Arcadia Biosciences(RKDA) - 2024 Q3 - Quarterly Report

Financial Position - As of September 30, 2024, the Company reported an accumulated deficit of $274.8 million, cash and cash equivalents of $3.9 million, and short-term investments of $2.6 million[20] - For the nine months ended September 30, 2024, the Company incurred a net loss of $3.0 million and net cash used in operations of $7.4 million[20] - The Company anticipates that its existing cash and short-term investments will not be sufficient to meet its cash requirements for at least the next 12-18 months, raising substantial doubt about its ability to continue as a going concern[20] - The total assets at fair value as of September 30, 2024, amounted to $5,410,000, a decrease from $10,049,000 as of December 31, 2023, primarily due to changes in short-term investments[30][32] Discontinued Operations - The Company sold the GoodWheat brand on May 16, 2024, and ceased operations of its body care brands in the third quarter of 2023 due to market pressures[21] - The total assets of the discontinued operations for GoodWheat as of September 30, 2024, were reported at $70,000[22] - The company recognized a loss of $1,500 related to the sale of the GoodWheat brand for net consideration of $3.7 million during the nine months ended September 30, 2024[37] Asset Valuation and Impairments - The Company recorded a write-down of $154,000 related to hemp and GoodWheat seed during the three and nine months ended September 30, 2024[26] - The company recorded an impairment of $36,000 related to assets held for sale from the Archipelago as of December 31, 2023, which were sold in the second quarter of 2024[28] - The accumulated depreciation and amortization for property and equipment was $1,852,000 as of September 30, 2024, compared to $1,942,000 as of December 31, 2023[28] Funding and Financing - The Company may seek additional funding through debt or equity financings, which could dilute existing shareholders or impose operational restrictions[20] - The Company raised total gross proceeds of $6.0 million from the March 2023 Private Placement, issuing 165,500 shares of common stock[48] - The estimated fair value of the March 2023 Options issued was $6.6 million, exceeding the gross proceeds by $5.7 million[48] - The promissory note from Above Food, valued at $6.0 million, has a term of three years and accrues interest at the Wall Street Journal prime rate, with principal payments of $2.0 million due annually[38] - The estimated fair value of contingent features related to the promissory note was $250,000 as of September 30, 2024, and is reported as noncurrent note receivable[40] Lease and Asset Management - The inventory as of September 30, 2024, totaled $835,000, down from $1,033,000 as of December 31, 2023[27] - Total leased assets decreased from $792,000 as of December 31, 2023, to $306,000 as of September 30, 2024[45] - Current operating lease liabilities decreased from $852,000 as of December 31, 2023, to $346,000 as of September 30, 2024[45] - The Company recorded a net lease cost of $33,000 for the three months ended September 30, 2024, compared to $83,000 for the same period in 2023[45] Stock Options and Compensation - The company recognized $155,000 and $395,000 in stock option compensation expenses for the three and nine months ended September 30, 2024, respectively[57] - The total number of shares reserved for issuance under the 2015 Omnibus Equity Incentive Plan is 338,248, with 127,725 shares available for future grants as of September 30, 2024[54] - The expected volatility for stock options was 101.31% for the three months ended September 30, 2024[57] - The Company recorded a change in fair value of common stock warrant and option liabilities in its condensed consolidated statements of operations and comprehensive loss[52] Tax and Legal Matters - The Company's effective tax rate was 0.00% for both the three and nine months ended September 30, 2024 and 2023, primarily due to a full valuation allowance on net deferred tax assets[59] - The Company has a contingent liability of $2.0 million related to the Anawah acquisition, reflecting ongoing development programs using acquired technology[63] - The Company is not currently involved in any material litigation or legal proceedings[62] Research and Development - The Company has entered into contract research agreements with initial terms ranging from one to three years, which may include funding commitments[64] - The Company is currently awaiting the IRS Final Partnership Adjustment related to the Archipelago joint venture audit for the 2021 tax year[60] Employee Stock Purchase Plan (ESPP) - The ESPP allows eligible employees to purchase shares at a discount of up to 15% of their eligible compensation, with 8,073 shares issued under the plan as of September 30, 2024[58]