Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $3.1 million, down from $4.3 million in the same period last year, primarily due to the strategic exit from the floral and lettuce categories, which accounted for approximately $740,000 of the difference [15] - Gross profit decreased to $634,000 from $1.6 million year-over-year, driven by changes in product mix and lower sales volume following category exits [15] - Net loss for the quarter was $4 million, compared to $1.9 million in the same period last year, largely reflecting higher selling, general, and administrative expenses [16] Business Line Data and Key Metrics Changes - Private label products sold through major retailers grew 19.1% year-over-year, driven by expanded retail programs and strong sell-through of sustainably grown herb products [9] - The core produce category saw hydroponic basil grow 7.1% quarter-over-quarter, with potted herbs up 6.4% and wheatgrass up 4.1% [9] - E-commerce sales increased, demonstrating the scalability of the product portfolio online and the growing strength of digital sales [10] Market Data and Key Metrics Changes - International revenue grew 66.5% due to new distribution partnerships and expanded retail placements in key global markets [11] - The functional food and beverage market is projected to expand from $400 billion to $610 billion by 2030, with U.S. sales of natural, organic, and functional products expected to reach $386 billion by 2028, growing at roughly 5% annually [12] Company Strategy and Development Direction - The company is focusing on higher-margin innovation-driven categories and has exited low-margin categories to build a more resilient and adaptable portfolio [8] - The acquisition of Natural Shrimp Aquaculture enhances R&D capabilities in aquaponics and supports year-round climate-controlled production [13] - The company aims to capitalize on emerging opportunities in the better-for-you consumer packaged goods market, aligning with long-term consumer trends towards health and sustainability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy, noting that the second quarter results indicate that the strategic decisions made are delivering real impact [6] - The company anticipates a strong Q4, driven by holiday programs and new accounts, with significant preorders already in place [41] - Management highlighted the importance of the Kick Sports Nutrition line and its potential for growth, particularly through e-commerce channels [48] Other Important Information - Selling, general, and administrative expenses increased to $4.2 million from $2.7 million year-over-year, mainly due to expenses related to the natural shrimp acquisition and legal costs [16] - The company closed the quarter with $2.8 million in cash and is focused on driving inventory efficiency [17] Q&A Session Summary Question: Is private label a growing part of the business? - Management confirmed that private label is a growing segment, with significant growth seen in partnerships with retailers like Meijer, contributing to overall revenue growth [20][24] Question: What accounted for the revenue shortfall this quarter? - The majority of the revenue shortfall was attributed to the exit from floral and lettuce categories, with some softness also noted in the condiments business and legacy vitamin products [26][27] Question: What does the Natural Shrimp acquisition bring to the portfolio? - The acquisition expands R&D capabilities, improves sustainability, and enhances distribution efficiency, positioning the company for future growth [32][34] Question: What are the expectations for Q4? - Management is optimistic about Q4, citing strong preorders and a stable operational position compared to the previous year [41][42] Question: What is the status of the Kick Sports Nutrition line? - The line is accelerating in growth, with strong support from Amazon and positive early results from marketing efforts [48][49] Question: How does the international business fit into long-term growth plans? - The international business is expected to grow significantly, particularly through shelf-stable products that can be distributed globally [54][56]

Core Viewpoint - Edible Garden AG Incorporated is focusing on optimizing its product portfolio by exiting low-margin product lines and investing in higher-margin, innovative consumer packaged goods, particularly in the controlled environment agriculture (CEA) sector, to meet growing consumer demand for quality and sustainability [2][4]. Financial Performance - For the three months ended June 30, 2025, the company reported revenue of $3.1 million, a decrease from $4.3 million in the same period in 2024, primarily due to the exit from low-margin floral and lettuce categories [7]. - Gross profit for the quarter was $634,000, down from $1.56 million in Q2 2024, reflecting changes in product mix and increased costs [8]. - Selling, general and administrative expenses rose to $4.2 million from $2.7 million year-over-year, driven by legal costs related to acquisitions [9]. - The net loss for the quarter was $4.0 million, compared to a net loss of $1.9 million in Q2 2024, attributed to higher expenses and reduced revenue from exited categories [10]. Strategic Initiatives - The company has exited underperforming product lines and is investing in CEA-informed, better-for-you shelf-stable products, which are expected to enhance profitability and market leadership [4][5]. - Private label products sold through major retailers increased by 19.1% year-over-year, with notable growth in hydroponic basil (up 7.1%), potted herbs (up 6.4%), and wheatgrass (up 4.1%) [5]. - International revenue from vitamins and supplements surged by 66.5% due to new distribution partnerships [5]. Market Trends - The global functional food and beverage market is projected to grow from $400 billion to $610 billion by 2030, with U.S. sales of natural, organic, and functional products expected to reach $386 billion by 2028, growing at approximately 5% annually [4]. Operational Developments - The acquisition of the NaturalShrimp aquaculture facility in Iowa is expected to enhance research and development in aquaponics and improve distribution efficiency [4]. - The company is advancing its strategic priorities in innovation and operational sustainability, with a focus on expanding its digital marketing reach and e-commerce sales [4].

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $2,700,000, a decrease of 13.2% compared to $3,100,000 in Q1 2024, primarily due to the strategic exit from lower margin floral and lettuce categories [13][15] - Gross profit increased to $88,000 from $23,000 year over year, representing a 283% increase, while gross margin improved to 3.2% from 0.7% [10][14] - Net loss for Q1 2025 was $3,300,000, an improvement from a net loss of $4,000,000 in Q1 2024, driven by cost reductions and increased contributions from higher margin non-perishable product sales [15] Business Line Data and Key Metrics Changes - Non-perishable revenue grew 15% year over year, indicating strong performance from shelf-stable brands like Kick Sports Nutrition, Pickle Party, Squeezables, Pulp, and Vitamin Whey [7][13] - Cutter sales rose 13% on a seasonal basis, reflecting sustained consumer demand for freshness and convenience [7] Market Data and Key Metrics Changes - The company expanded relationships with major retailers including Walmart, Stop and Shop, and ShopRite, which are driving growth across both fresh and non-perishable categories [6][7] - The acquisition of Natural Shrimp Farms is expected to enhance operational capabilities and support the company's vertical integration strategy [11][41] Company Strategy and Development Direction - The company is realigning towards higher margin, shelf-stable products, which is gaining traction and contributing to margin expansion [6][8] - The acquisition of Natural Shrimp Farms is aimed at enhancing R&D capabilities and supporting sustainability initiatives [11][41] - The company is focused on expanding its national retail presence and leveraging patented in-store merchandising solutions [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategic transformation and the potential for long-term value creation for customers and shareholders [12][41] - The company is optimistic about the growth of its non-perishable product lines and the positive impact of recent acquisitions on its operational foundation [41][42] Other Important Information - The company has been recognized in the FoodTech 500 as a top 50 company, highlighting its leadership in controlled environment agriculture [12] - Sustainability initiatives have helped avoid significant amounts of virgin plastic and conserve resources, reinforcing the company's commitment to environmental responsibility [12] Q&A Session Summary Question: Can you talk about the initial plans for Natural Shrimp and potential synergies? - Management highlighted immediate initiatives including leveraging the facility for warehousing and R&D, which will support expansion into new markets and enhance product offerings [18][19][21] Question: What were the revenues for Natural Shrimp in 2024, and will it be margin accretive? - Management indicated that current revenues are nominal, but future growth and margin improvements are expected as the business is expanded and integrated [24][25] Question: How did the sports nutrition line perform this quarter? - Management expressed enthusiasm about the sports nutrition line, noting new distribution agreements and upcoming product launches that are expected to drive growth [26][30] Question: What are the drivers behind the sustained improvement in gross margin? - Management attributed the improvement to strategic investments in people, products, and marketing, as well as a focus on SKU rationalization and diversification of the product portfolio [35][37]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $2,700,000, a decrease of 13.2% compared to $3,100,000 in Q1 2024, primarily due to the strategic exit from lower margin floral and lettuce products [13][14] - Gross profit increased to $88,000 from $23,000 year over year, representing a 283% increase, while gross margin improved to 3.2% from 0.7% [10][15] - Net loss for Q1 2025 was $3,300,000, an improvement from a net loss of $4,000,000 in Q1 2024, driven by cost reductions and increased contributions from higher margin non-perishable product sales [16] Business Line Data and Key Metrics Changes - Non-perishable revenue grew 15% year over year, indicating strong performance from shelf-stable brands like Kick Sports Nutrition, Pickle Party, Squeezables, Pulp, and Vitamin Whey [7][14] - Cutter sales rose 13% on a seasonal basis, reflecting sustained consumer demand for freshness and convenience [7] Market Data and Key Metrics Changes - The company expanded relationships with major retailers including Walmart, Stop and Shop, and ShopRite, which are driving growth across both fresh and non-perishable categories [6][7] - The acquisition of Natural Shrimp Farms is expected to enhance operational capabilities and support market penetration in the Midwest [11][21] Company Strategy and Development Direction - The company is focusing on a strategic transformation towards higher margin, shelf-stable products, which is gaining traction and visibility across the business [6][8] - The acquisition of Natural Shrimp Farms is aimed at strengthening the balance sheet, enhancing vertical integration, and supporting sustainability initiatives [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's path forward, highlighting the strong foundation built through expanded retail relationships and growing e-commerce reach [46][47] - The commitment to sustainability remains central to the company's identity, with initiatives that have already shown measurable impact [12] Other Important Information - The company has been recognized in the FoodTech 500 as a top 50 company, reflecting its leadership in controlled environment agriculture [12] - The company is investing in marketing and branding to support the growth of its product lines [40] Q&A Session Summary Question: Can you talk about the initial plans for Natural Shrimp and potential synergies? - Management highlighted immediate initiatives including leveraging the facility for warehousing and R&D, which will support expansion into new markets and enhance logistics [20][21] Question: What were the revenues for Natural Shrimp in 2024, and will it be margin accretive? - Management indicated that current sales are nominal and not margin accretive, but future expansion and leveraging of the facility will lead to margin improvements [26][27] Question: How did the sports nutrition line perform this quarter? - Management expressed excitement about the sports nutrition line, noting new distribution in a major Midwest retailer and upcoming product launches [28][29]