Greetings. Welcome to the Edible Garden AG Incorporated Full Year and Q4 2025 Business Update Conference Call. (Operator instructions) Please note, this conference is being recorded. I will now turn the conference over to Ted Ayvas, Investor Relations. The floor is yours.

Thanks, John. Good afternoon, and thank you for joining Edible Garden's 2025 Fourth Quarter and Full Year Earnings Conference Call and Business Update. On the call with us today are James Kras, Chief Executive Officer of Edible Garden; and Kostas Dafoulas, Interim Chief Financial Officer of Edible Garden. Earlier today, the company announced its operating results for the 3 months and year ended December 31, 2025. The press release is posted on the company's website, www.ediblegardenag.com. In addition, the company has filed its annual report on Form 10-K with the U.S. Securities and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov. If you have any questions after the call and would like any additional information about the company, please contact Crescendo Communications at (212) 671-1020. Before Mr. Kras reviews the company's operating results for the quarter and year ended December 31, 2025, and provides a business update, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in the conference call, including statements regarding our future results of operations and financial position, strategy and plans and our expectations for future operations, are forward-looking statements. The words aim, anticipate, believe, could, expect, may, plan, project, strategy, will and the negative of such terms and other words and terms of similar expression are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to several risks, uncertainties and assumptions as described in the company's filings with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2025. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in the conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievements. In addition, neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements, except as required by law. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made on the conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. Having said that, I would now like to turn the call over to Jim Kras, Chief Executive Officer of Edible Garden. Jim?

Thanks, Ted. Good afternoon, and thanks to everyone for joining us today. 2025 was a defining year for Edible Garden as we continue to build on our foundation and expand our long-term growth potential. Over the past several quarters, we have executed a deliberate strategy to grow beyond our core controlled environment agriculture platform into a broader innovation-driven consumer packaged goods business focusing on higher growth, higher margin opportunities aligned with what consumers and retailers are actively seeking. During the fourth quarter, we continued to build momentum across our core business, securing new and expanded placements with key retail partners, including Kroger, Weis Markets, Safeway, The Fresh Market and Busch's, increasing our distribution to nearly 6,000 store locations. This reflects growing demand for our products, our ability to gain market share and the strength of our retail relationships. We saw a strong performance across both our core produce and CPG categories, including double-digit growth in cut herbs, driven by expansion in existing accounts and the onboarding of Kroger as well as continued strength in our vitamin and supplement portfolio, where demand remains robust, both domestically and internationally. We also saw significant growth in our condiment platform, supported by new customer wins such as Wakefern and Safeway. Importantly, these efforts, along with targeted investments in customer onboarding, resulted in incremental distribution of more than 700 additional retail locations, further expanding our reach across key markets. At the same time, we are expanding our portfolio of better-for-you brands, including Kick Sports Nutrition, Jealousy GLP-1, Vitamin Whey, Pickle Party and Pulp and broadening distribution across domestic e-commerce and international markets, including placements with Amazon, PriceSmart, Target.com and Walmart.com. This expanded retail footprint and brand portfolio positions us to support our next phase of growth into higher margin, shelf-stable and ready-to-drink categories. This is not a shift away from what we've built. It's a deliberate evolution of our business, supported by our national retail distribution and infrastructure, much of which is already in place and positioned to drive scale across higher value categories. A key next step in our strategy is expanding into the ready-to-drink, or RTD, category — the fast-growing market where demand for clean label, shelf-stable nutrition continues to outpace supply. We're leveraging our Farm-to-Formula approach, our sustainable manufacturing infrastructure and our established relationships with leading retailers to enter this category from a position of strength. Importantly, we are not starting from scratch. Our products are already carried across approximately 6,000 store locations, giving us the ability to deepen existing relationships while expanding into a category that aligns closely with our brand portfolio. To support this expansion, we recently announced the development of a state-of-the-art RTD manufacturing initiative at our Midwest facility as part of our Zero-Waste Inspired platform. We have selected Tetra Pak, a global leader in food processing and packaging solutions, to plan, install and integrate proprietary processing capabilities, which we expect will enable us to meet growing retailer demand at scale. When you look at the broader market, the opportunity is significant. The global RTD category is estimated at approximately $842.5 billion in 2025 and is projected to reach roughly $1.26 trillion by 2033. We believe this represents a durable opportunity and builds naturally on our platform, combining controlled environment agriculture, scalable aseptic capabilities and our portfolio of differentiated brands across sports nutrition, performance nutrition, adult nutrition, kids nutrition, GLP-1 supportive and functional categories. Looking ahead, we are focused on scaling our presence in higher-margin RTD, shelf-stable categories while continuing to build a more diversified consumer packaged goods business beyond fresh produce. As we execute on the strategy, Edible Garden is evolving into a more vertically integrated, innovation-driven company with the ability to deliver more predictable and scalable results. We believe this positions us as a differentiated player in the evolving food and nutrition landscape with a clear path to sustainable long-term growth. With that, I'll turn the call over to Kostas to review the financials.

Thanks, Jim, and good afternoon, everyone. Starting with the fourth quarter results. Revenue for the 3 months ended December 31, 2025, was approximately $4.1 million compared to $3.9 million in the prior year period, reflecting a strong quarter across the business. We launched our USDA Organic herb programs with Kroger in October and recorded our first international CPG placement of Kick Sports Nutrition to PriceSmart, marking our entry into markets beyond domestic retail. These wins reflect the growing demand we are seeing for our products and the continued strength of our retail relationships heading into 2026. Cost of goods sold in Q4 was approximately $5.3 million compared to $3.8 million in the year prior. The increase reflects the cost profile of the company as we were actively onboarding new retail customers during a seasonally compressed period. We made a deliberate investment in these new accounts that secures 2026 shelf space and builds the fulfillment track record that major retailers require. We expect the cost structure to normalize as those programs mature and volume increases. Gross profit was approximately a $1.2 million loss compared to flat in 2024. Q4 was a quarter where we made a deliberate decision to absorb elevated costs to secure 2026 shelf space and deepen relationships with retailers like Kroger, Wakefern and Safeway. Bringing customers of that caliber requires front-loaded investment and we see this as necessary to support future growth and operational scalability. Selling, general and administrative expenses were approximately $4.6 million compared to $2.6 million in the prior year. Primary drivers were depreciation and rent tied to the NaturalShrimp asset acquisition, higher legal and professional fees from that acquisition and our capital markets activities, along with higher compensation expenses in 2025. While the absolute number is elevated, a meaningful portion reflects nonrecurring or deal-related costs rather than ongoing run-rate expense. Turning to the full year. Revenue was approximately $12.8 million versus $13.9 million in 2024. The headline decline is largely a function of our strategic exit from floral and lettuce which together contributed approximately $1 million of 2024 revenue but at low margins. Excluding those exits, core revenue was essentially flat year-over-year, and Q4 was a genuine growth quarter, up approximately 5%. That trajectory is what we consider most indicative of where the business is headed. Full year cost of goods sold was approximately $13 million versus $11.6 million in 2024. The increase was concentrated in the second half and driven by the same Q4 onboarding dynamics I described earlier. Gross profit for the full year was approximately a loss of $0.2 million compared to a gain of $2.3 million in 2024. The first half ran at margins more consistent with our historical range. However, the full year result reflects Q4 specifically and we do not view it as representative of our ongoing cost structure. Gross margin recovery is a top priority for 2026. As new programs scale, third-party procurement cost decline and fixed costs are absorbed over a larger revenue base. Full year SG&A was approximately $15.3 million versus $11.6 million in 2024 with the increase driven primarily by the NaturalShrimp acquisition, along with other capital markets activity. The balance reflects continued investment in the team and infrastructure supporting our long-term strategy. On the balance sheet, we ended the year in a stronger position. Stockholders' equity improved through the preferred stock issuance associated with the NaturalShrimp acquisition and total debt declined approximately $0.6 million year-over-year as we continue to reduce our outstanding notes. We remain focused on managing costs while investing in the infrastructure and capabilities needed to support our transition to a higher margin, more scalable business model. With that, I will turn the call over to the operator for any questions.

(Operator instructions) Our first question comes from Jeremy Pearlman with Maxim Group.

Firstly, as you transition your business, you expanded from fresh to include more shelf-stable CPG and now the RTD. How should we view the margin from the fresh to the CPG products? And what do you think the revenue expectation and breakdown for CPG versus fresh through 2026?

Kostas, do you want to— I can do this with you. How do you want to…

You want to talk high level, and I can get into some detail.

Yes, that would be great. So first of all, thanks for the question. Our expectation, obviously, is there's going to be much more robust margin as it relates to the RTD business and the consumer packaged items. The fact that they are shelf-stable means we don't have to worry about some of the shrink issues that we have with fresh. The fresh business has been great to us. It's really opened doors. It's built our relationships with major retailers such as Walmart, Meijer and others, where we have great performance as it relates to our in-stocks and our delivery capabilities. When you have a 98% in-stock rate and acceptance rate with major retailers, they tend to want to do more business. This business is really all about availability. On the margin end, what's nice here is that there's a much more stable business because you control much more in manufacturing with the shelf-stable products than you may with fresh goods. Fresh goods, as I said, have been our staple. They have really shown how we can execute and our operational excellence to deliver on time and in full in a really difficult category, and that's paying out for us. So you'll see more stable and more robust margins. On the revenue side, just based on the size of the market, which I outlined in the call earlier, it's more than meaningful. This is a big category with a lot of pent-up demand and a lot of capacity issues out there. We're stepping in at the request of retailers who trust us and want these products from somebody they know can deliver on time, in full and on spec. For us, it's a great evolution, leveraging our Farm-to-Formula approach and our wherewithal as a strong supplier to major accounts.

Yes, Jeremy. To add to what Jim said, we can think about the portfolio in three pieces: the core CEA business, which I think we'll see return to steady growth in the high single digits range, maybe even higher depending on customer wins and customer growth. In the CEA space, margins can return to the normalized levels we saw earlier this year and last year. In addition to that, the nutraceutical business actually showed really strong growth in the double-digit, roughly 20% range year-over-year, and I think that will be a larger component of our revenue growth story going into 2026. The trade-off there is a good portion of that product is co-manufactured. So while it gives us a lot of stability and visibility into our cost structure, the margins are not as rich as if we were to manufacture it ourselves. So I think a blended margin in the low double digits to mid-teens is a reasonable expectation going forward. And then the biggest upside we have in the whole portfolio is around this RTD business where we're looking at significant revenue opportunity with margins in the 20% to 30% range. We're working through that right now as we start scoping this project out and understand the input cost a little bit better, but that's sort of first-pass expectations there.

Okay. Great. And maybe while we're talking about RTD, it is a broad category. Where specifically do you expect to put out your products within there? For example, energy drinks or more like the healthy green drinks? And then is that also going to be produced at the Midwest facility that you talked about? I have another question to follow up about that facility afterwards.

It's going to be primarily in the protein segment. Obviously, we'll have a few different formulations, but we've been requested by a major retailer to help develop this for their private label as a start. That opened up the floodgates. We're at a point now where our goal is to sell out the plant in the next 90 days or so. When you think about it, we're looking at capacity into the hundreds of millions of units within a couple of years. This is transformative for Edible Garden. It's a huge opportunity. The fact that we've got the type of association we have with Tetra Pak is driven by the major retailers saying they trust us. They know we do a great job not only in fresh but also in nutraceuticals. I've been in nutraceuticals for almost 30 years, so all points have led to this. We're going to be playing in the sports nutrition and performance nutrition arena. I don't want to cite specific competitors, but I can say we're going to do it cleaner, better and at massive scale. We'll be driving our own Kick high-protein, lower-calorie, lower-carb product, done clean-label. We have a GLP-1 supportive formula under our Jealousy brand. We'll have our own higher-margin brands and we'll also be taking on co-manufacturing opportunities with brands that don't have their own manufacturing. I would say roughly half of the facility will be private label for major chains. The great thing about Edible Garden is the existing relationships we have. We service Meijer, Walmart, Wakefern, Ahold Delhaize, Kroger and Safeway. The investment you saw in Q4 serves multiple purposes, one of which is capturing business from competitors who had issues and turned to us. We made the investment to service their business and capture that opportunity. We have a strong business with Weis Markets and Kroger. When they're happy with us, they turn to us for RTDs as well, whether it's what we're making for our brands or doing it for them. When you look at our roster of accounts — Walmart, Target, Meijer, Wakefern, Ahold Delhaize, Kroger, Safeway, CVS and Walgreens — they're coming to us for innovation because they know we'll get the job done. The plan is to start in sports nutrition and then move to adult nutrition products similar to Ensure, BOOST or Premier Protein-type products, using Tetra Pak packaging which is sustainable and aligns with our core sustainability values. It's exciting and we have an exciting team. I hope that answers your question.

No, that's great. It really sounds like a really great opportunity for the company. Maybe just a final question around the Midwest facility. What can we expect in terms of CapEx requirements for that build-out, the timeline, the total scale of what you're hoping for and when you could reach that?

I don't want to give any specific numbers at this time. It's such a large opportunity and there will be significant interest from others. This is a significant facility with considerable throughput. We're working closely with local and state authorities to support this with incentives and we've already received the nod on a few things, which is great. Obviously, we'll need to buy machines and retrofit a building, so there's real CapEx involved. We've done this before — we've built a significant greenhouse in New Jersey and we did a retrofit in Grand Rapids for Meijer. We're prepared to take on the challenge. Our plan is to hopefully be in the marketplace toward the tail end of 2027.

(Operator instructions) The next question comes from Nick Pincus with Forest Capital.

Congrats on the progress. A lot of my questions have already been asked. You highlighted the strong fourth quarter momentum, including new retail placements and expansion to nearly 6,000 locations. My question is how sustainable is this level of growth? Should we expect similar distribution gains and category performance going forward?

Yes. The expansion into new doors has been a result of getting organized on the greenhouse business, focusing and exiting product lines that didn't make sense like floral and lettuce because of low margins. We shored things up this past year. It's been challenging because we are in a growth sector — people are eating better and buying more fresh goods. Herbs make average dishes much better. For us, it's about continuing to take care of our current customers; they're the ones who got us here and continue to give us opportunities within the category, which can mean more penetration and velocity in current doors. We also have a strong story around organic growth and same-store sales over the last year. That's great exit velocity out of the year. We'll continue to focus on our core, because that's what's gotten us here. RTD is a massive business with untapped opportunity and shortfall of capacity. It's rare that this intersects with retailers coming to you because they trust you. It validates the investments we made over the last couple of years. You're going to see more store count across the business — herbs, pickles, and RTDs. RTDs are sold everywhere across many classes of trade, including convenience stores where we are not yet active. The beverage business is strong and protein remains in demand. We'll have a state-of-the-art facility producing product for our supermarket partners, so yes, it's going to continue.

(Operator instructions) Okay. We have no further questions in the queue. I'd like to turn the floor back over to management for any closing remarks.

Thanks again to everyone for joining us today. We believe 2025 was a year of meaningful progress for Edible Garden as we continued to build beyond our CEA foundation and expand into a broader, higher-margin consumer packaged goods platform. We're seeing that progress reflected in our momentum across our business, growing demand for our products and our ability to continue to gain market share with our leading retail partners. At the same time, we believe our expansion into the ready-to-drink category represents a significant opportunity for Edible Garden, one that builds on our existing infrastructure, retail relationships and product development capabilities and positions us to scale into a large and growing market where demand continues to outpace supply. As we look ahead, we remain focused on executing against that opportunity while continuing to expand higher-margin categories and leverage our retail network to support long-term growth. We believe this continued evolution of our business is positioning us to deliver greater scale, improved margins and long-term value for our shareholders, and we're confident in the path that we're on as we continue to execute and deliver on the opportunity ahead. We're encouraged by the progress we're making and look forward to updating you on our continued execution and success in the months ahead. So thank you, everybody. Appreciate it.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.