Edible Garden AG Incorporated

Ladies and gentlemen, thank you for your patience. This conference will begin in one moment. Thank you. Thank you. Thank you. Good morning, ladies and gentlemen, and welcome to the Edible Garden third quarter 2022 business update conference call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, David Waldman, with Investor Relations. Sir, the floor is yours.

Good morning, and thank you for joining Edible Garden's third quarter 2022 conference call. On the call with us today are Jim Crass, Chief Executive Officer of Edible Garden, and Mike James, Chief Financial Officer of Edible Garden. Earlier this morning, the company announced its operating results for the quarter ended September 30, 2022. The press release is posted on the company's website, www.ediblegarden.com. In addition, the company filed its quarterly report on Form 10-Q with the U.S. Securities and Exchange Commission this morning, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov. If you have any questions after the call or would like any additional information about the company, Please contact Crescendo Communications at 212-671-1020. Before Mr. Krause reviews the company's operating results for the third quarter of 2022, we'd like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position strategy and plans and our expectations for future operations, are forward-looking statements. The words anticipate, expect, project, plan, look forward, intend, believe, may, will, would, should, could, mission, and the negative of such terms and other words or terms of similar expressions are intended to identify forward-looking statements. These forward-looking statements are based largely on the company's current expectations and projections about future events and trends that it believes may affect its financial condition, results of operations, strategy, short-term and long-term, business operations and objectives, and financial needs. These forward-looking statements are subject to several risks, uncertainties, and assumptions as described in the company's quarterly report on Form 10-Q and its final prospectus for its IPO dated May 5, 2022, followed with the U.S. Securities and Exchange Commission. Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this conference call may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. In addition, neither the company nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. The company disclaims any duty to update any of these forward-looking statements except as required by law. All forward-looking statements attributable to the company are expressly qualified in their entirety by these cautionary statements as well as others made in this conference call. You should evaluate all forward-looking statements made by the company in the context of these risks and uncertainties. With that, I'll now turn the call over to Jim Kress. Jim, please go ahead.

Thank you, David. Good morning, and thanks to everyone for joining us today. I'd like to begin by saying thank you to all of our investors for your continued support and confidence in the Edible Gardens story. On behalf of myself, the management team, and the board, we appreciate your support and want you to know that we believe the future is bright at Edible Gardens. We continue to generate solid year-over-year revenue growth and achieved a 12.5% increase in revenue for the third quarter of 2022 compared to the same period last year. This represents the second consecutive quarter of year-over-year revenue growth. We expect this trend to continue in subsequent quarters and believe we can, in fact, accelerate our growth by executing on our business strategy and prudently deploying the capital that we have raised to date. We are also building our distribution network by adding new retail partners to our network while expanding relationships with our existing partners, either by adding more of their retail locations to our network or by adding more SKUs to the retail locations where we currently sell our products. As an example, during the third quarter, we announced the expanded distribution of our sustainable hydrobasil with a major Northeast retailer, which has agreed to carry our product across 350 plus locations in the Northeast. During the quarter, we also announced an expansion of our Northeast distribution through Food Bazaar, a full service market with locations across New York, New Jersey, and Connecticut. With so much diversity among the customers and communities served by retail partners, we have been diligently working with the buying teams to better optimize the mix of SKUs at each of the retailers. The company is also working aggressively to drive Edible Garden to our goal of profitability. To this end, we continue to carefully manage our expenses and believe we have built a highly scalable business with an expansive distribution network that should benefit from higher margins, as we increase our growing capacity and throughput. We're also working diligently to offset some of the inflationary pressures that have impacted cost of goods across the industry. Specifically, we're working hard to further optimize the supply chain, leveraging the purchasing power that should come with increased sales and further enhance the product lines with new higher margin complimentary products. Our goal is either to develop or acquire these products where we could internally produce the ingredients while leveraging brand recognition and the retail distribution network that Edible Garden has built. Margaret Achievements in the third quarter, we acquired a five-acre greenhouse facility in Grand Rapids, Michigan, which will operate as Edible Garden Heartland. The location is ideal as it reduces our reliance on contract growers and places us closer to one of our largest distribution partners, Meijer. From this location, we plan to further build out our Midwestern distribution network. In addition to improved margins, the additional benefit of having this in-house production close to our retail partners is a reduction of food miles, shortening the time from farm to table, reducing spoilage, waste, and ultimately reducing our CO2 footprint. This is the type of initiative that supports our mission of providing zero-waste inspired, simply local, simply fresh produce to our retail partners and their customers. This new zero-waste inspired CAA initiative facility will also leverage our patented Green Thumb software in order to bring to market in a highly efficient manner our products. This facility is on track to begin operations by year's end, which should expand our capacity support up to an additional $20 million in annualized revenue. We also plan to house a state-of-the-art research and development center focusing on improving existing products, developing new products, supporting innovations in plant-based protein and nutraceuticals, as well as applying advanced agricultural technologies. We'll also use Edible Garden Heartland as a research facility in partnership with University of Michigan's School of Environment and Sustainability, one of the leading sustainability research facilities in the United States, and the university's Herb Institute to offer students the opportunity to work directly with the Edible Garden team to develop and implement solutions for the environmental and sustainability issues that impact the food industry now and in the future by applying the power of sustainable CEA farming. In addition, Edible Garden Heartland will house the first commercial installation of Edible Garden's proprietary hybrid vertical growing system. We recently added three new greenhouse-grown salad kits to our list of available SKUs, all containing the company's locally grown, sustainable cut lettuce, along with dressing, croutons, cheese, and more needed to make a salad. All these ingredients are sourced from local suppliers. We are excited to offer our customer a salad kit solution where the main ingredient, the lettuce, is the same edible, garden-sustainable, and locally grown lettuce that our customers have come to enjoy. By offering greenhouse-grown salad kits, which were designed for consumer convenience and in alignment with consumer consumption trends, We believe we elevate and expand our presence within the CE category. Two of the salad kits have already launched in Meijer retail locations across the Midwest, and we currently have additional salad kits under development. By growing product closer to the distribution centers, these kits align well with our zero-waste-inspired approach to extending shelf life, reducing shrinkage, and reducing food miles, making this a win-win for our retail partners, the customers, and the environment. On one final but important note, I'd also like this opportunity to welcome Deborah Polowski to the Edible Garden board. Deborah brings more than 30 years of experience as a proven entrepreneurial business leader with a successful track record in corporate communications, capital markets, and business strategy. Her experience will be invaluable to the company as we continue to expand our footprint across the United States, add new distribution partners, and strengthen our communication strategy around the Edible Garden brand. So in summary, the agricultural sector faces a number of ESG challenges, which include climate change, responsible land use, water stewardship, pollution, and energy consumption. Our zero-waste inspired approach is facing these challenges head-on, utilizing innovative technology, advanced greenhouse growing technology, and local supply chains to increase yields, while at the same time reducing waste and containing costs. This allows Edible Garden to put theory into practice, better demand planning, bio-based packaging, and shrink-saving displays, leading to a reduced carbon footprint. Our sustainability approach continues to resonate well with both retailers and consumers who care about the environmental impact of the food supply chain. We believe this will allow us to further expand our distribution partner network and drive demand for our products, both of which should have a positive impact on shareholder values. Overall, we remain laser-focused on our revenue growth and expanding our distribution network while carefully managing expenses and increasing throughput of our facilities, which we believe will lead to long-term and sustainable profitability. I would now like to turn the call over to Mike James, Chief Financial Officer of Edible Garden, who will review the financial results for a three-month period ending September 30, 2022. Mike?