February 10, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Large-scale, sustainable indoor farming and certified B Corp, AppHarvest, announced it has commenced a $40 million underwritten public offering of its common stock.

AppHarvest also stated it intends to grant the underwriters a three-day option to purchase up to an additional 15 percent of the shares of its common stock offered in the public offering on the same terms and conditions.

The company stated that the net proceeds of the offering are expected to be used for working capital and in support of general corporate purposes. 

AppHarvest’s tech-driven indoor farms grow high-quality produce using methods that use 90 percent less water than traditional field production (and 100 percent recycled rainwater), giving its non-GMO, chemical-free fruits and vegetables a competitive advantage against low-cost foreign imports.

From its location in Central Appalachia, AppHarvest’s 60-acre CEA facility (one of the largest in the world) is within less than a day’s drive to 70 percent of the entire U.S. population, lowering diesel fuel transportation costs by 80 percent.

It was in February 2021 that the company announced it had completed its merger with SPAC Novus Capital to begin trading on the Nasdaq at a valuation of $1 billion. At the time, the move provided AppHarvest $475 million, including $375 million fully committed common stock PIPE at $10 per share anchored by existing and new investors Fidelity Management & Research Company, Inclusive Capital, Novus Capital Corporation, and others.

“The capital we raised in this transaction will further advance our mission of transforming agriculture by developing large-scale sustainable food production in the heart of Central Appalachia,” said Jonathan Webb, founder & CEO of AppHarvest at the time.

“We currently import nearly half of all fresh vine crops sold in the U.S. To create a more resilient food system, we must farm more efficiently and closer to where the food is needed.”

In January 2021, the company announced the success of its first harvest of chemical pesticide-free, non-GMO and sustainably-grown beefsteak tomatoes which were shipped to select retailers such as Kroger, Publix, Walmart, Food City, and Meijer.

Today, AppHarvest operates four indoor farms — all in Kentucky — totaling 165 acres under glass: its 60-acre flagship farm in Morehead, producing tomatoes; a 15-acre indoor farm in Berea, producing salad greens; a 30-acre farm in Somerset, producing strawberries and cucumbers; and another 60-acre farm in Richmond, also producing tomatoes.

The choice to focus its business development in Appalachia is not an accident. 

Twenty-five percent of the people living in Appalachia are living in poverty. Appalachia’s dominant industry, the coal industry, has fallen from favor due to its environmental impact, with employment falling to its lowest point since 1988.

“AppHarvest has positioned Kentucky as a leader in the AgriTech industry, created hundreds of good-paying jobs for our people and pushed through and thrived during some of our most difficult times,” said Kentucky State Governor Andy Beshear in June 2021.

“Even as a pandemic raged, Jonathan Webb and his team built one of the biggest indoor farming operations anywhere using one of the most advanced LED-lighting systems ever created. We know the jobs and investments of the future will flow to those who can meet these challenges, so why not us? AppHarvest is making it happen.” 

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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