Edible Garden AG Incorporated (Nasdaq: EDBL) completed a sale of its unused New Jersey net operating losses under the New Jersey Economic Development Authority’s Technology Business Tax Certificate Transfer Program, generating gross proceeds of $3.35 million. The transaction converts tax assets that would otherwise remain idle into immediate, non‑dilutive cash, giving the company a much-needed liquidity boost at a time when its balance sheet is under pressure.
The company’s Q3 2025 results showed a net loss of $4.045 million and a cash balance of $828,000, a sharp decline from the $1.5 million cash on hand at the end of Q2 2025. The loss widened from $2.3 million in the prior year, and the cash shortfall has prompted a “substantial doubt” going‑concern warning in its filings. The NOL proceeds therefore represent a critical lifeline that allows Edible Garden to continue operations without issuing additional equity or taking on debt.
Edible Garden is shifting its product mix toward higher‑margin core herb and shelf‑stable lines while exiting lower‑margin categories such as floral and lettuce. Management said the cash will accelerate the transition to these segments, support capital expenditures for controlled‑environment agriculture infrastructure, and fund ongoing strategic initiatives aimed at improving gross margins. The company’s CEO, Jim Kras, emphasized that the sale “strengthens the company’s financial position and provides the flexibility needed to invest in our core business and evaluate future capital allocation decisions.”
The New Jersey Economic Development Authority’s program allows eligible technology and innovation companies to sell unused NOLs and R&D tax credits for cash. Applications typically open in May and close in June each year, and the program is designed to provide non‑dilutive capital without the need for equity or debt financing. By participating, Edible Garden has leveraged a state‑backed mechanism to convert a tax asset into working capital, a move that is rare among its peers and underscores the company’s urgent need for liquidity.
The NOL sale is a material event that materially improves Edible Garden’s liquidity profile and supports its strategic pivot toward higher‑margin products. While the company remains in a challenging financial position, the cash infusion is expected to provide a buffer that will allow it to execute its growth strategy without further dilution or debt.
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