Arcadia Biosciences Announces Strong Second-Quarter and First-Half 2021 Financial Results and Business Highlights

DAVIS, Calif., Aug. 16, 2021 /PRNewswire/ — Arcadia Biosciences, Inc.® (Nasdaq: RKDA), a producer and marketer of innovative, plant-based health and…

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.