AppHarvest Inc. (Nasdaq: APPH) announced a $40 million public offering this week.
The offering will include 40 million shares of the Morehead, Kentucky-based company's stock, priced at $1 per share, according to a news release. AppHarvest has also granted the underwriters a 30-day option to purchase up to six million additional shares of common stock at the public offering price, less underwriting discounts and commissions.
The offering is expected to close on or about Feb.14, subject to customary closing conditions. AppHarvest expects to use the net proceeds — underwriting discounts and commissions and estimated offering expenses will be deducted from the $40 million — of the offering for working capital and general corporate purposes, the release states.
AppHarvest raised $475 million in net proceeds through its initial public offering in 2021. According to Investopedia, secondary public offerings after an IPO may dilute existing shareholders.
Shares of APPH are trading at about 90 cents as of 2 p.m. Friday, down more than 30% from when the market opened. As I previously reported, AppHarvest was at risk of being delisted from the Nasdaq stock exchange because it did not meet a minimum share price requirement of $1, but in January, the company's price per share increased to $2.64, according to Yahoo Finance.
Access to capital has been an ongoing issue for AppHarvest, which recently sold its Berea, Kentucky, farm to Mastronardi Berea LLC — a joint venture between Mastronardi Produce and COFRA Holding — for $127 million in a sale-leaseback transaction. It got $57.5 million from the transaction, I reported in late December.
AppHarvest reported net sales of $524,000 in the third quarter ending Sept. 30, down slightly from its $543,000 in net sales for the comparable period last year. The company had a net loss of nearly $24 million for the quarter, which is greater than the $17.3 million it lost in the same quarter in 2021. Its net loss per common share was 23 cents in the quarter.
In the first nine months of 2022, AppHarvest recorded a net loss of $83.3 million, compared to $77.8 million in the first nine months of 2021.
