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What changed in Arcadia Biosciences, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Arcadia Biosciences, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+208 added−293 removedSource: 10-K (2025-03-25) vs 10-K (2024-03-28)

Top changes in Arcadia Biosciences, Inc.'s 2024 10-K

208 paragraphs added · 293 removed · 110 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThese numbers do not include in-licensed patents for which we either do not have exclusive rights (such as certain enabling technology 5 Table of Contents licenses), or for which we have exclusive rights only in a limited field of use or do not control prosecution and maintenance of the licensed patents.
Biggest changeThese numbers do not include in-licensed patents for which we either do not have exclusive rights (such as certain enabling technology licenses), or for which we have exclusive rights only in a limited field of use or do not control prosecution and maintenance of the licensed patents. 3 Table of Contents As of December 31, 2024, we had four registered trademarks and two pending trademark applications in the United States, and five trademark registrations in various other countries; and our wholly-owned subsidiary Arcadia Wellness, LLC had nine registered trademarks in the United States.
The acquisition included Saavy Naturals™, a line of natural body care products, Soul Spring™, a CBD-infused botanical therapy brand in the natural category, and ProVault™, a THC-free CBD sports performance formula made with natural ingredients, providing effective support and recovery for athletes (collectively "body care brands").
The acquisition included Saavy Naturals™, a line of natural body care products, Soul Spring™, a CBD-infused botanical therapy brand in the natural category, and ProVault™, a THC-free CBD sports performance formula made with natural ingredients, providing effective support and recovery for athletes (collectively, “body care brands”).
We make these materials available through our website as soon as reasonably practicable after we electronically file such materials with, or furnish such materials to, the SEC. The information contained in, or that can be accessed through, our website is not part of this Report. 7 Table of Contents
We make these materials available through our website as soon as reasonably practicable after we electronically file such materials with, or furnish such materials to, the SEC. The information contained in, or that can be accessed through, our website is not part of this Report.
Also included in the purchase is Zola, a coconut water sourced exclusively with sustainably grown coconuts from Thailand. On July 8, 2022, the Company entered into an agreement to license Saavy Naturals to Radiance Beauty and Wellness, Inc. ("Radiance Beauty").
Also included in the purchase was Zola, a coconut water sourced exclusively with sustainably grown coconuts from Thailand. In July 2022, the Company entered into an agreement to license Saavy Naturals to Radiance Beauty and Wellness, Inc. (“Radiance Beauty”).
These totals reflect the following: (i) with respect to the U.S. territory, we owned 24 and exclusively in-licensed 2 U.S. issued patents, and we owned 6 U.S. patent applications and 6 plant variety protection certificates relating to our plants, trait technologies, and business methods; and (ii) in connection with foreign territories, we owned 29 and exclusively in-licensed 18 foreign issued patents, and owned 32 pending foreign patent applications.
These totals reflect the following: (i) with respect to the U.S. territory, we owned 24 issued patents, and we owned six U.S. patent applications and six plant variety protection certificates relating to our plants and trait technologies; and (ii) in connection with foreign territories, we owned 54 and exclusively in-licensed three foreign issued patents, and owned 18 pending foreign patent applications.
As of December 31, 2023, we owned or exclusively controlled 73 issued patents, 38 pending patent applications worldwide, and 6 plant variety protection certificates.
As of December 31, 2024, we owned or exclusively controlled 79 issued patents, 24 pending patent applications worldwide, and six plant variety protection certificates.
In July 2023, management made the decision to exit the remaining body care brands, Soul Spring and ProVault, as a result of continued pressure on the CBD market due to regulatory uncertainty. Body care operations ceased as of September 30, 2023. 2 Table of Contents Our Product Portfolio Most Americans suffer from a significant fiber deficiency.
In July 2023, Arcadia’s management made the decision to exit the remaining body care brands, Soul Spring and ProVault, as a result of continued pressure on the CBD market due to regulatory uncertainty. Body care operations ceased during the third quarter of 2023.
As of December 31, 2023, our GoodWheat® portfolio included 15 U.S. issued patents, 6 U.S. patent applications, 1 plant variety certificate, 27 foreign issued patents and 26 foreign patent applications. With respect to all of the foregoing patent and plant protection assets, our exclusive licenses afford us control over the prosecution and maintenance of the licensed patents and patent applications.
With respect to all of the foregoing patent and plant protection assets, our exclusive licenses afford us control over the prosecution and maintenance of the licensed patents and patent applications.
We ensure all of our plant materials are accounted for, tracked and inventoried, which enables us to maintain direct control and proper documentation. Intellectual Property We rely on patents and other proprietary right protections, including trade secrets and contractual protection of our proprietary know-how and confidential information, to preserve our competitive position.
We intend to seek to monetize our proprietary technology, including through possible asset sale transactions. Intellectual Property We rely on patents and other proprietary right protections, including trade secrets and contractual protection of our proprietary know-how and confidential information, to preserve our competitive position.
We compete with both large, established manufacturers, as well as small, innovative producers of pasta and beverage products. There are several companies working to improve genetics in crops, such as wheat, that may compete with the trait used in our GoodWheat products.
Competition The markets for beverage products are highly competitive, and we face significant direct and indirect competition in several aspects of our business. We compete with both large, established manufacturers, as well as small, innovative producers of beverage products. The beverage industry is competitive.
Item 1. Business. Overview We are a producer and marketer of innovative, plant-based food and beverage products.
Item 1. Business. Overview Prior to its transfer and sale during 2024 of the various assets described below, Arcadia was a producer and marketer of innovative, plant-based products.
Our competitors have similar distribution channels and retailers to deliver and sell their products. Competitors in this space include Vita Coco, ZICO, C20 and Harmless Harvest. Employees As of December 31, 2023, we had 21 employees with 14 in management, operations, accounting/finance, legal and administration. We believe our employee relations to be good.
Competitors in this market compete for brand recognition, ingredient sourcing, product shelf space, and e-commerce page rankings. Our competitors have similar distribution channels and retailers to deliver and sell their products. Competitors in this space include Vita Coco, ZICO, C20 and Harmless Harvest.
We have used non-genetically modified (“non-GMO”) advanced breeding techniques to develop these proprietary innovations which we are now commercializing through the sales of seed and grain, food ingredients and products, trait licensing and royalty agreements. The acquisition of the assets of Live Zola, LLC (“Zola”) added coconut water to our portfolio of products.
Arcadia sought to be a leader in science-based approaches to developing high value crop improvements, primarily in wheat which it commercialized through the sales of seed, grain, food ingredients and products, and through trait licensing and royalty agreements. The acquisition of the assets of Live Zola, LLC (“Zola”) in May 2021 added coconut water to Arcadia’s portfolio of products.
As a result, we plan to continue to invest in trial-driving activities and expand distribution of our Zola coconut water brand through mass market retailers and grocery store chains. Arcadia Wellness, LLC In May 2021, our wholly owned subsidiary Arcadia Wellness, LLC (“Arcadia Wellness” or “AW”), acquired the businesses of Eko, Lief, and Zola.
In May 2021, Arcadia’s wholly owned subsidiary Arcadia Wellness, LLC (“Arcadia Wellness”), acquired the businesses of Eko Holdings, LLC, Lief, LLC.
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Our history as a leader in science-based approaches to developing high value crop improvements, primarily in wheat, designed to enhance farm economics by improving the performance of crops in the field, as well as their value as food ingredients, has laid the foundation for our path forward.
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On May 14, 2024, Arcadia sold its non-GMO Resistant Starch (“RS”) durum wheat trait to longtime partner Corteva Agriscience (“Corteva”) for total cash consideration of $4.0 million. Under the terms of the agreement, Arcadia retained certain rights to use the RS durum wheat trait. Refer to Note 11 to the consolidated financial statements for further details of the transaction.
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Our commercial strategy is to satisfy consumer nutrition demands with the superior functional benefits our crops deliver directly from the farm, enabling us to share premium economics throughout the ag-food supply chain and to build a world-class estate of high value traits and varieties. The acquisition of the Zola brand allows us to broaden our reach within the beverage sector.
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On May 16, 2024, Arcadia sold the GoodWheat™ brand to Above Food for net consideration of $3.7 million. The strategic decision to sell GoodWheat enabled the Company to monetize its intellectual property early. The assets sold consisted primarily of grain and finished goods inventories, formulations and trademarks.
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Our Growth Strategy We believe there are significant opportunities to grow our business by executing the following elements of our strategy: • Accelerate the monetization of our GoodWheat™ wheat trait portfolio. Our proprietary intellectual property ("IP") with multiple non-GMO wheat traits have clear functional benefits, and we will continue to build partnerships across the wheat value chain.
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The disposition of GoodWheat met the "held for sale" criteria per ASC 205-20-45-1B and represented a strategic shift that had a major effect on the Company's operations and financial results. As a result, the Company's financial statements and related notes as of December 31, 2024 and 2023 reflect the GoodWheat disposition as a discontinued operation.
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We have launched GoodWheat into multiple categories where our wheat provides a compelling point-of-difference and we will continue to evaluate ways to extract value throughout the supply chain. • Evaluate scale M&A opportunities. We intend to evaluate potential mergers, acquisitions, and other strategic opportunities that will allow us to scale the GoodWheat value proposition more quickly.
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The disposition of GoodWheat resulted in a loss of $1,500 during the year ended December 31, 2024. Refer to Notes 4 and 8 to the consolidated financial statements for further details of the transaction. Recent Developments On December 4, 2024, Arcadia, Roosevelt Resources LP (“Roosevelt” or the “Partnership”) and Elliott Roosevelt, Jr. and David A.
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We believe there is a significant opportunity to integrate our wheat IP and GoodWheat brand into larger businesses and drive shareholder value. • Scale Zola through retail expansion. Based on our research, consumers prefer the clean, crisp taste of Zola to that of other leading coconut water brands.
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Roosevelt, in their capacities as representatives of the limited partners of the Partnership (the “LP Representatives”) entered into a Securities Exchange Agreement (as it may be amended from time to time, the “Exchange Agreement”).
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The recommended daily value of fiber is 25g for women and children, and 38g for men according to the May 2021 Food and Health Survey by the International Food Information Council. However, less than 10 percent of women and less than 3 percent of men get enough fiber in their daily diets.
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Subject to the terms of the Exchange Agreement and to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, at the closing of the transactions contemplated by the Exchange Agreement (the "Closing"), Arcadia agreed to issue shares of its common stock (“Arcadia common stock,” “Common Stock” or “common stock”) to the limited partners of Roosevelt in exchange for all of the limited partnership interests of Roosevelt and to the sole member of the general partner of Roosevelt (together with the limited partners, referred to collectively as the “Limited Partners”) in exchange for its membership interest (together with the limited partnership interests of the Limited Partners, sometimes referred to as the “Partner Interests”) in the limited liability company that is the general partner of Roosevelt (such exchange, contributions and issuances referred to as the “Exchange”).
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Our GoodWheat portfolio of better-for-you products addresses these needs as they are naturally higher in fiber and protein than traditional wheat without sacrificing on taste or texture. GoodWheat™ Pasta In June 2022, we launched our GoodWheat pasta in five varieties – penne, spaghetti, fettuccine, elbows and rotini – in select retailers nationwide and on Amazon.
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As a result of the Exchange, Arcadia will continue and Roosevelt will continue as a wholly owned subsidiary of Arcadia.
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Our pasta delivers 4 times the fiber of traditional wheat pasta with 9g of protein per serving and no sacrifice on taste. In fact, our research shows that GoodWheat pasta scores at parity on taste with leading wheat pasta competitors and significantly outscores market leading vegetable-based pastas.
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Upon completion of the Exchange, and based on the number of shares issuable pursuant to the Exchange Agreement, we estimate that the Limited Partners and the Arcadia stockholders as of immediately prior to the Closing will collectively own approximately 90% and 10%, respectively, of the shares of common stock of Arcadia outstanding immediately after the Closing.
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Made with only our USA farm grown wheat, GoodWheat pasta meets consumers’ preference for clean labels and transparent sourcing. And, in December of 2022, GoodWheat received the American Heart Association’s Heart-Check mark on all of our pasta products.
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These percentages are estimates, are subject to 2 Table of Contents certain assumptions and are subject to potential adjustment prior to the Closing, including as a result of changes in the number of outstanding shares of Arcadia common stock.
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With its high fiber, lower sodium and zero saturated fat, GoodWheat meets the criteria for a heart-healthy pasta and provides consumers with a better-for-you option that delivers superior nutrition with the taste and texture of traditional pasta.
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As a result, Arcadia stockholders and the former Roosevelt Limited Partners could own a greater, or a lesser, percentage of the outstanding shares of Arcadia immediately after the Closing than the estimates set forth above.
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GoodWheat™ Pancakes and Waffle Mixes In August 2023, we launched our GoodWheat into the breakfast category with new, better-for-you pancake and waffle mixes as well as single-serve Quikcakes™. Our new mixes are made with simple ingredients and Arcadia’s proprietary wheat grain, which is naturally higher in fiber and protein than traditional wheat.
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On February 14, 2025, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission ("SEC") relating to the shares to be issued in the transaction.
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GoodWheat pancake and waffle mixes are sold in resealable, multi-serve pouches, with each serving delivering 8 times the fiber of traditional pancake mix and 5 grams of protein. Our multi-serve mixes will be available in 3 classic varieties, including Buttermilk, Chocolate Chocolate Chip and Apple Cinnamon.
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The registration statement also included a proxy statement/prospectus relating to a special meeting of stockholders of the Company to be held to approve the issuance of shares pursuant to the Exchange Agreement and related proposals.
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GoodWheat Quikcakes are an innovative, single-serve instant pancake that is a great option for busy mornings – you simply pour one packet into a bowl, add water and microwave for 90 seconds. Quikcakes have 11 times the fiber of traditional single-serve pancake mixes and contain 7 grams of protein per serving.
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As part of the proposals to be submitted to the stockholders at the planned upcoming meeting of stockholders of the Company to vote on various proposals relating to the transactions contemplated by the Exchange Agreement, one of the proposals is to give the board of directors (the "Board") the authority to effect a reverse stock split, should the Board determine that a reverse stock split is appropriate in light of, among other factors, the Company’s listing application to Nasdaq in connection with the transactions contemplated by the Exchange Agreement.
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Quikcakes are available in 3 flavors, including Buttermilk, Chocolate Chocolate Chip and Confetti. GoodWheat™ Mac and Cheese In November 2023, we announced the third GoodWheat category, Mac and Cheese. Our Mac and Cheese is made with real cheese and contains no artificial flavors, dyes or preservatives and are available in three varieties: Classic Cheddar, White Cheddar and Three Cheese.
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Our Products Zola Coconut Water Founded in 2002, Zola became part of the Arcadia family of brands in May 2021. Sourced from Thailand, Zola is a pure, natural, 100% coconut water with a crisp, clean taste that’s slightly sweet and refreshing. Naturally hydrating and rich in electrolytes, Zola is Non-GMO Project Verified and only contains 60 calories per serving.
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GoodWheat Mac and Cheese packs in the most fiber of any brand in the category, 4 times more than the leading brand. In fact, one serving of GoodWheat Mac and Cheese has the same fiber as two servings of oatmeal, or two and a half servings of broccoli!
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Zola flavors include original, original with pulp, espresso, lime and pineapple. Based on Arcadia’s research, consumers prefer the clean, crisp taste of Zola to that of other leading coconut water brands. In taste tests, Zola beat competitors 2 to 1, and the Company believes it is a superior way to rehydrate, reset and reenergize.
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And, just like our pasta and pancake mixes, GoodWheat Mac and Cheese is higher in protein than the leading brand, with 12 grams of protein per serving. Zola Coconut Water Zola is a pure, natural, 100% coconut water with a crisp, clean taste that’s lightly sweet and refreshing.
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Agronomic Wheat Traits On average, Americans get approximately 20% of their daily calories from wheat. As a result, Arcadia developed a portfolio of non-GMO specialty wheat traits to offer healthier, nutrient-rich wheat options while providing the same baking quality, taste, and texture as traditional wheat.
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Naturally hydrating and never from concentrate, Zola is Non-GMO Project Verified and only contains 60 calories per serving.
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Arcadia’s non-GMO Reduced Gluten High Fiber Wheat has fewer allergenic glutens and higher fiber than traditional wheat while Arcadia’s non-GMO Extended Shelf-Life Wheat extends the shelf life of milled whole wheat flour. Arcadia believes that its proprietary intellectual property with multiple non-GMO wheat traits offer functional benefits and a compelling point of differentiation.
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In taste tests, Zola beats competitors 2 to 1 and is the best-tasting way to rehydrate, reset and reenergize. 3 Table of Contents GoodWheat™ Wheat Traits Enhanced Quality Grains The GoodWheat brand also encompasses our current and future non-GMO wheat portfolio of high fiber Resistant Starch ("RS"), Reduced Gluten ("RG") wheat varieties, and extended shelf life wheat, as well as future wheat innovations.
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As of December 31, 2024, our wheat patent portfolio included 16 U.S. issued patents, six U.S. patent applications, one plant variety certificate, 52 foreign issued patents and 14 foreign patent applications.
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We now hold 24 global patents on our high fiber RS wheat, protecting both bread wheat and durum (pasta) wheat. Claims granted recently strengthen our IP for our RS portfolio of products. Our GoodWheat™ wheat traits redesign wheat as a functional food adding value to the wheat supply chain by enabling a wider range of choices to meet consumer demands.
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Employees As of December 31, 2024, we had nine employees, including in management, operations, accounting/finance, legal and administration. We believe our employee relations to be good. None of our employees are represented by a labor union or collective bargaining agreement. Facilities Our corporate headquarters are located in Dallas, Texas with additional office space in Sacramento, California.
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One such program generated multiple bread wheat and pasta wheat lines with very high levels of amylose, leading to increased levels of resistant starch. Resistant starch increases the total dietary fiber content of wheat and reduces its glycemic index, which are both desirable nutritional qualities that are important in the management of diabetes and healthy blood glucose levels.
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High fiber resistant starch wheat can deliver fiber and other benefits to refined white flour products and also whole grain food products. We believe improving the fiber content of wheat can deliver improved health benefits to a wide population.
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High Fiber RS Wheat Our high fiber RS wheat provides a source of wheat with inherently high levels of resistant starch, increasing the total dietary fiber content of food products without the need for fiber additives from other sources. Currently, corn resistant starch is a product in two market segments: dietary fiber additives and modified starch additives.
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Major growth in these markets is being driven by the convenience health food sector and functional food sector. Flour from our RS wheat lines has resistant starch levels that are 12 to 20 times higher than the control wheat, and total dietary fiber, or TDF, which is more than eight times higher than the control.
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RS wheat flour has been tested in applications in bread, where loaf quality was comparable to bread made with conventional wheat flour, and pasta, where it had the highest consumer preference rankings in tests carried out by a major consumer products company.
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RS wheat bread flour is currently being introduced to North American bakery and consumer packaged goods ("CPG") companies by our partners, Bay State Milling. In markets outside North America, RS wheat is currently being tested in a range of additional bakery, ready-to-eat cereals and pasta products with industrial partners.
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We have many RS wheat lines that are being evaluated for optimal quality and agronomic characteristics. RG Wheat Many consumers are interested in reducing levels of gluten in their diet.
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Critically, for some, this is due to having Celiac disease ("CD"), an autoimmune disease that impacts many people worldwide with estimates from 1% of the population in Europe to 3.5% in Mexico. Furthermore, non-celiac gluten sensitivity ("NCGS") impacts an estimated additional 6% of the population. Both CD and NCGS are characterized by sensitivity to dietary gluten.
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The only effective treatment of CD and NCGS requires removal of gluten sources from the diet. Since required adherence to a gluten-free diet is extremely difficult to accomplish for average consumers, efforts to develop alternative approaches are needed. Arcadia is continuing to advance a new wheat variety with reduced gluten levels.
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Our proprietary, non-GMO wheat variety developed using advanced screening and plant breeding techniques have reduced allergenic glutens and increased essential amino acids such as lysine, along with all the other health benefits of high protein wheat.
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Importantly, this variety also delivers impressively high fiber content at approximately 14 grams per serving compared to 2-3 grams per serving of traditional wheat, providing additional value to health-conscious consumers as well as optionality as we advance the commercialization of this project.
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We are breeding the trait into additional commercial wheat varieties and working with food processors to give people a choice to enjoy higher quality wheat in the products they love while reducing gluten in their diet. 4 Table of Contents Improved Shelf Life of Whole Grain Flour The United States Department of Agriculture recommends that “at least one serving of grains per day must be whole grain-rich” due to evidence that a diet containing whole grains provides a multitude of benefits, including lower risk of obesity, cardiovascular disease, and type-2 diabetes.
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Despite these health benefits, consumption of whole grain products is negatively affected by the bitter and rancid flavors and odors that accumulate in whole wheat flour after milling. Our improved stability and flavor wheat lines greatly reduced the production of rancid and bitter compounds in milled whole grain flour as it progresses through the supply chain.
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Whole wheat flour from these lines is being tested further for sensory characteristics and improved shelf-life stability. This new trait could help improve the shelf life and flavor profile of whole grain products, thus reducing formulation costs and increasing consumer preference and palatability for whole grains.
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Product Development With our food and beverage products now entering the market, we are firmly in the commercialization phase of our corporate lifecycle. We are de-emphasizing new trait discovery research and development (“R&D”) and are increasing our focus on food-science innovation to fully leverage the value in our existing superior wheat genetics.
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We are evolving our organizational capabilities to match this strategy progression to include in-house food formulation and CPG supply chain expertise. Food Formulation Innovation. We will expand the application of our innovation platform to build on our pipeline of products focused on health and wellness.
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Our innovation team is focused on using science-based solutions to leverage our wheat varieties to develop an array of food products and wellness ingredients. Because we are innovating directly from our own well-established plant technology traits, we expect this extension of our involvement will provide more meaningful improvements. Field Trials and Breeder & Foundation Seed Production .
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Our trait evaluation and development staff conducts field operations for both trials and production in American Falls, Idaho, and oversee production in other areas of the country, as needed. Similarly, regulatory trials may be needed to develop data for use in submissions for regulatory review and may involve plant varieties developed by our collaborators or our own grain quality programs.
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Biological Materials Inventory and Tracking . Our proprietary Pedigree and Inventory Management System, or PIMS, tracks the genetic, phenotypic and location information for all our plant materials. The performance of our plant materials is recorded through a variety of laboratory and field observations, and the data are stored within PIMS.
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The location of all plant materials is tracked throughout the plant life cycle. This includes specific seeds planted within a specific plot of a specific field trial, harvest, seed storage location and use by, or distribution of plant material to, our collaborators or elsewhere.
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As of December 31, 2023, Arcadia Biosciences, Inc. and Arcadia Wellness, LLC each had 12 registered trademarks in the United States. Arcadia Biosciences, Inc. also had nine registered trademarks in various other countries. Key Collaborations We have established numerous trait collaborations and have developed close relationships with industry-leading seed and consumer product companies.
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Our partnerships with global strategic seed and consumer product players enable us to further participate in the development and commercialization of innovative products that promise to play significant roles in improving global crop efficiency and enhancing human health. We believe that the expertise and opportunities created by these collaborations represent important assets to our business.
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Below is a summary of selected collaborative partnerships that we view as key to the achievement of our near-term and mid-term business objectives. Corteva Agriscience In 2017, we entered into a strategic collaboration with Corteva Agriscience to jointly develop and commercialize a breakthrough improved wheat quality trait in North America.
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The collaboration leverages our TILLING platform with Corteva Agriscience’s enabling technology platforms, high-quality elite germplasm and global commercial channels. Under the collaboration, the companies will further develop and commercialize an improved wheat quality trait, which has completed initial field trials and is advancing to next-stage field trials.
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Corteva Agriscience will introgress Arcadia’s trait into its proprietary elite germplasm lines and manage all aspects related to the trait commercialization. Certain development costs will be co-funded, and we will share in the commercial value resulting from products produced.
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Arista Cereal Seeds Pty Ltd and Bay State Milling Company In 2019, we entered into an agreement with Arista and Bay State Milling ("BSM").
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Under the agreement, BSM is the exclusive commercial partner for our high fiber resistant starch bread wheat in North America under its HealthSense™ brand portfolio, while Arista has exclusive rights under our high fiber resistant starch bread wheat intellectual property in certain geographies, including Australia and Europe.
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We will continue to market our high fiber wheat under our GoodWheat portfolio of specialty wheat ingredients in other international markets. Competition The markets for consumer goods are highly competitive, and we face significant direct and indirect competition in several aspects of our business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe expect our quarterly operating results to fluctuate widely and unpredictably for the following reasons, among others: • our significant customer concentration; • the variable timing, stage, and results of our and our collaborators’ development, and regulatory activities; • the effectiveness of our marketing and advertising efforts; • the impact of seasonality in agricultural operations on our sales of products; • adjustments to inventory due to excess or slow-moving; • supplier, manufacturing, or quality problems; and • variance in the timing of customer and distributor orders for our products.
Biggest changeArcadia expects its quarterly operating results to fluctuate widely and unpredictably for the following reasons, among others: • its significant customer concentration; • the effectiveness of its marketing and advertising efforts; • the impact of seasonality on sales of its products; • adjustments to inventory due to excess or slow-moving; • supplier or quality problems; and • variance in the timing of customer and distributor orders for its products. 10 Table of Contents Any unanticipated change in revenues or operating results is likely to cause Arcadia’s stock price to fluctuate since such changes reflect new information available to investors and analysts.
If we are unable to adequately control the costs associated with operating our business, including costs of development and commercialization of our traits, our business, financial condition, operating results, and prospects will suffer.
If we are unable to adequately control the costs associated with operating our business, including costs of development and commercialization of its traits, our business, financial condition, operating results, and prospects will suffer.
A political disruption could also strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the political or economic climate and financial market conditions could adversely impact our business.
A political disruption could also strain Arcadia’s manufacturers or suppliers, possibly resulting in supply disruption, or cause its customers to delay making payments for its services. Any of the foregoing could harm Arcadia’s business, and we cannot anticipate all of the ways in which the political or economic climate and financial market conditions could adversely impact our business.
These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations, may cause the market price of our common stock to decline.
These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations, may cause the market price of Arcadia’s common stock to decline.
Such a delisting would have a negative effect on the price of our common stock, impair the ability to sell or purchase our common stock when persons wish to do so, and any delisting materially adversely affect our ability to raise capital or pursue strategic restructuring, refinancing or other transactions on acceptable terms, or at all.
Such a delisting would have a negative effect on the price of Arcadia’s common stock, impair the ability to sell or purchase Arcadia’s common stock when persons wish to do so, and materially adversely affect Arcadia’s ability to raise capital or pursue strategic restructuring, refinancing or other transactions on acceptable terms, or at all.
Further, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or 16 Table of Contents disproportionate to the operating performance of those companies.
Further, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies.
We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock.
Arcadia may not complete our analysis of its internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in Arcadia and, as a result, the value of its common stock.
In the case of outstanding options and warrants that have exercise prices that are below the market price of our common stock from time to time, our stockholders would experience dilution upon the exercise of these options and warrants. Our stock price has been and may continue to be volatile, and you could lose all or part of your investment.
In the case of outstanding options and warrants that have exercise prices that are below the market price of Arcadia’s common stock from time to time, Arcadia’s stockholders would experience dilution upon the exercise of these options and warrants. 9 Table of Contents Arcadia’s stock price has been and may continue to be volatile, and you could lose all or part of your investment.
Failure to effectively prevent, detect, and recover from the increasing number and sophistication of information security threats could result in theft, misuse, modification, and destruction of information, including trade secrets and confidential business information, and cause business disruptions, delays in research and development, and reputational damage, which could significantly affect our results of operations and financial condition.
Failure to effectively prevent, detect, and recover from the increasing number and sophistication of information security threats could result in theft, misuse, modification, and destruction of information, including trade secrets and confidential business information, and cause business disruptions, and reputational damage, which could significantly affect Arcadia’s results of operations and financial condition.
The replacement of any member of our management team involves significant time and costs and such loss could significantly delay or prevent the achievement of our business objectives.
The 7 Table of Contents replacement of any member of our management team involves significant time and costs and such loss could significantly delay or prevent the achievement of our business objectives.
Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock, which could negatively impact the market price and liquidity of our common shares and our ability to access the capital markets. Our common stock is listed on The Nasdaq Capital Market.
Arcadia’s failure to meet the continued listing requirements of Nasdaq could result in a delisting of its common stock, which could negatively impact the market price and liquidity of its common stock and its ability to access the capital markets. Arcadia’s common stock is listed on the Nasdaq Capital Market.
The market price of our common stock is subject to wide fluctuations in response to various risk factors, some of which are beyond our control and may not be related to our operating performance, including: • addition or loss of significant customers, collaborators or distributors; • changes in laws or regulations applicable to our industry or traits; • additions or departures of key personnel; • the failure of securities analysts to cover our common stock after an offering; • actual or anticipated changes in expectations regarding our performance by investors or securities analysts; • price and volume fluctuations in the overall stock market; • volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • our ability to protect our intellectual property and other proprietary rights; • sales of our common stock by us or our stockholders; • the expiration of contractual lock-up agreements; • litigation involving us, our industry, or both; • major catastrophic events; and • general economic and market conditions and trends.
The market price of Arcadia’s common stock is subject to wide fluctuations in response to various risk factors, some of which are beyond Arcadia’s control and may not be related to its operating performance, including: • addition or loss of significant customers, collaborators or distributors; • changes in laws or regulations applicable to its industry; • additions or departures of key personnel; • the failure of securities analysts to cover its common stock after an offering; • actual or anticipated changes in expectations regarding its performance by investors or securities analysts; • price and volume fluctuations in the overall stock market; • volatility in the market price and trading volume of companies in its industry or companies that investors consider comparable; • share price and volume fluctuations attributable to inconsistent trading volume levels of its shares; • sales of its common stock by Arcadia or its stockholders; • the expiration of contractual lock-up agreements; • litigation involving us, its industry, or both; • major catastrophic events; and • general economic and market conditions and trends.
If we are unable to implement any of the required changes to our internal control over financial reporting effectively or efficiently or are required to do so earlier than anticipated, it could adversely affect our operations, financial reporting, and results of operations and could result in an adverse opinion on internal controls from our independent registered public accounting firm.
If Arcadia is unable to implement any of the required changes to its internal control over financial reporting effectively or efficiently or are required to do so earlier than anticipated, it could adversely affect its operations, financial reporting, and results of operations and could result in an adverse opinion on internal controls from Arcadia’s independent registered public accounting firm.
The market price of our common stock has been and may continue to be volatile.
The market price of Arcadia’s common stock has been and may continue to be volatile.
Future sales in the public market of our common stock, or shares issued upon exercise of our outstanding stock options or warrants, or the perception by the market that these issuances or sales could occur, could lower the market price of our common stock or make it difficult for us to raise additional capital.
Future sales in the public market of Arcadia’s common stock, or shares issued upon exercise of its outstanding stock options or warrants, or the perception by the market that these issuances or sales could occur, could lower the market price of Arcadia’s common stock or make it difficult for Arcadia to raise additional capital.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. A global financial crisis or a global or regional political disruption could cause extreme volatility in the capital and credit markets.
Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations. Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. A global financial crisis or a global or regional political disruption could cause extreme volatility in the capital and credit markets.
Furthermore, while our collaboration agreements typically require that our collaborators indemnify us for the cost of product liability claims brought against us as a result of our collaborator’s misconduct, such indemnification provisions may not always be enforced, and we may receive no indemnification if our own misconduct contributed to the claims.
Furthermore, while many of Arcadia’s collaboration agreements require that Arcadia’s collaborators indemnify Arcadia for the cost of product liability claims brought against Arcadia as a result of its collaborator’s misconduct, such indemnification provisions may not always be enforced, and we may receive no indemnification if Arcadia’s own misconduct contributed to the claims.
If the market price of our common stock fluctuates or declines, you may not realize any return on your investment and may lose some or all of your investment. We expect our operating results to vary significantly from quarter to quarter, which may cause our stock price to fluctuate widely.
If the market price of Arcadia’s common stock fluctuates or declines, you may not realize any return on your investment and may lose some or all of your investment. Arcadia expects its operating results to vary significantly from quarter to quarter, which may cause Arcadia’s stock price to fluctuate widely.
As of December 31, 2023, we had 1,285,337 shares of common stock outstanding, substantially all of which we believe may be sold publicly, subject in some cases to volume and other limitations, provisions or limitations in registration rights agreements, or prospectus-delivery or other requirements relating to the effectiveness and use of registration statements registering the resale of such shares.
As of December 31, 2024, we had 1,364,940 shares of common stock outstanding, substantially all of which Arcadia believes may be sold publicly, subject in some cases to volume and other limitations, provisions or limitations in registration rights agreements, or prospectus delivery or other requirements relating to the effectiveness and use of registration statements registering the resale of such shares.
If future financings involve the issuance of equity securities, our existing stockholders would suffer dilution. If we are able to raise debt financing, we may be subject to restrictive covenants that limit our operating flexibility. We may not be able to raise sufficient additional funds on terms that are favorable to us, if at all.
If future financings involve the issuance of equity securities, Arcadia’s existing stockholders would suffer dilution. If Arcadia is able to raise debt financing, it may be subject to restrictive covenants that limit its operating flexibility. Arcadia may not be able to raise sufficient additional funds on terms that are favorable to it, if at all.
As a result of being a public company, we are obligated to develop and maintain proper and effective internal control over financial reporting.
As a result of being a public company, Arcadia is obligated to develop and maintain proper and effective internal control over financial reporting.
After making adjustments for the impact of reverse stock splits, since shares of our common stock were sold in our initial public offering in May 2015 at a price of $6,400.00 per share, our stock price has ranged from $2.65 to $6,984.00, through December 31, 2023.
After making adjustments for the impact of reverse stock splits, since shares of our common stock were sold in its initial public offering in May 2015 at a price of $6,400.00 per share, Arcadia’s stock price has ranged from $1.85 to $6,984.00, through December 31, 2024.
Outbreaks of epidemic, pandemic, or contagious diseases, such as the COVID-19 pandemic, could disrupt our business resulting in a loss of productivity from our employees working remotely. In addition, the US financial markets have been negatively impacted by the rise of inflation and interest rates, increasing the potential for a local and/or global economic recession that could disrupt our business.
Outbreaks of epidemic, pandemic, or contagious diseases could disrupt Arcadia’s business resulting in a loss of productivity from its employees. In addition, the US financial markets have been negatively impacted by the rise of inflation and interest rates, increasing the potential for a local and/or global economic recession that could disrupt Arcadia’s business.
Our gross profit margins on our consumer products may be impacted by a variety of factors, including but not limited to variations in raw materials and packaging, freight costs, pricing, customer requirements, market acceptance rate and promotional support costs.
Arcadia’s gross profit margins on its consumer products may be impacted by a variety of factors, including but not limited to variations, freight costs, pricing, customer requirements, market acceptance rate and promotional support costs.
Net cash used in operations was $15.3 million and $14.0 million for the years ended December 31, 2023 and 2022, respectively. We expect to continue to incur losses.
Net cash used in operations was $9.6 million and $15.3 million for the years ended December 31, 2024 and 2023, respectively. We expect to continue to incur losses.
We have incurred significant net losses since our formation in 2002 and expect to continue to incur net losses for the foreseeable future. We incurred net losses of $14.0 million and $15.6 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, we had an accumulated deficit of $271.8 million.
We have incurred significant net losses since our formation in 2002 and we expect to continue to incur net losses for the foreseeable future. We incurred net losses of $7.0 million and $14.0 million for the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had an accumulated deficit of $278.9 million.
Our business is therefore dependent on our ability to recruit and maintain a highly skilled and educated workforce with expertise in a range of disciplines, including food innovation, supply chain management, agribusiness, marketing, and other subjects relevant to our operations.
Additionally, Arcadia’s business is dependent on its ability to recruit and maintain a highly skilled and educated workforce with expertise in a range of disciplines, including supply chain management, marketing, and other subjects relevant to its operations.
If we fail to satisfy the continued listing requirements of the Nasdaq Stock Market ("Nasdaq"), such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our common stock.
If Arcadia fails to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist Arcadia’s common stock.
If we are not able to increase our selling prices or reduce product sizes sufficiently, or in a timely manner, to offset increased raw material, packaging, or other input costs, or if our sales volume decreases significantly, there could be a negative impact on our financial condition and results of operations.
If Arcadia is not able to increase its selling prices or improve product sizes sufficiently, or in a timely manner, to offset increased input costs, or if its sales volume decreases significantly, there could be a negative impact on its financial condition and results of operations.
In addition, several of our competitors have substantially greater financial, marketing, sales, distribution, research and development, and technical resources than us, and some of our collaborators have more experience in research and development, regulatory matters, manufacturing, and marketing. We anticipate increased competition in the future as new companies enter the market and new technologies become available.
In addition, several of Arcadia’s competitors have substantially greater financial, marketing, sales, distribution, research and development, and technical resources than Arcadia, and some of its collaborators have more experience in research and development, regulatory matters, manufacturing, and marketing. Competition could increase in the future if new companies enter the market.
All of our current employees are at-will employees, and the failure to retain or hire skilled and highly educated personnel could limit our growth and hinder our research and development efforts. Our business is subject to the risks of earthquakes, fire, flood, crop losses, epidemics, and other catastrophic natural events, and security breaches, including cybersecurity incidents.
All of Arcadia’s current employees are at-will employees, and the failure to retain or hire skilled and highly educated personnel could limit its growth and hinder its business. Arcadia’s business is subject to the risks of security breaches, including cybersecurity incidents.
Pursuant to Section 404(a) of the Sarbanes-Oxley Act of 2002 (“the Act”) and the related rules adopted by the SEC and the Public Company Accounting Oversight Board, starting with the second annual report that we filed with the SEC after the consummation of our public offering, our management is required to report on the effectiveness of our internal control over financial reporting.
Pursuant to Section 404(a) of the Sarbanes-Oxley Act of 2002, as amended (“SOX”) and the related rules adopted by the SEC and the Public Company Accounting Oversight Board, Arcadia’s management is required to report on the effectiveness of its internal control over financial reporting.
As of December 31, 2023, we had 41,735 shares of our common stock issuable upon the exercise of outstanding stock options under our equity incentive plans at a weighted-average exercise price of $139.82 per share and we had outstanding warrants and preferred investment options to purchase 1,831,909 shares of common stock at a weighted-average exercise price of $24.63 per share.
As of December 31, 2024, we had 43,059 shares of Arcadia’s common stock issuable upon the exercise of outstanding stock options under our equity incentive plans at a weighted-average exercise price of $86.18 per share, and outstanding warrants and preferred investment options to purchase 1,083,435 shares of common stock at a weighted-average exercise price of $34.27 per share.
Our future performance depends on the continued services and contributions of our management team and other key employees, the loss of whose services might significantly delay or prevent the achievement of our technical or business objectives.
Arcadia’s future performance will depend on the continued services and contributions of its management team and other key employees and, if the Exchange is consummated, Roosevelt's management team and key employees, the loss of whose services might significantly delay or prevent the achievement of the Company's objectives.
As a result, we may experience higher than anticipated operating expenses, as well as higher auditor fees during and after the implementation of these changes.
Arcadia is continuously seeking to maintain and/or improve its internal control environment. As a result, Arcadia may experience higher than anticipated operating expenses, as well as higher auditor fees during and after the implementation of these changes.
If we fail to raise sufficient funds and continue to incur losses, our ability to fund our operations, take advantage of strategic opportunities, develop and commercialize products or technologies, or otherwise respond to competitive pressures could be significantly limited.
If Arcadia fails to raise sufficient funds and continues to incur losses, its ability to continue its operations, take advantage of strategic opportunities, or otherwise respond to competitive pressures, would likely be significantly limited.
We utilize and critically rely upon information technology systems in all aspects of our business, including increasingly large amounts of data to support our products and advance our research and development.
Arcadia utilizes and critically relies upon information technology systems in all aspects of its business, including large amounts of data to support its products.
We may be required to pay substantial damages as a result of product liability claims for which insurance coverage is not available. We are subject to product liability claims with respect to our products.
Arcadia may be required to pay substantial damages as a result of product liability, health and safety, or other similar claims for which insurance coverage is not available.
Section 404(b) of the Act requires that our independent registered public accounting firm will also need to attest to the effectiveness of our internal control over financial reporting if we qualify as an accelerated filer or a large accelerated filer. We are continuously improving our internal control environment.
Section 404(b) of SOX requires that its independent registered public accounting firm will also need to attest to the effectiveness of Arcadia’s internal control over financial reporting if Arcadia qualifies as an accelerated filer or a large accelerated filer, which it currently does not as of the date of this Report.
At the same time, the expiration of patents covering existing products reduces the barriers to entry for competitors. We may be unable to compete successfully against our current and future competitors, which may result in price reductions, reduced margins and the inability to achieve market acceptance for products containing our traits.
Arcadia may be unable to compete successfully against its current and future competitors, which may result in price reductions, reduced margins and the inability to achieve market acceptance for its products.
Our stockholders may experience substantial dilution and a reduction in the price that they are able to obtain upon the sale of their shares.
In addition, a large number of shares of common stock are issuable to the Limited Partners of Roosevelt if the Exchange transaction is consummated. Arcadia’s stockholders may experience substantial dilution and a reduction in the price that they are able to obtain upon the sale of their shares.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this report. Risks Related to Our Business Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations.
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Report. Risks Related to Our Business There is substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain further financing.
For these reasons, we may not be able to realize a tax benefit from the use of our NOLs, whether or not we experience profitability. 15 Table of Contents Risks Related to Ownership of Our Common Stock Future sales of substantial amounts of our common stock, or the possibility that such sales could occur, could adversely affect the market price of our common stock.
Risks Related to Ownership of Our Common Stock Future sales of substantial amounts of Arcadia’s common stock, or the possibility that such sales could occur, could adversely affect the market price of Arcadia’s common stock.
Product liability claims against us or our collaborators selling our products could damage our reputation, harm our relationships with our collaborators, and materially and adversely affect our business, results of operations, financial condition, and prospects.
Arcadia is subject to product liability, health and safety, or similar claims with respect to its products, including claims described elsewhere in this Report under the heading "Legal Proceedings." Such claims against Arcadia or its collaborators selling Arcadia’s products could damage Arcadia reputation, harm its relationships with its collaborators, and materially and adversely affect its business, results of operations, financial condition, and prospects.
We depend on our key personnel and, if we are not able to attract and retain qualified technical and business personnel, we may not be able to grow our business or develop and commercialize our products.
Arcadia depends on its key personnel and, if it is not able to attract and retain qualified technical and business personnel, it may not be able to continue its business.
We may require additional financing and may not be able to obtain such financing on favorable terms, if at all, which could force us to delay, reduce, or eliminate our research and development activities.
Arcadia will require additional financing and may not be able to obtain such financing on favorable terms, if at all, which could adversely impact the Company’s operations and ability to continue its business.
We expect that our gross profit as a percentage of net sales could fluctuate as a result of a number of factors, including product pricing, retail discounts, and the availability and cost of ingredients and packaging. In addition, our gross profit margin may be impacted by shifts in the overall mix of products having a higher or lower profit margin.
Arcadia expects that its gross profit as a percentage of net sales could fluctuate as a result of a number of factors, including product pricing, retail discounts, and input costs.
Removed
We or our partners may not be successful in developing commercial products that incorporate our traits and for which there is consumer demand.
Added
Our consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
Removed
Our future growth depends on our ability to monetize the trait assets we’ve created by bringing products to market that incorporate our technology, as well as licensing these traits to our collaborators to develop and commercialize seeds and products that contain our traits.
Added
However, as shown in our consolidated financial statements for the year ended December 31, 2024, included in this Report, we have an accumulated deficit, recurring net losses and net cash used in operations, and resources that will not be sufficient to meet our anticipated cash requirements, which raise substantial doubt about our ability to continue as a going concern.
Removed
The development process could take longer than we anticipate or could ultimately fail to achieve commercial success for any of the following reasons, including but not limited to: non-competitive pricing, ineffective advertising and marketing campaigns, increased competition, failure to align with consumer tastes and lack of brand acceptance.
Added
Our consolidated financial statements do not include any adjustments 4 Table of Contents that might result from the outcome of this uncertainty.
Removed
If products containing our traits are never commercialized or are not well-received in the marketplace, our ability to generate revenues and become profitable, as well as our long-term growth strategy, would be materially and adversely affected.
Added
If we cannot continue as a viable entity, we might be required to reduce or cease operations or seek dissolution and liquidation or bankruptcy protection, and our stockholders would likely lose most or all of their investment in us. Our proposed Exchange transaction with Roosevelt is subject to a number of risks and uncertainties.
Removed
Even if we or our collaborators are able to develop commercial products that incorporate our traits, any such products may not achieve commercial success as quickly as we project, or at all. 8 Table of Contents We have a history of significant losses, which we expect to continue, and we may never achieve or maintain profitability.
Added
Failure to complete, or delays in completing, the proposed Exchange transaction with Roosevelt could materially and adversely affect our results of operations, business, financial condition and/or stock price. Our previously announced proposed Exchange transaction with Roosevelt is subject to a number of risks and uncertainties.
Removed
In addition, we may find our development and commercialization efforts are more expensive than we anticipate or that they do not generate revenues in the amounts or in the time period we anticipate, which would further increase our losses.
Added
Some of those risks and uncertainties include the following, among others: • The closing of the Exchange transaction is subject to approval by our stockholders of certain proposals relating to the transactions contemplated by the Exchange Agreement, as well as the satisfaction of other customary closing conditions.
Removed
We will continue to need capital to fund our development projects, the commercialization of our products, and to provide working capital to fund other aspects of our business. If our capital resources are insufficient to meet our capital requirements, we will have to raise additional funds.
Added
Our stockholders might not approve the proposals that are required in order for us to be able to close the Exchange transaction, or the Exchange Agreement might be terminated for other reasons. We cannot assure you that the proposed Exchange will be successfully completed.
Removed
If this happens, we may be forced to delay or terminate research and development programs or the commercialization of products or curtail operations. If adequate funds are not available, we will not be able to successfully execute on our business strategy or continue our business.
Added
Any failure to satisfy a required condition to closing may delay or prevent the completion of the transaction, which could materially and adversely affect our results of operations, business, financial condition and/or stock price. • We may require additional funding in order to be able to close the Exchange transaction. • If the Exchange with Roosevelt is not completed, our board of directors would be required to consider alternatives for our business and assets, which might include seeking the dissolution and liquidation of the Company, seeking an acquisition transaction or similar transaction with another company, initiating bankruptcy proceedings, or other alternatives.
Removed
Should the rate of market acceptance of our products be slower than anticipated, we may incur additional expense by increasing promotional activities. 9 Table of Contents Competition is intense and requires continuous technological development, and, if we are unable to compete effectively, our financial results will suffer. We face significant competition in the markets in which we operate.
Added
There can be no assurance regarding the outcome of such a process.
Removed
The markets for pasta, pancake mix, mac and cheese, and coconut water products are intensely competitive and rapidly changing. In most segments of the seed and agricultural biotechnology market, the number of products available to consumers is steadily increasing as new products are introduced.
Added
We would have very limited cash resources, might be unable to raise additional funding, and could be forced to reduce or suspend operations, seek dissolution proceedings, or seek federal bankruptcy protection. • We would remain liable for significant transaction costs, including legal, accounting, financial advisory and other costs relating to the Exchange regardless of whether the Exchange is consummated. • If the Exchange is not completed, the trading price of Arcadia’ common stock may decline to the extent that the then-current market prices for our common stock reflect a market assumption that the Exchange will be completed. • We could be subject to litigation related to the Exchange Agreement, the Exchange transaction or any failure to complete the Exchange. • We could potentially lose key personnel during the pendency of the Exchange. • If the Exchange is not completed, we would not realize the potential benefits of the Exchange, which could have a negative effect on our results of operations, financial condition, business and stock price. • If the Exchange is consummated, then if the Company, which we will sometimes refer to after consummation of the Exchange as the "combined company," is unable to realize the substantial strategic and financial benefits currently anticipated from the Exchange, Arcadia stockholders will have experienced dilution of their ownership interests in the Company without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to realize only part of the strategic and financial benefits currently anticipated from the Exchange.
Removed
Our technologies may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of our competitors, which will prevent or limit our ability to generate revenues from the commercialization of our traits being developed. We may seek to expand through acquisitions of and investments in other brands, businesses, and assets.
Added
In 5 Table of Contents addition, any shares of common stock that the Company may issue following consummation of the Exchange will further dilute the ownership interests of the Company's current stockholders. • If the Exchange Agreement is terminated under certain circumstances, the Company may be required to reimburse Roosevelt's expenses up to $500,000 or $750,000, depending on the reasons for the termination. • If the Exchange transaction with Roosevelt is not completed, we will have extremely limited cash resources.
Removed
These acquisition activities may be unsuccessful or divert management’s attention.
Added
Although we may try to pursue an alternative transaction, if no alternate transaction can be negotiated and completed or we are not successful in raising additional required funding, we may be forced to reduce or suspend operations, file for federal bankruptcy protection or seek dissolution or liquidation proceedings.
Removed
We may consider strategic and complementary acquisitions of and investments in other agricultural biotechnology and consumer brands, businesses or other assets, and such acquisitions or investments are subject to risks that could affect our business, including risks related to: • the necessity of coordinating geographically disparate organizations; • implementing common systems and controls; • integrating personnel with diverse business and cultural backgrounds; • integrating acquired manufacturing and production facilities, technology and products; • combining different corporate cultures and legal systems; • unanticipated expenses related to integration, including technical and operational integration; • increased costs and unanticipated liabilities, including with respect to registration, environmental, health and safety matters, that may affect sales and operating results; • retaining key employees; • obtaining required government and third-party approvals; • legal limitations in new jurisdictions; • installing effective internal controls and audit procedures; • issuing common stock that could dilute the interests of our existing stockholders; • spending cash and incurring debt; • assuming contingent liabilities; and • creating additional expenses.
Added
In such an event, our creditors would have first claim on the value of our assets which, other than remaining cash, would most likely be liquidated in one or more transactions or a bankruptcy sale, in which case our common stock would have little or no value.
Removed
We may not be able to identify opportunities or complete transactions on commercially reasonable terms, or at all, or actually realize any anticipated benefits from such acquisitions or investments. Similarly, we may not be able to obtain financing for acquisitions or investments on attractive terms.
Added
We can give no assurance as to the magnitude of the net proceeds of such a sale and whether such proceeds would be sufficient to satisfy our obligations to its creditors, let alone to permit any distribution to our equity holders. • If the Exchange is consummated, the combined company will require significant additional funding in order to develop the Roosevelt assets and conduct the combined company's anticipated business.
Removed
In addition, the success of any acquisitions or investments also will depend, in part, on our ability to integrate the acquisition or investment with our existing operations. 10 Table of Contents We rely on third parties to conduct, monitor, support, and oversee field trials and commercial production and, in some cases, to maintain regulatory files for those products in development, and any performance issues by third parties, or our inability to engage third parties on acceptable terms, may impact our or our collaborators’ ability to complete the regulatory process for or commercialize such products.
Added
If such funding involves the issuance of equity securities, our stockholders would suffer additional dilution to their percentage ownership interests in the Company, which could be material. If such funding involves debt financing, the agreements relating to such financing may involve restrictive covenants or other provisions that will limit our operating flexibility.
Removed
We rely on third parties, including farmers, to conduct, monitor, support, and oversee field trials and commercial production. As a result, we have less control over the timing and cost of these activities than if we conducted them with our own personnel.
Added
If the Exchange is consummated and the combined company fails to raise sufficient funds, the combined company would not be able to successfully execute on its business strategy. Failure to timely complete the proposed Exchange transaction with Roosevelt could materially and adversely affect our results of operations, financial condition, business, prospects and our stock price.
Removed
If we are unable to maintain or enter into agreements with these third parties on acceptable terms, or if any such engagement is terminated prematurely, we may be unable to conduct and complete our trials and commercial production in the manner we anticipate.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity. We recognize the importance of identifying, assessing and managing material risks associated with cybersecurity threats, as such term is defined in Item 106(a) of Regulation S-K. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws.
Biggest changeItem 1C. Cybersecurity. We recognize the importance of identifying, assessing and managing material risks associated with cybersecurity threats. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws. Identifying and assessing cybersecurity risk is integrated into our overall risk management systems and processes.
As of the date of this report, we are not aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition.
As of the date of this Report, we are no t aware of any cybersecurity incidents that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition.
We describe whether and how risks from cybersecurity threats are reasonably likely to materially affect us, including our results of operations and financial condition, under the heading " Our business is subject to the risks of earthquakes, fire, flood, crop losses, epidemics, and other catastrophic natural events, and security breaches, including cybersecurity incidents." in Item 1A, “Risk Factors” of Part I of this report.
We describe whether and how risks from cybersecurity threats are reasonably likely to materially affect us, including our results of operations and financial condition, under the heading " Arcadia’s business is subject to the risks of security breaches, including cybersecurity incidents." in Item 1A, “Risk Factors” of Part I of this Report.
Identifying and assessing cybersecurity risk is integrated into our overall risk management systems and processes. Cybersecurity risks related to our business, technical operations, privacy and compliance issues are identified and addressed through a multi-faceted approach including third party assessments, internal IT controls, governance, risk and compliance reviews.
Cybersecurity risks related to our business, technical operations, privacy and compliance issues are identified and 11 Table of Contents addressed through a multi-faceted approach including third party assessments, internal IT controls, governance, risk and compliance reviews.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Pr operties. Our corporate headquarters are located in Dallas, Texas with additional office space in Davis and Sacramento, California and additional facilities in American Falls, Idaho. We believe that our leased facilities are adequate to meet our current needs and that, if needed, suitable additional or alternative space will be available to accommodate our operations.
Biggest changeItem 2. Pr operties. Our corporate headquarters are located in Dallas, Texas with additional office space in Sacramento, California. We believe that our leased facilities are adequate to meet our current needs and that, if needed, suitable additional or alternative space will be available to accommodate our operations.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings. We currently are not a party to any material litigation or other material legal proceedings. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. Item 4. Mine Saf ety Disclosures. Not applicable. 18 Table of Contents PAR T II
Biggest changeThe matters described in this section could divert management time and attention from the Company, and could involve significant amounts of legal fees and other fees and expenses. An adverse outcome in any such proceedings could have a material adverse effect on the Company. Item 4. Mine Saf ety Disclosures. Not applicable. 13 Table of Contents PAR T II
Added
Item 3. Legal Proceedings. From time to time, we may be subject to legal proceedings, actions, claims, suits, or investigations arising from the ordinary course of our business, including actions with respect to intellectual property claims, breach of contract claims, claims relating to our products, labor and employment claims and other matters.
Added
Any litigation or other proceedings could divert management time and attention, could involve significant amounts of legal fees and other fees and expenses, or could result in an adverse outcome having a material adverse effect on our financial condition, cash flows or results of operations.
Added
Actions, claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty. Except as described below, we are not currently involved in any legal proceedings that we believe are, individually or in the aggregate, material to our business, results of operations or financial condition.
Added
However, regardless of the outcome, litigation can have an adverse impact on us because of associated cost and diversion of management time.
Added
On March 6, 2025, a complaint was filed in the Superior Court of the State of California for the County of San Francisco by the Center for Environmental Health, a non-profit corporation (the "plaintiff"), against approximately 28 named companies, including several major retailers and manufacturers such as Walmart, Whole Foods Market, Smart & Final Stores, and Raleys, as well as many companies that manufacture and market coconut water products, including the Company, alleging violations of the California Safe Drinking Water and Toxic Enforcement Act, known as Proposition 65.
Added
Proposition 65 requires, among things, that a specific warning appear on any product sold in California containing a substance listed by that state as having been found to cause cancer or reproductive toxicity. The complaint contends that the defendants violated Proposition 65 by knowingly and intentionally exposing individuals in California to Bisphenol A ("BPA") in coconut water containers.
Added
The complaint states that the plaintiff's claims against the Company are limited to the Company's coconut water products packaged in cans.
Added
The complaint seeks injunctive relief, including an injunction prohibiting defendants from offering coconut water products sold in California without either reducing the BPA level in the product such that no Proposition 65 warnings are required or providing prior clear and reasonable warnings, and civil penalties.
Added
As of the date of this Report, the Company has not responded to the complaint, and intends to vigorously defend against the claims. Due in part to the early stage of the proceedings, we cannot predict the outcome of this matter at this time.
Added
As disclosed above, on December 4, 2024, the Company entered into the Exchange Agreement with Roosevelt providing for the Exchange transaction, and on February 14, 2025, the Company filed a registration statement on 12 Table of Contents Form S-4 with the SEC, including a preliminary proxy statement/prospectus, relating to shares to be issued in the transaction and a special meeting of stockholders of the Company to be held to approve the issuance of shares in the transaction and related proposals.
Added
Since the date of filing of the registration statement, the Company has received several letters (the "Demand Letters") from counsel to purported stockholders of the Company. Each letter asserts that the preliminary proxy statement included in the registration statement was deficient and demanded that the alleged deficiencies be rectified.
Added
The Demand Letters allege, among other matters, that corrective disclosures are required to be included in the registration statement to address alleged material misstatements and omissions in the registration statement and that the proxy statement/prospectus contains materially incomplete and misleading information concerning, among other matters, financial projections, financial analysis performed by the entity that provided a fairness opinion to the Company's board of directors in connection with the transaction, potential conflicts of interest involving the Company's financial advisor in connection with the transaction and the Company's insiders, and possible breach of fiduciary duties by the directors of executive officers of the Company in connection with the transaction.
Added
Certain of the Demand Letter include a request for inspection of certain books and records of the Company pursuant to Delaware corporate law. It is possible that additional, similar letters may be received, or complaints filed.
Added
If this occurs, except as may be required by law, the Company does not intend to announce the filing of any such additional demand letter or any such complaint. The Company believes that the allegations in the Demand Letters are without merit and intends to vigorously defend itself against any complaint that may be filed.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 18 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 19 Item 6. [Reserved] 19 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 31 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 13 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 14 Item 6. [Reserved] 14 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 25 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Record As of March 21, 2024, we had 38 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders.
Biggest changeHolders of Record As of March 19, 2025, we had 36 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders.
Securities Authorized for Issuance under Equity Compensation Plans See Part III, Item 12, for a description of securities authorized for issuance under equity compensation plans. Recent Sales of Unregistered Securities Information concerning our sales of unregistered securities during the year ended December 31, 2023, has previously been reported in Current Reports on Form 8-K that we filed during that year.
Securities Authorized for Issuance under Equity Compensation Plans See Part III, Item 12, for a description of securities authorized for issuance under equity compensation plans. Recent Sales of Unregistered Securities Information concerning our sales of unregistered securities during the year ended December 31, 2024, has previously been reported in Current Reports on Form 8-K that we filed during that year.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our equity securities during the year ended December 31, 2023.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our equity securities during the year ended December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSee Note 1 to the consolidated financial statements for further information on discontinued operations. 24 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 Year Ended December 31, $ Change % Change 2023 2022 (in thousands) Revenues: Product $ 5,313 $ 6,422 $ (1,109 ) -17 % License 17 879 (862 ) -98 % Royalty — 117 (117 ) -100 % Total revenues 5,330 7,418 (2,088 ) -28 % Operating expenses (income): Cost of revenues 3,300 6,101 (2,801 ) -46 % Research and development 1,387 1,509 (122 ) -8 % Gain on sale of Verdeca — (1,138 ) 1,138 100 % Impairment of intangible assets — 141 (141 ) -100 % Change in fair value of contingent consideration — (70 ) 70 -100 % Gain on sale of property and equipment (40 ) (314 ) 274 -87 % Impairment of property and equipment — 160 (160 ) -100 % Impairment of ROU asset 113 — 113 100 % Selling, general and administrative 14,508 15,036 (528 ) -4 % Total operating expenses 19,268 21,425 (2,157 ) -10 % Loss from operations (13,938 ) (14,007 ) 69 0 % Interest income 695 289 406 140 % Other income, net 48 9 39 433 % Valuation loss on March 2023 PIPE (6,076 ) — (6,076 ) -100 % Change in fair value of common stock warrant and option liabilities 6,544 3,209 3,335 104 % Issuance and offering costs allocated to liability classified options (430 ) (314 ) (116 ) 37 % Net loss from continuing operations before income taxes (13,157 ) (10,814 ) (2,343 ) 22 % Income tax expense (8 ) (14 ) 6 -43 % Net loss from continuing operations (13,165 ) (10,828 ) (2,337 ) 22 % Net loss from discontinued operations (821 ) (4,784 ) 3,963 -83 % Net loss (13,986 ) (15,612 ) 1,626 -10 % Net loss attributable to non-controlling interest (5 ) (236 ) 231 -98 % Net loss attributable to common stockholders $ (13,981 ) $ (15,376 ) $ 1,395 -9 % 25 Table of Contents Revenues Product revenues accounted for 100% and 87% of our total revenues in 2023 and 2022, respectively.
Biggest changeSee Note 4 to the consolidated financial statements for further information on discontinued operations. 18 Table of Contents Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 Year Ended December 31, $ Change % Change 2024 2023 (in thousands) Revenues: Product $ 5,012 $ 4,437 $ 575 13 % License 7 17 (10 ) -59 % Royalty 26 — 26 100 % Total revenues 5,045 4,454 591 13 % Operating expenses (income): Cost of revenues 2,963 2,174 789 36 % Research and development 53 64 (11 ) -17 % Gain on sale of intangible assets (4,000 ) — (4,000 ) 100 % Gain on sale of property and equipment — (29 ) 29 100 % Impairment of property and equipment 36 — 36 100 % Impairment of ROU asset — 113 (113 ) -100 % Selling, general and administrative 9,641 8,234 1,407 17 % Total operating expenses 8,693 10,556 (1,863 ) -18 % Loss from operations (3,648 ) (6,102 ) 2,454 40 % Interest income 782 695 87 13 % Other income, net 31 48 (17 ) -35 % Valuation loss on March 2023 PIPE — (6,076 ) 6,076 100 % Change in fair value of common stock warrant and option liabilities (1,474 ) 6,544 (8,018 ) -123 % Issuance and offering costs allocated to liability classified options — (430 ) 430 100 % Net loss from continuing operations before income taxes (4,309 ) (5,321 ) 1,012 19 % Income tax expense (8 ) (8 ) — — Net loss from continuing operations (4,317 ) (5,329 ) 1,012 19 % Net loss from discontinued operations — Body Care — (821 ) 821 100 % Net loss from discontinued operations — GoodWheat (2,721 ) (7,836 ) 5,115 65 % Net loss (7,038 ) (13,986 ) 6,948 50 % Net loss attributable to non-controlling interest — (5 ) 5 100 % Net loss attributable to common stockholders $ (7,038 ) $ (13,981 ) $ 6,943 50 % 19 Table of Contents Revenues Product revenues accounted for 99% and 100% of our total revenues in 2024 and 2023, respectively.
Cash flows from investing activities Cash used in investing activities for the year ended December 31, 2023 consisted of proceeds of $115,000 from the sale of property and equipment, proceeds of $569,000 from the sale of Verdeca, and proceeds of $2.5 million from the sale of investments, offset by $5,000 of purchases of property and equipment and $7.5 million of purchases of investments.
Cash used in investing activities for the year ended December 31, 2023 consisted of proceeds of $115,000 from the sale of property and equipment, proceeds of $569,000 from the sale of Verdeca, and proceeds of $2.5 million from the sale of investments, offset by $5,000 of purchases of property and equipment and $7.5 million of purchases of investments.
Other income, net Other income, net consists of miscellaneous income. Valuation loss on March 2023 PIPE Valuation loss on March 2023 PIPE includes the fair value in excess of gross proceeds and the increase in fair value related to the re-pricing of existing warrants.
Other income, net Other income, net consists of miscellaneous income net of miscellaneous losses. Valuation loss on March 2023 PIPE Valuation loss on March 2023 PIPE includes the fair value in excess of gross proceeds and the increase in fair value related to the re-pricing of existing warrants.
We consider our critical accounting policies and estimates to be revenue recognition, determination of the provision for income taxes, and net realizable value of inventory.
We consider our critical accounting estimates to be revenue recognition, determination of the provision for income taxes, and net realizable value of inventory.
If we require additional funds and are not able to secure adequate additional funding, we may be forced to reduce our spending, 28 Table of Contents extend payment terms with our suppliers, liquidate assets, or suspend or curtail planned product launches. Any of these actions could materially harm our business, results of operations and financial condition.
If we require additional funds and are not able to secure adequate additional funding, we may be forced to reduce our spending, extend payment terms with our suppliers, liquidate assets, or suspend or curtail planned product launches. Any of these actions could materially harm our business, results of operations and financial condition.
Future events that could significantly influence our judgment and related estimates include conditions in target markets, introduction of new products or changes to current or future competitor products. Recent Accounting Pronouncements For discussions of the adoption and potential impacts of recently issued accounting standards, refer to Note 3 – Recent Accounting Pronouncements.
Future events that could significantly influence our judgment and related estimates include conditions in target markets, introduction of new products or changes to current or future competitor products. Recent Accounting Pronouncements For discussions of the adoption and potential impacts of recently issued accounting standards, refer to Note 3 – Recent Accounting Pronouncements. 24 Table of Contents
The acquisition included Saavy Naturals™, a line of natural body care products, Soul Spring™, a CBD-infused botanical therapy brand in the natural category, and ProVault™, a THC-free CBD sports performance formula made with natural ingredients, providing effective support and recovery for athletes (collectively "body care brands").
The acquisition included Saavy Naturals™, a line of natural body care products, Soul Spring™, a CBD-infused botanical therapy brand in the natural category, and ProVault™, a THC-free CBD sports performance formula made with natural ingredients, providing effective support and recovery for athletes (collectively, “body care brands”).
We recognize royalty revenue when the Company can reasonably determine the amounts earned. We recognize revenue related to milestone payments when it is probable that such amounts would not be reversed. 30 Table of Contents Determination of the provision for income taxes We use the asset and liability method of accounting for income taxes.
We recognize royalty revenue when the Company can reasonably determine the amounts earned. We recognize revenue related to milestone payments when it is probable that such amounts would not be reversed. Determination of the provision for income taxes We use the asset and liability method of accounting for income taxes.
Other income, net During the year ended December 31, 2023, the Company recognized other income of $48,000 as compared to $9,000 in 2022. Valuation loss on March 2023 PIPE During the year ended December 31, 2023, the Company recognized a $6.1 million valuation loss related to the March 2023 PIPE financing transaction.
Other income, net During 2024, the Company recognized other income of $31,000 as compared to $48,000 in 2023. Valuation loss on March 2023 PIPE During the year ended December 31, 2023, the Company recognized a $6.1 million valuation loss related to the March 2023 PIPE financing transaction.
Going Concern We believe that our existing cash and cash equivalents and short-term investments will not be sufficient to meet our anticipated cash requirements for at least the next 12 months from the issuance date of our 2023 financial statements, and thus raises substantial doubt about the Company’s ability to continue as a going concern.
Going Concern; Material Cash Requirements We believe that our existing cash and cash equivalents will not be sufficient to meet our anticipated cash requirements for at least the next 12 months from the issuance date of our 2024 financial statements, and thus raises substantial doubt about the Company’s ability to continue as a going concern.
In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations in the consolidated balance sheets and the results of the discontinued operations as a separate component of loss on the consolidated statements of operations and comprehensive loss for all periods presented.
In accordance with the provisions of ASC 205-20, Arcadia has separately reported the assets and liabilities of the discontinued operations in the consolidated balance sheets and the results of the discontinued operations as separate components on the consolidated statements of operations and comprehensive loss for all periods presented.
Also included in the purchase is Zola, a coconut water sourced exclusively with sustainably grown coconuts from Thailand. On July 8, 2022, the Company entered into an agreement to license Saavy Naturals to Radiance Beauty and Wellness, Inc. ("Radiance Beauty").
Also included in the purchase was Zola, a coconut water sourced exclusively with sustainably grown coconuts from Thailand. In July 2022, the Company entered into an agreement to license Saavy Naturals to Radiance Beauty and Wellness, Inc. (“Radiance Beauty”).
Change in the estimated fair value of common stock warrant and option liabilities The change in the estimated fair value of common stock warrant and option liabilities was $6.5 million during the year ended December 31, 2023 related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.
Change in fair value of common stock warrant and option liabilities The change in the estimated fair value of common stock warrant and option liabilities resulted in a loss of $1.5 million and a gain of $6.5 million during the year ended December 31, 2024 and 2023, respectively, related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.
The valuation loss includes the fair value in excess of gross proceeds and the increase in fair value related to the re-pricing of existing warrants.
The valuation loss includes the fair value in excess of gross proceeds and the increase in fair value related to the re-pricing of existing warrants. There was no such valuation loss in 2024.
For the years ended December 31, 2023 and 2022, the Company had net losses of $14.0 million and $15.6 million, respectively, and net cash used in operations of $15.3 million and $14.0 million, respectively.
For the years ended December 31, 2024 and 2023, the Company had 21 Table of Contents net losses of $7.0 million and $14.0 million, respectively, and net cash used in operations of $9.6 million and $15.3 million, respectively.
The Company recognizes the minimum annual royalty on a straight-line basis over the year, and recognizes royalty revenue resulting from the sale of products when the third parties transfer control of the product 22 Table of Contents to their customers, which generally occurs upon shipment.
The Company recognizes the minimum annual royalty on a straight-line basis over the year, and recognizes royalty revenue resulting from the sale of products when the third parties transfer control of the product to their customers, which generally occurs upon shipment. Royalty revenues can fluctuate depending on the timing of shipments of product by the third parties to their customers.
Our contractual obligations are primarily related to our operating leases for facilities, land and equipment. Refer to Note 14 to the consolidated financial statements for details of our leasing arrangements. As of December 31, 2023, we had cash and cash equivalents of $6.5 million and short-term investments of $5.1 million.
Our contractual obligations are primarily related to our operating leases for facilities, land and equipment. Refer to Note 16 to the consolidated financial statements for details of our leasing arrangements. As of December 31, 2024, we had cash and cash equivalents of $4.2 million.
See Note 1 to the consolidated financial statements for further information on discontinued operations. Components of Our Statements of Operations Data Revenues We derive our revenues from product sales, royalties and license fees. Product revenues Product revenues consist primarily of sales of GoodWheat, Zola and GLA products.
See Note 4 to the consolidated financial statements for further information on discontinued operations. 16 Table of Contents Components of Our Statements of Operations Data Revenues Product revenues Product revenues consist primarily of sales of Zola and GLA products.
Cash used in operating activities for the year ended December 31, 2022 was $14.0 million.
Cash used in operating activities for the year ended December 31, 2023 was $15.3 million.
Additionally, the Company is required from time to time to make certain milestone payments in connection with the development of technologies in-licensed from third parties. The Company's research and development expenses may fluctuate from period to period.
These expenses currently consist primarily of fees paid to product formulation consultants and are expensed as incurred. Additionally, the Company is required from time to time to make certain milestone payments in connection with the development of technologies in-licensed from third parties. The Company's research and development expenses may fluctuate from period to period.
Liquidity The following table summarizes total current assets, current liabilities and working capital for the dates indicated (in thousands): As of December 31, 2023 2022 Current assets $ 14,972 $ 25,398 Current liabilities 3,590 4,209 Working capital surplus $ 11,382 $ 21,189 Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2023 2022 Net cash (used in) provided by: Operating activities $ (15,294 ) $ (13,977 ) Investing activities (4,344 ) 1,417 Financing activities 5,512 4,519 Net decrease in cash and cash equivalents $ (14,126 ) $ (8,041 ) Cash flows from operating activities Cash used in operating activities for the year ended December 31, 2023 was $15.3 million.
Liquidity The following table summarizes total current assets, current liabilities and working capital for the dates indicated (in thousands): As of December 31, 2024 2023 Current assets $ 9,242 $ 14,972 Current liabilities 2,563 3,590 Working capital surplus $ 6,679 $ 11,382 Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Net cash (used in) provided by: Operating activities $ (9,627 ) $ (15,294 ) Investing activities 7,342 (4,344 ) Financing activities 9 5,512 Net decrease in cash and cash equivalents $ (2,276 ) $ (14,126 ) 22 Table of Contents Cash flows from operating activities Cash used in operating activities for the year ended December 31, 2024 was $9.6 million.
Cash provided by investing activities for the year ended December 31, 2022 of $1.4 million primarily consisted of $920,000 of proceeds from sales of property and equipment, $569,000 proceeds from sale of Verdeca, partially offset by $72,000 of purchases of property and equipment. 29 Table of Contents Cash flows from financing activities Cash provided by financing activities for the year ended December 31, 2023 consisted of gross proceeds of $6.0 million from the March 2023 PIPE financing transaction and proceeds from the purchase of ESPP shares of $12,000, which were offset by payments of transaction costs related to the March 2023 PIPE financing transaction of $497,000.
Cash provided by financing activities for the year ended December 31, 2023 consisted of gross proceeds of $6.0 million from the March 2023 PIPE financing transaction and proceeds from the purchase of ESPP shares of $12,000, which were offset by payments of transaction costs related to the March 2023 PIPE financing transaction of $497,000.
In July 2023, management made the decision to exit the remaining body care brands, Soul Spring and ProVault, as a result of continued pressure on the CBD market due to regulatory uncertainty. Body care operations ceased as of September 30, 2023. Our Product Portfolio Most Americans suffer from a significant fiber deficiency.
In July 2023, Arcadia’s management made the decision to exit the remaining body care brands, Soul Spring and ProVault, as a result of continued pressure on the CBD market due to regulatory uncertainty. Body care operations ceased during the third quarter of 2023.
Gain on sale of property and equipment, net Gain on sale of fixed assets includes gains from the sale of tangible assets sold above their net book value. 23 Table of Contents Impairment of property and equipment Impairment of property and equipment, net includes losses from tangible assets due to impairment or recoverability test charges to write down fixed assets to their fair value or recoverability value.
Impairment of property and equipment Impairment of property and equipment includes losses from tangible assets due to impairment or recoverability test charges to write down fixed assets to their fair value or recoverability value. 17 Table of Contents Impairment of right-of-use (“ROU”) asset Impairment of ROU assets includes losses from right-of-use assets due to impairment or recoverability test charges to write down the ROU asset to their fair value or recoverability value.
Zola Coconut Water Zola is a pure, natural, 100% coconut water with a crisp, clean taste that’s lightly sweet and refreshing. Naturally hydrating and never from concentrate, Zola is Non-GMO Project Verified and only contains 60 calories per serving. In taste tests, Zola beats competitors 2 to 1 and is the best-tasting way to rehydrate, reset and reenergize.
Sourced from Thailand, Zola is a pure, natural, 100% coconut water with a crisp, clean taste that’s slightly sweet and refreshing. Naturally hydrating and rich in electrolytes, Zola is Non-GMO Project Verified and only contains 60 calories per serving.
Off-Balance Sheet Arrangements Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities, other than Verdeca, a joint venture sold in November 2020.
Off-Balance Sheet Arrangements Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities, other than Verdeca, a joint venture sold in November 2020. 23 Table of Contents Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.
With respect to our net loss of $15.6 million, non-cash charges including $1.1 million of stock-based compensation, $884,000 of lease amortization, $2.5 million of write-downs of inventory, $530,000 of impairment of property and equipment, $314,000 of issuance and offering costs, $404,000 of impairment of intangible assets, $439,000 of depreciation, and $1.0 million adjustments in our working capital accounts were offset by $3.2 million for the change in fair value of common stock warrant and option liabilities, gain on sale of Verdeca of $1.1 million, $314,000 of net gain on disposal of property and equipment, and operating lease payments of $932,000.
With respect to our net loss of $7.0 million, non-cash charges including the change in fair value of common stock warrant and option liabilities of $1.5 million, $113,000 of depreciation, $652,000 of lease amortization, $512,000 of stock-based compensation, $154,000 of write-downs of inventory, $36,000 of impairment of property and equipment, offset by $157,000 of amortization of note receivable discount, a gain on disposal of property and equipment of $65,000, a gain on sale of our RS durum wheat trait of $4.0 million, adjustments in our working capital accounts of $596,000, and operating lease payments of $850,000.
Royalty revenues can fluctuate depending on the timing of shipments of product by the third parties to their customers. License revenues License revenues consist of up-front, nonrefundable license fees, annual license fees, and subsequent milestone payments that we receive under our license agreements. Revenue generated from up-front license fees are recognized upon execution of the agreement.
License revenues License revenues consist of up-front, nonrefundable license fees, annual license fees, and subsequent milestone payments that we receive under our license agreements. Revenue generated from up-front license fees are recognized upon execution of the agreement. We recognize annual license fees when it is probable that a material reversal will not occur.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty. We may seek to raise additional funds through debt or equity financings, if necessary. We may also consider entering into additional partner arrangements. Any sale of additional equity would result in dilution to our stockholders.
There are no assurances that required funding will be available at all or will be available in sufficient amounts or on reasonable terms. We may seek to raise additional funds through debt or equity financings, if necessary. We may also consider entering into additional partner arrangements. Any sale of additional equity would result in dilution to our stockholders.
The change in the estimated fair value of common stock warrant and option liabilities was $3.2 million during the year ended December 31, 2022 related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the August 2022 Registered Direct Offering financing transaction. 27 Table of Contents Issuance and offering costs Issuance and offering costs were $430,000 during the year ended December 31, 2023 and were related to the liability classified options issued in the March 2023 PIPE financing transaction.
Issuance and offering costs allocated to liability options Issuance and offering costs were $430,000 during the year ended December 31, 2023 and were related to the liability classified options issued in the March 2023 PIPE financing transaction. There were no such issuance and offering costs in 2024.
Arcadia Wellness, LLC In May 2021, our wholly owned subsidiary Arcadia Wellness, LLC (“Arcadia Wellness” or “AW”), acquired the businesses of Eko, Lief, and Zola.
Previously, Arcadia developed products primarily in wheat, which it commercialized through the sales of seed, grain and food ingredients and products, and through trait licensing and royalty agreements. In May 2021, Arcadia’s wholly owned subsidiary Arcadia Wellness, LLC (“Arcadia Wellness”) acquired the businesses of Eko Holdings, LLC, Lief, LLC, and Zola.
Our selling, general, and administrative expenses may fluctuate from period to period. In connection with our commercialization activities for our consumer products, we expect to increase our investments in sales and marketing, including additional consulting fees. Interest income Interest income consists of interest income on our cash and cash equivalents and investments.
Selling, general and administrative expenses Selling, general and administrative expenses consist primarily of employee costs, professional service fees, broker and sales commission fees, and overhead costs. Our selling, general, and administrative expenses may fluctuate from period to period. Interest income Interest income consists of interest income on our cash and cash equivalents, investments and note receivable.
Impairment of property and equipment, net During the year ended December 31, 2022, the Company recognized $160,000 of impairments of property and equipment related to Archipelago. There was no impairment of property and equipment recognized during the year ended December 31, 2023.
There was no such gain from sale of property and equipment in 2024. Impairment of property and equipment During 2024, the Company recognized impairment of property and equipment held for sale related to Archipelago of $36,000 based on estimated market price. There was no such impairment of property and equipment during 2023.
Impairment of ROU assets During the year ended December 31, 2023, the Company recognized $113,000 of impairment related to ROU assets. There was no impairment of ROU assets recognized during the year ended December 31, 2022.
Impairment of ROU asset During 2023, the Company recognized $113,000 of impairment related to ROU assets. There was no impairment of ROU assets recognized during 2024. Selling, General, and Administrative Selling, general, and administrative expenses increased by $1.4 million, or 17%, in 2024 compared to 2023.
Research and development expenses ("R&D") Research and development expenses consist of costs incurred in the development and testing of our products and other products in development incorporating our traits. These expenses currently consist primarily of fees paid to product formulation consultants and are expensed as incurred.
Operating Expenses Cost of revenues Cost of revenues primarily relates to the sale of Zola products and consists primarily of product and freight costs. Adjustments or write-downs to inventory are also included in cost of revenues. Research and development expenses ("R&D") Research and development expenses consist of costs incurred in the development and testing of our products.
Net loss from discontinued operations Net loss from discontinued operations was $821,000 and $4.8 million during the years ended December 31, 2023 and 2022, respectively. See Note 1 to the consolidated financial statements for further information on discontinued operations.
Income tax expense The income tax provision resulted in an expense of $8,000 during each of the years ended December 31, 2024 and 2023. Net loss from discontinued operations Net loss from discontinued operations for Body Care was $0 and $821,000 during 2024 and 2023, respectively.
Cash provided by financing activities for the year ended December 31, 2022 of $4.5 million consisted of proceeds from the issuance of common stock relating to the August 2022 RDO financing transaction of $5.0 million gross proceeds and proceeds from the purchase of ESPP shares of $7,000, which were offset by payments of transaction costs related to the August 2022 RDO financing transaction of $488,000.
Cash flows from financing activities Cash provided by financing activities for the year ended December 31, 2024 consisted of proceeds from the purchase of ESPP shares of $9,000.
Net loss from discontinued operations Net loss from discontinued operations represents results of operations related to the discontinued body care brands.
Issuance and offering costs allocated to liability classified options Issuance and offering costs generally include placement agent, legal, advisory, accounting and filing fees related to financing transactions. Net loss from discontinued operations Net loss from discontinued operations represents results of operations related to the discontinued GoodWheat and body care brands.
See Note 13 to the consolidated financial statements. There was no such change in fair value recognized during the year ended December 31, 2023. Gain on sale of property and equipment During the years ended December 31, 2023 and 2022, the Company sold property and equipment for net proceeds exceeding book value by $40,000 and $314,000, respectively.
Gain on sale of intangible assets During 2024, the Company realized a gain of $4.0 million related to the sale of its RS durum wheat trait to Corteva. There was no such gain recorded during 2023. Gain on sale of property and equipment During 2023, the Company sold property and equipment for net proceeds exceeding book value by $29,000.
Removed
Overview We are a producer and marketer of innovative, plant-based food and beverage products.
Added
Overview Since acquiring the assets of Zola in May 2021, Arcadia has provided consumers with a way to rehydrate, reset, and reenergize with Zola coconut water products. Arcadia has leveraged its history as a leader in science-based approaches to develop high value products and drive innovation in the consumer goods industry.
Removed
Our history as a leader in science-based approaches to developing high value crop improvements, primarily in wheat, designed to enhance farm economics by improving the performance of crops in the field, as well as their value as food ingredients, has laid the foundation for our path forward.
Added
On May 14, 2024, Arcadia sold its non-GMO Resistant Starch (“RS”) durum wheat trait to longtime partner Corteva Agriscience (“Corteva”) for total cash consideration of $4.0 million. Under the terms of the agreement, Arcadia retained certain rights to use the RS durum wheat trait. Refer to Note 11 to the consolidated financial statements for further details of the transaction.
Removed
We have used non-genetically modified advanced breeding techniques to develop these proprietary innovations which we are now commercializing through the sales of seed and grain, food ingredients and products, trait licensing and royalty agreements. The acquisition of the assets of Live Zola, LLC ("Zola") added coconut water to our portfolio of products.
Added
On May 16, 2024, Arcadia sold the GoodWheat™ brand to Above Food for net consideration of $3.7 million. The strategic decision to sell GoodWheat enabled the Company to monetize its intellectual property early. The assets sold consisted primarily of grain and finished goods inventories, formulations and trademarks.
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Our commercial strategy is to satisfy consumer nutrition demands with the superior functional benefits our crops deliver directly from the farm, enabling us to share premium economics throughout the ag-food supply chain and to build a world-class estate of high value traits and varieties. The acquisition of the Zola brand allows us to broaden our reach within the beverage sector.
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The disposition of GoodWheat met the "held for sale" criteria per ASC 205-20-45-1B and represented a strategic shift that had a major effect on the Company's operations and financial results. As a result, the financial statements and related notes as of December 31, 2024 and 2023 reflect the GoodWheat disposition as a discontinued operation.
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It is also estimated by the U.S. Department of Agriculture (“USDA”), that approximately one-fifth of the FDA recommended calories consumed by people in the US are from wheat. Therefore, the market opportunity for nutritional improvements in wheat are significant not only because the wheat market itself is vast, but also because of the “share of stomach” wheat represents.
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The disposition of 15 Table of Contents GoodWheat resulted in a loss of $1,500 during the year ended December 31, 2024. Refer to Notes 4 and 8 to the consolidated financial statements for further details of the transaction. Our Products Zola Coconut Water Founded in 2002, Zola became part of the Arcadia family of brands in May 2021.
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Considering that most people today are not getting enough fiber or protein in their daily diets, the superior nutrient density of our non-GMO GoodWheat™ (“GoodWheat”) technology can improve the dietary intake of average consumers, by increasing their fiber and protein consumption without changing the way they eat.
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In taste tests, Zola beat competitors 2 to 1, and the Company believes that it is a superior way to rehydrate, reset and reenergize. Zola flavors include original, original with pulp, espresso, lime and pineapple. Agronomic Wheat Traits On average, Americans get approximately 20% of their daily calories from wheat.
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We believe this proprietary advantage gives GoodWheat the potential to become a global standard in wheat. Our Growth Strategy We believe there are significant opportunities to grow our business by executing the following elements of our strategy: 20 Table of Contents • Accelerate the monetization of our GoodWheat™ wheat trait portfolio.
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As a result, Arcadia developed a portfolio of non-GMO specialty wheat traits to offer healthier, nutrient-rich wheat options while providing the same baking quality, taste, and texture as traditional wheat.
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Our proprietary intellectual property ("IP") with multiple non-GMO wheat traits have clear functional benefits, and we will continue to build partnerships across the wheat value chain. We have launched GoodWheat into multiple categories where our wheat provides a compelling point-of-difference and we will continue to evaluate ways to extract value throughout the supply chain. • Evaluate scale M&A opportunities.
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Arcadia’s non-GMO Reduced Gluten High Fiber Wheat has fewer allergenic glutens and higher fiber than traditional wheat while Arcadia’s non-GMO Extended Shelf-Life Wheat extends the shelf life of milled whole wheat flour. Arcadia believes that its proprietary intellectual property with multiple non-GMO wheat traits offer functional benefits and a compelling point of differentiation.
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We intend to evaluate potential mergers, acquisitions and other strategic opportunities that will allow us to scale the GoodWheat value proposition more quickly. We believe there is a significant opportunity to integrate our wheat IP and GoodWheat brand into larger businesses and drive shareholder value. • Scale Zola through retail expansion.
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We intend to seek to monetize our proprietary technology, including through possible asset sale transactions. Recent Developments As described elsewhere in this Report, on December 4, 2024, Arcadia, Roosevelt, and the LP Representatives entered into the Exchange Agreement.
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Based on our research, consumers prefer the clean, crisp taste of Zola to that of other leading coconut water brands. As a result, we plan to continue to invest in trial-driving activities and expand distribution of our Zola coconut water brand through mass market retailers and grocery store chains.
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Subject to the terms of the Exchange Agreement and to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, at the Closing of the transactions contemplated by the Exchange Agreement, Arcadia agreed to issue shares of its common stock to the Limited Partners of Roosevelt in exchange for all of the Partner Interests in Roosevelt.
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The recommended daily value of fiber is 25g for women and children, and 38g for men according to the May 2021 Food and Health Survey by the International Food Information Council. However, less than 10 percent of women and less than 3 percent of men get enough fiber in their daily diets.
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As a result of the Exchange, Arcadia will continue and Roosevelt will continue as a wholly owned subsidiary of Arcadia.
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Our GoodWheat portfolio of better-for-you products addresses these needs as they are naturally higher in fiber and protein than traditional wheat without sacrificing on taste or texture. GoodWheat™ Pasta In June 2022, we launched our GoodWheat pasta in five varieties – penne, spaghetti, fettuccine, elbows and rotini – in select retailers nationwide and on Amazon.
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Upon completion of the Exchange, we estimate that the Limited Partners and the Arcadia stockholders as of immediately prior to the Closing will collectively own approximately 90% and 10%, respectively, of the shares of common stock of Arcadia outstanding immediately after the Closing.
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Our pasta delivers 4 times the fiber of traditional wheat pasta with 9g of protein per serving and no sacrifice on taste. In fact, our research shows that GoodWheat pasta scores at parity on taste with leading wheat pasta competitors and significantly outscores market leading vegetable-based pastas.
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These percentages are estimates, are subject to certain assumptions and are subject to potential adjustment prior to the Closing, including as a result of changes in the number of outstanding shares of Arcadia common stock.
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Made with only our USA farm grown wheat, GoodWheat pasta meets consumers’ preference for clean labels and transparent sourcing. And, in December of 2022, GoodWheat received the American Heart Association’s Heart-Check mark on all of our pasta products.
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As a result, Arcadia stockholders and the former Roosevelt Limited Partners could own a greater, or a lesser, percentage of the outstanding shares of Arcadia immediately after the Closing than the estimates set forth above. Discontinued Operations As mentioned above, Arcadia exited the GoodWheat and body care brands.
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With its high fiber, lower sodium and zero saturated fat, GoodWheat meets the criteria for a heart-healthy pasta and provides consumers with a better-for-you option that delivers superior nutrition with the taste and texture of traditional pasta. 21 Table of Contents GoodWheat™ Pancakes and Waffle Mixes In August 2023, we launched our GoodWheat into the breakfast category with new, better-for-you pancake and waffle mixes as well as single-serve Quikcakes™.
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Gain on sale of intangible assets Gain on sale of intangible assets consists of the gain on sale of our RS durum wheat trait to Corteva. Gain on sale of property and equipment Gain on sale of fixed assets includes gains from the sale of tangible assets sold above their net book value.
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Our new mixes are made with simple ingredients and Arcadia’s proprietary wheat grain, which is naturally higher in fiber and protein than traditional wheat. GoodWheat pancake and waffle mixes are sold in resealable, multi-serve pouches, with each serving delivering 8 times the fiber of traditional pancake mix and 5 grams of protein.
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The $575,000, or 13%, increase in product revenues in 2024 compared to 2023 was driven by an increase in coconut water revenue of $1.3 million, resulting from higher sales volume, partially offset by a decline in sales of GLA oil. The Company did not implement any price increases in 2024.
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Our multi-serve mixes will be available in 3 classic varieties, including Buttermilk, Chocolate Chocolate Chip and Apple Cinnamon. GoodWheat Quikcakes are an innovative, single-serve instant pancake that is a great option for busy mornings – you simply pour one packet into a bowl, add water and microwave for 90 seconds.
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License revenues were $7,000 and $17,000 in 2024 and 2023, respectively. The decrease in license revenues resulted from fewer annual license fees. Royalty revenues were $26,000 in 2024 related to HB4 soybeans. There were no royalty revenues in 2023. Operating expenses (income) Cost of revenues Cost of revenues increased by $789,000, or 36%, in 2024 compared to 2023.
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Quikcakes have 11 times the fiber of traditional single-serve pancake mixes and contain 7 grams of protein per serving. Quikcakes are available in 3 flavors, including Buttermilk, Chocolate Chocolate Chip and Confetti. GoodWheat™ Mac and Cheese In November 2023, we announced the third GoodWheat category, Mac and Cheese.
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This was driven by an increase in Zola units sales as product costs made up 84% of the total cost of revenues in 2024. Refer to Note 19 to the consolidated financial statements for details of cost of revenues.
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Our Mac and Cheese is made with real cheese and contains no artificial flavors, dyes or preservatives and are available in three varieties: Classic Cheddar, White Cheddar and Three Cheese. GoodWheat Mac and Cheese packs in the most fiber of any brand in the category, 4 times more than the leading brand.
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Research and development Research and development expenses decreased by $11,000, or 17%, in 2024 compared to 2023, reflecting our strategy to develop the Zola brand by leveraging our existing resources and minimizing new investment.
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In fact, one serving of GoodWheat Mac and Cheese has the same fiber as two servings of oatmeal, or two and a half servings of broccoli! And, just like our pasta and pancake mixes, GoodWheat Mac and Cheese is higher in protein than the leading brand, with 12 grams of protein per serving.
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This was driven by $1.4 million of transaction costs related to the sale of GoodWheat assets to Above Food as well as the 20 Table of Contents pending transaction with Roosevelt Resources, which included consulting and legal expenses. In addition, there was employee related costs of $600,000 related to the restructuring of the business.
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Discontinued Operations As mentioned above, the Company exited the body care brands and ceased its operations as of September 30, 2023.

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