Arcadia Biosciences (RKDA) flags going concern risk amid cash squeeze
Arcadia Biosciences, Inc. reports 2025 product revenue of $4.9M, down slightly as GLA oil sales ended, while Zola coconut water revenue rose 17%. Net loss from continuing operations narrowed to $2.3M from $4.3M in 2024 as operating expenses declined.
The company recorded a $4.7M credit loss after Above Food defaulted on a promissory note from the 2024 GoodWheat sale, partially offset by a $2.0M gain from reducing contingent consideration and a $2.3M gain on AFII stock. Cash and cash equivalents were $0.3M at year-end, and auditors highlighted substantial doubt about Arcadia’s ability to continue as a going concern.
Arcadia has exited wheat trait commercialization and GoodWheat, now focusing on Zola coconut water sourced from Thailand amid evolving U.S. tariff policy. The Roosevelt Resources all-stock combination was terminated with no expected break-up fee, and the company faces a Proposition 65 lawsuit over BPA in canned coconut water and stockholder demand letters related to the terminated Roosevelt transaction.
Positive
- None.
Negative
- Substantial doubt about going concern: The company has an accumulated deficit of $281.2M, recurring losses, year-end cash of $0.3M, and auditors issued a going-concern warning.
- Loss of key financing source: Above Food failed to make the first $2.0M principal payment on its promissory note, leading Arcadia to record a $4.7M credit loss and eliminating an expected cash inflow.
- Potential Nasdaq delisting risk: A proposed Nasdaq market value of listed securities requirement of $5M would exceed Arcadia’s approximate $3.4M MVLS as of March 19, 2026, which could trigger suspension and delisting if adopted and not remedied.
- Litigation and regulatory overhang: The company is a defendant in a Proposition 65 case concerning BPA in coconut water packaging and has received stockholder demand letters tied to the terminated Roosevelt transaction, which could consume management time and legal expenses.
Insights
Going-concern warning and funding gap overshadow Zola growth.
Arcadia Biosciences narrowed its 2025 net loss to $2.3M and grew Zola coconut water sales 17%, but the business remains subscale with total revenue of only $4.9M. Cash at year-end was just $0.3M, highlighting tight liquidity.
Management and auditors note substantial doubt about the company’s ability to continue as a going concern. A $4.7M credit loss on the Above Food promissory note removed an expected cash source, even though Arcadia received AFII shares and booked a $2.3M related gain.
Future financing is critical, and the filing discusses potential equity or debt raises as well as possible proceeds from selling AFII shares, all subject to market and legal constraints. Separately, a proposed Nasdaq market value of listed securities rule, with Arcadia’s MVLS around $3.4M as of March 19, 2026, could create additional listing pressure if adopted.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the fiscal year ended
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
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Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant as of June 30, 2025, the last business day of the Registrant’s most recently completed second fiscal quarter, was approximately $
As of March 19, 2026, the registrant had
DOCUMENTS INCORPORATED BY REFERENCE
Information required by Part III of this Annual Report on Form 10-K is incorporated by reference to portions of the Registrant's Definitive Proxy Statement for its 2026 Annual Meeting of Stockholders, which the registrant intends to file with the Securities and Exchange Commission within 120 days after the end of the fiscal year covered by this Form 10-K.
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INTRODUCTION
“Arcadia,” the “Company,” "management," “we,” “our” and “us” are used interchangeably to refer to Arcadia Biosciences, Inc. and its subsidiaries.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events, our future financial or operating performance, growth strategies, anticipated trends in our industry, and our potential opportunities, plans, and objectives. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about:
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Annual Report on Form 10-K.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Annual Report on Form 10-K primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled "Risk Factors" and elsewhere in this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report on Form 10-K. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Annual Report on Form 10-K relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements to reflect events or circumstances or to reflect new information or the occurrence of unanticipated events, except as required by law.
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TABLE OF CONTENTS FOR FORM 10-K
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Business |
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Risk Factors |
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Unresolved Staff Comments |
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Cybersecurity |
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Properties |
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Legal Proceedings |
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Mine Safety Disclosures |
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Quantitative and Qualitative Disclosures About Market Risk |
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Item 8. |
Financial Statements and Supplementary Data |
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure |
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Controls and Procedures |
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Other Information |
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Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
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Directors, Executive Officers and Corporate Governance |
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Executive Compensation |
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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Certain Relationships and Related Transactions, and Director Independence |
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Principal Accounting Fees and Services |
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PART I
Item 1. Business.
Overview
Arcadia has leveraged its history as a leader in science-based approaches to develop high value products and drive innovation in the consumer goods industry. Since acquiring the assets of Zola in May 2021, Arcadia has provided consumers with a way to rehydrate, reset, and reenergize with Zola coconut water products. Previously, Arcadia developed products, primarily in wheat, which it commercialized through the sale of food products, trait licensing and royalty agreements.
On May 14, 2024, Arcadia sold its non-GMO Resistant Starch (“RS”) durum wheat trait to longtime partner Corteva Agriscience (“Corteva”) for total cash consideration of $4.0 million. Refer to Note 11 to the consolidated financial statements for further details of the transaction.
On May 16, 2024, Arcadia sold the GoodWheat™ brand to Above Food for net consideration of $3.7 million. The strategic decision to sell GoodWheat enabled the Company to monetize its intellectual property early. The assets sold consisted primarily of grain and finished goods inventories, formulations and trademarks. Refer to Notes 4 and 8 to the consolidated financial statements for further details of the transaction.
On December 4, 2024, Arcadia, Roosevelt Resources LP (“Roosevelt” or the “Partnership”) and Elliott Roosevelt, Jr. and David A. Roosevelt, in their capacities as representatives of the limited partners of the Partnership entered into a Securities Exchange Agreement (as it may be amended from time to time, the “Exchange Agreement”) providing for the combination of the two companies in an all-stock transaction. Subject to the terms of the Exchange Agreement and to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, at the closing of the transactions Arcadia agreed to issue shares of its common stock to the limited partners and to the sole member of the general partner of Roosevelt (together, the “Limited Partners”) in exchange for all of the limited partnership and other equity interests of Roosevelt (the “Exchange”). The Exchange Agreement, as amended, provided that upon completion of the Exchange, the Limited Partners and the Arcadia stockholders prior to the closing were to own 90% and 10%, respectively, of the shares of common stock of Arcadia immediately after the closing. On February 14, 2025, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission relating to the shares to be issued in the transaction. The registration statement also included a proxy statement/prospectus relating to a meeting of stockholders of the Company to be held to vote on proposals to approve the issuance of shares pursuant to the Exchange Agreement and related proposals. On April 30, 2025, the parties to the Exchange Agreement entered into a First Amendment to Securities Exchange Agreement (the “Amendment”). The Amendment amended certain provisions of the Exchange Agreement, including amending the “Termination Date” provided for in one of the closing conditions described in the Exchange Agreement, which allowed a party to terminate the Exchange Agreement if the closing had not occurred by May 15, 2025, to be August 15, 2025 (the “Termination Provision”). On July 31, 2025, the Company filed with the SEC pre-effective Amendment No. 1 to the registration statement on Form S-4. On December 24, 2025, the Company received a notice from Roosevelt indicating that it was terminating the Exchange Agreement with immediate effect pursuant to the Termination Provision, as the closing of the Exchange had not occurred by the Termination Date specified in the Amendment. The Company does not believe that any break-up fee or similar payment is payable by either party in connection with termination of the Exchange Agreement.
On March 28, 2025, Arcadia entered into an agreement with Bioceres Crop Solutions Corp. ("BIOX") pursuant to which BIOX agreed to transfer to the Company all rights and materials relating to certain soy traits that were included in licenses granted by the Company to BIOX in the November 2020 sale of Verdeca. In addition, BIOX agreed to pay a total of $750,000 to the Company. The Company agreed to transfer to BIOX all of the Company's granted patents, pending applications, related materials and documents related to the Company's reduced gluten and oxidative stability patents. In addition, the parties agreed to amend a previous agreement between the parties to eliminate any obligation to pay the Company future product royalties under the agreement.
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On May 26, 2025, Arcadia entered into a License Termination and Patent Non-Assert Agreement (the "Bioseed Agreement") with Bioseed Research India, a division of DCM Shriram Limited ("Bioseed"). Pursuant to the Bioseed Agreement, the parties agreed to terminate a license agreement previously entered into by Arcadia and Bioseed in 2012, Arcadia agreed to not assert its rights under a patent held by Arcadia regarding certain products commercialized or that may be commercialized by Bioseed, and Bioseed agreed that if as a result of any such commercialization by Bioseed any amounts become payable to a third party pursuant to an agreement previously entered into between Arcadia and the third party, Bioseed will pay such amounts to the third party.
Tariffs
Commencing in April 2025, the U.S. government announced and imposed a series of reciprocal tariffs on most U.S. trading partners in reliance on the International Economic Emergency Power Act, or IEEPA. Effective August 7, 2025, the U.S. government implemented a 19% reciprocal tariff rate on goods originating from Thailand, where our coconut water is sourced and processed. In October 2025, the United States and Thailand reached a preliminary framework agreement on reciprocal trade, which maintains a 19% rate while identifying certain product categories that may be eligible for a zero percent reciprocal tariff rate; however the scope and implementation timeline of those exemptions remain subject to further negotiation.
On February 20, 2026, the U.S. Supreme Court ruled that the use of the IEEPA to impose tariffs was not authorized by Congress, invalidating a significant portion of tariffs announced in April 2025. While the ruling struck down the IEEPA-based tariffs, it does not prevent the administration from imposing tariffs using other legal or statutory authorities. Following the decision, the administration signed a new executive order to impose new duties and announced a 10% global tariff on imports entering the United States (subject to certain exceptions) under Section 122 of the Trade Act of 1974, which provides for tariffs up to 15% for a period of up to 150 days unless extended by Congress. The administration has indicated its intention to pursue alternative statutory mechanisms to reinstate or impose new tariffs. As a result, there remains substantial uncertainty regarding future tariff rates and the countries and products to which such tariffs would apply. We continue to evaluate the potential impact of these tariffs on our cost of goods sold, including opportunities for product classification optimization under applicable Harmonized Tariff Schedule codes. The full impact of tariffs on the Company remains uncertain as tariff policy continues to evolve and in light of legal challenges to the tariff framework. We are actively working with our customs brokers, logistics partners, and business partners to identify and implement mitigation strategies. For additional information regarding the potential impacts of tariffs on our business and results of operations, see Item 1A, "Risk Factors" below.
Our Products
Zola Coconut Water
Zola Coconut Water joined the Arcadia family of brands in May 2021. Sourced from Thailand, where coconuts are grown, harvested, and packaged at origin, Zola delivers a pure, natural coconut water with a crisp, clean taste that is slightly sweet and refreshingly hydrating. Naturally rich in electrolytes, Non-GMO Project Verified, and only 60 calories per serving, Zola is the superior way to rehydrate, reset, and reenergize. Available in original, original with pulp, espresso, and pineapple flavors, Zola is sold through grocery retailers and foodservice distributors across the U.S.
Agronomic Wheat Traits
As a result of the various agreements and transactions described above, Arcadia no longer retains any effective commercialization rights to its portfolio of wheat patents. Therefore, the Company does not expect to receive any license or royalty fees in the future related to any wheat-based intellectual property rights.
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Intellectual Property
Following the transactions with Corteva, Above Food and Bioceres described above, we have significantly reduced our patent portfolio. As of December 31, 2025, we owned or exclusively controlled 24 issued patents, and 2 pending patent applications worldwide. As of December 31, 2025, we had 5 registered trademarks and no pending trademark applications in the United States.
Competition
The markets for beverage products are highly competitive, and we face significant direct and indirect competition in several aspects of our business. We compete with both large, established manufacturers, as well as small, innovative producers of beverage products. The beverage industry is competitive. Competitors in this market compete for brand recognition, ingredient sourcing, product shelf space, and e-commerce page rankings. Our competitors have similar distribution channels and retailers to deliver and sell their products. Competitors in this space include Vita Coco, ZICO, C20 and Harmless Harvest.
Employees
As of December 31, 2025, we had eight employees, including management, operations, accounting/finance, legal and administration personnel. We believe our employee relations to be good. None of our employees are represented by a labor union or collective bargaining agreement.
Facilities
Our corporate headquarters are located in Dallas, Texas. We believe that our leased space is adequate to meet our current needs and that, if needed, suitable additional or alternative space will be available to accommodate our operations.
Available Information
Our website address is www.arcadiabio.com. Our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, any amendments to those reports, proxy and registration statements filed or furnished with the Securities and Exchange Commission, or SEC, are available free of charge through our website. We make these materials available through our website as soon as reasonably practicable after we electronically file such materials with, or furnish such materials to, the SEC. The information contained in, or that can be accessed through, our website is not part of this Report.
Item 1A. Risk Factors.
You should carefully consider the following risk factors, in addition to the other information contained in this Report on Form 10-K, including the section of this Report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. If any of the events described in the following risk factors and the risks described elsewhere in this Report occurs, our business, operating results and financial condition could be seriously harmed. This Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Report.
Risks Related to Our Business
There is substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain further financing.
Our consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as shown in our consolidated financial statements for the year ended December 31, 2025,
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included in this Report, we have an accumulated deficit, recurring net losses and net cash used in operations, and resources that will not be sufficient to meet our anticipated cash requirements, which raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The substantial doubt about our ability to continue as a going concern may hinder our ability to obtain further required financing. If we cannot continue as a viable entity, we might be required to reduce or cease operations or seek dissolution and liquidation or bankruptcy protection, and our stockholders would likely lose most or all of their investment in us.
Statements in this Report on Form 10-K concerning our future plans and operations are dependent on our ability to secure adequate funding and the absence of unexpected delays or adverse developments. We may not be able to secure required funding.
Any statements contained in this Report on Form 10-K concerning future events or developments or our future operations or activities are forward-looking statements that in each instance assume that we have or are able to obtain sufficient funding to support such activities and continue our operations and satisfy our liability and obligations in a timely manner. There can be no assurance that this will be the case. Also, such statements assume that there are no significant unexpected developments or events that delay or prevent such activities from occurring. Failure to timely obtain any required additional funding, or unexpected developments or events, could delay the occurrence of such events or prevent the events described in any such statements from occurring which could have a material adverse effect on our business, financial condition and results of operations.
We have a history of significant losses, which we expect to continue, and we may never achieve or maintain profitability.
We have incurred significant net losses since our formation in 2002 and we expect to continue to incur net losses for the foreseeable future. We incurred net losses of $2.3 million and $7.0 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, we had an accumulated deficit of $281.2 million. Net cash used in operations was $4.7 million and $9.6 million for the years ended December 31, 2025 and 2024, respectively. We expect to continue to incur losses and there are no assurances that we will become profitable at all or on a sustained basis.
We will require additional financing and may not be able to obtain such financing on favorable terms, if at all, which could adversely impact our operations and ability to continue our business. Such additional funding may not be available, which would have a material adverse effect on our business, financial condition and results of operations and would materially and adversely affect our ability to continue operations.
Arcadia will require additional funding in the near term to fund its business and the marketing and sale of its products and to provide working capital to fund other aspects of its business. There are no assurances that required funding will be available at all or will be available in sufficient amounts or on reasonable terms. If funding is obtained through future financings involving the issuance of equity securities, Arcadia’s existing stockholders would suffer dilution. If Arcadia is able to raise funding through debt financing, it may be subject to restrictive covenants that limit its operating flexibility. Arcadia may not be able to raise sufficient additional funds on terms that are favorable to it, if at all. If Arcadia fails to raise sufficient funds and continues to incur losses, its ability to continue its operations, take advantage of strategic opportunities, or otherwise respond to competitive pressures, would likely be significantly limited. Delays in obtaining, or the inability to obtain, required funding would materially and adversely affect our ability to satisfy our current and future liabilities and obligations, and would materially and adversely affect our ability to continue operations. If we do not have sufficient funds to continue operations, we could be required to seek dissolution and liquidation, bankruptcy protection or other alternatives that would likely result in our stockholders losing some or all of their investment in us.
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Arcadia’s gross profit margins on its consumer products may be impacted by a variety of factors, including but not limited to variations, in freight costs, pricing, customer requirements, market acceptance rate and promotional support costs.
Arcadia expects that its gross profit as a percentage of net sales could fluctuate as a result of a number of factors, including product pricing, retail discounts, and input costs. If Arcadia is not able to increase its selling prices to offset increased input costs, or if its sales volume decreases significantly, there could be a negative impact on its financial condition and results of operations.
Competition is intense and if Arcadia is unable to compete effectively, its financial results will suffer.
Arcadia faces significant competition in the markets in which it operates. The markets for coconut water products are intensely competitive. Arcadia may be unable to compete successfully against its current and future competitors, which may result in price reductions, reduced margins and the inability to achieve market acceptance for its products. In addition, several of Arcadia’s competitors have substantially greater financial, marketing, sales, distribution, research and development, and technical resources than Arcadia, and some of its collaborators have more experience in research and development, regulatory matters, manufacturing, and marketing. Competition could increase in the future if new companies enter the market.
Arcadia depends on its key personnel and, if it is not able to attract and retain qualified technical and business personnel, it may not be able to continue its business.
Arcadia’s future performance will depend on the continued services and contributions of its management team and other key employees, the loss of whose services might significantly delay or prevent the achievement of the Company's objectives. The replacement of any member of our management team involves significant time and costs and such a loss could significantly delay or prevent the achievement of our business objectives.
Additionally, Arcadia’s business is dependent on its ability to recruit and maintain a highly skilled and educated workforce with expertise in a range of disciplines, including supply chain management, marketing, and other areas relevant to its operations. All of Arcadia’s current employees are at-will employees, and the failure to retain or hire skilled and highly educated personnel could limit its growth and hinder its business.
Arcadia’s business is subject to the risks of security breaches, including cybersecurity incidents.
Arcadia utilizes and critically relies upon information technology systems in all aspects of its business, including large amounts of data to support its products. Failure to effectively prevent, detect, and recover from the increasing number and sophistication of information security threats could result in theft, misuse, modification, and destruction of information, including trade secrets and confidential business information, and cause business disruptions, or reputational damage, which could significantly affect Arcadia’s results of operations and financial condition.
Arcadia may be required to pay substantial damages as a result of product liability, health and safety, or other similar claims for which insurance coverage is not available.
Arcadia is subject to product liability, health and safety, or similar claims with respect to its products, including claims described elsewhere in this Report under the heading "Legal Proceedings." Such claims against Arcadia or its collaborators selling Arcadia’s products could damage Arcadia reputation, harm its relationships with its collaborators, and materially and adversely affect its business, results of operations, financial condition, and prospects. Furthermore, while many of Arcadia’s collaboration agreements require that Arcadia’s collaborators indemnify Arcadia for the cost of product liability claims brought against Arcadia as a result of its collaborator’s misconduct, such indemnification provisions may not always be enforced, and we may receive no indemnification if Arcadia’s own misconduct contributed to the claims.
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Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations.
Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. A global financial crisis or a global or regional political disruption could cause extreme volatility in the capital and credit markets. Outbreaks of epidemic, pandemic, or contagious diseases could disrupt Arcadia’s business resulting in a loss of productivity from its employees. In addition, the US financial markets have been negatively impacted by the rise of inflation and interest rates, increasing the potential for a local and/or global economic recession that could disrupt Arcadia’s business. A political disruption could also strain Arcadia’s manufacturers or suppliers, possibly resulting in supply disruption, or cause its customers to delay making payments for its services. Any of the foregoing could harm Arcadia’s business, and we cannot anticipate all of the ways in which the political or economic climate and financial market conditions could adversely impact our business.
Changes to U.S. trade policy, tariff and import/export regulations may adversely affect our operating results.
Changes in U.S. or international social, political, regulatory and economic conditions or in laws and policies governing foreign trade, development and investment in the countries relevant to our business, as well as any negative sentiment toward the U.S. as a result of such changes, could adversely affect our business. The U.S. has instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S. and other countries where we conduct our business.
As a result of policy changes and government proposals, there may be greater restrictions and economic disincentives on international trade. New tariffs and other changes in U.S. trade policy could trigger retaliatory actions by affected countries, and foreign governments have instituted or are considering imposing trade sanctions on U.S. goods. Such changes have the potential to adversely impact the U.S. economy or sectors thereof, our industry and the demand for our products, and as a result, could have a negative impact on our business, financial condition and results of operations. Because our Zola coconut water product is sourced in Thailand, such steps, if adopted and if they affect countries that impact our business, could adversely impact our business and operations, increase our costs, and make our products less competitive.
Commencing in April 2025, the U.S. government announced and imposed a series of reciprocal tariffs on most U.S. trading partners in reliance on the International Economic Emergency Power Act, or IEEPA. Effective August 7, 2025, the U.S. government implemented a 19% reciprocal tariff rate on goods originating from Thailand, where our coconut water is sourced and processed. In October 2025, the United States and Thailand reached a preliminary framework agreement on reciprocal trade, which maintains a 19% rate while identifying certain product categories that may be eligible for a zero percent reciprocal tariff rate; however the scope and implementation timeline of those exemptions remain subject to further negotiation.
On February 20, 2026, the U.S. Supreme Court ruled that the use of the IEEPA to impose tariffs was not authorized by Congress, invalidating a significant portion of tariffs announced in April 2025. While the ruling struck down the IEEPA-based tariffs, it does not prevent the administration from imposing tariffs using other legal or statutory authorities. Following the decision, the administration signed a new executive order to impose new duties and announced a 10% global tariff on imports entering the United States (subject to certain exceptions) under Section 122 of the Trade Act of 1974, which provides for tariffs up to 15% for a period of up to 150 days unless extended by Congress. The administration has indicated its intention to pursue alternative statutory mechanisms to reinstate or
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impose new tariffs. As a result, there remains substantial uncertainty regarding future tariff rates and the countries and products to which such tariffs would apply.
As a result of being a public company, Arcadia is obligated to implement and maintain effective internal control over financial reporting. If Arcadia is unable to implement and maintain effective internal control over financial reporting in the future, investor confidence in Arcadia may be adversely affected and, as a result, the value of its common stock.
Pursuant to Section 404(a) of the Sarbanes-Oxley Act of 2002, as amended (“SOX”) and the related rules adopted by the SEC and the Public Company Accounting Oversight Board, Arcadia’s management is required to report on the effectiveness of its internal control over financial reporting. Section 404(b) of SOX requires that its independent registered public accounting firm will also need to attest to the effectiveness of Arcadia’s internal control over financial reporting if Arcadia qualifies as an accelerated filer or a large accelerated filer, which it currently does not as of the date of this Report.
Arcadia has identified material weaknesses in its internal control over financial reporting as discussed in Item 9A, "Controls and Procedures" of Part II of this Report. If Arcadia identifies additional material weaknesses in its internal control over financial reporting, if Arcadia is unable to comply with the requirements of Section 404(a) in a timely manner, if Arcadia is unable to assert that its internal control over financial reporting is effective or, once required, if Arcadia's independent registered public accounting firm is unable to attest that Arcadia's internal control over financial reporting is effective, investor confidence in Arcadia may be adversely affected and, as a result, the value of its common stock.
Risks Related to Ownership of Our Common Stock
Future sales of substantial amounts of Arcadia’s common stock, or the possibility that such sales could occur, could adversely affect the market price of Arcadia’s common stock.
Future sales in the public market of Arcadia’s common stock, or shares issued upon exercise of its outstanding stock options or warrants, or the perception by the market that these issuances or sales could occur, could lower the market price of Arcadia’s common stock or make it difficult for Arcadia to raise additional capital, and Arcadia’s stockholders may experience substantial dilution and a reduction in the price that they are able to obtain upon the sale of their shares. As of December 31, 2025, we had 1,373,120 shares of common stock outstanding, substantially all of which Arcadia believes may be sold publicly, subject in some cases to volume and other limitations, provisions or limitations in registration rights agreements, or prospectus delivery or other requirements relating to the effectiveness and use of registration statements registering the resale of such shares. As of December 31, 2025, we had 127,131 shares of Arcadia’s common stock issuable upon the exercise of outstanding stock options under our equity incentive plans at a weighted-average exercise price of $19.37 per share, and outstanding warrants and preferred investment options to purchase 1,016,252 shares of common stock at a weighted-average exercise price of $26.68 per share. In addition, on January 9, 2026, we entered into inducement letter agreements with certain holders of outstanding preferred investment options pursuant to which such holders exercised certain outstanding preferred investment options covering an aggregate of 808,595 shares of common stock and/or Abeyance Shares. Pursuant to the terms of the investment options, if exercise of the investment options would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the holder's investment options (4.99% or 9.99%, as applicable), as determined by the holder, we agreed to hold such holder's balance of exercised shares in abeyance and not issue such shares (the "Abeyance Shares") until we receive notice from the holder that the balance of shares may be issued in compliance with such beneficial ownership limitations (with such Abeyance Shares evidenced through the holder's existing investment options, and deemed prepaid). In connection with the transaction, we also issued new preferred investment options to purchase 1,617,190 shares of common stock at an exercise price of $2.325 per share. Subject to applicable vesting requirements, upon exercise of any of the above options or warrants, the underlying shares may be resold into the public market, subject in some cases to volume and other limitations or prospectus delivery requirements pursuant to registration statements registering the resale of such shares. In the case of outstanding options and warrants that have exercise prices that are below the market price of Arcadia’s common stock from time to time, Arcadia’s stockholders would experience dilution upon the exercise of these options and warrants.
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Arcadia’s stock price has been and may continue to be volatile, and you could lose all or part of your investment.
The market price of Arcadia’s common stock has been and may continue to be volatile. After making adjustments for the impact of reverse stock splits, since shares of our common stock were sold in its initial public offering in May 2015 at a price of $6,400.00 per share, Arcadia’s stock price has ranged from $1.82 to $6,984.00, through December 31, 2025. The market price of Arcadia’s common stock is subject to wide fluctuations in response to various risk factors, some of which are beyond Arcadia’s control and may not be related to its operating performance, including:
Further, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions such as recessions, interest rate changes, or international currency fluctuations, may cause the market price of Arcadia’s common stock to decline. If the market price of Arcadia’s common stock fluctuates or declines, you may not realize any return on your investment and may lose some or all of your investment.
Arcadia expects its operating results to vary significantly from quarter to quarter, which may cause Arcadia’s stock price to fluctuate widely.
Arcadia expects its quarterly operating results to fluctuate widely and unpredictably for the following reasons, among others:
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Any unanticipated change in revenues or operating results is likely to cause Arcadia’s stock price to fluctuate since such changes reflect new information available to investors and analysts.
Arcadia’s failure to meet the continued listing requirements of Nasdaq could result in a delisting of its common stock, which could negatively impact the market price and liquidity of its common stock and its ability to access the capital markets.
Our common stock is listed on the Nasdaq Capital Market. If we fail to satisfy the continued listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”), such as the corporate governance, minimum stockholders equity or minimum closing bid price requirements, Nasdaq may take steps to delist our common stock. If we receive a deficiency letter regarding such listing requirements, we would attempt to take actions to regain compliance with applicable listing requirements within any cure periods applicable to such requirements; however, we can provide no assurance that any such action taken by us would allow our common stock to continue to be listed.
Further, on January 13, 2026, Nasdaq filed with the SEC, pursuant to the Exchange Act and Rule 19b-4 promulgated thereunder, a proposed rule change to adopt a new Market Value of Listed Securities (“MVLS”) continued listing requirement of at least $5 million. Specifically, under the proposed new rule, if a company fails to have a MVLS of at least $5 million for 30 consecutive business days, its listed securities will be subject to immediate suspension and delisting without a cure period to regain compliance, delisting would not be stayed pending any appeal by the company, and the appeal process from such a suspension and delisting determination would be very limited. The proposed rule change was published for comment in the Federal Register on January 29, 2026. Section 19(b)(2) of the Exchange Act provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the SEC may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the SEC shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. On March 16, 2026, the SEC announced that pursuant to Section 19(b)(2) of the Exchange Act, it was designating a longer period of time within which to take action on the proposed rule change so that the SEC has sufficient time to consider the proposed rule change and the issues raised therein, and designated April 29, 2026, as the date by which the SEC would either approve or disapprove, or institute proceedings to determine whether to disapprove, the proposed rule change.
Based on the number of shares of our common stock outstanding (other than shares held by directors and officers) as of March 19, 2026, and the last consolidated bid price of our common stock on the Nasdaq Capital Market on March 19, 2026, our MVLS was approximately $3.4 million. Accordingly, if the SEC subsequently approves the rule change as proposed and if our MVLS remains below the minimum $5 million requirement for 30 consecutive business days after the new rule becomes effective and the date that such determination period commences, our common stock would be subject to immediate suspension and delisting from the Nasdaq Capital Market.
If our common stock were to be delisted from the Nasdaq Capital Market, such a delisting would have a negative effect on the liquidity of our common stock, could decrease the price of our common stock, could result in a loss of confidence by institutional or other investors, employees, business partners or other third parties, result in fewer business development opportunities or opportunities for entering into strategic transactions, impair investors' ability to sell or purchase our common stock when they wish to do so, and materially adversely affect our ability to raise capital or pursue financing, strategic or other transactions on acceptable terms, or at all.
If our common stock were to be delisted from the Nasdaq Capital Market, the common stock may be eligible for trading on an over-the-counter market such as the OTCQX Best Market, OTCQB Venture Market or OTCID Basic Market, operated by the OTC Markets Group. The quotation of the common stock on an OTC marketplace, compared to being listed on a national securities exchange such as the Nasdaq Capital Market, may present significant risks to the holders of common stock, including lower availability and efficiency of market price quotations, significantly less liquidity, increased price volatility, increased transaction costs, and the application of state securities laws that could result in restrictions on the sale of our common stock. Stockholders may not be able to sell their shares of common stock on any such substitute marketplace in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. If we are not able to obtain a listing on another stock exchange or quotation service for our common stock, it may be extremely difficult or impossible for stockholders to sell their shares of common stock.
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If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares.
The SEC and FINRA have adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 per share, subject to certain exemptions including without limitation if the issuer has net tangible assets exceeding $2 million and has been in continuous operation for at least three years, and other than securities registered on certain national securities exchanges (including the Nasdaq Capital Market) or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. As of December 31, 2025, our net tangible assets exceeded $2 million. If we do not retain a listing on Nasdaq and if the price of our common stock is less than $5.00, then our common stock may be deemed a penny stock unless one of the exemptions applies. If our common stock is deemed to be a penny stock, trading in our common stock would be subject to additional sales practice requirements on broker-dealers who sell penny stocks. If our stock is deemed to be a penny stock, then the penny stock rules require a broker-dealer, before effecting a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information, including information about penny stocks and the nature and level of risks involved in investing in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements containing price and market information relating to the penny stock. In addition, broker-dealers who sell these securities to persons other than established customers (as defined in the applicable rules) and “accredited investors” must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction and a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares.
If applicable, the penny stock rules may make it difficult for investors to sell their shares of our common stock. Because of the rules and restrictions applicable to a penny stock, there is less trading in penny stocks and the market price of our common stock may be adversely affected. Also, the additional burdens imposed upon broker-dealers by such requirements may discourage brokers from effecting transactions in our common stock if it is deemed to be a penny stock. Accordingly, investors may not always be able to resell their shares of our common stock publicly at times and prices acceptable to them.
Certain of our securities issued in prior offerings include a right to receive the Black-Scholes value of the unexercised portion of those securities in the event of a certain kinds of fundamental transactions, which payments, if applicable, could be significant.
Certain of our outstanding warrants (which in some instances are denominated as “investment option” securities) to purchase shares of common stock that we issued in prior offerings provide that, in the event of certain kinds of “fundamental transactions,” including, without limitation, a merger or consolidation of the Company or sale of all or substantially all of our assets or a sale of a certain percentage of our common stock, in each case where the Company is not the surviving entity (as defined in the warrant or investment option) in the transaction or the Company’s common stock is no longer registered under the Securities Exchange Act of 1934, as amended, the holders of such warrants have the option, by delivering a notice within 30 days after the closing of the transaction, to require us to pay to such holders an amount of cash equal to the Black-Scholes value of the warrants, calculated as provided in the warrants. If the Company engaged in a transaction where the holders had such rights, the amounts that the Company might be required to pay under such provisions could be material. In addition, if one or more holders of such warrants or investment options believes that such provisions are applicable and initiates legal proceedings to require the Company to make such payments, resolving such matters could involve significant time and expense, and an adverse outcome could have a material adverse effect on our business, financial condition and results of operations.
Item 1B. Unresolved Staff Comments.
Not applicable.
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Item 1C. Cybersecurity.
We recognize the importance of identifying, assessing and managing material risks associated with cybersecurity threats. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to employees or customers and violation of data privacy or security laws.
We describe whether and how risks from cybersecurity threats are reasonably likely to materially affect us, including our results of operations and financial condition, under the heading "Arcadia’s business is subject to the risks of security breaches, including cybersecurity incidents" in Item 1A, “Risk Factors” of Part I of this Report.
Management is responsible for the operational oversight of the company-wide cybersecurity strategy, policy, and standards across relevant departments to assess and help prepare us to address cybersecurity risks.
As of the date of this Report, we are
Item 2. Properties.
Our corporate headquarters are located in Dallas, Texas. We believe that our leased space is adequate to meet our current needs and that, if needed, suitable additional or alternative space will be available to accommodate our operations.
Item 3. Legal Proceedings.
From time to time, we may be subject to legal proceedings, actions, claims, suits, or investigations arising from the ordinary course of our business, including actions with respect to intellectual property claims, breach of contract claims, claims relating to our products, labor and employment claims and other matters. Any litigation or other proceedings could divert management time and attention, could involve significant amounts of legal fees and other fees and expenses, or could result in an adverse outcome having a material adverse effect on our financial condition, cash flows or results of operations. Actions, claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty. Except as described below, we are not currently involved in any legal proceedings that we believe are, individually or in the aggregate, material to our business, results of operations or financial condition. However, regardless of the outcome, litigation can have an adverse impact on us because of associated cost and diversion of management time.
On March 6, 2025, a complaint was filed in the Superior Court of the State of California for the County of San Francisco by the Center for Environmental Health, a non-profit corporation (the "plaintiff"), against approximately 28 named companies, including several major retailers and manufacturers such as Walmart, Whole Foods Market, Smart & Final Stores, and Raleys, as well as many companies that manufacture and market coconut water products, including the Company, alleging violations of the California Safe Drinking Water and Toxic Enforcement Act, known as Proposition 65. Proposition 65 requires, among things, that a specific warning appear on any product sold in California containing a substance listed by that state as having been found to cause cancer or reproductive toxicity. The complaint contends that the defendants violated Proposition 65 by knowingly and intentionally exposing individuals in California to Bisphenol A ("BPA") in coconut water containers. The complaint states that the plaintiff's claims against the Company are limited to the Company's coconut water products packaged in cans,
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but the complaint also alleges that exposure to BPA occurs when individuals consume coconut water in cartons and other containers. On May 23, 2025, the plaintiff amended the complaint to name additional retailers, manufacturers and/or companies that market coconut water products. The complaint seeks injunctive relief, including an injunction prohibiting defendants from offering coconut water products sold in California without either reducing the BPA level in the product such that no Proposition 65 warnings are required or providing prior clear and reasonable warnings, and civil penalties. On July 22, 2025, the Company filed an answer to the complaint, denying liability and asserting a number of affirmative defenses. The parties have commenced discovery. The Company intends to vigorously defend itself against the claims.
As disclosed above, on December 4, 2024, the Company entered into the Exchange Agreement with Roosevelt providing for a business combination transaction pursuant to the Exchange. The Exchange Agreement was terminated effective December 29, 2025. On February 14, 2025, the Company filed a registration statement on Form S-4 with the SEC, including a preliminary proxy statement/prospectus, relating to shares to be issued in the transaction and a special meeting of stockholders of the Company to be held to approve the issuance of shares in the transaction and related proposals. After the date of filing of the registration statement, the Company received several letters (the "Demand Letters") from counsel to purported stockholders of the Company. Each letter asserted that the preliminary proxy statement included in the registration statement was deficient and demanded that the alleged deficiencies be rectified. The Demand Letters allege, among other matters, that corrective disclosures are required to be included in the registration statement to address alleged material misstatements and omissions in the registration statement and that the proxy statement/prospectus contains materially incomplete and misleading information concerning, among other matters, financial projections, financial analysis performed by the entity that provided a fairness opinion to the Company's board of directors in connection with the transaction, potential conflicts of interest involving the Company's financial advisor in connection with the transaction and the Company's insiders, and possible breach of fiduciary duties by the directors of executive officers of the Company in connection with the transaction. Certain of the Demand Letters included a request for inspection of certain books and records of the Company pursuant to Delaware corporate law. The Company has not received any communications relating to the Demand Letters after the announcement of the termination of the Exchange Agreement. In light of the termination of the Exchange Agreement with Roosevelt, as disclosed above, the Company believes that the matters contained in the Demand Letters should be regarded as having effectively been mooted. However, if any of the Demand Letters continue to be pursued, the Company believes that the allegations in the Demand Letters are without merit and intends to vigorously defend itself against any complaint that may be filed.
The matters described in this section could divert management time and attention from the Company, and could involve significant amounts of legal fees and other fees and expenses. An adverse outcome in any such proceedings could have a material adverse effect on the Company.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Our common stock has been listed on the NASDAQ Stock Market under the symbol “RKDA” since May 15, 2015. Prior to May 15, 2015, there was no public trading for our common stock.
Holders of Record
As of March 19, 2026, we had 36 holders of record of our common stock. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders represented by these record holders.
Dividend Policy
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation of our business and do not anticipate paying any cash dividends in the foreseeable future. Any decision to declare and pay cash dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions, and other factors that our board of directors may deem relevant.
Securities Authorized for Issuance under Equity Compensation Plans
See Part III, Item 12, for a description of securities authorized for issuance under equity compensation plans.
Recent Sales of Unregistered Securities
Information concerning our sales of unregistered securities during the year ended December 31, 2025, has previously been reported in Current Reports on Form 8-K that we filed during that year.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
We did not repurchase any of our equity securities during the year ended December 31, 2025.
Item 6. [Reserved]
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Special Note Regarding Forward-Looking Statements
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes to those statements included herein. In addition to historical financial information, this Report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. The statements contained in this Report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. These statements are based on the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below. Furthermore, such forward-looking statements speak only as of the date of this Report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.
Solely for convenience, the trademarks, service marks and trade names referred to in this Report may appear without the ®, TM, or SM symbols, but such references do not constitute a waiver of any rights that might be associated with the respective trademarks, service marks, or trade names.
Overview
Arcadia has leveraged its history as a leader in science-based approaches to develop high value products and drive innovation in the consumer goods industry. Since acquiring the assets of Zola in May 2021, Arcadia has provided consumers with a way to rehydrate, reset, and reenergize with Zola coconut water products. Previously, Arcadia developed products, primarily in wheat, which it commercialized through the sale of food products, trait licensing and royalty agreements.
On May 14, 2024, Arcadia sold its non-GMO Resistant Starch (“RS”) durum wheat trait to longtime partner Corteva Agriscience (“Corteva”) for total cash consideration of $4.0 million. Refer to Note 11 to the consolidated financial statements for further details of the transaction.
On May 16, 2024, Arcadia sold the GoodWheat™ brand to Above Food for net consideration of $3.7 million. The strategic decision to sell GoodWheat enabled the Company to monetize its intellectual property early. The assets sold consisted primarily of grain and finished goods inventories, formulations and trademarks. Refer to Notes 4 and 8 to the consolidated financial statements for further details of the transaction.
On December 4, 2024, Arcadia, Roosevelt Resources LP (“Roosevelt” or the “Partnership”) and Elliott Roosevelt, Jr. and David A. Roosevelt, in their capacities as representatives of the limited partners of the Partnership entered into a Securities Exchange Agreement (as it may be amended from time to time, the “Exchange Agreement”) providing for the combination of the two companies in an all-stock transaction. Subject to the terms of the Exchange Agreement and to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, at the closing of the transactions Arcadia agreed to issue shares of its common stock to the limited partners and to the sole member of the general partner of Roosevelt (together, the “Limited Partners”) in exchange for all of the limited partnership and other equity interests of Roosevelt (the “Exchange”). The Exchange Agreement, as amended, provided that upon completion of the Exchange, the Limited Partners and the Arcadia stockholders prior to the closing were to own 90% and 10%, respectively, of the shares of common stock of Arcadia immediately after the closing. On February 14, 2025, the Company filed a registration statement on Form S-4 with the Securities and Exchange Commission relating to the shares to be issued in the transaction. The registration statement also included a proxy statement/prospectus relating to a meeting of stockholders of the Company to be held to vote on proposals to
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approve the issuance of shares pursuant to the Exchange Agreement and related proposals. On April 30, 2025, the parties to the Exchange Agreement entered into a First Amendment to Securities Exchange Agreement (the “Amendment”). The Amendment amended certain provisions of the Exchange Agreement, including amending the “Termination Date” provided for in one of the closing conditions described in the Exchange Agreement, which allowed a party to terminate the Exchange Agreement if the closing had not occurred by May 15, 2025, to be August 15, 2025 (the “Termination Provision”). On July 31, 2025, the Company filed with the SEC pre-effective Amendment No. 1 to the registration statement on Form S-4. On December 24, 2025, the Company received a notice from Roosevelt indicating that it was terminating the Exchange Agreement with immediate effect pursuant to the Termination Provision, as the closing of the Exchange had not occurred by the Termination Date specified in the Amendment. The Company does not believe that any break-up fee or similar payment is payable by either party in connection with termination of the Exchange Agreement.
On March 28, 2025, Arcadia entered into an agreement with Bioceres Crop Solutions Corp. ("BIOX") pursuant to which BIOX agreed to transfer to the Company all rights and materials relating to certain soy traits that were included in licenses granted by the Company to BIOX in the November 2020 sale of Verdeca. In addition, BIOX agreed to pay a total of $750,000 to the Company. The Company agreed to transfer to BIOX all of the Company's granted patents, pending applications, related materials and documents related to the Company's reduced gluten and oxidative stability patents. In addition, the parties agreed to amend a previous agreement between the parties to eliminate any obligation to pay the Company future product royalties under the agreement.
On May 26, 2025, Arcadia entered into a License Termination and Patent Non-Assert Agreement (the "Bioseed Agreement") with Bioseed Research India, a division of DCM Shriram Limited ("Bioseed"). Pursuant to the Bioseed Agreement, the parties agreed to terminate a license agreement previously entered into by Arcadia and Bioseed in 2012, Arcadia agreed to not assert its rights under a patent held by Arcadia regarding certain products commercialized or that may be commercialized by Bioseed, and Bioseed agreed that if as a result of any such commercialization by Bioseed any amounts become payable to a third party pursuant to an agreement previously entered into between Arcadia and the third party, Bioseed will pay such amounts to the third party.
Tariffs
Commencing in April 2025, the U.S. government announced and imposed a series of reciprocal tariffs on most U.S. trading partners in reliance on the International Economic Emergency Power Act, or IEEPA. Effective August 7, 2025, the U.S. government implemented a 19% reciprocal tariff rate on goods originating from Thailand, where our coconut water is sourced and processed. In October 2025, the United States and Thailand reached a preliminary framework agreement on reciprocal trade, which maintains a 19% rate while identifying certain product categories that may be eligible for a zero percent reciprocal tariff rate; however the scope and implementation timeline of those exemptions remain subject to further negotiation.
On February 20, 2026, the U.S. Supreme Court ruled that the use of the IEEPA to impose tariffs was not authorized by Congress, invalidating a significant portion of tariffs announced in April 2025. While the ruling struck down the IEEPA-based tariffs, it does not prevent the administration from imposing tariffs using other legal or statutory authorities. Following the decision, the administration signed a new executive order to impose new duties and announced a 10% global tariff on imports entering the United States (subject to certain exceptions) under Section 122 of the Trade Act of 1974, which provides for tariffs up to 15% for a period of up to 150 days unless extended by Congress. The administration has indicated its intention to pursue alternative statutory mechanisms to reinstate or impose new tariffs. As a result, there remains substantial uncertainty regarding future tariff rates and the countries and products to which such tariffs would apply. We continue to evaluate the potential impact of these tariffs on our cost of goods sold, including opportunities for product classification optimization under applicable Harmonized Tariff Schedule codes. The full impact of tariffs on the Company remains uncertain as tariff policy continues to evolve and in light of legal challenges to the tariff framework. We are actively working with our customs brokers, logistics partners, and business partners to identify and implement mitigation strategies.
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Our Products
Zola Coconut Water
Zola Coconut Water joined the Arcadia family of brands in May 2021. Sourced from Thailand, where coconuts are grown, harvested, and packaged at origin, Zola delivers a pure, natural coconut water with a crisp, clean taste that is slightly sweet and refreshingly hydrating. Naturally rich in electrolytes, Non-GMO Project Verified, and only 60 calories per serving, Zola is the superior way to rehydrate, reset, and reenergize. Available in original, original with pulp, espresso, and pineapple flavors, Zola is sold through grocery retailers and foodservice distributors across the U.S.
Agronomic Wheat Traits
As a result of the various agreements and transactions described above, Arcadia no longer retains any effective commercialization rights to its portfolio of wheat patents. Therefore, the Company does not expect to receive any license or royalty fees in the future related to any wheat-based intellectual property rights.
Discontinued Operations
As described above, Arcadia exited the GoodWheat brand. In accordance with the provisions of ASC 205-20, Arcadia has separately reported the assets and liabilities of the discontinued operation in the consolidated balance sheets and the results of the discontinued operation as a separate component on the consolidated statements of operations and comprehensive loss for all periods presented. See Note 4 to the consolidated financial statements for further information on discontinued operations.
Components of Our Statements of Operations Data
Revenues
Product revenues
Product revenues consist primarily of sales of Zola and GLA products. GLA oil sales ceased as of the end of 2024. We recognize revenue from product sales when control of the product is transferred to third-party distributors and retailers, collectively “our customers,” which generally occurs upon delivery. Revenues fluctuate depending on the timing of shipments of product to our customers and are reported net of estimated chargebacks, returns and losses.
License revenues
License revenues consist of up-front, nonrefundable license fees, annual license fees, and subsequent milestone payments that we receive under our license agreements. Licensed revenues ceased as of the end of 2024.
Royalty Revenues
Royalty revenues consist of amounts earned from the sale of commercial products that incorporate the Company's traits by third parties. Royalty revenues ceased as of the end of 2024.
Operating Expenses
Cost of revenues
Cost of revenues primarily relates to the sale of Zola products and consists primarily of product and freight costs. Adjustments or write-downs to inventory are also included in cost of revenues.
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Research and development expenses ("R&D")
Research and development expenses consist of costs incurred in the development and testing of our products. These expenses currently consist primarily of fees paid to product formulation consultants and are expensed as incurred.
Gain on sale of intangible assets
Gain on sale of intangible assets consists of the gain on sale of our reduced gluten and oxidative stability patent portfolios in 2025 and our RS durum wheat trait to Corteva in 2024.
Impairment of property and equipment
Impairment of property and equipment includes losses from tangible assets due to impairment or recoverability test charges to write down fixed assets to their fair value or recoverability value.
Change in fair value of contingent consideration
Change in the fair value of contingent consideration is comprised of the gain associated with the reduction of our contingent liability as the result of a decision to abandon, assign or transfer a program that was previously accrued.
Selling, general and administrative expenses
Selling, general and administrative expenses consist primarily of employee costs, professional service fees, broker and sales commission fees, and overhead costs.
Interest income
Interest income consists of interest income on our cash and cash equivalents, investments and note receivable.
Credit loss
Credit loss consists primarily of a reserve established related to the Above Food note receivable.
Other income
Other income consists primarily of a gain recognized related to the receipt of Above Food Ingredients, Inc. ("AFII") common stock as well as unrealized gain recognized subsequent to the receipt of the AFII common stock.
Change in the estimated fair value of common stock warrant and option liabilities
Change in the estimated fair value of common stock warrant and option liabilities is comprised of the fair value remeasurement of the liabilities associated with our financing transactions.
Net loss from discontinued operations
Net loss from discontinued operations represents results of operations related to the discontinued GoodWheat brand. See Note 4 to the consolidated financial statements for further information on discontinued operations.
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Results of Operations
Comparison of the Years Ended December 31, 2025 and 2024
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Year Ended |
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$ Change |
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% Change |
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2025 |
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2024 |
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(in thousands) |
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Revenues: |
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|
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|
|
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|
|
|
|
|
||||
Product |
|
$ |
4,858 |
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|
$ |
5,012 |
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|
$ |
(154 |
) |
|
|
-3 |
% |
License |
|
|
— |
|
|
|
7 |
|
|
|
(7 |
) |
|
|
-100 |
% |
Royalty |
|
|
— |
|
|
|
26 |
|
|
|
(26 |
) |
|
|
-100 |
% |
Total revenues |
|
|
4,858 |
|
|
|
5,045 |
|
|
|
(187 |
) |
|
|
-4 |
% |
Operating expenses (income): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues |
|
|
3,098 |
|
|
|
2,963 |
|
|
|
135 |
|
|
|
5 |
% |
Research and development |
|
|
9 |
|
|
|
53 |
|
|
|
(44 |
) |
|
|
-83 |
% |
Gain on sale of intangible assets |
|
|
(750 |
) |
|
|
(4,000 |
) |
|
|
3,250 |
|
|
|
81 |
% |
Impairment of property and equipment |
|
|
— |
|
|
|
36 |
|
|
|
(36 |
) |
|
|
-100 |
% |
Change in fair value of contingent consideration |
|
|
(2,000 |
) |
|
|
— |
|
|
|
(2,000 |
) |
|
|
-100 |
% |
Selling, general and administrative |
|
|
7,001 |
|
|
|
9,641 |
|
|
|
(2,640 |
) |
|
|
-27 |
% |
Total operating expenses |
|
|
7,358 |
|
|
|
8,693 |
|
|
|
(1,335 |
) |
|
|
-15 |
% |
Loss from operations |
|
|
(2,500 |
) |
|
|
(3,648 |
) |
|
|
1,148 |
|
|
|
31 |
% |
Interest income |
|
|
221 |
|
|
|
782 |
|
|
|
(561 |
) |
|
|
-72 |
% |
Credit loss |
|
|
(4,745 |
) |
|
|
— |
|
|
|
(4,745 |
) |
|
|
-100 |
% |
Other income, net |
|
|
2,309 |
|
|
|
31 |
|
|
|
2,278 |
|
|
|
7348 |
% |
Change in fair value of common stock warrant and option liabilities |
|
|
2,384 |
|
|
|
(1,474 |
) |
|
|
3,858 |
|
|
|
262 |
% |
Net loss from continuing operations before income taxes |
|
|
(2,331 |
) |
|
|
(4,309 |
) |
|
|
1,978 |
|
|
|
46 |
% |
Income tax expense |
|
|
(8 |
) |
|
|
(8 |
) |
|
|
— |
|
|
|
— |
|
Net loss from continuing operations |
|
|
(2,339 |
) |
|
|
(4,317 |
) |
|
|
1,978 |
|
|
|
46 |
% |
Net loss from discontinued operations — GoodWheat |
|
|
— |
|
|
|
(2,721 |
) |
|
|
2,721 |
|
|
|
100 |
% |
Net loss attributable to common stockholders |
|
$ |
(2,339 |
) |
|
$ |
(7,038 |
) |
|
$ |
4,699 |
|
|
|
67 |
% |
19
Table of Contents
Revenues
Product revenues decreased $154,000, or 3%, in 2025 compared to 2024, driven by the loss of GLA oil sales in 2025 compared to sales of $756,000 in 2024. Zola revenues increased $701,000, or 17%, compared to 2024 primarily driven by an increase in distribution resulting in higher sales volume. The Company did not implement any price increases in 2024 or 2025.
License revenues were $7,000 in 2024. There were no license revenues in 2025.
Royalty revenues were $26,000 in 2024 related to HB4 soybeans. There were no royalty revenues in 2025.
Operating expenses (income)
Cost of revenues
Cost of revenues increased by $135,000, or 5%, in 2025 compared to 2024 driven by a 17% increase in Zola sales, which increased product costs and freight expenses. Cost of revenues for 2024 also included a write-down of $154,000 related to hemp and GoodWheat seed.
Research and development expenses
Research and development expenses decreased by $44,000, or 83%, in 2025 compared to 2024, reflecting our strategy to develop the Zola brand by leveraging our existing resources and minimizing new investment.
Gain on sale of intangible assets
During 2025, the Company realized a gain of $750,000 related to the sale of our reduced gluten and oxidative stability patent portfolios. During 2024, the Company realized a gain of $4.0 million related to the sale of its RS durum wheat trait to Corteva.
Impairment of property and equipment
During 2024, the Company recognized impairment of property and equipment held for sale related to its Archipelago Ventures Hawaii, LLC joint venture of $36,000 based on estimated market prices. There was no such impairment of property and equipment during 2025.
Change in fair value of contingent consideration
During 2025, the change in the fair value of contingent consideration was due to the gain of $2.0 million associated with the reduction of our contingent liability as the result of a decision to abandon one of two remaining programs and transfer the other to a third party with respect to which a contingent liability was previously accrued. See Note 14 to the consolidated financial statements for details. There was no change in fair value of contingent consideration during 2024.
Selling, General, and Administrative
Selling, general, and administrative expenses decreased by $2.6 million, or 27%, in 2025 compared to 2024 driven primarily by operating costs and employee related costs in 2024 that were absent in 2025.
20
Table of Contents
Interest income
During 2025, the Company recognized interest income of $221,000, of which $180,000 was related to discount amortization and accrued interest on the promissory note from Above Food. The remaining difference was related to interest from investments. Discount amortization and interest recognition on the promissory note from Above Food ceased as of the second quarter of 2025 upon recognition of the credit loss. Refer to Note 8 to the consolidated financial statements for more information. During 2024, the Company recognized interest income of $782,000, of which $310,000 was related to discount amortization and accrued interest on the promissory note from Above Food. The remaining difference was related to interest from investments.
Credit loss
During 2025, the Company recognized credit loss of $4.7 million primarily related to the establishment of a credit loss for the remaining $4.0 million principal amount of the Above Food note receivable, plus accrued interest of $421,000. There was no such loss recognized during 2024.
Other income, net
During 2025, the Company recognized other income of $2.3 million driven by a gain recognized related to the receipt of AFII common stock as well unrealized gain recognized subsequent to the receipt of the AFII common stock. Refer to Notes 7 and 8 to the consolidated financial statements for further information on the AFII common stock. During 2024, the Company recognized other income of $31,000.
Change in fair value of common stock warrant and option liabilities
The change in the estimated fair value of common stock warrant and option liabilities resulted in a gain of $2.4 million and a loss of $1.5 million during 2025 and 2024, respectively, related to the change in the estimated fair value of the liability classified preferred investment options issued in connection with the March 2023 Private Placement and August 2022 Registered Direct Offering financing transactions. The primary driver for the change in estimated fair value of common stock warrant and option liabilities was the change in stock price during each year.
Income tax expense
The income tax provision resulted in an expense of $8,000 during each of 2025 and 2024.
Net loss from discontinued operations
Net loss from discontinued operations for GoodWheat was $2.7 million during 2024, reflecting the sale of the GoodWheat brand and related assets to Above Food during the second quarter of 2024. See Note 4 to the consolidated financial statements for further information on discontinued operations.
Seasonality
The coconut water category, similar to other beverages, is seasonal. Generally, sales volumes are highest during our second and third fiscal quarters when the weather is warmer.
Liquidity and Capital Resources
We have funded our operations primarily with the net proceeds from our private and public offerings of our equity securities as well as proceeds from the sale of our products and payments under license agreements. Our principal use of cash is to fund our operations, which are primarily focused on commercializing our products. Our contractual obligations are primarily related to our operating leases. As of December 31, 2025, we had cash and cash equivalents of $0.3 million. In addition, in January 2026, we received gross proceeds of approximately $2.1 million, prior to deducting placement agent fees and offering expenses, from the exercise of certain previously outstanding preferred investment options to purchase an aggregate of 808,595 shares of common stock, pursuant to inducement letter agreements that we entered into with certain holders of previously outstanding preferred investment options.
21
Table of Contents
For the years ended December 31, 2025 and 2024, the Company had net losses of $2.3 million and $7.0 million, respectively, and net cash used in operations of $4.7 million and $9.6 million, respectively.
As discussed in Note 8 to the consolidated financial statements, Above Food did not make the first $2.0 million principal payment plus accrued interest on the promissory note given by Above Food to the Company ("Promissory Note") pursuant to the asset purchase agreement between the Company and Above Food relating to the sale of the GoodWheat brand and related assets to Above Food in May 2024, and substantial doubt exists whether Above Food will make any cash payments with respect to the Promissory Note. Failure to make the first cash principal payment due under the Promissory Note had a material adverse effect on the Company's cash resources and financial position. In addition, although as described in Note 8, approximately 2.7 million shares of Above Food's parent company AFII ("Parent Shares") have been issued to the Company pursuant to a notice previously delivered by the Company, uncertainty exists regarding whether additional Parent Shares will be issued in satisfaction of Above Food's other obligations under the Promissory Note, when any Parent Shares will be able to be freely resold pursuant to Rule 144 or otherwise, or the amount of net proceeds to Arcadia that might result from a sale of any such Parent Shares.
Going Concern; Material Cash Requirements
We believe that our existing cash and cash equivalents will not be sufficient to meet our anticipated cash requirements for at least the next 12 months from the issuance date of these financial statements, which raises substantial doubt about the Company’s ability to continue as a going concern, and the audit opinion on our audited consolidated financial statements includes a going concern qualification. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We will require additional funding in the near term to fund our business and the marketing and sale of our products and to provide working capital to fund other aspects of our business. As noted above, Above Food defaulted on its obligations to pay us amounts due under its Promissory Note to the Company, including the first installment of the Promissory Note due May 14, 2025, and substantial doubt exists whether or when Above Food will be able to make any cash payments with respect to the Promissory Note, or whether additional Parent Shares may be issued to us in satisfaction of Above Food's obligations under the Promissory Note. There are no assurances that required funding will be available at all or will be available in sufficient amounts or on reasonable terms. We may seek to raise additional funds through debt or equity financings, if necessary. We may also consider other strategic alternatives. Any sale of additional equity would result in dilution to our stockholders. In addition, if we are able to sell shares of AFII, the net proceeds from sales of AFII shares may provide a source of funding. However, the AFII shares are restricted securities, and it is not clear when the requirements of Rule 144 will permit a public sale of such shares. In addition, removal of restrictive legends applicable to the shares also requires action by the issuer and its transfer agent in order to remove the legends and facilitate the public resale of the shares. Also, there are no assurances regarding whether or when AFII will file a registration statement covering the resale of the AFII shares as provided for in the Promissory Note or, if filed, when it will become effective. In addition, the market price of AFII common stock is very volatile. If from time to time in the future Arcadia seeks to sell the AFII shares that it holds, there are no assurances regarding the amount of net proceeds to Arcadia that might result from such sales. If we sought to raise funds through debt financing transactions, our incurrence of debt would result in debt service obligations, and the instruments governing our debt could provide for additional operating and financing covenants that would restrict our operations. If we are not able to secure adequate additional funding, we will be forced to reduce our spending, extend payment terms with our suppliers, liquidate assets, or initiate dissolution and liquidation or bankruptcy proceedings. Any of these actions would have a material adverse effect on our business, results of operations and financial condition.
22
Table of Contents
As noted above, through December 31, 2025, we have incurred substantial losses. We will be required to obtain additional cash resources in the near term in order to support our operations and activities. The availability of required additional funding cannot be assured. In addition, an adverse outcome in legal or regulatory proceedings in which we are or could become involved could adversely affect our liquidity and financial position. No assurance can be given as to the timing or ultimate success of obtaining future funds. If we are not able to obtain additional required equity or debt funding, our cash resources would be significantly limited and could become depleted, and we could be required to materially reduce or suspend operations or seek dissolution and liquidation, or bankruptcy protection. In the event of dissolution and liquidation proceedings or bankruptcy proceedings, the creditors of Arcadia would have first claim on the value of the assets of Arcadia which, other than remaining cash, would most likely be liquidated in one or more transactions or a bankruptcy sale, and the common stock of Arcadia likely would have little or no value. Arcadia can give no assurance as to the magnitude of the net proceeds of such a sale and whether such proceeds and available cash would be sufficient to satisfy Arcadia’ obligations to its creditors, let alone to permit any distribution to its equity holders.
Liquidity
The following table summarizes total current assets, current liabilities and working capital for the dates indicated (in thousands):
|
|
As of |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Current assets |
|
$ |
6,356 |
|
|
$ |
9,242 |
|
Current liabilities |
|
|
2,059 |
|
|
|
2,563 |
|
Working capital surplus |
|
$ |
4,297 |
|
|
$ |
6,679 |
|
Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
|
|
Year Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Net cash (used in) provided by: |
|
|
|
|
|
|
||
Operating activities |
|
$ |
(4,739 |
) |
|
$ |
(9,627 |
) |
Investing activities |
|
|
750 |
|
|
|
7,342 |
|
Financing activities |
|
|
6 |
|
|
|
9 |
|
Net decrease in cash and cash equivalents |
|
$ |
(3,983 |
) |
|
$ |
(2,276 |
) |
Cash flows from operating activities
Cash used in operating activities for the year ended December 31, 2025 was $4.7 million. With respect to our net loss of $2.3 million, non-cash charges including the change in fair value of common stock warrant and option liabilities of $2.4 million, change in fair value of contingent consideration of $2.0 million, amortization of note receivable discount of $69,000, a gain on sale of intangible assets of $750,000, a gain on the receipt of AFII common stock of $1.1 million, an unrealized gain subsequent to receipt of AFII common stock of $1.4 million and operating lease payments of $122,000 were offset by $32,000 of depreciation, $122,000 of lease amortization, $234,000 of stock-based compensation, $4.7 million of credit loss and adjustments in our working capital accounts of $96,000.
Cash used in operating activities for the year ended December 31, 2024 was $9.6 million. With respect to our net loss of $7.0 million, non-cash charges including the change in fair value of common stock warrant and option liabilities of $1.5 million, $113,000 of depreciation, $652,000 of lease amortization, $512,000 of stock-based compensation, $154,000 of write-downs of inventory, $36,000 of impairment of property and equipment, offset by $157,000 of amortization of note receivable discount, a gain on disposal of property and equipment of $65,000, a gain on sale of our RS durum wheat trait of $4.0 million, adjustments in our working capital accounts of $596,000, and operating lease payments of $850,000.
23
Table of Contents
Cash flows from investing activities
Cash used in investing activities for the year ended December 31, 2025 consisted of proceeds from the sale of intangible assets of $750,000.
Cash used in investing activities for the year ended December 31, 2024 consisted of proceeds of $334,000 from the sale of property and equipment, proceeds from the sale of investments of $5.0 million, proceeds from the sale of our RS durum wheat trait of $4.0 million, offset by cash paid related to the GoodWheat sale of $2.0 million and $16,000 of purchases of property and equipment.
Cash flows from financing activities
Cash provided by financing activities for the year ended December 31, 2025 consisted of proceeds from the purchase of employee stock purchase plan ("ESPP") shares of $6,000.
Cash provided by financing activities for the year ended December 31, 2024 consisted of proceeds from the purchase of ESPP shares of $9,000.
Off-Balance Sheet Arrangements
Since our inception, we have not engaged in any off-balance sheet arrangements, including the use of structured finance, special purpose entities or variable interest entities, other than Verdeca, a joint venture sold in November 2020.
Critical Accounting Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
We consider our critical accounting estimates to be revenue recognition, determination of the provision for income taxes, and allowance for credit losses.
Revenue recognition
We recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. See Note 2 to the consolidated financial statements appearing elsewhere herein for further detail on each of the below revenue streams.
We generally recognize product revenues once passage of title has occurred, which is generally upon delivery. Shipping and handling costs charged to customers are recorded as revenues and included in cost of revenues at the time the sale is recognized.
We have determined that, at the inception of each license agreement, there is only one deliverable for the license for access to and assistance with the development of the specified intellectual property. We recognize revenue up-front and annual license fees in full when it is deemed probable to be earned.
We recognize royalty revenue when the Company can reasonably determine the amounts earned.
24
Table of Contents
Determination of the provision for income taxes
We use the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
Allowance for credit losses
We estimate the allowance for credit losses based on historical collection trends, the age of outstanding receivables, and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance for credit losses is recorded accordingly.
Recent Accounting Pronouncements
For discussions of the adoption and potential impacts of recently issued accounting standards, refer to Note 3 – Recent Accounting Pronouncements, to the consolidated financial statements appearing elsewhere herein.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
25
Table of Contents
Item 8. Financial Statements and Supplementary Data.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm |
27 |
|
|
Consolidated Balance Sheets |
29 |
|
|
Consolidated Statements of Operations and Comprehensive Loss |
30 |
|
|
Consolidated Statement of Stockholders’ Equity |
31 |
|
|
Consolidated Statements of Cash Flows |
32 |
|
|
Notes to Consolidated Financial Statements |
33 |
26
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Arcadia Biosciences, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Arcadia Biosciences, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has an accumulated deficit, recurring net losses and net cash used in operations, and resources that will not be sufficient to meet its anticipated cash requirements, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
27
Table of Contents
Identification and measurement of credit loss for note receivable – Refer to Note 8 to the financial statements
Critical Audit Matter Description
In 2024, the Company sold its GoodWheat brand and related assets to Above Food Ingredients Corp (“Above Food”) and received a promissory note in connection with the transaction. In 2025, Above Food defaulted on the promissory note and the Company recognized a credit loss of $4.7 million on the promissory note.
We identified the credit loss on the Above Food promissory note as a critical audit matter due to the significant judgment used by management in the initial recognition and measurement of the credit loss. This required a high degree of auditor judgment, subjectivity, and effort to evaluate audit evidence relating to management's initial identification and recognition of such credit loss.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures over the identification and recognition of the contingent features within the promissory note included the following, among others:
/s/ Deloitte & Touche LLP
Tempe, Arizona
March 26, 2026
We have served as the Company's auditor since 2007.
28
Table of Contents
Arcadia Biosciences, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
|
|
As of December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Short-term investments |
|
|
|
|
|
|
||
Accounts receivable and other receivables, net of allowance for credit loss |
|
|
|
|
|
|
||
Inventories |
|
|
|
|
|
|
||
Note receivable — current, net of allowance for credit losses (Note 8) |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Current assets of discontinued operations — GoodWheat |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Right of use assets |
|
|
|
|
|
|
||
Intangible assets, net |
|
|
|
|
|
|
||
Note receivable — noncurrent, net of allowance for credit losses (Note 8) |
|
|
|
|
|
|
||
Other noncurrent assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
Amounts due to related parties |
|
|
|
|
|
|
||
Operating lease liability — current |
|
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Common stock warrant and option liabilities |
|
|
|
|
|
|
||
Other noncurrent liabilities |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
Commitments and contingencies (Note 14) |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Common stock, $ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Total stockholders' equity |
|
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these consolidated financial statements.
29
Table of Contents
Arcadia Biosciences, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and share data)
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Revenues: |
|
|
|
|
|
|
||
Product |
|
$ |
|
|
$ |
|
||
License |
|
|
|
|
|
|
||
Royalty |
|
|
|
|
|
|
||
Total revenues |
|
|
|
|
|
|
||
Operating expenses (income): |
|
|
|
|
|
|
||
Cost of revenues |
|
|
|
|
|
|
||
Research and development |
|
|
|
|
|
|
||
Gain on sale of intangible assets |
|
|
( |
) |
|
|
( |
) |
Impairment of property and equipment |
|
|
|
|
|
|
||
Change in fair value of contingent consideration |
|
|
( |
) |
|
|
|
|
Selling, general and administrative |
|
|
|
|
|
|
||
Total operating expenses |
|
|
|
|
|
|
||
Loss from operations |
|
|
( |
) |
|
|
( |
) |
Interest income |
|
|
|
|
|
|
||
Credit loss |
|
|
( |
) |
|
|
|
|
Other income, net |
|
|
|
|
|
|
||
Change in fair value of common stock warrant and option liabilities |
|
|
|
|
|
( |
) |
|
Net loss from continuing operations before income taxes |
|
|
( |
) |
|
|
( |
) |
Income tax expense |
|
|
( |
) |
|
|
( |
) |
Net loss from continuing operations |
|
|
( |
) |
|
|
( |
) |
Net loss from discontinued operations — GoodWheat |
|
|
|
|
|
( |
) |
|
Net loss attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per share attributable to common stockholders: |
|
|
|
|
|
|
||
Basic and diluted from continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
Basic and diluted from discontinued operations |
|
|
|
|
$ |
( |
) |
|
Net loss per basic and diluted share attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted-average number of shares used in per share calculations: |
|
|
|
|
|
|
||
Basic and diluted |
|
|
|
|
|
|
||
Other comprehensive income, net of tax |
|
|
|
|
|
|
||
Unrealized gains on available-for-sale securities |
|
$ |
|
|
$ |
|
||
Reclassification adjustment for gains on available-for-sale securities included in net loss |
|
|
|
|
|
( |
) |
|
Change in unrealized gains on available-for-sale securities |
|
$ |
|
|
$ |
( |
) |
|
Comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
The accompanying notes are an integral part of these consolidated financial statements.
30
Table of Contents
Arcadia Biosciences, Inc.
Consolidated Statements of Stockholders’ Equity
(In thousands, except share data)
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
|
Non-controlling |
|
|
Total |
|
||||||||||
|
|
Shares |
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
Issuance of shares related to March 2023 pre-funded warrants exercise |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Issuance of shares related to employee stock |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Change in unrealized gains on available-for-sale securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Write-down of non-controlling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||||
Issuance of shares related to employee stock |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Issuance of shares related to employee stock |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Balance at December 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||||
The accompanying notes are an integral part of these consolidated financial statements.
31
Table of Contents
Arcadia Biosciences, Inc.
Consolidated Statements of Cash Flows
(In thousands)
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to cash used in operating activities: |
|
|
|
|
|
|
||
Change in fair value of common stock warrant and option liabilities |
|
|
( |
) |
|
|
|
|
Change in fair value of contingent consideration |
|
|
( |
) |
|
|
|
|
Depreciation |
|
|
|
|
|
|
||
Lease amortization |
|
|
|
|
|
|
||
Amortization of note receivable discount |
|
|
( |
) |
|
|
( |
) |
Gain on disposal of property and equipment |
|
|
|
|
|
( |
) |
|
Gain on sale of intangible assets |
|
|
( |
) |
|
|
( |
) |
Gain on receipt of Above Food Ingredients, Inc. common stock |
|
|
( |
) |
|
|
|
|
Unrealized gain subsequent to receipt of Above Food Ingredients, Inc. common stock |
|
|
( |
) |
|
|
|
|
Stock-based compensation |
|
|
|
|
|
|
||
Credit loss |
|
|
|
|
|
|
||
Write-down of inventories |
|
|
|
|
|
|
||
Impairment of property and equipment |
|
|
|
|
|
|
||
Write-down of non-controlling interest |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable and other receivables |
|
|
|
|
|
( |
) |
|
Inventories |
|
|
( |
) |
|
|
|
|
Prepaid expenses and other current assets |
|
|
|
|
|
( |
) |
|
Other noncurrent assets |
|
|
( |
) |
|
|
|
|
Accounts payable and accrued expenses |
|
|
( |
) |
|
|
( |
) |
Amounts due to related parties |
|
|
( |
) |
|
|
( |
) |
Other current liabilities |
|
|
( |
) |
|
|
|
|
Operating lease payments |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Proceeds from sale of property and equipment |
|
|
|
|
|
|
||
Proceeds from sale of investments |
|
|
|
|
|
|
||
Proceeds from sale of intangible assets |
|
|
|
|
|
|
||
Cash paid related to sale of GoodWheat |
|
|
|
|
|
( |
) |
|
Purchases of property and equipment |
|
|
|
|
|
( |
) |
|
Net cash provided by investing activities |
|
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Proceeds from ESPP purchases |
|
|
|
|
|
|
||
Net cash provided by financing activities |
|
|
|
|
|
|
||
Net decrease in cash and cash equivalents |
|
|
( |
) |
|
|
( |
) |
Cash and cash equivalents — beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents — end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
||
NONCASH TRANSACTIONS: |
|
|
|
|
|
|
||
Right of use assets obtained in exchange for new operating lease liabilities |
|
$ |
|
|
$ |
|
||
Note receivable recognized from sale of GoodWheat |
|
$ |
|
|
$ |
|
||
Fair value of Above Food Ingredients, Inc. common stock received |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these consolidated financial statements.
32
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements
Note 1. Description of Business
Organization
Arcadia Biosciences, Inc. (the "Company," "Arcadia" or "management"), was incorporated in
Arcadia has leveraged its history as a leader in science-based approaches to develop high value products and drive innovation in the consumer goods industry. Since acquiring the assets of Zola in May 2021, Arcadia has provided consumers with a way to rehydrate, reset, and reenergize with Zola coconut water products. Previously, Arcadia developed products, primarily in wheat, which it commercialized through the sale of food products, trait licensing and royalty agreements.
On May 26, 2025, Arcadia entered into a License Termination and Patent Non-Assert Agreement (the "Bioseed Agreement") with Bioseed Research India, a division of DCM Shriram Limited ("Bioseed"). Pursuant to the Bioseed Agreement, the parties agreed to terminate a license agreement previously entered into by Arcadia and Bioseed in 2012, Arcadia agreed to not assert its rights under a patent held by Arcadia regarding certain products commercialized or that may be commercialized by Bioseed, and Bioseed agreed that if as a result of any such commercialization by Bioseed any amounts become payable to a third party pursuant to an agreement previously entered into between Arcadia and the third party, Bioseed will pay such amounts to the third party. As a result, the related $
On March 28, 2025, Arcadia entered into an agreement with Bioceres Crop Solutions Corp. ("BIOX") pursuant to which BIOX agreed to transfer to the Company all rights and materials relating to certain soy traits that were included in licenses granted by the Company to BIOX in the November 2020 sale of Verdeca. In addition, BIOX agreed to pay a total of $
On December 4, 2024, Arcadia, Roosevelt Resources LP (“Roosevelt” or the “Partnership”) and Elliott Roosevelt, Jr. and David A. Roosevelt, in their capacities as representatives of the limited partners of the Partnership entered into a Securities Exchange Agreement (as it may be amended from time to time, the “Exchange Agreement”) providing for the combination of the two companies in an all-stock transaction. Subject to the terms of the Exchange Agreement and to the satisfaction or waiver of the conditions set forth in the Exchange Agreement, at the closing of the transactions Arcadia agreed to issue shares of its common stock to the limited partners and to the sole member of the general partner of Roosevelt (together, the “Limited Partners”) in exchange for all of the limited partnership and other equity interests of Roosevelt (the “Exchange”). The Exchange Agreement, as amended, provided that upon completion of the Exchange, the Limited Partners and the Arcadia stockholders prior to the closing were to own
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Amendment No. 1 to the registration statement on Form S-4. On December 24, 2025, the Company received a notice from Roosevelt indicating that it was terminating the Exchange Agreement with immediate effect pursuant to the Termination Provision, as the closing of the Exchange had not occurred by the Termination Date specified in the Amendment. The Company does not believe that any break-up fee or similar payment is payable by either party in connection with termination of the Exchange Agreement.
On May 16, 2024, Arcadia sold the GoodWheat™ brand to Above Food Corp. ("Above Food") for net consideration of $
On May 14, 2024, Arcadia sold its non-GMO Resistant Starch (“RS”) durum wheat trait to longtime partner Corteva Agriscience (“Corteva”) for total cash consideration of $
In August 2019, the Company entered into a joint venture agreement with Legacy Ventures Hawaii, LLC (“Legacy,” see Note 9) to grow, extract, and sell hemp products. The partnership Archipelago Ventures Hawaii, LLC (“Archipelago”), combined the Company’s genetic expertise and resources with Legacy’s experience in hemp extraction and sales. In October 2021, Arcadia and Legacy mutually agreed to wind down the cultivation activities of Archipelago, due to regulatory challenges and a saturated hemp market.
Liquidity, Capital Resources, and Going Concern
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. Since inception, the Company has financed its operations primarily through equity and debt financings. As of December 31, 2025, the Company had an accumulated deficit of $
With cash and cash equivalents of $
The Company may seek to raise additional funds through debt or equity financings or sales of assets. The sale of additional equity would result in dilution to the Company’s stockholders. The incurrence of debt would result in debt service obligations, and the instruments governing such debt could provide for additional operating and financing covenants that would restrict operations. In addition, the Company may seek to raise additional funds through the sale of shares of Above Food Ingredients, Inc. ("AFII") that are held by the Company, at such times as those shares may be sold. See Note 8. If the Company requires additional funds and is unable to secure adequate additional funding on terms acceptable to the Company, the Company may be forced to reduce spending, extend payment terms with suppliers, or liquidate assets. Any of these actions could materially harm the Company's business, results of operations and financial condition.
34
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note 2. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The consolidated financial statements include the accounts of the Company and Archipelago. All intercompany balances and transactions have been eliminated in consolidation. The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP (“GAAP”), and with the rules of the Securities and Exchange Commission.
The Company uses a qualitative approach in assessing the consolidation requirement for variable interest entities ("VIEs"). This approach focuses on determining whether the Company has the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and whether the Company has the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE.
For all periods presented, the Company has determined that it is the primary beneficiary of Archipelago, a joint venture, as it has a controlling interest in Archipelago. Accordingly, the Company consolidates Archipelago in the consolidated financial statements after eliminating intercompany transactions. For consolidated joint ventures, the non-controlling partner’s share of the assets, liabilities and operations of the joint venture is included in non-controlling interest as equity of the Company. The non-controlling partner’s interest is generally computed as the joint venture partner’s ownership percentage of Archipelago. Non-controlling interest on the consolidated balance sheet was fully written-off as of December 31, 2024.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions in the Company’s consolidated financial statements and notes thereto. Significant estimates and assumptions made by management included the determination of revenue recognition, the provision for income taxes and allowance for credit losses. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Cash and cash equivalents
The Company considers any liquid investment with a stated maturity of three months or less at the date of purchase to be a cash equivalent. Cash and cash equivalents consist of cash on deposit with banks and money-market funds. The Company limits cash investments to financial institutions with high credit standings; therefore, management believes that there is no significant exposure to any credit risk in the Company’s cash and cash equivalents.
35
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Investments in debt and equity securities
Investments in debt and equity securities are carried at fair value and classified as short-term investments. Unrealized gains and losses on debt securities are included in accumulated other comprehensive income (loss), which is reflected as a separate component of stockholder’s equity in the consolidated balance sheets. Unrealized gains and losses on equity securities are recognized in other income, net on the consolidated statements of operations and comprehensive loss. Gains and losses for both debt and equity securities are recognized when realized in the consolidated statements of operations and comprehensive loss. Investment securities are reported as cash and cash equivalent, short-term investments or long-term investments in the consolidated balance sheets based on the nature of the investments and maturity period. Short-term investments have maturities of less than a year and long-term investments have maturities of a year and greater from the balance sheet date.
Other-than-temporary impairments on investments
The Company regularly reviews each of its investments for impairment by determining if the investment has sustained an other-than-temporary decline in its value, in which case the investment is written down to its fair value by a charge to earnings. Factors that are considered by the Company in determining whether an other-than-temporary decline in value has occurred include (i) the market value of the investment in relation to its cost basis, (ii) the financial condition of the investment, and (iii) the Company’s intent and ability to retain the investment for a sufficient period of time to allow for recovery of the market value of the investment. As of December 31, 2025 and 2024, there was
Accounts receivable and other receivables
Accounts receivable represents amounts owed to the Company from product sales, licenses, and royalties. Other receivables represent amounts owed to the Company for miscellaneous non-trade activities including the sale of property and equipment. The carrying value of the Company’s receivables represents estimated net realizable values. The Company generally does not require collateral and estimates the allowance for credit losses based on historical collection trends, the age of outstanding receivables, and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance for credit losses is recorded accordingly. Past-due receivable balances are written off when the Company’s internal collection efforts have been unsuccessful in collecting the amounts due. The Company had an allowance for credit losses of $
Inventory
Inventory costs are tracked on a lot-identified basis and are included as cost of revenues when sold. Inventories are stated at the lower of cost or net realizable value. The Company makes adjustments to inventory when conditions indicate that the net realizable value may be less than cost due to physical deterioration, obsolescence, changes in price levels, or other factors. Additional adjustments to inventory are made for excess and slow-moving inventory on hand that is not expected to be sold within a reasonable timeframe to reduce the carrying amount to its estimated net realizable value.
Inventories consist of coconut water imported from Thailand and freight costs.
The inventories on the balance sheet represents inventory forecasted to be sold or used in production in the next 12 months, as of the balance sheet date, and consist of Zola Coconut water.
Raw materials inventories consists of in-transit Zola Coconut Water. Finished goods inventories consist of Zola Coconut Water that are available for sale.
36
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note receivable
In connection with the sale of GoodWheat assets to Above Food, the Company received a $
The promissory note was assessed using the current expected credit loss (“CECL”) model. As a result of the assessment, the Company recorded a reserve for the outstanding principal amount of $
Property and equipment
Property and equipment acquisitions are recorded at cost.
|
|
Years |
|
Software and computer equipment |
|
|
|
Machinery and equipment |
|
|
|
Furniture and fixtures |
|
|
|
Leasehold improvements |
|
* |
*Leasehold improvements are depreciated over the shorter of the estimated life of the asset or the remaining life of the lease.
The Company evaluates if events and circumstances have occurred that indicate the remaining estimated useful life of fixed assets may warrant revision or that the remaining balance of these assets may not be recoverable. In evaluating for recoverability, the Company estimates the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. In the event that the balance of any asset exceeds the future undiscounted cash flow estimate, impairment is recognized based on the excess of the carrying amounts of the asset above its estimated fair value.
Fair value of financial instruments
Fair value accounting is applied for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Assets and liabilities recorded at fair value in the consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities, are as follows:
37
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Concentration of risk
Cash and cash equivalents are maintained with several financial institutions. Deposits held with banks may exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and are maintained with financial institutions with reputable credit and therefore bear minimal credit risk. The Company seeks to mitigate its credit risks by spreading such risks across multiple counterparties and monitoring the risk profiles of these counterparties.
Customer concentration
Significant customers are those that represent greater than 10% of the Company’s total revenues or gross accounts receivable balance at each respective balance sheet date.
Customers representing greater than 10% of accounts receivable were as follows (in percentages):
|
|
As of |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Customer C |
|
|
|
|
|
|
||
Customer D |
|
|
|
|
|
|
||
Customer E |
|
|
|
|
|
|
||
Customer G |
|
|
|
|
|
|
||
Customers representing greater than 10% of total revenues were as follows (in percentages):
|
|
For Year Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Customer B |
|
|
|
|
|
|
||
Customer C |
|
|
|
|
|
|
||
Customer E |
|
|
|
|
|
|
||
Customer F |
|
|
|
|
|
|
||
Customer G |
|
|
|
|
|
|
||
Customer H |
|
|
|
|
|
|
||
Stock-based compensation
The Company recognizes compensation expense related to its employee stock purchase plan and the cost of stock-based compensation awards on a straight-line basis over the requisite service period, net of estimated forfeitures. Judgment is required in estimating the amount of stock-based awards that will be forfeited prior to vesting. Compensation expense could be revised in subsequent periods if actual forfeitures differ from those estimates. The Company has selected the Black-Scholes option-pricing model and various inputs to estimate the fair value of its stock-based awards. See Note 13 for additional information.
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Research and development |
|
$ |
|
|
$ |
|
||
Selling, general and administrative |
|
|
|
|
|
|
||
Total stock-based compensation |
|
$ |
|
|
$ |
|
||
38
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Income taxes
The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.
Net loss per share
Basic net loss per share, which excludes dilution, is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options, convertible promissory notes, convertible preferred stock, redeemable convertible preferred stock and warrants, result in the issuance of common stock which share in the losses of the Company. Certain potential shares of common stock have been excluded from the computation of diluted net loss per share as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce the loss per share. Due to net losses, there is no impact on earnings per share calculation in applying the two-class method since the participating securities have no legal requirement to share in any losses.
Revenue recognition
The Company derives its revenues from product sales, licensing agreements and royalty fees.
Product revenues
Product revenues consist primarily of sales of Zola and GLA products. GLA oil sales ceased as of the end of 2024. We recognize revenue from product sales when control of the product is transferred to third-party distributors and retailers, collectively “our customers,” which generally occurs upon delivery. Revenues fluctuate depending on the timing of shipments of product to our customers and are reported net of estimated chargebacks, returns and losses.
License revenues
License revenues consist of up-front, nonrefundable license fees, annual license fees, and subsequent milestone payments that the Company receives under the Company’s research and license agreements. The Company recognizes revenue generated from up-front, nonrefundable license fees upon execution of the agreement and recognizes annual license fees when it is probable that a material reversal will not occur. Licensed revenues ceased as of the end of 2024.
Royalty revenues
Royalty revenues consist of amounts earned from the sale of commercial products that incorporate the Company's traits by third parties. Royalty revenues consist of a minimum annual royalty, offset by amounts earned from the sale of products. The Company recognizes the minimum annual royalty on a straight-line basis over the year, and the Company recognizes royalty revenue resulting from the sale of products when the third parties transfer control of the product to their customers, which generally occurs upon shipment. Royalty revenues ceased as of the end of 2024.
Unearned revenue
The Company defers revenue to the extent that cash received in conjunction with a license agreement is not yet earned in accordance with the Company policies.
39
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
The opening and closing accounts and other receivables balances for the year ended December 31, 2025 were $
Cost of revenues
Cost of revenues primarily relates to the sale of Zola products and consists primarily of product and freight costs. Adjustments or write-downs to inventory are also included in cost of revenues.
Change in the estimated fair value of common stock warrant and option liabilities
Change in the estimated fair value of common stock warrant and option liabilities is comprised of the fair value remeasurement of liability classified common stock warrants and options. See Note 7.
Note 3. Recent Accounting Pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures. The amendments in this update require additional income tax disclosures primarily related to the rate reconciliation and income taxes paid. The new guidance is effective either prospectively or retrospectively, for fiscal years beginning after December 15, 2024, with
In November 2024, the FASB issued ASU No. 2024-03, Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update, among other things, require quantitative disclosures for employee compensation, selling expenses and purchases of inventory. The new guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this update on its financial statements and disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments — Credit Losses (Topic 326) — Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide all entities with a practical expedient and entities other than public business entities with an accounting policy election when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The amendments will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this update on its financial statements and disclosures.
Note 4. Discontinued Operations
On May 16, 2024, the Company sold the GoodWheat brand and related assets to Above Food. GoodWheat operations ceased during the second quarter of 2024.
In accordance with the provisions of ASC 205-20, the Company has separately reported the assets and liabilities of the discontinued operation in the consolidated balance sheets and the results of the discontinued operation as a separate component on the consolidated statements of operations and comprehensive loss for all periods presented.
Major classes of line items constituting the balance sheet of discontinued operations:
(In thousands) |
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Assets |
|
|
|
|
|
|
||
Accounts receivable and other receivables |
|
$ |
|
|
$ |
|
||
Total assets |
|
$ |
|
|
$ |
|
||
40
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Major classes of line items constituting net loss from discontinued operations:
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
(In thousands) |
|
|
|
|
|
|
||
Product revenue |
|
$ |
|
|
$ |
|
||
Cost of revenues |
|
|
|
|
|
( |
) |
|
Research and development |
|
|
|
|
|
( |
) |
|
Gain on sale of property and equipment |
|
|
|
|
|
|
||
Selling, general and administrative |
|
|
|
|
|
( |
) |
|
Net loss from discontinued operations |
|
$ |
|
|
$ |
( |
) |
|
The following table presents significant cash and non-cash items of discontinued operations:
|
|
Year Ended December 31, |
|
|||||
(In thousands) |
|
2025 |
|
|
2024 |
|
||
Depreciation |
|
$ |
|
|
$ |
|
||
Write-down of inventories |
|
$ |
|
|
$ |
|
||
Gain on disposal of property and equipment |
|
$ |
|
|
$ |
( |
) |
|
Accounts receivable and other receivables |
|
$ |
|
|
$ |
( |
) |
|
Inventories |
|
$ |
|
|
$ |
( |
) |
|
Prepaid expenses and other current assets |
|
$ |
|
|
$ |
|
||
Accounts payable and accrued expenses |
|
$ |
|
|
$ |
( |
) |
|
Proceeds from sale of property and equipment |
|
$ |
|
|
$ |
|
||
There were no other significant operating or investing cash or non-cash items for the years ended December 31, 2025 and 2024.
Note 5. Inventory
Inventory costs are tracked on a lot-identified basis and are included as cost of revenues when sold. Inventories are stated at the lower of cost or net realizable value. The Company makes adjustments to inventory when conditions indicate that the net realizable value may be less than cost due to physical deterioration, obsolescence, changes in price levels, or other factors. Additional adjustments to inventory are made for excess and slow-moving inventory on hand that is not expected to be sold within a reasonable timeframe to reduce the carrying amount to its estimated net realizable value. The write-downs to inventory are included in cost of revenues and are based upon estimates about future demand from the Company’s customers and distributors and market conditions. The Company recorded a write-down of $
Inventories consist of the following (in thousands):
|
|
December 31, |
|
|
December 31, |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Finished goods |
|
|
|
|
|
|
||
Inventories |
|
$ |
|
|
$ |
|
||
41
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note 6. Property and Equipment, Net
Property and equipment, net consisted of the following (in thousands):
|
|
As of December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Software and computer equipment |
|
|
|
|
|
|
||
Furniture and fixtures |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Property and equipment, gross |
|
|
|
|
|
|
||
Less: accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense was $
During the first quarter of 2024, the Company recorded an impairment of $
Note 7. Investments and Fair Value Instruments
Investments
The Company classified its investments in corporate securities of AFII as short-term investments. The investments were carried at fair value, based on quoted market prices. Unrealized and realized gains and losses are recognized as other income in the consolidated statements of operations and comprehensive loss. As of December 31, 2025, the fair value of the AFII common stock was $
The following table summarize the amortized cost and fair value of the investment securities portfolio at December 31, 2024:
(Dollars in thousands) |
|
Amortized |
|
|
Unrealized |
|
|
Unrealized |
|
|
Estimated |
|
||||
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total Assets at Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company did
Fair Value Measurement
The fair value of the investment securities at December 31, 2025 and 2024 were as follows:
|
|
Fair Value Measurements at December 31, 2025 |
|
|||||||||||||
(Dollars in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets at Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total Assets at Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
42
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
|
|
Fair Value Measurements at December 31, 2024 |
|
|||||||||||||
(Dollars in thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Assets at Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Total Assets at Fair Value |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during 2025 or 2024. The Company’s financial instruments consist primarily of cash and cash equivalents, short-term investments, accounts receivable and other receivables, accounts payable and accrued liabilities. For short-term investments, accounts receivable and other receivables, accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of December 31, 2025 and 2024 were considered representative of their fair values due to their short term to maturity or repayment. Cash equivalents are carried at cost, which approximates their fair value.
The Company’s Level 3 liabilities consist of preferred investment options related to the March 2023 Private Placement and August 2022 Registered Direct offerings.
The preferred investment option liabilities were measured and recorded on a recurring basis using the Black-Scholes Model with the following assumptions at December 31, 2025 and 2024:
|
|
March 2023 Options - Series A & |
|
|
August 2022 Options & August 2022 Placement Agent Options |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
|
December 31, |
|
||||
Remaining term (in years) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expected volatility |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Risk-free interest rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
Expected dividend yield |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The significant unobservable input used in the fair value measurement of the Company’s Level 3 warrant liabilities is volatility. A significant increase (decrease) in volatility could result in a significantly higher (lower) fair value measurement.
The following table sets forth the establishment of the Company’s Level 3 liabilities, as well as a summary of the changes in the fair value and other adjustments (in thousands):
(Dollars in thousands) |
|
March 2023 |
|
|
March 2023 Placement Agent Options |
|
|
August 2022 |
|
|
August 2022 |
|
|
Note Receivable Bifurcated Derivatives |
|
|
Contingent |
|
|
Total |
|
|||||||
Balance as of December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Change in fair value and |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance as of December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
43
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note 8. Note Receivable and Embedded Derivatives
On May 16, 2024, the Company sold the GoodWheat brand and related assets to Above Food for net consideration of $
In connection with the transaction, Arcadia received a $
The Company accounted for the Promissory Note as a note receivable in accordance with ASC 310. The Company did not elect the fair value option and since the Company intended to and had the ability to hold the Promissory Note to maturity, it was previously classified as held for investment and was reported on the consolidated balance sheets at amortized cost.
The Promissory Note was recorded at a discount of $
On May 1, 2025, Arcadia delivered a notice (the "Notice") to Above Food pursuant to the provisions of the Promissory Note, to require Above Food to cause AFII to issue Parent Shares to Arcadia. Pursuant to the provisions of the Promissory Note regarding the calculation and determination of the number of Parent Shares that are issuable in connection with delivery of a notice, the number of Parent Shares issuable are approximately
44
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
The first payment of $
As of the date that these financial statements were available to be issued, substantial doubt exists regarding whether additional Parent Shares may be issued in satisfaction of Above Food's other obligations under the Promissory Note. In light of the above uncertainties, the Company recorded a credit loss for the full $
Embedded Derivatives
The contingent features of the Promissory Note were evaluated for bifurcation in accordance with ASC 815. The contingent features requiring bifurcation had an estimated fair value of $
Note 9. Consolidated Joint Venture
In 2019, the Company and Legacy Ventures Hawaii, LLC, a Nevada limited liability company (“Legacy”), formed Archipelago Ventures Hawaii, LLC, a Delaware limited liability company and entered into a Limited Liability Company Operating Agreement. The Company and Legacy formed Archipelago to develop, extract and commercialize hemp-derived products from industrial hemp grown in Hawaii.
In October 2021, Arcadia and Legacy mutually agreed to wind down the cultivation activities of Archipelago, due to regulatory challenges and a saturated hemp market.
Note 10. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consisted of the following (in thousands):
|
|
As of December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Accounts payable - trade |
|
$ |
|
|
$ |
|
||
Payroll and benefits |
|
|
|
|
|
|
||
Royalty fees due to unrelated parties |
|
|
|
|
|
|
||
Audit and tax fees |
|
|
|
|
|
|
||
Legal |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
45
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note 11. Collaborative Arrangements
In
The Company accounted for research and development (“R&D”) costs in accordance ASC 730, Research and Development, which states R&D costs must be charged to expense as incurred. Accordingly, internal R&D costs are expensed as incurred. Third-party R&D costs are expensed when the contracted work has been performed or as milestone results are achieved.
On May 14, 2024, the Company sold its RS durum wheat trait to Corteva. Under the terms of the agreement, Arcadia retained certain rights to use the RS durum wheat trait. The Company received a $
46
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note 12. Warrants and Options
Equity Classified Common Stock Warrants
The Company issued the following warrants to purchase shares of its common stock, which are outstanding as of December 31, 2025 and 2024, respectively. These warrants are exercisable any time at the option of the holder until their expiration date.
|
|
Issuance Date |
|
Term |
|
Exercise |
|
|
Exercised |
|
|
Outstanding at |
|
|
Exercised |
|
|
Outstanding at |
|
|||||
March 2023 Pre-Funded Warrants |
|
|
|
$ |
|
|
|
( |
) |
|
|
|
|
|
|
|
||||||||
December 2022 Service and Performance Warrants (1) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
October 2022 Service and Performance Warrants (1) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
January 2021 Placement Agent Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 2020 Warrants (2) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 2020 Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
December 2020 Placement Agent Warrants (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
July 2020 Warrants (2) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
July 2020 Placement Agent Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
May 2020 Warrants (2) (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
May 2020 Warrants (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
May 2020 Placement Agent Warrants (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
January 2021 Warrants (2) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
January 2021 Warrants |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
September 2019 Warrants (2) (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
September 2019 Warrants (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
June 2019 Warrants (3) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Total |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
||||
(1) The Company issued service and performance warrants (“Service and Performance Warrants”) in connection with professional services agreements with non-affiliated third party entities.
(2) These warrants were repriced as part of the March 2023 Private Placement offering.
(3) These warrants expired during the year ended December 31, 2025.
47
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Liability Classified Preferred Investment Options
The preferred investment options issued in connection with the March 2023 Private Placement and August 2022 Registered Direct offerings contain certain early settlement provisions that preclude them from equity classification and therefore were accounted for as liabilities at the date of issuance and are adjusted to fair value at each balance sheet date. The change in fair value of the options liabilities is recorded as change in fair value of common stock warrant and option liabilities in the consolidated statements of operations and comprehensive loss.
|
|
Issuance Date |
|
Term |
|
Exercise |
|
|
Exercised |
|
|
Outstanding at |
|
|
Exercised |
|
|
Outstanding at |
|
|||||
March 2023 Options - Series A |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
March 2023 Placement Agent Options |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
August 2022 Options (1) |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
August 2022 Placement Agent Options |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(1) These options were repriced as part of the March 2023 Private Placement offering.
See Note 7 for the Black-Scholes option-pricing model and weighted-average assumptions used to estimate the fair value of the preferred investment options liabilities.
Note 13. Stock-Based Compensation and Employee Stock Purchase Program
Stock Incentive Plans
The Company had
In 2006, the Company adopted the 2006 Plan, which provided for the granting of stock options to executives, employees, and other service providers under terms and provisions established by the Board of Directors. The Company granted non-statutory stock options (“NSOs”) under the 2006 Plan until May 2015, when it was terminated as to future awards, although it continues to govern the terms of options that remain outstanding and were issued under the 2006 Plan.
48
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
On June 25, 2024, the shareholders approved an amendment to the Company’s 2015 Plan that increased the number of shares of common stock that may be issued under the 2015 Plan by
The following is a summary of stock option information and weighted average exercise prices under the Company’s stock incentive plans (in thousands, except share data and price per share):
|
|
Shares |
|
|
Weighted- |
|
|
Aggregate |
|
|||
Outstanding — Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|||
Options granted |
|
|
|
|
|
|
|
|
|
|||
Options exercised |
|
|
|
|
|
|
|
|
|
|||
Options forfeited |
|
|
( |
) |
|
|
|
|
|
|
||
Options expired |
|
|
( |
) |
|
|
|
|
|
|
||
Outstanding — Balance at December 31, 2024 |
|
|
|
|
|
|
|
|
|
|||
Options granted |
|
|
|
|
|
|
|
|
|
|||
Options exercised |
|
|
( |
) |
|
|
|
|
|
|
||
Options forfeited |
|
|
( |
) |
|
|
|
|
|
|
||
Options expired |
|
|
( |
) |
|
|
|
|
|
|
||
Outstanding — Balance at December 31, 2025 |
|
|
|
|
|
|
|
|
|
|||
Vested and expected to vest — December 31, 2025 |
|
|
|
|
|
|
|
|
|
|||
Exercisable —December 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|||
Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock determined by its Board of Directors for each of the respective periods.
As of December 31, 2025, there was $
In determining the fair value of the stock-based awards, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine.
Expected Term—The expected term is the estimated period of time outstanding for stock options granted and was estimated based on a simplified method allowed by the SEC, and defines the term as the average of the contractual term of the options and the weighted-average vesting period for all open employee awards.
Expected Volatility—The historical volatility data was computed using the daily closing prices for the Company’s shares during the equivalent period of the calculated expected term of the stock-based awards.
Risk-Free Interest Rate—The risk-free interest rate is based on the interest rate of U.S. Treasuries of comparable maturities on the date the options were granted.
49
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Expected Dividend—The expected dividend yield is based on the Company’s expectation of future dividend payouts to common stockholders.
The fair value of stock option awards was estimated at the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumption:
|
|
Year Ended December 31, |
|
|||||
Assumptions |
|
2025 |
|
|
2024 |
|
||
Expected term (years) |
|
|
|
|
|
|
||
Expected volatility |
|
|
% |
|
|
% |
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Expected dividend yield |
|
|
|
|
|
|
||
The weighted-average, estimated grant date fair value of employee stock options granted during the years ended December 31, 2025 and 2024 was $
Employee Stock Purchase Plan
The Company’s 2015 Employee Stock Purchase Plan (“ESPP”) became effective on May 14, 2015. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount of up to
50
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note 14. Commitments and Contingencies
Leases
The Company leases office space under an operating lease agreement with an initial lease term of
Legal Matters
From time to time, the Company may be subject to legal proceedings, actions, claims, suits, or investigations arising from the ordinary course of our business, including actions with respect to intellectual property claims, breach of contract claims, claims relating to our products, labor and employment claims and other matters. Any litigation or other proceedings could divert management time and attention, could involve significant amounts of legal fees and other fees and expenses, or could result in an adverse outcome having a material adverse effect on our financial condition, cash flows or results of operations. Actions, claims, suits, investigations and proceedings are inherently uncertain and their results cannot be predicted with certainty. Except as described below, the Company is not currently involved in any legal proceedings that the Company believes are, individually or in the aggregate, material to the Company's business, results of operations or financial condition. However, regardless of the outcome, litigation can have an adverse impact on us because of associated cost and diversion of management time.
On
51
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
As disclosed above, on December 4, 2024, the Company entered into the Exchange Agreement with Roosevelt providing for a business combination pursuant to the Exchange. The Exchange Agreement was terminated effective December 29, 2025. On February 14, 2025, the Company filed a registration statement on Form S-4 with the SEC, including a preliminary proxy statement/prospectus, relating to shares to be issued in the transaction and a meeting of stockholders of the Company to be held to approve the issuance of shares in the transaction and related proposals. After the date of filing of the registration statement, the Company received several letters (the "Demand Letters") from counsel to purported stockholders of the Company. Each letter asserted that the preliminary proxy statement included in the registration statement was deficient and demanded that the alleged deficiencies be rectified. The Demand Letters allege, among other matters, that corrective disclosures are required to be included in the registration statement to address alleged material misstatements and omissions in the registration statement and that the proxy statement/prospectus contains materially incomplete and misleading information concerning, among other matters, financial projections, financial analysis performed by the entity that provided a fairness opinion to the Company's board of directors in connection with the transaction, potential conflicts of interest involving the Company's financial advisor in connection with the transaction and the Company's insiders, and possible breach of fiduciary duties by the directors of executive officers of the Company in connection with the transaction. Certain of the Demand Letters included a request for inspection of certain books and records of the Company pursuant to Delaware corporate law. The Company has not received any communications relating to the Demand Letters after the announcement of the termination of the Exchange Agreement. In light of the termination of the Exchange Agreement with Roosevelt, as disclosed above, the Company believes that the matters contained in the Demand Letters should be regarded as having effectively been mooted. However, if any of the Demand Letters continue to be pursued, the Company believes that the allegations in the Demand Letters are without merit and intends to vigorously defend itself against any complaint that may be filed.
The matters described in this section could divert management time and attention from the Company, and could involve significant amounts of legal fees and other fees and expenses. An adverse outcome in any such proceedings could have a material adverse effect on the Company.
Contingent Liability Related to the Anawah Acquisition
In June 2005, the Company completed its agreement and plan of merger and reorganization with Anawah, to purchase Anawah’s food and agricultural research company through a non-cash stock purchase. Pursuant to the merger with Anawah, and in accordance with ASC 805 - Business Combinations, the Company incurred a contingent liability not to exceed $
Contracts
The Company has exited all contract research agreements and has no additional funding commitments previously associated with these agreements.
The Company licenses certain technologies via executed agreements (“In-Licensing Agreements”) that were used to develop and advance the Company’s own technologies. These technologies have subsequently been sublicensed to unrelated parties.
52
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
The Company could be adversely affected by certain actions by the government as it relates to government contract revenue received in prior years. Government agencies, such as the Defense Contract Audit Agency routinely audit and investigate government contractors. These agencies review a contractor’s performance under its agreements; cost structure; and compliance with applicable laws, regulations and standards. The agencies also review the adequacy of, and a contractor’s compliance with, its internal control systems and policies, including the contractor’s purchasing, property, estimating, compensation and management information systems. While the Company’s management anticipates no adverse result from an audit, should any costs be found to be improperly allocated to a government agreement, such costs will not be reimbursed, or if already reimbursed, may need to be refunded. If an audit uncovers improper or illegal activities, civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments or fines, and suspension or prohibition from doing business with the government could occur. In addition, serious reputational harm or significant adverse financial effects could occur if allegations of impropriety were made against the Company.
Note 15. Leases
Operating Leases
As of December 31, 2025, the Company leases office space in Dallas, TX. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these short-term leases on a straight-line basis.
The Company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or material restrictive covenants.
Leases |
|
Classification |
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Assets |
|
|
|
|
|
|
|
|
||
Operating lease assets |
|
Right of use asset |
|
$ |
|
|
$ |
|
||
Total leased assets |
|
|
|
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
|
|
|
||
Current - Operating |
|
Operating lease liability - current |
|
$ |
|
|
$ |
|
||
Total leased liabilities |
|
|
|
$ |
|
|
$ |
|
||
Lease Cost |
|
Classification |
|
For the |
|
|
For the |
|
||
Operating lease cost |
|
SG&A and R&D Expenses |
|
$ |
|
|
$ |
|
||
Short term lease cost |
|
SG&A and R&D Expenses |
|
|
|
|
|
|
||
Sublease income (1) |
|
SG&A and R&D Expenses |
|
|
( |
) |
|
|
( |
) |
Net lease cost |
|
|
|
$ |
|
|
$ |
|
||
(1) Sublease income is recorded as a reduction to lease expense.
Lease Term and Discount Rate |
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
Weighted-average remaining |
|
|
— |
|
|
|
|
|
Weighted-average discount rate |
|
|
% |
|
|
% |
||
53
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note 16. Income Taxes
The components of loss before income taxes are as follows (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Domestic |
|
$ |
( |
) |
|
$ |
( |
) |
Foreign |
|
|
|
|
|
|
||
Loss before income taxes |
|
$ |
( |
) |
|
$ |
( |
) |
The total income tax provision for each of the years ended December 31, 2025 and 2024 was expense of $
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Current: |
|
|
|
|
|
|
||
Federal |
|
$ |
|
|
$ |
|
||
State |
|
|
( |
) |
|
|
( |
) |
Foreign |
|
|
|
|
|
|
||
Total current tax (expense) |
|
|
( |
) |
|
|
( |
) |
Deferred: |
|
|
|
|
|
|
||
Federal |
|
|
|
|
|
|
||
State |
|
|
|
|
|
|
||
Foreign |
|
|
|
|
|
|
||
Total deferred tax (expense) |
|
|
|
|
|
|
||
Total tax (expense) |
|
$ |
( |
) |
|
$ |
( |
) |
54
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
We
|
|
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
||||||||
|
|
Amount |
|
Percent |
|
|
Amount |
|
Percent |
|
||||
US Federal Statutory Tax Rate |
|
|
( |
) |
|
% |
|
|
( |
) |
|
% |
||
State and Local Income Taxes, Net of Federal Income |
|
|
|
|
- |
% |
|
|
|
|
- |
% |
||
Changes in Valuation Allowances |
|
|
|
|
- |
% |
|
|
( |
) |
|
% |
||
Nontaxable or Nondeductible Items |
|
|
|
|
|
|
|
|
|
|
||||
Contingent Liability Write-offs |
|
|
( |
) |
|
% |
|
|
|
|
|
|||
Mark-to-Market Adjustments |
|
|
( |
) |
|
% |
|
|
|
|
- |
% |
||
Other |
|
|
( |
) |
|
% |
|
|
|
|
% |
|||
Other Adjustments |
|
|
|
|
|
|
|
|
|
|
||||
Stock-based Compensation Cancellations |
|
|
|
|
- |
% |
|
|
|
|
- |
% |
||
Adjustments to Net Operating Losses |
|
|
( |
) |
|
% |
|
|
|
|
|
|||
Return-to-Provision Adjustments |
|
|
( |
) |
|
% |
|
|
|
|
|
|||
Other |
|
|
( |
) |
|
% |
|
|
|
|
- |
% |
||
Effective Tax Rate |
|
|
|
|
- |
% |
|
|
|
|
( |
)% |
||
*
55
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, net operating loss carryforwards (“NOLs”) and other tax credits.
|
|
As of December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
||
Net operating loss carryforwards |
|
$ |
|
|
$ |
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Accrued payroll and benefits |
|
|
|
|
|
|
||
Research and development credits |
|
|
|
|
|
|
||
Fixed asset basis difference |
|
|
|
|
|
|
||
Inventory reserve |
|
|
|
|
|
|
||
Charitable contributions |
|
|
|
|
|
|
||
Income from partnerships |
|
|
|
|
|
|
||
Lease liability |
|
|
|
|
|
|
||
Other accounts receivable reserve |
|
|
|
|
|
|
||
Amortized intangibles |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Section 174 Capitalization |
|
|
|
|
|
|
||
Total deferred tax assets |
|
|
|
|
|
|
||
Deferred tax liabilities: |
|
|
|
|
|
|
||
Right of use asset |
|
|
|
|
|
( |
) |
|
Total deferred tax liabilities |
|
|
|
|
|
( |
) |
|
Less valuation allowance |
|
|
( |
) |
|
|
( |
) |
Net deferred tax assets |
|
$ |
|
|
$ |
|
||
Realization of the deferred tax assets is dependent upon future taxable income, if any, the amount and timing of which are uncertain. Accordingly, the net deferred tax assets have been offset by a valuation allowance. The net valuation allowance increased by $
At December 31, 2025, the Company had federal and state NOLs aggregating approximately $
The Company evaluates deferred tax assets, including the benefit from NOLs, to determine if a valuation allowance is required. Such evaluation is based on consideration of all available evidence using a “more likely than not” standard with significant weight being given to evidence that can be objectively verified. This assessment considers, among other matters, the nature, frequency, and severity of current and cumulative losses; forecasts of future profitability; the length of statutory carryforward periods; the Company’s experience with operating losses; and tax-planning alternatives. The significant piece of objective negative evidence evaluated was the cumulative loss incurred through the year ended December 31, 2025. Given this evidence and the expectation to incur operating losses in the foreseeable future, a full valuation allowance has been recorded against the net deferred tax asset balance. The Company will continue to maintain a full valuation allowance against the entire amount of its net deferred tax asset, until such time as the Company has determined that the weight of the objectively verifiable positive evidence exceeds that of the negative evidence. Although the Company has established a full valuation allowance on its net deferred tax asset, for Federal tax losses before 2018 and for all state tax losses,
56
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
reducing its future tax obligations. Federal tax losses generated in 2018 and later do not expire. The Company is subject to taxation in the United States and various state jurisdictions. As of December 31, 2025, the Company’s tax years for
The Company had the following unrecognized tax benefits (in thousands), none of which, if recognized, would impact the Company’s effective tax rate:
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Unrecognized tax benefit beginning balance |
|
$ |
|
|
$ |
|
||
Increases for tax positions taken in prior years |
|
|
|
|
|
|
||
Decreases for tax positions taken in prior years |
|
|
|
|
|
|
||
Increases for tax positions taken in current years |
|
|
|
|
|
|
||
Settlements |
|
|
|
|
|
|
||
Unrecognized tax benefit ending balance |
|
$ |
|
|
$ |
|
||
The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in the provision for income taxes. As of December 31, 2025 and 2024, the Company has
There were no material tax payments made during the periods ended December 31, 2025 and December 31, 2024. The Company is currently not under an income tax audit for federal or state purposes.
In July 2025, the United States enacted tax legislation commonly referred to as the One Big Beautiful Bill Act (the "OBBB Act"). The OBBB Act, among other things, permanently reverted to pre-Tax Cuts and Jobs Act rules allowing the immediate deduction of domestic research and experimental expenses effective for tax years beginning after December 31, 2024, and provided transition relief permitting acceleration of previously capitalized domestic R&D costs from 2022-2024 under Section 174. While these provisions resulted in a favorable tax adjustment in the Company's 2025 tax provision, they did not have a material effect on the Company's financial statements due to the Company's taxable loss and full valuation allowance positions. The Company will continue to monitor future developments, including regulatory guidance and interpretations.
57
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note 17. Retirement Benefits
The Company has a 401(k) retirement plan (the “Plan”) available for participation by all regular full-time employees who have completed three months of service with the Company. The Company established the Plan in 2008. The Plan provides for a discretionary matching contribution equal to
Note 18. Segment Reporting
The Company has
Information about the Company’s segment operations as of and for the years ended December 31, 2025 and 2024, are as follows (in thousands):
|
Year Ended December 31, |
|
||||
|
2025 |
|
2024 |
|
||
Total revenues |
$ |
|
$ |
|
||
Product COGS |
|
( |
) |
|
( |
) |
Other Adjustments |
|
( |
) |
|
( |
) |
Human capital & technology |
|
( |
) |
|
( |
) |
Corporate expenses |
|
( |
) |
|
( |
) |
Advertising & marketing |
|
( |
) |
|
( |
) |
Outside services |
|
( |
) |
|
( |
) |
Depreciation |
|
( |
) |
|
( |
) |
Other SG&A |
|
( |
) |
|
( |
) |
Interest income |
|
|
|
|
||
Credit loss |
|
( |
) |
|
|
|
Income tax expense |
|
( |
) |
|
( |
) |
Change in fair value of common stock warrant and option liabilities |
|
|
|
( |
) |
|
Other segment items |
|
|
|
|
||
Net loss from continuing operations |
$ |
( |
) |
$ |
( |
) |
58
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Other segment items consist of research and development expenses, gain on sale of intangible assets, gain on sale of property and equipment, credit losses, other income.
Geographic Data
Revenues based on the location of the customers, are as follows (in thousands):
|
Year Ended December 31, |
|
||||
|
2025 |
|
2024 |
|
||
United States |
$ |
|
$ |
|
||
Argentina |
|
|
|
|
||
India |
|
|
|
|
||
Canada |
|
|
|
|
||
Total |
$ |
|
$ |
|
||
Note 19. Net Loss per Share
Basic net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period and excludes any dilutive effects of stock-based awards, warrants and options. Diluted net loss per share attributable to common stockholders is computed giving effect to all potentially dilutive common shares, including common stock issuable upon exercise of stock options and warrants. Dilutive securities are not included in the computation of net loss per share when the impact would be anti-dilutive.
Securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows (in shares):
|
|
Year Ended December 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Options to purchase common stock |
|
|
|
|
|
|
||
Warrants to purchase common stock |
|
|
|
|
|
|
||
Preferred investment options |
|
|
|
|
|
|
||
Total |
|
|
|
|
|
|
||
Note 20. Related Party Transactions
The Company’s related parties include Moral Compass Corporation (“MCC”) and the John Sperling Foundation (“JSF”). The rights to the intellectual property owned by Blue Horse Labs, Inc. (“BHL”) were assigned to its sole shareholder, the John Sperling Revocable Trust (“JSRT”) due to BHL’s dissolution and then subsequently to the JSF. The JSF is deemed a related party of the Company because MCC, one of the Company’s largest stockholders, and the JSF share common officers and directors.
JSF received a single digit royalty from the Company when revenue has been collected on product sales or for license payments from third parties that involve certain intellectual property developed under research funding originally from BHL. Royalty fees due to JSF were $
Product sales related to intellectual property developed under research funding from BHL ceased as of December 31, 2024. The royalty fees due to JSF for sales in 2024 were paid in April 2025 and no future royalty fees are expected.
59
Table of Contents
Arcadia Biosciences, Inc.
Notes to Consolidated Financial Statements. (Continued)
Note 21. Subsequent Events
On January 9, 2026, Arcadia Biosciences, Inc. (the “Company”) entered into inducement offer letter agreements (the “Inducement Letters”) with certain investors (the “Participating Holders”) pursuant to which such Participating Holders agreed to exercise certain outstanding preferred investment options covering an aggregate of
Pursuant to the Inducement Letters, the Participating Holders agreed to exercise for cash the Existing Options at a reduced exercise price of $
The closing of the transactions contemplated by the Inducement Letters occurred on
The Company engaged H.C. Wainwright & Co., LLC (“Wainwright”) to act as its exclusive placement agent in connection with the transactions described above. In consideration for its services, the Company paid Wainwright a cash fee equal to
The Company also issued to Wainwright or its designees placement agent preferred investment options (the “Placement Agent Options”) to purchase that number of shares of Common Stock ("Placement Agent Option Shares") equal to
The Company agreed to file a registration statement covering the resale of the New Option Shares and Placement Agent Option Shares (the “Resale Registration Statement”) within 30 days after the Closing Date and to use commercially reasonable efforts to cause such Resale Registration Statement to be declared effective by the Securities and Exchange Commission (the "SEC") within 60 days following the date of the Inducement Letter (or within 90 days in certain circumstances). If, at the time a holder exercises its New Option or Placement Agent Option (as applicable), the Resale Registration Statement is not then effective or available, then in lieu of making the cash payment otherwise contemplated to be made upon such exercise in payment of the aggregate exercise price, the holder may elect instead to make a cashless net exercise and receive upon such exercise the net number of shares of Common Stock determined according to a formula set forth in the New Options and Placement Agent Options. The Resale Registration Statement was declared effective by the SEC on February 10, 2026.
60
Table of Contents
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.
61
Table of Contents
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of December 31, 2025, the effectiveness of Arcadia’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act) were evaluated, with the participation of Arcadia’s principal executive officer and principal financial officer. Based on this evaluation, Arcadia’s principal executive officer and interim principal financial officer, concluded that these disclosure controls and procedures were not effective as of December 31, 2025, as a result of the material weaknesses in our internal control over financial reporting, as further discussed below.
Notwithstanding these material weaknesses, management concluded that our consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial condition, results of operations and cash flows as of and for the periods presented in conformity with U.S. GAAP.
Management’s Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)). Arcadia’s principal executive officer and interim principal financial officer, evaluated the effectiveness of Arcadia’s internal control over financial reporting using the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation and the existence of the material weaknesses described below, management concluded that we did not maintain effective internal control over financial reporting as of December 31, 2025.
Material Weaknesses
A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected on a timely basis.
In connection with the audit of our consolidated financial statements for the year ended December 31, 2025, we identified material weaknesses in our internal control over financial reporting related to: (a) insufficient segregation of duties in the financial statement close process; and (b) insufficient information system controls, including access and change management controls. The Company’s employee headcount has been reduced, resulting in insufficient personnel to maintain proper segregation of duties, which impacts the effectiveness of business processes as well as information systems controls.
Remediation Plans and Status
We are committed to maintaining a strong internal control environment and implementing measures designed to ensure that control deficiencies contributing to the material weaknesses are remediated. In this remediation process, which involve designing and implementing controls and processes to address the material weaknesses, management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. As a result of our resource constraints, these risks may continue to persist going forward.
Changes in Internal Control over Financial Reporting
Except as described above, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended December 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
62
Table of Contents
Item 9B. Other Information.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
63
Table of Contents
PART III
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this item will be contained in our definitive proxy statement to be filed with the Securities and Exchange Commission on Schedule 14A in connection with our 2026 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed no later than 120 days after the end of our fiscal year ended December 31, 2025, including without limitation under the headings “Executive Officers,” “Election of Directors,” “Corporate Governance,” and “Delinquent Section 16(a) Reports,” and is incorporated herein by reference, or will be included in an amendment to this Annual Report on Form 10-K.
The Company has adopted an insider trading policy governing the purchase, sale and/or other dispositions of the Company’s securities that applies to its officers, directors and employees as well as other covered persons. The Company believes its insider trading policy and repurchase procedures are reasonably designed to promote compliance with U.S. insider trading laws, rules and regulations, and listing standards applicable to the Company. A copy of the Company’s insider trading policy is filed with this Annual Report on Form 10‑K as Exhibit 19.1.
The Company has adopted a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A current copy of the code is posted on the Corporate Governance section of our website, which is located at www.arcadiabio.com. If Arcadia makes any substantive amendments to, or grant any waivers from, the code of business conduct and ethics for our principal executive officer, principal financial officer, principal accounting officer, controller or persons performing similar functions, or any officer or director, the Company will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K.
Item 11. Executive Compensation.
The information required by this item will be contained in Proxy Statement, including without limitation under the headings “Executive Compensation,” “Director Compensation” and “Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information,” is incorporated herein by reference, or will be included in an amendment to this Annual Report on Form 10-K.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item will be contained in Proxy Statement, including without limitation under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information,” and is incorporated herein by reference, or will be included in an amendment to this Annual Report on Form 10-K.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item will be contained in Proxy Statement, including without limitation under the headings “Certain Relationships and Related Party Transactions” and “Corporate Governance,” and is incorporated herein by reference, or will be included in an amendment to this Annual Report on Form 10-K.
Item 14. Principal Accounting Fees and Services.
The information required by this item will be contained in Proxy Statement, including without limitation under the heading “Ratification of Independent Registered Public Accounting Firm-Principal Accounting Fees and Services,” and is incorporated herein by reference, or will be included in an amendment to this Annual Report on Form 10-K.
Auditor Firm Id: |
Auditor Name: |
Auditor Location: |
64
Table of Contents
PART IV
Item 15. Exhibits, Financial Statement Schedules.
The financial statements schedules and exhibits filed as part of this Annual Report on Form 10-K are as follows:
(a)(1) Financial Statements
Reference is made to the financial statements included in Item 8 of Part II hereof.
(a)(2) Financial Statement Schedules
All other schedules are omitted because they are not required or the required information is included in the statements or notes thereto.
(a)(3) Exhibits
Reference is made to the Exhibit Index accompanying this Annual Report on Form 10-K.
Item 16. Form 10-K Summary.
Not applicable.
Exhibit Index
|
|
|
|
Incorporated by Reference |
|
|
||||||
Exhibit Number |
|
Exhibit Description |
|
Form |
|
File No. |
|
Exhibit |
|
Filing Date |
|
Filed Herewith |
|
|
|
|
|
|
|
|
|
|
|
|
|
2.1 |
|
Securities Exchange Agreement dated as of December 4, 2024. |
|
8-K |
|
001-37383 |
|
2.1 |
|
12/06/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.2 |
|
First Amendment to Securities and Exchange Agreement dated as of April 25, 2025 |
|
S-4/A |
|
333-284972 |
|
2.2 |
|
7/31/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1 |
|
Amended and Restated Certificate of Incorporation of Registrant. |
|
8-K |
|
001-37383 |
|
3.1 |
|
5/26/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2 |
|
Amendment to the Amended and Restated Certificate of Incorporation of Registrant. |
|
8-K |
|
001-37383 |
|
3.1 |
|
2/28/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.3 |
|
Certificate of Designation of Series A Preferred Stock. |
|
8-K |
|
001-37383 |
|
3.1 |
|
12/8/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.4 |
|
Amended and Restated Bylaws of Registrant. |
|
8-K |
|
001-37383 |
|
3.2 |
|
5/26/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.5 |
|
Amendment to the Amended and Restated Bylaws of Registrant. |
|
8-K |
|
001-37383 |
|
3.2 |
|
12/8/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1 |
|
Form of Registrant’s common stock certificate. |
|
S-3 |
|
333-224061 |
|
4.1 |
|
3/30/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2 |
|
Form of Investor Warrant. |
|
8-K |
|
001-37383 |
|
4.1 |
|
12/22/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.3 |
|
Form of Placement Agent Warrant. |
|
8-K |
|
001-37383 |
|
4.2 |
|
12/22/2020 |
|
|
65
Table of Contents
|
|
|
|
|
|
|
|
|
|
|
|
|
4.4 |
|
Form of Investor Warrant. |
|
8-K |
|
001-37383 |
|
4.1 |
|
1/29/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.5 |
|
Form of Placement Agent Warrant. |
|
8-K |
|
001-37383 |
|
4.2 |
|
1/29/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.6 |
|
Form of Investor Pre-Funded Warrant. |
|
8-K |
|
001-37383 |
|
4.1 |
|
8/16/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.7 |
|
Form of Investor Preferred Investment Option. |
|
8-K |
|
001-37383 |
|
4.2 |
|
8/16/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.8 |
|
Form of Placement Agent Preferred Investment Option. |
|
8-K |
|
001-37383 |
|
4.3 |
|
8/16/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.9 |
|
Form of Pre-Funded Warrant. |
|
8-K |
|
001-37383 |
|
4.1 |
|
3/3/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.10 |
|
Form of Series A Preferred Investment Option. |
|
8-K |
|
001-37383 |
|
4.2 |
|
3/3/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.11 |
|
Form of Series B Preferred Investment Option. |
|
8-K |
|
001-37383 |
|
4.3 |
|
3/3/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.12 |
|
Form of Placement Agent Preferred Investment Option. |
|
8-K |
|
001-37383 |
|
4.4 |
|
3/3/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.13 |
|
Form of Preferred Investment Option. |
|
8-K |
|
001-37383 |
|
4.1 |
|
1/14/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.14 |
|
Form of Placement Agent Preferred Investment Option. |
|
8-K
|
|
001-37383 |
|
4.4 |
|
1/14/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.15 |
|
Description of Registrant’s Securities Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended. |
|
10-K
|
|
001-37383 |
|
4.7 |
|
3/28/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1* |
|
Form of Indemnification Agreement between the Registrant and each of its Officers and Directors. |
|
S-1 |
|
333-202124 |
|
10.7 |
|
2/17/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2* |
|
2015 Omnibus Equity Incentive Plan and forms of agreement thereunder. |
|
10-Q |
|
001-37383 |
|
10.5 |
|
8/13/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3* |
|
Executive Incentive Bonus Plan. |
|
S-1/A |
|
333-202124 |
|
10.15 |
|
5/11/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4* |
|
Amended and Restated Director Compensation Policy. |
|
10-Q |
|
001-37383 |
|
10.14 |
|
5/10/2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5* |
|
Form of Severance and Change in Control Agreement. |
|
S-1/A |
|
333-202124 |
|
10.18 |
|
4/6/2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6* |
|
Employment Letter and Severance and Change in Control Agreement for Thomas J. Schaefer. |
|
8-K/A |
|
001-37383 |
|
10.1 |
|
1/5/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7 |
|
Form of Registration Rights Agreement. |
|
8-K |
|
001-37383 |
|
10.2 |
|
3/23/2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8 |
|
Form of Securities Purchase Agreement dated as of December 18, 2020, between Arcadia Biosciences, Inc. and each purchaser named on the signature pages thereto. |
|
8-K |
|
001-37383 |
|
10.1 |
|
12/22/2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66
Table of Contents
10.9 |
|
Form of Securities Purchase Agreement dated as of January 25, 2021, between Arcadia Biosciences, Inc. and each purchaser named on the signature pages thereto. |
|
8-K |
|
001-37383 |
|
10.1 |
|
1/29/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10 |
|
Form of Registration Rights Agreement dated as of January 25, 2021, between Arcadia Biosciences, Inc. and each purchaser named on the signature pages thereto. |
|
8-K |
|
001-37383 |
|
10.2 |
|
1/29/2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.11 |
|
Form of Securities Purchase Agreement, dated as of August 12, 2022, between Arcadia Biosciences, Inc. and each purchaser named on the signature pages thereto. |
|
8-K |
|
001-37383 |
|
10.1 |
|
8/16/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12 |
|
Form of Securities Purchase Agreement dated as of March 2, 2023, between Arcadia Biosciences, Inc. and each purchaser named on the signature pages thereto. |
|
8-K |
|
001-37383 |
|
10.1 |
|
3/3/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13 |
|
Form of Registration Rights Agreement dated as of March 2, 2023, between Arcadia Biosciences, Inc. and each purchaser named on the signature pages thereto. |
|
8-K |
|
001-37383 |
|
10.2 |
|
3/3/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14 |
|
Form of Investment Option Amendment, dated as of March 2, 2023. |
|
8-K |
|
001-37383 |
|
10.3 |
|
3/3/2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15+±** |
|
Asset Purchase Agreement |
|
8-K |
|
001-37383 |
|
10.1 |
|
5/17/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.16+±** |
|
Asset Purchase Agreement |
|
8-K |
|
001-37383 |
|
10.1 |
|
5/20/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.17 |
|
Promissory Note |
|
8-K |
|
001-37383 |
|
10.2 |
|
5/20/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.18 |
|
Security Agreement |
|
8-K |
|
001-37383 |
|
10.3 |
|
5/20/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.19 |
|
Employment Letter and Severance and Change in Control Agreement for Thomas J. Schaefer |
|
8-K/A |
|
001-37383 |
|
10.1 |
|
8/23/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.20 |
|
Employment Letter and Severance and Change in Control Agreement for Mark Kawakami |
|
8-K/A |
|
001-37383 |
|
10.2 |
|
8/23/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.21 |
|
Form of Inducement Letter Agreement dated January 9, 2026. |
|
8-K |
|
001-37383 |
|
10.1 |
|
1/14/2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19.1 |
|
Insider Trading Disclosure Policy |
|
10-K/A |
|
001-37383 |
|
19.1 |
|
4/30/2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21.1 |
|
List of subsidiaries of the Registrant. |
|
S-1 |
|
333-262407 |
|
21.1 |
|
1/28/2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1 |
|
Consent of Deloitte & Touche LLP, independent registered public accounting firm. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
24.1 |
|
Power of attorney (included in the signature page to this filing). |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
67
Table of Contents
31.1 |
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2 |
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1 |
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2 |
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
97.1 |
|
Dodd-Frank Clawback Policy. |
|
10-K |
|
001-37383 |
|
97.1 |
|
3/28/2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
104.1 |
|
Cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2025, formatted in inline XBRL (and contained in Exhibit 101) |
|
|
|
|
|
|
|
|
|
X |
* Indicates a management contract or compensatory plan or arrangement.
+ Certain portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K as we have determined they (1) are not material and (2) are the type that the Company treats as private or confidential. The Registrant hereby agrees to furnish a copy of any omitted portion to the SEC upon request.
± Annexes, schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the SEC.
** Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules and exhibits upon request by the SEC.
68
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
ARCADIA BIOSCIENCES, INC. |
|
|
|
|
Date: March 26, 2026 |
By: |
/s/ THOMAS J. SCHAEFER |
|
|
Thomas J. Schaefer |
|
|
President, Chief Executive Officer |
Power of Attorney
Each person whose individual signature appears below hereby authorizes and appoints Thomas J. Schaefer with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.
Name |
|
Title |
|
Date |
|
|
|
|
|
/s/ THOMAS J. SCHAEFER |
|
|
|
|
Thomas J. Schaefer |
|
Director, Chief Executive Officer, Interim Chief Financial Officer (Principal Executive Officer, Principal Financial and Accounting Officer)
|
|
March 26, 2026 |
|
|
|
|
|
/s/ KEVIN COMCOWICH |
|
|
|
|
Kevin Comcowich |
|
Director |
|
March 26, 2026 |
/s/ LILIAN SHACKELFORD MURRAY |
|
|
|
|
Lilian Shackelford Murray |
|
Director |
|
March 26, 2026 |
|
|
|
|
|
/s/ GREGORY D. WALLER |
|
|
|
|
Gregory D. Waller |
|
Director |
|
March 26, 2026 |
|
|
|
|
|
/s/ AMY YODER |
|
|
|
|
Amy Yoder |
|
Director |
|
March 26, 2026 |
69
FAQ
How did Arcadia Biosciences (RKDA) perform financially in 2025?
Why does the Arcadia Biosciences (RKDA) 10-K include a going concern warning?
What happened with Arcadia Biosciences’ GoodWheat sale and Above Food note?
How important is Zola coconut water to Arcadia Biosciences (RKDA) now?
What major legal or regulatory risks does Arcadia Biosciences face?
Could Arcadia Biosciences (RKDA) be delisted from Nasdaq?
What were Arcadia Biosciences’ key non-operating gains and losses in 2025?
