Edible Garden AG Inc: Form 10-Q for the period ended Jun 30, 2026

FORWARD-LOOKING STATEMENTS

In addition to historical information, this Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which provides a “safe harbor” for forward-looking statements made by us. All statements, other than statements of historical facts, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends, and other information, may be forward-looking statements. Words such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “future,” “intend,” “may,” “might,” “potential,” “projections,” “should,” “will,” “would,” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that our expectations, beliefs, estimates, and projections will occur or can be achieved. Actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or anticipated results, including:

• our history of losses and our ability to continue as a going concern;
• our ability to obtain additional financing to fund our operations;
• our ability to maintain the listing of our common stock on the Nasdaq Stock Market LLC (“Nasdaq”) and comply with Nasdaq’s listing standards;
• the departure of members of our management team;
• our market opportunity;
• our ability to effectively manage our growth;
• our ability to complete and integrate business acquisitions;
• the effects of increased competition as well as innovations by new and existing competitors in our market;
• our ability to retain our existing customers and to increase our customer base;
• the future growth of the indoor agriculture industry and demands of our customers;
• our ability to maintain, or strengthen awareness of, our brand;
• our ability to expand the product lines we offer;
• our ability to maintain, protect, and enhance our intellectual property;
• future revenue, hiring plans, expenses and capital expenditures;
• our ability to pay our debts as they come due;
• our ability to comply with new or modified laws and regulations that currently apply or become applicable to our business;
• our ability to recruit and retain key employees and management personnel;
• our financial performance and capital requirements; and
• the potential lack of liquidity and trading of our securities.

The following discussion should be read in conjunction with our financial statements and notes thereto included elsewhere in this report and our other reports filed with the Securities and Exchange Commission (“SEC”).

26

Table of Contents

OVERVIEW

We are a controlled environment agriculture ("CEA") farming company. We use traditional agricultural growing techniques together with technology to grow fresh, organic food sustainably and safely while improving traceability. We operate glass, hydroponic, and vertical greenhouse structures that enable us to grow organic herbs consistently year-round while using less land, less energy, and less water than conventional agriculture. In our hydroponic greenhouse, we grow plants without soil. Instead of planting one row of plants in the ground, by using a vertical growing system, we can grow many towers of plants in the same area by planting up instead of planting across. Growing these products sustainably means that we avoid depleting natural resources in order to maintain an ecological balance, such as by renewing, reusing and recycling materials in order to lower the overall one-time use of materials. Our facilities utilize "closed loop" irrigation systems that recollect and reuse drain water—including water recycled through reverse osmosis—reducing overall water consumption and helping conserve natural resources. Our advanced systems are also designed to help mitigate contamination from harmful pathogens, including salmonella, e-coli and others.

Our operations are supported by GreenThumb®, our proprietary patented greenhouse management and demand-planning software (U.S. Patent Nos. 11,158,006 B1; 11,410,249 B2; and 11,830,088 B2). GreenThumb tracks plants through all stages of production and distribution, supporting quality control, traceability, fill-rate management, and logistics optimization, including maximizing truckload efficiency to reduce greenhouse gas emissions. We believe GreenThumb is a meaningful competitive differentiator and an important component of our Zero-Waste Inspired® model.

As of June 30, 2026, we offer more than 140 stock keeping units ("SKUs") spanning two principal product segments: (i) fresh produce, including cut herbs, hydroponic basil, potted herbs, and wheatgrass; and (ii) shelf-stable and refrigerated consumer packaged goods, including sports nutrition and nutraceuticals (Kick.™ and Vitamin Whey®/Vitamin Way®), fermented gourmet sauces and chili-based products (Pulp®), and functional fermented pickles and sauerkraut (Pickle Party™). We also supply products under private label arrangements to major retail customers. We have leveraged our brand recognition to offer co-manufactured consumer-packaged goods across protein, fermented foods, and flavoring categories in addition to our core fresh produce business. Our tagline "Simply Local, Simply Fresh" reflects our strategy of growing products in regional communities close to the retail locations where they are sold, extending shelf life and supporting local brand awareness.

Our products are available in over 6,000 retail locations across the United States, the Caribbean, and South America. We operate vertically integrated greenhouses and processing facilities at Edible Garden Heartland in Grand Rapids, Michigan; Edible Garden Prairie Hills in Webster City, Iowa; and our headquarters at Edible Garden Belvidere in Belvidere, New Jersey. We also partner with a network of contract growers strategically located near major U.S. population centers.

We hold food safety certifications from Primus GFS (a Global Food Safety Initiative ("GFSI")-accredited program), USDA Organic certification for applicable products, and non-GMO verification from the non-GMO Project for select SKUs. We are licensed under the Perishable Agricultural Commodities Act ("PACA") and voluntarily comply with Hazard Analysis Critical Control Point ("HACCP") principles established by the U.S. Food and Drug Administration.

We have a history of operating losses since inception and expect to incur additional near-term losses. Our auditors have issued an opinion expressing substantial doubt about our ability to continue as a going concern. See "Risk Factors" and "Management's Discussion and Analysis — Liquidity and Capital Resources" for additional discussion of these matters.

Since our initial public offering, our primary business strategy has been focused on the production and sale of fresh, locally grown, USDA Organic produce through a vertically integrated CEA model. During the fiscal year ended December 31, 2025, and continuing into 2026, we began executing a material expansion and evolution of that strategy.

Specifically, we are transitioning our Edible Garden Prairie Hills facility in Webster City, Iowa into a dedicated ready-to-drink ("RTD") and clean nutrition manufacturing hub. This initiative represents a significant broadening of our business from primarily fresh, perishable produce into what we expect will be higher-margin, shelf-stable beverage and nutrition categories. We have characterized this evolution as the development of a vertically integrated domestic clean-label nutrition platform that combines our existing controlled-environment agriculture capabilities with scalable aseptic processing capacity and differentiated branded products across sports nutrition, adult and children's performance nutrition, and GLP-1 supportive categories.

This strategic shift, which we refer to as our "Farm-to-Formula®" strategy, connects our CEA-sourced ingredients with advanced research and development and precision formulation capabilities to deliver finished functional RTD beverages at commercial scale. This represents a material change from our previously disclosed strategy of focusing principally on fresh produce, and investors should consider the risks and opportunities associated with this expansion when evaluating our business.

27

Table of Contents

On March 4, 2026, we entered into two Interim Order Agreements (the "IOAs") with Tetra Pak Inc. ("Tetra Pak"), a global leader in food processing and packaging solutions, to commence engineering services and preliminary procurement activities for the Webster City, Iowa production project (the "Project"). The IOAs cover both processing equipment and aseptic packaging systems and are intended as the initial step toward a definitive final supply agreement governing the full scope of equipment installation and integration.

The planned facility will utilize Tetra Pak's Tetra Prisma® Aseptic 330 Edge package—a format made primarily from renewable, plant-based materials that is designed to be recyclable—together with the Tetra Pak® A3/Speed filling platform. These systems are expected to extend product shelf life without refrigeration or preservatives prior to opening, support ambient distribution, maintain clean-label standards, and reduce overall supply chain costs and food waste.

Phase 1 production at the Webster City facility is anticipated to begin in 2027, subject to the execution of a final supply agreement with Tetra Pak, completion of engineering and installation, regulatory approvals, and adequate capital availability. There is no assurance that a final agreement will be executed, that the facility will be completed on the anticipated timeline, or that Phase 1 production will commence as planned. This initiative is in the early development stage, and investors should not place undue reliance on timing or scale projections, or our ability to complete the Project.

The Midwest facility encompasses more than 200,000 square feet of food-grade manufacturing space with warehousing and logistics infrastructure, and upon completion of the RTD buildout is expected to support aseptic and ultra-filtered beverage production across protein, plant-based, dairy, and functional categories. The Company intends for the facility to serve as a scalable innovation platform supporting product development and revenue diversification beyond fresh perishables.

RECENT DEVELOPMENTS

Reverse Stock Split

On July 8, 2026, we filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-45 reverse stock split of its common stock (the “Reverse Stock Split”), effective as of 12:01 a.m. Eastern Time on July 13, 2026. As a result of the Reverse Stock Split, every 45 shares of our outstanding common stock were combined into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split; any fractional shares resulting from the Reverse Stock Split were rounded up to the nearest whole share. Proportionate adjustments were made to the per share exercise price and the number of shares issuable upon the exercise of outstanding warrants and to all then-outstanding awards under our equity incentive plan. The Reverse Stock Split did not change the par value of the common stock or the total number of authorized shares. All share and per share amounts in these condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the Reverse Stock Split, unless otherwise noted.

The Reverse Stock Split was implemented, in part, to help regain compliance with Nasdaq’s continued listing requirements.

Nasdaq Compliance

On May 27, 2026, we received a letter from the Listing Qualifications Department (the “Staff”) of Nasdaq indicating that, based upon the closing bid price of our common stock for at least 30 consecutive business days, we no longer met Nasdaq Listing Rule 5550(a)(2), which requires listed companies to maintain a minimum bid price of at least $1 per share (the “Bid Price Rule”). Under Nasdaq Listing Rule 5810(c)(3)(A)(iv), because we had effected a reverse stock split over the prior one-year period or have effected one or more reverse stock splits in the last two years with a cumulative ratio greater than 250 shares to 1, we were not eligible for any compliance period to regain compliance with the Bid Price Rule. On June 3, 2026, we timely submitted a request for a hearing before a Nasdaq Hearings Panel (the “Panel”), which was scheduled for July 9, 2026. On July 27, 2026, we received written notification from Nasdaq that the Panel granted us an extension until August 15, 2026 to regain compliance with Bid Price Rule. We believe we have regained compliance with the Bid Price Rule as of July 27, 2026.

28

Table of Contents

Streeterville Transactions

During the six months ended June 30, 2026, we entered into exchange agreements (the “Exchange Agreements”) with Streeterville Capital, LLC, a Utah limited liability company (“Streeterville”) pursuant to which we agreed to exchange an aggregate of 9,781 shares of our Series B Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), for a total of 511,768 shares of our common stock, par value $0.0001 per share (“Exchange Shares”). The Preferred Stock had an aggregate stated value of $9.7 million. The number of Exchange Shares issued under the Exchange Agreements was determined by dividing the Stated Value by the Nasdaq Minimum Price of our common stock as reported on the Nasdaq Capital Market on the day immediately preceding the date the Exchange Agreements were entered into or a value attributed to the Exchange Shares as determined by the Company and Streeterville. The issuance of the Exchange Shares pursuant to the Exchange Agreements were not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were conducted pursuant to the exemption provided in Section 3(a)(9) under the Securities Act.

Subsequent to June 30, 2026, we entered into additional Exchange Agreements with Streeterville pursuant to which we agreed to exchange an aggregate of 4,460 shares of the Preferred Stock with an aggregate Stated Value of $4.5 million for a total of approximately 1,394,553 shares of common stock.

Meijer Agreement

On July 28, 2026, we entered into a purchase agreement with Meijer Distribution, Inc. (the “Buyer”) pursuant to which we will supply Buyer-branded products to the Buyer (the “2027 Agreement”) beginning in January 2027. The Agreement replaces the agreements between us and the Buyer scheduled to expire December 31, 2026. Under the 2027 Agreement, we will sell hydroponic, potted, and fresh cut herbs to the Buyer according to per-unit prices set in advance under the 2027 Agreement by us and the Buyer. The Buyer’s purchases will be in quantities and according to delivery schedules requested by the Buyer. Under the 2027 Agreement, we and the Buyer will renegotiate the prices for each unit annually. Once set, the pricing terms will remain fixed for the remainder of the year, subject to price adjustments as a result of duties, tariffs or other governmental actions that are supported by our documentation and approved by the Buyer. The 2027 Agreement will become effective January 1, 2027 and will expire on December 31, 2028. The Buyer may terminate the 2027 Agreement (i) without cause upon 60 days’ prior notice, (ii) for cause upon 30 days’ prior written notice of disagreement regarding tariff-related price increases, and (iii) immediately if we do not provide the Buyer with products that meet the Buyer’s quality standards. Either party may terminate the 2027 Agreement for cause after a 15-day cure period for resolving a breach of the 2027 Agreement.

Equity Distribution Agreement

On August 11, 2026, the Company entered into an Equity Distribution Agreement (the “2026 EDA”) with Maxim as sales agent, pursuant to which the Company may, from time to time, issue and sell shares of its common stock through Maxim in an at-the-market offering for an aggregate offering price of up to $7,195,548. Under the terms of the 2026 EDA, Maxim may sell the shares at market prices by any method that is deemed to be an “at-the-market offering” as defined in Rule 415 under the Securities Act. The offering of shares of our common stock pursuant to the 2026 EDA will terminate upon the earliest of (i) August 11, 2027, (ii) the sale of all Shares provided for in the prospectus supplement related to this offering, and (iii) the termination of the EDA by written notice of the Company or Maxim.

29

Table of Contents

CRITICAL ACCOUNTING ESTIMATES

The preparation of the unaudited consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. Management’s estimates are based on historical experience, the relevant information available at the end of each period, and their judgment. Although management believes the judgment applied in preparing estimates is reasonable based on circumstances and information known at the time, actual results could differ materially from these estimates under different assumptions or market conditions.

The most significant accounting estimates involve a high degree of judgment or complexity. Management believes the estimates and judgments most critical to the preparation of our condensed consolidated financial statements and to the understanding of our reported financial results include allowance for doubtful accounts. The following are the accounting estimates most critical to the preparation of our condensed consolidated financial statements.

Revenue Recognition

Revenues are recognized when control of the promised goods or services is transferred our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

We do 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.

Property, Equipment and Leasehold Improvements

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. We continually monitor 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 Accounting Standards Codification (“ASC”) 360, “Property, Plant, and Equipment.” When such events or changes in circumstances are present, we assess the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the fair value of the assets. See Note 4, “Property, Equipment and Leasehold Improvements, Net” for further information.

30

Table of Contents

RESULTS OF OPERATIONS

COMPARISON OF THE THREE MONTHS ENDED JUNE 30, 2026 AND 2025

Revenue

Revenue was $3.6 million for the three months ended June 30, 2026, compared to $3.1 million for the three months ended June 30, 2025. The increase in revenue of $404 thousand, or 12.8%, is primarily attributable to continued growth in our cut herb portfolio across our retail client base, which grew $532 thousand, or 50.5%, and increased to approximately 42% of gross sales from approximately 30% in the prior-year period.

Operating Expenses

Operating expenses were $6.7 million for the three months ended June 30, 2026, compared to $6.7 million for the three months ended June 30, 2025. Operating expenses decreased $12 thousand, or 0.2%, primarily due to a $859 thousand (21.5%) decrease in selling, general and administrative expenses, reflecting non-recurring professional fees incurred in the prior-year period in connection with certain corporate transactions, partially offset by a $443 thousand (17.6%) increase in cost of goods sold, driven by increased sales and a portfolio shift to cut herbs, which is primarily sourced from third party growers at higher cost, and a $420 thousand (179.5%) increase in depreciation and amortization, reflecting a larger depreciable asset base related to assets acquired from Natural Shrimp in May 2025.

31

Table of Contents

Loss from operations

Loss from operations was $3.2 million for the three months ended June 30, 2026, compared to $3.6 million for the three months ended June 30, 2025. The decrease in the loss from operations was driven by an increase in revenue and a decrease in operating expenses, primarily lower selling, general and administrative expenses, partially offset by higher cost of goods sold and depreciation expense

Interest expense

Interest expense was $163 thousand for the three months ended June 30, 2026, compared to $389 thousand for the three months ended June 30, 2025. Interest expense decreased $226 thousand, or 58.1%, even as total debt outstanding increased, as higher-cost short-term debt was repaid and replaced with lower-cost Streeterville financing at rates of 5.0% to 8.0% per annum.

Net loss

Net loss was $3.3 million for the three months ended June 30, 2026, compared to a net loss of $4.0 million for the three months ended June 30, 2025. The reasons for the decrease in net loss are explained above.

COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025

Revenue

Revenue was $6.9 million for the six months ended June 30, 2026, compared to $5.9 million for the six months ended June 30, 2025. The increase in revenue of $1.0 million, or 17.5%, is primarily attributable to continued growth in our cut herb portfolio across our retail client base, which grew $1.1 million, or 49.3%, and increased to approximately 45% of gross sales from approximately 35% in the prior-year period.

32

Table of Contents

Operating Expenses

Operating expenses were $16.7 million for the six months ended June 30, 2026, compared to $12.4 million for the six months ended June 30, 2025, an increase of $4.4 million, or 35.2%, primarily due to a $2.2 million (42.8%) increase in cost of goods sold, driven by increased sales and a portfolio shift to cut herbs, which is primarily sourced from third party growers at higher cost, and a $2.9 million (600.8%) increase in depreciation and amortization from accelerated depreciation of certain fixed assets related to the Company's pivot to RTD clean nutrition manufacturing. These increases were partially offset by a $721 thousand (10.7%) decrease in selling, general and administrative expenses, primarily due to a $667 thousand decrease in legal fees, a $473 thousand decrease in audit and accounting fees, and a $262 thousand decrease in bad debt expense, reflecting non-recurring professional fees incurred in the prior-year period in connection with certain corporate transactions, partially offset by higher salaries and wages and rent expense.

Loss from operations

Loss from operations was $9.9 million for the six months ended June 30, 2026, compared to $6.5 million for the six months ended June 30, 2025.The increase in the loss from operations was driven by higher overall expenses across cost of goods sold and depreciation expense, partially offset by an increase in revenue.

Interest expense

Interest expense was $313 thousand for the six months ended June 30, 2026, compared to $829 thousand for the six months ended June 30, 2025. Interest expense decreased $516 thousand, or 62.2%, even as total debt outstanding increased, as higher-cost short-term debt was repaid and replaced with lower-cost Streeterville financing at rates of 5.0% to 8.0% per annum.

Income tax benefit

Income tax benefit was $3.4 million for the six months ended June 30, 2026. We transferred state tax benefit to a third-party buyer in exchange for a cash consideration and recorded a gain driven primarily due to valuation allowance release.

Net loss

Net loss was $6.9 million for the six months ended June 30, 2026, compared to a net loss of $7.4 million for the six months ended June 30, 2025. The reasons for the decrease in net loss are explained above.

LIQUIDITY AND CAPITAL RESOURCES

Going Concern Considerations

We have incurred significant losses since our inception. We recognized net losses of approximately $6.9 million during the six months ended June 30, 2026 and $17.3 million during the year ended December 31, 2025. We expect our capital expenses and operational expenses to increase in the future due to expected increased sales and marketing expenses, operational costs, and general and administrative costs. Therefore, we believe our operating losses will continue or even increase at least through the near term.

The risks and uncertainties surrounding our ability to continue our business with limited capital resources raises substantial doubt as to our ability to continue as a going concern for twelve months from the issuance of these financial statements. To date, we have financed our operations with the proceeds from debt financings, public and private securities offerings, and operations, among other sources. If we are unable to raise additional capital, we believe that our existing cash will fund operations into the third quarter of 2026 and will not be sufficient to fund our operations through the next twelve months beyond the date of the issuance of our consolidated financial statements. Our operations have consumed substantial amounts of cash since inception. The net cash provided by operating activities was $0.9 million and the net cash used in operating activities was $6.8 million during the six months ended June 30, 2026 and 2025, respectively. Our financial statements have been prepared on a “going concern” basis. However, substantial doubt exists regarding our ability to continue as a going concern for the next twelve months. Our consolidated financial statements do not include any adjustments that might result if we are unable to continue as a going concern. If we are unable to continue as a going concern, holders of our securities might lose their entire investment. These factors, among others, may make it difficult to raise any additional capital and may cause us to be unable to continue to operate our business.

33

Table of Contents

There is no assurance that we will ever be profitable or that debt or equity financing will be available to us in the amounts, on terms, and at times deemed acceptable to us, if at all. The issuance of additional equity or equity-linked securities by us would result in significant dilution of the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business as planned and as a result may be required to scale back or cease operations, which could cause our stockholders to lose some or all of their investment in us. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern.

Liquidity

Our primary liquidity requirements are for working capital, continued investments in capital expenditures, repayment of indebtedness, and other strategic investments. Although income taxes are not currently a significant use of funds, after the benefits of our net operating loss carryforwards are fully recognized, they could become a material use of funds, depending on our future profitability and future tax rates. Our liquidity needs have been met primarily through public equity offerings, term loan borrowings, accounts receivable financing, convertible notes, and related party loans.

As of June 30, 2026 and December 31, 2025, we had $0.7 million and $1.1 million in cash and cash equivalents available, respectively. During the six months ended June 30, 2026, cash provided by operating activities was $0.9 million. As of June 30, 2026 and December 31, 2025, we had $14.2 million and $1.9 million of total gross debt outstanding, respectively. As of June 30, 2026, we had cash available for operations of $0.7 million, after excluding $10.0 million of restricted cash securing the Streeterville B Note. Subsequent to June 30, 2026, the Company also entered into the 2026 EDA, providing access to up to $7.2 million of additional capital through an at-the-market offering, which management believes provides an additional source of liquidity. See Note 14, “Subsequent Events,” for further discussion.

We may not be able to access the capital markets in the future on commercially acceptable terms or at all. Our ability to fund future operating expenses and capital expenditures and our ability to meet future debt service obligations or refinance our indebtedness will depend on our future operating performance, which will be affected by general economic, financial and other factors beyond our control, including those described under “Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on March 31, 2026.

Capital Resources

For the six months ended June 30, 2026, we incurred a net loss of $6.9 million. During the six months ended June 30, 2026, we had operating cash flows of $0.9 million, after excluding $10.0 million of restricted cash securing the Streeterville B Note.

In January 2026, we completed the sale of certain New Jersey state net operating loss carryforwards under the New Jersey Economic Development Authority's Technology Business Tax Certificate Transfer Program, which had resulted in a deferred tax asset of approximately $3.4 million, in exchange for gross proceeds of approximately $3.1 million, resulting in net cash proceeds of approximately $3.0 million after transaction-related costs of approximately $0.1 million.

On March 3, 2026, we entered into a Note Purchase Agreement with Streeterville Capital, LLC ("Streeterville"), pursuant to which we issued to Streeterville a secured promissory note in the principal amount of $1.6 million (the "Streeterville Note"), which included an original issue discount of $120 thousand and reimbursement of Streeterville's transaction expenses of $5 thousand, for a purchase price of $1.5 million. The Streeterville Note bears interest at a rate of 8.0% per annum and matures 13 months after its issuance date.

34

Table of Contents

On June 12, 2026, the Company entered into a Notes Purchase Agreement with Streeterville pursuant to which it issued (i) a Promissory Note A-1 with an original principal amount of $2.17 million and (ii) a Secured Promissory Note B with an original principal amount of $10.0 million. The notes mature eighteen months from issuance. The A-1 Note bears interest at 8% per annum, while the B Note bears interest at 5% per annum.

Subsequent to June 30, 2026, the Company entered into the 2026 EDA, providing access to up to $7.2 million of additional capital through an at-the-market offering under its effective shelf registration statement. See Note 14, “Subsequent Events,” for further discussion.

We expect to continue to incur losses and negative cash flows from operations for the foreseeable future. We may seek to raise additional capital through equity or debt financings, sales of assets, or other strategic alternatives. There can be no assurance that any additional financing will be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly reduce our operations or delay, scale back or discontinue the development of one or more of our products or operations.

For more information on our outstanding debt as of June 30, 2026 and December 31, 2025, see Note 7 “Notes Payable.”

Cash Flows

Operating activities

During the six months ended June 30, 2026, cash provided by operating activities was $0.9 million. During the six months ended June 30, 2025, cash used for operating activities was $6.8 million. For the six months ended June 30, 2026, the net loss of $7.0 million was offset by depreciation and amortization of $3.4 million, amortization of operating lease right-of-use assets of $608 thousand, amortization of debt discount of $178 thousand, and a net working capital source of $3.6 million.

Investing activities

During the six months ended June 30, 2026 and 2025, cash used in investing activities was $3.4 million and $122 thousand, respectively. The increase is related to the cash flow impact from higher capital expenditures related to the Natural Shrimp asset purchase.

Financing activities

During the six months ended June 30, 2026 and 2025, cash provided by financing activities was $12.0 million and $6.2 million, respectively. The increase is driven by $13.5 million of proceeds from debt; $1.5 million from the Streeterville Note (March 2026) and $12.0 million from the Streeterville Notes A-1 and B (June 2026). The increase was offset by $1.5 million of debt repayments and $22 thousand of lease payments.

35

Table of Contents

Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026 pursuant to Rule 13a-15 under the Exchange Act. Based on that evaluation, our Chief Executive Officer and Interim Chief Financial Officer have concluded that, as of June 30, 2026, our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of June 30, 2026, at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

36

Table of Contents

There can be no assurance that our shares will continue to be listed on Nasdaq, which would affect our common stock’s liquidity and reduce our ability to raise capital.

On July 22, 2026, the SEC approved a new continued listing requirement codified as Nasdaq Listing Rule 5550(a)(6) that requires companies to maintain a market value of listed securities of at least $5 million (the “MVLS Requirement”). On July 29, 2026, the SEC provided notice that the order approving the MVLS Requirement was stayed pending a petition for review of the action. As of June 30, 2026, we are not in compliance with the MVLS Requirement if it were to come into effect. Under Nasdaq Listing Rule 5810(c)(1), if the MVLS Requirement comes into effect and we fail to meet the MVLS Requirement for 30 consecutive business days, our securities will be suspended and immediately delisted from the Nasdaq Capital Market, even if we are appealing a delisting determination to a Panel, and the Panel will have limited discretion to reverse the delisting determination if it was issued in error or grant an exception for up to 180 days for us to demonstrate compliance with all requirements for initial listing on Nasdaq. Additionally, pursuant to the Panel’s decision relating to our delisting appeal, the Panel will maintain jurisdiction over our listing status until November 23, 2026, and if we become non-compliant with any other listing rule, aside from the Bid Price Rule, during this time period, we will be allowed seven calendar days to advise the Panel on our plan to cure the listing deficiency, and the Panel will, at that time, determine whether to grant us an exception to cure the deficiency or delist our securities from Nasdaq. This includes the MVLS Requirement.

We cannot assure you that we will be able to regain compliance with the MVLS Requirement and maintain compliance with Nasdaq’s other continued listing standards. Accordingly, our common stock and certain warrants could be delisted from Nasdaq. We and holders of our securities could be materially adversely impacted if our securities are delisted from Nasdaq. In particular:

• we may be unable to raise equity capital on acceptable terms or at all;
• we may lose the confidence of our business partners, which would jeopardize our ability to continue our business as currently conducted;
• the price of our common stock will likely decrease as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws;
• holders may be unable to sell or purchase our securities when they wish to do so;
• we may become subject to stockholder litigation;
• we may lose the interest of institutional investors in our common stock;
• we may lose media and analyst coverage;
• our common stock could be considered a “penny stock,” which would likely limit the level of trading activity in the secondary market for our common stock; and
• we would likely lose any active trading market for our common stock, as it may only be traded on one of the over-the-counter markets, if at all.

37

Table of Contents