What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-13 compared with 2024-05-13 · 148 added, 98 removed, 111 unchanged (69% of the section changed)

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Solely for convenience, the trademarks, service marks and trade names referred to in this report may appear without the ®, TM, or SM symbols, but such references do not constitute a waiver of any rights that might be associated with the respective trademarks, service marks, or trade names.

We are a producer and marketer of innovative, plant-based food and beverage products.

Our history as a leader in science-based approaches to developing high value crop improvements, primarily in wheat, designed to enhance farm economics by improving the performance of crops in the field, as well as their value as food ingredients, has laid the foundation for our path forward.

We have used non-genetically modified advanced breeding techniques to develop these proprietary innovations, which we have commercialized through the sales of seed and grain, food ingredients and products, trait licensing and royalty agreements.

The acquisition of the assets of Live Zola, LLC ("Zola") added coconut water to our portfolio of products.

It is estimated by the U.S.

Department of Agriculture (“USDA”), that approximately one-fifth of the FDA recommended calories consumed by people in the US are from wheat.

Therefore, the market opportunity for nutritional improvements in wheat are significant.

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 are a producer and marketer of innovative, plant-based products.

Our history as a leader in science-based approaches to developing high value crop improvements, primarily in wheat, has laid the foundation for our proprietary innovations, which we have commercialized through the sales of seed, grain, food ingredients and products, and through trait licensing and royalty agreements.

The acquisition of the assets of Live Zola, LLC ("Zola") in May 2021 added coconut water to our portfolio of products.

On May 16, 2024, the Company sold the GoodWheat brand to Above Food Corp.

("Above Food") for net consideration of $3.7 million.

Refer to Note 6 to the condensed consolidated financial statements for further details of the transaction.

On May 14, 2024, the Company sold its non-GMO Resistant Starch ("RS") durum wheat trait to longtime partner Corteva AgriScience ("Corteva").

Under the terms of the agreement, Arcadia retained certain rights to use the RS durum wheat trait.

The Company received $4.0 million in cash payment from Corteva during the three months ended June 30, 2024 and recorded a gain of the same amount as the trait had no carrying value on the condensed consolidated statement of operations and comprehensive income (loss) related to the transaction.

Refer to Note 8 to the condensed consolidated financial statements for further details of the partnership and transaction

In May 2021, the Company’s wholly owned subsidiary Arcadia Wellness, LLC (“Arcadia Wellness” or “AW”) acquired the businesses of Eko Holdings, LLC, Lief, LLC, and Zola.

The acquisition included Saavy Naturals, a line of natural body care products, Soul Spring, a CBD-infused botanical therapy brand in the natural category, and ProVault, a THC-free CBD sports performance formula made with natural ingredients, providing effective support and recovery for athletes (collectively, "body care brands").

Also included in the purchase was Zola, a coconut water sourced exclusively with sustainably grown coconuts from Thailand.

In July 2022, the Company entered into an agreement to license Saavy Naturals to Radiance Beauty and Wellness, Inc.

("Radiance Beauty").

In July 2023, management made the decision to exit the remaining body care brands, Soul Spring and ProVault, as a result of continued pressure on the CBD market due to regulatory uncertainty.

Body care operations ceased during the third quarter of 2023.

Our Growth Strategy

We believe there are significant opportunities to grow our business by executing the following elements of our strategy:

• Accelerate the monetization of our wheat trait portfolio.

• Scale Zola through retail expansion.

Based on our research, consumers prefer the clean, crisp taste of Zola to that of other leading coconut water brands.

As a result, we plan to continue to invest in trial-driving activities and expand distribution of our Zola coconut water brand through mass market retailers and grocery store chains.

• Monetization of our wheat trait portfolio.

Our proprietary intellectual property ("IP") with multiple non-GMO wheat traits have clear functional benefits, which we utilized to launch the GoodWheat brand into multiple categories.

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We intend to evaluate potential asset sales, mergers, acquisitions and other strategic opportunities.

We believe there is a significant opportunity to integrate our wheat IP into larger businesses and drive shareholder value.

• Scale Zola through retail expansion.

Based on our research, consumers prefer the clean, crisp taste of Zola to that of other leading coconut water brands.

As a result, we plan to continue to invest in trial-driving activities and expand distribution of our Zola coconut water brand through mass market retailers and grocery store chains.

Arcadia Wellness, LLC

In May 2021, our wholly owned subsidiary Arcadia Wellness, LLC (“Arcadia Wellness” or “AW”), acquired the businesses of Eko, Lief, and Zola.

Also included in the purchase is Zola, a coconut water sourced exclusively with sustainably grown coconuts from Thailand.

On July 8, 2022, the Company entered into an agreement to license Saavy Naturals to Radiance Beauty and Wellness, Inc.

("Radiance Beauty").

In July 2023, management made the decision to exit the remaining body care brands, Soul Spring and ProVault, as a result of continued pressure on the CBD market due to regulatory uncertainty.

Body care operations ceased during the third quarter of 2023.

Our Product Portfolio

Most Americans suffer from a significant fiber deficiency.

The recommended daily value of fiber is 25g for women and children, and 38g for men according to the May 2021 Food and Health Survey by the International Food Information Council.

However, less than 10 percent of women and less than 3 percent of men get enough fiber in their daily diets.

Our GoodWheat portfolio of better-for-you products addresses these needs as they are naturally higher in fiber and protein than traditional wheat without sacrificing on taste or texture.

GoodWheat Pasta

In June 2022, we launched our GoodWheat pasta in five varieties – penne, spaghetti, fettuccine, elbows and rotini – in select retailers nationwide and on Amazon.

Our pasta delivers 4 times the fiber of traditional wheat pasta with 9g of protein per serving and no sacrifice on taste.

In fact, our research shows that GoodWheat pasta scores at parity on taste with leading wheat pasta competitors and significantly outscores market leading vegetable-based pastas.

Made with only our USA farm grown wheat, GoodWheat pasta meets consumers’ preference for clean labels and transparent sourcing.

And, in December of 2022, GoodWheat received the American Heart Association’s Heart-Check mark on all of our pasta products.

With its high fiber, lower sodium and zero saturated fat, GoodWheat meets the criteria for a heart-healthy pasta and provides consumers with a better-for-you option that delivers superior nutrition with the taste and texture of traditional pasta.

GoodWheat Pancakes and Waffle Mixes

In August 2023, we launched our GoodWheat into the breakfast category with new, better-for-you pancake and waffle mixes as well as single-serve Quikcakes.

Our new mixes are made with simple ingredients and Arcadia’s proprietary wheat grain, which is naturally higher in fiber and protein than traditional wheat.

GoodWheat pancake and waffle mixes are sold in resealable, multi-serve pouches, with each serving delivering 8 times the fiber of traditional pancake mix and 5 grams of protein.

Our multi-serve mixes are available in 3 classic varieties, including Buttermilk, Chocolate Chocolate Chip and Apple Cinnamon.

GoodWheat Quikcakes are an innovative, single-serve instant pancake that is a great option for busy mornings – you simply pour one packet into a bowl, add water and microwave for 90 seconds.

Quikcakes have 11 times the fiber of traditional single-serve pancake mixes and contain 7 grams of protein per serving.

Quikcakes are available in 3 flavors, including Buttermilk, Chocolate Chocolate Chip and Confetti.

GoodWheat Mac and Cheese

In November 2023, we announced the third GoodWheat category, Mac and Cheese.

Our Mac and Cheese is made with real cheese and contains no artificial flavors, dyes or preservatives and are available in three varieties:

Classic Cheddar, White Cheddar and Three Cheese.

GoodWheat Mac and Cheese packs in the most fiber of any brand in the category, 4 times more than the leading brand.

In fact, one serving of GoodWheat Mac and Cheese has the same fiber as two servings of oatmeal, or two and a half servings of broccoli!

And, just like our pasta and pancake mixes, GoodWheat Mac and Cheese is higher in protein than the leading brand, with 12 grams of protein per serving.

Zola Coconut Water

Zola is a pure, natural, 100% coconut water with a crisp, clean taste that’s lightly sweet and refreshing.

Naturally hydrating and never from concentrate, Zola is Non-GMO Project Verified and only contains 60 calories per serving.

In taste tests, Zola beats competitors 2 to 1 and is the best-tasting way to rehydrate, reset and reenergize.

Founded in 2002, Zola became part of the Arcadia family of brands in May 2021.

Sourced from Thailand, Zola is a pure, natural, 100% coconut water with a crisp, clean taste that’s slightly sweet and refreshing.

Naturally hydrating and rich in electrolytes, Zola is Non-GMO Project Verified and only contains 60 calories per serving.

In taste tests, Zola beat competitors 2 to 1 and is the best tasting way to rehydrate, reset and reenergize.

Zola flavors include original, original with pulp, and espresso, and in May 2024, we added lime and pineapple.

Many consumers are interested in reducing levels of gluten in their diet.

Critically, for some, this is due to having Celiac disease ("CD"), an autoimmune disease that impacts many people worldwide with estimates from 1% of the population in Europe to 3.5% in Mexico.

Furthermore, non-celiac gluten sensitivity ("NCGS") impacts an estimated additional 6% of the population.

Both CD and NCGS are characterized by sensitivity to dietary gluten.

The only effective treatment of CD and NCGS requires removal of gluten sources from the diet.

Since required adherence to a gluten-free diet is extremely difficult to accomplish for average consumers, efforts to develop alternative approaches are needed.

Arcadia is continuing to advance a new wheat variety with reduced gluten levels.

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 wheat trait through licensees and research partners.

Improved Shelf Life of Whole Grain Flour

The United States Department of Agriculture recommends that “at least one serving of grains per day must be whole grain-rich” due to evidence that a diet containing whole grains provides a multitude of benefits, including lower risk of obesity, cardiovascular disease, and type-2 diabetes.

Despite these health benefits, consumption of whole grain products is negatively affected by the bitter and rancid flavors and odors that accumulate in whole wheat flour after milling.

Our improved stability and flavor wheat lines greatly reduced the production of rancid and bitter compounds in milled whole grain flour as it progresses through the supply chain.

Whole wheat flour from these lines is being tested further for sensory characteristics and improved shelf-life stability.

This new trait could help improve the shelf life and flavor profile of whole grain products, thus reducing formulation costs and increasing consumer preference and palatability for whole grains.

Discontinued Operations

As mentioned above, the Company exited the body care brands and ceased its operations during the third quarter of 2023.

In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations in the condensed consolidated balance sheets and the results of the discontinued operations as a separate component of loss on the condensed consolidated statements of operations and comprehensive loss for all periods presented.

As mentioned above, the Company exited the GoodWheat and body care brands.

In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operations in the condensed consolidated balance sheets and the results of the discontinued operations as separate components on the condensed consolidated statements of operations and comprehensive income (loss) for all periods presented.

See Note 1 to the condensed consolidated financial statements for further information on discontinued operations.

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Product revenues

Product revenues consist primarily of sales of GoodWheat, Zola and GLA products.

Product revenues consist primarily of sales of Zola and GLA products.

We recognize revenue from product sales when control of the product is transferred to third-party distributors and manufacturers, collectively “our customers,” which generally occurs upon delivery.

Revenues fluctuate depending on the timing of shipments of product to our customers and are reported net of estimated chargebacks, returns and losses.

License revenues

License revenues consist of up-front, nonrefundable license fees, annual license fees, and subsequent milestone payments that we receive under our license agreements.

Revenue generated from up-front license fees are recognized upon execution of the agreement.

We recognize annual license fees when it is probable that a material reversal will not occur.

Operating Expenses

Cost of revenues

Cost of revenues primarily relates to the sale of GoodWheat and Zola products and consists of the cost of raw materials, including internal and third-party services costs related to procuring, processing, formulating, packaging and shipping our products, as well as in-licensing and royalty fees, any adjustments or write-downs to inventory or prepaid production costs.

Cost of revenues primarily relates to the sale of Zola products and consists primarily of product and freight costs.

Adjustments or write-downs to inventory are also included in cost of revenues.

Research and development expenses ("R&D")

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The Company's research and development expenses may fluctuate from period to period.

Loss (Gain) on sale of property and equipment

Loss (Gain) on sale of property and equipment includes losses or gains realized from the sale of tangible assets sold below or above their net book value.

Gain on sale of intangible assets

Gain on sale of intangible assets consists of the gain on sale of our RS durum wheat trait to Corteva.

Impairment of property and equipment

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Interest income consists of interest income on our cash and cash equivalents and investments.

Other income, net

Other income, net consists of miscellaneous income.

Other income (loss), net

Other income (loss), net consists of miscellaneous income or loss.

Valuation loss on March 2023 PIPE

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Net loss from discontinued operations

Net loss from discontinued operations represents results of operations related to the discontinued body care brands.

Net loss from discontinued operations represents results of operations related to the discontinued GoodWheat and body care brands.

See Note 1 to the condensed consolidated financial statements for further information on discontinued operations.

Results of Operations

Comparison of the Three Months Ended March 31, 2024 and 2023

Three Months Ended March 31,

Comparison of the Three Months Ended June 30, 2024 and 2023

Three Months Ended June 30,

(In thousands except percentage)

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Research and development

Loss (Gain) on sale of property and equipment

Gain on sale of intangible assets

Selling, general and administrative

Total operating (income) expenses

Income (loss) from continuing operations

Interest income

Other income (loss), net

Change in fair value of common stock warrant and option liabilities

Net income from continuing operations before income taxes

Income tax provision

Net income from continuing operations

Net loss from discontinued operations — Body Care

Net loss from discontinued operations — GoodWheat

Net loss attributable to non-controlling interest

Net income attributable to common stockholders

Product revenues accounted for 100% of total revenues during the three months ended June 30, 2024.

Product revenues increased $19,000, or 1%, during the three months ended June 30, 2024 compared to the same period in 2023 driven by an increase in Zola sales, which was offset by a decrease in GLA sales.

Cost of revenues

Cost of revenues decreased by $17,000, or 3%, during the three months ended June 30, 2024 compared to the same period in 2023 driven by lower freight cost.

Research and development

Research and development expenses decreased by $17,000, or 63%, during the three months ended June 30, 2024 compared to the same period in 2023 primarily related to lower consulting fees.

Gain on sale of intangible assets

During the three months ended June 30, 2024, the Company realized a gain of $4.0 million related to the sale of its RS durum wheat trait to Corteva.

There was no such gain recorded during the three months ended June 30, 2023.

Selling, general, and administrative

Selling, general, and administrative expenses increased by $609,000, or 29%, during the three months ended June 30, 2024 compared to the same period in 2023 primarily driven by higher consulting and legal expenses related to the Corteva and Above Food transactions in 2024.

Interest income

During the three months ended June 30, 2024, the Company recognized interest income of $150,000, of which $96,000 was related to discount amortization and accrued interest on the promissory note from Above Food.

The remaining difference was related to interest from investments.

During the three months ended June 30, 2023, the Company recognized interest income of $207,000 from investments.

Other income (loss), net

During the three months ended June 30, 2024, the Company recognized other income of $150,000, of which $117,000 was related to realized gains on investments.

During the three months ended June 30, 2023, the Company recognized other loss of $13,000.

Change in the estimated fair value of common stock warrant and option liabilities

The change in the estimated fair value of common stock warrant and option liabilities resulted in a loss of $430,000 during the three months ended June 30, 2024 related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.

The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $4.4 million during the three months ended June 30, 2023 related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.

Net loss from discontinued operations

Net loss from discontinued operations for Body Care was $0 and $330,000 during the three months ended June 30, 2024 and 2023 respectively.

Net loss from discontinued operations for GoodWheat was $789,000 and $2.0 million during the three months ended June 30, 2024 and 2023, respectively.

See Note 1 to the condensed consolidated financial statements for further information on discontinued operations.

Comparison of the Six Months Ended June 30, 2024 and 2023

Six Months Ended June 30,

(In thousands except percentage)

Total revenues

Operating expenses (income):

Cost of revenues

Research and development

Gain on sale of intangible assets

Impairment of property and equipment

Selling, general and administrative

Total operating expenses

Loss from continuing operations

Total operating (income) expenses

Income (loss) from continuing operations

Interest income

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Issuance and offering costs allocated to liability classified options

Net loss from continuing operations

Net loss from discontinued operations

Net income (loss) from continuing operations before income taxes

Income tax provision

Net income (loss) from continuing operations

Net loss from discontinued operations — Body Care

Net loss from discontinued operations — GoodWheat

Net loss attributable to non-controlling interest

Net loss attributable to common stockholders

Product revenues accounted for 100% of total revenues during the three months ended March 31, 2024 and 2023.

Product revenues increased $23,000, or 2%, during the three months ended March 31, 2024 compared to the same period in 2023 driven by GoodWheat and Zola sales, partially offset by higher costs related to new distribution.

Product revenues accounted for 100% of total revenues during the six months ended June 30, 2024.

Product revenues decreased $76,000, or 3%, during the six months ended June 30, 2024 compared to the same period in 2023 driven by a decrease in GLA sales that was partially offset by an increase in Zola sales.

Cost of revenues

Cost of revenues increased by $132,000, or 19%, during the three months ended March 31, 2024 compared to the same period in 2023 primarily related to grain sales.

Gross profit, calculated as total revenues less cost of revenues, was $435,000 and $544,000 during the three months ended March 31, 2024 and 2023, respectively.

The decrease in gross profit is related to higher cost of revenues driven by the grain sale during the three months ended March 31, 2024.

Cost of revenues decreased by $74,000, or 6%, during the six months ended June 30, 2024 compared to the same period in 2023 driven by lower freight cost.

Research and development

Research and development expenses decreased by $87,000, or 24%, during the three months ended March 31, 2024 compared to the same period in 2023 primarily related to lower consulting fees during the three months ended March 31, 2024.

Loss (Gain) on sale of property and equipment

During the three months ended March 31, 2024, the Company sold property and equipment for net proceeds below book value by $2,000.

During the three months ended March 31, 2023, the Company sold property and equipment for net proceeds exceeding book value by $19,000.

Research and development expenses decreased by $24,000, or 60%, during the six months ended June 30, 2024 compared to the same period in 2023 primarily related to lower consulting fees.

Gain on sale of intangible assets

During the six months ended June 30, 2024, the Company realized a gain of $4.0 million related to the sale of its RS durum wheat trait to Corteva.

There was no such gain recorded during the six months ended June 30, 2023.

Impairment of property and equipment

During the three months ended March 31, 2024, the Company recognized impairment of property and equipment held for sale of $36,000.

There was no such impairment of property and equipment during the three months ended March 31, 2023.

During the six months ended June 30, 2024, the Company recognized impairment of property and equipment held for sale of $36,000.

There was no such impairment of property and equipment during the six months ended June 30, 2023.

Selling, general, and administrative

Selling, general, and administrative expenses decreased by $882,000, or 22%, during the three months ended March 31, 2024 compared to the same period in 2023 primarily driven by decreases in employee compensation and marketing expenses.

Selling, general, and administrative expenses increased by $74,000, or 2%, during the six months ended June 30, 2024 compared to the same period in 2023 primarily driven by higher consulting and legal expenses related to the Corteva and Above Food transactions in 2024.

Interest income

During the three months ended March 31, 2024, the Company recognized interest income of $45,000 from investments as compared to $198,000 during the same period in 2023.

During the six months ended June 30, 2024, the Company recognized interest income of $195,000, of which $96,000 was related to discount amortization and accrued interest on the promissory note from Above Food.

The remaining difference was related to interest from investments.

During the six months ended June 30, 2023, the Company recognized interest income of $405,000 from investments.

Other income, net

During the three months ended March 31, 2024, the Company recognized other income of $3,000 as compared to $32,000 during the same period in 2023.

During the six months ended June 30, 2024, the Company recognized other income of $153,000, of which $117,000 was related to realized gains on investments.

During the six months ended June 30, 2023, the Company recognized other income of $19,000.

Valuation loss on March 2023 PIPE

During the six months ended June 30, 2023, the Company recognized a $6.1 million valuation loss related to the March 2023 PIPE financing transaction.

The valuation loss includes the fair value in excess of gross proceeds and the increase in fair value related to the re-pricing of existing warrants.

Change in the estimated fair value of common stock warrant and option liabilities

The change in the estimated fair value of common stock warrant and option liabilities was $593,000 during the three months ended March 31, 2024 related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.

The change in the estimated fair value of common stock warrant and option liabilities was $940,000 during the three months ended three months ended March 31, 2023 related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.

Issuance and offering costs

Issuance and offering costs were $430,000 during the three months ended March 31, 2023 related to the March 2023 PIPE financing transaction.

The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $163,000 and $5.4 million during the six months ended June 30, 2024 and 2023, respectively, related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.

Issuance and offering costs allocated to liability classified options

Issuance and offering costs were $430,000 during the six months ended June 30, 2023 and were related to the liability classified options issued in the March 2023 PIPE financing transaction.

Net loss from discontinued operations

Net loss from discontinued operations was $181,000 during the three months ended March 31, 2023.

Net loss from discontinued operations for Body Care was $0 and $511,000 during the six months ended June 30, 2024 and 2023, respectively.

Net loss from discontinued operations for GoodWheat was $2.3 million and $3.8 million during the six months ended June 30, 2024 and 2023, respectively.

See Note 1 to the condensed consolidated financial statements for further information on discontinued operations.

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Our contractual obligations are primarily related to our operating leases for facilities, land and equipment.

As of March 31, 2024, we had cash and cash equivalents of $3.3 million and short-term investments of $5.2 million.

For the three months ended March 31, 2024, the Company had net losses of $2.4 million and net cash used in operations of $3.2 million.

As of June 30, 2024, we had cash and cash equivalents of $5.5 million, short-term investments of $2.6 million and current note receivable of $1.8 million.

For the six months ended June 30, 2024, the Company had net losses of $1.4 million and net cash used in operations of $5.7 million.

For the twelve months ended December 31, 2023, the Company had net losses of $14.0 million and net cash used in operations of $15.3 million.

Going Concern

We believe that our existing cash and cash equivalents and short-term investments will not be sufficient to meet our anticipated cash requirements for at least the next 12-18 months from the issuance date of these financial statements, and thus raises substantial doubt about the Company’s ability to continue as a going concern.

We believe that our existing cash and cash equivalents, short-term investments and current note receivable will not be sufficient to meet our anticipated cash requirements for at least the next 12-18 months from the issuance date of these financial statements, and thus raises substantial doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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The following table summarizes our cash flows for the periods indicated (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash (used in) provided by:

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Financing activities

Net (decrease) increase in cash

Net decrease in cash

Cash flows from operating activities

Cash used in operating activities for the three months ended March 31, 2024, was $3.2 million.

With respect to our net loss of $2.4 million, non-cash charges including $51,000 of depreciation, $138,000 of stock-based compensation, $177,000 of lease amortization, and $36,000 of impairment of property and equipment, were offset by the change in fair value of common stock warrant and option liabilities of $593,000, adjustments in our working capital accounts of $329,000, and operating lease payments of $269,000.

Cash used in operating activities for the three months ended March 31, 2023, was $3.5 million.

With respect to our net loss of $9.4 million, non-cash charges including $430,000 of issuance and offering costs, $6.1 million of valuation loss recognized for the March 2023 PIPE, $212,000 of stock-based compensation, $180,000 of lease amortization, $71,000 of depreciation, $23,000 of write-downs of inventory, and adjustments in our working capital accounts of $76,000, were offset by the change in fair value of common stock warrant and option liabilities of $940,000, operating lease payments of $191,000 and a gain on disposal of property and equipment of $19,000.

Cash used in operating activities for the six months ended June 30, 2024, was $5.7 million.

With respect to our net loss of $1.4 million, non-cash charges including $85,000 of depreciation, $240,000 of stock-based compensation, $352,000 of lease amortization, and $36,000 of impairment of property and equipment, were offset by the change in fair value of common stock warrant and option liabilities of $163,000, amortization of note receivable discount of $29,000, adjustments in our working capital accounts of $229,000, a gain on disposal of property and equipment of $89,000 and operating lease payments of $507,000.

Cash used in operating activities for the six months ended June 30, 2023, was $8.3 million.

With respect to our net loss of $8.6 million, non-cash charges, including $430,000 of issuance and offering costs, $6.1 million of valuation loss recognized for the March 2023 PIPE, $411,000 of stock-based compensation, $357,000 of lease amortization, $138,000 of depreciation and $192,000 of write-downs of inventory, were offset by the change in fair value of common stock warrant and option liabilities of $5.4 million, adjustments in our working capital accounts of $1.5 million, a gain on disposal of property and equipment of $26,000, and operating lease payments of $382,000.

Cash flows from investing activities

Cash provided by investing activities for the three months ended March 31, 2024 consisted of proceeds of $17,000 from the sale of property and equipment offset by $13,000 of purchases of property and equipment.

Cash provided by investing activities for the three months ended March 31, 2023 consisted of proceeds of $30,000 from sale of property and equipment as well as proceeds of $285,000 from sale of Verdeca.

Cash provided by investing activities for the six months ended June 30, 2024 consisted of proceeds of $162,000 from the sale of property and equipment, proceeds from the sale of investments of $2.5 million, proceeds from the sale of our RS durum wheat trait of $4.0 million, offset by cash paid related to the GoodWheat sale of $2.0 million and $16,000 of purchases of property and equipment.

Cash provided by investing activities for the six months ended June 30, 2023 consisted of proceeds of $37,000 from the sale of property and equipment as well as proceeds of $569,000 from the sale of Verdeca, offset by $5,000 of purchases of property and equipment and $5.0 million of purchases of investments.

Cash flows from financing activities

Cash provided by financing activities for the three months ended March 31, 2024 consisted of proceeds from the purchase of ESPP shares of $5,000.

Cash provided by financing activities for the three months ended March 31, 2023 consisted of gross proceeds of $6.0 million from the March 2023 PIPE financing transaction and proceeds from the purchase of ESPP shares of $5,000, which were offset by payments of transaction costs related to the March 2023 PIPE financing transaction of $497,000.

Cash provided by financing activities for the six months ended June 30, 2024 consisted of proceeds from the purchase of ESPP shares of $5,000.

Cash provided by financing activities for the six months ended June 30, 2023 consisted of gross proceeds of $6.0 million from the March 2023 PIPE financing transaction and proceeds from the purchase of ESPP shares of $5,000, which were offset by payments of transaction costs related to the March 2023 PIPE financing transaction of $497,000.

Off-Balance Sheet Arrangements

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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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis