Arcadia Biosciences Announces Third-Quarter 2016 Financial Results and Business Highlights
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 of Arcadia. “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:
- HB4 stress tolerant soybean regulatory progress. Through its Verdeca
joint venture with Bioceres, Arcadia submitted regulatory dossiers to the USDA and FDA and initiated regulatory studies to
support planned submissions in China and Europe.
- Arcadia expands production of Resistant Starch wheat. Arcadia advanced
product and agronomic testing of its Resistant Starch wheat materials. This non-GM product is expected to play an important role
in the development of high fiber, low glycemic index foods to combat global health issues of diabetes and obesity, and the
product is currently being evaluated by multiple ingredient and consumer packaged goods companies.
- Corn yield and stress trait development with Dow AgroSciences. The third
season of field trials in corn was completed, with multiple candidates showing promise. Data analysis is underway to identify the
most promising elite lines to advance into additional field testing.
- SONOVA GLA use in pet food. Arcadia is actively engaged with the FDA on
its regulatory submission for GLA safflower oil use in pet food, which, upon approval, is expected to open a new market for its
highly concentrated SONOVA GLA product.
- Arcadia names new CFO. Matthew Plavan joined the company as chief
financial officer on September 12, 2016. Plavan brings nearly 30 years of financial and executive leadership experience to
Arcadia in the areas of business operations, fiscal management and strategy, commercial partnering, M&A and integration
activities, and public and private equity fundraising. Most recently, Plavan served in multiple executive capacities, including
CFO, COO and CEO with Cesca Therapeutics, Inc. (Nasdaq: KOOL), a company engaged in research, development and commercialization
of autologous cell-based therapeutics.
Since the close of the third quarter, Arcadia has announced the following:
- Verdeca submits regulatory dossier for HB4 soybeans in China. Through
its Verdeca joint venture with Bioceres, Arcadia submitted a regulatory dossier in China for import approval of HB4 stress
tolerant soybeans. The trait has received regulatory approval in Argentina, with additional approvals pending in Uruguay and the
U.S.
- Kevin Comcowich joins board of directors. Experienced business and
financial executive Kevin Comcowich joined Arcadia’s board of directors on October 30, 2016. Comcowich most recently served as
the CEO and portfolio manager of HTX Energy Fund in Houston, Texas and has extensive experience in investment management and
global capital market strategies. He will serve as an independent director and member of the audit committee.
- Chief scientific officer plans to retire. Vic Knauf, Arcadia’s chief
scientific officer, has announced his plans to retire at the end of this year. He will continue to serve on the company’s board
of directors and will assist in an informal advisory capacity after his retirement to ensure a seamless transition of his
management duties.
|
Arcadia Biosciences, Inc.
Financial Snapshot
(Unaudited)
($ in thousands)
|
| |
|
|
Three Months Ended September 30 |
|
|
Nine Months Ended September 30 |
|
|
2016 |
|
2015 |
|
% Favorable/
(Unfavorable)
|
|
|
2016 |
|
2015 |
|
% Favorable/
(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% |
Revenues
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.
Operating Expenses
In the third quarter of 2016, operating expenses were $5.0 million, 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
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
(Unaudited)
(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
(Unaudited)
(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
(Unaudited)
(In thousands)
|
|
|
|
|
|
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 |
|
Arcadia Biosciences, Inc.
Jeff Bergau
+1-312-217-0419
jeff.bergau@arcadiabio.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20161110006499/en/