Edible Garden AG Incorporated

Welcome to the Edible Garden fourth quarter business update conference call. At this time all participants are on a listen only mode. And the question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Ted Avas of Investor Relations. Sir, you may begin.

Thanks, Ali. Good morning and thank you for joining Edible Garden's quarter and year-end December 31st, 2023 conference call and business update. On the call with us today are Jim Kress, Chief Executive Officer of Edible Garden, and Costa Stafoulis, Interim Chief Financial Officer of Edible Garden. Earlier this morning, the company announced its operating results for the three months and year-end of December 31st, 2023. The press release is posted on the company's website, www.ediblegardenag.com. In addition, the company has filed a Daniel Report on Form 10-K with the U.S. Securities and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website at www.sec.gov. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before Mr. Kress reviews the company's operating results for the quarter and year ended December 31st, 2023, and provides a business update, we would like to remind everyone that this conference call may contain forward-looking statements. All statements other than statements of historical facts contained in this conference call, including statements regarding our future results of operations and financial position, strategy and plans, and our expectations for future operations are forward-looking statements. The words aim, anticipate, believe, could, expect, may, plan, project, strategy, will, and the negative of such terms and other words in 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 filings with the SEC, including the company's annual report on Form 10-K for the year ended December 31, 2023. Because of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in the 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 the 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. Having said that, I will now turn the call over to Jim Kress, Chief Executive Officer of Edible Garden. Jim?

Thanks, Ted. Good morning, and thank you to everyone for joining us today. We are extremely pleased with the 21,000 increase in our annual revenue that we reported for 2023, along with an even more impressive 32.8 year-over-year increase in revenue for the fourth quarter. This robust growth underscores the effectiveness of our efforts over the past year to leverage our distribution network in order to drive revenue. Our strategy to further develop our distribution network is two-pronged, adding new retail partners and expanding our product offerings with existing partners. In 2023, we achieved significant success in both areas thanks to our growing industry market position, driven by our outstanding service and reliability. As a result, Edible Garden has become a go-to partner for retailers seeking a trusted source for organic and sustainable products. Additionally, the company continually strives to identify additional opportunities to boost profit margins, The prudent management of our operations is reflected in our financials by the increase in our gross profit margin by 270 basis points in 2023 to 5.9% of revenue, nearly double the 3.2 gross profit margin we achieved in 2022, and the 767 basis points improvement in our operating margin. Moreover, our gross profit increased to 6.9% of revenue in the fourth quarter, We believe that by continuing to add higher margin products to the edible garden product line, we will be able to further increase our gross profit margin in 2024 and in the future years to come. We have further leveraged our platform to enrich and broaden our wider range of edible garden products. We recently partnered with Topps Friendly Markets, introducing our sustainable herbs to 149 stores across New York, Pennsylvania, and Vermont. Additionally, Uncle Giuseppe's Marketplace, a division of Our Best Produce, is now carrying edible garden herbs in their 12 locations throughout New York and New Jersey. These new partnerships further enhance our footprint in the northeastern United States, marking a significant step forward in making our sustainable, fresh produce more accessible to consumers in the region. In February, we entered into a three-year agreement with a leading U.S. food retailer to broaden the range of edible garden products available in their stores. This expansion encompasses a diverse selection of our offerings, including potted and fresh-cut herbs, fresh-cut basil, and wheatgrass. The partnership goes beyond merely increasing our product assortment. It introduces fresh and innovative displays designed to elevate our brand's visibility and prominence on the retailer's shelf. These initiatives underscore our commitment to deepening our relationship with our retail partners, aiming to better satisfy their requirements and simplify the shopping experience for their customers. In the fourth quarter of 2023, we expanded our offerings at Meijer stores with two new flavors from our Vitamin Whey collection, notable for its blend of high-quality whey protein, amino acids, while providing excellent nutritional value at an affordable price. This addition is expected to bolster Edible Garden's reputation as a flavor maker through our ongoing collaboration with Nutricom for innovative flavors. This success of Vitamin Whey supports our belief that these flavors will enhance our brand and facilitate nationwide expansion. Additionally, we enhanced our production capabilities at our greenhouse operations in New Jersey and Michigan, which has led to a decreased dependency on contract growers, allowing us greater control and flexibility in our operations while impacting potential profitability. Moreover, our investment in Edible Garden in Heartland has been rewarding incorporating advanced technologies such as our proprietary GreenSum greenhouse management system, which significantly improves the efficiency of our supply chain, allowing the company to ship tens of thousands of fall ornamentals just in time for the fall gardening season. We anticipate increased profit from the margins from the ornamental sector and are confident that this expanding line of business will have a positive effect on the company's overall profitability. A major milestone for the company in 2023 was the introduction of pulp, our cutting-edge selection of sustainable gourmet sauces and chili-based products, which allowed Edible Garden to enter the global sauces and condiments sector, a sector that is projected to grow from $172 billion in 2021 to over $240 billion by 2028. Expanding into a new product category was significant for the company as it provides us with higher margin products with longer shelf life. In addition, it provides the Edible Garden brand with additional visibility as the product will be located in retailers' refrigerated sections, which are adjacent to our products that they're already carrying in the produce section of their locations. Within a short time, we have introduced pulp to many new retailers and markets. After an initial launch at Whole Foods Market retail locations across their Middle Atlantic and Southeastern divisions in the summer of 2023, we rapidly added new retailers that are now carrying pulp products. Pulp is now available at Morton Williams, 16 locations in the New York metropolitan area, Deerburg's Market, 26 locations in the greater St. Louis metropolitan area, as well as Woodman's Market with 19 locations across Wisconsin and Illinois. Most recently, Target joined our growing list of retail partners carrying the Pope line in 2024. The expansion to Target's Southeastern stores significantly expands our distribution network for all Edible Garden products, which now spans over 5,000 retail locations across the nation, including several major big box retailers. Edible Garden will support this launch by rolling out a robust marketing campaign that includes sampling, geo-targeting, influencer partnerships, and promotional pricing. We are confident that once customers try our sustainable USDA organic bland to bold gourmet sauces, they will be eager to explore more offerings from the product line. Given Target's nationwide presence, we anticipate that this collaboration will significantly boost the growth and visibility of both our pulp product line and edible garden brand overall. In early March of this year, we announced that Kehi Distributors, the premier distributor of natural and organic specialty and fresh products, is now carrying our pulp product line. KHE's expansive distribution network encompasses over 31,000 national food stores, chain and independent grocery stores, e-commerce retailers, and other specialty product retailers across North America. In January 2024, we launched the Pulp e-commerce site, enhancing accessibility to our gourmet sauces by enabling online purchase directly. This move significantly broadens consumer access to our distinctive flavors. The overwhelming positive reception of Pulp has underscored our reputation as a flavor maker. with our unique peppers turning sauce enthusiasts into aficionados. Thanks to our e-commerce platform, customers across the country can now enjoy blandable flavors of pulp from their homes. Earlier this year, the U.S. Patent Trademark Office awarded Edible Garden two new patents. The first patent pertains to Green Thumb, a web-based greenhouse management system and demanding planning system that enables the company to enhance our supply chain, which has led to improved shipping and fill rates alongside notable sales growth. This was the third distinct patent awarded for this advanced system. The second patent highlights our commitment to innovation through our proprietary self-watering display technology. This technology has been a game-changer for the company, extending plant shelf life, ensuring freshness, and dramatically reducing spoilage at retailer outlets. Aligned with our zero-waste-inspired mission, these self-watering displays allow retailers to showcase plants at their peak, minimizing waste and delivering superior products to customers. These patents are a testament to Edible Garden's leading role in the ag tech industry, further demonstrating the company's unwavering commitment to leading-edge innovation. Through the deployment of advanced technologies such as these patents, we are driving operational efficiency and enhancing expected profitability, highlighting Edible Garden's commitment to sustainable development and its position as a leader in agricultural technology. Recently, the company was awarded several grants to cover various expenses related to the Organic crop certification, and training costs at our greenhouse facilities in Belvedere, New Jersey, and Grand Rapids, Michigan. In Michigan, the company was granted funding by the Going Pro Talent Fund, overseen by the Michigan Department of Labor and Economic Opportunity, and facilitated by Michigan Works. This support is designated to cover training costs for our staff at the Edible Garden Heartland Facility in Grand Rapids, Michigan, focusing on essential skills like supply chain management, transportation, and logistics. Additionally, we secured a grant from Michigan Occupational Safety and Health Administration, which will assist in creating a safer and healthier work environment at Obelgar and Heartland, thereby reducing the risk of workplace accidents and health issues among employees. In New Jersey, the company was awarded a grant by the United States Department of Agriculture Organic Certification Program managed by the Hackettstown Farm Service Agency. This grant provides financial assistance to organic producers and handlers, offering reimbursement to help cover the expenses related to obtaining organic certification and processing and handling certifications. The grants we've received underscore our commitment to food safety and are a valuable addition to our research collaborations. We are also engaged in a project with the New York Institute of Technology, the USDA, and the EPA to explore the impact of nanopole technology on the safety and processing of fresh produce. Our collaboration with Auburn University's Department of Horticulture aims to tackle food safety challenges associated with fresh produce. These collaborations highlight our dedication to upholding the highest standards of food safety and quality across our product range. I would like now to turn the call over to Costas Tafoulis, who recently joined Edible Garden as their interim chief financial officer, who will review the financial results for the three months and year-ended December 31, 2023. Costas?