Edible Garden AG Inc. (EDBL) - 10-Q Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026. Edible Garden AG Inc. is a controlled environment agriculture (CEA) company producing organic fresh produce and nutraceuticals. The company is currently executing a strategic pivot known as "Farm-to-Formula," transitioning its Webster City, Iowa facility into a ready-to-drink (RTD) clean nutrition manufacturing hub. The company is classified as a non-accelerated filer, smaller reporting company, and emerging growth company.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | Value (in thousands) |
|---|---|
| Revenue | $6,891 |
| Net Loss | $(6,928) |
| Operating Loss | $(9,855) |
| Cash from Operating Activities | $895 |
| Cash and Restricted Cash (End of Period) | $10,658 |
| Unrestricted Cash Available | $658 |
| Total Debt (Gross) | $14,202 |
| Total Assets | $27,707 |
| Total Liabilities | $22,134 |
Note: $10.0 million of the cash balance is restricted as collateral for the Streeterville B Note.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 17.5% to $6.9 million (vs. $5.9 million in the prior year), driven by a 49.3% increase in the cut herb portfolio.
- Expense Increases: Operating expenses rose 35.2% to $16.7 million. This was primarily due to a 42.8% increase in Cost of Goods Sold (shift to higher-cost third-party sourced herbs) and a 600.8% increase in depreciation/amortization due to accelerated depreciation related to the RTD manufacturing pivot.
- Debt Structure: Total gross debt surged from $1.9 million to $14.2 million. The company secured $13.5 million in new financing from Streeterville Capital (Notes A-1 and B) to fund operations and the strategic pivot, replacing higher-cost short-term debt.
- Income Tax Benefit: A one-time income tax benefit of $3.4 million was recorded from the sale of New Jersey state net operating loss carryforwards, reducing the net loss from $10.3 million to $6.9 million.
- Stock Structure: A 1-for-45 reverse stock split was approved by stockholders and became effective July 13, 2026, to regain Nasdaq compliance.
Outlook, Risks, and Management Commentary
- Going Concern: Management has expressed substantial doubt about the company's ability to continue as a going concern for the next twelve months. Unrestricted cash is limited ($0.7 million), and the company expects to incur further losses.
- Liquidity Strategy: The company relies on the Streeterville financing and a new Equity Distribution Agreement (EDA) entered into August 11, 2026, allowing for up to $7.2 million in at-the-market offerings.
- Nasdaq Compliance: The company received an extension until August 15, 2026, to regain compliance with the $1.00 minimum bid price rule. Failure to comply could result in delisting.
- Strategic Pivot: The "Farm-to-Formula" initiative to build an RTD manufacturing hub is in the development stage. Phase 1 production is anticipated in 2027, subject to capital availability and final agreements with Tetra Pak.
- Customer Concentration: Four customers accounted for 66.2% of revenue in the first half of 2026, creating significant concentration risk.
Investor Verification Checklist
- Restricted Cash Status: Verify the release conditions for the $10.0 million restricted cash collateralized against the Streeterville B Note.
- Debt Covenants: Review the specific covenants and redemption triggers in the Streeterville Notes A-1 and B, particularly regarding monthly monitoring fees and exchange mechanisms.
- Nasdaq Compliance: Monitor the stock price to ensure compliance with the $1.00 bid price rule by the August 15, 2026 deadline.
- Capital Expenditures: Assess the funding requirements and timeline for the Webster City RTD facility construction and equipment installation.
- Customer Retention: Evaluate the stability of the top four customers representing two-thirds of revenue.