0000950170-23-022199.txt : 20230515 0000950170-23-022199.hdr.sgml : 20230515 20230515160846 ACCESSION NUMBER: 0000950170-23-022199 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 74 CONFORMED PERIOD OF REPORT: 20230331 FILED AS OF DATE: 20230515 DATE AS OF CHANGE: 20230515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Arcadia Biosciences, Inc. CENTRAL INDEX KEY: 0001469443 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 810571538 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-37383 FILM NUMBER: 23922222 BUSINESS ADDRESS: STREET 1: 202 COUSTEAU PLACE STREET 2: SUITE 105 CITY: DAVIS STATE: X1 ZIP: 95618 BUSINESS PHONE: 530-756-7077 MAIL ADDRESS: STREET 1: 202 COUSTEAU PLACE STREET 2: SUITE 105 CITY: DAVIS STATE: CA ZIP: 95618 10-Q 1 rkda-20230331.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to

 

Commission File Number: 001-37383

 

Arcadia Biosciences, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

Delaware

81-0571538

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

5950 Sherry Lane, Suite 215

Dallas, TX

75225

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (214) 974-8921

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common

RKDA

NASDAQ CAPITAL MARKET

 

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. Yes No

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). Yes No ☐

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.

 

Large accelerated filer

 

Accelerated filer

 ☐

 

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

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 8, 2023, the registrant had 950,406 shares of common stock outstanding, $0.001 par value per share.

 


 

Arcadia Biosciences, Inc.

FORM 10-Q FOR THE QUARTER ENDED March 31, 2023

INDEX

 

 

Page

Part I —

Financial Information (Unaudited)

 

 

 

 

 

 

 

 

Item 1.

Condensed Consolidated Financial Statements:

 

1

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

1

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss

 

2

 

 

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Stockholders’ Equity

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows

 

4

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

5

 

 

 

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

17

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

24

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

24

 

 

 

 

Part II —

Other Information

 

25

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

25

 

 

 

 

 

 

Item 1A.

Risk Factors

 

25

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

25

 

 

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

25

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

25

 

 

 

 

 

 

Item 5.

Other Information

 

25

 

 

 

 

 

 

Item 6.

Exhibits

 

26

 

 

 

 

 

 

 

SIGNATURES

 

27

 

 


 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Arcadia Biosciences, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)

 

 

March 31, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

22,998

 

 

$

20,644

 

Accounts receivable and other receivables, net of allowance for doubtful accounts of
   $
18 and $3 as of March 31, 2023 and December 31, 2022, respectively

 

 

923

 

 

 

1,287

 

Inventories, net — current

 

 

2,591

 

 

 

2,571

 

Assets held for sale

 

 

87

 

 

 

87

 

Prepaid expenses and other current assets

 

 

606

 

 

 

809

 

Total current assets

 

 

27,205

 

 

 

25,398

 

Property and equipment, net

 

 

622

 

 

 

704

 

Right of use asset

 

 

1,618

 

 

 

1,848

 

Inventories, net — noncurrent

 

 

760

 

 

 

767

 

Intangible assets, net

 

 

40

 

 

 

40

 

Other noncurrent assets

 

 

165

 

 

 

165

 

Total assets

 

$

30,410

 

 

$

28,922

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

2,785

 

 

$

2,881

 

Amounts due to related parties

 

 

15

 

 

 

48

 

Operating lease liability — current

 

 

1,014

 

 

 

1,010

 

Other current liabilities

 

 

283

 

 

 

270

 

Total current liabilities

 

 

4,097

 

 

 

4,209

 

Operating lease liability — noncurrent

 

 

760

 

 

 

1,007

 

Common stock warrant and option liabilities

 

 

6,861

 

 

 

806

 

Other noncurrent liabilities

 

 

2,000

 

 

 

2,000

 

Total liabilities

 

 

13,718

 

 

 

8,022

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value—150,000,000 shares authorized as
   of March 31, 2023 and December 31, 2022;
857,572 and 616,079 shares issued
   and outstanding as of March 31, 2023 and December 31, 2022, respectively

 

 

65

 

 

 

65

 

Additional paid-in capital

 

 

284,003

 

 

 

278,827

 

Accumulated deficit

 

 

(267,243

)

 

 

(257,859

)

Total stockholders’ equity

 

 

16,825

 

 

 

21,033

 

Non-controlling interest

 

 

(133

)

 

 

(133

)

Total stockholders' equity

 

 

16,692

 

 

 

20,900

 

Total liabilities and stockholders’ equity

 

$

30,410

 

 

$

28,922

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

1


 

Arcadia Biosciences, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share data)

 

 

 

Three Months Ended March 31,

 

 

 

 

 

2023

 

 

 

2022

 

 

Revenues:

 

 

 

 

 

 

 

Product

 

$

1,509

 

 

$

3,170

 

 

Royalty

 

 

 

 

 

50

 

 

Total revenues

 

 

1,509

 

 

 

3,220

 

 

Operating expenses (income):

 

 

 

 

 

 

 

Cost of revenues

 

 

825

 

 

 

3,458

 

 

Research and development

 

 

359

 

 

 

395

 

 

Change in fair value of contingent consideration

 

 

 

 

 

(31

)

 

Gain on sale of property and equipment

 

 

(19

)

 

 

(328

)

 

Selling, general and administrative

 

 

4,392

 

 

 

4,349

 

 

Total operating expenses

 

 

5,557

 

 

 

7,843

 

 

Loss from operations

 

 

(4,048

)

 

 

(4,623

)

 

Interest income (expense)

 

 

198

 

 

 

(1

)

 

Other income, net

 

 

32

 

 

 

14

 

 

Valuation loss on March 2023 PIPE

 

 

(6,076

)

 

 

 

 

Change in fair value of common stock warrant and option liabilities

 

 

940

 

 

 

 

 

Issuance and offering costs allocated to liability classified options

 

 

(430

)

 

 

 

 

Net loss

 

 

(9,384

)

 

 

(4,610

)

 

Net loss attributable to non-controlling interest

 

 

 

 

 

(122

)

 

Net loss attributable to common stockholders

 

$

(9,384

)

 

$

(4,488

)

 

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

Basic and diluted

 

$

(10.86

)

 

$

(8.09

)

 

Weighted-average number of shares used in per share
   calculations:

 

 

 

 

 

 

 

Basic and diluted

 

 

864,391

 

 

 

554,675

 

 

 

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)

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Non-
Controlling

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Interest

 

 

Equity

 

Balance at December 31, 2022

 

 

616,079

 

 

$

65

 

 

$

278,827

 

 

$

(257,859

)

 

$

(133

)

 

$

20,900

 

Issuance of shares related to March 2023 PIPE

 

 

165,500

 

 

 

 

 

 

4,740

 

 

 

 

 

 

 

 

 

4,740

 

Modification of warrants related to March 2023 PIPE

 

 

 

 

 

 

 

 

219

 

 

 

 

 

 

 

 

 

219

 

Issuance of shares related to August 2022 pre-funded warrants exercise

 

 

56,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares related to employee stock
   purchase plan

 

 

88

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

5

 

Issuance of shares related to reverse stock split

 

 

19,092

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

212

 

 

 

 

 

 

 

 

 

212

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(9,384

)

 

 

 

 

 

(9,384

)

Balance at March 31, 2023

 

 

857,572

 

 

$

65

 

 

$

284,003

 

 

$

(267,243

)

 

$

(133

)

 

$

16,692

 

 

 

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated

 

 

Non-
Controlling

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Interest

 

 

Equity

 

Balance at December 31, 2021

 

 

554,609

 

 

$

63

 

 

$

257,515

 

 

$

(226,485

)

 

$

103

 

 

$

31,196

 

Reclassification upon adoption of ASU 2020-06

 

 

 

 

 

 

 

 

19,390

 

 

 

(15,998

)

 

 

 

 

 

3,392

 

Issuance of shares related to employee stock
   purchase plan

 

 

118

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

4

 

Stock-based compensation

 

 

 

 

 

 

 

 

260

 

 

 

 

 

 

 

 

 

260

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(4,488

)

 

 

(122

)

 

 

(4,610

)

Balance at March 31, 2022

 

 

554,727

 

 

$

63

 

 

$

277,169

 

 

$

(246,971

)

 

$

(19

)

 

$

30,242

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

3


 

Arcadia Biosciences, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

 

 

 

Three Months Ended March 31,

 

 

 

 

2023

 

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(9,384

)

 

$

(4,610

)

Adjustments to reconcile net loss to cash used in operating activities:

 

 

 

 

 

 

Change in fair value of common stock warrant and option liabilities

 

 

(940

)

 

 

 

Change in fair value of contingent consideration

 

 

 

 

 

(31

)

Issuance and offering costs allocated to liability classified options

 

 

430

 

 

 

 

Valuation loss on March 2023 PIPE

 

 

6,076

 

 

 

 

Depreciation

 

 

71

 

 

 

149

 

Amortization of intangible assets

 

 

 

 

 

13

 

Lease amortization

 

 

180

 

 

 

166

 

Gain on disposal of property and equipment

 

 

(19

)

 

 

(328

)

Stock-based compensation

 

 

212

 

 

 

260

 

Write-down of inventories

 

 

23

 

 

 

368

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable and other receivables

 

 

80

 

 

 

(1,398

)

Inventories

 

 

(37

)

 

 

669

 

Prepaid expenses and other current assets

 

 

203

 

 

 

208

 

Other noncurrent assets

 

 

 

 

 

22

 

Accounts payable and accrued expenses

 

 

(149

)

 

 

(198

)

Amounts due to related parties

 

 

(33

)

 

 

5

 

Other current liabilities

 

 

12

 

 

 

 

Operating lease liabilities

 

 

(191

)

 

 

(180

)

Net cash used in operating activities

 

 

(3,466

)

 

 

(4,885

)

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Proceeds from sale of property and equipment

 

 

30

 

 

 

787

 

Proceeds from sale of Verdeca — earn-out received

 

 

285

 

 

 

 

Purchases of property and equipment

 

 

 

 

 

(40

)

Net cash provided by investing activities

 

 

315

 

 

 

747

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from issuance of common stock, pre-funded warrants and
   preferred investment options from March 2023 PIPE

 

 

5,997

 

 

 

 

Payments of offering costs relating to March 2023 PIPE

 

 

(497

)

 

 

 

Proceeds from ESPP purchases

 

 

5

 

 

 

4

 

Net cash provided by financing activities

 

 

5,505

 

 

 

4

 

Net (decrease) increase in cash and cash equivalents

 

 

2,354

 

 

 

(4,134

)

Cash and cash equivalents — beginning of period

 

 

20,644

 

 

 

28,685

 

Cash and cash equivalents — end of period

 

$

22,998

 

 

$

24,551

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

Cash paid for interest

 

$

 

 

$

1

 

NONCASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Common stock warrant liabilities reclassifed to equity
    upon adoption of ASU 2020-06

 

$

 

 

$

3,392

 

Accrued legal and accounting fees included in offering
    costs related to March 2023 PIPE

 

$

51

 

 

$

 

Common stock options issued to placement agent and included in offering
    costs related to March 2023 PIPE

 

$

212

 

 

$

 

Warrant and option modifications included in Valuation loss on March
    2023 PIPE

 

$

404

 

 

$

 

Proceeds from sale of Verdeca in accounts receivable and other receivables

 

$

285

 

 

$

 

 

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 Arizona in 2002 and maintains its headquarters in Dallas, Texas, with additional office space in Davis, California, and additional facilities in American Falls, Idaho. The Company was reincorporated in Delaware in March 2015.

The Company is a producer and marketer of innovative, plant-based food and beverage products. Its history as a leader in science-based approaches to developing high-value crop improvements, as well as nutritionally enhanced food ingredients, has laid the foundation for its path forward. The Company used advanced breeding techniques to develop these proprietary innovations which are now being commercialized through the sales of seed and grain, as well as food ingredients and products. The acquisition of the assets of Live Zola, LLC (“Zola”) added coconut water to the Company's portfolio of products.

In May 2021, the Company’s wholly owned subsidiary Arcadia Wellness, LLC (“Arcadia Wellness” or “AW”) acquired the businesses of Eko, Lief, and Zola. The acquisition included consumer CBD brands like Soul Spring™, a CBD-infused botanical therapy brand in the natural category, Saavy Naturals™, a line of natural body care products and ProVault™, a CBD-infused sports performance formula made with natural ingredients, providing effective support and recovery for athletes. Also included in the purchase is Zola, a coconut water sourced exclusively with sustainably grown coconuts from Thailand. In July 2022,