|
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
|
Delaware
|
26-2940963
|
(State or other jurisdiction of incorporation) |
(I.R.S. Employer Identification No.)
|
10005 Muirlands Blvd. Suite G, Irvine, California | 92618 |
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Name of Each Exchange on Which Registered |
N/A | N/A |
Large accelerated filer [ ] | Accelerated Filer [X] | ||
Non-accelerated filer [ ] |
Smaller Reporting Company [ ]
(Do not check if smaller reporting company)
|
Item
|
||||
PART I | ||||
Cautionary Notice Regarding Forward-Looking Statements
|
1 | |||
1.
|
Business
|
1
|
||
1A.
|
Risk Factors
|
14
|
||
2.
|
Properties
|
28
|
||
3.
|
Legal Proceedings
|
28
|
||
4.
|
Mine Safety Disclosures
|
28
|
||
PART II | ||||
5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
29
|
||
6.
|
Selected Financial Data
|
30
|
||
7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
30
|
||
7A
|
Quantitative and Qualitative Disclosures About Market Risk
|
37 | ||
8.
|
Financial Statements and Supplementary Data
|
38
|
||
9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
69
|
||
9A
|
Controls and Procedures
|
69
|
||
9B.
|
Other Information
|
72
|
||
PART III | ||||
10.
|
Directors, Executive Officers and Corporate Governance
|
73
|
||
11.
|
Executive Compensation
|
80
|
||
12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
90
|
||
13.
|
Certain Relationships and Related Transactions, and Director Independence
|
92
|
||
14.
|
Principal Accounting Fees and Services
|
93
|
||
PART IV | ||||
15.
|
Exhibits, Financial Statement Schedules
|
95
|
||
Signatures
|
96
|
|
•
|
Commercialization of intellectual property
: We believe that many of our products currently in development have the potential to spin off technologies that may themselves be independently capable of commercialization and becoming significant new revenue sources. We believe that new intellectual property can also be developed from our expansion into new markets.
|
|
•
|
Expansion and growth of the core business
: We intend to continue to expand our phytochemical standards offerings, which is the core of our business. Currently, we have approximately 5,000 defined standards. We expect to add about 500 new standards each year for the foreseeable future.
|
|
•
|
Expansion into new markets
: We are developing business in new domestic and international markets. These markets include both the domestic and international botanical drug market and the market for novel therapeutic botanicals from Asia, South America and Africa. We have also added what we believe to be new and innovative product offerings, including the screening of compound libraries and the offering of value-added raw materials.
|
|
•
|
Expansion through acquisitions
: We are a leader in the phytochemical standards market. We believe other smaller competitors are having difficulty expanding their revenue base and are prime candidates for acquisition by us. We believe that a long-term roll-up strategy could eventually lead to ChromaDex positioning itself as a provider of choice for phytochemical standards and libraries.
|
|
•
|
Ingredient technologies.
We offer bulk raw materials for inclusion in dietary supplements, food, beverage and cosmetic products. This is an area where we are increasing our focus, as we believe we can secure and defend our market positions through patents and long-term manufacturing agreements with our customers and vendors.
|
|
•
|
Supply of reference standards, materials & kits.
Through our catalog, we supply a wide range of products necessary to conduct quality control of raw materials and consumer products. Reference standards and materials and the kits created from them are used for research and quality control in the dietary supplements, cosmetics, food and beverages, and pharmaceutical industries.
|
|
•
|
Supply of fine chemicals and phytochemicals.
As demand for new natural products and phytochemicals increases, we can scale up and supply our core products in the gram to kilogram scale for companies that require these products for research and new product development.
|
|
•
|
Contract services
. ChromaDex, through Chromadex Analytics, provides a wide range of contract services ranging from routine contract analysis for the production of dietary supplements, cosmetics, foods and other natural products to elaborate contract research for clients in these industries.
|
|
•
|
Consulting services
. We provide a comprehensive range of consulting services in the areas of regulatory support, new ingredient or product development, risk management and litigation support. Through Spherix, we provide and offer product regulatory approval and scientific advisory services.
|
|
•
|
Process development.
Developing cost effective and efficient processes for manufacturing natural products can be very difficult and time consuming. We can assist customers in creating processes for cost-effective manufacturing of natural products, using “green chemistry.”
|
|
•
|
Nicotinamide riboside
. We are working to develop and conduct additional clinical trials to reinforce the health benefits associated with nicotinamide riboside. Nicotinamide riboside, a recently discovered vitamin found naturally in milk, is a more potent version of the more commonly known niacin (vitamin B3). Nicotinamide riboside has shown promise for improving cardiovascular health, glucose levels and cognitive function and has demonstrated evidence of anti-aging effects.
|
|
•
|
Pterostilbene and caffeine co-crystal.
We are working to develop and conduct additional clinical trials to reinforce the benefits of the co-crystal ingredient comprised of caffeine and pterostilbene. The first human study of this ingredient demonstrated that it delivers 30 percent more caffeine, stays in the blood stream longer, and is absorbed more slowly than ordinary caffeine. With this ingredient, formulators of energy products may have the ability to reduce the total amount of caffeine in their products by as much as 50% without sacrificing consumers’ expectations from such products.
|
|
•
|
Anthocyanin
. We are working to establish cost-effective methodologies for the efficient production of anthocyanins from genetically engineered bacteria. Anthocyanins are secondary plant metabolites that are mainly responsible for the colors in plant tissues, primarily reds, purples and blues. They are non-toxic and have been observed to possess antioxidant, anticancer and anti-inflammatory activities, making them attractive candidates in the pharmaceutical, dietary supplement and food colorants industries.
|
|
•
|
Phytochemical libraries.
We intend to continue investing in the development of natural product based libraries by continuing to create these libraries internally as well as through product licensing.
|
|
•
|
Plant extracts libraries
. We intend to continue our efforts to create an extensive library of plant extracts using our already extensive list of botanical reference materials.
|
|
•
|
Databases for cross-referencing phytochemicals
. We are working on building a database for cross referencing phytochemicals against an extensive list of plants, including links to references to ethnopharmacological, ethnobotanical, and biological activity, as well as clinical evidence.
|
|
•
|
Intellectual property.
We plan to utilize our expertise in natural products to license and develop new intellectual property that can be licensed to clients in our target industries.
|
|
•
|
Tradeshows and conferences
|
|
•
|
Monthly newsletters (via e-mail)
|
|
•
|
Internet
|
|
•
|
Website
|
|
•
|
Advertising in trade publications
|
|
•
|
Press releases
|
|
•
|
Europe (LGC Limited)
|
|
•
|
South America (JMC, Inc.)
|
|
•
|
Korea (Dongmyung Scientific Co.)
|
|
•
|
India (LGC Promochem India Pvt. Ltd.)
|
|
•
|
Japan
|
|
•
|
Australia and New Zealand
|
|
•
|
China
|
|
•
|
Indonesia, Malaysia, Singapore and Thailand
|
|
•
|
Mexico
|
|
•
|
The
FDA
published its draft guidance for GMPs for dietary supplements on March 13, 2003. The final rule from this guidance was made effective in June 2007, and full compliance was required by June 2010; and
|
|
•
|
Regulatory agencies around the world have started to review the need for the regulation of herbal and natural supplements and are considering regulations that will include testing for the presence of toxic or adulterating compounds, drug/compound interactions and evidence that the products are biologically active for their intended use.
|
|
•
|
Combining the analytical methodology and characterization of materials with the technical support for the sale of reference materials by our clients;
|
|
•
|
Helping companies to comply with government regulations; and
|
|
•
|
Providing value-added solutions to every layer of the supply chain in order to increase the overall quality of products being produced.
|
|
•
|
product testing;
|
|
•
|
product labeling;
|
|
•
|
product manufacturing and storage;
|
|
•
|
pre-market clearance or approval;
|
|
•
|
advertising and promotion; and
|
|
•
|
product sales and distribution.
|
|
•
|
Sigma-Aldrich (SIAL) (USA)
|
|
•
|
Phytolab (Germany)
|
|
•
|
US Pharmacopoeia (USA)
|
|
•
|
Extrasynthese (France)
|
|
•
|
Covance (CVD) (USA)
|
|
•
|
Eurofins (ERF) (France)
|
|
•
|
Silliker Canada Co. (Canada)
|
Patent Number
|
Title
|
Filing Date
|
Issued Date
|
Expires
|
Licensor
|
6,852,342
|
Compounds for altering food intake in humans
|
3/26/2002
|
2/8/2005
|
2/12/2022
|
Co-owned by Avoca, Inc. and ChromaDex
|
7,205,284
|
Potent immunostimulants from microalgae
|
7/10/2001
|
4/17/2007
|
3/9/2022
|
Licensed from University of Mississippi
|
7,338,791
|
Production of Flavanoids by Recombinant Microorganisms
|
7/11/2005
|
3/4/2008
|
7/11/2025
|
Licensed from The Research Foundation of State University of New York
|
7,776,326
|
Methods and compositions for treating neuropathies
|
6/3/2005
|
8/17/2010
|
6/3/2025
|
Licensed from Washington University
|
7,807,422
|
Production of Flavanoids by Recombinant Microorganisms
|
3/3/2008
|
10/5/2010
|
3/3/2028
|
Licensed from The Research Foundation of State University of New York
|
7,846,452
|
Potent immunostimulatory extracts from microalgae
|
7/28/2005
|
10/7/2010
|
7/28/2025
|
Licensed from University of Mississippi
|
8,106,184
|
Nicotinyl Riboside Compositions and Methods of Use
|
11/17/2006
|
1/31/2012
|
11/17/2026
|
Licensed from Cornell University
|
8,114,626
|
Yeast strain and method for using the same to produce Nicotinamide Riboside
|
3/26/2009
|
2/14/2012
|
3/26/2029
|
Licensed from Dartmouth College
|
8,133,917
|
Pterostilbene as an agonist for the peroxisome proliferator-activated receptor alpha isoform
|
10/25/2010
|
3/13/2012
|
10/25/2030
|
Licensed from the University of Mississippi and U.S. Department of Agriculture
|
8,197,807
|
Nicotinamide Riboside Kinase compositions and Methods for using the same
|
11/20/2007
|
6/12/2012
|
11/20/2027
|
Licensed from Dartmouth College
|
8,227,510
|
Combine use of pterostilbene and quercetin for the production of cancer treatment medicaments
|
7/19/2005
|
7/24/2012
|
7/19/2025
|
Licensed from Green Molecular S.L.
|
8,252,845
|
Pterostilbene as an agonist for the peroxisome proliferator-activated receptor alpha isoform
|
2/1/2012
|
8/28/2012
|
2/1/2032
|
Licensed from the University of Mississippi and U.S. Department of Agriculture
|
8,318,807
|
Pterostilbene Caffeine Co-Crystal Forms
|
7/30/2010
|
11/27/2012
|
7/30/2030
|
Licensed from Laurus Labs Private Limited
|
8,383,086
|
Nicotinamide Riboside Kinase compositions and Methods for using the same
|
4/12/2012
|
2/26/2013
|
4/12/2032
|
Licensed from Dartmouth College
|
8,524,782
|
Key intermediate for the preparation of Stilbenes, solid forms of Pterostilbene, and methods for making the same
|
6/1/2009
|
9/3/2013
|
6/1/2029
|
Licensed from Laurus Labs Private Limited
|
8,809,400
|
Method to Ameliorate Oxidative Stress and Improve Working Memory Via Pterostilbene Administration
|
6/10/2008
|
8/19/2014
|
6/10/2028
|
Licensed from the University of Mississippi and U.S. Department of Agriculture
|
8,841,350
|
Method for treating non-melanoma skin cancer by inducing UDP-Glucuronosyltransferase activity using pterostilbene
|
5/8/2012
|
9/22/2014
|
5/8/2032
|
Co-owned by ChromaDex and University of California
|
•
|
make it difficult for us to satisfy our other debt obligations;
|
•
|
make us more vulnerable to general adverse economic and industry conditions;
|
•
|
limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and other general corporate requirements;
|
•
|
expose us to interest rate fluctuations because the interest rate on the debt under the Loan Agreement is variable;
|
•
|
require us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow for operations and other purposes;
|
•
|
limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and
|
•
|
place us at a competitive disadvantage compared to competitors that may have proportionately less debt and greater financial resources.
|
•
|
economic and demand factors affecting our industry;
|
•
|
pricing pressures;
|
•
|
increased operating costs;
|
•
|
competitive conditions; and
|
•
|
other operating difficulties.
|
•
|
incur additional debt;
|
•
|
grant liens on assets;
|
•
|
make investments, including capital expenditures;
|
•
|
sell or acquire assets outside the ordinary course of business; and
|
•
|
make fundamental business changes.
|
•
|
the revenues generated by sales of our products;
|
•
|
the costs associated with expanding our sales and marketing efforts, including efforts to hire independent agents and sales representatives and obtain required regulatory approvals and clearances;
|
•
|
the expenses we incur in developing and commercializing our products, including the cost of obtaining and maintaining regulatory approvals; and
|
•
|
unanticipated general and administrative expenses.
|
•
|
the announcement or introduction of new products by our competitors;
|
•
|
our ability to upgrade and develop our systems and infrastructure to accommodate growth;
|
•
|
our ability to attract and retain key personnel in a timely and cost effective manner;
|
•
|
technical difficulties;
|
•
|
the amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure;
|
•
|
regulation by federal, state or local governments; and
|
•
|
general economic conditions as well as economic conditions specific to the healthcare industry.
|
•
|
we may not be able to obtain regulatory approvals for our products, or the approved indication may be narrower than we seek;
|
•
|
our products may not prove to be safe and effective in clinical trials;
|
•
|
we may experience delays in our development program;
|
•
|
any products that are approved may not be accepted in the marketplace;
|
•
|
we may not have adequate financial or other resources to complete the development or to commence the commercialization of our products or will not have adequate financial or other resources to achieve significant commercialization of our products;
|
•
|
we may not be able to manufacture any of our products in commercial quantities or at an acceptable cost;
|
•
|
rapid technological change may make our products obsolete;
|
•
|
we may be unable to effectively protect our intellectual property rights or we may become subject to claims that our activities have infringed the intellectual property rights of others; and
|
•
|
we may be unable to obtain or defend patent rights for our products.
|
|
•
|
our ability to integrate operations, technology, products and services;
|
|
•
|
our ability to execute our business plan;
|
|
•
|
our operating results are below expectations;
|
|
•
|
our issuance of additional securities, including debt or equity or a combination thereof,;
|
|
•
|
announcements of technological innovations or new products by us or our competitors;
|
|
•
|
loss of any strategic relationship;
|
|
•
|
industry developments, including, without limitation, changes in healthcare policies or practices;
|
|
•
|
economic and other external factors;
|
|
•
|
period-to-period fluctuations in our financial results; and
|
|
•
|
whether an active trading market in our common stock develops and is maintained.
|
•
|
make a special written suitability determination for the purchaser;
|
•
|
receive the purchaser’s written agreement to a transaction prior to sale;
|
•
|
provide the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies;
|
•
|
obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has received the required risk disclosure document before a transaction in a “penny stock” can be completed; and
|
•
|
give bid and offer quotations and broker and salesperson compensation information to the customer orally or in writing before or with the confirmation.
|
Fiscal Year Ending January 3, 2015
|
||||||||
Quarter Ended
|
High
|
Low
|
||||||
January 3, 2015
|
$ | 1.25 | $ | 0.84 | ||||
September 27, 2014
|
$ | 1.46 | $ | 1.02 | ||||
June 28, 2014
|
$ | 1.90 | $ | 1.21 | ||||
March 29, 2014
|
$ | 2.08 | $ | 1.41 |
Fiscal Year Ending December 28, 2013
|
||||||||
Quarter Ended
|
High
|
Low
|
||||||
December 28, 2013
|
$ | 1.58 | $ | 0.78 | ||||
September 28, 2013
|
$ | 0.95 | $ | 0.68 | ||||
June 29, 2013
|
$ | 0.86 | $ | 0.61 | ||||
March 30, 2013
|
$ | 0.80 | $ | 0.50 |
Item 6.
|
Selected Financial Data
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Twelve months ending
|
||||||||||||
January 3, 2015
|
December 28, 2013
|
Change
|
||||||||||
Sales
|
$ | 15,313,179 | $ | 10,160,964 | 51 | % | ||||||
Cost of sales
|
9,987,514 | 7,027,828 | 42 | % | ||||||||
Gross profit
|
5,325,665 | 3,133,136 | 70 | % | ||||||||
Operating expenses-Sales and marketing
|
2,136,584 | 2,357,605 | -9 | % | ||||||||
-General and administrative
|
8,374,601 | 5,117,016 | 64 | % | ||||||||
-Loss from investment in affiliate
|
45,829 | 44,961 | 2 | % | ||||||||
Nonoperating-Interest income
|
2,013 | 1,251 | 61 | % | ||||||||
-Interest expenses
|
(158,849 | ) | (34,330 | ) | 363 | % | ||||||
Net loss
|
$ | (5,388,185 | ) | $ | (4,419,525 | ) | 22 | % |
Page
|
|
Report of Independent Registered Public Accounting Firm
|
39
|
Consolidated Balance Sheets at January 3, 2015 and December 28, 2013
|
40
|
Consolidated Statements of Operations for the Years Ended January 3, 2015 and December 28, 2013
|
41
|
Consolidated Statements of Stockholders’ Equity for the Years Ended January 3, 2015 and December 28, 2013
|
42
|
Consolidated Statements of Cash Flows for the Years Ended January 3, 2015 and December 28, 2013
|
43
|
Notes to Consolidated Financial Statements
|
44
|
2014
|
2013
|
||||||||
Assets
|
|||||||||
Current Assets
|
|||||||||
Cash
|
$ | 3,964,750 | $ | 2,261,336 | |||||
Trade receivables, less allowance for doubtful accounts and returns
2014 $38,000; 2013 $9,000
|
1,906,709 | 838,793 | |||||||
Other receivable
|
- | 215,000 | |||||||
Inventories
|
3,734,341 | 2,204,125 | |||||||
Prepaid expenses and other assets
|
292,891 | 271,445 | |||||||
Total current assets
|
9,898,691 | 5,790,699 | |||||||
Leasehold Improvements and Equipment, net
|
1,264,660 | 1,063,239 | |||||||
Other Noncurrent Assets
|
|||||||||
Deposits and other
|
148,796 | 43,460 | |||||||
Long-term investment in affiliate
|
- | 1,887,844 | |||||||
Intangible assets, net
|
296,061 | 201,650 | |||||||
Total other noncurrent assets
|
444,857 | 2,132,954 | |||||||
Total assets
|
$ | 11,608,208 | $ | 8,986,892 | |||||
Liabilities and Stockholders' Equity
|
|||||||||
Current Liabilities
|
|||||||||
Accounts payable
|
$ | 3,451,608 | $ | 1,440,910 | |||||
Accrued expenses
|
853,685 | 656,707 | |||||||
Current maturities of loan payable
|
223,358 | - | |||||||
Current maturities of capital lease obligations
|
148,278 | 138,887 | |||||||
Customer deposits and other
|
234,435 | 546,044 | |||||||
Deferred rent, current
|
69,456 | 55,586 | |||||||
Total current liabilities
|
4,980,820 | 2,838,134 | |||||||
Loan payable, less current maturities, net
|
2,068,474 | - | |||||||
Capital lease obligations, less current maturities
|
423,015 | 280,342 | |||||||
Deferred rent, less current
|
137,508 | 202,965 | |||||||
Total liabilities
|
7,609,817 | 3,321,441 | |||||||
Commitments and contingencies
|
|||||||||
Stockholders' Equity
|
|||||||||
Common stock, $.001 par value; authorized 150,000,000 shares;
|
|||||||||
issued and outstanding 2014 105,271,058 and 2013 104,524,738 shares
|
105,271 | 104,525 | |||||||
Additional paid-in capital
|
43,417,442 | 39,697,063 | |||||||
Accumulated deficit
|
(39,524,322 | ) | (34,136,137 | ) | |||||
Total stockholders' equity
|
3,998,391 | 5,665,451 | |||||||
Total liabilities and stockholders' equity
|
$ | 11,608,208 | $ | 8,986,892 | |||||
See Notes to Consolidated Financial Statements.
|
Period
|
Volatility
|
Average Daily
Trading Volume
|
||||||
6/20/2008 ~ 4/19/2010
|
402 | % | 11,455 | |||||
4/20/2010 ~ 1/2/2015
|
77 | % | 155,111 |
Fiscal Year 2013
|
Fiscal Year 2013
|
|||||||||||||||||
Name
|
Use
|
Volatility
|
Name
|
Use
|
Volatility
|
|||||||||||||
Covance, Inc.
|
50 | % | 35 | % |
ChromaDex Corp.
|
20 | % | 243 | % | |||||||||
Sigma-Aldrich Corp.
|
50 | % | 30 | % |
Covance Inc.
|
40 | % | 35 | % | |||||||||
Sigma-Aldrich Corp.
|
40 | % | 30 | % | ||||||||||||||
Weighted Average
|
33 | % |
Weighted Average
|
75 | % |
2014
|
2013
|
|||||||
Reference standards
|
$ | 1,760,305 | $ | 1,769,160 | ||||
Bulk ingredients
|
2,298,036 | 694,965 | ||||||
4,058,341 | 2,464,125 | |||||||
Less valuation allowance
|
324,000 | 260,000 | ||||||
$ | 3,734,341 | $ | 2,204,125 |
Useful Life
|
|
Leasehold improvements
|
Until the end of the lease term
|
Computer equipment
|
3 to 5 years
|
Furniture and fixtures
|
7 years
|
Laboratory equipment
|
10 years
|
Years Ended
|
||||||||
2014
|
2013
|
|||||||
Net loss
|
$ | (5,388,185 | ) | $ | (4,419,525 | ) | ||
Basic and diluted loss per common share
|
$ | (0.05 | ) | $ | (0.04 | ) | ||
Weighted average common shares outstanding (1):
|
106,459,379 | 99,987,443 | ||||||
Potentially dilutive securities (2):
|
||||||||
Stock options
|
13,974,052 | 13,160,955 | ||||||
Warrants
|
469,020 | - | ||||||
Convertible Debt | 773,395 | - | ||||||
(1) Includes 1,623,186 and 500,000 weighted average nonvested shares of restricted stock for the year 2014
and 2013, respectively, which are participating securities that feature voting and dividend rights.
|
||||||||
(2) Excluded from the computation of loss per share as their impact is antidilutive.
|
Six Months Ended
|
Three Months Ended
|
|||||||
September 30, 2013
|
December 31, 2013
|
|||||||
Sales
|
$ | 36,451 | $ | 60,575 | ||||
Gross profit
|
13,310 | 33,619 | ||||||
Net loss
|
$ | (813,212 | ) | $ | (435,208 | ) | ||
Carrying
Value
|
Ownership
Percentage
|
|||||||
At March 28, 2013
|
$ | 2,157,804 | 5.7 | % | ||||
Company's share of NeutriSci's loss
|
||||||||
through September 30, 2013
|
(44,961 | ) | ||||||
Proceeds from investment in affiliate
|
(225,000 | ) | ||||||
At December 28, 2013
|
1,887,844 | 4.9 | % | |||||
Company's share of NeutriSci's loss
|
||||||||
for the three-month period ended December 31, 2013;
|
||||||||
previously not recognized due to a three-month lag
|
(21,543 | ) | ||||||
Proceeds from assignment of the Senior Note
|
(1,092,500 | ) | ||||||
Proceeds from sale and transfer of the Preferred Shares
|
(749,515 | ) | ||||||
Loss from investment in affiliate
|
(24,286 | ) | ||||||
At January 3, 2015
|
$ | - | 0.0 | % |
2014
|
2013
|
|||||||||||||||
Gross Carrying
|
Accumulated
|
Gross Carrying
|
Accumulated
|
|||||||||||||
Amount
|
Amortization
|
Amount
|
Amortization
|
|||||||||||||
Amortized intangible assets:
|
||||||||||||||||
License agreements and other
|
$ | 1,205,275 | $ | 909,224 | $ | 1,075,285 | $ | 873,635 |
Years ending December:
|
||||
2015
|
$ | 40,000 | ||
2016
|
40,000 | |||
2017
|
40,000 | |||
2018
|
36,000 | |||
2019
|
33,000 | |||
Thereafter
|
107,000 | |||
$ | 296,000 |
2014
|
2013
|
|||||||
Laboratory equipment
|
$ | 3,151,748 | $ | 2,782,364 | ||||
Leasehold improvements
|
495,240 | 491,125 | ||||||
Computer equipment
|
329,737 | 372,851 | ||||||
Furniture and fixtures
|
13,039 | 18,313 | ||||||
Office equipment
|
7,877 | 7,877 | ||||||
Construction in progress
|
68,141 | 40,126 | ||||||
4,065,782 | 3,712,656 | |||||||
Less accumulated depreciation
|
2,801,122 | 2,649,417 | ||||||
$ | 1,264,660 | $ | 1,063,239 |
Year ending December:
|
||||
2015
|
$ | 191,454 | ||
2016
|
178,563 | |||
2017
|
157,713 | |||
2018
|
108,860 | |||
2019
|
33,884 | |||
Total minimum lease payments
|
670,474 | |||
Less amount representing interest at a rate of approximately 8.8% per year
|
99,181 | |||
Present value of net minimum lease payments
|
571,293 | |||
Less current portion
|
148,278 | |||
Long-term obligations under capital leases
|
$ | 423,015 | ||
September 29, 2014
|
||||
Fair value of common stock
|
$ | 1.08 | ||
Volatility
|
72.40 | % | ||
Expected dividends
|
0.00 | % | ||
Contractual term
|
5.0 years
|
|||
Risk-free rate
|
1.76 | % |
2014
|
2013
|
|||||||
Federal income tax expense at statutory rate
|
(34.0 | )% | (34.0 | )% | ||||
State income tax, net of federal benefit
|
(5.3 | )% | (4.3 | )% | ||||
Permanent differences
|
2.7 | % | 2.6 | % | ||||
Change in tax rates
|
(6.1 | )% | (3.7 | )% | ||||
Change in valuation allowance
|
42.8 | % | 39.2 | % | ||||
Other
|
(0.1 | )% | 0.2 | % | ||||
Effective tax rate
|
0.0 | % | 0.0 | % | ||||
2014
|
2013
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforward
|
$ | 11,401,000 | $ | 8,953,000 | ||||
Stock options and restricted stock
|
2,934,000 | 1,945,000 | ||||||
Investment in affiliate related to BluScience transaction
|
- | 1,187,000 | ||||||
Inventory reserve
|
226,000 | 100,000 | ||||||
Allowance for doubtful accounts
|
15,000 | 3,000 | ||||||
Accrued expenses
|
125,000 | 100,000 | ||||||
Deferred revenue
|
4,000 | 64,000 | ||||||
Intangibles
|
26,000 | 36,000 | ||||||
Deferred rent
|
81,000 | 99,000 | ||||||
14,812,000 | 12,487,000 | |||||||
Less valuation allowance
|
14,669,000 | 12,361,000 | ||||||
143,000 | 126,000 | |||||||
Deferred tax liabilities:
|
||||||||
Leasehold improvements and equipment
|
(108,000 | ) | (100,000 | ) | ||||
Prepaid expenses
|
(35,000 | ) | (26,000 | ) | ||||
(143,000 | ) | (126,000 | ) | |||||
$ | - | $ | - |
Year Ended December
|
2014
|
2013
|
||||||
Expected Volatility
|
74.63 | % | 32.75 | % | ||||
Expected dividends
|
0.00 | % | 0.00 | % | ||||
Expected term
|
5.76 years
|
6.0 years
|
||||||
Risk-free rate
|
1.86 | % | 1.51 | % |
Period
|
Volatility
|
Average Daily
Trading Volume
|
||||||
6/20/2008 ~ 4/19/2010
|
402 | % | 11,455 | |||||
4/20/2010 ~ 1/2/2015
|
77 | % | 155,111 |
Weighted Average
|
||||||||||||||||
Remaining
|
Aggregate
|
|||||||||||||||
Number of
|
Exercise
|
Contractual
|
Intrinsic
|
|||||||||||||
Shares
|
Price
|
Term
|
Value
|
|||||||||||||
Outstanding at December 28, 2013
|
12,113,655 | $ | 1.06 | 7.43 | ||||||||||||
Options Granted
|
2,233,987 | 1.39 | 10.00 | |||||||||||||
Options Classification from Employee
to Non-Employee
|
(113,151 | ) | 0.76 | |||||||||||||
Options Exercised
|
(534,715 | ) | 0.87 | |||||||||||||
Options Expired
|
(253,900 | ) | 1.00 | |||||||||||||
Options Forfeited
|
(722,275 | ) | 1.13 | |||||||||||||
Outstanding at January 3, 2015
|
12,723,601 | $ | 1.13 | 7.00 | $ | 581,050 | ||||||||||
Exercisable at January 3, 2015
|
9,362,374 | $ | 1.13 | 6.40 | $ | 455,570 |
Weighted Average
|
||||||||||||||||
Remaining
|
Aggregate
|
|||||||||||||||
Number of
|
Exercise
|
Contractual
|
Intrinsic
|
|||||||||||||
Shares
|
Price
|
Term
|
Value
|
|||||||||||||
Outstanding at December 28, 2013
|
200,000 | $ | 0.63 | 9.08 | ||||||||||||
Options Granted
|
- | - | ||||||||||||||
Options Exercised
|
- | - | ||||||||||||||
Options Expired
|
- | - | ||||||||||||||
Options Forfeited
|
- | - | ||||||||||||||
Outstanding at January 3, 2015
|
200,000 | $ | 0.63 | 8.08 | $ | 54,000 | ||||||||||
Exercisable at January 3, 2015
|
95,833 | $ | 0.63 | 8.08 | $ | 25,875 |
Weighted Average
|
||||||||
Award-Date
|
||||||||
Shares
|
Fair Value
|
|||||||
Unvested shares at December 28, 2013
|
500,000 | $ | 0.69 | |||||
Granted
|
1,090,000 | 1.41 | ||||||
Vested
|
- | - | ||||||
Forfeited
|
- | - | ||||||
Unvested shares at January 3, 2015
|
1,590,000 | $ | 1.18 | |||||
Expected to Vest as of January 3, 2015
|
1,590,000 | $ | 1.18 |
Weighted Average
|
||||||||||||||||
Remaining
|
Aggregate
|
|||||||||||||||
Number of
|
Exercise
|
Contractual
|
Intrinsic
|
|||||||||||||
Shares
|
Price
|
Term
|
Value
|
|||||||||||||
Outstanding at December 28, 2013
|
847,300 | $ | 1.44 | 5.74 | ||||||||||||
Options Granted
|
90,000 | 1.24 | 10.00 | |||||||||||||
Options Classification from Employe
to Non-Employee
|
113,151 | 0.76 | ||||||||||||||
Options Exercised
|
- | - | ||||||||||||||
Options Forfeited
|
- | - | ||||||||||||||
Outstanding at January 3, 2015
|
1,050,451 | $ | 1.35 | 5.46 | $ | 37,550 | ||||||||||
Exercisable at January 3, 2015
|
971,701 | $ | 1.36 | 5.12 | $ | 37,550 |
October 27, 2014
|
||||
Volatility
|
66.9 | % | ||
Expected dividends
|
0.00 | % | ||
Contractual term
|
2.0 years
|
|||
Risk-free rate
|
0.41 | % |
Weighted Average
|
||||||||
Shares
|
Fair Value
|
|||||||
Unvested shares at December 28, 2013
|
- | $ | - | |||||
Granted
|
96,000 | 1.30 | ||||||
Vested
|
(20,000 | ) | 1.17 | |||||
Forfeited
|
- | - | ||||||
Unvested shares expected to vest at January 3, 2015
|
76,000 | $ | 0.90 |
Weighted Average
|
||||||||||||||
Remaining
|
Aggregate
|
|||||||||||||
Number of
|
Exercise
|
Contractual
|
Intrinsic
|
|||||||||||
Shares
|
Price
|
Term
|
Value
|
|||||||||||
Outstanding at December 29, 2012
|
10,056,914 | $ | 0.72 | 0.44 | ||||||||||
Warrants Issued
|
||||||||||||||
Warrants Exercised
|
(8,338,564 | ) | 0.25 | |||||||||||
Warrants Expired
|
(1,718,350 | ) | 3.00 | |||||||||||
Outstanding at December 28, 2013
|
- | - | ||||||||||||
Warrants Issued
|
469,020 | 1.07 | 4.68 | |||||||||||
Warrants Exercised
|
- | - | ||||||||||||
Warrants Expired
|
- | - | ||||||||||||
Outstanding and exercisable at January 3, 2015
|
469,020 | $ | 1.07 | 4.43 | $ |
-
|
|
·
|
Core standards, and contract services segment includes supply of phytochemical reference standards, which are small quantities of plant-based compounds typically used to research an array of potential attributes, reference materials, and related contract services.
|
|
·
|
Ingredients segment develops and commercializes proprietary-based ingredient technologies and supplies these ingredients to the manufacturers of consumer products in various industries including the nutritional supplement, food and beverage and animal health industries.
|
|
·
|
Scientific and regulatory consulting segment which consist of providing scientific and regulatory consulting to the clients in the food, supplement and pharmaceutical industries to manage potential health and regulatory risks.
|
Year ended
January 3, 2015
|
Core Standards and
Contract Services
|
Ingredients
segment
|
Regulatory
Consulting segment
|
Other
|
Total
|
|||||||||||||||
Net sales
|
$ | 7,487,189 | $ | 6,857,177 | $ | 968,813 | $ | - | $ | 15,313,179 | ||||||||||
Cost of sales
|
5,141,667 | 4,257,347 | 588,500 | - | 9,987,514 | |||||||||||||||
Gross profit
|
2,345,522 | 2,599,830 | 380,313 | - | 5,325,665 | |||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Sales and marketing
|
975,800 | 1,081,209 | 79,575 | - | 2,136,584 | |||||||||||||||
General and administrative
|
- | - | - | 8,374,601 | 8,374,601 | |||||||||||||||
Loss from investment in affiliate
|
- | - | - | 45,829 | 45,829 | |||||||||||||||
Operating expenses
|
975,800 | 1,081,209 | 79,575 | 8,420,430 | 10,557,014 | |||||||||||||||
Operating income (loss)
|
$ | 1,369,722 | $ | 1,518,621 | $ | 300,738 | $ | (8,420,430 | ) | $ | (5,231,349 | ) |
Year ended
December 28, 2013
|
Core Standards and
Contract Services
|
Ingredients
segment
|
Scientific and
Regulatory
|
Other
|
Total
|
|||||||||||||||
Net sales
|
$ | 6,643,832 | $ | 2,430,699 | $ | 1,146,718 | $ | (60,285 | ) | $ | 10,160,964 | |||||||||
Cost of sales
|
4,893,649 | 1,501,187 | 632,037 | 955 | 7,027,828 | |||||||||||||||
Gross profit (loss)
|
1,750,183 | 929,512 | 514,681 | (61,240 | ) | 3,133,136 | ||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Sales and marketing
|
1,459,620 | 752,121 | 14,705 | 131,159 | 2,357,605 | |||||||||||||||
General and administrative
|
- | - | - | 5,117,016 | 5,117,016 | |||||||||||||||
Loss from investment in affiliate
|
- | - | - | 44,961 | 44,961 | |||||||||||||||
Operating expenses
|
1,459,620 | 752,121 | 14,705 | 5,293,136 | 7,519,582 | |||||||||||||||
Operating income (loss)
|
$ | 290,563 | $ | 177,391 | $ | 499,976 | $ | (5,354,376 | ) | $ | (4,386,446 | ) |
At January 3, 2015
|
Core Standards and
Contract Services
|
Ingredients
segment
|
Scientific and
Regulatory
|
Other
|
Total
|
|||||||||||||||
Total assets
|
$ | 3,220,518 | $ | 3,757,073 | $ | 105,711 | $ | 4,524,906 | $ | 11,608,208 |
At December 28, 2013
|
Core Standards and
Contract Services
|
Ingredients
segment
|
Scientific and
Regulatory
|
Other
|
Total
|
|||||||||||||||
Total assets
|
$ | 2,952,270 | $ | 1,083,856 | $ | 139,765 | $ | 4,811,001 | $ | 8,986,892 | ||||||||||
|
·
|
Michael Brauser – 26,667 stock options at an exercise price of $1.25 per share; 250,000 shares of restricted stock.
|
|
·
|
Barry Honig – 26,667 stock options at an exercise price of $1.25 per share; 250,000 shares of restricted stock.
|
|
(1) Member of our Audit Committee.
|
|
(2) Member of our Compensation Committee.
|
|
(3) Member of our Nominating and Corporate Governance Committee.
|
|
•
|
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
|
|
•
|
full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications;
|
|
•
|
compliance with applicable governmental laws, rules and regulations;
|
|
•
|
prompt internal reporting of violations of the Code of Conduct to appropriate persons identified in the code; and
|
|
•
|
accountability for adherence to the Code of Conduct.
|
•
|
available on our corporate website at
www.chromadex.com
; and
|
•
|
available in print to any stockholder who requests them from our corporate secretary.
|
|
•
|
Mr. Dabney qualifies as an “audit committee financial expert,” as defined by the SEC in Item 407(d)(5) of Regulation S-K; and
|
|
•
|
all members of the Audit Committee (i) are “independent” under the independence requirements of Marketplace Rule 5605(a)(2) of the NASDAQ Stock Market, Inc., (ii) meet the criteria for independence as set forth in the Exchange Act, (iii) have not participated in the preparation of our financial statements at any time during the past three years and (iv) are financially literate and have accounting and finance experience.
|
|
Submitted by:
The Audit Committee Of
The Board of Directors
Reid Dabney (Chairman)
Stephen Block
Glenn L. Halpryn
|
|
•
|
all members of the Compensation Committee qualify as “independent” under the independence requirements of Marketplace Rule 5605(a)(2) of the NASDAQ Stock Market, Inc.;
|
|
•
|
all members of the Compensation Committee qualify as “non-employee directors” under Exchange Act Rule 16b-3; and
|
|
•
|
all members of the Compensation Committee qualify as “outside directors” under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).
|
Name
|
Year
|
Salary
|
Bonus
|
Stock Awards
(1)
|
Option
Awards
(2)
|
All Other Compensation
|
Total
($)
|
||||||||||||||||||
Frank L. Jaksch Jr.
|
2014
|
$ | 275,000 | $ | 30,000 | $ | 352,500 | (3) | $ | 138,518 | (4) | - | $ | 796,018 | |||||||||||
2013
|
$ | 225,000 | $ | 51,242 | - | - | - | $ | 276,242 | ||||||||||||||||
Thomas C. Varvaro
|
2014
|
$ | 225,000 | $ | 24,200 | $ | 352,500 | (5) | $ | 115,807 | (6) | - | $ | 717,507 | |||||||||||
2013
|
$ | 175,000 | $ | 29,891 | - | - | - | $ | 204,891 | ||||||||||||||||
Troy A. Rhonemus(7)
|
2014
|
$ | 179,039 | - | - | $ | 358,723 | (8) | - | $ | 537,762 | ||||||||||||||
2013
|
- | - | - | - | - | - |
(1)
|
The amounts in the column titled “Stock Awards” above reflect the aggregate award date fair value of restricted stock awards. These restricted stock awards shall vest upon the earlier to occur of the following: (A) the average closing market price of the Company’s common stock exceeds $2.50 per share over any six month period, (B) the Company experiences a change in control, (C) the Company’s common stock or assets are acquired by, or the Company merges with, another entity or engages in another form of reorganization as a result of which it is not the surviving corporation, (D) service is terminated without cause for any reason, or (E) the Company’s stock is listed on a national securities exchange, but in no event would any shares vest prior to July 1, 2014. The fair values of these restricted stock awards were based on the trading price of the Company’s common stock on the date of grant.
|
|
(2)
|
The amounts in the column titled “Option Awards” above reflect the aggregate grant date fair value of stock option awards for the fiscal year ended January 3, 2015. See Note 10 of the ChromaDex Corporation Consolidated Financial Report included in this Form 10-K for the year ended January 3, 2015 for a description of certain assumptions in the calculation of the fair value of the Company’s stock options.
|
(3)
|
On January 2, 2014, Frank L. Jaksch Jr. was awarded 250,000 shares of restricted stock. As of January 3, 2015, these shares have not vested.
|
(4)
|
On June 18, 2014, Frank L. Jaksch Jr. was granted options to purchase 150,000 shares of ChromaDex common stock at an exercise price of $1.25. These options expire on June 18, 2024 and 25% of the options vest on June 18, 2015 and the remaining 75% vest 2.083% monthly thereafter.
|
(5)
|
On January 2, 2014, Thomas C. Varvaro was awarded 250,000 shares of restricted stock. As of January 3, 2015, these shares have not vested.
|
(6)
|
On June 18, 2014, Thomas C. Varvaro was granted options to purchase 125,000 shares of ChromaDex common stock at an exercise price of $1.25. These options expire on June 18, 2024 and 25% of the options vest on June 18, 2015 and the remaining 75% vest 2.083% monthly thereafter.
|
(7)
|
Troy A. Rhonemus became the Company’s Chief Operating Officer on March 6, 2014.
|
(8)
|
On February 21, 2014, Troy A. Rhonemus was granted options to purchase 250,000 shares of ChromaDex common stock at an exercise price of $1.75. These options expire on February 21, 2024 and 33% of the options vested on February 21, 2015 and the remaining 67% vest 2.778% monthly thereafter. In addition, on June 18, 2014, Troy A. Rhonemus was granted options to purchase 75,000 shares of ChromaDex common stock at an exercise price of $1.25. These options expire on June 18, 2024 and 25% of the options vest on June 18, 2015 and the remaining 75% vest 2.083% monthly thereafter.
|
Name
|
Fees
Earned or
Paid in
Cash ($)
|
Stock
Awards
($)(1)
|
Option
Awards
($)(2)
|
Non-Equity
Incentive Plan
Compensation ($)
|
Non-Qualified
Deferred
Compensation
Earnings ($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
Stephen Allen (3)
|
- | - | 262,241 | - | - | - | 262,241 | |||||||||||||||||||||
Stephen Block(4)
|
- | 70,500 | 60,221 | - | - | - | 130,721 | |||||||||||||||||||||
Reid Dabney(5)
|
- | 14,100 | 58,396 | - | - | - | 72,496 | |||||||||||||||||||||
Hugh Dunkerley(6)
|
- | 14,100 | 49,272 | - | - | - | 63,372 | |||||||||||||||||||||
Mark S. Germain(7)
|
- | 14,100 | 49,272 | - | - | - | 63,372 | |||||||||||||||||||||
Glenn L. Halpryn(8)
|
- | 14,100 | 54,746 | - | - | - | 68,846 | |||||||||||||||||||||
Michael H. Brauser(9)
|
- | 352,500 | 58,396 | - | - | - | 410,896 | |||||||||||||||||||||
Barry Honig(10)
|
- | 352,500 | 58,396 | - | - | - | 410,896 |
(1)
|
The amounts in the column titled “Stock Awards” above reflect the aggregate award date fair value of restricted stock awards. Except as stated below with respect to restricted stock held by Mr. Brauser and Mr. Honig, restricted stock awards shall vest upon the earlier to occur of the following: (A) the average closing market price of the Company’s common stock exceeds $2.50 per share over any six month period, (B) the Company experiences a change in control, (C) the Company’s common stock or assets are acquired by, or the Company merges with, another entity or engages in another form of reorganization as a result of which it is not the surviving corporation, (D) service is terminated without cause for any reason, or (E) the Company’s stock is listed on a national securities exchange, but in no event would any shares vest prior to July 1, 2014. The fair values of these restricted stock awards were based on the trading price of the Company’s common stock on the date of grant.
|
(2)
|
The amounts in the column titled “Option Awards” above reflect the aggregate grant date fair value of stock option awards for the fiscal year ended January 3, 2015. See Note 10 of the ChromaDex Corporation Consolidated Financial Report included in this Form 10-K for the year ended January 3, 2015 for a description of certain assumptions in the calculation of the fair value of the Company’s stock options. Except as stated below with respect to options awarded to Mr. Allen, the options have an exercise price of $1.25 and, except as stated below with respect to options held by Mr. Brauser and Mr. Honig, vest 1/12
th
every month for 12 months commencing in June 2014.
|
(3)
|
On February 21, 2014, Stephen Allen was awarded the option to purchase 200,000 shares of the Company’s common stock with an exercise price of $1.75 per share. On June 18, 2014, Stephen Allen was awarded the option to purchase 82,500 shares of the Company’s common stock.
|
(4)
|
On January 2, 2014, Stephen Block was awarded 50,000 shares of restricted stock. On June 18, 2014, Stephen Block was awarded the option to purchase 82,500 shares of the Company’s common stock.
|
(5)
|
On January 2, 2014, Reid Dabney was awarded 10,000 shares of restricted stock. On June 18, 2014, Reid Dabney was awarded the option to purchase 80,000 shares of the Company’s common stock.
|
(6)
|
On January 2, 2014, Hugh Dunkerley was awarded 10,000 shares of restricted stock. On June 18, 2014, Hugh Dunkerley was awarded the option to purchase 67,500 shares of the Company’s common stock.
|
(7)
|
On January 2, 2014, Mark S. Germain was awarded 10,000 shares of restricted stock. On June 18, 2014, Mark S. Germain was awarded the option to purchase 67,500 shares of the Company’s common stock.
|
(8)
|
On January 2, 2014, Glenn L. Halpryn was awarded 10,000 shares of restricted stock. On June 18, 2014, Glenn L. Halpryn was awarded the option to purchase 75,000 shares of the Company’s common stock.
|
(9)
|
On January 2, 2014, Michael H. Brauser was awarded 250,000 shares of restricted stock. On June 18, 2014, Michael Brauser was awarded the option to purchase 80,000 shares of the Company’s common stock. This option award was to vest 1/12
th
every month for 12 months. Effective February 25, 2015, all of Mr. Brauser’s unvested restricted stock and options became fully vested upon his resignation from the Board of Directors.
|
(10)
|
On January 2, 2014, Barry Honig was awarded 250,000 shares of restricted stock. On June 18, 2014, Barry Honig was awarded the option to purchase 80,000 shares of the Company’s common stock. This option award was to vest 1/12
th
every month for 12 months. Effective February 25, 2015, all of Mr. Honig’s unvested restricted stock and options became fully vested upon his resignation from the Board of Directors.
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option Exercise
Price ($)
|
Option
Expiration Date
|
||||||||||||||
Frank L. Jaksch Jr.
|
|
300,000
|
|
|
—
|
—
|
|
1.50
|
|
|
12/1/2016
|
|
||||||||
|
700,000
|
|
|
—
|
—
|
|
1.50
|
|
|
4/21/2018
|
|
|||||||||
|
150,000
|
|
|
—
|
—
|
|
1.50
|
|
|
4/21/2018
|
|
|||||||||
|
100,000
|
|
|
—
|
—
|
|
0.50
|
|
|
5/13/2019
|
|
|||||||||
|
100,000
|
|
|
—
|
—
|
|
1.70
|
|
|
5/20/2020
|
|
|||||||||
111,979
|
|
|
13,021
|
(1)
|
—
|
|
1.54
|
|
|
5/10/2021
|
||||||||||
145,833
|
104,167
|
(2)
|
—
|
0.64
|
8/28/2022
|
|||||||||||||||
1,426,064
|
475,354
|
(3)
|
—
|
0.945
|
9/15/2022
|
|||||||||||||||
—
|
150,000
|
(4)
|
—
|
1.25
|
6/18/2024
|
|||||||||||||||
Thomas C. Varvaro
|
|
250,000
|
|
|
—
|
—
|
|
1.50
|
|
|
12/1/2016
|
|
||||||||
|
100,000
|
|
|
—
|
—
|
|
1.50
|
|
|
4/21/2018
|
|
|||||||||
|
75,000
|
|
|
—
|
—
|
|
0.50
|
|
|
5/13/2019
|
|
|||||||||
|
336,700
|
|
|
—
|
—
|
|
1.545
|
|
|
5/20/2020
|
|
|||||||||
|
75,000
|
|
|
—
|
—
|
|
1.545
|
|
|
5/20/2020
|
|
|||||||||
3,841
|
|
|
447
|
(5)
|
—
|
|
1.54
|
|
|
5/10/2021
|
||||||||||
116,667
|
83,333
|
(6)
|
—
|
0.64
|
8/28/2022
|
|||||||||||||||
647,633
|
215,878
|
(7)
|
—
|
0.945
|
9/15/2022
|
|||||||||||||||
—
|
125,000
|
(8)
|
—
|
1.25
|
6/18/2024
|
|||||||||||||||
Troy A. Rhonemus
|
|
191,667
|
|
|
208,333
|
(9)
|
—
|
|
0.63
|
|
|
1/25/2023
|
||||||||
|
—
|
|
|
250,000
|
(10)
|
—
|
|
1.75
|
|
|
2/21/2024
|
|||||||||
|
—
|
|
|
75,000
|
(11)
|
—
|
|
1.25
|
|
|
6/18/2024
|
(1)
|
2,604 of Mr. Jaksch’s options vest on 10
th
of every month through May 10, 2015.
|
(2)
|
5,208 of Mr. Jaksch’s options vest on 28
th
of every month through August 28, 2016.
|
(3)
|
52,817 of Mr. Jaksch’s options vest on 15
th
of every month through September 15, 2015.
|
(4)
|
3,125 of Mr. Jaksch’s options vest on 18
th
of every month through June 18, 2018.
|
(5)
|
89 of Mr. Varvaro’s options vest on 10
th
of every month through May 10, 2015.
|
(6)
|
4,167 of Mr. Varvaro’s options vest on 28
th
of every month through August 28, 2016.
|
(7)
|
23,986 of Mr. Varvaro’s options vest on 15
th
of every month through September 15, 2015.
|
(8)
|
2,604 of Mr. Varvaro’s options vest on 18
th
of every month through June 18, 2018.
|
(9)
|
8,333 of Mr. Rhonemus’ options vest on 25
th
of every month through January 25, 2017.
|
(10)
|
6,944 of Mr. Rhonemus’ options vest on 21
st
of every month through February 21, 2017.
|
(11)
|
6,250 of Mr. Rhonemus’ options vest on 18
th
of every month through June 18, 2018.
|
Name |
Number of Shares or
Units of Stock
That Have Not Vested (#)
|
Market Value of Shares
of Units of Stock That
Have Not Vested ($)
|
Equity incentive plan
awards: Number of
unearned shares, units
or other rights that
have not vested (#)
|
Equity incentive plan
awards: Market or
payout value of
unearned Shares, units
or other rights that
have not vested ($) (1)
|
||||||||||||
Frank L. Jaksch Jr.
|
— | — | 500,000 | (2 | ) | $ | 450,000 | |||||||||
Thomas C. Varvaro
|
— | — | 500,000 | (3 | ) | $ | 450,000 | |||||||||
Troy A. Rhonemus
|
— | — | — | $ | — |
(1)
|
The amounts in the column titled “Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested” above reflect the aggregate market value based on the closing market price of the Company’s stock on January 3, 2015.
|
(2)
|
On June 6, 2012, Frank L. Jaksch Jr. was awarded 250,000 shares of restricted stock. These shares shall vest upon the earlier to occur of the following: (A) the average closing market price of the Company’s common stock exceeds $2.00 per share over any six month period, (B) the Company experiences a change in control, (C) the Company engages in a merger or other reorganization in which it is not the surviving corporation, (D) the Company sells all or substantially all of its assets, (E) service is terminated for any reason, or (F) the Company’s stock is listed on a national securities exchange. In addition, on January 2, 2014, Mr. Jaksch was awarded 250,000 shares of restricted stock. These shares shall vest upon the earlier to occur of the following: (A) the average closing market price of the Company’s common stock exceeds $2.50 per share over any six month period, (B) the Company experiences a change in control, (C) the Company’s common stock or assets are acquired by, or the Company merges with another entity or engages in another form of reorganization as a result of which it is not the surviving corporation, (D) service is terminated without cause for any reason, or (E) the Company’s stock is listed on a national securities exchange, but in no event would any shares vest prior to July 1, 2014.
|
(3)
|
On June 6, 2012, Thomas C. Varvaro was awarded 250,000 shares of restricted stock. These shares shall vest upon the earlier to occur of the following: (A) the average closing market price of the Company’s common stock exceeds $2.00 per share over any six month period, or (B) the Company experiences a change in control, (C) the Company engages in a merger or other reorganization in which it is not the surviving corporation, (D) the Company sells all or substantially all of its assets, (E) service is terminated for any reason, or (F) the Company’s stock is listed on a national securities exchange. In addition, on January 2, 2014, Mr. Varvaro was awarded 250,000 shares of restricted stock. These shares shall vest upon the earlier to occur of the following: (A) the average closing market price of the Company’s common stock exceeds $2.50 per share over any six month period, (B) the Company experiences a change in control, (C) the Company’s common stock or assets are acquired by, or the Company merges with another entity or engages in another form of reorganization as a result of which it is not the surviving corporation, (D) service is terminated without cause for any reason, or (E) the Company’s stock is listed on a national securities exchange, but in no event would any shares vest prior to July 1, 2014.
|
Name of Beneficial Owner (1)
|
Shares of Common Stock Beneficially Owned (2)
|
Aggregate Percentage Ownership
|
||||||
Dr. Phillip Frost (3)
|
15,252,937 | 14.22 | % | |||||
Michael Brauser (4)
|
8,738,088 | 8.13 | % | |||||
Barry Honig (5)
|
8,420,216 | 7.83 | % | |||||
Black Sheep, FLP (6)
|
6,225,155 | 5.80 | % | |||||
Directors
|
||||||||
Stephen Allen (7)
|
268,750 | * | ||||||
Stephen Block (8)
|
563,731 | * | ||||||
Reid Dabney (9)
|
626,867 | * | ||||||
Hugh Dunkerley (10)
|
484,525 | * | ||||||
Mark S. Germain (11)
|
749,774 | * | ||||||
Glenn L. Halpryn (12)
|
1,553,237 | 1.43 | % | |||||
Frank L. Jaksch Jr. (13)
|
11,527,319 | 10.43 | % | |||||
Named Executive Officers
|
||||||||
Frank L. Jaksch Jr., Chief Executive Officer
|
(See above)
|
|||||||
Thomas C. Varvaro, Chief Financial Officer (14)
|
2,224,900 | 2.04 | % | |||||
Troy Rhonemus, Chief Operating Officer (15)
|
337,222 | * | ||||||
All directors and executive officers as a group
|
||||||||
(7 Directors plus Chief Financial Officer
|
||||||||
and Chief Operating Officer)
(16)
|
18,316,325 | 15.86 | % |
*
|
Represents less than 1%.
|
(1)
|
Addresses for the beneficial owners listed are: Dr. Phillip Frost, 4400 Biscayne Blvd., Suite 1500, Miami, FL 33137; Michael Brauser, 4400 Biscayne Blvd., Suite 850, Miami, FL 33137; Barry Honig, 555 South Federal Highway, #450, Boca Raton, FL 33432; and Black Sheep, FLP 6 Palm Hill Drive, San Juan Capistrano, CA 92675.
|
(2)
|
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or dispositive power with respect to shares beneficially owned. Unless otherwise specified, reported ownership refers to both voting and dispositive power. Shares of common stock issuable upon the conversion of stock options or the exercise of warrants within the next 60 days are deemed to be converted and beneficially owned by the individual or group identified in the Aggregate Percentage Ownership column.
|
(3)
|
Includes 5,852,937 shares of common stock held by Frost Gamma Investments Trust and 9,400,000 shares of common stock held by Phillip and Patricia Frost Philanthropic Foundation, Inc. Dr. Phillip Frost is the trustee of Frost Gamma Investments Trust. Frost Gamma Limited Partnership is the sole and exclusive beneficiary of Frost Gamma Investments Trust. Dr. Frost is one of two limited partners of Frost Gamma Limited Partnership. The general partner of Frost Gamma Limited Partnership is Frost Gamma, Inc. and the sole shareholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr. Frost is also the sole shareholder of Frost-Nevada Corporation. Dr. Phillip Frost is President of Phillip and Patricia Frost Philanthropic Foundation, Inc. Dr. Frost is a stockholder and chairman of the board of Ladenburg Thalmann Financial Services, Inc. (NYSE:LTS), parent company of Ladenburg Thalmann & Co., Triad Advisors, Inc. and Investacorp Inc., each registered broker-dealers.
|
(4)
|
Direct ownership of (i) 1,143,498 shares of common stock; and (ii) through Michael & Betsy Brauser TBE, 3,626,428 shares of common stock. Indirect ownership through (i) 628,570 Shares held by Grander Holdings, Inc. 401K Profit Sharing Plan of which Mr. Brauser is a trustee; (ii) 342,857 Shares held by the Brauser 2010 GRAT of which Mr. Brauser is a trustee; (iii) 342,857 Shares held by Birchtree Capital, LLC of which Mr. Brauser is the manager; (iv) 1,692,856 Shares held by BMB Holdings, LLLP of which Mr. Brauser is the manager of its general partner; and (v) 714,284 Shares held by Betsy Brauser Third Amended Trust Agreement beneficially owned by Mr. Brauser's spouse which are disclaimed by him. Includes 246,738 stock options exercisable within 60 days.
|
(5)
|
Direct ownership of 4,824,959 shares of common stock. Indirect ownership includes (i) 230,000 Shares owned by GRQ Consultants, Inc. Defined Benefits Plan for the benefit of Mr. Honig; (ii) 966,786 Shares owned by GRQ Consultants, Inc. 401K of which Mr. Honig is the beneficiary; (iii) 2,103,571 Shares owned by GRQ Consultants Inc. Roth 401K FBO Renee Honig, Mr. Honig's spouse, of which Mr. Honig has voting and investment power and disclaims beneficial ownership; and (iv) 89,900 shares owned by GRQ Consultants, Inc., of which Mr. Honig is the President. Includes 205,000 stock options exercisable within 60 days.
|
(6)
|
Black Sheep, FLP is a family limited partnership the co-general partners of which are Frank L. Jaksch, Jr. and Tricia Jaksch and the sole limited partners of which are Frank L. Jaksch, Jr., Tricia Jaksch and the Jaksch Family Trust.
|
(7)
|
Includes 268,750 stock options exercisable within 60 days.
|
(8)
|
Includes 513,731 stock options exercisable within 60 days.
|
(9)
|
Includes 616,867 stock options exercisable within 60 days.
|
(10)
|
Includes 474,525 stock options exercisable within 60 days.
|
(11)
|
Includes 739,774 stock options exercisable within 60 days. Does not include 2,053,995 shares beneficially owned by Margery Germain, who is Mr. Germain’s wife, as Mr. Germain does not share voting or dispositive control over those shares.
|
(12)
|
Direct ownership of 10,000 shares of common stock. Indirect ownership through IVC Investors, LLLP (in which Glenn Halpryn has an interest) of 1,271,428 shares of common stock. Glenn Halpryn disclaims beneficial ownership of these shares except to the extent of any pecuniary interest therein. Includes 251,809 stock options exercisable within 60 days.
|
(13)
|
Includes 1,429,000 shares owned by the FMJ Family Limited Partnership, beneficially owned by Frank L Jaksch Jr. because Mr. Jaksch Jr. has shared voting power for such shares. Includes 6,225,155 shares owned by Black Sheep, FLP beneficially owned by Mr. Jaksch Jr. because he has shared voting power and shared dispositive power for such shares. Includes 594,165 shares directly owned by Mr. Jaksch Jr. Includes 3,278,999 stock options exercisable within 60 days.
|
(14)
|
Includes 1,717,900 stock options exercisable within 60 days.
|
(15)
|
Direct ownership of 5,000 shares of common stock. Indirect ownership through Toni Rhonemus IRA of 10,000 shares beneficially owned by Toni Rhonemus who is Mr. Rhonemus’ wife. Includes 322,222 stock options exercisable within 60 days.
|
(16)
|
Includes 8,184,577 stock options exercisable within 60 days.
|
A | B | C | ||||||||||
Plan Category
|
Number of
securities
to be issued
upon
exercise of
outstanding
options,
warrants
and rights
|
Weighted-
average
exercise
price of
outstanding
options,
warrants
and rights
|
Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
(excluding
securities
reflected in
column (A))
|
|||||||||
Equity compensation plans approved by security holders
|
13,974,052 | $ | 1.14 | 4,738,496 | (1) | |||||||
Equity compensation plans not approved by security holders
|
- | - | - | |||||||||
Total
|
13,974,052 | $ | 1.14 | 4,738,496 | (1) |
(1)
|
Pursuant to our Second Amended and Restated 2007 Equity Incentive Plan, we are authorized to issue shares under this plan that total no more than 20% of our shares of common stock issued and outstanding, as determined on a fully diluted basis.
|
Marcum, LLP
|
2014
|
2013
|
||||||
Audit Fees (1)
|
$ | 229,000 | $ | 138,000 | ||||
Audit-Related Fees (2)
|
$ | 5,000 | $ | — | ||||
Tax Fees (3)
|
$ | — | $ | — | ||||
All Other Fees
|
$ | — | $ | — | ||||
McGladrey, LLP
|
2014 | 2013 | ||||||
Audit Fees
|
$ | — | $ | 38,000 | ||||
Audit-Related Fees
|
$ | 13,000 | $ | 106,000 | ||||
Tax Fees
|
$ | 36,000 | $ | 37,000 | ||||
All Other Fees
|
$ | — | $ | — |
(1)
|
Audit fees consist of fees for the audit of the Company’s financial statements and review of financial statements included in the Company’s quarterly reports. The 2014 amount includes an estimated amount from the engagement letter of the Company’s current auditors and not the final billed amount associated with the audit of the Company’s financial statements.
|
(2)
|
Audit-related fees include costs incurred for reviews of registration statements and consultations on various accounting matters in support of the Company’s financial statements.
|
(3)
|
Tax fees consist of fees for tax compliance matters.
|
CHROMADEX CORPORATION
|
|||
By:
|
/s/ FRANK L. JAKSCH JR.
|
||
Frank L. Jaksch Jr.
|
|||
Chief Executive Officer
|
|||
Signature
|
Title
|
Date
|
||
/s/ FRANK L. JAKSCH JR.
|
Chief Executive Officer and Director
|
March 19, 2015
|
||
Frank L. Jaksch Jr.
|
(Principal Executive Officer)
|
|||
/s/ THOMAS C. VARVARO
|
Chief Financial Officer and Secretary
|
March 19, 2015
|
||
Thomas C. Varvaro
|
(Principal Financial and Accounting Officer)
|
|||
/s/ STEPHEN ALLEN
|
Chairman of the Board and Director
|
March 19, 2015
|
||
Stephen Allen
|
||||
/s/ STEPHEN BLOCK
|
Director
|
March 19, 2015
|
||
Stephen Block
|
||||
/s/ REID DABNEY
|
Director
|
March 19, 2015
|
||
Reid Dabney
|
||||
/s/ GLENN L. HALPRYN
|
Director
|
March 19, 2015
|
||
Glenn L. Halpryn
|
||||
/s/ HUGH DUNKERLEY
|
Director
|
March 19, 2015
|
||
Hugh Dunkerley
|
||||
/s/ MARK S. GERMAIN
|
Director
|
March 19, 2015
|
||
Mark S. Germain
|
Exhibit No.
|
Description
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of May 21, 2008, among Cody, CDI Acquisition, Inc. and ChromaDex, Inc. as amended on June 10, 2008 (incorporated by reference from, and filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)
|
3.1
|
Amended and Restated Certificate of Incorporation of ChromaDex Corporation, a Delaware corporation (incorporated by reference from, and filed as Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A filed with the Commission on May 4, 2010)
|
|
3.2
|
Bylaws of ChromaDex Corporation, a Delaware corporation (incorporated by reference from, and filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)
|
|
4.1
|
Form of Stock Certificate representing shares of ChromaDex Corporation Common Stock (incorporated by reference from, and filed as Exhibit 4.1 of the Company’s Annual Report on Form 10-K filed with the Commission on April 3, 2009)
|
|
4.2
|
Investor’s Rights Agreement, effective as of December 31, 2005, by and between The University of Mississippi Research Foundation and ChromaDex (incorporated by reference from, and filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)
|
|
4.3
|
Tag-Along Agreement effective as of December 31, 2005, by and among the Company, Frank Louis Jaksch, Snr. & Maria Jaksch, Trustees of the Jaksch Family Trust, Margery Germain, Lauren Germain, Emily Germain, Lucie Germain, Frank Louis Jaksch, Jr., and the University of Mississippi Research Foundation (incorporated by reference from, and filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)
|
|
10.1
|
|
ChromaDex, Inc. 2000 Non-Qualified Incentive Stock Option Plan effective October 1, 2000 (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)(1)+
|
10.2
|
|
Second Amended and Restated 2007 Equity Incentive Plan effective March 13, 2007, as amended May 20, 2010 (incorporated by reference from, and filed as Appendix B to the Company’s Current Definitive Proxy Statement on Schedule 14A filed with the Commission on May 4, 2010)(1)+
|
10.3
|
|
Form of Stock Option Agreement under the ChromaDex, Inc. Second Amended and Restated 2007 Equity Incentive Plan (incorporated by reference from, and filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)(1)+
|
10.4
|
|
Form of Restricted Stock Purchase Agreement under the ChromaDex, Inc. 2007 Equity Incentive Plan (incorporated by reference from, and filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)(1)+
|
10.5
|
|
Amended and Restated Employment Agreement dated April 19, 2010, by and between Frank L. Jaksch, Jr. and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 22, 2010)(1)+
|
10.6
|
Amended and Restated Employment Agreement dated April 19, 2010, by and between Thomas C. Varvaro and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on April 22, 2010)(1)+
|
|
10.7
|
Form of Indemnification Agreement entered into between the Company and existing directors and officers on October 27, 2010 (incorporated by reference from and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on November 1, 2010)+
|
|
10.8
|
Standard Industrial/Commercial Multi-Tenant Lease – Net dated December 19, 2006, by and between ChromaDex, Inc. and SCIF Portfolio II, LLC (incorporated by reference from, and filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)
|
|
10.9
|
First Amendment to Standard Industrial/Commercial Multi-Tenant Lease, made as of July 18, 2008, between SCIF Portfolio II, LLC (“Lessor”) and ChromaDex, Inc. (“Lessee”) (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 23, 2008)
|
10.10
|
Second Amendment to Standard Industrial/Commercial Multi-Tenant Lease, made as of May 7, 2013, between SCIF Portfolio II, LLC (“Lessor”) and ChromaDex, Inc. (“Lessee”) (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on May 7, 2013)
|
|
10.11
|
|
Lease Agreement dated October 26, 2001, by and between Railhead Partners, LLC and NaPro BioTherapeutics, Inc., as assigned to Chromadex Analytics, Inc. on April 9, 2003 and amended on September 24, 2003 (incorporated by reference from, and filed as Exhibit 10.8 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)
|
10.12
|
First Amendment to Standard Industrial/Commercial Multi-Tenant Lease, made as of July 18, 2008, between SCIF Portfolio II, LLC (“Lessor”) and ChromaDex, Inc. (“Lessee”) (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 23, 2008)
|
|
10.13
|
Second Addendum to Lease Agreement, made as of April 27, 2009, by and between Railhead Partners, LLC and Chromadex Analytics, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 28, 2009)
|
|
10.14
|
Licensing Agreement Nutraceutical Standards effective as of December 31, 1999 between the University of Mississippi Research Foundation and ChromaDex (incorporated by reference from, and filed as Exhibit 10.9 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)
|
|
10.15
|
Equity Based License Agreement dated October 25, 2001, by and between the Company and Bayer Innovation, as amended as of October 30, 2003 (incorporated by reference from, and filed as Exhibit 10.10 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)
|
|
10.16
|
Stock Redemption Agreement, dated June 18, 2008 between ChromaDex, Inc. and Bayer Innovation GmbH (formerly named Bayer Innovation Beteiligungsgesellschaft mbH) (incorporated by reference from, and filed as Exhibit 10.13 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)
|
|
10.17
|
Technology License Agreement dated June 30, 2008 between The Research Foundation of the State University of New York and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 12, 2008)*
|
|
10.18
|
License Agreement, dated March 25, 2010 between the University of Mississippi and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 18, 2010)*
|
|
10.19
|
First Amendment to License Agreement, made as of June 3, 2011 between the University of Mississippi and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 11, 2011)*
|
|
10.20
|
License Agreement, dated July 5, 2011 between ChromaDex, Inc. and Cornell University (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 10, 2011)*
|
|
10.21
|
Exclusive License Agreement, dated September 8, 2011 between the Regents of the University of California and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 10, 2011)*
|
|
10.22
|
Exclusive License Agreement, dated July 13, 2012 between Dartmouth College and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 8, 2012)*
|
|
10.23
|
Exclusive License Agreement, dated March 7, 2013 between Washington University and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 10, 2013)*
|
|
10.24
|
Asset Purchase and Sale Agreement, dated as of March 28, 2013, by and between ChromaDex Corporation and NeutriSci International, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 29, 2013)
|
|
10.25
|
Senior Secured Convertible Promissory Note, dated as of March 28, 2013, by NeutriSci International, Inc. (incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission on March 29, 2013)
|
10.26
|
Security Agreement, dated as of March 28, 2013, by and between ChromaDex Corporation and NeutriSci International, Inc. (incorporated by reference from, and filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on March 29, 2013)
|
|
10.27
|
Subsidiary Guaranty, dated as of March 28, 2013, executed by Britlor Health and Wellness, Inc. (incorporated by reference from, and filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Commission on March 29, 2013)
|
|
10.28
|
Royalty Agreement, dated as of March 28, 2013, by and between ChromaDex Corporation and NeutriSci International, Inc. (incorporated by reference from, and filed as Exhibit 10.5 to the Company’s Current Report on Form 8-K filed with the Commission on March 29, 2013)
|
|
10.29
|
Sales Confirmation and Contract, dated as of March 28, 2013, by and Between ChromaDex Corporation and NeutriSci International, Inc. (incorporated by reference from, and filed as Exhibit 10.6 to the Company’s Current Report on Form 8-K filed with the Commission on March 29, 2013)
|
|
10.30
|
Niagen Supply Agreement, dated July 9, 2013, by and between ChromaDex, Inc. and Thorne Research, Inc. (incorporated by reference from, and filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 12, 2013)
|
|
10.31
|
License Agreement, made as of August 1, 2013, between Green Molecular S.L., Inc. and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 21, 2013)*
|
|
10.32
|
Form of Subscription Agreement, dated October 17, 2013, between ChromaDex Corporation and the subscribers (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on October 18, 2013)
|
|
10.33
|
Assignment and Escrow Agreement by and among ChromaDex Corporation, Alpha Capital Anstalt, NeutriSci International Inc., Britlor Health and Wellness, Inc. and Grushko & Mittman, P.C. effective as of December 27, 2013 (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on January 3, 2014)
|
|
10.34
|
Niagen Supply Agreement by and between ChromaDex Inc. and 5Linx Enterprises, Inc. effective as of January 3, 2014 (incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 8, 2014)*
|
|
10.35
|
Purenergy Supply Agreement by and between ChromaDex Inc. and 5Linx Enterprises, Inc. effective as of January 3, 2014 (incorporated by reference from, and filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 8, 2014)*
|
|
10.36
|
Employment Agreement by and between ChromaDex Corp. and Troy Rhonemus dated March 6, 2014 (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 10, 2014)+
|
|
10.37
|
Exclusive License Agreement, effective as of May 16, 2014 between Dartmouth College and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 12, 2014)*
|
|
10.38
|
First Amendment to the License Agreement, effective as of September 5, 2014 between the Regents of the University of California and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 6, 2014)*
|
|
10.39
|
Loan and Security Agreement by and between ChromaDex Corporation and Hercules Technology II, L.P., as Lender and Hercules Technology Growth Capital, Inc., as agent dated September 29, 2014
v
|
|
10.40
|
License Agreement, effective as of October 15, 2014 between University of Mississippi and ChromaDex, Inc.
v
**
|
|
10.41
|
Transfer and Notice of Conversion by ChromaDex Corporation, Alpha Capital Anstalt and Palladium Capital Advisors, LLC, and by NeutriSci International Inc. and Disani Capital Corp. executed on November 26, 2014
v
|
|
10.42
|
Share Transfer Agreement by and between ChromaDex Corporation and Emprise Capital Corporation dated November 25, 2014
v
|
16.1
|
Letter from McGladrey LLP, Independent Registered Public Accounting Firm, dated December 17, 2013 re change in certifying accountant (incorporated by reference from, and filed as Exhibit 16.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 17, 2013)
|
|
21.1
|
Subsidiaries of ChromaDex (incorporated by reference from, and filed as Exhibit 21.1 to the Company’s Annual Report on Form 10-K filed with the Commission on March 29, 2013)
|
|
23.1
|
Consent of Marcum, LLP, Independent Registered Public Accounting Firm
v
|
|
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
v
|
|
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
v
|
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
v
|
v
|
Filed herewith.
|
(1)
|
Plan and related Forms were assumed by ChromaDex Corporation pursuant to Agreement and Plan of Merger, dated as of May 21, 2008, among ChromaDex Corporation (formerly Cody Resources, Inc.), CDI Acquisition, Inc. and ChromaDex, Inc.
|
*
|
This Exhibit has been granted confidential treatment and has been filed separately with the Commission. The confidential portions of this Exhibit have been omitted and are marked by an asterisk.
|
**
|
A redacted version of this Exhibit is filed herewith. An un-redacted version of this Exhibit has been separately filed with the Commission pursuant to an application for confidential treatment. The confidential portions of the Exhibit have been omitted and are marked by an asterisk.
|
|
Borrower shall not (without the consent of Agent, such consent not to be unreasonably withheld or delayed), make any change in its (a) accounting policies or reporting practices, except as required by GAAP or (b) fiscal years or fiscal quarters. The fiscal year of Borrower shall end on the last Saturday of the calendar year.
|
|
The executed Compliance Certificate may be sent via facsimile to Agent at (650) 473-9194 or via e-mail to cnorman@herculestech.com. All Financial Statements required to be delivered pursuant to clauses (a), (b) and (c) shall be sent via e-mail to
financialstatements@herculestech.com
with a copy to cnornman@herculestech.com provided, that if e-mail is not available or sending such Financial Statements via e-mail is not possible, they shall be sent via facsimile to Agent at: (866) 468-8916, attention Chief Credit Officer.
|
|
First, to Agent and Lender in an amount sufficient to pay in full Agent’s and Lender’s costs and professionals’ and advisors’ reasonable fees and expenses as described in Section 11.11;
|
|
Second, to Lender in an amount equal to the then unpaid amount of the Secured Obligations (including principal, interest, and the Default Rate interest), in such order and priority as Agent may choose in its sole discretion; and
|
|
Finally, after the full, final, and indefeasible payment in Cash of all of the Secured Obligations, to any creditor holding a junior Lien on the Collateral, or to Borrower or its representatives or as a court of competent jurisdiction may direct.
|
|
Agent shall be deemed to have acted reasonably in the custody, preservation and disposition of any of the Collateral if it complies with the obligations of a secured party under the UCC.
|
(i)
|
be subject to any fiduciary or other implied duties, regardless of whether any default or any Event of Default has occurred and is continuing;
|
(ii)
|
have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Agent is required to exercise as directed in writing by the Lender, provided that the Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Agent to liability or that is contrary to any Loan Document or applicable law; and
|
(iii)
|
except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and the Agent shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by any Person serving as the Agent or any of its Affiliates in any capacity.
|
BORROWER:
|
|
CHROMADEX CORPORATION
Signature:
/s/ Thomas C. Varvaro
Print Name:
Thomas C. Varvaro
Title:
CFO
|
CHROMADEX, INC.
Signature:
/s/ Thomas C. Varvaro
Print Name:
Thomas C. Varvaro
Title:
CFO
|
CHROMADEX ANALYTICS, INC.
Signature:
/s/ Thomas C. Varvaro
Print Name:
Thomas C. Varvaro
Title:
CFO
|
SPHERIX CONSULTING, INC.
Signature:
/
s/ Thomas C. Varvaro
Print Name:
Thomas C. Varvaro
Title:
CFO
|
AGENT:
HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
By:
/s/ Ben Bang
Ben Bang, Associate General Counsel
|
LENDER:
HERCULES TECHNOLOGY II, L.P.
,
a Delaware limited partnership
By: Hercules Technology SBIC Management, LLC, its General Partner
By: Hercules Technology Growth Capital, Inc., its Manager
By:
/s/ Ben Bang
Ben Bang, Associate General Counsel
|
Addendum 1:
|
SBA Provisions
|
Exhibit A:
|
Advance Request
|
|
Attachment to Advance Request
|
Exhibit B:
|
Term Note
|
Exhibit C:
|
Name, Locations, and Other Information for Borrower
|
Exhibit D:
|
Borrower’s Patents, Trademarks, Copyrights and Licenses
|
Exhibit E:
|
Borrower’s Deposit Accounts and Investment Accounts
|
Exhibit F:
|
Compliance Certificate
|
Exhibit G:
|
Joinder Agreement
|
Exhibit H:
|
ACH Debit Authorization Agreement
|
Exhibit I-1:
|
Borrower Conversion Election Notice
|
Exhibit I-2:
|
Lender Conversion Election Notice
|
Exhibit J:
|
Warrant Agreement
|
Schedule 1
|
Subsidiaries
|
Schedule 1.1
|
Commitments
|
Schedule 1A
|
Existing Permitted Indebtedness
|
Schedule 1B
|
Existing Permitted Investments
|
Schedule 1C
|
Existing Permitted Liens
|
Schedule 5.5
|
Actions Before Governmental Authorities
|
Schedule 5.10
|
Intellectual Property
|
Schedule 5.14
|
Capitalization
|
Schedule 7.16
|
Post-Closing Items
|
1.
|
Size Status. Borrower does not have tangible net worth in excess of $18 million or average net income after Federal income taxes (excluding any carry-over losses) for the preceding two completed fiscal years in excess of $6 million;
|
2.
|
No Relender. Borrower’s primary business activity does not involve, directly or indirectly, providing funds to others, purchasing debt obligations, factoring, or long-term leasing of equipment with no provision for maintenance or repair;
|
3.
|
No Passive Business. Borrower is engaged in a regular and continuous business operation (excluding the mere receipt of payments such as dividends, rents, lease payments, or royalties). Borrower’s employees are carrying on the majority of day to day operations. Borrower will not pass through substantially all of the proceeds of the Loan to another entity;
|
4.
|
No Real Estate Business. Borrower is not classified under Major Group 65 (Real Estate) or Industry No. 1531 (Operative Builders) of the SIC Manual. The proceeds of the Loan will not be used to acquire or refinance real property unless Borrower (x) is acquiring an existing property and will use at least 51 percent of the usable square footage for its business purposes; (y) is building or renovating a building and will use at least 67 percent of the usable square footage for its business purposes; or (z) occupies the subject property and uses at least 67 percent of the usable square footage for its business purposes.
|
5.
|
No Project Finance. Borrower’s assets are not intended to be reduced or consumed, generally without replacement, as the life of its business progresses, and the nature of Borrower’s business does not require that a stream of cash payments be made to the business's financing sources, on a basis associated with the continuing sale of assets (e.g., real estate development projects and oil and gas wells). The primary purpose of the Loan is not to fund production of a single item or defined limited number of items, generally over a defined production period, where such production will constitute the majority of the activities of Borrower (e.g., motion pictures and electric generating plants).
|
6.
|
No Farm Land Purchases. Borrower will not use the proceeds of the Loan to acquire farm land which is or is intended to be used for agricultural or forestry purposes, such as the production of food, fiber, or wood, or is so taxed or zoned.
|
7.
|
No Foreign Investment. The proceeds of the Loan will not be used substantially for a foreign operation. At the time of the Loan, Borrower will not have more than 49 percent of its employees or tangible assets located outside the United States. The representation in this subsection (7) is made only as of the date hereof and shall not continue for one year as contemplated in the first sentence of this Section 1.
|
|
Name:
|
ChromaDex Corporation
|
|
Type of organization:
|
Corporation
|
|
State of organization:
|
Delaware
|
|
Organization file number:
|
$[ ],000,000
|
Advance Date: ___ __, 20[ ]
|
Maturity Date: _____ ___, 20[ ]
|
Name:
|
ChromaDex Corporation
|
Type of organization:
|
Corporation
|
State of organization:
|
Delaware
|
|
Organization file number:
|
PATENT APP. NUMBER
|
PATENT NUMBER
|
TITLE OF PATENT
|
ISSUE DATE
|
APP DATE
|
ASSIGNEE
|
US
61/535143
|
PTEROSTILBENE AND STATIN COMBINATION FOR TREATMENT OF METABOLIC DISEASE, CARDIOVASCULAR DISEASE, AND INFLAMMATION
|
9/15/2011
|
CHROMADEX, INC.
|
||
US
PCT/US2013/039105
|
PTEROSTILBENE AND CURCUMIN COMBINATION FOR TREATMENT OF OXIDATIVE STRESS AND INFLAMMATION
|
5/1/2013
|
CHROMADEX, INC.
|
||
US
61/484977
|
METHOD FOR INDUCING UDP-GLUCURONOSYLTRANSFERASE ACTIVITY USING PTEROSTILBENE
|
5/11/2011
|
CO-INVENTOR WITH UNIVERSITY OF CALIFORNIA
|
||
US
6852342
|
COMPOUNDS FOR ALTERING FOOD INTAKE IN HUMANS
|
2/8/2005
|
CO-INVENTOR WITH AVOCA, INC.
|
Geography
|
Patent App #
|
Patent #
|
Title of Patent
|
Patent Issue Date
|
Patent Application Date
|
Assignee
|
US
|
8106184
|
Nicotinoyl riboside compositions and methods of use
|
1/31/2012
|
Cornell
|
||
US
|
8114626
|
Yeast strain and method for using the same to
produce nicotinamide riboside
|
2/14/2012
|
Dartmouth
|
||
US
|
8197807
|
Nicotinamide riboside kinase compositions and methods
for using the same
|
6/12/2012
|
Dartmouth
|
||
US
|
8383086
|
Nicotinamide riboside kinase compositions and methods
for using the same
|
2/26/2013
|
Dartmouth
|
||
US
|
7776326
|
Methods and compositions for treating neuropathies
|
8/17/2010
|
Washington University
|
||
US
|
11/542832
|
Yeast strain and method for using the same
to produce nicotinamide riboside
|
3/18/2010
|
Dartmouth
|
||
US
|
13/260392
|
Yeast strain and method for using the same
to produce nicotinamide riboside
|
3/18/2010
|
Dartmouth
|
||
US
|
20120164270 (A1)
|
Yeast strain and method for using the
same to produce nicotinamide riboside
|
6/28/2012
|
Dartmouth
|
||
PCT
|
US2010/027792
|
Yeast strain and method for using the
same to produce nicotinamide riboside
|
3/18/2010
|
Dartmouth
|
WO
|
2010111111 A1
|
Yeast strain and method for using the
same to produce nicotinamide riboside
|
3/18/2010
|
Dartmouth
|
||
US
|
60/886854
|
Methods and compositions for treating neuropathies
|
1/28/2008
|
Washington University
|
||
US
|
12/524718
|
Methods and compositions for treating neuropathies
|
1/28/2008
|
Washington University
|
||
US
|
20100047177 A1
|
Methods and compositions for treating neuropathies
|
2/25/2010
|
Washington University
|
||
PCT
|
2008/001085
|
Methods and compositions for treating neuropathies
|
1/28/2008
|
Washington University
|
||
WO
|
2008091710 A2
|
Methods and compositions for treating neuropathies
|
1/28/2008
|
Washington University
|
||
CA
|
2676609
|
Methods and compositions for treating neuropathies
|
1/28/2008
|
Washington University
|
||
MX
|
20090008022
|
Methods and compositions for treating neuropathies
|
Washington University
|
|||
US
|
2012172584 A1
|
Nicotinoyl riboside compositions and methods of use
|
1/17/2012
|
Cornell
|
||
IN
|
4525Delnp/2008
|
Nicotinoyl riboside compositions and methods of use
|
11/17/2006
|
Cornell
|
||
EP
|
1957086 A2
|
Nicotinoyl riboside compositions and methods of use
|
11/17/2006
|
Cornell
|
||
CN
|
101360421 A
|
Nicotinoyl riboside compositions and methods of use
|
11/17/2006
|
Cornell
|
||
AU
|
2006238858 A2
|
Nicotinamide riboside kinase compositions
and methods for using the same
|
3/14/2013
|
Dartmouth
|
||
CA
|
2609633
|
Nicotinamide riboside kinase compositions
and methods for using the same
|
4/20/2006
|
Dartmouth
|
||
US
|
60/577233
|
Methods and compositions for treating neuropathies
|
6/4/2004
|
Washington University
|
||
US
|
60/641330
|
Methods and compositions for treating neuropathies
|
1/4/2005
|
Washington University
|
||
PCT
|
2005/019524
|
Methods and compositions for treating neuropathies
|
6/3/2005
|
Washington University
|
||
WO
|
2006001982 A2
|
Methods and compositions for treating neuropathies
|
6/3/2005
|
Washington University
|
||
ZL
|
200580018114.8
|
Methods and compositions for treating neuropathies
|
Washington University
|
|||
CN
|
1964627
|
Methods and compositions for treating neuropathies
|
10/19/2011
|
Washington University
|
||
US
|
11/144358
|
Methods and compositions for treating neuropathies
|
6/3/2005
|
Washington University
|
||
US
|
12/790722
|
Methods and compositions for treating neuropathies
|
6/3/2005
|
Washington University
|
||
US
|
20100272702 A1
|
Methods and compositions for treating neuropathies
|
6/3/2005
|
Washington University
|
||
EP
|
20050790283
|
Methods and compositions for treating neuropathies
|
6/3/2005
|
Washington University
|
||
EP
|
1755391 A2
|
Methods and compositions for treating neuropathies
|
6/3/2005
|
Washington University
|
||
US
|
8133917
|
Pterostilbene as an agonist for the peroxisome
proliferator-activated receptor alpha isoform
|
3/13/2012
|
University of Mississippi and U.S. Depart of Agriculture
|
||
US
|
8252845
|
Pterostilbene as an agonist for the peroxisome
proliferator-activated receptor alpha isoform
|
2/26/2013
|
University of Mississippi and U.S. Depart of Agriculture
|
||
US
|
12/136341
|
Method to Ameliorate Oxidative Stress and Improve
Working Memory via Pterostilbene Administration
|
8/8/2011
|
University of Mississippi and U.S. Depart of Agriculture
|
US
|
13/105470
|
Anxiolytic Effects of Pterostilbene
|
5/11/2011
|
University of Mississippi and U.S. Depart of Agriculture
|
||
KOR
|
10-2012-7013257
|
Use of pterostilbene as medicament for prevention
and/or treatment of skin diseases, damages or
injuries or as cosmetic
|
2012
|
Green Molecular S.L
|
||
MX
|
2012/005013
|
Use of pterostilbene as medicament for prevention
and/or treatment of skin diseases, damages or
injuries or as cosmetic
|
2012
|
Green Molecular S.L.
|
||
RUS
|
2012122241
|
Use of pterostilbene as medicament for prevention
and/or treatment of skin diseases, damages or
injuries or as cosmetic
|
2012
|
Green Molecular S.L
|
||
US
|
13/504056
|
Use of pterostilbene as medicament for prevention
and/or treatment of skin diseases, damages or
injuries or as cosmetic
|
10/29/2010
|
Green Molecular S.L.
|
||
US
|
8227510
|
Combine use of pterostilbene and quercetin for
the production of cancer treatment medicaments
|
7/24/2012
|
Green Molecular S.L.
|
||
EU
|
5774387.4
|
Combine use of pterostilbene and quercetin for
the production of cancer treatment medicaments
|
3/18/2009
|
Green Molecular S.L.
|
||
EU
|
10775793.2
|
Use of pterostilbene as medicament for prevention
and/or treatment of skin diseases, damages or
injuries or as cosmetic
|
7/24/2013
|
Green Molecular S.L.
|
||
CA
|
2778151
|
Use of pterostilbene as medicament for prevention
and/or treatment of skin diseases, damages or
injuries or as cosmeting
|
10/29/2010
|
Green Molecular S.L.
|
||
CHN
|
201080048865.5
|
Use of pterostilbene as medicament for prevention
and/or treatment of skin diseases, damages or
injuries or as cosmetic
|
Green Molecular S.L.
|
|||
ISRL
|
219318
|
Use of pterostilbene as medicament for prevention
and/or treatment of skin diseases, damages or
injuries or as cosmetic
|
Green Molecular S.L.
|
|||
JPN
|
2012-535862
|
Use of pterostilbene as medicament for prevention
and/or treatment of skin diseases, damages or
injuries or as cosmetic
|
2012
|
Green Molecular S.L.
|
||
US
|
61/484977
|
Method for Inducing UDP-lucuronosyltrasferase
Activity Using Pterostilbene
|
5/11/2011
|
UC Regents
|
||
US
|
13/466,827
|
Method for Inducing UDP-lucuronosyltrasferase
Activity Using Pterostilbene
|
5/8/2012
|
UC Regents
|
||
PCT
|
US2012/064993
|
Method for Inducing UDP-lucuronosyltrasferase
Activity Using Pterostilbene
|
11/14/2012
|
UC Regents
|
||
US
|
62/046,065
|
Prevention of UV-induced hyperplasia and
DNA damage in skin by Pterostilbene
|
9/4/2014
|
UC Regents
|
||
US
|
62/046,068
|
Prevention of UV-induced loss of barrier
function in skin by Pterostilbene
|
9/4/2014
|
UC Regents
|
||
US
|
61/249188
|
Use of Polyphenols in the Treatment of Cancer
|
10/6/2009
|
Green Molecular S.L.
|
||
US
|
7338791
|
Production of Flavonoids by Recombinant
Microorganisms
|
3/4/2008
|
State Univ of New York
|
Institution Name and Address
|
Account Number
|
Average Balance in Account
|
Name of Account Owner
|
Wells Fargo N.A.
|
|
$900,000
|
ChromaDex, Inc.
|
Wells Fargo N.A.
|
|
$0 (Zero Balance Account)
|
ChromaDex Analytics, Inc.
|
Wells Fargo N.A.
|
|
$150,000
|
Spherix Consulting, Inc.
|
REPORTING REQUIREMENT
|
REQUIRED
|
CHECK IF ATTACHED
|
Interim Financial Statements
|
Monthly within 30 days
|
|
Interim Financial Statements
|
Quarterly within 45 days
|
|
Audited Financial Statements
|
FYE within 150 days
|
|
CHROMADEX CORPORATION
|
By: |
____________________________
|
|
Name: | _____________________________ | |
Its: |
____________________________
|
1.
|
The recitals set forth above are incorporated into and made part of this Joinder Agreement. Capitalized terms not defined herein shall have the meaning provided in the Loan Agreement.
|
2.
|
By signing this Joinder Agreement, Subsidiary shall be bound by the terms and conditions of the Loan Agreement the same as if it were the Borrower (as defined in the Loan Agreement) under the Loan Agreement, mutatis mutandis, provided however, that (a) with respect to (i) Section 5.1 of the Loan Agreement, Subsidiary represents that it is an entity duly organized, legally existing and in good standing under the laws of [ ], (b) neither Agent nor Lender shall have any duties, responsibilities or obligations to Subsidiary arising under or related to the Loan Agreement or the other agreements executed and delivered in connection therewith, (c) that if Subsidiary is covered by Company’s insurance, Subsidiary shall not be required to maintain separate insurance or comply with the provisions of Sections 6.1 and 6.2 of the Loan Agreement, and (d) that as long as Company satisfies the requirements of Section 7.1 of the Loan Agreement, Subsidiary shall not have to provide Agent separate Financial Statements. To the extent that Agent or Lender has any duties, responsibilities or obligations arising under or related to the Loan Agreement or the other agreements executed and delivered in connection therewith, those duties, responsibilities or obligations shall flow only to Company and not to Subsidiary or any other Person or entity. By way of example (and not an exclusive list): (i) Agent’s providing notice to Company in accordance with the Loan Agreement or as otherwise agreed among Company, Agent and Lender shall be deemed provided to Subsidiary; (ii) a Lender’s providing an Advance to Company shall be deemed an Advance to Subsidiary; and (iii) Subsidiary shall have no right to request an Advance or make any other demand on Lender.
|
3.
|
Subsidiary agrees not to certificate its equity securities without Agent’s prior written consent, which consent may be conditioned on the delivery of such equity securities to Agent in order to perfect Agent’s security interest in such equity securities.
|
4.
|
Subsidiary acknowledges that it benefits, both directly and indirectly, from the Loan Agreement, and hereby waives, for itself and on behalf on any and all successors in interest (including without limitation any assignee for the benefit of creditors, receiver, bankruptcy trustee or itself as debtor-in-possession under any bankruptcy proceeding) to the fullest extent provided by law, any and all claims, rights or defenses to the enforcement of this Joinder Agreement on the basis that (a) it failed to receive adequate consideration for the execution and delivery of this Joinder Agreement or (b) its obligations under this Joinder Agreement are avoidable as a fraudulent conveyance.
|
|
SUBSIDIARY:
|
|
_________________________________.
|
|
By:
|
|
Name:
|
|
Title:
|
|
Address:
|
|
Telephone: ___________
|
|
Facsimile: ____________
|
|
AGENT:
|
|
HERCULES TECHNOLOGY GROWTH CAPITAL, INC.
|
|
By:____________________________________
|
|
Name:__________________________________
|
|
Title: ___________________________________
|
|
Address:
|
|
400 Hamilton Ave., Suite 310
|
|
Palo Alto, CA 94301
|
|
Facsimile: 650-473-9194
|
|
Telephone: 650-289-3060
|
DEPOSITORY NAME
|
BRANCH
|
CITY
|
STATE AND ZIP CODE
|
TRANSIT/ABA NUMBER
|
ACCOUNT NUMBER
|
|
By:
|
____________________________
|
|
Name:
|
____________________________
|
|
Its:
|
____________________________
|
|
ChromaDex Corporation
|
|
10005 Muirlands Blvd., Suite G
|
|
Irvine, CA 92618
|
|
Attention: Frank Jaksch, Chief Executive Officer
|
LENDER AND AGENT:
|
||
HERCULES TECHNOLOGY GROWTH CAPITAL, INC., as Agent
|
HERCULES TECHNOLOGY II, L.P.,
as a Lender
|
|
By:Hercules Technology SBIC Management, LLC, its General Partner
|
||
By:
|
By:Hercules Technology Growth Capital, Inc., its Manager
|
|
Name:
|
||
Title:
|
By:
|
|
Name:
|
||
Title:
|
Where:
|
X =
|
the number of shares of Common Stock to be issued to the Warrantholder.
|
|
Y =
|
the number of shares Common Stock requested to be exercised under this Agreement.
|
|
A =
|
the fair market value of one (1) share of Common Stock at the time of issuance of such shares of Common Stock.
|
|
B =
|
the Exercise Price.
|
By:
|
(1)
|
The undersigned Warrantholder hereby elects to purchase [_______] shares of the Common Stock of ChromaDex Corporation, pursuant to the terms of the Agreement dated the 29th day of September, 2014 (the “Agreement”) between ChromaDex Corporation and the Warrantholder, and [CASH PAYMENT: tenders herewith payment of the Purchase Price in full, together with all applicable transfer taxes, if any.] [NET ISSUANCE: elects pursuant to Section 3(a) of the Agreement to effect a Net Issuance.]
|
(2)
|
Please issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name as is specified below.
|
WARRANT HOLDER:
|
HERCULES TECHNOLOGY II, L.P.,
|
By: | ||
Title: | ||
Name: |
COMPANY | CHROMADEX CORPORATION | |
By: | ||
Title: | ||
Date: |
LENDER
|
TERM COMMITMENT
|
HERCULES TECHNOLOGY II, L.P.
|
$5,000,000
|
TOTAL COMMITMENTS
|
$5,000,000
|
|
SCHEDULE 1A
|
|
PERMITTED INDEBTEDNESS
|
Debt Provider
|
Start Date
|
End Date
|
Estimated Payments Remaining
(Including Interest)*
|
Equipment Leased with Lien
|
GE Capital Solutions
|
Mar, 2010
|
Feb, 2015
|
$29,184
|
Laboratory Equipment
|
Quantum Analytics
|
Nov, 2011
|
Oct, 2016
|
$19,685
|
Laboratory Equipment
|
CIT Financial Services
|
Jan, 2012
|
Dec, 2016
|
$28,366
|
Phone System
|
Thermo Fisher Finance
|
Dec, 2012
|
Nov, 2017
|
$14,008
|
Laboratory Equipment
|
US Bank
|
Jan, 2013
|
Dec, 2017
|
$65,392
|
Laboratory Equipment
|
US Bank
|
July, 2013
|
June, 2018
|
$51,438
|
Laboratory Equipment
|
Susquehanna Commercial
|
Oct, 2013
|
Sep, 2018
|
$51,624
|
Laboratory Equipment
|
M2 Lease Fund
|
Oct, 2013
|
Sep, 2018
|
$76,419
|
Laboratory Equipment
|
Quantum Analytics
|
Apr, 2014
|
Mar, 2019
|
$244,294
|
Laboratory Equipment
|
Quantum Analytics
|
Sep, 2014
|
Aug, 2019
|
$121,867
|
Laboratory Equipment
|
·
|
Bruker FTNIR Lab Equipment loaned to our customer “Beehive Botanicals” located at 16297 W. Nursery Road, Hayward, WI 54843.
|
·
|
Bruker FTNIR Lab Equipment loaned to our customer “Soft Gel Technologies, Inc.” located at 6982 Bandini Blvd., Los Angeles, CA 90040.
|
Lease Provider
(Lien Holder)
|
Start Date
|
End Date
|
Estimated Payments Remaining
(Including Interest)*
|
Equipment Leased with Lien
|
GE Capital Solutions
|
Mar, 2010
|
Feb, 2015
|
$29,184
|
Laboratory Equipment
|
Quantum Analytics
|
Nov, 2011
|
Oct, 2016
|
$19,685
|
Laboratory Equipment
|
CIT Financial Services
|
Jan, 2012
|
Dec, 2016
|
$28,366
|
Phone System
|
Thermo Fisher Finance
|
Dec, 2012
|
Nov, 2017
|
$14,008
|
Laboratory Equipment
|
US Bank
|
Jan, 2013
|
Dec, 2017
|
$65,392
|
Laboratory Equipment
|
US Bank
|
July, 2013
|
June, 2018
|
$51,438
|
Laboratory Equipment
|
Susquehanna Commercial
|
Oct, 2013
|
Sep, 2018
|
$51,624
|
Laboratory Equipment
|
M2 Lease Fund
|
Oct, 2013
|
Sep, 2018
|
$76,419
|
Laboratory Equipment
|
Quantum Analytics
|
Apr, 2014
|
Mar, 2019
|
$244,294
|
Laboratory Equipment
|
Quantum Analytics
|
Sep, 2014
|
Aug, 2019
|
$121,867
|
Laboratory Equipment
|
|
License Agreement between ChromaDex, Inc. and Green Molecular, SL,
|
ChromaDex Corporation
|
Authorized / Reserved
(Shares)
|
Issued and
Outstanding
(Shares)
|
Common Stock
|
150,000,000
|
105,239,985
|
Unvested Restricted Stock
|
-
|
1,674,000
|
Total Common Stock, Including Unvested Restricted Stock
|
150,000,000
|
106,913,985
|
Stock Options
|
18,626,802
|
14,022,830
|
1.1
|
Unless otherwise provided in this Agreement, the following terms when used with initial capital letters shall have the meanings set forth below:
|
2.1
|
Grant of License
. Subject to the terms and conditions contained in this Agreement, UM hereby grants to CHROMADEX an exclusive, non-transferrable except otherwise allowed in this Agreement, worldwide, royalty-bearing right and license to use and practice the Licensed Technology to make, have made, use, and sell Products in the Field. Notwithstanding the foregoing, UM expressly reserves a non-transferable royalty-free right to use the Licensed Technology in the Field itself, including use by its faculty, staff and researchers, for educational and research purposes only.
|
2.2
|
Right to Sub-license
. CHROMADEX shall not have the right to sub-license to any third party, in whole or in part, its rights under this Agreement without the written permission of UM, such permission to will not be unreasonably withheld. In the event CHROMADEX wishes to sub-license the Patent rights, UM and CHROMADEX will initiate good faith negotiations to determine equitable licensing terms and conditions. As a subsequent condition of granting sub-licenses, CHROMADEX will provide UM with full and complete copies of all contracts and agreements between it and any sub-licensee within ten (10) business days after execution of same. UM will maintain such copies and their terms in confidence as required in Article 8. A grant of a sub-license will be invalid if any agreement between CHROMADEX and such sub-licensee prohibits, restricts or conditions CHROMADEX’s provision of such copies to UM as required in this article.
|
2.3
|
No Rights by Implication
. No rights or licenses with respect to the Licensed Technology are granted or deemed granted hereunder or in connection herewith, other than those rights or licenses expressly granted in this Agreement.
|
3.1
|
Upfront Payments
. In consideration of the license granted hereunder, CHROMADEX shall pay UM the following non-refundable payments:
|
(a)
|
[*] dollars ($[*]) within fifteen (15) days of the Effective Date of this Agreement, and
|
(b)
|
[*] dollars ($[*]) within one hundred and eighty (180) days of the Effective Date of this Agreement.
|
3.2
|
Royalties
. In further consideration of the rights and licenses granted hereunder, CHROMADEX shall pay UM a royalty of [*] percent ([*]%) of Net Sales of all Products. CHROMADEX agrees to pay UM at least the following minimum royalties during the term of this Agreement:
|
3.3
|
Payments
. Royalties and other amounts payable under this Agreement shall be paid within thirty (30) days following the last day of the Calendar Quarter in which royalties and other amounts accrue. The last such payment shall be made within thirty (30) days after termination of this Agreement. Payments shall be deemed paid as of the day on which they are received by UM.
|
3.4
|
Reimbursement of Patent Expenses
. CHROMADEX will reimburse UM’s Sunk Patent Expenses totaling $[*] within fifteen (15) days of the Effective Date. CHROMADEX will reimburse UM’s Patent Expenses incurred after the Effective Date within thirty (30) days of receipt of an invoice from UM detailing the Patent Expenses incurred by UM.
|
3.5
|
Reports
. CHROMADEX shall deliver to UM within thirty (30) days after the end of each Calendar Quarter following commercial sale of a Product a report setting forth in reasonable detail the calculation of the royalties and other amounts payable to UM for such Calendar Quarter pursuant to this Article 3, including, without limitation, the Products sold in each country during such Calendar Quarter, the Net Sales thereof, and, within sixty (60) days after the end of each Calendar Quarter, and similar reports containing corresponding information relating to royalties payable due to sales by permitted sub-licensees pursuant to Article 2.2. An example of an acceptable royalty report is provided in Appendix C.
|
3.6
|
Currency, Place of Payment, Interest
.
|
(a)
|
All dollar amounts referred to in this Agreement are expressed in United States dollars. All payments to UM under this Agreement shall be made in United States dollars (or other legal currency of the United States), as directed by UM, by check payable to the University of Mississippi” or by wire transfer to an account as UM may designate from time to time.
|
(b)
|
If CHROMADEX receives revenues from sales of Products in a currency other than United States dollars, royalties shall be converted into United States dollars at the applicable conversion rate for the foreign currency as published in the “Exchange Rates” table in the eastern edition of
The Wall Street Journal
as of the last date of the Calendar Quarter.
|
(c)
|
Amounts that are not paid when due shall accrue interest-from the due date until paid, at an annual rate equal to the “Prime Rate” plus 5% as published in the “Money Rates” table in the eastern edition of
The Wall Street Journal
as of the due date.
|
3.7
|
Records
. CHROMADEX will maintain complete and accurate books and records that enable the royalties payable hereunder to be verified. The records for each Calendar Quarter shall be maintained for two years after the submission of each report under Article 3.7 hereof. Upon reasonable prior notice to CHROMADEX, UM and its accountants shall have access to the books and records of CHROMADEX to conduct a review or audit thereof no more than two (2) times per years. Such access shall be available during normal business hours. In the event such audit reveals any error in the computation of Net Sales exceeding 5% of the amount owed, the CHROMADEX shall promptly reimburse UM for all reasonable expenses and costs incurred in the conduct of such review or audit.
|
4.1
|
CHROMADEX Efforts
. CHROMADEX shall use its reasonable efforts to develop for commercial use and to market Products as soon as practicable, and to continue to market Products as long as commercially viable, all as is consistent with sound and reasonable business practice.
|
4.2
|
Compliance with Laws
. CHROMADEX shall use its best efforts to comply with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing and import or export of Products. Without limiting the foregoing, CHROMADEX acknowledges that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations, among other things, prohibit or require a license for the export of certain types of technical data to specified countries. CHROMADEX will comply with all United States laws and regulations controlling the export of commodities and technical data.
|
4.3
|
Government Approvals
. CHROMADEX will be responsible for obtaining, at its cost and expense, all governmental approvals required to commercially market Products.
|
4.4
|
Patent Notices.
CHROMADEX shall mark or cause to be marked all Products made or sold in the United States with all applicable patent numbers. If it is not practical for a Product to be so marked, then CHROMADEX shall mark or cause to be marked the package for each Product with all applicable patent numbers.
|
|
4.5
Bankruptcy or Equivalent
. CHROMADEX will provide written notice to UM prior to the filing of a petition in bankruptcy or equivalent if CHROMADEX intends to file a voluntary petition, or, if known by CHROMADEX through statements or letters from a creditor or otherwise, if a third party intends to file an involuntary petition in bankruptcy against CHROMADEX. Notice will be given at least 75 days before the planned filing or, if such notice is not feasible, as soon as CHROMADEX is aware of the planned filing. CHROMADEX's failure to perform this obligation is deemed to be a material pre-petition incurable breach under this Agreement not subject to the 60-day notice requirement of Section 9.2, and UM is deemed to have terminated this Agreement forty-five (45) days prior to the filing of the bankruptcy.
|
5.1
|
Representations of UM
. UM represents to CHROMADEX as follows:
|
(a)
|
this Agreement, when executed and delivered by UM, will be the legal, valid and binding obligation of UM, enforceable against UM in accordance with its terms;
|
|
(b)
|
UM terminated a previous license agreement that granted rights to the Licensed Technology. UM has not granted rights to the Licensed Technology to any person other than CHROMADEX since terminating the previous license agreement;
|
|
(c)
|
UM has not received any written notice that the Licensed Technology infringes the proprietary rights of any third party;
|
|
(d)
|
the inventions claimed in the Patents to the knowledge of UM have not been publicly used, offered for sale, or disclosed in a printed publication by employees of UM more than one year prior to the filing of the U.S. application for the Patents.
|
5.2
|
Representations and Warranties of CHROMADEX
. CHROMADEX represents and warrants to UM as follows:
|
|
(a)
|
CHROMADEX is a corporation duly organized, validly existing and in good standing under the laws of California and has all requisite corporate power and authority to execute, deliver and perform this Agreement;
|
|
(b)
|
This Agreement, when executed and delivered by CHROMADEX, will be the legal, valid and binding obligation of CHROMADEX, enforceable against CHROMADEX in accordance with its terms;
|
|
(c)
|
the execution, delivery and performance of this Agreement by CHROMADEX does not conflict with, or constitute a breach or default under,
|
(i)
|
the charter documents of CHROMADEX,
|
(ii)
|
any law, order, judgment or governmental rule or regulation applicable to CHROMADEX, or
|
(iii)
|
any provision of any agreement, contract, commitment or instrument to which CHROMADEX is a party; and the execution, delivery and performance of this Agreement by CHROMADEX does not require the consent, approval or authorization of, or notice, declaration, filing or registration with, any governmental or regulatory authority.
|
6.1
|
No warranties; Limitation on Liability
. EXCEPT AS EXPLICITLY SET FORTH IN THIS AGREEMENT, UM MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO: (I) COMMERCIAL UTILITY; OR (II) MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; OR (III) THAT THE USE OF THE LICENSED TECHNOLOGY WILL NOT INFRINGE ANY PATENT, COPYRIGHT OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY RIGHTS OF OTHERS. UM SHALL NOT BE LIABLE TO CHROMADEX, CHROMADEX’S SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO ANY CLAIM ON ACCOUNT OF, OR ARISING FROM, THE USE OF INFORMATION IN CONNECTION WITH THE LICENSED TECHNOLOGY SUPPLIED HEREUNDER OR THE MANUFACTURE, USE OR SALE OF PRODUCTS OR ANY OTHER MATERIAL OR ITEM DERIVED THEREFROM.
|
6.2
|
Liability
. UM is an agency of the State of Mississippi under the management and control of the Board of Trustees of the State Institutions of Higher Learning (IHL). As authorized by law, IHL maintains a program of self-insurance for purposes of workers’ compensation and general liability, pursuant to the Mississippi Tort Claims Act as set forth in Chapter 46, Title 11, Mississippi Code 1972, as amended. Accordingly, any liability of UM for any damages, losses, or costs arising out of or related to acts performed by UM or it employees under this Agreement is governed by the Tort Claims Act.
|
6.3
|
CHROMADEX Indemnification
. CHROMADEX will indemnify, defend and hold harmless UM, its trustees, officers, agents and employees (collectively, the “Indemnified Parties”), from and against any and all liability, loss, damage, action, claim or expense suffered or incurred by the Indemnified Parties which results from or arises out of (individually, a “Liability” and collectively, the “Liabilities”):
|
|
(a) breach by CHROMADEX of any duty, covenant or agreement contained in this Agreement or a lawsuit, action, or claim brought by any third party that includes any allegation which, if proven true, would constitute a breach by CHROMADEX of any duty, covenant or agreement contained in this Agreement.
|
|
(b)
the development, use, manufacture, promotion, sale, distribution or other disposition of any Products by CHROMADEX, its Affiliates, assignees, vendors or other third parties, for personal injury, including death, or property damage arising from any of the foregoing. The indemnification obligation under Article 6.3 shall not apply to any contributory negligence or product liability of the Indemnified Party which may have occurred prior to the execution of this Agreement. CHROMADEX will indemnify and hold harmless the Indemnified Parties from and against any Liabilities resulting from:
|
(i)
|
any product liability or other claim of any kind related to the use by a third party of a Product that was manufactured, sold, distributed or otherwise disposed by CHROMADEX, its Affiliates, assignees, vendors or other third parties;
|
(ii)
|
clinical trials or studies conducted by or on behalf of CHROMADEX relating to any Products, including, without limitation, any claim by or on behalf of a human subject of any such clinical trial or study, any claim arising from the procedures specified in any protocol used in any such clinical trial or study, any claim of deviation, authorized or unauthorized, from the protocols of any such clinical trial or study, any claim resulting from or arising out of the manufacture or quality control by a third party of any substance administered in any clinical trial or study;
|
(iii)
|
CHROMADEX’s failure to comply with all prevailing laws, rules and regulations pertaining to the development, testing, manufacture, marketing and import or export of Products.
|
6.4
|
Procedures
. The Indemnified Party shall promptly notify CHROMADEX of any claim or action giving rise to a Liability subject to the provisions of Article 6.3. CHROMADEX shall have the duty to defend any such claim or action, at its cost and expense. Indemnified Party must have the right, however, to approve counsel through the Mississippi Attorney General and through its governing board to represent it, and such approval will not be unreasonably withheld. In the event CHROMADEX or any of its parents, affiliates or subsidiaries is also named in a particular claim, CHROMADEX may choose the same attorneys who defend the Indemnified Parties to defend CHROMADEX unless there arises a conflict of interest between the CHROMADEX and one or more of the Indemnified Parties or among the Indemnified Parties. The indemnification rights of UM or other Indemnified Party contained herein are in addition to all other rights which such Indemnified Party may have at law or in equity or otherwise.
|
|
6.5
|
Product Liability Insurance
. Beginning with the commencement of human clinical trials of any Product and continuing for a period of time after CHROMADEX ceases manufacturing and marketing Products that is reasonable based upon industry standards, CHROMADEX and its Affiliates shall maintain general liability and product liability insurance that is reasonable based upon industry standards, but not less than $2 million per incident and $2 million in the aggregate. CHROMADEX and its AFFILIATES will procure and maintain policies of property damage insurance of $1 million per claim and $2 million in the aggregate. The insurance amounts specified herein shall not be deemed a limitation on CHROMADEX’s indemnification liability under this Agreement. CHROMADEX shall provide UM with copies of such policies, upon request of UM. CHROMADEX shall notify UM at least ten (10) days prior to cancellation of any such coverage.
|
7.1
|
Prosecution of Patents
.
|
(a)
|
Responsibilities for Patent Prosecution and Maintenance.
|
|
(i)
|
UM through outside patent counsel is responsible for preparing, filing, and prosecuting any patent applications, maintaining any issued patents, and prosecuting and maintaining any and all continuations, continuations-in-part, divisional, substitutions, reissues, or re-examinations (or the foreign equivalent of these) related to the Patents. CHROMADEX will reimburse UM for patent expenses as detailed in Article 3.4.
|
|
(ii)
|
UM through outside patent counsel will prepare, file, and prosecute patent applications for the Patents in the United States. UM through outside patent counsel will also prepare, file, and prosecute international applications for the Patents under the Patent Cooperation Treaty. CHROMADEX will specify in writing to UM the additional foreign countries in which patent applications are to be filed and prosecuted. UM when possible will notify CHROMADEX ninety (90) days in advance of a national stage filing deadline for all Patents, and CHROMADEX will specify such additional countries no later than thirty (30) days before the national stage filing deadline for the pertinent patent application.
|
(iii)
|
UM through is solely responsible for making decisions regarding the content of U.S. and foreign applications to be filed under Patents and prosecution of the applications, continuations, continuations-in-part, divisional, substitutions, reissues, or re-examinations (or the foreign equivalent of these) related thereto. UM will not seek to narrow the scope of a pending application without obtaining CHROMADEX’s consent, which consent shall not be unreasonably withheld or delayed. UM shall use its good faith efforts to provide CHROMADEX with a copy of all materials to be filed with the U.S. Patent and Trademark Office and its foreign equivalents at least ten (10) business days prior to the planned filing and afford CHROMADEX the right to comment;
provided, however,
in the event such documents are not timely sent, no breach of contract shall be deemed to have occurred.
|
(iv)
|
CHROMADEX will cooperate with UM in the filing, prosecution, and maintenance of any Patents. UM will advise CHROMADEX promptly as to all material developments with respect to the applications. Copies of all papers received and filed in connection with prosecution of applications in all countries will be provided promptly after receipt or filing to CHROMADEX to enable it to advise UM concerning the applications.
|
(vi)
|
Each party agrees to promptly forward all written communications from the other party regarding prosecution of the Patents to its patent counsel as appropriate, with a written confirmation to the other party that the communications have been forwarded.
|
|
In the event that CHROMADEX or UM becomes aware of suspected infringement of the Patent, they shall promptly notify the other parties of such suspected infringement. CHROMADEX or UM directly or together, may bring suit to abate infringement of the Patents, or communicate with a potential infringer, with prior approval from the other parties. In the event that one party intends to bring suit relating to suspected infringement, it shall promptly notify the other parties of its intention to sue so that the other parties may have the opportunity to approve and participate in and share costs and recoveries from said suit. If only one party brings suit and the other parties choose not to participate in said suit, the party that brings the suit shall be liable for all litigation costs and shall be entitled to retain all recoveries therefrom.
|
8.1
|
Confidentiality
. To the extent allowed by law, both parties shall maintain in confidence and shall not disclose to any third party the Confidential Information received pursuant to this Agreement, without the prior written consent of the disclosing party except that the Confidential Information may be disclosed by either party only to those third parties (x) who have a need to know the information in connection with the exercise by either party of its rights under this Agreement and who agreed in writing to keep the information confidential to the same extent as is required of the parties under this Article 8.1, or (y) to whom either party is legally obligated to disclose the information. The foregoing obligation shall not apply to information which:
|
(a)
|
is, at the time of disclosure, publicly known or available to the public, provided that Information will not be deemed to be within the public domain merely because individual parts of such Information are found separately within the public domain, but only if all the material features comprising such Confidential Information are found in combination in the public domain;
|
(b)
|
recipient can demonstrate by written records that Confidential Information was previously known to it prior to disclosure by the disclosing party;
|
(c)
|
is hereafter furnished to recipient by a third party, as a matter of right and without restriction on disclosure,;
|
(d)
|
is made public by disclosing party;
|
(e)
|
is disclosed with the written approval of either party;
|
(f)
|
is the subject of a legally binding court order compelling disclosure, provided that recipient must give disclosing party notice of any request for disclosure pursuant to any legal proceeding, within two (2) business days of receipt of such request by recipient to the extent possible, and recipient must cooperate with disclosing party in disclosing party’s efforts in obtaining appropriate protective orders to preserve the confidentiality of the Confidential Information.
|
8.2
|
Publications
. Should UM desire to disclose publicly, in writing or by oral presentation, Confidential Information related to the Licensed Technology, UM shall notify CHROMADEX in writing of its intention at least ninety (90) days before such disclosure. UM shall include with such notice a description of the oral presentation or, in the case of a manuscript or other proposed written disclosure, a current draft of such written disclosure. CHROMADEX may request UM, no later than ninety (90) days following the receipt of UM’s notice, to file a patent application, copyright or other filing related to such Invention. All such filings shall be subject to the provisions of Article 9.1 of this Agreement. Upon receipt of such request, UM shall arrange for a delay in publication, to permit filing of a patent or other application by the CHROMADEX. Should CHROMADEX reasonably determine that more than ninety (90) days is required in order to file any such patent information (including additional time required to perform additional research required for adequate patent disclosure), or, if CHROMADEX reasonably determines that such Confidential Information cannot be adequately protected through patenting and such Confidential Information has commercial value as a trade secret, then publication or disclosure shall be postponed until the parties can mutually agree upon a reasonable way to proceed.
|
8.3
|
Use of Name
. Neither CHROMADEX nor UM shall directly or indirectly use the other party’s name, seal, logo, trademark, or service mark, or any adaptation of them, or the name of any trustee, officer or employee thereof, without that party’s prior written consent. Neither CHROMADEX nor UM shall disclose the terms of this Agreement to third parties except that UM or CHROMADEX may disclose this Agreement to any sub-licensee or Affiliate and may disclose an accurate description of the terms of this Agreement to the extent required under federal or state securities, tax, grant administration, or other disclosure laws, provided that UM shall take steps to preserve the confidentiality of such information to the extent allowed by law.
|
9.1
|
Term
. This Agreement and the licenses granted herein shall commence on the Effective Date and shall continue, subject to earlier termination under Articles 9.2 or 9.3 hereof, until the expiration of the last to expire of the Patents or for ten (10) years after first commercial sale of a Product, whichever is longer, after which CHROMADEX shall have a fully paid up, royalty free, worldwide right and license to make, have make, use, sell, offer for sale and import Product for any use or purpose. At the end of the Term, the Parties agree to negotiate in good faith an extension of the Agreement so that CHROMADEX may continue to license the remaining Licensed Technology, including but not limited to UM Know-How and Improvements, still used by ChromaDex.
|
9.2
|
Termination by UM
. Upon the occurrence of any of the events set forth below (“Events of Default”), UM shall have the right to terminate this Agreement by giving written
|
notice of termination, such termination effective with the giving of such notice:
|
|
(a) nonpayment of any amount payable to UM that is continuing sixty (60) calendar days after UM gives CHROMADEX written notice of such nonpayment;
|
|
(b) any breach by CHROMADEX of any covenant (other than a payment breach referred to in clause (a) above or a Marketing Plan breach referred to in section 9.3 below) or any representation or warranty contained in this Agreement that is continuing sixty (60) calendar days after UM gives CHROMADEX written notice of such breach;
|
|
(c) CHROMADEX fails to comply with the terms of the license granted under Article 2 hereof and such noncompliance is continuing sixty (60) calendar days after UM gives CHROMADEX notice of such noncompliance;
|
(d) CHROMADEX becomes subject to a Bankruptcy Event; |
|
(e) the dissolution or cessation of operations by CHROMADEX;
|
|
(f) If, during the term of this Agreement, CHROMADEX fails to keep at least one (1) Product on the market after the first commercial sale for a continuous period of one (1) year; where such noncompliance is continuing sixty (60) calendar days after UM gives CHROMADEX written notice of such noncompliance.
|
9.3
|
Marketing Plan.
CHROMADEX shall provide UM with a Marketing Plan that includes CHROMADEX’s research plans and financial projections for the Licensed Technology. Such Marketing Plan will be added to Appendix B and be incorporated herein by reference. UM shall be entitled to terminate this Agreement if CHROMADEX fails to meet the pre-established milestones contained in the Marketing Plan. The milestones may be changed as agreed upon in advance in writing by both parties. UM shall give written notice of its decision to terminate this Agreement specifying a failure of the Marketing Plan milestones. Unless CHROMADEX has remedied such failure or both parties have agreed, in writing, to a revised milestone schedule within sixty (60) days after receipt of such notice, this Agreement will be deemed to terminate as of the expiration of such sixty (60) day period.
|
9.4
|
Termination by CHROMADEX
. CHROMADEX shall have the right to terminate this Agreement, at any time with or without cause, upon sixty (60) days’ written notice to the UM.
|
9.5
|
Rights and Duties Upon Termination
. Within thirty (30) days after termination of this Agreement, each party shall return to the other party any Confidential Information of the other party. In the event of an early termination of this Agreement, CHROMADEX shall have the right to use or sell all the Licensed Product(s) on hand or in the process of manufacturing at the time of such early termination, provided that CHROMADEX shall be obligated to pay to UM a royalty on such sales as set forth in this Agreement if, at that time a royalty or other payment would otherwise by payable pursuant to the terms of this Agreement.
|
|
Within thirty (30) days after termination of this Agreement by the UM under Article 9.2 or by CHROMADEX without Cause under Article 9.4, CHROMADEX, Affiliates and sub-licensees agree:
|
|
(a) to provide UM with copies of all results of research, development and marketing studies pertaining to the Products and Licensed Technology;
|
|
(b) to provide UM an electronic and paper copy of any documents and correspondence related to the Licensed Technology and Product(s) between CHROMADEX and the Food and Drug Administration and other domestic and foreign government agencies; and
|
|
(c) to provide UM with an electronic and paper copy of any and all patent and trademark documents and correspondence related to the Licensed Technology and Product(s) between CHROMADEX and the U.S. Patent Office and foreign government equivalents.
|
|
(d) that UM shall own all right, title and interest in said research, development and marketing results as well as regulatory and intellectual property related applications submitted to all government agencies. CHROMADEX, Affiliates and sub-licensees shall assign all patents related to Product in which UM is not an inventor to UM.
|
|
(e) to perform all acts deemed necessary of desirable by UM to permit and assist it, in evidencing, perfecting, obtaining, maintaining, defending and enforcing UM’s ownership rights and/or any assignment with respect to inventions and patents to be assigned to UM in any and all countries at UM’s expense. Such acts may include, but are not limited to, execution of documents and assistance or cooperation in legal proceedings. Upon termination, CHROMADEX, Affiliates and sub-licensees herby irrevocably designate and appoint UM and its duly authorized officers and agents, as its agents and attorneys-in-fact to act for and in its behalf and instead of CHROMADEX, Affiliates and sub-licensees, to execute and file any documents and to do all other lawfully permitted acts to further the foregoing purposes with the same legal force and effect as if executed by CHROMADEX, Affiliates and sub-licensees.
|
9.6
|
Provisions Surviving Termination
. CHROMADEX’s obligation to pay any royalties accrued but unpaid prior to termination of this Agreement shall survive such termination. CHROMADEX shall owe UM royalties on sales when CHROMADEX has received payments from a sub-licensee or Affiliate. In addition, all provisions required to interpret the rights and obligations of the parties arising prior to the termination date shall survive expiration or termination of this Agreement.
|
10.1
|
Assignment
. This Agreement and the rights and benefits conferred upon CHROMADEX hereunder may not be transferred or assigned to any Person, directly or by merger, by sale or assignment of membership interests in CHROMADEX, or by other operation of law, without the express written permission of UM, which permission will not be unreasonably withheld. Notwithstanding the requirement set forth in the preceding sentence, CHROMADEX may assign or transfer its interests in this Agreement without written permission from UM in the following circumstances:
|
(a)
|
an assignment in connection with the sale or transfer of all or substantially all of CHROMADEX’s assets which relate to the development, manufacture, sale or use of the Patents or a Product(s) provided that the buyer or transferee is at least as financially stable as CHROMADEX and following the sale or transfer would be as capable of performing its obligations under this Agreement as CHROMADEX would be; or
|
(b)
|
an assignment of a security interest in this Agreement as a part of a security interest in all or substantially all of the CHROMADEX’s assets which relate to the Patents or a Product(s). Any prohibited assignment of this Agreement or the rights hereunder shall be null and void. No assignment shall relieve CHROMADEX of responsibility for the performance of any accrued obligations, which it has prior to such assignment. This Agreement shall inure to the benefit of permitted assigns of CHROMADEX.
|
10.2
|
No Waiver
. A waiver by either party of a breach or violation of any provision of this Agreement will not constitute or be construed as a waiver of any subsequent breach or violation of that provision or as a waiver of any breach or violation of any other provision of this Agreement.
|
10.3
|
Independent Contractor
. Nothing herein shall be deemed to establish a relationship of principal and agent between UM and CHROMADEX, nor any of their agents or employees for any purpose whatsoever. This Agreement shall not be construed as constituting UM and CHROMADEX as partners, or as creating any other form of legal association or arrangement which could impose liability upon one party for the act or failure to act of the other party. No employees or staff of UM shall be entitled to any benefits applicable to employees of CHROMADEX. Neither party shall be bound by the acts or conduct of the other party.
|
10.4
|
Notices
. Any notice under this Agreement shall be sufficiently given if sent in writing by prepaid, first class, certified or registered mail, return receipt requested, addressed as follows:
|
University of Mississippi | |
P.O. Box 1848 | |
100 Barr Hall | |
University, MS 38677 | |
Attention: Dr. Walter G. Chambliss | |
Director of Technology Management |
ChromaDex Inc., | |
Chief Financial Officer | |
10005 Muirlands Blvd | |
Suite G | |
Irvine, CA 92818 |
10.5
|
Entire Agreement
. This Agreement embodies the entire understanding between the parties relating to the subject matter hereof and supersedes all prior understandings and agreements, whether written or oral. This Agreement may not be modified or varied except by a written document signed by duly authorized representatives of both parties.
|
10.6
|
Severability
. In the event that any provision of this Agreement shall be held to be unenforceable, invalid or in contravention of applicable law, such provision shall be of no effect, the remaining portions of this Agreement shall continue in full force and effect, and the parties shall negotiate in good faith to replace such provision with a provision which effects to the extent possible the original intent of such provision.
|
10.7
|
Force Majeure.
In the event that either party’s performance of its obligations under this Agreement shall be prevented by any cause beyond its reasonable control, including without limitation acts of God, acts of government, shortage of material, accident, fire, delay or other disaster, provided that the effected party shall have used its reasonable best efforts to avoid or remove the cause of such nonperformance and to minimize the duration and negative affect of such nonperformance, then such effected party’s performance shall be excused and the time for performance shall be extended for the period of delay or inability to perform due to such occurrence. The affected party shall continue performance under this Agreement using its best efforts as soon as such cause is removed.
|
10.8
|
Headings
. Any headings and captions used in this Agreement are for convenience of reference only and shall not affect its construction or interpretation.
|
10.9
|
No Third Party Benefits
. Nothing in this Agreement, express or implied, is intended to confer on any person other than the parties hereto or their permitted assigns, any benefits, rights or remedies.
|
10.10
|
Governing Law
. This Agreement shall be construed in accordance with and governed by the internal laws of the State of Mississippi, excluding such state’s rules relating to conflicts of laws, and its form, execution, validity, construction and effect shall be determined in accordance with such internal laws.
|
10.11 | Counterparts . This Agreement shall become binding when any one or more counterparts hereof, individually or taken together, shall bear the signatures of each of the parties hereto. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against the party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by e-mail shall be effective as delivery of a manually executed counterpart of this Agreement. |
10.12
|
Resolution of Disputes
. In the event of any dispute, controversy or claim arising out of or relating to this Agreement, or to any breach hereof, the parties shall attempt first to resolve the dispute by good faith negotiation. If the parties are unable to reach agreement by negotiating in good faith they agree to seek resolution of the dispute by non-binding mediation in accordance with the mediation rules of the American Arbitration Association (“AAA”).
|
/s/ Walter G. Chambliss | 10/15/14 |
Walter G. Chambliss, Ph.D. | Date |
Director of Technology Management, Office of Research & Sponsored Programs |
/s/ David S. Pasco | 10/17/14 |
David S. Pasco, Ph.D. | Date |
Assistant Director, National Center for Natural Products Research |
/s/ David D Allen | 10/17/14 |
David D Allen, Ph.D. | Date |
Dean, School of Pharmacy |
/s/ Frank Jaksch | 12/1/14 |
Frank Jaksch | Date |
Chief Executive Officer |
CHROMADEX: | UM Agreement ID: | |
Period Covered: | through | |
Prepared by: | Date: | |
(Company Representative) | ||
Approved by: | Date: | |
(Company Representative) |
Country
|
Quantity Produced
|
Quantity Sold
|
Gross Sales ($)
|
*Net Sales ($)
|
Royalty Rate
|
Conversion Rate (if applicable)
|
Royalty Due this Period
|
USA
|
|||||||
Canada
|
|||||||
Japan
|
|||||||
Other:
|
|||||||
TOTAL:
|
TO: | NeutriSci International Inc. ("NeutriSci") |
AND TO: | Disani Capital Corp. ("Disani") |
(i)
|
the transfers of Preferred Shares to each of Alpha and Palladium, as contemplated in the Assignment Agreement, are completed effective immediately prior to the Conversion (as defined below) contemplated by this Agreement, and each of the parties to this Transfer and Notice of Conversion agrees to take all such actions as are necessary in order to complete such transfers;
|
|
(ii)
|
the number of Preferred Shares to be transferred to Alpha shall be 108,676, and not as may otherwise be indicated in the Assignment Agreement; and
|
|
(iii)
|
the number of Preferred Shares to be transferred to Palladium shall be 10,868, and not as may otherwise be indicated in the Assignment Agreement.
|
(i)
|
ChromaDex:
|
3,747,574 Units
|
|
(ii)
|
Palladium:
|
73,900 Units
|
|
(iii)
|
Alpha:
|
739,000 Units
|
CHROMADEX CORPORATION
|
ALPHA CAPITAL ANSTALT
|
|||
Per:
|
/s/ Frank L. Jaksch Jr.
|
Per:
|
/s/ Konrad Ackerman
|
|
Authorized Signatory | Authorized Signatory | |||
|
||||
|
|
|
||
PALLADIUM CAPITAL ADVISORS, LLC
|
NEUTRISCI INTERNATIONAL INC.
|
|||
Per:
|
/s/ Joel Padowitz
|
Per:
|
/s/ Keith Bushfield
|
|
Authorized Signatory | Authorized Signatory | |||
|
||||
|
|
|
||
BRlTLOR HEALTH AND WELLNESS, INC.
|
|
|||
Per:
|
/s/ Keith Bushfield
|
|
||
Authorized Signatory | ||||
|
(a)
|
Transferor has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and otherwise to carry out its obligations hereunder. No consent, approval, or Agreement of any individual or entity is required to be obtained by the Transferor in connection with the execution and performance by the Transferor of this Agreement or the execution and performance by the Transferor of any agreements, instruments, or other obligations entered into in connection with this Agreement.
|
(b)
|
The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and the compliance with the terms hereof will not (i) violate any governmental law or rule applicable to Transferor, (ii) conflict with any provision of the certificate of incorporation or by-laws (or similar organizational document) of Transferor, (iii) conflict with any contract to which Transferor is a party or by which it is otherwise bound, or (iv) require any approval, authorization, consent, license, exemption, filing or registration with any court, arbitrator or governmental entity, other than, subject to the advice of counsel to Transferor, the filing of a Form 8-K pursuant to the rules and regulations promulgated by the Securities and Exchange Commission.
|
(c)
|
Assuming completion of the Conversion, the Transferor has good right, full power and absolute authority to transfer, sell and deliver to the Transferee all respective ownership in the Shares, free of any liens, charges, encumbrances or the like.
|
(d)
|
Transferor shall deliver to the Transferee any other documents necessary or advisable to effect the Transfer.
|
(a)
|
Transferee has the requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby and otherwise to carry out its obligations hereunder. No consent, approval, or agreement of any individual or entity is required to be obtained by the Transferee in connection with the execution and performance by the Transferee of this Agreement or the execution and performance by the Transferee of any agreements, instruments, or other obligations entered into in connection with this Agreement.
|
(b)
|
The execution and delivery of this Agreement do not, and the consummation of the transactions contemplated hereby and the compliance with the terms hereof will not (i) violate any governmental law or rule applicable to Transferee, (ii) conflict with any provision of the certificate of incorporation or by-laws (or similar organizational document) of Transferee, (iii) conflict with any contract to which Transferee is a party or by which it is otherwise bound, or (iv) require any approval, authorization, consent, license, exemption, filing or registration with any court, arbitrator or governmental entity.
|
(c)
|
Transferee shall deliver to the Transferor any other documents necessary or advisable to effect the Transfer.
|
(d)
|
The Transferee acknowledges that the Preferred Shares, the Shares and the Disani Units have not been registered under the United States Securities Act of 1933, as amended nor under the laws of any state of the United States and will be subject to applicable resale restrictions in Canada.
|
(e)
|
Transferee (and each of its designees to be issued the Shares or the Disani Units) (i) is an “accredited investor,” as that term is defined in Regulation D under the Securities Act of 1933, as amended; (ii) has such knowledge, skill and experience in business and financial matters, based on actual participation, that Transferee is capable of evaluating the merits and risks of an investment in the Company and Disani and the suitability thereof as an investment for Transferee; (iii) has received such documents and information as it has requested and has had an opportunity to ask questions of representatives of Company and Disani concerning the terms and conditions of the investment proposed herein, and such questions were answered to the satisfaction of Transferee; and (iv) is in a financial position to hold the Shares and Disani Units for an indefinite time and is able to bear the economic risk and withstand a complete loss of its investment in Company and Disani.
|
(f)
|
Transferee is aware of the Company’s and Disani’s business affairs and financial conditions and has reached an informed and knowledgeable decision to purchase the Shares.
|
(g)
|
Transferee is proceeding on the assumption that the Transferor is in possession of material, non-public information concerning the Transaction, the Company and Disani and their direct and indirect subsidiaries, if any, which is not or may not be known to the Transferee and that the Transferor has not disclosed to the Transferee.
|
(h)
|
Transferee is voluntarily assuming all risks associated with the sale of the Shares and expressly warrants and represents that (i) Transferor has not made, and Transferee disclaims the existence of or its reliance on, any representation by the Transferor concerning the Company, Disani, the Shares or the Disani Units; (ii) Transferee is not relying on any disclosure or non-disclosure made or not made, or the completeness thereof, in connection with or arising out of the Transaction or the sale of the Shares ; (iii) Transferee has no claims against the Transferor with respect to the foregoing and if any such claim may exist, Transferee, recognizing its disclaimer of reliance and the Transferor’s reliance on such disclaimer as a condition to entering into this transaction, covenants and agrees not to assert it against Transferor or Transferor’s respective partners, representatives, agents or affiliates; (iv) Transferor shall have no liability other than delivery of the Shares in accordance with the terms hereunder; and (v) Transferee waives and releases any claim that it might have against the Transferor or any of Transferor’s respective partners, representatives, agents and affiliates whether under applicable securities law or otherwise, based on Transferor’s knowledge, possession, or nondisclosure to Transferee of any material, non-public information concerning the Transaction, the Company, Disani, and their direct and indirect subsidiaries, if any.
|
CHROMADEX CORPORATION
Per:
|
/s/ Frank Jaksch
Authorized Signatory
|
EMPRISE CAPITAL CORPORATION
Per:
|
/s/ Emprise Capital Corporation
Authorized Signatory
|