Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2021 | |
Cover [Abstract] | |
Document Type | S-1 |
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 | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 221,574 | $ 21,909 |
Restricted cash | 7,250 | 0 |
Inventories, net | 4,187 | 3,387 |
Prepaid expenses and other current assets | 3,410 | 481 |
Total current assets | 236,421 | 25,777 |
Operating lease right-of-use assets, net | 2,196 | 1,307 |
Property and equipment, net | 288,610 | 152,645 |
Goodwill | 50,863 | 0 |
Other intangible assets, net | 9,321 | 0 |
Other assets, net | 16,724 | 1,188 |
Total non-current assets | 367,714 | 155,140 |
Total assets | 604,135 | 180,917 |
Current Liabilities: | ||
Accounts payable | 16,354 | 1,342 |
Accrued expenses | 14,516 | 5,184 |
Current portion of lease liabilities with a related party | 0 | 59,217 |
Current portion of lease liabilities | 537 | 166 |
Current portion of financing obligation with a related party | 0 | 58,795 |
Current portion of long-term debt | 9,633 | 0 |
Note payable with a related party | 0 | 30,000 |
Other current liabilities | 960 | 77 |
Total current liabilities | 42,000 | 154,781 |
Long-term debt, net of current portion | 85,436 | 0 |
Lease liabilities, net of current portion | 2,276 | 1,370 |
Deferred income tax liabilities | 1,967 | 0 |
Private Warrant liabilities | 4,337 | 0 |
Other liabilities | 2,679 | 0 |
Total non-current liabilities | 96,695 | 1,370 |
Total liabilities | 138,695 | 156,151 |
Commitments and contingencies | ||
Stockholders' equity | ||
Preferred stock, par value $0.0001, 10,000 shares authorized, 0 issued and outstanding, as of September 30, 2021 and December 31, 2020 | 0 | 0 |
Common stock, par value $0.0001, 750,000 shares authorized, 100,674 and 44,461 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 10 | 4 |
Additional paid-in capital | 566,935 | 45,890 |
Accumulated deficit | (98,927) | (21,128) |
Accumulated other comprehensive loss | (2,578) | 0 |
Total stockholders' equity | 465,440 | 24,766 |
Total liabilities and stockholders' equity | $ 604,135 | $ 180,917 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2021 | Jan. 29, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 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 | 750,000,000 |
Common stock, shares issued (in shares) | 100,674,000 | 44,461,000 | 30,800,000 | |
Common stock, shares outstanding (in shares) | 100,674,000 | 44,461,000 | 30,800,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 543,000 | $ 0 | $ 5,980,000 | $ 0 |
Cost of goods sold | 7,482,000 | 0 | 30,001,000 | 0 |
Gross profit (loss) | (6,939,000) | 0 | (24,021,000) | 0 |
Operating expenses: | ||||
Selling, general and administrative expenses | 25,401,000 | 5,742,000 | 84,357,000 | 8,435,000 |
Total operating expenses | 25,401,000 | 5,742,000 | 84,357,000 | 8,435,000 |
Loss from operations | (32,340,000) | (5,742,000) | (108,378,000) | (8,435,000) |
Other income (expense): | ||||
Development fee income from a related party | 0 | 136,000 | 0 | 408,000 |
Interest expense from related parties | 0 | (64,000) | (658,000) | (90,000) |
Interest expense | (805,000) | 0 | (893,000) | 0 |
Change in fair value of Private Warrants | 15,781,000 | 0 | 32,095,000 | 0 |
Other | 113,000 | (13,000) | 574,000 | (13,000) |
Loss before income taxes | (17,251,000) | (5,683,000) | (77,260,000) | (8,130,000) |
Income tax expense | (17,000) | 0 | (539,000) | 0 |
Net loss | (17,268,000) | (5,683,000) | (77,799,000) | (8,130,000) |
Other comprehensive loss: | ||||
Net unrealized losses on derivatives contracts, net of tax | (66,000) | 0 | (2,578,000) | 0 |
Comprehensive loss | $ (17,334,000) | $ (5,683,000) | $ (80,377,000) | $ (8,130,000) |
Net loss per common share: | ||||
Net loss per common share, basic (in dollars per share) | $ (0.17) | $ (0.14) | $ (0.83) | $ (0.23) |
Net loss per common share, diluted (in dollars per share) | $ (0.17) | $ (0.14) | $ (0.83) | $ (0.23) |
Weighted average common shares outstanding: | ||||
Weighted-average common shares outstanding, basic (in shares) | 100,437,000 | 41,558,000 | 93,823,000 | 35,960,000 |
Weighted-average common shares outstanding, diluted (in shares) | 100,437,000 | 41,558,000 | 93,823,000 | 35,960,000 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Previously ReportedSeries A Preferred Stock. | Previously ReportedSeries A-1 Preferred Stock. | Previously ReportedSeries B Preferred Stock. | Previously ReportedSeries C Preferred Stock. | Previously ReportedCommon stock, $0.0001 par value per share | Previously ReportedAdditional Paid-in Capital | Previously ReportedRetained Earnings | Previously ReportedAOCI Attributable to Parent | 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, $0.0001 par value per share | Revision of Prior Period, AdjustmentAdditional Paid-in Capital | Revision of Prior Period, AdjustmentRetained Earnings | Revision of Prior Period, AdjustmentAOCI Attributable to Parent | Revision of Prior Period, Adjustment | Series A Preferred Stock. | Series A-1 Preferred Stock. | Series B Preferred Stock. | Series C Preferred Stock. | Common stock, $0.0001 par value per share | 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) | 0 | 0 | 0 | ||||||||||||||||||
Temporary equity, carrying amount, ending balance at Dec. 31, 2019 | $ 5,203 | $ 992 | $ 6,063 | $ (5,203) | $ (992) | $ (6,063) | $ 0 | $ 0 | $ 0 | ||||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 1 | $ 12 | $ (934) | $ (921) | $ 1 | $ (1) | $ 0 | $ 2 | $ 11 | $ (934) | $ (921) | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Stock option exercise (in shares) | 0 | ||||||||||||||||||||||||||
Stock-based compensation | 140 | 0 | $ 140 | ||||||||||||||||||||||||
Net loss | (2,746) | (2,746) | |||||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 9,677,000 | 21,123,000 | 30,800,000 | ||||||||||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 1 | 497 | (3,680) | (3,182) | $ 2 | 12,256 | $ 12,258 | $ 3 | 12,753 | (3,680) | 9,076 | ||||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Mar. 31, 2020 | 0 | 0 | 0 | ||||||||||||||||||||||||
Temporary equity, carrying amount, ending balance at Mar. 31, 2020 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Issuance of preferred shares, net (in shares) | 2,470,000 | ||||||||||||||||||||||||||
Issuance of preferred shares, net | 4,880 | 4,880 | |||||||||||||||||||||||||
Stock-based compensation | 19 | 19 | |||||||||||||||||||||||||
Net loss | (818) | (818) | |||||||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 33,270,000 | ||||||||||||||||||||||||||
Ending balance at Mar. 31, 2020 | $ 3 | 17,652 | (4,498) | 13,157 | |||||||||||||||||||||||
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) | 0 | 0 | 0 | ||||||||||||||||||
Temporary equity, carrying amount, beginning balance at Dec. 31, 2019 | $ 5,203 | $ 992 | $ 6,063 | $ (5,203) | $ (992) | $ (6,063) | $ 0 | $ 0 | $ 0 | ||||||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Sep. 30, 2020 | 0 | 0 | 0 | ||||||||||||||||||||||||
Temporary equity, carrying amount, ending balance at Sep. 30, 2020 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 9,677,000 | 21,123,000 | 30,800,000 | ||||||||||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ 1 | 497 | (3,680) | (3,182) | $ 2 | 12,256 | 12,258 | $ 3 | 12,753 | (3,680) | 9,076 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Net loss | (8,130) | ||||||||||||||||||||||||||
Other comprehensive loss | 0 | ||||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 44,451,000 | ||||||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | $ 4 | 45,841 | (11,810) | 34,035 | |||||||||||||||||||||||
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) | 0 | 0 | 0 | ||||||||||||||||||
Temporary equity, carrying amount, beginning balance at Dec. 31, 2019 | $ 5,203 | $ 992 | $ 6,063 | $ (5,203) | $ (992) | $ (6,063) | $ 0 | $ 0 | $ 0 | ||||||||||||||||||
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) | 0 | 0 | 0 | 0 | |||||||||||||||
Temporary equity, carrying amount, ending balance at Dec. 31, 2020 | $ 5,203 | $ 992 | $ 10,942 | $ 28,069 | $ (5,203) | $ (992) | $ (10,942) | $ (28,069) | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 9,677,000 | 21,123,000 | 30,800,000 | ||||||||||||||||||||||||
Beginning balance at Dec. 31, 2019 | $ 1 | 497 | (3,680) | (3,182) | $ 2 | 12,256 | 12,258 | $ 3 | 12,753 | (3,680) | $ 9,076 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Stock option exercise (in shares) | 158,000 | 159,000 | |||||||||||||||||||||||||
Stock options exercised | 35 | 0 | $ 35 | ||||||||||||||||||||||||
Stock-based compensation | 154 | 0 | 154 | ||||||||||||||||||||||||
Net loss | (17,448) | (17,448) | |||||||||||||||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 9,750,000 | 34,711,000 | 44,461,000 | ||||||||||||||||||||||||
Ending balance at Dec. 31, 2020 | $ 1 | 686 | (21,128) | $ 0 | (20,441) | $ 3 | 45,204 | 0 | $ 0 | 45,207 | $ 4 | 45,890 | (21,128) | $ 0 | 24,766 | ||||||||||||
Temporary equity, shares outstanding, beginning balance (in shares) at Mar. 31, 2020 | 0 | 0 | 0 | ||||||||||||||||||||||||
Temporary equity, carrying amount, beginning balance at Mar. 31, 2020 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Jun. 30, 2020 | 0 | 0 | 0 | ||||||||||||||||||||||||
Temporary equity, carrying amount, ending balance at Jun. 30, 2020 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 33,270,000 | ||||||||||||||||||||||||||
Beginning balance at Mar. 31, 2020 | $ 3 | 17,652 | (4,498) | 13,157 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Stock option exercise (in shares) | 148,000 | ||||||||||||||||||||||||||
Stock options exercised | 32 | 32 | |||||||||||||||||||||||||
Stock-based compensation | 40 | 40 | |||||||||||||||||||||||||
Net loss | (1,629) | (1,629) | |||||||||||||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 33,418,000 | ||||||||||||||||||||||||||
Ending balance at Jun. 30, 2020 | $ 3 | 17,724 | (6,127) | 11,600 | |||||||||||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Sep. 30, 2020 | 0 | 0 | 0 | ||||||||||||||||||||||||
Temporary equity, carrying amount, ending balance at Sep. 30, 2020 | $ 0 | $ 0 | $ 0 | ||||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Issuance of preferred shares, net (in shares) | 11,033,000 | ||||||||||||||||||||||||||
Issuance of preferred shares, net | $ 1 | 28,068 | 28,069 | ||||||||||||||||||||||||
Stock-based compensation | 49 | 49 | |||||||||||||||||||||||||
Net loss | (5,683) | (5,683) | |||||||||||||||||||||||||
Other comprehensive loss | 0 | ||||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 44,451,000 | ||||||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | $ 4 | 45,841 | (11,810) | 34,035 | |||||||||||||||||||||||
Temporary equity, shares outstanding, beginning 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) | 0 | 0 | 0 | 0 | |||||||||||||||
Temporary equity, carrying amount, beginning balance at Dec. 31, 2020 | $ 5,203 | $ 992 | $ 10,942 | $ 28,069 | $ (5,203) | $ (992) | $ (10,942) | $ (28,069) | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Mar. 31, 2021 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Temporary equity, carrying amount, ending balance at Mar. 31, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 9,750,000 | 34,711,000 | 44,461,000 | ||||||||||||||||||||||||
Beginning balance at Dec. 31, 2020 | $ 1 | 686 | (21,128) | 0 | (20,441) | $ 3 | 45,204 | 0 | 0 | 45,207 | $ 4 | 45,890 | (21,128) | 0 | 24,766 | ||||||||||||
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 | 433,521 | 433,527 | ||||||||||||||||||||||||
Conversion of Private Warrants | 5,819 | 5,819 | |||||||||||||||||||||||||
Stock option exercise (in shares) | 103,000 | ||||||||||||||||||||||||||
Stock options exercised | 35 | 35 | |||||||||||||||||||||||||
Stock-based compensation | 6,287 | 6,287 | |||||||||||||||||||||||||
Net loss | (28,515) | (28,515) | |||||||||||||||||||||||||
Other comprehensive loss | (669) | (669) | |||||||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 97,925,000 | ||||||||||||||||||||||||||
Ending balance at Mar. 31, 2021 | $ 10 | 491,552 | (49,643) | (669) | 441,250 | ||||||||||||||||||||||
Temporary equity, shares outstanding, beginning 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) | 0 | 0 | 0 | 0 | |||||||||||||||
Temporary equity, carrying amount, beginning balance at Dec. 31, 2020 | $ 5,203 | $ 992 | $ 10,942 | $ 28,069 | $ (5,203) | $ (992) | $ (10,942) | $ (28,069) | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Temporary equity, carrying amount, ending balance at Sep. 30, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 9,750,000 | 34,711,000 | 44,461,000 | ||||||||||||||||||||||||
Beginning balance at Dec. 31, 2020 | $ 1 | $ 686 | $ (21,128) | $ 0 | $ (20,441) | $ 3 | $ 45,204 | $ 0 | $ 0 | $ 45,207 | $ 4 | 45,890 | (21,128) | 0 | 24,766 | ||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Net loss | (77,799) | ||||||||||||||||||||||||||
Other comprehensive loss | (2,578) | (2,578) | |||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 100,674,000 | ||||||||||||||||||||||||||
Ending balance at Sep. 30, 2021 | $ 10 | 566,935 | (98,927) | (2,578) | 465,440 | ||||||||||||||||||||||
Temporary equity, shares outstanding, beginning balance (in shares) at Mar. 31, 2021 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Temporary equity, carrying amount, beginning balance at Mar. 31, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Jun. 30, 2021 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Temporary equity, carrying amount, ending balance at Jun. 30, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 97,925,000 | ||||||||||||||||||||||||||
Beginning balance at Mar. 31, 2021 | $ 10 | 491,552 | (49,643) | (669) | 441,250 | ||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Conversion of Private Warrants | 3,114 | 3,114 | |||||||||||||||||||||||||
Issuance of common stock for acquisition (in shares) | 2,329,000 | ||||||||||||||||||||||||||
Issuance of common stock for acquisition | 48,991 | 48,991 | |||||||||||||||||||||||||
Issuance of stock options for acquisition | 361 | 361 | |||||||||||||||||||||||||
Conversion of restricted stock units (in shares) | 21,000 | ||||||||||||||||||||||||||
Conversion of restricted stock units | (108) | (108) | |||||||||||||||||||||||||
Stock-based compensation | 13,390 | 13,390 | |||||||||||||||||||||||||
Net loss | (32,016) | (32,016) | |||||||||||||||||||||||||
Other comprehensive loss | (1,843) | (1,843) | |||||||||||||||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 100,275,000 | ||||||||||||||||||||||||||
Ending balance at Jun. 30, 2021 | $ 10 | 557,300 | (81,659) | (2,512) | 473,139 | ||||||||||||||||||||||
Temporary equity, shares outstanding, ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||
Temporary equity, carrying amount, ending balance at Sep. 30, 2021 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||||||||
Conversion of Private Warrants | 201 | 201 | |||||||||||||||||||||||||
Conversion of restricted stock units (in shares) | 391,000 | ||||||||||||||||||||||||||
Conversion of restricted stock units | (2,233) | (2,233) | |||||||||||||||||||||||||
Exercise of warrants (in shares) | 8,000 | ||||||||||||||||||||||||||
Exercise of warrants | 96 | 96 | |||||||||||||||||||||||||
Stock-based compensation | 11,571 | 11,571 | |||||||||||||||||||||||||
Net loss | (17,268) | (17,268) | |||||||||||||||||||||||||
Other comprehensive loss | (66) | (66) | |||||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 100,674,000 | ||||||||||||||||||||||||||
Ending balance at Sep. 30, 2021 | $ 10 | $ 566,935 | $ (98,927) | $ (2,578) | $ 465,440 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Operating Activities | ||
Net loss | $ (77,799,000) | $ (8,130,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of Private Warrants | (32,095,000) | 0 |
Deferred income tax provision | 539,000 | 0 |
Depreciation and amortization | 7,791,000 | 66,000 |
Stock-based compensation expense | 31,248,000 | 108,000 |
Rent payments in excess of rent expense | (72,000) | 0 |
Interest accrual with a related party | 0 | 50,000 |
Amortization of development fee with a related party | 0 | (405,000) |
Changes in operating assets and liabilities, net of acquisitions | ||
Accounts receivable | 259,000 | 0 |
Inventories, net | (800,000) | (277,000) |
Prepaid expenses and other current assets | (2,752,000) | (292,000) |
Other assets, net | (10,486,000) | (2,000) |
Accounts payable | 811,000 | 1,347,000 |
Accrued expenses | 1,575,000 | 1,282,000 |
Other current liabilities | (178,000) | (4,000) |
Other non-current liabilities | 617,000 | 0 |
Net cash used in operating activities | (81,342,000) | (6,257,000) |
Investing Activities | ||
Purchases of property and equipment | (112,903,000) | (11,149,000) |
Purchases of property and equipment from a related party | (122,911,000) | 0 |
Cost of acquisition, net of cash acquired | (9,756,000) | 0 |
Investment in unconsolidated entity | (5,000,000) | 0 |
Advances on equipment | 0 | (15,000) |
Net cash used in investing activities | (250,570,000) | (11,164,000) |
Financing Activities | ||
Proceeds from debt to a related party | 0 | 32,000,000 |
Proceeds from Business Combination and PIPE shares, net | 448,500,000 | 0 |
Proceeds from debt | 95,709,000 | 0 |
Debt issuance costs | (1,046,000) | 0 |
Payments on financing obligation to a related party | (2,088,000) | 0 |
Proceeds from stock options exercised | 35,000 | 32,000 |
Proceeds from exercise of warrants | 95,000 | 0 |
Payments of withholding taxes on restricted stock unit conversions | (2,341,000) | 0 |
Issuance of preferred stock, net | 0 | 32,949,000 |
Other financing activities | (37,000) | 0 |
Net cash provided by financing activities | 538,827,000 | 64,981,000 |
Change in cash and cash equivalents | 206,915,000 | 47,560,000 |
Cash and Cash Equivalents (including Restricted Cash) | ||
Beginning of period | 21,909,000 | 6,031,000 |
End of period | 228,824,000 | 53,591,000 |
Non-cash Activities: | ||
Fixed assets purchases in accounts payable | 14,170,000 | 0 |
Fixed assets purchases in accrued liabilities | 8,331,000 | 0 |
Operating lease right-of-use assets and liabilities | $ 1,055,000 | $ 376,000 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business AppHarvest was founded on January 19, 2018 and, together with its subsidiaries, is an applied technology company in Appalachia developing and operating some of the world’s largest high-tech indoor farms, designed to grow non-GMO, chemical pesticide-free produce, using primarily rainwater while producing significantly higher yields than those of traditional agriculture on the same amount of land. AppHarvest combines conventional agricultural techniques with cutting-edge technology including artificial intelligence and robotics to improve access to nutritious food, farming more sustainably, building a domestic food supply, and increasing investment in Appalachia. Prior to October 2020, AppHarvest’s operations were limited to organizing and staffing, business planning, raising capital, and acquiring and developing properties for Controlled Environment Agriculture (“CEA”). In October 2020, AppHarvest partially opened its first CEA facility in Morehead, Kentucky (the “Morehead CEA facility”). AppHarvest harvested its first crop of beefsteak tomatoes at the Morehead CEA facility in January 2021, began harvesting its first crop of tomatoes on the vine in March 2021 and opened production of the full 60 acres at the Morehead CEA facility in May 2021. The Morehead CEA facility concluded its first harvest in August 2021 and completed planting of its second crop in September 2021 in preparation for the second growing season. The harvest of the new crop will commence in the fourth quarter of 2021. AppHarvest has started construction on four more CEA facilities. Two of the facilities under construction are in Berea, Kentucky (the “Berea leafy green facility”) and Richmond, Kentucky (the “Richmond tomato facility”) — the Berea leafy green facility is approximately 60% complete, and the Richmond tomato facility is approximately 60% complete. Both CEA facilities are expected to be fully operational by the end of 2022. Groundbreakings for two more CEA facilities occurred in June 2021 in Somerset, Kentucky (the “Somerset facility”) and Morehead, Kentucky (the “Morehead leafy green facility”). The Somerset facility is expected to grow berries and the Morehead leafy green facility, which is adjacent to the Morehead CEA facility, will grow leafy greens. The Somerset facility is over 40% complete and expected to be operational by the end of 2022. The Company temporarily has paused development of the 10-acre Morehead leafy green facility, with construction now expected to resume in 2022 for a 2023 delivery. 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. However, 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 (“SEC”) 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 ending December 31, 2021. A description of the Company’s significant accounting policies is included in the Legacy AppHarvest’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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
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 valuation of inventory, stock-based compensation, and private warrants. 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 COVID-19 pandemic. 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, Cash Equivalents, and Restricted Cash 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. Restricted cash represents collateral for a promissory note with JPMorgan Chase Bank, N.A. (the “JPM Note”) which requires 105% of the aggregate borrowings to be held as collateral. See Note 11 - Debt 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, Accounting for Redeemable Equity Instruments, 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 During the three and nine months ended September 30, 2020, Legacy AppHarvest issued shares of Legacy AppHarvest Series B and Series C redeemable convertible preferred stock to new and existing investors for net proceeds of $28,069, and $32,949, respectively. Warrants At September 30, 2021, there were 13,242 warrants to purchase Common Stock outstanding, consisting of 10,907 public warrants (“Public Warrants”) and 2,335 private warrants (“Private Warrants” and together with Public Warrants, “Warrants”). The Private Warrants are 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 were not 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. Changes in fair value of the Private Warrants are 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. Note 5 Fair Value Measurements Derivative Financial Instruments Derivative financial instruments are used to manage foreign currency, exchange, and interest rate 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 hedging instrument. 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 net loss 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 loss immediately. Business Combinations The Company allocates the purchase price of its acquisitions to the assets acquired and liabilities assumed based upon their respective fair values at the acquisition date. The Company utilizes management estimates and an independent third-party valuation firm to assist in determining these fair values. The excess of the acquisition price over the estimated fair value of the net assets acquired is recorded as goodwill. Goodwill is adjusted for any changes to acquisition date fair value amounts made within the measurement period. Acquisition-related transaction costs are recognized separately from the business combination and expensed as incurred. Capitalization of Interest The Company capitalizes interest on capital projects in accordance with ASC 835-20, Capitalization of Interest 30, 2021, $114 of interest expense has been capitalized. No interest was capitalized during the three and nine months ended September 30, 2020. See Note 11 Debt Debt Issuance Costs Debt issuance costs are amortized into interest expense over the terms of the related loan agreements using the effective interest method or other methods which approximate the effective interest method. Debt issuance costs related to debt instruments other than lines of credit are presented on the consolidated balance sheets as a direct deduction from the carrying amount of that debt liability. Debt issuance costs associated with lines of credit are presented on the consolidated balance sheets as other current or non-current assets. Goodwill and Other Acquired Intangible Assets Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible assets are stated at their historical cost and amortized on a straight-line basis over their expected useful lives. Through the acquisition of Root AI, Inc. (“Root AI”) on April 7, 2021 (“Root AI Acquisition”) the Company has acquired goodwill as well as certain technology and intellectual property for which the Company has determined the useful life to be ten Note 3 Business Combinations The Company conducts annual impairment tests of goodwill on the first day of the fourth quarter and additional impairment reviews when events and circumstances indicate it is more likely than not that an impairment may have occurred. The Company assesses goodwill for impairment at the consolidated level, which represents its single reporting unit. If the fair value of the reporting unit is less than its carrying amount, the Company would record an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the amount of goodwill allocated to the reporting unit. The Company reviews intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the intangible assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows. There was no impairment during the nine months ended September 30, 2021. New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Income Taxes 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 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 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’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 The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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. At December 31, 2020 and 2019, 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 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 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 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 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 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 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 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 The AppHarvest 401(k) Plan provides for matching contributions. The Company incurred $105 and $11 of expenses associated with the 401(k) Plan for the years ended December 31, 2020 and 2019, respectively. 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 SEC Staff Accounting Bulletin No. 107, Share-Based Payment 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 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 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 and restricted stock units 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 Advertising costs are expensed when incurred. Advertising expense for the years ended December 31, 2020 and 2019 was $142 and $40, respectively, and is included in selling, general, and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. 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 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 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 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 $1,127 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 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, $2,214 of start-up expenses related to pre-commencement commercial activities at the CEA 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 Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2021 | |
Reverse Recapitalization, Business Combination And Asset Acquisition [Abstract] | |
Business Combinations | 3. Business Combinations Reverse Recapitalization As discussed in Note 1 Description of Business 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 10 - 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 The following table reconciles the elements of the Business Combination to the unaudited condensed consolidated statements of stockholders’ equity and cash flows for the nine months ended September 30, 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 on closing date $ 435,239 (a) Including transaction costs in the amount of $2,887 allocated to the Private Warrants . Root AI On April 7, 2021, the Company completed the Root AI Acquisition. Total consideration, net of cash acquired, is as follows: Common Stock issued (2,329 shares at approximately $21.00 per share) $ 48,991 Stock options issued to replace unvested Root AI stock options 361 Total equity 49,352 Cash consideration paid for the settlement of vested Root AI stock options 230 Cash consideration paid to Root AI shareholders 9,512 Cash consideration paid to reimburse Root AI for seller transaction costs incurred 150 Cash acquired (136) Net cash $ 9,756 Net consideration paid $ 59,108 The Company accounted for Root AI using the acquisition method of accounting in accordance with U.S. GAAP whereby the total purchase price was preliminarily allocated to tangible and intangible assets acquired and liabilities assumed based on respective fair values. The preliminary purchase price allocation for Root AI is as follows: Goodwill $ 50,863 Intangibles 9,754 Deferred taxes (1,420) Net operating assets and liabilities (89) Net assets acquired $ 59,108 As of September 30, 2021, the purchase price allocation for the acquisition was preliminary and subject to completion. Adjustments to the current fair value estimates in the above table may occur as the process conducted for various valuations and assessments is finalized, including intangible assets, tax assets, liabilities and other attributes. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the Root AI Acquisition. The Root AI Acquisition is expected to provide the Company with a baseline for harvesting support while helping evaluate crop health, predict yield, and optimize overall operations in existing CEA facilities. The benefits include fully developed technology, in the form of software and hardware, that can be programmed for utilization and optimization and a skilled workforce to assist with ongoing upgrades of the artificial intelligence. None of the goodwill is expected to be deductible for income tax purposes and was entirely allocated to the Company’s sole consolidated reporting unit. The preliminary fair value of the technology asset was determined using the income approach through a discounted cash flow analysis. The determination of the useful life was based upon consideration of market participant assumptions and transaction specific factors. Transaction costs of $0 and $1,032 were included in selling, general and administrative expense (“SG&A”) within the unaudited condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2021, respectively. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 4. Revenue Recognition The Company recognized revenues of $543 and $5,980 for the three and nine months ended September 30, 2021, respectively and generated no revenues in the comparable prior year periods. 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 agreed to be the sole and exclusive marketer and distributor of all tomatoes, cucumbers, peppers, berries and leafy greens produced at the Morehead CEA facility 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 (“USDA”) 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. With respect to the Company’s CEA facility in Morehead Kentucky, the Company has a limited, one-time right to terminate the Mastronardi Morehead Agreement if certain conditions are satisfied. 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 | 9 Months Ended |
Sep. 30, 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 September 30, 2021 Balance Sheet Account Level 1 Level 2 Level 3 Total Assets: Foreign currency contracts Other assets, net $ — $ 46 $ — $ 46 Total assets $ — $ 46 $ — $ 46 Liabilities: Foreign currency contracts Other current liabilities $ — $ 645 $ — $ 645 Interest rate swap Other liabilities — 2,073 — 2,073 Private Warrants Private Warrant liabilities — 4,337 — 4,337 Total liabilities $ — $ 7,055 $ — $ 7,055 The Company’s derivative contracts, including foreign currency forward and option contracts and an interest rate swap, are measured at fair value 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 13 Derivative Financial Instruments Note 11 Debt 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 September 30, 2021 Exercise price $ 11.50 $ 11.50 Stock price $ 24.95 $ 6.52 Volatility 25.0 % 54.6 % Remaining term in years 5.00 4.33 Risk-free rate 0.45 % 0.94 % Dividend yield — — The following table summarizes the private warrant activity for the three and nine months ended September 30, 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 Fair value of Private Warrants converted to Public Warrants (3,113) Change in fair value of Private Warrants (6,488) Fair value of Private Warrants outstanding as of June 30, 2021 $ 20,319 Fair value of Private Warrants converted to Public Warrants (201) Change in fair value of Private Warrants (15,781) Fair value of Private Warrants outstanding as of September 30, 2021 $ 4,337 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 are also measured at fair value on a non-recurring basis during the measurement period allowed by the ASC guidance for business combinations, when applicable, see Note 3 Business Combinations. 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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 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. September 30, 2021 December 31, 2020 Raw materials $ 1,255 $ 781 Growing crops 2,932 2,606 Finished goods — — Total inventories, net $ 4,187 $ 3,387 | 4. Inventories, net Inventories, net consisted of the following at December 31, 2020: Finished goods $ — Raw materials 781 Growing crops 2,606 Total inventories, net $ 3,387 |
Property and Equipment
Property and Equipment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | 7. Property and Equipment September 30, 2021 December 31, 2020 Land $ 30,526 $ 7,277 Buildings 77,949 57,362 Machinery and equipment 49,153 9,581 Construction in progress 133,666 78,174 Leasehold improvements 3,577 871 Less: accumulated depreciation (6,261) (620) Total property and equipment, net $ 288,610 $ 152,645 Depreciation expense was $2,752 and $6,887 for the three and nine months ended September 30, 2021, respectively, compared to $51 and $66 for the three and nine months ended September 30, 2020, respectively. In March 2021 the Company acquired the Morehead CEA facility and related property from Equilibrium Controlled Environment Foods Fund, LLC and its affiliates (“Equilibrium”), a related party (See Note 12(a) Commitments and Contingencies - Equilibrium Transaction | 5. Property and Equipment, net Property and equipment at cost and accumulated depreciation are as follows: December 31, 2020 Original Accumulated Assets cost depreciation net Land $ 3,678 $ — $ 3,678 Land with a related party – see Note 8(a) 3,599 — 3,599 Buildings 57,362 (436) 56,926 Construction in progress 23,526 — 23,526 Construction in progress with a related party – see Note 8(a) 54,649 — 54,649 Automobiles 152 (15) 137 Leasehold improvements 871 (18) 854 Equipment 1,803 (68) 1,735 Machinery 7,625 (84) 7,542 $ 153,266 $ (620) $ 152,645 December 31, 2019 Original Accumulated Assets cost depreciation net Land with a related party – see Note 8(a) $ 3,599 $ — $ 3,599 Equipment 25 (7) 18 Machinery 96 (12) 84 $ 3,720 $ (19) $ 3,701 Depreciation expense for property and equipment for the year ended December 31, 2020 and 2019 was $176 and $16, respectively. Building cost includes $56,748 related to right-to-use assets held under a finance lease with a related party (see Note 8(a)). |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | 8. Other Assets September 30, 2021 December 31, 2020 Utility deposits $ 5,571 $ — Investment in unconsolidated entity 5,000 — Prepayments for fixed assets 2,567 — Collateral for hedging program 2,480 — Prepaid transaction costs for business combination — 1,127 Other assets 1,106 61 Total other assets $ 16,724 $ 1,188 |
Accrued Expenses
Accrued Expenses | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | ||
Accrued Expenses | 9. Accrued Expenses September 30, 2021 December 31, 2020 Payroll and related $ 1,576 $ 563 Professional service fees 991 693 Construction costs 8,331 2,574 Other accrued liabilities 1,044 352 Incentive compensation 2,510 — Utilities 64 384 Interest on convertible debt with a related party — 618 Total accrued expenses $ 14,516 $ 5,184 | 3. Accrued Expenses Accrued expenses consist of the following as of December 31: 2020 2019 Accrued construction costs $ 2,574 $ — Accrued professional service fees 693 35 Accrued interest on convertible debt with a related party 618 — Accrued payroll 563 2 Accrued utilities 384 — Other accrued liabilities 352 12 Total accrued expenses $ 5,184 $ 49 |
Notes Payable with a Related Pa
Notes Payable with a Related Party | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
Note Payable with a Related Party | 10. 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. | 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 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 and bears simple interest at 8.0% per annum. The outstanding principal amount of the Convertible Note and any unpaid accrued interest automatically converted into shares of the Company at a conversion price equal to $9.50 per share upon closing of the 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. The fair value of these embedded derivatives was not significant at issuance or at December 31, 2020. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | 11. Debt On June 15, 2021, the Company entered into a master credit agreement with Rabo AgriFinance LLC (the “Lender”) for a real estate term loan in the original principal amount of $75,000 (the “Rabo Loan”). The Rabo Loan matures on April 1, 2031, with quarterly interest payments commencing on July 1, 2021 and quarterly principal payments, commencing on January 1, 2022, with the remaining balance of principal and interest due upon maturity. Payments are based on one month LIBOR plus 2.500% per annum. The Rabo Loan is collateralized by the business assets of the first Morehead CEA facility and requires compliance with financial covenants. As of September 30, 2021, the Company was in compliance with all covenants. On June 21, 2021, the Company entered into an interest rate swap with an affiliate of the Lender to make a series of payments based on a fixed rate of 1.602% and receive a series of payments based on LIBOR. Both the fixed and floating payment streams are based on the initial notional amount of $75,000 and require quarterly payments under a twenty-year amortization schedule. As of September 30, 2021, the net fixed interest rate on the combined Rabo Loan and related interest rate swap is 4.102%. The Rabo Loan is recorded at cost, net of debt issuance costs of $656. During the three and nine months ended September 30, 2021, $887 and $889 of interest expense, respectively, was recognized on the Rabo Loan. The fair value of the Rabo Loan is estimated using Level 2 inputs based on observable inputs, including quoted market prices. On July 23, 2021, the Company entered into a credit agreement with CEFF II AppHarvest Holdings, LLC, an affiliate of Equilibrium, for a construction loan with a principal amount of $91,000 (the “Construction Loan”) for the development of a CEA facility in Richmond, Kentucky (the “Project”). The Construction Loan provides monthly disbursements to fund capital costs of the Project in excess of the Company’s required equity contribution of 34.5% of the capital costs of the Project. The Construction Loan requires monthly interest payments based on drawn capital costs at an initial interest rate of 8.000% per annum, which will increase on a monthly basis by 0.2% per annum, beginning two years after closing of the Construction Loan through maturity, which is expected to be July 23, 2024, with no required principal payments until maturity. As of September 30, 2021, the Company had $13,832 outstanding on the Construction Loan, included in non-current liabilities at September 30, 2021, and had incurred interest expense of $114, which was all capitalized as part of the construction asset and included in property, plant and equipment in the Company’s unaudited condensed consolidated balance sheet. The Company incurred $389 of debt issuance costs related to the Construction Loan, which are included in current and non-current assets on the balance sheet. On September 27, 2021, the Company entered into the JPM Note with JPMorgan Chase Bank, N.A., (the “Bank”) providing for a line of credit facility in the maximum amount of $25,000 (the “JPM Loan”) for capital expenditures and CEA facility construction and improvements. The JPM Loan matures on September 24, 2022. The interest rate on the JPM Loan approximates one-month LIBOR plus 2.25%. As of September 30, 2021, the Company has borrowed $6,877 under the JPM Loan and the interest rate was 2.375%. The JPM Loan requires 105% of the aggregate borrowings to be held as cash collateral. At September 30, 2021 the Company had $7,250 of restricted cash on the unaudited condensed consolidated balance sheet to meet this requirement. A summary of the carrying value of the debt is as follows: September 30, 2021 Rabo Loan $ 75,000 Construction Loan 13,832 JPM Loan 6,877 Unamortized debt issuance costs (640) Debt, net of issuance costs 95,069 Less current portion (9,633) Long term, net $ 85,436 The fair value of the Rabo Loan is estimated using Level 2 inputs based on observable inputs, including quoted market prices. As of September 30, 2021, the carrying value of debt under the Rabo Loan approximates fair value due to such borrowings bearing variable interest rates that correspond to current market rates. As the Construction Loan and JPM Loan are effectively lines of credit, their carrying values approximate fair value. |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 12. Commitments and Contingencies (a) Equilibrium Transactions 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 CEA Facility. At closing, Morehead Farm LLC, which owns the Morehead CEA facility, became a wholly owned subsidiary of the Company. Concurrently with the closing of the MIPSA, the Master Lease Agreement dated May 13, 2019 with Morehead Farm LLC to lease the Morehead CEA facility and ancillary agreements related thereto, was 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 CEA facility were settled and de-recognized from the Company’s condensed consolidated balance sheet. On May 12, 2020, the Company entered into a loan agreement with Equilibrium, a related party, at that time, to finance the purchase of equipment to be used in the Company’s operations in Morehead, Kentucky. The loan agreement had an original principal balance of $2,000 and an interest rate of 9.5% per year. Upon establishment of the finance lease liability for the Morehead CEA facility lease in October, 2020, 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 liability, which was settled and de-recognized as described above. The original proceeds from the loan are included in the financing section of the statement of cash flows as of September 30, 2020. (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 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 three and nine months ended September 30, 2021, the Company recognized $109 and $324, respectively, of operating lease expense in SG&A within the unaudited condensed consolidated statement of operations and comprehensive loss compared to $75 and $108 for the comparable prior year periods. 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 $ 175 2022 715 2023 647 2024 529 2025 448 2026 and thereafter 849 Total minimum payments required 3,363 Less: imputed interest costs (1) (550) Present value of net minimum lease payments (2) $ 2,813 Weighted-average imputed interest rate 6.33 % Weighted-average remaining lease term 5.3 (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 unaudited condensed consolidated balance sheet as of September 30, 2021 as current and non-current lease liability of $537 and $2,276, respectively. Period Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 378 $ 54 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,055 $ 376 (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 During the three and nine months ended September 30, 2021, the Company entered into an agreement with its natural gas supplier to purchase a portion of its anticipated future natural gas usage at fixed prices. The unrecorded purchase commitments as of September 30, 2021, were $364, within the next twelve months. There were no purchase commitments that were unrecorded at December 31, 2020. (e) Litigation The Company is involved in various lawsuits, claims and other legal matters from time to time that arise in the ordinary course of business. The Company records a liability when a particular contingency is probable and estimable. In September 2021, a putative securities class action complaint (captioned Ragan v. AppHarvest, Inc. current officers as defendants, and alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, by making materially false and misleading statements regarding the Company’s business, operations, and prospects because they failed to disclose a purported lack of sufficient training, and inability to consistently produce USDA Grade No. 1 tomatoes. The complaint seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. On November 22, 2021, a related action ( Plymouth County Retirement Association v. AppHarvest, Inc., | 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 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. At December 31, 2020, the Company maintains a finance lease liability with Equilibrium of $59,216 related to the completed portion of the Morehead Facility and a related right-of-use asset at cost of $56,748. At December 31, 2020, the Company also has construction-in-progress assets of $54,649, and a corresponding financing obligation of $58,795 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. 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, 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. (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 $169 and $70, 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 $ 59,447 2022 281 — 2023 270 — 2024 277 — 2025 265 — 2026 and thereafter 550 — Total minimum payments required 1,901 59,447 Less: imputed interest costs (1) (364) (230) Present value of net minimum lease payments (2) $ 1,537 $ 59,216 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 , current lease liability with other parties of $166, and noncurrent lease liability of $1,370 . 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 $ 38 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,441 $ 161 (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 | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | 13. Derivative Financial Instruments During the nine months ended September 30, 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 September 30, 2021, the total notional amount outstanding of foreign currency contracts designated as cash flow hedging instruments was €28,509. The Company maintains collateral of $2,480 for the hedge program which is included in other non-current assets and margin call deposits of $950 which are included in prepaid expenses and other current assets in the unaudited condensed consolidated balance sheet at September 30, 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 CEA 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 and nine months ended September 30, 2021, the Company recognized amortization expense of $149 and $405, respectively, related to its foreign currency hedge contracts within its unaudited condensed consolidated statement of operations and comprehensive loss. As of September 30, 2021, the Company had a net liability of $599 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. On June 21, 2021, the Company entered into an interest rate swap which has been designated as an effective cash flow hedge and changes in the fair value are recorded as a component of AOCL in the condensed consolidated balance sheet and reclassified into earnings as interest expense over the life of the debt. See Note 11 Debt The following table summarizes the before and after tax amounts for the various components of other comprehensive loss for the periods presented: Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Tax (Expense) Tax (Expense) Before Tax Benefit After Tax Before Tax Benefit After Tax Foreign Currency $ (414) $ — $ (414) $ (504) $ — $ (504) Interest Rate Swap 348 — 348 (2,074) — (2,074) Total AOCL $ (66) $ — $ (66) $ (2,578) $ — $ (2,578) The income tax benefit of $754 related to the $2,578 balance in AOCL at September 30, 2021 is fully offset by a valuation allowance established on the related deferred income tax asset. The Company will release the AOCL amounts, net of any tax impact, from the foreign currency contracts, and the interest rate swap in the periods that the underlying transactions impact earnings as described above. |
Stock Compensation and Other Be
Stock Compensation and Other Benefit Plans | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation and Other Benefit Plans | 14. 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 (the “Board”) 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 and nine months ended September 30, 2021, 359 and 6,589 awards were granted under the Plan, including 6,541 restricted stock units (“RSU’s”) and 48 stock options granted as consideration in the Root AI Acquisition (see Note 3 Business Combinations 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 $2,447 and $11,719 during the three and nine months ended September 30, 2021, respectively. As of September 30, 2021, the Company had 1,673 granted but unvested 2018 RSU’s with unrecognized stock-based compensation expense of $8,781 remaining. Stock-based compensation is measured based on the grant date fair value of the Plan awards and subsequently recognized as expense ratably over their vesting periods. Stock-based compensation for awards with service or performance-based vesting requirements is adjusted to reflect actual vested awards, with forfeitures recorded as a reduction of expense at the time they occur. Stock-based compensation for unvested market-based awards is not reduced by forfeitures as the grant date fair value of such awards includes consideration that vesting of the awards may not occur. Total stock-based compensation expense was $11,571 and $31,248 for the three and nine months ended September 30, 2021, respectively, compared to $49 and $108 for the three and nine months ended September 30, 2020, respectively. Of these amounts, $11,211 and $29,583 were included in SG&A and $360 and $1,665 in COGS for the three and nine months ended September 30, 2021, respectively and $49 and $108 was recognized in SG&A and none in COGS for the three and nine months ended September 30, 2020, respectively. 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 the end of the offering period) 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 and nine month periods ending September 30, 2021, there were no shares purchased under the ESPP. The ESPP grants participating employees the right to acquire Company Common Stock in increments of 1% to 15% of eligible pay, with a maximum contribution of $25 of eligible pay, subject to applicable annual Internal Revenue Service (“IRS”), limitations. The first offering period of the Company’s ESPP commenced on June 1, 2021 and is six months in duration. The Company uses a Black-Scholes option pricing model to value the Common Stock purchased as part of the Company’s ESPP. The fair value estimated by the option pricing model are affected by the price of the Common Stock as well as subjective variables that include assumed interest rates, our expected dividend yield, and our expected share price volatility over the term of the award. The Company records stock-based compensation expense, within SG&A or COGS related to the discount given to our participating employees. Total stock-based compensation expense recorded for the ESPP during the three and nine month periods ending September 30, 2021 was $61. |
Income Taxes
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 15. Income Taxes The Company’s effective income tax rate was 0.1% and 0.7% for the three and nine months ended September 30, 2021, respectively, and 0% for the three and nine months ended September 30, 2020. The variance from the U.S. federal statutory rate of 21% for the three and nine months ended September 30, 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 and nine months ended September 30, 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 $ 9 State 1 Total deferred income taxes 9 Total income tax expense $ 9 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 $ (17,439) $ (2,746) Income tax benefit at U.S. Federal statutory rate (3,662) (577) Permanent items 211 95 Change in valuation allowance 4,122 572 State income taxes, net of U.S. Federal income tax benefit (662) (91) Income tax expense $ 9 $ — 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 $ 4,857 $ 812 Lease liabilities 15,680 40 Financing obligation 15,582 962 Other 20 4 36,137 1,818 Valuation allowance (4,922) (800) 31,216 1,018 Deferred tax liabilities: Property and equipment $ (30,879) $ (983) Operating lease right-of-use assets (349) (39) (31,228) (1,021) Net deferred tax liabilities $ (13) $ (4) 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 $4,122 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 $19,478 of federal net operating loss carryforwards that have no expiration. The Company has $19,398 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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net Loss Per Common Share | 16. 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: September 30, September 30, Anti-dilutive common share equivalents 2021 2020 Stock options 2,824 3,026 Restricted stock units 7,669 1,301 Warrants 13,242 — Total anti-dilutive common share equivalents 23,735 4,327 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net loss $ (17,268) $ (5,683) $ (77,799) $ (8,130) Denominator: Weighted-average common shares outstanding, basic and diluted 100,437 41,558 93,823 35,960 Net loss per common share, basic and diluted $ (0.17) $ (0.14) $ (0.83) $ (0.23) | 12. 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, 2020 2019 Anti-dilutive common share equivalents: Stock options 2,978 2,159 Restricted stock units 2,545 — Total anti-dilutive common share equivalents 5,523 2,159 Basic and diluted net loss per common share is calculated as follows: Year Ended December 31, 2020 2019 Numerator: Net loss $ (17,448) $ (2,746) Denominator: Weighted-average common outstanding 38,072 25,571 Net loss per common and $ (0.46) $ (0.11) |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | 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 (“SEC”) regulations. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. | |
Consolidation | 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. | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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. At December 31, 2020 and 2019, 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. |
Reclassification | 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. | |
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 valuation of inventory, stock-based compensation, and private warrants. 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 COVID-19 pandemic. 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. | 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 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’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 | 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. | 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 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. |
Restricted Cash | Restricted cash represents collateral for a promissory note with JPMorgan Chase Bank, N.A. (the “JPM Note”) which requires 105% of the aggregate borrowings to be held as collateral. | |
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, Accounting for Redeemable Equity Instruments, 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 During the three and nine months ended September 30, 2020, Legacy AppHarvest issued shares of Legacy AppHarvest Series B and Series C redeemable convertible preferred stock to new and existing investors for net proceeds of $28,069, and $32,949, respectively. | |
Warrants | 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 were not 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. Changes in fair value of the Private Warrants are 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. Note 5 Fair Value Measurements | |
Derivative Financial Instruments | Derivative financial instruments are used to manage foreign currency, exchange, and interest rate 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 hedging instrument. 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 net loss 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 loss immediately. | |
Business Combinations | The Company allocates the purchase price of its acquisitions to the assets acquired and liabilities assumed based upon their respective fair values at the acquisition date. The Company utilizes management estimates and an independent third-party valuation firm to assist in determining these fair values. The excess of the acquisition price over the estimated fair value of the net assets acquired is recorded as goodwill. Goodwill is adjusted for any changes to acquisition date fair value amounts made within the measurement period. Acquisition-related transaction costs are recognized separately from the business combination and expensed as incurred. | |
Capitalization of Interest | The Company capitalizes interest on capital projects in accordance with ASC 835-20, Capitalization of Interest | |
Debt Issuance Costs | Debt issuance costs are amortized into interest expense over the terms of the related loan agreements using the effective interest method or other methods which approximate the effective interest method. Debt issuance costs related to debt instruments other than lines of credit are presented on the consolidated balance sheets as a direct deduction from the carrying amount of that debt liability. Debt issuance costs associated with lines of credit are presented on the consolidated balance sheets as other current or non-current assets. | |
Goodwill and Other Acquired Intangible Assets | Goodwill and Other Acquired Intangible Assets Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible assets are stated at their historical cost and amortized on a straight-line basis over their expected useful lives. Through the acquisition of Root AI, Inc. (“Root AI”) on April 7, 2021 (“Root AI Acquisition”) the Company has acquired goodwill as well as certain technology and intellectual property for which the Company has determined the useful life to be ten Note 3 Business Combinations The Company conducts annual impairment tests of goodwill on the first day of the fourth quarter and additional impairment reviews when events and circumstances indicate it is more likely than not that an impairment may have occurred. The Company assesses goodwill for impairment at the consolidated level, which represents its single reporting unit. If the fair value of the reporting unit is less than its carrying amount, the Company would record an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the amount of goodwill allocated to the reporting unit. The Company reviews intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the intangible assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows. There was no impairment during the nine months ended September 30, 2021. | |
New Accounting Pronouncements | In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Income Taxes 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 | 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. | 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 Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Reverse Recapitalization, Business Combination And Asset Acquisition [Abstract] | |
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 nine months ended September 30, 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 on closing date $ 435,239 (a) Including transaction costs in the amount of $2,887 allocated to the Private Warrants . |
Schedule of Total Consideration, Net of Cash Acquired | Common Stock issued (2,329 shares at approximately $21.00 per share) $ 48,991 Stock options issued to replace unvested Root AI stock options 361 Total equity 49,352 Cash consideration paid for the settlement of vested Root AI stock options 230 Cash consideration paid to Root AI shareholders 9,512 Cash consideration paid to reimburse Root AI for seller transaction costs incurred 150 Cash acquired (136) Net cash $ 9,756 Net consideration paid $ 59,108 |
Summary of Preliminary Purchase Price Allocation for Root AI | The preliminary purchase price allocation for Root AI is as follows: Goodwill $ 50,863 Intangibles 9,754 Deferred taxes (1,420) Net operating assets and liabilities (89) Net assets acquired $ 59,108 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2021 Balance Sheet Account Level 1 Level 2 Level 3 Total Assets: Foreign currency contracts Other assets, net $ — $ 46 $ — $ 46 Total assets $ — $ 46 $ — $ 46 Liabilities: Foreign currency contracts Other current liabilities $ — $ 645 $ — $ 645 Interest rate swap Other liabilities — 2,073 — 2,073 Private Warrants Private Warrant liabilities — 4,337 — 4,337 Total liabilities $ — $ 7,055 $ — $ 7,055 |
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 September 30, 2021 Exercise price $ 11.50 $ 11.50 Stock price $ 24.95 $ 6.52 Volatility 25.0 % 54.6 % Remaining term in years 5.00 4.33 Risk-free rate 0.45 % 0.94 % Dividend yield — — |
Summary of Private Warrant Activity | The following table summarizes the private warrant activity for the three and nine months ended September 30, 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 Fair value of Private Warrants converted to Public Warrants (3,113) Change in fair value of Private Warrants (6,488) Fair value of Private Warrants outstanding as of June 30, 2021 $ 20,319 Fair value of Private Warrants converted to Public Warrants (201) Change in fair value of Private Warrants (15,781) Fair value of Private Warrants outstanding as of September 30, 2021 $ 4,337 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Schedule of Inventory, Net | September 30, 2021 December 31, 2020 Raw materials $ 1,255 $ 781 Growing crops 2,932 2,606 Finished goods — — Total inventories, net $ 4,187 $ 3,387 | Inventories, net consisted of the following at December 31, 2020: Finished goods $ — Raw materials 781 Growing crops 2,606 Total inventories, net $ 3,387 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Property, Plant and Equipment | September 30, 2021 December 31, 2020 Land $ 30,526 $ 7,277 Buildings 77,949 57,362 Machinery and equipment 49,153 9,581 Construction in progress 133,666 78,174 Leasehold improvements 3,577 871 Less: accumulated depreciation (6,261) (620) Total property and equipment, net $ 288,610 $ 152,645 | Property and equipment at cost and accumulated depreciation are as follows: December 31, 2020 Original Accumulated Assets cost depreciation net Land $ 3,678 $ — $ 3,678 Land with a related party – see Note 8(a) 3,599 — 3,599 Buildings 57,362 (436) 56,926 Construction in progress 23,526 — 23,526 Construction in progress with a related party – see Note 8(a) 54,649 — 54,649 Automobiles 152 (15) 137 Leasehold improvements 871 (18) 854 Equipment 1,803 (68) 1,735 Machinery 7,625 (84) 7,542 $ 153,266 $ (620) $ 152,645 December 31, 2019 Original Accumulated Assets cost depreciation net Land with a related party – see Note 8(a) $ 3,599 $ — $ 3,599 Equipment 25 (7) 18 Machinery 96 (12) 84 $ 3,720 $ (19) $ 3,701 |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | September 30, 2021 December 31, 2020 Utility deposits $ 5,571 $ — Investment in unconsolidated entity 5,000 — Prepayments for fixed assets 2,567 — Collateral for hedging program 2,480 — Prepaid transaction costs for business combination — 1,127 Other assets 1,106 61 Total other assets $ 16,724 $ 1,188 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | ||
Schedule of Accrued Expenses | September 30, 2021 December 31, 2020 Payroll and related $ 1,576 $ 563 Professional service fees 991 693 Construction costs 8,331 2,574 Other accrued liabilities 1,044 352 Incentive compensation 2,510 — Utilities 64 384 Interest on convertible debt with a related party — 618 Total accrued expenses $ 14,516 $ 5,184 | Accrued expenses consist of the following as of December 31: 2020 2019 Accrued construction costs $ 2,574 $ — Accrued professional service fees 693 35 Accrued interest on convertible debt with a related party 618 — Accrued payroll 563 2 Accrued utilities 384 — Other accrued liabilities 352 12 Total accrued expenses $ 5,184 $ 49 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | A summary of the carrying value of the debt is as follows: September 30, 2021 Rabo Loan $ 75,000 Construction Loan 13,832 JPM Loan 6,877 Unamortized debt issuance costs (640) Debt, net of issuance costs 95,069 Less current portion (9,633) Long term, net $ 85,436 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Summary of Operating Lease Liability by Maturity | 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 $ 175 2022 715 2023 647 2024 529 2025 448 2026 and thereafter 849 Total minimum payments required 3,363 Less: imputed interest costs (1) (550) Present value of net minimum lease payments (2) $ 2,813 Weighted-average imputed interest rate 6.33 % Weighted-average remaining lease term 5.3 (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 unaudited condensed consolidated balance sheet as of September 30, 2021 as current and non-current lease liability of $537 and $2,276, respectively. | 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 $ 59,447 2022 281 — 2023 270 — 2024 277 — 2025 265 — 2026 and thereafter 550 — Total minimum payments required 1,901 59,447 Less: imputed interest costs (1) (364) (230) Present value of net minimum lease payments (2) $ 1,537 $ 59,216 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 , current lease liability with other parties of $166, and noncurrent lease liability of $1,370 . |
Summary of Lease Cost | Period Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 378 $ 54 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,055 $ 376 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of Before and After Tax Amounts for the Various Components of Other Comprehensive Loss | The following table summarizes the before and after tax amounts for the various components of other comprehensive loss for the periods presented: Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Tax (Expense) Tax (Expense) Before Tax Benefit After Tax Before Tax Benefit After Tax Foreign Currency $ (414) $ — $ (414) $ (504) $ — $ (504) Interest Rate Swap 348 — 348 (2,074) — (2,074) Total AOCL $ (66) $ — $ (66) $ (2,578) $ — $ (2,578) |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 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: September 30, September 30, Anti-dilutive common share equivalents 2021 2020 Stock options 2,824 3,026 Restricted stock units 7,669 1,301 Warrants 13,242 — Total anti-dilutive common share equivalents 23,735 4,327 | December 31, 2020 2019 Anti-dilutive common share equivalents: Stock options 2,978 2,159 Restricted stock units 2,545 — Total anti-dilutive common share equivalents 5,523 2,159 |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net loss $ (17,268) $ (5,683) $ (77,799) $ (8,130) Denominator: Weighted-average common shares outstanding, basic and diluted 100,437 41,558 93,823 35,960 Net loss per common share, basic and diluted $ (0.17) $ (0.14) $ (0.83) $ (0.23) | Year Ended December 31, 2020 2019 Numerator: Net loss $ (17,448) $ (2,746) Denominator: Weighted-average common outstanding 38,072 25,571 Net loss per common and $ (0.46) $ (0.11) |
Description of Business - Narra
Description of Business - Narrative (Details) | 9 Months Ended | |
Sep. 30, 2021afacility | May 30, 2021a | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Number of facilities under construction | 4 | |
Morehead, Kentucky | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Area of land | a | 10 | 60 |
Berea And Richmond, Kentucky | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Number of facilities under construction | 2 | |
Berea, Kentucky | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Facilities under construction, percentage complete | 60.00% | |
Richmond, Kentucky | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Facilities under construction, percentage complete | 60.00% | |
Somerset, Kentucky | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Number of facilities under construction | 2 | |
Facilities under construction, percentage complete | 40.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)D$ / sharesshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 27, 2021 | Jan. 29, 2021 | Jan. 28, 2021shares | |
Class of Warrant or Right [Line Items] | |||||||||
Exchange ratio | 2.1504 | ||||||||
Issuance of preferred stock, net | $ 0 | $ 32,949,000 | $ 32,949,000 | $ 11,008,000 | |||||
Interest costs capitalized | $ 114,000 | $ 0 | 114,000 | 0 | |||||
Amortization of intangible assets | $ 259,000 | 470,000 | |||||||
Impairment of intangible assets | $ 0 | ||||||||
Series B And Series C Preferred Stock | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Issuance of preferred stock, net | $ 28,069,000 | $ 32,949,000 | |||||||
Root AI. | Intellectual Property And Technology-Based Intangible Assets | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Intangible asset, useful life | 10 years | ||||||||
Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Warrants outstanding (in shares) | shares | 13,242,000 | 13,242,000 | |||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.50 | $ 11.50 | |||||||
Warrants | Common stock, $0.0001 par value per share | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Number of shares called by each warrant (in shares) | shares | 1 | 1 | |||||||
Public Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Warrants outstanding (in shares) | shares | 10,907,000 | 10,907,000 | 10,000,000 | ||||||
Redemption price (in dollars per share) | $ / shares | $ 0.01 | $ 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) | shares | 2,335,000 | 2,335,000 | 3,250,000 | ||||||
Line of Credit | Revolving Credit Facility | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Collateral percentage | 105.00% | 105.00% | 105.00% |
Business Combinations - Narrati
Business Combinations - Narrative (Details) $ / shares in Units, shares in Thousands | Jan. 29, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / 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 | |||||
Common stock, shares authorized (in shares) | 750,000 | 750,000 | 750,000 | 750,000 | 750,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 | 10,000 | 10,000 | 10,000 | |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Number of shares issued (PIPE shares) | 37,500 | |||||
Share price (in dollars per share) | $ / shares | $ 10 | |||||
Aggregate purchase price in private placement | $ | $ 375,000,000 | |||||
Increase in cash and cash equivalents as a result of the Business combination | $ | 435,239,000 | $ 435,239,000 | ||||
Gross proceeds from the PIPE | $ | $ 375,000,000 | 375,000,000 | ||||
Root AI | ||||||
Reverse Recapitalization [Line Items] | ||||||
Goodwill expected tax deductible amount | $ | $ 0 | 0 | ||||
Root AI | SG&A | ||||||
Reverse Recapitalization [Line Items] | ||||||
Transaction cost | $ | $ 0 | $ 1,032,000 | ||||
Common stock, $0.0001 par value per share | Convertible Debt | ||||||
Reverse Recapitalization [Line Items] | ||||||
Shares issued upon conversion (in shares) | 3,242 | |||||
Public Warrants | ||||||
Reverse Recapitalization [Line Items] | ||||||
Warrants outstanding (in shares) | 10,907 | 10,907 | 10,000 | |||
Private Warrants | ||||||
Reverse Recapitalization [Line Items] | ||||||
Warrants outstanding (in shares) | 2,335 | 2,335 | 3,250 |
Business Combinations - Reconci
Business Combinations - Reconciliation of the Business Combination (Details) - USD ($) $ in Thousands | Jan. 29, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Schedule of Reverse Recapitalization [Line Items] | |||
Cash - Novus trust and cash, net of redemptions | $ 99,896 | ||
Cash - PIPE financing | $ 375,000 | 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 | $ 0 | |
Less: transaction costs included in net cash used in operating activities | (13,261) | ||
Total net increase in cash and cash equivalents on closing date | $ 435,239 | 435,239 | |
Private Warrants | |||
Schedule of Reverse Recapitalization [Line Items] | |||
Transaction costs recognized as operating expense | $ 2,887 |
Business Combinations - Total C
Business Combinations - Total Consideration, Net of Cash Acquired (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Apr. 07, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Cost of acquisition, net of cash acquired | $ 9,756 | $ 0 | |
Root AI | |||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||
Common Stock issued (2,329 shares at approximately $21.00 per share) | $ 48,991 | ||
Stock options issued to replace unvested Root AI stock options | 361 | ||
Total equity | 49,352 | ||
Cash consideration paid for the settlement of vested Root AI stock options | 230 | ||
Cash consideration paid to Root AI shareholders | 9,512 | ||
Cash consideration paid to reimburse Root AI for seller transaction costs incurred | 150 | ||
Cash acquired | (136) | ||
Cost of acquisition, net of cash acquired | 9,756 | ||
Net consideration paid | $ 59,108 | ||
Shares issued to acquire business (in shares) | 2,329 | ||
Business acquisition, share price (in dollars per share) | $ 21 |
Business Combinations - Prelimi
Business Combinations - Preliminary Purchase Price Allocation for Root AI (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Apr. 07, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 50,863 | $ 0 | |
Root AI | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 50,863 | ||
Intangibles | 9,754 | ||
Deferred taxes | (1,420) | ||
Net operating assets and liabilities | (89) | ||
Net assets acquired | $ 59,108 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | Mar. 28, 2019 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Revenue from Contract with Customer [Abstract] | |||||
Net sales | $ 543 | $ 0 | $ 5,980 | $ 0 | |
Term of contract | 10 years |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jan. 29, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Liabilities: | ||||||
Private Warrants | $ 4,337,000 | $ 20,319,000 | $ 29,920,000 | $ 45,565,000 | ||
Fair Value, Recurring | ||||||
Assets: | ||||||
Total assets | 46,000 | $ 0 | $ 0 | |||
Liabilities: | ||||||
Private Warrants | 4,337,000 | |||||
Total liabilities | 7,055,000 | $ 0 | $ 0 | |||
Fair Value, Recurring | Foreign Currency Contract | ||||||
Assets: | ||||||
Foreign currency contracts | 46,000 | |||||
Liabilities: | ||||||
Derivative liability | 645,000 | |||||
Fair Value, Recurring | Interest Rate Swap | ||||||
Liabilities: | ||||||
Derivative liability | 2,073,000 | |||||
Level 1 | Fair Value, Recurring | ||||||
Assets: | ||||||
Total assets | 0 | |||||
Liabilities: | ||||||
Private Warrants | 0 | |||||
Total liabilities | 0 | |||||
Level 1 | Fair Value, Recurring | Foreign Currency Contract | ||||||
Assets: | ||||||
Foreign currency contracts | 0 | |||||
Liabilities: | ||||||
Derivative liability | 0 | |||||
Level 1 | Fair Value, Recurring | Interest Rate Swap | ||||||
Liabilities: | ||||||
Derivative liability | 0 | |||||
Level 2 | Fair Value, Recurring | ||||||
Assets: | ||||||
Total assets | 46,000 | |||||
Liabilities: | ||||||
Private Warrants | 4,337,000 | |||||
Total liabilities | 7,055,000 | |||||
Level 2 | Fair Value, Recurring | Foreign Currency Contract | ||||||
Assets: | ||||||
Foreign currency contracts | 46,000 | |||||
Liabilities: | ||||||
Derivative liability | 645,000 | |||||
Level 2 | Fair Value, Recurring | Interest Rate Swap | ||||||
Liabilities: | ||||||
Derivative liability | 2,073,000 | |||||
Level 3 | Fair Value, Recurring | ||||||
Assets: | ||||||
Total assets | 0 | |||||
Liabilities: | ||||||
Private Warrants | 0 | |||||
Total liabilities | 0 | |||||
Level 3 | Fair Value, Recurring | Foreign Currency Contract | ||||||
Assets: | ||||||
Foreign currency contracts | 0 | |||||
Liabilities: | ||||||
Derivative liability | 0 | |||||
Level 3 | Fair Value, Recurring | Interest Rate Swap | ||||||
Liabilities: | ||||||
Derivative liability | $ 0 |
Fair Value Measurements - Signi
Fair Value Measurements - Significant Inputs to the Private Warrant Valuation (Details) | Sep. 30, 2021Y$ / shares | Jan. 29, 2021$ / sharesY |
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 | 6.52 | 24.95 |
Volatility | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0.546 | 0.250 |
Remaining term in years | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | Y | 4.33 | 5 |
Risk-free rate | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0.0094 | 0.0045 |
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 | 9 Months Ended | ||||
Mar. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jan. 29, 2021 | |
Increase (Decrease) In Fair Value Of Warrants [Roll Forward] | |||||||
Fair value of Private Warrants, beginning | $ 45,565 | $ 20,319 | $ 29,920 | ||||
Fair value of Private Warrants converted to Public Warrants | (201) | (3,113) | $ (201) | $ (5,819) | |||
Change in fair value of Private Warrants | (9,826) | (15,781) | (6,488) | $ 0 | (32,095) | $ 0 | |
Fair value of Private Warrants, ending | $ 29,920 | $ 4,337 | $ 20,319 | $ 4,337 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,255 | $ 781 |
Growing crops | 2,932 | 2,606 |
Finished goods | 0 | 0 |
Total inventories, net | $ 4,187 | $ 3,387 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (6,261) | $ (620) |
Total property and equipment, net | 288,610 | 152,645 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,526 | 7,277 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 77,949 | 57,362 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 49,153 | 9,581 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 133,666 | 78,174 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,577 | $ 871 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Thousands | Mar. 01, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||||||||
Depreciation | $ 2,752 | $ 51 | $ 6,887 | $ 66 | $ 176 | $ 16 | ||
Purchase price of Morehead CEA facility | $ 125,000 | $ 125,000 | ||||||
Buildings | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Right-to-use assets under finance lease related to Morehead CEA facility | $ 56,748 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Utility deposits | $ 5,571 | $ 0 | |
Investment in unconsolidated entity | 5,000 | 0 | |
Prepayments for fixed assets | 2,567 | 0 | |
Collateral for hedging program | 2,480 | 0 | |
Prepaid transaction costs for business combination | 0 | 1,127 | |
Other assets | 1,106 | 61 | |
Total other assets | $ 16,724 | $ 1,188 | $ 41 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | |||
Payroll and related | $ 1,576 | $ 563 | |
Professional service fees | 991 | 693 | $ 35 |
Construction costs | 8,331 | 2,574 | |
Other accrued liabilities | 1,044 | 352 | 12 |
Incentive compensation | 2,510 | 0 | |
Utilities | 64 | 384 | |
Interest on convertible debt with a related party | 0 | 618 | |
Accrued expenses | $ 14,516 | $ 5,184 | $ 49 |
Notes Payable with a Related _2
Notes Payable with a Related Party (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Jan. 29, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 28, 2020 | May 12, 2020 |
Debt Instrument [Line Items] | |||||
Interest on convertible debt with a related party | $ 0 | $ 618 | |||
Inclusive Capital Partners Spring Master Fund, L.P. | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 2,000 | ||||
Interest rate | 9.50% | ||||
Convertible Debt | |||||
Debt Instrument [Line Items] | |||||
Principal amount | 30,000 | ||||
Interest on convertible debt with a related party | $ 618 | ||||
Convertible Debt | Inclusive Capital Partners Spring Master Fund, L.P. | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 30,000 | ||||
Interest rate | 8.00% | ||||
Conversion price (in dollars per share) | $ 9.50 | ||||
Convertible Debt | Common stock, $0.0001 par value per share | |||||
Debt Instrument [Line Items] | |||||
Shares issued upon conversion (in shares) | 3,242 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Sep. 27, 2021 | Jul. 23, 2021 | Jun. 21, 2021 | Jun. 15, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||||||
Net of debt issuance costs | $ 640,000 | $ 640,000 | |||||||
Interest costs capitalized | 114,000 | $ 0 | 114,000 | $ 0 | |||||
Restricted cash | $ 7,250,000 | $ 7,250,000 | $ 0 | ||||||
Interest Rate Swap | |||||||||
Debt Instrument [Line Items] | |||||||||
Derivative, fixed interest rate | 1.602% | ||||||||
Notional amount | $ 75,000,000 | ||||||||
Derivative, term of contract | 20 years | ||||||||
Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 2.375% | 2.375% | |||||||
Long-term debt, gross | $ 6,877,000 | $ 6,877,000 | |||||||
Maximum borrowing capacity | $ 25,000,000 | ||||||||
Borrowing amount | $ 6,877,000 | $ 6,877,000 | |||||||
Collateral percentage | 105.00% | 105.00% | 105.00% | ||||||
LIBOR | Line of Credit | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.25% | ||||||||
RABO LOAN | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount | $ 75,000,000 | ||||||||
Net of debt issuance costs | $ 656,000 | $ 656,000 | |||||||
Interest expense | 887,000 | 889,000 | |||||||
Long-term debt, gross | $ 75,000,000 | $ 75,000,000 | |||||||
RABO LOAN | Secured Debt | Interest Rate Swap | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate | 4.102% | 4.102% | |||||||
RABO LOAN | LIBOR | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.50% | ||||||||
Construction Loan | Construction Loans | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount | $ 91,000,000 | ||||||||
Net of debt issuance costs | $ 389,000 | $ 389,000 | |||||||
Capital costs in excess of equity stake percentage | 34.50% | ||||||||
Interest rate | 8.00% | ||||||||
Increased monthly percentage | 0.20% | ||||||||
Debt instrument, period of first required interest payment | 2 years | ||||||||
Long-term debt, gross | $ 13,832,000 | 13,832,000 | |||||||
Interest costs capitalized | $ 114,000 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (640) | |
Debt, net of issuance costs | 95,069 | |
Less current portion | (9,633) | $ 0 |
Long term, net | 85,436 | $ 0 |
Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 6,877 | |
RABO LOAN | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 75,000 | |
Unamortized debt issuance costs | (656) | |
Construction Loan | Construction Loans | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 13,832 | |
Unamortized debt issuance costs | $ (389) |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands | Mar. 01, 2021 | Mar. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | May 12, 2020 |
Long-term Purchase Commitment [Line Items] | |||||||
Interests acquired | 100.00% | ||||||
Purchase price of Morehead CEA facility | $ 125,000 | $ 125,000 | |||||
Financing obligation related to construction in progress assets | 66,504 | ||||||
Finance lease liability | $ 58,496 | ||||||
Operating lease expense | $ 109 | $ 75 | $ 324 | $ 108 | |||
Purchase obligation for next twelve months | $ 364 | $ 364 | |||||
Inclusive Capital Partners Spring Master Fund, L.P. | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Principal amount | $ 2,000 | ||||||
Interest rate | 9.50% |
Commitment and Contingencies _2
Commitment and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Remainder of 2021 | $ 175 | |||
2022 | 715 | $ 258 | ||
2023 | 647 | 281 | ||
2024 | 529 | 270 | ||
2025 | 448 | 277 | ||
2026 and thereafter | 849 | |||
Total minimum payments required | 3,363 | 1,901 | ||
Less: imputed interest costs | (550) | (364) | ||
Present value of net minimum lease payments | $ 2,813 | $ 1,537 | ||
Weighted-average imputed interest rate | 6.33% | 6.29% | ||
Weighted-average remaining lease term | 5 years 3 months 18 days | 6 years 10 months 24 days | ||
Current portion of lease liabilities | $ 537 | $ 166 | $ 45 | |
Lease liabilities, net of current portion | 2,276 | 1,370 | 104 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 378 | $ 54 | 96 | 38 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 1,055 | $ 376 | $ 1,441 | $ 161 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) € in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021EUR (€) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Amortization expense related to foreign currency hedge contracts | $ 149 | $ 405 | |
Deferred tax asset, other comprehensive loss | 754 | 754 | |
AOCI Attributable to Parent | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Balance in AOCL | 2,578 | ||
Foreign Currency Contract | Cash Flow Hedging | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional amount | € | € 28,509 | ||
Collateral for hedging program | 2,480 | 2,480 | |
Margin call deposits | 950 | 950 | |
Net derivative liability | $ 599 | $ 599 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Summary of Before and After Tax Amounts for the Various Components of Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Other comprehensive loss | $ (66) | $ (1,843) | $ (669) | $ 0 | $ (2,578) | $ 0 |
AOCI Attributable to Parent | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Before Tax | (66) | (2,578) | ||||
Tax (Expense) Benefit | 0 | 0 | ||||
Other comprehensive loss | (66) | $ (1,843) | $ (669) | (2,578) | ||
Foreign Currency Contract | Cash Flow Hedges | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Before Tax | (414) | (504) | ||||
Tax (Expense) Benefit | 0 | 0 | ||||
Other comprehensive loss | (414) | (504) | ||||
Interest Rate Swap | Cash Flow Hedges | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Before Tax | 348 | (2,074) | ||||
Tax (Expense) Benefit | 0 | 0 | ||||
Other comprehensive loss | $ 348 | $ (2,074) |
Stock Compensation and Other _2
Stock Compensation and Other Benefit Plans (Details) - USD ($) | Jun. 29, 2021 | Jan. 29, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 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) | 33,868,000 | 21,339,000 | ||||||
Number of shares granted during period (in shares) | 3,002,000 | |||||||
Options granted in period (in shares) | 48,000 | 1,014,000 | ||||||
Stock-based compensation | $ 11,571,000 | $ 49,000 | $ 31,248,000 | $ 108,000 | ||||
Number of shares granted (in shares) | 2,545,000 | 0 | ||||||
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 | 2,005,000 | ||||||
Stock-based compensation | $ 61,000 | $ 61,000 | ||||||
Purchase price of common stock, percent | 85.00% | |||||||
Shares purchased (in shares) | 0 | 0 | ||||||
Employee subscription rate, minimum | 1.00% | 1.00% | ||||||
Employee subscription rate, maximum | 15.00% | 15.00% | ||||||
Maximum employee contribution amount | $ 25,000 | |||||||
Offering period | 6 months | |||||||
The 2021 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock reserved for issuance (in shares) | 10,027,000 | 10,027,000 | ||||||
Shares granted (in shares) | 359,000 | 6,589,000 | ||||||
The 2021 Plan | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares granted during period (in shares) | 6,541,000 | |||||||
The 2021 Plan | Restricted Stock Units | Executive Officer | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of shares granted during period (in shares) | 2,937 | |||||||
The 2018 Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock reserved for issuance (in shares) | 5,371,000 | 5,371,000 | ||||||
Stock-based compensation | $ 2,616,000 | |||||||
The 2018 Plan | Restricted Stock Units | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ 2,447,000 | $ 11,719,000 | ||||||
Number of shares granted (in shares) | 1,673,000 | 1,673,000 | ||||||
Unrecognized stock-based compensation expense | $ 8,781,000 | $ 8,781,000 | ||||||
SG&A | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | 11,211,000 | 49,000 | 29,583,000 | 108,000 | ||||
COGS | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation | $ 360,000 | $ 0 | $ 1,665,000 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 0.10% | 0.00% | 0.70% | 0.00% | |
Income tax expense | $ 17,000 | $ 0 | $ 539,000 | $ 0 | $ 9,000 |
Net Loss Per Common Share - Ant
Net Loss Per Common Share - Anti-dilutive Common Share Equivalents (Details) - shares shares in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common share equivalents (in shares) | 23,735 | 4,327 | 5,523 | 2,159 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common share equivalents (in shares) | 2,824 | 3,026 | 2,978 | 2,159 |
Restricted Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common share equivalents (in shares) | 7,669 | 1,301 | ||
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive common share equivalents (in shares) | 13,242 | 0 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||||||||||
Net loss | $ (17,268) | $ (32,016) | $ (28,515) | $ (5,683) | $ (1,629) | $ (818) | $ (77,799) | $ (8,130) | $ (17,448) | $ (2,746) |
Denominator: | ||||||||||
Weighted-average common shares outstanding, basic (in shares) | 100,437,000 | 41,558,000 | 93,823,000 | 35,960,000 | 38,072,000 | 25,571,000 | ||||
Weighted-average common shares outstanding, diluted (in shares) | 100,437,000 | 41,558,000 | 93,823,000 | 35,960,000 | 38,072 | 25,571 | ||||
Net loss per common share, basic (in dollars per share) | $ (0.17) | $ (0.14) | $ (0.83) | $ (0.23) | $ (0.46) | $ (0.11) | ||||
Net loss per common share, diluted (in dollars per share) | $ (0.17) | $ (0.14) | $ (0.83) | $ (0.23) | $ (0.46) | $ (0.11) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 21,909 | $ 6,031 |
Inventories, net | 3,387 | |
Prepaid expenses | 481 | 26 |
Total current assets | 25,777 | 6,057 |
Operating lease right-of-use assets, net | 1,307 | 144 |
Property and equipment, net | 152,645 | 3,701 |
Lease deposits with a related party | 4,000 | |
Other assets | 1,188 | 41 |
Total non-current assets | 155,140 | 7,886 |
Total assets | 180,917 | 13,943 |
Current Liabilities: | ||
Accounts payable | 1,342 | 167 |
Accrued expenses | 5,184 | 49 |
Current portion of lease liabilities with a related party | 59,217 | |
Current portion of lease liabilities | 166 | 45 |
Current portion of financing obligations with a related party | 58,795 | |
Deferred development fee income from a related party | 406 | |
Note payable with a related party | 30,000 | |
Total current liabilities | 154,781 | 667 |
Other current liabilities | 77 | |
Lease liabilities, net of current portion | 1,370 | 104 |
Financing obligation with a related party | 4,096 | |
Total non-current liabilities | 1,370 | 4,200 |
Total liabilities | 156,151 | 4,867 |
Commitments and contingencies | ||
Stockholders' Equity Attributable to Parent [Abstract] | ||
Preferred stock, par value $0.0001, 10,000 shares authorized, 0 issued and outstanding as of December 31, 2020 and December 31, 2019, respectively | 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 | 4 | 3 |
Additional paid in capital | 45,890 | 12,753 |
Accumulated deficit | (21,128) | (3,680) |
Total stockholders' equity | 24,766 | 9,076 |
Total liabilities and stockholders' equity | $ 180,917 | $ 13,943 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Jan. 29, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 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 | 750,000,000 |
Common stock, shares issued | 100,674,000 | 44,461,000 | 30,800,000 | |
Common Stock Shares Outstanding | 100,674,000 | 44,461,000 | 30,800,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||||||||||
Revenue | $ 543,000 | $ 0 | $ 5,980,000 | $ 0 | ||||||
Operating Expenses [Abstract] | ||||||||||
Selling, general and administrative expenses | 25,401,000 | 5,742,000 | 84,357,000 | 8,435,000 | $ 16,295,000 | $ 2,717,000 | ||||
Depreciation | 2,752,000 | 51,000 | 6,887,000 | 66,000 | 176,000 | 16,000 | ||||
Total operating expenses | 25,401,000 | 5,742,000 | 84,357,000 | 8,435,000 | 16,471,000 | 2,733,000 | ||||
Loss from operations | (32,340,000) | (5,742,000) | (108,378,000) | (8,435,000) | (16,471,000) | (2,733,000) | ||||
Nonoperating Income (Expense) [Abstract] | ||||||||||
Amortization of development fee with a related party | (406,000) | (350,000) | ||||||||
Loss on SAFE Note revaluation | (345,000) | |||||||||
Interest expense from related parties | 0 | (64,000) | (658,000) | (90,000) | (1,423,000) | (28,000) | ||||
Other | 113,000 | (13,000) | 574,000 | (13,000) | 49,000 | 10,000 | ||||
Loss before income taxes | (17,251,000) | (5,683,000) | (77,260,000) | (8,130,000) | (17,439,000) | (2,746,000) | ||||
Income tax expense | (17,000) | 0 | (539,000) | 0 | (9,000) | |||||
Net loss | $ (17,268,000) | $ (32,016,000) | $ (28,515,000) | $ (5,683,000) | $ (1,629,000) | $ (818,000) | $ (77,799,000) | $ (8,130,000) | $ (17,448,000) | $ (2,746,000) |
Net loss per common share, basic (in dollars per share) | $ (0.17) | $ (0.14) | $ (0.83) | $ (0.23) | $ (0.46) | $ (0.11) | ||||
Net loss per common share, diluted (in dollars per share) | $ (0.17) | $ (0.14) | $ (0.83) | $ (0.23) | $ (0.46) | $ (0.11) | ||||
Weighted-average common shares outstanding, basic (in shares) | 100,437,000 | 41,558,000 | 93,823,000 | 35,960,000 | 38,072,000 | 25,571,000 | ||||
Weighted-average common shares outstanding, diluted (in shares) | 100,437,000 | 41,558,000 | 93,823,000 | 35,960,000 | 38,072 | 25,571 |
Consolidated Statements of Rede
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit - USD ($) $ in Thousands | Common stock, $0.0001 par value per sharePreviously Reported | Common stock, $0.0001 par value per shareRevision of Prior Period, Adjustment | Common stock, $0.0001 par value per share | Additional Paid-in CapitalPreviously Reported | Additional Paid-in CapitalRevision of Prior Period, Adjustment | Additional Paid-in Capital | Retained EarningsPreviously Reported | Retained EarningsRevision of Prior Period, Adjustment | Retained Earnings | Previously Reported | Revision of Prior Period, Adjustment | Total |
Beginning balance at Dec. 31, 2018 | $ 1 | $ 1 | $ 2 | $ 12 | $ (1) | $ 11 | $ (934) | $ 0 | $ (934) | $ (921) | $ (921) | |
Balance at beginning (in shares) at Dec. 31, 2018 | 9,100,000 | 10,469,000 | 19,569,000 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net Loss | (2,746) | (2,746) | ||||||||||
Issuance of preferred shares, net | $ 1 | 11,006 | 0 | 11,007 | ||||||||
Issuance of preferred shares, net (in shares) | 8,575,000 | |||||||||||
SAFE Note conversion | 1,596 | 0 | 1,596 | |||||||||
SAFE Note conversion (in shares) | 2,656,000 | |||||||||||
Stock-based compensation | 140 | 0 | 140 | |||||||||
Ending balance at Dec. 31, 2019 | $ 1 | $ 2 | $ 3 | 497 | 12,256 | 12,753 | (3,680) | (3,680) | (3,182) | $ 12,258 | $ 9,076 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Number of options exercised | 0 | |||||||||||
Balance at ending (in shares) at Dec. 31, 2019 | 30,800,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net Loss | (818) | $ (818) | ||||||||||
Stock-based compensation | 19 | 19 | ||||||||||
Ending balance at Mar. 31, 2020 | $ 3 | 17,652 | (4,498) | 13,157 | ||||||||
Beginning balance at Dec. 31, 2019 | 1 | 2 | $ 3 | 497 | 12,256 | 12,753 | (3,680) | (3,680) | (3,182) | 12,258 | 9,076 | |
Balance at beginning (in shares) at Dec. 31, 2019 | 30,800,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net Loss | (8,130) | |||||||||||
Ending balance at Sep. 30, 2020 | $ 4 | 45,841 | (11,810) | 34,035 | ||||||||
Beginning balance at Dec. 31, 2019 | 1 | 2 | $ 3 | 497 | 12,256 | 12,753 | (3,680) | (3,680) | (3,182) | 12,258 | 9,076 | |
Balance at beginning (in shares) at Dec. 31, 2019 | 30,800,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net Loss | (17,448) | (17,448) | ||||||||||
Issuance of preferred shares, net | $ 1 | 32,948 | 0 | 32,949 | ||||||||
Issuance of preferred shares, net (in shares) | 13,503,000 | |||||||||||
Stock-based compensation | 154 | 0 | 154 | |||||||||
Stock option exercise | 35 | 0 | 35 | |||||||||
Ending balance at Dec. 31, 2020 | 1 | 3 | $ 4 | 686 | 45,204 | $ 45,890 | (21,128) | 0 | $ (21,128) | (20,441) | 45,207 | $ 24,766 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Number of options exercised | 158,000 | 159,000 | ||||||||||
Balance at ending (in shares) at Dec. 31, 2020 | 44,461,000 | 45,890,000 | (21,128,000) | 24,766,000 | ||||||||
Beginning balance at Mar. 31, 2020 | $ 3 | $ 17,652 | $ (4,498) | $ 13,157 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net Loss | (1,629) | (1,629) | ||||||||||
Stock-based compensation | 40 | 40 | ||||||||||
Stock option exercise | 32 | 32 | ||||||||||
Ending balance at Jun. 30, 2020 | $ 3 | 17,724 | (6,127) | 11,600 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Number of options exercised | 148,000 | |||||||||||
Net Loss | (5,683) | (5,683) | ||||||||||
Stock-based compensation | 49 | 49 | ||||||||||
Ending balance at Sep. 30, 2020 | $ 4 | 45,841 | (11,810) | 34,035 | ||||||||
Beginning balance at Dec. 31, 2020 | 1 | 3 | 4 | 686 | 45,204 | 45,890 | (21,128) | 0 | (21,128) | (20,441) | 45,207 | 24,766 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net Loss | (28,515) | (28,515) | ||||||||||
Stock-based compensation | 6,287 | 6,287 | ||||||||||
Stock option exercise | 35 | 35 | ||||||||||
Ending balance at Mar. 31, 2021 | $ 10 | 491,552 | (49,643) | 441,250 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Number of options exercised | 103,000 | |||||||||||
Beginning balance at Dec. 31, 2020 | $ 1 | $ 3 | $ 4 | $ 686 | $ 45,204 | $ 45,890 | $ (21,128) | $ 0 | $ (21,128) | $ (20,441) | $ 45,207 | $ 24,766 |
Balance at beginning (in shares) at Dec. 31, 2020 | 44,461,000 | 45,890,000 | (21,128,000) | 24,766,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net Loss | $ (77,799) | |||||||||||
Ending balance at Sep. 30, 2021 | $ 10 | $ 566,935 | $ (98,927) | 465,440 | ||||||||
Beginning balance at Mar. 31, 2021 | $ 10 | 491,552 | (49,643) | 441,250 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net Loss | (32,016) | (32,016) | ||||||||||
Issuance of restricted stock | (108) | (108) | ||||||||||
Issuance of restricted stock (in shares) | 21,000 | |||||||||||
Stock-based compensation | 13,390 | 13,390 | ||||||||||
Ending balance at Jun. 30, 2021 | $ 10 | 557,300 | (81,659) | 473,139 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net Loss | (17,268) | (17,268) | ||||||||||
Issuance of restricted stock | (2,233) | (2,233) | ||||||||||
Issuance of restricted stock (in shares) | 391,000 | |||||||||||
Stock-based compensation | 11,571 | 11,571 | ||||||||||
Ending balance at Sep. 30, 2021 | $ 10 | $ 566,935 | $ (98,927) | $ 465,440 |
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 | $ (17,448,000) | $ (2,746,000) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | ||
Deferred tax benefit | 9,000 | 0 |
Depreciation | 176,000 | 16,000 |
Stock-based compensation expense | 154,000 | 140,000 |
Loss on SAFE Note revaluation | 345,000 | |
Rent payments (in excess of) less than average rent expense, net | 26,000 | |
Interest accrual on financing with related parties | 1,414,000 | 22,000 |
Amortization of development fee with a related party | (406,000) | (350,000) |
Increase (Decrease) in Operating Capital [Abstract] | ||
Inventory | (2,962,000) | |
Prepaid expenses and other current assets | (347,000) | (22,000) |
Other assets, net | (948,000) | (35,000) |
Accounts payable | 1,175,000 | 346,000 |
Accrued expenses | 1,933,000 | 37,000 |
Deferred income from a related party | 406,000 | |
Other current liabilities | 77,000 | |
Lease deposits with a related party | 4,000,000 | (4,000,000) |
Net cash used in operating activities | (13,147,000) | (5,491,000) |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (35,682,000) | (3,615,000) |
Net cash used in investing activities | (35,682,000) | (3,615,000) |
Cash Flow from Financing Activities: | ||
Payments on finance lease liability with a related party | (258,000) | |
Borrowings on land mortgage loan and related financing with a related party | 3,775,000 | |
Proceeds from promissory note - related party | 32,000,000 | |
Payments on financing obligation to a related party | (19,000) | |
Proceeds from stock option exercises | 35,000 | |
Issuance of Preferred Stock | 32,949,000 | 11,008,000 |
Other financing activities | (1,000) | |
Net cash provided by financing activities | 64,707,000 | 14,782,000 |
Cash and cash equivalents | ||
Beginning of period | 6,031,000 | 355,000 |
End of period | 21,909,000 | 6,031,000 |
Change in cash and cash equivalents | 15,878,000 | 5,676,000 |
Noncash activities | ||
SAFE Conversion | $ 1,596,000 | |
Conversion of equipment loan to a finance lease liability with a related party | 2,089,000 | |
Accrued purchases of property and equipment | $ 2,574,000 |
Description of Business_2
Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. Description of Business AppHarvest was founded on January 19, 2018 and, together with its subsidiaries, is an applied technology company in Appalachia developing some of the world’s largest high-tech indoor farms, designed to grow non-GMO, chemical pesticide-free produce, using primarily rainwater while producing significantly higher yields than those of traditional agriculture on the same amount of land. AppHarvest will combine conventional agricultural techniques with cutting-edge technology including artificial intelligence and robotics to improve access to nutritious food, farming more sustainably, building a domestic food supply, and increasing investment in Appalachia. The Company’s operations through December 31, 2020, were limited to organizing and staffing, business planning, raising capital, and acquiring and developing properties for Controlled Environment Agriculture (“CEA”). The Company has not generated any revenues through December 31, 2020. Basis of Presentation and Recapitalization Transaction The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted principles (“U.S. GAAP”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”) and are presented in U.S. Dollars. 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. 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. In connection or concurrent with the Business Combination: ● Each share of Legacy AppHarvest redeemable convertible preferred stock that was issued and outstanding prior to the Business Combination was automatically converted into shares of Legacy AppHarvest common stock, such that each converted share of redeemable convertible preferred stock was no longer outstanding and ceased to exist. ● Novus assumed an outstanding convertible note issued by Legacy AppHarvest (the “Legacy AppHarvest Convertible Note”) after the date of the Business Combination Agreement and before the Merger. At the time of the Merger, the outstanding principal and unpaid accrued interest due on the Legacy AppHarvest Convertible Note were converted into shares of the Company’s common stock in accordance with the terms of the Legacy AppHarvest Convertible Note, and such converted Legacy AppHarvest Convertible Note was no longer outstanding and ceased to exist, and any liens securing obligations under the Legacy AppHarvest Convertible Note were released. ● Each share of Legacy AppHarvest common stock, including the Legacy AppHarvest common stock issued upon conversion of the Legacy AppHarvest redeemable convertible preferred stockholders, was converted into and exchanged for 2.1504 shares (the “Exchange Ratio”) of the Company’s common stock. ● Each option to purchase Legacy AppHarvest common stock that was outstanding, 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, whether vested or unvested, was converted into an award of restricted stock units to acquire a number of shares of the Company 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. ● On the Closing Date, a number of purchasers purchased from the Company an aggregate of 37,500 shares of common stock in a private placement pursuant to separate subscription agreement (the “PIPE investment”), for $10.00 per share and an aggregate purchase price of $375,000 . ● 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. These transactions, together with the Business Combination, are collectively referred to as the “Recapitalization Transaction”. Upon closing of the Business Combination, the Company received gross proceeds of $475,000, including $375,000 in gross proceeds from the fully committed common stock PIPE. The consolidated assets, liabilities and results of operations are those of Legacy AppHarvest for all periods presented. However, the equity structure has been recast for all periods presented to reflect the number of shares of the Company’s common stock, $0.0001 par value per share, issued to Legacy AppHarvest stockholders in connection with the Recapitalization Transaction. As such, the shares and corresponding capital amounts and losses per share related to Legacy AppHarvest redeemable convertible preferred stock and Legacy AppHarvest common stock prior to the Business Combination have been retroactively recast based on shares reflecting the Exchange Ratio established in the Business Combination. Activity within the Statements of Stockholders’ Equity for the issuance of Legacy AppHarvest redeemable convertible preferred stock and SAFE Note conversion also have been retroactively converted to the Company’s common stock. All U.S. 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 Accoun_4
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
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 valuation of inventory, stock-based compensation, and private warrants. 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 COVID-19 pandemic. 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, Cash Equivalents, and Restricted Cash 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. Restricted cash represents collateral for a promissory note with JPMorgan Chase Bank, N.A. (the “JPM Note”) which requires 105% of the aggregate borrowings to be held as collateral. See Note 11 - Debt 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, Accounting for Redeemable Equity Instruments, 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 During the three and nine months ended September 30, 2020, Legacy AppHarvest issued shares of Legacy AppHarvest Series B and Series C redeemable convertible preferred stock to new and existing investors for net proceeds of $28,069, and $32,949, respectively. Warrants At September 30, 2021, there were 13,242 warrants to purchase Common Stock outstanding, consisting of 10,907 public warrants (“Public Warrants”) and 2,335 private warrants (“Private Warrants” and together with Public Warrants, “Warrants”). The Private Warrants are 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 were not 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. Changes in fair value of the Private Warrants are 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. Note 5 Fair Value Measurements Derivative Financial Instruments Derivative financial instruments are used to manage foreign currency, exchange, and interest rate 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 hedging instrument. 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 net loss 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 loss immediately. Business Combinations The Company allocates the purchase price of its acquisitions to the assets acquired and liabilities assumed based upon their respective fair values at the acquisition date. The Company utilizes management estimates and an independent third-party valuation firm to assist in determining these fair values. The excess of the acquisition price over the estimated fair value of the net assets acquired is recorded as goodwill. Goodwill is adjusted for any changes to acquisition date fair value amounts made within the measurement period. Acquisition-related transaction costs are recognized separately from the business combination and expensed as incurred. Capitalization of Interest The Company capitalizes interest on capital projects in accordance with ASC 835-20, Capitalization of Interest 30, 2021, $114 of interest expense has been capitalized. No interest was capitalized during the three and nine months ended September 30, 2020. See Note 11 Debt Debt Issuance Costs Debt issuance costs are amortized into interest expense over the terms of the related loan agreements using the effective interest method or other methods which approximate the effective interest method. Debt issuance costs related to debt instruments other than lines of credit are presented on the consolidated balance sheets as a direct deduction from the carrying amount of that debt liability. Debt issuance costs associated with lines of credit are presented on the consolidated balance sheets as other current or non-current assets. Goodwill and Other Acquired Intangible Assets Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Intangible assets are stated at their historical cost and amortized on a straight-line basis over their expected useful lives. Through the acquisition of Root AI, Inc. (“Root AI”) on April 7, 2021 (“Root AI Acquisition”) the Company has acquired goodwill as well as certain technology and intellectual property for which the Company has determined the useful life to be ten Note 3 Business Combinations The Company conducts annual impairment tests of goodwill on the first day of the fourth quarter and additional impairment reviews when events and circumstances indicate it is more likely than not that an impairment may have occurred. The Company assesses goodwill for impairment at the consolidated level, which represents its single reporting unit. If the fair value of the reporting unit is less than its carrying amount, the Company would record an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the amount of goodwill allocated to the reporting unit. The Company reviews intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the intangible assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows. There was no impairment during the nine months ended September 30, 2021. New Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Income Taxes 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 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 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’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 The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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. At December 31, 2020 and 2019, 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 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 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 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 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 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 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 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 The AppHarvest 401(k) Plan provides for matching contributions. The Company incurred $105 and $11 of expenses associated with the 401(k) Plan for the years ended December 31, 2020 and 2019, respectively. 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 SEC Staff Accounting Bulletin No. 107, Share-Based Payment 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 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 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 and restricted stock units 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 Advertising costs are expensed when incurred. Advertising expense for the years ended December 31, 2020 and 2019 was $142 and $40, respectively, and is included in selling, general, and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. 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 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 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 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 $1,127 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 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, $2,214 of start-up expenses related to pre-commencement commercial activities at the CEA 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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | ||
Accrued Expenses | 9. Accrued Expenses September 30, 2021 December 31, 2020 Payroll and related $ 1,576 $ 563 Professional service fees 991 693 Construction costs 8,331 2,574 Other accrued liabilities 1,044 352 Incentive compensation 2,510 — Utilities 64 384 Interest on convertible debt with a related party — 618 Total accrued expenses $ 14,516 $ 5,184 | 3. Accrued Expenses Accrued expenses consist of the following as of December 31: 2020 2019 Accrued construction costs $ 2,574 $ — Accrued professional service fees 693 35 Accrued interest on convertible debt with a related party 618 — Accrued payroll 563 2 Accrued utilities 384 — Other accrued liabilities 352 12 Total accrued expenses $ 5,184 $ 49 |
Inventories, net
Inventories, net | 9 Months Ended | 12 Months Ended |
Sep. 30, 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. September 30, 2021 December 31, 2020 Raw materials $ 1,255 $ 781 Growing crops 2,932 2,606 Finished goods — — Total inventories, net $ 4,187 $ 3,387 | 4. Inventories, net Inventories, net consisted of the following at December 31, 2020: Finished goods $ — Raw materials 781 Growing crops 2,606 Total inventories, net $ 3,387 |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment, net | 7. Property and Equipment September 30, 2021 December 31, 2020 Land $ 30,526 $ 7,277 Buildings 77,949 57,362 Machinery and equipment 49,153 9,581 Construction in progress 133,666 78,174 Leasehold improvements 3,577 871 Less: accumulated depreciation (6,261) (620) Total property and equipment, net $ 288,610 $ 152,645 Depreciation expense was $2,752 and $6,887 for the three and nine months ended September 30, 2021, respectively, compared to $51 and $66 for the three and nine months ended September 30, 2020, respectively. In March 2021 the Company acquired the Morehead CEA facility and related property from Equilibrium Controlled Environment Foods Fund, LLC and its affiliates (“Equilibrium”), a related party (See Note 12(a) Commitments and Contingencies - Equilibrium Transaction | 5. Property and Equipment, net Property and equipment at cost and accumulated depreciation are as follows: December 31, 2020 Original Accumulated Assets cost depreciation net Land $ 3,678 $ — $ 3,678 Land with a related party – see Note 8(a) 3,599 — 3,599 Buildings 57,362 (436) 56,926 Construction in progress 23,526 — 23,526 Construction in progress with a related party – see Note 8(a) 54,649 — 54,649 Automobiles 152 (15) 137 Leasehold improvements 871 (18) 854 Equipment 1,803 (68) 1,735 Machinery 7,625 (84) 7,542 $ 153,266 $ (620) $ 152,645 December 31, 2019 Original Accumulated Assets cost depreciation net Land with a related party – see Note 8(a) $ 3,599 $ — $ 3,599 Equipment 25 (7) 18 Machinery 96 (12) 84 $ 3,720 $ (19) $ 3,701 Depreciation expense for property and equipment for the year ended December 31, 2020 and 2019 was $176 and $16, respectively. Building cost includes $56,748 related to right-to-use assets held under a finance lease with a related party (see Note 8(a)). |
Income Taxes_2
Income Taxes | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 15. Income Taxes The Company’s effective income tax rate was 0.1% and 0.7% for the three and nine months ended September 30, 2021, respectively, and 0% for the three and nine months ended September 30, 2020. The variance from the U.S. federal statutory rate of 21% for the three and nine months ended September 30, 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 and nine months ended September 30, 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 $ 9 State 1 Total deferred income taxes 9 Total income tax expense $ 9 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 $ (17,439) $ (2,746) Income tax benefit at U.S. Federal statutory rate (3,662) (577) Permanent items 211 95 Change in valuation allowance 4,122 572 State income taxes, net of U.S. Federal income tax benefit (662) (91) Income tax expense $ 9 $ — 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 $ 4,857 $ 812 Lease liabilities 15,680 40 Financing obligation 15,582 962 Other 20 4 36,137 1,818 Valuation allowance (4,922) (800) 31,216 1,018 Deferred tax liabilities: Property and equipment $ (30,879) $ (983) Operating lease right-of-use assets (349) (39) (31,228) (1,021) Net deferred tax liabilities $ (13) $ (4) 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 $4,122 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 $19,478 of federal net operating loss carryforwards that have no expiration. The Company has $19,398 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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | ||
RELATED PARTY TRANSACTIONS | 10. 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. | 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 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 and bears simple interest at 8.0% per annum. The outstanding principal amount of the Convertible Note and any unpaid accrued interest automatically converted into shares of the Company at a conversion price equal to $9.50 per share upon closing of the 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. The fair value of these embedded derivatives was not significant at issuance or at December 31, 2020. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
COMMITMENTS | 12. Commitments and Contingencies (a) Equilibrium Transactions 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 CEA Facility. At closing, Morehead Farm LLC, which owns the Morehead CEA facility, became a wholly owned subsidiary of the Company. Concurrently with the closing of the MIPSA, the Master Lease Agreement dated May 13, 2019 with Morehead Farm LLC to lease the Morehead CEA facility and ancillary agreements related thereto, was 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 CEA facility were settled and de-recognized from the Company’s condensed consolidated balance sheet. On May 12, 2020, the Company entered into a loan agreement with Equilibrium, a related party, at that time, to finance the purchase of equipment to be used in the Company’s operations in Morehead, Kentucky. The loan agreement had an original principal balance of $2,000 and an interest rate of 9.5% per year. Upon establishment of the finance lease liability for the Morehead CEA facility lease in October, 2020, 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 liability, which was settled and de-recognized as described above. The original proceeds from the loan are included in the financing section of the statement of cash flows as of September 30, 2020. (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 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 three and nine months ended September 30, 2021, the Company recognized $109 and $324, respectively, of operating lease expense in SG&A within the unaudited condensed consolidated statement of operations and comprehensive loss compared to $75 and $108 for the comparable prior year periods. 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 $ 175 2022 715 2023 647 2024 529 2025 448 2026 and thereafter 849 Total minimum payments required 3,363 Less: imputed interest costs (1) (550) Present value of net minimum lease payments (2) $ 2,813 Weighted-average imputed interest rate 6.33 % Weighted-average remaining lease term 5.3 (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 unaudited condensed consolidated balance sheet as of September 30, 2021 as current and non-current lease liability of $537 and $2,276, respectively. Period Ended September 30, 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 378 $ 54 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,055 $ 376 (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 During the three and nine months ended September 30, 2021, the Company entered into an agreement with its natural gas supplier to purchase a portion of its anticipated future natural gas usage at fixed prices. The unrecorded purchase commitments as of September 30, 2021, were $364, within the next twelve months. There were no purchase commitments that were unrecorded at December 31, 2020. (e) Litigation The Company is involved in various lawsuits, claims and other legal matters from time to time that arise in the ordinary course of business. The Company records a liability when a particular contingency is probable and estimable. In September 2021, a putative securities class action complaint (captioned Ragan v. AppHarvest, Inc. current officers as defendants, and alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, by making materially false and misleading statements regarding the Company’s business, operations, and prospects because they failed to disclose a purported lack of sufficient training, and inability to consistently produce USDA Grade No. 1 tomatoes. The complaint seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. On November 22, 2021, a related action ( Plymouth County Retirement Association v. AppHarvest, Inc., | 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 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. At December 31, 2020, the Company maintains a finance lease liability with Equilibrium of $59,216 related to the completed portion of the Morehead Facility and a related right-of-use asset at cost of $56,748. At December 31, 2020, the Company also has construction-in-progress assets of $54,649, and a corresponding financing obligation of $58,795 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. 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, 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. (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 $169 and $70, 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 $ 59,447 2022 281 — 2023 270 — 2024 277 — 2025 265 — 2026 and thereafter 550 — Total minimum payments required 1,901 59,447 Less: imputed interest costs (1) (364) (230) Present value of net minimum lease payments (2) $ 1,537 $ 59,216 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 , current lease liability with other parties of $166, and noncurrent lease liability of $1,370 . 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 $ 38 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,441 $ 161 (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 may grant stock awards to officers, key employees and directors. The Plan initially authorized awards to purchase up to 2,974 shares of common stock. The Plan was amended in December 2019 to allow for an additional 3,166 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 30 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 2,159 $ 0.21 9.39 Granted 1,014 0.56 Exercised (159) 0.23 Forfeited or expired (37) 0.56 Outstanding at December 31, 2020 2,978 $ 0.33 8.71 Expected to vest, December 31, 2020 1,713 0.37 8.84 Exercisable, December 31, 2020 1,265 0.27 8.53 The Company recorded $154 and $101 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 and $200, 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 $39,109 and $16,690 for those awards exercisable. The intrinsic value of options forfeited in the year ended December 31, 2020 was $472. 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 $0.33 and $0.14, respectively. The total intrinsic value of options exercised in the year ended December 31, 2020 was $2,100. 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 3,002 8.90 Vested — — Forfeited (457) 7.91 Unvested at December 31, 2020 2,545 $ 9.07 Expected to vest, December 31, 2020 2,545 $ 9.07 The RSUs contain performance and service vesting conditions. The requisite service period for 2,330 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 215 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 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 215 and the grant date fair value was based upon a common stock value of $0.23. The award was fully vested by December 31, 2019. The number of shares vested was 0 and 179 during the year ended December 31, 2020 and 2019, respectively. Stock-based compensation expense recognized related to this restricted stock award was $ — and $38 in the years ended December 31, 2020 and 2019, respectively. Aggregate stock-based compensation expense of $154 and $140 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 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 redeemable convertible preferred stock in March 2019, the SAFE Notes were converted into shares of preferred stock and common stock in accordance with the terms of the preferred stock investment agreement. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2020 | |
STOCKHOLDERS' EQUITY | |
Common Stock | 11. 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. 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 33,868 and 21,339 shares of common stock for future issuance as of December 31, 2020 and 2019, respectively. |
Net Loss Per Share
Net Loss Per Share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Net Loss Per Share | 16. 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: September 30, September 30, Anti-dilutive common share equivalents 2021 2020 Stock options 2,824 3,026 Restricted stock units 7,669 1,301 Warrants 13,242 — Total anti-dilutive common share equivalents 23,735 4,327 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net loss $ (17,268) $ (5,683) $ (77,799) $ (8,130) Denominator: Weighted-average common shares outstanding, basic and diluted 100,437 41,558 93,823 35,960 Net loss per common share, basic and diluted $ (0.17) $ (0.14) $ (0.83) $ (0.23) | 12. 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, 2020 2019 Anti-dilutive common share equivalents: Stock options 2,978 2,159 Restricted stock units 2,545 — Total anti-dilutive common share equivalents 5,523 2,159 Basic and diluted net loss per common share is calculated as follows: Year Ended December 31, 2020 2019 Numerator: Net loss $ (17,448) $ (2,746) Denominator: Weighted-average common outstanding 38,072 25,571 Net loss per common and $ (0.46) $ (0.11) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events On September 24, 2021, a federal securities class action lawsuit (captioned Ragan v. AppHarvest, Inc ., Case No.21-cv-07985) was filed by a purported stockholder on the Company in the United States District Court for the Southern District of New York on behalf of a proposed class consisting of those who acquired the Company’s securities between May 17, 2021 and August 10, 2021. The complaint names the Company and certain of its current officers as defendants, and alleges that the defendants violated Sections 10(b) and 20(a)of the Securities Exchange Act of 1934, as amended, by making materially false and misleading statements regarding the Company’s business, operations, and prospects because they failed to disclose a purported lack of sufficient training and inability to consistently produce Grade No. 1 tomatoes. The complaint seeks unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including reasonable attorneys’ fees. On November 22, 2021, a related action (captioned Plymouth County Retirement Association v. AppHarvest, Inc. , Case No.21-cv-09676) was filed by another purported stockholder of the Company in the same United States District Court, making substantially similar claims against the same set of defendants, on behalf of a proposed class consisting of those who acquired the Company’s securities between October 9, 2020 and August 10, 2021. We do not believe the claims have merit, intend to defend the case vigorously, and have not recorded a liability related to these lawsuits because, at this time, we are unable to estimate reasonably possible losses or determine whether an unfavorable outcome is probable. |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Use of Estimates | 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 valuation of inventory, stock-based compensation, and private warrants. 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 COVID-19 pandemic. 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. | 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 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’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 | 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. | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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. At December 31, 2020 and 2019, 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 | 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. | 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 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 | 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. | 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 | 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 | 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 | 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 | 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 | Retirement Plans The AppHarvest 401(k) Plan provides for matching contributions. The Company incurred $105 and $11 of expenses associated with the 401(k) Plan for the years ended December 31, 2020 and 2019, respectively. | |
Stock-Based Compensation | 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 SEC Staff Accounting Bulletin No. 107, Share-Based Payment | |
Development Fee Income from a Related Party | 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 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 | 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 and restricted stock units 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 | Advertising Advertising costs are expensed when incurred. Advertising expense for the years ended December 31, 2020 and 2019 was $142 and $40, respectively, and is included in selling, general, and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss. | |
Segment Information | 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 | 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 | 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 | 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 $1,127 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 | 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, $2,214 of start-up expenses related to pre-commencement commercial activities at the CEA 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 | In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Income Taxes 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) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Payables and Accruals [Abstract] | ||
Schedule of accrued expenses | September 30, 2021 December 31, 2020 Payroll and related $ 1,576 $ 563 Professional service fees 991 693 Construction costs 8,331 2,574 Other accrued liabilities 1,044 352 Incentive compensation 2,510 — Utilities 64 384 Interest on convertible debt with a related party — 618 Total accrued expenses $ 14,516 $ 5,184 | Accrued expenses consist of the following as of December 31: 2020 2019 Accrued construction costs $ 2,574 $ — Accrued professional service fees 693 35 Accrued interest on convertible debt with a related party 618 — Accrued payroll 563 2 Accrued utilities 384 — Other accrued liabilities 352 12 Total accrued expenses $ 5,184 $ 49 |
Inventories, net (Tables)
Inventories, net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Schedule of inventories | September 30, 2021 December 31, 2020 Raw materials $ 1,255 $ 781 Growing crops 2,932 2,606 Finished goods — — Total inventories, net $ 4,187 $ 3,387 | Inventories, net consisted of the following at December 31, 2020: Finished goods $ — Raw materials 781 Growing crops 2,606 Total inventories, net $ 3,387 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of property and equipment at cost and accumulated depreciation | September 30, 2021 December 31, 2020 Land $ 30,526 $ 7,277 Buildings 77,949 57,362 Machinery and equipment 49,153 9,581 Construction in progress 133,666 78,174 Leasehold improvements 3,577 871 Less: accumulated depreciation (6,261) (620) Total property and equipment, net $ 288,610 $ 152,645 | Property and equipment at cost and accumulated depreciation are as follows: December 31, 2020 Original Accumulated Assets cost depreciation net Land $ 3,678 $ — $ 3,678 Land with a related party – see Note 8(a) 3,599 — 3,599 Buildings 57,362 (436) 56,926 Construction in progress 23,526 — 23,526 Construction in progress with a related party – see Note 8(a) 54,649 — 54,649 Automobiles 152 (15) 137 Leasehold improvements 871 (18) 854 Equipment 1,803 (68) 1,735 Machinery 7,625 (84) 7,542 $ 153,266 $ (620) $ 152,645 December 31, 2019 Original Accumulated Assets cost depreciation net Land with a related party – see Note 8(a) $ 3,599 $ — $ 3,599 Equipment 25 (7) 18 Machinery 96 (12) 84 $ 3,720 $ (19) $ 3,701 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Summary of income tax expense | Deferred income taxes: Federal $ 9 State 1 Total deferred income taxes 9 Total income tax expense $ 9 |
Summary of reconciliation of the statutory federal income tax with the provision for income taxes | 2020 2019 Loss before income taxes $ (17,439) $ (2,746) Income tax benefit at U.S. Federal statutory rate (3,662) (577) Permanent items 211 95 Change in valuation allowance 4,122 572 State income taxes, net of U.S. Federal income tax benefit (662) (91) Income tax expense $ 9 $ — |
Summary of significant components of the Company's deferred tax assets and liabilities | December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards $ 4,857 $ 812 Lease liabilities 15,680 40 Financing obligation 15,582 962 Other 20 4 36,137 1,818 Valuation allowance (4,922) (800) 31,216 1,018 Deferred tax liabilities: Property and equipment $ (30,879) $ (983) Operating lease right-of-use assets (349) (39) (31,228) (1,021) Net deferred tax liabilities $ (13) $ (4) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Summary of future minimum rental payments required under the leases | 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 $ 175 2022 715 2023 647 2024 529 2025 448 2026 and thereafter 849 Total minimum payments required 3,363 Less: imputed interest costs (1) (550) Present value of net minimum lease payments (2) $ 2,813 Weighted-average imputed interest rate 6.33 % Weighted-average remaining lease term 5.3 (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 unaudited condensed consolidated balance sheet as of September 30, 2021 as current and non-current lease liability of $537 and $2,276, respectively. | 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 $ 59,447 2022 281 — 2023 270 — 2024 277 — 2025 265 — 2026 and thereafter 550 — Total minimum payments required 1,901 59,447 Less: imputed interest costs (1) (364) (230) Present value of net minimum lease payments (2) $ 1,537 $ 59,216 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 , current lease liability with other parties of $166, and noncurrent lease liability of $1,370 . |
Summary of supplemental consolidated statement of cash flow information | 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities $ 96 $ 38 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,441 $ 161 |
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 2,159 $ 0.21 9.39 Granted 1,014 0.56 Exercised (159) 0.23 Forfeited or expired (37) 0.56 Outstanding at December 31, 2020 2,978 $ 0.33 8.71 Expected to vest, December 31, 2020 1,713 0.37 8.84 Exercisable, December 31, 2020 1,265 0.27 8.53 |
Summary of RSU activity | Weighted average grant date fair RSUs Units value Outstanding at December 31, 2019 — $ — Granted 3,002 8.90 Vested — — Forfeited (457) 7.91 Unvested at December 31, 2020 2,545 $ 9.07 Expected to vest, December 31, 2020 2,545 $ 9.07 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 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: September 30, September 30, Anti-dilutive common share equivalents 2021 2020 Stock options 2,824 3,026 Restricted stock units 7,669 1,301 Warrants 13,242 — Total anti-dilutive common share equivalents 23,735 4,327 | December 31, 2020 2019 Anti-dilutive common share equivalents: Stock options 2,978 2,159 Restricted stock units 2,545 — Total anti-dilutive common share equivalents 5,523 2,159 |
Summary of basic and diluted net loss per common share | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator: Net loss $ (17,268) $ (5,683) $ (77,799) $ (8,130) Denominator: Weighted-average common shares outstanding, basic and diluted 100,437 41,558 93,823 35,960 Net loss per common share, basic and diluted $ (0.17) $ (0.14) $ (0.83) $ (0.23) | Year Ended December 31, 2020 2019 Numerator: Net loss $ (17,448) $ (2,746) Denominator: Weighted-average common outstanding 38,072 25,571 Net loss per common and $ (0.46) $ (0.11) |
Description of Business (Detail
Description of Business (Details) $ / shares in Units, shares in Thousands, $ in Thousands | Jan. 29, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Exchange ratio | 2.1504 | |||
Number of shares issued (PIPE shares) | 37,500 | |||
Share price (in dollars per share) | $ / shares | $ 10 | |||
Aggregate purchase price in private placement | $ | $ 375,000 | |||
Capital stock, shares authorized (in shares) | 760,000 | |||
Common stock, shares authorized (in shares) | 750,000 | 750,000 | 750,000 | 750,000 |
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 | 10,000 | 10,000 | 10,000 |
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Gross proceeds | $ | $ 475,000 | |||
Gross proceeds from the PIPE | $ | $ 375,000 | $ 375,000 |
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 | Sep. 30, 2021 |
Significant Accounting Policy [Line Items] | |||||
Cash restricted for future minimum lease payments | $ 5,646 | $ 0 | |||
Retirement Plans | |||||
Employer matching contribution | 105 | 11 | |||
Related Party Transactions [Abstract] | |||||
Development fee income from related party | $ 750 | ||||
Advertising | |||||
Advertising expense | 142 | 40 | |||
Distribution Agreement | |||||
Term of purchase and marketing agreement | 10 years | ||||
SG&A | |||||
Distribution Agreement | |||||
Start-up expenses | 2,214 | ||||
Fair Value, Recurring | |||||
Significant Accounting Policy [Line Items] | |||||
Assets measured at fair value | 0 | 0 | $ 46,000 | ||
Retirement Plans | |||||
Liabilities measured at fair value | 0 | 0 | $ 7,055,000 | ||
Other Assets [Member] | |||||
Distribution Agreement | |||||
Deferred offering costs | $ 1,127 | $ 0 |
Accrued Expenses (Details)_2
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | |||
Accrued construction costs | $ 2,574 | ||
Accrued professional service fees | $ 991 | 693 | $ 35 |
Accrued interest on convertible debt with a related party | 0 | 618 | |
Accrued payroll | 563 | 2 | |
Accrued utilities | 64 | 384 | |
Other accrued liabilities | 1,044 | 352 | 12 |
Accrued expenses | $ 14,516 | $ 5,184 | $ 49 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 0 | |
Raw materials | 781 | |
Growing crops | $ 2,932 | 2,606 |
Total inventories, net | $ 3,387 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | $ 153,266,000 | $ 3,720,000 | ||||
Accumulated depreciation | (620,000) | (19,000) | ||||
Assets net | 152,645,000 | 3,701,000 | ||||
Depreciation | $ 2,752,000 | $ 51,000 | $ 6,887,000 | $ 66,000 | 176,000 | 16,000 |
Land | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 3,678,000 | |||||
Assets net | 3,678,000 | |||||
Land with a related party | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 3,599,000 | 3,599,000 | ||||
Assets net | 3,599,000 | 3,599,000 | ||||
Buildings | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 57,362,000 | |||||
Accumulated depreciation | (436,000) | |||||
Assets net | 56,926,000 | |||||
Right To Use Assets Held Under Finance Lease With Related Party Member | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 56,748 | |||||
Construction in progress | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 23,526,000 | |||||
Assets net | 23,526,000 | |||||
Construction In Progress Related Party Member | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 54,649,000 | |||||
Assets net | 54,649,000 | |||||
Automobiles [Member] | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 152,000 | |||||
Accumulated depreciation | (15,000) | |||||
Assets net | 137,000 | |||||
Leasehold improvements | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 871,000 | |||||
Accumulated depreciation | (18,000) | |||||
Assets net | 854,000 | |||||
Equipment | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 1,803,000 | 25,000 | ||||
Accumulated depreciation | (68,000) | (7,000) | ||||
Assets net | 1,735,000 | 18,000 | ||||
Machinery | ||||||
Property, Plant and Equipment, Net, by Type [Abstract] | ||||||
Original cost | 7,625,000 | 96,000 | ||||
Accumulated depreciation | (84,000) | (12,000) | ||||
Assets net | $ 7,542,000 | $ 84,000 |
Income Taxes (Details)_2
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred income taxes: | ||||||
Federal | $ 9,000 | |||||
State | 1,000 | |||||
Total deferred income taxes | $ 539,000 | $ 0 | 9,000 | $ 0 | ||
Total income tax expense | $ 17,000 | $ 0 | $ 539,000 | $ 0 | 9,000 | |
Current provision for income taxes | $ 0 | $ 0 |
Income Taxes - Provision for in
Income Taxes - Provision for income taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of the statutory federal income tax with the provision for income taxes | ||||||
Loss before income taxes | $ (17,251,000) | $ (5,683,000) | $ (77,260,000) | $ (8,130,000) | $ (17,439,000) | $ (2,746,000) |
Income tax benefit at U.S. Federal statutory rate | (3,662,000) | (577,000) | ||||
Permanent items | 211,000 | 95,000 | ||||
Change in valuation allowance | 4,122,000 | 572,000 | ||||
State income taxes, net of U.S. Federal income tax benefit | (662,000) | $ (91,000) | ||||
Income tax provision | $ 17,000 | $ 0 | $ 539,000 | $ 0 | $ 9,000 |
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 | $ 4,857,000 | $ 812,000 |
Lease liabilities | 15,680,000 | 40,000 |
Financing obligation | 15,582,000 | 962,000 |
Other | 20,000 | 4,000 |
Total deferred tax assets | 36,137,000 | 1,818,000 |
Valuation allowance | (4,922,000) | (800,000) |
Deferred tax assets after valuation allowance | 31,216,000 | 1,018,000 |
Deferred tax liabilities: | ||
Property and equipment | (30,879,000) | (983,000) |
Operating lease right-of-use assets, net | (349,000) | (39,000) |
Deferred Tax Liabilities, Gross, Total | (31,228,000) | (1,021,000) |
Net deferred tax liabilities | (13,000) | $ (4,000) |
Increase in valuation allowance | $ 4,122 |
Income Taxes - Net operating lo
Income Taxes - Net operating loss carryforward (Details) | Dec. 31, 2020USD ($) |
U.S. federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 19,478 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 19,398 |
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 | Dec. 31, 2020 | May 12, 2020 |
Convertible Debt | |||
Related Party Transaction | |||
Principal balance | $ 30,000,000 | ||
Equilibrium | Loan Agreement Member | |||
Related Party Transaction | |||
Principal balance | $ 2,000 | ||
Interest rate (as a percent) | 9.50% | ||
Inclusive Capital Partners Spring Master Fund L.p. Member | Convertible Debt | |||
Related Party Transaction | |||
Principal balance | $ 30,000 | ||
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 | Sep. 30, 2021 | Apr. 15, 2019 | |
Related Party Transaction [Line Items] | ||||
Operating lease expense | $ 169 | $ 70 | ||
Operating lease right-of-use assets, net | 1,307,000 | 144,000 | $ 2,196,000 | |
Assets net | 152,645,000 | $ 3,701,000 | ||
Construction In Progress Related Party Member | ||||
Related Party Transaction [Line Items] | ||||
Operating lease right-of-use assets, net | 58,795,000 | |||
Assets net | 54,649,000 | |||
Equilibrium | ||||
Related Party Transaction [Line Items] | ||||
Finance lease liability | 59,216,000 | |||
Operating lease right-of-use assets, net | $ 56,748,000 | |||
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 | $ 125,000,000 | |||
Mortgage loan | Equilibrium | ||||
Related Party Transaction [Line Items] | ||||
Principal balance | $ 3,481 | |||
Interest rate (as a percent) | 8.00% |
Commitments and Contingencies_2
Commitments and Contingencies - Future minimum rental payments (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Operating leases, 2021 | $ 715,000 | $ 258,000 | ||
Operating leases, 2022 | 647,000 | 281,000 | ||
Operating leases, 2023 | 529,000 | 270,000 | ||
Operating leases, 2024 | 448,000 | 277,000 | ||
Operating leases, 2025 | 265,000 | |||
2024 and thereafter | 849,000 | |||
Operating leases, 2026 and thereafter | 550,000 | |||
Total minimum payments required | 3,363,000 | 1,901,000 | ||
Less: imputed interest costs | (550,000) | (364,000) | ||
Present value of net minimum lease payments | $ 2,813,000 | $ 1,537,000 | ||
Weighted-average imputed interest rate | 6.33% | 6.29% | ||
Weighted-average remaining lease term | 5 years 3 months 18 days | 6 years 10 months 24 days | ||
Current lease liability with related party | $ 59,216,000 | |||
Current lease liability with other parties | $ 537,000 | 166,000 | $ 45,000 | |
Noncurrent lease liability | 2,276,000 | 1,370,000 | 104,000 | |
Supplemental Consolidated Statement of Cash Flow | ||||
Cash paid for amounts included in the measurement of operating lease liabilities | 378,000 | $ 54,000 | 96,000 | 38,000 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 1,055,000 | $ 376,000 | 1,441,000 | $ 161,000 |
Equilibrium | ||||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||||
Finance Lease, 2021 | 59,447,000 | |||
Finance Lease, total minimum payments required | 59,447,000 | |||
Finance Lease, Less: imputed interest costs | (230,000) | |||
Finance Lease, present value of net minimum lease payments | $ 59,216,000 | |||
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 | 2,974 | ||
Number of additional shares authorized | 3,166 | ||
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 years | ||
Nonqualified stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 30 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 | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at the beginning | 2,978,000 | 2,159,000 | |
Number of options granted during the period | 48,000 | 1,014,000 | |
Exercised | (159,000) | 0 | |
Forfeited or expired | (37,000) | ||
Outstanding at the end | 2,978,000 | 2,159,000 | |
Expected to vest at the end | 1,713,000 | ||
Options-exercisable at the end | 1,265,000 | ||
Weighted average exercise price | |||
Outstanding at the beginning (in dollars per share) | $ 0.33 | $ 0.21 | |
Granted (in dollars per share) | 0.56 | ||
Exercised (in dollars per share) | 0.23 | ||
Forfeited or expired (in dollars per share) | 0.56 | ||
Outstanding at the end (in dollars per share) | 0.33 | $ 0.21 | |
Expected to vest at the end (in dollars per share) | 0.37 | ||
Options-exercisable at the end (in dollars per share) | $ 0.27 | ||
Average remaining contractual term | |||
Outstanding average remaining contractual term | 8 years 8 months 15 days | 9 years 4 months 20 days | |
Expected to vest at the end | 8 years 10 months 2 days | ||
Options-exercisable at the end | 8 years 6 months 10 days |
Stock Compensation Plan - Incen
Stock Compensation Plan - Incentive stock options (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 11,571,000 | $ 49,000 | $ 31,248,000 | $ 108,000 | ||
Intrinsic value for outstanding options | $ 39,109 | |||||
Intrinsic value of options forfeited | $ 472 | $ 0 | ||||
Number of options granted during the period | 48,000 | 1,014,000 | ||||
Number of options exercised | 159,000 | 0 | ||||
Total intrinsic value of options exercised | $ 2,100 | |||||
Incentive stock options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | 154 | $ 101 | ||||
Unrecognized stock-based compensation expense | $ 366 | $ 200 | ||||
Unrecognized stock-based compensation expense anticipated to recognize in weighted average years | 2 years 2 months 12 days | 2 years 9 months 14 days | ||||
Intrinsic value for outstanding options | $ 16,690 | |||||
Weighted average grant date fair value of options granted | $ 0.33 | $ 0.14 |
Stock Compensation Plan - Restr
Stock Compensation Plan - Restricted stock Activity (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Units. | |
Outstanding at the beginning (in dollars) | shares | 0 |
Number of shares granted during period (in shares) | shares | 3,002 |
Vested (in dollars) | shares | 0 |
Forfeited (in dollars) | shares | (457) |
Outstanding at the end (in dollars) | shares | 2,545 |
Expected to vest at the end (in dollars) | shares | 2,545 |
Weighted average grant date fair value | |
Outstanding at the beginning (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 8.90 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 7.91 |
Outstanding at the end (in dollars per share) | $ / shares | 9.07 |
Expected to vest at the end (in dollars per share) | $ / shares | $ 9.07 |
Stock Compensation Plan - Res_2
Stock Compensation Plan - Restricted stock (Details) - USD ($) | Oct. 08, 2018 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of restricted share award granted | 3,002,000 | ||||||
Common Stock value per share | $ 8.90 | ||||||
Vesting of RSU | 0 | ||||||
Stock-based compensation expense | $ 11,571,000 | $ 49,000 | $ 31,248,000 | $ 108,000 | |||
SG&A | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock-based compensation expense | $ 154 | $ 140 | |||||
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 | 2,330 | ||||||
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 | 215 | ||||||
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 | 215 | ||||||
Common Stock value per share | $ 0.23 | ||||||
Vesting of RSU | 0 | 179 | |||||
Stock-based compensation expense | $ 38 | ||||||
Restricted stock units | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized stock-based compensation expense | $ 23,091 |
SAFE Notes (Details)
SAFE Notes (Details) $ in Thousands | 11 Months Ended |
Dec. 31, 2018USD ($) | |
SAFE Notes | |
Amount raised | $ 1,225 |
Adjusted Purchase Amount, Non-compounding rate per year (as a percent) | 5.00% |
Adjusted Purchase Amount, discount rate (as a percent) | 20.00% |
Common Stock (Details)
Common Stock (Details) shares in Thousands, $ in Thousands | Jan. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020Voteshares | Dec. 31, 2019USD ($)shares |
STOCKHOLDERS' EQUITY | |||||
Number of vote for each share of Common Stock | Vote | 1 | ||||
Dividends declared or paid | $ | $ 0 | $ 0 | $ 0 | $ 0 | |
Shares of Common Stock reserved for future issuance | shares | 33,868 | 21,339 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares shares in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 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 | 23,735 | 4,327 | 5,523 | 2,159 |
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 | 2,545 | |||
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 | 2,824 | 3,026 | 2,978 | 2,159 |
Net Loss Per Share - Basic and
Net Loss Per Share - Basic and diluted net loss per common share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||||||
Net loss | $ (17,448) | $ (2,746) | ||||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||||||
Weighted average common shares outstanding, basic | 100,437,000 | 41,558,000 | 93,823,000 | 35,960,000 | 38,072,000 | 25,571,000 |
Weighted average common shares outstanding, diluted | 100,437,000 | 41,558,000 | 93,823,000 | 35,960,000 | 38,072 | 25,571 |
Net loss per common share, basic (in dollars per share) | $ (0.17) | $ (0.14) | $ (0.83) | $ (0.23) | $ (0.46) | $ (0.11) |
Net loss per common share, diluted (in dollars per share) | $ (0.17) | $ (0.14) | $ (0.83) | $ (0.23) | $ (0.46) | $ (0.11) |