Company launches new business unit, Arcadia
Specialty Genomics™, to apply its advanced plant breeding and gene
editing expertise to cannabis
Arcadia Biosciences, Inc. (Nasdaq: RKDA), a food ingredient
company and proven leader in agricultural innovation to improve the
quality and nutritional content of crops, today released its
financial and business results for the first quarter of 2019.
“With the launch of Arcadia Specialty Genomics™ in the first
quarter of 2019 and research trials already underway, we are now
leveraging our years of expertise in plant science, advanced
breeding and regulatory affairs to offer value-added innovations in
cannabis,” said Raj Ketkar, president and CEO of Arcadia.
“We also advanced both our GoodWheat™ specialty ingredients and
HB4 drought tolerant soybeans this quarter, scaling production and
building seed supply to support commercialization later in 2019,”
he said.
Q1 2019 Operating and Business Highlights
- New Business Unit
Dedicated to Cannabis. In February 2019, Arcadia launched
Arcadia Specialty Genomics, to leverage the company’s years of
plant science, industry and regulatory expertise, offering
value-added capabilities for rapid growth in cannabis-based
functional ingredients. This dedicated business unit will develop a
proprietary germplasm estate and traits for license to cultivators
in federal and state legal markets, for products serving the
nutraceutical and food industries. These innovations are
made possible through a proprietary approach combining
conventional breeding, TILLING and gene editing. Matt Plavan,
Arcadia’s CFO, will lead the business unit as president of Arcadia
Specialty Genomics.
- Hemp Research
Underway in Hawaii. Hawaii’s Department of Agriculture
granted Arcadia Biosciences a license for its Industrial Hemp Pilot
Program in March. With this license, Arcadia Specialty Genomics
began its research and cultivation immediately, planting in
April.
- GoodWheat
Production Scales in Preparation for Commercial Launch.
Arcadia completed its counter-season GoodWheat production trials in
the first quarter, with harvest early in the second quarter. The
company’s agricultural operations team is building supply in
preparation for commercialization, with the first sales of
GoodWheat expected by the end of 2019.
- Verdeca
Introduces Pre-Commercial HB4 Drought Tolerant and Herbicide
Tolerant Soybeans to Growers in Argentina. Verdeca, a joint
venture between Arcadia and Bioceres Crop Solutions Corp.,
introduced HB4 soybeans at Expoagro, the largest farm show in
Argentina. More than 1200 growers visited the Verdeca pavilion, and
many signed on to the company’s Bio-Innovator program, which grants
priority access to test the HB4 soybean varieties in their
fields.
Q2 Highlights
- Experienced
Science Leader Hired as Head of R&D. On April 8, Randy
Shultz, Ph.D. joined Arcadia’s leadership team as head of research
and development. Shultz is the former global crop lead at Inari
Agriculture, where he also served as director of R&D and senior
director of R&D strategy. He has deep expertise in gene editing
and new plant breeding technologies, as well as an established
reputation as a keen R&D strategist. Shultz will be exploring
new partnerships and licensing opportunities to build Arcadia’s
capabilities in cannabis and advance future innovations in the
GoodWheat portfolio of novel wheat attributes.
Arcadia Biosciences, Inc.
Financial Snapshot
(Unaudited)
($ in thousands)
Three Months Ended March 31, 2019 2018
Favorable / (Unfavorable) $ %
Total Revenues
158 214 (56 ) (26 )%
Total Operating Expenses
4,376 4,053 (323 ) (8 )%
Loss From Operations (4,218 )
(3,839 ) (379 ) (10 )%
Net Loss (12,612 ) (10,615 ) (1,997 )
(19 )%
Revenues
In the first quarter of 2019, revenues were $158,000, compared
to revenues of $214,000 in the first quarter of 2018. The
quarter-over-quarter decrease was primarily impacted by the
decrease in government grant revenue, partially offset by the
increase in product sales. Over the next six to 15 months, as the
company transitions to its new focus on health and nutrition
quality products, Arcadia expects revenue from government grants
and research contracts revenues to be replaced by product and trait
revenues.
Operating Expenses
In the first quarter of 2019, operating expenses were $4.4
million, compared to $4.1 million in the first quarter of 2018.
Research and development (R&D) spending increased by $109,000
in the first quarter of 2019, primarily the result of the timing of
expenses relating to Verdeca. General and administrative (SG&A)
costs for the first quarter of 2019 were $191,000 higher than the
first quarter in 2018, driven primarily by higher employee expenses
due to the growth of the commercial development team. Cost of
product revenues was $23,000 higher in the first quarter of 2019
compared to 2018 due to additional product sales in 2019.
Net Loss
Net loss for the first quarter of 2019 was $12.6 million, or a
loss of $2.64 per share, a 19 percent increase from the $10.6
million loss in the first quarter of 2018. The quarter-over-quarter
increase was largely due to the $6.6 million greater increase in
the change in the fair value of common stock warrant and common
stock adjustment feature liabilities this quarter versus the same
quarter last year, partially offset by the $4.0 million initial
loss on common stock warrant and common stock adjustment feature
liabilities that were recorded in the first quarter of 2018.
Conference Call and Webcast
The company has scheduled a conference call for 4:30 p.m.
Eastern (1:30 p.m. Pacific) today, May 8, to discuss first-quarter
financial results and key strategic achievements.
Interested participants can join the conference call using the
following numbers:
U.S. Toll-Free Dial-In: +1-844-243-4690 International
Dial-In: +1-225-283-0138 Passcode: 2468839
A live webcast of the conference call will be available on the
“Investors” section of the Arcadia’s website at www.arcadiabio.com.
Following completion of the call, a recorded replay will be
available on the company’s investor website.
About Arcadia Biosciences, Inc.
Arcadia Biosciences (Nasdaq: RKDA) develops and markets
high-value food ingredients and nutritional oils that help meet
consumer demand for a healthier diet. Arcadia’s GoodWheat™ branded
ingredients deliver health benefits to consumers and enable
consumer packaged goods companies to differentiate their brands in
the marketplace. The company’s agricultural traits are being
developed to enable farmers around the world to be more productive
and minimize the impact of agriculture on the environment. For
more information, visit www.arcadiabio.com.
About Arcadia Specialty Genomics
Arcadia Specialty Genomics is a strategic business
unit of Arcadia Biosciences, Inc. leveraging the
market-leading capabilities of its parent company to
deliver crop innovation into developing proprietary,
industry-leading cannabis germplasm. Focused on productivity, pest resistance
and favored quality traits, Arcadia Specialty Genomics’
innovations serve the state-
and federally-legal nutraceutical, food and
industrial markets. For more information, visit
www.arcadiaspecialtygenomics.com.
Safe Harbor Statement
“Safe Harbor” statement under the Private Securities Litigation
Reform Act of 1995: This press release and the accompanying
conference call contain forward-looking statements about the
company and its products, including statements relating to
components of the company’s long-term financial success and ongoing
plans; the company’s traits, commercial products, and
collaborations; and the company’s ability to manage the regulatory
processes for its traits and commercial products. Forward-looking
statements are subject to risks and uncertainties that could cause
actual results to differ materially, and reported results should
not be considered as an indication of future performance. These
risks and uncertainties include, but are not limited to: the
company’s and its partners’ ability to develop commercial products
incorporating its traits and to complete the regulatory review
process for such products; the company’s compliance with laws and
regulations that impact the company’s business, and changes to such
laws and regulations; and the company’s future capital requirements
and ability to satisfy its capital needs. Further information
regarding these and other factors that could affect the company’s
financial results is included in filings the company makes with the
Securities and Exchange Commission from time to time, including the
section entitled “Risk Factors” and additional information set
forth in its Form 10-K for the year ended December 31, 2018. These
documents are available on the SEC Filings section of the Investor
Relations pages of the company’s website at www.arcadiabio.com. All
information provided in this release and in the attachments is as
of the date hereof, and Arcadia Biosciences, Inc. undertakes no
duty to update this information.
Arcadia Biosciences, Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(In thousands, except share data)
March 31, 2019 December 31, 2018
Assets Current assets: Cash and cash equivalents $ 10,438 $
11,998 Short-term investments 7,355 9,825 Accounts receivable 79
165 Unbilled revenue — 3 Inventories — current 187 181 Prepaid
expenses and other current assets 506 704 Total
current assets 18,565 22,876 Property and equipment, net 460 395
Right of use asset 2,193 — Inventories — noncurrent 701 746 Other
noncurrent assets 31 7 Total assets $ 21,950 $ 24,024
Liabilities and stockholders’ equity Current liabilities:
Accounts payable and accrued expenses $ 2,062 $ 2,645 Amounts due
to related parties 12 29 Unearned revenue — current 56 96 Operating
lease liability — current 574 — Other current liabilities
264 284 Total current liabilities 2,968 3,054 Operating
lease liability — noncurrent 1,771 — Common stock warrant
liabilities 13,578 5,083 Other noncurrent liabilities 3,000
3,072 Total liabilities 21,317 11,209
Stockholders’ equity: Common stock, $0.001 par value—150,000,000
shares authorized as of March 31, 2019 and December 31, 2018;
4,777,419 and 4,774,919 shares issued and outstanding as of March
31, 2019 and December 31, 2018, respectively 45 45 Additional
paid-in capital 191,566 191,136 Accumulated deficit (190,978
) (178,366 ) Total stockholders’ equity 633
12,815 Total liabilities and stockholders’ equity $ 21,950 $ 24,024
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of
Operations and Comprehensive Loss
(Unaudited)
(In thousands, except share and per share
data)
Three Months Ended March 31, 2019
2018 Revenues: Product $ 107 $ 61 Contract
research and government grants 51 153 Total revenues
158 214 Operating expenses: Cost of product revenues 59 36 Research
and development 1,505 1,396 Selling, general and administrative
2,812 2,621 Total operating expenses 4,376
4,053 Loss from operations (4,218 ) (3,839 ) Other income,
net 120 38
Initial loss on common stock warrant and
common stock adjustment feature liabilities
— (4,000 ) Change in fair value of common stock warrant and
common stock adjustment feature
liabilities
(8,495 ) (1,900 ) Offering costs — (904 ) Net loss
before income taxes (12,593 ) (10,605 ) Income tax provision
(19 ) (10 ) Net loss $ (12,612 ) $ (10,615 ) Net loss per
share: Basic and diluted $ (2.64 ) $ (4.86 ) Weighted-average
number of shares used in per share calculations: Basic and diluted
4,776,540 2,186,196 Other comprehensive loss, net of
tax Unrealized losses on available-for-sale securities —
1 Other comprehensive loss — 1 Comprehensive
loss $ (12,612 ) $ (10,614 )
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of
Cash Flows
(Unaudited)
(In thousands)
Three Months EndedMarch
31,
2019 2018 CASH FLOWS FROM
OPERATING ACTIVITIES: Net loss $ (12,612 ) $ (10,615 ) Adjustments
to reconcile net loss to cash used in operating activities: Initial
loss on common stock warrant and common stock adjustment feature
liabilities — 4,000
Change in fair value of common stock
warrant and common stock adjustment feature liabilities
8,495 1,900 Offering costs — 904 Depreciation and amortization 34
52 Lease amortization 172 — Gain on disposal of equipment — (3 )
Net amortization of investment premium (39 ) (2 ) Stock-based
compensation 422 298 Changes in operating assets and liabilities:
Accounts receivable 86 1,179 Unbilled revenue 3 (45 ) Inventories
39 21 Prepaid expenses and other current assets 197 137 Accounts
payable and accrued expenses (538 ) (322 ) Amounts due to related
parties (16 ) (25 ) Unearned revenue (40 ) (96 ) Operating lease
payments (172 ) 0 Net cash used in operating
activities (3,969 ) (2,617 ) CASH FLOWS FROM
INVESTING ACTIVITIES: Proceeds from sale of property and equipment
— 9 Purchases of property and equipment (88 ) (33 ) Purchases of
investments (6,690 ) — Proceeds from sales and maturities of
investments 9,200 3,900 Net cash provided by
investing activities 2,422 3,876 CASH FLOWS FROM
FINANCING ACTIVITIES: Proceeds from issuance of common stock and
warrants from Purchase Agreement — 10,000 Payments of offering
costs relating to Purchase Agreement — (932 ) Payments of offering
costs relating to June Offering (16 ) — Payments of deferred
offering costs (5 ) — Proceeds from exercise of stock options and
ESPP purchases 8 966 Net cash (used in) provided by
financing activities (13 ) 10,034 Net (decrease)
increase in cash and cash equivalents (1,560 ) 11,293 Cash and cash
equivalents — beginning of period 11,998 9,125 Cash
and cash equivalents — end of period $ 10,438 $ 20,418 SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for income taxes $
2 $ 24 NONCASH INVESTING AND FINANCING ACTIVITIES: Offering costs
in accounts payable and accrued expenses at end of period $ 7 $ 334
Deferred offering costs in accounts payable and accrued expenses at
end of period $ 18 $ — Common stock warrants issued to placement
agent and included in offering costs related to Purchase Agreement
$ — $ 526 Right of use assets obtained in exchange for new
operating lease liabilities $ 2,328 $ — Proceeds from sale of fixed
assets included in prepaid expenses and other current assets at end
of period $ — $ 1 Purchases of fixed assets included in accounts
payable and accrued expenses $ 13 $ —
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version on businesswire.com: https://www.businesswire.com/news/home/20190508005743/en/
Jeff Bergaujeff.bergau@arcadiabio.com+1-312-217-0419
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