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What changed in Edible Garden AG Inc's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Edible Garden AG Inc's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+252 added−278 removedSource: 10-K (2025-04-01) vs 10-K (2024-04-01)

Top changes in Edible Garden AG Inc's 2024 10-K

252 paragraphs added · 278 removed · 164 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

61 edited+18 added−24 removed72 unchanged
Biggest changeWhen we undergo the GFSI audit, Primus audits the following: · standard operating procedures and their documentation; · food safety testing (biological hazards) by an ISO 17025 accredited lab; · water testing by an ISO 17025 accredited lab; · quality control processes; · personnel health, hygiene and safety; · sanitation programs; · mock recalls/products on-hold process; · internal auditing system for organic, GFSI, non-GMO and HACCP certifications and verifications; · records retention; · food defense/food fraud; · supplier approval program; · pest management program; and · visual inspection of growing and packing processes. 5 Table of Contents To maintain our USDA Organic certification, we must submit: · our farm and handling plans annually; · to an annual inspection and audit of our greenhouse and how we handle aspects of our business; · to review of our organic documentation and records retention; · to review and testing of our water usage and irrigation systems, harvest and post-harvest processing; and supplier monitoring and control.
Biggest changeWhen we undergo the GFSI audit, Primus audits the following: · standard operating procedures and their documentation; · food safety testing (biological hazards) by an ISO 17025 accredited lab; · water testing by an ISO 17025 accredited lab; · quality control processes; · personnel health, hygiene and safety; · sanitation programs; 5 Table of Contents · mock recalls/products on-hold process; · internal auditing system for organic, GFSI, non-GMO and HACCP certifications and verifications; · records retention; · food defense/food fraud; · supplier approval program; · pest management program; and · visual inspection of growing and packing processes.
Our controlled greenhouse facilities allow us to grow consistent quality herbs and lettuces year-round, first by eliminating some of the variability of outdoor farming with our CEA techniques, and second by leveraging our proprietary software, GreenThumb. In addition to using hydroponic and vertical greenhouse systems, we use a “closed loop” system in our greenhouses.
Our controlled greenhouse facilities allow us to grow consistent quality herbs year-round, first by eliminating some of the variability of outdoor farming with our CEA techniques, and second by leveraging our proprietary software, GreenThumb. In addition to using hydroponic and vertical greenhouse systems, we use a “closed loop” system in our greenhouses.
Less product spoilage means less waste, and less shrinkage means that we will not have to produce as many lettuce and herbs to achieve the same level of retail sales. Altogether, we should be able to produce less carbon and minimize the size of our carbon footprint by using these packaging innovations.
Less product spoilage means less waste, and less shrinkage means that we will not have to produce as many herbs to achieve the same level of retail sales. Altogether, we should be able to produce less carbon and minimize the size of our carbon footprint by using these packaging innovations.
In addition to selling these products through traditional retail channels, we sell some of these products directly to consumers in the United States through an e-commerce platform. Products We currently offer more than 79 stock keeping units (“SKUs”) and expect to further cross sell products across our supermarket partners to meet their demand.
In addition to selling these products through traditional retail channels, we sell some of these products directly to consumers in the United States through an e-commerce platform. Products We currently offer more than 106 stock keeping units (“SKUs”) and expect to further cross sell products across our supermarket partners to meet their demand.
We and our customers enter into purchase orders on a daily basis. Other than purchase orders relating to the Supply Agreements, no purchase order has exceeded 2.0% of our revenue for the particular quarter in which the products were delivered to the customer. Since inception, a few of our customers constitute a majority of our total revenue.
We and our customers enter into purchase orders on a daily basis. Other than purchase orders relating to the Supply Agreements, no purchase order has exceeded 2.1% of our revenue for the particular quarter in which the products were delivered to the customer. Since inception, a few of our customers constitute a majority of our total revenue.
Our tag line “Simply Local, Simply Fresh” is intended to describe our business plan: growing herbs and lettuce in local farms in the regional communities where our customers sell our products so that the products stay fresher for longer.
Our tag line “Simply Local, Simply Fresh” is intended to describe our business plan: growing herbs in local farms in the regional communities where our customers sell our products so that the products stay fresher for longer.
Our GreenThumb software allows us to be more efficient in our packing and shipping process with the goal of reducing excess emission of greenhouse gases and carbon that would result from more trucks transporting our products.
Our GreenThumb software allows us to be more efficient in our packing and shipping process with the goal of reducing excess emissions of greenhouse gases and carbon that would result from more trucks transporting our products.
Failure to obtain necessary permits or otherwise comply with USDA regulations and requirements could result in a ban or temporary suspension of our ability to grow, manufacture or market our products as organic, and thus could materially adversely affect our business. Corporate History and Structure Our business is a successor business of a subsidiary of Terra Tech Corp.
Failure to obtain necessary permits or otherwise comply with USDA regulations and requirements could result in a ban or temporary suspension of our ability to grow, manufacture or market our products as organic, and thus could materially adversely affect our business. 14 Table of Contents Corporate History and Structure Our business is a successor business of a subsidiary of Terra Tech Corp.
Using this technology, cilantro, for example, is in good quality after 11 days, while it would be in poor quality after seven days in other packaging, according to the developer 1 of this bag material.
Using this technology, cilantro, for example, remains in good quality after 11 days, while it would be in poor quality after seven days in other packaging, according to the developer 1 of this bag material.
Any price increases will take affect after sixty days and any price decrease will be effective immediately. If the we and Meijer are unable to mutually agree on price increases, we will have the power to terminate the Supply Agreements immediately.
Any price increases will take effect after sixty days and any price decrease will be effective immediately. If we and Meijer are unable to mutually agree on price increases, we will have the power to terminate the Supply Agreements immediately.
The issued patents include claims related to greenhouse management software and systems (GreenThumb) and are expected to remain in force until November 2040, provided that all required maintenance fees are paid. One of the two pending patent applications is a recently filed continuation patent application related to greenhouse management software and systems.
The issued patents include claims related to greenhouse management software and systems (GreenThumb) and are expected to remain in force until November 2040, provided that all required maintenance fees are paid. One of the two pending patent applications is a continuation-in-part patent application related to greenhouse management software and systems.
This means that we are better able to control shipping our products in full truck loads, thus eliminating multiple deliveries and decreasing the excess emission of greenhouse gases that would result from many partially full trucks delivering our products.
This means that we are better able to control shipping our products in full truck loads and retailer backhaul programs, thus eliminating multiple deliveries and decreasing the excess emission of greenhouse gases that would result from many partially full trucks delivering our products.
Heartland Facility in Grand Rapids, Michigan On August 30, 2022, through the Michigan Subsidiary, we acquired a five-acre greenhouse facility in Grand Rapids, Michigan, which operates as Edible Garden Heartland. During the year ended December 31, 2023, Edible Garden Heartland transitioned to growing our herbs and lettuce products, adding five acres of directly controlled growing capacity to our operations.
Heartland Facility in Grand Rapids, Michigan On August 30, 2022, through the Michigan Subsidiary, we acquired a five-acre greenhouse facility in Grand Rapids, Michigan, which operates as Edible Garden Heartland. During the year ended December 31, 2023, Edible Garden Heartland transitioned to growing our herb products, adding five acres of directly controlled growing capacity to our operations.
That’s why we believe as a market innovator we can continue to capture market share and brand awareness. 13 Table of Contents Growth Strategy We are at an important point as we are operating at a commercially viable scale and ready for the next level of growth with additional greenhouses, processing and finished goods capabilities.
That’s why we believe as a market innovator we can continue to capture market share and brand awareness. 12 Table of Contents Growth Strategy We are at an important point as we operate at a commercially viable scale and are ready for the next level of growth with additional greenhouses, processing and finished goods capabilities.
Our business plan is to develop, own and operate commercial greenhouses across North America through a combination of organic and acquisitive growth. Presently and in the near term our greenhouse operations will continue to grow herbs and lettuces in conjunction with developing finished goods/consumer products that communicate our brand promise.
Our business plan is to develop, own and operate commercial greenhouses across North America through a combination of organic and acquisitive growth. Presently and in the near term our greenhouse operations will continue to grow herbs and develop finished goods/consumer products that communicate our brand promise.
The greenhouse facility is operating as Edible Garden Heartland. During the year ended December 31, 2023, Edible Garden Heartland fully transitioned to growing our herbs and lettuce products, adding approximately five acres of directly controlled growing capacity to our operations. Additionally, in September 2023 we began shipping fall ornamental products grown in our Edible Garden Heartland facility.
During the year ended December 31, 2023, Edible Garden Heartland fully transitioned to growing our herbs and lettuce products, adding approximately five acres of directly controlled growing capacity to our operations. Additionally, in September 2023 we began shipping fall ornamental products grown in our Edible Garden Heartland facility.
For our supermarket customers, one source of this shrinkage is spoiled product, such as herbs that have been in packaging for so long that they become poor quality. We use herb bags that have micro-perforations that allow ethylene gas to escape from the product packaging. Ethylene gas accelerates spoilage of herbs and lettuce.
For our supermarket customers, one source of this shrinkage is spoiled products, such as herbs that have been in packaging for so long that they become poor quality. We use herb bags that have micro-perforations that allow ethylene gas to escape from the product packaging.
As a leader in sustainability, research and development is a key focus for us moving forward. We sell plant-based nutraceuticals under the Vitamin Way brand. These products are produced by a co-manufacturer according to our specifications.
As a leader in sustainability, research and development is a key focus for us moving forward. We sell plant-based nutraceuticals under the Vitamin Way and Kick. Sports Nutrition brands. These products are produced by a co-manufacturer according to our specifications.
The traditional agriculture industry in the United States consists primarily of field crop farms. According to the USDA, the United States had more than 255 million planted acres of farmland in December of 2023. Over the last few decades the acreage has shifted and consolidated to larger and larger farms.
The traditional agriculture industry in the United States consists primarily of field crop farms. According to the USDA, the United States had more than 250 million planted acres of farmland in August of 2024. Over the last few decades, the acreage has shifted and consolidated to larger and larger farms.
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 16 Table of Contents
The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
By allowing this gas to escape, we are able to extend the shelf life of the product while reducing the likelihood that our customers experience retail shrink because they have to throw our products in the garbage.
Ethylene gas accelerates spoilage of herbs and by allowing this gas to escape, we are able to extend the shelf life of the product while reducing the likelihood that our customers will experience retail shrink because they have to throw our products in the garbage.
Under the terms of the lease between our predecessor company and the Landlord, our predecessor company paid to build a foundation and construct the prefabricated building for the packhouse. Although the packhouse building is standing, it requires utilities and other improvements before we can use the building for our business.
Our predecessor company paid to build a foundation and construct the prefabricated building for the packhouse. Although the packhouse building is standing, it requires utilities and other improvements before we can use the building for our business.
However, we believe the following elements will give us a competitive advantage in the rapidly growing CEA category: 12 Table of Contents Customer Relationships and Brand . Our herbs and lettuce product portfolio is sold through our supermarket partners including Walmart, Target, Meijer, Wakefern Food Corporation/ShopRite King Kullen, D’Agostino’s, Tops, H-Mart, and food distributors.
However, we believe the following elements will give us a competitive advantage in the rapidly growing CEA category: 11 Table of Contents Customer Relationships and Brand . Our herb product portfolio is sold through our supermarket partners including Walmart, Target, Meijer, Hannaford, Ahold/Delhaize, Whole Foods, PriceSmart, Wakefern Food Corporation/ShopRite, King Kullen, D’Agostino’s, and H-Mart and food distributors.
We are licensed under Perishable Agricultural Commodities Act (“PACA”) to operate our business. We voluntarily comply with the Hazard Analysis Critical Control Point (“HACCP”) principles established by the U.S. Food and Drug Administration (“FDA”). Primus annually audits our growing process and entire food safety management system to ensure that our process and products meet the standards established by the GFSI.
We voluntarily comply with the Hazard Analysis Critical Control Point (“HACCP”) principles established by the U.S. Food and Drug Administration (“FDA”). Primus annually audits our growing process and entire food safety management system to ensure that our process and products meet the standards established by the GFSI.
In this context, traceability means being able to track a plant through all stages of production and distribution. In addition to improving traceability, GreenThumb helps us better manage the day-to-day operations of our business.
In this context, traceability means being able to track a plant through all stages of production and distribution. In addition to improving traceability, GreenThumb helps us better manage the day-to-day operations of our business. GreenThumb is a web-based greenhouse management and demand planning system.
Competition The U.S. fruits and vegetable markets are highly competitive. Our main competitors are Gotham Greens, Bright Farms, Bowery Farms and Plenty. Many of these companies may have significantly greater financial, technical, marketing and distribution resources, as well as greater experience in the industry than we have. Our services may not be competitive with their services.
Our main competitors are Gotham Greens, Bright Farms, 80 Acres Farms and Plenty. Many of these companies may have significantly greater financial, technical, marketing and distribution resources, as well as greater experience in the industry than we have. Our services may not be competitive with their services.
With our closed loop systems, we recapture and recycle water into our growing process. We use integrated pest management instead of traditional pesticides in our Flagship Facility, Edible Garden Heartland and all contracted grow facilities. In vertical greenhouses, we are able to grow more herbs and lettuce per square foot than legacy farms.
We use integrated pest management instead of traditional pesticides in our Flagship Facility, Edible Garden Heartland and all contracted grow facilities. In vertical grow systems, we are able to grow more herbs and lettuce per square foot than legacy farms.
We anticipate investing approximately $1.1 million in capital expenditures to add paving and utilities such as HVAC, electrical service, septic system, and a well to complete the packhouse. To date, we have paid $272 thousand towards the construction of the packhouse. The Landlord is aware of the construction of the packhouse.
We anticipate investing an additional $1.1 million in capital expenditures to add paving and utilities such as HVAC, electrical service, septic system, and a well to complete the packhouse. To date, we have paid $410 thousand towards the construction of the packhouse. Whitetown Realty, LLC (the “Landlord”), is aware of the construction of the packhouse.
The Supply Agreements may be renewed for an additional two-year term upon the mutual agreement but may be terminated by Meijer without cause upon sixty days’ prior notice. Other than the Supply Agreements, we sell products to our customers on a purchase order basis, with no spend or purchase commitments, in the ordinary course of business.
The Supply Agreements may be renewed for an additional two-year term upon the mutual agreement but may be terminated by Meijer without cause upon sixty days’ prior notice. ____________________ 1 “Shelf Life Studies: Herbs,” Windham Packaging, LLC. 8 Table of Contents Other than the Supply Agreements, we sell products to our customers on a purchase order basis, with no spending or purchase commitments, in the ordinary course of business.
We believe we have sufficient potential growing capacity with contract growers, at Edible Garden Heartland and at our Flagship Facility to supply products to our existing customers. 9 Table of Contents Since January 1, 2023, we have grown or purchased products grown in the following locations and with the following potential growing capacity: Location Growing capacity Operated by Flagship Facility (Belvidere, New Jersey) 5 acres Edible Garden Edible Garden Heartland (Grand Rapids, Michigan) 5 acres Edible Garden Francesville, Indiana 3 acres Contract grower Grand Rapids, Michigan 6 acres Contract grower Hixton, Wisconsin 3 acres Contract grower Order Process We rely on long-term relationships with contract growers to grow our herbs and produce but have no formal long-term contracts with these growers.
Since January 1, 2024, we have grown or purchased products grown in the following locations and with the following potential growing capacity: Location Growing capacity Operated by Flagship Facility (Belvidere, New Jersey) 5 acres Edible Garden Edible Garden Heartland (Grand Rapids, Michigan) 5 acres Edible Garden Grand Rapids, Michigan 6 acres Contract grower Ojai, California 10+ acres Contract grower 9 Table of Contents Order Process If necessary, we rely on long-term relationships with contract growers to grow our herbs and produce but have no formal long-term contracts with these growers.
Item 1. Business Overview Edible Garden is a controlled environment agriculture (“CEA”) farming company. We use traditional agricultural growing techniques together with technology to grow fresh, organic food, sustainably and safely while improving traceability.
Item 1. Business Overview Edible Garden is a controlled environment agriculture (“CEA”) farming company. We use traditional agricultural growing techniques together with technology to grow fresh, organic food, sustainably and safely while improving traceability. We use the controlled environment of traditional greenhouse structures, such as glass greenhouses, together with hydroponic and vertical greenhouses to sustainably grow organic herbs.
Regulatory Compliance As a producer and distributor of food products, we are subject to the laws and regulations in the jurisdictions where our facilities are located and where are products are distributed. In particular we are subject to the FSM Act, which is enforced by the FDA.
Total estimated emissions avoided in 2024: 145,803 metric tons of CO 2 . Regulatory Compliance As a producer and distributor of food products, we are subject to the laws and regulations in the jurisdictions where our facilities are located and where are products are distributed. In particular we are subject to the FSM Act, which is enforced by the FDA.
Our facility incorporates a hydroponic gutter system developed in Holland for the exclusive production of herbs. The Flagship Facility also includes a cold storage freezer which allows us to package herbs for our distribution partners and a 20,000 sq. ft packhouse, which is under construction.
The Flagship Facility also includes a cold storage freezer which allows us to package herbs for our distribution partners and a 20,000 sq. ft packhouse, which is under construction.
Instead of planting one row of lettuce in the ground, by using a vertical greenhouse, we can grow many towers of lettuce in the same area by planting up instead of planting across.
In our hydroponic greenhouse, we grow plants without soil. Instead of planting one row of plants in the ground, by using a vertical growing system, we can grow many towers of plants in the same area by planting up instead of planting across.
For example, during the year ended December 31, 2023, we earned approximately 83.1% of our revenue from five customers (44.4% of which was attributed to sales made to one customer), and at December 31, 2023 approximately 80.4% of our gross outstanding trade receivables were attributed to four customers (41.1% of which was due from one customer).
For example, during the year ended December 31, 2024, we earned approximately 82.0% of our revenue from four customers (44.0% of which was attributed to sales made to one customer), and at December 31, 2024 approximately 87.5% of our gross outstanding trade receivables were attributed to five customers (45.6% of which was due from one customer).
These products include: · 10 types of individually potted, live herbs; · 37 types of cut single-herb clamshells; · 4 specialty herb items; · butterhead lettuce; · 6 garden salad kits; · wheatgrass; · hydro basil; · 12 vitamin and protein powder products; · 4 fermented hot sauces; · 3 chili oil products. 7 Table of Contents The packaging we use for our produce leverages the latest technology to reduce plastics, extend the shelf life of our products, and reduce retail shrink - all leading to a reduced carbon footprint by reducing waste.
These products include: · 35 types of individually potted, live herbs; · 48 types of cut single-herb clamshells; · 2 wheatgrass; · 2 hydro basil; · 12 vitamin and protein powder products sold under the Vitamin Whey and Kick.Sports Nutrition lines; · 4 fermented hot sauces under our Pulp line; and · 3 chili oil products under our Pulp line. 7 Table of Contents The packaging we use for our produce leverages the latest technology to reduce plastics, extend the shelf life of our products, and reduce retail shrink - all leading to a reduced carbon footprint by reducing waste.
This market segment allows us greater penetration with smaller local and regional supermarkets and the food services business. _______________________ 1 “Shelf Life Studies: Herbs,” Windham Packaging, LLC. 8 Table of Contents In February 2024, we entered into agreements with Meijer to supply and sell products to Meijer until December 2026 (the “Supply Agreements”).
This market segment allows us greater penetration with smaller local and regional supermarkets and the food services business. In February 2024, we entered into agreements with Meijer to supply and sell products to Meijer until December 2026 (the “Supply Agreements”).
If the contract grower has grown more of a specific product than is needed to fulfill a purchase order, we attempt to supplement other purchase orders that may need more of that product.
If the contract grower has grown more of a specific product than is needed to fulfill a purchase order, we attempt to supplement other purchase orders that may need more of that product. Ultimately, if the contract grower sows too much of one crop than is needed to fill the purchase order, the contract grower must absorb those costs.
Pulp’s product lines are certified organic, all-natural, Non-GMO and preservative free. The products include Hungarian wax hot sauce, poblano serrano jalapeno hot sauce, Fresno chili hot sauce, Habanero carrot hot sauce, salsa macha, chili crisp, and chili oil.
In November 2022, we acquired the assets of Pulp, including its line of sustainable gourmet sauces and chili-based products. Pulp’s product lines are certified organic, all-natural, Non-GMO and preservative free. The products include Hungarian wax hot sauce, poblano serrano jalapeno hot sauce, Fresno chili hot sauce, Habanero carrot hot sauce, salsa macha, chili crisp, and chili oil.
We believe that Edible Garden’s facilities comply with food safety and handling standards. We have food safety certifications from Primus GFS (“Primus”), a Global Food Safety Initiative (“GFSI”) certification program, the United States Department of Agriculture (“USDA”) for organic products, and some of our products are verified as non-genetically modified (“non-GMO”) by the non-GMO Project.
We have food safety certifications from Primus GFS (“Primus”), a Global Food Safety Initiative (“GFSI”) certification program, the United States Department of Agriculture (“USDA”) for organic products, and some of our products are verified as non-genetically modified (“non-GMO”) by the non-GMO Project. We are licensed under Perishable Agricultural Commodities Act (“PACA”) to operate our business.
Because we control the growing and shipping processes at this facility, we bear inventory risk, risk of loss, and other risks for the produce grown at this facility.
Because we control the growing and shipping processes at this facility, we bear inventory risk, risk of loss, and other risks for the produce grown at this facility. 10 Table of Contents Construction began on the packhouse at the New Jersey facility prior to our inception.
Production and Properties We utilize prime greenhouse locations in the Northeast, Midwest and Mid-Atlantic regions of the country, allowing us to provide local fresh and organic products to these local communities. Our locally grown and delivered products using a network of sustainable greenhouse farms provide local communities, retailers and consumers the quality they demand with the food safety they expect.
Production and Properties We utilize prime greenhouse locations in the Northeast, Midwest and Mid-Atlantic regions of the country, allowing us to provide local fresh and organic products to these local communities.
We do not anticipate construction on the packhouse will impact our ability to operate the property. We source the raw materials for production from multiple suppliers, including Ball Horticulture, Brandt Box and Paper, Griffin Supplies, Summit Plastics and Sun Gro Horticulture, and expect that those supplies will continue to be available for our use.
We source the raw materials for production from multiple suppliers, including Ball Horticulture, Fidelity Paper & Supply, Coastal Container, Gristmill, Griffin Supplies, East Jordan Plastics and Sun Gro Horticulture, and expect that those supplies will continue to be available for our use.
The combination of the GreenThumb software, quality assurance and control processes (including compliance with food safety standards), and feedback from consumers and purchasers holds us accountable for maintaining the quality of our herbs and lettuce. 4 Table of Contents We focus our efforts on producing our herbs and vegetables in a sustainable manner that will reduce consumption of natural resources, by recycling water in our closed loop system and using LED lights instead of conventional lightbulbs to accelerate crop growth and yield, when necessary.
We focus our efforts on producing our herbs and vegetables in a sustainable manner that will reduce consumption of natural resources, by recycling water in our closed loop system and using LED lights instead of conventional lightbulbs to accelerate crop growth and yield, when necessary.
We converted into a Delaware corporation effective July 12, 2021. On September 8, 2021, we effected an additional forward stock split of 20 for 1. On January 26, 2023, we effected a reverse stock split of 1 for 30. As of December 31, 2023, we had 124 employees, of which 116 were full-time employees.
We converted into a Delaware corporation effective July 12, 2021. On September 8, 2021, we effected an additional forward stock split of 20 for 1.
We plan on shifting our mix of vehicles towards more energy efficient vehicles. In addition, we are working with key customers to minimize our exposure to shipping costs by leveraging backhaul opportunities. Our greenhouse farms have to be strategically located in order for us to deliver on this objective.
In addition, we are working with key customers to minimize our exposure to shipping costs by leveraging backhaul opportunities. Our greenhouse farms have to be strategically located in order for us to deliver on this objective. We hold our transportation-related assets and manage the distribution of our products through our wholly-owned subsidiary, EG Transportation, LLC.
Our nominating and governance committee is responsible for overseeing these fundamental areas. 2023 Sustainability, Waste Reduction and Carbon Emission Avoidance The following measures demonstrate Edible Garden’s ongoing commitment to sustainability, waste reduction and carbon neutrality for 2023: · 54 passenger car emissions were avoided by co-loading orders and backhauling supplies. · Reduced our overall fuel demand by 10,200 gallons of diesel fuel by route optimization. · Conserved 850 barrels of crude oil by route optimization. · 67 metric tons of virgin corrugate materials were avoided by eliminating the carrier in our hydro basil cases. · Recycled 34 metric tons of mixed recyclables including corrugate, plastic, and glass by maintaining our recycling program. · Avoided 78 tons of food waste by packing larger crops in taller boxes and by making food donations to local programs like Food Shed Alliance. · Saved 1,000,000 gallons of water used by recirculating water systems and capturing run-off. 15 Table of Contents Total estimated emissions avoided in 2023: 115,574 metric tons of CO 2 .
We are working to help those partners who are not currently pursuing sustainability goals to move in that direction by raising awareness and providing information and guidance. 13 Table of Contents 2024 Sustainability, Waste Reduction and Carbon Emission Avoidance The following measures demonstrate Edible Garden’s ongoing commitment to sustainability, waste reduction and carbon neutrality for 2024: · 131 passenger car emissions were avoided by co-loading orders and backhauling supplies. · Reduced our overall fuel demand by 28,870 gallons of diesel fuel by route optimization. · Conserved 687 barrels of crude oil by route optimization. · 11,803 metric tons of non-recyclable virgin plastic were avoided by using recyclable pots for our crops. · Recycled 34 metric tons of mixed recyclables including corrugate, plastic, and glass by maintaining our recycling program. · Avoided 104 tons of food waste by packing larger crops in taller boxes and by making food donations to local programs like Food Shed Alliance. · Saved 1,000,000 gallons of water used by recirculating water systems and capturing run-off.
We believe this strategy allows us to drive local grass roots brand awareness while we grow our business to support our plan to become a national brand. Acquisitions Our strategy for growth includes acquisitions. Our acquisition strategy includes expanding our greenhouse capacity in order to reduce our dependence on contract growers which we believe will benefit our earnings power.
We believe this strategy allows us to drive local grass roots brand awareness while we grow our business to support our plan to become a national brand. 6 Table of Contents Acquisitions Our strategy for growth includes acquisitions.
We hold our transportation-related assets and manage the distribution of our products through our wholly-owned subsidiary, EG Transportation, LLC. This entity owns and leases the delivery vehicles we use to distribute products and holds the liability insurance needed for the transportation aspects of our business. As of December 31, 2023, we have 14 delivery vehicles and less than 10 drivers.
This entity owns and leases the delivery vehicles we use to distribute products and holds the liability insurance needed for the transportation aspects of our business. As of December 31, 2024, we have 13 delivery vehicles and less than 10 drivers. Competition The U.S. fruits and vegetable markets are highly competitive.
We believe our strategy enhances our products’ appeal to major consumer constituencies that desire products grown and delivered locally. Potential Growing Capacity Consistent year round growing that adheres to our stringent sustainability protocols occurs in greenhouse locations in Indiana, New Jersey, Michigan, and Wisconsin.
Potential Growing Capacity Consistent year round growing that adheres to our stringent sustainability protocols occurs in greenhouse locations in California, New Jersey, and Michigan.
In addition to serving customers in the Midwest, the facility will house a research and development center focused on improving existing products, developing new products, innovations in plant-based protein and nutraceuticals, and applying advanced agricultural technologies. In November 2022, we acquired the assets of Pulp, including its line of sustainable gourmet sauces and chili-based products.
We expect lower cost of sales by growing, picking and shipping our products instead of working with a contract grower to grow those products. In addition to serving customers in the Midwest, the facility will house a research and development center focused on improving existing products, developing new products, innovations in plant-based protein and nutraceuticals, and applying advanced agricultural technologies.
Greenhouse expansion also supports our effort to grow local which reduces transportation costs. We also expect to make acquisitions that expand our consumer product offerings that leverage our channels to market. On August 30, 2022, through our wholly owned subsidiary, 2900 Madison Ave Holdings, LLC (the “Michigan Subsidiary”), we acquired a five-acre greenhouse facility in Grand Rapids, Michigan for $2,886,000.
On August 30, 2022, through our wholly owned subsidiary, 2900 Madison Ave Holdings, LLC (the “Michigan Subsidiary”), we acquired a five-acre greenhouse facility in Grand Rapids, Michigan for $2,886,000. The greenhouse facility is operating as Edible Garden Heartland.
As discussed further in “Management’s Discussion and Analysis - Liquidity and Capital Resources,” our auditors have issued an opinion that there is a substantial doubt about our ability to continue as a going concern. 6 Table of Contents We believe that the power of our brand together with the quality, innovative packaging and traceability of our products allow all of our customers to associate Edible Garden with locally grown and sustainably sourced packaged herbs and vegetables.
As discussed further in “Management’s Discussion and Analysis - Liquidity and Capital Resources,” our auditors have issued an opinion that there is a substantial doubt about our ability to continue as a going concern.
This combination of growing know-how to inform finished goods with more shelf stability should lead us to additional market penetration while benefiting from expected margin expansion. Additionally, we expect to scale our business by building or acquiring a portfolio of new, fully scaled commercial greenhouses across the Northeast, Midwest, Mid-Atlantic, South and Southwest.
This combination of growing know-how to inform finished goods with more shelf stability should lead us to additional market penetration while benefiting from expected margin expansion. Additionally, we are augmenting our product portfolio with shelf stable products to complement our produce portfolio.
Some of the supermarkets that sell our products include Walmart, Target, Meijer, Wakefern Food Corporation/ShopRite, King Kullen, D’Agostino’s, Tops Friendly Markets, and H-Mart. We also service a large number of food distributors.
Customers Our products are currently sold at over 5,000 supermarket stores and food distributors across the Northeast, Midwest and Mid-Atlantic regions of the country. Some of the supermarkets that sell our products include Walmart, Target, Meijer, Hannaford, Ahold/Delhaize, Whole Foods, PriceSmart, Wakefern Food Corporation/ShopRite, King Kullen, D’Agostino’s, and H-Mart. We also serve a large number of food distributors.
Through our extensive distribution platform and proprietary predictive modeling, we pick, pack and ship to big box retailer’s distribution centers in our network. We distribute our products through more than 50 retail partners including national big box retailers, regional grocery stores, distributors, restaurants and local purveyors.
We distribute our products through more than 50 retail partners including national big box retailers, regional grocery stores, distributors, restaurants and local purveyors. Our growing and distribution plans are designed to get our locally grown products to our retail partners and consumers as soon as possible after harvest.
In order for us to meet this objective we strive to deliver our products to market in no less than 24 hours from when they are picked. We currently rely on our own fleet delivery vehicles, as well as other independent shipping operators. We continue to assess our footprint and optimize our logistics and shipping fleet.
We want to make sure that our products arrive as fresh, undegraded and nutrient rich as when they were harvested. In order for us to meet this objective we strive to deliver our products to market in no less than 24 hours from when they are picked.
In addition to serving customers in the Midwest, the facility will house a research and development center focused on improving existing products, developing new products, innovations in plant-based protein and nutraceuticals, and applying advanced agricultural technologies. 11 Table of Contents Distribution Edible Garden utilizes advanced, sustainable, environmentally controlled indoor agriculture to grow and process organic herbs and lettuces.
We expect lower cost of sales by growing, picking and shipping our products instead of working with a contract grower to grow those products. In addition to serving customers in the Midwest, the facility houses a research and development center focused on improving existing products, developing new products, innovations in plant-based protein and nutraceuticals, and applying advanced agricultural technologies.
The communities, retailers and consumers benefit from this as this allows us to get our products to market in the shortest time without compromising the plant’s quality and nutritional value. The growing locations are chosen to be near key trucking lanes within hours of major cities to cut down on “food miles” and fuel costs.
The growing locations are chosen to be near key trucking lanes within hours of major cities to cut down on “food miles” and fuel costs. We believe our strategy enhances our products’ appeal to major consumer constituencies that desire products grown and delivered locally.
Ultimately, if the contract grower sows too much of one crop than is needed to fill the purchase order, the contract grower must absorb those costs. 10 Table of Contents Flagship Facility in Belvidere, New Jersey In addition to our contract growers, we operate a 5-acre Flagship Facility in Belvidere, New Jersey, which began commercial operations in 2015.
Flagship Facility in Belvidere, New Jersey In addition to our contract growers, we operate a 5-acre Flagship Facility in Belvidere, New Jersey, which began commercial operations in 2015. Our facility incorporates a hydroponic gutter system developed in Holland for the exclusive production of herbs.
We plan to locate farms with easy access to distribution centers and major population demographic centers and to sell products into established supermarkets partners and distributors. We expect these full-scale commercial greenhouses to have more production capacity than our current facilities and contract growers and to benefit from economies of scale.
We expect to further scale our business by building or acquiring new, fully scaled commercial greenhouses in strategic locations in close proximity to our customer distribution centers and major population demographic centers to sell products into established supermarkets partners and distributors.
Removed
We use the controlled environment of traditional greenhouse structures, such as glass greenhouses, together with hydroponic and vertical greenhouses to sustainably grow organic herbs, lettuces and floral products. In our hydroponic greenhouse, we grow plants without soil.
Added
The combination of the GreenThumb software, quality assurance and control processes (including compliance with food safety standards), and feedback from consumers and purchasers holds us accountable for maintaining the quality of our products.
Removed
GreenThumb is a web-based greenhouse management and demand planning system that does the following: · integrates in real-time with our cloud business software suite for monitoring daily sales data; · generates reports by category, product, customer, and farm to allow us to analyze sales, trends, margins and retail shrink (spoiled product); · provides dynamic pallet mapping for packout, which enables us to more efficiently ship our products; · utilizes a proprietary algorithm that uses year-over-year and trending sales data to develop customer specific and aggregate product specific forecasting for our greenhouses; · aggregates all greenhouse activity input to provide real-time inventory and availability reports of all products in our greenhouses; · manages our online ordering system with user controlled product availability based upon greenhouse inventory; · provides a route management system for coordinating the logistics of our direct store delivery program; and · tracks all production activities at greenhouses, including sowing, spacing, dumping, spraying, picking and packing, using hand held devices.
Added
We have recently leveraged our brand recognition to offer more consumer products that are in many cases co-manufactured, such as protein powder, sports nutrition, sauces, fermented products, pickles, and flavor enhancers. 4 Table of Contents We believe that the power of our brand together with the quality, innovative packaging, patented displays and traceability of our products allow all of our customers to associate Edible Garden with locally grown and sustainably sourced packaged herbs and vegetables.
Removed
We believe the addition of Edible Garden Heartland will contribute to higher gross margin over time. We expect lower cost of sales by growing, picking and shipping our products instead of working with a contract grower to grow those products.
Added
We believe this strategy allows us to drive local grass roots brand awareness while we grow our business to support our plan to become a national brand. As of December 31, 2024, we offer more than 106 stock keeping units (“SKUs”) and expect to further cross sell products across our supermarket partners to meet their demand.
Removed
In September 2023, we began shipping fall ornamentals grown in our Edible Garden Heartland facility. Our offerings include mums, marigolds and other floral products. These plants were delivered to big-box stores throughout our distribution network. Customers Our products are currently sold at over 5,000 supermarket stores and food distributors across the Northeast, Midwest and Mid-Atlantic regions of the country.
Added
These products include: cut herbs; hydroponic basil; vitamin and protein powder products; sports nutrition; fermented hot sauces; chili oil products; pickles; and squeezable herbs. We believe that Edible Garden’s facilities comply with food safety and handling standards.
Removed
We are currently party to an ongoing, informal arrangement with our predecessor company, Edible Garden Corp., whereby we made lease payments of approximately $21,860 and $21,860 per month during the years ended December 31, 2023 and 2022, respectively, to the lessor of the land on which our Flagship Facility is built, Whitetown Realty, LLC (the “Landlord”), and for which our predecessor company is the lessee.
Added
To maintain our USDA Organic certification, we must submit: · our farm and handling plans annually; · to an annual inspection and audit of our greenhouse and how we handle aspects of our business; · to review of our organic documentation and records retention; · to review and testing of our water usage and irrigation systems, harvest and post-harvest processing; and supplier monitoring and control.
Removed
We effectively rent the property on a month-to-month basis with no set term. We do not have a lease in place directly with the lessor of the property that gives us the right to operate the property, and there is no written agreement between us and our predecessor company or us and the Landlord describing this arrangement.
Added
We believe that the power of our brand together with the quality, innovative packaging and traceability of our products allow all of our customers to associate Edible Garden with locally grown and sustainably sourced packaged herbs and vegetables.
Removed
We have not entered into a sub-lease or assignment of the agreement between our predecessor company and the Landlord, and we are not a party to or a beneficiary of the original lease between our predecessor company and the Landlord.
Added
Our tag line “Simply Local, Simply Fresh” is intended to describe our business plan: growing herbs in local farms in the regional communities where our customers sell our products so that the products stay fresher for longer.
Removed
We have been operating under this arrangement with the lessor for more than one year and do not expect to lose access to the property. We believe we will be able to continue operating the property because our operations and monthly payments benefit the current lessee, our predecessor company, and Landlord.
Added
Our acquisition strategy includes expanding our greenhouse capacity in order to reduce our dependence on contract growers which we believe will benefit our earnings power. Greenhouse expansion also supports our effort to grow local which reduces transportation costs. We also expect to make acquisitions that expand our consumer product offerings that leverage our channels to market.
Removed
Our predecessor company benefits from our effective assumption of the lease, because we are making lease payments that the predecessor company would otherwise be obligated to pay.
Added
In 2024, we transitioned the Heartland facility to focus primarily on our herb business, exiting lower margin lettuce and floral product lines. As a result, we experienced a positive contribution to our gross margin. We believe Edible Garden Heartland will continue to contribute to higher gross margin over time.
Removed
From the Landlord’s perspective, it has been receiving consistent lease payments from an operator of the property since at least 2015 and from us for over three years, and some of the same individuals that worked for our predecessor company at the New Jersey facility continue to work at the facility as Edible Garden employees.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuccessful integration involves many challenges, including: · the difficulty of integrating acquired operations and personnel with our existing operations; · the difficulty of developing, manufacturing, and marketing new products and services; · the diversion of our management’s attention as a result of evaluating, negotiating and integrating acquisitions; · in some cases, our exposure to unforeseen liabilities of acquired companies; and · the loss of key employees of an acquired business operation. 22 Table of Contents In addition, an acquisition could adversely impact cash flows, operating results, and stockholder interests, for many reasons, including: · contingent consideration payments; · the issuance of securities in connection with an acquisition or new business venture that dilutes or lessens the rights of our current stockholders; · charges to our income to reflect the impairment of acquired intangible assets, including goodwill; and · interest costs and debt service requirements for any debt incurred in connection with an acquisition or new business venture.
Biggest changeIn addition, an acquisition could adversely impact cash flows, operating results, and stockholder interests, for many reasons, including: · contingent consideration payments; · the issuance of securities in connection with an acquisition or new business venture that dilutes or lessens the rights of our current stockholders; · transaction bonuses to management; · charges to our income to reflect the impairment of acquired intangible assets, including goodwill; and · interest costs and debt service requirements for any debt incurred in connection with an acquisition or new business venture. 20 Table of Contents If we are not able to successfully integrate the assets from our acquisitions into our business, we could significantly increase our costs without realizing expected benefits, which would adversely affect our business, financial condition, and results of operations.
We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects. While the predecessor business has existed since 2013, our company has been in existence only since March 2020.
We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects. We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects. While the predecessor business has existed since 2013, our company has been in existence only since March 2020.
We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings. We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings.
We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings.
Under various statutes and regulations, these agencies prescribe requirements and establish standards for safety, purity, and labeling. In addition, the advertising for our products is subject to regulation by the FTC, and our operations are subject to certain health and safety regulations, including those issued under the Occupational Safety and Health Act.
Under various statutes and regulations, these agencies prescribe requirements and establish standards for safety, purity, and labeling. In addition, advertising for our products is subject to regulation by the FTC, and our operations are subject to certain health and safety regulations, including those issued under the Occupational Safety and Health Act.
Consumer purchases of specialty retail products, including our products, are discretionary in nature and are historically affected by economic conditions such as changes in employment, salary and wage levels, and confidence in prevailing and future economic conditions as may be affected by geopolitical events, political instability, trade restrictions, unseasonable weather, pandemics and other public health emergencies, as well as other factors that are outside of our control.
Consumer purchases of specialty retail products, including our products, are discretionary in nature and are historically affected by economic conditions such as changes in employment, salary and wage levels, and confidence in prevailing and future economic conditions as may be affected by geopolitical events, political instability, tariffs, trade restrictions, unseasonable weather, pandemics and other public health emergencies, as well as other factors that are outside of our control.
Economic uncertainty could also result in changing consumer preference and could reduce the demand for our products. Shifts in consumer spending could result in increased pressure from competitors or customers that may require us to increase promotional spending or reduce the prices of some products, which could then lower revenue and profitability.
Economic uncertainty could also result in changing consumer preferences and could reduce the demand for our products. Shifts in consumer spending could result in increased pressure from competitors or customers that may require us to increase promotional spending or reduce the prices of some products, which could then lower revenue and profitability.
There can be no assurance that we will be able to retain the ERC funds we have received to date. The cost to defend any litigation or regulatory action may be significant and may require a diversion of our resources.
There can be no assurance that we will be able to retain the ERC funds we have received to date. The cost to defend such litigation or regulatory action may be significant and may require a diversion of our resources.
The impact of seasonal demand and the sales cycle for our products may cause our results to vary from quarter to quarter, which may make an investment in us less attractive to some investors. 26 Table of Contents Increases in commodity or raw product input costs, such as fuel and packaging materials, could increase costs significantly.
The impact of seasonal demand and the sales cycle for our products may cause our results to vary from quarter to quarter, which may make an investment in us less attractive to some investors. Increases in commodity or raw product input costs, such as fuel and packaging materials, could increase costs significantly.
This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. We will continue to incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results.
This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. 29 Table of Contents We will continue to incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results.
Any bankruptcy or other business disruption involving one of our significant customers also could adversely affect our results of operations. 19 Table of Contents Our business is characterized by low margins, which are sensitive to inflationary and deflationary pressures, and intense competition and consolidation in the grocery industry, and our inability to increase our gross margins could adversely affect our results of operations.
Any bankruptcy or other business disruption involving one of our significant customers also could adversely affect our results of operations. Our business is characterized by low margins, which are sensitive to inflationary and deflationary pressures, and intense competition and consolidation in the grocery industry, and our inability to increase our gross margins could adversely affect our results of operations.
Our inability to obtain additional funding when needed could seriously harm our business or make it impossible for us to continue to operate our business. 17 Table of Contents Our business may be adversely affected by the departure of members of our management team. Our success depends, in large part, on the continued contributions of our executives.
Our inability to obtain additional funding when needed could seriously harm our business or make it impossible for us to continue to operate our business. Our business may be adversely affected by the departure of members of our management team. Our success depends, in large part, on the continued contributions of our executives.
In addition, executive leadership transition periods, including adding new personnel, could be difficult as new executives gain an understanding of our business and strategy. Mr. James’ departure and difficulty integrating new executives could limit our ability to successfully execute our business strategy and could have a material adverse effect on our business, results of operations and financial condition.
In addition, executive leadership transition periods, including adding new personnel, could be difficult as new executives gain an understanding of our business and strategy. Difficulty integrating new executives could limit our ability to successfully execute our business strategy and could have a material adverse effect on our business, results of operations and financial condition.
Information posted may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business. The harm may be immediate and may disseminate rapidly and broadly, without affording us an opportunity for redress or correction. 23 Table of Contents We are subject to risk of product contamination and product liability claims.
Information posted may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business. The harm may be immediate and may disseminate rapidly and broadly, without affording us an opportunity for redress or correction. We are subject to risk of product contamination and product liability claims.
The net cash used in operating activities was $8.5 million and $9.2 million for the years ended December 31, 2023 and 2022, respectively. We cannot be certain that we will be able to obtain financing on favorable terms, if at all, and any financings could result in additional dilution to holders of our common stock.
The net cash used in operating activities was $8.5 million and $8.5 million for the years ended December 31, 2024 and 2023, respectively. We cannot be certain that we will be able to obtain financing on favorable terms, if at all, and any financings could result in additional dilution to holders of our common stock.
Our success depends, in part, on our ability to obtain patent protection for or maintain as trade secrets our proprietary products, technologies and inventions and to maintain the confidentiality of our trade secrets and know‑how, operate without infringing upon the proprietary rights of others and prevent others from infringing upon our business proprietary rights.
Our success depends, in part, on our ability to obtain patent protection for or maintain as trade secrets our proprietary products, technologies and inventions and to maintain the confidentiality of our trade secrets and knowhow, operate without infringing upon the proprietary rights of others and prevent others from infringing upon our business proprietary rights.
If we are unable to increase our gross margins, our results of operations will be adversely affected. Our relationships with customers and suppliers are primarily based on purchase orders rather than long-term purchase commitments.
If we are unable to increase our gross margins, our results of operations will be adversely affected. 17 Table of Contents Our relationships with customers and suppliers are primarily based on purchase orders rather than long-term purchase commitments.
If we fail to accurately assess and successfully integrate any recent or future acquisitions, we may not achieve the anticipated benefits, which could result in lower revenue, unanticipated operating expenses, and increased losses.
If we fail to accurately assess and successfully integrate any recent or future acquisitions such as the Transaction, we may not achieve the anticipated benefits, which could result in lower revenue, unanticipated operating expenses, and increased losses.
If we are unable to raise additional capital, we believe that the existing cash will fund operations into the second quarter of 2024 and will not be sufficient to fund our operations through the next twelve months beyond the date of the issuance of our consolidated financial statements. Our operations have consumed substantial amounts of cash since inception.
If we are unable to raise additional capital, we believe that the existing cash will fund operations into the third quarter of 2025 and will not be sufficient to fund our operations through the next twelve months beyond the date of the issuance of our consolidated financial statements. Our operations have consumed substantial amounts of cash since inception.
You may not realize a return on your investment in our common stock and you may even lose your entire investment in our common stock. 28 Table of Contents We may seek to raise funds, finance acquisitions or develop strategic relationships in the future by issuing securities that would dilute your ownership.
You may not realize a return on your investment in our common stock and you may even lose your entire investment in our common stock. We may seek to raise funds, finance acquisitions or develop strategic relationships in the future by issuing securities that would dilute your ownership.
In particular: · we may be unable to raise equity capital on acceptable terms or at all; · we may lose the confidence of our customers, which would jeopardize our ability to continue our business as currently conducted; · the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws; · holders may be unable to sell or purchase our securities when they wish to do so; · we may become subject to stockholder litigation; · we may lose the interest of institutional investors in our common stock; · we may lose media and analyst coverage; · our common stock could be considered a “penny stock,” which would likely limit the level of trading activity in the secondary market for our common stock; and · we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets, if at all. 27 Table of Contents We cannot assure you that the Reverse Stock Split will increase the price of our common stock.
In particular: · we may be unable to raise equity capital on acceptable terms or at all; · we may lose the confidence of our customers, which would jeopardize our ability to continue our business as currently conducted; · the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws; · holders may be unable to sell or purchase our securities when they wish to do so; · we may become subject to stockholder litigation; · we may lose the interest of institutional investors in our common stock; · we may lose media and analyst coverage; · our common stock could be considered a “penny stock,” which would likely limit the level of trading activity in the secondary market for our common stock; and · we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets, if at all.
Our business is not diversified and consists primarily of growing, shipping and selling fresh herbs and lettuce, along with plant-based protein and a line of gourmet sauces and chili-based products. Consumers’ preferences change rapidly and without warning, moving from one trend to another among many retail concepts.
Our business is not diversified and consists primarily of growing, shipping and selling fresh herbs, along with plant-based protein, sports nutrition, a line of gourmet sauces, pickles, chili-based products, and squeezable herbs. Consumers’ preferences change rapidly and without warning, moving from one trend to another among many retail concepts.
Substantial increases in the prices for our raw materials increase our operating costs and could reduce our margins if we cannot recoup the increased costs through increased prices for our products and services. 29 Table of Contents Litigation or regulatory actions may adversely affect our business, financial condition and results of operations.
Substantial increases in the prices for our raw materials increase our operating costs and could reduce our margins if we cannot recoup the increased costs through increased prices for our products and services. 28 Table of Contents Litigation may adversely affect our business, financial condition and results of operations.
We may implement new lines of business, such as the Pulp sauces, or offer new products and services within existing lines of business. As an early-stage company, we may implement new lines of business at any time.
We may implement new lines of business, such as the Pulp sauces, Pickle Party, and Kick. Sports Nutrition, or offer new products and services within existing lines of business. As an early-stage company, we may implement new lines of business at any time.
We have incurred significant losses since our inception. We experienced net losses of approximately $10.2 million and $12.5 million for the years ended December 31, 2023 and 2022, respectively.
We have incurred significant losses since our inception. We experienced net losses of approximately $11.1 million and $10.2 million for the years ended December 31, 2024 and 2023, respectively.
If we fail to develop products in more profitable categories, we could fail to expand margins. Due to this competition, there is no assurance that we will not encounter difficulties in increasing revenue and maintaining and/or increasing market share. In addition, increased competition may lead to reduced prices and/or margins for products we sell.
If we fail to develop products in more profitable categories, we could fail to expand margins. Due to this competition, there is no assurance that we will not encounter difficulties in increasing revenue and maintaining and/or increasing market share.
We cannot assure you that any of our existing or future patents or other intellectual property rights will be enforceable, will not be challenged, invalidated or circumvented, or will otherwise provide us with meaningful protection or any competitive advantage. In addition, our two pending patent applications may not be granted.
We cannot assure you that any of our existing or future patents or other intellectual property rights will be enforceable, will not be challenged, invalidated or circumvented, or will otherwise provide us with meaningful protection or any competitive advantage.
If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, or misappropriation of our intellectual property by third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition.
If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, or misappropriation of our intellectual property by third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition. 22 Table of Contents Our business could be negatively impacted by cyber security threats, attacks and other disruptions.
Increases in costs, disruption of supply or shortage of raw materials could harm our business. We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. For example, the tariffs currently imposed for importing goods from China has significantly increased.
Increases in costs, disruption of supply or shortage of raw materials could harm our business. We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. For example, the tariffs currently imposed and contemplated for importing goods from key international supply chain locations have significantly increased.
During the year ended December 31, 2023, 83.1% of our total revenue was attributed to five customers (44.4% of which was attributed to sales to one customer). During the year ended December 31, 2022, 76% of our total revenue was attributed to three customers.
During the year ended December 31, 2024, 82.0% of our total revenue was attributed to four customers (44.0% of which was attributed to sales to one customer). During the year ended December 31, 2023, 83.1% of our total revenue was attributed to five customers (44.4% of which was attributed to sales to one customer).
Our certificate of incorporation designate s the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or increase the stockholder’s costs in bringing such a claim.
These provisions may also limit the ability of stockholders to approve transactions that they may deem to be in their best interests. 27 Table of Contents Our certificate of incorporation designate s the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or increase the stockholder’s costs in bringing such a claim.
We have historically earned most of our revenue from a limited number of customers, and if we lose any of these customers or if we are unable to replace the revenue through the sale of our products to additional customers, our financial condition and results from operations would be materially and adversely affected.
If we do not manage these risks successfully, our business and financial performance will be adversely affected. 16 Table of Contents We have historically earned most of our revenue from a limited number of customers, and if we lose any of these customers or if we are unable to replace the revenue through the sale of our products to additional customers, our financial condition and results from operations would be materially and adversely affected.
At December 31, 2023, approximately 80.4% of our gross outstanding trade receivables were attributed to four customers (41.1% of which was due from one customer). As of December 31, 2022, approximately 68.0% of our gross outstanding trade receivables were attributed to three customers. These customers generally do not enter into long-term contracts.
At December 31, 2024, approximately 87.5% of our gross outstanding trade receivables were attributed to five customers (45.6% of which was due from one customer). At December 31, 2023, approximately 80.4% of our gross outstanding trade receivables were attributed to four customers (41.1% of which was due from one customer). These customers generally do not enter into long-term contracts.
We are an “emerging growth company,” as defined in the JOBS Act, and a “smaller reporting company” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies will make our common stock less attractive to investors.
These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares. 26 Table of Contents We are an “emerging growth company,” as defined in the JOBS Act, and a “smaller reporting company” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies will make our common stock less attractive to investors.
If actual results differ from our estimates, additional charges for asset impairments may be required in the future. If future impairment charges are significant, our reported operating results would be adversely affected.
If actual results differ from our estimates, additional charges for asset impairments may be required in the future. In the past, we have had to record impairment charges that have negatively impacted our net income. If future impairment charges are significant, our reported operating results would be adversely affected.
Accordingly, any change in the availability of these local raw materials could adversely affect our operating results. 21 Table of Contents Because our business is concentrated on a limited set of products, we are vulnerable to changes in consumer preferences and changes in economic conditions affecting disposable income that could harm our financial results.
Because our business is concentrated on a limited set of products, we are vulnerable to changes in consumer preferences and changes in economic conditions affecting disposable income that could harm our financial results.
Any such an increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials in our business including aluminum. The prices for these raw materials fluctuate depending on market conditions and global demand for these materials and could adversely affect our business and operating results.
Any such an increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials in our business including aluminum and fertilizer.
Any of the foregoing events would lead to increased competition and lower revenue or gross margins, which could adversely affect our operating results. 24 Table of Contents Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information, and our inability to maintain the confidentiality of that information, due to unauthorized disclosure or use, or other event, could have a material adverse effect on our business.
Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information, and our inability to maintain the confidentiality of that information, due to unauthorized disclosure or use, or other event, could have a material adverse effect on our business.
Our failure to meet these requirements would result in our common stock being delisted from Nasdaq, and if our common stock is delisted, our warrants will also be delisted. We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq.
The Panel may determine to delist our securities from Nasdaq. If our common stock is delisted, our warrants will also be delisted. We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq.
We expect our capital expenses and operational expenses to increase in the future due to increased sales and marketing expenses, operational costs, packhouse construction costs, and general and administrative costs and, therefore, our operating losses will continue or even increase at least through the near term.
We expect our capital and operational expenses to remain at historical levels as a percent of revenue in the future due to sales and marketing investments, packhouse construction costs, costs to continue our growth strategy, and general and administrative costs. Therefore, our operating losses will continue through the near term.
The doubts raised relating to our ability to continue as a going concern may make our shares an unattractive investment for potential investors, which may make it difficult to raise any additional capital and may cause us to be unable to continue to operate our business.
The doubts raised relating to our ability to continue as a going concern may make our shares an unattractive investment for potential investors, which may make it difficult to raise any additional capital and may cause us to be unable to continue to operate our business. 15 Table of Contents We will need to obtain additional financing to fund our operations, which may not be available on favorable terms, if at all, and if we are unable to obtain such financing, we may be unable to operate and continue our business.
In addition, general public perceptions regarding the quality, safety, or health risks associated with particular food products could reduce demand for some of our products. Food safety warnings, advisories, notices, and recalls, such as those administered by the FDA, the Center for Disease Control and Prevention, and other federal/state government agencies, could also reduce demand.
Food safety warnings, advisories, notices, and recalls, such as those administered by the FDA, the Center for Disease Control and Prevention, and other federal/state government agencies, could also reduce demand.
If these increases continue or worsen, including due to inflationary pressures, and we are unable to pass those increased costs on to our customers, our gross margin will decline and our financial results would be negatively impacted. We may not successfully integrate assets from acquisitions.
If these increases continue or worsen, including due to inflationary pressures, and we are unable to pass those increased costs on to our customers, our gross margin will decline and our financial results would be negatively impacted. 19 Table of Contents The announcement of the proposed transaction with the Narayan Group, which may not be completed, may adversely affect our business and results of operations.
Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertion that our products caused illness or injury could adversely affect our reputation with existing and potential customers and our brand image, which could significantly harm our business.
Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertion that our products caused illness or injury could adversely affect our reputation with existing and potential customers and our brand image, which could significantly harm our business. 21 Table of Contents We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings.
We may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance.
Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible. We may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance.
We may need to enter into intellectual property license agreements in the future, and if we are unable to obtain these licenses, our business could be harmed.
We may need to enter into intellectual property license agreements in the future, and if we are unable to obtain these licenses, our business could be harmed. Any of the foregoing events would lead to increased competition and lower revenue or gross margins, which could adversely affect our operating results.
These attacks may include sophisticated malware (viruses, worms, and other malicious software programs) and phishing emails that attack our products or otherwise exploit any security vulnerabilities. These intrusions sometimes may be zero-day malware that are difficult to identify because they are not included in the signature set of commercially available antivirus scanning programs.
These intrusions sometimes may be zero-day malware that are difficult to identify because they are not included in the signature set of commercially available antivirus scanning programs.
On October 24, 2023, we received a letter from the Listing Qualifications Staff of Nasdaq indicating that, based on the closing bid price of our common stock for 30 consecutive business days, we no longer meet Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of at least $1 per share (the “Bid Price Rule”).
On October 21, 2024, we received a letter from the Staff of Nasdaq indicating that, based upon the closing bid price of our common stock for at least 30 consecutive business days, we no longer met the Bid Price Rule.
We could be required to dispose of material assets or operations to meet our debt service and other obligations, and the value realized on such assets or operations will depend on market conditions and the availability of buyers. Accordingly, any such sale may not, among other things, be for a sufficient dollar amount.
If we were to default on our obligations under these loans and arrangements, the counterparties would have the right to our assets. We could be required to dispose of material assets or operations to meet our debt service and other obligations, and the value realized on such assets or operations will depend on market conditions and the availability of buyers.
The selling price received for our products may depend on a variety of factors, including timing of the sale, the availability and quality of the produce item in the market, and the availability and quality of competing produce.
The selling price received for our products may depend on a variety of factors, including timing of the sale, the availability and quality of the produce item in the market, and the availability and quality of competing produce. 24 Table of Contents In addition, general public perceptions regarding the quality, safety, or health risks associated with particular food products could reduce demand for some of our products.
For example, in the first quarter of 2023, we launched a line of gourmet sauces and chili-based products to expand our reach into supermarkets. There are substantial risks and uncertainties associated with these efforts, particularly in instances where we have limited experience with the new lines of business or products or the markets are not fully developed.
There are substantial risks and uncertainties associated with these efforts, particularly in instances where we have limited experience with the new lines of business or products or the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources.
Additionally, a significant theft, loss or misappropriation of, or access to, customers’ or other proprietary data or other breach of our information technology systems could result in fines, legal claims or proceedings. 25 Table of Contents Risks Related to Our Industry Failure to obtain necessary permits or otherwise comply with USDA regulations and requirements could result in a ban or temporary suspension of our ability to grow, manufacture or market our products as organic, and thus could materially adversely affect our business.
In the event that the counterparties enforced their rights to our assets, we may have to discontinue our business, and our stockholders could lose all or a part of their investment in us. 23 Table of Contents Risks Related to Our Industry Failure to obtain necessary permits or otherwise comply with USDA regulations and requirements could result in a ban or temporary suspension of our ability to grow, manufacture or market our products as organic, and thus could materially adversely affect our business.
In addition, the balance under the Standard Merchant Cash Advance Agreement (the “Advance Agreement”) with Cedar Advance LLC (“Cedar”) is collateralized by our cash and receivable accounts. If we were to default on our obligations under these loans and arrangements, the counterparties would have the right to our assets.
If we were to default on our obligations under these loans and arrangements, the secured counterparties would have the right to our assets.
General Risk Factors A prolonged economic downturn could adversely affect our business. Uncertain global economic conditions could adversely affect our business.
General Risk Factors A prolonged economic downturn could adversely affect our business. General economic conditions and other economic factors in one or more of the markets we serve, may adversely affect our financial performance.
Our business could be negatively impacted by cyber security threats, attacks and other disruptions. We face advanced and persistent attacks on our information infrastructure where we manage and store various proprietary information and sensitive/confidential data relating to our operations.
We face advanced and persistent attacks on our information infrastructure where we manage and store various proprietary information and sensitive/confidential data relating to our operations. These attacks may include sophisticated malware (viruses, worms, and other malicious software programs) and phishing emails that attack our products or otherwise exploit any security vulnerabilities.
Additionally, we are subject to regional economic volatilities since our potential growing capacity is located in a few areas, including Belvidere, New Jersey; Francesville, Indiana; Grand Rapids, Michigan; and Hixton, Wisconsin. Our use of hydroponic farming requires that it rely on local disease-free water sources and growing materials.
These and other factors affecting our suppliers, our access to products and our access to service providers, could adversely affect our operations and operating results. 18 Table of Contents Additionally, we are subject to regional economic volatilities since our potential growing capacity is located in a few areas, including Belvidere, New Jersey; Grand Rapids, Michigan; and Ojai, California.
If we were to otherwise attempt to sell material assets or operations, the foregoing encumbrances may limit our ability to dispose of material assets or operations. In the event that the counterparties enforced their rights to our assets, we may have to discontinue our business, and our stockholders could lose all or a part of their investment in us.
Accordingly, any such sale may not, among other things, be for a sufficient dollar amount. If we were to otherwise attempt to sell material assets or operations, the foregoing encumbrances may limit our ability to dispose of material assets or operations.
The promissory note initially issued to Sament Capital Investments, Inc. and later assigned to third parties (the “Sament Note”) is secured by a security interest in all of our assets located at the New Jersey Facility, and the promissory note issued to the seller of Edible Garden Heartland (the “Michigan Note”) is secured by a mortgage on Edible Garden Heartland and a security interest in the assets at Edible Garden Heartland.
The promissory note issued in connection with our purchase Edible Garden Heartland is secured by a mortgage on Edible Garden Heartland and a security interest in the assets at Edible Garden Heartland. In addition, the balance under a standard merchant cash advance agreement with Cedar Advance LLC is collateralized by our cash and receivable accounts.
Removed
We will need to obtain additional financing to fund our operations, which may not be available on favorable terms, if at all, and if we are unable to obtain such financing, we may be unable to operate and continue our business.
Added
Adverse weather, natural disasters and other conditions affecting the environment, including the effects of climate change, could result in substantial losses and weaken our financial condition. Our products are vulnerable to adverse weather conditions, which are common but difficult to predict. The effects of natural disasters may be intensified by the ongoing global climate change.
Removed
Effective January 25, 2024, our Chief Financial Officer retired from all of his roles with us. There is no assurance that we will be able to identify, attract or hire another permanent Chief Financial Officer in a timely manner. Although we have additional personnel that contribute to our business, Mr.
Added
Severe weather conditions have and are expected to continue and could adversely affect our supply of one or more fresh produce items, reduce our sales volumes, increase our unit production costs or prevent or impair our ability to ship products as planned.
Removed
James’ departure could materially adversely affect our ability to implement our business strategy, operate our day-to-day business, respond to the rapidly changing market conditions in which we operate, raise additional capital, develop our system of internal control over financial reporting and timely file our required reports with the SEC.
Added
When severe weather, wildfires, natural disasters, and other adverse environmental conditions (i) destroy products planted in our greenhouses or our contract growers’ greenhouses or (ii) prevent us from distributing these products on a timely basis, we may lose our investment in those products and/or our costs of purchased products may increase.
Removed
In light of the Company’s current and historical negative cash flows, management reviewed the equipment and leasehold improvements acquired from the predecessor for impairment, and concluded the future cash flows generated from these assets will not be sufficient to recover their total carrying amount of approximately $762 thousand as of December 31, 2023.
Added
These risks can be exacerbated when a substantial portion of our production of a specific product is grown in one region, provided by a limited number of contract growers, or when it endangers one of our products. Adverse weather may also impact our supply chains, preventing us from procuring necessary supplies and delivering our products to our customers.
Removed
As a result of the analysis performed, an impairment charge of $685,967, equal to the difference between the book value of the assets and the estimated salvage value was recorded during the year ended December 31, 2023. Accordingly, ,our net loss was greater than it would have been in the absence of the impairment charge.
Added
We could be unable to fulfill customer orders due to severe weather, wildfires and natural disasters. Such severe weather events that could materially disrupt our operations may occur with higher frequency because of climate change. Our performance may be impacted by general and regional economic volatility, inflation, tariffs, or an economic downturn.
Removed
We currently operate our Flagship Facility pursuant to an informal arrangement with our predecessor and the lessor of the land instead of a lease. We currently do not have a formal lease to the land on which our Flagship Facility, in Belvidere, New Jersey, is built.
Added
In addition to the economic factors listed above, any other economic factors or circumstances resulting in higher transportation, labor, insurance or healthcare costs or commodity prices, including energy prices, and other economic factors in the U.S. and other countries in which we operate can increase our cost of sales and operating, selling, general and administrative expenses and otherwise materially adversely affect our operations and operating results.
Removed
We are currently party to an ongoing, informal arrangement with our predecessor company, Edible Garden Corp., whereby we make lease payments of approximately $21,860 per month to the Landlord, and for which our predecessor company is the lessee. We effectively rent the property on a month-to-month basis with no set term.
Added
U.S. and international trade policies, tariffs, trade barriers and other restrictions on the importation of goods, trade sanctions imposed between certain countries and entities, limitations on the importation of certain types of goods or of goods containing certain materials from other countries and other factors relating to foreign trade are beyond our control.
Removed
We do not have a lease in place directly with the lessor of the property that gives us the right to operate the property, and there is no written agreement between us and our predecessor company or us and the Landlord describing this arrangement.
Added
Our use of hydroponic farming requires that it rely on local disease-free water sources and growing materials. Accordingly, any change in the availability of these local raw materials could adversely affect our operating results.
Removed
We have not entered into a sub-lease or assignment of the agreement between our predecessor company and the Landlord, and we are not a party to or a beneficiary of the original lease between our predecessor company and the Landlord.
Added
Uncertainty about the effect of the proposed transaction to purchase the outstanding share capital of Narayan d.o.o. and its subsidiaries (“Narayan Group”), a producer of organic coconut and superfood products, on our employees, customers, and other parties may have an adverse effect on our business or results of operations regardless of whether the proposed transaction is completed.
Removed
Accordingly, we are subject to the risk that we will lose access to the property if the lessor were to evict us from the facility and property.
Added
These risks include, but are not limited to, the following, all of which could be increased by a delay in or abandonment of the transaction: · significant management time and resources could be diverted to the consummation of the proposed transaction instead of our day-to-day operations; · if the proposed transaction is not completed, we may never recover the value of the funds advanced to the Narayan Group to support their operations; · relationships with customers, contract growers and suppliers could be affected; · we may not be able to pursue alternative business opportunities or make appropriate changes to our business; · our ability to attract, retain, and motivate employees, including key personnel, could be impaired; · litigation relating to the proposed transaction could arise; and · significant costs, expenses, and fees for professional services and other transaction costs in connection with the Transaction have been and may continue to be incurred.
Removed
If we were unable to access the property and continue operations in Belvidere, New Jersey, we may: · lose the ability to continue growing as great a quantity of herbs and lettuce; · incur costs in locating and leasing or purchasing a substitute for the Flagship Facility; · incur costs in purchasing new equipment or improving equipment at a new leased facility; · incur increased costs in filling purchase orders from our customers from contract growers; · lose access to the skilled employees that operate the Flagship Facility, if we were to relocate those operations; · risk our earned reputation with customers if there is a disruption in our business; and · harm our reputation in our community.
Added
The negotiation and pendency of the proposed transaction may also exacerbate other risks discussed elsewhere in this “Risk Factors” section, any of which could have a material effect on us. Our failure to consummate the proposed transaction could result in negative publicity and a negative impression of our Company among our customers and suppliers.
Removed
If those risks occur, we may be unable to continue our business and you could lose the entire value of your investment in us. 18 Table of Contents We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Service Provider routinely reviews and updates our antivirus and antimalware software, monitors our intrusion detection system and intrusion protection system and reviews and cleans our corporate email system. Other than engaging the Service Provider prior to our initial public offering, given our overall risk profile, the Board has had limited involvement with our cybersecurity risk management.
Biggest changeOther than engaging the Service Provider prior to our initial public offering, given our overall risk profile, the Board has had limited involvement with our cybersecurity risk management. The management team, with support from the Service Provider, would raise any significant cybersecurity risks with the Board.
The IRP lays out our guidelines for responding to and handling cyber incidents. The IRP helps to ensure a quick and organized response in the event of a cyber incident and helps ensure all necessary members of management are informed so action can be taken as soon as possible.
The IRP helps to ensure a quick and organized response in the event of a cyber incident and helps ensure all necessary members of management are informed so action can be taken as soon as possible.
The management team, with support from the Service Provider, would raise any significant cybersecurity risks with the Board. Risk Management and Strategy We believe we have implemented processes that are designed to effectively manage risks from cybersecurity threats. Through our Service Provider, we have established an Incident Response Plan (the “IRP”).
Risk Management and Strategy We believe we have implemented processes that are designed to effectively manage risks from cybersecurity threats. Through our Service Provider, we have established an Incident Response Plan (the “IRP”). The IRP lays out our guidelines for responding to and handling cyber incidents.
Item 1C. CYBERSECURITY Cyber Security Governance Oversight of cybersecurity infrastructure is managed by members of our management team, including our Chief Executive Officer and Chief Data Officer. Management works in tandem with a third-party service provider (the “Service Provider”).
Item 1C. CYBERSECURITY Cyber Security Governance Oversight of cybersecurity infrastructure is managed by members of our management team, including our Chief Executive Officer and Interim Chief Financial Officer.
Added
Management works in tandem with a third-party service provider (the “Service Provider”) who routinely reviews and updates our antivirus and antimalware software, monitors our intrusion detection system and intrusion protection system and reviews and cleans our corporate email system.

Item 2. Properties

Properties — owned and leased real estate

1 edited+3 added−3 removed3 unchanged
Biggest changeWe guaranteed the Michigan Subsidiary’s obligation to repay the amounts due under the mortgage on Edible Garden Heartland. We operate our Flagship Facility, a 5-acre greenhouse location in Belvidere, New Jersey, and effectively rent the Flagship Facility on a month-to-month basis. We currently do not have a formal lease to the land on which our Flagship Facility is built.
Biggest changeWe guaranteed the Michigan Subsidiary’s obligation to repay the amounts due under the mortgage on Edible Garden Heartland. We operate our Flagship Facility, a 5-acre greenhouse location in Belvidere, New Jersey. On October 1, 2024, we acquired Edible Garden Corp. (“EGC”) from Unrivaled Brands, Inc., our former parent company, for the nominal price of $1.00.
Removed
We are party to an ongoing, informal arrangement with our predecessor company, Edible Garden Corp., whereby we make lease payments of approximately $21,860 per month to the Landlord, and for which our predecessor company is the lessee.
Added
At our inception, we acquired substantially all of the assets of EGC from Unrivaled Brands, Inc., except for the lease agreement between EGC and the Landlord, made as of December 30, 2014 (the “Lease Agreement”), as amended by a lease extension agreement between EGC and the Landlord dated September 10, 2019 (the “Lease Extension,” together with the Lease Agreement, the “Lease”), for a 5-acre greenhouse location in Belvidere, New Jersey.
Removed
We do not have a lease in place directly with the lessor of the property that gives us the right to operate the property, and there is no written agreement between us and our predecessor company or us and the Landlord describing this arrangement.
Added
As a result, prior to October 1, 2024, we operated the New Jersey property through an informal arrangement with EGC in which the Company effectively rented the property on a month-to-month basis with no set term. On October 1, 2024, upon the closing of its acquisition of EGC, we assumed the Lease and became subject to its terms.
Removed
We have not entered into a sub-lease or assignment of the agreement between our predecessor company and the Landlord, and we are not a party to or a beneficiary of the original lease between our predecessor company and the Landlord.
Added
The Lease has a term that commenced on January 1, 2015 and ends on December 31, 2029. Under the terms of the Lease, we will pay the Landlord a monthly lease payment of approximately $22,500 in 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed2 unchanged
Biggest changeItem 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock, par value $0.0001 (the “common stock”), is listed on the Nasdaq Capital Market under the symbol “EDBL”. As of March 25, 2024, we had 1,618 stockholders of record.
Biggest changeItem 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock, par value $0.0001 (the “common stock”), is listed on the Nasdaq Capital Market under the symbol “EDBL”. As of March 14, 2025, we had 16 stockholders of record.
We have never paid cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business.
Dividends We have never paid cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion of our business.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

39 edited+36 added−37 removed35 unchanged
Biggest changeOur focus on sustainability, traceability, and social contribution, which we define as an ongoing effort to improve employee relations, working conditions, and local communities, presents our value proposition to our customers and supermarket partners and distributors. 33 Table of Contents RECENT DEVELOPMENTS Departure of Chief Financial Officer; Appointment of Interim Chief Financial Officer Effective January 25, 2024, Michael James retired from his positions as Chief Financial Officer, Treasurer, Secretary and Director of the Company.
Biggest changeThe brand not only lends itself to our current portfolio of products but allows us to develop other products in the “Consumer Brands” category. Our focus on sustainability, traceability, and social contribution, which we define as an ongoing effort to improve employee relations, working conditions, and local communities, presents our value proposition to our customers and supermarket partners and distributors.
Our controlled greenhouse facilities allow us to grow consistent quality herbs and lettuces year-round, first by eliminating some of the variability of outdoor farming with our CEA techniques, and second by leveraging our proprietary software, GreenThumb. In addition to using hydroponic and vertical greenhouse systems, we use a “closed loop” system in our greenhouses.
Our controlled greenhouse facilities allow us to grow consistent quality herbs year-round, first by eliminating some of the variability of outdoor farming with our CEA techniques, and second by leveraging our proprietary software, GreenThumb. In addition to using hydroponic and vertical greenhouse systems, we use a “closed loop” system in our greenhouses.
GreenThumb is a web-based greenhouse management and demand planning system that does the following: · integrates in real-time with our cloud business software suite for monitoring daily sales data; · generates reports by category, product, customer, and farm to allow us to analyze sales, trends, margins and retail shrink (spoiled product); · provides dynamic pallet mapping for packout, which enables us to more efficiently ship our products; · utilizes a proprietary algorithm that uses year-over-year and trending sales data to develop customer specific and aggregate product specific forecasting for our greenhouses; · aggregates all greenhouse activity input to provide real-time inventory and availability reports of all products in our greenhouses; · manages our online ordering system with user controlled product availability based upon greenhouse inventory; · provides a route management system for coordinating the logistics of our direct store delivery program; and · tracks all production activities at greenhouses, including sowing, spacing, dumping, spraying, picking and packing, using hand held devices.
GreenThumb is a web-based greenhouse management and demand planning system that does the following: · integrates in real-time with our cloud business software suite for monitoring daily sales data; · generates reports by category, product, customer, and farm to allow us to analyze sales, trends, margins and retail shrink (spoiled product); · provides dynamic pallet mapping for packout, which enables us to more efficiently ship our products; · utilizes a proprietary algorithm that uses year-over-year and trending sales data to develop customer specific and aggregate product specific forecasting for our greenhouses; · aggregates all greenhouse activity input to provide real-time inventory and availability reports of all products in our greenhouses; · manages our online ordering system with user-controlled product availability based upon greenhouse inventory; · provides a route management system for coordinating the logistics of our direct store delivery program; and · tracks all production activities at greenhouses, including sowing, spacing, dumping, spraying, picking and packing, using handheld devices.
Management believes the estimates and judgments most critical to the preparation of our consolidated financial statements and to the understanding of our reported financial results include allowance for doubtful accounts. The following are the accounting policies most critical to the preparation of our consolidated financial statements.
Management believes the estimates and judgments most critical to the preparation of our consolidated financial statements and to the understanding of our reported financial results include allowance for doubtful accounts. The following are the accounting estimates most critical to the preparation of our consolidated financial statements.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures should be read in conjunction with our audited consolidated financial statements and related notes included in this Annual Report on Form 10-K for the year ended December 31, 2023.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures should be read in conjunction with our audited consolidated financial statements and related notes included in this Annual Report on Form 10-K for the year ended December 31, 2024.
Loss from extinguishment of debt During the year ended December 31, 2023, the Company recognized a gain from the extinguishment of debt of $70 thousand by prepaying a promissory note owed to Sament Capital Investments (“Sament”).
During the year ended December 31, 2023, the Company recognized a gain from the extinguishment of debt of $70 thousand by prepaying a promissory note owed to Sament Capital Investments.
This means that we are better able to control shipping our products in full truck loads, thus eliminating multiple deliveries and decreasing the excess emission of greenhouse gases that would result from many partially full trucks delivering our products.
This means that we are better able to control shipping our products in full truck loads and retailer backhaul programs, thus eliminating multiple deliveries and decreasing the excess emission of greenhouse gases that would result from many partially full trucks delivering our products.
If we are unable to raise additional capital, we believe that the existing cash will fund operations into the second quarter of 2024 and will not be sufficient to fund our operations through the next twelve months beyond the date of the issuance of our consolidated financial statements. Our operations have consumed substantial amounts of cash since inception.
If we are unable to raise additional capital, we believe that the existing cash will fund operations into the third quarter of 2025 and will not be sufficient to fund our operations through the next twelve months beyond the date of the issuance of our consolidated financial statements. Our operations have consumed substantial amounts of cash since inception.
We use the controlled environment of traditional greenhouse structures, such as glass greenhouses, together with hydroponic and vertical greenhouses to sustainably grow organic herbs, lettuces and floral products. In our hydroponic greenhouse, we grow plants without soil.
We use the controlled environment of traditional greenhouse structures, such as glass greenhouses, together with hydroponic and vertical greenhouses to sustainably grow organic herbs. In our hydroponic greenhouse, we grow plants without soil.
The combination of the GreenThumb software, quality assurance and control processes (including compliance with food safety standards), and feedback from consumers and purchasers holds us accountable for maintaining the quality of our herbs and lettuce.
The combination of the GreenThumb software, quality assurance and control processes (including compliance with food safety standards), and feedback from consumers and purchasers holds us accountable for maintaining the quality of our products.
The net cash used in operating activities was $8.531 million and $9.185 million for the years ended December 31, 2023 and 2022, respectively. Our financial statements have been prepared on a “going concern” basis, which implies we may not continue to meet our obligations and continue our operations for the next twelve months.
The net cash used in operating activities was $8.52 million and $8.53 million during the years ended December 31, 2024 and 2023, respectively. Our financial statements have been prepared on a “going concern” basis, which implies we may not continue to meet our obligations and continue our operations for the next twelve months.
The Company’s liquidity needs have been met primarily through public equity offerings, term loan borrowings, convertible notes, and related party loans. 37 Table of Contents As of December 31, 2023 and December 31, 2022, we had $510 thousand and $110 thousand in cash and cash equivalents available, respectively.
The Company’s liquidity needs have been met primarily through public equity offerings, term loan borrowings, convertible notes, and related party loans. 38 Table of Contents As of December 31, 2024 and December 31, 2023, we had $3.5 million and $510 thousand in cash and cash equivalents available, respectively.
At December 31, 2023 and December 31, 2022, such net operating losses were offset entirely by a valuation allowance. 35 Table of Contents The Company recognizes uncertain tax positions based on a benefit recognition model.
At December 31, 2024 and December 31, 2023, such net operating losses were offset entirely by a valuation allowance. The Company recognizes uncertain tax positions based on a benefit recognition model.
Weekly, we are required to pay Cedar 25.0% of all funds collected from customers for the sale of goods and services. Weekly, Cedar is authorized to withdraw $53,250 of funds from our bank account until such time a reconciliation is provided calculating the 25.0% of collections owed to Cedar, until such time the total balance of $1,491,000 is repaid.
Weekly, we are required to pay Cedar 25.0% of all funds collected from customers for the sale of goods and services. Weekly, Cedar is authorized to withdraw $65,395 of funds from our bank account until such time a reconciliation is provided calculating the 25.0% of collections owed to Cedar or until the total balance of $2,485,000 is repaid.
To date, the Company has received net proceeds of $112,118 from the sale of common stock under the EDA after deducting the Agent’s commission of 3.5% of the gross proceeds and other offering expenses.
To date, the Company has received net proceeds of $1.167 million after deducting the Agent’s commission of 3.5% of the gross proceeds and other offering expenses from the sale of shares of common stock under the EDA.
Sale of Accounts Receivable On March 14, 2024, the Company entered into the Advance Agreement with Cedar, pursuant to which the Company agreed to sell $1,491,000 of trade receivables to Cedar in exchange for $1,000,000 of cash proceeds, after deducting $50,000 for underwriting fees and other transaction expenses.
On March 14, 2024, we entered into a standard merchant cash advance agreement with Cedar, pursuant to which we agreed to sell $1,491,000 of trade receivables to Cedar in exchange for $1,000,000 of cash proceeds, after deducting $50,000 for underwriting fees and other transaction expenses.
Equity Distribution Agreement On February 6, 2024, the Company entered into an Equity Distribution Agreement (the “EDA”) with Maxim Group LLC, as sales agent (the “Agent”), pursuant to which the Company may, from time to time, issue and sell shares (the “Shares”) of common stock through the Agent in an at-the-market offering for an aggregate offering price of up to $1,146,893.
On February 6, 2024, we entered into an equity distribution agreement with Maxim, pursuant to which we may, from time to time, issue and sell shares of common stock through Maxim in an at-the-market offering for an aggregate offering price of up to $1,146,893.
Instead of planting one row of lettuce in the ground, by using a vertical greenhouse, we can grow many towers of lettuce in the same area by planting up instead of planting across.
Instead of planting one row of plants in the ground, by using a vertical growing system, we can grow many towers of herbs in the same area by planting up instead of planting across.
For more information on our outstanding debt as of December 31, 2023 and December 31, 2022, see Note 8 to our financial statements. 38 Table of Contents Cash Flows Operating activities During the years ended December 31, 2023 and 2022, cash used for operating activities was $8.531 million and $9.185, respectively.
For more information on our outstanding debt as of December 31, 2024 and December 31, 2023, see Note 7 to our financial statements. 39 Table of Contents Cash Flows Operating activities During the years ended December 31, 2024 and 2023, cash used for operating activities was $8.5 million and $8.53 million, respectively.
To meet our cash needs, we are implementing cost savings strategies and in February 2024, we entered into the EDA with the Agent to sell shares of our common stock in an at-the-market offering for an aggregate offering price of up to $1,146,893.
To meet our cash needs, we are implementing cost savings strategies and in January 2025, we entered into the EDA with the Agent to sell shares of our common stock in an at-the-market offering for an aggregate offering price of up to $2.516 million.
The Advance Agreement is collateralized by the Company’s cash and receivable accounts. 34 Table of Contents CRITICAL ACCOUNTING ESTIMATES The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses.
CRITICAL ACCOUNTING ESTIMATES The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses.
Financing activities During the years ended December 31, 2023 and 2022, cash provided by financing activities was $9.953 million and $11.297 million, respectively.
Financing activities During the years ended December 31, 2024 and 2023, cash provided by financing activities was $11.84 million and $9.95 million, respectively.
LIQUIDITY AND CAPITAL RESOURCES Going Concern Considerations We have incurred significant losses since our inception. We have experienced net losses of approximately $10.188 million during the twelve months ended December 31, 2023 and $12.453 million in the year ended December 31, 2022.
LIQUIDITY AND CAPITAL RESOURCES Going Concern Considerations We have incurred significant losses since our inception. We have experienced net losses of approximately $11.05 million during the year ended December 31, 2024 and $10.19 million during the year ended December 31, 2023.
The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows.
Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. 35 Table of Contents The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of Accounting Standards Codification (“ASC”) 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows.
During the year ended December 31, 2023, we used $8.531 million of cash for operating activities. As of December 31, 2023 and 2022, we had working capital deficit of $257 thousand and $2.966 million, respectively. As of December 31, 2023 and December 31, 2022, we had $4.427 million and $6.324 million of total debt outstanding, respectively.
During the year ended December 31, 2024, we used $8.5 million of cash for operating activities. As of December 31, 2024 and 2023, we had working capital of $1.17 million and a working capital deficit of $257 thousand, respectively. As of December 31, 2024 and December 31, 2023, we had $2.56 and $4.45 million of total gross debt outstanding, respectively.
RESULTS OF OPERATIONS COMPARISON OF THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (in thousands) Year Ended December 31, 2023 Year Ended December 31, 2022 Revenue $ 14,049 $ 11,552 Cost of goods sold 13,227 11,188 Gross Profit 822 364 Selling, general and administrative expenses 10,009 9,368 Impairment loss 686 - Loss from operations (9,873 ) (9,004 ) Other income / (expense) Interest expense, net (390 ) (2,033 ) Gain / (Loss) from extinguishment of debt 70 (826 ) Other income / (loss) 5 (590 ) Total other income (expense) (315 ) (3,449 ) NET LOSS $ (10,188 ) $ (12,453 ) Revenue Revenue was $14.049 million for the year ended December 31, 2023, an increase of $2.497 million, or 21.62%, compared with $11.552 million for the year ended December 31, 2022.
RESULTS OF OPERATIONS COMPARISON OF THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023 Revenue $ 13,857 $ 14,049 Cost of goods sold 11,545 13,227 Gross Profit 2,312 822 Selling, general and administrative expenses 11,587 10,009 Impairment loss - 686 Loss from operations (9,275 ) (9,873 ) Other income / (expense) Interest expense, net (1,219 ) (390 ) Gain / (Loss) from extinguishment of debt (562 ) 70 Other income / (loss) 5 5 Total other income (expense) (1,776 ) (315 ) NET LOSS $ (11,051 ) $ (10,188 ) Revenue Revenue was $13.86 million for the year ended December 31, 2024, a decrease of $192 thousand, or 1.4%, compared with $14.05 million for the year ended December 31, 2023.
We expect our capital expenses and operational expenses to increase in the future due to expected increased sales and marketing expenses, operational costs, and general and administrative costs. Therefore, we believe our operating losses will continue or even increase at least through the near term.
We expect our capital and operational expenses to remain at historical levels as a percent of revenue in the future due to expected sales and marketing expenses, operational costs, packhouse construction costs, costs to continue our growth strategy, and general and administrative costs. Therefore, we believe our operating losses will continue through the near term.
From time to time, the Company enters into loans to purchase vehicles that are secured by the vehicle purchased. Some of these loans are also personally guaranteed by the Company’s chief executive officer and/or chief financial officer. These loans accrue interest at annual rates ranging from 7.64% to 18.66% and mature on dates between April 2024 and February 2028.
Some of these loans are also personally guaranteed by our Company’s chief executive officer. These loans accrue interest at annual rates ranging from 7.64% to 18.66% and mature on various dates through February 2028.
Loss from operations Higher gross profit, offset by higher SG&A costs resulted in an overall increase in loss from operations of $869 thousand to $9.873 million for the year ended December 31, 2023, compared with $9.004 million for the year ended December 31, 2022.
Loss from operations Higher gross profit, partially offset by higher SG&A costs, resulted in a $598 thousand decrease in loss from operations to $9.28 million for the year ended December 31, 2024 as compared to the $9.87 million loss from operations recognized during the year ended December 31, 2023.
Selling, general and administrative Selling, general and administrative (“SG&A”) expenses increased by $641 thousand, or 6.84%, to $10.009 million for the year ended December 31, 2023, compared with $9.368 million for the year ended December 31, 2022.
Selling, general and administrative Selling, general and administrative (“SG&A”) expenses increased by $1.58 million, or 15.8%, to $11.59 million for the year ended December 31, 2024, compared with $10.01 million for the year ended December 31, 2023.
Cash used for operating activities during the year ended December 31, 2023 decreased $654 thousand, primarily due to a $716 thousand decrease in our net loss (subsequent to removal of all non-cash expenses), offset by a $62 thousand cash impact for changes in our operating assets and liabilities.
Cash used for operating activities during the year ended December 31, 2024 increased $965 thousand, primarily due to a $0.86 million increase in our net loss, offset by a $268 thousand cash impact for changes in our operating assets and liabilities.
Additionally, repair and maintenance expenses and facility-related expenses for our Flagship Facility decreased $125 thousand and $29 thousand respectively. 36 Table of Contents Impairment Loss During the year ended December 31, 2023, management completed an impairment analysis and recorded an impairment loss of $686 thousand for certain fixed assets acquired from our predecessor company, Edible Garden Corp.
Impairment Loss During the year ended December 31, 2023, management completed an impairment analysis and recorded an impairment loss of $686 thousand for certain fixed assets acquired from our predecessor company, Edible Garden Corp. This loss reflects the difference between the previous book value of the assets and the estimated salvage value.
In addition, in March 2024, we entered into the Advance Agreement and received $1.0 million in cash proceeds by selling $1.491 million of trade receivables to Cedar. See Note 15 to our financial statements for additional details. We may not be able to access the capital markets in the future on commercially acceptable terms or at all.
In addition, in March, May and December 2024, we entered into and refinanced the Cedar Agreements and received $4.4 million in cash proceeds by selling $6.46 million of trade receivables to Cedar. See Note 7 to our financial statements for additional details.
During the year ended December 31, 2022, the Company incurred a loss from the extinguishment of debt of $826 thousand due to the modification of the debt issued to Evergreen Capital Management LLC (“Evergreen”). See Note 8 to our financial statements.
Loss from extinguishment of debt During the year ended December 31, 2024, the Company recognized a loss from extinguishment of debt of $562 thousand from modifications to our agreements with Cedar. See Note 7 to our financial statements.
Gross profit Gross profit increased by $458 thousand, or 125.82%, to $822 thousand, or 5.85% of sales, for the year ended December 31, 2023, compared with $364 thousand, or 3.15% of sales, for the year ended December 31, 2022. Improvement in margins was primarily attributed to less reliance on contract growers in 2023 versus 2022.
Gross profit Gross profit increased by $1.49 million, or 181.3%, to $2.31 million, or 16.7% of sales, for the year ended December 31, 2024, compared with $822 thousand, or 5.9% of sales, for the year ended December 31, 2023. The improvement in margins was primarily attributed to our strategic decisions in 2024, detailed above in Cost of goods sold.
These charges did not recur in the year ended December 31, 2023. Net loss Net loss was $10.188 million for the year ended December 31, 2023, compared with a net loss of $12.453 million for the year ended December 31, 2022. The reasons for the decrease in net loss are explained above.
See Note 7 to our financial statements for additional details. 37 Table of Contents Net loss Net loss was $11.05 million for the year ended December 31, 2024, compared with a net loss of $10.19 million for the year ended December 31, 2023. The reasons for the increase in net loss are explained above.
The Advance Agreement is collateralized by the Company’s cash and receivable accounts. On February 6, 2024, we entered into the EDA with the Agent, pursuant to which we may, from time to time, issue and sell Shares through the Agent in an at-the-market offering for an aggregate offering price of up to $1,146,893.
Equity Distribution Agreement On January 31, 2025, the Company entered into an Equity Distribution Agreement (the “EDA”) with Maxim Group LLC, as sales agent (“Maxim”), pursuant to which the Company may, from time to time, issue and sell shares of common stock through the Agent in an at-the-market offering of up to $2,516,470.
Investing activities During the years ended December 31, 2023 and 2022, cash used in investing activities was $1.022 million and $2.033 million, respectively. The decrease in cash used for investing activities was primarily driven by our purchase of Edible Garden Heartland in the prior year. See Note 3 to our financial statements for more information about this asset acquisition.
Investing activities During the years ended December 31, 2024 and 2023, cash used in investing activities was $303 thousand and $1.022 million, respectively. The decrease in cash used for investing activities was driven by lower spending for fixed assets and leasehold improvements.
Cost of goods sold Cost of goods sold increased $2.039 million, or 18.22% to $13.227 million for the year ended December 31, 2023, compared with $11.188 million for the year ended December 31, 2022.
This decrease was offset by growth in our core herb business of $1.75 million for the year ended December 31, 2024. 36 Table of Contents Cost of goods sold Cost of goods sold decreased $1.68 million, or 12.7% to $11.55 million for the year ended December 31, 2024, compared with $13.23 million for the year ended December 31, 2023.
Removed
The brand not only lends itself to our current portfolio of products but allows us to develop other products in the “Consumer Brands” category.
Added
We have recently leveraged our brand recognition to offer more consumer products that are in many cases co-manufactured, such as sauces, fermented products and flavor enhancers. 33 Table of Contents RECENT DEVELOPMENTS Reverse Stock Split As of March 3, 2025, we effected a 1-for-25 reverse stock split (the “Reverse Stock Split”) of our outstanding common stock.
Removed
In connection with Mr. James’s retirement, on January 24, 2024, the Company and Mr. James entered into a separation agreement (the “Separation Agreement”). Pursuant to the terms of the Separation Agreement, the Company agreed to pay Mr. James a severance payment of $300,000 in the form of salary continuation until January 2025. In addition, Mr.
Added
The conversion or exercise prices of our issued and outstanding stock options and warrants were adjusted in connection with the reverse stock split. All historical share and per share amounts reflected throughout this Annual Report on Form 10-K have been adjusted to reflect the Reverse Stock Split.
Removed
James is eligible to earn milestone payments under the Separation Agreement in an aggregate amount up to $300,000 if he completes certain transitional deliverables for the Company. The Company agreed to grant Mr.
Added
Nasdaq Compliance On October 21, 2024, we received a letter from Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that, based on the closing bid price of our common stock for 30 consecutive business days, we no longer meet Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of at least $1.00 per share, (the “Bid Price Rule”).
Removed
James a restricted stock award with a fair value equal to $25,000 as of the trading day after the date the Company files its Annual Report on Form 10-K for the year ended December 31, 2023. Under the Separation Agreement, Mr. James provided a general release of claims in favor of the Company and its affiliates, subject to customary exceptions.
Added
Under Nasdaq Listing Rule 5810(c)(3)(A)(iv), because we effected reverse stock splits in the last two years with a cumulative ratio greater than 250 shares to 1, we were not eligible for any compliance period to regain compliance with the Bid Price Rule.
Removed
Effective January 25, 2024, the Board appointed Kostas Dafoulas to serve as the Company’s interim Chief Financial Officer following the retirement of Mr. James.
Added
On October 28, 2024, we submitted a request for a hearing before the Nasdaq Hearings Panel (the “Panel”) to appeal the delisting notice from the Staff.
Removed
Under the terms of the EDA, the Agent may sell the Shares at market prices by any method that is deemed to be an “at-the-market offering” as defined in Rule 415 under the Securities Act.
Added
On January 14, 2025, we attended our hearing with Nasdaq February 12, 2025, we received written notification (the “Notice”) from Nasdaq that the Panel granted an extension for us to regain compliance with the Bid Price Rule until March 31, 2025, subject to additional conditions outlined in the Notice.
Removed
The offering of shares of our common stock pursuant to the EDA will terminate upon the earliest of (i) February 6, 2025, (ii) the sale of all Shares provided for in the EDA, and (iii) the termination of the EDA by written notice of the Company or the Agent.
Added
The extension by the Panel is contingent on us achieving certain milestones and notifying Nasdaq of such achievement. If the Company is not successful at satisfying these milestones within the prescribed time, the Panel may revoke the extension. There can be no assurance that we will ultimately meet all applicable criteria for continued listing on Nasdaq.
Removed
To date, the Company has received net proceeds of $122,118 from the sale of common stock under the EDA after deducting the Agent’s commission of 3.5% of the gross proceeds and other offering expenses. Supply Agreements On February 8, 2024, the Company and Meijer Distribution, Inc.
Added
The Panel may determine to delist our securities from Nasdaq. Proposed Transaction with the Narayan Group On March 4, 2025, we announced that we are continuing our pursuit of acquiring the Narayan Group, a sustainable food producer based in Slovenia with operations in Europe and Asia.
Removed
(“Buyer”) entered into two agreements pursuant to which the Company will supply and sell products to Buyer until December 2026 (the “Supply Agreements”).
Added
In connection with the proposed transaction, on February 12, 2025, we advanced the Narayan Group $190,000 to support its operations and the Narayan Group issued a promissory note in favor of us in the principal amount of $190,000.
Removed
Under the Supply Agreements, the Company will sell (i) fresh cut herbs, including basil, bay leaves, chives, cilantro, dill, mint, oregano, rosemary, sage, thyme; (ii) hydroponic basil; and (iii) potted herbs, including basil, chives, cilantro, mint, oregano, parsley, rosemary, sage, thyme, wheatgrass; in quantities and delivery schedule requested by the Buyer at prices per unit set in advance.
Added
The promissory note accrues interest at a rate of 6.0% per annum until June 30, 2025, after which interest will accrue at a rate of 10.0% per annum if the parties have not entered into a definitive agreement with respect to the proposed transaction.
Removed
Under the Supply Agreements, the Company and the Buyer will renegotiate the prices for each unit annually, provided that the price per unit will not increase or decrease at a rate greater than the change in the relevant Consumer Price Index in that year. Once set, the pricing terms will remain fixed for the remainder of the year.
Added
In that event, the Narayan Group is obligated to pay the outstanding principal and accrued interest in 12 equal monthly installments beginning on July 1, 2025. If the transaction is completed, we would acquire 100% of the share capital of the Narayan Group in exchange for issuing Narayan Group shareholders shares of our common stock.
Removed
Any price increases will take affect after sixty days and any price decrease will be effective immediately. If the Company and the Buyer are unable to mutually agree on price increases, the Company will have the power to terminate the Supply Agreements immediately.
Added
Warrant Inducement Transaction On December 23, 2024, we entered into an inducement letter agreement (the “Inducement Letter Agreement”) with an institutional investor and existing holder (the “Holder”) of existing Class B warrants originally issued on September 30, 2024 (the “Existing Warrants”) to purchase 333,200 shares of common stock.
Removed
Under the Supply Agreements, the Company agreed to fund the installation of fixtures in each of the Buyer’s stores to display potted herbs in an aggregate amount estimated to be approximately $800,000. These payments will be made as a weekly deduction from the Company’s receivables from the Buyer. The Supply Agreements will expire on December 31, 2026.
Added
Pursuant to the Inducement Letter Agreement, the Holder agreed to exercise the Existing Warrants for cash at the exercise price of $9.00 per share in consideration for our agreement to issue: (i) new unregistered five-year warrants to purchase up to an aggregate of 333,200 shares of common stock at an exercise price of $9.00 per share (the “New Class A Warrants”), and (ii) new unregistered eighteen-month warrants to purchase up to an aggregate of 333,200 shares of common stock at an exercise price of $9.00 per share (the “New Class B Warrants”).
Removed
The Supply Agreements may be renewed for an additional two-year term upon the mutual agreement but may be terminated by the Buyer without cause upon sixty days’ prior notice.
Added
The New Class A Warrants were immediately exercisable upon issuance and have a term of five years from the issuance date, and the New Class B Warrants were immediately exercisable and have a term of eighteen months from the issuance date.
Removed
Weekly, the Company is required to pay Cedar 25.0% of all funds collected from customers for the sale of goods and services.
Added
On December 23, 2024, we completed the warrant inducement transaction and received net proceeds of approximately $2.8 million. 34 Table of Contents Cedar Cash Advance Agreement On December 4, 2024, we entered into a standard merchant cash advance agreement (the “Cedar III Agreement”) with Cedar Advance LLC (“Cedar”), pursuant to which we agreed to sell $2,485,000 of future accounts receivable to Cedar in exchange for a purchase price of $1,750,000, less fees and expenses of $87,500, for net funds provided of $1,662,500.
Removed
Weekly, Cedar is authorized to withdraw $53,250 of funds from Edible Garden’s bank account until such time a reconciliation is provided calculating the 25.0% of collections owed to Cedar, until such time the total balance of $1,491,000 is repaid.
Added
A portion of the net proceeds of the Cedar III Agreement were used to satisfy the remaining future accounts receivable of $523,150 to which Cedar was entitled under the amended and restated standard merchant cash advance agreement with Cedar, dated as of May 3, 2024.
Removed
Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations.
Added
The Cedar III Agreement is collateralized by our cash and receivable accounts.
Removed
The increase was attributed to an increase of $2.17 million in sales of our herb, produce and floral products, driven by a mix of organic growth and new customers. Additionally, sales of our vitamins and supplements increased $324 thousand during the year ended December 31, 2023, driven by consumer demand.
Added
The decrease was primarily attributed to our strategic shift away from our lettuce and floral product lines. Combined, the exit from these categories drove a $1.65 million decrease in revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Removed
The increase was primarily due to $2.59 million of higher costs for operating the Edible Heartland facility, which transitioned to growing our herbs and lettuce products during 2023.
Added
In addition, our vitamin business experienced a decrease of $0.28 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Removed
Additionally, we incurred an additional $70 thousand of fuel and automobile expenses, $42 thousand of additional labor costs, and $35 thousand of additional cost related to our Pulp brand products, which we began selling during 2023.
Added
The decrease was primarily due to the reduction of our reliance on third-party growers by bringing our Edible Garden Heartland facility fully online to produce our herb product portfolio along with our shift away from low margin floral and lettuce products.
Removed
These increases were offset by a decline of $264 thousand of costs for supplies and raw materials for our Edible Garden flagship facility and a $377 thousand decrease in freight and shipping costs.

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