DAVIS, Calif., Aug. 16, 2021 /PRNewswire/ -- Arcadia
Biosciences, Inc.® (Nasdaq: RKDA), a producer and
marketer of innovative, plant-based health and wellness products,
today released its financial and business results for the second
quarter and first half of 2021.
"In addition to being marked by five-fold revenue growth, our
second quarter was the first time Arcadia recorded sales from our consumer
brands, representing a key milestone in our transformation to a
dynamic producer and marketer of innovative, plant-based health and
wellness products," said Matt
Plavan, CEO of Arcadia.
"The quarter was also highlighted by significant advancements in
our strategic resource and capacity building, and the successful
integration of operations following the Lief Brands acquisition,"
he added. "We strongly believe that these initiatives, along with
the profitable sale of our Bioceres shares will enable us to
accelerate our current momentum and strongly position the company
to achieve meaningful top-line growth."
Q2 and Recent Operating and Business Highlights
- Arcadia Names Veteran CPG Leader Laura
Pitlik as Chief Marketing Officer. Arcadia recently named Laura Pitlik its Chief Marketing Officer to
expand brand awareness of its consumer goods following several key
acquisitions. A veteran CPG strategist, Pitlik launched the first
national line of all-natural breads, Nature's Pride®,
for Hostess Brands, and has deep expertise in the CPG industry,
leading brands such as Dr Pepper®, Wonder®
Bread and On The Border® tortilla chips and salsas.
- Arcadia Hires Lief Executives with Acquisition, Bringing Deep
CPG Experience. As part of the Lief acquisition, Arcadia hired two senior CPG executives:
Chris Cuvelier as Chief Growth
Officer and Belinda Yao as Vice
President of Operations. Cuvelier leads growth strategy and sales
execution for the company's consumer goods business. As the founder
and former CEO of plant-based beverage maker Zola, Cuvelier
successfully extended the Zola brand to include coconut water and
grew gross revenues to more than $20
million annually.
Yao oversees supply chain manufacturing for the company, including
demand planning, procurement and supplier relationships, order
fulfillment, inventory management, logistics, customer service and
data analytics. She is a former supply chain lead for The Dannon
Company, Harmless Harvest and Zola.
The company also expanded its roster of CPG talent beyond executive
roles, having attracted key individuals in finance and procurement
positions who bring tenured experience from leading CPG
companies.
- Arcadia Advances Successful Integration of Lief Brands.
Immediately upon the close of the Lief acquisition, Arcadia began integrating the Lief
manufacturing team, leveraging overhead synergies, and scaling
manufacturing capacity to meet anticipated volume growth.
- Arcadia Completes Sale of Bioceres Shares. Arcadia successfully sold the Bioceres shares
previously acquired as partial consideration for the sale of its
partnership interest in Verdeca. With this sale and the up-front
payments received at the time of the transaction, the company
successfully monetized more than $27
million in cash from the sale of its interest in the HB4
drought tolerant soybean technology. Arcadia still retains further royalty rights
up to $10 million upon
commercialization of HB4.
Arcadia
Biosciences, Inc.
|
Financial
Snapshot
|
(Unaudited)
|
($ in
thousands)
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
Favorable
/
(Unfavorable)
|
|
|
2021
|
|
|
2020
|
|
|
Favorable
/
(Unfavorable)
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
%
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
%
|
|
Total
revenues
|
|
|
1,405
|
|
|
|
281
|
|
|
|
1,124
|
|
|
|
400
|
%
|
|
|
2,234
|
|
|
|
590
|
|
|
|
1,644
|
|
|
|
279
|
%
|
Total operating
expenses
|
|
|
9,088
|
|
|
|
7,157
|
|
|
|
(1,931)
|
|
|
|
(27)
|
%
|
|
|
15,243
|
|
|
|
13,256
|
|
|
|
(1,987)
|
|
|
|
(15)
|
%
|
Loss from
operations
|
|
|
(7,682)
|
|
|
|
(6,876)
|
|
|
|
(806)
|
|
|
|
(12)
|
%
|
|
|
(13,009)
|
|
|
|
(12,666)
|
|
|
|
(343)
|
|
|
|
(3)
|
%
|
Net loss
attributable to common stockholders
|
|
|
(5,261)
|
|
|
|
(9,689)
|
|
|
|
4,428
|
|
|
|
46
|
%
|
|
|
(3,202)
|
|
|
|
(7,164)
|
|
|
|
3,962
|
|
|
|
55
|
%
|
Revenues
In the second quarter of 2021, revenues were
$1.4 million, compared to revenues of
$281,000 in the second quarter of
2020, and first half 2021 revenues were $2.2
million, compared to $590,000
in the first half of 2020. The $1.1
million quarter-over-quarter increase was primarily driven
by the sales related to the newly acquired portfolio of wellness
brands, in addition to GoodHemp seed sales. The $1.6 million year-over-year increase was driven
by the aforementioned, in addition to higher GoodWheat grain sales
during the first quarter of 2021.
Operating Expenses
In the second quarter of 2021,
operating expenses were $9.1 million
compared to $7.2 million in the
second quarter of 2020, and first half 2021 operating expenses were
$15.2 million compared to
$13.3 million in the first half of
2020.
Cost of product revenues in the second quarter of 2021 included
costs associated with the newly acquired portfolio of wellness
brands and $720,000 of write-downs of
wheat inventories and hemp seed inventory to fair value, while the
second quarter of 2020 included a $1.4
million write-off of hemp seeds that did not meet quality
specifications. Cost of product revenues for the first half of 2021
were $2.4 million, or $821,000 higher than in the first half of 2020,
primarily driven by sales of the newly acquired product lines.
Research and development (R&D) spending decreased by
$862,000 and $1.9 million for the second quarter and six
months ended June 30, 2021,
respectively, primarily due to lower employee expenses as we
right-sized our research teams, along with the absence of Verdeca
related activity in 2021.
General and administrative (SG&A) costs for the quarter and
six months ended June 30, 2021 were
$2.7 million and $3.0 million higher than in the quarter and six
months ended June 30, 2020,
respectively, resulting in part from the acquisitions this quarter,
including investment banker success fees, legal diligence and
transaction fees, as well as additional salaries and benefits with
the increased headcount. Marketing, advertising and consulting
activities increased in 2021 as well.
Net Income Attributable to Common Stockholders
Net
loss attributable to common stockholders for the second quarter of
2021 was $5.3 million, or
$0.24 per share, a $4.4 million decrease from the $9.7 million, or $1.04 per share, net loss for the second quarter
of 2020. The second quarter of 2021 included $2.8 million of other income for the gain on the
sale of Bioceres shares and $498,000
of non-cash expense recognized as a result of the increase in the
fair value of common stock warrant liabilities. The first quarter
of 2020 included $3.1 million of
non-cash expense for the increase in the fair value of common stock
warrant liabilities.
Net loss attributable to common stockholders for the first half
of 2021 was $3.2 million, or
$0.15 per share, a $4.0 million decrease from the $7.2 million, or $0.80 per share, net loss for the second half of
2020. A realized gain on the sale of Bioceres shares in the amount
of $10.2 million was recognized in
the first half of 2021. Non-cash expense of $176,000 was recorded in the first half of 2021
for the increase in the fair value of common stock warrant
liabilities, while $5.1 million of
non-cash income was recorded during the first half of 2020 for the
decrease in the fair value of common stock warrant liabilities.
Conference Call and Webcast
The company has scheduled
a conference call for 4:30 p.m.
Eastern (1:30 p.m. Pacific) today,
August 16, to discuss second-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:
|
3389334
|
A live webcast of the conference call will be available on the
"Investors" section of the Arcadia
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.
With origins as a
trailblazing developer of science-based approaches to enhancing the
quality and nutritional value of crops and food ingredients,
Arcadia Biosciences (Nasdaq: RKDA) is now a producer of innovative,
plant-based health and wellness products, within the portfolios of
GoodWheat™ and Lief™, which includes popular brands Soul Spring™,
ProVault™, Saavy Naturals® and Zola® coconut
water. The company's growing number of innovative offerings
are designed to enhance quality and health benefits in an array of
consumer product categories. For more information, visit
https://arcadiabio.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 projected revenue growth as a
result of the asset acquisition. 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 price and demand
for the company's products are lower than expected; the company's
and its partners' and affiliates' ability to develop and sell
commercial products incorporating its traits, and complete the
regulatory review process for such products; the company's
compliance with laws and regulations that impact the company's
business, including the sale of products containing CBD, and
changes to such laws and regulations; the growth of the global
wheat and hemp markets; the successful integration of the acquired
brands and assets into Arcadia's
business; the potential impact of COVID-19 on the company's
business; 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,
2020, and other filings. These forward-looking statements
speak only as of the date hereof, and Arcadia Biosciences, Inc.
undertakes no duty to update these forward-looking statements.
LinkedIn: Arcadia Biosciences
Twitter: @ArcadiaAg
Arcadia
Biosciences, Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited)
|
(In thousands,
except share data)
|
|
|
June 30, 2021
|
|
|
December 31,
2020
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
43,977
|
|
|
$
|
14,042
|
|
Short-term
investments
|
|
—
|
|
|
|
11,625
|
|
Accounts
receivable
|
|
1,147
|
|
|
|
1,406
|
|
Inventories, net —
current
|
|
3,897
|
|
|
|
3,812
|
|
Prepaid expenses and
other current assets
|
|
1,895
|
|
|
|
811
|
|
Total current
assets
|
|
50,916
|
|
|
|
31,696
|
|
Restricted
cash
|
|
—
|
|
|
|
2,001
|
|
Property and
equipment, net
|
|
3,740
|
|
|
|
3,539
|
|
Right of use
asset
|
|
6,360
|
|
|
|
5,826
|
|
Inventories, net —
noncurrent
|
|
3,890
|
|
|
|
3,485
|
|
Goodwill
|
|
1,648
|
|
|
|
408
|
|
Intangible assets,
net
|
|
4,068
|
|
|
|
370
|
|
Other noncurrent
assets
|
|
176
|
|
|
|
23
|
|
Total
assets
|
$
|
70,798
|
|
|
$
|
47,348
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
5,189
|
|
|
$
|
4,105
|
|
Amounts due to related
parties
|
|
33
|
|
|
|
80
|
|
Debt —
current
|
|
1,140
|
|
|
|
1,141
|
|
Unearned revenue —
current
|
|
63
|
|
|
|
8
|
|
Operating lease
liability — current
|
|
962
|
|
|
|
717
|
|
Other current
liabilities
|
|
264
|
|
|
|
263
|
|
Total current
liabilities
|
|
7,651
|
|
|
|
6,314
|
|
Debt —
noncurrent
|
|
87
|
|
|
|
2,105
|
|
Operating lease
liability — noncurrent
|
|
5,727
|
|
|
|
5,389
|
|
Common stock warrant
liabilities
|
|
12,514
|
|
|
|
2,708
|
|
Other noncurrent
liabilities
|
|
2,140
|
|
|
|
2,280
|
|
Total
liabilities
|
|
28,119
|
|
|
|
18,796
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common stock, $0.001
par value—150,000,000 shares authorized as of June 30, 2021 and December 31, 2020;
22,163,650 and 13,450,861 shares
issued and outstanding as of June 30, 2021 and December 31, 2020, respectively
|
|
63
|
|
|
|
54
|
|
Additional paid-in
capital
|
|
256,616
|
|
|
|
239,496
|
|
Accumulated other
comprehensive income
|
|
(12)
|
|
|
|
—
|
|
Accumulated
deficit
|
|
(215,027)
|
|
|
|
(211,825)
|
|
Total Arcadia
Biosciences stockholders' equity
|
|
41,640
|
|
|
|
27,725
|
|
Non-controlling
interest
|
|
1,039
|
|
|
|
827
|
|
Total stockholders'
equity
|
|
42,679
|
|
|
|
28,552
|
|
Total liabilities and
stockholders' equity
|
$
|
70,798
|
|
|
$
|
47,348
|
|
Arcadia
Biosciences, Inc.
|
Condensed Consolidated Statements of
Operations and Comprehensive Loss
|
(Unaudited)
|
(In thousands,
except share and per share data)
|
|
|
Three Months
Ended
June 30,
|
|
|
Six Months
Ended
June 30,
|
|
|
|
2021
|
|
|
|
2020
|
|
|
|
2021
|
|
|
|
2020
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
|
$
|
1,379
|
|
|
$
|
231
|
|
|
$
|
2,183
|
|
|
$
|
385
|
|
License
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
100
|
|
Royalty
|
|
26
|
|
|
|
12
|
|
|
|
51
|
|
|
|
42
|
|
Contract research and
government grants
|
|
—
|
|
|
|
38
|
|
|
|
—
|
|
|
|
63
|
|
Total
revenues
|
|
1,405
|
|
|
|
281
|
|
|
|
2,234
|
|
|
|
590
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product
revenues
|
|
1,587
|
|
|
|
1,490
|
|
|
|
2,443
|
|
|
|
1,622
|
|
Research and
development
|
|
1,131
|
|
|
|
1,993
|
|
|
|
2,290
|
|
|
|
4,237
|
|
Change in fair value
of contingent consideration
|
|
—
|
|
|
|
—
|
|
|
|
(140)
|
|
|
|
—
|
|
Write-down of fixed
assets
|
|
—
|
|
|
|
—
|
|
|
|
210
|
|
|
|
—
|
|
Selling, general and
administrative
|
|
6,370
|
|
|
|
3,674
|
|
|
|
10,439
|
|
|
|
7,397
|
|
Total operating
expenses
|
|
9,088
|
|
|
|
7,157
|
|
|
|
15,243
|
|
|
|
13,256
|
|
Loss from
operations
|
|
(7,682)
|
|
|
|
(6,876)
|
|
|
|
(13,009)
|
|
|
|
(12,666)
|
|
Interest
expense
|
|
(1)
|
|
|
|
(6)
|
|
|
|
(8)
|
|
|
|
(9)
|
|
Other income,
net
|
|
2,759
|
|
|
|
10
|
|
|
|
10,222
|
|
|
|
82
|
|
Change in fair value
of common stock warrant liabilities
|
|
(498)
|
|
|
|
(3,079)
|
|
|
|
(176)
|
|
|
|
5,082
|
|
Gain on
extinguishment of warrant liability
|
|
—
|
|
|
|
47
|
|
|
|
—
|
|
|
|
47
|
|
Issuance and offering
costs
|
|
—
|
|
|
|
—
|
|
|
|
(769)
|
|
|
|
—
|
|
Net loss before
income taxes
|
|
(5,422)
|
|
|
|
(9,904)
|
|
|
|
(3,740)
|
|
|
|
(7,464)
|
|
Income tax benefit
(provision)
|
|
—
|
|
|
|
10
|
|
|
|
—
|
|
|
|
(7)
|
|
Net loss
|
|
(5,422)
|
|
|
|
(9,894)
|
|
|
|
(3,740)
|
|
|
|
(7,471)
|
|
Net loss attributable
to non-controlling interest
|
|
(161)
|
|
|
|
(205)
|
|
|
|
(538)
|
|
|
|
(307)
|
|
Net loss attributable
to common stockholders
|
$
|
(5,261)
|
|
|
$
|
(9,689)
|
|
|
$
|
(3,202)
|
|
|
$
|
(7,164)
|
|
Net loss per share
attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.24)
|
|
|
$
|
(1.04)
|
|
|
$
|
(0.15)
|
|
|
$
|
(0.80)
|
|
Weighted-average
number of shares used in per share
calculations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
21,745,403
|
|
|
|
9,327,317
|
|
|
|
21,271,960
|
|
|
|
8,989,265
|
|
Other comprehensive
loss, net of tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized losses on
investment securities
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1)
|
|
Foreign currency
translation adjustment
|
|
(12)
|
|
|
|
—
|
|
|
|
(12)
|
|
|
|
—
|
|
Other comprehensive
loss
|
|
(12)
|
|
|
|
—
|
|
|
|
(12)
|
|
|
|
(1)
|
|
Comprehensive loss
attributable to common stockholders
|
$
|
(5,273)
|
|
|
$
|
(9,689)
|
|
|
$
|
(3,214)
|
|
|
$
|
(7,165)
|
|
Arcadia
Biosciences, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
(In
thousands)
|
|
|
Six Months Ended
June 30,
|
|
|
|
2021
|
|
|
|
2020
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(3,740)
|
|
|
$
|
(7,471)
|
|
Adjustments to
reconcile net loss to cash used in operating activities:
|
|
|
|
|
|
|
|
Change in fair value of common stock warrant liabilities
|
|
176
|
|
|
|
(5,082)
|
|
Gain
on extinguishment of warrant liability
|
|
—
|
|
|
|
(47)
|
|
Change in fair value of contingent consideration
|
|
(140)
|
|
|
|
—
|
|
Issuance and offering costs
|
|
769
|
|
|
|
—
|
|
Depreciation
|
|
484
|
|
|
|
182
|
|
Amortization of intangible assets
|
|
48
|
|
|
|
—
|
|
Lease amortization
|
|
639
|
|
|
|
484
|
|
Loss
on disposal of fixed assets
|
|
135
|
|
|
|
—
|
|
Net
amortization of investment premium
|
|
—
|
|
|
|
(44)
|
|
Stock-based compensation
|
|
681
|
|
|
|
1,367
|
|
Realized gain on corporate securities
|
|
(10,222)
|
|
|
|
—
|
|
Write-down of fixed assets
|
|
210
|
|
|
|
—
|
|
Write-down of inventory and prepaid production costs
|
|
983
|
|
|
|
1,421
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
259
|
|
|
|
199
|
|
Inventories
|
|
(633)
|
|
|
|
(8,031)
|
|
Prepaid expenses and other current assets
|
|
(938)
|
|
|
|
(1,276)
|
|
Other noncurrent assets
|
|
(153)
|
|
|
|
(15)
|
|
Accounts payable and accrued expenses
|
|
1,083
|
|
|
|
2,252
|
|
Amounts due to related parties
|
|
(47)
|
|
|
|
(18)
|
|
Unearned revenue
|
|
56
|
|
|
|
(42)
|
|
Other current liabilities
|
|
1
|
|
|
|
—
|
|
Other noncurrent liabilities
|
|
(1)
|
|
|
|
(43)
|
|
Operating lease payments
|
|
(590)
|
|
|
|
(384)
|
|
Net cash
used in operating activities
|
|
(10,940)
|
|
|
|
(16,548)
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(713)
|
|
|
|
(1,749)
|
|
Purchases of
investments
|
|
—
|
|
|
|
(1,292)
|
|
Acquisitions, net of
cash acquired
|
|
(4,250)
|
|
|
|
—
|
|
Proceeds from sales
and maturities of investments
|
|
21,845
|
|
|
|
17,650
|
|
Net cash
(used in) provided by investing activities
|
|
16,882
|
|
|
|
14,609
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds from
issuance of common stock and warrants from January 2021 PIPE
securities purchase agreement
|
|
25,147
|
|
|
|
—
|
|
Payments of offering
costs relating to January 2021 PIPE securities purchase
agreement
|
|
(1,912)
|
|
|
|
—
|
|
Proceeds from warrant
exercises from June 2018 Offering
|
|
—
|
|
|
|
6,822
|
|
Proceeds from
borrowings
|
|
—
|
|
|
|
3,108
|
|
Payment of
transaction costs relating to extinguishment of warrant
liability
|
|
—
|
|
|
|
(594)
|
|
Principal payments on
debt
|
|
(2,019)
|
|
|
|
(15)
|
|
Proceeds from ESPP
purchases
|
|
27
|
|
|
|
14
|
|
Capital contributions
received from non-controlling interest
|
|
750
|
|
|
|
1,182
|
|
Net cash
provided by financing activities
|
|
21,993
|
|
|
|
10,517
|
|
Effects of foreign
currency translation on cash and cash equivalents
|
|
(1)
|
|
|
|
—
|
|
Net increase in cash,
cash equivalents and restricted cash
|
|
27,934
|
|
|
|
8,578
|
|
Cash, cash
equivalents and restricted cash — beginning of period
|
|
16,043
|
|
|
|
8,417
|
|
Cash, cash
equivalents and restricted cash — end of period
|
$
|
43,977
|
|
|
$
|
16,995
|
|
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
$
|
1
|
|
|
$
|
—
|
|
Cash paid for
interest
|
$
|
21
|
|
|
$
|
6
|
|
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
|
|
Shares of common
stock issued at closing of Arcadia Wellness transaction
|
$
|
2,053
|
|
|
$
|
—
|
|
Common stock warrants
issued to placement agent and included in offering costs related to
January 2021 PIPE securities purchase agreement
|
$
|
942
|
|
|
$
|
—
|
|
Right of use assets
obtained in exchange for new operating lease liabilities
|
$
|
913
|
|
|
$
|
3,947
|
|
Purchases of fixed
assets included in accounts payable and accrued expenses
|
$
|
58
|
|
|
$
|
—
|
|
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SOURCE Arcadia Biosciences, Inc.