Edible Garden AG Incorporated

Good morning everyone and welcome to the Edible Gardens second quarter 2024 business update conference call. At this time all participants have been placed on a listen only mode and we will open for questions following the presentation. If anyone should require operator assistance during the conference please press star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mr. Ted Avas, Investor Relations, Crescendo Communications. Ted, the floor is yours.

Thanks, Jenny. Good morning, and thank you for joining Edible Gardens' quarter-ended June 30, 2024 conference call and business update. On the call with us today are Jim Kras, Chief Executive Officer of Edible Gardens, and Costas Tafoulis, Interim Chief Financial Officer of Edible Gardens. Earlier this morning, the company announced its operating results for the three-month end of June 30, 2024. The press release is posted on the company's website, www.ediblegardenag.com. In addition, the company has filed its quarterly report on Form 10-Q 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. Kratz reviews the company's operating results for the quarter ended June 30, 2024, 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 the conference call, including statements regarding our future results of operations and financial position, strategy and plan, 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, in other words, in terms of similar expression, 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 31st, 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 achievement. In addition, neither the company or 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. Having said that, I'd now like to turn the call over to Jim Corrett, Chief Executive Officer of Edible Garden. Jim?

Thanks, Ed. Good morning, and thank you to everyone for joining us today. We're excited to report another outstanding quarter. highlighted by a 157% increase in gross profit, fueled by year-over-year growth of 61% in cut herbs and a 30% growth in vitamins and supplements. A shift away from third-party growers and a focus on higher margin businesses are driving our gross profit margin improvement. Now, with approximately 95% of our fresh product line produced in-house, our gross margin increased to 36.7% in the second quarter of 2024, up from 13.1% in the same period last year. We've also conducted a thorough review of our business operations and made the strategic decision to move away from less profitable segments of our business. Instead, we are directing our focus and efforts towards more profitable, higher margin segments. We believe this strategic shift, combined with the vertical integration of our operations, positions us well to achieve our goal of becoming cash flow positive in the near future. The second quarter, we expanded the distribution of our pulp line of sustainable USDA organic fermented gourmet sauces and chili-based products with the addition of UNFI distributors. As a leading North American wholesaler of health and specialty foods, UNFI serves over 30,000 locations, including natural product superstores, independent retailers, supermarket chains, and e-commerce platforms. and food service providers across the continent. We believe the addition of UNFI, which is dedicated to promoting a better food system and leading the way in meeting consumer demand for healthier options, aligns perfectly with Edible Garden's zero-waste-inspired mission. Through KEHI distributors, UNFI distributors, and our own e-commerce platform, retailers across the continent now have access to our bland-to-bold pulp product line. Our growing roster of major retailers with pulp includes Target, Whole Foods, Meijer, Morton Williams, Dierberg Markets, and Woodman. According to research and markets, the global sauces and condiments product category is expected to grow to $240 billion in 2028 from $172 billion in 2021. The response to the pulp product line has been overwhelmingly positive from consumers seeking to enhance their meals with its bland to bold flavor profiles, reinforcing Edible Garden's reputation as a flavor maker. We are confident that expanding the availability of our pulp lines through UNFI and the Cahey distributors, we are accelerating pulp's momentum and ensuring our unique flavors reach consumers across the United States and Canada. We've also strengthened our distribution through our partnership with Hemingway's, which serves more than 350 retailers across the Northeast region. This includes developing a new integrated rack program designed to provide Hemingway's retail partners with an improved and more efficient method for displaying edible garden herbs. These integrated racks align with our strategy to enhance brand visibility and improve consumer access to our products. We believe this initiative will offer a more engaging and efficient shopping experience for all retail customers, which can help increase sales and overall customer satisfaction. In July, we expanded our retail distribution network with the addition of Seasons Kosher, a local supermarket chain celebrated for its extensive range of kosher products distinguished by a commitment to quality and ethical sourcing. In addition, Lincoln Market, known for its fair pricing and diverse selection of high-quality organic and conventional products, will also begin carrying edible garden products. Our dedication to sustainability and community involvement aligns seamlessly with the principles of both these retailers, making them a natural fit for our growth strategy. Furthermore, we are excited that our entire product line, including pulp, is now available at every Brooklyn Fair location in New York City. Brooklyn Fair is renowned for its offering products that satisfy their customers' sophisticated flavor preferences. At their Hudson Yards location, they also operate Chef's Table at Brooklyn Fair, a restaurant where cutting-edge culinary expertise and creativity comes to life. We launched Garden Starters, potted herbs and basil bowls designed for home gardening to retailers. First introduced in 2023 to cater to the growing popularity of home gardening, these eco-friendly herbs meet the needs of 35% of American households that grow at least some of their own food, providing them with diverse flavor options. Our vertically integrated edible garden facilities manage their production, packaging, and distribution. By placing garden starters next to our cut herbs and sustainably sourced produce in supermarkets, we aim to offer maximum convenience to our customers. In May, we entered a product development partnership with Herman Pickle Company, a leading brand in refrigerated kosher dill pickles, sauerkraut, and other fermented foods, known nationwide for their presence in delis and on family dinner tables. This collaboration will continue will combine the strengths of both companies to explore and develop scalable commercial opportunities, focusing on producing marketing and distributing fermented plant-based products and non-GMO consumer package goods. We are excited to work with the Herman Pickles team, leveraging their esteemed legacy to create a contemporary line of fermented products. In addition, we have implemented several new proprietary innovations, focus on packaging and shipping, which is expected to significantly extend the shelf life of our products, reducing spoilage and driving cost savings for our retail partners. These innovations serve as an important competitive differentiator for Edible Garden and build on our other unique solutions. For example, our patented self-watering in-store display has already transformed how plants are displayed, ensuring they remain fresh for longer and greatly minimize waste at retail outlets. Aligned with our zero waste inspired mission, These innovations allow retailers to showcase plants at their peak, minimizing waste and providing superior products to their customers. In July, we launched a comprehensive training program with Abilities of Northwest New Jersey, a nonprofit providing employment and day services for individuals with disabilities. Our decade-long partnership with Abilities of Northwest New Jersey has been incredibly rewarding. By integrating workers with disabilities who consistently demonstrate exceptional dedication and hard work, we have created an environment that benefits Edible Garden and empowers these individuals. Our training programs offer valuable skills and professional development opportunities, enhancing these workers' employability and career prospects while enriching our workforce with diverse talents. As we expand this partnership, Edible Garden remains committed to community involvement, local investment, and leadership at ESG and sustainability initiatives that we are known for. I would like to turn the call over to Costas DeFoulis, our Interim Chief Financial Officer who will review the financial results for the three months ended June 30th, 2024. Costas?