[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) - Filing Type: Quarterly Report (10-Q) for the period ended **June 30, 2025**[2](index=2&type=chunk) - Registrant: Arcadia Biosciences, Inc[2](index=2&type=chunk) - Trading Symbol: RKDA (NASDAQ CAPITAL MARKET)[3](index=3&type=chunk) - Filer Status: Non-accelerated filer and Smaller reporting company[4](index=4&type=chunk) - Shares Outstanding: **1,367,040 shares** of common stock as of **August 7, 2025**[4](index=4&type=chunk) [INDEX](index=2&type=section&id=INDEX) [Part I — Financial Information (Unaudited)](index=3&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information%20(Unaudited)) [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Arcadia Biosciences, Inc.'s unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive income (loss), statements of stockholders' equity, and statements of cash flows, along with their accompanying notes, for the period ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | **Assets** | | | | | Cash and cash equivalents | $1,376 | $4,242 | $(2,866) | | Short-term investments | $3,067 | — | $3,067 | | Total current assets | $7,579 | $9,242 | $(1,663) | | Total assets | $7,788 | $13,517 | $(5,729) | | **Liabilities** | | | | | Total current liabilities | $1,839 | $2,563 | $(724) | | Common stock warrant and option liabilities | $1,416 | $2,731 | $(1,315) | | Total liabilities | $3,255 | $7,294 | $(4,039) | | **Stockholders' Equity** | | | | | Total stockholders' equity | $4,533 | $6,223 | $(1,690) | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product Revenues | $1,455 | $1,306 | $2,655 | $2,293 |\n| Cost of Revenues | $824 | $633 | $1,506 | $1,104 |\n| Research and development | $9 | $10 | $9 | $16 |\n| Gain on sale of intangible assets | — | $(4,000) | $(750) | $(4,000) |\n| Change in fair value of contingent consideration | $(1,000) | — | $(2,000) | — |\n| Selling, general and administrative | $2,123 | $2,683 | $3,861 | $4,745 |\n| (Loss) income from operations | $(501) | $1,980 | $29 | $392 |\n| Interest income | $9 | $150 | $216 | $195 |\n| Credit loss | $(4,489) | — | $(4,489) | — |\n| Other income | $1,071 | $150 | $1,071 | $153 |\n| Change in fair value of common stock warrant and option liabilities | $(548) | $(430) | $1,314 | $163 |\n| Net (loss) income from continuing operations | $(4,458) | $1,850 | $(1,859) | $903 |\n| Net loss from discontinued operations | — | $(789) | — | $(2,265) |\n| Net (loss) income attributable to common stockholders | $(4,458) | $1,061 | $(1,859) | $(1,362) |\n| Basic and diluted EPS from continuing operations | $(3.26) | $1.36 | $(1.36) | $0.66 |\n| Basic and diluted EPS from discontinued operations | — | $(0.58) | — | $(1.66) |\n| Net (loss) income per basic share | $(3.26) | $0.78 | $(1.36) | $(1.00) | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) | Metric (in thousands) | Balance at December 31, 2024 | Balance at June 30, 2025 | | :-------------------- | :--------------------------- | :----------------------- | | Common Stock (Amount) | $65 | $65 |\n| Additional Paid-In Capital | $285,036 | $285,205 |\n| Accumulated Deficit | $(278,878) | $(280,737) |\n| Total Stockholders' Equity | $6,223 | $4,533 | - **Net loss of $4,458 thousand** for the three months ended **June 30, 2025**, contributing to an increased accumulated deficit[16](index=16&type=chunk) - Stock-based compensation for the six months ended **June 30, 2025**, totaled **$164 thousand**[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(3,621) | $(5,666) |\n| Net cash provided by investing activities | $750 | $4,647 |\n| Net cash provided by financing activities | $5 | $5 |\n| Net decrease in cash and cash equivalents | $(2,866) | $(1,014) |\n| Cash and cash equivalents — end of period | $1,376 | $5,504 | - Noncash investing activity included the fair value of Above Food Ingredients, Inc. common stock received, totaling **$3,067 thousand** in **2025**[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations and breakdowns of the figures presented in the condensed consolidated financial statements, covering business operations, significant transactions, accounting policies, and financial instrument valuations [Note 1. Description of Business and Basis of Presentation](index=7&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) Arcadia Biosciences, Inc. (the "Company") was incorporated in Arizona in 2002 and reincorporated in Delaware in 2015, with headquarters in Dallas, Texas. The Company has transitioned from developing wheat products to focusing on consumer goods, primarily Zola coconut water, since acquiring Zola assets in May 2021. Recent significant transactions include the termination of a license agreement with Bioseed, an agreement with Bioceres Crop Solutions Corp. for soy traits and patent transfers, and a business combination agreement with Roosevelt Resources LP. The Company also sold its GoodWheat brand and RS durum wheat trait in 2024. The financial statements are prepared on a going concern basis, but the Company faces substantial doubt about its ability to continue as a going concern due to an accumulated deficit and insufficient cash - Company's primary focus shifted to Zola coconut water products after acquiring Zola assets in **May 2021**[23](index=23&type=chunk)[108](index=108&type=chunk) - Entered into a License Termination and Patent Non-Assert Agreement with Bioseed on **May 26, 2025**, eliminating a **$1.0 million contingent liability**[24](index=24&type=chunk) - Entered an agreement with Bioceres Crop Solutions Corp. on **March 28, 2025**, transferring soy traits to the Company and reduced gluten/oxidative stability patents to BIOX, resulting in a **$750,000 gain** for Arcadia[25](index=25&type=chunk) - Entered a Securities Exchange Agreement with Roosevelt Resources LP on **December 4, 2024**, amended on **April 30, 2025**, where Roosevelt's limited partners will own **90% of Arcadia's common stock** post-closing[26](index=26&type=chunk)[27](index=27&type=chunk) - Sold the GoodWheat™ brand to Above Food Corp. on **May 16, 2024**, for **$3.7 million**, resulting in a **$1,500 loss** in **Q2 2024** and reclassification as discontinued operations[28](index=28&type=chunk) - Sold non-GMO Resistant Starch (RS) durum wheat trait to Corteva Agriscience on **May 14, 2024**, for **$4.0 million cash**, recognizing a gain[29](index=29&type=chunk) - As of **June 30, 2025**, the Company had an **accumulated deficit of $280.7 million** and **cash and cash equivalents of $1.4 million**, raising substantial doubt about its ability to continue as a going concern for at least the next **12 months**[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Note 2. Recent Accounting Pronouncements](index=11&type=section&id=Note%202.%20Recent%20Accounting%20Pronouncements) The Company is evaluating the impact of recently issued accounting standards updates (ASUs) from the FASB. ASU No. 2023-09 (Income Taxes) is effective for fiscal years beginning after December 15, 2024, and ASU No. 2024-03 (Expense Disaggregation Disclosures) is effective for annual reporting periods beginning after December 15, 2026 - Evaluating ASU No. 2023-09 (Income Taxes) for additional income tax disclosures, effective for fiscal years beginning after **December 15, 2024**[40](index=40&type=chunk) - Evaluating ASU No. 2024-03 (Expense Disaggregation Disclosures) for quantitative disclosures on employee compensation, selling expenses, and inventory purchases, effective for annual reporting periods beginning after **December 15, 2026**[41](index=41&type=chunk) [Note 3. Discontinued Operations](index=11&type=section&id=Note%203.%20Discontinued%20Operations) Arcadia sold the GoodWheat brand to Above Food on May 16, 2024, ceasing its operations. The financial results of GoodWheat are reported as discontinued operations for all periods presented, reflecting a strategic shift - GoodWheat brand sold to Above Food on **May 16, 2024**, and operations ceased in **Q2 2024**[42](index=42&type=chunk) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Product revenue | $— | $179 | $— | $447 |\n| Net loss from discontinued operations | $— | $(789) | $— | $(2,265) | - As of **June 30, 2025**, there were **no assets** from discontinued operations, down from **$96 thousand** at **December 31, 2024**[44](index=44&type=chunk) [Note 4. Inventory](index=12&type=section&id=Note%204.%20Inventory) Inventories are valued at the lower of cost or net realizable value, with adjustments made for deterioration, obsolescence, or slow-moving items. The Company's inventory primarily consists of raw materials and finished goods | Inventory (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Raw materials | $333 | $289 |\n| Finished goods | $1,156 | $615 |\n| Total Inventories | $1,489 | $904 | - Total inventories increased by **$585 thousand** from **December 31, 2024**, to **June 30, 2025**[47](index=47&type=chunk) [Note 5. Property and Equipment, Net](index=12&type=section&id=Note%205.%20Property%20and%20Equipment,%20Net) Property and equipment, net, primarily includes software, computer equipment, furniture, fixtures, and leasehold improvements, reported net of accumulated depreciation. The Company recorded an impairment related to Archipelago property and equipment in Q1 2024, which was subsequently sold | Property and Equipment (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Property and equipment, gross | $1,907 | $1,907 |\n| Less: accumulated depreciation and amortization | $(1,895) | $(1,866) |\n| Property and equipment, net | $12 | $41 | - Depreciation expense was **$28 thousand** for the six months ended **June 30, 2025**, down from **$48 thousand** in the same period of **2024**[48](index=48&type=chunk) - An impairment of **$36 thousand** related to Archipelago property and equipment was recorded in **Q1 2024**, with all such assets sold in **Q2 2024**[49](index=49&type=chunk) [Note 6. Investments and Fair Value Instruments](index=13&type=section&id=Note%206.%20Investments%20and%20Fair%20Value%20Instruments) The Company classifies investments in corporate securities of Above Food Ingredients, Inc. (AFII) as short-term investments, carried at fair value. As of June 30, 2025, the fair value of AFII common stock was $3.1 million. The Company also measures Level 3 liabilities, such as preferred investment options, using the Black-Scholes Model, with volatility being a significant input - **Fair value of AFII common stock** (short-term investment) was **$3.1 million** as of **June 30, 2025**[50](index=50&type=chunk)[52](index=52&type=chunk) | Level 3 Liabilities (in thousands) | Balance as of December 31, 2024 | Change in fair value | Balance as of June 30, 2025 | | :--------------------------------- | :------------------------------ | :------------------- | :-------------------------- | | March 2023 Options - Series A | $2,285 | $(1,100) | $1,185 |\n| March 2023 Placement Agent Options | $90 | $(38) | $52 |\n| August 2022 Options | $349 | $(172) | $177 |\n| August 2022 Placement Agent Options | $7 | $(5) | $2 |\n| Note Receivable Bifurcated Derivatives | $250 | $(250) | $— |\n| Contingent Liabilities | $2,000 | $(2,000) | $— |\n| Total | $4,981 | $(3,565) | $1,416 | - The change in fair value of Level 3 liabilities resulted in a **decrease of $3,565 thousand** for the six months ended **June 30, 2025**[54](index=54&type=chunk) [Note 7. Note Receivable and Embedded Derivatives](index=15&type=section&id=Note%207.%20Note%20Receivable%20and%20Embedded%20Derivatives) In May 2024, Arcadia sold the GoodWheat brand to Above Food for $3.7 million, receiving a $6.0 million promissory note. Above Food defaulted on the first principal payment due May 14, 2025, leading Arcadia to record a full reserve of $4.0 million principal plus accrued interest ($421,000) as of June 30, 2025, due to uncertainties regarding recovery. The contingent features of the promissory note were bifurcated as embedded derivatives, with an estimated fair value of $0 as of June 30, 2025 - Above Food defaulted on the first **$2.0 million principal payment** and accrued interest (approx. **$421,000**) on the **$6.0 million promissory note** due **May 14, 2025**[60](index=60&type=chunk) - Company recorded a **full reserve of $4.0 million principal** plus accrued interest (**$421,000**) for the Above Food note receivable as of **June 30, 2025**, due to unlikelihood of cash payments[61](index=61&type=chunk) - Approximately **2.7 million Prepayment Shares** of AFII common stock were issued to Arcadia, with an additional **800,000 shares** believed to be issuable[59](index=59&type=chunk) - Embedded derivatives related to the promissory note had an estimated **fair value of $0** as of **June 30, 2025**, down from **$250,000** at the transaction date[62](index=62&type=chunk) [Note 8. Consolidated Joint Venture](index=16&type=section&id=Note%208.%20Consolidated%20Joint%20Venture) Arcadia formed Archipelago Ventures Hawaii, LLC with Legacy Ventures Hawaii, LLC in 2019 to develop hemp-derived products. Due to regulatory challenges and market saturation, the cultivation activities of Archipelago were mutually agreed to be wound down in October 2021 - Archipelago Ventures Hawaii, LLC, a joint venture for hemp-derived products, was wound down in **October 2021** due to regulatory challenges and market saturation[64](index=64&type=chunk) [Note 9. Collaborative Arrangements](index=16&type=section&id=Note%209.%20Collaborative%20Arrangements) The Company previously had a collaborative arrangement with Corteva Agriscience for the research, development, and commercialization of its non-GMO RS durum wheat trait. This trait was sold to Corteva on May 14, 2024, for $4.0 million cash, with Arcadia retaining certain usage rights and recognizing a gain - Sold non-GMO RS durum wheat trait to Corteva on **May 14, 2024**, for **$4.0 million cash**, recognizing a gain[67](index=67&type=chunk) - Arcadia retained certain rights to use the RS durum wheat trait after the sale[67](index=67&type=chunk) [Note 10. Leases](index=17&type=section&id=Note%2010.%20Leases) The Company leases office space in Dallas, TX, and Sacramento, CA, and previously leased a facility in American Falls, Idaho, which was terminated in July 2024. Lease liabilities and right-of-use assets are recognized for leases with terms over 12 months | Leases (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Right of use asset | $10 | $137 |\n| Operating lease liability — current | $11 | $155 | - Operating lease cost decreased from **$507 thousand** (six months ended **June 30, 2024**) to **$129 thousand** (six months ended **June 30, 2025**)[70](index=70&type=chunk) - The facility lease in American Falls, Idaho, was terminated effective **July 2024**[69](index=69&type=chunk) [Note 11. Warrants and Options](index=18&type=section&id=Note%2011.%20Warrants%20and%20Options) The Company has both equity-classified common stock warrants and liability-classified preferred investment options outstanding. Equity warrants are exercisable at the holder's option until expiration, while liability options are adjusted to fair value at each balance sheet date due to early settlement provisions | Warrants/Options | Outstanding at December 31, 2024 | Outstanding at June 30, 2025 | | :--------------- | :------------------------------- | :--------------------------- | | Equity Classified Common Stock Warrants | 259,817 | 195,885 |\n| Liability Classified Preferred Investment Options | 823,618 | 823,618 | - Certain **May 2020** and **September 2019** equity warrants expired during the six months ended **June 30, 2025**[73](index=73&type=chunk) - The change in fair value of liability-classified preferred investment options resulted in a **loss of $548 thousand** for the three months ended **June 30, 2025**, and a **gain of $1.3 million** for the six months ended **June 30, 2025**[13](index=13&type=chunk)[141](index=141&type=chunk)[155](index=155&type=chunk) [Note 12. Stock-Based Compensation and Employee Stock Purchase Program](index=19&type=section&id=Note%2012.%20Stock-Based%20Compensation%20and%20Employee%20Stock%20Purchase%20Program) The Company operates under the 2015 Omnibus Equity Incentive Plan and an Employee Stock Purchase Plan (ESPP). The 2015 Plan terminated for future awards in May 2025, but 338,341 shares were reserved for issuance. Stock-based compensation is valued using the Black-Scholes model - The 2015 Omnibus Equity Incentive Plan terminated for future awards in **May 2025**, with **338,341 shares** reserved for issuance[77](index=77&type=chunk) - Unrecognized compensation cost related to unvested stock-based compensation grants was **$249 thousand** as of **June 30, 2025**, to be recognized over **0.9 years**[79](index=79&type=chunk) | Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options awards | $86 | $102 | $164 | $240 |\n| ESPP related compensation | $4 | $2 | $7 | $4 | [Note 13. Income Taxes](index=22&type=section&id=Note%2013.%20Income%20Taxes) The Company's effective tax rate was 0.00% for the three and six months ended June 30, 2025 and 2024, primarily due to a full valuation allowance on net deferred tax assets. The Archipelago joint venture underwent an IRS audit for the 2021 tax year, with adjustments pushed out to partners - Effective tax rate was **0.00%** for the three and six months ended **June 30, 2025** and **2024**, due to a full valuation allowance on net deferred tax assets[86](index=86&type=chunk) - IRS audit adjustments for the Archipelago joint venture's **2021 tax year** were accepted and pushed out to partners in **Q1 2025**, with **no expected penalties or interest** for Arcadia[88](index=88&type=chunk) [Note 14. Commitments and Contingencies](index=22&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) The Company is subject to legal proceedings, including a Proposition 65 complaint regarding BPA in coconut water containers, which it intends to vigorously defend. It also faces demand letters from purported stockholders concerning the Roosevelt Exchange Agreement. A contingent liability related to the 2005 Anawah acquisition, initially $5.0 million, was eliminated as of June 30, 2025, due to abandonment and transfer of remaining programs - Facing a Proposition 65 complaint alleging BPA exposure in coconut water containers, which the Company intends to vigorously defend[92](index=92&type=chunk) - Received demand letters from purported stockholders alleging deficiencies in the preliminary proxy statement for the Roosevelt Exchange Agreement[93](index=93&type=chunk) - The remaining **$2.0 million contingent liability** from the **2005 Anawah acquisition** was eliminated as of **June 30, 2025**, following the abandonment and transfer of the last two programs[95](index=95&type=chunk) [Note 15. Segment Reporting](index=25&type=section&id=Note%2015.%20Segment%20Reporting) The Company operates as one reportable segment, deriving revenue primarily from Zola coconut water sales. The Chief Executive Officer, as CODM, evaluates performance based on consolidated net (loss) income from continuing operations - Operates as a **single reportable segment**, with revenue primarily from Zola coconut water sales[98](index=98&type=chunk) - Net (loss) income from continuing operations was **$(4,458) thousand** for the three months ended **June 30, 2025**, compared to **$1,850 thousand** for the same period in **2024**[99](index=99&type=chunk) [Note 16. Net (Loss) Income per Share](index=25&type=section&id=Note%2016.%20Net%20(Loss)%20Income%20per%20Share) Basic and diluted net (loss) income per share are calculated based on net (loss) income attributable to common stockholders and weighted-average common shares outstanding, considering potentially dilutive securities | EPS Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic and diluted from continuing operations | $(3.26) | $1.36 | $(1.36) | $0.66 |\n| Net (loss) income per basic share | $(3.26) | $0.78 | $(1.36) | $(1.00) | | Potentially Dilutive Securities | June 30, 2025 | June 30, 2024 | | :------------------------------ | :------------ | :------------ | | Options to purchase common stock | 213,950 | 64,174 |\n| Warrants to purchase common stock | 195,885 | 261,466 |\n| Preferred investment options | 823,618 | 1,489,952 |\n| Total | 1,233,453 | 1,815,592 | [Note 17. Related-Party Transactions](index=26&type=section&id=Note%2017.%20Related-Party%20Transactions) The Company has related-party transactions with the John Sperling Foundation (JSF), which receives royalties from product sales or license payments involving intellectual property developed under research funding from Blue Horse Labs, Inc. Royalty fees due to JSF were $0 as of June 30, 2025, as product sales related to this IP ceased by December 31, 2024 - Royalty fees due to John Sperling Foundation (JSF) were **$0** as of **June 30, 2025**, down from **$30,000** at **December 31, 2024**[103](index=103&type=chunk) - Product sales related to intellectual property funded by Blue Horse Labs, Inc. ceased as of **December 31, 2024**, with no future royalty fees expected for JSF[104](index=104&type=chunk) [Note 18. Subsequent Events](index=26&type=section&id=Note%2018.%20Subsequent%20Events) Management has evaluated subsequent events through August 14, 2025, the date the financial statements were available for issuance, and no material subsequent events were disclosed beyond those already incorporated - Subsequent events evaluated through **August 14, 2025**, the financial statement issuance date[105](index=105&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key business developments, financial performance drivers, liquidity, and critical accounting estimates for the periods presented [Special Note Regarding Forward-Looking Statements](index=27&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) - Report contains forward-looking statements identified by words like "anticipate," "believe," "expect," etc., subject to risks and uncertainties[106](index=106&type=chunk) [Overview](index=27&type=section&id=Overview) Arcadia Biosciences, Inc. has transitioned its focus from wheat product development to consumer goods, primarily Zola coconut water, since 2021. Recent strategic activities include the sale of the GoodWheat brand and RS durum wheat trait in 2024, an agreement with Bioceres Crop Solutions Corp. for soy traits, and a significant business combination agreement with Roosevelt Resources LP, which will result in Roosevelt's limited partners owning 90% of Arcadia's common stock - Company's core business shifted to Zola coconut water products after acquiring Zola assets in **May 2021**[108](index=108&type=chunk) - Sold non-GMO Resistant Starch (RS) durum wheat trait to Corteva for **$4.0 million cash** on **May 14, 2024**[109](index=109&type=chunk) - Sold GoodWheat™ brand to Above Food Corp. for **$3.7 million** on **May 16, 2024**, reclassifying it as discontinued operations[110](index=110&type=chunk) - Entered a Securities Exchange Agreement with Roosevelt Resources LP on **December 4, 2024**, amended on **April 30, 2025**, where Roosevelt's limited partners will own **90% of Arcadia's common stock** post-closing[111](index=111&type=chunk) - Entered an agreement with Bioceres Crop Solutions Corp. on **March 28, 2025**, transferring soy traits to the Company and reduced gluten/oxidative stability patents to BIOX, resulting in a **$750,000 gain**[112](index=112&type=chunk) - Terminated a license agreement with Bioseed on **May 26, 2025**, eliminating a **$1.0 million contingent liability**[113](index=113&type=chunk) [Tariffs](index=28&type=section&id=Tariffs) Baseline tariffs imposed by the U.S. government went into effect on April 9, 2025, with additional country-specific tariffs delayed until August 2025. The Company is monitoring the situation and discussing mitigation strategies with partners due to the uncertain impact on its business - U.S. government baseline tariffs effective **April 9, 2025**; country-specific tariffs delayed until **August 2025**[114](index=114&type=chunk) - Company is monitoring tariff landscape and exploring mitigation strategies with business partners due to uncertain impact[114](index=114&type=chunk) [Our Products](index=29&type=section&id=Our%20Products) The Company's current product focus is Zola coconut water. It no longer retains effective commercialization rights or expects future royalties from its wheat-based intellectual property, including reduced gluten, oxidative stability, and resistant starch patents, following various agreements and transactions [Zola Coconut Water](index=29&type=section&id=Zola%20Coconut%20Water) - Zola coconut water is the Company's primary product, acquired in **May 2021**[115](index=115&type=chunk) - Zola is Non-GMO Project Verified, naturally hydrating, rich in electrolytes, and available in multiple flavors[115](index=115&type=chunk) [Agronomic Wheat Traits](index=29&type=section&id=Agronomic%20Wheat%20Traits) - Arcadia no longer retains effective commercialization rights or expects future license/royalty fees from its wheat-based intellectual property (reduced gluten, oxidative stability, resistant starch patents)[116](index=116&type=chunk) [Discontinued Operations](index=29&type=section&id=Discontinued%20Operations) The GoodWheat brand was exited and sold to Above Food, with its financial results now reported separately as discontinued operations in accordance with ASC 205-20 - GoodWheat brand exited and sold, with financial results reported as discontinued operations[117](index=117&type=chunk) [Components of Our Statements of Operations Data](index=29&type=section&id=Components%20of%20Our%20Statements%20of%20Operations%20Data) This section defines the key revenue and expense categories reported in the Company's statements of operations, including product revenues, various operating expenses, interest income, credit loss, other income, and changes in fair value of financial instruments [Revenues](index=29&type=section&id=Revenues) - Product revenues primarily from Zola coconut water sales; GLA oil sales ceased end of **2024**[118](index=118&type=chunk) [Operating Expenses](index=29&type=section&id=Operating%20Expenses) [Cost of revenues](index=29&type=section&id=Cost%20of%20revenues) - Primarily consists of Zola product and freight costs, and inventory adjustments[119](index=119&type=chunk) [Research and development expenses ("R&D")](index=29&type=section&id=Research%20and%20development%20expenses%20(%22R%26D%22)) - Consists of fees to product formulation consultants and milestone payments for in-licensed technologies, expensed as incurred[120](index=120&type=chunk) [Gain on sale of intangible assets](index=29&type=section&id=Gain%20on%20sale%20of%20intangible%20assets) - Represents gain from the sale of reduced gluten and oxidative stability patent portfolios in **March 2025**[121](index=121&type=chunk) [Impairment of property and equipment](index=30&type=section&id=Impairment%20of%20property%20and%20equipment) - Includes losses from tangible assets due to impairment or recoverability test charges[122](index=122&type=chunk) [Change in fair value of contingent consideration](index=30&type=section&id=Change%20in%20fair%20value%20of%20contingent%20consideration) - Gain from reduction of contingent liability due to abandonment, assignment, or transfer of previously accrued programs[123](index=123&type=chunk) [Selling, general and administrative expenses](index=30&type=section&id=Selling,%20general%20and%20administrative%20expenses) - Primarily includes employee costs, professional service fees, broker/sales commissions, and overhead costs[124](index=124&type=chunk) [Interest income](index=30&type=section&id=Interest%20income) - Derived from cash, cash equivalents, investments, and note receivable[125](index=125&type=chunk) [Credit loss](index=30&type=section&id=Credit%20loss) - Reserve established for the Above Food note receivable[126](index=126&type=chunk) [Other income](index=30&type=section&id=Other%20income) - Primarily gain from receipt of AFII common stock[127](index=127&type=chunk) [Change in the estimated fair value of common stock warrant and option liabilities](index=30&type=section&id=Change%20in%20the%20estimated%20fair%20value%20of%20common%20stock%20warrant%20and%20option%20liabilities) - Fair value remeasurement of liability-classified preferred investment options from financing transactions[128](index=128&type=chunk) [Net loss from discontinued operations](index=30&type=section&id=Net%20loss%20from%20discontinued%20operations) - Results of operations for the discontinued GoodWheat brand[129](index=129&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the Company's financial performance for the three and six months ended June 30, 2025, versus the same periods in 2024, explaining the drivers behind changes in revenues, operating expenses, and net income/loss [Comparison of the Three Months Ended June 30, 2025 and 2024](index=31&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Product Revenues | $1,455 | $1,306 | $149 | 11% |\n| Cost of Revenues | $824 | $633 | $191 | 30% |\n| Gain on sale of intangible assets | — | $(4,000) | $4,000 | (100)% |\n| Change in fair value of contingent consideration | $(1,000) | — | $(1,000) | 100% |\n| Selling, general and administrative | $2,123 | $2,683 | $(560) | (21)% |\n| Credit loss | $(4,489) | — | $(4,489) | (100)% |\n| Net (loss) income from continuing operations | $(4,458) | $1,850 | $(6,308) | (341)% |\n| Net (loss) income attributable to common stockholders | $(4,458) | $1,061 | $(5,519) | (520)% | - Zola revenues increased by **$280 thousand (24%)** due to increased distribution and sales volume[132](index=132&type=chunk) - **Credit loss of $4.5 million** recognized due to a reserve for the Above Food note receivable[139](index=139&type=chunk) - Other income increased by **$921 thousand (614%)** primarily from a gain on receipt of AFII common stock[140](index=140&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=33&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Product Revenues | $2,655 | $2,293 | $362 | 16% |\n| Cost of Revenues | $1,506 | $1,104 | $402 | 36% |\n| Gain on sale of intangible assets | $(750) | $(4,000) | $3,250 | (81)% |\n| Change in fair value of contingent consideration | $(2,000) | — | $(2,000) | 100% |\n| Selling, general and administrative | $3,861 | $4,745 | $(884) | (19)% |\n| Credit loss | $(4,489) | — | $(4,489) | (100)% |\n| Net (loss) income from continuing operations | $(1,859) | $903 | $(2,762) | (306)% |\n| Net (loss) income attributable to common stockholders | $(1,859) | $(1,362) | $(497) | 36% | - Zola revenues increased by **$846 thousand (47%)** due to increased distribution and sales volume[145](index=145&type=chunk) - Gain on sale of intangible assets was **$750 thousand** in **2025** (reduced gluten/oxidative stability patents) compared to **$4.0 million** in **2024** (RS durum wheat trait)[148](index=148&type=chunk) - Change in fair value of common stock warrant and option liabilities resulted in a **gain of $1.3 million** in **2025**, up from **$163 thousand** in **2024**[155](index=155&type=chunk) [Seasonality](index=34&type=section&id=Seasonality) The coconut water category, like other beverages, experiences seasonality, with sales volumes typically peaking during the second and third fiscal quarters due to warmer weather - Coconut water sales are seasonal, with highest volumes in **Q2 and Q3** due to warmer weather[157](index=157&type=chunk) [Liquidity & Capital Resources](index=34&type=section&id=Liquidity%20%26%20Capital%20Resources) The Company primarily funds operations through equity financings, product sales, and license agreements. As of June 30, 2025, cash and cash equivalents were $1.4 million. The default on the Above Food promissory note has materially impacted near-term cash resources, and substantial doubt exists regarding the Company's ability to continue as a going concern - Cash and cash equivalents were **$1.4 million** as of **June 30, 2025**[158](index=158&type=chunk) - Net cash used in operations was **$3.6 million** for the six months ended **June 30, 2025**, and **$9.6 million** for the twelve months ended **December 31, 2024**[158](index=158&type=chunk) - Above Food's default on the **$2.0 million principal payment** of the promissory note has materially impacted the Company's near-term cash resources[159](index=159&type=chunk) [Going Concern; Material Cash Requirements](index=36&type=section&id=Going%20Concern%3B%20Material%20Cash%20Requirements) The Company's existing cash and cash equivalents are insufficient to meet anticipated cash requirements for the next 12 months, raising substantial doubt about its ability to continue as a going concern. Additional funding is required, which may involve debt or equity financings, asset sales, or partner arrangements, with potential risks of dilution or operational restrictions. Failure to secure funding could lead to reduced spending, asset liquidation, or bankruptcy - Existing cash is insufficient for the next **12 months**, raising substantial doubt about the Company's ability to continue as a going concern[160](index=160&type=chunk) - Company will require additional funding in the near term; potential options include debt/equity financings, asset sales, or partner arrangements[161](index=161&type=chunk) - Failure to secure adequate funding could force reduced spending, asset liquidation, or dissolution/bankruptcy proceedings, potentially rendering common stock valueless[161](index=161&type=chunk)[162](index=162&type=chunk) [Liquidity](index=36&type=section&id=Liquidity) The Company's working capital surplus decreased from $6.68 million at December 31, 2024, to $5.74 million at June 30, 2025, reflecting a decrease in current assets and liabilities | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Current assets | $7,579 | $9,242 |\n| Current liabilities | $1,839 | $2,563 |\n| Working capital surplus | $5,740 | $6,679 | [Cash Flows](index=37&type=section&id=Cash%20Flows) The Company experienced a net decrease in cash and cash equivalents of $2.87 million for the six months ended June 30, 2025, primarily due to cash used in operating activities, partially offset by investing activities [Cash flows from operating activities](index=37&type=section&id=Cash%20flows%20from%20operating%20activities) - Net cash used in operating activities decreased to **$3.62 million** for the six months ended **June 30, 2025**, from **$5.67 million** in the same period of **2024**[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - Non-cash charges in **2025** included a **$1.3 million change** in fair value of common stock warrant and option liabilities, a **$2.0 million change** in fair value of contingent consideration, and a **$4.5 million credit loss**[165](index=165&type=chunk) [Cash flows from investing activities](index=37&type=section&id=Cash%20flows%20from%20investing%20activities) - Cash provided by investing activities was **$750 thousand** in **2025**, solely from the sale of intangible assets[167](index=167&type=chunk) - In **2024**, investing activities provided **$4.65 million**, including **$2.5 million** from investment sales and **$4.0 million** from the sale of the RS durum wheat trait[168](index=168&type=chunk) [Cash flows from financing activities](index=37&type=section&id=Cash%20flows%20from%20financing%20activities) - Cash provided by financing activities was **$5 thousand** for both six-month periods, entirely from ESPP purchases[169](index=169&type=chunk) [Off-Balance Sheet Arrangements](index=37&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company has not engaged in any off-balance sheet arrangements since its inception, other than Verdeca, which was disposed of in November 2020 - No off-balance sheet arrangements, except for Verdeca (disposed of in **November 2020**)[170](index=170&type=chunk) [Critical Accounting Estimates](index=37&type=section&id=Critical%20Accounting%20Estimates) Management's discussion and analysis relies on critical accounting estimates, including revenue recognition, determination of the provision for income taxes, and net realizable value of inventory, which involve significant judgment and assumptions - Critical accounting estimates include revenue recognition, income tax provision, and net realizable value of inventory[172](index=172&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is marked as "Not Required" in the report, indicating that the Company does not have material market risk disclosures to provide in this quarterly filing - **Not required for this filing**[173](index=173&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=39&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) - Disclosure controls and procedures were effective at the reasonable assurance level as of **June 30, 2025**[175](index=175&type=chunk) [Changes in Internal Control over Financial Reporting](index=39&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) - **No material changes** in internal control over financial reporting during the quarter ended **June 30, 2025**[176](index=176&type=chunk) [Part II — Other Information](index=40&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) [Item 1. Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The Company is subject to various legal proceedings in the ordinary course of business. For specific details, refer to Note 14 of the Condensed Consolidated Financial Statements - Refer to Note 14 for details on legal proceedings[177](index=177&type=chunk) [Item 1A. Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) Readers should carefully consider the risk factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, as well as additional unknown or immaterial risks, which could materially affect the business, financial condition, liquidity, or future results - Refer to Part I, "Item 1A. Risk Factors" in the Annual Report on Form 10-K for **December 31, 2024**, for a comprehensive discussion of risks[178](index=178&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the quarter ended June 30, 2025 - **None reported**[179](index=179&type=chunk) [Item 3. Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the quarter ended June 30, 2025 - **None reported**[180](index=180&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - **Not applicable**[181](index=181&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025 - **No director or officer adopted or terminated** Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in **Q2 2025**[182](index=182&type=chunk) [Item 6. Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to agreements, certifications, and XBRL documents - Includes First Amendment to Securities Exchange Agreement, Principal Executive/Financial Officer's Certifications (Sections 302 and 906), and Inline XBRL documents[184](index=184&type=chunk) [SIGNATURES](index=42&type=section&id=SIGNATURES) - Report signed by President and CEO Thomas J. Schaefer and CFO Mark Kawakami on **August 14, 2025**[188](index=188&type=chunk)

[Consolidated Balance Sheets](index=1&type=section&id=Consolidated%20Balance%20Sheets) Arcadia Biosciences, Inc. experienced a decrease in total assets and stockholders' equity by June 30, 2025, primarily due to reduced cash and noncurrent notes Key Balance Sheet Figures (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | % Change | | :-------------------------------- | :------------ | :---------------- | :----- | :------- | | Total Assets | $7,788 | $13,517 | $(5,729) | -42.38% | | Current Assets | $7,579 | $9,242 | $(1,663) | -18.00% | | Cash and cash equivalents | $1,376 | $4,242 | $(2,866) | -67.56% | | Short-term investments | $3,067 | — | $3,067 | N/A | | Note receivable — noncurrent, net | — | $3,966 | $(3,966) | -100.00% | | Total Liabilities | $3,255 | $7,294 | $(4,039) | -55.37% | | Common stock warrant and option liabilities | $1,416 | $2,731 | $(1,315) | -48.15% | | Total Stockholders' Equity | $4,533 | $6,223 | $(1,690) | -27.16% | | Accumulated deficit | $(280,737) | $(278,878) | $(1,859) | 0.67% | - The company's cash and cash equivalents significantly decreased by **67.56%** from **$4,242 thousand** at December 31, 2024, to **$1,376 thousand** at June 30, 2025[2](index=2&type=chunk) - A new line item, Short-term investments, appeared with **$3,067 thousand** as of June 30, 2025, which was not present at December 31, 2024[2](index=2&type=chunk) - The noncurrent note receivable, net of allowance for credit losses, was fully eliminated by June 30, 2025, from **$3,966 thousand** at December 31, 2024[2](index=2&type=chunk) [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=2&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) Arcadia Biosciences, Inc. reported a net loss for Q2 and H1 2025, primarily due to a significant credit loss and reduced gain on asset sales Key Operating Results (in thousands, except per share data): 3 Months Ended June 30, 2025 | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | % Change | | :------------------------------------------ | :--------------------------- | :--------------------------- | :----- | :------- | | Product Revenues | $1,455 | $1,306 | $149 | 11.41% | | Total Revenues | $1,455 | $1,306 | $149 | 11.41% | | Cost of Revenues | $824 | $633 | $191 | 30.17% | | Gain on sale of intangible assets | — | $(4,000) | $4,000 | -100.00% | | Change in fair value of contingent consideration | $(1,000) | — | $(1,000) | N/A | | Selling, general and administrative | $2,123 | $2,683 | $(560) | -20.87% | | (Loss) income from operations | $(501) | $1,980 | $(2,481) | -125.30% | | Credit loss | $(4,489) | — | $(4,489) | N/A | | Net (loss) income from continuing operations | $(4,458) | $1,850 | $(6,308) | -341.00% | | Net (loss) income attributable to common stockholders | $(4,458) | $1,061 | $(5,519) | -519.98% | | Basic and diluted EPS from continuing operations | $(3.26) | $1.36 | $(4.62) | -339.71% | Key Operating Results (in thousands, except per share data): 6 Months Ended June 30, 2025 | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :------------------------------------------ | :--------------------------- | :--------------------------- | :----- | :------- | | Product Revenues | $2,655 | $2,293 | $362 | 15.79% | | Total Revenues | $2,655 | $2,293 | $362 | 15.79% | | Cost of Revenues | $1,506 | $1,104 | $402 | 36.41% | | Gain on sale of intangible assets | $(750) | $(4,000) | $3,250 | -81.25% | | Change in fair value of contingent consideration | $(2,000) | — | $(2,000) | N/A | | Selling, general and administrative | $3,861 | $4,745 | $(884) | -18.63% | | (Loss) income from operations | $29 | $392 | $(363) | -92.60% | | Credit loss | $(4,489) | — | $(4,489) | N/A | | Net (loss) income from continuing operations | $(1,859) | $903 | $(2,762) | -305.87% | | Net (loss) income attributable to common stockholders | $(1,859) | $(1,362) | $(497) | 36.49% | | Basic and diluted EPS from continuing operations | $(1.36) | $0.66 | $(2.02) | -306.06% | - A significant credit loss of **$4,489 thousand** was recognized in both the three and six months ended June 30, 2025, which was not present in the prior year periods, contributing heavily to the net loss[4](index=4&type=chunk) - The gain on sale of intangible assets decreased substantially from **$(4,000) thousand** in Q2 2024 to zero in Q2 2025, and from **$(4,000) thousand** to **$(750) thousand** for the six-month period, indicating fewer large asset sales[4](index=4&type=chunk) - Selling, general and administrative expenses decreased by **20.87%** for the three-month period and **18.63%** for the six-month period, indicating cost control efforts[4](index=4&type=chunk) [Consolidated Statements of Cash Flows](index=3&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Arcadia Biosciences, Inc. experienced a net decrease in cash for H1 2025, driven by operating activities and reduced investing proceeds Key Cash Flow Figures (in thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | % Change | | :------------------------------------------ | :--------------------------- | :--------------------------- | :----- | :------- | | Net cash used in operating activities | $(3,621) | $(5,666) | $2,045 | -36.09% | | Net cash provided by investing activities | $750 | $4,647 | $(3,897) | -83.87% | | Net cash provided by financing activities | $5 | $5 | $0 | 0.00% | | Net decrease in cash and cash equivalents | $(2,866) | $(1,014) | $(1,852) | 182.64% | | Cash and cash equivalents — end of period | $1,376 | $5,504 | $(4,128) | -75.00% | - Net cash used in operating activities decreased by **36.09%** to **$(3,621) thousand** for the six months ended June 30, 2025, compared to **$(5,666) thousand** in the prior year, despite a higher net loss[6](index=6&type=chunk) - Investing activities provided significantly less cash, dropping by **83.87%** from **$4,647 thousand** in 2024 to **$750 thousand** in 2025, mainly due to lower proceeds from the sale of intangible assets and investments[6](index=6&type=chunk) - Noncash investing activities included the receipt of Above Food Ingredients, Inc. common stock with a fair value of **$3,067 thousand** in 2025[6](index=6&type=chunk)

Financial Performance - Arcadia Biosciences reported an 11% increase in total revenues for the second quarter of 2025, amounting to $1.455 million compared to $1.306 million in the same period of 2024 [3][5][7] - Zola® coconut water sales drove this revenue growth, with a 24% increase, contributing $280,000 to the total revenue in Q2 2025 [3][8] - For the first half of 2025, total revenues increased by 16% to $2.655 million, with Zola revenues rising by 47% [9] Operating Expenses - Total operating expenses for Q2 2025 were $1.956 million, a significant increase compared to the previous year, primarily due to higher costs associated with Zola coconut water [5][10] - Cost of revenues for Zola increased by 30% in Q2 2025, reflecting a $191,000 rise [10] - SG&A expenses decreased by $560,000 in Q2 2025 compared to the same period in 2024, indicating improved operational efficiency [12] Net Income and Loss - The net loss attributable to common stockholders for Q2 2025 was $4.458 million, a significant decline from a net income of $1.061 million in Q2 2024, largely due to a $4.5 million credit loss related to a note receivable [17][19] - For the first half of 2025, the net loss attributable to common stockholders was $1.9 million, compared to a loss of $1.4 million in the same period of 2024 [19] Strategic Developments - Arcadia received 2.7 million shares of stock in Above Food Ingredients Inc. as part of a repayment related to the sale of GoodWheat™ assets [4][15] - The company has eliminated $1 million in contingent liabilities, contributing to a total of $2 million in liabilities removed year-to-date [4] Business Combination - The pending business combination with Roosevelt Resources is progressing, with an amendment filed to the initial Form S-4 registration statement to address SEC comments and provide updated financial information [5][20]

Group 1: HilleVax, Inc. - HilleVax will be acquired by XOMA Royalty Corporation for $1.95 in cash per share plus one non-transferable contingent value right (CVR) [2] - The investigation focuses on whether the HilleVax Board breached its fiduciary duties by failing to conduct a fair process and whether the consideration provides fair value to shareholders [2] Group 2: Steelcase Inc. - Steelcase will be acquired by HNI Corporation for $7.20 in cash and 0.2192 shares of HNI common stock for each share of Steelcase [4] - The implied per share purchase price is $18.30 based on HNI's closing share price of $50.62 on August 1, 2025 [4] - The investigation concerns whether the Steelcase Board breached its fiduciary duties by failing to conduct a fair process and whether the consideration provides fair value to shareholders [4] Group 3: LAVA Therapeutics N.V. - LAVA will be acquired by XOMA Royalty Corporation for between $1.16 and $1.24 per share in cash, plus a non-transferable CVR [6] - The cash amount consists of a base price of $1.16 per share and an additional amount of up to $0.08 per share [6] - The investigation focuses on whether the LAVA Board breached its fiduciary duties by failing to conduct a fair process and whether the consideration provides fair value to shareholders [6] Group 4: Arcadia Biosciences, Inc. - Arcadia will be acquired by Roosevelt Resources LP, with current equity owners of Roosevelt and Arcadia shareholders expected to own approximately 90% and 10% of the combined company, respectively [8] - The investigation concerns whether the Arcadia Board breached its fiduciary duties by failing to conduct a fair process and the potential dilution of shareholders in the combined company [8]

Financial Data and Key Metrics Changes - In Q1 2025, total revenues were approximately $1,200,000, representing a 22% increase compared to the same period last year [16] - Zola revenues increased 90% year over year, driven by new distribution gains [4][17] - The cost of revenues in Q1 was approximately $680,000, a 45% increase compared to the same period last year, with a gross margin rate of 43% [17] - Selling, general and administrative costs were $1,700,000, down from $2,100,000 in Q1 2024 [19] Business Line Data and Key Metrics Changes - Zola coconut water sales increased 90% year over year, with a 70% increase in new distribution [4][5] - Sell-through data for Zola increased 76% during the thirteen weeks ended March 29, 2025, compared to a 24% growth in the coconut water category [6] - The company has successfully launched new flavors, with pineapple sales exceeding last year's total in the first four months of 2025 [7] Market Data and Key Metrics Changes - Coconut water continues to outpace the growth of many beverage categories, driven by consumer preferences for healthier options [6] - The company has replenished inventory ahead of the beverage season, mitigating potential impacts from recently announced tariffs [9] Company Strategy and Development Direction - The company is focused on expanding Zola's market presence and monetizing its intellectual property [5][10] - Arcadia is exiting its legacy ag tech business and has made significant progress in this area, including the return of certain patents [10][12] - The pending business combination with Roosevelt Resources is on track to be completed by the end of summer 2025 [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued momentum from 2024 into 2025, with strong sales growth and a healthy pipeline of opportunities [35] - The company anticipates that the impact of tariffs will be minimal due to identified cost-saving opportunities [9] - Management highlighted the importance of maintaining gross margins above 30% for nine consecutive quarters [35] Other Important Information - The company ended Q1 with $3,200,000 in cash, down from $4,200,000 at the start of the year, reflecting ongoing M&A expenses [20] - The company expects to receive approximately $2,500,000 in cash as the first repayment of principal and interest from a note receivable [21] Q&A Session Summary Question: Can you quantify any successes in expanding the Zola distribution pipeline? - Management indicated that the pipeline is about half of the current distribution, which is approximately 3,500 stores [27] Question: Will the momentum in new accounts impact 2025 financials or be more of a 2026 event? - Management expects that most awards will have an impact on 2025 [28] Question: Is there any commercial value in the remaining patent from the legacy ag biotech business? - Management noted that while there is potential commercial value, it is licensed to a third party who is two years away from commercialization [30] Question: Confirmation on the $2,500,000 initial payment for the note receivable? - Management confirmed that the payment is scheduled for receipt in Q2 [31]

Financial Data and Key Metrics Changes - In Q1 2025, total revenues were approximately $1.2 million, representing a 22% increase year over year [16] - Zola revenues increased 90% compared to the same period last year, driven by a 70% increase in new distribution [4][17] - The cost of revenues in Q1 was approximately $680,000, a 45% increase year over year, with a gross margin rate of 43% compared to 52% in Q1 2024 [17] - Selling, general and administrative costs were $1.7 million, down from $2.1 million in Q1 2024 [19] Business Line Data and Key Metrics Changes - Zola coconut water sales increased 90% year over year, with sell-through data showing a 76% increase [4][6] - The company has successfully launched new flavors, with pineapple sales in the first four months of 2025 surpassing total sales from the previous year [7] - The company has a healthy pipeline and is in discussions with new customers and distributors representing over 50% of its current customer base [8] Market Data and Key Metrics Changes - The coconut water category grew 24% during the same period, indicating Zola's growth is significantly outpacing the overall market [6] - Zola's market presence is expected to expand, with new customer accounts already won in Q2 [8] Company Strategy and Development Direction - The company is focused on monetizing its intellectual property and exiting its legacy ag tech business [10][12] - A pending business combination with Roosevelt Resources is on track to be completed by the end of summer 2025, with a fixed equity share ratio established [13][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the continued momentum from 2024 into 2025, with strong sales growth and a robust pipeline of opportunities [35] - The company does not anticipate significant impacts from recently announced tariffs due to proactive inventory management and cost-saving measures [9] Other Important Information - The company completed a transaction to regain rights to certain patents, eliminating a $1 million contingent liability from its balance sheet [12][19] - Cash at the end of Q1 was $3.2 million, down from $4.2 million at the start of the year, reflecting ongoing M&A expenses [20] Q&A Session Summary Question: Can you quantify any successes in expanding the distribution pipeline for Zola? - Management indicated that the pipeline is about half of the current distribution, which is approximately 3,500 stores [27] Question: Will the momentum in distribution be reflected in 2025 financials? - Management expects that most of the awarded accounts will impact 2025 financials, despite a potential lag in product placement [28] Question: Is there any commercial value in the remaining patent from the legacy ag biotech business? - There is potential commercial value, but it is licensed to a third party, which is two years away from commercialization [29] Question: When is the expected receipt of the $2.5 million initial payment for the note receivable? - Management confirmed that the payment is scheduled for receipt in Q2 [31]

[Part I — Financial Information (Unaudited)](index=2&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information%20%28Unaudited%29) This section presents Arcadia Biosciences, Inc.'s unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2025 [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Arcadia Biosciences, Inc.'s unaudited condensed consolidated financial statements, including the balance sheets, statements of operations and comprehensive income (loss), statements of stockholders' equity, and statements of cash flows for the quarter ended March 31, 2025, along with detailed notes explaining significant accounting policies, recent transactions, and financial positions [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (In thousands) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Cash and cash equivalents | $3,159 | $4,242 | | Total current assets | $8,846 | $9,242 | | Total assets | $12,990 | $13,517 | | Total current liabilities | $2,216 | $2,563 | | Common stock warrant and option liabilities | $869 | $2,731 | | Total liabilities | $4,085 | $7,294 | | Total stockholders' equity | $8,905 | $6,223 | - Total assets decreased by **$527,000** from December 31, 2024, to March 31, 2025, primarily due to a decrease in cash and cash equivalents[9](index=9&type=chunk) - Total liabilities significantly decreased by **$3,209,000**, mainly driven by a reduction in common stock warrant and option liabilities[9](index=9&type=chunk) - Total stockholders' equity increased by **$2,682,000**, reflecting the net income for the period[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) This section outlines the company's financial performance over a period, including revenues, expenses, and net income or loss Condensed Consolidated Statements of Operations Highlights (In thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Total revenues | $1,200 | $987 | | Total operating expenses | $670 | $2,575 | | Income (loss) from continuing operations | $530 | $(1,588) | | Net income (loss) from continuing operations | $2,599 | $(947) | | Net loss from discontinued operations | $— | $(1,476) | | Net income (loss) attributable to common stockholders | $2,599 | $(2,423) | | Net income (loss) per basic share | $1.90 | $(1.78) | | Net income (loss) per diluted share | $1.90 | $(1.78) | - Total revenues increased by **22%** to **$1.2 million** for the three months ended March 31, 2025, compared to **$987,000** in the prior year period[13](index=13&type=chunk) - The company reported a net income of **$2.6 million** for the three months ended March 31, 2025, a significant improvement from a net loss of **$2.4 million** in the same period last year[13](index=13&type=chunk) - Basic and diluted EPS improved to **$1.90** for the three months ended March 31, 2025, from a loss of **$1.78** in the prior year, largely due to a gain on sale of intangible assets and a change in fair value of contingent consideration[13](index=13&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in the company's equity accounts, reflecting transactions with owners and comprehensive income Condensed Consolidated Statements of Stockholders' Equity Highlights (In thousands, except share data) | Metric | Balance at Dec 31, 2024 | Issuance of shares (ESPP) | Stock-based compensation | Net income | Balance at Mar 31, 2025 | | :----------------------- | :---------------------- | :------------------------ | :----------------------- | :--------- | :---------------------- | | Common Stock (Shares) | 1,364,940 | 2,100 | — | — | 1,367,040 | | Common Stock (Amount) | $65 | $— | $— | $— | $65 | | Additional Paid-In Capital | $285,036 | $5 | $78 | $— | $285,119 | | Accumulated Deficit | $(278,878) | $— | $— | $2,599 | $(276,279) | | Total Stockholders' Equity | $6,223 | $5 | $78 | $2,599 | $8,905 | - Total stockholders' equity increased from **$6.2 million** at December 31, 2024, to **$8.9 million** at March 31, 2025, primarily due to net income of **$2.6 million**[15](index=15&type=chunk) - The accumulated deficit decreased by **$2.6 million**, reflecting the net income reported for the quarter[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company across operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (In thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(1,588) | $(3,210) | | Net cash provided by investing activities | $500 | $4 | | Net cash provided by financing activities | $5 | $5 | | Net decrease in cash and cash equivalents | $(1,083) | $(3,201) | | Cash and cash equivalents — end of period | $3,159 | $3,317 | - Net cash used in operating activities decreased to **$1.6 million** for the three months ended March 31, 2025, from **$3.2 million** in the prior year period, indicating improved operational cash management[18](index=18&type=chunk) - Investing activities provided **$500,000** in cash, primarily from the sale of intangible assets, a significant increase from **$4,000** in the prior year[18](index=18&type=chunk) - Cash and cash equivalents at the end of the period were **$3.2 million**, down from **$4.2 million** at the beginning of the period[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements [Note 1. Description of Business and Basis of Presentation](index=7&type=section&id=Note%201.%20Description%20of%20Business%20and%20Basis%20of%20Presentation) This note describes the company's business, recent strategic shifts, and the foundational principles used in preparing the financial statements - Arcadia Biosciences, Inc. (the 'Company') focuses on consumer goods, primarily Zola coconut water products, after shifting from wheat-based products[22](index=22&type=chunk) - The Company entered an agreement with Bioceres Crop Solutions Corp. (BIOX) on March 28, 2025, transferring certain soy traits and receiving **$750,000**, while also transferring reduced gluten and oxidative stability patents to BIOX[23](index=23&type=chunk) - Arcadia is pursuing a business combination with Roosevelt Resources LP, where Roosevelt's limited partners and general partner will own **90%** of Arcadia's common stock post-closing[24](index=24&type=chunk) - The Company sold its GoodWheat™ brand to Above Food Corp. for **$3.7 million** on May 16, 2024, and its non-GMO Resistant Starch durum wheat trait to Corteva Agriscience for **$4.0 million** on May 14, 2024, monetizing intellectual property and exiting certain wheat-related operations[25](index=25&type=chunk)[26](index=26&type=chunk) - As of March 31, 2025, the Company had an accumulated deficit of **$276.3 million** and cash and cash equivalents of **$3.2 million**, raising substantial doubt about its ability to continue as a going concern for the next 12 months[33](index=33&type=chunk)[34](index=34&type=chunk) [Note 2. Recent Accounting Pronouncements](index=9&type=section&id=Note%202.%20Recent%20Accounting%20Pronouncements) This note outlines recently issued accounting standards and their potential impact on the company's financial reporting - The FASB issued ASU No. 2023-09, effective for fiscal years beginning after December 15, 2024, requiring additional income tax disclosures, which the Company is currently evaluating[36](index=36&type=chunk) - ASU No. 2024-03, effective for annual reporting periods beginning after December 15, 2026, mandates quantitative disclosures for employee compensation, selling expenses, and inventory purchases, with the Company evaluating its impact[37](index=37&type=chunk) [Note 3. Discontinued Operations](index=9&type=section&id=Note%203.%20Discontinued%20Operations) This note details the financial results and impact of business segments that the company has exited or plans to exit - The GoodWheat brand was sold on May 16, 2024, and its operations ceased during the second quarter of 2024, leading to its classification as a discontinued operation[38](index=38&type=chunk)[39](index=39&type=chunk) Net Loss from Discontinued Operations (In thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Product revenue | $— | $268 | | Cost of revenues | $— | $(349) | | Research and development | $— | $(267) | | Selling, general and administrative | $— | $(1,126) | | Net loss from discontinued operations | $— | $(1,476) | [Note 4. Inventory](index=10&type=section&id=Note%204.%20Inventory) This note provides details on the company's inventory valuation methods and composition - Inventories are stated at the lower of cost or net realizable value, with adjustments made for deterioration, obsolescence, or changes in price levels[41](index=41&type=chunk) Inventories, Net (In thousands) | Category | March 31, 2025 | December 31, 2024 | | :--------------- | :------------- | :---------------- | | Raw materials | $420 | $289 | | Finished goods | $865 | $615 | | Total Inventories | $1,285 | $904 | [Note 5. Property and Equipment, Net](index=10&type=section&id=Note%205.%20Property%20and%20Equipment%2C%20Net) This note presents the company's property and equipment, net of accumulated depreciation and amortization Property and Equipment, Net (In thousands) | Category | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Software and computer equipment | $291 | $291 | | Furniture and fixtures | $32 | $32 | | Leasehold improvements | $1,584 | $1,584 | | Property and equipment, gross | $1,907 | $1,907 | | Less: accumulated depreciation and amortization | $(1,879) | $(1,866) | | Property and equipment, net | $28 | $41 | - Depreciation expense for the three months ended March 31, 2025, was **$13,000**, a decrease from **$51,000** in the same period of 2024[43](index=43&type=chunk) [Note 6. Investments and Fair Value Instruments](index=10&type=section&id=Note%206.%20Investments%20and%20Fair%20Value%20Instruments) This note describes the company's investments and financial instruments measured at fair value, including valuation methodologies Cash Equivalents at Fair Value (In thousands) | Category | March 31, 2025 | December 31, 2024 | | :--------------- | :------------- | :---------------- | | Money market funds | $2,034 | $2,757 | - The Company's Level 3 liabilities include a contingent liability from the Anawah acquisition and preferred investment options, valued using unobservable inputs and the Black-Scholes Model, respectively[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) Changes in Level 3 Liabilities (In thousands) | Category | Balance as of Dec 31, 2024 | Change in fair value | Balance as of Mar 31, 2025 | | :-------------------------------- | :------------------------- | :------------------- | :------------------------- | | March 2023 Options - Series A | $2,285 | $(1,562) | $723 | | March 2023 Placement Agent Options | $90 | $(59) | $31 | | August 2022 Options | $349 | $(236) | $113 | | August 2022 Placement Agent Options | $7 | $(5) | $2 | | Note Receivable Bifurcated Derivatives | $250 | $— | $250 | | Contingent Liabilities | $2,000 | $(1,000) | $1,000 | | Total | $4,981 | $(2,862) | $2,119 | [Note 7. Note Receivable and Embedded Derivatives](index=13&type=section&id=Note%207.%20Note%20Receivable%20and%20Embedded%20Derivatives) This note details the company's note receivable, including its terms, discount, and any bifurcated embedded derivatives - In connection with the GoodWheat brand sale, Arcadia received a **$6.0 million** promissory note from Above Food, accruing interest at the Wall Street Journal prime rate, with principal payments due over three years[53](index=53&type=chunk) - The promissory note was recorded at a **$545,000** discount, amortized over its term, and generated **$69,000** in discount amortization and **$111,000** in interest income for the three months ended March 31, 2025[55](index=55&type=chunk) - Contingent features of the promissory note were bifurcated as embedded derivatives, with an estimated fair value of **$250,000** as of March 31, 2025, reported as a noncurrent note receivable[56](index=56&type=chunk) [Note 8. Consolidated Joint Venture](index=13&type=section&id=Note%208.%20Consolidated%20Joint%20Venture) This note provides information on the company's joint venture, including its purpose and current status - Arcadia and Legacy Ventures Hawaii, LLC formed Archipelago Ventures Hawaii, LLC in 2019 to develop and commercialize hemp-derived products[57](index=57&type=chunk) - In October 2021, the cultivation activities of Archipelago were mutually agreed to be wound down due to regulatory challenges and a saturated hemp market[58](index=58&type=chunk) [Note 9. Collaborative Arrangements](index=13&type=section&id=Note%209.%20Collaborative%20Arrangements) This note describes the company's collaborative agreements, including terms, asset sales, and revenue recognition - The Company had a collaborative arrangement with Corteva Agriscience for the research, development, and commercialization of its non-GMO RS durum wheat trait in North America[59](index=59&type=chunk) - On May 14, 2024, Arcadia sold its RS durum wheat trait to Corteva for **$4.0 million** in cash, recognizing a gain of the same amount as the trait had no carrying value[61](index=61&type=chunk) [Note 10. Leases](index=15&type=section&id=Note%2010.%20Leases) This note details the company's lease assets and liabilities, including lease terms and associated costs Lease Assets and Liabilities (In thousands) | Category | March 31, 2025 | December 31, 2024 | | :---------------- | :------------- | :---------------- | | Operating lease assets | $19 | $137 | | Operating lease liability — current | $21 | $155 | Net Lease (Income) Cost (In thousands) | Lease Cost | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :---------------- | :-------------------------------- | :-------------------------------- | | Operating lease cost | $119 | $265 | | Short term lease cost | $3 | $3 | | Sublease income | $(143) | $(121) | | Net lease (income) cost | $(21) | $147 | - The weighted-average remaining lease term was **0.5 years** as of March 31, 2025, with a weighted-average discount rate of **6.5%**[64](index=64&type=chunk) [Note 11. Warrants and Options](index=16&type=section&id=Note%2011.%20Warrants%20and%20Options) This note provides information on the company's outstanding equity and liability classified warrants and options Equity Classified Common Stock Warrants Outstanding | Warrant Type | Outstanding at Dec 31, 2024 | Exercised during Q1 2025 | Outstanding at Mar 31, 2025 | | :-------------------------------- | :-------------------------- | :----------------------- | :-------------------------- | | March 2023 Pre-Funded Warrants | — | — | — | | December 2022 Service and Performance Warrants | 1,000 | — | 1,000 | | October 2022 Service and Performance Warrants | 1,000 | — | 1,000 | | January 2021 Placement Agent Warrants | 9,846 | — | 9,846 | | December 2020 Warrants | 16,367 | — | 16,367 | | December 2020 Warrants | 49,100 | — | 49,100 | | December 2020 Placement Agent Warrants | 3,274 | — | 3,274 | | July 2020 Warrants | 16,036 | — | 16,036 | | July 2020 Placement Agent Warrants | 802 | — | 802 | | May 2020 Warrants | 9,946 | — | 9,946 | | May 2020 Warrants | 24,863 | — | 24,863 | | May 2020 Placement Agent Warrants | 1,741 | — | 1,741 | | January 2021 Warrants | 7,831 | — | 7,831 | | January 2021 Warrants | 90,629 | — | 90,629 | | September 2019 Warrants | 9,892 | (9,892) | — | | September 2019 Warrants | 6,594 | (6,594) | — | | June 2019 Warrants | 10,896 | (10,896) | — | | Total | 259,817 | (27,382) | 232,435 | - Certain September 2019 and June 2019 warrants expired during the three months ended March 31, 2025, reducing the total outstanding equity-classified warrants[67](index=67&type=chunk)[68](index=68&type=chunk) Liability Classified Preferred Investment Options Outstanding | Option Type | Outstanding at Dec 31, 2024 | Exercised during Q1 2025 | Outstanding at Mar 31, 2025 | | :-------------------------------- | :-------------------------- | :----------------------- | :-------------------------- | | March 2023 Options - Series A | 666,334 | — | 666,334 | | March 2023 Placement Agent Options | 33,317 | — | 33,317 | | August 2022 Options | 118,063 | — | 118,063 | | August 2022 Placement Agent Options | 5,904 | — | 5,904 | | Total | 823,618 | — | 823,618 | - The liability-classified preferred investment options, including those from March 2023 Private Placement and August 2022 Registered Direct offerings, are adjusted to fair value at each balance sheet date, with changes recorded in the statements of operations[70](index=70&type=chunk) [Note 12. Stock-Based Compensation and Employee Stock Purchase Program](index=17&type=section&id=Note%2012.%20Stock-Based%20Compensation%20and%20Employee%20Stock%20Purchase%20Program) This note details the company's stock-based compensation plans and employee stock purchase program, including related expenses - The Company operates under the 2006 Stock Plan and the 2015 Omnibus Equity Incentive Plan, with **147,038 shares** available for future grant under the 2015 Plan as of March 31, 2025[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) Stock Option Information | Metric | As of March 31, 2025 | | :-------------------------------- | :------------------- | | Outstanding Options (Shares) | 191,511 | | Weighted Average Exercise Price | $14.92 | | Vested and Expected to Vest (Shares) | 177,989 | | Exercisable (Shares) | 29,741 | - Unrecognized compensation cost related to unvested stock-based grants was **$251,000** as of March 31, 2025, to be recognized over a weighted-average remaining period of **1.0 years**[75](index=75&type=chunk) - Stock-based compensation expense was **$78,000** for the three months ended March 31, 2025, down from **$138,000** in the prior year[78](index=78&type=chunk) - The Employee Stock Purchase Plan (ESPP) allows eligible employees to purchase shares at a discount, with **1,108 shares** reserved for future issuance as of March 31, 2025[79](index=79&type=chunk) [Note 13. Income Taxes](index=19&type=section&id=Note%2013.%20Income%20Taxes) This note explains the company's income tax provisions, effective tax rate, and any tax-related contingencies - The Company's effective tax rate was **0.00%** for the three months ended March 31, 2025, and 2024, primarily due to a full valuation allowance on net deferred tax assets[81](index=81&type=chunk) - The Archipelago joint venture was selected for an IRS audit for the 2021 tax year, with the Company accepting adjustments and submitting push-out election forms in Q1 2025, expecting no penalties or interest[83](index=83&type=chunk) [Note 14. Commitments and Contingencies](index=19&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) This note discloses the company's significant commitments, legal proceedings, and contingent liabilities - The Company is involved in a legal proceeding related to Proposition 65, alleging BPA exposure in coconut water containers, and intends to vigorously defend against the claims[87](index=87&type=chunk) - Several demand letters have been received from purported stockholders regarding alleged deficiencies in the preliminary proxy statement for the Roosevelt Exchange Agreement, which the Company believes are without merit[88](index=88&type=chunk) - A contingent liability related to the 2005 Anawah acquisition was reduced to **$1.0 million** as of March 31, 2025, following the abandonment of one of the two remaining development programs[90](index=90&type=chunk) [Note 15. Segment Reporting](index=21&type=section&id=Note%2015.%20Segment%20Reporting) This note provides information on the company's operating segments and how performance is evaluated by management - The Company operates as a single operating and reportable segment, primarily deriving revenue from the sale of Zola coconut water[93](index=93&type=chunk) - The Chief Executive Officer, as the chief operating decision maker (CODM), evaluates performance based on consolidated net income (loss) from continuing operations[93](index=93&type=chunk) Segment Operations Highlights (In thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Total revenues | $1,200 | $987 | | Net income (loss) from continuing operations | $2,599 | $(947) | [Note 16. Net Income (Loss) per Share](index=22&type=section&id=Note%2016.%20Net%20Income%20%28Loss%29%20per%20Share) This note presents the calculation of basic and diluted net income or loss per share for the reporting periods Net Income (Loss) per Share (Basic and Diluted) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net income (loss) attributable to common stockholders | $2,599 | $(2,423) | | Weighted average common shares outstanding (Basic) | 1,366,060 | 1,361,657 | | Basic net income (loss) per share | $1.90 | $(1.78) | | Weighted average common shares outstanding (Diluted) | 1,366,203 | 1,361,657 | | Diluted net income (loss) per share | $1.90 | $(1.78) | - Basic and diluted net income per share significantly improved to **$1.90** for the three months ended March 31, 2025, compared to a loss of **$1.78** in the prior year, reflecting the Company's return to profitability[97](index=97&type=chunk) [Note 17. Related-Party Transactions](index=22&type=section&id=Note%2017.%20Related-Party%20Transactions) This note discloses transactions between the company and its related parties, including royalty agreements - The Company has related-party transactions with Moral Compass Corporation (MCC) and the John Sperling Foundation (JSF), with JSF receiving single-digit royalties from product sales or license payments involving intellectual property developed under BHL research funding[98](index=98&type=chunk)[99](index=99&type=chunk) - Royalty fees due to JSF were **$30,000** as of March 31, 2025, and December 31, 2024, with no future royalty fees expected as product sales related to this intellectual property ceased as of December 31, 2024[99](index=99&type=chunk)[100](index=100&type=chunk) [Note 18. Subsequent Events](index=23&type=section&id=Note%2018.%20Subsequent%20Events) This note reports significant events that occurred after the balance sheet date but before the financial statements were issued - On April 30, 2025, the Exchange Agreement with Roosevelt Resources LP was amended, extending the termination date to August 15, 2025, and fixing the number of shares issuable to Limited Partners at **90%** of outstanding common stock post-closing[101](index=101&type=chunk) - On May 1, 2025, Arcadia delivered a notice to Above Food Corp. to require the issuance of approximately **3.5 million** publicly traded shares of Above Food Ingredients Inc. (AFII) common stock, which will constitute a prepayment of the final **$2.0 million** principal installment of the promissory note[102](index=102&type=chunk)[103](index=103&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations for the three months ended March 31, 2025, compared to the same period in 2024. It covers key financial metrics, recent strategic transactions, liquidity, capital resources, and critical accounting estimates [Special Note Regarding Forward-Looking Statements](index=24&type=section&id=Special%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions readers that the report contains forward-looking statements subject to inherent risks and uncertainties - The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projections[104](index=104&type=chunk) [Overview](index=24&type=section&id=Overview) This section provides a high-level summary of the company's business, strategic shifts, and key transactions - Arcadia has transitioned its focus to consumer goods, primarily Zola coconut water products, leveraging its science-based approach[106](index=106&type=chunk) - Key strategic transactions include the sale of the non-GMO Resistant Starch durum wheat trait to Corteva for **$4.0 million** and the GoodWheat™ brand to Above Food for **$3.7 million** in May 2024[107](index=107&type=chunk)[108](index=108&type=chunk) - The Company entered a Securities Exchange Agreement with Roosevelt Resources LP in December 2024, which, upon closing, will result in Roosevelt's limited partners owning **90%** of Arcadia's common stock[109](index=109&type=chunk) - An agreement with Bioceres Crop Solutions Corp. (BIOX) in March 2025 involved the transfer of soy traits to Arcadia and the sale of Arcadia's reduced gluten and oxidative stability patents to BIOX for **$750,000**[111](index=111&type=chunk) [Our Products](index=26&type=section&id=Our%20Products) This section describes the company's primary product offerings and their market positioning - Zola Coconut Water is the Company's primary product, sourced from Thailand, offering natural hydration and electrolytes, and is Non-GMO Project Verified[113](index=113&type=chunk) - Arcadia no longer retains effective commercialization rights to its resistant starch portfolio of patents and does not expect future license or royalty fees from wheat-based intellectual property[114](index=114&type=chunk) [Discontinued Operations (MD&A)](index=26&type=section&id=Discontinued%20Operations%20%28MD%26A%29) This section discusses the financial impact and status of operations that the company has exited - The GoodWheat brand has been exited and its financial results are reported as discontinued operations for all periods presented[115](index=115&type=chunk) [Components of Our Statements of Operations Data](index=28&type=section&id=Components%20of%20Our%20Statements%20of%20Operations%20Data) This section explains the key revenue and expense categories within the company's statements of operations - Product revenues primarily consist of sales of Zola and GLA products, recognized upon transfer of control to distributors[116](index=116&type=chunk) - Cost of revenues mainly relates to Zola products, including product and freight costs, and inventory adjustments[117](index=117&type=chunk) - Research and development expenses are expensed as incurred, primarily consisting of fees to product formulation consultants[118](index=118&type=chunk) - Selling, general and administrative expenses include employee costs, professional service fees, and overhead[122](index=122&type=chunk) - Changes in fair value of common stock warrant and option liabilities reflect the remeasurement of liabilities from financing transactions[125](index=125&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing current period results to prior periods Results of Operations Comparison (Three Months Ended March 31, In thousands) | Metric | 2025 | 2024 | $ Change | % Change | | :------------------------------------------------ | :--- | :--- | :------- | :------- | | Product revenues | $1,200 | $987 | $213 | 22% | | Cost of revenues | $682 | $471 | $211 | 45% | | Research and development | $— | $6 | $(6) | (100)% | | Gain on sale of intangible assets | $(750) | $— | $(750) | 100% | | Change in fair value of contingent consideration | $(1,000) | $— | $(1,000) | 100% | | Selling, general and administrative | $1,738 | $2,062 | $(324) | (16)% | | Net income (loss) from continuing operations | $2,599 | $(947) | $3,546 | (374)% | | Net loss from discontinued operations | $— | $(1,476) | $1,476 | (100)% | | Net income (loss) attributable to common stockholders | $2,599 | $(2,423) | $5,022 | (207)% | - Product revenues increased by **22%** due to a **90%** increase in Zola coconut water sales volume, with no price increases[128](index=128&type=chunk) - Operating expenses decreased by **74%**, primarily due to a **$750,000** gain on sale of intangible assets and a **$1.0 million** gain from the change in fair value of contingent consideration[127](index=127&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - Net income from continuing operations significantly improved to **$2.6 million** from a loss of **$947,000** in the prior year, driven by gains and reduced SG&A expenses[127](index=127&type=chunk) [Seasonality](index=32&type=section&id=Seasonality) This section describes how seasonal factors influence the company's sales volumes and financial performance - Sales volumes for coconut water products are typically highest during the second and third fiscal quarters due to warmer weather[139](index=139&type=chunk) [Liquidity & Capital Resources](index=32&type=section&id=Liquidity%20%26%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations and fund operations - The Company's operations have been funded primarily through equity financings and proceeds from product sales and license agreements[140](index=140&type=chunk) Liquidity and Working Capital (In thousands) | Metric | As of March 31, 2025 | As of December 31, 2024 | | :---------------- | :------------------- | :---------------------- | | Current assets | $8,846 | $9,242 | | Current liabilities | $2,216 | $2,563 | | Working capital surplus | $6,630 | $6,679 | - As of March 31, 2025, cash and cash equivalents were **$3.2 million**, and a current note receivable was **$2.0 million**, which management believes are insufficient for the next 12 months, raising substantial doubt about going concern[140](index=140&type=chunk)[141](index=141&type=chunk) Cash Flows Summary (Three Months Ended March 31, In thousands) | Cash Flow Activity | 2025 | 2024 | | :-------------------------------- | :--- | :--- | | Net cash used in operating activities | $(1,588) | $(3,210) | | Net cash provided by investing activities | $500 | $4 | | Net cash provided by financing activities | $5 | $5 | | Net decrease in cash | $(1,083) | $(3,201) | [Off-Balance Sheet Arrangements](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any significant transactions or obligations not recorded on the company's balance sheet - The Company has not engaged in any off-balance sheet arrangements since its inception, other than Verdeca, which was disposed of in November 2020[150](index=150&type=chunk) [Critical Accounting Estimates](index=36&type=section&id=Critical%20Accounting%20Estimates) This section highlights accounting estimates that require significant management judgment and can materially impact financial results - Critical accounting estimates include revenue recognition, determination of the provision for income taxes, and net realizable value of inventory, which involve significant management judgment[152](index=152&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that quantitative and qualitative disclosures about market risk are not required for the Company - The Company is not required to provide quantitative and qualitative disclosures about market risk[154](index=154&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on changes in internal control over financial reporting - As of March 31, 2025, the President and CEO and CFO concluded that the Company's disclosure controls and procedures were effective at a reasonable assurance level[156](index=156&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected or are reasonably likely to materially affect the Company's internal control[157](index=157&type=chunk) [Part II — Other Information](index=38&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 14 of the Condensed Consolidated Financial Statements for a discussion of legal proceedings - Information regarding legal proceedings is detailed in Note 14 of the Condensed Consolidated Financial Statements[158](index=158&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the Company's Annual Report on Form 10-K for a comprehensive discussion of risk factors - Readers should refer to Part I, 'Item 1A. Risk Factors' in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, for a discussion of factors that could materially affect the business[159](index=159&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds during the reporting period - There were no unregistered sales of equity securities and use of proceeds during the quarter ended March 31, 2025[160](index=160&type=chunk) [Item 3. Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the quarter ended March 31, 2025[161](index=161&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[162](index=162&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) This section reports on other information, specifically regarding Rule 10b5-1 trading arrangements - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the quarter ended March 31, 2025[163](index=163&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Form 10-Q, including agreements, certifications, and XBRL documents - Exhibits include the agreement between Bioceres and Arcadia, Principal Executive and Financial Officer's Certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and Inline XBRL documents[165](index=165&type=chunk) [SIGNATURES](index=40&type=section&id=SIGNATURES) This section contains the official signatures of the company's principal executive and financial officers, certifying the report - The report is signed by Thomas J. Schaefer, President and Chief Executive Officer, and Mark Kawakami, Chief Financial Officer, on May 8, 2025[171](index=171&type=chunk)

Financial Performance - Total revenues for Q1 2025 were $1,200,000, an increase of 21.5% compared to $987,000 in Q1 2024[4] - Net income attributable to common stockholders for Q1 2025 was $2,599,000, compared to a net loss of $2,423,000 in Q1 2024[4] - Basic net income per share from continuing operations was $1.90 in Q1 2025, a significant improvement from a loss of $0.70 in Q1 2024[4] - Operating expenses for Q1 2025 were $670,000, a decrease of 74% from $2,575,000 in Q1 2024[4] - The company reported a gain on the sale of intangible assets of $750,000 in Q1 2025[4] Assets and Liabilities - Total current assets decreased to $8,846,000 as of March 31, 2025, down from $9,242,000 as of December 31, 2024[2] - Total liabilities decreased to $4,085,000 as of March 31, 2025, compared to $7,294,000 as of December 31, 2024[2] Cash Flow - Cash and cash equivalents at the end of Q1 2025 were $3,159,000, down from $4,242,000 at the beginning of the period[5] - The company experienced a net cash used in operating activities of $1,588,000 in Q1 2025, an improvement from $3,210,000 in Q1 2024[6] Research and Development - Research and development expenses were $0 in Q1 2025, down from $6,000 in Q1 2024[4]

Core Insights - Arcadia Biosciences, Inc. reported a 22% year-over-year increase in total revenues, driven by a 90% growth in Zola® coconut water sales [1][6] - The company successfully sold patents for $750,000 and eliminated $1 million in liabilities, indicating a strategic exit from its legacy business [3] - An amendment to the Roosevelt agreement has been made to provide greater certainty regarding the exchange ratio, enhancing ownership certainty for Arcadia's stockholders post-transaction [4] Financial Performance - Total revenues for Q1 2025 reached $1.2 million, up from $987,000 in Q1 2024, marking a $213,000 increase [4] - Zola coconut water sales accounted for the entire revenue increase, with sales rising by $567,000, or 90%, compared to the same period last year [6] - Operating expenses decreased significantly by $1.9 million, primarily due to reductions in selling, general and administrative expenses [7][10] Profitability Metrics - Income from continuing operations improved to $530,000 in Q1 2025, compared to a loss of $1.6 million in Q1 2024, reflecting a 133% favorable change [4] - Net income attributable to common stockholders was $2.6 million, or $1.90 per share, a $5 million improvement from a net loss of $2.4 million, or $1.78 per share, in Q1 2024 [11] Operational Highlights - Gross margins have exceeded 30% for nine consecutive quarters, indicating strong operational efficiency [2] - Distribution of Zola coconut water grew by 70% year-over-year, contributing to the sales increase [2] - The company did not implement any price increases during 2024 or Q1 2025, focusing on volume growth instead [6]

Core Insights - Arcadia Biosciences, Inc. will release its financial and business results for Q1 2025 on May 8, 2025 [1] - A conference call is scheduled for 2:00 p.m. Eastern time to discuss the results and strategic achievements [2] Company Overview - Arcadia Biosciences has been innovating high-value, healthy ingredients since 2002 to meet consumer demands for healthier choices [3] - The company focuses on agricultural innovation and cultivates next-generation wellness products [3]