Q2 2024 Edible Garden AG Inc Earnings Call

Operator: Anthony Vendetti, Unknown Attendee, James Kras. Good morning everyone and welcome to the Edible Garden 2nd quarter 2024 Business Update, 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. Please note this conference is being recorded. I will now turn the conference over to your host, Mr Ted Ayvas, Investor Relations, Crescendo Communications. Ted, The Flourish, Thanks, Jenny.

Good morning, everyone and welcome to the edible garden second quarter 'twenty 'twenty four business update conference call.

Speaker Change: 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.

Ted <unk>: I'll now turn the conference over to your host Mr. Ted <unk> Investor Relations Crescendo Communications, Ted the floor is yours.

Ted Ayvas: Good morning, and thank you for joining Edible Garden's quarter-ended June 30, 2024 conference call and business update. On the call with us today are Jim Kras, Chief Executive Officer of Edible Garden, and Kostas Dafoulas, Interim Chief Financial Officer of Edible Garden. Earlier this morning, the company announced its operating results for the three-month-ended 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.

Jim <unk>: Thanks, Jamie Good morning, and thank you for joining edible gardens quarter ended June 32024 conference call and business update on the call with US today are Jim <unk>, Chief Executive officer of vegetable Garden.

The pool is interim chief financial officer of edible gardening.

Speaker Change: Earlier this morning, the company announced its operating results for the three months ended June 32020 for the press release is posted on the company's website at Www Dot edible Garden AG Dot 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.

Speaker Change: He sees website at www Dot FCC dot Gov.

Speaker Change: Have any questions after the call or would like any additional information about the company. Please contact crescendo communications at 2126711020.

Speaker Change: Before Mr. Grant to review the company's operating results for the quarter ended June 32024, and provide the 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.

Ted Ayvas: Before Mr. Kras 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 expressions, are intended to identify forward-looking statements.

Ted Ayvas: 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.

Ted Ayvas: Because of these risks, uncertainties, and assumptions, the forward-looking event 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 statement. 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.

Ted Ayvas: 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 expertly 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 Kras, Chief Executive Officer of Edible Garden, Jim. Thanks, Ed.

Speaker Change: Including statements regarding our future results of operations and financial position strategy and plans and our expectations for future operations are forward looking statements.

James Kras: Good morning, and thank you to everyone for joining us today. We are 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 direct.

James Kras: Instead, we are directing our focus and efforts on, 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 cashflow 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.

Speaker Change: Words aim anticipate believe could expect May plan project strategy will and the negative such times in other words in terms or similar expressions are intended to identify forward looking statements.

Speaker Change: These forward looking statements are based largely on the Companys 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 call.

Speaker Change: These 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 look.

Speaker Change: Today.

Speaker Change: 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 of the company or any other person assumes responsibility for the accuracy or completeness of any of these forward looking statements.

Speaker Change: The company disclaims any duty to update any of these forward looking statements except as required by law.

Speaker Change: 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 of them.

Speaker Change: All forward looking statements made by the company in the context of these risks and uncertainties.

James Kras: Through Kahie distributors, UNFI distributors, and our own e-commerce platform, retailers across the continent now have access to our Blant, Bold, Pulp products. Unknown Attendee, James Kras, Michael James, Theodore Ayvas, Nicholas Sherwood, Kostas, 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.

Jim <unk>: He said that I'd now like to turn the call over to Jim <unk>, Chief Executive Officer, a vegetable garden Jim.

James Kras: We are confident that expanding the availability of our pulp line through UNFI and CAHI 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 RAC program designed to provide Hemingway's retail partners with improved and more efficient methods for displaying Edible Garden's herbs.

Jim <unk>: Thanks, Ed Good morning, and thank you to everyone for joining us today.

Speaker Change: Well, we are excited to report another outstanding quarter highlighted by a 157% increase in gross profit fueled by a year over year growth of 61% and cut herbs and a 30% growth in vitamins and supplements shift away from.

Speaker Change: Third party growers and they 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.

Speaker Change: 13.1% in the same period last year.

Speaker Change: 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 focused direct instead, we are directing our focus and efforts on.

Speaker Change: Towards more profitable higher margin segments, we believe the strategic shifts bond with the vertical integration of our operations positions us well to achieve our goal of becoming cash flow positive in the near future.

Speaker Change: The second quarter, we expanded the distribution of our pulp line of sustainable USDA USDA organic lamented gourmet sauces in Chile based products with the addition of UNFI distributors as a leading north American wholesale or health and specialty foods unified serves over 30000 locations, including <unk>.

Speaker Change: Natural products superstores independent retailers supermarket chains, and e-commerce platforms and foodservice 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 gardens zero waste inspired mission.

Speaker Change: Okay, he distributors UNFI distributors and our own e-commerce platform retailers across the continent now have access to our plan to bold product pulp product line, a growing roster of major retailers with pulp concludes target whole foods Meyer Morgan Williams, the urban markets and woodlands, According to research and markets the global sources.

Speaker Change: Columns product category is expected to grow to 2022 or I'm, sorry, 240 billion and 2028 and 107 from 172 billion in 2020. One the response to pulp the problem Paul product line has been overwhelmingly positive from consumers seeking to enhance their meals with with its bland diebold failed flavor profile.

Speaker Change: Reinforcing edible gardens reputation as a flavor market maker, we are confident that expanding the availability of our pulp wiser UNFI and K distributors, we're accelerating pulp has 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 drives more.

Speaker Change: 350 retailers across the North East region. This includes developing a new integrated rack program designed to provide I mean way retail part has been improved and more efficient method for displaying Apple garden's herbs.

James Kras: 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.

Speaker Change: These integrated racks aligned 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 and could help increase sales and overall customer satisfaction.

Speaker Change: You lie 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 our 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 be getting carrying edible garden products.

James Kras: In addition, Lincoln Market, known for its fair pricing and diverse selection of high-quality organic and conventional products, will also be 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 a growth spread. Furthermore, we're 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 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 come to life.

Speaker Change: Our dedication to sustainability and community involvement aligned seamlessly seamlessly with the principles of both these retailers, making them a natural fit for our growth strategy.

Speaker Change: Furthermore, we are excited that our entire product line, including pulp is now available at every Brooklyn fare location in New York City, Brooklyn Fair is we're now in fluids offering products that satisfy their customers sophisticated flavor preferences at.

Speaker Change: That their husbands Hudson yards location. They also operate chef's table at Brooklyn fare the restaurant, we're cutting edge culinary expertise.

James Kras: 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.

Speaker Change: Expertise and create creativity comes to life, we launched garden starters pilot herbs and basal bolus 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 the diverse flavor options.

Speaker Change: Our vertically integrated edible gardening facilities manage their production packaging and distribution by placing garden starters, and XR cutters and sustainably sourced Kronos in supermarkets, we aim to offer maximum convenience to our customers.

James Kras: In May, we entered a product development partnership with Hermann 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 packages. We are excited to work with the Herman Pickles team, leveraging their esteemed legacy to create a contemporary line of fermented products.

Speaker Change: May we entered a product development partnership with Harman Pickle company, a leading brand in refrigerated kosher Dill pickles sauerkraut and other fermented foods no nationwide for their presence in deli that I'm family dinner tables. This collaboration will continue will combine the strengths of both companies to explore and develop a scalable.

Commercial opportunities focusing on producing market, producing marketing and distributing food fermented plant based products and non GMO consumer packaged goods.

Speaker Change: We are excited to work with those of Herman kept pickles team leveraging their was deemed legacy to create a contemporary lineup for medical products.

James Kras: In addition, we have implemented several new proprietary innovations focused 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.

Speaker Change: 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 retailer partner our retail partners. These innovations serve as an important competitive differentiator for edible gardening and build on our other unique solutions solutions.

Speaker Change: For example, our patented yourself watering in store display has already transformed how plants would dissuade ensuring they remain fresh for lager 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 our customers.

James Kras: Aligned with our zero-waste inspired mission, these innovations allow retailers to showcase plants at their peak, minimizing waste and providing superior products to our 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.

Speaker Change: July launch a comprehensive training program with the abilities of northwest, New Jersey, nonprofit providing employment and data services for individuals with disabilities. Our decade long partnership with abilities of northwest New Jersey has been incredibly rewarding by integrating workers with disabilities consistently demonstrated exceptional dedication and hard work, we have created an environment.

James Kras: 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, are training programs to 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 in ESG and sustainability initiatives that we are known for. I would like to turn the call over to Kostas Dafoulas, our Interim Chief Financial Officer, who will review the financial results for the three months ended June 30, 2024. Kostas.

Speaker Change: That benefits edible gardening and empowers these individuals.

Speaker Change: 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 a community involvement local investment.

Claus Tholstrup: And leadership in ESG and sustainability initiatives that we are known for I would like to turn the call over to close this foolish our interim Chief Financial Officer, who will review the financial results for the three months ended June 30 of 'twenty 'twenty four caused us.

Kostas Dafoulas: Thanks, Jim. And good morning, everyone. Turn to our second quarter results. Total revenue for the second quarter was $4.2 million, relatively flat compared to Q2 2023. The slight increase in revenue was driven by our core product portfolio, primarily cut herbs and our vitamin supplement business. Our strategic shift away from lower margin products offset the revenue increase in our core products, specifically from the floral segment. Cost of goods sold decreased by 37% to 2.7 million for the three months ended June 30, 2024, compared to 3.7 million for the 2023 comparable quarter.

Claus Tholstrup: Thanks, Jim and good morning, everyone turning to our second quarter results total revenue for the second quarter was $4 2 million relatively flat compared to Q2 2023, the slight increase in revenue was driven by our core product portfolio, primarily cut herbs, and our vitamin and supplement business or strategic shift.

Claus Tholstrup: Way from lower margin products offset the revenue increase in our core products specifically from the floral side segment cost of goods sold decreased by 37% 2.7 million for the three months ended June 32024, compared to $3 7 million for the 2023 comparable quarter.

Claus Tholstrup: The decrease was largely driven by the company's strategic shift away.

Kostas Dafoulas: The decrease was largely driven by the company's strategic shift away, from our largest third-party growers. As Jim stated earlier, in the second quarter of 2024, the company's gross profit increased by 157% as compared to the 2023 comparable period. In addition, gross margin increased to a record 34.4% in the second quarter of 2024, compared to 13.1% for the same period last year. Both these impressive results were driven by the shift away from our dependence on third party growers.

Claus Tholstrup: From our largest third party growers.

Claus Tholstrup: As Jim stated earlier in the second quarter of 2024 of the company's gross profit increased by 157% as compared to the 2023 comparable period.

Claus Tholstrup: In addition, gross margin increased to a record $34 for the.

Claus Tholstrup: The second quarter of 2024 compared to 13, 1% for the same period last year.

Speaker Change: Both these impressive results were driven by the shift away from our dependence on third party growers.

Kostas Dafoulas: Selling General and Administrative Expenses totaled $2.7 million for the three months ended June 30, 2024, compared to $2.4 million for the three months ended June 30, 2023. The increase was primarily driven by higher audit, accounting, and legal fees related to our capital raising activities in the quarter and a one-time expense of $100,000. The net loss was One point.

Speaker Change: Selling general and administrative expenses totaled $2 7 million for the three months ended June 32024, compared to $2 4 million for the three months ended June 30th So any twenty-three the increase was primarily driven by higher audit accounting and legal fees related to our capital raising activities in the quarter and a one time expense of $100000.

Speaker Change: Net loss.

Speaker Change: Was.

Speaker Change: One point.

Kostas Dafoulas: $1.21 per share for the three months ended June 30, 2024 compared to a net loss of $4.83 per share for the three months ended June 30, 2023. While the loss from operations improved year over year by $645,000 from the loss of $1.83 million in Q2 of 2023 to $1.18 million in Q2 of 2024, higher interest expense and a one-time loss, on the extinguishment of debt in Q2 of 2024, along with a one-time $1.2 million credit in Q2 of 2023 related to the employee retention credit, led to an increase in our net loss this year.

Speaker Change: $1 21 per share for the three months ended June 32024, compared to a net loss of $4 need three cents per share for the three months ended June 30 of 2023, well we lost from operations improved year over year by 645000 from lots of 1.83 million in Q2 2023.

Speaker Change: 1.18 million in Q2 of 2024 higher interest expense and a one time loss.

Speaker Change: On the extinguishment of debt in Q2 of 2024, along with a one time $1 2 million dollar credit in Q2 of 2023 related to the employee retention credit led to an increase or a net loss this year.

Kostas Dafoulas: In closing, we've been working hard to improve our margins, and we are pleased with the way our team executed this quarter. Our results in Q2 show that the strategic shift we made in our product mix and reliance on third-party growers is starting to deliver results if we remain committed to a disciplined financial approach. With that, operator, please open the line for questions. Thank you very much. We will now be conducting our question and answer session.

Speaker Change: In closing we have been working hard to improve our margins and we are pleased with the way our team executed this quarter.

Speaker Change: Our results in Q2 show that this strategic shift we made in our product mix and reliance on third party growers is starting to deliver results. We remain committed to a disciplined financial approach with that operator. Please open the line for questions.

Kostas Dafoulas: If you would like to ask a question, please press star 1 on your phone, The confirmation tone will indicate that your life, You may press start too if you would like to remove your question from the key for any part of it.

Thank you very much we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your fine keep Pat now.

Speaker Change: Confirmation tone will indicate that Youll line isn't the key you May press star two if he would like to remove your question from the key participants using speaker equipment it might be necessary to pick up your handset before pressing the keys. Please wait amendment lusby poll for questions.

Operator: Speaker Equipment, it might be necessary to pick up your handset. Please wait a moment. Your first question is coming from Anthony Vendetti of The Maxx. Anthony, Your Line, Thank you. So, I, Jim, it's great to see that we're moving more towards the high profitable items and vitamins and supplements grew this quarter. Can you talk about the outlook for that product line for the rest of this year. And then also, Talk to us about contract growers. I know you've been trying to reduce that to improve gross margin. How did that do this quarter?

Speaker Change: Thank you.

James Kras: And then expectations for that for the rest of the year as well. Thanks, Anthony. We're extremely pleased with the quarter, with the reflection in the numbers, I mean, we are continuing to expand the assortment of our products, products, so we have the diversity that we need, and flexibility, you know, obviously, we are a CEA. Company that uses the greenhouse to inform everything we do and when we'll be wanting to finish goods, i.e. the farm formula approach to the vitamins and supplements.

Speaker Change: Your first question is coming from Anthony Vendetti Maxim Great. Anthony Your line is live.

Anthony Vendetti: Thank you.

Anthony Vendetti: So Jim it's great to see that we're moving more towards the high profitable.

Speaker Change: Items and.

Speaker Change: Vitamins and supplements grew this quarter.

Speaker Change: Can you can you talk about the outlook for.

That product line.

Speaker Change: For the rest of this year and then also.

Speaker Change: Just.

Speaker Change: Talk to us about the contract contract growers I know you've been trying to reduce that to improve gross margin had how did that do this quarter and then XP.

Speaker Change: Expectations for that for the rest of the year as well.

Speaker Change: Thanks Anthony.

Speaker Change: We're extremely pleased with the quarter with the reflection of the numbers I mean, we are continuing to.

Speaker Change: Expand the assortment of our products products. So we have the diversity that we need the flexibility I'm you know obviously, we are a C E.

Speaker Change:

James Kras: To answer your question, vitamin supplements, we have a big trade show coming up in September. We'll be introducing a new line in addition to the existing vitamin way line that we have. There'll be some near term announcements as far as us expanding our sales efforts in the e-commerce realm shortly. So that'll allow us to expand our reach. That's going to really be driven by a combination of not only new products, but our positioning and relationship with the 5000 stores that we have, which allow us to have some opportunity to drive that business in and expand it. Obviously, the ring for vitamins and supplements is much higher than a plant, let's say.

Speaker Change: Company that uses the greenhouses inform everything we do a little bit more into finished goods I E. The farms formula approach to the vitamins and supplements are the answer to your question vitamin supplements are we a big trade show coming up in September we'll be introducing a new line.

Speaker Change: In addition to the existing vitamin way line that we have there'll be some near term announcements as far as us expanding our sales efforts in the E Commerce realm and then it shortly.

Speaker Change: So that will allow us to expand our reach that's going to really be driven by a combination of not only new products, but are you know our I think our positioning and relationship with the 5000 doors that we have which will allow us to have.

Unknown Attendee: Good morning everyone, and welcome to the Edible Garden 2nd quarter of 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.

Speaker Change: Some you know opportunity to drive that business in and expand it obviously the ring.

James Kras: So for us, we see that not only allowing us to drive a business at a good, healthy margin, but also drive that top line significantly as we have been able to really dig in and get the CEA part of the business, the greenhouses, with Michigan Fully Online now and us growing 95% of our fresh goods. Really allows us to kind of check the box, and Acceptance into our retailers that we'll be launching in 2025, not only in the vitamin supplement part of the business, but also in the more shelf-stable, fresh segment.

Speaker Change: For vitamins and supplements is much higher than our plant, let's say so for us we see that not only allowing us to drive the business at a good healthy margin, but also drive that top line significantly as we haven't been able to really dig in and.

Ted Ayvas: I will now turn the conference over to your host, Mr. Ted Ayvas, investor relations, crescendo communications, Ted, the floor is yours. Thanks Jenny, good morning and thank you for joining Edible Garden's quarter ended June 30, 2024 Conference Call and Business Update. On the call with us today are Jim Kras, Chief Executive Officer of Edible Garden, and Kostas Dafoulas, interim chief financial officer of Edible Garden. Earlier this morning the company announced its operating results for the three months ended June 30, 2024.

Speaker Change: Yes, we see a part of the business the greenhouses with with.

Ted Ayvas: The press releases posted on the company's website, www.ediblegardenag.com. In addition the company has filed a quarterly report on form 10Q with the US Security and Exchange Commission, which can also be accessed on the company's website as well as the SEC's website at www.suc.gov. If you have any questions after the call or would like any additional information about the company, please contact crescendo communications with 212-671-1020.

Speaker Change: Michigan fully online now and that's growing 95% of our fresh goods are really allows us to kind of check the box.

Speaker Change: Shortly here once that business is is cash flow positive that segment and really start to drive the vitamins and supplements. We've got a line of of functional Petzel pickles, which would be kind of a one of the.

Speaker Change: Totally new item and out into the marketplace. That's something that we're currently working on and I would say I think that what will happen at the big Pro to show this.

This fall.

Speaker Change: And we have some other products that have already gotten acceptance into our retailers that will be launching in 2025, not only in the vitamin supplement are part of the business, but also in the.

Ted Ayvas: Before Mr. Kras 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 in financial position, strategy and plan, and our expectations for future operations are forward-looking statements. The words aim and dissipate elite could expect made planned project strategy will, and the negative of such times in other words in terms of similar expression are intended to identify forward-looking statements.

Speaker Change: And the and the more shelf stable fresh segment, so I couldn't be more bullish on the business right now, it's all starting to come together and where we're really starting to kind of hit that hit our marks so I will continue on the on the vertical integration piece to answer your second question.

James Kras: So I couldn't be more bullish on the business right now. It's all starting to come together, and we're really starting to kind of hit our marks. So we'll continue on the vertical integration piece to answer your second question, as it relates to continuing to make an investment in efficiency, shifting away from bringing product from the outside, specifically a lot of the fresh goods. It helps in so many different ways.

Speaker Change: As it relates to continuing to making an investment and efficiency are shifting.

Speaker Change: Shifting away from from bringing product from the outside.

Specifically.

Speaker Change: A lot of the fresh goods.

Speaker Change: It helps in so many different ways, yeah, there's the margin expansion that it that it drives but it's also just quality consistency cuts down on shrink we control what now is a very tight.

James Kras: Yeah, there's the margin expansion that it drives, but it's also just quality, consistency, So as it shuts down on shrink, we control what now is a very tight supply chain, especially to the likes of Meijer and Wigford, Chopright and Walmart, where we're so close to their distribution centers with our own facility that it's very smooth and we have a lot of control over it. And we have been able to continue to cut down our transportation costs by using back hauls with both the retailers that pick up goods at our facilities, which really helps us not only with the environment and taking trucks off the roads, but also by ride sharing, but also just by proficiency, since everything kind of runs a clockwork. So really, really excited. It's taken us a little bit of time to get here.

Ted Ayvas: 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, result of operations, strategy, short-term and long-term business operations and objectives, and financial need. These forward-looking statements are subject to several risks uncertainties and assumptions as described in the company's filing of the SEC, including the company's annual report on form 10Q for the year ended December 31, 2023.

Speaker Change: Supply chain, especially to the likes of Myer.

Speaker Change: And wait for a job right and Walmart, where you know, we're so close to their distribution centers with our own facility that its very smooth and we have a lot of control over it and we have been able to continue to cut down our transportation cost by using a backhaul with both retailers.

Ted Ayvas: Because of these risks uncertainties and assumptions, the forward-looking event 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, these are the company or any other person as soon as responsibility for the accuracy and completeness of any of these forward-looking statements.

Speaker Change: A couple of goods at our facilities, which you know really helps us not only with the environment and taking trucks off the roads.

Speaker Change: But also my ride sharing but but also just by proficiency.

Speaker Change: Since everything kind of runs at clock work so.

Speaker Change: Really really excited it's taken us a little bit of time to get over the last three months. We've really we've really we've improved the operations by but you know a huge a huge jump.

James Kras: The last three months, we've improved the operations by a huge jump, just with the ability of having everything in-house and controlling more of it. I know it's great, Jim. And obviously, you have many of the top, if not all of the top, well-known retailers as customers, which speaks to the quality of your product. Can you talk about the expansion of SKUs within those retailers this quarter and expectation for the rest of the year? Thanks. Yeah, that's a great question.

Speaker Change: Just with the ability of having everything in house.

Ted Ayvas: The company just claims any duty to update any of these forward-looking statements except this required by law. All forward-looking statements attributable to the company are expertly 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.

Speaker Change: Controlling more of it.

Speaker Change: Okay. No. That's great came in and obviously you have many of the top if not all of the top cut.

Speaker Change: Well known retailers as customers.

Speaker Change: Which which speaks to the quality of your product.

Speaker Change: Can you talk about the.

Jim Kras: Having said that, I'd like to turn the call over to Jim Carratt, Chief Executive Officer of Animal Garden. Thanks, Ted. Good morning. Thank you to everyone for joining us today. We're excited to report another outstanding quarter highlighted by a 157 percent increase in gross profit. You'll buy a year-over-year growth of 61 percent in cutters and a 30 percent growth in vitamins and supplements. So shift away from your party grocers at a focus on higher margin businesses are driving our gross profit margin improvement.

Speaker Change: The expansion of Skus within those retailers.

Speaker Change: This quarter and expectation.

For the rest of the year. Thanks, Yeah. That's that's a great question and I think that's important to focus on because you know this quarter has really been a getting out of the house.

James Kras: And I think that's important to focus on because, you know, this quarter has really been a getting the house, in even better order. Once again, like I said, all you have to do is look at the GP increase to see that the impact of the investment we've made in people and in machinery and and just, you know, getting, you know, better oiled. For us, it's really moving forward, you know, this quarter is going to be, you know, you know, a good strong quarter as usual, with our existing, relationships. We have a contract with Meijer on the herbs that allows us, you know, a ringside seat to do what we need to do to get new items in.

Speaker Change: And even better order.

Speaker Change: Again like I said, all you have to do is look at the GP interest.

Speaker Change: Without the impact.

Speaker Change: The investment we've made in people and machinery and I'm, just getting a better oil.

Jim Kras: Now with approximately 95 percent of our fresh product line produced in a house, our gross margin increased to 36.7 percent in the second quarter of 2024, up from 13.1 percent in the same period last year. We've also conducted a thorough review of our business operations and made the strategic decisions to move away from less profitable segments of our business. Instead we are directing our focus and efforts on towards more profitable higher margin segments.

Speaker Change: For us it's really moving toward this quarter is gonna be you know.

Speaker Change: Good strong quarter as usual with our existing relationships, we have a contract with Meyer island, the verbs that allows us a.

James Kras: That's always an ongoing conversation that we have because we're, you know, a mile from their, a couple miles from their headquarters in Grand Rapids. So we spend a lot of time with the buyers, really focusing on innovation. There's a considerable amount of, you know, private label opportunities for all these retailers. There's been a big shift there in the marketplace, especially with inflation.

Speaker Change: A ringside seat to to to do what we need to do to get new items and that's always an ongoing conversation that we have because we're a mile from there a couple of miles from their headquarters in Grand Rapids, where we spent a lot of time with the buyers really focusing on innovation, there's considerable amount of.

Jim Kras: We believe this strategic shift, combined with the vertical integration of our operations, positions us well to achieve our goal of becoming casual positive in the near future. The second quarter, we expanded the distribution of our pulp line of sustainable USDA, USDA, organic, fermented gourmet sauces and chili-based products with the addition of UNFI distributors. As a leading North American and 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.

Speaker Change: Private label opportunities for all of these retailers that theres been a big shift there in the marketplace, especially with inflation a private label continues container.

James Kras: Private label continues, you know, can pick up steam and they're coming to us to help, you know, round out their assortment. So for us, you know, look, we've got 5,000 doors plus and growing. Wakefield, ShopRite, Meijer, Hannaford, which is Ajo Delahaye, the list goes on and on.

Speaker Change: Pick up steam and they're coming to us to help round out their assortment.

Speaker Change: So for US you know, but we've got 5000 doors.

Speaker Change: And growing our Walmart.

Speaker Change: <unk>.

Speaker Change: Wake Fund job Bryan Mayer Hanna.

Speaker Change: Hannah for which the whole delhaize the list goes on and on and so for US. It's really you know not only driving the existing business by adding on.

James Kras: So, you know, for us, it's really, you know, not only driving the existing business by adding on, you know, skews of maybe herbs that they may not carry or lettuce products that they want. But there's also, you know, this opportunity, since we are a leader in that, in that produce set, especially in sustainability and in cut herbs to leverage that, to help that inform other more shelf-stable products that give us, you know, kind of less pressure to get it out the doors quickly and allow us to get a better margin as a function of, you know, of just it being shelf-stable and we can put the time in to, you know, kind of formulate this stuff to make it, you know, acceptable on all fronts.

Jim Kras: We believe the addition of UNFI which is dedicated to promoting a better food system and leading the way and meeting consumer demands for healthier options aligns perfectly with edible garden zero waste inspired mission. Through KG distributors, UNFI distributors and e-commerce platforms retailers across the continent now have access to our bland to bold product pulp product line. Our growing roster of major retailers with pulp concludes target, whole foods, mire, mortemoyums, deerburg markets and woodmins.

Speaker Change: No skus of maybe herbs that baby may not carry or latest products that they want but there's also this opportunity since we are a leader in that and that produce that especially the sustainability and then cut herbs to to leverage that to help that inform other more shelf stable products that give us.

Speaker Change: No and kind of less pressure to get it out the door as quickly and allow us to get a better margin as a function of you know of.

Jim Kras: According to research and markets, the global sauces and condiments product categories expected to grow to 20 billion in 2028 and from 172 billion in 2021. The response to pulp product line has been overwhelmingly positive from consumers seeking to enhance their meals with its bland to bold flavor profiles, reinforcing edible gardens reputation as a flavor mark maker. We are confident that expanding the availability of our pulp lines for UNFI and KG distributors, we are accelerating pulp momentum and ensuring our unique flavors reach consumers across the United States and Canada.

Speaker Change: Just it being shelf stable and we can put the time and then to kind of formulate the stuff to make it make it acceptable on all fronts. So you know like I said, we got big trade show and ball.

James Kras: So, you know, like I said, we've got big trade show in the fall, vitamin supplements, new line coming out, which is going to be fantastic. You know, everything we do is more sustainable, more better for you. I don't know if that's, I can say it that way, but better for you, instead of more better for that for you.

Speaker Change: Vitamin supplement new lines coming out which is gonna be a fantastic you know everything we do is more sustainable more better for you I don't know if that's I can say it that way, but better for you instead of more better for that.

Speaker Change: That's where you and you know that positioning I think is continues to give us like I said, a ringside seat to be able to go in there and it always get into the fight and you know when we're coming out with a lot of wins, which is which is great. So I couldn't be more excited about where the business is it's it's been a dramatic shift I'd like to thank cost US who came on board in January and is.

James Kras: And that positioning, I think, is continues to give us, like I said, a ringside seat to be able to go in there and always get into the fight. And, you know, and we're coming out with a lot of wins, which is great. So I couldn't be more excited about where the business is. It's been a dramatic shift.

Jim Kras: We have also strengthened our distributions through our partnership with Hemingways, which serves more than 350 retailers across the Northeast region. This includes developing a new integrated rack program designed to provide Hemingways retail partners that improved the more efficient methods for displaying edible gardens 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 improve sales and overall customer satisfaction.

James Kras: I'd like to thank Costas, who came on board in January and has really helped us, you know, really operate at the high level that's expected from a finance perspective. From our retailers, when you're dealing with such large retailers, I mean, the expectation is nothing short of excellence. Otherwise, we'll just find somebody else.

Speaker Change: It really helped us.

Speaker Change: Really operate in or at the high level that is expected from a finance perspective from our retailers when you're dealing with such a large retailers I mean, the expectation is nothing short of excellence.

Speaker Change: Otherwise, we'll just find somebody else and I think that's where not only we have done it I think in the products that we grow and the new innovations that we're coming out with and some of the technology that we have that supports who we are as a brand and what we stand for but now we have team members that we brought in Mike houses that are you know are elevating how we conduct business, how we manage the relationship.

James Kras: And I think that's where not only have we done it, I think in the products that we grow and the new innovations that we're coming out with, and some of the technology that they have that supports who we are as a brand and what we stand for. But now we have team members that we've brought in like Costas that are, you know, elevating how we conduct business, how we manage the relationships, how we manage our cash. And like I said, it's been exciting. Okay, that's great color.

Jim Kras: 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 be getting carrying edible garden products. Our dedication to sustainability and community involvement align seamlessly with the principles of both these retailers, making them a natural fit for a growth Version.

Mike Houses: We man hours to our cash and like I said, it's it's it's been it's been it's been exciting.

Anthony Vendetti: Thanks. Thanks for all that color. Congrats on the progress. I'll turn it back. Thank you very much.

Speaker Change: Okay. That's great color. Thanks, Thanks for all that color congrats on the progress I'll turn it back to the queue.

Operator: Just a reminder, if there are any remaining questions, you can press star 1 on your phone. Your next question is coming from Nick Pinkers of Forestry.

Speaker Change: Yes.

Jim Kras: 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, Hudson Yard location, they also operate chess table at Brooklyn Fair, a restaurant with cutting edge, culinary expertise and creativity comes to life. We launch garden starters, potterbs and basables designed for home gardening to retailers.

Speaker Change: Thank you very much just a reminder, there oh any remaining questions you can press star one on your saying keep Pat now thank you.

Speaker Change: Next question is coming from Nick <unk> of Forest capital Nick Your line is live.

Nick Pinkers: Hey, guys, congrats on a very strong quarter, especially the improvement in margins. And as the last caller mentioned, it seems to me you've got this amazing distribution network with all these loyal retailers. And now it's really just about pushing more high margin product through that funnel. So my first question, and you touched a bit on this in your last in the last question, but if you can expand a little bit on the shift in the product, specifically to shelf stable items, and the benefits there, as well as how you kind of see that playing out in the second half of this year. Thanks, Nick.

Nick: Hey, guys congrats on a very strong quarter, especially the improvement in margins and as the last caller mentioned it seems to me you've got this amazing distribution network with all these loyal retailers and now it's really just about pushing more high margin products through that funnel. So my first question and you touched a bit on this in your last.

Jim Kras: 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 cutters and sustainably sourced produce in supermarkets, we aim to offer maximum convenience to our customers. In May, we answered a product development partnership with Herman Pickle, called Company, a leading brand in refrigerated, kosher dill pickles, gourd crowd and other fermented foods.

Speaker Change: And the last question, but if you could expand a little bit on the shifts in the product specifically to shelf stable items and the benefits there as well as how you kind of see that playing out in the second half of this year.

James Kras: Yeah, look, you know, just to kind of reinforce what I had to say to Anthony. It's really, it's really a function of putting the right products and the right pricing at the right margin into the funnel, as you would say, or this distribution platform. And one of the crown jewels of Edible Garden has always been our relationships as a company. You know, many people say, well, Jim, you've been dealing with these guys for the last couple decades. And it's not, it's, it's, you know, it's really comes down to the end.

Speaker Change: Thanks, Nick Yeah look you know just to kind of reinforce what I have to say to Anthony.

Jim Kras: Nationwide for their presence in delis and on family dinner tables, this collaboration will continue. We 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 Herman Pickle's team, leveraging their esteemed legacy to create a contemporary line of fermented products. In addition, we have implemented several new proprietary innovations focused 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.

Speaker Change: It's really it's a really a function of putting the right products and the right pricing at the right margin into the funnel as you would say or this distribution platform and one of the one of the Crown jewels of our local garden has always been our relationships are as a company.

Speaker Change: No no.

Speaker Change: People say well, Jim you've been dealing with these guys for the last couple of decades, and it's not it's it's you know.

Speaker Change: It's really comes down to the and I'm, not just saying that the team and our ability to execute when you look at our fill rates I mean, when we're running mid to high 90 days, which as you know, which is which is which is exceptional when you consider where handling gloves goods. So that makes us a trusted partner and if our trucks are running in and they're running into the stores you know that and you all may only.

James Kras: And I'm not just saying this, the team and our ability to execute, you know, when you look at our fill rates, I mean, when we're running mid to high 90s, which is, you know, which is, which is, which is exceptional when you consider we're handling live goods. Now that makes us a trusted partner. And if our trucks are running in, and they're running into the stores, you know that, you know, I'll name them again, you know, Walmart, and, you know, Meijer, and, you know, Hannaford, and ShopRite.

Again, you know Walmart and and.

Jim Kras: 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. Along with our zero waste-inspired mission, these innovations allow retailers to showcase plants after peak, minimizing waste and providing superior products to our customers.

Speaker Change: Meyer and Hannaford and stop right in and these are these are these are you know we're covered off on 60% to 70% of the total population in the U S and we're going into these stores three to four times, a week with our trucks where their trucks.

James Kras: And these are, these are, you know, we're covering off 60 to 70% of the total population in the US, and we go into these stores three to four times a week with our trucks or their trucks.

James Kras: It's just a matter of having the right offerings, once again, that we know that we can sell and work with the retailers to promote. We've got some exceptional team members that come from these retailers, Dave Ross, who heads up our sales department. I mean, you know, a smart guy who worked at, you know, Wakefern and, and, and Church and Dwight, and he understands what these retailers want at a buying level and what it takes to execute, especially in the store, to not only, you know, have, you know, communicate that you're an innovative product, but also know what you have to do in order to not only get the product in, but to sell it.

It's just a matter of having the right offerings once again that our that we know that we can sell work with the retailers to promote we've got some exceptional team members that come from these retailers, Dave Ross, who heads up our sales Department I mean, you know a smart guy who work at wait for an end cap.

Jim Kras: In July, we launched a comprehensive training program with the abilities of Northwest New Jersey, a nonprofit providing employment and day services for individuals with disabilities.

Jim Kras: Our decade-long partnership with the 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 who empowers these individuals. Our training programs offer valuable skills and professional development opportunities, enhancing these workings, employability and career prospects while enriching our workforce with diverse talents.

Speaker Change: Do I and he understands what.

Speaker Change: What these retailers want out of buying level on what it takes to execute especially in the store to continue to not only you know have to communicate that you're an innovative product, but they also know what you have to do in order to not only get the product in but the shot that they sell it sell it.

James Kras: And, and, you know, and that's not only from a marketing, advertising push perspective, but from a promotional and trade marketing standpoint. So, you know, we've got, we've got big shows coming up with new product lines and we're coming out with all guns ablaze. And I couldn't be, you know, like I said, more excited. We have a great relationship with Nutracom, who's our, you know, vitamin supplement co-man.

Speaker Change: Throw in you know and that's not only from a marketing advertising push perspective, but from a promotional and trade marketing standpoint. So we've got we've got big shows coming up with new product lines, and we're coming out with all guns blazing.

Jim Kras: 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.

Speaker Change: Wouldn't be you know like I said more excited where we have a great relationship with neutral com.

Kostas Dafoulas: I would like to turn the call over to Clostis DeFoulos, our interim chief financial officer who will review the financial results for the three months and a June 30th 2024. Clostis? Thanks, Jim. Good morning, everyone. Turn to our second quarter results. Total revenue for the second quarter was 4.2 million, relatively flat compared to Q2 2023. The slight increase in revenue was driven by a core product portfolio, primarily cut herbs and our vitamin supplement business.

Who's our vitamin supplement co man.

James Kras: You know, they've just become more and more of a trusted partner to help us push out the next generation of products. And I think people will be very excited about what they're going to see in the first week of September at ECRM. We've got major meetings set up there. We've already got some commitments on the new line for 2025, which is pretty much unheard of.

Speaker Change: Just become more and more of a trusted partner to help us push out on the next generation of products and I think people would be very excited about what they're going to see in the first week of September I E. CRM. We've got major meeting set up there we've already got some commitments on the new line for 2025, which is pretty much unheard of it once again speaks to our.

James Kras: So once again, speaks to our relationships, the team's wherewithal that, you know, these retailers would, you know, would commit to, you know, so early on to some of this stuff really kind of sight unseen. And then, and then, you know, all of this really comes down to, you know, higher ring products, products that help us leverage those $5,000 at a higher margin that should not only help the top line of the business and continue to grow it hopefully at an even more accelerated rate as a function of what we charge for these items, but also the bottom line since the margin is going to be a lot more intact since these are self-stable products versus some of the pressures we get from fresh goods. I hope that helps, Nick. Oh, it definitely does.

Speaker Change: Our relationships are the teams wherewithal that you know the retailers wood wood.

Kostas Dafoulas: Our strategic shift away from lower margin products offset the revenue increase in our core products, from the floral segment. Also good sold decreased by 37% to 2.7 million for the three-month ended June 30, 2024, compared to 3.7 million for the 2023 comparable quarter. The decrease was largely driven by the company's strategic shift away from our largest third-party growers. As Jim stated earlier, in the second quarter of 2024, the company's gross profit increased by 157% as compared to the 2023 comparable period.

Speaker Change: Cliff.

Speaker Change: Early on to some of this stuff really kind of sight unseen and then and then you know.

Speaker Change: All of this really comes down to you know higher risk products.

Speaker Change: Products that help us leverage those 5000 doors at a higher margin that should not only help the topline of the business and continue to go out and fully out of it at an even more accelerated rate as a function of what we charged for these items, but also the bottom line since the margin is going to be.

Speaker Change: A lot more intact. Since these these herself shelf stable products versus some of the some of the pressures we get from from fresh goods.

Kostas Dafoulas: In addition, gross margin increased to a record 34.4%. In the second quarter of 2024, compared to 13.1% for the same period last year. Both these impressive results were driven by the shift away from our dependence on third-party growers. Solving general and administrative expenses told 2.7 million for the three-month ended June 30, 2024, compared to 2.4 million for the three-month ended June 30, 2023. The increase was primarily driven by higher audit, accounting, and legal fees related to our capital raising activities in the quarter in a one-time expense of $100,000.

Speaker Change: I hope that helps Nick.

Nick Pinkers: And kind of to put it another way, it seems like it's the relationships and the trust that you've built with the big retailers that the street really hasn't woken up to yet, but hopefully they will as you start pushing more products through these retailers and through this channel. So good luck with that. The second part of my question, you also touched on this a little bit, but if you could expand on it a little bit more, as you head into the peak season around Thanksgiving and the holidays, is there room for more vertical integration and gross margin improvement going forward in 2025?

Nick: Oh It definitely has definitely does intended to put it another way it seems like it's the relationships and the trust that you've built with the big retailers that the street really hasn't woken up to yet, but hopefully they will as you start pushing more products through these through these retailers is really this channel. So good luck with that.

Speaker Change: Second part of my question you also touched on this a little bit, but if you could expand on it a little bit more as you head into the peak season around Thanksgiving and the holidays is there.

Speaker Change: There are room for more vertical integration and gross margin improvement going forward in 2025, what are your thoughts on that.

Nick Pinkers: What are your thoughts on that? Um, you know, look, it's it's game time for us as a company come Q4. I mean, that's to us, we've always said that the Super Bowl of herbs and lettuces, especially herbs, just, you know, a function of people cooking, you know, around the holidays. Look, we've the trending data, and all points to people because of inflation, because of creativity, because of nutritional value, people wanting fresher goods, people are cooking more and more at home.

Speaker Change: You know look it's it's game time for us as a company from Q4, I mean, that's to US we've always stood up the Super Bowl of herbs, and lettuce is especially herbs Justin.

Kostas Dafoulas: Net loss was $1.1 cents per share for the three-month ended June 30, 2024 compared to net loss of $4.83 per share for the three-month ended June 30, 2023. While the loss from operations improved year-over-year by 645,000 from the loss of 1.83 million in Q2 of 2023 to 1.18 million in Q2 of 2024, higher interest expense and a one-time loss on the extinguishment of debt in Q2 of 2024, along with a $1.2 million credit in Q2 of 2023, related to the employee retention credit, let's say an increase in our net loss this year.

Speaker Change: A function of people cooking you know around the holidays look we the trending data all points to people because of inflation because of creativity because of nutritional value people wanting pressure goods.

Speaker Change: People are cooking more and more at home and that's only continued for you know and there's always seems to be a reason whether like I said, it's inflation or you know or because people just want.

Nick Pinkers: And that's only continued for, you know, there always seems to be a reason, whether, like I said, it's inflation, or, you know, or people just want, you know, more nutritious products. Some people just, it comes down to, you know, spending money out at, you know, at the restaurant.

Speaker Change: More nutritious product and some people just they just it comes down to you know spending money Oh at AR at the at the restaurant and in that all of you know that all equates to people like I said cooking.

Kostas Dafoulas: In closing, we've been working hard to improve our margins and we are pleased with the way our team executed this quarter. A result in Q2 show that the strategic shift we made in our product mix and reliance on third-party growers is starting to deliver results we remain committed to a disciplined financial approach.

James Kras: And in that all, you know, that all equates to people, like I said, cooking, you know, more at home, and, you know, herbs have continued to gain such a great prominence, since they really are a flavor maker, and they allow you to, you know, add flavor and some nutrition to your products. And so that's always been the case in the holiday. We, we crushed it last Thanksgiving, I would expect nothing less this Thanksgiving.

Speaker Change: More at home and herbs.

Speaker Change: To gain such a great prominence since they really are a flavor maker and they allow you to add flavor and some nutrition to your products and so that's always been the case in the holiday.

Unknown Attendee: With that operator, please open the line for questions. Thank you very much. We will now be conducting our question and answer session. If you would like to ask a question, please press star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the key. You may press star 2 if you would like to remove your question from the key. For any participants using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please wait a moment whilst we pull for questions. Thank you.

Speaker Change: We we crushed it last Thanksgiving I I would expect nothing less this Thanksgiving you know that business for US continues to grow we continue to be an expert in AR and the holiday season with the items in the displays and the thing that we do that that our consumer.

James Kras: You know, that business for us continues to grow. We continue to be an expert in the holiday season with the items and the displays and the things that we do that are consumer-facing that help drive turn and volumes. I mean, there's no shortage of demand for people buying herbs from, you know, the beginning of November through the second, you know, the first week in January.

Speaker Change: I think that helped drive turns and volumes I mean, there's no short of the shortage of demand people buying herbs.

Speaker Change: From the beginning of November through the second the first weekend in January.

Anthony Vendetti: Your first question is coming from Anthony Vendetti of the Maxone Group. Anthony, your line is live. Thank you. So Jim, it's great to see that we're moving more towards the high-profitable items and vitamins and supplements grew this quarter. Can you talk about the outlook for that product line for the rest of this year and then also We just talked to us about contract growers. I know you've been trying to reduce that to improve gross margin. How did that do this quarter? And then expectations for that for the rest of the year as well. Thank you, Anthony.

Speaker Change: So for US the margin will you will continue to improve we were bringing in actually I brought in a and outside.

James Kras: So for us, the margin will, you know, will continue to improve. We're bringing in, actually, I brought in an outside consultant who is dedicated. She's got a cargill to help us improve our efficiency on our lines.

Consultant, who is a dedicated she she's got a cargill to help us improve our efficiency.

James Kras: We're putting in another production line out in Heartland, Michigan, so that we can, we can increase even more volume. So, you know, for us, you know, it's game on. I expect the margins to continue to improve on that core business. I expect the, you know, the herbs to continue to grow, not only for a cut, but also living and everything around the displays for the holidays.

Speaker Change: On our lines, we're putting in another production line Oh in Heartland.

Speaker Change: Michigan, So that we can increase even more volume.

Speaker Change: So you know for us.

Speaker Change: I'm on I expect the margin to continue to improve on that core business I expect the you know the.

Speaker Change: Herbs goods continue to grow not only for cost, but also living and everything around the displays for the holidays, we've got meetings coming up with a major retailer as you know in the next couple of weeks talk even more about incremental opportunities during the holidays and like I said, we've got some of these other products.

James Kras: You know, we've got meetings coming up with major retailers in the next couple of weeks to talk even more about incremental opportunities during the holidays. And, you know, and like I said, we've got some of these other products, the vitamin supplement business, you know, we're just starting to really put the effort towards that now that we've got the core business in a place where we can really start to drive it. And now we can really focus on innovation and scale the vitamin supplement business. And that's, you know, that Q4 load in for us for the New Year's resolution sale season in January has always been an issue.

Jim Kras: We're extremely pleased with the quarter, with the reflection of the numbers. We are continuing to expand the absorbent of our products, products that we have the diversity that we need and the flexibility. Obviously, we are a C.E.A, company that uses the green houses in the form, everything we do, and we'll be more to finish. Good I.E., the farm's formula approach to the vitamins and supplements. The entry to the question, vitamin supplements, we have a big trade show coming up in September.

Speaker Change: And supplement business you know, we're just starting to really put the effort towards that now that we've got.

Speaker Change: The core business and a place that we can really start to drive it and now we can really focus on innovation and scale. The vitamin supplement business. I mean, that's you know that Q4 load in for us.

Speaker Change: For a new year's resolution sale season in January as always bid in and this year, we're gonna be pushing that as well and we'll have some new lines I know how much of the new lines will get into Q4.

James Kras: We're going to be pushing that as well. And we'll have some new lines. I know how much of the new lines we'll get in Q4, but we'll get some in.

James Kras: We've got some commitment. So, for us, once again, I think there's a huge opportunity here to continue to do better than year before as a function of not only opportunities because of our relationships, you know, and people wanting and trusting us to do more, but the expanding the product, the product lines to pick up and more of that consumer that's in there that's looking for either, you know, sustainable sauces that are organic, that are very unique and play in a white space and produce, you know, that right on our truck that's already going in there with the herbs, i.e.

Jim Kras: We'll be introducing a new line. In addition to the existing vitamin way line that we have, there'll be some new term announcements as far as expanding our sales efforts in the e-commerce realm and the H-shortly. So that'll allow us to expand our reach. That's going to really be driven by a combination of not only new products, but our positioning and relationship with the 5,000 stores that we have, which allow us to have some opportunity to drive that business in and expand it.

Speaker Change: But we will get some in we've got some commitment so.

So once again I think that there's a huge opportunity here to continue to.

Do better than year before.

Speaker Change: As a function of not only opportunities because of our relationships.

Speaker Change: You know when people wanting and trusting us to do more but they're expanding the product the product lines to pick up and more of that consumer that's in there. That's looking for either you know sustainable sources that are organic that are very unique and playing a white space and produce you know that that right on our truck that's already going in there with Europe's I.

Jim Kras: Obviously, the ring for vitamin supplements is much higher than a plant would say. So for us, we see that not only allowing us to drive a business at a good healthy margin, but also drive that top line significantly as we have been able to really dig in and get the C-E-A part of the business, the greenhouses with Michigan fully online now and scrolling 95% of our fresh goods really allows us to kind of check the box.

James Kras: pulp, or some of these other new products that we'll be announcing shortly, you know, as it relates to other sort of quote unquote sort of condiments. And, you know, that's something I didn't mention, which was our development of the fresh condiment category, which is our is incredibly unique for us as a company and unique for, you know, for, you know, for the industry, I mean, for years, people have been kind of buying the same old tired, you know, condiments, ketchups and mustards and, and whatnot.

Speaker Change: E pulp or some of these other new.

Speaker Change: Your proxy will be announcing shortly.

Speaker Change: As it relates to other sort of quote unquote sort of condiments and you know that's something I didn't mention which is our development of distress condiment category.

James Kras: And now, you know, being able to come out with a better product that's fresher, tastes better, is better for you, doesn't have all the kind of negative preservatives that we don't like is where we're pushing. And, you know, and I think because of the relationship that we have, you're going to see some pretty, some pretty great strides there. Pulp has been a bright spot all year long, with teams pushing to, you know, continue to gain on that. I mean, just look at the list from Target, Whole Foods, and Meyer just in the last, you know, year.

Speaker Change: Which is our is incredibly unique for us as a company and unique for.

You know for our for the industry I mean for years people have been kind of buying the same old tired, you know condiments, ketchup and mustard and whatnot and now being able to come out with a better product fresher taste better better for you. It doesn't have all the kind of negative preservatives.

Jim Kras: Shortly here, once that business is cashful positive, that segment, and really start to drive the vitamins and supplements, we've got a line of functional pickles, which will be kind of one of the totally new item out into the marketplace. That's something that we're currently working on, and I think that launch will happen at the big produce show this fall. And we have some other products that have already gotten acceptance into our retailers that will be launching in 2025, not only in the vitamin supplement part of the business, but also in the more shelf stable fresh segment.

Speaker Change: To us is where we're pushing and you know what I think because of the relationship that we have you're going to see some pretty some pretty great strides there pulp has been a bright spot all year long.

James Kras: And, you know, I think the industry is going to look at us and say, you know, not only do you have great distribution, but you've got great products and, and you guys are more than just a company that grows, you know, leafy greens. And so, to me, it's that, you know, being that next generation provider of better for you products that are rooted in you know, excuse the pun, rooted in the fact that we actually grow a lot of these items or, you know, or they end up in the product, I think is going to be for us a huge differentiator. And I'm pretty excited about it, Frank. No, that's that's awesome.

Speaker Change: Team is pushing to you know to continue to gain that and you just look at the list from target the whole foods to Meyer just in the last you know year end.

Speaker Change: I think the industry is starting to look at US and say you know not only do you have great distribution, but <unk> got great products and you guys are more than just a company that grows you know leafy Greens and so to me it's that being that next generation provider of better for you products that are rooted in.

Speaker Change: Skus upon rooted in the fact that we actually grow a lot of these items or you know where they ended up in the product I think is going to be for us a huge differentiator and I'm pretty excited about it frankly.

Jim Kras: So I couldn't be more bullish on the business right now. It's all starting to come together, and we're really starting to kind of hit our marks. So we'll continue on the vertical integration piece to answer your second question as it relates to continuing to making an investment in efficiency, shifting away from bringing products from the outside, specifically a lot of the fresh goods. It helps in so many different ways. Yeah, there's the margin expansion that it drives, but it's also just quality consistency.

Nick Pinkers: And we really appreciate you know, your hard work and the entire team. It seems like we're making tremendous progress and very excited to get updates on in future quarters. Good luck. I'm going to thank you, Nick. Thank you very much. I will now hand back over to the management team for questions. Thank you for joining us today. Impressive performance in the second quarter and the first half of 2024 is a testament to the dedication and years of effort from the entire Edible Garden team.

Speaker Change: No. That's that's awesome and we really appreciate your hard work and the entire team. It seems like we're making tremendous progress and are very excited to get updates on in future quarters. Good luck.

Nick: Thank you Nick.

Nick: Hi, Keith very much while we appear to have reached the end of our question and answer session I will now hand, it back over to the management team for closing remarks.

Nick: Yeah.

Jim Kras: Cuts down on shrink, we control what now is a very tight supply chain, especially to the likes of Meyer and Wakeford Chopright and Walmart, where we're so close to their distribution centers with our own facility that it's very smooth and we have a lot of control over it, and we have been able to continue to cut down our transportation costs by using backhauls with both retailers that have good at our facilities, which really helps us not only with the environment and taking trucks off the roads, but also by ride-sharing, but but also just by proficiency since everything kind of runs at clockwork. So really, really excited, taking us a little bit of time to get rid of the last three months, we've really improved the operations by a huge jump with the ability of having everything in-house and controlling more of it. I know that's great, Jim. Obviously, you have many of the top, it's not all of the top well-known retailers as customers, which speaks to the quality of your product.

Speaker Change: Thank you for joining us today are impressive performance in the second quarter and the first half of 'twenty 'twenty four is a testament to the dedication of in years of effort from the entire edible garden team. We have consistently delivered high fill rates and built a strong reputation in the industry as a trusted dependable.

Nick Pinkers: We have consistently delivered high fill rates and built a strong reputation in the industry as a trusted, dependable supplier. Our results also highlight the significant benefits that vertical integration has added to operations. We're optimistic about what lies ahead and believe the future is extremely promising.

Speaker Change: Suppliers are results also highlight the significant benefits of vertical integration was added to operations. We're optimistic about what lies ahead and believe the future is extremely promising thank you again and.

James Kras: Thank you again. Thank you for being on the call. Thank you very much, this does conclude today's event. You may disconnect your phone lines at this time. Thank you for your attention.

Speaker Change: Thank you for being on the call.

Speaker Change: Thank you very much. This does conclude today's conference call. You may disconnect. Your phone lines at this time and have a wonderful day. Thank you Felix anticipation.

Speaker Change: Okay.

Jim Kras: Can you talk about the expansion of skews within those retailers, this quarter and expectation for the rest of the year? Thanks. Yeah, that's a great question. And I think that's important to focus on because you know, this quarter has really been a getting the house in even better order. What's again, like I said, all you have to do is look at the GP increase to see that the impact of the investment we've made in people and in machinery and just, you know, getting, you know, better oil.

Jim Kras: For us, it's really moving toward there. This quarter is going to be, you know, a good strong quarter is usual with our existing, you know, relationships. If we have a contract with Meyer on the herbs that allows us, you know, a ringside seat to do what we need to do to get new items in. And that's always an ongoing conversation that we have because we're, you know, a mile from there, a couple of miles from their headquarters in Grand Rapids.

Jim Kras: So we spent a lot of time with the buyers, you know, really focusing on innovation. There's a considerable amount of, you know, private label opportunities for all these retailers, since there's been a big shift there in the marketplace, especially with inflation. Private label continues to contain, you know, can pick up steam and they're coming to us to help, you know, round out their assortment. So for us, you know, look, we've got 5,000 doors plus and growing Walmart.

Jim Kras: Wait for a shop right, Meyer, Hannover, which I will tell you, hey, let's go on and on. So for us, it's really, you know, not only driving the existing business by adding on, you know, excuse of maybe herbs that they may not carry or lettuce products that they want, but there's also, you know, this opportunity since we are a leader in that in that produce set, especially sustainability and cut herbs to leverage that.

Jim Kras: To help that inform other more shelf stable products that give us, you know, kind of less pressure to get it out the doors quickly and allow us to get a better margin as a function of, you know, just. It being shelf stable and we can put the time in to, you know, kind of formulate the stuff to make it make it, you know, acceptable on all fronts. So, you know, like I said, we got big trade showing fall, vitamin supplements, new line coming out, which is going to be fantastic.

Jim Kras: You know, everything we do is more sustainable, more better for you. I don't know if that's, I can say it that way, but better for you. You said a more better for you and that positioning, I think, is continues to give us, like I said, a ringside seat to be able to go in there and always get into the fighting. And we're coming out with a lot of wins, which is, which is great.

Jim Kras: So I couldn't be more excited about what the business is. It's been a dramatic shift. I'd like to think costus who came on board in January and has really helped us, you know, really operate at the high level that's expected from a finance perspective from our retailers when you're dealing with such large retailers. I mean, the expectation is nothing short of excellence. Otherwise, we'll just find somebody else and I think that's where not only have we done it, I think, the products that we grow and the new innovations that we're coming out with.

Jim Kras: And some of the technology that we have that supports who we are as a brand and what we stand for, but now we have team members that we brought in like costus that are, you know, elevating how we conduct business, how we manage the relationships, how we manage our cash and, like I said, it's been exciting.

Unknown Attendee: Okay, that's great color. Thanks. Thanks for all that color. Congrats on the progress. I'll turn it back to the queue. Thanks. Thank you very much. Just a reminder there are any remaining questions. You can press star one on your phone. Keep had now. Thank you.

Nick Pinkers: Your next question is coming from Nick Pinkers of Forest Capital. Nick, your line is live. Hey guys, congrats on a very strong core, especially the improvement in margins. And as the last color mentioned, it seems to me you've got this amazing distribution network with all these loyal retailers. And now it's really just about pushing more by margin product through that funnel. So my first question, and you touched a bit on this in your last in the last question.

Nick Pinkers: But if you can expand a little bit on the shift in the product specifically to shelf stable items and the benefits there, as well as how you kind of see that playing out in the second half of this year. Thanks, Nick. Yeah, look, you know, just to kind of reinforce what I had to say to Anthony, it's really, it's a really a function of putting the right products and the right pricing at the right margin into the funnel, as you would say, or this distribution platform.

Nick Pinkers: One of the, one of the crown jewels of Edible Garden has always been our relationships as a company. You know, many people say, well, Jim, you've been dealing with these guys for the last couple of decades and it's not, it's, you know, it's really comes down to the, and I'm not just saying the same, the team and our ability to execute, you know, when you look at our fill rates. When we're running in mid to high 90s, which is, you know, which is, which is, which is exceptional when you consider we're handling live goods.

Nick Pinkers: You know, that makes us a trusted partner, and if our trucks are running in and they're running into the stores, you know, that, you know, I'll name them again, you know, Wal-Martin and, you know, Maya and, you know, Hannover and Shopify. And these are, these are, these are, you know, we're coming off on 60 to 70% of the total population in the US, and we're going into these stores three to four times a week with our trucks with their trucks.

Nick Pinkers: It's just a matter of having the right offer that's once again that, that, that, you know, we know that we can sell work with the retailers to promote. We've got some exceptional team numbers that come from these retailers, Dave Ross, who heads up our sales department. I mean, you know, a smart guy who, you know, work at, you know, Wakefurn and kitchen Dwight, and he understands what these retailers want at a buying level, what it takes to execute, especially in the store.

Nick Pinkers: To, you know, to not only, you know, have, you know, come to communicate that you're an innovative product, but also know what you have to do in order to not only get the product in, but to sell it, sell it through. And, you know, that's not only from a marketing advertising push perspective, but from a promotional and trade marketing standpoint. So, you know, we've got, we've got big shows coming up with new product lines, and we're coming out with all done the blaze.

Nick Pinkers: And I couldn't be, you know, like I said, more excited. We have a great relationship with Nutricom, who's our, you know, vitamin supplement, Coman, you know, they've just become more and more of a trusted partner to help us push out the next generation of products. And I think people will be very excited about what they're going to see in the first week of September at ECRM. We've got major meeting set up there.

Nick Pinkers: We've already got some commitments on the new lines for 2025, which is pretty much unheard of. So, once again, speaks to our relationships, the teams, wherewithal that, you know, retailers would, you know, would, you know, commit to, you know, sorely onto some of this stuff. Really kind of sight on scene. And then, and then, you know, all of this really comes down to, you know, higher ring products, products that help us leverage those 5,000 doors at a higher margin, that should not only help the top line of the business and continue to grow.

Nick Pinkers: Hopefully at an even more accelerated rate is a function of what we charge for these items, but also the bottom line since the margin is going to be a lot more intact. These are self stable products versus some of the, some of the pressures we get from fresh goods. I hope that helps Nick. Oh, it definitely does and kind of put it in other way. It seems like it's the relationships and the trust that you've built with the big retailers that the street really hasn't woken up to yet, but hopefully they will, as you start pushing more products through these retailers and through this channel.

Nick Pinkers: So good luck with that. The second part of my question, you also touched on this a little bit, but if you'd expand on it a little bit more, as you head into the peak season around Thanksgiving and the holidays, is there room for more vertical integration and gross margin improvement going forward in 2025? What are your thoughts on that?

Jim Kras: Look, it's game time for us as a company, Q4. I mean, that's to us, we've always said that's the Super Bowl of herbs and let us just, especially herbs, just a function of people cooking around the holidays. Look, the trending data and all points to people because of inflation, because of creativity, because of nutritional value, people wanting fresher goods, people are cooking more and more at home, and that's only continued for you know, and there's always things to be, you know, reason, whether like I said, a inflation or, you know, or people just want, you know, more nutritious product.

Jim Kras: Some people just come about spending money at the restaurant, and that all equates to people, like I said, cooking more at home and herbs have continued to gain such a great prominence since they really are a flavor maker, and they allow you to add flavor and some nutrition to your products, and so that's always been the case in the holiday. We crushed it last Thanksgiving, I would expect nothing less this Thanksgiving.

Jim Kras: You know, that business for us continues to grow. We continue to be an expert in the holiday season with the items and the displays and the things that we do that are consumer facing that help drive turns and volumes. I mean, there's no shortage of demand of people buying herbs from, you know, beginning of November through the second, you know, the first week in January. So for us, the margin will, you know, will continue to improve.

Jim Kras: We were bringing in actually brought in a, an outside consultant who is dedicated, she's got a cargill to help us improve our efficiency on our lines. We're putting in another production line in Hartland, Michigan, so that we can increase even more volume. So, you know, for us, you know, it's game on. I expect the margins to continue to improve on that core business. I expect the, you know, the herbs to continue to grow not only for a cut, but also living and everything around this place for the holidays.

Jim Kras: You know, we've got meetings coming up with major retailers, you know, in the next couple weeks to talk even more about incremental opportunities during the holidays. And, you know, like I said, we've got some of these other products. The vitamin supplement business, you know, we're just starting to really put the effort towards that now that we've got the core business in a place that we can really start to drive it. And now we can really focus on innovation and scale the vitamin supplement business.

Jim Kras: And that's, you know, that Q4 load in for us for New Year's resolution sales even in January is always big. And this year we're going to be pushing that as well. And we'll have some new lines. I know how much of the new lines will get in Q4, but we'll get some in. We've got some commitment. So, for us, once again, I think there's a huge opportunity here to continue to do better than year before as a function of not only opportunities because of our relationships, you know, and people wanting and trusting us to do more, but the expanding the product, the product lines to pick up and more of that consumer that's in there that's looking for either, you know, sustainable sauces that are organic that are very unique and playing a white space and produce, you know, that right on our truck that's already going in there with the ERVs, i.e, pulp, or some of these other new, your process will be amounting shortly, you know, if it relates to other sort of quote unquote sort of condiments.

Jim Kras: And you know, that's something I didn't mention, which is our development of this fresh condiment category, which is, is incredibly unique for us as a company and unique for, you know, for, you know, for the industry. I mean, for years, people have been kind of buying the same old, tired, you know, condiments, catch ups and nusters and whatnot. And now, you know, being able to come out with a better product, it's fresher, tastes better, better for you, doesn't have all the kind of negative preservatives to us as we're pushing.

Jim Kras: And, you know, and I think because of the relationship that we have, you're going to see some pretty, some pretty great stride, their pulp has been a bright spot all year long. The team is pushing to, you know, to continue to gain that. I mean, just look at the list from Target, the whole foods to Meyer just in the last, you know, year. And, you know, I think the industry is going to look at us and say, you know, not only do you have great distribution, but you've got great products.

Jim Kras: And, and you guys are more than just a company, a coalition of leafy grains. And so, to me, it's that, you know, being that next generation provider of better for you products that are, you know, rooted in, you know, excuse the pun rooted in the fact that we, we actually grow a lot of these items, or, you know, who they end up in the product, I think is going to be for us a huge differentiator. And, and I'm pretty excited about it.

Nick Pinkers: Franklin. That's awesome and we really appreciate your hard work and the entire team. It seems like we're making tremendous progress and very excited to get updates on future quarters. Good luck. Thank you, Nick. Thank you very much.

Jim Kras: Well, we appear to have reached the end of our question and answer session. I want our hand back over to the management team for closing remarks. Thank you for joining us today. Pressive performance in the second quarter in the first half of 2024 is a testament to the dedication and years of effort from the entire Edible Garden team. We have consistently delivered high flow rates and built a strong reputation in the industry as a trusted dependable supplier.

Jim Kras: Our results also highlight the significant benefits in vertical integration as editor operations. We are optimistic about what lies ahead and believe the future is extremely promising. Thank you again and thank you for being on the call. Thank you very much.

Unknown Attendee: This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your