Arcadia Biosciences(US:RKDA)2023-05-15 20:08Financial Position - As of March 31, 2023, the company had an accumulated deficit of $267.2 million and cash and cash equivalents of $23.0 million, indicating potential liquidity issues[28]. - The company anticipates that its existing cash and cash equivalents will not be sufficient to meet its anticipated cash requirements for at least the next 12-18 months, raising substantial doubt about its ability to continue as a going concern[29]. - For the three months ended March 31, 2023, the company reported a net loss of $9.4 million and net cash used in operations of $3.5 million[28]. Assets and Liabilities - The company recorded a write-down of $23,000 related to packaging materials during the three months ended March 31, 2023, and had total inventories of $3.351 million as of March 31, 2023[33][34]. - Property and equipment, net decreased from $704,000 as of December 31, 2022, to $622,000 as of March 31, 2023, with depreciation expense of $71,000 for the three months ended March 31, 2023[35]. - The fair value of the company's Level 3 liabilities, including contingent liabilities from acquisitions, totaled $8.861 million as of March 31, 2023[46]. - A contingent liability of $2.0 million remains on the balance sheet related to the Anawah acquisition, reflecting ongoing development programs using acquired technology[86]. - The contingent consideration liability from the ISI acquisition was fully written down during 2022 as the probability of achieving the revenue milestone was deemed remote[87]. Financing Activities - The company may seek to raise additional funds through debt or equity financings, which could result in dilution to stockholders or increased debt service obligations[30]. - The Company raised total gross proceeds of $6.0 million from the March 2023 Private Placement, issuing 165,500 shares of common stock and various warrants[55]. - The estimated fair value of the common stock issued and March 2023 Pre-Funded Warrants was $5.1 million, exceeding the gross proceeds by $5.7 million, recognized as a valuation loss[58]. - The Company incurred additional offering costs of $548,000 related to the March 2023 Private Placement, which included legal and advisory fees[59]. Equity and Stock Options - As of March 31, 2023, the total outstanding stock options amounted to 61,844, with a weighted average exercise price of $110.91[75]. - The company recognized $212,000 in compensation expense for stock options awards during the three months ended March 31, 2023[79]. - The intrinsic value of options exercised was $0 for both quarters ended March 31, 2023, and 2022[75]. - A total of 90,861 shares of common stock were reserved for issuance under the 2015 Plan as of March 31, 2023[74]. - The company has $988,000 of unrecognized compensation cost related to unvested stock-based compensation grants, expected to be recognized over 2.2 years[76]. - The expected volatility for stock options granted was 124% for the three months ended March 31, 2023[79]. - The fair value of stock option awards was estimated using the Black-Scholes option-pricing model, with an expected term of 5.85 years for the three months ended March 31, 2023[79]. - The company granted 2,700 options with a weighted average exercise price of $11.17 during the three months ended March 31, 2023[75]. - The company has 666,334 outstanding options from the March 2023 Private Placement as of March 31, 2023[71]. - As of March 31, 2023, the number of shares reserved for future issuance under the Employee Stock Purchase Plan (ESPP) is 9,194, with 1,563 shares issued during the same period[80]. - The Company recorded $1,000 of ESPP related compensation expense during each of the three months ended March 31, 2023 and 2022[80]. Lease and Operating Costs - The Company has a weighted-average remaining lease term of 2.2 years and a weighted-average discount rate of 6.4% as of March 31, 2023[54]. - Operating lease cost for the three months ended March 31, 2023, was $191,000, compared to $276,000 for the same period in 2022[54]. - The Company terminated its lease for office space in Chesterfield, MO, effective September 30, 2022, incurring early termination fees of $47,000[53]. Research and Development - The Company entered into a collaborative arrangement with Corteva AgriScience for the research and development of improved wheat quality traits, sharing both risks and rewards[51]. - The Company has entered into contract research agreements with initial terms ranging from one to three years, which may require certain funding commitments[88]. Tax and Audit - The Company's effective tax rate was 0.00% for the three months ended March 31, 2023 and 2022, primarily due to a full valuation allowance on net deferred tax assets[82]. - The Company is currently not under audit for state tax purposes, but its Archipelago joint venture was selected for IRS audit for the 2021 tax year[83]. Subsequent Events - Management has evaluated subsequent events through May 15, 2023, the date the financial statements were available to be issued[95].