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Edible Garden AG rporated(EDBL) - 2024 Q4 - Annual Report
EDBLEdible Garden AG rporated(EDBL)2025-04-01 00:57
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Financial Performance - The company has a history of operating losses since inception and expects to incur additional near-term losses, raising substantial doubt about its ability to continue as a going concern[32]. - Total revenue for the year ended December 31, 2024, was 13,857,000,adecreaseof1.413,857,000, a decrease of 1.4% compared to 14,049,000 in 2023[245]. - Gross profit increased to 2,312,000in2024,comparedto2,312,000 in 2024, compared to 822,000 in 2023, reflecting a significant improvement in profitability[245]. - The net loss attributable to common stockholders for 2024 was 14,924,000,comparedtoanetlossof14,924,000, compared to a net loss of 10,188,000 in 2023, indicating a worsening financial position[245]. - Net income for 2024 was a loss of 11,051,000comparedtoalossof11,051,000 compared to a loss of 10,188,000 in 2023, indicating a 8.5% increase in losses year-over-year[253]. - Cash provided by operating activities was (8,516,000)in2024,slightlyimprovedfrom(8,516,000) in 2024, slightly improved from (8,531,000) in 2023[253]. - The company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain operations, raising concerns about its ability to continue as a going concern[233]. - Selling, general and administrative expenses rose to 11,587,000in2024,comparedto11,587,000 in 2024, compared to 10,009,000 in 2023, reflecting increased operational costs[245]. - The company incurred an interest expense of 1,219,000in2024,upfrom1,219,000 in 2024, up from 390,000 in 2023, indicating higher borrowing costs[245]. - The company has net operating loss carryforwards of approximately 41.86millionforfederalincometaxpurposesand41.86 million for federal income tax purposes and 38.65 million for New Jersey income tax purposes as of December 31, 2024[354]. Assets and Liabilities - Total current assets rose to 7,377,000asofDecember31,2024,upfrom7,377,000 as of December 31, 2024, up from 2,647,000 in 2023, showing improved liquidity[241]. - Total liabilities increased to 7,821,000in2024,comparedto7,821,000 in 2024, compared to 6,944,000 in 2023, indicating a rise in financial obligations[242]. - The company had cash reserves of 3,530,000asofDecember31,2024,asignificantincreasefrom3,530,000 as of December 31, 2024, a significant increase from 510,000 in 2023[241]. - Total inventory as of December 31, 2024, was 1,544,000,upfrom1,544,000, up from 678,000 in 2023, indicating a significant increase in stock levels[295]. - Accounts payable and accrued expenses rose to 4,018,000in2024from4,018,000 in 2024 from 2,483,000 in 2023, showing increased liabilities[299]. - The total stockholders' equity improved to 4,094,000in2024,comparedtoadeficitof4,094,000 in 2024, compared to a deficit of 288,000 in 2023, reflecting a positive shift in equity position[242]. Customer Concentration and Revenue Sources - Approximately 82.0% of the company's revenue for the year ended December 31, 2024, was earned from four customers, indicating a high customer concentration risk[48]. - Four customers accounted for approximately 82.0% of total revenue in 2024, with one customer alone contributing 44.0%[273]. Investments and Acquisitions - The company acquired a five-acre greenhouse facility in Grand Rapids, Michigan for 2,886,000,whichisexpectedtoenhancegrossmarginsbyreducingcostsassociatedwithcontractgrowers[35].−Thecompanyanticipatesinvestinganadditional2,886,000, which is expected to enhance gross margins by reducing costs associated with contract growers[35]. - The company anticipates investing an additional 1.1 million in capital expenditures to complete the packhouse, with 410thousandalreadyspent[59].−Thecompanyacquiredfixedassetswithdebttotaling410 thousand already spent[59]. - The company acquired fixed assets with debt totaling 1,390,000 in 2024[266]. - The Company acquired Edible Garden Corp. on October 1, 2024, for a nominal price of 1.00,assumingaleasewithatermendingonDecember31,2029[346].SustainabilityInitiatives−Totalestimatedemissionsavoidedin2024areprojectedtobe145,803metrictonsofCO2,demonstratingthecompany′scommitmenttosustainability[81].−Thecompanyhasavoided11,803metrictonsofnon−recyclablevirginplasticbyusingrecyclablepotsforcrops[82].−EdibleGardenoperateswithafocusonsustainability,utilizingclosed−loopsystemstorecyclewaterandintegratedpestmanagementtoreducepesticideuse[80].ProductDevelopmentandMarketStrategy−Thecompanycurrentlyoffersover106stockkeepingunits(SKUs)andaimstocross−sellproductsacrosssupermarketpartnerstomeetdemand[39].−Thecompanyhasexpandeditsproductlinetoincludenutraceuticalsandplant−basedproteins,withproductssoldundertheVitaminWaybrand[42].−Thecompanyplanstoexpanditsproductportfoliowithshelf−stableproductstoincreaserevenueopportunitiesandmarketpenetration[75].−Thecompanyaimstoreducetransportationcostsandenhancelocalbrandawarenessthroughgreenhouseexpansionandacquisitions[34].FinancingandDebtManagement−Thecompanyplanstoseekadditionalfundingthroughdebtorequityfinancingtoimproveliquidity[263].−Thecompanyenteredintoapromissorynotefor1.00, assuming a lease with a term ending on December 31, 2029[346]. Sustainability Initiatives - Total estimated emissions avoided in 2024 are projected to be 145,803 metric tons of CO2, demonstrating the company's commitment to sustainability[81]. - The company has avoided 11,803 metric tons of non-recyclable virgin plastic by using recyclable pots for crops[82]. - Edible Garden operates with a focus on sustainability, utilizing closed-loop systems to recycle water and integrated pest management to reduce pesticide use[80]. Product Development and Market Strategy - The company currently offers over 106 stock keeping units (SKUs) and aims to cross-sell products across supermarket partners to meet demand[39]. - The company has expanded its product line to include nutraceuticals and plant-based proteins, with products sold under the Vitamin Way brand[42]. - The company plans to expand its product portfolio with shelf-stable products to increase revenue opportunities and market penetration[75]. - The company aims to reduce transportation costs and enhance local brand awareness through greenhouse expansion and acquisitions[34]. Financing and Debt Management - The company plans to seek additional funding through debt or equity financing to improve liquidity[263]. - The company entered into a promissory note for 3,000,000 with Sament Capital Investments, Inc., accruing interest at 3.5% per annum, maturing on March 30, 2025[302]. - The company received gross proceeds of 5,552,484fromtheSeptemberOffering,withnetproceedsof5,552,484 from the September Offering, with net proceeds of 4,795,158 after fees[322]. - The Company completed a public offering on May 23, 2024, raising gross proceeds of 5,998,120fromthesaleof2,437,000commonunitsand8,720pre−fundedunits[328].−TheCompanyenteredintoanEquityDistributionAgreementonJanuary31,2025,allowingittoissueandsellsharesforanaggregateofferingpriceofupto5,998,120 from the sale of 2,437,000 common units and 8,720 pre-funded units[328]. - The Company entered into an Equity Distribution Agreement on January 31, 2025, allowing it to issue and sell shares for an aggregate offering price of up to 2.52 million[361]. Operational Efficiency - The company is developing a proprietary propagation system at its Edible Garden Heartland facility to improve growing efficiency[35]. - Edible Garden Heartland facility reached 60% growing capacity in 2024, reducing reliance on third-party growers and contributing to higher gross margins[62]. - The company utilizes GreenThumb software to analyze sales data and develop forecasts for contract growers, ensuring alignment with customer demand[54]. Compliance and Regulatory Matters - The company is evaluating the impact of new accounting standards to be adopted in future periods, which may affect financial disclosures starting in 2025[267]. - The company received an extension from Nasdaq until March 31, 2025, to regain compliance with the minimum bid price requirement[364].