What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-26 compared with 2025-03-25 · 400 added, 457 removed, 825 unchanged (51% 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 Zola in May 2021, Arcadia has provided consumers with a way to rehydrate, reset, and reenergize with Zola coconut water products.

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

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

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

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

Body care operations ceased during the third quarter of 2023.

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 sale of food products, 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.

Refer to Note 11 to the consolidated financial statements for further details of the transaction.

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

The disposition of GoodWheat met the "held for sale" criteria per ASC 205-20-45-1B and represented a strategic shift that had a major effect on the Company's operations and financial results.

As a result, the financial statements and related notes as of December 31, 2024 and 2023 reflect the GoodWheat disposition as a discontinued operation.

The disposition of

GoodWheat resulted in a loss of $1,500 during the year ended December 31, 2024.

Refer to Notes 4 and 8 to the consolidated financial statements for further details of the transaction.

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”) providing for the combination of the two companies in an all-stock transaction.

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 Arcadia agreed to issue shares of its common stock to the limited partners and to the sole member of the general partner of Roosevelt (together, the “Limited Partners”) in exchange for all of the limited partnership and other equity interests of Roosevelt (the “Exchange”).

The Exchange Agreement, as amended, provided that upon completion of the Exchange, the Limited Partners and the Arcadia stockholders prior to the closing were to own 90% and 10%, respectively, of the shares of common stock of Arcadia immediately after the closing.

On February 14, 2025, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission 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 to

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 amending the “Termination Date” provided for in one of the closing conditions described in the Exchange Agreement, which allowed a party to terminate the Exchange Agreement if the closing had not occurred by May 15, 2025, to be August 15, 2025 (the “Termination Provision”).

On July 31, 2025, the Company filed with the SEC pre-effective Amendment No.

1 to the registration statement on Form S-4.

On December 24, 2025, the Company received a notice from Roosevelt indicating that it was terminating the Exchange Agreement with immediate effect pursuant to the Termination Provision, as the closing of the Exchange had not occurred by the Termination Date specified in the Amendment.

The Company does not believe that any break-up fee or similar payment is payable by either party in connection with termination of the Exchange Agreement.

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.

On May 26, 2025, Arcadia entered into a License Termination and Patent Non-Assert Agreement (the "Bioseed Agreement") with Bioseed Research India, a division of DCM Shriram Limited ("Bioseed").

Pursuant to the Bioseed Agreement, the parties agreed to terminate a license agreement previously entered into by Arcadia and Bioseed in 2012, Arcadia agreed to not assert its rights under a patent held by Arcadia regarding certain products commercialized or that may be commercialized by Bioseed, and Bioseed agreed that if as a result of any such commercialization by Bioseed any amounts become payable to a third party pursuant to an agreement previously entered into between Arcadia and the third party, Bioseed will pay such amounts to the third party.

Commencing in April 2025, the U.S.

government announced and imposed a series of reciprocal tariffs on most U.S.

trading partners in reliance on the International Economic Emergency Power Act, or IEEPA.

Effective August 7, 2025, the U.S.

government implemented a 19% reciprocal tariff rate on goods originating from Thailand, where our coconut water is sourced and processed.

In October 2025, the United States and Thailand reached a preliminary framework agreement on reciprocal trade, which maintains a 19% rate while identifying certain product categories that may be eligible for a zero percent reciprocal tariff rate;

however the scope and implementation timeline of those exemptions remain subject to further negotiation.

On February 20, 2026, the U.S.

Supreme Court ruled that the use of the IEEPA to impose tariffs was not authorized by Congress, invalidating a significant portion of tariffs announced in April 2025.

While the ruling struck down the IEEPA-based tariffs, it does not prevent the administration from imposing tariffs using other legal or statutory authorities.

Following the decision, the administration signed a new executive order to impose new duties and announced a 10% global tariff on imports entering the United States (subject to certain exceptions) under Section 122 of the Trade Act of 1974, which provides for tariffs up to 15% for a period of up to 150 days unless extended by Congress.

The administration has indicated its intention to pursue alternative statutory mechanisms to reinstate or impose new tariffs.

As a result, there remains substantial uncertainty regarding future tariff rates and the countries and products to which such tariffs would apply.

We continue to evaluate the potential impact of these tariffs on our cost of goods sold, including opportunities for product classification optimization under applicable Harmonized Tariff Schedule codes.

The full impact of tariffs on the Company remains uncertain as tariff policy continues to evolve and in light of legal challenges to the tariff framework.

We are actively working with our customs brokers, logistics partners, and business partners to identify and implement mitigation strategies.

Zola Coconut Water

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

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

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

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.

Zola Coconut Water joined the Arcadia family of brands in May 2021.

Sourced from Thailand, where coconuts are grown, harvested, and packaged at origin, Zola delivers a pure, natural coconut water with a crisp, clean taste that is slightly sweet and refreshingly hydrating.

Naturally rich in electrolytes, Non-GMO Project Verified, and only 60 calories per serving, Zola is the superior way to rehydrate, reset, and reenergize.

Available in original, original with pulp, espresso, and pineapple flavors, Zola is sold through grocery retailers and foodservice distributors across the U.S.

Agronomic Wheat Traits

On average, Americans get approximately 20% of their daily calories from wheat.

As a result, Arcadia developed a portfolio of non-GMO specialty wheat traits to offer healthier, nutrient-rich wheat options while providing the same baking quality, taste, and texture as traditional wheat.

Arcadia’s non-GMO Reduced Gluten High Fiber Wheat has fewer allergenic glutens and higher fiber than traditional wheat while Arcadia’s non-GMO Extended Shelf-Life Wheat extends the shelf life of milled whole wheat flour.

Arcadia believes that its proprietary intellectual property with multiple non-GMO wheat traits offer functional benefits and a compelling point of differentiation.

We intend to seek to monetize our proprietary technology, including through possible asset sale transactions.

Recent Developments

As described elsewhere in this Report, on December 4, 2024, Arcadia, Roosevelt, and the LP Representatives entered into the Exchange Agreement.

Subject to the terms of the Exchange Agreement and to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, at the Closing of the transactions contemplated by the Exchange Agreement, Arcadia agreed to issue shares of its common stock to the Limited Partners of Roosevelt in exchange for all of the Partner Interests in Roosevelt.

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, we estimate that the Limited Partners and the Arcadia stockholders as of immediately prior to the Closing will collectively own approximately 90% and 10%, respectively, of the shares of common stock of Arcadia outstanding immediately after the Closing.

These percentages are estimates, are subject to certain assumptions and are subject to potential adjustment prior to the Closing, including as a result of changes in the number of outstanding shares of Arcadia common stock.

As a result, Arcadia stockholders and the former Roosevelt Limited Partners could own a greater, or a lesser, percentage of the outstanding shares of Arcadia immediately after the Closing than the estimates set forth above.

As a result of the various agreements and transactions described above, Arcadia no longer retains any effective commercialization rights to its portfolio of wheat patents.

Therefore, 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, Arcadia exited the GoodWheat and body care brands.

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

As described 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 operation in the consolidated balance sheets and the results of the discontinued operation as a separate component on the consolidated statements of operations and comprehensive loss for all periods presented.

See Note 4 to the consolidated financial statements for further information on discontinued operations.

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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.

GLA oil sales ceased as of the end of 2024.

We recognize revenue from product sales when control of the product is transferred to third-party distributors and retailers, 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.

Royalty Revenues

Royalty revenues consist of amounts earned from the sale of commercial products that incorporate the Company's traits by third parties.

Royalty revenues consist of a minimum annual royalty, offset by amounts earned from the sale of products.

The Company recognizes the minimum annual royalty on a straight-line basis over the year, and recognizes royalty revenue resulting from the sale of products when the third parties transfer control of the product to their customers, which generally occurs upon shipment.

Royalty revenues can fluctuate depending on the timing of shipments of product by the third parties to their customers.

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.

Licensed revenues ceased as of the end of 2024.

Royalty Revenues

Royalty revenues consist of amounts earned from the sale of commercial products that incorporate the Company's traits by third parties.

Royalty revenues ceased as of the end of 2024.

Operating Expenses

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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.

Gain on sale of property and equipment

Gain on sale of fixed assets includes gains from the sale of tangible assets sold above their net book value.

Gain on sale of intangible assets consists of the gain on sale of our reduced gluten and oxidative stability patent portfolios in 2025 and our RS durum wheat trait to Corteva in 2024.

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.

Impairment of right-of-use (“ROU”) asset

Impairment of ROU assets includes losses from right-of-use assets due to impairment or recoverability test charges to write down the ROU asset to their fair value or recoverability value.

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, assign or transfer 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

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

Other income, net

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

Valuation loss on March 2023 PIPE

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

Credit loss consists primarily of a reserve established related to the Above Food note receivable.

Other income consists primarily of a gain recognized related to the receipt of Above Food Ingredients, Inc.

("AFII") common stock as well as unrealized gain recognized subsequent to the receipt of the AFII common stock.

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 4 to the consolidated financial statements for further information on discontinued operations.

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Gain on sale of intangible assets

Gain on sale of property and equipment

Impairment of property and equipment

Impairment of ROU asset

Change in fair value of contingent consideration

Selling, general and administrative

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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

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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 99% and 100% of our total revenues in 2024 and 2023, respectively.

The $575,000, or 13%, increase in product revenues in 2024 compared to 2023 was driven by an increase in coconut water revenue of $1.3 million, resulting from higher sales volume, partially offset by a decline in sales of GLA oil.

The Company did not implement any price increases in 2024.

License revenues were $7,000 and $17,000 in 2024 and 2023, respectively.

The decrease in license revenues resulted from fewer annual license fees.

Product revenues decreased $154,000, or 3%, in 2025 compared to 2024, driven by the loss of GLA oil sales in 2025 compared to sales of $756,000 in 2024.

Zola revenues increased $701,000, or 17%, compared to 2024 primarily driven by an increase in distribution resulting in higher sales volume.

The Company did not implement any price increases in 2024 or 2025.

License revenues were $7,000 in 2024.

There were no license revenues in 2025.

Royalty revenues were $26,000 in 2024 related to HB4 soybeans.

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Cost of revenues

Cost of revenues increased by $789,000, or 36%, in 2024 compared to 2023.

This was driven by an increase in Zola units sales as product costs made up 84% of the total cost of revenues in 2024.

Refer to Note 19 to the consolidated financial statements for details of cost of revenues.

Research and development

Cost of revenues increased by $135,000, or 5%, in 2025 compared to 2024 driven by a 17% increase in Zola sales, which increased product costs and freight expenses.

Cost of revenues for 2024 also included a write-down of $154,000 related to hemp and GoodWheat seed.

Research and development expenses

Research and development expenses decreased by $44,000, or 83%, in 2025 compared to 2024, reflecting our strategy to develop the Zola brand by leveraging our existing resources and minimizing new investment.

Gain on sale of intangible assets

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

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

There was no such gain recorded during 2023.

Gain on sale of property and equipment

During 2023, the Company sold property and equipment for net proceeds exceeding book value by $29,000.

There was no such gain from sale of property and equipment in 2024.

Impairment of property and equipment

During 2024, the Company recognized impairment of property and equipment held for sale related to Archipelago of $36,000 based on estimated market price.

During 2024, the Company recognized impairment of property and equipment held for sale related to its Archipelago Ventures Hawaii, LLC joint venture of $36,000 based on estimated market prices.

There was no such impairment of property and equipment during 2025.

Impairment of ROU asset

During 2023, the Company recognized $113,000 of impairment related to ROU assets.

There was no impairment of ROU assets recognized during 2024.

Change in fair value of contingent consideration

During 2025, the change in the fair value of contingent consideration was due to the gain of $2.0 million associated with the reduction of our contingent liability as the result of a decision to abandon one of two remaining programs and transfer the other to a third party with respect to which a contingent liability was previously accrued.

See Note 14 to the consolidated financial statements for details.

There was no change in fair value of contingent consideration during 2024.

Selling, General, and Administrative

Selling, general, and administrative expenses increased by $1.4 million, or 17%, in 2024 compared to 2023.

This was driven by $1.4 million of transaction costs related to the sale of GoodWheat assets to Above Food as well as the

pending transaction with Roosevelt Resources, which included consulting and legal expenses.

In addition, there was employee related costs of $600,000 related to the restructuring of the business.

Selling, general, and administrative expenses decreased by $2.6 million, or 27%, in 2025 compared to 2024 driven primarily by operating costs and employee related costs in 2024 that were absent in 2025.

Interest income

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The remaining difference was related to interest from investments.

During 2023, the Company recognized interest income of $695,000.

Discount amortization and interest recognition on the promissory note from Above Food ceased as of the second quarter of 2025 upon recognition of the credit loss.

Refer to Note 8 to the consolidated financial statements for more information.

During 2024, the Company recognized interest income of $782,000, of which $310,000 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 2025, the Company recognized credit loss of $4.7 million primarily related to the establishment of a credit loss for the remaining $4.0 million principal amount of the Above Food note receivable, plus accrued interest of $421,000.

There was no such loss recognized during 2024.

Other income, net

During 2024, the Company recognized other income of $31,000 as compared to $48,000 in 2023.

Valuation loss on March 2023 PIPE

During the year ended December 31, 2023, the Company recognized a $6.1 million valuation loss related to the March 2023 PIPE financing transaction.

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

There was no such valuation loss in 2024.

During 2025, the Company recognized other income of $2.3 million driven by a gain recognized related to the receipt of AFII common stock as well unrealized gain recognized subsequent to the receipt of the AFII common stock.

Refer to Notes 7 and 8 to the consolidated financial statements for further information on the AFII common stock.

During 2024, the Company recognized other income of $31,000.

Change in fair value of common stock warrant and option liabilities

The change in the estimated fair value of common stock warrant and option liabilities resulted in a loss of $1.5 million and a gain of $6.5 million during the year ended December 31, 2024 and 2023, respectively, related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.

Issuance and offering costs allocated to liability options

Issuance and offering costs were $430,000 during the year ended December 31, 2023 and were related to the liability classified options issued in the March 2023 PIPE financing transaction.

There were no such issuance and offering costs in 2024.

The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $2.4 million and a loss of $1.5 million during 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 Private Placement and August 2022 Registered Direct Offering financing transactions.

The primary driver for the change in estimated fair value of common stock warrant and option liabilities was the change in stock price during each year.

Income tax expense

The income tax provision resulted in an expense of $8,000 during each of the years ended December 31, 2024 and 2023.

The income tax provision resulted in an expense of $8,000 during each of 2025 and 2024.

Net loss from discontinued operations

Net loss from discontinued operations for Body Care was $0 and $821,000 during 2024 and 2023, respectively.

Net loss from discontinued operations for GoodWheat was $2.7 million and $7.8 million during 2024 and 2023, respectively.

Net loss from discontinued operations for GoodWheat was $2.7 million during 2024, reflecting the sale of the GoodWheat brand and related assets to Above Food during the second quarter of 2024.

See Note 4 to the consolidated financial statements for further information on discontinued operations.

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Liquidity and Capital Resources

We have funded our operations primarily with the net proceeds from our private and public offerings of our equity securities and debt, as well as proceeds from the sale of our products and payments under license agreements.

We have funded our operations primarily with the net proceeds from our private and public offerings of our equity securities as well as proceeds from the sale of our products and payments under license agreements.

Our principal use of cash is to fund our operations, which are primarily focused on commercializing our products.

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

Refer to Note 16 to the consolidated financial statements for details of our leasing arrangements.

Our contractual obligations are primarily related to our operating leases.

As of December 31, 2025, we had cash and cash equivalents of $0.3 million.

For the years ended December 31, 2024 and 2023, the Company had

net losses of $7.0 million and $14.0 million, respectively, and net cash used in operations of $9.6 million and $15.3 million, respectively.

In addition, in January 2026, we received gross proceeds of approximately $2.1 million, prior to deducting placement agent fees and offering expenses, from the exercise of certain previously outstanding preferred investment options to purchase an aggregate of 808,595 shares of common stock, pursuant to inducement letter agreements that we entered into with certain holders of previously outstanding preferred investment options.

For the years ended December 31, 2025 and 2024, the Company had net losses of $2.3 million and $7.0 million, respectively, and net cash used in operations of $4.7 million and $9.6 million, respectively.

As discussed in Note 8 to the consolidated financial statements, Above Food did not make the first $2.0 million principal payment plus accrued interest on the promissory note given by Above Food to the Company ("Promissory Note") pursuant to the asset purchase agreement between the Company and Above Food relating to the sale of the GoodWheat brand and related assets to Above Food in May 2024, and substantial doubt exists whether Above Food will make any cash payments with respect to the Promissory Note.

Failure to make the first cash principal payment due under the Promissory Note had a material adverse effect on the Company's cash resources and financial position.

In addition, although as described in Note 8, approximately 2.7 million shares of Above Food's parent company AFII ("Parent Shares") have been issued to the Company pursuant to a notice previously delivered by the Company, uncertainty exists regarding whether additional Parent Shares will be issued in satisfaction of Above Food's other obligations under the Promissory Note, when any Parent Shares will be able to be freely resold pursuant to Rule 144 or otherwise, or the amount of net proceeds to Arcadia that might result from a sale of any such Parent Shares.

Going Concern;

Material Cash Requirements

We believe that our existing cash and cash equivalents will not be sufficient to meet our anticipated cash requirements for at least the next 12 months from the issuance date of our 2024 financial statements, and thus raises substantial doubt about the Company’s ability to continue as a going concern.

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, and the audit opinion on our audited consolidated financial statements includes a going concern qualification.

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

We will require additional funding in the near term to fund our business and the marketing and sale of our products and to provide working capital to fund other aspects of our business.

As noted above, Above Food defaulted on its obligations to pay us amounts due under its Promissory Note to the Company, including the first installment of the Promissory Note due May 14, 2025, and substantial doubt exists whether or when Above Food will be able to make any cash payments with respect to the Promissory Note, or whether additional Parent Shares may be issued to us in satisfaction of Above Food's obligations under the Promissory Note.

There are no assurances that required funding will be available at all or will be available in sufficient amounts or on reasonable terms.

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

We may also consider entering into additional partner arrangements.

We may also consider other strategic alternatives.

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 addition, if we are able to sell shares of AFII, the net proceeds from sales of AFII shares may provide a source of funding.

However, the AFII shares are restricted securities, and it is not clear when the requirements of Rule 144 will permit a public sale of such shares.

In addition, removal of restrictive legends applicable to the shares also requires action by the issuer and its transfer agent in order to remove the legends and facilitate the public resale of the shares.

Also, there are no assurances regarding whether or when AFII will file a registration statement covering the resale of the AFII shares as provided for in the Promissory Note or, if filed, when it will become effective.

In addition, the market price of AFII common stock is very volatile.

If from time to time in the future Arcadia seeks to sell the AFII shares that it holds, there are no assurances regarding the amount of net proceeds to Arcadia that might result from such sales.

If we sought to raise funds through debt financing transactions, 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 are not able to secure adequate additional funding, we will be forced to reduce our spending, extend payment terms with our suppliers, liquidate assets, or initiate dissolution and liquidation or bankruptcy proceedings.

Any of these actions would have a material adverse effect on our business, results of operations and financial condition.

As noted above, through December 31, 2025, we have incurred substantial losses.

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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.

If we are not able to obtain additional required equity or debt funding, 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.

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 equity or debt funding, 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):

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Cash used in operating activities for the year ended December 31, 2025 was $4.7 million.

With respect to our net loss of $7.0 million, non-cash charges including the change in fair value of common stock warrant and option liabilities of $1.5 million, $113,000 of depreciation, $652,000 of lease amortization, $512,000 of stock-based compensation, $154,000 of write-downs of inventory, $36,000 of impairment of property and equipment, offset by $157,000 of amortization of note receivable discount, a gain on disposal of property and equipment of $65,000, a gain on sale of our RS durum wheat trait of $4.0 million, adjustments in our working capital accounts of $596,000, and operating lease payments of $850,000.

With respect to our net loss of $2.3 million, non-cash charges including the change in fair value of common stock warrant and option liabilities of $2.4 million, change in fair value of contingent consideration of $2.0 million, amortization of note receivable discount of $69,000, a gain on sale of intangible assets of $750,000, a gain on the receipt of AFII common stock of $1.1 million, an unrealized gain subsequent to receipt of AFII common stock of $1.4 million and operating lease payments of $122,000 were offset by $32,000 of depreciation, $122,000 of lease amortization, $234,000 of stock-based compensation, $4.7 million of credit loss and adjustments in our working capital accounts of $96,000.

Cash used in operating activities for the year ended December 31, 2024 was $9.6 million.

With respect to our net loss of $14.0 million, non-cash charges, including $430,000 of issuance and offering costs, $6.1 million of valuation loss recognized for the March 2023 PIPE, $717,000 of stock-based compensation, $697,000 of lease amortization, $287,000 of depreciation, $444,000 of write-downs of inventory and $113,000 of impairment of ROU assets, were offset by the change in fair value of common stock warrant and option liabilities of $6.5 million, adjustments in our working capital accounts of $2.7 million, a gain on disposal of property and equipment of $40,000, and operating lease payments of $764,000.

Cash flows from investing activities

Cash used in investing activities for the year ended December 31, 2025 consisted of proceeds from the sale of intangible assets of $750,000.

Cash used in investing activities for the year ended December 31, 2024 consisted of proceeds of $334,000 from the sale of property and equipment, proceeds from the sale of investments of $5.0 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 year ended December 31, 2023 consisted of proceeds of $115,000 from the sale of property and equipment, proceeds of $569,000 from the sale of Verdeca, and proceeds of $2.5 million from the sale of investments, offset by $5,000 of purchases of property and equipment and $7.5 million of purchases of investments.

Cash flows from financing activities

Cash provided by financing activities for the year ended December 31, 2025 consisted of proceeds from the purchase of employee stock purchase plan ("ESPP") shares of $6,000.

Cash provided by financing activities for the year ended December 31, 2024 consisted of proceeds from the purchase of ESPP shares of $9,000.

Cash provided by financing activities for the year ended December 31, 2023 consisted of gross proceeds of $6.0 million from the March 2023 PIPE financing transaction and proceeds from the purchase of ESPP shares of $12,000, which were offset by payments of transaction costs related to the March 2023 PIPE financing transaction of $497,000.

Off-Balance Sheet Arrangements

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

We consider our critical accounting 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 allowance for credit losses.

Revenue recognition

We recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services.

See Note 2 for further detail on each of the below revenue streams.

See Note 2 to the consolidated financial statements appearing elsewhere herein for further detail on each of the below revenue streams.

We generally recognize product revenues once passage of title has occurred, which is generally upon delivery.

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We recognize royalty revenue when the Company can reasonably determine the amounts earned.

We recognize revenue related to milestone payments when it is probable that such amounts would not be reversed.

Determination of the provision for income taxes

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A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Net realizable value of inventory

Inventory costs are tracked on a lot-identified basis, valued at the lower of cost or net realizable value and are included as cost of revenues when sold.

We compare the cost of inventories with market value and write down inventories to net realizable value, if lower.

We write down inventory when conditions indicate that the net realizable value may be less than cost due to physical deterioration, obsolescence, changes in price levels or other factors.

Additionally, we provide reserves for excess and slow-moving inventory to its estimated net realizable value.

The inventory write-downs are based upon estimates about future demand from our customers and distributors and market conditions.

Future events that could significantly influence our judgment and related estimates include conditions in target markets, introduction of new products or changes to current or future competitor products.

Allowance for credit losses

We estimate the allowance for credit losses based on historical collection trends, the age of outstanding receivables, and existing economic conditions.

If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance for credit losses is recorded accordingly.

Recent Accounting Pronouncements

For discussions of the adoption and potential impacts of recently issued accounting standards, refer to Note 3 – Recent Accounting Pronouncements.

For discussions of the adoption and potential impacts of recently issued accounting standards, refer to Note 3 – Recent Accounting Pronouncements, to the consolidated financial statements appearing elsewhere herein.

Quantitative and Qualitat ive Disclosures About Market Risk.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Identification and recognition of contingent features within note receivable – Refer to Note 8 to the financial statements

Identification and measurement of credit loss for note receivable – Refer to Note 8 to the financial statements

Critical Audit Matter Description

The Company sold its GoodWheat brand to Above Food Ingredients Corp (“Above Food”).

As consideration for the sale, the Company received a promissory note during the year ended December 31, 2024.

The promissory note contains contingent features, including an option that requires Above Food to cause its parent entity, Above Food Ingredients Inc.

(“Parent Company”), to issue to the Company publicly traded stock of Parent Company in exchange for the cancellation of a portion of the principal of the promissory note, as well as default provisions.

The Company bifurcated the contingent features of the promissory note in accordance with ASC 815, “Derivatives and Hedging”, and separately recognized the contingent features.

We identified the accounting for the contingent features within the promissory note as a critical audit matter due to the significant judgement that were used by management in the initial identification and recognition of such contingent features.

This required a high degree of auditor judgment, subjectivity, and effort, including the need to involve professionals in our firm with expertise in ASC 815 in performing procedures and evaluating audit evidence relating to management's initial identification and recognition of such contingent features.

In 2024, the Company sold its GoodWheat brand and related assets to Above Food Ingredients Corp (“Above Food”) and received a promissory note in connection with the transaction.

In 2025, Above Food defaulted on the promissory note and the Company recognized a credit loss of $4.7 million on the promissory note.

We identified the credit loss on the Above Food promissory note as a critical audit matter due to the significant judgment used by management in the initial recognition and measurement of the credit loss.

This required a high degree of auditor judgment, subjectivity, and effort to evaluate audit evidence relating to management's initial identification and recognition of such credit loss.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures over the promissory note recognition included the following, among others:

• We obtained and reviewed the terms of the promissory note which included reviewing management's identification of the contingent features.

• With the involvement of professionals in our firm with expertise in ASC 815, based on the terms of the promissory note, we evaluated the appropriateness of management's application of ASC 815, in the determination of the accounting and recognition of the promissory note’s contingent features.

Our audit procedures over the identification and recognition of the contingent features within the promissory note included the following, among others:

• We obtained and evaluated management’s assessment of the credit loss.

• We made inquiries of management and the Company’s outside legal counsel regarding the status of the credit loss.

• We inspected bankruptcy documentation associated with Above Food.

• We evaluated the accuracy and completeness of the financial statement presentation and disclosure of the credit loss related to the Above Food promissory note.

/s/ Deloitte & Touche LLP

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Short-term investments

Accounts receivable and other receivables, net of allowance for doubtful accounts

of $ 0 as of December 31, 2024 and 2023

Inventories, net — current

Assets held for sale

Note receivable — current

Accounts receivable and other receivables, net of allowance for credit loss

of $ 559 and $ 0 as of December 31, 2025 and 2024, respectively

Note receivable — current, net of allowance for credit losses (Note 8)

Prepaid expenses and other current assets

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Right of use assets

Inventories, net — noncurrent

Intangible assets, net

Note receivable — noncurrent

Note receivable — noncurrent, net of allowance for credit losses (Note 8)

Other noncurrent assets

Noncurrent assets of discontinued operations — GoodWheat

Liabilities and stockholders’ equity

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Other current liabilities

Current liabilities of discontinued operations — GoodWheat

Total current liabilities

Operating lease liability — noncurrent

Common stock warrant and option liabilities

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Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

Total Arcadia Biosciences stockholders’ equity

Non-controlling interest

Total stockholders' equity

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Gain on sale of intangible assets

Gain on sale of property and equipment

Impairment of property and equipment

Impairment of ROU asset

Change in fair value of contingent consideration

Selling, general and administrative

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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

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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

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(In thousands, except share data)

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income (Loss)

Non-controlling

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Balance at December 31, 2023

Issuance of shares related to March 2023 PIPE

Modification of warrants related to March 2023 PIPE

Issuance of shares related to August 2022 pre-funded warrants exercise

Issuance of shares related to March 2023 pre-funded warrants exercise

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purchase plan

Issuance of shares related to reverse stock split

Stock-based compensation

Unrealized gains on available-for-sale securities

Change in unrealized gains on available-for-sale securities

Write-down of non-controlling interest

Balance at December 31, 2024

Issuance of shares related to March 2023 pre-funded warrants exercise

Issuance of shares related to employee stock

purchase plan

Issuance of shares related to employee stock

options exercise

Stock-based compensation

Change in unrealized gains on available-for-sale securities

Write-down of non-controlling interest

Balance at December 31, 2025

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Change in fair value of common stock warrant and option liabilities

Issuance and offering costs allocated to liability classified options

Valuation loss on March 2023 PIPE

Change in fair value of contingent consideration

Lease amortization

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Gain on disposal of property and equipment

Gain on sale of RS durum wheat trait

Gain on sale of intangible assets

Gain on receipt of Above Food Ingredients, Inc.

Unrealized gain subsequent to receipt of Above Food Ingredients, Inc.

Stock-based compensation

Bad debt expense

Write-down of inventories

Impairment of property and equipment

Impairment of ROU asset

Write-down of non-controlling interest

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Amounts due to related parties

Other current liabilities

Operating lease payments

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Proceeds from sale of property and equipment

Proceeds from sale of Verdeca — earn-out received

Proceeds from sale of investments

Proceeds from sale of RS durum wheat trait

Proceeds from sale of intangible assets

Cash paid related to sale of GoodWheat

Purchases of property and equipment

Purchases of investments

Net cash provided by (used in) investing activities

Net cash provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of common stock, pre-funded warrants and

preferred investment options from March 2023 PIPE

Payments of offering costs relating to March 2023 PIPE

Proceeds from ESPP purchases

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NONCASH TRANSACTIONS:

Common stock options issued to placement agent and included in offering costs related to March 2023 PIPE

Warrant and option modifications included in Valuation loss on March 2023 PIPE

Proceeds from sale of property and equipment in accounts receivable and other receivables

Right of use assets obtained in exchange for new operating lease liabilities

Note receivable recognized from sale of GoodWheat

Fair value of Above Food Ingredients, Inc.

common stock received

The accompanying notes are an integral part of these consolidated financial statements.

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Description of Business

Arcadia Biosciences, Inc.

(the "Company," "Arcadia" or "management"), was incorporated in Arizona in 2002 and maintains its headquarters in Dallas, Texas, with additional office space in Sacramento, California.

Ar cadia Biosciences, Inc.

(the "Company," "Arcadia" or "management"), was incorporated in Arizona in 2002 and maintains its headquarters in Dallas, Texas.

The Company was reincorporated in Delaware in March 2015 .

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

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

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

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 sale of food products, trait licensing and royalty agreements.

On May 26, 2025, Arcadia entered into a License Termination and Patent Non-Assert Agreement (the "Bioseed Agreement") with Bioseed Research India, a division of DCM Shriram Limited ("Bioseed").

As a result, the related $ 1.0 million contingent liability was eliminated from the consolidated balance sheet as of the end of the second quarter of 2025.

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

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

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 consolidated statement of operations and comprehensive loss related to this transaction as the patents, pending applications and future product royalties have no carrying value.

As of December 31, 2025, the Company has received full payment for the $ 750,000 .

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

The Exchange Agreement, as amended, provided that upon completion of the Exchange, the Limited Partners and the Arcadia stockholders prior to the closing were to own 90 % and 10 %, respectively, of the shares of common stock of Arcadia immediately after the closing.

On February 14, 2025, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission 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 to 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 amending the “Termination Date” provided for in one of the closing conditions described in the Exchange Agreement, which allowed a party to terminate the Exchange Agreement if the closing had not occurred by May 15, 2025 , to be August 15, 2025 (the “Termination Provision”).

On July 31, 2025, the Company filed with the SEC pre-effective

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

Amendment No.

1 to the registration statement on Form S-4.

The Company does not believe that any break-up fee or similar payment is payable by either party in connection with termination of the Exchange Agreement.

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

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

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

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As a result, the financial statements and related notes as of December 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 year ended December 31, 2024.

Refer to Notes 4 and 8 to the consolidated financial statements for further details of the transaction.

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

Refer to Notes 4 and 8 for further details of the transaction.

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

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

Refer to Note 11 to the consolidated financial statements for further details of the transaction.

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

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”).

Body care operations ceased during the third quarter of 2023.

Refer to Note 11 for further details of the transaction.

In August 2019, the Company entered into a joint venture agreement with Legacy Ventures Hawaii, LLC (“Legacy,” see Note 9) to grow, extract, and sell hemp products.

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In October 2021, Arcadia and Legacy mutually agreed to wind down the cultivation activities of Archipelago, due to regulatory challenges and a saturated hemp market.

In February 2012, the Company formed Verdeca, which was equally owned with Bioceres.

Verdeca was formed to develop and deregulate soybean varieties using both partners’ agricultural technologies.

In November 2020, Arcadia sold its membership interest in Verdeca to Bioceres in a transaction in which Arcadia received cash, shares of Bioceres stock and a royalty stream of up to $ 10.0 million on sales of Haab 4 soybeans (“HB4”).

An additional $ 2.0 million in cash is to be paid to Arcadia upon Verdeca of achieving commercial plantings of at least 200,000 hectares of HB4 or China approving the HB4 soybean trait for “food and feed”.

During 2022, Bioceres received China's approval of the HB4 soybean trait and as a result, Arcadia recorded license revenue of $ 862,000 and a gain on sale of Verdeca of $ 1.1 million on the consolidated statements of operations and comprehensive loss.

The Company received the full payment of $ 2.0 million as of December 31, 2023.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

Reverse Stock Split

In February 2023, the Company’s board of directors approved a reverse split of 40:1 on the Company’s issued and outstanding common stock.

On F ebruary 15, 2023, the Company’s stockholders approved the certificate of amendment to the Company’s certificate of incorporation, which the Company filed on February 27, 2023 with the Secretary of State of Delaware to effect the reverse split on March 1, 2023.

As a result of the reverse stock split, 19,118 additional shares of common stock were issued in lieu of fractional shares.

All issued and outstanding common stock, options to purchase common stock and per share amounts contained in the consolidated financial statements have been retroactively adjusted to reflect the reverse stock split for all periods presented.

Liquidity, Capital Resources, and Going Concern

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For the years ended December 31, 2025 and 2024, the Company had net losses of $ 2.3 million and $ 7.0 million, respectively, and net cash used in operations of $ 4.7 million and $ 9.6 million, respectively.

The Company believes that its existing cash and cash equivalents will not be sufficient to meet its anticipated cash requirements for at least the next 12 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.

With cash and cash equivalents of $ 0.3 million as of December 31, 2025, the Company believes that its existing cash and cash equivalents will not be sufficient to meet its anticipated cash requirements for at least the next 12 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.

The Company may seek to raise additional funds through debt or equity financings.

The Company may also consider entering into additional partner arrangements.

The Company may seek to raise additional funds through debt or equity financings or sales of assets.

The sale of additional equity would result in dilution to the Company’s 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 the Company requires additional funds and is unable to secure adequate additional funding at terms agreeable to the Company, the Company may be forced to reduce spending, extend payment terms with suppliers, liquidate assets, or suspend or curtail planned product launches.

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

In addition, the Company may seek to raise additional funds through the sale of shares of Above Food Ingredients, Inc.

("AFII") that are held by the Company, at such times as those shares may be sold.

If the Company requires additional funds and is unable to secure adequate additional funding on terms acceptable to the Company, the Company may be forced to reduce spending, extend payment terms with suppliers, or liquidate assets.

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

Arcadia Biosciences, Inc.

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The non-controlling partner’s interest is generally computed as the joint venture partner’s ownership percentage of Archipelago.

Net loss attributable to non-controlling interest of $ 0 and $ 5,000 is recorded as an adjustment to net loss to arrive at net loss attributable to common stockholders for the years ended December 31, 2024 and 2023, respectively.

The non-controlling partner’s equity interest is presented as non-controlling interest on the consolidated balance sheets as of December 31, 2024 and 2023.

Non-controlling interest on the consolidated balance sheet was fully written-off as of December 31, 2024.

Reclassifications

Certain previously reported financial information has been reclassified to conform to the current year presentation.

See Note 4 to the consolidated financial statements for a discussion of the reclassification of the financial presentation of our former GoodWheat and body care brands reported as discontinued operations.

Unless otherwise noted, amounts and disclosures throughout these notes to consolidated financial statements relate solely to continuing operations and exclude all discontinued operations.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions in the Company’s consolidated financial statements and notes thereto.

Significant estimates and assumptions made by management included the determination of revenue recognition, the provision for income taxes, net realizable value of inventory, and fair value of the preferred investment option and contingent liabilities.

Significant estimates and assumptions made by management included the determination of revenue recognition, the provision for income taxes and allowance for credit losses.

Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances.

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Investments in debt and equity securities are carried at fair value and classified as short-term investments.

Unrealized gains and losses are included in accumulated other comprehensive income, which is reflected as a separate component of stockholder’s equity in the consolidated balance sheets.

Gains and losses are recognized when realized in the consolidated statements of operations and comprehensive loss.

Unrealized gains and losses on debt securities are included in accumulated other comprehensive income (loss), which is reflected as a separate component of stockholder’s equity in the consolidated balance sheets.

Unrealized gains and losses on equity securities are recognized in other income, net on the consolidated statements of operations and comprehensive loss.

Gains and losses for both debt and equity securities are recognized when realized in the consolidated statements of operations and comprehensive loss.

Investment securities are reported as cash and cash equivalent, short-term investments or long-term investments in the consolidated balance sheets based on the nature of the investments and maturity period.

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The carrying value of the Company’s receivables represents estimated net realizable values.

The Company generally does not require collateral and estimates any required allowance for doubtful accounts based on historical collection trends, the age of outstanding receivables, and existing economic conditions.

The Company generally does not require collateral and estimates the allowance for credit losses based on historical collection trends, the age of outstanding receivables, and existing economic conditions.

Past-due receivable balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amounts due.

The Company had $ 0 amounts reserved for doubtful accounts at December 31, 2024 and 2023, and the allowance activity during each of the years ended December 31, 2024 and 2023, was immaterial.

The Company had an allowance for credit losses of $ 559 and $ 0 at December 31, 2025 and 2024, respectively.

Inventory costs are tracked on a lot-identified basis and are included as cost of revenues when sold.

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Additional adjustments to inventory are made for excess and slow-moving inventory on hand that is not expected to be sold within a reasonable timeframe to reduce the carrying amount to its estimated net realizable value .

Inventories mainly consist of coconut water imported from Thailand and freight costs.

The inventories—current line item on the balance sheet represents inventory forecasted to be sold or used in production in the next 12 months, as of the balance sheet date, and consist primarily of Zola Coconut water.

Inventories consist of coconut water imported from Thailand and freight costs.

The inventories on the balance sheet represents inventory forecasted to be sold or used in production in the next 12 months, as of the balance sheet date, and consist of Zola Coconut water.

Raw materials inventories consists of in-transit Zola Coconut Water.

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Note receivable

In connection with the sale of GoodWheat to Above Food, the Company received a $ 6.0 million promissory note dated May 14, 2024.

In connection with the sale of GoodWheat assets to Above Food, the Company received a $ 6.0 million promissory note dated May 14, 2024.

The promissory note has a term of three years and accrues interest at the Wall Street Journal prime rate .

On each of the first, second and third anniversaries of the promissory note, accrued interest and $ 2.0 million of principal are payable to Arcadia.

The first installment payment due in 2025 is classified as current and the remaining installment payments due in 2026 and 2027 are classified as noncurrent on the consolidated balance sheet.

The promissory note was assessed using the current expected credit loss (“CECL”) model under ASC 326-20.

Based on the information available, the Company determined that no allowance for credit loss was needed regarding the promissory note as of December 31, 2024.

The promissory note was assessed using the current expected credit loss (“CECL”) model.

As a result of the assessment, the Company recorded a reserve for the outstanding principal amount of $ 4.0 million, plus accrued interest, as of December 31, 2025.

Refer to Note 8 for more information on the note receivable.

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Total stock-based compensation

The Company uses the asset and liability method of accounting for income taxes.

Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

are expected to reverse.

The Company uses the asset and liability method of accounting for income taxes.

A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

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Product revenues

Product revenues consist primarily of Zola and GLA products.

The Company's revenues fluctuate depending on the timing of shipments of product to our customers and are reported net of estimated chargebacks, returns and losses.

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

GLA oil sales ceased as of the end of 2024.

We recognize revenue from product sales when control of the product is transferred to third-party distributors and retailers, 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 to date consist of up-front, nonrefundable license fees, annual license fees, and subsequent milestone payments that the Company receives under the Company’s research and license agreements.

License revenues consist of up-front, nonrefundable license fees, annual license fees, and subsequent milestone payments that the Company receives under the Company’s research and license agreements.

The Company recognizes revenue generated from up-front, nonrefundable license fees upon execution of the agreement and recognizes annual license fees when it is probable that a material reversal will not occur.

Milestone fees are variable consideration that is initially constrained and recognized only when it is probable that such amounts would not be reversed.

The Company assesses when achievement of milestones is probable to determine the timing of revenue recognition for milestone fees.

Milestones typically consist of significant stages of development for the Company’s traits in a potential commercial product, such as achievement of specific technological targets, completion of field trials, filing with regulatory agencies, completion of the regulatory process, and commercial launch of a product containing the Company’s traits.

Given the seasonality of agriculture and time required to progress from one milestone to the next, achievement of milestones is inherently uneven, and the Company’s license revenues are likely to fluctuate significantly from period to period.

Licensed revenues ceased as of the end of 2024.

Royalty revenues

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Royalty revenues consist of a minimum annual royalty, offset by amounts earned from the sale of products.

The Company recognizes the minimum annual royalty on a straight-line basis over the year, and the Company recognizes royalty revenue resulting from the sale of products when the third parties transfer control of the

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

product to their customers, which generally occurs upon shipment.

Royalty revenues can fluctuate depending on the timing of shipments of product by the third parties to their customers.

Royalty revenues ceased as of the end of 2024.

Unearned revenue

The Company defers revenue to the extent that cash received in conjunction with a license agreement is not yet earned in accordance with the Company policies.

The opening and closing accounts and other receivables balances for the year ended December 31, 2024 were $ 506,000 and $ 1.2 million, respectively.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

The opening and closing accounts and other receivables balances for the year ended December 31, 2025 were $ 1.2 million and $ 425,000 , respectively.

The opening and closing accounts and other receivables balances for the year ended December 31, 2024 were $ 506,000 and $ 1.2 million, respectively.

Cost of revenues

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

Research and development expenses

Research and development expenses consist of costs incurred in the development and testing of the Company's 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.

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

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Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU No.

2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures.

The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The new guidance is effective retrospectively for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company adopted ASU No.

2023-07 on January 1, 2024 with an immaterial impact on the Company’s disclosures.

In December 2023, the FASB issued ASU No.

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The new guidance is effective either prospectively or retrospectively, for fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of this update on our income tax disclosures.

The Company adopted the new guidance retrospectively for its fiscal year 2025 annual reporting period.

Refer to Note 16 for further details.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40).

The amendments in this update, among other things, requires quantitative disclosures for employee compensation, selling expenses and purchases of inventory.

The amendments in this update, among other things, require quantitative disclosures for employee compensation, selling expenses and purchases of inventory.

The new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of this update on our financial statements and disclosures.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

The Company is currently evaluating the impact of this update on its financial statements and disclosures.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit Losses for Accounts Receivable and Contract Assets.

The amendments in this update provide all entities with a practical expedient and entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.

The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the impact of this update on its financial statements and disclosures.

Discontinued Operations

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

On May 16, 2024, the Company sold the GoodWheat brand and related assets to Above Food.

GoodWheat operations ceased during the second quarter of 2024.

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

Body care operations ceased 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 consolidated balance sheets and the results of the discontinued operations as separate components on the consolidated statements of operations and comprehensive loss for all periods presented.

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

Major classes of line items constituting the balance sheet of discontinued operations:

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Accounts receivable and other receivables

Inventories, net — current

Property and equipment, net

Inventories, net — noncurrent

Accounts payable and accrued expenses

Total liabilities

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

Major classes of line items constituting net loss from discontinued operations:

Year Ended December 31,

(In thousands)

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Net loss from discontinued operations

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

The following table presents significant cash and non-cash items of discontinued operations:

Year Ended December 31,

(In thousands)

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The Company recorded a write-down of $ 154,000 related to hemp and GoodWheat seed during the year ended December 31, 2024.

The Company recorded inventory write-downs of $ 444,000 related to packaging materials, hemp seed and GoodWheat during the year ended December 31, 2023.

There was no such write-down of inventory during the year ended December 31, 2025.

If there are significant changes in demand and market conditions, substantial future write-downs of inventory may be required, which would materially increase the Company’s expenses in the period the write down is taken and materially affect the Company’s operating results.

Inventories, net consist of the following (in thousands):

Inventories consist of the following (in thousands):

Raw materials

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Software and computer equipment

Machinery and equipment

Furniture and fixtures

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Property and equipment, gross

Less accumulated depreciation and amortization

accumulated depreciation and amortization

Property and equipment, net

Depreciation expense was $ 32,000 and $ 58,000 for the years ended December 31, 2025 and 2024, respectively.

Property and equipment are considered assets held for sale when management approves and commits to a plan to dispose of a property or group of properties.

The property and equipment held for sale prior to the sale date is separately presented, within current assets, on the consolidated balance sheet as assets held for sale.

During the year ended December 31, 2023, management initiated the sale of property and equipment related to Archipelago.

The Company completed the sale of such property and equipment with a net gain on sale of property and equipment in the amount of $ 29,000 recorded on the consolidated statements of operations and comprehensive loss during the year ended December 31, 2023.

The proceeds related to the sale of property and equipment during the year ended December 31, 2023 were $ 65,000 .

Property and equipment related to Archipelago of $ 51,000 were classified as assets held for sale as of December 31, 2023.

During the first quarter of 2024, the Company recorded an impairment of $ 36,000 related to these assets.

During the first quarter of 2024, the Company recorded an impairment of $ 36,000 related to Archipelago property and equipment held for sale.

During the second quarter of 2024, all Archipelago property and equipment previously held for sale were sold.

Investments and Fair Value Instruments

The investments are carried at fair value, based on quoted market prices or other readily available market information.

Unrealized gains and losses are included in accumulated other comprehensive income, which is reflected as a separate component of stockholder’s equity in the consolidated balance sheets.

Gains and losses are recognized when realized in the consolidated statements of operations and comprehensive loss.

The following tables summarize the amortized cost and fair value of the investment securities portfolio at December 31, 2024 and 2023:

(Dollars in thousands)

December 31, 2024

Cash equivalents:

Money market funds

Total Assets at Fair Value

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

The Company classified its investments in corporate securities of AFII as short-term investments.

The investments were carried at fair value, based on quoted market prices.

Unrealized and realized gains and losses are recognized as other income in the consolidated statements of operations and comprehensive loss.

As of December 31, 2025, the fair value of the AFII common stock was $ 4.3 million.

The following table summarize the amortized cost and fair value of the investment securities portfolio at December 31, 2024:

(Dollars in thousands)

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Money market funds

Short-term investments:

Treasury bills

Total Assets at Fair Value

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Fair Value Measurement

The fair value of the investment securities at December 31, 2024 were as follows:

The fair value of the investment securities at December 31, 2025 and 2024 were as follows:

Fair Value Measurements at December 31, 2025

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Assets at Fair Value

Cash equivalents:

Money market funds

Short-term investments:

Corporate securities

Total Assets at Fair Value

The fair value of the investment securities at December 31, 2023 were as follows:

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

Fair Value Measurements at December 31, 2024

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Money market funds

Short-term investments:

Treasury bills

Total Assets at Fair Value

The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during 2025 or 2024.

The Company’s financial instruments consist primarily of cash and cash equivalents, short-term investments, accounts receivable and other receivables, note receivable, accounts payable and accrued liabilities.

For short-term investments, accounts receivable and other receivables, accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of December 31, 2024 and December 31, 2023 were considered representative of their fair values due to their short term to maturity or repayment.

The Company’s financial instruments consist primarily of cash and cash equivalents, short-term investments, accounts receivable and other receivables, accounts payable and accrued liabilities.

For short-term investments, accounts receivable and other receivables, accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of December 31, 2025 and 2024 were considered representative of their fair values due to their short term to maturity or repayment.

Cash equivalents are carried at cost, which approximates their fair value.

The note receivable is recorded at amortized cost.

The amortized cost of the note receivable is considered approximate fair value due to its variable interest rate.

The Company’s Level 3 liabilities consist of a contingent liability resulting from the Anawah, Inc.

("Anawah") acquisition as described in Note 15, as well as preferred investment options related to the March 2023 Private Placement offering discussed in Note 12.

The contingent liability related to the Anawah acquisition was measured and recorded on a recurring basis as of December 31, 2024 and 2023, using unobservable inputs, namely the Company’s ability and intent to pursue certain specific products developed using technology acquired in the purchase.

A significant deviation in the Company’s ability and/or intent to pursue the technology acquired in the purchase could result in a significantly lower (higher) fair value measurement.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

The Company’s Level 3 liabilities consist of preferred investment options related to the March 2023 Private Placement and August 2022 Registered Direct offerings.

The preferred investment option liabilities were measured and recorded on a recurring basis using the Black-Scholes Model with the following assumptions at December 31, 2025 and 2024:

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March 2023 Placement Agent Options

March 2023 Options - Series B

August 2022 Options & August 2022 Placement Agent Options

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Options - Series A

Options - Series B

March 2023 Placement Agent Options

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Balance as of December 31, 2024

Initial recognition

Change in fair value and

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Balance as of December 31, 2025

Assets classified as held for sale were recorded at fair value as of December 31, 2023.

The Company has classified the fair value measurements as a Level 3 measurement in the fair value hierarchy as the fair value has been estimated using publicly available prices for some of the assets, and business partners' estimates for assets with prices not readily available, due to the relatively small size of the industry in which they can be used.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

Note Receivable and Embedded Derivatives

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

On May 16, 2024, the Company sold the GoodWheat brand and related assets to Above Food for net consideration of $ 3.7 million, pursuant to an Asset Purchase Agreement ("Purchase Agreement") and a related Security Agreement ("Security Agreement").

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

A loss of $ 1,500 was recognized in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2024, related to the sale.

In connection with the transaction, Arcadia paid to Above Food $ 2.0 million and received a $ 6.0 million promissory note dated May 14, 2024.

A loss of $ 1,500 was recognized in the consolidated statement of operations and comprehensive loss during the second quarter of 2024, related to the sale.

In connection with the transaction, Arcadia received a $ 6.0 million promissory note dated May 14, 2024 (the "Promissory Note").

The Promissory Note has a term of three years and accrues interest at the Wall Street Journal prime rate .

On each of the first, second and third anniversaries of the Promissory Note, accrued interest and $ 2.0 million of principal are payable to Arcadia.

The promissory note contains contingent features, including an option that requires Above Food to cause its parent entity, Above Food Ingredients Inc.

The Promissory Note contains contingent features, including an option that, if exercised, requires Above Food to issue, or if Above Food became a wholly-owned subsidiary of a company with shares listed on a national securities exchange, then to cause such parent public company to issue and register shares of such company ("Parent Shares") as a prepayment of the final installment payment of the Promissory Note, as well as default provisions.

In June 2024, Above Food became a wholly-owned subsidiary of AFII, a Canadian company and foreign private issuer whose shares are listed on the Nasdaq Capital Market.

The Company accounted for the Promissory Note as a note receivable in accordance with ASC 310.

The Company did not elect the fair value option and since the Company intends to and has the ability to hold the promissory note to maturity, it has been classified as held for investment and is reported on the consolidated balance sheet at amortized cost.

The first installment payment due in 2025 is classified as current and the remaining installment payments due in 2026 and 2027 are classified as noncurrent on the consolidated balance sheet.

The Company did not elect the fair value option and since the Company intended to and had the ability to hold the Promissory Note to maturity, it was previously classified as held for investment and was reported on the consolidated balance sheets at amortized cost.

The Promissory Note was recorded at a discount of $ 545,000 , which was to be amortized over the term of the Promissory Note using the effective interest method.

The Company recognized discount amortization and accrued interest of $ 69,000 and $ 111,000 , respectively, in the consolidated statement of operations and comprehensive loss during the year ended December 31, 2025.

The Company recognized discount amortization and accrued interest of $ 157,000 and $ 310,000 , respectively, in the consolidated statement of operations and comprehensive loss during the year ended December 31, 2024.

On May 1, 2025, Arcadia delivered a notice (the "Notice") to Above Food pursuant to the provisions of the Promissory Note, to require Above Food to cause AFII to issue Parent Shares to Arcadia.

Pursuant to the provisions of the Promissory Note regarding the calculation and determination of the number of Parent Shares that are issuable in connection with delivery of a notice, the number of Parent Shares issuable are approximately 3.5 million shares (the "Prepayment Shares").

In June 2025, AFII issued approximately 2.7 million Prepayment Shares to the Company.

Pursuant to the provisions of the Promissory Note, approximately 800,000 additional Prepayment Shares are issuable pursuant to the Notice, although there are no assurances that such shares will be issued.

The issued Prepayment Shares are restricted securities subject to restrictions on resale under U.S.

SEC Rule 144.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

The promissory note was recorded at a discount of $ 545,000, which is being amortized over the term of the promissory note using the effective interest method.

The Company recognized discount amortization and accrued interest of $ 157,000 and $ 310,000 in the consolidated statements of operations and comprehensive loss during the year ended December 31, 2024, respectively.

The first payment of $ 2.0 million of principal and accrued interest, calculated by the Company as approximately $ 421,000 of interest, under the Promissory Note was due on May 14, 2025.

As Above Food failed to make the required first payment under the Promissory Note on such due date, the Company inquired with Above Food.

In response to such inquiry, Above Food responded that it was named as a guarantor party relating to an affiliated corporation that is the subject of a bankruptcy and receivership proceeding in Canada and that a receiver was in control of Above Food's assets and activities, and as a result that it was not able to make any payments under the Promissory Note.

The Company believes in light of the guarantor obligations of Above Food under the receivership proceedings, it is unlikely that Above Food will be able to make any cash payments with respect to the Promissory Note or that proceedings against Above Food would be successful in recovering such amounts.

Failure to pay principal and interest when due is an event of default under the Promissory Note and the Security Agreement.

Under the terms of the Promissory Note, upon the occurrence and during the continuance of an event of default, the Company may declare the entire unpaid principal amount of the Promissory Note and accrued interest, and all other amounts owing or payable under the Promissory Note or the Security Agreement, to be immediately due and payable.

The Company has delivered a notice of default to Above Food and declared the entire unpaid amounts to be due and payable.

In addition, pursuant to the Security Agreement, following an event of default, the Company may, by notice to Above Food, elect to require Above Food to cause AFII to issue a number of additional Parent Shares in order to satisfy Above Food's remaining indebtedness and liability to Arcadia under the Promissory Note.

As of the date that these financial statements were available to be issued, substantial doubt exists regarding whether additional Parent Shares may be issued in satisfaction of Above Food's other obligations under the Promissory Note.

In light of the above uncertainties, the Company recorded a credit loss for the full $ 4.0 million principal amount remaining after issuance of shares pursuant to the Notice, plus accrued interest, as of December 31, 2025.

Embedded Derivatives

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The contingent features requiring bifurcation had an estimated fair value of $ 250,000 as of the transaction date and $ 0 as of December 31, 2025.

The estimated fair value of the contingent features is reported in note receivable – noncurrent on the consolidated balance sheet as of December 31, 2024.

The estimated fair value of the contingent features was reported in note receivable – noncurrent on the consolidated balance sheets.

Consolidated Joint Venture

In 2019, the Company and Legacy Ventures Hawaii, LLC, a Nevada limited liability company (“Legacy”), formed Archipelago Ventures Hawaii, LLC, a Delaware limited liability company and entered into a Limited Liability Company Operating Agreement (the “Operating Agreement”).

The Company and Legacy formed Archipelago to develop, extract and commercialize hemp-derived products from industrial hemp grown in Hawaii.

Pursuant to the Operating Agreement, a joint operating committee consisting of two individuals appointed by the Company and two individuals appointed by Legacy will manage Archipelago.

As of December 31, 2024, the Company and Legacy hold 50.75 % and 49.25 % interests in Archipelago, respectively, and have made capital contributions to Archipelago of $ 3.1 million and $ 3.0 million, respectively, as determined by the joint operating committee.

The Operating Agreement includes indemnification rights, non-competition obligations, and certain rights and obligations in connection with the transfer of membership interests, including rights of first refusal.

The Company consolidates Archipelago in the consolidated financial statements after eliminating intercompany transactions.

Net loss attributable to non-controlling interest of $ 0 and $ 5,000 was recorded as an adjustment to net loss to arrive at net loss attributable to common stockholders for the years ended December 31, 2024 and 2023, respectively.

Legacy’s equity interests are presented as non-controlling interests on the consolidated balance sheets.

Refer to Note 2 for basis of presentation.

In October 2021, Arcadia and Legacy mutually agreed to wind down the cultivation activities of Archipelago, due to regulatory challenges and a saturated hemp market.

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Collaborative Arrangements

In August 2017 , the Company entered into a collaborative arrangement for the research, development and commercialization of an improved wheat quality trait in North America.

This collaborative arrangement is a contractual agreement with Corteva and involves a joint operating activity where both Arcadia and Corteva are active participants in the activities of the collaboration.

Arcadia and Corteva participate in the research and development, and Arcadia has the primary responsibility for the intellectual property strategy while Corteva will generally lead the marketing and commercialization efforts.

Both parties are exposed to significant risks and rewards of the collaboration and the agreement includes both cost sharing and profit sharing.

The activities are performed with no guarantee of either technological or commercial success.

The Company accounts for research and development (“R&D”) costs in accordance ASC 730, Research and Development , which states R&D costs must be charged to expense as incurred.

In August 2017 , the Company entered into a collaborative arrangement for the research, development and commercialization of our non-GMO RS durum wheat trait in North America.

This collaborative arrangement was a contractual agreement with Corteva and involved joint operating activities where both Arcadia and Corteva were active participants in the activities of the collaboration.

Arcadia and Corteva participated in the research and development, and Arcadia had the primary responsibility for the intellectual property strategy while Corteva generally led the marketing and commercialization efforts.

Both parties were exposed to significant risks and rewards of the collaboration and the agreement included both cost sharing and profit sharing.

The activities were performed with no guarantee of either technological or commercial success.

The Company accounted for research and development (“R&D”) costs in accordance ASC 730, Research and Development , which states R&D costs must be charged to expense as incurred.

Accordingly, internal R&D costs are expensed as incurred.

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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 year ended December 31, 2024 and recorded a gain of the same amount as the trait had no carrying value on the consolidated statement of operations and comprehensive loss related to the transaction.

Equity Financing

March 2023 Private Placement

In March 2023, the Company issued in a private placement offering (the “March 2023 Private Placement”) pursuant to a securities purchase agreement (“March 2023 Purchase Agreement”) (i) 165,500 shares of its common stock, (ii) pre-funded common stock purchase warrants (the “March 2023 Pre-Funded Warrants”) to purchase up to 500,834 shares of common stock, at an exercise price of $ 0.0001 per share, (iii) Series A preferred investment options (the “March 2023 Options - Series A") to purchase up to a total of 666,334 shares of common stock, at an exercise price of $ 9.00 per share, and (iv) Series B preferred investment options (the “March 2023 Options - Series B”, and together with the March 2023 Options - Series A, the "March 2023 Options") to purchase up to a total of 666,334 shares of common stock, at an exercise price of $ 9.00 per share, and raised total gross proceeds of $ 6.0 million.

The March 2023 Private Placement closed on March 6, 2023.

The March 2023 Pre-Funded Warrants became exercisable upon issuance and were fully exercised as of December 31, 2024.

The March 2023 Options - Series A are exercisable at any time at the option of the holder and expire 5 years from the date of issuance.

The March 2023 Options - Series B are exercisable at any time at the option of the holder and expire 1.5 years from the date of issuance.

During the year ended December 31, 2023, 425,834 Pre-Funded Warrants were exercised.

In connection with the March 2023 Private Placement, the Company entered into preferred investment option amendment agreements (the “Option Amendment Agreements”) with certain investors.

Under the Option Amendment Agreements, the Company agreed to amend certain existing warrants and preferred investment options to purchase up to a total of 178,132 shares of common stock that were previously issued to the investors in September 2019, May 2020, July 2020, December 2020, January 2021 and August 2022, with exercise prices of $ 300.80 , $ 191.00 , $ 154.00 , $ 120.00 , $ 125.20 and $ 37.35 per share, respectively (the “Existing Warrants”).

Under the Option Amendment Agreements, the Company agreed to lower the exercise price of the Existing Warrants to $ 9.00 per share.

In addition, the Company granted to a placement agent preferred investment options to purchase a total of 33,317 shares of Common Stock (the “March 2023 Placement Agent Options”) that have an exercise price per share equal to $ 11.25 and a term of 5 years from the date of issuance.

The re-pricing of the Existing Warrants resulted in an increase in fair value of $ 404,000 , of which $ 185,000 of the increase in fair value was related to the August 2022 liability classified options.

The increase in fair value related to the re-pricing of Existing Warrants was recognized in Valuation Loss on March 2023 PIPE on the consolidated statements of operations and comprehensive loss.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

The March 2023 Options and March 2023 Placement Agent Options are classified as liabilities within Level 3 due to certain early settlement provisions that preclude them from equity classification.

The Company utilized the Black-Scholes Model on March 6, 2023 with the following assumptions for the Series A Investment Options:

volatility of 128.55 %, stock price of $ 7.61 and risk-free rate of 4.27 %.

The following assumptions were utilized for the Series B Investment Options:

volatility of 103.33 %, stock price of $ 7.61 and risk-free rate of 4.97 %.

The estimated fair value of the liability classified March 2023 Options issued was $ 6.6 million.

The estimated fair value of the common stock option liabilities was subsequently remeasured at December 31, 2023 with the changes recorded on the Company’s consolidated statements of operations and comprehensive loss.

The estimated fair value of the common stock issued and March 2023 Pre-Funded Warrants was $ 5.1 million.

The total estimated fair value of the common stock issued, March 2023 Pre-Funded Warrants and March 2023 Options as of March 6, 2023 exceeded the gross proceeds of the March 2023 Private Placement by $ 5.7 million and this amount was recognized in Valuation Loss on March 2023 PIPE on the consolidated statements of operations and comprehensive loss.

The March 2023 Placement Agent Options were issued for services performed by the placement agent as part of the March 2023 Private Placement and were treated as offering costs.

The value of the March 2023 Placement Agent Options was determined to be $ 212,000 , calculated using the Black-Scholes Model.

The Company incurred additional offering costs totaling $ 548,000 that consist of direct incremental legal, advisory, accounting and filing fees relating to the March 2023 Private Placement.

A total of $ 430,000 was allocated to the common stock option liabilities and expensed while the remaining $ 330,000 was allocated to the common stock and March 2023 Pre-Funded Warrants and offset to additional paid in capital.

The Company received a $ 4.0 million cash payment from Corteva during the year ended December 31, 2024 and recorded a gain of the same amount as the trait had no carrying value on the consolidated statement of operations and comprehensive loss related to the transaction.

Arcadia Biosciences, Inc.

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December 2022 Service and Performance Warrants (1)

December 2022

October 2022 Service and Performance Warrants (1)

August 2022 Pre-Funded Warrants

January 2021 Placement Agent Warrants

December 2020 Warrants (2)

December 2020

December 2020 Warrants

December 2020

December 2020 Placement Agent Warrants (3)

December 2020

July 2020 Warrants (2)

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May 2020 Placement Agent Warrants (3)

September 2019 Placement Agent Warrants (3)

June 2019 Placement Agent Warrants (3)

April 2019 Service and Performance Warrants (1)(3)

January 2021 Warrants (2)

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September 2019 Warrants (2) (3)

September 2019

September 2019 Warrants (3)

September 2019

June 2019 Warrants (3)

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(3) These warrants expired during the year ended December 31, 2025.

Liability Classified Preferred Investment Options

The preferred investment options issued in connection with the March 2023 Private Placement and August 2022 Registered Direct offerings contain certain early settlement provisions that preclude them from equity classification and therefore were accounted for as liabilities at the date of issuance and are adjusted to fair value at each balance sheet date.

The change in fair value of the options liabilities is recorded as change in fair value of common stock

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

warrant and option liabilities in the consolidated statements of operations and comprehensive loss.

Liability Classified Preferred Investment Options

The change in fair value of the options liabilities is recorded as change in fair value of common stock warrant and option liabilities in the consolidated statements of operations and comprehensive loss.

The key terms and activity of the liability classified preferred investment options are summarized as follows:

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March 2023 Options - Series A

March 2023 Options - Series B

March 2023 Placement Agent Options

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August 2022 Placement Agent Options

(1) These options were repriced as part of the March 2023 Private Placement offering.

See Note 7 for the Black-Scholes option-pricing model and weighted-average assumptions used to estimate the fair value of the preferred investment options liabilities.

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Stock Incentive Plans

The Company has two equity incentive plans:

The Company had two equity incentive plans:

the 2006 Stock Plan (“2006 Plan”) and the 2015 Omnibus Equity Incentive Plan (“2015 Plan”).

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Upon effectiveness, the 2015 Plan had 3,860 shares of common stock reserved for future issuance, which included 259 that were transferred to and assumed by the 2015 Plan.

The 2015 Plan provides for automatic annual increases in shares available for grant.

In addition, shares subject to awards under the 2006 Plan that are forfeited or canceled will be added to the 2015 Plan.

The 2015 Plan provided for automatic annual increases in shares available for grant.

In addition, shares subject to awards under the 2006 Plan that are forfeited or canceled were added to the 2015 Plan.

The maximum number of shares that may be awarded to any individual employee, including our directors and officers, during any calendar year was 9,375 shares.

The 2015 Plan provides for the grant of incentive stock options (“ISOs”), NSOs, restricted stock awards, stock units, stock appreciation rights, and other forms of equity compensation, all of which may be granted to employees, officers, non-employee directors, and consultants.

The exercise price for ISOs and NSOs will be granted at a price per share not less than the fair value of our common stock at the date of grant.

The 2015 Plan provided for the grant of incentive stock options (“ISOs”), NSOs, restricted stock awards, stock units, stock appreciation rights, and other forms of equity compensation, all of which may be granted to employees, officers, non-employee directors, and consultants.

The exercise price for ISOs and NSOs were granted at a price per share not less than the fair value of our common stock at the date of grant.

Options granted generally vest over a four-year period;

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Options granted, once vested, are generally exercisable for up to 10 years, after grant to the extent vested.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

On June 25, 2024, the shareholders approved an amendment to the Company’s 2015 Plan that increased the number of shares of common stock that may be issued under the 2015 Plan by 200,000 shares and increased the maximum number of shares of common stock issuable to employees, including our officers and directors, in any fiscal year from 9,375 shares to 50,000 shares.

In May 2025, the 2015 Plan terminated as to future awards.

On February 2, 2022, former president and chief executive officer of the Company, Stanley Jacot Jr.

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The Company filed a registration statement on Form S-8 to register the issuance of shares upon exercise of this inducement stock option.

The inducement options grants were issued outside of the 2015 Plan, but are subject to the terms and conditions of the 2015 Plan.

As of December 31, 2024, a total of 338,310 shares of common stock were

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

reserved for issuance under the 2015 Plan, of which 133,074 shares of common stock are available for future grant.

The inducement options grants were issued outside of the 2015 Plan, but were subject to the terms and conditions of the 2015 Plan.

As of December 31, 2025, a total of 332,650 shares of common stock were reserved for issuance under the 2015 Plan pursuant to the exercise of outstanding options, and no further options or other awards may be granted pursuant to the 2015 Plan.

As of December 31, 2025, a total of 9 and 179,755 options were outstanding under the 2006 and 2015 Plans, respectively.

As of December 31, 2024, a total of 40 and 205,236 options were outstanding under the 2006 and 2015 Plans, respectively.

A total of 199 and 8,366 inducement options were outstanding as of December 31, 2024 and 2023, respectively.

A total of 199 inducement options were outstanding as of December 31, 2025 and 2024.

The following is a summary of stock option information and weighted average exercise prices under the Company’s stock incentive plans (in thousands, except share data and price per share):

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Treasuries of comparable maturities on the date the options were granted.

Expected Dividend— The expected dividend yield is based on the Company’s expectation of future dividend payouts to common stockholders.

The fair value of stock option awards was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumption:

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

Expected Dividend— The expected dividend yield is based on the Company’s expectation of future dividend payouts to common stockholders.

The fair value of stock option awards was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumption:

Year Ended December 31,

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After the first offering period, which began on May 14, 2015 and ended on February 1, 2016 , the ESPP provides for six-month offering periods, and at the end of each offering period, employees are able to purchase shares at 85 % of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the last day of the offering period.

As of December 31, 2024 , the number of shares of common stock reserved for future issuance under the ESPP were 3,208 .

The ESPP provides for automatic annual increases in the shares available for purchase beginning on January 1, 2016.

As of December 31, 2025 , 10,560 shares had been issued under the ESPP.

The Company recorded $ 7,000 and $ 6,000 of ESPP related compensation expense for the years ended December 31, 2024 and 2023 , respectively.

The Company recorded $ 7,000 of ESPP related compensation expense for each of the years ended December 31, 2025 and 2024 .

Arcadia Biosciences, Inc.

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Commitments and Contingencies

The Company leases office and laboratory space, warehouse space, and equipment under operating lease agreements having initial lease terms ranging from one to five years , including certain renewal options available to the Company at market rates.

The Company leases office space under an operating lease agreement with an initial lease term of one year .

Legal Matters

From time to time, in the ordinary course of business, the Company may become involved in certain legal proceedings.

The Company currently is not a party to any material litigation or other material legal proceedings.

Refer to Note 22 for more information.

From time to time, the Company may be subject to legal proceedings, actions, claims, suits, or investigations arising from the ordinary course of our business, including actions with respect to intellectual property claims, breach of contract claims, claims relating to our products, labor and employment claims and other matters.

Any litigation or other proceedings could divert management time and attention, could involve significant amounts of legal fees and other fees and expenses, or could result in an adverse outcome having a material adverse effect on our financial condition, cash flows or results of operations.

Actions, claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty.

Except as described below, the Company is not currently involved in any legal proceedings that the Company believes are, individually or in the aggregate, material to the Company's business, results of operations or financial condition.

However, regardless of the outcome, litigation can have an adverse impact on us because of associated cost and diversion of management time.

On March 6, 2025 , a complaint was filed in the Superior Court of the State of California for the County of San Francisco by the Center for Environmental Health, a non-profit corporation (the "plaintiff"), against approximately 28 named companies, including several major retailers and manufacturers such as Walmart, Whole Foods Market, Smart & Final Stores, and Raleys, as well as many companies that manufacture and market coconut water products, including the Company, alleging violations of the California Safe Drinking Water and Toxic Enforcement Act, known as Proposition 65.

Proposition 65 requires, among things, that a specific warning appear on any product sold in California containing a substance listed by that state as having been found to cause cancer or reproductive toxicity.

The complaint contends that the defendants violated Proposition 65 by knowingly and intentionally exposing individuals in California to Bisphenol A ("BPA") in coconut water containers.

The complaint states that the plaintiff's claims against the Company are limited to the Company's coconut water products packaged in cans, but the complaint also alleges that exposure to BPA occurs when individuals consume coconut water in cartons and other containers.

On May 23, 2025, the plaintiff amended the complaint to name additional retailers, manufacturers and/or companies that market coconut water products.

The complaint seeks injunctive relief, including an injunction prohibiting defendants from offering coconut water products sold in California without either reducing the BPA level in the product such that no Proposition 65 warnings are required or providing prior clear and reasonable warnings, and civil penalties.

On July 22, 2025, the Company filed an answer to the complaint, denying liability and asserting a number of affirmative defenses.

The parties have commenced discovery.

The Company intends to vigorously defend itself against the claims.

Due in part to the early stage of the proceedings, the Company cannot predict the outcome of this matter at this time.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

As disclosed above, on December 4, 2024, the Company entered into the Exchange Agreement with Roosevelt providing for a business combination pursuant to the Exchange.

The Exchange Agreement was terminated effective December 29, 2025.

On February 14, 2025, the Company filed a registration statement on Form S-4 with the SEC, including a preliminary proxy statement/prospectus, relating to shares to be issued in the transaction and a meeting of stockholders of the Company to be held to approve the issuance of shares in the transaction and related proposals.

After the date of filing of the registration statement, the Company received several letters (the "Demand Letters") from counsel to purported stockholders of the Company.

Each letter asserted that the preliminary proxy statement included in the registration statement was deficient and demanded that the alleged deficiencies be rectified.

The Demand Letters allege, among other matters, that corrective disclosures are required to be included in the registration statement to address alleged material misstatements and omissions in the registration statement and that the proxy statement/prospectus contains materially incomplete and misleading information concerning, among other matters, financial projections, financial analysis performed by the entity that provided a fairness opinion to the Company's board of directors in connection with the transaction, potential conflicts of interest involving the Company's financial advisor in connection with the transaction and the Company's insiders, and possible breach of fiduciary duties by the directors of executive officers of the Company in connection with the transaction.

Certain of the Demand Letters included a request for inspection of certain books and records of the Company pursuant to Delaware corporate law.

The Company has not received any communications relating to the Demand Letters after the announcement of the termination of the Exchange Agreement.

In light of the termination of the Exchange Agreement with Roosevelt, as disclosed above, the Company believes that the matters contained in the Demand Letters should be regarded as having effectively been mooted.

However, if any of the Demand Letters continue to be pursued, the Company believes that the allegations in the Demand Letters are without merit and intends to vigorously defend itself against any complaint that may be filed.

The matters described in this section could divert management time and attention from the Company, and could involve significant amounts of legal fees and other fees and expenses.

An adverse outcome in any such proceedings could have a material adverse effect on the Company.

Contingent Liability Related to the Anawah Acquisition

In June 2005 , the Company completed its agreement and plan of merger and reorganization with Anawah to purchase the Anawah’s food and agricultural research company through a non-cash stock purchase.

Pursuant to the merger with Anawah, the Company incurred a contingent liability not to exceed $ 5.0 million.

In Ju ne 2005 , the Company completed its agreement and plan of merger and reorganization with Anawah, to purchase Anawah’s food and agricultural research company through a non-cash stock purchase.

Pursuant to the merger with Anawah, and in accordance with ASC 805 - Business Combinations, the Company incurred a contingent liability not to exceed $ 5.0 million.

This liability represents amounts to be paid to Anawah’s previous stockholders for cash collected on revenue recognized by the Company upon commercial sale of certain specific products developed using technology acquired in the purchase.

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During 2019, the Company determined that one of the technologies was no longer active and decided to abandon the previously accrued program.

As of December 31, 2024, the Company continues to pursue or are otherwise liable for a total of two development programs using this technology and believes that the contingent liability is probable.

As a result, $ 2.0 million remains on the consolidated balance sheet as an other noncurrent liability.

The Company has entered into contract research agreements with unrelated parties that require the Company to pay certain funding commitments.

The initial terms of these agreements range from one to three years in duration and in certain cases are cancelable.

The Company licenses certain technologies via executed agreements (“In-Licensing Agreements”) that are used to develop and advance the Company’s own technologies.

The Company has entered into various In-Licensing Agreements with related and unrelated parties that require the Company to pay certain license fees, royalties, and/or milestone fees.

In addition, certain royalty payments ranging from 2 % to 15 % of net revenue amounts as defined in the In-Licensing Agreements are or will be due.

During the first half of 2025, the Company decided to abandon one of the remaining two technologies and transferred the other to Bioseed as disclosed in Note 1.

As a result, the remaining related $ 2.0 million contingent liability was eliminated from the condensed consolidated balance sheet as of the end of the second quarter of 2025.

The Company has exited all contract research agreements and has no additional funding commitments previously associated with these agreements.

The Company licenses certain technologies via executed agreements (“In-Licensing Agreements”) that were used to develop and advance the Company’s own technologies.

These technologies have subsequently been sublicensed to unrelated parties.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

The Company could be adversely affected by certain actions by the government as it relates to government contract revenue received in prior years.

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In addition, serious reputational harm or significant adverse financial effects could occur if allegations of impropriety were made against the Company.

There currently are routine audits in process relating to government grant revenues.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

Operating Leases

As of December 31, 2024, the Company leases office space in Dallas, TX, Davis and Sacramento, CA, as well as additional buildings, land and equipment.

As of December 31, 2025, the Company leases office space in Dallas, TX.

Leases with an initial term of 12 months or less are not recorded on the balance sheet;

the Company recognizes lease expense for these short-term leases on a straight-line basis.

The Company subleases the Davis office to third parties.

Some leases (the Dallas and Davis offices, a warehouse, and a copy machine) include one or more options to renew , with renewal terms that can extend the lease term from one to six years .

The exercise of lease renewal options is at the Company’s sole discretion.

In January 2024, the Company exercised it's option to renew the facility lease in American Falls, Idaho for one year through December 31, 2024.

The lease renewal resulted in recognition of additional right-of-use asset and lease liability of $ 86,000 on the consolidated balance sheet.

The Company subsequently terminated the facility lease in American Falls, Idaho effective July 2024.

The Company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or material restrictive covenants.

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Operating lease liability - current

Noncurrent - Operating

Operating lease liability - noncurrent

Total leased liabilities

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Weighted-average discount rate

The maturities of the operating lease liabilities as of December 31, 2024 are as follows (in thousands):

Years Ending December 31,

Total current operating lease payments

Arcadia Biosciences, Inc.

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Loss before income taxes

The total income tax provision for each of the years ended December 31, 2024 and 2023 was expense of $ 8,000 and is comprised of current state taxes and current foreign taxes withheld by governmental agencies outside of the United States, as follows (in thousands):

The total income tax provision for each of the years ended December 31, 2025 and 2024 was expense of $ 8,000 and is comprised of state minimum taxes, as follows (in thousands):

Year Ended December 31,

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Total tax (expense)

The Company operates in only one federal jurisdiction, the United States.

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

We adopted ASU 2023-09 "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" on a retroactive basis beginning with the year ended December 31, 2024.

The following table presents required disclosures pursuant to ASU 2023-09 and reconciles the U.S.

federal statutory income tax amount and rate to our total provision for income taxes amount and rate for the years ended December 31, 2025 and December 31, 2024 (in thousand, except for percentages):

Year Ended December 31,

Expected income tax provision at the federal statutory rate

State taxes, net of federal benefits

Change in valuation allowance

Derivative liability

PIPE Transactions

Income tax provision

US Federal Statutory Tax Rate

State and Local Income Taxes, Net of Federal Income

Changes in Valuation Allowances

Nontaxable or Nondeductible Items

Contingent Liability Write-offs

Mark-to-Market Adjustments

Other Adjustments

Stock-based Compensation Cancellations

Adjustments to Net Operating Losses

Return-to-Provision Adjustments

Effective Tax Rate

* State taxes in California made up the majority (greater than 50%) of the tax effect in this category.

Arcadia Biosciences, Inc.

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Accordingly, the net deferred tax assets have been offset by a valuation allowance.

The net valuation allowance increased by $ 2.1 million and $ 3.7 million during the years ended December 31, 2024 and 2023, respectively.

At December 31, 2024 , the Company had federal and state NOLs aggregating approximately $ 101.5 million and $ 69.1 million, respectively.

The net valuation allowance increased by $ 2.1 million and decreased by $ 2.1 million during the years ended December 31, 2025 and 2024, respectively.

At December 31, 2025, the Company had federal and state NOLs aggregating approximately $ 109.2 million (of which, $ 101.7 million won't expire) and $ 74.8 million, respectively.

At December 31, 2025, the utilization of a portion of the federal NOLs is subject to an annual limitation under Section 382 of the Internal Revenue Code (IRC).

Of the $ 239.5 million of federal NOLs available, approximately $ 130.9 million are unavailable due to ownership changes as defined in IRC Section 382.

If not utilized, the federal and state NOLs will continue to expire in 2025.

If not utilized, the federal and state NOLs will continue to expire in 2026 and 2027, respectively.

IRC Section 382 may also limit NOLs generated after 2022 and in future years.

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The significant piece of objective negative evidence evaluated was the cumulative loss incurred through the year ended December 31, 2025.

Given this evidence and the expectation to incur operating losses in the foreseeable future, a full valuation allowance has been recorded against the net deferred tax asset.

Given this evidence and the expectation to incur operating losses in the foreseeable future, a full valuation allowance has been recorded against the net deferred tax asset balance.

The Company will continue to maintain a full valuation allowance against the entire amount of its net deferred tax asset, until such time as the Company has determined that the weight of the objectively verifiable positive evidence exceeds that of the negative evidence.

Although the Company has established a full valuation allowance on its net deferred tax asset, for Federal tax losses before 2018 and for all state tax losses, it has not forfeited the right to carryforward tax losses and apply such tax losses against future taxable income, thereby reducing its future tax

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

reducing its future tax obligations.

Federal tax losses generated in 2018 and later do not expire.

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Unrecognized tax benefit ending balance

The Company does not anticipate its total unrecognized tax benefits as of December 31, 2024 will significantly change due to settlement of examination or the expiration of statute of limitations during the next 12 months.

The Company is currently unaware of any uncertain tax positions that could result in significant additional payments, accruals or other material deviation in this estimate over the next 12 months.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in the provision for income taxes.

As of December 31, 2024, the Company has no t recognized any interest and penalties related to uncertain tax positions.

In February 2023, the Company received notification from the Internal Revenue Service that our Archipelago joint venture was selected for audit for the 2021 tax year.

The Company received the IRS Notice of Proposed Partnership Adjustment during the third quarter of 2024, accepted the adjustments, and submitted the push out election forms during the first quarter of 2025, to push the audit adjustments to the partners.

Arcadia will adjust their balance of available tax net operating losses with the filing of their 2024 income tax returns, which have already been adjusted for financial statements purposes, and expects to incur no penalties or interest due.

The Company is currently not under audit for state purposes.

As of December 31, 2025 and 2024, the Company has no t recognized any interest and penalties related to uncertain tax positions.

There were no material tax payments made during the periods ended December 31, 2025 and December 31, 2024.

The Company is currently not under an income tax audit for federal or state purposes.

In July 2025, the United States enacted tax legislation commonly referred to as the One Big Beautiful Bill Act (the "OBBB Act").

The OBBB Act, among other things, permanently reverted to pre-Tax Cuts and Jobs Act rules allowing the immediate deduction of domestic research and experimental expenses effective for tax years beginning after December 31, 2024, and provided transition relief permitting acceleration of previously capitalized domestic R&D costs from 2022-2024 under Section 174.

While these provisions resulted in a favorable tax adjustment in the Company's 2025 tax provision, they did not have a material effect on the Company's financial statements due to the Company's taxable loss and full valuation allowance positions.

The Company will continue to monitor future developments, including regulatory guidance and interpretations.

Arcadia Biosciences, Inc.

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Notes to Consolidated Financial Statements.

Other segment items consist of research and development expenses, gain on sale of intangible assets, gain on sale of property and equipment, impairment of property and equipment, impairment of ROU asset, other income, valuation loss on March 2023 PIPE and issuance and offering costs allocated to liability classified options.

Other segment items consist of research and development expenses, gain on sale of intangible assets, gain on sale of property and equipment, credit losses, other income.

Geographic Data

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Preferred investment options

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

Related Party Transactions

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The JSF is deemed a related party of the Company because MCC, one of the Company’s largest stockholders, and the JSF share common officers and directors.

JSF receives a single digit royalty from the Company when revenue has been collected on product sales or for license payments from third parties that involve certain intellectual property developed under research funding originally from BHL.

JSF received a single digit royalty from the Company when revenue has been collected on product sales or for license payments from third parties that involve certain intellectual property developed under research funding originally from BHL.

Royalty fees due to JSF were $ 0 and $ 29,000 as of December 31, 2025 and December 31, 2024, respectively, and are included in the consolidated balance sheets as amounts due to related parties.

Product sales related to intellectual property developed under research funding from BHL ceased as of December 31, 2024.

The royalty fees due to JSF for sales in 2024 were paid in April 2025 and no future royalty fees are expected.

Arcadia Biosciences, Inc.

Notes to Consolidated Financial Statements.

Subsequent Events

As disclosed in Item 3, "Legal Proceedings," on December 4, 2024, the Company entered into the Exchange Agreement with Roosevelt providing for the Exchange transaction, and on February 14, 2025, the Company filed a registration statement on Form S-4 with the SEC, including a preliminary proxy statement/prospectus, relating to shares to be issued in the transaction and a special meeting of stockholders of the Company to be held to approve the issuance of shares in the transaction and related proposals.

Since the date of filing of the registration statement, the Company has received several letters (the "Demand Letters") from counsel to purported stockholders of the Company.

Each letter asserts that the preliminary proxy statement included in the registration statement was deficient and demanded that the alleged deficiencies be rectified.

Certain of the Demand Letter include a request for inspection of certain books and records of the Company pursuant to Delaware corporate law.

It is possible that additional, similar letters may be received, or complaints filed.

If this occurs, except as may be required by law, the Company does not intend to announce the filing of any such additional demand letter or any such complaint.

The Company believes that the allegations in the Demand Letters are without merit and intends to vigorously defend itself against any complaint that may be filed.

On January 9, 2026, Arcadia Biosciences, Inc.

(the “Company”) entered into inducement offer letter agreements (the “Inducement Letters”) with certain investors (the “Participating Holders”) pursuant to which such Participating Holders agreed to exercise certain outstanding preferred investment options covering an aggregate of 808,595 shares of the Company’s common stock ("Common Stock") and/or Abeyance Shares (as defined below).

The preferred investment options subject to the Inducement Letters had an exercise price of $ 9.00 per share and were originally issued in December 2020, January 2021, August 2022, and March 2023 (the “Existing Options”).

Pursuant to the terms of the Existing Options, if exercise of the Existing Options would have otherwise caused a Participating Holder to exceed the beneficial ownership limitations set forth in the Participating Holder's Existing Options ( 4.99 % or 9.99 %, as applicable), as determined by the holder, the Company agreed to hold such holder's balance of exercised shares in abeyance (the "Abeyance Shares") until the Company received notice from the holder that the balance of shares may be issued in compliance with such beneficial ownership limitations (with such Abeyance Shares evidenced through the holder's existing investment options, and deemed prepaid).

Pursuant to the Inducement Letters, the Participating Holders agreed to exercise for cash the Existing Options at a reduced exercise price of $ 2.575 per share, in consideration for the Company’s agreement to issue new unregistered preferred investment options (the “New Options”) to purchase up to 1,617,190 shares of Common Stock.

The New Options have an exercise price of $ 2.325 per share, are exercisable immediately upon issuance, and expire on the date that is 30 months following the effective date of the Resale Registration Statement described below (the “Option Termination Date”).

The closing of the transactions contemplated by the Inducement Letters occurred on January 12, 2026 (the "Closing Date").

The Company received aggregate gross proceeds of approximately $ 2.1 million from the exercise of the Existing Options by the Participating Holders, before deducting placement agent fees and other offering expenses payable by the Company.

The Company intends to use the net proceeds for working capital and general corporate purposes.

The Company engaged H.C.

Wainwright & Co., LLC (“Wainwright”) to act as its exclusive placement agent in connection with the transactions described above.

In consideration for its services, the Company paid Wainwright a cash fee equal to 7.0 % of the aggregate gross proceeds received from the exercise of the Existing Options.

In addition, the Company paid Wainwright a management fee equal to 1.0 % of the aggregate gross exercise price paid in cash and reimbursed Wainwright for certain expenses, including but not limited to $ 50,000 for legal expenses and $ 25,000 for non-accountable expenses.

The Company also issued to Wainwright or its designees placement agent preferred investment options (the “Placement Agent Options”) to purchase that number of shares of Common Stock ("Placement Agent Option Shares") equal to 7.0 % of the aggregate number of shares of Common Stock underlying the Existing Options exercised in the transaction, or 56,602 shares.

The Placement Agent Options have substantially the same terms as the New Options with the exception of an exercise price of $ 3.2188 per share, and have a term expiring on the Option Termination Date.

The Company agreed to file a registration statement covering the resale of the New Option Shares and Placement Agent Option Shares (the “Resale Registration Statement”) within 30 days after the Closing Date and to use commercially reasonable efforts to cause such Resale Registration Statement to be declared effective by the Securities and Exchange Commission (the "SEC") within 60 days following the date of the Inducement Letter (or within 90 days in certain circumstances).

If, at the time a holder exercises its New Option or Placement Agent Option (as applicable), the Resale Registration Statement is not then effective or available, then in lieu of making the cash payment otherwise contemplated to be made upon such exercise in payment of the aggregate exercise price, the holder may elect instead to make a cashless net exercise and receive upon such exercise the net number of shares of Common Stock determined according to a formula set forth in the New Options and Placement Agent Options.

The Resale Registration Statement was declared effective by the SEC on February 10, 2026.

Changes in and Disagreements With Accou ntants on Accounting and Financial Disclosure.

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-K

Item 7. Management’s Discussion and Analysis