Good day, and thanks for standing by. Welcome to the AppHarvest Q2 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Kaveh Bakhtiari. You may begin. Thank you for joining us on the AppHarvest second quarter 2022 earnings call. I'm Kaveh Bakhtiari, VP Investor Relations for AppHarvest. Joining me today are several members of the senior management team, including Jonathan Webb, Founder and CEO, David Lee, Board Member and President, Julie Nelson, Chief Operating Officer, and Loren Eggleton, Chief Financial Officer. The earnings release is available on our investor website at investors.appharvest.com. Please note that there is no slide presentation accompanying today's call. We'll begin with prepared remarks from the team, then we'll open the call to questions. Before we start, I'd like to remind you that comments today regarding the company's future business plans, prospects, and financial performance are forward-looking statements that we make pursuant to the safe harbor provisions of the securities laws. These statements are made based on management's current knowledge and assumptions about future events, and they involve risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, the company disclaims any intent or obligation to update them. For additional information on important factors that could affect these expectations, please see our most recent SEC filings. Now I'd like to turn the call over to Jonathan. Thanks, Kaveh. Before I go into detail on the quarter, let me start by saying thanks to those who have made inquiries about our well-being and contributed to relief efforts around the devastation caused by massive flooding in Eastern Kentucky. Though we have not identified any damage to our facilities from flooding, we recognize that the impact of the region is massive and will require months, if not years, to recover. We are organizing mission days with our team to volunteer for relief efforts. I encourage those of you who would like to help consider donations, direct those towards Team Eastern Kentucky Flood Relief and the Foundation for Appalachian Kentucky's Crisis Fund. You can find more details and ongoing opportunities to support recovery efforts by following our social media on LinkedIn, Twitter, Facebook, and Instagram. Turning now to the business. The AppHarvest team made significant strides forward in the second quarter. We continued to deliver improved operating results at our farm in Morehead, Kentucky. We also continued making progress on our farm development that will quadruple our facilities by opening three new farms by the end of the year. Those farms will diversify our crops by adding salad greens, berries, and cucumbers, as well as more tomatoes. We also have been making good progress on securing non-dilutive financing to support our expansion, including the recently announced $50 million in USDA-backed loans. Turning to the second quarter. We sold 6 million lbs of tomatoes from the Morehead farm for $4.4 million, a 39% increase in quarterly net sales year-over-year. Our team continues to make progress in improving quality, reducing distribution fees, and in selling higher-priced varieties, which Julie will review in more detail. Importantly, this quarter, we entered the home stretch for our new farm development. We continue to expect the Berea, Richmond, and Somerset Farms will be operational by year-end, with Berea set to begin its first commercial shipments of salad greens soon. These farms have generated a lot of interest and enthusiasm from top national customers who have been visiting them this quarter. In Q4, Richmond and Somerset are expected to begin shipping tomatoes and strawberries as well. This quarter, we've continued to focus on operational execution to maximize quality and yield of our produce and to expand our high-tech farm network to serve the growing demand for more sustainable fresh fruits and vegetables in the U.S. Demand for locally sourced produce has continued to increase, and the recent headlines, including inflation, water use restrictions, and geopolitical instability, have only served to add to that interest. Finally, continuing to do business in a way that's better for people and planet remains a top priority of ours as one of only a handful of publicly traded public benefit corporations that is also B Corp certified. On June 1, we announced recertification of our B Corp status with a score of 95.4, which represents a 15% improvement over our initial certification in 2019. Additionally, we earned a Living Wage Certified company designation and established a board of directors-level sustainability and oversight committee. I'm proud of our continued commitment and strong track record in this area, especially during a time of increased production and farm network expansion. I encourage all AppHarvest stakeholders to read more about our progress in this area in our third sustainability report that we issued in June. I will now ask our President, David Lee, to share more detail on Q2 results. David? Thanks, Jonathan. The AppHarvest team continued to raise the bar in the second quarter, delivering strong operational performance at Morehead that resulted in a 39% increase in net sales year-over-year with improved labor and quality trends compared to the prior year. We also continued to make impressive progress with our farm network expansion. All while navigating an economic environment characterized by challenging supply chain and inflationary issues. Importantly, we also delivered on one of our key priorities to fund our growth with non-dilutive means by closing on $50 million across two loan guarantees from the USDA late last week that will fund completion of our 30-acre Somerset berry farm. Loren will have more to share on the balance sheet in a moment, but I'm pleased with our team's ability to secure lower cost sources of funding in a higher cost lending environment. In a period of global geopolitical conflict, water resource limitations, and food security disruptions, we believe AppHarvest's business model positions us well against incumbents to grow and sell domestically with the three new farms we expect to bring online this year. We also have made progress on the previously- announced potential joint venture FarmCo. If completed, we expect this deal to give AppHarvest a broader national footprint and additional network scale for more attractive unit economics. We are also in exclusive negotiations with an institutional investor, and if FarmCo closes, it is expected to have the benefit of additional committed capital for expansion. With the backdrop where the domestic need for controlled environment agriculture continues to grow and where it's become clear that the U.S. remains significantly underbuilt, our growth at AppHarvest is limited in large part only by available capital and the timeline to build new farms. As one of the largest CEA operators in the U.S., we believe that we are at an advantage when it comes to meeting the consistent consumer demand for fresh, local produce as our facilities harvest almost year-round through the coldest months of the year. Top grocery chains and restaurants like the more consistent volume and more consistent quality that CEA can offer. We've made substantial progress this year in ramping up the net sales and operational execution at Morehead and in expanding our commercial scale with the three new farms that we expect to open this year. On the back of this progress, the structuring, financing, and new project pipeline into potential FarmCo joint venture, if completed, is a significant achievement for our shareholders. The fundamental improvements we're driving in the core business are key to our success, and with more detail on that piece, I'd like to ask our Chief Operating Officer, Julie Nelson, to review operational highlights. Julie? Thank you, David. In the second quarter, the harvest from our second growing season at Morehead improved on several key operating metrics. We achieved an increase in percent of premium grade tomatoes, reduced our distribution fee percentage versus the prior year and quarter, increased our labor productivity, and sold 6 million lbs of tomatoes at a net sales price of $0.72 /lbs. This represents a 39% increase in quarterly net sales year-over-year. The team drove these results through additional sales of higher priced tomato varietals compared to last year, stronger overall tomato market pricing, and enhanced training and productivity. Taken together, these improvements helped us to offset some of the 15%-20% impact to our overall yield from the plant health issue that we reported in Q1. That condition was the key driver in reducing our overall production in the quarter by 2.6 million lbs versus the prior year. The ultimate effect of this issue was slightly higher than our original forecast of 10%-15% of our 2022 yield as we removed some extra plants in the affected area in an abundance of caution. Additionally, we made the strategic decision not to extend the harvesting run of the replanted rows any longer than the rest of the original second season crop to maximize the benefits from the third growing season, which we'll begin planting soon. This means we no longer expect the shift of a portion of our second quarter sales and production into the third quarter, which has some impact to our overall net sales outlook that Loren will cover in greater detail in a moment. Operationally, we continue to see steady improvements in our day-to-day performance. Our percentage of premium tomatoes increased versus the same quarter last year as enhanced training and protocols are making an impact. We're seeing steady improvements in productivity, both on the growing and pack house sides, and this has translated to reduced overtime. I'm pleased with our progress, which I believe still has room for improvement, including from network efficiencies as we deploy key learnings across our three new facilities as they come online. As a last point, we increased our percentage of direct shipments by over 5 percentage points versus the first quarter. Shipping direct is key to serving large national customer accounts at a high level, and it's also a tailwind to net sales as it lowers transportation costs. The percentage of direct shipments may fluctuate from quarter- to- quarter due to commercial factors, but it's an option that's increasingly available to us as our quality and execution improve. For comparison, our percentage of direct shipments was in the single digits when we were just starting out last year. Now, I'll turn the call over to our CFO, Loren Eggleton, who will review our financial performance and outlook in greater detail. Loren? Thanks, Julie. I'll start by briefly reviewing our second quarter results, give an update on our development progress, and then discuss the 2022 outlook. We achieved second quarter net sales of $4.4 million as compared to $3.1 million in the same quarter last year. The increase was driven by selling higher priced tomato varieties compared to last year. A stronger overall market for tomato pricing and enhanced training and productivity improvements at Morehead, resulting in a lower distribution fee. The second quarter net loss of $28.7 million was an improvement versus the prior year net loss of $32 million, despite preparation costs related to the opening of our three new farms expected to be online by year-end. Despite the investments in expansion and growth this year, we trimmed our second quarter adjusted EBITDA loss to $17.9 million from $22.6 million last year, as we were able to more than offset that increase through the restructuring we announced in February. Through June, we realized savings of approximately $5.3 million versus our prior baseline and continue to expect annual SG&A savings of approximately $16 million on a run rate basis. Let me turn next to our progress on farm development and financing. Construction continues on our previously announced CEA facilities that will quadruple our farm network. The three additional farms are expected to be operational by the end of the year. The 15-acre Berea, Kentucky, salad green facility is about 91% complete. The 60-acre Richmond, Kentucky, tomato facility is approximately 86% complete, and the 30-acre Somerset, Kentucky, berry facility is about 84% complete. We expect to ramp up each facility with a phased approach that brings on additional acreage over time, similar to the opening of the full 60 acres at Morehead. We expect that the first phased opening of this kind will be at the Berea facility starting this quarter. Turning to the balance sheet. We entered the quarter with cash and cash equivalents of $50.9 million, with about $40 million in availability remaining on our credit facilities. During the quarter, we sold 3.1 million shares for $8.8 million via the committed equity facility with B. Riley Principal Capital that we established late last year. In terms of capital expenditures for the full year 2022, we estimate that approximately $85 million-$90 million in remaining CapEx, which accounts for the completion of the three construction projects underway. Of this total, we anticipate that approximately $30 million remains to be funded with balance sheet cash as we draw upon our existing credit line arrangements with Equilibrium and the recently closed USDA loan guarantees to satisfy the majority of CapEx. We estimate the USDA loan will release cash collateral from our JPMorgan facility and add approximately $28 million in net cash to our end of quarter cash balance of $51 million, for a total of approximately $79 million in pro forma cash balance. The estimated $30 million in balance sheet cash needed to satisfy our 2022 CapEx would be a draw on this amount. With the addition of the USDA loan guarantees, we strengthened our set of available financing options. In addition to the availability on the committed equity facility with B. Riley, we also intend to realize liquidity from our Berea salad greens farm, the last facility in our network that remains unlevered as of today. Now let me turn to our full year 2022 net sales and adjusted EBITDA outlook. We now expect to be closer to the lower end of our original guidance range and have tightened our full year 2022 net sales outlook to $20 million-$25 million, reflecting incremental yield impact from the plant health issue at Morehead and potential supply chain delays that could affect the timing of initial commercial shipments from our three new farms. Regarding adjusted EBITDA loss, we also tightened our range around the lower end of guidance for the year and now expect a loss of $80 million-$85 million, reflecting the adjustments to the net sales outlook, higher cost of goods sold, inflationary impacts, and the end-of-season maintenance improvements Julie mentioned. With that, I'll turn it back over to our VP of Investor Relations, Kaveh Bakhtiari. Thank you, Loren. Operator, we'll now begin to take questions. Certainly. As a reminder to ask a question, please press star one one on your telephone. Please stand by while we compile the Q&A roster. One moment. Our first question comes from Ben Theurer of Barclays. Your line is open. Yeah, thank you very much and good afternoon. First of all, hopefully you and your families were all safe with the floodings. Hopefully it's not gonna get worse in coming weeks. Now to the business, just on the outlook and maybe a little bit of clarification if you can help us frame some of the changes. I understand that you're obviously facing some of maybe potential supply chain constraints to get on time with those three facilities that need to be up and running as maybe not on as much on time as you were initially hoping for, which is obviously out of control. If we look into some of the revisions on top line and then ultimately into the EBITDA number, how much can you attribute to external factors, just the delays of supply chain and so on, and how much would you think is an internal issue that's being caused just by potentially inefficiencies or certain delays in the ramp up? To better understand how much was external, how much was internal on that minor guidance revision. That would be my first question. Thank you. Thanks, Ben. This is David Lee, and we appreciate you empathizing with the community here, which is very close to the reason why we started this company. We are grateful that our facilities so far remain safe and intact. With regard to your question on guidance, I think the first thing to note is you heard in our statement that we're pleased with the performance through Q2 out of our first farm, Morehead. While as you noted, Julie mentioned there was some increase in the amount of plant health damage, 15%-20% versus our 10%-15%. We largely met expectations you heard in Loren's commentary regarding our net sales through Q2. Our core business, the part that as you mentioned, we are operating and control remains healthy and strong and growing at 39% on our core is really beginning to pay off. I'll note we're getting better and better through Julie and her leadership on things like the pricing we're realizing, the amount we're direct shipping and our labor productivity. Recall that one of our new farms is very similar in its output as our existing farm, Morehead. This is the Richmond facility. You heard in our guidance that we talked about quote-unquote, "potential supply chain issues" in the startup of the three farms, which we still believe, we still expect and are targeting to have up and running this calendar year. You've also heard that we intend to be getting harvesting in Q4, the output of those farms. From those statements, I think you can infer that our tightening around the lower end of the range is driven significantly by tempered expectations on the startup timing of new facilities that we are still expecting to be up in a matter of months given where we sit now in the calendar year. I don't know if that helps, but I wanted to use what's out there publicly to try to give you some color commentary. Okay. No, that was very good, David. Thanks for that. Then, the second question, if I may, on just the operational side and what you've been working on the improvements and obviously you've benefited from a relatively good pricing environment as well, this quarter, which was already the case in 1Q as well. If we think about the pricing environment, which is to a degree out of your control, while on the other side, what's within your control, where do you think you stand on the part that you can control in terms of efficiency versus what you would say, this is my internal target? I want, I wanna get X amount of premium. I wanna be as efficient on harvesting. I wanna get this volume out on a quarterly basis, with plant health and so on. Where do we stand on the journey just to understand where we could be with that one single facility in a more of an optimal environment of operation? Thank you, Ben. This is Julie. As David mentioned, you know, our focus on core operations is really paying off, and we continue to see steady, and importantly sort of sustainable improvements quarter- after- quarter on our labor metrics in Morehead. Our productivity importantly continues to rise. While we do have additional room to grow, so to speak, we're excited to see the productivity in our farm and in our pack house continue to rise quarter- after- quarter. This importantly is happening as we're increasing the complexity of the tasks our frontline executes. As mentioned in the prepared comments, we have planted this year additional premium varieties in Morehead, and we expect to increase further the amount of premium varieties that we plant in Morehead and in Richmond for the next season. This is an element of our productivity that we're keeping a close eye on to make sure that we continue to improve while we're increasing the complexity of the crops that we grow. I'd also add that, you know, due to sort of policy and engagement with the frontline, we've also seen our absentee rate decline, and we've seen our overtime hours decline in Q2 as well, which is significant. Yeah. Ben, just let me jump in. This is David. Julie and her team have done an amazing job. If you think about, you asked about pricing. Exogenous market factors, you can look at the USDA data for beefsteak, and you'll see exogenously the market for Q1, Q2, Q3, the whole market, not us, has consistently been up year-on-year. That we don't control that, though we really enjoy being part of a rational market that is widely consumed frequently. As you recall from our previous releases, we know that that exogenous market tends to revert back to its traditional levels of pricing within a quarter or two. The three things we control that Julie's done a great job on, quality. Higher quality is higher priced food. That's number one. That's the productivity stuff she's talking about. Direct shipping. Direct shipping means there's less of a contrast in net sales in that there are less costs for logistics. These varietals that we're beginning to plant are fundamentally different in willingness to pay, which was different in the quarter, and we're continuing to learn, not just for Morehead but Richmond. There is a lot we control that, I would say, as Julie mentioned, there's a lot more room to improve, but we're seeing steady improvement from our operations team. Okay. Perfect. Thanks, Julie. Thanks, David. Our next question will come from Brian Holland of Cowen and Company. Your line is open. Yeah, thanks. Good afternoon, and I'll echo Ben's thoughts and best wishes for you and your community during this time. If I could also tack on to Ben's question, just to kind of probe a bit further here on the guidance revision on the top line. It sounds like that this is not resulting from execution, that execution is performing as you'd expect. You know, good progress there. It sounds like it's more about commercializing the product that's coming out of the subsequent three facilities. You can correct me if I'm wrong about any of that, but assuming that is the catalyst for bringing the number down, just help us understand what changed from Q1 to Q2 that made you feel like, 'cause presumably that would have been part of the guide at some point anyway. It seems like it's really just the timing that would push some of this revenue generation out to next year. Just curious to understand what's behind that timing. Yeah, Brian. As we kinda land the plane, so to speak, on these next projects, construction, it's we all know the supply chain issues. Our teams managed incredibly well. You know, going from 70% to 100%, you just gotta get everything in line. Our team has really just been actively managing these projects around the clock. To put this in perspective, you know, we're talking several million square feet of facilities that are gonna go operational this year with a diversity across all three different designs, so leafy green, berries, and vine crops. The complexity of that and landing the plan on all three has been something that we're managing in real time. We're coming in very close on timing, but slipping a little bit, as we're fine-tuning on construction. Like David has already mentioned, we anticipate all three of those facilities to be operational this year, and to be selling product at all three of those facilities in Q4, but just making some revisions, as we're closing in on the completion of these three facilities and going live and launching them. Okay. I appreciate the color. I just presumably then, as we flow down to the EBITDA line, it's less about any execution issues and more about just incremental cost pressures that we're seeing across the board. I mean, is there anything specific that we would point to there? You know, if you think about the adjusted EBITDA line, largely, I would characterize our execution all the way through to adjusted EBITDA as strong, that the core business, even the construction part that Jonathan was just articulating, has done a great job. I wanna characterize the timeline for these three new facilities. You know, from our public comments, Brian, you know that they're gonna be up this year, you know that several are gonna be harvesting soon. Even a change in approach in expectations by a week or two could result in us targeting the lower end of both the previous guidance range on top line as well as on adjusted EBITDA. We have not disclosed any significant large inflationary shocks to our business model. We have managed our inflation quite well. Now, we all have inflation, but that has not been part of our disclosures. That's why I really would characterize this as a function of timing on new facilities versus a fundamental issue in our core business, which continues to be strong. Okay. Got it. Thanks for the color. I guess moving kind of to the financing side, you know, starting to look out to next year, I can't speak for my peers, but, you know, I have contribution from subsequent farms, you know, in the model, beyond what we're talking about bringing online this year. Help us think about, how far out that timeline pushes for securing funding and getting started on subsequent facilities. Is there any directional guidance you can provide there? Yeah, we can. I just wanna remind you, Brian, I'm sure you remember what we said on unit economics. Here's what we're talking about, when does the new proven Dutch glass greenhouse that's large and technology-enabled produce positive unit economics? If you look at the industry, forget about what we've said. If you look at the empirical evidence in the industry, those that use Dutch glass proven new technology at scale like us have seen good unit economics in about year three-plus after commissioning a large new set of facilities like ours. Now, that varies. You see perhaps some shorter time periods for green leafy, which tends to be more automated and sometimes longer periods for vine crop. We've been very consistent in our recent guidance in expecting what has been demonstrated empirically from similar facilities globally. For us, we think about a three-plus year timeframe is when we expect significant contribution to come from the farms that we commission. I hope that helps. I mean, you know the timing of Morehead and the timing we've just disclosed on the new facilities. From that, you can begin to model, I think, the timing of that positive return on invested capital over the life of these facilities. Okay. Understood. That's helpful. I'll leave it there and get back in the queue. Thanks, everyone. Thank you. Our next question will come from Kristen Owen of Oppenheimer. Your line's open. Hi, good afternoon. I will echo my thoughts with your community. A lot of really interesting progress that you've made this quarter. Wanted to follow up on question about EBITDA and less about the unit economics per se, but you know, picking apart, Loren, what you described as the EBITDA improvement year-over-year in the second quarter. You know, you've had the restructuring, but you've also outlined some of the ramp costs. I'm just wondering how we should think about that going into next year. What costs or what cost savings come with you into 2023, and what sticks around maybe from a ramp perspective or other costs that we should think about? Yeah. I think just real quick, we'll talk about maybe on a quarterly basis how we think about the rest of the year in terms of expenses as well. You know, similar to Q3 of last year because of the crop turn and the refresh Q3, this year will be our lowest sales quarter of the year. In Q3, we'll have a very small amount of sales out of Morehead and potentially a small amount of sales out of portion of Berea. We expect that Q4 will be our largest sales quarter- to- date with the expectation that all farms are completed and planted by then. In terms of run rate operating expenses, which I think you're kind of asking about here, you know, we expect to see continued favorability in Q3 and Q4 from our cost saving measures that we've enacted in the first half of this year. Yeah, I would say that once we kinda get into Q4, that's kind of where we would expect to be kind of going forward on run rate operating expenses. In terms of adjusted EBITDA loss in Q3, I think that would be relatively in line with what we've seen in Q2, with Q4 making up the difference with our adjusted EBITDA loss guidance range. That's really helpful. Wanted to ask also about the financing that you announced earlier this week, and just sort of thinking about balance sheet management. It's not quite a like for like swap with the JPMorgan facility. I think you discussed in your prepared remarks how that frees up some of your restricted cash. I guess confirmation or some additional detail around that would be helpful. Related, you know, it seems like that was a pretty involved process that you had to go through to first secure that JPMorgan facility ahead of the USDA-backed financing. Now that you have a template for that kind of transaction, I'm just wondering how replicable that is and how we should think about that kind of transaction going forward. Thank you. Getting through the USDA loan guarantee process can be very lengthy, and it can depend on the circumstances of the project. Now that we've proven that these loan guarantees are available for CEA facilities, they will certainly continue to be one of the options we consider for our facility financing needs going forward. These loans also generally require a new greenfield project, an existing loan in place, or a completed project. For the Somerset loan that we just announced this week, we have the JPMorgan loan already in place, which we could easily take out. With Berea, which is currently unlevered and currently under construction and expected to be completed in the coming months, we are exploring different financing options and a USDA guaranteed loan could be a solution, but we also believe there are other attractive permanent financing options that may be available to us on a quicker timeline. We hope to have more to share on that topic soon. As it relates to your balance sheet question, the USDA loan takes out the JPMorgan loan. The JPMorgan loan was $46 million with cash collateral and restricted cash of $48 million. That will free up on a net basis $28 million in cash, with $20 million going to effectively a prepaid for the remaining costs of the Somerset project. Chris, let me jump in. This is David Lee. I wanna underscore Loren and the finance team achievement. This is a big deal. You know, the JPM facility was 364 days. This is a 23-year attractive between, I think, Loren, 6%-7% interest rate facility. It's a strong statement that the USDA will back proven infrastructure and controlled environment ag like ours for the long haul. While we can't make promises, going through the arduous process, I think we're one of the very few that know how to do it and know how to do it with a great outcome. While we have lots of non-dilutive financing projects underway for Berea, as Loren noted, I think this is an important precedent for the industry, not just for us. Thank you so much. I'll leave it there. Thank you. I'm showing no further questions at this time. This will conclude today's conference. Thank you for participating. You may now disconnect.