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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, 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 November 2, 2023, the registrant had 1,110,337 shares of common stock outstanding, $0.001 par value per share.

 


 

Arcadia Biosciences, Inc.

FORM 10-Q FOR THE QUARTER ENDED September 30, 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

 

18

 

 

 

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

28

 

 

 

 

 

 

Item 4.

Controls and Procedures

 

28

 

 

 

 

Part II —

Other Information

 

29

 

 

 

 

 

 

Item 1.

Legal Proceedings

 

29

 

 

 

 

 

 

Item 1A.

Risk Factors

 

29

 

 

 

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

29

 

 

 

 

 

 

Item 3.

Defaults Upon Senior Securities

 

29

 

 

 

 

 

 

Item 4.

Mine Safety Disclosures

 

29

 

 

 

 

 

 

Item 5.

Other Information

 

29

 

 

 

 

 

 

Item 6.

Exhibits

 

30

 

 

 

 

 

 

 

SIGNATURES

 

31

 

 


 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Arcadia Biosciences, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)

 

 

September 30, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

10,611

 

 

$

20,644

 

Short-term investments

 

 

5,089

 

 

 

 

Accounts receivable and other receivables, net of allowance for doubtful accounts of
   $
0 and $3 as of September 30, 2023 and December 31, 2022, respectively

 

 

304

 

 

 

1,221

 

Inventories, net — current

 

 

2,657

 

 

 

2,321

 

Assets held for sale

 

 

87

 

 

 

87

 

Prepaid expenses and other current assets

 

 

1,093

 

 

 

795

 

Current assets of discontinued operations

 

 

165

 

 

 

330

 

Total current assets

 

 

20,006

 

 

 

25,398

 

Property and equipment, net

 

 

468

 

 

 

680

 

Right of use asset

 

 

1,147

 

 

 

1,848

 

Inventories, net — noncurrent

 

 

1,624

 

 

 

767

 

Intangible assets, net

 

 

40

 

 

 

40

 

Other noncurrent assets

 

 

181

 

 

 

165

 

Noncurrent assets of discontinued operations

 

 

 

 

 

24

 

Total assets

 

$

23,466

 

 

$

28,922

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

2,602

 

 

$

2,855

 

Amounts due to related parties

 

 

46

 

 

 

48

 

Operating lease liability — current

 

 

924

 

 

 

1,010

 

Other current liabilities

 

 

282

 

 

 

270

 

Current liabilities of discontinued operations

 

 

31

 

 

 

26

 

Total current liabilities

 

 

3,885

 

 

 

4,209

 

Operating lease liability — noncurrent

 

 

347

 

 

 

1,007

 

Common stock warrant and option liabilities

 

 

1,836

 

 

 

806

 

Other noncurrent liabilities

 

 

2,000

 

 

 

2,000

 

Total liabilities

 

 

8,068

 

 

 

8,022

 

Commitments and contingencies (Note 13)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Common stock, $0.001 par value—150,000,000 shares authorized as
   of September 30, 2023 and December 31, 2022;
1,110,337 and 616,079 shares issued
   and outstanding as of September 30, 2023 and December 31, 2022, respectively

 

 

65

 

 

 

65

 

Additional paid-in capital

 

 

284,371

 

 

 

278,827

 

Accumulated other comprehensive income

 

 

87

 

 

 

 

Accumulated deficit

 

 

(268,987

)

 

 

(257,859

)

Total stockholders’ equity

 

 

15,536

 

 

 

21,033

 

Non-controlling interest

 

 

(138

)

 

 

(133

)

Total stockholders' equity

 

 

15,398

 

 

 

20,900

 

Total liabilities and stockholders’ equity

 

$

23,466

 

 

$

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

1,597

 

 

$

1,543

 

 

$

4,150

 

 

$

5,685

 

Royalty

 

 

 

 

 

17

 

 

 

 

 

 

117

 

License

 

 

 

 

 

10

 

 

 

10

 

 

 

872

 

Total revenues

 

 

1,597

 

 

 

1,570

 

 

 

4,160

 

 

 

6,674

 

Operating expenses (income):

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

1,102

 

 

 

1,128

 

 

 

2,630

 

 

 

5,201

 

Research and development

 

 

305

 

 

 

255

 

 

 

1,055

 

 

 

1,009

 

Gain on sale of Verdeca

 

 

 

 

 

 

 

 

 

 

 

(1,138

)

Change in fair value of contingent consideration

 

 

 

 

 

 

 

 

 

 

 

(70

)

Gain on sale of property and equipment

 

 

(11

)

 

 

 

 

 

(36

)

 

 

(386

)

Selling, general and administrative

 

 

3,443

 

 

 

4,178

 

 

 

11,085

 

 

 

11,407

 

Total operating expenses

 

 

4,839

 

 

 

5,561

 

 

 

14,734

 

 

 

16,023

 

Loss from continuing operations

 

 

(3,242

)

 

 

(3,991

)

 

 

(10,574

)

 

 

(9,349

)

Interest income

 

 

133

 

 

 

95

 

 

 

538

 

 

 

123

 

Other income, net

 

 

17

 

 

 

43

 

 

 

36

 

 

 

13

 

Valuation loss on March 2023 PIPE

 

 

 

 

 

 

 

 

(6,076

)

 

 

 

Change in fair value of common stock warrant and option liabilities

 

 

608

 

 

 

1,880

 

 

 

5,965

 

 

 

1,880

 

Issuance and offering costs allocated to liability classified options

 

 

 

 

 

(314

)

 

 

(430

)

 

 

(314

)

Net loss from continuing operations before income taxes

 

 

(2,484

)

 

 

(2,287

)

 

 

(10,541

)

 

 

(7,647

)

Income tax provision

 

 

 

 

 

(1

)

 

 

(1

)

 

 

(1

)

Net loss from continuing operations

 

 

(2,484

)

 

 

(2,288

)

 

 

(10,542

)

 

 

(7,648

)

Net loss from discontinued operations

 

 

(83

)

 

 

(589

)

 

 

(591

)

 

 

(3,636

)

Net loss

 

 

(2,567

)

 

 

(2,877

)

 

 

(11,133

)

 

 

(11,284

)

Net loss attributable to non-controlling interest

 

 

 

 

 

(10

)

 

 

(5

)

 

 

(152

)

Net loss attributable to common stockholders

 

$

(2,567

)

 

$

(2,867

)

 

$

(11,128

)

 

$

(11,132

)

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted from continuing operations

 

$

(1.83

)

 

$

(3.71

)

 

$

(8.81

)

 

$

(13.05

)

Basic and diluted from discontinued operations

 

$

(0.06

)

 

$

(0.96

)

 

$

(0.49

)

 

$

(6.33

)

Net loss per basic and diluted share attributable to common stockholders

 

$

(1.89

)

 

$

(4.67

)

 

$

(9.31

)

 

$

(19.37

)

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

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

1,359,511

 

 

 

613,814

 

 

 

1,195,354

 

 

 

574,621

 

Other comprehensive income, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains on available-for-sale securities

 

$

66

 

 

$

 

 

$

87

 

 

$

 

Other comprehensive income

 

$

66

 

 

$

 

 

$

87

 

 

$

 

Comprehensive loss attributable to common stockholders

 

$

(2,501

)

 

$

(2,867

)

 

$

(11,041

)

 

$

(11,132

)

 

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

 

 

Accumulated Other

 

 

Non-
Controlling

 

 

Total
Stockholders’

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Comprehensive Income

 

 

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

 

Issuance of shares related to March 2023 pre-funded warrants exercise

 

 

250,834

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of shares related to reverse stock split

 

 

26

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

199

 

 

 

 

 

 

 

 

 

 

 

 

199

 

Unrealized gains on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

 

 

 

 

 

 

21

 

Net income

 

 

 

 

 

 

 

 

 

 

 

823

 

 

 

 

 

 

(5

)

 

 

818

 

Balance at June 30, 2023

 

 

1,108,432

 

 

$

65

 

 

$

284,202

 

 

$

(266,420

)

 

$

21

 

 

$

(138

)

 

$

17,730

 

Issuance of shares related to employee stock
   purchase plan

 

 

1,905

 

 

 

 

 

 

7

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Stock-based compensation

 

 

 

 

 

 

 

 

162

 

 

 

 

 

 

 

 

 

 

 

 

162

 

Unrealized gains on available-for-sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

66

 

 

 

 

 

 

66

 

Net loss