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, 2022

☐ 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 7, 2022, the registrant had 24,642,960 shares of common stock outstanding, $0.001 par value per share.

Arcadia Biosciences, Inc.

FORM 10-Q FOR THE QUARTER ENDED September 30, 2022

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	22

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32

	Item 4.	Controls and Procedures	32

Part II —	Other Information		33

	Item 1.	Legal Proceedings	33

	Item 1A.	Risk Factors	33

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

	Item 3.	Defaults Upon Senior Securities	34

	Item 4.	Mine Safety Disclosures	34

	Item 5.	Other Information	34

	Item 6.	Exhibits	35

SIGNATURES			36

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Arcadia Biosciences, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)


	September 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	22,719		$	28,685
Accounts receivable and other receivables, net of allowance for doubtful accounts of $13 and $76 as of September 30, 2022 and December 31, 2021, respectively		2,726			1,370
Inventories, net — current		3,342			4,433
Assets held for sale		254			—
Prepaid expenses and other current assets		990			900
Total current assets		30,031			35,388
Property and equipment, net		848			2,291
Right of use asset		2,073			3,081
Inventories, net — noncurrent		984			2,494
Intangible assets, net		373			484
Other noncurrent assets		165			180
Total assets	$	34,474		$	43,918
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	2,748		$	3,638
Amounts due to related parties		47			64
Operating lease liability — current		986			1,074
Other current liabilities		270			264
Total current liabilities		4,051			5,040
Operating lease liability — noncurrent		1,269			2,220
Common stock warrant and option liabilities		2,135			3,392
Other noncurrent liabilities		2,000			2,070
Total liabilities		9,455			12,722
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, $0.001 par value—150,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 24,642,960 and 22,184,235 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		65			63
Additional paid-in capital		278,618			257,515
Accumulated deficit		(253,615	)		(226,485	)
Total stockholders’ equity		25,068			31,093
Non-controlling interest		(49	)		103
Total stockholders' equity		25,019			31,196
Total liabilities and stockholders’ equity	$	34,474		$	43,918

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,
		2022			2021			2022			2021
Revenues:
Product	$	1,851		$	2,324		$	7,967		$	4,506
Royalty		17			35			117			86
License		10			17			872			17
Total revenues		1,878			2,376			8,956			4,609
Operating expenses (income):
Cost of revenues		1,344			2,511			8,250			4,954
Research and development		255			1,038			1,009			3,328
Gain on sale of Verdeca		—			—			(1,138	)		—
Impairment of intangible assets		—			120			72			120
Change in fair value of contingent consideration		—			—			(70	)		(140	)
Impairment of property and equipment		24			1,108			370			1,319
(Gain) loss on sale of property and equipment		—			—			(386	)		17
Selling, general and administrative		4,835			6,312			13,834			16,733
Total operating expenses		6,458			11,089			21,941			26,331
Loss from operations		(4,580	)		(8,713	)		(12,985	)		(21,722	)
Interest income (expense)		95			(15	)		123			(23	)
Other income (expense), net		43			(7	)		13			10,214
Change in fair value of common stock warrant and option liabilities		1,880			4,777			1,880			4,601
Gain on extinguishment of PPP loan		—			1,123			—			1,123
Issuance and offering costs		(314	)		—			(314	)		(769	)
Net loss before income taxes		(2,876	)		(2,835	)		(11,283	)		(6,576	)
Income tax provision		(1	)		(1	)		(1	)		(1	)
Net loss		(2,877	)		(2,836	)		(11,284	)		(6,577	)
Net loss attributable to non-controlling interest		(10	)		(661	)		(152	)		(1,199	)
Net loss attributable to common stockholders	$	(2,867	)	$	(2,175	)	$	(11,132	)	$	(5,378	)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.12	)	$	(0.10	)	$	(0.48	)	$	(0.26	)
Weighted-average number of shares used in per share calculations:
Basic and diluted		24,552,543			22,177,423			22,984,816			20,976,105
Other comprehensive loss, net of tax
Foreign currency translation adjustment		—			(12	)		—			(24	)
Other comprehensive loss		—			(12	)		—			(24	)
Comprehensive loss attributable to common stockholders	$	(2,867	)	$	(2,187	)	$	(11,132	)	$	(5,402	)

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			Non- Controlling			Total Stockholders’
	Shares		Amount		Capital			Deficit			Interest			Equity
Balance at December 31, 2021		22,184,235	$	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		4,683		—		4			—			—			4
Stock-based compensation		—		—		260			—			—			260
Net loss		—		—		—			(4,488	)		(122	)		(4,610	)
Balance at March 31, 2022		22,188,918	$	63	$	277,169		$	(246,971	)	$	(19	)	$	30,242
Stock-based compensation		—		—		323			—			—			323
Net loss		—		—		—			(3,777	)		(20	)		(3,797	)
Balance at June 30, 2022		22,188,918	$	63	$	277,492		$	(250,748	)	$	(39	)	$	26,768
Issuance of shares related to August 2022 Offering		2,450,000		2		1,174			—			—			1,176
Offering costs related to August 2022 Offering		—		—		(365	)		—