Edible Garden AG Inc 10-Q for FY2026 Q2
Edible Garden AG Inc (EDBL)
About this 10-Q
Edible Garden AG Inc filed this 10-Q on August 14, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $3.55M
- up 12.8% from $3.15M a year earlier
- Net loss
- $3.26M
- compared with a net loss of $4.04M a year earlier
- Diluted EPS
- -$18.79
- compared with -$2,960.37 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
Commission File Number:
(Exact name of registrant as specified in its charter) |
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(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
The | ||
The |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes
As of August 6, 2026, the registrant had
| 2 |
| Table of Contents |
EDIBLE GARDEN AG INCORPORATED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share information)
|
| June 30, |
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| December 31, |
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| 2026 |
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| 2025 |
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ASSETS |
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Current assets: |
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Cash |
| $ |
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| $ |
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Restricted cash, current |
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Accounts receivable, net |
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Inventory, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Restricted cash, noncurrent |
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Property, equipment and leasehold improvements, net |
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Operating lease right-of-use assets |
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Finance lease right-of-use assets |
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Intangible assets, net |
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Other assets |
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TOTAL ASSETS |
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LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
LIABILITIES: |
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Current liabilities: |
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Accounts payable and other accrued expenses |
| $ |
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Current maturities of operating lease liabilities |
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Current maturities of finance lease liabilities |
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Short-term debt, net of discounts |
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Derivative liability |
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Total current liabilities |
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Long-term liabilities: |
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Long-term debt, net of discounts |
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Long-term operating lease liabilities |
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Long-term finance lease liabilities |
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Total long-term liabilities |
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Total liabilities |
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COMMITMENTS AND CONTINGENCIES (Note 11) |
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STOCKHOLDERS’ EQUITY (DEFICIT): |
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Common stock ($ |
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Preferred stock ($ |
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Additional paid-in capital |
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Obligation to issue shares |
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Accumulated deficit |
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Total stockholders’ equity (deficit) |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
| $ |
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| $ |
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(1) Adjusted to reflect the stock splits as described in Note 1.
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 3 |
| Table of Contents |
EDIBLE GARDEN AG INCORPORATED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per-share information)
|
| Three Months Ended June 30, |
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| Six Months Ended June 30, |
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| 2026 |
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| 2025 |
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| 2026 |
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| 2025 |
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REVENUE |
| $ |
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| $ |
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| $ |
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OPERATING EXPENSES |
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Cost of goods sold, excluding depreciation |
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Selling, general and administrative expenses |
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Depreciation and amortization |
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Gain on sale of asset |
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Total operating expense |
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Loss from operations |
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Other income (expenses) |
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Interest expense, net |
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Loss on extinguishment of debt |
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Loss on sale of tax benefit |
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Other income / (loss) |
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Total other income (expenses) |
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Loss before income taxes |
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Income tax benefit |
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NET LOSS |
| $ | ( | ) |
| $ | ( | ) |
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Net loss per common share - basic and diluted (1) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Weighted-Average Number of Common Shares Outstanding – Basic and Diluted (1) |
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(1) Adjusted to reflect the stock splits as described in Note 1.
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 4 |
| Table of Contents |
EDIBLE GARDEN AG INCORPORATED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED JUNE 30, 2026 AND 2025
(In thousands, except for shares) (1)
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| Common Stock |
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| Preferred Stock |
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| Additional Paid-In |
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| Obligation to Issue |
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| Accumulated |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Capital |
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| Shares |
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| Deficit |
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| Total |
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Balance at March 31, 2026 |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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Accretion of preferred return on preferred stock |
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| - |
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| - |
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Series B preferred stock issued as payment of preferred return |
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| - |
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Exchange of preferred stock for common stock |
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Net loss |
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| - |
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| - |
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Balance at June 30, 2026 |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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| Common Stock |
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| Additional Paid-In |
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| Obligation to Issue |
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| Accumulated |
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| Shares |
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| Amount |
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| Capital |
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| Shares |
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| Deficit |
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| Total |
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Balance at March 31, 2025 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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Issuances of common stock for warrant exercises |
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Sale of common stock pursuant to Equity Distribution Agreement, net of fees |
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Issuances of common stock for services |
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Series B preferred stocks dividends payable |
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| - |
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Net Loss |
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| - |
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Balance at June 30, 2025 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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(1) Adjusted to reflect the stock splits as described in Note 1.
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 5 |
| Table of Contents |
EDIBLE GARDEN AG INCORPORATED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
(In thousands, except for shares) (1)
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| Common Stock |
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| Preferred Stock |
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| Additional Paid-In |
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| Obligation to Issue |
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| Accumulated |
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Capital |
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| Shares |
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| Deficit |
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| Total |
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Balance at December 31, 2025 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
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Accretion of preferred return on preferred stock |
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| - |
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| - |
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Series B preferred stock issued as payment of preferred return |
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Exchange of preferred stock for common stock |
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Issuance of common stock to employees and consultants |
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| - |
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Reverse stock split adjustment, including rounding of fractional shares |
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| - |
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Net loss |
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| - |
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| - |
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Balance at June 30, 2026 |
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| $ |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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| Common Stock |
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| Additional Paid-In |
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| Obligation to Issue |
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| Accumulated |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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| Total |
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Balance at December 31, 2024 |
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| $ | ( | ) |
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Issuances of common stock for warrant exercises |
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Sale of common stock pursuant to Equity Distribution Agreement, net of fees |
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Issuances of common stock for services |
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Series B preferred stocks dividends payable |
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| - |
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Net Loss |
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| - |
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Balance at June 30, 2025 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ |
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(1) Adjusted to reflect the stock splits as described in Note 1.
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 6 |
| Table of Contents |
EDIBLE GARDEN AG INCORPORATED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
| Six Months Ended June 30 |
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| 2026 |
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| 2025 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Bad debt expense |
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Depreciation and amortization |
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Amortization of operating lease right of use asset |
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Amortization of debt discount |
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Gain on sale of asset |
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Loss on extinguishment of debt |
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Stock-based compensation |
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Change in operating assets and liabilities: |
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Accounts receivable |
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Inventory |
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Prepaid expenses and other current assets |
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Accounts payable and accrued expenses |
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Operating lease liabilities |
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NET CASH PROVIDED BY/(USED IN) OPERATING ACTIVITIES |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of property, equipment and leasehold improvements |
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Proceed from sale of asset |
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NET CASH USED IN INVESTING ACTIVITIES |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from debt |
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Payments of debt principal |
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Proceeds from sale of preferred stock |
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Proceeds from sales of common stock from Equity Distribution Agreement |
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Proceeds from common stock warrant exercises |
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Principal payments on finance lease liabilities |
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NET CASH PROVIDED BY FINANCING ACTIVITIES |
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NET CHANGE IN CASH AND RESTRICTED CASH |
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Cash and restricted cash at beginning of period |
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CASH AND RESTRICTED CASH AT END OF PERIOD |
| $ |
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| $ |
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SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: |
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Cash paid for interest |
| $ |
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| $ |
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SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: |
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|
|
|
|
|
|
Exchange of preferred stock for common stock |
| $ |
|
| $ |
| ||
Issuance of preferred stock to settle preferred return payable |
| $ |
|
| $ |
| ||
Obligation to issue preferred stock to settle dividends payable |
| $ |
|
| $ |
| ||
Discount on note payable related to embedded derivative |
| $ |
|
| $ |
| ||
Assets acquired through issuing preferred stock |
| $ |
|
| $ |
| ||
Issuance of common stock for warrant exercise |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of the condensed consolidated financial statements.
| 7 |
| Table of Contents |
EDIBLE GARDEN AG INCORPORATED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – ORGANIZATION, NATURE OF BUSINESS, AND BASIS OF PRESENTATION
Organization and Recent Developments
Edible Garden Corp., a Nevada corporation, was incorporated on April 9, 2013. On March 28, 2020, Edible Garden Inc., a Wyoming corporation, was incorporated for the purpose of acquiring substantially all of the operating assets of Edible Garden Corp., which was a separately identified reportable segment of its parent company Blum Holdings, Inc. (formerly known as Terra Tech Corporation). The acquisition was completed on March 30, 2020. Prior to March 30, 2020, Edible Garden AG Incorporated had no operations. Hereafter, Edible Garden AG Incorporated and its subsidiaries will collectively be referred to as “Edible Garden,” “we,” “us,” “our,” or the “Successor.” Edible Garden Corp., a wholly owned subsidiary of Blum Holdings, Inc. will be referred to as the “Predecessor.” Throughout these financial statements, the Successor and the Predecessor are also referred to as “the Company” and used interchangeably, unless otherwise noted. On October 1, 2024, the Company acquired the Predecessor for the nominal price of $1.00. See Note 10, “Leases” for additional information.
The Company authorized
On November 10, 2023, the Company increased the total number of authorized shares of capital stock of the Company from
On July 13, 2026, we declared a 1-for-45 reverse stock split of our outstanding common stock. The conversion or exercise prices of our issued and outstanding warrants were adjusted in connection with the reverse stock split. No fractional shares were issued in connection with the reverse stock split. Instead, stockholders who otherwise would have been entitled to receive a fractional share received a whole share through the rounding-up mechanism provided in the Certificate of Amendment. The reverse stock split did not affect the par value of the Company's common stock, which remains $0.0001 per share, or the number of authorized shares of common stock, which remains 100,000,000 shares.
All historical share and per share amounts reflected throughout this report have been adjusted to reflect the stock splits described above.
Nature of Business
Edible Garden is a diversified clean-label nutrition company rooted in controlled environment agriculture (CEA). The Company produces and distributes locally grown, organic, and sustainable fresh produce and herbs, along with a growing portfolio of branded consumer packaged goods and nutraceutical products. The Company's products are available in more than 6,000 retail locations across the United States, the Caribbean, and South America, as well as through e-commerce channels. The Company is also developing its Prairie Hills facility in Webster City, Iowa into a ready-to-drink (“RTD”) clean nutrition manufacturing hub under its Farm-to-Formula strategy, which initiative is in the development stage and has not yet generated revenue. Our target customers are health-conscious individuals and families seeking fresh, locally grown produce and clean-label, better-for-you nutrition products.
| 8 |
| Table of Contents |
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) pursuant to Section 13 or 15(d) under the Securities Exchange Act of 1934. The December 31, 2025 balances reported herein are derived from the audited consolidated financial statements for the year ended December 31, 2025. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.
All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the Company’s unaudited condensed consolidated financial position as of June 30, 2026, the Company’s audited condensed consolidated financial position as of December 31, 2025, and the unaudited condensed consolidated results of operations for the three and six month ended June 30, 2026 and 2025, and the unaudited condensed statement of cash flows for the six month ended June 30, 2026 and 2025 have been included. Certain prior period amounts in cost of goods sold and selling, general, and administrative expenses have been reclassified to conform to current presentation.
Going Concern
The accompanying financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, the Company may seek funding through additional debt or equity financing arrangements, implement incremental expense reduction measures or a combination thereof to continue financing its operations.
However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to continue our business with limited capital resources indicate that substantial doubt exists as to our ability to continue as a going concern. See Note 13, “Going Concern” for additional information.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Recently Issued Accounting Pronouncements to Be Adopted in Future Periods
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, as clarified by ASU 2025-01, which requires public business entities to disclose additional disaggregated information about certain income statement expense captions. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its financial statement disclosures.
Management does not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material impact on the Company’s condensed consolidated financial statements or related disclosures.
| 9 |
| Table of Contents |
Use of Estimates
The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported period. Changes in these estimates and assumptions may have a material impact on the condensed consolidated financial statements and accompanying notes.
Examples of significant estimates and assumptions include allowance for credit losses, net realizable value of inventory, accrued liabilities, discount rates used in the measurement and recognition of lease liabilities, recurring fair value measurements, the fair value of property and equipment acquired, stock-based compensation, and the fair value of the associated preferred stock issued in the Natural Shrimp Acquisition. These estimates generally involve complex issues and require us to make judgments, involving an analysis of historical and future trends, that can require extended periods of time to resolve, and are subject to change from period to period. In all cases, actual results could differ materially from our estimates.
Trade and Other Receivables
The Company extends non-interest-bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets net of an allowance. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current and expected future economic trends, in determining the allowance. The Company does not accrue interest receivable on past due accounts receivable. The reserve for credit losses was $
Concentration of Credit Risk
During the six months ended June 30, 2026 and 2025, four customers accounted for approximately
This concentration of customers leaves us exposed to the risks associated with the loss of one or more of these significant customers, which would materially and adversely affect our revenues and results of operations.
Fair Value of Financial Instruments
The Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level.
The following are the hierarchical levels of inputs to measure fair value:
| · | Level 1 – Observable inputs that reflect quoted market prices in active markets for identical assets or liabilities. |
| · | Level 2 - Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| · | Level 3 – Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. |
The only financial instrument measured at fair value on a recurring basis is the embedded derivative, see Note 7, “Notes Payable”, for further disclosure.
| 10 |
| Table of Contents |
Inventory
We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out method, or its net realizable value. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and reserve accordingly. Our reserve estimate for excess and obsolete inventory is based on expected future use. Our reserve estimates have historically been consistent with our actual experience as evidenced by actual sale or disposal of the goods. The reserve for excess and obsolete inventory was not material as of June 30, 2026 and December 31, 2025.
Prepaid Expenses and Other Current Assets
Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring up-front payments.
Property, Equipment and Leasehold Improvements, Net
Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company’s leasehold improvements, equipment and vehicles, have useful lives of five years. Land has indefinite useful life, and construction in progress has no useful life until the asset is available for use.
Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. 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. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See Note 4, “Property, Equipment and Leasehold Improvements, Net” for further information.
Intangible Assets
Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment.” Intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined.
The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period the impairment is identified.
| 11 |
| Table of Contents |
Revenue Recognition and Performance Obligations
Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company does not offer returns, discounts, loyalty programs or other sales incentive programs that are material to revenue recognition. Payments from our customers are due upon delivery or within a short period after delivery.
Disaggregation of Revenue
The following table includes revenue disaggregated by revenue stream for the three months ended June 30, 2026 and 2025:
|
| (in thousands) |
| |||||||||||||
|
| Three Months Ended, |
|
| Six Months Ended, |
| ||||||||||
|
| June 30, 2026 |
|
| June 30, 2025 |
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||||
Herbs, Produce & Floral |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Vitamins and Supplements |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Contract Balances
Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC Topic 606.
Contract Estimates and Judgments
On January 1, 2024, the Company and Meijer Distribution, Inc. (the “Buyer”) entered into two agreements pursuant to which the Company will supply and sell products to Buyer (the “Agreements”). Under the Agreements, the Company sells (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 on a delivery schedule requested by the Buyer at prices per unit set in advance by the Company and the Buyer. Under the 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. Any price increase will take effect 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 Agreements immediately.
In addition, under the agreement governing the purchase of potted herbs, the Company agreed to fund the installation of fixtures in each of the Buyer’s stores to display the potted herbs in an aggregate amount estimated to be approximately $
The Agreements became effective as of January 1, 2024, and expire on December 31, 2026. The Agreements may be renewed for an additional two-year term upon the mutual agreement of the Company and the Buyer. The Agreements may be terminated by the Buyer without cause upon sixty days’ prior notice.
Management has determined the payments for the fixtures should be treated as a reduction in revenue under the guidance of ASC 606. As we do not expect the agreement to be terminated before the end of the three-year term, the aggregate cost of the fixtures of approximately $
On July 28, 2026, the Company and Buyer entered into a purchase agreement pursuant to which the Company will supply Buyer-branded products to the Buyer (the “2027 Agreement”) beginning in January 2027. The 2027 Agreement will replace the Agreements between the Company and the Buyer scheduled to expire December 31, 2026.
| 12 |
| Table of Contents |
Cost of Goods Sold
Cost of goods sold includes materials, labor and overhead costs incurred in cultivating, producing, and shipping our products.
Advertising Expenses
The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” During the six months ended June 30, 2026 and 2025, advertising expenses totaled $
Loss Per Common Share
In accordance with the provisions of ASC 260, “Earnings Per Share,” net loss per share is computed by dividing net loss after deducting cumulative unpaid dividends and accretion of the preferred stock, when applicable by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are generally not considered in the diluted loss per share calculation since the effect would generally be anti-dilutive. The results of operations were a net loss for the three and six months ended June 30, 2026 and 2025. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for all periods. Diluted earnings per share for the three and six months ended June 30, 2026 and 2025 excluded warrants to purchase
The following table presents the calculation of basic and diluted loss per share of common stock:
|
| (in thousands) |
| |||||||||||||
|
| Three Months Ended, |
|
| Six Months Ended, |
| ||||||||||
|
| June 30, 2026 |
|
| June 30, 2025 |
|
| June 30, 2026 |
|
| June 30, 2025 |
| ||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
Deemed dividend on warrant |
|
|
|
|
| ( | ) |
|
|
|
|
| ( | ) | ||
Accretion of Series B preferred stock |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| ||
Net loss attributable to common stockholders – basic and diluted |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding – basic and diluted |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders – basic and diluted |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| 13 |
| Table of Contents |
Income Taxes
The provision for income taxes is determined in accordance with ASC 740, “Income Taxes”. The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred income taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At June 30, 2026 and December 31, 2025, such net operating losses were offset entirely by a valuation allowance.
The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the condensed consolidated statements of operations.
During the six months ended June 30, 2026, the Company completed a transaction under the New Jersey Technology Business Tax Certificate Transfer Program administered by the New Jersey Economic Development Authority pursuant to which the Company sold certain unused New Jersey state net operating loss carryforwards to an unrelated third party.
Under the terms of the agreement, the Company transferred New Jersey state net operating losses that previously resulted in a deferred tax asset of approximately $
Segment Reporting
The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one operating segment. The Company’s chief operating decision maker (“CODM”) consists of the Chief Executive Officer and its Interim Chief Financial Officer. Management believes that its business operates as one segment because: a) CODM evaluates profit and loss of the Company as a whole; b) the CODM does not review information based on any operating segment; c) the Company does not maintain discrete financial information on any specific segment; d) the Company has not chosen to organize its business around different products and services, and e) the Company has not chosen to organize its business around geographic areas. Accordingly, all amounts required to be disclosed under ASC 280 are included in the financial statements. The measure of segment profit/loss, measure of segment assets, and significant segment expenses that are regularly provided to the chief operating decision maker are shown individually in the statements of operations and balance sheets.
| 14 |
| Table of Contents |
NOTE 3 – SELECTED CURRENT ASSET ACCOUNTS
Prepaid expenses and other current assets
The following table summarizes prepaid expenses and other current assets as of June 30, 2026 and December 31, 2025:
|
| (in thousands) |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
Prepaid insurance |
| $ |
|
| $ |
| ||
Other prepaid expenses |
|
|
|
|
|
| ||
Vendor prepayment |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total prepaid expenses and other current assets |
| $ |
|
| $ |
| ||
Inventory
The following table summarizes inventory as of June 30, 2026 and December 31, 2025:
|
| (in thousands) |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
Raw materials |
| $ |
|
| $ |
| ||
Work-in-progress |
|
|
|
|
|
| ||
Finished goods |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total inventory |
| $ |
|
| $ |
| ||
NOTE 4 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET
The following table summarizes property, equipment and leasehold improvements as of June 30, 2026 and December 31, 2025:
|
| (in thousands) |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
Furniture and equipment |
|
|
|
|
|
| ||
Computer hardware |
|
|
|
|
|
| ||
Leasehold improvements |
|
|
|
|
|
| ||
Vehicles |
|
|
|
|
|
| ||
Land |
|
|
|
|
|
| ||
Construction in progress |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Subtotal |
|
|
|
|
|
| ||
Less accumulated depreciation |
|
| ( | ) |
|
| ( | ) |
Property, equipment and leasehold improvements, net |
| $ |
|
| $ |
| ||
Depreciation expense related to property, equipment and leasehold improvements for the six months ended June 30, 2026 and 2025 was $
| 15 |
| Table of Contents |
NOTE 5 – INTANGIBLE ASSETS
The following table summarizes intangible assets as of June 30, 2026 and December 31, 2025:
|
|
|
|
| (in thousands) |
| ||||||||||||||||||||||
|
| Estimated |
|
| June 30, 2026 |
|
| December 31, 2025 |
| |||||||||||||||||||
|
| Useful Life in Years |
|
| Gross Carrying Value |
|
| Accumulated Amortization |
|
| Net Carrying Value |
|
| Gross Carrying Value |
|
| Accumulated Amortization |
|
| Net Carrying Value |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||
Amortizing Intangible Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Intellectual property |
|
|
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| |||||
Pulp brand recipes |
|
|
|
|
|
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| |||||
Non-compete agreement |
|
|
|
|
|
|
|
| ( | ) |
|
|
|
|
|
|
|
| ( | ) |
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Intangible Assets, net |
|
|
|
|
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||
Amortization expense for the six months ended June 30, 2026 and 2025 was $
NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
The following table summarizes accounts payable and accrued expenses as of June 30, 2026 and December 31, 2025:
|
| (in thousands) |
| |||||
|
| June 30, 2026 |
|
| December 31, 2025 |
| ||
|
|
|
|
|
|
| ||
Accounts payable |
| $ |
|
| $ |
| ||
Accrued interest payable |
|
|
|
|
|
| ||
Accrued payroll |
|
|
|
|
|
| ||
Accrued vacation |
|
|
|
|
|
| ||
Other accrued expenses |
|
|
|
|
|
| ||
Employee retention credit funds |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Total Accounts Payable and Accrued Expenses |
| $ |
|
| $ |
| ||
| 16 |
| Table of Contents |
NOTE 7 – NOTES PAYABLE
The following table summarizes notes payable as of June 30, 2026 and December 31, 2025:
|
| (in thousands) |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Streeterville notes |
| $ |
|
| $ |
| ||
Avondale secured promissory note |
|
|
|
|
|
| ||
Insurance financing agreement |
|
|
|
|
|
| ||
NJD Investments, LLC promissory note |
|
|
|
|
|
| ||
SBA loans |
|
|
|
|
|
| ||
Vehicle loans |
|
|
|
|
|
| ||
Total Gross Debt |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Less: debt discounts and issuance costs |
|
| ( | ) |
|
| ( | ) |
Total Net Debt |
| $ |
|
| $ |
| ||
The principal payments due on our notes payable for the remaining six months ending December 31, 2026 and for each of the next four years ending December 31, and thereafter were as follows (in thousands):
Years Ending December 31, |
| Amount |
| |
2026 (remaining) |
|
|
| |
2027 |
|
|
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 |
|
|
| |
Thereafter |
|
|
| |
Total |
| $ |
| |
Streeterville Note
On March 3, 2026, the Company entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Streeterville Capital, LLC (“Streeterville”), pursuant to which the Company issued a secured promissory note (the “Streeterville Note”) with an aggregate principal balance of $
The Streeterville Note bears interest at a rate of
In addition, beginning three months after issuance of the Streeterville Note, the Company is required to pay a monthly monitoring fee to Streeterville in accordance with the terms of the Note Purchase Agreement. The monitoring fee is recorded within interest expense over the term in which the obligation is incurred.
The Streeterville Note is secured by substantially all of the Company’s assets pursuant to a related security agreement. The obligations under the Streeterville Note contain customary events of default, including, among others, failure to make required payments, bankruptcy or insolvency events, and breaches of representations, warranties or covenants. Upon an event of default, the outstanding obligations may become immediately due and payable and may accrue interest at a default rate as defined in the agreement.
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The Company evaluated the accounting treatment of the Streeterville Note under applicable accounting guidance, including ASC 470, Debt, and ASC 815, Derivatives and Hedging. The Company concluded that the OID and debt issuance costs should be recorded as a direct deduction from the carrying amount of the debt and amortized to interest expense over the term of the Streeterville Note using the effective interest method and that certain contingent payment provisions, including the monitoring fee and trigger effect provisions, could result in additional amounts becoming payable upon the occurrence or nonoccurrence of specified future events. The Company determined that these features were not clearly and closely related to the debt host and therefore were required to be bifurcated and accounted for separately as an embedded derivative liability. The fair value of the embedded derivative was determined using a probability-weighted valuation methodology that considered the expected incremental cash flows associated with the monitoring fee and trigger effects, including the probability of the applicable events and an appropriate discount rate. The embedded derivative was initially recognized at fair value as a debt discount and is subsequently remeasured at fair value at each reporting date, with changes in fair value recognized in earnings
Streeterville Notes A-1 and B
On June 12, 2026, the Company entered into a Notes Purchase Agreement with Streeterville pursuant to which it issued (i) a Promissory Note A-1 with an original principal amount of $
The Company received aggregate financing proceeds of $
Under the Notes Purchase Agreement, each time the aggregate stated value of the Company’s Series B Preferred Stock held by Streeterville that is retired reaches $
As of June 30, 2026, the Company had
The A-1 Note includes an original issue discount of $
The B Note is secured by the restricted deposit account, a first-priority security interest in the membership interests of EDBL Holdings, LLC, and guarantees provided by certain wholly owned subsidiaries. Beginning six months after issuance, the lender may require monthly cash redemptions of portions of the A-1 Note and, under specified circumstances, limited redemptions of the B Note. The financing documents also permit exchanges of portions of the B Note into additional A Notes upon the occurrence of specified contractual milestones. The Company will evaluate any future exchanges under the debt modification and extinguishment guidance in ASC 470-50 when such exchanges occur.
NOTE 8 – SERIES B PREFERRED STOCK
In connection with the asset purchase agreement (the “APA”), on May 13, 2025, the Board approved a certificate of designation, subsequently amended on July 29, 2025 and August 13, 2025, fixing the voting powers, designations, preferences and rights and the qualifications, limitations or restrictions of the Series B Preferred Stock, a series of preferred stock of the Company. Of the Company’s
As consideration for the acquired assets pursuant to the APA, the Company issued
Also on May 14, 2025, the Company entered into a stock purchase agreement (the “SPA”) with Streeterville, pursuant to which the Company issued
Beginning in December 2025, the Company entered into a series of exchange agreements with Streeterville pursuant to which shares of Series B Preferred Stock were exchanged for shares of the Company's common stock. As of December 31, 2025, the Company had exchanged
As of June 30, 2026, there were
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NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT) AND STOCK-BASED COMPENSATION
Public Offerings
On May 23, 2024,
The May Warrants had an exercise price of $
Subject to certain ownership limitations described in the May Pre-Funded Warrants, the May Pre-Funded Warrants were immediately exercisable and may be exercised at a nominal exercise price of $113 per share of common stock any time until all of the May Pre-Funded Warrants are exercised in full.
In connection with the May Offering, on May 22, 2024, the Company also entered into a placement agency agreement pursuant to which Maxim Group LLC (“Maxim”) served as the exclusive placement agent in connection with the May Offering. The Company paid Maxim a cash fee of 7.0% of the aggregate gross proceeds raised at the closing of the May Offering and reimbursement of certain expenses and legal fees in the amount of $
The Company received gross proceeds of $
On September 30, 2024,
The September Warrants have an exercise price of $
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In connection with the September Offering, on September 27, 2024, the Company also entered into a placement agency agreement pursuant to which Maxim served as the exclusive placement agent in connection with the September Offering. The Company paid Maxim a cash fee of 7.0% of the aggregate gross proceeds raised at the closing of the September Offering and reimbursement of certain expenses and legal fees in the amount of $
The Company received gross proceeds of $
Inducement Letters
On December 23, 2024,
On May 21, 2025,
On October 16, 2025,
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Equity Distribution Agreement
On January 31, 2025, the Company entered into an Equity Distribution Agreement (the “2025 EDA”) with Maxim as sales agent, pursuant to which the Company sold shares of its common stock through Maxim in an at-the-market offering for an aggregate offering price of up to $
Subject to the terms and conditions of the 2025 EDA, Maxim used its commercially reasonable efforts to sell shares of common stock from time to time, based upon the Company’s instructions. The Company has provided Maxim with customary indemnification rights, and Maxim will be entitled to a fixed commission of
During the year ended December 31, 2025, we sold
On August 11, 2026, we entered into a new Equity Distribution Agreement with Maxim as sales agent. See Note 14, “Subsequent Events,” for further discussion.
Common Stock
The Company has authorized
Stock-Based Compensation
On January 18, 2022 in connection with the IPO, the board of directors (the “Board”) approved the Edible Garden AG Incorporated 2022 Equity Incentive Plan (the “2022 Plan”). The 2022 Plan provides for equity incentive compensation for employees, non-employee directors, and any other individuals who perform services for the Company. The number of shares initially available for grant under the 2022 Plan was
On June 8, 2023 the stockholders of the Company approved the First Amendment to the 2022 Plan, which increased the number of shares of common stock reserved for issuance thereunder by 13 shares and extended the term of the 2022 Plan until June 8, 2033.
On August 21, 2024, the stockholders of the Company approved the Second Amendment to the 2022 Plan to: (i) increase the number of shares of common stock reserved for issuance thereunder by 578 shares, (ii) update the recoupment provisions of the 2022 Plan to be consistent with the Company’s Policy for the Recovery of Erroneously Awarded Compensation, and (iii) extend the term of the 2022 Plan until August 21, 2034.
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During the six months ended June 30, 2026, the Company issued
As of June 30, 2026, shares available for future stock compensation grants totaled
Warrants
There was no warrant activity during the six months ended June 30, 2026. As of June 30, 2026 and December 31, 2025, outstanding warrants were exercisable for 9,807 shares of common stock at a weighted-average exercise price of $1,923 per share.
NOTE 10 – LEASES
Management determines if a contract is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the use of the asset. Such assets are classified as right-of-use assets (“lease assets”) with a corresponding lease liability.
Finance and operating lease assets and liabilities are recorded at commencement at the present value of future minimum lease payments over the expected lease term. As the implicit discount rate for the present value calculation is not determinable in most of the Company’s leases, management uses the Company’s incremental borrowing rate based on the information available at commencement of the lease. The expected lease terms include options to extend the lease when it is reasonably certain the Company will exercise such options. Lease expense for minimum lease payments is recognized on a straight-line basis over the expected lease term. Leases with an expected term of 12 months or less are not accounted for on the balance sheet and the related lease expense is recognized on a straight-line basis over the expected lease term.
Operating Lease
On October 1, 2024, the Company acquired Edible Garden Corp. (“EGC”) from Unrivaled Brands, Inc., our former parent company, for the nominal price of $1.00. At our inception, the Company acquired substantially all of the assets of EGC from Unrivaled Brands, Inc., except for the lease agreement between EGC and Whitetown Realty, LLC (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. 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 the acquisition of EGC, we assumed the Lease and became subject to its terms. The Lease has a term that commenced on January 1, 2015 and ends on December 31, 2029. Under the terms of the Lease, the Company will pay the Landlord a monthly lease payment of approximately $
During the six months ended June 30, 2026, total operating lease cost was $
The table below presents total operating lease assets and lease liabilities as of June 30, 2026 and December 31, 2025:
|
| (in thousands) |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Operating lease assets |
| $ |
|
| $ |
| ||
Current maturities of operating lease liabilities |
| $ |
|
| $ |
| ||
Long-term operating lease liabilities |
| $ |
|
| $ |
| ||
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The table below presents the maturities of operating liabilities for the remaining six months ending December 31, 2026 and for each of the next four years ending December 31 are as follows:
|
| (in thousands) |
| |
|
| Operating |
| |
|
| Leases |
| |
2026 (remaining) |
| $ |
| |
2027 |
|
|
| |
2028 |
|
|
| |
2029 |
|
|
| |
2030 |
|
|
| |
Total lease payments |
|
|
| |
Less: discount |
|
| ( | ) |
Total operating lease liabilities |
| $ |
| |
Other information related to the operating lease term and discount rate is as follows:
|
| June 30, |
| |
|
| 2026 |
| |
Weighted-average remaining lease term (years) |
|
|
| |
Interest rate |
|
| % | |
Finance Leases
The Company has finance leases for various vehicles with terms of approximately
The table below presents total finance lease assets and lease liabilities as of June 30, 2026 and December 31, 2025:
|
| (in thousands) |
| |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2026 |
|
| 2025 |
| ||
Financing lease assets |
| $ |
|
| $ |
| ||
Current maturities of finance lease liabilities |
| $ |
|
| $ |
| ||
Long-term finance lease liabilities |
| $ |
|
| $ |
| ||
The components of finance lease expense are as follows:
|
|
|
| (in thousands) |
| |||||
|
|
| Six Months Ended |
| ||||||
|
| Classification on the Statement of Operations |
| June 30, 2026 |
|
| June 30, 2025 |
| ||
Finance lease cost: |
|
|
|
|
|
|
|
| ||
Amortization of right-of-use assets |
| Selling, general and administrative expenses |
| $ |
|
| $ |
| ||
Interest on finance lease liabilities |
| Interest expense, net |
|
|
|
|
|
| ||
Total finance lease cost |
|
|
| $ |
|
| $ |
| ||
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The table below presents the maturities of financing lease liabilities for the remaining six months ending December 31, 2026 and for each of the next two years ending December 31, and thereafter were as follows:
|
| (in thousands) |
| |
|
| Financing |
| |
|
| Leases |
| |
2026 (remaining) |
| $ |
| |
2027 |
|
|
| |
Total lease payments |
|
|
| |
Less: interest |
|
| ( | ) |
Total finance lease liabilities |
| $ |
| |
NOTE 11 – COMMITMENTS AND CONTINGENCIES
From time to time, we may be party to or otherwise involved in legal proceedings arising in the ordinary course of business. Management does not believe that there is any pending or threatened proceeding against us, which, if determined adversely, would have a material adverse effect on our business, results of operations or financial condition.
NOTE 12 – RELATED PARTY TRANSACTION
Streeterville is a principal stockholder of the Company and the sole holder of the Company's Series B Preferred Stock. Avondale Capital LLC (“Avondale”) is an affiliate of Streeterville. Both entities are considered related parties of the Company. During the six months ended June 30, 2026, the Company entered into notes purchase agreements and related guarantees (see Note 7) and a series of Series B Preferred Stock exchange agreements (see Note 8) with Streeterville. As of June 30, 2026, the Company has an outstanding balance of notes payable due to Avondale and Streeterville (see Note 7).
NOTE 13 – GOING CONCERN
These financial statements are prepared on a going concern basis. The Company began operating in 2020. For the six months ended June 30, 2026, we incurred a net loss of $
We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenue and reduce costs to a point of positive cash flow. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling securities. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations, or if we are able to raise capital, that it will be available to us on acceptable terms, on an acceptable schedule, or at all.
The issuance of additional securities may result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming these loans would be available, will increase our liabilities and future cash commitments. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations.
The risks and uncertainties surrounding our ability to raise capital and to continue our business with limited capital resources indicates that substantial doubt exists as to our ability to continue as a going concern for twelve months from the issuance of these financial statements.
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NOTE 14 – SUBSEQUENT EVENTS
After June 30, 2026, the Company exchanged
On June 30, 2026, the Company's stockholders approved an amendment to the Company's Certificate of Incorporation to effect a 1-for-45 reverse stock split of the Company's issued and outstanding common stock. The Certificate of Amendment was filed with the Secretary of State of the State of Delaware on July 8, 2026, and the reverse stock split became effective on July 13, 2026. All share and per share amounts throughout the condensed consolidated financial statements have been retroactively adjusted to reflect the reverse stock split.
On July 27, 2026, the Company received written notification from The Nasdaq Stock Market LLC (“Nasdaq”) that the Nasdaq Hearing Panel (the “Panel”) granted the Company an extension until August 15, 2026 to regain compliance with the rule requiring listed companies to maintain a minimum closing bid price of at least $1 per share (the “Bid Price Rule”). This decision followed the Company’s hearing before the Panel, which was held on July 9, 2026, relating to the Company’s compliance with the Bid Price Rule. The extension by the Panel is contingent on the Company demonstrating compliance with the Bid Price Rule and remaining in compliance with Nasdaq’s continued listing standards. If the Company is not successful in demonstrating compliance with the Bid Price Rule by the deadline, the Panel may reconsider the extension. In addition, the Panel will maintain jurisdiction over the Company’s listing through November 23, 2026. During this period, if the Company does not maintain compliance with the Bid Price Rule, the Panel will immediately delist the Company’s securities from Nasdaq. Pursuant to Nasdaq listing rule 5815(d)(4)(B), the Company will also be subject to a Mandatory Panel Monitor for one year from the date the Nasdaq staff confirms the Company has regained compliance with the Bid Price Rule.
On July 28, 2026, the Company and Meijer Distribution, Inc. (the “Buyer”) entered into a purchase agreement pursuant to which the Company will supply Buyer-branded products to the Buyer (the “2027 Agreement”) beginning in January 2027. The Agreement replaces the agreements between the Company and the Buyer scheduled to expire December 31, 2026. Under the 2027 Agreement, the Company will sell hydroponic, potted, and fresh cut herbs to the Buyer according to per-unit prices set in advance under the 2027 Agreement by the Company and the Buyer. The Buyer’s purchases will be in quantities and according to delivery schedules requested by the Buyer. Under the 2027 Agreement, the Company and the Buyer will renegotiate the prices for each unit annually. Once set, the pricing terms will remain fixed for the remainder of the year, subject to price adjustments as a result of duties, tariffs or other governmental actions that are supported by Company documentation and approved by the Buyer. The 2027 Agreement will become effective January 1, 2027 and will expire on December 31, 2028. The Buyer may terminate the 2027 Agreement (i) without cause upon 60 days’ prior notice, (ii) for cause upon 30 days’ prior written notice of disagreement regarding tariff-related price increases, and (iii) immediately if the Company does not provide the Buyer with products that meet the Buyer’s quality standards. Either party may terminate the 2027 Agreement for cause after a 15-day cure period for resolving a breach of the 2027 Agreement.
On August 11, 2026, the Company entered into an Equity Distribution Agreement (the “2026 EDA”) with Maxim as sales agent, pursuant to which the Company may, from time to time, issue and sell shares of its common stock through Maxim in an at-the-market offering for an aggregate offering price of up to $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
In addition to historical information, this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which provides a “safe harbor” for forward-looking statements made by us. All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends, and other information, may be forward-looking statements. Words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “might,” “potential,” “projections,” “should,” “will,” “would,” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs, estimates, and projections will occur or can be achieved. Actual results may vary materially from what is expressed in or indicated by the forward-looking statements.
These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or anticipated results, including:
| · | our history of losses and our ability to continue as a going concern; |
| · | our ability to obtain additional financing to fund our operations; |
| · | our ability to maintain the listing of our common stock on the Nasdaq Stock Market LLC (“Nasdaq”) and comply with Nasdaq’s listing standards; |
| · | the departure of members of our management team; |
| · | our market opportunity; |
| · | our ability to effectively manage our growth; |
| · | our ability to complete and integrate business acquisitions; |
| · | the effects of increased competition as well as innovations by new and existing competitors in our market; |
| · | our ability to retain our existing customers and to increase our customer base; |
| · | the future growth of the indoor agriculture industry and demands of our customers; |
| · | our ability to maintain, or strengthen awareness of, our brand; |
| · | our ability to expand the product lines we offer; |
| · | our ability to maintain, protect, and enhance our intellectual property; |
| · | future revenue, hiring plans, expenses and capital expenditures; |
| · | our ability to pay our debts as they come due; |
| · | our ability to comply with new or modified laws and regulations that currently apply or become applicable to our business; |
| · | our ability to recruit and retain key employees and management personnel; |
| · | our financial performance and capital requirements; and |
| · | the potential lack of liquidity and trading of our securities. |
The following discussion should be read in conjunction with our financial statements and notes thereto included elsewhere in this report and our other reports filed with the Securities and Exchange Commission (“SEC”).
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OVERVIEW
We are 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 operate glass, hydroponic, and vertical greenhouse structures that enable us to grow organic herbs consistently year-round while using less land, less energy, and less water than conventional agriculture. 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. Growing these products sustainably means that we avoid depleting natural resources in order to maintain an ecological balance, such as by renewing, reusing and recycling materials in order to lower the overall one-time use of materials. Our facilities utilize "closed loop" irrigation systems that recollect and reuse drain water—including water recycled through reverse osmosis—reducing overall water consumption and helping conserve natural resources. Our advanced systems are also designed to help mitigate contamination from harmful pathogens, including salmonella, e-coli and others.
Our operations are supported by GreenThumb®, our proprietary patented greenhouse management and demand-planning software (U.S. Patent Nos. 11,158,006 B1; 11,410,249 B2; and 11,830,088 B2). GreenThumb tracks plants through all stages of production and distribution, supporting quality control, traceability, fill-rate management, and logistics optimization, including maximizing truckload efficiency to reduce greenhouse gas emissions. We believe GreenThumb is a meaningful competitive differentiator and an important component of our Zero-Waste Inspired® model.
As of June 30, 2026, we offer more than 140 stock keeping units ("SKUs") spanning two principal product segments: (i) fresh produce, including cut herbs, hydroponic basil, potted herbs, and wheatgrass; and (ii) shelf-stable and refrigerated consumer packaged goods, including sports nutrition and nutraceuticals (Kick.™ and Vitamin Whey®/Vitamin Way®), fermented gourmet sauces and chili-based products (Pulp®), and functional fermented pickles and sauerkraut (Pickle Party™). We also supply products under private label arrangements to major retail customers. We have leveraged our brand recognition to offer co-manufactured consumer-packaged goods across protein, fermented foods, and flavoring categories in addition to our core fresh produce business. Our tagline "Simply Local, Simply Fresh" reflects our strategy of growing products in regional communities close to the retail locations where they are sold, extending shelf life and supporting local brand awareness.
Our products are available in over 6,000 retail locations across the United States, the Caribbean, and South America. We operate vertically integrated greenhouses and processing facilities at Edible Garden Heartland in Grand Rapids, Michigan; Edible Garden Prairie Hills in Webster City, Iowa; and our headquarters at Edible Garden Belvidere in Belvidere, New Jersey. We also partner with a network of contract growers strategically located near major U.S. population centers.
We hold food safety certifications from Primus GFS (a Global Food Safety Initiative ("GFSI")-accredited program), USDA Organic certification for applicable products, and non-GMO verification from the non-GMO Project for select SKUs. We are licensed under the Perishable Agricultural Commodities Act ("PACA") and voluntarily comply with Hazard Analysis Critical Control Point ("HACCP") principles established by the U.S. Food and Drug Administration.
We have a history of operating losses since inception and expect to incur additional near-term losses. Our auditors have issued an opinion expressing substantial doubt about our ability to continue as a going concern. See "Risk Factors" and "Management's Discussion and Analysis — Liquidity and Capital Resources" for additional discussion of these matters.
Since our initial public offering, our primary business strategy has been focused on the production and sale of fresh, locally grown, USDA Organic produce through a vertically integrated CEA model. During the fiscal year ended December 31, 2025, and continuing into 2026, we began executing a material expansion and evolution of that strategy.
Specifically, we are transitioning our Edible Garden Prairie Hills facility in Webster City, Iowa into a dedicated ready-to-drink ("RTD") and clean nutrition manufacturing hub. This initiative represents a significant broadening of our business from primarily fresh, perishable produce into what we expect will be higher-margin, shelf-stable beverage and nutrition categories. We have characterized this evolution as the development of a vertically integrated domestic clean-label nutrition platform that combines our existing controlled-environment agriculture capabilities with scalable aseptic processing capacity and differentiated branded products across sports nutrition, adult and children's performance nutrition, and GLP-1 supportive categories.
This strategic shift, which we refer to as our "Farm-to-Formula®" strategy, connects our CEA-sourced ingredients with advanced research and development and precision formulation capabilities to deliver finished functional RTD beverages at commercial scale. This represents a material change from our previously disclosed strategy of focusing principally on fresh produce, and investors should consider the risks and opportunities associated with this expansion when evaluating our business.
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On March 4, 2026, we entered into two Interim Order Agreements (the "IOAs") with Tetra Pak Inc. ("Tetra Pak"), a global leader in food processing and packaging solutions, to commence engineering services and preliminary procurement activities for the Webster City, Iowa production project (the "Project"). The IOAs cover both processing equipment and aseptic packaging systems and are intended as the initial step toward a definitive final supply agreement governing the full scope of equipment installation and integration.
The planned facility will utilize Tetra Pak's Tetra Prisma® Aseptic 330 Edge package—a format made primarily from renewable, plant-based materials that is designed to be recyclable—together with the Tetra Pak® A3/Speed filling platform. These systems are expected to extend product shelf life without refrigeration or preservatives prior to opening, support ambient distribution, maintain clean-label standards, and reduce overall supply chain costs and food waste.
Phase 1 production at the Webster City facility is anticipated to begin in 2027, subject to the execution of a final supply agreement with Tetra Pak, completion of engineering and installation, regulatory approvals, and adequate capital availability. There is no assurance that a final agreement will be executed, that the facility will be completed on the anticipated timeline, or that Phase 1 production will commence as planned. This initiative is in the early development stage, and investors should not place undue reliance on timing or scale projections, or our ability to complete the Project.
The Midwest facility encompasses more than 200,000 square feet of food-grade manufacturing space with warehousing and logistics infrastructure, and upon completion of the RTD buildout is expected to support aseptic and ultra-filtered beverage production across protein, plant-based, dairy, and functional categories. The Company intends for the facility to serve as a scalable innovation platform supporting product development and revenue diversification beyond fresh perishables.
RECENT DEVELOPMENTS
Reverse Stock Split
On July 8, 2026, we filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-45 reverse stock split of its common stock (the “Reverse Stock Split”), effective as of 12:01 a.m. Eastern Time on July 13, 2026. As a result of the Reverse Stock Split, every 45 shares of our outstanding common stock were combined into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split; any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share. Proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of outstanding warrants and to all then-outstanding awards under our equity incentive plan. The Reverse Stock Split did not change the par value of the common stock or the total number of authorized shares. All share and per share amounts in these condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the Reverse Stock Split, unless otherwise noted.
The Reverse Stock Split was implemented, in part, to help regain compliance with Nasdaq’s continued listing requirements.
Nasdaq Compliance
On May 27, 2026, we received a letter from the Listing Qualifications Department (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 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”). Under Nasdaq Listing Rule 5810(c)(3)(A)(iv), because we had effected a reverse stock split over the prior one-year period or have effected one or more 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. On June 3, 2026, we timely submitted a request for a hearing before a Nasdaq Hearings Panel (the “Panel”), which was scheduled for July 9, 2026. On July 27, 2026, we received written notification from Nasdaq that the Panel granted us an extension until August 15, 2026 to regain compliance with Bid Price Rule. We believe we have regained compliance with the Bid Price Rule as of July 27, 2026.
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Streeterville Transactions
During the six months ended June 30, 2026, we entered into exchange agreements (the “Exchange Agreements”) with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”) pursuant to which we agreed to exchange an aggregate of 9,781 shares of our Series B Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), for a total of 511,768 shares of our common stock, par value $0.0001 per share (“Exchange Shares”). The Preferred Stock had an aggregate stated value of $9.7 million. The number of Exchange Shares issued under the Exchange Agreements was determined by dividing the Stated Value by the Nasdaq Minimum Price of our common stock as reported on the Nasdaq Capital Market on the day immediately preceding the date the Exchange Agreements were entered into or a value attributed to the Exchange Shares as determined by the Company and Streeterville. The issuance of the Exchange Shares pursuant to the Exchange Agreements were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were conducted pursuant to the exemption provided in Section 3(a)(9) under the Securities Act.
Subsequent to June 30, 2026, we entered into additional Exchange Agreements with Streeterville pursuant to which we agreed to exchange an aggregate of 4,460 shares of the Preferred Stock with an aggregate Stated Value of $4.5 million for a total of approximately 1,394,553 shares of common stock.
Meijer Agreement
On July 28, 2026, we entered into a purchase agreement with Meijer Distribution, Inc. (the “Buyer”) pursuant to which we will supply Buyer-branded products to the Buyer (the “2027 Agreement”) beginning in January 2027. The Agreement replaces the agreements between us and the Buyer scheduled to expire December 31, 2026. Under the 2027 Agreement, we will sell hydroponic, potted, and fresh cut herbs to the Buyer according to per-unit prices set in advance under the 2027 Agreement by us and the Buyer. The Buyer’s purchases will be in quantities and according to delivery schedules requested by the Buyer. Under the 2027 Agreement, we and the Buyer will renegotiate the prices for each unit annually. Once set, the pricing terms will remain fixed for the remainder of the year, subject to price adjustments as a result of duties, tariffs or other governmental actions that are supported by our documentation and approved by the Buyer. The 2027 Agreement will become effective January 1, 2027 and will expire on December 31, 2028. The Buyer may terminate the 2027 Agreement (i) without cause upon 60 days’ prior notice, (ii) for cause upon 30 days’ prior written notice of disagreement regarding tariff-related price increases, and (iii) immediately if we do not provide the Buyer with products that meet the Buyer’s quality standards. Either party may terminate the 2027 Agreement for cause after a 15-day cure period for resolving a breach of the 2027 Agreement.
Equity Distribution Agreement
On August 11, 2026, the Company entered into an Equity Distribution Agreement (the “2026 EDA”) with Maxim as sales agent, pursuant to which the Company may, from time to time, issue and sell shares of its common stock through Maxim in an at-the-market offering for an aggregate offering price of up to $7,195,548. Under the terms of the 2026 EDA, Maxim 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. The offering of shares of our common stock pursuant to the 2026 EDA will terminate upon the earliest of (i) August 11, 2027, (ii) the sale of all Shares provided for in the prospectus supplement related to this offering, and (iii) the termination of the EDA by written notice of the Company or Maxim.
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| Table of Contents |
CRITICAL ACCOUNTING ESTIMATES
The preparation of the unaudited consolidated financial statements in conformity with U.S. generally accepted accounting principles 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. The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. Management’s estimates are based on historical experience, the relevant information available at the end of each period, and their judgment. Although management believes the judgment applied in preparing estimates is reasonable based on circumstances and information known at the time, actual results could differ materially from these estimates under different assumptions or market conditions.
The most significant accounting estimates involve a high degree of judgment or complexity. Management believes the estimates and judgments most critical to the preparation of our condensed 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 condensed consolidated financial statements.
Revenue Recognition
Revenues are recognized when control of the promised goods or services is transferred our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
We do not offer returns, discounts, loyalty programs or other sales incentive programs that are material to revenue recognition. Payments from our customers are due upon delivery or within a short period after delivery.
Property, Equipment and Leasehold Improvements
Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Our fixed assets, which are comprised of leasehold improvements, equipment and vehicles, have useful lives of five years.
Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. We continually monitor 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, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. See Note 4, “Property, Equipment and Leasehold Improvements, Net” for further information.
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RESULTS OF OPERATIONS
COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2026 AND 2025
|
| Three Months Ended June 30 |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
REVENUE |
| $ | 3,550 |
|
| $ | 3,146 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
Cost of goods sold, excluding depreciation |
|
| 2,955 |
|
|
| 2,512 |
|
Selling, general and administrative expenses |
|
| 3,134 |
|
|
| 3,993 |
|
Depreciation and amortization |
|
| 654 |
|
|
| 234 |
|
Gain on sale of asset |
|
| (16 | ) |
|
| - |
|
Total operating expense |
|
| 6,727 |
|
|
| 6,739 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| (3,177 | ) |
|
| (3,593 | ) |
|
|
|
|
|
|
|
|
|
Other income (expenses) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
| (163 | ) |
|
| (389 | ) |
Loss on extinguishment of debt |
|
| - |
|
|
| (114 | ) |
Other income / (loss) |
|
| 81 |
|
|
| 53 |
|
Total other income (expenses) |
|
| (82 | ) |
|
| (450 | ) |
|
|
|
|
|
|
|
|
|
NET LOSS |
| $ | (3,259 | ) |
| $ | (4,043 | ) |
Revenue
Revenue was $3.6 million for the three months ended June 30, 2026, compared to $3.1 million for the three months ended June 30, 2025. The increase in revenue of $404 thousand, or 12.8%, is primarily attributable to continued growth in our cut herb portfolio across our retail client base, which grew $532 thousand, or 50.5%, and increased to approximately 42% of gross sales from approximately 30% in the prior-year period.
Operating Expenses
Operating expenses were $6.7 million for the three months ended June 30, 2026, compared to $6.7 million for the three months ended June 30, 2025. Operating expenses decreased $12 thousand, or 0.2%, primarily due to a $859 thousand (21.5%) decrease in selling, general and administrative expenses, reflecting non-recurring professional fees incurred in the prior-year period in connection with certain corporate transactions, partially offset by a $443 thousand (17.6%) increase in cost of goods sold, driven by increased sales and a portfolio shift to cut herbs, which is primarily sourced from third party growers at higher cost, and a $420 thousand (179.5%) increase in depreciation and amortization, reflecting a larger depreciable asset base related to assets acquired from Natural Shrimp in May 2025.
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Loss from operations
Loss from operations was $3.2 million for the three months ended June 30, 2026, compared to $3.6 million for the three months ended June 30, 2025. The decrease in the loss from operations was driven by an increase in revenue and a decrease in operating expenses, primarily lower selling, general and administrative expenses, partially offset by higher cost of goods sold and depreciation expense
Interest expense
Interest expense was $163 thousand for the three months ended June 30, 2026, compared to $389 thousand for the three months ended June 30, 2025. Interest expense decreased $226 thousand, or 58.1%, even as total debt outstanding increased, as higher-cost short-term debt was repaid and replaced with lower-cost Streeterville financing at rates of 5.0% to 8.0% per annum.
Net loss
Net loss was $3.3 million for the three months ended June 30, 2026, compared to a net loss of $4.0 million for the three months ended June 30, 2025. The reasons for the decrease in net loss are explained above.
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025
|
| Six Months Ended June 30 |
| |||||
|
| 2026 |
|
| 2025 |
| ||
|
|
|
|
|
|
| ||
REVENUE |
| $ | 6,891 |
|
| $ | 5,864 |
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
Cost of goods sold, excluding depreciation |
|
| 7,345 |
|
|
| 5,142 |
|
Selling, general and administrative expenses |
|
| 6,039 |
|
|
| 6,760 |
|
Depreciation and amortization |
|
| 3,378 |
|
|
| 482 |
|
Gain on sale of asset |
|
| (16 | ) |
|
| (1 | ) |
Total operating expense |
|
| 16,746 |
|
|
| 12,383 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| (9,855 | ) |
|
| (6,519 | ) |
|
|
|
|
|
|
|
|
|
Other income (expenses) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
| (313 | ) |
|
| (829 | ) |
Loss on extinguishment of debt |
|
| - |
|
|
| (114 | ) |
Loss on sale of tax benefit |
|
| (235 | ) |
|
| - |
|
Other income / (loss) |
|
| 121 |
|
|
| 95 |
|
Total other income (expenses) |
|
| (427 | ) |
|
| (848 | ) |
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
| (10,282 | ) |
|
| (7,367 | ) |
|
|
|
|
|
|
|
|
|
Income tax benefit |
|
| 3,354 |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
NET LOSS |
| $ | (6,928 | ) |
| $ | (7,367 | ) |
Revenue
Revenue was $6.9 million for the six months ended June 30, 2026, compared to $5.9 million for the six months ended June 30, 2025. The increase in revenue of $1.0 million, or 17.5%, is primarily attributable to continued growth in our cut herb portfolio across our retail client base, which grew $1.1 million, or 49.3%, and increased to approximately 45% of gross sales from approximately 35% in the prior-year period.
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Operating Expenses
Operating expenses were $16.7 million for the six months ended June 30, 2026, compared to $12.4 million for the six months ended June 30, 2025, an increase of $4.4 million, or 35.2%, primarily due to a $2.2 million (42.8%) increase in cost of goods sold, driven by increased sales and a portfolio shift to cut herbs, which is primarily sourced from third party growers at higher cost, and a $2.9 million (600.8%) increase in depreciation and amortization from accelerated depreciation of certain fixed assets related to the Company's pivot to RTD clean nutrition manufacturing. These increases were partially offset by a $721 thousand (10.7%) decrease in selling, general and administrative expenses, primarily due to a $667 thousand decrease in legal fees, a $473 thousand decrease in audit and accounting fees, and a $262 thousand decrease in bad debt expense, reflecting non-recurring professional fees incurred in the prior-year period in connection with certain corporate transactions, partially offset by higher salaries and wages and rent expense.
Loss from operations
Loss from operations was $9.9 million for the six months ended June 30, 2026, compared to $6.5 million for the six months ended June 30, 2025.The increase in the loss from operations was driven by higher overall expenses across cost of goods sold and depreciation expense, partially offset by an increase in revenue.
Interest expense
Interest expense was $313 thousand for the six months ended June 30, 2026, compared to $829 thousand for the six months ended June 30, 2025. Interest expense decreased $516 thousand, or 62.2%, even as total debt outstanding increased, as higher-cost short-term debt was repaid and replaced with lower-cost Streeterville financing at rates of 5.0% to 8.0% per annum.
Income tax benefit
Income tax benefit was $3.4 million for the six months ended June 30, 2026. We transferred state tax benefit to a third-party buyer in exchange for a cash consideration and recorded a gain driven primarily due to valuation allowance release.
Net loss
Net loss was $6.9 million for the six months ended June 30, 2026, compared to a net loss of $7.4 million for the six months ended June 30, 2025. The reasons for the decrease in net loss are explained above.
LIQUIDITY AND CAPITAL RESOURCES
Going Concern Considerations
We have incurred significant losses since our inception. We recognized net losses of approximately $6.9 million during the six months ended June 30, 2026 and $17.3 million during the year ended December 31, 2025. 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.
The risks and uncertainties surrounding our ability to continue our business with limited capital resources raises substantial doubt as to our ability to continue as a going concern for twelve months from the issuance of these financial statements. To date, we have financed our operations with the proceeds from debt financings, public and private securities offerings, and operations, among other sources. If we are unable to raise additional capital, we believe that our existing cash will fund operations into the third quarter of 2026 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. The net cash provided by operating activities was $0.9 million and the net cash used in operating activities was $6.8 million during the six months ended June 30, 2026 and 2025, respectively. Our financial statements have been prepared on a “going concern” basis. However, substantial doubt exists regarding our ability to continue as a going concern for the next twelve months. Our consolidated financial statements do not include any adjustments that might result if we are unable to continue as a going concern. If we are unable to continue as a going concern, holders of our securities might lose their entire investment. These factors, among others, may make it difficult to raise any additional capital and may cause us to be unable to continue to operate our business.
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There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable to us, if at all. The issuance of additional equity or equity-linked securities by us would result in significant dilution of the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business as planned and as a result may be required to scale back or cease operations, which could cause our stockholders to lose some or all of their investment in us. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern.
Liquidity
Our primary liquidity requirements are for working capital, continued investments in capital expenditures, repayment of indebtedness, and other strategic investments. Although income taxes are not currently a significant use of funds, after the benefits of our net operating loss carryforwards are fully recognized, they could become a material use of funds, depending on our future profitability and future tax rates. Our liquidity needs have been met primarily through public equity offerings, term loan borrowings, accounts receivable financing, convertible notes, and related party loans.
As of June 30, 2026 and December 31, 2025, we had $0.7 million and $1.1 million in cash and cash equivalents available, respectively. During the six months ended June 30, 2026, cash provided by operating activities was $0.9 million. As of June 30, 2026 and December 31, 2025, we had $14.2 million and $1.9 million of total gross debt outstanding, respectively. As of June 30, 2026, we had cash available for operations of $0.7 million, after excluding $10.0 million of restricted cash securing the Streeterville B Note. Subsequent to June 30, 2026, the Company also entered into the 2026 EDA, providing access to up to $7.2 million of additional capital through an at-the-market offering, which management believes provides an additional source of liquidity. See Note 14, “Subsequent Events,” for further discussion.
We may not be able to access the capital markets in the future on commercially acceptable terms or at all. Our ability to fund future operating expenses and capital expenditures and our ability to meet future debt service obligations or refinance our indebtedness will depend on our future operating performance, which will be affected by general economic, financial and other factors beyond our control, including those described under “Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on March 31, 2026.
Capital Resources
For the six months ended June 30, 2026, we incurred a net loss of $6.9 million. During the six months ended June 30, 2026, we had operating cash flows of $0.9 million, after excluding $10.0 million of restricted cash securing the Streeterville B Note.
In January 2026, we completed the sale of certain New Jersey state net operating loss carryforwards under the New Jersey Economic Development Authority's Technology Business Tax Certificate Transfer Program, which had resulted in a deferred tax asset of approximately $3.4 million, in exchange for gross proceeds of approximately $3.1 million, resulting in net cash proceeds of approximately $3.0 million after transaction-related costs of approximately $0.1 million.
On March 3, 2026, we entered into a Note Purchase Agreement with Streeterville Capital, LLC ("Streeterville"), pursuant to which we issued to Streeterville a secured promissory note in the principal amount of $1.6 million (the "Streeterville Note"), which included an original issue discount of $120 thousand and reimbursement of Streeterville's transaction expenses of $5 thousand, for a purchase price of $1.5 million. The Streeterville Note bears interest at a rate of 8.0% per annum and matures 13 months after its issuance date.
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On June 12, 2026, the Company entered into a Notes Purchase Agreement with Streeterville pursuant to which it issued (i) a Promissory Note A-1 with an original principal amount of $2.17 million and (ii) a Secured Promissory Note B with an original principal amount of $10.0 million. The notes mature eighteen months from issuance. The A-1 Note bears interest at 8% per annum, while the B Note bears interest at 5% per annum.
Subsequent to June 30, 2026, the Company entered into the 2026 EDA, providing access to up to $7.2 million of additional capital through an at-the-market offering under its effective shelf registration statement. See Note 14, “Subsequent Events,” for further discussion.
We expect to continue to incur losses and negative cash flows from operations for the foreseeable future. We may seek to raise additional capital through equity or debt financings, sales of assets, or other strategic alternatives. There can be no assurance that any additional financing will be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly reduce our operations or delay, scale back or discontinue the development of one or more of our products or operations.
For more information on our outstanding debt as of June 30, 2026 and December 31, 2025, see Note 7 “Notes Payable.”
Cash Flows
Operating activities
During the six months ended June 30, 2026, cash provided by operating activities was $0.9 million. During the six months ended June 30, 2025, cash used for operating activities was $6.8 million. For the six months ended June 30, 2026, the net loss of $7.0 million was offset by depreciation and amortization of $3.4 million, amortization of operating lease right-of-use assets of $608 thousand, amortization of debt discount of $178 thousand, and a net working capital source of $3.6 million.
Investing activities
During the six months ended June 30, 2026 and 2025, cash used in investing activities was $3.4 million and $122 thousand, respectively. The increase is related to the cash flow impact from higher capital expenditures related to the Natural Shrimp asset purchase.
Financing activities
During the six months ended June 30, 2026 and 2025, cash provided by financing activities was $12.0 million and $6.2 million, respectively. The increase is driven by $13.5 million of proceeds from debt; $1.5 million from the Streeterville Note (March 2026) and $12.0 million from the Streeterville Notes A-1 and B (June 2026). The increase was offset by $1.5 million of debt repayments and $22 thousand of lease payments.
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| Table of Contents |
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide the information required by this item.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management, including our Chief Executive Officer and Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026 pursuant to Rule 13a-15 under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Interim Chief Financial Officer have concluded that, as of June 30, 2026, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of June 30, 2026, at the reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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| Table of Contents |
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be party to or otherwise involved in legal proceedings arising in the ordinary course of business. Management does not believe that there is any pending or threatened proceeding against us, which, if determined adversely, would have a material adverse effect on our business, results of operations or financial condition.
ITEM 1A. RISK FACTORS
There can be no assurance that our shares will continue to be listed on Nasdaq, which would affect our common stock’s liquidity and reduce our ability to raise capital.
On July 22, 2026, the SEC approved a new continued listing requirement codified as Nasdaq Listing Rule 5550(a)(6) that requires companies to maintain a market value of listed securities of at least $5 million (the “MVLS Requirement”). On July 29, 2026, the SEC provided notice that the order approving the MVLS Requirement was stayed pending a petition for review of the action. As of June 30, 2026, we are not in compliance with the MVLS Requirement if it were to come into effect. Under Nasdaq Listing Rule 5810(c)(1), if the MVLS Requirement comes into effect and we fail to meet the MVLS Requirement for 30 consecutive business days, our securities will be suspended and immediately delisted from the Nasdaq Capital Market, even if we are appealing a delisting determination to a Panel, and the Panel will have limited discretion to reverse the delisting determination if it was issued in error or grant an exception for up to 180 days for us to demonstrate compliance with all requirements for initial listing on Nasdaq. Additionally, pursuant to the Panel’s decision relating to our delisting appeal, the Panel will maintain jurisdiction over our listing status until November 23, 2026, and if we become non-compliant with any other listing rule, aside from the Bid Price Rule, during this time period, we will be allowed seven calendar days to advise the Panel on our plan to cure the listing deficiency, and the Panel will, at that time, determine whether to grant us an exception to cure the deficiency or delist our securities from Nasdaq. This includes the MVLS Requirement.
We cannot assure you that we will be able to regain compliance with the MVLS Requirement and maintain compliance with Nasdaq’s other continued listing standards. Accordingly, our common stock and certain warrants could be delisted from Nasdaq. We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq. In particular:
| ● | we may be unable to raise equity capital on acceptable terms or at all; |
| ● | we may lose the confidence of our business partners, 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. |
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| Table of Contents |
ITEM 6. EXHIBITS
|
|
| Incorporated by Reference | |||||
Exhibit Number |
| Description |
| Form |
| File No. |
| Filing Date |
| Certificate of Amendment to the Certificate of Incorporation, filed July 8, 2026. |
| 8-K |
| 001-41371 |
| July 9, 2026 | |
8-K | 001-41371 | June 12, 2026 | ||||||
8-K | 001-41371 | June 12, 2026 | ||||||
|
| 8-K |
| 001-41371 |
| June 12, 2026 | ||
|
| 8-K |
| 001-41371 |
| June 12, 2026 | ||
|
| 8-K |
| 001-41371 |
| August 3, 2026 | ||
|
|
|
|
|
| Filed herewith | ||
|
|
|
|
|
| Filed herewith | ||
|
|
|
|
|
| Furnished herewith | ||
101 |
| Materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Extensible Business Reporting Language (XBRL); (i) Unaudited Consolidated Balance Sheet, (ii) Unaudited Consolidated Statements of Operations, (iii) Unaudited Consolidated Statements of Cash Flows, (iv) Unaudited Consolidated Statements of Stockholders’ Deficit, and (v) related Notes to Consolidated Financial Statements. |
|
|
|
|
| Filed herewith |
104 |
| Cover Page Interactive Data File (included in Exhibit 101). |
|
|
|
|
| Filed herewith |
± | Certain information has been omitted from this exhibit in reliance upon Item 601(a)(5) of Regulation S-K and will be furnished to the Securities and Exchange Commission upon request. | ||
# | Certain portions of this exhibit have been omitted (indicated by asterisks) pursuant to Item 601(b) of Regulation S-K because the omitted information is (i) not material and (ii) the type of information that the Company treats as private or confidential. | ||
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| Table of Contents |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EDIBLE GARDEN AG INCORPORATED |
| |
|
| |
By: | /s/ James E. Kras | |
James E. Kras |
| |
Chief Executive Officer and President (principal executive officer) |
| |
|
|
|
By: | /s/ Kostas Dafoulas | |
Kostas Dafoulas |
| |
Interim Chief Financial Officer (principal financial and accounting officer) |
| |
Date: August 14, 2026
| 39 |
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, James E. Kras, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Edible Garden AG Incorporated; |
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|
|
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
|
|
|
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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|
|
| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
|
|
|
|
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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|
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|
|
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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|
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| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2026 | |
| /s/ James E. Kras | |
| James E. Kras | |
| President and Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Kostas Dafoulas, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Edible Garden AG Incorporated; |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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| 4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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| 5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: August 14, 2026 | |
| /s/ Kostas Dafoulas | |
| Kostas Dafoulas | |
| Interim Chief Financial Officer |
EXHIBIT 32
Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
James E. Kras, President and Chief Executive Officer, and Kostas Dafoulas, Interim Chief Financial Officer of Edible Garden AG Incorporated (the “Company”), each certify in his capacity as an officer of the Company that he has reviewed the Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2026 (the “Report”) and that:
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| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: August 14, 2026 | /s/ James E. Kras |
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| James E. Kras |
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| President and Chief Executive Officer |
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| (Principal Executive Officer) |
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| Date: August 14, 2026 | /s/ Kostas Dafoulas |
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| Kostas Dafoulas |
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| Interim Chief Financial Officer |
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| (Principal Financial Officer) |
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The purpose of this statement is solely to comply with Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.