Arcadia Biosciences Inc (NASDAQ:RKDA) posted fourth-quarter and full-year results after the bell Wednesday revealing revenue that decreased slightly year-over-year but shifted in source from research grants to commercial sales — a transition the company believes sets it up for dramatic growth in 2020.
For the quarter, revenue came in at $416,000, a 6% decrease from $444,000 in the same period in 2018. For 2019 as a whole, Arcadia brought in $1.17 million, compared to $1.46 million the year prior.
The minimal revenue changes occurred despite a rapidly evolving business, as legacy sources of revenue such as grants faded and sales from its GoodWheat product line, along with its new GoodHemp operation, roared to life.
READ: Arcadia Biosciences unveils new tie-up for supply of Hawaiian grown and extracted ingredients in North America
In that vein, CEO Matthew Plavan set an ambitious goal for 2020: to increase full-year revenue tenfold.
"We are energized by our progress in hemp, wheat and soy in 2019 and the strength with which we enter 2020 to grow our GoodHemp seed sales, Hawaiian CBD oils, and GoodWheat flour and grain sales," Plavan said in a statement.
"Moreover, as we take stock of our progress so far this year, including more than $3.7 million in backlog GoodHemp seed orders, we maintain confidence in our projected goal to exceed $10 million in total revenue this year, although we will continue to assess the potential impact of COVID-19 on our business. Revenues from these orders will be recognized when the seeds are delivered to growers, between second and fourth quarter this year.”
Arcadia launched its hemp business in Hawaii in the first quarter of 2019 and by April had begun research and cultivation of sun-grown hemp. The islands’ climate allows for growing year-round, and the company pointed to the state’s pilot program under the Farm Bill as a crucial head start over growers in other states.
In the third quarter, that manifested into Archipelago Ventures, a joint venture with Legacy Ventures Hawaii to grow, extract and sell sun-grown hemp, and later into GoodHemp, a commercial brand of what it calls genetically superior hemp seeds.
Elsewhere, Arcadia signed a global commercial agreement for its GoodWheat line of products with Bay Street Milling Company and Arista Cereal Technologies in the third quarter, giving GoodWheat a path to market as a part of Bay Street’s HealthSense flour.
"2019 also marked a year of strong progress in our GoodWheat business, where we captured first sales and executed a key global commercial agreement,” Plavan said. “And our Verdeca joint venture accelerated toward commercial launch with new approvals of HB4 drought and herbicide tolerant soybeans in the U.S., Brazil and Paraguay."
Overall, the Davis, California company saw a net loss of $6.2 million, $0.72 per share, in the quarter, compared to $646,000 in the fourth quarter a year earlier. For the year, the loss was $28.8 million, $4.53 per share, compared to $13.5 million in 2018.
Arcadia noted that the decrease in both periods was due in large part to a shift in the fair value of its common stock warrant and common stock adjustment feature liabilities, which is driven by the number of shares outstanding.
Looking ahead, in addition to the more than $3 million in orders it secured for GoodHemp, the company launched a new strategic partnership with Grow West, an independent marketer of agricultural products in California.
What’s more, Archipelago Ventures has partnered with Vivion Specialties Inc to certify and distribute Hawaiian hemp products in North America. VSI has a network of 28 sales regions in the US and Canada, the company said, and is known for its purity validation process, which tests every ingredient and offers a detailed analysis of its contents.
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