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 fourth quarter and full year
of 2016.
The company’s loss from operations was $5.5 million in the
fourth quarter and $18.6 million for the full year of 2016 compared
to $4.1 million in the fourth quarter and $15.6 million for 2015.
Net loss attributable to common stockholders in the fourth quarter
and full year of 2016 was $5.7 million and $19.6 million, compared
to $3.9 million and $20.7 million for the comparable periods in
2015.
Cash on hand and investments at the end of the fourth quarter
totaled $53.1 million.
“2016 was a year of transition for Arcadia, as we focused on
high value yield and nutrition traits that we believe will deliver
near-term revenue,” said Raj Ketkar, president and CEO. “After a
comprehensive strategic review, in Q4 we realigned the organization
and operations to conserve cash, and we expect to see the benefits
of these changes in 2017.
“We will continue to work with our partners to advance our rich
pipeline of abiotic stress traits, such as nitrogen use efficiency,
water use efficiency and salinity tolerance,” he added.
Business and Technology Highlights
Arcadia made the following business and technical achievements
in the fourth quarter of 2016:
- SONOVA® GLA safflower oil use in pet food. Arcadia is
awaiting approval from the FDA on its regulatory submission for GLA
safflower oil use in pet food, which is expected to open a new
market for its highly concentrated SONOVA GLA product.
- Regulatory
submittal 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
joined 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.
- Organizational
changes. Following a comprehensive strategic review of all
technology programs, partner progress and market conditions,
Arcadia realigned its organization to support near-term product
commercialization and preserve cash. This included a reduction in
workforce, management changes and consolidation of facilities to
reduce operating expenses by 15-20 percent
Since the close of the fourth quarter, Arcadia has announced the
following:
- Arcadia
Biosciences Obtains U.S. FDA GRAS Status for SONOVA® GLA Safflower
Oil. Arcadia followed FDA-proposed procedures to establish
its SONOVA® GLA safflower oil as GRAS under the intended conditions
of use. This process included convening an expert panel to review
the necessary product safety data and then submitting a
notification to the FDA.
- Study Shows
Arcadia’s Nitrogen Use Efficiency Trait Increases Yield in NERICA
Rice. In field evaluations over three growing seasons and in
both upland and lowland rice production systems, rice lines with
Arcadia’s NUE trait showed substantial yield increases under
different nitrogen application rates. The leading NUE rice line
showed a 34 percent increase over controls.
- Origin, Arcadia
Announce China Biotechnology Collaboration in Corn. Arcadia
announced a collaboration with Origin Agritech to deregulate insect
resistance/ herbicide tolerance traits in corn. The project
involves the first-ever export of a key corn biotechnology product
developed in China to the U.S., and Arcadia will assist Origin in
developing information for submission to regulatory authorities in
the U.S., China and other countries.
Arcadia Biosciences, Inc. Financial Snapshot
(Unaudited) ($ in thousands) Three
Months Ended December 31 Year Ended
December 31 2016 2015 % Favorable/
2016 2015 % Favorable/ (Unfavorable)
(Unfavorable)
Total Revenues 540 1,346 (60 %) 3,188 5,414
(41 %)
Total Operating Expenses 6,011 5,416 (11 %) 21,808
20,977 (4 %)
Loss From Operations (5,471 ) (4,070 ) (34 %)
(18,620 ) (15,563 ) (20 %)
Net Loss (5,708 ) (3,857 ) (48 %)
(19,624 ) (17,956 ) (9 %)
Net Loss Attributable to Common
Stockholders (5,708 ) (3,857 ) (48 %) (19,624 ) (20,727 ) 5 %
Revenues
In the fourth quarter of 2016, revenues were $540,000, compared
to revenues of $1.3 million in the fourth quarter of 2015. For
annual 2016, overall revenues decreased to $3.2 million compared to
$5.4 million during the same period of 2015. The
quarter-over-quarter and annual results were primarily impacted by
delays to the estimated commercialization dates within the
portfolio of license agreements as well as the conclusion of
certain contract research and government grant projects in
2015.
Operating Expenses
In the fourth quarter of 2016, operating expenses were $6.0
million, compared to $5.4 million in the fourth quarter of 2015.
For annual 2016, operating expenses were $21.8 million, compared to
$21.0 million during the same period in 2015. Research and
development (R&D) spending decreased by $303,000 in 2016, as a
result of reduced subcontract work, partially offset by increased
costs associated with Arcadia’s program in corn trait development
and commercialization initiated in early 2016. General and
administrative (SG&A) expenses increased by $1.1 million during
the same period, primarily due to severance costs associated with
the reductions in force.
Net Loss
Net loss for the fourth quarter of 2016 was $5.7 million,
compared to $3.9 million for the fourth quarter of 2015. Net loss
for the year was $19.6 million, compared to $18.0 million for
2015. The net loss in the fourth quarter 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 fourth quarter of 2015 net loss
included the effect of a reduction to the income tax provision.
Net Loss Attributable to Common Stockholders
Net loss attributable to common stockholders for the fourth
quarter of 2016 was $5.7 million, compared to $3.9 million for the
fourth quarter of 2015. Net loss attributable to common
stockholders for the year was $19.6 million, compared to $20.7
million for 2015. The net loss attributable to stockholders
for 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
fourth quarter of 2016 was 13 cents, compared to 9 cents for the
fourth quarter of 2015, and 44 cents for 2016, compared to 73 cents
for 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: 68547235
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 September 30, 2016 and
additional information that will be set forth in its Form 10-K for
the year ended December 31, 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., 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. For more information, visit
www.arcadiabio.com.
Arcadia Biosciences, Inc. Condensed Consolidated
Balance Sheets (Unaudited) (In thousands, except
share data) As of December 31, 2016
2015 Assets Current assets: Cash and cash
equivalents $ 2,013 $ 23,973 Short-term investments 48,547 26,270
Accounts receivable 349 706 Unbilled revenue 184 82 Inventories —
current 252 294 Prepaid expenses and other current assets
877 692 Total current assets 52,222 52,017 Property and
equipment, net 508 585 Inventories — noncurrent 1,327 1,867
Long-term investments 2,498 19,748 Other noncurrent assets
19 25 Total assets $ 56,574 $ 74,242
Liabilities and
stockholders’ equity Current liabilities: Accounts payable and
accrued expenses $ 2,359 $ 2,423 Amounts due to related parties 30
19 Unearned revenue — current 740 1,008 Total current liabilities
3,129 3,450 Notes payable 25,127 24,930 Unearned revenue —
noncurrent 3,120 2,637 Other noncurrent liabilities 3,000
3,000 Total liabilities 34,376 34,017
Stockholders’ equity: Common stock, $0.001 par value—400,000,000
shares authorized as of December 31, 2016 and December 31, 2015;
44,487,678 and 44,184,195 shares issued and outstanding as of
December 31, 2016 and December 31, 2015, respectively 44 44
Additional paid-in capital 173,723 172,222 Accumulated deficit
(151,550 ) (131,926 ) Accumulated other comprehensive loss
(19 ) (115 ) Total stockholders’ equity 22,198
40,225 Total liabilities and stockholders’ equity $ 56,574 $ 74,242
Arcadia Biosciences, Inc. Condensed Consolidated
Statements of Operations and Comprehensive Loss
(Unaudited) (In thousands, except share and per share
data) Year Ended December 31, 2016
2015 Revenues: Product $ 669 $ 466 License 144 1,216
Contract research and government grants 2,375 3,732
Total revenues (which includes $0 and $91
from related parties )
3,188 5,414 Operating expenses: Cost of product revenues 895 892
Research and development 8,663 8,966 Selling, general and
administrative 12,250 11,119 Total operating expenses
21,808 20,977 Loss from operations (18,620 ) (15,563
) Interest expense (1,319 ) (2,658 ) Other income, net 340 521 Loss
on extinguishment of debt — (230 ) Net loss before
income taxes (19,599 ) (17,930 ) Income tax provision (25 )
(26 ) Net loss (19,624 ) (17,956 ) Accretion
of redeemable convertible preferred stock to redemption value —
(2,574 ) Deemed dividends to warrant holder — (197 )
Net loss attributable to common stockholders $ (19,624 ) $ (20,727
) Net loss per share attributable to common stockholders: Basic and
diluted $ (0.44 ) $ (0.73 ) Weighted-average number of shares used
in per share calculations: — Basic and diluted 44,366,816
28,559,119 Other comprehensive income (loss), net of tax
Unrealized gains (losses) on available-for-sale securities
96 (115 ) Other comprehensive income (loss) 96
(115 ) Comprehensive loss attributable to common stockholders $
(19,528 ) $ (20,842 )
Arcadia Biosciences, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited) (In thousands) Year
Ended December 31, 2016 2015 CASH FLOWS
FROM OPERATING ACTIVITIES: Net loss $ (19,624 ) $ (17,956 )
Adjustments to reconcile net loss to cash used in operating
activities: Depreciation and amortization 304 294 Loss (gain) on
disposal of equipment 4 (10 ) Net amortization of investment
premium 140 85 Payment of research and develop fees with cost
investment — 500 Stock-based compensation 1,059 1,392 Change in
fair value of derivative liabilities related to convertible
promissory notes — 9 Gain on expiration of warrant and derivative
liability related to notes payable upon IPO — (437 ) Accretion of
debt discount 198 837 Loss on extinguishment of debt — 230 Changes
in operating assets and liabilities: Accounts receivable 357 336
Unbilled revenue (102 ) 298 Inventories 582 412 Prepaid expenses
and other current assets (185 ) (415 ) Other noncurrent assets 5 49
Accounts payable and accrued expenses (19 ) 125 Amounts due to
related parties 11 (37 ) Unearned revenue 215 (821 )
Net cash used in operating activities (17,055 )
(15,109 ) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale
of property and equipment — 10 Purchases of property and equipment
(231 ) (151 ) Purchases of investments (41,385 ) (48,719 ) Proceeds
from sales and maturities of investments 36,315 2,500
Net cash used in investing activities (5,301 )
(46,360 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from
issuance of common stock upon IPO — 68,227 Payments of IPO issuance
costs — (8,205 ) Proceeds from issuance of notes payable — 45,000
Payments of debt issuance costs (46 ) (396 ) Payments of debt
extinguishment costs — (1,319 ) Proceeds from exercise of stock
options and purchases through ESPP 442 360 Payments on notes
payable to related party — (8,000 ) Payments on notes payable and
convertible promissory notes — (26,796 ) Net cash
provided by financing activities 396 68,871 Net
(decrease) increase in cash and cash equivalents (21,960 ) 7,402
Cash and cash equivalents — beginning of period 23,973
16,571 Cash and cash equivalents — end of period $ 2,013 $
23,973 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid
for interest $ 1,033 $ 2,050 Cash paid for income taxes $ 29 $ 149
NONCASH INVESTING AND FINANCING ACTIVITIES: Accretion of redeemable
convertible preferred stock $ — $ 2,574 Debt issuance costs
included in accounts payable and accrued expenses $ — $ 46
Reclassification of deferred IPO costs to equity $ — $ 5,022 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 $ — $ 1 Conversion of preferred stock to common stock
upon IPO $ — $ 85,455
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Arcadia Biosciences, Inc.Jeff
Bergaujeff.bergau@arcadiabio.com+1-312-217-0419
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