Arcadia Biosciences, Inc. Q1 FY2025 earnings call

• Zola's revenue grew 90% year-over-year in Q1 2025, driven by a 70% increase in new distribution. Sell-through or scan data sales increased 76% during the 13 weeks ended March 29, 2025. Launched new flavors like lime and pineapple, with pineapple sales in the first four months of 2025 exceeding the entire previous year's sales. • Entered into an agreement with BioSeries, receiving $750,000 in cash, regaining a legacy soy patent, eliminating future royalties, and removing a $1,000,000 contingent liability related to a soy patent. • The pending business combination with Roosevelt Resources continues to move forward, with an amendment to the exchange agreement modifying a closing condition, and expected to close towards the end of summer.

In Q1 2025, total revenues were approximately $1,200,000, representing a 22% increase compared to the same period last year. Zola's revenue grew 90% year-over-year. Cost of revenues was approximately $680,000, a 45% increase compared to Q1 2024. The gross margin rate was 43% in Q1 2025, down from 52% in Q1 2024. There were no research and development costs in Q1 2025, whereas there were $6,000 in R&D costs in Q1 2024. Selling, general, and administrative costs were $1,700,000 in Q1 2025, a reduction from $2,100,000 in Q1 2024.

• Gross margin rates are expected to trend toward the low 30% range as the company transitions to a single product line. • Losses from discontinued operations are expected to remain low for the remainder of 2025. • Scheduled to receive approximately $2.5 million in cash as the first repayment of principal and interest from the note receivable in Q2.

• Uncertainty regarding the completion timeline of the pending business combination with Roosevelt Resources. • Potential impact of tariffs on financial results, though mitigation plans are in place. • Uncertainty regarding the commercialization of the remaining tomato patent licensed to a third party, which currently represents a $1,000,000 contingent liability.

Q: Ben Klieve asked about Zola's distribution pipeline, including the size of the pipeline and when momentum would reflect in financials.

A: T.J. Schaefer stated the pipeline is about half of current distribution (~3,500 stores), with new accounts added in Q2 and most awards having an impact on 2025.

Q: Ben Klieve inquired about the remaining tomato patent's commercial value.

A: T.J. Schaefer said there's potential commercial value but not for Arcadia, licensed to a third party with commercialization expected in two years.

Q: Ben Klieve asked about the note receivable payment.

A: Mark Kawakami replied it's scheduled for receipt in Q2.