RKDA - Earnings call transcript Q2 2018 | Arcadia Biosciences, Inc.

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Operator

Good afternoon, and welcome to Arcadia Biosciences' Second Quarter 2018 Earnings Conference Call. Today's presenters will be Raj Ketkar, President and CEO; and Matthew Plavan, CFO. This call is being webcast, and you can refer to the company's press release and slides at arcadiabio.com.

Before we start, if you refer to Slide 2, we would like to remind you that Arcadia Biosciences will be making forward-looking statements on this call based on current expectations and currently available information.

However, since these statements are based on factors that involve risks and uncertainties, the company's actual performance and results may differ materially from those described or implied today.

company's and language of again the recently their this review XX-K filed on can safe in harbor most presentation. You Slide X Raj I'll President that, now the over With turn and to CEO. call Ketkar,

Raj Ketkar

will and Connor, moving end call. progress Matt second we the our the quarter products would quarter as second us we call, launch. quarter earnings questions. our financing closer and and you, recently we who share is thanks your Thank I Today, on report the round great in joining to are like XXXX making and on to everyone the completed summarize XXXX will achievements financials. of you will, discuss for the second take At always, the the with

the of progress quarter Slide Turning ingredients XXXX, as health In to the towards and X. continue company. a nutrition phase commercialization we second

the cash We accomplishment of will first our well to fortify registered the of products XXXX I to build up and offering million $XX products have to A XXXX those to potential in which our a round completion now with about allow in direct beyond. quarter and growth are was today. strategy talking three meaningfully will in better execute and completed round strategy. $XX quarter, Coupled us we be the million commercializing our you resources this major on equipped

will wheat I were for production business so of supply important traits locations. GoodWheat Breeding farmers an commercial We Resistant in who GoodWheat customers. speak production of have continues, Resistant identity and our sets with executed multiple developing more products detail options some non-GM which up portfolio in preserved planting. Starch agreement planted growers for also produce made germplasm GoodWheat network into more will of Starch We scale-up that GoodWheat trials and later. to progress our in to will the these the

testing milling Resistant who several product. and Starch GoodWheat food with their are companies in partnerships building We’re

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with will farmers. and who to partnerships building for are seed produce We companies condition package seeds to delivery

represents Canada, base million for in Network, geographies. will XX the acres the Our preserve in U.S. grower and expand collaboration with help our GoodWheat Business grain Farmers which key identity

milling We with of the engaging over Europe XX% of milling that represents are companies preserved and in to in test wheat. major the U.S. the processing capacity millers identity

products with working the develop will food end a of also to that companies to We’re consumers. appeal number

the these build partnerships of focus year sustainable this Our be long-term a foundation that is to will business.

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soybeans reports, we dossier awaiting approval studies As approval to Europe for submit and XXXX. of approval USDA. we are Concurrently, mentioned China have past from are in conducting this expect we from import and the in required for in

and color this launch developed shown Extended productivity market. ripen we important expect to its of the firmness approvals. the Allowing in Arcadia India. in also same We and traits to food years the picking, transportation is ripen HBX licensed Shelf soybeans the to taste before company tolerant Slide We is the XXXX. time a and towards tomatoes by has Argentina sustainability and XXXX. Bioseed and drought improving ag to during This while as development color to private Shriram post-harvest the technology the technology Life progress X. on to the of has handling waste. taste. and moving It look seed tomato. to thereby made in are field reading forward vine as on the and other spoilage allows in they the was important in baked technology reduces better After Bioseed, commercialization vine required fruit reducing have improve very at Tomato tomatoes quarter reached results retained growing commercialization the of major fruit Two the in in This soon milestone an important

results they yield significant input three rice increase yields change promise deficient challenging with traits in such significant our hold growing in help as together the conditions revenue proprietary to gains the productivity climate and nutrient deal These of with stacked and effects that as ag and We farm recently Africa. of confirmed improve also tested Colombia and salinity. announced soil, traits farmers our and drought

on continue results to for in advance. and turn With call While see quarter. our now non-GM I we near-term wheat our the potential over we productivity support our partners Matt they traits our to ingredients have at an shifted the the like for to in to commercial still focus will these financial we update would portfolio, agricultural unlocking that value

Matthew Plavan

as the afternoon health Arcadia was good achieved quarter as having of to path and our soybeans. commercialization everyone. milestones important Raj, Thank you, HBX nutritional good our well a on indeed products for It and

As health we company. impact financial our ingredient and will from business model licensing touched in reflect last our on quarterly call, one predominantly and the to a in the of a results research to continue near-term transformation of our consumer product

forward focus these specific are trait upon new expect products, HBX our commercialization have GoodWheat As months, that to away new we continue primary to the longer pursuing the product divert intend will XX revenues projects research we critical are arrangement projects new the levels activities GoodWheat XX commercialization, do on to to no at resources which the onset our fees scale-up customers. market with we characterized we our advance and and our we be over or and and end introduce of new these production These ingredient grant of government next Because they not as from underway. soybeans our contract revenues breeding, nutritional essential relevant depending and the products strategy to business historically. like

we grant concluded agreements be replaced. research as contract not expect and to this these As are government our such and lower year current revenues projects

filed is anticipate addition, our licensing new no into upfront time. revenue X amortize model ASC under of the implementation fees do and the future with accounting over license In upfront pronouncement described XX-Q of not we XXX, fees fully such more our in footnote longer can today we business

into effective of As of charged year a XX,XXX quarter deferred scheduled license revenue full out deficit of result, reversed and amortized year. were which for of be this for were retain revenue the and X to January to respectively, the XXXX revenues

the expect we during licensing to continue decline reasons, to revenues these year. For

Turning to and second these see year. the of of in revenue X, half factors the Slide first impact overall on we our the quarter the

to of first over wind six the revenue for beginning quarter months quarter prior and legacy sources, reduction this revenues revenue reduction driving the XX% second over XX% to in are first year the year last year. onset six the this Our prior down sources prior new of a our months

of of the continued relation to look $XXX,XXX the our quarter in X% through we decrease compared the salary Importantly, for The reduced to our in the in the Taking million containment were to SG&A our second Verdeca a substantially the the XXXX and on compensated effect subcontract activity by was terminations a offset of cost joint to lower in This venture was the lower expense quarter impact XXXX. and XXXX. license $XXX,XXX of benefits for when This due have this flat the XXXX certain dip and progress in to $XXX,XXX as see the here commercialization in however, R&D the were driving versus research second of higher and quarter the grants due was of of continued [ph] to XXXX the of the decrease just higher increase year-to-date. as compared of support XXXX at XXXX. $XXX,XXX half XXXX headcount. half to relatively that our launch and by expenses impact present less a transformation had half expenses greater SG&A well partially Total XXXX. phase period increase first too. closer expenses primarily quarter same quarter year-to-date sub-contracting or $XXX,XXX in operating soybean. to fewer was operating first lack efforts towards due HBX in for we in government from first the expenses agreement Total lower in incurred expenses, can $X.X having costs as The revenue mostly compared of our as the XXXX to

property not advisory higher and In the contributed the incurred half and in incurred partially of XXXX in intellectual costs half first offset to addition, favorability, XXXX. XXXX strategic in by of fees first bonus legal the

of the million of compared a putting the loss $X.X loss in common the million, was Now this to $XX.X second and $X.X first together, and XX% half all second stockholders activity was XXXX net for common quarter attributable of for XXXX. XXXX Net loss quarter half of the loss net from to million net for million, loss increase $X the attributable first stockholders XXXX. to

was investments million QX the for this quarter XXXX PIPE financings first offering. and to offering equivalents and financing and Importantly, value costs second was million the by the These recognition million, and the remeasurement increase PIPE for both the liabilities driven and $XX.X by the of With of QX capital hand, totaled with both bolstered this the and half resources, combined liquidity periods regard $X.X on $X then our in subsequent initial as short direct term with primarily associated cash associated respectively. totaled registered well the as amounts fair substantially year. cash and our of

the much non-cash and you accounting financial year Raj. half for QX first P&L for of from XXXX million our the to in operating XX-Q liabilities during Back PIPE cash months for completed highlights six X the first That million the involved our half and a the quarter year. $X.X of the $X.X description the transactions. of to XXXX. of thank $X.X footnote net you, of decrease quarter was for during Both million, $X.X first filed charges these used our we cash Please the time. for refer included net six second financings QX was unchanged your first in activities our detailed used significant and XXXX of months prior wraps we the million from in the up used Our and very today for to the the

Raj Ketkar

Thanks, Matt.

commercialization a XX the million to for Before $XX ability summarize raised companies, in HBX for direct launch of like showed companies from we a the pre-commercial a of soybean GoodWheat HBX Extended Argentina we reached to tomatoes This building results to and millers get to on days. the in important with drought the the breeders, second our registered us to Life chain tomatoes growers an execution developed via in health of and We testing. next non-GM twelve in we made Extended Shelf And strategy. food results offering transitioning prepare strategy for seed last TILLING in XXXX. company. anticipate of technology our and your months. to tolerant eighteen GoodWheat, our gives ingredients positive wheat participate Shelf that million $XX nutrition across three I'd its will of Argentina the We ingredients. total tolerant great milestone soybeans and execute started round products: on quarter path. drought questions, progress our in We Life trial launch to partnerships commercially in the introduced Data to value technology farmers,

would business next that and to I like our about positive the to With nutrition We to continuing the ingredients call our over reporting your are results now. excited new journey look questions and quarter. health in forward turn

Operator

the comes Selvaraju Raghuram Your C. line first H. Wainwright. [Operator of question with from Instructions]

Your line open. is

Julian Harrison

Julian Hi, is there. on Selvaraju. Raghuram This for

you about more Resistant Starch XXXX? can likely of GoodWheat the would commercial a like First, look talk what little launch in

Raj Ketkar

we think with is some a companies to are I expecting work what get commercial food introduction. product to into

that multiplication it with get volume, different we introductory into are the and several limited by now, test but would the in that doing We we food terms volume ensuring of be product right seed also an markets. working companies the are

Julian Harrison

might curious regarding seeds? has was thanks. know from feedback just FBN so far a Okay, the if in but there I helpful. been little early, GoodWheat be That's network it farmers any I

Raj Ketkar

much has world FBN, whom with wheat about conversations not bring beginning before a years – owned the really generally select is been we with very positive, feedback already Wheat has had the excited had corn over the innovation with and engagement already on the soybeans. experience our farmers everybody and that farmers value with working the had are We and of value with wheat. group just we've chain been in to with farmers. unlike traits We the past starting in can

by are that that's we're And wheat welcomed farmers. we in regions really to. to wheat talking what across hearing innovations have talking growing the been people So

Julian Harrison

a quarters? you compensation Okay, any housekeeping next how Are quick on got likely the able stock based will it and trend over to question. guidance just provide few

Raj Ketkar

that million predict, we difficult You that's $XXX,XXX – I to to to any surprise expect to reason I don't anticipating Scholes been granting with that's think know $X it’s charges Black think sometimes changes it the in have not what you. stock what a our the materially, amounts. but volatile but from been. model substantial materially that going to you $X don't but we're We’ve million, between to we believe change can know Merton using change determine a year, But running as

best is And year over think or perform estimate so, that's I two. of this probably how our going to the next

Julian Harrison

Okay, great. Thanks very much.

Raj Ketkar

Julian. Thanks,

Operator

at time. the Ketkar. There no over are turn questions I call back Raj to further will this

Raj Ketkar

interest today everyone your look conference to during Thanks quarter again third and of support our the you Arcadia. forward for for call with continued call. joining and We speaking

Operator

today's conference call. concludes This

disconnect. may You now

Arcadia Biosciences (RKDA) 8 Aug 182018 Q2 Earnings call transcript