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In a move aimed at restructuring its capital, Edible Garden AG Inc (NASDAQ:EDBL), a company specializing in agricultural crop production with annual revenues of $14.07 million, has received shareholder approval for a reverse stock split. The company's stock, currently trading at $0.27, has experienced significant volatility, having declined 96.95% over the past year. The decision was made during a special meeting held on Monday, where a majority of the stockholders voted in favor of the amendment to the company's Certificate of Incorporation.
The approved reverse stock split will see the company's outstanding common stock consolidated in a range between one-for-five and one-for-twenty-five shares, at the discretion of the board of directors. Out of the 8,514,536 shares represented at the meeting, 7,846,246 voted for the proposal, with 641,815 against and 26,475 abstaining.
Additionally, stockholders also voted on a proposal to adjourn the special meeting to a later date if necessary, which would allow for the solicitation of additional votes in favor of the reverse stock split if the initial count was insufficient. This proposal received 6,967,259 votes for, 1,529,966 against, and 17,311 abstentions. However, the approval of the reverse stock split negated the need for an adjournment.
Edible Garden AG Inc, headquartered in Belvidere, New Jersey, is known for its focus on sustainable agricultural practices and has been listed on The Nasdaq Stock Market LLC. According to InvestingPro analysis, while the company holds more cash than debt on its balance sheet, it's currently experiencing rapid cash burn with negative EBITDA of $6.99 million. The company's management believes that the reverse stock split could potentially improve the marketability and liquidity of its common stock. For deeper insights into Edible Garden's financial health and future prospects, investors can access comprehensive analysis through InvestingPro's detailed research reports.
The voting results indicate a strategic step by the company as it seeks to optimize its financial structure. With a current market capitalization of just $5.65 million and trading well below its 52-week high of $12.47, InvestingPro analysis suggests the stock is currently undervalued based on its Fair Value model. The specific ratio within the approved range for the reverse stock split has not been announced, with the final decision resting with the board of directors.
This news is based on a recent SEC filing by Edible Garden AG Inc.
In other recent news, Edible Garden AG reported a mixed performance in its third quarter of 2024. Despite a decrease in quarterly revenue to $2.6 million from $3 million year-over-year, the company experienced a gross profit increase of $687,000, with gross profit margin growing to 27.1%. Additionally, Edible Garden secured $1.66 million in funding via a merchant cash advance agreement with Cedar Advance LLC, selling $2.485 million of its future accounts receivable for an upfront sum, crucial for its cash flow management.
The company also raised $5.65 million through a September S1 offering, which was used to pay down $3.2 million in debt and invest in working capital. In partnership developments, Edible Garden formed alliances with Walmart (NYSE:WMT) and launched new products like Hydro Basil and Vitamin Whey on Walmart Marketplace. The company also introduced the Kick Sports Nutrition line and saw sales growth in the Pulp Flavors line.
These are recent developments indicating the active management of Edible Garden's financial obligations and strategic growth. The company anticipates a strong fourth quarter, with the potential to be one of the strongest in its history. It also expects substantial growth in the Sports Nutrition line in 2025, with new product launches and major retailer partnerships, according to analysis by InvestingPro.
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