# EDGAR Filing Document

**Accession Number:** 0001809750
**File Stem:** 0001477932-23-001887
**Filing Date:** 2023-3
**Character Count:** 410811
**Document Hash:** aec3bf1442c3c5acbeecf2a5f164ac57
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001477932-23-001887.hdr.sgml**: 20230329

**ACCESSION NUMBER**: 0001477932-23-001887

**CONFORMED SUBMISSION TYPE**: POS AM

**PUBLIC DOCUMENT COUNT**: 95

**FILED AS OF DATE**: 20230329

**DATE AS OF CHANGE**: 20230329

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Edible Garden AG Inc
- **CENTRAL INDEX KEY:** 0001809750
- **STANDARD INDUSTRIAL CLASSIFICATION:** AGRICULTURE PRODUCTION - CROPS [0100]
- **IRS NUMBER:** 850558704
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** POS AM
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-268800
- **FILM NUMBER:** 23775313

**BUSINESS ADDRESS:**
- **STREET 1:** 283 COUNTY ROAD 519
- **CITY:** BELVIDERE
- **STATE:** NJ
- **ZIP:** 07823
- **BUSINESS PHONE:** 908-750-3953

**MAIL ADDRESS:**
- **STREET 1:** 283 COUNTY ROAD 519
- **CITY:** BELVIDERE
- **STATE:** NJ
- **ZIP:** 07823

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Edible Garden Inc
- **DATE OF NAME CHANGE:** 20200415

?xml version='1.0' encoding='ASCII'? edbl_posam.htm

As filed with the Securities and Exchange Commission on March 29, 2023.

**Registration No. 333-268800&nbsp;&nbsp;&nbsp;&nbsp;** 

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**POST-EFFECTIVE AMENDMENT NO**. 1

TO

**FORM S-1**

**REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933**

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| **EDIBLE GARDEN AG INCORPORATED** |
| (Exact name of registrant as specified in its charter) |

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| **Delaware** | **100** | **85-0558704** |
| (State or other jurisdiction of <br>incorporation or organization) | (Primary standard industrial <br>classification code number) | (I.R.S. employer <br>identification number) |

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**283 County Road 519**

**Belvidere, NJ 07823**

**<u>(908) 750-3953</u>**

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

**James E. Kras** 

**Chief Executive Officer**

**283 County Road 519**

**Belvidere, NJ 07823**

**<u>(908) 750-3953</u>**

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

**Alexander R. McClean, Esq.**

**Margaret K. Rhoda, Esq.**

**Harter Secrest & Emery LLP** 

**1600 Bausch & Lomb Place** 

**Rochester, NY 14604** 

**Tel: (585) 232-6500**

**Fax: (585) 232-2152**

**Approximate date of commencement of proposed sale to the public:** From time to time after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

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| Large accelerated filer  | ☐ | Accelerated filer  | ☐ |
| Non-accelerated filer  | ☒ | Smaller reporting company  | ☒ |
|  |  | Emerging growth company  | ☒ |

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

**The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.**

**EXPLANATORY NOTE**

Edible Garden AG Incorporated (the "Company") previously filed a registration statement on Form S-1 (File No. 333-268800) with the Securities and Exchange Commission ("SEC") that was declared effective on February 2, 2023 (the "Registration Statement"). This Registration Statement, as amended by this Post-Effective Amendment No. 1 (the "Amendment"), relates solely to the issuance by the Company of 1,942,800 shares of common stock underlying warrants to purchase common stock. The Company is filing this Amendment to update the financial statements and to update and supplement the other information contained in the Registration Statement with the information contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, that was filed with the SEC on March 22, 2023.

No additional securities are being registered under this Amendment. All applicable registration fees were paid at the time of the original filing of the Registration Statement.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

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| **PRELIMINARY PROSPECTUS** | SUBJECT TO COMPLETION, <br>DATED MARCH 29, 2023 |

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**EDIBLE GARDEN AG INCORPORATED**

**1,942,800 Shares of Common Stock Underlying Previously Issued Warrants**

This prospectus relates to the issuance of up to 1,942,800 shares of our common stock, par value $0.0001 per share ("common stock"), upon the exercise of certain warrants that we previously issued in a registered public offering (the "Follow-On Offering"). The warrants include: (i) warrants issued as part of a unit in the Follow-On Offering that are exercisable until February 7, 2028 at an exercise price of $6.30 per share for up to 1,861,850 shares of common stock ("Investor Warrants"); and (ii) warrants issued to the representative of the underwriters in the Follow-On Offering that are exercisable until February 2, 2028 at an exercise price of $6.93 per share for up to 80,950 shares of common stock ("Representative's Warrants"). If the Investor Warrants and the Representative's Warrants were exercised for cash, we would receive approximately $12.3 million. To the extent any of the warrants are exercised on a "cashless" basis, we will not receive any cash proceeds from the exercise.

Our common stock is listed on the Nasdaq Capital Market ("Nasdaq") under the symbol "EDBL." The closing price of our common stock on Nasdaq on March 24, 2023 was $2.21 per share.

&nbsp;&nbsp;&nbsp;&nbsp;

On January 26, 2023 at 12:01 A.M. Eastern Time, we effected a reverse stock split of our common stock at a ratio of 1-for-30. Unless otherwise noted, the share and per share information in this prospectus reflects the effect of the reverse stock split.

We are an "emerging growth company," as defined under the federal securities laws and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See "Prospectus Summary - Implications of Being an Emerging Growth Company and Smaller Reporting Company."

**Investing in our securities is speculative and involves a high degree of risk. You should carefully consider the risk factors beginning on page 7 of this prospectus before purchasing our securities.** 

**Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.**

The date of this prospectus is _________, 2023

**TABLE OF CONTENTS**

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| [PROSPECTUS SUMMARY](#pr) | 1 |
| [THE OFFERING](#th) | 5 |
| [RISK FACTORS](#ri) | 7 |
| [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](#ca) | 22 |
| [USE OF PROCEEDS](#use) | 23 |
| [DIVIDEND POLICY](#divi) | 23 |
| [DILUTION](#dil) | 23 |
| [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#management) | 25 |
| [BUSINESS](#bus) | 32 |
| [MANAGEMENT](#mngt) | 44 |
| [EXECUTIVE AND DIRECTOR COMPENSATION](#exe) | 48 |
| [CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS](#cer) | 50 |
| [SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT](#sec) | 51 |
| [DESCRIPTION OF SECURITIES](#desc) | 52 |
| [UNDERWRITING](#UNDERWRITING) |  |
| [LEGAL MATTERS](#lega) | 57 |
| [EXPERTS](#expert) | 57 |
| [WHERE YOU CAN FIND MORE INFORMATION](#wh) | 58 |

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You should rely only on the information contained in this prospectus and in any free writing prospectus. We and the underwriters have not authorized anyone to provide you with information different from that contained in this prospectus. We and the underwriters are offering to sell, and seeking offers to buy, our securities only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our securities.

Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our securities and the distribution of this prospectus outside of the United States.

We own or have rights to trademarks or trade names that we use in connection with the operation of our business, including our corporate names, logos and website names. In addition, we own or have the rights to copyrights, trade secrets and other proprietary rights that protect the content of our products. This prospectus may also contain trademarks, service marks and trade names of other companies, which are the property of their respective owners. Our use or display of third parties' trademarks, service marks, trade names or products in this prospectus is not intended to, and should not be read to, imply a relationship with or endorsement or sponsorship of us. Solely for convenience, some of the copyrights, trade names and trademarks referred to in this prospectus are listed without their <sup>©</sup>, <sup>®</sup> and <sup>™</sup> symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trade names and trademarks. All other trademarks are the property of their respective owners.

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| *[**Table of Contents**](#toc)* |

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| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>**PROSPECTUS SUMMARY**<br>*The following summary highlights information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. Before you decide to invest in our securities, you should read and carefully consider the following summary together with the entire prospectus, including our financial statements and the related notes thereto and the matters discussed in the sections in this prospectus entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business." Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the "Risk Factors" and other sections of this prospectus. In this prospectus, unless otherwise stated or the context otherwise requires, references to "Edible Garden," the "Company," "we," "us," "our," or similar references mean Edible Garden AG Incorporated and its subsidiaries on a consolidated basis.* <br>**Our Company** <br>Edible Garden is 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 use the controlled environment of traditional greenhouse structures, such as glass greenhouses, together with hydroponic and vertical greenhouses to sustainably grow organic herbs and lettuces. In our hydroponic greenhouse, we grow plants without soil. Instead of planting one row of lettuce in the ground, by using a vertical greenhouse, we can grow many towers of lettuce 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. <br>Our controlled greenhouse facilities allow us to grow consistent quality herbs and lettuces year-round, first by eliminating some of the variability of outdoor farming with our CEA techniques, and second by leveraging our proprietary software, GreenThumb. In addition to using hydroponic and vertical greenhouse systems, we use a "closed loop" system in our greenhouses. Generally, in a "closed loop" system, drain water is recollected and reused for irrigation. In our closed loop system, we also cycle water back into the system that has been collected through reverse osmosis. When compared to conventional agriculture, our closed looped systems and hydroponic methods use less land, less energy and less water (than legacy farms), thus conserving some of the planet's limited natural resources. Our advanced systems are also designed to help mitigate contamination from harmful pathogens, including salmonella, e-coli and others. <br>We have also developed patented software called GreenThumb that assists in tracking plants through our supply chain. Utilizing our GreenThumb software to track the status of our plants as they grow and move throughout the greenhouse allows us to add a layer of quality control due to the frequent monitoring of the growing process, leading to improved traceability. In this context, traceability means being able to track a plant through all stages of production and distribution. In addition to improving traceability, GreenThumb helps us better manage the day-to-day operations of our business. GreenThumb is a web-based greenhouse management and demand planning system that does the following: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>**PROSPECTUS SUMMARY**<br>*The following summary highlights information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. Before you decide to invest in our securities, you should read and carefully consider the following summary together with the entire prospectus, including our financial statements and the related notes thereto and the matters discussed in the sections in this prospectus entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business." Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the "Risk Factors" and other sections of this prospectus. In this prospectus, unless otherwise stated or the context otherwise requires, references to "Edible Garden," the "Company," "we," "us," "our," or similar references mean Edible Garden AG Incorporated and its subsidiaries on a consolidated basis.* <br>**Our Company** <br>Edible Garden is 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 use the controlled environment of traditional greenhouse structures, such as glass greenhouses, together with hydroponic and vertical greenhouses to sustainably grow organic herbs and lettuces. In our hydroponic greenhouse, we grow plants without soil. Instead of planting one row of lettuce in the ground, by using a vertical greenhouse, we can grow many towers of lettuce 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. <br>Our controlled greenhouse facilities allow us to grow consistent quality herbs and lettuces year-round, first by eliminating some of the variability of outdoor farming with our CEA techniques, and second by leveraging our proprietary software, GreenThumb. In addition to using hydroponic and vertical greenhouse systems, we use a "closed loop" system in our greenhouses. Generally, in a "closed loop" system, drain water is recollected and reused for irrigation. In our closed loop system, we also cycle water back into the system that has been collected through reverse osmosis. When compared to conventional agriculture, our closed looped systems and hydroponic methods use less land, less energy and less water (than legacy farms), thus conserving some of the planet's limited natural resources. Our advanced systems are also designed to help mitigate contamination from harmful pathogens, including salmonella, e-coli and others. <br>We have also developed patented software called GreenThumb that assists in tracking plants through our supply chain. Utilizing our GreenThumb software to track the status of our plants as they grow and move throughout the greenhouse allows us to add a layer of quality control due to the frequent monitoring of the growing process, leading to improved traceability. In this context, traceability means being able to track a plant through all stages of production and distribution. In addition to improving traceability, GreenThumb helps us better manage the day-to-day operations of our business. GreenThumb is a web-based greenhouse management and demand planning system that does the following: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>**PROSPECTUS SUMMARY**<br>*The following summary highlights information contained elsewhere in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our securities. Before you decide to invest in our securities, you should read and carefully consider the following summary together with the entire prospectus, including our financial statements and the related notes thereto and the matters discussed in the sections in this prospectus entitled "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business." Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the "Risk Factors" and other sections of this prospectus. In this prospectus, unless otherwise stated or the context otherwise requires, references to "Edible Garden," the "Company," "we," "us," "our," or similar references mean Edible Garden AG Incorporated and its subsidiaries on a consolidated basis.* <br>**Our Company** <br>Edible Garden is 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 use the controlled environment of traditional greenhouse structures, such as glass greenhouses, together with hydroponic and vertical greenhouses to sustainably grow organic herbs and lettuces. In our hydroponic greenhouse, we grow plants without soil. Instead of planting one row of lettuce in the ground, by using a vertical greenhouse, we can grow many towers of lettuce 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. <br>Our controlled greenhouse facilities allow us to grow consistent quality herbs and lettuces year-round, first by eliminating some of the variability of outdoor farming with our CEA techniques, and second by leveraging our proprietary software, GreenThumb. In addition to using hydroponic and vertical greenhouse systems, we use a "closed loop" system in our greenhouses. Generally, in a "closed loop" system, drain water is recollected and reused for irrigation. In our closed loop system, we also cycle water back into the system that has been collected through reverse osmosis. When compared to conventional agriculture, our closed looped systems and hydroponic methods use less land, less energy and less water (than legacy farms), thus conserving some of the planet's limited natural resources. Our advanced systems are also designed to help mitigate contamination from harmful pathogens, including salmonella, e-coli and others. <br>We have also developed patented software called GreenThumb that assists in tracking plants through our supply chain. Utilizing our GreenThumb software to track the status of our plants as they grow and move throughout the greenhouse allows us to add a layer of quality control due to the frequent monitoring of the growing process, leading to improved traceability. In this context, traceability means being able to track a plant through all stages of production and distribution. In addition to improving traceability, GreenThumb helps us better manage the day-to-day operations of our business. GreenThumb is a web-based greenhouse management and demand planning system that does the following: |
|  | ·  | integrates in real-time with our cloud business software suite for monitoring daily sales data; |
|  | ·  | generates reports by category, product, customer, and farm to allow us to analyze sales, trends, margins and retail shrink (spoiled product); |
|  | ·  | provides dynamic pallet mapping for packout, which enables us to more efficiently ship our products; |
|  | ·  | utilizes a proprietary algorithm that uses year-over-year and trending sales data to develop customer specific and aggregate product specific forecasting for our greenhouses; |
|  | ·  | aggregates all greenhouse activity input to provide real-time inventory and availability reports of all products in our greenhouses;<br>|

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| ·  | manages our online ordering system with user controlled product availability based upon greenhouse inventory; |
| ·  | provides a route management system for coordinating the logistics of our direct store delivery program; and |
| ·  | tracks all production activities at greenhouses, including sowing, spacing, dumping, spraying, picking and packing, using hand held devices. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also use our GreenThumb software to help monitor the quality of our products, and we have dedicated quality assurance and quality control personnel that check and monitor our products. We have customer service personnel that answer any questions the consumers of our products may have, and we regularly ask for feedback from our customers on the quality of our products. The combination of the GreenThumb software, quality assurance and control processes (including compliance with food safety standards), and feedback from consumers and purchasers holds us accountable for maintaining the quality of our herbs and lettuce. <br>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, 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 to a legacy farm business. <br>We believe our focus on our brand "Edible Garden" is a significant differentiator. The brand not only lends itself to our current portfolio of products but allows us to develop other products in the "Consumer Brands" category. Our focus on sustainability, traceability, and social contribution, which we define as an ongoing effort to improve employee relations, working conditions, and local communities, presents our value proposition to our customers and supermarket partners and distributors. <br>![edbl_s1img1.jpg](edbl_s1img1.jpg)<br>We believe that Edible Garden's facilities comply with food safety and handling standards. We have food safety certifications from Primus GFS ("Primus"), a Global Food Safety Initiative ("GFSI") certification program, the United States Department of Agriculture ("USDA") for organic products ("USDA Organic"), and some of our products are verified as non-genetically modified ("non-GMO") by the non-GMO Project. We are licensed under the Perishable Agricultural Commodities Act ("PACA") to operate our business. We voluntarily comply with the Hazard Analysis Critical Control Point ("HACCP") principles established by the United States Food and Drug Administration ("FDA"). See "Business - Overview" for more information about our certifications, license and the standards we follow. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also use our GreenThumb software to help monitor the quality of our products, and we have dedicated quality assurance and quality control personnel that check and monitor our products. We have customer service personnel that answer any questions the consumers of our products may have, and we regularly ask for feedback from our customers on the quality of our products. The combination of the GreenThumb software, quality assurance and control processes (including compliance with food safety standards), and feedback from consumers and purchasers holds us accountable for maintaining the quality of our herbs and lettuce. <br>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, 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 to a legacy farm business. <br>We believe our focus on our brand "Edible Garden" is a significant differentiator. The brand not only lends itself to our current portfolio of products but allows us to develop other products in the "Consumer Brands" category. Our focus on sustainability, traceability, and social contribution, which we define as an ongoing effort to improve employee relations, working conditions, and local communities, presents our value proposition to our customers and supermarket partners and distributors. <br>![edbl_s1img1.jpg](edbl_s1img1.jpg)<br>We believe that Edible Garden's facilities comply with food safety and handling standards. We have food safety certifications from Primus GFS ("Primus"), a Global Food Safety Initiative ("GFSI") certification program, the United States Department of Agriculture ("USDA") for organic products ("USDA Organic"), and some of our products are verified as non-genetically modified ("non-GMO") by the non-GMO Project. We are licensed under the Perishable Agricultural Commodities Act ("PACA") to operate our business. We voluntarily comply with the Hazard Analysis Critical Control Point ("HACCP") principles established by the United States Food and Drug Administration ("FDA"). See "Business - Overview" for more information about our certifications, license and the standards we follow. |

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| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>We have a history of operating losses since inception and expect to incur additional near-term losses. As discussed further in "Management's Discussion and Analysis - Liquidity and Capital Resources," our auditors have issued an opinion that there is a substantial doubt about our ability to continue as a going concern. <br>We believe that the power of our brand together with the quality, innovative packaging and traceability of our products allow all of our customers to associate Edible Garden with locally grown and sustainably sourced packaged herbs and vegetables. Our tag line "Simply Local, Simply Fresh" is intended to describe our business plan: growing herbs and lettuce in local farms in the regional communities where our customers sell our products so that the products stay fresher for longer. We believe this strategy allows us to drive local grass roots brand awareness while we grow our business to support our plan to become a national brand. <br>We currently offer 34 stock keeping units "SKUs" and expect to further cross sell products across our supermarket partners to meet their demand. These products include: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>We have a history of operating losses since inception and expect to incur additional near-term losses. As discussed further in "Management's Discussion and Analysis - Liquidity and Capital Resources," our auditors have issued an opinion that there is a substantial doubt about our ability to continue as a going concern. <br>We believe that the power of our brand together with the quality, innovative packaging and traceability of our products allow all of our customers to associate Edible Garden with locally grown and sustainably sourced packaged herbs and vegetables. Our tag line "Simply Local, Simply Fresh" is intended to describe our business plan: growing herbs and lettuce in local farms in the regional communities where our customers sell our products so that the products stay fresher for longer. We believe this strategy allows us to drive local grass roots brand awareness while we grow our business to support our plan to become a national brand. <br>We currently offer 34 stock keeping units "SKUs" and expect to further cross sell products across our supermarket partners to meet their demand. These products include: |
| ·  | 10 types of individually potted, live herbs; |
| ·  | 10 types of cut single-herb clamshells; |
| ·  | 2 specialty herb items; |
| ·  | 6 different types of lettuce; |
| ·  | 3 garden salad kits; |
| ·  | hydro basil; |
| ·  | bulk basil; and |
| ·  | vegan protein powder. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Summary Risk Factors**<br>Our business is subject to a number of risks and uncertainties that you should understand before making an investment decision. These risks are discussed more fully in the section entitled "Risk Factors" following this prospectus summary. These include: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Summary Risk Factors**<br>Our business is subject to a number of risks and uncertainties that you should understand before making an investment decision. These risks are discussed more fully in the section entitled "Risk Factors" following this prospectus summary. These include: |
| ·  | our history of losses and the substantial doubt about our ability to continue as a going concern, which could cause our stockholders to lose some or all of their investment in us; |
| ·  | our ability to continue to access and operate our Belvidere, New Jersey facility, since we are operating the property through an informal arrangement with our predecessor and the lessor instead of a lease; |
| ·  | our ability to maintain compliance with the Nasdaq continued listing requirements; |
| ·  | our ability to raise additional capital in the future, which may not be available on favorable terms, if at all; |
| ·  | our relatively short operating history; |
| ·  | the concentration of our revenue among a few customers and the risks of losing one of those customers; |
| ·  | the relatively low margins in the grocery industry and potential for pricing pressure due to competition and consolidation in the industry; |
| ·  | our use of purchase orders with customers and suppliers rather than long-term purchase commitments; |
| ·  | our reliance on contract growers as suppliers for fulfilling our customers' purchase orders; |
| ·  | the existence of material weaknesses in our internal control over financial reporting; |
| ·  | the impact of any general and regional economic volatility or economic downturn; |
| ·  | the concentration of our business in a limited set of products; |
| ·  | our reliance on our management team and our ability to attract, train and retain qualified personnel; |
| ·  | the impact of any labor shortage or external price increases; |
| ·  | our ability to successfully integrate assets from acquisitions; |
| ·  | implementing any new lines of business or offering new products; |
| ·  | the impact of reputational damage; |
| ·  | the impact of product contamination or product liability claims; |
| ·  | our ability to protect our intellectual property rights; |
| ·  | the impact of cyber-attacks or security breaches; |
| ·  | our ability to maintain the necessary permits and compliance with regulations and requirements as a producer and distributor of food products; |
| ·  | our ability to properly use hydroponic farming methods; |
| ·  | fluctuation in the market price and demand for agricultural products; |
| ·  | seasonality; |
| ·  | increases in the cost of commodities or raw product inputs; |
| ·  | our ability to comply with government policies and regulations specifically affecting the agricultural sector;<br>|

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| ·  | our ability to compete in our industry; |
| ·  | our status as an emerging growth company and a smaller reporting company; |
| ·  | our expectation that we will not declare dividends to our common stockholders in the foreseeable future; |
| ·  | the potentially dilutive impact of seeking additional funds; and |
| ·  | our certificate of incorporation, bylaws, and terms of the warrants could discourage a change in control or acquisition of us by a third party or limit our stockholders' ability to obtain a favorable judicial forum to bring claims against us. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Implications of Being an Emerging Growth Company and Smaller Reporting Company**<br>We qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As a result, we rely on exemptions from certain disclosure requirements that are applicable to other companies that are not emerging growth companies. Accordingly, we have included detailed compensation information for only our three most highly compensated executive officers and have not included a compensation discussion and analysis of our executive compensation programs in this prospectus. In addition, for so long as we are an "emerging growth company," we will not be required to: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Implications of Being an Emerging Growth Company and Smaller Reporting Company**<br>We qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). As a result, we rely on exemptions from certain disclosure requirements that are applicable to other companies that are not emerging growth companies. Accordingly, we have included detailed compensation information for only our three most highly compensated executive officers and have not included a compensation discussion and analysis of our executive compensation programs in this prospectus. In addition, for so long as we are an "emerging growth company," we will not be required to: |
| ·  | engage an auditor to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"); |
| ·  | comply with any requirement that may be adopted by the Public Company Accounting Oversight Board ("PCAOB") regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements; |
| ·  | comply with new or revised accounting standards applicable to public companies as quickly as other public companies; |
| ·  | submit certain executive compensation matters to stockholder advisory votes, such as "say-on-pay," "say-on-frequency," and "say-on-golden parachutes;" or |
| ·  | disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparison of the chief executive officer's compensation to median employee compensation. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the JOBS Act provides that an "emerging growth company" can use the extended transition period for complying with new or revised accounting standards.<br>We will remain an "emerging growth company" until the earliest to occur of: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the JOBS Act provides that an "emerging growth company" can use the extended transition period for complying with new or revised accounting standards.<br>We will remain an "emerging growth company" until the earliest to occur of: |

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| ·  | our reporting $1.235 billion or more in annual gross revenues; |
| ·  | our issuance, in a three-year period, of more than $1 billion in non-convertible debt; |
| ·  | the end of the fiscal year in which the market value of our common stock held by non-affiliates exceeds $700 million on the last business day of our second fiscal quarter; and |
| ·  | December 31, 2027. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot predict if investors will find our securities less attractive because we may rely on these exemptions, which could result in a less active trading market for our securities and increased volatility in the price of our securities.<br>Finally, we are a "smaller reporting company" (and may continue to qualify as such even after we no longer qualify as an emerging growth company) and accordingly may provide less public disclosure than larger public companies, including the inclusion of only two years of audited financial statements and only two years of management's discussion and analysis of financial condition and results of operations disclosure. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests. | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We cannot predict if investors will find our securities less attractive because we may rely on these exemptions, which could result in a less active trading market for our securities and increased volatility in the price of our securities.<br>Finally, we are a "smaller reporting company" (and may continue to qualify as such even after we no longer qualify as an emerging growth company) and accordingly may provide less public disclosure than larger public companies, including the inclusion of only two years of audited financial statements and only two years of management's discussion and analysis of financial condition and results of operations disclosure. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests. |

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| <br>**THE OFFERING** | <br>**THE OFFERING** |
| *Issuer:*<br>| Edible Garden AG Incorporated |
| *Common stock being offered by us:* <br>| 1,942,800 shares upon exercise of the warrants, consisting of (i) Investor Warrants exercisable at $6.30 per share and (ii) Representative's Warrants exercisable at $6.93 per share  |
| *Common stock to be outstanding immediately prior to this offering:*<br>| 1,989,645 shares<sup>(1)</sup> |
| *Common stock to be outstanding immediately after this offering:*<br>| 3,932,445 shares<sup>(1)</sup> (assuming full exercise of the warrants for cash)<sup>(1)</sup> |
| *Use of proceeds:* | If the warrants are exercised for cash, we would receive approximately $12.3 million. We intend to use the net proceeds from this offering, if any, for working capital, organizational build out, including the hiring of a chief operating officer and support and operational staff, completion of a packhouse at our New Jersey facility, potential acquisitions of existing greenhouses, and general corporate purposes. The Warrants contain cashless exercise provisions. As a result, we may receive significantly less in net proceeds, if anything. See "Use of Proceeds." |
| *Nasdaq trading symbol:* | Our common stock currently trades on the Nasdaq Capital Market under the symbol "EDBL." |
| *Transfer agent, warrant agent and registrar:* | The transfer agent and registrar for our common stock and the warrant agent for the Investor Warrants is American Stock Transfer & Trust Company, LLC.  |
| *Risk factors:* | **The securities offered by this prospectus are speculative and involve a high degree of risk.** Investors purchasing securities should not purchase the securities unless they can afford the loss of their entire investment. See "Risk Factors" beginning on page 7.  |

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| (1) | The number of shares of our common stock as of the date of this prospectus and following this offering is based on 1,989,645 outstanding shares of common stock as of March 22, 2023, and excludes: | The number of shares of our common stock as of the date of this prospectus and following this offering is based on 1,989,645 outstanding shares of common stock as of March 22, 2023, and excludes: |
|  | ·  | 112,317 shares of our common stock issuable upon the exercise of the warrants issued in our initial public offering at an exercise price of $150.00 per share (the "IPO Warrants"); |
|  | ·  | 9,079 shares of common stock issuable upon the exercise of warrants held by Evergreen Capital Management, LLC ("Evergreen") at an exercise price of $150.00 per share (the "Evergreen Warrants"); |
|  | ·  | 3,907 shares of common stock issuable upon the exercise of warrants issued to affiliates of Maxim Group LLC, the representative of the underwriters in the Follow-On Offering ("Maxim") at an exercise price of $187.50 per share (the "Maxim Warrants"); |
|  | ·  | 16,651 shares of common stock available for issuance under our 2022 Equity Incentive Plan (the "2022 Plan"); |
|  | ·  | 14,964 shares of common stock issuable upon vesting of RSUs granted pursuant to the 2022 Plan; and |
|  | ·  | all shares of our common stock issuable in this offering. |
| Unless otherwise indicated, all information in this prospectus reflects and assumes no exercise of outstanding warrants and no vesting of outstanding equity awards.  | Unless otherwise indicated, all information in this prospectus reflects and assumes no exercise of outstanding warrants and no vesting of outstanding equity awards.  | Unless otherwise indicated, all information in this prospectus reflects and assumes no exercise of outstanding warrants and no vesting of outstanding equity awards.  |
| Unless otherwise noted, the share and per share information in this prospectus reflects the effect of the reverse stock split of the common stock at a ratio of 1-for-30, which became effective January 26, 2023. | Unless otherwise noted, the share and per share information in this prospectus reflects the effect of the reverse stock split of the common stock at a ratio of 1-for-30, which became effective January 26, 2023. | Unless otherwise noted, the share and per share information in this prospectus reflects the effect of the reverse stock split of the common stock at a ratio of 1-for-30, which became effective January 26, 2023. |

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**RISK FACTORS**

*Investing in our securities is highly speculative and involves a significant degree of risk. You should carefully consider the risks described below and elsewhere in this prospectus, which could materially and adversely affect our business, results of operations or financial condition. Our business faces significant risks and the risks described below may not be the only risks we face. Additional risks not presently known to us or that we currently believe are immaterial may materially affect our business, results of operations, or financial condition. If any of these risks occur, the trading price of our common stock could decline and you may lose all or part of your investment.* 

**Risks Related to Our Business** 

***We have a history of losses, expect to continue to incur losses in the near term and may not achieve or sustain profitability in the future, and as a result, our management has identified and our auditors agreed that there is a substantial doubt about our ability to continue as a going concern.***

We have incurred significant losses since our inception. We experienced net losses of approximately $12.453 million in the year ended December 31, 2022 and $5.538 million in the year ended December 31, 2021. We expect our capital expenses and operational expenses to increase in the future due to expected costs to retrofit the Edible Garden Heartland facility, increased sales and marketing expenses, operational costs, and general and administrative costs and, therefore, our operating losses will continue or even increase at least 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.

The report of our independent registered public accounting firm that accompanies our audited consolidated financial statements contains a going concern qualification in which such firm expressed substantial doubt about our ability to continue as a going concern. 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. The doubts raised relating to our ability to continue as a going concern may make our shares an unattractive investment for potential investors, which may make it difficult to raise any additional capital and may cause us to be unable to continue to operate our business.

***We currently operate our Flagship Facility pursuant to an informal arrangement with our predecessor and the lessor of the land instead of a lease.***

We currently do not have a formal lease to the land on which our Flagship Facility, in Belvidere, New Jersey, is built. We are currently party to an ongoing, informal arrangement with our predecessor company, Edible Garden Corp., whereby we make lease payments of approximately $21,860 per month to the lessor of the land on which our facility is built, Whitetown Realty, LLC (the "Landlord"), and for which our predecessor company is the lessee. We effectively rent the property on a month-to-month basis with no set term. We do not have a lease in place directly with the lessor of the property that gives us the right to operate the property, and there is no written agreement between us and our predecessor company or us and the Landlord describing this arrangement. We have not entered into a sub-lease or assignment of the agreement between our predecessor company and the Landlord, and we are not a party to or a beneficiary of the original lease between our predecessor company and the Landlord. Accordingly, we are subject to the risk that we will lose access to the property if the lessor were to evict us from the facility and property. If we were unable to access the property and continue operations in Belvidere, New Jersey, we may:

· lose the ability to continue growing as great a quantity of herbs and lettuce;

· incur costs in locating and leasing or purchasing a substitute for the Flagship Facility;

· incur costs in purchasing new equipment or improving equipment at a new leased facility;

· incur increased costs in filling purchase orders from our customers from contract growers;

· lose access to the management team and skilled employees that operate the Flagship Facility, if we were to relocate those operations;

· risk our earned reputation with customers if there is a disruption in our business; and

· harm our reputation in our community.

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If those risks occur, we may be unable to continue our business and you could lose the entire value of your investment in us.

***We may need to raise capital in the future, which may not be available on favorable terms, if at all, and which may cause dilution to holders of our common stock, restrict our operations or adversely affect our ability to operate and continue our business.***

If we need to raise additional funds in the future, we cannot be certain that we will be able to obtain financing on favorable terms, if at all, and any financings could result in additional dilution to holders of our common stock. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions such as incurring additional debt, expending capital, or declaring dividends, or which impose financial covenants on us that limit our ability to achieve our business objectives. If we need additional capital and cannot raise it on acceptable terms, we may not be able to meet our business objectives, our stock price may fall and you may lose some or all of your investment.

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***We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects.***

We have a relatively short operating history, which makes it difficult to evaluate our business and future prospects. While the predecessor business has existed since 2013, our company has been in existence only since March 2020. We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries, including those related to:

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| market acceptance of our current and future products and services; |
| our ability to compete with other companies offering similar products and services; |
| our ability to effectively market our products and services and attract new customers; |
| the amount and timing of expenses, particularly sales and marketing expenses, related to the maintenance and expansion of our business, operations and infrastructure; |
| our ability to control costs, including our expenses; |
| our ability to manage organic growth and growth through acquisitions; |
| changing regulatory environments and costs associated with compliance; and |
| general economic conditions and events. |

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If we do not manage these risks successfully, our business and financial performance will be adversely affected.

***We have historically earned most of our revenue from a limited number of customers, and if we lose any of these customers or if we are unable to replace the revenue through the sale of our products to additional customers, our financial condition and results from operations would be materially and adversely affected.***

During the years ended December 31, 2022 and 2021, three customers accounted for approximately 76% of our total revenue, and at December 31, 2022 and 2021, approximately 61% and 79%, respectively, of our gross outstanding trade receivables were attributable to these three customers. These customers generally do not enter into long-term contracts. 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.

***The loss of one or more of our customers, or a reduction in the level of purchases made by these customers, could negatively impact our sales and ability to generate profits.***

We sell our products to national and local supermarket chains. Our business and financial condition will be materially adversely affected if sales to one or more of our largest customers are reduced. These customers make purchase decisions based on a combination of price, product quality, consumer demand, customer service performance, desired inventory levels and other factors that may be important to them at the time the purchase decisions are made. Changes in these customers' strategies or purchasing patterns may adversely affect our sales. For example, the customers may face financial or other difficulties, which may impact their operations and cause them to reduce their level of purchases, which could then adversely affect our results of operations. Any bankruptcy or other business disruption involving one of our significant customers also could adversely affect our results of operations.

***Our business is characterized by low margins, which are sensitive to inflationary and deflationary pressures, and intense competition and consolidation in the grocery industry, and our inability to increase our gross margins could adversely affect our results of operations.***

Our industry is characterized by a relatively high volume of sales with relatively low profit margins, and as competition in certain areas intensifies and the industry continues to consolidate, our results of operations may be negatively impacted through a loss of sales and reduction in gross margin dollars. The grocery business is intensely competitive, and the competitive landscape is dynamic and continues to evolve, including from competitors that have greater financial and other resources than we do. We cannot provide assurance that we will be able to compete effectively against current and future competitors.

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The continuing consolidation of retailers, the growth of chains and closures of grocery locations may reduce our gross margins in the future should we experience pricing pressure from our customers. Prolonged periods of product cost inflation and periods of rapidly increasing inflation also have a negative impact on our gross margins and results of operations to the extent that we are unable to pass on all or a portion of such product cost increases to our customers, or to the extent our operating expenses increase. If we are unable to increase our gross margins, our results of operations will be adversely affected.

***Our relationships with customers and suppliers are based on purchase orders rather than long-term purchase commitments.***

We are subject to uncertainty because our relationships with customers and suppliers are based on purchase orders rather than long-term purchase commitments. Our produce is grown at facilities we own or control in Michigan and New Jersey and at third-party locations by contract growers. Based on forecasts derived from our GreenThumb software, to ensure availability of products, we or our contract growers start sowing products in advance of receiving purchase orders for those products. Inaccuracies in our forecasts of customer demand and product mix could negatively affect our ability to supply product to our customers and consequently, our operating results. Our customers can cancel purchase orders or defer the shipments of our products under certain circumstances with little or no advance notice to us. If we grow more products than we are able to sell to our customers, we will incur losses and our results of operations and financial condition will be harmed. If we or the contract grower have not grown enough of a specific product to fulfill a purchase order, our customers typically find another source of the product and we do not incur any additional costs. However, if we are unable to fill orders over time, we may harm our reputation with the customer and may be unable to maintain our relationship with the customer. Similarly, we may terminate the purchase orders we submit to contract growers at any time and for any reason, but if we do so, we risk jeopardizing the relationship with the contract grower and they may be less likely to accept purchase orders we submit, which would limit the potential growing capacity we can access and may limit our ability to supply products to our customers.

***We depend on contract growers as suppliers for fulfilling our customers' purchase orders, and the loss of significant potential growing capacity would negatively impact our results of operations and financial condition.***

We depend, in part, on contract growers to grow the herbs and lettuce we sell to our customers. By using contract growers, we are able to increase the potential growing capacity for our products because we are limited in the amount of products we can grow in the Michigan and New Jersey facilities. If the contract growers were to significantly increase their prices, we will earn less per unit than we anticipate and may suffer losses if we are not able to pass those costs on to our customers. If we lost a relationship with a contract grower whose location was near to an important customer, we may not be able to deliver product to that customer as quickly as we would prefer and may have to transport the product over a longer distance, which would negatively impact our goals of delivering product as quickly as possible and using less "food miles." If we were to lose a relationship with a significant number of our contract growers and were not able to find suitable alternatives for growing the affected products, we would be unable to fulfill purchase orders from our customers. If that were to occur, our reputation with our customers could suffer, and we may ultimately lose those customers and be unable to continue our business.

***Our secured indebtedness could have important consequences to you.***

Our secured indebtedness could have important consequences to you. For example, it could:

· limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and other general corporate requirements;

· require us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for operations and other purposes;

· limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and

· place us at a competitive disadvantage compared to competitors that may have proportionately less debt and greater financial resources.

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Our secured indebtedness held by Sament Capital Investments, Inc. ("Sament") is secured by a security interest in all of our assets located at the Flagship Facility, and the promissory note issued when we acquired Edible Garden Heartland is secured by a mortgage on Edible Garden Heartland. If we were to default on our obligations under these loans, these lenders 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. In the event that these lenders 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.

***We have material weaknesses in our internal control over financial reporting, which if left unremediated could materially and adversely affect the market price of our common stock.***

As of December 31, 2022, we did not maintain effective controls over the control environment, including our internal control over financial reporting. Because we are a small company with few employees in our finance department, we lacked the ability to have adequate segregation of duties in the financial statement preparation process. Since these entity level controls have a pervasive effect across the organization, management has determined that these circumstances constitute a material weakness. In addition, we have a material weakness in our internal control over financial reporting because we lack maintenance of appropriate documentation to support our internal controls and we have insufficiently reviewed reports identifying user entity controls. If we are unable to remediate the material weaknesses, our financial reporting may not be reliable and the market price of our common stock may be adversely affected.

***Our performance may be impacted by general and regional economic volatility, inflation, or an economic downturn.***

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 preference 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.

Additionally, we are subject to regional economic volatilities since our potential growing capacity is located in a few areas, including Belvidere, New Jersey; Francesville, Indiana; Grand Rapids, Michigan; and Hixton, Wisconsin. 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.

***Because our business is concentrated on a limited set of products, we are vulnerable to changes in consumer preferences and changes in economic conditions affecting disposable income that could harm our financial results.***

Our business is not diversified and consists primarily of growing, shipping and selling fresh herbs and lettuce, along with plant-based protein and a line of gourmet sauces and chili-based products. 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 products 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 issues, such as the Russian invasion of Ukraine, 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.

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***Our business would be adversely affected by the departure of members of our management team.***

Our success depends, in large part, on the continued contributions of James E. Kras and Michael James. Although we have employment agreements in place for each of these executives, we cannot assure you that each will remain with us for a specified period. Although we have additional personnel that contribute to our business, the loss of either of these executives could harm our ability to implement our business strategy, operate our day-to-day business and respond to the rapidly changing market conditions in which we operate.

***If we are unable to attract, train and retain qualified personnel, we may not be able to effectively execute our business strategy.***

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 have a limited number of drivers to transport our products to our customers. We do not know whether we will be able to hire sufficient workers 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.

***The costs of our operations may exceed our estimates due to factors outside of our control, such as labor shortages or external price increases, and we may be unable to pass those costs to our customers, which would negatively impact our financial results.***

We depend on our employees and contracted grow operations teams to grow and distribute our products to our customers. We rely on access to competitive, local labor supply, including skilled and unskilled positions, to operate our business consistently and reliably. Any labor shortage and any disruption in our ability to hire workers would negatively affect our operations and financial condition. If we experience a sustained labor shortage, we may need to increase wages to attract workers, which would increase our costs of growing our products. We have experienced price increases for packaging materials, natural gas supply, and shipping, and we have increased wages for our existing employees to adjust for inflation. If these increases continue or worsen, including due to inflationary pressures, and we are unable to pass those increased costs on to our customers, our gross margin will decline and our financial results would be negatively impacted.

***We may not successfully integrate assets from acquisitions.***

We completed two asset acquisitions during 2022: Edible Garden Heartland and Pulp. If we fail to accurately assess and successfully integrate any recent or future acquisitions, 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:

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| the difficulty of integrating acquired operations and personnel with our existing operations; |
| the difficulty of developing, manufacturing, and marketing new products and services; |
| the diversion of our management's attention as a result of evaluating, negotiating and integrating acquisitions; |
| in some cases, our exposure to unforeseen liabilities of acquired companies; and |
| the loss of key employees of an acquired business operation. |

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In addition, an acquisition could adversely impact cash flows, operating results, and stockholder interests, for many reasons, including:

· contingent consideration payments;

· the issuance of securities in connection with an acquisition or new business venture that dilutes or lessens the rights of our current stockholders;

· charges to our income to reflect the impairment of acquired intangible assets, including goodwill; and

· interest costs and debt service requirements for any debt incurred in connection with an acquisition or new business venture.

If we are not able to successfully integrate the assets from our acquisitions into our business, we could significantly increase our costs without realizing expected benefits, which would adversely affect our business, financial condition, and results of operations.

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***If the integration of any or all of our acquisitions or future acquisitions is not successful, it could have a material adverse impact on our operating results and stock price.***

Our future business acquisition efforts may not be successful, which may limit our growth or adversely affect our results of operations, and financing of any future acquisitions could result in stockholder dilution and increase our outstanding indebtedness. If we identify an appropriate acquisition candidate, we may not be able to successfully negotiate terms or finance the acquisition. If economic downturns or other matters of national or global concern continue for an extensive period of time or recur, our ability to pursue and consummate potential acquisitions could be materially adversely affected. In addition, to successfully complete targeted acquisitions, we may issue additional equity securities that could dilute our stockholders' ownership, or we may incur additional debt, which could increase our existing indebtedness. If we fail to successfully acquire businesses, our growth and results of operations could be adversely affected.

***We may implement new lines of business, such as the Pulp sauces, or offer new products and services within existing lines of business.***

As an early-stage 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. There are substantial risks and uncertainties associated with these efforts, particularly in instances where we have limited experience with the new lines of business or products or the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and price and profitability targets may not prove feasible. We may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance. As a result, we could lose business, be forced to price products and services on less advantageous terms to retain or attract customers, be subject to cost increases, or harm our brand's reputation. As a result, our business, financial condition or results of operations may be adversely affected.

***Damage to our reputation could negatively impact our business, financial condition and results of operations.***

Our reputation and the quality of our brand are critical to our business and success in existing markets, and will be critical to our success as we enter new markets. Any incident that erodes consumer loyalty for our brand could significantly reduce its value and damage our business. We may be adversely affected by any negative publicity, regardless of its accuracy. Also, there has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that provide individuals with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate as is its impact. Information posted may be adverse to our interests or may be inaccurate, each of which may harm our performance, prospects or business. The harm may be immediate and may disseminate rapidly and broadly, without affording us an opportunity for redress or correction.

***We are subject to risk of product contamination and product liability claims.***

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. 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.

***We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings.***

We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings. In connection with the enforcement of our own intellectual property rights, the acquisition of third-party intellectual property rights or disputes related to the validity or alleged infringement of third-party intellectual property rights, including patent rights, we may be subject to claims, negotiations or complex, protracted litigation. Intellectual property disputes and litigation may be costly and can be disruptive to our business operations by diverting attention and energies of management and key technical personnel, and by increasing our costs of doing business. If we fail to prevail in any future litigation and disputes, it could adversely affect our results of operations and financial condition. Third-party intellectual property claims asserted against us could subject us to significant liabilities, require us to enter into royalty and licensing arrangements on unfavorable terms, prevent us from assembling or licensing certain of our products, subject us to injunctions restricting our sale of products, cause severe disruptions to our operations or the marketplaces in which we compete or require us to satisfy indemnification commitments with our customers. In addition, we may incur significant costs in acquiring the necessary third-party intellectual property rights for use in our products. Any of these could seriously harm our business.

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***If we are unable to obtain patent protection for our products or otherwise protect our intellectual property rights, our business could suffer.***

Our success depends, in part, on our ability to obtain patent protection for or maintain as trade secrets our proprietary products, technologies and inventions and to maintain the confidentiality of our trade secrets and know-how, operate without infringing upon the proprietary rights of others and prevent others from infringing upon our business proprietary rights. Despite our efforts to protect our proprietary rights, it is possible that competitors or other unauthorized third parties may obtain, copy, use or disclose our technologies, inventions, processes or improvements. We cannot assure you that any of our existing or future patents or other intellectual property rights will be enforceable, will not be challenged, invalidated or circumvented, or will otherwise provide us with meaningful protection or any competitive advantage. In addition, our three pending patent applications may not be granted. If our patents do not adequately protect our technology, our competitors may be able to offer products similar to ours. Our competitors may also be able to develop similar technology independently or design around our patents, and we may not be able to detect the unauthorized use of our proprietary technology or take appropriate steps to prevent such use. We may need to enter into intellectual property license agreements in the future, and if we are unable to obtain these licenses, our business could be harmed. Any of the foregoing events would lead to increased competition and lower revenue or gross margins, which could adversely affect our operating results.

***Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information, and our inability to maintain the confidentiality of that information, due to unauthorized disclosure or use, or other event, could have a material adverse effect on our business.***

In addition to the protection afforded by patents, we seek to rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce, and any other elements of our product discovery and development processes that involve proprietary know-how, information, or technology that is not covered by patents. Trade secrets, however, may be difficult to protect. We seek to protect our proprietary processes, in part, by entering into confidentiality agreements with our employees, consultants, advisors, contractors and collaborators. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, advisors, contractors, and collaborators might intentionally or inadvertently disclose our trade secret information to competitors. In addition, competitors may otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, or misappropriation of our intellectual property by third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition.

***Our business could be negatively impacted by cyber security threats, attacks and other disruptions.***

We face advanced and persistent attacks on our information infrastructure where we manage and store various proprietary information and sensitive/confidential data relating to our operations. These attacks may include sophisticated malware (viruses, worms, and other malicious software programs) and phishing emails that attack our products or otherwise exploit any security vulnerabilities. These intrusions sometimes may be zero-day malware that are difficult to identify because they are not included in the signature set of commercially available antivirus scanning programs. Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information or that of our customers or other third-parties, create system disruptions, or cause shutdowns. Additionally, sophisticated software and applications that we produce or procure from third-parties may contain defects in design or manufacture, including "bugs" and other problems that could unexpectedly interfere with the operation of the information infrastructure. A disruption, infiltration or failure of our information infrastructure systems or any of our data centers as a result of software or hardware malfunctions, computer viruses, cyber-attacks, employee theft or misuse, power disruptions, natural disasters or accidents could cause breaches of data security, loss of critical data and performance delays, which in turn could adversely affect our business.

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***Security breaches of confidential customer information or confidential employee information may adversely affect our business.***

Our business requires the collection, transmission and retention of large volumes of customer and employee data, and other personally identifiable information, in various information technology systems that we maintain and in those maintained by third parties with whom we contract to provide services. The integrity and protection of that customer and employee data is critical to us. The information, security and privacy requirements imposed by governmental regulation are increasingly demanding. Our systems may not be able to satisfy these changing requirements and customer and employee expectations or may require significant additional investments or time in order to do so. A breach in the security of our information technology systems or those of our service providers could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a loss of revenue. Additionally, a significant theft, loss or misappropriation of, or access to, customers' or other proprietary data or other breach of our information technology systems could result in fines, legal claims or proceedings.

**Risks Related to Our Industry** 

***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.***

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 particular 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.

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***Improper use of hydroponic farming methods may significantly impact our ability to maintain our operations and may adversely affect our financial results.***

Hydroponic farming also necessitates proactive disease management practices to protect against pests and other natural conditions, outside of our control, from spreading through water sources. If we fail to properly manage our hydroponic farms, our operations and financial results may be adversely affected.

***We are subject to fluctuations in market price and demand for agricultural products.***

Fresh produce is highly perishable and generally must be brought to market and sold soon after harvest. The selling price received for our products may depend on a variety of factors, including timing of the sale, the availability and quality of the produce item in the market, and the availability and quality of competing produce.

In addition, general public perceptions regarding the quality, safety, or health risks associated with particular food products could reduce demand for some of our products. Food safety warnings, advisories, notices, and recalls, such as those administered by the FDA, the Center for Disease Control and Prevention, other federal/state government agencies, could also reduce demand. To the extent that consumers evolve away from products that we produce for health, food safety or other reasons, and we are unable to modify the product or to develop products that satisfy new consumer preferences, there will be a decreased demand for our products.

***Our results may vary from quarter to quarter depending on seasonal fluctuations related to the sale of our products.***

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 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. 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.

***Increases in commodity or raw product input costs, such as fuel and packaging materials, could increase costs significantly.***

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, 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.

***Government policies and regulations specifically affecting the agricultural sector and related industries could adversely affect our operating results.***

As a manufacturer of consumable products, our operations are subject to extensive regulation by various federal government agencies, including the FDA, the USDA and the Federal Trade Commission ("FTC"), as well as state and local agencies, such as the New Jersey Department of Agriculture, with respect to production processes, product attributes, packaging, labeling, storage, and distribution. Under various statutes and regulations, these agencies prescribe requirements and establish standards for safety, purity, and labeling. In addition, the advertising for our products is subject to regulation by the FTC, and our operations are subject to certain health and safety regulations, including those issued under the Occupational Safety and Health Act. Failure to comply with existing or modified regulations promulgated by these agencies may adversely affect our operating results.

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***We face intense competition that could prohibit us from developing or increasing our customer base.***

The indoor agriculture industry is 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 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.

**Risks Related to the Ownership of our Securities**

***There can be no assurance that we will be able to comply with the continued listing standards of the Nasdaq Capital Market, a failure of which could result in a delisting of our common stock and certain warrants.***

The Nasdaq Capital Market requires that the trading price of its listed stocks remain above $1.00 in order for the stock to remain listed. If a listed stock trades below $1.00 for more than 30 consecutive trading days, then it is subject to delisting from the Nasdaq Capital Market. In addition, to maintain a listing on the Nasdaq Capital Market, we must satisfy minimum financial and other continued listing standards, including those regarding minimum stockholders' equity, minimum publicly available shares, director independence and independent committee requirements and other corporate governance requirements. We recently regained compliance with Nasdaq's listing standards, and Nasdaq will continue to monitor our compliance with the stockholders' equity requirement. If, at the time we file our report for the quarter ending March 31, 2023, we do not evidence compliance with the stockholders' equity requirement, our common stock and traded warrants will be subject to delisting.

If we are unable to satisfy these standards, we could be subject to delisting, which would have a negative effect on the price of our common stock and warrants and would impair your ability to sell or purchase our common stock or warrants when you wish to do so. In the event of a delisting, we would expect to take actions to restore our compliance with the listing standards, but we can provide no assurance that any action we take to restore our compliance would allow our common stock or warrants to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the minimum bid price requirement, or prevent future noncompliance with the listing requirements.

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***Our management will have broad discretion over the use of the proceeds we receive in this offering, if any, and might not apply the proceeds in ways that increase the value of your investment.***

Our management will have broad discretion over the use of our net proceeds from this offering, if any, and you will be relying on the judgment of our management regarding the application of these proceeds. Our management might not apply our net proceeds in ways that ultimately increase the value of your investment. We expect to use the net proceeds from this offering, if any, for working capital, organizational build out, including the hiring of a chief operating officer and support and operational staff, completion of a packhouse at our New Jersey facility, potential acquisitions of existing greenhouses, and general corporate purposes. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our net proceeds from this offering.

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***We are an "emerging growth company," as defined in the JOBS Act, and a "smaller reporting company" within the meaning of the Securities Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies will make our common stock less attractive to investors.***

We are an "emerging growth company," as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (2) reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements, (3) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved, and (4) an extended transition period for complying with new or revised accounting standards applicable to public companies. Additionally, we may take advantage of certain reduced disclosure obligations as a "smaller reporting company" as defined in Item 10(f)(1) of Regulation S-K. To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.

After we are no longer an "emerging growth company," we expect to incur additional management time and cost to comply with the more stringent reporting requirements applicable to companies that are deemed accelerated filers or large accelerated filers, including complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We cannot predict or estimate the amount of additional costs we may incur or the timing of such costs.

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***We have not and do not expect to declare any dividends on our common stock in the foreseeable future.***

We have not and do not anticipate declaring any cash dividends on our common stock in the foreseeable future. Therefore, you should not rely on an investment in our common stock as a source for any future dividend income. There is no guarantee that our common stock will appreciate in value or even maintain its current market price. You may not realize a return on your investment in our common stock and you may even lose your entire investment in our common stock.

***We may seek to raise funds, finance acquisitions or develop strategic relationships in the future by issuing securities that would dilute your ownership. Depending on the terms available to us, if these activities result in significant dilution, it may negatively impact the trading price of our common stock.***

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. 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.

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***Provisions in our certificate of incorporation, bylaws, and outstanding equity-linked securities could discourage a change in control, or an acquisition of us by a third party, even if the acquisition would be favorable to you, thereby adversely affecting existing stockholders.***

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 of Directors, 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. 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.

***Our certificate of incorporation designate*s *the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or increase the stockholder's costs in bringing such a claim.***

Our certificate of incorporation specifies that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or other employee to us or to our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, the certificate of incorporation or the bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine, in each case subject to the Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Any person or entity purchasing or otherwise acquiring any interest in our securities shall be deemed to have notice of and to have consented to the provisions of our certificate of incorporation described above.

This provision may have the effect of discouraging lawsuits against our directors, officers, employees and agents as it may limit any stockholder's ability to bring a claim in a judicial forum that the stockholder finds favorable for disputes with us or our directors, officers, employees or agents or increase the stockholder's costs in bringing such a claim. The enforceability of similar choice of forum provisions in other companies' certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our certificate of incorporation to be inapplicable or unenforceable in such action. If a court were to find the choice of forum provision contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

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**General Risk Factors**

***A prolonged economic downturn could adversely affect our business.***

Uncertain global economic conditions could adversely affect our business. Negative global and national economic trends, such as decreased consumer and business spending, high inflation, rising interest rates, high unemployment levels and declining consumer and business confidence, pose challenges to our business and could result in declining revenue, profitability and cash flow. Unfavorable economic conditions may negatively affect demand for our products.

***Increases in costs, disruption of supply or shortage of raw materials could harm our business.***

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 for importing goods from China has 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. The prices for these raw materials fluctuate depending on market conditions and global demand for these materials and 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.

***Litigation may adversely affect our business, financial condition and results of operations.***

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. The cost to defend such litigation 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, 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.

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

Even though our common stock is currently listed on Nasdaq, we cannot predict the extent to which investor interest in our company will lead to the development of an active trading market in our securities or how liquid that market might become. If such a market does not develop or is not sustained, it may be difficult for you to sell your shares of common stock at the time you wish to sell them, at a price that is attractive to you, or at all. There could be extreme fluctuations in the price of our common stock because there are a limited number of shares in our public float.

The trading price of our common stock has been highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. Our stock price is subject to wide fluctuations in response to a variety of factors, which include:

· whether we achieve our anticipated corporate objectives;

· actual or anticipated fluctuations in our quarterly or annual operating results;

· changes in our financial or operational estimates;

· our ability to implement our operational plans;

· changes in the economic performance or market valuations of companies similar to ours; and

· general economic or political conditions in the United States or elsewhere.

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In addition, broad market and industry factors may seriously affect the market price of our common stock, regardless of actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company's securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management's attention and resources.

***We will continue to incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our operating results.***

As a public company, we will continue to incur significant legal, accounting and other expenses that are not incurred by private companies, including costs associated with public company reporting and corporate governance requirements. These requirements include compliance with Section 404 and other provisions of the Sarbanes-Oxley Act, as well as rules implemented by the Securities and Exchange Commission ("SEC") and Nasdaq. Complying with these rules and regulations substantially increases our legal and financial compliance costs and makes some activities more time-consuming and costly than if we were a private company. As a public company, it is more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage year-over-year. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our board of directors or as our executive officers. The increased costs associated with operating as a public company will decrease our net income or increase our net loss, and may require us to reduce costs in other areas of our business or increase the prices of our products or services. Additionally, if these requirements divert our management's attention from other business concerns, they could have a material adverse effect on our business, financial condition and operating results.

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***As a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting. We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.***

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on the effectiveness of our internal control over financial reporting with our annual report for the year ending December 31, 2023. This assessment needs to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

We are in the early stages of the costly and challenging process of compiling the system and processing documentation necessary to perform the evaluation needed to comply with Section 404. We may not be able to remediate future material weaknesses, or to complete our evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal controls are effective. If we are unable to assert that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, which would have a material adverse effect on the price of our common stock.

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***If we were to dissolve, the holders of our securities may lose all or substantial amounts of their investments.***

If we were to dissolve as a corporation, as part of ceasing to do business or otherwise, we will be required to pay all amounts owed to any creditors before distributing any assets to holders of our capital stock. There is a risk that in the event of such a dissolution, there will be insufficient funds to repay amounts owed to holders of any of our indebtedness and insufficient assets to distribute to our capital stock holders, in which case our stockholders could lose their entire investment.

***If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our securities adversely, our stock and warrant prices and trading volume could decline.***

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.

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**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

This prospectus, including the sections entitled "Prospectus Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business" contains forward-looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are forward-looking statements. The words "anticipate," "believe," "could," "estimate," "expect," "forecast," "intend," "may," "plan," "potential," "outlook," "should," "will," "would," and similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or anticipated results, including:

· our history of losses and our ability to continue as a going concern;

· our ability to continue to access and operate our Belvidere, New Jersey facility;

· our ability to maintain compliance with the listing standards of Nasdaq;

· our market opportunity;

· our ability to effectively manage our growth;

· our ability to integrate business acquisitions;

· the effects of increased competition as well as innovations by new and existing competitors in our market;

· our ability to retain our existing customers and to increase our customer base;

· the future growth of the indoor agriculture industry and demands of our customers;

· our expected use of proceeds from this offering, if any;

· our ability to maintain, or strengthen awareness of, our brand;

· our ability to expand the product lines we offer;

· our ability to maintain, protect, and enhance our intellectual property;

· future revenue, hiring plans, expenses and capital expenditures;

· our ability to comply with new or modified laws and regulations that currently apply or become applicable to our business;

· our ability to recruit and retain key employees and management personnel;

· our financial performance and capital requirements;

· the outcome of ongoing legal proceedings;

· the potential insufficiency of our disclosure controls and procedures to detect errors or acts of fraud;

· the potential lack of liquidity and trading of our securities; and

· our potential ability to obtain additional financing.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus. We have based these forward-looking statements largely on our current expectations about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in "Risk Factors." Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this prospectus 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 predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statements to actual results or to changes in our expectations.

You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

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**USE OF PROCEEDS**

Assuming the exercise of all of the Investor Warrants and Representative's Warrants for cash, we would receive approximately $12.3 million. There is no assurance that the holders of the warrants will elect to exercise any or all of the warrants. The exercise price of the Investor Warrants is $6.30 per share of common stock and the exercise price of the Representative's Warrants is $6.93. We believe the likelihood that warrant holders will exercise their warrants, and therefore the amount of cash proceeds that we would receive, is highly dependent upon the trading price of our common stock. The closing price of our common stock on Nasdaq on March 24, 2023 was $2.21 per share. If the trading price for our common stock is less than the exercise price of the warrants, we believe holders of the warrants will be unlikely to exercise their warrants for cash. There is no assurance that the holders of the warrants will elect to exercise any or all of their warrants. To the extent that shares of common stock are issued pursuant to the exercise of warrants on a "cashless basis," the amount of cash we would receive from the exercise of the warrants will decrease.

We intend to use the net proceeds, if any, from the sale of the common stock underlying the warrants for (i) working capital and general corporate purposes; (ii) organizational built out, including the hiring of a chief operating officer and support and operational staff; (iii) completion of a packhouse at our New Jersey facility; and (iv) potential acquisitions of existing greenhouses. We have no current plans to acquire existing greenhouses, but we may do so as part of our growth strategy in the future. Given the uncertainty of when and whether warrant holders will exercise their warrants for cash, we have not yet determined the amount of net proceeds to be used specifically for any of the foregoing purposes. Accordingly, our management will have significant discretion and flexibility in applying the net proceeds from the cash exercise of the warrants.

&nbsp;&nbsp;&nbsp;&nbsp;

**DIVIDEND POLICY**

We have never paid cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. Our Preferred Stock ranked senior to the common stock with respect to dividend rights. On December 31, 2022, the Company paid the former holder of the Preferred Stock the cumulative dividend that accrued while the Preferred Stock remained outstanding. After this payment, no additional dividends are payable on the Preferred Stock. See "Description of Securities — Preferred Stock — Series A Convertible Preferred Stock" for more information about the rights and preferences of the Preferred Stock.

We intend to retain all available funds and any future earnings to fund the development and expansion of our business. Any future determination to pay dividends on the common stock will be at the discretion of our Board of Directors and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our Board of Directors deems relevant.

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**DILUTION**

If you invest in our common stock by exercising the Investor Warrants, your investment will be immediately diluted to the extent of the difference between the price per share of our common stock that you pay and the pro forma net tangible book value per share of our common stock after giving effect to the Follow-On Offering.

Our net tangible book value (deficit) as of December 31, 2022 was $(2.391 million), or approximately $(6.71) per share. Net tangible book value per share represents our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding.

Our pro forma net tangible book value as of December 31, 2022 was $5.714 million, or approximately $2.89 per share after taking into account the net proceeds received in the Follow-On Offering.

Pro forma, as adjusted net tangible book value dilution per share of common stock to new investors represents the difference between the exercise price per share of common stock and the pro forma net tangible book value per share of common stock assuming that all Investor Warrants are simultaneously exercised for cash. After giving effect to the exercise of all 1,861,850 Investor Warrants for $6.30 per share, our pro forma, as adjusted net tangible book value as of December 31, 2022 would have been $17.443 million, or $4.55 per share of common stock. This represents an immediate increase in pro forma net tangible book value of $1.65 per share of common stock to existing stockholders and an immediate dilution in net tangible book value of $1.75 per share of common stock to investors of the offering, as illustrated in the following table, based on shares outstanding as of March 22, 2023.

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| Exercise price per share of common stock |  | $6.30 |
| Actual Net tangible book value per share of common stock at December 31, 2022<sup>(1)</sup> | $(6.71) |  |
| Pro forma adjustments<sup>(2)</sup> | 9.60 |  |
| Pro forma net tangible book value per share | $2.89 |  |
| Increase in net tangible book value per share attributable to new investors<sup>(3)</sup> | $1.65 |  |
| Pro forma net tangible book value per share after this offering<sup>(4)</sup> |  | $4.55 |
| Immediate dilution in net tangible book value per share to new investors |  | $1.75 |

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(1) Determined by dividing (i) net tangible book value (total assets less intangible assets) less total liabilities by (ii) the total number of shares of common stock issued and outstanding prior to the offering.

(2) Represents the receipt of the net proceeds of the Follow-On Offering.

(3) Represents the difference between (i) pro forma, as adjusted net tangible book value per share after giving effect to the exercise of all 1,861,850 Investor Warrants for $6.30 per share and (ii) net tangible book value per share as of December 31, 2022.

(4) Determined by dividing (i) pro forma, as adjusted net tangible book value, which is our pro forma net tangible book value plus the cash proceeds of the exercise of Investor Warrants, by (ii) the total number of shares of common stock to be outstanding following the exercise of the Investor Warrants.

The number of shares of our common stock outstanding set forth in the table above excludes, as of March 22, 2023:

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| 112,317 shares of our common stock issuable upon the exercise of the IPO Warrants; |
| 16,651 shares of common stock available for issuance under our 2022 Plan; |
| 14,964 shares of common stock issuable upon vesting of RSUs granted pursuant to the 2022 Plan; |
| 9,079 shares of common stock issuable upon the exercise of the Evergreen Warrants; |
| 3,907 shares of common stock issuable upon the exercise of the Maxim Warrants; and |
| 80,950 shares of our common stock issuable upon the exercise of the Representative's Warrants. |

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**MANAGEMENT'S DISCUSSION AND ANALYSIS OF** 

**FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*You should read the following discussion and analysis of our financial condition and results of our operations together with our consolidated financial statements and the notes thereto appearing elsewhere in this prospectus. This discussion contains forward-looking statements reflecting our current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled "Risk Factors," "Cautionary Statement regarding Forward-Looking Statements," and elsewhere in this prospectus.*

*&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;* 

**OVERVIEW**

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 use the controlled environment of traditional greenhouse structures, such as glass greenhouses, together with hydroponic and vertical greenhouses to sustainably grow organic herbs and lettuces. In our hydroponic greenhouse, we grow plants without soil. Instead of planting one row of lettuce in the ground, by using a vertical greenhouse, we can grow many towers of lettuce 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 controlled greenhouse facilities allow us to grow consistent quality herbs and lettuces year-round, first by eliminating some of the variability of outdoor farming with our CEA techniques, and second by leveraging our proprietary software, GreenThumb. In addition to using hydroponic and vertical greenhouse systems, we use a "closed loop" system in our greenhouses. Generally, in a "closed loop" system, drain water is recollected and reused for irrigation. In our closed loop system, we also cycle water back into the system that has been collected through reverse osmosis. When compared with conventional agriculture, our closed looped systems and hydroponic methods use less land, less energy and less water (than legacy farms), thus conserving some of the planet's limited natural resources. Our advanced systems are also designed to help mitigate contamination from harmful pathogens, including salmonella, e-coli and others.

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We have also developed patented software called GreenThumb that assists in tracking plants through our supply chain. Utilizing our GreenThumb software to track the status of our plants as they grow and move throughout the greenhouse allows us to add a layer of quality control due to the frequent monitoring of the growing process, leading to improved traceability. In this context, traceability means being able to track a plant through all stages of production and distribution. In addition to improving traceability, GreenThumb helps us better manage the day-to-day operations of our business. GreenThumb is a web-based greenhouse management and demand planning system that does the following:

· integrates in real-time with our cloud business software suite for monitoring daily sales data;

· generates reports by category, product, customer, and farm to allow us to analyze sales, trends, margins and retail shrink (spoiled product);

· provides dynamic pallet mapping for packout, which enables us to more efficiently ship our products;

· utilizes a proprietary algorithm that uses year-over-year and trending sales data to develop customer specific and aggregate product specific forecasting for our greenhouses;

· aggregates all greenhouse activity input to provide real-time inventory and availability reports of all products in our greenhouses;

· manages our online ordering system with user controlled product availability based upon greenhouse inventory;

· provides a route management system for coordinating the logistics of our direct store delivery program; and

· tracks all production activities at greenhouses, including sowing, spacing, dumping, spraying, picking and packing, using hand held devices.

We also use our GreenThumb software to help monitor the quality of our products, and we have dedicated quality assurance and quality control personnel that check and monitor our products. We have customer service personnel that answer any questions the consumers of our products may have, and we regularly ask for feedback from our customers on the quality of our products. The combination of the GreenThumb software, quality assurance and control processes (including compliance with food safety standards), and feedback from consumers and purchasers holds us accountable for maintaining the quality of our herbs and lettuce.

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, 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.

We believe our focus on our brand "Edible Garden" is a significant differentiator. The brand not only lends itself to our current portfolio of products but allows us to develop other products in the "Consumer Brands" category. Our focus on sustainability, traceability, and social contribution, which we define as an ongoing effort to improve employee relations, working conditions, and local communities, presents our value proposition to our customers and supermarket partners and distributors.

**RECENT DEVELOPMENTS**

***Public Follow-on Offering***

On February 7, 2023, we closed on an underwritten public offering of 1,619,000 units, with each unit consisting of one share of common stock and one warrant to purchase one share of common stock at an exercise price equal to $6.30 per share. Each unit was sold at a public offering price of $6.30 per unit. Gross proceeds, before deducting underwriting discounts and commissions and estimated offering expenses, were approximately $10.2 million.

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On February 10, 2023, the Company received a letter from the Listing Qualifications Department of the Nasdaq Stock Market LLC ("Nasdaq") indicating that the Company had regained compliance with the minimum stockholders' equity requirement for continued listing on Nasdaq under Nasdaq Rule 5550(b)(1), the publicly held shares requirement under Nasdaq Rule 5550(a)(4), and the minimum bid price requirement under Nasdaq Rule 5550(a)(2). Nasdaq will continue to monitor the Company's ongoing compliance with the stockholders' equity requirement and, if at the time of filing its periodic report for the quarter ending March 31, 2023, the Company does not evidence compliance with that rule, the Company's common stock may be subject to delisting.

**CRITICAL ACCOUNTING ESTIMATES**

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. Management's estimates are based on historical experience, the relevant information available at the end of each period, and their judgment. Although management believes the judgment applied in preparing estimates is reasonable based on circumstances and information known at the time, actual results could differ materially from these estimates under different assumptions or market conditions.

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 policies most critical to the preparation of our consolidated financial statements.

***Revenue Recognition***

Revenue is recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company does not offer returns, discounts, loyalty programs or other sales incentive programs that are material to revenue recognition. Payments from our customers are due upon delivery or within a short period after delivery.

***Property, Equipment and Leasehold Improvements***

Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Our fixed assets, which are comprised of leasehold improvements, equipment and vehicles, have useful lives of five years. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations.

The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, *"Property, Plant, and Equipment."* When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets.

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***Income Taxes***

The provision for income taxes is determined in accordance with ASC 740, "*Income Taxes*." The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At December 31, 2022 and December 31, 2021, such net operating losses were offset entirely by a valuation allowance.

The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations.

**RESULTS OF OPERATIONS**

**COMPARISON OF THE TWELVE MONTHS ENDED DECEMBER 31, 2022 AND 2021**

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| | | |
|:---|:---|:---|
| *(in thousands)* | **Year Ended**<br>**December 31,**<br>**2022** | **Year Ended**<br>**December 31,**<br>**2021** |
| Revenue | $11552 | $10507 |
| Cost of goods sold | 11188 | 9859 |
| Gross Profit | 364 | 648 |
| Selling, general and administrative expenses | 9368 | 5611 |
| Loss from operations | (9004) | (4963) |
| Other income / (expense) |  |  |
| Interest expense, net | (2033) | (617) |
| Loss from extinguishment of debt | (826) | 42 |
| Other income / (loss) | (590) | - |
| Total other expenses | (3449) | (575) |
| **NET LOSS** | $(12453) | $(5538) |

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*Revenue*

Revenue was $11.552 million for the twelve months ended December 31, 2022, an increase of $1.045 million, or 9.95%, compared with $10.507 million for the twelve months ended December 31, 2021. The increase represents growth from our existing customer base.

*Cost of goods sold*

Cost of goods sold increased $1.329 million, or 13.48% to $11.188 million for the twelve months ended December 31, 2022, compared with $9.859 million for the twelve months ended December 31, 2021. The increase was due to higher packaging costs due to inflation, higher labor costs due to the tight labor market and increases in rates charged by our contract growers.

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*Gross profit*

Gross profit declined by $284 thousand, or 43.83%, to $364 thousand, or 2.46% of sales, for the twelve months ended December 31, 2022, compared with $648 thousand, or 6.17% of sales, for the twelve months ended December 31, 2021. Margin contraction was the result of increased costs incurred to fulfill the demand by our customers due to higher packaging and labor costs as well as increased in fees charged by our contract growers.

*Selling, general and administrative*

Selling, general and administrative ("SG&A") expenses increased by $3.757 million, or 66.96%, to $9.368 million for the twelve months ended December 31, 2022, compared with $5.611 million for the twelve months ended December 31, 2021. Higher compensation and related expense of $1.240 million was driven primarily by $500 thousand transaction bonuses paid to each of our Chief Executive Officer and Chief Financial Officer upon the completion of our initial public offering (the "IPO") pursuant to their employment agreements. The balance of the increase in compensation expense included $122 thousand of common stock issued to the employees and higher wages required to retain talent and expanding the workforce to support growth initiatives. Approximately $877 thousand of the increase in SG&A was associated with becoming a public company, including obtaining a Directors and Officers liability insurance policy, investor relations support and audit and quarterly financial review expenses. Director fees increased by $204 thousand, comprised of $134 thousand paid in cash and the issuance of common stock valued at $70 thousand. Repairs and maintenance increased by $191 thousand as a result of maintaining the condition of the Belvidere, New Jersey greenhouse. Other professional fees increased by $436 thousand for work performed by outside experts and legal expenses for settling the matter with Green City Growers. Depreciation expense increased by $244 thousand due to the acquisition of Edible Garden Heartland and the purchase of additional trucks. Travel expense increased by $86 thousand for business development and performing due diligence on greenhouse locations for potential acquisitions.

*Loss from operations*

Lower gross margin and higher SG&A resulted in an increase in loss from operations of $3.941 million to $8.904 million for the twelve months ended December 31, 2022, compared with $4.963 million for the twelve months December 31, 2021.

*Interest expense*

Interest expense was $2.033 million for the twelve months ended December 31, 2022, versus $617 thousand for the twelve months ended December 31, 2021. The increase was primarily due to additional expense of $552 thousand for amortization of debt discounts in the current year. Interest expense relates to the seller financing notes for the acquisition of Edible Garden Heartland, loans provided by an officer for working capital, bridge loans from Evergreen Capital Management, LLC ("Evergreen") for working capital prior to the IPO, and the notes held by Sament. See Note 8 to our financial statements for more information regarding our notes payable.

*Loss from extinguishment of debt*

We incurred a loss from the extinguishment of debt of $829 thousand as a result of consolidating our debt and entering into an amended and restated consolidated secured promissory note (the "A&R Note") with Evergreen in June of 2022, compared with a gain of $42 thousand for the twelve months ended December 31, 2021.

*Other income (loss)*

We incurred a loss of $590 thousand for the twelve months ended December 31, 2022. The revaluation of the warrants issued to Evergreen (as a result of the exercise prices being reduced to the public offering price in May of 2022) was $186 thousand of the loss while $401 thousand was due to a leak out provision for stock owned by Evergreen.

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*Net loss*

Net loss was $12.453 million for the twelve months ended December 31, 2022, compared with a net loss of $5.538 million for the twelve months ended December 31, 2021.

**LIQUIDITY AND CAPITAL RESOURCES**

***Going Concern Considerations***

We have incurred significant losses since our inception. We have experienced net losses of approximately $12.453 million during the twelve months ended December 31, 2022 and $5.538 million in the year ended December 31, 2021. 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. 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.

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 in 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.

***Liquidity***

The Company's primary liquidity requirements are for working capital, continued investments in capital expenditures, and other strategic investments. Although income taxes are not currently a significant use of funds, after the benefits of our net operating loss carryforwards are fully recognized, they could become a material use of funds, depending on our future profitability and future tax rates. The Company's liquidity needs have been met primarily through public equity offerings, term loan borrowings, convertible notes, and related party loans.

As of December 31, 2022 and December 31, 2021, we had $110 thousand and $31 thousand in cash and cash equivalents available, respectively. As of December 31, 2022 and December 31, 2021, we had working capital deficits of $2.966 million and $5.898 million, respectively. As of December 31, 2022 and December 31, 2021, we had $6.324 million and $8.775 million of total debt outstanding, respectively. To resolve our working capital deficit and meet our cash needs, we are implementing cost savings programs in addition to having raised $10.2 million from the sale of securities in February 2023. In February 2023, we paid off the secured promissory note in the amount of $677 thousand held by Sament and the A&R Note in the amount of $1.022 million. We believe that the remaining offering proceeds will be sufficient to fund our operations through December 2023. We may not be able to access the capital markets in the future on commercially acceptable terms or at all. Our ability to fund future operating expenses and capital expenditures and our ability to meet future debt service obligations or refinance our indebtedness will depend on our future operating performance, which will be affected by general economic, financial and other factors beyond our control, including those described under "*Risk Factors*" in this Annual Report on Form 10-K.

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***Capital Resources***

On May 9, 2022, we completed our IPO and raised net proceeds of approximately $13.2 million, after deducting underwriting discounts and commissions and expenses associated with the offering of approximately $1.4 million. Subsequent to December 31, 2022, we raised total net proceeds of approximately $9.5 million, after deducting underwriting discounts and commissions and expenses associated with the offering of approximately $0.8 million.

On August 30, 2022, we entered into the Greenleaf Promissory Note for $1,136,000, which provided seller financing in connection with the purchase of Edible Garden Heartland. The Greenleaf Promissory Note accrues interest at a rate of 5% per annum and will mature on September 1, 2026. The Company may prepay the outstanding amount due under the Greenleaf Promissory Note at any time without penalty. The Company will make monthly payments of principal and interest of $28,089 beginning January 1, 2023 and until the maturity date of the Greenleaf Promissory Note. The Greenleaf Promissory Note is secured by a mortgage on the Property (the "Mortgage") and a security interest in the assets owned by the Subsidiary in favor of NJDI (the "Security Agreement").

In addition, the Company's obligation to repay the amounts due under the Promissory Note, or up to $1,136,000 plus any accrued interest, is guaranteed by the Company under a guaranty in favor of NJDI (the "Guaranty") entered into on August 30, 2022. Under the Guaranty, in the event that the Company defaulted on the Greenleaf Promissory Note, the Company would be responsible for any sum remaining due after NJDI foreclosed on the Mortgage and exercised its rights under the Security Agreement.

On June 22, 2020, the Company entered into a U.S. Small Business Administration Loan Authorization and Agreement pursuant to which the Company received loan proceeds of $150,000 (the "SBA Loan"). The SBA Loan matures on June 22, 2050 and incurs interest at a fixed rate of 3.75% per year.

On March 30, 2020, the Company issued a promissory note to Sament, an affiliate of our predecessor, for $3.0 million when the Company purchased the assets of its predecessor. This note accrues interest at a fixed rate of 3.5% per year on a 360-day year basis and matures March 30, 2025. This note is secured by all of the assets the Company purchased from its predecessor.

From time to time, the Company enters into loans to purchase vehicles that are secured by the vehicle purchased. Some of these loans are also personally guaranteed by the Company's chief executive officer and/or chief financial officer. These loans accrue interest at annual rates ranging from 7.64% to 18.66% and mature on dates between April 2024 and July 2027.

For more information on our outstanding debt as of December 31, 2022 and December 31, 2021, see Note 8 to our financial statements.

***Cash Flows***

*Operating activities*

During the twelve months ended December 31, 2022 and 2021, cash used for operating activities was $9.185 million and $4.078 million, respectively. Cash expenditures for the twelve months ended December 31, 2022 increased primarily due to the increase in net loss, timing of vendor payments and an increase in executive and directors' compensation.

*Investing activities*

During the twelve months ended December 31, 2022 and 2021, cash used in investing activities was $2.033 million and $151 thousand, respectively. The increase in cash used in for investing activities was primarily driven by our purchase of Edible Garden Heartland. See Note 3 to our financial statements for more information about this asset acquisition.

*Financing activities*

During the twelve months ended December 31, 2022 and 2021, cash provided by financing activities was $11.297 million and $4.255 million. The increase in cash provided by financing activities was primarily driven by completion of the IPO, partially offset by the repayment of indebtedness.

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**BUSINESS**

**Overview**

Edible Garden is a CEA farming company. We use traditional agricultural growing techniques together with technology to grow fresh, organic food, sustainably and safely while improving traceability. We use the controlled environment of traditional greenhouse structures, such as glass greenhouses, together with hydroponic and vertical greenhouses to sustainably grow organic herbs and lettuces. In our hydroponic greenhouse, we grow plants without soil. Instead of planting one row of lettuce in the ground, by using a vertical greenhouse, we can grow many towers of lettuce 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 controlled greenhouse facilities allow us to grow consistent quality herbs and lettuces year-round, first by eliminating some of the variability of outdoor farming with our CEA techniques, and second by leveraging our proprietary software, GreenThumb. In addition to using hydroponic and vertical greenhouse systems, we use a "closed loop" system in our greenhouses. Generally, in a "closed loop" system, drain water is recollected and reused for irrigation. In our closed loop system, we also cycle water back into the system that has been collected through reverse osmosis. When compared to conventional agriculture, our closed looped systems and hydroponic methods use less land, less energy and less water (than legacy farms), thus conserving some of the planet's limited natural resources. Our advanced systems are also designed to help mitigate contamination from harmful pathogens, including salmonella, e-coli and others.

We have also developed patented software called GreenThumb that assists in tracking plants through our supply chain. Utilizing our GreenThumb software to track the status of our plants as they grow and move throughout the greenhouse allows us to add a layer of quality control due to the frequent monitoring of the growing process, leading to improved traceability. In this context, traceability means being able to track a plant through all stages of production and distribution. In addition to improving traceability, GreenThumb helps us better manage the day-to-day operations of our business. GreenThumb is a web-based greenhouse management and demand planning system that does the following:

· integrates in real-time with our cloud business software suite for monitoring daily sales data;

· generates reports by category, product, customer, and farm to allow us to analyze sales, trends, margins and retail shrink (spoiled product);

· provides dynamic pallet mapping for packout, which enables us to more efficiently ship our products;

· utilizes a proprietary algorithm that uses year-over-year and trending sales data to develop customer specific and aggregate product specific forecasting for our greenhouses;

· aggregates all greenhouse activity input to provide real-time inventory and availability reports of all products in our greenhouses;

· manages our online ordering system with user controlled product availability based upon greenhouse inventory;

· provides a route management system for coordinating the logistics of our direct store delivery program; and

· tracks all production activities at greenhouses, including sowing, spacing, dumping, spraying, picking and packing, using hand held devices.

We also use our GreenThumb software to help monitor the quality of our products, and we have dedicated quality assurance and quality control personnel that check and monitor our products. We have customer service personnel that answer any questions the consumers of our products may have, and we regularly ask for feedback from our customers on the quality of our products. The combination of the GreenThumb software, quality assurance and control processes (including compliance with food safety standards), and feedback from consumers and purchasers holds us accountable for maintaining the quality of our herbs and lettuce.

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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, 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 to a legacy farm business.

We believe our focus on our brand "Edible Garden" is a significant differentiator. The brand not only lends itself to our current portfolio of products but allows us to develop other products in the "Consumer Brands" category. Our focus on sustainability, traceability, and social contribution, which we define as an ongoing effort to improve employee relations, working conditions, and local communities, presents our value proposition to our customers and supermarket partners and distributors.

![edbl_s1img2.jpg](edbl_s1img2.jpg)

We believe that Edible Garden's facilities comply with food safety and handling standards.

We have food safety certifications from Primus, a GFSI certification program, the USDA for organic products, and some of our products are verified as non-GMO by the non-GMO Project. We are licensed under PACA to operate our business. We voluntarily comply with the HACCP principles established by the FDA.

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Primus annually audits our growing process and entire food safety management system to ensure that our process and products meet the standards established by the GFSI. We value this certification because our customers require purchasing products from producers who are GFSI certified. When we undergo the GFSI audit, Primus audits the following:

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| standard operating procedures and their documentation; |
| food safety testing (biological hazards) by an ISO 17025 accredited lab; |
| water testing by an ISO 17025 accredited lab; |
| quality control processes; |
| personnel health, hygiene and safety; |
| sanitation programs; |
| mock recalls/products on-hold process; |
| internal auditing system for organic, GFSI, non-GMO and HACCP certifications and verifications; |
| records retention; |
| food defense/food fraud; |
| supplier approval program; |
| pest management program; and |
| visual inspection of growing and packing processes. |

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| To maintain our USDA Organic certification, we must submit: | To maintain our USDA Organic certification, we must submit: |
| ·  | our farm and handling plans annually; |
| ·  | to an annual inspection and audit of our greenhouse and how we handle aspects of our business; |
| ·  | to review of our organic documentation and records retention; and |
| ·  | to review and testing of our water usage and irrigation systems, harvest and post-harvest processing, and supplier monitoring and control. |

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| In addition, we must: | In addition, we must: |
| ·  | use Organic Materials Review Institute ("OMRI")-approved inputs, such as fertilizer, pesticides, disease management and media; |
| ·  | use organic in-house seedling production; |
| ·  | use organic pest management practices; |
| ·  | use organic crop management techniques; |
| ·  | perform nutritional deficiencies testing; |
| ·  | perform microbiological water testing; |
| ·  | conserve natural resources and promote biodiversity; and |
| ·  | maintain organic integrity (prevent conventional crops from contaminating organic crops). |

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Some of our products are verified as non-GMO by the non-GMO Project. To have a product verified by the non-GMO Project, we submit to an annual review process of the relevant products. We must source seeds and cuts from reputable and safe suppliers, not use bio-engineered products or ingredients during the growing process, and not include bio-engineered ingredients or products in the final goods sold to customers.

To maintain our PACA license, we submit to an annual review of our business, including our history and principles, to ensure we are meeting our contractual obligations under the law. This includes abiding by fair trading practices, meeting our contractual agreements and specifications, promptly paying all contracts, and maintaining trust assets.

The HACCP principles require that we submit to USDA audits annually. We must also identify the various chemical, physical, and biological hazards that exist in crop production and manage and control those hazards so that they do not contaminate our products or packaging. We must also implement and document critical control points, and implement and document corrective actions taken when those critical control points do not adequately control a hazard.

We have a history of operating losses since inception and expect to incur additional near-term losses. As discussed further in "Management's Discussion and Analysis - Liquidity and Capital Resources," our auditors have issued an opinion that there is a substantial doubt about our ability to continue as a going concern.

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We believe that the power of our brand together with the quality, innovative packaging and traceability of our products allow all of our customers to associate Edible Garden with locally grown and sustainably sourced packaged herbs and vegetables. Our tag line "Simply Local, Simply Fresh" is intended to describe our business plan: growing herbs and lettuce in local farms in the regional communities where our customers sell our products so that the products stay fresher for longer. We believe this strategy allows us to drive local grass roots brand awareness while we grow our business to support our plan to become a national brand.

**Acquisitions**

Our strategy for growth includes acquisitions. Our acquisition strategy includes expanding our greenhouse capacity in order to reduce our dependence on contract growers which we believe will benefit our profit margin. Greenhouse expansion also supports our effort to grow local which reduces transportation costs. We expect to make acquisitions that expand our consumer product offerings and leverage our channels to market.

**Heartland Facility in Grand Rapids, Michigan**

On August 30, 2022, through our wholly owned subsidiary, 2900 Madison Ave Holdings, LLC (the "Michigan Subsidiary"), we acquired a five-acre greenhouse facility in Grand Rapids, Michigan for $2,886,000. The greenhouse facility is operating as Edible Garden Heartland. After Edible Garden Heartland is fully transitioned to growing our herbs and lettuce products, which is expected during the first half of 2023, it will add approximately five acres of directly controlled growing capacity to our operations. We believe the addition of Edible Garden Heartland will contribute to higher gross margin over time. We expect lower cost of sales by growing, picking and shipping our products instead of working with a contract grower to grow those products. In addition to serving customers in the Midwest, the facility will house a research and development center focused on improving existing products, developing new products, innovations in plant-based protein and nutraceuticals, and applying advanced agricultural technologies.

**Pulp**

In November 2022, we acquired the assets of Pulp, including its line of sustainable gourmet sauces and chili-based products. Pulp's product lines are all-natural, Non-GMO and preservative free. The products include Hungarian wax hot sauce, poblano serrano jalapeno hot sauce, Fresno chili hot sauce, habanero carrot hot sauce, salsa macha, chili crisp, and chili oil.

**Products and Customers**

We currently offer 34 stock keeping units "SKUs" and expect to further cross sell products across our supermarket partners to meet their demand. These products include:

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|  | ·  | 10 types of individually potted, live herbs; |
|  | ·  | 10 types of cut single-herb clamshells; |
|  | ·  | 2 specialty herb items; |
|  | ·  | 6 different types of lettuce; |
|  | ·  | 3 garden salad kits; |
|  | ·  | hydro basil; |
|  | ·  | bulk basil; and |
|  | ·  | vegan protein powder. |
| ![edbl_s1img3.jpg](edbl_s1img3.jpg) ![edbl_s1img4.jpg](edbl_s1img4.jpg) | ![edbl_s1img3.jpg](edbl_s1img3.jpg) ![edbl_s1img4.jpg](edbl_s1img4.jpg) | ![edbl_s1img3.jpg](edbl_s1img3.jpg) ![edbl_s1img4.jpg](edbl_s1img4.jpg) |

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We also expect to sell Pulp's products, which consist of Hungarian wax hot sauce, poblano serrano jalapeno hot sauce, Fresno chili hot sauce, habanero carrot hot sauce, salsa macha, chili crisp, and chili oil, in the summer of 2023.

Our fresh produce and plant-based protein products are currently sold at over 4,000 supermarket stores and food distributors across the Northeast, Midwest and Mid-Atlantic regions of the country. Some of the supermarkets that sell our products include Walmart, Target, Meijer, Wakefern Food Corporation/ShopRite, King Kullen, D'Agostino's, Kroger, and Food Bazaar. We also service a large number of food distributors. This market segment allows us greater penetration with smaller local and regional supermarkets and the food services business.

Since inception, a few of our customers constitute a majority of our total revenue. For example, during the years ended December 31, 2022 and 2021, we earned approximately 76% of our revenue from three customers, and at December 31, 2022 and 2021, approximately 68% and 79%, respectively, of our gross outstanding trade receivables were attributable to these three customers. While we value our strong relationship with these major customers, we face the risk of losing a significant source of revenue if our major customers do not continue to purchase our products. If that were to occur and we were unable to replace the revenue by selling our products to additional customers, our ability to earn revenue would be significantly negatively impacted. Part of our growth strategy is to reduce this customer concentration by expanding our production capacity, which would allow us to sell our products to more supermarket partners.

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We sell products to our customers on a purchase order basis, with no spend or purchase commitments, in the ordinary course of business. We and our customers enter into purchase orders on a daily basis. To date, no purchase order has exceeded 2.0% of our revenue for the particular quarter in which the products were delivered to the customer.

The packaging we use for our produce leverages the latest technology to reduce plastics, extend the shelf life of our products, and reduce retail shrink - all leading to a reduced carbon footprint by reducing waste. The packaging we use for our produce features bio-based (sugar cane) sleeves. Using this material, we are able to reduce our use of plastic in our business. Generally, retail shrink is a loss of inventory. For our supermarket customers, one source of this shrinkage is spoiled product, such as herbs that have been in packaging for so long that they become poor quality. We use herb bags that have micro-perforations that allow ethylene gas to escape from the product packaging. Ethylene gas accelerates spoilage of herbs and lettuce. By allowing this gas to escape, we are able to extend the shelf life of the product while reducing the likelihood that our customers experience retail shrink because they have to throw our products in the garbage. Using this technology, cilantro, for example, is in good quality after 11 days, while it would be in poor quality after seven days in other packaging, according to the developer<sup>1</sup> of this bag material. The CO2 laser perforation creates well-defined holes which allow for a controllable and consistent environment in the bag, while other typical bagged herbs are perforated with a cold needle, which produce inconsistent holes and, therefore, an uncontrollable atmosphere. Less product spoilage means less waste, and less shrinkage means that we will not have to produce as many lettuce and herbs to achieve the same level of retail sales. Altogether, we should be able to produce less carbon and minimize the size of our carbon footprint by using these packaging innovations.

More recently we have expanded our product line to include nutraceuticals and other food products as well as vitamins, plant and whey proteins, and other products utilizing next-generation plant ingredients grown and sourced using sustainable methods.

**Production and Properties**

We utilize prime greenhouse locations in the Northeast, Midwest and Mid-Atlantic regions of the country, allowing us to provide local fresh and organic products to these local communities. Our locally grown and delivered products using a network of sustainable greenhouse farms provide local communities, retailers and consumers the quality they demand with the food safety they expect. The communities, retailers and consumers benefit from this as this allows us to get our products to market in the shortest time without compromising the plant's quality and nutritional value. The growing locations are chosen to be near key trucking lanes within hours of major cities to cut down on "food miles" and fuel costs. We believe our strategy enhances our products' appeal to major consumer constituencies that desire products grown and delivered locally.

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<sup>1</sup> "Shelf Life Studies: Herbs," Windham Packaging, LLC.

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***Potential Growing Capacity***

Consistent year round growing that adheres to our stringent sustainability protocols occurs in greenhouse locations in Indiana, New Jersey, Michigan, and Wisconsin. The combination of: (1) our 5-acre, 200,000 square ft., flagship greenhouse location in Belvidere, NJ ("Flagship Facility"); (2) our recently acquired 5-acre, 200,000 square ft., Heartland Facility in Grand Rapids, Michigan ("Edible Garden Heartland"); and (3) over 480,000 square feet of available growing capacity in contracted greenhouse space from contract growers, enables us to use standardized methods and a suite of proprietary technology innovations to operate these hydroponic greenhouses and deliver consistent, fresh produce. Although we have access to this growing capacity at our contracted greenhouses, we do not use all of this capacity at any one time. We work with the contract growers to have products grown in locations that are near our customers, and because of changes in customer demand or the ability of the contract grower to meet the terms of our purchase orders, the locations where our products are grown change over time. We believe we have sufficient potential growing capacity with contract growers, at Edible Garden Heartland and at our Flagship Facility to supply products to our existing customers.

Since January 1, 2022, we have grown or purchased products grown in the following locations and with the following potential growing capacity:

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| **Location** | **Growing capacity**  | **Operated by** |
| Flagship Facility (Belvidere, New Jersey) | 5 acres | Edible Garden |
| Edible Garden Heartland (Grand Rapids, Michigan) | 5 acres | Edible Garden |
| Francesville, Indiana | 3 acres | Contract grower |
| Grand Rapids, Michigan | 6 acres | Contract grower |
| Hixton, Wisconsin | 3 acres | Contract grower |

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***Order Process***

We rely on long-term relationships with contract growers to grow our herbs and produce, but have no formal long-term contracts with these growers. We classify our relationships with growers as "long term" because of the length of the personal working relationship between members of our management team and the growers. In some cases, these relationships began more than five years ago. While the personal relationships are long term, we typically do not have formal written contracts with these growers. Instead, we and the growers use purchase orders to transact business. Our growing relationships require our produce to be grown in strict accordance with our proprietary growing process and to our specifications, but otherwise leaves control over the growing process to the contract growers.

We use our GreenThumb software to analyze year-over-year and trending sales data to develop customer-specific and aggregate product-specific forecasts. Each week, we provide our contract growers an estimated forecast that the grower can use to determine the quantity of herbs or produce it will sow. We use the same forecasts to determine what products to grow in the facility in Belvidere, New Jersey and the Heartland Facility. The quantity of products sown will later be used to fill a purchase order. The forecast precedes any purchase order from us or the customer because the products take time to grow and customers in the industry adjust their orders frequently to attempt to meet demand without taking on excess perishable inventory.

We typically receive purchase orders from our customers one to two weeks prior to harvest of the products. If we are using a contract grower, we then submit a purchase order to the grower to fulfill the order and choose the grower based on the proximity of the contract grower to the specific customer and the grower's ability to fulfill the order. The contract grower is not obligated to accept any orders, or any certain minimum order, that we submit to the grower. The contract grower bears the inventory risk and risk of loss during the growing process. We take title of the produce after inspection has been made in accordance with the specifications agreed to by both parties. However, the contract grower is responsible for any customer rejections of products upon final delivery, and we do not pay the contract grower for products that are rejected by our customers. We pay the contract growers based on the number of products grown and accepted by the customer, and we are not otherwise financially obligated to the contract grower. Although it is not our practice to do so, we can terminate the purchase orders we submit to contract growers at any time and for any reason.

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If the contract grower has not grown enough of a specific product to fulfill a purchase order, we attempt to supplement the order with products from other growers or the New Jersey facility to meet the customer's order. We only pay the contract grower for the number of products we purchase from them. If we are unable to meet the customer's order, the customer typically finds another source of the product, which may harm our reputation with the customer but does not result in us incurring costs for the order.

If the contract grower has grown more of a specific product than is needed to fulfill a purchase order, we attempt to supplement other purchase orders that may need more of that product. Ultimately, if the contract grower sows too much of one crop than is needed to fill the purchase order, the contract grower must absorb those costs.

***Flagship Facility in Belvidere, New Jersey***

In addition to our contract growers, we operate a 5 acre Flagship Facility in Belvidere, New Jersey, which began commercial operations in 2015. Our facility incorporates a hydroponic gutter system developed in Holland for the exclusive production of herbs. The Flagship Facility also includes a cold storage freezer which allows us to package herbs for our distribution partners and a 20,000 sq. ft packhouse, which is under construction. Because we control the growing and shipping processes at this facility, we bear inventory risk, risk of loss, and other risks for the produce grown at this facility.

We are currently party to an ongoing, informal arrangement with our predecessor company, Edible Garden Corp., whereby we made lease payments of approximately $15,500 per month and $15,300 per month during 2022 and 2021, respectively, to the Landlord of the land on which our Flagship Facility is built and for which our predecessor company is the lessee. We effectively rent the property on a month-to-month basis with no set term. We do not have a lease in place directly with the lessor of the property that gives us the right to operate the property, and there is no written agreement between us and our predecessor company or us and the Landlord describing this arrangement. We have not entered into a sub-lease or assignment of the agreement between our predecessor company and the Landlord, and we are not a party to or a beneficiary of the original lease between our predecessor company and the Landlord. We have been operating under this arrangement with the lessor for more than one year and do not expect to lose access to the property. We believe we will be able to continue operating the property because our operations and monthly payments benefit the current lessee, our predecessor company, and Landlord. Our predecessor company benefits from our effective assumption of the lease, because we are making lease payments that the predecessor company would otherwise be obligated to pay. In addition, an affiliate of our predecessor company, Sament Capital Investments, Inc. ("Sament"), is a creditor of ours, and our ability to repay amounts owed to Sament or increase the value of its investment in us depends in part on our ability to continue operating at the facility. From the Landlord's perspective, it has been receiving consistent lease payments from an operator of the property since at least 2015 and from us for over two years, and many of the same individuals that worked for our predecessor company at the New Jersey facility continue to work at the facility as Edible Garden employees. If the Landlord did not assign the current lease or renegotiate a new lease with us, the Landlord would have to find another suitable tenant for the facility, which could result in additional costs to the Landlord or the risk of holding a vacant property. We expect to have the lease assigned to us once the Landlord obtains the permits necessary to complete construction of the packhouse. We do not know when those permits may be issued and cannot predict with certainty the timing of the expected assignment or the conditions upon which the Landlord's consent to the assignment will be based.

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Construction began on the packhouse at the New Jersey facility prior to our inception. Under the terms of the lease between our predecessor company and the Landlord, our predecessor company paid to build a foundation and construct the prefabricated building for the packhouse. Although the packhouse building is standing, it requires utilities and other improvements before we can use the building for our business. The Landlord was responsible for obtaining the permits required from the county and municipal governments for the construction. The permits used when the packhouse building was constructed have expired, and we believe that the Landlord will need to fund the widening of the road in front of the property and the addition of traffic lights as safety measures before new permits will be issued. After the applicable permits from the county government have been obtained by the Landlord, the construction of the packhouse should take between six months and one year to complete. We anticipate investing between $700,000 to $900,000 in capital expenditures to add utilities such as HVAC, electrical service, septic system, and a well to complete the packhouse. We have not yet incurred expenses on construction of the packhouse. The Landlord is aware of the construction of the packhouse. We do not anticipate construction on the packhouse will impact our ability to operate the property.

We source the raw materials for production from multiple suppliers, including Ball Horticulture, Brandt Box and Paper, PPC Flexible Packing, Sumit Plastics, Sun Gro Horticulture, Sunshine FPC, and expect that those supplies will continue to be available for our use.

***Heartland Facility in Grand Rapids, Michigan***

On August 30, 2022, through the Michigan Subsidiary, we acquired a five-acre greenhouse facility in Grand Rapids, Michigan, which will operate as Edible Garden Heartland. After Edible Garden Heartland is fully transitioned to growing our herbs and lettuce products, which is expected during the first half of 2023, it will add approximately five acres of directly controlled growing capacity to our operations. We believe the addition of Edible Garden Heartland will contribute to higher gross margin over time. We expect lower cost of sales by growing, picking and shipping our products instead of working with a contract grower to grow those products. In addition to serving customers in the Midwest, the facility will house a research and development center focused on improving existing products, developing new products, innovations in plant-based protein and nutraceuticals, and applying advanced agricultural technologies.

**Distribution**

Edible Garden utilizes advanced, sustainable, environmentally controlled indoor agriculture to grow and process organic herbs and lettuces. Through our extensive distribution platform and proprietary predictive modeling, we pick, pack and ship to big box retailer's distribution centers in our network. We distribute our products through more than 50 retail partners including national big box retailers, regional grocery stores, distributors, restaurants and local purveyors.

Our growing and distribution plans are designed to get our locally grown products to our retail partners and consumers as soon as possible after harvest. We want to make sure that our products arrive as fresh, undegraded and nutrient rich as when they were harvested. In order for us to meet this objective we strive to deliver our products to market in no less than 24 hours from when they are picked. We currently rely on our own fleet of delivery vehicles, as well as other independent shipping operators. We continue to build a broader footprint and intend to increase our logistics and shipping fleet to include more energy efficient vehicles that will use less fuel and leave less waste in our environment. Our greenhouse farms have to be strategically located in order for us to deliver on this objective.

We hold our transportation-related assets and manage the distribution of our products through our wholly-owned subsidiary, EG Transportation, LLC. This entity owns and leases the delivery vehicles we use to distribute products and holds the liability insurance needed for the transportation aspects of our business. As of December 31, 2022, we have 11 delivery vehicles and less than 10 drivers.

**Competition**

The U.S. fruits and vegetable markets are highly competitive. Our main competitors are Aero Farms, Gotham Greens, Bright Farms, Bowery Farms, Plenty. Many of these companies may have significantly greater financial, technical, marketing and distribution resources, as well as greater experience in the industry than we have. Our services may not be competitive with their services. In addition, our current and potential competitors may establish cooperative relationships with larger companies, to gain access to greater development or marketing resources. Competition may result in price reductions, reduced gross margins and loss of market share. However, we believe the following elements will give us a competitive advantage in the rapidly growing CEA category:

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***Customer Relationships and Brand***. Our herbs and lettuce product portfolio is sold through our supermarket partners including Walmart, Target, Meijer, Wakefern Food Corporation/ShopRite King Kullen, D'Agostino's, Kroger, Food Bazaar and food distributors. These key partners make up the majority of our revenue. We believe that we will continue capture more opportunities with these partners as we expand our business and product offering. We also utilize an efficient marketing mix of social media, in-store signage and premium shelf positioning to drive consumer awareness and reinforce purchases.

***Value Proposition***. We are part of repositioning the way food is grown, packaged and distributed. We believe this is the next generation of farming that is good for people and our planet. We believe scaling our grow operations in a fully controlled environment will result in a higher optimization on yields together with freshness, taste and texture. In addition, our proposition focuses on intelligent, common-sense approach to growing more with less resources. Our Zero Waste Inspired approach is in everything we do - from innovative recyclable packaging across our product portfolio and enterprise, using less water, electricity and land, zero pesticides and less road miles. Simply Local Simply Fresh delivers all of this together with our local farming partners with an accessible, traceable, organic product at a competitive price.

***Technology Platform***. Technology and data are competitive differentiators for Edible Garden. Rather than relying on "off-the-shelf" systems, we have created a data-driven technology platform to power traceability and integration across plant production, operations, data analytics and demand planning. Our proprietary platform allows us to consistently monitor and control plant production inputs across our Flagship Facility as well as integrate with all of our contract growers. This allows us to scale throughput with disruption and capture data analytics for better yield and predictability.

***Management Team***. Our management team has worked together for 7 years. Jim Kras, our CEO and Mike James, our CFO, have a strong working relationship and work collaboratively to advance our growth. We believe that they bring strong senior leadership in their respective roles and responsibilities and have been instrumental in our success to date, including growing our business during a pandemic. Our management team is committed to developing young talent in our business and are committed to continue this employee development as the organization continues to grow.

**Industry Overview**

***Traditional Outdoor Agriculture***. The traditional agriculture industry in the United States consists primarily of field crop farms. According to the USDA, the United States had almost 900 million acres of farmland in 2019. Over the last few decades this acreage has shifted and consolidated to larger and larger farms. Today, large-scale family farms make up just 3 percent of farms in the United States and 42 percent of overall production. Production of produce is also regionalized. The American Farm Bureau Foundation reports that Monterey County in California, home of Salinas Valley, supplies 61% of all leaf lettuce and 56% of head lettuce in the United States.

This regional dependency contributes to long, complex distribution chains, with some produce traveling thousands of miles over several days before reaching store shelves. With the environmental and social macrotrends mentioned herein, we believe traditional field farming is also less prepared to support a growing world population, due to its reliance on large amounts of land and water, both of which are becoming scarcer and less available for food production. We also believe consumer trends continue to want to know where their food comes from together with traceability and food safety (food pathogens - listeria and salmonella) are becoming more important to all business partners and consumers.

**Traditional Greenhouse Operators and Controlled Environment Agriculture (CEA)**. CEA has gained market share in recent decades as an alternative source of food production. This consists of both greenhouse operating companies and more high-tech greenhouses selling to retailers and grocery stores throughout the country. Despite growth in select crops, greenhouses have not been able to take meaningful market share from traditional field farms in the United States or in the leafy greens market until now. This is a function of shifting consumer trends together with the realization that the planet has finite natural resources. Overall consumer behavior is shifting away from commoditized produce as they associate consumer branded produce as sustainable, safe, organic, pesticide free all year long that is good for them and the social fabric of our planet. That's why we believe as a market innovator we can continue to capture market share and brand awareness.

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**Growth Strategy**

We are at an important point as we are operating at commercially viable scale and ready for the next level of growth with additional greenhouses and capabilities. Our business plan is to develop, own and operate commercial greenhouses across North America through a combination of organic and acquisitive growth. Presently and in the near term our greenhouse operations will continue to grow herbs and lettuces. We expect to scale our business by building or acquiring a portfolio of new, fully scaled commercial greenhouses across the Northeast, Midwest, Mid-Atlantic, South and Southwest. We plan to locate farms with easy access to distribution centers and major population demographic centers and to sell products into established supermarkets partners and distributors. We expect these full-scale commercial greenhouses to have more production capacity than our current facility and contract growers and to benefit from economies of scale. We believe this fledgling industry is at an early stage of consolidation and we have the opportunity with our strong channels to market, retailing expertise and technology in CEA to be a leader in this space.

Site selection for future facilities is based on a detailed methodology that weighs factors we believe to be indicative of farm unit economics, operational reliability and market accessibility, among other criteria. Examples include customer access and market depth within a 300-mile radius. The availability, reliability and cost of electricity; construction costs, speed to build, site infrastructure and permitting; local labor are further inputs to our selection process.

**Intellectual Property**

We rely on a combination of trademark laws, trade secrets, confidentiality provisions, and other contractual provisions to protect our proprietary rights, which are primarily our inventions, brand names, marks, and proprietary pods and seeds. Edible Garden owns trademarks, three pending patent applications, and two issued patents in the United States. The issued patents include claims related to greenhouse management software and systems (GreenThumb) and are expected to remain in force until November 2040, provided that all required maintenance fees are paid. One of the three pending patent applications is a recently filed continuation patent application related to greenhouse management software and systems. If this pending patent is granted, it would remain in force until at least November 2040, provided that all required maintenance fees are paid. The two remaining patent applications, a design patent application and a utility patent application, are related to automatically watering display stands for herbs and other vegetation. Should these pending patent applications be granted, the design patent would remain in force until February 2035 and the utility patent would remain in force until February 2041, provided that all required maintenance fees are paid for the utility patent.

**Research and Product Development**

Edible Garden recognizes the consumer acceptance and growth opportunities associated with plant-based derivatives of the products/plants it currently grows. As a leader in sustainability, research and development is a key focus for us moving forward. We sell plant-based nutraceuticals under the Vitamin Way brand. These products are produced by a co-manufacturer according to our specifications. We expect to grow our nutraceuticals product suite with additional products by working with Nutracom, an established developer and contract manufacturer of nutritional products, on new formulations. We believe that expanding into multiple product lines and diversifying from fresh produce to shelf-stable products will increase revenue opportunities.

**Our Sustainability Plan - Renew, Reuse, Recycle & Innovate**

We adhere to an Environmental, Social, and Governance ("ESG") criteria and set of standards for our operations that is socially conscious. Our Environmental criteria considers how our company performs as a steward of nature. The Social criteria examines how we manage relationships with employees, suppliers, customers, and the communities where we operate. Our Governance deals with the company's leadership, executive pay, audits, internal controls and stockholder rights.

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***Environment***: We operate our CEA greenhouse facilities with the goal of being a good steward of nature. With our closed loop systems, we recapture and recycle water into our growing process. We are pesticide-free in our Flagship Facility, Edible Garden Heartland and all contracted grow facilities. In vertical greenhouses, we are able to grow more herbs and lettuce per square foot than legacy farms. Our GreenThumb software allows us to be more efficient in our packing and shipping process with the goal of reducing excess emission of greenhouse gases and carbon that would result from more trucks transporting our products. The packaging we use is intended to reduce food spoilage and food waste while utilizing bio-based materials, leading to a reduction of plastics in the packaging. In the future, we intend for our greenhouses to take advantage of areas with renewable energy alternatives such as solar, wind, and hydro together with suppliers that support greenhouse gas-free electricity generation, when available. We plan to continue to deliver innovation in the products we use for our packaging and potting, further eliminating plastics from our products with recycled, biodegradable packaging. We intend to migrate to alternative fuel vehicles for our shipping needs by 2030. We commit to be carbon neutral by 2030, meaning that any carbon dioxide released into the atmosphere from our business activities will be balanced by an equivalent amount being removed. Beyond our own operations, we consider the business activities of our suppliers, distributors, and other partners to be an important component of our overall environmental impact. We continually try to find partners who share our vision and commitment to sustainability. Accordingly, we prefer to work with suppliers and distributors that mirror our sustainability and carbon-neutrality goals. Many of our major retailers and suppliers have made public commitments to sustainability, net-zero, and zero-waste with a horizon timeline, and we seek partners who are taking a similar approach to reducing their environmental impact and carbon footprint. Although we ultimately rely on our partners to maximize their efficiencies, we drive reductions in overall carbon emissions and food miles by growing and delivering from facilities that are as close to our supermarket partners' distribution centers as possible. We are working to help those partners who are not currently pursuing sustainability goals to move in that direction by raising awareness and providing information and guidance. However, we recognize that some of our smaller partners are subject to resource limitations and we will not require all of them to achieve our 2030 goals.

***Social - Employees***: Being local and producing year-round not only allows for competitive produce prices and the opportunity for more consumers to access high quality produce, it also allows our facilities to offer full time, indoor jobs to members of the community, offsetting the seasonal work offered by more traditional agriculture businesses. We are also committed to paying at a living wage, hiring locally, and promoting internally by investing in internal and community training programs to train employees with a skill set that will allow them to be part of the 21st-century workforce in the next generation of farming. We are committed to work with all of our employees to help us understand any issues and to develop and enhance our indoor agriculture training and internal development opportunities, and to advance this commitment, created a committee of employees that provides direct feedback to our management team about potential improvements for our employees.

***Social - Community***: We will prioritize underserved communities whether urban or rural where our facilities are located. As a company we will continue to develop our corporate mission of giving back to these communities. For example, beginning in Fall 2022, we are partnering with the University of Michigan's School of Environment & Sustainability to offer students an opportunity to work with our team at Edible Garden Heartland to develop and implement initiatives that address the environmental and societal impacts of the food industry. Charitable contributions to food banks, school systems, community anti-hunger and social reintegration programs are also part of giving back to these communities. For example, we partner with Abilities of Northwest Jersey Inc. to offer skills training in hydroponics and greenhouse farming at our Belvidere, New Jersey, greenhouse for individuals with disabilities, and we were named the Employer of the Year for 2020 by Abilities of Northwest Jersey. These initiatives aim to provide better economic and social results for these underserved communities. Our strategy will be to partner with both local, state and federal programs to help identify investment zones or redevelopment areas that would benefit from one of our greenhouse facilities in their community because of the expected local economic development and employment that would be associated with a new facility. We expect that each of our facilities will employ approximately 35-40 employees in these communities. We plan to consider underserved communities in all our future site selection process.

***Governance***: Edible Garden looks at diversity as a competitive advantage and strives to be fully supportive of diversity endeavors at all levels of the company. This alignment and focus will aid us in steering our long-term corporate actions in the right direction. Our goal is to build diversity across the whole enterprise with specific focus on the management team and board of directors. Our nominating and governance committee is responsible for overseeing these fundamental areas.

***2022 and 2021 Sustainability, Waste Reduction and Carbon Emission Avoidance***

The following measures demonstrate Edible Garden's ongoing commitment to sustainability, waste reduction and carbon neutrality for 2022:

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| The equivalent of 6 passenger car emissions were avoided by route optimization. |
| Reduced our overall fuel demand by 8,100 gallons of diesel fuel by route optimization. |
| Conserved 200 barrels of crude oil by route optimization. |
| 136 metric tons of virgin plastic use was avoided by a simple packaging change (hydro basil cup). |
| Recycled 32 metric tons of mixed recyclables including corrugate, plastic, and glass by implementing a recycling program. |
| Avoided 2 tons of food waste through a new donation program to local food pantries. |
| Reduced overall pesticide use by 30% using an Integrated Pest Management system. |
| Through recirculating water systems, we were able to reduce the amount of water used by 936,000 gallons. |

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Total estimated emissions avoided: 539.3 metric tons of CO<sub>2</sub>**.** 

The following measures demonstrate Edible Garden's ongoing commitment to sustainability, waste reduction and carbon neutrality for 2021:

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| The equivalent of 14 passenger cars emissions avoided by route optimization. |
| Reduced our overall fuel demand by 21,000 gallons of diesel fuel through route optimization. |
| Conserved 500 barrels of crude oil by roue optimization. |
| 5.5 tons of virgin corrugate materials avoided by removing an inch from every box height. Also allowed us to ship 20% more product on a pallet. |
| 38 tons of materials were recycled and not destined for landfills. |

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Total estimated emissions avoided: 442 metric tons of CO<sub>2</sub>**.**

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**Regulatory Compliance** 

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 are products are distributed. In particular we are subject to 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 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.

**Legal Proceedings**

From time to time, we may be party to or otherwise involved in legal proceedings arising in the ordinary course of business. Management does not believe that there is any pending or threatened proceeding against us, which, if determined adversely, would have a material adverse effect on our business, results of operations or financial condition, except as described below.

On February 9, 2023, the breach of contract claim brought by Dennis Rodrigues, a former officer and director, was dismissed by the Superior Court of New Jersey in Warren County. Prior to the dismissal, we paid an aggregate of $235,000 pursuant to a settlement agreement we entered into with the plaintiff.

The Company is party to an action filed against us on November 29, 2021 by Green City Growers Cooperative in the Court of Common Pleas in Cuyahoga County, Ohio. The plaintiff seeks damages of approximately $600,000 for an alleged breach of a supplier agreement. The Company denies the allegations and filed a counterclaim against the plaintiff on January 3, 2022. The Company believes it has meritorious defenses and plans to vigorously defend itself. This action arises from our entry into two agreements with the plaintiff. First, we entered into the Assumption Agreement in May 2021, whereby we assumed a liability of $78,976 that Arch City owed to the plaintiff. Second, also in May 2021, we entered into a supplier agreement with the plaintiff (the "Supply Agreement"), under which we agreed to purchase an aggregate of 6.0 million units of herbs and lettuce that were processed by the plaintiff over a three-year period according to agreed-upon prices. The plaintiff was one of our suppliers of cut basil, sage, rosemary, thyme and parsley during this time. On August 2, 2021, the plaintiff sent a notice to us terminating the Supply Agreement in accordance with its terms. Following the termination of the Supply Agreement, we do not have any written supply agreements with the plaintiff. Management concluded that a loss related to this matter was probable and reasonably estimable as of December 31, 2022. The accrual for the loss contingency totaled $120,000 as of December 31, 2022. On March 23, 2023, we entered into a settlement agreement with and paid $120,000 to Green City Growers Cooperative.

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**Corporate History and Structure**

Our business is a successor business of a subsidiary of Terra Tech Corp. (now known as Unrivaled Brands, Inc.)("Terra Tech"). We purchased substantially all of the assets of Edible Garden Corp., a subsidiary of Terra Tech, from Terra Tech as of March 30, 2020 for approximately $3.0 million.

Our company was incorporated on March 28, 2020 in the State of Wyoming as Edible Garden Inc. We subsequently changed our name to Edible Garden AG Incorporated on July 20, 2020, and we effected a stock split of 20 for 1 as of October 14, 2020. Effective July 7, 2021, our parent company, Edible Garden Holdings Inc., merged with and into us with us as the surviving entity. We converted into a Delaware corporation effective July 12, 2021. On September 8, 2021, we effected an additional forward stock split of 20 for 1. On January 26, 2023, we effected a reverse stock split of 1 for 30. As of December 31, 2022, we had 77 full-time employees.

Our principal address is 283 County Road 519, Belvidere, NJ 07823. Our telephone number is (908) 750-3953. We maintain a website at *https://ediblegardenag.com*. The information contained on our website is not, and should not be interpreted to be, incorporated into this prospectus. The SEC maintains a website at *www.sec.gov* that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

**MANAGEMENT**

The following table sets forth certain information about our executive officers, key employees, directors, and director nominees as of the date of this prospectus.

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| **Name** | **Age** | **Position** |
| James E. Kras | 54 | Chief Executive Officer, President and Director |
| Michael James | 64 | Chief Financial Officer, Treasurer, Secretary and Director |
| Mathew McConnell | 64 | Director |
| Deborah Pawlowski | 62 | Director |
| Ryan Rogers | 41 | Director |

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**Executive Officers and Directors**

***James E. Kras.*** Mr. Kras is one of our founders, and has served as Chief Executive Officer and a director since our inception in March 2020. Mr. Kras served as President and Chief Marketing Officer of Edible Garden Corp., a wholly-owned subsidiary of Unrivaled Brands (formerly Terra Tech), from March 2016 to March 2020. Prior to that service, Mr. Kras held senior leadership positions in marketing at global leaders Ajinomoto and The Bountiful Company (formerly The Nature's Bounty Company). Mr. Kras started his career on Madison Avenue in advertising with companies including Grey Advertising and Dentsu/Carat. As our Chief Executive Officer and one of our founders, Mr. Kras brings to the Board of Directors extensive knowledge of our products, structure, and culture as well as years of expertise in the industry.

***Michael James.*** Mr. James is one of our founders, and has served as Chief Financial Officer and a director since our inception in March 2020. Mr. James also currently serves on the board of directors of Guided Therapeutics, Inc. as chairman, audit committee chair and as a member of the compensation committee. Mr. James previously served as Chief Financial Officer of Unrivaled Brands, Inc. (formerly Terra Tech) from February 2012 to March 2020. In addition to this role, Mr. James served as the Chief Executive Officer and Chief Financial Officer of Inergetics, Inc. from June 2012 until January 2016. Previously, Mr. James served as Chief Executive Officer of Nestor, Inc. ("Nestor"), where he successfully completed a financial restructuring of Nestor prior to its sale in September 2009 from the Receiver's Estate in Superior Court of the State of Rhode Island. He also served on Nestor's Board of Directors from 2006 to 2009. Mr. James was the Managing Partner of Kuekenhof Capital Management, LLC, a private investment management company, from 1999 to 2015. During his career, Mr. James has served as a Partner at Moore Capital Management, Inc., a premiere private investment management company; Chief Financial and Administrative Officer at Buffalo Partners, L.P., a private investment management company; and Treasurer and Chief Financial Officer of National Discount Brokers. Mr. James began his career in 1980 as a staff accountant with Eisner, LLP. Mr. James is a retired CPA. As our Chief Financial Officer and one of our founders, Mr. James brings to the Board of Directors extensive knowledge of our products, structure, and culture as well as years of expertise in the industry.

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***Mathew McConnell***. Mr. McConnell has served as one of our directors since May 2022 and as Chief Executive Officer of Marco Polo Securities, Inc.'s MPS Chaperone and Distribution business since March 2020. In this position, he oversees international equities, trading, and capital markets processes for this U.S. broker-dealer offering cross-border regulatory and distribution solutions to a robust network of local securities firms across the world. From 2018 to 2020, Mr. McConnell served as Managing Director, Head of Equity Capital Markets of Tellimer (Exotix Capital), including as a member of its U.S. executive committee. Prior to Tellimer, Mr. McConnell was Head of Capital Markets at Auerbach Grayson from 2014 to 2018. Mr. McConnell was chosen to serve as a director because of his extensive international financial and capital markets experience, which we believe will continue to be important as we implement our growth strategy.

***Deborah Pawlowski***. Ms. Pawlowski has served as one of our directors since October 2022 and has more than thirty years of experience in investor relations, capital markets, marketing, strategic planning, leadership coaching and management. For over 20 years, she has served as the founder, chairman and chief executive officer of KEI Advisors, LLC, an investor relations and business advisory firm. She has also held senior executive positions, leading the investor relations programs at National Fuel Gas Company, a diversified energy company, and American Precision Industries Inc., a former NYSE-listed, diversified manufacturing company. She is currently a director for the Allegany Insurance Group and member of the Board and Secretary of the Combat Wounded Veterans Challenge. She is a former member of the Board of Directors of the National Investor Relations Institute (NIRI), past President of the NIRI Virtual Chapter, and currently serves as Advocacy Ambassador for the NIRI Virtual Chapter Board. Ms. Pawlowski is an inaugural NIRI Investor Relations Charter recipient, earning the right to use the Investor Relations Charter (IRC™) credential. Ms. Pawlowski was chosen to serve as a director because of her extensive experience with investor relations and in the capital markets, which we believe will be essential for our growth strategy.

***Ryan Rogers***. Mr. Rogers has served as one of our directors since May 2022 and has spent nearly two decades working in the food retail industry in various merchandising, sales and sourcing positions. Since June 2021, he has served as a brand manager for FDM Sales, a brand development organization helping accelerate growth for food and beverage brands. Prior to joining FDM Sales, Mr. Roger spent 18 years at Target Corp, where he held merchandising and sourcing roles of increasing responsibility within its food division, including produce buyer, where he led the growth strategy for packaged salads, vegetarian, and healthy snacking. Mr. Rogers was chosen to serve as a director because of his extensive experience in our industry and his ability to help organizations like ours accelerate growth.

**Key Employees**

***Scott Prendergast***. Mr. Prendergast has served as our Chief Data Officer since June 2020. Prior to joining Edible Garden, Mr. Prendergast served as VP of Technology for Springbok Energy Partners and Director of Digital Strategy & Analytics for Moroch Partners. Some of Mr. Prendergast's accomplishments include designing and developing real time well tracking and management portal utilized by Springbok Energy Partners to track well data and optimize mineral right valuations in real time, as well as developing the GreenThumb system that manages real time greenhouse inventory and activities for us and many of our partner farms. Mr. Prendergast started his career after graduating Worcester Polytechnic Institute with a B.S. Aerospace Engineering with a position with Bechtel Corp in the Nuclear Piping Analysis department, working on refueling and NRC compliance at Comanche Peak Nuclear Power Plant and Browns Ferry Nuclear Power Plant.

***Stacey Eng***. Ms. Eng has served as the Vice President of Logistics for us since inception and our predecessor company since March 2016. Ms. Eng previously worked as the Director of Operations for Inergetics, where she was responsible for developing the company's supply chain and vendor relationships. Ms. Eng's accomplishments include building an integrated supply chain to service a complex network of greenhouses throughout the United States while constantly streamlining our business. She has continually ensured that all deliverables were met on time for any size project, reduced lead-time for delivery in conjunction with implementing cost-cutting measures that drove gross margin improvements. Ms. Eng holds B.S. in Supply Chain Management & MIS from Rutgers University where she graduated Magna Cum Laude.

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**CORPORATE GOVERNANCE**

**Director Independence**

Our current Board of Directors consists of James Kras, Michael James, Mathew McConnell, Deborah Pawlowski, and Ryan Rogers. Ms. Pawlowski and Messrs. McConnell and Rogers are considered independent based on the listing standards of Nasdaq. In order to promote open discussion among independent directors, our Board has a policy of regularly conducting executive sessions of independent directors at scheduled meetings led by the lead independent director and at such other times requested by other independent directors. Executive sessions do not include Messrs. Kras or James.

**&nbsp;&nbsp;&nbsp;&nbsp;** 

**Information Regarding Meetings of the Board and Committees**

During 2022, our Board held seven meetings. All of our directors attended all meetings of the Board and the committees on which he or she served during 2022. We do not have a formal written policy with respect to directors' attendance at our annual meetings of stockholders.

**Committees**

Our Board has established three standing committees: audit committee; compensation committee; and nominating and governance committee. Each of these committees consist solely of independent directors. We have adopted written charters for each of these committees that are available on our website, ediblegardenag.com. Our Board may establish other committees as it deems necessary or appropriate from time to time. The following table provides membership information for our committees and the number of meetings held by each committee in 2022:

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|  | **Audit**<br>**Committee** | **Compensation**<br>**Committee** | **Nominating &**<br>**Governance**<br>**Committee** |
| Numbers of meetings held: | 3 | 4 | 0 |
| James E. Kras |  |  |  |
| Michael James |  |  |  |
| Mathew McConnell![edbl_posamimg40.jpg](edbl_posamimg40.jpg) | ![edbl_posamimg31.jpg](edbl_posamimg31.jpg) | ![edbl_posamimg34.jpg](edbl_posamimg34.jpg) | ![edbl_posamimg35.jpg](edbl_posamimg35.jpg) |
| Deborah Pawlowski | ![edbl_posamimg39.jpg](edbl_posamimg39.jpg) | ![edbl_posamimg32.jpg](edbl_posamimg32.jpg) | ![edbl_posamimg36.jpg](edbl_posamimg36.jpg) |
| Ryan Rogers | ![edbl_posamimg38.jpg](edbl_posamimg38.jpg) | ![edbl_posamimg37.jpg](edbl_posamimg37.jpg) | ![edbl_posamimg33.jpg](edbl_posamimg33.jpg) |
| &nbsp;&nbsp;&nbsp;&nbsp;![edbl_posamimg28.jpg](edbl_posamimg28.jpg)= Chair | &nbsp;&nbsp;&nbsp;&nbsp;![edbl_posamimg29.jpg](edbl_posamimg29.jpg)= Member | &nbsp;&nbsp;&nbsp;&nbsp;![edbl_posamimg29.jpg](edbl_posamimg29.jpg)= Member | ![edbl_posamimg30.jpg](edbl_posamimg30.jpg)= Audit Committee Financial Expert |

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***Audit Committee***

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| The audit committee is responsible for, among other matters: | The audit committee is responsible for, among other matters: |
| ·  | appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; |
| ·  | discussing with our independent registered public accounting firm the independence of its members from its management; |
| ·  | reviewing with our independent registered public accounting firm the scope and results of their audit; |
| ·  | approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; |
| ·  | overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the interim and annual financial statements that we file with the SEC; |
| ·  | reviewing and monitoring our accounting principles, accounting policies, financial and accounting controls, and compliance with legal and regulatory requirements; |
| ·  | coordinating the oversight by our board of directors of our code of ethics and our disclosure controls and procedures; |
| ·  | establishing procedures for the confidential and/or anonymous submission of concerns regarding accounting, internal controls or auditing matters; and |
| ·  | reviewing and approving related-person transactions. |

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Mathew McConnell, Deborah Pawlowski and Ryan Rogers serve on the audit committee and meet the definition of "independent director" for purposes of serving on an audit committee under Rule 10A-3 under the Exchange Act and Nasdaq rules. Mr. McConnell serves as the Chair of the audit committee. Mr. McConnell qualifies as an "audit committee financial expert," as such term is defined in Item 407(d)(5) of Regulation S-K.

***Compensation Committee***

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| The compensation committee is responsible for, among other matters: | The compensation committee is responsible for, among other matters: |
| ·  | reviewing key employee compensation goals, policies, plans and programs; |
| ·  | reviewing and approving the compensation of our directors and executive officers; |
| ·  | reviewing and approving employment agreements and other similar arrangements between us and our executive officers; and |
| ·  | appointing and overseeing any compensation consultants or advisors. |

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Mathew McConnell, Deborah Pawlowski, and Ryan Rogers serve on the compensation committee and meet the definition of "independent director" for purposes of serving on a compensation committee under Nasdaq rules. Ms. Pawlowski serves as the Chair of the compensation committee.

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***Nominating and Governance Committee***

The nominating and governance committee is responsible for assisting the Board in identifying qualified individuals to become directors, in determining the composition of the Board and in monitoring the process to assess Board effectiveness. Mathew McConnell, Deborah Pawlowski, and Ryan Rogers serve on the nominating and governance committee and Mr. Rogers is the Chair of the committee.

**Board Leadership Structure**

Our Board of Directors and management believe that the choice of whether the Chair of our Board of Directors should be an executive of the Company, or a non-executive or independent director, depends upon a number of factors, taking into account the candidates for the position and the best interests of the Company and its stockholders. Mr. Kras serves as the Board Chair. Mr. Kras's operating and leadership experience as an officer and director of our company since its inception and combined seven years of experience with us and our predecessor company made him a compelling choice for Board Chair. Mr. McConnell serves as lead independent director of our Board of Directors. As lead independent director, Mr. McConnell presides over executive sessions of the independent directors and serves as a liaison between the independent directors and our management team.

**Risk Oversight**

Our Board oversees a company-wide approach to risk management. Our Board will determine the appropriate risk level for us generally, assess the specific risks faced by us and review the steps taken by management to manage those risks. While our Board has ultimate oversight responsibility for the risk management process, its committees will oversee risk in certain specified areas.

**Compensation Committee Interlocks and Insider Participation**

None of our officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more officers serving as a member of our board of directors.

**Code of Ethics**

Our Board has adopted a Code of Ethics that applies to our directors, officers and employees. A copy of this code is available on our website. We intend to disclose on our website any amendments to the Code of Ethics and any waivers of the Code of Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions.

**Director and Officer Indemnification Agreements**

We intend to enter into separate indemnification agreements with our directors and executive officers, in addition to the indemnification provided for in our certificate of incorporation and bylaws. These agreements, among other things, require us to indemnify our directors and executive officers for certain expenses, including attorneys' fees, judgments, penalties, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of our directors or executive officers or as a director or executive officer of any other company or enterprise to which the person provides services at our request. The indemnification agreements and our certificate of incorporation and bylaws require us to indemnify our directors and officers to the fullest extent permitted by Delaware law.

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**EXECUTIVE AND DIRECTOR COMPENSATION**

**Summary Compensation Table**

The following table provides information regarding the compensation paid for the years ended December 31, 2022 and 2021 to each of the executive officers named below, who are collectively referred to as "named executive officers" elsewhere in this prospectus.

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| **Name and Principal Position** | **Year** | **Salary** <br>**($)** | **Bonus ($)** | **Total** <br>**($)** |
| **James E. Kras**, | 2022 | 261538 | 500000<sup>(1)</sup> | 761538 |
| Chief Executive Officer | 2021 | 200000 |  | 200000 |
| **Michael James**, | 2022 | 261538 | 500000<sup>(1)</sup> | 761538 |
| Chief Financial Officer | 2021 | 200000 |  | 200000 |

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(1) Represents a cash bonus paid to the officer after the closing of our IPO pursuant to his employment agreement.

**Employment Agreements**

On August 18, 2021, we entered into employment agreements with Messrs. Kras and James, which were later amended on January 18, 2022. Pursuant to the employment agreements, Messrs. Kras and James will serve as Chief Executive Officer and Chief Financial Officer, respectively, for a term of two years. These agreements will automatically renew for one additional one-year period unless we or the executive provides written notice prior to the end of the term. Pursuant to these employment agreements, Messrs. Kras and James are entitled to an annual base salary of $300,000, which amount may be increased by the compensation committee or the Board in their discretion. Each executive is eligible to receive an annual cash performance bonus with a target award amount equal to 100% of his base salary in the year of performance ("Performance Bonus"). This Performance Bonus will be based on performance and achievement of Company goals and objectives as defined by the Board or compensation committee. For the years ended December 31, 2021 and 2022, no performance goals were set in advance and no Performance Bonus was awarded to Messrs. Kras or James. In addition, each executive is entitled to four weeks' paid time off pursuant to our practices for senior executives, and is entitled to the health, welfare and retirement benefits provided generally to our other employees.

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**Potential Payments Upon Termination or Change in Control**

Under the employment agreements for Messrs. Kras and James, if the executive is terminated for cause, resigns without good reason, or his employment ends due to his death or permanent disability, he will be entitled to any earned but unpaid base salary plus accrued benefits earned through the date of termination.

Under the employment agreements for Messrs. Kras and James, in the event of an executive's termination for a reason other than for cause or if an executive terminates voluntarily under one or more of the specified circumstances that constitute a good reason, the executive will receive an amount equal to two times his then-current base salary payable monthly, less any required tax withholdings, plus the pro-rata portion of the Performance Bonus earned during the calendar year of termination, and an aggregate amount equal to 12 times the applicable monthly premium for his group medical, dental and vision coverage. In addition, any stock options held by the executive will accelerate and become fully vested, and any restrictions relating to restricted stock or restricted stock units will lapse and become fully vested.

The executives are subject to non-competition and non-solicitation provisions under their employment agreements effective for the period of time equal to the greater of: (i) the period of time during which the executive is receiving any compensation or benefits from us; or (ii) a period of one year following the executive's termination of employment. In all cases, the executive's payments and benefits will be reduced, if necessary, to ensure that the payments and benefits to the executive will not be subject to the "golden parachute" excise tax imposed by Section 4999 of the Internal Revenue Code and the payments will be deductible by us.

**Outstanding Equity Incentive Awards At Fiscal Year-End**

There were no stock awards held by our named executive officers as of December 31, 2022 or 2021.

**Equity Incentive Plan**

On January 18, 2022, the Board adopted, and our stockholders approved, a comprehensive equity incentive plan (the "2022 Plan") pursuant to which we may issue up to 50,000 shares of common stock to employees, non-employee directors, and any other individuals who perform services for us until January 18, 2032. Under the 2022 Plan, we may issue awards including options, stock appreciation rights, restricted stock awards, restricted stock units, and other stock-based awards as the Board or compensation committee may determine.

***Equity Compensation Plan Information***

The following table shows the number of securities that may be issued pursuant to our equity compensation plans (including individual compensation arrangements) as of December 31, 2022:

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| **Plan Category** | **Number of securities to be issued upon exercise of outstanding options, restricted stock units, warrants and rights** | **Weighted-average exercise price of outstanding options, warrants and rights** | **Number of securities remaining available for future issuance under equity compensation plans** |
| Equity compensation plans approved by security holders | 11000<sup>(1)</sup> | $—<br><sup>(2)</sup>  | 16626 |
| Equity compensation plans not approved by security holders |  |  |  |
| Total | 11000 | $— | 16626 |

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(1) Represents the number of underlying shares of common stock associated with unvested restricted stock units awarded under the 2022 Plan.

(2) Restricted stock units do not have an exercise price and have been excluded from the calculation of weighted average exercise price.

**Director Compensation**

In the year ended December 31, 2022, compensation for our non-employee directors included an annual cash retainer of $75,000 (prorated for the time period served as directors) and a $75,000 equity grant of restricted stock granted under the 2022 Plan. We intend for the compensation committee of the Board of Directors to determine the future compensation of our independent directors.

The following table sets forth information concerning non-employee director compensation during the year ended December 31, 2022. Refer to the "Summary Compensation Table" above for compensation earned by Messrs. Kras and James in 2022.

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| **Name** | **Fees earned or paid in cash**<br>**($)** | **Stock** <br>**Awards** <br>**($)<sup>(1)</sup>** | **Total** <br>**($)** |
| Mathew McConnell | 43750 | 75000 | 118750 |
| Tracy Nazzaro<sup>(2)</sup> | 17944 |  | 17944 |
| Deborah Pawlowski<sup>(3)</sup> | 9879 |  | 9879 |
| Ryan Rogers | 43750 | 75000 | 118750 |

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(1) Represents the grant date fair value computed in accordance with the requirements of accounting for stock-based compensation. The amounts reported in this column have been computed in accordance with FASB ASC Topic 718.

(2) Ms. Nazzaro resigned from the board of directors on July 27, 2022.

(3) Ms. Pawlowski was appointed to the board of directors on October 14, 2022.

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**CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS**

The following sets forth a summary of transactions since January 1, 2021, or any currently proposed transaction, in which the Company was to be a participant and the amount involved exceeded or exceeds $120,000 and in which any related person had or will have a direct or indirect material interest.

**Working Capital Funding from Executive Officers**

We historically relied on debt financing from our officers for some of our working capital. On the following dates, we entered into promissory notes with our officers that were repaid upon the closing of the IPO prior to their stated maturity dates:

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| **Date** | **Payee** | **Annual** <br>**Interest Rate** | **Original Principal** <br>**Amount** | **Stated Maturity Date** |
| 9/1/2021 | Michael James | 12 | $25000 | 8/31/2022 |
| 9/3/2021 | Michael James | 12 | $75000 | 9/2/2022 |
| 9/10/2021 | Michael James | 12 | $100000 | 9/9/2022 |
| 9/15/2021 | Michael James | 12 | $60000 | 9/14/2022 |
| 9/17/2021 | Michael James | 12 | $100000 | 9/16/2022 |
| 9/22/2021 | Michael James | 12 | $90000 | 9/21/2022 |
| 9/29/2021 | Michael James | 12 | $50000 | 9/28/2022 |
| 10/1/2021 | Michael James | 12 | $60000 | 9/30/2022 |
| 10/4/2021 | Michael James | 12 | $50000 | 10/3/2022 |
| 11/19/2021 | Michael James | 12 | $10000 | 11/18/2022 |
| 12/9/2021 | Michael James | 12 | $40000 | 12/8/2022 |
| 1/7/2022 | Michael James | 12 | $70000 | 1/6/2023 |

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We entered into the following convertible notes with our officers, which accrued interest at 12% per annum and converted into shares of our common stock at the time of the IPO by dividing the total principal and interest due under the note by $138.75:

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| **Date** | **Holder** | **Amount** | **Maturity Date** |
| 6/22/2021 | Michael James | $175000 | 6/21/2022 |
| 6/23/2021 | Michael James | $125000 | 6/22/2022 |
| 6/29/2021 | Michael James | $100000 | 6/28/2022 |
| 7/1/2021 | James E. Kras | $25200 | 6/30/2022 |
| 7/2/2021 | Michael James | $100000 | 7/1/2022 |
| 7/12/2021 | Michael James | $75000 | 7/11/2022 |
| 7/19/2021 | Michael James | $75000 | 7/18/2022 |
| 7/23/2021 | Michael James | $75000 | 7/22/2022 |
| 7/29/2021 | Michael James | $100000 | 7/28/2022 |
| 8/4/2021 | Michael James | $100000 | 8/3/2022 |
| 8/13/2021 | Michael James | $100000 | 8/12/2022 |
| 8/20/2021 | Michael James | $75000 | 8/19/2022 |
| 8/26/2021 | Michael James | $100000 | 8/25/2022 |

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On January 6 and January 18, 2023, the Company issued promissory notes with principal amounts of $50,000 and $125,000, respectively, to Mr. James. The notes matured on February 7, 2023, the closing of the Follow-On Offering, and the Company repaid Mr. James an aggregate of $175,683 in principal and accrued interest.

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**Other Arrangements**

Each of Messrs. Kras and James also received a cash bonus of $500,000 upon the closing of our IPO.

**Policies and Procedures for Transactions with Related Persons**

We have adopted a written policy that our executive officers, directors, beneficial owners of more than 5% of any class of our capital stock, and any members of the immediate family of any of the foregoing persons (a "related party") are not permitted to enter into a related party transaction with us without the prior consent of our audit committee. Any request for us to enter into a transaction with a related party in which the related party would have a direct or indirect interest must first be presented to our audit committee for review, consideration, and approval. In approving or rejecting any such proposal, our audit committee will consider the relevant facts and circumstances of the transaction available to it, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unrelated third party or to employees under the same or similar circumstances, and the extent of the related party's interest in the transaction. The written policy requires that, in determining whether to approve or reject a related person transaction, our audit committee must consider, in light of known circumstances, whether the transaction is in or is not inconsistent with, our best interests and those of our stockholders, as our audit committee determines in good faith.

**SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

The following table sets forth certain information regarding the beneficial ownership of our common stock as of March 22, 2023, and as adjusted to reflect the sale of common stock being offered in this offering by:

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| each person, or group of affiliated persons, known to us to own beneficially more than 5% of our common stock; |
| each of our current directors; |
| each of our named executive officers; and |
| all of our current directors and executive officers as a group. |

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The information in the following table has been presented in accordance with the rules of the SEC. Under such rules, beneficial ownership of a class of capital stock includes any shares of such class as to which a person, directly or indirectly, has or shares voting power or investment power and also any shares as to which a person has the right to acquire such voting or investment power within 60 days through the exercise of any stock option, warrant or other right. If two or more persons share voting power or investment power with respect to specific securities, each such person is deemed to be the beneficial owner of such securities. Except as we otherwise indicate below and under applicable community property laws, we believe that the beneficial owners of the common stock listed below, based on information they have furnished to us, have sole voting and investment power with respect to the shares shown. Except as otherwise indicated, each stockholder named in the table is assumed to have sole voting and investment power with respect to the number of shares listed opposite the stockholder's name.

The calculations of beneficial ownership in this table are based on 1,989,645 shares of common stock outstanding as of March 22, 2023.

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| **Name and Address of Beneficial Owner**<sup>(1)</sup> | **Shares**<br>**Beneficially**<br>**Owned** | **Percentage** |
| *Executive Officers and Directors:* |  |  |
| James E. Kras | 59598 | 3.0% |
| Michael James | 69067 | 3.5 |
| Mathew McConnell | 2794<sup>(2)</sup> | \* |
| Deborah Pawlowski |  | \* |
| Ryan Rogers | 2794<sup>(2)</sup> | \* |
| All directors and executive officers as a group (5 persons) | 134253 | 6.7% |
| *5% stockholders:* |  |  |
| Lind Global Fund II LP<sup>(3)</sup> | 200000 | 10.0% |
| John Markey<sup>(4)</sup> | 120000 | 6.0% |

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\* Indicates less than 1%.

(1) Unless otherwise indicated, the address of each individual is c/o Edible Garden AG Incorporated, 283 County Road 519, Belvidere, NJ 07823.

(2) Represents 1,397 shares of common stock owned and 1,397 shares of common stock underlying a restricted stock award vesting on August 20, 2023.

(3) This information is based on a Schedule 13G filed on February 8, 2023, by Lind Global Fund II LP, Lind Global Partners II LLC, and Jeff Easton. Each filer reports sole voting and sole dispositive power of 200,000 shares of common stock. The ownership consists of (i) 175,000 shares of common stock and (ii) 175,000 warrants. Due to the exercise limitation of the warrants, the reporting person's beneficial ownership of 150,000 warrants is excluded. The address of this holder is 444 Madison Ave, Floor 41, New York, NY 10022.

(4) This information is based on a Schedule 13G filed on March 13, 2023, by John Markey. The filer reports sole voting and sole dispositive power of 120,000 shares of common stock. The address of this holder is 10096 Ridgewood Drive, Twinsburg, Ohio 44087.

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**DESCRIPTION OF SECURITIES**

**General**

Our certificate of incorporation, as amended, authorizes the issuance of up to 6,666,667 shares of common stock, par value $0.0001 per share, and up to 10,000,000 shares of preferred stock, par value $0.0001 per share. As of March 22, 2023, there were 1,989,645 shares of common stock outstanding, which were held by approximately 1,618 stockholders of record, and no shares of Series A Preferred Stock outstanding.

**Common Stock**

Each holder of common stock is entitled to one vote for each share of common stock held on all matters submitted to a vote of the stockholders, including the election of directors. Our certificate of incorporation and bylaws do not provide for cumulative voting rights.

Subject to preferences that may be applicable to any then outstanding preferred stock, the holders of our outstanding shares of common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds. In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.

Holders of our common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that are outstanding or that we may designate and issue in the future.

**Reverse Stock Split** 

On January 26, 2023, we effected a reverse stock split on our common stock at a ratio of 1-for-30. Unless otherwise noted, the share and per share information in this prospectus reflects the effect of the reverse stock split.

**Investor Warrants**

*Overview.* The following summary of certain terms and provisions of the Investor Warrants is not complete and is subject to, and qualified in its entirety by, the provisions of the warrant agent agreement between us the warrant agent, and the form of Investor Warrants, both of which are filed as exhibits to the registration statement of which this prospectus is a part. Each Investor Warrant entitles the registered holder to purchase one share of our common stock at an exercise price of $6.30 per share, subject to adjustment as discussed below, immediately following the issuance of such warrant and terminating at 5:00 p.m., New York City time on February 7, 2028.

*Exercisability*. The Investor Warrants are exercisable at any time after their original issuance and at any time up to February 7, 2028. The Investor Warrants may be exercised upon surrender of the Investor Warrant on or prior to the expiration date at the offices of the warrant agent, with the exercise form included with the warrant completed and executed as indicated. If we fail to maintain the effectiveness of the registration statement and current prospectus relating to the common stock issuable upon exercise of the Investor Warrants, the holders of the Investor Warrants shall have the right to exercise the Investor Warrants via a cashless exercise feature provided for in the Investor Warrants, until such time as there is an effective registration statement and current prospectus. See "— Cashless Exercise" below.

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*Exercise Limitation*. A holder (together with its affiliates) may not exercise any portion of the Investor Warrant to the extent that the holder would own more than 4.99% (or, at the election of the holder, 9.99%) of the outstanding common stock immediately after exercise, except that upon at least 61 days' prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder's warrants up to 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Investor Warrants.

*Exercise Price.* The exercise price per whole share of our common stock purchasable upon the exercise of the warrants is $6.30 per share of common stock. The Investor Warrants are currently exercisable and may be exercised at any time until February 7, 2028. The exercise price and number of shares of common stock issuable upon exercise of the Investor Warrants may be adjusted in certain circumstances, including in the event of a stock dividend or recapitalization, reorganization, merger or consolidation. However, the Investor Warrants will not be adjusted for issuances of common stock at prices below its exercise price.

*Cashless Exercise.* If, at any time after the issuance of the Investor Warrants, a holder of the Investor Warrants exercises the Investor Warrants and a registration statement registering the issuance of the shares of common stock underlying the Investor Warrants under the Securities Act is not then effective or available (or a prospectus is not available for the resale of shares of common stock underlying the warrants), then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder shall instead receive upon such exercise (either in whole or in part) only the net number of shares of common stock determined according to a formula set forth in the Investor Warrants. In addition, a holder may also effect an "alternative cashless exercise" on or after the 60-day anniversary of the initial exercise date. In an "alternative cashless exercise," the aggregate number of shares of common stock issuable is equal to the product of (i) the aggregate number of shares of common stock that would be issuable upon exercise of the Investor Warrant if it was exercised for cash and (ii) 0.5. Notwithstanding anything to the contrary, in the event we do not have or maintain an effective registration statement, there are no circumstances that would require us to make any cash payments or net cash settle the warrants to the holders.

*Fractional Shares*. No fractional shares of common stock will be issued upon exercise of the Investor Warrants. If, upon exercise of the Investor Warrant, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, pay a cash adjustment in respect of such fraction in an amount equal to such fraction multiplied by the exercise price or round up to the next whole share. If multiple Investor Warrants are exercised by the holder at the same time, we shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the exercise price.

*Transferability*. Subject to applicable laws, the Investor Warrants may be offered for sale, sold, transferred or assigned at the option of the holder without our consent.

*Warrant Agent; Global Certificate.* The Investor Warrants were issued in registered form under a warrant agent agreement between the Warrant Agent and us. The Investor Warrants shall initially be represented only by one or more global warrants deposited with the Warrant Agent, as custodian on behalf of The Depository Trust Company (DTC) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

*Fundamental Transactions*. In the event of a "fundamental transaction," as described in the Investor Warrants and generally including any reorganization, recapitalization or reclassification of our common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common stock, the holders of the Investor Warrants will be entitled to receive upon exercise of the Investor Warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the Investor Warrants immediately prior to such fundamental transaction.

*Rights as a Stockholder*. Except by virtue of such holder's ownership of shares of our common stock, the holder of an Investor Warrant does not have the rights or privileges of a holder of our common stock, including any voting rights, until the holder exercises the Investor Warrant.

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**Representative's Warrants**

The Representative's Warrants will be exercisable commencing August 7, 2023 at an exercise price of $6.93 per share and will expire on February 2, 2028. The Representative's Warrants may be exercised for up to 80,950 shares of common stock.

The Representative's Warrants are not redeemable by us. We have agreed to a one-time demand registration of our shares of common stock underlying the Representative's Warrants at our expense and an additional demand registration at the holders' expense until the expiration date of the Representative's Warrants. The Representative's Warrants also provide for unlimited "piggyback" registration rights at our expense with respect to the underlying shares of common stock until the expiration date of the Representative's Warrants. The Representative's Warrants and our shares of common stock underlying the Representative's Warrants have been deemed compensation by the Financial Industry Regulatory Authority, or FINRA, and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA. The Representative (or permitted assignees under the Rule) may not sell, transfer, assign, pledge or hypothecate the Representative's Warrants or the securities underlying the Representative's Warrants, nor will they engage in any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the Representative's Warrants or the underlying securities for a period of six months from the effective date of this offering, except to any FINRA member participating in the offering and their bona fide officers or partners. The Representative's Warrants provide for adjustment in the number and price of such Representative's Warrants (and our shares of common stock underlying such Representative's Warrants) to prevent dilution in the event of a forward or reverse stock split, stock dividend or similar recapitalization.

&nbsp;&nbsp;&nbsp;&nbsp;

**Preferred Stock**

***General***

Our board of directors is authorized, without vote or action by our stockholders, to issue from time to time up to an aggregate of 10,000,000 shares of preferred stock in one or more series and to fix or alter the designations, preferences, rights and any qualifications, limitations or restrictions of the shares of each of these series, including, if applicable, the dividend rights and preferences, conversion rights, voting rights, terms and rights of redemption, including without limitation sinking fund provisions, redemption price or prices, liquidation rights and preferences, and the number of shares constituting any series. The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of us without further action by our stockholders and may adversely affect the dividend, liquidation and voting and other rights of the holders of common stock. The issuance of preferred stock with voting and conversion rights may adversely affect the voting power of the holders of common stock, including the loss of voting control to others. We currently have no plans to issue any additional shares of preferred stock.

We believe that the ability to issue preferred stock without the expense and delay of a special stockholders' meeting provides us with increased flexibility in structuring possible future financings and acquisitions, and in meeting other corporate needs that might arise. This also permits the board of directors to issue preferred stock containing terms which could impede the completion of a takeover attempt. This could discourage an acquisition attempt or other transaction which stockholders might believe to be in their best interests or in which they might receive a premium for their stock over the then market price of the stock.

***Series A Convertible Preferred Stock***

As of October 26, 2022, 1,526,183 shares of our preferred stock, par value $0.0001 per share, was designated as Series A Convertible Preferred Stock. The voting powers, designations, preferences and rights and the qualifications, limitations or restrictions of the Preferred Stock is set forth in a certificate of designation (the "Certificate of Designation") filed as an exhibit to the registration statement of which this prospectus forms a part.

The Preferred Stock ranked senior to the common stock with respect to dividend rights. The Preferred Stock was entitled to a cumulative dividend at a rate of 7.0% per annum, paid in cash on a quarterly basis on the stated value of the Preferred Stock. Under the Certificate of Designation, upon certain specified events such as the failure to perform our obligations under the Certificate of Designation or the Exchange Agreement, filing a petition for bankruptcy or reorganization, or the common stock no longer being listed or traded on Nasdaq, ("triggering event"), (i) the dividend rate would increase from 7.0% to 24.0% per annum and (ii) the stated value of the Preferred Stock would increase from $0.63 per share to $0.819 per share. In addition to the Preferred Stock dividends, the Preferred Stock was entitled to receive dividends (on an as-if-converted-to-common-stock basis) in the same form as dividends actually paid on shares of the common stock when, as and if such dividends were paid on shares of common stock.

The Preferred Stock was convertible into shares of common stock at a conversion price of $0.63 per share. Evergreen had the right to convert shares of Preferred Stock into common stock at any time, as long as the conversion did not cause its beneficial ownership of common stock to exceed 4.99%. Under the Certificate of Designation, the conversion price was subject to adjustment for (i) subsequent sales of equity securities convertible into or exercisable for common stock, provided that the conversion price may not be reduced below $0.5936 per share; (ii) subsequent rights offerings; and (iii) stock dividends and stock splits. In addition, upon a triggering event, the conversion rate of the Preferred Stock would have reduced to 75% of the average of the two lowest volume weighted average prices of the common stock for the 20 days prior to the date of conversion, if that price was lower than $0.63. Under the Certificate of Designation, Evergreen had the right to convert the then-outstanding Preferred Stock and any accrued but unpaid dividends thereon for the securities sold in a future offering of equity or debt securities at a price per share equal to 70% of the offering price.

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Beginning on November 15, 2022, on the 15th and the last day of each month, we were required to either convert or redeem 198,413 shares of Preferred Stock at the conversion price or stated value of the Preferred Stock, respectively. In addition, we were required to redeem any then-outstanding shares of Preferred Stock if we completed an offering of equity or debt securities with gross proceeds of at least $4.0 million. No shares of Preferred Stock remain outstanding.

The Preferred Stock ranked senior to the common stock with respect to rights upon the distribution of assets in any liquidation, dissolution or winding up of our affairs ("liquidation event"). Upon a liquidation event, the Preferred Stock was entitled to payment, before any amount was paid to holders of common stock, equal to the greater of the conversion price of each share or the amount per share the holder of Preferred Stock would be entitled if it converted its Preferred Stock into common stock immediately prior to the liquidation event. The Preferred Stock had no voting rights except as provided by law and in the Certificate of Designation with respect to changes to our certificate of incorporation that would adversely impact the rights of the Preferred Stock.

As of December 1, 2022, all of the shares of Preferred Stock had been converted into shares of common stock, and no Preferred Stock remains outstanding.

**Anti-Takeover Effects of Certain Provisions in our Certificate and Bylaws**

***Exclusive Forum***

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Although we believe these provisions benefit the Company by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, these provisions may have the effect of discouraging lawsuits against the Company's directors and officers. Furthermore, the enforceability of choice of forum provisions in other companies' certificates of incorporation has been challenged in legal proceedings, and it is possible that a court could find these types of provisions to be inapplicable or unenforceable.

***Advance Notice of Stockholder Proposals and Nominations***

Our bylaws include an advance notice procedure for stockholders to nominate candidates for election as directors or to bring other business before any meeting of our stockholders. The stockholder notice procedure provides that only persons who are nominated by, or at the direction of, the Board, or by a stockholder who has given timely written notice prior to the meeting at which directors are to be elected, will be eligible for election as directors and that, at a stockholders' meeting, only such business may be conducted as has been brought before the meeting by, or at the direction of, the Board or by a stockholder who has given timely written notice of such stockholder's intention to bring such business before such meeting.

Under the stockholder notice procedure, for notice of stockholder nominations or other business to be made at a stockholders' meeting to be timely, such notice must be received by us not earlier than the close of business on the 120th calendar day and not later than the close of business on the 90th calendar day prior to the one-year anniversary of the immediately preceding year's annual meeting or as otherwise provided in the bylaws.

A stockholder's notice to us proposing to nominate a person for election as a director or proposing other business must contain certain information specified in the bylaws, including the identity and address of the nominating stockholder, a representation that the stockholder is a record holder of our stock entitled to vote at the meeting and information regarding each proposed nominee or each proposed matter of business that would be required under the federal securities laws to be included in a proxy statement soliciting proxies for the proposed nominee or the proposed matter of business.

The stockholder notice procedure may have the effect of precluding a contest for the election of directors or the consideration of stockholder proposals if the proper procedures are not followed, and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its own proposal, without regard to whether consideration of such nominees or proposals might be harmful or beneficial to us and our stockholder.

***Restrictions on Call of Special Meetings***

Our bylaws provide that special meetings of stockholders can only be called by the Board, the Board Chair or by the Secretary of the Company upon the written request of the holders of at least 50% of the voting power of the outstanding shares entitled to vote at the meeting.

***No Cumulative Voting***

The certificate of incorporation does not authorize cumulative voting for the election of directors.

***Preferred Stock Authorization***

Our Board, without stockholder approval, has the authority under our certificate of incorporation to issue preferred stock with rights superior to the rights of the holders of common stock. As a result, preferred stock, while not intended as a defensive measure against takeovers, could be issued quickly and easily, could adversely affect the rights of holders of common stock and could be issued with terms calculated to delay or prevent a change of control of the Company or make removal of management more difficult.

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**Transfer and Warrant Agent**

The transfer agent and registrar for our common stock and the Warrant Agent for the Investor Warrants is American Stock Transfer & Trust Company, LLC.

**Nasdaq Listing**

Our common stock is currently listed on Nasdaq under the symbol "EDBL."

**PLAN OF DISTRIBUTION**

We are registering the issuance by us of an aggregate of up to 1,942,800 shares of common stock issuable upon exercise of outstanding warrants, consisting of (i) warrants issued as part of a unit in the Follow-On Offering that are exercisable until February 7, 2028 at an exercise price of $6.30 per share for up to 1,861,850 shares of common stock ("Investor Warrants"); and (ii) warrants issued to the representative of the underwriters in the Follow-On Offering that are exercisable until February 2, 2028 at an exercise price of $6.93 per share for up to 80,950 shares of common stock ("Representative's Warrants").

We will receive proceeds upon exercise of warrants for cash, to the extent any warrants are exercised. Pursuant to the terms of the warrants, the shares of common stock will be distributed to those holders who deliver a duly executed exercise notice and payment in full in immediately available funds for the number of shares of common stock purchased upon such exercise.

Upon receipt of proper notice by any of the holders of the warrants that such holder desires to exercise a warrant, we will, within the time allotted by the agreement governing the warrant, issue instructions to our transfer agent to issue to the holder shares of common stock, free of a restrictive legend. Shares of common stock issued to affiliates, if any, upon exercise of the warrants will be issued free of legend but will be deemed control securities.

A holder does not have the right to exercise any portion of a warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon at least 61 days' prior notice from the holder to us.

&nbsp;&nbsp;&nbsp;&nbsp;

**LEGAL MATTERS**

The validity of the securities offered by this prospectus will be passed upon by Harter Secrest & Emery LLP, Rochester, New York, NY.

**EXPERTS**

Marcum LLP, an independent registered public accounting firm, has audited our consolidated financial statements at December 31, 2022 and 2021 as set forth in its report. We have included our financial statements in the prospectus and elsewhere in the registration statement in reliance on Marcum LLP's report, given on their authority as experts in accounting and auditing.

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| 57 |
| *[**Table of Contents**](#toc)* |

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**WHERE YOU CAN FIND MORE INFORMATION**

We have filed with the SEC a registration statement on Form S-1, which includes amendments and exhibits, under the Securities Act and the rules and regulations under the Securities Act for the registration of common stock being offered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all the information that is in the registration statement and its exhibits and schedules. Certain portions of the registration statement have been omitted as allowed by the rules and regulations of the SEC. Statements in this prospectus that summarize documents are not necessarily complete, and in each case you should refer to the copy of the document filed as an exhibit to the registration statement. All filings we make with the SEC are available on the SEC's web site at *www.sec.gov*.

We are currently subject to the information requirements of the Exchange Act and as such must file annual, quarterly and current event reports, proxy statements and other information with the SEC. Such filings, including the registration statement, can be viewed free of charge on the SEC's website at www.sec.gov.

We also maintain a website at *https://ediblegardenag.com*. The information contained on, or that can be accessed through, our website is not part of, and is not incorporated into, this prospectus. We have included our website in this prospectus solely as an inactive textual reference, and you should not consider the contents of our website in making an investment decision with respect to our securities.

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| *[**Table of Contents**](#toc)* |

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**EDIBLE GARDEN AG INCORPORATED**

**Index to Financial Statements**

&nbsp;&nbsp;&nbsp;&nbsp;

---

| | |
|:---|:---|
|  | **Page** |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID No. 688)](#report) | F-2 |
| [Consolidated Balance Sheets as of December 31, 2022 and 2021](#bs) | F-3 |
| [Consolidated Statements of Operations for the Years ended December 31, 2022 and 2021](#soo) | F-4 |
| [Consolidated Statements of Stockholders' Deficit for the Years ended December 31, 2022 and 2021](#deficit) | F-6 |
| [Consolidated Statements of Cash Flows for the Years ended December 31, 2022 and 2021](#cf) | F-5 |
| [Notes to the Consolidated Financial Statements](#notes) | F-7 |

---

---

| |
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| F-1 |
| *[**Table of Contents**](#toc2)* |

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Edible Garden AG Incorporated

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Edible Garden AG Incorporated (the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations, stockholders' deficit and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

**Explanatory Paragraph – Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 14, the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 14. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Marcum LLP

Marcum LLP

We have served as the Company's auditor since 2021.

Costa Mesa, California

March 22, 2023

---

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| F-2 |
| *[**Table of Contents**](#toc2)* |

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**EDIBLE GARDEN AG INCORPORATED**

**CONSOLIDATED BALANCE SHEETS** 

**(in thousands, except shares)**

---

| | | |
|:---|:---|:---|
|  | **December 31,** <br>**2022** | **December 31,**<br>**2021** |
| **ASSETS**  | **ASSETS**  | **ASSETS**  |
| Current assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash | $110 | $31 |
| Accounts receivable, net | 1105 | 767 |
| Inventory, net | 586 | 360 |
| Prepaid expenses and other current assets | 62 | 33 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 1863 | 1191 |
| Property, equipment and leasehold improvements, net | 4891 | 2573 |
| Intangible assets, net | 50 |  |
| Other assets | 161 | 226 |
| **TOTAL ASSETS**  | $**6965** | $**3990** |
| **LIABILITIES AND STOCKHOLDERS' DEFICIT**  | **LIABILITIES AND STOCKHOLDERS' DEFICIT**  | **LIABILITIES AND STOCKHOLDERS' DEFICIT**  |
| **LIABILITIES:**  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Current liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other accrued expenses | $2787 | $2880 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Short-term debt | 2042 | 4209 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 4829 | 7089 |
| &nbsp;&nbsp;&nbsp;&nbsp;Long-term liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term debt, net of discounts | 4282 | 3882 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Long-term lease liabilities | 34 | 126 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total long-term liabilities | 4316 | 4008 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities**  | **9145** | **11097** |
| **COMMITMENTS AND CONTINGENCIES (Note 12)**  |  |  |
| **STOCKHOLDERS' DEFICIT:**  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Common stock ($0.0001 par value, 6,666,667 shares authorized; 356,587 and 166,667 shares outstanding as of December 31, 2022 and 2021, respectively (1)) | 1 | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;Series A Convertible Preferred stock ($0.0001 par value, 10,000,000 shares authorized; nil shares outstanding as of December 31, 2022 and 2021, respectively) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 17891 | 511 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated deficit | (20072) | (7619) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' deficit**  | **(2180)** | **(7107)** |
| **TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT**  | $**6965** | $**3990** |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

<sup>(1)</sup> Adjusted to reflect the stock splits as described in Note 1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The accompanying notes are an integral part of the consolidated financial statements.

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| F-3 |
| *[**Table of Contents**](#toc2)* |

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**EDIBLE GARDEN AG INCORPORATED**

**CONSOLIDATED STATEMENTS OF OPERATIONS** 

**(in thousands, except share and per-share information)**

---

| | | |
|:---|:---|:---|
|  | **Years Ended**<br>**December 31,** | **Years Ended**<br>**December 31,** |
|  | **2022** | **2021** |
| Revenue | $11552 | $10507 |
| Cost of goods sold | 11188 | 9859 |
| Gross profit | 364 | 648 |
| Selling, general and administrative expenses | 9368 | 5611 |
| Loss from operations | (9004) | (4963) |
| Other income / (expense) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | (2033) | (617) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain (Loss) from extinguishment of debt | (826) | 42 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income / (loss) | (590) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other income / (expense) | (3449) | (575) |
| **NET LOSS**  | $(12453) | $(5538) |
| Net Income / (Loss) per common share - basic and diluted (1) | $(48.68) | $(39.28) |
| Weighted-Average Number of Common Shares Outstanding – Basic and Diluted (1) | 255776 | 141005 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(1) Adjusted to reflect the stock splits as described in Note 1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The accompanying notes are an integral part of the consolidated financial statements.

---

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| F-4 |
| *[**Table of Contents**](#toc2)* |

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**EDIBLE GARDEN AG INCORPORATED** 

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(in thousands)**

---

| | | |
|:---|:---|:---|
|  | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** |
|  | **2022** | **2021** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net Income (Loss) | $(12453) | $(5538) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Bad debt expense | 41 | 134 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 959 | 759 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of operating lease right of use asset | 77 | 65 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 909 | 227 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) / loss on extinguishment of debt | 826 | (42) |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | 122 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock issued as payment for fees and services | 712 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock issued to Directors | 70 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Expense for modification of warrants | 189 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (378) | (272) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventory | (226) | (46) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (29) | 89 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (12) | 40 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | 85 | 571 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liabilities | (77) | (65) |
| **NET CASH PROVIDED BY / (USED IN) OPERATING ACTIVITIES** | **(9185)** | **(4078)** |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of property, equipment and leasehold improvements | (1983) | (151) |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchase of intangible assets | (50) | - |
| **NET CASH PROVIDED BY / (USED IN) INVESTING ACTIVITIES** | **(2033)** | **(151)** |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from debt | 1565 | 4379 |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments of debt principal | (3299) | (124) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment of debt issuance costs | (180) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from common stock issuance | 14650 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of warrants | 4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Payment of costs related to initial public offering | (1443) | - |
| **NET CASH PROVIDED BY / (USED IN) FINANCING ACTIVITIES** | **11297** | **4255** |
| **NET CHANGE IN CASH** | **79** | **26** |
| Cash at beginning of period | 31 | 5 |
| **CASH AT END OF PERIOD** | $**110** | $**31** |
| **SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES:** |  |  |
| Cash paid for interest | $104 | $7 |
| **SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES:** |  |  |
| Debt and interest converted into common stock | $1878 | $- |
| Debt and interest converted into Preferred Series A stock | $961 | $- |
| Interest added to mortgage principal | $14 | - |
| Stock issued for debt extinguishment | $258 | $- |
| Fixed assets acquired with debt | $1294 | $103 |
| Warrants issued with debt | $101 | $506 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

The accompanying notes are an integral part of the consolidated financial statements.

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| *[**Table of Contents**](#toc2)* |

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**EDIBLE GARDEN AG INCORPORATED**

**CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT**

**(in thousands, except for shares) <sup>(1)</sup>**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | **Preferred Series A** | **Preferred Series A** | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional**<br>**Paid-In**<br> **Capital** | **Accumulated**<br>**Deficit** | <br>**Total** |
| **Balance at December 31, 2021** | **166667** | $**1** | **-** | $**-** | $**511** | $**(7619)** | $**(7107)** |
| Issuance of warrants to Evergreen |  |  |  |  | 101 |  | 101 |
| Issuance of common stock in public offering | 97667 |  |  |  | 13212 |  | 13212 |
| Issuance of common stock to Evergreen | 9333 |  |  |  | 658 |  | 658 |
| Issuance of common stock for Directors' fees | 2793 |  |  |  | 70 |  | 70 |
| Issuance of common stock to employees and consultants | 14423 |  |  |  | 311 |  | 311 |
| Conversion of debt to common stock | 14831 |  |  |  | 1878 |  | 1878 |
| Conversion of debt to Preferred Series A stock |  |  | 1526183 |  | 961 |  | 961 |
| Conversion of Preferred Series A stock to common stock | 50873 |  | (1526183) |  |  |  |  |
| Modification of warrants |  |  |  |  | 189 |  | 189 |
| Net income (loss)  | - | - | - | - | - | (12453) | (12453) |
| **Balance at December 31, 2022** | **356587** | $**1** | **-** | $**-** | $**17891** | $**(20072)** | $**(2180)** |
|  | **Common Stock** | **Common Stock** | **Preferred Series A** | **Preferred Series A** | **Additional**<br>**Paid-In** | **Accumulated** |  |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Capital** | **Deficit** | **Total** |
| **Balance at December 31, 2020** | **133333** | $**-** | **-** | $**-** | $**6** | $**(2081)** | $**(2075)** |
| Stock option exercises | 33333 | 1 |  |  | (1) | **-** | **-** |
| Warrants issued with debt |  |  |  |  | 506 | **-** | 506 |
| Net income (loss) | - | - | - | - | - | (5538) | (5538) |
| **Balance at December 31, 2021** | **166667** | $**1** | **-** | $**-** | $**511** | $**(7619)** | $**(7107)** |

---

<sup>(1)</sup> Adjusted to reflect the stock splits as described in Note 1.

The accompanying notes are an integral part of the consolidated financial statements.

---

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| F-6 |
| *[**Table of Contents**](#toc2)* |

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**EDIBLE GARDEN AG INCORPORATED**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1 – ORGANIZATION, NATURE OF BUSINESS, AND BASIS OF PRESENTATION**

**Organization and Recent Developments**

Edible Garden Corp., a Nevada corporation, was incorporated on April 9, 2013. On March 28, 2020, Edible Garden AG Inc., a Wyoming corporation, was incorporated for the purpose of acquiring substantially all of the operating assets of Edible Garden Corp., which was a separately identified reportable segment of its parent company Unrivaled Brands, Inc. (formerly known as Terra Tech Corporation). The acquisition was completed on March 30, 2020. Prior to March 30, 2020 Edible Garden AG Incorporated had no operations. Hereafter, Edible Garden AG Incorporated and its subsidiaries will collectively be referred to as "Edible Garden," "we," "us," "our," or the "Successor." Edible Garden Corp., a wholly owned subsidiary of Unrivaled Brands, Inc. will be referred to as the "Predecessor." Throughout these financial statements, the Successor and the Predecessor are also referred to as "the Company" and used interchangeably, unless otherwise noted.

We authorized 100,000 shares of common stock, par value $0.0001 per share, at formation. On October 14, 2020, we simultaneously declared a 20-for-1 forward stock split of our common stock and increased the number of authorized common shares to 20,000,000. On June 30, 2021, we simultaneously (1) converted Edible Garden from a Wyoming into a Delaware corporation, (2) declared a 1-for-2 reverse stock split of our common stock, and (3) increased the total number of authorized common shares to 50,000,000. On September 8, 2021, we simultaneously declared a 20-for-1 forward stock split of our common stock and increased the number of authorized common shares to 200,000,000. On January 18, 2022, the Company's board of directors and stockholders approved a 1-for-5 reverse stock split of its outstanding common stock, which became effective on May 3, 2022. On January 26, 2023, we effected a reverse stock split of 1 for 30 and decreased the total number of authorized common shares to 6,666,667. All historical share and per share amounts reflected throughout this report have been adjusted to reflect the stock splits described above.

***Initial Public Offering***

On May 5, 2022, the Company's stock began trading on Nasdaq under the symbol "EDBL". On May 5, 2022, the Company entered into an underwriting agreement with Maxim Group LLC as representative of the underwriters in a firm commitment initial public offering of an aggregate of 97,667 units ("Units"), each unit consisting of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $150.00 per share. The total net proceeds to the Company were $13,207,000, after deducting underwriting discounts and commissions and expenses associated with the offering of $1,443,000.

From the net proceeds received from the offering, the Company paid Evergreen Capital Management LLC (the "Holder" or "Evergreen") an aggregate of $2,531,006 in accordance with the terms of the convertible notes held by Evergreen. The Company converted Simple Agreements for Future Equity ("SAFEs") into 5,134 shares of common stock and paid $5,790 to SAFE investors who elected to receive cash upon the close of the offering instead of converting the SAFE into common stock. The Company also paid the Chief Financial Officer $785,597 upon the maturity of promissory notes he held. Upon the closing of the offering, the Chief Financial Officer converted $1,317,800 of convertible notes into 9,498 shares of common stock, and the Chief Executive Officer converted $27,821 of a convertible note into 201 shares of common stock.

**Nature of Business**

Edible Garden is a retail seller of locally grown hydroponic produce, which is distributed throughout the Northeast, Midwest and Florida. Currently, Edible Garden's products are sold at approximately 4,500 supermarkets. Our target customers are those individuals seeking fresh produce locally grown using environmentally sustainable methods.

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| F-7 |
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**Basis of Presentation**

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the consolidated financial position of the Company as of December 31, 2021 and 2022, and the consolidated results of operations and cash flows for the years ended December 31, 2021 and 2022 have been included.

**Going Concern**

The accompanying financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, we have undertaken a number of actions, including minimizing capital expenditures and reducing recurring expenses.

However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to continue our business with limited capital resources raise substantial doubt as to our ability to continue as a going concern. See Note 14, "*Going Concern*" of the Notes to Consolidated Financial Statements for additional information.

**NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Use of Estimates**

The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported period. Changes in these estimates and assumptions may have a material impact on the consolidated financial statements and accompanying notes.

Examples of significant estimates and assumptions include provisions for doubtful accounts, accrued liabilities, discount rates used in the measurement and recognition of lease liabilities and valuation of our common stock. These estimates generally involve complex issues and require us to make judgments, involve analysis of historical and future trends, can require extended periods of time to resolve, and are subject to change from period to period. In all cases, actual results could differ materially from our estimates.

**Trade and other Receivables**

The Company extends non-interest-bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets, net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The reserve for doubtful accounts was $98,858 and $133,985 as of December 31, 2022 and December 31, 2021, respectively.

**Concentration of Credit Risk** 

During the years ended December 31, 2022 and 2021, three customers accounted for approximately 76% of our total revenue. 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 revenues and results of operations. As of December 31, 2022 and 2021, approximately 61% and 79% of our gross outstanding trade receivables were attributed to three customers, respectively.

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**Inventory**

We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out method, or its net realizable value. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and reserve accordingly. Our reserve estimate for excess and obsolete inventory is based on expected future use. Our reserve estimates have historically been consistent with our actual experience as evidenced by actual sale or disposal of the goods. The reserve for excess and obsolete inventory was nil and $9,871 as of December 31, 2022 and 2021, respectively.

**Prepaid Expenses and Other Current Assets**

Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring up-front payments.

**Property, Equipment and Leasehold Improvements, Net**

Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Our fixed assets, which are comprised of leasehold improvements, equipment and vehicles, have useful lives of five years.

Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, *"Property, Plant, and Equipment."* When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. See *Note 5, "Property, Equipment and Leasehold Improvements, Net"* for further information.

**Intangible Assets**

Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, *"Property, Plant, and Equipment,"* intangible assets are stated at historical cost and amortized over their estimated useful lives. The Company uses a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined.

The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period the impairment is identified.

**Revenue Recognition and Performance Obligations**

Revenues are recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company does not offer returns, discounts, loyalty programs or other sales incentive programs that are material to revenue recognition. Payments from our customers are due upon delivery or within a short period after delivery.

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*<u>Disaggregation of Revenue</u>*

The following table includes revenue disaggregated by revenue stream for the years ended December 31, 2022 and 2021:

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| | | |
|:---|:---|:---|
|  | **Year Ended**<br>**December 31,** | **Year Ended**<br>**December 31,** |
|  | **2022** | **2021** |
| Herbs & Produce | $9882 | $9693 |
| Vitamins and Supplements | 1670 | 814 |
| **Total**  | $**11552** | $**10507** |

---

&nbsp;&nbsp;&nbsp;&nbsp;

*<u>Contract Balances</u>*

Due to the nature of the Company's revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC Topic 606.

*<u>Contract Estimates and Judgments</u>*

The Company's revenues accounted for under ASC Topic 606, generally do not require significant estimates or judgments based on the nature of the Company's revenue streams. The sales prices are generally fixed at the point of sale and all consideration from contracts is included in the transaction price. The Company's contracts do not include multiple performance obligations or variable consideration.

**Cost of Goods Sold**

Cost of goods sold includes materials, labor and overhead costs incurred in cultivating, producing and shipping our products.

**Advertising Expenses**

The Company expenses advertising costs as incurred in accordance with ASC 720-35, "Other Expenses – Advertising Cost." During the years ended December 31, 2022 and 2021, advertising expenses totaled $64,089 and $136,187, respectively.

**Loss Per Common Share**

In accordance with the provisions of ASC 260, *"Earnings Per Share,"* net loss per share is computed by dividing net loss by the weighted-average shares of common stock outstanding during the period. During a loss period, the effect of the potential exercise of stock options, warrants, convertible preferred stock, and convertible debt are not considered in the diluted loss per share calculation since the effect would be anti-dilutive. The results of operations were a net loss for the years ended December 31, 2022 and 2021. Therefore, the basic and diluted weighted-average shares of common stock outstanding were the same for both years.

**Income Taxes**

The provision for income taxes is determined in accordance with ASC 740, *"Income Taxes"*. The Company files a consolidated United States federal income tax return. The Company provides for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred income taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has incurred net operating losses for financial-reporting and tax-reporting purposes. At December 31, 2022 and 2021, such net operating losses were offset entirely by a valuation allowance.

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The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations.

**Segment reporting**

The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment. The Company's principal decision makers are the Chief Executive Officer and its Chief Financial Officer. Management believes that its business operates as one reportable segment because: a) the Company measures profit and loss as a whole; b) the principal decision makers do not review information based on any operating segment; c) the Company does not maintain discrete financial information on any specific segment; d) the Company has not chosen to organize its business around different products and services, and e) the Company has not chosen to organize its business around geographic areas.

**NOTE 3 – ASSET ACQUISITION**

On August 30, 2022, a wholly owned subsidiary, 2900 Madison Ave Holdings, LLC (the "Subsidiary"), of the Company entered into an asset purchase agreement ("Purchase Agreement") with Greenleaf Growers, Inc. ("Greenleaf"), NJD Investments, LLC ("NJDI"), Soleri, LLC, and Nicholas DeHaan (collectively, the "Sellers") and completed the purchase of the assets of Greenleaf used in its business ("Assets") and the real property at 2900 Madison Ave. SE, Grand Rapids, Michigan ("Property"). The Assets include all vehicles, fixtures, fixed assets and equipment used in the operation of Greenleaf's business; Greenleaf's intellectual property; any inventory; and rights in and to certain outstanding contracts of Greenleaf pursuant to which the Company will sell Greenleaf's existing inventory and work-in-process. The Property includes a 5-acre greenhouse facility that is currently used as a controlled indoor agriculture flower farm. The Sellers are not affiliated with the Company or any of the Company's affiliates. The Purchase Agreement contains customary representations and warranties, covenants, agreements and indemnification obligations of the Subsidiary and the Seller. If the Subsidiary is entitled to indemnification by the Seller, the Subsidiary must offset amounts due under the Greenleaf Promissory Note, as described below, as its remedy for claims for indemnification under the Purchase Agreement.

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The Subsidiary paid an aggregate purchase price of $2,886,000, consisting of (i) a cash payment of $1,750,000 to the Sellers and (ii) a promissory note from the Subsidiary to NJDI for $1,136,000 (the "Greenleaf Promissory Note"). The fair value of the consideration was allocated to the assets acquired based on their relative fair values, as follows:

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| | |
|:---|:---|
|  | (in thousands) |
| Consideration |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fair value of promissory note | $1136 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash consideration | 1750 |
| Total fair value of consideration: | $2886 |
| Net book value of assets acquired  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory | $168 |
| &nbsp;&nbsp;&nbsp;&nbsp;Furniture and Equipment | 503 |
| &nbsp;&nbsp;&nbsp;&nbsp;Leasehold improvements | 2104 |
| &nbsp;&nbsp;&nbsp;&nbsp;Land | 202 |
| &nbsp;&nbsp;&nbsp;&nbsp;Liabilities assumed | (91) |
| **Total Net Assets Acquired** | $2886 |

---

**NOTE 4 – INVENTORY**

Inventory as of December 31, 2022 and 2021 consisted of the following:

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| | | |
|:---|:---|:---|
|  | **(in thousands)** | **(in thousands)** |
|  | **December 31,**<br>**2022** | **December 31,**<br>**2021** |
| Raw materials | $298 | $68 |
| Work-in-progress | 288 | 292 |
| **Total inventory**  | $**586** | $**360** |

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**NOTE 5 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET**

Property, equipment and leasehold improvements as of December 31, 2022 and 2021 consisted of the following:

&nbsp;&nbsp;&nbsp;&nbsp;

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| | | |
|:---|:---|:---|
|  | **(in thousands)** | **(in thousands)** |
|  | **December 31,**<br>**2022** | **December 31,**<br>**2021** |
|  | $- | $- |
| Furniture and equipment | 1408 | 667 |
| Computer hardware | 4 | 4 |
| Leasehold improvements | 5192 | 3031 |
| Vehicles | 304 | 131 |
| Land | 202 |  |
| Construction in progress | 4 | 4 |
| Subtotal | 7114 | 3837 |
| Less accumulated depreciation | (2223) | (1264) |
| **Property, equipment and leasehold improvements, net**  |  |  |
|  | $**4891** | $**2573** |

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Depreciation expense related to property, equipment and leasehold improvements for the years ended December 31, 2022 and 21 was $959,145 and $734,358, respectively.

**NOTE 6 – INTANGIBLE ASSETS**

Intangible assets consisted of the following as of December 31, 2022 and 2021:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** | **(in thousands)** |
|  |  | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
| Amortizing Intangible Assets: | **Estimated Useful Life in Years**  | **Gross**<br>**Carrying** <br>**Value** | **Accumulated Amortization**  | **Net** <br>**Carrying**<br>**Value** | **Gross**<br>**Carrying** <br>**Value** | **Accumulated Amortization**  | **Net** <br>**Carrying Value**  |
| &nbsp;&nbsp;&nbsp;&nbsp;Pulp brand recipes | 15 | $50 | $- | $50 | $- | $- | $- |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-compete agreement | 2 | 62 | (62) | - | 62 | (62) | - |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Intangible Assets, net** |  | $**112** | $**(62)** | $**50** | $**62** | $**(62)** | $**-** |

---

Amortization expense for the years ended December 31, 2022 and 2021 was nil and $24,740, respectively. Annual amortization expense for each of the next five years is estimated to be $3,333 and thereafter $33,333.

**NOTE 7 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES**

Accounts payable and accrued expenses consisted of the following as of December 31, 2022 and 2021:

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| | | |
|:---|:---|:---|
|  | **(in thousands)** | **(in thousands)** |
|  | **December 31,** <br>**2022** | **December 31,** <br>**2021** |
| Accounts payable | $1728 | $2270 |
| Accrued expenses | 542 | 164 |
| Accrued interest payable | 185 | 117 |
| Accrued payroll | 187 | 213 |
| Accrued vacation | 53 | 39 |
| Current lease liability | 92 | 77 |
| **Total Accounts Payable and Accrued Expenses**  | $**2787** | $**2880** |

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**NOTE 8 – NOTES PAYABLE**

Notes payable consisted of the following as of December 31, 2022 and 2021:

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| | | |
|:---|:---|:---|
|  | **(in thousands)** | **(in thousands)** |
|  | **December 31,**<br>**2022** | **December 31,**<br>**2021** |
| Secured promissory note | $3783 | $3783 |
| Evergreen Private Placement | 1022 | 2301 |
| SBA loan | 150 | 150 |
| NJD Investments, LLC promissory note | 1155 |  |
| SAFE agreements |  | 538 |
| Related party loans |  | 1888 |
| Vehicle Loan | 244 | 116 |
| **Total Gross Debt** | $6354 | $8776 |
| Less: Gross short term debt | (2042) | (4209) |
| Less: Debt discount | (30) | (685) |
| **Net Long Term Debt** | $**4282** | $**3882** |

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Scheduled maturities of long-term debt as of December 31, 2022 are as follows (in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Years Ending December 31,**  | **Secured Promissory Notes** | **NJD Investments, LLC Promissory Note** | **Evergreen Private Placement** | **SBA Loan** | **Vehicle Loans** | **Total** |
| 2023 | $677 | $291 | $1022 | $- | $52 | $2042 |
| 2024 |  | 301 |  |  | 59 | 360 |
| 2025 | 3106 | 316 |  |  | 62 | 3484 |
| 2026 |  | 247 |  |  | 49 | 296 |
| 2027 |  |  |  |  | 22 | 22 |
| Thereafter | - | - | - | 150 | - | 150 |
| Total | $3783 | $1155 | $1022 | $150 | $244 | $6354 |

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*Secured Promissory Notes*

On March 30, 2020, the Company entered into a promissory note (the "First Sament Note") for $3,000,000 with Sament Capital Investments, Inc., a wholly owned subsidiary of the Predecessor, ("Sament") in connection with the acquisition of the Predecessor's assets. The Sament Note accrues interest at a rate of 3.5% per annum on a 360-day year basis and matures March 30, 2025. The Sament Note is secured by the Company's operating assets purchased from the Predecessor. During the year ended December 31, 2021, accrued interest of $106,458 was added to the principal of the First Sament Note. As of December 31, 2022, the total outstanding balance of $3,106,458 is included in *"Long-term debt, net of discounts"* on the consolidated balance sheet as of December 31, 2022. As of December 31, 2022, the unamortized discount related to the promissory note was $30,321 and interest accrued was $110,236.

On June 2, 2020, the Company entered into a promissory note for $653,870 with Sament (the "Second Sament Note," together with the First Sament Note, the "Sament Notes"), which accrues interest at a rate of 3.50% per annum and matures on June 3, 2023. The promissory note is secured by the Company's operating assets purchased from the Predecessor. During the year ended December 31, 2021, accrued interest of $23,203 was added to the principal of the promissory note. The total outstanding balance of $677,073 is included in *"Short-term debt, net of discounts"* on the consolidated balance sheet as of December 31, 2022. As of December 31, 2022, interest accrued on the promissory note was $23,966. On February 17, 2023, the Company prepaid the principal and accrued interest due under the Second Sament Note in exchange for Sament agreeing to reduce the principal amount of the Second Sament Note by 10%.

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*Evergreen Private Placement*

On October 7, 2021, the Company entered into a Securities Purchase Agreement (the "Agreement") with Evergreen, whereby Evergreen agreed to purchase up to $2,000,000 of secured convertible notes (the "Notes") and warrants to purchase an aggregate of 6,859 shares of the Company's common stock, in four tranches. The Notes, which mature nine months after issuance, are convertible, in whole or in part, into shares of the Company's common stock, at the election of the Holder. The Notes have an original issue discount of 15.00% and incur interest at a rate of 5.00% per annum. The Notes may be prepaid in whole or in part at any time upon providing the Holder at least three business days prior written notice, upon which the Holder will have the option to convert the Notes to shares of the Company's common stock. The Notes are secured by the Company's operating and financial assets. Because the public offering price of the Company's common stock in its initial public offering was lower than the conversion price under the Evergreen Notes and lower than the exercise price of the Evergreen Warrants, the conversion and exercise prices were reduced to the public offering price of $150.00 per share in May of 2022. The Evergreen Notes are secured and subordinated to the Sament Notes. In connection with the Agreement, the Company entered into an Intercreditor Agreement and Amendment with Sament, whereby Sament agreed to subordinate its security interest in the assets of the Company in favor of the Holder.

On October 7, 2021, upon exercise of the first tranche of the Agreement, the Company entered into a $1,150,000 Senior Secured Convertible Promissory Note with the Holder ("Tranche One Note"), which resulted in total cash proceeds of $1,000,000 after consideration of the original issue discount of 15.00%. The Tranche One Note was initially convertible to shares of the Company's common stock at a conversion price of $229.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provided the Holder with the right, but not the obligation, to acquire 5,011 shares of the Company's common stock at an initial price of $229.50 per share. The warrants will expire October 7, 2026. The warrants, which had a fair value of $413,164, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche One Note was nil.

On November 8, 2021, upon exercise of the second tranche of the Agreement, the Company entered into a $402,500 Senior Secured Convertible Promissory Note with the Holder ("Tranche Two Note"), which resulted in total cash proceeds of $350,000 after consideration of the original issue discount of 15.00%. The Tranche Two Note was initially convertible to shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provided the Holder with the right, but not the obligation, to acquire 647 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire November 8, 2026. The warrants, which had a fair value of $32,748, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Two Note was nil.

On November 22, 2021, upon exercise of the third tranche of the Agreement, the Company entered into a $402,500 Senior Secured Convertible Promissory Note with the Holder ("Tranche Two Note"), which resulted in total cash proceeds of $350,000 after consideration of the original issue discount of 15.00%. The Tranche Three Note was initially convertible to shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provides the Holder with the right, but not the obligation, to acquire 647 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire November 22, 2026. The warrants, which had a fair value of $32,660, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Three Note was nil.

On December 20, 2021, upon exercise of the fourth tranche of the Agreement, the Company entered into a $345,000 Senior Secured Convertible Promissory Note with the Holder ("Tranche Four Note"), which resulted in total cash proceeds of $300,000 after consideration of the original issue discount of 15%. The Tranche Four Note was initially convertible to shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provides the Holder with the right, but not the obligation, to acquire 555 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire December 20, 2026. The warrants, which had a fair value of $27,901, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Four Note was nil.

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On January 14, 2022, upon exercise of the fifth tranche of the Agreement, the Company entered into a $460,000 Senior Secured Convertible Promissory Note with the Holder ("Tranche Five Note"), which resulted in total cash proceeds of $400,000 after consideration of the original issue discount of 15%. The Tranche Five Note was initially convertible to shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provides the Holder with the right, but not the obligation, to acquire 739 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire January 14, 2027. The warrants, which had a fair value of $33,375, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Five Note was nil.

On February 11, 2022, the Company executed an amendment to the Agreement with Evergreen, which increased the aggregate subscription amount of the Notes to $2,500,000 and the number of warrants to purchase common stock to 38,910. On February 11, 2022, upon exercise of the sixth tranche of the Agreement, the Company entered into a $115,000 Senior Secured Convertible Promissory Note with the Holder ("Tranche Six Note"), which resulted in total cash proceeds of $100,000 after consideration of the original issue discount of 15%. The Tranche Six Note was initially convertible to shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provides the Holder with the right, but not the obligation, to acquire 185 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire on February 11, 2027. The warrants, which had a fair value of $8,411, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Six Note was nil.

On February 18, 2022, the Company executed an amendment to the Agreement with Evergreen, which increased the aggregate subscription amount of the Notes to $2,900,000 and the number of warrants to purchase common stock to 424,605. On February 18, 2022, upon exercise of the seventh tranche of the Agreement, the Company entered into a $115,000 Senior Secured Convertible Promissory Note with the Holder ("Tranche Seven Note"), which resulted in total cash proceeds of $100,000 after consideration of the original issue discount of 15%. The Tranche Seven Note was initially convertible to shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provides the Holder with the right, but not the obligation, to acquire 185 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire on February 18, 2027. The warrants, which had a fair value of $8,400, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Seven Note was nil.

On March 2, 2022, upon exercise of the eighth tranche of the Agreement, the Company entered into a $115,000 Senior Secured Convertible Promissory Note with the Holder ("Tranche Eight Note"), which resulted in total cash proceeds of $100,000 after consideration of the original issue discount of 15%. The Tranche Eight Note was initially convertible into shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provides the Holder with the right, but not the obligation, to acquire 185 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire on March 2, 2027. The warrants, which had a fair value of $8,135, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Eight Note was nil.

On March 9, 2022, the Company executed an amendment to the Agreement with Evergreen, which increased the aggregate subscription amount of the Notes to $3,200,000 and the number of warrants to purchase common stock to 45,376. On March 9, 2022, upon exercise of the ninth tranche of the Agreement, the Company entered into a $345,000 Senior Secured Convertible Promissory Note with the Holder ("Tranche Nine Note"), which resulted in total cash proceeds of $300,000 after consideration of the original issue discount of 15%. The Tranche Seven Note was initially convertible to shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provides the Holder with the right, but not the obligation, to acquire 555 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire on March 9, 2027. The warrants, which had a fair value of $25,223, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Nine Note was nil.

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On March 18, 2022, upon exercise of the tenth tranche of the Agreement, the Company entered into a $115,000 Senior Secured Convertible Promissory Note with the Holder ("Tranche Ten Note"), which resulted in total cash proceeds of $100,000 after consideration of the original issue discount of 15%. The Tranche Ten Note was initially convertible into shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provides the Holder with the right, but not the obligation, to acquire 185 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire on March 18, 2027. The warrants, which had a fair value of $8,481, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Ten Note was nil.

On March 30, 2022, upon exercise of the eleventh tranche of the Agreement, the Company entered into a $115,000 Senior Secured Convertible Promissory Note with the Holder ("Tranche 11 Note"), which resulted in total cash proceeds of $100,000 after consideration of the original issue discount of 15%. The Tranche 11 Note was initially convertible into shares of the Company's common stock at a conversion price of $622.50. Simultaneously, the Company executed a Common Stock Purchase Warrant agreement with the Holder, which provides the Holder with the right, but not the obligation, to acquire 185 shares of the Company's common stock at an initial price of $622.50 per share. The warrants will expire on March 30, 2027. The warrants, which had a fair value of $8,541, were recorded as a discount on debt. As of December 31, 2022, the unamortized discount related to the Tranche Ten Note was nil.

On May 9, 2022, upon completion of the Company's initial public offering, the Company repaid Evergreen an aggregate of $1,926,250 of principal and $26,881 of accrued interest in accordance with the terms of the Notes. Additionally, the Company paid a prepayment penalty of $577,875, which was recognized as interest expense during the year ended December 31, 2022.

On June 30, 2022, the Company issued an amended and restated consolidated secured promissory note (the "A&R Note") to Evergreen. The A&R Note consolidated $1,753,750 in principal amount under convertible notes that were due to mature on July 7, August 8, and August 22, 2022 (the "Prior Notes"). The new principal amount of the A&R Note is $1,841,592, which includes accrued interest and prepayment penalties on the Prior Notes and takes into account a payment of $500,000 on the Prior Notes. The A&R Note was issued pursuant to an exemption from registration under Section 3(a)(9) of the Securities Act of 1933, as amended. Prior to its initial public offering ("IPO"), the Company had received $3.2 million from the issuance of convertible notes and warrants to Evergreen. Except for the Prior Notes, these convertible notes were repaid with a portion of the proceeds of the IPO. As consideration for accepting the A&R Note, the Company also issued 6,667 shares of common stock to Evergreen under a letter agreement between the Company and Evergreen and pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

The A&R Note bears interest at 7.0% per annum and will mature on March 31, 2023. Evergreen may elect to convert, subject to approval of the Company, the outstanding principal and interest under the A&R Note into shares of Common Stock at any time prior to the maturity date at a conversion price of $150.00 per share. If the Company sells Common Stock or securities convertible into Common Stock at a per share price lower than the conversion price of the A&R Note (the "Reset Price"), the conversion price of the notes will be reduced to the lower of (i) the Reset Price or (ii) $38.10 per share. Evergreen waived the application of this provision in connection with the issuance of the preferred stock. Evergreen has the right to apply the amount due under the A&R Note to a future offering of equity or debt securities and use the amount to purchase the securities sold in that future offering. The Company must repay the A&R Note if it completes an offering of equity or debt securities with gross proceeds of at least $4.0 million. The transaction resulted in a loss on extinguishment of debt charge of $826,203, which was recorded during the year ended December 31, 2022.

On October 26, 2022, the Company entered into an exchange agreement (the "Exchange Agreement") with Evergreen, pursuant to which a portion of the principal and accrued interest of the A&R Note was converted into shares of a newly created series of preferred stock of the Company, the Series A Convertible Preferred Stock, par value $0.0001 per share ("Preferred Stock"). The Company and Evergreen exchanged approximately $962,000, consisting of $820,000 in principal and approximately $142,000 of accrued interest and prepayment premium thereon, for 1,526,183 shares of Preferred Stock issued to Evergreen. Other than reducing the principal balance of the A&R Note, the terms of the A&R Note remain unchanged. The outstanding balance on the A&R Note of $1,021,592 is included in "*Short-term debt, net of discounts"* within the consolidated balance sheet as of December 31, 2022. Upon the closing of the Company's follow-on offering, the Company repaid the A&R Note in full. See Note 15, "*Subsequent Events*," for more information.

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*Small Business Administration ("SBA") Loan*

On June 22, 2020, the Company entered into a U.S. Small Business Administration Loan Authorization and Agreement pursuant to which the Company received loan proceeds of $150,000 (the "SBA Loan"). The SBA Loan was made under, and is subject to the terms and conditions of, the Economic Injury Disaster Loan Program, which was a program expanded for COVID-19 relief under the CARES Act and is administered by the U.S. Small Business Administration. The term of the SBA Loan is thirty (30) years with a maturity date of June 22, 2050 and the annual interest rate of the SBA Loan is a fixed rate of 3.75%. Under the terms of the CARES Act, the use of loan proceeds for the SBA Loan is limited to alleviating economic injury caused by the COVID-19 pandemic. The outstanding balance on the SBA Loan of $150,000 is included in *"Long-term debt, net of discounts"* within the consolidated balance sheet as of December 31, 2022.

*NJD Investments, LLC Promissory Note*

On August 30, 2022, the Company issued the NJD Investments, LLC Promissory Note for $1,136,000. The NJD Investments, LLC Promissory Note accrues interest at a rate of 5% per annum and will mature on September 1, 2026. The Company may prepay the outstanding amount due at any time without penalty. The Company will make monthly payments of principal and interest of $28,089 beginning January 1, 2023 and until the maturity date. The NJD Investments, LLC Promissory Note is secured by a mortgage on the Property (the "Mortgage") and a security interest in the assets owned by the Subsidiary in favor of NJDI (the "Security Agreement").

In addition, the Company's obligation to repay the amounts due under the NJD Investments, LLC Promissory Note, or up to $1,136,000 plus any accrued interest, is guaranteed by the Company under a guaranty in favor of NJDI (the "Guaranty") entered into on August 30, 2022. Under the Guaranty, in the event that the Company defaulted on the NJD Investments, LLC Promissory Note, the Company would be responsible for any sum remaining due after NJDI foreclosed on the Mortgage and exercised its rights under the Security Agreement.

During the year ended December 31, 2022, accrued **interest of $19,210 was** added to the principal of the NJD Investments, LLC Promissory Note. As of December 31, 2022, $290,417 of the outstanding balance is included in "*Short-term debt, net of discounts"* and $864,638 is included in "*Long-term debt, net of discounts"* within the consolidated balance sheet.

*SAFE Agreements*

During the year ended December 31, 2020, the Company entered into SAFEs with investors through a Regulation Crowdfunding campaign in exchange for cash investments. Upon a future equity financing of greater than $1,000,000, the SAFE securities were convertible at the option of the Company into securities identical to those issued in the future equity financing ("Shadow Securities"), except (1) they do not have the right to vote except as required by law, (2) they must vote in accordance with the majority of the investors in such future equity financing with respect to any such required vote and (3) they are not entitled to any inspection or information rights. If the Company elected to convert the securities upon the closing of a future equity financing, the investors would have received the number of Shadow Securities equal to the greater the quotient obtained by dividing the amount the investor paid (the "Purchase Amount") for the securities by:

(a) the quotient of $18,500,000 divided by the aggregate number of issued and outstanding shares of capital stock, assuming full conversion or exercise of all convertible and exercisable securities then outstanding, including shares of convertible preferred stock and all outstanding vested or unvested options or warrants to purchase capital stock, but excluding (i) the issuance of all shares of capital stock reserved and available for future issuance under any of the Company's existing equity incentive plans, (ii) convertible promissory notes issued by the Company, (iii) any SAFEs, and (iv) any equity securities that are issuable upon conversion of any outstanding convertible promissory notes or SAFEs, or

(b) the lowest price per share of the securities sold in such future equity financing.

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The price (either (a) or (b)) determined above shall be deemed the "First Financing Price" and may be used to establish the conversion price of the securities at a later date, even if the Company does not choose to convert the SAFE securities upon the first future equity financing.

Upon the Company's initial public offering of common shares or a change of control (a "Liquidity Event") prior to any equity financing, the investors were entitled to receive, at the option of the investors, either (i) a cash payment equal to the purchase amount or (ii) a number of shares of common stock of the Company equal to the purchase amount divided by the quotient of (a) $18,500,000 divided by (b) the number, as of immediately prior to the Liquidity Event, of shares of the Company's capital stock (on an as-converted basis) outstanding, assuming exercise or conversion of all outstanding, vested and unvested options, warrants and other convertible securities, but excluding (i) shares of common stock reserved and available for future grant under any equity incentive or similar plan; (ii) any SAFEs; and (iii) convertible promissory notes.

In the case of a Liquidity Event following any equity financing, the investors were entitled to receive, at the option of the investors, either (i) a cash payment equal to the Purchase Amount, or (ii) a number of shares of the most recently issued preferred stock equal to the Purchase Amount divided by the First Financing Price. Shares of preferred stock granted in connection shall have the same liquidation rights and preferences as the shares of preferred stock issued in connection with the Company's most recent Equity Financing.

From October 2020 through April 2021, the Company raised a total of $537,923 in the Regulation Crowdfunding campaign, which was made through OpenDeal Portal LLC (the "Intermediary"). The Intermediary was entitled to receive a 6% commission fee and 2% of the securities issued in connection with the offering, which closed in April 2021.

On May 9, 2022, upon the closing of the IPO, the Company converted SAFEs into 5,134 shares of common stock and paid $5,790 to SAFE investors who elected to receive cash upon the close of the offering instead of converting the SAFE into common stock. As of December 31, 2022, there were no outstanding SAFEs.

*Related Party Loans*

During 2020, the Company borrowed $25,000 from Michael James, the Company's Chief Financial Officer and Director, which was repaid during the year ended December 31, 2022. The funds borrowed were utilized to fund ongoing operations and did not accrue interest.

During 2021, the Company issued Convertible Promissory Notes (the "Convertible Notes") with principal amounts totaling $1,200,000 to Michael James, the Company's Chief Financial Officer. The Convertible Notes matured on the earlier of (1) one year after issuance, (2) upon the closing of the Company's next sale of equity securities in which the Company raises at least $5.00 million in gross proceeds (excluding the value of any instruments converting into equity in such equity financing), (3) the sale, lease, license or other disposition of all or substantially all of the assets of the Company, (4) a transaction or series of related transactions in which any person becomes the beneficial owner of more than 50% of the Company's outstanding voting securities, or (5) upon the occurrence of an event of default. The principal and interest due and owed under the Notes, which bore interest at a rate of 12.00% per annum, were convertible into shares of Common Stock at any time at the election of Mr. James at a conversion price equal to $138.75 (subject to adjustment for forward reverse stock splits and the like after the issuance date). Upon the closing of the IPO on May 9, 2022, Mr. James converted $1,200,000 of convertible notes and $117,800 of accrued interest into 9,498 shares of common stock. As of December 31, 2022, the outstanding amount on the Convertible Notes was nil.

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During 2021, the Company issued demand notes totaling $35,200 to James Kras, the Company's Chief Executive Officer and Director. The funds borrowed were utilized to fund ongoing operations and did not accrue interest. During 2021, the remaining outstanding balance of $25,200 was exchanged for a Convertible Promissory Note on the same terms as issued to Mr. James. Upon the closing of the Company's initial public offering on May 9, 2022, Mr. Kras converted $25,200 of outstanding principal and $2,621 of accrued interest into 201 shares of common stock. As of December 31, 2022, the outstanding amount of the Convertible Promissory Note was nil.

During 2021, the Company issued Promissory Notes (the "Promissory Notes") totaling $660,000 to Mr. James, which matured on the earlier of (1) one year after issuance, (2) upon the closing of the Company's next sale of equity securities in which the Company raises at least $5 million in gross proceeds (excluding the value of any instruments converting into equity in such equity financing), (3) the sale, lease, license or other disposition of all or substantially all of the assets of the Company, (4) a transaction or series of related transactions in which any person becomes the beneficial owner of more than 50% of the Company's outstanding voting securities, or (5) upon the occurrence of an event of default. The Promissory Notes bore interest at a rate of 12% per annum. At the closing of the IPO, the Company repaid the Promissory Notes. As of December 31, 2022, the outstanding amount of the Promissory Notes was nil.

On January 7, 2022, the Company issued a promissory note totaling $70,000 to Mr. James on the same terms as the Promissory Notes issued to Mr. James in 2021. At the closing of the IPO, the Company repaid the Promissory Note. As of December 31, 2022, the outstanding amount of the Promissory Note was nil.

On March 7, 2022, the Company issued a promissory note totaling $20,000 to Mr. James, which matured on June 30, 2022 and did not incur interest. At the closing of the IPO, the Company repaid the Promissory Note.

*Other Loans*

During the year ended December 31, 2021, the Company issued promissory notes with principal amounts totaling $95,000 to unaffiliated third parties, of which zero remained outstanding as of December 31, 2021.

*Vehicle Loans*

During 2020, the Company entered into a financing agreement for the purchase of a vehicle. The loan, which accrues interest at a rate of 17.51%, matures on April 26, 2024. The loan is secured by the vehicle purchased.

During 2021, the Company entered into three financing agreements totaling $102,681 for the purchase of vehicles. The loans, which accrue interest at rates of 16.84% - 18.66%, mature in 2026. The loans are secured by the vehicles purchased.

During the year ended December 31, 2022, the Company entered into two financing agreements totaling $158,214 for the purchase of vehicles. The loans, which accrue interest at a rate of 7.64%, mature in 2027. The loans are secured by the vehicles purchased.

**NOTE 9 – STOCKHOLDERS' EQUITY (DEFICIT) AND STOCK-BASED COMPENSATION**

**Common Stock**

The Company has authorized 6,666,667 shares of common stock with $0.0001 par value. As of December 31, 2022 and 2021, 356,587 and 166,667 shares were issued and outstanding, respectively.

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During the year ended December 31, 2022, the Company issued 3,822,521 shares of common stock, as summarized below:

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| | |
|:---|:---|
|  | **Number of** <br>**Shares**  |
| Issuances of common stock in public offering | 97667 |
| Issuances of common stock to Evergreen | 9333 |
| Issuances of common stock for conversion of debt | 14831 |
| Issuances of common stock for conversion of Series A Convertible Preferred Stock | 50873 |
| Issuances of common stock for Director's fees | 2793 |
| Issuances of common stock to employees and consultants | 14423 |
| Total of common stock issuances during the twelve months ended December 31, 2022 | 189920 |
| **Summary table of common stock share transactions:** |  |
| Shares outstanding at December 31, 2021 | 166667 |
| Common stock issuances | 189920 |
| Shares outstanding at December 31, 2022 | 356587 |

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On May 5, 2022, the Company's stock began trading on Nasdaq under the symbol "EDBL". On May 9, 2022, the Company completed its IPO. The Company sold a total of 97,667 shares of common stock.

On January 14, 2022, the Company issued 2,667 shares of common stock to Evergreen, pursuant to a Leak-Out provision as provided in the Securities Purchase Agreement dated as of October 7, 2021, as amended from time to time. During the six-month period following the IPO, Evergreen agreed that it would not offer or sell in a public broker transaction any shares of Common Stock on any trading day in an amount greater than 15% of the average daily trading volume over the five trading days preceding the date of any such sale. However, if Evergreen does not sell the full permitted amount on any trading day, it may carry forward any shortfall in its sales to increase the permitted amount for subsequent trading days, provided that the amount sold on any trading day shall not exceed 50% of the average daily trading volume over the five trading days preceding the date of any such sale.

On June 30, 2022, the Company issued the A&R Note to Evergreen. See Note 7, *"Notes Payable*," for more information. As consideration for accepting the A&R Note, the Company issued 6,667 shares of common stock to Evergreen.

During the year ended December 31, 2022, the Company issued 14,832 common shares for the conversion of debt principal and accrued interest/penalties of $1,757,333 and $120,429, respectively.

**Series A Convertible Preferred Stock**

As of October 26, 2022, 1,526,183 shares of our preferred stock, par value $0.0001 per share, were designated as Series A Convertible Preferred Stock. The voting powers, designations, preferences and rights and the qualifications, limitations or restrictions of the Preferred Stock are set forth in a certificate of designation (the "Certificate of Designation") filed as an exhibit to this Annual Report on Form 10-K.

The Preferred Stock ranked senior to the common stock with respect to dividend rights. The Preferred Stock was entitled to a cumulative dividend at a rate of 7.0% per annum, paid in cash on a quarterly basis on the stated value of the Preferred Stock. Under the Certificate of Designation, upon certain specified events such as the failure to perform our obligations under the Certificate of Designation or the Exchange Agreement, filing a petition for bankruptcy or reorganization, or the common stock no longer being listed or traded on Nasdaq, ("triggering event"), (i) the dividend rate would increase from 7.0% to 24.0% per annum and (ii) the stated value of the Preferred Stock would increase from $0.63 per share to $0.819 per share. In addition to the Preferred Stock dividends, the Preferred Stock was entitled to receive dividends (on an as-if-converted-to-common-stock basis) in the same form as dividends actually paid on shares of the common stock when, as and if such dividends were paid on shares of common stock.

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The Preferred Stock was convertible into shares of common stock at a conversion price of $0.63 per share. Evergreen had the right to convert shares of Preferred Stock into common stock at any time, as long as the conversion did not cause its beneficial ownership of common stock to exceed 4.99%. Under the Certificate of Designation, the conversion price was subject to adjustment for (i) subsequent sales of equity securities convertible into or exercisable for common stock, provided that the conversion price may not be reduced below $0.5936 per share; (ii) subsequent rights offerings; and (iii) stock dividends and stock splits. In addition, upon a triggering event, the conversion rate of the Preferred Stock would have reduced to 75% of the average of the two lowest volume weighted average prices of the common stock for the 20 days prior to the date of conversion, if that price was lower than $0.63. Under the Certificate of Designation, Evergreen had the right to convert the then-outstanding Preferred Stock and any accrued but unpaid dividends thereon for the securities sold in a future offering of equity or debt securities at a price per share equal to 70% of the offering price.

Beginning on November 15, 2022, on the 15th and the last day of each month, we were required to either convert or redeem 198,413 shares of Preferred Stock at the conversion price or stated value of the Preferred Stock, respectively. In addition, we were required to redeem any then-outstanding shares of Preferred Stock if we completed an offering of equity or debt securities with gross proceeds of at least $4.0 million.

The Preferred Stock ranked senior to the common stock with respect to rights upon the distribution of assets in any liquidation, dissolution or winding up of our affairs ("liquidation event"). Upon a liquidation event, the Preferred Stock was entitled to payment, before any amount was paid to holders of common stock, equal to the greater of the conversion price of each share or the amount per share the holder of Preferred Stock would be entitled if it converted its Preferred Stock into common stock immediately prior to the liquidation event. The Preferred Stock had no voting rights except as provided by law and in the Certificate of Designation with respect to changes to our certificate of incorporation that would adversely impact the rights of the Preferred Stock.

As of December 31, 2022, all of the shares of Preferred Stock had been converted into 50,873 shares of common stock, and no Preferred Stock remains outstanding.

**Stock-Based Compensation**

On January 18, 2022 in connection with the IPO, the board of directors (the "Board") approved the Edible Garden AG Incorporated 2022 Equity Incentive Plan (the "2022 Plan"). The 2022 Plan provides for equity incentive compensation for employees, non-employee directors, and any other individuals who perform services for the Company. The number of shares initially available for grant under the 2022 Plan was 50,000. A variety of discretionary awards are authorized under the 2022 Plan, including stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. The vesting of such awards may be conditioned upon either a specified period of time or the attainment of specific performance goals as determined by the administrator of the 2022 Plan. The option price and terms are also subject to determination by the administrator with respect to each grant. The 2022 Plan expires in 2032, except for awards then outstanding, and is administered by the Board.

During the year ended December 31, 2022, the Company issued time-vesting restricted stock awards to the Company's non-employee directors as compensation for director fees, with 2,793 shares of common stock underlying the awards in the aggregate. 50% of the shares underlying the award vested immediately upon grant and the remaining shares will vest on the one-year anniversary of the date of grant.

Shares available for future stock compensation grants totaled 16,626 at December 31, 2022.

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**Warrants**

The following table summarizes transactions involving the Company's outstanding warrants to purchase common stock for the year ended December 31, 2022:

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|:---|:---|:---|
|  | **Warrants**<br>**(Underlying Shares)** | **Weighted-Average Exercise Price Per Share** |
| Outstanding December 31, 2021 | 6858 | $150.00 |
| &nbsp;&nbsp;&nbsp;&nbsp;Issuance of Warrants | 118440 | $151.24 |
| Outstanding December 31, 2022 | 125299 | $151.17 |

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During the year ended December 31, 2022, the Company issued warrants to purchase an aggregate of 66,511 shares of common stock to Evergreen in conjunction with debt, which were accounted for as a debt discount. Management estimated the fair value of the warrants granted utilizing the Black-Scholes Option Pricing model with the following weighted-average assumptions:

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|:---|:---|
| Expected term | 2.5 Years |
| Volatility | 60.4% |
| Risk-free interest rate | 1.6% |
| Dividend yield | 0.0% |

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**NOTE 10 – LEASES**

A lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease right-of-use assets ("Lease Assets") are included within "Other assets" on the Company's consolidated balance sheet.

Lease assets represent the Company's right to use an underlying asset for the lease term and operating lease liabilities represent the Company's obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term.

The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. Lease assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both lease assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company's lease agreements do not contain significant residual value guarantees, restrictions, or covenants.

We are currently party to an ongoing arrangement with our predecessor company, Edible Garden Corp., whereby we make lease payments of approximately $21,860 per month to the lessor of the land on which our flagship facility is built and for which our predecessor company is the lessee. Our month-to-month arrangement meets the definition of a short-term lease and is therefore excluded from the recognition requirements of ASC 842, "*Leases*".

During the year ended December 31, 2022, total operating lease expense was $244,577, of which $137,537 was associated with short-term leases. During the year ended December 31, 2021, total operating lease cost was $461,804, of which $354,764 was associated with short-term leases. As of December 31, 2022 and December 31, 2021, short term lease liabilities of $92,051 and $77,363 are included in "*Accounts Payable and Accrued Expenses*" on the consolidated balance sheets, respectively.

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The table below presents total operating lease assets and lease liabilities as of December 31, 2022 and 2021:

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|:---|:---|:---|
|  | **(in thousands)** | **(in thousands)** |
|  | **December 31,**<br>**2022** | **December 31,**<br>**2021** |
| Operating lease assets | $126 | $204 |
| Operating lease liabilities | $126 | $204 |

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The table below presents the maturities of operating lease liabilities as of December 31, 2022:

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|:---|:---|
|  | **(in thousands)**<br>**Operating**<br>**Leases** |
| 2023 | 107 |
| 2024 | 36 |
| Total lease payments | 143 |
| Less: discount | (17) |
| Total operating lease liabilities | $126 |

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The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets:

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|:---|:---|
|  | **December 31,**<br>**2022** |
| Remaining lease term (years) | 1.3 |
| Discount rate | 17.5% |

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**NOTE 11 – TAX EXPENSE**

The components of deferred income tax assets and (liabilities) are as follows:

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| | | |
|:---|:---|:---|
|  | **(in thousands)** | **(in thousands)** |
|  | **December 31,**<br>**2022** | **December 31,**<br>**2021** |
| Deferred tax assets: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net operating losses | $4159 | $2842 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued expenses | 4 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Inventory |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Fixed Assets & Intangibles |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Leases |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Reserves & Allowances | (77) | 58 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross deferred tax assets | 4086 | 2900 |
| Valuation allowance | (3719) | (2330) |
| Total deferred tax assets | 367 | 570 |
| Deferred tax Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciable asset basis differences | (367) | (570) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total deferred tax liabilities | (367) | (570) |
| Net deferred tax assets (liabilities) | $- | $- |

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The Company did not incur income tax expense or benefit for the years ended December 31, 2022 or 2021. The reconciliation between the Company's effective tax rate and the statutory tax rate is as follows:

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| | | |
|:---|:---|:---|
|  | **Years Ended** | **Years Ended** |
|  | **December 31,** <br>**2022** | **December 31,** <br>**2021** |
| Expected income tax benefit at statutory tax rate, net | $(2615) | $(1160) |
| State taxes (net of federal tax benefits): | (1120) | (489) |
| Increase in valuation allowance | 3719 | 1567 |
| Loss on disposal |  |  |
| Debt discount |  | 47 |
| Debt forgiveness | 6 |  |
| Other | 10 | 35 |
| Reported income tax expense (benefit)  | $- | $- |

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The Company believes that income tax filing positions will be sustained upon examination and does not anticipate any adjustments that would result in a material adverse effect on the Company's financial position, results of operations or cash flows. Accordingly, the Company has not recorded any reserves, or related accruals or uncertain income tax positions as of December 31, 2022.

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Federal and New Jersey tax laws impose significant restrictions on the utilization of net operating loss carryforwards in the event of a change in ownership of the Company, as defined by Internal Revenue Code Section 382 (Section 382). The Company does not believe a change in ownership, as defined by Section 382, has occurred but a formal study has not been completed.

The Company has net operating loss carryforwards for federal and New Jersey income tax purposes of approximately $24,589,504 and $20,936,702, respectively, as of December 31, 2022. The federal net operating loss carryforwards, if not utilized, will carryover indefinitely. The state net operating loss carryforwards, if not utilized, will expire beginning in 2040.

**NOTE 12 – COMMITMENTS AND CONTINGENCIE**S

From time to time, we may be party to or otherwise involved in legal proceedings arising in the ordinary course of business. Management does not believe that there is any pending or threatened proceeding against us, which, if determined adversely, would have a material adverse effect on our business, results of operations or financial condition, except as described below.

The Company is party to an action filed against us on November 29, 2021 by Green City Growers Cooperative ("Green City Growers") in the Court of Common Pleas in Cuyahoga County, Ohio. The plaintiff seeks damages of approximately $600,000 for an alleged breach of a supplier agreement. The Company denies the allegations and filed a counterclaim against the plaintiff on January 3, 2022. The Company believes it has meritorious defenses and plans to vigorously defend itself. This action arises from our entry into two agreements with the plaintiff. First, we entered into the Assumption Agreement in May 2021, whereby we assumed a liability of $78,976 that Arch City owed to the plaintiff. Second, also in May 2021, we entered into a supplier agreement with the plaintiff (the "Supply Agreement"), under which we agreed to purchase an aggregate of 6.0 million units of herbs and lettuce that were processed by the plaintiff over a three-year period according to agreed-upon prices. The plaintiff was one of our suppliers of cut basil, sage, rosemary, thyme and parsley during this time. On August 2, 2021, the plaintiff sent a notice to us terminating the Supply Agreement in accordance with its terms. Following the termination of the Supply Agreement, we do not have any written supply agreements with the plaintiff. Management concluded that a loss related to this matter was probable and reasonably estimable as of December 31, 2022. The accrual for the loss contingency totaled $120,000 as of December 31, 2022.

On September 16, 2022, Dennis Rodrigues, a former officer and director, filed a breach of contract claim against us, our Chief Executive Officer, and our Chief Financial Officer in the Superior Court of New Jersey in Warren County (the "New Jersey Matter"). The plaintiff sought damages relating to an alleged breach of contract for services rendered and related claims. We entered into a settlement agreement with the plaintiff and paid an aggregate of $235,000 to settle the New Jersey Matter. On February 9, 2023, this claim was dismissed by the court.

If we settle these claims or the actions are not resolved in our favor, we may suffer reputational damage and incur legal costs, settlements or judgments that exceed the amounts covered by our existing insurance policies. We can provide no assurances that our insurer will insure the legal costs, settlements or judgments we incur in excess of our deductible. If we are unsuccessful in defending ourselves from these claims or if our insurer does not insure us against legal costs we incur in excess of our deductible, the result may materially adversely affect our business, results of operations and financial condition.

**NOTE 13 – RELATED PARTY TRANSACTIONS**

The Company has entered into loan agreements with certain Officers and close relatives of Officers of the Company, the terms of which are disclosed in Note 8, *"Notes Payable."* 

The Company is party to an ongoing arrangement with the Predecessor whereby the Company makes lease payments of approximately $21,860 per month to the lessor of land for which the Predecessor is the lessee. The lease agreement is associated with land the Company utilizes for its ongoing operations.

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| F-26 |
| *[**Table of Contents**](#toc2)* |

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During 2021, the Company purchased a total of $227,365 of goods from Arch City AG, LLC ("Arch City"), an entity partially owned by Mr. Kras, our Chief Executive Officer. In May 2021, the Company entered into an Assumption and Indemnification Agreement (the "Assumption Agreement") with Arch City, which resulted in the Company assuming a liability of $78,976 that Arch City owed to a third-party supplier. In consideration for payment of the outstanding liability, Arch City forgave the Company's outstanding balance of accounts payable, which totaled $121,470. The Company recognized a gain for forgiveness of debt of $42,494 in non-operating income during the year ended December 31, 2021. This liability extinguished met the criteria for troubled debt. The basic criteria are that the borrower is troubled, i.e., they are having financial difficulties, and a concession is granted by the creditor.

**NOTE 14 – GOING CONCERN**

These financial statements are prepared on a going concern basis. The Company began operating in 2020. For the years ended December 31, 2022 and 2021, we incurred net losses of $12.5 million and $5.5 million, respectively. We expect to experience further significant net losses in the foreseeable future. At December 31, 2022, we had cash available for operations of $0.1 million. We have not been able to generate sufficient cash from operating activities to fund our ongoing operations. Since our inception, we have raised capital through our issuance of debt and equity securities. Our future success is dependent upon our ability to achieve profitable operations and generate cash from operating activities. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations.

We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenue and reduce costs to a point of positive cash flow. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling securities. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations, or if we are able to raise capital, that it will be available to us on acceptable terms, on an acceptable schedule, or at all.

The issuance of additional securities may result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming these loans would be available, will increase our liabilities and future cash commitments. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations.

The risks and uncertainties surrounding our ability to continue our business with limited capital resources raise substantial doubt as to our ability to continue as a going concern for twelve months from the issuance of these financial statements.

**NOTE 15 – SUBSEQUENT EVENTS**

*Working Capital Funding from Executive Officer*

On January 6 and January 18, 2023, the Company issued promissory notes with principal amounts of $50,000 and $125,000, respectively, to Mr. James. The notes matured on the earlier of (1) April 1, 2023, (2) upon the closing of the Company's next sale of equity securities in which the Company raises at least $5.00 million in gross proceeds (excluding the value of any instruments converting into equity in such equity financing), (3) the sale, lease, license or other disposition of all or substantially all of the assets of the Company, (4) a transaction or series of related transactions in which any person becomes the beneficial owner of more than 50% of the Company's outstanding voting securities, or (5) upon the occurrence of an event of default. The promissory notes bear interest at a rate of 6.00% per annum. The Company may prepay any portion of the principal and accrued interest due under the notes at any time and without penalty, upon providing ten days written notice to the holders. Upon the closing our follow-on underwritten public offering, the Company paid $175,683 to Mr. James to pay off the principal and accrued interest of these notes.

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| F-27 |
| *[**Table of Contents**](#toc2)* |

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*Public Offering*

On February 7, 2023, the Company closed on a follow-on underwritten public offering of 1,619,000 units, with each unit consisting of one share of common stock and one warrant to purchase one share of common stock at an exercise price equal to $6.30 per share. Each unit was sold at a public offering price of $6.30 per unit. Gross proceeds, before deducting underwriting discounts and commissions and estimated offering expenses, were approximately $10.2 million.

*Payoff of Evergreen Debt*

On February 7, 2023, the Company paid $1,219,248 to Evergreen to pay off the principal amount due of $1,021,598, a prepayment penalty of $153,239 and accrued interest of $44,411.

*Settlement of New Jersey Matter*

On February 9, 2023, the claim filed against us by Dennis Rodrigues, a former officer and director, was dismissed after we paid an aggregate of $235,000 to settle the matter.

*Payoff of Sament Promissory Note*

On February 17, 2023, the Company prepaid $644,779 of principal and accrued interest due under the Second Sament Note in exchange for Sament agreeing to reduce the principal amount of the Second Sament Note by 10%.

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| F-28 |
| *[**Table of Contents**](#toc)* |

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**1,942,800 Shares of Common Stock Underlying Previously Issued Warrants**

**EDIBLE GARDEN AG INCORPORATED**

**_________________________**

**PROSPECTUS**

**_________________________**

&nbsp;&nbsp;&nbsp;&nbsp;

, 2023

**PART II**

**INFORMATION NOT REQUIRED IN PROSPECTUS**

**Item 13. Other Expenses of Issuance and Distribution**

The following table sets forth the various expenses, all of which will be borne by the registrant, in connection with the sale and distribution of the securities being registered, other than the underwriting discounts and commissions. All amounts shown are estimates except for the SEC registration fee and the FINRA filing fee.

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|:---|:---|
| SEC registration fee | $2214 |
| FINRA fees | $3513 |
| Printing and engraving expenses | $1500 |
| Accounting fees and expenses | $50000 |
| Legal fees and expenses | $180000 |
| Miscellaneous | $12773 |
| Total | $250000 |

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**Item 14. Indemnification of Directors and Officers.**

Section 102(b)(7) of the Delaware General Corporation Law ("DGCL") provides that a Delaware corporation, in its certificate of incorporation, may limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability for any:

· transaction from which the director derived an improper personal benefit;

· act or omission not in good faith or that involved intentional misconduct or a knowing violation of law;

· unlawful payment of dividends or redemption of shares; or

· breach of the director's duty of loyalty to the corporation or its stockholders.

Under Section 145 of the DGCL, we can indemnify our directors and officers against liabilities they may incur in such capacities, including liabilities under the Securities Act of 1933, as amended (the "Securities Act"). Our certificate of incorporation (Exhibit 3.1 to this registration statement) provides that we must indemnify our directors and officers to the fullest extent permitted by law and requires us to pay expenses incurred in defending or other participating in any proceeding in advance of its final disposition upon our receipt of an undertaking by the director or officer to repay such advances if it is ultimately determined that the director or officer is not entitled to indemnification. Our certificate of incorporation further provides that rights conferred under such certificate of incorporation do not exclude any other right such persons may have or acquire under the certificate of incorporation, the bylaws, any statute, agreement, vote of stockholders or disinterested directors or otherwise.

The amended and restated certificate of incorporation also provides that, pursuant to Delaware law, our directors shall not be liable for monetary damages for breach of the directors' fiduciary duty of care to us and our stockholders. This provision in the certificate of incorporation does not eliminate the duty of care, and in appropriate circumstances equitable remedies such as injunctive or other forms of non-monetary relief will remain available under Delaware law. In addition, each director will continue to be subject to liability for breach of the director's duty of loyalty to us for acts or omissions not in good faith or involving intentional misconduct, or knowing violations of law, for actions leading to improper personal benefit to the director, and for payment of dividends or approval of stock repurchases or redemptions that are unlawful under Delaware law. The provision also does not affect a director's responsibilities under any other law, such as the federal securities laws or state or federal environmental laws. We also intend to obtain directors' and officers' liability insurance pursuant to which our directors and officers are insured against liability for actions taken in their capacities as directors and officers.

In addition, we intend to enter into agreements to indemnify our directors and certain of our officers in addition to the indemnification provided for in the certificate of incorporation. These agreements, among other things, indemnify our directors and some of our officers for certain expenses (including attorney's fees), judgments, fines and settlement amounts incurred by such person in any action or proceeding, including any action by or in our right, on account of services by that person as a director or officer of our company or as a director or officer of our subsidiary, or as a director or officer of any other company or enterprise that the person provides services to at our request.

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| II-1 |
| *[**Table of Contents**](#toc)* |

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**Item 15. Recent Sales of Unregistered Securities.**

The information below lists all of the securities sold by us during the past three years which were not registered under the Securities Act:

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| On October 26, 2022, we issued 1,526,183 shares of Series A Convertible Preferred Stock to Evergreen Capital Management LLC, in exchange for approximately $962,000 in principal, interest, and prepayment premium under the Amended and Restated Consolidated Senior Secured Promissory Note, dated as of June 30, 2022, between the parties, pursuant to exemption from registration under Section 3(a)(9) of the Securities Act. |
| On August 30, 2022, we granted an aggregate of 5,586 shares of time-vested restricted common stock to Mathew McConnell and Ryan Rogers as compensation for their service as directors pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act. |
| On June 30, 2022, we issued an amended and restated consolidated secured promissory note to Evergreen Capital Management LLC, in exchange for the consolidation of convertible notes that were due to mature on July 7, August 8, and August 22, 2022, pursuant to exemption from registration under Section 3(a)(9) of the Securities Act. |
| On June 30, 2022, we issued 6,667 shares of common stock to Evergreen Capital Management LLC pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act. |
| From October 7, 2021 through March 30, 2022, we issued 15% original issue discount secured promissory notes to Evergreen Capital Management LLC, warrants to purchase an aggregate of 9,079 shares of our common stock for an aggregate of $3.2 million, and 2,667 shares of our common stock. As part of the private placement, Maxim received a cash fee equal to 6% of the private placement proceeds. The offering was conducted pursuant to an exemption from registration under the Securities Act in reliance upon Rule 506(b) promulgated under the Securities Act. |
| From April 28, 2020 through January 18, 2023, we issued demand, convertible and promissory notes to certain of our officers pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act. See "Certain Relationships and Related Party Transactions" for more information. |
| From October 2020 through April 2021, we issued approximately $538 thousand in our Series 2020 Crowd SAFEs pursuant to an exemption from registration under the Securities Act available under Regulation Crowdfunding for cash. |
| In March 2020, we issued two options to Sament Capital Investments, Inc. to purchase an aggregate of 33,334 shares of our common stock pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act. The first option granted Sament the right to purchase 14,834 shares of our common stock at an exercise price of $1.00 for all of the underlying shares. The second option granted Sament the right to purchase 18,500 shares of our common stock at an exercise price of $1.00 for all of the shares underlying the option any time prior to March 30, 2025. Both options were exercised as of October 8, 2021 for the aggregate exercise price of $2.00 pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act. |
| Upon our inception in March 2020, we issued 60,000, 60,000, and 13,334 shares of common stock (after the effect of all stock splits to date) to Mr. Kras, Mr. James, and Mr. Rodrigues, respectively, pursuant to the exemption from registration under Section 4(a)(2) of the Securities Act. |

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**Item 16. Exhibits and Financial Statement Schedules.**

The following exhibits to this registration statement included in the Index to Exhibits are incorporated by reference.

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| II-2 |
| *[**Table of Contents**](#toc)* |

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**INDEX TO EXHIBITS**

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| [1.1](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000820/edbl_ex11.htm) | [Underwriting Agreement, dated February 2, 2023, between the Company and Maxim Group LLC, as representative of the underwriters (incorporated by reference to the Company's Current Report on Form 8-K filed on February 8, 2023)](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000820/edbl_ex11.htm) |
| [3.1](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex31.htm) | [Certificate of Incorporation (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex31.htm) |
| [3.2](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex32.htm) | [Certificate of Amendment to the Certificate of Incorporation filed September 8, 2021 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex32.htm) |
| [3.3](http://www.sec.gov/Archives/edgar/data/1809750/000147793222004534/edbl_ex31.htm) | [Certificate of Amendment to the Certificate of Incorporation, filed May 3, 2022 (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222004534/edbl_ex31.htm)  |
| [3.4](http://www.sec.gov/Archives/edgar/data/1809750/000147793222008027/edbl_ex31.htm) | [Certificate of Designation of Series A Convertible Preferred Stock (incorporated by reference to the Company's Current Report on Form 8-K filed on October 31, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222008027/edbl_ex31.htm) |
| [3.5](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000525/edbl_ex31.htm) | [Certificate of Amendment to the Certificate of Incorporation, filed January 24, 2023 (incorporated by reference to the Company's Current Report on Form 8-K filed on January 25, 2023)](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000525/edbl_ex31.htm) |
| [3.6](http://www.sec.gov/Archives/edgar/data/1809750/000147793221009383/edbl_ex34.htm) | [Amended and Restated Bylaws of Edible Garden AG Incorporated (incorporated by reference to Amendment No. 1 to the Company's Registration Statement on Form S-1 filed on December 21, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221009383/edbl_ex34.htm) |
| [4.1](http://www.sec.gov/Archives/edgar/data/1809750/000147793222009295/edbl_ex41.htm) | [Form of IPO Warrant (incorporated by reference to the Company's Registration Statement on Form S-1 filed on December 15, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222009295/edbl_ex41.htm) |
| [4.2](http://www.sec.gov/Archives/edgar/data/1809750/000147793222003121/edbl_ex42.htm) | [Warrant Agency Agreement, dated as of May 9, 2022, between the Company and American Stock Transfer & Trust Company, LLC (incorporated by reference to the Company's Current Report on Form 8-K filed on May 10, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222003121/edbl_ex42.htm) |
| [4.3](http://www.sec.gov/Archives/edgar/data/1809750/000147793222003121/edbl_ex41.htm) | [Form of Representative's Warrant from IPO (incorporated by reference to the Company's Current Report on Form 8-K filed on May 10, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222003121/edbl_ex41.htm) |
| [4.4](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000820/edbl_ex41.htm) | [Form of Warrant dated February 7, 2023 (incorporated by reference to the Company's Current Report on Form 8-K filed on February 8, 2023)](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000820/edbl_ex41.htm) |
| [4.5](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000820/edbl_ex42.htm) | [Form of Representative's Warrant dated February 7, 2023 (incorporated by reference to the Company's Current Report on Form 8-K filed on February 8, 2023)](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000820/edbl_ex42.htm) |
| [4.6](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000820/edbl_ex43.htm) | [Warrant Agency Agreement, dated as of February 7, 2023, between the Company and American Stock Transfer and Trust Company, LLC (incorporated by reference to the Company's Current Report on Form 8-K filed on February 8, 2023)](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000820/edbl_ex43.htm) |
| [5.1\*](edbl_ex51.htm) | [Opinion of Harter Secrest & Emery LLP](edbl_ex51.htm) |
| [10.1+](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1015.htm) | [Executive Employment Agreement, by and between the Company and James E. Kras, dated as of August 18, 2021 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1015.htm) |
| [10.2+](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1027.htm) | [First Amendment to Executive Employment Agreement, by and between the Company and James E. Kras, dated as of January 18, 2022 (incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-1 filed on January 19, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1027.htm) |
| [10.3+](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1016.htm) | [Executive Employment Agreement, by and between the Company and Michael C. James, dated as of August 18, 2021 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1016.htm) |
| [10.4+](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1028.htm) | [First Amendment to Executive Employment Agreement, by and between the Company and Michael C. James, dated as of January 18, 2022 (incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-1 filed on January 19, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1028.htm) |
| [10.5+](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1022.htm) | [Edible Garden AG Incorporated 2022 Equity Incentive Plan (incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-1 filed on January 19, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1022.htm) |
| [10.6+](http://www.sec.gov/Archives/edgar/data/1809750/000147793222008290/edbl_106.htm) | [Form of Director Restricted Stock Award Agreement under the Edible Garden AG Incorporated 2022 Equity Incentive Plan (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222008290/edbl_106.htm) |
| [10.7](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex103.htm) | [Secured Promissory Note by the Company in favor of Sament Capital Investments, Inc., dated March 30, 2020 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex103.htm) |
| [10.8](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex104.htm) | [Security Agreement, by and between Sament Capital Investments, Inc. and the Company, dated March 30, 2020 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex104.htm) |
| [10.9](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex107.htm) | [Secured Promissory Note by the Company in favor of Sament Capital Investments, Inc., dated June 3, 2020 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex107.htm) |
| [10.10±](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1017.htm) | [Securities Purchase Agreement, by and between the Company and Evergreen Capital Management LLC, dated as of October 7, 2021 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1017.htm) |

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| II-3 |
| *[**Table of Contents**](#toc)* |

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| | |
|:---|:---|
| [10.11](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1017b.htm) | [Common Stock Purchase Warrant, dated October 7, 2021 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1017b.htm) |
| [10.12](http://www.sec.gov/Archives/edgar/data/1809750/000147793222001609/edbl_ex1017d.htm) | [Form of Subsequent Evergreen Common Stock Purchase Warrant (incorporated by reference to Amendment No. 3 to the Company's Registration Statement on Form S-1 filed on March 24, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222001609/edbl_ex1017d.htm) |
| [10.13](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1018.htm) | [First Amendment to Securities Purchase Agreement, by and between the Company and Evergreen Capital Management LLC, dated as of October 14, 2021 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1018.htm) |
| [10.14](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1026.htm) | [Second Amendment to Securities Purchase Agreement, by and between the Company and Evergreen Capital Management LLC, dated as of January 14, 2022 (incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-1 filed on January 19, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1026.htm) |
| [10.15](http://www.sec.gov/Archives/edgar/data/1809750/000147793222001609/edbl_ex1029.htm) | [Third Amendment to Securities Purchase Agreement, by and between the Company and Evergreen Capital Management LLC, dated as of February 11, 2022 (incorporated by reference to Amendment No. 3 to the Company's Registration Statement on Form S-1 filed on March 24, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222001609/edbl_ex1029.htm) |
| [10.16](http://www.sec.gov/Archives/edgar/data/1809750/000147793222001609/edbl_ex1030.htm) | [Fourth Amendment to Securities Purchase Agreement, by and between the Company and Evergreen Capital Management LLC, dated as of February 18, 2022 (incorporated by reference to Amendment No. 3 to the Company's Registration Statement on Form S-1 filed on March 24, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222001609/edbl_ex1030.htm) |
| [10.17](http://www.sec.gov/Archives/edgar/data/1809750/000147793222001609/edbl_ex1031.htm) | [Fifth Amendment to Securities Purchase Agreement, by and between the Company and Evergreen Capital Management LLC, dated as of March 9, 2022 (incorporated by reference to Amendment No. 3 to the Company's Registration Statement on Form S-1 filed on March 24, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222001609/edbl_ex1031.htm) |
| [10.18](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1019.htm) | [Security Agreement, by and between the Company and Evergreen Capital Management LLC, dated as of October 7, 2021 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1019.htm) |
| [10.19](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1020.htm) | [Guaranty and Security Agreement, by and between the Company and Evergreen Capital Management LLC, dated as of October 7, 2021 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1020.htm) |
| [10.20](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1021.htm) | [Intercreditor Agreement, by and between the Company, Sament Capital Investments, Inc. and Evergreen Capital Management LLC, dated as of October 7, 2021 (incorporated by reference to the Company's Registration Statement on Form S-1 filed on November 1, 2021)](http://www.sec.gov/Archives/edgar/data/1809750/000147793221007698/edbl_ex1021.htm) |
| [10.21](http://www.sec.gov/Archives/edgar/data/1809750/000147793222004832/edbl_ex101.htm) | [Amended and Restated Consolidated Secured Promissory Note, by and between the Company and Evergreen Capital Management LLC, dated as of June 30, 2022 (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222004832/edbl_ex101.htm) |
| [10.22](http://www.sec.gov/Archives/edgar/data/1809750/000147793222004832/edbl_ex102.htm) | [Letter Agreement, by and between the Company and Evergreen Capital Management LLC, dated as of June 30, 2022 (incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222004832/edbl_ex102.htm) |
| [10.23](http://www.sec.gov/Archives/edgar/data/1809750/000147793222008027/edbl_ex101.htm) | [Exchange Agreement, by and between Edible Garden AG Incorporated and Evergreen Capital Management LLC, dated October 26, 2022 (incorporated by reference to the Company's Current Report on Form 8-K filed on October 31, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222008027/edbl_ex101.htm) |
| [10.24](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1024.htm) | [Assumption and Indemnification Agreement, by and between the Company and Green City Growers Cooperative, dated as of May 21, 2021 (incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-1 filed on January 19, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1024.htm) |
| [10.25](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1025.htm) | [Supplier Agreement, by and between the Company and Green City Growers Cooperative, dated as of May 21, 2021 (incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-1 filed on January 19, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222000371/edbl_ex1025.htm) |
| [10.26±](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex101.htm) | [Asset Purchase Agreement with Real Estate, by and between Greenleaf Growers, Inc., NJD Investments, LLC, Soleri, LLC, Nicholas DeHaan, and 2900 Madison Ave Holdings, LLC, dated as of August 30, 2022 (incorporated by reference to the Company's Current Report on Form 8-K filed on September 6, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex101.htm) |
| [10.27](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex102.htm) | [Promissory Note, by and between 2900 Madison Ave Holdings, LLC and NJD Investments, LLC, dated as of August 31, 2022 (incorporated by reference to the Company's Current Report on Form 8-K filed on September 6, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex102.htm) |
| [10.28](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex103.htm) | [Mortgage, by and between 2900 Madison Ave Holdings, LLC and NJD Investments, LLC, dated as of August 30, 2022 (incorporated by reference to the Company's Current Report on Form 8-K filed on September 6, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex103.htm) |
| [10.29](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex104.htm) | [Security Agreement, by and between 2900 Madison Ave Holdings, LLC and NJD Investments, LLC, dated as of August 30, 2022 (incorporated by reference to the Company's Current Report on Form 8-K filed on September 6, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex104.htm) |
| [10.30](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex105.htm) | [Guaranty, by Edible Garden AG Incorporated, dated as of August 30, 2022 (incorporated by reference to the Company's Current Report on Form 8-K filed on September 6, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222006664/edbl_ex105.htm) |
| [10.31](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000584/edbl_ex1031.htm) | [Form of 2023 Promissory Note to Michael James (incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-1 filed on January 19, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793223000584/edbl_ex1031.htm) |

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| II-4 |
| *[**Table of Contents**](#toc)* |

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| | |
|:---|:---|
| [21.1](http://www.sec.gov/Archives/edgar/data/1809750/000147793222009295/edbl_ex211.htm) | [List of Subsidiaries (incorporated by reference to the Company's Registration Statement on Form S-1 filed on December 15, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222009295/edbl_ex211.htm) |
| [23.1\*](edbl_ex231.htm) | [Consent of Marcum LLP](edbl_ex231.htm) |
| 23.2\* | Consent of Harter Secrest & Emery LLP (included in Exhibit 5.1) |
| [24.1](http://www.sec.gov/ix?doc=/Archives/edgar/data/1809750/000147793222009295/edbl_s1.htm) | [Power of Attorney (included in the signature page of the Company's Registration Statement on this Form S-1) (incorporated by reference to the Company's Registration Statement on Form S-1 filed on December 15, 2022)](http://www.sec.gov/ix?doc=/Archives/edgar/data/1809750/000147793222009295/edbl_s1.htm) |
| 101.INS\* | Inline XBRL Instance Document |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File |
| [107](http://www.sec.gov/Archives/edgar/data/1809750/000147793222009295/edbl_ex107.htm) | [Filing Fee Table (incorporated by reference to the Company's Registration Statement on Form S-1 filed on December 15, 2022)](http://www.sec.gov/Archives/edgar/data/1809750/000147793222009295/edbl_ex107.htm) |

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____________

\* Filed herewith.

+ Management contract or compensatory arrangement.

± Certain information has been omitted from this exhibit in reliance upon Item 601(a)(5) of Regulation S-K and will be furnished to the Securities and Exchange Commission upon request.

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|:---|
| II-5 |
| *[**Table of Contents**](#toc)* |

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**Item 17. Undertakings.**

The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) For the purposes of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(4) That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(5) That in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(6) That,

(i) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.

(ii) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

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| II-6 |
| *[**Table of Contents**](#toc)* |

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**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Belvidere, State of New Jersey, on March 29, 2023.

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| | |
|:---|:---|
| **EDIBLE GARDEN AG INCORPORATED** | **EDIBLE GARDEN AG INCORPORATED** |
| By: | */s/ James E. Kras* |
| Name: | James E. Kras |
| Title: | Chief Executive Officer and President |
|  | (principal executive officer) |

---

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

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| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| */s/ James E. Kras* | Chief Executive Officer, President and Director | March 29, 2023 |
| James E. Kras | (principal executive officer) |  |
| *\** | Chief Financial Officer, Treasurer, Secretary and Director | March 29, 2023 |
| Michael James | (principal financial and accounting officer) |  |
| *\**  | Director | March 29, 2023 |
| Mathew McConnell |  |  |
| *\**  | Director | March 29, 2023 |
| Deborah Pawlowski |  |  |
| *\**  | Director | March 29, 2023 |
| Ryan Rogers |  |  |

---

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| | |
|:---|:---|
| \* By: | */s/ James E. Kras* |
|  | James E. Kras, as attorney-in-fact |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Exhibit 5.1

**EXHIBIT 5.1**

![](edbl_ex51img1.jpg)

March 29, 2023

Edible Garden AG Incorporated

283 County Road 519

Belvidere, NJ 07823

Re: Post-Effective Amendment to Registration Statement on Form S-1

Ladies and Gentlemen:

We have acted as counsel to Edible Garden AG Incorporated, a Delaware corporation (the "Company"), in connection with the registration of the offer and sale by the Company of up to 1,942,800 shares (the "Shares") of common stock, par value $0.0001 per share (the "Common Stock") issuable from time to time upon the exercise of warrants previously issued by the Company pursuant to the Company's Registration Statement on Form S-1 that was declared effective by the Securities and Exchange Commission on February 2, 2023 (the "Registration Statement"). The Company is filing a post-effective amendment to the Registration Statement (the "Amendment") to update and supplement the information contained in the Registration Statement as required by the Securities Act of 1933, as amended (the "Securities Act"). The warrants consist of (i) warrants issued as part of a unit in the offering conducted pursuant to the Registration Statement (the "Follow-On Offering") that are exercisable until February 7, 2028 at an exercise price of $6.30 per share for up to 1,861,850 shares of Common Stock ("Investor Warrants") and governed by a warrant agency agreement, dated as of February 7, 2023, between the Company and the warrant agent (the "Warrant Agency Agreement"); and (ii) warrants issued to the representative of the underwriters in the Follow-On Offering that are exercisable until February 2, 2028 at an exercise price of $6.93 per share for up to 80,950 shares of Common Stock ("Representative's Warrants"). We understand that the Shares are to be sold by the Company as described in the Registration Statement.

In connection with the foregoing, we have examined originals or copies of such corporate records of the Company, certificates and other communications of public officials, certificates of officers of the Company and such other documents as we have deemed relevant or necessary for the purpose of rendering the opinions expressed herein. As to questions of fact material to those opinions, we have, to the extent we deemed appropriate, relied on certificates of officers of the Company and on certificates and other communications of public officials. We have assumed the genuineness of all signatures on, and the authenticity of, all documents submitted to us as originals, the conformity to authentic original documents of all documents submitted to us as copies thereof, the due authorization, execution and delivery by the parties thereto other than the Company of all documents examined by us, and the legal capacity of each individual who signed any of those documents. In addition, we have assumed that (a) there will not have occurred, prior to the date of the issuance of the Shares (i) any change in law affecting the validity or enforceability of the Investor Warrants, Representative's Warrants or Warrant Agency Agreement or (ii) any amendment to those same documents, (b) at the time of the issuance and sale of the Shares: (i) the Company is validly existing and in good standing under the law of the State of Delaware, (ii) the Company has not amended its certificate of incorporation or bylaws, (iii) the board of directors of the Company and any committee thereof has not taken any action to amend, rescind or otherwise reduce its prior authorization of the issuance of the Shares and (iv) the Company will receive consideration in excess of par value for the issuance of the Shares, (c) the Amendment becomes and remains effective, and the prospectus which is a part of the Registration Statement, and the prospectus delivery requirements with respect thereto, fulfill all of the requirements of the Securities Act, throughout all periods relevant to the opinion, (d) the Shares will be offered in the manner and on the terms identified or referred to in the Registration Statement, including all amendments thereto, and (e) all offers and sales of the Shares will be made in compliance with the securities laws of the states having jurisdiction thereof.

<u> 1600 BAUSCH & LOMB PLACE ROCHESTER, NY 14604-2711 PHONE: 585.232.6500 FAX: 585.232.2152</u> <br> ROCHESTER, NY <sub>•</sub> BUFFALO, NY <sub>•</sub> ALBANY, NY <sub>•</sub> CORNING, NY <sub>•</sub> NEW YORK, NY

![](edbl_ex51img2.jpg)

Edible Garden AG Incorporated

March 29, 2023

Based upon the foregoing, and subject to the additional qualifications set forth below, we are of the opinion that:

1. the shares of Common Stock underlying the Investor Warrants have been duly authorized for issuance and, when issued and delivered by the Company upon valid exercise of the Investor Warrants and against receipt of the exercise price therefor, in accordance with and in the manner described in the Registration Statement, Investor Warrants and Warrant Agency Agreement, will be validly issued, fully paid and non-assessable; and

2. the shares of Common Stock underlying the Representative's Warrants have been duly authorized for issuance and, when issued and delivered by the Company upon valid exercise of the Representative's Warrants and against receipt of the exercise price therefor, in accordance with and in the manner described in the Registration Statement and the Representative's Warrants, will be validly issued, fully paid and non-assessable.

The opinions expressed herein are limited exclusively to the applicable provisions of the Delaware General Corporate Law and the law of the State of New York as currently in effect, and we are expressing no opinion as to the effect of the laws of any other jurisdiction.

This opinion letter has been prepared in accordance with the customary practice of lawyers who regularly give, and lawyers who regularly advise opinion recipients concerning, opinions of the type contained herein.

This opinion letter deals only with the specified legal issues expressly addressed herein, and you should not infer any opinion that is not explicitly addressed herein from any matter stated in this letter.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the reference to this firm under the caption "Legal Matters" in the prospectus contained in the Registration Statement. In giving such consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act and the rules and regulations thereunder. This opinion is rendered to you as of the date hereof and we assume no obligation to advise you or any other person hereafter with regard to any change after the date hereof in the circumstances or the law that may bear on the matters set forth herein even though the change may affect the legal analysis or legal conclusion or other matters in this letter.

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| Very truly yours, |
| /s/ Harter Secrest & Emery LLP |

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## Exhibit 23.1

**EXHIBIT 23.1**

<u>INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM'S CONSENT</u>

We consent to the inclusion in this Post-Effective Amendment No. 1 to the Registration Statement of Edible Garden AG Incorporated on Form S-1 File No. 333-268800 of our report dated March 22, 2023, which includes an explanatory paragraph as to the Company's ability to continue as a going concern, with respect to our audits of the consolidated financial statements of Edible Garden AG Incorporated as of December 31, 2022 and 2021, and for the years ended December 31, 2022 and 2021, which report appears in the Prospectus, which is part of this Registration Statement. We also consent to the reference to our Firm under the heading "Experts" in such Prospectus.

/s/ Marcum LLP

Marcum LLP

Costa Mesa, California

March 29, 2023