Arcadia Biosciences (RKDA) Announces Strong Third-Quarter Financial Results and Business Highlights
Arcadia Biosciences, Inc. (Nasdaq: RKDA) reported significant growth in Q3 2021 with revenues soaring to $2.4 million, a 657% increase from $314,000 in Q3 2020. The nine-month revenue grew to $4.6 million, a 410% rise from the previous year. This growth was attributed to the newly acquired wellness brands and increased sales of GoodHemp and GoodWheat products. However, total operating expenses also rose to $11.1 million, leading to a net loss of $2.2 million, down from $6.4 million a year earlier. The company is set for a full launch of its GoodWheat pasta line in Q1 2022.
- Q3 2021 revenues of $2.4 million, up 657% year-over-year.
- Nine-month revenues reached $4.6 million, a 410% increase.
- 80% increase in distribution of body care products compared to Q3 2020.
- Successful harvest of over 20,000 lbs. of Hawaiian hemp biomass.
- Operating expenses increased by 40% in Q3 2021 compared to Q3 2020.
- Net loss of $2.2 million for Q3 2021, despite reduction from prior year.
DAVIS, Calif., Nov. 15, 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 third quarter of 2021.
"Our third quarter was a continuation of the exciting momentum Arcadia has generated since the beginning of the year, as we again produced strong financial results that further validate our successful transformation into a consumer products company," said Matt Plavan, CEO of Arcadia. "The quarter also was marked by a heightened intensity of focus, building on the significant progress we have made in capacity-building, integration and alignment of resources.
"To help ensure the positive trajectory continues, we've been persistent – with our expanded bench of CPG talent in place – in honing our focus, further refining our go-to-market strategies for 2022 and identifying ways to accelerate our path forward," he added.
Q3 and Recent Operating and Business Highlights
- Arcadia Expands Distribution of Body Care Products. The company significantly expanded its distribution of body care products compared to the prior year third quarter, which bodes well for continued retail growth. We estimate that distribution for our three body care brands expanded by nearly
80% compared to the prior year, primarily driven by the launch of ProVaultTM in Q1 2021.
In addition, a new ProVault site – getprovault.com – went live in October, supported by a digital marketing and advertising campaign. Two remaining product sites are expected to launch by the end of the year, including the rebranded e-commerce sites for Saavy Naturals® (saavynaturals.com) and SoulSpringTM (mysoulspring.com).
- Arcadia Advances Plans for GoodWheatTM Launch. A full-scale launch of five pasta SKUs supported by a comprehensive, consumer-focused marketing campaign will launch in Q1 of 2022, rather than a soft launch of one SKU in December 2021. As part of this effort, the company has made meaningful progress preparing GoodWheat pasta products for entrée into the consumer retail channel, including developing and testing consumer-preferred packaging.
- Arcadia Successfully Harvests Hawaiian Hemp Biomass. Arcadia successfully harvested more than 20,000 lbs. of Hawaiian hemp biomass. The company is currently processing the biomass and expects the resulting output to be the largest supply of Hawaiian CBD on the market today. An analysis of options to optimally monetize this asset is currently underway in cooperation with our partner in Archipelago Ventures.
Arcadia Biosciences, Inc. | |||||||||
Financial Snapshot | |||||||||
(Unaudited) | |||||||||
($ in thousands) | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||
2021 | 2020 | Favorable/ |
2021 | 2020 | Favorable/ | ||||
$ | % | $ | % | ||||||
Total revenues | 2,376 | 314 | 2,062 | 4,609 | 904 | 3,705 | |||
Total operating expenses | 11,089 | 7,895 | (3,194) | ( | 26,331 | 21,151 | (5,180) | ( | |
Loss from operations | (8,713) | (7,581) | (1,132) | ( | (21,722) | (20,247) | (1,475) | ( | |
Net loss attributable to | (2,175) | (6,391) | 4,216 | (5,378) | (13,553) | 8,175 | |||
Revenues
In the third quarter of 2021, revenues were
Operating Expenses
In the third quarter of 2021, total operating expenses were
Cost of product revenues in the third quarter of 2021 were
Research and development (R&D) expense decreased by
A write-down of fixed assets in the amount of
General and administrative (SG&A) costs for the quarter and nine months ended September 30, 2021 were
Net Loss Attributable to Common Stockholders
Net loss attributable to common stockholders for the third quarter of 2021 was
Net loss attributable to common stockholders for the first nine months of 2021 was
Conference Call and Webcast
The company has scheduled a conference call for 4:30 p.m. Eastern (1:30 p.m. Pacific) today, November 15, 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: | 9543419 |
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, which include GoodWheat™, 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 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, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
(Unaudited) | ||||||||
(In thousands, except share data) | ||||||||
September 30, | December 31, | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 35,526 | $ | 14,042 | ||||
Short-term investments | — | 11,625 | ||||||
Accounts receivable | 1,453 | 1,406 | ||||||
Inventories, net — current | 5,447 | 3,812 | ||||||
Prepaid expenses and other current assets | 1,408 | 811 | ||||||
Total current assets | 43,834 | 31,696 | ||||||
Restricted cash | — | 2,001 | ||||||
Property and equipment, net | 2,634 | 3,539 | ||||||
Right of use asset | 3,486 | 5,826 | ||||||
Inventories, net — noncurrent | 3,539 | 3,485 | ||||||
Goodwill | 1,648 | 408 | ||||||
Intangible assets, net | 3,905 | 370 | ||||||
Other noncurrent assets | 182 | 23 | ||||||
Total assets | $ | 59,228 | $ | 47,348 | ||||
Liabilities and stockholders' equity | ||||||||
Current liabilities: | ||||||||
Accounts payable and accrued expenses | $ | 5,004 | $ | 4,105 | ||||
Amounts due to related parties | 51 | 80 | ||||||
Debt — current | 36 | 1,141 | ||||||
Unearned revenue — current | — | 8 | ||||||
Operating lease liability — current | 1,134 | 717 | ||||||
Other current liabilities | 264 | 263 | ||||||
Total current liabilities | 6,489 | 6,314 | ||||||
Debt — noncurrent | 78 | 2,105 | ||||||
Operating lease liability — noncurrent | 2,562 | 5,389 | ||||||
Common stock warrant liabilities | 7,736 | 2,708 | ||||||
Other noncurrent liabilities | 2,140 | 2,280 | ||||||
Total liabilities | 19,005 | 18,796 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Common stock, | 63 | 54 | ||||||
Additional paid-in capital | 257,009 | 239,496 | ||||||
Accumulated other comprehensive income | (24) | — | ||||||
Accumulated deficit | (217,203) | (211,825) | ||||||
Total Arcadia Biosciences stockholders' equity | 39,845 | 27,725 | ||||||
Non-controlling interest | 378 | 827 | ||||||
Total stockholders' equity | 40,223 | 28,552 | ||||||
Total liabilities and stockholders' equity | $ | 59,228 | $ | 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 | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenues: | ||||||||||||||||
Product | $ | 2,324 | $ | 245 | $ | 4,506 | $ | 630 | ||||||||
License | 17 | 10 | 17 | 110 | ||||||||||||
Royalty | 35 | 16 | 86 | 58 | ||||||||||||
Contract research and government grants | — | 43 | — | 106 | ||||||||||||
Total revenues | 2,376 | 314 | 4,609 | 904 | ||||||||||||
Operating expenses: | ||||||||||||||||
Cost of product revenues | 2,511 | 1,841 | 4,954 | 3,463 | ||||||||||||
Research and development | 1,038 | 1,762 | 3,328 | 5,999 | ||||||||||||
Impairment of intangible assets | 120 | — | 120 | — | ||||||||||||
Change in fair value of contingent consideration | — | — | (140) | — | ||||||||||||
Write-down of fixed assets | 1,108 | — | 1,319 | — | ||||||||||||
Selling, general and administrative | 6,312 | 4,292 | 16,750 | 11,689 | ||||||||||||
Total operating expenses | 11,089 | 7,895 | 26,331 | 21,151 | ||||||||||||
Loss from operations | (8,713) | (7,581) | (21,722) | (20,247) | ||||||||||||
Interest expense | (15) | (23) | (23) | (32) | ||||||||||||
Other (expense) income, net | (7) | — | 10,214 | 83 | ||||||||||||
Change in fair value of common stock warrant liabilities | 4,777 | 1,130 | 4,601 | 6,212 | ||||||||||||
Loss on extinguishment of warrant liability | — | (682) | — | (635) | ||||||||||||
Gain on extinguishment of PPP loan | 1,123 | — | 1,123 | — | ||||||||||||
Issuance and offering costs | — | — | (769) | — | ||||||||||||
Net loss before income taxes | (2,835) | (7,156) | (6,576) | (14,619) | ||||||||||||
Income tax provision | (1) | (9) | (1) | (15) | ||||||||||||
Net loss | (2,836) | (7,165) | (6,577) | (14,634) | ||||||||||||
Net loss attributable to non-controlling interest | (661) | (774) | (1,199) | (1,081) | ||||||||||||
Net loss attributable to common stockholders | $ | (2,175) | $ | (6,391) | $ | (5,378) | $ | (13,553) | ||||||||
Net loss per share attributable to common stockholders: | ||||||||||||||||
Basic and diluted | $ | (0.10) | $ | (0.60) | $ | (0.26) | $ | (1.42) | ||||||||
Weighted-average number of shares used in per share | ||||||||||||||||
Basic and diluted | 22,177,423 | 10,719,618 | 20,976,105 | 9,570,259 | ||||||||||||
Other comprehensive loss, net of tax | ||||||||||||||||
Unrealized losses on investment securities | — | — | — | (1) | ||||||||||||
Foreign currency translation adjustment | (12) | — | (24) | — | ||||||||||||
Other comprehensive loss | (12) | — | (24) | (1) | ||||||||||||
Comprehensive loss attributable to common stockholders | $ | (2,187) | $ | (6,391) | $ | (5,402) | $ | (13,554) | ||||||||
Arcadia Biosciences, Inc. | ||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Nine Months Ended September 30, | ||||||||
2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (6,577) | $ | (14,634) | ||||
Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
Change in fair value of common stock warrant liabilities | (4,601) | (6,212) | ||||||
Loss (gain) on extinguishment of warrant liability | — | 635 | ||||||
Change in fair value of contingent consideration | (140) | — | ||||||
Issuance and offering costs | 769 | — | ||||||
Depreciation | 737 | 395 | ||||||
Amortization of intangible assets | 99 | — | ||||||
Lease amortization | 914 | 745 | ||||||
Impairment of intangible assets | 120 | — | ||||||
Loss (gain) on disposal of fixed assets | 17 | (8) | ||||||
Net amortization of investment premium | — | (44) | ||||||
Stock-based compensation | 1,035 | 1,844 | ||||||
Realized gain on corporate securities | (10,222) | — | ||||||
Write-down of fixed assets | 1,319 | — | ||||||
Write-down of inventory and prepaid production costs | 1,802 | 3,063 | ||||||
Gain on extinguishment of PPP loan | (1,123) | — | ||||||
Changes in operating assets and liabilities: | — | — | ||||||
Accounts receivable | (47) | 229 | ||||||
Inventories | (2,651) | (9,609) | ||||||
Prepaid expenses and other current assets | (452) | (1,157) | ||||||
Other noncurrent assets | (159) | (15) | ||||||
Accounts payable and accrued expenses | 972 | 2,026 | ||||||
Amounts due to related parties | (29) | (11) | ||||||
Unearned revenue | (8) | (42) | ||||||
Other current liabilities | 1 | (43) | ||||||
Operating lease payments | (984) | (629) | ||||||
Net cash used in operating activities | (19,208) | (23,467) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Proceeds from sale of property and equipment | 2 | 8 | ||||||
Purchases of property and equipment | (919) | (2,038) | ||||||
Acquisitions, net of cash acquired | (4,250) | (500) | ||||||
Purchases of investments | — | (1,292) | ||||||
Proceeds from sales and maturities of investments | 21,845 | 18,250 | ||||||
Net cash provided by investing activities | 16,678 | 14,428 | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from issuance of common stock and warrants from January 2021 | 25,147 | — | ||||||
Payments of offering costs relating to January 2021 PIPE securities | (1,912) | — | ||||||
Proceeds from the exercise of warrants | 22 | 9,372 | ||||||
Proceeds from borrowings | — | 3,108 | ||||||
Payment of transaction costs relating to extinguishment of warrant liability | — | (863) | ||||||
Principal payments on debt | (2,032) | (26) | ||||||
Proceeds from ESPP purchases | 39 | 51 | ||||||
Capital contributions received from non-controlling interest | 750 | 1,182 | ||||||
Net cash provided by financing activities | 22,014 | 12,824 | ||||||
Effects of foreign currency translation on cash and cash equivalents | (1) | — | ||||||
Net increase in cash, cash equivalents and restricted cash | 19,483 | 3,785 | ||||||
Cash, cash equivalents and restricted cash — beginning of period | 16,043 | 8,417 | ||||||
Cash, cash equivalents and restricted cash — end of period | $ | 35,526 | $ | 12,202 | ||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
Cash paid for income taxes | $ | 1 | $ | 1 | ||||
Cash paid for interest | $ | 25 | $ | 7 | ||||
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Fixed assets acquired with notes payable | $ | — | $ | 37 | ||||
Common stock warrants issued to placement agent and included in offering | $ | — | $ | 215 | ||||
Common stock warrants issued to placement agent and included in offering | $ | — | $ | 101 | ||||
Shares of common stock issued at closing of Arcadia Wellness transaction | $ | 2,053 | $ | — | ||||
Common stock warrants issued to placement agent and included in offering | $ | 942 | $ | — | ||||
Right of use assets obtained in exchange for new operating lease liabilities | $ | 1,662 | $ | 4,157 | ||||
Purchases of fixed assets included in accounts payable and accrued | $ | — | $ | — | ||||
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SOURCE Arcadia Biosciences, Inc.
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