AppHarvest Announces Financial and Operational Transition

AppHarvest, a sustainable food company, has revealed its plans for a financial and operational transition to reduce outstanding liabilities. The announcement caused AppHarvest shares to plummet by 67% to 11 cents, hitting a 52-week low. Over the past year, the stock has experienced a staggering decline of 97%.

Despite this setback, AppHarvest assures that its business operations will continue as usual at its farms. The company remains committed to shipping products to grocery store chains, restaurants, and food service outlets.

To facilitate its transition, AppHarvest has filed voluntary petitions for protection under chapter 11 of the U.S. bankruptcy code in the U.S. Bankruptcy Court for the Southern District of Texas. This strategic move aims to secure the necessary support and resources during this crucial period.

Equilibrium, the company's largest secured creditor, has shown its commitment by offering $30 million of debtor-in-possession financing. This funding will be instrumental in supporting operations at AppHarvest's Morehead, Richmond, and Somerset farms throughout the Chapter 11 process. However, the approval of the court is required for this financing arrangement.

In addition to financial measures, AppHarvest is exploring opportunities to transition its AppHarvest Berea operations to Mastronardi Produce, its distribution partner, or one of its affiliates. In exchange for this transition, AppHarvest will receive $3.75 million, along with additional incremental funding and support for its restructuring plan.

With this strategic roadmap in place, AppHarvest is determined to navigate this transitional phase successfully and emerge stronger than before.