What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-13 compared with 2026-05-14 · 121 added, 54 removed, 145 unchanged (55% of the section changed)

30 unchanged sentences

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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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.

Following the decision, the administration issued a proclamation 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 temporary global tariff on imports under Section 122 of the Trade Act of 1974 expired on July 24, 2026.

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

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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.

Together with our customs brokers, logistics partners, and importers of record, we began taking steps to seek refunds of duties paid under the invalidated IEEPA tariffs.

In July 2026, the Company received $169,000 in refunds related to previously paid IEEPA tariffs.

Zola Coconut Water

13 unchanged sentences

Cost of revenues

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

Cost of revenues relates 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

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

Other loss, net

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

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

Other (loss) income, net

Other (loss) income, 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.

Valuation loss on June 2026 PIPE

Valuation loss on June 2026 PIPE includes the fair value in excess of gross proceeds.

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

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Issuance and offering costs

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

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

Results of Operations

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

Three Months Ended March 31,

Comparison of the Three Months Ended June 30, 2026 and 2025

Three Months Ended June 30,

(In thousands except percentage)

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Cost of revenues

Research and development

Change in fair value of contingent consideration

Selling, general and administrative

Total operating expenses

(Loss) Income from continuing operations

Interest income

Other (loss) income, net

Valuation loss on June 2026 PIPE

Change in fair value of common stock warrant and option liabilities

Issuance and offering costs

Net loss attributable to common stockholders

Product revenues, which consisted 100% of revenues from the sale of our Zola products, decreased $12,000, or 1%, during the three months ended June 30, 2026 compared to the same period in 2025.

The decrease was primarily driven by lower sales volumes as well as low inventory and longer than expected shipping times during the three months ended June 30, 2026 compared to the same period in 2025.

Cost of revenues

Cost of revenues decreased $12,000, or 1%, during the three months ended June 30, 2026 compared to the same period in 2025, primarily driven by the lower Zola sales volume during the three months ended June 30, 2026.

Research and development

Research and development expenses were $0 and $9,000 during the three months ended June 30, 2026 and 2025, respectively.

Change in fair value of contingent consideration

During the three months ended June 30, 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 same period in 2026.

Selling, general, and administrative

Selling, general, and administrative expenses decreased by $996,000, or 47%, during the three months ended June 30, 2026 compared to the same period in 2025, driven primarily by the absence of M&A expenses and lower employee costs in 2026.

Interest income

Interest income was $2,000 and $9,000 during the three months ended June 30, 2026 and 2025, respectively.

During the three months ended June 30, 2025, the Company recognized credit loss of $4.5 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 during the same period in 2026.

Other (loss) income, net

During the three months ended June 30, 2026, the Company recognized other loss, net of $2.8 million, primarily driven by an unrealized loss recognized subsequent to the receipt of the AFII common stock.

During the same period in 2025, the Company recognized other income, net of $1.1 million, primarily driven by an unrealized gain recognized subsequent to the receipt of the AFII common stock.

Valuation loss on June 2026 PIPE

During the three months ended June 30, 2026, the Company recognized a $5.4 million valuation loss related to the June 2026 PIPE financing transaction.

The valuation loss reflects the fair value of financial instruments issued in the financing transaction in excess of gross proceeds.

There was no such loss during the same period in 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 $3.1 million and loss of $548,000 during the three months ended June 30, 2026 and 2025, respectively, related to the change in the estimated fair value of the liability classified preferred investment options.

Issuance and offering costs

Issuance and offering costs were $651,000 during the three months ended June 30, 2026 and consist of placement agent, legal, advisory, accounting and filing fees related to the June 2026 PIPE.

There were no such costs recognized during the same period in 2025.

Comparison of the Six Months Ended June 30, 2026 and 2025

Six Months Ended June 30,

(In thousands except percentage)

Total revenues

Operating expenses (income):

Cost of revenues

Research and development

Gain on sale of intangible assets

4 unchanged sentences

Interest income

Other loss, net

Other (loss) income, net

Loss on January 2026 Inducement Offer

Valuation loss on June 2026 PIPE

Change in fair value of common stock warrant and option liabilities

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.

Net loss attributable to common stockholders

Product revenues, which consisted 100% of sales of our Zola products, decreased $112,000, or 4%, during the six months ended June 30, 2026 compared to the same period in 2025.

The decrease was primarily driven by lower sales volumes as well as low inventory and longer than expected shipping times during the six months ended June 30, 2026 compared to the same period in 2025.

Cost of revenues

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.

Cost of revenues increased $6,000 during the six months ended June 30, 2026 compared to the same period in 2025 primarily driven by tariffs in 2026 that were absent in 2025.

Research and development

Research and development expenses were $0 and $9,000 during the six months ended June 30, 2026 and 2025, respectively.

Gain on sale of intangible assets

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.

During the six months ended June 30, 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 during the same period in 2026.

Change in fair value of contingent consideration

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

During the six months ended June 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.

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

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

There was no change in fair value of contingent consideration during the same period in 2026.

Selling, general, and administrative

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.

Selling, general, and administrative expenses decreased by $1.6 million during the six months ended June 30, 2026 compared to the same period in 2025, driven primarily by the absence of M&A expenses and lower employee costs in 2026.

Interest income

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.

During the six months ended June 30, 2026, the Company recognized interest income of $7,000.

During the six months ended June 30, 2025, the Company recognized interest income of $216,000, of which $180,000 was related to discount amortization and accrued interest on the promissory note from Above Food.

During the six months ended June 30, 2025, the Company recognized credit loss of $4.5 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 during the same period in 2026.

Other (loss) income, net

During the six months ended June 30, 2026, the Company recognized other loss, net of $4.3 million, primarily driven by an unrealized loss recognized subsequent to the receipt of the AFII common stock.

During the same period in 2025, the Company recognized other income, net of $1.1 million, primarily driven by an unrealized gain recognized subsequent to the receipt of the AFII common stock.

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.

Loss on January 2026 Inducement Offer was $2.9 million during the six months ended June 30, 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 during the same period in 2025.

Valuation loss on June 2026 PIPE

During the six months ended June 30, 2026, the Company recognized a $5.4 million valuation loss related to the June 2026 PIPE financing transaction.

The valuation loss reflects the fair value of financial instruments issued in the financing transaction in excess of gross proceeds.

There was no such loss during the same period in 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 $1.2 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.

The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $4.3 million and $1.3 million during the six months ended June 30, 2026 and 2025, respectively, related to the change in the estimated fair value of the liability classified preferred investment options.

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.

Issuance and offering costs were $1.1 million during the six months ended June 30, 2026 and consist of placement agent, legal, advisory, accounting and filing fees related to the June 2026 PIPE and January 2026 Inducement Offer.

There were no such costs during the same period in 2025.

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

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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.

As of June 30, 2026, we had cash and cash equivalents of $4.2 million.

For the six months ended June 30, 2026, the Company had net loss of $10.7 million and net cash used in operations of $1.4 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 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.

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 that was due in May 2025 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.

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 regarding the amount of net proceeds to Arcadia that might result from a sale of any such Parent Shares.

On June 1 and June 2, 2026, AFII announced that The Nasdaq Stock Market LLC (“Nasdaq”) determined to delist AFII’s common stock and warrants from Nasdaq due to AFII’s failure to file audited financial statements and the associated Report on Form 20-F by the time period previously provided by Nasdaq, and that its common stock and warrants commenced trading on the Over-the-Counter Market.

AFII indicated in a press release that it had submitted an appeal to Nasdaq of the delisting determination in accordance with Nasdaq listing rules.

Going Concern;

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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.

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

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

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

In addition, as noted elsewhere in this Report under Item 1A, there are no assurances that our common stock will remain listed on the Nasdaq, and any delisting could adversely affect our ability to engage in a debt or equity financing.

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.

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.

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.

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, there are no assurances regarding whether at a future date we will be able to sell AFII shares or receive any significant proceeds from the sale of such shares.

In addition, removal of restrictive legends applicable to the shares requires action by the issuer and its transfer agent in order to remove the legends and facilitate the public resale of the shares pursuant to Rule 144 or otherwise.

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

If from time to time in the future we seek to sell the AFII shares that we hold, there are no assurances regarding the amount of net proceeds to us that might result from such sales.

In addition, we are actively evaluating merger, acquisition or other strategic alternatives and may seek to enter into a merger, acquisition or other strategic transaction.

If we are not able to secure adequate additional funding or engage in a merger, acquisition or other strategic transaction, 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 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.

As noted above, through June 30, 2026, we have incurred substantial losses.

In the absence of a merger, acquisition or other strategic transaction, we will be required to obtain additional cash resources in order to support our operations and activities.

The availability of required additional funding cannot be assured.

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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.

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 if we did not engage in a merger, acquisition or other strategic transaction, 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.

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

Three Months Ended March 31,

Six Months Ended June 30,

Net cash (used in) provided by:

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Cash flows from operating activities

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 used in operating activities for the six months ended June 30, 2026, was $1.4 million.

With respect to our net loss of $10.7 million, non-cash gain of $4.3 million related to the change in fair value of common stock warrant and option liabilities and adjustments in our working capital accounts of $206,000 were offset by issuance and offering costs of $1.1 million, valuation loss on June 2026 PIPE of $5.4 million, loss on January 2026 Inducement Offer of $2.9 million, depreciation of $8,000, unrealized loss on AFII common stock subsequent to receipt of $4.3 million, and stock-based compensation of $29,000.

Cash used in operating activities for the six months ended June 30, 2025, was $3.6 million.

With respect to our net loss of $1.9 million, non-cash charges including the change in fair value of common stock warrant and option liabilities of $1.3 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, adjustments in our working capital accounts of $1.2 million, and operating lease payments of $129,000 were offset by $28,000 of depreciation, $117,000 of lease amortization, $164,000 of stock-based compensation and $4.5 million of credit loss.

Cash flows from investing activities

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.

There was no cash provided by investing activities for the six months ended June 30, 2026.

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

Cash flows from financing activities

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.

Cash provided by financing activities for the six months ended June 30, 2026 consisted of gross proceeds from the June 2026 PIPE of $4.0 million, gross proceeds from the January 2026 Inducement Offer of $2.1 million, which was offset by payments of offering costs of $395,000 related to the June 2026 PIPE and $350,000 related to the January 2026 Inducement Offer.

Cash provided by financing activities for the six months ended June 30, 2025 consisted of proceeds from the purchase of ESPP shares of $5,000.

Off-Balance Sheet Arrangements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis