SEC Filing | Arcadia Biosciences, Inc.

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10-Q

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 September 30, 2021

☐ 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.)
202 Cousteau Place, Suite 105 Davis, CA	95618
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (530) 756-7077

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.

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 November 8, 2021, the registrant had 22,184,235 shares of common stock outstanding, $0.001 par value per share.

Arcadia Biosciences, Inc.

FORM 10-Q FOR THE QUARTER ENDED September 30, 2021

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	23

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34

	Item 4.	Controls and Procedures	34

Part II —	Other Information		35

	Item 1.	Legal Proceedings	35

	Item 1A.	Risk Factors	35

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

	Item 3.	Defaults Upon Senior Securities	35

	Item 4.	Mine Safety Disclosures	35

	Item 5.	Other Information	35

	Item 6.	Exhibits	36

SIGNATURES			37

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Arcadia Biosciences, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)


	September 30, 2021			December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	35,526		$	14,042
Short-term investments		—			11,625
Accounts receivable		1,453			1,406
Inventories, net — current		5,447			3,812
Prepaid expenses and other current assets		1,408			811
Total current assets		43,834			31,696
Restricted cash		—			2,001
Property and equipment, net		2,634			3,539
Right of use asset		3,486			5,826
Inventories, net — noncurrent		3,539			3,485
Goodwill		1,648			408
Intangible assets, net		3,905			370
Other noncurrent assets		182			23
Total assets	$	59,228		$	47,348
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	5,004		$	4,105
Amounts due to related parties		51			80
Debt — current		36			1,141
Unearned revenue — current		—			8
Operating lease liability — current		1,134			717
Other current liabilities		264			263
Total current liabilities		6,489			6,314
Debt — noncurrent		78			2,105
Operating lease liability — noncurrent		2,562			5,389
Common stock warrant liabilities		7,736			2,708
Other noncurrent liabilities		2,140			2,280
Total liabilities		19,005			18,796
Commitments and contingencies (Note 17)
Stockholders’ equity:
Common stock, $0.001 par value—150,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 22,184,235 and 13,450,861 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		63			54
Additional paid-in capital		257,009			239,496
Accumulated other comprehensive income		(24	)		—
Accumulated deficit		(217,203	)		(211,825	)
Total Arcadia Biosciences stockholders’ equity		39,845			27,725
Non-controlling interest		378			827
Total stockholders' equity		40,223			28,552
Total liabilities and stockholders’ equity	$	59,228		$	47,348

See accompanying notes to the unaudited condensed consolidated financial statements.

Arcadia Biosciences, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share data)


	Three Months Ended September 30,						Nine Months Ended September 30,
		2021			2020			2021			2020
Revenues:
Product	$	2,324		$	245		$	4,506		$	630
License		17			10			17			110
Royalty		35			16			86			58
Contract research and government grants		—			43			—			106
Total revenues		2,376			314			4,609			904
Operating expenses:
Cost of product revenues		2,511			1,841			4,954			3,463
Research and development		1,038			1,762			3,328			5,999
Impairment of intangible assets		120			—			120			—
Change in fair value of contingent consideration		—			—			(140	)		—
Write-down of fixed assets		1,108			—			1,319			—
Selling, general and administrative		6,312			4,292			16,750			11,689
Total operating expenses		11,089			7,895			26,331			21,151
Loss from operations		(8,713	)		(7,581	)		(21,722	)		(20,247	)
Interest expense		(15	)		(23	)		(23	)		(32	)
Other (expense) income, net		(7	)		—			10,214			83
Change in fair value of common stock warrant liabilities		4,777			1,130			4,601			6,212
Loss on extinguishment of warrant liability		—			(682	)		—			(635	)
Gain on extinguishment of PPP loan		1,123			—			1,123			—
Issuance and offering costs		—			—			(769	)		—
Net loss before income taxes		(2,835	)		(7,156	)		(6,576	)		(14,619	)
Income tax provision		(1	)		(9	)		(1	)		(15	)
Net loss		(2,836	)		(7,165	)		(6,577	)		(14,634	)
Net loss attributable to non-controlling interest		(661	)		(774	)		(1,199	)		(1,081	)
Net loss attributable to common stockholders	$	(2,175	)	$	(6,391	)	$	(5,378	)	$	(13,553	)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.10	)	$	(0.60	)	$	(0.26	)	$	(1.42	)
Weighted-average number of shares used in per share calculations:
Basic and diluted		22,177,423			10,719,618			20,976,105			9,570,259
Other comprehensive loss, net of tax
Unrealized losses on investment securities		—			—			—			(1	)
Foreign currency translation adjustment		(12	)		—			(24	)		—
Other comprehensive loss		(12	)		—			(24	)		(1	)
Comprehensive loss attributable to common stockholders	$	(2,187	)	$	(6,391	)	$	(5,402	)	$	(13,554	)

See accompanying notes to the unaudited condensed consolidated financial statements.

Arcadia Biosciences, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands, except share data)


	Common Stock				Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Non- Controlling			Total Stockholders’
	Shares		Amount		Capital			Deficit			Loss			Interest			Equity
Balance at December 31, 2020		13,450,861	$	54	$	239,496		$	(211,825	)	$	—		$	827		$	28,552
Issuance of shares related to the January 2021 PIPE		7,876,784		8		15,508			—			—			—			15,516
Offering costs related to the January 2021 PIPE		—		—		(2,084	)		—			—			—			(2,084	)
Issuance of placement agent warrants related to issuance of January 2021 PIPE		—		—		942			—			—			—			942
Issuance of shares related to employee stock purchase plan		8,604		—		21			—			—			—			21
Non-controlling interest capital contribution		—		—		—			—			—			750			750
Stock-based compensation		—		—		325			—			—			—			325
Net income		—		—		—			2,058			—			(377	)		1,681
Balance at March 31, 2021		21,336,249	$	62	$	254,208		$	(209,767	)	$	—		$	1,200		$	45,704
Issuance of shares at closing of Arcadia Wellness acquisition		827,401		1		2,052			—			—			—			2,053
Foreign currency translation adjustment		—		—		—			—			(12	)		—			(12	)
Stock-based compensation		—		—		356			—			—			—			356
Net loss		—		—		—			(5,261	)		—			(161	)		(5,422	)
Balance at June 30, 2021		22,163,650	$	63	$	256,616		$	(215,028	)	$	(12	)	$	1,039		$	42,678
Issuance of shares related to employee stock purchase plan		6,585		—		17			—			—			—			17
Foreign currency translation adjustment		—		—		—			—			(12	)		—			(12	)
Stock-based compensation		—		—		354			—			—			—			354
Issuance of shares related to exercise of Service and Performance Warrants		14,000		—		22			—			—