Arcadia Biosciences (RKDA) Announces Sale of GoodWheatTM to Above Food Corp.

Rhea-AI Summary

Arcadia Biosciences (RKDA) announced the sale of its GoodWheat brand to Above Food Corp. for $4 million net. This deal aims to leverage Above Food's vertically integrated supply chain to commercialize Arcadia's wheat IP. GoodWheat includes products like pasta and pancake mixes, made from Arcadia's high-fiber, high-protein, non-GMO wheat. Arcadia CEO Stan Jacot sees this as a partnership to scale their wheat IP efficiently. Above Food CEO Lionel Kambeitz emphasizes that their supply chain will ensure the quality and security of these grains. Arcadia plans to continue pursuing other crop licensing and royalty streams.

Positive

• Sale of GoodWheat brand for $4 million net.
• Potential for efficient commercialization of Arcadia's wheat IP.
• Collaboration with Above Food's vertically integrated supply chain.
• Continued pursuit of other crop licensing and royalty streams.
• GoodWheat products are currently available on over 3,500 shelves nationwide and on Amazon.

Negative

• Monetizing IP early might indicate a need for immediate cash.
• Potential dependency on Above Food's commercialization success.

Insights

Financial Analyst

From a financial perspective, the sale of GoodWheat for $4 million offers Arcadia Biosciences (RKDA) a stream of revenue that can be immediately recognized. This transaction provides a much-needed capital influx, potentially improving liquidity and allowing the company to focus on other high-margin IP ventures.

However, the sale also means relinquishing direct control over a potentially high-growth product line, transferring it to Above Food Corp. Given GoodWheat's current shelf presence in over 3,500 stores and on Amazon, this could represent a loss of future revenue streams for Arcadia. The strategic partnership alluded to by Stan Jacot might mitigate this, but investors should remain cautious about the long term financial impact.

It's important to consider whether the $4 million valuation adequately reflects the future growth and profit potential of GoodWheat, especially with increasing consumer interest in health-conscious foods. Additionally, the continued focus on licensing and royalties may offer Arcadia a more diversified income, yet these revenue streams often come with higher uncertainty and longer lead times.

In the short term, the influx of cash is beneficial, but the long-term financial benefits remain uncertain dependent on the partnership dynamics and Above Food's ability to effectively scale GoodWheat.

Market Research Analyst

The decision to sell GoodWheat to Above Food Corp. comes at a time when consumer demand for health-centric, non-GMO foods is rising. This trend provides Above Food with a strategic advantage, given their vertically integrated, farm-to-fork supply chain which should allow them to scale and market these products efficiently.

The integration with Above's existing portfolio of nutrient-dense, plant-based products could lead to better market penetration and brand recognition for GoodWheat. This move could also leverage Above's marketing and distribution network, potentially accelerating GoodWheat's adoption.

For Arcadia, this transaction could be seen as a strategic divestiture, enabling them to concentrate on their core IP development without the operational burdens of product marketing and distribution. However, the success of this approach will heavily depend on Above Food's execution capabilities.

Ultimately, while this transaction aligns well with market trends, investors should keep an eye on how Above Food leverages GoodWheat’s IP and whether Arcadia can successfully focus on other innovative IP ventures to compensate for the sale.

-- Transaction will accelerate scaling Arcadia’s wheat IP with Above’s vertically integrated, farm-to-fork supply chain --

DALLAS--(BUSINESS WIRE)-- Arcadia Biosciences, Inc.^® (Nasdaq: RKDA), a producer and marketer of innovative, plant-based health and wellness products, and Above Food Corp., an innovative food company leveraging its vertically integrated supply chain to deliver differentiated ingredients and consumer products, announced today that Above Food will purchase the GoodWheat^TM brand of better-for-you wheat products from Arcadia for $4 million net.

The GoodWheat brand includes pastas, pancake mixes and mac & cheese mixes, all made with Arcadia's proprietary, better-for-you non-GMO wheat grain that is naturally higher in fiber and protein with nothing added. (Photo: Business Wire)

“We see this as the beginning of a partnership between Arcadia and Above Food to accelerate scaling Arcadia’s wheat IP,” said Stan Jacot, president and CEO of Arcadia. “The GoodWheat brand fits perfectly into Above Food’s nutrient-dense, plant-based consumer product and specialty ingredient portfolios. Above’s vertically integrated, farm-to-fork identity preservation system, reinforced by Above’s owned assets could provide efficient commercialization of Arcadia’s wheat IP in the future,” he added. “This transaction enables us to monetize our IP early while we continue to pursue other crop licensing and royalty streams.”

The GoodWheat brand was launched in 2018 to help consumers get more fiber in their diets by increasing the amount of fiber in the delicious foods they love. GoodWheat brand uses Arcadia’s unique, patented, better-for-you non-GMO wheat grain that is naturally higher in fiber and protein with nothing added.

Arcadia introduced five varieties of GoodWheat pasta in June 2022, followed by six varieties of pancake mixes and single-serve Quikcakes^TM in August 2023. Three varieties of mac & cheese were launched in November of 2023. GoodWheat products are currently available on more than 3,500 shelves nationwide and on Amazon.

“Consumers are asking for delicious foods that are better for you. The use and the advancement of this existing non-GMO GoodWheat IP for the planting seeds utilized in Above’s grower supply chain will serve the needs of these health and quality conscious consumers,” stated Lionel Kambeitz, CEO for Above Food Corp. “Building better for you foods begins with the grower producing grains from the highest quality, non-GMO seeds. Above’s identity preserved field-to-fork supply chain ensures the quality and security of these grains.”

Lake Street Capital Markets served as exclusive financial advisor to Arcadia Biosciences in this transaction.

About Arcadia Biosciences, Inc.

Since 2002, Arcadia Biosciences (Nasdaq: RKDA) has been innovating crops to provide high-value, healthy ingredients to meet consumer demands for healthier choices. With its roots in agricultural innovation, Arcadia cultivates next-generation wellness products that make everybody feel good. For more information, visit arcadiabio.com.

About Above Food Corp.

Above Food Corp. is a differentiated, regenerative ingredient company that celebrates delicious products made with real nutritious, flavorful ingredients and delivered with transparency. Above Food’s vision is to create a healthier world — one seed, one field, and one bite at a time. With a robust chain of custody of plant proteins, enabled by scaled operations and infrastructure in primary agriculture and processing, Above Food delivers nutritious foods to businesses and consumers with traceability and sustainability. Above Food’s consumer products and brands are available online at abovefood.com and in leading grocers across Canada and the United States.

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 the partnership between Arcadia and Above Food and the commercialization of Arcadia’s wheat intellectual property. 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, the risks set forth in Arcadia’s Annual Report on Form 10-K for the year ended December 31, 2023 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240516202271/en/

Arcadia Biosciences, Inc.

TJ Schaefer

Chief Financial Officer

ir@arcadiabio.com

Above Food Corp.

Media: media@abovefood.com

Investors: investors@abovefood.com

Source: Arcadia Biosciences, Inc.

FAQ

What is the value of the GoodWheat sale to Above Food Corp.?

The GoodWheat brand was sold to Above Food Corp. for $4 million net.

What products are included in the GoodWheat brand?

The GoodWheat brand includes pastas, pancake mixes, and mac & cheese mixes.

What is unique about GoodWheat products?

GoodWheat products are made from Arcadia's proprietary non-GMO wheat, high in fiber and protein.

How does Above Food plan to commercialize GoodWheat?

Above Food will use its vertically integrated, farm-to-fork supply chain to commercialize GoodWheat products.

What is Arcadia Biosciences' future plan post-GoodWheat sale?

Arcadia plans to pursue other crop licensing and royalty streams.