Arcadia Biosciences may be acquired or merged
DAVIS, California Arcadia Biosciences has enlisted the Minneapolis-based investment bank Lake Street Capital Markets to investigate potential strategic options. These could involve a joint venture, a capital raising, a licensing agreement, a merger, an asset sale, an acquisition, or the sale of the business itself.
Stanley E. Jacot, president and chief executive officer, stated during an August 10 earnings call to discuss second-quarter results, “There are many categories in the grocery aisle where our proprietary wheat can provide significant differentiation, and we believe there is a tremendous opportunity to scale our business faster by purchasing an existing brand in a different category that has broad shelf placement and established distribution.” “Although we have mastered the art of target purchases, we have also fielded multiple approaches from parties seeking a more substantial combination. Therefore, we believe that now is the ideal moment to discuss your options with a dispassionate banking partner, especially since we ended the second quarter of 2023 with a strong cash position.
By the end of the year, Arcadia hopes to have GoodWheat in 3,000 retail locations. Mr. Jacot stated that the brand may also be expanded into non-food areas.
“There will be more once we have distribution,” he stated.
In the third quarter, Arcadia will reduce the price of GoodWheat pasta in an effort to become more competitive. Mr. Jacot stated that he anticipates a minor erosion of margins.
“It will likely be closer to the mid- to low-20s than the mid- to high-20s,” he stated.
The Davis, California-based Arcadia reported net income of $823,000 for the quarter that ended on June 30. This is equivalent to 61¢ per share of common stock. The previous year, at the same period, the company had a net loss of $3.78 million. In the second quarter of this year, there was a $4.4 million non-cash gain due to the shift in the fair value of the common stock warrant and option liabilities.
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$1.39 million in revenue was a 64% decrease from $3.86 million. Sales of body care items and GoodWheat grain, which are no longer in Arcadia’s portfolio, contributed to revenues in the first half of the previous fiscal year.
Arcadia saw a net loss of $8.56 million during the first half of the fiscal year, as opposed to a net loss of $8.27 million during the same period the previous year. Revenues for the six months were $2.90 million, a 59% decrease from $7.08 million.