−Removed: We are a leader in science-based approaches to developing high value crop improvements primarily in wheat, soy and hemp, designed to enhance farm economics by improving the performance of crops in the field, as well as their value as food ingredients, health and wellness products, and their viability for industrial applications.
−Removed: We have used advanced breeding techniques to develop these proprietary innovations which we are now commercializing through the sales of seed and grain food ingredients and products , hemp extracts, trait licensing and royalty agreements.
+Added: We are a producer and marketer of innovative, plant-based health and wellness products.
+Added: 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, health and wellness products, and their viability for industrial applications, has laid the foundation for our path forward.
+Added: 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, hemp extracts, trait licensing and royalty agreements.
+Added: The recent acquisition of the assets of Lief Holdings, LLC (“Lief”), EKO Holdings, LLC (“EKO”) and Live Zola, LLC (“Zola”) adds bath and body care products, CBD consumer products, as well as coconut water, to our portfolio of products.
Our commercial strategy is to satisfy consumer nutrition, health and wellness 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.
−Removed: According to ResearchandMarkets.com, the global wheat flour market in 2019 totaled $181 billion and is expected to reach $220 billion by 2027.
+Added: The acquisition of the Lief, EKO and Zola brands allows us to broaden our reach within the health and wellness sector.
It is also estimated by the U.S.
−Removed: Department of Agriculture (“USDA”), that approximately one-quarter of the FDA recommended calories consumed by people in the US are from wheat.
−Removed: 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.
−Removed: Considering that most people today are not getting enough fiber or protein in their daily diets, the superior nutrient density of our non-GM GoodWheat™ (“GoodWheat”) technology can improve the dietary intake of average consumers, by increasing their fiber and protein consumption without changing the way they eat.
+Added: Department of Agriculture (“USDA”), that approximately one-fifth of the FDA recommended calories consumed by people in the US are from wheat.
+Added: 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”
+Added: wheat represen ts.
+Added: 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.
We believe this proprietary advantage gives GoodWheat the potential to become a global standard in wheat.
−Removed: We also believe the recent legalization of hemp in the U.S.
−Removed: and many other areas of the world has created a significant agricultural and financial opportunity that we can participate in meaningfully.
−Removed: The market has demonstrated broad demand for industrial, nutritional, health and wellness products from hemp, yet the genetics have not yet been optimized for industrial scale production setting up a vast, new opportunity for Arcadia to add value to the industry through seed and extract offerings.
−Removed: The passage of the U.S.
−Removed: Agriculture Improvement Act of 2018 – also known as the Farm Bill – confirmed the federal legalization of hemp, the term given to non-psychoactive cannabis containing less than 0.3% tetrahydrocannabinol (THC).
−Removed: It also included provisions for legalizing on a federal level hemp’s cultivation, transport and sale for the first time in more than 75 years.
−Removed: Hemp, not previously distinguished by the federal government from cannabis, a Schedule 1 drug and banned as an agricultural crop, lacks substantive plant biology research and is limited by suboptimal genetics, highly fragmented germplasm and performance inconsistencies.
−Removed: We are targeting hemp-based solutions that allow farmers to reliably and consistently achieve compliance with USDA regulations, through varieties with improved functionality and application of specific attributes such as select cannabinoid contents for health and wellness, enhanced proteins profiles for plant-based dietary applications and industrial applications such as clothing and hempcrete.
−Removed: Arcadia conducts its business in only federal and state markets in which its activities are legal.
−Removed: In addition to bringing new hemp varieties to market, we also see an attractive opportunity to service the growing consumer demand for CBD and other hemp-derived cannabinoids.
−Removed: According to a New Frontier Data report issued in March 2020, U.S.
−Removed: consumer spending on CBD is projected to grow from an estimated $14B USD in 2020 to $26B USD in 2025 with global demand accelerating significantly as countries formalize regulatory frameworks for the industry.
−Removed: Backed by our own consumer survey data, we believe our premium Hawaiian grown hemp provides a unique value proposition to consumers that will enable us to rapidly gain traction in the marketplace as we grow our B2B and branded retail business channels.
−Removed: Arcadia GoodWheat™
−Removed: In 2018, we launched our GoodWheat brand, a non-genetically modified (non-GM) portfolio of wheat products that enables food manufacturers to differentiate their consumer-facing brands.
−Removed: Consumer food companies are looking to simplify their food ingredient formulations and consumers are demanding “clean labeling” in their foods, paying more for foods having fewer artificial ingredients and more natural, recognizable and healthy ingredients.
−Removed: A 2017 survey by PR agency Ingredient Communications found that 73% of consumers are happy to pay a higher retail price for a food or drink product made with ingredients they recognize.
−Removed: Because GoodWheat increases the nutrient density directly in the primary grains and oils, it provides the mechanism for food formulation simplification naturally and cost effectively to meet evolving consumer demands.
−Removed: The brand launch is a key element of the company’s go-to-market strategy to achieve greater value for its innovations by participating in downstream consumer revenue opportunities.
−Removed: We designed the brand to make an immediate connection with consumers that products made with GoodWheat meet their demands for healthier wheat options that also taste great.
−Removed: The GoodWheat brand encompasses our current and future non-GM wheat portfolio of high fiber Resistant Starch (RS) and Reduced Gluten wheat varieties, as well as future wheat innovations.
−Removed: In October 2019, the U.S.
−Removed: Patent and Trademark Office granted us the latest patents for extended shelf life wheat, the newest trait in our non-genetically modified wheat portfolio.
−Removed: This new trait was designed to promote whole wheat consumption by improving the shelf life and taste of whole grain wheat products.
−Removed: With additional patents granted in 2020 we now hold more than 15 global patents on our high fiber Resistant Starch wheat, protecting both bread wheat and durum (pasta) wheat.
−Removed: Claims granted recently strengthen our intellectual property for our Resistant Starch portfolio of products.
−Removed: We announced in August 2019 an agreement with Bay State Milling Company and Arista Cereal Technologies to bring to market our resistant starch GoodWheat in North America and other key markets, beginning in late 2019.
−Removed: In the daily American diet approximately 500 calories come from wheat products, 25% of the FDA’s recommended daily caloric intake for a woman and 20% for a man.
−Removed: The GoodWheat portfolio of specialty wheat varieties deliver new functional value through an ingredient already an important component of the human diet.
−Removed: Arcadia GoodHemp™
−Removed: In December 2019, we announced the launch of a new product line, GoodHemp, as the company's new commercial brand for delivering hemp seeds, transplants, flower and extracts.
−Removed: The acquisition of Industrial Seed Innovations (“ISI”) in August 2020 brought ISI’s portfolio of strong performing, federally compliant hemp varieties to Arcadia’s GoodHemp™ catalog.
−Removed: ISI’s popular Umpqua and Rogue seed varieties each bring unique and highly desirable characteristics to further differentiate Arcadia’s GoodHemp catalog.
−Removed: We have since introduced another variety, Santiam, to the market, and have built a pipeline that is expected to deliver new commercial varieties on an annual basis.
−Removed: By 2025, the Brightfield Group, a hemp and CBD market research firm, projects U.S.
−Removed: sales of hemp-based CBD to reach $16.8 billion.
−Removed: Additionally, Markets and Markets estimates the non-cannabinoid, industrial hemp global market will exceed $26 billion by 2025.
−Removed: In future years, we expect to bring to market proprietary and patent-protected varieties of hemp designed for their utility as fiber and hemp-based protein.
−Removed: While the addressable market for hemp in these markets still remains to be determined, it can be estimated that hemp would compete favorably for share in the $40.6 billion global protein extract and isolated protein market forecast in 2025 (source:
−Removed: MarketsandMarkets).
−Removed: Verdeca HB4 ® Soybean
−Removed: In 2012, we partnered with Bioceres, Inc.
−Removed: (“Bioceres”) an Argentina-based technology company, to form Verdeca LLC, (“Verdeca”) a U.S.-based joint venture company to deploy next-generation soybean traits developed to benefit soybean producers through quality improvement, stress mitigation and management practices.
−Removed: The HB4 ® soybean varieties deliver two layers of value for growers:
−Removed: drought and herbicide tolerance, offering resistance to a broad-spectrum herbicide utilized to prevent growth of a wide range of annual and perennial broadleaf weeds and grasses.
−Removed: In November 2020, we sold our membership interest in Verdeca to Bioceres in a transaction in which we received cash, shares of Bioceres stock and a royalty stream of up to $10 million on HB4 soybean sales.
−Removed: An additional $2 million in cash is to be paid upon achievement by Verdeca of specific regulatory or commercial milestones.
−Removed: See Note 9 for more information regarding the consideration received.
Our Growth Strategy
We believe there are significant opportunities to grow our business by executing the following elements of our strategy:
−Removed: Scale up our GoodHemp seed sales, develop and introduce novel genetics in hemp.
−Removed: Arcadia has acquired superior germplasm, and through its own breeding program developed a suite of quality hemp seed varieties and is adding to its catalogue by developing more novel, compliant hemp seed varieties possessing productivity, pest resistance and crop quality attributes for license to cultivators, and for derivative products serving the nutraceutical and food industries.
−Removed: Because of our proven ability to develop innovative traits in some of the most complex plant genomes such as wheat, we believe turning our attention to the critical needs facing the rapidly evolving hemp industry greatly enhances our growth markets.
−Removed: In parallel, we are evaluating key partnerships to extend our capabilities vertically to maximize the value creation potential of our innovations.
−Removed: Accelerate the commercialization of our health and nutrition trait portfolio.
−Removed: In 2019, we introduced resistant starch and reduced gluten varieties of GoodWheat to the market and are scaling sales in 2021, working with multiple public breeding platforms and continuing to build partnerships across the wheat value chain, having met the FDA requirement for “high in fiber” and “good source of fiber” designations.
−Removed: We launched a product portfolio of GoodWheat pasta and flour products under the Three Farm Daughters brand with Three Farm Daughters LLLP, that includes artisan linguine, fusilli and fettuccine pasta, in addition to 100% wheat flour.
−Removed: There are more products in the pipeline as we continue to invest in our human resources and commercialization capabilities.
−Removed: As we become more consumer facing and commercially aligned with consumer food companies, greater in-house consumer product knowledge and industry experience will be required.
+Added: Accelerate the monetization of our GoodWheat wheat trait portfolio.
+Added: Our proprietary IP with multiple non-GMO wheat traits have clear functional benefits, and we will continue to build partnerships across the wheat value chain.
We will continue to invest in acquisition, development and retention of the requisite management and industry experience and production and logistics capacity to fully participate in, and control, the route to market for our high value food ingredients.
−Removed: We will continue to build our commercialization expertise, refine go-to-market strategies and execute branding strategy.
+Added: Commercialize and Scale our Arcadia Wellness consumer brands through retail and e-commerce expansion.
+Added: We plan to expand distribution of our core consumer brands through mass market retailers, grocery store chains, and other specialty nutrition stores, as well as through e-commerce.
+Added: These brands can penetrate large and growing categories through high-value, differentiated benefits, with the ability to scale and generate attractive margins.
+Added: We will continue to build our commercialization and scaling expertise, refine go-to-market strategies and invest in effective brand-building.
Evaluate acquisitive growth opportunities.
−Removed: We intend to evaluate potential acquisitions representing vertical integration opportunities with multiple benefits to Arcadia’s growth plans.
−Removed: These could include integrating further into our hemp and wheat supply chains to enhance margin capture and potentially reduce the impact of future supply chain shocks, as well as speed to market new product innovations and food formulations.
−Removed: Our Products and Product Development Pipeline
−Removed: We have improved the quality and nutritional value of plant-based ingredients while improving production efficiency using advanced plant breeding technologies and accelerating innovation through industry leading partners.
−Removed: Our innovations address the challenges facing our food systems as depicted below:
−Removed: We believe our core competencies in plant genomics position Arcadia for unique innovations in new crops.
−Removed: We leverage a research and development team that has over 100 years of combined experience across best in class technology platforms.
−Removed: Our competitive advantages allow for accelerated discovery and market entry.
+Added: We intend to evaluate potential acquisitions representing vertical integration opportunities with multiple benefits to Arcadia’s growth plans.
+Added: These could include integrating further into our supply chains to enhance margin capture, as well as speed to market new product innovations and food formulations.
+Added: Arcadia Wellness, LLC
+Added: In May 2021, our wholly-owned subsidiary Arcadia Wellness, LLC, acquired the assets of Eko, Lief, and Zola.
+Added: We intend for Arcadia Wellness, LLC, to house all of Arcadia Biosciences consumer goods businesses, including core brands GoodWheat, Zola Coconut Water and ProVault Topical Pain Relief, as well as non-core brands SoulSpring and Saavy Naturals Body Care.
+Added: The core brands will be the focus for investment and expansion.
+Added: Our Product Portfolio
+Added: GoodWheat Consumer Products
+Added: The GoodWheat brand is a portfolio of non-GMO wheat-based consumer products that simplifies food ingredient formulations for consumers that are demanding “clean labeling”
+Added: in their foods, and that are willing to pay a higher retail price for products made with ingredients they recognize.
+Added: Because GoodWheat increases the nutrient density directly in the primary grains and oils, it provides the mechanism for food formulation simplification naturally and cost effectively to meet evolving consumer demands.
+Added: The brand launch is a key element of the company’s go-to-market strategy to achieve greater value for its innovations by participating in downstream consumer revenue opportunities.
+Added: We designed the brand to make an immediate connection with consumers that products made with GoodWheat meet their demands for healthier wheat options that also taste great.
+Added: We are preparing for the launch of a line of food products under our GoodWheat brand, with pasta as the initial category to be introduced in the second quarter of 2022.
+Added: Our pasta products will utilize our GoodWheat grain as the sole ingredient, providing 4X the fiber of traditional pasta and 9g protein per serving without sacrificing taste.
+Added: In fact, our research shows taste parity to leading pasta brands, which is unique in the growing better-for-you pasta segment.
+Added: In addition, GoodWheat is the only better-for-you pasta brand made from one simple ingredient, matching consumers’
+Added: preference for cleaner labels.
+Added: Additional categories of products are slated for launch in 2023.
+Added: Zola Coconut Water
+Added: We believe that natural hydration and the power of plant-based ingredients are the keys to unlock your inspiration from within, and we are proud to make delicious plant-powered beverages that provide the energy and focus you need to crush your day.
+Added: From the coconut groves of Thailand, we bring you great tasting coconut water and are proud of our long-lasting relationships with partners around the world who are essential to the quality of our products.
+Added: ProVault Topical Pain Relief
+Added: ProVault’s proprietary THC-Free, CBD-infused blend of natural ingredients and fast-acting cooling agents are designed to safely and effectively relieve muscle and joint pain and soothe your skin.
+Added: Our products are third-party tested for potency and purity from pesticides, fungicides, microbials and heavy metals.
+Added: Our topical pain relievers are formulated to address performance concerns from everyday pain to skin protection.
+Added: So whether you’re a true competitor, a weekend warrior or simply maintaining an active lifestyle, you can count on ProVault to help keep you in the game.
+Added: We believe what you put on your body is just as important as what you put in your body.
+Added: SoulSpring Body Care
+Added: Inspired by nature’s ancient remedies and crafted with care, our SoulSpring products strive to help rejuvenate and renew your mind, body, and soul.
+Added: Our CBD-infused blends of natural ingredients provide a more thoughtful, holistic approach to internal balance and overall well-being.
+Added: SoulSpring premium, broad spectrum CBD is extracted from naturally-grown hemp and blended with nourishing botanicals and minerals.
+Added: Our CBD is purity-tested, non-pshychoactive and non-intoxicating.
+Added: Our passion for wellness means thoughtfully choosing honest, natural ingredients - inspired by ancient remedies and carefully selected for their healing properties.
+Added: We then mindfully blend these ingredients to retain their inner essence and natural properties.
+Added: Saavy Naturals Body Care
+Added: Saavy Naturals products are plant-based, simple and natural.
+Added: Saavy Naturals products never contain parabens, silicones, sulfates, phenoxyethanol, propylene glycol PEGs, petroleum products, artificial colors or fragrances.
+Added: Rigorous third-party testing ensures adherence to our strict standards.
+Added: We're that daily feel-good little luxury that can make all the difference.
+Added: GoodWheat Wheat Traits
Enhanced Quality Grains
−Removed: Our GoodWheat brand redesigns wheat as a functional food adding value to the wheat supply chain by enabling a wider range of choices to meet consumer demands.
−Removed: We believe our GoodWheat products will allow consumers to enjoy unique health benefits in their favorite foods featuring wheat.
−Removed: Our GoodWheat product allows consumer food companies to deliver specialty products to discerning consumers.
−Removed: We have multiple programs aimed at developing wheat and other small grains with improved nutritional qualities.
+Added: The GoodWheat brand also encompasses our current and future non-GMO wheat portfolio of high fiber Resistant Starch (RS), Reduced Gluten wheat varieties, and extended shelf life wheat, as well as future wheat innovations.
+Added: We now hold more than 15 global patents on our high fiber Resistant Starch wheat, protecting both bread wheat and durum (pasta) wheat.
+Added: Claims granted recently strengthen our intellectual property for our Resistant Starch portfolio of products.
+Added: 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.
One such program generated multiple bread wheat and pasta wheat lines with very high levels of amylose, leading to increased levels of resistant starch.
1 unchanged sentence
High fiber resistant starch wheat can deliver fiber and other benefits to refined white flour products and also whole grain food products.
−Removed: In 2016, the FDA approved the use of qualified health claims for corn-based resistant starch in the risk reduction of type-2 diabetes, thus establishing a key precedent for the health benefits associated with this fiber.
−Removed: According to the USDA’s What We Eat in America Survey of 2015-2016, only 5% of the U.S.
−Removed: population meets the recommended level of dietary fiber.
−Removed: On average, Americans consume only 57% of the daily recommended levels.
+Added: According to the American Heart Association, o n average, Americans consume only approximately 50% of the daily recommended levels of fiber.
We believe improving the fiber content of wheat can deliver improved health benefits to a wide population.
−Removed: A second program, in collaboration with Ardent Mills, aims at improving the flavor profile and shelf-life of whole wheat.
−Removed: A third program is aimed at reducing gluten in wheat and other grains.
−Removed: This program additionally targets improved protein quality and amino acid profile in wheat.
−Removed: All of these programs utilize our TILLING platform, and the resulting products are non-GM.
High Fiber Resistant Starch Wheat
2 unchanged sentences
dietary fiber additives and modified starch additives.
−Removed: According to MarketsandMarkets, the global dietary fibers market is projected to reach $6.5 billion by 2022 and the modified starch market is projected to reach $12.4 billion in 2022.
Major growth in these markets is being driven by the convenience health food sector and functional food sector.
1 unchanged sentence
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.
−Removed: RS wheat flour is currently being introduced to North American bakery and CPG companies by our partners, Bay State Milling.
+Added: 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.
We have many RS wheat lines that are being evaluated for optimal quality and agronomic characteristics.
−Removed: Improved Shelf Life of Whole Grain Flour
−Removed: The USDA 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.
−Removed: 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.
−Removed: 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.
−Removed: Whole wheat flour from these lines is being tested further for sensory characteristics and improved shelf life stability.
−Removed: 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.
Reduced Gluten (RG) Wheat
5 unchanged sentences
Since required adherence to a gluten-free diet is extremely difficult to accomplish for average consumers, efforts to develop alternative approaches are needed.
−Removed: Research conducted by the Connell Group in 2018 indicates there is a significant portion of consumers (26% of general population) that choose to reduce gluten levels in their diet despite not having Celiac disease.
−Removed: Further internal qualitative research conducted in 2019 identified a valuable consumer segment recognized as “Gluten Reducers” who aspire to reduce gluten but are not strict gluten-free.
Arcadia is continuing to advance a new wheat variety with reduced gluten levels.
−Removed: Our proprietary, non-GM 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.
+Added: 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.
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.
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.
−Removed: Innovative hemp varieties
−Removed: GoodHemp is our commercial pipeline of superior non-GMO hemp seed varieties.
−Removed: The varieties improve plant quality and productivity, working within federal legal guidelines.
−Removed: GoodHemp products deliver superior emergence and growth characteristics and are available as both seeds and seedlings.
−Removed: Our seed and clone specifications meet compliance requirements because of their low THC profiles, in addition to a multitude of other beneficial characteristics.
−Removed: With the acquisition of Industrial Seed Innovations (“ISI”) in August 2020, ISI’s portfolio of strong performing hemp varieties became part of Arcadia’s GoodHemp catalog.
−Removed: Umpqua is a CBD dominant variety that is designed to mature earlier than most existing varieties making it very attractive for northern latitudes.
−Removed: Rogue on the other hand is designed to mature later in the season resulting in ultra-high yielding plants in lower latitude geographies with longer growing seasons.
−Removed: We have since released Santiam, a CBD dominant variety designed for performance for the grower unique appeal to the consumer.
−Removed: In February 2021 four GoodHemp varieties, Umpqua, Rogue, Santiam and Potomac were evaluated and received approval by the National Association of Official Seed Certifying Agencies (AOSCA) variety review board.
−Removed: This represented a significant milestone serving as independent validation that our GoodHemp varieties are distinct, uniform and genetically stable.
−Removed: This certification also enables these GoodHemp varieties to be exported and sold in Canada through our distribution partner Tritium 3H, pending approval from Health Canada.
−Removed: Nutritional Oils
−Removed: Gamma Linolenic Acid (GLA) Oil
−Removed: Under a license agreement with Abbott Laboratories, we developed a new source of vegetable oil with very high levels of gamma linolenic acid, or GLA, an omega-6 fatty acid.
−Removed: To our knowledge, our GLA safflower oil product has the highest concentration of GLA available in any plant oil at 65%;
−Removed: conventional plant oils range from 10 to 22% GLA.
−Removed: We sell the oil in the United States to manufacturers of dietary supplements, nutritional supplements, medical foods, dog food, and other products.
−Removed: GLA safflower oil is also approved in Canada as a natural health product.
−Removed: Our key customers include significant participants in those markets.
−Removed: As part of a series of transactions with Bioceres in November 2020, we extended an exclusive license for future GLA production and sales to Bioceres and will continue to sell the inventory we have on hand.
−Removed: GLA has multiple clinically demonstrated nutritional and medical benefits, including anti-inflammatory effects, improving skin conditions such as atopic dermatitis and healthy weight management.
−Removed: Our GLA oil may be beneficial when incorporating it into certain foods, dietary supplements, or medical products where conventional sources of GLA are not sufficiently concentrated to deliver amounts that are cost- and performance-effective.
−Removed: Joint Ventures
−Removed: In 2012, we partnered with Bioceres, an Argentina-based technology company, to form Verdeca, a U.S.-based joint venture company to deploy next-generation soybean traits, of which we own 50%.
−Removed: We selected Bioceres as our partner in soybeans, the world’s fourth largest crop by area grown, due to their desirable trait portfolio, their presence in key South American markets, and the significant presence of large soybean growers in their ownership structure.
−Removed: In November, 2020, we sold our membership interest in Verdeca to Bioceres in a transaction in which we received cash, shares of Bioceres stock and a royalty stream of up to $10 million on HB4 soybean sales.
−Removed: An additional $2 million in cash is to be paid upon achievement by Verdeca of specific regulatory or commercial milestones.
−Removed: Archipelago Ventures Hawaii, LLC
−Removed: In August 2019, we formed a new joint venture to serve the Hawaiian, North American and Asian hemp markets, Archipelago Ventures Hawaii, LLC (“Archipelago”).
−Removed: This new venture between Arcadia and Legacy Ventures Hawaii (“Legacy”) combines Arcadia’s extensive genetic expertise and seed innovation history with Legacy’s growth capital and strategic advisory expertise in the Hawaiian markets.
−Removed: Additionally, Legacy brings to the
−Removed: partnership years of proven success in extraction, product formulation and sales of cannabinol oil and distillate products through its equity partner, Vapen CBD.
−Removed: Legacy was originally formed to be a vehicle for its partners to pursue hemp opportunities within the Hawaiian Islands.
−Removed: Archipelago creates a vertically integrated supply chain, from seed to sale, we believe the first of its kind in Hawaii, and has three important strategic imperatives:
−Removed: (1) ensure a reliable supply chain during critical scale up of the global hemp market, a major risk mitigation for success, (2) ensure high quality throughout the supply chain, from genetics to the field and field to the customer, and (3) ensure being well-positioned to address the unique needs and opportunities of the Hawaiian market.
−Removed: Research and Development
−Removed: Product Development Platforms
+Added: Improved Shelf Life of Whole Grain Flour
+Added: The USDA recommends that “at least one serving of grains per day must be whole grain-rich”
+Added: 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.
+Added: 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.
+Added: 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.
+Added: Whole wheat flour from these lines is being tested further for sensory characteristics and improved shelf life stability.
+Added: 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.
+Added: Product Development
With our food and wellness products now entering the market, we are firmly in the commercialization phase of our corporate lifecycle.
−Removed: Moreover, our proven platform technologies in wheat and hemp have broad application across multiple new food and product executions representing significant value enhancement potential.
−Removed: For example, our Three Farm Daughter’s pasta and flour products are just two out of potentially hundreds where our nutrition dense GoodWheat can meaningfully improve the nutrition panel and provide cleaner labels on foods like crackers, snack bars, pancakes, and breads, just to name a few.
−Removed: Therefore, we are de-emphasizing new trait discovery R&D and are increasing our focus on food-science innovation to fully leverage the value in our exiting superior wheat and hemp genetics.
+Added: 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.
We are evolving our organizational capabilities to match this strategy progression to include in-house food formulation and CPG supply chain expertise.
−Removed: Our R&D program to date has been centered around ArcaTech, our proprietary, rapid prototyping and product development pipeline, focused on trait discovery.
−Removed: It is from this system we developed the base platform traits and technologies which we can now leverage as the basis for innovating new food and wellness ingredients to serve the vast addressable markets in wheat and hemp.
−Removed: Therefore, the primary focus of our R&D platform will now be food science innovation, nutrition and wellness product innovation.
−Removed: We will still have residual breeding and introgression work to perform as we complete the agricultural requirements for traits existing in our R&D programs as well new food formulations require.
Food Formulation Innovation.
1 unchanged sentence
Our innovation team is focused on using science-based solutions to leverage our wheat and hemp varieties to develop an array of food products and wellness ingredients.
−Removed: Because we are innovating from directly from our own well-established plant technology traits, we expect this extension of our involvement will provide more meaningful improvements.
−Removed: Through this extended application of the innovation platform, it enables us to be involved in multiple parts of the value chain to ensure the final products adequately capture the spectrum of enriched performance.
−Removed: With our hyper-focused team of scientists, researchers, technicians and chefs, we are positioned to accelerate our reach as wheat and hemp offer unique opportunities for innovative product launches.
−Removed: Controlled plant growth .
−Removed: The controlled plant growth group manages our growth chamber facilities, where plants are grown under precisely controlled conditions, and our greenhouse facility, consisting of approximately 26,000 square feet of high-quality greenhouse space.
−Removed: They also carry out a number of essential functions to support breeding and prototype evaluation including the phenotypic evaluation of plants, controlled crosses, accelerated breeding protocols, rapid phenotyping as well as conducting seed increases for commercial sale.
−Removed: Additionally, for hemp projects, this team manages our cannabinoid chemistry pipeline, which enables high throughput characterization of cannabinoids and terpenes across all research hemp populations.
−Removed: Our growth chamber facilities are located at our headquarters in Davis, California, and our greenhouses are located nearby in Yolo county California.
−Removed: Molecular analysis and accelerated breeding.
−Removed: The molecular analysis team plays a critical role in enabling the rapid deployment of our traits into commercially relevant germplasm by deploying genetic markers to track our proprietary gene alleles as we introgress them into new germplasm.
−Removed: This enables us to rapidly develop and select lines for advancement into field evaluation and to expand the commercial offerings of our GoodWheat product lines.
−Removed: Research, Field Trials, Breeder & Foundation Seed Production .
−Removed: Our trait evaluation and development group is based in Davis, California and conducts remote field operations in American Falls, Idaho;
−Removed: Yuma, Arizona;
−Removed: Br awley, California and multiple locations in Montana, North Dakota , Oregon and Washington.
−Removed: The trait evaluation and development group have extensive field and specialized statistical analytical capabilities that we deploy to support field trial execution an d data analysis internally and with our collaborators.
−Removed: Late-stage regional and agronomic trials are intended to develop extensive data on a limited number of potential commercial plant varieties and develop the best crop management practices suited for the se commercial products.
−Removed: Similarly, regulatory trials develop data for use in submissions for regulatory review and may involve plant varieties developed by our collaborators or our own oil quality and grain quality programs.
−Removed: Commercial Seed, and Grain Production .
−Removed: The commercial development group is based in Davis, California.
−Removed: The group conducts grower field trials and manages the commercial seed and grain production throughout the United States working through seed production specialists and growers and elsewhere globally with our collaborators and joint venture partners.
−Removed: Grower field evaluations are designed to test new commercial seed varieties for yield and agronomic performance and as well as characterizing performance of seed and grain quality attributes.
−Removed: Regulatory Data Generation .
−Removed: Our Analytical Services and Regulatory Science group is located in Davis, California and provides automated DNA preparations, genomic blot analyses, lipid profiling, metabolomics and protein purification services and develops data for use in product selection and validation, certification of SONOVA, GoodWheat and other product specifications, and regulatory submissions.
−Removed: These data support regulatory submissions and provide core trait regulatory packages to our collaborators for use in their crop-specific regulatory applications.
+Added: 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.
+Added: Field Trials and Breeder & Foundation Seed Production .
+Added: 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.
+Added: 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 oil quality and grain quality programs.
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.
−Removed: PIMS encompasses genetic elements such as genes and promoters, GM seeds and plant material received by us, as well as seeds and plants developed by us and used in trait development.
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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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.
−Removed: PIMS interfaces with our Biotechnology Quality Management System, or BQMS, to manage all movement and release of regulated GM plant materials.
−Removed: This ensures all our plant materials are accounted for, tracked and inventoried, which enables us to maintain control over and documentation of all plant materials.
+Added: 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.
−Removed: As of December 31, 2020, and in summary, we owned or exclusively controlled 109 issued patents and 61 pending patent applications worldwide.
+Added: As of December 31, 2021, we owned or exclusively controlled 73 issued patents, 58 pending patent applications worldwide, and 6 pending plant variety protection applications.
These totals reflect the following:
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issued patents, and we owned 11 U.S.
−Removed: patent applications relating to our trait technologies and business methods;
+Added: patent applications and 6 pending plant variety protection applications relating to our plants, trait technologies, and business methods;
and (ii) in connection with foreign territories, we owned 28 and exclusively in-licensed 19 foreign issued patents, and owned 48 pending foreign patent applications.
−Removed: With respect to all of the foregoing patent assets, our exclusive licenses afford us control over the prosecution and maintenance of the licensed patents and patent applications.
+Added: 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.
These 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.
−Removed: As of December 31, 2020, we had eight registered trademarks in the United States and also six registered trademarks in various other countries.
+Added: As of December 31, 2021, Arcadia Biosciences, Inc.
+Added: and Arcadia Wellness, LLC each had five registered trademarks in the United States.
+Added: We also have three registered trademarks in various other countries.
Key Collaborations
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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.
−Removed: In November 2018, we announced our collaboration with Ardent Mills, LLC to develop and commercialize wheat innovations.
−Removed: Ardent Mills, LLC is North America’s leading flour-milling and ingredient company.
−Removed: Our first project focuses on extending the shelf life and improving the flavor of whole wheat products.
−Removed: By using patented Arcadia trait technology, the storage life of whole wheat flour can be extended by slowing the enzymatic processes that reduce shelf life.
−Removed: Because milled flour from wheat carrying Arcadia’s trait technology oxidizes more slowly, it also minimizes the bitterness associated with most whole wheat products.
−Removed: This trait is expected to help improve the taste of whole wheat products and help reduce waste.
−Removed: The extended shelf life wheat trait was developed using our proprietary non-GM wheat genetic diversity TILLING library, an extensive and exclusive resource of trait lines with high-density variations in genetic composition and gene function.
−Removed: Because it is non-GM, the trait has wide application potential across both conventional and organic farming practices.
−Removed: We recently received a U.S.
−Removed: patent for the technology which extends the storage life of whole wheat flour by minimizing oxidation, the latest in our portfolio of wheat trait improvements.
−Removed: We will continue further collaboration with Ardent Mills, LLC and university partners to bring this trait to commercialization in products.
Corteva Agriscience
−Removed: In August 2017, we entered into a new strategic collaboration with Corteva AgriScience to jointly develop and commercialize a breakthrough improved wheat quality trait in North America.
−Removed: The collaboration leverages our TILLING platform with Corteva Agriscience’s enabling technology platforms, high-quality elite germplasm and global commercial channels.
+Added: 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.
+Added: 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.
−Removed: Corteva AgriScience will introgress Arcadia’s trait into its proprietary elite germplasm lines and manage all aspects related to the trait commercialization.
+Added: 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.
Arista Cereal Seeds Pty Ltd and Bay State Milling Company
−Removed: In August 2019, we entered into a binding term sheet with Arista and BSM to resolve the parties’ disputes, including the Delaware Action and the 716 Interference proceeding.
−Removed: Under the binding term sheet, Bay State Milling Company will become the exclusive commercial partner for our high fiber wheat in North America under Bay State Milling’s HealthSense™ brand portfolio, while Arista receives exclusive rights under our high fiber wheat intellectual property in certain geographies, including Australia and Europe.
+Added: In 2019, we entered into an agreement with Arista and Bay State Milling ("BSM").
+Added: 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.
We will continue to market our high fiber wheat under our GoodWheat portfolio of specialty wheat ingredients in other international markets.
−Removed: In December 2019, the three parties entered into a settlement agreement reflecting the terms of the binding term sheet.
−Removed: The markets for seed traits and agricultural biotechnology products are highly competitive, and we face significant direct and indirect competition in several aspects of our business.
−Removed: Competition for improving plant
−Removed: genetics comes from conventional and adv anced plant breeding techniques, as well as from the development of advanced biotechnology traits.
−Removed: Other potentially competitive sources of improvement in crop yields include improvements in crop protection chemicals, fertilizer formulations, farm mechaniz ation, other biotechnology, and information management.
−Removed: Programs to improve genetics and chemistry are generally concentrated within a relatively small number of large companies, while non-genetic approaches are underway with broader set of companies.
+Added: The markets for consumer goods are highly competitive, and we face significant direct and indirect competition in several aspects of our business.
+Added: We compete with both large, established manufacturers, as well as small, innovative producers of pasta and wellness products.
+Added: There are several companies working to improve genetics in crops, such as wheat, that may compete with the trait used in our GoodWheat products.
In general, we believe that our competitors generally fall into the following categories:
−Removed: Specialty health and nutrition ingredient companies :
−Removed: In response to the growing consumer demand for healthier food alternatives, a number of agricultural and food-based companies are augmenting their product and market strategies to bring new quality food ingredients to market.
−Removed: (formerly known as Cellectis Plant Sciences, Inc) is an agriculture biotechnology company that has a similar strategy as ours and is using gene-editing technology to create healthier specialty food ingredients and agriculturally advantageous food crops.
−Removed: Large Agricultural Biotechnology, Seed, and Chemical Companies:
−Removed: According to Phillips McDougall, the leading 10 seed and trait companies as a group invested $3.9 billion in seed and trait research and development in 2017.
−Removed: This includes conventional and advanced plant breeding, as well as biotechnology and gene-editing trait development.
−Removed: According to Phillips McDougall, only a limited number of companies have been actively involved in new trait discovery, development, and commercialization:
−Removed: Corteva (formerly DuPont Pioneer and Dow), Syngenta, BASF, Bayer (including former Monsanto), KWS, and Genective (a joint venture between KWS and Limagrain).
−Removed: Many of these companies have substantially larger budgets for gene discovery, research, development, and product commercialization than we do.
−Removed: Some of these companies also have substantial resources and experience managing the regulatory process for new GM seed traits.
−Removed: Each of Corteva, Syngenta, and Bayer, which accounted for 87% of the 2017 seed trait research and development spend noted above, also have significant chemical crop protection background and businesses.
−Removed: The trait pipelines of these companies are heavily weighted toward biotic stress traits, although they also have significant programs aimed at development of abiotic stress traits and increasingly on output traits such as nutritional content.
−Removed: While these companies have internal programs that may compete with our own, they also seek new traits externally and, as such, some of them either currently are, or may in the future be, our collaborators.
−Removed: Trait Research and Development Companies:
−Removed: There are a number of companies that specialize in research and development of agricultural yield and product quality traits, and we believe that a dozen or more companies, including Ebbu (acquired by Cannopy Growth), Front Range Biosciences, Segra, Yield 10, Arista, Benson Hill Biosystems, Evogene, Keygene, Oregon CBD, High Grade Hemp, and Trilogene, among others, are competitors in our field.
−Removed: We believe that these companies typically focus on a limited number of traits, and do not generally have the product development and regulatory infrastructure necessary to bring traits to market.
−Removed: Therefore, we believe they typically license trait technologies to large industry players with in-house development and regulatory capabilities at a relatively early stage of development.
−Removed: In the development of nutritional traits using non-GM methods, companies like Calyxt and Arista Cereal Technologies are competitors who are also developing quality traits in wheat and other crops.
−Removed: Companies Focused on the Development and Commercialization of Microbial Crop Enhancements:
−Removed: The use of microbial products to enhance crop performance via application to soil, seed, or to crops directly is an area where increased research and development activity has been underway for the past decade or more.
−Removed: We believe that there are more than 20 companies of varying size working in this space.
−Removed: There have been a number of acquisitions, including Becker Underwood by BASF, and joint collaborations in this space but multiple independent companies remain, including Verdesian, Marrone Bioinnovations, Biagro Agrinos, Indigo Agriculture, and Bioconsortia .
−Removed: While these companies could be considered to compete with us as their products seek to improve crop yields, we believe that such products and our traits may be additive, or synergistic, to our future products in terms of increasing crop yields.
−Removed: Producers of f eminized h emp s eed:
−Removed: Within the nascent hemp seed industry, there have been numerous producers of hemp seed, both large and small, not able to wea t her the volatility in the market.
−Removed: A few of the prod ucers remaining whom we consider competitors include Oregon CBD, Front Range Biosciences, Trilogene Seeds and High - Grade Hemp Seed, Hemptown USA, among others.
Companies Selling Wheat Products:
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Our competitors in the pasta market range from companies like Banza and Ancient Harvest who offer high-nutrition pasta alternatives to large, traditional pasta producers including Barilla and De Cecco.
−Removed: We will face similar competition with our flour products.
−Removed: As of December 31, 2020, we had 11 full-time employees dedicated to research and development.
−Removed: Our research and development team possesses technical expertise in molecular biology, biochemistry, genetics, genetic engineering, analytical chemistry, and plant physiology.
−Removed: Our research and development activities are conducted principally at our Davis, California facility, with ongoing field trials conducted in American Falls, Idaho;
−Removed: Brawley, California;
−Removed: Yuma, Arizona;
−Removed: Molokai, Hawaii;
−Removed: and numerous other locations throughout the United States, as well as locations managed by our collaborators worldwide.
−Removed: We have made, and will continue to make, substantial investments in research and development.
+Added: Specialty health and nutrition ingredient companies :
+Added: In response to the growing consumer demand for healthier food alternatives, a number of agricultural and food-based companies are augmenting their product and market strategies to bring new quality food ingredients to market.
+Added: Calyxt is an agriculture biotechnology company that has a similar strategy to ours to create healthier specialty food ingredients and agriculturally advantageous food crops.
+Added: Coconut water:
+Added: The beverage industry is competitive.
+Added: Competitors in this market compete for brand recognition, ingredient sourcing, product shelf space, and e-commerce page rankings.
+Added: Our competitors have similar distribution channels and retailers to deliver and sell their products.
+Added: Competitors in this space include Vita Coco, ZICO, C20 and Harmless Harvest.
+Added: CBD-based wellness products:
+Added: The market for the sale of CBD-based products is fragmented and intensely competitive.
+Added: Currently, we do not believe that there are any businesses that can demonstrate or claim a dominant market share of the growing CBD bath and body care products market.
+Added: Our competitors of CBD-based products include a combination of public and private companies who operate a combination of e-commerce and wholesale brands as well as brick and mortar retail operations like cbdMD and Charlotte’s Web.
+Added: As of December 31, 2021, we had 11 full-time employees dedicated to research and product development.
+Added: Our team possesses technical expertise in a number of fields and activities have been conducted principally at our Davis and Chatsworth, California facilities, with occasional field trials conducted in American Falls, Idaho.
+Added: In prior years, we have made substantial investments in research and development, and have turned our current focus to developing commercial products, anticipating future research and development expenses to decrease substantially.
Our research and development expenses were $3.9 million and $8.0 million in the years ended December 31, 2021 and 2020, respectively.
−Removed: As of December 31, 2020, we had 58 full-time employees, of whom four hold doctorate degrees.
−Removed: Approximately 11 employees are engaged in research and development and 47 in management, operations, commercial operations, accounting/finance, legal and administration.
+Added: As of December 31, 2021, we had 58 full-time employees.
+Added: As mentioned above, 11 employees were engaged in research and product development and 47 in management, operations, commercial production, 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.
+Added: Diversity and Inclusion
+Added: At Arcadia, we recognize the immense benefits that a diverse team brings to our organization, including delivering better business outcomes.
+Added: Our talented people leverage their diverse backgrounds and skills toward a common goal:
+Added: meeting the needs of the present without compromising the ability of future generations to do the same.
+Added: This spirit of inclusive collaboration can be felt throughout our Company.
+Added: Our commitment to diversity begins at the highest levels of our organization, as evidenced by the fact that 50% of our Board of Directors are female.
+Added: From a management perspective, 60% of our CEO's direct reports are female, racially or ethnically diverse, which we believe sets the right tone and expectation for diversity and inclusion within the Company.
+Added: More broadly, 52% of our employees are female.
+Added: Environmental, Social and Governance ("ESG")
+Added: Since our founding, Arcadia has been on a mission to enhance crop yields by enabling plants to more efficiently manage environmental and nutrient stresses, and to enhance the quality and value of agricultural and food products.
+Added: Now that Arcadia has evolved to its commercial stage, the goal is still to lead in a safe, scalable, efficient, and sustainable way.
+Added: Our Board of Directors oversees ESG matters, and is committed to advancing a sustainable development through our products, working to systematically grow our business to meet the challenges of the global energy transition and combat the global climate crisis.
Our corporate headquarters are located in Davis, California, in a facility consisting of approximately 9,224 square feet of office, laboratory and growth chamber space under a lease which expires on March 31, 2025.
−Removed: This facility accommodates research and development, operations, commercial operations, analytical services, and administrative activities.
−Removed: Our administrative offices in Phoenix, Arizona, consist of 2,976 square feet under a lease expires on December 31, 2021.
−Removed: The facility accommodates our finance and other administrative activities.
−Removed: We lease greenhouse space and farmland for agricultural use in Northern California and Oregon, as well as farmland in Southern California, Idaho and Hawaii.
−Removed: We also lease office and warehouse space in Idaho under a lease that expires on December 31, 2023.
+Added: This facility accommodates research and development, finance and accounting, investor relations, and administrative activities.
+Added: Our manufacturing plant is located in Chatsworth, California, in a facility consisting of approximately 14,720 square feet of office, warehouse and production lines.
+Added: We lease greenhouse space and farmland for agricultural use in Northern California, Idaho, and Hawaii.
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.
Ris k Factors.
−Removed: You should carefully consider the following risk factors, in addition to the other information contained in this report on Form 10-K, including the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes.
+Added: You should carefully consider the following risk factors, in addition to the other information contained in this report on Form 10-K, including the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
+Added: and our financial statements and related notes.
If any of the events described in the following risk factors and the risks described elsewhere in this report occurs, our business, operating results and financial condition could be seriously harmed.
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The Secretary must then approve the state or tribal plan after determining if the plan complies with the requirements set forth in the Agriculture Improvement Act of 2018.
−Removed: The Secretary may also audit the state or Indian tribe’s compliance with the federally-approved plan.
−Removed: If the Secretary does not approve the state or Indian tribe’s plan, then the production of hemp in that state or territory of that Indian tribe will be subject to a plan established by USDA.
+Added: The Secretary may also audit the state or Indian tribe’s compliance with the federally-approved plan.
+Added: If the Secretary does not approve the state or Indian tribe’s plan, then the production of hemp in that state or territory of that Indian tribe will be subject to a plan established by USDA.
USDA published a final rule on January 19, 2021, that provided regulations for the production of hemp in the USA that went into effect on March 22, 2021.
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We may be subject to many different state-based regulatory regimens for hemp, all of which could require us to incur substantial costs associated with compliance requirements.
−Removed: O ur research and development operations will be restricted to only where such operations are legal on the local, state and federal levels.
+Added: Our research and development operations will be restricted to only where such operations are legal on the local, state and federal levels.
The DEA issued an interim final rule to codify statutory amendments to the controlled substances act made by the 2018 farm bill.
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We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative policies and procedures, when and if promulgated, could have on our business.
−Removed: We may be forced to dispose of hemp we produce should a harvested crop test in excess of 0.3% THC le vels.
−Removed: The USDA’s Final Rule for hemp cultivation mandates that states test hemp crops and dispose of "hot" crops that exceed 0.3% THC.
−Removed: If a producer has produced cannabis exceeding the acceptable hemp THC level, the material must be disposed of in accordance with USDA regulations.
−Removed: Arcadia is responsible for the costs of disposal of non-compliant crops for which it is the producer, which could potentially be significant should a large number of acres test positive.
There is limited operating history in the legal hemp or cannabis industry, which makes it difficult to accurately assess our future growth prospects.
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We may not be able to successfully address the above factors, which could negatively impact our intended business plans and financial statements.
−Removed: Because we have only recently begun our legal hemp operations, we anticipate our operating expenses will increase prior to earning meaningful revenue from these operations.
−Removed: As we execute our business plan with respect to legal hemp, we anticipate significant increases in our operating and production expenses, and we may not realize significant revenues from such operations.
−Removed: As a result, the Company may incur significant financial losses with respect to such operations in the foreseeable future.
−Removed: There is no history upon which to base any assumption as to the likelihood that these operations will prove successful.
Negative press from being in the hemp/cannabis space could have a material adverse effect on our business, financial condition, and results of operations.
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Any negative press resulting from any incorrect perception that we have entered into the cannabis space could result in a loss of current or future business.
−Removed: It could also adversely affect the public’s perception of us and lead to reluctance by new parties to do business with us or to own our common stock.
+Added: It could also adversely affect the public’s perception of us and lead to reluctance by new parties to do business with us or to own our common stock.
We cannot assure you that additional business partners, including but not limited to financial institutions and customers, will not attempt to end or curtail their relationships with us.
Any such negative press or cessation of business could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Risks Related to Our Business and Our Other Industr ies
+Added: Risks Related to Our Business and Our Other Industries
Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations.
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Business disruptions could include disruptions to the productivity of our employees working remotely and restrictions on their travel may hinder their ability to meet with potential customers and close transactions, as well as temporary closures of the facilities of suppliers or contract growers in our supply chain.
−Removed: While we’ve seen very recent signs of improvement, hemp growers have been slower to make decisions to purchase hemp seeds due to economic uncertainty and wheat consumer packaged goods companies have been heavily focused on production over R&D evaluation as demand for staples like pasta and flour have increased.
−Removed: In addition, the COVID-19 outbreak may result in a severe economic downturn and has already significantly affected the financial markets of many countries.
−Removed: A severe or prolonged economic downturn or political disruption could result in a variety of risks to our business, including our ability to raise capital when needed on acceptable terms, if at all.
+Added: While we’ve seen very recent signs of improvement, hemp growers have been slower to make decisions to purchase hemp seeds due to economic uncertainty and wheat consumer packaged goods companies have been heavily focused on production over R&D evaluation as demand for staples like pasta and flour have increased.
A weak or declining economy or 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.
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We or our partners may not be successful in developing commercial products that incorporate our traits and for which there is consumer demand.
−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: 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
+Added: commercialize seeds and products that contain our traits.
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:
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If adequate funds are not available, we will not be able to successfully execute on our business strategy or continue our business.
−Removed: Our gross profit margins on the products we’ve recently introduced containing our GoodWheat as an ingredient may be impacted by a variety of factors, including but not limited to, variations in raw materials and packaging pricing, customer requirements, market acceptance rate and promotional support costs.
+Added: Our gross profit margins on the products we’ve recently introduced containing our GoodWheat as an ingredient may be impacted by a variety of factors, including but not limited to, variations in raw materials and packaging pricing, customer requirements, market acceptance rate and promotional support costs.
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.
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Should the rate of market acceptance of our products be slower than anticipated, we may incur additional expense by increasing promotional activities.
−Removed: Competition in traits and seeds is intense and requires continuous technological development, and, if we are unable to compete effectively, our financial results will suffer.
+Added: 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.
−Removed: The markets for traits and agricultural biotechnology products are intensely competitive and rapidly changing.
−Removed: 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: The markets for pasta, body care and coconut water products are intensely competitive and rapidly changing.
+Added: In most segments of the seed and agricultural biotechnology market, the number of products available to consumers is steadily increasing as new
+Added: products are introduced.
At the same time, the expiration of patents covering existing products reduces the barriers to entry for competitors.
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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.
−Removed: We rely on third pa rties 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: 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’
+Added: ability to complete the regulatory process for or commercialize such products.
We rely on third parties, including farmers, to conduct, monitor, support, and oversee field trials and commercial production.
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The development or launch of a competing product by a collaborator may adversely affect the advancement and commercialization of any traits we develop and any associated research and development and milestone payments and value-sharing payments we receive from the sale of products containing our traits.
−Removed: Our joint venture agreements could present a number of challenges that may have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Our joint venture arrangements may present financial, managerial, and operational challenges, including potential disputes, liabilities, or contingencies and may involve risks not otherwise present when operating independently, including:
−Removed: our joint venture partners may have business interests, goals or cultures that are or become inconsistent with our business interests, goals or culture;
−Removed: our joint venture partners may share certain approval rights,
−Removed: we may incur liabilities or losses as a re sult of an action taken by the joint venture or our joint venture partners;
−Removed: our joint venture partners may take action contrary to our instructions, requests, policies or objectives, which could reduce our return on investment, harm our reputation or restrict our ability to run our business; and
−Removed: disputes between us and our joint venture partners may result in delays, litigation or operational impasses.
−Removed: The risks described above or the failure to continue any joint venture or joint development arrangement or to resolve disagreements with our current or future joint venture partners could materially and adversely affect our ability to transact the business that is the subject of such joint venture, which would in turn negatively affect our financial condition and results of operations.
−Removed: We and our collaborators may disagree over our right to receive payments under our collaboration agreements, potentially resulting in costly litigation and loss of reputation.
−Removed: Our ability to receive payments under our collaboration agreements depends on our ability to clearly delineate our rights under those agreements.
−Removed: We typically license our intellectual property to our collaborators, who then develop and commercialize seeds with improved traits.
−Removed: However, a collaborator may use our intellectual property without our permission, dispute our ownership of certain intellectual property rights, or argue that our intellectual property does not cover, or add value to, their marketed product.
−Removed: If a dispute arises, it may result in costly patent office procedures and litigation, and our collaborator may refuse to pay us while the dispute is ongoing.
−Removed: Furthermore, regardless of any resort to legal action, a dispute with a collaborator over intellectual property rights may damage our relationship with that collaborator and may also harm our reputation in the industry.
−Removed: Even if we are entitled to payments from our collaborators, we may not actually receive these payments, or we may experience difficulties in collecting the payments to which we believe we are entitled.
−Removed: After our collaborators launch commercial products containing our licensed traits, we will need to rely on the good faith of our collaborators to report to us the sales they earn from these products and to accurately calculate the payments we are entitled to, a process that will involve complicated and difficult calculations.
−Removed: Although we seek to address these concerns in our collaboration agreements by reserving our right to audit financial records, such provisions may not be effective.
−Removed: Our business is subject to various government regulations and if we or our collaborators are unable to timely complete the regulatory process for our products in development, our or our collaborators’ ability to market our traits could be delayed, prevented or limited.
−Removed: Our business is generally subject to two types of regulations:
−Removed: regulations that apply to how we and our collaborators operate and regulations that apply to products containing our traits.
−Removed: We apply for and maintain the regulatory permits necessary for our operations, particularly those covering our hemp seed breeding, seed production, and crop production operations or field trials, while we or our collaborators apply for and maintain regulatory approvals necessary for the commercialization of products containing our seed traits.
−Removed: The large-scale field trials that our collaborators conduct during advanced stages of product development are subject to regulations similar to those to which we are subject.
−Removed: Even if we and our collaborators make timely and appropriate applications for regulatory permits for our field trials, government delays in issuing such permits can significantly affect the development timelines for our products, particularly if the planting period for a crop growing season expires before the necessary permits are obtained.
−Removed: Pursuant to our collaboration agreements, our collaborators also apply for the requisite regulatory approvals prior to commercialization of products containing our traits.
−Removed: In most of our key target markets, regulatory approvals must be received prior to the importation of genetically modified products.
−Removed: These regulatory processes may be complex; for example, the U.S.
−Removed: federal government’s regulation of biotechnology is divided among the EPA, which regulates activity related to the use of plant pesticides and herbicides, the USDA, which regulates the import, field testing, interstate movement, and environmental release of specific technologies that may be used in the creation of genetically modified plants, and the FDA, which regulates foods derived from new plant varieties.
−Removed: In addition to regulation by the U.S.
−Removed: government, products containing our biotech traits may be subject to regulation in each country in which such products are tested or sold.
−Removed: International regulations may vary f rom country to country and from those of the United States.
−Removed: The difference in regulations under U.S.
−Removed: law and the laws of foreign countries may be significant and, in order to comply with the laws of foreign countries, we may have to implement global change s to our products or business practices.
−Removed: Such changes may result in additional expense to us and either reduce or delay product development or sales.
−Removed: Additionally, we or our collaborators may be required to obtain certifications or approvals by foreign gov ernments to test and sell the products in foreign countries.
−Removed: The regulatory process is expensive and time-consuming, and the time required to complete the process is difficult to predict and depends upon numerous factors, including the substantial discretion of the regulatory authorities.
−Removed: Our traits could require a significantly longer time to complete the regulatory process than expected, or may never gain approval, even if we and our collaborators expend substantial time and resources seeking such approval.
−Removed: A delay or denial of regulatory approval could delay or prevent our ability to generate revenues and to achieve profitability.
−Removed: Changes in regulatory review policies during the development period of any of our traits, changes in, or the enactment of, additional regulations or statutes, or changes in regulatory review practices for a submitted product application may cause a delay in obtaining approval or result in the rejection of an application for regulatory approval.
−Removed: Regulatory approval, if obtained, may be made subject to limitations on the indicated uses for which we or our collaborators may market a product.
−Removed: These limitations could adversely affect our potential revenues.
−Removed: Failure to comply with applicable regulatory requirements may, among other things, result in fines, suspensions of regulatory approvals, product recalls, product seizures, operating restrictions, and criminal prosecution.
−Removed: We have on certain occasions notified the USDA of instances of noncompliance with regulations.
−Removed: Although these occasions did not result in any enforcement actions, we may have occasions of noncompliance in the future that result in USDA or other governmental agency enforcement action.
−Removed: Loss of or damage to our germplasm collection would significantly slow our product development efforts.
−Removed: We have developed and maintain a comprehensive collection of germplasm through strategic collaborations with leading institutions, which we utilize in our non-GM programs.
−Removed: Germplasm comprises collections of genetic resources covering the diversity of a crop, the attributes of which are inherited from generation to generation.
−Removed: Germplasm is a key strategic asset since it forms the basis of seed development programs.
−Removed: To the extent that we lose access to such germplasm because of the termination or breach of our collaboration agreements, our product development capabilities would be severely limited.
−Removed: In addition, loss of or damage to these germplasm collections would significantly impair our research and development activities.
−Removed: Although we restrict access to our germplasm at our research facilities to protect this valuable resource, we cannot guarantee that our efforts to protect our germplasm collection will be successful.
−Removed: The destruction or theft of a significant portion of our germplasm collection would adversely affect our business and results of operations.
−Removed: The regulatory environment outside the United States varies greatly from jurisdiction to jurisdiction and there is less certainty how some of our products will be regulated.
−Removed: We may use gene-editing and TILLING technology to develop some of our product portfolio.
−Removed: The regulatory environment around gene-editing and TILLING in plants for food ingredients is greatly uncertain outside of the United States and varies greatly from jurisdiction to jurisdiction.
−Removed: Each jurisdiction may have its own regulatory framework regarding genetically modified foods, which may include restrictions and regulations on planting and growing genetically modified plants and in the consumption and labeling of genetically modified foods, and which may encapsulate our products.
−Removed: To the extent regulatory frameworks outside of the United States are not receptive to our gene-editing and TILLING technologies, this may limit our ability to expand into other global markets.
−Removed: Complying with the regulatory requirements outside the United States will be costly and time-consuming, and there is no guarantee we will be able to commercialize our products outside the United States.
−Removed: We cannot predict whether or when any jurisdiction will change its regulations with respect to our products.
−Removed: Advocacy groups have engaged in publicity campaigns and filed lawsuits in various countries against companies and regulatory authorities, seeking to halt regulatory approval or clearance activities or influence public opinion against genetically engineered and/or gene-edited products.
−Removed: In addition, governmental reaction to negative publicity concerning our products could result in greater regulation of genetic research and derivative products or regulatory costs that render our products cost prohibitive.
−Removed: The scale of the commodity food industry may make it difficult to monitor and control the distribution of our products.
−Removed: As a result, our products may be sold inadvertently within jurisdictions where they ar e not approved for distribution.
−Removed: Such sales may lead to regulatory challenges or lawsuits against us, which could result in significant expenses and management attention.
−Removed: We depend on our key personnel and, if we are not able to attract and retain qualified scientific and business personnel, we may not be able to grow our business or develop and commercialize our products.
−Removed: 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 scientific or business objectives.
+Added: 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.
+Added: 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.
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.
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Additionally, the majority of our workforce is involved in development and commercial activities.
−Removed: 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 plant genetics, agronomics, agribusiness, marketing, and other subjects relevant to our operations.
+Added: 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.
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.
−Removed: Our headquarters, certain research and development operations and our seed storage warehouse are located in Davis, California.
−Removed: Production of hemp and wheat is conducted in California, Hawaii, Oregon, Idaho and other locations.
Our seed, grain and hemp crops are vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are common but difficult to predict.
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Weather conditions, disease or pest infestation could damage the crop in spite of precautions we would normally take to avoid such losses.
−Removed: Our SONOVA product inventory is stored in a single cold storage facility in Northern California.
We take precautions to safeguard our facilities, including insurance, health and safety protocols, and off-site storage of critical research results and computer data.
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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.
−Removed: A lack of availability of water in any of our production areas could impact our business.
−Removed: Adequate quantities and correct timing of the application of water are vital for most agriculture to thrive.
−Removed: Whether particular farms are experiencing water shortages depends, in large part, on their location.
−Removed: However, continuing drought conditions can threaten all farmland other than those properties with their own water sources.
−Removed: Domestic regulations regarding water usage and rights may also limit the availability of water.
−Removed: Moreover, if the farmers and others who purchase our seed to grow crops cannot get an adequate supply of water, or if the cost of water makes it uneconomical for the farmers to grow the crops, we may not be able to sell our seed, which could have an adverse impact on our results of operations.
Our use of hazardous materials exposes us to potential liabilities.
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The limitations imposed by these exclusive licenses could prevent us from expanding our business and increasing our product development initiatives with new collaborators, both of which could adversely affect our business and results of operations.
−Removed: We are subject to the risk of becoming an investment company under the Investment Company Act of 1940.
−Removed: On November 12, 2020, we acquired 1,875,000 shares of common stock of Bioceres Crop Solutions Corp.
−Removed: (“Biox Shares”) in connection with the sale of our membership interest in Verdeca to Bioceres, Inc.
−Removed: and our licensing of certain technology to Bioceres Inc.
−Removed: Our ownership of the Biox Shares could subject us to regulation under the Investment Company Act of 1940 (the “Investment Company Act”).
−Removed: Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that “is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S.
−Removed: government securities and cash items)” (the “40% Threshold”).
−Removed: While we do not intend to engage primarily in the business of investing, reinvesting, owning, holding or trading in investment securities, the value of the Biox Shares relative to our other assets could change over time and cause us to exceed the 40% Threshold.
−Removed: Rule 3a-2 under the Investment Company Act provides one-year relief from the registration requirements of the Investment Company Act to an issuer that, on a transient basis, is deemed to be an investment company.
−Removed: The transient investment company exemption is available to a company no more than once every three years.
−Removed: If we exceed the 40% Threshold because our ownership of the Biox Shares, we will need to dispose of a sufficient amount of the Bios Shares in order to Company with the Investment Company act.
−Removed: Such disposal of the Biox Shares may be on terms that are unfavorable to us and could adversely impact our financial position and results of operations.
−Removed: If we are unable to comply with Rule 3a-2 and are deemed to be an investment company, the consequences of failing to register under the Investment Company Act would be significant.
−Removed: For example, investment companies that fail to register under the Investment Company Act are prohibited from conducting business in interstate commerce.
−Removed: The ramifications of registering as an investment company, both in terms of the restrictions imposed on us and the cost of compliance, would be significant.
−Removed: For example, in addition to expenses related to initially registering as an investment company, the Investment Company Act also would impose various restrictions with regard to our ability to enter into affiliated transactions, the diversification of our assets, and our ability to borrow money.
−Removed: If we became subject to the Investment Company Act at some point in the future, our ability to continue pursuing our business plan would be severely limited.
−Removed: Our ownership of the Biox Shares could cause the value of our assets and our results of operation to vary significantly.
−Removed: The value of the Biox Shares on our balance sheet will be based upon the market value of the Biox Shares as of the end of each quarter.
−Removed: As the Biox Shares trade on the NYSE American stock exchange, their value is subject to fluctuation over time.
−Removed: This fluctuation could be significant, which would materially affect our total assets and results of operations from quarter to quarter, independent of the performance of our core business.
Our commercial success depends on our ability to protect our intellectual property and our proprietary technologies and on the ability to operate without infringing the patents and other proprietary rights of third parties.
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The America Invents Act reforms U.S.
−Removed: patent law in part by changing the standard for patent approval from a “first to invent” standard to a “first inventor to file” standard and developing a post-grant review system.
+Added: patent law in part by changing the standard for patent approval from a “first to invent”
+Added: standard to a “first inventor to file”
+Added: standard and developing a post-grant review system.
This new legislation affects U.S.
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For example, patent applications are maintained in confidence for at least 18 months after their filing.
−Removed: In some cases, patent applications remain confidential in the United States Patent and Trademark Office (“USPTO”) for the entire time prior to issuance of a U.S.
+Added: In some cases, patent applications remain confidential in the United States Patent and Trademark Office (“USPTO”) for the entire time prior to issuance of a U.S.
Patent applications filed in countries outside the United States are not typically published until at least 18 months from their first filing date.
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If we or one of our collaborators are sued for infringing the intellectual property rights of a third party, such litigation could be costly and time consuming and could prevent us or our collaborators from developing or commercializing our products.
−Removed: Our ability to generate significant revenues from our products depends on our and our collaborators’ ability to develop, market and sell our products and utilize our proprietary technology without infringing the intellectual property and other rights of any third parties.
+Added: Our ability to generate significant revenues from our products depends on our and our collaborators’
+Added: ability to develop, market and sell our products and utilize our proprietary technology without infringing the intellectual property and other rights of any third parties.
In the United States and abroad there are numerous third-party patents and patent applications that may be applied toward our proprietary technology, business processes, or developed traits, some of which may be construed as containing claims that cover the subject matter of our products or intellectual property.
Because of the rapid pace of technological change, the confidentiality of patent applications in some jurisdictions (including U.S.
−Removed: provisional patent applications), and the fact that patent applications can take
−Removed: many years to issue, there may be currently pending applications that are unknown to us that may later result in issued patents upon which our products in development or proprietary technologies infringe.
+Added: provisional patent applications), and the fact that patent applications can take many years to issue, there may be currently pending applications that are unknown to us that may later result in issued patents upon which our products in development or proprietary technologies infringe.
Similarly, there may be issued patents relevant to our products in development of which we are not aware.
−Removed: These patents could reduce the value of the traits we develop or the plants containing our traits or, to the extent they cover key technologies on which we have unknowingly relied, require that we seek to obtain licenses or cease u sing the technology, no matter how valuable to our business.
+Added: These patents could reduce the value of the traits we develop or the plants containing our traits or, to the extent they cover key technologies on which we have unknowingly relied, require that we seek to obtain licenses or cease using the technology, no matter how valuable to our business.
We may not be able to obtain such a license on commercially reasonable terms.
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Third parties may assert claims based on existing or future intellectual property rights and the outcome of any proceedings is subject to uncertainties that cannot be adequately quantified in advance.
−Removed: Any litigation proceedings could be costly and time consuming, and negative outcomes could result in liability for monetary damages, including treble damages and attorneys’ fees, if we are found to have willfully infringed a patent.
+Added: Any litigation proceedings could be costly and time consuming, and negative outcomes could result in liability for monetary damages, including treble damages and attorneys’
+Added: fees, if we are found to have willfully infringed a patent.
There is also no guarantee that we would be able to obtain a license under such infringed intellectual property on commercially reasonable terms or at all.
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the enforceability, validity or scope of protection offered by our patents relating to our products.
−Removed: Even if we are successful in these proceedings, we may incur substantial costs and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us.
+Added: Even if we are successful in these proceedings, we may incur substantial costs and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us.
We are subject to governmental export and import controls that could impair our ability to compete in international markets due to licensing requirements and subject us to liability if we are not in compliance with applicable laws.
2 unchanged sentences
Customs regulations, and various economic and trade sanctions regulations administered by the U.S.
−Removed: Treasury Department’s Office of Foreign Assets Controls.
+Added: Treasury Department’s Office of Foreign Assets Controls.
Exports of our products and technology must be made in compliance with these laws and regulations.
−Removed: If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers.
+Added: If we fail to comply with these laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of export or import privileges;
+Added: fines, which may be imposed on us and responsible employees or managers;
+Added: and, in extreme cases, the incarceration of responsible employees or managers.
In addition, changes in our products or solutions or changes in applicable export or import laws and regulations may create delays in the introduction and sale of our products and solutions in international markets, prevent our customers from deploying our products and solutions or, in some cases, prevent the export or import of our products and solutions to certain countries, governments or persons altogether.
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We may be required to pay substantial damages as a result of product liability claims for which insurance coverage is not available.
−Removed: We are subject to product liability claims with respect to our SONOVA and GoodWheat products, and as additional products integrating our traits reach commercialization, product liability claims may increasingly be a commercial risk for our business.
+Added: We are subject to product liability claims with respect to our products, and as additional products integrating our traits reach commercialization, product liability claims may increasingly be a commercial risk for our business.
Product liability claims against us or our collaborators selling products that contain our traits, or allegations of product liability relating to seeds containing traits developed by us, could damage our reputation, harm our relationships with our collaborators, and materially and adversely affect our business, results of operations, financial condition, and prospects.
−Removed: 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.
+Added: 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.
We may seek to expand through acquisitions of and investments in other brands, businesses, and assets.
−Removed: These acquisition activities may be unsuccessful or divert management’s attention.
−Removed: We may consider strategic and complementary acquisitions of and investments in other agricultural biotechnology brands, businesses or other assets, and such acquisitions or investments are subject to risks that could affect our business, including risks related to:
−Removed: the necessity of coordinating geographically disparate organizations;
−Removed: implementing common systems and controls;
−Removed: integrating personnel with diverse business and cultural backgrounds;
−Removed: integrating acquired manufacturing and production facilities, technology and products;
−Removed: combining different corporate cultures and legal systems;
−Removed: unanticipated expenses related to integration, including technical and operational integration;
−Removed: increased costs and unanticipated liabilities, including with respect to registration, environmental, health and safety matters, that may affect sales and operating results;
−Removed: retaining key employees;
−Removed: obtaining required government and third-party approvals;
−Removed: legal limitations in new jurisdictions;
−Removed: installing effective internal controls and audit procedures;
−Removed: issuing common stock that could dilute the interests of our existing stockholders;
−Removed: spending cash and incurring debt;
−Removed: assuming contingent liabilities; and
+Added: These acquisition activities may be unsuccessful or divert management’s attention.
+Added: 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:
+Added: the necessity of coordinating geographically disparate organizations;
+Added: implementing common systems and controls;
+Added: integrating personnel with diverse business and cultural backgrounds;
+Added: integrating acquired manufacturing and production facilities, technology and products;
+Added: combining different corporate cultures and legal systems;
+Added: unanticipated expenses related to integration, including technical and operational integration;
+Added: increased costs and unanticipated liabilities, including with respect to registration, environmental, health and safety matters, that may affect sales and operating results;
+Added: retaining key employees;
+Added: obtaining required government and third-party approvals;
+Added: legal limitations in new jurisdictions;
+Added: installing effective internal controls and audit procedures;
+Added: issuing common stock that could dilute the interests of our existing stockholders;
+Added: spending cash and incurring debt;
+Added: assuming contingent liabilities;
creating additional expenses.
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.
−Removed: Similarly, we may not be able to obtain fin ancing for acquisitions or investments on attractive terms.
+Added: Similarly, we may not be able to obtain financing for acquisitions or investments on attractive terms.
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.
1 unchanged sentence
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.
−Removed: 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.
+Added: 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.
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.
4 unchanged sentences
Our ability to use our net operating loss carryforwards to offset future taxable income may be subject to certain limitations.
−Removed: Under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its NOLs to offset future taxable income.
−Removed: A significant portion of our existing NOLs are limited due to an ownership change under IRC Section 382 that we experienced as a result of the common shares issued in connection with the June 2018 Offering .
+Added: Under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change”
+Added: is subject to limitations on its ability to utilize its NOLs to offset future taxable income.
+Added: A significant portion of our existing NOLs are limited due to an ownership change under IRC Section 382 that we experienced as a result of the common shares issued in connection with the January 2021 and December 2020 Offering.
Future changes in our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code.
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As of December 31, 2021, there were 22,184,235 shares of our common stock outstanding, of which approximately 21,024,743 shares were held by non-affiliates.
−Removed: All of our common stock is freely transferable, except shares held by our “affiliates,” as defined in Rule 144 under the Securities Act.
+Added: All of our common stock is freely transferable, except shares held by our “affiliates,”
+Added: as defined in Rule 144 under the Securities Act.
We may also issue common stock or options to purchase shares of our common stock that under our 2015 Omnibus Equity Incentive Plan and our 2015 Employee Stock Purchase Plan.
−Removed: Securities issued under these plans
−Removed: will be registered under a Form S-8 and are freely tra dable upon issuance.
+Added: Securities issued under these plans will be registered under a Form S-8 and are freely tradable upon issuance.
There were 743,109 options exercisable as of December 31, 2021 at a weighted average exercise price of $7.54.
3 unchanged sentences
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:
−Removed: addition or loss of significant customers, collaborators or distributors;
−Removed: changes in laws or regulations applicable to our industry or traits;
−Removed: additions or departures of key personnel;
−Removed: the failure of securities analysts to cover our common stock after an offering;
−Removed: actual or anticipated changes in expectations regarding our performance by investors or securities analysts;
−Removed: price and volume fluctuations in the overall stock market;
−Removed: volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable;
−Removed: share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
−Removed: our ability to protect our intellectual property and other proprietary rights;
−Removed: sales of our common stock by us or our stockholders;
−Removed: the expiration of contractual lock-up agreements;
−Removed: litigation involving us, our industry, or both;
−Removed: major catastrophic events; and
+Added: addition or loss of significant customers, collaborators or distributors;
+Added: changes in laws or regulations applicable to our industry or traits;
+Added: additions or departures of key personnel;
+Added: the failure of securities analysts to cover our common stock after an offering;
+Added: actual or anticipated changes in expectations regarding our performance by investors or securities analysts;
+Added: price and volume fluctuations in the overall stock market;
+Added: volatility in the market price and trading volume of companies in our industry or companies that investors consider comparable;
+Added: share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
+Added: our ability to protect our intellectual property and other proprietary rights;
+Added: sales of our common stock by us or our stockholders;
+Added: the expiration of contractual lock-up agreements;
+Added: litigation involving us, our industry, or both;
+Added: major catastrophic events;
general economic and market conditions and trends.
6 unchanged sentences
We expect our quarterly operating results to fluctuate widely and unpredictably for the following reasons, among others:
−Removed: our significant customer concentration;
−Removed: the variable timing, stage, and results of our and our collaborators’ development, and regulatory activities;
+Added: our significant customer concentration;
+Added: the variable timing, stage, and results of our and our collaborators’
+Added: development, and regulatory activities;
the effectiveness of our marketing and advertising efforts;
−Removed: the impact of seasonality in agricultural operations on our sales of hemp seeds and products that incorporate our wheat traits ;
+Added: the impact of seasonality in agricultural operations on our sales of hemp seeds and products that incorporate our wheat traits;
adjustments to inventory due to excess or slow-moving;
−Removed: supplier, manufacturing, or quality problems; and
+Added: supplier, manufacturing, or quality problems;
variance in the timing of customer and distributor orders for our products.
−Removed: Further, a large proportion of our costs are fixed, due in part to our significant research and development costs and general and administrative expenses.
−Removed: Thus, even a small decline in revenues could disproportionately affect our quarterly operating results and could cause such results to differ materially from expectations.
Any unanticipated change in revenues or operating results is likely to cause our stock price to fluctuate since such changes reflect new information available to investors and analysts.
5 unchanged sentences
Consequently, you should not rely on dividends to receive a return on your investment.
−Removed: Unresolved Staff Comments.
+Added: Unresolve d Staff Comments.
Not applicable.
+Added: Our corporate headquarters are located in Davis, California, in a facility consisting of approximately 9,224 square feet of office and laboratory space under a lease which expires on March 31, 2025.
+Added: This facility accommodates research and development, accounting and other administrative activities.
+Added: Our manufacturing facility in Chatsworth, California, consists of 14,720 square feet under a lease expires on May 1, 2024.
+Added: We lease greenhouse space and farmland for agricultural use in Idaho, Northern California, and Hawaii.
+Added: We also lease office and warehouse space in Idaho under a lease that expires on December 31, 2023.
+Added: 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.
+Added: Legal Proceedings.
+Added: We currently are not a party to any material litigation or other material legal proceedings.
+Added: From time to time, we may be subject to legal proceedings and claims in the ordinary course of business.
+Added: Mine Saf ety Disclosures.
+Added: Not applicable.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.