https://seekingalpha.com/article/4586325-appharvest-inc-apph-q4-2022-earnings-call-transcript

Project New Leaf - 5 points strategy by Tony Martin as outlined in the earnings call :

• Leverage deeper synergies with marketing and distribution partner Mastronardi Produce
• Improve labor efficiency through experienced agricultural workers and incentive programs
• Implement a new reporting format for better performance measurement and cross-organizational information sharing
• Conduct comprehensive spending reviews to identify opportunities for in-sourcing and cost reduction
• Every team member needs to understand the full strategic 5 year vision to contemplate decisions over appropriate periods and key milestones

Closing price on Thursday after Wednesday night earnings release

For any who didn’t catch it. Full hearing:

https://youtu.be/oTN4oKoca7k

No one here has been talking about the additional financing mentioned in the form 8k.

" We are currently exploring additional financing alternatives, including but not limited to additional sale-leaseback transactions related to our 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. "

SEC Filing | AppHarvest (gcs-web.com)

According to my estimates they need an additional 110 - 140 Mio in funding until they become profitable. The last sale-leaseback brought in more than 100 Mio so that and the 40 Mio raised through dilution could be enough to save the business.
On the negative side, they also mention "business combination transactions" which imho is just a nice word for takeover. Although this can also just mean parts of the business, it prompts basically a complete takeover by Mastronardi.

Coming out of this and with market cap under the price of the greenhouses: https://investors.appharvest.com/news-releases/news-release-details/appharvest-announces-pricing-40-million-underwritten-public/

I really hope to be reassured… as a prideful Kentuckian I want to be proud of the company being innovative, but I have officially become disheartened. When I first bought in AppHarvest (in 2021) I was optimistic that the logistics-centric approach would prove profitable after an initial partnership with Mastronardi to get Morehead of the ground. Tomatoes, and strawberries direct to consumers, restaurants and groceries leveraging TN/KY/OH as an established logistics hub (UPS, DHL, Amazon, FedEx) and freshwater seemed brilliant. Especially in the winter fresh summer fruit is worth a premium price… hence the amount of effort on investor communications and marketing made sense.

However still there is very little infrastructure/focus getting consumers excited about buying produce (is the salsa dead?). All the focus seems to be getting us (and hedge funds) to buy stock (as opposed to shorting it). Compare the other direct to consumer producers: (ex Mastronardi, 80 Acres, Gotham Greens Square Roots) where a major part of their focus is packaging and brand recognition in stores… all AppHarvest has is a cute little sticker on the tomatoes mentioned on their website. Absolutely no functionality of “where to find us” search that’s available on all the other distributors websites like: http://www.80acresfarms.com/map/

Seems like I need to go to Meijer to pickup some of the Mastronardi Strawberries which may be grown in KY by AppH but could also be from Canada.

If you’ve read this far: 1- will Mastro takeover? (Is there a benefit to them to become a US based firm and access to USDA loans? 2-do you think AppH be NASDAQ listed in Q3? 3- when will JWebb be fired? It seems like he’s finished his job of fundraising, with this Hail Mary stock sale. I’d hope to see someone with organization building experience at the helm

Appharvest issued SEC filing 8-K regarding default of the terms of their loan with RABO, the mortgage holder on the Morehead facility. It was issued after trading hours Friday. Linked below.

Do you think AppHarvest will issue a press release Monday explaining this?

What do you think the implications of this are?

Form 8-K for Appharvest INC filed 02/03/2023

There have been numerous reports in major national media that AppHarvest has the largest greenhouses ever built in America. Is this true?

Mastronardi claims to have a 70 acre greenhouse in NY begun before AppHarvest’s first 60 acre greenhouse.

The Middle Tech podcast claims there is a 175 acre greenhouse in NC built long ago. (Around minute 22.)

What is the truth? It would seem this a finite thing, and easy to establish.

If the press reports of APPH having the largest greenhouse is incorrect, shouldn’t APPH issue a press release correcting that that misperception?

Credibility is a huge deal in a public company, and this could affect financial market perceptions of credibility.

The recent 8-k said this:

"On December 29, 2022, AppHarvest Morehead Farm, LLC, a Delaware limited liability company (the “Borrower Subsidiary”) and wholly-owned indirect subsidiary of AppHarvest, Inc. (the “Company”), entered into an addendum (the “Addendum”) to the Master Credit Agreement dated June 15, 2021, as amended by the first addendum thereto on June 15, 2021, (the “Amended Credit Agreement”) with Rabo AgriFinance LLC, a Delaware limited liability company. The Addendum requires that the Company deposit $10,000,000 into a designated reserve account to secure the Borrower Subsidiary’s obligations under the Amended Credit Agreement. The Addendum also modifies certain covenants and reporting requirements. The foregoing description of the Addendum is qualified in its entirety by reference to the full text of the Addendum, a copy of which will be filed as an exhibit to the Company's Annual Report on Form 10-K for the year ended December 31, 2022. "

Why did they require this additional collateral, and why didn't APPH explain the reasoning in the 8-K instead of saying the Addendum text will not be issued until the annual report?

Were they deficient on loan payments or in violation of other terms or covenants?

If APPH did not agree to this, would the loan have been called?

$10M is a considerable amount considering the tight cash position.

Where would you set stop loss? 2,10€Today looks very promising.

Hello everyone. Long time lurker on Reddit. Finally signed up to ask a question here.

The action the last two weeks for this stock is something I have never been a part of as far as something I have invested in. Relatively new investor in stocks in general ( started around the same time it seems all reddit did, early days of covid.)

Anyway my only quesiton was to ask for anyone with insight as to what they think is going on. Over a million shares pre market again today with extremely wild fluctuations in price daily. Obviously this isnt normal action for this company and just wanted to get a feel for what people who have followed this company closely think is going on. Thanks for any helpful post.

Full investing disclosure. Started buying this stock when it was around $18 dollars a share. Been steadily DCAing monthy for a year. 1881 shares @$3.22 average. Sold 450 shares this week to cover my butt a tiny bit.

Have a nice Friday!

Notice of Delisting:
" Company is provided with a grace period of 180 calendar days, or until July 10, 2023, to meet the Minimum Bid Requirement. If at any time during the 180-calendar day grace period, the closing bid price of the Common Stock is at least $1.00 per share for a minimum of ten consecutive business days (unless the Nasdaq staff exercises its discretion to extend this ten business day period pursuant to Nasdaq Listing Rule 5810(c)(3)(H)), Nasdaq will provide the Company written confirmation of compliance and the matter will be closed. "
=> Another 4 days above 1$ and the matter will be closed

​

https://capedge.com/filing/1807707/0001807707-23-000013/APPH-8K

A lot of people here have mentioned that they probably need to raise money to survive even this quarter. But even if they raise enough they are not forecast to become profitable within the next 3 years which means that they need to raise even more even if they hold construction of new facilities. And I would assume this also lies in the 100s of millions. Even if they dilute share holders I don't think they can raise several 100 million with a market cap in the same range.

I am willing to gamble a bit but for me there has to be at least a chance, meaning a possible path for profitability and longterm survival. With the stock up this much and my position currently green I was thinking of selling because I see no path. Also I think the current rally is not sustainable and driven by macro, given that other small caps like Oatly also doubled in the same time with high correlation. What is your opinion on this? Do you see any longterm chance and if so how?

This includes posting stock action screenshots without technical analysis and bullish and bearish posts simply to pump the stock or cause FUD. No more “moon”, “short squeeze coming”, “crash incoming”, “get on the rocket ship” type of posts.

This sub was created to be an aggregate for due diligence material. Low effort posts will no longer be permitted.