Arcadia Biosciences, Inc 10-Q for FY2025 Q1
Arcadia Biosciences, Inc. (RKDA)
About this 10-Q
Arcadia Biosciences, Inc filed this 10-Q on May 8, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.2M
- up 21.6% from $987K a year earlier
- Net income
- $2.6M
- compared with a net loss of $2.42M a year earlier
- Diluted EPS
- $1.90
- compared with -$1.78 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the quarterly period ended
OR
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of Principal Executive Offices) |
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Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 1, 2025, the registrant had
Arcadia Biosciences, Inc.
FORM 10-Q FOR THE QUARTER ENDED March 31, 2025
INDEX
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Part I — |
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Financial Information (Unaudited) |
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Item 1. |
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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Part II — |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
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Item 6. |
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ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Arcadia Biosciences, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
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March 31, 2025 |
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December 31, 2024 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable and other receivables, net of allowance for doubtful accounts of |
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Inventories — current |
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Note receivable — current |
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Prepaid expenses and other current assets |
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Current assets of discontinued operations — GoodWheat |
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Total current assets |
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Property and equipment, net |
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Right of use asset |
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Intangible assets, net |
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Note receivable — noncurrent |
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Other noncurrent assets |
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Total assets |
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$ |
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$ |
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Liabilities and stockholders’ equity |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
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$ |
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Amounts due to related parties |
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Operating lease liability — current |
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Other current liabilities |
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Total current liabilities |
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Common stock warrant and option liabilities |
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Other noncurrent liabilities |
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Total liabilities |
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Stockholders’ equity: |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders' equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
1
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
(In thousands, except share and per share data)
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Three Months Ended March 31, |
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2025 |
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2024 |
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Revenues: |
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Product |
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$ |
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$ |
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Total revenues |
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Operating expenses (income): |
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Cost of revenues |
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Research and development |
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Gain on sale of intangible assets |
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Impairment of property and equipment |
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Change in fair value of contingent consideration |
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Selling, general and administrative |
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Total operating expenses |
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Income (loss) from continuing operations |
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Interest income |
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Other income, net |
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Change in fair value of common stock warrant and option liabilities |
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Net income (loss) from continuing operations |
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Net loss from discontinued operations |
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Net income (loss) attributable to common stockholders |
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$ |
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$ |
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Net income (loss) per share attributable to common stockholders: |
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Basic from continuing operations |
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$ |
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$ |
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Basic from discontinued operations |
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Net income (loss) per basic share attributable to common stockholders |
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Diluted from continuing operations |
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$ |
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$ |
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Diluted from discontinued operations |
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$ |
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$ |
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Net income (loss) per diluted share attributable to common stockholders |
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$ |
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Weighted-average number of shares used in per share |
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Basic |
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Diluted |
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Other comprehensive income (loss), net of tax |
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Unrealized gains on available-for-sale securities |
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$ |
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$ |
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Other comprehensive income |
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$ |
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$ |
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Comprehensive income (loss) attributable to common stockholders |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
2
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share data)
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Common Stock |
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Additional |
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Accumulated |
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Accumulated Other |
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Non- |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Comprehensive Income |
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Interest |
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Equity |
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Balance at December 31, 2024 |
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$ |
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$ |
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$ |
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— |
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$ |
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$ |
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Issuance of shares related to employee stock |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Net income |
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— |
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— |
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— |
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— |
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— |
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Balance at March 31, 2025 |
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$ |
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$ |
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$ |
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$ |
— |
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$ |
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$ |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated Other |
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Non- |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Comprehensive Income |
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Interest |
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Equity |
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Balance at December 31, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of shares related to March 2023 pre-funded warrants exercise |
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— |
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— |
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— |
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— |
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— |
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— |
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Issuance of shares related to employee stock |
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— |
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— |
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— |
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— |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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Unrealized gains on available-for-sale securities |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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( |
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Balance at March 31, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
( |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
3
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
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Three Months Ended March 31, |
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2025 |
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2024 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income (loss) |
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$ |
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$ |
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Adjustments to reconcile net income to cash used in operating activities: |
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Change in fair value of common stock warrant and option liabilities |
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Change in fair value of contingent consideration |
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Depreciation |
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Lease amortization |
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Amortization of note receivable |
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Loss on sale of property and equipment |
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Gain on sale of intangible assets |
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Stock-based compensation |
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Impairment of property and equipment |
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Changes in operating assets and liabilities: |
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Accounts receivable and other receivables |
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Inventories |
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Prepaid expenses and other current assets |
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Accounts payable and accrued expenses |
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Amounts due to related parties |
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Operating lease liabilities |
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Net cash used in operating activities |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Proceeds from sale of intangible assets |
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Proceeds from sale of property and equipment |
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Purchases of property and equipment |
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Net cash provided by investing activities |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Proceeds from ESPP purchases |
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Net cash provided by financing activities |
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Net decrease in cash and cash equivalents |
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Cash and cash equivalents — beginning of period |
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Cash and cash equivalents — end of period |
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$ |
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$ |
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NONCASH INVESTING AND FINANCING ACTIVITIES: |
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Proceeds from sale of property and equipment in accounts receivable and other receivables |
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$ |
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$ |
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Purchases of property and equipment in accounts payable and accrued expenses |
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$ |
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$ |
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Right of use assets obtained in exchange for new operating lease liabilities |
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$ |
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$ |
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Proceeds from sale of intangible assets in accounts receivable and other receivables |
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$ |
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$ |
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See accompanying notes to the unaudited condensed consolidated financial statements.
4
Arcadia Biosciences, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Description of Business and Basis of Presentation
Organization
Arcadia Biosciences, Inc. (the "Company," "Arcadia" or "management"), was incorporated in
Arcadia has leveraged its history as a leader in science-based approaches to develop high value products and drive innovation in the consumer goods industry. Since acquiring the assets of Zola in May 2021, Arcadia has provided consumers with a way to rehydrate, reset, and reenergize with Zola coconut water products. Previously, Arcadia developed products primarily in wheat, which it commercialized through the sales of seed, grain and food products, as well as through trait licensing and royalty agreements.
On March 28, 2025, Arcadia entered into an agreement with Bioceres Crop Solutions Corp. ("BIOX") pursuant to which BIOX agreed to transfer to the Company all rights and materials relating to certain soy traits that were included in licenses granted by the Company to BIOX in the November 2020 sale of Verdeca. In addition, BIOX agreed to pay a total of $
On December 4, 2024, Arcadia, Roosevelt Resources LP (“Roosevelt” or the “Partnership”) and Elliott Roosevelt, Jr. and David A. Roosevelt, in their capacities as representatives of the limited partners of the Partnership entered into a Securities Exchange Agreement (as it may be amended from time to time, the “Exchange Agreement”). Subject to the terms of the Exchange Agreement and to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, at the closing of the transactions contemplated by the Exchange Agreement (the "Closing"), Arcadia agreed to issue shares of its common stock to the limited partners of Roosevelt in exchange for all of the limited partnership interests of Roosevelt and to the sole member of the general partner of Roosevelt (together with the limited partners, referred to collectively as the “Limited Partners”) in exchange for its membership interest (together with the limited partnership interests of the Limited Partners, the “Partner Interests”) in the limited liability company that is the general partner of Roosevelt (such exchange, contributions and issuances referred to as the “Exchange”). As a result of the Exchange, Arcadia will continue and Roosevelt will continue as a wholly owned subsidiary of Arcadia. Upon completion of the Exchange, and based on the number of shares issuable pursuant to the Exchange Agreement (and assuming that no other shares are issuable to third parties in connection with the Closing), the Limited Partners and the Arcadia stockholders as of immediately prior to the Closing will own
On May 16, 2024, Arcadia sold the GoodWheat™ brand to Above Food Corp. for net consideration of $
On May 14, 2024, Arcadia sold its non-GMO Resistant Starch (“RS”) durum wheat trait to longtime partner Corteva Agriscience (“Corteva”) for total cash consideration of $
5
In August 2019, the Company entered into a joint venture agreement with Legacy Ventures Hawaii, LLC (“Legacy,” see Note 8) to grow, extract, and sell hemp products. The partnership Archipelago Ventures Hawaii, LLC (“Archipelago”), combined the Company’s genetic expertise and resources with Legacy’s experience in hemp extraction and sales. In October 2021, Arcadia and Legacy mutually agreed to wind down the cultivation activities of Archipelago, due to regulatory challenges and a saturated hemp market.
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission (the “SEC”) in instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair statement of the Company’s financial position, results of operations and cash flows for the periods indicated. All material intercompany accounts and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, Arcadia Wellness, and Archipelago.
The Company uses a qualitative approach in assessing the consolidation requirement for variable interest entities ("VIEs"). This approach focuses on determining whether the Company has the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and whether the Company has the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE.
For all periods presented, the Company has determined that it is the primary beneficiary of Archipelago, a joint venture, as it has a controlling interest in Archipelago. Accordingly, the Company consolidates Archipelago in the condensed consolidated financial statements after eliminating intercompany transactions. For consolidated joint ventures, the non-controlling partner’s share of the assets, liabilities and operations of the joint venture is included in non-controlling interests as equity of the Company. The non-controlling partner’s interest is generally computed as the joint venture partner’s ownership percentage of Archipelago. The non-controlling partner’s equity interests are presented as non-controlling interests on the condensed consolidated balance sheets.
The information included in these condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended December 31, 2024 included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 25, 2025.
Reclassifications
Certain previously reported financial information has been reclassified to conform to the current year presentation. For a discussion of the reclassification of the financial presentation of our former GoodWheat brand reported as discontinued operations, see Note 3. Unless otherwise noted, amounts and disclosures throughout these notes to condensed consolidated financial statements relate solely to continuing operations and exclude all discontinued operations.
Liquidity, Capital Resources, and Going Concern
The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. Since inception, the Company has financed its operations primarily through equity financings. As of March 31, 2025, the Company had an accumulated deficit of $
With cash and cash equivalents of $
In December 2024, the Company entered into a business combination agreement with Roosevelt Resources, LP. However, the Company may still seek to raise additional funds through debt or equity financings. The sale of additional equity would result in dilution to the Company’s stockholders. The incurrence of debt would result in debt service obligations, and the instruments governing such debt could provide for additional operating and financing covenants that would restrict operations. If the Company requires additional funds and is unable to secure adequate additional funding on terms acceptable to the Company, the Company may be forced to reduce spending, extend payment terms with suppliers, or liquidate assets. Any of these actions could materially harm the Company's business, results of operations and financial condition.
6
2. Recent Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures. The amendments in this update require additional income tax disclosures primarily related to the rate reconciliation and income taxes paid. The new guidance is effective either prospectively or retrospectively, for fiscal years beginning after December 15, 2024, with
In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update, among other things, require quantitative disclosures for employee compensation, selling expenses and purchases of inventory. The new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this update on our financial statements and disclosures.
3. Discontinued Operations
On May 16, 2024, the Company sold the GoodWheat brand to Above Food. GoodWheat operations ceased during the second quarter of 2024.
In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations in the condensed consolidated balance sheets and the results of the discontinued operations as separate components on the condensed consolidated statements of operations and comprehensive income (loss) for all periods presented.
Major classes of line items constituting the balance sheet of discontinued operations:
(In thousands) |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
||
Assets |
|
|
|
|
|
|
||
Accounts receivable and other receivables |
|
$ |
|
|
$ |
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Major classes of line items constituting net loss from discontinued operations:
|
|
Three Months Ended March 31, |
|
|
|||||
|
|
2025 |
|
|
2024 |
|
|
||
(In thousands) |
|
|
|
|
|
|
|
||
Product revenue |
|
$ |
|
|
$ |
|
|
||
Cost of revenues |
|
|
|
|
|
( |
) |
|
|
Research and development |
|
|
|
|
|
( |
) |
|
|
Loss on sale of property and equipment |
|
|
|
|
|
( |
) |
|
|
Selling, general and administrative |
|
|
|
|
|
( |
) |
|
|
Net loss from discontinued operations |
|
$ |
|
|
$ |
( |
) |
|
|
The following table presents cash and non-cash items of discontinued operations:
|
|
Three Months Ended March 31, |
|
|||||
(In thousands) |
|
2025 |
|
|
2024 |
|
||
Depreciation |
|
$ |
|
|
$ |
|
||
Loss on sale of property and equipment |
|
$ |
|
|
$ |
|
||
Inventories |
|
$ |
|
|
$ |
|
||
Accounts payable and accrued expenses |
|
$ |
|
|
$ |
( |
) |
|
Proceeds from sale of property and equipment |
|
$ |
|
|
$ |
|
||
There were no other operating or investing cash or non-cash items for the three months ended March 31, 2025 and 2024.
7
4. Inventory
Inventory costs are tracked on a lot-identified basis and are included as cost of revenues when sold. Inventories are stated at the lower of cost or net realizable value. The Company makes adjustments to inventory when conditions indicate that the net realizable value may be less than cost due to physical deterioration, obsolescence, changes in price levels, or other factors. Additional adjustments to inventory are made for excess and slow-moving inventory on hand that is not expected to be sold within a reasonable timeframe to reduce the carrying amount to its estimated net realizable value. The write-downs to inventory are included in cost of revenues and are based upon estimates about future demand from the Company’s customers and distributors and market conditions. If there are significant changes in demand and market conditions, substantial future write-downs of inventory may be required, which would materially increase the Company’s expenses in the period the write down is taken and materially affect the Company’s operating results.
Inventories, net consist of the following (in thousands):
|
|
March 31, 2025 |
|
|
December 31, 2024 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Finished goods |
|
|
|
|
|
|
||
Inventories |
|
$ |
|
|
$ |
|
||
5. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
|
|
March 31, 2025 |
|
|
December 31, 2024 |
|
||
Software and computer equipment |
|
|
|
|
|
|
||
Furniture and fixtures |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Property and equipment, gross |
|
|
|
|
|
|
||
Less: accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense was $
During the first quarter of 2024, the Company recorded an impairment of $
6. Investments and Fair Value Instruments
Investments
The investments are carried at fair value, based on quoted market prices or other readily available market information. Unrealized and realized gains and losses are recognized as other income in the consolidated statements of operations and comprehensive income (loss).
The following tables summarize the amortized cost and fair value of the investment securities portfolio at March 31, 2025 and December 31, 2024:
(Dollars in thousands) |
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Estimated |
|
||||
March 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total Assets at Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
(Dollars in thousands) |
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Estimated |
|
||||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total Assets at Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
8
The Company did
Fair Value Measurement
The fair value of the investment securities at March 31, 2025 were as follows:
|
|
Fair Value Measurements at March 31, 2024 |
|
|||||||||||||
(Dollars in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets at Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total Assets at Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The fair value of the investment securities at December 31, 2024 were as follows:
|
|
Fair Value Measurements at December 31, 2024 |
|
|||||||||||||
(Dollars in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets at Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total Assets at Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during 2025 or 2024. The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable and other receivables, note receivable, accounts payable and accrued liabilities. For accounts receivable and other receivables and accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of March 31, 2025 and December 31, 2024 were considered representative of their fair values due to their short term to maturity or repayment. Cash equivalents are carried at cost, which approximates their fair value. The note receivable is recorded at amortized cost. The amortized cost of the note receivable is considered approximate fair value due to its variable interest rate.
The Company’s Level 3 liabilities consist of a contingent liability resulting from the Anawah, Inc. ("Anawah") acquisition as described in Note 14, as well as preferred investment options related to the March 2023 Private Placement and August 2022 Registered Direct offerings.
The contingent liability related to the Anawah acquisition was measured and recorded on a recurring basis as of March 31, 2025 and December 31, 2024, using unobservable inputs, namely the Company’s ability and intent to pursue certain specific products developed using technology acquired in the purchase. A significant deviation in the Company’s ability and/or intent to pursue the technology acquired in the purchase could result in a significantly lower (higher) fair value measurement.
The preferred investment option liabilities were measured and recorded on a recurring basis using the Black-Scholes Model with the following assumptions as of March 31, 2025 and December 31, 2024:
|
|
March 2023 Options - Series A & |
|
|
August 2022 Options & August 2022 Placement Agent Options |
|
||||||||||
|
|
March 31, 2025 |
|
|
December 31, |
|
|
March 31, 2025 |
|
|
December 31, |
|
||||
Remaining term (in years) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected volatility |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Risk-free interest rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Expected dividend yield |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The significant input used in the fair value measurement of the Company’s Level 3 options liabilities is volatility. A significant increase (decrease) in volatility could result in a significantly higher (lower) fair value measurement.
9
The following table sets forth the establishment of the Company’s Level 3 assets and liabilities, as well as a summary of the changes in the fair value and other adjustments (in thousands):
|
|
|
|
|||||||||||||||||||||||||
(Dollars in thousands) |
|
March 2023 |
|
|
March 2023 Placement Agent Options |
|
|
August 2022 |
|
|
August 2022 |
|
|
Note Receivable Bifurcated Derivatives |
|
|
Contingent |
|
|
Total |
|
|||||||
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Change in fair value |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance as of March 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
7. Note Receivable and Embedded Derivatives
On May 16, 2024, the Company sold the GoodWheat brand to Above Food for net consideration of $
In connection with the transaction, Arcadia paid to Above Food $
The Company accounted for the promissory note as a note receivable in accordance with ASC 310. The Company did not elect the fair value option and since the Company intends to and has the ability to hold the promissory note to maturity, it has been classified as held for investment and is reported on the condensed consolidated balance sheet at amortized cost. The first installment payment due in 2025 is classified as current and the remaining installment payments due in 2026 and 2027 are classified as noncurrent on the condensed consolidated balance sheets.
The promissory note was recorded at a discount of $
Embedded Derivatives
The contingent features of the promissory note were evaluated for bifurcation in accordance with ASC 815. The contingent features requiring bifurcation had an estimated fair value of $
8. Consolidated Joint Venture
In 2019, the Company and Legacy Ventures Hawaii, LLC, a Nevada limited liability company (“Legacy”), formed Archipelago Ventures Hawaii, LLC, a Delaware limited liability company and entered into a Limited Liability Company Operating Agreement (the “Operating Agreement”). The Company and Legacy formed Archipelago to develop, extract and commercialize hemp-derived products from industrial hemp grown in Hawaii.
In October 2021, Arcadia and Legacy mutually agreed to wind down the cultivation activities of Archipelago, due to regulatory challenges and a saturated hemp market.
9. Collaborative Arrangements
In
10
The Company accounted for research and development (“R&D”) costs in accordance ASC 730, Research and Development, which states R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results are achieved.
On May 14, 2024, the Company sold its RS durum wheat trait to Corteva. Under the terms of the agreement, Arcadia retained certain rights to use the RS durum wheat trait. The Company received $
10. Leases
Operating Leases
As of March 31, 2025, the Company leases office space in Dallas, TX and Sacramento, CA. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these short-term leases on a straight-line basis.
The Company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or material restrictive covenants.
Leases |
|
Classification |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
||
Assets |
|
|
|
|
|
|
|
|
||
Operating lease assets |
|
Right of use asset |
|
$ |
|
|
$ |
|
||
Total leased assets |
|
|
|
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
|
|
|
||
Current - Operating |
|
Operating lease liability- current |
|
$ |
|
|
$ |
|
||
Total leased liabilities |
|
|
|
$ |
|
|
$ |
|
||
Lease Cost |
|
Classification |
|
Three |
|
|
Three |
|
||
Operating lease cost |
|
SG&A Expenses |
|
$ |
|
|
$ |
|
||
Short term lease cost |
|
SG&A Expenses |
|
|
|
|
|
|
||
Sublease income (1) |
|
SG&A Expenses |
|
|
( |
) |
|
|
( |
) |
Net lease (income) cost |
|
|
|
$ |
( |
) |
|
$ |
|
|
Lease Term |
|
March 31, 2025 |
|
|
December 31, 2024 |
|
||
Weighted-average remaining |
|
|
|
|
|
|
||
Weighted-average discount rate |
|
|
% |
|
|
% |
||
11
11. Warrants and Options
Equity Classified Common Stock Warrants
The Company issued the following warrants to purchase shares of its common stock, which are outstanding as of March 31, 2025 and December 31, 2024, respectively. These warrants are exercisable any time at the option of the holder until their expiration date.
|
|
Issuance Date |
|
Term |
|
Exercise |
|
|
Exercised |
|
|
Outstanding at |
|
|
Exercised |
|
|
Outstanding at |
|
|||||
March 2023 Pre-Funded Warrants |
|
|
perpetual |
|
$ |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
||||||
December 2022 Service and Performance Warrants (1) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
October 2022 Service and Performance Warrants (1) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
January 2021 Placement Agent Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 2020 Warrants (2) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 2020 Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
December 2020 Placement Agent Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
July 2020 Warrants (2) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
July 2020 Placement Agent Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
May 2020 Warrants (2) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
May 2020 Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
May 2020 Placement Agent Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
January 2021 Warrants (2) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
January 2021 Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
September 2019 Warrants (2) (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
September 2019 Warrants (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
June 2019 Warrants (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
(1) The Company issued service and performance warrants (“Service and Performance Warrants”) in connection with professional services agreements with non-affiliated third party entities.
(2) These warrants were repriced as part of the March 2023 Private Placement offering.
(3) These warrants expired during the three months ended March 31, 2025.
12
Liability Classified Preferred Investment Options
The preferred investment options issued in connection with the March 2023 Private Placement and August 2022 Registered Direct offerings contain certain early settlement provisions that preclude them from equity classification and therefore were accounted for as liabilities at the date of issuance and are adjusted to fair value at each balance sheet date. The change in fair value of the options liabilities is recorded as change in fair value of common stock warrant and option liabilities in the condensed consolidated statements of operations and comprehensive income (loss).
|
|
Issuance Date |
|
Term |
|
Exercise |
|
|
Exercised |
|
|
Outstanding at |
|
|
Exercised |
|
|
Outstanding at |
|
|||||
March 2023 Options - Series A |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
March 2023 Placement Agent Options |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
August 2022 Options (1) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
August 2022 Placement Agent Options |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(1) These options were repriced as part of the March 2023 Private Placement offering.
12. Stock-Based Compensation and Employee Stock Purchase Program
Stock Incentive Plans
The Company has
In 2006, the Company adopted the 2006 Plan, which provided for the granting of stock options to executives, employees, and other service providers under terms and provisions established by the Board of Directors. The Company granted non-statutory stock options (“NSOs”) under the 2006 Plan until May 2015, when it was terminated as to future awards, although it continues to govern the terms of options that remain outstanding and were issued under the 2006 Plan.
On June 25, 2024, the shareholders approved an amendment to the Company’s 2015 Plan that increased the number of shares of common stock that may be issued under the 2015 Plan by
13
The following is a summary of stock option information and weighted average exercise prices under the Company’s stock incentive plans:
|
|
Shares |
|
|
Weighted- |
|
|
Aggregate |
|
|||
Outstanding — Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|||
Options expired |
|
|
( |
) |
|
$ |
|
|
|
|
||
Outstanding — Balance at March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|||
Vested and expected to vest — March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|||
Exercisable — March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|||
Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock determined by its Board of Directors for each of the respective periods.
As of March 31, 2025, there was $
In determining the fair value of the stock-based awards, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine.
Expected Term—The expected term is the estimated period of time outstanding for stock options granted and was estimated based on a simplified method allowed by the SEC, and defines the term as the average of the contractual term of the options and the weighted-average vesting period for all open employee awards.
Expected Volatility—The historical volatility data was computed using the daily closing prices for the Company’s shares during the equivalent period of the calculated expected term of the stock-based awards.
Risk-Free Interest Rate—The risk-free interest rate is based on the interest rate of U.S. Treasuries of comparable maturities on the date the options were granted.
Expected Dividend—The expected dividend yield is based on the Company’s expectation of future dividend payouts to common stockholders.
There were no option grants during the three months ended March 31, 2025 and 2024.
The Company recognized $
Employee Stock Purchase Plan
The Company’s 2015 Employee Stock Purchase Plan (“ESPP”) became effective on May 14, 2015. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount of up to
14
13. Income Taxes
Income tax expense during interim periods is based on applying an estimated annual effective income tax rate to year-to-date income, plus any significant unusual or infrequently occurring items that are recorded in the interim period. The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment including, but not limited to, the expected operating income for the year, projections of the proportion of income earned and taxed in various jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is obtained, additional information becomes known, or as the tax environment changes.
The interim financial statement provision for income taxes is different from the amounts computed by applying the United States federal statutory income tax rate of
During the three months ended March 31, 2025, there were
In February 2023, the Company received notification from the Internal Revenue Service that our Archipelago joint venture was selected for audit for the 2021 tax year. The Company received the IRS Notice of Proposed Partnership Adjustment during the third quarter of 2024, accepted the adjustments, and submitted the push out election forms during the first quarter of 2025, to push the audit adjustments to the partners. Arcadia will adjust their balance of available tax net operating losses with the filing of their 2024 income tax returns, which have already been adjusted for financial statements purposes, and expects to incur no penalties or interest due.
The Company is currently not under audit for state purposes.
14. Commitments and Contingencies
Leases
The Company leases office space under operating lease agreements having initial lease terms ranging from to
Legal Matters
From time to time, the Company may be subject to legal proceedings, actions, claims, suits, or investigations arising from the ordinary course of our business, including actions with respect to intellectual property claims, breach of contract claims, claims relating to our products, labor and employment claims and other matters. Any litigation or other proceedings could divert management time and attention, could involve significant amounts of legal fees and other fees and expenses, or could result in an adverse outcome having a material adverse effect on our financial condition, cash flows or results of operations. Actions, claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty. Except as described below, the Company is not currently involved in any legal proceedings that the Company believes are, individually or in the aggregate, material to our business, results of operations or financial condition. However, regardless of the outcome, litigation can have an adverse impact on us because of associated cost and diversion of management time.
On
15
As disclosed above, on December 4, 2024, the Company entered into the Exchange Agreement with Roosevelt providing for the Exchange transaction, and on February 14, 2025, the Company filed a registration statement on Form S-4 with the SEC, including a preliminary proxy statement/prospectus, relating to shares to be issued in the transaction and a meeting of stockholders of the Company to be held to approve the issuance of shares in the transaction and related proposals. Since the date of filing of the registration statement, the Company has received several letters (the "Demand Letters") from counsel to purported stockholders of the Company. Each letter asserts that the preliminary proxy statement included in the registration statement was deficient and demanded that the alleged deficiencies be rectified. The Demand Letters allege, among other matters, that corrective disclosures are required to be included in the registration statement to address alleged material misstatements and omissions in the registration statement and that the proxy statement/prospectus contains materially incomplete and misleading information concerning, among other matters, financial projections, financial analysis performed by the entity that provided a fairness opinion to the Company's board of directors in connection with the transaction, potential conflicts of interest involving the Company's financial advisor in connection with the transaction and the Company's insiders, and possible breach of fiduciary duties by the directors of executive officers of the Company in connection with the transaction. Certain of the Demand Letter include a request for inspection of certain books and records of the Company pursuant to Delaware corporate law. It is possible that additional, similar letters may be received, or complaints filed. If this occurs, except as may be required by law, the Company does not intend to announce the filing of any such additional demand letter or any such complaint. The Company believes that the allegations in the Demand Letters are without merit and intends to vigorously defend itself against any complaint that may be filed.
The matters described in this section could divert management time and attention from the Company, and could involve significant amounts of legal fees and other fees and expenses. An adverse outcome in any such proceedings could have a material adverse effect on the Company.
Contingent Liability Related to the Anawah Acquisition
In, the Company completed its agreement and plan of merger and reorganization with Anawah, to purchase Anawah’s food and agricultural research company through a non-cash stock purchase. Pursuant to the merger with Anawah, and in accordance with ASC 805 - Business Combinations, the Company incurred a contingent liability not to exceed $
Contracts
The Company has exited all contract research agreements and has no additional funding commitments previously associated with these agreements.
The Company licenses certain technologies via executed agreements (“In-Licensing Agreements”) that were used to develop and advance the Company’s own technologies. These technologies have subsequently been sublicensed to unrelated parties.
The Company could be adversely affected by certain actions by the government as it relates to government contract revenue received in prior years. Government agencies, such as the Defense Contract Audit Agency routinely audit and investigate government contractors. These agencies review a contractor’s performance under its agreements; cost structure; and compliance with applicable laws, regulations and standards. The agencies also review the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the contractor’s purchasing, property, estimating, compensation and management information systems. While the Company’s management anticipates no adverse result from an audit, should any costs be found to be improperly allocated to a government agreement, such costs will not be reimbursed, or if already reimbursed, may need to be refunded. If an audit uncovers improper or illegal activities, civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments or fines, and suspension or prohibition from doing business with the government could occur. In addition, serious reputational harm or significant adverse financial effects could occur if allegations of impropriety were made against the Company.
16
15. Segment Reporting
The Company has
Information about the Company’s segment operations during the three months ended March 31, 2025 and 2024, are as follows (in thousands):
|
Three Months Ended March 31, |
|
|||||
|
2025 |
|
|
2024 |
|
||
Total revenues |
$ |
|
|
$ |
|
||
Product COGS |
|
( |
) |
|
|
( |
) |
Other Adjustments |
|
( |
) |
|
|
( |
) |
Human capital & technology |
|
( |
) |
|
|
( |
) |
Corporate expenses |
|
( |
) |
|
|
( |
) |
Advertising & marketing |
|
( |
) |
|
|
( |
) |
Outside services |
|
( |
) |
|
|
( |
) |
Depreciation |
|
( |
) |
|
|
( |
) |
Other SG&A |
|
( |
) |
|
|
( |
) |
Interest income |
|
|
|
|
|
||
Change in fair value of common stock warrant and option liabilities |
|
|
|
|
|
||
Other segment items |
|
|
|
|
( |
) |
|
Net income (loss) from continuing operations |
$ |
|
|
$ |
( |
) |
|
Other segment items consist of research and development expenses, gain on sale of intangible assets, change in fair value of contingent consideration, impairment of property and equipment, and other income.
17
16. Net Income (Loss) per Share
Basic net income (loss) per share is calculated by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period and excludes any dilutive effects of stock-based awards and warrants. Diluted net income (loss) per share attributable to common stockholders is computed giving effect to all potentially dilutive common shares, including common stock issuable upon exercise of stock options and warrants.
|
|
For the Three Months Ended March 31, |
|
|||||
|
|
|
2025 |
|
|
|
2024 |
|
Net income (loss) per share - Basic |
|
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
|
||
Net income (loss) attributable |
|
$ |
|
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
||
Weighted average number of |
|
|
|
|
|
|
||
Basic net income (loss) per share attributable |
|
$ |
|
|
$ |
( |
) |
|
Net income (loss) per share - Diluted |
|
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
|
||
Net income (loss) attributable |
|
$ |
|
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
||
Weighted average number of |
|
|
|
|
|
|
||
Effect of dilutive stock options |
|
|
|
|
|
|
||
Effect of dilutive warrants |
|
|
|
|
|
|
||
Weighted average number of |
|
|
|
|
|
|
||
Diluted net income (loss) per share |
|
$ |
|
|
$ |
( |
) |
|
17. Related-Party Transactions
The Company’s related parties include Moral Compass Corporation (“MCC”) and the John Sperling Foundation (“JSF”). The rights to the intellectual property owned by Blue Horse Labs, Inc. (“BHL”) were assigned to its sole shareholder, the John Sperling Revocable Trust (“JSRT”) due to BHL’s dissolution and then subsequently to the JSF. The JSF is deemed a related party of the Company because MCC, one of the Company’s largest stockholders, and the JSF share common officers and directors.
JSF receives a single digit royalty from the Company when revenue has been collected on product sales or for license payments from third parties that involve certain intellectual property developed under research funding originally from BHL. Royalty fees due to JSF was $
Product sales related to intellectual property developed under research funding from BHL ceased as of December 31, 2024. The royalty fees due to JSF for sales in 2024 were paid in April 2025 and no future royalty fees are expected.
18
18. Subsequent Events
On April 30, 2025, the parties to the Exchange Agreement entered into a First Amendment to Securities Exchange Agreement (the “Amendment”). The Amendment amended certain provisions of the Exchange Agreement, including without limitation the following: (i) the “Termination Date” provided for in one of the closing conditions described in the Exchange Agreement, which allows a party to terminate the Exchange Agreement if the Closing (as defined in the Exchange Agreement) has not occurred by
As discussed in Notes 1 and 7 above, on May 14, 2024, Arcadia and its wholly-owned subsidiary Arcadia Wellness, LLC entered into an Asset Purchase Agreement (“Purchase Agreement”), Promissory Note and a related Security Agreement, with Above Food Corp., a corporation formed under the laws of Saskatchewan (“Parent”), and Above Food Ingredients Corp., a Delaware corporation and wholly owned subsidiary of Parent (together with Parent, “Buyer”). Pursuant to the Purchase Agreement, Arcadia and Wellness sold to Buyer certain assets relating to Arcadia’s GoodWheat business and transferred to Buyer $
On May 1, 2025, Arcadia delivered a Notice to Parent pursuant to the provisions of Promissory Note, to require Parent to cause AFII to issue Parent Shares to Arcadia. The Notice indicated that pursuant to the provisions of the Promissory Note regarding the calculation and determination of the number of Parent Shares that are issuable in connection with delivery of a Notice, the number of Parent Shares issuable are approximately
19
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes to those statements included herein. In addition to historical financial information, this report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” included in the most recent Annual Report on Form 10-K filed by the Company. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
Solely for convenience, the trademarks, service marks and trade names referred to in this report may appear without the ®, TM, or SM symbols, but such references do not constitute a waiver of any rights that might be associated with the respective trademarks, service marks, or trade names.
Overview
Arcadia has leveraged its history as a leader in science-based approaches to develop high value products and drive innovation in the consumer goods industry. Since acquiring the assets of Zola in May 2021, Arcadia has provided consumers with a way to rehydrate, reset, and reenergize with Zola coconut water products. Previously, Arcadia developed products primarily in wheat, which it commercialized through the sales of seed, grain and food ingredients and products, and through trait licensing and royalty agreements.
On May 14, 2024, Arcadia sold its non-GMO Resistant Starch (“RS”) durum wheat trait to longtime partner Corteva Agriscience (“Corteva”) for total cash consideration of $4.0 million. Under the terms of the agreement, Arcadia retained certain rights to use the RS durum wheat trait. Refer to Note 9 to the condensed consolidated financial statements for further details of the transaction.
On May 16, 2024, Arcadia sold the GoodWheat™ brand to Above Food for net consideration of $3.7 million. The strategic decision to sell GoodWheat enabled the Company to monetize its intellectual property early. The assets sold consisted primarily of grain and finished goods inventories, formulations and trademarks. The disposition of GoodWheat represented a strategic shift that had a major effect on the Company's operations and financial results. As a result, the financial statements and related notes as of March 31, 2025 and 2024 reflect the GoodWheat disposition as a discontinued operation. The disposition of GoodWheat resulted in a loss of $1,500 during the second quarter of 2024. Refer to Notes 3 and 7 to the condensed consolidated financial statements for further details of the transaction.
On December 4, 2024, Arcadia, Roosevelt Resources LP (“Roosevelt” or the “Partnership”) and Elliott Roosevelt, Jr. and David A. Roosevelt, in their capacities as representatives of the limited partners of the Partnership entered into a Securities Exchange Agreement (as it may be amended from time to time, the “Exchange Agreement”). Subject to the terms of the Exchange Agreement and to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, at the closing of the transactions contemplated by the Exchange Agreement (the "Closing"), Arcadia agreed to issue shares of its common stock to the limited partners of Roosevelt in exchange for all of the limited partnership interests of Roosevelt and to the sole member of the general partner of Roosevelt (together with the limited partners, referred to collectively as the “Limited Partners”) in exchange for its membership interest (together with the limited partnership interests of the Limited Partners, the “Partner Interests”) in the limited liability company that is the general partner of Roosevelt (such exchange, contributions and issuances referred to as the “Exchange”). As a result of the Exchange, Arcadia will continue and Roosevelt will continue as a wholly owned subsidiary of Arcadia. Upon completion of the Exchange, and based on the number of shares issuable pursuant to the Exchange Agreement (and assuming that no other shares are issuable to third parties in connection with the Closing), the Limited Partners and the Arcadia stockholders as of immediately prior to the Closing will own 90% and 10%, respectively, of the shares of common stock of Arcadia outstanding immediately after the Closing. On February 14, 2025, the Company filed a registration statement on Form S-4 with the SEC relating to the shares to be issued in the transaction. The registration statement also included a proxy statement/prospectus relating to a meeting of stockholders of the Company to be held to vote on proposals approve the issuance of shares pursuant to the Exchange Agreement and related proposals.
20
On April 30, 2025, the parties to the Exchange Agreement entered into a First Amendment to Securities Exchange Agreement (the “Amendment”). The Amendment amended certain provisions of the Exchange Agreement, including without limitation the following: (i) the “Termination Date” provided for in one of the closing conditions described in the Exchange Agreement, which allows a party to terminate the Exchange Agreement if the Closing (as defined in the Exchange Agreement) has not occurred by May 15, 2015, was amended to be August 15, 2025; (ii) the provisions governing the number of shares of common stock that are issuable to the Limited Partners of Roosevelt were amended so that the number is calculated such that the number of shares to be issued to the Limited Partners equals 90% of the number of shares of common stock outstanding immediately after the Closing giving effect to the number of shares issuable to the Limited Partners (and ignoring and not giving effect to any other shares of common stock that may be issuable to any other persons in connection with or immediately after the Closing) (the “Exchange Shares”), without any possible upward or downward adjustments to the number of Exchange Shares to be issued based on the amount of cash and cash equivalents of the Company as of the Closing Date; and (iii) certain definitions related to determination of the Company’s cash amount at the Closing Date were eliminated.
On March 28, 2025, Arcadia entered into an agreement with Bioceres Crop Solutions Corp. ("BIOX") pursuant to which BIOX agreed to transfer to the Company all rights and materials relating to certain soy traits that were included in licenses granted by the Company to BIOX in the November 2020 sale of Verdeca. In addition, BIOX agreed to pay a total of $750,000 to the Company. The Company agreed to transfer to BIOX all of the Company's granted patents, pending applications, related materials and documents related to the Company's reduced gluten and oxidative stability patents. In addition, the parties agreed to amend a previous agreement between the parties to eliminate any obligation to pay the Company future product royalties under the agreement. The Company recorded a gain of $750,000 on the condensed consolidated statement of operations and comprehensive income (loss) related to this transaction as the patents, pending applications and future product royalties have no carrying value. As of March 31, 2025, the Company received payment for $500,000 of the $750,000. The Company received payment for the remaining $250,000 in April 2025.
Tariffs
On April 9, 2025, baseline tariffs imposed by the U.S. government went into effect, and at this time, the U.S. government has delayed the effective date for additional country-specific tariffs until July 2025. The impact of tariffs on the Company remains uncertain, and it is possible that features of the tariff policy may change before the country-specific tariffs take effect. We are closely monitoring the tariff landscape and are in discussions with our business partners to explore ways to mitigate the impact of tariffs on the Company. For additional information regarding the potential impacts of tariffs on our business and results of operations, see Part I, "Item 1A. Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on March 25, 2025.
Our Products
Zola Coconut Water
Founded in 2002, Zola became part of the Arcadia family of brands in May 2021. Sourced from Thailand, Zola is a pure, natural, 100% coconut water with a crisp, clean taste that’s slightly sweet and refreshing. Naturally hydrating and rich in electrolytes, Zola is Non-GMO Project Verified and only contains 60 calories per serving. In taste tests, Zola beat competitors 2 to 1, and the Company believes that it is a superior way to rehydrate, reset and reenergize. Zola flavors include original, original with pulp, espresso, lime and pineapple.
Agronomic Wheat Traits
As described in Note 1 to the condensed consolidated financial statements above, our March 2025 agreement transferred all of our patents, pending applications, related materials and documents related to the Company's reduced gluten and oxidative stability patents. In addition, due to various prior agreements and transactions, Arcadia no longer retains any effective commercialization rights to its resistant starch portfolio of patents. As a result, the Company does not expect to receive any license or royalty fees in the future related to any wheat-based intellectual property rights.
Discontinued Operations
As mentioned above, Arcadia exited the GoodWheat brand. In accordance with the provisions of ASC 205-20, Arcadia has separately reported the assets and liabilities of the discontinued operations in the condensed consolidated balance sheets and the results of the discontinued operations as separate components on the condensed consolidated statements of operations and comprehensive income (loss) for all periods presented. See Note 3 to the condensed consolidated financial statements for further information on discontinued operations.
21
Components of Our Statements of Operations Data
Revenues
Product revenues
Product revenues consist primarily of sales of Zola and GLA products. We recognize revenue from product sales when control of the product is transferred to third-party distributors and manufacturers, collectively “our customers,” which generally occurs upon delivery. Revenues fluctuate depending on the timing of shipments of product to our customers and are reported net of estimated chargebacks, returns and losses.
Operating Expenses
Cost of revenues
Cost of revenues primarily relates to the sale of Zola products and consists primarily of product and freight costs. Adjustments or write-downs to inventory are also included in cost of revenues.
Research and development expenses ("R&D")
Research and development expenses consist of costs incurred in the development and testing of our products. These expenses currently consist primarily of fees paid to product formulation consultants and are expensed as incurred. Additionally, the Company is required from time to time to make certain milestone payments in connection with the development of technologies in-licensed from third parties.
Impairment of property and equipment
Impairment of property and equipment includes losses from tangible assets due to impairment or recoverability test charges to write down fixed assets to their fair value or recoverability value.
Gain on sale of intangible assets
Gain on sale of intangible assets consists of the gain on sale of our reduced gluten and oxidative stability patent portfolios in March 2025.
Change in fair value of contingent consideration
Change in the fair value of contingent consideration is comprised of the gain associated with the reduction of our contingent liability as the result of a decision to abandon a program that was previously accrued.
Selling, general and administrative expenses
Selling, general and administrative expenses consist primarily of employee costs, professional service fees, broker and sales commission fees, and overhead costs.
Interest income
Interest income consists of interest income on our cash and cash equivalents, investments and note receivable.
Other income, net
Other income, net consists of miscellaneous income net of miscellaneous losses.
Change in the estimated fair value of common stock warrant and option liabilities
Change in the estimated fair value of common stock warrant and option liabilities is comprised of the fair value remeasurement of the liabilities associated with our financing transactions.
22
Net loss from discontinued operations
Net loss from discontinued operations represents results of operations related to the discontinued GoodWheat brand. See Note 3 to the condensed consolidated financial statements for further information on discontinued operations.
Results of Operations
Comparison of the Three Months Ended March 31, 2025 and 2024
|
|
Three Months Ended March 31, |
|
|
$ Change |
|
|
% Change |
|
|||||||
|
|
2025 |
|
|
2024 |
|
|
|
|
|
|
|
||||
|
|
(In thousands except percentage) |
|
|||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product |
|
$ |
1,200 |
|
|
$ |
987 |
|
|
$ |
213 |
|
|
|
22 |
% |
Total revenues |
|
|
1,200 |
|
|
|
987 |
|
|
|
213 |
|
|
|
22 |
% |
Operating expenses (income): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues |
|
|
682 |
|
|
|
471 |
|
|
|
211 |
|
|
|
45 |
% |
Research and development |
|
|
— |
|
|
|
6 |
|
|
|
(6 |
) |
|
|
(100 |
)% |
Impairment of property and equipment |
|
|
— |
|
|
|
36 |
|
|
|
(36 |
) |
|
|
(100 |
)% |
Gain on sale of intangible assets |
|
|
(750 |
) |
|
|
— |
|
|
|
(750 |
) |
|
|
100 |
% |
Change in fair value of contingent consideration |
|
|
(1,000 |
) |
|
|
— |
|
|
|
(1,000 |
) |
|
|
100 |
% |
Selling, general and administrative |
|
|
1,738 |
|
|
|
2,062 |
|
|
|
(324 |
) |
|
|
(16 |
)% |
Total operating expenses |
|
|
670 |
|
|
|
2,575 |
|
|
|
(1,905 |
) |
|
|
(74 |
)% |
Income (loss) from continuing operations |
|
|
530 |
|
|
|
(1,588 |
) |
|
|
2,118 |
|
|
|
(133 |
)% |
Interest income |
|
|
207 |
|
|
|
45 |
|
|
|
162 |
|
|
|
360 |
% |
Other income, net |
|
|
— |
|
|
|
3 |
|
|
|
(3 |
) |
|
|
(100 |
)% |
Change in fair value of common stock warrant and option liabilities |
|
|
1,862 |
|
|
|
593 |
|
|
|
1,269 |
|
|
|
214 |
% |
Net income (loss) from continuing operations |
|
|
2,599 |
|
|
|
(947 |
) |
|
|
3,546 |
|
|
|
(374 |
)% |
Net loss from discontinued operations |
|
|
— |
|
|
|
(1,476 |
) |
|
|
1,476 |
|
|
|
(100 |
)% |
Net income (loss) attributable to common stockholders |
|
$ |
2,599 |
|
|
$ |
(2,423 |
) |
|
$ |
5,022 |
|
|
|
(207 |
)% |
Revenues
Product revenues increased $213,000, or 22%, and consisted entirely of Zola coconut water sales during the three months ended March 31, 2025 compared to the same period in 2024. Zola revenues increased $567,000, or 90% during the three months ended March 31, 2025 compared to the same period in 2024. This was primarily driven by an increase in distribution resulting in higher sales volume. The Company did not implement any price increases during 2024 or the first quarter of 2025. Revenues for the three months ended March 31, 2024 included $354,000 from GLA oil.
Cost of revenues
Cost of revenues increased by $211,000, or 45%, and consisted entirely of Zola coconut water costs during the three months ended March 31, 2025 compared to the same period in 2024. Zola cost of revenues increased $244,000, or 56% during the three months ended March 31, 2025 compared to the same period in 2024 driven by the increase in Zola unit sales. Cost of revenues for the three months ended March 31, 2024 included $33,000 from GLA oil.
Research and development
Research and development expenses decreased by $6,000, or 100%, during the three months ended March 31, 2025 compared to the same period in 2024 reflecting our strategy to develop the Zola brand by leveraging our existing resources and minimizing new investment.
Impairment of property and equipment
During the three months ended March 31, 2024, the Company recognized impairment of property and equipment held for sale related to Archipelago of $36,000. There was no such impairment of property and equipment during the three months ended March 31, 2025.
23
Gain on sale of intangible assets
During 2025, the Company realized a gain of $750,000 related to the sale of our reduced gluten and oxidative stability patent portfolios in March 2025. There was no such gain recorded during 2024.
Change in fair value of contingent consideration
During the three months ended March 31, 2025, the change in the fair value of contingent consideration was due to the gain of $1.0 million associated with the reduction of our contingent liability as the result of a decision to abandon a program with respect to which a contingent liability was previously accrued. See Note 14 to the condensed consolidated financial statements for details. There was no change in fair value of contingent consideration during the three months ended March 31, 2024.
Selling, general, and administrative
Selling, general, and administrative expenses decreased by $324,000, or 16%, during the three months ended March 31, 2025 compared to the same period in 2024, driven by operating costs and employee related costs in 2024 that were absent in 2025.
Interest income
During the three months ended March 31, 2025, the Company recognized interest income of $207,000, of which $180,000 was related to discount amortization and accrued interest on the promissory note from Above Food. The remaining difference was related to interest from investments. During the three months ended March 31, 2024, the Company recognized interest income of $45,000 from investments.
Other income, net
During the three months ended March 31, 2025 and 2024, the Company recognized other income of $0 and $3,000, respectively.
Change in the estimated fair value of common stock warrant and option liabilities
The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $1.9 million and $593,000 during the three months ended March 31, 2025 and 2024, respectively, related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.
Net loss from discontinued operations
Net loss from discontinued operations for GoodWheat was $1.5 million during the three months ended March 31, 2024, reflecting the sale of the GoodWheat brand and related assets to Above Food during the second quarter of 2024. See Note 3 to the condensed consolidated financial statements for further information on discontinued operations.
Seasonality
The coconut water category, similar to other beverages, is seasonal. Generally, sales volumes are highest during our second and third fiscal quarters when the weather is warmer.
Liquidity & Capital Resources
We have funded our operations primarily with the net proceeds from our private and public offerings of our equity securities as well as proceeds from the sale of our products and payments under license agreements. Our principal use of cash is to fund our operations, which are primarily focused on commercializing our products. Our contractual obligations are primarily related to our operating leases for facilities, land and equipment. As of March 31, 2025, we had cash and cash equivalents of $3.2 million and current note receivable of $2.0 million. In April 2025, we received $250,000 representing the remaining payment from BIOX pursuant to our March 28, 2025 agreement, pursuant to which we transferred all of our granted patents, pending applications, related materials and documents related to our reduced gluten and oxidative stability patents. For the three months ended March 31, 2025, the Company had net income of $2.6 million and net cash used in operations of $1.6 million. For the twelve months ended December 31, 2024, the Company had net losses of $7.0 million and net cash used in operations of $9.6 million.
24
Going Concern; Material Cash Requirements
We believe that our existing cash and cash equivalents will not be sufficient to meet our anticipated cash requirements for at least the next 12 months from the issuance date of these financial statements, which raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
In December 2024, we entered into an agreement with Roosevelt Resources, LP regarding a business combination transaction. However, we may still seek to raise additional funds through debt or equity financings. The sale of additional equity would result in dilution to our stockholders. The incurrence of debt would result in debt service obligations, and the instruments governing such debt could provide for additional operating and financing covenants that would restrict operations. If we require additional funds and are unable to secure adequate additional funding at terms acceptable to us, we may be forced to reduce spending, extend payment terms with suppliers, liquidate assets, or initiate dissolution and liquidation or bankruptcy proceedings. Any of these actions could materially harm the business, results of operations and financial condition.
As noted above, through March 31, 2025, we have incurred substantial losses and may be required to obtain additional cash resources in the near term in order to support our operations and activities. The availability of required additional funding cannot be assured. In addition, an adverse outcome in legal or regulatory proceedings in which we are or could become involved could adversely affect our liquidity and financial position. No assurance can be given as to the timing or ultimate success of obtaining future funds. If we are not able to obtain additional required funding or if our business combination with Roosevelt Resources, LP is not completed, our cash resources would be significantly limited and could become depleted, and we could be required to materially reduce or suspend operations or seek dissolution and liquidation, or bankruptcy protection. In the event of dissolution and liquidation proceedings or bankruptcy proceedings, the creditors of Arcadia would have first claim on the value of the assets of Arcadia which, other than remaining cash, would most likely be liquidated in one or more transactions or a bankruptcy sale, and the common stock of Arcadia likely would have little or no value. Arcadia can give no assurance as to the magnitude of the net proceeds of such a sale and whether such proceeds and available cash would be sufficient to satisfy Arcadia’ obligations to its creditors, let alone to permit any distribution to its equity holders.
Liquidity
The following table summarizes total current assets, current liabilities and working capital for the dates indicated (in thousands):
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As of |
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As of |
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2025 |
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2024 |
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||
Current assets |
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$ |
8,846 |
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$ |
9,242 |
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Current liabilities |
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2,216 |
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2,563 |
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Working capital surplus |
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$ |
6,630 |
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$ |
6,679 |
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Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
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Three Months Ended March 31, |
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2025 |
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2024 |
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||
Net cash provided by (used in): |
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Operating activities |
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$ |
(1,588 |
) |
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$ |
(3,210 |
) |
Investing activities |
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500 |
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|
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4 |
|
Financing activities |
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5 |
|
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5 |
|
Net decrease in cash |
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$ |
(1,083 |
) |
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$ |
(3,201 |
) |
Cash flows from operating activities
Cash used in operating activities for the three months ended March 31, 2025, was $1.6 million. With respect to our net income of $2.6 million, non-cash charges including the change in fair value of common stock warrant and option liabilities of $1.9 million, change in fair value of contingent consideration of $1.0 million, amortization of note receivable discount of $69,000, a gain on sale of intangible assets of $750,000, adjustments in our working capital accounts of $582,000, and operating lease payments of $119,000 were offset by $13,000 of depreciation, $104,000 of lease amortization and $78,000 of stock-based compensation.
25
Cash used in operating activities for the three months ended March 31, 2024, was $3.2 million. With respect to our net loss of $2.4 million, non-cash charges including $51,000 of depreciation, $138,000 of stock-based compensation, $177,000 of lease amortization, and $36,000 of impairment of property and equipment, were offset by the change in fair value of common stock warrant and option liabilities of $593,000, adjustments in our working capital accounts of $329,000, and operating lease payments of $269,000.
Cash flows from investing activities
Cash provided by investing activities for the three months ended March 31, 2025 consisted of proceeds from the sale of intangible assets of $500,000.
Cash provided by investing activities for the three months ended March 31, 2024 consisted of proceeds of $17,000 from the sale of property and equipment, offset by $13,000 of purchases of property and equipment.
Cash flows from financing activities
Cash provided by financing activities for the three months ended March 31, 2025 consisted of proceeds from the purchase of ESPP shares of $5,000.
Cash provided by financing activities for the three months ended March 31, 2024 consisted of proceeds from the purchase of ESPP shares of $5,000.
Off-Balance Sheet Arrangements
Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities, or variable interest entities other than Verdeca, which was disposed of in November 2020.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We consider our critical accounting estimates to be revenue recognition, determination of the provision for income taxes, and net realizable value of inventory.
26
ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Required.
ITEM 4: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, or Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Our disclosure controls and procedures have been designed to meet reasonable assurance standards. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our President and Chief Executive Officer and our Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) identified in connection with the evaluation identified above that occurred during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
27
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. Please refer to Note 14 included in Part I, "Item 1. Notes to Condensed Consolidated Financial Statements" for a discussion of legal proceedings.
ITEM 1A. RISK FACTORS
In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, financial condition, liquidity or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity or future results.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During the quarter ended March 31, 2025, no director or “officer” (as defined in Rule 16a-1(f) under the Exchange Act) of the Company
28
ITEM 6. EXHIBITS
The following exhibits are attached hereto or are incorporated herein by reference.
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Incorporated by Reference |
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Filed Herewith |
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10.1**+ |
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Agreement between Bioceres and Arcadia dated as of March 28, 2025 |
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X |
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31.1 |
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X |
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31.2 |
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X |
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32.1(1) |
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Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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X |
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32.2(1) |
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Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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X |
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101.INS |
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Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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X |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
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X |
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104.1 |
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Cover page from the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, formatted in inline XBRL (and contained in Exhibit 101) |
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X |
(1) This certification is deemed not filed for purpose of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
+ Certain information has been excluded from this exhibit because it is not material and would likely cause competitive harm to the registrant if publicly disclosed.
** Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits upon request by the SEC.
29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Arcadia Biosciences, Inc. |
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May 8, 2025 |
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By: |
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/s/ THOMAS J. SCHAEFER |
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Thomas J. Schaefer |
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President and Chief Executive Officer |
May 8, 2025 |
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By: |
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/s/ MARK KAWAKAMI |
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Mark Kawakami |
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Chief Financial Officer |
30
Exhibit 10.1
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO ARCADIA BIOSCIENCES, INC. IF PUBLICLY DISCLOSED
AGREEMENT BETWEEN BIOCERES AND ARCADIA
This Agreement (the “Agreement”) is entered into as of March 28, 2025, by and between:
BIOCERES CROP SOLUTIONS, CORP., with its principal place of business located at Ocampo 210 bis, Rosario, 2000, Santa Fe, Argentina (“BIOCERES”), and
ARCADIA BIOSCIENCES, INC., with its principal place of business located at 5950 Sherry Lane, Suite 215, Dallas, Texas 75225 (“ARCADIA”).
WHEREAS, BIOCERES and ARCADIA wish to enter into a transaction where BIOCERES will transfer certain assets to ARCADIA, and ARCADIA will provide certain intellectual property rights and obligations in return;
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth below, the parties agree as follows:
BIOCERES agrees to transfer the following to ARCADIA:
In return for the transfer described in Section 1.1, ARCADIA agrees to provide the following to BIOCERES:
2.2.4 of the Master Transaction Agreement between the Bioceres and Arcadia, attached as Exhibit A. Arcadia has exclusivity licensed its relevant patents relating to RS durum wheat to Corteva, subject to the license rights granted to
Bioceres. This section addresses only royalties payable to Arcadia, not any future royalties that might or could be payable to Corteva.
$500,000 USD.
This Agreement shall be governed by and construed in accordance with the laws of New York, USA.
This Agreement constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior or contemporaneous agreements or understandings, whether written or oral, related to the subject matter.
This Agreement may be amended only by written agreement signed by authorized representatives of both BIOCERES and ARCADIA.
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
BIOCERES CROP SOLUTIONS, CORP.
By: /s/ Federico Trucco
Name: Federico Trucco
Title: CEO
Date: March 28, 2025
ARCADIA BIOSCIENCES, INC.
By: /s/ Thomas J. Schaefer
Name: Thomas J. Schaefer
Title: CEO
Date: March 28, 2025
Exhibit A
Master Transaction Agreement
DOCPROPERTY iManageFooter \* MERGEFORMAT #4666931v2
Schedule A
[***} Soybean Portfolio
[***]
DOCPROPERTY iManageFooter \* MERGEFORMAT #4666931v2
Schedule B
Oxidative Stability Wheat Portfolio
[***}
Reduced Gluten Wheat Portfolio
[***]
8
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas J. Schaefer, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Arcadia Biosciences, Inc. for the period ended March 31, 2025;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: May 8, 2025 |
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/s/ THOMAS J. SCHAEFER |
|
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Thomas J. Schaefer |
|
|
President and Chief Executive Officer |
|
|
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO EXCHANGE ACT RULE 13a-14(a)/15d-14(a)
AS ADOPTED PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
I, Mark Kawakami, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Arcadia Biosciences, Inc. for the period ended March 31, 2025;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Dated: May 8, 2025 |
|
/s/ MARK KAWAKAMI |
|
|
Mark Kawakami |
|
|
Chief Financial Officer |
|
|
(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying Quarterly Report of Arcadia Biosciences, Inc. (the “Company”), on Form 10-Q for the quarter ended March 31, 2025 (the “Report”), I, Thomas J. Schaefer, President and Chief Executive Officer of the Company, hereby certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that:
(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May 8, 2025 |
|
/s/ THOMAS J. SCHAEFER |
|
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Thomas J. Schaefer |
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|
President and Chief Executive Officer |
|
|
(Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the accompanying Quarterly Report of Arcadia Biosciences, Inc. (the “Company”), on Form 10-Q for the quarter ended March 31, 2025 (the “Report”), I, Mark Kawakami, Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002 that:
(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Dated: May 8, 2025 |
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/s/ MARK KAWAKAMI |
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Mark Kawakami |
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Chief Financial Officer |
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|
(Principal Financial Officer) |