Full Press Release Details
ARCADIA BIOSCIENCES ANNOUNCES THIRD-QUARTER AND NINE MONTH 2017
FINANCIAL RESULTS AND BUSINESS HIGHLIGHTS
DAVIS, Calif. (November 9, 2017) - 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 2017.
Financial and Operational Highlights
"These tangible financial, operational and market accomplishments reflect the fundamental advances we've made in our growth strategy for building long-term shareholder value," said Raj Ketkar. "Importantly during the quarter, we've further broadened and advanced to market an unparalleled non-GM health and nutritional ingredient products pipeline, and we've jump-started the deregulation and commercialization of two of our leading ag productivity traits, Water- and Nitrogen Use Efficiency in rice and cotton."
Revenues for the quarter were $589,000, 45 percent lower than the $1.1 million for the third quarter of 2016. The quarter-over-quarter decrease was driven by the successful completion of a four-year grant in the second quarter of 2017. For the first nine months of 2017, overall revenues of $2.6 million were consistent with 2016 results.
In the third quarter of 2017, operating expenses totaled $4.2 million, down from $5.0 million in the third quarter of 2016, a decrease of $798,000 or 16 percent. For the first nine months of 2017, operating expenses were $13.9 million, compared to $15.8 million during the same period in 2016, an improvement of 12 percent. Research and development (R&D) spending decreased by $1.4 million, and general and administrative (SG&A) expenses decreased by $472,000. Both expense categories had decreases driven primarily by lower salaries and benefits, mainly the result of workforce reductions made during 2016.
Net Loss and Net Loss Attributable to Common Stockholders
Net loss and net loss attributable to common stockholders for the third quarter of 2017 was $4.5 million, or a loss of $0.11 per share, 8 percent greater than the $4.2 million loss in the third quarter of 2016. Net loss and net loss attributable to common stockholders for the first nine months of 2017 was $12.7 million, or a loss of $0.29 per share, an 8 percent improvement from the $13.9 million loss in the first nine months of 2016.
In July 2017, the Company repaid its outstanding term loan with Silicon Valley Bank, including the principal balance of $25.0 million, an early prepayment fee of $500,000 and an end-of-term payment fee of $625,000. Accordingly, a nonrecurring loss on extinguishment of debt in the amount of $900,000 was recorded and comprises the $1.125 million of fees and $41,000 of deferred loan issuance fees, partially offset by $267,000 of previously amortized end-of-term fees. As a result of the early termination of the facility, management estimates the company will save a total of $2.0 million in cash interest payments over the remaining term of the original facility.
Management continues to target overall revenue growth in 2017 compared to the prior year, led primarily by an expected increase in license revenues. Expenses are expected to hold steadily below prior year, while the company maintains healthy investments in the development and commercialization of its pipeline traits. Management believes these trends will result in a meaningful reduction in the use of cash from operations versus the prior year while continuing to advance its key productivity and nutrition ingredient traits to market.
Conference Call and Webcast
The company has scheduled a conference call for 4:30 p.m. Eastern (1:30 p.m. Pacific) today, November 9, to discuss third-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: | 6269659 |
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; 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 Annual Report on Form 10-K for the year ended December 31, 2016. These documents are on the SEC Filings section of the "Investors" section 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., Arcadia Biosciences (Nasdaq: RKDA) develops agricultural products that create added value for farmers, enhance human health and improve the environmental sustainability of agriculture. Arcadia's nutrition traits and products are aimed at creating healthier ingredients and whole foods with lower production costs. 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. For more information, visit www.arcadiabio.com.
Arcadia Biosciences, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
| September 30, 2017 | December 31, 2016 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 2,930 | $ | 2,013 | ||||
| Short-term investments | 12,767 | 48,547 | ||||||
| Accounts receivable | 73 | 349 | ||||||
| Unbilled revenue | 61 | 184 | ||||||
| Inventories - current | 236 | 252 | ||||||
| Prepaid expenses and other current assets | 1,099 | 877 | ||||||
| Total current assets | 17,166 | 52,222 | ||||||
| Property and equipment, net | 369 | 508 | ||||||
| Inventories - noncurrent | 1,179 | 1,327 | ||||||
| Long-term investments | - | 2,498 | ||||||
| Other noncurrent assets | 264 | 19 | ||||||
| Total assets | $ | 18,978 | $ | 56,574 | ||||
| Liabilities and stockholders' equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 1,863 | $ | 2,359 | ||||
| Amounts due to related parties | 31 | 30 | ||||||
| Unearned revenue - current | 626 | 740 | ||||||
| Total current liabilities | 2,520 | 3,129 | ||||||
| Notes payable - noncurrent | - | 25,127 | ||||||
| Unearned revenue - noncurrent | 2,791 | 3,120 | ||||||
| Other noncurrent liabilities | 3,000 | 3,000 | ||||||
| Total liabilities | 8,311 | 34,376 | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.001 par value-150,000,000 and 400,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 42,683,063 and 44,487,678 shares issued and outstanding as of September 30, 2017 and December 31, 2016 | 43 | 44 | ||||||
| Additional paid-in capital | 174,925 | 173,723 | ||||||
| Accumulated deficit | (164,297 | ) | (151,550 | ) | ||||
| Accumulated other comprehensive loss | (4 | ) | (19 | ) | ||||
| Total stockholders' equity | 10,667 | 22,198 | ||||||
| Total liabilities and stockholders' equity | $ | 18,978 | $ | 56,574 |
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, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues: | ||||||||||||||||
| Product | $ | 82 | $ | 102 | $ | 482 | $ | 422 | ||||||||
| License | 144 | 218 | 353 | 510 | ||||||||||||
| Contract research and government grants | 363 | 755 | 1,763 | 1,716 | ||||||||||||
| Total revenues | 589 | 1,075 | 2,598 | 2,648 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of product revenues | 40 | 60 | 262 | 242 | ||||||||||||
| Research and development | 1,749 | 2,255 | 5,241 | 6,673 | ||||||||||||
| Selling, general and administrative | 2,415 | 2,687 | 8,410 | 8,882 | ||||||||||||
| Total operating expenses | 4,204 | 5,002 | 13,913 | 15,797 | ||||||||||||
| Loss from operations | (3,615 | ) | (3,927 | ) | (11,315 | ) | (13,149 | ) | ||||||||
| Interest expense | (43 | ) | (331 | ) | (747 | ) | (985 | ) | ||||||||
| Other income, net | 46 | 90 | 246 | 242 | ||||||||||||
| Loss on extinguishment of debt | (900 | ) | - | (900 | ) | - | ||||||||||
| Net loss before income taxes | (4,512 | ) | (4,168 | ) | (12,716 | ) | (13,892 | ) | ||||||||
| Income tax provision | (13 | ) | (7 | ) | (31 | ) | (24 | ) | ||||||||
| Net loss and net loss attributable to common stockholders | $ | (4,525 | ) | $ | (4,175 | ) | $ | (12,747 | ) | $ | (13,916 | ) | ||||
| Net loss per share attributable to common stockholders: | ||||||||||||||||
| Basic and diluted | $ | (0.11 | ) | $ | (0.09 | ) | $ | (0.29 | ) | $ | (0.31 | ) | ||||
| Weighted-average number of shares used in per share calculations: | ||||||||||||||||
| Basic and diluted | 42,676,916 | 44,370,061 | 43,272,083 | 44,336,324 | ||||||||||||
| Other comprehensive income (loss), net of tax | ||||||||||||||||
| Unrealized gains (loss) on available-for-sale securities | 8 | (1 | ) | 14 | 108 | |||||||||||
| Other comprehensive income (loss) | 8 | (1 | ) | 14 | 108 | |||||||||||
| Comprehensive loss attributable to common stockholders | $ | (4,517 | ) | $ | (4,176 | ) | $ | (12,733 | ) | $ | (13,808 | ) |
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of Cash Flows
| Nine Months Ended September 30, | ||||||||
| 2017 | 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (12,747 | ) | $ | (13,916 | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Depreciation and amortization | 215 | 227 | ||||||
| Gain on disposal of equipment | (3 | ) | - | |||||
| Net amortization of investment premium and discount | (82 | ) | 115 | |||||
| Loss on sale of investments | 2 | - | ||||||
| Stock-based compensation | 1,177 | 661 | ||||||
| Accretion of debt discount | 98 | 148 | ||||||
| Loss on extinguishment of debt | 900 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 276 | 609 | ||||||
| Unbilled revenue | 123 | (62 | ) | |||||
| Inventories | 164 | (32 | ) | |||||
| Prepaid expenses and other current assets | (222 | ) | (492 | ) | ||||
| Other noncurrent assets | (245 | ) | 4 | |||||
| Accounts payable and accrued expenses | (496 | ) | 237 | |||||
| Amounts due to related parties | 1 | - | ||||||
| Unearned revenue | (443 | ) | (277 | ) | ||||
| Net cash used in operating activities | (11,282 | ) | (12,778 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from sale of property and equipment | 4 | - | ||||||
| Purchases of property and equipment | (77 | ) | (222 | ) | ||||
| Purchases of investments | (19,405 | ) | (21,129 | ) | ||||
| Proceeds from sales and maturities of investments | 57,778 | 20,247 | ||||||
| Net cash provided by (used in) investing activities | 38,300 | (1,104 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Payments of debt issuance costs | - | (46 | ) | |||||
| Payments of debt extinguishment costs | (1,125 | ) | - | |||||
| Payments on notes payable | (25,000 | ) | - | |||||
| Proceeds from exercise of stock options and ESPP purchases | 24 | 428 | ||||||
| Net cash (used in) provided by financing activities | (26,101 | ) | 382 | |||||
| Net increase (decrease) in cash and cash equivalents | 917 | (13,500 | ) | |||||
| Cash and cash equivalents - beginning of period | 2,013 | 23,973 | ||||||
| Cash and cash equivalents - end of period | $ | 2,930 | $ | 10,473 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | 746 | $ | 755 | ||||
| Cash paid for income taxes | $ | 2 | $ | 2 | ||||
| NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Purchases of property and equipment included in accounts payable and accrued expenses | $ | 2 | $ | - | ||||
| Exchange of membership interest in unconsolidated entity for common stock | $ | 2 | $ | - | ||||
| Stock option exercise cost included in accounts receivable | $ | - | $ | 6 |