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Subsequent Events
9 Months Ended
Sep. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events

17. Subsequent Events

 

Verdeca LLC Sale Transaction

On November 12, 2020, Arcadia Biosciences, Inc. (the “Company”) entered into a Master Transaction Agreement (the “Agreement”) with Bioceres Crop Solutions Corp. (“BIOX”) pursuant to which (i) the Company sold all of its memberships interests it owned in Verdeca, LLC (“Verdeca”) to Bioceres, Inc., a wholly owned subsidiary of BIOX, and (ii) the Company and BIOX entered into a license agreement for certain intellectual property rights, including rights to the Company’s HB4 soybean trait and its GoodWheat portfolio of specialty wheat products in South and Central America.   Prior to the transaction, Verdeca was equally owned by the Company and Bioceres, Inc.

In consideration for the sale of the membership interests in Verdeca and entering into the license agreement, on November 12, 2020, BIOX paid the Company $5,000,000 in cash and issued the Company 1,875,000 shares of BIOX common stock.  BIOX will also pay the Company an additional (i) $1,000,000 payable in five equal monthly payments beginning on December 12, 2020 for transaction expenses and fees and (ii) $2,000,000 payable in four equal quarterly payments with the first payment commencing within thirty days of either BIOX reaching commercial plantings of at least 200,000 hectares of HB4 soybeans or if China approves the HB4 soybean trait for “food and feed”.  In addition to the above payments, BIOX will also pay the Company quarterly royalty payments equal to six percent (6%) for the net revenues BIOX, or its affiliates, receive from HB4 soybean sales and twenty-five percent (25%) from wheat sales; provided that royalty payments for HB4 soybeans shall not exceed $10,000,000.

The Company agreed not to sell or transfer any shares of BIOX common stock it received in this transaction for a period of 180 days without the prior written consent of BIOX, subject to certain exceptions allowing the Company to pledge shares to a lender as collateral.  In addition, by December 12, 2020, the Company is required to seek consents from certain third parties who have right of first refusal or other similar rights to the traits being licensed by the Company to BIOX.  If a third party exercises their rights of first refusal on the same terms and conditions as agreed upon by BIOX, then the Company has an option to pay BIOX $5,000,000 or 625,000 shares of BIOX common stock.  Upon such payment, BIOX shall have no further rights to such trait which was subject to the right of first refusal. The Company entered into a pledge and security agreement with BIOX for the 625,000 shares of BIOX common stock that are subject to the potential clawback.