Edible Garden achieves 9% revenue increase in Q3 2025, fueled by strategic CPG initiatives and expanding retail presence amid challenging market conditions.

OPERATOR - (00:01:06)

You should grab her. Good morning and welcome to the Edible Garden 2025 Third Quarter Business Update conference call. At this time, all participants are in a listen only mode and the floor will be open for questions following the presentation. If anyone should require operator assistance during the conference, please press 0 on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ted Avas, Investor Relations, Crescendo Communications. Ted, the floor is yours.

Ted Avas - Investor Relations - (00:01:47)

Thanks Jenny. Good morning and thank you for joining Edible Garden's third quarter 2025 earnings conference call and business update. On the call with us today are Jim Kress, Chief Executive Officer of Edible Garden, and Costas Defoulis, Interim Chief Financial Officer of Edible Garden. Earlier this morning, the Company announced its operating results for the three months ended September 30, 2025. The press release is posted on the Company's website, www.ediblegardenag.com. in addition, the Company has filed its Quarterly report on Form 10Q with the U.S. securities and Exchange Commission, which can also be accessed on the Company's website as well as the SEC's website at www.sec.gov. if you have any questions after the call, would like any additional information about the Company, please contact Crescendo Communications at 212-671-1020. Before Mr. Kress reviews the Company's operating results for the quarter ended September 30, 2025 and provides a business update, we would like to remind everyone that this conference call may contain forward looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations are forward looking statements. The words aim, anticipate, believe, could, plan, project, strategy, will and and the negative of such terms, in other words and terms of similar expressions are intended to identify forward looking statements. These forward looking statements are based largely on the Company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short term and long term business operations and objectives, and financial needs. These forward looking statements are subject to several risks, uncertainties and assumptions and as described in the Company's filings with the SEC, including the company's annual report on Form 10K for the year ended December 31, 2024. Because of these risks, uncertainties and assumptions, the forward looking events and circumstances discussed in this conference call may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward looking statements. You should not rely upon forward looking statements as projected as predictions of future events. Although the Company believes that the expectations reflected in the forward looking statements are reasonable, it cannot guarantee future results, level of activity, performance or achievements. In addition, neither the Company nor any other person assumes responsibility for the accuracy and completeness of any of these forward looking statements. The Company disclaims any duty to update any of these forward looking statements except as required by law. All forward looking statements attributable to the Company are expressly qualified in their entirety. By these cautionary statements as well as others made on this conference call, you should evaluate all forward looking statements made by the Company in the context of these risks and uncertainties. Having said that, I'd now like to turn the call over to Mr. Jim Kress, Chief Executive Officer of Edible Garden. Jim.

Jim Kress - Chief Executive Officer - (00:04:51)

Thanks Ted. Good morning and thank you to everyone for joining us today. Third quarter marked an important step forward for Edible Garden as we continued executing our strategic evolution towards a CEA-informed Consumer Packaged Goods or CPG model.. In Q3, traditionally our seasonally softest period. We delivered a 9% year-over-year.. Revenue increase, underscoring our strategic growth driven by our product realignment focus on non-perishable product expansion, and the resilience of our. Higher value branded portfolio.. This growth was driven by key initiatives the continued expansion of our retail footprint, strong performance from our shelf stable portfolio and the early benefits of our operational realignment following the Natural Shrimp asset acquisition. Together, these actions reinforce our progress in repositioning Edible Garden as a next generation sustainable food company that combines innovation, brand strength and operational efficiency. Building on our heritage in fresh herbs and produce where sustainability, traceability and freshness define our brand, we've expanded into categories with stronger margins and greater scalability. Our CPG products, including clean label and Functional offerings, extend the Edible Garden brand beyond fresh produce into shelf stable products that meet consumer demand for Better-for-you plant based nutrition. During the quarter, we continue to expand our retail footprint, launching our USDA Organic Fresh Herb line at Kroger and introducing Edible Garden branded herbs at the Fresh Market. We also strengthened our Midwest presence through partnerships with Pete's Fresh Market and Angelo Caputo's Fresh Markets. Internationally, we expanded our reach through key partners including Pricemart and Amazon. Collectively, these relationships underscore the growing appeal of the Edible Garden brand and the momentum of our expanding global platform. Demand for Better-for-you CPG products continues to accelerate, creating a powerful tailwind for our business. Globally, The functional food and beverage market is projected to expand from approximately 400 billion to 610 billion by 2030, according to Virtue Market Research.. In the U.S. sales of natural, organic and functional products are expected to reach 386 billion by 2028, according to the Nutrition Business Journal.. These trends reinforce the strength of our strategy and highlight the significant opportunity ahead for Edible Garden as we align our product portfolio with these macro trends. Our CPG portfolio continues to be an important driver of growth. Anchored by brands such as Kick, Sports Nutrition, Pickle Party, Pulp and Vitamin Whey, these brands represent a key pillar of our transformation into a diversified, innovation driven CPG company and highlight the versatility of edible gardens platform KX Sports Nutrition continues to build momentum with a clean, better for you performance line designed for athletes and active consumers seeking natural energy and recovery solutions. The brand is gaining meaningful, meaningful traction across both online and retail channels, supported by rising consumer interest in Plant Plant Forward Performance Nutrition. Earlier this year, KIK entered a major Midwest big box retailer, expanding its brick and mortar presence while growing online footprint to broaden awareness and engagement. By leveraging our expertise in clean, functional ingredients, Kik delivers products that combine taste, convenience and nutritional value attributes that resonate strongly with the fast growing health and wellness segment. Vitamin Whey Our protein and supplement line complements Kik by addressing the broader market for functional nutrition. Pickle Party highlights the engaging flavor forward side of our CPG strategy, offering a line of fresh fermented pickles and sauerkraut crafted with clean label, non GMO ingredients and natural fermentation. The brand combines bold, craveable flavors with a focus on gut health and sustainability, striking a balance between indulgence and wellness. Its distinctive identity as both fun and functional continues to resonate with younger consumers and health conscious shoppers seeking better for you alternatives in the condiment aisle. Finally, Pulp, our line of organic refrigerated fermented hot sauces continues to expand through new retail placements and regional growth. The brand has gained meaningful traction through rollouts at Target, Meijer and most recently at shoprite, further broadening its reach and consumer visibility. Pulp brings culinary innovation to the forefront of the edible garden portfolio, offering bold, clean label condiments that reflect our commitment to flavor, sustainability and the better for you principles driving today's consumer demand. Collectively, these brands showcase how we're leveraging our expertise in sustainability, flavor and functional nutrition to build a high margin scalable portfolio that extends the Edible Garden brand far beyond fresh produce and positions us to capture meaningful share in the growing, clean, labeled CPG market. Turning to our produce business, we remain a trusted provider of sustainable, sustainably grown herbs and leafy greens. Our new organic program with Kroger is gaining traction while our presence at the Fresh Market and established retail partners including Peet's Market, Angelo's, Computo's Fresh Markets continues to broaden retail penetration and increase brand visibility across key markets. Operationally, we've strengthened our platform for growth through enhanced efficiency and scalability. Innovation and sustainability remain central to our strategy. Guided by our zero waste inspired approach, we're pursuing new categories including nutraceuticals, sustainable proteins and functional foods that align with our commitment to health, flavor and environmental responsibility as we move into the fourth quarter beyond we believe that Obelgarden is positioned for continued growth. Our focus remains on discipline, disciplined execution, expanding retail partnerships and advancing product innovation to build long term shareholder value. I'm extremely proud of our team. Their dedication and commitment to quality, sustainability and innovation have been instrumental in driving our progress and momentum heading into year end. With that, I'll turn the call over to Costas Defoulis, our interim cfo, who will review the financial results for the quarter ended September 30, 2025.

Costas Defoulis - (00:11:27)

Costas thanks Jim and good morning everyone. Revenue for the quarter increased 9% to 2.8 million compared to 2.6 million in the third quarter of 2024. Our strategic exit from the floral and lettuce category is now complete. This quarter reflects the strength and resilience of our repositioned portfolio. The growth of 0.2 million or 9% was primarily driven by strong performance across our shelf stable product portfolio including Kick, Sports, Nutrition, vitamin whey pulp and Pickle Party. Specifically, this portfolio grew 54% year over year in Q3. In our core herb portfolio, we saw strength in hydro basil up 21% year over year and wheat grass up 59% year over year. Gross profit totaled approximately 0.3 million compared to 0.7 million in the prior year quarter, reflecting higher labor, freight and raw material costs as well as inflationary pressures within the nutraceutical supply chain. Selling general and Administrative expenses were 3.8 million compared to 2.2 million in the same period last year, primarily due to expenses related to the assets purchased from natural Shrimp and the associated depreciation, legal audit and accounting expenses. Net loss was 4 million compared to a net loss of 2.1 million in the third quarter of 2024. We ended the quarter with 0.8 million in cash and equivalents compared to 3.5 million at year end 2024. Furthermore, the company refinanced its outstanding debt, securing a lower interest rate and more favorable terms. This refinancing is expected to reduce annual interest expense and reduce financing cash outflows, providing greater flexibility to support the company's strategic initiatives and growth objectives. We continue to manage working capital with discipline, optimizing inventory turnover through improved production planning and distribution efficiency. At the same time, we are diversifying our sources of liquidity at a lower cost of capital to ensure that we have the flexibility to act decisively on strategic opportunities as they arise. With that, I will open the call for any questions.

OPERATOR - (00:13:54)

Thank you very much. We are now opening the floor for questions. If you would like to ask a question, Please press Press Star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the queue. You may press Star two if you would like to remove your question from the queue. For anyone using speaker equipment, it may be necessary to pick up your handset before you press the keys. Please wait a moment whilst we poll for questions. Thank you. Our first question is coming from Anthony Vendetti of the Maxim Group. Anthony, your line is live.

Anthony Vendetti - Equity Analyst - (00:14:31)

Thank you. Just in terms of the natural shrimp facility that you acquired, can you talk about the build-out of that. How. You intend to utilize that initially and then over the next six to 12 months and then what specific product lines will be going in there? Any color on that would be helpful. Thanks. Sure.

Jim Kress - Chief Executive Officer - (00:15:00)

Anthony, good morning, how are you? Thanks for being on the call.

Jennifer - (00:15:03)

Thanks Jennifer.

Jim Kress - Chief Executive Officer - (00:15:04)

Well, first of all it's an impressive facility. So 6.2 acres,. It's about an hour from Des Moines Airport. It's right there in the center of the country and gives us access to all types of different raw materials and whatnot to do all types of products, some of which we've already started. Our near term plan is actually the facility is going through a GAP analysis. Right now with third party. We will be doing some R and. D for next generation products, whether they're. Nutraceuticals or. Food is sort of in. The works right now. We have some major opportunities with our retailers. One of the great things about Edible Garden, and there are many, is that we have significant relationships with major retailers and being on trend with the type of products that we're offering. Clean, labeled, fermented. All those products that we are currently pushing out are only growing in demand as people are focusing on having less processed product. And Walmart for example just came out and said within the last month that they're mandating their suppliers of their private label to remove all artificial colors and dyes and sweeteners from their products. Something Edible Garden's been doing for the. Last year and then some. The fact that we are growers and we grow the actual raw ingredients, plants that go into many of these products and can harvest some of the therapeutics without additives and without artificial dyes or colors or things that just aren't really needed. That trend, we're at the forefront and we're doing in line with sustainability. So to answer your question, we're getting. Asked by major companies to come in, work on their private label products, many of which I think will go into Harland, which I think will be an incredible nutritional hub and sustainability hub in that part of the country. And we couldn't be more excited. Timing and happenstance sometimes work to advantage. And I think we're just at that intersection of having the ability, the right products at the right time. Now we're going to have the right vertical integration. to deliver on it. And I couldn't be more excited. It's all come together quite well and I think a lot of it's really. The team as well. I want to give the people that work with us quite a bit of credit because it's been, it's been a big effort here to not only tool up with the facilities that we currently have, but to get focused, get efficient, let some of the business that we knew that was a drag on the business kind of go and kind of bite the bullet the previous quarters a little bit. But we're back on track and Q4 is always a strong season for us and we're excited about that. Looks great. We're in the heat of the battle battle right now with Thanksgiving, which is our Super Bowl once again. Kroger, Fresh Market, shoprite, they're all coming to us not only for our branded. Product, but some of these other innovative. Things that we're doing. And I think Edible Garden Prairie Hills Which is what we named Iowa will, I think,, be at the forefront of driving that innovation and volume for us, frankly.

Anthony Vendetti - Equity Analyst - (00:18:45)

Okay, so just to follow up, it sounds like the big grocery stores in particular, are where the largest opportunity is. Would you say that's also the largest opportunity? Moving into 26, it's the Shoprites, the Krogers, the Fresh Market, these bigger grocery chains. Where you see the most opportunity in 2026.

Jim Kress - Chief Executive Officer - (00:19:12)

I see. Yes, look, I see our core business. Is that we're a business that has excelled in produce. Many have failed. Whether established companies have been around for quite some time or, you know, upstarts that came in sort of kind of. Drafting us and kind of, you know. Spinning a similar story. I mean, we're one of the last standing and we're, you know, and we're accelerating the business. So, yes, what's happening is not only. Is it our produce business, it's the. Existing branded business that we have in. There, whether it's kick sports, nutrition or Pickle Party. Then there's private label. We have a substantial private label business. Currently with key players like Meijer. And we're getting asked to do more. Of the next generation products from the likes of the big box retailers coming. To us and saying, all right, we love what you're doing, you're on trend. The current political environment is pushing for less processed foods. Research is coming back and saying, as such, what can you do for us under our label? We like what you're doing. We can do some in your label. A lot of it's being driven by these big box retailers saying, hey, you know, private label is such a powerhouse now. What can you do to sort of allow us to be in step with. You with these innovations and have those offerings out on our shelves as quickly as possible? So 2026 is going to be a great year. And yeah, it's going to be driven by retailers kind of coming to us and saying, hey, what can you do for us? Because we like what you're doing and we want more of what you have. It's a great place to be and it doesn't always happen. I think timing is just on our side and a lot of it's just. Driven by who we are, what we've. Been doing for the last decade. It might end up looking like overnight. Success, but ultimately it's been 10 years in the work to get to this place.

Anthony Vendetti - Equity Analyst - (00:21:08)

So on the margin side, Jim, so you. So obviously, you know, if sometimes private label is tougher to get a larger margin on, but if they're asking for, you know, the natural products, you know, the ones with less additives, that's like you said, that's right in your wheelhouse. Are you able to push back and say, look, yeah, we can do that for you, but you know, those are higher priced products, you know, and then, and then maybe talk about the margin related to that as well as your Kick program, you know, the protein, you know, how's that doing and what do you see the outlook for that in 26?

Jim Kress - Chief Executive Officer - (00:21:57)

So I think on the private label. Piece, yes, to a certain extent I think you can. I think some of it's also sort of like modulating the words that we use. Right. So I think demand is a strong word. I don't think you when you're edible garden. We're a smaller company that's nimble and can move quickly and that I've always told my crew that we're a customer service company that makes things. I think that's bode well for us because we are quick to respond. I would tell you that I think that the margin, there's opportunity to have a fair margin but what you're getting is volume. You're going to get contracts, you're going to get consistent volume. You're going to have a relationship with major retailers that like we have currently with, like I said, some key retailers now that we're doing private label where you build on that. So yes, there's the margin play but there's the additional products. There's a deeper relationship and it's long term. Most private label, I mean all private labels, you know, private label relationships come with a contract and contract to business and you know, and commitments to take a certain base amount of product, you can call it an offtake agreement is key and it's key to the business. It gives us security that we know we can support the facilities. It also gives us visibility down the. Road for, you know, for a long. Period of time that we know that. We, as long as we don't do. Anything that's catastrophic to the business or there's a black swan event, we are in business with a major retailer making something that has their label on it that's got upside. There is that pushback that will allow you to say, hey, you guys are getting this first. We're putting the focus of the company on this and the idea is you're going to get all this. This is how you grow the business, frankly. Ideally you have a blend, you have a blend of retailers private label and then you have obviously your branded products and then maybe you even make stuff for other brands that have command a. Higher margin and that kind of gives. You a blended margin on the manufacturing. That's where we're going with Iowa with some of the new products that I can't disclose but that we're going to be putting in there that are going to be offer significant upside. And I think another question regarding kick. I don't know if I answered that or.

Anthony Vendetti - Equity Analyst - (00:24:35)

Yeah, I don't think I. Yeah, so. So let's say so, you know, maybe it's. It's okay, you know what you want. Guaranteed product availability of, you know, certain products that are private label that maybe aren't as high margin, but, you know, we'll, we'll provide that to you, but you know, alongside that. Yeah, you know, you have to, you have to take our higher margin protein product, even if you're in somebody else's or you have to take somebody, you know, some of our branded products as well.

Jim Kress - Chief Executive Officer - (00:25:06)

There's some of that. There's some of that.

Anthony Vendetti - Equity Analyst - (00:25:08)

Okay.

Jim Kress - Chief Executive Officer - (00:25:09)

Yeah, yeah, there's some of that. I mean, you know, look, it's business, right? And it's not an exact science. And it's in everybody's best interest to support, especially if you're a major retailer. I mean, pick one and whoever it. Is, it could be cvs, I don't know, you know, somebody who, let's say we're doing a nutraceutical product, for example, for them. You know that it's usually a two or three year sort of contract, sometimes longer. We're going to push for the longest ones possible. And yeah, I mean, they realize it's. In their best interest to support the. Company because it takes time to tool up. I think when you look at a facility like Iowa and the things that. We'Re looking to do that takes. We've already started spending money on getting. The place up and running last quarter and we'll continue to get the place ready for primetime. These retailers, they understand it's in their. Best interest to put other products in, maybe your branded product or a higher margin private label that they know that will help underwrite maybe the higher volume, lower margin business that they want to compete in. So, you know, those are the type of strategic conversations that we're having at multiple major retailers. And, you know, you're already starting to see some of that come to fruition and you will see more as we move forward into 2026. So, yeah, there is that type of relationship. You know, it's like anything else. It's, you know, it's, you got to have, you got to have something that they want and you got to work hard with them. There's a whole certification process and there are. People come in and inspect everything and, but we've gotten pretty good at it and we got a great crew, so I couldn't be more excited. But yeah, so, yeah, that's definitely the way that it should go. Not everybody does that, but they should work with you understanding it's in their best interest to help give you some fuel to build out the business. You can't just rely on us to bring in our own capital. Some of that's got to be cushioned. With products that they know that are established, that they give to us, that, you know, allow us to offset. So sorry that was so long winded. But yeah, yeah, yes, I guess, yes. There is that opportunity. Did I answer your kick question, Anthony? I don't know if I did or not.

Anthony Vendetti - Equity Analyst - (00:27:32)

Yeah, no, that. Yep, that was good. Thanks so much. I'll hop back in the queue. Appreciate it.

Jim Kress - Chief Executive Officer - (00:27:38)

All right. Thank you, Anthony.

OPERATOR - (00:27:41)

Thank you very much. Just a reminder there, if there are any further questions, you can still join the queue by pressing star1 on your phone keypad. Now wait to see if anybody else jumps into the queue. Okay, I'm not seeing any further questions in the queue, so I will now hand back over to the management team for any closing comments.

Jim Kress - Chief Executive Officer - (00:28:10)

Thanks again to everyone for joining us today. Third quarter was another important step forward for Edible Garden. We're executing our strategy with focus, expanding our retail reach, growing our higher margin CPG brands and strengthening our operations to support scalable, profitable growth. Momentum continues across Kick Sports Nutrition, Pickle Party Pulp and Vitamin Whey. These brands show that our approach is working and that consumers are responding to clean label, better for you products. At the same time, our core produce business remains strong, grounded in freshness, sustainability and quality. As we approach year end, our priorities are clear. Continue executing at a high level, advance our innovation pipeline and deliver lasting value for our shareholders. We're excited about where we're heading and look forward to sharing more of our progress in the months ahead. Thank you.

OPERATOR - (00:29:06)

Thank you very much. This does conclude today's conference. You may disconnect your phone lines at this time and have a wonderful day and a wonderful weekend. We thank you for your participation