Full Press Release Details
Arcadia Biosciences (RKDA) Announces First-Quarter 2021 Financial Results and Business Highlights
-- Revenues up for the quarter over 160%, liquidity strengthened --
-- Acquires Lief assets, a premium portfolio of CBD and wellness brands, bringing immediate top-line revenue, manufacturing capabilities, retail network and proven leadership in consumer goods industry --
-- Acquires European food ingredient platform enhancing GoodWheat business and broadening market access in Europe --
DAVIS, Calif. (May 17, 2021) - 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 2021.
"With our acquisition of select assets of Lief Holdings, LLC and Live Zola, LLC announced today, we added to our business a well-established portfolio of best-in-class CBD-infused and wellness products generating $6 million in recurring annual revenues with strong growth potential, and we gained access to a national distribution network offering retail sales synergies with our GoodWheat and GLA consumer products," said Matt Plavan, CEO of Arcadia. "In line with our stated strategy to increase our verticalization and maximize control over our supply chain to ensure quality from seed to sale and to participate more fully in the value of the brands for our proprietary innovations, the Lief manufacturing capability and distribution into over 5,000 retail doors delivers resoundingly on that strategy."
Recent Operating and Business Highlights
Arcadia Biosciences, Inc.
| Three Months Ended March 31, | |||||||
| 2021 | 2020 | Favorable / (Unfavorable) | |||||
| $ | % | ||||||
| Total Revenues | 828 | 309 | 519 | 168% | |||
| Total Operating Expenses | 6,154 | 6,099 | (55) | (1)% | |||
| Loss From Operations | (5,326) | (5,790 | ) | 464 | 8% | ||
| Net Income Attributable to Common Stockholders | 2,058 | 2,525 | (467) | (19)% |
In the first quarter of 2021, revenues were $828,000, compared to revenues of $309,000 in the first quarter of 2020. The quarter-over-quarter increase was driven by GoodWheat grain sales and higher GLA product sales.
In the first quarter of 2021, operating expenses were $6.2 million, compared to $6.1 million in the first quarter of 2020. Research and development (R&D) spending decreased by $1.1 million in the first quarter of 2021, mostly due to lower employee expenses and the absence of Verdeca related activity in 2021 as our portion of the joint venture was sold to Bioceres in November 2020. General and administrative (SG&A) costs for the first quarter of 2021 were $346,000 higher than the first quarter in 2020, primarily driven by higher employee expenses and increased commercial activities, partially offset by less stock compensation for consultants. Cost of product revenues was $856,000 in the first quarter of 2021 as compared to $132,000 in the first quarter of 2020, the increase primarily the result of additional sales.
Net Income Attributable to Common Stockholders
Net income attributable to common stockholders for the first quarter of 2021 was $2.1 million, or $0.11 per share, a $467,000 decrease from the $2.5 million, or $0.29 per share, of net income for the first quarter of 2020. The first quarter of 2021 included $322,000 of non-cash income recognized as a result of the decrease in the fair value of common stock warrant liabilities while the first quarter of 2020 included $8.2 million of non-cash income for this same item. Non-cash income of $7.5 million was recorded in the first quarter of 2021 for the increase in the fair market value of the shares of Bioceres stock held, but no such income was recorded in the first quarter of 2020 as the stock was acquired in November 2020.
Conference Call and Webcast
The company has scheduled a conference call for 4:30 p.m. Eastern (1:30 p.m. Pacific) today, May 17, 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
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.
Arcadia Biosciences (Nasdaq: RKDA) is a leader in science-based approaches to enhancing the quality and nutritional value of crops and food ingredients. The company'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 GoodHemp seed catalog delivers genetically superior hemp seeds, transplants and extracts, bringing the benefits of modern agriculture to an emerging crop. 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 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.
Arcadia Biosciences Contact:
Chief Financial Officer
Arcadia Biosciences, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
| March 31, 2021 | December 31, 2020 | ||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 32,848 | $ | 14,042 | |
| Short-term investments | 19,088 | 11,625 | |||
| Accounts receivable | 1,113 | 1,406 | |||
| Inventories, net - current | 2,663 | 3,812 | |||
| Prepaid expenses and other current assets | 901 | 811 | |||
| Total current assets | 56,613 | 31,696 | |||
| Restricted cash | - | 2,001 | |||
| Property and equipment, net | 3,480 | 3,539 | |||
| Right of use asset | 5,636 | 5,826 | |||
| Inventories, net - noncurrent | 4,290 | 3,485 | |||
| Goodwill | 408 | 408 | |||
| Intangible assets, net | 350 | 370 | |||
| Other noncurrent assets | 23 | 23 | |||
| Total assets | $ | 70,800 | $ | 47,348 | |
| Liabilities and stockholders' equity | |||||
| Current liabilities: | |||||
| Accounts payable and accrued expenses | $ | 3,418 | $ | 4,105 | |
| Amounts due to related parties | 26 | 80 | |||
| Debt - current | 1,141 | 1,141 | |||
| Unearned revenue - current | 63 | 8 | |||
| Operating lease liability - current | 705 | 717 | |||
| Other current liabilities | 264 | 263 | |||
| Total current liabilities | 5,617 | 6,314 | |||
| Debt - noncurrent | 96 | 2,105 | |||
| Operating lease liability - noncurrent | 5,228 | 5,389 | |||
| Common stock warrant liabilities | 12,016 | 2,708 | |||
| Other noncurrent liabilities | 2,140 | 2,280 | |||
| Total liabilities | 25,097 | 18,796 | |||
| Stockholders' equity: | |||||
| Common stock, $0.001 par value-150,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 21,336,249 and 13,450,861 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 62 | 54 | |||
| Additional paid-in capital | 254,208 | 239,496 | |||
| Accumulated deficit | (209,767) | (211,825) | |||
| Total Arcadia Biosciences stockholders' equity | 44,503 | 27,725 | |||
| Non-controlling interest | 1,200 | 827 | |||
| Total stockholders' equity | 45,703 | 28,552 | |||
| Total liabilities and stockholders' equity | $ | 70,800 | $ | 47,348 |
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Income
(In thousands, except share and per share data)
| Three Months Ended March 31, | |||||
| 2021 | 2020 | ||||
| Revenues: | |||||
| Product | $ | 803 | $ | 154 | |
| License | - | 100 | |||
| Royalty | 25 | 30 | |||
| Contract research and government grants | - | 25 | |||
| Total revenues | 828 | 309 | |||
| Operating expenses: | |||||
| Cost of product revenues | 856 | 132 | |||
| Research and development | 1,159 | 2.244 | |||
| Change in fair value of contingent consideration | (140) | - | |||
| Write-down of fixed assets | 210 | - | |||
| Selling, general and administrative | 4,069 | 3,723 | |||
| Total operating expenses | 6,154 | 6,099 | |||
| Loss from operations | (5,326) | (5,790) | |||
| Interest expense | (9) | (3) | |||
| Other income, net | 7,463 | 72 | |||
| Issuance and offering costs | (769) | - | |||
| Change in fair value of common stock warrant liabilities | 322 | 8,161 | |||
| Net income before income taxes | 1,681 | 2,440 | |||
| Income tax provision | - | (17) | |||
| Net income | 1,681 | 2,423 | |||
| Net loss attributable to non-controlling interest | (377) | (102) | |||
| Net income attributable to common stockholders | $ | 2,058 | $ | 2,525 | |
| Net income per share attributable to common stockholders: | |||||
| Basic | $ | 0.11 | $ | 0.29 | |
| Diluted | $ | 0.11 | $ | 0.29 | |
| Weighted-average number of shares used in per share calculations: | |||||
| Basic | 18,970,250 | 8,651,213 | |||
| Diluted | 19,042,962 | 8,674,610 | |||
| Other comprehensive loss, net of tax | |||||
| Unrealized losses on investment securities | - | (1) | |||
| Other comprehensive loss | - | (1) | |||
| Comprehensive income attributable to common stockholders | $ | 2,058 | $ | 2,524 |
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of Cash Flows
| Three Months Ended March 31, | |||||
| 2021 | 2020 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
| Net income | $ | 1,681 | $ | 2,423 | |
| Adjustments to reconcile net income to cash used in operating activities: | |||||
| Change in fair value of common stock warrant liabilities | (322) | (8,161) | |||
| Change in fair value of contingent consideration | (140) | - | |||
| Issuance and offering costs | 769 | - | |||
| Depreciation | 236 | 74 | |||
| Amortization of intangible assets | 20 | - | |||
| Lease amortization | 289 | 223 | |||
| Net amortization of investment premium | - | (39) | |||
| Stock-based compensation | 325 | 772 | |||
| Unrealized gain on corporate securities | (7,463) | - | |||
| Write-down of fixed assets | 210 | - | |||
| Write-down of inventory | 160 | 59 | |||
| Changes in operating assets and liabilities: | |||||
| Accounts receivable | 293 | 293 | |||
| Inventories | 184 | (4,145) | |||
| Prepaid expenses and other current assets | (90) | (748) | |||
| Other noncurrent assets | - | (15) | |||
| Accounts payable and accrued expenses | (591) | 227 | |||
| Amounts due to related parties | (54) | (24) | |||
| Unearned revenue | 55 | (25) | |||
| Other current liabilities | 3 | - | |||
| Operating lease payments | (272) | (184) | |||
| Net cash used in operating activities | (4,707)) | (9,270) | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
| Purchases of property and equipment | (485) | (778) | |||
| Purchases of investments | - | (1,292) | |||
| Proceeds from sales and maturities of investments | - | 15,200 | |||
| Net cash (used in) provided by investing activities | (485) | 13,130 | |||
| 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) | - | |||
| Principal payments on debt | (2,009) | (7) | |||
| Proceeds from ESPP purchases | 21 | 14 | |||
| Capital contributions received from non-controlling interest | 750 | 689 |
| Net increase in cash, cash equivalents and restricted cash | 16,805 | 4,556 | |||
| Cash, cash equivalents and restricted cash - beginning of period | 16,043 | 8,417 | |||
| Cash, cash equivalents and restricted cash - end of period | $ | 32,848 | $ | 12,973 | |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||
| Cash paid for income taxes | $ | - | $ | 2 | |
| Cash paid for interest | $ | 19 | $3 | ||
| 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 January 2021 PIPE securities purchase agreement | $ | 942 | $ | - | |
| Right of use assets obtained in exchange for new operating lease liabilities | $ | - | $ | 3,836 | |
| Purchases of fixed assets included in accounts payable and accrued expenses | $ | 25 | $ | - |