Edible Garden (EDBL) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We 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
2. 02We will need to obtain additional financing to fund our operations, which may not be available on favorable terms, if at all, and if we are unable to obtain such financing, we may be unable to operate and continue our business
3. 03Our business may be adversely affected by the departure of members of our management team
4. 04Changes to estimates related to our property, equipment and leasehold improvements that are lower than our current estimates have in the past and may in the future cause us to incur impairment charges on certain assets, which may adversely affect our results of operations
5. 05We are a relatively smaller company than many of our competitors, which makes it difficult to execute our strategy and achieve our growth objectivesNew
6. 06We 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 affected25% rewritten
7. 07The 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
8. 08We may implement new lines of business, such as RTD beverages or offer new products and services within existing lines of businessNew
9. 09Our 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
10. 10Our relationships with customers and suppliers are primarily based on purchase orders rather than long-term purchase commitments
11. 11Adverse weather, natural disasters and other conditions affecting the environment, including the effects of climate change, could result in substantial losses and weaken our financial condition
12. 12Our performance may be impacted by general and regional economic volatility, inflation, tariffs, or an economic downturn
13. 13Because 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
14. 14If we are unable to attract, train and retain qualified personnel, we may not be able to effectively execute our business strategy41% rewritten
15. 15The 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
16. 16We may not successfully integrate assets from acquisitions22% rewritten
17. 17the loss of key employees of an acquired business operation
18. 18interest costs and debt service requirements for any debt incurred in connection with an acquisition or new business venture
19. 19If 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
20. 20We may implement new lines of business, such as the Pulp sauces, Pickle Party, and Kick. Sports Nutrition, or offer new products and services within existing lines of business
21. 21Damage to our reputation could negatively impact our business, financial condition and results of operations
22. 22Our business and operating results rely on effective quality controlNew
23. 23Our products may be subject to recallsNew
24. 24We are subject to risk of product contamination and product liability claims
25. 25We may incur substantial costs enforcing or acquiring intellectual property rights and defending against third-party claims as a result of litigation or other proceedings
26. 26If we are unable to obtain patent protection for our products or otherwise protect our intellectual property rights, our business could suffer
27. 27Our business could be negatively impacted by cyber security threats, attacks and other disruptions
28. 28Security breaches of confidential customer information or confidential employee information may adversely affect our business
29. 29Our indebtedness and the rights of our Series B Preferred Stock could have important consequences to you 29% rewritten
30. 30place us at a competitive disadvantage compared to competitors that may have proportionately fewer obligations to shareholders or less debt and greater financial resources

Risks Related to Our Industry

1. 31Failure to obtain necessary permits or otherwise comply with USDA and FDA 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
2. 32Improper use of hydroponic farming methods may significantly impact our ability to maintain our operations and may adversely affect our financial results
3. 33We are subject to fluctuations in market price and demand for agricultural products
4. 34Our results may vary from quarter to quarter depending on seasonal fluctuations related to the sale of our products
5. 35Increases in commodity or raw product input costs, such as fuel and packaging materials, could increase costs significantly24% rewritten
6. 36Government policies and regulations specifically affecting the agricultural sector and related industries could adversely affect our operating results
7. 37We face intense competition that could prohibit us from developing or increasing our customer base

Risks Related to the Ownership of our Securities

1. 38There can be no assurance that our shares will continue to be listed on the Nasdaq Capital Market, which would affect our common stock’s liquidity and reduce our ability to raise capital47% rewritten
2. 39If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares
3. 40We have not and do not expect to declare any dividends on our common stock in the foreseeable future
4. 41We 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 stock53% rewritten
5. 42Provisions 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
6. 43A prolonged economic downturn could adversely affect our business
7. 44Increases in costs, disruption of supply or shortage of raw materials could harm our business27% rewritten
8. 45Litigation may adversely affect our business, financial condition and results of operations37% rewritten
9. 46Our internal control over financial reporting has inherent limitations, and even effective controls may not prevent or detect all errors or instances of fraudNew
10. 47The price of our stock is volatile, and you could lose all or part of your investment56% rewritten
11. 48general economic or political conditions in the United States or elsewhere
12. 49We 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
13. 50If we were to dissolve, the holders of our securities may lose all or substantial amounts of their investments
14. 51If 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