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RKDA: Arcadia Biosciences has been transformed by the acquisition of Zola, Soul Spring, Saavy Naturals & Provault brands, along with Tritordeum into a consumer brand-name company

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By Steven Ralston, CFA



Arcadia Biosciences (NASDAQ:RKDA) is on the cusp of meaningful revenues driven by management’s numerous initiatives, which have fundamentally transformed Arcadia into a revenue-generating, brand-name company. The recent acquisition of four consumer brands in the wellness product and good-for-you food/beverage spaces has created a synergistic revenue base to support the company’s wheat and hemp platforms.

In the consumer brand-name product space, Arcadia acquired four brand name franchises in the CBD and food & beverage industries: Zola coconut water, Soul Spring natural hemp- derived CBD bath & body products, Saavy Naturals natural topical body care products and PROVAULT natural hemp-derived CBD-infused sports performance products.

The acquisitions provides not only the brands that currently generate approximately $6 million in annual revenues, but also distribution channels and a management team to sell these consumer products in the retail grocery and CBD wellness spaces. In addition, access to over 5,000 retail doors should enhance the company’s ability to drive direct-to-consumer sales for both the GoodWheat and GoodHemp platforms.

In the hemp space over the last six months, the company has created a platform in Canada, first by entering into a distribution agreement with Tritium 3H, second by receiving AOSCA Certification on four GoodHemp varieties (Rogue, Umpqua, Santiam and Potomac) and lastly by gaining Health Canada’s approval of three GoodHemp varieties (Umpqua, Rogue and Santiam). Consequently, Arcadia was able to ship its first GoodHemp seed order to Tritium 3H for Canada’s 2021 planting season.

The GoodWheat franchise has been developed through several recent relationships with Three Farm Daughters (U.S.), Bioceres (Latin America), GoodMills (Europe) and Corner Foods (China and Israel). During the first quarter, the e-commerce architecture has been optimized as management targets the introduction of two or three new GoodWheat products in 2021.

In April 2021, Arcadia also acquired the physical and intellectual property assets of Agrasys S.A, a food ingredient company including the exclusive license to commercialize Tritordeum, a non-GMO combination of durum wheat and wild barley. Both GoodWheat and Tritordeum can synergistically benefit by further commercial growth from their respective growing distribution footprints in North America and Europe.

The Verdeca JV relationship with Bioceres Crop Solutions for the commercialization of HB4 soybean technology in the Central and South America has been restructured. As a result, Arcadia Biosciences has the right to a future royalty stream of up to $10 million, along with the receipt of 1,875,000 unregistered shares of BIOX common stock, which increased in value by approximately $7,463,000 during the first quarter of 2021alone.

Arcadia is well-funded to advance management’s growth initiatives related to GoodWheat and GoodHemp. The company’s liquidity was strengthened through two private placements in the last six months, which provided net proceeds of over $30.5 million.

The acquisition of Zola, Soul Spring, Saavy Naturals and Provault, along with Tritordeum (Agrasys S.A.) has transformed Arcadia Biosciences into a consumer brand name company with a growing revenue base.

Acquisition of 4 Consumer Brands & Distribution Channels

On May 17, 2021, Arcadia Biosciences announced the acquisition of the assets of Lief Holdings, LLC, EKO Holdings, LLC and Live Zola, LLC for $4.0 million and 827,400 shares of RKDA. The acquisition includes a portfolio of four Lief brands encompassing approximately 80 SKUs:

Zola coconut water (livezola.com)

Soul Spring line of CBD-infused bath and body products (mysoulspring.com)

Saavy Naturals line of all-natural body care products (saavynaturals.com)

Provault CBD-infused athletic performance formula (provaultcbd.com/)

The acquisition includes a 20,000-square foot, GMP-licensed, ISO-certified manufacturing facility and distribution access to over 5,000 retail doors and relationships, including Wegmans, The Vitamin Shoppe, Sprouts, Wegmans, Albertsons, Safeway and others. Having developed an e-commerce platform for Three Farm Daughters’ GoodWheat products, there is meaningful potential to expand transfer this digital infrastructure to the Lief brand where less than 10% of sales are generated online.

In addition, the CBD-infused and wellness product lines increase Arcadia’s verticalization in the CBD industry all long the seed-to-sale supply chain from the development of germplasm to marketing brand-name consumer products.

Acquisition of European Food Ingredient Platform

In April 2021, Arcadia Biosciences acquired the assets of Agrasys S.A, a food ingredient company for €205,000 (roughly $250,000). Agrasys holds the exclusive license for commercialization Tritordeum, a proprietary nutritious cereal grain that is high in fiber, protein and antioxidants. It was developed at the Instituto de Agricultura Sostenible - Consejo Superior de Investigaciones Científicas (IAS-CSIC), which conveyed the exclusive license for commercialization to Agrasys, which Arcadia now holds.

Based in Barcelona, Spain, Agrasys S.A is a European food ingredient platform currently encompasses more than 50 grain producers and 25 millers & distributors. Tritordeum has been initially commercialized in 10 countries through seven retailers in Europe.

Tritordeum (a non-GMO combination of durum wheat and wild barley native to Chile and Argentina) is a water-efficient cereal grain with good disease and pest resistance. Finished products made with Tritordeum (such as bread, pasta, baked snacks and beer) have a unique golden color and a slightly sweet, buttery taste.

First Quarter Financial Results

On May 17, 2021, Arcadia Biosciences reported financial results for the year ending March 31, 2021. Total revenues increased 421% to approximately $828,000, primarily driven by sales of GoodWheat grain and higher GLA product sales. Royalty revenues were $25,000.

Total operating expenses increased 2.0% to approximately $6.2 million. Cost of product revenues increased 548% to approximately $856,000, primarily driven by additional sales. R&D expenses decreased 48.4% to approximately $1.16 million, primarily due to lower employee-related expenses and the absence of Verdeca-related expenses. SG&A expenses increased 9.3% (or $346,000) to approximately $4.06 million, primarily driven by higher employee-related expenses and increased commercial activities.

For the first quarter of 2021, Arcadia Biosciences reported a net income attributable to shareholders of $2.06 million (or $0.11 per diluted share), of which $322,000 was related to the change in fair value of stock warrants, a non-cash item. Without this non-operating item, Arcadia’s operating net income was $1.74 million (or $0.09 per diluted share).

Investors ought to be aware the $7.463 million was recorded as an unrealized gain on corporate securities in the first quarter of 2021 due to the increase in the fair market value of the 1,875,000 shares of Bioceres held by Arcadia Biosciences obtained through the Verdeca transaction in November 2020.

As of March 31, 2021, working capital was approximately $51.0 million, a $25.6 million improvement from December 31, 2020. Thus far in 2021, shares outstanding have increased by 58.6% to 21,336,249 shares since December 31, 2020, primarily due a private placement of 7,876,784 shares issued on January 28, 2021.

GoodHemp Developments in Canada

On April 20, 2021, Arcadia Biosciences announced that Health Canada approved three GoodHemp™ varieties: Umpqua, Rogue and Santiam. The approval enabled the sale of these three varieties in Canada. Accordingly, Arcadia was able to ship its first GoodHemp seed order to Tritium 3H for Canada’s 2021 planting season.

Previously, in early February 2021, four (4) GoodHemp varieties (Umpqua, Rogue, Santiam and Potomac) were approved by the variety review board of AOSCA (National Association of Official Seed Certifying Agencies). These certifications give growers assurances of quality, uniformity and performance. The review board is composed of representatives from seed certifying agencies, academia, the seed industry and USDA.

Umpqua is a CBD-dominant, early photoperiod variety with a unique terpene profile.

Rogue is a CBD-dominant, high yielding intermediate photoperiod variety with extraordinary yields under low planting densities.

Santiam is a CBD-dominant, early photoperiod variety with well above average yields in northern latitudes.

Potomac is a CBD-dominant, full season photoperiod that produces large plants with a heavy yield.

This independent validation was a major milestone toward the ability of selling these GoodHemp varieties in Florida (which requires AOSCA certification) and Canada (which requires AOSCA certification and an approval by Health Canada).

In late November 2020, Arcadia Biosciences signed an exclusive hemp distribution agreement for Canada with Tritium 3H in late November 2020. Based in Alberta, Tritium 3H is a Canadian hemp seed company that works with breeders, producers and end-users in order to provide hemp varieties that will perform well in Canada’s unique climatic regions. In order to ensure the performance that Canadian industrial hemp growers expect, Tritium 3H conducts field testing in both regional and national trials and confirms certified seed production before distributing hemp varieties in Canada.


For Arcadia Biosciences, a reasonable methodology is a discounted cash flow (DCF) model that estimates future cash flows and discounts them by using the cost of capital in order to attain a net present value. Arcadia’s revenues are being estimated using projected by industry forecasts and our estimates of the company’s market share. The model is arranged by products lines, namely GoodHemp, GoodWheat, beverage and hemp-derived CBD brands (Zola, Soul Spring, Saavy Naturals & Provault), Tritordeum and HB4 soybeans. Our DCF model (which applies a 13% discount rate and a terminal P/S ratio of 0.76) indicates a NAV share price target of $7.18 per share on a fully diluted basis.

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