In a recent SEC filing, Edible Garden AG Inc (NASDAQ:EDBL) shares, a crop agriculture company with annual revenue of $14.07 million, disclosed the entry into a financing arrangement with Cedar Advance LLC.
According to InvestingPro analysis, the company has been quickly burning through cash, making this financing crucial. On Monday, the company finalized a merchant cash advance agreement selling $2.485 million of its future accounts receivable for an upfront sum of $1.75 million. After accounting for fees and expenses totaling $87,500, Edible Garden received net proceeds of $1.662 million.
The transaction, which was completed on December 4, 2024, involved Edible Garden committing to repay Cedar 25% of its weekly collected funds from customers. Cedar will directly withdraw $65,395 weekly from Edible Garden's bank account until the full amount of the advance is repaid.
With a current market capitalization of just $3.2 million and a stock price that has declined over 98% year-to-date, this financing arrangement represents a significant portion of the company's market value.
To secure the deal, Edible Garden has granted Cedar a security interest in all of its accounts, including deposit accounts, accounts receivable, and other receivables. Additionally, the company has agreed to refrain from incurring any liens on the collateral involved.
The funds obtained through this agreement were partly used to settle the remaining balance of $523,150 from a prior merchant cash advance agreement with Cedar, dated May 3, 2024. In case of default, Cedar has the right to enforce its security interest in the collateral and demand immediate payment of the outstanding receivables plus associated fees.
The details of this financial arrangement were provided in an 8-K form filed with the SEC, which includes the full text of the agreement as an exhibit. This strategic financial move allows Edible Garden to manage its cash flow and continue operations, demonstrating the company's active management of its financial obligations.
The information in this article is based on a press release statement. For deeper insights into Edible Garden's financial health and performance metrics, including 13 additional ProTips and comprehensive valuation analysis, visit InvestingPro. The platform's detailed Pro Research Report provides essential intelligence for understanding the company's current position and future prospects.
In other recent news, Edible Garden AG reported mixed results for its third quarter of 2024. Despite a decrease in quarterly revenue to $2.6 million from $3 million year-over-year, the company saw gross profit increase by $687,000 compared to the same quarter last year, with gross profit margin growing to 27.1%.
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 addition to these financial developments, Edible Garden AG has also formed partnerships with Walmart (NYSE:WMT) and launched new products like Hydro Basil and Vitamin Whey on Walmart Marketplace. The company is also seeing sales growth in the Pulp Flavors line and has introduced the Kick Sports Nutrition line.
Looking ahead, Edible Garden AG anticipates a strong fourth quarter, with the potential to be one of the strongest in the company's history. The company also expects substantial growth in the Sports Nutrition line in 2025, with new product launches and major retailer partnerships. However, it is important to note that these are projections and actual results could vary.
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