Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39288 | |
Entity Registrant Name | AppHarvest, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-5042965 | |
Entity Address, Address Line One | 500 Appalachian Way | |
Entity Address, City or Town | Morehead | |
Entity Address, State or Province | KY | |
Entity Address, Postal Zip Code | 40351 | |
City Area Code | 606 | |
Local Phone Number | 653-6100 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 155,108,773 | |
Entity Central Index Key | 0001807707 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Common stock, $0.0001 par value per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, $0.0001 par value per share | |
Trading Symbol | APPH | |
Security Exchange Name | NASDAQ | |
Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share | |
Trading Symbol | APPHW | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current Assets | ||
Cash and cash equivalents | $ 50,017 | $ 54,334 |
Restricted cash | 23,450 | 24,198 |
Accounts receivable, net | 3,669 | 2,786 |
Inventories, net | 16,105 | 18,078 |
Prepaid expenses and other current assets | 17,341 | 14,716 |
Total current assets | 110,582 | 114,112 |
Operating lease right-of-use assets, net | 2,503 | 2,626 |
Property and equipment, net | 476,334 | 456,178 |
Other assets, net | 20,385 | 22,412 |
Total non-current assets | 499,222 | 481,216 |
Total assets | 609,804 | 595,328 |
Current Liabilities | ||
Accounts payable | 30,445 | 16,571 |
Accrued expenses | 14,517 | 21,996 |
Current portion of lease liabilities | 505 | 514 |
Current portion of long-term debt | 3,685 | 3,685 |
Other current liabilities | 45 | 202 |
Total current liabilities | 49,197 | 42,968 |
Long-term debt, net of current portion | 178,819 | 180,537 |
Lease liabilities, net of current portion | 2,509 | 2,628 |
Financing obligation | 105,680 | 103,787 |
Deferred income tax liabilities | 4,682 | 4,925 |
Private Warrant liabilities | 110 | 119 |
Other liabilities | 63 | 73 |
Total non-current liabilities | 291,863 | 292,069 |
Total liabilities | 341,060 | 335,037 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity | ||
Preferred stock, par value $0.0001, 10,000 shares authorized, 0 issued and outstanding, as of March 31, 2023 and December 31, 2022 | 0 | 0 |
Common stock, par value $0.0001, 750,000 shares authorized, 155,084 and 108,511 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 16 | 11 |
Additional paid-in capital | 658,972 | 615,452 |
Accumulated deficit | (397,590) | (363,960) |
Accumulated other comprehensive income | 7,346 | 8,788 |
Total stockholders’ equity | 268,744 | 260,291 |
Total liabilities and stockholders’ equity | $ 609,804 | $ 595,328 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 155,084,000 | 108,511,000 |
Common stock, shares outstanding (in shares) | 155,084,000 | 108,511,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 13,011 | $ 5,164 |
Cost of goods sold | 34,345 | 13,554 |
Gross loss | (21,334) | (8,390) |
Operating expenses: | ||
Selling, general and administrative expenses | 10,016 | 21,039 |
Total operating expenses | 10,016 | 21,039 |
Loss from operations | (31,350) | (29,429) |
Other income (expense): | ||
Interest expense | (2,698) | 0 |
Change in fair value of Private Warrants | 9 | (1,329) |
Other | 166 | 14 |
Loss before income taxes | (33,873) | (30,744) |
Income tax benefit | 243 | 109 |
Net loss | (33,630) | (30,635) |
Other comprehensive (loss) income : | ||
Net unrealized (losses) gains on derivatives contracts, net of tax | (1,442) | 4,360 |
Comprehensive loss | $ (35,072) | $ (26,275) |
Net loss per common share: | ||
Basic (in dollars per share) | $ (0.26) | $ (0.30) |
Diluted (in dollars per share) | $ (0.26) | $ (0.30) |
Weighted average common shares outstanding: | ||
Basic (in shares) | 131,124 | 101,321 |
Diluted (in shares) | 131,124 | 101,321 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income |
Beginning balance (in shares) at Dec. 31, 2021 | 101,136 | ||||
Beginning balance at Dec. 31, 2021 | $ 387,640 | $ 10 | $ 576,895 | $ (187,314) | $ (1,951) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Conversion of Private Warrants | 1,104 | 1,104 | |||
Stock options exercised | 36 | 36 | |||
Vesting of restricted stock units (in shares) | 414 | ||||
Vesting of restricted stock units | (953) | (953) | |||
Stock-based compensation | 6,035 | 6,035 | |||
Net loss | (30,635) | (30,635) | |||
Other comprehensive income (loss) | 4,360 | 4,360 | |||
Ending balance (in shares) at Mar. 31, 2022 | 101,550 | ||||
Ending balance at Mar. 31, 2022 | $ 367,587 | $ 10 | 583,117 | (217,949) | 2,409 |
Beginning balance (in shares) at Dec. 31, 2022 | 108,511 | 108,511 | |||
Beginning balance at Dec. 31, 2022 | $ 260,291 | $ 11 | 615,452 | (363,960) | 8,788 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock, net (in shares) | 46,000 | ||||
Issuance of common stock, net | 43,038 | $ 5 | 43,033 | ||
Stock options exercised (in shares) | 391 | ||||
Stock options exercised | 63 | 63 | |||
Vesting of restricted stock units (in shares) | 182 | ||||
Vesting of restricted stock units | (79) | (79) | |||
Stock-based compensation | 503 | 503 | |||
Net loss | (33,630) | (33,630) | |||
Other comprehensive income (loss) | $ (1,442) | (1,442) | |||
Ending balance (in shares) at Mar. 31, 2023 | 155,084 | 155,084 | |||
Ending balance at Mar. 31, 2023 | $ 268,744 | $ 16 | $ 658,972 | $ (397,590) | $ 7,346 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating Activities | ||
Net loss | $ (33,630) | $ (30,635) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of Private Warrants | (9) | 1,329 |
Deferred income tax benefit | (243) | (109) |
Depreciation and amortization | 7,641 | 3,112 |
Interest expense from financing obligation | 1,974 | 0 |
Stock-based compensation expense | 503 | 6,035 |
Rent expense (less than) in excess of payments | (5) | 26 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (883) | (307) |
Inventories, net | 1,973 | (78) |
Prepaid expenses and other current assets | (2,625) | 1,613 |
Other assets, net | 51 | (9,230) |
Accounts payable | 2,804 | 301 |
Accrued expenses | (2,386) | (2,124) |
Other current liabilities | (157) | 0 |
Other non-current liabilities | (10) | 2,564 |
Net cash used in operating activities | (25,002) | (27,503) |
Investing Activities | ||
Purchases of property and equipment | (21,171) | (39,018) |
Net cash used in investing activities | (21,171) | (39,018) |
Financing Activities | ||
Proceeds from debt | 0 | 25,902 |
Repayments of debt | (937) | 0 |
Debt issuance costs | (895) | 0 |
Payments on financing obligation | (82) | 0 |
Proceeds from stock options exercised | 63 | 36 |
Payments of withholding taxes on restricted stock units | (79) | (953) |
Proceeds from issuance of common stock | 46,000 | 0 |
Payments for common stock issuance | (2,962) | 0 |
Net cash provided by financing activities | 41,108 | 24,985 |
Change in cash and cash equivalents | (5,065) | (41,536) |
Cash, cash equivalents and restricted cash at the beginning of period | 78,532 | 176,311 |
Cash, cash equivalents and restricted cash at the end of period | 73,467 | 134,775 |
Less restricted cash at the end of the period | 23,450 | 37,130 |
Cash and cash equivalents at the end of the period | 50,017 | 97,645 |
Non-cash Activities: | ||
Fixed assets purchases in accounts payable | 24,056 | 5,272 |
Fixed assets purchases in accrued liabilities | 4,108 | 2,207 |
Termination of operating leases which decrease operating lease liabilities | $ 0 | $ 237 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business AppHarvest, Inc. (the “Company”, or “AppHarvest”) was founded on January 19, 2018. Together with its subsidiaries, AppHarvest is a sustainable food company in Appalachia developing and operating some of the world’s largest high-tech indoor farms with robotics and artificial intelligence to build a reliable, climate-resilient food system. AppHarvest’s farms are designed to grow produce using sunshine, rainwater and up to 90% less water than open-field growing, all while producing yields up to 30 times that of traditional agriculture and preventing pollution from agricultural runoff. AppHarvest currently operates its 60-acre flagship farm in Morehead, Kentucky (“AppHarvest Morehead”), producing tomatoes, a 15-acre indoor farm for salad greens in Berea, Kentucky (“AppHarvest Berea”), a 30-acre farm for strawberries and cucumbers in Somerset, Kentucky (“AppHarvest Somerset”), and a 60-acre farm in Richmond, Kentucky (“AppHarvest Richmond”), for tomatoes. The four-farm network consists of 165 acres under glass. 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.”). Nature of Operations The high-tech greenhouse agriculture business is extremely capital-intensive and the Company expects to expend significant resources to complete the build-out of facilities under construction, continue harvesting existing crops and plant and harvest new crops in the existing and future controlled environment agriculture (“CEA”) facilities. These expenditures are expected to include working capital, costs of acquiring and building out new facilities, costs associated with planting and harvesting, such as the purchase of seeds and growing supplies, and the cost of attracting, developing and retaining a skilled labor force, including local labor. In addition, other unanticipated costs may arise due to the unique nature of these CEA facilities and increased production in the Company’s new operating facilities at full capacity. Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and payments of liabilities in the ordinary course of business. Accordingly, the condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount of and classification of liabilities that may result should the Company be unable to continue as a going concern. The Company has incurred losses from operations and generated negative cash flows from operating activities since inception. During the three-months ended March 31, 2023, the Company incurred net losses of $33,630 and generated negative cash flows from operations of $25,002. The Company’s current operating plan, which includes its planting and harvesting activities, indicates that it will continue to incur losses from operations and generate negative cash flows from operating activities. In addition, debt service requirements and the Company’s plans to continue to invest in the build-out and start-up of its new and future CEA facilities, including AppHarvest Berea, AppHarvest Richmond and AppHarvest Somerset, will have an adverse impact on its liquidity. As of March 31, 2023, the Company had $50,017 cash on hand, and an accumulated deficit of $397,590. Management believes there is substantial doubt about the Company’s ability to continue as a going concern. The Company will need to raise additional funds in order to operate its business, meet obligations as they become due and continue the ongoing operation, construction, and build-out and start-up of its CEA facilities. In December 2022, the Company completed a sale-leaseback of its salad greens facility and property in Berea, Kentucky. The Company raised additional capital in February 2023 through an underwritten public offering, as further discussed in Note 15 – Shareholders’ Equity . The Company is exploring additional financing alternatives, including, but not limited to additional sale-leaseback transactions related to other CEA facilities, third-party equity or debt financing, or other sources, such as strategic relationships or other transactions with third parties, that may or may not include business combination transactions. However, financing may not be available to the Company in the necessary time frame, in amounts that the Company requires, on terms that are acceptable to the Company, or at all. If the Company is unable to raise the necessary funds when needed, it may materially and adversely impact the Company’s ability to execute on its operating plans, the operation of the Company’s current CEA facilities and the construction, build-out and start-up of the CEA facilities could be delayed, scaled back, or abandoned. If the Company becomes unable to continue as a going concern, it may have to dispose of assets and might realize significantly less than the values at which they are carried on its condensed consolidated financial statements. These actions may cause the Company’s stockholders to lose all or part of their investment in the Company’s common stock. The condensed consolidated financial statements do not include any adjustments that might result from this uncertainty. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“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, 2023. These unaudited condensed consolidated financial statement should be used in conjunction with the Company’s audited consolidated financial statements, as of and for the year ended December 31, 2022, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 15, 2023. 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. All dollar and share amounts are in thousands, except per share amounts, unless otherwise noted. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 primarily include the valuation of inventory. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the global volatility and general market disruption and geopolitical tensions. Economic conditions, such as recessionary trends, inflation, supply chain disruptions, 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. Restricted Cash At March 31, 2023, restricted cash includes $14,386 related to a master credit agreement with Rabo AgriFinance LLC (“Rabo”) for a real estate term loan (the “Rabo Loan”), $6,656 in contributions to a project and interest reserve account for AppHarvest Somerset for the loan agreement with Greater Nevada Credit Union (the “GNCU Loan”), and $2,408 for construction related to AppHarvest Berea. At December 31, 2022, restricted cash included $12,007 related to the Rabo Loan, $9,791 in contributions to the aforementioned project and interest reserve account, and $2,400 for construction related to AppHarvest Berea. Capitalization of Interest During the three months ended March 31, 2023 and March 31, 2022, $2,226 and $1,648 of interest expense has been capitalized, respectively. Warrants At March 31, 2023, there were 13,242 warrants to purchase Common Stock outstanding, consisting of 12,191 public warrants (“Public Warrants”) and 1,051 private warrants (“Private Warrants” and together with Public Warrants, “Warrants”). The Private Warrants are held by the initial stockholders of the special purpose acquisition company. 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 fair value of the Private Warrants is estimated at each measurement date using a Black-Scholes option pricing model. See Note 5 - Fair Value Measurements for inputs used in calculating the estimated fair value. Accounts Receivable The Company’s trade accounts receivable are non-interest bearing and are recorded at the net realizable value. The allowance for doubtful accounts represents the Company’s best estimate of the amount of expected credit losses in existing accounts receivable. As of March 31, 2023 and December 31, 2022, the Company had no allowance for doubtful accounts. New Accounting Pronouncements No new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on the condensed consolidated financial statements . |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In an effort to continue to reduce operating expenses, during the three months ended March 31, 2023, the Company incurred restructuring costs of $355 for severance. As of March 31, 2023, there is no remaining liability associated with these restructuring charges. During the first quarter of 2022, the Company initiated and completed a restructuring plan to reduce operating costs. During the three months ended March 31, 2022, the Company incurred total costs of $1,990 related to the restructuring initiative, of which $1,185 was for severance and other benefits, and $805 was for legal and other costs. All of the costs discussed above are included in selling, general and administrative (“SG&A”) in the consolidated statements of operations and comprehensive loss in their respective periods. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Substantially all of the Company’s revenues are generated from the sale of tomatoes under an agreement with one customer, Mastronardi Produce Limited (“Mastronardi”). 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 rejections for products that do not meet quality specifications and net of sales and other taxes collected on behalf of governmental authorities. Payment terms are generally 30 days. Disaggregation of Revenue Net sales consists of revenue from the sale of tomatoes, cucumbers, strawberries and salad greens produced at the Company’s CEA facilities (collectively, the “Products”) and primarily sold to Mastronardi Produce Limited (“Mastronardi”) under the Purchase and Marketing Agreement (the “Mastronardi Agreement”). The following table presents the Company’s total revenue disaggregated by product type: Three Months Ended March 31, 2023 March 31, 2022 Tomatoes $ 10,966 $ 5,164 Strawberries 1,008 — Salad greens 846 — Cucumbers 191 — $ 13,011 $ 5,164 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The company categorizes its assets and liabilities into one of three levels based on the assumptions (inputs) used in determining their values, as defined below: • Level 1 : Unadjusted quoted prices in active markets for identical assets or liabilities. • Level 2 : Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 : Unobservable inputs reflecting management’s assumptions about the inputs used in pricing the asset or liability. The table below presents the Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for each measurement: Fair Value as of: March 31, 2023 December 31, 2022 Balance Sheet Account Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Interest rate swap Other assets, net $ — $ 7,346 $ — $ 7,346 $ — $ 8,788 $ — $ 8,788 Total assets $ — $ 7,346 $ — $ 7,346 $ — $ 8,788 $ — $ 8,788 Liabilities: Private Warrants Private Warrant liabilities — 110 — 110 — 119 — 119 Total liabilities $ — $ 110 $ — $ 110 $ — $ 119 $ — $ 119 The Company’s derivative contracts 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. As of March 31, 2023, the carrying value of the Company’s debt, other than the GNCU Loan, approximated fair value due to the short term nature of the debt or that such borrowings bear variable interest rates that correspond to current market rates. The fair value of the GNCU Loan was estimated using discounted cash flow analyses based on current estimated incremental borrowing rates for similar types of borrowing arrangements (Level 2). If our GNCU Loan was measured at fair value, it would have been $42,490 as of March 31, 2023. See Note 12 - Derivative Financial Instruments and Note 10 - Debt for more information on the Company’s use of financial instruments. The Private Warrant liabilities are determined using a Black-Scholes option pricing model, a Level 2 valuation. The significant inputs to the Private Warrant valuation are as follows: March 31, 2023 December 31, 2022 Exercise price $ 11.50 $ 11.50 Stock price $ 0.61 $ 0.57 Volatility 113.0 % 114.0 % Remaining term in years 2.83 3.08 Risk-free rate 3.81 % 4.22 % Dividend yield — — The following table summarizes the private warrant activity for the three months ended March 31, 2023: Fair value of Private Warrants on December 31, 2022 $ 119 Fair value of Private Warrants converted to Public Warrants — Change in fair value of Private Warrants (9) Fair value of Private Warrants outstanding as of March 31, 2023 $ 110 The Warrants are deemed equity instruments for income tax purposes, and accordingly, there is no tax impact relating to changes in the fair value of the Private Warrants. The changes in the fair value of the Private Warrants may be material to our future operating results. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are valued at the lower of cost (first-in, first-out) or net realizable value and are comprised of the purchase and transportation cost plus production labor and overhead. Raw materials primarily represent growing and packaging supplies. Growing crop inventories primarily represent the costs associated with growing produce within the Company’s CEA facilities. Finished goods inventories represent costs associated with boxed produce not yet sold. March 31, 2023 December 31, 2022 Raw materials $ 6,307 $ 6,191 Growing crops 9,220 11,546 Finished goods 578 341 Total inventories, net $ 16,105 $ 18,078 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment March 31, 2023 December 31, 2022 Land $ 30,639 $ 29,877 Buildings 244,194 215,420 Machinery and equipment 116,934 114,407 Construction in progress 112,254 116,544 Leasehold improvements 4,688 4,688 Less: accumulated depreciation (32,375) (24,758) Total property and equipment, net $ 476,334 $ 456,178 Depreciation expense was $7,641 for the three months ended March 31, 2023, compared to $3,039 for the three months ended March 31, 2022. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets March 31, 2023 December 31, 2022 Utility deposits $ 6,253 $ 6,246 Investment in unconsolidated entity 5,000 5,000 Prepayments for fixed assets 750 1,284 Interest rate swap 7,346 8,788 Other assets 1,036 1,094 Total other assets $ 20,385 $ 22,412 |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses March 31, 2023 December 31, 2022 Construction costs $ 4,108 $ 9,201 Payroll and related 3,042 5,314 Inventory 3,019 2,273 Professional service fees 2,161 983 Utilities 1,149 2,746 Other accrued liabilities 1,038 1,479 Total accrued expenses $ 14,517 $ 21,996 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt March 31, 2023 December 31, 2022 Rabo Loan $ 70,313 $ 71,250 Equilibrium Loan 66,252 66,252 GNCU Loan 50,000 50,000 Unamortized debt issuance costs (4,061) (3,280) Debt, net of issuance costs 182,504 184,222 Less current portion (3,685) (3,685) Long term, net $ 178,819 $ 180,537 On February 2, 2023, the Company amended the Rabo Loan to grant the lender a first priority security interest in the reserve deposit account with JPMorgan Chase Bank. In return, the lender waived one technical event of default existing with the Rabo Loan related to the Company’s failure to report the Company’s separation from certain of its former executive officers within the timeframe required by the Rabo Loan. On March 31, 2023, the Company further amended the Rabo Loan. The amendment modified the first day upon which the Company must comply with the leverage ratio covenant under the Rabo Loan from March 31, 2023, to June 30, 2023. The amendment also required that the Company deposit $2,000 into a designated reserve account on March 31, 2023 and make two additional deposits, each of $500 on April 30, 2023 and May 31, 2023, to secure the Company’s obligations under the Rabo Loan. The amendment also added covenants restricting the Company’s ability to incur certain debts and allows the lender to terminate the Company’s existing interest rate swap in the lender’s discretion, and requires that the Company reimburse the lender for certain third-party financial advisory expenses. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Leases For the three months ended March 31, 2023 the Company recognized $158 of operating lease expense in SG&A within the unaudited condensed consolidated statement of operations and comprehensive loss compared to $239 for the three months ended March 31, 2022. 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 2023 $ 494 2024 613 2025 701 2026 707 2027 591 2026 and thereafter 621 Total minimum payments required 3,727 Less: imputed interest costs (1) (713) Present value of net minimum lease payments (2) $ 3,014 Weighted-average imputed interest rate 7.21 % Weighted-average remaining lease term (in years) 5.5 ____________________________ (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 March 31, 2023 as current and non-current lease liability of $505 and $2,509, respectively. Supplemental cash flow information related to leases is as follows: Period Ended March 31, 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 183 $ 231 Operating lease right-of-use assets surrendered with the early termination of operating lease liabilities $ — $ (237) (b) 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. On September 24, 2021, the first of two federal securities class action lawsuits (captioned Ragan v. AppHarvest, Inc.) was filed by a purported stockholder of 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. On December 13, 2021, the court consolidated the two cases, and appointed a lead plaintiff. An amended complaint was filed on March 2, 2022. The amended complaint was brought as a purported class action on behalf of purchasers of the Common Stock between February 1, 2021 to August 10, 2021. The amended complaint named the Company and certain of its current officers as defendants, and alleged that the Company 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 operations at AppHarvest Morehead in the first half of 2021. In particular, the lead plaintiff alleged that the Company’s public statements during the class period were false and misleading because the Company failed to disclose issues related to its tomato harvest and employee training and retention. The amended complaint sought unspecified monetary damages on behalf of the punitive class and an award of costs and expense, including reasonable attorneys’ fees. On May 2, 2022, the Company filed a motion to dismiss the amended complaint. On July 25, 2022, the lead plaintiff filed a second amended complaint with substantially similar allegations. On September 23, 2022, the Company filed a motion to dismiss the second amended complaint. The lead plaintiff filed his opposition to the Company’s motion to dismiss the second amended complaint on November 22, 2022, and the Company filed its reply in support of its motion to dismiss the second amended complaint on January 13, 2023. Additionally, on March 11, 2022, a derivative complaint (captioned Michael Ross v. Kiran Bhatraju, et al.) was filed in the U.S. District Court for the Southern District of New York against certain of AppHarvest’s officers and directors. The derivative complaint restyles the federal securities class action allegations as a purported derivative claim on behalf of the Company against its officers and Board members for their alleged breaches of fiduciary duties in allowing the purported disclosure violations to occur. The derivative complaint seeks unspecified monetary restitution and disgorgement of profits, benefits, or compensation obtained by the defendants, an award of costs and expenses, including reasonable attorneys’ fees, and that the Court direct the Company to reform its corporate governance procedures. On June 15, 2022, another derivative complaint (captioned Zach Wester v. Kiran Bhatraju, et al.) was filed in the U.S. District Court for the Southern District of New York against certain of AppHarvest’s officers and directors. The Wester derivative complaint is substantially similar to the Ross derivative complaint. On July 22, 2022, the Ross and Wester derivative cases were consolidated, and are stayed until (1) the securities class action is dismissed with prejudice and all appeals related thereto are exhausted; (2) defendants file an answer in the securities class action; or (3) any party in the derivative cases no longer consents to the stay. On August 31, 2022, a third derivative complaint (captioned Kennedy v. AppHarvest, Inc., et al) was filed in the U.S. District Court for the District of Delaware against certain of AppHarvest’s officers and directors. The Kennedy derivative complaint is substantially similar to the Ross and Wester derivative complaints. On November 22, 2022, the Kennedy derivative case was stayed until (1) the securities class action is dismissed with prejudice and all appeals related thereto are exhausted; (2) defendants file an answer in the securities class action; or (3) any party in the derivative case no longer consents to the stay. We intend to defend these cases 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. (c) Purchase commitments |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The following table summarizes the before and after tax amounts for the various components of other comprehensive (loss) income for the periods presented: Three Months Ended March 31, 2023 March 31, 2022 Before Tax Tax After Tax Before Tax Tax After Tax Foreign currency $ — $ — $ — $ 125 $ — $ 125 Interest rate swap (1,442) — (1,442) 4,235 — 4,235 Total other comprehensive (loss) income $ (1,442) $ — $ (1,442) $ 4,360 $ — $ 4,360 During the three months ended March 31, 2023 and March 31, 2022, an income tax benefit (expense) of $378 and $(1,165) was recognized within other comprehensive income (loss), respectively. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based CompensationTotal stock-based compensation expense was $503 and $6,035 for the three months ended March 31, 2023, and March 31, 2022, respectively, of which $346, and $5,894, were included in SG&A and $157 and $141 were included in cost of goods sold for the three months ended March 31, 2023 and March 31, 2022 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company’s effective income tax rate was 0.7% and 0.4% for the three months ended March 31, 2023, and March 31, 2022, respectively. The variance from the U.S. federal statutory rate of 21% for the three months ended March 31, 2023 and March 31, 2022, was primarily attributable to increases in the Company’s valuation allowance largely driven by increases in the Company’s net operating loss carryforwards.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. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity 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: Three Months Ended March 31, 2023 2022 Anti-dilutive common share equivalents Stock options 1,279 2,727 Restricted stock units 2,576 5,683 Vested/Exercised, not issued — — Warrants 13,242 13,242 Total anti-dilutive common share equivalents 17,097 21,652 Three Months Ended March 31, 2023 2022 Numerator: Net loss $ (33,630) $ (30,635) Denominator: Weighted-average common shares outstanding, basic and diluted 131,124 101,321 Net loss per common share, basic and diluted $ (0.26) $ (0.30) Public Offering In February 2023, in order to raise capital to fund the Company’s planned expenditures and meet its obligations, the Company complete an underwritten public offering (the “Public Offering”) of 46,000 shares of Common Stock at a public offering price of $1.00 per share and received approximately $43,038 in net proceeds, after deducting underwriting discounts and commissions of $2,400, and offering costs of $562. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn May 5, 2023, the Company received a notice of default and reservation of rights (the “Notice of Default”) from CEFF II AppHarvest Holdings, LLC (“CEFF”), an affiliate of Equilibrium Controlled Foods Fund, LLC (“Equilibrium”) related to a credit agreement for the development of the Richmond CEA facility initially entered into on July 23, 2021, and subsequently amended (the “Equilibrium Loan”). The Notice of Default alleges certain defaults relating to increases in the construction budget and delays in construction made without Equilibrium approval, the existence of a mechanic’s lien, and alleged construction deficiencies. The Company intends to assert several defenses to the claims in the Notice of Default. The Company believes that certain of the alleged defaults have no basis and are without merit, and that there were no events of default, as defined within the Equilibrium Loan, as of and during the three-months ended March 31, 2023. In the event of default under the Equilibrium Loan, the Equilibrium Loan would entitle CEFF to exercise any of its rights and remedies under the Equilibrium Loan, including, inter alia, a demand for payment from the Company in its capacity of guarantor of the Equilibrium Loan, acceleration of the Equilibrium Loan and commencement for foreclosure proceedings on AppHarvest Richmond. If the Equilibrium Loan were to be accelerated, the Company would be required to repay the entire principal balance of the Equilibrium Loan on demand, plus other costs such as attorney’s fees, lender costs, and a prepayment premium. In addition, an event of default beyond applicable notice and cure periods under the Equilibrium Loan would trigger a cross-default under the Rabo Loan, which would entitle Rabo to exercise any of its rights and remedies under the Rabo Loan, including, inter alia, acceleration of the Rabo Loan and commencement for foreclosure proceedings on AppHarvest Morehead. If the outstanding debt under the Rabo Loan were to be accelerated, the Company would be required to repay the entire principal balance of the loan on demand, plus other costs such as attorney’s fees and lender costs. As of May 10, 2023, the Company has not received notice from Rabo alleging a cross-default under the Rabo Loan. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“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. |
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 primarily include the valuation of inventory. The Company’s results can also be affected by economic, political, legislative, regulatory, legal actions, and the global volatility and general market disruption and geopolitical tensions. Economic conditions, such as recessionary trends, inflation, supply chain disruptions, 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. |
Restricted Cash | At March 31, 2023, restricted cash includes $14,386 related to a master credit agreement with Rabo AgriFinance LLC (“Rabo”) for a real estate term loan (the “Rabo Loan”), $6,656 in contributions to a project and interest reserve account for AppHarvest Somerset for the loan agreement with Greater Nevada Credit Union (the “GNCU Loan”), and $2,408 for construction related to AppHarvest Berea. At December 31, 2022, restricted cash included $12,007 related to the Rabo Loan, $9,791 in contributions to the aforementioned project and interest reserve account, and $2,400 for construction related to AppHarvest Berea. |
Accounts Receivable | The Company’s trade accounts receivable are non-interest bearing and are recorded at the net realizable value. The allowance for doubtful accounts represents the Company’s best estimate of the amount of expected credit losses in existing accounts receivable. |
New Accounting Pronouncements | No 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. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue by Product Type | The following table presents the Company’s total revenue disaggregated by product type: Three Months Ended March 31, 2023 March 31, 2022 Tomatoes $ 10,966 $ 5,164 Strawberries 1,008 — Salad greens 846 — Cucumbers 191 — $ 13,011 $ 5,164 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Subject to Fair Value Measurements on a Recurring Basis | The table below presents the Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for each measurement: Fair Value as of: March 31, 2023 December 31, 2022 Balance Sheet Account Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets: Interest rate swap Other assets, net $ — $ 7,346 $ — $ 7,346 $ — $ 8,788 $ — $ 8,788 Total assets $ — $ 7,346 $ — $ 7,346 $ — $ 8,788 $ — $ 8,788 Liabilities: Private Warrants Private Warrant liabilities — 110 — 110 — 119 — 119 Total liabilities $ — $ 110 $ — $ 110 $ — $ 119 $ — $ 119 |
Schedule of 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: March 31, 2023 December 31, 2022 Exercise price $ 11.50 $ 11.50 Stock price $ 0.61 $ 0.57 Volatility 113.0 % 114.0 % Remaining term in years 2.83 3.08 Risk-free rate 3.81 % 4.22 % Dividend yield — — |
Schedule of Private Warrant Activity | The following table summarizes the private warrant activity for the three months ended March 31, 2023: Fair value of Private Warrants on December 31, 2022 $ 119 Fair value of Private Warrants converted to Public Warrants — Change in fair value of Private Warrants (9) Fair value of Private Warrants outstanding as of March 31, 2023 $ 110 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | March 31, 2023 December 31, 2022 Raw materials $ 6,307 $ 6,191 Growing crops 9,220 11,546 Finished goods 578 341 Total inventories, net $ 16,105 $ 18,078 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | March 31, 2023 December 31, 2022 Land $ 30,639 $ 29,877 Buildings 244,194 215,420 Machinery and equipment 116,934 114,407 Construction in progress 112,254 116,544 Leasehold improvements 4,688 4,688 Less: accumulated depreciation (32,375) (24,758) Total property and equipment, net $ 476,334 $ 456,178 |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | March 31, 2023 December 31, 2022 Utility deposits $ 6,253 $ 6,246 Investment in unconsolidated entity 5,000 5,000 Prepayments for fixed assets 750 1,284 Interest rate swap 7,346 8,788 Other assets 1,036 1,094 Total other assets $ 20,385 $ 22,412 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | March 31, 2023 December 31, 2022 Construction costs $ 4,108 $ 9,201 Payroll and related 3,042 5,314 Inventory 3,019 2,273 Professional service fees 2,161 983 Utilities 1,149 2,746 Other accrued liabilities 1,038 1,479 Total accrued expenses $ 14,517 $ 21,996 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | March 31, 2023 December 31, 2022 Rabo Loan $ 70,313 $ 71,250 Equilibrium Loan 66,252 66,252 GNCU Loan 50,000 50,000 Unamortized debt issuance costs (4,061) (3,280) Debt, net of issuance costs 182,504 184,222 Less current portion (3,685) (3,685) Long term, net $ 178,819 $ 180,537 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule 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 2023 $ 494 2024 613 2025 701 2026 707 2027 591 2026 and thereafter 621 Total minimum payments required 3,727 Less: imputed interest costs (1) (713) Present value of net minimum lease payments (2) $ 3,014 Weighted-average imputed interest rate 7.21 % Weighted-average remaining lease term (in years) 5.5 ____________________________ (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 March 31, 2023 as current and non-current lease liability of $505 and $2,509, respectively. |
Schedule of Lease Cost | Supplemental cash flow information related to leases is as follows: Period Ended March 31, 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 183 $ 231 Operating lease right-of-use assets surrendered with the early termination of operating lease liabilities $ — $ (237) |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Before and After Tax Amounts for the Various Components of Other Comprehensive (Loss) Income | The following table summarizes the before and after tax amounts for the various components of other comprehensive (loss) income for the periods presented: Three Months Ended March 31, 2023 March 31, 2022 Before Tax Tax After Tax Before Tax Tax After Tax Foreign currency $ — $ — $ — $ 125 $ — $ 125 Interest rate swap (1,442) — (1,442) 4,235 — 4,235 Total other comprehensive (loss) income $ (1,442) $ — $ (1,442) $ 4,360 $ — $ 4,360 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [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: Three Months Ended March 31, 2023 2022 Anti-dilutive common share equivalents Stock options 1,279 2,727 Restricted stock units 2,576 5,683 Vested/Exercised, not issued — — Warrants 13,242 13,242 Total anti-dilutive common share equivalents 17,097 21,652 |
Schedule of Earnings Per Share, Basic and Diluted | Three Months Ended March 31, 2023 2022 Numerator: Net loss $ (33,630) $ (30,635) Denominator: Weighted-average common shares outstanding, basic and diluted 131,124 101,321 Net loss per common share, basic and diluted $ (0.26) $ (0.30) |
Description of Business - Narra
Description of Business - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) a farm | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Area of land | 165 | ||
Number of facilities | farm | 4 | ||
Net loss | $ | $ 33,630 | $ 30,635 | |
Net cash used in operating activities | $ | 25,002 | 27,503 | |
Cash and cash equivalents | $ | 50,017 | $ 97,645 | $ 54,334 |
Accumulated deficit | $ | $ 397,590 | $ 363,960 | |
Morehead, Kentucky | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Area of land | 60 | ||
Berea, Kentucky | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Area of land | 15 | ||
Somerset, Kentucky | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Area of land | 30 | ||
Richmond, Kentucky | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Area of land | 60 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Class of Warrant or Right [Line Items] | |||
Interest costs capitalized | $ 2,226,000 | $ 1,648,000 | |
Allowance for credit loss | $ 0 | $ 0 | |
Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in shares) | 13,242,000 | ||
Exercise price of warrants (in dollars per share) | $ 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) | 1 | ||
Public Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in shares) | 12,191,000 | ||
Private Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants outstanding (in shares) | 1,051,000 | ||
Rabo Loan | Secured Debt | |||
Class of Warrant or Right [Line Items] | |||
Restricted cash | $ 14,386,000 | 12,007,000 | |
GNCU Loan | Equilibrium Loan | |||
Class of Warrant or Right [Line Items] | |||
Restricted cash | 6,656,000 | 9,791,000 | |
Equilibrium Loan | Equilibrium Loan | |||
Class of Warrant or Right [Line Items] | |||
Restricted cash | $ 2,408,000 | $ 2,400,000 |
Restructuring (Details)
Restructuring (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | $ 1,990,000 | |
Restructuring reserve | $ 0 | |
Severance and other benefits | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | $ 355,000 | 1,185,000 |
Legal and other costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and related cost, incurred cost | $ 805,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 13,011 | $ 5,164 |
Tomatoes | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 10,966 | 5,164 |
Strawberries | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 1,008 | 0 |
Salad greens | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | 846 | 0 |
Cucumbers | ||
Disaggregation of Revenue [Line Items] | ||
Net sales | $ 191 | $ 0 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Assets and Liabilities Subject to Fair Value Measurements on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Liabilities: | ||
Private Warrants | $ 110 | $ 119 |
Fair Value, Recurring | ||
Assets: | ||
Total assets | 7,346 | 8,788 |
Liabilities: | ||
Private Warrants | 110 | 119 |
Total liabilities | 110 | 119 |
Fair Value, Recurring | Interest rate swap | ||
Assets: | ||
Derivative asset | 7,346 | 8,788 |
Level 1 | Fair Value, Recurring | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Private Warrants | 0 | 0 |
Total liabilities | 0 | 0 |
Level 1 | Fair Value, Recurring | Interest rate swap | ||
Assets: | ||
Derivative asset | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Assets: | ||
Total assets | 7,346 | 8,788 |
Liabilities: | ||
Private Warrants | 110 | 119 |
Total liabilities | 110 | 119 |
Level 2 | Fair Value, Recurring | Interest rate swap | ||
Assets: | ||
Derivative asset | 7,346 | 8,788 |
Level 3 | Fair Value, Recurring | ||
Assets: | ||
Total assets | 0 | 0 |
Liabilities: | ||
Private Warrants | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | Fair Value, Recurring | Interest rate swap | ||
Assets: | ||
Derivative asset | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
GNCU Loan | Equilibrium Loan | |
Class of Warrant or Right [Line Items] | |
Debt instrument, fair value | $ 42,490 |
Fair Value Measurements - Signi
Fair Value Measurements - Significant Inputs to the Private Warrant Valuation (Details) | Mar. 31, 2023 yr $ / shares | Dec. 31, 2022 $ / shares yr |
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 | 0.61 | 0.57 |
Volatility | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 1.130 | 1.140 |
Remaining term in years | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | yr | 2.83 | 3.08 |
Risk-free rate | ||
Class of Warrant or Right [Line Items] | ||
Warrant liability, measurement input | 0.0381 | 0.0422 |
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 | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Increase (Decrease) In Fair Value Of Warrants [Roll Forward] | ||
Fair value of Private Warrants, beginning | $ 119 | |
Fair value of Private Warrants converted to Public Warrants | $ 0 | |
Change in fair value of Private Warrants | (9) | $ 1,329 |
Fair value of Private Warrants, ending | $ 110 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,307 | $ 6,191 |
Growing crops | 9,220 | 11,546 |
Finished goods | 578 | 341 |
Total inventories, net | $ 16,105 | $ 18,078 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (32,375) | $ (24,758) |
Total property and equipment, net | 476,334 | 456,178 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,639 | 29,877 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 244,194 | 215,420 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 116,934 | 114,407 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 112,254 | 116,544 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,688 | $ 4,688 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $ 7,641 | $ 3,039 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Utility deposits | $ 6,253 | $ 6,246 |
Investment in unconsolidated entity | 5,000 | 5,000 |
Prepayments for fixed assets | 750 | 1,284 |
Interest rate swap | 7,346 | 8,788 |
Other assets | 1,036 | 1,094 |
Total other assets | $ 20,385 | $ 22,412 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Construction costs | $ 4,108 | $ 9,201 |
Payroll and related | 3,042 | 5,314 |
Inventory | 3,019 | 2,273 |
Professional service fees | 2,161 | 983 |
Utilities | 1,149 | 2,746 |
Other accrued liabilities | 1,038 | 1,479 |
Accrued expenses | $ 14,517 | $ 21,996 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs | $ (4,061) | $ (3,280) |
Debt, net of issuance costs | 182,504 | 184,222 |
Less current portion | (3,685) | (3,685) |
Long term, net | 178,819 | 180,537 |
Rabo Loan | Secured Debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 70,313 | 71,250 |
Equilibrium Loan | Equilibrium Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 66,252 | 66,252 |
GNCU Loan | Equilibrium Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 50,000 | $ 50,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Rabo Loan - Secured Debt $ in Thousands | May 31, 2023 USD ($) | Apr. 30, 2023 USD ($) | Mar. 31, 2023 USD ($) deposit | Feb. 02, 2023 event |
Debt Instrument [Line Items] | ||||
Number of technical events waived by lender | event | 1 | |||
Debt instrument, amount contributed to reserve account | $ 2,000 | |||
Number of additional deposits made into reserve account | deposit | 2 | |||
Forecast | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, amount contributed to reserve account | $ 500 | |||
Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, amount contributed to reserve account | $ 500 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Dec. 13, 2021 lawsuit | Sep. 24, 2021 lawsuit | Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease expense | $ | $ 158 | $ 239 | ||
Loss contingency, new claims filed, number | lawsuit | 2 | 2 |
Commitments and Contingencies_2
Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Operating leases | |||
Remainder of 2023 | $ 494 | ||
2024 | 613 | ||
2025 | 701 | ||
2026 | 707 | ||
2027 | 591 | ||
2026 and thereafter | 621 | ||
Total minimum payments required | 3,727 | ||
Less: imputed interest costs | (713) | ||
Present value of net minimum lease payments | $ 3,014 | ||
Weighted-average imputed interest rate | 7.21% | ||
Weighted-average remaining lease term (in years) | 5 years 6 months | ||
Current portion of lease liabilities | $ 505 | $ 514 | |
Lease liabilities, net of current portion | 2,509 | $ 2,628 | |
Cash paid for amounts included in the measurement of operating lease liabilities | 183 | $ 231 | |
Operating lease right-of-use assets surrendered with the early termination of operating lease liabilities | $ 0 | $ (237) |
Derivative Financial Instrume_3
Derivative Financial Instruments - Before and After Tax Amounts for the Various Components of Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Before Tax | $ (1,442) | $ 4,360 |
Tax expense (benefit) | 0 | 0 |
Total other comprehensive (loss) income | (1,442) | 4,360 |
Foreign currency | Cash Flow Hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Before Tax | 0 | 125 |
Tax expense (benefit) | 0 | 0 |
Total other comprehensive (loss) income | 0 | 125 |
Interest rate swap | Cash Flow Hedges | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Before Tax | (1,442) | 4,235 |
Tax expense (benefit) | 0 | 0 |
Total other comprehensive (loss) income | $ (1,442) | $ 4,235 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Income tax expense (benefit) | $ 378 | $ (1,165) | |
Deferred tax asset, other comprehensive loss | $ 1,933 | $ 2,822 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 503 | |
SG&A | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | 346 | $ 5,894 |
COGS | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 157 | $ 141 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 0.70% | 0.40% |
Shareholders' Equity - Antidilu
Shareholders' Equity - Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive common share equivalents (in shares) | 17,097 | 21,652 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive common share equivalents (in shares) | 1,279 | 2,727 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive common share equivalents (in shares) | 2,576 | 5,683 |
Vested/Exercised, not issued | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive common share equivalents (in shares) | 0 | 0 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive common share equivalents (in shares) | 13,242 | 13,242 |
Shareholders' Equity - Earnings
Shareholders' Equity - Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net loss | $ (33,630) | $ (30,635) |
Denominator: | ||
Weighted-average common shares outstanding, basic (in shares) | 131,124 | 101,321 |
Weighted-average common shares outstanding, diluted (in shares) | 131,124 | 101,321 |
Net loss per common share, basic (in dollars per share) | $ (0.26) | $ (0.30) |
Net loss per common share, diluted (in dollars per share) | $ (0.26) | $ (0.30) |
Shareholders' Equity - Public O
Shareholders' Equity - Public Offering (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Feb. 28, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Subsidiary, Sale of Stock [Line Items] | |||
Fees incurred | $ 2,962 | $ 0 | |
Public Offering | |||
Subsidiary, Sale of Stock [Line Items] | |||
Net proceeds | $ 43,038 | ||
Fees incurred | 562 | ||
Over-Allotment Option | |||
Subsidiary, Sale of Stock [Line Items] | |||
Fees incurred | $ 2,400 | ||
Common stock, $0.0001 par value per share | Public Offering | |||
Subsidiary, Sale of Stock [Line Items] | |||
Number of shares issued (in shares) | 46,000 | ||
Share price (in dollars per share) | $ 1 |