Edible Garden AG Incorporated Secures \$12 Million Debt Financing with Streeterville Capital, LLC
Key Highlights:
- Edible Garden AG Incorporated (NASDAQ: EDBL) has entered into a significant debt financing arrangement with Streeterville Capital, LLC, raising a total of \$12 million through the issuance of new promissory notes.
- The deal comprises two main instruments: a Promissory Note A-1 for \$2,170,000 and a Secured Promissory Note B for \$10,000,000.
- The financing is accompanied by a comprehensive Guaranty from certain Edible Garden subsidiaries and a Deposit Account Control Agreement (DACA) for additional investor protection.
- The transaction contains price-sensitive covenants, redemption rights, and default provisions that could impact shareholder value and the company’s capital structure.
Detailed Transaction Summary
On June 12, 2026, Edible Garden AG Incorporated (“Company”), a Delaware corporation, executed a Notes Purchase Agreement with Streeterville Capital, LLC (“Investor”), a Utah-based investment firm. The aggregate purchase price is \$12,000,000, split across two key notes:
- Promissory Note A-1: Original principal amount of \$2,170,000.
- Secured Promissory Note B: Original principal amount of \$10,000,000.
The funds will be transferred by wire upon delivery of the notes, with \$2,000,000 immediately available for the A-1 Note, and the balance for the B Note.
Investor and Company Obligations
Redemption Rights and Events of Default
- After six months, the investor has the right to require Edible Garden to redeem portions of the outstanding note balances for cash, subject to both monthly and additional limited redemption rights if certain trading conditions are met.
- Notes contain customary events of default, including the investor’s right to accelerate the debt if such events occur, which may have immediate and material impacts on the company’s financial stability.
Covenants and Restrictions
- The company is subject to several covenants, including requirements to maintain SEC reporting compliance, restrictions on incurring additional debt or issuing new securities, and limitations on granting liens or encumbrances—each subject to certain exceptions.
- Any more favorable debt terms offered to other investors (so-called “most favored nation” provisions) must also be extended to Streeterville, potentially increasing the cost of capital if the company pursues additional financings with better terms.
- Edible Garden must keep its common shares listed on the NYSE, NYSE American, or Nasdaq, and must not allow trading to be halted or suspended; any such trading disruptions could trigger default or redemption provisions.
- The company cannot make “Restricted Issuances”—including debt with variable conversion features, Section 3(a)(9) exchanges, or similar transactions—without Streeterville’s consent, except for certain permitted project financings.
- Investor is granted online access to monitor the deposit account pledged as security until the B Note is repaid in full.
Guaranty and Security
- The notes are guaranteed by Edible Garden’s subsidiaries, and a Deposit Account Control Agreement (DACA) is executed to secure the investor’s interest in the cash proceeds.
- The Guaranty is unconditional and allows the investor to enforce the obligations against the subsidiaries independent of actions taken against the company itself.
Material and Potentially Price Sensitive Information for Shareholders
- Potential Share Dilution: The agreement restricts but does not eliminate the possibility of future equity or convertible debt issuances, which could dilute existing shareholders if such actions are taken with the investor’s consent.
- Risk of Default and Acceleration: Any default under the agreement could allow the investor to demand immediate repayment, which may force the company to sell assets, raise additional capital, or even consider bankruptcy protection if unable to pay, impacting shareholder value.
- Liquidity and Financial Flexibility: The restrictive covenants, including negative pledges and limitations on additional debt, could constrain the company’s ability to respond to strategic opportunities or financial challenges.
- “Most Favored Nation” Clause: If future notes or financings are issued on better terms, those terms must also be granted to Streeterville, potentially increasing financing costs or diluting future value for existing shareholders.
- NASDAQ Listing Maintenance: The company’s obligation to maintain listing on a major exchange is critical; loss of listing could trigger default and affect both liquidity and valuation.
Additional Details and Legal Provisions
- Standard legal clauses include severability, integration (the agreement supersedes all prior term sheets or understandings), amendment requirements (in writing, by both parties), and assignment rights (Streeterville can assign its interests without Edible Garden’s consent; the company cannot assign without investor approval).
- The agreement is governed by Utah law, and both parties waive the right to a jury trial.
- All representations, warranties, and covenants survive closing, and the company will indemnify the investor against any losses related to breaches of these provisions.
Signatories
- Edible Garden AG Incorporated – Signed by James Kras, Chief Executive Officer
- Streeterville Capital, LLC – Signed by John Fife, President
Conclusion
Investor Takeaway:
This financing is significant for Edible Garden AG Incorporated’s balance sheet and strategic flexibility, but it introduces new risks via restrictive covenants, redemption rights, and the possibility of forced repayment or dilution. The deal’s terms are complex and may impact share value depending on the company’s future performance, market conditions, and compliance with all covenants. Shareholders should closely monitor filings for any subsequent events of default or additional financing activities, as these could materially affect the company’s financial position and share price.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with professional advisors before making any investment decisions. The information is based on public filings as of June 12, 2026, and is subject to change without notice.
