Arcadia Biosciences, Inc.

Thank you for standing by. My name is Prilla and I will be your conference operator today. At this time, I would like to welcome everyone to the Arcadia Biosciences Q1 2024 Financial Results and Business Highlights Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press the star one again. Thank you. I would now like to turn the conference over to TJ Schaefer, Chief Financial Officer at Arcadia. Please go ahead.

Thank you, and good afternoon. Joining me on the call today is Dan Jaycott, Arcadia's President and Chief Executive Officer. This call is being webcast, and you can refer to the company's press release at arcadiabio.com. Before we start, 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. You can review the company's Safe Harbor language in our most recently filed 10-K. With that, I'll now turn the call over to Stan.

Good afternoon, everyone, and thank you for joining us today to review our first quarter results for 2024. Since we last talked six weeks ago, I am pleased to report that the positive business trends from Q4 2023 have continued in Q1 2024. Revenue continues to grow, both sequentially and year over year. Our gross profit margins have been greater than 30% for five consecutive quarters. Operating expenses continue to decline at a double-digit pace versus last year. All of these factors have contributed to Q1 2024 achieving the lowest loss from continuing operations in over six years. Let's now turn our attention to Good Wheat. The Good Wheat brand continues to expand, with Q1 adding a couple hundred stores of distribution on pancake and waffle mixes. Our focus continues to be nurturing our existing points of distribution and building success stories by category. There are plans in place for each customer, addressing everyday pricing, promoted pricing, shelf placement, queue expansion, and account-specific marketing. These plans are required at significant expense to execute, but are necessary in order to achieve brand scale and defend shelf space from fierce competition. On our last call, I mentioned several accolades our Good Wheat brand had received from some significant publications, including Better Homes and Gardens and the website Eat This, Not That. And I want to share another accolade that Good Wheat has received from a customer. In Q1, we launched Good Wheat Mac and Cheese nationwide on Amazon in three varieties, classic cheddar, white cheddar, and three cheese. And Amazon recently selected Good Wheat 3 Cheese Mac and Cheese as an Amazon's Choice New Arrival Pick. This designation is solely driven by Amazon's criteria, which includes being highly rated, well-priced, and available to ship immediately. This is one more example from an independent source that proves that we already know that our proprietary wheat is commercially viable to create great-tasting products while sneaking in more fiber and proteins. To reiterate, our business model includes expanding the use of our wheat technology into food products beyond good wheat. There are thousands of products across the grocery store and in food service that can offer these same valuable benefits. So we see a long-term path to generate recurring royalty revenue. We have been actively pursuing two key steps to monetizing this technology. One, partner with a wheat supply chain in order to produce a scalable, cost-effective, identity-preserved wheat supply. We need our wheat technology integrated into all customer preferred wheat varieties and then efficiently move from seed to farm to mill to delivered flour. We are currently in final discussions with potential partners and hope to update you soon. In parallel, the second step is to work with large food manufacturers to create a demand for our wheat. This can create a long-term pull-through partnership and ensure we have enough volume through our supply chain system. Conversations are underway across several categories, and it will take some time to develop products with their R&D groups. Now, let's move to Zola Coconut Water. The Coconut Water category continues to perform well in Q1 2024, with unit sales and dollar sales both increasing 10% versus a year ago, according to Nielsen data for the 13 weeks ending March 30, 2024. Zola Momentum is continuing in the latest four weeks ending March 30, 2024, shows Zola growing 15% in dollar sales and 14% in unit sales. Zola is back to growing this year in the category, and we are optimistic that this double-digit growth will continue in 2024 for a couple of reasons. One, our flavor innovation will begin shipping in Q2, adding more variety to Zola's naturally hydrating lineup. Original lime and pineapple flavors in the new 16.9-ounce refillable Tetra Pak container have been well received by retailers, as pineapple is the number one coconut water flavor, and lime is the number one flavor in sparkling water. Two, we have confirmed several new accounts that will be adding Zola to their single-serve beverage set in the produce section. The store count for this new distribution is nearly 1,300 stores, bringing our total store count for Zola to over 3,300 by the end of Q2. Our focus will be to ensure these new stores can quickly achieve the same velocity and dollar sales as our current retailers enjoy. So we expect Zola to be a key growth driver for us in the future for both revenue and gross profit, and we will continue to explore the next wave of consumer preferred innovation. The last initiative to discuss today is the strategic review announced last year, which stated that Arcadia would explore a range of strategic options, which could include an asset sale, acquisition, merger, sale, or other strategic transaction. Since that time, we, along with our bankers, have engaged with a significant number of potential transaction partners to find the best outcome for Arcadia and our shareholders. And while we aren't ready to provide a detailed update today, we continue to have discussions and perform the due diligence work necessary to accelerate our ability to monetize our IP and deliver cash flow positive results. We will keep you updated as material events occur and we must point out that there can be no assurance that this exploration of strategic alternatives will result in the company entering or completing any transaction, and no timetable has been set for the conclusion of the strategic review. As discussed in our last call, we anticipated our 2024 net operating loss to be under $10 million for the first time in the company's history. Our Q1 performance and trend has met our expectation in order to deliver that objective and we plan to grow revenue, optimize margins, and reduce operating expenses for the remainder of 2024 in order to achieve this goal. With that, I'll turn the call over to TJ to discuss our Q1 financial results. TJ?