Arcadia Biosciences, Inc. 10-Q

ITEM 1. 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 1A. R ISK FACTORS In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, which could materially affect our business, financial condition, liquidity or future results. The risks described below and in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity or future results. Risk associated with CBD products The manufacture, labeling and distribution by us of the CBD products in our portfolio is regulated by various federal, state and local agencies. These governmental authorities may commence regulatory or legal proceedings, which could restrict the allowable scope of our product claims or the ability to sell our products in the future. The FDA may regulate these products to ensure that the products are not misrepresented. We are subject to regulation by the federal government and other state and local agencies as a result of our CBD products. The changing compliance environment increases the possibility that we may violate one or more of the requirements. If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, any of which could adversely affect the ability to operate our business and our financial results. Failure to comply with FDA requirements may result in, among other things, injunctions, product withdrawals, recalls, product seizures, fines and criminal prosecutions. Our advertising is subject to the U.S. Federal Trade Commission, or FTC, under the Federal Trade Commission Act regulation. Additionally, some states also permit advertising and labeling laws to be enforced by attorneys general who may seek relief for consumers, seek class-action certifications, seek class-wide damages and product recalls of products sold by us.