Edible Garden AG (EDBL) enters inducement letter agreement

Edible Garden AG (NASDAQ: EDBL) disclosed:

On May 21, 2025, 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 (i) Class A warrants to purchase 333,200 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) issued on September 30, 2024 (the “September 2024 Warrants”), (ii) Class A warrants to purchase 333,200 shares of Common Stock issued on December 23, 2024 (the “December 2024 Class A Warrants”) and (iii) Class B warrants to purchase 333,200 shares of Common Stock issued on December 23, 2024 (the “December 2024 Class B Warrants” and collectively with the September 2024 Warrants and the December 2024 Class A Warrants, the “Existing Warrants”).The Existing Warrants had original exercise prices of $9.00 per share, and became exercisable immediately following issuance.

The issuance of the shares of Common Stock upon exercise of the September 2024 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. The issuance of the shares of Common Stock upon exercise of the December 2024 Class A Warrants and December 2024 Class B Warrants is registered pursuant to a registration statement on Form S-3, as amended (File No. 333-284360), which was declared effective by the SEC on January 31, 2025.

Pursuant to the Inducement Letter Agreement, the Holder agreed to exercise the Existing Warrants for cash at a reduced exercise price of $3.50 per share in consideration for the Company’s agreement to issue new unregistered five-year warrants to purchase up to an aggregate of 1,999,200 shares of Common Stock at an exercise price of $3.50 per share (the “New Warrants”). The New Warrants will be immediately exercisable upon issuance and have a term of five years from the initial exercise 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 15 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 6.5% 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 $3.5 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 Warrant and the Form of Inducement Letter Agreement, copies of which are incorporated by reference as Exhibits 4.1 and 10.1, respectively, to this Current Report on Form 8-K (this “Report”) and are incorporated by reference herein.

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