☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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. Yes ☒ No ☐

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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November ~~8, 2021,~~7, 2022, the registrant had ~~22,184,235~~24,642,960 shares of common stock outstanding, $0.001 par value per share.

See accompanying notes to the unaudited condensed consolidated financial statements.


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended September 30,						Nine Months Ended September 30,
		2021			2020			2021			2020			2022			2021			2022			2021
Revenues:
Product	$	2,324		$	245		$	4,506		$	630		$	1,851		$	2,324		$	7,967		$	4,506
Royalty														17			35			117			86
License		17			10			17			110			10			17			872			17
Royalty		35			16			86			58
Contract research and government grants		—			43			—			106
Total revenues		2,376			314			4,609			904			1,878			2,376			8,956			4,609
Operating expenses:
Cost of product revenues		2,511			1,841			4,954			3,463
Operating expenses (income):
Cost of revenues														1,344			2,511			8,250			4,954
Research and development		1,038			1,762			3,328			5,999			255			1,038			1,009			3,328
Gain on sale of Verdeca														—			—			(1,138	)		—
Impairment of intangible assets		120			—			120			—			—			120			72			120
Change in fair value of contingent consideration		—			—			(140	)		—			—			—			(70	)		(140	)
Write-down of fixed assets		1,108			—			1,319			—
Impairment of property and equipment														24			1,108			370			1,319
(Gain) loss on sale of property and equipment														—			—			(386	)		17
Selling, general and administrative		6,312			4,292			16,750			11,689			4,835			6,312			13,834			16,733
Total operating expenses		11,089			7,895			26,331			21,151			6,458			11,089			21,941			26,331
Loss from operations		(8,713	)		(7,581	)		(21,722	)		(20,247	)		(4,580	)		(8,713	)		(12,985	)		(21,722	)
Interest expense		(15	)		(23	)		(23	)		(32	)
Other (expense) income, net		(7	)		—			10,214			83
Change in fair value of common stock warrant liabilities		4,777			1,130			4,601			6,212
Loss on extinguishment of warrant liability		—			(682	)		—			(635	)
Interest income (expense)														95			(15	)		123			(23	)
Other income (expense), net														43			(7	)		13			10,214
Change in fair value of common stock warrant and option liabilities														1,880			4,777			1,880			4,601
Gain on extinguishment of PPP loan		1,123			—			1,123			—			—			1,123			—			1,123
Issuance and offering costs		—			—			(769	)		—			(314	)		—			(314	)		(769	)
Net loss before income taxes		(2,835	)		(7,156	)		(6,576	)		(14,619	)		(2,876	)		(2,835	)		(11,283	)		(6,576	)
Income tax provision		(1	)		(9	)		(1	)		(15	)		(1	)		(1	)		(1	)		(1	)
Net loss		(2,836	)		(7,165	)		(6,577	)		(14,634	)		(2,877	)		(2,836	)		(11,284	)		(6,577	)
Net loss attributable to non-controlling interest		(661	)		(774	)		(1,199	)		(1,081	)		(10	)		(661	)		(152	)		(1,199	)
Net loss attributable to common stockholders	$	(2,175	)	$	(6,391	)	$	(5,378	)	$	(13,553	)	$	(2,867	)	$	(2,175	)	$	(11,132	)	$	(5,378	)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.10	)	$	(0.60	)	$	(0.26	)	$	(1.42	)	$	(0.12	)	$	(0.10	)	$	(0.48	)	$	(0.26	)
Weighted-average number of shares used in per share calculations:
Basic and diluted		22,177,423			10,719,618			20,976,105			9,570,259			24,552,543			22,177,423			22,984,816			20,976,105
Other comprehensive loss, net of tax
Unrealized losses on investment securities		—			—			—			(1	)
Foreign currency translation adjustment		(12	)		—			(24	)		—			—			(12	)		—			(24	)
Other comprehensive loss		(12	)		—			(24	)		(1	)		—			(12	)		—			(24	)
Comprehensive loss attributable to common stockholders	$	(2,187	)	$	(6,391	)	$	(5,402	)	$	(13,554	)	$	(2,867	)	$	(2,187	)	$	(11,132	)	$	(5,402	)

See accompanying notes to the unaudited condensed consolidated financial statements.


	Nine Months Ended September 30,						Nine Months Ended September 30,
		2021			2020			2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(6,577	)	$	(14,634	)	$	(11,284	)	$	(6,577	)
Adjustments to reconcile net loss to cash used in operating activities:
Change in fair value of common stock warrant liabilities		(4,601	)		(6,212	)
Loss (gain) on extinguishment of warrant liability		—			635
Change in fair value of common stock warrant and option liabilities								(1,880	)		(4,601	)
Change in fair value of contingent consideration		(140	)		—			(70	)		(140	)
Issuance and offering costs		769			—			314			769
Depreciation		737			395			354			737
Amortization of intangible assets		99			—			39			99
Lease amortization		914			745			686			914
Impairment of intangible assets		120			—			72			120
Loss (gain) on disposal of fixed assets		17			(8	)
Net amortization of investment premium		—			(44	)
(Gain) loss on disposal of property and equipment								(386	)		17
Stock-based compensation		1,035			1,844			897			1,035
Bad debt expense								32			—
Realized gain on corporate securities		(10,222	)		—			—			(10,222	)
Write-down of fixed assets		1,319			—
Write-down of inventory and prepaid production costs		1,802			3,063
Impairment of property and equipment								370			1,319
Write-down of inventories								1,530			1,802
Gain on extinguishment of PPP loan		(1,123	)		—			—			(1,123	)
Gain on sale of Verdeca								(1,138	)		—
Changes in operating assets and liabilities:
Accounts receivable		(47	)		229
Accounts receivable and other receivables								(534	)		(47	)
Inventories		(2,651	)		(9,609	)		1,071			(2,651	)
Prepaid expenses and other current assets		(452	)		(1,157	)		(90	)		(452	)
Other noncurrent assets		(159	)		(15	)		15			(159	)
Accounts payable and accrued expenses		972			2,026			(890	)		972
Amounts due to related parties		(29	)		(11	)		(17	)		(29	)
Unearned revenue		(8	)		(42	)		—			(8	)
Other current liabilities		1			(43	)		6			1
Operating lease payments		(984	)		(629	)
Operating lease liabilities								(718	)		(984	)
Net cash used in operating activities		(19,208	)		(23,467	)		(11,621	)		(19,208	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment		2			8			897			2
Proceeds from sale of Verdeca — earn-out received								285			—
Purchases of property and equipment		(919	)		(2,038	)		(46	)		(919	)
Acquisitions, net of cash acquired		(4,250	)		(500	)		—			(4,250	)
Purchases of investments		—			(1,292	)
Proceeds from sales and maturities of investments		21,845			18,250			—			21,845
Net cash provided by investing activities		16,678			14,428
Net cash provided by (used in) investing activities								1,136			16,678
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, pre-funded warrants and preferred investment options from August 2022 Offering								5,000			—
Payments of offering costs relating to August 2022 Offering								(488	)		—
Proceeds from issuance of common stock and warrants from January 2021 PIPE securities purchase agreement		25,147			—			—			25,147
Payments of offering costs relating to January 2021 PIPE securities purchase agreement		(1,912	)		—			—			(1,912	)
Proceeds from the exercise of warrants		22			9,372			—			22
Proceeds from borrowings		—			3,108
Payment of transaction costs relating to extinguishment of warrant liability		—			(863	)
Principal payments on debt		(2,032	)		(26	)		—			(2,032	)
Proceeds from ESPP purchases		39			51			7			39
Capital contributions received from non-controlling interest		750			1,182			—			750
Net cash provided by financing activities		22,014			12,824			4,519			22,014
Effects of foreign currency translation on cash and cash equivalents		(1	)		—			—			(1	)
Net increase in cash, cash equivalents and restricted cash		19,483			3,785
Cash, cash equivalents and restricted cash — beginning of period		16,043			8,417
Cash, cash equivalents and restricted cash — end of period	$	35,526		$	12,202
Net (decrease) increase in cash and cash equivalents								(5,966	)		19,483
Cash and cash equivalents — beginning of period								28,685			16,043
Cash and cash equivalents — end of period							$	22,719		$	35,526
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	1		$	1		$	—		$	1
Cash paid for interest	$	25		$	7		$	1		$	25
NONCASH INVESTING AND FINANCING ACTIVITIES:
Fixed assets acquired with notes payable	$	—		$	37
Common stock warrants issued to placement agent and included in offering costs related to May 2020 Warrant Transaction	$	—		$	215
Common stock warrants issued to placement agent and included in offering costs related to July 2020 Warrant Transaction	$	—		$	101
Shares of common stock issued at closing of Arcadia Wellness transaction	$	2,053		$	—		$	—		$	2,053
Common stock warrant liabilities reclassified to equity upon adoption of ASU 2020-06							$	3,392		$	—
Common stock options issued to placement agent and included in offering costs related to August 2022 RDO securities purchase agreement							$	191		$	—
Common stock warrants issued to placement agent and included in offering costs related to January 2021 PIPE securities purchase agreement	$	942		$	—		$	—		$	942
Right of use assets obtained in exchange for new operating lease liabilities	$	1,662		$	4,157		$	114		$	1,662
Purchases of fixed assets included in accounts payable and accrued expenses	$	—		$	—
Proceeds from sale of Verdeca in accounts receivable and other receivables							$	854		$	—

See accompanying notes to the unaudited condensed consolidated financial statements.

5. Investments and Fair Value Instruments

Investments

The investments are carried at fair value, based on quoted market prices or other readily available market information. Unrealized and realized gains and losses are recognized as other income in the condensed consolidated statements of operations and comprehensive loss.

~~The Company classified its investments in corporate securities of BIOX as short-term investments. The Company recorded realized gains of $10.2~~ million for the nine months ended September 30, 2021, associated with the sale of all corporate securities in other income, net, in the condensed consolidated statements of operations and comprehensive loss.

The following tables summarize the amortized cost and fair value of the investment securities portfolio at September 30, ~~2021~~2022 and December 31, ~~2020.~~2021.


(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
September 30, 2021
September 30, 2022
Cash equivalents:
Money market funds		32,440		—		—		32,440	$	20,477	$	—	$	—	$	20,477
Total Assets at Fair Value	$	32,440	$	—	$	—	$	32,440	$	20,477	$	—	$	—	$	20,477


(Dollars in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
December 31, 2020
December 31, 2021
Cash equivalents:
Money market funds	$	12,082	$	—	$	—	$	12,082	$	26,842	$	—	$	—	$	26,842
Short-term investments:
Corporate securities		10,969		656		—		11,625
Total Assets at Fair Value	$	23,051	$	656	$	—	$	23,707	$	26,842	$	—	$	—	$	26,842

The Company did 0not have any investment categories that were in a continuous unrealized loss position for more than twelve months as of September 30, ~~2021.~~2022.

Fair Value Measurement

The fair value of the investment securities at September 30, ~~2021~~2022 were as follows:


	Fair Value Measurements at September 30, 2021								Fair Value Measurements at September 30, 2022
(Dollars in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets at Fair Value
Cash equivalents:
Money market funds		32,440		—		—		32,440	$	20,477	$	—	$	—	$	20,477
Total Assets at Fair Value	$	32,440	$	—	$	—	$	32,440	$	20,477	$	—	$	—	$	20,477

The fair value of the investment securities at December 31, ~~2020~~2021 were as follows:


	Fair Value Measurements at December 31, 2020								Fair Value Measurements at December 31, 2021
(Dollars in thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets at Fair Value
Cash equivalents:
Money market funds	$	12,082	$	—	$	—	$	12,082	$	26,842	$	—	$	—	$	26,842
Short-term investments:
Corporate securities		11,625		—		—		11,625
Total Assets at Fair Value	$	23,707	$	—	$	—	$	23,707	$	26,842	$	—	$	—	$	26,842

The Company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during ~~2021~~2022 or ~~2020.~~2021. The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable and other receivables, accounts payable, accrued liabilities, and notes payable. For accounts receivable and other receivables, accounts payable, accrued liabilities, and notes payable the carrying amounts of these financial instruments as of September 30, ~~2021~~2022 and December 31, ~~2020~~2021 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 a contingent liability resulting from the Anawah, Inc. ("Anawah") acquisition as described in Note ~~17, a contingent liability resulting from~~15, as well as preferred investment options related to the ~~Industrial Seed Innovations acquisition, as~~August 2022 Registered Direct Offering described in Note ~~6, and~~11. As of December 31, 2021, the Company also had common stock warrant liabilities related to the March 2018, the June 2019, the September 2019, and the January 2021 Offerings, described in Note ~~13.~~

11, which were reclassified to additional paid-in capital upon adoption of ASU 2020-06, as of January 1, 2022. See Note 2 for details of the adoption of ASU 2020-06.

The contingent liability related to the Anawah acquisition was measured and recorded on a recurring basis as of September 30, ~~2021~~2022 and December 31, ~~2020,~~2021, using unobservable inputs, namely the Company’s ability and intent to pursue certain specific products developed using technology acquired in the purchase. A significant deviation in the Company’s ability and/or intent to pursue the technology acquired in the purchase could result in a significantly lower (higher) fair value measurement. The contingent liability related to the Industrial Seed Innovations (“ISI”) acquisition was measured and recorded on a recurring basis as of September 30, 2021 and December 31, 2020, using unobservable inputs, namely ISI’s forecasted revenue. A significant deviation in ISI’s forecasted revenue could result in a significantly lower (higher) fair value measurement.

The ~~warrant~~preferred investment option liabilities were measured and recorded on a recurring basis using the Black-Scholes Model with the following assumptions at September 30, ~~2021 and December 31, 2020:~~2022:


	January 2021 Warrants					September 2019 Warrants						June 2019 Warrants						March 2018 Warrants
	September 30, 2021			December 31, 2020		September 30, 2021			December 31, 2020			September 30, 2021			December 31, 2020			September 30, 2021			December 31, 2020			August 2022 Options			August 2022 Placement Agent Options
Remaining term (in years)		4.83			—		3.45			4.20			3.21			3.96			1.47			2.22			4.92			4.92
Expected volatility		126.9	%		—		109.3	%		135.0	%		108.4	%		135.0	%		81.0	%		130.0	%		128.5	%		128.5	%
Risk-free interest rate		0.9	%		—		0.6	%		0.3	%		0.6	%		0.3	%		0.2	%		0.1	%		4.1	%		4.1	%
Expected dividend yield		0	%		—		0	%		0	%		0	%		0	%		0	%		0	%		0	%		0	%

The significant input used in the fair value measurement of the Company’s Level 3 ~~warrant~~options 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)

Common Stock
Warrant
Liability -
March
2018
Purchase
Agreement

Common
Stock
Warrant
Liability -
June
2019
Offering

Common
Stock
Warrant
Liability -
September
2019
Offering

Common
Stock
Warrant
Liability -
January 2021
Offering

Contingent
Liabilities

Total

Balance as of December 31, 2020

$
662

$
832

$
1,214

$
-

$
2,280

$
4,987

Initial recognition

—

—

—

9,631

—

$
9,631

Change in fair value and
other adjustments

(611
)

(368
)

(570
)

(3,054
)

(140
)

$
(4,742
)
Balance as of September 30, 2021

$
51

$
464

$
644

$
6,577

$
2,140

$
9,876

~~In August 2020,~~442,000 and $1.4 million during the nine months ended September 30, 2022 and 2021, respectively, related to intangible assets and other long-lived assets. The Company ~~acquired by merger Industrial Seed Innovations (“ISI”), an Oregon-based industrial hemp breeding and seed company. As~~has classified the fair value measurements as a result of the acquisition, the Company acquired ISI’s commercial and genetic assets, including seed varieties, germplasm library and intellectual property. ISI’s Rogue and Umpqua seed varieties are now part of Arcadia’s portfolio, alongside the Company’s GoodHemp line of genetically superior hemp seeds, transplants, and extracts. The acquisition has significantly broadened and accelerated commercialization of Arcadia’s hemp-related breeding platform, as well as established a breeding research and development facilityLevel 3 measurement in the ~~Pacific Northwest, a key production area in the hemp industry.~~

~~The acquisition was~~fair value hierarchy because they involve significant unobservable inputs such as cash flow projections, discount rates and management assumptions.

Assets classified as held for sale are recorded ~~as a business combination, in accordance with ASC Topic 805. The purchase price consideration for the acquisition totaled an estimated $1,212,000, of which $500,000~~ ~~in cash and $432,000, in the form of~~ ~~132,626~~ ~~shares of the Company’s common stock, was paid during the month of August 2020. The remaining amount of $280,000~~ ~~will be recognized in~~ 2 ~~annual installments, each of up to~~ ~~132,626~~ ~~shares of the Company’s common stock, subject to the achievement of revenue milestones in 2021 and 2022, and is recorded as a contingent liability~~ at fair value ~~in the condensed consolidated balance sheets~~ as of September 30, ~~2021.~~2022. The ~~cash consideration paid for~~Company has classified the ~~acquisition was funded by cash on hand.~~

~~Acquisition costs are not included~~fair value measurements as ~~components of consideration transferred and instead are accounted for as expenses~~a Level 3 measurement in the ~~period~~fair value hierarchy as the fair value has been estimated using publicly available prices for some of the assets, and business partners' estimates for assets with prices not readily available, due to the relatively small size of the industry in which ~~the costs are incurred. The Company incurred costs related to the ISI acquisition of approximately $67,000~~ ~~included in selling, general and administrative expenses in the Company's condensed consolidated statements of operations and comprehensive loss for the quarter ended September 30, 2020.~~

~~The pro forma impact of the acquisition to the historical financial results was determined not to~~they can be ~~significant.~~

~~A deferred tax liability arising from the difference between book purchase price allocation and tax basis has been assessed in the amount of $107,000~~. Deferred tax liabilities are required to be recorded in purchase accounting independently of whether the acquiror has a valuation allowance on its own net deferred tax assets. As a result, the combined entity now has additional deferred tax liabilities available to reduce the amount of valuation allowance necessary. Future reversals of existing taxable temporary differences are an objective source of future taxable income. Accordingly, the purchase accounting deferred tax liabilities enabled the realization of a portion of the existing deferred tax assets, thus allowing for a reduction in the valuation allowance. The reduction in the valuation allowance is not accounted for as part of the purchase accounting but is recognized in the condensed consolidated statements of operations and comprehensive loss as a discrete tax benefit in the income tax provision.

The former shareholders of ISI remain responsible for ISI’s pre-acquisition liabilities. Pursuant to the definitive acquisition agreement, the Company entered into a lease agreement with ISI for the use of land, equipment, greenhouses and buildings. ~~The lease was effective upon the execution of the definitive acquisition agreement and has a term of~~ 3 ~~years with the~~ ~~option to renew~~ ~~for~~ 3 ~~additional~~ 3~~-year terms.~~used.

7.6. Arcadia Wellness Acquisition

On May 17, 2021, the Company’s wholly owned subsidiary Arcadia Wellness, acquired the assets of Eko, Lief, and Zola. The acquisition included consumer ~~CBD~~ brands ~~like~~of bath and body care products such as Soul ~~Spring™,~~Spring, the CBD-infused botanical therapy brand, Saavy ~~Naturals™,~~Naturals, a line of ~~all-natural~~natural body care products and ~~Provault™,~~ProVault, a CBD-infused sports performance formula. Also included in the purchase was Zola, a coconut water sourced from Thailand. ~~Key personnel have joined Arcadia Wellness.~~

The acquisition was recorded as a business combination, in accordance with ASC ~~Topic~~ 805. The purchase price consideration for the acquisition totaled an estimated $6.1 million, of which $4.0 million in cash and $2.1 million in the form of 827,401 shares of the Company’s common stock, was paid during the month of May 2021. The cash consideration paid for the acquisition was funded by cash on hand.

Acquisition costs are not included as components of consideration transferred and instead are accounted for as expenses in the period in which the costs are incurred. The Company incurred costs related to the Arcadia Wellness acquisition of approximately $850,000 included in selling, general and administrative expenses in the Company's ~~condensed~~ consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2021.

The Company performed ~~a preliminary~~an allocation of purchase price as of the acquisition date based on management's estimates of fair value. The Company believes its estimates and assumptions are reasonable; however, the initial estimated purchase price allocation is subject to change as the Company finalizes its determination relating to the valuation of the assets acquired, finalization of key assumptions, approaches and judgments with respect to intangible assets acquired. Accordingly, future adjustments may impact the initial estimated amount of goodwill and other allocated amounts represented in the table below. The final determination of the fair value of the assets acquired will be completed as soon as the necessary information is available, but no later than one year from the acquisition date.reasonable.

The following table presents the ~~preliminary~~ allocation of the purchase price of the assets acquired ~~based on their~~at fair ~~values~~value at ~~September 30, 2021.~~the acquisition date:


	Purchase Price Allocation
Inventory	$	840
Prepaid and other current assets		62
Fixed assets		308
Deposits		82
Customer list		360
Trade names and trademarks		2,900
Formulations		260
Goodwill		1,240
Total consideration allocated	$	6,052

The former shareholders of Eko, Lief, and Zola remain responsible for their pre-acquisition liabilities. ~~Following~~In connection with the ~~definitive~~ acquisition, ~~agreement,~~ the Company entered into a lease agreement for the use of offices, production equipment acquired, and storage warehouses. The lease was effective on May 17, 2021 and has a term of 3 years.

For the period from January 1, 2022 to September 30, 2022, the Company recognized approximately $5.6 million of revenue and $1.3 million of net loss relating to Arcadia Wellness, which included charges related to the Radiance Beauty licensing agreement discussed below, as well as the amortization of acquired intangible assets.

For the period from May 17, 2021 to ~~September 30,~~December 31, 2021, the Company recognized approximately $~~2.6~~4.3 million of revenue and $~~1.0~~7.5 million of net loss relating to Arcadia Wellness, which included charges for the amortization of acquired intangible assets.

Acquired intangible assets of $3.5 million include trade names and trademarks of $2.9 million (indefinite useful life), customer list of $360,000 (fifteen-year useful life) and formulations of $260,000 (ten-yearuseful life). For impairments related to the acquired intangible assets see Note 7.

The total weighted average amortization period for the acquired intangibles is 12.9 years.

The acquisition produced $1.2 million of ~~goodwill. The~~ goodwill, ~~is attributable to a combination of Arcadia Wellness’s expectation regarding a more meaningful engagement by~~which was fully impaired during the ~~customers~~year ended December 31, 2021, due to ~~the scale~~weakness in some of the newly acquired consumer product margins, combined ~~Company,~~with a volatile economic climate and ~~other synergies. Goodwill will be tested for impairment at least annually (more frequently if certain indicators are present).~~higher than normal inflation. Goodwill arising from the Arcadia Wellness acquisition iswas not deductible for tax purposes.

On July 8, 2022, the Company entered into a licensing agreement with Radiance Beauty. Under the terms of the licensing agreement, Radiance Beauty was granted an exclusive, transferable, sublicensable, perpetual, worldwide license to use the Saavy Naturals™ mark and to modify, manufacture, distribute, market and sell related products. In addition, as part of the licensing agreement, Radiance Beauty received the remaining accounts receivables and inventory balances after July 31, 2022, certain equipment, as well as three months of salaries in the amount of $355,000 and rent, maintenance and utilities in the amount of $19,000. Radiance Beauty is subleasing space from the Company and will pay the Company a 4% royalty of gross sales of products beginning January 1, 2023. During the nine months ended September 30, 2022, accounts receivables and inventories of $21,000 and $394,000, respectively, were written down. In addition, property and equipment and intangible assets were written down by $320,000 and $72,000, respectively, during the nine months ended September 30, 2022.

Supplemental Pro-Forma Results of Operations (Unaudited)

The following unaudited pro-forma condensed consolidated results of operations for the three and nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, have been prepared as if the acquisition of Arcadia Wellness had occurred on January 1, ~~2020~~2021 and includes adjustments for amortization of intangibles, and the addition to basic and diluted weighted average number of shares outstanding.


	For the three months ended September 30,						For the nine months ended September 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2021 (Pro forma)			2020 (Pro forma)			2021 (Pro forma)			2020 (Pro forma)			2022 (Pro forma)			2021 (Pro forma)			2022 (Pro forma)			2021 (Pro forma)
Total revenues	$	2,376		$	2,461		$	6,892		$	6,323		$	1,878		$	2,376		$	8,956		$	6,892
Net income (loss)		(2,836	)		(7,523	)		(8,296	)		(15,601	)
Net income (loss) attributable to common stockholders	$	(2,175	)	$	(6,749	)	$	(7,109	)	$	(14,520	)
Net loss														(2,877	)		(2,836	)		(11,284	)		(8,296	)
Net loss attributable to common stockholders													$	(2,867	)	$	(2,175	)	$	(11,132	)	$	(7,109	)
Weighted average shares - Basic and diluted		22,177,423			11,547,018			21,286,380			10,397,659			24,552,543			22,175,423			22,984,816			21,286,380
Net income (loss) per share attributable to common stockholders:
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.10	)	$	(0.58	)	$	(0.33	)	$	(1.40	)	$	(0.12	)	$	(0.10	)	$	(0.48	)	$	(0.33	)

8.7. Intangible assets, net

The Company’s intangible assets, net, ~~as of September 30, 2021,~~ consist of the following:


	September 30, 2021						December 31, 2020						September 30, 2022						December 31, 2021
	Gross Carrying Amount		Accumulated Amortization and Impairment (1)		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount (2)		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount (1)		Accumulated Amortization		Net Carrying Amount
Amortized intangible assets
Intellectual property	$	796	$	191	$	605	$	310	$	27	$	283	$	254	$	141	$	113	$	258	$	107	$	151
Customer lists		400		31		369		40		3		37		64		32		32		71		26		45
Total amortizable intangible assets	$	1,196	$	222	$	974	$	350	$	30	$	320	$	318	$	173	$	145	$	329	$	133	$	196

Indefinite-lived intangible assets
Brands and trademarks	$	2,950	$	19	$	2,931	$	50	$	—	$	50	$	228	$	—	$	228	$	288	$	—	$	288
Total intangible asset, net	$	4,146	$	241	$	3,905	$	400	$	30	$	370	$	546	$	173	$	373	$	617	$	133	$	484

(1) ~~During~~ The gross carrying amounts included in this table reflect the ~~three months~~effects of the impairments of intangible assets recorded during the year ended ~~September 30,~~December 31, 2021, wewhen the Company estimated an overall decrease in ~~our~~the sales forecast for AW products, due to an inventory item rationalization, in addition to a decrease in the sales forecast of ISI seeds, related to the saturated hemp seed market. As a result, weArcadia performed a quantitative intangible assets ~~recoverability~~impairment test. WeThe Company used ~~an undiscounted~~a discounted cash flow approach to develop the ~~estimated~~ fair value of ~~our~~the acquired intellectual property, customer lists, brands and trademarks. As a result of this assessment, weArcadia recorded an impairment of intangible assets in the amount of $~~120,000~~3.3 million in the condensed consolidated statements of operations and comprehensive loss for the ~~three~~year ended December 31, 2021.

(2) The Company recorded an impairment of intangible assets in the amount of $72,000 during the nine months ended September 30, ~~2021.~~2022 related to the Radiance Beauty licensing agreement.

1211

Intellectual property and customer lists will be amortized based on their useful lives ranging between 4 and 15 years. As of September 30, ~~2021,~~2022, future amortization of intellectual property and customer lists is as follows:


Year Ending December 31,
2021 (excluding the nine months ended September 30, 2021)	$	30
2022		122
2022 (excluding the nine months ended September 30, 2022)			$	13
2023		122		53
2024		122		53
2025		73		4
2026				4
Thereafter		505		18
Total	$	974	$	145

9.8. 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 “Operating Agreement”). The Company and Legacy formed Archipelago to develop, extract and commercialize hemp-derived products from industrial hemp grown in Hawaii.

Pursuant to the Operating Agreement, a joint operating committee consisting of 2two individuals appointed by the Company and 2two individuals appointed by Legacy will manage Archipelago. As of September 30, ~~2021,~~2022, the Company and Legacy hold ~~55.10~~50.75% and ~~44.90~~49.25% interests in Archipelago, respectively, and have made capital contributions to Archipelago of $~~3,701,000~~3.1 million and $~~3,016,000~~3.0, million, respectively, as determined by the joint operating committee. The Operating Agreement includes indemnification rights, non-competition obligations, and certain rights and obligations in connection with the transfer of membership interests, including rights of first refusal.

The Company consolidates Archipelago in the condensed consolidated financial statements after eliminating intercompany transactions. Net loss attributable to non-controlling interest of $10,000 and $152,000 is recorded as an adjustment to net loss to arrive at net loss attributable to common stockholders for the three and nine months ended September 30, 2022, respectively. Net loss attributable to non-controlling interest of $661,000 and $~~1,199,000~~1.2 ismillion was recorded as an adjustment to net loss to arrive at net loss attributable to common stockholders for the three and nine months ended September 30, 2021, respectively. Legacy’s equity interests are presented as non-controlling interests on the condensed consolidated balance sheets. Refer to Note 1 for basis of presentation.

In October 2021, Arcadia and Legacy mutually agreed to wind down the cultivation activities of Archipelago, due to ~~the weak~~regulatory challenges and a saturated hemp ~~market demand and to the sufficient internal ingredient supply for the foreseeable future. See Note 4, for the related impairment of fixed assets.~~market.

~~10.~~9. Collaborative Arrangements

In August 2017, the Company entered into a collaborative arrangement for the research, development and commercialization of an improved wheat quality trait in North America. This collaborative arrangement is a contractual agreement with Corteva AgriScience (“Corteva”) and involves a joint operating activity where both Arcadia and Corteva are active participants in the activities of the collaboration. Arcadia and Corteva participate in the research and development, and Arcadia has the primary responsibility for the intellectual property strategy while Corteva will generally lead the marketing and commercialization efforts. Both parties are exposed to significant risks and rewards of the collaboration and the agreement includes both cost sharing and profit sharing. The activities are performed with no guarantee of either technological or commercial success.

The Company accounts 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.

1312

~~11.~~10. Leases

Operating Leases

As of September 30, ~~2021,~~2022, the Company leases office space in Davis, CA, ~~Phoenix, AZ, Molokai, HI, Chatsworth, CA,~~ and ~~Chesterfield, MO~~Dallas, TX, as well as additional buildings, land and equipment. 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 subleases a portion of the Davis office lease to third parties. In May 2022, the Company terminated its lease for office space in Chesterfield, MO effective September 30, 2022. The original lease term was scheduled to expire in May 2024. As a ~~third party.~~result, the Company paid $47,000 in early termination fees during the nine months ended September 30, 2022. In addition, the Company subleased the facility in Chatsworth, CA to Radiance Beauty as part of the licensing agreement beginning November 1, 2022 for the remainder of the lease term. During the nine months ended September 30, ~~2021,~~2022, the Company entered into ~~two leases for~~an agreement to lease office space in ~~Chesterfield, MO, and for office space and production in Chatsworth, CA, both with a~~Dallas, TX. The new lease ~~term of~~ ~~35 months~~ ~~following the commencement date and~~ ~~no renewal option. The leases~~ commenced in ~~April and May of 2021, respectively. There are no other leases that have not yet commenced as of September 30, 2021.~~July 2022.

Some leases (the Davis ~~office,~~and Dallas offices, a warehouse, ~~greenhouses~~ and a copy machine) include one or more options to renew, with renewal terms that can extend the lease term from one to six years. The exercise of lease renewal options is at the Company’s sole discretion. ~~During the three months ended March 31, 2020, the Company entered into a~~ ~~lease amendment that provided for additional office space in Davis, CA, and extended the term through April 2025, with one option to renew for an additional~~ ~~five-year~~ ~~term. The Company initially expected to exercise its options to renew, and in accordance with ASC 842 Leases, accounted for the amendment and expected renewal as a lease modification and remeasured the operating lease liability.~~ During the three months ended September 30, 2021, the Company re-assessed its post-COVID long-term strategy regarding office spaces, and determined that the expectation to exercise its option to renew for an additional ~~five-year~~ ~~term after April 2025 is no longer reasonable. In accordance with ASC 842, the Company accounted for the change that resulted in a decrease of $2.8~~ ~~million for the operating lease liability and of $2.6~~ ~~million for the right of use asset.~~

The Company’s lease agreements do not contain any material variable lease payments, material residual value guarantees or material restrictive covenants. Leases consisted of the following (in thousands):


Leases	Classification	September 30, 2021		December 31, 2020		Classification	September 30, 2022		December 31, 2021
Assets
Operating lease assets	Right of use asset	$	3,486	$	5,826	Right of use asset	$	2,073	$	3,081
Total leased assets		$	3,486	$	5,826		$	2,073	$	3,081
Liabilities
Current - Operating	Operating lease liability- current	$	1,134	$	717	Operating lease liability- current	$	986	$	1,074
Noncurrent - Operating	Operating lease liability- noncurrent		2,562		5,389	Operating lease liability- noncurrent		1,269		2,220
Total leased liabilities		$	3,696	$	6,106		$	2,255	$	3,294


Lease Cost	Classification	For the Three Months Ended September 30, 2021			For the Three Months Ended September 30, 2020			For the Nine Months Ended September 30, 2021			For the Nine Months Ended September 30, 2020			Classification	Three Months Ended September 30, 2022			Three Months Ended September 30, 2021			Nine Months Ended September 30, 2022			Nine Months Ended September 30, 2021
Operating lease cost	SG&A and R&D Expenses	$	319		$	261		$	955		$	745		SG&A and R&D Expenses	$	271		$	319		$	815		$	955
Short term lease cost (1)	R&D Expenses		37			109			67			303		R&D Expenses		(7	)		37			4			67
Short term lease cost	SG&A Expenses		14			—			29			3		SG&A Expenses		—			14			0			29
Sublease income (2)	SG&A and R&D Expenses		(10	)		(12	)		(43	)		(34	)	SG&A and R&D Expenses		(99	)		(10	)		(276	)		(43	)
Net lease cost		$	360		$	358		$	1,008		$	1,017			$	165		$	360		$	543		$	1,008

(1)

Short term lease cost consists of field trial lease agreements with a lease term of 12 months or less.

(2)

Sublease income is recorded as a reduction to lease expense.


Lease Term and Discount Rate	September 30, 2021			December 31, 2020			September 30, 2022			December 31, 2021
Weighted-average remaining lease term (years)		2.6			5.0			2.3			2.7
Weighted-average discount rate		6.4	%		6.0	%		6.4	%		6.0	%

~~12.~~11. Equity Financing

Private Placements

In January 2021, the Company issued in a private placement offering (the “January 2021 Private Placement”) pursuant to a securities purchase agreement (“January 2021 Purchase Agreement”) (i) 7,876,784 shares of its common stock, and (ii) warrants to purchase up to 3,938,392 shares of common stock at an exercise price of $3.13 per share (the “January 2021 Warrants”) and raised total gross proceeds of $25.1 million. The January 2021 Warrants are exercisable at any time at the option of the holder and expire 5.5 years from the date of issuance. In connection with the January 2021 Private Placement, the Company granted to a placement agent warrants to purchase a total of 393,839 shares of Common Stock (the “January 2021 Placement Agent Warrants”) that have an exercise price per share equal to $3.99 and a term of 5.5 years from the date of issuance.

The common stock warrants are classified as a liability within Level 3 due to a contingent cash payment feature. The Company utilized a Black Scholes Merton model on January 28, 2021 with the following assumptions: volatility of 123.8 ~~percent,~~%, stock price of $2.88 and risk-free rate of 0.5%. The estimated fair value of the common stock warrant liability was subsequently remeasured at ~~September 30,~~December 31, 2021 with the changes recorded on the Company’s ~~condensed~~ consolidated statements of operations and comprehensive loss. ~~See Note 5.~~

The January 2021 Placement Agent Warrants were issued for services performed by the placement agent as part of the January 2021 Private Placement and were treated as offering costs. The value of the January 2021 Placement Agent Warrants was determined to be $942,000, calculated using ~~the~~a Black-Scholes Model with input assumptions including the Company’s stock price, expected life of the warrants, stock price volatility determined from the Company’s historical stock prices, and the risk-free interest rate for the term of the warrants.Model. The Company incurred additional offering costs totaling $1.9 million that consist of direct incremental legal, advisory, accounting and filing fees relating to the January 2021 Private Placement. The offering costs, inclusive of the January 2021 Placement Agent Warrants, totaled $2.8 million and allocated to the common stock warrant liability and the common stock using their relative fair values. A total of $769,000 was allocated to the common stock warrant liability and expensed and the remaining $2.0 million was allocated to the common stock and offset to additional paid in capital.

In March 2018, the Company issued in a private placement offering (the “March 2018 Private Placement”) pursuant to a securities purchase agreement (“March 2018 Purchase Agreement”) (i) 300,752 shares of its common stock and (ii) warrants to purchase up to 300,752 shares of common stock at an initial exercise price equal to $45.75 (the “March 2018 Warrants”) and raised total gross proceeds of $10.0 million. The March 2018 Warrants are exercisable at any time at the option of the holder and expire five years from the date of issuance. In connection with the March 2018 Private Placement, the Company granted to a placement agent warrants to purchase a total of 15,038 shares of Common Stock (the “March 2018 Placement Agent Warrants”) that have an exercise price per share equal to $41.5625 and a term of five years from the date of issuance.

The number of shares of common stock and the number and exercise price of the March 2018 Warrants issued in the March 2018 Private Placement were subject to adjustments as provided in the March 2018 Purchase Agreement. Following the adjustments as provided in the March 2018 Purchase Agreement, the number of shares issued to the purchasers was 1,201,634, the total number of shares issuable upon exercise of the March 2018 Warrants was 1,282,832 and the per share exercise price of the March 2018 Warrants was $10.7258.

Registered Direct Offerings

On May 11, 2018, the Company filed a shelf Registration Statement on Form S-3 with the SEC which was declared effective on June 8, 2018 (“2018 Shelf Registration Statement”). ~~This~~On April 21, 2022, the Company filed a shelf ~~registration process~~Registration Statement on Form S-3 with the SEC which was declared effective on May 12, 2022 (“2022 Shelf Registration Statement”). Each of the 2018 Shelf Registration Statement and the 2022 Shelf Registration Statement allows the Company to sell any combination of common stock, preferred stock, warrants and units consisting of such securities in one or more offerings from time to time having aggregate offering prices of up to $5050.0 million. The Company ceased being able to use the 2018 Shelf Registration Statement after June 8, 2021, the three-year anniversary of its effective date. The 2022 Shelf Registration Statement may no longer be used after May 12, 2025, the three-year anniversary of its effective date.

In ~~June 2018,~~August 2022, the Company entered into a securities purchase agreement (the ~~“June 2018~~“August 2022 Purchase Agreement”) pursuant to which it sold (i) ~~1,392,345~~2,450,000 registered shares of its common stock, pursuant to the 2022 Shelf Registration Statement, (ii) pre-funded common stock purchase warrants (the “Pre-Funded Warrants”) to purchase up to 2,272,506 shares of common stock, at an exercise price of $0.0001 per share, which Pre-Funded Warrants were registered under the 2022 Shelf Registration Statement, and (iii) unregistered preferred investment options (the "August 2022 Options") to purchase up to 4,722,506 shares of common stock, at an exercise price of $0.93376 per share, in a private placement, for total gross proceeds of $5.0 million (the “August 2022 Registered Direct Offering”). The August 2022 Registered Direct Offering closed on August 16, 2022. The August 2022 Pre-Funded Warrants became exercisable upon issuance and are exercisable until exercised in full. The August 2022 Options became exercisable upon issuance and expire 5 years after the date of issuance. In connection with the August 2022 Registered Direct Offering, the Company granted to a placement agent preferred investment options ("August 2022 Placement Agent Options") to purchase a total of 236,125 shares of common stock that have an exercise price per share equal to $1.32 and a term of five years.

The August 2022 Options and August 2022 Placement Agent Options are classified as liabilities within Level 3 due to a certain early settlement provisions that preclude them from equity classification. The Company utilized a Black-Scholes Merton model on August 16, 2022 with the following assumptions: volatility of 128.46%, stock price of $0.94, risk-free rate of 2.97% and a term of 5 years. The estimated fair value of the common stock option liabilities was subsequently remeasured at September 30, 2022 with the changes recorded on the Company’s consolidated statements of operations and comprehensive loss.

The August 2022 Placement Agent Options were issued for services performed by the placement agent as part of the August 2022 Registered Direct Offering and were treated as offering costs. The value of the August 2022 Placement Agent Options was determined to be $191,000, calculated using a Black-Scholes Model. The Company incurred additional offering costs totaling $488,000 that consist of direct incremental legal, advisory, accounting and filing fees relating to the August 2022 Registered Direct Offering. The offering costs, inclusive of the August 2022 Placement Agent Options, totaled $679,000 and were allocated to the common stock option liabilities, the common stock and Pre-Funded Warrants using their relative fair values. A total of $314,000 was allocated to the common stock option liabilities and expensed while the remaining $365,000 was allocated to the common stock and Pre-Funded Warrants and offset to additional paid in capital.

In December 2020, the Company entered into a securities purchase agreement (the “December 2020 Purchase Agreement”) pursuant to which it sold (i) 2,618,658 registered shares of its common stock pursuant to the 2018 Shelf Registration Statement and (ii) unregistered warrants to purchase ~~1,392,345~~2,618,658 shares of its common stock (the ~~“June 2018~~“December 2020 Warrants”) in a private placement, for total gross proceeds of $~~14.0~~8.0 million (the ~~“June 2018~~“December 2020 Registered Direct Offering”). The ~~June 2018~~December 2020 Registered Direct Offering closed on ~~June 14, 2018~~December 22, 2020. The ~~June 2018~~December 2020 Warrants have an exercise price of $~~9.94~~3.00 per share, became exercisable upon issuance and expire 5.5 years after the date of issuance. In connection with the ~~June 2018~~December 2020 Registered Direct Offering, the Company granted to a placement agent warrants to purchase a total of ~~69,617~~130,933 shares of common stock (“~~June 2018~~December 2020 Placement Agent Warrants”) that have an exercise price per share equal to $~~12.568~~ ~~and a term of~~ ~~five years~~.

~~In June 2019, the Company entered into a securities purchase agreement (the “June 2019 Purchase Agreement”) pursuant to which it sold (i)~~ ~~1,489,575~~ ~~registered shares of its common stock pursuant to the Shelf Registration Statement and (ii) unregistered warrants to purchase~~ ~~1,489,575~~ ~~shares of its common stock (the “June 2019 Warrants”) in a private placement, for total gross proceeds of $7.5~~ ~~million (the “June 2019 Registered Direct Offering”). The June 2019 Registered Direct Offering closed on~~ ~~June 14, 2019. The June 2019 Warrants have an exercise price of $5.00~~ ~~per share, became exercisable upon issuance and expire~~ ~~5.5~~ ~~years after the date of~~

~~issuance. In connection with the June 2019 Registered Direct Offering, the Company granted to a placement agent warrants to purchase a total of~~ ~~74,479~~ ~~shares of common stock (“June 2019 Placement Agent Warrants”) that have an exercise price per share equal to $6.2938~~3.8188 and a term of five years.

In September 2019, the Company entered into a securities purchase agreement (the “September 2019 Purchase Agreement”) pursuant to which it sold (i) 1,318,828 registered shares of its common stock pursuant to the 2018 Shelf Registration Statement and (ii) unregistered warrants to purchase 659,414 shares of its common stock (the “September 2019 Warrants”) in a private placement, for total gross proceeds of $10.0 million (the “September 2019 Registered Direct Offering”). The September 2019 Registered Direct Offering closed on September 5, 2019. The September 2019 Warrants have an exercise price of $7.52 per share, became exercisable upon issuance and expire 5.5 years after the date of issuance. In connection with the September 2019 Registered Direct Offering, the Company granted to a placement agent warrants to purchase a total of 65,942 shares of common stock (“September 2019 Placement Agent Warrants”) that have an exercise price per share equal to $9.4781 and a term of five years.

In ~~December 2020,~~June 2019, the Company entered into a securities purchase agreement (the ~~“December 2020~~“June 2019 Purchase Agreement”) pursuant to which it sold (i) ~~2,618,658~~1,489,575 registered shares of its common stock pursuant to the 2018 Shelf Registration Statement and (ii) unregistered warrants to purchase ~~2,618,658~~1,489,575 shares of its common stock (the ~~“December 2020~~“June 2019 Warrants”) in a private placement, for total gross proceeds of $~~8.0~~7.5 million (the ~~“December 2020~~“June 2019 Registered Direct Offering”). The ~~December 2020~~June 2019 Registered Direct Offering closed on ~~December 22, 2020~~June 14, 2019. The ~~December 2020~~June 2019 Warrants have an exercise price of $~~3.00~~5.00 per share, became exercisable upon issuance and expire 5.5 years after the date of issuance. In connection with the ~~December 2020~~June 2019 Registered Direct Offering, the Company granted to a placement agent warrants to purchase a total of ~~130,933~~74,479 shares of common stock (“~~December 2020~~June 2019 Placement Agent Warrants”) that have an exercise price per share equal to $~~3.8188~~6.2938 and a term of five years. ~~See Note 13.~~

1~~3. Warrants~~

~~Common Stock Warrant transactions~~

In ~~May 2020, several existing accredited investors exercised the~~ June 2018, ~~Warrants~~the Company entered into a securities purchase agreement (the ~~“May 2020 Warrant Exercise Transaction”~~“June 2018 Purchase Agreement”) pursuant to which it sold (i) 1,392,345 registered shares of its common stock pursuant to the 2018 Shelf Registration Statement and (ii) unregistered warrants to purchase ~~up to an aggregate of~~ 1,392,345 shares of ~~the Company’s~~its common stock at(the “June 2018 Warrants”) in a ~~reduced exercise price of $4.90~~ ~~per share~~private placement, for total gross proceeds of $~~6.8~~14.0 ~~million. As consideration for the exercise of the~~million (the “June 2018 Registered Direct Offering”). The June 2018 Registered Direct Offering closed on June 14, 2018. The June 2018 Warrants ~~the Company issued new unregistered warrants to purchase up to~~ ~~1,392,345~~ ~~shares of common stock (the “May 2020 Warrants”) at~~have an exercise price of $~~4.775~~9.94 per share, ~~with an exercise period of~~became exercisable upon issuance and expire ~~five years~~5.5 ~~from~~years after the date of issuance. ~~The May 2020 Warrants were valued at $4.4~~ ~~million, which was calculated using the Black-Scholes Model with the following assumptions: volatility of~~ ~~128~~ ~~percent, stock price of $3.81, and risk-free rate of~~ ~~0.38~~%. In connection with the ~~May 2020 Warrant Exercise Transaction,~~June 2018 Registered Direct Offering, the Company granted to a placement agent warrants to purchase a total of 69,617 shares of common stock ~~(the “May 2020~~(“June 2018 Placement Agent Warrants”) that have an exercise price per share equal to $~~6.125~~12.568 and a term of five years. ~~The value of the May 2020 Placement Agent~~

12. Warrants ~~was determined to be $215,000~~ ~~using the Black-Scholes Model. The Company recognized a gain on extinguishment of warrant liability in the amount of $47,000~~ ~~associated with this transaction, during the quarter ended June 30, 2020.~~

~~In July 2020, an existing accredited investor exercised its March 2018 Warrants (the “July 2020 Warrant Exercise Transaction”) to purchase up to an aggregate of~~ ~~641,416~~ ~~shares of the Company’s common stock at a reduced exercise price of $3.975~~ ~~per share for gross proceeds of $2.6~~ ~~million. As consideration for the exercise of these March 2018 Warrants, the Company issued new unregistered warrants to purchase up to~~ ~~641,416~~ ~~shares of common stock (the “July 2020 Warrants”) at an exercise price of $3.85~~ ~~per share with an exercise period of~~ ~~5.5~~ ~~years from the date of issuance. The July 2020 Warrants were valued at $2.1~~ ~~million, which was calculated using the Black-Scholes Model with the following assumptions: volatility of~~ ~~126~~ ~~percent, stock price of $3.73~~, and ~~risk-free rate of~~ ~~0.35%. In connection with the July 2020 Warrant Exercise Transaction, the Company granted to a placement agent warrants to purchase a total of~~ ~~32,071~~ ~~shares of common stock (the “July 2020 Placement Agent Warrants”) that have an exercise price per share equal to $4.969~~ ~~and a term of~~ ~~5.5~~ ~~years. The value of the July 2020 Placement Agent Warrants was determined to be $101,000~~ ~~using the Black-Scholes Model. The Company recognized a loss on extinguishment of warrant liability in the amount of $682,000~~ ~~associated with this transaction, during the quarter ended September 30, 2020.~~Options

Equity Classified Common Stock Warrants

In connection with professional services agreements with non-affiliated third party entities, during the nine months ended September 30, 2021 and the year ended December 31, 2020, the Company issued service and performance warrants (“Service and Performance Warrants”).

~~As of September 30, 2021, the~~The Company issued the following warrants to purchase shares of its common ~~stock.~~stock, which are outstanding as of September 30, 2022 or December 31, 2021, respectively. These warrants are exercisable any time at the option of the holder until their expiration date.

Issuance Date

Term

Exercise
Price Per
Share

Warrants
Exercised
during the
Year Ended
December 31,
2020

Warrants
Outstanding at
December 31,
2020

Warrants
Exercised
during the
Nine
Months Ended
September 30,
2021

Warrants
Outstanding at
September 30,
2021

January 2021 Placement Agent Warrants

January 2021

5.5 years

$
3.99

—

—

—

393,839

January 2021 Service and Performance Warrants

January 2021

2 years

$
3.08

—

—

—

7,500

December 2020 Warrants

December 2020

5.5 years

$
3.00

—

2,618,658

—

2,618,658

December 2020 Placement Agent Warrants

December 2020

5 years

$
3.82

—

130,933

—

130,933

July 2020 Warrants

July 2020

5.5 years

$
3.85

—

641,416

—

641,416

July 2020 Placement Agent Warrants

July 2020

5.5 years

$
4.97

—

32,071

—

32,071

May 2020 Warrants

May 2020

5 years

$
4.78

—

1,392,345

—

1,392,345

May 2020 Placement Agent Warrants

May 2020

5 years

$
6.13

—

69,617

—

69,617

March 2020 Service and Performance Warrants

March 2020

3 years

$
2.50

—

18,350

—

18,350

February 12, 2020 Service and Performance Warrants

February 2020

2 years

$
4.71

—

150,000

—

150,000

February 3, 2020 Service and Performance Warrants

February 2020

2 years

$
4.91

—

10,000

—

10,000

September 2019 Placement Agent Warrants

September 2019

5 years

$
9.48

—

65,942

—

65,942

August 2019 Service and Performance Warrants

August 2019

2 years

$
1.92

—

20,000

(20,000
)

—

July 2019 Service and Performance Warrants

July 2019

2 years

$
2.19

—

10,000

(10,000
)

—

June 2019 Placement Agent Warrants

June 2019

5 years

$
6.29

—

74,479

—

74,479

April 2019 Service and Performance Warrants

April 2019

5 years

$
6.18

—

145,154

—

145,154

June 2018 Placement Agent Warrants

June 2018

5 years

$
12.57

—

69,617

—

69,617

March 2018 Placement Agent Warrants

March 2018

5 years

$
41.56

—

15,038

—

15,038

Total

—

5,463,620

(30,000
)

5,834,959


	Issuance Date	Term	Exercise Price Per Share		Exercised during the Year Ended December 31, 2021		Outstanding at December 31, 2021		Exercised during the Nine Months Ended September 30, 2022		Outstanding at September 30, 2022
August 2022 Pre-Funded Warrants	August 2022	perpetual	$	0.00		—		—		—		2,272,506
January 2021 Placement Agent Warrants	January 2021	5.5 years	$	3.99		—		393,839		—		393,839
January 2021 Service and Performance Warrants (1)	January 2021	2 years	$	3.08		—		7,500		—		7,500
December 2020 Warrants	December 2020	5.5 years	$	3.00		—		2,618,658		—		2,618,658
December 2020 Placement Agent Warrants	December 2020	5 years	$	3.82		—		130,933		—		130,933
July 2020 Warrants	July 2020	5.5 years	$	3.85		—		641,416		—		641,416
July 2020 Placement Agent Warrants	July 2020	5.5 years	$	4.97		—		32,071		—		32,071
May 2020 Warrants	May 2020	5 years	$	4.78		—		1,392,345		—		1,392,345
May 2020 Placement Agent Warrants	May 2020	5 years	$	6.13		—		69,617		—		69,617
March 2020 Service and Performance Warrants (1)	March 2020	3 years	$	2.50		—		18,350		—		18,350
February 12, 2020 Service and Performance Warrants (1)(3)	February 2020	2 years	$	4.71		—		150,000		—		—
February 3, 2020 Service and Performance Warrants (1)(3)	February 2020	2 years	$	4.91		—		10,000		—		—
September 2019 Placement Agent Warrants	September 2019	5 years	$	9.48		—		65,942		—		65,942
June 2019 Placement Agent Warrants	June 2019	5 years	$	6.29		—		74,479		—		74,479
April 2019 Service and Performance Warrants (1)	April 2019	5 years	$	6.18		—		145,154		—		145,154
June 2018 Placement Agent Warrants	June 2018	5 years	$	12.57		—		69,617		—		69,617
March 2018 Placement Agent Warrants	March 2018	5 years	$	41.56		—		15,038		—		15,038
January 2021 Warrants (2)	January 2021	5.5 years	$	3.13		—		3,938,392		—		3,938,392
September 2019 Warrants (2)	September 2019	5.5 years	$	7.52		—		659,414		—		659,414
June 2019 Warrants (2)	June 2019	5.5 years	$	5.00		—		435,830		—		435,830
June 2018 Warrants (2)	June 2018	5.5 years	$	9.94		—		—		—		—
March 2018 Warrants (2)	March 2018	5 years	$	10.73		—		641,416		—		641,416
Total						—		11,510,011		—		13,622,517

(1) The Company issued service and performance warrants (“Service and Performance Warrants”) in connection with professional services agreements with non-affiliated third party entities.

~~Liability Classified Common Stock Warrants~~(2)

Certain warrants contain a contingent cash payment feature and therefore were accounted for as a liability at the date of issuance and were adjusted to fair value at each balance sheet date. Upon adoption of ASU No. 2020-06 on January 1, 2022, all of the common stock warrant liabilities have been reclassified to equity classified common stock warrants, due to the elimination of the contingent cash payments as criteria for liability classification.

(3) These warrants expired in February 2022.

Liability Classified Preferred Investment Options

The preferred investment options issued in connection with the August 2022 Registered Direct Offering 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 ~~warrant liability~~options liabilities is recorded as change in fair value of common stock warrant and option liabilities in the ~~condensed~~ consolidated statements of operations and comprehensive loss. The key terms and activity of the liability classified ~~common stock warrants~~preferred investment options are summarized as follows:


	Issuance Date	Term	Exercise Price Per Share		Exercised during the Year Ended December 31, 2021		Outstanding at December 31, 2021		Exercised during the Nine Months Ended September 30, 2022		Outstanding at September 30, 2022
August 2022 Options	August 2022	5 years	$	0.93		—		—		—		4,722,506
August 2022 Placement Agent Options	August 2022	5 years	$	1.32		—		—		—		236,125
Total						—		—		—		4,958,631

~~See Note 5 for the Black-Scholes option-pricing model and weighted-average assumptions used to estimate the fair value of the warrant liabilities.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed 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 and those discussed in the section titled “Risk Factors” included in the most recent Annual Report on Form 10-K filed by the Company. 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.

We are a producer and marketer of innovative, plant-based health and wellness products. Our history as a leader in science-based approaches to developing high value crop improvements, primarily in wheat, ~~hemp and soy,~~ designed to enhance farm economics by improving the performance of crops in the field, as well as their value as food ingredients, health and wellness products, and their viability for industrial applications, has laid the foundation for our path forward. We have used non-genetically modified (“non-GMO”) advanced breeding techniques to develop these proprietary innovations which we are now commercializing through the sales of seed and grain, food ingredients and products, hemp extracts, trait licensing and royalty agreements. The ~~recent~~ acquisition of the assets of Lief Holdings, LLC (“Lief”), EKO Holdings, LLC (“EKO”) and Live Zola, LLC (“Zola”) ~~adds~~added bath and body care products, CBD consumer products, as well as coconut water, to our portfolio of products.

Our commercial strategy is to satisfy consumer nutrition, health and wellness demands with the superior functional benefits our crops deliver directly from the farm, enabling us to share premium economics throughout the ag-food supply chain and to build a world-class estate of high value traits and varieties. The acquisition of the Lief, EKO and Zola brands allows us to broaden our reach within the health and wellness sector.

~~According to ResearchandMarkets.com, the global wheat flour market in 2019 totaled $181 billion and is expected to reach $220 billion by 2027.~~ It is also estimated by the U.S. Department of Agriculture (“USDA”), that approximately ~~one-quarter~~one-fifth of the FDA recommended calories consumed by people in the US are from wheat. Therefore, the market opportunity for nutritional improvements in wheat are significant not only because the wheat market itself is vast, but also because of the “share of stomach” wheat represents. Considering that most people today are not getting enough fiber or protein in their daily diets, the superior nutrient density of our ~~non-GM~~non-GMO GoodWheat™ (“GoodWheat”) technology can improve the dietary intake of average consumers, by increasing their fiber and protein consumption without changing the way they eat. We believe this proprietary advantage gives GoodWheat the potential to become a global standard in wheat.

We believe there are significant opportunities to grow our business by executing the following elements of our strategy:

In May 2021, our wholly-owned subsidiary Arcadia Wellness, LLC, acquired the assets of Eko, Lief, and Zola. We intend for Arcadia Wellness, LLC, to house all of Arcadia Biosciences consumer goods businesses, including GoodWheat, Zola Coconut Water and ProVault Topical Pain Relief, as well as SoulSpring Body Care.

The passage of the U.S. Agriculture Improvement Act of 2018 – also known as the Farm Bill – confirmed the federal legalization of hemp, the term given to non-psychoactive cannabis containing less than 0.3% tetrahydrocannabinol (THC). It also included provisions for legalizing on a federal level hemp’s cultivation, transport and sale for the first time in more than 75 years. Arcadia conducts its business in only federal and state markets in which its activities are legal.

~~In addition to bringing new hemp varieties to market, we also see an attractive opportunity to service the growing consumer demand for Cannabidiol (“CBD”) and other hemp-derived cannabinoids. CBD~~GoodWheat brand is a naturally occurring compound found in the resinous flower of cannabis, a plant with a rich history as a medicine going back thousands of years. Today the therapeutic properties of CBD are being tested and confirmed by scientists and doctors around the world. According to a New Frontier Data report issued in March 2020, U.S. consumer spending on CBD is projected to grow from an estimated $14B USD in 2020 to $26B USD in 2025 with global demand accelerating significantly as countries formalize regulatory frameworks for the industry. Backed by our own consumer survey data, we believe our premium Hawaiian grown hemp provides a unique value proposition to consumers that will enable us to gain traction in the marketplace as we grow our business channels.

~~In 2018, we launched our GoodWheat brand, a non-genetically modified (non-GM)~~ portfolio of ~~wheat~~non-GMO wheat-based consumer products that ~~enables food manufacturers to differentiate their consumer-facing brands. Consumer food companies are looking to simplify their~~simplifies food ingredient formulations ~~and~~for consumers that are demanding “clean labeling” in their foods, ~~paying more for foods having fewer artificial ingredients~~ and ~~more natural, recognizable and healthy ingredients. A 2017 survey by PR agency Ingredient Communications found~~ that ~~73% of consumers~~ are ~~happy~~willing to pay a higher retail price for ~~a food or drink product~~products made with ingredients they recognize. Because GoodWheat increases the nutrient density directly in the primary grains and oils, it provides the mechanism for food formulation simplification naturally and cost effectively to meet evolving consumer demands.

The brand launch is a key element of the company’s go-to-market strategy to achieve greater value for its innovations by participating in downstream consumer revenue opportunities. We designed the brand to make an immediate connection with consumers that products made with GoodWheat meet their demands for healthier wheat options that also taste great. The GoodWheat brand encompasses our current and future non-GM wheat portfolio of high fiber Resistant Starch (RS) and Reduced Gluten wheat varieties, as well as future wheat innovations. In October 2019, the U.S. Patent and Trademark Office granted us the latest patents for extended shelf life wheat, the newest trait in our non-genetically modified wheat portfolio. This new trait was designed to promote whole wheat consumption by improving the shelf life and taste of whole grain wheat products.

~~With additional patents granted in 2020~~In June 2022, we now hold more than 15 global patents on our high fiber Resistant Starch wheat, protecting both bread wheat and durum (pasta) wheat. Claims granted recently strengthen our intellectual property for our Resistant Starch portfolio of products.

~~We are preparing for the launch of a line of food products under~~launched our GoodWheat ~~brand, with~~ pasta ~~as the initial category to be introduced~~available in ~~a soft-launch at the beginning of next year.~~five varieties including penne, spaghetti, fettuccine, elbows and rotini, in select retailers nationwide. Our pasta products ~~will utilize~~utilizes our GoodWheat grain as the sole ingredient, providing ~~them with a higher~~4X the fiber ~~content than~~of traditional ~~wheat.~~pasta and 9g protein per serving without sacrificing taste. In fact, our research shows taste parity to leading pasta brands, which is unique in the growing better-for-you pasta segment. In addition, GoodWheat is the only better-for-you pasta brand made from one simple ingredient, matching consumers’ preference for cleaner labels. Additional categories of products are slated for launch in ~~2022.~~2023.

~~In May 2021,~~We believe that natural hydration and the power of plant-based ingredients are the keys to unlock your inspiration from within, and we are proud to make delicious plant-powered beverages that provide the energy and focus you need to crush your day. From the coconut groves of Thailand, we bring you great tasting coconut water and are proud of our ~~wholly-owned subsidiary Arcadia Wellness, LLC, acquired~~long-lasting relationships with partners around the ~~assets~~world who are essential to the quality of ~~Eko, Lief,~~our products.

ProVault’s proprietary THC-Free, CBD-infused blend of natural ingredients and ~~Zola. The acquisition includes leading consumer CBD brands like Soul Spring™, the top selling CBD-infused botanical therapy brand~~fast-acting cooling agents are designed to safely and effectively relieve muscle and joint pain and soothe your skin. Our products are third-party tested for potency and purity from pesticides, fungicides, microbials and heavy metals. Our topical pain relievers are formulated to address performance concerns from everyday pain to skin protection. So whether you’re a true competitor, a weekend warrior or simply maintaining an active lifestyle, you can count on ProVault to help keep you in the ~~natural category, Saavy Naturals™, a leading line~~game. We believe what you put on your body is just as important as what you put in your body.

Inspired by nature’s ancient remedies and crafted with care, our SoulSpring products strive to help rejuvenate and renew your mind, body, and soul. Our CBD-infused blends of ~~all-natural body care products and Provault™, a CBD-infused sports performance formula made with~~ natural ingredients ~~providing effective support~~provide a more thoughtful, holistic approach to internal balance and ~~recovery~~overall well-being. SoulSpring premium, broad spectrum CBD is extracted from naturally-grown hemp and blended with nourishing botanicals and minerals. Our CBD is purity-tested, non-pshychoactive and non-intoxicating. Our passion for ~~athletes. Also included in the purchase is Zola, a leading coconut water sourced exclusively with sustainably grown coconuts from Thailand. Key personnel have joined Arcadia Wellness.~~wellness means thoughtfully choosing honest, natural ingredients - inspired by ancient remedies and carefully selected for their healing properties. We then mindfully blend these ingredients to retain their inner essence and natural properties.

In December 2019, we announced the launch of a new product line, GoodHemp, as the company's commercial brand for delivering hemp seeds, transplants, flower and extracts. The acquisition of Industrial Seed Innovations (“ISI”) in August 2020 brought ISI’s portfolio of strong performing, federally compliant hemp varieties to Arcadia’s GoodHemp™ catalog. ISI’s popular Umpqua, Rogue and Santiam seed varieties each bring unique and highly desirable characteristics to further differentiate Arcadia’s GoodHemp catalog.

In August 2019, we formed a new joint venture to serve the Hawaiian, North American and Asian hemp markets, Archipelago Ventures Hawaii, LLC (“Archipelago”). This venture between Arcadia and Legacy Ventures Hawaii (“Legacy”) combines Arcadia’s extensive genetic expertise and seed innovation history with Legacy’s growth capital and strategic advisory expertise in the Hawaiian markets.

In October 2021, Arcadia and Legacy mutually agreed to wind down the cultivation activities of Archipelago, due to the weak hemp market demand and to the sufficient internal ingredient supply for the foreseeable future.

In April 2021, we acquired the assets of Agrasys S.A., a food ingredients company based in Barcelona, Spain. The physical and intellectual property assets enable us to commercialize Tritordeum, a proprietary cereal grain that is a combination of durum wheat and wild barley, resulting in a nutritious grain high in fiber, protein and lutein. Tritordeum was developed at the Instituto de Agricultura Sostenible – Consejo Superior de Investigaciones Científicas, (IAS-CSIC) the largest public institution dedicated to agricultural research in Spain, and subsequently licensed exclusively to Agrasys for commercialization. We completed the transaction through Arcadia SPA, S.L., a newly formed company based in Spain, and key Agrasys personnel have joined Arcadia SPA to operate the Tritordeum business in Europe.

In 2012, we partnered with Bioceres, Inc. (“Bioceres”) an Argentina-based technology company, to form Verdeca LLC, (“Verdeca”) a U.S.-based joint venture company to deploy next-generation soybean traits developed to benefit soybean producers through quality improvement, stress mitigation and management practices. The HB4® soybean varieties deliver two layers of value for growers: drought and herbicide tolerance, offering resistance to a broad-spectrum herbicide utilized to prevent growth of a wide range of annual and perennial broadleaf weeds and grasses. In November 2020, we sold our membership interest in Verdeca to Bioceres in a transaction in which we received cash, shares of Bioceres stock and a royalty stream of up to $10 million on HB4 soybean sales. An additional $2 million in cash is to be paid upon achievement by Verdeca of specific regulatory or commercial milestones.

In early 2020, the World Health Organization ("WHO") determined the coronavirus ("COVID-19") was a worldwide pandemic. We are closely monitoring how the spread of the new strains of coronavirus are affecting our employees and business operations. We have developed preparedness plans to help protect the safety of our employees while safely continuing business operations. While management currently expects the impact of COVID-19 to be temporary, there is uncertainty around the duration and its broader impact on the economy and therefore the effects it will have on the Company’s financial condition, liquidity, operations, suppliers, industry, and workforce. The Company experienced delivery delays during the third quarter of 2021 due to a slowed global supply chain. However, management does not expect this will significantly impact revenues, due to the growth the Company is experiencing.

We derive our revenues primarily from product ~~revenues, royalties, license revenues~~sales and contract research agreements. Given our acute focus on selling our GoodWheat and Arcadia Wellness products, we do not intend to continue pursuing contract research agreements and government grant projects.royalties.

Our product revenues ~~to date have consisted~~consist primarily of sales of ~~our SONOVA~~Arcadia Wellness products, GoodWheat grain ~~sales,~~ and ~~GoodHemp seeds sales. This quarter also includes revenues from products within the recently acquired brands now part of Arcadia Wellness~~pasta, and ~~Arcadia Spain.~~GLA products. We recognize revenue from product sales when control of the product is transferred to third-party

distributors and manufacturers, collectively “our customers,” which generally occurs upon delivery. Our revenues fluctuate depending on the timing of shipments of product to our customers and are reported net of estimated chargebacks, returns and losses.

~~Our license~~Royalty revenues to date consist of up-front, nonrefundable license fees, annual license fees, and subsequent milestone payments that we receive under our research and license agreements. Revenue generated from up-front license fees are recognized upon execution of the agreement. We recognize annual license fees when it is probable that a material reversal will not occur.

Milestone fees are variable consideration that is initially constrained and recognized only when it is probable that such amounts would not be reversed. The Company assesses when achievement of milestones are probable in order to determine the timing of revenue recognition for milestone fees. Milestones typically consist of significant stages of development for our traits in a potential commercial product, such as achievement of specific technological targets, completion of field trials, filing with regulatory agencies, completion of the regulatory process, and commercial launch of a product containing our traits. Given the seasonality of agriculture and time required to progress from one milestone to the next, achievement of milestones is inherently uneven, and our license revenues are likely to fluctuate significantly from period to period.

Our royalty revenues consist of amounts earned from the sale of commercial products that incorporate our traits by third parties. Our royalty revenues consist of a minimum annual royalty, offset by amounts earned from the sale of products. We recognize the minimum annual royalty on a straight-line basis over the year, and we recognize 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. Our royalty revenues can fluctuate depending on the timing of shipments of product by the third parties to their customers.

~~Contract research and government grant~~Our license revenues consist of up-front, nonrefundable license fees, annual license fees, and subsequent milestone payments that we receive under our license agreements. Revenue generated from up-front license fees are recognized upon execution of the agreement. We recognize annual license fees when it is probable that a material reversal will not occur.

Milestone fees are variable consideration that is initially constrained and recognized only when it is probable that such amounts ~~earned~~would not be reversed. The Company assesses when achievement of milestones are probable in order to determine the timing of revenue recognition for milestone fees. Milestones typically represent significant stages of development for our traits in a potential commercial product, such as achievement of specific technological targets, completion of field trials, filing with regulatory agencies, completion of the regulatory process, and commercial launch of a product containing our traits. Given the seasonality of agriculture and time required to progress from ~~performing contracted research primarily related~~one milestone to ~~breeding programs or~~ the ~~genetic engineering~~next, achievement of ~~plants for third parties. Contract research revenue~~milestones is ~~accounted for as a single performance obligation for which~~inherently uneven, and our license revenues are ~~recognized over time using the input method (e.g., costs incurred~~likely to ~~date relative~~fluctuate significantly from period to ~~the total estimated costs at completion).~~period.

Cost of ~~product~~ revenues relates to the sale of ~~our SONOVA, GoodWheat, GoodHemp,~~ Arcadia Wellness, GoodWheat, and ~~Arcadia Spain~~GLA products and consists of ~~in-licensing and royalty fees, any adjustments or write-downs to inventory or prepaid production costs, as well as~~ the cost of raw materials, including internal and third-party services costs related to procuring, processing, formulating, packaging and shipping our ~~products.~~products, as well as in-licensing and royalty fees, any adjustments or write-downs to inventory or prepaid production costs.

Research and development expenses consist of costs incurred in the ~~discovery,~~ development and testing of our products and other products in development incorporating our traits. These expenses currently consist primarily of ~~employee salaries and benefits,~~ fees paid to ~~subcontracted research providers, fees associated with in-licensing technology, land leased for field trials, chemicals~~product formulation consultants and ~~supplies, and other external expenses. These costs~~ are expensed as incurred. Additionally, we are required from time to time to make certain milestone payments in connection with the development of technologies in-licensed from third parties. Our research and development expenses may fluctuate from period to period.

The gain on sale of Verdeca is the gain recognized for the sale our membership interests in the Verdeca joint venture to our partner Bioceres in November 2020.

Impairments of intangible assets are recorded when the fair value of intangible assets drops below its carrying amount. See Note 7 to the Condensed Consolidated Financial Statements.

Change in the fair value of contingent consideration is comprised of the fair value remeasurement of the liabilities associated with our contingent consideration. See Note 15 to the Condensed Consolidated Financial Statements.

Gain on sale of fixed assets includes gains from the sale of tangible assets sold above their net book value.

Impairment of property and equipment, net includes losses from tangible assets due to impairment or recoverability test charges to write down fixed assets to their fair value or recoverability value.

Selling, ~~General~~general and ~~Administrative Expenses~~administrative expenses

Selling, general and administrative expenses consist primarily of employee costs, professional service fees, broker and sales commission fees, and overhead costs. Our selling, general, and administrative expenses may fluctuate from period to period. In connection with our commercialization activities for our consumer products, we expect to increase our investments in sales and marketing, ~~and business development,~~ including additional consulting fees.

~~Impairments of intangible assets are recorded when the fair value of intangible assets drops below the previously recorded value from the time of the acquisition.~~

~~Change in the fair value of contingent consideration is comprised of the fair value remeasurement of the liabilities associated with our contingent consideration.~~

~~Write-down of fixed assets includes losses from tangible assets due to impairment or recoverability test charges to adjust fixed assets to their fair value or recoverability value.~~

~~Interest expense consists primarily of contractual interest on notes payable relating to the purchase of company vehicles, and the revolving line of credit.~~

Other income, net, consists of realized gains on corporate securities, and interest income ~~and the amortization of investment premium and discount~~ on our cash and cash equivalents and investments.

Issuance and offering costs generally include placement agent, legal, advisory, accounting and filing fees related to financing transactions.

Change in the ~~Estimated Fair Value~~estimated fair value of ~~Common Stock Warrant Liabilities~~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.

Our income tax provision has not been historically significant, as we have incurred losses since our inception. The provision for income taxes consists of state and foreign income taxes. Due to cumulative losses, we maintain a valuation allowance against our U.S. deferred tax assets as of September 30, ~~2021~~2022 and December 31, ~~2020.~~2021. We consider all available evidence, both positive and negative, including but not limited ~~to,~~to: earnings history, projected future outcomes, industry and market trends, and the nature of each of the deferred tax assets in assessing the extent to which a valuation allowance should be applied against our U.S. deferred tax assets.

Comparison of the Three Months Ended September 30, ~~2021~~2022 and ~~2020~~2021


	Three Months Ended September 30,						$ Change			% Change			Three Months Ended September 30,						$ Change			% Change
	2021			2020									2022			2021
	(In thousands except percentage)												(In thousands except percentage)
Revenues:
Product	$	2,324		$	245		$	2,079			849	%	$	1,851		$	2,324		$	(473	)		(20	)%
Royalty														17			35			(18	)		(51	)%
License		17			10			7			70	%		10			17			(7	)		(41	)%
Royalty		35			16			19			119	%
Contract research and government grants		—			43			(43	)		(100	)%
Total revenues		2,376			314			2,062			657	%		1,878			2,376			(498	)		(21	)%
Operating expenses:
Cost of product revenues		2,511			1,841			670			36	%
Operating expenses (income):
Cost of revenues														1,344			2,511			(1,167	)		(46	)%
Research and development		1,038			1,762			(724	)		(41	)%		255			1,038			(783	)		(75	)%
Impairment of intangible assets		120			—			120			100	%		—			120			(120	)		(100	)%
Write-down of fixed assets		1,108			—			1,108			100	%
Impairment of property and equipment														24			1,108			(1,084	)		(98	)%
Selling, general and administrative		6,312			4,292			2,020			47	%		4,835			6,312			(1,477	)		(23	)%
Total operating expenses		11,089			7,895			3,194			40	%		6,458			11,089			(4,631	)		(42	)%
Loss from operations		(8,713	)		(7,581	)		(1,132	)		15	%		(4,580	)		(8,713	)		4,133			47	%
Interest expense		(15	)		(23	)		8			(35	)%
Other (expense) income, net		(7	)		—			(7	)		(100	)%
Change in fair value of common stock warrant liabilities		4,777			1,130			3,647			323	%
Loss on extinguishment of warrant liability		—			(682	)		682			(100	)%
Interest income (expense)														95			(15	)		110			(733	)%
Other income (expense), net														43			(7	)		50			(714	)%
Change in fair value of common stock warrant and option liabilities														1,880			4,777			(2,897	)		(61	)%
Gain on extinguishment of PPP loan		1,123			—			1,123			100	%		—			1,123			(1,123	)		(100	)%
Issuance and offering costs														(314	)		—			(314	)		100	%
Net loss before income taxes		(2,835	)		(7,156	)		4,321			(60	)%		(2,876	)		(2,835	)		(41	)		1	%
Income tax provision		(1	)		(9	)		8			(89	)%		(1	)		(1	)		—			0	%
Net loss		(2,836	)		(7,165	)		4,329			(60	)%		(2,877	)		(2,836	)		(41	)		1	%
Net loss attributable to non-controlling interest		(661	)		(774	)		113			(15	)%		(10	)		(661	)		651			(98	)%
Net loss attributable to common stockholders	$	(2,175	)	$	(6,391	)	$	4,216			(66	)%	$	(2,867	)	$	(2,175	)	$	(692	)		32	%

Product revenues accounted for 99% and 98% ~~and 78%~~ of ~~our~~ total revenues induring the three months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~$2.1 million,~~$473,000, or ~~849%~~20%, ~~increase~~decrease in product revenues for the three months ended September 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 was ~~primarily~~ driven by ~~$1.8 million~~a decrease in sales of ~~sales related mainly~~body care products primarily due to the ~~newly acquired lines of~~focus on higher-margin products, ~~of Arcadia~~and the licensing agreement with Radiance Beauty and Wellness, Inc ("Radiance Beauty") executed in July 2022, in addition to ~~higher~~the timing of GLA ~~SONOVA sales.~~orders. See Note 6 to the Condensed Consolidated Financial Statements for details of the licensing agreement.

Royalty revenues accounted for 1% ~~and 5%~~ of ~~our~~ total revenues induring each of the three months ended September 30, ~~2021~~2022 and ~~2020, respectively.~~2021. The ~~$35,000~~$17,000 of royalty revenues for the three months ended September 30, ~~2021~~2022 represents the proportionate share of contracted minimum annual royalty fees.

~~Contract research and government grant~~Cost of revenues accounted for 0% and 14% of our total revenues for the three months ended September 30, 2021 and 2020, respectively. Our contract research and government grant revenues decreased by $43,000, or 100%, in the three months ended September 30, 2021 compared to the same period in 2020. The decrease was driven by the completion of agreements and grants during 2020. We do not intend to continue pursuing contract research agreements and government grant projects as we focus on selling our commercial products.

~~Cost of product~~ revenues ~~increased~~decreased by ~~$670,000,~~$1.2 million, or ~~36%~~46%, in the three months ended September 30, 2021 compared to the same period in 2020. The increase is mainly due to the increase in cost of product revenues of $1.7 million related to the newly acquired product lines, partially offset by lower inventory write-downs, which amounted to $449,000 during the three months ended September 30, 2022 compared to the same period in 2021 primarily due to lower revenues and ~~$1.5 million~~lower inventory write-downs in 2022. Gross profit, calculated as total revenues less cost of revenues, was $534,000 during the ~~third quarter~~three months ended September 30, 2022 compared to gross loss of ~~2020.~~$135,000 during the three months ended September 30, 2021. The ~~$449,000 of~~increase in the gross profit was primarily due to lower inventory write-downs ~~in third quarter of 2021 was to reduce hemp seed inventory to fair value and record~~during the ~~destruction of hemp crops.~~three months ended September 30, 2022.

Research and development expenses decreased by ~~$724,000,~~$783,000, or ~~41%~~75%, induring the three months ended September 30, ~~2021~~2022 compared to the same period in ~~2020. The decrease was~~2021 primarily driven by the ~~Company pivoting its~~Company's recent focus toon commercialization, which has led to lower employee-related expenses, and related activity costs as we right-sized our research teams. ~~Partially offsetting~~

During the ~~favorability for~~three months ended September 30, 2022, we recognized $24,000 of impairments of property and equipment related to Arcadia Wellness. During the ~~quarter is $333,000~~three months ended September 30, 2021, we recognized $1.1 million of ~~expense included in 2021 for the release~~impairments of ~~product from inventory that was not commercialized by Arcadia.~~Archipelago property and equipment related to CBD processing.

Selling, general, and administrative expenses ~~increased~~decreased by $2$1.5 million, or ~~47%~~23%, in the three months ended September 30, 2021, compared to the same period in 2020. The increase was driven by increased commercial and marketing personnel and consulting activities in preparation for new product launches.

We recognized an impairment of intangible assets in the amount of $120,000 for the third quarter of 2021. The impairment charge was primarily the result of a decline in the hemp seed market forecasted sales. No impairment losses were recorded in the same period of 2020.

We assessed Archipelago’s fixed assets related to cultivating hemp and processing CBD for impairment and recorded a write-down in the amount of $1.1 million for the three months ended September 30, 2021. There were no such impairments during the three months ended September 30, ~~2020. See Note 4.~~

~~Change~~2022, compared to the same period in ~~the Estimated Fair Value of Common Stock Warrant Liabilities~~2021. The decrease was primarily driven by lower salaries, lease expense and consulting fees.

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 ~~resulted in a gain of $4.8~~decreased by $2.9 million ~~for~~during the three months ended September 30, ~~2021, due~~2022 compared to the ~~fair value remeasurement~~same period in 2021. The decrease was driven by the adoption of ASU 2020-06 in January 2022, which resulted in the reclassification of common stock ~~warrant liabilities driven~~warrants from liability to equity, partially offset by the change in the ~~stock price, risk-free rates and volatility during~~estimated fair value of the ~~third quarter of 2021.~~liability classified preferred investment options issued in connection with the August 2022 Registered Direct Offering ("RDO") financing transaction.

~~During the quarter ended September 30, 2021 we were notified~~Issuance and offering costs increased by ~~the lender that the SBA had forgiven the original PPP loan amount in full, and this resulted in a $1.1 million gain for the quarter.~~

~~Income tax expense for~~$314,000 during the three months ended September 30, ~~2021 of $1,000, slightly decreased when~~2022 compared to the ~~expense of $9,000 recorded for~~same period in 2021 due to the ~~three months ended September 30, 2020.~~August 2022 RDO financing transaction.


Write-down of fixed assets		1,319			—			1,319		100	%
												Nine Months Ended September 30,						$ Change			% Change
												2022			2021
												(In thousands except percentage)
Revenues:
Product												$	7,967		$	4,506		$	3,461			77	%
Royalty													117			86			31			36	%
License													872			17			855			5029	%
Total revenues													8,956			4,609			4,347			94	%
Operating expenses (income):
Cost of revenues													8,250			4,954			3,296			67	%
Research and development													1,009			3,328			(2,319	)		(70	)%
Gain on sale of Verdeca													(1,138	)		—			(1,138	)		(100	)%
Impairment of intangible assets													72			120			(48	)		(40	)%
Change in fair value of contingent consideration													(70	)		(140	)		70			(50	)%
Impairment of property and equipment													370			1,319			(949	)		(72	)%
(Gain) loss on sale of property and equipment													(386	)		17			(403	)		(2371	)%
Selling, general and administrative		16,750			11,689			5,061		43	%		13,834			16,733			(2,899	)		(17	)%
Total operating expenses		26,331			21,151			5,180		24	%		21,941			26,331			(4,390	)		(17	)%
Loss from operations		(21,722	)		(20,247	)		(1,475	)	(7	)%		(12,985	)		(21,722	)		8,737			(40	)%
Interest expense		(23	)		(32	)		9		28	%
Other (expense) income, net		10,214			83			10,131		12206	%
Change in fair value of common stock warrant liabilities		4,601			6,212			(1,611	)	26	%
Loss on extinguishment of warrant liability		—			(635	)		635		(100	)%
Interest income (expense)													123			(23	)		146			(635	)%
Other income (expense), net													13			10,214			(10,201	)		(100	)%
Change in fair value of common stock warrant and option liabilities													1,880			4,601			(2,721	)		(59	)%
Gain on extinguishment of PPP loan		1,123			—			1,123		100	%		—			1,123			(1,123	)		(100	)%
Issuance and offering costs		(769	)		—			(769	)	(100	)%		(314	)		(769	)		455			(59	)%
Net loss before income taxes		(6,576	)		(14,619	)		8,043		(55	)%		(11,283	)		(6,576	)		(4,707	)		72	%
Income tax provision		(1	)		(15	)		14		93	%		(1	)		(1	)		—			0	%
Net loss		(6,577	)		(14,634	)		8,057		(55	)%		(11,284	)		(6,577	)		(4,707	)		72	%
Net loss attributable to non-controlling interest		(1,199	)		(1,081	)		(118	)	(11	)%		(152	)		(1,199	)		1,047			(87	)%
Net loss attributable to common stockholders	$	(5,378	)	$	(13,553	)	$	8,175		(60	)%	$	(11,132	)	$	(5,378	)	$	(5,754	)		107	%

Product revenues accounted for 89% and 98% ~~and 70%~~ of ~~our~~ total revenues induring the nine months ended September 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The ~~$3.9~~$3.5 million, or ~~615%~~77%, increase in product revenues ~~for~~during the nine months ended September 30, ~~2021~~2022 compared to the same period in ~~2020~~2021 was primarily driven by ~~$2.6~~higher sales of the Zola coconut water and body care products, the brands acquired in May 2021, along with $2.1 million ~~of sales related mainly to the newly acquired lines of products of Arcadia Wellness, plus $584,000 of additional sales~~ of GoodWheat grain and ~~$257,000 of GoodHemp seed sales.~~pasta sales this year that weren't present in 2021.

~~License~~Royalty revenues accounted for 0%1% and ~~12%~~2% of ~~our~~ total revenues induring the nine months ended September 30, ~~2021,~~2022 and ~~2020,~~2021, respectively. The ~~$110,000 in license revenues for the nine months ended September 30, 2020 was due to the achievement of certain milestones.~~

~~Royalty revenues accounted for 2% and 6% of our total revenues in the nine months ended September 30, 2021 and 2020, respectively. The $86,000~~$117,000 of royalty revenues for the nine months ended September 30, ~~2021~~2022 represents the proportionate share of contracted minimum annual royalty fees.

~~Contract research and government grant revenues~~License revenue accounted for ~~0% and 12%~~10% of ~~our~~ total revenues for the nine months ended September 30, 2021 and 2020, respectively. Our contract research and government grant revenues decreased by $106,000, or 100%, in the first nine months of 2021, compared to the same period in 2020. The decrease was driven by the completion of agreements and grants during 2020. We do not intend to continue pursuing contract research agreements and government grant projects, as we focus on selling our commercial products.

Cost of product revenues increased by $1.5 million, or 43%, in the nine months ended September 30, 2021 compared to the same period in 2020. The increase is in line with sales from the newly acquired lines of products within Arcadia Wellness, in the amount of $2.3 million of additional cost of product revenues, in addition to GoodWheat grain and GoodHemp seeds. The increase is partially offset by lower inventory write-downs, in the amount of $1.3 million,revenue during the nine months ended September 30, ~~2021, compared~~2022 and is related to ~~$3.1~~the Verdeca-Bioceres licensing agreement discussed below.

Cost of revenues increased by $3.3 million, or 67%, during the nine months ended September 30, ~~2020.~~2022 compared to the same period in 2021. The increase in cost of revenues is the result of the increase in revenues. Gross profit, calculated as total revenues less cost of revenues, was $706,000 during the nine months ended September 30, 2022 compared to gross loss of $345,000 during the nine months

ended September 30, 2021. The increase in the gross profit was primarily driven by the increase in license revenue related to the Verdeca-Bioceres licensing agreement during the nine months ended September 30, 2022.

Research and development expenses decreased by ~~$2.7~~$2.3 million, or ~~45%~~70%, during the nine months ended September 30, 2022 compared to the same period in 2021. The decrease was primarily driven by the Company's recent focus on commercialization, which has led to lower employee-related expenses, and related activity costs as we right-sized our research teams.

In February 2012, we partnered with Bioceres to form Verdeca, which we equally owned. Verdeca was formed to develop and deregulate soybean varieties using both partners’ agricultural technologies. In November 2020, Arcadia sold its membership interest in Verdeca to Bioceres in a transaction in which Arcadia received cash, shares of Bioceres stock and a royalty stream of up to $10.0 million on sales of Haab 4 ("HB4") soybean. An additional $2.0 million in cash is to be paid upon achievement by Verdeca reaching commercial plantings of at least 200,000 hectares of HB4 or China approving the HB4 soybean trait for “food and feed”. During the nine months ended September 30, 2022, we recognized a gain on sale of Verdeca of $1.1 million related to the regulatory approval of the HB4 soybeans.

During the nine months ended September 30, 2022, we recognized $72,000 of impairments of intangible assets related to the Radiance Beauty licensing agreement. During the nine months ended September 30, 2021, ~~compared to the same period in 2020. The decrease was primarily driven by the Company pivoting its focus to commercialization, which led to lower employee-related expenses as~~ we ~~right-sized our research teams. Partially offsetting this favorability was $333,000 of expense included in 2021 for the release of product from inventory that was not commercialized by Arcadia.~~

Selling, general, and administrative expenses increased by $5.1 million, or 43%, in the nine months ended September 30, 2021 compared to the same period in 2020. The increase was primarily driven by acquisitive activities, including investment banker success

fees, legal diligence and transaction fees, and additional salaries and benefits associated with the increased headcount. We have also increased commercial and marketing personnel and consulting activities in preparation for new product launches.

We recognized an impairment of intangible assets in the amount of $120,000 ~~for the nine months ended September 30, 2021. The impairment charge was~~ primarily ~~the~~as a result of a decline in the hemp seed market forecasted sales. ~~No impairment losses were recorded in the same period of 2020.~~

~~During the nine months ended September 30, 2021, the change in the fair value of~~The Industrial Seed Innovations contingent consideration ~~was due to the ISI contingent consideration~~ remeasurement ~~that~~ resulted in a decrease of the liability in the amount of ~~$140,000. There was no change in fair value of contingent consideration~~$70,000 and $140,000 during the nine months ended September 30, ~~2020.~~2022 and 2021, respectively. See Note 15 to the Condensed Consolidated Financial Statements.

~~We assessed Archipelago’s fixed assets related to cultivating hemp and processing CBD for impairment and recorded a write-down in the amount of $1.3 million for~~During the nine months ended September 30, ~~2021. There were no such~~2022, we recognized $370,000 of impairments of property and equipment, of which $320,000 is related to the Radiance Beauty licensing agreement. During the nine months ended September 30, 2021, we recognized $1.3 million of impairments of Archipelago property and equipment related to CBD processing.

During the nine months ended September 30, 2022, we sold some property and equipment related to the Davis laboratory and Archipelago for net proceeds exceeding book value by $386,000. During the nine months ended September 30, 2021, we sold equipment for book value exceeding net proceeds by $17,000.

Selling, general, and administrative expenses decreased by $2.9 million, or 17%, during the nine months ended September 30, ~~2020. See Note 4.~~

2022 compared to the same period in 2021. The decrease was primarily driven by lower salaries, lease expense and consulting fees.

Other income, net ~~increased~~decreased by ~~$10.1~~$10.2 million induring the nine months ended September 30, ~~2021 when~~2022 compared to the same period in ~~2020. This is primarily~~2021 due to the realized gain resulting from the sale of the shares of ~~BIOX.~~BIOX in 2021.

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 decreased by $2.7 million during the nine months ended September 30, 2022 compared to the same period in 2021. The decrease was driven by the adoption of ASU 2020-06 in January 2022, which resulted in the reclassification of common stock warrants from liability to equity, partially offset by the change in the

estimated fair value of the liability classified preferred investment options issued in connection with the August 2022 RDO financing transaction.

During the nine months ended September 30, 2021, we were notified by the lender that the ~~SBA~~Small Business Administration had forgiven the original PPP loan amount in full, and this resulted in a $1.1 million gain for nine months ended September 30, 2021.

~~Offering~~During the nine months ended September 30, 2022, we recognized $314,000 in issuance and offering costs ~~increased by $769,000 for~~related to the August 2022 RDO financing transaction. During the nine months ended September 30, 2021, we recognized $769,000 in issuance and ~~were comprised of the placement agent fees, placement agent warrants, and legal and accounting fees~~offering costs related to the January 2021 PIPE financing transaction. ~~There were no issuance and offering costs for the nine months ended September 30, 2020.~~

Change in the estimated fair value of common stock warrant liabilities resulted in income of $4.6 million for the nine months ended September 30, 2021, due to the fair value remeasurement of the common stock warrant liabilities driven by the change in the stock price, risk-free rates and volatility during the nine months ended September 30, 2021.

~~Income tax expense for the nine months ended September 30, 2021, of $1,000 slightly decreased when compared to the expense of $15,000 recorded for the nine months ended September 30, 2020.~~

We and our commercial partners operate in different geographies around the world and conduct field trials used for data generation, which must be conducted during the appropriate growing seasons for particular crops and markets. ~~Often, there~~Demand for our consumer body care products tends to vary with major holidays and demand for coconut water products is ~~only one crop-growing season per year for certain crops and markets. Similarly, climate conditions and other factors that may influence~~generally higher in the sales of our products may vary from season to season and year to year. In particular, weather conditions, including natural disasters such as heavy rains, hurricanes, hail, floods, tornadoes, freezing conditions, drought, or fire, may affect the timing and outcome of field trials, which may delay milestone payments and the commercialization of products incorporating our seed traits. Sales of commercial products that incorporate our seed traits will vary based on crop growing seasons and weather patterns within particular regions.summer months.

The level of seasonality in our business overall is difficult to evaluate at this time due to our relatively limited number of commercialized products, our expansion into new geographical markets and our introduction of new products and traits.

We have funded our operations primarily with the net proceeds from ~~the sale~~our private and public offerings of our equity securities and ~~incurring~~ debt, as well as proceeds from the sale of our ~~SONOVA, GoodWheat, and GoodHemp~~ products and payments under license agreements, contract research agreements and government grants. Our principal use of cash is to fund our operations, which are primarily focused on ~~completing development and~~ commercializing our ~~quality seed traits. This includes scaling harvest production of wheat and hemp, as well as coordinating with our partners on their development programs.~~products. As of September 30, ~~2021,~~2022, we had cash and cash equivalents of ~~$35.5~~$22.7 million. For the nine months ended September 30, ~~2021,~~2022, the Company had a net loss of ~~$6.6~~$11.3 million and net cash used in operations of ~~$19.2~~$11.6 million. For the twelve months ended December 31, ~~2020,~~2021, the Company had net losses of ~~$6.0~~$16.1 million and net cash used in operations of ~~$30.2~~$25.9 million.

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. See Note 1~~months from the issuance date of ~~the notes to the~~our condensed consolidated financial statements, ~~for more information.~~

~~As is disclosed in Notes 12~~ and ~~13, on January 25, 2021,~~thus raises substantial doubt about the ~~Company entered into~~Company’s ability to continue as a ~~securities purchase agreement with certain institutional and accredited investors relating to~~going concern. The condensed consolidated financial statements do not include any adjustments that might result from the ~~issuance and sale in a private placement~~outcome of ~~shares of Company common stock and warrants for an aggregate of $25.1 million, exclusive of any related transaction fees.~~

We sold all of the 1,875,000 shares of Bioceres stock we acquired in the November 2020 Bioceres transaction. The sale generated gross and net proceeds of $22.2 million, and $21.8 million, respectively.this uncertainty.

We may seek to raise additional funds through debt or equity ~~financings.~~financings, if necessary. We may also consider entering into additional partner arrangements. ~~The~~Any sale of additional equity would result in dilution to ~~the Company’s~~our stockholders. ~~The~~Our incurrence of debt would result in debt service obligations, and the instruments governing ~~such~~our debt could provide for additional operating and financing covenants that would restrict our operations. If ~~the Company does~~we do require additional funds and ~~is unable~~are not able to secure adequate additional funding, ~~at terms agreeable to the Company,~~ we may be forced to reduce our spending, extend payment terms with our suppliers, liquidate assets, or suspend or curtail planned development programs. Any of these actions could materially harm ~~the~~our business, results of operations and financial condition.

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

Cash used in operating activities for the nine months ended September 30, 2022, was $11.6 million. With respect to our net loss of $11.3 million, non-cash charges including $897,000 of stock-based compensation, $686,000 of lease amortization, $1.5 million of

write-downs of inventories, $370,000 of write-downs of property and equipment, $72,000 of write-downs of intangible assets, $314,000 of issuance and offering costs, and $354,000 of depreciation, were offset by adjustments in our working capital accounts of $439,000, the change in fair value of common stock warrant and option liabilities of $1.9 million, gain on sale of Verdeca of $1.1 million, $386,000 of gain on disposal of property and equipment, other non-cash income from the change in fair value of contingent consideration of $70,000, and operating lease payments of $718,000.

Cash used in operating activities for the nine months ended September 30, 2021, was $19.2 million. With respect to our net loss of $6.6 million, non-cash charges including $1.0 million of stock-based compensation, $914,000 of lease amortization, $1.8 million of write-downs of inventory, $1.3 million of write-down of fixed assets, $769,000 of issuance and offering costs, and $737,000 of depreciation were offset by adjustments in our working capital accounts of $2.4 million, $10.2 million of realized gain on corporate securities, the change in fair value of common stock warrant and option liabilities of $4.6 million, other non-cash income from the change in fair value of contingent consideration of $140,000, and operating lease payments of $984,000.

Cash provided by investing activities for the nine months ended September 30, ~~2020 was $23.5 million. Our net loss~~2022 consisted of ~~$14.6 million, adjustments in our working capital accounts~~$897,000 of ~~$8.6 million, non-cash income~~proceeds from ~~the change in fair value~~sales of ~~common stock warrant liabilities~~property and equipment, $285,000 proceeds from sale of ~~$6.2 million, operating lease payments of $629,000, amortization of investment premium of $44,000 and gain on disposal of equipment of $8,000, were~~Verdeca, partially offset by ~~noncash charges including $3.1 million~~$46,000 of ~~write-downs~~purchases of ~~inventory~~property and ~~prepaid production costs, $1.8 million of stock-based compensation, $745,000 of lease amortization, $635,000 of loss on extinguishment of warrant liability and $395,000 of depreciation.~~

Cash provided by investing activities for the nine months ended September 30, 2021 consisted of $21.8 million of proceeds from sales of investments, partially offset by $4.3 million of acquisitions, and $919,000 in purchases of property and equipment.

Cash provided by ~~investing~~financing activities for the nine months ended September 30, ~~2020~~2022 consisted of ~~$18.3 million in~~ proceeds from ~~sales~~the issuance of common stock relating to the August 2022 RDO financing transaction of $5.0 million gross proceeds and ~~maturities of investments and $8,000 in~~ proceeds from ~~sales~~the purchase of ~~equipment,~~ESPP shares of $7,000, which were ~~partially~~ offset by ~~$2.0 million in purchases~~payments of ~~property and equipment, $1.3 million in purchases~~transaction costs related to the August 2022 RDO financing transaction of ~~short-term investments and $500,000 in acquisitions (for ISI acquisition).~~

Cash provided by financing activities for the nine months ended September 30, 2021 consisted of proceeds from the issuance of common stock relating to the January 2021 PIPE financing transaction of $25.1 million gross proceeds, capital contributions from the non-controlling interest in our joint venture of $750,000, and proceeds from the purchase of ESPP shares of $39,000, which were offset by payments of transaction costs related to the January 2021 PIPE of $1.9 million and principal payments on debt of $2.0 million.

Cash provided by financing activities for the nine months ended September 30, 2020 consisted of proceeds from the issuance of common stock relating to the exercise of the June 2018 Warrants of $6.8 million and the exercise of half of the March 2018 PIPE Warrants of $2.6 million, proceeds from borrowings of $3.1 million, capital contributions from the non-controlling interest in our joint venture of $1.2 million, and proceeds from the purchase of ESPP shares of $51,000, which were offset by payments of transactions costs related to the extinguishment of warrant liability of $863,000 and principal payments on notes payable of $26,000.

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, which ~~has been~~was disposed of in November 2020.

Our management’s discussion and analysis of our financial condition and results of operations is based on our ~~condensed consolidated~~ financial statements, which have been prepared in accordance with GAAP. The preparation of these ~~condensed consolidated~~ 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 ~~condensed consolidated~~ 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 policies and estimates to be revenue recognition, determination of the provision for income taxes, ~~stock-based compensation, fair value of certain equity instruments,~~ and net realizable value of inventory. ~~See Notes 5, 12 and 13 for the estimates made in connection with the securities purchase agreements executed during 2018, 2019, 2020 and 2021.~~

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, or Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our President and Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Our disclosure controls and procedures have been designed to meet reasonable assurance standards. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our President and Chief Executive Officer and our Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

There were no changes in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) identified in connection with the evaluation identified above that occurred during the quarter ended September 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We currently are not a party to any material litigation or other material legal proceedings. From time to time, we may be subject to legal proceedings and claims in the ordinary course of business.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, which could materially affect our business, financial condition, liquidity or future results. The risks described ~~below and~~ in our Annual Report on Form 10-K are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, liquidity or future results.

Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock, which could negatively impact the market price and liquidity of our common shares and our ability to access the capital markets.

Our common stock is listed on The ~~manufacture, labeling and distribution by us~~Nasdaq Capital Market. If we fail to satisfy the continued listing requirements of the ~~CBD products in~~Nasdaq Stock Market ("Nasdaq"), such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our ~~portfolio is regulated by various federal, state and local agencies. These governmental authorities may commence regulatory or legal proceedings, which could restrict~~common stock. Such a delisting would have a negative effect on the ~~allowable scope~~price of our ~~product claims or~~common stock, impair the ability to sell or purchase our ~~products in~~common stock when persons wish to do so, and any delisting materially adversely affect our ability to raise capital or pursue strategic restructuring, refinancing or other transactions on acceptable terms, or at all. Delisting from The Nasdaq Capital Market could also have other negative results, including the ~~future. The FDA may regulate these products to ensure~~potential loss of institutional investor interest and fewer business development opportunities.

On September 27, 3022, we received a notice from the Nasdaq Listing Qualifications Department of Nasdaq informing us that because the ~~products are not misrepresented. We are subject to regulation by the federal government and other state and local agencies as a result~~closing bid price of our ~~CBD products.~~common stock had been below $1.00 per share for 30 consecutive business days, we no longer complied with the minimum bid price requirement for continued listing on The ~~changing compliance environment increases~~Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the ~~possibility~~minimum bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The notice had no immediate effect on the listing or the trading of our common stock on The Nasdaq Capital Market. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the notice letter stated that we ~~may violate one~~had an initial compliance period of 180 calendar days, or ~~more~~until March 27, 2023, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of our common stock must meet or exceed $1.00 per share for a minimum of 10 consecutive business days during the ~~requirements.~~180 calendar day grace period. If at any time before March 27, 2023, the bid price of our ~~operations are found to~~common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, Nasdaq will provide written notification that we have achieved compliance with the minimum bid price requirement, and the matter would be ~~in violation of any of such laws or any other governmental regulations~~resolved. The notice letter also disclosed that ~~apply to us,~~if we do not regain compliance within the initial compliance period, we may be eligible for an additional 180-day compliance period. To qualify for additional time, we would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and would need to provide written notice of a plan to cure the deficiency during the second compliance period, including by effecting a reverse stock split if necessary. If the company meets these requirements, Nasdaq would inform us that we have been granted an additional 180 calendar days to regain compliance. However, if it appears to the staff of Nasdaq that we will not be able to cure the deficiency, or if we are otherwise not eligible, the staff would notify us that we will not be granted additional 180 days for compliance and will be subject to ~~penalties, including, without limitation, civil~~delisting at that time In the event of such notification, we may appeal the staff’s determination to delist its securities, but there can be no assurance that any such appeal would be successful. We intend to monitor the closing bid price for our common stock and ~~criminal penalties, damages, fines,~~will consider available strategies in an effort to satisfy the curtailment or restructuring of our operations, any of which could adversely affect the ability to operate our business and our financial results. Failure to comply with FDA requirements may result in, among other things, injunctions, product withdrawals, recalls, product seizures, fines and criminal prosecutions. Our advertising is subject to the U.S. Federal Trade Commission, or FTC, under the Federal Trade Commission Act regulation. Additionally, some states also permit advertising and labeling laws to be enforced by attorneys general who may seek relief for consumers, seek class-action certifications, seek class-wide damages and product recalls of products sold by us.minimum bid price requirement.

~~During~~Information concerning our sales of unregistered securities during the ~~three months~~quarter ended September 30, ~~2021,~~2022, has previously been reported in Current Reports on Form 8-K that we issued the securities described below without registration under the Securities Act. Unless otherwise indicated below, the securities were issued pursuant to the private placement exemption provided by Section 4(a)(2) of the Securities Act.

~~On July 29, 2021, we issued 10,000 shares of our common stock to a warrant holder upon the cash exercise of a warrant with an exercise price per share of $2.19.~~

On August 4, 2021, we issued 4,000 shares of common stock to two warrant holders. The warrant holders utilized a cashless net exercise (based on a common stock price of $2.37 per share on the date of exercise) of a total of 20,000 warrants, each with an exercise price per share of $1.92.filed during that quarter.

The following exhibits are attached hereto or are incorporated herein by reference.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Delaware	81-0571538
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
202 Cousteau Place, Suite 105 Davis, CA	95618
(Address of Principal Executive Offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common	RKDA	NASDAQ CAPITAL MARKET


			Page
Part I —	Financial Information (Unaudited)

	Item 1.	Condensed Consolidated Financial Statements:	1


		Condensed Consolidated Balance Sheets	1


		Condensed Consolidated Statements of Operations and Comprehensive Loss	2

		Condensed Consolidated Statements of Stockholders’ Equity	3


		Condensed Consolidated Statements of Cash Flows	4


		Notes to Condensed Consolidated Financial Statements	5

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2322

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3432

	Item 4.	Controls and Procedures	3432

Part II —	Other Information		3533

	Item 1.	Legal Proceedings	3533

	Item 1A.	Risk Factors	3533

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3534

	Item 3.	Defaults Upon Senior Securities	3534

	Item 4.	Mine Safety Disclosures	3534

	Item 5.	Other Information	3534

	Item 6.	Exhibits	3635

SIGNATURES			3736


	September 30, 2021			December 31, 2020			September 30, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	35,526		$	14,042		$	22,719		$	28,685
Short-term investments		—			11,625
Accounts receivable		1,453			1,406
Accounts receivable and other receivables, net of allowance for doubtful accounts of $13 and $76 as of September 30, 2022 and December 31, 2021, respectively								2,726			1,370
Inventories, net — current		5,447			3,812			3,342			4,433
Assets held for sale								254			—
Prepaid expenses and other current assets		1,408			811			990			900
Total current assets		43,834			31,696			30,031			35,388
Restricted cash		—			2,001
Property and equipment, net		2,634			3,539			848			2,291
Right of use asset		3,486			5,826			2,073			3,081
Inventories, net — noncurrent		3,539			3,485			984			2,494
Goodwill		1,648			408
Intangible assets, net		3,905			370			373			484
Other noncurrent assets		182			23			165			180
Total assets	$	59,228		$	47,348		$	34,474		$	43,918
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	5,004		$	4,105		$	2,748		$	3,638
Amounts due to related parties		51			80			47			64
Debt — current		36			1,141
Unearned revenue — current		—			8
Operating lease liability — current		1,134			717			986			1,074
Other current liabilities		264			263			270			264
Total current liabilities		6,489			6,314			4,051			5,040
Debt — noncurrent		78			2,105
Operating lease liability — noncurrent		2,562			5,389			1,269			2,220
Common stock warrant liabilities		7,736			2,708
Common stock warrant and option liabilities								2,135			3,392
Other noncurrent liabilities		2,140			2,280			2,000			2,070
Total liabilities		19,005			18,796			9,455			12,722
Commitments and contingencies (Note 17)
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, $0.001 par value—150,000,000 shares authorized as of September 30, 2021 and December 31, 2020; 22,184,235 and 13,450,861 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively		63			54
Common stock, $0.001 par value—150,000,000 shares authorized as of September 30, 2022 and December 31, 2021; 24,642,960 and 22,184,235 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively								65			63
Additional paid-in capital		257,009			239,496			278,618			257,515
Accumulated other comprehensive income		(24	)		—
Accumulated deficit		(217,203	)		(211,825	)		(253,615	)		(226,485	)
Total Arcadia Biosciences stockholders’ equity		39,845			27,725
Total stockholders’ equity								25,068			31,093
Non-controlling interest		378			827			(49	)		103
Total stockholders' equity		40,223			28,552			25,019			31,196
Total liabilities and stockholders’ equity	$	59,228		$	47,348		$	34,474		$	43,918


	September 30, 2021		December 31, 2020		September 30, 2022		December 31, 2021
Raw materials	$	2,465	$	966	$	1,119	$	1,851
Goods in process		982		1,921		92		842
Finished goods		5,539		4,410		3,115		4,234
Inventories	$	8,986	$	7,297	$	4,326	$	6,927


	Common Stock				Additional Paid-In			Accumulated			Accumulated Other Comprehensive			Non- Controlling			Total Stockholders’
	Shares		Amount		Capital			Deficit			Loss			Interest			Equity
Balance at December 31, 2020		13,450,861	$	54	$	239,496		$	(211,825	)	$	—		$	827		$	28,552
Issuance of shares related to the January 2021 PIPE		7,876,784		8		15,508			—			—			—			15,516
Offering costs related to the January 2021 PIPE		—		—		(2,084	)		—			—			—			(2,084	)
Issuance of placement agent warrants related to issuance of January 2021 PIPE		—		—		942			—			—			—			942
Issuance of shares related to employee stock purchase plan		8,604		—		21			—			—			—			21
Non-controlling interest capital contribution		—		—		—			—			—			750			750
Stock-based compensation		—		—		325			—			—			—			325
Net income		—		—		—			2,058			—			(377	)		1,681
Balance at March 31, 2021		21,336,249	$	62	$	254,208		$	(209,767	)	$	—		$	1,200		$	45,704
Issuance of shares at closing of Arcadia Wellness acquisition		827,401		1		2,052			—			—			—			2,053
Foreign currency translation adjustment		—		—		—			—			(12	)		—			(12	)
Stock-based compensation		—		—		356			—			—			—			356
Net loss		—		—		—			(5,261	)		—			(161	)		(5,422	)
Balance at June 30, 2021		22,163,650	$	63	$	256,616		$	(215,028	)	$	(12	)	$	1,039		$	42,678
Issuance of shares related to employee stock purchase plan		6,585		—		17			—			—			—			17
Foreign currency translation adjustment		—		—		—			—			(12	)		—			(12	)
Stock-based compensation		—		—		354			—			—			—			354
Issuance of shares related to exercise of Service and Performance Warrants		14,000		—		22			—			—			—			22
Net loss		—		—		—			(2,175	)		—			(661	)		(2,836	)
Balance at September 30, 2021		22,184,235	$	63	$	257,009		$	(217,203	)	$	(24	)	$	378		$	40,223



(Dollars in thousands)	Common Stock Warrant Liability - March 2018 Purchase Agreement			Common Stock Warrant Liability - June 2019 Offering			Common Stock Warrant Liability - September 2019 Offering			Common Stock Warrant Liability - January 2021 Offering			Contingent Liabilities			Total
Balance as of December 31, 2020	$	662		$	832		$	1,214		$	-		$	2,280		$	4,987
Initial recognition		—			—			—			9,631			—		$	9,631
Change in fair value and other adjustments		(611	)		(368	)		(570	)		(3,054	)		(140	)	$	(4,742	)
Balance as of September 30, 2021	$	51		$	464		$	644		$	6,577		$	2,140		$	9,876


	Shares Subject to Outstanding Options			Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value		Shares Subject to Outstanding Options			Weighted- Average Exercise Price Per Share		Aggregate Intrinsic Value
Outstanding — Balance at December 31, 2020		889,759		$	14.46	$	240
Outstanding — Balance at December 31, 2021									1,422,195		$	5.28	$	—
Options granted		1,111,042			2.85				1,320,322			1.11		297.00
Options exercised		—			—				—			—
Options forfeited		(233,558	)		3.51				(266,347	)		2.29
Options expired		(212,334	)		33.38				(74,436	)		6.04
Outstanding — Balance at September 30, 2021		1,554,909		$	5.22	$	240
Vested and expected to vest — September 30, 2021		1,535,209		$	5.23	$	240
Exercisable — September 30, 2021		501,417		$	9.82	$	—
Outstanding — Balance at September 30, 2022									2,401,734		$	3.29
Vested and expected to vest — September 30, 2022									2,115,782		$	3.55
Exercisable — September 30, 2022									873,633		$	6.59	$	—


Years ending December 31,	Amounts
Remainder of 2021	$	9
2022		36
2023		39
2024		30
Thereafter		—
Total	$	114


	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2021		2020		2021		2020
Options to purchase common stock		1,554,909		980,883		1,554,909		980,883
Warrants to purchase common stock		11,510,011		4,450,689		11,510,011		4,450,689
Total		13,064,920		5,431,572		13,064,920		5,431,572


November ~~15, 2021~~10, 2022	By:	/s/ PAMELA HALEY
		Pamela Haley
		Chief Financial Officer


	September 30, 2021			December 31, 2020			September 30, 2022			December 31, 2021
Laboratory equipment	$	2,771		$	2,951		$	1,688		$	2,659
Software and computer equipment		605			591			559			548
Machinery and equipment		1,805			2,046			653			1,809
Furniture and fixtures		213			181			108			211
Vehicles		478			428			333			417
Leasehold improvements		2,263			2,229			2,203			2,306
Property and equipment, gross		8,135			8,426			5,544			7,950
Less accumulated depreciation and amortization		(5,501	)		(4,887	)
Less: accumulated depreciation and amortization								(4,696	)		(5,659	)
Property and equipment, net	$	2,634		$	3,539		$	848		$	2,291

Large accelerated filer

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Non-accelerated filer

Smaller reporting company

Emerging growth company