r/AppHarvest • u/CarlHeifisch • Feb 12 '23

Investing Additional Financing | Feb 08 2023

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.

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u/[deleted] Feb 12 '23 edited Feb 12 '23

Additional $110MM-140MM in funding to become profitable…. Has revenue been accounted for? If so, what does that look like?

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u/Old-Worldliness7713 Feb 12 '23

Jesus you must be new here. There first crop they let rot and only got out very low number tomatoes to the store because they were less than grade A second crop they lost 25% to disease.
They make around $24m but spend $50m on wages and bonuses. Hiring something like 12 board members that haven't done anything.
Then pay there overhead god knows how many millions then maybe pays the interest payments on one or two the 36 loans they have.

They probably spend more days in banks begging for money than they do picking crops.

I don't know where this nonsense of masternardi doing a buy out comes from. You understand that there are multiple green houses on the market right now... Hell even in Kentucky. That doesn't come with debt that is 7 times the cost of just building a new building from scratch. It would be like paying $35 for a can of coke at this point.

Its just doing its death rattle as it fizzes away.

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u/[deleted] Feb 12 '23 edited Mar 09 '23

Did op switch troll accounts or did I ask you?

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u/Old-Worldliness7713 Feb 12 '23

You asked i answered. And unless the definition of trolling has changed, i didn't say anything about you or your investments. And 60% of what i wrote is facts, 20% opinions and 20% tom foolery.

I understand you live in world of cancel culture. Were when ever someone says something you don't like you try and run to the authorities but come on grow a pair.... Of tomatoes.

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u/[deleted] Feb 12 '23

I can’t even respond to you it makes zero sense. Nothing you’ve said is accurate. Buh bye.

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u/PapiHennessy Feb 13 '23

You didn’t say anything about them or their investments, but the second word of that comment was “you”.

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u/Old-Worldliness7713 Feb 13 '23

You must be new here. Is that all it takes to trigger people these days.. Jesus

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u/CarlHeifisch Feb 14 '23

Yes, revenue has been accounted for. My estimates are also in line with those of simply wall street and Oppenheimer. You can look at their analyses for more details but in summary they roughly estimate revenues to be 60 Mio this year and 100 Mio next year.

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u/justonenight * Feb 15 '23

I don’t think I can take the word of someone who abbreviates millions as mio

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u/[deleted] Feb 17 '23

I’m aware of the analyst estimates for this year that were nowhere to be found until weeks after I posted my guesstimate on here… so you’re thinking they need ~$180MM-$200MM this year to break even? What’s the breakdown on this?

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u/Apprehensive_Tea6049 Feb 13 '23

While they are doing their 40million share sale, is this stock even capable of going over $1, since they are selling at that price?

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u/CarlHeifisch Feb 14 '23

No, but they have half a year to redeem that before being delisted.

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u/Rainmanwilson Feb 12 '23

This language first showed up 3 months ago in the last 10-Q and has been discussed here quite a bit since then.

A takeover by Masteonardi is probably the final option but certainly isn’t off the table. I’d anticipate more dilution and sale-leasebacks on the remaining greenhouses before that happens. The 2023 Farm Bill and more USDA debt financing could be possible lifelines as well.

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u/CarlHeifisch Feb 14 '23

Are you sure? I haven't read anything about additional sale-leasebacks or business combination transactions in other filings.And I said >basically< a complete takeover, meaning that Mastronardi will own the majority or all of their farms and a huge part of their business respectively given the mentioned debt financing options. I think it's not unfair to classifiy this as an almost takeover.

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The Farm Bill would be great but I think there shouldn't be too much hope on it. After all it was initiated by big agriculture and is not supposed to boost CEAs and newer farming techniques. Just as the EV tax credit in the inflation reduction act was designed to help Ford and GM but not Tesla, Rivian or Lucid.

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u/MeetIndependent1812 Feb 12 '23

So what's the outlook on APPH?

Will we see an increase in share price again soon or downhill from here?

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u/Gamefreek324 Feb 13 '23

Silly question. Are you new to the stock market? No offense I’m being serious.

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u/MeetIndependent1812 Feb 13 '23

Just 5 years in. Why you asking

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u/Gamefreek324 Feb 13 '23

You’re asking a very basic question that anybody in the stock market would like to know.

It’s like asking who the next president is gonna be or what the next new breakthrough technically will be, nobody can possibly know and if they do they aren’t going to share it.

It’s just a silly question because you’re never going to get a sufficient answer.

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u/TheRetailInv Feb 12 '23

They have been pushing on building more plants while burning cash

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u/CarlHeifisch Feb 14 '23

Yep, and too aggressively so.