Revenue to be recognized when the seeds are delivered to growers between Q2 and Q4 this year
DAVIS, Calif., Jan. 30, 2020 /PRNewswire/ -- Arcadia Biosciences, Inc. (Nasdaq: RKDA), a leader in science-based approaches to enhancing the quality and nutritional value of crops and food ingredients, today announced in a letter to shareholders that the company has secured in excess of $3 million in initial seed purchase commitments in just 50 days post launch of its newest product line: GoodHemp. As Arcadia's new commercial brand for delivering genetically superior hemp seeds, transplants, flower and extracts, GoodHemp debuted its first commercial product, a disease resistant, USDA-compliant ultra-low tetrahydrocannabinol (THC) hemp seed, during the American Seed Trade Association CSS & Seed Expo in Chicago.
"Our new GoodHemp seed catalog has been met with enthusiasm from growers seeking compliant, reliable hemp seeds," said Sarah Reiter, Arcadia's chief commercial officer. "Since our launch last month, we've received a significant number of inquiries, reflecting a strong market demand for quality genetics from a reputable seed provider. We can already see that Arcadia's 15+ years of proven results in crop improvement is highly valued by growers," she continued. "We are fielding strong interest in our seeds and expect purchase commitments to continue over the next few months as farmers focus on securing quality genetics for their upcoming spring plantings."
Revenues from these initial purchase commitments will be recognized when the seeds are delivered to growers, between second and fourth quarter this year. This revenue and that expected from follow-on commitments will contribute meaningfully to the greater than $10 million in total expected revenues for 2020, as forecasted in the financial guidance provided by CEO Matthew Plavan last year.
GoodHemp's 2020 offering has expanded from the five new seed varieties previously announced during the GoodHemp launch. The company now offers ten varieties primarily focused on compliant cannabidiol (CBD) production, one of the biggest challenges facing U.S. growers in light of the USDA's new guidelines mandating that states test and dispose of "hot" crops that exceed 0.3 percent THC. The expansion in the 2020 seed varieties offered reflects the accelerated breeding platform and Arcadia's advanced testing systems.
"We work closely with our community of U.S. farmers to understand the very specific challenges of growing hemp in different geographies, climates and regulatory environments in order to develop and deliver solutions that support crop productivity and profitability," said Reiter. "Our USDA-compliant Complia Bot+ seed variety is just the beginning of what we expect will be a robust and innovative seed portfolio designed to modernize the commercial hemp germplasm market."
To support the continued success of the GoodHemp line, Arcadia has established the GoodHemp Innovation Partners platform, a select group of growers who will work closely with Arcadia's team of regional agronomists to further the shared understanding of GoodHemp seed performance at industrial scale throughout the production season. This unique go-to-market approach will be a hub model with centers initially in Hawaii, the Pacific Northwest, Southern California, Northern California, the Desert Southwest and the Mountain West. Innovation partners will receive exclusive access to the team of breeders, geneticists and computational biologists at Arcadia's R&D headquarters in Davis, and serve as a hemp production advisory board highlighting grower challenges to inform Arcadia's future breeding efforts. They will also have early access to developmental seed varieties and will help validate innovations under real farm conditions.
For more information about GoodHemp, visit www.arcadiabio.com/goodhemp.
About Arcadia Biosciences, Inc.
Arcadia Biosciences (Nasdaq: RKDA) is a leader in science-based approaches to enhancing the quality and nutritional value of crops and food ingredients. The company's GoodWheat™ branded ingredients deliver health benefits to consumers and enable consumer packaged goods companies to differentiate their brands in the marketplace. Arcadia's agricultural traits are being developed to enable farmers around the world to be more productive and minimize the impact of agriculture on the environment. The company's new GoodHemp seed catalog delivers genetically superior hemp seeds, clones, transplants, flower and extracts, applying the company's proprietary crop innovation technology, ArcaTech, to an ancient crop. For more information, visit www.arcadiabio.com.
Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding revenue to be recognized. 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: Arcadia's and its partners' and affiliates' ability to develop and sell commercial products incorporating their traits, and complete the regulatory review process for such products; Arcadia's and its partners' ability to fulfill current and follow-on purchase commitments; Arcadia's compliance with laws and regulations that impact Arcadia's business, and changes to such laws and regulations; Arcadia's ability to capture revenue in 2020 and beyond; the growth of the global wheat and hemp markets; Arcadia's future capital requirements and ability to satisfy its capital needs; and the other risks set forth in Arcadia's filings with the Securities and Exchange Commission from time to time, including the risks set forth in Arcadia's Annual Report on Form 10-K for the year ended December 31, 2018 and other filings. These forward-looking statements speak only as of the date hereof, and Arcadia Biosciences, Inc. disclaims any obligation to update these forward-looking statements.
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SOURCE Arcadia Biosciences, Inc.