$127 million sale-leaseback of Berea greenhouse

COFRA Holding and Mastronardi acquire AppHarvest's Berea greenhouse

On December 27, 2022, AppHarvest announced that it has finalized the sale-leaseback of its Berea, Kentucky, lettuce greenhouse for just over $127 million and has opened its 60-acre greenhouse in Richmond, Kentucky. AppHarvest has entered an agreement with Mastronardi Berea LLC, a joint venture between Mastronardi Produce
and COFRA Holding, for the sale-leaseback of its Berea greenhouse for leafy greens for approximately $127 million with an initial lease rate of 7.5% over 10 years, with four renewal terms of five years each.

Mastronardi Produce is AppHarvest’s exclusive marketing and distribution partner and has sold AppHarvest’s produce, including tomatoes, leafy greens, and strawberries, into some of the top national grocery store chains, restaurants, and food service outlets. Some of the proceeds of the sale-leaseback will be used to repay the previously announced $30 million bridge loan from Mastronardi Produce to AppHarvest and the first two years of prepaid rent at the Berea facility. Additional details on the sale-leaseback are available on the associated Form 8-K filed with the SEC.

“The AppHarvest team has worked relentlessly this year to get the four-farm network operational, and those efforts have paid off with the quadrupling of farms in our network and diversifying our crop set,” said AppHarvest Founder & CEO Jonathan Webb. “The team is now focused on operations to ramp up production and revenue from the four high-tech farms.”

AppHarvest also announced that its Richmond, Ky., farm is officially open and has begun growing Campari brand tomatoes. The first harvest at Richmond is anticipated in early January, which will mean that for the first time, AppHarvest is expected to have commercial shipments coming from each facility in its four-farm network. Half of
the Richmond farm is currently planted, and the other half is expected to be planted in 2023.

In what the company believes is the largest simultaneous build out of controlled environment agriculture infrastructure in U.S. history, the company has quadrupled the number of farms operating in its network in 2022. Already in 2022, the company has opened two greenhouses —a 30-acre farm in Somerset, Ky., for strawberries and cucumbers and a 15-acre farm in Berea, Ky., for leafy greens. AppHarvest is shipping strawberries under the “WOW® Berries” brand and washed-and-ready-to-eat leafy greens under the “Queen of Greens®” brand.
In its third growing season, the AppHarvest Morehead farm has further diversified its crop, adding snacking tomatoes sold under the Sunset brand as “Flavor Bombs®” and “Sugar Bombs®.” Morehead began its harvesting this season ahead of schedule.

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