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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 September 30, 2022

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.)

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.

 

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 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.

1


 

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.

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, 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

)