EDBL 10-K & 10-Q changes, risk factors and insider trading

We have incurred significant losses since our inception. We experienced net losses of approximately $11.1$17.3 million and $10.2$11.1 million for the years ended December 31, 20242025 and 2023,2024, respectively. We expect our capital and operational expenses to remain at historical levels as a percent of revenue in the future due to the development of an RTD beverage manufacturing facility, sales and marketing investments, packhouse construction costs, costs to continue our growth strategy, and general and administrative costs. Therefore, our operating losses will continue through the near term. Furthermore, to the extent that we are successful in increasing our customer base, we will also incur increased expenses because costs associated with generating and supporting customer agreements are generally incurred up front, while revenue is generally recognized ratably over the term of the relationship. You should not rely upon our past results as indicative of future performance. We may not reach profitability in the near future or at any specific time in the future. If and when our operations do become profitable, we may not sustain profitability.

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 thirdsecond quarter of 20252026 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 $8.5$11.8 million and $8.5 million for the years ended December 31, 20242025 and 2023,2024, respectively.

In accordance with accounting guidance, we estimated the value of the equipment and leasehold improvements that we acquired from our predecessor at the time of acquisition, and management is required to analyze whether impairment may exist for our assets. When impairment triggers are deemed to exist for assets, the estimated undiscounted future cash flows are compared to its carrying value. If the carrying value exceeds the undiscounted cash flows, an impairment charge equal to the difference between the carrying value and the fair value is recorded. The projections of future cash flows used in these analyses require the use of judgment and a number of estimates and projections of future operating results. If actual results differ from our estimates, additional charges for asset impairments may be required in the future. In the past, we have had to record impairment charges that have negatively impacted our net income. If future impairment charges are significant, our reported operating results would be adversely affected.

We haveare a relatively shortsmaller operatingcompany history,than many of our competitors, which makes it difficult to evaluateexecute our businessstrategy and futureachieve prospects.our growth objectives.

We haveAs a relativelysmaller shortcompany, operatingour history,scale, whichresources makesand itmarket difficultpresence are more limited than many of our competitors. These limitations may increase the risks and uncertainties we face as we work to evaluategrow and expand our business and future prospects. While the predecessor business has existed since 2013, our company has been in existence only since March 2020.operations. We have encountered, and will continue to encounter, riskschallenges and difficulties frequentlycommonly experienced by growingsmaller companies in competitive and rapidly changingevolving industries, including those related to:

During the year ended December 31, 2025, 88.2% of our total revenue was attributed to five customers (42.7% of which was attributed to sales to one customer). During the year ended December 31, 2024, 82.0% of our total revenue was attributed to four customers (44.0% of which was attributed to sales to one customer). During the year endedAt December 31, 2023,2025, 83.1%approximately 73.7% of our totalgross revenueoutstanding wastrade receivables were attributed to five customers (44.4%38.0% of which was attributeddue to sales tofrom one customer). At December 31, 2024, approximately 87.5% of our gross outstanding trade receivables were attributed to five customers (45.6% of which was due from one customer). At December 31, 2023, approximately 80.4% of our gross outstanding trade receivables were attributed to four customers (41.1% of which was due from one customer). These customers generally do not enter into long-term contracts. Although we entered into the Supply Agreements, which provide for a three-year term,term expiring December 31, 2026, Meijer may terminate the Supply Agreements without cause upon 60 days’ notice. We face risks related to maintaining the volume demanded on a short-term basis from these customers, which can also divert resources away from other customers. This concentration of customers leaves us exposed to the risks associated with the loss of one or more of these significant customers, which would materially and adversely affect our revenue and results of operations. If these customers were to significantly reduce their relationship with us, or in the event that we are unable to replace the revenue through the sale of our products to additional customers, our financial condition and results from operations could be negatively impacted, and such impact would likely be significant.

Our products are vulnerable to adverse weather conditions, which are common but difficult to predict. The effects of natural disasters may be intensified by the ongoing global climate change. Severe weather conditions have and are expected to continue and could adversely affect our supply of one or more fresh produce items,items and components of our packaged products, reduce our sales volumes, increase our unit production costs or prevent or impair our ability to ship products as planned. When severe weather, wildfires, natural disasters, and other adverse environmental conditions (i) destroy products planted in our greenhouses or our contract growers’ greenhouses or (ii) prevent us from distributing these products on a timely basis, we may lose our investment in those products and/or our costs of purchased products may increase. These risks can be exacerbated when a substantial portion of our production of a specific product is grown in one region, provided by a limited number of contract growers, or when it endangers one of our products.

An overall decline in economic activity could adversely impact our business and financial results. Economic uncertainty may reduce consumer spending as consumers make decisions on what to include in their food budgets, particularly if food costs increase more quickly than wages in an inflationary environment. Economic uncertainty could also result in changing consumer preferences and could reduce the demand for our products. Shifts in consumer spending could result in increased pressure from competitors or customers that may require us to increase promotional spending or reduce the prices of some products, which could then lower revenue and profitability. In addition to the economic factors listed above, global events such as the Ukraine-Russia war, the Israel-Hamas war, the U.S. military’s intervention in Venezuela, and the conflicts among the U.S., Israel and Iran, or any other economic factors or circumstances resulting in higher transportation, labor, insurance or healthcare costs or commodity prices, including energy prices, and other economic factors in the U.S. and other countries in which we operate can increase our cost of sales and operating, selling, general and administrative expenses and otherwise materially adversely affect our operations and operating results.

Additionally, we are subject to regional economic volatilities since our potential growing capacity isand production facilities are located in a few areas, including Belvidere, New Jersey; Grand Rapids, Michigan; Ojai, California and Ojai,Webster California.City, Iowa. Our use of hydroponic farming requires that it rely on local disease-free water sources and growing materials. Accordingly, any change in the availability of these local raw materials could adversely affect our operating results.

Our business ishas notlimited diversifieddiversification and consists primarily of growing, shipping and selling fresh herbs, along with plant-based protein, sports nutrition, a line of gourmet sauces, pickles, chili-based products, and squeezable herbs. Consumers’ preferences change rapidly and without warning, moving from one trend to another among many retail concepts. Therefore, our business is substantially dependent on our ability to anticipate shifts in consumers’ tastes and preferences. Any future shifts in consumer preferences away from the consumption of these productsproducts, including demand for our RTD beverages, would also have a material adverse effect on our results of operations. Consumer purchases of specialty retail products, including our products, are discretionary in nature and are historically affected by economic conditions such as changes in employment, salary and wage levels, and confidence in prevailing and future economic conditions as may be affected by geopolitical events, political instability, tariffs, trade restrictions, unseasonable weather, pandemics and other public health emergencies, as well as other factors that are outside of our control. Discretionary purchases may decline during recessionary periods or at other times when disposable income is lower, such as during highly inflationary periods. If periods of decreased consumer spending persist, our sales could decrease, and our financial condition and results of operations could be adversely affected.

Our future success depends on our ability to attract, retain and motivate qualified personnel, including our management, sales and marketing, operational, transportation, finance and administration personnel. For example, we currently haveare ahiring limitedfor numberskilled ofplant driversworkers to transportlaunch our productsRTD to our customers.plant. We do not know whether we will be able to hire sufficientsufficiently skilled workers with specific experience for these positions to meet our production and delivery goals or, if hired, retain all of these personnel as we continue to pursue our business strategy. The loss of the services of one or more of our key employees, or our inability to attract, retain and motivate qualified personnel could have a material adverse effect on our business, financial condition and operating results.

If we fail to accurately assess and successfully integrate any recent or future acquisitions such as the Transaction,assets acquired in Fort Dodge, Iowa, we may not achieve the anticipated benefits, which could result in lower revenue, unanticipated operating expenses, and increased losses. Successful integration involves many challenges, including:

As ana early-stagegrowing company, we may implement new lines of business at any time. For example, in the first quarter of 2023, we launched a line of gourmet sauces and chili-based products to expand our reach into supermarkets. In 2024, we launched two additional lines: Pickle Party, a line of fresh and fermented pickles to augment our condiment line and Kick. Sports Nutrition, a cleaner label, better for you nutraceutical line.

The sales of our products involve the risk of injury to consumers. Such injuries may result from tampering by unauthorized personnel, product contamination or spoilage, including the presence of foreign objects, substances, chemicals, or residues introduced during the growing, production, packing, storage, handling or transportation phases. We cannot be sure that consumption of our products will not cause a health-related illness in the future or that we will not be subject to claims or lawsuits relating to such matters.matters which could significantly increase our expenses. Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertion that our products caused illness or injury could adversely affect our reputation with existing and potential customers and our brand image, which could significantly harm our business.

Our indebtedness and the rights of our Series B Preferred Stock could have important consequences to you.

Our indebtedness and the rights of our Series B Preferred Stock could have important consequences to you. For example, it could:

The promissory note issued in connection with our purchase of 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 a standardsecured merchantpromissory cash advance agreementnote with CedarAvondale AdvanceCapital LLC is collateralized by our cash and cash equivalents, accounts receivable accounts.and all other receivables. 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.

Failure to obtain necessary permits or otherwise comply with USDA and FDA regulations and requirements could result in a ban or temporary suspension of our ability to grow, manufacture or market our products as organic, and thus could materially adversely affect our business.

As a producer and distributor of food products, we are subject to the laws and regulations in the jurisdictions where our facilities are located and where our products are distributed. In particularparticular, we are subject to the Federal Food, Drug and Cosmetic Act, as amended by the Food Safety Modernization Act in 2011 (the “FSM Act”), which is enforced by the FDA. The FDA has the authority to regulate the growing, harvesting manufacture, including composition and ingredients, processing, labeling, packaging import, distribution and marketing and safety of food in the United States. The FSM Act significantly enhances the FDA’s authority over various aspects of food regulation. For example, the FSM Act granted the FDA mandatory recall authority when the FDA determines there is a reasonable probability that a food is adulterated or misbranded and that the use of, or exposure to, the food will cause serious adverse health consequences or death to humans or animals. While the FDA has been active in implementing the requirements of the FSM Act through issuance of regulations designed to result in a reduction of the risk of contamination in food manufacturing, the full impact of the FSM Act is not yet known, and we cannot assure you that it will not materially impact our business. Regulatory agencies in other jurisdictions have similar authority to address the risk of contamination or adulteration, and to require that contaminated products be removed from the market. The failure to comply with these laws and regulations in any jurisdiction, or to obtain required approvals, could result in a ban or temporary suspension on the production of our products or limit or bar their distribution, and affect our development of new products, and thus could materially adversely affect our business and operating results. In addition, the United States Department of Agriculture (the “USDA”), regulates the import and export of certain fruits and vegetables into and from the United States, and the USDA also imposes growing, manufacturing and certification requirements for certain products labeled with organic claims. Failure to obtain necessary permits or otherwise comply with USDA regulations and requirements could result in a ban or temporary suspension of our ability to grow, manufacture or market our products as organic, and thus could materially adversely affect our business.

Earnings may be affected by seasonal factors, including the availability, quality, and price of raw materials, the timing and effects of ripening and perishability, the ability to process perishable raw materials in a timely manner, the leveraging of certain fixed overhead costs during off-season months, and the slight impacts on consumer demand based on seasonal and holiday timing. Because some of our products are grown, the expenses incurred to meet consumer demand are often incurred in advance of the revenue earned by selling the herbs and lettuce.herbs. For example, in our New Jersey facility, we begin sowing our longest-growing crop 13 to 14 weeks in advance of delivery. The impact of seasonal demand and the sales cycle for our products may cause our results to vary from quarter to quarter, which may make an investment in us less attractive to some investors.

Our costs are determined in part by the prices of fuel and packaging materials. We may be adversely affected if sufficient quantities of these materials are not available. In addition, any significant increase in the cost of these items could also materially and adversely affect our operating results. Specifically, we require significant quantities of fuel for our delivery vehicles and thus are exposed to the risks associated with fluctuations in the price for fuel. The price and supply of fuel can fluctuate significantly based on international, political, and economic circumstances, such as the Ukraine-Russia war, the Israel-Hamas war, the U.S. military’s intervention in Venezuela, and the conflicts among the U.S., Israel and Iran, as well as other factors outside of our control. If we are unable to manage the potential volatility in these input costs, our operations and financial results may be adversely affected.

The indoor agriculture industry isand the consumer packaged goods industry are highly competitive. We may compete with companies that have greater capital resources and facilities. More established companies with much greater financial resources which do not currently compete with us may be able to more easily adapt their existing operations to our line of business. Our competitors may also introduce new and improved products. We may not be able to successfully compete with larger enterprises devoting significant resources to compete in our target market. Our ability to compete depends upon our ability to predict, identify, and interpret the tastes and dietary habits of consumers and to offer products that appeal to those preferences. There are inherent marketplace risks associated with new product or packaging introductions, including uncertainties about trade and consumer acceptance. If we do not succeed in offering products that consumers want to buy, our sales will decrease. If we are unable to accurately predict which shifts in consumer preferences will be long-lasting or are unable to introduce new and improved products to satisfy those preferences, our sales will decrease. If we fail to develop products in more profitable categories, we could fail to expand margins. Due to this competition, there is no assurance that we will not encounter difficulties in increasing revenue and maintaining and/or increasing market share. In addition, increased competition may lead to reduced prices and/or margins for products we sell.

WeThere can providebe no assurance that our shares will continue to be listed on Nasdaq,the Nasdaq Capital Market, which would affect our common stock’s liquidity and reduce our ability to raise capital.

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 met 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 were not eligible for any compliance period to regain compliance with the Bid Price Rule. On OctoberJanuary 28,14, 2024,2025, we submittedattended a request for aour hearing beforewith the Panel to appeal the delisting notice from the Staff,Nasdaq and on February 12, 2025, we received writtenthe notificationNotice from theNasdaq that a Nasdaq Hearings Panel that granted us an extension for us to regain compliance with the Bid Price Rule until March 31, 2025, subject to additional conditions outlined in the Notice. TheOn extensionApril by8, 2025, we received a letter from Nasdaq confirming that we had regained compliance with the PanelBid isPrice contingentRule, onhowever thewe Companywill achievingremain scheduledunder milestones and notifyinga Nasdaq ofdiscretionary suchpanel achievement.monitor Ifuntil theApril Company8, is not successful at satisfying these milestones within the prescribed time, the Panel may revoke the extension.2026.

There can be no assurance that we will ultimatelybe meetable to maintain compliance with 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:

Any financing that we secure may require the granting of rights, preferences or privileges senior to, or pari passu with, those of our common stock. Any issuances by us of equity securities may be at or below the prevailing market price of our common stock and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our common stock to decline. We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities or instruments senior to our shares of common stock, which may be highly dilutive. The holders of any securities or instruments we may issue may have rights superior to the rights of our common stockholders. IfFor example, the Series B Preferred Stock earns a preferred return on the stated value of the preferred stock, is ranked senior to the common stock with regard to dividends, distributions, and payments upon our dissolution, liquidation, or winding up, and is required to consent to certain corporate actions, such as: (i) granting of shares of Series B Preferred Stock to anyone other than Streeterville; (ii) increasing the authorized shares of our common stock or preferred stock; (iii) making any Restricted Issuance (as defined in the Certificate of Designation for the Series B Preferred Stock); (iv) entering into any agreement or commitment to, create, authorize, or issue any class of preferred stock that is equal to or senior in liquidation preference to the Series B Preferred Stock; (v) consummating a Fundamental Transaction (as defined in the Certificate of Designation for the Series B Preferred Stock) or entering into an agreement to consummate a Fundamental Transaction; and (vi) entering into any agreement or commitment to, dispose of any assets or operations that comprise more than 25% of our consolidated revenue or total assets.If we experience dilution from the issuance of additional securities and we grant superior rights to new securities over holders of our common stock, it may negatively impact the trading price of our common stock and you may lose all or part of your investment.

Our certificate of incorporation and bylaws contain provisions that may have the effect of making more difficult or delaying attempts by others to obtain control of our Company, even when these attempts may be in the best interests of our stockholders. For example, our certificate of incorporation authorizes our Board, without stockholder approval, to issue one or more series of preferred stock, which could have voting and conversion rights that adversely affect or dilute the voting power of the holders of common stock. In addition, provisions of certain of our outstanding warrants could make it more difficult or expensive for a third party to acquire us. The warrants prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the warrants. Further, pursuant to the Certificate of Designation for the Series B Preferred Stock, we are prohibited from entering into a Fundamental Transaction (as defined in the Certificate of Designation for the Series B Preferred Stock) or entering into any agreement to dispose of any assets or operations that comprise more than 25% of our consolidated revenue or total assets without the consent of the holder of the Series B Preferred Stock. These provisions and others that could be adopted in the future could deter unsolicited takeovers or delay or prevent changes in our control or management, including transactions in which stockholders might otherwise receive a premium for their shares over then-current market prices. These provisions may also limit the ability of stockholders to approve transactions that they may deem to be in their best interests.

General economic conditions and other economic factors in one or more of the markets we serve,serve may adversely affect our financial performance. Higher interest rates, increased costs for utilities, increased shipping costs, inflation, deflation, higher levels of unemployment, decreases in gross domestic product and consumer disposable income, higher tax rates, imposition of new taxes or other changes in tax laws, the imposition of import restrictions, tariffs, or overall economic slowdown or recession and other economic factors in the U.S. could adversely affect consumer demand for the products we sell, adversely affecting our net sales, growth rates, or operating income.

We may experience increases in the cost or a sustained interruption in the supply or shortage of raw materials. For example, the tariffs currently imposed and contemplated for importing goods from key international supply chain locations have significantly increased. Any such an increase or supply interruption could materially negatively impact our business, prospects, financial condition and operating results. We use various raw materials in our business including aluminum and fertilizer. The prices for these raw materials fluctuate depending on market conditions along withconditions, the impact of tariffs, geopolitical events or conflicts, and global demand for these materialsmaterials, and increased prices could adversely affect our business and operating results. Substantial increases in the prices for our raw materials increase our operating costs and could reduce our margins if we cannot recoup the increased costs through increased prices for our products and services.

From time to time in the normal course of our business operations, we may become subject to litigation involving intellectual property, data privacy and security, consumer protection, food safety, commercial disputes and other matters that may negatively affect our operating results if changes to our business operation are required. We may also be subject to claims involving health and safety, hazardous materials usage, other environmental impacts, or service disruptions or failures. In addition, we may be subject to regulatory actions. For example, all Employee Retention Credit (“ERC”) claims, which can be made in a variety of circumstances with varying degrees of subjectivity and without clear authoritative guidance, are subject to inspection and reversal by the Internal Revenue Service (“IRS”). Although we received approximately $865 thousand in ERC funds during the year ended December 31, 2023, we have received no formal determination regarding our claims for the ERC. If we were found to be ineligible for the ERC, the IRS could reverse the ERC credits and charge a penalty and interest on the funds we received. There can be no assurance that we will be able to retain the ERC funds we have received to date. The cost to defend such litigation or regulatory action may be significant and may require a diversion of our resources. There also may be adverse publicity associated with litigation that could negatively affect customer perception of our business, regardless of whether the allegations are valid or whether we are ultimately found liable. As a result, litigation may adversely affect our business, financial condition and results of operations. In addition, insurance may not cover existing or future claims, be sufficient to fully compensate us for one or more of such claims,claims or continue to be available on terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby adversely affecting our results of operations and resulting in a reduction in the trading price of our stock.

An active, liquid and orderly trading market for our common stock may not develop, theThe price of our stock is volatile, and you could lose all or part of your investment.

The trading market for our common stock is influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our securities adversely, or provide more favorable relative recommendations about our competitors, our stock and warrant prices would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock and warrant prices or trading volume to decline.

We focus our efforts on producing our herbs and vegetables in a sustainable manner that will reduce consumption of natural resources, by recycling water in our closed loop system and using LED lights instead of conventional lightbulbs to accelerate crop growth and yield, when necessary. In addition, the inventory management component of GreenThumb allows us to manage inventory levels, order quantities and fill rates while maximizing truck loads. This means that we are better able to control shipping our products in full truck loads and retailer backhaul programs, thus eliminating multiple deliveries and decreasing the excess emission of greenhouse gases that would result from many partially full trucks delivering our products. Together, these elements of our production and distribution process are intended to reduce our carbon footprint, or the total amount of greenhouse gases that are generated by our actions, as compared with a legacy farm business.

AsOn of MarchFebruary 3, 2025,2026, we effected a 1-for-251-for-10 reverse stock split (the “Reverse Stock Split”) of our outstanding common stock. The conversion or exercise prices of our issued and outstanding stock options and warrants were adjusted in connection with the reverse stock split. All historical share and per share amounts reflected throughout this Annual Report on Form 10-K have been adjusted to reflect the Reverse Stock Split.

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 meet 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”). 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 were 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 Nasdaq Hearings Panel (the “Panel”) to appeal the delisting notice from the Staff. On January 14, 2025, we attended our hearing with Nasdaq February 12, 2025, we received written notification (the “Notice”) from Nasdaq that the 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. The extension by the Panel is contingent on us achieving certain milestones and notifying Nasdaq of such achievement. If the Company is not successful at satisfying these milestones within the prescribed time, the Panel may revoke the extension. There can be no assurance that we will ultimately meet all applicable criteria for continued listing on Nasdaq. The Panel may determine to delist our securities from Nasdaq.

The most significant accounting estimates involve a high degree of judgment or complexity. Management believes the estimates and judgments most critical to the preparation of our consolidated financial statements and to the understanding of our reported financial results include allowance for doubtful accounts. The following are the accounting estimates most critical to the preparation of our consolidated financial statements.

HigherLower gross profit,profit partiallycombined offset bywith higher SG&A costs, resulted in a $598$6.5 thousandmillion decreaseincrease in loss from operations to $9.28$15.8 million for the year ended December 31, 20242025 as compared to the $9.87$9.3 million loss from operations recognized during the year ended December 31, 2023.2024.

Interest expense was $1.22$1.4 million for the year ended December 31, 2024,2025, compared to $390$1.2 thousandmillion for the year ended December 31, 2023.2024. The increase of $0.2 million in interest expense was due to our entering into and refinancing of the standard merchantARIN cash advance agreements withand Cedar (the “CedarAvondale Agreements”).Note. We incurred approximately $1.02$1.3 million in interest expense under the CedarARIN Agreementsagreements duringand 2024,Avondale Note, compared to $390$1.2 thousandmillion of interest expense paid to our lenders in 2023.2024. See Note 78 to our financial statements.

During the year ended December 31, 2025, the Company recognized a loss from extinguishment of debt of $213 thousand from modifications to our agreements with Cedar and ARIN. See Note 8 to our financial statements. During the year ended December 31, 2024, the Company recognized a loss from the extinguishment of debt of $562 thousand from modifications to our agreements with Cedar. See Note 7 to our financial statements. During the year ended December 31, 2023, the Company recognized a gain from the extinguishment of debt of $70 thousand by prepaying a promissory note owed to Sament Capital Investments. See Note 7 to our financial statements for additional details.

We have incurred significant losses since our inception. We have experienced net losses of approximately $11.05$17.3 million during the year ended December 31, 20242025 and $10.19$11.1 million during the year ended December 31, 2023.2024. We expect our capital and operational expenses to remain at historical levels as a percentpercentage of revenue in the future due to the development of an RTD beverage manufacturing facility, expected sales and marketing expenses, operational costs, packhouse construction costs, costs to continue our growth strategy, and general and administrative costs. Therefore, we believe our operating losses will continue through the near term.

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 thirdsecond quarter of 20252026 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 $8.52$11.8 million and $8.53$8.5 million during the years ended December 31, 20242025 and 2023,2024, respectively. Our financial statements have been prepared on a “going concern” basis, which implies we may not continue to meet our obligations and continue our operations for the next twelve months. 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.

As of December 31, 20242025 and December 31, 2023,2024, we had $3.5$1.1 million and $510$3.5 thousandmillion in cash and cash equivalents available, respectively. During the year ended December 31, 2024,2025, we used $8.5$11.8 million of cash for operating activities. As of December 31, 20242025 and 2023,2024, we had working capital of $1.17 million and a working capital deficit of $257($1.3) thousand,million and ($1.1) million, respectively. As of December 31, 20242025 and December 31, 2023,2024, we had $2.56$1.9 million and $4.45$3.2 million of total gross debt outstanding, respectively. ToThe meetCompany ourexpects cashto needs, we arecontinue implementing costoperational savingsefficiency strategiesinitiatives in 2026 designed to reduce waste and inimprove Januaryproduction 2025, we entered into the EDA with the Agent to sell shares of our common stock in an at-the-market offering for an aggregate offering price of up to $2.516 million.planning. In addition, the Company intends to advance the development of its ready-to-drink manufacturing initiative announced in March,2026, Maysubject to the availability of capital and Decemberother 2024, we entered into and refinanced the Cedar Agreements and received $4.4 million in cash proceeds by selling $6.46 million of trade receivables to Cedar. See Note 7 to our financial statements for additional details.factors.

We are a controlled environment agriculture ("CEA") farming company. We use traditional agricultural growing techniques together with technology to grow fresh, organic food sustainably and safely while improving traceability. We operate glass, hydroponic, and vertical greenhouse structures that enable us to grow organic herbs consistently year-round while using less land, less energy, and less water than conventional agriculture. In our hydroponic greenhouse, we grow plants without soil. Instead of planting one row of plants in the ground, by using a vertical growing system, we can grow many towers of plants in the same area by planting up instead of planting across. Growing these products sustainably means that we avoid depleting natural resources in order to maintain an ecological balance, such as by renewing, reusing and recycling materials in order to lower the overall one-time use of materials. Our facilities utilize "closed loop" irrigation systems that recollect and reuse drain water—including water recycled through reverse osmosis—reducing overall water consumption and helping conserve natural resources. Our advanced systems are also designed to help mitigate contamination from harmful pathogens, including salmonella, e-coli and others.

As of MarchJune 31,30, 2026, we offer more than 140 stock keeping units ("SKUs") spanning two principal product segments: (i) fresh produce, including cut herbs, hydroponic basil, potted herbs, and wheatgrass; and (ii) shelf-stable and refrigerated consumer packaged goods, including sports nutrition and nutraceuticals (Kick.™ and Vitamin Whey®/Vitamin Way®), fermented gourmet sauces and chili-based products (Pulp®), and functional fermented pickles and sauerkraut (Pickle Party™). We also supply products under private label arrangements to major retail customers. We have leveraged our brand recognition to offer co-manufactured consumer-packaged goods across protein, fermented foods, and flavoring categories in addition to our core fresh produce business. Our tagline "Simply Local, Simply Fresh" reflects our strategy of growing products in regional communities close to the retail locations where they are sold, extending shelf life and supporting local brand awareness.

On JanuaryJuly 29,8, 2026, we filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-101-for-45 reverse stock split of its common stock (the “Reverse Stock Split”), effective as of 12:01 a.m. Eastern Time on FebruaryJuly 3,13, 2026. As a result of the Reverse Stock Split, every 1045 shares of our outstanding common stock were combined into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split; any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share. Proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of outstanding warrants and to all then-outstanding awards under our equity incentive plan. The Reverse Stock Split did not change the par value of the common stock or the total number of authorized shares. All share and per share amounts in these condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the Reverse Stock Split, unless otherwise noted.

The Reverse Stock Split was implemented, in part, to help maintainregain compliance with Nasdaq’s continued listing requirements. We were subject to a Panel Monitor, as defined by Nasdaq Listing Rule 5815(d)(4)(A), through April 8, 2026.

During the threesix months ended MarchJune 31,30, 2026, we entered into exchange agreements (the “Exchange Agreements”) with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”) pursuant to which we agreed to exchange an aggregate of 1,9109,781 shares of our Series B Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), for a total of 940,860511,768 shares of our common stock, par value $0.0001 per share (“Exchange Shares”). The Preferred Stock had an aggregate stated value of $1.9$9.7 million. The number of Exchange Shares issued under the Exchange Agreements was determined by dividing the Stated Value by the Nasdaq Minimum Price of our common stock as reported on the Nasdaq Capital Market on the day immediately preceding the date the Exchange Agreements were entered into.into or a value attributed to the Exchange Shares as determined by the Company and Streeterville. The issuance of the Exchange Shares pursuant to the Exchange Agreements were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were conducted pursuant to the exemption provided in Section 3(a)(9) under the Securities Act.

Subsequent to MarchJune 31,30, 2026, we entered into additional Exchange Agreements with Streeterville pursuant to which we agreed to exchange an aggregate of 4,6204,460 shares of the Preferred Stock with an aggregate Stated Value of $4.6$4.5 million for a total of approximately 6,966,6271,394,553 Exchangeshares Sharesof oncommon the same terms described above.stock.

COMPARISON OF THE THREE MONTHS ENDED MARCHJUNE 31,30, 2026 AND 2025

Revenue was $3.3$3.6 million for the three months ended MarchJune 31,30, 2026, compared to $2.7$3.1 million for the three months ended MarchJune 31,30, 2025. The increase in revenue of $623$404 thousand, or 22.9%,12.8%, is primarily attributable to continued growth in our cut herb portfolio across our retail client base, which grew $550$532 thousand, or 46%.50.5%, and increased to approximately 42% of gross sales from approximately 30% in the prior-year period.

Operating expenses were $10.0$6.7 million for the three months ended MarchJune 31,30, 2026, compared to $5.6$6.7 million for the three months ended MarchJune 31,30, 2025. TheOperating increaseexpenses ofdecreased $4.4$12 millionthousand, or 77.5% was0.2%, primarily due to a $859 thousand (21.5%) decrease in selling, general and administrative expenses, reflecting non-recurring professional fees incurred in the prior-year period in connection with certain corporate transactions, partially offset by a $443 thousand (17.6%) increase in cost of goods sold and depreciation expense and amortization. Increase in cost of goods sold was primarilysold, driven by increased sales and a portfolio shift to cut herbs, which is primarily sourced from third party growers at higher cost.cost, Depreciationand expensea $420 thousand (179.5%) increase ofin $2.5depreciation millionand wasamortization, primarilyreflecting duea larger depreciable asset base related to accelerated depreciation of certain fixed assets asacquired afrom resultNatural ofShrimp thein Company’sMay pivot to RTD clean nutrition manufacturing.2025.

Loss from operations werewas $6.7$3.2 million for the three months ended MarchJune 31,30, 2026, compared to $2.9$3.6 million for the three months ended MarchJune 31,30, 2025. The increasedecrease in the loss from operations was driven by an increase in revenue and a decrease in operating expenses, primarily lower selling, general and administrative expenses, partially offset by higher overall expenses across cost of goods sold and depreciation expense, partially offset by an increase in revenue.expense

Interest expense was $150$163 thousand for the three months ended MarchJune 31,30, 2026, compared to $440$389 thousand for the three months ended MarchJune 31,30, 2025. Lower interestInterest expense wasdecreased driven$226 bythousand, loweror overall58.1%, even as total debt outstanding increased, as higher-cost short-term debt balanceswas repaid and replaced with lower-cost Streeterville financing at lowerrates interestof rates.5.0% to 8.0% per annum.

Income tax benefit was $3.4 million for the threesix months ended MarchJune 31,30, 2026. We transferred state tax benefit to a third-party buyer in exchange for a cash consideration and recorded a gain driven primarily due to valuation allowance release.

Net loss was $3.7$6.9 million for the threesix months ended MarchJune 31,30, 2026, compared to a net loss of $3.3$7.4 million for the threesix months ended MarchJune 31,30, 2025. The reasons for the decrease in net loss are explained above.

We have incurred significant losses since our inception. We recognized net losses of approximately $3.7$6.9 million during the threesix months ended MarchJune 31,30, 2026 and $17.3 million during the year ended December 31, 2025. 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.

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 third 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 provided by (operating activities was $0.9 million and the net cash used in) operating activities was $251 thousand and ($3.3)$6.8 million during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Our financial statements have been prepared on a “going concern” basis. However, substantial doubt exists regarding our ability to continue as a going concern for the next twelve months. 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.

There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable to us, if at all. The issuance of additional equity or equity-linked securities by us would result in significant dilution inof the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business as planned and as a result may be required to scale back or cease operations, which could cause our stockholders to lose some or all of their investment in us. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern.

As of MarchJune 31,30, 2026 and December 31, 2025, we had $2.0$0.7 million and $1.1 million in cash and cash equivalents available, respectively. During the threesix months ended MarchJune 31,30, 2026, cash provided by operating activities was $251$0.9 thousand.million. As of MarchJune 31,30, 2026 and December 31, 2025, we had $2.7$14.2 million and $1.9 million of total gross debt outstanding, respectively. As of June 30, 2026, we had cash available for operations of $0.7 million, after excluding $10.0 million of restricted cash securing the Streeterville B Note. Subsequent to June 30, 2026, the Company also entered into the 2026 EDA, providing access to up to $7.2 million of additional capital through an at-the-market offering, which management believes provides an additional source of liquidity. See Note 14, “Subsequent Events,” for further discussion.

In January 2026, we completed the sale of ourcertain New Jersey state net operating lossesloss carryforwards under the New Jersey Economic Development Authority’sAuthority's Technology Business Tax Certificate Transfer ProgramProgram, andwhich receivedhad resulted in a deferred tax asset of approximately $3.4 million, in exchange for gross proceeds of approximately $3.4$3.1 million, resulting in net cash proceeds of approximately $3.0 million after transaction-related costs of approximately $0.1 million.

For more information on our outstanding debt as of MarchJune 31,30, 2026 and December 31, 2025, see Note 7 “Notes Payable.”

During the threesix months ended MarchJune 31,30, 2026, cash provided by operating activities was $251$0.9 thousand.million. During the threesix months ended MarchJune 31,30, 2025, cash used for operating activities was $3.3$6.8 million. For the periodsix months ended MarchJune 31,30, 2026, the net loss of $3.7 million was offset by accelerated depreciation of certain fixed assets related to Company’s pivot to RTD manufacturing of $2.7 million, amortization of operating lease right of use assets related to Natural Shrimp totaling $304 thousand, and working capital decrease of $827 thousand. For the period ended March 31, 2025, the net loss of $3.3$7.0 million was offset by depreciation and amortization expense,of as$3.4 wellmillion, asamortization of operating lease right-of-use assets of $608 thousand, amortization of debt discount totalingof $678$178 thousand, and a net working capital increasesource of $686$3.6 thousand.million.

During the threesix months ended MarchJune 31,30, 2026 and 2025, cash used in investing activities was $104$3.4 thousandmillion and $68$122 thousand, respectively. The increase is related to the cash flow impact from higher capital expenditures related to the Natural Shrimp asset purchase.

During the threesix months ended MarchJune 31,30, 2026 and 2025, cash provided by financing activities was $691$12.0 thousandmillion and $279$6.2 thousand,million, respectively. The increase is driven by $13.5 million of proceeds from debt; $1.5 million related tofrom the Streeterville Note,Note (March 2026) and $12.0 million from the Streeterville Notes A-1 and B (June 2026). The increase was offset by $798$1.5 thousandmillion of debt repayments and $11$22 thousand of lease payments.