Arcadia Biosciences announces strong second-quarter and first-half 2022 financial results and business highlights

Arcadia Biosciences, Inc.^® (Nasdaq: RKDA), a producer and marketer of innovative, plant-based health and wellness products, released its financial and business results for the second quarter and first half of 2022.

"We're thrilled with this record-breaking quarter, but we are just getting started," said Stan Jacot, president and CEO of Arcadia Biosciences, who was also recently named to Arcadia's board of directors. "We continue to simplify and wind-down non-core businesses to focus on core brands. With our successful national launch of GoodWheat™ pasta both in retail and online, and growth opportunities in Zola^® and ProVault™, we anticipate a bright future."

Arcadia is also introducing Project Greenfield, a 3-year plan to unlock the company's potential and create a path to profitability. "Project Greenfield aligns the company's resources around solid, achievable goals to drive shareholder value, including GoodWheat's retail expansion, driving growth of our core brands and partnerships, as well as maintaining an agile organization to cultivate next generation wellness products that make every body feel good, inside and out," said Jacot.

Revenues

In the second quarter of 2022, revenues were $3.9 million, compared to $1.4 million in the second quarter of 2021 – a $2.5 million increase driven primarily by sales of Zola coconut water and body care products. Revenues for the first half of 2022 were $7.1 million, compared to $2.2 million in the first half of 2021, driven by the same factors as well as GoodWheat grain sales, the majority of which were completed in the first quarter of 2022.

Arcadia achieved a $2 million milestone from Bioceres in the second quarter as a result of the HB4^® soybean approval in China. Based on accounting guidance, $862,000 was recognized as license revenue and the remaining $1.1 million was recognized as a gain on the 2020 sale to Bioceres of Arcadia's interest in the Verdeca joint venture.

Operating Expenses

In the second quarter of 2022, operating expenses were $7.6 million compared to $9.1 million in the second quarter of 2021, and the first half of 2022 operating expenses were $15.5 million compared to $15.2 million in the first half of 2021.

Cost of product revenues in the second quarter of 2022 were $3.5 million, or $1.9 million higher than the second quarter of 2021, primarily driven by costs associated with sales of Zola, body care and GoodWheat, in addition to inventory write-downs of $1.0 million, while the second quarter of 2021 included inventory write-downs of $720,000. Cost of product revenues for the first half of 2022 were $6.9 million, or $4.5 million higher than in the first half of 2021, primarily driven by costs related to sales of the wellness product lines as well as GoodWheat, in addition to inventory write-downs of $1.4 million, while the second half of 2021 included inventory write-downs of $880,000.

Research and development (R&D) spending decreased by $772,000 and $1.5 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021, as a result of the company's focus on commercialization, which has led to lower employee-related expenses, and research-related activity costs.

General and administrative (SG&A) costs for the three and six months ended June 30, 2022 were $1.7 million and $1.4 million lower than in the three and six months ended June 30, 2021, respectively, primarily driven by lower employee expenses, lease expense and consulting fees, as well as the absence of acquisition fees in 2022.