What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-08 compared with 2024-11-12 · 115 added, 156 removed, 95 unchanged (74% 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.

Since acquiring the assets of Live Zola, LLC ("Zola") in May 2021, the Company has provided consumers with a great tasting way to rehydrate, reset, and reenergize with Zola coconut water products.

The company has leveraged its history as a leader in science-based approaches to develop high value products and drive innovation in the consumer goods industry.

Previously, the Company developed products primarily in wheat, which it commercialized through the sales of seed, grain and food ingredients and products, and through trait licensing and royalty agreements.

On May 16, 2024, the Company sold the GoodWheat brand to Above Food Ingredients 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").

Arcadia has leveraged its history as a leader in science-based approaches to develop high value products and drive innovation in the consumer goods industry.

Since acquiring the assets of Zola in May 2021, Arcadia has provided consumers with a way to rehydrate, reset, and reenergize with Zola coconut water products.

Previously, Arcadia developed products primarily in wheat, which it commercialized through the sales of seed, grain and food ingredients and products, and through trait licensing and royalty agreements.

On May 14, 2024, Arcadia sold its non-GMO Resistant Starch (“RS”) durum wheat trait to longtime partner Corteva Agriscience (“Corteva”) for total cash consideration of $4.0 million.

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

The Company received $4.0 million in cash payment from Corteva during the nine months ended September 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 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:

• 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.

We believe our wheat provides a compelling point of difference and we will continue to evaluate ways to extract value from our proprietary technology.

• Evaluate M&A opportunities.

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

Our Product Portfolio

Refer to Note 9 to the condensed consolidated financial statements for further details of the transaction.

On May 16, 2024, Arcadia sold the GoodWheat brand to Above Food for net consideration of $3.7 million.

The strategic decision to sell GoodWheat enabled the Company to monetize its intellectual property early.

The assets sold consisted primarily of grain and finished goods inventories, formulations and trademarks.

The disposition of GoodWheat represented a strategic shift that had a major effect on the Company's operations and financial results.

As a result, the financial statements and related notes as of March 31, 2025 and 2024 reflect the GoodWheat disposition as a discontinued operation.

The disposition of GoodWheat resulted in a loss of $1,500 during the second quarter of 2024.

Refer to Notes 3 and 7 to the condensed consolidated financial statements for further details of the transaction.

On December 4, 2024, Arcadia, Roosevelt Resources LP (“Roosevelt” or the “Partnership”) and Elliott Roosevelt, Jr.

Roosevelt, in their capacities as representatives of the limited partners of the Partnership entered into a Securities Exchange Agreement (as it may be amended from time to time, the “Exchange Agreement”).

Subject to the terms of the Exchange Agreement and to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, at the closing of the transactions contemplated by the Exchange Agreement (the "Closing"), Arcadia agreed to issue shares of its common stock to the limited partners of Roosevelt in exchange for all of the limited partnership interests of Roosevelt and to the sole member of the general partner of Roosevelt (together with the limited partners, referred to collectively as the “Limited Partners”) in exchange for its membership interest (together with the limited partnership interests of the Limited Partners, the “Partner Interests”) in the limited liability company that is the general partner of Roosevelt (such exchange, contributions and issuances referred to as the “Exchange”).

As a result of the Exchange, Arcadia will continue and Roosevelt will continue as a wholly owned subsidiary of Arcadia.

Upon completion of the Exchange, and based on the number of shares issuable pursuant to the Exchange Agreement (and assuming that no other shares are issuable to third parties in connection with the Closing), the Limited Partners and the Arcadia stockholders as of immediately prior to the Closing will own 90% and 10%, respectively, of the shares of common stock of Arcadia outstanding immediately after the Closing.

On February 14, 2025, the Company filed a registration statement on Form S-4 with the SEC relating to the shares to be issued in the transaction.

The registration statement also included a proxy statement/prospectus relating to a meeting of stockholders of the Company to be held to vote on proposals approve the issuance of shares pursuant to the Exchange Agreement and related proposals.

On April 30, 2025, the parties to the Exchange Agreement entered into a First Amendment to Securities Exchange Agreement (the “Amendment”).

The Amendment amended certain provisions of the Exchange Agreement, including without limitation the following:

(i) the “Termination Date” provided for in one of the closing conditions described in the Exchange Agreement, which allows a party to terminate the Exchange Agreement if the Closing (as defined in the Exchange Agreement) has not occurred by May 15, 2015, was amended to be August 15, 2025;

(ii) the provisions governing the number of shares of common stock that are issuable to the Limited Partners of Roosevelt were amended so that the number is calculated such that the number of shares to be issued to the Limited Partners equals 90% of the number of shares of common stock outstanding immediately after the Closing giving effect to the number of shares issuable to the Limited Partners (and ignoring and not giving effect to any other shares of common stock that may be issuable to any other persons in connection with or immediately after the Closing) (the “Exchange Shares”), without any possible upward or downward adjustments to the number of Exchange Shares to be issued based on the amount of cash and cash equivalents of the Company as of the Closing Date;

and (iii) certain definitions related to determination of the Company’s cash amount at the Closing Date were eliminated.

On March 28, 2025, Arcadia entered into an agreement with Bioceres Crop Solutions Corp.

("BIOX") pursuant to which BIOX agreed to transfer to the Company all rights and materials relating to certain soy traits that were included in licenses granted by the Company to BIOX in the November 2020 sale of Verdeca.

In addition, BIOX agreed to pay a total of $750,000 to the Company.

The Company agreed to transfer to BIOX all of the Company's granted patents, pending applications, related materials and documents related to the Company's reduced gluten and oxidative stability patents.

In addition, the parties agreed to amend a previous agreement between the parties to eliminate any obligation to pay the Company future product royalties under the agreement.

The Company recorded a gain of $750,000 on the condensed consolidated statement of operations and comprehensive income (loss) related to this transaction as the patents, pending applications and future product royalties have no carrying value.

As of March 31, 2025, the Company received payment for $500,000 of the $750,000.

The Company received payment for the remaining $250,000 in April 2025.

On April 9, 2025, baseline tariffs imposed by the U.S.

government went into effect, and at this time, the U.S.

government has delayed the effective date for additional country-specific tariffs until July 2025.

The impact of tariffs on the Company remains uncertain, and it is possible that features of the tariff policy may change before the country-specific tariffs take effect.

We are closely monitoring the tariff landscape and are in discussions with our business partners to explore ways to mitigate the impact of tariffs on the Company.

For additional information regarding the potential impacts of tariffs on our business and results of operations, see Part I, "Item 1A.

Risk Factors” in our Annual Report on Form 10-K, filed with the SEC on March 25, 2025.

Zola Coconut Water

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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.

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.

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.

In taste tests, Zola beat competitors 2 to 1, and the Company believes that it is a superior way to rehydrate, reset and reenergize.

Zola flavors include original, original with pulp, espresso, lime and pineapple.

Agronomic Wheat Traits

As described in Note 1 to the condensed consolidated financial statements above, our March 2025 agreement transferred all of our patents, pending applications, related materials and documents related to the Company's reduced gluten and oxidative stability patents.

In addition, due to various prior agreements and transactions, Arcadia no longer retains any effective commercialization rights to its resistant starch portfolio of patents.

As a result, the Company does not expect to receive any license or royalty fees in the future related to any wheat-based intellectual property rights.

Discontinued Operations

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 loss for all periods presented.

As mentioned above, Arcadia exited the GoodWheat brand.

In accordance with the provisions of ASC 205-20, Arcadia 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 3 to the condensed consolidated financial statements for further information on discontinued operations.

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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

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Research and development expenses ("R&D")

Research and development expenses consist of costs incurred in the development and testing of our products and other products in development incorporating our traits.

Research and development expenses consist of costs incurred in the development and testing of our products.

These expenses currently consist primarily of fees paid to product formulation consultants and are expensed as incurred.

Additionally, the Company is required from time to time to make certain milestone payments in connection with the development of technologies in-licensed from third parties.

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

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

Impairment of property and equipment includes losses from tangible assets due to impairment or recoverability test charges to write down fixed assets to their fair value or recoverability value.

Gain on sale of intangible assets

Gain on sale of intangible assets consists of the gain on sale of our reduced gluten and oxidative stability patent portfolios in March 2025.

Change in fair value of contingent consideration

Change in the fair value of contingent consideration is comprised of the gain associated with the reduction of our contingent liability as the result of a decision to abandon a program that was previously accrued.

Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of employee costs, professional service fees, broker and sales commission fees, and overhead costs.

Our selling, general, and administrative expenses may fluctuate from period to period.

Interest income

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Other income, net consists of miscellaneous income net of miscellaneous losses.

Valuation loss on March 2023 PIPE

Valuation loss on March 2023 PIPE includes the fair value in excess of gross proceeds and the increase in fair value related to the re-pricing of existing warrants.

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

Change in the estimated fair value of common stock warrant and option liabilities is comprised of the fair value remeasurement of the liabilities associated with our financing transactions.

Issuance and offering costs allocated to liability classified options

Issuance and offering costs generally include placement agent, legal, advisory, accounting and filing fees related to financing transactions.

Net loss from discontinued operations

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

Net loss from discontinued operations represents results of operations related to the discontinued GoodWheat brand.

See Note 3 to the condensed consolidated financial statements for further information on discontinued operations.

Results of Operations

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

Three Months Ended September 30,

Comparison of the Three Months Ended March 31, 2025 and 2024

Three Months Ended March 31,

(In thousands except percentage)

Total revenues

Operating expenses:

Operating expenses (income):

Cost of revenues

Research and development

Impairment of property and equipment

Gain on sale of intangible assets

Change in fair value of contingent consideration

Selling, general and administrative

Total operating expenses

Loss from continuing operations

Income (loss) from continuing operations

Interest income

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Change in fair value of common stock warrant and option liabilities

Net loss from continuing operations before income taxes

Income tax provision

Net 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 September 30, 2024.

Product revenues increased $239,000, or 18%, during the three months ended September 30, 2024 compared to the same period in 2023 driven by an increase in Zola sales.

Cost of revenues

Cost of revenues increased by $214,000, or 26%, during the three months ended September 30, 2024 compared to the same period in 2023 driven by higher revenues and input costs.

Research and development

Research and development expenses increased by $9,000, or 60%, during the three months ended September 30, 2024 compared to the same period in 2023.

Selling, general, and administrative

Selling, general, and administrative expenses increased by $379,000, or 20%, during the three months ended September 30, 2024 compared to the same period in 2023 primarily driven by employee severance expenses related to the change in management.

Interest income

During the three months ended September 30, 2024, the Company recognized interest income of $233,000, of which $186,000 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 September 30, 2023, the Company recognized interest income of $133,000 from investments.

Other income, net

During the three months ended September 30, 2024 and 2023, the Company recognized other income of $15,000 and $17,000, respectively.

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 gain of $330,000 and $608,000 during the three months ended September 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.

Net income (loss) from continuing operations

Net loss from discontinued operations

Net loss from discontinued operations for Body Care was $83,000 during the three months ended September 30, 2023.

Net loss from discontinued operations for GoodWheat was $430,000 and $1.8 million during the three months ended September 30, 2024 and 2023, respectively.

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

Comparison of the Nine Months Ended September 30, 2024 and 2023

Nine Months Ended September 30,

(In thousands except percentage)

Total revenues

Operating expenses:

Net income (loss) attributable to common stockholders

Product revenues increased $213,000, or 22%, and consisted entirely of Zola coconut water sales during the three months ended March 31, 2025 compared to the same period in 2024.

Zola revenues increased $567,000, or 90% during the three months ended March 31, 2025 compared to the same period in 2024.

This was primarily driven by an increase in distribution resulting in higher sales volume.

The Company did not implement any price increases during 2024 or the first quarter of 2025.

Revenues for the three months ended March 31, 2024 included $354,000 from GLA oil.

Cost of revenues

Cost of revenues increased by $211,000, or 45%, and consisted entirely of Zola coconut water costs during the three months ended March 31, 2025 compared to the same period in 2024.

Zola cost of revenues increased $244,000, or 56% during the three months ended March 31, 2025 compared to the same period in 2024 driven by the increase in Zola unit sales.

Cost of revenues for the three months ended March 31, 2024 included $33,000 from GLA oil.

Research and development

Gain on sale of intangible assets

Research and development expenses decreased by $6,000, or 100%, during the three months ended March 31, 2025 compared to the same period in 2024 reflecting our strategy to develop the Zola brand by leveraging our existing resources and minimizing new investment.

Impairment of property and equipment

Selling, general and administrative

Total operating expenses

Loss from continuing operations

Interest income

Other income, net

Valuation loss on March 2023 PIPE

Change in fair value of common stock warrant and option liabilities

Issuance and offering costs allocated to liability classified options

Net loss from continuing operations before income taxes

Income tax provision

Net 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 nine months ended September 30, 2024.

Product revenues increased $162,000, or 4%, during the nine months ended September 30, 2024 compared to the same period in 2023 driven by an increase in Zola sales.

Cost of revenues

Cost of revenues increased by $140,000, or 7%, during the nine months ended September 30, 2024 compared to the same period in 2023 driven by higher revenues and input costs.

Research and development

Research and development expenses decreased by $15,000, or 27%, during the nine months ended September 30, 2024 compared to the same period in 2023.

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

There was no such impairment of property and equipment during the three months ended March 31, 2025.

Gain on sale of intangible assets

During the nine months ended September 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 nine months ended September 30, 2023.

Impairment of property and equipment

During the nine months ended September 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 nine months ended September 30, 2023.

During 2025, the Company realized a gain of $750,000 related to the sale of our reduced gluten and oxidative stability patent portfolios in March 2025.

There was no such gain recorded during 2024.

Change in fair value of contingent consideration

During the three months ended March 31, 2025, the change in the fair value of contingent consideration was due to the gain of $1.0 million associated with the reduction of our contingent liability as the result of a decision to abandon a program with respect to which a contingent liability was previously accrued.

See Note 14 to the condensed consolidated financial statements for details.

There was no change in fair value of contingent consideration during the three months ended March 31, 2024.

Selling, general, and administrative

Selling, general, and administrative expenses increased by $451,000, or 7%, during the nine months ended September 30, 2024 compared to the same period in 2023 primarily driven by employee severance expenses related to the change in management as well as higher consulting and legal expenses.

Selling, general, and administrative expenses decreased by $324,000, or 16%, during the three months ended March 31, 2025 compared to the same period in 2024, driven by operating costs and employee related costs in 2024 that were absent in 2025.

Interest income

During the nine months ended September 30, 2024, the Company recognized interest income of $428,000, of which $282,000 was related to discount amortization and accrued interest on the promissory note from Above Food.

During the three months ended March 31, 2025, the Company recognized interest income of $207,000, of which $180,000 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 nine months ended September 30, 2023, the Company recognized interest income of $538,000 from investments.

During the three months ended March 31, 2024, the Company recognized interest income of $45,000 from investments.

Other income, net

During the nine months ended September 30, 2024, the Company recognized other income of $168,000, of which $117,000 was related to realized gains on investments.

During the nine months ended September 30, 2023, the Company recognized other income of $36,000.

Valuation loss on March 2023 PIPE

During the nine months ended September 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.

There was no such valuation loss during the nine months ended September 30, 2024.

During the three months ended March 31, 2025 and 2024, the Company recognized other income of $0 and $3,000, respectively.

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 gain of $493,000 and $6.0 million during the nine months ended September 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 nine months ended September 30, 2023 and were related to the liability classified options issued in the March 2023 PIPE financing transaction.

There were no such issuance and offering costs during the nine months ended September 30, 2024.

The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $1.9 million and $593,000 during the three months ended March 31, 2025 and 2024, 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.

Net loss from discontinued operations

Net loss from discontinued operations for Body Care was $591,000 during the nine months ended September 30, 2023.

Net loss from discontinued operations for GoodWheat was $2.7 million and $5.7 million during the nine months ended September 30, 2024 and 2023, respectively.

Net loss from discontinued operations for GoodWheat was $1.5 million during the three months ended March 31, 2024, reflecting the sale of the GoodWheat brand and related assets to Above Food during the second quarter of 2024.

See Note 3 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 September 30, 2024, we had cash and cash equivalents of $3.9 million, short-term investments of $2.6 million and current note receivable of $1.8 million.

For the nine months ended September 30, 2024, the Company had net losses of $3.0 million and net cash used in operations of $7.4 million.

As of March 31, 2025, we had cash and cash equivalents of $3.2 million and current note receivable of $2.0 million.

In April 2025, we received $250,000 representing the remaining payment from BIOX pursuant to our March 28, 2025 agreement, pursuant to which we transferred all of our granted patents, pending applications, related materials and documents related to our reduced gluten and oxidative stability patents.

For the three months ended March 31, 2025, the Company had net income of $2.6 million and net cash used in operations of $1.6 million.

For the twelve months ended December 31, 2024, the Company had net losses of $7.0 million and net cash used in operations of $9.6 million.

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.

Material Cash Requirements

We believe that our existing cash and cash equivalents will not be sufficient to meet our anticipated cash requirements for at least the next 12 months from the issuance date of these financial statements, which 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.

We may seek to raise additional funds through debt or equity financings, if necessary.

We may also consider entering into additional partner arrangements.

Any sale of additional equity would result in dilution to our stockholders.

Our incurrence of debt would result in debt service obligations, and the instruments governing our debt could provide for additional operating and financing covenants that would restrict our operations.

If we require additional funds and are not able to secure adequate additional funding, we may be forced to reduce our spending, extend payment terms with our suppliers, liquidate assets, or suspend or curtail planned product launches.

Any of these actions could materially harm our business, results of operations and financial condition.

In December 2024, we entered into an agreement with Roosevelt Resources, LP regarding a business combination transaction.

However, we may still seek to raise additional funds through debt or equity financings.

The sale of additional equity would result in dilution to our stockholders.

The incurrence of debt would result in debt service obligations, and the instruments governing such debt could provide for additional operating and financing covenants that would restrict operations.

If we require additional funds and are unable to secure adequate additional funding at terms acceptable to us, we may be forced to reduce spending, extend payment terms with suppliers, liquidate assets, or initiate dissolution and liquidation or bankruptcy proceedings.

Any of these actions could materially harm the business, results of operations and financial condition.

As noted above, through March 31, 2025, we have incurred substantial losses and may be required to obtain additional cash resources in the near term in order to support our operations and activities.

The availability of required additional funding cannot be assured.

In addition, an adverse outcome in legal or regulatory proceedings in which we are or could become involved could adversely affect our liquidity and financial position.

No assurance can be given as to the timing or ultimate success of obtaining future funds.

If we are not able to obtain additional required funding or if our business combination with Roosevelt Resources, LP is not completed, our cash resources would be significantly limited and could become depleted, and we could be required to materially reduce or suspend operations or seek dissolution and liquidation, or bankruptcy protection.

In the event of dissolution and liquidation proceedings or bankruptcy proceedings, the creditors of Arcadia would have first claim on the value of the assets of Arcadia which, other than remaining cash, would most likely be liquidated in one or more transactions or a bankruptcy sale, and the common stock of Arcadia likely would have little or no value.

Arcadia can give no assurance as to the magnitude of the net proceeds of such a sale and whether such proceeds and available cash would be sufficient to satisfy Arcadia’ obligations to its creditors, let alone to permit any distribution to its equity holders.

The following table summarizes total current assets, current liabilities and working capital for the dates indicated (in thousands):

September 30,

Current assets

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

Nine Months Ended September 30,

Net cash (used in) provided by:

Three Months Ended March 31,

Net cash provided by (used in):

Operating activities

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Cash flows from operating activities

Cash used in operating activities for the nine months ended September 30, 2024, was $7.4 million.

With respect to our net loss of $3.0 million, non-cash charges including $92,000 of depreciation, $502,000 of lease amortization, $395,000 of stock-based compensation, $154,000 of write-downs of inventory, 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 $493,000, amortization of note receivable discount of $90,000, a gain on disposal of property and equipment of $65,000, gain on sale of RS durum wheat trait of $4.0 million, adjustments in our working capital accounts of $297,000, and operating lease payments of $678,000.

Cash used in operating activities for the nine months ended September 30, 2023, was $11.1 million.

With respect to our net loss of $11.1 million, non-cash charges, including $430,000 of issuance and offering costs, $6.1 million of valuation loss recognized for the March 2023 PIPE, $573,000 of stock-based compensation, $535,000 of lease amortization, $227,000 of depreciation and $444,000 of write-downs of inventory, were offset by the change in fair value of common stock warrant and option liabilities of $6.0 million, adjustments in our working capital accounts of $1.7 million, a gain on disposal of property and equipment of $36,000, and operating lease payments of $573,000.

Cash used in operating activities for the three months ended March 31, 2025, was $1.6 million.

With respect to our net income of $2.6 million, non-cash charges including the change in fair value of common stock warrant and option liabilities of $1.9 million, change in fair value of contingent consideration of $1.0 million, amortization of note receivable discount of $69,000, a gain on sale of intangible assets of $750,000, adjustments in our working capital accounts of $582,000, and operating lease payments of $119,000 were offset by $13,000 of depreciation, $104,000 of lease amortization and $78,000 of stock-based compensation.

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 flows from investing activities

Cash provided by investing activities for the nine months ended September 30, 2024 consisted of proceeds of $342,000 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 used in investing activities for the nine months ended September 30, 2023 consisted of proceeds of $42,000 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 provided by investing activities for the three months ended March 31, 2025 consisted of proceeds from the sale of intangible assets of $500,000.

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 flows from financing activities

Cash provided by financing activities for the nine months ended September 30, 2024 consisted of proceeds from the purchase of ESPP shares of $9,000.

Cash provided by financing activities for the nine months ended September 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 $12,000, which were offset by payments of transaction costs related to the March 2023 PIPE financing transaction of $497,000.

Cash provided by financing activities for the three months ended March 31, 2025 consisted of proceeds from the purchase of ESPP shares of $5,000.

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.

Off-Balance Sheet Arrangements

Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities, or variable interest entities other than Verdeca, which was disposed of in November 2020.

Critical Accounting Policies and Estimates

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP.

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Actual results may differ from these estimates under different assumptions or conditions.

We consider our critical accounting policies and estimates to be revenue recognition, determination of the provision for income taxes, and net realizable value of inventory.

We consider our critical accounting estimates to be revenue recognition, determination of the provision for income taxes, and net realizable value of inventory.

QUANTITATIVE AND QUALITATI VE DISCLOSURES ABOUT MARKET RISK

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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