Full Press Release Details
ARCADIA BIOSCIENCES ANNOUNCES THIRD-QUARTER 2016
FINANCIAL RESULTS AND BUSINESS HIGHLIGHTS
DAVIS, Calif. (November 10, 2016) - Arcadia Biosciences, Inc. (Nasdaq: RKDA), an agricultural technology company that creates value for farmers while benefitting the environment and enhancing human health, today released its financial and business results for the third quarter of 2016.
The company's loss from operations was $3.9 million in the third quarter of 2016 compared to $4.2 million in the third quarter of 2015. Net loss attributable to common stockholders in the third quarter of 2016 was $4.2 million, compared to $4.6 million in the comparable period in 2015.
Cash on hand and liquid investments at the end of the third quarter totaled $57.4 million.
"I'm pleased to report that Arcadia advanced several pipeline traits this quarter with the completion of current season field trials in corn hybrids and wheat, as well as USDA and FDA regulatory submissions for HB4 stress tolerant soybeans," said Raj Ketkar, President and CEO. "In addition, we made substantial progress in our comprehensive pipeline review, which will result in a realignment of our priorities, a refined focus on near-term revenue and continued optimization in our cost structure."
Business and Technology Highlights
Arcadia made the following business and technical achievements in the third quarter of 2016:
Since the close of the third quarter, Arcadia has announced the following:
Arcadia Biosciences, Inc.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2016 | 2015 | % Favorable/ | 2016 | 2015 | % Favorable/ | |||||||||||||||||||||
| (Unfavorable) | (Unfavorable) | |||||||||||||||||||||||||
| Total Revenues | 1,075 | 1,823 | (41 | )% | 2,648 | 4,068 | (35 | )% | ||||||||||||||||||
| Total Operating Expenses | 5,002 | 6,058 | (17 | )% | 15,797 | 15,561 | (2 | )% | ||||||||||||||||||
| Loss From Operations | (3,927 | ) | (4,235 | ) | 7 | % | (13,149 | ) | (11,493 | ) | (14 | )% | ||||||||||||||
| Net Loss | (4,175 | ) | (4,619 | ) | 10 | % | (13,916 | ) | (14,099 | ) | 1 | % | ||||||||||||||
| Net Loss Attributable to Common Stockholders | (4,175 | ) | (4,619 | ) | 10 | % | (13,916 | ) | (16,870 | ) | 18 | % |
In the third quarter of 2016, revenues were $1.1 million, compared to revenues of $1.8 million in the third quarter of 2015. The quarter-over-quarter results were impacted by the conclusion of certain contract research and government grant projects in 2015. For the first nine months of 2016, overall revenues decreased to $2.6 million from $4.1 million, also as a result of completed contracts and grants in 2015, as well as accelerated revenue recognition associated with the discontinuation of certain license agreements.
In the third quarter of 2016, operating expenses were $5.0 million, as compared to $6.1 million in the third quarter of 2015. For the first nine months of 2016, operating expenses were $15.8 million, compared to $15.6 million during the same period in 2015. Research and development (R&D) spending decreased by $424,000 in the first nine months of 2016, as a result of reduced subcontract work pertaining to contract research and government grant agreements. General and administrative (SG&A) expenses increased by $641,000 during the same period, primarily as a result of severance costs incurred earlier in the year.
Net loss for the third quarter of 2016 was $4.2 million, compared to $4.6 million for the third quarter of 2015. Net loss for the first nine months of 2016 was $13.9 million, compared to $14.1 million for the first nine months of 2015. The net loss in the first nine months of 2015 included the effect of higher interest expense, and also was impacted by non-cash adjustments to the value of financing-related derivatives. Additionally, the 2015 net loss included the effect of a higher income tax provision.
Net Loss Attributable to Common Stockholders
Net loss attributable to common stockholders for the third quarter of 2016 was $4.2 million, comparable to $4.6 million in 2015. Net loss attributable to common stockholders for the first nine months of 2016 was $13.9 million, compared to $16.9 million for the same period in 2015. The net loss attributable to stockholders for the first nine months of 2015 included adjustments associated with preferred share financing redemption rights and deemed dividends to a warrant holder.
Per share net loss attributable to common stockholders for the third quarter of 2016 was 9 cents, compared to 11 cents for the third quarter of 2015, and 31 cents for the first nine months of 2016, compared to 72 cents for the first nine months of 2015. The number of shares outstanding used to calculate the per-share losses attributable to common stockholders for each period is weighted and reflects the company's change from a private to a public company in May 2015.
Conference Call and Webcast
The company has scheduled a conference call for 4:30 p.m. Eastern (1:30 p.m. Pacific) to discuss third-quarter and year-to-date 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: | 4680955 |
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.
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 components of the company's long-term financial success and ongoing plans; the company's traits, commercial products, and collaborations; and the company's ability to manage the regulatory processes for its traits and commercial products. 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 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; 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" in the company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 and additional information that will be set forth in its Form 10-Q for the quarter ended September 30, 2016. These documents are or will be available on the SEC Filings section of the Investor Relations pages of the company's website at www.arcadiabio.com. All information provided in this release and in the attachments is as of the date hereof, and Arcadia Biosciences, Inc. undertakes no duty to update this information.
About Arcadia Biosciences, Inc.
Based in Davis, Calif., with additional facilities in Seattle, Wash. and Phoenix, Ariz., Arcadia Biosciences (Nasdaq: RKDA) develops agricultural products that create added value for farmers while benefitting the environment and enhancing human health. Arcadia's agronomic performance traits, including Nitrogen Use Efficiency, Water Use Efficiency, Salinity Tolerance, Heat Tolerance and Herbicide Tolerance, are all aimed at making agricultural production more economically efficient and environmentally sound. Arcadia's nutrition traits and products are aimed at creating healthier ingredients and whole foods with lower production costs. The company was previously listed in the Global Cleantech 100 and has been named one of MIT Technology Review's 50 Smartest Companies. For more information, visit www.arcadiabio.com.
Arcadia Biosciences, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
| September 30, 2016 | December 31, 2015 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 10,473 | $ | 23,973 | ||||
| Short-term investments | 43,413 | 26,270 | ||||||
| Accounts receivable | 97 | 706 | ||||||
| Unbilled revenue | 144 | 82 | ||||||
| Inventories - current | 360 | 294 | ||||||
| Prepaid expenses and other current assets | 1,188 | 692 | ||||||
| Total current assets | 55,675 | 52,017 | ||||||
| Property and equipment, net | 580 | 585 | ||||||
| Inventories - noncurrent | 1,832 | 1,867 | ||||||
| Long-term investments | 3,479 | 19,748 | ||||||
| Other noncurrent assets | 20 | 25 | ||||||
| Total assets | $ | 61,586 | $ | 74,242 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 2,610 | $ | 2,423 | ||||
| Amounts due to related parties | 19 | 19 | ||||||
| Unearned revenue - current | 1,196 | 1,008 | ||||||
| Total current liabilities | 3,825 | 3,450 | ||||||
| Notes payable | 25,077 | 24,930 | ||||||
| Unearned revenue - noncurrent | 2,173 | 2,637 | ||||||
| Other noncurrent liabilities | 3,000 | 3,000 | ||||||
| Total liabilities | 34,075 | 34,017 | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.001 par value-400,000,000 shares authorized as of September 30, 2016 and December 31, 2015; 44,479,267 and 44,184,195 shares issued and outstanding as of September 30, 2016 and December 31, 2015 | 44 | 44 | ||||||
| Additional paid-in capital | 173,316 | 172,222 | ||||||
| Accumulated deficit | (145,842 | ) | (131,926 | ) | ||||
| Accumulated other comprehensive loss | (7 | ) | (115 | ) | ||||
| Total stockholders' equity | 27,511 | 40,225 | ||||||
| Total liabilities and stockholders' equity | $ | 61,586 | $ | 74,242 |
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product | $ | 102 | $ | 123 | $ | 422 | $ | 383 | ||||||||
| License | 218 | 214 | 510 | 773 | ||||||||||||
| Contract research and government grants | 755 | 1,486 | 1,716 | 2,912 | ||||||||||||
| Total revenues | 1,075 | 1,823 | 2,648 | 4,068 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of product revenues | 60 | 61 | 242 | 223 | ||||||||||||
| Research and development | 2,255 | 3,179 | 6,673 | 7,097 | ||||||||||||
| Selling, general and administrative | 2,687 | 2,818 | 8,882 | 8,241 | ||||||||||||
| Total operating expenses | 5,002 | 6,058 | 15,797 | 15,561 | ||||||||||||
| Loss from operations | (3,927 | ) | (4,235 | ) | (13,149 | ) | (11,493 | ) | ||||||||
| Interest expense | (331 | ) | (766 | ) | (985 | ) | (2,008 | ) | ||||||||
| Other income (expense), net | 90 | 285 | 242 | (376 | ) | |||||||||||
| Net loss before income taxes | (4,168 | ) | (4,716 | ) | (13,892 | ) | (13,877 | ) | ||||||||
| Income tax benefit (provision) | (7 | ) | 97 | (24 | ) | (222 | ) | |||||||||
| Net loss | (4,175 | ) | (4,619 | ) | (13,916 | ) | (14,099 | ) | ||||||||
| Accretion of redeemable convertible preferred stock to redemption value | - | - | - | (2,574 | ) | |||||||||||
| Deemed dividends to warrant holder | - | - | - | (197 | ) | |||||||||||
| Net loss attributable to common stockholders | $ | (4,175 | ) | $ | (4,619 | ) | $ | (13,916 | ) | $ | (16,870 | ) | ||||
| Net loss per share attributable to common stockholders: | ||||||||||||||||
| Basic and diluted | $ | (0.09 | ) | $ | (0.11 | ) | $ | (0.31 | ) | $ | (0.72 | ) | ||||
| Weighted-average number of shares used in per share calculations: | ||||||||||||||||
| Basic and diluted | 44,370,061 | 43,647,180 | 44,336,324 | 23,318,262 | ||||||||||||
| Other comprehensive income (loss), net of tax | ||||||||||||||||
| Unrealized gains (losses) on available-for-sale securities | (1 | ) | - | 108 | - | |||||||||||
| Other comprehensive income (loss) | (1 | ) | - | 108 | - | |||||||||||
| Comprehensive loss attributable to common stockholders | $ | (4,176 | ) | $ | (4,619 | ) | $ | (13,808 | ) | $ | (16,870 | ) |
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of Cash Flows
| Nine Months Ended September 30, | ||||||||
| 2016 | 2015 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (13,916 | ) | $ | (14,099 | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Depreciation and amortization | 227 | 210 | ||||||
| Net amortization of investment premium | 115 | - | ||||||
| Stock-based compensation | 661 | 1,205 | ||||||
| Change in fair value of derivative liabilities related to convertible promissory notes | - | 845 | ||||||
| Gain on expiration of warrant and derivative liability related to notes payable upon IPO | - | (437 | ) | |||||
| Accretion of debt discount | 148 | 589 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 609 | 357 | ||||||
| Unbilled revenue | (62 | ) | (51 | ) | ||||
| Inventories | (32 | ) | (157 | ) | ||||
| Prepaid expenses and other current assets | (492 | ) | (375 | ) | ||||
| Other noncurrent assets | 4 | (43 | ) | |||||
| Accounts payable and accrued expenses | 237 | 1,676 | ||||||
| Amounts due to related parties | - | (41 | ) | |||||
| Unearned revenue | (277 | ) | (842 | ) | ||||
| Net cash used in operating activities | (12,778 | ) | (11,163 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (222 | ) | (80 | ) | ||||
| Purchases of investments | (21,129 | ) | (11,290 | ) | ||||
| Proceeds from sales and maturities of investments | 20,247 | - | ||||||
| Net cash used in investing activities | (1,104 | ) | (11,370 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock upon IPO | - | 68,226 | ||||||
| Payments of IPO issuance costs | - | (8,054 | ) | |||||
| Proceeds from issuance of notes payable | - | 20,000 | ||||||
| Payments of debt issuance costs | (46 | ) | (290 | ) | ||||
| Proceeds from exercise of stock options and ESPP purchases | 428 | 168 | ||||||
| Payments on notes payable to related party | - | (8,000 | ) | |||||
| Payments on notes payable and convertible promissory notes | - | (3,122 | ) | |||||
| Net cash provided by financing activities | 382 | 68,928 | ||||||
| Net increase (decrease) in cash and cash equivalents | (13,500 | ) | 46,395 | |||||
| Cash and cash equivalents - beginning of period | 23,973 | 16,571 | ||||||
| Cash and cash equivalents - end of period | $ | 10,473 | $ | 62,966 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | 755 | $ | 1,411 | ||||
| Cash paid for income taxes | $ | 2 | $ | 149 | ||||
| NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Accretion of redeemable convertible preferred stock | $ | - | $ | 2,574 | ||||
| Deferred offering costs included in accounts payable and accrued expenses | $ | - | $ | 155 | ||||
| Purchases of property and equipment included in accounts payable and accrued expenses | $ | - | $ | 1 | ||||
| Reclassification of deferred IPO costs to equity | $ | - | $ | 5,026 | ||||
| Deemed dividend to common stock warrant holder | $ | - | $ | 197 | ||||
| Issuance of warrants and derivatives in connection with notes payable issuance | $ | - | $ | 437 | ||||
| Stock option exercise cost included in accounts receivable | $ | 6 | $ | 19 | ||||
| Conversion of preferred stock to common stock upon IPO | $ | - | $ | 85,455 |