ChromaDex Corp. (Form: 10-Q, Received: 11/10/2011 08:22:57)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 1, 2011

Commission File Number: 000-53290

CHROMADEX CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware		26-2940963
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
10005 Muirlands Blvd. Suite G, Irvine, California		92618
(Address of Principal Executive Offices)		(Zip Code)

Registrant's telephone number, including area code: (949)-419-0288

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, non-accelerated filer or smaller reporting company. See definition of “large accelerated filer, accelerated filer and smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o

Non-accelerated filer o Smaller reporting company x

(Do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Number of shares of common stock of the registrant: 74,609,996 outstanding as of November 10, 2011.

Table of Contents

CHROMADEX CORPORATION

2011 QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION (UNAUDITED)

	ITEM 1.	FINANCIAL STATEMENTS:

		CONDENSED CONSOLIDATED BALANCE SHEETS AS OF OCTOBER 1, 2011 AND JANUARY 1, 2011 (UNAUDITED)	1
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED OCTOBER 1, 2011 AND OCTOBER 2, 2010 (UNAUDITED)	2
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE NINE MONTHS ENDED OCTOBER 1, 2011 AND OCTOBER 2, 2010 (UNAUDITED)	3
		CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY FOR THE NINE MONTHS ENDING OCTOBER 1, 2011 (UNAUDITED)	4
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED OCTOBER 1, 2011 AND OCTOBER 2, 2010 (UNAUDITED)	5
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)	6

	ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	13

	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	18

	ITEM 4.	CONTROLS AND PROCEDURES	18

PART II – OTHER INFORMATION

	ITEM 1.	LEGAL PROCEEDINGS	19

	ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	19

	ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	19

	ITEM 4.	[REMOVED AND RESERVED]	19

	ITEM 5	OTHER INFORMATION	19

	ITEM 6	EXHIBITS	19

	SIGNATURES		20

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PART I – FINANCIAL INFORMATION (UNAUDITED)

ITEM 1. FINANCIAL STATEMENTS

ChromaDex Corporation and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)
October 1, 2011 and January 1, 2011

Assets	October 1, 2011			January 1, 2011

Current Assets
Cash	$	2,069,308		$	2,226,459
Trade receivables, less allowance for doubtful accounts October 1, 2011 $14,000; January 1, 2011 $18,000		648,832			1,001,563
Inventories		2,500,798			1,423,035
Prepaid expenses and other assets		613,724			243,967
Total current assets		5,832,662			4,895,024

Leasehold Improvements and Equipment, net		1,182,453			1,303,108

Deposits and Other Noncurrent Assets
Deposits		43,160			31,415
Intangible assets, net		248,012			277,855
Total deposits and other noncurrent assets		291,172			309,270

Total assets	$	7,306,287		$	6,507,402

Liabilities and Stockholders' Equity

Current Liabilities
Accounts payable	$	1,306,547		$	514,598
Accrued expenses		712,473			371,020
Current maturities of capital lease obligations		70,876			78,577
Customer deposits and other		239,754			112,427
Deferred rent, current		59,933			62,664
Total current liabilities		2,389,583			1,139,286

Capital lease obligations, less current maturities		147,884			198,071

Deferred rent, less current		215,739			233,822

Stockholders' Equity
Common stock, $.001 par value; authorized 150,000,000 shares; issued and outstanding October 1, 2011 72,939,996 shares; January 1, 2011 60,875,325 shares		72,940			60,875
Additional paid-in capital		20,043,209			15,034,550
Accumulated deficit		(15,563,068	)		(10,159,202	)
Total stockholders' equity		4,553,081			4,936,223

Total liabilities and stockholders' equity	$	7,306,287		$	6,507,402

See Notes to Condensed Consolidated Financial Statements.

ChromaDex Corporation and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)
For the Three Month Periods Ended October 1, 2011 and October 2, 2010

	October 1, 2011			October 2, 2010

Sales	$	1,827,568		$	1,562,352
Cost of sales		1,361,101			1,059,626

Gross profit		466,467			502,726

Operating expenses:
Sales and marketing		650,516			235,582
General and administrative		2,213,636			1,140,815
Operating expenses		2,864,152			1,376,397

Operating loss		(2,397,685	)		(873,671	)

Nonoperating income (expenses):
Interest income		295			578
Interest expense		(7,522	)		(10,130	)
Nonoperating expenses		(7,227	)		(9,552	)

Net loss	$	(2,404,912	)	$	(883,223	)

Basic and Diluted loss per common share	$	(0.03	)	$	(0.01	)

Basic and Diluted weighted average common shares outstanding		70,625,913			60,118,183

See Notes to Condensed Consolidated Financial Statements.

ChromaDex Corporation and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)
For the Nine Month Periods Ended October 1, 2011 and October 2, 2010

	October 1, 2011			October 2, 2010

Sales	$	6,304,789		$	5,533,805
Cost of sales		4,237,008			3,437,417

Gross profit		2,067,781			2,096,388

Operating expenses:
Sales and marketing		1,661,998			688,552
General and administrative		5,786,204			2,535,386
Operating expenses		7,448,202			3,223,938

Operating loss		(5,380,421	)		(1,127,550	)

Nonoperating income (expenses):
Interest income		1,159			1,095
Interest expense		(24,604	)		(26,555	)
Nonoperating expenses		(23,445	)		(25,460	)

Net loss	$	(5,403,866	)	$	(1,153,010	)

Basic and Diluted loss per common share	$	(0.08	)	$	(0.03	)

Basic and Diluted weighted average common shares outstanding		66,190,731			44,193,266

See Notes to Condensed Consolidated Financial Statements.

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ChromaDex Corporation and Subsidiaries
Condensed Consolidated Statement of Stockholders' Equity (Unaudited)
Nine Months Ended October 1, 2011

					Additional					Total
	Common Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount		Capital		Deficit			Equity
Balance, January 1, 2011		60,875,325	$	60,875	$	15,034,550	$	(10,159,202	)	$	4,936,223

Share-based compensation		-		-		737,019		-			737,019

Exercise of stock options		29,149		29		19,319		-			19,348

Exercise of warrants		2,285,709		2,286		477,713		-			479,999

Net loss		-		-		-		(1,156,385	)		(1,156,385	)

Balance, April 2, 2011		63,190,183		63,190		16,268,601		(11,315,587	)		5,016,204

Share-based compensation		-		-		768,704		-			768,704

Exercise of stock options		14,099		14		7,036		-			7,050

Exercise of warrants		2,514,284		2,514		525,485		-			527,999

Net loss		-		-		-		(1,842,569	)		(1,842,569	)

Balance, July 2, 2011		65,718,566		65,718		17,569,826		(13,158,156	)		4,477,388

Share-based compensation		-		-		964,104		-			964,104

Exercise of warrants		7,221,430		7,222		1,509,279		-			1,516,501

Net loss		-		-		-		(2,404,912	)		(2,404,912	)

Balance, October 1, 2011		72,939,996	$	72,940	$	20,043,209	$	(15,563,068	)	$	4,553,081

See Notes to Condensed Consolidated Financial Statements.

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ChromaDex Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)
For the Nine Month Periods Ended October 1, 2011 and October 2, 2010

	October 1, 2011			October 2, 2010

Cash Flows From Operating Activities
Net loss	$	(5,403,866	)	$	(1,153,010	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation		247,024			232,786
Amortization of intangibles		55,843			55,053
Share-based compensation expense		2,469,827			706,221
Changes in operating assets and liabilities:
Trade receivables		352,731			(86,376	)
Inventories		(1,077,763	)		(545,563	)
Prepaid expenses and other assets		(381,502	)		(171,821	)
Accounts payable		791,949			267,294
Accrued expenses		341,453			113,244
Customer deposits and other		127,327			(37,866	)
Deferred rent		(20,814	)		(16,497	)
Due to officers		-			(1,178,206	)
Net cash (used in) operating activities		(2,497,791	)		(1,814,741	)

Cash Flows From Investing Activities
Purchases of leasehold improvements and equipment		(126,369	)		(124,759	)
Purchase of intangible assets		(26,000	)		(30,000	)
Net cash (used in) investing activities		(152,369	)		(154,759	)

Cash Flows From Financing Activities
Proceeds from issuance of common stock		-			3,486,626
Proceeds from exercise of stock options		26,398			-
Proceeds from exercise of warrants		2,524,499			1,041,749
Principal payments on capital leases		(57,888	)		(44,621	)
Net cash provided by financing activities		2,493,009			4,483,754

Net increase (decrease) in cash		(157,151	)		2,514,254

Cash Beginning of Period		2,226,459			471,378

Cash Ending of Period	$	2,069,308		$	2,985,632

Supplemental Disclosures of Cash Flow Information
Cash payments for interest	$	24,604		$	26,555

Supplemental Schedule of Noncash Investing Activity
Capital lease obligation incurred for the purchase of equipment	$	-		$	264,958

See Notes to Condensed Consolidated Financial Statements.

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Note 1. Interim Financial Statements

The accompanying financial statements of ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc. and ChromaDex Analytics, Inc. (collectively, the “Company”) include all adjustments, consisting of normal recurring adjustments and accruals, that, in the opinion of the management of the Company, are necessary for a fair presentation of our financial position as of October 1, 2011 and results of operations and cash flows for the three and nine months ended October 1, 2011 and October 2, 2010. These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended January 1, 2011 appearing in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on March 16, 2011. Operating results for the nine months ended October 1, 2011 are not necessarily indicative of the results to be achieved for the full year ending on December 31, 2011. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

The balance sheet at January 1, 2011 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

Note 2. Nature of Business and Significant Accounting Policies

Nature of business : The Company is a natural products company that provides proprietary, science-based solutions and ingredients to the dietary supplement, food and beverage, cosmetic and pharmaceutical industries. The Company supplies ingredients, phytochemical reference standards, and related phytochemical products and services. The Company recently launched its BluScience retail consumer line based on its proprietary ingredients. The Company provides these products and services at various terms with payment terms of primarily net 30 days.

Basis of presentation : The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated from these financial statements. The Company's fiscal year ends on the Saturday closest to December 31, and the Company’s normal fiscal quarters end on the Saturday 13 weeks after the last fiscal year end or fiscal quarter end. Every fifth or sixth fiscal year, the inclusion of an extra week occurs due to the Company’s floating year-end date. The fiscal year 2014 will include 53 weeks instead of the normal 52 weeks.

Advertising : The Company expenses the production costs of advertising the first time the advertising takes place. Advertising expense for the nine month periods ended October 1, 2011 and October 2, 2010 were $215,003 and $88,938, respectively.

Earnings per share : Potentially dilutive common shares consist of the incremental common shares issuable upon the exercise of common stock options and warrants for all periods. For all periods presented, the basic and diluted shares reported are equal because the common shares equivalents are anti-dilutive. Below is a tabulation of the potentially dilutive securities that were “in the money” for the periods ended October 1, 2011 and October 2, 2010.

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Note 2: Earnings Per Share
	Three Months Ending				Nine Months Ending
	October 1, 2011		October 2, 2010		October 1, 2011		October 2, 2010
Basic average common shares outstanding		70,625,913		60,118,183		66,190,731		44,193,266
Warrants and options in the money, net		7,673,885		18,713,678		7,891,916		17,825,933
Weighted average common shares outstanding assuming dilution		78,299,798		78,831,861		74,082,647		62,019,199

Total warrants and options that were not “in the money” at October 1, 2011 and October 2, 2010 were 17,095,835 and 13,636,832 respectively.

Note 3. Leasehold Improvements and Equipment

Leasehold improvements and equipment consisted of the following:

	October 1, 2011		January 1, 2011

Laboratory equipment	$	2,359,169	$	2,336,954
Leasehold improvements		403,971		372,943
Computer equipment		301,980		248,374
Furniture and fixtures		18,313		18,313
Office equipment		7,877		3,445
Construction in progress		100,057		86,294
		3,191,367		3,066,323
Less accumulated depreciation		2,008,914		1,763,215
	$	1,182,453	$	1,303,108

Note 4. Employee Equity Incentive Plan

Stock Option Plans

At the discretion of management, and with approval of the Board of Directors, the Company may grant options to purchase the Company’s common stock to certain individuals from time to time. Management and the Board of Directors determine the terms of awards which include the exercise price, vesting conditions and expiration dates at the time of grant. Expiration dates for stock options are not to exceed 10 years. The Company, under its Second Amended and Restated 2007 Equity Incentive Plan, is authorized to issue stock options that total no more than 20% of the shares of common stock issued and outstanding, as determined on a fully diluted basis. Beginning in 2007, stock options were no longer issuable under the Company’s 2000 Non-Qualified Incentive Stock Plan. The remaining amount available for issuance under the Second Amended and Restated 2007 Equity Incentive Plan totaled 918,927 at October 1, 2011. The stock option awards generally vest ratably over a four-year period following grant date after a passage of time. However, some stock option awards are performance based and vest based on the achievement of certain criteria established by the Company.

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The fair value of the Company’s stock options was estimated at the date of grant using the Black-Scholes based option valuation model. The table below outlines the weighted average assumptions for options granted to employees during the nine months ended October 1, 2011.

Nine Months Ended October 1, 2011	2011
Volatility		31.55	%
Expected dividends		0.00	%
Expected term	5.8 years
Risk-free rate		2.21	%

The Company calculated expected volatility from the volatility of publicly held companies in similar industries, as the historical volatility of the Company’s common stock does not cover the period equal to the expected life of the options. The dividend yield assumption is based on the Company’s history and expectation on future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent remaining term. The expected term of the options represents the estimated period of time until exercise and is based on historical experience of awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. The estimation process for the fair value of performance based stock options was the same as for non-performance based options.

1) Non-performance Based Stock Options

The majority of options granted by the Company are comprised of non-performance based options granted to employees. These options vest ratably over a defined period following grant date after a passage of time and do not have performance vesting requirements.

The following table summarizes non-performance based stock option activity at October 1, 2011, and changes during the nine months then ended:

				Weighted Average
	Number of					Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
Outstanding at January 1, 2011		12,926,131		$	1.52

Options Granted		1,387,177			1.57
Options Classification from Employee to Non-Employee		(67,500	)		1.55
Options Exercised		(43,248	)		0.61
Options Forfeited		(352,803	)		1.48
Outstanding at October 1, 2011		13,849,757		$	1.53		7.02	$	165,463

Exercisable at October 1, 2011		6,044,998		$	1.47		6.58	$	107,381

The aggregate intrinsic values in the table above are before income taxes, based on the Company’s closing stock price of $0.82 on the last day of business for the period ended October 1, 2011.

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2) Performance Based Stock Options

The Company also grants stock option awards that are performance based and vest based on the achievement of certain criteria established by the Company. If performance criteria are not met, the compensation expenses are not recognized and the expenses that have been recognized will be reversed.

The following table summarizes performance based stock options activity at October 1, 2011 and changes during the nine months then ended:

			Weighted Average
	Number of				Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Shares		Price		Term		Value
Outstanding at January 1, 2011		1,000,000	$	1.65

Options Granted		200,000		1.59
Options Exercised		-		-
Options Forfeited		-		-
Outstanding at October 1, 2011		1,200,000	$	1.64		9.18	$	-

Exercisable at October 1, 2011		-	$	-		-	$	-

As of October 1, 2011, there was $2,839,908 of total unrecognized compensation expense related to nonvested share-based compensation arrangements granted under the plans for employee stock options. That cost is expected to be recognized over a weighted average period of 1.86 years as of October 1, 2011. The weighted average fair value of options granted during the nine months ended October 1, 2011 was $0.53. The realized tax benefit from stock options for the nine months ended October 1, 2011 was $0, based on the Company’s election of the “with and without” approach. The fair value of the options that vested during the nine months ended October 1, 2011 was $1,483,510.

Restricted Stock

Restricted stock awards granted by the Company to employees generally have two vesting conditions, a service condition for continuous employment and a stock market condition tied to the Company’s stock price.

The following table summarizes activity of restricted stock awards granted to employees at October 1, 2011 and changes during the nine months then ended:

			Weighted Average
			Award-Date
	Shares		Fair Value
Unvested shares at January 1, 2011		1,000,000	$	1.27

Granted		-		-
Vested		-		-
Forfeited		-		-
Unvested shares at October 1, 2011		1,000,000	$	1.27

Expected to Vest as of October 1, 2011		1,000,000	$	1.27

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As of October 1, 2011, there was $899,501 of total unrecognized compensation expense related to restricted stock awards to employees under the plans. That cost is expected to be recognized over a period of 2.12 years as of October 1, 2011.

For the employee equity incentive plans, the Company recognized share-based compensation expense of $2,025,564 in general and administrative expenses in the statement of operations for the nine months ended October 1, 2011. The Company recognized $659,698 in share-based compensation expense for the comparable period in 2010.

Note 5. Non-Employee Share-Based Compensation

Stock Option Plans

At the discretion of management and with approval of the Board of Directors, the Company may grant options to purchase the Company’s common stock to certain individuals from time to time who are not employees of the Company. These options are granted under the Second Amended and Restated 2007 Equity Incentive Plan of the Company and are granted on the same terms as those being issued to employees. Stock options granted to non-employees are accounted for using the fair value approach. The fair value of non-employee option grants are estimated using the Black-Scholes option-pricing model and are remeasured over the vesting term until earned. The estimated fair value is expensed over the applicable service period.

The following table summarizes the activity of stock options granted to non-employees at October 1, 2011, and changes during the nine months then ended:

			Weighted Average
					Remaining		Aggregate
	Number of		Exercise		Contractual		Intrinsic
	Shares		Price		Term		Value
Outstanding at January 1, 2011		1,097,300	$	1.23

Options Granted		-		-
Options Classification from Employee to Non-Employee		67,500		1.55
Options Exercised		-		-
Options Forfeited		-		-
Outstanding at October 1, 2011		1,164,800	$	1.25		6.63	$	94,400

Exercisable at October 1, 2011		839,879	$	1.16		5.97	$	90,600

The aggregate intrinsic values in the table above are before income taxes, based on the Company’s closing stock price of $0.82 on the last day of business for the period ended October 1, 2011.

As of October 1, 2011, there was $29,294 of total unrecognized compensation expense related to nonvested share-based compensation arrangements granted to non-employees. That cost is expected to be recognized over a weighted average period of 0.71 year as of October 1, 2011. The fair value of the options that vested during the nine months ended October 1, 2011 was $38,843.

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Restricted Stock

Restricted stock awards granted by the Company to non-employees generally have a time vesting condition tied to respective service agreements. In addition, there may be other vesting conditions such as achievement of certain performance goals on certain awards.

On June 23, 2011, the Company awarded 630,000 shares of restricted stock at a purchase price of $0.14 per share to certain consultants as compensation for services to the Company. These restricted shares will fully vest on April 19, 2012, provided that no termination events defined in the related consulting agreements have occurred on or prior to such dates. On July 13, 2011 the Company awarded 40,000 shares of restricted stock at a purchase price of $0.14 per share to a certain consultant as compensation for services to the Company. These restricted shares will fully vest on July 13, 2012, provided that no termination events defined in the related consulting agreements have occurred on or prior to such dates and certain performance conditions have been met.

The fair value of the Company’s restricted stock awards was $986,200 which represents the market value of the Company’s common stock on the date of award less the purchase price.

The following table summarizes activity of restricted stock awards to non-employees at October 1, 2011 and changes during the nine months then ended:

			Weighted Average
			Award-Date
	Shares		Fair Value
Unvested shares at January 1, 2011		-	$	-

Granted		670,000		1.47
Vested		-		-
Forfeited		-		-
Unvested shares at October 1, 2011		670,000	$	1.47

Expected to Vest as of October 1, 2011		670,000	$	1.47

As of October 1, 2011, there was $666,105 of total unrecognized compensation expense related to restricted stock awards to non-employees. That cost is expected to be recognized over a period of 0.57 year as of October 1, 2011.

For non-employee share-based compensation, the Company recognized share-based compensation expense of $444,263 in general and administrative expenses in the statement of operations for the nine months ended October 1, 2011. The Company recognized $46,523 in share-based compensation expense for the comparable period in 2010.

Note 6. Warrants

At October 1, 2011, the following warrants were outstanding and exercisable:

Warrants granted in connection with :	Weighted Average Exercise Prices		Number Outstanding And Exercisable At October 1, 2011		Weighted Average Remaining Contractual Life
2008 Private Placement Equity Offering	$	3.00		1,718,350		1.55
2010 Private Placement Equity Offering	$	0.21		8,553,564		1.64
	$	0.68		10,271,914		1.62

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Note 7. Management’s Plans for Continuing Operations

The Company has incurred a net loss of $5,403,866 for the nine month period ended October 1, 2011 and a net loss of $1,153,010 for the nine month period ended October 2, 2010. The loss for the nine month period ended October 1, 2011 is largely due to increased selling, general and administrative expenses related to an increase in share-based compensation expenses. Our share-based compensation expense increased to $2,469,827 for the nine month period ended October 1, 2011 from $706,221 for the nine month period ended October 2, 2010. This large increase in share-based compensation expense was largely due to stock options that were granted following consummation of the 2010 Private Placement and was also the result of the Company issuing restricted stock to certain employees and consultants. The Company will continue to incur significant share-based compensation expenses over the next two years. In addition, management has invested heavily in additional personnel and marketing expenses for the development and launch of new retail products containing proprietary ingredients, such as pterostilbene.

Management has also implemented additional strategic operational structure changes, which it believes will allow the Company to achieve profitability with future growth without incurring significant additional overhead costs. Management’s anticipation of future growth is largely related to the new line of proprietary ingredients offered by the Company and the demand for retail products containing these ingredients. The Company has implemented a comprehensive sales and marketing plan focused on these proprietary ingredients, as well as the retail products being launched by the Company that contain these proprietary ingredients. The Company has also expanded its marketing plan to market to the pharmaceutical and cosmetic sectors to support the Company’s reference standards, analytical services and discovery libraries product lines.

Management believes it will be able to support operations of the Company with its current cash, cash equivalents and cash from operations through March 2012. In addition, as of October 1, 2011, the Company has 8,553,564 warrants outstanding with an exercise price of $0.21 per share. Assuming the full exercise of the outstanding warrants for cash, the Company would receive additional proceeds of $1,796,248. There is no guarantee that the holders of these warrants will exercise any of the outstanding warrants for cash, and the Company will not receive any proceeds from any of the outstanding warrants until they are exercised. If the Company determines that it needs additional financing to further enable its long-term strategic objectives, there can be no assurance that it will be available on terms favorable to it or at all. If adequate financing is not available, the Company may have to delay, postpone or terminate product and service expansion and curtail selling, general and administrative operations in order to maintain sufficient operating capital after March 2012. The inability to raise additional financing may have a material adverse effect on the future performance of the Company.

Note 8. Income Taxes

At October 1, 2011 and January 1, 2011, the Company maintained a full valuation allowance against the entire net deferred income tax balance after considering relevant factors, including recent operating results, the likelihood of the utilization of net operating loss tax carry forwards, and the ability to generate future taxable income. The Company expects to maintain a full valuation allowance on its entire net deferred tax assets in 2011, resulting in an effective tax rate of zero for the three and nine months ended October 1, 2011.

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ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

This Quarterly Report on Form 10−Q (the “Form 10−Q”) contains “forward-looking statements”, as defined in Section 21E of the Securities Exchange Act of 1934, as amended. These statements reflect the Company’s current expectations of the future results of its operations, performance and achievements. Forward-looking statements are covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company has tried, wherever possible, to identify these statements by using words such as “anticipates”, “believes”, “estimates”, “expects”, “plans”, “intends” and similar expressions. These statements reflect management’s current beliefs and are based on information now available to it. Accordingly, these statements are subject to certain risks, uncertainties and contingencies that could cause the Company’s actual results, performance or achievements in 2011 and beyond to differ materially from those expressed in, or implied by, such statements. Such statements, include, but are not limited to, statements contained in this Form 10-Q relating to our business, financial performance, business strategy, recently announced transactions and capital outlook. Important factors that could cause actual results to differ materially from those in the forward- looking statements include: a continued decline in general economic conditions nationally and internationally; decreased demand for our products and services; market acceptance of our products; the ability to protect our intellectual property rights; the impact of any litigation or infringement actions brought against us; competition from other providers and products; risks in product development; the inability to raise capital to fund continuing operations; changes in government regulation; the ability to complete customer transactions, and other factors relating to our industry, our operations and results of operations and any businesses that may be acquired by us. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Additional risks, uncertainties, and other factors are set forth under Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Commission on March 16, 2011 and in future reports the Company files with the Commission. Readers of this Form 10−Q should not place undue reliance on any forward-looking statements. Except as required by federal securities laws, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties.

You should read the following discussion and analysis of the financial condition and results of operations of ChromaDex together with the financial statements and the related notes presented in Item 1 of this Form 10-Q.

Overview

ChromaDex Corporation and its subsidiaries (collectively, “ChromaDex”, or the “Company”) supplies phytochemical reference standards and reference materials, related contract services, and proprietary ingredients and products for the dietary supplement, nutraceutical, food and beverage, functional food, pharmaceutical and cosmetic markets. ChromaDex has also developed and launched a line of new retail products containing proprietary ingredients. Our business strategy is to identify, acquire, reduce-to-practice, and commercialize innovative new natural products and “green chemistry” (environmentally safe) technologies, with an initial industry focus on the dietary supplement, cosmetic, food and beverage markets, as well as novel pharmaceuticals. We plan to utilize our experienced management team to commercialize these natural product technologies by advancing them through the proper regulatory approval processes, arranging for reliable and cost-effective manufacturing, and ultimately either selling or licensing the product lines and intellectual property to third parties.

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The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues, if any, and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe that our current cash, cash equivalents and cash generated from operations, will be sufficient to meet our projected operating plans through March 2012. We may, however, seek additional capital prior to the end of March 2012 both to meet our projected operating plans after March 2012 and to fund our longer term strategic objectives. To the extent we are unable to raise additional cash or generate sufficient net income prior to March 2012 to meet our projected operating plans, we will revise our projected operating plans accordingly. Additional capital may come from public and private stock or debt offerings, borrowings under lines of credit or other sources. These additional funds may not be available on favorable terms, or at all. Furthermore, if we issue equity or debt securities to raise additional funds, our existing stockholders may experience dilution and the new equity or debt securities we issue may have rights, preferences and privileges senior to those of our existing stockholders. In addition, if we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our products or proprietary technologies, or grant licenses on terms that are not favorable to us. If we cannot raise funds on acceptable terms, we may not be able to develop or enhance our products, obtain the required regulatory clearances or approvals, achieve long term strategic objectives, take advantage of future opportunities, or respond to competitive pressures or unanticipated customer requirements. Any of these events could adversely affect our ability to achieve our development and commercialization goals, which could have a material and adverse effect on our business, results of operations and financial condition. If we are unable to establish small to medium scale production capabilities through our own plant or though a collaboration, we may be unable to fulfill our customers’ requirements. This may cause a loss of future revenue streams as well as require us to look for third-party vendors to provide these services. These vendors may not be available, or may charge fees that prevent us from pricing competitively within our markets.

The Company’s new product line, BluScience, has been launched at GNC corporate stores nationwide. In addition, the Company is seeking to launch BluScience at three national drug store chains, two price clubs, and an everyday low pricing retailer. The Company has received purchase orders for a first quarter, Company-wide roll out from one of these retailers.

In June 2010, the FDA began to regulate the dietary supplement market and to hold accountable all dietary supplement manufacturers under new Good Manufacturing Practices (“GMPs”). GMPs require quality testing to be done on dietary supplement products throughout the manufacturing process, rather than only on finished products. The FDA has begun enforcing the regulations by issuing warning letters to companies who are in violation of GMPs but it is unknown to what extent the FDA will enforce the regulations and how the regulations will be interpreted upon enforcement. The outcome of these uncertainties may have a material adverse effect on our results of operations because a lack of enforcement or an interpretation of the regulations that lessens the burden of compliance for the dietary supplement marketplace may cause a reduced demand for our products and services.

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Results of Operations

We generated net sales of $6,304,789 for the nine month period ended October 1, 2011 as compared to $5,533,805 for the nine month period ended October 2, 2010. We incurred a net loss of $5,403,866 for the nine month period ended October 1, 2011 and incurred a net loss of $1,153,010 for the nine month period ended October 2, 2010. This equated to a $0.08 loss per basic and diluted share for the nine month period ended October 1, 2011 versus a $0.03 loss per basic and diluted share for the nine month period ended October 2, 2010. For the three month period ended October 1, 2011, we generated net sales of $1,827,568 and a net loss of $2,404,912 as compared to net sales of $1,562,352 and a net loss of $883,223 for the three month period ended October 2, 2010. This was a $0.03 loss per basic and diluted share for the three month period ended October 1, 2011, versus a $0.01 loss per basic and diluted share for the three month period ended October 2, 2010.

Over the next two years, we plan to continue to increase research and development efforts for our line of proprietary ingredients and to increase marketing and sales related expenses for these products. We also intend to continue to expand our service capacity through hiring and to implement accreditation and certification programs related to quality initiatives. In addition, we plan to expand our chemical library program and to either establish a GMP compliant pilot plant to support small to medium scale production of target compounds or partner through a collaboration with a company that has these capabilities.

Net Sales

Net sales consist of gross sales less returns and discounts. Net sales increased by 17% to $1,827,568 for the three month period ended October 1, 2011 as compared to $1,562,352 for the three month period ended October 2, 2010. This increase was due to increased demand for our existing products and services and the increased sales of our proprietary ingredients. For the nine month period ended October 1, 2011, net sales increased by 14% to $6,304,789 as compared to $5,533,805 for the nine month period ended October 2, 2010. This increase was primarily due to increased sales of our proprietary ingredients and other bulk dietary supplement grade raw materials.

Costs of Sales

Costs of sales include raw materials, labor, overhead, and delivery costs. Cost of sales for the three and nine month periods ended October 1, 2011 were $1,361,101 and $4,237,008 versus $1,059,626 and $3,437,417 for the three and nine month periods ended October 2, 2010, respectively. As a percentage of net sales, this represented a 7% increase for the three month period ended October 1, 2011 compared to the three month period ended October 2, 2010 and a 5% increase for the nine month period ended October 1, 2011 compared to the nine month period ended October 2, 2010. This percentage increase in cost of sales is largely due to an increase in certain contract services sales which require outsourcing to third party vendors. ChromaDex outsources certain contract services that it has chosen to not perform internally. For the three and nine month periods ended October 1, 2011, there were more contract services sales that the Company outsourced to third parties as compared to previous periods. This caused the Company to experience lower overall gross margins on contract services sales for these respective periods. In addition, sales of proprietary ingredients and other bulk dietary supplement grade raw materials increased for the three and nine month periods ended October 1, 2011. These proprietary ingredients and bulk dietary supplement grade raw materials have significantly higher raw material costs than other products. The Company expects to see a significant increase in the sales of these proprietary ingredients and bulk dietary supplement grade raw materials over the next twelve months. Increases in sales of these types of products will likely cause the Company to experience lower gross margins as a percentage of sales during this time period.

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Gross Profit

Gross profit is net sales less the cost of sales and is affected by a number of factors including product mix, competitive pricing and costs of products and services. Our gross profit decreased 7% to $466,467 for the three month period ended October 1, 2011 from $502,726 for the three month period ended October 2, 2010, and slightly decreased to $2,067,781 for the nine month period ended October 1, 2011 from $2,096,388 for the nine month period ended October 2, 2010. For the three and nine month periods ended October 1, 2011, increase in direct costs of sales as a percentage of net sales was the primary cause for the decrease in gross profit.

Operating Expenses-Sales and Marketing

Sales and Marketing Expenses consist of salaries, commissions to employees and advertising and marketing expenses . Sales and marketing expenses for the three and nine month periods ended October 1, 2011 were $650,516 and $1,661,998 as compared to $235,582 and $688,552 for the three and nine month periods ended October 2, 2010. This increase was largely due to our increased sales and marketing efforts for our line of proprietary ingredients, including the launch of new retail products containing these proprietary ingredients.

Operating Expenses-General and Administrative

General and Administrative Expenses consist of research and development, general company administration, IT, accounting and executive management. General and administrative expenses for the three and nine month periods ended October 1, 2011 were $2,213,636 and $5,786,204 as compared to $1,140,815 and $2,535,386 for the three and nine month periods ended October 2, 2010. One of the factors that contributed to this increase was an increase in share-based compensation expenses. Our share-based compensation expense increased to $964,104 for the three month period ended October 1, 2011 from $423,764 for the three month period ended October 2, 2010 and increased to $2,469,827 for the nine month period ended October 1, 2011 from $706,221 for the nine month period ended October 2, 2010. This large increase in share-based compensation expense was largely due to the Company issuing restricted stock to certain employees and consultants and was also the result of the stock options that were granted following consummation of the 2010 Private Placement. The Company will continue to incur significant share-based compensation expenses over the next two years, as the expenses for the restricted stock and the post-closing grants are recognized on a straight-line method over the expected vesting periods. Another factor that contributed to the increase in general and administrative expenses was the increase in investor relations expense for the purpose of increasing market and shareholder awareness. In addition, the Company incurred certain legal, research, and development expenses related to our line of proprietary ingredients.

Non-operating income- Interest Income

Interest income consists of interest earned on money market accounts . Interest income for the three and nine month periods ended October 1, 2011 were $295 and $1,159 as compared to $578 and $1,095 for the three and nine month periods ended October 2, 2010.

Non-operating Expenses- Interest Expense

Interest expense consists of interest on capital leases . Interest expense for the three and nine month periods ended October 1, 2011 were $7,522 and $24,604 as compared to $10,130 and $26,555 for the three and nine month periods ended October 2, 2010.

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Depreciation and Amortization

Depreciation expense for the nine month period ended October 1, 2011 was approximately $247,024 as compared to $232,786 for the nine month period ended October 2, 2010. We depreciate our assets on a straight-line basis, based on the estimated useful lives of the respective assets. Amortization expense of intangible assets for the nine month period ended October 1, 2011 was approximately $55,843 as compared to $55,053 for the nine month period ended October 2, 2010. We amortize intangible assets using a straight-line method over 10 years.

Liquidity and Capital Resources

From inception and through October 1, 2011, we have incurred aggregate losses of approximately $15.6 million. These losses are primarily due to overhead costs and general and administrative expenses associated with the development and expansion of our operations. These operations have been financed through capital contributions and the issuance of common stock and warrants through private placement transactions.

The Board of Directors periodically reviews our capital requirements in light of our proposed business plan. Our future capital requirements will remain dependent upon a variety of factors, including cash flow from operations, the ability to increase sales, increasing our gross profits from current levels, reducing sales and administration expenses as a percentage of net sales, continued development of customer relationships, and our ability to market our new products successfully. However, based on our results from operations, we may determine that we need additional financing to implement our business plan, and there can be no assurance that it will be available on terms favorable to us or at all. If adequate financing is not available, we may have to delay, postpone or terminate product and service expansion and curtail general and administrative operations in order to maintain sufficient operating capital. The inability to raise additional financing may have a material adverse effect on us. While we believe that our current levels of capital will be sufficient to meet our projected operating plans through March 2012, we may seek additional capital prior to March 2012 both to meet our projected operating plans after March 2012 and to fund our longer term strategic objectives. To the extent we are unable to raise additional cash or generate net income to meet our projected operating plans prior to March 2012, we will revise our projected operating plans accordingly.

As of October 1, 2011, the Company had 8,553,564 warrants outstanding with an exercise price of $0.21 per share. Assuming the full exercise of the outstanding warrants for cash, we would receive additional proceeds of $1,796,248. There is no guarantee that the holders of these warrants will exercise any of the outstanding warrants for cash, and we will not receive any proceeds from any of the outstanding warrants until they are exercised for cash.

Net cash used in operating activities

Net cash used in operating activities for the nine months ended October 1, 2011 was $2,497,791 as compared to $1,814,741 for the nine months ended October 2, 2010. An increase in inventories and prepaid expenses for our new ingredients and retail product lines were the largest uses of cash during the nine month period ended October 1, 2011, while the payment of unpaid compensation from prior years to two officers was the largest use of cash during the nine month period ended October 2, 2010.

We expect our operating cash flows to fluctuate significantly in future periods as a result of fluctuations in our operating results, shipment timetables, accounts receivable collections, inventory management, and the timing of our payments, among other factors.

Net cash used in investing activities

Net cash used in investing activities was $152,369 for the nine months ended October 1, 2011, compared to $154,759 for the nine months ended October 2, 2010. The decrease in cash used in investing activities mainly reflects the timing of purchases of leasehold improvements and equipment as well as purchases of intangible assets.

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Net cash provided by financing activities

Net cash provided by financing activities was $2,493,009 for the nine months ended October 1, 2011, compared to $4,483,754 for the nine months ended October 2, 2010. Net cash provided by financing activities for the nine months ended October 1, 2011 mainly consisted of proceeds from the exercise of warrants related to the 2010 Private Placement. Net cash provided by financing activities for the nine months ended October 2, 2010 mainly consisted of proceeds from both the issuance of common stock and the exercise of warrants related to the 2010 Private Placement.

Dividend policy

We have not declared or paid any dividends on our common stock. We presently intend to retain earnings for use in our operations and to finance our business. Any change in our dividend policy is within the discretion of our Board of Directors and will depend, among other things, on our earnings, debt service and capital requirements, restrictions in financing agreements, if any, business conditions, legal restrictions and other factors that our Board of Directors deems relevant.

Off-Balance Sheet Arrangements

During the nine months ended October 1, 2011, we had no off-balance sheet arrangements other than ordinary operating leases as disclosed in the “Financial Statements and Supplementary Data” section of the Company’s Annual Report on Form 10-K filed with the Commission on March 16, 2011.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934). Based on the Company’s evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of October 1, 2011.

Changes in Internal Controls

There was no change in internal controls over financial reporting (as defined in Rule 13a−15(f) promulgated under the Securities Exchange Act of 1934) that occurred during the Company’s third fiscal quarter that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On July 13, 2011, the Company awarded 40,000 shares of restricted stock at a purchase price of $0.14 per share to a certain consultant as compensation for services to the Company. These restricted shares will fully vest on July 13, 2012, provided that no termination event as defined in the related consulting agreement has occurred on or prior to such date and certain performance conditions have been met. These shares of restricted stock were issued to accredited investors only and sold by the Company in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. [REMOVED AND RESERVED]

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No .		Description of Exhibits

10.1		Patent License Agreement, dated July 12, 2011 between Cornell University and the Company.*
10.2		Patent License Agreement, dated September 8, 2011 between The Regents of the University of California and the Company.*
31.1		Certification of the Chief Executive Officer pursuant to §240.13a−14 or §240.15d−14 of the Securities Exchange Act of 1934, as amended
31.2		Certification of the Chief Financial Officer pursuant to §240.13a−14 or §240.15d−14 of the Securities Exchange Act of 1934, as amended
32.1		Certification pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the Sarbanes−Oxley Act of 2002)
101		The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended October 1, 2011, filed with the Securities and Exchange Commission on November 10, 2011, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Cash Flows, (iv) the Condensed Consolidated Statements of Stockholders’ Equity, (v) the Notes to Condensed Consolidated Financial Statements.

*	This Exhibit has been separately filed with the Commission pursuant to an application for confidential treatment. The confidential portions of this Exhibit have been omitted and are marked by an asterisk.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ChromaDex Corporation (Registrant)

Date: November 10, 2011	By:	/s/ THOMAS C. VARVARO
		Thomas C. Varvaro
		Duly Authorized Officer and Chief Financial Officer

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[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

CHROMADEX CORPORATION

[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

RECITALS		1
ARTICLE 1.	DEFINITIONS	1
ARTICLE 2.	GRANTS	3
ARTICLE 3.	CONSIDERATION	4
ARTICLE 4.	REPORTS, RECORDS AND PAYMENTS	7
ARTICLE 5.	PATENT MATTERS	9
ARTICLE 6.	GOVERNMENTAL MATTERS	11
ARTICLE 7.	TERMINATION OF THE AGREEMENT	11
ARTICLE 8.	LIMITED WARRANTY AND INDEMNIFICATION	12
ARTICLE 9.	USE OF NAMES AND TRADEMARKS	13
ARTICLE 10.	MISCELLANEOUS PROVISIONS	14
APPENDIX A - DEVELOPMENT REPORT		18
APPENDIX B – COMMERCIALIZATION REPORT		21
APPENDIX C – PATENTS AND APPLICATIONS		24

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[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

This agreement (“Agreement”) is made by and between ChromaDex Inc, a California corporation having an address at 10005 Muirlands Blvd, Suite G, First Floor, Irvine, CA 92618 (“LICENSEE”) and Cornell University (“Cornell”) as represented by its Cornell Center for Technology Enterprise and Commercialization (“CCTEC”) at 395 Pine Tree Road, Ithaca, NY 14850.

This Agreement is effective on July 5 th 2011 (“Effective Date”).

WHEREAS , the inventions disclosed in Disclosure Docket No. D-3787 and titled “Analogs of a B Vitamin (Nicotinamide Riboside, NR), and Efficient, Stereoselective Methods to Synthesize such Analogs” (“Invention”), were made in the course of research at Cornell by Dr. Anthony Sauve and his associates (hereinafter and collectively, the “Inventors”) and are covered by Patent Rights as defined below;

WHEREAS , the Inventors are employees of Cornell, and they are obligated to assign all of their right, title and interest in the Invention to the Cornell Research Foundation, Inc. (“CRF”) or to Cornell and have done so;

WHEREAS , CRF has engaged CCTEC to manage the Invention, in whole or in part, assigned to it and has fully authorized CCTEC to manage all rights subsisting therein and to enter into any agreement granting such rights to advance the missions of Cornell;

WHEREAS , CCTEC is the officially authorized unit at Cornell to manage Invention and to grant rights subsisting therein for Cornell and CRF;

WHEREAS , Cornell desires that the Invention be developed and utilized to the fullest possible extent so that its benefits can be enjoyed by the general public;

WHEREAS , LICENSEE desires to obtain certain rights from Cornell for commercial development, use, and sale of the Invention, and Cornell is willing to grant such rights; and

WHEREAS , LICENSEE understands that Cornell may publish or otherwise disseminate information concerning the Invention at any time and that LICENSEE is paying consideration hereunder for its early access to the Invention, the associated intellectual property rights, not continued secrecy therein.

NOW, THEREFORE , the parties agree:

ARTICLE 1. DEFINITIONS

The terms, as defined herein, shall have the same meanings in both their singular and plural forms.

1.1 “Affiliate” means any corporation or other business entity which is bound in writing by LICENSEE to the terms set forth in this Agreement and in which LICENSEE owns or controls, directly or indirectly, at least [*] percent ([*]%) of the outstanding stock or other voting rights entitled to elect directors, or in which LICENSEE is owned or controlled directly or indirectly by at least [*] percent ([*]%) of the outstanding stock or other voting rights entitled to elect directors; but in any country where the local law does not permit foreign equity participation of at least [*] percent ([*]%), then an “Affiliate” includes any company in which LICENSEE owns or controls or is owned or controlled by, directly or indirectly, the maximum percentage of outstanding stock or voting rights permitted by local law.

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[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

1.2 “Sublicense” means an agreement into which LICENSEE enters with a third party that is not an Affiliate for the purpose of (i) granting certain rights; (ii) granting an option to certain rights; or (iii) forbearing the exercise of any rights, granted to LICENSEE under this Agreement after Effective Date. “Sublicensee” means a third party with whom LICENSEE enters into a Sublicense.

1.3 “Field” means use of Nicotinamide Riboside in Dietary Supplement, Food, Food Additive, Cosmetic, and Drug (as each of these terms is defined in the United States Food, Drug, and Cosmetic Act (“FD&C Act”) or its successors) products and in the Research Market as defined herein. “Research Market” means use by consumers in laboratories of academic, government, industrial, clinical, or other institutions who determine for themselves that they are entitled to purchase and/or use Licensed Products labeled “For Research Use Only - Not for any clinical or therapeutic use in Humans or Animals” or a reasonable equivalent thereto. The Research Market expressly excludes, everywhere in the world, use of Licensed Products for the diagnosis of, or predisposition to, or therapy of a disease state in humans or animals. Field also includes beverages and beverage additives.

1.4 “Territory” means worldwide.

1.5 “Term” means the period of time beginning on Effective Date and ending on the expiration date of the longest-lived patent in Patent Rights.

1.6 “Patent Rights” means CRF’s or Cornell’s right in patent applications listed in Appendix C disclosing and claiming the Invention, filed by Inventors and assigned to CRF or Cornell; and continuing applications thereof including divisions, substitutions, and continuations-in-part (but only to extent the claims thereof are enabled by disclosure of the parent application); any patents issuing on said applications including reissues, reexaminations and extensions; and any corresponding foreign applications or patents.

1.7 This paragraph left intentionally blank.

1.8 “Licensed Method” means any method that is claimed in Patent Rights the use of which would constitute, but for the license granted to LICENSEE under this Agreement, an infringement, an inducement to infringe or contributory infringement, of any pending or issued claim within Patent Rights. For the purpose of this Agreement, LICENSEE agrees that the above definition shall be interpreted as if Cornell or CRF is the sole owner and assignee of Patent Rights.

1.9 “Licensed Product” means any service, composition or product that is claimed in Patent Rights, or that is produced or enabled by Licensed Method, or the manufacture, use, sale, offer for sale, or importation of which would constitute, but for the license granted to LICENSEE under this Agreement, an infringement, an inducement to infringe or contributory infringement, of any pending or issued claim within the Patent Rights. For the purpose of this Agreement, LICENSEE agrees that the above definition shall be interpreted as if Cornell or CRF is the sole owner and assignee of Patent Rights.

1.10 “Net Sales” means the total of the gross invoice prices of Licensed Products sold or leased by LICENSEE, Sublicensee, Affiliate, or any combination thereof, less the sum of the following actual and customary deductions where applicable and separately listed: cash, trade, or quantity discounts; sales, use, tariff, import/export duties or other excise taxes imposed on particular sales (except for value-added and income taxes imposed on the sales of Licensed Product in foreign countries); transportation charges; or credits to customers because of rejections or returns. For purposes of calculating Net Sales, transfers to a Sublicensee or an Affiliate of Licensed Product under this Agreement for (i) end use (but not resale) by the Sublicensee or Affiliate shall be treated as sales by LICENSEE at the list price of LICENSEE in an arm-length transaction, or (ii) resale by a Sublicensee or an Affiliate shall be treated as sales at the list price of the Sublicensee or Affiliate.

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[*] INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION.

1.11 “Patent Costs” means a pro rata share of all expenses for the preparation, filing, prosecution, and maintenance of all United States and foreign patents included in Patent Rights. Patent Costs shall also include reasonable out-of-pocket expenses for patentability opinions, inventorship review and determination, preparation and prosecution of patent application, re-examination, re-issue, interference, opposition activities related to patents or applications in Patent Rights plus a [*]% patent service fee for services to be provided by Cornell to LICENSEE relating to patent prosecution.

1.12 “Nicotinamide Riboside” shall mean the compound:

2.1 License. Subject to Article 5.1 (“patent costs reimbursement obligations”) and to the limitations set forth in this Agreement Cornell hereby grants to LICENSEE, and LICENSEE hereby accepts, a license under Patent Rights to make and have made, to use and have used, to sell and have sold, to offer for sale, and to import and have imported Licensed Products and to practice Licensed Methods in the Field within the Territory and during the Term.

The license granted herein is exclusive for Patent Rights in the Field as defined in 1.3.

The license granted herein is nonexclusive for Patent Rights in the field of the Research Market.

(a) The license granted in Paragraph 2.1 includes the right of LICENSEE to grant Sublicense to third parties during the Term but only for as long as the license for Patent Rights is exclusive.

(b) With respect to Sublicense granted pursuant to Paragraph 2.2(a), LICENSEE shall:

(i) not receive, or agree to receive, anything of value in lieu of cash as consideration from a third party under a Sublicense granted pursuant to Paragraph 2.2(a) without the express written consent of Cornell;

(ii) to the extent applicable, include all of the rights of and obligations due to Cornell (and, if applicable, the Sponsor’s Rights) and contained in this Agreement;

(iii) promptly provide Cornell with a copy of each Sublicense issued and any amendment made to any Sublicense; and

(iv) collect and guarantee payment of all payments due, directly or indirectly, to Cornell from Sublicensees and summarize and deliver all reports due, directly or indirectly, to Cornell from Sublicensees.

(c) Unless a Sublicense receives written consent from Cornell prior to its issuance by LICENSEE to the Sublicensee and becomes effective, upon termination of this Agreement for any reason, Cornell, at its sole discretion, shall determine whether LICENSEE shall cancel or assign to Cornell said Sublicense.

2.3 Reservation of Rights. Cornell reserves the right to:

(a) use the Invention and Patent Rights for educational and research purposes;

(b) publish or otherwise disseminate any information about the Invention at any time; and

ARTICLE 3. CONSIDERATION

3.1 Fees and Royalties. The parties hereto understand that the fees and royalties payable by LICENSEE to Cornell and the provision of Nicotinamide Riboside to Dr. Anthony Sauve under this Agreement are partial consideration for the license granted herein to LICENSEE under Patent Rights. LICENSEE shall

(a) (i) pay Cornell a license issue fee of [*] dollars (US$[*]), within [*] ([*]) days after the Effective Date;

(a)(ii) upon LICENSEE’s commencement of manufacturing, Dr. Anthony Sauve upon his written request will be provided with up to [*]grams of Nicotinamide Riboside per year and purified to [*]% purity as determined by nuclear magnetic resonance spectroscopy;

(b) pay Cornell license maintenance fees of initially [*] dollars (US$[*]) per year and payable on the Effective Date and annually thereafter on each anniversary according to the following schedule; provided however, that LICENSEE’s obligation to pay this fee shall end on the date when LICENSEE is commercially selling a Licensed Product;

Fee payable to Cornell:	Date:
$ [*]	2011 to 2012
$ [*]	2013 to 2015
$ [*]	2016 to 2018
$ [*]	each year thereafter

(c) pay Cornell milestone payments in the amounts payable according to the following schedule or events by Licensee or its customers:

Amount	Date or Event
$[*]	First sale of Licensed Product as a Cosmetic ingredient
$[*]	Submission of Notification for New Dietary Ingredient for Licensed Product or GRAS self affirmation
$[*]	Submission of IND for Licensed Product
$[*]	Initiation of Phase II Trial of Licensed Product
$[*]	Initiation of Phase III Trial of Licensed Product
$[*]	FDA approval of Licensed Product

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(d) pay Cornell an earned royalty of [*] percent ([*]%) on Net Sales of Licensed Products by LICENSEE and/or its Affiliate(s) for any Licensed Product sold direct to consumers or to consumers through distributors, whether or not it is relabelled;

pay Cornell an earned royalty of [*] percent ([*]%) on Net Sales of Licensed Products by LICENSEE and/or its Affiliate(s) for any Licensed Product sold to other businesses for incorporation into their products;

PROVIDED, HOWEVER, that if, during the term hereof, LICENSEE is required to pay royalties to one or more third parties for patent rights necessary to make, use, sell, offer for sale, or import Licensed Products, then LICENSEE may deduct $[*] from the earned royalties payable to Cornell for every $[*] LICENSEE actually pays to said third parties provided however that, in no event will the royalties paid to Cornell under this Section 3.1(d) be less than [*]percent ([*]%) of the amount due under this Section 3.1(d).

(e) pay Cornell a percentage of all Sublicense fees received by LICENSEE from its Sublicensees that are not earned royalties according to the following schedule;

Percentage of Sublicensee fee payable to Cornell	Events achieved by LICENSEE prior to issuance of Sublicense by LICENSEE
[*]%	Prior to submission of Notification for New Dietary

(f) pay Cornell on each and every Sublicense royalty payment received by LICENSEE from its Sublicensees on sales of Licensed Product by Sublicensee, the higher of (i) [*]percent ([*]%) of the royalties received by LICENSEE; or the (ii) royalties based on the royalty rate in Paragraph 3.1(d) as applied to Net Sales of Sublicensee;

(g) pay Cornell beginning the calendar year of commercial sales of the first Licensed Product by LICENSEE, its Sublicensee, or an Affiliate and if the total earned royalties paid by LICENSEE under Paragraphs 3.1(d) and (f) to Cornell in any such year cumulatively are less than the amount (“minimum annual royalty”) illustrated below:

Year of Commercial Sale	Minimum Annual Royalty
First	$[*]
Second	$[*]
Third and following	$[*]

LICENSEE shall pay to Cornell on or before February 28 following the last quarter of such year the difference between amount noted above and the total earned royalty paid by LICENSEE for such year under Paragraphs 3.1(d) and (f); provided, however, that for the year of commercial sales of the first Licensed Product, the amount of minimum annual royalty payable shall be pro-rated for the number of months remaining in that calendar year.

All fees and royalty payments specified in Paragraphs 3.1(a) through 3.1(g) above shall be paid by LICENSEE pursuant to Paragraph 4.3 and shall be delivered by LICENSEE to Cornell as noted in Paragraph 10.1.

3.2 Patent Costs. LICENSEE shall reimburse Cornell all past (prior to the Effective Date) and future (on or after the Effective Date) Patent Costs within [*] ([*]) days following the date an itemized invoice is sent from Cornell to LICENSEE.

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(i) diligently proceed with the development, manufacture and sale of Licensed Products;

(ii) Transfer the method of production to a toll manufacturer within twelve months of Effective Date

(iii) market Licensed Products in Research Market the United States within [*] of the Effective Date;

(iv) submit a Notification for New Dietary Ingredient covering Licensed Products to the United States FDA or establish GRAS self affirmation within [*] from the Effective Date of this Agreement;

(v) Formal launch of a branded ingredient for food and cosmetics that is a Licensed Product within [*] of Effective Date

(vi) Commence clinical study of Licensed Product as a dietary supplement within [*] of Effective Date

(vii) use its reasonable efforts to fill the market demand for Licensed Products following commencement of marketing on a per-field basis at any time during the term of this Agreement; and

(viii) obtain and maintain all necessary governmental approvals for the manufacture, use and sale of Licensed Products.

(b) If LICENSEE fails to perform any of its obligations specified in Paragraphs 3.3(a)(i)-(viii), then Cornell shall have the right and option to either terminate this Agreement or change LICENSEE’s exclusive license to a nonexclusive license. This right, if exercised by Cornell, supersedes the rights granted in Article 2.

(c) If at any time during the Term, LICENSEE has not begun a genuine product or business development program for at least one Licensed Product for any specific use within the licensed Field or Territory that does not directly compete with the Licensed Product LICENSEE is actively developing and LICENSEE refuses to initiate any program to address the specific use at the request of Cornell, Cornell may then exclude said specific use from the licensed Field of LICENSEE and license such rights to one or more third parties.

(d) If at any time during the Term, LICENSEE has not begun a genuine product or business development program for at least one Licensed Product for any specific use within the licensed Field or Territory and Cornell receives one ore more earnest offers to license Patent Rights for said specific use, Cornell shall refer such offers to LICENSE. If LICENSEE fails to grant Sublicenses to satisfy the market demand for said specific use, Cornell may then exclude said specific use from the licensed Field and license such rights to one or more third parties.

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ARTICLE 4. REPORTS, RECORDS AND PAYMENTS

(a) Development Reports . Beginning [*] after Effective Date and ending on the date of first commercial sale of a Licensed Product in the United States, LICENSEE shall report to Cornell progress covering LICENSEE’s (and Affiliate’s and Sublicensee’s) activities and efforts in the development of rights granted to LICENSEE under this Agreement for the preceding [*]. The report shall include, but not be limited to, activities and efforts to develop and test all Licensed Products and obtain governmental approvals necessary for marketing the same. Such [*] reports shall be due within [*] days of the reporting period and shall use the form as provided herein as Appendix A.

(b) Commercialization Reports. After the first commercial sale of a Licensed Product anywhere in the world, LICENSEE shall submit to Cornell [*] reports on or before each [*] of each year. Each report shall cover LICENSEE’s (and each Affiliate’s and Sublicensee’s) most recently completed calendar quarter and shall show:

(i) the gross sales and Net Sales (as defined in Paragraph 1.11) during the most recently completed calendar quarter and the royalties, in US dollars, payable with respect thereto;

(ii) the number of each type of Licensed Product sold;

(iii) Sublicense fees and royalties received during the most recently completed calendar quarter in US dollars, payable with respect thereto;

(iv) the method used to calculate the royalties;

(v) the exchange rates used;

(vi) relevant business and corporate development efforts relating to the rights granted in this Agreement.

LICENSEE shall provide the above information using the form as shown in Appendix B and include information on the date of the first commercial sale of each additional Licensed Product or in each additional country.

If no sales of Licensed Products have been made and no Sublicense revenue has been received by LICENSEE during any reporting period, LICENSEE shall so report.

4.2 Records & Audits .

(a) LICENSEE shall keep, and shall require its Affiliates and Sublicensees to keep, accurate and correct records of all Licensed Products manufactured, used, and sold, and Sublicense fees received under this Agreement. Such records shall be retained by LICENSEE for at least [*] ([*]) years following a given reporting period.

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(b) All records shall be available during normal business hours for inspection at the expense of Cornell by Cornell’s Internal Audit Department or by a Certified Public Accountant selected by Cornell and in compliance with the other terms of this Agreement for the sole purpose of verifying reports and payments or other compliance issues. Such inspector shall not disclose to Cornell any information other than information relating to the accuracy of reports and payments made under this Agreement or other compliance issues. In the event that any such inspection shows an under reporting and underpayment in excess of [*]percent ([*]%) for any twelve-month (12-month) period, then LICENSEE shall pay the cost of the audit as well as any additional sum that would have been payable to Cornell had the LICENSEE reported correctly, plus an interest charge at a rate of [*] percent ([*]%) per year. Such interest shall be calculated from the date the correct payment was due to Cornell up to the date when such payment is actually made by LICENSEE. For underpayment not in excess of [*] percent ([*]%) for any twelve-month (12-month) period, LICENSEE shall pay the difference within [*] ([*]) days without interest charge or inspection cost.

(a) All fees, reimbursements and royalties due Cornell shall be paid in United States dollars and all checks shall be made payable to “Cornell University”, referencing Cornell’s taxpayer identification number, [*], and sent to Cornell according to Paragraph 10.1 (Correspondence). When Licensed Products are sold in currencies other than United States dollars, LICENSEE shall first determine the earned royalty in the currency of the country in which Licensed Products were sold and then convert the amount into equivalent United States funds, using the exchange rate quoted in the Wall Street Journal on the last business day of the applicable reporting period.

(b) Royalty Payments.

(i) Royalties shall accrue when Licensed Products are invoiced, or if not invoiced, when delivered to a third party or Affiliate.

(ii) LICENSEE shall pay earned royalties [*] each calendar year. Each such payment shall be for earned royalties accrued within LICENSEE’s most recently completed [*].

(iii) Royalties earned on sales occurring or under Sublicense granted pursuant to this Agreement in any country outside the United States shall not be reduced by LICENSEE for any taxes, fees, or other charges imposed by the government of such country on the payment of royalty income, except that all payments made by LICENSEE in fulfillment of Cornell’s tax liability in any particular country may be credited against earned royalties or fees due Cornell for that country. LICENSEE shall pay all bank charges resulting from the transfer of such royalty payments.

(iv) If at any time legal restrictions prevent the prompt remittance of part or all royalties by LICENSEE with respect to any country where a Licensed Product is sold or a Sublicense is granted pursuant to this Agreement, LICENSEE shall convert the amount owed to Cornell into US currency and shall pay Cornell directly from its US sources of fund for as long as the legal restrictions apply.

(v) In the event that any patent or patent claim within Patent Rights is held invalid in a final decision by a patent office from which no appeal or additional patent prosecution has been or can be taken, or by a court of competent jurisdiction and last resort and from which no appeal has or can be taken, all obligation to pay royalties based solely on that patent or claim or any claim patentably indistinct therefrom shall cease as of the date of such final decision. LICENSEE shall not, however, be relieved from paying any royalties that accrued before the date of such final decision, that are based on another patent or claim not involved in such final decision.

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(c) Late Payments. In the event royalty, reimbursement and/or fee payments are not received by Cornell when due, LICENSEE shall pay to Cornell interest charges at a rate of [*]percent ([*]%) per year. Such interest shall be calculated from the date payment was due until actually received by Cornell.

ARTICLE 5. PATENT MATTERS

5.1 Patent Prosecution and Maintenance .

(a) Provided that LICENSEE has reimbursed Cornell for Patent Costs pursuant to Paragraph 3.2, Cornell shall diligently prosecute and maintain the United States and, if available, foreign patents, and applications in Patent Rights using counsel of its choice. Cornell shall provide LICENSEE with copies of all relevant documentation relating to such prosecution and LICENSEE shall keep this documentation confidential. The counsel shall take instructions only from Cornell, and all patents and patent applications in Patent Rights shall be assigned solely to CRF or Cornell.

(b) Cornell shall consider amending any patent application in Patent Rights to include claims reasonably requested by LICENSEE to protect the products contemplated to be sold as Licensed Products by LICENSEE under this Agreement.

(c) LICENSEE may elect to terminate its reimbursement obligations with respect to any patent application or patent in Patent Rights upon [*] months’ written notice to Cornell. Cornell shall use reasonable efforts to curtail further Patent Costs for such application or patent when such notice of termination is received from LICENSEE. Cornell, in its sole discretion and at its sole expense, may continue prosecution and maintenance of said application or patent, and LICENSEE shall have no further license with respect thereto. Non-payment of any portion of Patent Costs with respect to any application or patent may be deemed by Cornell as an election by LICENSEE to terminate its reimbursement obligations with respect to such application or patent. Cornell is not obligated to file, prosecute, or maintain Patent Rights outside of the territory at any time or to file, prosecute, or maintain Patent Rights to which Licensee has terminated its License hereunder.

5.2 Patent Infringement .

(a) In the event that Cornell (to the extent of the actual knowledge of the licensing professional responsible for the administration of this Agreement) or LICENSEE learns of infringement of potential commercial significance of any patent licensed under this Agreement, the knowledgeable party will provide the other (i) with written notice of such infringement and (ii) with any evidence of such infringement available to it (the “Infringement Notice”). During the period in which, and in the jurisdiction where, LICENSEE has exclusive rights under this Agreement, neither Cornell nor LICENSEE will notify a third party (including the infringer) of infringement or put such third party on notice of the existence of any Patent Rights without first obtaining consent of the other which consent shall not be un-reasonably withheld. Cornell shall have the right to terminate this Agreement immediately without the obligation to provide [*] days’ notice as set forth in Paragraph 7.1 if LICENSEE notifies a third party of infringement or puts such third party on notice of the existence of any Patent Rights with respect to such infringement without first obtaining the written consent of Cornell. Both Cornell and LICENSEE will use their diligent efforts to cooperate with each other to terminate such infringement without litigation.

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(b) If infringing activity of potential commercial significance by the infringer has not been abated within [*] days following the date the Infringement Notice takes effect, LICENSEE may institute suit for patent infringement against the infringer. CRF and/or Cornell may voluntarily join such suit at its own expense, but may not thereafter commence suit against the infringer for the acts of infringement that are the subject of LICENSEE’s suit or any judgment rendered in that suit. LICENSEE may not join CRF or Cornell in a suit initiated by LICENSEE without Cornell’s prior written consent. If, in a suit initiated by LICENSEE, CRF or Cornell is involuntarily joined other than by LICENSEE, LICENSEE will pay any costs incurred by CRF or Cornell arising out of such suit, including but not limited to, any legal fees of counsel that CRF or Cornell selects and retains to represent it in the suit.

(c) If, within [*] ([*]) days following the date the Infringement Notice takes effect, infringing activity of potential commercial significance by the infringer has not been abated and if LICENSEE has not brought suit against the infringer, CRF or Cornell may institute suit for patent infringement against the infringer. If CRF or Cornell institutes such suit, LICENSEE may not join such suit without CRF’s or Cornell’s consent and may not thereafter commence suit against the infringer for the acts of infringement that are the subject of CRF’s or Cornell’s suit or any judgment rendered in that suit.

(d) Any recovery or settlement received in connection with any suit will first be shared by Cornell or CRF and LICENSEE equally to cover the litigation costs each incurred, and next shall be paid to CRF, Cornell or LICENSEE to cover any litigation costs it incurred in excess of the litigation costs of the other, provided that any amounts reimbursed to Cornell or CRF by LICENSEE pursuant to Section 5.2(b) above shall be deducted from amounts shared hereunder. In any suit initiated by LICENSEE, any recovery in excess of litigation costs will be shared between LICENSEE and Cornell as follows: (i) Cornell will receive [*] percent ([*]%) of the recovery if CRF or Cornell was not a party in the litigation and did not incur any litigation costs; (ii) Cornell will receive [*] percent ([*]%) of the recovery if CRF or Cornell was a party in the litigation, but did not incur any litigation costs, including the provisions of Paragraph 5.2(b) above, or (iii) Cornell will receive [*] percent ([*]%) of the recovery if CRF or Cornell incurred any litigation costs in connection with the litigation. In any suit initiated by CRF or Cornell, any recovery in excess of litigation costs will be shared between LICENSEE and Cornell or CRF as follows: (i) LICENSEE will receive [*]percent ([*]%) of the recovery if LICENSEE was not a party in the litigation and did not incur any litigation costs; (ii) LICENSEE will receive [*] percent ([*]%) of the recovery if LICENSEE was a party in the litigation, but did not incur any litigation costs, or (iii) LICENSEE will receive [*] percent ([*]%) of the recovery if LICENSEE incurred any litigation costs in connection with the litigation. CRF, Cornell and LICENSEE agree to be bound by all determinations of patent infringement, validity, and enforceability (but no other issue) resolved by any adjudicated judgment in a suit brought in compliance with this Section 5.2.

(e) Any agreement made by LICENSEE for purposes of settling litigation or other dispute shall comply with the requirements of Section 2.2 (Sublicenses) of this Agreement.

(f) Each party will cooperate with the other in litigation proceedings instituted hereunder but at the expense of the party who initiated the suit (unless such suit is being jointly prosecuted by the parties).

(g) Any litigation proceedings will be controlled by the party bringing the suit, except that CRF and Cornell may be represented by counsel of its choice in any suit brought by LICENSEE.

5.3 Patent Marking. LICENSEE shall mark all Licensed Products made, used or sold under the terms of this Agreement, or their containers, in accordance with the applicable patent marking laws.

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ARTICLE 6. GOVERNMENTAL MATTERS

6.1 Governmental Approval or Registration. If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, LICENSEE shall assume all legal obligations to do so. LICENSEE shall notify Cornell if it becomes aware that this Agreement is subject to a United States or foreign government reporting or approval requirement. LICENSEE shall make all necessary filings and pay all costs including fees, penalties, and all other out-of-pocket costs associated with such reporting or approval process.

6.2 Export Control Laws. LICENSEE shall observe all applicable United States and foreign laws with respect to the transfer of Licensed Products and related technical data to foreign countries, including, without limitation, the International Traffic in Arms Regulations and the Export Administration Regulations.

ARTICLE 7. TERMINATION OF THE AGREEMENT

7.1 Termination by Cornell .

(a) If LICENSEE fails to perform or violates any term of this Agreement, then Cornell may give written notice of default (“Notice of Default”) to LICENSEE. If LICENSEE fails to cure the default within [*] ([*]) days of the Notice of Default, Cornell may terminate this Agreement and the license granted herein by a second written notice (“Notice of Termination”) to LICENSEE. If a Notice of Termination is sent to LICENSEE, this Agreement shall automatically terminate on the effective date of that notice. Termination shall not relieve LICENSEE of its obligation to pay any fees owed at the time of termination and shall not impair any accrued right of Cornell.

(b) This Agreement will terminate immediately, without the obligation to provide written notices as set forth in Paragraph 7.1(a), if LICENSEE files a claim including in any way the assertion that any portion of CRF’s or Cornell’s Patent Rights is invalid or unenforceable where the filing is by the LICENSEE, a third party on behalf of the LICENSEE, or a third party at the written urging of the LICENSEE.

7.2 Termination by LICENSEE .

(a) LICENSEE shall have the right at any time and for any reason to terminate this Agreement upon a [*] ([*])-day written notice to Cornell. Said notice shall state LICENSEE’s reason for terminating this Agreement.

(b) Any termination under Paragraph 7.2(a) shall not relieve LICENSEE of any obligation or liability accrued under this Agreement prior to termination or rescind any payment made to Cornell or action by LICENSEE prior to the time termination becomes effective. Termination shall not affect in any manner any rights of Cornell or CRF arising under this Agreement prior to termination.

7.3 Survival on Termination. The following Paragraphs and Articles shall survive the termination of this Agreement:

(a) Article 4 (REPORTS, RECORDS AND PAYMENTS);

(b) Paragraph 7.4 (Disposition of Licensed Products on Hand);

(d) Article 9 (USE OF NAMES AND TRADEMARKS);

(e) Paragraph 10.2 hereof (Secrecy); and

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(f) Paragraph 10.5 (Failure to Perform).

7.4 Disposition of Licensed Products on Hand. Upon termination of this Agreement, LICENSEE may dispose of all previously made or partially made Licensed Product within a period of [*] days of the effective date of such termination provided that the sale of such Licensed Product by LICENSEE, its Sublicensees, or Affiliates shall be subject to the terms of this Agreement, including but not limited to the rendering of reports and payment of royalties required under this Agreement.

7.5 Grant Back to Cornell. To the extent that LICENSEE owns or controls (now or in the future) any patent rights that blocks, interferes with or otherwise prevents Cornell from making or having made, using or having used, selling and having sold, offering for sale or importing or having imported Licensed Products or licensing to others such rights (“Blocking Rights”), then LICENSEE hereby grants or will cause to be granted a nonexclusive, worldwide, perpetual, royalty-free license to make and have made, use and have used, sell and offer for sale, import and have imported products that are claimed in the Blocking Rights, with the right to grant sublicenses to third parties, provided that such products are also Licensed Products and are licensed or exercised by Cornell together with the Patent Rights.

ARTICLE 8. LIMITED WARRANTY AND INDEMNIFICATION

8.1 Limited Warranty .

(a) Cornell warrants that it has the lawful right to grant this license.

(b) T he license granted herein is provided “AS IS” and without WARRANTY OF MERCHANTABILITY or WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE or any other warranty, express or implied. Cornell makes no representation or warranty that the Licensed Product, Licensed Method or the use of Patent Rights will not infringe any other patent or other proprietary rights.

(c) In no event shall Cornell or CRF be liable for any incidental, special or consequential damages resulting from exercise of the license granted herein or the use of the Invention, Licensed Product, Licensed Method.

(d) Nothing in this Agreement shall be construed as:

(i) a warranty or representation by Cornell or CRF as to the validity or scope of any Patent Rights;

(ii) a warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or shall be free from infringement of patents of third parties;

(iii) an obligation to bring or prosecute actions or suits against third parties for patent infringement except as provided in Paragraph 5.2 hereof;

(iv) conferring by implication, estoppel or otherwise any license or rights under any patents of CRF or Cornell other than Patent Rights as defined in this Agreement, regardless of whether those patents are dominant or subordinate to Patent Rights; or

(v) an obligation to furnish any know-how not provided in Patent Rights.

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8.2 Indemnification .

(a) LICENSEE shall indemnify, hold harmless and defend CRF, Cornell, its officers, employees, and agents; the sponsors of the research that led to the Invention; and the Inventors of the patents and patent applications in Patent Rights and their employers against any and all claims, suits, losses, damage, costs, fees, and expenses resulting from or arising out of exercise of this license or any Sublicense. This indemnification shall include, but not be limited to, any product liability.

(b) LICENSEE, at its sole cost and expense, shall insure its activities in connection with the work under this Agreement and obtain, keep in force and maintain insurance or an equivalent program of self insurance as follows:

(i) comprehensive or commercial general liability insurance (contractual liability included) with limits of at least: (A) each occurrence, [*] dollars (US$[*]); (B) products/completed operations aggregate, [*] dollars (US$[*]); (C) personal injury, [*] dollars (US$[*]); and (D) general aggregate (commercial form only), [*] dollars (US$[*]); and

(ii) the coverage and limits referred to above shall not in any way limit the liability of LICENSEE.

(c) LICENSEE shall, within [*] ([*]) days of Effective Date, furnish Cornell with certificates of insurance showing compliance with all requirements. Such certificates shall: (i) provide for [*] ([*]) day advance written notice to Cornell of any modification; (ii) indicate that Cornell has been endorsed as an additionally insured party under the coverage referred to above; and (iii) include a provision that the coverage shall be primary and shall not participate with nor shall be excess over any valid and collectable insurance or program of self-insurance carried or maintained by Cornell.

(d) Cornell shall notify LICENSEE in writing of any claim or suit brought against CRF or Cornell in respect of which Cornell intends to invoke the provisions of this Article. LICENSEE shall keep Cornell informed on a current basis of its defense of any claims under this Article.

ARTICLE 9. USE OF NAMES AND TRADEMARKS

9.1 Nothing contained in this Agreement confers any right to use in advertising, publicity, or other promotional activities any name, trade name, trademark, or other designation of either party hereto (including contraction, abbreviation or simulation of any of the foregoing). Unless required by law, the use by LICENSEE of the name, “Cornell University”, the names of Cornell’s various units, centers, schools, and faculty, and the name, “Cornell Research Foundation”, is prohibited, without the express written consent of Cornell.

9.2 Cornell may disclose to the Inventors the terms and conditions of this Agreement upon their request. If such disclosure is made, Cornell shall request the Inventors not disclose such terms and conditions to others.

9.3 Cornell may acknowledge the existence of this Agreement and the extent of the grant in Article 2 to third parties, but Cornell shall not disclose the financial terms of this Agreement to third parties, except where CRF or Cornell is required by law or the order of a court of competent jurisdiction to do so.

9.4 LICENSEE may acknowledge or make press releases regarding the existence of this Agreement and the extent of the grant in Article 2 but LICENSEE shall not disclose the financial terms of this Agreement except where LICENSEE is required by law or the order of a court of competent jurisdiction to do so. To the extent LICENSEE makes any forward-looking statement in its press releases, LICENSEE shall receive prior consent of Cornell which shall not be unreasonably withheld.

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ARTICLE 10. MISCELLANEOUS PROVISIONS

10.1 Correspondence. Any notice, invoice or payment required to be given to either party under this Agreement shall be deemed to have been properly given and effective:

(a) on the date of delivery if delivered in person;

(b) on the date of successful transmission if sent by facsimile,

(d) five (5) days after mailing if mailed by first-class or certified mail, postage paid, to the respective addresses given below, or to such other address as is designated by written notice given to the other party.

If sent to LICENSEE :

Reports and Notices Contact:

ChromaDex Corporation

10005 Muirlands Blvd

Suite G, First Floor

Attention: Tom Varvaro

EMAIL:tom.varvaro@Chromadex.com

Accounts Payable Contact:

ChromaDex Corporation

10005 Muirlands Blvd

Suite G, First Floor

Attention: Accounts Payable

Intellectual Property Contact

ChromaDex Corporation

10005 Muirlands Blvd

Suite G, First Floor

Attention: Tom Varvaro

EMAIL: tom.varvaro@Chromadex.com

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For all correspondence except payments –

Cornell Center for Technology Enterprise and Commercialization

Attention: Executive Director


CHROMADEX CORPORATION:		CORNELL UNIVERSITY:
By: /s/ William Spengler		By: /s/ B rian Kelly
(Signature of an authorized officer)		(Signature of an authorized officer)
Name: William Spengler		Name: Brian Kelly
Title: President		Title: Director Technology Commercialization and Liason

Date: 7/12/2011		Date: July 12, 2011
ATTEST:		ATTEST:
By: /s/ Frank Jaksch		By: /s/ Carol J. Dempster
(Signature of a witness)		(Signature of a witness)
Name: Frank Jaksch		Name: Carol J. Dempster
Date: 7/12/2011		Date: July 12, 2011

Company Name	CCTEC Agreement No	Your Reference No
Reporting Period ( mm / dd / yyyy ) From ___/ ___/___ Through ___/ ___/___	EXPECTED or ACTUAL ( mm / dd / yyyy ) Date of first sale of Licensed Product(s) ___/ ___/___
Please Check One Your Company Has: [ ] less than 500 employees worldwide [ ] 500 or more employees worldwide

6. Pipeline for Licensed Products
Product Name		Developmental Stage
Product Name		Developmental Stage
Product Name		Developmental Stage
Product Name		Developmental Stage

Report Prepared & Approved By
Name ( Please Print )	Title	Email
Signature		Date ( mm / dd / yyyy ) ___/ ___/___

Company Name	CCTEC Agreement No	Your Reference No
Reporting Period ( mm / dd / yyyy ) From ___/ ___/___ Through ___/ ___/___	EXPECTED or ACTUAL ( mm / dd / yyyy ) Date of first sale of Licensed Product(s) ___/ ___/___
Please list all trade names for product(s) incorporating licensed rights whether or not you had sales during this reporting period.

CCTEC Docket #	Country	Number of Units Sold	Gross Sales by Country	Net Sales by Country* ( A )		Royalty Rate* ( B )	Total Royalties by Country ( A * B )












* Please refer to the license agreement for: · applicable royalty rate, please provide as decimal; · how Net Sales should be calculated; · applicable share of sublicense fees; · application of minimum royalty rate · If sales were in a currency other than United States Dollars, please specify exchange rate used					Royalty Subtotal
					Minimum Royalty Payment*
					Total Royalty Owed
					Total Sublicense Fees* (if applicable)
					Total Payment

Sublicense Activity (if applicable)
Number of sublicenses granted during the reporting period				Number of sublicenses terminated or expired during the reporting period
Granted Sub- Licensee Company Name(s) (please list below)				Terminated Sub-Licensee Company Name(s) (please list below)





Total Number of active sublicenses during reporting period

Other Licensed Products in the pipeline
Product Name		Developmental Stage
Product Name		Developmental Stage
Product Name		Developmental Stage
Product Name		Developmental Stage

Are Licensed Product(s) Manufactured in the US? Yes No
If No, please list countries where Licensed Product(s) is manufactured
Product Name		Countries
Product Name		Countries
Product Name		Countries
Product Name		Countries

Cornell Reference	Country of Filing	Application No
3787-02-US	United States	11/601,714
3787-04-CN	China	200680051368.4
3787-05-EP	Europe	6837837
3787-06-IN	India	4525/DELNP/2008

1.	DEFINITIONS	2
2.	GRANT	6
3.	SUBLICENSES	8
4.	PAYMENT TERMS	8
5.	LICENSE ISSUE FEE	10
6.	LICENSE MAINTENANCE FEE	10
7.	PAYMENTS ON SUBLICENSES	10
8.	ROYALTIES AND MINIMUM ANNUAL ROYALTIES	10
9.	MILESTONE PAYMENTS	11
10.	DUE DILIGENCE	11
11.	PROGRESS AND ROYALTY REPORTS	12
12.	BOOKS AND RECORDS	14
13.	LIFE OF THE AGREEMENT	14
14.	TERMINATION BY THE REGENTS	15
15.	TERMINATION BY LICENSEE	15
16.	USE OF NAMES AND TRADEMARKS	16
17.	LIMITED WARRANTY	16
18.	LIMITATION OF LIABILITY	17
19.	PATENT PROSECUTION AND MAINTENANCE	17
20.	PATENT MARKING	18
21.	PATENT INFRINGEMENT	19
22.	INDEMNIFICATION	20
23.	NOTICES	21
24.	ASSIGNABILITY	22
25.	WAIVER	22
26.	FORCE MAJEURE	22
27.	GOVERNING LAWS; VENUE; ATTORNEYS’ FEES	23
28.	GOVERNMENT APPROVAL OR REGISTRATION	23
29.	COMPLIANCE WITH LAWS	23
30.	CONFIDENTIALITY	23
31.	MISCELLANEOUS	25

	Article 1	Definitions
	Paragraph 3.3	Survival of Sublicenses
	Paragraph 4.8	Late Payments
	Article 5	License Issue Fee
	Article 12	Books and Records
	Article 13	Life of the Agreement
	Article 16	Disposition of Licensed Products on Hand Upon Termination or Expiration
	Article 17	Use of Names and Trademarks
	Article 18	Limited Warranty
	Article 19	Limitation of Liability
	Article 23	Indemnification
	Article 24	Notices
	Article 28	Governing Laws; Venue; Attorneys Fees
	Article 31	Confidentiality

Each Occurrence	$[*]
Products/Completed Operations Aggregate	$[*]
Personal and Advertising Injury	$[*]
General Aggregate (commercial form only)	$[*]

	In the case of Licensee:	ChromaDex, Inc., 10005 Muirlands Blvd, Suite G Irvine, CA 102618 United States of America. Attention:______________

	In the case of The Regents:	The Regents of the University of California Innovation Alliances and Services 1111 Franklin Street, 5th Floor Oakland, CA 94607-5200 Attention: Executive Director Research Administration and Technology Transfer RE: UC Case No. 2011-432

	With a copy to:	Ronnie Hanecak Assistant Vice Chancellor Research and Technology Alliances Office of Technology Alliances 5171 California Avenue, Suite 150 Irvine, CA 92697-7700 RE: UC Case 2011-432

CHROMADEX INC.,	THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
By: /s/ Frank Jaksch	By: /s/ Ronnie Hanecak
Name: Frank Jaksch	Name: Ronnie Hanecak
Title: CEO	Title: Assistant Vice Chancellor Office of Technology Alliances
Date: 9/7/2011	Date: September 8, 2011

UC Case Number	United States Application Number or United States Patent Number	Filing or Issue Date
2011-432	61484977	5/11/2011