, par value $0.0001, 25,500,000 and 19,600,000 shares authorized, 9,750,427 and 9,676,677 shares issued and outstanding as of December 31, 2020 and 2019, respectively | |
Additional paid in capital | |
Accumulated deficit | (46,040,123) |
Total stockholders' equity | (46,040,123) |
Total liabilities and stockholders' equity | $ 100,438,065 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Mar. 31, 2021 | Jan. 29, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 | 750,000,000 | 19,600,000 |
Common stock, shares issued | 97,925,000 | 44,461,000 | 9,676,677 | |
Common Stock Shares Outstanding | 97,925,000 | 44,461,000 | 9,676,677 | |
Novus Capital Corp [Member] | ||||
Common stock subject to possible redemption, shares | 12,650,000 | |||
Preferred stock, par value | $ 0.0001 | |||
Preferred stock, shares authorized | 1,000,000 | |||
Preferred stock, shares issued | 0 | |||
Preferred stock, shares outstanding | 0 | |||
Common stock, par value | $ 0.0001 | |||
Common stock, shares authorized | 30,000,000 | |||
Common stock, shares issued | 0 | |||
Common Stock Shares Outstanding | 0 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS | 10 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Novus Capital Corp [Member] | |
Formation and operating costs | $ 3,584,271 |
Loss from operations | (3,584,271) |
Other (expense) income: | |
Change in fair value of Private Warrant liabilities | (13,650,000) |
Interest income - bank | 119 |
Interest earned on marketable securities held in Trust Account | 48,410 |
Other (expense) income, net | (13,601,471) |
Net loss | $ (17,185,742) |
Weighted average shares outstanding, basic and diluted | shares | 10,145,349 |
Net loss per common share, basic and diluted | $ / shares | $ (1.69) |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) | Dec. 31, 2020shares |
Novus Capital Corp [Member] | |
Common stock subject to possible redemption, shares | 12,650,000 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Common stockNovus Capital Corp [Member] | Common stock | Additional Paid-in CapitalNovus Capital Corp [Member] | Additional Paid-in Capital | Retained EarningsNovus Capital Corp [Member] | Retained Earnings | Novus Capital Corp [Member] | Total |
Beginning balance at Dec. 31, 2018 | $ 910 | $ 11,559 | $ (934,407) | $ (921,938) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (2,746,021) | (2,746,021) | ||||||
Ending balance at Dec. 31, 2019 | $ 3,000 | 12,753,000 | (3,680,428) | 9,076,000 | ||||
Ending balance (in shares) at Dec. 31, 2019 | 30,800,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock to initial stockholders | $ 0 | 4,880,000 | 0 | 4,880,000 | ||||
Shares purchased by founder | 2,470,000 | |||||||
Net Loss | (818,000) | (818,000) | ||||||
Ending balance at Mar. 31, 2020 | $ 3,000 | 17,652,000 | (4,498,000) | 13,157,000 | ||||
Ending balance (in shares) at Mar. 31, 2020 | 33,270,000 | |||||||
Beginning balance at Dec. 31, 2019 | $ 3,000 | 12,753,000 | (3,680,428) | 9,076,000 | ||||
Beginning balance (in shares) at Dec. 31, 2019 | 30,800,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (17,447,705) | (17,447,705) | ||||||
Ending balance at Dec. 31, 2020 | $ 4,000 | 45,890,000 | $ (46,040,123) | (21,128,133) | $ (46,040,123) | 24,766,000 | ||
Ending balance (in shares) at Dec. 31, 2020 | 44,461,000 | |||||||
Beginning balance at Mar. 04, 2020 | $ 0 | $ 0 | 0 | 0 | ||||
Beginning balance (in shares) at Mar. 04, 2020 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock to initial stockholders | 25,000 | |||||||
Shares purchased by founder | 2,875,000 | |||||||
Ending balance at Mar. 31, 2020 | $ 3,000 | 17,652,000 | (4,498,000) | 13,157,000 | ||||
Ending balance (in shares) at Mar. 31, 2020 | 33,270,000 | |||||||
Beginning balance at Mar. 04, 2020 | $ 0 | 0 | 0 | 0 | ||||
Beginning balance (in shares) at Mar. 04, 2020 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock to initial stockholders | $ 287 | 24,713 | 0 | 25,000 | ||||
Shares purchased by founder | 2,875,000 | |||||||
Issuance of Representative Shares | $ 15 | 15 | ||||||
Issuance of Representative Shares (in shares) | 150,000 | |||||||
Forfeiture of Founder Shares | $ (37) | 37 | ||||||
Forfeiture of Founder Shares (in shares) | (375,000) | |||||||
Sales of 10,000,000 Units, net of underwriter discounts and fees | $ 1,000 | 97,619,604 | $ 97,620,604 | |||||
Sales of 10,000,000 Units, net of underwriter discounts and fees (in shares) | 10,000,000 | 10,000,000 | ||||||
Common stock subject to redemption | $ (1,265) | $ (97,644,354) | (28,854,381) | $ (12,500,000) | ||||
Common stock subject to redemption (in shares) | (12,650,000) | (9,235,987) | ||||||
Net Loss | (17,185,742) | $ (17,185,742) | ||||||
Ending balance at Dec. 31, 2020 | $ 4,000 | 45,890,000 | $ (46,040,123) | (21,128,133) | $ (46,040,123) | 24,766,000 | ||
Ending balance (in shares) at Dec. 31, 2020 | 44,461,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Sale of 3,250,000 Private Warrants | 5,819,000 | 5,819,000 | ||||||
Net Loss | (28,515,000) | (28,515,000) | ||||||
Ending balance at Mar. 31, 2021 | $ 10,000 | $ 491,552,000 | $ (49,643,000) | $ 441,250,000 | ||||
Ending balance (in shares) at Mar. 31, 2021 | 97,925,000 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) | 3 Months Ended | 10 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | |
Cash Flow from Operating Activities: | |||
Net loss | $ (17,447,705) | ||
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | |||
Change in fair value of Private Warrant liabilities | $ (9,826,000) | ||
Deferred tax benefit | 2,013,000 | 9,186 | |
Changes in operating assets and liabilities | |||
Prepaid expenses | (3,133,000) | (347,262) | |
Accrued expenses | 3,694,000 | 1,933,073 | |
Net cash used in operating activities | (36,157,000) | (13,146,733) | |
Cash Flows from Investing Activities: | |||
Net cash used in investing activities | (134,538,000) | (35,682,287) | |
Cash Flow from Financing Activities: | |||
Proceeds from promissory note - related party | 32,000,000 | ||
Repayment of promissory note - related party | (2,089,000) | (18,804) | |
Payment of deferred offering costs | (86,933) | ||
Net cash provided by financing activities | 446,446,000 | 64,706,657 | |
Change in cash and cash equivalents | 275,751,000 | 15,877,637 | |
Beginning of period | 21,908,907 | 6,031,270 | |
End of period | 297,660,000 | $ 21,908,907 | 21,908,907 |
Novus Capital Corp [Member] | |||
Cash Flow from Operating Activities: | |||
Net loss | (17,185,742) | ||
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | |||
Change in fair value of Private Warrant liabilities | 13,650,000 | ||
Interest earned on marketable securities held in Trust Account | (48,410) | ||
Changes in operating assets and liabilities | |||
Prepaid expenses | (77,701) | ||
Accounts payable and Accrued expenses | 3,078,188 | ||
Net cash used in operating activities | (583,665) | ||
Cash Flows from Investing Activities: | |||
Investment of cash in Trust Account | (100,000,000) | ||
Net cash used in investing activities | (100,000,000) | ||
Cash Flow from Financing Activities: | |||
Proceeds from initial stockholders | 25,000 | ||
Proceeds from sale of Units, net of underwriting discounts paid | 98,000,000 | ||
Proceeds from sale of Private Warrants | 3,250,000 | ||
Proceeds from issuance of Representative Shares | 15 | ||
Proceeds from promissory note - related party | 97,525 | ||
Repayment of promissory note - related party | (97,525) | ||
Payment of deferred offering costs | (379,396) | ||
Net cash provided by financing activities | 100,895,619 | ||
Change in cash and cash equivalents | 311,954 | ||
Beginning of period | $ 311,954 | ||
End of period | 311,954 | $ 311,954 | |
Non-Cash Investing and Financing Activities: | |||
Initial classification of common stock subject to possible redemption | $ 126,500,000 |
DESCRIPTION OF ORGANIZATION AND
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | 10 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 31, 2020 | |
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | (1) Description of Business AppHarvest Inc. was founded on January 19, 2018 and together with its subsidiaries (the “Company” or “AppHarvest”) is a sustainable food company creating a resilient and scalable ecosystem of applied technology greenhouses to serve the rapidly growing consumer demand for fresh, chemical-free, non-GMO fruits, vegetables and related products. The Company’s operations through December 31, 2020, have been limited to organizing and staffing, business planning, raising capital, and acquiring and developing properties for controlled environment agriculture. The Company has not generated any revenues through December 31, 2020. On January 29, 2021, pursuant to the business combination agreement and plan of reorganization (“Business Combination Agreement”) with Novus Capital Corporation (“Novus”) and ORGA, Inc., a wholly owned subsidiary of Novus (“Merger Sub”), executed in September 2020, the Company merged with and into Merger Sub (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of Novus. On the closing date, the Company changed its name to AppHarvest Operations, Inc. and Novus changed its name from Novus Capital Corporation to AppHarvest, Inc. The Company’s basis of the presentation within these consolidated financial statements do not reflect any adjustment as a result of the Merger closing. The Merger will be accounted for as a reverse recapitalization. Under this method of accounting, AppHarvest will be treated as the accounting acquirer for financial reporting purposes. | |
Novus Capital Corp [Member] | ||
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS | NOTE 1 — DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS Novus Capital Corporation (the “Company”) was incorporated in Delaware on March 5, 2020. The Company is a blank check company formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (the “Business Combination”). ORGA, Inc., a Delaware corporation, is a wholly owned subsidiary of the Company (“Merger Sub”) (see Note 7). The Company is an early stage and emerging growth company and, as such, the Company is subject to all the risks associated with early stage and emerging growth companies. In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID‑19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID‑19. A significant outbreak of COVID- 19 and other infectious diseases could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID‑19 restrict travel, limit the ability to have meetings with potential investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID‑19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID‑19 and the actions to contain COVID‑19 or treat its impact, among others. If the disruptions posed by COVID‑19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected. Our activities since May 19, 2020, have consisted of the search and evaluation of potential targets in contemplation of a business combination. All activity for the period from March 5, 2020 (inception) through May 18, 2020 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below. The Company will not generate any operating revenues until after the completion of a Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering. On September 28, 2020, the Company entered into a proposed business combination with AppHarvest, Inc. (“AppHarvest”) (see Note 7). The registration statement for the Company’s Initial Public Offering was declared effective on May 14, 2020. On May 19, 2020, the Company consummated the Initial Public Offering of 10,000,000 units (the “Units” and, with respect to the shares of common stock included in the Units sold, the “Public Shares”) at $10.00 per Unit, with each Unit consisting of one share of common stock and one warrant (“Public Warrant”), generating gross proceeds of $100,000,000, which is described in Note 4. Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 3,250,000 warrants (the “Private Warrants”) at a price of $1.00 per Private Warrant in a private placement to the Company’s founding stockholders (the “Sponsors”) and EarlyBirdCapital, Inc. (“EarlyBirdCapital”), generating gross proceeds of $3,250,000, which is described in Note 5. Following the closing of the Initial Public Offering on May 19, 2020, an amount of $100,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Warrants was placed in a trust account (the “Trust Account”) located in the United States, and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a‑7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination or (ii) the distribution of the Trust Account, as described below. Transaction costs amounted to $2,456,726 consisting of $2,000,000 of underwriting fees and $456,726 of other offering costs. In addition, as of December 31, 2020, cash of $311,954 was held outside of the Trust Account and is available for working capital purposes. The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Warrants, although substantially all net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination having an aggregate fair market value of at least 80% of the assets held in the Trust Account (excluding taxes payable on income earned on the Trust Account) at the time of the agreement to enter into an initial Business Combination. The Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company, solely in its discretion. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants. The Company will proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 immediately prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by law and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S. Securities and Exchange Commission (“SEC”) and file tender offer documents with the SEC containing substantially the same information as would be included in a proxy statement prior to completing a Business Combination. If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Company’s initial stockholders and EarlyBirdCapital have agreed to vote their Founder Shares (as defined in Note 6), Representative Shares (as defined in Note 8) and any Public Shares purchased during or after the Initial Public Offering (a) in favor of approving a Business Combination and (b) not to convert any shares in connection with a stockholder vote to approve a Business Combination or sell any shares to the Company in a tender offer in connection with a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all. The initial stockholders and EarlyBirdCapital have agreed (a) to waive their redemption rights with respect to their Founder Shares and Public Shares held by it in connection with the completion of a Business Combination, (b) to waive their rights to liquidating distributions from the Trust Account with respect to the Founder Shares and Representative Shares if the Company fails to consummate a Business Combination and (c) not to propose an amendment to the Amended and Restated Certificate of Incorporation that would affect a public stockholders’ ability to convert or sell their shares to the Company in connection with a Business Combination or affect the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete a Business Combination, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment. The Company will have until November 19, 2021 to complete a Business Combination (the “Combination Period”). If the Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held in the Trust Account and not previously released to the Company to pay taxes, divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. In order to protect the amounts held in the Trust Account, the Company’s Chief Financial Officer has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below $10.00 per Public Share, except as to any claims by a third party who executed a valid and enforceable agreement with the Company waiving any right, title, interest or claim of any kind they may have in or to any monies held in the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsors will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsors will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account. Liquidity and Going Concern As of December 31, 2020, the Company had $311,954 in its operating bank accounts, $100,048,410 in securities held in the Trust Account to be used for a Business Combination or to repurchase or redeem its common stock in connection therewith and a working capital deficit of $2,606,959, which excludes franchise and income taxes payable as this amount can be paid from the interest earned in the Trust Account. As of December 31, 2020, approximately $48,000 of the amount on deposit in the Trust Account represented interest income, which is available to pay the Company’s tax obligations. The Company will need to raise additional capital through loans or additional investments from its Sponsor, stockholders, officers, directors, or third parties. The Company’s officers, directors and Sponsor may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet the Company’s working capital needs. Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern through November 19, 2021, the date that the Company will be required to cease all operations, except for the purpose of winding up, if a Business Combination is not consummated. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. |
RESTATEMENT OF FINANCIAL STATEM
RESTATEMENT OF FINANCIAL STATEMENTS | 10 Months Ended |
Dec. 31, 2020 | |
Novus Capital Corp [Member] | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
RESTATEMENT OF FINANCIAL STATEMENTS | NOTE 2 — RESTATEMENT OF FINANCIAL STATEMENTS On April 12, 2021, the staff of the Securities and Exchange Commission (the “SEC”) issued a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”)” (the “SEC Staff Statement”). The SEC Staff Statement focused in part on provisions in warrant agreements that provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder, and because the holder of a warrant is not an input into the pricing of a fixed-for fixed option on equity shares, such provision would preclude the warrant from being classified in equity and thus the warrant should be classified as a liability. Historically, all of the Company’s Public Warrants and Private Warrants, which were issued in relation to its IPO on May 19, 2021 and are further described in Note 8 to these consolidated financial statements, were reflected as a component of equity within our consolidated balance sheets. In light of the SEC Staff Statement, the Company re-assessed our accounting for the Public and Private Warrants. Based on the re-assessment, the Company determined that the Private Warrants should be classified as liabilities and measured at fair value, with subsequent changes in fair value reported in the statement of operations for each reporting period. The Company determined that there was no impact to the historical accounting for the Public Warrants, and these continue to be properly reflected as a component of stockholders’ equity consistent with historical practice. As a result of this restatement, the Private Warrants are now reflected as a liability at fair value on the Company’s consolidated balance sheet at December 31, 2020, and the change in the fair value of such liability in each period is recognized as a gain or loss in the Company’s consolidated statement of operations for the period from March 5, 2020 (Inception) through December 31, 2020. Both the Public Warrants and the Private Warrants are deemed equity instruments for income tax purposes, and accordingly, there is no tax accounting relating to changes in the fair value of the Private Warrants recognized. The Company previously determined the common stock subject to redemption to be equal to the redemption value of approximately $10 per share of common stock while also taking into consideration a redemption cannot result in net tangible assets being less than $5,000,001, which resulted in 9,235,987 shares of common stock being recorded in temporary equity at an amount of $92,359,870. Upon consideration of the impact of the private placement proceeds described in Note 7-Commitments and the resulting increase in net tangible assets, the Company determined that the redemption value includes all 12,650,000 shares of common stock and an amount of $126,500,000 of common stock subject to possible redemption has been reflected in the Company's consolidated balance sheet as of December 31, 2020, with corresponding adjustments to additional paid-in capital, common stock and accumulated deficit. As common stock subject to redemption is deemed an equity instrument for income tax purposes, there is no tax accounting relating to changes in the amount of common stock subject to redemption. The impact of the restatement on the Balance Sheet, Statement of Operations and Statement of Cash Flows for the Affected Period is presented below: As of December 31, 2020 As Previously Restatement Reported Adjustment As Restated Balance Sheet Total assets $ $ — $ Liabilities and stockholders’ equity Total current liabilities — Private Warrant liabilities — Total liabilities Common stock, shares subject to possible redemption 34,140,130 Stockholders’ equity Preferred stock, $0.0001 par value — — — Common stock, $0.0001 par value — Additional paid in capital — Accumulated deficit Total stockholders’ equity Total liabilities and stockholders’ equity — For the Period from March 5, 2020 (Inception) through December 31, 2020 As Previously Restatement Reported Adjustment As Restated Consolidated Statement of Operations Loss from operations $ $ $ Other (expense)/income: Change in fair value of Private Warrant liabilities — Interest income-bank 119 — 119 Interest earned on marketable securities held in Trust Account 48,410 — 48,410 Other income, net 48,529 Loss before income tax Income tax expense — — — Net loss $ $ $ Weighted average shares, basic and diluted 2,959,790 7,185,559 10,145,349 Basic and diluted net loss per common share $ $ $ For the Period from March 5, 2020 (Inception) through December 31, 2020 As Previously Restatement Reported Adjustment As Restated Statement of Cash Flows Net loss $ $ $ Net cash used in operating activities Net cash used in investing — Net cash provided by financing 100,818,289 77,330 Net change in cash $ 311,954 $ — $ |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 10 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. Summary of Significant Accounting Policies Use of Estimates in Condensed Consolidated Financial Statements In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the recording of revenue, valuation of inventory, the valuation of stock-based compensation, the valuation of private warrants, lease accounting, the useful life of fixed assets and income taxes. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the global volatility and general market disruption resulting from the global outbreak of the novel coronavirus disease (“COVID-19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. Accounts Receivables Accounts receivable consist of amounts due from customers in connection with our normal business activities and are carried at sales value less allowance for doubtful accounts. The allowance for doubtful accounts is established to reflect the expected losses of accounts receivable based on past collection history, age, account payment status compared to invoice payment terms and specific individual risks identified. Write-offs are recorded against the allowance for doubtful accounts when all reasonable efforts for collection have been exhausted. The provision at March 31, 2021 and December 31, 2020 did not have a material impact on the condensed consolidated financial statements. Convertible Preferred Stock Prior to the Business Combination, the Company recorded shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company applied the guidance in Accounting Standards Codification (“ASC”) 480-10-S99-3A and therefore classified all of its outstanding redeemable convertible preferred stock as temporary equity. The redeemable convertible preferred stock was recorded outside of stockholders’ equity because, in the event of certain deemed liquidation events considered not solely within the Company’s control, such as a merger, acquisition and sale of all or substantially all of the Company’s assets, the preferred stock would become redeemable at the option of the holders. In the event of a change of control of the Company, proceeds received from the sale of such shares would be distributed in accordance with the liquidation preferences set forth in the Company’s Amended and Restated Certificate of Incorporation then in effect. All convertible preferred stock previously classified as temporary equity was retroactively adjusted and reclassified to permanent equity as a result of the Business Combination. As a result of the Business Combination, each share of redeemable convertible preferred stock that was then issued and outstanding was automatically converted into Legacy AppHarvest Common Stock, such that each converted share of preferred stock was no longer outstanding and ceased to exist. Each share of Legacy AppHarvest common stock, including the Legacy AppHarvest common stock issued upon conversion of Legacy AppHarvest preferred stock, was converted into and exchanged for 2.1504 (the “Exchange Ratio”) shares of the Company’s common stock.The Exchange Ratio was established pursuant to the terms of the Business Combination Agreement. During the three-month period ended March 31, 2020, Legacy AppHarvest issued shares of Legacy AppHarvest Series B redeemable convertible preferred stock to new and existing investors for net proceeds of $4,880. Warrants At March 31, 2021, there were 13,250 warrants to purchase Common Stock outstanding, consisting of 10,500 public warrants (“Public Warrants”) and 2,750 private warrants (“Private Warrants”), (collectively, “Warrants”) held by the Novus initial stockholders. Each warrant entitles the registered holder to purchase one share of Common Stock at a price of $11.50 per share. The warrants expire on January 29, 2026, or earlier upon redemption or liquidation. The Company may redeem the Public Warrants: · In whole and not in part; · At a price of $0.01 per Warrant; · Upon not less than 30 days’ prior written notice of redemption; · If, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and · if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The Public Warrants were determined to be equity classified in accordance with U.S. GAAP. The Private Warrants are identical to the Public Warrants except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As a result of the provisions in the warrant agreement that provide for differences in the mechanics of a cashless exercise dependent upon the characteristics of the warrant holder, and because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provisions preclude the Private Warrant from being classified in equity. Accordingly, the Private Warrants are classified as a liability and remeasured at fair value at each reporting date. The Company accounts for its Private Warrants in accordance with ASC 815-40, under which the Company has determined that the Private Warrants are recognized as liabilities at fair value and subject to re-measurement at each balance sheet date until exercised. Changes in fair value of the Private Warrants is recognized in the Company’s condensed consolidated statement of operations and comprehensive loss. The fair value of the Private Warrants is estimated at each measurement date using a Black-Scholes option pricing model. See Note 5- Fair Value Measurements for inputs used in calculating the estimated fair value. Derivative Financial Instruments Derivative financial instruments are used to manage foreign currency exchange risks. The financial instruments used by the Company are straight-forward, non-leveraged instruments. The counterparties to these financial instruments are financial institutions with strong credit ratings. The Company maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit ratings of these institutions. For all transactions designated as hedges, the hedging relationships are formally documented at the inception and on an ongoing basis in offsetting changes in cash flows of the hedged transaction. The Company records derivative financial instruments on the condensed consolidated balance sheets as either an asset or liability measured at its fair value. Changes in a derivative's fair value (i.e. unrealized gains or losses) are recorded each period in earnings unless the derivative qualifies as a hedge on future cash flows. Gains and losses related to a hedge are either recognized in income immediately to offset the gain or loss on the hedged item, or deferred and recorded in the stockholders' equity section of the condensed consolidated balance sheets as a component of accumulated other comprehensive loss (“AOCL”) and subsequently recognized in the condensed consolidated statements of operations and comprehensive loss when the hedged item affects net income. The ineffective portion of the change in fair value of a hedge, if any, is recognized in income immediately. For derivative instruments that are not designated as hedges, the gain or loss related to the change in fair value is also recorded to net income immediately. New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 is part of the FASB’s overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes certain exceptions to the general principles of ASC 740, Income Taxes, in order to reduce the cost and complexity of its application in the areas of intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date losses in interim periods and other areas within ASC 740. The Company adopted ASU 2019-12 on January 1, 2021 and the adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the condensed consolidated financial statements . | (2) Summary of Significant Accounting Policies The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and are presented in U.S. Dollars. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and an Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). a) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, the valuation of instruments issued for financing and stock-based compensation, lease accounting and income taxes. The Company utilizes estimates and assumptions in determining the fair value of its Common Stock and other equity instruments. The fair value was determined using valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation . The Company granted stock options at exercise prices not less than the fair value of its Common Stock, as determined by the Board of Directors contemporaneously at the date such grants were made, with input from management. The fair value of Common Stock at the grant date was determined to have been higher in connection with retrospective fair value assessments for financial reporting purposes. The exercise prices of the stock option awards affected by the retrospective fair value assessment were not modified. The Company’s retrospective fair value assessment estimated the fair value of the Company’s Common Stock based on a number of objective and subjective factors, including external market conditions affecting the Company’s industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s Common Stock at the time, and the likelihood of achieving a Deemed Liquidity Event, as defined, such as a public offering or sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of Common Stock and other equity instruments at each valuation date. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the impact from the global outbreak of the novel coronavirus disease (“COVID‑19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. b) Principles of Consolidation The Company consolidates entities in which it holds a controlling financial interest. For voting interest entities, the Company is considered to hold a controlling financial interest when it is able to exercise control over the investees’ operating and financial decisions. The Company does not have interests in any entities that would be considered variable interest entities. All significant intercompany balances and transactions have been eliminated in consolidation. c) Cash and Cash Equivalents The Company considers all highly liquid, short-term investments with an original maturity date of three months or less to be cash equivalents. The Company deposits its cash and cash equivalents in a commercial bank. From time to time, cash balances in these accounts exceed the Federal Deposit Insurance Corporation insured limits. The Company mitigates exposure to credit risk by placing cash and cash equivalents with highly rated financial institutions. To date, the Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk on its cash and cash equivalents. At December 31, 2020, cash and cash equivalents includes $5,646,392 of cash restricted for future minimum lease payments and operating and maintenance costs associated with the Company’s lease with a related party (see Note 8(a)). The Company had no restricted cash balances at December 31, 2019. d) Fair Value Measurements and Disclosures Carrying values of cash and cash equivalents, prepaid expenses and other current assets, accounts payable, accrued expenses, other current liabilities, and notes payable approximate fair values because of their short-term nature. There were no material assets or liabilities that were measured at fair value on a recurring basis as of December 31, 2020 and 2019. e) Inventories Inventories are valued at the lower of cost (first-in, first-out) or net realizable value. Finished goods inventories represent costs associated with boxed produce not yet sold. Growing crop inventories primarily represent the costs associated with growing produce within the Company’s controlled environment agriculture facilities. Materials and supplies primarily represent growing and packaging supplies. Inventory costs are comprised of the purchase and transportation cost plus production labor and overhead. f) Long-Lived Assets Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Expenditures for additions or renewals and improvements are capitalized; expenditures for maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its economic life are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are as follows: · Building: 25 years · Leasehold and building improvements: the lessor of the lease term or 4 to 10 years. · Machinery: 5 to 10 years · Equipment: 3 to 10 years Assets held under financing leases are recorded at the net present value of the minimum lease payments, net of incentives provided by the lessor. Depreciation expense for assets held under financing leases is computed using the straight-line method over the shorter of the estimated useful lives of the assets or the period of the related lease. If the related lease contains an option to purchase the underlying asset that the Company is reasonably certain to exercise or the lease transfers ownership of the underlying asset to the Company by the end of the lease term, depreciation expense is computed over the estimated useful life of the asset. Impairment Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of a long-lived asset or asset group may not be recoverable. Recoverability of assets is measured by comparing the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company did not record any impairment losses for the years ended December 31, 2020 and 2019. g) Leases The Company determines if an arrangement contains a lease at inception. The right-of-use assets, net and liabilities associated with leases are recognized based on the present value of the future minimum lease payments over the lease term. The Company uses its incremental borrowing rate at the recognition date in determining the present value of future payments for leases that do not have a readily determinable implicit rate. Lease terms reflect options to extend or terminate the lease when it is reasonably certain that the option will be exercised. For leases that include residual value guarantees or payments for terminating the lease, the Company includes these costs in the lease liability when it is probable such costs will be incurred. Right-of-use assets and obligations for short-term leases (leases with an initial term of 12 months or less) are not recognized in the consolidated balance sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. When contracts contain lease and non-lease components, the Company generally accounts for both components as a single lease component. h) Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of December 31, 2020 and 2019, the Company does not have any uncertain tax positions. The Company’s policy is to recognize interest and penalties on uncertain tax positions as income tax expense. i) Retirement Plans The AppHarvest 401(k) Plan provides for matching contributions. The Company incurred $105,007 and $11,154 of expenses associated with the 401(k) Plan for the years ended December 31, 2020 and 2019, respectively. j) Stock-Based Compensation The Company recognizes in its Consolidated Statements of Operations and Comprehensive Loss the grant-date fair value of stock options, restricted stock awards, and restricted stock units issued to employees and directors. All the Company’s stock option and restricted stock awards are subject only to service-based vesting conditions. Stock-based compensation expense related to stock options and restricted stock awards is recognized on a straight-line basis over the associated service period of the award, which is generally the vesting term. Restricted stock unit awards are subject to both service- and performance-based vesting conditions. The Company recognizes forfeitures of awards as they occur. The Company estimates the fair value of its restricted stock units and restricted stock awards based upon the fair value of the common stock at the date the terms of the awards are mutually agreed upon between the Company and the holder. The Company estimates the fair value of its stock option awards using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (a) the expected stock price volatility, (b) the calculation of expected term of the award, (c) the risk-free interest rate, and (d) expected dividends. Due to the lack of a public market for the trading of the Company’s Common Stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded and have similar characteristics to the Company. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 107, Share-Based Payment , to calculate the expected term, as it does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term for options granted to employees. The expected term is applied to the stock option grant group as a whole, as the Company does not expect substantially different exercise or post-vesting termination behavior among its employee population. The expected term of the stock option awards granted historically was assumed to be the weighted average between the options contract life and the vesting term of the underlying award (based upon the underlying arrangement). The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. k) Development Fee Income from a Related Party The Company recognizes development fee income related to indirect limited oversight services it performs in connection with the greenhouse construction site in Morehead, Kentucky (see Note 8(a)). The development fee of $750,000 was received in May 2019 and was recognized on a straight-line basis, consistent with the level of service, through October 2020, the date when the Morehead Facility reached substantial completion. l) Net Loss Per Common Share The Company’s basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of Common Stock outstanding for the period. The diluted net loss per common share is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, stock options to purchase Common Stock, restricted stock units and redeemable convertible preferred stock are considered to be Common Stock equivalents but have been excluded from the calculation of diluted net loss per common share as their effect is anti-dilutive. m) Advertising Advertising costs are expensed when incurred. Advertising expense for the years ended December 31, 2020 and 2019 was $142,305 and $40,217, respectively, and is included in selling, general, and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. n) Segment Information The Company is organized as a single operating segment. All the assets and operations of the Company are located in the United States (“U.S.”) o) Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events. Comprehensive loss was equal to net loss for all periods presented. p) Distribution Agreement On March 28, 2019, the Company entered into a Purchase and Marketing Agreement (the “Mastronardi Morehead Agreement”) with Mastronardi Produce Limited (“Mastronardi”) pursuant to which Mastronardi will be the sole and exclusive marketer and distributor of all tomatoes, cucumbers, peppers, berries and leafy greens produced at the Company’s controlled environment agriculture facility in Morehead, Kentucky that meet certain quality standards (collectively, the “Products”). Under the terms of the Mastronardi Morehead Agreement, the Company is responsible for growing, producing, packing, and delivering the Products to Mastronardi, and Mastronardi is responsible for marketing, branding and distributing the Products to its customers. Mastronardi will pay the Company market prices for the Products that are consistent with the best and highest prices available during the duration of the applicable growing season for like kind U.S. Department of Agriculture Grade No. 1 products. Mastronardi will set the market price for the Products and will pay over to the Company the gross sale price of the Product sold by Mastronardi, less a marketing fee and Mastronardi’s costs incurred in the sale and distribution of the Products. If Mastronardi rejects, returns or otherwise refuses Products for failure to meet certain quality standards, the Company has the right, at its cost and expense, to sell or otherwise dispose of the Products, subject to certain conditions. The Mastronardi Morehead Agreement has a term of 10 years. The Company has a limited, one-time right to terminate the Mastronardi Morehead Agreement if certain return targets are not reached. During the term of the Mastronardi Morehead Agreement, Mastronardi has a right of first refusal to enter into similar arrangements with regard to any additional growing facilities the Company established in Kentucky or West Virginia. As of December 31, 2020, the Company has commenced commercial production, but has not yet sold any Product to Mastronardi. Once product distribution commences, the Company will derive substantially all of its revenue from sales to Mastronardi. q) Deferred offering costs Deferred offering costs, which primarily consist of direct incremental legal and accounting fees related to the Merger and related equity issuances, are capitalized. The deferred offering costs will be offset against Merger and equity issuance proceeds upon the consummation of the offering. Deferred offering costs were $1,126,619 at December 31, 2020, and reflected in Other assets in the Consolidated Balance Sheets. No amounts were incurred or deferred as of December 31, 2019. r) Selling, general and administrative expenses Selling, general and administrative expenses primarily consist of payroll and payroll related expenses, stock-based compensation, legal and professional costs, rent expense, marketing and advertising, communications, insurance and various other personnel and office related costs. During the year ended December 31, 2020, $2,213,906 of start-up expenses related to pre-commencement commercial activities at the controlled environment agriculture facility in Morehead, Kentucky were expensed as incurred by the Company and recorded within selling, general and administrative expenses within the consolidated statement of operations and comprehensive loss. | |
Novus Capital Corp [Member] | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the 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. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. Marketable Securities Held in Trust Account At December 31, 2020, substantially all of the assets held in the Trust Account were held in money market funds. Derivative Warrant Liabilities The Company accounts for its Private Warrants in accordance with ASC 815-40, under which the Company has determined that the Private Warrants are recognized as liabilities at fair value and subject to re-measurement at each balance sheet date until exercised. Changes in fair value of the Private Warrants is recognized in the Company’s Statement of Operations. The fair value of the Private Warrants is estimated at each measurement date using a Black-Scholes option pricing model (see Note 10). Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with guidance in ASC 480 “Distinguishing Liabilities from Equity.” Common stock subject to redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s consolidated balance sheet. Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement process for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOL) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior years, suspend the excess business loss rules, accelerate refunds of previously generated corporate alternative minimum tax credits, generally loosen the business interest limitation under IRC section 163(j) from 30 percent to 50 percent among other technical corrections included in the Tax Cuts and Jobs Act tax provisions. The Company does not believe that the CARES Act will have a significant impact on Company’s financial position or statement of operations. Net Loss per Common Share Net loss per share is computed by dividing net loss by the weighted average number of redeemable common stock outstanding during the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase 13,250,000 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events. As a result, diluted net loss per common share is the same as basic net loss per common share for the period presented. Basic and diluted loss per common share is calculated as follows: Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying consolidated balance sheet, primarily due to their short-term nature. Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
PUBLIC OFFERING
PUBLIC OFFERING | 10 Months Ended |
Dec. 31, 2020 | |
Novus Capital Corp [Member] | |
PUBLIC OFFERING | NOTE 4 — PUBLIC OFFERING Pursuant to the Initial Public Offering, the Company sold 10,000,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of common stock and one warrant (“Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment (see Note 8). |
PRIVATE PLACEMENT
PRIVATE PLACEMENT | 10 Months Ended |
Dec. 31, 2020 | |
Novus Capital Corp [Member] | |
PRIVATE PLACEMENT | NOTE 5 — PRIVATE PLACEMENT Simultaneously with the closing of the Initial Public offering, the Sponsors and EarlyBirdCapital purchased 3,250,000 Private Warrants (2,750,000 private warrants by our Sponsors and/or their designees and 500,000 Private Warrants by EarlyBirdCapital and/or its designees) at a price of $1.00 per Private Warrant. The proceeds from the private placement of the Private Warrants were added to the proceeds of the Initial Public Offering to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Warrants will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law). |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 10 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 31, 2020 | |
RELATED PARTY TRANSACTIONS | (7) Notes Payable with a Related Party On May 12, 2020, the Company entered into a loan agreement with Equilibrium Controlled Environment Foods Fund, LLC and its affiliates (“Equilibrium”), a related party, to finance the purchase of equipment to be used in the Company’s operations in Morehead, Kentucky (the “Equipment Loan”.) The loan agreement had a principal balance of $2,000,000 and an interest rate of 9.5% per year. In October 2020, as a result of completion of the Morehead Facility (see Note 8(a)) and subsequent occupancy, the principal balance of the loan was extinguished and added to the future base rent calculation to be paid over the term of the lease. On September 28, 2020, the Company entered into a convertible promissory note with Inclusive Capital Partners Spring Master Fund, L.P., a related party, to finance capital investments and operating needs (the “Convertible Note”). The Convertible Note has a principal balance of $30,000,000 and bears simple interest at 8.0% per annum. The outstanding principal amount of the Convertible Note and any unpaid accrued interest shall automatically convert into shares of Novus at a conversion price equal to $9.50 per share upon closing of a Business Combination Agreement. Absent such conversion, all unpaid interest and principal shall be due and payable upon demand on or after September 28, 2021. The Company has recorded the Convertible Note as a current liability at December 31, 2020. The Convertible Note includes certain other terms which can accelerate and/or change the manner in which the Convertible Note are redeemed or converted. In a change in control, the holders of the Convertible Note can demand repayment of principal, accrued but unpaid interest, and a repayment premium in the amount of 50% of principal. In addition, upon a future equity financing event, the holder of the Convertible Note may elect to convert the outstanding principal and interest into the most senior stock of the Company issued in such a financing at the lower of 80% of the price paid by such investor or based on a valuation of $500 million. A merger between the Company and Novus, and any merger related financings, do not qualify as a change in control or future financing event under the terms of the Convertible Note. The fair value of these embedded derivatives was not significant at issuance or at December 31, 2020. | |
Novus Capital Corp [Member] | ||
RELATED PARTY TRANSACTIONS | NOTE 6 — RELATED PARTY TRANSACTIONS Founder Shares In March 2020, the initial stockholders purchased 2,875,000 shares (the “Founder Shares”) of the Company’s common stock for an aggregate price of $25,000. The Founder Shares included an aggregate of up to 375,000 shares subject to forfeiture by the initial stockholders to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the initial stockholders would collectively own 20% of the Company’s issued and outstanding shares after the Initial Public Offering (excluding the Representative Shares). As a result of the underwriters’ election to not exercise their over-allotment option on May 19, 2020, the 375,000 Founder Shares were forfeited. The initial stockholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of the Founder Shares until, with respect to 50% of the Founder Shares, the earlier of one year after the consummation of a Business Combination and the date on which the closing price of the common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30‑trading day period commencing after a Business Combination and, with respect to the remaining 50% of the Founder Shares, until the one year after the consummation of a Business Combination, or earlier, in either case, if, subsequent to a Business Combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property. Promissory Note — Related Party In March 2020, the Company issued an unsecured promissory note to Robert J. Laikin, the Company’s Chairman (the “Promissory Note”), pursuant to which the Company may borrow up to an aggregate principal amount of $150,000. The Promissory Note is non-interest bearing and payable on the earlier of (i) March 1, 2021, (ii) the consummation of the Initial Public Offering or (iii) the date on which the Company determines not to proceed with the Initial Public Offering. The outstanding amount of $97,525 was repaid on May 19, 2020. Related Party Loans In addition, in order to finance transaction costs in connection with a Business Combination, or certain of the Company’s officers, directors or initial stockholders or their affiliates may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.00 per warrant. The warrants would be identical to the Private Warrants. |
COMMITMENTS
COMMITMENTS | 3 Months Ended | 10 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | |
COMMITMENTS | 10. Commitments and Contingencies (a) On March 1, 2021, the Company closed on the Membership Interest Purchase and Sale Agreement (the “MIPSA”) with Equilibrium that was entered into in December 2020, pursuant to which it purchased from Equilibrium 100% of its membership interests in its subsidiary, Morehead Farm LLC. The purchase price for Morehead Farm LLC (“Morehead Farm”) was $125,000 which was equal to a multiple of Equilibrium’s cost to acquire, develop and construct the Morehead Facility. At closing, Morehead Farm LLC, which owns the Morehead facility, became a wholly owned subsidiary of the Company. Concurrent with the closing of the MIPSA the Master Lease Agreement that the Company had entered into on May 13, 2019 with Morehead Farm LLC to lease the Morehead facility and ancillary agreements related thereto, were terminated. As a result, the closing date balances of $66,504 for the financing obligation related to construction in progress assets and $58,496 for the finance lease liability related to the completed portion of the Morehead facility were settled and de-recognized from the Company’s unaudited condensed consolidated balance sheet. (b) The Company’s other lease portfolio is primarily comprised of operating leases for offices. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on whether the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating lease right-of-use assets, net and liabilities are recognized within the condensed consolidated balance sheets based on the present value of lease payments over the lease term. As the implicit rate is generally not readily determinable for most leases, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate reflects the estimated rate of interest that the Company would pay to borrow on a collateralized basis over a similar term in a similar economic environment. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Leases may include renewal options, and the renewal option is included in the lease term if the Company concludes that it is reasonably certain that the option will be exercised. A certain number of the Company’s leases contain rent escalation clauses, either fixed or adjusted periodically for inflation of market rates, that are factored into the calculation of lease payments to the extent they are fixed and determinable at lease inception. For the period ended March 31, 2021 and 2020 the Company recognized $97 and $14, respectively, of operating lease expense in selling, general and administrative expense (“SG&A”) within the unaudited condensed consolidated statement of operations and comprehensive loss. The future minimum rental payments required under the leases for each year of the next five years and in the aggregate thereafter are as follows: Operating leases Remainder of 2021 $ 319 2022 426 2023 415 2024 368 2025 355 2026 and thereafter 729 Total minimum payments required 2,612 Less: imputed interest costs (1) (462) Present value of net minimum lease payments (2) $ 2,150 Weighted-average imputed interest rate 6.32 % Weighted-average remaining lease term 6.3 (1) (2) Period Ended March 31, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 52 $ 10 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 735 $ 30 (c) Agreements with Dalsem The Company entered into agreements with Dalsem Greenhouse Technology, B.V. (“Dalsem”) for the construction of new CEA facilities in Richmond, Kentucky and Berea, Kentucky on November 20, 2020 and December 11, 2020, respectively. Under terms of the agreements, Dalsem will provide certain services related to the design, engineering, procurement, construction, startup and testing of a greenhouse and certain ancillary facilities at each site. Total costs under the agreements are based on actual costs incurred by Dalsem and payments are due upon the completion of certain established project milestones, with a portion of each payment due in Euros and a portion due in U.S. dollars. Either party is entitled to terminate the agreements upon the occurrence of certain events of default and the Company is entitled to terminate the agreements if Dalsem fails to meet certain performance requirements. The Company may also terminate the agreements without cause with written notice and a termination payment to Dalsem. (d) Purchase Commitments There were no purchase commitments that were unrecorded at March 31, 2021 and December 31, 2020, respectively. | (8) Commitments and Contingencies (a) Equilibrium Transactions On April 15, 2019, the Company entered into a mortgage loan with Equilibrium, a related party, to finance the purchase of land from a third party in Morehead, Kentucky (the “Morehead Land”). The loan had a principal balance of $3,481,222 and bore interest at 8.00% per year. On May 13, 2019, the Company entered a series of agreements with Equilibrium, resulting in the sale of the legal entity that was established to purchase the Morehead Land. The net assets of the entity sold to Equilibrium included the land, related permitting and the mortgage note owed to Equilibrium. On that same date, the Company also entered into a Master Lease Agreement (the “Master Lease Agreement”) with Morehead Farm LLC (“Morehead Farm”) for an indoor controlled agriculture facility on a portion of the Morehead Land (the “Morehead Facility”). The Master Lease Agreement had an initial term of 20 years commencing at substantial completion of construction and included a ground lease for the Morehead Land. In October 2020, the Company took occupancy of the completed portion of the Morehead Facility, resulting in lease commencement under the Master Lease Agreement. Lease payments under the Master Lease Agreement consisted of a base rent calculated as a percentage of defined construction costs, certain non-lease costs and rent based on gross revenues generated from the Morehead Facility. Equilibrium maintains an option to sell, and the Company is required to purchase, any excess land not otherwise utilized by the construction of the Morehead Facility at a price equal to the original cost of acquisition. During the term of the Master Lease Agreement, the Company has a right of first refusal to purchase the Morehead Land. The Company has accounted for the transfer of the Morehead Land to Equilibrium in 2019 as a financing transaction. On March 1, 2021, the Company closed on the Membership Interest Purchase and Sale Agreement with Equilibrium that was entered into in December 2020, pursuant to which it purchased from Equilibrium 100% of the membership interests in Morehead Farm (the “Membership Interest Purchase and Sale Agreement”). The purchase price for Morehead Farm was $125,000,055, which was equal to a multiple of Equilibrium’s cost to acquire, develop and construct the Morehead Facility. At closing, Morehead Farm, an Equilibrium subsidiary which owns the Morehead facility, became a wholly owned subsidiary of the Company. Concurrent with the closing of the Membership Interest Purchase and Sale Agreement, the Master Lease Agreement and ancillary agreements related thereto, were terminated. At December 31, 2020, the Company maintains a finance lease liability with Equilibrium of $59,216,485 related to the completed portion of the Morehead Facility and a related right-of-use asset at cost of $56,747,769. At December 31, 2020, the Company also has construction-in-progress assets of $54,648,634, and a corresponding financing obligation of $58,795,309 with Equilibrium for the portion of the Morehead Facility that remains under construction. The Company controls the remaining Morehead Facility construction activities. The finance lease liability and financing obligation related to the Morehead Facility have been recorded within current liabilities in the accompanying Consolidated Balance Sheet at December 31, 2020, since the closing of the Membership Interest Purchase and Sale Agreement occurred within twelve months of the balance sheet date. (b) Other Leases The Company’s other lease portfolio is primarily comprised of operating leases for offices. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on whether the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. Leases are classified as operating or finance leases at the commencement date of the lease. Operating lease right-of-use assets, net and liabilities are recognized within the Consolidated Balance Sheets based on the present value of lease payments over the lease term. As the implicit rate is generally not readily determinable for most leases, the Company uses an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate reflects the estimated rate of interest that the Company would pay to borrow on a collateralized basis over a similar term in a similar economic environment. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Leases may include renewal options, and the renewal option is included in the lease term if the Company concludes that it is reasonably certain that the option will be exercised. A certain number of the Company’s leases contain rent escalation clauses, either fixed or adjusted periodically for inflation of market rates, that are factored into the calculation of lease payments to the extent they are fixed and determinable at lease inception. For the year ended December 31, 2020 and 2019, the Company recognized $168,955 and $70,129, respectively, of operating lease expense, including short-term lease expense and variable lease costs, which were immaterial. Rent expense is included in selling, general and administrative expense in the Consolidated Statements of Operations and Comprehensive Loss. The future minimum rental payments required under the leases for each year of the next five years ending December 31, and in the aggregate thereafter are as follows: Finance Lease Operating with leases Equilibrium 2021 $ 258,225 $ 59,446,868 2022 280,977 — 2023 270,112 — 2024 276,780 — 2025 264,928 — 2026 and thereafter 549,488 — Total minimum payments required 1,900,510 59,446,868 Less: imputed interest costs (1) (363,694) (230,383) Present value of net minimum lease payments (2) $ 1,536,816 $ 59,216,485 Weighted-average imputed interest rate 6.29 % 4.72 % Weighted-average remaining lease term 6.9 0.2 (1) Represents the amount necessary to reduce net minimum lease payments to present value using actual rate in the lease agreement or the Company’s incremental borrowing rate at lease inception. (2) Included in the Consolidated Balance Sheet as of December 31, 2020 as current lease liability with a related party of $59,216,485, current lease liability with other parties of $166,354, and noncurrent lease liability of $1,370,462. Supplemental Consolidated Statement of Cash Flow information is as follows for the years ended December 31: 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 96,104 $ 37,668 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,441,486 $ 160,948 (c) Agreements with Dalsem The Company entered into agreements with Dalsem Greenhouse Technology, B.V. (“Dalsem”) for the construction of new greenhouse facilities in Richmond, Kentucky and Berea, Kentucky on November 20, 2020 and December 11, 2020, respectively. Under terms of the agreements, Dalsem will provide certain services related to the design, engineering, procurement, construction, startup and testing of a greenhouse and certain ancillary facilities at each site. Total costs under the agreements are based on actual costs incurred by Dalsem and payments are due upon the completion of certain established project milestones, with a portion of each payment due in Euros and a portion due in U.S. dollars. Either party is entitled to terminate the agreements upon the occurrence of certain events of default and the Company is entitled to terminate the agreements if Dalsem fails to meet certain performance requirements. The Company may also terminate the agreements without cause with written notice and a termination payment to Dalsem. (d) Purchase Commitments There were no purchase commitments that were unrecorded at December 31, 2020 and 2019. | |
Novus Capital Corp [Member] | |||
COMMITMENTS | NOTE 7 — COMMITMENTS Registration Rights Pursuant to a registration of rights agreement entered into on May 19, 2020, the holders of the Founder Shares and Representative Shares, as well as the holders of the Private Warrants and any warrants that may be issued in payment of Working Capital Loans made to the Company (and all underlying securities), are entitled to registration rights. The holders of a majority of these securities are entitled to make up to two demands that the Company register such securities. The holders of the majority of the Founders Shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these shares of common stock are to be released from escrow. The holders of a majority of the Representative Shares, Private Warrants and warrants issued in payment of Working Capital Loans (or underlying securities) can elect to exercise these registration rights at any time after the Company consummates a Business Combination. Notwithstanding anything to the contrary, EarlyBirdCapital may only make a demand on one occasion and only during the five-year period beginning on the effective date of the Initial Public Offering. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination; provided, however, that EarlyBirdCapital may participate in a “piggy-back” registration only during the seven-year period beginning on the effective date of the Initial Public Offering. The Company will bear the expenses incurred in connection with the filing of any such registration statements. Business Combination Marketing Agreement The Company has engaged EarlyBirdCapital as an advisor in connection with a Business Combination to assist the Company in holding meetings with its stockholders to discuss the potential Business Combination and the target business’ attributes, introduce the Company to potential investors that are interested in purchasing the Company’s securities in connection with a Business Combination, assist the Company in obtaining stockholder approval for the Business Combination and assist the Company with its press releases and public filings in connection with the Business Combination. The Company will pay EarlyBirdCapital a cash fee for such services upon the consummation of a Business Combination in an amount equal to 3.5% of the gross proceeds of Initial Public Offering, or an aggregate of $3,500,000 (exclusive of any applicable finders’ fees which might become payable); provided that up to 30% of the fee may be allocated at the Company’s sole discretion to other third parties who are investment banks or financial advisory firms not participating in the Initial Public Offering that assist the Company in identifying and consummating a Business Combination. EarlyBirdCapital will also receive a cash fee equal to 1% of the consideration issued to the target business, if a Business Combination is consummated with a target business introduced by EarlyBirdCapital. Merger Agreement On September 28, 2020, the Company, Merger Sub, and AppHarvest entered into a business combination agreement and plan of reorganization (the “AppHarvest Business Combination Agreement”), pursuant to which AppHarvest will be merged with and into Merger Sub (the “Merger,” together with the other transactions related thereto, the “Proposed Transactions”), with AppHarvest surviving the Merger as a wholly owned subsidiary of the Company (the “Surviving Corporation”). Immediately prior to the effective time of the Merger (the “Effective Time”), the Company shall assume certain convertible notes issued by AppHarvest after the date of the AppHarvest Business Combination Agreement and before the Effective Time with an aggregate principal balance up to $30,000,000 (the “Company Interim Period Convertible Notes”) and cause the outstanding principal and unpaid accrued interest due on such Company Interim Period Convertible Notes outstanding immediately prior to the Effective Time to be automatically converted into a number of shares of Novus Common Stock at a purchase price of $9.50 per share, and such converted Company Interim Period Convertible Notes will no longer be outstanding and will cease to exist. All of the Company Interim Period Convertible Notes converted into shares of Novus Common Stock shall no longer be outstanding and shall cease to exist, any liens securing obligations under the Company Interim Period Convertible Notes shall be released and each holder of Company Interim Period Convertible Notes shall thereafter cease to have any rights with respect to such securities. At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Merger Sub, AppHarvest or the holders of any of AppHarvest’s securities, each share of AppHarvest Common Stock issued and outstanding immediately prior to the Effective Time (including shares of AppHarvest Common Stock resulting from the conversion of AppHarvest Preferred Stock and each AppHarvest restricted share) will be canceled and converted into the right to receive the number of shares of the Company’s common stock (“Novus Common Stock”) equal to the quotient obtained by dividing (a) 50,000,000 by (b) the total number of shares of AppHarvest Common Stock outstanding immediately prior to the Effective Time, expressed on a fully-diluted and as-converted to AppHarvest Common Stock basis, and including, without limitation or duplication, the number of shares of AppHarvest Common Stock issuable upon conversion of the AppHravest Preferred Stock, AppHarvest restricted shares, the number of shares of AppHarvest Common Stock subject to unexpired, issued and outstanding AppHarvest RSUs, AppHarvest Options or any other AppHarvest Share Award and the number of shares of AppHravest Common Stock issuable with respect to any issued and outstanding Company Interim Securities, excluding any shares issuable upon the conversion of up to $30 million in aggregate principal amount of Company Interim Period Convertible Notes (the “Exchange Ratio”); provided, however, that each share of Novus Common Stock issued in exchange for AppHarvest restricted shares shall be subject to the terms and conditions giving rise to a substantial risk of forfeiture that applied to such AppHarvest restricted shares immediately prior to the Effective Time to the extent consistent with the terms of such AppHarvest restricted shares. On September 28, 2020, the Company executed Subscription Agreements with subscribers for the sale of an aggregate of 37,500,000 shares of the Company’s common stock at a purchase price of $10.00 per share for aggregate gross proceeds of $375.0 million, in a private placement (the “PIPE”). The closing of the PIPE will occur contemporaneously with the consummation of the Merger. The Proposed Transactions will be consummated after the required approval by the stockholders of the Company and the satisfaction of certain other conditions as further described in the AppHarvest Business Combination Agreement (see Note 9). |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 10 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | (12) Common Stock The voting, dividend, and liquidation rights of the holders of Common Stock are subject to and qualified by the rights, powers, and preferences of the holders of Preferred Stock. The Common Stock has the following characteristics: Voting The holders of Common Stock are entitled to one vote for each share of Common Stock held at all meetings of stockholders and written actions in lieu of meetings. Dividends The holders of Common Stock are entitled to receive dividends, if and when declared by the Board of Directors. The Company may not declare or pay any cash dividends to the holders of Common Stock unless, in addition to obtaining any necessary consents, dividends are paid on each series of Preferred Stock in accordance with their respective terms. No dividends have been declared or paid in the year ended December 31, 2020 or 2019. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Company, the holders of Common Stock are entitled to share ratably with the holders of Preferred Stock in the Company’s assets available for distribution to stockholders after payment to the holders of Preferred Stock of their liquidation preferences have been satisfied. Common Stock Reserved for Future Issuance The Company has reserved 15,749,573 and 9,923,323 shares of Common Stock for future issuance as of December 31, 2020 and 2019, respectively. | |
Novus Capital Corp [Member] | ||
STOCKHOLDERS' EQUITY | NOTE 8 — STOCKHOLDERS’ EQUITY Preferred Stock — The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s board of directors. At December 31, 2020, there were no shares of preferred stock issued or outstanding. Common Stock — The Company is authorized to issue 30,000,000 shares of common stock with a par value of $0.0001 per share. At December 31, 2020, there were 0 shares of common stock issued and outstanding, excluding 12,650,000 shares of common stock subject to possible redemption. Warrants — The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the Initial Public Offering. No warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration statement covering the shares of common stock issuable upon exercise of the Public Warrants is not effective within a specified period following the consummation of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. The Public Warrants will expire five years after the completion of a Business Combination or earlier upon redemption or liquidation. Once the warrants become exercisable, the Company may redeem the Public Warrants: · in whole and not in part; · at a price of $0.01 per warrant; · upon not less than 30 days’ prior written notice of redemption; · if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and · if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The Public Warrants were determined to be equity classified in accordance with U.S. GAAP. The Private Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering, except that the Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable for cash or on a cashless basis, at the holder’s option, and be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. As a result of the provisions in the warrant agreement that provide for potential changes to the settlement amounts dependent upon the characteristics of the warrant holder and because the holder of a warrant is not an input into the pricing of a fixed-for-fixed option on equity shares, such provisions preclude the Private Warrant from being classified in equity and thus the Private Warrants are classified as a liability and remeasured at fair value at each reporting date. The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless. In addition, if (x) the Company issues additional shares of common stock or equity-linked securities for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and in the case of any such issuance to the initial stockholders or their affiliates, without taking into account any Founder Shares held by them prior to such issuance), (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates Business Combination (such price, the “Market Value”) is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the greater of (i) the Market Value or (ii) the price at which the Company issues the additional shares of common stock or equity-linked securities. Representative Shares In March 2020, the Company issued to the designees of EarlyBirdCapital 150,000 shares of common stock (the “Representative Shares”). The Company accounted for the Representative Shares as an offering cost of the Initial Public Offering, with a corresponding credit to stockholders’ equity. The Company estimated the fair value of Representative Shares to be $1,304 based upon the price of the Founder Shares issued to the initial stockholders. The holders of the Representative Shares have agreed not to transfer, assign or sell any such shares until the completion of a Business Combination. In addition, the holders have agreed (i) to waive their redemption rights with respect to such shares in connection with the completion of a Business Combination and (ii) to waive their rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete a Business Combination within the Combination Period. The Representative Shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the effective date of the registration statement related to the Initial Public Offering pursuant to Rule 5110(g)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(g)(1), these securities will not be the subject of any hedging, short sale, derivative, put or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration statements related to the Initial Public Offering, nor may they be sold, transferred, assigned, pledged or hypothecated for a period of 180 days immediately following the effective date of the registration statements related to the Initial Public Offering except to any underwriter and selected dealer participating in the Initial Public Offering and their bona fide officers or partners. |
INCOME TAX
INCOME TAX | 3 Months Ended | 10 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | |
INCOME TAX | 13. Income Taxes The Company’s effective income tax rate was (7.6)% and 0% for the three months ended March 31, 2021 and 2020, respectively. The variance from the U.S. federal statutory rate of 21% for the three months ended March 31, 2021 was primarily attributable to a change in the Company’s valuation allowance. The Company’s income tax provision is impacted by a valuation allowance on the Company’s net deferred tax assets, net of reversing taxable temporary differences and considering future annual limitations on net operating loss carryforward utilization enacted by U.S. tax reform legislation. The Company maintains a valuation allowance on its net deferred tax assets for all periods presented as the Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all the recorded deferred tax assets will not be realized in future periods. There was no income tax expense recognized in the three months ended March 31, 2020. | (6) Income Taxes For the years ended December 31, 2020 and 2019, the Company incurred net operating losses and, accordingly, no current provision for income taxes has been recorded. Income tax expense for the year ended December 31, 2020 consisted of the following components: Deferred income taxes: Federal $ State Total deferred income taxes Total income tax expense $ 9,186 For the year ended December 31, 2019, no deferred income tax benefit for income taxes was recorded due to the uncertainty of the realization of net deferred tax assets. The reconciliation of the statutory federal income tax with the provision for income taxes are as follows for the years ended December 31: 2020 2019 Loss before income taxes $ (17,438,519) $ (2,746,021) Income tax benefit at U.S. Federal statutory rate (3,662,089) (576,664) Permanent items 211,193 95,081 Change in valuation allowance 4,121,884 572,404 State income taxes, net of U.S. Federal income tax benefit (661,802) (90,821) Income tax expense $ 9,186 $ — The Company has considered the impact of state rate changes, apportionment weighting and state filing positions when determining its state effective tax rate. The Company adjusts its state effective tax rate for enacted law changes during the year. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income and for tax carryforwards. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 4,856,533 $ 812,183 Lease liabilities 15,679,593 39,604 Financing obligation 15,581,566 962,009 Other 19,607 3,811 36,137,299 1,817,607 Valuation allowance (4,921,773) (799,889) 31,215,526 1,017,718 Deferred tax liabilities: Property and equipment $ (30,879,012) $ (982,871) Operating lease right-of-use assets (349,375) (38,522) (31,228,387) (1,021,393) Net deferred tax liabilities $ (12,861) $ (3,675) When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. The Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets, and accordingly, a full valuation allowance has been provided on its net deferred tax assets as of December 31, 2020 and 2019. The valuation allowance increased $4,121,884 during the year ended December 31, 2020, primarily as a result of an increase in net operating loss carryforwards. The Company continues to monitor the need for a valuation allowance based on the sources of future taxable income. At December 31, 2020, the Company has $19,477,629 of federal net operating loss carryforwards that have no expiration. The Company has $19,398,243 of state net operating loss carryforwards that have no expiration. Under the provisions of the Internal Revenue Code, net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may be subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders by more than 50% over a three-year period, as defined in Sections 382 and 383 of the Internal Revenue Code and similar state provisions. The amount of the annual limitation is determined based on the value of the Company immediately before the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not completed a study to assess whether a change of control has occurred or whether there have been multiple changes of control since the date of the Company’s formation and that there could be additional changes in control in the future. As a result, the Company is unable to estimate the effect of these limitations, if any, on the Company’s ability to utilize net operating losses in the future. A valuation allowance has been provided against the Company’s net operating and tax credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the net operating loss carryforward and the valuation allowance. As of December 31, 2020 and 2019, the Company had no accrued uncertain tax positions or associated interest or penalties and no amounts have been recognized in the Company’s Consolidated Statements of Operations and Comprehensive Loss. The Company files income tax returns in the U.S. federal jurisdiction and state jurisdictions. The tax years since inception remain open and subject to examination by federal and state taxing authorities. | |
Novus Capital Corp [Member] | |||
INCOME TAX | NOTE 9 — INCOME TAX The Company did not have any significant deferred tax assets or liabilities as of December 31, 2020. The Company’s deferred tax asset is as follows: December 31, 2020 Deferred tax asset Net operating loss carryforward $ 88,799 Total deferred tax assets 88,799 Valuation allowance (88,799) Deferred tax asset, net of allowance $ — The income tax benefit consists of the following: December 31, 2020 Federal Current $ — Deferred (71,849) State Current $ — Deferred (16,950) Change in valuation allowance 88,799 Income tax provision $ — As of December 31, 2020, the Company had $342,139 of U.S. federal and $390,549 of state net operating loss carryovers available to offset future taxable income. The federal NOL has an indefinite life while the state net operating loss carryovers will expire by 2040. In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the period from March 5, 2020 (inception) through December 31, 2020, the change in the valuation allowance was $88,799. A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 is as follows: December 31, 2020 Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 4.3 % Change in fair value of Private Warrant liability % Business Combination expenses (4.6) % Change in valuation allowance (0.5) % Income tax provision 0.0 % The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities. The Company’s tax returns since inception remain open and subject to examination. The Company considers Indiana to be a significant state tax jurisdiction. |
FAIR VALUE MEASUREMENTS_2
FAIR VALUE MEASUREMENTS | 3 Months Ended | 10 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
FAIR VALUE MEASUREMENTS | 5. Fair Value Measurements The company categorizes its assets and liabilities into one of three levels based on the assumptions (inputs) used in determining their values, as defined below: · Level 1 : Unadjusted quoted prices in active markets for identical assets or liabilities. · Level 2 : Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 : Unobservable inputs reflecting management’s assumptions about the inputs used in pricing the asset or liability. The table below presents the Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for each measurement: Fair Value as of March 31, 2021 (In thousands) Balance Sheet Account Level 1 Level 2 Level 3 Total Assets: Foreign currency options Other assets, net $ — $ 166 $ — $ 166 Total assets $ — $ 166 $ — $ 166 Liabilities: Foreign currency forward contracts Other current liabilities $ — $ 798 $ — $ 798 Private Warrants Private Warrant liabilities — 29,920 — 29,920 Total liabilities $ — $ 30,718 $ — $ 30,718 The Company’s condensed consolidated financial instruments include foreign currency forward and option contracts that are measured at fair value based on observable market transactions as of the reporting date. The fair values of the outstanding derivative instruments were measured using valuations based upon quoted prices for similar assets and liabilities in active markets (Level 2) and are valued by reference to similar financial instruments, adjusted for terms specific to the contracts. See Note 11. Derivative Financial Instruments for more information on the Company’s use of financial instruments. The Private Warrant liabilities are determined using a Black-Scholes option pricing model, a Level 2 valuation. The significant inputs to the Private Warrant valuation are as follows: On the Closing Date of the Business Combination March 31, 2021 Exercise price $ 11.50 $ 11.50 Stock price $ 24.95 $ 18.30 Volatility 25.0 % 55.8 % Remaining term in years 5.00 4.83 Risk-free rate 0.45 % 0.92 % Dividend yield — — The following table summarizes the private warrant activity for the three months ended March 31, 2021: (In thousands) Fair value of Private Warrants on the Closing Date $ 45,565 Fair value of Private Warrants converted to Public Warrants (5,819) Change in fair value of Private Warrants (9,826) Fair value of Private Warrants outstanding as of March 31, 2021 $ 29,920 The Company did not have any assets or liabilities subject to fair value measurements on a recurring basis as of December 31, 2020. The Warrants are deemed equity instruments for income tax purposes, and accordingly, there is no tax accounting relating to changes in the fair value of the Private Warrants recognized. The changes in the fair value of the Private Warrants may be material to our future operating results. The Company measures certain assets and liabilities at fair value on a non-recurring basis. Assets and liabilities that are measured at fair value on a non-recurring basis include long-lived assets which would generally be recorded at fair value as a result of an impairment charge. Assets acquired and liabilities assumed as part of a business combination or asset acquisition are also measured at fair value on a non-recurring basis during the measurement period allowed by the accounting standards codification guidance for business combinations, when applicable. Carrying values of cash and cash equivalents, accounts receivable, inventories, prepaid expenses and other current assets, accounts payable, accrued expenses, and other current liabilities approximate fair values because of their short-term nature. | |
Novus Capital Corp [Member] | ||
FAIR VALUE MEASUREMENTS | NOTE 10 — FAIR VALUE MEASUREMENTS The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Level 2: Level 3: The fair value of the Private Warrants was estimated using a Black-Scholes option pricing model at each measurement date. The Company recognized a charge of $13,650,000 to the statement of operations resulting from an increase in the fair value of the Private Warrant liabilities from the fair value of $3,250,000 at issuance on May 19, 2020 to $16,900,000 as of December 31, 2020. At Issuance As of (May 19, 2020) December 31, 2020 Exercise price 11.50 11.50 Stock price 10.00 15.65 Volatility 22.0 % 22.0 % Probability of completing a Business Combination 68 % 97.5 % Term in years 5 5 Risk-free rate 0.35 % 0.36 % Dividend yield — — The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2020, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: December 31, Description Level 2020 Assets: Marketable securities held in Trust Account 1 $ 100,048,410 Liabilities: Private Warrant liabilities 2 $ 16,900,000 |
SUBSEQUENT EVENTS_2_3
SUBSEQUENT EVENTS | 3 Months Ended | 10 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | |
SUBSEQUENT EVENTS | 15. Subsequent Events In April 2021, the Company acquired Root AI, Inc., (“Root AI”) an artificial intelligence farming startup that creates intelligent robots to help manage high-tech indoor farms, for approximately $60,000. Total consideration included $10,000 in cash and 2,328 shares of the Company’s common stock. Founded in 2018, Root AI is based in Somerville, Massachusetts and has 19 full-time employees. The acquisition of Root AI is expected to provide the Company with a baseline of harvesting support while helping to evaluate crop health, predict yield, and optimize overall operations of its CEA facilities. The acquisition of Root AI will be accounted for under the acquisition method. On April 12, 2021, the Company granted a total of 6,003 restricted stock units under the Plan. | (14) Subsequent Events On January 29, 2021, the Business Combination and Merger was completed. The transaction provided the Company approximately $475.0 million of unrestricted cash, including $375.0 million in gross proceeds from the fully committed common stock PIPE. In connection with the transaction: · Each share of Preferred Stock that was then issued and outstanding was automatically converted into AppHarvest Common Stock, such that each converted share of Preferred Stock was no longer outstanding and ceased to exist. · Novus assumed the Convertible Note, and the outstanding principal and unpaid accrued interest due was converted into an aggregate 3,242,336 shares of Novus’ common stock, such that the Convertible Note was no longer outstanding and ceased to exist. · Each share of AppHarvest Common Stock, including the AppHarvest Common stock issued upon conversion by the AppHarvest Preferred stockholders, was converted into and exchanged for 2.1504 shares (the “Exchange Ratio”) of Novus’ common stock. · Each option to purchase AppHarvest Common Stock that was outstanding, whether vested or unvested, was converted into an option to purchase a number of shares of Novus Common Stock equal to the product (rounded down to the nearest whole number) of (i) the number of shares of AppHarvest Common Stock subject to such AppHarvest option and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such AppHarvest option, divided by (B) the Exchange Ratio. · Each restricted stock unit awarded by AppHarvest that was outstanding, whether vested or unvested, was converted into an award of restricted stock units to acquire a number shares of Novus Common Stock equal to the product (rounded down to the nearest whole number) of (1) the number of shares of AppHarvest Common Stock subject to the AppHarvest restricted stock unit award and (2) the Exchange Ratio. As further discussed within Note 8(a) to these consolidated financial statements, on March 1, 2021, the Company closed on the Membership Interest Purchase and Sale Agreement with Equilibrium. | |
Novus Capital Corp [Member] | |||
SUBSEQUENT EVENTS | NOTE 11 — SUBSEQUENT EVENTS The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than as described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements. On January 29, 2021, (the “Closing Date”), the Company consummated the AppHarvest Business Combination Agreement pursuant to which AppHarvest Operations, Inc., a Delaware corporation (f/k/a AppHarvest, Inc.) (“Legacy AppHarvest”) was merged with and into Merger Sub, with Legacy AppHarvest surviving the Merger as a wholly owned subsidiary of the Company. On the Closing Date, the Company changed its name to AppHarvest, Inc. |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 10 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2020 | |
Principles of Consolidation | b) Principles of Consolidation The Company consolidates entities in which it holds a controlling financial interest. For voting interest entities, the Company is considered to hold a controlling financial interest when it is able to exercise control over the investees’ operating and financial decisions. The Company does not have interests in any entities that would be considered variable interest entities. All significant intercompany balances and transactions have been eliminated in consolidation. | ||
Use of Estimates | Use of Estimates in Condensed Consolidated Financial Statements In preparing the condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the recording of revenue, valuation of inventory, the valuation of stock-based compensation, the valuation of private warrants, lease accounting, the useful life of fixed assets and income taxes. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the global volatility and general market disruption resulting from the global outbreak of the novel coronavirus disease (“COVID-19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. | a) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on the Company’s knowledge of current events and actions the Company may undertake in the future, actual results could differ from those estimates and assumptions. Significant items subject to such estimates and assumptions include the useful lives of fixed assets, the valuation of instruments issued for financing and stock-based compensation, lease accounting and income taxes. The Company utilizes estimates and assumptions in determining the fair value of its Common Stock and other equity instruments. The fair value was determined using valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation . The Company granted stock options at exercise prices not less than the fair value of its Common Stock, as determined by the Board of Directors contemporaneously at the date such grants were made, with input from management. The fair value of Common Stock at the grant date was determined to have been higher in connection with retrospective fair value assessments for financial reporting purposes. The exercise prices of the stock option awards affected by the retrospective fair value assessment were not modified. The Company’s retrospective fair value assessment estimated the fair value of the Company’s Common Stock based on a number of objective and subjective factors, including external market conditions affecting the Company’s industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s Common Stock at the time, and the likelihood of achieving a Deemed Liquidity Event, as defined, such as a public offering or sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of Common Stock and other equity instruments at each valuation date. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the impact from the global outbreak of the novel coronavirus disease (“COVID‑19”). Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, environmental, regulatory or administrative actions, claims, or proceedings. | |
Cash and Cash Equivalents | c) Cash and Cash Equivalents The Company considers all highly liquid, short-term investments with an original maturity date of three months or less to be cash equivalents. The Company deposits its cash and cash equivalents in a commercial bank. From time to time, cash balances in these accounts exceed the Federal Deposit Insurance Corporation insured limits. The Company mitigates exposure to credit risk by placing cash and cash equivalents with highly rated financial institutions. To date, the Company has not experienced any losses in such accounts, and believes it is not exposed to any significant credit risk on its cash and cash equivalents. At December 31, 2020, cash and cash equivalents includes $5,646,392 of cash restricted for future minimum lease payments and operating and maintenance costs associated with the Company’s lease with a related party (see Note 8(a)). The Company had no restricted cash balances at December 31, 2019. | ||
Income Taxes | h) Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of December 31, 2020 and 2019, the Company does not have any uncertain tax positions. The Company’s policy is to recognize interest and penalties on uncertain tax positions as income tax expense. | ||
Net Loss per Common Share | l) Net Loss Per Common Share The Company’s basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of Common Stock outstanding for the period. The diluted net loss per common share is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, stock options to purchase Common Stock, restricted stock units and redeemable convertible preferred stock are considered to be Common Stock equivalents but have been excluded from the calculation of diluted net loss per common share as their effect is anti-dilutive. | ||
Recent Accounting Pronouncements | New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU 2019-12 is part of the FASB’s overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes certain exceptions to the general principles of ASC 740, Income Taxes, in order to reduce the cost and complexity of its application in the areas of intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date losses in interim periods and other areas within ASC 740. The Company adopted ASU 2019-12 on January 1, 2021 and the adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the condensed consolidated financial statements . | ||
Novus Capital Corp [Member] | |||
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. | ||
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. | ||
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. | ||
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the 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. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of December 31, 2020. | ||
Marketable Securities Held in Trust Account | Marketable Securities Held in Trust Account At December 31, 2020, substantially all of the assets held in the Trust Account were held in money market funds. | ||
Derivative Warrant Liabilities | Derivative Warrant Liabilities The Company accounts for its Private Warrants in accordance with ASC 815-40, under which the Company has determined that the Private Warrants are recognized as liabilities at fair value and subject to re-measurement at each balance sheet date until exercised. Changes in fair value of the Private Warrants is recognized in the Company’s Statement of Operations. The fair value of the Private Warrants is estimated at each measurement date using a Black-Scholes option pricing model (see Note 10). | ||
Common Stock Subject to Possible Redemption | Common Stock Subject to Possible Redemption The Company accounts for its common stock subject to possible redemption in accordance with guidance in ASC 480 “Distinguishing Liabilities from Equity.” Common stock subject to redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain redemption rights considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, common stock subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section of the Company’s consolidated balance sheet. | ||
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement process for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security “CARES” Act into law. The CARES Act includes several significant business tax provisions that, among other things, would eliminate the taxable income limit for certain net operating losses (“NOL) and allow businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior years, suspend the excess business loss rules, accelerate refunds of previously generated corporate alternative minimum tax credits, generally loosen the business interest limitation under IRC section 163(j) from 30 percent to 50 percent among other technical corrections included in the Tax Cuts and Jobs Act tax provisions. The Company does not believe that the CARES Act will have a significant impact on Company’s financial position or statement of operations. | ||
Net Loss per Common Share | Net Loss per Common Share Net loss per share is computed by dividing net loss by the weighted average number of redeemable common stock outstanding during the period. The Company has not considered the effect of warrants sold in the Initial Public Offering and the private placement to purchase 13,250,000 shares of common stock in the calculation of diluted loss per share, since the exercise of the warrants are contingent upon the occurrence of future events. As a result, diluted net loss per common share is the same as basic net loss per common share for the period presented. Basic and diluted loss per common share is calculated as follows: | ||
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage of $250,000. The Company has not experienced losses on this account and management believes the Company is not exposed to significant risks on such account. | ||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the accompanying consolidated balance sheet, primarily due to their short-term nature. | ||
Recent Accounting Pronouncements | Recent Accounting Standards Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
RESTATEMENT OF FINANCIAL STAT_2
RESTATEMENT OF FINANCIAL STATEMENTS (Tables) | 10 Months Ended |
Dec. 31, 2020 | |
Novus Capital Corp [Member] | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |
Schedule of Restatement on the Balance Sheet, Statement of Operations and Statement of Cash | The impact of the restatement on the Balance Sheet, Statement of Operations and Statement of Cash Flows for the Affected Period is presented below: As of December 31, 2020 As Previously Restatement Reported Adjustment As Restated Balance Sheet Total assets $ $ — $ Liabilities and stockholders’ equity Total current liabilities — Private Warrant liabilities — Total liabilities Common stock, shares subject to possible redemption 34,140,130 Stockholders’ equity Preferred stock, $0.0001 par value — — — Common stock, $0.0001 par value — Additional paid in capital — Accumulated deficit Total stockholders’ equity Total liabilities and stockholders’ equity — For the Period from March 5, 2020 (Inception) through December 31, 2020 As Previously Restatement Reported Adjustment As Restated Consolidated Statement of Operations Loss from operations $ $ $ Other (expense)/income: Change in fair value of Private Warrant liabilities — Interest income-bank 119 — 119 Interest earned on marketable securities held in Trust Account 48,410 — 48,410 Other income, net 48,529 Loss before income tax Income tax expense — — — Net loss $ $ $ Weighted average shares, basic and diluted 2,959,790 7,185,559 10,145,349 Basic and diluted net loss per common share $ $ $ For the Period from March 5, 2020 (Inception) through December 31, 2020 As Previously Restatement Reported Adjustment As Restated Statement of Cash Flows Net loss $ $ $ Net cash used in operating activities Net cash used in investing — Net cash provided by financing 100,818,289 77,330 Net change in cash $ 311,954 $ — $ |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | ||
Summary of basic and diluted net loss per common share | Period Ended March 31, 2021 2020 Numerator: Net loss $ (28,515) $ (818) Denominator: Weighted-average common shares outstanding, basic and diluted 80,729 32,858 Net loss per common share, basic and diluted $ (0.35) $ (0.02) | Year Ended December 31, 2020 2019 Numerator: Net loss $ (17,447,705) $ (2,746,021) Denominator: Weighted-average common shares outstanding, basic and diluted 9,716,768 9,507,926 Net loss per common share, basic and diluted $ (1.80) $ (0.29) |
INCOME TAX (Tables)
INCOME TAX (Tables) | 10 Months Ended | 12 Months Ended |
Dec. 31, 2020 | Dec. 31, 2020 | |
Schedule of company's deferred tax asset | December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 4,856,533 $ 812,183 Lease liabilities 15,679,593 39,604 Financing obligation 15,581,566 962,009 Other 19,607 3,811 36,137,299 1,817,607 Valuation allowance (4,921,773) (799,889) 31,215,526 1,017,718 Deferred tax liabilities: Property and equipment $ (30,879,012) $ (982,871) Operating lease right-of-use assets (349,375) (38,522) (31,228,387) (1,021,393) Net deferred tax liabilities $ (12,861) $ (3,675) | |
Schedule of income tax benefit | Income tax expense for the year ended December 31, 2020 consisted of the following components: Deferred income taxes: Federal $ State Total deferred income taxes Total income tax expense $ 9,186 | |
Schedule of reconciliation of the federal income tax rate to the Company's effective tax rate | 2020 2019 Loss before income taxes $ (17,438,519) $ (2,746,021) Income tax benefit at U.S. Federal statutory rate (3,662,089) (576,664) Permanent items 211,193 95,081 Change in valuation allowance 4,121,884 572,404 State income taxes, net of U.S. Federal income tax benefit (661,802) (90,821) Income tax expense $ 9,186 $ — | |
Novus Capital Corp [Member] | ||
Schedule of company's deferred tax asset | The Company’s deferred tax asset is as follows: December 31, 2020 Deferred tax asset Net operating loss carryforward $ 88,799 Total deferred tax assets 88,799 Valuation allowance (88,799) Deferred tax asset, net of allowance $ — | |
Schedule of income tax benefit | The income tax benefit consists of the following: December 31, 2020 Federal Current $ — Deferred (71,849) State Current $ — Deferred (16,950) Change in valuation allowance 88,799 Income tax provision $ — | |
Schedule of reconciliation of the federal income tax rate to the Company's effective tax rate | A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2020 is as follows: December 31, 2020 Statutory federal income tax rate 21.0 % State taxes, net of federal tax benefit 4.3 % Change in fair value of Private Warrant liability % Business Combination expenses (4.6) % Change in valuation allowance (0.5) % Income tax provision 0.0 % |
FAIR VALUE MEASUREMENTS (Tabl_2
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended | 10 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Schedule of significant fair value of the private warrants | The Private Warrant liabilities are determined using a Black-Scholes option pricing model, a Level 2 valuation. The significant inputs to the Private Warrant valuation are as follows: On the Closing Date of the Business Combination March 31, 2021 Exercise price $ 11.50 $ 11.50 Stock price $ 24.95 $ 18.30 Volatility 25.0 % 55.8 % Remaining term in years 5.00 4.83 Risk-free rate 0.45 % 0.92 % Dividend yield — — | |
Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | The table below presents the Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for each measurement: Fair Value as of March 31, 2021 (In thousands) Balance Sheet Account Level 1 Level 2 Level 3 Total Assets: Foreign currency options Other assets, net $ — $ 166 $ — $ 166 Total assets $ — $ 166 $ — $ 166 Liabilities: Foreign currency forward contracts Other current liabilities $ — $ 798 $ — $ 798 Private Warrants Private Warrant liabilities — 29,920 — 29,920 Total liabilities $ — $ 30,718 $ — $ 30,718 | |
Novus Capital Corp [Member] | ||
Schedule of significant fair value of the private warrants | At Issuance As of (May 19, 2020) December 31, 2020 Exercise price 11.50 11.50 Stock price 10.00 15.65 Volatility 22.0 % 22.0 % Probability of completing a Business Combination 68 % 97.5 % Term in years 5 5 Risk-free rate 0.35 % 0.36 % Dividend yield — — | |
Schedule of Company's assets and liabilities that are measured at fair value on a recurring basis | December 31, Description Level 2020 Assets: Marketable securities held in Trust Account 1 $ 100,048,410 Liabilities: Private Warrant liabilities 2 $ 16,900,000 |
DESCRIPTION OF ORGANIZATION A_2
DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS (Details) - Novus Capital Corp [Member] - USD ($) | Sep. 28, 2020 | May 19, 2020 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | |||
Number of units issued | 37,500,000 | 10,000,000 | |
Price per share | $ 10 | $ 9.20 | |
Proceeds from issuance of units | $ 375,000,000 | ||
Number of warrants to purchase shares issued | 3,250,000 | ||
Price of warrants | $ 1 | ||
Proceeds from issuance of warrants | $ 3,250,000 | ||
Transaction costs | $ 2,456,726 | ||
Underwriting fees | 2,000,000 | ||
Other offering costs | $ 456,726 | ||
Cash held outside of the Trust Account | $ 311,954 | ||
Threshold minimum aggregate fair market value as a percentage of the assets held in the Trust Account | 80.00% | ||
Threshold percentage of outstanding voting securities of the target to be acquired by post-transaction company to complete business combination | 50.00% | ||
Minimum net tangible assets upon consummation of the Company's initial Business Combination | $ 5,000,001 | ||
Obligation to redeem Public Shares if entity does not complete a Business Combination (as a percent) | 100.00% | ||
Threshold business days for redemption of public shares | 10 days | ||
Operating bank accounts | $ 311,954 | ||
Securities held in the Trust | 100,048,410 | ||
Working capital deficit | 2,606,959 | ||
Deposit in trust account | $ 48,000 | ||
IPO | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of units issued | 10,000,000 | ||
Price per share | $ 10 | $ 18 | |
Proceeds from issuance of units | $ 100,000,000 | ||
Private Placement | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of warrants to purchase shares issued | 3,250,000 | ||
Price of warrants | $ 1 | ||
Proceeds from issuance of warrants | $ 3,250,000 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Basic and Diluted Loss Per Common Share (Details) - USD ($) | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Basic and diluted loss per common share | |||||
Net Loss | $ (28,515,000) | $ (818,000) | $ (17,447,705) | $ (2,746,021) | |
Adjusted net loss | $ (17,447,705) | $ (2,746,021) | |||
Weighted average shares outstanding, basic and diluted | 80,729 | 32,858 | 9,716,768 | 9,507,926 | |
Net loss per common share, basic and diluted | $ (0.35) | $ (0.02) | $ (1.80) | $ (0.29) | |
Novus Capital Corp [Member] | |||||
Basic and diluted loss per common share | |||||
Net Loss | $ (17,185,742) | ||||
Weighted average shares outstanding, basic and diluted | 10,145,349 | ||||
Net loss per common share, basic and diluted | $ (1.69) |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 | |||
Common share equivalent securities exclusion of shares in the calculation of weighted average of common shares outstanding | 18,677,000 | 2,159,000 | 13,493,555 | 5,649,932 | ||
Novus Capital Corp [Member] | ||||||
Unrecognized tax benefits | 0 | $ 0 | ||||
Unrecognized tax benefits accrued for interest and penalties | $ 0 | 0 | ||||
Shares subject to forfeiture to the extent that the underwriters' over-allotment is not exercised | 375,000 | 13,250,000 | ||||
Federal Depository Insurance Coverage | $ 250,000 | $ 250,000 |
RESTATEMENT OF FINANCIAL STAT_3
RESTATEMENT OF FINANCIAL STATEMENTS (Details) - USD ($) | 10 Months Ended | ||
Dec. 31, 2020 | Sep. 28, 2020 | Dec. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Common stock subject to possible redemption 12,650,000 shares at redemption value | $ 45,207,530 | $ 12,258,132 | |
Novus Capital Corp [Member] | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Price per share | $ 9.20 | $ 10 | |
Minimum net tangible assets upon consummation of the Company's initial Business Combination | $ 5,000,001 | ||
Common stock subject to redemption | $ 12,500,000 | ||
Common stock subject to redemption (in shares) | 9,235,987 | ||
Common stock subject to possible redemption, shares | 12,650,000 | ||
Common stock subject to possible redemption 12,650,000 shares at redemption value | $ 126,500,000 |
RESTATEMENT OF FINANCIAL STAT_4
RESTATEMENT OF FINANCIAL STATEMENTS - Balance Sheet (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Mar. 04, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total assets | $ 507,422,000 | $ 180,917,498 | $ 13,943,105 | |||
Liabilities and Equity [Abstract] | ||||||
Total current liabilities | 32,406,000 | 154,780,798 | 666,849 | |||
Total liabilities | 66,172,000 | 156,151,260 | 4,867,127 | |||
Common stock subject to possible redemption 12,650,000 shares at redemption value | 45,207,530 | 12,258,132 | ||||
Stockholders' equity | ||||||
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, none issued and outstanding | 0 | 0 | ||||
Common stock, par value $0.0001, 25,500,000 and 19,600,000 shares authorized, 9,750,427 and 9,676,677 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 10,000 | 4,446 | 968 | |||
Additional paid in capital | 491,552,000 | 45,890,000 | 497,306 | |||
Accumulated deficit | (49,643,000) | (21,128,133) | (3,680,428) | |||
Total stockholders' equity | 441,250,000 | 24,766,000 | $ 13,157,000 | 9,076,000 | $ (921,938) | |
Total liabilities and stockholders' equity | $ 507,422,000 | 180,917,498 | 13,943,105 | |||
Novus Capital Corp [Member] | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total assets | 100,438,065 | |||||
Liabilities and Equity [Abstract] | ||||||
Total current liabilities | 3,078,188 | |||||
Private Warrant liabilities | 16,900,000 | |||||
Total liabilities | 19,978,188 | |||||
Common stock subject to possible redemption 12,650,000 shares at redemption value | 126,500,000 | |||||
Stockholders' equity | ||||||
Common stock, par value $0.0001, 25,500,000 and 19,600,000 shares authorized, 9,750,427 and 9,676,677 shares issued and outstanding as of December 31, 2020 and 2019, respectively | ||||||
Additional paid in capital | ||||||
Accumulated deficit | (46,040,123) | |||||
Total stockholders' equity | (46,040,123) | $ 0 | ||||
Total liabilities and stockholders' equity | 100,438,065 | |||||
Previously Reported | ||||||
Stockholders' equity | ||||||
Total stockholders' equity | (20,441,000) | (3,182,000) | ||||
Previously Reported | Novus Capital Corp [Member] | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Total assets | 100,438,065 | |||||
Liabilities and Equity [Abstract] | ||||||
Total current liabilities | 3,078,188 | |||||
Total liabilities | 3,078,188 | |||||
Common stock subject to possible redemption 12,650,000 shares at redemption value | 92,359,870 | |||||
Stockholders' equity | ||||||
Common stock, par value $0.0001, 25,500,000 and 19,600,000 shares authorized, 9,750,427 and 9,676,677 shares issued and outstanding as of December 31, 2020 and 2019, respectively | 341 | |||||
Additional paid in capital | 8,458,078 | |||||
Accumulated deficit | (3,458,412) | |||||
Total stockholders' equity | 5,000,007 | |||||
Total liabilities and stockholders' equity | 100,438,065 | |||||
Revision of Prior Period, Adjustment | ||||||
Stockholders' equity | ||||||
Total stockholders' equity | 45,207,000 | $ 12,258,000 | ||||
Revision of Prior Period, Adjustment | Novus Capital Corp [Member] | ||||||
Liabilities and Equity [Abstract] | ||||||
Private Warrant liabilities | 16,900,000 | |||||
Total liabilities | 16,900,000 | |||||
Common stock subject to possible redemption 12,650,000 shares at redemption value | 34,140,130 | |||||
Stockholders' equity | ||||||
Common stock, par value $0.0001, 25,500,000 and 19,600,000 shares authorized, 9,750,427 and 9,676,677 shares issued and outstanding as of December 31, 2020 and 2019, respectively | (341) | |||||
Additional paid in capital | (8,458,078) | |||||
Accumulated deficit | (42,581,711) | |||||
Total stockholders' equity | $ (54,040,130) |
RESTATEMENT OF FINANCIAL STAT_5
RESTATEMENT OF FINANCIAL STATEMENTS - Consolidated Statement of Operations (Details) - USD ($) | May 19, 2020 | Mar. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Loss from operations | $ (36,026,000) | $ (980,000) | $ (16,471,373) | $ (2,732,925) | |||
Other (expense)/income: | |||||||
Change in fair value of Private Warrant liabilities | $ 9,826,000 | 9,826,000 | 0 | ||||
Loss before income tax | (26,502,000) | (818,000) | (17,438,519) | (2,746,021) | |||
Income tax expense | 2,013,000 | 0 | 9,186 | ||||
Net Loss | $ (28,515,000) | $ (818,000) | $ (17,447,705) | $ (2,746,021) | |||
Weighted average shares outstanding, basic and diluted | 80,729 | 32,858 | 9,716,768 | 9,507,926 | |||
Net loss per common share, basic and diluted | $ (0.35) | $ (0.02) | $ (1.80) | $ (0.29) | |||
Novus Capital Corp [Member] | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Loss from operations | $ (3,584,271) | ||||||
Other (expense)/income: | |||||||
Change in fair value of Private Warrant liabilities | $ (13,650,000) | (13,650,000) | |||||
Interest income-bank | 119 | ||||||
Interest earned on marketable securities held in Trust Account | 48,410 | ||||||
Other income, net | (13,601,471) | ||||||
Net Loss | $ (17,185,742) | ||||||
Weighted average shares outstanding, basic and diluted | 10,145,349 | ||||||
Net loss per common share, basic and diluted | $ (1.69) | ||||||
Previously Reported | Novus Capital Corp [Member] | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Loss from operations | $ (3,506,941) | ||||||
Other (expense)/income: | |||||||
Interest income-bank | 119 | ||||||
Interest earned on marketable securities held in Trust Account | 48,410 | ||||||
Net Loss | $ (3,458,412) | ||||||
Weighted average shares outstanding, basic and diluted | 2,959,790 | ||||||
Net loss per common share, basic and diluted | $ (1.17) | ||||||
Revision of Prior Period, Adjustment | Novus Capital Corp [Member] | |||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||
Loss from operations | $ (77,330) | ||||||
Other (expense)/income: | |||||||
Change in fair value of Private Warrant liabilities | (13,650,000) | ||||||
Net Loss | $ (13,727,330) | ||||||
Weighted average shares outstanding, basic and diluted | 7,185,559 | ||||||
Net loss per common share, basic and diluted | $ (0.53) |
RESTATEMENT OF FINANCIAL STAT_6
RESTATEMENT OF FINANCIAL STATEMENTS - Statement of Cash Flows (Details) - USD ($) | 3 Months Ended | 10 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net Loss | $ (28,515,000) | $ (818,000) | $ (17,447,705) | $ (2,746,021) | |
Net cash used in operating activities | (36,157,000) | (953,000) | (13,146,733) | (5,490,681) | |
Net cash used in investing | (134,538,000) | (83,000) | (35,682,287) | (3,615,167) | |
Net cash provided by financing | 446,446,000 | 4,880,000 | 64,706,657 | 14,781,811 | |
Net change in cash | $ 275,751,000 | $ 3,844,000 | $ 15,877,637 | $ 5,675,963 | |
Novus Capital Corp [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net Loss | $ (17,185,742) | ||||
Net cash used in operating activities | (583,665) | ||||
Net cash used in investing | (100,000,000) | ||||
Net cash provided by financing | 100,895,619 | ||||
Net change in cash | 311,954 | ||||
Previously Reported | Novus Capital Corp [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net Loss | (3,458,412) | ||||
Net cash used in operating activities | (506,335) | ||||
Net cash used in investing | (100,000,000) | ||||
Net cash provided by financing | 100,818,289 | ||||
Net change in cash | 311,954 | ||||
Revision of Prior Period, Adjustment | Novus Capital Corp [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net Loss | (13,727,330) | ||||
Net cash used in operating activities | (77,330) | ||||
Net cash provided by financing | $ 77,330 |
PUBLIC OFFERING (Details)
PUBLIC OFFERING (Details) - $ / shares | Sep. 28, 2020 | Dec. 31, 2020 | Jan. 29, 2021 |
Issue price of a unit | $ 10 | ||
Novus Capital Corp [Member] | |||
Number of units issued | 37,500,000 | 10,000,000 | |
Issue price of a unit | $ 10 | ||
Number of shares in a unit | 1 | ||
Number of warrants in a unit | 1 | ||
Number of shares issuable per warrant | 1 | ||
Warrants exercise price | $ 11.50 |
PRIVATE PLACEMENT (Details)
PRIVATE PLACEMENT (Details) - Novus Capital Corp [Member] | 10 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Related Party Transaction | |
Number of warrants to purchase shares issued | 3,250,000 |
Price of warrants | $ / shares | $ 1 |
Sponsors and/or their designees | |
Related Party Transaction | |
Number of warrants to purchase shares issued | 2,750,000 |
EarlyBirdCapital and/or its designees | |
Related Party Transaction | |
Number of warrants to purchase shares issued | 500,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | May 19, 2020 | Mar. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||||
Issuance of common stock to initial stockholders | $ 4,880,000 | |||
Novus Capital Corp [Member] | ||||
Related Party Transaction [Line Items] | ||||
Issuance of common stock to initial stockholders | $ 25,000 | $ 25,000 | ||
Shares subject to forfeiture to the extent that the underwriters' over-allotment is not exercised | 375,000 | 13,250,000 | ||
Percentage of issued and outstanding shares after the Initial Public Offering collectively held by initial stockholders | 20.00% | |||
Number of shares for forfeited | 375,000 | |||
Threshold Percentage Of Founder Shares Subject To Certain Limited Exceptions, Not To Transfer, Assign Or Sell | 50.00% | |||
Threshold Period For Not To Transfer, Assign Or Sell Any Shares Or Warrants After Completion Of Initial Business Combination | 1 year | |||
Stock price trigger to transfer, assign or sell any shares or warrants of the company, after the completion of the initial business combination (in dollars per share) | $ 12.50 | |||
Threshold trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 20 days | |||
Threshold consecutive trading days for transfer, assign or sale of shares or warrants, after the completion of the initial business combination | 30 days | |||
Common stock | ||||
Related Party Transaction [Line Items] | ||||
Shares purchased by founder | 2,470,000 | |||
Issuance of common stock to initial stockholders | $ 0 | |||
Common stock | Novus Capital Corp [Member] | ||||
Related Party Transaction [Line Items] | ||||
Shares purchased by founder | 2,875,000 | 2,875,000 | ||
Issuance of common stock to initial stockholders | $ 287 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($) | 1 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | May 19, 2020 | |
Related Party Transaction [Line Items] | ||||
Outstanding amount of the promissory note | $ 0 | $ 30,000,000 | ||
Promissory Note | Novus Capital Corp [Member] | ||||
Related Party Transaction [Line Items] | ||||
Aggregate principal amount | $ 150,000 | |||
Outstanding amount of the promissory note | $ 97,525 | |||
Related Party Loans | Novus Capital Corp [Member] | ||||
Related Party Transaction [Line Items] | ||||
Loans Convertible Into Warrants | $ 1,500,000 | |||
Price of warrants (in dollars per share) | $ 1 |
COMMITMENTS (Details)
COMMITMENTS (Details) - Novus Capital Corp [Member] | Sep. 28, 2020USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares |
COMMITMENTS | ||
Percentage of cash Fee upon gross proceeds | 3.50% | |
Cash fee allocated to third parties | $ 3,500,000 | |
Percentage of Cash Fee Allocated To Third Parties | 30.00% | |
Share Price | $ / shares | $ 10 | $ 9.20 |
Number of units issued | shares | 37,500,000 | 10,000,000 |
Aggregate gross proceeds | $ 375,000,000 | |
AppHarvest Business Combination Agreement [Member] | Company Interim Period Convertible Notes | ||
COMMITMENTS | ||
Share Price | $ / shares | $ 9.50 | |
Quotient obtained for right to receive shares of common stock | 50,000,000 | |
AppHarvest Business Combination Agreement [Member] | Maximum | Company Interim Period Convertible Notes | ||
COMMITMENTS | ||
Principal balance | $ 30,000,000 | |
Early Bird Capital | ||
COMMITMENTS | ||
Percentage of Cash Fee Allocated To Third Parties | 1.00% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 1 Months Ended | 10 Months Ended | ||||||
Mar. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Jan. 29, 2021 | Sep. 28, 2020 | May 19, 2020 | Dec. 31, 2019 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||
Preferred stock shares issued | 0 | 0 | ||||||
Preferred stock shares outstanding | 0 | 0 | ||||||
Common stock, shares authorized | 750,000,000 | 750,000,000 | 750,000,000 | 19,600,000 | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common Stock Shares Issued | 44,461,000 | 97,925,000 | 9,676,677 | |||||
Common Stock Shares Outstanding | 44,461,000 | 97,925,000 | 9,676,677 | |||||
Novus Capital Corp [Member] | ||||||||
Preferred stock, shares authorized | 1,000,000 | |||||||
Preferred stock, par value | $ 0.0001 | |||||||
Preferred stock shares issued | 0 | |||||||
Preferred stock shares outstanding | 0 | |||||||
Common stock, shares authorized | 30,000,000 | |||||||
Common stock, par value | $ 0.0001 | |||||||
Common Stock Shares Issued | 0 | |||||||
Common Stock Shares Outstanding | 0 | |||||||
Shares of common stock subject to possible redemption | 12,650,000 | |||||||
Shares subject to forfeiture to the extent that the underwriters' over-allotment is not exercised | 375,000 | 13,250,000 | ||||||
Warrants exercisable term from the closing of the public offering | 30 days | |||||||
Warrants exercisable for cash | $ 0 | |||||||
Warrants exercise price | $ 11.50 | |||||||
Redemption price per warrant | $ 0.01 | |||||||
Closing price of share for threshold trading days | 20 days | |||||||
Closing price of share for threshold consecutive trading days | 30 days | |||||||
Price per share | $ 9.20 | $ 10 | ||||||
Adjustment of exercise price of warrants based on market value (as a percent) | 115.00% | |||||||
IPO | Novus Capital Corp [Member] | ||||||||
Warrants exercisable term from the closing of the public offering | 12 months | |||||||
Price per share | $ 18 | $ 10 | ||||||
Maximum | Novus Capital Corp [Member] | ||||||||
Minimum threshold written notice period for redemption of public warrants | 30 days | |||||||
Minimum | Novus Capital Corp [Member] | ||||||||
Percentage of gross proceeds on total equity proceeds | 60.00% | |||||||
Representative Shares | Novus Capital Corp [Member] | ||||||||
Shares purchased by founder | 150,000 | |||||||
Fair value of shares issued | $ 1,304 | $ 1,304 |
INCOME TAX - Deferred tax asset
INCOME TAX - Deferred tax asset (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax asset | ||
Net operating loss carryforward | $ 4,856,533 | $ 812,183 |
Total deferred tax assets | 36,137,299 | 1,817,607 |
Valuation allowance | (4,921,773) | (799,889) |
Deferred tax asset, net of allowance | 12,861 | $ 3,675 |
Novus Capital Corp [Member] | ||
Deferred tax asset | ||
Net operating loss carryforward | 88,799 | |
Total deferred tax assets | 88,799 | |
Valuation allowance | $ (88,799) |
INCOME TAX - Income tax benefit
INCOME TAX - Income tax benefit (Details) - USD ($) | 3 Months Ended | 10 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2020 | |
Federal | ||||
Deferred | $ 8,606 | |||
State | ||||
Deferred | 580 | |||
Income tax provision | $ 2,013,000 | $ 0 | 9,186 | |
Novus Capital Corp [Member] | ||||
Federal | ||||
Current | $ (71,849) | |||
State | ||||
Current | (16,950) | |||
Deferred | 88,799 | |||
U.S. federal | ||||
State | ||||
Net operating loss carryovers | 19,477,629 | 19,477,629 | ||
U.S. federal | Novus Capital Corp [Member] | ||||
State | ||||
Net operating loss carryovers | 342,139 | 342,139 | ||
State | ||||
State | ||||
Net operating loss carryovers | 19,398,243 | 19,398,243 | ||
State | Novus Capital Corp [Member] | ||||
State | ||||
Net operating loss carryovers | $ 390,549 | $ 390,549 |
INCOME TAX - Effective tax rate
INCOME TAX - Effective tax rate (Details) | 3 Months Ended | 10 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income tax provision | (7.60%) | 0.00% | |
Novus Capital Corp [Member] | |||
Statutory federal income tax rate | 21.00% | ||
State taxes, net of federal tax benefit | 4.30% | ||
Change in fair value of Private Warrant liability | (20.20%) | ||
Business Combination expenses | (4.60%) | ||
Change in valuation allowance | (0.50%) | ||
Income tax provision | 0.00% |
FAIR VALUE MEASUREMENTS - (Deta
FAIR VALUE MEASUREMENTS - (Details) - USD ($) | May 19, 2020 | Mar. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Change in fair value of Private Warrant liabilities | $ (9,826,000) | $ (9,826,000) | $ 0 | ||
Novus Capital Corp [Member] | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Change in fair value of Private Warrant liabilities | $ 13,650,000 | $ 13,650,000 | |||
Increase in fair value of private warrant liabilities | $ 3,250,000 | ||||
Private Warrant Liabilities | $ 16,900,000 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair value of the private warrants (Details) - Novus Capital Corp [Member] | Dec. 31, 2020Yitem | May 19, 2020Yitem |
Exercise price | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative measurement input | 11.50 | 11.50 |
Stock price | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative measurement input | 15.65 | 10 |
Volatility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative measurement input | 22 | 22 |
Probability of completing a Business Combination | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative measurement input | 97.5 | 68 |
Term in years | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative measurement input | Y | 5 | 5 |
Risk-free rate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative measurement input | 0.36 | 0.35 |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair value on a recurring basis (Details) - Novus Capital Corp [Member] | Dec. 31, 2020USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Marketable securities held in Trust Account | $ 100,048,410 |
Private Warrant Liabilities | $ 16,900,000 |