UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 23, 2024
EDIBLE GARDEN AG INCORPORATED |
(Exact name of registrant as specified in its charter) |
Delaware | | 001-41371 | | 85-0558704 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
283 County Road 519, Belvidere, New Jersey | | 07823 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (908) 750-3953
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, par value $0.0001 per share | EDBL | The Nasdaq Stock Market LLC |
Warrants to purchase Common Stock | EDBLW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On December 23, 2024, Edible Garden AG Incorporated, a Delaware corporation (the “Company”), entered into an inducement letter agreement (collectively, the “Inducement Letter Agreement”) with an institutional investor and existing holder (the “Holder”) of existing Class B warrants (the “Existing Warrants”) to purchase 8,330,000 shares of the Company’s common stock, $0.0001 par value (the “Common Stock”). The Existing Warrants were originally issued on September 30, 2024, with an exercise price of $0.36 per share, and became exercisable immediately following issuance.
The issuance of the shares of Common Stock upon exercise of the Existing Warrants is registered pursuant to a registration statement on Form S-1, as amended (File No. 333-281957), which was declared effective by the Securities and Exchange Commission (the “SEC”) on September 27, 2024.
Pursuant to the Inducement Letter Agreement, the Holder agreed to exercise the Existing Warrants for cash at the exercise price of $0.36 per share in consideration for the Company’s agreement to issue: (i) new unregistered five-year warrants to purchase up to an aggregate of 8,330,000 shares of Common Stock at an exercise price of $0.36 per share (the “New Class A Warrants”), and (ii) new unregistered eighteen-month warrants to purchase up to an aggregate of 8,330,000 shares of Common Stock at an exercise price of $0.36 per share (the “New Class B Warrants,” and together with the New Class A Warrants, the “New Warrants”). The New Class A Warrants will be immediately exercisable upon issuance and have a term of five years from the issuance date, and the New Class B Warrants will be immediately exercisable and have a term of eighteen months from the issuance date.
The Company has agreed to file a registration statement on Form S-3 (or other appropriate form if it is not eligible to utilize Form S-3) providing for the resale of the shares of Common Stock issuable upon the exercise of the New Warrants (the “Resale Registration Statement”) within 30 calendar days following the date of the Inducement Letter Agreement, and to use best efforts to cause the Resale Registration Statement to become effective within 45 calendar days from the date of the Inducement Letter Agreement (or within 90 calendar days in case of “full review” of the Resale Registration Statement by the SEC). Pursuant to the Inducement Letter Agreement, the Company agreed not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of any Common Stock or Common Stock equivalents or file any registration statement or any amendment or supplement to any existing registration statement, subject to certain exceptions, for a period of five calendar days after the closing under the Inducement Letter Agreement. The Company is also prohibited from entering into any agreement to issue Common Stock or Common Stock equivalents involving a Variable Rate Transaction (as defined in the Inducement Letter Agreements, subject to certain exceptions, for 30 calendar days after the closing under the Inducement Letter Agreement.
Maxim Group LLC (“Maxim”) served as the Company’s exclusive financial advisor for this transaction. Maxim will receive an aggregate cash fee equal to 7.0% of the total proceeds received from the exercise of the Existing Warrants exercised in connection with the Inducement Letter Agreement. The Company also agreed to pay Maxim for reasonable accountable expenses.
The aggregate gross proceeds to the Company from the exercise of the Existing Warrants will be approximately $3.0 million, before deducting Maxim’s fees and other offering expenses payable by the Company.
The New Warrants and the shares of Common Stock issuable thereunder will be sold and issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and/or Rule 506 promulgated under the Securities Act.
The foregoing is only a summary of the New Warrants and the Inducement Letter Agreement and does not purport to be a complete description thereof. Such descriptions are qualified in their entirety by reference to the Form of Class A Warrant, Form of Class B Warrant, and the Form of Inducement Letter Agreement, copies of which are incorporated by reference as Exhibits 4.1, 4.2, and 10.1, respectively, to this Current Report on Form 8-K (this “Report”) and are incorporated by reference herein.
Forward-Looking Statements and Disclaimer
This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not statements of historical fact and thus are subject to risks, uncertainties and assumptions. Forward-looking statements are identified by words such as “anticipate,” “expect,” “should,” “will” and other similar words. All statements addressing events or developments that Company expects or anticipates will occur in the future, including but not limited to statements relating to the transactions contemplated by the Inducement Letter Agreement, are forward-looking statements. Forward-looking statements should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties include changes as a result of market conditions or for other reasons, other risks and uncertainties described in the Company’s most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and other documents filed with the SEC. Should one or more of these risks or uncertainties materialize, or should any of the Company’s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on the Company’s forward-looking statements, which speak only as of the date they are made. Except as required by law, the Company disclaims any obligation to update, correct or publicly announce any revisions to any of the forward-looking statements contained in this Report, whether as the result of new information, future events or otherwise.
Item 3.02. Unregistered Sales of Equity Securities.
To the extent required by Item 3.02 of Form 8-K, the information contained in Item 1.01 of this Report is incorporated herein by reference.
Item 8.01. Other Events.
On December 23, 2024, the Company issued a press release announcing its entry into the Inducement Letter Agreement. A copy of the press release is attached hereto as Exhibit 99.1 to this Report.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EDIBLE GARDEN AG INCORPORATED | |
| | | |
Date: December 23, 2024 | By: | /s/ James E. Kras | |
| Name: | James E. Kras | |
| Title: | President and Chief Executive Officer | |
