A pioneering operator becomes a public AgTech company

Added on 16 February 2021

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A pioneering operator becomes a public AgTech company

AppHarvest ("the Company"), a leading AgTech company and Certified B Corp building and operating some of the country's largest high-tech indoor farms to sustainably grow affordable, nutritious, chemical pesticide-free non-GMO fruits and vegetables at scale using 90 percent less water than traditional open-field agriculture and 100 percent recycled rainwater, and Novus Capital Corp. (Nasdaq: NOVS) ("Novus Capital"), a publicly traded special purpose acquisition company, announced today that they have completed their previously announced business combination and related charter amendments. The resulting company is named AppHarvest, Inc. and its common stock and warrants will commence trading on Nasdaq under the new ticker symbols "APPH" and "APPHW," respectively, on Monday, February 1, 2021. AppHarvest has qualified to list on the Nasdaq Global Select Market, which is the highest of three tiers based on certain financial, liquidity and corporate governance requirements that the company met. The combined company will be led by Jonathan Webb, AppHarvest's Founder & Chief Executive Officer.

The Boards of Directors of AppHarvest and Novus Capital unanimously approved the transaction, and the transaction was also approved at a special meeting of Novus Capital shareholders on January 29, 2021.

Company Overview

AppHarvest, committed to ESG principles and social impact, is redefining and transforming American agriculture by developing modern, large-scale and efficient indoor farms in Central Appalachia, a water-rich region strategically located within a day's drive of approximately 70% of the U.S. population. AppHarvest has strong relationships with the leading agricultural and construction firms and universities in the Netherlands, the world's leader in high-tech controlled environment indoor farms. The Netherlands, despite a land mass similar in size to Eastern Kentucky, is the world's second-largest agricultural exporter behind only the United States due to its extensive network of controlled environment agriculture facilities. These relationships allow the Company to leverage the most recent proven technologies in an effort to sustainably increase crop yields, improve access to nutritious, non-GMO food, build a consistent and safe U.S.-grown food supply for national grocers, and increase investment and employment in Appalachia. The Company operates a 60-acre controlled environment agriculture facility in Morehead, Kentucky one of the largest high-tech greenhouses in the world and has an active development pipeline for up to 12 large-scale indoor controlled-environment farm projects through 2025.

AppHarvest has achieved several key commercial milestones since announcing the business combination on September 29, 2020:

ˇ January 19, 2021: Announced first-ever harvest of Beefsteak tomatoes from its 60-acre Morehead, Kentucky, flagship indoor farm, and began shipping to select national grocery retailers. The Morehead facility alone is expected to produce about 45 million pounds of tomatoes annually.

ˇ October 26, 2020: Announced the start of construction on a third high-tech controlled environment agriculture facility in Central Appalachia and expansion into growing leafy greens. Located in Berea, Kentucky, the farm, when complete, will be 15 acres.

ˇ October 20, 2020: Announced the start of construction on a second high-tech controlled environment agriculture facility in Madison County, Kentucky. The farm, when complete, will exceed 60 acres and will double AppHarvest's existing growing space in Central Appalachia.

"Today marks an important milestone for AppHarvest and for American agriculture as we drive the next chapter of our growth as a public company," said Jonathan Webb, Founder and Chief Executive Officer of AppHarvest, "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. 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."

David Lee joined AppHarvest as president on Jan. 25, having previously served in the CFO and COO roles at Impossible Foods and bringing decades of experience across retail and consumer industries driving business transformation and optimizing organizational effectiveness from Del Monte to Zynga to Impossible Foods. He will focus on accelerating infrastructure buildout, strengthening marketing and establishing effective product development processes as AppHarvest works to build an iconic brand that disrupts traditional agriculture.

"In a marketplace where consumers are more knowledgeable and conscientious than ever about the food they buy, we have a tremendous opportunity at AppHarvest to build a trustworthy sustainable foods brand that people care about," said AppHarvest President David Lee. "Customers are craving better quality food optionsand ones they can feel better about because the company is socially conscious and environmentally responsible. With our first harvest already underway and produce shipping to major grocery outlets, we reiterate our full-year 2021 guidance."

Supported by early sales from its first harvest, AppHarvest reaffirms guidance on full-year 2021 net revenue of $21 million and Adjusted EBITDA of ($41) million provided during its Analyst Day presentation on December 15, 2020. Note, Adjusted EBITDA excludes stock-based compensation and other non-cash items.

"Jonathan Webb and his talented team at AppHarvest have established a unique platform for rapid growth and value creation that will be further strengthened by this transaction and entrance into the public markets," said Bob Laikin, Chairman of Novus Capital. "We look forward to seeing the team capitalize on the attractive opportunities that lie ahead given the heightened investor focus on ESG initiatives and the secular shift to plant-based foods, as AppHarvest continues to redefine American agriculture."

Transaction Overview

As a result of this transaction, AppHarvest has received approximately $475 million of gross proceeds, including $375 million from the fully committed common stock PIPE anchored by existing and new investors - including Fidelity Management & Research Company, LLC, Inclusive Capital and Novus Capital. The transaction provides AppHarvest over $435 million of unrestricted cash, which will primarily be used to fund operations, including building additional high-tech controlled environment indoor farms, support growth and for other general corporate purposes.

A more detailed description of the transaction terms will be included in a current report on Form 8-K to be filed by AppHarvest, Inc. with the U.S. Securities and Exchange Commission ("SEC"), as well as Novus Capital's previous filings with the SEC. Once AppHarvest's common stock and warrants commence trading on Nasdaq under the new ticker symbols "APPH" and "APPHW," the Novus Capital units ("NOVSU") will cease trading on Nasdaq.

Cowen served as sole placement agent and capital markets advisor, and Blank Rome LLP served as legal advisor to Novus Capital. Cowen served as financial advisor and Cooley LLP served as legal advisor to AppHarvest.

Source and Photo Courtesy of Urban Ag News