Edible Garden AG Inc
For the period ended Sep 30, 2025. Filed Nov 14, 2025.
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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, 2025 · Filed Nov 14, 2025
EDBL$0.70+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001477932-25-005936
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-14.
0001477932-25-008250
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe 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 98 previous paragraphs and 85 current paragraphs.
56 unchanged; 20 reworded; 9 added; 20 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 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 (9)
Current report
Avondale Secured Promissory Note
Current report
On August 29, 2025, we entered into a secured promissory note with Avondale Capital LLC (“Avondale”) pursuant to which we received $1,750,000 less an original issue discount of $350,000 and less $5,000 of fees and expenses, for net funds provided of $1,395,000. Pursuant to the Agreement, we are required to pay Avondale $43,750 weekly until the $1,750,000 secured promissory note with Avondale is paid in full. A portion of the net proceeds of the Avondale secured promissory note were used to satisfy the remaining amount to which Arin Funding LLC (“Arin”) was entitled under the standard merchant cash advance agreement we entered into with Arin on April 2, 2025 (the “Arin II Agreement”), which resulted in us recognizing a loss on extinguishment of $99,000.
Current report
Revenue was $2.8 million for the three months ended September 30, 2025, compared to $2.6 million for the three months ended September 30, 2024. The increase in revenue of $0.2 million, or 9%, was primarily attributed to strong performance across the company’s shelf-stable product lines including Kick.Sports Nutrition, Vitamin Whey, Pulp and Pickle Party. We believe the drag on revenue from our strategic exit from the floral and lettuce categories, is now behind us, and this quarter represents the strength of our repositioned portfolio.
Current report
Cost of goods sold were $2.5 million for the three months ended September 30, 2025, compared to $1.9 million for the three months ended September 30, 2024. Cost of goods sold increased $0.7 million, or 37%. As a percentage of revenue, gross profit decreased to 10% from 27% for the three months ended September 30, 2025. The increase in cost of goods sold was primarily driven by increased greenhouse labor and freight costs of $433 thousand and increased purchases of raw materials related to our nutraceutical products, inclusive of late Q2 invoices received from a supplier in the amount of $135 thousand. We are pursuing price adjustments to mitigate the impact of these inflationary pressures on cost of goods sold.
Current report
Interest expense was $0.4 million for the three months ended September 30, 2025, compared to $0.4 million for the three months ended September 30, 2024. Interest expense was approximately unchanged as a result of similar borrowing amounts and amortization of debt issuance costs.
Current report
COMPARISON OF THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024
Current report
Interest expense was $1.2 million for the nine months ended September 30, 2025, compared to $0.9 million for the nine months ended September 30, 2024. The increase was driven primarily by higher amortization of debt discount.
Current report
On October 16, 2025, we entered into the October Inducement Letter Agreement with an institutional investor and holder of existing warrants to purchase up to 2,021,571 shares of our common stock for total proceeds of $4.2 million before deducting Maxim Group LLC’s (“Maxim”) fees and other offering expenses payable by the Company. See Note 15 “Subsequent Events.”
Current report
On August 29, 2025, the Company entered into a secured promissory note with Avondale pursuant to which the Company received $1,750,000 less an original issue discount of $350,000 and less $5,000 of fees and expenses, for net funds provided of $1,395,000. Pursuant to the secured promissory note, the Company is required to pay Avondale $43,750 weekly until the $1,750,000 secured promissory note with Avondale is paid in full. A portion of the net proceeds of the Avondale secured promissory note were used to satisfy the remaining amount to which Arin was entitled under the Arin II Agreement.
Removed paragraphs (20)
Previous report
Nasdaq Compliance
Previous report
On October 21, 2024, we received a letter from Listing Qualifications Staff (the “Staff”) of Nasdaq indicating that, based on the closing bid price of our common stock for 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 $1.00 per share, (the “Bid Price Rule”). On January 14, 2025, we attended our hearing with Nasdaq and on February 12, 2025, we received written notification (the “Notice”) from Nasdaq that a Nasdaq Hearings Panel granted an extension for us to regain compliance with the Bid Price Rule until March 31, 2025, subject to additional conditions outlined in the Notice. On April 8, 2025, we received a letter from Nasdaq confirming that we had regained compliance with the Bid Price Rule but will remain under a Nasdaq discretionary panel monitor until April 8, 2026.
Previous report
Arin Cash Advancement
Previous report
NaturalShrimp Acquisition and Streeterville Investment
Previous report
On May 14, 2025, Edible Garden Sustainable Ventures LLC (the “Subsidiary”), a wholly owned subsidiary of the Company, entered into an asset purchase agreement (the “APA”) with the Company, NaturalShrimp Farms Inc. (the “Seller”) and Streeterville Capital, LLC (“Streeterville”) and completed the purchase of certain sustainable aquaculture assets located in Fort Dodge, Iowa (the “Assets”) from the Seller.
Previous report
In connection with the APA, on May 13, 2025, our Board of Directors (the “Board”) approved a certificate of designation fixing the voting powers, designations, preferences and rights and the qualifications, limitations or restrictions of the Series B Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), a newly created series of preferred stock, which was accepted for filing by the Secretary of State of the State of Delaware on May 14, 2025. Of the 10,000,000 previously undesignated shares of preferred stock, par value $0.0001 per share, 50,000 shares were designated as Series B Preferred Stock as of May 14, 2025.
Previous report
As consideration for the purchase of the Assets pursuant to the APA, we issued 12,000 shares of Series B Preferred Stock to Streeterville as the sole shareholder of the Seller, at a stated value of $1,000 per share, for an aggregate purchase price of $12,000,000.
Previous report
Also on May 14, 2025, we entered into a stock purchase agreement (the “SPA”) with Streeterville, pursuant to which we issued 3,000 shares of Series B Preferred Stock, at a stated value of $1,000 per share, to Streeterville, for the purchase price of $3,000,000. Additionally, pursuant to the SPA, Streeterville shall purchase an additional 500 shares of Series B Preferred Stock, at a stated value of $1,000 per share, on November 13, 2025 for a purchase price of $500,000, provided we remain listed on Nasdaq. The shares of Series B Preferred Stock were issued and sold to Streeterville without registration under the Securities Act, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering. Pursuant to the certificate of designation, subsequent to June 30, 2025, we issued 154 shares of Series B Preferred Stock to Streeterville as payment of the preferred return for the quarter ended June 30, 2025, in reliance on the exemption provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering.
Previous report
Contemporaneous with the APA, the Subsidiary entered into a lease agreement with Iowa Shrimp Holdings, LLC, an affiliate of the Seller (the “Landlord”), for access to and use of certain real property located at 401 Des Moines Street, Webster City, Iowa 50595; where substantially all of the Assets are located (the “Lease”). The Lease includes customary covenants, terms and conditions and has an initial term of 12 months. The Lease may be extended for additional 12-month terms at our discretion, provided that we are in compliance with the Lease in all material respects and redeem or exchanges for common stock a certain amount of the outstanding Series B Preferred Stock held by Streeterville during the 12 months prior to the end of the term. Under the terms of the Lease, we will pay the Landlord a monthly lease payment of $1.00. If we are considered a holdover tenant after the expiration of the initial term or any renewal term with the prior written consent of Landlord, the tenancy will be construed as month to month, except that rent shall be increased to an amount equal to (i) $15,000 per calendar month if the holdover tenancy occurs between the first anniversary and second anniversary of May 14, 2025, (ii) $22,500 per calendar month if the holdover tenancy occurs between the second anniversary and third anniversary of May 14, 2025, or (iii) $30,000 per calendar month if the holdover tenancy occurs after the third anniversary of May 14, 2025, plus, and in addition to the rent, all other sums of money due and payable by us to the Landlord under the Lease. If we (i) fail to pay any installment of rent or additional rent or other sum due within 10 days after written notice from the Landlord; (ii) fail to perform any term, condition or covenant under the Lease within 30 days after written notice that such performance is due; (iii) become bankrupt or insolvent or files a petition in bankruptcy or insolvency, reorganization or for the appointment of a receiver or trustee; or (iv) abandon the premises, the Landlord may terminate the Lease by written notice and reenter and take possession of the premises.
Previous report
In connection with the integration of the Seller’s assets into our business and operations following the closing of the transactions contemplated by the APA, the Subsidiary entered into a transition services agreement with the Seller on May 14, 2025 (the “TSA”), pursuant to which the Seller will provide ongoing operational support and accounting and bookkeeping services for a period of two months. Pursuant to the TSA, we paid the Seller a fee of $35,000 per calendar month. The TSA was not renewed after the initial two-month term.
Previous report
Common Stock Issuance
Previous report
On May 13, 2025, the Board approved the issuance of 94,118 shares of our common stock to Maxim Group LLC (“Maxim”) in connection with the amended letter agreement between us and Maxim, pursuant to which Maxim provides advisory services to the Company. The shares of common stock were issued to Maxim without registration under the Securities Act, in reliance on the exemption provided by Section 4(a)(2) of the Securities Act as a transaction not involving a public offering.
Previous report
Amended and Restated Executive Employment Agreement
Previous report
On May 13, 2025, we entered into an amended and restated executive employment agreement with James E. Kras, dated as of May 13, 2025 (the “Employment Agreement”). The Employment Agreement replaces and supersedes the executive employment agreement entered into between us and James E. Kras, dated as of August 18, 2021 and amended on January 18, 2022. Pursuant to the Employment Agreement, Mr. Kras will continue to serve as our Chief Executive Officer.
Previous report
The Employment Agreement has a term of two years and automatically extends for additional one-year periods unless either party provides notice of non-renewal at least 90 days prior to the end of any term. Pursuant to the Employment Agreement, Mr. Kras will (i) receive a base salary of $450,000; (ii) be eligible to receive an annual cash bonus with the target amount equal to 100% of his base salary based upon the determination of the compensation committee’s assessment of his performance and achieving our goals; (iii) receive a transaction bonus of $500,000 upon the completion transactions contemplated by the APA and the SPA, half payable upon closing of the APA and SPA and the other half payable in equal installments for the remainder of 2025; (iv) receive upfront awards of restricted stock units and nonqualified stock options, each with a grant date value of $1,000,000, pursuant to our 2022 Equity Incentive Plan (the “Plan”) upon receipt of stockholder approval for an amendment to the Plan to increase the number of shares available for issuance, and awards under the Plan with an aggregate grant date value of at least $1,000,000 beginning in the 2026 calendar year; and (v) be eligible to participate in our benefit plans. The Employment Agreement contains standard restrictive covenants, including non-competition and non-solicitation, and terms and conditions customarily found in similar agreements.
Previous report
Pursuant to the Employment Agreement, if Mr. Kras is terminated without cause, he will receive (i) severance payments equal to 200% of his then-current base salary and 200% of the target performance bonus for the calendar year in which the termination occurs and (ii) an aggregate cash payment in an amount equal to Mr. Kras’s annual health insurance premium at the time of his termination multiplied by twelve. Further, if Mr. Kras is terminated without cause within six month prior to or twenty-four months following a Change of Control (as defined in the Employment Agreement), he will receive (i) severance payments equal to 300% of his then-current base salary and 300% of the target performance bonus for the calendar year in which the termination occurs; (ii) immediate vesting of his outstanding and unvested restricted stock, restricted stock units and stock options; and (iii) an aggregate cash payment in an amount equal to Mr. Kras’s annual health insurance premium at the time of his termination multiplied by thirty-six.
Previous report
Revenue was $3.1 million for the three months ended June 30, 2025, compared to $4.3 million for the three months ended June 30, 2024. The decrease in revenue of $1.2 million, or 26%, is primarily attributed to our strategic exit from the floral and lettuce categories, which contributed $741 thousand of the decline year over year. Excluding these exited categories, revenue decreased $20 thousand, or 1%. Revenue from our core herb portfolio, which excludes the legacy lettuce and floral lines, decreased $208 thousand to $2.9 million year-over-year, or 7%, while revenue from our vitamin and supplement portfolio decreased from $433 thousand to $260 thousand year-over-year as we introduced our Kick. Sports Nutrition line to the market, replacing our legacy Vitamin Way and Vitamin Whey product lines.
Previous report
Interest expense was $389 thousand for the three months ended June 30, 2025, compared to $419 thousand for the three months ended June 30, 2024. The decrease in interest expense was driven by a reduction in our outstanding debt.
Previous report
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2025 AND 2024
Previous report
Interest expense was $829 thousand for the six months ended June 30, 2025, compared to $536 thousand for the six months ended June 30, 2024. Higher interest expense was related to the company entering into the Arin II Agreement.
Reworded paragraphs (20)
Previous wording
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,” “plan,” “potential,” “projections,” “seek,” “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.
Current wording
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 “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “might,” “plan,” “potential,” “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.
Previous wording
On May 21, 2025, we entered into an inducement letter agreement (the “Inducement Letter Agreement”) with an institutional investor and holder of existing warrants to purchase up to 999,600 shares of our common stock. The existing warrants were originally issued in September and December 2024, with an exercise price of $9.00 per share, and became exercisable immediately following issuance. Pursuant to the Inducement Letter Agreement, the holder agreed to exercise the existing warrants for cash at the exercise price of $3.50 per share in consideration for our agreement to issue a new unregistered warrant to purchase up to an aggregate of 1,999,200 shares of common stock at an exercise price of $3.50 per share. The new warrant was immediately exercisable upon issuance and has a term of five years from the issuance date.
Current wording
On October 16, 2025, we entered into an inducement letter agreement (the “October Inducement Letter Agreement”) with an institutional investor and holder of existing warrants to purchase up to 2,021,571 shares of our common stock. The existing warrants were originally issued in May 2022, September 2023, and September and December 2024, with an exercise prices ranging from $75,000.00 to $3.50 per share, and became exercisable immediately following issuance. Pursuant to the October Inducement Letter Agreement, the holder agreed to exercise the existing warrants for cash at the exercise price of $2.06 per share in consideration for our agreement to issue a new unregistered warrant to purchase up to an aggregate of 4,043,142 shares of common stock at an exercise price of $2.06 per share. The new warrant was immediately exercisable upon issuance and has a term of five years from the issuance date.
Previous wording
Selling, general and administrative expenses (“SG&A”) were $4.2 million for the three months ended June 30, 2025, compared to $2.7 million for the three months ended June 30, 2024. SG&A increased $1.5 million, or 54%. The increase was due to $759 thousand of legal charges related to the NaturalShrimp asset purchase, $268 thousand of expenses related to the Narayan transactions, and $234 thousand of franchise tax expense.
Current wording
Selling, general and administrative expenses (“SG&A”) were $3.8 million for the three months ended September 30, 2025, compared to $2.2 million for the three months ended September 30, 2024. SG&A increased $1.6 million, or 73%. The increase was primarily driven by higher depreciation expense related to the assets purchased from Natural Shrimp and associated right of use, legal, audit and accounting expenses.
Previous wording
Loss from operations were $3.6 million for the three months ended June 30, 2025, compared to $1.2 million for the three months ended June 30, 2024. The increase in the loss from operations was driven by higher SG&A expenses as previously described and the decline in revenue.
Current wording
Loss from operations were $3.6 million for the three months ended September 30, 2025, compared to $1.5 million for the three months ended September 30, 2024. The increase in the loss from operations was driven by lower gross margin and higher SG&A expenses as previously described above.
Previous wording
Net loss was $4.0 million for the three months ended June 30, 2025, compared to a net loss of $1.9 million for the three months ended June 30, 2024. The reasons for the increase in net loss are explained above.
Current wording
Net loss was $4.0 million for the three months ended September 30, 2025, compared to a net loss of $2.1 million for the three months ended September 30, 2024. The reasons for the increase in net loss are explained above.
Previous wording
Revenue was $5.9 million for the six months ended June 30, 2025, compared to $7.4 million for the six months ended June 30, 2024. The decrease in revenue of $1.5 million, or 21%, is primarily attributed to our strategic exit from the floral and lettuce categories, which contributed $1.1 million of the decline year over year. Excluding these exited categories, revenue decreased $87 thousand, or 2%. Revenue from our core herb portfolio, which excludes the legacy lettuce and floral lines, decreased from $5.5 million to $5.4 million year-over-year, or 2%, while revenue from our vitamin and supplement portfolio decreased from $1 million to $996 thousand year-over-year.
Current wording
Revenue was $8.7 million for the nine months ended September 30, 2025, compared to $10.0 million for the nine months ended September 30, 2024. The decrease in revenue of $1.3 million, or 13%, is primarily attributed to our strategic exit from the floral and lettuce categories, which contributed $1.1 million of the decline year over year.
Previous wording
Cost of goods sold were $2.5 million for the three months ended June 30, 2025, compared to $2.7 million for the three months ended June 30, 2024. Cost of goods sold decreased $190 thousand, or 7%. As a percentage of revenue, gross profit decreased to 20% from 37% in the three months ended June 30, 2025. The decrease was driven by driven by inflationary pressures and higher labor costs related to production. We are working to mitigate cost pressures, assessing price adjustments and supplier negotiations where market conditions permit.
Current wording
Cost of goods sold were $7.7 million for the nine months ended September 30, 2025, compared to $7.7 million for the nine months ended September 30, 2024. Cost of goods sold was approximately the same for the two periods. As a percentage of revenue, gross profit decreased to 11% from 23% for the nine months ended September 30, 2025. The decrease was driven by inflationary pressures and higher labor costs related to production. We are working to mitigate cost pressures, assessing price adjustments and supplier negotiations where market conditions permit.
Previous wording
Selling, general and administrative expenses were $7.2 million for the six months ended June 30, 2025, compared to $6.6 million for the six months ended June 30, 2024. SG&A increased $610 thousand, or 9%. The increase was due expenses related to the NaturalShrimp asset purchase and Narayan transactions.
Current wording
Selling, general and administrative expenses were $11.1 million for the nine months ended September 30, 2025, compared to $8.8 million for the nine months ended September 30, 2024. SG&A increased $2.3 million, or 26%. The increase was driven by transaction, professional and depreciation expenses related to the NaturalShrimp asset purchase, offset by the termination of severance payments related to the departure of the Company’s Chief Financial Officer in 2024.
Previous wording
Loss from operations were $6.5 million for the six months ended June 30, 2025, compared to $5.0 million for the six months ended June 30, 2024. The increase in the loss from operations was driven by the increased expenses described above along with the decline in revenue.
Current wording
Loss from operations were $10.1 million for the nine months ended September 30, 2025, compared to $6.5 million for the nine months ended September 30, 2024. The increase in the loss from operations was driven by lower gross margin and higher SG&A expenses as previously described above.
Previous wording
Net loss was $7.4 million for the six months ended June 30, 2025, compared to a net loss of $5.9 million for the six months ended June 30, 2024. The reasons for the decrease in net loss are explained above.
Current wording
Net loss was $11.4 million for the nine months ended September 30, 2025, compared to a net loss of $8.0 million for the nine months ended September 30, 2024. The reasons for the increase in net loss are explained above
Previous wording
We have incurred significant losses since our inception. We recognized net losses of approximately $7.4 million during the six months ended June 30, 2025 and $11.1 million during the twelve months ended December 31, 2024. 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.
Current wording
We have incurred significant losses since our inception. We recognized net losses of approximately $11.4 million during the nine months ended September 30, 2025 and $11.1 million during the twelve months ended December 31, 2024. 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.
Previous wording
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 the existing cash will fund operations into the third quarter of 2025 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 used in operating activities was $6.8 million and $5.6 million during the six months ended June 30, 2025 and 2024, respectively. 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.
Current wording
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 second 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 used in operating activities was $9.1 million and $6.8 million during the nine months ended September 30, 2025 and 2024, respectively. 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.
Previous wording
The Company’s primary liquidity requirements are for working capital, continued investments in capital expenditures, repayment of indebtedness, payment of the preferred return to the holder of our Series B Preferred Stock, 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. The Company’s liquidity needs have been met primarily through public and private equity offerings, term loan borrowings, accounts receivable financing, convertible notes, and related party loans.
Current wording
The Company’s primary liquidity requirements are for working capital, continued investments in capital expenditures, repayment of indebtedness, payment of the preferred return to the holder of our Series B Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), 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. The Company’s liquidity needs have been met primarily through public and private equity offerings, term loan borrowings, accounts receivable financing, convertible notes, and related party loans.
Previous wording
As of June 30, 2025 and December 31, 2024, we had $2.8 million and $3.5 million in cash and cash equivalents available, respectively. During the six months ended June 30, 2025, we used $6.8 million in cash for operating activities. As of June 30, 2025 and December 31, 2024, we had $2.0 million and $3.2 million of total debt outstanding, respectively. To meet our cash needs, we raised $3.0 million via the sale of preferred stock to Streeterville, entered into the Arin II Agreement, raised approximately $1.86 million in an at-the-market offering, received approximately $3.3 million from warrant exercises and are implementing cost savings strategies. See “Capital Resources” below for additional details.
Current wording
As of September 30, 2025 and December 31, 2024, we had $0.8 million and $3.5 million in cash and cash equivalents available, respectively. As of September 30, 2025 and December 31, 2024, we had $2.7 million and $3.2 million of total gross debt outstanding, respectively. During the nine months ended September 30, 2025, we used $9.1 million in cash for operating activities. As of September 30, 2025, we had a working capital deficit of $1.2 million, a decrease of approximately $2.4 million from a working capital surplus of $1.2 million as of December 31, 2024. To meet our cash needs, during the nine months ended September 30, 2025, we raised $3.3 million via the May warrant inducement, we raised $3.0 million from the sale of preferred stock, we entered into the Arin II Agreement and the Avondale secured promissory note, we raised approximately $2.3 million in an at-the-market offerings, and subsequent to September 30, 2025, we raised an additional $4.2 million via the October warrant inducement. We are also continuing to assess our cost structure for opportunities. See “Capital Resources” below for additional details.
Previous wording
On May 21, 2025, we entered into an Inducement Letter Agreement with an institutional investor and holder of existing warrants to purchase up to 999,600 shares of our common stock of for total proceeds of $2.999 million. Maxim received an aggregate cash fee equal to 6.5% of the $3.5 million in total proceeds received from the exercise of the Existing Warrants exercised in connection with the Inducement Letter Agreement. See Note 10 “Stockholders’ Equity (Deficit) And Stock-Based Compensation.”
Current wording
On May 21, 2025, we entered into an inducement letter agreement (the “Inducement Letter Agreement”) with an institutional investor and holder of existing warrants to purchase up to 999,600 shares of our common stock for total proceeds of $2.999 million. Maxim received an aggregate cash fee equal to 6.5% of the $3.5 million in total proceeds received from the exercise of the Existing Warrants exercised in connection with the Inducement Letter Agreement. See Note 10 “Stockholders’ Equity (Deficit) And Stock-Based Compensation.”
Previous wording
On May 14, 2025, we entered into the SPA with Streeterville, pursuant to which we issued 3,000 shares of Series B Preferred Stock, at a stated value of $1,000 per share, to Streeterville, for the purchase price of $3.0 million. Additionally, pursuant to the SPA, Streeterville shall purchase an additional 500 shares of Series B Preferred Stock, at a stated value of $1,000 per share, on November 13, 2025 for a purchase price of $500 thousand, provided we remain listed on Nasdaq.
Current wording
On May 14, 2025, we entered into a stock purchase agreement (the “SPA”) with Streeterville Capital LLC (“Streeterville”), pursuant to which we issued 3,000 shares of Series B Preferred Stock, at a stated value of $1,000 per share, to Streeterville, for the purchase price of $3.0 million. Additionally, pursuant to the SPA, Streeterville shall purchase an additional 500 shares of Series B Preferred Stock, at a stated value of $1,000 per share, on November 14, 2025.
Previous wording
On April 2, 2025, we entered into the Arin II Agreement with Arin, pursuant to which we agreed to sell $2.0 million of future accounts receivable to Arin in exchange for a purchase price of $1.5 million, less fees and expenses of $65 thousand, for net funds provided of $1.4 million. In connection with the Arin II Agreement, we negotiated with Cedar to discount the outstanding balance under the Cedar III Agreement, from $1.4 million to $1.3 million, in exchange for us agreeing to prepay the future amounts payable under the Cedar III Agreement. A portion of the net proceeds of the Arin II Agreement were used to satisfy the remaining amount to which Cedar was entitled under the Cedar III Agreement. Weekly, we are required to pay Arin 20.0% of all funds collected from customers for the sale of goods and services and Arin is authorized to withdraw $63,750 of funds from our bank account until the total balance of $2.0 million is repaid.
Current wording
On April 2, 2025, we entered into the Arin II Agreement with Arin, pursuant to which we agreed to sell $2.0 million of future accounts receivable to Arin in exchange for a purchase price of $1.5 million, less fees and expenses of $65 thousand, for net funds provided of $1.4 million. In connection with the Arin II Agreement, we negotiated with Cedar Advance LLC (“Cedar”) to discount the outstanding balance under the standard merchant cash advance agreement entered into with Cedar, dated as of December 4, 2024 (the “Cedar III Agreement”), from $1.4 million to $1.3 million, in exchange for us agreeing to prepay the future amounts payable under the Cedar III Agreement. A portion of the net proceeds of the Arin II Agreement were used to satisfy the remaining amount to which Cedar was entitled under the Cedar III Agreement. Weekly, we are required to pay Arin 20.0% of all funds collected from customers for the sale of goods and services and Arin is authorized to withdraw $63,750 of funds from our bank account until the total balance of $2.0 million is repaid.
Previous wording
During the six months ended June 30, 2025 and 2024, cash used for operating activities was $6.8 million and $5.6 million, respectively. The increase in cash used for operating activities was primarily driven by the decrease in revenue and the reduction in accounts payable, offset by a reduction in accounts receivables.
Current wording
During the nine months ended September 30, 2025 and 2024, cash used for operating activities was $9.1 million and $6.8 million, respectively. The increase in cash used for operating activities was primarily driven by the increase in net loss and the reduction in accounts payable, and an increase in prepaid expense and other current assets.
Previous wording
During the six months ended June 30, 2025 and 2024, cash used in investing activities was $122 thousand and $167 thousand, respectively. The decrease in cash used in investing activities is attributable to lower normal course of business purchases of property, equipment and leasehold improvements.
Current wording
During the nine months ended September 30, 2025 and 2024, cash used in investing activities was $0.5 million and $0.2 million, respectively. The decrease in cash used in investing activities is attributable to lower normal course of business purchases of property, equipment and leasehold improvements.
Previous wording
During the six months ended June 30, 2025 and 2024, cash provided by financing activities was $6.2 million and $7.5 million, respectively. The $1.3 million decrease in cash provided by financing activities was driven by lower cash flows from debt financing of $2.8 million as we reduced our debt via paydowns and lower borrowings, offset by higher financing cash flows related to the warrant inducement, our issuance of preferred stock and the EDA.
Current wording
During the nine months ended September 30, 2025 and 2024, cash provided by financing activities was $7.0 million and $8.6 million, respectively. The $1.6 million decrease in cash provided by financing activities was due to our repayment of outstanding debt and the lack of any public offerings of stock in 2025 as compared to 2024, offset by higher financing cash flows related to our May 2025 warrant inducement, the sale of $3.0 million of our preferred stock and higher cash flows from our 2025 equity distribution agreement.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
On April 2, 2025, we entered into a standard merchant cash advance agreement (the “Arin II Agreement”) with Arin Funding LLC (“Arin”), pursuant to which we agreed to sell $2,040,000 of future accounts receivable to Arin in exchange for a purchase price of $1,500,000, less fees and expenses of $65,000, for net funds provided of $1,435,000. In connection with the Arin II Agreement, we negotiated with Cedar Advance LLC (“Cedar”) to discount the outstanding balance under the standard merchant cash advance agreement with Cedar, dated as of December 4, 2024 (the “Cedar III Agreement”), from $1,373,285 to $1,263,422, in exchange for us agreeing to prepay the future amounts payable under the Cedar III Agreement. A portion of the net proceeds of the Arin II Agreement were used to satisfy the remaining amount to which Cedar was entitled under the Cedar III Agreement. Weekly, we are required to pay Arin 20.0% of all funds collected from customers for the sale of goods and services and Arin is authorized to withdraw $63,750 of funds from our bank account until the total balance of $2,040,000 is repaid. The Arin II Agreement is collateralized by our cash and receivable accounts.
Previous report — wording carried elsewhere
Cost of goods sold were $5.1 million for the six months ended June 30, 2025, compared to $5.8 million for the six months ended June 30, 2024. Cost of goods sold decreased $669 thousand, or 12%. As a percentage of revenue, gross profit decreased to 12% from 21% in the six months ended June 30, 2025. The decrease was driven by driven by inflationary pressures and higher labor costs related to production. We are working to mitigate cost pressures, assessing price adjustments and supplier negotiations where market conditions permit.