Indoor farm start-up AppHarvest received a notice of foreclosure on its 60-acre farm in Richmond, KY.
According to court filings and media reports, Equilibrium Capital filed a lawsuit in Madison County, KY, saying it has “significant concerns” regarding the Richmond farm, and that AppHarvest failed to complete the facility on time, and on budget.
Equilibrium reportedly is asking the court to auction the greenhouse to satisfy the $66 million it is owed.
AppHarvest said in an SEC filing that it is working with Equilibrium, and its other creditor RaboBank to come to a resolution, but it:
“…cannot guarantee a resolution on a timely basis, on favorable terms, or at all. If the Company is unable to resolve the alleged defaults under the Equilibrium Credit Agreement or the Rabo Credit Agreement, it would have a material adverse effect on the Company’s liquidity, financial condition and results of operations, and could cause the Company to become bankrupt or insolvent.”
In May, media reports indicated AppHarvest, which completed a $127 million sale-leaseback agreement with Mastronardi Berea LLC for its Berea, KY, farm in December, is running out of money and needed more rounds of financing to continue operation.
It has been a rocky road for the AppHarvest, once valued at $3.7 billion, to get up and running.
After its first tomato harvest was largely unmarketable after failing to make USDA No. 1 grade, the company initiated a “Summer Refresh” and replanted “with lessons learned from our first season integrated into our game plan for the upcoming harvest,” said CEO Jonathan Webb, in a news release.
Yields continued to lag, though the company touted sales in Q1 of 2023 up 250 percent over the previous year.
In April, production was stopped at the Berea facility after Listera monocytogenes was discovered.
AppHarvest went public in February 2021 and has faced numerous challenges since then, including a class action lawsuit on behalf of investors.