Arcadia Biosciences (17D) Risk Analysis

Our common stock is listed on the Nasdaq Capital Market. If we fail to satisfy the continued listing requirements of The Nasdaq Stock Market LLC ("Nasdaq"), such as the corporate governance, minimum stockholders equity or minimum closing bid price requirements, Nasdaq may take steps to delist our common stock. If we receive a deficiency letter regarding such listing requirements, we would attempt to take actions to regain compliance with applicable listing requirements within any cure periods applicable to such requirements; however, we can provide no assurance that any such action taken by us would allow our common stock to continue to be listed. On July 22, 2026, the staff of the Securities and Exchange Commission (the "SEC" or the "Commission"), acting pursuant to delegated authority, approved a new listing rule change originally proposed by Nasdaq earlier in 2026 and subsequently amended, requiring listed companies to maintain a minimum Market Value of Listed Securities ("MVLS"), as defined under the Nasdaq listing rules, of at least $5 million. The rule provides, among other things, that a company that fails to have a minimum MVLS of at least $5 million (the "Minimum MVLS") for a period of 30 consecutive business days will be immediately subject to suspension and delisting, without any cure or compliance period as is typically granted for certain other kinds of compliance deficiencies such as the minimum bid price requirement or minimum stockholders equity requirement. The final rule provides only very limited appeal rights to a Nasdaq Hearings Panel. The Hearings Panel may reverse a delisting decision where it determines that the delisting determination was made in error, and may grant an exception for a period of up to 180 days for the company to demonstrate that it meets all requirements for initial listing; however, the delisting is not stayed or suspended during any appeal process. Following approval, the rule originally became effective commencing July 23, 2026. However, because the approval was issued by the staff of the SEC under delegated authority rather than by the Commission itself, on July 29, 2026, the SEC notified Nasdaq that the Commission had received notices of intention to petition for review of the delegated action and that, in accordance with the Commission's rules of practice, the July 22, 2026 approval order was stayed until the Commission orders otherwise. As a result, the new Minimum MVLS rule is not currently in effect as of August 13, 2026, and will remain stayed unless and until the Commission orders otherwise following its review. However, the Commission's stay is not a determination by the Commission concerning the merits of the rule, and there are no assurances regarding the timing or outcome of the Commission's review or whether, or when, the new rule will take effect and the first 30 business day measurement period will commence. Our MVLS as of August 13, 2026, was less than the Minimum MVLS. Accordingly, if the new rules were to become effective in the form proposed by Nasdaq and the MVLS of our common stock does not increase sufficiently (as a result of increases in the trading prices of our common stock and/or an increase in the number of outstanding shares of our common stock that are taken into account in determining MVLS), so that we satisfy the Minimum MVLS listing rule, our common stock would be subject to delisting from the Nasdaq Capital Market. We are carefully monitoring our MVLS and are actively considering alternatives, actions and transactions to address our MVLS, including without limitation the possibility of a merger, acquisition or other strategic transaction or a financing transaction. However, there are no assurances that we will be able to take actions so as to satisfy the Minimum MVLS requirement of the new rule, if it becomes effective, either at all or on a sustained basis. If our common stock were to be delisted from the Nasdaq Capital Market, such a delisting would have a negative effect on the liquidity of our common stock, would likely decrease the price of our common stock, could result in a loss of confidence by institutional or other investors, employees, business partners or other third parties, result in fewer business development opportunities or opportunities for entering into strategic transactions, impair investors' ability to sell or purchase our Common Stock when they wish to do so, and materially adversely affect our ability to raise capital or pursue financing, strategic or other transactions on acceptable terms, or at all. If our common stock were to be delisted from the Nasdaq Capital Market, the common stock may be eligible for trading on an over-the-counter market such as the OTCQX Best Market, OTCQB Venture Market or OTCID Basic Market, operated by the OTC Markets Group. The quotation of the common stock on an OTC marketplace, compared to being listed on a national securities exchange such as the Nasdaq Capital Market, may present significant risks to the holders of common stock, including lower availability and efficiency of market price quotations, significantly less liquidity, increased price volatility, increased transaction costs, and the application of state securities laws that could result in restrictions on the sale of our common stock. Stockholders may not be able to sell their shares of common stock on any such substitute marketplace in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market. If we are not able to obtain a listing on another stock exchange or quotation service for our common stock, it may be extremely difficult or impossible for stockholders to sell their shares of common stock. In addition, on August 4, 2026, we received a notice from the Nasdaq Listing Qualifications Department of Nasdaq informing us that because the closing bid price of our 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 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 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 had an initial compliance period of 180 calendar days, or until February 1, 2027, 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 180 calendar day grace period. If at any time before February 1, 2027, the bid price of our 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 resolved. The notice letter also disclosed that 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 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 will consider available strategies in an effort to satisfy the minimum bid price requirement, which may include without limiting seeking stockholder approval to give the board of directors of the Company the authority to effect a reverse stock split in the future. Also, following the filing of this Quarterly Report on Form 10-Q, we expect to receive a notification letter from Nasdaq indicating that the Company has failed to comply with the minimum stockholders' equity requirement of Nasdaq Listing Rule 5550(b)(1). Nasdaq Listing Rule 5550(b)(1) requires that companies listed on the Nasdaq Capital Market maintain a minimum of $2,500,000 in stockholders' equity for continued listing. If we receive such a notification letter, the letter will not have any immediate effect on the Company's listing on the Nasdaq Capital Market. We expect that Nasdaq will provide the Company with 45 calendar days to submit a plan to regain compliance with the minimum stockholders' equity standard. If the Company's plan to regain compliance is accepted, Nasdaq may grant an extension of up to 180 calendar days from the date of the notification letter to regain compliance. If its plan to regain compliance is not accepted, the Company will have the opportunity to appeal that decision to a Hearings Panel. If the Company receives such a letter, the Company intends to promptly evaluate options available to regain compliance and to timely submit a plan to regain compliance with Nasdaq's minimum stockholders' equity standard, although there are no assurances that such a plan, if submitted, would be accepted or that, if it is, the Company will be able to regain compliance with the applicable Nasdaq listing requirements.