What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-11-07 · 97 added, 173 removed, 102 unchanged (73% of the section changed)

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

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

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

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

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

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

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

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

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

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

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

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

As a result, the financial statements and related notes as of June 30, 2025 and 2024 reflect the GoodWheat disposition as a discontinued operation.

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

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

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

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

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

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

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

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

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

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

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 without limitation the following:

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

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

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

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, and the Company subsequently received comments on Amendment No.

1 from the staff of the SEC.

As of the date of filing this Quarterly Report on Form 10-Q with the SEC, the registration statement is still under review by the SEC.

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.

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

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

As of September 30, 2025, the Company has received full payment for the $750,000.

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.

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

In April 2025, a universal baseline tariff of 10% imposed by the U.S.

government went into effect.

Additional country-specific tariffs were initially delayed until the announcement of their implementation in August 2025, which included a revised increased rate of approximately 20% for Asian sourcing countries.

While we expect the imposition of tariffs to increase our cost of goods sold, the full impact of tariffs on the Company remains uncertain as the tariff policy continues to develop.

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

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

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

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 Powers 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, including 100% pure coconut water, which accounted for approximately 85% of our Zola net sales in 2025.

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, substantial uncertainty remains 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.

Together with our customs brokers, logistics partners, and importers of record, we have begun taking steps to seek refunds of duties paid under the invalidated IEEPA tariffs, although the process is in its early stages and the timing and ultimate recoverability of any such refunds remain uncertain.

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

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

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

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

Discontinued Operations

As 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 operations in the condensed consolidated balance sheets and the results of the discontinued operations as separate components on the condensed consolidated statements of operations and comprehensive income (loss) for all periods presented.

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

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.

Components of Our Statements of Operations Data

Product revenues

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

GLA oil sales ceased as of the end of 2024.

Product revenues consist primarily of sales of Zola.

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.

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Cost of revenues

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

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

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

Research and development expenses ("R&D")

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

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

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

Gain on sale of intangible assets

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

Impairment of property and equipment

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

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

Change in fair value of contingent consideration

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

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

Other income consists primarily of a realized 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.

Other loss, net

Other loss, net consists primarily of unrealized loss recognized subsequent to the receipt of the AFII common stock.

Loss on January 2026 Inducement Offer

Loss on January 2026 Inducement Offer includes the initial fair value of preferred investment options issued in connection with the induced exercise of existing warrants and options at a lower exercise price and the increase in fair value related to the reduction in exercise price of such warrants and options.

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.

Net loss from discontinued operations

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

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

Issuance and offering costs

Issuance and offering costs include placement agent, legal, advisory, accounting and filing fees related to the January 2026 Inducement Offer.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024

Three Months Ended September 30,

(In thousands except percentage)

Total revenues

Operating expenses (income):

Cost of revenues

Research and development

Selling, general and administrative

Total operating expenses

Loss from operations

Interest income

Change in fair value of common stock warrant and option liabilities

Net income (loss) from continuing operations

Net loss from discontinued operations

Net income (loss) attributable to common stockholders

Product revenues decreased $235,000, or 15%, during the three months ended September 30, 2025 compared to the same period in 2024, of which $217,000 is related to sales of GLA oil during three months ended September 30, 2024 that were absent in 2025.

Cost of revenues

Cost of revenues decreased $148,000, or 14%, during the three months ended September 30, 2025 compared to the same period in 2024 driven by a write-down of $154,000 related to hemp and GoodWheat seed during the three months ended September 30, 2024.

There was no such write-down of inventory in 2025.

Cost of revenues for the same period in 2024 included $18,000 from GLA oil.

Research and development

Research and development expenses decreased by $24,000, or 100%, during the three months ended September 30, 2025 compared to the same period in 2024 reflecting our strategy to develop the Zola brand by leveraging our existing resources and minimizing new investment.

Selling, general, and administrative

Selling, general, and administrative expenses decreased by $671,000 during the three months ended September 30, 2025 compared to the same period in 2024, driven primarily by operating costs and employee related costs in 2024 that were absent in 2025.

Interest income

During the three months ended September 30, 2025, the Company recognized interest income of $7,000.

During the three months ended September 30, 2024, the Company recognized interest income of $233,000, of which $186,000 was related to discount amortization and accrued interest on the promissory note from Above Food.

During the three months ended September 30, 2025, the Company recognized credit loss of $257,000 primarily for deductions related to GoodWheat that the Company does not expect to be reimbursed by Above Food.

There was no such loss recognized during the same period in 2024.

During the three months ended September 30, 2025, the Company recognized other income of $1.7 million primarily driven by an unrealized gain recognized subsequent to the receipt of the AFII common stock of $1.7 million.

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

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

The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $560,000 and $330,000 during the three months ended September 30, 2025 and 2024, respectively, related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.

Net loss from discontinued operations

Net loss from discontinued operations for GoodWheat was $430,000 during the three months ended September 30, 2024, reflecting the sale of the GoodWheat brand and related assets to Above Food during the second quarter of 2024.

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

Comparison of the Nine Months Ended September 30, 2025 and 2024

Nine Months Ended September 30,

Comparison of the Three Months Ended March 31, 2026 and 2025

Three Months Ended March 31,

(In thousands except percentage)

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Cost of revenues

Research and development

Gain on sale of intangible assets

Impairment of property and equipment

Change in fair value of contingent consideration

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Total operating expenses

Loss from operations

(Loss) Income from continuing operations

Interest income

Other loss, net

Loss on January 2026 Inducement Offer

Change in fair value of common stock warrant and option liabilities

Net income (loss) from continuing operations

Net loss from discontinued operations

Net income (loss) attributable to common stockholders

Product revenues increased $128,000, or 3%, and consisted entirely of Zola coconut water sales during the nine months ended September 30, 2025 compared to the same period in 2024.

Zola revenues increased $820,000, or 26% during the nine months ended September 30, 2025 compared to the same period in 2024.

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

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

Revenues for the nine months ended September 30, 2024 included $701,000 from sales of GLA oil that were absent in 2025.

Issuance and offering costs

Net (loss) income attributable to common stockholders

Product revenues, which consisted 100% of Zola, decreased $100,000, or 8%, during the three months ended March 31, 2026 compared to the same period in 2025 driven primarily by a revenue reserve release of approximately $193,000 in 2025 that was absent in 2026.

Cost of revenues

Cost of revenues increased by $253,000, or 12%, and consisted primarily of Zola coconut water costs during the nine months ended September 30, 2025 compared to the same period in 2024.

Zola cost of revenues increased $472,000, or 25% during the nine months ended September 30, 2025 compared to the same period in 2024 driven by a 26% increase in Zola sales.

Cost of revenues for the nine months ended September 30, 2024 included $64,000 from GLA oil as well as a write-down of $154,000 related to hemp and GoodWheat seed.

Research and development

Research and development expenses decreased by $31,000, or 78%, during the nine months ended September 30, 2025 compared to the same period in 2024 reflecting our strategy to develop the Zola brand by leveraging our existing resources and minimizing new investment.

Cost of revenues increased $18,000, or 3%, during the three months ended March 31, 2026 compared to the same period in 2025 driven primarily by the increase in Zola volume, which increased product costs and freight expenses.

Gain on sale of intangible assets

During the nine months ended September 30, 2025, the Company realized a gain of $750,000 related to the sale of our reduced gluten and oxidative stability patent portfolios in March 2025.

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

Impairment of property and equipment

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

There was no such impairment of property and equipment during the nine months ended September 30, 2025.

During the three months ended March 31, 2025, the Company realized a gain of $750,000 related to the sale of our reduced gluten and oxidative stability patent portfolios.

There was no such gain recognized during the three months ended March 31, 2026.

Change in fair value of contingent consideration

During the nine months ended September 30, 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 the two remaining programs and transfer the other to a third party with respect to which a contingent liability was previously accrued.

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

See Note 13 to the condensed consolidated financial statements for details.

There was no change in fair value of contingent consideration during the nine months ended September 30, 2024.

There was no change in fair value of contingent consideration during the three months ended March 31, 2026.

Selling, general, and administrative

Selling, general, and administrative expenses decreased by $1.6 million during the nine months ended September 30, 2025 compared to the same period in 2024, driven primarily by operating costs and employee related costs in 2024 that were absent in 2025.

Selling, general, and administrative expenses decreased by $559,000 during the three months ended March 31, 2026 compared to the same period in 2025, driven primarily by the absence of M&A fees and lower employee costs in 2026.

Interest income

During the nine months ended September 30, 2025, the Company recognized interest income of $222,000, of which $180,000 was related to discount amortization and accrued interest on the promissory note from Above Food.

During the nine months ended

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

The remaining difference was related to interest from investments.

During the nine months ended September 30, 2025, the Company recognized credit loss of $4.7 million primarily related to the establishment of a reserve 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 the same period in 2024.

During the nine months ended September 30, 2025, the Company recognized other income of $2.8 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.

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

During the three months ended March 31, 2026, the Company recognized interest income of $5,000.

During the three months ended March 31, 2025, the Company recognized interest income of $207,000, of which $180,000 was related to discount amortization and accrued interest on the promissory note from Above Food.

Other loss, net

During the three months ended March 31, 2026, the Company recognized other loss, net of $1.5 million, primarily driven by an unrealized loss recognized subsequent to the receipt of the AFII common stock.

There was no such loss recognized during the three months ended March 31, 2025.

Loss on January 2026 Inducement Offer

Loss on January 2026 Inducement Offer was $2.9 million during the three months ended March 31, 2026 and includes the initial fair value of preferred investment options issued in connection with the induced exercise of existing warrants and options at a lower exercise price and the increase in fair value related to the reduction in exercise price of such warrants and options.

There was no such loss recognized during the three months ended March 31, 2025.

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

The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $1.9 million and $493,000 during the nine months ended September 30, 2025 and 2024, respectively, related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.

Net loss from discontinued operations

Net loss from discontinued operations for GoodWheat was $2.7 million during the nine months ended September 30, 2024, reflecting the sale of the GoodWheat brand and related assets to Above Food during the second quarter of 2024.

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

The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $1.2 million and $1.9 million during the three months ended March 31, 2026 and 2025, respectively, related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the January 2026 Inducement Offer, March 2023 PIPE and August 2022 Registered Direct Offering financing transactions.

Issuance and offering costs

Issuance and offering costs were $421,000 during the three months ended March 31, 2026 and consist of placement agent, legal, advisory, accounting and filing fees related to the January 2026 Inducement Offer.

There were no such costs recognized during the three months ended March 31, 2025.

The coconut water category, similar to other beverages, is seasonal.

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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.

As of September 30, 2025, we had cash and cash equivalents of $1.1 million.

For the nine months ended September 30, 2025, the Company had net loss of $1.0 million and net cash used in operations of $3.9 million.

Our principal use of cash is to fund our operations.

As of March 31, 2026, we had cash and cash equivalents of $1.0 million.

For the three months ended March 31, 2026, the Company had net loss of $4.4 million and net cash used in operations of $1.1 million.

For the twelve months ended December 31, 2025, the Company had net loss of $2.3 million and net cash used in operations of $4.7 million.

As discussed in Notes 1 and 7 to the condensed 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 Purchase Agreement, 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 has had a material adverse effect on the Company's near-term cash resources and financial position.

In addition, although as described in Note 7, 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 may 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.

As discussed in Note 6 to the condensed 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 6, 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

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

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 condensed consolidated financial statements, which raises substantial doubt about the Company’s ability to continue as a going concern, and the audit opinion on our 2025 audited consolidated financial statements includes a going concern explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern.

The condensed consolidated 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.

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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 or other transactions.

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

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

Any sale of additional equity would result in dilution, and could result in material dilution, to our stockholders.

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.

Rule 144 permits the public resale of restricted securities provided that certain requirements are satisfied.

For a non-affiliate of an issuer, which Arcadia believes it is with respect to AFII, the shares must have been held for at least six months from the date that they were acquired from the issuer.

Arcadia believes that the six month holding period with respect to the Prepayment Shares initially issued should be satisfied by the end of calendar year 2025.

In addition, Rule 144 requires that there must be "current public information" about the issuer, including without limitation the issuer being subject to the Exchange Act's periodic reporting requirements and having filed all required reports under Section 13 or 15(d) of the Exchange Act (other than Form 8-K reports), including all required financial statements, during the 12 months preceding the date of sale of the restricted securities.

Under Rule 144, after the restricted securities have been held for more than one year, then non-affiliates of the issuer may freely resell the shares without regarding to the current public information requirements.

Removal of restrictive legends from 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.

Independent of Rule 144, there are no assurances regarding whether or when AFII will file a registration statement covering the resale of the shares issued to Arcadia as provided for in the Promissory Note as described above or, if filed, when it will become effective in light of the current U.S.

federal government shutdown and other considerations.

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

However, the AFII shares are restricted securities, and it is not clear when the requirements of Rule 144 will be satisfied so as to 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.

Moreover, 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.

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.

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.

We are also evaluating strategic alternatives and may seek to enter into strategic alternative transactions.

If we are not able to secure adequate additional funding, we will be forced to further 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 September 30, 2025, we have incurred substantial losses.

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

We will be required to obtain additional cash resources in the near term in order to support our operations and activities.

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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.

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’s obligations to its creditors, let alone to permit any distribution to its equity holders.

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

September 30,

Current assets

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

Nine Months Ended September 30,

Three Months Ended March 31,

Net cash (used in) provided by:

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Financing activities

Net decrease in cash

Net increase (decrease) in cash

Cash flows from operating activities

Cash used in operating activities for the nine months ended September 30, 2025, was $3.9 million.

With respect to our net loss of $1.0 million, non-cash charges including the change in fair value of common stock warrant and option liabilities of $1.9 million, change in fair value of contingent consideration of $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 $1.7 million, adjustments in our working capital accounts of $391,000, and operating lease payments of $139,000 were offset by $30,000 of depreciation, $122,000 of lease amortization, $217,000 of stock-based compensation and $4.7 million of credit loss.

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

With respect to our net loss of $3.0 million, non-cash charges including $92,000 of depreciation, $502,000 of lease amortization, $395,000 of stock-based compensation, $154,000 of write-downs of inventory, and $36,000 of impairment of property and equipment, were offset by the change in fair value of common stock warrant and option liabilities of $493,000, amortization of note receivable discount of $90,000, a gain on disposal of property and equipment of $65,000, gain on sale of RS durum wheat trait of $4.0 million, adjustments in our working capital accounts of $297,000, and operating lease payments of $678,000.

Cash used in operating activities for the three months ended March 31, 2026, was $1.1 million.

With respect to our net loss of $4.4 million, non-cash gain of $1.2 million related to the change in fair value of common stock warrant and option liabilities and adjustments in our working capital accounts of $382,000 were offset by issuance and offering costs of $421,000, loss on January 2026 Inducement Offer of $2.9 million, depreciation of $8,000, unrealized loss on AFII common stock subsequent to receipt of $1.5 million, and stock-based compensation of $15,000.

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

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

Cash flows from investing activities

Cash provided by investing activities for the nine months ended September 30, 2025 consisted of proceeds from the sale of intangible assets of $750,000.

Cash provided by investing activities for the nine months ended September 30, 2024 consisted of proceeds of $342,000 from the sale of property and equipment, proceeds from the sale of investments of $2.5 million, proceeds from the sale of our RS durum wheat trait of $4.0 million, offset by cash paid related to the GoodWheat sale of $2.0 million and $16,000 of purchases of property and equipment.

There was no cash provided by investing activities for the three months ended March 31, 2026.

Cash provided by investing activities for the three months ended March 31, 2025 consisted of proceeds from the sale of intangible assets of $500,000.

Cash flows from financing activities

Cash provided by financing activities for the nine months ended September 30, 2025 consisted of proceeds from the purchase of ESPP shares of $6,000.

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

Cash provided by financing activities for the three months ended March 31, 2026 consisted of gross proceeds from the January 2026 Inducement Offer of $2.1 million, which was offset by related payments of transaction costs of $288,000.

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

Off-Balance Sheet Arrangements

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The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods.

Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other

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, fair value of preferred investment options, and allowance for credit losses.

QUANTITATIVE AND QUALITATI VE DISCLOSURES ABOUT MARKET RISK

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What changed 10-Q

Item 2. Management’s Discussion and Analysis