Good morning, everyone, and welcome to Edible Garden Incorporated 2026 Second Quarter Business Update Conference. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the call over to your host, Ted Avas, Investor Relations at Crescendo Communications. Ted, the floor is yours.

Thanks, Jenny. Good morning and thank you for joining Edible Garden's 2026 second quarter earnings conference call and business update. On the call with us today are Jim Crash, Chief Executive Officer of Edible Garden, and Costas Tafoulis, Interim Chief Financial Officer of Edible Garden. Earlier today, the company announced its operating results for the three and six months ended June 30, 2026. The press release is posted on the company's website, www.ediblegardenag.com. In addition, the company has filed its quarterly report on Form 10-Q 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. Crash reviews the company's operating results for the quarter ended June 30, 2026 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 this 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, in other words and terms of similar expressions, 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 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, level of activity, performance, or achievement. 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 this conference You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. With that, I would now like to turn the call over to Mr. Jim Kras, Chief Executive Officer of Edible Garden.

Thanks, Ted, and good morning, everyone. The second quarter was another period of solid progress for Edible Garden. Revenue grew 12.8% year-over-year to $3.6 million, while total sales increased by more than 31%. What was particularly encouraging was the breadth of that growth. Cutter sales increased more than 42%, driven by continued growth with existing customers and newer programs with major retailers including Kroger, Target, and Weiss. We saw growth across parted herbs, international vitamins, and condiments as well, while expanding our relationships with retailers including Target, Walmart, away from ShopRite, and the Fresh Market. In addition, we extended a multi-year private label contract with a major Midwest retailer. More recently, we were awarded Fresh Cut Herb Distributions with a key Target Midwest Distribution Center. further expanding that relationship and broadening distribution of our premium fresh-cut herb portfolio across the region. We believe the reward demonstrates our ability to leverage our Midwest production and distribution infrastructure to efficiently support additional volume as our retail programs expand. Overall, we see a core business that continues to gain traction across customers, products, and channels. Improving the underlying economics of the business remains an important priority. In Metro North, for example, in Metro New York, for example, we are traditioning more volume from direct store deliveries to retail distribution centers and regional logistics hubs. We believe this can reduce transportation and delivery-related costs, simplify the network, and create better operating leverage as we grow. At the same time, the retail relationships, distribution capabilities, and infrastructure we have built through our core business gives us a foundation that can be leveraged well beyond traditional produce. And that brings me to what we believe is the most significant long-term growth opportunity in front of Edible Garden, our farm-to-formula strategy, and the development of the ready-to-drink RTD manufacturing platform at Perry Hills in Webster City, Iowa. We believe this has the potential to fundamentally change the scale and profile of our business over time, and we made significant progress during the second quarter. Most notably, we successfully completed prototype production at Tetra Pak's new product development center. This was much more than a product development exercise. It allowed us to run our proprietary clean label formulations under commercial processing conditions, generate production data, further optimize the products and advance our preparation for customer sales and commercial manufacturing. In parallel, we continued moving forward with the physical development of Prairie Hills, forward with Structura Architects and EQ Building Group, supporting the design, engineering, and construction process. Together, these milestones represent meaningful progress towards a scalable commercial manufacturing platform we envision. The reason why we are so focused on this opportunity is the potential scale. Prairie Hills is being developed as a flexible, high-capacity platform for shelf-stable, clean-labeled nutritional beverages utilizing advanced Tetra Pak processing and packaging technologies. At full production, we expect the facility to have capacity to manufacture more than 100 million beverage units annually, providing the potential to participate across sports nutrition, protein beverages, functional wellness, meal replacement, GLP-1 support, and other Better For You categories. Importantly, the platform is being developed to drive our our own brands, as well as private label and co-manufacturing opportunities, giving us multiple potential paths to build volume and create value from the facility. What makes this opportunity particularly compelling is that we are not starting from scratch. Our products are already available in more than 6,000 retail locations and growing. We've spent years developing relationships with national and regional retailers, along with food safety, supply chain, and commercialization and retail execution capabilities needed to serve them. Combining that existing commercial infrastructure with scalable, domestic RQD manufacturing has the potential to significantly expand our addressable market, diversify our revenue base, and over time, improve the earning profiles of the business. That is really what Farm to Formula is about. We started with controlled environment agriculture and fresh produce, expanded into higher-value branded nutrition and functional foods, and now Prairie Hills gives us the opportunity to take another significant step into shelf-stable, clean-label nutrition. We view Prairie Hills as much more than a new manufacturing facility. We believe it has the potential to become an important growth engine for edible garden and a key part of our evolution into a broader, clean-label food and nutrition platform. Our focus remains on execution, growing the core business, improving operating efficiency, and advancing prairie hills towards commercial production, and developing the branded and private label opportunities that can ultimately utilize that capacity. We believe the pieces are increasingly coming together, and we're excited about the direction of the business and the opportunity ahead. With that, I'll turn the call over to Kostas to review the financials. Kostas?

Thanks, Jim, and good afternoon. Good morning, everyone. Revenue for the three months ended June 30th, 2026, increased 12.8% to approximately $3.6 million, paired with approximately $3.1 million in the prior year period. The increase was driven by continued growth in our butter and potter portfolio, which increased approximately half a million dollars, or 50%, year-over-year. Revenue growth was supported by underlying volume gains concentrated in select categories, with total gross sales increasing 7.6 year-over-year. While cut herbs and continents drove the growth, our financial focus is on converting that higher volume in revenue into improved operating performance as we continue to scale the business. Gross profit for the quarter was approximately $0.6 million, essentially flat with a prior year period. While we continue to generate top-line growth, cost of goods sold remained elevated, and improving profitability of that growth remains an important focus for us. One of the more meaningful improvements during the quarter was in selling general and administrative expenses. SG&A declined approximately $0.9 million, or 21.5%, to $3.1 million, compared with approximately $4 million in the second quarter of last year. We believe this reflects a continued focus across the organization on managing expenses and improving operating efficiency as we scale the business. The net loss improved year-over-year to approximately $3.3 million from approximately $4 million in the second quarter of 2025. Turning to the balance sheet and cash flow, total debt increased approximately $14.2 million from approximately $1.9 million at year-end, reflecting $13.5 million of new financing this quarter related to our initial investment in the Prairie Hills manufacturing facility in Iowa. Cash and restricted cash together were approximately $10.7 million at June 30, 2026, so approximately $10 million of that was held in a restricted account for the Iowa facility, leaving approximately $0.7 million of cash available for operations, compared with approximately $1.1 million of unrestricted cash at year end. Foto assets were approximately $27.7 million, compared with approximately $20.6 million at December 31, 2025. and total liabilities were approximately $22.1 million. We continue to focus on strengthening our capital position as we fund the business and invest in Prairie Hills. Operating cash flow was positive for the second consecutive quarter with net cash provided by operating activities of approximately $0.9 million, but the six months ended June 30, 2026, compared with cash used and operations of approximately $6.8 million in the prior year period. As we look ahead, our financial priorities remain closely aligned with the operating strategy Jen discussed. We are focused on continuing to grow revenue through our expanding retail network, improving the cost structure of the core business, maintaining discipline around FG&A, and allocating resources toward the opportunities we believe can generate the greatest long-term return. At the same time, we are continuing to invest in the development of Prairie Hills and the RTD platform. As we make those investments, we intend to remain disciplined in how we deploy capital and balance the requirements of the existing business with the opportunity we see in building a scalable, domestic, clean-labeled beverage manufacturing platform. We believe the combination of continued revenue growth and more efficient operating structure and disciplined investment in higher-value growth opportunities provides a path towards improving the financial profile of Edible Garden over time. With that, I'll turn the call back to the operator for questions.

Thank you very much. At this time, we will be conducting our question and answer session. If you would like to ask a question, please press star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press star 2 if you would like to remove your question from the queue. For any participants using speaker equipment, it may be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Our first question is coming from Nick Sherwood of Maxim Group. Nick, your line is live.

Hi, good morning. Thank you for taking my questions. My first question is about the new expansion and the new target expanded distribution. Can you kind of contextualize, you know, what that distribution was before and, you know, how big of a win or a gain this new distribution is?

Good morning, Nick. Yes, it's significant. You know, we've had a longstanding relationship with Target, and we've made quite a bit of investment, you know, just in the relationship and being able to be positioned for this type of opportunity. And, you know, there's been market conditions and, you know, obviously some producers, suppliers, not us, we're very fortunate, you know, we're in controlled environment agriculture, which means we control, you know, how we grow and we have incredible safety, you know, food safety processes in place. With that said, you know, this is their largest, if not one of their largest, pretty close. They just opened up a new fresh distribution center since they've been growing this part of their business target. But this has been the longstanding largest. And so we had picked up some business earlier in the year, this year, And then this, based on performance and market conditions, there's just a lot of consolidation in CEA right now with some of our major competitors basically going out of business. We're a trusted supplier with best-in-class fill rates and on-time rates. And so, you know, with the changes, the concerns, some of the instability in the business, you know, Target reached out and, you know, wanted us to be able to pick this up for them because they wanted to know that they would hopefully have, you know, a partner where they wouldn't have anything to worry about. And so for us, it's very significant since it's in Iowa. You know, it helps align with our facilities out there, as well as the fact that, you know, they're based in Minnesota, which isn't that far from Iowa. And thus, like I said, this is really kind of central to their business. And we're very, you know, fortunate and happy to have gotten this opportunity. And like I said, there's quite a bit of consolidation. We had put out, you know, a press release, I think it was maybe even a week or two ago, that just talked about the fact that, you know, my phone's been ringing off the hook with people trying to, you know, align with Edible Garden since my team does such a great job of execution and it's always been the key for us. So, yeah, it's pretty significant. But any other specifics on that, Nick, that I can answer?

I hope that helps. uh no yeah i think that's um you know a perfect explanation for what i was thinking about and kind of one thing that you know you mentioned in that answer was some of this consolidation that's kind of going on in the industry can you kind of give us a little bit of an insight on you know maybe how that may have accelerated in the past year and you know kind of what it's looking like through the end of the year and kind of the opportunity that might still remain available to edible garden in addition to this um target well yeah there's been there's been there's been quite a bit of consolidation and i think it's really driven by um where people put their put their

you know investment dollars and the fact that edible garden had you know had put put a an investment in their distribution platform in the relationships and so um you know there's going to be issues in these types of business, whether it's supply chain issues or whatnot, there's always just issues. And I think what's happened is that our competitors put a lot of money into technology, a lot of money in trying to talk more about yield per square foot than really going out, securing the relationships in parallel, making investments like we have in the customer experience. experience. Yes, we have technology with GreenThumb, it's patented, and it helps with our supply chain efficiency, all those great things. When we bought the greenhouse in Michigan, we did a retrofit versus doing a greenfield project, just things like that that kept the business, and you can see it in our numbers this quarter, just tighter and tighter and tighter as we've continued to drive the business, the delivery part of the business, as I like to say, You know, the on time and full, you know, in stock rates. And so all of that has really just led to us being positioned for to really pick up, you know, pick up the ball when it's been dropped by our competitors. And, you know, I think this sort of build it and they will come attitude in this category specifically has not worked out well because you really, It's really ultimately about people buying your products and making sure that that loop gets completed. And I think that's just somewhere where we've really done a nice job. I think Costas has brought a discipline to the business that's allowed us to really focus on cleaning up SG&A and doing some things just to be more and more efficient. We're still in serious growth mode. Obviously, with the, you know, with the Iowa facility, that's going to really, you know, take the company to the next level. Excited about that. But I think, you know, most importantly here, you know, I think we've earned our stripes to be where we are. And, you know, people are, you know, people are calling us because they just don't, you know, they don't want a headache. They want people who are going to service their business. And that's something that, you know, my team has been really focused on. And so I think it's paid off.

Yeah, I mean, it sounds like there's definitely a continued opportunity there. And then kind of switching gears, you know, this Tetra Pak opportunity, it really is one of the key opportunities that it seems like for your company going forward. Can you kind of just give us some insight on is that timeline still intact on, you know, building out the facility, any specific insights into the completion of the prototype production at Tetra Pak's new product development center and just kind of, you know, tell us what do you still need to bring in or to do to make sure that, you know, everything remains on schedule for this?

Well, you know, first of all, we're still on track, and we're looking at the tail end of 2027 to see the first bottle come off the line. We have, once again, you know, having the reputation that we have for our service levels, our execution, you know, we've got pre-sold commitments for 100% of the facility, which is just, you know, unheard of, but she tells you an idea of what the demand is there. We have a nice blend of our brand as well as private label. You know, we knew there was a shortfall in the industry. Protein's hot. It continues to stay hot. It continues to grow. We continue to innovate as well. Obviously, kind of building that bridge from farm to formula is a big thrust for us to harness and really add, you know, another dimension to what we do in the greenhouse. So we're really excited about that. And there's a lot of things on the horizon here that I think are going to be just tremendous. But, you know, we're on track. We are going to be starting with a co-manufacturer, you know, this year at the end of Q4 to allow us to kind of continue to improve out the formulas, to allow us to, you know, go to market quickly and see the revenue from that and not have to, you know, wait, you know, over a year to really, you know, capture some of the pent-up demand for these type of products. So, you know, Tetra Pak has been just an unbelievable partner. They're just such a great company, and, you know, I consider us fortunate to continue to work with them. The development process at their state-of-the-art facility in Denton, Texas, was just phenomenal. And, you know, we have some real significant players on our team that have, you know, who have been working with Tetra Pak for decades that, you know, came on to Edible Garden. Like Dr. Chuck Sizer is one of them. He helped develop the majority of the patents for PetraPak on some of their packaging. He's on our team and advises us and was there on the run to develop the product. But, you know, great tasting, clean labeled, you know, product that, you know, right now is just really exciting to be able to work with. So, you know, it's really pretty tremendous. And to be able to leverage off a growing core business, I think, just really continues to uniquely position us for the type of growth. I think this is going to be a much different company, you know, as we head into Q4 next year, and especially in 2020 as we're pumping out, you know, product out of Iowa. And, you know, we're really focused on driving that business. So, yeah, it's really exciting. It's going really well, but, you know, honestly, we just have a great team and people are excited about what we're doing, you know, between our zero waste inspired mission and trying to, you know, cut out waste and have an eye on, you know, recyclable, you know, packaging. You know, Tetra Pak obviously plays into that to, you know, to this front formula notion that I think is quite novel that I think will continue to, you know, shake up the industry and get us, you know, positioned properly with, you know, not only our own brands like Kik, which will be launching in Q4, but also, you know, also a lot of the development work that we're doing with major, major retailers on this product. So, once again, really exciting. And I think, you know, what we've done and how the team has executed and where we've focused our time and energy and just sticking to our knitting and getting to where we are, you know, it's been challenging. But, I mean, that's part of business. And, you know, I think everybody that I work with wants to compete and hopefully, you know, continue the wins that we have going on, whether it's in the herbs, whether it's in, you know, pickles, you know, with, you know, the Safeway win this past year and Woodman's, you know, whether it's continued growing pulp with Wakefren this year and some other retailers or just the R&TDs, which I think is just going to be just incredibly, you know, awesome, to be quite frank.

Okay, great. Yeah, I'm looking forward to following along and I'll return to the queue. Thank you for answering all my questions. You're welcome.

Thank you very much. Just a reminder there, if there are any questions, you can join the queue now by pressing star 1 on your phone keypad. Our next question is coming from Nicole Kaufman of Blackridge Capital. Nicole, your line is live.

Hi, good morning, guys. Congratulations on the quarter results.

Jim, you've talked about the significant opportunity you see at Prairie Hills and the ability to support both edible garden brands and private label and co-manufacturing customers. um can you talk about the level of interest you're seeing from potential customers and how those discussions are progressing well the interest has been it's been just phenomenal um i mean that's really you know why we did this was because retailers were coming to us and saying hey you know you guys are an innovative group you're in a really challenging category you've done a great job servicing our business um you know we want to you know we want more of what you're doing have you thought about doing this and taking what it is that you grow and potentially put it into you know a beverage helping us worth our you know our current uh you know a current current uh you know milk and whey-based products can you do something there you know i've got you know years of experience working at you know companies like matrix money and aginomoto so that at least gave me some credibility i could figure this out with the team and you know but really what's happened is, you know, I think it's been, once again, a real collective effort, you know, leveraging from, you know, a very advantageous, you know, position where people are, you know, coming to us. It doesn't happen that way in this industry. You know, I said to somebody, it's been a long time since, you know, I'm managing, you know, where am I going to put my time and how do I prioritize who we work with based on opportunity and collective vision versus, you know, just trying to sell more, you know, sell more widgets. So once again, I mean, major retailers, you know, everyone from, you know, the major retailers that we currently deal with to even new people who are coming that we haven't necessarily worked with before on the fresh side saying, hey, you know, can you do this for us. You know, private label continues to grow. There's a place for both. And, you know, and it's very, it's underserved, the private label part of it, for a multitude of reasons. There's just not enough capacity out in the marketplace. There's, you know, there's not, there's just, there's just, there's just, there's a pent up demand, especially on private label. You know, if you go into most of the grocery stores, you won't see a private label RTD, there's reasons for that. A lot of it's just, you know, capacity. And so we're going to solve that problem. We're going to solve it with some of the major retailers. Like I said, you know, we've got, you know, we've got, you know, commitments on, you know, pretty much on the whole factory. And, you know, and so right now we're just focused on executing and getting it up and running. And then, you know, as there'll be other opportunities, we'll continue to do that. And we're also seeing, you know, the ability to start to get, you know, some pricing power here on the herbs, which hopefully will lead to the RTG. There's, you know, there's, once again, it's like consolidation on the herbs. And, you know, not many companies who do what we do and do it as well as we do. So that, you know, obviously, you know, retailers, you know, will pay a little bit more now. And then, you know, because they want, you know, they want some of the problems to go away. and they want products, and if they don't have products on the shelves, they lose that sale. So, you know, we help take some of that risk away from them. And then on the ROTDs, it's, you know, once again, I think, you know, we'll continue to capture, you know, that void of volume, and I think that will help us, you know, across the board, whether it's, you know, just driving top line or being able to, you know, price us, you know, accordingly so that, you know, everybody sort of wins.

Well, that's great. I guess this kind of leads into my next question is that, you know, you guys delivered double-digit revenue growth this quarter, and your SG&A significantly declined year over year.

So what are you seeing as the biggest opportunities that would translate into the continued revenue growth and improved profitability and operating leverage? well you know look i think it's the it's kind of the the conventional wisdom that you know many of our costs will stay relatively static as we put more volume into the existing greenhouses we're not building any more greenhouses currently we've got two greenhouses we can continue to not only drive you know our signature potted product um and you know expand that but also, you know, continue to drive more fresh cut herbs, which are not necessarily contingent on how much growing space we have. And so, you know, I continue to see, you know, that revenue line continuing to go forward in that core business, you know, as well, you know, and look, we'll make some investments in, you know, in obviously in Iowa, but we have a lot of people already that can do a lot of things and work across the whole platform. And so, you know, we're going to see, you know, some good gains on revenue. We'll see some, you know, incremental staffing that will be strategic, that will be probably more focused on the Tetra Pak facility more than anything else. And, you know, some of that information will be forthcoming. But, you know, for me, I think it's like, you know, let's continue to grow the top line. We're streamlining costs, really, on the greenhouse business. and there's still some more work to do. Kostas and his team have done a very nice job, I think, of that, especially this last quarter, of, you know, focusing on the SG&A. You know, we're working to procure better on some of the things that, you know, some of the suppliers that we use. You know, as we continue to be consistent with our orders, it allows us to, you know, negotiate better terms with our suppliers, you know. And a lot of that, you know, I probably don't speak enough about that. I know that we've been doing this for over a decade, and we've got some really good suppliers that partner with us, and they're happy our business is growing, and they're happy they're obviously making money with us. And so, you know, as we scale, they're scaling and our costs go down as we get scale. I mean, that's always, right, the idea around economies of scale. And we're starting to see that, pick some of that up and help, you know, limit, you know, our costs and be more efficient in what we're doing. So revenue will continue to, you know, climb here with costs being, you know, minimized and relatively static, you know, some key strategic, you know, investments in people, which, you know, I think is our most important asset. And then from there, you know, we'll continue to do what we need to do to capture the opportunities and make the investment, you know, in the relationships or branding or anything else that, you know, we feel is warranted to make sure that we continue, you know, in the current trajectory.

Well, thank you, Jim. I appreciate that insight. I'll jump back in the queue if I have additional questions.

Thank you very much. Appreciate it.

Thank you very much. Well, we have no further questions in the queue at this time. I will now hand back over to Jim for closing comments.

Thank you. Before we conclude, I want to leave you with a few thoughts. We came into 2026 focused on strengthening our core business while continuing to build a foundation for Edible Garden's next phase of growth. Through the first half of the year, we believe we made meaningful progress on both fronts. Our core business continues to grow, supported by expanding relationships, and leading retailers, broader growth across our product portfolio, and we continued efforts to improve operating efficiency. We believe that business provides an increasingly strong commercial foundation for where we want to take edible garden next. At the same time, we are making tangible progress with Farm to Formula and Prairie Hills. The work completed with Tetra Pak along with the continued development of Prairie Hills facility brings us closer to our goal of building a scalable domestic R2D manufacturing platform capable of supporting both our own brands and private label opportunities. We believe Prairie Hills has the potential to significantly expand the scale and reach the edible garden while we combine that opportunity with retail relationships, distribution network, and operating capabilities we have already built. We believe we have the foundation to evolve edible garden into a much broader clean label food and nutrition company. There's a lot of work ahead, and our focus remains on execution, but we're encouraged by the progress we are making and excited about the opportunity in front of us. Thank you to our employees, customers, retail partners, and shareholders for your continued support. We look forward to updating you on our progress. Thank you for joining us today.

Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day. We thank you for your participation.