Arcadia Biosciences (RKDA) Acquires Lief Brands, a Portfolio of CBD and Wellness Brands

DAVIS, Calif., May 17, 2021 /PRNewswire/ -- Arcadia Biosciences, Inc.^® (Nasdaq: RKDA), a leader in science-based approaches to enhancing the quality and nutritional content of crops and food ingredients, today announced it has acquired the assets of Lief Holdings, LLC and its portfolio of wellness products from The Parent Company, along with select assets of Live Zola, LLC. The acquisition includes leading consumer CBD brands like Soul Spring^TM, the top selling CBD-infused botanical therapy brand in the natural category, as well as Saavy Naturals^TM, a leading line of all-natural body care products. The purchase price for these assets was $4.0 million in cash, plus 827,400 shares of Arcadia common stock.

"Arcadia has been looking to further build out its channel and brand strategy for consumer goods in the CBD wellness space, and we were fortunate to accelerate our efforts by acquiring these assets from The Parent Company," said Matt Plavan, Arcadia's CEO. "Through this transaction, we have a unique opportunity to leverage a number of synergies between the two companies to significantly increase the ultimate value of the combined assets."

The current portfolio of Lief and Zola products includes four brands representing a diverse product base addressing 17 categories in the health and wellness space. Brands include:

• Soul Spring — The No. 1 selling hemp CBD bath and body brand in the natural products channel. Soul Spring was launched in June 2019 targeting multiple channels including natural, specialty, conventional, drug and online. mysoulspring.com
• Saavy Naturals — A line of all-natural body care products including soaps, lotions and creams using proprietary formulations and natural ingredients, sourced from around the world. saavynaturals.com
• Zola^® — A leading coconut water sourced exclusively with sustainably grown coconuts from Thailand, and recently named the best tasting coconut water by Epicurious, a Conde Nast digital brand. livezola.com
• Provault^TM — A CBD-infused sports performance formula made with natural ingredients, providing effective support and recovery for athletes. Product formulations include muscle rubs, bath salts, and other creams. provaultcbd.com

Soul Spring, Saavy Naturals and Zola represent approximately $6 million in recurring annual revenues. Provault was launched in March of this year, anchored at Sprouts Farmers Market, and is showing good reorder velocity. The early positive reception coupled with the strong demand for sports formulas for pain management makes Provault a potentially strong contributor to revenue growth.

As part of the transaction, Arcadia gains access to distribution channels and relationships in more than 5,000 stores nationally including Wegmans, The Vitamin Shoppe, Sprouts and others. Arcadia also acquires the Lief operations, which occupy a 20,000 square foot, GMP-licensed, ISO-certified manufacturing facility with onsite capabilities including ingredient sourcing, formulation, manufacturing, QA/QC, warehousing, flexible order fulfillment and logistics.

Fundamentally important to the value of this transaction for Arcadia is the addition of an experienced management team with a proven track record to efficiently scale brands in the CBD and food and beverage sectors, including growth strategy, manufacturing, supply chain and sales and marketing. Lief employees are expected to join Arcadia with the acquisition, including senior leadership executives who bring years of expertise and success in the fast-moving consumer goods industry.

Chris Cuvelier, founder and CEO of Zola will join Arcadia as chief growth officer, and Brett Michel, COO of Lief, will join as general manager of the acquired brands. Belinda Yao, the former VP of operations for Zola, joined Arcadia as VP of operations earlier this month.

"The benefits this transaction brings to both Arcadia and Lief are compelling," said Plavan. "In addition to the operational and organizational synergies, we expect that future investments by Arcadia will have an immediate and positive impact on the Lief family of brands.  For example, not only do we now have an extensive, ready-made national retail grocer channel for our GoodWheat consumer product offering, currently less than 10 percent of Lief sales come from online orders, so there's tremendous potential to expand sales of the Lief brands through the digital e-commerce infrastructure developed for our GoodWheat platform." 

In connection with the closing of the acquisition, Arcadia will grant inducement stock options to purchase a total of 248,000 shares of its common stock to 14 new employees who were employees of the sellers. The stock options were granted outside of Arcadia's 2015 Omnibus Equity Incentive Plan (but under the same terms) and are material to the employees' acceptance of employment with Arcadia. The inducement grants were made and approved in accordance with Nasdaq Listing Rule 5635(c)(4).

The stock options will be issued upon each employee's commencement of employment (the grant date), and all the stock options will have an exercise price equal to the closing price of Arcadia's common stock on each respective grant date. Each stock option has a term of ten years and vests over four years, with 25 percent of the shares subject to the stock option vesting on the first anniversary of the employee's employment, and an additional 1/48^th of the shares vesting each month thereafter, subject to continued service through the applicable vesting dates. One of the new employees who received an inducement stock option was Chris Cuvelier, Arcadia's new Chief Growth Officer.  Mr. Cuvelier's stock option is exercisable for 100,000 shares.

About Arcadia Biosciences, Inc.
Arcadia Biosciences (Nasdaq: RKDA) is a leader in science-based approaches to enhancing the quality and nutritional value of crops and food ingredients. The company's GoodWheat™ branded ingredients deliver health benefits to consumers and enable consumer packaged goods companies to differentiate their brands in the marketplace. The company's GoodHemp™ seed catalog delivers genetically superior hemp seeds, transplants and extracts, bringing the benefits of modern agriculture to an emerging crop. For more information, visit www.arcadiabio.com.

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 projected increase in revenue growth, the synergies between Arcadia's business and the purchased assets, and combined asset value. 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: Arcadia's and its partners' and affiliates' ability to develop commercial products incorporating their traits, and complete the regulatory review process for such products; the customer demand and commercial success of such products; Arcadia's compliance with laws and regulations that impact Arcadia's business, including the sale of products containing CBD, and changes to such laws and regulations; the successful integration of the acquired brands into Arcadia's business; Arcadia's future capital requirements and ability to satisfy its capital needs; and the other risks set forth in Arcadia's filings with the Securities and Exchange Commission from time to time, including the risks set forth in Arcadia's Annual Report on Form 10-K for the year ended December 31, 2020 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.

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SOURCE Arcadia Biosciences, Inc.