Edible Garden Announces Pricing of $5.65 Million Public Offering

Rhea-AI Summary

Edible Garden AG Incorporated (Nasdaq: EDBL), a leader in controlled environment agriculture, has announced the pricing of a $5.65 million public offering. The offering includes 15,700,650 shares of common stock (or pre-funded warrants), along with Class A and Class B warrants to purchase additional shares. The combined public offering price is set at $0.36 per share (or $0.35 per pre-funded warrant) with accompanying warrants.

The warrants have an exercise price of $0.36 per share and will be immediately exercisable. Class A warrants expire in five years, while Class B warrants expire in 18 months. The offering is expected to close around September 30, 2024, subject to customary conditions. Maxim Group is acting as the sole placement agent for this offering.

Positive

• Raised $5.65 million in gross proceeds through public offering
• Offering includes both common stock and warrants, providing flexibility for investors
• Warrants are immediately exercisable, potentially providing additional capital if exercised

Negative

• Potential dilution of existing shareholders due to issuance of new shares and warrants
• Offering price of $0.36 per share may be lower than current market price, potentially impacting stock value

Insights

Financial Analyst

Edible Garden's $5.65 million public offering is a significant move for a company with a market cap of just $1.58 million. This substantial capital raise, more than tripling the company's current market value, suggests a major expansion or restructuring effort. The offering structure, combining common stock with two classes of warrants, is complex and potentially dilutive.

The pricing at $0.36 per share represents a 77% discount to the previous closing price of $1.58, which is likely to put significant downward pressure on the stock. The immediate exercisability of the warrants at the offering price could lead to further dilution if exercised.

While the capital infusion could provide much-needed funds for growth initiatives in the controlled environment agriculture sector, the terms of this offering are highly unfavorable for existing shareholders. The company's ability to effectively utilize this capital to generate returns that offset the dilution will be important for long-term value creation.

Market Research Analyst

The controlled environment agriculture (CEA) sector, where Edible Garden operates, is experiencing rapid growth due to increasing demand for locally grown, organic produce. However, this offering highlights the challenges faced by smaller players in capital-intensive industries.

The substantial discount and warrant structure suggest investor hesitancy, possibly due to concerns about the company's financial position or growth prospects. This could indicate broader market skepticism about the profitability of CEA companies at this scale.

The timing of this offering, amidst volatile market conditions, may reflect urgency in securing funding. It will be important to monitor how Edible Garden allocates this capital to differentiate itself in a competitive market. The success of this strategy could have implications for investor sentiment towards other small-cap CEA companies and the sector's overall funding environment.

BELVIDERE, N.J., Sept. 27, 2024 (GLOBE NEWSWIRE) -- Edible Garden AG Incorporated (“Edible Garden” or the “Company”) (Nasdaq: EDBL, EDBLW), a leader in controlled environment agriculture (CEA), locally grown, organic, and sustainable produce and products, today announced the pricing of a public offering of an aggregate of 15,700,650 shares of its common stock (or pre-funded warrants in lieu thereof), Class A warrants to purchase up to 15,700,650 shares of common stock, and Class B warrants to purchase up to 15,700,650 shares of common stock, at a combined public offering price of $$0.36 per share (or $0.35 per pre-funded warrant) and accompanying warrants. The warrants will have an exercise price of $0.36 per share, will be exercisable immediately upon issuance. The Class A warrants will expire on the fifth anniversary of the original issuance date, and the Class B warrants will expire on the eighteen-month anniversary of the original issuance date. The closing of the offering is expected to occur on or about September 30, 2024, subject to the satisfaction of customary closing conditions. Gross proceeds, before deducting placement agent fees and offering expenses, are expected to be approximately $5.65 million.

Maxim Group LLC is acting as sole placement agent in connection with this offering.

The securities described above are being offered pursuant to a registration statement on Form S-1, as amended (File No. 333-281957), which was declared effective by the Securities and Exchange Commission (the "SEC") on September 27, 2024. The offering is being made only by means of a prospectus which is a part of the effective registration statement. A preliminary prospectus relating to the offering has been filed with the SEC. Copies of the final prospectus relating to this offering, when available, will be filed with the SEC and may be obtained from Maxim Group LLC, 300 Park Avenue, 16^th Floor, New York, NY 10022, at (212) 895-3745.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Edible Garden®

Edible Garden AG Incorporated is a leader in controlled environment agriculture (CEA), locally grown, organic and sustainable produce and products backed by Zero-Waste Inspired® next generation farming. Offered at over 5,000 stores in the US, Edible Garden is disrupting the CEA and sustainability technology movement with its safety-in-farming protocols, use of sustainable packaging, patented GreenThumb software and self-watering in-store displays. The Company currently operates its own state-of-the-art greenhouses and processing facilities in Belvidere, New Jersey and Grand Rapids, Michigan, and has a network of contract growers, all strategically located near major markets in the U.S. Its proprietary GreenThumb 2.0 patented (US Nos.: US 11,158,006 B1, US 11,410,249 B2 and US 11,830, 088 B2) software optimizes growing in vertical and traditional greenhouses while seeking to reduce pollution-generating food miles. Its proprietary patented (U.S. Patent No. D1,010,365) Self-watering display is designed to increase plant shelf life and provide an enhanced in-store plant display experience. Edible Garden is also a developer of ingredients and proteins, providing an accessible line of plant and whey protein powders under the Vitamin Way® and Vitamin Whey® brands. In addition, the Company offers a line of sustainable food flavoring products such as Pulp gourmet sauces and chili-based products. For more information on Edible Garden go to https://ediblegardenag.com/.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks, uncertainties and assumptions that are difficult to predict including the timing of closing the offering. The words “expect,” “may,” “seeking,” “will,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including market and other conditions, the Company’s ability to achieve its growth objectives, and other factors set forth in the Company’s filings with the Securities and Exchange Act Commission, including the Company’s annual report on Form 10-K for the year ended December 31, 2023 and subsequent quarterly reports. Actual results might differ materially from those explicit or implicit in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The Company undertakes no obligation to update any such forward-looking statements after the date hereof to conform to actual results or changes in expectations, except as required by law.

Investor Relations Contact:

Crescendo Communications, LLC

212-671-1020

EDBL@crescendo-ir.com

FAQ

What is the size of Edible Garden's (EDBL) public offering announced on September 27, 2024?

Edible Garden announced a public offering with expected gross proceeds of approximately $5.65 million.

How many shares and warrants are included in Edible Garden's (EDBL) September 2024 offering?

The offering includes 15,700,650 shares of common stock (or pre-funded warrants), along with Class A and Class B warrants to purchase up to 15,700,650 shares each.

What is the pricing of Edible Garden's (EDBL) public offering announced in September 2024?

The combined public offering price is $0.36 per share (or $0.35 per pre-funded warrant) with accompanying warrants.

When is the expected closing date for Edible Garden's (EDBL) September 2024 public offering?

The offering is expected to close on or about September 30, 2024, subject to customary closing conditions.