Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 06, 2024 | |
Document Information Line Items | ||
Entity Registrant Name | EDIBLE GARDEN AG INCORPORATED | |
Entity Central Index Key | 0001809750 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2024 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Entity Ex Transition Period | true | |
Entity Common Stock Shares Outstanding | 549,392 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-41371 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 85-0558704 | |
Entity Address Address Line 1 | 283 County Road 519 | |
Entity Address City Or Town | Belvidere | |
Entity Address State Or Province | NJ | |
Entity Address Postal Zip Code | 07823 | |
Entity Interactive Data Current | Yes | |
City Area Code | 908 | |
Local Phone Number | 750-3953 | |
Common Stocks | ||
Document Information Line Items | ||
Security 12b Title | Common Stock, par value $0.0001 per share | |
Trading Symbol | EDBL | |
Security Exchange Name | NASDAQ | |
Warrant | ||
Document Information Line Items | ||
Security 12b Title | Warrants to purchase Common Stock | |
Trading Symbol | EDBLW | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash | $ 388 | $ 510 |
Accounts receivable, net | 1,139 | 1,249 |
Inventory | 814 | 678 |
Prepaid expenses and other current assets | 276 | 210 |
Total current assets | 2,617 | 2,647 |
Property, equipment and leasehold improvements, net | 3,646 | 3,893 |
Intangible assets, net | 46 | 47 |
Other assets | 38 | 69 |
TOTAL ASSETS | 6,347 | 6,656 |
Current liabilities: | ||
Accounts payable and other accrued expenses | 5,145 | 2,517 |
Short-term debt, net of discounts | 4,438 | 387 |
Total current liabilities | 9,583 | 2,904 |
Long-term liabilities: | ||
Long-term debt, net of discounts | 852 | 4,040 |
Total long-term liabilities | 852 | 4,040 |
Total Liabilities | 10,435 | 6,944 |
STOCKHOLDERS' DEFICIT: | ||
Common stock ($0.0001 par value, 100,000,000 shares authorized, 307,820 and 285,283 shares outstanding as of March 31, 2024 and December 31, 2023, respectively (1)) | 1 | 1 |
Series A Convertible Preferred stock ($0.0001 par value, 10,000,000 shares authorized; nil shares outstanding as of March 31, 2024 and December 31, 2023) | 0 | 0 |
Additional paid-in capital | 30,148 | 29,971 |
Accumulated deficit | (34,237) | (30,260) |
Total Stockholders' Deficit | (4,088) | (288) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 6,347 | $ 6,656 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Common stock, shares par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 307,820 | 285,282 |
Series A Convertible Preferred Stocks [Member] | ||
Preffered Stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||
Revenue | $ 3,132 | $ 2,455 |
Cost of goods sold | 3,109 | 2,479 |
Gross profit (loss) | 23 | (24) |
Selling, general and administrative expenses | 3,884 | 2,691 |
Loss from operations | (3,861) | (2,715) |
Other income / (expense) | ||
Interest expense, net | (117) | (234) |
Gain from extinguishment of debt | 0 | (70) |
Other income / (loss) | 1 | 0 |
Total other expense | (116) | (164) |
NET LOSS | $ (3,977) | $ (2,879) |
Net Income / (Loss) per common share - basic and diluted (1) | $ (13.65) | $ (44.19) |
Weighted-Average Number of Common Shares Outstanding - Basic and Diluted (1) | 291,372 | 65,147 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Common Stock | Preferred Stock Series A | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2022 | 18,136 | ||||
Balance, amount at Dec. 31, 2022 | $ (2,180) | $ 1 | $ 0 | $ 17,891 | $ (20,072) |
Issuance of common stock and warrants in public offering, net of expenses, shares | 80,950 | ||||
Issuance of common stock and warrants in public offering, net of expenses, amount | 9,258 | $ 0 | 0 | 9,258 | 0 |
Issuance of common stock for Directors' fees, shares | 279 | ||||
Issuance of common stock for Directors' fees, amount | 70 | $ 0 | 0 | 70 | 0 |
Issuance of common stock to employees and consultants, shares | 117 | ||||
Issuance of common stock to employees and consultants, amount | 30 | $ 0 | 0 | 30 | 0 |
Series A Preferred dividend | (4) | 0 | 0 | (4) | 0 |
Net Income (Loss) | (2,879) | $ 0 | 0 | 0 | (2,879) |
Balance, shares at Mar. 31, 2023 | 99,482 | ||||
Balance, amount at Mar. 31, 2023 | 4,295 | $ 1 | 0 | 27,245 | (22,951) |
Balance, shares at Dec. 31, 2023 | 285,282 | ||||
Balance, amount at Dec. 31, 2023 | (288) | $ 1 | 0 | 29,971 | (30,260) |
Issuance of common stock to employees and consultants, shares | 6,000 | ||||
Issuance of common stock to employees and consultants, amount | 38 | $ 0 | 0 | 38 | 0 |
Net Income (Loss) | (3,977) | $ 0 | 0 | 0 | (3,977) |
Sale of common stock pursuant to Equity Distribution Agreement, shares | 16,538 | ||||
Sale of common stock pursuant to Equity Distribution Agreement, amount | 139 | $ 0 | 0 | 139 | 0 |
Balance, shares at Mar. 31, 2024 | 307,820 | ||||
Balance, amount at Mar. 31, 2024 | $ (4,088) | $ 1 | $ 0 | $ 30,148 | $ (34,237) |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Income (Loss) | $ (3,977) | $ (2,879) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Bad debt expense | 9 | 0 |
Depreciation and amortization | 302 | 334 |
Amortization of operating lease right of use asset | 26 | 22 |
Amortization of debt discount | 7 | 0 |
Gain from extinguishment of debt | 0 | (70) |
Stock-based compensation | 38 | 30 |
Stock issued to Directors | 0 | 70 |
Change in operating assets and liabilities: | ||
Accounts receivable | 100 | 215 |
Inventory | (136) | (436) |
Prepaid expenses and other current assets | (66) | (97) |
Other assets | 5 | 0 |
Accounts payable and accrued expenses | 2,659 | (497) |
Operating lease liabilities | (26) | (11) |
NET CASH USED FOR OPERATING ACTIVITIES | (1,059) | (3,319) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property, equipment and leasehold improvements | (55) | (361) |
NET CASH USED FOR INVESTING ACTIVITIES | (55) | (361) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from debt, including related parties | 1,050 | 175 |
Payment of debt issuance costs | (50) | 0 |
Payments of debt principal, including related parties | (142) | (1,911) |
Proceeds from sales of common stock from Equity Distribution Agreement | 139 | 0 |
Payment of commissions related to sale of common stock | (5) | 0 |
Proceeds from common stock and warrants issued in public offering | 0 | 9,398 |
Payment of costs related to public offering | 0 | (140) |
Payment of preferred stock dividends | 0 | (4) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 992 | 7,518 |
NET CHANGE IN CASH | (122) | 3,838 |
Cash at beginning of period | 510 | 110 |
CASH AT END OF PERIOD | 388 | 3,948 |
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES: | ||
Cash paid for interest | 95 | 247 |
SUPPLEMENTAL DISCLOSURE FOR NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Trucks acquired with debt | $ 0 | $ 152 |
ORGANIZATION, NATURE OF BUSINES
ORGANIZATION, NATURE OF BUSINESS, AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2024 | |
ORGANIZATION, NATURE OF BUSINESS, AND BASIS OF PRESENTATION | |
ORGANIZATION, NATURE OF BUSINESS, AND BASIS OF PRESENTATION | NOTE 1 – ORGANIZATION, NATURE OF BUSINESS, AND BASIS OF PRESENTATION Organization and Recent Developments Edible Garden Corp., a Nevada corporation, was incorporated on April 9, 2013. On March 28, 2020, Edible Garden Inc., a Wyoming corporation, was incorporated for the purpose of acquiring substantially all of the operating assets of Edible Garden Corp., which was a separately identified reportable segment of its parent company Blum Holdings, Inc. (formerly known as Terra Tech Corporation). The acquisition was completed on March 30, 2020. Prior to March 30, 2020 Edible Garden AG Incorporated had no operations. Hereafter, Edible Garden AG Incorporated and its subsidiaries will collectively be referred to as “Edible Garden,” “we,” “us,” “our,” or the “Successor.” Edible Garden Corp., a wholly owned subsidiary of Blum Holdings, Inc. will be referred to as the “Predecessor.” Throughout these financial statements, the Successor and the Predecessor are also referred to as “the Company” and used interchangeably, unless otherwise noted. We authorized 100,000 shares of common stock, par value $0.0001 per share (“common stock”), at formation. On October 14, 2020, we simultaneously declared a 20-for-1 forward stock split of our common stock and increased the number of authorized common shares to 20,000,000. On June 30, 2021, we simultaneously (1) converted Edible Garden from a Wyoming into a Delaware corporation, (2) declared a 1-for-2 reverse stock split of our common stock, and (3) increased the total number of authorized common shares to 50,000,000. On September 8, 2021, we simultaneously declared a 20-for-1 forward stock split of our common stock and increased the number of authorized common shares to 200,000,000. On January 18, 2022, the Company’s board of directors and stockholders approved a 1-for-5 reverse stock split of its outstanding common stock, which became effective on May 3, 2022. On January 26, 2023, we effected a reverse stock split of 1-for-30 and decreased the total number of authorized common shares to 6,666,667. On June 8, 2023, we increased the number of authorized shares of common stock from 6,666,667 shares to 10,000,000 shares. On November 10, 2023, we increased the total number of authorized shares of capital stock of the Company from 20,000,000 to 110,000,000 and increased the total authorized shares of common stock from 10,000,000 shares to 100,000,000 shares. On April 5, 2024, we declared a 1-for-20 reverse stock split of our outstanding common stock. The conversion or exercise prices of our issued and outstanding stock options and warrants were adjusted in connection with the reverse stock split. All historical share and per share amounts reflected throughout this report have been adjusted to reflect the stock splits described above. Nature of Business Edible Garden is a retail seller of locally grown hydroponic produce, nutraceuticals and hot sauce, which is distributed throughout the Northeast and Midwest. Currently, Edible Garden’s products are sold at over 5,000 supermarkets. Our target customers are those individuals seeking fresh produce locally grown using environmentally sustainable methods. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission (“SEC”) pursuant to Section 13 or 15(d) under the Securities Exchange Act of 1934. The December 31, 2023 balances reported herein are derived from the audited consolidated financial statements for the year ended December 31, 2023. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. All intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the Company’s unaudited condensed consolidated financial position as of March 31, 2024 and December 31, 2023, and the unaudited condensed consolidated results of operations and cash flows for the three-month periods ended March 31, 2024 and 2023 have been included. Going Concern The accompanying financial statements have been prepared assuming that we will continue as a going concern. In an effort to achieve liquidity that would be sufficient to meet all of our commitments, the Company may seek funding through additional debt or equity financing arrangements, implement incremental expense reduction measures or a combination thereof to continue financing its operations. However, we believe that even after taking these actions, we will not have sufficient liquidity to satisfy all of our future financial obligations. The risks and uncertainties surrounding our ability to continue our business with limited capital resources raise substantial doubt as to our ability to continue as a going concern. See Note 11, “ Going Concern |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Recently Issued Accounting Pronouncements to Be Adopted in Future Periods In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280) In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740) Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported period. Changes in these estimates and assumptions may have a material impact on the consolidated financial statements and accompanying notes. Examples of significant estimates and assumptions include provisions for doubtful accounts, accrued liabilities, discount rates used in the measurement and recognition of lease liabilities and valuation of our warrants. These estimates generally involve complex issues and require us to make judgments, involving an analysis of historical and future trends, that can require extended periods of time to resolve, and are subject to change from period to period. In all cases, actual results could differ materially from our estimates. Trade Receivables The Company extends non-interest-bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The reserve for credit losses was $146,080 and $136,858 as of March 31, 2024 and December 31, 2023, respectively. Concentration of Credit Risk During the three months ended March 31, 2024 and 2023, three customers accounted for approximately 78.7% and 69.0% of our total revenue, respectively. As of March 31, 2024, approximately 76.0% of our gross outstanding trade receivables were attributed to three customers, 41.0% of which was due from one customer. As of December 31, 2023, approximately 80.4% of our gross outstanding trade receivables were attributed to four customers, 41.1% of which was due from one customer. This concentration of customers leaves us exposed to the risks associated with the loss of one or more of these significant customers, which would materially and adversely affect our revenues and results of operations. Inventory We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out method, or its net realizable value. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and reserve accordingly. Our reserve estimate for excess and obsolete inventory is based on expected future use. Our reserve estimates have historically been consistent with our actual experience as evidenced by actual sale or disposal of the goods. The reserve for excess and obsolete inventory was not material as of March 31, 2024 and December 31, 2023. Prepaid Expenses Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring up-front payments. Property, Equipment and Leasehold Improvements, Net Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Our fixed assets, which are comprised of leasehold improvements, equipment and vehicles, have useful lives of five years. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” “Property, Equipment and Leasehold Improvements, Net” Intangible Assets Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment.” The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period the impairment is identified. Revenue Recognition and Performance Obligations Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company does not offer returns, discounts, loyalty programs or other sales incentive programs that are material to revenue recognition. Payments from our customers are due upon delivery or within a short period after delivery. Disaggregation of Revenue The following table includes revenue disaggregated by revenue stream for the three months ended March 31, 2024 and 2023: (in thousands) Three Months Ended, March 31, 2024 March 31, 2023 Herbs & Produce $ 2,754 $ 1,943 Vitamins and Supplements 378 512 Total $ 3,132 $ 2,455 Contract Balances Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC Topic 606. Contract Estimates and Judgments On January 1, 2024, the Company and Meijer Distribution, Inc. (“Buyer”) entered into two agreements pursuant to which the Company will supply and sell products to Buyer (the “Agreements”). Under the Agreements, the Company will sell (i) fresh cut herbs, including basil, bay leaves, chives, cilantro, dill, mint, oregano, rosemary, sage, thyme; (ii) hydroponic basil; and (iii) potted herbs, including basil, chives, cilantro, mint, oregano, parsley, rosemary, sage, thyme, wheatgrass; in quantities and delivery schedule requested by the Buyer at prices per unit set in advance by the Company and the Buyer. Under the Agreements, the Company and the Buyer will renegotiate the prices for each unit annually, provided that the price per unit will not increase or decrease at a rate greater than the change in the relevant Consumer Price Index in that year. Once set, the pricing terms will remain fixed for the remainder of the year. Any price increases will take effect after sixty days and any price decrease will be effective immediately. If the Company and the Buyer are unable to mutually agree on price increases, the Company will have the power to terminate the Agreements immediately. In addition, under the agreement governing the purchase of potted herbs, the Company has agreed to fund the installation of fixtures in each of the Buyer’s stores to display the potted herbs in an aggregate amount estimated to be approximately $806,947. These payments will be made as a weekly deduction from the Company’s receivables from the Buyer. The Agreements became effective as of January 1, 2024 and expire on December 31, 2026. The Agreements may be renewed for an additional two-year term upon the mutual agreement of the Company and the Buyer. The Agreements may be terminated by the Buyer without cause upon sixty days’ prior notice. Management has determined the payments for the fixtures should be treated as a reduction in revenue under the guidance of ASC 606. As we do not expect the agreement to be terminated before the end of the three-year term, the aggregate cost of the fixtures of approximately $806,947 will be treated as a reduction in the transaction price of products sold to the Buyer during the three year term of the contract. Cost of Goods Sold Cost of goods sold includes materials, labor and overhead costs incurred in cultivating, producing, and shipping our products. Advertising Expenses The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” During the three months ended March 31, 2024 and 2023, a Loss Per Common Share In accordance with the provisions of ASC 260, “Earnings Per Share,” Income Taxes The provision for income taxes is determined in accordance with ASC 740, “Income Taxes” The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. Segment Reporting The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment. The Company’s principal decision makers are the Chief Executive Officer and its Interim Chief Financial Officer. Management believes that its business operates as one reportable segment because: a) the Company measures profit and loss as a whole; b) the principal decision makers do not review information based on any operating segment; c) the Company does not maintain discrete financial information on any specific segment; d) the Company has not chosen to organize its business around different products and services, and e) the Company has not chosen to organize its business around geographic areas. |
INVENTORY
INVENTORY | 3 Months Ended |
Mar. 31, 2024 | |
INVENTORY | |
INVENTORY | NOTE 3 – INVENTORY The following table summarizes inventory as of March 31, 2024 and December 31, 2023: (in thousands) March 31, December 31, 2024 2023 Raw materials $ 288 $ 341 Work-in-progress 489 258 Finished goods 37 79 Total inventory $ 814 $ 678 |
PROPERTY EQUIPMENT AND LEASEHOL
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET | 3 Months Ended |
Mar. 31, 2024 | |
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | NOTE 4 – PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET The following table summarizes property, equipment and leasehold improvements as of March 31, 2024 and December 31, 2023: (in thousands) March 31, December 31, 2024 2023 Furniture and equipment $ 1,276 $ 1,276 Computer hardware 7 6 Leasehold improvements 3,134 3,121 Vehicles 456 456 Land 202 202 Construction in progress 219 182 Subtotal 5,294 5,243 Less accumulated depreciation (1,648 ) (1,350 ) Property, equipment and leasehold improvements, net $ 3,646 $ 3,893 Depreciation expense related to property, equipment and leasehold improvements for the three months ended March 31, 2024 and 2023 was $301,582 and $333,536, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
INTANGIBLE ASSETS | |
INTANGIBLE ASSETS | NOTE 5 – INTANGIBLE ASSETS The following table summarizes intangible assets as of March 31, 2024 and December 31, 2023: (in thousands) March 31, 2024 December 31, 2023 Estimated Gross Net Gross Net Useful Life in Years Carrying Value Accumulated Amorti zation Carrying Value Carrying Value Accumulated Amortization Carrying Value Amortizing Intangible Assets: Pulp brand recipes 15 $ 50 $ (4 ) $ 46 $ 50 (3 ) $ 47 Non-compete agreement 2 62 (62 ) - 62 (62 ) - Total Intangible Assets, net $ 112 $ (66 ) $ 46 $ 112 $ (65 ) $ 47 Amortization expense for the three months ended March 31, 2024 and 2023 was $833. Annual amortization expense for each of the next five years is estimated to be $3,333 and thereafter $33,333. |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2024 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table summarizes accounts payable and accrued expenses as of March 31, 2024 and December 31, 2023: (in thousands) March 31, 2024 December 31, 2023 Accounts payable $ 3,307 $ 1,233 General accrued expenses 107 3 Employee retention credit funds 865 865 Accrued interest payable 29 32 Accrued payroll 59 270 Accrued severance and Director's fees 647 - Accrued vacation 122 80 Current lease liability 9 34 Total Accounts Payable and Accrued Expenses $ 5,145 $ 2,517 |
NOTES PAYABLE
NOTES PAYABLE | 3 Months Ended |
Mar. 31, 2024 | |
NOTES PAYABLE | |
NOTES PAYABLE | NOTE 7 – NOTES PAYABLE The following table summarizes notes payable as of March 31, 2024 and December 31, 2023: (in thousands) March 31, December 31, 2024 2023 Secured promissory note $ 3,106 $ 3,106 Future receivables financing agreement with Cedar Advance, LLC 1,003 - NJD Investments, LLC promissory note 791 864 SBA loan 150 150 Vehicle loans 305 325 Total Gross Debt $ 5,355 $ 4,445 Less: Gross short term debt (4,438 ) (387 ) Less: Debt discount (65 ) (18 ) Net Long Term Debt $ 852 $ 4,040 Scheduled maturities of long-term debt as of March 31, 2024, are as follows (in thousands): Years Ending December 31, Secured Promissory Notes Cedar Advance, LLC loan NJD Investments, LLC Promissory Note SBA Loan Vehicle Loans Total 2024 (remaining) - 1,003 228 - 65 1,296 2025 3,106 - 316 - 92 3,514 2026 - - 247 - 82 329 2027 - - - - 59 59 Thereafter - - - 150 7 157 Total $ 3,106 $ 1,003 $ 791 $ 150 $ 305 $ 5,355 Secured Promissory Note On March 30, 2020, the Company entered into a promissory note (the “First Sament Note”) for $3,000,000 with Sament Capital Investments, Inc., a wholly owned subsidiary of the Predecessor, (“Sament”) in connection with the acquisition of the Predecessor’s assets. The First Sament Note accrues interest at a rate of 3.5% per annum on a 360-day year basis and matures March 30, 2025. The First Sament Note is secured by the Company’s operating assets purchased from the Predecessor. On November 15, 2023, Sament assigned the note to various third parties who are not affiliated with the Company. As of March 31, 2024, the total outstanding balance of $3,106,458 is included in “Short-term debt, net of discounts” “Long-term debt, net of discounts” On June 2, 2020, the Company entered into a promissory note for $653,870 with Sament (the “Second Sament Note”), which accrued interest at a rate of 3.50% per annum and had a maturity date of June 3, 2023. The Second Sament Note was secured by the Company’s operating assets purchased from the Predecessor. During the year ended December 31, 2021, accrued interest of $23,203 was added to the principal of the Second Sament Note. On February 17, 2023, the Company prepaid the principal and accrued interest due under the Second Sament Note in exchange for Sament agreeing to reduce the principal amount of the Second Sament Note by approximately 10%. As a result of the agreement, the Company repaid $606,653 of outstanding principal, and $27,125 of accrued interest, and recognized a gain from extinguishment of the debt of $70,420 during the three months ended March 31, 2023. Future Receivables Financing Agreement with Cedar Advance, LLC On March 14, 2024, the Company entered into a standard merchant cash advance agreement (the “Cedar Agreement”) with Cedar Advance LLC (“Cedar”), dated as of March 12, 2024, pursuant to which the Company sold to Cedar $1,491,000 of its future accounts receivable for a purchase price of $1,050,000, less fees and expenses of $50,000, for net funds provided of $1,000,000. Pursuant to the Cedar Agreement, Cedar is expected to withdraw $53,250 a week directly from the Company’s bank account until the $1,491,000 due to Cedar under the Cedar Agreement is paid in full. To secure the Company’s obligations under the Cedar Agreement, the Company granted Cedar a security interest in all accounts, including all deposit accounts, accounts receivable, and other receivables, and proceeds as those terms are defined by Article 9 of the Uniform Commercial Code (the “Collateral”). In addition, the Company agreed not to incur, directly or indirectly, any lien on or with respect to the Collateral. In the event of a default (as defined in the Cedar Agreement), Cedar, among other remedies, can enforce its security interest in the Collateral and demand payment in full of the uncollected amount of receivables purchased plus all fees due under the Cedar Agreement. As of March 31, 2024, the total outstanding balance of $1,003,187 is included in “Short-term debt, net of discounts” Subsequent Events. NJD Investments, LLC Promissory Note On August 30, 2022, the Company entered into a promissory note (the “NJDI Note”) for $1,136,000 with NJDI in connection with its purchase of the assets of 2900 Madison Ave. SE, Grand Rapids, Michigan (“the Property”). The NJDI Note accrues interest at a rate of 5% per annum and will mature on September 1, 2026. The Company may prepay the outstanding amount due at any time without penalty. The Company makes monthly payments of principal and interest of $28,089. The NJDI Note is secured by a mortgage on the Property (the “Mortgage”) and a security interest in the assets owned by the Subsidiary in favor of NJDI (the “Security Agreement”). In addition, the Company’s obligation to repay the amounts due under the NJDI Note, or up to $1,136,000 plus any accrued interest, is guaranteed by the Company under a guaranty in favor of NJDI (the “Guaranty”) entered into on August 30, 2022. Under the Guaranty, in the event that the Company defaulted on the NJDI Note, the Company would be responsible for any sum remaining due after NJDI foreclosed on the Mortgage and exercised its rights under the Security Agreement. During the year ended December 31, 2022, accrued interest of $19,210 was added to the principal of the NJDI Note. As of March 31, 2024 and December 31, 2023, $305,726 and $300,683 of the outstanding balance is included in “ Short-term debt, net of discounts” Long-term debt, net of discounts” Small Business Administration (“SBA”) Loans On June 22, 2020, the Company entered into a U.S. Small Business Administration Loan Authorization and Agreement pursuant to which the Company received loan proceeds of $150,000 (the “SBA Loan”). The SBA Loan was made under, and is subject to the terms and conditions of, the Economic Injury Disaster Loan Program, which was a program expanded for COVID-19 relief under the CARES Act and is administered by the U.S. Small Business Administration. The term of the SBA Loan is thirty (30) years with a maturity date of June 22, 2050 and the annual interest rate of the SBA Loan is a fixed rate of 3.75%. Under the terms of the CARES Act, the use of loan proceeds for the SBA Loan is limited to alleviating economic injury caused by the COVID-19 pandemic. The outstanding balance on the SBA Loan of $150,000 is included in “Long-term debt, net of discounts” Vehicle Loans During the year ended December 31, 2020, the Company entered into a financing agreement for the purchase of a vehicle. The loan, which accrues interest at a rate of 17.51%, matures on April 26, 2024. The loan is secured by the vehicle purchased. During the year ended December 31, 2021, the Company entered into three financing agreements totaling $102,681 for the purchase of vehicles. The loans, which accrue interest at rates of 16.84% - 18.66%, mature in 2026. The loans are secured by the vehicles purchased. During the year ended December 31, 2022, the Company entered into two financing agreements totaling $158,214 for the purchase of vehicles. The loans, which accrue interest at a rate of 7.64%, mature in 2027. The loans are secured by the vehicles purchased. During the year ended December 31, 2023, the Company entered into three financing agreements totaling $151,850 for the purchase of vehicles. The loans, which accrue interest at a rate of 10.49%, mature in 2028. The loans are secured by the vehicles purchased. As of March 31, 2024, $88,464 of the total outstanding balance of the vehicle loans is included within “ Short-term debt, net of discounts” “Long-term debt, net of discounts” As of December 31, 2023, $85,885 of the total outstanding balance of the vehicle loans is included within “ Short-term debt, net of discounts” “Long-term debt, net of discounts” |
STOCKHOLDERS EQUITY (DEFICIT)
STOCKHOLDERS EQUITY (DEFICIT) | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS EQUITY (DEFICIT) | |
STOCKHOLDERS' EQUITY (DEFICIT) | NOTE 8 – STOCKHOLDERS’ EQUITY (DEFICIT) 2024 Equity Distribution Agreement On February 7, 2024, we entered into an Equity Distribution Agreement with Maxim Group LLC (“Maxim” or the “sales agent”), relating to shares of our common stock. In accordance with the terms of the Equity Distribution Agreement, we may offer and sell shares of our common stock, $0.0001 par value per share (“common stock”), having an aggregate offering price of up to $1,146,893 (the “Aggregate Offering Amount”) from time to time through Maxim acting as our agent. The offering of shares of our common stock pursuant to the Equity Distribution Agreement will terminate upon the earliest of (i) February 6, 2025, (ii) the sale of a number of shares of common stock equal to the Aggregate Offering Amount, and (iii) the termination of the Equity Distribution Agreement by written notice of us or Maxim. Maxim will be entitled to compensation at a fixed commission rate of 3.5% of the gross sales price per share sold. During the three months ended March 31, 2024, we sold 16,538 shares of common stock for total gross proceeds of $139,060 and paid commissions to Maxim of $4,867. 2023 Public Offering On February 7, 2023, the Company issued an aggregate of 80,950 shares of common stock and warrants to purchase an aggregate of 93,093 shares of common stock (“February Follow-On Warrants”) pursuant to an underwriting agreement between the Company and Maxim Group LLC, as representative of the underwriters (the “Representative”) and raised approximately $10.2 million in gross proceeds. The February Follow-On Warrants, which became exercisable on February 7, 2023, grant the holder the right to purchase one share of common stock at an exercise price equal to $126.00 per share. The February Follow-On Warrants expire on February 7, 2028. In addition to customary cashless exercise, the holders have the right to effect an “alternative cashless exercise” on or after April 10, 2023. In an “alternative cashless exercise,” the aggregate number of shares of common stock issuable is equal to the product of (i) the aggregate number of shares of common stock that would be issuable upon exercise of the February Follow-On Warrant if it was exercised for cash and (ii) 0.5. Also on February 7, 2023, the Company issued warrants to the Representative to purchase up to 4,048 shares of Common Stock at an exercise price of $139.60 per share. These warrants became exercisable on August 2, 2023 and will expire on February 2, 2028. Common Stock The Company has authorized 100,000,000 shares of common stock with $0.0001 par value. As of March 31, 2024 and December 31, 2023, 307,820 and 285,282 common shares were issued and outstanding, respectively. During the three months ended March 31, 2024, the Company issued 22,538 shares of common stock, as summarized below: Number of Shares Sale of common stock pursuant to Equity Distribution Agreement 16,538 Issuances of common stock to employees and consultants 6,000 Total of common stock issuances during the three months ended March 31, 2024 22,538 Summary table of common stock share transactions: Shares outstanding at December 31, 2023 285,282 Common stock issuances 22,538 Shares outstanding at March 31, 2024 307,820 Stock-Based Compensation On January 18, 2022 in connection with the IPO, the board of directors (the “Board”) approved the Edible Garden AG Incorporated 2022 Equity Incentive Plan (the “2022 Plan”). The 2022 Plan provides for equity incentive compensation for employees, non-employee directors, and any other individuals who perform services for the Company. The number of shares initially available for grant under the 2022 Plan was 50,000. A variety of discretionary awards are authorized under the 2022 Plan, including stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards. The vesting of such awards may be conditioned upon either a specified period of time or the attainment of specific performance goals as determined by the administrator of the 2022 Plan. The option price and terms are also subject to determination by the administrator with respect to each grant. On June 8, 2023 the stockholders of the Company approved the First Amendment to the 2022 Plan, which increased the number of shares of common stock reserved for issuance thereunder by 15,000 shares and extended the term of the 2022 Plan until June 8, 2033. During the three months ended March 31, 2024, the Company issued 6,000 restricted stock awards to employees and consultants of the Company as compensation. We recognized stock-based compensation expense of $38,280 for the awards, which vested immediately. Shares available for future stock compensation grants totaled 9,957 at March 31, 2024. Warrants There was no warrant activity during the three months ended March 31, 2024. Total outstanding warrants of 179,345 as of March 31, 2024 and December 31, 2023 have a weighted-average exercise price per share of $133.65. |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
LEASES | NOTE 9 – LEASES A lease provides the lessee the right to control the use of an identified asset for a period of time in exchange for consideration. Operating lease right-of-use assets (“Lease Assets”) are included within “Other Assets” on the Company’s consolidated balance sheet. Lease Assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. The Company determines if an arrangement is a lease at inception. Lease Assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payments is the interest rate implicit in the lease, or when that is not readily determinable, the Company utilizes its secured borrowing rate. Lease Assets include any lease payments required to be made prior to commencement and exclude lease incentives. Both Lease Assets and lease liabilities exclude variable payments not based on an index or rate, which are treated as period costs. The Company’s lease agreements do not contain significant residual value guarantees, restrictions, or covenants. We are currently party to an ongoing arrangement with our predecessor company, Edible Garden Corp., whereby we make lease payments of approximately $21,860 per month to the lessor of the land on which our flagship facility is built and for which our predecessor company is the lessee. Our month-to-month arrangement meets the definition of a short-term lease and is therefore excluded from the recognition requirements of ASC 842, “ Leases During the three months ended March 31, 2024, total operating lease cost was $73,445, of which $46,685 was associated with short-term leases. During the three months ended March 31, 2023, total operating lease cost was $75,170, of which $48,410 was associated with short-term leases. As of March 31, 2024 and December 31, 2023, short term lease liabilities of $8,791 and $34,415 are included within “Accounts Payable and Accrued Expenses” on the consolidated balance sheets, respectively. The table below presents total operating lease assets and lease liabilities as of March 31, 2024 and December 31, 2023: (in thousands) March 31, December 31, 2024 2023 Operating lease assets $ 4 $ 34 Operating lease liabilities $ 9 $ 34 The table below presents the maturities of operating lease liabilities as of March 31, 2024: (in thousands) Operating Leases 2024 (remaining) 9 Total lease payments 9 Total operating lease liabilities $ 9 The table below presents the weighted average remaining lease term for operating leases and weighted average discount rate used in calculating operating lease right-of-use assets: March 31, 2024 Remaining lease term (months) 1 Discount rate 17.5 % |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
COMMITMENTS AND CONTINGENCIES (Note 12) | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – COMMITMENTS AND CONTINGENCIE Effective January 25, 2024, Michael James retired from his positions as Chief Financial Officer, Treasurer, Secretary and Director of the Company. In connection with Mr. James’s retirement, on January 24, 2024, the Company and Mr. James entered into a separation agreement (the “Separation Agreement”). Pursuant to the terms of the Separation Agreement, the Company agreed to pay Mr. James a severance payment of $300,000 in the form of salary continuation until January 2025. In addition, Mr. James is eligible to earn milestone payments under the Separation Agreement in an aggregate amount up to $300,000 if he completes certain transitional deliverables for the Company. The Company granted Mr. James a restricted stock award with a fair value equal to $25,000 as of April 2, 2024. As described in detail in Note 2, "Summary of Significant Accounting Policies,” From time to time, we may be party to or otherwise involved in legal proceedings arising in the ordinary course of business. Management does not believe that there is any pending or threatened proceeding against us, which, if determined adversely, would have a material adverse effect on our business, results of operations or financial condition. |
GOING CONCERN
GOING CONCERN | 3 Months Ended |
Mar. 31, 2024 | |
GOING CONCERN | |
GOING CONCERN | NOTE 11 – GOING CONCERN These financial statements are prepared on a going concern basis. The Company began operating in 2020. For the three months ended March 31, 2024, we incurred a net loss of $4.0 million. We expect to experience further significant net losses in the foreseeable future. As of March 31, 2024, we had cash available for operations of $0.4 million. We have not been able to generate sufficient cash from operating activities to fund our ongoing operations. Since our inception, we have raised capital through our issuance of debt and equity securities. Our future success is dependent upon our ability to achieve profitable operations and generate cash from operating activities. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations. We will be required to raise additional funds through public or private financing, additional collaborative relationships or other arrangements until we are able to raise revenue and reduce costs to a point of positive cash flow. We are evaluating various options to further reduce our cash requirements to operate at a reduced rate, as well as options to raise additional funds, including obtaining loans and selling securities. There is no guarantee that we will be able to generate enough revenue and/or raise capital to support our operations, or if we are able to raise capital, that it will be available to us on acceptable terms, on an acceptable schedule, or at all. The issuance of additional securities may result in a significant dilution in the equity interests of our current stockholders. Obtaining loans, assuming these loans would be available, will increase our liabilities and future cash commitments. There is no assurance that we will be able to obtain further funds required for our continued operations or that additional financing will be available for use when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations. The risks and uncertainties surrounding our ability to continue raise capital and to continue our business with limited capital resources raise substantial doubt as to our ability to continue as a going concern for twelve months from the issuance of these financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 12 – SUBSEQUENT EVENTS On May 7, 2024, the Company entered into an amended and restated standard merchant cash advance agreement (the “Restated Agreement”) with Cedar, dated as of May 3, 2024, that amends and restates the Cedar Agreement. Under the Restated Agreement, the Company sold to Cedar an additional $994,000 of its future accounts receivable for a purchase price of $700,000, less aggregate fees and expenses of $87,500, for additional net funds provided of $544,250, bringing the total financing with Cedar to $2,485,000 in accounts receivable sold for $1,544,250 of net funds provided. Pursuant to the Restated Agreement, we are required to pay Cedar 35.0% of all funds collected weekly from customers and Cedar is expected to withdraw $65,000 a week directly from the Company’s bank account until the $2,485,000 due to Cedar under the Restated Agreement is paid in full. Except as amended by the Restated Agreement, the remaining terms of the Cedar Agreement remain in full force and effect. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Recently Issued Accounting Standards to Be Adopted in Future Periods | In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280) In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740) |
Use of Estimate | The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reported period. Changes in these estimates and assumptions may have a material impact on the consolidated financial statements and accompanying notes. Examples of significant estimates and assumptions include provisions for doubtful accounts, accrued liabilities, discount rates used in the measurement and recognition of lease liabilities and valuation of our warrants. These estimates generally involve complex issues and require us to make judgments, involving an analysis of historical and future trends, that can require extended periods of time to resolve, and are subject to change from period to period. In all cases, actual results could differ materially from our estimates. |
Trade Receivables | The Company extends non-interest-bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are shown on the face of the consolidated balance sheets net of an allowance for doubtful accounts. The Company analyzes the aging of accounts receivable, historical bad debts, customer creditworthiness and current economic trends, in determining the allowance for doubtful accounts. The Company does not accrue interest receivable on past due accounts receivable. The reserve for credit losses was $146,080 and $136,858 as of March 31, 2024 and December 31, 2023, respectively. |
Concentration of Credit Risk | During the three months ended March 31, 2024 and 2023, three customers accounted for approximately 78.7% and 69.0% of our total revenue, respectively. As of March 31, 2024, approximately 76.0% of our gross outstanding trade receivables were attributed to three customers, 41.0% of which was due from one customer. As of December 31, 2023, approximately 80.4% of our gross outstanding trade receivables were attributed to four customers, 41.1% of which was due from one customer. This concentration of customers leaves us exposed to the risks associated with the loss of one or more of these significant customers, which would materially and adversely affect our revenues and results of operations. |
Inventory | We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out method, or its net realizable value. We periodically review our physical inventory for excess, obsolete, and potentially impaired items and reserve accordingly. Our reserve estimate for excess and obsolete inventory is based on expected future use. Our reserve estimates have historically been consistent with our actual experience as evidenced by actual sale or disposal of the goods. The reserve for excess and obsolete inventory was not material as of March 31, 2024 and December 31, 2023. |
Prepaid Expenses | Prepaid expenses consist of various payments that the Company has made in advance for goods or services to be received in the future. These prepaid expenses include advertising, insurance, and service or other contracts requiring up-front payments. |
Property, Equipment and Leasehold Improvements, Net | Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Our fixed assets, which are comprised of leasehold improvements, equipment and vehicles, have useful lives of five years. Expenditures for major renewals and improvements are capitalized, while minor replacements, maintenance and repairs, which do not extend the asset lives, are charged to operations as incurred. Upon sale or disposition, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in operations. The Company continually monitors events and changes in circumstances that could indicate that the carrying balances of its property, equipment and leasehold improvements may not be recoverable in accordance with the provisions of ASC 360, “Property, Plant, and Equipment.” “Property, Equipment and Leasehold Improvements, Net” |
Intangible Assets | Intangible assets continue to be subject to amortization, and any impairment is determined in accordance with ASC 360, “Property, Plant, and Equipment.” The Company reviews intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Conditions that may indicate impairment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset, a product recall, or an adverse action or assessment by a regulator. If an impairment indicator exists, we test the intangible asset for recoverability. For purposes of the recoverability test, we group our amortizable intangible assets with other assets and liabilities at the lowest level of identifiable cash flows if the intangible asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the intangible asset (asset group) exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the intangible asset (asset group), the Company will write the carrying value down to the fair value in the period the impairment is identified. |
Revenue Recognition and Performance obligations | Revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. The Company does not offer returns, discounts, loyalty programs or other sales incentive programs that are material to revenue recognition. Payments from our customers are due upon delivery or within a short period after delivery. Disaggregation of Revenue The following table includes revenue disaggregated by revenue stream for the three months ended March 31, 2024 and 2023: (in thousands) Three Months Ended, March 31, 2024 March 31, 2023 Herbs & Produce $ 2,754 $ 1,943 Vitamins and Supplements 378 512 Total $ 3,132 $ 2,455 Contract Balances Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets or liabilities that fall under the scope of ASC Topic 606. Contract Estimates and Judgments On January 1, 2024, the Company and Meijer Distribution, Inc. (“Buyer”) entered into two agreements pursuant to which the Company will supply and sell products to Buyer (the “Agreements”). Under the Agreements, the Company will sell (i) fresh cut herbs, including basil, bay leaves, chives, cilantro, dill, mint, oregano, rosemary, sage, thyme; (ii) hydroponic basil; and (iii) potted herbs, including basil, chives, cilantro, mint, oregano, parsley, rosemary, sage, thyme, wheatgrass; in quantities and delivery schedule requested by the Buyer at prices per unit set in advance by the Company and the Buyer. Under the Agreements, the Company and the Buyer will renegotiate the prices for each unit annually, provided that the price per unit will not increase or decrease at a rate greater than the change in the relevant Consumer Price Index in that year. Once set, the pricing terms will remain fixed for the remainder of the year. Any price increases will take effect after sixty days and any price decrease will be effective immediately. If the Company and the Buyer are unable to mutually agree on price increases, the Company will have the power to terminate the Agreements immediately. In addition, under the agreement governing the purchase of potted herbs, the Company has agreed to fund the installation of fixtures in each of the Buyer’s stores to display the potted herbs in an aggregate amount estimated to be approximately $806,947. These payments will be made as a weekly deduction from the Company’s receivables from the Buyer. The Agreements became effective as of January 1, 2024 and expire on December 31, 2026. The Agreements may be renewed for an additional two-year term upon the mutual agreement of the Company and the Buyer. The Agreements may be terminated by the Buyer without cause upon sixty days’ prior notice. Management has determined the payments for the fixtures should be treated as a reduction in revenue under the guidance of ASC 606. As we do not expect the agreement to be terminated before the end of the three-year term, the aggregate cost of the fixtures of approximately $806,947 will be treated as a reduction in the transaction price of products sold to the Buyer during the three year term of the contract. |
Cost of Goods sold | Cost of goods sold includes materials, labor and overhead costs incurred in cultivating, producing, and shipping our products. |
Advertising Expense | The Company expenses advertising costs as incurred in accordance with ASC 720-35, “Other Expenses – Advertising Cost.” During the three months ended March 31, 2024 and 2023, a |
Loss Per Common Share | In accordance with the provisions of ASC 260, “Earnings Per Share,” |
Income Taxes | The provision for income taxes is determined in accordance with ASC 740, “Income Taxes” The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50.0% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. |
Segment Reporting | The Company is not organized by multiple operating segments for the purpose of making operating decisions or assessing performance. Accordingly, the Company operates in one reportable operating segment. The Company’s principal decision makers are the Chief Executive Officer and its Interim Chief Financial Officer. Management believes that its business operates as one reportable segment because: a) the Company measures profit and loss as a whole; b) the principal decision makers do not review information based on any operating segment; c) the Company does not maintain discrete financial information on any specific segment; d) the Company has not chosen to organize its business around different products and services, and e) the Company has not chosen to organize its business around geographic areas. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of disaggregated revenue | (in thousands) Three Months Ended, March 31, 2024 March 31, 2023 Herbs & Produce $ 2,754 $ 1,943 Vitamins and Supplements 378 512 Total $ 3,132 $ 2,455 |
INVENTORY (Tables)
INVENTORY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
INVENTORY | |
Inventory | (in thousands) March 31, December 31, 2024 2023 Raw materials $ 288 $ 341 Work-in-progress 489 258 Finished goods 37 79 Total inventory $ 814 $ 678 |
PROPERTY EQUIPMENT AND LEASEH_2
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
PROPERTY EQUIPMENT AND LEASEHOLD IMPROVEMENTS NET | |
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET | (in thousands) March 31, December 31, 2024 2023 Furniture and equipment $ 1,276 $ 1,276 Computer hardware 7 6 Leasehold improvements 3,134 3,121 Vehicles 456 456 Land 202 202 Construction in progress 219 182 Subtotal 5,294 5,243 Less accumulated depreciation (1,648 ) (1,350 ) Property, equipment and leasehold improvements, net $ 3,646 $ 3,893 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
INTANGIBLE ASSETS | |
Intangible assets | (in thousands) March 31, 2024 December 31, 2023 Estimated Gross Net Gross Net Useful Life in Years Carrying Value Accumulated Amorti zation Carrying Value Carrying Value Accumulated Amortization Carrying Value Amortizing Intangible Assets: Pulp brand recipes 15 $ 50 $ (4 ) $ 46 $ 50 (3 ) $ 47 Non-compete agreement 2 62 (62 ) - 62 (62 ) - Total Intangible Assets, net $ 112 $ (66 ) $ 46 $ 112 $ (65 ) $ 47 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | (in thousands) March 31, 2024 December 31, 2023 Accounts payable $ 3,307 $ 1,233 General accrued expenses 107 3 Employee retention credit funds 865 865 Accrued interest payable 29 32 Accrued payroll 59 270 Accrued severance and Director's fees 647 - Accrued vacation 122 80 Current lease liability 9 34 Total Accounts Payable and Accrued Expenses $ 5,145 $ 2,517 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
NOTES PAYABLE | |
Schedule of notes payable | (in thousands) March 31, December 31, 2024 2023 Secured promissory note $ 3,106 $ 3,106 Future receivables financing agreement with Cedar Advance, LLC 1,003 - NJD Investments, LLC promissory note 791 864 SBA loan 150 150 Vehicle loans 305 325 Total Gross Debt $ 5,355 $ 4,445 Less: Gross short term debt (4,438 ) (387 ) Less: Debt discount (65 ) (18 ) Net Long Term Debt $ 852 $ 4,040 |
Scheduled maturities of long-term debt | Years Ending December 31, Secured Promissory Notes Cedar Advance, LLC loan NJD Investments, LLC Promissory Note SBA Loan Vehicle Loans Total 2024 (remaining) - 1,003 228 - 65 1,296 2025 3,106 - 316 - 92 3,514 2026 - - 247 - 82 329 2027 - - - - 59 59 Thereafter - - - 150 7 157 Total $ 3,106 $ 1,003 $ 791 $ 150 $ 305 $ 5,355 |
STOCKHOLDERS EQUITY (DEFICIT) (
STOCKHOLDERS EQUITY (DEFICIT) (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
STOCKHOLDERS EQUITY (DEFICIT) | |
Schedule of shares of common stock | Number of Shares Sale of common stock pursuant to Equity Distribution Agreement 16,538 Issuances of common stock to employees and consultants 6,000 Total of common stock issuances during the three months ended March 31, 2024 22,538 Summary table of common stock share transactions: Shares outstanding at December 31, 2023 285,282 Common stock issuances 22,538 Shares outstanding at March 31, 2024 307,820 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
Operating Lease assets and lease Liabilities | (in thousands) March 31, December 31, 2024 2023 Operating lease assets $ 4 $ 34 Operating lease liabilities $ 9 $ 34 |
Scheduled maturities of lease liability | (in thousands) Operating Leases 2024 (remaining) 9 Total lease payments 9 Total operating lease liabilities $ 9 |
Weighted average Reamining lease Term | March 31, 2024 Remaining lease term (months) 1 Discount rate 17.5 % |
ORGANIZATION NATURE OF BUSINESS
ORGANIZATION NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details Narrative) - $ / shares | 1 Months Ended | 3 Months Ended | |||||||
Nov. 10, 2023 | Sep. 08, 2021 | Oct. 14, 2020 | Jan. 26, 2023 | Jan. 18, 2022 | Jun. 30, 2021 | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 08, 2023 | |
Authorized shares of common stock | 200,000,000 | 20,000,000 | 6,666,667 | 50,000,000 | 100,000 | ||||
Description of reverse stock split | declared a 20-for-1 forward stock split of our common stock | declared a 20-for-1 forward stock split of our common stock | reverse stock split of 1-for-30 and decreased | 1-for-5 reverse stock split of its outstanding common stock | declared a 1-for-2 reverse stock split of our common stock | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||||
Initial public offering shares | 10,000,000 | 100,000,000 | |||||||
Minimum Member | Capital Stock Of The Company Member | |||||||||
Authorized shares of common stock | 20,000,000 | 10,000,000 | 6,666,667 | ||||||
Maximum Member | Capital Stock Of The Company Member | |||||||||
Authorized shares of common stock | 110,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue | $ 3,132 | $ 2,455 |
Herbs & Produce [Member] | ||
Revenue | 2,754 | 1,943 |
Vitamins and Supplements [Member] | ||
Revenue | $ 378 | $ 512 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Reserve for credit losses | $ 146,080 | $ 136,858 | |
Description of payments for the fixtures treated as a reduction in revenue | expect the agreement to be terminated before the end of the three-year term, the aggregate cost of the fixtures of approximately $806,947 will be treated as a reduction in the transaction price of products sold to the Buyer during the three year term of the contract | ||
Advertising expenses | $ 34,571 | $ 26,727 | |
Installation of fixtures amount | $ 806,947 | ||
Agreement expiry date | December 31, 2026 | ||
One Customers [Member] | Sales Member | |||
Revenue percentage | 41.10% | ||
Gross outstanding trade receivables, Percentage | 41% | ||
Four Customers [Member] | |||
Gross outstanding trade receivables, Percentage | 80.40% | ||
Three Customers [Member] | |||
Gross outstanding trade receivables, Percentage | 76% | ||
Total revenue from five customer percentage | 78.70% | 69% |
INVENTORY (Details)
INVENTORY (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
INVENTORY | ||
Raw materials | $ 288 | $ 341 |
Work-in-progress | 489 | 258 |
Finished goods | 37 | 79 |
Total inventory | $ 814 | $ 678 |
PROPERTY, EQUIPMENT AND LEASEHO
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Subtotal | $ 5,294 | $ 5,243 |
Less accumulated depreciation | (1,648) | (1,350) |
Property, equipment and leasehold improvements, net | 3,646 | 3,893 |
Construction in progress [Member] | ||
Subtotal | 219 | 182 |
Leasehold improvements [Member] | ||
Subtotal | 3,134 | 3,121 |
Land [Member] | ||
Subtotal | 202 | 202 |
Furniture and equipment [Member] | ||
Subtotal | 1,276 | 1,276 |
Computer hardware [Member] | ||
Subtotal | 7 | 6 |
Vehicles [Member] | ||
Subtotal | $ 456 | $ 456 |
PROPERTY, EQUIPMENT AND LEASE_2
PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Equipment and Leasehold Improvements [Member] | ||
Depreciation expense | $ 301,582 | $ 333,536 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Dec. 31, 2023 | |
Amortizing Intangible Assets, net carrying value | $ 46 | $ 47 |
Pulp Brand Recipes [Member] | ||
Amortizing Intangible Assets, gross carrying value | 50 | 50 |
Amortizing Intangible Assets, accumulated amortization | (4) | (3) |
Amortizing Intangible Assets, net carrying value | $ 46 | 47 |
Amortizing Intangible Assets, estimated useful life in years | 15 years | |
Non-compete agreement [Member] | ||
Amortizing Intangible Assets, gross carrying value | $ 62 | 62 |
Amortizing Intangible Assets, accumulated amortization | (62) | (62) |
Amortizing Intangible Assets, net carrying value | $ 0 | 0 |
Amortizing Intangible Assets, estimated useful life in years | 2 years | |
Total Intangible Assets [Member] | ||
Amortizing Intangible Assets, gross carrying value | $ 112 | 112 |
Amortizing Intangible Assets, accumulated amortization | (66) | (65) |
Amortizing Intangible Assets, net carrying value | $ 46 | $ 47 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
INTANGIBLE ASSETS | ||
Amortization expense | $ 833 | $ 833 |
Amortization expense thereafter | 33,333 | |
Annual amortization expense | $ 3,333 | |
Term of annual amortization expense | five years |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | ||
Accounts payable | $ 3,307 | $ 1,233 |
Accrued expense | 107 | 3 |
Employee retention credit funds | 865 | 865 |
Accrued interest payable | 29 | 32 |
Accrued payroll | 59 | 270 |
Accrued severance and Director's fees | 647 | 0 |
Accrued vacation | 122 | 80 |
Current lease liability | 9 | 34 |
Total Accounts Payable and Accrued Expenses | $ 5,145 | $ 2,517 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
NOTES PAYABLE | ||
Secured promissory note | $ 3,106 | $ 3,106 |
Future receivables financing agreement with Cedar Advance, LLC | 1,003 | 0 |
NJD Investments, LLC promissory note | 791 | 864 |
SBA loan | 150 | 150 |
Vehicle loan | 305 | 325 |
Total gross debt | 5,355 | 4,445 |
Less: Gross short term debt | (4,438) | (387) |
Less: Debt discount | (65) | (18) |
Net long term debt | $ 852 | $ 4,040 |
NOTES PAYABLE (Details 1)
NOTES PAYABLE (Details 1) $ in Thousands | Mar. 31, 2024 USD ($) |
Secured Promissory Notes [Member] | |
2024 (remaining) | $ 0 |
2025 | 3,106 |
2026 | 0 |
2027 | 0 |
Thereafter | 0 |
Long term debt total | 3,106 |
NJD Investments, LLC Promissory [Member] | |
2024 (remaining) | 228 |
2025 | 316 |
2026 | 247 |
2027 | 0 |
Thereafter | 0 |
Long term debt total | 791 |
SBA Loan [Member] | |
2024 (remaining) | 0 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
Thereafter | 150 |
Long term debt total | 150 |
Vehicle Loans [Member] | |
2024 (remaining) | 65 |
2025 | 92 |
2026 | 82 |
2027 | 59 |
Thereafter | 7 |
Long term debt total | 305 |
Total [Member] | |
2024 (remaining) | 1,296 |
2025 | 3,514 |
2026 | 329 |
2027 | 59 |
Thereafter | 157 |
Long term debt total | 5,355 |
Cedar Advance, LLC Loan [Member] | |
2024 (remaining) | 1,003 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
Thereafter | 0 |
Long term debt total | $ 1,003 |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Mar. 14, 2024 | Jun. 02, 2020 | Aug. 30, 2022 | Jun. 22, 2020 | Mar. 30, 2020 | Mar. 31, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unamortized discount | $ 65,000 | $ 18,000 | ||||||||
Future Receivables Financing Agreement with Cedar Advance, LLC [Member] | ||||||||||
Fees and expenses | $ 50,000 | |||||||||
Prior payment | 1,050,000 | |||||||||
Net funds | 1,000,000 | |||||||||
Sale | 1,491,000 | |||||||||
Withdrawal amount | 53,250 | |||||||||
Payment due | $ 1,491,000 | |||||||||
Vehicle Loan [Member] | ||||||||||
Outstanding balance | 88,464 | $ 85,885 | ||||||||
Long term debt balance outstanding | 239,343 | |||||||||
Short-term debt, net of discounts | 216,233 | |||||||||
Accrued interest rate | 10.49% | 7.64% | 17.51% | |||||||
financing agreements | $ 151,850 | $ 158,214 | $ 102,681 | |||||||
Loan Maturity date | 2028 | 2027 | 2026 | April 26, 2024 | ||||||
Vehicle Loan [Member] | Minimum Member | ||||||||||
Accrued interest rate | 16.84% | |||||||||
Vehicle Loan [Member] | Maximum Member | ||||||||||
Accrued interest rate | 18.66% | |||||||||
NJD Investments, LLC Promissory Note [Member] | ||||||||||
Accrued interest | $ 19,210 | |||||||||
Outstanding balance | 305,726 | $ 300,683 | ||||||||
Promissory note | $ 1,136,000 | |||||||||
Interest rate | 5% | |||||||||
Monthly installment | $ 28,089 | |||||||||
Guaranteed amount | $ 1,136,000 | |||||||||
Long term debt balance outstanding | 484,872 | 563,685 | ||||||||
Short-term debt, net of discounts | 1,003,187 | |||||||||
Maturity date | Sep. 01, 2026 | |||||||||
First Sament Note Member | ||||||||||
Accrued interest | 9,363 | 9,363 | ||||||||
Unamortized discount | 16,068 | 19,429 | ||||||||
Outstanding balance | 3,106,458 | 3,106,458 | ||||||||
Promissory note | $ 653,870 | $ 3,000,000 | ||||||||
Interest rate | 3.50% | 3.50% | ||||||||
Maturity date | Jun. 03, 2023 | Mar. 30, 2025 | ||||||||
First Sament Note One Member | ||||||||||
Accrued interest | 27,125 | |||||||||
Outstanding balance | 606,653 | |||||||||
Debt principal | 70,420 | $ 23,203 | ||||||||
SBA Loan [Member] | ||||||||||
Accrued interest | 19,208 | 18,756 | ||||||||
Outstanding balance | $ 150,000 | $ 150,000 | ||||||||
Interest rate | 3.75% | |||||||||
Proceeds from loan | $ 150,000 | |||||||||
Maturity date | Jun. 22, 2050 |
STOCKHOLDERS EQUITY (DEFICIT)_2
STOCKHOLDERS EQUITY (DEFICIT) (Details) | 3 Months Ended |
Mar. 31, 2024 shares | |
STOCKHOLDERS EQUITY (DEFICIT) | |
Sale of common stock pursuant to Equity Distribution Agreement | 16,538 |
Issuances of common stock to employees and consultants | 6,000 |
Total common stock issuanced during the year ended | 22,538 |
Shares outstanding | 285,282 |
Common stock issuances | 22,538 |
Shares outstanding | 307,820 |
STOCKHOLDERS EQUITY (DEFICIT)_3
STOCKHOLDERS EQUITY (DEFICIT) (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||
Feb. 07, 2024 | Jun. 08, 2023 | Feb. 07, 2023 | Jan. 18, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Oct. 26, 2022 | |
Stock-based compensation expense | $ 38,280 | |||||||
Restricted stock awards to employees and consultants | 6,000 | |||||||
Exercise price | $ 126 | |||||||
Common stock description | the Company issued an aggregate of 80,950 shares of common stock and warrants to purchase an aggregate of 93,093 shares of common stock (“February Follow-On Warrants”) pursuant to an underwriting agreement between the Company and Maxim Group LLC, as representative of the underwriters (the “Representative”) and raised approximately $10.2 million in gross proceeds. The February Follow-On Warrants, which became exercisable on February 7, 2023, grant the holder the right to purchase one share of common stock at an exercise price equal to $126.00 per share. The February Follow-On Warrants expire on February 7, 2028. In addition to customary cashless exercise, the holders have the right to effect an “alternative cashless exercise” on or after April 10, 2023. In an “alternative cashless exercise,” the aggregate number of shares of common stock issuable is equal to the product of (i) the aggregate number of shares of common stock that would be issuable upon exercise of the February Follow-On Warrant if it was exercised for cash and (ii) 0.5. Also on February 7, 2023, the Company issued warrants to the Representative to purchase up to 4,048 shares of Common Stock at an exercise price of $139.60 per share. These warrants became exercisable on August 2, 2023 and will expire on February 2, 2028 | |||||||
Common stock authorized | 100,000,000 | 100,000,000 | ||||||
Gross proceeds | $ 23,000 | $ (24,000) | ||||||
Common stock par value | $ 0.0001 | $ 0.0001 | ||||||
Common stock issued during the year | 22,538 | |||||||
Common stock issued | 307,820 | 285,282 | ||||||
Common stock outstanding | 307,820 | 285,282 | ||||||
Warrant to purchase common stock shares | 179,345 | |||||||
Warrant to purchase common stock per shares amount | $ 133 | |||||||
Granted share for future stock compensation | 9,957 | |||||||
Underwriting discounts and commissions and expenses | $ 4,867 | |||||||
Initial Public Offering [Member] | ||||||||
Stock Option Plan | 15,000 | 50,000 | ||||||
Series A Convertible Preferred Stocks [Member] | ||||||||
Aggregate offering price | $ 1,146,893 | |||||||
Commission rate | 3.50% | |||||||
Par value per share | $ 0.0001 | $ 0.0001 | ||||||
Common stock shares sold | 16,538 | |||||||
Gross proceeds | $ 139,060 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
LEASES | ||
Operating lease assets | $ 4 | $ 34 |
Operating lease liabilities | $ 9 | $ 34 |
LEASES (Details 1)
LEASES (Details 1) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
LEASES | ||
2024 (remaining) | $ 9 | |
Total lease payments | 9 | |
Total operating lease liabilities | $ 9 | $ 34 |
LEASES (Details 2)
LEASES (Details 2) | 3 Months Ended |
Mar. 31, 2024 | |
LEASES | |
Remaining lease term (months) | 1 month |
Discount rate | 17.50% |
LEASES (Details Narrative)
LEASES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
LEASES | ||
Lease payments per month during the period | $ 21,860 | |
Total operating lease cost | 73,445 | $ 75,170 |
Short term lease liabilities | 8,791 | 34,415 |
Short-term leases | $ 46,685 | $ 48,410 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Feb. 04, 2024 | Jan. 25, 2024 | |
Payment of products | $ 806,947 | ||
Michael James [Member] | |||
Separation Agreement terms, description | eligible to earn milestone payments under the Separation Agreement in an aggregate amount up to $300,000 if he completes certain transitional deliverables for the Company. | ||
Salary | $ 300,000 | ||
Restricted stock award with a fair value | $ 25,000 | ||
Payment of products | $ 806,947 | ||
Payment pursuant to Agreement | $ 329,290 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net Income (Loss) | $ (3,977) | $ (2,879) |
Going Concern [Member] | ||
Net Income (Loss) | (4,000) | |
Cash balance | $ 400 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - Cedar [Member] | May 07, 2024 USD ($) |
Future accounts receivable | $ 994,000 |
Purchase price | $ 700,000 |
Merchant cash advance agreement terms, description | Cedar is expected to withdraw $65,000 a week directly from the Company’s bank account until the $2,485,000 due to Cedar under the Restated Agreement is paid in full. Except as amended by the Restated Agreement, the remaining terms of the Cedar Agreement remain in full force and effect. |
Aggregate fees and expenses | $ 87,500 |
Additional net funds | 544,250 |
Total financing with Cedar in accounts receivable | 2,485,000 |
Accounts receivable sold for net funds | $ 1,544,250 |
Funds payment percentage required | 35% |