Edible Garden AG Inc
For the period ended Sep 30, 2024. Filed Nov 13, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 13, 2024
EDBL$0.70+0.5%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001477932-24-004821
Item 1A. Risk FactorsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001477932-24-007062
Item 1A. Risk FactorsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 9 previous paragraphs and 8 current paragraphs.
2 unchanged; 2 reworded; 4 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Because we are not in compliance with the Nasdaq continued listing requirements and are appealing the determination of the Nasdaq Staff to suspend the trading of our securities, we can provide 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.
Current report
On October 21, 2024, we received a letter from 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 meet the Bid Price Rule. Under Nasdaq Listing Rule 5810(c)(3)(A)(iv), because we effected reverse stock splits in the last two years with a cumulative ratio greater than 250 shares to 1, we are not eligible for any compliance period to regain compliance with the Bid Price Rule. On October 28, 2024, we submitted a request for a hearing before the Panel to appeal the delisting notice from the Staff.
Current report
Our indebtedness could have important consequences to you.
Current report
Our indebtedness could have important consequences to you. For example, it could:
Removed paragraphs (4)
Previous report
On April 11, 2024, we received a letter from the Listing Qualifications Department of Nasdaq indicating that we do not comply with the minimum stockholders’ equity requirement for continued listing on Nasdaq under the Stockholders’ Equity Rule because: (i) our stockholders’ equity was less than the required minimum of $2,500,000; and (ii) as of August 15, 2024, we do not meet the alternative compliance standards of market value of listed securities of $35 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years. As of June 30, 2024, our stockholders’ equity is $366 thousand and we have not regained compliance with the Stockholders’ Equity Rule.
Previous report
On June 17, 2024, we received a letter from the Listing Qualifications Department of the Nasdaq Stock Market LLC indicating that Nasdaq granted the Company until October 8, 2024 to regain compliance with requirements for continued listing on Nasdaq.
Previous report
On or before October 8, 2024, we must evidence compliance with the Stockholders’ Equity Rule, which requires us to have a minimum $2,500,000 in stockholders’ equity, $35,000,000 market value of listed securities, or $500,000 net income from continuing operations. If we fail to regain compliance with the Stockholders’ Equity Rule, or fail to evidence compliance with the Rule in our periodic report for the year ending December 31, 2024, we may be subject to delisting. In that event, we would have the right to a hearing before a Nasdaq hearings panel, which would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing.
Previous report
We may not be able to repay, refinance, or restructure our substantial indebtedness, which would have a material adverse effect on our financial condition and may cause us to discontinue our business.
Reworded paragraphs (2)
Previous wording
We cannot assure you that we will be able to regain compliance with Nasdaq listing standards. Our failure to continue to meet these requirements would result in our common stock being delisted from Nasdaq, and if our common stock is delisted, our warrants will also be delisted. We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq. In particular:
Current wording
There can be no assurance that the Panel will grant us additional time to regain compliance with Nasdaq’s listing standards or that we could ultimately meet all applicable criteria for continued listing on Nasdaq. The Panel may determine to delist our securities from Nasdaq. If our common stock is delisted, our warrants will also be delisted. We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq. In particular:
Previous wording
We cannot provide any assurances that we will be able to generate cash from operating activities or raise the necessary amount of capital to repay these obligations or that we will be able to extend the maturity dates or otherwise refinance these obligations. If we are unable to generate sufficient income or raise additional capital, we may default on our obligations under these loans and arrangements. We recognized net losses of $6.1 million and $10.2 million during the six months ended June 30, 2024 and the year ended December 31, 2023, respectively. As of June 30, 2024, we have an accumulated deficit of $36.3 million. Our operating activities used $5.6 million and $8.5 million of cash during the six months ended June 30, 2024 and the year ended December 31, 2023, respectively. If we are unable to raise additional capital or improve our ability to generate cash from operating activities, we would not have sufficient cash on hand or available liquidity that can be utilized to repay our short-term debt obligations when they become due. If we were to default on our obligations under these loans and arrangements, the secured counterparties would have the right to our assets. In the event that the counterparties enforced their rights to our assets, we may have to discontinue our business, and our stockholders could lose all or a part of their investment in us.
Current wording
The promissory note issued in connection with our purchase of our Edible Garden Heartland property (“Edible Garden Heartland”) is secured by a mortgage on Edible Garden Heartland and a security interest in the assets at Edible Garden Heartland. In addition, the balance under the Cedar Agreement is collateralized by our cash and receivable accounts. If we were to default on our obligations under these loans and arrangements, the counterparties would have the right to our assets. We could be required to dispose of material assets or operations to meet our debt service and other obligations, and the value realized on such assets or operations will depend on market conditions and the availability of buyers. Accordingly, any such sale may not, among other things, be for a sufficient dollar amount. If we were to otherwise attempt to sell material assets or operations, the foregoing encumbrances may limit our ability to dispose of material assets or operations. If we are unable to raise additional capital or improve our ability to generate cash from operating activities, we may not have sufficient cash on hand or available liquidity that can be utilized to meet our debt service and other obligations when they become due. If we were to default on our obligations under these loans and arrangements, the secured counterparties would have the right to our assets. In the event that the counterparties enforced their rights to our assets, we may have to discontinue our business, and our stockholders could lose all or a part of their investment in us.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The promissory note initially issued to Sament Capital Investments, Inc. and later assigned to third parties (the “Sament Note”) is secured by a security interest in all of our assets located at our Belvidere, New Jersey facility, and the promissory note (the “Michigan Note”) issued in connection with our purchase of the assets of 2900 Madison Ave. SE, Grand Rapids, Michigan (the “Property”) is secured by a mortgage on the Property and a security interest in the assets at the Property. In addition, the balance under the Restated Agreement is collateralized by our cash and receivable accounts. As of June 30, 2024, we had short-term debt, net of discounts of $4.9 million. Short-term debt, net of discounts, as of June 30, 2024, includes the outstanding principal balance under the Sament Note of $3.1 million, $308 thousand of the outstanding balance of the Michigan Note and $1.5 million of the outstanding balance of the Restated Agreement. We could be required to dispose of material assets or operations to meet our debt service and other obligations, and the value realized on such assets or operations will depend on market conditions and the availability of buyers. Accordingly, any such sale may not, among other things, be for a sufficient dollar amount and may limit our ability to adequately operate our business. If we were to attempt to sell material assets or operations, the foregoing encumbrances may limit our ability to dispose of material assets or operations.