Arcadia Biosciences Announces Strong Second-Quarter and First-Half 2021 Financial Results and Business Highlights

DAVIS, Calif., Aug. 16, 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 second quarter and first half of 2021.

"In addition to being marked by five-fold revenue growth, our second quarter was the first time Arcadia recorded sales from our consumer brands, representing a key milestone in our transformation to a dynamic producer and marketer of innovative, plant-based health and wellness products," said Matt Plavan, CEO of Arcadia.

"The quarter was also highlighted by significant advancements in our strategic resource and capacity building, and the successful integration of operations following the Lief Brands acquisition," he added. "We strongly believe that these initiatives, along with the profitable sale of our Bioceres shares will enable us to accelerate our current momentum and strongly position the company to achieve meaningful top-line growth."

Q2 and Recent Operating and Business Highlights

• Arcadia Names Veteran CPG Leader Laura Pitlik as Chief Marketing Officer. Arcadia recently named Laura Pitlik its Chief Marketing Officer to expand brand awareness of its consumer goods following several key acquisitions. A veteran CPG strategist, Pitlik launched the first national line of all-natural breads, Nature's Pride^®, for Hostess Brands, and has deep expertise in the CPG industry, leading brands such as Dr Pepper^®, Wonder^® Bread and On The Border^® tortilla chips and salsas.
• Arcadia Hires Lief Executives with Acquisition, Bringing Deep CPG Experience. As part of the Lief acquisition, Arcadia hired two senior CPG executives: Chris Cuvelier as Chief Growth Officer and Belinda Yao as Vice President of Operations. Cuvelier leads growth strategy and sales execution for the company's consumer goods business. As the founder and former CEO of plant-based beverage maker Zola, Cuvelier successfully extended the Zola brand to include coconut water and grew gross revenues to more than $20 million annually.
   
  Yao oversees supply chain manufacturing for the company, including demand planning, procurement and supplier relationships, order fulfillment, inventory management, logistics, customer service and data analytics. She is a former supply chain lead for The Dannon Company, Harmless Harvest and Zola.
   
  The company also expanded its roster of CPG talent beyond executive roles, having attracted key individuals in finance and procurement positions who bring tenured experience from leading CPG companies.
• Arcadia Advances Successful Integration of Lief Brands. Immediately upon the close of the Lief acquisition, Arcadia began integrating the Lief manufacturing team, leveraging overhead synergies, and scaling manufacturing capacity to meet anticipated volume growth.
• Arcadia Completes Sale of Bioceres Shares. Arcadia successfully sold the Bioceres shares previously acquired as partial consideration for the sale of its partnership interest in Verdeca. With this sale and the up-front payments received at the time of the transaction, the company successfully monetized more than $27 million in cash from the sale of its interest in the HB4 drought tolerant soybean technology. Arcadia still retains further royalty rights up to $10 million upon commercialization of HB4.

Revenues
In the second quarter of 2021, revenues were $1.4 million, compared to revenues of $281,000 in the second quarter of 2020, and first half 2021 revenues were $2.2 million, compared to $590,000 in the first half of 2020. The $1.1 million quarter-over-quarter increase was primarily driven by the sales related to the newly acquired portfolio of wellness brands, in addition to GoodHemp seed sales. The $1.6 million year-over-year increase was driven by the aforementioned, in addition to higher GoodWheat grain sales during the first quarter of 2021.

Operating Expenses
In the second quarter of 2021, operating expenses were $9.1 million compared to $7.2 million in the second quarter of 2020, and first half 2021 operating expenses were $15.2 million compared to $13.3 million in the first half of 2020.

Cost of product revenues in the second quarter of 2021 included costs associated with the newly acquired portfolio of wellness brands and $720,000 of write-downs of wheat inventories and hemp seed inventory to fair value, while the second quarter of 2020 included a $1.4 million write-off of hemp seeds that did not meet quality specifications. Cost of product revenues for the first half of 2021 were $2.4 million, or $821,000 higher than in the first half of 2020, primarily driven by sales of the newly acquired product lines.

Research and development (R&D) spending decreased by $862,000 and $1.9 million for the second quarter and six months ended June 30, 2021, respectively, primarily due to lower employee expenses as we right-sized our research teams, along with the absence of Verdeca related activity in 2021.

General and administrative (SG&A) costs for the quarter and six months ended June 30, 2021 were $2.7 million and $3.0 million higher than in the quarter and six months ended June 30, 2020, respectively, resulting in part from the acquisitions this quarter, including investment banker success fees, legal diligence and transaction fees, as well as additional salaries and benefits with the increased headcount. Marketing, advertising and consulting activities increased in 2021 as well.

Net Income Attributable to Common Stockholders
Net loss attributable to common stockholders for the second quarter of 2021 was $5.3 million, or $0.24 per share, a $4.4 million decrease from the $9.7 million, or $1.04 per share, net loss for the second quarter of 2020. The second quarter of 2021 included $2.8 million of other income for the gain on the sale of Bioceres shares and $498,000 of non-cash expense recognized as a result of the increase in the fair value of common stock warrant liabilities. The first quarter of 2020 included $3.1 million of non-cash expense for the increase in the fair value of common stock warrant liabilities.

Net loss attributable to common stockholders for the first half of 2021 was $3.2 million, or $0.15 per share, a $4.0 million decrease from the $7.2 million, or $0.80 per share, net loss for the second half of 2020. A realized gain on the sale of Bioceres shares in the amount of $10.2 million was recognized in the first half of 2021. Non-cash expense of $176,000 was recorded in the first half of 2021 for the increase in the fair value of common stock warrant liabilities, while $5.1 million of non-cash income was recorded during the first half of 2020 for the decrease in the fair value of common stock warrant liabilities.

Conference Call and Webcast
The company has scheduled a conference call for 4:30 p.m. Eastern (1:30 p.m. Pacific) today, August 16, to discuss second-quarter financial results and key strategic achievements.

Interested participants can join the conference call using the following numbers:

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, within the portfolios of GoodWheat™ and Lief™, which includes popular brands 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 https://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.

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SOURCE Arcadia Biosciences, Inc.