Full Press Release Details
Arcadia Biosciences (RKDA) Announces Fourth-Quarter and Full-Year 2020 Financial Results and Business Highlights
- Record revenues, up six-fold over prior year -
- Strong balance sheet entering 2021 -
- Expanded product offerings -
DAVIS, Calif. (March 30, 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 fourth quarter and full year of 2020.
"2020 was a remarkable year for Arcadia, as we achieved record revenues and greatly strengthened our financial wherewithal, said Matt Plavan, CEO of Arcadia. "We also established new direct-to-consumer sales channels, introduced new consumer products, enhanced our IP portfolio and fundamentally evolved to a viable commercial enterprise.
"All of this progress in 2020, despite the pandemic, underscores our agility, fortitude and commitment to advancing the transformation of our proprietary innovations into good-for-you foods and wellness products that both fulfill our mission - Healthy people. Healthy planet. - and bring superior returns to our shareholders," he continued. "We enter 2021 well-funded, well-equipped and highly enthusiastic."
2020 Key Operating and Business Highlights
GoodWheatTM Platform of Non-GMO Specialty Wheat Ingredients
During 2020, consumer demand for pantry staples like pasta and flour increased significantly, as did e-commerce as a means of consumer procurement, which bodes well for Arcadia's strategy decision to focus on direct-to-consumer sales for GoodWheat, both on-line and through direct retail. The company began developing the necessary capabilities to access consumers more broadly via e-commerce and retail channels in 2021.
GoodHempTM Portfolio of Genetically Superior Hemp Seeds
Despite the opaque regulatory framework for CBD in 2020, industry expectations for hemp derived products remains exceptional. Significant fundamentals were established to enable the company to serve the CBD hemp seed and extract markets as expected regulations governing commerce are implemented.
HB4 Drought and Herbicide Tolerant Soybeans
The strategic transaction with Bioceres provided a number of favorable results for Arcadia including, significant non-dilutive liquidity, a strong return on investment, a reduction in forward research and development costs, and a streamlining of management focus towards the wheat and hemp businesses at a critical commercial inflection point.
Other 2020 Highlights
Recent Highlights in 2021
Several achievements in the first quarter have positioned Arcadia well for shareholder value creation in 2021.
Arcadia Biosciences, Inc.
| Three months ended Dec 31 | Twelve months ended Dec 31 | ||||||||
| 2020 | 2019 | Favorable/ (Unfavorable) | 2020 | 2019 | Favorable/ (Unfavorable) | ||||
| $ | % | $ | % | ||||||
| Total Revenues | 7,130 | 416 | 6,714 | 1614% | 8,034 | 1,169 | 6,865 | 587% | |
| Total Operating Expenses | (339) | 4,405 | 4,744 | 108% | 20,812 | 20,550 | (262) | (1)% | |
| Income (Loss) From Operations | 7,469 | (3,989) | 11,458 | 287% | (12,778) | (19,381) | 6,603 | 34% | |
| Net Income (Loss) Attributable to Common Stockholders | 9,979 | (6,243) | 16,222 | 260% | (4,655) | (28,805) | 24,150 | 84% |
Arcadia's revenues for 2020 were predominately comprised of license revenue generated from the series of transactions executed with Bioceres in November 2020. The remaining revenues were largely the result of GLA product revenues. As expected, revenues from legacy sources continued to wind down during the year and revenues from new wheat and hemp products are poised for meaningful growth in 2021.
In the fourth quarter of 2020, revenues were $7.1 million, compared to $416,000 in the fourth quarter of 2019. Annual revenues for 2020 increased to $8.0 million from $1.2 million during the same period of 2019. The quarter-over-quarter and annual results were largely driven by the license revenue generated from Bioceres, along with higher GLA product revenues.
Operating expenses for the fourth quarter and year ended December 31, 2020 were $(0.3) million and $20.8 million, compared to $4.4 million and $20.6 million for the fourth quarter and year ended December 31, 2019. In the fourth quarter of 2020, operating expenses included an $8.8 million gain on the sale of its membership interests in Verdeca. Operating expenses for 2019 includes a $1.0 million non-cash fair value gain recognized during the fourth quarter. The non-cash gain was the result of a reduction in the fair value of Arcadia's contingent consideration liability.
Research and development (R&D) spending increased by $214,000 and $826,000 for the fourth quarter and year end December 31, 2020 compared to the same periods in 2019, primarily due to additional hemp development activities and higher employee-related expenses, partially offset by less Verdeca-related costs.
General and administrative (SG&A) expenses for the fourth quarter and year ended December 31, 2020 were $1.6 million and $2.9 million higher than for the fourth quarter and year ended December 31, 2019, primarily the result of additional employee-related expenses, consulting fees and stock compensation expenses, as well as increased marketing and public relations activities.
Cost of product revenues was $1.2 million higher in the fourth quarter of 2020 than in the fourth quarter of 2019 due to the write down of hemp seed and wheat inventory and $4.3 million higher for the year for this reason, along with write-downs in previous quarters resulting from the destruction of hemp biomass and hemp seeds that did not meet quality specifications.
Net Loss Attributable to Common Stockholders
Net income for the fourth quarter of 2020 was $10.0 million, or a gain of $0.90 per share, compared to the $6.2 million loss recognized in the fourth quarter of 2019. Net loss for the year was $4.7 million, or ($0.47) per share, compared to the net loss of $28.8 million in 2019. Annual 2020 included $6.8 million of license revenue and $8.8 million of gain recognized on the sale of Verdeca to Bioceres as part of the transactions with Bioceres executed in the fourth quarter of 2020. There were no similar transactions during 2019. The change in the fair value of the common stock warrant liabilities for the year was a gain of $6.6 million in 2020 compared to a loss of $9.2 million in 2019, the difference driven by a lower ending stock price and fewer warrants outstanding at December 31, 2020 as compared to 2019
Conference Call and Webcast
The company has scheduled a conference call for 4:30 p.m. Eastern (1:30 p.m. Pacific) today, March 30, to discuss fourth-quarter and annual 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 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) 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, applying the company's proprietary crop innovation technology, ArcaTech , 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 the company's long-term financial success and ongoing plans, development and commercialization of products, hemp regulations, the use and adequacy of capital, company traits, 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 company's and its partners' ability to develop and sell 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; the potential impact of COVID-19 on our 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 that will be 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 this information.
Arcadia Biosciences Contact:
Arcadia Biosciences, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
| As of December 31, | ||
| 2020 | 2019 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 14,042 | $ 8,417 |
| Short-term investments | 11,625 | 16,915 |
| Accounts receivable | 1,406 | 602 |
| Inventories, net - current | 3,812 | 1,794 |
| Prepaid expenses and other current assets | 811 | 712 |
| Total current assets | 31,696 | 28,440 |
| Restricted cash | 2,001 | - |
| Property and equipment, net | 3,539 | 1,799 |
| Right of use asset | 5,826 | 1,963 |
| Inventories, net - noncurrent | 3,485 | 364 |
| Goodwill | 408 | - |
| Intangible assets, net | 370 | - |
| Other noncurrent assets | 23 | 8 |
| Total assets | $ 47,348 | $ 32,574 |
| Liabilities and stockholders' equity | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $ 4,105 | $ 4,685 |
| Amounts due to related parties | 80 | 40 |
| Debt - current | 1,141 | 24 |
| Unearned revenue - current | 8 | 42 |
| Operating lease liability - current | 717 | 611 |
| Other current liabilities | 263 | 306 |
| Total current liabilities | 6,314 | 5,708 |
| Debt - noncurrent | 2,105 | 107 |
| Operating lease liability - noncurrent | 5,389 | 1,497 |
| Common stock warrant liabilities | 2,708 | 14,936 |
| Other noncurrent liabilities | 2,280 | 2,000 |
| Total liabilities | 18,796 | 24,248 |
| Stockholders' equity: | ||
| Common stock, $0.001 par value - 150,000,000 shares authorized as of December 31, 2020 and December 31, 2019; 13,450,861 and 8,646,149 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively. | 54 | 49 |
| Additional paid-in capital | 239,496 | 214,826 |
| Accumulated other comprehensive income | - | 1 |
| Accumulated deficit | (211,825) | (207,171) |
| Total Arcadia Biosciences stockholders' equity | 27,725 | 7,705 |
| Non-controlling interest | 827 | 621 |
| Total stockholders' equity | 28,552 | 8,326 |
| Total liabilities and stockholders' equity | $ 47,348 | $ 32,574 |
Arcadia Biosciences, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share data)
| Year Ended December 31, | ||
| 2020 | 2019 | |
| Revenues: | ||
| Product | $ 1,044 | $ 814 |
| License | 6,801 | 67 |
| Royalty | 83 | - |
| Contract research and government grants | 106 | 288 |
| Total revenues | 8,034 | 1,169 |
| Operating expenses (income): | ||
| Cost of product revenues | 5,199 | 885 |
| Research and development | 7,960 | 7,098 |
| Gain on sale of Verdeca | (8,814) | - |
| Change in fair value of contingent consideration | - | (1,000) |
| Selling, general and administrative | 16,467 | 13,567 |
| Total operating expenses | 20,812 | 20,550 |
| Loss from operations | (12,778) | (19,381) |
| Interest expense | (47) | (5) |
| Other income, net | 740 | 466 |
| Change in fair value of common stock warrant liabilities | 6,570 | (9,243) |
| Loss on extinguishment of warrant liability | (635) | - |
| Offering costs | - | (708) |
| Net loss before income taxes | (6,150) | (28,871) |
| Income tax provision | 124 | (2) |
| Net loss | (6,026) | (28,873) |
| Net loss attributable to non-controlling interest | (1,371) | (68) |
| Net loss attributable to common stockholders | $ (4,655) | $ (28,805) |
| Net loss per share attributable to common stockholders: | ||
| Basic and diluted | $ (0.47) | $ (4.53) |
| Weighted-average number of shares used in per share calculations: | ||
| Basic and diluted | 9,959,018 | 6,363,112 |
| Other comprehensive (loss) income, net of tax | ||
| Unrealized (losses) gains on securities | (1) | 1 |
| Other comprehensive (loss) income | (1) | 1 |
| Comprehensive loss attributable to common stockholders | $ (4,656) | $ (28,804) |
Arcadia Biosciences, Inc.
Consolidated Statements of Cash Flows
| Year Ended December 31, | ||
| 2020 | 2019 | |
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Net loss | $ (6,026) | $ (28,873) |
| Adjustments to reconcile net loss to cash used in operating activities: | ||
| Change in fair value of common stock warrant liabilities | (6,570) | 9,243 |
| Change in fair value of contingent consideration | - | (1,000) |
| Offering costs | - | 708 |
| Depreciation | 632 | 194 |
| Amortization of intangible assets | 30 | - |
| Lease amortization | 1,048 | 708 |
| (Gain) Loss on disposal of equipment | (8) | 3 |
| Net amortization of investment premium | (44) | (180) |
| Stock-based compensation | 2,042 | 2,287 |
| Gain on sale of Verdeca | (8,814) | - |
| Corporate securities received in exchange for license agreement | (4,318) | - |
| Unrealized gain on corporate securities | (656) | - |
| Write down of inventory | 4,311 | 304 |
| Loss on extinguishment of warrant liability | 635 | - |
| Deferred income taxes | (107) | - |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (1,119) | (437) |
| Unbilled revenue | - | 3 |
| Inventories | (9,751) | (1,535) |
| Prepaid expenses and other current assets | 39 | (8) |
| Other noncurrent assets | (15) | (1) |
| Accounts payable and accrued expenses | (580) | 2,102 |
| Amounts due to related parties | 40 | 11 |
| Unearned revenue | (34) | (54) |
| Other current liabilities | (43) | 42 |
| Operating lease payments | (910) | (715) |
| Net cash used in operating activities | (30,218) | (17,198) |
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Proceeds from sale of property and equipment | 8 | 16 |
| Purchases of property and equipment | (2,335) | (1,477) |
| Proceeds from sale of Verdeca | 3,153 | - |
| Acquisitions, net of cash acquired | (500) | - |
| Purchases of investments | (1,292) | (28,358) |
| Proceeds from sales and maturities of investments | 18,250 | 21,450 |
| Net cash provided by (used in) investing activities | 17,284 | (8,369) |
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||
| Payments of offering costs relating to June 2018 Offering | - | (24) |
| Proceeds from issuance of common stock and warrants from June 2019 Offering | - | 7,500 |
| Payments of offering costs relating to June 2019 Offering | - | (663) |
| Proceeds from issuance of common stock and warrants from September 2019 Offering | - | 10,000 |
| Payments of offering costs relating to September 2019 Offering | - | (798) |
| Proceeds from issuance of common stock and warrants from December 2020 Offering | 8,000 | - |
| Payments of offering costs relating to December 2020 Offering | (652) | - |
| Proceeds from borrowings | 3,108 | - |
| Payments of transaction costs relating to extinguishment of warrant liability | (863) | - |
| Principal payments on notes payable | (34) | (8) |
| Proceeds from exercise of warrants | 9,372 | 5,269 |
| Proceeds from exercise of stock options and purchases through ESPP | 51 | 21 |
| Capital contributions received from non-controlling interest | 1,578 | 689 |
| Net cash provided by financing activities | 20,560 | 21,986 |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 7,626 | (3,581) |
| Cash, cash equivalents and restricted cash - beginning of period | 8,417 | 11,998 |
| Cash, cash equivalents and restricted cash - end of period | 16,043 | $ 8,417 |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
| Cash paid for interest | 10 | $ 4 |
| Cash paid for taxes | 1 | 2 |
| NONCASH TRANSACTIONS: | ||
| Offering costs in accounts payable and accrued expenses at end of period | - | 20 |
| Shares of common stock issued at closing of ISI transaction | 432 | - |
| Common stock warrants issued to placement agent and included in offering costs related to December 2020 Purchase Agreement | 287 | - |
| Common stock warrants issued to placement agent and included in offering costs related to May 2020 Warrant Transaction | 215 | - |
| Common stock warrants issued to placement agent and included in offering costs related to July 2020 Warrant Transaction | 101 | - |
| Common stock warrants issued to placement agent and included in offering costs related to June 2019 Offering | - | 86 |
| Common stock warrants issued to placement agent and included in offering costs related to September 2019 Offering | - | 95 |
| Reclassification of common stock warrant liability balance with warrant exercises | - | 7,016 |
| Right of use assets obtained in exchange for new operating lease liabilities | 331 | 2,328 |
| Right of use assets obtained through modification of existing lease agreement | 4,207 | 194 |
| Fixed assets acquired with notes payable | 37 | 139 |
| Purchases of fixed assets included in accounts payable and accrued expenses | 71 | 1 |