DAVIS, Calif., May 13, 2020 /PRNewswire/ -- Arcadia Biosciences, Inc.® (Nasdaq: RKDA), a leader in science-based approaches to enhancing the quality and nutritional value of crops and food ingredients, today released its financial and business results for the first quarter of 2020.
"This is an extraordinary moment in time for all of us," said Matt Plavan, Arcadia's president and chief executive officer. "Our priorities throughout this challenging time remain the same: to maintain the health and safety of our people and to maintain business continuity and advance our business objectives without significant interruption. I'm happy to say that we've been successful in accomplishing these goals.
"Despite some headwinds generated by COVID-19, we are pleased with the robust quarter of strategic partnerships and acquisitions in the hemp space, including grower-facing partners like Grow West® and Buttonwillow Warehouse Company, as well as CPG-facing customers like Vivion Specialties, Inc.™ (VSI).
"Today's hemp supply chain is still evolving and clearly will need advances to reach its full commercial potential," said Plavan. "We believe we can be an attractive partner to companies throughout that supply chain. In addition to our organic growth strategies, we are now poised to accelerate shareholder value creation through acquisitive and strategic growth opportunities in the processing, manufacturing and brand segments of the hemp value chain to create a leading, vertically-integrated platform focused on the highest technology, quality and transparency in hemp and hemp products.
"To help us navigate this emerging market, Arcadia has reached into the sector and is working with strategic advisors, including Corner Capital Group (CCG), who has been an early investor in technology and healthcare industries including TILT Holdings and Mile High Labs," Plavan added.
Q1 2020 Operating and Business Highlights
Q2 Business Highlights
Arcadia Biosciences, Inc. | |||||||
Financial Snapshot | |||||||
(Unaudited) | |||||||
($ in thousands) | |||||||
Three Months Ended March 31, | |||||||
2020 | 2019 | Favorable / (Unfavorable) | |||||
$ | % | ||||||
Total Revenues | 309 | 158 | 151 | 96% | |||
Total Operating Expenses | 6,099 | 4,376 | (1,723) | (39)% | |||
Loss From Operations | (5,790) | (4,218) | (1,572) | (37)% | |||
Net Income (Loss) Attributable toCommon Stockholders | 2,525 | (12,612) | 15,137 | 120% |
RevenuesIn the first quarter of 2020, revenues were $309,000, compared to revenues of $158,000 in the first quarter of 2019. The quarter-over-quarter increase was driven by the achievement of a milestone by a licensee, an increase in GLA product sales and the recognition of GoodWheat royalty revenues, partially offset by the decrease in contract research and government grant revenues.
Operating ExpensesIn the first quarter of 2020, operating expenses were $6.1 million, compared to $4.4 million in the first quarter of 2019. Research and development (R&D) spending increased by $739,000 in the first quarter of 2020, primarily due to higher employee expenses and hemp-related costs. General and administrative (SG&A) costs for the first quarter of 2020 were $911,000 higher than the first quarter in 2019, primarily driven by higher consulting fees and consultants' stock compensation expense and higher employee-related expenses. Cost of product revenues was $73,000 higher in the first quarter of 2020 compared to 2019 due to additional GLA product sales in 2020 and a write-down of wheat inventory.
Net Income Attributable to Common StockholdersNet income attributable to common stockholders for the first quarter of 2020 was $2.5 million, or $0.29 per share, a $15.1 million increase from the $12.6 million loss in the first quarter of 2019. The quarter-over-quarter increase was largely due to the $8.2 million non-cash income recognized in the first quarter of 2020 as a result of a decrease in the fair value of common stock warrant liabilities versus the $8.5 million non-cash expense recognized in the first quarter of 2019 as a result of an increase in these liabilities.
Conference Call and WebcastThe company has scheduled a conference call for 4:30 p.m. Eastern (1:30 p.m. Pacific) today, May 13, 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: | 3560919 |
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.
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 the company's revenue from seed sales and its total revenue for 2020, the company's access to growers, and the company's plans,, commercial products and collaborations. 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 wheat and hemp related 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 and it partners' ability to fulfill current and follow-on purchase commitments; the company's compliance with laws and regulations that impact the company's business, and changes to such laws and regulations; the growth of the global wheat and hemp markets; the successful integration of the company's business with the businesses of any future partners; 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, 2019, 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.
Arcadia Biosciences, Inc. | |||
Condensed Consolidated Balance Sheets | |||
(Unaudited) | |||
(In thousands, except share data) | |||
March 31, 2020 | December 31, 2019 | ||
Assets | |||
Current assets: | |||
Cash and cash equivalents | $ 12,973 | $ 8,417 | |
Short-term investments | 3,045 | 16,915 | |
Accounts receivable | 309 | 602 | |
Inventories, net — current | 5,971 | 1,794 | |
Prepaid expenses and other current assets | 1,460 | 712 | |
Total current assets | 23,758 | 28,440 | |
Property and equipment, net | 2,540 | 1,799 | |
Right of use asset | 5,654 | 1,963 | |
Inventories, net — noncurrent | 273 | 364 | |
Other noncurrent assets | 23 | 8 | |
Total assets | $ 32,248 | $ 32,574 | |
Liabilities and stockholders' equity | |||
Current liabilities: | |||
Accounts payable and accrued expenses | $ 4,912 | $ 4,685 | |
Amounts due to related parties | 16 | 40 | |
Notes payable — current | 31 | 24 | |
Unearned revenue — current | 17 | 42 | |
Operating lease liability — current | 526 | 611 | |
Other current liabilities | 306 | 306 | |
Total current liabilities | 5,808 | 5,708 | |
Notes payable — noncurrent | 130 | 107 | |
Operating lease liability — noncurrent | 5,312 | 1,497 | |
Common stock warrant liabilities | 6,775 | 14,936 | |
Other noncurrent liabilities | 2,000 | 2,000 | |
Total liabilities | 20,025 | 24,248 | |
Stockholders' equity: | |||
Common stock, $0.001 par value—150,000,000 shares authorized as of March 31, 2020 and December 31, 2019;8,654,095 and 8,646,149 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 49 | 49 | |
Additional paid-in capital | 215,612 | 214,826 | |
Accumulated other comprehensive income | — | 1 | |
Accumulated deficit | (204,646) | (207,171) | |
Total Arcadia Biosciences stockholders' equity | 11,015 | 7,705 | |
Non-controlling interest | 1,208 | 621 | |
Total stockholders' equity | 12,223 | 8,326 | |
Total liabilities and stockholders' equity | $ 32,248 | $ 32,574 |
Arcadia Biosciences, Inc. | |||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) | |||
(Unaudited) | |||
(In thousands, except share and per share data) | |||
Three Months Ended March 31, | |||
2020 | 2019 | ||
Revenues: | |||
Product | $ 154 | $ 107 | |
License | 100 | — | |
Royalty | 30 | — | |
Contract research and government grants | 25 | 51 | |
Total revenues | 309 | 158 | |
Operating expenses: | |||
Cost of product revenues | 132 | 59 | |
Research and development | 2,244 | 1,505 | |
Selling, general and administrative | 3,723 | 2,812 | |
Total operating expenses | 6,099 | 4,376 | |
Loss from operations | (5,790) | (4,218) | |
Interest expense | (3) | — | |
Other income, net | 72 | 120 | |
Change in fair value of common stock warrant and common stock adjustment feature liabilities | 8,161 | (8,495) | |
Net income (loss) before income taxes | 2,440 | (12,593) | |
Income tax provision | (17) | (19) | |
Net income (loss) | 2,423 | (12,612) | |
Net loss attributable to non-controlling interest | (102) | — | |
Net income (loss) attributable to common stockholders | $ 2,525 | $ (12,612) | |
Net income (loss) per share attributable to common stockholders: | |||
Basic and diluted | 0.29 | $ (2.64) | |
Weighted-average number of shares used in per share calculations: | |||
Basic | 8,651,213 | 4,776,540 | |
Diluted | 8,674,610 | 4,776,540 | |
Other comprehensive loss, net of tax | |||
Unrealized losses on available-for-sale securities | (1) | — | |
Other comprehensive loss | (1) | — | |
Comprehensive income (loss) attributable to common stockholders | $ 2,524 | $ (12,612) |
Arcadia Biosciences, Inc. | |||
Condensed Consolidated Statements of Cash Flows | |||
(Unaudited) | |||
(In thousands) | |||
Three Months Ended March 31, | |||
2020 | 2019 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 2,423 | $ (12,612) | |
Adjustments to reconcile net income (loss) to cash used in operating activities: | |||
Change in fair value of common stock warrant and common stock adjustment feature liabilities | (8,161) | 8,495 | |
Depreciation | 74 | 34 | |
Lease amortization | 223 | 172 | |
Net amortization of investment premium | (39) | (39) | |
Stock-based compensation | 772 | 422 | |
Write down of inventory | 59 | — | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 293 | 86 | |
Inventories | (4,145) | 39 | |
Prepaid expenses and other current assets | (748) | 200 | |
Other noncurrent assets | (15) | — | |
Accounts payable and accrued expenses | 227 | (538) | |
Amounts due to related parties | (24) | (16) | |
Unearned revenue | (25) | (40) | |
Operating lease payments | (184) | (172) | |
Net cash used in operating activities | (9,270) | (3,969) | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (778) | (88) | |
Purchases of investments | (1,292) | (6,690) | |
Proceeds from sales and maturities of investments | 15,200 | 9,200 | |
Net cash provided by investing activities | 13,130 | 2,422 | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Payments of offering costs relating to June 2018 Offering | — | (16) | |
Payments of deferred offering costs | — | (5) | |
Principal payments on notes payable | (7) | — | |
Proceeds from ESPP purchases | 14 | 8 | |
Capital contributions received from non-controlling interest | 689 | — | |
Net cash provided by (used in) financing activities | 696 | (13) | |
Net increase (decrease) in cash and cash equivalents | 4,556 | (1,560) | |
Cash and cash equivalents — beginning of period | 8,417 | 11,998 | |
Cash and cash equivalents — end of period | $ 12,973 | $ 10,438 | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for income taxes | $ — | $ 2 | |
Cash paid for interest | $ 3 | $ — | |
NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Fixed assets acquired with notes payable | $ 37 | $ — | |
Offering costs in accounts payable and accrued expenses at end of period | $ — | $ 7 | |
Deferred offering costs in accounts payable and accrued expenses at end of period | $ — | $ 18 | |
Right of use assets obtained in exchange for new operating lease liabilities | $ 3,836 | $ 2,328 | |
Purchases of fixed assets included in accounts payable and accrued expenses | $ — | $ 13 |
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SOURCE Arcadia Biosciences, Inc.