Arcadia Biosciences (RKDA) Stock Climbs On Management Update

Arcadia Biosciences Inc (NASDAQ: RKDA) is making a run for the top early on in today’s trading session. The stock is already up nearly 35% and climbing.

The gains come after the company announced a management update. Here’s what’s going on:

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RKDA Stock Pops On Management Update

In a press release issued early this morning, Arcadia Biosciences announced a management update that seems to be exciting investors. In the announcement, the company said that Raj Ketkar, President and CEO, will retire on September 1, 2019.

Following Mr. Ketkar’s retirement, Matthew Plavan, CFO as the new CEO of the company. Pam Haley will succeed Mr. Plavan as the new CFO at RKDA.

Mr. Plavan has proven his abilities as a leader since joining the company as its CFO in 2016. Through his employment, Plavan has played an instrumental role in the company’s shift twoard crop innovation and commercialization. He has also earned a position as the president of the company’s new strategic hemp business unit, known as Arcadia Specialty Genomics, a move that was announced in February.

Nonetheless, his leadership role didn’t start with employment at RKDA. In fact, he brings 30 years of experience with him due to previous leadership roles in both public and private companies. Throughout his career, Plavan has worked in the ag-tech, cell-therapy and healthcare industries.

Before joining Arcadia, Plavan served as the CEO and a board member at Cesca Therapeutics. He holds a Bachelors of Arts in Business Economics and is a certified public accountant.

Pam Haley has been with RKDA for quite a while, joining the team back in 2005. Since her employment, she has served as several positions, starting with the company as accounting manager and most recently holding the position of controler.

Haley has more than 25 years of financial and accounting experience, generally working for the telecommunications, public accounting and semiconductor industries before her employment at Arcadia.

In a statement, Mr. Ketkar, had the following to offer:

I am thankful to the board and the team at Arcadia for their support during my tenure at Arcadia. I wish Arcadia the best in its journey to continued success.

The above statement was followed up by Mr. Plavan. Here’s what he had to say:

I am grateful to the board for this opportunity and honored to lead such an exceptional organization of scientists, strategists and innovators. I look forward to working with this talented team to achieve large-scale commercialization of our signature nutritional ingredient, GoodWheat™, and accelerate our vertically-integrated hemp seed, cultivation and extraction operations in Hawaii and other legal U.S. markets.

Our commercial progress thus far in 2019, punctuated by our Arista wheat collaboration announced today, has illuminated our path to new revenue generation. With global distribution channels set for our flagship GoodWheat ingredient— high fiber resistant starch wheat—and our acquired experience with hemp in the lab, the field and in the product markets, we now have a clearer view on the timing and scale of incoming revenues. In fact, we believe these revenues are imminent and could scale significantly from our current levels.

As a result, we can with confidence provide our investors financial guidance to better align market expectations for growth and value creation at Arcadia. Specifically, in 2020 and 2021, we expect total revenues will exceed $10 million and $30 million, respectively. And, with this revenue trajectory, we expect to begin generating net cash from operations in mid-to-late 2021.

We are aligned around a single-minded focus: profitable growth. We look forward to reporting our key milestone achievements in the lab, in the field and in the commercial markets as we progress towards accomplishing these financial goals.

This Is Big News

While management updates don’t generally have this type of reaction in the market, there’s a good reason that RKDA investors are so excited. The truth of the matter is that we knew that Ketkar was heading out and uncertainty surrounding his successor was a concern.

With today’s announcement, investors learned that Arcadia will be led by a player on the company’s own team. With Plavon playing an instrumental role in the company’s recent shift in focus, he knows the ins and outs of the company and will easily be able to pick up where Ketkar left off. That’s exciting news.

This, combined with the fact that Plavan’s position as CFO will be succeeded by Pam Haley shows that management at the company will not need to be brought up to speed from the outside. By promoting from within, a smooth transition is likely ahead.

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